<PAGE>
<PAGE>
Registration No. 333-______
As filed with the Securities and Exchange Commission on ________ __, 1997
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
SNOWDANCE, INC.
(Exact name of Small Business Issuer in its charter)
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<S> <C> <C>
DELAWARE 7011 04-338-3839
(State or other jurisdiction of (Primary Standard Industrial Classification (I.R.S. Employer
incorporation or organization) Code Number) Identification Number)
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ROUTE 44
BROWNSVILLE, VERMONT 05037
(802) 484-7000
(Address and Telephone Number of Principal Executive Offices)
---------------
STEVEN H. PLAUSTEINER
CHIEF EXECUTIVE OFFICER
SNOWDANCE, INC.
ROUTE 44
BROWNSVILLE, VERMONT 05037
(802) 484-7000
(Name, Address and Telephone Number of Agent For Service)
---------------
Copies to:
DENNIS N. BERMAN, ESQ. LAWRENCE B. FISHER, ESQ.
Sonnenschein Nath & Rosenthal Orrick, Herrington & Sutcliffe LLP
1221 Avenue of the Americas 666 Fifth Avenue
New York, New York 10020 New York, New York 10103
(212) 768-6700 (212) 506-5000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is to be a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
registration statement of the earlier effective registration statement for the
same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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Proposed
maximum
Proposed aggregate
Title of each class of Number of shares to be maximum offering offering Amount of
Securities to be registered registered price per share(1) price(1) registration fee
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock (2).......... 920,000 shares $11.00 $10,120,000 $3,067
- -----------------------------------------------------------------------------------------------------------------
Representative's Warrants 80,000 Warrants(3) $.001 $80 (3)
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Common Stock underlying
the Representative's
Warrants (4) ............. 80,000 shares(4) $13.20 $1,056,000 $320
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Totals.................... -- -- $11,176,080 $3,387
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
(2) Includes 120,000 shares of Common Stock subject to the Underwriters'
over-allotment option.
(3) No fee due pursuant to Rule 457(g).
(4) Pursuant to Rule 416, the Registration Statement also covers such
additional shares of Common Stock as may be issued as a result of the
anti-dilution provisions of the Representative's Warrants.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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SNOWDANCE, INC.
Cross Reference Sheet Showing Location in the Prospectus of Information
Required by Items of Part I of Form SB-2
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FORM SB-2 ITEM NUMBER AND CAPTION CAPTION OR LOCATION IN PROSPECTUS
--------------------------------- ----------------------------------
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1. Front of Registration Statement and Outside Front
Cover Page of Prospectus............................................... Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus ............................................................ Inside Front and Outside Back Cover Pages
3. Summary Information and Risk Factors................................... Outside Front Cover Page; Prospectus Summary;
Risk Factors
4. Use of Proceeds........................................................ Use of Proceeds
5. Determination of Offering Price........................................ Outside Front Cover Page; Risk Factors;
Underwriting
6. Dilution............................................................... Dilution; Risk Factors
7. Selling Security Holders............................................... Underwriting
8. Plan of Distribution................................................... Underwriting
9. Legal Proceedings...................................................... Business
10. Directors, Executive Officers, Promoters and
Control Persons........................................................ Management
11. Security Ownership of Certain Beneficial Owners
and Management......................................................... Principal and Selling Stockholders
12. Description of Securities to be Registered............................. Description of Capital Stock; Underwriting
13. Interest of Named Experts and Counsel.................................. Not Applicable
14. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities ......................... Description of Capital Stock
15. Organization Within Last Five Years.................................... Prospectus Summary; Business; Certain Transactions
16. Description of Business................................................ Prospectus Summary; Business
17. Management's Discussion and Analysis of Financial Management's Discussion and Analysis of Financial
Condition and Results of Operations.................................... Condition and Results of Operations
</TABLE>
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18. Description of Property................................................ Business
19. Certain Relationships and Related Transactions ......................... Business; Certain Transactions
20. Market For Common Equity and Related
Stockholder Matters.................................................... Outside Front Cover Page; Risk Factors; Dividend
Policy; Description of Capital Stock; Shares
Eligible for Future Sale
21. Executive Compensation................................................. Management
22. Financial Statements................................................... Index to Financial Statements
23. Changes in and Disagreements With Accountants
and Financial Disclosure............................................... Not Applicable
</TABLE>
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<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registation statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED AUGUST 11, 1997
PROSPECTUS
800,000 SHARES
SNOWDANCE, INC.
COMMON STOCK
Snowdance, Inc., a Delaware corporation (the "Company"), hereby offers
800,000 shares of common stock, par value $0.001 per share (the "Common Stock").
Prior to this offering (the "Offering"), there has been no public market for the
Common Stock, and there can be no assurance that such a market will develop
after completion of this Offering. It is presently anticipated that the initial
public offering price will be between $9.00 and $11.00 per share. For
information regarding the factors considered in determining the initial public
offering price of the Common Stock, see "Underwriting." The Company intends to
make an application to include the Common Stock on the American Stock Exchange
under the symbol "SNO."
---------------------
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE AND
SUBSTANTIAL DILUTION. SEE "RISK FACTORS" BEGINNING ON PAGE 7 AND "DILUTION."
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW
YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
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PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT (1) COMPANY (2)
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<S> <C> <C> <C>
Per Share .................................. $ $ $
Total (3) .................................. $ $ $
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</TABLE>
(1) Does not include compensation payable to Josephthal Lyon & Ross
Incorporated (the "Representative") in the form of a non-accountable
expense allowance equal to 2.5% of the gross proceeds of this Offering. The
Representative may be deemed to have a "conflict of interest" with the
Company as defined by Rule 2720 of the Conduct Rules of the National
Association of Securities Dealers, Inc. ("NASD"). Therefore, one of the
several Underwriters is acting as a Qualified Independent Underwriter as
that term is defined in Rule 2720. As such, _______________ will be paid a
fee of $____________ in consideration for its services and expenses. In
addition, see "Underwriting" for information concerning indemnification and
contribution arrangements with, and other compensation payable to, the
Underwriters.
(2) Before deducting estimated expenses of $780,000 payable by the Company
which includes the non-accountable expense allowance payable to the
Representative.
(3) Certain stockholders of the Company (the "Selling Stockholders") have
granted to the Underwriters a 45-day option to purchase up to an additional
120,000 shares of Common Stock upon the same terms and conditions as set
forth above, solely to cover over-allotments, if any. If such
over-allotment option is exercised in full, the total Price to Public,
Underwriting Discount and Proceeds to Company will be $ , $ ,
and $ , respectively. See "Underwriting."
The shares of Common Stock are offered by the Underwriters, subject to
prior sale, when, as and if delivered to and accepted by the Underwriters, and
subject to approval of certain legal matters by their counsel and to certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify this offering and to reject any order in whole or in part. It is expected
that delivery of the shares of Common Stock offered hereby will be made against
payment on or about ___________ __, 1997 at the offices of Josephthal Lyon &
Ross Incorporated, New York, New York.
JOSEPHTHAL LYON & ROSS
_____________ ____, 1997
<PAGE>
<PAGE>
[Inside Front Cover]
[PHOTOS]
----------
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING PURCHASES OF THE COMMON STOCK TO STABILIZE ITS MARKET PRICE, PURCHASES
OF THE COMMON STOCK TO COVER SOME OR ALL OF A SHORT POSITION IN THE COMMON STOCK
MAINTAINED BY THE UNDERWRITERS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
THE COMPANY WILL FURNISH ITS STOCKHOLDERS WITH ANNUAL REPORTS CONTAINING
AUDITED FINANCIAL STATEMENTS CERTIFIED BY AN INDEPENDENT PUBLIC ACCOUNTING FIRM
AND WILL MAKE AVAILABLE QUARTERLY REPORTS CONTAINING UNAUDITED FINANCIAL
STATEMENTS FOR THE FIRST THREE QUARTERS OF EACH FISCAL YEAR.
<PAGE>
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus. Unless otherwise noted, all information in this
Prospectus assumes: (i) that the Underwriters' over-allotment option to purchase
up to 120,000 shares of Common Stock from certain stockholders of the Company
(the "Selling Stockholders") has not been exercised; (ii) that the acquisition
of Hogback Mountain has been consummated (the "Hogback Acquisition"); (iii) that
the Representative's Warrants to purchase 80,000 shares of Common Stock have not
been exercised; (iv) that all of the interests in each of Ascutney Mountain
Resort, L.P. and its affiliates, directly or indirectly, shall have been
exchanged for shares of common stock of Snowdance, Inc. (the "Combination
Transaction") and (v) the conversion of a portion of the Related Loans
(as defined in "Certain Transactions") to a capital contribution to the Company.
See "Business -- Business Strategy - Opportunities For Further Development,"
"Certain Transactions" and "Underwriting."
Unless the context otherwise requires, the term "Company" refers to (a)
Ascutney Mountain Resort, L.P. and its affiliates, as such entities existed
prior to the consummation of this Offering and the Combination Transaction, when
used with respect to historical information herein contained, and (b) Snowdance,
Inc. and its subsidiary as such entities exist immediately following this
Offering, when used with respect to information about events occurring upon
completion of or after this Offering and the Hogback Acquisition or when giving
pro forma effect thereto.
This Prospectus includes forward-looking statements which involve known
and unknown risks and uncertainties or other factors that may cause actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Factors that might cause such differences
include, but are not limited to, those discussed under the heading "Risk
Factors." An investment in the securities offered hereby involves a high degree
of risk. See "Risk Factors."
THE COMPANY
Snowdance, Inc. owns and operates one of the premier fully-integrated,
all-season mountain resorts in New England, comprised of approximately
750 acres, including the Ascutney Mountain ski area located in Brownsville,
Vermont. The Ascutney Mountain Resort (the "Resort") is a four-season,
destination resort that includes the ski area, a 212-room hotel (the
fourth largest resort hotel in Vermont), an approximately 18,000 square
foot comprehensive sports and fitness center, a three-story base lodge, a ski
and rental shop, four restaurants, approximately 30,000 square feet of
conference facilities, and 17 slope-side condominium units to be leased from the
present owners, all set in a New England style village. While the Resort offers
many of the benefits provided by larger ski facilities, it also retains a
family-oriented, friendly atmosphere. The Company provides a comprehensive
destination resort experience by combining quality ski facilities and resort
services, including convenient ski-on/ski-off lodging, with attractive
four-season amenities. The Resort attracts guests primarily due to its
affordable family-oriented vacations in a self-contained resort village with
easy accessibility from most major metropolitan areas in the northeastern United
States. In 1995, Ascutney Mountain ski area was ranked among the top three ski
resorts for value and the top four ski resorts for families, in the eastern
United States, by Skiing magazine.
The Company's operating formula links the staged expansion of its
mountain facilities with the strategic development of its real estate. Since
1993, the Company has expanded and enhanced its core ski operations, while
increasing the range of complementary activities and services offered to its
guests throughout the year. The Company's focus is on further developing a
comprehensive resort experience that will largely attract family-oriented
destination guests who tend to generate higher and more diversified revenues per
guest than day skiers. The Company believes that the demographics of those
guests are similar to those of the vacation real estate purchaser. The Company
plans to initiate a vacation ownership interval marketing program at its hotel,
and to increase and develop its real estate holdings. As part of its strategy to
increase its real estate, the Company will acquire Hogback Mountain, consisting
of approximately 800 acres in southern Vermont.
The Company believes that it benefits from current trends which favorably
affect the North American mountain resort industry, including (i) new innovative
equipment for skiers, such as parabolic or shaped skis which facilitate learning
and enhance performance, (ii) increased participation in mountain resort sports
such as snowboarding, mountain biking and hiking which are among the fastest
growing sports in North America and (iii) demographics under which (a) the large
"baby boom" generation is entering the 45-65 year age category which
traditionally is the age group with the largest number of buyers of vacation
property and (b) the "echo boom" generation is entering the teenage years, one
of the age groups with the most skiing and snowboarding activity. Moreover, the
Company believes that these trends will continue to attract additional
destination guests and increase demand from affluent families for vacation real
estate in mountain resorts.
Ascutney Mountain Resort
Since 1983, more than $85 million was invested in connection with the
expansion and development of the Resort. The Resort is located in central
Vermont's Connecticut River Valley and is the closest major Vermont ski resort
to Interstate I-91, one of the two main highways in Vermont. Hartford, Boston
and Albany are within a 2-1/2 hour drive and Providence, Montreal and New York
City are within a 4-1/2 hour drive. Air transportation is available at the
Lebanon, New Hampshire airport 18 miles away.
3
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The Resort is one of Vermont's 14 major ski resorts, with a 1,530 foot
vertical rise on Mt. Ascutney. The ski area includes four chairlifts, 31 trails
and 115 skiable acres. Snowmaking capability covers approximately 75% of the
skiable terrain. There are approximately 20 miles of cross-country trails which
range from open meadows suitable for beginners to mountain touring trails
suitable for more advanced skiers. At the base of the mountain, tubing, ice
skating, children's programs and apres ski entertainment are available. The
Resort's skier days exceeded 53,000 during the 1996-97 ski season, representing
an increase of approximately 26% since the commencement of operations in 1993
under its current management team.
The Company currently owns and controls all of the Resort's operations,
enabling it to capture a high percentage of the total spending by its year-round
guests during their visit to the Resort. Accordingly, while lift ticket sales
are traditionally the largest source of revenues for most ski resorts, the
Company has a diversified revenue mix, including revenues from lodging, food
services, lift tickets, ski school, sports and fitness center, day care and
retail shops (with lodging revenue being its largest source of revenue in 1996).
The Company seeks to maximize and diversify these revenue sources through the
expansion and development programs discussed below.
Business Strategy
The Company plans to continue to enhance the skiing experience at the
Resort through major upgrades to the ski lifts, snowmaking, grooming and trail
systems. Principal improvements include the addition of one new high-speed quad
chairlift as well as the relocation of one of the existing chairlifts,
increasing the mountain's total uphill capacity by more than 45% to
approximately 6,350 skiers per hour. In addition, the Company plans to increase
snowmaking capabilities, bringing coverage to approximately 95% of Mt.
Ascutney's skiable terrain. Major trail modifications have been designed to
allow different levels of skiers to utilize more of the mountain when combined
with the planned increased snowmaking. Additionally, the Company intends to
explore the expansion of the Resort's ski operations to the peak of Mt.
Ascutney, which if successfully achieved would result in the Resort having the
fourth highest vertical rise of any Vermont ski operation. The Company also
plans to utilize funds for hotel improvements as well as the acquisition of
Resort equipment and computer systems.
The Company intends to implement a multi-stage plan to realize the
significant value of its real estate. The Company plans to offer weekly vacation
ownership intervals ("VOIs") in the Resort hotel beginning in 1998. Accordingly,
the Company is in discussions with various real estate and vacation ownership
development companies regarding the marketing and sale of up to 5,200 VOIs in
the hotel as well as the development of additional units of new construction at
the Resort. The Company believes that the sale of VOIs in its existing hotel
will increase destination visitors to the Resort which should increase total
Resort revenues and provide capital for further development.
In addition to further developing its real estate holdings as part of the
overall expansion of the Resort, the Company is assessing the feasibility of an
18-hole golf course with additional adjacent residential units on land currently
owned by the Company. The original master development plan for the Resort
contemplated approximately 560 residential units (172 of which have already been
built), an 18-hole golf course and further commercial development. In 1986, the
Resort had applied for conceptual approval in accordance with Vermont's
principal environmental law, Act 250, for a golf course on-site and was issued a
conceptual Land Use Permit on the basis of the application, which permit has
since expired. Typically, golf is a primary attraction for mountain resorts in
the summer and shoulder seasons, generating additional revenues and increasing
the overall value of resort real estate.
Upon the closing of this Offering, the Company will acquire a former day
ski area known as Hogback Mountain, which covers approximately 800 acres of land
located in southern Vermont and includes building containing a restaurant, a
gift shop and two small museums. Hogback Mountain is located within 20 miles of
the Mt. Snow and Haystack ski areas and offers an unobstructed, panoramic view
of three states. Hogback Mountain is within 30 minutes driving distance to
several ski areas, golf courses, lakes, annual music festivals and other
attractions. The Company believes that Hogback Mountain offers attractive
development potential.
4
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THE OFFERING
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Common Stock Offered....................................... 800,000 shares
Common Stock to be Outstanding After the Offering.......... 3,300,000 shares(1)
Use of Proceeds by the Company............................. The Company intends to apply the net
proceeds of the Offering to: upgrade its ski
lifts, snowmaking, grooming and trail
systems; develop the Resort's real estate;
purchase mountain equipment; make hotel
and resort improvements; retire certain
debt; and working capital and general cor-
porate purposes, including possible busi-
ness acquisitions. See "Use of Proceeds."
Risk Factors ............................................... This Offering involves a high degree of
risk and immediate and substantial dilution.
See "Risk Factors" and "Dilution."
Proposed American Stock Exchange Symbol..................... SNO
</TABLE>
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(1) Excludes 150,000 shares of Common Stock underlying options available
for future grants under the Company's 1997 Stock Option Plan for Non-Employee
Directors. See "Management -- 1997 Stock Option Plan for Non-Employee
Directors."
Snowdance, Inc. was incorporated in 1997, as successor to each of Ascutney
Mountain Resort Hotel, L.P., Ascutney Mountain Resort, L.P. and Ascutney
Mountain Resort Realty, L.P. The Company's principal executive offices are
located at Route 44, Brownsville, Vermont 05037, and its telephone number is
(802) 484 - 7000. The Company maintains a web site at http://www.ascutney.com.
The contents of the Company's web site are not a part of this Prospectus.
5
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<PAGE>
SUMMARY FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
The summary financial information set forth below should be read in
conjunction with financial statements appearing elsewhere in this Prospectus.
The summary historical financial data presented below has been derived from the
Company's financial statements. The unaudited pro forma summary financial data
is derived from the unaudited pro forma financial data presented elsewhere in
this Prospectus. The statement of operations data for the three-month period
ended March 31, 1997 is not necessarily indicative of the results of operations
that may be expected for the full year.
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<CAPTION>
HISTORICAL HISTORICAL PRO FORMA HISTORICAL THREE MONTHS
YEAR ENDED YEAR ENDED YEAR ENDED ENDED MARCH 31, PRO FORMA
DECEMBER 31, DECEMBER 31, DECEMBER 31, ------------------------- THREE MONTHS ENDED
1995 1996 1996(1) 1996 1997 MARCH 31, 1997(1)
------ ------ ------- ----- ------ ------------------
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STATEMENT OF OPERATIONS DATA:
Revenues ............................. $3,866,418 $ 3,983,218 $ 3,983,218 $1,617,321 $1,991,284 $1,991,284
Net income (loss) .................... (576,689) (1,500,819) (1,414,829) (175,082) 256,926 155,100
Weighted average shares outstanding .. 2,000,000 2,000,000 3,300,000 2,000,000 2,000,000 3,300,000
Income (loss) per common share ....... $ (.29) $ (.75) $ (.43) $ (.09) $ .13 $ .05
</TABLE>
<TABLE>
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HISTORICAL HISTORICAL PRO FORMA
DECEMBER 31, 1996 MARCH 31, 1997 MARCH 31, 1997(2)
----------------- -------------- ------------------
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BALANCE SHEET DATA:
Total assets.............................. $1,589,366 $1,532,624 $12,382,624
Long-term debt............................ 2,481,025 2,436,614 681,014
Total liabilities......................... 3,638,521 3,324,853 1,394,253
Stockholders' equity (deficit)............ (2,049,155) (1,792,229) 10,988,371
</TABLE>
- --------------
(1) As adjusted to give effect to (i) the closing of the Offering and the
application of the estimated net proceeds therefrom, (ii) the Hogback
Acquisition, (iii) the Combination Transaction and (iv) the conversion of a
portion of the Related Loans (as defined in "Certain Transactions") to a
capital contribution to the Company as if such transactions and the
Offering had occurred on January 1, 1996.
(2) As adjusted to give effect to (i) the closing of the Offering and the
application of the estimated net proceeds therefrom, (ii) the Hogback
Acquisition, (iii) the Combination Transaction and (iv) the conversion
of a portion of the Related Loans to a capital contribution to the
Company as if such transactions and the Offering had occurred on
March 31, 1997.
6
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<PAGE>
RISK FACTORS
An investment in the securities offered hereby is speculative in nature
and involves a high degree of risk. Each prospective purchaser of the Common
Stock should carefully consider the following risk factors, as well as the other
information contained, and incorporated by reference, in this Prospectus before
making an investment decision. Information contained or incorporated by
reference in this Prospectus contains "forward-looking statements" which can be
identified by the use of forward-looking terminology such as "believes,"
"expects," "intends," "may," "will," "should" or "anticipates" or the negative
thereof or other variations thereon or comparable terminology, or by discussions
of strategy or plans. See, e.g., "Business -- Business Strategy." No assurance
can be given that the future results covered by the forward-looking statements
will be achieved. The following matters constitute cautionary statements
identifying important factors with respect to such forward-looking statements,
including certain risks and uncertainties, that could cause actual results to
vary materially or adversely from the future results covered in such
forward-looking statements. Factors that could cause actual results to vary
materially or adversely from the future results covered in such forward-looking
statements include, but are not limited to, those discussed below as well as
those discussed elsewhere in the Prospectus.
LIMITED OPERATING HISTORY; SIGNIFICANT AND CONTINUING LOSSES. The
Company was formed in August 1993 in connection with the purchase of the assets
of the Ascutney Mountain Resort in an auction by the United States Bankruptcy
Court for the District of Vermont in accordance with Chapter 7 of the United
States Bankruptcy Code. The Ascutney Mountain Resort was purchased by three
limited partnerships, the predecessors in interest to the Company: Ascutney
Mountain Resort Hotel, L.P., Ascutney Mountain Resort, L.P. and Ascutney
Mountain Resort Realty, L.P. (collectively, the "Limited Partnerships"). The
Resort has only operated under current management since September 1993 and,
accordingly, the Company has a limited operating history upon which an
evaluation of the Company's performance and prospects can be made. Since the
inception of the Limited Partnerships, the predecessors in interest to the
Company, significant annual losses have been incurred, including losses
of $576,689 and $1,500,819, for the years ended December 31, 1995 and 1996,
respectively. Although the Company generated net income during the three months
ended March 31, 1997, there can be no assurance that profitability can be
maintained. It is possible that losses and negative cash flow will continue
until such time, if ever, as the Company is able to generate sufficient revenues
to offset its operating costs. The Company's prospects must be considered in
light of the numerous risks, expenses, delays, problems and difficulties
frequently encountered in the establishment of a new business, particularly in
an industry characterized by vigorous competition. To address these risks, the
Company must, among other things, establish and increase market acceptance of
its products and services, respond effectively to competitive pressures and
successfully market its products and services. There can be no assurance that
the Company will generate significant revenues or maintain profitable
operations. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Financial Statements.
7
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SEASONALITY OF OPERATIONS. Ski resort operations are highly seasonal. In
fiscal 1996 approximately 56% of the Company's operations revenue was generated
in the months of January, February, March and December, with approximately 44%
generated during the period from April to November. Furthermore, a significant
portion of operations revenue is generated on certain holidays, particularly
Christmas, President's Day and school spring breaks, and on weekends. Problems
during these peak periods, such as adverse weather conditions and equipment
failures, could have a material adverse effect on the Company's business,
financial condition and results of operations. Additionally, the Company has a
limited revolving line of credit on which it can draw during this period to
finance its working capital requirements. A reduction in this credit facility,
particularly during peak periods, could have a material adverse effect on the
Company's business, financial condition and results of operations. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations."
UNFAVORABLE WEATHER CONDITIONS. The Company's ability to attract
visitors to the Resort is substantially influenced by weather conditions and the
amount of snowfall during the ski season. Adverse weather conditions typically
discourage visitors from participating in outdoor activities at the Resort. In
addition, unseasonably warm weather may result in inadequate snowfall, which
increases the cost of snowmaking, and could render snowmaking wholly or
partially ineffective in maintaining quality skiing conditions. Prolonged
periods of adverse weather conditions, or the occurrence of such conditions
during peak periods of the ski season, could have a material adverse effect on
the Company's business, financial condition and results of operations.
ECONOMIC DOWNTURN. Both skiing and golf are discretionary recreational
activities with relatively high participation costs. An economic downturn could
reduce spending on resort vacations and result in declines in the number of ski
visitors and revenues per visit at the Resort. A decrease in Resort visitors may
also result in a decrease in demand for Resort real estate. There can be no
assurance that an economic downturn will not have a material adverse effect on
the Company's business, financial condition and results of operations.
UNCERTAINTY OF DEVELOPMENT OF VACATION OWNERSHIP INTERVALS AND GOLF
COURSE DEVELOPMENT. The Company's strategy is designed, in large part, to
increase and balance year-round utilization and to enhance real estate values at
the Resort. Accordingly, the Company's success will depend, in large part, upon
its ability to develop a more comprehensive resort experience beyond its ski
operations, including the development of vacation ownership intervals ("VOIs")
at its Resort. In connection with such efforts, the Company is expected to be
largely dependent upon an experienced developer and operator of resort real
estate. The Company is currently in discussions with various real estate and
vacation ownership development companies regarding the marketing and sale of
VOIs in the Resort's hotel as well as the development of additional units at the
Resort. There can be no assurance that the Company will enter into any
agreement, or sell any VOIs or construct any additional units in the event that
any such agreement is reached, nor can there be any assurance that vacation
ownership operations would be suitably developed and commenced in a timely
manner or that the Company
8
<PAGE>
<PAGE>
would realize any benefits from such an operation or that the development and
marketing partner will not default on any of its obligations. The Company's
business strategy also includes the potential development and construction of a
golf course. Although the previous owner of the Resort had obtained a conceptual
Land Use Permit under Vermont's principal environmental law, Act 250, for a golf
course at the Resort, no design or formal development program has commenced or
previously commenced for such golf course nor have any current permits been
obtained. The conceptual Land Use Permit formerly received under Act 250 has
expired. Accordingly, there can be no assurance that the Company will develop a
golf course in a timely manner, upon acceptable terms favorable to the Company
or at all.
VACATION OWNERSHIP INDUSTRY OPERATING RISKS. The Company, through a
potential joint venture or other arrangement with a real estate or vacation
ownership development company (the "Future Joint Venture"), intends to commence
the sale of VOIs in the Resort's hotel, designed to increase destination
visitors to the Resort and increase total Resort revenue. Accordingly, the
Future Joint Venture's business is expected to be subject to all of the
operating risks inherent in the vacation ownership industry. These risks
include, but are not limited to, the possibility of an oversupply of VOIs, a
reduction in demand for VOIs, changes in travel and vacation patterns, changes
in governmental regulation of the vacation ownership industry and increases in
taxes or construction costs for new construction, as well as negative publicity
concerning the industry generally. The vacation ownership industry is highly
fragmented, containing a large number of developers. In the past, the vacation
ownership industry as a whole has experienced a negative image as a result of
various developers employing high pressure sales and marketing tactics,
constructing low quality units and engaging in other potentially misleading
practices. Consequently, negative publicity with respect to any one or more
developers in the vacation ownership industry could have a disproportionate
effect on all of the developers and marketers in the industry. There can be no
assurance that any arrangement related to the marketing and sale of VOIs in the
Resort's hotel will be reached.
RISKS OF JOINT VENTURE OPERATIONS. The Company anticipates that it will
conduct its VOI business through the Future Joint Venture, which the Company may
co-manage. The Company's Future Joint Venture partner may from time to time have
economic or business interests or goals which are inconsistent with the business
interests or goals of the Company. Further, the Company may be required to
consider the interests of such Future Joint Venture partner in connection with
decisions concerning the operations of the Future Joint Venture. In addition,
the Future Joint Venture may face government imposed or other restrictions, from
time to time, on its ability to transfer funds to the Company. The Company also
faces the risks that its Future Joint Venture partner may be unable to meet its
economic or other obligations and that the Company may be required or choose to
fulfill those obligations.
INEXPERIENCE OF THE COMPANY IN VACATION OWNERSHIP INDUSTRY. As part of
the Company's business strategy, the Company, through the Future Joint Venture,
plans on
9
<PAGE>
<PAGE>
entering a line of business that is not currently part of its core business. As
a result, the Company, with its Future Joint Venture partner, may co-manage
the development of a VOI program constituting a line of business in which the
Company has not previously participated. Although the Company's strategy
includes the formation of a joint venture or other arrangement with a real
estate or vacation ownership development company in order to mitigate risks
associated with the VOI program, the arrangement is expected to require the
significant involvement of the Company's senior management and may also involve
the investment of additional capital. The Company's senior management has no
experience in the vacation ownership industry. There can be no assurance that
the Company will successfully implement its VOI program. See "Business--Business
Strategy."
GROWTH INITIATIVES. The Company is currently engaged in and has plans
for a variety of development projects relating to the Resort's ski and hotel
operations as well as real estate operations. There can be no assurance (i) as
to when or whether such projects will be completed, (ii) that the Company's
estimated costs associated with such projects will prove to be accurate, (iii)
that the Company will receive the expected benefits from such projects, or (iv)
that the Company will receive the necessary regulatory approvals for such
projects. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business -- Business Strategy."
CAPITAL EXPENDITURES AND POSSIBLE NEED FOR ADDITIONAL CAPITAL. The
Company operates in a capital intensive industry and requires significant
capital expenditures to maintain its competitive position. The Company expects
to make significant capital expenditures in the future to enhance and maintain
the operations of the Resort and to develop its real estate holdings. The
Company anticipates that, based on its present plans, the net proceeds of this
Offering, when combined with the Company's existing capital resources and
anticipated revenues from operations, will be sufficient to enable it to
maintain its current and planned operations for a period of at least 12 months
after consummation of this Offering. In the event that the Company's plans
change or its assumptions change or prove to be inaccurate or if the net
proceeds of this Offering or cash flow prove to be insufficient (due to
unanticipated expenses or otherwise), the Company may seek to minimize cash
expenditures and/or obtain additional financing in order to support its plan of
operations. Additional funding, whether obtained through public or private debt
or equity financings, or from strategic alliances, may not be available when
needed or may not be available on terms acceptable to the Company, if at all.
Additional financings may result in dilution to existing stockholders. Failure
to secure needed additional financing, if and when needed, may have a material
adverse effect on the Company's business, financial condition and results of
operations. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources" and "Business --
Business Strategy."
COMPETITION IN THE SKI RESORT INDUSTRY. The industry in which the
Company operates is highly competitive. The Resort competes for both destination
and day skiers with other mountain resorts in the United States, Canada and
Europe, including other ski
10
<PAGE>
<PAGE>
resorts in Vermont (many of which have greater financial resources, greater name
recognition and a greater share of the market). The competitive position of the
Resort is dependent upon many variables, including location and accessibility,
quality of snow conditions and terrain, extent and quality of Resort facilities,
quality of service, price for services and nature of reputation. There can be
no assurance that the Company's principal competitors will not be successful in
capturing a share of the Company's present or potential customer base. The
Company also faces competition for destination visitors from other leisure
industry companies. Such competitors may be better positioned to withstand
adverse weather or economic conditions and they may have greater financial
resources to develop new attractions. With respect to day skiers, the Resort
faces competition from alternative recreational activities, many of which have
lower participation costs. See "Business--Competition."
CONTROL BY PRINCIPAL STOCKHOLDERS. Following the Offering, Steven and
Susan Plausteiner, the Company's Chief Executive Officer and Chief Financial
Officer, respectively (the "Principal Stockholders") will beneficially own or
control approximately 60% of the Company's outstanding shares of Common Stock,
giving the Principal Stockholders approximately 60% of the combined voting power
with respect to all matters submitted for a vote of all stockholders. Subsequent
to the closing of the Offering, the Principal Stockholders will be able to elect
all of the Board of Directors of the Company, control the approval of matters
requiring approval by the Board of Directors and control decisions on matters
submitted for stockholder consideration. This concentration of ownership under
certain circumstances could have the effect of delaying or preventing a change
in control of the Company.
DEPENDENCE ON KEY EMPLOYEES. The success of the Company depends
significantly on its senior management, including Steven Plausteiner, the
Company's Chairman and Chief Executive Officer, Susan Plausteiner, the Company's
Chief Financial Officer, and Dusan Plausteiner, the Company's Chief Operating
Officer. Although the Company will have entered into employment agreements prior
to the consummation of the Offering with the Company's Chief Executive Officer
and the Chief Financial Officer, there can be no assurance that such individuals
will continue in their respective capacities with the Company for any particular
period of time. See "Management -- Employment Agreements." The unanticipated
departure of any key member of the Company's management team could have a
material adverse effect on the Company's business, financial condition and
results of operations. In addition, the Company does not have, and does not
contemplate securing, "key-man" life insurance for any of its key employees. The
Company's future success also depends on its ability to attract and retain
additional highly qualified personnel experienced in the industry. Competition
for qualified personnel is intense and there can be no assurance that the
Company will be able to attract or retain personnel in the future. See
"Management."
PERMITS AND REGULATORY MATTERS. The Company is subject to various laws
and regulations relating to the operation of its Resort and related activities,
which are administered by numerous federal, state and local governmental
agencies. In particular,
11
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<PAGE>
development of the Company's property in Vermont is subject to comprehensive
Vermont environmental legislation, commonly referred to as Act 250, as well as
other state administrative regulations. This regulatory framework, in general,
encompasses such areas as water quantity and quality, air quality, traffic
considerations, availability of municipal services, use of natural resources,
impact of growth, energy conservation and utility services, conformity with
local and regional plans, and public building approvals, together with a number
of other safety and health regulations. Additionally, each municipality has its
own planning and zoning requirements. Permits and approvals mandated by such
regulation for development of any magnitude are often numerous, significantly
time-consuming and onerous to obtain and not guaranteed. The permit processes
are administered by numerous state, regional and local boards and agencies with
independent jurisdictions. Permits, when received, are subject to appeal or
collateral attack and, in some cases, are of limited duration, after which
review is necessary. These requirements have a direct bearing on the ability of
the Company or others to further develop their resorts in Vermont. While the
Company believes that its operations are in full compliance in all material
respects with applicable federal, state and local requirements, the Company's
growth and development opportunities in Vermont may be limited and more costly
as a result of legislative, regulatory or municipal requirements. In particular,
to further expand the Resort's ski operations to the peak of Mt. Ascutney, the
Company would be required to lease land from either the State of Vermont and/or
the Town of West Windsor. Under the terms of such lease, either the Vermont
Department of Forests and Parks or the Town of West Windsor or both would be
expected to have the right to review and comment on the location, design and
construction of improvements on the leased land and on many operational matters.
If the Company does enter into such a lease, a termination of the lease could
have a material adverse effect on the Company's business, financial condition
and results of operations. To the Company's knowledge, no lease for a ski resort
has ever been terminated by the Vermont Department of Forests and Parks. The
Company believes that its relationship with all governmental agencies is good.
See "Business --Regulation and Legislation."
REGULATION OF MARKETING AND SALES OF VACATION OWNERSHIP INTERVALS. The
marketing and sales of VOIs and related operations are subject to extensive
regulation by the federal government and states in which the Future Joint
Venture's VOIs are expected to be marketed and sold. The federal government and
many states have adopted specific laws and regulations regarding the sale of
VOIs, telemarketing and certain of the Future Joint Venture's other potential
related activities. However, no assurance can be given that the cost of
complying with laws and regulations in all jurisdictions in which the Future
Joint Venture may conduct sales of VOIs would not be significant, would not
impair the cost-effectiveness of the marketing programs, or that the Future
Joint Venture would in fact be in compliance with all applicable laws and
regulations. See "Business -- Regulation and Legislation."
COMPETITION IN VACATION OWNERSHIP INTERVALS. As the Future Joint Venture
develops its marketing plan of VOIs, the Future Joint Venture may experience
significant competition for customers and for qualified personnel from other
entities engaged in the
12
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<PAGE>
business of resort development, sales and operations, including vacation
interval ownership, condominiums, hotels and motels. Many well-known lodging,
hospitality and entertainment companies have begun to develop and sell VOIs in
resort properties, including ski resorts and other vacation resorts. While many
of the companies have targeted a different market segment than the Company's
market segment, there can be no assurance that the Company and those companies
will not compete on a direct or indirect basis or more broadly. In such event,
the Company will be required to compete with companies that may have
significantly greater resources. See "Business--Competition."
UNCERTAINTY OF ADEQUACY OF INSURANCE COVERAGE. The Company is insured
against property damage, business interruption and general liability. There can
be no assurance that such insurance will remain available to the Company at
commercially reasonable rates or that the amount of such coverage will be
adequate to cover any liability incurred by the Company. If the Company is held
liable for amounts exceeding the limits of its insurance coverage or for claims
outside the scope of that coverage, its business, financial condition and
results of operations could be materially adversely affected.
POTENTIAL CONFLICT OF INTEREST OF THE REPRESENTATIVE. Under Rule 2720 of
the Conduct Rules of the National Association of Securities Dealers, Inc.
("NASD"), the Representative may be deemed to be an "affiliate" of the Company
and to have a "conflict of interest" with the Company by virtue of the fact that
affiliates of the Representative may be deemed to beneficially own greater than
10% of the voting stock of the Company as a result of the consummation of the
Hogback Acquisition. See "Underwriting."
NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE. Prior to the
Offering, there has been no public market for the Common Stock, and no assurance
can be given that an active public market for the Common Stock will develop or
be sustained after the Offering. Since there has been no active public market,
the initial public offering price may not bear any relationship to the actual
value of the Common Stock. The initial public offering price per share of the
Common Stock was determined by negotiations between the Company and the
Qualified Independent Underwriter and is not necessarily related to the
Company's asset value, net worth or other established criteria of value, and may
not be indicative of the prices that will prevail in the public market. The
Company believes that there are relatively few comparable companies that have
publicly-traded equity securities which may also impact the trading price of the
Common Stock after the Offering. See "Underwriting." In addition, the stock
market has from time to time experienced price and volume fluctuations that are
often unrelated to the operating performance of particular companies. The market
price of the Common Stock, similar to that of securities of other developing
companies, may be highly volatile. The market price of the Common Stock could be
subject to significant fluctuations in response to the Company's operating
results and other factors, and there can be no assurance that
13
<PAGE>
<PAGE>
the market price of the Common Stock will not decline below the initial public
offering price.
SHARES ELIGIBLE FOR FUTURE SALE. Upon completion of this Offering, the
Company will have 3,300,000 shares of Common Stock outstanding. The 800,000
shares of Common Stock sold in this Offering will be freely tradeable without
restriction under the Securities Act of 1933, as amended (the "Securities Act"),
except for any shares which may be purchased by an "affiliate" of the Company.
The Company and the Company's officers, directors and existing stockholders have
agreed, not to, directly or indirectly, offer, sell, contract to sell, transfer,
hypothecate or otherwise dispose of any shares of Common Stock or securities
convertible into Common Stock for a period of thirteen (13) months following the
date of the final Prospectus without the joint prior written consent of the
Representative of the Underwriters and the Company. After such time, 2,500,000
of the shares subject to this restriction will be eligible for sale in the
public market pursuant to Rule 144 under the Securities Act, subject to volume
limitations and other restrictions contained in Rule 144. No prediction can be
made as to the effect, if any, that future sales of shares, or the availability
of shares for future sale, will have on the market price of the Common Stock
from time to time. Sales of substantial amounts of Common Stock in the public
market, or the perception that such sales could occur, could adversely affect
prevailing market prices for the Common Stock and could impair the Company's
ability to raise additional capital through an offering of its equity
securities. See "Shares Eligible for Future Sale."
POTENTIAL ADVERSE EFFECT OF REPRESENTATIVE'S WARRANTS. At the
consummation of this Offering, the Company will sell to the Representative for
nominal consideration the Representative's Warrants to purchase 80,000 shares of
Common Stock (the "Representative's Warrants"). The Representative's Warrants
will be exercisable for a period of four years commencing one year from the date
of this Prospectus at an exercise price equal to 120% of the initial public
offering price per share of Common Stock. For the term of the Representative's
Warrants, the holders thereof will have, at nominal cost, the opportunity to
profit from a rise in the market price of the Common Stock without assuming the
risk of ownership, with a resulting dilution in the interest of other security
holders. As long as the Representative's Warrants remain unexercised, the
Company's ability to obtain additional capital might be adversely affected.
Moreover, the holders of the Representative's Warrants may be expected to
exercise such Warrants at a time when the Company would, in all likelihood, be
able to obtain any needed capital through a new offering of its securities on
terms more favorable than those provided by the Representative's Warrants. See
"Underwriting."
POSSIBLE ADVERSE EFFECTS OF AUTHORIZATION OF PREFERRED STOCK;
ANTI-TAKEOVER PROVISIONS. The Company's Certificate of Incorporation authorizes
the issuance of 100,000 shares of "blank check" preferred stock with such
designations, rights and preferences as may be determined from time to time by
the Board of Directors. Accordingly, the Board of Directors is empowered,
without stockholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights which
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<PAGE>
could adversely affect the voting power or other rights of the holders of the
Company's Common Stock. In the event of issuance, the preferred stock could be
utilized, under certain circumstances, as a method of discouraging, delaying or
preventing a change in control of the Company. Although the Company has no
present intention to issue any shares of its preferred stock, there can be no
assurance that the Company will not do so in the future. The issuance of such
preferred stock could make the possible takeover of the Company or the removal
of management of the Company more difficult, discourage hostile bids for control
of the Company in which stockholders may receive premiums for their shares of
Common Stock or otherwise dilute the rights of holders of Common Stock and the
market price of the Common Stock.
DIVIDENDS. The Company has not paid any cash dividends on its Common
Stock and does not anticipate paying any cash dividends in the foreseeable
future. Additionally, under the terms of the Company's loan agreement with the
Vermont Economic Development Authority ("VEDA"), the Company may not make
distributions, except certain distributions with respect to the offset of income
tax liabilities, without the consent of VEDA. See "Dividend Policy."
DILUTION. The assumed initial offering price of $10.00 is substantially
higher than the net tangible book value per share of Common Stock. Investors
purchasing shares of Common Stock in this Offering will incur immediate and
substantial dilution of approximately $6.67 (67%) per share of Common Stock from
the assumed initial public offering price. In the event the Company issues
additional Common Stock in the future, investors of Common Stock pursuant to
this Offering may experience further dilution. See "Dilution."
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<PAGE>
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
shares of Common Stock offered hereby are estimated to be approximately
$6,660,000 based on an assumed initial public offering price of $10.00 per
share, after deducting underwriting discounts and commissions and estimated
offering expenses payable by the Company. The table below sets forth the
intended application of net proceeds of the Offering, the approximate dollar
amount of such application and the percentage of net proceeds of the Offering
allocable to each intended application.
<TABLE>
<CAPTION>
APPROXIMATE
APPROXIMATE PERCENTAGE OF
APPLICATION OF PROCEEDS DOLLAR AMOUNT NET PROCEEDS
- ----------------------- ------------- ------------
<S> <C> <C>
Upgrades of ski lifts, snowmaking,
grooming and trail systems................... $2,970,000 44%
Purchase of mountain equipment and
vehicles..................................... 400,000 6%
Hotel and Resort improvements................ 920,000 14%
Development and offering of vacation
ownership intervals.......................... 250,000 4%
Preliminary development of real estate
(including golf course and Hogback Mountain).. 500,000 8%
Prepayment of line of credit................. 900,000 13%
Working capital and general corporate
purposes, including possible business
acquisitions................................. 720,000 11%
----------- ------
TOTAL.................................... $6,660,000 100%
========== =======
</TABLE>
The foregoing represents the Company's best estimate of its allocation
of the net proceeds of this Offering based upon the current status of its
business operations, its current plans and current economic and industry
conditions. Future events as well as changes in economic or competitive
conditions or the Company's business and the results of the Company's sales and
marketing activities may make shifts in the allocation of funds within or
between each of the items referred to above, or to new or other applications,
necessary or desirable. Furthermore, from time to time, the Company may evaluate
possible acquisitions of or investments in businesses, assets, products and
technologies that are complementary to those of the Company, for which a portion
of the net proceeds from this Offering may be used. The Company has no plans,
commitments or agreements with respect to any such investments or acquisitions,
except as set forth in this Prospectus.
The Company will not receive any of the proceeds from the sale of shares
by the Selling Stockholders in the event the Underwriters exercise the
over-allotment option.
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<PAGE>
The Company anticipates, based on its present plans and assumptions
relating to its operations, that the net proceeds of this Offering, when
combined with the Company's existing capital resources and anticipated revenues
from operations, will be sufficient to enable it to maintain its current and
planned operations for a period of at least 12 months after the consummation of
this Offering. In the event that the Company's plans change or its assumptions
change or prove to be inaccurate or if the net proceeds of this Offering or cash
flow prove to be insufficient (due to unanticipated expenses or otherwise), the
Company may seek to minimize cash expenditures and/or obtain additional
financing in order to support its plan of operations. However, there can be no
assurance that additional financing will be available to the Company when needed
or on terms acceptable to the Company, if at all. See "Risk Factors--Capital
Expenditures and Possible Need for Additional Capital."
DILUTION
The difference between the initial public offering price per share of
Common Stock and the pro forma net tangible book value per share after this
Offering constitutes the dilution to investors in this Offering. Net tangible
book value per share is determined by dividing the net tangible book value of
the Company (total tangible assets less total liabilities) by the number of
outstanding shares of Common Stock.
At March 31, 1997, the net tangible book value of the Company, after
giving effect to the Combination Transaction, was $(1,792,229), or $(0.54) per
share. After giving effect to the Combination Transaction, the Hogback
Acquisition, the conversion of a portion of the Related Loans (as defined in
"Certain Transactions") to a capital contribution to the Company and the sale of
800,000 shares of Common Stock offered hereby at an assumed initial public
offering price of $10.00 per share and deducting underwriting discounts and
estimated expenses (including the non-accountable expense allowance payable to
the Representative) of the Offering, the pro forma net tangible book value of
the Company as of March 31, 1997 would have been $10,988,371, or $3.33 per
share. This represents an immediate increase in net tangible book value of $3.87
per share to the existing stockholders and an immediate dilution of $6.67 (67%)
per share to new investors. The following table illustrates this dilution, on a
per share basis:
<TABLE>
<S> <C>
Assumed initial public offering price of Common Stock ......... $10.00
Net tangible book value before Offering.....................(0.54)
Increase attributable to new investors...................... 3.87
-----
Pro forma net tangible book value after Offering............... 3.33
-----
Total dilution to new investors................................ 6.67
===============
</TABLE>
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<PAGE>
If the Underwriters' over-allotment option is exercised in full, the pro
forma net tangible book value per share of the Common Stock will not change
because the shares sold in the over-allotment will be outstanding shares held by
the Selling Stockholders.
DIVIDEND POLICY
The Company intends to retain all future earnings for the operation and
expansion of its business and does not anticipate paying any cash dividends on
the Common Stock in the foreseeable future. Any future determination as to the
payment of cash dividends will depend on a number of factors, including future
earnings, results of operations, capital requirements, the financial condition
and prospects of the Company and any restrictions under credit agreements
existing from time to time, as well as such other factors as the Board of
Directors may deem relevant. No assurance can be given that the Company will pay
any dividends in the future. Under the terms of the Company's loan agreement
with the VEDA, the Company may not make distributions, except certain
distributions with respect to the offset of income tax liabilities, without the
consent of VEDA.
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<PAGE>
CAPITALIZATION
Set forth below is the capitalization of the Company at March 31, 1997,
after giving effect to the Combination Transaction, and as adjusted to reflect
the closing of the Offering and the Hogback Acquisition and the application of
the estimated net proceeds therefrom and the conversion of a portion of the
Related Loans to a capital contribution to the Company.
<TABLE>
<CAPTION>
MARCH 31, 1997
------------------------------------------
Actual As Adjusted
---------------- ----------------
<S> <C> <C>
Long-term debt, excluding current installments ................................... $ 2,436,614 $ 681,014
STOCKHOLDERS' EQUITY (DEFICIT):
Common Stock, $0.001 par value; 4,900,000 shares authorized;
2,000,000 shares issued and outstanding (actual), 3,300,000; shares
issued and outstanding (as adjusted) ............................................. 2,000 3,300
Preferred Stock, $.01 par value; 100,000 shares authorized; none
issued and outstanding ........................................................... -- --
Additional paid in capital ....................................................... 1,050,000 12,779,300
Accumulated Deficit .............................................................. (2,844,229) (1,794,229)
------------ ------------
Total stockholders' equity (deficit) .......................................... (1,792,229) 10,988,371
------------ ------------
Total capitalization ............................................................. $ 644,385 $ 11,669,385
============ ============
</TABLE>
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SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
The following table sets forth selected financial information for the
Company for the periods and at the dates indicated. The selected historical
statement of operations and balance sheet data, at or for each of the full
fiscal years presented below was derived from the financial statements of the
Company, which were audited by Deloitte & Touche LLP, independent auditors. The
selected financial data presented below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and with the audited financial statements, including the notes
thereto, and other financial information appearing elsewhere in this Prospectus.
The unaudited pro forma selected financial data is derived from the unaudited
pro forma financial data presented elsewhere in this Prospectus. The statement
of operations data for the three-month period ended March 31, 1997 is not
necessarily indicative of the results of operations that may be expected for the
full year.
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA HISTORICAL THREE MONTHS
YEAR ENDED YEAR ENDED YEAR ENDED ENDED MARCH 31, PRO FORMA
DECEMBER 31, DECEMBER 31, DECEMBER 31, ------------------------- THREE MONTHS ENDED
1995 1996 1996(1) 1996 1997 MARCH 31, 1997(1)
----- ------ ------- ----- ------ ------------------
STATEMENT OF OPERATIONS DATA:
<S> <C> <C> <C> <C> <C> <C>
Revenues ........................... $3,866,418 $3,983,218 $3,983,218 $1,617,321 $1,991,284 $1,991,284
Net income (loss) .................. (576,689) (1,500,819) (1,414,829) (175,082) 256,926 155,100
Weighted average shares outstanding 2,000,000 2,000,000 3,300,000 2,000,000 2,000,000 3,300,000
Income (loss) per common share ..... $ (.29) $ (.75) $ (.43) $ (.09) $ .13 $ .05
</TABLE>
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA
DECEMBER 31, 1996 MARCH 31, 1997 MARCH 31, 1997(2)
----------------- -------------- -----------------
BALANCE SHEET DATA:
<S> <C> <C> <C>
Total assets.............................. $1,589,366 $1,532,624 $12,382,624
Long-term debt............................ 2,481,025 2,436,614 681,014
Total liabilities......................... 3,638,521 3,324,853 1,394,253
Stockholders' equity (deficit)............ (2,049,155) (1,792,229) 10,988,371
</TABLE>
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(1) As adjusted to give effect to (i) the closing of the Offering and the
application of the estimated net proceeds therefrom, (ii) the Hogback
Acquisition, (iii) the Combination Transaction and (iv) the conversion of a
portion of the Related Loans to a capital contribution to the Company as
if such transactions and the Offering had occurred on January 1, 1996.
(2) As adjusted to give effect to (i) the closing of the Offering and the
application of the estimated net proceeds therefrom, (ii) the Hogback
Acquisition, (iii) the Combination Transaction and (iv) the conversion
of a portion of the Related Loans to a capital contribution to the Company
as if such transactions and the Offering had occurred on March 31, 1997.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the Company's financial
condition and results of operations should be read in conjunction with the
Selected Financial Data and the Company's financial statements, including the
notes thereto, appearing elsewhere in this Prospectus.
GENERAL
In September 1993, the Company purchased the Resort and commenced
operations shortly thereafter. Since its first full year of operations in 1994,
the Company has increased revenues to $3.98 million in 1996. The increase in
revenues was attributable to more guests utilizing the Resort and higher average
prices for lift tickets and hotel room rates. In addition, with the start of its
fourth ski season in December 1996, management has been able to better control
costs while experiencing growth in revenues. The Company expects this trend to
continue which should positively affect the Company's net income. The Company
has a diversified revenue base which, for the past two fiscal years, has
averaged approximately 42% from room occupancy, 26% from skiing and fitness, 25%
from food and beverage and 7% from other revenue.
RESULTS OF OPERATIONS
The financial condition and results of operations of the Company
(without giving effect to the Hogback Acquisition) are described below. For
information regarding the financial condition of the Company and its results of
operations on a combined basis with those of Hogback Mountain, which will be
purchased by the Company concurrent with the closing of this Offering, please
refer to the Unaudited Pro Forma Financial Information and the Selected
Financial Data presented elsewhere in this Prospectus. The Company anticipates
that the impact of the purchase of Hogback Mountain on its statement of
operations will be immaterial.
THREE-MONTH PERIOD ENDED MARCH 31, 1997 (UNAUDITED) COMPARED TO THE THREE-MONTH
PERIOD ENDED MARCH 31, 1996 (UNAUDITED)
Revenue and Gross Profit: Revenue for the first quarter of 1997 was
$1,991,284, an increase of $373,963 or 23.1% compared to the first quarter of
1996. The increase was attributable to a higher number of guests utilizing the
Resort as well as price increases of lift tickets and hotel room rates. Lodging
revenue increased by 31.8%, ski and fitness revenue increased by 22.5%, food and
beverage revenue increased by 10.6% and other revenue increased by 7.1%. The
increase in lodging revenue was primarily a result of an 18.2% increase in hotel
occupancy combined with a 10.7% increase in the average hotel room rates, as
compared to the first quarter of 1996. The increase in ski and fitness revenue
was primarily attributable to a 13.4% increase in the number of lift tickets
sold, an increase of 7.2% in the average lift ticket price and a 35.7% increase
in ski school revenues.
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Gross profit as a percentage of total revenues increased from 37.7% in
the first quarter of 1996 to 50.9% in the first quarter of 1997. This increase
was primarily due to better control of expenses, combined with a 23.1% increase
in revenue as compared to the first quarter of 1996. The Company believes that
it should be able to continue to increase revenues without a significant
increase in the cost of sales, which should positively affect the Company's
gross profit.
Operating Expenses: Operating expenses were $707,127 for the first
quarter of 1997, representing a decrease of $26,277 or 3.6%, as compared to the
first quarter of 1996. As a percentage of revenue, operating expenses declined
from 45.3% in the first quarter of 1996 to 35.5% in the first quarter of 1997.
Since a majority of the operating expenses do not fluctuate significantly with
the level of revenues, the Company believes its net income should continue to be
positively affected by increasing revenues.
Net Operating Income (Loss): The Company had net operating income in the
first quarter of 1997 of $306,616 as compared to a net operating loss of
$125,766 in the first quarter of 1996, representing an increase of $432,382.
FISCAL YEAR ENDED DECEMBER 31, 1996 ("FISCAL 1996") COMPARED TO FISCAL YEAR
ENDED DECEMBER 31, 1995 ("FISCAL 1995")
Revenue and Gross Profit: Revenue increased from $3,866,418 in Fiscal
1995 to $3,983,218 in Fiscal 1996. This increase was due to a higher number of
guests utilizing the Resort as well as price increases of lift tickets and hotel
room rates. Lodging revenue increased by 10.1%, ski and fitness revenue
increased by 6.7%, other revenue decreased by 20.6% and food and beverage
revenue decreased by 4.0%. The decrease in food and beverage revenue resulted
primarily from a decline in banquet revenues, since in Fiscal 1995 there was a
large, multi-day conference held at the Resort that was not repeated in Fiscal
1996.
Gross profit as a percentage of total revenues decreased from 37.3% in
Fiscal 1995 to 30.5% in Fiscal 1996 primarily due to an increase in the cost of
sales. The increase in the cost of sales is primarily attributable to an
increase in labor and other expenses associated with expanded resort activities
and programs.
Operating Expenses: Operating expenses were $2,493,238 for Fiscal 1996,
representing an increase of $118,086 or 5.0%, as compared to Fiscal 1995. As a
percentage of revenue, operating expenses increased slightly from 61.4% in
Fiscal 1995 to 62.6% in Fiscal 1996.
Net Operating Income (Loss): The Company incurred a net operating loss
in Fiscal 1996 of $1,277,145 as compared to a net operating loss of $933,944 in
Fiscal 1995. The increase in the net loss was primarily due to the increase in
the cost of sales.
Other Income (Expense): The Company sold six condominium units in 1995
for a gain on sale of approximately $562,000. No such sales occurred in 1996,
accounting for the $580,929 change in other income (expense) from 1995 to 1996.
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LIQUIDITY AND CAPITAL RESOURCES
Since acquiring the Resort in 1993, the Company has funded its
operations from debt and equity financing provided by its Principal
Stockholders, a bank line of credit and other loans guaranteed by its Principal
Stockholders, the sale of real estate and cash flow from operations. During
Fiscal 1995, the Company financed its shortfalls primarily with the sale of six
condominium units, each at a price of $110,000, and through $400,000 of
additional equity financing from its Principal Stockholders. In November 1995
the Company transferred ownership of its remaining condominium units to its
Principal Stockholders which were subsequently financed with individual loans
secured by mortgages, the proceeds of which were then loaned by the Principal
Stockholders to the Company. In Fiscal 1995, such loan proceeds totalled
$500,500 of which $280,000 was used by the Company to repay existing Company
financing secured by the condominium units. In Fiscal 1996, such additional loan
proceeds totalled $700,000 of which $99,915 was used by the Company to repay the
remaining financing that was secured by the condominium units. In addition, the
Principal Stockholders contributed an additional $650,000 of equity in Fiscal
1996. During the three months ending March 31, 1997, The Principal Stockholders
loaned the Company $150,000, which is still outstanding. See "Certain
Transactions" and Note 5 of Notes to Financial Statements.
In July 1997, the Company obtained a $1.5 million line of credit from
Mascoma Savings Bank bearing interest at the prevailing prime rate plus 1.75%,
as adjusted from time to time. Approximately $900,000 was immediately used to
prepay the existing Fleet Bank line of credit and to pay closing costs leaving
an additional $600,000 of borrowing capacity available for working capital
purposes. The Company intends to repay a portion of the amount outstanding under
the line of credit with the net proceeds of the Offering. See "Use of Proceeds."
The Company also obtained a block grant loan in November 1994, having an
initial principal amount of $240,000 from the Town of West Windsor, Vermont. The
grant accrues interest at a rate of 5% per annum and has a maturity date of
February 20, 2010. The loan is guaranteed by the Company's Principal
Stockholders.
Additionally, the Company obtained a loan in May 1994, having an initial
principal amount of $400,000 from the Vermont Economic Development Authority.
The loan accrues interest at a rate of 5.5% per annum and has a maturity date of
June 3, 2004. The loan is guaranteed by the Company's Principal Stockholders and
has a balloon payment due at maturity of $171,639.
The Company believes that, based on its present plans, the net proceeds
of this Offering, when combined with the Company's existing capital resources
and anticipated revenues from operations, will be sufficient to enable it to
maintain its current and planned operations for a period of at least 12
months after the consummation of this Offering. In the event that the Company's
plans change or its assumptions change or prove to be inaccurate or if the net
proceeds of this Offering or cash flow prove to be insufficient (due to
unanticipated expenses or otherwise), the Company may seek to minimize cash
expenditures and/or obtain additional financing in order to support its plan of
operations. Sources of capital may include additional
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equity or debt financings. Cash provided by operating activities was $57,487 for
the three months ended March 31, 1997 compared to cash used for operating
activities of $134,490 for the same period in 1996. Cash used for operating
activities was $1,087,760 and $1,347,597 in Fiscal 1996 and 1995, respectively.
The improvement in the first quarter of 1997 compared to the first quarter of
1996 was due to a combination of increased revenues and slightly lower operating
costs.
The Company's capital expenditures for the years ended December 31, 1995
and December 31, 1996 were $34,466 and $44,576, respectively. Management expects
capital expenditures to total approximately $3,000,000 over the next 12 months,
approximately 80% of which is intended to be spent upgrading the ski lifts,
snowmaking, grooming and trail systems.
Management is not aware of any trends or events, commitments or
uncertainties which have not otherwise been disclosed that will or are likely to
impact liquidity in a material way.
FLUCTUATIONS IN QUARTERLY RESULTS
The Company's operating results may fluctuate from quarter to quarter as
a result of the seasonal nature of the ski resort operations. The Company
recognizes its highest revenue levels during its first fiscal quarter. This
quarter accounted for approximately 36.6% and 40.6% for Fiscal 1995 and Fiscal
1996 total revenues, respectively.
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BUSINESS
OVERVIEW
The Company owns and operates one of the premier fully-integrated,
all-season mountain resorts in New England, comprised of approximately 750
acres, including the Ascutney Mountain ski area located in Brownsville, Vermont.
Since 1983, more than $85 million was invested in connection with the expansion
and development of the Resort. The Company provides a comprehensive destination
resort experience by combining quality ski facilities and resort services,
including convenient ski-on/ski-off lodging, with attractive four-season
amenities. The Resort attracts guests primarily due to its affordable
family-oriented vacations in a self-contained resort village with easy
accessibility from most major metropolitan areas in the northeastern United
States. In 1995, Ascutney Mountain ski area was ranked among the top three ski
resorts for value and the top four ski resorts for families, in the eastern
United States, by Skiing magazine.
THE MOUNTAIN RESORT INDUSTRY
There are approximately 800 ski areas in North America, approximately
500 of which are located in the United States and approximately 300 of which are
located in Canada. During the 1996-97 ski season, these U.S. ski areas accounted
for approximately 52.5 million skier days (of which approximately 12.1 million
skier days were attributed to northeastern United States ski areas). A "skier
day" is defined as one day representing a single day or night visit to a ski
area. The Company believes that of the 800 North American ski areas, only a
small number are fully-integrated, destination resorts.
North American ski resorts range from small regional ski areas which
primarily attract day skiers from nearby populations to large amenity-filled
resorts focused on destination visitors who seek a comprehensive vacation
experience. Day visitors generally tend to focus primarily on lift ticket prices
and resort accessibility. Destination visitors generally stay for one or more
nights, and primarily focus on the number of amenities and activities offered as
well as the perceived overall quality of their vacation experience. The Company
believes that destination visitors spend more on non-lift ticket items than day
visitors and may be less likely to change their skiing plans because of changes
in local weather conditions. As a result of these differences, destination
visitors generate significantly higher revenue per day than day visitors and
provide desirable balance to a resort's revenue mix.
While skier days generated by the Resort have grown by approximately 26%
since the 1993-94 ski season, total skier days generated by all United States
mountain resorts have decreased by a total of approximately 3.8% during the same
period. The Company believes that the primary reasons for the Resort's growth in
skier days since its acquisition by the current management team in 1993 relative
to the rest of the United States include the quality of the resort village, the
improved skiing experience and easy access from major metropolitan areas. See
"Risk Factors -- Limited Operating History; Significant and Continuing Losses."
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The mountain resort industry is characterized by significant barriers to
entry since the number of attractive sites is limited, the cost of resort
development is high and environmental regulations impose significant
restrictions on new development.
The Company believes that it benefits from current trends which
favorably affect the North American mountain resort industry, including (i) new
innovative equipment for skiers, such as parabolic or shaped skis which
facilitate learning and enhance performance, (ii) increased participation in
mountain resort sports such as snowboarding, mountain biking and hiking which
are among the fastest growing sports in North America and (iii) demographics
under which (a) the large "baby boom" generation is entering the 45-65 year age
category which traditionally is the age group with the largest number of buyers
of vacation property and (b) the "echo boom" generation is entering the teenage
years, one of the age groups with the most skiing and snowboarding activity.
Moreover, the Company believes that these trends will continue to attract
additional destination guests and increase demand from affluent families for
vacation real estate in mountain resorts.
The Company believes that new ski equipment technologies, including
parabolic skis, will facilitate wider participation in downhill skiing.
Parabolic skis have a narrower mid-section than standard designs, generally
allowing for an easier curve and better control into parallel turns. Parabolic
skis are more flexible than standard skis and require less muscle strength to
turn, decreasing skier fatigue. The Company believes that as a result of the new
equipment technologies, it is easier for beginners to learn to ski, and for
intermediate and advanced skiers to perform beyond their present abilities. The
Resort expects to benefit from the increased utilization of parabolic skis which
the Resort offers in its retail and rental shops and for which it provides
instruction through its ski school.
The Company believes that the growth in snowboarding will also have a
positive impact on the ski industry and will continue to be an important source
of lift ticket, ski school, retail and rental revenue growth for the Company. In
the United States, skier days attributable to snowboarders have increased an
average of 19% per year over the past 3 years and snowboarders are currently
estimated to represent 18% of all skier days in the United States. The
snowboarding population is expected to double as a percentage of skier days over
the next five years according to the 1997 survey of SNOWboarding Business. Much
of this growth can be attributed to the greater acceptance of snowboarding as a
competitive amateur sport. In 1985, only 7% of U.S. ski resorts allowed
snowboarding, while approximately 93% do as of 1997. Also, the International
Olympic Committee recently designated snowboarding as a demonstration event at
the 1998 Winter Games in Nagano, Japan.
While snowboarding has increased interest in "on-snow" sports among 13
to 24 year old males, the sport is increasingly appealing to a wider group of
enthusiasts. According to a recent survey by Ski Industries America, the average
age of snowboarders has risen to approximately 24 years old, and nearly
one-third of all current snowboarders is female. The Company further believes
that the growth in snowboarding among children and teens, who influence family
vacation decisions, should allow the Resort to attract additional family
destination guests. Consequently, the Resort has constructed a "snowboard park,"
offers snowboarding lessons
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through its ski school and provides snowboarding equipment in its retail and
rental shops. The Company generally intends to place greater emphasis on the
Resort's snowboard attractions, programs and events.
RESORT OPERATIONS
The Company currently owns and controls all of the Resort's operations
enabling it to capture a high percentage of the total spending by its year-round
guests during their visit to the Resort. Accordingly, while lift ticket sales
are traditionally the largest source of revenues for most ski resorts, the
Company has a diversified revenue mix, including lodging, food services, lift
tickets, ski school, sports and fitness center, day care and retail shops.
Lodging revenue was the largest source of revenue in 1996, accounting for
approximately 43% of total Resort revenue. The Company expects non-lift ticket
revenue will continue to grow at a greater rate than lift ticket revenue as a
result of the ongoing expansion of activities and services offered by the
Company at the Resort.
ASCUTNEY MOUNTAIN RESORT
The Resort is a four-season, fully-integrated, destination resort that
includes the ski area, a 212-room hotel (the fourth largest resort hotel in
Vermont), an approximately 18,000 square foot comprehensive sports and fitness
center, a three-story base lodge, a ski and rental shop, four restaurants,
approximately 30,000 square feet of conference facilities and 17 slope-side
condominium units to be leased from the present owners, all set in a New England
style village.
Centrally located in New England, the Company believes that the Resort
is Vermont's most accessible fully-integrated, destination resort area. The
Resort is conveniently located in central Vermont's Connecticut River Valley in
Brownsville, Vermont, at the foot of Mt. Ascutney. The Resort is six miles from,
and is the closest major Vermont ski resort to, Interstate I-91, one of the two
main highways in Vermont. The Resort is easily accessible from most major
metropolitan areas in the northeastern United States from which it attracts the
majority of its visitors. During the 1996-97 ski season, the majority of the
Resort's visitors resided in Connecticut, Massachusetts, Vermont and New York.
Hartford, Boston and Albany are within a 2-1/2 hour drive and Providence,
Montreal and New York City are within a 4-1/2 hour drive. The Resort is 18 miles
from the Lebanon, New Hampshire airport which provides daily service to and from
Boston, New York, Newark and Albany and five miles from the Amtrak train station
in Windsor, Vermont. Approximately 15 miles from the Resort lies Woodstock,
Vermont, a quaint New England village where guests can visit numerous art
galleries, antique and specialty shops. The town of Manchester, Vermont, located
approximately 50 miles from the Resort, is one of Vermont's busiest summer
tourist attractions featuring designer discount outlets as well as specialty
shops.
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ASCUTNEY MOUNTAIN SKI AREA
The Ascutney Mountain ski area is one of Vermont's 14 major ski resorts
with a 1,530 foot vertical rise on Mt. Ascutney. Ascutney Mountain's skier days
exceeded 53,000 during the 1996-97 ski season, representing an increase of
approximately 26% since the commencement of the Company's operations in 1993
under its current management team. The ski area includes 4 chairlifts,
31 trails, and 115 skiable acres with an approximately equal distribution of
beginner, intermediate and expert terrain, including an International Skiing
Federation-sanctioned giant slalom trail. The ski area is supported by a
three-story base lodge with a cafeteria and lounge seating a total of 500
persons, a two-story ski and rental shop and various maintenance and storage
buildings. Snowmaking capability covers approximately 75% of the
skiable terrain. There are approximately 20 miles of cross-country trails which
range from open meadows suitable for beginners to mountain touring trails
suitable for more advanced skiers. At the base of the mountain, tubing, ice
skating, children's programs and apres ski entertainment are available. Unlike
many Vermont ski resorts, the Company owns all of the land on which the ski
facilities are currently located. The Company operates its facilities 7 days a
week for skiing and related winter activities from approximately mid-November
until the following mid-April.
Lift Ticket Sales. The Company's goal is to manage lift ticket yields to
obtain premium prices during peak periods and increase aggregate lift ticket
revenue during non-peak periods. Accordingly, the Company offers a wide
selection of lift tickets which vary in price and usage. In all categories there
is a reduced price for junior tickets. Unlike the majority of ski resorts, the
Company sells junior priced tickets for guests up to the age of 16 years old as
opposed to the traditional 12 years; this expanded discount is intended to
attract the family market that largely frequents the Resort. Discounted lift
tickets and programs, including local school programs, group purchases, Vertical
Value discount card purchases and co-promotions with local and national
businesses are designed to bolster business during non-peak periods. Introduced
in 1995, the Vertical Value discount card was implemented to increase lift
ticket revenues as well as to encourage non-peak usage by offering greater
discounts during midweek and early and late seasons. The Company also markets
and sells hotel packages which combine accommodations, lift tickets and dining.
Such packages facilitate vacation planning while providing the Resort with
multi-day lift ticket sales.
Ski School. The Company operates a ski school at the Resort that offers
a variety of programs to skiers, targeted to different ability levels and age
groups, including Flying D.U.C.K.S., Young Olympians and Mini Olympians
children's programs. The Company anticipates further growth in ski school
revenue resulting from technological advances in alpine skiing equipment, for
which the ski school has qualified instructors, and from the growth in
snowboarding. The Company has approximately 60 instructors on its ski school
staff. The Company has adopted a compensation incentive program to reward
instructors based on guest satisfaction.
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ASCUTNEY MOUNTAIN RESORT HOTEL, LODGING AND RELATED OPERATIONS
Lodging. The Ascutney Mountain Resort Hotel is a 212-room hotel,
constructed in 1984, situated in five buildings at the base of Mt. Ascutney. The
rooms are approximately equally divided between standard hotel rooms and suites
which through lock-out capabilities may be rented as 1, 2 or 3-bedroom suites.
Each suite has a full kitchen, a dining room and a living room with a fireplace
and deck. The hotel is located along the lower ski slopes with each building
having direct ski-on/ski-off access to the slopes. The main hotel building
houses the 140-seat Harvest Inn Restaurant, Brown's Tavern, Biscotti's pizzeria
and game room, the two-story Crow's Nest lounge/function room, additional retail
space and conference space. The conference space in the hotel can accommodate
groups from approximately 20 to 500 people. In addition, the Resort also
includes approximately 17 condominium units at the base of the mountain, to be
leased from the present owners, which together with the hotel, can accommodate
up to approximately 700 people.
Food and Beverage Service. Food and beverage service is an increasingly
important component in providing a satisfying guest experience at the Resort and
has been a significant source of revenue for the Company. The Company owns and
operates the Resort's four on mountain food and beverage facilities with more
than 500 seats. As a year-round mountain resort, the Resort generates food and
beverage revenues throughout the non-ski season, including banquet revenues from
groups utilizing the Resort's conference facilities and from wedding receptions.
Retail Shops. The Company owns and leases commercial space for a retail
and ski rental shop (with two locations at the Resort) containing approximately
3,500 square feet of sale/service area which is operated on a concession basis
by a third party only during the ski season. The shop sells ski accessories such
as goggles, sunglasses, hats and gloves as well as hard goods such as skis,
snowboards, boots and ski apparel.
ASCUTNEY MOUNTAIN RESORT SPORTS AND FITNESS CENTER
The Resort's sports and fitness center of approximately 18,000 square
feet, refurbished in the fall of 1993, is located adjacent to the hotel. The
center includes one indoor and one outdoor Olympic-sized swimming pool, seven
outdoor tennis courts (five har-tru and two all weather), an aerobics studio,
two racquetball courts, saunas, free-weights, nautilus and aerobic equipment.
The Company believes that the center is the only comprehensive sports and
fitness facility of this size in the area and attracts membership from a 20
mile radius.
The center, which is complimentary to hotel guests, sells monthly and
annual memberships. In addition, the center offers daily walk-in passes and
coupon books for single admissions. While the number of memberships varies
seasonally, on a monthly basis the number of club memberships ranges from
approximately 150 to 400 members. Additional fitness center revenues are derived
from personal training sessions, massage fees, racquetball fees and tennis and
swim instruction.
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OPERATING STRENGTHS
The Company believes that the following operating strengths provide
competitive advantages which should enable it to achieve significant growth.
CONTROL OF RESORT OPERATIONS
The Company controls multiple revenue sources at the Resort, thereby
diversifying its revenue mix and ensuring consistency and quality of its
operations. In addition to operating the ski lifts, the Company currently
manages virtually all ancillary operations at the Resort, including lodging,
food services, the ski school, the sports and fitness center and a day care
program. The Company's ownership of the commercial property at the Resort allows
it to ensure that its retail space enhances the overall appeal of the Resort.
APPEAL TO FAMILY VISITORS
The Company's special programs and services are principally targeted to
family destination guests who tend to generate higher and more diversified
revenues per guest than day skiers. Programs range from the Mini Olympian and
Young Olympian ski schools, which are separate from the adult ski school, to
supervised evening programs such as Cheddar's Happy Hours, movies, puppet shows
and Parents' Night Out. In addition, the Company believes that the convenience
of the self-contained Resort village which offers ski-on/ski-off lodging in
large suites, coupled with virtually all facilities being located within walking
distance, is particularly attractive to families. Based on a survey by the
National Skier Opinion Survey for the 1996-97 ski season, more of the Resort's
visitors had children under the age of 16 and a higher percentage of visitors to
the Resort were accompanied by their children than the regional average of other
ski resorts.
ACCESSIBILITY AND LOCATION
The Resort is strategically located in central Vermont and is within
several hours driving distance from most major metropolitan areas in the
northeastern United States. The Company believes that the Resort's proximity to
Interstate I-91, one of the two main highways in Vermont, provides it with a
significant competitive advantage relative to most of the other major Vermont
mountain resorts. The northeastern corridor of the United States represents the
second largest concentration of skier days in North America. Vermont had the
largest number of skier days during the 1996-97 ski season of all the
northeastern states. Additionally, Vermont benefits from an average of 250
inches of snowfall annually.
MANAGEMENT TEAM
Members of the Company's senior management team are recognized leaders
in the mountain resort industry. The Company's senior management team consists
of three individuals who are responsible for strategic direction, as well as
oversight of its business, including Resort operations and real estate
development activities. Together, the senior management team has
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over 50 years of experience in the mountain resort industry, and have held
positions on the Boards of Directors of such recognized public and private
organizations as the Vermont Ski Areas Association and Vermont Economic
Development Authority. Also, the Company's Chief Operating Officer during a
20-year period held various positions at Mount Snow, a leading Vermont ski
resort, including Vice President - Operation and Planning of Mount Snow
Development Corporation, Vice President for Planning and Maintenance of Mount
Snow Hotel Corporation and Operations Manager of Mount Snow. In addition, the
Company's Chief Operating Officer served as the Director of Whiteface Mountain
Ski Center responsible for planning and development of the Ski Center in
preparation for the 1980 Winter Olympics in Lake Placid, New York. He was later
promoted to Vice President for the Olympic Regional Development Authority in
charge of planning and construction for all of the 1980 Winter Olympic venues.
BUSINESS STRATEGY
The Company's operating formula links the staged expansion of its
mountain ski facilities at the Resort with the strategic development of its real
estate. The Company's primary objective is to maximize and diversify its revenue
sources by capitalizing on its operating strengths and through expansion of the
Resort and the development of its real estate as described below. This strategy
is designed to increase and balance year-round utilization and to enhance real
estate values at the Resort. The implementation of this strategy begins with the
continued enhancement of the skiing experience coupled with hotel improvements.
In addition, the Company has the capacity to expand ski operations to the peak
of Mt. Ascutney. The Company intends to implement a multi-stage plan to realize
the significant value of its real estate. The Company plans to commence the sale
of VOIs in the Resort's hotel, designed to increase destination visitors to the
Resort and increase total Resort revenue. The intended sale of VOIs, commonly
known as timeshares, in the Resort's hotel is expected to be carefully managed
by the Company, in conjunction with its partner in the Future Joint Venture. The
capital expected to be raised through the sale of VOIs in the existing hotel
should enable further development of the Resort, such as the potential addition
of an 18-hole golf course with additional adjacent residential units. Finally,
the Company also intends to explore possible development opportunities regarding
its other real estate holdings, including examinations of zoning and other
regulatory approvals necessary for any such development. The Company believes
that the integration of the Resort with further real estate development should
attract increasing numbers of visitors and buyers of real estate.
The expansion of the Resort's mountain facilities, the offering of
vacation ownership intervals and the Company's further development of its real
estate holdings should together add to the Company's ability to increase
year-round utilization of the Resort. Specifically, the Company's strategy to
maximize revenues is as follows:
EXPANSION OF SKI AND YEAR-ROUND OPERATIONS
An important component of the Company's business strategy is the
expansion and enhancement of its core ski operations, while at the same time
increasing the range of
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complimentary activities and services offered to its guests throughout the year.
The Company plans to enhance the skiing experience at the Resort through major
upgrades to the ski lifts, snowmaking, grooming and trail systems. Principal
improvements include the addition of one new high-speed quad chairlift as well
as the relocation of one of the existing chairlifts, which will increase the
mountain's total uphill capacity by more than 45% to approximately 6,350 skiers
per hour. In addition, the Company plans to increase snowmaking capabilities at
the Resort, bringing coverage to approximately 95% of the skiable terrain. Major
trail modifications have been designed to allow different levels of skiers to
utilize more of the mountain when combined with the planned increased
snowmaking. Further, the Company intends to explore expanding the Resort's
operations to a higher elevation on Mt. Ascutney, which if successfully achieved
would result in the Resort having the fourth highest vertical rise of any
Vermont ski operation. The plan also provides for the acquisition of Resort
equipment and is expected to include both on-road and off-road vehicles such as
snow groomers. See "Use of Proceeds."
The Company also seeks to increase year-round utilization of the Resort
by developing more summer and shoulder season activities and amenities. The
Company believes that increases in utilization during the summer and shoulder
seasons should enhance the Company's ability to attract additional restaurants
and shops, thereby enhancing the four-season appeal of the Resort and the demand
for and market value of its Resort real estate property. The Resort offers
guests a variety of activities during the non-ski season, including mountain
biking (on approximately 20 miles of the Resort's cross country trails), outdoor
tennis, swimming and hiking. Canoeing, horseback riding and fishing can be
arranged for at nearby facilities. Additionally, visitors during the summer and
shoulder seasons can take advantage of golf courses, historic sites, museums and
antique shops located near the Resort area.
RESORT HOTEL IMPROVEMENTS
The Company plans hotel improvements as well as the acquisition of
Resort equipment and computer systems. The major components of the improvements
include: selected hotel refurbishing of rooms and common areas, expanded
activity areas for children's programs, expansion of hotel dining facilities and
infrastructure improvements to roads and hotel parking lots. See "Use of
Proceeds." With the improvements contemplated by the Company's plan, the Resort
is expected to attract more hotel guests thereby increasing hotel occupancy and
increasing utilization of other existing Resort services such as food services,
ski school, day care and children's programs.
VACATION OWNERSHIP PROGRAM
The Company is in discussions with various real estate and vacation
ownership development companies regarding the marketing and sale of up to 5,200
VOIs in the Resort's hotel as well as development of additional units of new
construction at the Resort. By entering into a joint venture or other
arrangement with a real estate or vacation ownership development company, the
Company intends to mitigate risks associated with the VOI program.
Additionally, the Company, along with its strategic real estate partner, intends
to manage any inventory risk by initially offering for sale only part of the
Resort's hotel on a VOI basis, while
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operating the remainder of the Resort's hotel on a traditional overnight basis.
See "Risk Factors -- Uncertainty of Development of Vacation Ownership Intervals
and Golf Course Development."
The Company plans to initiate a VOI program for the Resort's hotel prior
to any new construction of additional units at the Resort, whereby fixed weekly
intervals will be sold in fully-furnished vacation units. The offering program
is expected to begin in 1998. When the Company's VOI program commences, the
Resort will be one of only two fully-integrated, destination resorts in Vermont
that offers a VOI program. The Company believes that the offering of VOIs in its
existing hotel will increase destination visitors to the Resort, which should
increase revenues for the Resort including lift tickets, food and beverage,
retail and other sources.
The Future Joint Venture is expected to direct its marketing and sales
efforts for VOIs in the Resort's hotel generally to family households in the
middle and upper middle income brackets who previously have visited the Resort
or prefer outdoor recreational activities at destination locations. It is
anticipated that the Future Joint Venture will spend significant amounts in the
future on real estate marketing and sales as it offers VOIs in the Resort's
hotel. The primary method of marketing the Resort's vacation ownership property
is expected to be through direct mail mini-vacation invitations. The Future
Joint Venture intends to provide hotel accommodations to prospective purchasers
at reduced prices while they tour the Resort. Sales personnel are expected to be
generally experienced in VOI sales and to participate in ongoing training.
The resort component of the vacation industry is serviced primarily by
two alternatives for overnight accommodations: (i) commercial lodging
establishments and (ii) timeshare or "vacation ownership" resorts. Commercial
lodging consists of hotels and motels in which a room is rented on a nightly,
weekly or monthly basis for the duration of the visit and is supplemented by
rentals of privately-owned condominium units or homes. For many vacationers,
particularly those with families, a lengthy stay at a quality commercial lodging
establishment can be very expensive. In addition, availability of commercial
lodging may be limited during peak periods.
VOIs have been one of the fastest growing segments of the hospitality
industry over the past two decades. The number of vacation ownership resorts
throughout the world increased from approximately 630 in 1981 to approximately
4,350 in 1996. From 1988 to 1996 vacation ownership sales grew at about 15% per
year, reaching approximately $5 billion in total worldwide sales in 1996.
Although sales of VOIs have grown from under $500 million annually in 1980 to
approximately $5 billion in 1996, the Company believes there is substantial
capacity for additional growth since less than 2% of all households in the
United States owned a VOI as of 1996. According to the American Resort
Development Association, the typical vacation interval owner is
upper-middle-income, middle-aged, and well-educated. Additionally, of VOI owners
in the United States, 69.5% have incomes over $50,000, and 67.5% are 45 years of
age or older. The median annual household income of owners of VOIs in the United
States is approximately $71,000 and over one-third of United States VOI owners
have children aged 18 or younger living at home. The Company believes that its
Resort can capitalize on the growth
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of VOIs because its visitors' demographics are similar to those of the typical
VOI purchaser. In addition, over one-third of VOI owners are from the northeast,
the region from which the Resort draws approximately 75% of its visitors.
The Company believes that a significant part of the success of the
vacation ownership industry may be attributable to the growth of timeshare
exchanges which have increased flexibility to owners of VOIs. Such timeshare
exchange companies allow owners to exchange weeks and locations. Of the 4,350
worldwide vacation ownership resorts, approximately 95% are associated with an
exchange company, with such companies arranging approximately 80% of the
timeshare vacations taken worldwide each year. The Company expects that the
Future Joint Venture will associate itself with one of the leading exchange
companies. The Company believes that another significant factor contributing to
the current success of the vacation ownership industry is the entry into the
vacation ownership market of some of the world's major lodging, hospitality and
entertainment companies, such as Marriott International, Inc., The Walt Disney
Company, Hyatt Corporation, Four Seasons Hotels and Inter-Continental Hotels and
Resorts.
The Company anticipates that the Future Joint Venture will offer
financing to purchasers of up to approximately 90% of the purchase price of a
VOI. It is anticipated that a significant number of purchasers of the Company's
VOIs will avail themselves of such financing. The Company believes that such
financing is expected to be attractive to purchasers who find it convenient to
handle all facets of the purchase of VOIs through a single source and because
down payments required by such financing are intended to be similar to those
required by banks and mortgage companies which offer such type of credit. The
typical financing extended by the Future Joint Venture is intended to be a term
of approximately seven years and at a fixed interest rate.
Many state and local authorities have imposed restrictions and
additional regulations on developers of vacation ownership properties. The
Company is subject to various regulatory requirements including state and local
approvals. These restrictions are expected to generally increase the cost of
selling VOIs. In compliance with state laws, the Company expects that the Future
Joint Venture may provide its vacation ownership purchasers with a public
disclosure statement which contains, among other items, detailed information
about the surrounding vicinity, the Resort and the purchaser's rights and
obligations as an interval owner.
The Company expects that the Future Joint Venture's customer financing
activities will also be subject to extensive regulation, which may include the
Truth-in-Lending - Regulation Z, the Fair Debt Collection Practices Act, the
Equal Credit Opportunity Act - Regulation B, the Electronic Funds Transfer
Act - Regulation E, the Home Mortgage Disclosure Act - Regulation C, Unfair or
Deceptive Acts or Practices - Regulation AA, the Real Estate Settlement
Procedures Act, the Consumer Credit Protection Act and the Right to Financial
Privacy Act. The Company believes that the Future Joint Venture will be in
compliance in all material respects with such regulations.
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DEVELOPMENT OF REAL ESTATE
In light of the Resort's existing amenities, significant amount of
developable land and attractive location, the Company believes that the Resort
has numerous potential opportunities for further real estate development. The
Company believes that similar factors which motivate skier visits to the Resort,
such as accessibility, four-season attractions, amenities and proximity to major
markets, should also tend to enhance values of the Company's real estate over
time. Approximately 400 acres of the Company's land at the Resort are currently
undeveloped. The Company also owns related infrastructure such as water and
wastewater systems (which can support an additional 390 residential units at the
Resort), certain roads, parking lots and maintenance facilities.
The Company plans to further develop its real estate holdings as part of
the overall expansion of the Resort. The original master development plan of the
previous owner of the Resort contemplated approximately 560 residential units
(172 of which have already been built), an 18-hole golf course, and further
commercial development. The Company believes that its current supply of land at
the Resort can support real estate development activities for approximately 10
to 15 years. The Company may also consider opportunities to add to its inventory
of available land. By carefully managing the number and mix of new real estate
interests it markets each year, the Company intends to achieve attractive
returns through a balanced utilization of the Resort and its real estate.
Previous plans for the Resort included the future construction of an
18-hole golf course to be surrounded by 100 to 140 townhouse units. In 1986, the
previous owner of the Resort had applied for conceptual approval in accordance
with Vermont's principal environmental law, Act 250, for a golf course at the
Resort and was issued a conceptual Land Use Permit on the basis of the
application, which permit has since expired. The District Environmental
Commission which issued the conceptual Land Use Permit found that the proposed
golf course and residential units were in conformance with the West Windsor Town
Plan. While these plans and projects were never completed, the Company believes
that potential opportunities still exist for these and other projects to be
constructed on the approximately 400 acres currently available for development
at the Resort. The Company is assessing the feasibility and development of an
18-hole golf course with additional adjacent residential units, all on land
currently owned by the Company.
Typically, golf is a primary attraction for mountain resorts in the
summer and shoulder seasons, generating revenues from greens fees, cart rentals
and pro-shop sales and should increase the overall demand for Resort real
estate. In addition, in such resorts, golf is also responsible for generating a
significant portion of the food and beverage and lodging revenues during the
summer. The developable land parcels adjacent to a golf course generally achieve
higher selling prices than other real estate. The Company believes that
golf-related revenues may become an increasingly significant component of the
Resort's aggregate revenues in the future.
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OPPORTUNITIES FOR FURTHER DEVELOPMENT
Upon the closing of this Offering, the Company will acquire a former day
ski area known as Hogback Mountain, which covers approximately 800 acres of land
located in southern Vermont and includes buildings containing a restaurant, a
gift shop and two small museums. Hogback Mountain is located within 20 miles
of the Mount Snow and Haystack ski areas and offers an unobstructed, panoramic
view of three states. Hogback Mountain is within 30 minutes driving distance to
several ski areas, golf courses, lakes, annual music festivals and other
attractions. The Company believes that Hogback Mountain offers attractive
development potential.
One of the tallest mountains in southern Vermont, Hogback Mountain is
situated adjacent to Route 9, a primary east-west thoroughfare in Vermont. Route
9 connects Brattleboro in the southeast corner of Vermont with Bennington in the
southwest corner and is one of the most traveled roads in Vermont.
Over the years, the Hogback Mountain property developed in a number of
ways. A small ski area with a total of 24 trails and slopes and a base lodge was
developed. The ski area has not been operating since the mid 1980's. In
addition, a restaurant and gift shop as well as a few rental cottages were
built. Two small museums were also established, one of which is currently
expanding to a newer facility at Hogback Mountain. The Company believes that
Hogback Mountain could support cross-country and downhill skiing, snowmobiling
and other winter activities as well as certain summer and shoulder season
activities in the event that the necessary regulatory approvals were obtained
and appropriate development resources were expended. Hogback Mountain is
currently registered with VAST, the Vermont Association of Snow Travelers, a
snowmobiling association. The Company intends to explore possible development
opportunities regarding Hogback Mountain, including an examination of zoning
and other regulatory approvals necessary for any development.
As consideration for the purchase of Hogback Mountain, the Company will
issue an aggregate of 500,000 shares of Common Stock to Skyline Partners, L.P.,
a New York limited partnership and the owner of the 800 acres of land at Hogback
Mountain and the buildings containing the Skyline Restaurant, gift shop and the
two small museums at Hogback Mountain. Pursuant to the purchase and sale
agreement, subsequent to the closing of the Offering, at the option of the
Company, Skyline Partners, L.P. will manage the Hogback Mountain property in
accordance with a management agreement between the Company and Skyline Partners,
L.P., pursuant to which the Company shall pay a fee of $1,000 a month to Skyline
Partners, L.P. The Company also intends to lease the buildings containing the
Skyline Restaurant and gift shop at Hogback Mountain to Vermont Natural Company,
the current owner and operator of such businesses. The lease will be on a
month-to-month basis, terminable by the Company or by the tenant on 30 days
notice, at a rent of $5,000 per month. The Company will not, however, be
purchasing any portion of the businesses on such premises. Skyline Partners,
L.P. and Vermont Natural Company are affiliates of the Representative. See
"Certain Transactions" and "Underwriting."
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RESORT MARKETING AND SALES
The primary objectives of the Company's marketing strategy for its
operations include (i) increasing the Company's market share of northeastern ski
visitors by continuing to increase the recognition associated with the Resort,
(ii) building demand during both peak and non-peak periods and (iii) expanding
the summer and shoulder season business of the Resort.
The Company's marketing methods include print media advertising in ski
industry and lifestyle publications whose readership the Company believes
generally reflects the demographic profile of the Resort's customers. The
Company is also active in a number of promotional programs such as discount
programs offered through local retailers designed to attract local day skiers.
Since 1995, the Company has produced its own magazine which promotes the
Resort's features and attractions while promoting the surrounding region as
well. In addition, the Company uses direct mail advertising and is placing
increasing emphasis on its web site which has generated up to 44,000 hits in a
single month.
Given the Resort's characteristics and layout, the Company's marketing
efforts concentrate on both the family vacation market and the conference
market. With the convenience of a self-contained resort village, coupled with
large hotel suites, the Company believes that the Resort is particularly well
suited for families with young children. In addition, the Resort has also
attracted group and conference business including corporate meetings,
conventions, weddings and ski groups. The Resort has fifteen function rooms that
range in size from approximately 500 square feet to over 4,000 square feet and
can accommodate groups from as small as 20 to as large as 500. Based on total
square footage of conference space, the Company believes that the Resort ranks
among the top three conference centers in Vermont. In fiscal 1996, group and
conference sales revenues were approximately 30% of the Resort's lodging and
food and beverage revenues.
To increase awareness of the Ascutney name, the Company has entered into
sponsorship relationships with local and national companies and has hosted
several entertainment events, including concerts of the Vermont Symphony
Orchestra. The Resort has also hosted a number of sporting events including the
Mountain Dew'tm' Vertical Challenge and the Boston College Winter Carnival.
REGULATION AND LEGISLATION
The Company is subject to various laws and regulations relating to the
operation of its Resort and related activities, which are administered by
numerous federal, state and local governmental agencies. Additionally, the
mountain resort industry is subject to extensive regulation. The Company is or
may be subject to various federal, state and local environmental, zoning and
other statutes and regulations regarding the sale, subdivision, and acquisition
of real estate and timeshare interests and their financing. The Company believes
that it is in full compliance in all material respects with such applicable laws
and regulations.
Development of the Company's property in Vermont is subject to
comprehensive environmental legislation, commonly referred to as Act 250, as
well as state administrative
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regulations. This regulatory framework, in general, encompasses such areas as
water quantity and quality, air quality, traffic considerations, availability of
municipal services, use of natural resources, impact of growth, energy
conservation and utility services, conformance with local and regional plans,
and public building approvals, together with a number of other safety and health
regulations. Additionally, each municipality has its own planning and zoning
requirements.
Permits and approvals mandated by such regulation for development of any
magnitude are often numerous, significantly time-consuming and onerous to obtain
and not guaranteed. The permit processes are administered by numerous state,
regional and local boards and agencies with independent jurisdictions. Permits
when received are subject to appeal or collateral attack and, in some cases, are
of limited duration, after which review is necessary. These requirements have a
direct bearing on the ability of the Company or others to further develop their
resorts in Vermont. All other Vermont ski areas are also subject to similar
processes. While the Company believes that its operations and development goals
are and will be in full compliance in all material respects with applicable
federal, state and local requirements, it must be recognized that growth and
development opportunities within Vermont may be limited and more costly as a
result of these legislative, regulatory or municipal requirements.
An application for an Act 250 Permit was filed by the previous owner of
the Resort for conceptual approval of a master plan for the Resort, including
560 condominiums and an 18-hole golf course. The District Environmental
Commission of the State of Vermont (the "Commission") issued a conceptual Land
Use Permit in response to such application. The Commission found that the
project described in the application would not cause or result in a detriment to
public health, safety or general welfare under the criteria described in 10
V.S.A., Section 6086(a). However, the conceptual Land Use Permit issued by the
Commission in August 1987 has expired. A new application and subsequent approval
thereof, as well as other regulatory approvals, would be needed if the Company
decided to develop a golf course.
The Company would need to lease additional land from either the State of
Vermont or the Town of West Windsor or both if it were to expand ski operations
to the peak of Mt. Ascutney. Under the terms of the lease, either the Vermont
Department of Forests and Parks and/or the Town of West Windsor would be
expected to have the right to review and comment on the location, design and
construction of improvements on the leased land and on many operational matters.
The Vermont Department of Forests and Parks leases land to most major ski areas
in Vermont. The terms of such leases are substantially similar for all ski areas
and the payment is calculated as a percentage of gross lift ticket revenues
based on the number of lifts that a ski area builds on state-owned land. See
"Risk Factors -- Permits and Regulatory Matters."
COMPETITION
The ski industry is highly competitive. The Company competes with
mountain resort areas in the United States, Canada and Europe for both
destination and day skiers, including mountain resorts in Vermont (many of which
have greater financial resources, greater name
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recognition and a greater share of the market). The Company also competes with
other leisure industry companies, including warm weather resorts, for the
vacation guest. The Company's major North American competitors include the major
New England ski areas, Colorado and Utah mountain resorts, the Lake Tahoe
mountain resorts in California and Nevada, the Quebec mountain resorts and the
major ski areas in the Canadian Rockies. Many of the Company's current
competitors have longer operating histories, greater name recognition, larger
customer bases and significantly greater financial and marketing resources than
the Company. The Company believes that the Resort is one of a relatively small
number of ski areas in North America able to attract both the day skier and the
destination guest by providing a comprehensive vacation experience. The
competitive position of the Resort is dependent upon many diverse factors such
as proximity to major metropolitan areas, prevailing weather conditions,
availability and cost of transportation to the Resort, pricing of ski services
offered, snowmaking capabilities, type and quality of skiing offered, duration
of the ski season, the number, quality and price of related services and lodging
facilities, and the reputation of the Resort.
Additionally, as the Company through the Future Joint Venture develops
the VOI program at the Resort, it may experience significant competition for
customers and for qualified personnel from other entities engaged in the
business of resort development, sales and operations, including vacation
interval ownership, condominiums, hotels and motels. Beginning in 1984 with the
successful entry of Marriott International, Inc. into the VOI business, many of
the world's leading lodging and hospitality companies have begun to develop and
sell VOIs. Major companies which now operate or are developing VOI resorts
include The Walt Disney Corporation, Hilton Hotels Corporation, Hyatt
Corporation, Four Seasons Hotels and Inter-Continental Hotels and Resorts. These
companies possess significantly greater financial, marketing, personnel and
other resources than those of the Company. Nevertheless, the vacation ownership
industry remains highly fragmented with many of North America's vacation
ownership resorts owned and operated by small, regional companies. Furthermore,
there are other hotels and vacation resorts in the Company's market that provide
competitive alternatives to the purchase of a VOI at the Resort.
EMPLOYEES
As of June 30, 1997, the Company had approximately 75 full-time,
year-round employees and approximately 175 additional peak-season employees. The
Company believes that its employee relations are satisfactory.
LEGAL PROCEEDINGS
The Company from time to time is involved in litigation in the ordinary
course of its business. The Company does not believe that it is involved in any
litigation that will, individually or in the aggregate, have a material adverse
effect on its business, financial condition or results of operations.
The athletic nature of the Company's ski operations subjects the Company
to litigation in the ordinary course of business, including claims for personal
injury. The Company
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maintains liability insurance that it considers adequate to insure claims
related to usual and customary risks associated with the operation of a ski
resort. See "Risk Factors -- Adequacy of Insurance Coverage."
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MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information concerning the
executive officers and directors of the Company upon the closing of the
Offering:
NAME AGE POSITION(S) WITH COMPANY
---- --- ------------------------
Steven H. Plausteiner......... 37 Chairman of the Board and Chief Executive
Officer
Susan D. Plausteiner.......... 37 Director, Chief Financial Officer and
Secretary
Dusan Plausteiner............. 63 Director and Chief Operating Officer
Dan Purjes.................... 47 Director
STEVEN H. PLAUSTEINER co-founded the Company and has served as its
Chairman of the Board and its Chief Executive Officer since its inception. From
April 1993 to January 1994, Mr. Plausteiner served as Senior Managing Director
in charge of Mortgage Backed Securities Sales and Trading at Smith Barney Inc.
From May 1991 to April 1993, Mr. Plausteiner served as a Managing Director of
Daiwa Securities America Inc. in the Collateralized Mortgage Obligations (CMO)
area. From September 1982 to February 1991, Mr. Steven Plausteiner held various
positions, including Senior Vice President -- Mortgage Trading Desk, of
Prudential Securities, Inc., formerly Prudential-Bache Securities, Inc. In 1995,
Mr. Plausteiner was elected to serve a one-year term on the Board of Directors
of the Vermont Ski Areas Association, the leading trade association of the
Vermont ski industry, and has been re-elected twice to serve successive one-year
terms. Mr. Plausteiner holds a Bachelor of Arts degree from Boston College.
SUSAN D. PLAUSTEINER co-founded the Company and has served as its Chief
Financial Officer since its inception. In September 1996, Ms. Plausteiner was
appointed by the Governor of Vermont to serve on the Board of Directors of the
Vermont Economic Development Authority, which promotes business development
through low cost and attractive loans. In October 1994, Ms. Plausteiner was
elected to the Board of Directors of the Vermont Chamber of Commerce and in
November 1994, she was appointed to the Board of Incorporators for David's
House, a charitable organization having its principal offices in Hanover, New
Hampshire. From September 1985 to June 1990, Ms. Plausteiner held various
positions, including Vice President - Financial Institutions Group, of
Prudential Securities, Inc. Ms. Plausteiner is a graduate of Tufts University
from which she received a Bachelor of Arts degree and holds a Masters of
Business Administration degree from the Wharton School at the University of
Pennsylvania.
DUSAN PLAUSTEINER co-founded the Company and has served as its Chief
Operating Officer since its inception. Prior to joining the Company, he has held
numerous senior operation positions at several ski resorts in the northeastern
United States. From July 1990 to October
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1993, Mr. Plausteiner served as Vice President of Planning and Construction for
the Olympic Regional Development Authority, where he was in charge of planning
and construction for the Whiteface and Gore Mountain Ski Areas, all of the 1980
Olympic venues including the bobsled and luge runs, the biathlon and
cross-country complex, and the Olympic ice arena in Lake Placid, New York. From
October 1976 to June 1990, Mr. Plausteiner held various positions, including
Director and Associate Manager of the Whiteface Ski Center in Lake Placid, New
York, where he was, among other things, responsible for planning and development
of the Ski Center in preparation for the 1980 Winter Olympics. From 1957 to
1976, Mr. Plausteiner held various positions at Mount Snow, a leading Vermont
ski resort, including Vice President-Operation and Planning of Mount Snow
Development Corporation, Vice President for Planning and Maintenance of Mount
Snow Hotel Corporation and Operations Manager of Mount Snow. In 1971, he was
appointed to the Board of Directors of the Mount Snow Corporation, the parent
company for the Mount Snow resort and ski operations, on which he served until
June 1976. In 1973, Mr. Plausteiner was appointed by the Governor of Vermont to
the Vermont Tramway Board where he chaired the Tramway Code Revision until June
1976.
DAN PURJES will serve as a Director of the Company for the period
commencing with the closing of this Offering and ending on the earlier of the
date that is five (5) years from the closing of this Offering or the date of his
resignation or removal from the Board of Directors. Mr. Purjes has been Chairman
and CEO of Josephthal Lyon & Ross Incorporated, an investment banking and
brokerage firm and a member of the New York Stock Exchange and other principal
exchanges since 1988. Previous to his appointment as CEO of Josephthal, he
served as its Director of Investment Banking. Prior to joining Josephthal Lyon &
Ross Incorporated in 1985, Mr. Purjes was a Vice President with a number of
securities firms including Bear Stearns & Co. and L.F. Rothschild Unterberg
Towbin. Mr. Purjes is also Chairman of NUR Advanced Technologies, Ltd., a
digital jet printer company. Mr. Purjes has B.S. and M.S. degrees in Computer
Sciences from the City College of New York School of Engineering. Mr. Purjes is
an affiliate of the Representative of this Offering. See "Certain Transactions."
Ms. Susan Plausteiner is the wife of Mr. Steven Plausteiner and
daughter-in-law of Mr. Dusan Plausteiner. Mr. Steven Plausteiner is the son of
Dusan Plausteiner. There are no other family relationships among the officers
and directors of the Company.
COMMITTEES OF THE BOARD OF DIRECTORS. Effective upon the closing of this
Offering, the Company will establish an Audit Committee which will consist of
such non-employee directors appointed upon the closing of the Offering as
designated by the Board of Directors. The Audit Committee will be responsible
for reviewing and making recommendations regarding the Company's employment of
independent auditors, the annual audit of the Company's financial statements and
the Company's internal accounting controls, practices and policies.
Additionally, the Company will establish a Compensation Committee which will
consist of those non-employee directors appointed upon the closing of the
Offering as designated by the Board of Directors. It will be responsible for
making recommendations to the Board of Directors regarding compensation
arrangements for executive officers of the Company, including annual bonus
compensation, and will consult with management of the Company regarding
compensation
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policies and practices. The Compensation Committee will also make
recommendations concerning the adoption of any compensation plans in which
management is eligible to participate, including the granting of stock options
or other benefits under such plans.
DIRECTORS' AND OFFICERS' TERMS AND DIRECTORS' FEES. Effective upon the
closing of this Offering, the Company's Board of Directors will consist of
six members. Each director is elected for a period of one year at the Company's
annual meeting of stockholders and serves until his or her successor is duly
elected and qualified. Directors who are not employees of the Company will
receive an annual retainer of $1,000, an option to purchase 5,000 shares of the
Company's Common Stock at its fair market value on the date of grant upon
election or appointment to the Board of Directors and an annual option to
purchase 5,000 shares of the Company's Common Stock at its fair market value on
the date of grant provided they have attended a required minimum number of board
and committee meetings during the year (except for Mr. Dan Purjes, who will not
receive any such options). Each option will have a term of five (5) years from
the date of grant, unless earlier terminated. The options are exercisable in
whole or in part on the earlier of (i) the first anniversary of the grant date
of the option, or (ii) death, or (iii) disability. See "Management -- 1997 Stock
Option Plan for Non-Employee Directors." All directors will be reimbursed for
out-of-pocket expenses incurred in connection with attendance at meetings of the
Board of Directors or committees thereof. Directors who are also officers of the
Company will not be compensated for their services as directors.
Each of the executive officers serves at the pleasure of the Company's
Board of Directors. See "Management--Employment Agreements."
EXECUTIVE COMPENSATION
No compensation was paid or was payable to the Chief Executive Officer
("CEO") of the Company and none of the Company's most highly compensated
executive officers had combined salaries and bonuses that equalled or exceeded
$100,000 for the years ended December 31, 1994, 1995 and 1996 (collectively,
with the CEO, the "Named Executive Officers").
EMPLOYMENT AGREEMENTS
Steven H. Plausteiner will enter into a three-year employment agreement
with the Company which is to commence upon the closing of the Offering. Under
the terms of his employment agreement, Steven Plausteiner will be entitled to
receive an annual base salary of $100,000 plus a bonus determined by the Board
of Directors. Steven Plausteiner will also be entitled to receive benefits
offered to the Company's senior executives generally by the Company.
In the event of the termination of Steven Plausteiner's employment by
the Company, other than for "cause" or the termination by Steven Plausteiner
following a breach by the Company of any material provision of the agreement,
Steven Plausteiner will be entitled to a lump sum payment equal to the annual
base salary for the remaining term of the employment agreement. In the event of
the death of Steven Plausteiner during the term of his employment
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agreement, his designated beneficiary (or if none, his estate) shall receive a
lump sum payment equal to the annual base salary for the remaining term of the
employment agreement. The Company will pay the premiums for life insurance on
behalf of Steven Plausteiner.
Susan D. Plausteiner will enter into a three-year employment agreement
with the Company which is to commence upon the closing of the Offering. Susan
Plausteiner's employment agreement will be substantially identical to Steven
Plausteiner's employment agreement with the Company with the only difference
being the amount of the premium for term life insurance.
1997 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS (THE "1997 PLAN")
The 1997 Plan was approved by the Board of Directors in August 1997 and
is expected to be approved by the stockholders prior to the closing of the
Offering.
The purpose of the 1997 Plan is to promote the interests of the Company
and its stockholders by increasing the proprietary and vested interest of
non-employee Directors in the growth and performance of the Company.
The 1997 Plan provides for awards of nonqualified options to
non-employee Directors of the Company or its affiliates (other than Mr. Dan
Purjes) as of the date of grant of an option to him ("Eligible Directors").
Unless earlier terminated by the 1997 Plan, each option shall have a term of 5
years from the date of grant. The options are exercisable in whole or in part on
the earlier of (i) the first anniversary of the grant date of the option, or
(ii) death, or (iii) disability. The exercise price per share of Common Stock
shall be 100% of the fair market value per share on the date the option is
granted.
Pursuant to the 1997 Plan, each Eligible Director will be awarded an
Annual Grant (as defined below). In addition, upon first election or appointment
to the Board, each newly elected Eligible Director will be granted an option to
purchase 5,000 shares of Common Stock (the "Initial Grant"). Immediately
following each annual meeting of the stockholders commencing with the meeting
following the close of fiscal year 1997, each Eligible Director will be granted
an option to purchase 5,000 shares of Common Stock (an "Annual Grant"). No
Eligible Director may be awarded more than one Initial Grant and no Eligible
Director may be awarded both an Initial Grant and an Annual Grant in any
12-month period.
The maximum number of shares of Common Stock with respect to which
awards may be granted under the 1997 Plan is 150,000. There are no outstanding
awards or options. Shares of Common Stock subject to options that terminate or
expire without the delivery of Common Stock will again be available for awards.
Also, shares tendered to the Company in satisfaction or partial satisfaction of
the exercise price of any award will increase the number of shares available for
awards except to the extent prohibited by Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The shares of Common
Stock to be delivered under the 1997 Plan will be made available from the
authorized but unissued shares of Common Stock or from treasury shares.
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The Company has agreed with the Representative that for a 13-month
period commencing on the date of this Prospectus, that it will not, without the
consent of the Representative, adopt or propose to adopt any plan or arrangement
permitting the grant, issue or sale of any shares of its Common Stock or issue,
sell or offer for sale any of its Common Stock, or grant an option for its
Common Stock, except for options to purchase up to an aggregate of 150,000
shares of Common Stock which shall have an exercise price per share no less than
the greater of (a) the initial public offering price of the Common Stock set
forth herein and (b) the fair market value of the Common Stock on the date
of grant. No option or other right to acquire Common Stock granted, issued or
sold during this period shall permit (a) the payment with any form of
consideration other than cash, (b) payment of less than the full purchase
price or exercise price for such shares of Common Stock or other securities
of the Company on or before the date of issuance, or (c) the existence
of stock appreciation rights, phantom options or similar arrangements.
The 1997 Plan is administered by the Board of Directors. Subject to the
provisions of the 1997 Plan, the Board is authorized to interpret the 1997 Plan,
to establish, amend and rescind any rules and regulations relating to it and to
make all other determinations necessary or advisable for its administration;
provided, however, that the Board has no discretion with respect to the
selection of Directors to receive options, the number of shares of Common Stock
subject to any such options, the purchase price thereunder or the timing of
grants of options. The determinations of the Board in the administration of the
1997 Plan, as described herein, shall be final and conclusive.
The exercise price of options may be satisfied in cash or, if permitted
by the Board at the time of grant, by exchanging shares of Common Stock which
have been owned by the optionee for at least six months, or by a combination of
cash and shares of Common Stock.
The options granted under the 1997 Plan may not be assigned or
transferred, except by will or the laws of descent and distribution.
No award may be granted under the 1997 Plan after the day following the
tenth annual meeting of stockholders at which Directors are elected.
The Board of Directors may amend or revise the 1997 Plan in whole or in
part at any time, subject to certain limitations set forth in the 1997 Plan.
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CERTAIN TRANSACTIONS
COMBINATION TRANSACTION
Prior to the consummation of the Offering, the Resort was owned by three
Delaware limited partnerships which are affiliates of the Company: Ascutney
Mountain Resort Hotel, L.P., Ascutney Mountain Resort, L.P. and Ascutney
Mountain Resort Realty, L.P. (collectively, the "Limited Partnerships"). In
addition, Ascutney Mountain Resort Foods, Inc., a Vermont corporation and
affiliate of the Company ("Foods"), is the holder of a liquor license for the
Resort. Further, Ascutney Mountain Resort Services, Inc., a Delaware corporation
and affiliate of the Company ("Services"), managed the Resort on behalf of the
Limited Partnerships. Immediately prior to the closing of this Offering, the
Company will acquire all of the partnership interests of each of the Limited
Partnerships and all of the outstanding shares of capital stock of Foods. It is
expected that Services will be dissolved.
Immediately prior to the closing of the Offering, all of the partnership
interests in each of the Limited Partnerships will be exchanged for an aggregate
of 2,000,000 shares of Common Stock of Snowdance, Inc. (the "Combination
Transaction"). Each of the Limited Partnerships has a corporate general partner
which has a 1% interest in the Limited Partnership of which it is general
partner. All of the issued and outstanding shares in each of the corporate
general partners are owned by Susan D. Plausteiner. All other interests in the
Limited Partnerships are owned by Steven H. Plausteiner or Susan D. Plausteiner.
As a result of the Combination Transaction, immediately prior to the closing of
this Offering, all of the outstanding shares in the Company will be owned by
Steven H. Plausteiner and Susan D. Plausteiner. It is expected that the
Combination Transaction will be treated as an Internal Revenue Code Section 351
transaction and be tax free to the Company and the Limited Partnerships. In
addition, immediately prior to the closing of this Offering, Steven H.
Plausteiner and Susan D. Plausteiner will contribute all of the outstanding
shares of capital stock of Foods to Snowdance, Inc. as a capital contribution
and Foods will become a wholly-owned subsidiary of Snowdance, Inc. As part of
the Combination Transaction, the Company will receive an ownership interest in
3/4 of 1 condominium unit which was previously owned by Ascutney Mountain Resort
Realty, L.P.
Immediately prior to the closing of this Offering, it is anticipated
that the Company, as lessee, will enter into a "net" lease agreement with Steven
H. Plausteiner and Susan D. Plausteiner, as lessors, to lease 17 slope-side
condominium units. It is contemplated that the Company will pay all expenses
associated with each of the condominium units other than debt service on the
underlying mortgage loans and that the Company will have an option to buy each
condominium unit for a net purchase price of $110,000 at any time during the
initial lease term or any renewal term. The Company expects that the annual rent
for each condominium unit will be in the range of $8,000 to $12,000 and that
each lease will have a term of 5 years with an option to renew for 5 years.
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AFFILIATE INVESTMENTS
Since acquiring the Resort in 1993, Steven and Susan Plausteiner have:
(i) invested in the Company approximately $3,153,400 in the form of equity
financing, (ii) guaranteed loans for the Company having an aggregate initial
principal amount of $1,940,000 through June 30, 1997 and (iii) loaned the
Company approximately $1,737,500 through June 30, 1997 (the "Related Loans"). It
is expected that approximately $1,180,000 of the Related Loans currently
outstanding will be converted, prior to the closing of the Offering, by Steven
and Susan Plausteiner to a capital contribution to the Company. The remaining
$537,000 of Related Loans which were made by Steven and Susan Plausteiner in the
first six months of 1997 will continue to be obligations of the Company and
beginning July 1, 1997 to accrue interest at a rate of 8% per annum and mature
on June 30, 2007. To date, the Company has made no interest or principal
payments with respect to the $537,000 of Related Loans. All of the foregoing
funds were used by the Resort to recommence operations in the winter of 1993-94,
to improve the Resort's infrastructure, including upgraded snowmaking and
grooming capabilities and for working capital.
HOGBACK ACQUISITION
Upon the consummation of this Offering, the Company will exchange an
aggregate of 500,000 shares of Common Stock for Hogback Mountain which is
currently owned by Skyline Partners, L.P. The Company will lease certain
buildings located at Hogback Mountain to Vermont Natural Company. See "Business
- -- Business Strategy - Opportunities for Further Development." Skyline Partners,
L.P. and Vermont Natural Company are controlled by Mr. Dan Purjes, the Chief
Executive Officer of the Representative, and a director of the Company upon the
closing of this Offering. Certain other affiliates of the Representative are
also beneficial owners of Skyline Partners, L.P. and Vermont Natural Company.
See "Underwriting."
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PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock, assuming that the
Combination Transaction and the Hogback Acquisition have been consummated as of
the date hereof, before and after giving effect to the sale of the shares of
Common Stock offered hereby, by (i) each person who is known by the Company to
own beneficially more than 5% of the outstanding shares of Common Stock, (ii)
each Director of the Company, (iii) each of the Named Executive Officers and
(iv) all Directors, Director - Nominees and Executive Officers of the Company as
a group.
<TABLE>
<CAPTION>
PERCENT BENEFICIALLY OWNED
NAME AND ADDRESS NUMBER OF SHARES --------------------------
OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) BEFORE OFFERING(1) AFTER OFFERING(1)
- ------------------- ------------------ --------------- --------------
<S> <C> <C> <C>
Steven H. Plausteiner(2) (3).......... 2,000,000 80% 60.6%
c/o Snowdance, Inc.
Route 44
Brownsville, VT 05037
Susan D. Plausteiner(2) (3)........... 2,000,000 80% 60.6%
c/o Snowdance, Inc.
Route 44
Brownsville, VT 05037
Skyline Partners, L.P (3) (4)......... 500,000 20% 15.2%
c/o Josephthal Lyon & Ross
Incorporated
200 Park Avenue
New York, NY 10166
Dusan Plausteiner..................... 0 -- --
c/o Snowdance, Inc.
Route 44
Brownsville, VT 05037
Dan Purjes (5)(6)..................... 500,000 20% 15.2%
c/o Josephthal Lyon & Ross
Incorporated
200 Park Avenue
New York, NY 10166
All Directors, Director-nominees and 2,500,000 100% 75.8%
Executive Officers as a group
(4 persons)...........................
</TABLE>
- ---------------------------
(1) Unless otherwise indicated, each person has sole investment and voting
power with respect to the shares listed in the table.
(2) Represents 2,000,000 shares held jointly by Steven H. Plausteiner and
Susan D. Plausteiner, each a Director and a named Executive Officer of
the Company.
(3) Skyline Partners, L.P., and Steven H. Plausteiner and Susan D.
Plausteiner (each a "Selling Stockholder"), have each granted to the
Underwriters a 45-day option to purchase in the aggregate up to 120,000
additional shares of Common Stock to cover over-allotments (up to the
first 50,000 shares from Skyline Partners L.P. and up to the next 70,000
shares from Steven and Susan Plausteiner). See "Underwriting." If the
over-
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allotment is exercised in full, Skyline Partners, L.P. will own 450,000
shares and Steven and Susan Plausteiner will own 1,930,000 shares of the
Common Stock after the Offering.
(4) Skyline Partners, L.P. is an entity controlled by Mr. Dan Purjes, who
will serve as a Director of the Company commencing with the closing of
the Offering.
(5) Mr. Purjes will serve as a Director of the Company commencing with the
closing of the Offering.
(6) Represents 500,000 shares of Common Stock held by Skyline Partners,
L.P., an entity which Mr. Purjes controls, and, accordingly may be
deemed to beneficially own such shares.
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DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 4,900,000 shares
of Common Stock, par value $0.001 per share, and 100,000 shares of preferred
stock, par value $.01 per share, issuable in series (the "Preferred Stock"). As
of August 6, 1997, there were no shares of Common Stock outstanding. Upon the
completion of this Offering, there will be 3,300,000 shares of Common Stock
outstanding and no shares of Preferred Stock outstanding. If the over-allotment
option is exercised in part or in full, there will be no change to the Common
Stock outstanding since the shares sold to meet the over-allotment option will
be from outstanding shares held by the Selling Stockholders.
The following description of the Company's capital stock does not
purport to be complete and is subject in all respects to applicable Delaware law
and to the provisions of the Company's Certificate of Incorporation and By-Laws,
in each case as amended to date.
COMMON STOCK
Holders of Common Stock are entitled to one vote for each share held on
all matters submitted to a vote of stockholders and do not have cumulative
voting rights. Accordingly, holders of a majority of the shares of Common Stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of Common Stock are entitled to receive ratably
such dividends, if any, as may be declared by the Board of Directors out of
funds legally available therefor. Upon the liquidation, dissolution or winding
up of the Company, the holders of Common Stock are entitled to receive ratably
the net assets of the Company available after the payment of all debts and other
liabilities. Holders of Common Stock have no preemptive, subscription,
redemption or conversion rights. The outstanding shares of Common Stock are, and
the shares offered by the Company in this Offering will be, when issued and paid
for, fully paid and nonassessable.
PREFERRED STOCK
The Company's Certificate of Incorporation provides that the Board of
Directors (or a committee designated by the Board of Directors) is authorized,
subject to certain limitations prescribed by law, without further stockholder
approval, to issue from time to time up to an aggregate of 100,000 shares of
Preferred Stock in one or more series and to fix or alter the designations,
powers, preferences, rights and any qualifications, limitations and restrictions
of the shares of each such series thereof, including the dividend rights,
conversion rights, voting rights and the number of shares constituting any
series or designations of such series. The issuance of Preferred Stock may have
the effect of delaying, deferring or preventing a change in control of the
Company. The rights, preferences and privileges of holders of Common Stock are
subject to, and may be adversely affected by, the rights of the holders of
shares of any series of Preferred
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Stock which the Company may designate and issue in the future. The Company has
no present plans to issue any shares of Preferred Stock.
REGISTRATION RIGHTS
The Representative of the Underwriters, as holder of the
Representative's Warrants, has "piggyback" rights to include the shares
underlying the Representative's Warrants in any registration statement filed by
the Company during the period ending six (6) years from the closing of this
Offering and also has "demand" rights during the period ending five (5) years
from the closing of this Offering to require, by action of not less than the
holders of a majority of the Representative's Warrants, up to one "demand"
registration by the Company, of the shares underlying the Representative's
Warrants. In addition, any holder of the Representative's Warrants has "demand"
rights during the period ending five (5) years from the closing of this Offering
to require one "demand" registration of the shares underlying such holder's
warrants, solely at the expense of such holder.
DELAWARE LAW AND CERTAIN CHARTER AND BY-LAW PROVISIONS
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law (the "DGCL"). Subject to certain exceptions, Section 203
prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years
following the time that such stockholder became an interested stockholder,
unless the interested stockholder attained such status with the approval of the
Board of Directors, owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (subject to certain
exclusions), or unless the business combination is approved in a prescribed
manner. A "business combination" includes mergers, asset sales and other
transactions resulting in a financial benefit to the interested stockholder.
Subject to certain exceptions, an "interested stockholder" is a person who,
together with affiliates and associates, owns, or within three years did own,
15% or more of the corporation's voting stock.
As permitted by the DGCL, the Certificate of Incorporation and By-Laws
provide that directors of the Company shall not be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty as
a director except for liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the DGCL or (iv) for any transaction from which
the director shall derive an improper personal benefit. In addition, the
Certificate of Incorporation provides that the Company shall, to the fullest
extent authorized by the DGCL, as amended from time to time, indemnify and hold
harmless all directors and officers against all expense, liability and loss
reasonably incurred or suffered by such indemnitee in connection therewith. Such
indemnification shall continue as to an indemnitee who has ceased to be a
director or
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officer and shall inure to the benefit of the indemnitee's heirs, executors and
administrators. The right to indemnification includes the right to be advanced
funds from the Company for expenses incurred in defending any proceeding for
which a right to indemnification is applicable.
The Company's By-Laws provide that special meetings of the stockholders
may be called at any time by resolution of the Board of Directors, or by the
Chairman of the Board, or at the request of stockholders owning 50% or more of
the issued and outstanding capital stock of the Company and entitled to vote,
but may not generally be called by other persons.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is Continental
Stock Transfer & Trust Company, 2 Broadway, New York, New York 10004.
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SHARES ELIGIBLE FOR FUTURE SALE
Upon the consummation of this Offering, the Company anticipates that it
will have 3,300,000 shares of Common Stock outstanding, excluding the shares of
Common Stock issuable upon exercise of the Representative's Warrants. The
800,000 shares of Common Stock offered hereby (920,000 if the Underwriter's
over-allotment option is exercised in full), will be freely tradeable without
restriction or further registration under the Securities Act, except for any
shares purchased by an "affiliate" of the Company (in general, a person who has
a control relationship with the Company) which will be subject to the
limitations of Rule 144 adopted under the Securities Act. All of the remaining
2,500,000 shares are deemed to be "restricted securities," as that term is
defined under Rule 144 promulgated under the Securities Act, in that such shares
were issued and sold by the Company in private transactions not involving a
public offering.
In general, under Rule 144 as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
the Company (or other persons whose shares are aggregated), who has owned
restricted shares of Common Stock beneficially for at least one year is entitled
to sell, within any three-month period, a number of shares that does not exceed
the greater of one percent of the total number of outstanding shares of the same
class or the average weekly trading volume during the four calendar weeks
preceding the sale. A person who has not been an affiliate of the Company for at
least the three months immediately preceding the sale and who has beneficially
owned shares of Common Stock for at least two years is entitled to sell such
shares under Rule 144 without regard to any of the limitations described above.
All of the Company's officers, directors and existing stockholders have
agreed not to, directly or indirectly, offer to sell, transfer, hypothecate or
otherwise encumber any of their shares of Common Stock for a period of 13 months
from the date of this Prospectus without the joint prior written consent of the
Representative and the Company.
Prior to this Offering, there has been no market for the Common Stock
and no prediction can be made as to the effect, if any, that market sales of
shares of Common Stock or the availability of such shares for sale will have on
the market prices prevailing from time to time. Nevertheless, the possibility
that substantial amounts of Common Stock may be sold in the public market may
adversely affect prevailing market prices for the Common Stock and could impair
the Company's ability to raise capital through the sale of its equity
securities. See "Risk Factors--No Prior Public Market; Possible Volatility of
Stock Price" and "Risk Factors--Shares Eligible for Future Sale."
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UNDERWRITING
The Underwriters named below (the "Underwriters"), for whom Josephthal
Lyon & Ross Incorporated is acting as Representative, have severally agreed,
subject to the terms and conditions of the Underwriting Agreement (the
"Underwriting Agreement"), to purchase from the Company and the Company has
agreed to sell to the Underwriters on a firm commitment basis the respective
number of shares of Common Stock (excluding the over-allotment shares) set forth
opposite their names:
UNDERWRITER NUMBER OF SHARES
- ----------- ----------------
Josephthal Lyon & Ross Incorporated....................
----------------
Total................................................ 800,000
================
The Underwriters are committed to purchase all shares of the Common
Stock offered hereby if any of such shares are purchased. The Underwriting
Agreement provides that the obligations of the several Underwriters are subject
to conditions precedent specified therein.
The Company has been advised by the Representative that the Underwriters
propose to initially offer the shares of Common Stock to the public at the
public offering price set forth on the cover page of this Prospectus and to
certain dealers at such price less concessions of not in excess of $.__ per
share. Such dealers may reallow a concession not in excess of $.__ per share of
Common Stock to other dealers. After the commencement of this Offering, the
public offering price, concession and reallowance may be changed by the
Representative.
The Representative has advised the Company that it does not anticipate
sales to discretionary accounts by the Underwriters to exceed five percent of
the total number of shares offered hereby.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments that the Underwriters may be required to make in connection with this
Offering. The Company has also agreed to pay to the Representative an expense
allowance on a non-accountable basis equal to two and one-half percent (2 1/2%)
of the gross proceeds derived from the sale of the Common Stock underwritten,
none of which has been paid to date.
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The Underwriters have been granted an option by the Selling
Stockholders, exercisable within forty-five (45) days after the date of this
Prospectus, to purchase up to an additional 120,000 shares of Common Stock (up
to the first 50,000 shares from Skyline Partners, L.P. and up to the next 70,000
shares from Steven and Susan Plausteiner) at the initial public offering price
per share of Common Stock offered hereby, less underwriting discounts and the
non-accountable expense allowance. Such option may be exercised only for the
purpose of covering over-allotments, if any, incurred in the sale of the Common
Stock offered hereby. To the extent such option is exercised in whole or in
part, each Underwriter will have a firm commitment, subject to certain
conditions, to purchase the number of the additional shares of Common Stock
proportionate to its initial commitment.
All of the Company's officers, directors and existing stockholders have
agreed not to, directly or indirectly, offer to sell, transfer, hypothecate or
otherwise encumber any of their securities for thirteen (13) months following
the date of this Prospectus without the joint prior written consent of the
Representative and the Company. An appropriate legend shall be marked on the
face of the certificates representing all of such securities.
The Company has agreed that, for five (5) years after the closing of
this Offering, the Representative will have the right to designate Dan Purjes to
be elected to the Company's Board of Directors. The Representative has
designated Mr. Purjes and Mr. Purjes has indicated to the Representative his
intention to accept such designation. In the event the Representative elects not
to designate Mr. Purjes to serve on the Company's Board of Directors (or in the
event Mr. Purjes rejects any such designation), the Representative may then
designate a non-voting observer (reasonably acceptable to the Company) to attend
meetings of the Board of Directors.
The Company has also agreed that in connection with the Company's
discussions and negotiations with timeshare developers, the Representative shall
act as the Company's exclusive financial advisor. The Representative will
receive a fee to be mutually and reasonably agreed upon in good faith by the
Company and the Representative, upon the consummation of a transaction with the
Company and a timeshare developer that the Representative introduced to the
Company.
In connection with this Offering, the Company has agreed to sell to the
Representative, for nominal consideration, the Representative's Warrants to
purchase from the Company 80,000 shares of Common Stock. The Representative's
Warrants are initially exercisable for shares of Common Stock at a price per
share equal to 120% of the initial public offering price per share of Common
Stock for a period of four (4) years commencing one (1) year from the date of
this Prospectus and are restricted from sale, transfer, assignment, or
hypothecation for a period of ________ (__) months from the date hereof. The
Representative's Warrants grant to the holders thereof certain rights of
registration for the securities issuable upon exercise of the Representative's
Warrants. See "Description of Capital Stock -- Registration Rights."
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The Company has also agreed to grant to the Representative a right of
first refusal, for a period of three (3) years commencing on the closing of this
Offering, with respect to any sale of securities to be made by the Company or
any of its affiliates, which right may be assigned by the Representative to any
of its affiliates. If the gross proceeds of the offering are less than
$6,000,000, such right of first refusal only pertains to shares sold by existing
stockholders immediately prior to the closing of this Offering.
The foregoing is a summary of the principal terms of the agreements
described above and does not purport to be complete. Reference is made to a copy
of each such agreement which are filed as exhibits to the Registration
Statement. See "Available Information."
In connection with this Offering, certain Underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock.
Such transactions may include stabilization transactions effected in accordance
with Rule 104 of Regulation M, pursuant to which such persons may bid for or
purchase Common Stock for the purpose of stabilizing its market price. The
Underwriters also may create a short position for the account of the
Underwriters by selling more Common Stock in connection with the Offering than
they are committed to purchase from the Company, and in such case may purchase
Common Stock in the open market following completion of the Offering to cover
all or a portion of such short position. The Underwriters may also cover all or
a portion of such short positions, up to 120,000 shares of Common Stock, by
exercising the over-allotment option. In addition, the Representative may impose
"penalty bids" under contractual arrangements with the Underwriters, whereby it
may reclaim from an Underwriter (or dealer participating in the Offering) for
the account of other Underwriters, the selling concession with respect to Common
Stock that is distributed in the Offering but subsequently purchased for the
account of the Underwriters in the open market. Any of the transactions
described in this paragraph may result in the maintenance of the price of the
Common Stock at a level above that which might otherwise prevail in the open
market. None of the transactions described in this paragraph is required, and,
if they are undertaken, they may be discontinued at any time.
Upon the consummation of this Offering, the Company will exchange an
aggregate of 500,000 shares of its Common Stock for Hogback Mountain which is
currently owned by Skyline Partners, L.P. The Company also intends to lease the
buildings containing the Skyline Restaurant and gift shop at Hogback Mountain to
Vermont Natural Company, the current owner and operator of such businesses. The
lease will be on a month-to-month basis, terminable by the Company or the tenant
on 30 days notice at a rent of $5,000 per month. See "Business -- Business
Strategy - Opportunities For Further Development." Skyline Partners, L.P. and
the Vermont Natural Company are controlled by Mr. Dan Purjes, the Chief
Executive Officer of the Representative and a director of the Company upon the
closing of this Offering. Certain other affiliates of the Representative are
also beneficial owners of Skyline Partners, L.P. and Vermont Natural Company.
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_____________ is acting as Qualified Independent Underwriter and in
exchange for its services will receive the compensation described below.
Since the Representative may have a "conflict of interest" with the
Company as defined in Rule 2720 of the NASD's Conduct Rules, the Offering is
being made in conformity with certain applicable provisions of Rule 2720 of the
NASD. Accordingly, the initial public offering price of the shares of Common
Stock may not be higher than as recommended by an independent investment banking
firm which qualifies as a "qualified independent underwriter" and "which shall
also participate in the preparation of the registration statement and prospectus
. . . and which shall exercise the usual standards of due diligence." _____ is
acting as a "qualified independent underwriter," and will be paid a fee of
$___________ in consideration for its services and expenses.
Prior to this Offering, there has been no public market for the Common
Stock. Accordingly, the initial public offering price of the Common Stock was
determined by negotiation between the Company and the Qualified Independent
Underwriter. The factors considered in determining such prices and terms, in
addition to the prevailing market conditions, include the history of and the
prospects for the industry in which the Company competes, an assessment of the
Company's management, the prospects of the Company, its capital structure and
such other factors that were deemed relevant. The offering price does not
necessarily bear any relationship to the assets, appraised value, results of
operations or net worth of the Company.
Pursuant to Rule 2720 of the NASD, ________, a member of the NASD, is
required, in acting as a "qualified independent underwriter," to undertake to
the NASD the legal responsibilities and liabilities of an underwriter under the
Securities Act, specifically including those inherent in Section 11 thereof. The
Company will indemnify ________ against such liabilities, if any, to the extent
permitted by law.
57
<PAGE>
<PAGE>
LEGAL MATTERS
The validity of the Common Stock offered hereby and certain legal
matters in connection with the Offering will be passed upon for the Company by
Sonnenschein Nath & Rosenthal, New York, New York. Orrick, Herrington &
Sutcliffe LLP, New York, New York has acted as counsel for the Underwriters in
connection with this Offering.
EXPERTS
The financial statements as of December 31, 1996 and for the years ended
December 31, 1996 and 1995 included in this Prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report appearing
herein, and have been so included in reliance upon the report of such firm given
upon their authority as experts in auditing and accounting.
58
<PAGE>
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form SB-2 relating to the Common Stock
offered hereby. This Prospectus, which is part of the Registration Statement,
does not contain all of the information included in the Registration Statement
and the exhibits and schedules thereto. For further information with respect to
the Company and the Common Stock offered hereby, reference is made to the
Registration Statement, including the exhibits and schedules thereto. Statements
contained in this Prospectus concerning the provisions or contents of any
contract, agreement or any other document referred to herein are not necessarily
complete. With respect to each such contract, agreement or document filed as an
exhibit to the Registration Statement, reference is made to such exhibit for a
more complete description of the matters involved.
The Registration Statement, including the exhibits and schedules
thereto, may be inspected without change at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, DC 20549 and
at the Commission's regional offices at 7 World Trade Center, 13th Floor, New
York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661.
As a result of this Offering, the Company will become subject to the
information and periodic reporting requirements of the Exchange Act, and, in
accordance therewith, will file periodic reports, proxy statements and other
information with the Commission. Such periodic reports, proxy statements and
other information will be available for inspection and copying at the public
reference facilities and regional offices referred to above. The Commission also
maintains a Web site at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding issuers that file
electronically with the Commission. The Common Stock is expected to be listed on
the American Stock Exchange and, upon such listing, such reports, proxy
statements and other information can also be inspected and copied at the offices
of the American Stock Exchange, 86 Trinity Place, New York, New York 10006-1881.
The Company intends to furnish to its stockholders annual reports
containing audited consolidated financial statements certified by independent
public accountants for each fiscal year and will make available quarterly
reports containing unaudited consolidated financial statements for the first
three quarters of each fiscal year.
Any person receiving a copy of this Prospectus may obtain, without
charge, upon written or oral request, a copy of any of the documents
incorporated by reference herein, except for the exhibits to such documents
(other than the exhibits expressly incorporated in such documents by reference).
Requests should be directed to: Snowdance, Inc., Route 44, Brownsville, Vermont
05037, Attention: Steven H. Plausteiner (telephone (802) 484-7000).
59
<PAGE>
<PAGE>
SNOWDANCE, INC. (FORMERLY
ASCUTNEY MOUNTAIN RESORT, L.P. AND AFFILIATED ENTITIES)
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page
<S> <C>
INDEPENDENT AUDITORS' REPORT F-1
FINANCIAL STATEMENTS:
Balance Sheets as of December 31, 1996 and March 31, 1997 F-2
Statements of Operations for the Years Ended
December 31, 1995 and 1996 and the Three Months Ended March 31, 1996 and 1997 F-3
Statements of Changes in Stockholders' Deficit for the Years Ended
December 31, 1995 and 1996 and the Three Months Ended March 31, 1997 F-4
Statements of Cash Flows for the Years Ended
December 31, 1995 and 1996 and the Three Months Ended March 31, 1996 and 1997 F-5
Notes to Financial Statements F-6-11
PRO FORMA FINANCIAL INFORMATION F-12-16
</TABLE>
<PAGE>
<PAGE>
The accompanying financial statements give effect to the consummation of the
Combination as described in Note 1 to the financial statements. The following
report is in the form that will be furnished by Deloitte & Touche LLP upon
consummation of the Combination assuming that no other material events have
occurred that would affect the accompanying financial statements or required
disclosures therein.
Deloitte & Touche LLP
New York, New York
August 11, 1997
INDEPENDENT AUDITORS' REPORT
To the Stockholders of Snowdance, Inc.
We have audited the accompanying balance sheet of Snowdance, Inc. (formerly
Ascutney Mountain Resort, L.P. and affiliated entities) (see Note 1 to the
financial statements) as of December 31, 1996 and the related statements of
operations, stockholders' deficit and cash flows for the years ended December
31, 1995 and 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Snowdance, Inc. (formerly Ascutney Mountain
Resort, L.P. and affiliated entities - See Note 1) as of December 31, 1996 and
the results of its operations and its cash flows for the years ended December
31, 1995 and 1996 in conformity with generally accepted accounting principles.
New York, New York
July 11, 1997 (September __, 1997 as to Note 1)
F-1
<PAGE>
<PAGE>
SNOWDANCE, INC. (FORMERLY ASCUTNEY MOUNTAIN RESORT, L.P. AND AFFILIATED
ENTITIES - SEE NOTE 1)
BALANCE SHEETS
DECEMBER 31, 1996 AND MARCH 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
DECEMBER MARCH 31,
31, 1997
1996
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 38,480 $ 49,799
Accounts receivable (less allowance for doubtful accounts of $8,000 in both periods) 131,437 81,935
Other receivables 44,492 47,075
Inventories 47,402 32,649
Prepaid expenses 33,237 58,661
----------- -----------
Total current assets 295,048 270,119
PROPERTY AND EQUIPMENT - Net 1,210,376 1,181,249
DEFERRED FINANCING COSTS - Net 77,118 74,432
OTHER ASSETS 6,824 6,824
----------- -----------
TOTAL ASSETS $ 1,589,366 $ 1,532,624
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 610,194 $ 507,916
Accrued expenses and other liabilities 179,354 80,321
Advance deposits 151,328 82,883
Current portion of long-term debt 216,620 217,119
----------- -----------
Total current liabilities 1,157,496 888,239
----------- -----------
LONG-TERM DEBT:
Line of credit 750,000 575,000
Loans payable 550,458 533,600
Notes to related party 1,180,567 1,328,014
----------- -----------
Total long-term debt 2,481,025 2,436,614
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Common stock (par value $.001 per share, 4,900,000 shares authorized, 2,000 2,000
2,000,000 shares outstanding)
Preferred stock (par value $.01 per share, 100,000 shares authorized, none outstanding) - -
Additional paid-in capital 1,050,000 1,050,000
Accumulated deficit (3,101,155) (2,844,229)
----------- -----------
Total stockholders' deficit (2,049,155) (1,792,229)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,589,366 $ 1,532,624
=========== ===========
</TABLE>
See notes to financial statements.
F-2
<PAGE>
<PAGE>
SNOWDANCE, INC. (FORMERLY ASCUTNEY MOUNTAIN RESORT, L.P. AND AFFILIATED
ENTITIES - SEE NOTE 1)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1995 AND 1996 AND
THREE MONTHS ENDED MARCH 31, 1996 AND 1997 (UNAUDITED)
<TABLE>
<CAPTION>
YEARS ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES:
Lodging $1,540,267 $1,695,845 $ 584,826 $ 770,694
Food and beverage 1,010,076 970,086 283,900 313,981
Ski and fitness 997,978 1,064,720 680,136 833,320
Other 318,097 252,567 68,459 73,289
--------- ---------- ---------- ---------
Total revenues 3,866,418 3,983,218 1,617,321 1,991,284
--------- ---------- ---------- ---------
COST OF SALES:
Lodging 630,158 827,620 254,566 243,600
Food and beverage 745,099 848,513 278,294 244,884
Ski and fitness 857,001 950,239 432,179 452,943
Other 192,952 140,753 44,644 36,114
--------- ---------- ---------- ---------
Total cost of sales 2,425,210 2,767,125 1,009,683 977,541
--------- ---------- ---------- ---------
Gross profit 1,441,208 1,216,093 607,638 1,013,743
--------- ---------- ---------- ---------
OPERATING EXPENSES:
Administrative and general 522,321 478,411 134,739 133,682
Sales and marketing 572,351 592,732 155,997 157,745
Depreciation 116,656 122,714 30,258 31,383
Heat, light and power 582,025 633,173 230,893 233,636
Insurance 103,181 145,842 33,938 35,461
Real estate and other taxes 106,162 149,610 37,847 22,918
Repairs and maintenance 372,456 370,756 109,732 92,302
--------- ---------- ---------- ----------
Total operating expenses 2,375,152 2,493,238 733,404 707,127
--------- ---------- ---------- ----------
NET OPERATING (LOSS) INCOME (933,944) (1,277,145) (125,766) 306,616
--------- ---------- ---------- ----------
OTHER INCOME (EXPENSE):
Interest income 386 2,174 530 226
Gain on sale of assets 562,267 18,115 - -
Related party interest expense (16,275) (85,027) (23,049) (24,434)
Interest expense (189,123) (158,936) (26,797) (25,482)
--------- ----------- ---------- ---------
Total other income (expense) 357,255 (223,674) (49,316) (49,690)
--------- ----------- ---------- ---------
NET (LOSS) INCOME $(576,689) $(1,500,819) $ (175,082) $256,926
========= =========== ========== =========
(LOSS) INCOME PER COMMON SHARE $(.29) $(.75) $(.09) $.13
===== ===== ===== ====
Weighted average number of shares
outstanding 2,000,000 2,000,000 2,000,000 2,000,000
========= ========= ========= =========
See notes to financial statements.
F-3
<PAGE>
<PAGE>
SNOWDANCE, INC. (FORMERLY
ASCUTNEY MOUNTAIN RESORT, L.P. AND AFFILIATED ENTITIES - SEE NOTE 1)
STATEMENTS OF STOCKHOLDERS' DEFICIT
YEARS ENDED DECEMBER 31, 1995 AND 1996
AND THREE MONTHS ENDED MARCH 31, 1997 (UNAUDITED)
</TABLE>
<TABLE>
<CAPTION>
Additional Accumulated
Common Stock Paid-in Capital Deficit Total
------------ --------------- ------- -----
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995 $2,000 $ (939,817) $ (937,817)
Capital contributions $ 400,000 400,000
Distributions (78,361) (78,361)
Net loss (576,689) (576,689)
-------- ---------- ----------- -----------
BALANCE, DECEMBER 31, 1995 2,000 400,000 (1,594,867) (1,192,867)
Capital contributions 650,000 650,000
Distributions (5,469) (5,469)
Net loss (1,500,819) (1,500,819)
-------- ---------- ----------- -----------
BALANCE, DECEMBER 31, 1996 2,000 1,050,000 (3,101,155) (2,049,155)
Net income (unaudited) 256,926 256,926
BALANCE, MARCH 31, 1997 -------- ---------- ------------ -----------
(UNAUDITED) $2,000 $1,050,000 $(2,844,229) $(1,792,229)
====== ========== ============ ===========
</TABLE>
See notes to financial statements.
F-4
<PAGE>
<PAGE>
SNOWDANCE, INC. (FORMERLY
ASCUTNEY MOUNTAIN RESORT, L.P. AND AFFILIATED ENTITIES - SEE NOTE 1)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995 AND 1996 AND
THREE MONTHS ENDED MARCH 31, 1996 AND 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Three Months Ended
December 31, March 31,
1995 1996 1996 1997
(Unaudited)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net (loss) income $ (576,689) $(1,500,819) $(175,082) $ 256,926
Adjustments to reconcile net (loss) income to
net cash used in operating activities:
Depreciation 116,656 122,714 30,258 31,383
Amortization 10,743 10,726 2,686 2,686
Gain on sale of assets (562,267) (18,115) -- --
Changes on sale of assets
(Increase) decrease in:
Accounts receivable (105,181) 85,867 187,797 49,502
Other receivables (50,404) 24,268 31,142 (2,583)
Inventory (5,439) 1,856 10,806 14,753
Prepaid expenses 15,354 (10,167) (49,413) (25,424)
Other assets (2,345) (2,476) -- --
Increase (decrease) in:
Accounts payable 145,002 155,488 30,861 (102,278)
Advance deposits 47,067 36,674 (89,008) (68,445)
Accrued expenses (380,094) 6,224 (114,537) (99,033)
----------- ---------- -------- ---------
Net cash (used in) provided by operating (1,347,597) (1,087,760) (134,490) 57,487
activities ----------- ---------- -------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of property and equipment (34,466) (44,576) (6,650) (2,256)
Sales of property and equipment 587,653 19,053 -- --
------- -------- -------- --------
Net cash provided by (used in) investing 553,187 (25,523) (6,650) (2,256)
activities ------- -------- ------ ------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions (5,172) (5,469)
Increase in deferred financing costs (32,788) -- (543) --
Increase (decrease) in loans payable 538,311 389,000 337,845 (43,912)
Capital contributions from owners 400,000 650,000 -- --
------- ---------- -------- -------
Net cash provided by (used in) financing 900,351 1,033,531 337,302 (43,912)
activities ------- ---------- ------- -------
NET INCREASE (DECREASE) IN CASH 105,941 (79,752) 196,162 11,319
CASH, BEGINNING OF PERIOD 12,291 118,232 71,488 38,480
---------- ---------- ---------- ----------
CASH, END OF PERIOD $ 118,232 $ 38,480 $ 267,650 $ 49,799
========== ========== ========== ==========
SUPPLEMENTAL DISCLOSURE OF NON-
CASH INVESTING AND FINANCING
ACTIVITY:
Distribution of property to owners $ 73,189 $ -- $ -- $ --
========== ========== ========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid during the period for interest $ 200,324 $ 194,605 $ 38,374 $ 36,074
========== ========== ========== ==========
</TABLE>
See notes to financial statements.
F-5
<PAGE>
<PAGE>
SNOWDANCE, INC. (FORMERLY
ASCUTNEY MOUNTAIN RESORT, L.P. AND AFFILIATED ENTITIES - SEE NOTE 1)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1996 AND
THREE MONTHS ENDED MARCH 31, 1996 AND 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
Snowdance, Inc. is a Delaware corporation formed on August 7, 1997. On
September __, 1997, immediately prior to the date of this Prospectus,
Snowdance, Inc., in a transaction hereinafter referred to as the
"Combination," issued 2,000,000 shares of its common stock to Susan
Plausteiner and Steven Plausteiner in exchange for all of the
partnership interests in three limited partnerships: Ascutney Mountain
Resort, L.P., Ascutney Mountain Resort Hotel, L.P., and Ascutney
Mountain Resort Realty, L.P. (the "Partnerships"), which together owned
the Ascutney Mountain Resort in Brownsville, Vermont, and for the
common stock of Ascutney Mountain Foods, Inc. ("Foods"), the holder of
the resort's liquor license.
Each of the Partnerships had a general partner which had a 1% interest
in the limited partnership of which it was the general partner. All of
the issued and outstanding shares in each of the general partners
(Snowdance Hotel Company, Snowdance Ski Company and Snowdance Realty
Company) were owned by Susan Plausteiner. All of the limited
partnership interests of the Partnerships and all of the outstanding
shares of Foods were owned by Susan and Steven Plausteiner.
The Combination was accounted for as a reorganization of entities under
common control in a manner similar to a pooling of interests.
Accordingly, the accompanying financial statements reflect the
operations of Snowdance, Inc. and the Partnerships and Foods as if
combined for all periods. All material intercompany balances and
transactions have been eliminated in combination. The combined entities
are hereinafter referred to as the "Company".
The Ascutney Mountain Resort is a four-season resort which includes a
ski area, an 18,000 square foot comprehensive fitness center, a 212
room hotel, four restaurants, and 30,000 square feet of conference
space. The resort was purchased in the summer of 1993 for a cost of
approximately $1.13 million and reopened in December 1993.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PROPERTY AND EQUIPMENT - Property and equipment are stated at cost less
accumulated depreciation. Depreciation is computed using the
straight-line method based upon the estimated useful lives of the
assets, ranging from 5 to 7 years for furniture and equipment to
thirty-nine years for buildings. The cost of maintenance, repairs,
minor renewals and improvements are charged to income as incurred.
The Company periodically reviews its property for impairment.
Impairment is determined to exist when estimated amounts recoverable
through future operations and sale of a property on an undiscounted
basis are below that property's carrying value. If a property is
determined to be impaired, it must be written down to its estimated
fair value. Management of the Company believes that no impairment
exists at December 31, 1996.
INVENTORIES - Inventories consist primarily of food, beverages and
supplies and are stated at the lower of cost or market. Inventories are
recorded using the FIFO (first-in, first-out) method.
F-6
<PAGE>
<PAGE>
DEFERRED FINANCING COSTS - Deferred financing costs consist of costs
directly associated with issuance of debt and the line of credit. These
costs are amortized over the life of the related loans and credit line
using the effective interest method. Accumulated amortization was
$30,345 at December 31, 1996.
INCOME TAXES - During the periods presented, the Company was comprised
primarily of partnerships for income tax purposes. The Partnerships are
not taxable for U.S. Federal income tax purposes. The partners report
their distributive share of the Partnerships' losses in their
individual income tax returns.
For income tax purposes, Partnership results are reported for the
calendar year. The principal difference between the accounting policies
used for tax reporting purposes and those used for financial reporting
is that depreciation is calculated using accelerated methods. The tax
basis of the Partnerships' assets and liabilities is approximately
$131,000 lower than the amounts reported for financial statement
purposes at December 31, 1996.
The other entities included in the Company for these financial
statements are taxable corporations, which did not have significant
taxable income or losses.
ADVERTISING EXPENSE - The Company expenses advertising costs as
incurred. The Company expensed $314,535 in 1996 and $284,788 in 1995.
USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.
INTERIM FINANCIAL DATA - The interim financial data and related notes
included herein are unaudited; however, in the opinion of management,
the Company's interim financial data for the three month periods ended
March 31, 1997 and 1996 includes all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation of the
results of the interim periods. The operating results for interim
periods may not be indicative of the results expected for the full
year.
3. PROPERTY AND EQUIPMENT - NET
Major classifications of property and equipment are summarized below:
DECEMBER 31,
1996
Land $ 159,161
Buildings 820,601
Furniture, fixtures, and equipment 581,183
---------
1,560,954
---------
Less accumulated depreciation (350,578)
---------
Property and equipment - net $1,210,376
==========
F-7
<PAGE>
<PAGE>
4. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities at December 31, 1996 are
summarized as follows:
Payroll and payroll benefits $ 87,309
Taxes 39,513
Utilities 25,601
Interest 21,954
Other 4,977
--------
Total $179,354
========
5. LONG-TERM DEBT
a. Loans Payable - Loans payable at December 31, 1996 consisted of:
<TABLE>
<CAPTION>
BALANCE
LENDER MATURITY INTEREST RATE DECEMBER 31, 1996
<S> <C> <C> <C>
Vermont Economic June 3, 2004 5.50% per annum $352,600
Development Authority ("VEDA") (i)
West Windsor Block Grant (ii) February 20, 2010 5.00 per annum 229,225
--------
581,825
Less: Current Maturities 31,367
--------
Total long-term loans payable $550,458
========
</TABLE>
(i) Guaranteed by the Company's current owners and by
Snowdance Ski Company and Snowdance Hotel Company.
This loan has a balloon payment at maturity of
$171,639. Under the terms of this loan agreement, the
Company may not make distributions (except certain
distributions with respect to the offset of income
tax liabilities) without consent of VEDA.
(ii) Guaranteed by the Company's current owners.
Under the terms of the loans, interest and principal are
payable monthly until maturity, at which time the remaining
principal balance is payable plus any accrued interest.
b. Line of Credit - Line of Credit payable at December 31, 1996
consisted of:
<TABLE>
<CAPTION>
BALANCE BALANCE
LENDER MATURITY INTEREST RATE DECEMBER 31, 1996 MARCH 31, 1997
<S> <C> <C> <C> <C>
Fleet Bank (i) February 28, 2004 Prime + 1.75% $925,000 $750,000
</TABLE>
$175,000 of the line of credit is a current liability at
December 31, 1996 and was paid during February 1997. The
interest rate on this debt was 10.75% per annum at December
31, 1996.
F-8
<PAGE>
<PAGE>
(i) Guaranteed by the Company's current owners and by
Ascutney Mountain Resort Realty, L.P., Snowdance Ski
Company, Snowdance Hotel Company, and Snowdance
Realty Company.
Under the terms of the revolving line of credit, beginning in February
of 1996, the principal amount available was to have been reduced by
$175,000 annually with a balloon payment on the balance remaining at
maturity. This line of credit was paid off subsequent to year-end (see
Note 8).
c. Notes Payable to Related Parties - As part of its original
purchase of the resort, the Company acquired 24.75 condominium
units. One of these units was sold in 1994. In 1995, six of
these units were sold through November for a gain on sale of
$562,267. In November of 1995, the Company transferred 17
units to its current owners (cost basis of approximately
$4,305 per unit). The current owners arranged for financial
institution mortgage financing collateralized by the
condominium units, and loaned the proceeds to the Company on
terms which mirror the terms of the mortgage financing. The
Company is also entitled to use the condominium units as
rental properties and is responsible for all expenses relating
to them (see Note 8).
Notes payable to related parties at December 31, 1996
consisted of the following:
<TABLE>
<CAPTION>
MATURITY INTEREST RATE BALANCE
DECEMBER 31, 1996 DECEMBER 31, 1996
<S> <C> <C>
June 21, 2025 9.287% per annum $ 497,079
February 1, 2026 7.500 per annum 275,887
July 1, 2026 (i) 7.875 per annum 139,512
April 1, 2026 (ii) 7.625 per annum 278,342
----------
1,190,820
Less current maturities 10,253
----------
Long term notes payable to related party $1,180,567
==========
</TABLE>
(i) The interest rate will reset on every July 1 and will
be equal to the weekly average yield on United States
Treasury securities adjusted to a constant maturity
of one year as made available by the Federal Reserve
Board plus three percentage points. The interest rate
shall not exceed 13.875%.
(ii) The interest rate will reset on every April 1 and
will be equal to the weekly average yield on United
States Treasury securities adjusted to a constant
maturity of one year as made available by the Federal
Reserve Board plus three percentage points. The
interest rate shall not exceed 13.625%.
Under the terms of the notes payable to related parties, interest and
principal are payable monthly until maturity.
During the three months ended March 31, 1997, the Company's current
owners advanced the Company $150,000. These advances bear interest at
the rate of 8% beginning July 1, 1997, and mature June 30, 2007.
F-9
<PAGE>
<PAGE>
The scheduled principal maturities for the following five years,
including the loans payable, line of credit and notes payable to
related party are summarized below:
YEAR TOTAL
1997 $ 216,620
1998 219,204
1999 221,960
2000 224,894
2001 228,019
Thereafter 1,586,948
----------
Total $2,697,645
==========
The Company's management believes that the fair value of its long-term
debt approximates its carrying value at December 31, 1996.
6. LEASES
The Company leases a ski rental shop to an unrelated third party. Rents
received by the Company were computed as 4.5% and 4.0% of the Company's
gross daily and season ticket sales in 1996 and 1995, respectively.
Revenue earned through this arrangement was $41,525 in 1996 and $26,679
in 1995.
7. LITIGATION
In the normal course of business, certain litigation is initiated
against the Company. Generally, those claims are insured and in the
opinion of management, disposition of litigation will not have a
material adverse effect on the Company's liquidity, financial
position or results of operations.
8. SUBSEQUENT EVENTS
PLANNED EQUITY OFFERING - During 1997, the Company's management decided
to seek additional equity capital through a planned public offering of
800,000 shares of common stock (the "Offering"). The net proceeds from
the Offering, anticipated to be approximately $6,660,000, would be used
for upgrades and expansion to the resort's ski lifts, snowmaking,
grooming and trail systems, purchase of additional mountain equipment
and vehicles, resort improvements, preliminary development of a golf
course on resort property, development of a vacation ownership
intervals program, repayment of debt, and for working capital. In
addition, the 17 condominium units currently owned by the Company's
owners (see Note 5) will be leased to Snowdance, Inc., and $1,180,600
of the related party debt will be contributed as capital. The ability
of the Company to successfully complete the Offering and its timing
cannot be determined at this time.
REAL ESTATE PURCHASE - Upon the closing of the Offering, Snowdance Inc.
will acquire approximately 800 acres of land known as Hogback Mountain,
located in Marlboro, Vermont. The Company plans to explore possible
development opportunities for this land. As consideration for the
purchase of this land, Snowdance, Inc. will issue 500,000 shares of its
common stock to the owners of the assets, one of whom is a partnership
whose principal beneficial owner will serve as a Director of Snowdance,
Inc. upon completion of the Offering.
F-10
<PAGE>
<PAGE>
LINE OF CREDIT - On June 30, 1997, the Company entered into a revolving
line of credit borrowing arrangement with Mascoma Bank. Total
borrowings available under this line of credit are $1,500,000, bear
interest at the prime rate plus 1.75%, which equalled 10.25% per annum
at June 30, 1997, payable monthly, with principal due on June 30, 1998.
The debt is collateralized by a first mortgage on the Company's real
estate assets, as well as on the two private residences owned by the
Company's current owners. The Company immediately borrowed $914,425 and
used the proceeds to prepay the Fleet Bank line of credit (see Note 5)
and to pay loan fees and costs.
CAPITAL RESOURCES - In addition to the borrowing capacity added by the
Mascoma Bank line of credit discussed above, the Company's current
owners have set aside funds from their personal assets in an amount
they deem sufficient to fund the Company's operations through at least
June 30, 1998, or until successful completion of the Offering or
another source of capital can be secured.
******
F-11
<PAGE>
<PAGE>
PRO FORMA FINANCIAL INFORMATION
The pro forma financial information has been prepared to show the effect of the
Hogback Acquisition, the closing of the Offering and application of the
estimated net proceeds therefrom and the conversion of a portion of the Related
Loans to a capital contribution to the Company.
The pro forma balance sheet of the Company has been prepared as if the above
transactions occurred on March 31, 1997. The pro forma statements of operations
for the year ended December 31, 1996 and the three months ended March 31, 1997,
have been prepared as if the above transactions occurred on January 1, 1996.
The pro forma financial information is based upon available information and upon
certain assumptions, as set forth in the notes to the pro forma financial
information, that management of the Company believes are reasonable in the
circumstances.
This pro forma information does not purport to represent what the Company's
financial position or results of operations would actually have been if the
above transactions had in fact occurred on such dates or at the beginning of
such periods or the Company's financial position or results of operations for
any future date or period.
F-12
<PAGE>
<PAGE>
SNOWDANCE, INC.
PRO FORMA BALANCE SHEET
MARCH 31, 1997
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA PRO FORMA
MARCH 31, 1997 ADJUSTMENTS MARCH 31, 1997
-------------- ----------- --------------
<S> <C> <C> <C>
CURRENT ASSETS
Cash $ 49,799 $6,600,000 (b) $ 5,899,799
(750,000)(c)
Accounts receivable (less 81,935 81,935
allowance for doubtful accounts of $8,000)
Other receivables 47,075 47,075
Inventories 32,649 32,649
Prepaid expenses 58,661 58,661
---------- ----------
Total current assets 270,119 6,120,119
PROPERTY AND EQUIPMENT - Net 1,181,249 5,000,000(a) 6,181,249
DEFERRED FINANCING COSTS - Net 74,432 74,432
OTHER ASSETS 6,824 6,824
---------- ----------
TOTAL ASSETS $1,532,624 $12,382,624
========== ==========
LIABILITIES AND OWNERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 507,916 $ 507,916
Accrued expenses and other liabilities 80,321 80,321
Advance deposits 82,883 82,883
Current portion of long-term debt 217,119 (175,000)(c) 42,119
---------- ----------
Total current liabilities 888,239 713,239
---------- ----------
LONG-TERM DEBT
Line of credit 575,000 (575,000)(c) -
Loans payable 533,600 533,600
Notes to related party 1,328,014 (1,180,600)(d) 147,414
---------- ----------
Total long-term debt 2,436,614 681,014
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock $.001 par value 2,000 500 (a) 3,300
800 (b)
Additional paid in capital 1,050,000 1,180,600 (d) 13,829,300
4,999,500 (a)
6,599,200 (b)
Accumulated deficit (2,844,229) (2,844,229)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (1,729,229) 10,988,371
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT) $1,532,624 $12,382,624
========== ===========
</TABLE>
See Notes to pro forma financial statements
F-13
<PAGE>
<PAGE>
SNOWDANCE, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
HISTORICAL YEAR PRO FORMA
ENDED PRO FORMA YEAR ENDED
DECEMBER 31, 1996 ADJUSTMENTS DECEMBER 31, 1996
----------------- ----------- -----------------
<S> <C> <C> <C>
REVENUES
Lodging $ 1,695,845 $ 1,695,845
Food and beverage 970,086 970,086
Ski and fitness 1,064,720 1,064,720
Other 252,567 252,567
---------- -----------
Total revenues 3,983,218 3,983,218
COST OF SALES
Lodging 827,620 85,027 (e) 912,647
Food and beverage 848,513 848,513
Ski and fitness 950,239 950,239
Other 140,753 140,753
---------- ----------
Total cost of sales 2,767,125 2,852,152
OPERATING EXPENSES
Administrative and general 478,411 478,411
Sales and marketing 592,732 592,732
Depreciation 122,714 122,714
Heat, light and power 633,173 633,173
Insurance 145,842 145,842
Real estate and other taxes 149,610 149,610
Repairs and maintenance 370,756 370,756
---------- -----------
Total operating expenses 2,493,238 2,493,238
NET OPERATING LOSS (1,277,145) (1,362,172)
---------- -----------
OTHER INCOME (EXPENSE)
Interest Income 2,174 2,174
Gain on sale of assets 18,115 18,115
Related party interest expense (85,027) 85,027 (e)
Interest expense (158,936) 85,990 (f) (72,946)
---------- -----------
Total other expenses (223,674) (52,657)
---------- -----------
NET LOSS $(1,500,819) $(1,414,829)
=========== ===========
Loss Per Share $ (.75) $ (0.43) (g)
=========== ===========
Weighted Average Number of Shares 2,000,000 3,300,000
</TABLE>
See notes to pro forma financial statements
F-14
<PAGE>
<PAGE>
SNOWDANCE, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
HISTORICAL THREE PRO FORMA
MONTHS ENDED PRO FORMA THREE MONTHS ENDED
MARCH 31, 1997 ADJUSTMENTS MARCH 31, 1997
-------------- ----------- --------------
<S> <C> <C> <C>
REVENUES
Lodging $ 770,694 $ 770,694
Food and beverage 313,981 313,981
Ski and fitness 833,320 833,320
Other 73,289 73,289
---------- ----------
Total revenues 1,991,284 1,991,284
COST OF SALES
Lodging 243,600 17,281 (e) 260,881
Food and beverage 244,884 244,884
Ski and fitness 452,943 452,943
Other 36,114 36,114
---------- ----------
Total cost of sales 977,541 994,822
OPERATING EXPENSES
Administrative and general 133,682 133,682
Sales and marketing 157,745 157,745
Depreciation 31,383 31,383
Heat, light and power 233,636 233,636
Insurance 35,461 35,461
Real estate and other taxes 22,918 22,918
Repairs and maintenance 92,302 92,302
---------- ----------
Total operating expenses 707,127 707,127
NET OPERATING INCOME 306,616 289,335
---------- ----------
OTHER INCOME (EXPENSE)
Interest income 226 226
Related party interest expense (24,434) 17,281 (e) (7,153)
Interest expense (25,482) 20,038 (f) (5,444)
---------- ----------
Total other expenses (49,690) (12,371)
---------- ----------
INCOME BEFORE INCOME TAX EXPENSE 256,926 276,964
---------- -
INCOME TAX EXPENSE (113,047)(h) (121,864)
----------
NET INCOME $ 256,926 $ 155,100
========== ==========
Income Per Share $ .13 $ 0.05 (g)
========== ==========
Weighted Average Number of Shares 2,000,000 3,300,000
</TABLE>
See notes to pro forma financial statements.
F-15
<PAGE>
<PAGE>
SNOWDANCE, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
AND FOR THE YEAR ENDED DECEMBER 31, 1996
(a) Reflects the acquisition of the Hogback assets through the issuance of
500,000 shares of common stock, par value $.001 per share, with a fair value of
$10 per share.
(b) Reflects the closing of the Offering and the application of the net proceeds
thereof. The Offering is assumed to include the issuance of 800,000 shares of
common stock, par value $.001 per share, for $10 per share, and offering
expenses of $1,400,000, resulting in net proceeds to the Company of $6,600,000.
(c) Reflects the assumed repayment of the balance outstanding on the Company's
line of credit as of March 31, 1997, $750,000, using a portion of the net
proceeds from the Offering.
(d) Reflects the conversion of $1,180,000 of the Related Loans to additional
paid-in capital of the Company.
(e) Reflects the effect of the planned lease by the Company of the 17 Mountain's
Edge condominium units from Steven and Susan Plausteiner. For purposes of the
pro forma financial information, it is assumed that the lease expense would have
been equivalent to the interest expense paid on the Related Loans contributed to
capital, so this adjustment reclassifies the related party interest expense to
leasing expense, included in lodging cost of sales.
(f) Reflects the elimination of interest expense on the line of credit for the
applicable period. The line of credit is assumed to have been repaid as of
January 1, 1996, using a portion of the proceeds from the Offering, as described
in Note (c) above.
(g) Pro forma earnings (loss) per share is computed using 3,300,000 weighted
average common shares outstanding; historical loss per share is computed using
2,000,000 shares.
(h) Reflects the accrual of federal and state income taxes for the three months
ended March 31, 1997. Amount is computed using a total combined federal and
state tax rate of 44%.
F-16
<PAGE>
<PAGE>
================================================================================
NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF ANY OFFER TO BUY COMMON STOCK BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN
WHICH THE PERSON MAKING SUCH AN OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO,
OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
TABLE OF CONTENTS
Page
----
Available Information.........................
Prospectus Summary............................
Summary Financial Data........................
Risk Factors..................................
Use of Proceeds...............................
Dividend Policy...............................
Capitalization................................
Selected Financial Data ......................
Management's Discussion and Analysis
of Financial Condition and Results of
Operations................................
Business......................................
Management....................................
Certain Transactions..........................
Principal and Selling Stockholders............
Description of Capital Stock..................
Underwriting..................................
Legal Matters.................................
Experts.......................................
Index to Financial Statements................. F-1
Until ______________ __, 1997 (25 days after the date of this Prospectus), all
dealers effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This is in addition to the obligation of dealers to deliver a Prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
800,000 SHARES
SNOWDANCE, INC.
COMMON STOCK
--------------
PROSPECTUS
--------------
JOSEPHTHAL LYON & ROSS
, 1997
------------- ---
================================================================================
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL"), inter
alia, empowers a Delaware corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Similar indemnity is authorized for such persons against expenses (including
attorneys' fees) actually and reasonably incurred in connection with the defense
or settlement of any such threatened, pending or completed action or suit by or
in the right of the corporation if such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and provided further that (unless a court of competent
jurisdiction otherwise provides) such person shall not have been adjudged liable
to the corporation. Any such indemnification shall be made by the corporation
only as authorized in each specific case upon a determination by the
shareholders or disinterested directors or by independent legal counsel in a
written opinion that indemnification is proper in the circumstances because the
indemnitee has met the applicable standard of conduct. The Certificate of
Incorporation of the Company provides that directors and officers shall be
indemnified as described above in this paragraph to the fullest extent permitted
by the DGCL; provided, however, that any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person shall be
indemnified only if such proceeding (or part thereof) was authorized by the
board of directors of the Company.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against any liability asserted against
him and incurred by him in such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under Section 145.
The Company's Certificate of Incorporation provides that, to the fullest
extent permitted by the DGCL, no director of the Company shall be personally
liable to the
II-1
<PAGE>
<PAGE>
Company or its stockholders for monetary damages for breach of fiduciary duty as
a director. Section 102(b)(7) of the DGCL currently provides that such
provisions do not eliminate or limit the liability of a director (i) for a
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL
(relating to the declaration of dividends and purchase or redemption of shares
in violation of the DGCL), or (iv) for any transaction from which the director
derived an improper personal benefit. Reference is made to the Company's
Certificate of Incorporation and By-Laws filed as Exhibits 3.1 and 3.2 hereto,
respectively.
The Company expects to maintain directors' and officers' liability
insurance policies covering certain liabilities of persons serving as officers
and directors and providing reimbursement to the Company for its indemnification
of such persons.
Pursuant to the Underwriting Agreement to be entered into among the
Company and the Underwriters, officers and directors of the Company are
indemnified for certain liabilities, including liabilities incurred under the
Securities Act of 1933, as amended.
II-2
<PAGE>
<PAGE>
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses (other than
underwriting discounts and the non-accountable expense allowance) expected to be
incurred in connection with the Offering described in this Registration
Statement.
Securities and Exchange Commission registration fee... $ 3,387
NASD Examination Fee.................................. $ 1,618
American Stock Exchange Listing Fee................... $ 35,000
Accounting Fees and Expenses.......................... $ 125,000
Printing and Engraving Expenses....................... $ 75,000
Legal Fees and Expenses............................... $ 300,000
Blue Sky Fees and Expenses............................ $ 10,000
Transfer Agent Fees................................... $ 10,000
Miscellaneous......................................... $ 19,995
Total......................................... $ 580,000
==========
The foregoing items, except for the Securities and Exchange Commission
and NASD fees, are estimated. All expenses will be borne by the Company.
II-3
<PAGE>
<PAGE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
In the three years preceding the filing of this Registration Statement,
the Company has issued the following securities that were not registered under
the Securities Act:
(a) Immediately prior to the closing of the Offering, all of the
partnership interests in each of the Limited Partnerships will be exchanged for
2,000,000 shares of Common Stock of Snowdance, Inc. (the "Combination
Transaction"). Each of the Limited Partnerships has a corporate general partner
which has a 1% interest in the Limited Partnership of which it is general
partner. All of the issued and outstanding shares in each of the corporate
general partners are owned by Susan D. Plausteiner. All other interests in the
Limited Partnerships are owned by Steven H. Plausteiner or Susan D.
Plausteiner. As a result of the Combination Transaction, immediately prior to
the closing of this Offering, all of the outstanding shares in Snowdance, Inc.
will be owned by Steven H. Plausteiner and Susan D. Plausteiner. It is expected
that the Combination Transaction will be treated as an Internal Revenue Code
Section 351 transaction and be tax free to the Company and the Limited
Partnerships. In addition, immediately prior to the Closing of this Offering,
Steven H. Plausteiner and Susan D. Plausteiner will contribute all of the
outstanding shares of capital stock of Foods to Snowdance, Inc. as a capital
contribution and Foods will become a wholly-owned subsidiary of Snowdance, Inc.
As part of the Combination Transaction, the Company will receive an ownership
interest in 3/4 of 1 condominium unit which was previously owned by Ascutney
Mountain Resort Realty, L.P.
No underwriters were involved in the foregoing sales of
securities. Such sales were made in reliance upon an exemption from the
registration provisions of the Securities Act set forth in Section 4(2) thereof
relative to sales by an issuer not involving any public offering.
II-4
<PAGE>
<PAGE>
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
==========================================================================================================
EXHIBIT NO.
- ----------------------------------------------------------------------------------------------------------
<S> <C>
1.1 Proposed Form of Underwriting Agreement.
- ----------------------------------------------------------------------------------------------------------
1.2 Proposed Form of Qualified Independent Underwriter Agreement
- ----------------------------------------------------------------------------------------------------------
3.1 Certificate of Incorporation of the Company.
- ----------------------------------------------------------------------------------------------------------
3.2 By-Laws of the Company.
- ----------------------------------------------------------------------------------------------------------
4.1* Form of specimen certificate representing the Company's Common Stock.
- ----------------------------------------------------------------------------------------------------------
4.2 Form of Representative's Warrant Agreement including Form of Representative's Warrant.
- ----------------------------------------------------------------------------------------------------------
5.1* Opinion of Sonnenschein Nath & Rosenthal.
- ----------------------------------------------------------------------------------------------------------
10.1 Loan and Security Agreement, dated June 30, 1997, among Ascutney Mountain Resort, L.P.,
Ascutney Mountain Resort Hotel, L.P., Steven H. Plausteiner, Susan D. Plausteiner and
Mascoma Savings Bank, fsb.
- ----------------------------------------------------------------------------------------------------------
10.2 Loan Agreement, dated May 6, 1994, among Ascutney Mountain Resort, L.P., Ascutney Mountain
Resort Hotel, L.P., and the Vermont Economic Development Authority.
- ----------------------------------------------------------------------------------------------------------
10.3 Loan and Security Agreement, dated November 3, 1994, among the Town of West Windsor,
Vermont, Ascutney Mountain Resort, L.P. and Ascutney Mountain Resort Hotel, L.P.
- ----------------------------------------------------------------------------------------------------------
10.4 Draft Purchase and Sale Agreement, dated as of August _____,
1997, by and between the Company and Skyline Partners, L.P.
- ----------------------------------------------------------------------------------------------------------
10.6* Form of Condominium Lease Agreement, dated as of _____________
_____, 1997, among the Company, Steven Plausteiner and Susan Plausteiner.
- ----------------------------------------------------------------------------------------------------------
10.7* Form of Employment Agreement between the Company and Steven H. Plausteiner.
- ----------------------------------------------------------------------------------------------------------
10.8* Form of Employment Agreement between the Company and Susan D. Plausteiner.
- ----------------------------------------------------------------------------------------------------------
10.9 Form of 1997 Stock Option Plan for Non-Employee Directors.
- ----------------------------------------------------------------------------------------------------------
10.10 Form of Exchange Agreement among Ascutney Mountain Resort, L.P., Ascutney Mountain Resort
Hotel, L.P., Ascutney Mountain Resort Realty, L.P. and the Company.
- ----------------------------------------------------------------------------------------------------------
23.1 Consent of Deloitte & Touche LLP.
- ----------------------------------------------------------------------------------------------------------
23.2* Consent of Sonnenschein Nath & Rosenthal (to be included in Exhibit 5.1).
- ----------------------------------------------------------------------------------------------------------
23.3 Consent of Director Nominee.*
- ----------------------------------------------------------------------------------------------------------
24.1 Powers of Attorney (included on signature page).
==========================================================================================================
</TABLE>
- --------------------
*To be filed by amendment
II-5
<PAGE>
<PAGE>
ITEM 28. UNDERTAKINGS.
The Company hereby undertakes:
(a) That it will:
(1) File, during any period in which it offers or sells securities,
a post-effective amendment to this Registration Statement to:
(i) include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) reflect in the prospectus any facts or events which
individually or together, represent a fundamental change in the
information in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) include any additional or changed material information
on the plan of distribution.
(2) For determining liability under the Securities Act, treat such
post-effective amendment as a new registration statement of the Securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
(b) That it will provide to the Representative at the closing specified
in the Underwriting Agreement certificates in such denominations and registered
in such names as required by the Representative to permit prompt delivery to
each purchaser.
(c) Insofar as indemnification for liabilities arising under the
Securities Act, may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing, or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
liabilities under the Securities Act (other than the payment by the Company of
expenses incurred or paid by a director, officer or controlling person of the
II-6
<PAGE>
<PAGE>
Company in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
Securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
(d) That it will:
(1) For purposes of determining any liability under the Securities
Act, treat the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Company under Rules
424(b)(1), or (4) or 497(h) under the Securities Act as part of this
Registration Statement as of the time the Commission declared it
effective.
(2) For the purpose of determining any liability under the
Securities Act, treat each post-effective amendment that contains a form
of prospectus as a new registration statement for the securities offered
in the registration statement, and that offering of the securities at
the time as the initial bona fide offering of those Securities.
II-7
<PAGE>
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form SB-2 and has authorized this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Placid, State of New York, on this 11th
day of August, 1997.
SNOWDANCE, INC.
By: /s/ STEVEN H. PLAUSTEINER
-------------------------
Steven H. Plausteiner
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Steven H. Plausteiner and Susan D. Plausteiner,
or any one of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place, and
stead, in any and all capacities, to sign (i) any and all pre- or post-effective
amendments to this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith and (ii) any
registration statement, and any and all amendments thereto, relating to the
offering covered hereby filed pursuant to Rule 462(b) under the Securities Act
of 1933, as amended, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitutes, may
lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
Signature Title Date
--------- ----- ----
/s/ STEVEN H. PLAUSTEINER Chief Executive Officer August 11, 1997
- ------------------------------- and Director (Principal
Steven H. Plausteiner Executive Officer)
II-8
<PAGE>
<PAGE>
/s/ SUSAN D. PLAUSTEINER Chief Financial Officer August 11, 1997
- ------------------------------- and Director (Principal
Susan D. Plausteiner Financial and Account-
ing Officer)
/s/ DUSAN PLAUSTEINER Chief Operating Officer August 11, 1997
- ------------------------------- and Director
Dusan Plausteiner
II-9
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
===================================================================================================================================
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1.1 Proposed Form of Underwriting Agreement.
- -----------------------------------------------------------------------------------------------------------------------------------
1.2 Proposed Form of Qualified Independent Underwriter Agreement
- -----------------------------------------------------------------------------------------------------------------------------------
3.1 Certificate of Incorporation of the Company.
- -----------------------------------------------------------------------------------------------------------------------------------
3.2 By-Laws of the Company.
- -----------------------------------------------------------------------------------------------------------------------------------
4.1* Form of specimen certificate representing the Company's Common Stock.
- -----------------------------------------------------------------------------------------------------------------------------------
4.2 Form of Representative's Warrant Agreement including Form of Representative's Warrant.
- -----------------------------------------------------------------------------------------------------------------------------------
5.1* Opinion of Sonnenschein Nath & Rosenthal.
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10.1 Loan and Security Agreement, dated June 30, 1997, among Ascutney Mountain Resort, L.P.,
Ascutney Mountain Resort Hotel, L.P., Steven H. Plausteiner, Susan D. Plausteiner and
Mascoma Savings Bank, fsb.
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10.2 Loan Agreement, dated May 6, 1994, among Ascutney Mountain Resort, L.P., Ascutney Mountain Resort Hotel, L.P.,
and the Vermont Economic Development Authority.
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10.3 Loan and Security Agreement, dated November 3, 1994, among the Town of West Windsor,
Vermont, Ascutney Mountain Resort, L.P. and Ascutney Mountain Resort Hotel, L.P.
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10.4 Draft Purchase and Sale Agreement, dated as of August _____,
1997, by and between the Company and Skyline Partners, L.P.
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10.6* Form of Condominium Lease Agreement, dated as of _____________
_____, 1997, among the Company, Steven Plausteiner and Susan Plausteiner.
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10.7* Form of Employment Agreement between the Company and Steven H. Plausteiner.
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10.8* Form of Employment Agreement between the Company and Susan D. Plausteiner.
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10.9 Form of 1997 Stock Option Plan for Non-Employee Directors.
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10.10 Form of Exchange Agreement among Ascutney Mountain Resort, L.P., Ascutney Mountain Resort
Hotel, L.P., Ascutney Mountain Resort Realty, L.P. and the Company.
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23.1 Consent of Deloitte & Touche LLP.
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23.2* Consent of Sonnenschein Nath & Rosenthal (to be included in Exhibit 5.1).
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23.3* Consent of Director Nominee.
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24.1 Powers of Attorney (included on signature page).
===================================================================================================================================
</TABLE>
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*To be filed by amendment
STATEMENT OF DIFFERENCES
------------------------
The cent symbol shall be expressed as ................................ [c]
The degree symbol shall be expressed as .............................. [d]
The section symbol shall be expressed as ............................. 'SS'
The trademark symbol shall be expressed as ........................... 'tm'
<PAGE>
<PAGE>
[Form of Underwriting Agreement - Subject to Additional Review]
800,000 SHARES OF COMMON STOCK
SNOWDANCE, INC.
UNDERWRITING AGREEMENT
----------------------
New York, New York
, 1997
JOSEPHTHAL LYON & ROSS INCORPORATED
As Representative of the
Several Underwriters listed on Schedule A hereto
c/o Josephthal Lyon & Ross Incorporated
200 Park Avenue
24th Floor
New York, New York 10166
Ladies and Gentlemen:
Snowdance, Inc., a Delaware corporation (the "Company")
confirms its agreement with Josephthal Lyon & Ross Incorporated ("Josephthal")
and each of the underwriters named in Schedule A hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 11), for whom Josephthal is acting as
representative (in such capacity, Josephthal shall hereinafter be referred to as
"you" or the "Representative"), with respect to the sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of the Company's common stock, [$_____] par value
per share ("Common Stock") set forth in Schedule A hereto. Such shares of Common
Stock are hereinafter referred to as the "Firm Shares."
Upon your request, as provided in Section 2(b) of this
Agreement, the Company shall also sell to the Underwriters, acting severally and
not jointly, up to an additional 120,000 shares of Common Stock for the purpose
of covering over-allotments, if any (the "Option Shares"). The Firm Shares and
the Option Shares are sometimes hereinafter referred to as the "Shares." The
Company also proposes to issue and sell to you warrants (the "Representative's
<PAGE>
<PAGE>
Warrants") pursuant to the Representative's Warrant Agreement (the
"Representative's Warrant Agreement") for the purchase of an additional 80,000
shares of Common Stock. The shares of Common Stock issuable upon exercise of the
Representative's Warrants are hereinafter referred to as the "Representative's
Shares." The Firm Shares, the Option Shares, the Representative's Warrants and
the Representative's Shares (collectively, hereinafter referred to as the
"Securities") are more fully described in the Registration Statement and the
Prospectus referred to below.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters as of the
date hereof, and as of the Closing Date (hereinafter defined) and the Option
Closing Date (hereinafter defined), if any, as follows:
(a) The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") a registration statement,
and an amendment or amendments thereto, on Form SB-2 (No. 333-_____), including
any related preliminary prospectus ("Preliminary Prospectus"), for the
registration of the Firm Shares and the Option Shares under the Securities Act
of 1933, as amended (the "Act"), which registration statement and amendment or
amendments have been prepared by the Company in conformity with the requirements
of the Act, and the rules and regulations (the "Regulations") of the Commission
under the Act. The Company will promptly file a further amendment to said
registration statement in the form heretofore delivered to the Underwriters and
will not file any other amendment thereto to which the Underwriters shall have
objected in writing after having been furnished with a copy thereof. Except as
the context may otherwise require, such registration statement, as amended, on
file with the Commission at the time the registration statement becomes
effective (including the prospectus, financial statements, schedules, exhibits
and all other documents filed as a part thereof or incorporated therein
(including, but not limited to those documents or information incorporated by
reference therein) and all information deemed to be a part thereof as of such
time pursuant to paragraph (b) of Rule 430(A) of the Regulations)), is
hereinafter called the "Registration Statement", and the form of prospectus in
the form first filed with the Commission pursuant to Rule 424(b) of the
Regulations, is hereinafter called the "Prospectus." For purposes hereof, "Rules
and Regulations" mean the rules and regulations adopted by the Commission under
either the Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as applicable.
(b) Neither the Commission nor any state regulatory
authority has issued any order preventing or suspending the use of any
Preliminary Prospectus, the Registration Statement or the Prospectus or any part
of any thereof and no proceedings for a stop order suspending the effectiveness
of the Registration Statement or any of the Company's securities have been
instituted or are pending or to the Company's knowledge, threatened. Each of the
Preliminary Prospectus, Registration Statement and Prospectus at the time of
filing thereof conformed with the requirements of the Act and the Rules and
Regulations, and none of the Preliminary Prospectus, Registration Statement or
Prospectus at the time of filing thereof contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
and necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that this representation and
warranty does
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<PAGE>
not apply to statements made in reliance upon and in conformity with written
information furnished to the Company with respect to the Underwriters by or on
behalf of the Underwriters expressly for use in such Preliminary Prospectus,
Registration Statement or Prospectus.
(c) When the Registration Statement becomes
effective and at all times subsequent thereto up to the Closing Date and each
Option Closing Date, if any, and during such longer period as the Prospectus may
be required to be delivered in connection with sales by the Underwriters or a
dealer, the Registration Statement and the Prospectus will contain all
statements which are required to be stated therein in accordance with the Act
and the Rules and Regulations, and will conform to the requirements of the Act
and the Rules and Regulations; neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, will contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, provided, however,
that this representation and warranty does not apply to statements made or
statements omitted in reliance upon and in conformity with information furnished
to the Company in writing by or on behalf of any Underwriter expressly for use
in the Preliminary Prospectus, Registration Statement or Prospectus or any
amendment thereof or supplement thereto.
(d) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the state
of its incorporation. Except as described in the Prospectus, the Company does
not own an interest in any corporation, partnership, trust, joint venture or
other business entity. The Company is duly qualified and licensed and in good
standing as a foreign corporation in each jurisdiction in which its ownership or
leasing of any properties or the character of its operations requires such
qualification or licensing. The Company has all requisite corporate power and
authority, and the Company has obtained any and all necessary authorizations,
approvals, orders, licenses, certificates, franchises and permits of and from
all governmental or regulatory officials and bodies (including, without
limitation, those having jurisdiction over environmental or similar matters), to
own or lease its properties and conduct its business as described in the
Prospectus; the Company is and has been doing business in compliance with all
such authorizations, approvals, orders, licenses, certificates, franchises and
permits and all federal, state and local laws, rules and regulations; and the
Company has not received any notice of proceedings relating to the revocation or
modification of any such authorization, approval, order, license, certificate,
franchise, or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and adversely affect
the condition, financial or otherwise, or the earnings, position, prospects,
value, operation, properties, business or results of operations of the Company.
The disclosures in the Registration Statement concerning the effects of federal,
state and local laws, rules and regulations on the Company's business as
currently conducted and as contemplated are correct in all material respects and
do not omit to state a material fact necessary to make the statements contained
therein not misleading in light of the circumstances in which they were made.
(e) The Company has a duly authorized, issued and
outstanding capitalization as set forth in the Prospectus, under
"Capitalization" and "Description of Capital Stock" and will have the adjusted
capitalization set forth therein on the Closing Date and the
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<PAGE>
Option Closing Date, if any, based upon the assumptions set forth therein, and
the Company is not a party to or bound by any instrument, agreement or other
arrangement providing for it to issue any capital stock, rights, warrants,
options or other securities, except for this Agreement, the Representative's
Warrant Agreement and as described in the Prospectus. The Securities and all
other securities issued or issuable by the Company conform or, when issued and
paid for, will conform, in all respects to all statements with respect thereto
contained in the Registration Statement and the Prospectus. All issued and
outstanding securities of the Company have been duly authorized and validly
issued and are fully paid and non-assessable and the holders thereof have no
rights of rescission with respect thereto, and are not subject to personal
liability by reason of being such holders; and none of such securities were
issued in violation of the preemptive rights of any holders of any security of
the Company or similar contractual rights granted by the Company. The Securities
are not and will not be subject to any preemptive or other similar rights of any
stockholder, have been duly authorized and, when issued, paid for and delivered
in accordance with the terms hereof, will be validly issued, fully paid and
non-assessable and will conform to the description thereof contained in the
Prospectus; the holders thereof will not be subject to any liability solely as
such holders; all corporate action required to be taken for the authorization,
issue and sale of the Securities has been duly and validly taken; and the
certificates representing the Securities will be in due and proper form. Upon
the issuance and delivery pursuant to the terms hereof of the Securities to be
sold by the Company hereunder, the Underwriters or the Representative, as the
case may be, will acquire good and marketable title to such Securities free and
clear of any lien, charge, claim, encumbrance, pledge, security interest, defect
or other restriction or equity of any kind whatsoever.
(f) The financial statements, including the related
notes and schedules thereto, included in the Registration Statement, each
Preliminary Prospectus and the Prospectus fairly present the financial position,
income, changes in cash flow, changes in stockholders' equity, and the results
of operations of the Company at the respective dates and for the respective
periods to which they apply and the pro forma financial information included in
the Registration Statement and Prospectus presents fairly on a basis consistent
with that of the audited financial statements included therein, what the
Company's pro forma capitalization would have been for the respective periods
and as of the respective dates to which they apply after giving effect to the
adjustments described therein. Such financial statements have been prepared in
conformity with generally accepted accounting principles and the Rules and
Regulations, consistently applied throughout the periods involved. There has
been no adverse change or development involving a material prospective change in
the condition, financial or otherwise, or in the earnings, position, prospects,
value, operation, properties, business, or results of operations of the Company
whether or not arising in the ordinary course of business, since the date of the
financial statements included in the Registration Statement and the Prospectus
and the outstanding debt, the property, both tangible and intangible, and the
business of the Company conform in all material respects to the descriptions
thereof contained in the Registration Statement and the Prospectus. Financial
information set forth in the Prospectus under the headings "Summary Financial
Data," "Selected Financial Data," "Capitalization," and "Management's Discussion
and Analysis of Financial Condition and Results of Operations," fairly present,
on the basis stated in the Prospectus, the information set forth therein, have
been derived from or compiled on a basis consistent with that of the audited
financial statements included in the Prospectus.
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<PAGE>
<PAGE>
(g) The Company (i) has paid all federal, state,
local, and foreign taxes for which it is liable, including, but not limited to,
withholding taxes and amounts payable under Chapters 21 through 24 of the
Internal Revenue Code of 1986 (the "Code"), and has furnished all information
returns it is required to furnish pursuant to the Code, (ii) has established
adequate reserves for such taxes which are not due and payable, and (iii) does
not have any tax deficiency or claims outstanding, proposed or assessed against
it.
(h) No transfer tax, stamp duty or other similar tax
is payable by or on behalf of the Underwriters in connection with (i) the
issuance by the Company of the Securities, (ii) the purchase by the Underwriters
of the Securities from the Company and the purchase by the Representative of the
Representative's Warrants from the Company, (iii) the consummation by the
Company of any of its obligations under this Agreement or the Representative's
Warrant Agreement, or (iv) resales of the Shares in connection with the
distribution contemplated hereby.
(i) The Company maintains insurance policies,
including, but not limited to, general liability and property insurance, which
insures the Company and its employees, against such losses and risks generally
insured against by comparable businesses. The Company (A) has not failed to give
notice or present any insurance claim with respect to any matter, including but
not limited to the Company's business, property or employees, under the
insurance policy or surety bond in a due and timely manner, (B) does not have
any disputes or claims against any underwriter of such insurance policies or
surety bonds or has not failed to pay any premiums due and payable thereunder,
or (C) has not failed to comply with all conditions contained in such insurance
policies and surety bonds. There are no facts or circumstances under any such
insurance policy or surety bond which would relieve any insurer of its
obligation to satisfy in full any valid claim of the Company.
(j) There is no action, suit, proceeding, inquiry,
arbitration, investigation, litigation or governmental proceeding (including,
without limitation, those having jurisdiction over environmental or similar
matters), domestic or foreign, pending or threatened against (or circumstances
that may give rise to the same), or involving the properties or business of, the
Company which (i) questions the validity of the capital stock of the Company,
this Agreement or the Representative's Warrant Agreement or of any action taken
or to be taken by the Company pursuant to or in connection with this Agreement
or the Representative's Warrant Agreement, (ii) is required to be disclosed in
the Registration Statement which is not so disclosed (and such proceedings as
are summarized in the Registration Statement are accurately summarized in all
material respects), or (iii) might materially and adversely affect the
condition, financial or otherwise, or the earnings, position, prospects,
stockholders' equity, value, operation, properties, business or results of
operations of the Company.
(k) The Company has full legal right, power and
authority to authorize, issue, deliver and sell the Securities, enter into this
Agreement and the Representative's Warrant Agreement and to consummate the
transactions provided for in such agreements; and this Agreement and the
Representative's Warrant Agreement have each been duly and properly authorized,
executed and delivered by the Company. Each of this Agreement and the
Representative's Warrant Agreement constitutes a legal, valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, except (i) as such
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<PAGE>
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws affecting
creditors' rights generally, (ii) as enforceability of any indemnification or
contribution provisions may be limited under applicable laws or the public
policies underlying such laws and (iii) that the remedies of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceedings may be brought. None of the Company's issue and sale of the
Securities, execution or delivery of this Agreement or the Representative's
Warrant Agreement, its performance hereunder and thereunder, its consummation of
the transactions contemplated herein and therein, or the conduct of its business
as described in the Registration Statement, the Prospectus, and any amendments
or supplements thereto, conflicts with or will conflict with or results or will
result in any breach or violation of any of the terms or provisions of, or
constitutes or will constitute a default under, or result in the creation or
imposition of any lien, charge, claim, encumbrance, pledge, security interest,
defect or other restriction or equity of any kind whatsoever upon, any property
or assets (tangible or intangible) of the Company pursuant to the terms of, (i)
the certificate of incorporation or by-laws of the Company, (ii) any license,
contract, indenture, mortgage, deed of trust, voting trust agreement,
stockholders agreement, note, loan or credit agreement or any other agreement or
instrument to which the Company is a party or by which it is or may be bound or
to which any of its properties or assets (tangible or intangible) is or may be
subject, or any indebtedness, or (iii) any statute, judgment, decree, order,
rule or regulation applicable to the Company of any arbitrator, court,
regulatory body or administrative agency or other governmental agency or body
(including, without limitation, those having jurisdiction over environmental or
similar matters), domestic or foreign, having jurisdiction over the Company or
any of its activities or properties.
(l) Except as described in the Prospectus, no
consent, approval, authorization or order of, and no filing with, any court,
regulatory body, government agency or other body, domestic or foreign, is
required for the issuance of the Shares pursuant to the Prospectus and the
Registration Statement, the issuance of the Representative's Warrants, the
performance of this Agreement and the Representative's Warrant Agreement and the
transactions contemplated hereby and thereby, including without limitation, any
waiver of any preemptive, first refusal or other rights that any entity or
person may have for the issue and/or sale of any of the Shares, or the
Representative's Warrants, except such as have been or may be obtained under the
Act or may be required under state securities or Blue Sky laws in connection
with the Underwriters' purchase and distribution of the Shares, and the
Representative's Warrants to be sold by the Company hereunder.
(m) All executed agreements, contracts or other
documents or copies of executed agreements, contracts or other documents filed
as exhibits to the Registration Statement to which the Company is a party or by
which it may be bound or to which any of its assets, properties or business may
be subject have been duly and validly authorized, executed and delivered by the
Company, and constitute the legal, valid and binding agreements of the Company,
enforceable against the Company, in accordance with their respective terms. The
descriptions in the Registration Statement of agreements, contracts and other
documents are accurate in all material respects and fairly present the
information required to be shown with respect thereto by Form SB-2, and there
are no contracts or other documents which are required by the Act to be
described in the Registration Statement or filed as exhibits to the Registration
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<PAGE>
Statement which are not described or filed as required, and the exhibits which
have been filed are in all material respects complete and correct copies of the
documents of which they purport to be copies.
(n) Subsequent to the respective dates as of which
information is set forth in the Registration Statement and Prospectus, and
except as may otherwise be indicated or contemplated herein or therein, the
Company has not (i) issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money, (ii) entered into any
transaction other than in the ordinary course of business, or (iii) declared or
paid any dividend or made any other distribution on or in respect of its capital
stock of any class, and there has not been any change in the capital stock, or
any material change in the debt (long or short term) or liabilities or material
adverse change in or affecting the general affairs, management, financial
operations, stockholders' equity or results of operations of the Company.
(o) No default exists in the due performance and
observance of any term, covenant or condition of any license, contract,
indenture, mortgage, installment sale agreement, lease, deed of trust, voting
trust agreement, stockholders agreement, partnership agreement, note, loan or
credit agreement, purchase order, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other material agreement or
instrument to which the Company is a party or by which the Company may be bound
or to which the property or assets (tangible or intangible) of the Company is
subject or affected.
(p) The Company has generally enjoyed a satisfactory
employer-employee relationship with its employees and is in compliance with all
federal, state, local, and foreign laws and regulations respecting employment
and employment practices, terms and conditions of employment and wages and
hours. There are no pending investigations involving the Company by the U.S.
Department of Labor, or any other governmental agency responsible for the
enforcement of such federal, state, local, or foreign laws and regulations.
There is no unfair labor practice charge or complaint against the Company
pending before the National Labor Relations Board or any strike, picketing,
boycott, dispute, slowdown or stoppage pending or threatened against or
involving the Company or any predecessor entity, and none has ever occurred. No
representation question exists respecting the employees of the Company, and no
collective bargaining agreement or modification thereof is currently being
negotiated by the Company. No grievance or arbitration proceeding is pending
under any expired or existing collective bargaining agreements of the Company.
No labor dispute with the employees of the Company exists, or is imminent.
(q) Except as described in the Prospectus, the
Company does not maintain, sponsor or contribute to any program or arrangement
that is an "employee pension benefit plan," an "employee welfare benefit plan,"
or a "multiemployer plan" as such terms are defined in Sections 3(2), 3(1) and
3(37), respectively, of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") ("ERISA Plans"). The Company does not maintain or contribute,
now or at any time previously, to a defined benefit plan, as defined in Section
3(35) of ERISA. No ERISA Plan (or any trust created thereunder) has engaged in a
"prohibited transaction" within the meaning of Section 406 of ERISA or Section
4975 of the Code, which could subject the Company to any tax penalty on
prohibited transactions and which has not
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<PAGE>
adequately been corrected. Each ERISA Plan is in compliance with all reporting,
disclosure and other requirements of the Code and ERISA as they relate to any
such ERISA Plan. Determination letters have been received from the Internal
Revenue Service with respect to each ERISA Plan which is intended to comply with
Code Section 401(a), stating that such ERISA Plan and the attendant trust are
qualified thereunder. The Company has never completely or partially withdrawn
from a "multiemployer plan."
(r) Neither the Company nor any of its employees,
directors, stockholders, partners, or affiliates (within the meaning of the
Rules and Regulations) of any of the foregoing has taken or will take, directly
or indirectly, any action designed to or which has constituted or which might be
expected to cause or result in, under the Exchange Act, or otherwise,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or otherwise.
(s) Except as otherwise disclosed in the Prospectus,
none of the patents, patent applications, trademarks, service marks, trade names
and copyrights, and licenses and rights to the foregoing presently owned or held
by the Company are in dispute so far as known by the Company or are in any
conflict with the right of any other person or entity. The Company (i) owns or
has the right to use, free and clear of all liens, charges, claims,
encumbrances, pledges, security interests, defects or other restrictions or
equities of any kind whatsoever, all patents, trademarks, service marks, trade
names and copyrights, technology and licenses and rights with respect to the
foregoing, used in the conduct of its business as now conducted or proposed to
be conducted without infringing upon or otherwise acting adversely to the right
or claimed right of any person, corporation or other entity under or with
respect to any of the foregoing and (ii) is not obligated or under any liability
whatsoever to make any payment by way of royalties, fees or otherwise to any
owner or licensee of, or other claimant to, any patent, trademark, service mark,
trade name, copyright, know-how, technology or other intangible asset, with
respect to the use thereof or in connection with the conduct of its business or
otherwise.
(t) The Company has good and marketable title to, or
valid and enforceable leasehold estates in, all items of real and personal
property stated in the Prospectus, to be owned or leased by it free and clear of
all liens, charges, claims, encumbrances, pledges, security interests, defects,
or other restrictions or equities of any kind whatsoever, other than those
referred to in the Prospectus and liens for taxes not yet due and payable.
(u) Deloitte & Touche LLP ("D&T") whose report is
filed with the Commission as a part of the Registration Statement, are
independent certified public accountants as required by the Act and the Rules
and Regulations.
(v) The Company has caused to be duly executed
legally binding and enforceable agreements pursuant to which all of the holders
of the Common Stock and holders of securities exchangeable or exercisable for or
convertible into shares of Common Stock have agreed not to, directly or
indirectly, offer to sell, sell, grant any option for the sale of, assign,
transfer, pledge, hypothecate, distribute or otherwise encumber or dispose of
any shares of Common Stock or securities convertible into, exercisable or
exchangeable for or evidencing any
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<PAGE>
right to purchase or subscribe for any shares of Common Stock (either pursuant
to Rule 144 of the Rules and Regulations or otherwise) or dispose of any
beneficial interest therein for a period of not less than 13 months following
the effective date of the Registration Statement without the prior written
consent of the Representative. The Company will cause the Transfer Agent, as
defined below, to mark an appropriate legend on the face of stock certificates
representing all of such securities and to place "stop transfer" orders on the
Company's stock ledgers.
(w) Except as described in the Prospectus under
"Underwriting," there are no claims, payments, issuances, arrangements or
understandings, whether oral or written, for services in the nature of a
finder's or origination fee with respect to the sale of the Securities hereunder
or any other arrangements, agreements, understandings, payments or issuance with
respect to the Company or any of its officers, directors, stockholders,
partners, employees or affiliates that may affect the Underwriters'
compensation, as determined by the National Association of Securities Dealers,
Inc. ("NASD").
(x) The Common Stock has been approved for quotation
on the American Stock Exchange ("Amex").
(y) Neither the Company nor any of its officers,
employees, agents, or any other person acting on behalf of the Company, has,
directly or indirectly, given or agreed to give any money, gift or similar
benefit (other than legal price concessions to customers in the ordinary course
of business) to any customer, supplier, employee or agent of a customer or
supplier, or official or employee of any governmental agency (domestic or
foreign) or instrumentality of any government (domestic or foreign) or any
political party or candidate for office (domestic or foreign) or other person
who was, is, or may be in a position to help or hinder the business of the
Company (or assist the Company in connection with any actual or proposed
transaction) which (a) might subject the Company, or any other such person to
any damage or penalty in any civil, criminal or governmental litigation or
proceeding (domestic or foreign), (b) if not given in the past, might have had a
materially adverse effect on the assets, business or operations of the Company,
or (c) if not continued in the future, might adversely affect the assets,
business, operations or prospects of the Company. The Company's internal
accounting controls are sufficient to cause the Company to comply with the
Foreign Corrupt Practices Act of 1977, as amended.
(z) Except as set forth in the Prospectus, no
officer, director or stockholder of the Company, or any "affiliate" or
"associate" (as these terms are defined in Rule 405 promulgated under the Rules
and Regulations) of any of the foregoing persons or entities has or has had,
either directly or indirectly, (i) an interest in any person or entity which (A)
furnishes or sells services or products which are furnished or sold or are
proposed to be furnished or sold by the Company, or (B) purchases from or sells
or furnishes to the Company any goods or services, or (ii) a beneficial interest
in any contract or agreement to which the Company is a party or by which it may
be bound or affected. Except as set forth in the Prospectus under "Certain
Transactions," there are no existing agreements, arrangements, understandings or
transactions, or proposed agreements, arrangements, understandings or
transactions, between or among the Company and any officer, director, or
Principal Stockholder (as such term is defined
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<PAGE>
in the Prospectus) of the Company or any partner, affiliate or associate of any
of the foregoing persons or entities.
(bb) Any certificate signed by any officer of the
Company, and delivered to the Underwriters or to Underwriters' Counsel (as
defined herein) shall be deemed a representation and warranty by the Company to
the Underwriters as to the matters covered thereby.
(cc) The minute books of the Company have been made
available to the Underwriters and contain a complete summary of all meetings
and actions of the directors, stockholders, audit committee, compensation
committee and any other committee of the Board of Directors of the Company,
respectively, since the time of its incorporation, and reflects all transactions
referred to in such minutes accurately in all material respects.
(dd) Except and to the extent described in the
Prospectus, no holders of any securities of the Company or of any options,
warrants or other convertible or exchangeable securities of the Company have the
right to include any securities issued by the Company in the Registration
Statement or any registration statement to be filed by the Company or to require
the Company to file a registration statement under the Act and no person or
entity holds any anti-dilution rights with respect to any securities of the
Company.
(ee) The Company has as of the effective date of the
Registration Statement (i) entered into an employment agreement with each of
[Steven H. Plausteiner and Susan D. Plausteiner], in the form filed as Exhibits
___ and ____, respectively, to the Registration Statement and (ii)
purchased term key-man insurance on the life of [Steven H. Plausteiner and Susan
D. Plausteiner] in the amount of $1,000,000 each, which policies name the
Company as the sole beneficiary thereof.
2. Purchase, Sale and Delivery of the Securities and
Representative's Warrants.
(a) On the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to each Underwriter, and
each Underwriter, severally and not jointly, agrees to purchase from the Company
at a price of $_______ [93% of the initial public offering price] per share of
Common Stock, that number of Firm Shares of set forth in Schedule A opposite the
name of such Underwriter, plus any additional number of Firm Shares which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 11 hereof.
(b) In addition, on the basis of the
representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company hereby grants
an option to the Underwriters, severally and not jointly, to purchase all or any
part of an additional 120,000 shares of Common Stock at a price of $____ [93% of
the initial public offering price] per share of Common Stock. The option granted
hereby will expire 45 days after (i) the date the Registration Statement becomes
effective, if the
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Company has elected not to rely on Rule 430A under the Rules and Regulations, or
(ii) the date of this Agreement if the Company has elected to rely upon Rule
430A under the Rules and Regulations, and may be exercised in whole or in part
from time to time only for the purpose of covering over-allotments which may be
made in connection with the offering and distribution of the Firm Shares upon
notice by the Representative to the Company setting forth the number of Option
Shares as to which the several Underwriters are then exercising the option and
the time and date of payment and delivery for any such Option Shares. Any such
time and date of delivery (an "Option Closing Date") shall be determined by the
Representative, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Date, as
hereinafter defined, unless otherwise agreed upon by the Representative and the
Company. Nothing herein contained shall obligate the Underwriters to make any
over-allotments. No Option Shares shall be delivered unless the Firm Shares
shall be simultaneously delivered or shall theretofore have been delivered as
herein provided.
(c) Payment of the purchase price for, and delivery
of certificates for, the Firm Shares shall be made at the offices of Josephthal
Lyon & Ross Incorporated at 200 Park Avenue, 24th Floor, New York, New York
10166, or at such other place as shall be agreed upon by the Representative and
the Company. Such delivery and payment shall be made at 10:00 a.m. (New York
City time) on _____, 1997 or at such other time and date as shall be agreed upon
by the Representative and the Company, but not less than three (3) nor more than
seven (7) full business days after the effective date of the Registration
Statement (such time and date of payment and delivery being herein called
"Closing Date"). In addition, in the event that any or all of the Option Shares
are purchased by the Underwriters, payment of the purchase price for, and
delivery of certificates for, such Option Shares shall be made at the above
mentioned office of the Representative or at such other place as shall be agreed
upon by the Representative and the Company on each Option Closing Date as
specified in the notice from the Representative to the Company. Delivery of the
certificates for the Firm Shares and the Option Shares, if any, shall be made to
the Underwriters against payment by the Underwriters, severally and not jointly,
of the purchase price for the Firm Shares and the Option Shares, if any, to the
order of the Company for the Firm Shares and the Option Shares, if any, by New
York Clearing House funds. In the event such option is exercised, each of the
Underwriters, acting severally and not jointly, shall purchase that proportion
of the total number of Option Shares then being purchased which the number of
Firm Shares set forth in Schedule A hereto opposite the name of such Underwriter
bears to the total number of Firm Shares, subject in each case to such
adjustments as the Representative in their discretion shall make to eliminate
any sales or purchases of fractional shares. Certificates for the Firm Shares
and the Option Shares, if any, shall be in definitive, fully registered form,
shall bear no restrictive legends and shall be in such denominations and
registered in such names as the Underwriters may request in writing at least two
(2) business days prior to the Closing Date or the relevant Option Closing Date,
as the case may be. The certificates for the Firm Shares and the Option Shares,
if any, shall be made available to the Representative at such office or such
other place as the Representative may designate for inspection, checking and
packaging no later than 9:30 a.m. on the last business day prior to Closing Date
or the relevant Option Closing Date, as the case may be.
(d) On the Closing Date, the Company shall issue and
sell to the Representative Representative's Warrants at a purchase price of
$.0001 per warrant, which
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warrants shall entitle the holders thereof to purchase an aggregate of 80,000
shares of Common Stock. The Representative's Warrants shall be exercisable for a
period of four years commencing one year from the effective date of the
Registration Statement at a price equaling one hundred twenty percent (120%) of
the initial public offering price of the shares of Common Stock. The
Representative's Warrant Agreement and form of Warrant Certificate shall be
substantially in the form filed as Exhibit 4.3 to the Registration Statement.
Payment for the Representative's Warrants shall be made on the Closing Date.
3. Public Offering of the Shares. As soon after the
Registration Statement becomes effective as the Representative deems advisable,
the Underwriters shall make a public offering of the Shares (other than to
residents of or in any jurisdiction in which qualification of the Shares is
required and has not become effective) at the price and upon the other terms set
forth in the Prospectus. The Representative may from time to time increase or
decrease the public offering price after distribution of the Shares has been
completed to such extent as the Representative, in their discretion deems
advisable. The Underwriters may enter into one of more agreements as the
Underwriters, in each of their sole discretion, deem advisable with one or more
broker-dealers who shall act as dealers in connection with such public offering.
4. Covenants and Agreements of the Company. The Company
covenants and agrees with each of the Underwriters as follows:
(a) The Company shall use its best efforts to cause
the Registration Statement and any amendments thereto to become effective as
promptly as practicable and will not at any time, whether before or after the
effective date of the Registration Statement, file any amendment to the
Registration Statement or supplement to the Prospectus or file any document
under the Act or Exchange Act before termination of the offering of the Shares
by the Underwriters of which the Representative shall not previously have been
advised and furnished with a copy, or to which the Representative shall have
objected or which is not in compliance with the Act, the Exchange Act or the
Rules and Regulations.
(b) As soon as the Company is advised or obtains
knowledge thereof, the Company will advise the Representative and confirm the
notice in writing, (i) when the Registration Statement, as amended, becomes
effective, if the provisions of Rule 430A promulgated under the Act will be
relied upon, when the Prospectus has been filed in accordance with said Rule
430A and when any post-effective amendment to the Registration Statement becomes
effective, (ii) of the issuance by the Commission of any stop order or of the
initiation, or the threatening, of any proceeding, suspending the effectiveness
of the Registration Statement or any order preventing or suspending the use of
the Preliminary Prospectus or the Prospectus, or any amendment or supplement
thereto, or the institution of proceedings for that purpose, (iii) of the
issuance by the Commission or by any state securities commission of any
proceedings for the suspension of the qualification of any of the Securities for
offering or sale in any jurisdiction or of the initiation, or the threatening,
of any proceeding for that purpose, (iv) of the receipt of any comments from the
Commission; and (v) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information. If the Commission or any state securities commission
authority shall
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enter a stop order or suspend such qualification at any time, the Company will
make every effort to obtain promptly the lifting of such order.
(c) The Company shall file the Prospectus (in form
and substance satisfactory to the Representative) or transmit the Prospectus by
a means reasonably calculated to result in filing with the Commission pursuant
to Rule 424(b)(1) (or, if applicable and if consented to by the Representative,
pursuant to Rule 424(b)(4)) not later than the Commission's close of business on
the earlier of (i) the second business day following the execution and delivery
of this Agreement and (ii) the fifteenth business day after the effective date
of the Registration Statement.
(d) The Company will give the Representative notice
of its intention to file or prepare any amendment to the Registration Statement
(including any post-effective amendment) or any amendment or supplement to the
Prospectus (including any revised prospectus which the Company proposes for use
by the Underwriters in connection with the offering of the Securities which
differs from the corresponding prospectus on file at the Commission at the time
the Registration Statement becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the Rules and
Regulations), and will furnish the Representative with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such prospectus to
which the Representative or Orrick, Herrington & Sutcliffe LLP ("Underwriters'
Counsel"), shall object.
(e) The Company shall endeavor in good faith, in
cooperation with the Representative, at or prior to the time the Registration
Statement becomes effective, to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as the Representative may
designate to permit the continuance of sales and dealings therein for as long as
may be necessary to complete the distribution, and shall make such applications,
file such documents and furnish such information as may be required for such
purpose; provided, however, the Company shall not be required to qualify as a
foreign corporation or file a general or limited consent to service of process
in any such jurisdiction. In each jurisdiction where such qualification shall be
effected, the Company will, unless the Representative agrees that such action is
not at the time necessary or advisable, use all reasonable efforts to file and
make such statements or reports at such times as are or may reasonably be
required by the laws of such jurisdiction to continue such qualification.
(f) During the time when a prospectus is required to
be delivered under the Act, the Company shall use all reasonable efforts to
comply with all requirements imposed upon it by the Act and the Exchange Act, as
now and hereafter amended and by the Rules and Regulations, as from time to time
in force, so far as necessary to permit the continuance of sales of or dealings
in the Securities in accordance with the provisions hereof and the Prospectus,
or any amendments or supplements thereto. If at any time when a prospectus
relating to the Securities or the Representative's Shares is required to be
delivered under the Act, any event shall have occurred as a result of which, in
the opinion of counsel for the Company or Underwriters' Counsel, the Prospectus,
as then amended or supplemented, includes an untrue statement of a material fact
or omits to state any material fact required to be stated therein or
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necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the Act, the Company will notify the
Representative promptly and prepare and file with the Commission an appropriate
amendment or supplement in accordance with Section 10 of the Act, each such
amendment or supplement to be satisfactory to Underwriters' Counsel, and the
Company will furnish to the Underwriters copies of such amendment or supplement
as soon as available and in such quantities as the Underwriters may request.
(g) As soon as practicable, but in any event not
later than 45 days after the end of the 12-month period beginning on the day
after the end of the fiscal quarter of the Company during which the effective
date of the Registration Statement occurs (90 days in the event that the end of
such fiscal quarter is the end of the Company's fiscal year), the Company shall
make generally available to its security holders, in the manner specified in
Rule 158(b) of the Rules and Regulations, and to the Representative, an earnings
statement which will be in the detail required by, and will otherwise comply
with, the provisions of Section 11(a) of the Act and Rule 158(a) of the Rules
and Regulations, which statement need not be audited unless required by the Act,
covering a period of at least 12 consecutive months after the effective date of
the Registration Statement.
(h) During a period of seven years after the date
hereof, the Company will furnish to its stockholders, as soon as practicable,
annual reports (including financial statements audited by independent public
accountants) and unaudited quarterly reports of earnings, and will deliver to
the Representative:
i) concurrently with furnishing such quarterly
reports to its stockholders, statements of income of the
Company for each quarter in the form furnished to the
Company's stockholders and certified by the Company's
principal financial or accounting officer;
ii) concurrently with furnishing such annual reports
to its stockholders, a balance sheet of the Company as at the
end of the preceding fiscal year, together with statements of
operations, stockholders' equity, and cash flows of the
Company for such fiscal year, accompanied by a copy of the
certificate thereon of independent certified public
accountants;
iii) as soon as they are available, copies of all
reports (financial or other) mailed to stockholders;
iv) as soon as they are available, copies of all
reports and financial statements furnished to or filed with
the Commission, the NASD or any securities exchange;
v) every press release and every material news item
or article of interest to the financial community in respect
of the Company, or its affairs which was released or prepared
by or on behalf of the Company; and
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vi) any additional information of a public nature
concerning the Company (and any future subsidiary) or its
businesses which the Representative may request.
During such seven-year period, if the Company has an active
subsidiary, the foregoing financial statements will be on a consolidated basis
to the extent that the accounts of the Company and its subsidiary are
consolidated, and will be accompanied by similar financial statements for any
significant subsidiary which is not so consolidated.
(i) The Company will maintain a Transfer Agent and,
if necessary under the jurisdiction of incorporation of the Company, a Registrar
(which may be the same entity as the Transfer Agent) for its Common Stock.
(j) The Company will furnish to the Representative
or on the Representative's order, without charge, at such place as the
Representative may designate, copies of each Preliminary Prospectus, the
Registration Statement and any pre-effective or post-effective amendments
thereto (two of which copies will be signed and will include all financial
statements and exhibits), the Prospectus, and all amendments and supplements
thereto, including any prospectus prepared after the effective date of the
Registration Statement, in each case as soon as available and in such quantities
as the Representative may request.
(k) On or before the effective date of the
Registration Statement, the Company shall provide the Representative with true
copies of duly executed, legally binding and enforceable agreements pursuant to
which for a period of 13 months from the effective date of the Registration
Statement, the holders of all shares of Common Stock and holders of securities
exchangeable or exercisable for or convertible into shares of Common Stock,
agree that it or he or she will not directly or indirectly, issue, offer to
sell, sell, grant an option for the sale of, assign, transfer, pledge,
hypothecate, distribute or otherwise encumber or dispose of any shares of Common
Stock or securities convertible into, exercisable or exchangeable for or
evidencing any right to purchase or subscribe for any shares of Common Stock
(either pursuant to Rule 144 of the Rules and Regulations or otherwise) or
dispose of any beneficial interest therein without the prior written consent of
the Representative (collectively, the "Lock-up Agreements"). During the 13 month
period commencing with the effective date of the Registration Statement, the
Company shall not, without the prior written consent of the Representative,
sell, contract or offer to sell, issue, transfer, assign, pledge, hypothecate,
distribute, or otherwise dispose of, directly or indirectly, any shares of
Common Stock or any options, rights or warrants with respect to any shares of
Common Stock. On or before the Closing Date, the Company shall deliver
instructions to the Transfer Agent authorizing it to place appropriate legends
on the certificates representing the securities subject to the Lock-up
Agreements and to place appropriate stop transfer orders on the Company's
ledgers.
(l) Neither the Company, nor any of its officers,
directors, stockholders, nor any of their respective affiliates (within the
meaning of the Rules and Regulations) will take, directly or indirectly, any
action designed to, or which might in the future reasonably be expected to cause
or result in, stabilization or manipulation of the price of any securities of
the Company.
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(m) The Company shall apply the net proceeds from
the sale of the Securities in the manner, and subject to the conditions, set
forth under "Use of Proceeds" in the Prospectus. Except as described in the
Prospectus, no portion of the net proceeds will be used, directly or indirectly,
to acquire any securities issued by the Company.
(n) The Company shall timely file all such reports,
forms or other documents as may be required (including, but not limited to, a
Form SR as may be required pursuant to Rule 463 under the Act) from time to
time, under the Act, the Exchange Act, and the Rules and Regulations, and all
such reports, forms and documents filed will comply as to form and substance
with the applicable requirements under the Act, the Exchange Act, and the Rules
and Regulations.
(o) The Company shall furnish to the Representative
as early as practicable prior to each of the date hereof, the Closing Date and
each Option Closing Date, if any, but no later than two (2) full business days
prior thereto, a copy of the latest available unaudited interim financial
statements of the Company (which in no event shall be as of a date more than
thirty (30) days prior to the date of the Registration Statement) which have
been read by the Company's independent public accountants, as stated in its
letter to be furnished pursuant to Section 6(i) hereof.
(p) The Company shall cause the Common Stock to be
quoted on Amex and for a period of seven (7) years from the date hereof, use its
best efforts to maintain the Amex quotation of the Common Stock to the extent
outstanding.
(q) For a period of five (5) years from the Closing
Date, the Company shall furnish to the Representative at the Representative's
request and at the Company's sole expense, (i) daily consolidated transfer
sheets relating to the Common Stock (ii) the list of holders of all of the
Company's securities and (iii) a Blue Sky "Trading Survey" for secondary sales
of the Company's securities prepared by counsel to the Company.
(r) As soon as practicable, (i) but in no event more
than 5 business days before the effective date of the Registration Statement,
file a Form 8-A with the Commission providing for the registration under the
Exchange Act of the Securities and (ii) but in no event more than 30 days from
the effective date of the Registration Statement, take all necessary and
appropriate actions to be included in Standard and Poor's Corporation
Descriptions and Moody's OTC Manual and to continue such inclusion for a period
of not less than seven (7) years.
(s) The Company hereby agrees that it will not for a
period of thirteen (13) months from the effective date of the Registration
Statement, adopt, propose to adopt or otherwise permit to exist any employee,
officer, director, consultant or compensation plan or arrangement permitting the
grant, issue or sale of any shares of Common Stock or other securities of the
Company (i) in an amount greater than an aggregate of [_______] shares, (ii) at
an exercise or sale price per share less than the greater of (a) the initial
public offering price of the Shares set forth herein and (b) the fair market
value of the Common Stock on the date of grant or sale, (iii) to any direct or
indirect beneficial holder on the date hereof of more than 10% of the issued and
outstanding shares of Common Stock at an exercise price greater than 110%
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of the fair market value of the Common Stock on the date of the grant, (iv) with
the payment for such securities with any form of consideration other than cash,
(v) upon payment of less than the full purchase or exercise price for such
shares of Common Stock or other securities of the Company on the date of grant
or issuance, or (vi) permitting the existence of stock appreciation rights,
phantom options or similar arrangements.
(t) Until the completion of the distribution of the
Shares, the Company shall not without the prior written consent of the
Representative and Underwriters' Counsel, issue, directly or indirectly, any
press release or other communication or hold any press conference with respect
to the Company or its activities or the offering contemplated hereby, other than
trade releases issued in the ordinary course of the Company's business
consistent with past practices with respect to the Company's operations.
(u) For a period equal to the lesser of (i) seven
(7) years from the date hereof, and (ii) the sale to the public of the
Representative's Shares, the Company will not take any action or actions which
may prevent or disqualify the Company's use of Form SB-2 (or other appropriate
form) for the registration under the Act of the Representative's Shares.
(v) For a period of five (5) years after the
effective date of the Registration Statement, the Representative shall have the
right to designate for election Dan Purjes to the Company's Board of Directors
(the "Board"). In the event the Representative elects not to exercise such
right, then it may designate one (1) individual to attend meetings of the
Company's Board. The Company shall notify the Representative of each meeting of
the Board and the Company shall send to such individual all notices and other
correspondence and communications sent by the Company to members of the Board.
Such individual shall be reimbursed for all out-of-pocket expenses incurred in
connection with his attendance of meetings of the Board.
(w) For a period of three (3) years from the date
hereof, the Representative shall have a right of first refusal for any sale of
securities to be made by the Company or any of its affiliates, which right shall
be assignable by the Representative to any affiliate of Josephthal Lyon & Ross
Incorporated.
5. Payment of Expenses.
(a) The Company hereby agrees to pay on each of the
Closing Date and the Option Closing Date (to the extent not paid at the Closing
Date) all expenses and fees (other than fees of Underwriters' Counsel, except as
provided in (iv) below) incident to the performance of the obligations of the
Company under this Agreement and the Representative's Warrant Agreement,
including, without limitation, (i) the fees and expenses of accountants and
counsel for the Company, (ii) all costs and expenses incurred in connection with
the preparation, duplication, printing, (including mailing and handling charges)
filing, delivery and mailing (including the payment of postage with respect
thereto) of the Registration Statement and the Prospectus and any amendments and
supplements thereto and the printing, mailing (including the payment of postage
with respect thereto) and delivery of this Agreement, the Agreement Among
Underwriters, the Selected Dealer Agreements, and related documents, including
the cost of all copies thereof and of the Preliminary Prospectuses and of the
Prospectus and any
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amendments thereof or supplements thereto supplied to the Underwriters and such
dealers as the Underwriters may request, in quantities as hereinabove stated,
(iii) the printing, engraving, issuance and delivery of the Securities
including, but not limited to, (x) the purchase by the Underwriters of the
Shares and the purchase by the Representative of the Representative's Warrants
from the Company, (y) the consummation by the Company of any of its obligations
under this Agreement and the Representative's Warrant Agreement, and (z) resale
of the Shares by the Underwriters in connection with the distribution
contemplated hereby, (iv) the qualification of the Securities under state or
foreign securities or "Blue Sky" laws and determination of the status of such
securities under legal investment laws, including the costs of printing and
mailing the "Preliminary Blue Sky Memorandum," the "Supplemental Blue Sky
Memorandum" and "Legal Investments Survey," if any, and disbursements and fees
of counsel in connection therewith (such fees not to exceed $50,000), (v) costs
and expenses in connection with due diligence investigations, including but not
limited to the fees of any independent counsel or consultant retained, (vi) fees
and expenses of the transfer agent and registrar, (vii) applications for
assignments of a rating of the Securities by qualified rating agencies, (viii)
the fees payable to the Commission and the NASD, and (ix) the fees and expenses
incurred in connection with the quotation of the Securities on Amex and any
other exchange.
(b) If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 6 or Section 12, the
Company shall reimburse and indemnify the Representative for all of its actual
out-of-pocket expenses, including the fees and disbursements of Underwriters'
Counsel, less any amounts already paid pursuant to Section 5(c) hereof.
(c) The Company further agrees that, in addition to
the expenses payable pursuant to subsection (a) of this Section 5, it will pay
to the Representative on the Closing Date by certified or bank cashier's check
or, at the election of the Representative, by deduction from the proceeds of the
offering contemplated herein a non-accountable expense allowance equal to two
and one-half percent (2.5%) of the gross proceeds received by the Company from
the sale of the Firm Shares, all of which shall be paid upon the Closing Date.
In the event the Representative elect to exercise the over-allotment option
described in Section 2(b) hereof, the Company agrees to pay to the
Representative on the Option Closing Date (by certified or bank cashier's check
or, at the Representative's election, by deduction from the proceeds of the
Option Shares) a non-accountable expense allowance equal to two and one-half
percent (2.5%) of the gross proceeds received by the Company from the sale of
the Option Shares.
6. Conditions of the Underwriters' Obligations. The
obligations of the Underwriters hereunder shall be subject to the continuing
accuracy of the representations and warranties of the Company herein as of the
date hereof and as of the Closing Date and each Option Closing Date, if any,
with respect to the Company as if it had been made on and as of the Closing Date
or each Option Closing Date, as the case may be; the accuracy on and as of the
Closing Date or Option Closing Date, if any, of the statements of the officers
of the Company made pursuant to the provisions hereof; and the performance by
the Company on and as of the Closing Date and each Option Closing Date, if any,
of its covenants and obligations hereunder and to the following further
conditions:
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(a) The Registration Statement shall have become
effective not later than 12:00 Noon, New York time, on the date of this
Agreement or such later date and time as shall be consented to in writing by the
Representative, and, at Closing Date and each Option Closing Date, if any, no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted or
shall be pending or contemplated by the Commission and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of Underwriters' Counsel. If the Company has elected
to rely upon Rule 430A of the Rules and Regulations, the price of the Shares and
any price-related information previously omitted from the effective Registration
Statement pursuant to such Rule 430A shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) of the Rules and Regulations
within the prescribed time period, and prior to Closing Date the Company shall
have provided evidence satisfactory to the Representative of such timely filing,
or a post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the requirements of
Rule 430A of the Rules and Regulations.
(b) The Representative shall not have advised the
Company that the Registration Statement, or any amendment thereto, contains an
untrue statement of fact which, in the Representative's opinion, is material, or
omits to state a fact which, in the Representative's opinion, is material and is
required to be stated therein or is necessary to make the statements therein not
misleading, or that the Prospectus, or any supplement thereto, contains an
untrue statement of fact which, in the Representative's opinion, is material, or
omits to state a fact which, in the Representative's opinion, is material and is
required to be stated therein or is necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(c) On or prior to the Closing Date, the
Representative shall have received from Underwriters' Counsel, such opinion or
opinions with respect to the organization of the Company, the validity of the
Securities, the Representative's Warrants, the Registration Statement, the
Prospectus and other related matters as the Representative may request and
Underwriters' Counsel shall have received such papers and information as they
request to enable them to pass upon such matters.
(d) At Closing Date, the Underwriters shall have
received the favorable opinion of Sonnenschein Nath & Rosenthal, counsel to the
Company, dated the Closing Date, addressed to the Underwriters and in form and
substance satisfactory to Underwriters' Counsel, to the effect that:
i) the Company (A) has been duly organized and is
validly existing as a corporation in good standing under the
laws of its jurisdiction, (B) is duly qualified and licensed
and in good standing as a foreign corporation in each
jurisdiction in which its ownership or leasing of any
properties or the character of its operations requires such
qualification or licensing, and (C) has all requisite
corporate power and authority; and the Company has obtained
any and all necessary authorizations, approvals, orders,
licenses, certificates, franchises and permits of and from all
governmental or regulatory officials and bodies
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(including, without limitation, those having jurisdiction over
environmental or similar matters), to own or lease its
properties and conduct its business as described in the
Prospectus; the Company is and has been doing business in
material compliance with all such authorizations, approvals,
orders, licenses, certificates, franchises and permits and all
federal, state and local laws, rules and regulations; the
Company has not received any notice of proceedings relating to
the revocation or modification of any such authorization,
approval, order, license, certificate, franchise, or permit
which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially
adversely affect the business, operations, condition,
financial or otherwise, or the earnings, business affairs,
position, prospects, value, operation, properties, business or
results of operations of the Company. The disclosures in the
Registration Statement concerning the effects of federal,
state and local laws, rules and regulations on the Company's
business as currently conducted and as contemplated are
correct in all material respects and do not omit to state a
fact necessary to make the statements contained therein not
misleading in light of the circumstances in which they were
made;
ii) to the best of such counsel's knowledge, the
Company does not own an interest in any other corporation,
partnership, joint venture, trust or other business entity;
iii) the Company has a duly authorized, issued and
outstanding capitalization as set forth in the Prospectus, and
any amendment or supplement thereto, under "Capitalization"
and "Description of Capital Stock," and the Company is not a
party to or bound by any instrument, agreement or other
arrangement providing for it to issue any capital stock,
rights, warrants, options or other securities, except for this
Agreement, the Representative's Warrant Agreement and as
described in the Prospectus. The Securities, and all other
securities issued or issuable by the Company conform in all
material respects to all statements with respect thereto
contained in the Registration Statement and the Prospectus.
All issued and outstanding securities of the Company have been
duly authorized and validly issued and are fully paid and
non-assessable; the holders thereof have no rights of
rescission with respect thereto, and are not subject to
personal liability by reason of being such holders; and none
of such securities were issued in violation of the preemptive
rights of any holders of any security of the Company. The
Shares, the Representative's Warrants and the Representative's
Shares to be sold by the Company hereunder and under the
Representative's Warrant Agreement are not and will not be
subject to any preemptive or other similar rights of any
stockholder, have been duly authorized and, when issued, paid
for and delivered in accordance with the terms hereof, will be
validly issued, fully paid and non-assessable and conform to
the description thereof contained in the Prospectus; the
holders thereof will not be subject to any liability solely as
such holders; all corporate action required to be taken for
the authorization, issue and sale of the Shares, the
Representative's Warrants and the Representative's Shares has
been duly and validly taken;
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the certificates representing the Shares and the
Representative's Warrants are in due and proper form. The
Representative's Warrants constitute valid and binding
obligations of the Company to issue and sell, upon exercise
thereof and payment therefor, the number and type of
securities of the Company called for thereby. Upon the
issuance and delivery pursuant to this Agreement and the
Representative's Warrant Agreement of the Shares and the
Representative's Warrants, respectively, to be sold by the
Company, the Underwriters and the Representative,
respectively, will acquire good and marketable title to the
Shares and Representative's Warrants free and clear of any
pledge, lien, charge, claim, encumbrance, pledge, security
interest, or other restriction or equity of any kind
whatsoever. No transfer tax is payable by or on behalf of the
Underwriters in connection with (A) the issuance by the
Company of the Shares, (B) the purchase by the Underwriters
and the Representative of the Shares and the Representative's
Warrants, respectively, from the Company, (C) the consummation
by the Company of any of its obligations under this Agreement
or the Representative's Warrant Agreement, or (D) resales of
the Shares in connection with the distribution contemplated
hereby;
iv) the Registration Statement is effective under
the Act, and, if applicable, filing of all pricing information
has been timely made in the appropriate form under Rule 430A,
and no stop order suspending the use of the Preliminary
Prospectus, the Registration Statement or Prospectus or any
part of any thereof or suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or, to the
best of such counsel's knowledge, threatened or contemplated
under the Act;
v) each of the Preliminary Prospectus, the
Registration Statement, and the Prospectus and any amendments
or supplements thereto (other than the financial statements
and other financial and statistical data included therein, as
to which no opinion need be rendered) comply as to form in all
material respects with the requirements of the Act and the
Rules and Regulations;
vi) to the best of such counsel's knowledge, (A)
there are no agreements, contracts or other documents required
by the Act to be described in the Registration Statement and
the Prospectus and filed as exhibits to the Registration
Statement other than those described in the Registration
Statement (or required to be filed under the Exchange Act if
upon such filing they would be incorporated, in whole or in
part, by reference therein) and the Prospectus and filed as
exhibits thereto, and the exhibits which have been filed are
correct copies of the documents of which they purport to be
copies; (B) the descriptions in the Registration Statement and
the Prospectus and any supplement or amendment thereto of
contracts and other documents to which the Company is a party
or by which it is bound, including any document to which the
Company is a party or by which it is bound, incorporated by
reference into the Prospectus and any supplement or amendment
thereto, are accurate in all material respects and fairly
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represent the information required to be shown by Form SB-2;
(C) there is not pending or threatened against the Company any
action, arbitration, suit, proceeding, inquiry, investigation,
litigation, governmental or other proceeding (including,
without limitation, those having jurisdiction over
environmental or similar matters), domestic or foreign,
pending or threatened against (or circumstances that may give
rise to the same), or involving the properties or business of
the Company which (x) is required to be disclosed in the
Registration Statement which is not so disclosed (and such
proceedings as are summarized in the Registration Statement
are accurately summarized in all material respects), (y)
questions the validity of the capital stock of the Company or
this Agreement or the Representative's Warrant Agreement, or
of any action taken or to be taken by the Company pursuant to
or in connection with any of the foregoing; (D) no statute or
regulation or legal or governmental proceeding required to be
described in the Prospectus is not described as required; and
(E) there is no action, suit or proceeding pending, or
threatened, against or affecting the Company before any court
or arbitrator or governmental body, agency or official (or any
basis thereof known to such counsel) in which there is a
reasonable possibility of an adverse decision which may result
in a material adverse change in the condition, financial or
otherwise, or the earnings, position, prospects, stockholders'
equity, value, operation, properties, business or results of
operations of the Company, which could adversely affect the
present or prospective ability of the Company to perform its
obligations under this Agreement or the Representative's
Warrant Agreement or which in any manner draws into question
the validity or enforceability of this Agreement or the
Representative's Warrant Agreement;
vii) the Company has full legal right, power and
authority to enter into each of this Agreement and the
Representative's Warrant Agreement, and to consummate the
transactions provided for herein and therein; and each of this
Agreement and the Representative's Warrant Agreement has been
duly authorized, executed and delivered by the Company. Each
of this Agreement and the Representative's Warrant Agreement,
assuming due authorization, execution and delivery by each
other party thereto constitutes a legal, valid and binding
agreement of the Company enforceable against the Company in
accordance with its terms (except as such enforceability may
be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general
application relating to or affecting enforcement of creditors'
rights and the application of equitable principles in any
action, legal or equitable, and except as rights to indemnity
or contribution may be limited by applicable law), and none of
the Company's execution or delivery of this Agreement and the
Representative's Warrant Agreement, its performance hereunder
or thereunder, its consummation of the transactions
contemplated herein or therein, or the conduct of its business
as described in the Registration Statement, the Prospectus,
and any amendments or supplements thereto, the Prospectus and
any amendments or supplements thereto, conflicts with or will
conflict with or results or will result in any breach or
violation of any of the terms or provisions of, or constitutes
or will constitute a default under, or result in the creation
or imposition of any lien, charge, claim,
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encumbrance, pledge, security interest, defect or other
restriction or equity of any kind whatsoever upon, any
property or assets (tangible or intangible) of the Company
pursuant to the terms of, (A) the certificate of incorporation
or by-laws of the Company, (B) any license, contract,
indenture, mortgage, deed of trust, voting trust agreement,
stockholders agreement, note, loan or credit agreement or any
other agreement or instrument to which the Company is a party
or by which it is or may be bound or to which any of its
respective properties or assets (tangible or intangible) is or
may be subject, or any indebtedness, or (C) any statute,
judgment, decree, order, rule or regulation applicable to the
Company of any arbitrator, court, regulatory body or
administrative agency or other governmental agency or body
(including, without limitation, those having jurisdiction over
environmental or similar matters), domestic or foreign, having
jurisdiction over the Company or any of its activities or
properties;
viii) except as described in the Prospectus, no
consent, approval, authorization or order of, and no filing
with, any court, regulatory body, government agency or other
body (other than such as may be required under Blue Sky laws,
as to which no opinion need be rendered) is required in
connection with the issuance of the Shares pursuant to the
Prospectus, the issuance of the Representative's Warrants, and
the Registration Statement, the performance of this Agreement
and the Representative's Warrant Agreement, and the
transactions contemplated hereby and thereby;
ix) the properties and business of the Company
conform in all material respects to the description thereof
contained in the Registration Statement and the Prospectus;
and the Company has good and marketable title to, or valid and
enforceable leasehold estates in, all items of real and
personal property stated in the Prospectus to be owned or
leased by it, in each case free and clear of all liens,
charges, claims, encumbrances, pledges, security interests,
defects or other restrictions or equities of any kind
whatsoever, other than those referred to in the Prospectus and
liens for taxes not yet due and payable;
x) to the best knowledge of such counsel, the
Company is not in breach of, or in default under, any term or
provision of any license, contract, indenture, mortgage,
installment sale agreement, deed of trust, lease, voting trust
agreement, stockholders' agreement, partnership agreement,
note, loan or credit agreement or any other agreement or
instrument evidencing an obligation for borrowed money, or any
other agreement or instrument to which the Company is a party
or by which the Company may be bound or to which the property
or assets (tangible or intangible) of the Company is subject
or affected; and the Company is not in violation of any term
or provision of its certificate of incorporation by-laws, or
in violation of any franchise, license, permit, judgment,
decree, order, statute, rule or regulation;
xi) the statements in the Prospectus under
"BUSINESS," "MANAGEMENT," "PRINCIPAL STOCKHOLDERS," "CERTAIN
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TRANSACTIONS," "DESCRIPTION OF CAPITAL STOCK," and "SHARES
ELIGIBLE FOR FUTURE SALE" have been reviewed by such counsel,
and insofar as they refer to statements of law, descriptions
of statutes, licenses, rules or regulations or legal
conclusions, are correct in all material respects;
xii) the Shares have been accepted for quotation on
Amex;
xiii) the persons listed under the caption
"PRINCIPAL STOCKHOLDERS" in the Prospectus are the respective
"beneficial owners" (as such phrase is defined in regulation
13d-3 under the Exchange Act) of the securities set forth
opposite their respective names thereunder as and to the
extent set forth therein;
xiv) except as described in the Prospectus, no
person, corporation, trust, partnership, association or other
entity has the right to include and/or register any securities
of the Company in the Registration Statement, require the
Company to file any registration statement or, if filed, to
include any security in such registration statement;
xv) except as described in the Prospectus, there are
no claims, payments, issuances, arrangements or understandings
for services in the nature of a finder's or origination fee
with respect to the sale of the Securities hereunder or
financial consulting arrangement or any other arrangements,
agreements, understandings, payments or issuances that may
affect the Underwriters' compensation, as determined by the
NASD;
xvi) assuming due execution by the parties thereto
other than the Company, the Lock-up Agreements are legal,
valid and binding obligations of parties thereto, enforceable
against the party and any subsequent holder of the securities
subject thereto in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of
general application relating to or affecting enforcement of
creditors' rights and the application of equitable principles
in any action, legal or equitable, and except as rights to
indemnity or contribution may be limited by applicable law);
and
xvii) except as described in the Prospectus, the
Company does not (A) maintain, sponsor or contribute to any
ERISA Plans, (B) maintain or contribute, now or at any time
previously, to a defined benefit plan, as defined in Section
3(35) of ERISA, and (C) has never completely or partially
withdrawn from a "multiemployer plan".
Such counsel shall state that such counsel has participated in
conferences with officers and other representatives of the Company and
representatives of the independent public accountants for the Company at which
conferences such counsel made inquiries of such officers, representatives and
accountants and discussed the contents of the Preliminary Prospectus, the
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Registration Statement, the Prospectus, and related matters were discussed and,
although such counsel is not passing upon and does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Preliminary Prospectus, the Registration Statement and Prospectus, on the basis
of the foregoing, no facts have come to the attention of such counsel which lead
them to believe that either the Registration Statement or any amendment thereto,
at the time such Registration Statement or amendment became effective or the
Preliminary Prospectus or Prospectus or amendment or supplement thereto as of
the date of such opinion contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading (it being understood that such
counsel need express no opinion with respect to the financial statements and
schedules and other financial and statistical data included in the Preliminary
Prospectus, the Registration Statement or Prospectus).
Such opinion shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any treatise, written policy
or other document relating to legal opinions, including, without limitation, the
Legal Opinion Accord of the ABA Section of Business Law (1991), or any
comparable State bar accord.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the United
States and jurisdictions in which they are admitted, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance satisfactory to Underwriters'
Counsel) of other counsel acceptable to Underwriters' Counsel, familiar with the
applicable laws; (B) as to matters of fact, to the extent they deem proper, on
certificates and written statements of responsible officers of the Company, and
certificates or other written statements of officers of departments of various
jurisdictions having custody of documents respecting the corporate existence or
good standing of the Company, provided that copies of any such statements or
certificates shall be delivered to Underwriters' Counsel if requested. The
opinion of such counsel for the Company shall state that the opinion of any such
other counsel is in form satisfactory to such counsel and that the
Representative and they are justified in relying thereon.
At each Option Closing Date, if any, the Underwriters shall
have received the favorable opinion of Sonnenschein Nath & Rosenthal, counsel to
the Company, dated the Option Closing Date, addressed to the Underwriters and in
form and substance satisfactory to Underwriters' Counsel confirming as of Option
Closing Date the statements made by Sonnenschein Nath & Rosenthal, in its
opinion delivered on the Closing Date.
(e) On or prior to each of the Closing Date and the
Option Closing Date, if any, Underwriters' Counsel shall have been furnished
such documents, certificates and opinions as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in
subsection (c) of this Section 6, or in order to evidence the accuracy,
completeness or satisfaction of any of the representations, warranties or
conditions of the Company, or herein contained.
(f) Prior to each of the Closing Date and each
Option Closing Date, if any, (i) there shall have been no material adverse
change nor development involving a prospective
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change in the condition, financial or otherwise, prospects, stockholders' equity
or the business activities of the Company, whether or not in the ordinary course
of business, from the latest dates as of which such condition is set forth in
the Registration Statement and Prospectus; (ii) there shall have been no
transaction, not in the ordinary course of business, entered into by the
Company, from the latest date as of which the financial condition of the Company
is set forth in the Registration Statement and Prospectus which is materially
adverse to the Company; (iii) the Company shall not be in default under any
provision of any instrument relating to any outstanding indebtedness; (iv) the
Company shall not have issued any securities (other than the Securities); the
Company shall not have declared or paid any dividend or made any distribution in
respect of its capital stock of any class; and there has not been any change in
the capital stock of the Company, or any material change in the debt (long or
short term) or liabilities or obligations of the Company (contingent or
otherwise); (v) no material amount of the assets of the Company shall have been
pledged or mortgaged, except as set forth in the Registration Statement and
Prospectus; (vi) no action, suit or proceeding, at law or in equity, shall have
been pending or threatened (or circumstances giving rise to same) against the
Company, or affecting any of its properties or business before or by any court
or federal, state or foreign commission, board or other administrative agency
wherein an unfavorable decision, ruling or finding may adversely affect the
business, operations, prospects or financial condition or income of the Company,
except as set forth in the Registration Statement and Prospectus; and (vii) no
stop order shall have been issued under the Act and no proceedings therefor
shall have been initiated, threatened or contemplated by the Commission.
(g) At each of the Closing Date and each Option
Closing Date, if any, the Underwriters shall have received a certificate of the
Company signed by the principal executive officer and by the chief financial or
chief accounting officer of the Company, dated the Closing Date or Option
Closing Date, as the case may be, to the effect that each of such persons has
carefully examined the Registration Statement, the Prospectus and this
Agreement, and that:
i) The representations and warranties of the Company
in this Agreement are true and correct, as if made on and as
of the Closing Date or the Option Closing Date, as the case
may be, and the Company has complied with all agreements and
covenants and satisfied all conditions contained in this
Agreement on its part to be performed or satisfied at or prior
to such Closing Date or Option Closing Date, as the case may
be;
ii) No stop order suspending the effectiveness of
the Registration Statement or any part thereof has been
issued, and no proceedings for that purpose have been
instituted or are pending or, to the best of each of such
person's knowledge, after due inquiry are contemplated or
threatened under the Act;
iii) The Registration Statement and the Prospectus
and, if any, each amendment and each supplement thereto,
contain all statements and information required to be included
therein, and none of the Registration Statement, the
Prospectus nor any amendment or supplement thereto includes
any untrue statement of a material fact or omits to state any
material fact required to be
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stated therein or necessary to make the statements therein not
misleading and neither the Preliminary Prospectus or any
supplement thereto included any untrue statement of a material
fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading; and
iv) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, (a) the Company has not incurred up to and
including the Closing Date or the Option Closing Date, as the
case may be, other than in the ordinary course of its
business, any material liabilities or obligations, direct or
contingent; (b) the Company has not paid or declared any
dividends or other distributions on its capital stock; (c) the
Company has not entered into any transactions not in the
ordinary course of business; (d) there has not been any change
in the capital stock of the Company or any material change in
the debt (long or short-term) of the Company; (e) the Company
has not sustained any material loss or damage to its property
or assets, whether or not insured; (g) there is no litigation
which is pending or threatened (or circumstances giving rise
to same) against the Company, or any affiliated party of any
of the foregoing which is required to be set forth in an
amended or supplemented Prospectus which has not been set
forth; and (h) there has occurred no event required to be set
forth in an amended or supplemented Prospectus which has not
been set forth.
References to the Registration Statement and the Prospectus in this subsection
(g) are to such documents as amended and supplemented at the date of such
certificate.
(h) By the Closing Date, the Underwriters will have
received clearance from the NASD as to the amount of compensation allowable or
payable to the Underwriters, as described in the Registration Statement.
(i) At the time this Agreement is executed, the
Underwriters shall have received a letter, dated such date, addressed to the
Underwriters in form and substance satisfactory (including the non-material
nature of the changes or decreases, if any, referred to in clause (iii) below)
in all respects to the Underwriters and Underwriters' Counsel, from Deloitte &
Touche LLP;
i) confirming that they are independent certified
public accountants with respect to the Company within the
meaning of the Act and the applicable Rules and Regulations;
ii) stating that it is their opinion that the
financial statements and supporting schedules of the Company
included in the Registration Statement comply as to form in
all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations
thereunder and that the Representative may rely upon the
opinion of Deloitte & Touche LLP with respect
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to such financial statements and supporting schedules included
in the Registration Statement;
iii) stating that, on the basis of a limited review
which included a reading of the latest available unaudited
interim financial statements of the Company, a reading of the
latest available minutes of the stockholders and board of
directors and the various committees of the boards of
directors of the Company, consultations with officers and
other employees of the Company responsible for financial and
accounting matters and other specified procedures and
inquiries, nothing has come to their attention which would
lead them to believe that (A) the pro forma financial
information contained in the Registration Statement and
Prospectus does not comply as to form in all material respects
with the applicable accounting requirements of the Act and the
Rules and Regulations or is not fairly presented in conformity
with generally accepted accounting principles applied on a
basis consistent with that of the audited financial statements
of the Company or the unaudited pro forma financial
information included in the Registration Statement, (B) the
unaudited financial statements and supporting schedules of the
Company included in the Registration Statement do not comply
as to form in all material respects with the applicable
accounting requirements of the Act and the Rules and
Regulations or are not fairly presented in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements of the Company included in the Registration
Statement, or (C) at a specified date not more than five (5)
days prior to the effective date of the Registration
Statement, there has been any change in the capital stock of
the Company, any change in the long-term debt of the Company,
or any decrease in the stockholders' equity of the Company or
any decrease in the net current assets or net assets of the
Company as compared with amounts shown in the June 30, 1997
balance sheets included in the Registration Statement, other
than as set forth in or contemplated by the Registration
Statement, or, if there was any change or decrease, setting
forth the amount of such change or decrease, and (D) during
the period from June 30, 1997 to a specified date not more
than five (5) days prior to the effective date of the
Registration Statement, there was any decrease in net revenues
or net earnings of the Company or increase in net earnings per
common share of the Company, in each case as compared with the
corresponding period beginning June 30, 1996 other than as set
forth in or contemplated by the Registration Statement, or, if
there was any such decrease, setting forth the amount of such
decrease;
iv) setting forth, at a date not later than five (5)
days prior to the date of the Registration Statement, the
amount of liabilities of the Company (including a break-down
of commercial paper and notes payable to banks);
v) stating that they have compared specific dollar
amounts, numbers of shares, percentages of revenues and
earnings, statements and other financial information
pertaining to the Company set forth in the Prospectus in each
case to the extent that such amounts, numbers, percentages,
statements and information
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may be derived from the general accounting records, including
work sheets, of the Company and excluding any questions
requiring an interpretation by legal counsel, with the results
obtained from the application of specified readings, inquiries
and other appropriate procedures (which procedures do not
constitute an examination in accordance with generally
accepted auditing standards) set forth in the letter and found
them to be in agreement; and
vi) statements as to such other matters incident to
the transaction contemplated hereby as the Representative may
request.
(j) At the Closing Date and each Option Closing
Date, if any, the Underwriters shall have received from Deloitte & Touche LLP a
letter, dated as of the Closing Date or the Option Closing Date, as the case may
be, to the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (i) of this Section hereof except that the specified date
referred to shall be a date not more than five days prior to the Closing Date or
the Option Closing Date, as the case may be, and, if the Company has elected to
rely on Rule 430A of the Rules and Regulations, to the further effect that they
have carried out procedures as specified in clause (v) of subsection (i) of this
Section with respect to certain amounts, percentages and financial information
as specified by the Representative and deemed to be a part of the Registration
Statement pursuant to Rule 430A(b) and have found such amounts, percentages and
financial information to be in agreement with the records specified in such
clause (v).
(k) The Company shall have delivered to the
Representative a letter from Deloitte & Touche LLP addressed to the Company
stating that they have not during the immediately preceding two year period
brought to the attention of the Company's management any "weakness" as defined
in Statement of Auditing Standards No. 60 "Communication of Internal Control
Structure Related Matters Noted in an Audit," in any of the Company's internal
controls.
(l) On each of the Closing Date and Option Closing
Date, if any, there shall have been duly tendered to the Representative for the
several Underwriters' accounts the appropriate number of Shares.
(m) No order suspending the sale of the Securities
in any jurisdiction designated by the Representative pursuant to subsection (e)
of Section 4 hereof shall have been issued on either the Closing Date or the
Option Closing Date, if any, and no proceedings for that purpose shall have been
instituted or shall be contemplated.
(n) On or before the Closing Date, the Company shall
have executed and delivered to the Representative, (i) the Representative's
Warrant Agreement substantially in the form filed as Exhibit 4.3 to the
Registration Statement in final form and substance satisfactory to the
Representative, and (ii) the Representative's Warrants in such denominations and
to such designees as shall have been provided to the Company.
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(o) On or before the Closing Date, the Shares shall
have been duly approved for quotation on Amex, subject to official notice of
issuance.
(p) On or before the Closing Date, there shall have
been delivered to the Representative all of the Lock-up Agreements, in form and
substance satisfactory to Underwriters' Counsel.
If any condition to the Underwriters' obligations hereunder to
be fulfilled prior to or at the Closing Date or the relevant Option Closing
Date, as the case may be, is not so fulfilled, the Representative may terminate
this Agreement or, if the Representative so elect, it may waive any such
conditions which have not been fulfilled or extend the time for their
fulfillment.
7. Indemnification.
(a) The Company, agrees to indemnify and hold
harmless each of the Underwriters (for purposes of this Section 7 "Underwriter"
shall include the officers, directors, partners, employees, agents and counsel
of the Underwriter, including specifically each person who may be substituted
for an Underwriter as provided in Section 11 hereof), and each person, if any,
who controls the Underwriter ("controlling person") within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, from and against any
and all losses, claims, damages, expenses or liabilities, joint or several (and
actions, proceedings, investigations, inquiries, and suits in respect thereof),
whatsoever (including but not limited to any and all costs and expenses
whatsoever reasonably incurred in investigating, preparing or defending against
such action, proceeding, investigation, inquiry or suit, commenced or
threatened, or any claim whatsoever), as such are incurred, to which the
Underwriter or such controlling person may become subject under the Act, the
Exchange Act or any other statute or at common law or otherwise or under the
laws of foreign countries, arising out of or based upon (A) any untrue statement
or alleged untrue statement of a material fact contained (i) in any Preliminary
Prospectus, the Registration Statement or the Prospectus (as from time to time
amended and supplemented); (ii) in any post-effective amendment or amendments or
any new registration statement and prospectus in which is included securities of
the Company issued or issuable upon exercise of the Securities; or (iii) in any
application or other document or written communication (in this Section 7
collectively called "application") executed by the Company or based upon written
information furnished by the Company filed, delivered or used in any
jurisdiction in order to qualify the Securities under the securities laws
thereof or filed with the Commission, any state securities commission or agency,
Amex or any other securities exchange, (B) the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading (in the case of the Prospectus, in the
light of the circumstances under which they were made), or (C) any breach of any
representation, warranty, covenant or agreement of the Company contained herein
or in any certificate by or on behalf of the Company or any of its officers
delivered pursuant hereto unless, in the case of clause (A) or (B) above, such
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company with respect to any Underwriter by or on
behalf of such Underwriter expressly for use in any Preliminary
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Prospectus, the Registration Statement or any Prospectus, or any amendment
thereof or supplement thereto, or in any application, as the case may be.
The indemnity agreement in this subsection (a) shall be in
addition to any liability which the Company may have at common law or otherwise.
(b) Each of the Underwriters agrees severally, but
not jointly, to indemnify and hold harmless the Company, each of its directors,
each of its officers who has signed the Registration Statement, and each other
person, if any, who controls the Company within the meaning of the Act, to the
same extent as the foregoing indemnity from the Company to the Underwriters but
only with respect to statements or omissions, if any, made in any Preliminary
Prospectus, the Registration Statement or Prospectus or any amendment thereof or
supplement thereto or in any application made in reliance upon, and in strict
conformity with, written information furnished to the Company with respect to
any Underwriter by such Underwriter expressly for use in such Preliminary
Prospectus, the Registration Statement or Prospectus or any amendment thereof or
supplement thereto or in any such application, provided that such written
information or omissions only pertain to disclosures in the Preliminary
Prospectus, the Registration Statement or Prospectus directly relating to the
transactions effected by the Underwriters in connection with this Offering. The
Company acknowledges that the statements with respect to the public offering of
the Securities set forth under the heading "Underwriting" and the stabilization
legend in the Prospectus have been furnished by the Underwriters expressly for
use therein and constitute the only information furnished in writing by or on
behalf of the Underwriters for inclusion in the Prospectus.
The indemnity agreement in this subsection (b) shall be in
addition to any liability which the Underwriters may have at common law or
otherwise.
(c) Promptly after receipt by an indemnified party
under this Section 7 of notice of the commencement of any action, suit or
proceeding, such indemnified party shall, if a claim in respect thereof is to be
made against one or more indemnifying parties under this Section 7, notify each
party against whom indemnification is to be sought in writing of the
commencement thereof (but the failure so to notify an indemnifying party shall
not relieve it from any liability which it may have under this Section 7 except
to the extent that it has been prejudiced in any material respect by such
failure or from any liability which it may have otherwise). In case any such
action, investigation, inquiry, suit or proceeding is brought against any
indemnified party, and it notifies an indemnifying party or parties of the
commencement thereof, the indemnifying party or parties will be entitled to
participate therein, and to the extent it may elect by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying parties
in connection with the defense of such action at the expense of the indemnifying
party, (ii) the indemnifying parties shall not have employed counsel reasonably
satisfactory to such indemnified party to have charge of the defense of such
action within a
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<PAGE>
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action, investigation, inquiry, suit or proceeding on behalf of the indemnified
party or parties), in any of which events such fees and expenses of one
additional counsel shall be borne by the indemnifying parties. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action, investigation,
inquiry, suit or proceeding or separate but similar or related actions,
investigations, inquiries, suits or proceedings in the same jurisdiction arising
out of the same general allegations or circumstances. Anything in this Section 7
to the contrary notwithstanding, an indemnifying party shall not be liable for
any settlement of any claim or action effected without its written consent;
provided, however, that such consent was not unreasonably withheld. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, investigation, inquiry,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action), unless such settlement, compromise or consent
(i) includes an unconditional release of each indemnified party form all
liability arising out of such claim, action, suit or proceeding and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) In order to provide for just and equitable
contribution in any case in which (i) an indemnified party makes claim for
indemnification pursuant to this Section 7, but it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction and
the expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that the express provisions of this Section 7 provide for indemnification in
such case, or (ii) contribution under the Act may be required on the part of any
indemnified party, then each indemnifying party shall contribute to the amount
paid as a result of such losses, claims, damages, expenses or liabilities (or
actions, investigations, inquiries, suits or proceedings in respect thereof) (A)
in such proportion as is appropriate to reflect the relative benefits received
by each of the contributing parties, on the one hand, and the party to be
indemnified on the other hand, from the offering of the Securities or (B) if the
allocation provided by clause (A) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of each of the
contributing parties, on the one hand, and the party to be indemnified on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages, expenses or liabilities, as well as any other relevant
equitable considerations. In any case where the Company is the contributing
party and the Underwriters are the indemnified party, the relative benefits
received by the Company on the one hand, and the Underwriters, on the other,
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Securities (before deducting expenses) bear to the total
underwriting discounts received by the Underwriters hereunder, in each case as
set forth in the table on the Cover Page of the Prospectus. Relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
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<PAGE>
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, or by the
Underwriters, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, expenses or liabilities (or actions, investigations, inquiries,
suits or proceedings in respect thereof) referred to above in this subdivision
(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action, claim, investigation, inquiry, suit or proceeding. Notwithstanding the
provisions of this subdivision (d) the Underwriters shall not be required to
contribute any amount in excess of the underwriting discount applicable to the
Securities purchased by the Underwriters hereunder. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person, if
any, who controls the Company within the meaning of the Act, each officer of the
Company who has signed the Registration Statement, and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to this subparagraph (d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit, inquiry,
investigation or proceeding against such party in respect to which a claim for
contribution may be made against another party or parties under this
subparagraph (d), notify such party or parties from whom contribution may be
sought, but the omission so to notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have hereunder or otherwise than under this subparagraph (d), or to
the extent that such party or parties were not adversely affected by such
omission. The contribution agreement set forth above shall be in addition to any
liabilities which any indemnifying party may have at common law or otherwise.
8. Representations and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the Company submitted pursuant hereto,
shall be deemed to be representations, warranties and agreements at the Closing
Date and the Option Closing Date, as the case may be, and such representations,
warranties and agreements of the Company and the indemnity agreements contained
in Section 7 hereof, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter, the
Company, any controlling person of any Underwriter or the Company, and shall
survive termination of this Agreement or the issuance and delivery of the
Securities to the Underwriters and the Representative, as the case may be.
9. Effective Date.
(a) This Agreement shall become effective at 10:00
a.m., New York City time, on the next full business day following the date
hereof, or at such earlier time after the Registration Statement becomes
effective as the Representative, in its discretion, shall release the Shares for
sale to the public; provided, however, that the provisions of Sections 5, 7 and
10 of this Agreement shall at all times be effective. For purposes of this
Section 9, the Shares to be purchased hereunder shall be deemed to have been so
released upon the earlier of dispatch by the Representative of telegrams to
securities dealers releasing such shares for offering or the
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<PAGE>
release by the Representative for publication of the first newspaper
advertisement which is subsequently published relating to the Shares.
10. Termination.
(a) Subject to subsection (b) of this Section 10,
the Representative shall have the right to terminate this Agreement, after the
date hereof, (i) if any domestic or international event or act or occurrence has
materially disrupted, or in the Representative's opinion will in the immediate
future materially adversely disrupt the financial markets; or (ii) any material
adverse change in the financial markets shall have occurred; or (iii) if trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Boston Stock Exchange, the
Chicago Board of Trade, the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange, the Commission or any other government authority having
jurisdiction; or (iv) if trading of any of the securities of the Company shall
have been suspended, or any of the securities of the Company shall have been
delisted, on any exchange or in any over-the-counter market; or (v) if the
United States shall have become involved in a war or major hostilities, or if
there shall have been an escalation in an existing war or major hostilities or a
national emergency shall have been declared in the United States; or (vi) if a
banking moratorium has been declared by a state or federal authority; or (vii)
if a moratorium in foreign exchange trading has been declared; or (viii) if the
Company shall have sustained a loss material or substantial to the Company by
fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity
or malicious act which, whether or not such loss shall have been insured, will,
in the Representative's opinion, make it inadvisable to proceed with the
delivery of the Securities; or (viii) if there shall have occurred any outbreak
or escalation of hostilities or any calamity or crisis or there shall have been
such a material adverse change in the conditions or prospects of the Company, or
such material adverse change in the general market, political or economic
conditions, in the United States or elsewhere as in the Representative's
judgment would make it inadvisable to proceed with the offering, sale and/or
delivery of the Securities or (ix) if [Steven H. Plausteiner and Susan D.
Plausteiner] shall no longer serve the Company in their present capacity.
(b) If this Agreement is terminated by the
Representative in accordance with the provisions of Section 10(a) the Company
shall promptly reimburse and indemnify the Representative for all of their
actual out-of-pocket expenses, including the fees and disbursements of counsel
for the Underwriters (less amounts previously paid pursuant to Section 5(c)
above). Notwithstanding any contrary provision contained in this Agreement, if
this Agreement shall not be carried out within the time specified herein, or any
extension thereof granted to the Representative, by reason of any failure on the
part of the Company to perform any undertaking or satisfy any condition of this
Agreement by it to be performed or satisfied (including, without limitation,
pursuant to Section 6 or Section 12) then, the Company shall promptly reimburse
and indemnify the Representative for all of their actual out-of-pocket expenses,
including the fees and disbursements of counsel for the Underwriters. In
addition, the Company shall remain liable for all Blue Sky counsel fees (such
fees not to exceed $50,000) and expenses and filing fees. Notwithstanding any
contrary provision contained in this Agreement, any election hereunder or any
termination of this Agreement (including, without
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<PAGE>
limitation, pursuant to Sections 6, 10, 11 and 12 hereof), and whether or not
this Agreement is otherwise carried out, the provisions of Section 5 and Section
7 shall not be in any way affected by such election or termination or failure to
carry out the terms of this Agreement or any part hereof.
11. Substitution of the Underwriters. If one or more of the
Underwriters shall fail (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 6, Section 10 or
Section 12 hereof) to purchase the Securities which it or they are obligated to
purchase on such date under this Agreement (the "Defaulted Securities"), the
Representative shall have the right, within 24 hours thereafter, to make
arrangement for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Representative shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not
exceed 10% of the total number of Firm Shares to be purchased
on such date, the non-defaulting Underwriters shall be
obligated to purchase the full amount thereof in the
proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds
10% of the total number of Firm Shares, this Agreement shall
terminate without liability on the part of any non-defaulting
Underwriters.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of any default by such
Underwriter under this Agreement.
In the event of any such default which does not result in a
termination of this Agreement, the Representative shall have the right to
postpone the Closing Date for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements.
12. Default by the Company. If the Company shall fail at the
Closing Date or at any Option Closing Date, as applicable, to sell and deliver
the number of Shares which it is obligated to sell hereunder on such date, then
this Agreement shall terminate (or, if such default shall occur with respect to
any Option Shares to be purchased on an Option Closing Date, the Underwriters
may at the Representative's option, by notice from the Representative to the
Company, terminate the Underwriters' obligation to purchase Option Shares from
the Company on such date) without any liability on the part of any
non-defaulting party other than pursuant to Section 5, Section 7 and Section 10
hereof. No action taken pursuant to this Section shall relieve the Company from
liability, if any, in respect of such default.
13. Notices. All notices and communications hereunder, except
as herein otherwise specifically provided, shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the
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<PAGE>
Underwriters shall be directed to the Representative c/o Josephthal Lyon & Ross
Incorporated, 200 Park Avenue, 24th Floor, New York, New York 10166, Attention:
Scott A. Weisman, with a copy to Orrick, Herrington & Sutcliffe LLP, 666 Fifth
Avenue, New York, New York 10103, Attention: Lawrence B. Fisher, Esq. Notices to
the Company shall be directed to the Company at Snowdance, Inc., Route 44,
Brownsville, Vermont 05037, Attention: Steven H. Plausteiner, Chief Executive
Officer, with a copy to Sonnenschein Nath & Rosenthal, 1221 Avenue of the
Americas, New York, New York 10020, Attention: Dennis M. Berman, Esq. .
14. Parties. This Agreement shall inure solely to the benefit
of and shall be binding upon, the Underwriters, the Company and the controlling
persons, directors and officers referred to in Section 7 hereof, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provisions herein
contained. No purchaser of Securities from any Underwriter shall be deemed to be
a successor by reason merely of such purchase.
15. Construction. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
without giving effect to the choice of law or conflict of laws principles.
16. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which taken together shall be deemed to be one and the same instrument.
17. Entire Agreement; Amendments. This Agreement and the
Representative's Warrant Agreement constitute the entire agreement of the
parties hereto and supersede all prior written or oral agreements,
understandings and negotiations with respect to the subject matter hereof. This
Agreement may not be amended except in a writing, signed by the Representative
and the Company.
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If the foregoing correctly sets forth the understanding
between the Underwriters and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
SNOWDANCE, INC.
By:____________________________________
Steven H. Plausteiner
Chief Executive Officer
Confirmed and accepted as of
the date first above written.
JOSEPHTHAL LYON & ROSS INCORPORATED
For itself and as Representative
of the several Underwriters named
in Schedule A hereto.
By:____________________________________
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SCHEDULE A
================================================================================
Number of Firm Shares
Name of Underwriters to be Purchased
- --------------------------------------------------------------------------------
Josephthal Lyon & Ross Incorporated....................
- --------------------------------------------------------------------------------
--------
- --------------------------------------------------------------------------------
Total............................................. 800,000
========
================================================================================
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SNOWDANCE, INC.
800,000 Shares
Common Stock, $.__ par value
"QUALIFIED INDEPENDENT UNDERWRITER" AGREEMENT
---------------------------------------------
New York, New York
_____ __, 1997
The undersigned, Snowdance, Inc. (the "Company"), a Delaware corporation,
hereby agrees with _____________________ ("___________") as follows:
1. Introduction. The Company proposes to issue and sell to the
public, 800,000 shares of common stock, $.__ par value, of the Company (the
"Common Stock") (the "Offering"). Pursuant to Rule 2720 of the National
Association of Securities Dealers, Inc. (the "NASD") Conduct Rules ("Rule 2720")
the Company, as an affiliate of NASD members, may participate in the Offering
only if the price at which the Shares is to be offered to the public is no
higher than the price recommended by a "Qualified Independent Underwriter" (as
such phrase is defined by Rule 2720) who participates in the preparation of the
registration statement and prospectus relating to the Offering and exercises
customary standards of due diligence with respect thereto.
As hereinafter used, the term "Registration Statement" means
the registration statement on Form SB-2 (No. 333-____) (including the related
preliminary prospectus, financial statements, exhibits and all other documents
to be filed as a part thereof or incorporated therein) for the registration of
the offer and sale of the Shares under the Securities Act of 1933, as amended,
and the rules and regulations thereunder (collectively, the "Act"), filed with
he Securities and Exchange Commission (the "Commission"), and any amendments
thereto, and the term "Prospectus" means the prospectus including any
preliminary or final prospectus (including the form of final prospectus as filed
with the Commission) pursuant to Rule 424(b) under the Act and any amendments or
supplements thereto, to be used in connection with the Offering.
2. Rule 2720 Requirement. _________________ hereby confirms
its agreement as set forth in Rule 2720, and agrees to act as the "Qualified
Independent Underwriter" for the Offering. _________________ represents that, as
appropriate, it satisfies or will satisfy at the times designated in Rule 2720
the other requirements set forth therein.
3. Consent. _________________ hereby consents to be named in
the Registration Statement and Prospectus as having
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<PAGE>
acted as the "Qualified Independent Underwriter." Except as permitted by the
immediately preceding sentence or to the extent required by law, all references
to _________________ in the Registration Statement or Prospectus or in any other
filing, report, document, release or other communication prepared, issued or
transmitted in connection with the Offering by the Company or any corporation
controlling, controlled by or under common control with the Company, or by any
director, officer, employee, representative or agent of any thereof, shall be
subject to _________________'s prior written consent with respect to form and
substance.
4. Fees and Expenses. In consideration for _________________
acting as Qualified Independent Underwriter for the Offering, the Company hereby
agrees to pay _________________ a fee of [________________ dollars] ($[______])
[and issue _____ warrants to purchase _____ shares of Common Stock on the first
closing of the sale of the Shares offered by the Prospectus. Such warrants shall
have a five-year duration and an exercise price equal to 120% of the initial
public offering price per share.] If, for whatever reason, it is determined that
the Offering shall not proceed, _________________ shall not be entitled to
receive the above-mentioned fee [and warrants] but shall be paid in full for its
expenses and any amount payable to _________________ under Section 7 hereof
promptly following any such determination.
5. Material Facts. The Company represents and warrants to
_________________ that at the time the Registration Statement or any amendment
or supplement thereto becomes effective, the Registration Statement and, at the
time the Prospectus is filed with the Commission (including any preliminary
prospectus and the form of prospectus filed with the Commission pursuant to Rule
424(b)) and at all times subsequent thereto, to and including the date on which
payment for and delivery of the Shares (such date being referred to herein as
the "Closing Date"), the Prospectus (as amended or supplemented if it shall have
been so amended or supplemented) will contain all material statements which are
required to be stated therein in accordance with the Act and will conform to all
other requirements of the federal securities laws, and will not, on such dates,
include any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Company further represents and warrants that any further filing,
report, document, release or communication which in any way refers to
_________________ or to the services to be performed by it pursuant to this
Agreement will not contain any untrue or misleading statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
6. Availability of Information. The Company hereby agrees to
provide _________________, at the Company's expense,
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all information and documentation with respect to the Company's business,
financial condition and other matters as _________________ may deem relevant,
including, without limitation, copies of all correspondence with the Commission,
certificates of its officers, opinions of its counsel and comfort letters from
its auditors. The above mentioned certificates, opinions of counsel and comfort
letters shall be provided to _________________ as it may request on the
effective date of the Registration Statement and on the closing date of the
Offering. The Company will make reasonably available to _________________, its
auditors, counsel, and officers and directors to discuss with _________________
any aspect of the Company or its business which _________________ may deem
relevant. In addition, the Company, at _________________'s request, will cause
to be delivered to _________________, copies of any certificates, opinions,
letters and reports and shall cause the person issuing such certificates,
opinions, letters or reports to authorize _________________ to rely thereon to
the same extent as if addressed directly to _________________. The Company
represents and warrants to _________________ that all such information and
documentation provided pursuant to this paragraph 6 will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading. In addition, the Company will promptly
advise _________________ of all telephone conversations with the Commission
which relate to or may affect the Offering.
7. Indemnification.
(a) Subject to the conditions set forth below, the Company
hereby agrees that it will indemnify and hold _________________ and each
officer, partner, employee or representative of _________________ and each
person controlling, controlled by or under common control with _________________
within the meaning of Section 15 of the Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or the rules and
regulations thereunder (individually, an "Indemnified Person") harmless from and
against any and all loss, claim, damage, liability, cost or expense whatsoever
(including, but not limited to, any and all legal fees and other expenses and
disbursements incurred in connection with investigating, preparing to defend or
defending any action, suit or proceeding, including any inquiry or
investigation, commenced or threatened, or any claim whatsoever or in appearing
or preparing for appearance as a witness in any action, suit or proceeding
including any inquiry, investigation or pretrial proceeding such as a
deposition) to which such Indemnified Person may become subject under the Act,
the Exchange Act, or other federal or state statutory law or regulation at
common law or otherwise, arising out of, based upon, or in any way related or
attributed to (i) this Agreement, (ii) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
Prospectus or any other filing report, document, release or communication,
whether oral or written referred to in
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<PAGE>
paragraph 5 hereof or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (iii) any application or other document executed by the
Company or based upon written information furnished by the Company filed in any
jurisdiction in order to qualify the Shares under the securities or Blue Sky
laws thereof, or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (iv) the breach of any representation or warranty made by the
Company in this Agreement, or (v) the performance by _________________ as the
"Qualified Independent Underwriter" pursuant to this Agreement unless as a
direct result of _________________'s gross negligence, bad faith or willful
misfeasance. The Company further agrees that upon demand by an Indemnified
Person at any time or from time to time, they will promptly reimburse such
Indemnified Person for, any loss, claim, damage, liability, cost or expense
as to which the Company has indemnified such person pursuant hereto.
Notwithstanding the foregoing provisions of this paragraph 7, any such payment
or reimbursement by the Company of fees, expenses or disbursements incurred by
an Indemnified Person in any proceeding in which a final judgment by a court of
competent jurisdiction (after all appeals or the expiration of time to appeal)
is entered against such Indemnified Person as a direct result of such person's
gross negligence, bad faith or willful misfeasance will be promptly repaid to
the Company.
(b) Promptly after receipt by an Indemnified Person under
paragraph (a) above of notice of the commencement of any action, such
Indemnified Person will, if a claim in respect thereof is to be made against the
Company under paragraph (a), notify the Company in writing of the commencement
thereof; but the omission to so notify the Company will not relieve the Company
from any liability which either may have to any Indemnified Person otherwise
than under this paragraph 7. In case any such action is brought against any
Indemnified Person, and such Indemnified Person notifies the Company of the
commencement thereof, the Company will be entitled to participate therein and,
to the extent that they may elect by written notice delivered to the Indemnified
Person promptly after receiving the aforesaid notice from such Indemnified
Person, to assume the defense thereof with counsel reasonably satisfactory to
such Indemnified Person: provided, however, that if the defendants in any such
action include both the Indemnified Person and the Company or any corporation
controlling, controlled by or under common control with the Company, or any
director, officer, employee, representative or agent of any thereof, and the
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it which are different from or additional to those
available to such other defendant, the Indemnified Person shall have the right
to select separate counsel to represent it. Upon receipt by the Indemnified
Person of notice from the Company setting forth the Company's irrevocable
election
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<PAGE>
to assume the defense of such action and approval by the Indemnified Person of
such counsel, the Company will not be liable to such Indemnified Person under
this paragraph 7 for any fees of counsel subsequently incurred by such
Indemnified Person in connection with the defense thereof (other than the
reasonable costs of investigation subsequently incurred by such Indemnified
Person) unless (x) the Indemnified Person shall have employed separate counsel
in accordance with the provision of the next preceding sentences, (y) the
Company, within a reasonable time after notice of commencement of the action,
shall not have employed counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person, or (z) the Company shall have
authorized in writing the employment of counsel for the Indemnified Person at
the expense of the Company, and except that, if clause (x) or (z) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (x) or (z).
(c) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) of this
paragraph 7 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company to _________________ on grounds of
policy or otherwise, the Company and _________________ shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigation or defending of
same) to which the Company and _________________ may be subject in such
proportion so that _________________ is responsible for that portion represented
by the percentage that its fee under this Agreement bears to the aggregate
public offering price appearing on the cover page of the Prospectus and the
Company is responsible for the balance, except as the Company may otherwise
agree to reallocate a portion of such liability with respect to such balance
with any other person; provided, however, that (y) in no case shall
_________________ be responsible for any amount in excess of the fee set forth
in paragraph 4 above and (z) no person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the Act shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this paragraph (c), any person controlling, controlled by or under
common control with _________________, or any partner, director, officer,
employee, representative or any agent of any thereof, shall have the same rights
to contribution as _________________ and each person who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
each officer of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as the
Company, subject in each case to clause (y) of this paragraph (c). Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against the other party under this
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paragraph (c), notify such party from whom contribution may be sought, but the
omission to so notify such party shall not relieve the party from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (c). The indemnity and
contribution agreements contained in this paragraph 7 shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of
any Indemnified Person or any termination of this Agreement.
8. Authorization by Company. The Company represents and
warrants to _________________ that this Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company.
9. Notice. Whenever notice is required to be given pursuant to
this Agreement, such notice shall be in writing and shall be mailed by first
class mail, postage prepaid, addresses (a) if to _________________, at
___________________, Attention: _____________ and (b) if to the Company, at
Route 44, Brownsville, Vermont 05037, Attention: Steven H. Plausteiner.
10. Governing Law. This Agreement shall be construed (both as
to validity and performance) and enforced in accordance with and governed by the
laws of the State of New York applicable to agreements made and to be performed
wholly within such jurisdiction.
11. Parties. This Agreement shall inure solely to the benefit
of and shall be binding upon, _________________ and the Company and the
controlling persons, directors and officers referred to in paragraph 7 hereof,
and their respective successors, legal representative and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained.
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If the foregoing correctly sets forth the understanding between
_________________ and the Company, please so indicate in the space provided
below for that purpose whereupon this letter shall constitute a binding
agreement between us.
SNOWDANCE, INC. [QUALIFIED INDEPENDENT
UNDERWRITER]
By:______________________________ By:______________________________
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CERTIFICATE OF INCORPORATION
OF
SNOWDANCE, INC.
* * * * *
ARTICLE ONE. The name of the Corporation is Snowdance, Inc.
ARTICLE TWO. The address of its registered office in the State of
Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle,
Zip Code 19801. The name of its registered agent at such address is Corporation
Trust Company.
ARTICLE THREE.The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which corporations may
be organized under the Delaware General Corporation Law.
ARTICLE FOUR. 1. The aggregate number of shares of stock which the
Corporation shall be authorized to issue is five million (5,000,000), of which
100,000 shares of the par value of $.01 per share shall be designated "Preferred
Stock" and 4,900,000 shares of the par value of $.001 per share shall be
designated "Common Stock".
2. Authority is hereby expressly granted to the Board of
Directors of the Corporation (or a committee thereof designated by the Board of
Directors pursuant to the by-laws of the Corporation, as amended from time to
time (the "By-Laws")) to issue the Preferred Stock from time to time as
Preferred Stock of any series and to declare and pay dividends thereon in
accordance with the terms thereof and, in connection with the creation of each
such series, to fix by the resolution or resolutions providing for the issue of
shares thereof, the number of shares of such series, and the designations,
powers, preferences, and rights (including voting and conversion rights), and
the qualifications, limitations, and
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restrictions, of such series, to the fullest extent now or hereafter permitted
by the laws of the State of Delaware.
ARTICLE FIVE. The name and mailing address of the incorporator is as
follows:
NAME MAILING ADDRESS
Jeffrey S. Isaacs Sonnenschein Nath & Rosenthal
1221 Avenue of the Americas
24th Floor
New York, New York 10020
ARTICLE SIX. The Corporation is to have perpetual existence.
ARTICLE SEVEN.In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to adopt,
amend or repeal the By-Laws.
ARTICLE EIGHT.Elections of directors need not be by written ballot
unless the by-laws of the Corporation shall so provide.
ARTICLE NINE. 1. Limitation on Liability. A director of the Corporation
shall not be personally liable to the Corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of Delaware General Corporation Law, as the same exists or may
hereafter be amended, or (iv) for any transaction from which the director
derived an improper personal benefit. If the Delaware General Corporation Law
hereafter is amended to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of
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the Corporation, in addition to the limitation on personal liability provided
herein, shall be eliminated or limited to the fullest extent permitted by the
amended Delaware General Corporation Law. Any repeal or modification of this
subsection 1 by the stockholders of the Corporation shall be prospective only,
and shall not adversely affect any limitation on the personal liability of a
director of the Corporation existing at the time of such repeal or modification.
2. Indemnification and Insurance. (a) Each person who was or is made a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the Corporation or is or was serving at the request of the Corporation as a
director or officer of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in an official
capacity as a director or officer or in any other capacity while serving as a
director or officer, shall be indemnified and held harmless by the Corporation
to the fullest extent authorized by the Delaware General Corporation Law as the
same exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than said law permitted the Corporation to
provide prior to such amendment), against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) reasonably incurred or suffered by such person
in connection therewith and such indemnification shall continue as to a person
who has ceased to
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be a director or officer and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that except as provided in
subsection 2(b) of this Article Nine with respect to proceedings seeking to
enforce rights to indemnification, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation. The right to
indemnification conferred in this subsection 2 shall be a contract right and
shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that if the Delaware General Corporation Law requires, an advance
payment of expenses incurred by a director or officer in his or her capacity as
a director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the Corporation of an undertaking by or on behalf of such director
or officer, to repay all amounts so advanced if it shall be finally adjudicated
that such director or officer is not to be indemnified under this subsection 2
or otherwise.
(b) If a claim under subsection 2(a) is not paid in full by the
Corporation within thirty days after a written claim has been received by the
Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been
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tendered to the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the Delaware General Corporation Law for
the Corporation to indemnify the claimant for the amount claimed. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel or stockholders) to have made a determination prior to the commencement
of such action that indemnification of the claimant is proper in the
circumstances because the claimant has met the applicable standard of conduct
set forth in the Delaware General Corporation Law, nor an actual determination
by the Corporation (including its Board of Directors, independent legal counsel
or stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
(c) The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
subsection 2 shall not be exclusive of any other right which any person may have
or hereafter acquire under any statute, provision of the Certificate of
Incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
(d) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the Delaware General Corporation Law.
(e) The Corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification, and to the advancement
of expenses incurred
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in defending any proceeding to any employee or agent of the Corporation to the
fullest extent of the provisions of this subsection 2 with respect to the
indemnification and advancement of expenses of directors and officers of the
Corporation.
(f) For purposes of this subsection 2, the term "Corporation" shall
include, in addition to the Corporation, any constituent corporation absorbed in
a consolidation or merger with the Corporation, to the extent such constituent
corporation would have had power and authority to indemnify its directors,
officers, employees and agents if its separate existence had survived.
ARTICLE TEN. The Corporation reserves the right to amend, alter, change
or repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders, directors, or any other person herein are granted subject to this
reservation.
I, the Undersigned, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the Delaware General Corporation
Law, do make this certificate, hereby declaring and certifying that this is my
act and deed and the facts herein stated are true, and accordingly have hereunto
set my hand this 6th day of August, 1997.
JEFFREY S. ISAACS
------------------------------
JEFFREY S. ISAACS, Incorporator
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BY-LAWS
OF
SNOWDANCE, INC.
ARTICLE I
OFFICES
SECTION 1. Registered Office. The registered office shall be in the City
of Wilmington, County of New Castle, State of Delaware.
SECTION 2. Other Offices. The corporation may also have offices at such
other places both within and without the State of Delaware as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Location of Meetings. The meetings of the stockholders for
the election of directors may be held in the Town of Brownsville, State of
Vermont or at such place as may be fixed from time to time by the board of
directors, or at such other place either within or without the State of Delaware
as shall be designated from time to time by the board of directors and stated in
the notice of the meeting. Meetings of stockholders for any other purpose may be
held at such time and place, within or without the State of Delaware, as shall
be stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
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SECTION 2. Annual Meeting. The annual meetings of the stockholders shall
be held on the date as determined by the directors of the corporation and if a
legal holiday, then on the next secular day following, at such time as shall be
designated from time to time by the board of directors and stated in the notice
of the meeting, at which they shall elect by a plurality vote a board of
directors, and transact such other business as may properly be brought before
the meeting.
SECTION 3. Notice of Annual Meeting. Written notice of the annual
meeting stating the place, date and hour of the meeting shall be given to each
stockholder entitled to vote at such meeting not less than ten nor more than
sixty days before the date of the meeting.
SECTION 4. Stock Ledgers. The officer who has charge of the stock ledger
of the corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole
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time thereof, and may be inspected by any stockholder who is present.
SECTION 5. Special Meetings. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the chairman and shall be called
by the chairman, chief operating officer or secretary at the request, in
writing, of a majority of the board of directors, or at the request in writing
of stockholders owning shares of capital stock equal to at least 50% of the
entire capital stock of the corporation issued and outstanding and entitled to
vote. Such request shall state the purpose or purposes of the proposed meeting.
SECTION 6. Notice of Special Meetings. Written notice of a special
meeting stating the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given not less than ten nor
more than sixty days before the date of the meeting, to each stockholder
entitled to vote at such meeting.
SECTION 7. Business Transacted at Special Meetings. Business transacted
at any special meeting of stockholders shall be limited to the purposes stated
in the notice.
SECTION 8. Quorum. The holders of a majority of the capital stock of the
corporation issued and outstanding and entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute or by the certificate of incorporation. If,
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however, such quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented any business may be transacted which might have been
transacted at the meeting as originally notified. If the adjournment is for more
than thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
SECTION 9. Voting. Unless otherwise provided in the certificate of
incorporation, each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder. When a quorum is present at any
meeting, the vote of the holders of a majority of the stock having voting power
present in person or represented by proxy shall decide any question brought
before such meeting, unless the question is one upon which by express provision
of the statutes or of the certificate of incorporation, a different vote is
required in which case such express provision shall govern and control the
decision of such question.
SECTION 10. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to
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corporate action in writing may authorize another person to act for him as his
proxy, but no proxy shall be voted on after three years from its date, unless
the proxy provides for a longer period.
SECTION 11. Actions Without a Meeting. Unless otherwise provided in the
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action which may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
SECTION 1. Members; Number; Term. The number of directors which shall
constitute the whole board shall be not less than one (1) nor more than fifteen
(15). Within the limits above specified, the number of directors shall be
determined by resolution of the board of directors, or by the stockholders at
the annual meeting. The directors shall be elected at the annual
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meeting of the stockholders, except as provided in Section 2 of this Article,
and each director elected shall hold office until his successor is elected and
qualified. Directors need not be stockholders.
SECTION 2. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office until
the next annual election and until their successors are duly elected and shall
qualify, unless sooner displaced. If there are no directors in office, then an
election of directors may be held in the manner provided by statute. If, at the
time of filling any vacancy or any newly created directorship, the directors
then in office shall constitute less than a majority of the whole board (as
constituted immediately prior to any such increase), the Court of Chancery may,
upon application of any stockholder or stockholders holding at least ten percent
of the total number of the shares of capital stock at the time outstanding
having the right to vote for such directors, summarily order an election to be
held to fill any such vacancies or newly created directorships, or to replace
the directors chosen by the directors then in office.
SECTION 3. Powers. The business of the corporation shall be managed by
or under the direction of its board of directors which may exercise all such
powers of the corporation and do all such lawful acts and things as are not by
statute or by the
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certificate of incorporation or by these by-laws directed or required to be
exercised or done by the stockholders.
SECTION 4. Location of Meetings. The board of directors of the
corporation may hold meetings, both regular and special, either within or
without the State of Delaware.
SECTION 5. Annual Meetings. An annual board meeting shall be held
without notice immediately after and at the same place as the annual meeting of
stockholders or at such place as shall be designated by the board of directors.
SECTION 6. Regular Meetings. Regular meetings of the board of directors
may be held without notice at such time and at such place as shall from time to
time be determined by the board.
SECTION 7. Special Meetings. Special meetings of the board may be called
by the chairman on two (2) days' notice to each director, either personally or
by mail or by telegram; special meetings shall be called by the chairman or the
secretary in like manner and on like notice on the written request of two
directors.
SECTION 8. Quorum. At all meetings of the board, a majority of the
members of the board shall constitute a quorum for the transaction of business
and the act of a majority of the directors present at any meeting at which there
is a quorum shall be the act of the board of directors, except as may be
otherwise specifically provided by statute or by the certificate of
incorporation. If a quorum shall not be present at any meeting of the board of
directors the directors present thereat may
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adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
SECTION 9. Actions Without a Meeting. Unless otherwise restricted by the
certificate of incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting, if all members of the board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the board or committee.
SECTION 10. Participation by Telephone. Unless otherwise restricted by
the certificate of incorporation or these by-laws, members of the board of
directors, or any committee designated by the board of directors, may
participate in a meeting of the board of directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
SECTION 11. Committees.
(a) The board of directors may, by resolution passed by a
majority of the whole board, designate one or more committees, each committee to
consist of one or more of the directors of the corporation. A majority of the
director members shall constitute a quorum at any meeting of said committee or
committees. The board may designate one or more directors as
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alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee.
(b) In the absence or disqualification of a member of a
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he, she or they constitute a quorum,
may unanimously appoint another member of the board of directors to act at the
meeting in the place of any such absent or disqualified member.
(c) Any such committee, to the extent provided in the resolution
of the board of directors, shall have and may exercise all the powers and
authority of the board of directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be
affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to amending the certificate of incorporation,
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
by-laws of the corporation; and, unless the resolution or the certificate of
incorporation expressly so provides, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the board of directors.
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(d) Each committee shall keep regular minutes of its meetings and
report the same to the board of directors when required.
SECTION 12. Compensation of Directors. Unless otherwise restricted by
the certificate of incorporation or these by-laws, the board of directors shall
have the authority to fix the compensation of directors. The directors may be
paid their expenses, if any, of attendance at each meeting of the board of
directors and may be paid a fixed sum for attendance at each meeting of the
board of directors or a stated salary as director or any other compensation as
the board of directors shall fix. No such payment shall preclude any director
from serving the corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed like
compensation for attending committee meetings.
SECTION 13. Removal of Directors. Unless otherwise restricted by the
certificate of incorporation or by law, any director or the entire board of
directors may be removed, with or without cause, by the holders of a majority of
shares entitled to vote at an election of directors.
ARTICLE IV
NOTICES
SECTION 1. Notices. Whenever, under the provisions of the statutes or of
the certificate of incorporation or of these by-laws, notice is required to be
given to any director or stockholder, it shall not be construed to mean personal
notice,
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but such notice may be given in writing, by mail, addressed to such director or
stockholder, at his address as it appears on the records of the corporation,
with postage thereon prepaid, and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States mail. Notice to
directors may also be given by telegram or facsimile, with a copy sent by mail.
SECTION 2. Waiver of Notice. Whenever any notice is required to be given
under the provisions of the statutes or of the certificate of incorporation or
of these by-laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto. Attendance of a person at any meeting shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened.
ARTICLE V
OFFICERS
SECTION 1. Number. The officers of the corporation shall be a chairman
of the board, a chief executive officer, a chief operating officer, a chief
financial officer, a secretary, and such vice presidents, assistant treasurers,
assistant secretaries or other officers as may be elected by the board of
directors. Any two or more offices may be held by the same person.
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SECTION 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the board of directors at the first meeting of the
board of directors held after each annual meeting of stockholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as conveniently may be. Vacancies may be filled or new
offices created and filled at any meeting of the board of directors. Each
officer shall hold office until his or her successor shall have been duly
elected and shall have qualified or until his or her death or until he or she
shall resign or shall have been removed in the manner hereinafter provided.
Election of an officer shall not of itself create contract rights.
SECTION 3. Removal. Any officer elected or appointed by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
SECTION 4. Chairman of the Board. The chairman of the board shall be the
chief executive officer of the corporation, shall preside at all meetings of the
stockholders and board of directors, and subject to the direction of the board
of directors, shall in general supervise and control all of the business and
affairs of the corporation and see that all orders and resolutions of the board
of directors are carried into effect. He may sign certificates for shares of the
corporation,
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any deeds, mortgages, bonds, contracts, tax returns, tax elections or other
instruments which the board of directors have authorized to be executed, or
which are in the ordinary course of business of the corporation. He may vote,
either in person or by proxy, all of the shares of the capital stock of any
company which the corporation owns or is otherwise entitled to vote at any and
all meetings of the stockholders of such company and shall have the power to
accept or waive notice of such meetings. In the absence or disability of the
chief operating officer, the chairman of the board shall perform the duties and
exercise the powers of the chief operating officer.
SECTION 5. Chief Operating Officer. The chief operating officer subject
to the direction of the chairman of the board and the board of directors, shall
exercise supervision and control over the daily operations of the corporation
and shall perform such other duties and have such other powers as the chairman
of the board or the board of directors may from time to time determine. He may
sign certificates for shares of the corporation, any deeds, mortgages, bonds,
contracts or other instruments which the board of directors have authorized to
be executed, or which are in the ordinary course of business of the corporation.
Subject to the direction of the chairman of the board and the board of
directors, he may vote, either in person or by proxy, all of the shares of the
capital stock of any company which the corporation owns or is otherwise entitled
to vote at any and all meetings of the stockholders of such company
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and shall have the power to accept or waive notice of such meetings.
SECTION 6. Chief Financial Officer. The chief financial officer shall be
the principal accounting and financial officer of the corporation. He/she shall:
(a) have charge of and be responsible for the maintenance of adequate books of
account for the corporation; (b) have charge and custody of all funds and
securities of the corporation, and be responsible therefor and for the receipt
and disbursement thereof; and (c) perform all the duties incident to the office
of chief financial officer and such other duties as from time to time may be
assigned to her by the chairman or by the board of directors. If required by the
board of directors, the chief financial officer shall give a bond for the
faithful discharge of his or her duties in such sum and with such surety or
sureties as the board of directors may determine.
SECTION 7. The Vice-President(s). The vice-president(s), if any, shall
assist the chief operating officer in the discharge of his or her duties as the
chief operating officer may direct and shall perform such other duties as from
time to time may be assigned to him or her by the chairman of the board, by
the chief operating officer or by the board of directors. Except in those
instances in which the authority to execute is expressly delegated to another
officer or agent of the corporation or a different mode of execution is
expressly prescribed by the board of directors or these by-laws, the vice-
president (or each of them if there are more than one) may execute for the
corporation certificates for its shares and any contracts, deeds, mortgages,
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bonds or other instruments which the board of directors has authorized to be
executed, and he or she may accomplish such execution either under or without
the seal of the corporation and either individually or with the secretary, any
assistant secretary, or any other officer thereunto authorized by the board of
directors, according to the requirements of the form of the instrument.
SECTION 8. The Secretary. The secretary shall: (a) record the minutes of
the stockholders' and of the board of directors' meetings in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these by-laws or as required by law; (c) be custodian of
the corporate records and of the seal of the corporation; (d) keep a register of
the post-office address of each stockholder which shall be furnished to the
secretary by such stockholder; (e) sign with the chairman of the board, chief
operating officer, or a vice-president, or any other officer thereunto
authorized by the board of directors, certificates for shares of the
corporation, the issue of which shall have been authorized by the board of
directors, and any contracts, deeds, mortgages, bonds, or other instruments
which the board of directors has authorized to be executed, according to the
requirements of the form of the instrument, except when a different mode of
execution is expressly prescribed by the board of directors or these by-laws or
in the ordinary course of business; (f) have general charge of the stock
transfer books of the corporation; (g) have authority to certify the by-laws,
resolutions of the stockholders and board
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of directors and committees thereof, and other documents of the corporation as
true and correct copies thereof, and (h) perform all duties incident to the
office of secretary and such other duties as from time to time may be assigned
to her by the chairman of the board, chief operating officer or by the board of
directors.
SECTION 9. Assistant Treasurers and Assistant Secretaries. The assistant
treasurers and assistant secretaries shall perform such duties as shall be
assigned to them by the chief financial officer or the secretary, respectively,
or by the chairman of the board, chief operating officer or the board of
directors. The assistant secretaries may sign with the chairman of the board,
chief operating officer, or a vice-president, or any other officer thereunto
authorized by the board of directors, certificates for shares of the
corporation, the issue of which shall have been authorized by the board of
directors, and any contracts, deeds, mortgages, bonds, or other instruments
which the board of directors has authorized to be executed, according to the
requirements of the form of the instrument, except when a different mode of
execution is expressly prescribed by the board of directors or these by-laws.
The assistant treasurers shall respectively, if required by the board of
directors, give bonds for the faithful discharge of their duties in such sums
and with such sureties as the board of directors shall determine.
SECTION 10. Salaries. The salaries of the officers shall be fixed from
time to time by the board of directors and no
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officer shall be prevented from receiving such salary by reason of the fact that
he or she is also a director of the corporation.
ARTICLE VI
CERTIFICATES OF STOCK
SECTION 1. Form of Certificates. Every holder of stock in the
corporation shall be entitled to have a certificate, signed by, or in the name
of the corporation by the chairman of the board or a vice-president and the
chief financial officer or an assistant treasurer or the secretary or an
assistant secretary of the corporation, certifying the number of shares owned by
him or her in the corporation.
Certificates may be issued for partly paid shares and in such case upon
the face or back of the certificates issued to represent any such partly paid
shares, the total amount of the consideration to be paid therefor, and the
amount paid thereon shall be specified.
SECTION 2. Classes of Securities. If the corporation shall be authorized
to issue more than one class of stock or more than one series of any class, the
powers, designations, preferences and relative, participating, optional or other
special rights of each class of stock or series thereof and the qualification,
limitations or restrictions of such preferences and/or rights shall be set forth
in full or summarized on the face or back of the certificate which the
corporation shall issue to represent such class or series of stock, provided
that, except as otherwise provided in section 202 of the General Corporation Law
of
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Delaware, in lieu of the foregoing requirements, there may be set forth on the
face or back of the certificate which the corporation shall issue to represent
such class or series of stock, a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights.
SECTION 3. Signatures. Any of or all the signatures on the certificate
may be facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if he or she were such officer, transfer agent or registrar at the date of
issue.
SECTION 4. Lost, Stolen or Destroyed Certificates. The board of
directors may direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the corporation alleged to
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates, the
board of directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate
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or certificates, or his or her legal representative, to give the corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
SECTION 5. Transfer of Stock. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
SECTION 6. Transfer Agent. The board of directors may appoint one or
more transfer agents or transfer clerks and one or more registrars, and may
require all certificates for shares to bear the signature or signatures of any
of them. If a transfer agent or transfer agents are appointed, one transfer
agent shall be designated to maintain a stock ledger listing the names and
addresses and the holders of all issued stock of the corporation.
SECTION 7. Stock Ledger. An officer of the corporation, or a designated
transfer agent, shall maintain a stock ledger listing the names and addresses of
the holders of all issued stock of the corporation, the number of shares held by
each, the certificate numbers representing such stock and the date of issue of
the certificates. If appointed, the registrar, or otherwise an officer of the
corporation shall maintain a stock register listing the total number of shares
of each class which the
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corporation is authorized to issue, and the total number of shares actually
issued. The stock ledger and stock register shall constitute the stock transfer
books of the corporation, but as between the two, the stock ledger maintained by
the transfer agent or officer of the corporation shall be considered the
official list of stockholders of record of the corporation. The name and address
of each stockholder of record as it shall appear on the stock ledger shall be
conclusive evidence as to who are the stockholders entitled to receive notice of
meetings and to vote at such meetings and to receive dividends and the other
distributions made by the corporation. Stockholders are responsible for
notifying the transfer agent, or corporation if no transfer agent is appointed,
in writing, of any change of name or address, and failure to do so will relieve
the corporation, its officers, directors and agents, and its transfer agent and
registrar, of liability for failure to send notices or pay dividends or other
distributions to a name or address other than the name or address appearing on
the stock ledger maintained by the transfer agent, or an officer of the
corporation.
SECTION 8. Fixing Record Date. In order that the corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action,
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the board of directors may fix, in advance, a record date, which shall not be
more than sixty nor less than ten days before the date of such meeting, nor more
than sixty days prior to any other action. A determination of stockholders of
record entitled to notice of or to vote at a meeting of stockholders shall apply
to any adjournment of the meeting; provided, however, that the board of
directors may fix a new record date for the adjourned meeting.
SECTION 9. Registered Stockholders. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VII
INDEMNIFICATION
SECTION 1. General. Each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the corporation or is or was serving at the request of the corporation as a
director or officer of another corporation or of a partnership, joint venture,
trust or other enterprise,
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including service with respect to employee benefit plans, whether the basis of
such proceeding is alleged action in an official capacity as a director or
officer or in any other capacity while serving as a director or officer, shall
be indemnified and held harmless by the corporation to the fullest extent
authorized by the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the corporation to provide broader
indemnification rights than said law permitted the corporation to provide prior
to such amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to be a director or officer and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that except as provided in
Section 2 of this Article VII with respect to proceedings seeking to enforce
rights to indemnification, the corporation shall indemnify any such person
seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the board of directors of the corporation. The right to
indemnification conferred in this Article VII shall be a contract right and
shall include the right to be paid by the corporation the expenses incurred in
defending any such proceeding in advance of its final disposition;
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provided, however, that if the General Corporation Law of the State of Delaware
requires, an advance payment of expenses incurred by a director or officer in
his or her capacity as a director or officer (and not in any other capacity in
which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) shall be
made only upon delivery to the corporation of an undertaking by or on behalf of
such director or officer, to repay all amounts so advanced if it shall be
finally adjudicated that such director or officer is not to be indemnified under
this Article VII or otherwise.
SECTION 2. Expenses. If a claim under Section 1 of this Article VII is
not paid in full by the corporation within thirty days after a written claim has
been received by the corporation, the claimant may at any time thereafter bring
suit against the corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the corporation) that the
claimant has not met the standards of conduct which make it permissible under
the General Corporation Law of the State of Delaware for the corporation to
indemnify the claimant for the amount claimed. Neither the failure of the
corporation (including its board of directors, independent legal
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counsel or stockholders) to have made a determination prior to the commencement
of such action that indemnification of the claimant is proper in the
circumstances because the claimant has met the applicable standard of conduct
set forth in the General Corporation Law of the State of Delaware, nor an actual
determination by the corporation (including its board of directors, independent
legal counsel or stockholders) that the claimant has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that the claimant has not met the applicable standard of conduct.
SECTION 3. Non-Exclusive. The right to indemnification and the payment
of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article VII shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the Certificate of Incorporation, by-law, agreement, vote of
stockholders or disinterested directors or otherwise.
SECTION 4. Insurance. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under the General Corporation Law of the State of Delaware.
SECTION 5. Employees and Agents. The corporation may, to the extent
authorized from time to time by the board of
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directors, grant rights to indemnification, and to the advancement of expenses
incurred in defending any proceeding to any employee or agent of the corporation
to the fullest extent of the provisions of this Article VII with respect to the
indemnification and advancement of expenses of directors and officers of the
corporation.
SECTION 6. Corporation Defined. For purposes of this Article VII, the
term "corporation" shall include, in addition to the corporation, any
constituent corporation absorbed in a consolidation or merger with the
corporation, to the extent such constituent corporation would have had power and
authority to indemnify its directors, officers, employees and agents if its
separate existence had survived.
ARTICLE VIII
SECTION 1. Dividends.
(a) Dividends upon the capital stock of the corporation, subject
to the provisions of the certificate of incorporation, if any, may be declared
by the board of directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the certificate of incorporation.
(b) Before payment of any dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to
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meet contingencies, or for equalizing dividends, or for repairing or maintaining
any property of the corporation, or for such other purpose as the directors
shall think conducive to the interest of the corporation, and the directors may
modify or abolish any such reserve in the manner in which it was created.
SECTION 2. Annual Statement. The board of directors shall present at
each annual meeting, and at any special meeting of the stockholders when called
for by vote of the stockholders, a full and clear statement of the business and
condition of the corporation.
SECTION 3. Signatures. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
SECTION 4. Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
SECTION 5. Seal. The corporation may adopt a corporate seal, which shall
have inscribed thereon the name of the corporation, the year of its organization
and the words "Corporate Seal, Delaware". The seal may be used by causing it or
a facsimile thereof to be impressed or affixed or reproduced or otherwise.
SECTION 6. Amendments. These by-laws may be altered or repealed at any
regular or special meeting of the stockholders or of the board of directors.
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OH&S DRAFT
[FORM OF REPRESENTATIVES' WARRANT AGREEMENT]
[SUBJECT TO ADDITIONAL REVIEW]
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SNOWDANCE, INC.
AND
JOSEPHTHAL LYON & ROSS INCORPORATED
REPRESENTATIVE'S
WARRANT AGREEMENT
DATED AS OF ________, 1997
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<PAGE>
<PAGE>
REPRESENTATIVE'S WARRANT AGREEMENT dated as of _______, 1997 between
SNOWDANCE, INC., a Delaware corporation (the "Company") and JOSEPHTHAL LYON &
ROSS INCORPORATED (hereinafter referred to variously as the "Holder" or the
"Representative").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue to the Representative or their
designees warrants ("Warrants") to purchase up to an aggregate 80,000 shares of
common stock of the Company ("Common Stock"); and
WHEREAS, the Representative has agreed pursuant to the underwriting
agreement (the "Underwriting Agreement") dated as of the date hereof among the
Representative, as the Representative of the Several Underwriters named in
Schedule A thereto, and the Company to act as the Representative in connection
with the Company's proposed public offering of up to 800,000 shares of Common
Stock at a public offering price of $_____ per share of Common Stock (the
"Public Offering"); and
WHEREAS, the Warrants to be issued pursuant to this Agreement will be
issued on the Closing Date (as such term is defined in the Underwriting
Agreement) by the Company to the Representative in consideration for, and as
part of the Representative's compensation in connection with, the Representative
acting as the Representative pursuant to the Underwriting Agreement;
NOW, THEREFORE, in consideration of the premises, the payment by the
Representative to the Company of an aggregate [eighty
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<PAGE>
dollars ($80.00)], the agreements herein set forth and other good and valuable
consideration, hereby acknowledged, the parties hereto agree as follows:
1. Grant. The Representative is hereby granted the right to purchase, at
any time from _______, 1998 [one year from the effective date of the
registration statement], until 5:30 P.M., New York time, on ____________, 2002
[five years from the effective date of the registration statement], up to an
aggregate of $80,000 shares of Common Stock (the "Shares") at an initial
exercise price (subject to adjustment as provided in Section 8 hereof) of $_____
per share of Common Stock [120% of the initial public offering price per share]
subject to the terms and conditions of this Agreement. Except as set forth
herein, the Shares issuable upon exercise of the Warrants are in all respects
identical to the shares of Common Stock being purchased by the Underwriters for
resale to the public pursuant to the terms and provisions of the Underwriting
Agreement.
2. Warrant Certificates. The warrant certificates (the "Warrant
Certificates") delivered and to be delivered pursuant to this Agreement shall be
in the form set forth in Exhibit A, attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.
3. Exercise of Warrant.
3.1 Method of Exercise. The Warrants initially are exercisable at
an aggregate initial exercise price (subject to adjustment as provided in
Section 8 hereof) per share of Common
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Stock set forth in Section 6 hereof payable by certified or official bank check
in New York Clearing House funds, subject to adjustment as provided in Section 8
hereof. Upon surrender of a Warrant Certificate with the annexed Form of
Election to Purchase duly executed, together with payment of the Exercise Price
(as hereinafter defined) for the shares of Common Stock purchased at the
Company's principal offices in Brownsville, Vermont (presently located at
Snowdance, Inc., Route 44, Brownsville, Vermont 05037) the registered holder of
a Warrant Certificate ("Holder" or "Holders") shall be entitled to receive a
certificate or certificates for the shares of Common Stock so purchased. The
purchase rights represented by each Warrant Certificate are exercisable at the
option of the Holder thereof, in whole or in part (but not as to fractional
shares of the Common Stock underlying the Warrants). Warrants may be exercised
to purchase all or part of the shares of Common Stock represented thereby. In
the case of the purchase of less than all the shares of Common Stock purchasable
under any Warrant Certificate, the Company shall cancel said Warrant Certificate
upon the surrender thereof and shall execute and deliver a new Warrant
Certificate of like tenor for the balance of the shares of Common Stock
purchasable thereunder.
3.2 Exercise by Surrender of Warrant. In addition to the method of
payment set forth in Section 3.1 and in lieu of any cash payment required
thereunder, the Holder(s) of the Warrants shall have the right at any time and
from time to time to exercise the Warrants in full or in part by surrendering
the Warrant Certificate
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in the manner specified in Section 3.1 in exchange for the number of Shares
equal to the product of (x) the number of Shares as to which the Warrants are
being exercised multiplied by (y) a fraction, the numerator of which is the
Market Price (as defined in Section 3.3 below) of the Shares less the Exercise
Price and the denominator of which is such Market Price. Solely for the purposes
of this paragraph, Market Price shall be calculated either (i) on the date which
the form of election attached hereto is deemed to have been sent to the Company
pursuant to Section 12 hereof ("Notice Date") or (ii) as the average of the
Market Prices for each of the five trading days preceding the Notice Date,
whichever of (i) or (ii) is greater.
3.3 Definition of Market Price. As used herein, the phrase "Market
Price" at any date shall be deemed to be the last reported sale price, or, in
case no such reported sale takes place on such day, the average of the last
reported sale prices for the last three (3) trading days, in either case as
officially reported by the principal securities exchange on which the Common
Stock is listed or admitted to trading or by the American Stock Exchange
("Amex"), or, if the Common Stock is not listed or admitted to trading on any
national securities exchanged or quoted by Amex, the average closing bid price
as furnished by the NASD through Amex or similar organization if Amex is no
longer reporting such information, or if the Common Stock is not quoted on Amex,
as determined in good faith by resolution of the Board of Directors of the
Company, based on the best information available to it.
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4. Issuance of Certificates. Upon the exercise of the Warrants, the
issuance of certificates for shares of Common Stock and/or other securities,
properties or rights underlying such Warrants, shall be made forthwith (and in
any event within five (5) business days thereafter) without charge to the Holder
thereof including, without limitation, any tax which may be payable in respect
of the issuance thereof, and such certificates shall (subject to the provisions
of Sections 5 and 7 hereof) be issued in the name of, or in such names as may be
directed by, the Holder thereof; provided, however, that the Company shall not
be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any such certificates in a name other
than that of the Holder, and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
The Warrant Certificates and the certificates representing the Shares
underlying the Warrants (and/or other securities, property or rights issuable
upon the exercise of the Warrants) shall be executed on behalf of the Company by
the manual or facsimile signature of the then Chairman or Vice Chairman of the
Board of Directors or President or Vice President of the Company. Warrant
Certificates shall be dated the date of execution by the Company upon initial
issuance, division, exchange, substitution or transfer.
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5. Restriction On Transfer of Warrants. The Holder of a Warrant
Certificate, by its acceptance thereof, covenants and agrees that the Warrants
are being acquired as an investment and not with a view to the distribution
thereof; that the Warrants may not be sold, transferred, assigned, hypothecated
or otherwise disposed of, in whole or in part, for a period of one (1) year from
the date hereof, except to officers of the Representative.
6 Exercise Price.
6.1 Initial and Adjusted Exercise Price. Except as otherwise
provided in Section 8 hereof, the initial exercise price of each Warrant shall
be $____ [120% of the initial public offering price] per share of Common Stock.
The adjusted exercise price shall be the price which shall result from time
to time from any and all adjustments of the initial exercise price in accordance
with the provisions of Section 8 hereof.
6.2 Exercise Price. The term "Exercise Price" herein shall mean the
initial exercise price or the adjusted exercise price, depending upon the
context.
7. Registration Rights.
7.1 Registration Under the Securities Act of 1933. The Warrants, the
Shares, and any of the other securities issuable upon exercise of the Warrants
have been registered under the Securities Act of 1933, as amended (the "Act"),
pursuant to the Company's Registration Statement on Form SB-2 (Registration No.
333-_____) (the "Registration Statement"). All of the representations and
warranties of the Company contained in the Underwriting Agreement relating to
the Registration Statement, the Preliminary Prospectus
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and Prospectus (as such terms are defined in the Underwriting Agreement) and
made as of the dates provided therein, are hereby incorporated by reference. The
Company agrees and covenants promptly to file post-effective amendments to such
Registration Statement as may be necessary in order to maintain its
effectiveness and otherwise to take such action as may be necessary to maintain
the effectiveness of the Registration Statement as long as any Warrants are
outstanding. In the event that, for any reason, whatsoever, the Company shall
fail to maintain the effectiveness of the Registration Statement, upon exercise,
in part or in whole, of the Warrants, certificates representing the Shares
underlying the Warrants, and any of the other securities issuable upon exercise
of the Warrants (collectively, the "Warrant Securities") shall bear the
following legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended
("Act"), and may not be offered or sold except pursuant to
(i) an effective registration statement under the Act, (ii)
to the extent applicable, Rule 144 under the Act (or any
similar rule under such Act relating to the disposition of
securities), or (iii) an opinion of counsel, if such opinion
shall be reasonably satisfactory to counsel to the issuer,
that an exemption from registration under such Act is
available.
7.2 Piggyback Registration. If, at any time commencing after the
date hereof and expiring seven (7) years from the date hereof, the Company
proposes to register any of its securities under the Act (other than in
connection with a merger or pursuant to Form S-8) it will give written notice
by registered mail, at least thirty (30) days prior to the filing of each such
registration statement, to the Representative and to all other
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Holder of the Warrants and/or the Warrant Securities of its intention to do so.
If the Representative or other Holder of the Warrants and/or Warrant Securities
notify the Company within twenty (20) business daysafter receipt of any such
notice of its or their desire to include any such securities in such proposed
registration statement, the Company shall afford the Representative and such
Holder of the Warrants and/or Warrant Securities the opportunity to have any
such Warrant Securities registered under such registration statement (sometimes
referred to herein as the "Piggyback Registration").
Notwithstanding the provisions of this Section 7.2, the Company shall
have the right at any time after it shall have given written notice pursuant to
this Section 7.2 (irrespective of whether a written request for inclusion of any
such securities shall have been made) to elect not to file any such proposed
registration statement, or to withdraw the same after the filing but prior to
the effective date thereof.
7.3 Demand Registration.
(a) At any time commencing after the date hereof and expiring five (5)
years from the date hereof, the Holder of the Warrants and/or Warrant Securities
representing a "Majority" (as hereinafter defined) of such securities (assuming
the exercise of all of the Warrants) shall have the right (which right is in
addition to the registration rights under Section 7.2 hereof), exercisable by
written notice to the Company, to have the Company prepare and file with the
Securities and Exchange Commission (the "Commission"), on one occasion, a
registration statement and such
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other documents, including a prospectus, as may be necessary in the opinion of
both counsel for the Company and counsel for the Representative and Holder, in
order to comply with the provisions of the Act, so as to permit a public
offering and sale of their respective Warrant Securities for nine (9)
consecutive months by such Holder and any other Holder of the Warrants and/or
Warrant Securities who notify the Company within ten (10) days after receiving
notice from the Company of such request.
(b) The Company covenants and agrees to give written notice of any
registration request under this Section 7.3 by any Holder or Holder to all other
registered Holder of the Warrants and the Warrant Securities within ten (10)
days from the date of the receipt of any such registration request.
(c) In addition to the registration rights under Section 7.2 and
subsection (a) of this Section 7.3, at any time commencing after the date hereof
and expiring five (5) years thereafter, any Holder of Warrants and/or Warrant
Securities shall have the right, exercisable by written request to the Company,
to have the Company prepare and file, on one occasion, with the Commission a
registration statement so as to permit a public offering and sale for nine (9)
consecutive months by any such Holder of its Warrant Securities provided,
however, that the provisions of Section 7.4(b) hereof shall not apply to any
such registration request and registration and all costs incident thereto shall
be at the expense of the Holder or Holder making such request.
(d) Notwithstanding anything to the contrary contained herein, if the
Company shall not have filed a registration
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statement for the Warrant Securities within the time period specified in Section
7.4(a) hereof pursuant to the written notice specified in Section 7.3(a)
of a Majority of the Holder of the Warrants and/or Warrant Securities, the
Company shall have the option, upon the written notice of election of a
Majority of the Holder of the Warrants and/or Warrant Securities, to repurchase
(i) any and all Warrant Securities at the higher of the Market Price
per share of Common Stock on (x) the date of the notice sent pursuant to
Section 7.3(a) or (y) the expiration of the period specified in Section
7.4(a) and (ii) any and all Warrants at such Market Price less the Exercise
Price of such Warrant. Such repurchase shall be in immediately available
funds and shall close within two (2) days after the later of (i) the
expiration of the period specified in Section 7.4(a) or (ii) the delivery of
the written notice of election specified in this Section 7.3(d).
7.4 Covenants of the Company With Respect to Registration. In
connection with any registration under Section 7.2 or 7.3 hereof, the Company
covenants and agrees as follows:
(a) The Company shall use its best efforts to file a registration
statement within thirty (30) days of receipt of any demand therefor, shall use
its best efforts to have any registration statements declared effective at the
earliest possible time, and shall furnish each Holder desiring to sell Warrant
Securities such number of prospectuses as shall reasonably be requested.
(b) The Company shall pay all costs (excluding fees and expenses of
Holder(s)' counsel and any underwriting or selling
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commissions), fees and expenses in connection with all registration statements
filed pursuant to Sections 7.2 and 7.3(a) hereof including, without limitation,
the Company's legal and accounting fees, printing expenses, blue sky fees and
expenses. The Holder(s) will pay all costs, fees and expenses in connection with
any registration statement filed pursuant to Section 7.3(c). If the Company
shall fail to comply with the provisions of Section 7.4(a), the Company shall,
in addition to any other equitable or other relief available to the Holder(s),
be liable for any or all incidental or special damages sustained by the
Holder(s) requesting registration of their Warrant Securities.
(c) The Company will take all necessary action which may be required in
qualifying or registering the Warrant Securities included in a registration
statement for offering and sale under the securities or blue sky laws of such
states as reasonably are requested by the Holder(s), provided that the Company
shall not be obligated to execute or file any general consent to service of
process or to qualify as a foreign corporation to do business under the laws of
any such jurisdiction.
(d) The Company shall indemnify the Holder(s) of the Warrant Securities
to be sold pursuant to any registration statement and each person, if any, who
controls such Holder within the meaning of Section 15 of the Act or Section
20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
against all loss, claim, damage, expense or liability (including all expenses
reasonably incurred in investigating, preparing or defending against any claim
whatsoever) to which any of them may become
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subject under the Act, the Exchange Act or otherwise, arising from such
registration statement but only to the same extent and with the same effect as
the provisions pursuant to which the Company has agreed to indemnify each of the
Underwriters contained in Section 7 of the Underwriting Agreement.
(e) The Holder(s) of the Warrant Securities to be sold pursuant to a
registration statement, and their successors and assigns, shall severally, and
not jointly, indemnify the Company, its officers and directors and each person,
if any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, against all loss, claim, damage or expense or
liability (including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which they may become
subject under the Act, the Exchange Act or otherwise, arising from information
furnished by or on behalf of such Holder, or their successors or assigns, for
specific inclusion in such registration statement to the same extent and with
the same effect as the provisions contained in Section 7 of the Underwriting
Agreement pursuant to which the Underwriters have agreed to indemnify the
Company.
(f) Nothing contained in this Agreement shall be construed as requiring
the Holder(s) to exercise their Warrants prior to the initial filing of any
registration statement or the effectiveness thereof.
(g) The Company shall not permit the inclusion of any securities other
than the Warrant Securities to be included in any registration statement filed
pursuant to Section 7.3 hereof, or
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permit any other registration statement to be or remain effective during the
effectiveness of a registration statement filed pursuant to Section 7.3 hereof,
without the prior written consent of the Holder of the Warrants and Warrant
Securities representing a Majority of such securities.
(h) The Company shall furnish to each Holder participating in the
offering and to each underwriter, if any, a signed counterpart, addressed to
such Holder or underwriter, of (i) an opinion of counsel to the Company, dated
the effective date of such registration statement (and, if such registration
includes an underwritten public offering, an opinion dated the date of the
closing under the underwriting agreement), and (ii) a "cold comfort" letter
dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, a letter dated the date
of the closing under the underwriting agreement) signed by the independent
public accountants who have issued a report on the Company's financial
statements included in such registration statement, in each case covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of
securities.
(i) The Company shall as soon as practicable after the effective date of
the registration statement, and in any event
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within 15 months thereafter, make "generally available to its security holder"
(within the meaning of Rule 158 under the Act) an earnings statement (which need
not be audited) complying with Section 11(a) of the Act and covering a period of
at least 12 consecutive months beginning after the effective date of the
registration statement.
(j) The Company shall deliver promptly to each Holder participating in
the offering requesting the correspondence and memoranda described below and to
the managing underwriters, copies of all correspondence between the Commission
and the Company, its counsel or auditors and all memoranda relating to
discussions with the Commission or its staff with respect to the registration
statement and permit each Holder and underwriters to do such investigation, upon
reasonable advance notice, with respect to information contained in or omitted
from the registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the National Association of Securities
Dealers, Inc. ("NASD"). Such investigation shall include access to books,
records and properties and opportunities to discuss the business of the Company
with its officers and independent auditors, all to such reasonable extent and at
such reasonable times and as often as any such Holder or underwriter shall
reasonably request.
(k) The Company shall enter into an underwriting agreement with the
managing underwriters selected for such underwriting by Holder holding a
Majority of the Warrant Securities requested to be included in such
underwriting, which may be the Representative.
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Such agreement shall be satisfactory in form and substance to the Company, each
Holder and such managing underwriters, and shall contain such representations,
warranties and covenants by the Company and such other terms as are customarily
contained in agreements of that type used by the managing underwriter. The
Holder shall be parties to any underwriting agreement relating to an
underwritten sale of their Warrant Securities and may, at their option, require
that any or all the representations, warranties and covenants of the Company to
or for the benefit of such underwriters shall also be made to and for the
benefit of such Holder. Such Holder shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters except as they may relate to such Holder and their intended methods
of distribution.
(l) In addition to the Warrant Securities, upon the written request
therefor by any Holder(s), the Company shall include in the registration
statement any other securities of the Company held by such Holder(s) as of the
date of filing of such registration statement, including without limitation
restricted shares of Common Stock, options, warrants or any other securities
convertible into shares of Common Stock.
(m) For purposes of this Agreement, the term "Majority" in reference to
the Holder of Warrants or Warrant Securities, shall mean in excess of fifty
percent (50%) of the then outstanding Warrants or Warrant Securities that (i)
are not held by the Company, an affiliate, officer, creditor, employee or agent
thereof or any of their respective affiliates, members of their
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family, persons acting as nominees or in conjunction therewith and (ii) have not
been resold to the public pursuant to a registration statement filed with the
Commission under the Act.
8. Adjustments to Exercise Price and Number of Securities.
8.1 Subdivision and Combination. In case the Company shall at any
time subdivide or combine the outstanding shares of Common Stock, the Exercise
Price shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
8.2 Stock Dividends and Distributions. In case the Company shall pay
a dividend in, or make a distribution of, shares of Common Stock or of the
Company's capital stock convertible into Common Stock, the Exercise Price shall
forthwith be proportionately decreased. An adjustment made pursuant to this
Section 8.2 shall be made as of the record date for the subject stock dividend
or distribution.
8.3 Adjustment in Number of Securities. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 8, the number of
Warrant Securities issuable upon the exercise at the adjusted exercise price of
each Warrant shall be adjusted to the nearest full amount by multiplying a
number equal to the Exercise Price in effect immediately prior to such
adjustment by the number of Warrant Securities issuable upon exercise of the
Warrants immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.
8.4 Definition of Common Stock. For the purpose of this Agreement,
the term "Common Stock" shall mean (i) the class of
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stock designated as Common Stock in the Certificate of Incorporation of the
Company as may be amended as of the date hereof, or (ii) any other class of
stock resulting from successive changes or reclassifications of such Common
Stock consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value.
8.5 Merger or Consolidation. In case of any consolidation of the
Company with, or merger of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger which does not result
in any reclassification or change of the outstanding Common Stock), the
corporation formed by such consolidation or merger shall execute and deliver to
the Holder a supplemental warrant agreement providing that the holder
of each Warrant then outstanding or to be outstanding shall have the right
thereafter (until the expiration of such Warrant) to receive, upon exercise of
such warrant, the kind and amount of shares of stock and other securities and
property receivable upon such consolidation or merger, by a holder of the number
of shares of Common Stock of the Company for which such warrant might have been
exercised immediately prior to such consolidation, merger, sale or transfer.
Such supplemental warrant agreement shall provide for adjustments which shall be
identical to the adjustments provided in Section 8. The above provision of this
subsection shall similarly apply to successive consolidations or mergers.
8.6 No Adjustment of Exercise Price in Certain Cases. No adjustment
of the Exercise Price shall be made:
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(a) Upon the issuance or sale of the Warrants or the shares of
Common Stock issuable upon the exercise of the Warrants;
(b) If the amount of said adjustment shall be less than two cents
(2[c]) per Warrant Security, provided, however, that in such case any
adjustment that would otherwise be required then to be made shall be carried
forward and shall be made at the time of and together with the next subsequent
adjustment which, together with any adjustment so carried forward, shall amount
to at least two cents (2[c]) per Warrant Security.
9. Exchange and Replacement of Warrant Certificates. Each Warrant
Certificate is exchangeable without expense, upon the surrender thereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Warrant Securities in such denominations as
shall be designated by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof.
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10. Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
upon the exercise of the Warrants, nor shall it be required to issue scrip or
pay cash in lieu of fractional interests, it being the intent of the parties
that all fractional interests shall be eliminated by rounding any fraction up to
the nearest whole number of shares of Common Stock or other securities,
properties or rights.
11. Reservation and Listing of Securities. The Company shall at all
times reserve and keep available out of its authorized shares of Common Stock,
solely for the purpose of issuance upon the exercise of the Warrants, such
number of shares of Common Stock or other securities, properties or rights as
shall be issuable upon the exercise thereof. The Company covenants and agrees
that, upon exercise of the Warrants and payment of the Exercise Price therefor,
all shares of Common Stock and other securities issuable upon such exercise
shall be duly and validly issued, fully paid, non-assessable and not subject to
the preemptive rights of any stockholder. As long as the Warrants shall be
outstanding, the Company shall use its best efforts to cause all shares of
Common Stock issuable upon the exercise of the Warrants to be listed (subject to
official notice of issuance) on all securities exchanges on which the Common
Stock issued to the public in connection herewith may then be listed and/or
quoted on Amex.
12. Notices to Warrant Holder. Nothing contained in this Agreement shall
be construed as conferring upon the Holder the
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right to vote or to consent or to receive notice as a stockholder in respect of
any meetings of stockholder for the election of directors or any other matter,
or as having any rights whatsoever as a stockholder of the Company. If, however,
at any time prior to the expiration of the Warrants and their exercise, any of
the following events shall occur:
(a) the Company shall take a record of the holder of its shares
of Common Stock for the purpose of entitling them to receive a dividend
or distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings,
as indicated by the accounting treatment of such dividend or
distribution on the books of the Company; or
(b) the Company shall offer to all the holder of its Common Stock
any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the
Company, or any option, right or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of
all or substantially all of its property, assets and business as an
entirety shall be proposed;
then, in any one or more of said events, the Company shall give written notice
of such event at least fifteen (15) days prior to the date fixed as a record
date or the date of closing the transfer books for the determination of the
stockholder entitled
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to such dividend, distribution, convertible or exchangeable securities or
subscription rights, or entitled to vote on such proposed dissolution,
liquidation, winding up or sale. Such notice shall specify such record date or
the date of closing the transfer books, as the case may be. Failure to give such
notice or any defect therein shall not affect the validity of any action taken
in connection with the declaration or payment of any such dividend, or the
issuance of any convertible or exchangeable securities, or subscription rights,
options or warrants, or any proposed dissolution, liquidation, winding up or
sale.
13. Notices.
All notices, requests, consents and other communications hereunder shall
be in writing and shall be deemed to have been duly made and sent when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of the Warrants, to the address
of such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3
hereof or to such other address as the Company may designate by notice
to the Holder.
14. Supplements and Amendments. The Company and the Representative may
from time to time supplement or amend this Agreement without the approval of any
holder of Warrant Certificates (other than the Representative) in order to cure
any ambiguity, to correct or supplement any provision contained herein which may
be defective or inconsistent with any provisions herein,
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or to make any other provisions in regard to matters or questions arising
hereunder which the Company and the Representative may deem necessary or
desirable and which the Company and the Representative deem shall not adversely
affect the interests of the Holder of Warrant Certificates.
15. Successors. All the covenants and provisions of this Agreement shall
be binding upon and inure to the benefit of the Company, the Holder and their
respective successors and assigns hereunder.
16. Termination. This Agreement shall terminate at the close of business
on _______, 2002. Notwithstanding the foregoing, the indemnification provisions
of Section 7 shall survive such termination until the close of business on
_______, 2010.
17. Governing Law; Submission to Jurisdiction. This Agreement and each
Warrant Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of New York and for all purposes shall be construed in
accordance with the laws of said State without giving effect to the rules of
said State governing the conflicts of laws.
The Company, the Representative and the Holder hereby agree that any
action, proceeding or claim against it arising out of, or relating in any way
to, this Agreement shall be brought and enforced in the courts of the State of
New York or of the United States of America for the Southern District of New
York, and irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company, the Representative and the Holder
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hereby irrevocably waive any objection to such exclusive jurisdiction or
inconvenient forum. Any such process or summons to be served upon any of the
Company, the Representative and the Holder (at the option of the party bringing
such action, proceeding or claim) may be served by transmitting a copy thereof,
by registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 13 hereof. Such mailing
shall be deemed personal service and shall be legal and binding upon the party
so served in any action, proceeding or claim. The Company, the Representative
and the Holder agree that the prevailing party(ies) in any such action or
proceeding shall be entitled to recover from the other party(ies) all of
its/their reasonable legal costs and expenses relating to such action or
proceeding and/or incurred in connection with the preparation therefor.
18. Entire Agreement; Modification. This Agreement (including the
Underwriting Agreement to the extent portions thereof are referred to herein)
contains the entire understanding between the parties hereto with respect to the
subject matter hereof and may not be modified or amended except by a writing
duly signed by the party against whom enforcement of the modification or
amendment is sought.
19. Severability. If any provision of this Agreement shall be held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision of this Agreement.
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20. Captions. The caption headings of the Sections of this Agreement are
for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
21. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Representative and any other registered Holder(s) of the Warrant Certificates or
Warrant Securities any legal or equitable right, remedy or claim under this
Agreement; and this Agreement shall be for the sole benefit of the Company and
the Representative and any other registered Holder of Warrant Certificates or
Warrant Securities.
22. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
SNOWDANCE, INC.
By: ___________________________
_______________________ Name:
Title:
Attest:
_______________________
Secretary
JOSEPHTHAL LYON & ROSS INCORPORATED
By:____________________________
_______________________ Name:
Title:
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EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY
SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii)
AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO
COUNSEL FOR THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS
AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME, __________, 2002
No. W- Warrants to Purchase
____ Shares of Common Stock
WARRANT CERTIFICATE
This Warrant Certificate certifies that ___________, or registered
assigns, is the registered holder of __________ Warrants to purchase initially,
at any time from __________, 1998 [one year from the effective date of the
Registration Statement] until 5:30 p.m. New York time on ___________, 2002
[five years from the effective date of the Registration Statement] ("Expiration
Date"), up to __________ fully-paid and non-assessable shares of common stock,
("Common Stock") of SNOWDANCE, INC., a Delaware corporation (the "Company"),
(one share of Common Stock referred to individually as a "Security" and
collectively as the "Securities") at the initial exercise price, subject to
adjustment in certain events (the "Exercise Price"), of $______ [120% of
the initial public offering price] per share of Common Stock upon surrender
of this Warrant Certificate and payment of the Exercise Price at an office
or agency of the Company, but subject to the conditions set forth herein and
in the warrant agreement dated as of _______, 1997 among the Company, and
JOSEPHTHAL LYON & ROSS INCORPORATED (the "Warrant Agreement"). Payment of the
Exercise Price shall be made by certified or official bank check in New York
Clearing House funds payable to the order of the Company.
A-1
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No Warrant may be exercised after 5:30 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, hereby shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants issued pursuant to the Warrant Agreement,
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company and the holder (the words "holder" or "holder" meaning the registered
holder or registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price and the type and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Price and the number
and/or type of securities issuable upon the exercise of the Warrants; provided,
however, that the failure of the Company to issue such new Warrant Certificates
shall not in any way change, alter, or otherwise impair, the rights of the
holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by
this Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as
the absolute owner(s) of this Warrant Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
to be duly executed under its corporate seal.
Dated as of ___________, 1997
SNOWDANCE, INC.
[SEAL] By:___________________________
_______________________ Name:
Title:
Attest:
_______________________
Secretary
A-3
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[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.1]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase:
[ ] ______________________ shares of Common Stock;
and herewith tenders in payment for such securities a certified or official bank
check payable in New York Clearing House Funds to the order of Snowdance, Inc.
in the amount of $____, all in accordance with the terms of Section 3.1 of the
Representative's Warrant Agreement dated as of _____, 1997 among Snowdance, Inc.
and Josephthal Lyon & Ross Incorporated. The undersigned requests that a
certificate for such securities be registered in the name of __________ whose
address is ___________ and that such Certificate be delivered to __________
whose address is _____________.
Dated:
_______________________ Signature _____________________
(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant
Certificate.)
_______________________________
_______________________ (Insert Social Security or Other
Identifying Number of Holder)
A-4
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[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED ____________________________________________________
hereby sells, assigns and transfers unto
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ______________ Attorney,
to transfer the within Warrant Certificate on the books of the within-named
Company, with full power of substitution.
Dated: ________________ Signature: ___________________
_______________________ (Signature must conform in all
respects to name of holder as
specified on the face of the Warrant
Certificate.)
______________________________
_______________________ (Insert Social Security or Other
Identifying
Number of Assignee)
A-5
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<PAGE>
LOAN AND SECURITY AGREEMENT
This Agreement made between MASCOMA SAVINGS BANK, fsb, a banking
corporation with a place of business at 10 Gates Street, PO Box 426, White River
Junction, Vermont, (the "Bank") and ASCUTNEY MOUNTAIN RESORT, L.P. and ASCUTNEY
MOUNTAIN RESORT HOTEL, L.P., a Limited Partnership existing under the laws of
the State of Delaware with its principal place of business at Ascutney Mountain
Resort, PO Box 699, Brownsville, Vermont 05027, (the "Borrower") and STEVEN H.
PLAUSTEINER and SUSAN D. PLAUSTEINER of Coaching Lane, Brownsville, Vermont (the
"Guarantors").
ARTICLE I
General
1.1 The Bank has agreed to make:
A Line of Credit evidenced by a demand promissory note in a principal
amount of up to the lesser of One Million Five Hundred Thousand
($1,500,000.00) Dollars.
1.2 Interest Rate:
The interest rate shall float at 1.75 percent (1.75%) above the so-called
Wall Street Journal Rate of interest as it is adjusted from time to time.
1.3 Prepayment Penalty:
Prepayment of the loan will not incur a penalty fee. Prepayments shall not
relieve Borrower from the obligation to make the regular installments
scheduled in the Note when due.
1.4 The loan shall be secured by the following:
A. The loan shall be collateralized and secured by a first security
interest in all assets of the Borrower to include but not be limited to:
All accounts, accounts receivable, demand deposits, "cash collateral" (as
defined in 11 U.S.C. 'SS'.363 (a)), contracts, contract rights, notes,
bills, drafts, chattel paper, acceptances, choses in action, tax refunds,
insurance proceeds, general intangibles, and all other debts, obligations,
and liabilities in whatever form, owing to Borrower from any person or
entity, the rights of reclamation and stoppage in transit, and all rights
of an unpaid seller of goods or services whether now existing or
subsequently arising, acquired, or created, together with the proceeds
thereof ("Receivables");
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All machinery, equipment, office equipment, furniture, fixtures (including
automotive equipment, ski lifts and snow making equipment) along with all
other parts, tools, trade ins, repairs, accessories, accessions,
modifications, and replacements, whether now owned or subsequently
acquired, constructed, or attached or added to, or placed in, the
foregoing, together with all cash or non-cash proceeds, including insurance
proceeds ("Equipment");
All general intangibles, including, but not limited to, all leases and
rents, corporate names, trade names, trademarks, trade secrets, books and
records, customer lists, blueprints and plans, computer programs, tapes and
related electronic data processing software, and all corporate ledgers,
whether now owned or subsequently acquired ("Intangibles");
All rights, plans, and specifications, materials in process and
construction materials at the construction site ("Construction").
An assignment of any and all contracts relating to the management,
maintenance, supply, or the furnishing of services and utilities to the
mortgaged property ("Contracts");
B. The loan shall be collateralized by a valid and enforceable first
mortgage on all land and buildings other than condominiums and
infrastructure known as Ascutney Mountain Resort;
C. The loan shall be collateralized by a valid and enforceable first
mortgage on the Vermont residence of Steven and Susan Plausteiner;
D. The loan shall be collateralized by a valid and enforceable first
mortgage on the Lake Placid, New York residence of Steven and Susan
Plausteiner;
E. The loan shall be collateralized by the unlimited personal
guarantees of Steven and Susan Plausteiner supported by an annual personal
financial statement and by accountant prepared fiscal year end statements
to be delivered to Bank while this loan remains unpaid or available.
F. The loan shall be collateralized by the unlimited guaranty of Steven
Plausteiner and Susan Plausteiner supported by accountant prepared fiscal
year end statements.
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G. This loan shall be collateralized by an escrow account which shall
serve as collateral upon default by the Borrower ("Escrow Account").
H. Assignment of all plans and permits of Ascutney Mountain Resort.
I. All records of any of the foregoing, in whatever form.
1.5 Interest after maturity or default shall accrue at the rate of eighteen
(18%) percent per annum on the unpaid principal .
1.6 Any payment received more than ten (10) days after its due date shall be
subject to an additional charge of five (5) percent of the amount due or
$35.00, whichever is greater.
1.7 Advances under the line of credit shall be made at Borrower's request and
at the discretion of Bank.
1.8 The security interest granted hereby is to secure punctual payment and
faithful performance of all debts, liabilities and obligations of Borrower
to Bank hereunder and also any and all other debts, liabilities and
obligations of Borrower to Bank of every kind and description, direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, including but not limited to any debt liability or
obligation of Borrower to others which Bank may have obtained by assignment
or otherwise, and further including, without limitation, all debts,
interest, fees, charges and expenses (all hereafter called "Obligations").
1.9 The loans shall be evidenced by Notes and other loan documents and subject
to the terms, provisions and conditions as set forth in said Notes and loan
documents, to be executed on the same date as this Agreement.
1.10 The Borrower shall pay fees as follows:
An origination fee of Ten Thousand and No/100 ($10,000.00) Dollars.
1.11 Borrower shall deposit with Lender the amount of $150,000.00 in escrow for
the payment of debt service in the event that any payment is over thirty
(30) days late.
1.12 The Bank's rights hereunder are cumulative and not alternative. No omission
or delay by the Bank in
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exercising any right or power under this Agreement, the Notes or any other
loan document will impair such right or power or be construed to be a
waiver of any default or an acquiescence therein and any single or partial
exercise of any such right or power will not preclude other or further
exercise thereof or the exercise of any other right, and no waiver will be
valid unless in writing and signed by the Bank and then only to the extent
specified. All remedies herein and by law afforded will be cumulative and
will be available to the Bank until all indebtedness of the Borrower is
paid.
1.12 Any written notice required or permitted by this Agreement may be delivered
by depositing it in the United States mail, postage prepaid, or by
telegraph, charges prepaid, addressed as follows:
Bank: Mascoma Savings Bank, fsb
10 Gates Street
PO Box 426
White River Jct., VT 05001
Borrower: Ascutney Mountain Resort, L.P and
Ascutney Mountain Resort Hotel, L.P.
c/o Ascutney Mountain Resort
PO Box 699
Brownsville, VT 05037
Guarantor: Steven H. Plausteiner
c/o Ascutney Mountain Resort
PO Box 699
Brownsville, VT 05037
Guarantor: Susan D. Plausteiner
c/o Ascutney Mountain Resort
PO Box 699
Brownsville, VT 05037
1.14 Borrower will furnish evidence satisfactory to Bank that the real estate is
in compliance with all applicable zoning, air pollution and other laws and
regulations and that it may be lawfully occupied and used for the purposes
for which the same has been constructed.
1.15 The Bank may sell or assign or participate out its rights or any portion
thereof in the loan, and the Bank is authorized to deliver the loan
documents and all credit and financial information pertaining to Borrower
to Bank's assignee and/or participants.
1.16 This agreement may not be assigned by the Borrower. Pending consummation of
the terms of this agreement and
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as long as the loan is outstanding, there shall be no transfer of title
without the prior written consent of Bank and no transfer of the corporate
assets of Borrower. There shall be no other liens (other than inchoate
mechanic's liens, pursuant to statute, securing sums not yet due or payable
to contractors or materialmen) on title whether subordinate or superior to
the lien given Bank to secure this loan other than what has been disclosed
to the Bank.
1.17 Notwithstanding anything to the contrary herein contained, Bank will not be
deemed a partner or joint venturer with the Borrower, and the Borrower will
indemnify and hold Bank harmless from any and all damages resulting from
such a construction of the parties and their relationship.
ARTICLE II
Representations, Warranties, and Covenants
2.1 Borrower hereby warrants, represents and covenants:
The following restrictions will be placed upon the Borrower while either of
these loans remain unpaid or available.
A. Borrower, affiliates or subsidiaries shall not undertake acquisitions of
businesses, or portions thereof, without prior written consent of Bank.
2.2 That the collateral for this loan is, and, if acquired hereafter, will be,
lawfully owned by Borrower, in fee simple, free and clear of all other
liens except existing subordinate liens, encumbrances and security
interests, Borrower will warrant and defend title to the same against the
claims and demands of all persons.
2.3 That Borrower has not granted, and will not grant, to anyone other than
Bank, any security interest in the Collateral, and no Financing Statement
or other instrument bearing the signature of, or otherwise authorized by
Borrower, is on file in any public filing office.
2.4 That the collateral except for personal residences is and shall be retained
in Borrower's possession at its principal place of business located at the
address set forth below the Borrower's signature.
2.5 That the collateral except for personal residences is, or will be, used
primarily for business purposes.
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2.6 That the Borrower has no other business locations, except the locations in
Brownsville, Vermont.
2.7 That Borrower will give Bank prompt written notice of removal from,
discontinuance of, or change in, the business addresses shown below.
2.8 The Borrower's full and complete legal name is Ascutney Mountain Resort,
L.P. and Ascutney Mountain Resort Hotel, L.P.; the Borrower has been duly
organized and is existing under the laws of the State of Deleware and is
duly authorized to do business in the State of Vermont; and the Borrower
utilizes no tradenames in the conduct of its business except Ascutney
Mountain Resort and Ascutney Mountain Resort Hotel and any name including
"Ascutney Mountain" and as may be disclosed to Bank, and shall not conduct
its business hereafter under any other tradenames or trade styles except
upon seven (7) days prior written notice to Bank.
2.9 That no litigation, administrative action or other proceeding is either
threatened, contemplated or pending which will materially or adversely
affect Borrower's financial condition, and Borrower is not a party to, or
bound by, any contract, agreement, order or decree which (a) would require
the consent of any party as a condition precedent hereto; or (b) will or
may have a material adverse impact on the business of Borrower or the
rights of Bank hereunder.
2.10 Borrower shall not sell, assign or otherwise transfer title to the
mortgaged property during the term of this loan, except as otherwise
permitted in the loan documents.
2.11 Borrower will be prohibited from assuming liabilities or obligations of
others without the Bank's approval and concurrence.
ARTICLE III
Additional Representations. Warranties, and Covenants
At closing, the Borrower shall have performed or provided all of the
following:
3.1 All Bank loan accommodations shall be cross-collateralized and
cross-defaulted.
3.2 All Bank loans shall be cross-defaulted with all other
corporate and affiliate/subsidiary debt.
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3.3 Borrower will provide Bank with an appraisal of the Ascutney Mountain
Resort and of the two residential properties.
3.4 Borrower will provide certified evidence that Borrower has been established
and is in good standing in the state of Delaware and registered to do
business and in good standing in Vermont.
3.5 Bank's Expenses. Borrower shall be responsible for out-of-pocket costs and
expenses incurred by Bank in connection with the documentation and closing
of the transaction referred to herein, including, but not limited to, legal
fees incurred by Bank. In consideration of the issuance of this Commitment,
Borrower further agrees that, if the transaction contemplated herein does
not close for any reason, it will pay all costs, expenses, and legal fees
incurred by Bank with respect to the proposed transaction in anticipation
of said closing. Additionally, Borrower agrees to reimburse Bank for any
costs and expenses it incurs while either of these loans remains unpaid or
available.
3.6 Insurance. Borrower shall maintain insurance policies on personal
residences and its assets in form, matter and amounts issued by companies
satisfactory to Bank for fire and all-risk coverage, such other hazard
insurance, including flood insurance if the property securing the loan is
located in a federally designated flood hazard area, and coverage which
Bank may require, including business interruption and for 100% of
replacement value. Bank shall be designated as loss payee on all such
policies. All policies shall contain a provision requiring at least 30 days
advance notice to Bank before any policy cancellation or modification.
3.7 Opinion of Counsel. Independent legal counsel representing Borrower shall
issue an opinion confirming Borrower's and the guarantor's authority to
enter into the loan documents in connection with the transaction; that
there is no litigation or claims existing or threatened against Borrower or
the guarantors; that the loan documents are valid and enforceable and Bank
has been granted a valid first security interest (mortgage, as applicable)
in Borrower's assets.
3.8 Bank shall be provided with tax certificates confirming that all state and
federal taxes which are payable have been paid in their entirety.
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3.9 Borrower will maintain the main operating accounts at Bank at all times and
Bank will be Borrower's main bank of account throughout the term of the
loan.
3.10 Borrower will provide Bank with the following in the form and content
acceptable to Bank:
A. Monthly (within 45 days of each month end): management prepared (a)
accounts receivable agings; (b) monthly operating statement and
balance sheets.
B. Within ninety (90) days of the end of its fiscal year, CPA review
quality current and complete financial statements of Borrower and CPA
compilation quality current and complete financial statements and
copies of tax returns of the guarantors.
3.11 Borrower shall provide Bank with a copy of its deed (with title evidence)
and leases(s), as applicable, of the premises occupied by it and to be
pledged as collateral for the subject loans.
3.12 Hazardous Waste and Asbestos Existence. Borrower will furnish Bank with
satisfactory evidence that the property does not contain any indications of
the presence of hazardous wastes or oils such that would cause Borrower to
incur any liability. Along with a written representation and warranty from
Borrower that no such hazardous waster materials or oils have been
deposited on the property and that the property does not contain any
asbestos.
3.13 Borrower will provide bank with ALTA title insurance policy, or commitment
therefor, in form and substance satisfactory to the Bank, from a title
insurance company approved by the Bank, to insure the Bank for
$1,500,000.00 on all properties except for the Lake Placid, New York
property which will be in the amount of $7,000,000.00. The final ALTA loan
policy must be received by Bank within 30 days of closing.
3.14 Borrower will provide Bank with personal property lien and UCC search, both
pre and post closing on the Ascutney Mountain Resort property, the Vermont
and Lake Placid, New York residences of Steven and Susan Plausteiner.
3.15 That, upon any failure of Borrower to comply with its obligations pursuant
to 'SS'.3.6 above, Bank may, at its option, and without affecting any of
its other rights or remedies herein or as a secured party under the Uniform
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Commercial Code, procure the insurance protection it deems necessary and/or
cause repairs or modifications to be made to the Collateral, the cost of
either or both of which shall be a lien against the Collateral added to the
amount of the indebtedness secured hereby and payable on demand with
interest at a per annum rate computed on the same basis as the Obligations.
3.16 That Borrower hereby assigns to Bank any and all monies which may become
due and payable under any policy insuring the Collateral, including return
of unearned premiums, and directs any such insurance company to make
payment directly to Bank, and authorizes Bank to apply such monies in
payment on account of the indebtedness secured hereby, whether or not due,
at the sole option of Bank, toward replacement of the Collateral, and to
remit any surplus to Borrower.
3.17 That Borrower will not use the Collateral in violation of any statute or
ordinance or applicable insurance policy and will promptly pay all taxes
and assessments levied against the Collateral.
3.18 That Borrower will not permit any lien, charge, encumbrance, or security
interest of any kind whatsoever to exist more than thirty (30) days after
it accrues upon or attaches to, as the case may be, the Collateral except
for existing subordinate liens.
3.19 That Borrower will not remove the Collateral from its present location(s)
as set forth below without the prior written consent of Bank.
3.20 That Borrower will not sell, transfer, change the registration, if any,
dispose of, attempt to dispose of, substantially modify, or abandon the
Collateral or any part thereof, without the prior written consent of Bank,
provided that Borrower may sell inventory in the ordinary course of
business and may sell or otherwise dispose of obsolete or worn out
Collateral no longer used or useful in its business, if Borrower shall
first or substantially simultaneously with such sale or disposition,
replace the same with new property of substantially equal or greater value
which shall forthwith become subject to the security interest provided for
herein. Borrower will be prohibited from sale of the business without prior
consent of the Bank.
3.21 That Borrower will not assert against Bank any claim or defense which
Borrower may have against any seller of the Collateral or any part thereof,
or against any other
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person with respect to the Collateral or any part thereof.
3.22 That Borrower will indemnify and hold Bank harmless from and against any
loss, liability, damage, costs and expenses whatsoever arising from the
use, operation, ownership, or possession of the Collateral or any part
thereof.
3.23 That Borrower will furnish Bank, prior to delivery of major items of
Collateral to Borrower, copies of the shipping orders with respect to such
Collateral which will specify the name of the manufacturer, a description
of such items, and the serial numbers thereof.
3.24 That Borrower will sign and deliver to Bank such Financing Statements,
Amendment Statements, Continuation Statements, and other related documents
in form acceptable to Bank, as Bank may, from time to time, reasonably
request, or as are necessary, in the opinion of Bank, to establish and
maintain a valid perfected security interest in the Collateral, and
Borrower will pay any related filing fees or costs with respect thereto and
any fees for prior lien searches.
3.25 That Bank is authorized to file any such Financing Statement, Amendment
Statement or Continuation Statement without the signature of Borrower to
the full extent permitted by law.
3.26 Borrower shall permit Bank, through its authorized attorneys, accountants,
and representatives, to inspect and examine the Collateral and the books,
accounts, records, ledgers, and assets of every kind and description of
Borrower with respect thereto at all reasonable times.
3.27 If Borrower shall now or hereafter maintain an employee benefit plan
covered by Sec. 4021(a) of the Employee Retirement Income Security Act of
1974 (hereinafter referred to as "ERISA") relating to plan termination
insurance, it shall promptly:
A. Notify Bank of filing of notice with the Pension Benefit Guaranty
Corporation ("PBGC") pursuant to Sec. 4041 of ERISA that the plan is
to be terminated; and
B. Notify Bank of the institution of proceedings by PBGC under Sec. 4042
of ERISA.
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3.28 Borrower shall not: a) make any distribution on account of its stock, nor
redeem, purchase, or otherwise acquire, directly or indirectly, any of its
stock; b) make any loans or advances to any individual, firm or corporation
including without limitation its officers and employees; c) invest in or
purchase any stock or securities of any individual, firm or corporation; d)
merge or consolidate or be merged or consolidated with or into any other
corporation; e) enter into any agreements of guaranty of the obligations of
any individual, firm or corporation, including without limitation affiliate
or subsidiary corporations, (except as may be requested by the Bank)
without the prior written consent of the Bank; f) sell or transfer (whether
by one or more transactions) a majority of the voting common stock of the
Borrower; or g) change the general character of its business.
ARTICLE IV
Remedies
Borrower agrees that (i) in the case of the breach by Borrower of any of
the representations, warranties, or covenants contained in this Agreement not
cured in thirty (30) days, or if any representations, oral or written, or
warranties, shall prove to have been materially false when made, (ii) upon the
occurrence of an Event of Default as defined in the Term Note or any other loan
documents, or (iii) if the Collateral or any part thereof be seized or levied
upon under legal process, then, and in any such event:
4.1 Bank shall have the rights and remedies of a Secured Party under the
Uniform Commercial Code and, in addition, the rights and remedies provided
herein.
4.2 Bank is hereby authorized and empowered, with the aid and assistance of any
person or persons, to enter any premises where the Collateral or any part
thereof is, or may be placed, and to assemble, disassemble, dismantle,
and/or remove the same and/or to render it unusable, and to sell or
otherwise dispose of such Collateral at public or private sale upon at
least ten (10) days' prior written notice to Borrower of the date on, or
after which, such sale may be conducted and Borrower expressly agrees that
said notice shall constitute fair and reasonable notice to Borrower, that
said notice may be given regardless of whether or not Bank has taken actual
possession of the Collateral, and that at the expiration of said notice
period all rights of redemption in the Collateral shall be deemed waived by
Borrower. The proceeds of each such sale shall first be applied by Bank
toward the payment of all expenses of retaking,
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including, but not limited to, payment by Bank for storage, preparing for
such sale, advertising, selling, and all related charges and disbursements
in connection therewith including reasonable attorney's fees, and then any
surplus may be applied by Bank to the payment of any or all of the
Obligations secured hereby then existing and whether due or not due; but,
should the proceeds of any such sale be insufficient to fully pay all of
the Obligations, Borrower hereby covenants and agrees to remain liable for
any deficiency. Bank may require Borrower to assemble the Collateral and to
make it available to Bank at a place to be designated by Bank which is
reasonably convenient to both parties. Bank may, without any payment or
hindrance, enter upon any real property where the Collateral or any part
thereof may be located and, in connection with the enforcement of any
right, remedy, power, or privilege conferred upon Bank hereunder, may store
the Collateral or any part thereof on such real property without liability
for any rent or other payment in connection therewith.
4.3 Bank shall have the right of set-off, without notice to Borrower or any
guarantor, against any and all deposits or other sums at any time or times
credited by or due from Bank to Borrower or any guarantor, whether in a
special account or other account represented by a certificate of deposit
(whether or not matured), which deposits and other sums shall, at all
times, constitute additional security for the Obligations and may be
set-off against all or any part of the Obligations at any time.
ARTICLE V
Events of Default
Section 5.01. Events of Default. If any of the following events shall
occur:
(1) The Borrower shall fail to pay within ten (10) days of when due the
principal of, or interest on the Notes, or any amount of a commitment or other
fee, as and when due and payable hereunder;
(2) Any representation or warranty made or deemed by the Borrower in this
Agreement or the Security Agreement or which is contained in any certificate,
document, opinion, or financial or other statement furnished at any time under
or in connection with any Loan Document shall prove to have been incorrect,
incomplete, or misleading in any material respect on or as of the date made or
deemed made;
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(3) the Borrower shall fail to perform or observe any term, covenant, or
agreement contained herein, in any material respect;
(4) the Borrower or any of its Subsidiaries shall (a) fail to pay any
indebtedness for borrowed money or the Borrower or such Subsidiary, as the case
may be, or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise), or (b) fail
to perform or observe any term, covenant, or condition on its part to be
performed or observed under any agreement or instrument relating to any such
indebtedness, when required to be performed or observed, if the effect of such
failure to perform or observe is to accelerate, or to permit the acceleration of
after the giving of notice or passage of time, or both, the maturity of such
indebtedness, whether or not such failure to perform or observe shall be waived
by the holder of such indebtedness; or any such indebtedness shall be declared
to be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof;
(5) the Borrower or any of its Subsidiaries (a) shall generally not pay, or
shall be unable to pay, or shall admit in writing its inability to pay its debt
as such debts become due; or (b) shall make an assignment for the benefit of
creditors, or petition or apply to any tribunal for the appointment of a
custodian, receiver, or trustee for it or a substantial part of its assets; or
(c) shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution, or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect; or (d) shall have had any
such petition or application filed or any such proceeding commenced against it
in which an order for relief is entered or an adjudication or appointment is
made, and which remains undismissed for a period of one hundred twenty (120)
days or more; or (e) shall take any corporate action indicating its consent to,
approval of, or acquiescence in any such petition, application, proceeding, or
order for relief or the appointment of a custodian, receiver, or trustee for all
or any substantial part of its properties) or (f) shall suffer any such
custodianship, receivership, or trusteeship to continue undischarged for a
period of ninety (90) days or more;
(6) one or more judgments, decrees, or orders for the payment of money in
excess of Twenty Five Thousand and no/lOOths Dollars ($25,000.00) in the
aggregate shall be rendered against the Borrower or any of its Subsidiaries, and
such judgments, decrees, or orders shall continue unsatisfied and in effect for
a period of ninety (90) consecutive days
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without being vacated, discharged, satisfied, or stayed or bonded pending
appeal;
(7) The Loan and Security Agreement shall at any time after its execution
and delivery and for any reason cease (a) to create a valid and perfected first
priority security interest in and to the property purported to be subject to
such Loan and Security Agreement; or (b) to be in full force and effect or shall
be declared null and void, or the validity or enforceability thereof shall be
contested by the Borrower, or the Borrower shall deny it has any further
liability or obligation under the Loan and Security Agreement, or the Borrower
shall fail to perform any of its obligations under the Loan and Security
Agreement;
(8) There shall occur any event of default under any loan document executed
in connection with certain loans of even date herewith, made by Bank to
Borrower;
(9) Any of the following events shall occur or exist with respect to the
Borrower and any Commonly Controlled Entity under ERISA: any Reportable Event
shall occur; complete or partial withdrawal from any Multiemployer Plan shall
take place; any Prohibited Transaction shall occur; a notice of intent to
terminate a Plan shall be filed, or a Plan shall be terminated; or circumstances
shall exist which constitute grounds entitling the PBGC to institute proceedings
to terminate a Plan, or the PBGC shall institute such proceedings; and in each
case above, such event or condition, together with all other events or
conditions, if any, could subject the Borrower to any tax, penalty, or other
liability which in the aggregate may exceed Twenty Five Thousand and No/lOOths
Dollars ($25,000.00); or
(10) Provided the Borrower has actual notice, if the Bank receives its first
notice of a hazardous discharge or an environmental complaint from a source
other than the Borrower, and the Bank does not receive notice (which may be
given in oral form, provided same is followed with all due dispatch by written
notice given by Certified Mail, Return Receipt Requested) of such hazardous
discharge or environmental complaint from the Borrower within forty-eight (48)
hours of the time the Bank first receives said notice from a source other than
the Borrower; or if any federal, state, or local agency asserts or creates a
lien upon any or all of the assets, equipment, property, leaseholds, or other
facilities of the Borrower by reason of the occurrence of a hazardous discharge
or an environmental complaint; or if any federal, state, or local agency asserts
a claim against the Borrower or the Guarantors and/or its assets, equipment,
property, leaseholds, or other facilities for damages or cleanup costs relating
to a hazardous discharge or any environmental
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complaint; provided, however, that such claim shall not constitute a default if,
within five (5) Business Days of the occurrence giving rise to the claim, (a)
the Borrower can prove to the Bank's satisfaction that the Borrower has
commenced and is diligently pursuing either: (i) a cure or correction of the
event which constitutes the basis for the claim, and continues diligently to
pursue such cure or correction to completion or (ii) proceedings for an
injunction, a restraining order, or other appropriate emergency relief
preventing such agency or agencies from asserting such claim, which relief is
granted within ten (10) Business Days of the occurrence giving rise to the claim
and the injunction, order, or emergency relief is not thereafter resolved or
reversed on appeal; and (b) in either of the foregoing events, the Borrower has
posted a bond, letter of credit, or other security satisfactory in form,
substance, and amount of both the Bank and the agency or entity asserting the
claim to secure the proper and complete cure or correction of the event which
constitutes the basis for the claim;
then, and in any such event, the Bank may, (1) declare its obligation to
make Loans to be terminated whereupon the same shall forthwith terminate, and
(2) declare the outstanding Notes, all interest thereon, and all other amounts
payable under this Agreement to be forthwith due and payable, without
presentment, demand, protest, or further notice of any kind, all of which are
hereby expressly waived by the Borrower. Upon the occurrence and during the
continuance of any Event of Default, the Bank is hereby authorized at any time
and from time to time, without notice to the Borrower (and such notice being
expressly waived by the Borrower), to set off and apply and all deposits
(general or special, time or demand, provisional of final) at any time held and
other indebtedness at any time owing by the Bank to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement or the Note or any other Loan
Document, irrespective of whether or not the Bank shall have made any demand
under this Agreement or the Note or such other Loan Document and although such
obligations maybe unmatured. The Bank agrees promptly to notify the Borrower
after any such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application. The rights
of the Bank under this section 5.01 are in addition to other rights and remedies
(including, without limitation, other rights of setoff) which the Bank may have.
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ARTICLE VI
Power of Attorney: Waiver of Trial By Jury
In the event of a default, Borrower does hereby irrevocably appoint Bank as
attorney-in-fact, with full power of substitution, to execute proofs of claim,
to endorse any draft or other instrument for the payment of money, to execute
releases, to negotiate settlements, to cancel any insurance referred to herein,
and to do all other things necessary or required to effect a settlement under
any insurance policy. Borrower does also hereby waive the right of a jury trial
in any action or proceeding brought in any court by either party, or assigns,
arising out of the subject matter of this Agreement, the Collateral described
herein, or the Loan or other obligations secured hereby.
ARTICLE VII
General Provisions
7.1 This Agreement may not be changed, modified, or discharged, in whole or in
part, and no right of remedy of Bank hereunder or as a Secured Party under
the Uniform Commercial Code, may be waived by Bank unless such change,
modification, discharge, or waiver is in writing and signed on behalf of
Bank by a duly authorized officer. Invalidity of any provision of this
Agreement shall not affect the balance thereof.
7.2 The rights and benefits of bank hereunder shall inure to the benefit of its
successors and assigns and shall be binding upon the successors and assigns
of Borrower.
7.3 This Agreement and the rights and obligations of Bank and Borrower
hereunder shall be governed by and construed in accordance with the
internal laws of the State of Vermont and the courts of that state shall
have exclusive jurisdiction over any actions between the parties hereto.
7.4 In the event Bank seeks to take possession of any or all of the Collateral
by court process, Borrower hereby irrevocably waives any bond and any
surety or security relating thereto required by a statute, court rule, or
otherwise as an incident to such possession and waives any demand for
possession prior to the commencement of any suit or action to recover with
respect thereto.
7.5 In the event Bank is at any time required to turn over, disgorge, or repay
(whether to the undersigned, a Trustee in Bankruptcy, or to third parties)
any payments
16
<PAGE>
<PAGE>
previously received by Bank with respect to the Obligations (whether
received from the undersigned or third parties), then the amount of the
Obligations secured by the Collateral shall be increased by the amount so
turned over or disgorged by Bank, plus reasonable expenses incurred by Bank
in the process, to the same extent as if the amount in question, and the
expenses, had been advanced by the Bank at the inception of the Obligations
and had remained unpaid since that date, whether or not all Obligations and
otherwise been paid at the date of turn over, all of which shall be payable
immediately, without demand. If the Obligations had previously been paid in
full, this Agreement (notwithstanding any of the terms hereof) shall be
deemed revived and in full effect with respect to such payments.
7.6 The descriptive headings of the several sections of this Agreement are
inserted for convenience only and shall not be deemed to affect the meaning
or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereunto cause their respective names to be
affixed this 30th day of June. 1997.
In The Presence Of: ASCUTNEY MOUNTAIN RESORT, L.P.
By its general partner,
Snowdance Ski Company
[Signature illegible] By: /s/ SUSAN D. PLAUSTEINER
- --------------------------- -----------------------------
Witness Susan D. Plausteiner,
President
17
<PAGE>
<PAGE>
ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.
By its general partner,
Snowdance Ski Company
[Signature illegible] By: /s/ SUSAN D. PLAUSTEINER
- --------------------------- -----------------------------
Witness to Susan D. Plausteiner,
President
[Signature illegible] By: /s/ STEVEN H. PLAUSTEINER
- --------------------------- -----------------------------
Witness to Steven H. Plausteiner,
Guarantor
[Signature illegible] By: /s/ SUSAN D. PLAUSTEINER
- --------------------------- -----------------------------
Witness to Susan D. Plausteiner, Guarantor
MASCOMA SAVINGS BANK, fsb
[Signature illegible] By: /s/ DAVID G. WILSON
- --------------------------- -----------------------------
Witness to David G. Wilson, Vice President
Duly Authorized
18
<PAGE>
<PAGE>
PROMISSORY NOTE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$1,500,000.00 06-30-1997 06-30-1998 27027106 1E 204 DGW
- ----------------------------------------------------------------------------------------------------------
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Borrower: ASCUTNEY MOUNTAIN RESORT, L.P. (TIN: Lender: MASCOMA SAVINGS BANK, fsb
03-0339700); ET. AL. GATES STREET OFFICE
ROUTE 44, P.O. BOX 699 10 GATES STREET
BROWNSVILLE, VT 05037 PO BOX 424
WHITE RIVER JCT., VT 05001
</TABLE>
- --------------------------------------------------------------------------------
NOTICE TO COSIGNER: YOUR SIGNATURE ON THIS NOTE MEANS THAT YOU ARE EQUALLY
LIABLE FOR REPAYMENT OF THIS LOAN. IF THE BORROWER DOES NOT PAY, THE LENDER HAS
A LEGAL RIGHT TO COLLECT FROM YOU.
- --------------------------------------------------------------------------------
Principal Amount: $1,500,000.00 Initial Rate: 10.250%
Date of Note: June 30, 1997
PROMISE TO PAY. ASCUTNEY MOUNTAIN RESORT, L.P. and ASCUTNEY MOUNTAIN RESORT
HOTEL, L.P. (referred to in this Note individually and collectively as
"Borrower") jointly and severally promise to pay to MASCOMA SAVINGS BANK, fsb
("Lender"), or order, in lawful money of the United States of America, the
principal amount of One Million Five Hundred Thousand & 00/100 Dollars
($1,500,000.00) or so much as may be outstanding, together with interest on the
unpaid outstanding principal balance of each advance. Interest shall be
calculated from the date of each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on June 30, 1998. In addition, Borrower will
pay regular monthly payments of accrued unpaid interest beginning July 30, 1997,
and all subsequent interest payments are due on the same day of each month after
that. Interest on this Note is computed on a 365/366 simple interest basis: that
is, by applying the ratio of the annual interest rate over the number of days in
a year, multiplied by the outstanding principal balance, multiplied by the
actual number of days the principal balance is outstanding. Borrower will pay
Lender at Lender's address shown above or at such other place as Lender may
designate in writing. Unless otherwise agreed or required by applicable law,
payments will be applied first to accrued unpaid interest, then to principal,
and any remaining amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an independent index which is the Wall Street
Journal Prime (the "Index"). The Index is not necessarily the lowest rate
charged by Lender on its loans. If the Index becomes unavailable during the term
of this loan, Lender may designate a substitute Index after notice to Borrower.
Lender will tell Borrower the current Index rate upon Borrower's request.
Borrower understands that Lender may make loans based on other rates as well.
The interest rate change will not occur more often than each month. The index
currently is 8.500% per annum. The interest rate to be applied to the unpaid
principal balance of this Note will be at a rate of 1.750 percentage points
over the Index, resulting in an initial rate of 10.250% per annum. NOTICE:
Under no circumstances will the interest rate on this Note be more than the
maximum rate allowed by applicable law.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges
are earned fully as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of default), except as
otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower's obligation to continue to make payments of accrued unpaid interest.
Rather, they will reduce the principal balance due.
<PAGE>
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Borrower defaults under any loan, extension of credit,
security agreement, purchase or sales agreement, or any other agreement, in
favor of any other creditor or person that may materially affect any of
Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Any partner dies or any of the partners or
Borrower becomes insolvent, a receiver is appointed for any part of Borrower's
property. Borrower makes an assignment for the benefit of creditors, or any
proceeding is commenced either by Borrower or against Borrower under any
bankruptcy or insolvency laws. (f) Any creditor tries to take any of Borrower's
property on or in which Lender has a lien or security interest. This includes a
garnishment of any of Borrower's accounts with Lender. (g) Any of the events
described in this default section occurs with respect to any general partner of
Borrower or any guarantor of this Note. (h) A material adverse change occurs in
Borrower's financial condition, or Lender believes the prospect of payment or
performance of the indebtedness is impaired. (i) Lender in good faith deems
itself insecure.
If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Note within
the preceding twelve (12) months, it may be cured (and no event of default will
have occurred) if Borrower, after receiving written notice from Lender demanding
cure of such default: (a) cures the default within ten (10) days; or (b) if the
cure requires more than ten (10) days, immediately initiates steps which Lender
deems in Lender's sole discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and necessary steps sufficient
to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Lender may hire or pay someone
else to help cancel this Note if Borrower does not pay. Borrower also will pay
Lender that amount. This includes, subject to any limits under applicable law,
Lender's attorneys' fees and Lender's legal expenses whether or not there is a
lawsuit, including attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services. If
not prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law. This Note has been delivered to
Lender and accepted by Lender in the State of Vermont. If there is a lawsuit,
Borrower agrees upon Lender's request to submit to the jurisdiction of the
courts of WINDSOR County, the State of Vermont. Lender and Borrower hereby waive
the right to any jury trial in any action, proceeding, or counterclaim brought
by either Lender or Borrower against the other. This Note shall be governed by
and construed in accordance with the laws of the State of Vermont.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA and Keogh accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on this Note against any and
all such accounts.
COLLATERAL. This Note is secured by A FIRST MORTGAGE ON COMMERCIAL PROPERTY
LOCATED ON ROUTE 44, WEST WINDSOR, VT LAND AND BUILDINGS AND INFRASTRUCTURE
KNOWN AS THE ASCUTNEY MOUNTAIN RESORT, FIRST MORTGAGE ON COMMERCIAL PROPERTY
LOCATED ON ROUTE 44, WEST WINDSOR, VT AND BUILDINGS AND INFRASTRUCTURE KNOWN AS
THE ASCUTNEY MOUNTAIN HOTEL COLLATERAL ASSIGNMENT OF ALL PLANS AND PERMITS OF
ASCUTNEY MOUNTAIN RESORT ASCUTNEY MOUNTAIN HOTEL; ALL BUSINESS ASSETS AS
DESCRIBED IN A SECURITY AGREEMENT OF EVEN DATE, A FIRST AND EXCLUSIVE LIEN BY
ASSIGNMENT OF THE RENTS, LEASES AND PROFITS WHICH MAY FROM TIME TO TIME BE
REALIZED IN CONNECTION WITH THE PROPERTY.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note may be requested either orally or in writing by Borrower or by an
authorized person. Lender may, but need not, require that all oral requests be
confirmed in writing. All communications, instructions, or directions by
telephone or otherwise to Lender are to be directed to Lender's office shown
above. The following party or parties are authorized to request advances under
the line of credit until Lender receives from Borrower at Lender's address shown
above written notice of revocation of their authority: STEVEN H. PLAUSTEINER,
PRINCIPAL; and SUSAN D. PLAUSTEINER, PRINCIPAL. Borrower agrees to be liable for
all sums either: (a) advanced in accordance with the instructions of an
authorized person or (b) credited to any of Borrower's accounts with Lender. The
unpaid principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lender's internal records, including daily
computer print-outs. Lender will have no obligation to advance funds under this
Note if (a) Borrower or any guarantor is in default under the terms of this Note
or any agreement that Borrower or any guarantor has with Lender, including any
agreement made in connection with the signing of this Note; (b) Borrower or any
guarantor ceases doing business or is insolvent; (c) any guarantor seeks,
claims or otherwise attempts to limit, modify or revoke such guarantor's
guarantee of this Note or any other loan with Lender; (d) Borrower has applied
funds provided pursuant to this Note for purposes other than those authorized by
Lender; or (e) Lender in good faith deems itself insecure under this Note or any
other agreement between Lender and Borrower.
ANNUAL CLEAN-UP PROVISION. DURING THE TERM OF THIS REVOLVING LINE OF CREDIT
NOTE, ALL PRINCIPAL AMOUNTS ADVANCED HEREUNDER, TOGETHER WITH INTEREST THEREON,
SHALL BE PAID IN FULL FOR THIRTY (30) CONSECUTIVE DAYS.
DEFAULT RATE. BEGINNING WITH THE DATE OF MATURITY OR FROM THE DATE OF DEFAULT
INTEREST SHALL ACCRUE AT THE RATE OF
<PAGE>
<PAGE>
06-30-1997 PROMISSORY NOTE Page 2
Loan No 27027106 (Continued)
- --------------------------------------------------------------------------------
EIGHTEEN PERCENT (18.0%) PER ANNUM ON THE UNPAID PRINCIPAL.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Each Borrower understands and
agrees that, with or without notice to Borrower, Lender may with respect to any
other Borrower (a) make one or more additional secured or unsecured loans or
otherwise extend additional credit; (b) alter, compromise, renew, extend,
accelerate, or otherwise change one or more times the time for payment or other
terms any indebtedness, including increases and decreases of the rate of
interest on the indebtedness; (c) exchange, enforce, waive, subordinate, fail or
decide not to perfect, and release any security, with or without the
substitution of new collateral; (d) apply such security and direct the order or
manner of sale thereof, including without limitation, any nonjudicial sale
permitted by the terms of the controlling security agreements, as Lender in its
discretion may determine; (e) release, substitute, agree not to sue, or deal
with any one or more of Borrower's sureties, endorsers, or other guarantors on
any terms or in any manner Lender may choose; and (f) determine how, when and
what application of payments and credits shall be made on any other indebtedness
owing by such other borrower. Borrower and any other person who signs,
guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise expressly slated in writing, no
party who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan, or
release any party, partner, or guarantor or collateral; or impair, fail to
realize upon or perfect Lender's security interest in the collateral; and take
any other action deemed necessary by Lender without the consent of or notice to
anyone. All such parties also agree that Lender may modify this loan without the
consent of or notice to anyone other than the party with whom the modification
is made. The obligations under this Note are joint and several.
PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. EACH BORROWER
AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF
THE NOTE.
BORROWER:
ASCUTNEY MOUNTAIN RESORT, L.P.
By: /s/ SUSAN D. PLAUSTEINER
-------------------------------------------------
SNOWDANCE SKI COMPANY, General Partner, SUSAN D. PLAUSTEINER, PRESIDENT
ASCUTNEY MOUNTAIN RESORT HOTEL, L.P., Co-Borrower
By: /s/ SUSAN D. PLAUSTEINER
-------------------------------------------------
SNOWDANCE HOTEL COMPANY, SUSAN D. PLAUSTEINER, PRESIDENT
Signed, acknowledged and delivered in the presence of:
x [signature illegible]
----------------------------------------------------
Witness
x [signature illegible]
----------------------------------------------------
Witness
================================================================================
<PAGE>
<PAGE>
COMMERCIAL GUARANTY
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
1E 204 DGW
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<S> <C>
Borrower: ASCUTNEY MOUNTAIN RESORT, L.P. (TIN: Lender: MASCOMA SAVINGS BANK, fsb
03-0339700); ET. AL. GATES STREET OFFICE
ROUTE 41, P.O. BOX 699 10 GATES STREET
BROWNSVILLE, VT 05037 PO BOX 426
WHITE RIVER JCT., VT 05001
Guarantor: SUSAN D. PLAUSTEINER
COACHING LANE
BROWNSVILLE, VT 05037
</TABLE>
- --------------------------------------------------------------------------------
AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited.
CONTINUING UNLIMITED GUARANTY. For good and valuable consideration, SUSAN D.
PLAUSTEINER ("Guarantor" absolutely and unconditionally guarantees and promises
to pay to MASCOMA SAVINGS BANK, fsb ("Lender") or its order, in legal tender of
the United States of America, the Indebtedness (as that term is defined below)
of ASCUTNEY MOUNTAIN RESORT, L.P. and ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.
("Borrower") to Lender on the terms and conditions set forth in this Guaranty.
Under this Guaranty, the liability of Guarantor is unlimited and the obligations
of Guarantor are continuing.
DEFINITIONS. The following words shall have the following meanings when used in
this Guaranty:
Borrower. The word "Borrower" means ASCUTNEY MOUNTAIN RESORT, L.P. and
ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.
Guarantor. The word "Guarantor" means SUSAN D. PLAUSTEINER.
Guaranty. The word "Guaranty" means this Guaranty made by Guarantor for
the benefit of Lender dated June 30, 1997.
Indebtedness. The word "Indebtedness" is used in its most comprehensive
sense and means and includes any and all of Borrower's liabilities,
obligations, debts and indebtedness to Lender, now existing or hereinafter
incurred or created, including, without limitation, all loans, advances,
interest, costs, debts, overdraft indebtedness, credit card indebtedness,
lease obligations, other obligations, and liabilities of Borrower, or any of
them, and any present of future judgments against Borrower, or any of them;
and whether any such indebtedness is voluntarily or involuntarily incurred,
due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, whether Borrower may be liable individually or
jointly with others, or primarily or secondarily, or as guarantor or surety;
whether recovery on the indebtedness may be or may become barred or
unenforceable against Borrower for any reason whatsoever; and whether the
indebtedness arises from transactions which may be voidable on account of
infancy, insanity, ultra vires or otherwise.
Lender. The word "Lender" means MASCOMA SAVINGS BANK, fsb, its successors
and assigns.
Related Documents. The words "Related Documents" means and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guarantees, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the indebtedness.
NATURE OF GUARANTY. Guarantor's liability under this Guaranty shall be open and
continuous for so long as this Guaranty remains in force. Guarantor intends to
guarantee at all times the performance and prompt payment when due, whether at
maturity or earlier by reason of acceleration or otherwise, of all indebtedness.
Accordingly, no payments made upon the indebtedness will discharge or diminish
the continuing liability of Guarantor in connection with any remaining portions
of the indebtedness or any of the indebtedness which subsequently arises or is
thereafter incurred or contracted.
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor or
to Borrower, and will continue in full force until all indebtedness incurred or
contracted before receipt by Lender of any notice of revocation shall have been
fully and finally paid and satisfied and all other obligations of Guarantor
under this Guaranty shall have been performed in full. If Guarantor elects to
revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written
notice of revocation must be mailed to Lender, by certified mail, at the address
of Lender listed above or such other place as Lender may designate in writing.
Written revocation of the Guaranty will apply only to advances or new
indebtedness created after actual receipt by Lender of Guarantor's written
revocation. For this purpose and without limitation, the term "new indebtedness"
does not include indebtedness which at the time of notice of revocation is
contingent, unliquidated, undetermined or not due and which later becomes
absolute, liquidated, determined or due. This Guaranty will continue to bind
Guarantor for indebtedness incurred by Borrower or committed by Lender prior to
receipt of Guarantor's written notice of revocation, including any extension,
renewals, substitutions or modifications of the indebtedness. All renewals,
extensions, substitutions, and modifications of the indebtedness granted after
Guarantor's revocation, are contemplated under this Guaranty and, specifically
will not be considered to be new indebtedness. This Guaranty shall bind the
estate of Guarantor as to indebtedness created both before and after the death
or incapacity of Guarantor, regardless of Lender's actual notice of Guarantor's
death. Subject to the foregoing, Guarantor's executor or administrator or other
legal representative may terminate this Guaranty in the same manner in which
Guarantor might have terminated it and with the same effect. Release of any
other guarantor or termination of any other guaranty of the indebtedness
shall not affect the liability of Guarantor under this Guaranty. A revocation
received by Lender from any one or more Guarantors shall not effect the
liability of any remaining Guarantors under this Guaranty. It is anticipated
that fluctuations may occur in this aggregate amount of indebtedness covered by
this Guaranty, and it is specifically acknowledged and agreed by Guarantor that
reductions in the amount of indebtedness, even to zero dollars ($0.00), prior to
written revocation of this Guaranty by Guarantor shall not constitute
termination of this Guaranty. This Guaranty is binding upon Guarantor and
Guarantor's heirs, successors and assigns so long as any of the guaranteed
indebtedness remains unpaid and even though the indebtedness guaranteed may from
time to time be zero dollars ($0.00).
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before
or after any revocation hereof, without notice, demand and without lessening
Guarantor's liability under this Guaranty, from time to time: (a) prior to
revocation as set forth above, to mail one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to Borrower, or
otherwise to extend additional credit to Borrower; (b) to alter, compromise,
renew, extend, accelerate, or otherwise change one or more times the time for
payment or other terms of the indebtedness or any part of the indebtedness,
including increases and decreases of the rate of interest on the indebtedness,
extensions may be repeated and may be for longer than the original loan term;
(c) to take and hold security for the payment this Guaranty or the Indebtedness,
and exchange, enforce, waive, subordinate, fail or decide not to perfect, and
release any such securities with or without the substitution of new collateral;
(d) to release, substitute, agree not to sue, or deal with any one or more of
Borrower sureties, endorsers, or other guarantors on any terms or in any manner
Lender may choose; (e) to determine how, when and what application of
payments and credits shall be made on the indebtedness; (f) to apply such
security and direct the order or manner of sale therefore including without
limitation, any nonjudicial sale permitted by the terms of the controlling
security agreement of deed of trust, as Lender in ?? discretion may determine;
(g) to sell, transfer, assign, or grant participations in all or any part of the
indebtedness; and (h) to assign transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to
Lender that (a) no representations or agreements of any kind have been made to
Guarantor which would limit or qualify in any way the terms of this Guaranty.
(b) this Guaranty is executed Borrower's request and not at the request of
lender; (c) Guarantor has full power, right and authority to enter into this
Guaranty; (d) the provisions in this Guaranty do not conflict with or result in
a default under any agreement or other instrument binding upon Guarantor and do
not result in a violation of any law, regulation, court decree or order
applicable to Guarantor; (e) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer,
or otherwise dispose of all or substantially all of Guarantor's assets, or any
interest therein; (f) upon Lender's request, Guarantor will provide to Lender
financial and credit information in a form acceptable to Lender, and all such
financial information which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects are likely present the financial condition of Guarantor as
of the dates the financial information is provided; (g) no material adverse
change has occurred, Guarantor's financial condition since the date of the most
recent financial statements provided to Lender and no event has occurred which
may materially adversely affect Guarantor's financial condition; (h) no
litigation, claim, investigation, administrative prior pending or similar action
(including those for unpaid taxes) against Guarantor is pending or threatened,
(i) Lender has made no representation to Guarantor as to the creditworthiness of
Borrower; and (j) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower's financial
condition. Guarantor agrees to keep adequately informed and such means of any
facts, events, or circumstances which might in any way affect Guarantor's risks
under this Guaranty, and Guarantor further agrees that, absent a inquest for
information, Lender shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of its relationship
with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender (a) to continue lending money or extend other credit
to Borrower; (b) to make any presentment, protest, demand, or notice of any
kind, including notice of any nonpayment of its indebtedness or of any
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surety, endorsement or other guarantor in
connection with the indebtedness or in connection with the creation of new or
additional loans or obligations; (c) to resort to payment or to proceed directly
or at once against any person, including Borrower or any other guarantor, (d) to
proceed directly against or exhaust a
<PAGE>
<PAGE>
06-30 1997 COMMERCIAL GUARANTY Page 2
Loan No 27027106 (Continued)
- --------------------------------------------------------------------------------
collateral held by Lender from Borrower, any other guarantor, or any other
person; (3) to give notice of the terms, time, and place of any public or
private sale of personal property security held by Lender from Borrower or to
comply with any other applicable provisions of the Uniform Commercial Code; (f)
to pursue any other remedy within Lender's power; or (g) to commit any act or
omission of any kind, or at any time, with respect to any matter whatsoever
Guarantor also waives any and all rights or defenses arising by reason of (a)
any "one action" or "anti-deficiency" law or any other law which may prevent
Lender from bringing any action, including a claim for deficiency, against
Guarantor, before or after Lender's commencement or completion of any
foreclosure action, either judicially or by exercise of a power of sale; (b) any
election of remedies by Lender which destroys or otherwise adversely affects
Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower
for reimbursement, including without limitation, any loss of rights Guarantor
may suffer by reason of any law limiting, qualifying, or discharging the
indebtedness; (c) any disability or other defense of Borrower, of any other
guarantor, or of any other person, or by reason of the cessation of Borrower's
liability from any cause whatsoever, other than payment in full in legal lender,
of the indebtedness; (d) any right to claim discharge of the indebtedness on the
basis of unjustified impairment of any collateral for the indebtedness: (e) any
statute of limitations, if at any time any action or suit brought by Lender
against Guarantor is commenced there is outstanding indebtedness of Borrower to
Lender which is not barred by any applicable statute of limitations; or (f) any
defenses given to guarantors at law or in equity other than actual payment and
performance of the indebtedness. If payment is made by Borrower, whether
voluntarily or otherwise, or by any third party, on the indebtedness and
thereafter Lender is forced to remit the amount of that payment to Borrower's
trustee in bankruptcy or to any similar person under any federal or state
bankruptcy law or law for the relief of debtors, the indebtedness shall be
considered unpaid for the purpose of enforcement of this Guaranty.
Guarantor further waives and agrees not to assert or claim at any time any
deductions to the amount guaranteed under this Guaranty for any claim of setoff,
counterclaim, counter demand, recoupment or similar right, whether such claim,
demand or right may be asserted by the Borrower, the Guarantor, or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees
that each of the waivers set forth above is made with Guarantor's full knowledge
of its significance and consequences and that, under the circumstances, the
waivers are reasonable and not contrary to public policy or law. If any such
waiver is determined to be contrary to any applicable law or public policy, such
waiver shall be effective only to the extent permitted by law or public policy.
LENDER'S RIGHT OF SETOFF. In addition to all liens upon and rights of setoff
against the moneys, securities or other property of Guarantor given to Lender by
law, Lender shall have, with respect to Guarantor's obligations to Lender under
this Guaranty and to the extent permitted by law, a contractual possessory
security interest in and a right of setoff against, and Guarantor hereby
assigns, conveys, delivers, pledges, and transfers to Lender all of Guarantor's
right, title and interest in and to, all deposits, moneys, securities and other
property of Guarantor now or hereafter in the possession of or on deposit with
Lender, whether held in a general or special account or deposit, whether held
jointly with someone else, or whether held for safekeeping or otherwise,
excluding however all IRA, Keogh, and trust accounts. Every such security
interest and right of setoff may be exercised without demand upon or notice to
Guarantor. No security interest or right of setoff shall be deemed to have been
waived by any act or conduct on the part of Lender or by any neglect to exercise
such right of setoff or to enforce such security interest or by any delay in so
doing. Every right of setoff and security interest shall continue in full force
and effect until such right of setoff or security interest is specifically
waived or released by an instrument in writing executed by Lender.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
indebtedness of Borrower to Lender, whether now existing or hereafter created,
shall be prior to any claim that Guarantor may now have or hereafter acquire
against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby
expressly subordinates any claim Guarantor may have against Borrower, upon any
account whatsover, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy by an assignment for the benefit of creditors, by
voluntary liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Lender and Guarantor shall be paid to Lender and
shall be first applied by Lender to the indebtedness of Borrower to Lender.
Guarantor does hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of Borrower;
provided however that such assignment shall be effective only for the purpose of
assuring to Lender full payment in legal tender of the indebtedness. If Lender
so requests, any notes or credit agreements now or hereafter evidencing any
debts or obligations of Borrower to Guarantor shall be marked with a legend that
the same are subject to this Guaranty and shall be delivered to Lender.
Guarantor agrees, and Lender hereby is authorized, in the name of Guarantor,
from time to time to execute and file financing statements and continuing
statements and to execute such other documents and to take such other actions as
Lender deems necessary or appropriate to perfect, preserve and enforce its
rights under this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:
Amendments. This Guaranty, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Guaranty. No alteration of or amendment to
this Guaranty shall be effective unless given in writing and signed by
the party or parties sought to be charged or bound by the alterations or
amendment.
Applicable Law. This Guaranty has been delivered to Lender and accepted
by Lender in the State of Vermont. If there is a lawsuit, Guarantor
agrees upon Lender's request to submit to the jurisdiction of the courts
of WINDSOR County, State of Vermont. Lender and Guarantor hereby waive
the right to any jury trial in any action, proceeding, or counterclaim
brought by either Lender or Guarantor against the other. This Guaranty
shall be governed by and construed in accordance with the laws of the
State of Vermont.
Attorney's Fees; Expenses. Guarantor agrees to pay upon demand all of
Lender's costs and expenses. Including attorney's fees and Lender's
legal expenses, incurred in connection with the enforcement of this
Guaranty. Lender may pay someone else to help enforce this Guaranty, and
Guarantor shall pay the costs and expenses of such enforcement. Costs
and expenses include Lender's attorney's fees and legal expenses whether
or not there is a lawsuit, including attorney's fees and legal expenses
for bankruptcy proceedings (and including efforts to modify or vacate
any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Guarantor also shall pay all court
costs and such additional fees as may be directed by the court.
Notices. All notices required to be given by either party to the other
under this Guaranty shall be in writing, may be sent by telefacsimile,
and, except for revocation notices by Guarantor, shall be effective when
actually delivered or when deposited with a nationally recognized
overnight courier, or when deposited in the United States mail, first
class postage prepaid, addressed to the party to whom the notice is to
be given at the address shown above or to such other addresses as either
party may designate to the other in writing. All revocation notices by
Guarantor shall be in writing and shall be effective only upon delivery
to Lender as provided above in the section titled "DURATION OF
GUARANTY." If there is more than one Guarantor, notice to any Guarantor
will constitute notice to all Guarantors. For notice purposes, Guarantor
agrees to keep Lender informed at all times of Guarantor's current
address.
Interpretation. In all cases where there is more than one Borrower or
Guarantor, then all words used in this Guaranty in the singular shall be
deemed to have been used in the plural where the context and
construction so require; and where there is more than one Borrower named
in this Guaranty or when this Guaranty is executed by more than one
Guarantor, the words "Borrower" and "Guarantor" respectively shall mean
all and any one or more of them. The words "Guarantor," "Borrower," and
"Lender" include the heirs, successors, assigns, and transferees of each
of them. Caption headings in this Guaranty are for convenience purposes
only and are not to be used to interpret or define the provisions of
this Guaranty. If a court of competent jurisdiction finds any provision
of this Guaranty to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances, and all
provisions of this Guaranty in all other respects shall remain valid and
enforceable. If any one or more of Borrower or Guarantor are
corporations or partnerships, it is not necessary for Lender to
inquire into the powers of Borrower or Guarantor or of the officers,
directors, partners, or agents acting or purporting to act on their
behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this
Guaranty.
Waiver. Lender shall not be deemed to have waived any rights under this
Guaranty unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall
operate as a waiver of such right or any other right. A waiver by Lender
of a provision of this Guaranty shall not prejudice or constitute a
waiver of Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Guaranty. No prior waiver by
Lender, nor any course of dealing between Lender and Guarantor, shall
constitute a waiver of any of Lender's rights or of any of Guarantor's
obligations as to any future transactions. Whenever the consent of
Lender is required under this Guaranty, the granting of such consent by
Lender in any instance shall not constitute continuing consent to
subsequent instances where such consent is required and in all cases
such consent may be granted or withheld in the sole discretion of
Lender.
<PAGE>
<PAGE>
06-30-1997 COMMERCIAL GUARANTY Page 3
Loan No 27027106 (Continued)
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EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED JUNE 30, 1997.
GUARANTOR:
/s/SUSAN PLAUSTEINER
- ----------------------------
SUSAN PLAUSTEINER
Signed, acknowledged and delivered in the presence of:
/s/ CURTIS BOWDIN
- -----------------------------
Witness
/s/ [signature illegible]
- -----------------------------
Witness
- --------------------------------------------------------------------------------
INDIVIDUAL ACKNOWLEDGMENT
STATE OF VERMONT )
)ss
COUNTY OF WINDSOR )
BE IT REMEMBERED that on the 30th day of June, 1997 personally appeared SUSAN D.
PLAUSTEINER, signer and sealer of the foregoing written instrument and
acknowledged the same to be his or her free act and deed.
Before me: /s/ CURTIS BOWDIN
--------------------------------
Notary Public
- --------------------------------------------------------------------------------
[Copy Illegible]
<PAGE>
<PAGE>
COMMERCIAL GUARANTY
<TABLE>
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
1E 204 DGW
- ---------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this
document to any particular loan or item.
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Borrower: ASCUTNEY MOUNTAIN RESORT, L.P. (TIN: Lender: MASCOMA SAVINGS BANK, fsb
03-0339700); ET. AL. GATES STREET OFFICE
ROUTE 44, P.O. BOX 699 10 GATES STREET
BROWNSVILLE, VT 05037 PO BOX 426
WHITE RIVER JCT., VT 05001
Guarantor: STEVEN H. PLAUSTEINER
COACHING LANE
BROWNSVILLE, VT 05037
=========================================================================================================
</TABLE>
AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited.
CONTINUING UNLIMITED GUARANTY. For good and valuable consideration, STEVEN H.
PLAUSTEINER ("Guarantor") absolutely and unconditionally guarantees and promises
to pay to MASCOMA SAVINGS BANK, fsb ("Lender") or its order, in legal tender of
the United States of America, the indebtedness (as that term is defined below)
of ASCUTNEY MOUNTAIN RESORT, L.P. and ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.
("Borrower") to Lender on the terms and conditions set forth in this Guaranty.
Under this Guaranty, the liability of Guarantor is unlimited and the obligations
of Guarantor are continuing.
DEFINITIONS. The following words shall have the following meanings when used in
this Guaranty:
Borrower. The word "Borrower" means ASCUTNEY MOUNTAIN RESORT, L.P. and
ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.
Guarantor. The word "Guarantor" means STEVEN H. PLAUSTEINER.
Guaranty. The word "Guaranty" means this Guaranty made by Guarantor for the
benefit of Lender dated June 30, 1997.
Indebtedness. The word "Indebtedness" is used in its most comprehensive
sense and means and includes any and all of Borrower's liabilities,
obligations, debts, and indebtedness to Lender, now existing or hereinafter
incurred or created, including, without limitation, all loans, advances,
interest, costs, debts, overdraft indebtedness, credit card indebtedness,
lease obligations, other obligations, and liabilities of Borrower, or any
of them, and any present or future judgments against Borrower, or any of
them; and whether any such indebtedness is voluntarily or involuntarily
incurred, due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, whether Borrower may be liable
individually or jointly with others, or primarily or secondarily, or as
guarantor or surety; whether recovery on the indebtedness may be or may
become barred or unenforceable against Borrower for any reason whatsoever;
and whether the indebtedness arises from transactions which may be
voidable on account of infancy, insanity, ultra vires, or otherwise.
Lender. The word "Lender" means MASCOMA SAVINGS BANK, fsb, its successors
and assigns.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and documents, whether now
or hereinafter existing, executed in connection with the indebtedness.
NATURE OF GUARANTY. Guarantor's liability under this Guaranty shall be open and
continuous for so long as this Guaranty remains in force. Guarantor intends to
guarantee at all times the performance and prompt payment when due, whether at
maturity or earlier by reason of acceleration or otherwise, of all indebtedness.
Accordingly, no payments made upon the indebtedness will discharge or diminish
the continuing liability of Guarantor in connection with any remaining portions
of the indebtedness or any of the indebtedness which subsequently arises or is
thereafter incurred or contracted.
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor or
to Borrower, and will continue in full force until all indebtedness incurred or
contracted before receipt by Lender of any notice of revocation shall have been
fully and finally paid and satisfied and all other obligations of Guarantor
under this Guaranty shall have been performed in full. If Guarantor elects to
revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written
notice of revocation must be mailed to Lender, by certified mail, at the address
of Lender listed above or such other place as Lender may designate in writing.
Written revocation of this Guaranty will apply only to advances or new
indebtedness created after actual receipt by Lender of Guarantor's written
revocation. For this purpose and without invitation, the term "new indebtedness"
does not include indebtedness which at the time of notice of revocation is
contingent, unliquidated, undetermined or not due and which later becomes
absolute, liquidated, determined or due. This Guaranty will continue to bind
Guarantor for all indebtedness incurred by Borrower or committed by Lender prior
to receipt of Guarantor's written notice of revocation, including any
extensions, renewals, substitutions or modifications of the indebtedness. All
renewals, extensions, substitutions, and modifications of the indebtedness
granted after Guarantor's revocation, are contemplated under this Guaranty and,
specifically will not be considered to be new indebtedness. This Guaranty shall
bind the estate of Guarantor as to indebtedness created both before and after
the death or incapacity of Guarantor, regardless of Lender's actual notice of
Guarantor's death. Subject to the foregoing, Guarantor's executor or
administrator or other legal representative may terminate this Guaranty in the
same manner in which Guarantor might have terminated it and with the same
effect. Release of any other guarantor or termination of any other guaranty of
the indebtedness shall not affect the liability of Guarantor under this
Guaranty. A revocation received by Lender from any one or more Guarantors shall
not affect the liability of any remaining Guarantors under this Guaranty. It is
anticipated that fluctuations may occur in the aggregate amount of indebtedness
covered by this Guaranty, and it is specifically acknowledged and agreed by
Guarantor that reductions in the amount of indebtedness, even to zero dollars
($0.00), prior to written revocation of this Guaranty by Guarantor shall not
constitute a termination of this Guaranty. This Guaranty is binding upon
Guarantor and Guarantor's heirs, successors and assigns so long as any of the
guaranteed indebtedness remains unpaid and even though the indebtedness
guaranteed may from time to time be zero dollars ($0.00).
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before
or after any revocation hereof, without notice or demand and without lessening
Guarantor's liability under this Guaranty, from time to time: (a) prior to
revocation as set forth above, to make one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to Borrower, or
otherwise to extend additional credit to Borrower; (b) to alter, compromise,
renew, extend, accelerate, or otherwise change one or more times the time for
payment or other terms of the indebtedness or any part of the indebtedness,
including increases and decreases of the rate of interest on the indebtedness;
extensions may be repealed and may be for longer than the original loan term;
(c) to take and hold security for the payment of this Guaranty or the
indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to
perfect, and release any such security, with or without the substitution of new
collateral; (d) to release, substitute, agree not to sue, or deal with any one
or more of Borrower's sureties, endorsers, or other guarantors on any terms or
in any manner Lender may choose; (e) to determine how, when and what application
of payments and credits shall be made on the indebtedness; (f) to apply such
security and direct the order or manner of sale thereof, including without
limitation, any nonjudicial sale permitted by the terms of the controlling
security agreement or deed of trust, as Lender in its discretion may determine;
(g) to sell, transfer, assign, or grant participations in all or any part of the
indebtedness; and (h) to assign or transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to
Lender that (a) no representations or agreements of any kind have been made to
Guarantor which would limit or qualify in any way the terms of this Guaranty;
(b) this Guaranty is executed at Borrower's request and not at the request of
Lender; (c) Guarantor has full power, right and authority to enter into this
Guaranty; (d) the provisions of this Guaranty do not conflict with or result in
a default under any agreement or other instrument binding upon Guarantor and do
not result in a violation of any law, regulation, court decree or order
applicable to Guarantor; (e) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer,
or otherwise dispose of all or substantially all of Guarantor's assets, or any
interest therein; (f) upon Lender's request, Guarantor will provide to Lender
financial and credit information in form acceptable to Lender, and all such
financial information which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects and fairly present the financial condition of Guarantor
as of the dates the financial information is provided; (g) no material adverse
change has occurred in Guarantor's financial condition since the date of
the most recent financial statements provided to Lender and no event has
occurred which may materially adversely affect Guarantor's financial condition;
(h) no litigation, claim, investigation, administrative proceeding or similar
action (including those for unpaid taxes) against Guarantor is pending or
threatened; (i) Lender has made no representation to Guarantor as to the
creditworthiness of Borrower; and (j) Guarantor has established adequate means
of obtaining from Borrower on a continuing basis information regarding
Borrower's financial condition. Guarantor agrees to keep adequately informed
from such means of any facts, events, or circumstances which might in any way
affect Guarantor's risks under this Guaranty, and Guarantor further agrees that,
absent a request for information, Lender shall have no obligation to disclose to
Guarantor any information or documents acquired by Lender in the course of its
relationship with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender (a) to continue lending money or to extend other
credit to Borrower; (b) to make any presentment, protest, demand or notice of
any kind, including notice of any nonpayment of the indebtedness or of any
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surety, endorser, or other guarantor in
connection with the indebtedness or in connection with the creation of new or
additional loans or obligations; (c) to resort for payment or to proceed
directly or at once against any person, including Borrower or any other
guarantor; (d) to proceed directly against or exhaust any
<PAGE>
<PAGE>
06-30-1997 COMMERCIAL GUARANTY Page 2
Loan No 27027106 (Continued)
================================================================================
collateral held by Lender from Borrower, any other guarantor, or any other
person; (e) to give notice of the terms, time, and place of any public or
private sale of personal property security held by Lender from Borrower or to
comply with any other applicable provisions of the Uniform Commercial Code;
(f) to pursue any other remedy within Lender's power; or (g) to commit any act
or omission of any kind, or at any time, with respect to any matter whatsoever.
Guarantor also waives any and all rights or defenses arising by reason of (a)
any "one action" or "anti-deficiency" law or any other law which may prevent
Lender from bringing any action, including a claim for deficiency, against
Guarantor, before or after Lender's commencement or completion of any
foreclosure action, either judicially or by exercise of a power of sale; (b) any
election or remedies by Lender which destroys or otherwise adversely affects
Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower
for reimbursement, including without limitation, any loss of rights Guarantor
may suffer by reason of any law limiting, qualifying, or discharging the
indebtedness; (c) any disability or other defense of Borrower, of any other
guarantor, or of any other person, or by reason of the cessation of Borrower's
liability from any cause whatsoever, other than payment in full in legal tender,
of the indebtedness; (d) any right to claim discharge of the indebtedness on the
basis of unjustified impairment of any collateral for the indebtedness; (e) any
statute of limitations, if at any time any action or suit brought by Lender
against Guarantor is commenced there is outstanding indebtedness of Borrower to
Lender which is not barred by any applicable statute of limitations; or (f) any
defenses given to guarantors at law or in equity other than actual payment and
performance of the indebtedness. If payment is made by Borrower, whether
voluntarily or otherwise, or by any third party, on the indebtedness and
thereafter Lender is forced to remit the amount of that payment to Borrower's
trustee in bankruptcy or to any similar person under any federal or state
bankruptcy law or law for the relief of debtors, the indebtedness shall be
considered unpaid for the purpose of enforcement of this Guaranty.
Guarantor further waives and agrees not to assert or claim at any time any
deductions to the amount guaranteed under this Guaranty for any claim of setoff,
counterclaim, counter demand, recoupment or similar right, whether such claim,
demand or right may be asserted by the Borrower, the Guarantor, or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees
that each of the waivers set forth above is made with Guarantor's full
knowledge of its significance and consequences and that, under the
circumstances, the waivers are reasonable and not contrary to public policy or
law. If any such waiver is determined to be contrary to any applicable law or
public policy, such waiver shall be effective only to the extent permitted by
law or public policy.
LENDER'S RIGHT OF SETOFF. In addition to all liens upon and rights of setoff
against the moneys, securities or other property of Guarantor given to Lender by
law, Lender shall have, with respect to Guarantor's obligations to Lender under
this Guaranty and to the extent permitted by law, a contractual possessory
security interest in and a right of setoff against, and Guarantor hereby
assigns, conveys, delivers, pledges, and transfers to Lender all of Guarantor's
right, title and interest in and to, all deposits, moneys, securities and other
property of Guarantor now or hereafter in the possession of or on deposit with
Lender, whether held in a general or special account or deposit, whether held
jointly with someone else, or whether held for safekeeping or otherwise,
excluding however all IRA, Keogh, and trust accounts. Every such security
interest and right of setoff may be exercised without demand upon or notice to
Guarantor. No security interest or right of setoff shall be deemed to have been
waived by any act or conduct on the part of Lender or by any neglect to exercise
such right of setoff or to enforce such security interest or by any delay in so
doing. Every right of setoff and security interest shall continue in full force
and effect until such right of setoff or security interest is specifically
waived or released by an instrument in writing executed by Lender.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
indebtedness of Borrower to Lender, whether now existing or hereafter created,
shall be prior to any claim that Guarantor may now have or hereafter acquire
against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby
expressly subordinates any claim Guarantor may have against Borrower, upon any
account whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy, by an assignment for the benefit of creditors, by
voluntary liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Lender and Guarantor shall be paid to Lender and
shall be first applied by Lender to the indebtedness of Borrower to Lender.
Guarantor does hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of Borrower;
provided however, that such assignment shall be effective only for the purpose
of assuring to Lender full payment in legal tender of the indebtedness. If
Lender so requests, any notes or credit agreements now or hereafter evidencing
any debts or obligations of Borrower to Guarantor shall be marked with a legend
that the same are subject to this Guaranty and shall be delivered to Lender.
Guarantor agrees, and Lender hereby is authorized, in the name of Guarantor,
from time to time to execute and his financing statements and continuation
statements and to execute such other documents and to take such other actions as
Lender deems necessary or appropriate to perfect, preserve and enforce its
rights under this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:
Amendments. This Guaranty, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Guaranty. No alteration of or amendment to this Guaranty
shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.
Applicable Law. This Guaranty has been delivered to Lender and accepted by
Lender in the State of Vermont. If there is a lawsuit, Guarantor agrees
upon Lender's request to submit to the jurisdiction of the courts of
WINDSOR County, State of Vermont. Lender and Guarantor hereby waive the
right to any jury trial in any action, proceeding, or counterclaim brought
by either Lender or Guarantor against the other. This Guaranty shall be
governed by and construed in accordance with the laws of the State of
Vermont.
Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of
Lender's costs and expenses, including attorneys' fees and Lender's legal
expenses, incurred in connection with the enforcement of this Guaranty.
Lender may pay someone else to help enforce this Guaranty, and Guarantor
shall pay the costs and expenses of such enforcement. Costs and expenses
include Lender's attorneys' fees and legal expenses whether or not there is
a lawsuit, including attorneys' fees and legal expenses for bankruptcy
proceedings (and including efforts to modify or vacate any automatic stay
or injunction), appeals, and any anticipated post-judgment collection
services. Guarantor also shall pay all court costs and such additional fees
as may be directed by the court.
Notices. All notices required to be given by either party to the other
under this Guaranty shall be in writing, may be sent by telefacsimile, and,
except for revocation notices by Guarantor, shall be effective when
actually delivered or when deposited with a nationally recognized overnight
courier, or when deposited in the United States mail, first class postage
prepaid, addressed to the party to whom the notice is to be given at the
address shown above or to such other addresses as either party may
designate to the other in writing. All revocation notices by Guarantor
shall be in writing and shall be effective only upon delivery to Lender as
provided above in the section titled "DURATION OF GUARANTY." If there is
more than one Guarantor, notice to any Guarantor will constitute notice to
all Guarantors. For notice purposes, Guarantor agrees to keep Lender
informed at all times of Guarantor's current address.
Interpretation. In all cases where there is more than one Borrower or
Guarantor, then all words used in this Guaranty in the singular shall be
deemed to have been used in the plural where the context and construction
so require; and where there is more than one Borrower named in this
Guaranty or when this Guaranty is executed by more than one Guarantor, the
words "Borrower" and "Guarantor" respectively shall mean all and any one or
more of them. The words "Guarantor," "Borrower," and "Lender" include the
heirs, successors, assigns, and transferees of each of them. Caption
headings in this Guaranty are for convenience purposes only and are not to
be used to interpret or define the provisions of this Guaranty. If a court
of competent jurisdiction finds any provision of this Guaranty to be
invalid or unenforceable as to any person or circumstance, such finding
shall not render that provision invalid or unenforceable as to any other
persons or circumstances, and all provisions of this Guaranty in all other
respects shall remain valid and enforceable. If any one or more of Borrower
or Guarantor are corporations or partnerships, it is not necessary for
Lender to inquire into the powers of Borrower or Guarantor or of the
officers, directors, partners, or agents acting or purporting to act on
their behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this Guaranty.
Waiver. Lender shall not be deemed to have waived any rights under this
Guaranty unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall
operate as a waiver of such right or any other right. A waiver by Lender of
a provision of this Guaranty shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Guaranty. No prior waiver by Lender, nor any
course of dealing between Lender and Guarantor, shall constitute a waiver
of any of Lender's rights or of any of Guarantor's obligations as to any
future transactions. Whenever the consent of Lender is required under this
Guaranty, the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such consent is
required and in all cases such consent may be granted or withheld in the
sole discretion of Lender.
<PAGE>
<PAGE>
06-30-1997 COMMERCIAL GUARANTY Page 3
Loan No 27027106 (Continued)
================================================================================
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED JUNE 30, 1997.
GUARANTOR:
x /s/ STEVEN H. PLAUSTEINER
-----------------------------------
STEVEN H. PLAUSTEINER
Signed, acknowledged and delivered in the presence of:
X /s/ CURTIS BOWDIN
-----------------------------------
Witness
X [signature illegible]
-----------------------------------
Witness
- --------------------------------------------------------------------------------
INDIVIDUAL ACKNOWLEDGEMENT
STATE OF Vermont )
)ss
COUNTY OF Windsor )
BE IT REMEMBERED that on the 30th day of June, 1997, personally appeared STEVEN
H. PLAUSTEINER, signer and sealer of the foregoing written instrument and
acknowledged the same to be his or her free act and deed.
Before me: /s/ CURTIS BOWDIN
------------------------------
Notary Public
================================================================================
<PAGE>
<PAGE>
ESSEX COUNTY CLERK Instrument Number Recording Stamp
GRAPHIC
Type of document COLLATERAL SECURITY MORTGAGE
Party(ies) Mortgagor Town North Elba
Steven Plausteiner and
Susan Plausteiner
Consideration $700,000.
Party(ies) Mortgagee Transfer Tax Stamp
Mascoma Savings Bank, fsb
Mortgage Tax Stamp
Time Stamp
Record & Return to:
SMITH & SMITH
159 Main Street
Lake Placid, NY 12946
Recorded by:
-----------------
This sheet constitutes the Clerk endorsement required by section 316 A(5) for
the Real Property Law of the State of New York.
<PAGE>
<PAGE>
FORM 595 N.Y. COLLATERAL SECURITY MORTGAGE [GRAPHIC] TUTBLANX
Registered U.S. Pat. Office
Tuttle Law Print, Publishers
[Illegible]
THIS MORTGAGE
Made this day of , One thousand
nine hundred Ninety-seven,
Between STEVEN PLAUSTEINER and SUSAN PLAUSTEINER
PO Box 699
Brownsville, VT 05037
parties of the first part, hereinafter called the Mortgagor, and
MASCOMA SAVINGS BANK, fsb
10 Gates Street, PO Box 426, White River Junction, VT 05001
hereinafter called the Mortgagee, witnesseth; that
Whereas, the undersigned
now or may hereafter become indebted unto the Mortgagee.
Now this indenture witnesseth, that to secure the payment of such indebtedness,
and also for and in consideration of the sum of One Dollar to the Mortgagor
in hand paid by the Mortgagee, and of other good and valuable considerations,
the receipt whereof is hereby acknowledged, the Mortgagor mortgages to the
Mortgagee,
All that tract or parcel of land, situate in the Town of North Elba, County of
Essex, and State of New York, and more particularly described in SCHEDULE A
attached hereto and incorporated herein.
<PAGE>
<PAGE>
This grant is intended , continuing security for the payment where due of
any and all indebtedness or liability of any kind, whether direct or contingent,
or whether now due or hereafter to become due, which the Mortgagee now holds or
may hereafter hold against Steven Plausteiner and Susan Plausteiner
and all renewals or extensions thereof, or of any part thereof, to a principal
amount not to exceed at any one [illegible] (exclusive of interest, taxes,
assessments, water rates, insurance or other expenses paid or incurred by the
Mortgagee to preserve the mortgage lien)
Seven Hundred Thousand and no/100-----------------------------------------------
($700,000.00) Dollars,
And the said Mortgagor covenants with the Mortgagee as follows:
1. That the Mortgagor will pay the indebtedness as hereinbefore provided.
2. That the Mortgagor will keep the buildings on the premises insured
against loss by fire or such other hazards as the Mortgagee may require for the
benefit of the Mortgagee; that the Mortgagor will assign and deliver the
policies to the Mortgagee; and that the Mortgagor will reimburse the Mortgagee
for any premiums paid for insurance made by the Mortgagee on the Mortgagor's
default in so insuring the buildings or in so assigning and delivering the
policies.
3. That the Mortgagor warrants the title to the premises.
4. That the Mortgagor will pay all taxes, assessments or water rates, and
all payments which are or may become due on any prior mortgage on said premises,
and in default thereof, the Mortgagee may pay the same.
5. That the whole of said indebtedness shall immediately become due after
default in the payment of any part thereof, or of interest thereon or any part
thereof, or after any default in the payment of the principal or interest, or
any installment thereof, secured by any prior mortgage or other lien on said
premises, or after default for thirty days after notice and demand, in the
payment of any tax, water rate or assessment, anything herein contained to the
contrary notwithstanding.
6. That the whole of the indebtedness now or hereafter secured hereby shall
become immediately due and payable at the option of the said Mortgagee upon a
conveyance of the said premises, or any part thereof, or upon the actual or
threatened demolition or removal of any building upon said premises, or if such
buildings are not kept in good and rentable condition and repair, and no
building thereon shall be removed or demolished without the consent of the
Mortgagee.
7. That upon the making of an assignment for the benefit of creditors by,
or upon the filing of a petition in bankruptcy by or against the said Mortgagor
or any person or corporation whose indebtedness is secured hereby, or upon the
application for the appointment of a receiver of the property of the Mortgagor,
or any such person, or corporation, or of any person or corporation which may
become and be owner of the mortgaged premises, or upon any act of insolvency or
bankruptcy of the Mortgagor, or any such person or corporation, or of any such
owner, or upon the legal incapacity of the Mortgagor, or any such person or
corporation, or owner, or any of them, the whole of said indebtedness of every
kind and nature held by the Mortgagee and now or hereafter secured hereby shall
become due and payable forthwith, without notice or demand of payment. The
Mortgagor hereby waives presentment, demand of payment, protest, notice of
non-payment, and/or of protest of any instrument on which he is or may become
liable, now or hereafter secured hereby, and the said Mortgagor expressly agrees
that the Mortgagee may release or extend the time of any party liable on any
such obligation without notice and without affecting his obligation thereon or
under this instrument.
8. That if default shall be made in the payment of the indebtedness now or
hereafter secured by this mortgage, or any part thereof or all or any part of
the interest thereon, at the time or times when the same shall become due and
payable, or upon default under any of the provisions of this mortgage, the said
Mortgagee shall have the right forthwith, after any such default, to enter upon
and take possession of said mortgaged premises, and to let the said premises and
receive the rents, issues and profits thereof, and to apply the same (after the
payment of all charges and expenses which are necessary in the absolute
discretion of the Mortgagee) on the indebtedness hereby intended to be secured,
and said gross rents and profits are, in the event of any default under the
provisions of this instrument, hereby assigned to the Mortgagee without notice
or demand.
9. That the Mortgagee may immediately, after any such default, upon a
complaint filed, or any other proper legal proceedings being commenced for the
foreclosure of this mortgage, apply for, and shall be entitled as a matter of
right, without consideration of the value of the mortgaged premises as security
for the indebtedness due the Mortgagee, or of the solvency of any person or
persons liable for the payment of such indebtedness, and without notice, to the
appointment by any competent court or tribunal, of a receiver of the rents and
profits of the said premises, with power to lease the same or any part thereof,
and with such other powers as may be deemed necessary, who, after deducting all
proper charges and expenses attending the execution of the said trust, as
receiver, shall apply the residue of the said rents and profits to the payment
and satisfaction of the amount unpaid on the indebtedness now or hereafter
secured hereby, or to any deficiency which may exist after applying the proceeds
of the sale of the said premises to the payment of any and all indebtedness due
the Mortgagee.
10. It is further expressly agreed that the Mortgagee may resort for the
payment of said indebtedness to its several securities therefor, in such order
and manner as it may see fit, and may maintain an action to foreclose this
mortgage notwithstanding the pendency of any action to recover any part of the
indebtedness secured hereby, or the recovery of any judgment in such action, nor
shall the Mortgagee be required, during the pendency of any action to foreclose
this mortgage, to obtain leave of any court in order to commence or maintain any
other action to recover any part of the indebtedness secured hereby.
11. That notice and demand or request may be made in writing and may be
served in person or by mail.
12. No waiver by the Mortgagee of the breach of any of the foregoing
covenants, or failure of the Mortgagee to exercise any option given to it shall
be deemed to be a waiver of any other breach of the same or any other covenant,
or of its rights thereafter to exercise any such option.
The term "Mortgagor" and all words referring to the Mortgagor, shall be
deemed to include any and/or either and/or all of the parties of the first part,
their heirs, executors, administrators, successors or assigns.
In witness whereof this mortgage has been duly executed by the Mortgagor.
/s/ STEVEN PLAUSTEINER
---------------------------------
Steven Plausteiner
---------------------------------
/s/ SUSAN D. PLAUSTEINER
---------------------------------
Susan Plausteiner
By
------------------------------
---------------------------------
<PAGE>
<PAGE>
}
STATE OF VERMONT } ss.
County of WINDSOR }
On this 30th day of June, 1997, before me, the subscriber, personally
appeared STEVEN PLAUSTEINER and SUSAN PLAUSTEINER, to me personally known
and known to me to be the same persons described in and who executed the
foregoing instrument, and they duly acknowledged to me that they executed the
same.
[Signature Illegible]
----------------------------
Notary Public
----------------------------
My commission
expires 2/10/99
STATE OF NEW YORK,}
County of } ss.
}
On this day of , 19 , before me, personally
appeared , to me known, who, being by me duly sworn, did
depose and say: That he resides in , that he is the
of , the corporation described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to the said instrument is such corporate seal; that it
was so affixed by order of the Board of Directors of the said corporation, and
that he signed his name thereto by like order.
----------------------------
----------------------------
Mortgage =======================================================================
RECORDING TAX RECEIPT
COLLATERAL SECURITY MORTGAGE
============================== STATE OF NEW YORK, }
} ss.
County of ...............}
STEVEN PLAUSTEINER and
SUSAN PLAUSTEINER I do hereby certify that I have
TO received on the within Mortgage,
MASCOMA SAVINGS BANK, fsb $____________, being the amount of
the Recording Tax imposed thereon
and paid at the date of the recording
============================== thereof.
Dated, ________________, 1997
==============================
Dated ....................19
..............................
..............................
Recording Officer of ................
County, N.Y.
- -----------------------
| SMITH & SMITH |
| Attorneys at Law |
| 159 Main Street |
|Lake Placid, NY 12946 |
| |
- -----------------------
<PAGE>
<PAGE>
SCHEDULE A
PARCEL 1
All those certain premises conveyed by Gary Woodward to Steven Plausteiner
and Susan Plausteiner by:
a) deed dated January 11, 1991, and recorded in the Essex County Clerk's
office on January 17, 1991, in Book 983 of Deeds at page 296 and by
b) correction deed (for the purpose of having grantor's own signature
instead of by power of attorney) dated January 14, 1991, and recorded in
the Essex County Clerk's office on April 17, 1991, in Book 990 of Deeds
at page 5,
and more particularly described therein as follows:
"All that piece or parcel of land situate in the Town of North Elba, County
of Essex and State of New York, being part of Lot No. 236, Township No. 11, Old
Military Tract, Richard's Survey and more particularly described as follows:
"Beginning at a point marked by an iron pipe and stones in the
northeasterly limit of a 33 foot right of way, said point being the northwest
corner of a parcel of land conveyed by Nettie Marie Jones to Oscar D. Nohowel
and Marjorie R. Nohowel, his wife, by deed dated February 26, 1971 and recorded
in the Essex County Clerk's Office on April 13, 1971, in Book 497 of Deeds at
page 394, and from said point of beginning running thence North 72[d]30' East
along the northerly line of said parcel a distance of 290.45 feet to a point
marked by an iron pipe; thence continuing along said line in the same course a
distance of three feet to the westerly shore of a small cove on the westerly
side of Lake Placid; thence continuing in the same course a distance of 60 feet
(a total distance of 353.45 feet) to a point marked by a drill hole in a rock on
the westerly shore of Lake Placid at the extreme northeast corner of said cove;
thence northwesterly along the shore a distance of 150 feet, measured in a
straight line, to a point; thence South 82[d]06' West, a distance of 325 feet
to a point in the northeasterly limit of the 33 foot right of way first above
mentioned; thence South 38[d]22' East along the northeasterly limit thereof a
distance of 180.0 feet to the point or place of beginning.
"Also granting all of the rights, title and interests of the party of the
first part herein and to the land and land under water abutting the
above-described parcel and lying between the sidelines thereof extended easterly
into the Lake to the easterly line of said lot No. 236.
"Also conveying hereby, as an appurtenance to, for the benefit of and to
provide access to the premises conveyed hereby, an easement and right of way, in
common with the party of the first part and others, 33 feet in width extending
from the southerly line of the above described premises and along the westerly
side thereof in a northwesterly direction to the point of intersection with a
westerly projection of the southerly line of the former Earl S. MacNeil
premises, the center of said right of way being 16-1/2 feet northwesterly from
the northwesterly line of the premises conveyed hereby, including the right to
improve and maintain the present road running along said right of way and to
widen it to its full width of 33 feet measured 16-1/2 feet on each side of
the above described center line thereof.
"Also conveying hereby as an appurtenance to, for the benefit of and to
provide access to, the first above described premises an easement and right of
way in common with the party of the first part and others along and over the
roadway now existing and established connecting with the above described 33 foot
right of way at the point of intersection with the prolonged southerly line of
said former Earl S. MacNeil premises and extending in a general northwesterly
direction to intersect the roadway leading across the golf course on the
premises of Whiteface Inn, Inc., and continuing along said roadway crossing the
golf course in a northwesterly direction as it winds and turns to the
intersection with the main road leading from the Saranac Road to Whiteface Inn,
subject to the reservation, however, by Whiteface Inn, Inc., its successors and
assigns, of the right to alter the course of the existing roadway, if found
necessary or convenient in the development of the property of Whiteface Inn,
Inc., through which said roadway passes, upon the express condition, however,
that any such relocated portion of the roadway shall be as reasonably convenient
and suitable and placed in as good condition as that which it replaces, and
provide access to any portion of the westerly line of the first described
premises herein.
<PAGE>
<PAGE>
"The above easements and the premises conveyed hereby are subject to
certain conditions, restrictions and limitations as contained in the deed from
Whiteface Inn, Inc. to Nettie Marie Jones dated October 14, 1966, recorded in
the Essex County Clerk's Office on November 15, 1966, in Book 449 of Deeds at
page 235 and therein described as follows:
"The easements and rights of way above granted are made subject to the
following conditions, restrictions and limitations:
"1. Said rights of way are not exclusive rights of way but shall be subject
to the use of said roadways by the guests of the party of the first part, its
successors and assigns, and by others to whom the party of the first part, its
predecessors in title and its successors or assigns, have granted or may grant
or give license, permission or authority to use said roadways as rights of way
or for any other purpose.
"2. The party of the first part for itself, its successors or assigns,
reserves to itself, its successors or assigns, power and authority to give or
grant license, permission or authority to others to use said roadways as and for
rights of way or for any other purpose it may desire.
"3. The party of the first part for itself, its successors and assigns,
reserves the title in fee to the land over which roadways run, together with all
the incidents of ownership including the right to use the said land for any
purpose whatever which it may deem desirable, subject to the requirement that
the easements over the existing or any alternate roadways cannot be eliminated
without providing an alternate easement and right of way in as good condition as
that which it replaces and one that provides as reasonably convenient access to
all portions of the first above described premises conveyed hereby.
"4. The party of the first part, its successors or assigns, assumes no
obligation or liability of any nature to repair or maintain said roadways and
the party of the second part, by accepting this conveyance, does for herself,
her heirs, successors and assigns, covenant and agree that the party of the
first part, its successors and assigns, shall be under no liability or
obligation to keep said roadways in repair or to maintain said roadways and
covenants and agrees that any repairs or maintenance of said roadways by the
party of the first part, its successors and assigns shall be and shall be
considered voluntary and shall not be considered in any way an indication of a
liability or obligation on the part of the party of the first part, its
successors or assigns, to repair or maintain said roadways.
"5. The said roadways or rights of way shall be used by the party of the
second part, her representatives, heirs and assigns, and her guests, servants,
or invitees at her own risk.
"6. The right, not obligation, is granted to improve and maintain said
roads, but they may not be widened or relocated without the written consent of
the party of the first part, its successors or assigns.
"This conveyance is made subject to:
"1. All gold and silver mines are excepted, same as were excepted in the
original patent of Lot 236.
"2. Restrictive covenants as to the use entered into by agreement between
the People of the State of New York with E. DeBray Longchamp by instrument dated
December 7, 1921, and recorded in said Clerk's Office on January 12, 1922 in
Book 169 of Deeds at page 456, and with The Adirondack Company by instrument
dated December 30, 1921, and recorded in said Clerk's Office on January 12, 1922
in Book 169 of Deeds at page 448.
"3. Premises are subject to right of way for Whiteface Inn Sewer line which
crosses the premises hereby conveyed and they are further subject to a right of
way for the existing trail leading from Whiteface Inn to the Shore Owners'
Association dam site parcel and to the roadway crossing said premises from the
Whiteface Inn golf course to the Shore Owners' Association dam site.
"4. These premises are in the Whiteface Inn Sewer District and are subject
to future assessments for sewer tax.
<PAGE>
<PAGE>
"5. The Lake Placid Village-Whiteface Inn electric line goes across these
premises and premises are subject to right of way for this electric line and
telephone line easement.
"6. Premises are conveyed subject to any state of facts which an accurate
survey and personal inspection might disclose.
"7. The above described premises are conveyed subject to a restrictive
covenant restricting the use thereof except for private camp and residence
purposes and prohibiting the use thereof for business, commercial or industrial
purposes, including the operation of boys' or girls' camps, boarding houses,
inns, motels, hotels and other commercial establishments, which said restrictive
covenant shall run with the land and be binding upon the parties hereto and
their respective heirs and assigns.
"Also granting hereby, to the extent the party of the first part is able
to do so, a right of way in common with others over the existing trails near or
along the shores of Lake Placid leading to Whiteface Inn."
Being the same premises conveyed to Gary Woodward by Lawrence P. McGauley
by deed dated January 27, 1989, and recorded February 7, 1989, in the Essex
County Clerk's Office in Book 936 of Deeds at page 115.
EXCEPTING THEREFROM the following described premises conveyed by Steven
Plausteiner and Susan Plausteiner to Yvette J. Caldera by deed dated October 17,
1994, and recorded in the Essex County Clerk's office on October 20, 1994, in
Book 1073 of Deeds at page 13, and more particularly described therein as
follows:
"All that certain tract or 220 square foot parcel of land situate in the Town of
North Elba, County of Essex, State of New York being part of Lot 236, Township
II, Old Military Tract, Richards' Survey lying west of Lake Placid and south of
the Whiteface Inn, and said parcel being more particularly bounded and described
as follows:
Beginning at a point in the north line of certain lands of the parties of the
first part and in the south line of the party of the second part, said point
lies North 82[d]06' 14'' East, 88.70 feet from a 5/8 inch iron rod in the
east bounds of a thirty-three foot (33') wide right-of-way leading west to the
Whiteface Inn Road;
Thence, North 82[d]06' 14'' East, 88.70 feet to a point marked by a 5/8 inch
iron rod;
Thence, South 78[d]01' 55'' West, 70.00 feet to a point marked by an iron spike
in the southeast root of a 24 inch hemlock tree;
Thence, North 83[d]08' 51'' West, 19.52 feet to the Point-of-Beginning and
containing therein 220 square feet of land, more or less.
Granting and Reserving all structures, wires, lines, easements of record if any
for public utilities and highway purposes as the same now exist upon or affect
the premises herein above described."
<PAGE>
<PAGE>
PARCEL 2
- --------
All those certain premises conveyed by Yvette J. Caldera to Steven
Plausteiner and Susan Plausteiner by deed dated October 13, 1994, and recorded
in the Essex County Clerk's office on October 20, 1994, in Book 1073 of Deeds at
page 10 and therein described as follows:
"All that certain tract or 220 square foot parcel of land situate in the Town of
North Elba, County of Essex, State of New York being part of Lot 236, Township
II, Old Military Tract, Richards' Survey lying west of Lake Placid and south of
the Whiteface Inn and said parcel being more particularly bounded and described
as follows:
Beginning at a point in the east bounds of a thirty-three foot (33')
right-of-way leading west to the Whiteface Inn Road, said point being marked by
a 5/8 inch iron rod at the southwest corner of certain lands of the party of the
first part and southwest corner of certain lands of the parties of the second
part;
Thence, North 78[d] 01' 55'' East, 70.00 feet to a point marked by a 5/8 inch
iron rod;
Thence, South 83[d] 08' 51'' East, 19.52 feet to a point;
Thence, South 82[d] 06' 14'' West, 88.70 feet to the Point-of-Beginning and
containing therein 220 square feet of land, more or less.
Granting and Reserving all structures, wires, lines, easements of record if any
for public utilities and highway purposes as the same now exist upon or affect
the premises herein above described.
Being part of the premises conveyed by Donald L. Caldera to Yvette J. Caldera by
deed dated the 7th day of June 1976 and recorded in the Essex County Clerk's
Office in Deed Book 617 at Page 60."
<PAGE>
<PAGE>
RECORDATION REQUESTED BY:
MASCOMA SAVINGS BANK,fsb
10 GATES STREET
PO BOX 426
WHITE RIVER JCT., VT 05001
WHEN RECORDED MAIL TO:
MASCOMA SAVINGS BANK,fsb
10 GATES STREET
PO BOX 426
WHITE RIVER JCT., VT 05001
SEND TAX NOTICE TO:
MASCOMA SAVINGS BANK,fsb
10 GATES STREET
PO BOX 426
WHITE RIVER JCT., VT 05001
SPACE ABOVE THIS LINE IS FOR RECORDER'S USE ONLY
- -------------------------------------------------------------------------------
MORTGAGE
THIS MORTGAGE IS DATED JUNE 30, 1997, between ASCUTNEY MOUNTAIN RESORT HOTEL,
L.P., whose address is ROUTE 44 PO BOX 699, BROWNSVILLE, VT 05037 (referred to
below as "Grantor"); and MASCOMA SAVINGS BANK,fsb, whose address is 10 GATES
STREET, PO BOX 426, WHITE RIVER JCT., VT 05001 (referred to below as "Lender").
GRANT OF MORTGAGE. For valuable consideration, Grantor grants and conveys to
Lender and Lender's successors and assigns, with power of sale, all of Grantor's
right, title, and interest in and to the following described real property,
together with all existing or subsequently erected or affixed buildings,
Improvements and fixtures; all easements, rights of way, and appurtenances; all
water, water rights, watercourses and ditch rights (including stock in utilities
with ditch or irrigation rights); and all other rights, royalties, and profits
relating to the real property, including without limitation all minerals, oil,
gas, geothermal and similar matters, located in WINDSOR County, State of Vermont
(the "Real Property"):
SEE ATTACHED SCHEDULE A
The Real Property or its address is commonly known as ASCUTNEY MOUNTAIN RESORT
HOTEL, BROWNSVILLE, VT 05037.
Grantor presently assigns to Lender all of Grantor's right, title, and interest
in and to all leases of the Property and all Rents from the Property. In
addition, Grantor grants to Lender a Uniform Commercial Code security interest
in the Personal Properly and Rents.
DEFINITIONS. The following words shall have the following meanings when used in
this Mortgage. Terms not otherwise defined in this Mortgage shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.
Borrower. The word "Borrower" means each and every person or entity signing
the Note, including without limitation ASCUTNEY MOUNTAIN RESORT, L.P. and
ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.
Grantor. The word "Grantor" means any and all persons or entities executing
this Mortgage, including without limitation all Grantors named above. The
Grantor is the mortgagor under this Mortgage. Any Grantor who signs this
Mortgage, but does not sign the Note, is signing this Mortgage only to
grant and convey that Grantor's interest in the Real Property and to grant
a security interest in Grantor's interest in the Rents and Personal
Property to Lender and is not personally liable under the Note except as
otherwise provided by contract or law.
Guarantor. The word "Guarantor" means and includes without limitation each
and all of the guarantors, sureties, and accommodation parties in
connection with the indebtedness.
Improvements. The word "Improvements" means and includes without limitation
all existing and future improvements, buildings, structures, mobile homes
affixed on the Real Property, facilities, additions, replacements and other
construction on the Real Property.
Indebtedness. The word "Indebtedness" means all principal and interest
payable under the Note and any amounts expended or advanced by Lender to
discharge obligations of Grantor or expenses incurred by Lender to enforce
obligations of Grantor under this Mortgage, together with interest on such
amounts as provided in this Mortgage. Specifically, without limitation,
this Mortgage secures a revolving line of credit, under which Lender may
make advances to Borrower so long as Borrower complies with all the terms
of the Note.
Lender. The word "Lender" means MASCOMA SAVINGS BANK, fsb, its successors
and assigns. The Lender is the mortgagee under this Mortgage.
Mortgage. The word "Mortgage" means this Mortgage between Grantor and
Lender, and includes without limitation all assignments and security
interest provisions relating to the Personal Property and Rents.
Note. The word "Note" means the promissory note or credit agreement dated
June 30, 1997. In the original principal amount of $1,500,000.00 from
Borrower and any co-borrowers to Lender, together with all renewals of,
extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the promissory note or agreement. NOTICE TO GRANTOR: THE
NOTE CONTAINS A VARIABLE INTEREST RATE.
Personal Property. The words "Personal Property" mean all equipment,
fixtures, and other articles of personal property now or hereafter owned by
Grantor, and now or hereafter attached or affixed to the Real Property;
together with all accessions, parts, and additions to, all replacements of,
and all substitutions for, any of such property; and together with all
proceeds (including without limitation all insurance proceeds and refunds
of premiums) from any sale or other disposition of the Property.
Property. The word "Property" means collectively the Real Property and the
Personal Property.
Real Property. The words "Real Property" mean the property, interests and
rights described above in the "Grant of Mortgage" section.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the indebtedness.
Rents. The word "Rents" means all present and future rents, revenues,
income, issues, royalties, profits, and other benefits derived from the
Property.
THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN
THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (1) PAYMENT OF THE
INDEBTEDNESS AND (2) PERFORMANCE OF ALL OBLIGATIONS OF GRANTOR UNDER THIS
MORTGAGE AND THE RELATED DOCUMENTS. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE
FOLLOWING TERMS:
GRANTOR'S WAIVERS. Grantor waives all rights or defenses arising by reason of
any "one action" or "anti-deficiency" law, or any other law which may prevent
Lender from bringing any action against Grantor, including a claim for
deficiency to the extent Lender is otherwise entitled to a claim for
deficiency, before or after Lender's commencement or completion of any
foreclosure action, either judicially or by exercise of a power of sale.
GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (a) this
Mortgage is executed at Borrower's request and not at the request of Lender; (b)
Grantor has the full power, right, and authority to enter into this Mortgage and
to hypothecate the Property; (c) the provisions of this Mortgage do not conflict
with, or result in a default under any agreement or other instrument binding
upon Grantor and do not result in a violation of any law, regulation, court
decree or order applicable to Grantor; (d) Grantor has established adequate
means of obtaining from Borrower on a continuing basis information about
Borrower's financial condition; and (e) Lender has made no representation to
Grantor about Borrower (including without limitation the creditworthiness of
Borrower).
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Borrower
shall pay to Lender all indebtedness secured by this Mortgage as it becomes due,
and Borrower and Grantor shall strictly perform all their respective obligations
under this Mortgage.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor and Borrower agree that
Grantor's possession and use of the Property shall be governed by the following
provisions:
<PAGE>
<PAGE>
SCHEDULE A
----------
(Legal Description -- Hotel)
It being all and the same lands and premises with all rights appurtenant
thereto conveyed by virtue of a Trustee's Deed dated September 1, 1993 from John
R. Canney, III, Trustee to Ascutney Mountain Resort Hotel, L.P., recorded in
Book 49 at Pages 92-102 of the West Windsor Land Records and described in
particular as follows:
The following real property, together with any and all easements, licenses,
rights and interest therein or appurtenant thereto (including, without
limitation, the easements, licenses, rights and interests described
hereinbelow), located in the Town of West Windsor, County of Windsor, State of
Vermont:
The parcel shown as "Phase I - Mt. Ascutney Assoc. Realty Co., Inc."
on a survey dated April 21, 1988, revised April 23, 1988, and May 10, 1988,
prepared by Farnsworth Surveys of Brownsville, Vermont entitled "Land of
Mt. Ascutney associates, Brownsville, Vermont" comprising 2 sheets, being
Drawing No. 88-737 and Drawing No. 88-737A, a mylar thereof recorded on
Pages 176-177 of the West Windsor Map Rack, together with buildings and
improvements thereon situated, and further being described as the property
depicted on a survey dated December 7, 1984, revised December 12, 1984,
prepared by Farnsworth Surveys of Brownsville, Vermont, Robert W.
Farnsworth, Registered Land Surveyor, entitled "Property Survey for Mt.
Ascutney Associates - Mt. Ascutney Ski Area - Phase I (Built-Up Area) -
Brownsville, West Windsor, Vermont", Drawing No. 84-455-B, a mylar thereof
recorded at Page 135 of the West Windsor Map Rack, comprising two parcels
of land containing 25.9 acres, more or less (Site "A") and 3.2 acres, more
or less (Site "B"), together with that portion of Village Road, so-called,
situated between Sites "A" and "B" containing .7 acres, more or less,
totalling 29.8 acres, more or less, formerly owned by Mt. Ascutney
Associates Realty Company, Inc. by virtue of a Warranty Deed dated December
17, 1984 from Mt. Ascutney Associates, recorded in Book 29 at Pages 253-258
of the West Windsor Land Records.
Reference may also be made to a Termination of Declaration of Mt. Ascutney
Hotel Condominium dated January 12, 1994, recorded in Book 50 at Pages 35-36 of
the West Windsor Land Records, wherein the Declaration of Mt. Ascutney Hotel
Condominium dated December 17, 1984, recorded in Book 29 at Pages 282-318 of the
West Windsor Land Records was terminated.
The lands and premises herein conveyed are subject to all restrictions,
easements, agreements, and conditions of record.
<PAGE>
<PAGE>
[COPY ILLEGIBLE]
MASCOMA SAVINGS BANK, fsb
10 GATES STREET
PO BOX 126
WHITE RIVER JCT., VT 05001
[COPY ILLEGIBLE]
MASCOMA SAVINGS, BANK, fsb
10 GATES STREET
PO BOX 426
WHITE RIVER JCT., VT 05001
SEND TAX NOTICES TO:
MASCOMA SAVINGS, BANK, fsb
10 GATES STREET
PO BOX 426
WHITE RIVER JCT., VT 05001
SPACE ABOVE THIS LINE IS FOR RECORDER'S USE ONLY
- --------------------------------------------------------------------------------
MORTGAGE
THIS MORTGAGE IS DATED JUNE 30, 1997 between ASCUTNEY MOUNTAIN RESORT HOTEL,
L.P., whose address is ROUTE 44 PO BOX 699, BROWNSVILLE, VT 05037 (referred to
below as "Grantor"); and MASCOMA SAVINGS BANK, fsb, whose address is 10 GATES
STREET, PO BOX 426, WHITE RIVER JCT., VT 05001 (referred to below as "Lender").
GRANT OF MORTGAGE. for valuable consideration, Grantor grants and conveys to
Lender and Lender's successors and assigns, with power of sale, all of Grantor's
right, title, and interest in and to the following described real property,
together with all existing or subsequently erected or affixed buildings,
improvements and fixtures; all easements, rights of way, and appurlenances; all
water, water rights, watercourses and ditch rights (including stock in utilities
with ditch or irrigation rights); and all other rights royalties, and profits
relating to the real property, including without limitation all minerals, oil,
gas geothermal and similar matters, located in WINDSOR County, State of Vermont
(the "Real Property"):
SEE ATTACHED SCHEDULE A
The Real Property or its address is commonly known as ASCUTNEY MOUNTAIN RESORT
HOTEL, BROWNSVILLE, VT 05037.
Grantor presently assigns to Lender all of Grantor's right title, and interest
in and to all leases of the Property and all Rents from the Property. In
addition, Grantor grants to Lender a Uniform Commercial Code security interest
in the Personal Property and Rents.
DEFINITIONS. The following words shall have the following meanings when used in
this Mortgage. Terms not otherwise defined in this Mortgage shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.
Borrower. The word "Borrower" means each and every person or entity
signing the Note, including without limitation ASCUTNEY MOUNTAIN RESORT,
L.P. and ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.
Grantor. The word "Grantor" means any and all persons and entitles
executing this Mortgage, including without limitation all Grantors named
above. The Grantor is the mortgagor under this Mortgage. Any Grantor who
signs this Mortgage, but does not sign the Note, is signing this
Mortgage only to grant and convey that Grantor's interest in the Real
Property and to grant a security interest in Grantor's interest in the
Rents and Personal Property to Lender and is not personally liable under
the Note except as otherwise provided by contract or law.
Guarantor. The word "Guarantor" means and includes without limitation
each and all of the guarantors, sureties, and accommodation parties in
connection with the indebtedness.
Improvements. The word "Improvements" means and includes without
limitation all existing and future improvements, buildings, structures,
mobile home affixed on the Real Property, facilities, additions,
replacements and other construction on the Real Property.
Indebtedness. The word "Indebtedness" means all principal and interest
payable under the Note and any amounts expended or advanced by Lender to
discharge obligations of Grantor or expenses incurred by Lender to
enforce obligations of Grantor under this Mortgage, together with
interest on such amounts as provided in this Mortgage. Specifically,
without limitation, this Mortgage secures a revolving line of credit,
under which Lender may make advances to Borrower so long as Borrower
complies with all the terms of the Note.
<PAGE>
Lender. The word "Lender" means MASCOMA SAVINGS BANK, fsb, its
successors and assigns. The Lender is the mortgagee under this Mortgage.
Mortgage. The word "Mortgage" means this Mortgage between Grantor and
Lender, and includes without limitation all assignments and security
interest provisions relating to the Personal Property and Rents.
Note. The word "Note" means the promissory note or credit agreement
dated June 30, 1997, in the original principal amount of $1,500,000.00
from Borrower and any co-borrowers to Lender, together with all renewals
of, extensions of, modifications of, refinancings of, consolidations of,
and substitutions for the promissory note or agreement. NOTICE TO
GRANTOR: THE NOTE CONTAINS A VARIABLE INTEREST RATE.
Personal Property. The words "Personal Property" means all equipment,
fixtures, and other articles of personal property now or hereafter owned
by Grantor, and now or hereafter attached or affixed to the Real
Property; together with all accessions, parts, and additions to, all
replacements of, and all substitutions for, any of such property; and
together with all proceeds (including without limitation all insurance
proceeds and refunds of premiums) from any sale or other disposition of
the Property.
Property. The word "Property" means collectively the Real Property
and the Personal Property.
Real Property. The words "Real Property" mean the property, interests
and rights described above in the "Grant of Mortgage" section.
Related Documents. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the indebtedness.
Rents. The word "Rents" means all present and future rents, revenues,
income, issues, royalties, profits, and other benefits derived from the
Property.
THIS MORTGAGE, INCLUDING THE ASSIGNMENT OR RENTS AND THE SECURITY INTEREST IN
THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (1) PAYMENT OF THE
INDEBTEDNESS AND (2) PERFORMANCE OF ALL OBLIGATIONS OF GRANTOR UNDER THIS
MORTGAGE AND THE RELATED DOCUMENTS. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE
FOLLOWING TERMS:
GRANTOR'S WAIVERS. Grantor waives all rights or defenses arising by reason of
any "one action" or "anti-deficiency" law or any other law which may prevent
Lender from bringing any action against Grantor, including a claim for
deficiency to the extent Lender is otherwise entitled to a claim for deficiency,
before or after Lender's commencement or compeletion of any foreclosure action,
either judicially or by exercise of a power of sale.
GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (a) this
Mortgage is executed at Borrower's request and not at the request of Lender; (b)
Grantor has the full power, right, and authority to enter into this Mortgage and
to hypothecate the Property; (c) the provisions of this Mortgage do not conflict
with, or result in a default under any agreement or other instrument binding
upon Grantor and do not result in a violation of any law, regulation, court
decree or order applicable to Grantor; (d) Grantor has established adequate
means of obtaining from Borrower on a continuing basis information about
Borrower's financial condition; and (e) Lender has made no representation to
Grantor about Borrower (including without limitation the creditworthiness of
Borrower).
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Borrower
shall pay to Lender all indebtedness secured by this Mortgage as it becomes
due, and Borrower and Grantor shall strictly perform all their respective
obligations under this Mortgage.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor and Borrower agree that
Grantor's possession and use of the Property shall be governed by the following
provisions:
<PAGE>
<PAGE>
06-30-1997 MORTGAGE Page 2
Loan No 27027106 (Continued)
================================================================================
Possession and Use. Until in default or until Lender exercises its right
to collect Rents as provided for in the Assignment of Rents form
executed by Grantor in connection with the Property, Grantor may remain
in possession and control and operate and manage the Property and
collect the Rents from the Property.
Duty to Maintain. Grantor shall maintain the Property in tenantable
condition and promptly perform all repairs, replacements, and
maintenance necessary to preserve its value.
Hazardous Substances. The terms "hazardous waste," "hazardous
substance," "disposal" "release," and "threatened release," as used in
this Mortgage, shall have the same meanings as set forth in the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986, Pub L. No. 99-499
("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et seq. the Resources Conservation and Recovery Act, 42 U.S.C.
Section 6901, et. seq., or other applicable state or Federal laws,
rules, or regulations adopted pursuant to any of the foregoing. The
terms "hazardous waste" and "hazardous substance" shall also include,
without limitation, petroleum and petroleum by-products or any fraction
thereof and asbestos. Grantor represents and warrants to Lender that:
(a) During the period of Grantor's ownership of the Property, there has
been no use, generation, manufacture, storage, treatment, disposal,
release or threatened release of any hazardous waste or substance by
any person on, under, about or from the Property; (b) Grantor has no
knowledge of, or reason to believe that there has been, except as
previously disclosed to and acknowleded by Lender in writing, (i)
any use, generation, manufacture, storage, treatment, disposal, release,
or threatened release of any hazardous waste or substance on, under,
about or from the Property by any prior owners or occupants of the
Property or (ii) any actual or threatened litigation or claims of any
kind by any person relating to such matters; and (c) Except as
previously disclosed to and acknowledged by Lender in writing, (i)
neither Grantor nor any tenant, contractor, agent or other
authorized user of the Property shall use,
generate, manufacture, store, treat, dispose of, or release any
hazardous waste or substance on, under, about or from the Property and
(ii) any such activity shall be conducted in compliance with all
applicable federal, state, and local laws, regulations and ordinances,
including without limitation those laws, regulations, and ordinances
described above. Grantor authorizes Lender and its agents to enter upon
the Property to make such inspections and tests, at Grantor's expense,
as Lender may deem appropriate to determine compliance of the Property
with this section of the Mortgage. Any inspections of tests made by
Lender shall be for Lender's purposes only and shall not be construed to
create any responsibility or liability on the part of Lender to Grantor
or to any other person. The representations and warranties contained
herein are based on Grantor's due diligence in investigating the
Property for hazardous waste and hazardous substances. Grantor hereby
(a) releases and waives any future claims against Lender for indemnity
or contribution in the event Grantor becomes liable for cleanup or other
costs under any such laws, and (b) agrees to indemnify and hold harmless
Lender against any and all claims, losses, liabilities, damages,
penalties, and expenses which Lender may directly or indirectly sustain
or suffer resulting from a breach of this section of the Mortgage or as
a consequence of any use, generation, manufacture, storage, disposal,
release or threatened release occurring prior to Grantor's ownership or
interest in the Property, whether or to the same was or should have been
known to Grantor. The provisions of this section of the Mortgage,
including the obligation to indemnify, shall survive the payment of the
indebtedness and the satisfaction and reconveyance of the lien of this
Mortgage and shall not be affected by Lender's acquisition of any
interest in the Property, whether or not by foreclosure or otherwise.
Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance
nor commit, permit, or suffer any stripping of or waste on or to the
Property of any portion of the Property. Without limiting the generality
of the foregoing. Grantor will not remove, or grant to any other party
the right to remove, any timber, minerals (including oil and gas), soil,
gravel or rock products without the prior written consent of Lender.
Removal of Improvements. Grantor shall not demolish or remove any
improvements from the Real Property without the prior written consent of
Lender. As a condition to the removal of any improvements, Lender may
require Grantor to make arrangements satisfactory to Lender to replace
such improvements with improvements of at least equal value.
Lender's Right to Enter. Lender and its agents and representatives may
enter upon the Real Property at all reasonable times to attend to
Lender's interests and to inspect the Property for purposes of Grantor's
compliance with the terms and conditions of this Mortgage.
Compliance with Governmental Requirements. Grantor shall promptly comply
with all laws, ordinances, and regulations, now or hereafter in effect,
of all governmental authorities applicable to the use or occupancy of
the Property, including without limitation, the Americans With
Disabilities Act. Grantor may contest in good faith any such law,
ordinance or regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Grantor has notified Lender in
writing prior to doing so and so long as, in Lender's sole opinion,
Lender's interests in the Property are not jeopardized. Lender may
require Grantor to post adequate security or a surety bond, reasonably
satisfactory to Lender, to protect Lender's interest.
<PAGE>
Duty to Protect. Grantor agrees neither to abandon nor leave unattended
the Property. Grantor shall do all other acts, in addition to those acts
set forth above in this section, which from the character and use of the
Property are reasonably necessary to protect and preserve the Property.
DUE ON SALE - CONSENT BY LENDER. Lender may, at its option, declare immediately
due and payable all sums secured by this Mortgage upon the sale or transfer,
without the Lender's prior written consent, of all or any part of the Real
Property, or any interest in the Real Property. A "sale or transfer" means the
conveyance of Real Property or any right, title or interest therein; whether
legal, beneficial or equitable; whether voluntary or involuntary; whether by
outright sale, deed, installment sale contract, land contract, contract for
deed, leasehold interest with a term greater than three (3) years, lease-option
contract, or by sale, assignment, or transfer of any beneficial interest in or
to any land trust holding title to the Real Property, or by any other method of
conveyance of Real Property Interest. If any Grantor is a corporation,
partnership or limited liability company, transfer also includes any change in
ownership of more than twenty-five percent (25%) of the voting stock,
partnership intests or limited liability company interests, as the case may be,
of Grantor. However, this option shall not be exercised by Lender if such
exercise is prohibited by federal law or by Vermont law.
TAXES AND LIENS. The following provisions relating to the taxes and liens on the
Property are a part of this Mortgage.
Payment. Grantor shall pay when due (and in all events prior to
delinquency) all taxes, payroll taxes, special taxes, assessments, water
charges and sewer service charges levied against or on account of the
Property, and shall pay when due all claims for work done on or for
services rendered or material furnished to the Property. Grantor shall
maintain the Property free of all liens having priority over or equal
to the interest of Lender under this Mortgage, except for the lien of
taxes and assessments not due, and except as otherwise provided in the
following paragraph.
Right To Contest. Grantor may withhold payment of any tax, assessment,
or claim in connection with a good faith dispute over the obligation to
pay, so long as Lender's interest in the Property is not jeopardized. If
a lien arises or is filed as a result of nonpayment, Grantor shall
within fifteen (15) days after the lien arises or, if a lien is filed,
within fifteen (15) days after Grantor has notice of the filing, secure
the discharge of the lien, or if requested by Lender, deposit with
Lender cash or a sufficient corporate surety bond or other security
satisfactory to Lender in an amount sufficient to discharge the lien
plus any costs and attorney's fees or other charges that could accrue as
a result of a foreclosure or sale under the lien. In any contest,
Guarantor shall defend itself and Lender and shall satisfy any adverse
judgement before enforcement against he Property. Grantor shall name
Lender as an additional obligee under any surety bond furnished in the
contest proceedings.
Evidence of Payment. Grantor shall upon demand furnish to Lender
satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at
any time a written statement of the taxes and assessments against the
Property.
Notice of Construction. Grantor shall notify Lender at least fifteen
(15) days before any work is commenced, any services are furnished, or
any materials are supplied to the Property, if any mechanic's lien,
materialmen's lien, or other lien could be asserted on account of the
work, services, or materials, Grantor will upon request of Lender
furnish to Lender advance assurances satisfactory to Lender that Grantor
can and will pay the cost of such improvements.
PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the
Property are a part of this Mortgage.
Maintenance of Insurance. Grantor shall procure and maintain policies of
the fire insurance with standard extended coverage endorsements on a
replacement basis for the full insurable value covering all improvements
on the Real Property in an amount sufficient to avoid application of any
coinsurance clause, and with a standard mortgagee clause in favor of
Lender. Grantor shall also procure and maintain comprehensive general
liability insurance in such coverage amounts as Lender may request with
Lender being named as additional insureds in such liability insurance
policies. Additionally, Grantor shall maintain such other insurance,
including but not limited to hazard, business interruption and boiler
insurance as Lender may require. Policies shall be written by such
insurance companies and in such form as may be reasonably acceptable to
Lender. Grantor shall deliver to Lender certificates of coverage from
each insurer containing a stipulation that coverage will not be
cancelled or diminished without a minimum of ten (10) days' prior
written notice to Lender and not containing any disclaimer of the
insurer's liability for failure to give such notice. Each insurance
policy also shall include an endorsement providing that coverage in
favor of Lender will not be impaired in any way by any act, omission or
default of Grantor or any other person.
Application of Proceeds . Grantor shall promptly notify Lender of any
loss or damage to the Property. Lender may make proof of loss if Grantor
falls to do so within fifteen (15) days of the casualty. Whether or not
Lender's security is impaired, Lender may, at its election, apply the
proceeds to the reduction of the indebtedness, payment of any lien
affecting the Property, or the restoration and repair of the Property.
If Lender elects to apply the proceeds to restration and repair, Grantor
shall repair or replace the damaged or destroyed improvements in a
manner satisfactory to Lender. Lender shall, upon satisfactory proof of
such expenditure, pay or reimburse Grantor from the proceeds for the
reasonable cost or repair or restoration if Grantor is not in default
hereunder. Any proceeds which have not been disbursed with 180 days
after their receipt and which Lender has not committed to the repair or
restoration of the Property shall be used first to pay any amount owing
to Lender under this Mortgage, then to prepay accrued interest, and the
remainder, if any, shall be applied in the principal balance of the
indebtedness. If Lender holds any proceeds after payment in full of the
indebtedness, such proceeds proceeds shall be paid to Grantor.
<PAGE>
<PAGE>
06-30-1997 MORTGAGE Page 3
Loan No 27027106 (Continued)
================================================================================
Unexpired Insurance at Sale. Any unexpired insurance shall inure to the
benefit of, and pass to, the purchaser of the Property covered by this
Mortgage at any trustee's sale or other sale held under the provisions of
this Mortgage, or at any foreclosure sale of such Property.
Grantor's Report on Insurance. Upon request of Lender, however not more
than once a year, Grantor shall furnish to Lender a report on each existing
policy of Insurance showing: (a) the name of the insurer; (b) the risks
insured; (c) the amount of the policy; (d) the property insured, the then
current replacement value of such property, and the manner of determining
that value; and (e) the expiration date of the policy. Grantor shall, upon
request of Lender, have an independent appraiser satisfactory to Lender
determine the cash value replacement cost of the Property.
TAX AND INSURANCE RESERVES. Subject to any limitations set by applicable law,
Lender may require Grantor to maintain with Lender reserves for payment of
annual taxes, assessments, and insurance premiums, which reserves shall be
created by advance payment or monthly payments of a sum estimated by Lender to
be sufficient to produce amounts at least equal to the taxes, assessments, and
insurance premiums to be paid. The reserve funds shall be held by Lender as a
general deposit from Grantor, which Lender may satisfy by payment of the taxes,
assessments, and insurance premiums required to be paid by Grantor as they
become due. Lender shall have the right to draw upon the reserve funds to pay
such items, and Lender shall not be required to determine the validity or
accuracy of any item before paying it. Nothing in the Mortgage shall be
construed as requiring Lender to advance other monies for such purposes, and
Lender shall not incur any liability for anything it may do or omit to do with
respect to the reserve account. All amounts in the reserve account are hereby
pledged to further secure the indebtedness, and Lender is hereby authorized to
withdraw and apply such amounts on the indebtedness upon the occurrence of an
Event of Default. Lender shall not be required to pay any interest or earnings
on the reserve funds unless required by law or agreed to by Lender in writing.
Lender does not hold the reserve funds in trust for Grantor, and Lender is not
Grantor's agent for payment of the taxes and assessments required to be paid by
Grantor.
EXPENDITURES BY LENDER. If Grantor fails to comply with any provision of this
Mortgage, or if any action or proceeding is commenced that would materially
affect Lender's interests in the Property, Lender on Grantor's behalf may, but
shall not be required to, take any action that Lender deems appropriate. Any
amount that Lender expends in so doing will bear interest at the rate provided
for in the Note from the date incurred or paid by Lender to the date of
repayment by Grantor. All such expenses, at Lender's option, will (a) be payable
on demand, (b) be added to the balance of the Note and be apportioned among and
be payable with any installment payments to become due during either (i) the
term of any applicable insurance policy or (ii) the remaining term of the Note,
or (c) be treated as a balloon payment which will be due and payable at the
Note's maturity. This Mortgage also will secure payment of these amounts. The
rights provided for in this paragraph shall be in addition to any other rights
or any remedies to which Lender may be entitled on account of the default. Any
such action by Lender shall not be construed as curing the default so as to bar
Lender from any remedy that it otherwise would have had.
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of
the Property are a part of this Mortgage.
Title. Grantor warrants that: (a) Grantor holds good and marketable title
of record to the Property in fee simple, free and clear of all liens and
encumbrances other than those set forth in the Real Property description or
in any title insurance policy, title report, or final title opinion issued
in favor of, and accepted by, Lender in connection with this Mortgage, and
(b) Grantor has the full right, power, and authority to execute and deliver
this Mortgage to Lender.
Defense of Title. Subject to the exception in the paragraph above, Grantor
warrants and will forever defend the title to the Property against the
lawful claims of all persons. In the event any action or proceeding is
commenced that questions Grantor's title or the interest of Lender under
this Mortgage, Grantor shall defend the action at Grantor's expense.
Grantor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the
proceeding by counsel of Lender's own choice, and Grantor will deliver, or
cause to be delivered, to Lender such instruments as Lender may request
from time to time to permit such participation.
Compliance With Laws. Grantor warrants that the Property and Grantor's use
of the Property complies with all existing applicable laws, ordinances, and
regulations of governmental authorities.
<PAGE>
CONDEMNATION. The following provisions relating to condemnation of the Property
are a part of this Mortgage.
Application of Net Proceeds. If all or any part of the Property is
condemned by eminent domain proceedings or by any proceeding or purchase in
lieu of condemnation, Lender may at its election require that all or any
portion of the net proceeds of the award be applied to the indebtedness or
the repair or restoration of the Property. The net proceeds of the award
shall mean the award after payment of all reasonable costs, expenses, and
attorneys' fees incurred by Lender in connection with the condemnation.
Proceedings. If any proceeding in condemnation is filed, Grantor shall
promptly notify Lender in writing, and Grantor shall promptly take such
steps as may be necessary to defend the action and obtain the award.
Grantor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the
proceeding by counsel of its own choice, and Grantor will deliver or cause
to be delivered to Lender such instruments as may be requested by it from
time to time to permit such participation.
IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following
provisions relating to governmental taxes, fees and charges are a part of this
Mortgage:
Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall
execute such documents in addition to this Mortgage and take whatever other
action is requested by Lender to perfect and continue Lender's lien on the
Real Property. Grantor shall reimburse Lender for all taxes, as described
below, together with all expenses incurred in recording, perfecting or
continuing this Mortgage, including without limitation all taxes, fees,
documentary stamps, and other charges for recording or registering this
Mortgage.
Taxes. The following shall constitute taxes to which this section applies:
(a) a specific tax upon this type of Mortgage or upon all or any part of
the indebtedness secured by this Mortgage; (b) a specific tax on Borrower
which Borrower is authorized or required to deduct from payments on the
indebtedness secured by this type of Mortgage; (c) a tax on this type of
Mortgage chargeable against the Lender or the holder of the Note; and (d) a
specific tax on all or any portion of the indebtedness or on payments of
principal and interest made by Borrower.
Subsequent Taxes. If any tax to which this section applies is enacted
subsequent to the date of this Mortgage, this event shall have the same
effect as an Event of Default (as defined below), and Lender may exercise
any or all of its available remedies for an Event of Default as provided
below unless Grantor either (a) pays the tax before it becomes delinquent,
or (b) contests the tax as provided above in the Taxes and Liens section
and deposits with Lender cash or a sufficient corporate surety bond or
other security satisfactory to Lender.
SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to
this Mortgage as a security agreement are a part of this Mortgage.
Security Agreement. This instrument shall constitute a security agreement
to the extent any of the Property constitutes fixtures or other personal
property, and Lender shall have all of the rights of a secured party under
the Uniform Commercial Code as amended from time to time.
Security Interest. Upon request by Lender, Grantor shall execute financing
statements and take whatever other action is requested by Lender to perfect
and continue Lender's security interest in the Rents and Personal Property.
In addition to recording this Mortgage in the real property records, Lender
may, at any time and without further authorization from Grantor, file
executed counterparts, copies or reproductions of this Mortgage as a
financing statement. Grantor shall reimburse Lender for all expenses
incurred in perfecting or continuing this security interest. Upon default,
Grantor shall assemble the Personal Property in a manner and at a place
reasonably convenient to Grantor and Lender and make it available to Lender
within three (3) days after receipt of written demand from Lender.
Addresses. The mailing addresses of Grantor (debtor) and Lender (secured
party), from which information concerning the security interest granted by
this Mortgage may be obtained (each as required by the Uniform Commercial
Code), are as stated on the first page of this Mortgage.
FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to
further assurances and attorney-in-fact are a part of this Mortgage.
Further Assurances. At any time, and from time to time, upon request of
Lender, Grantor will make, execute and deliver, or will cause to be made,
executed or delivered, to Lender or to Lender's designee, and when
requested by Lender, cause to be filed, recorded, refiled, or rerecorded,
as the case may be, at such times and in such offices and places as Lender
may deem appropriate, any and all such mortgages, deeds of trust, security
deeds, security agreements, financing statements, continuation statements,
instruments of further assurance, certificates, and other documents as may,
in the sole opinion of the Lender, be necessary or desirable in order to
effectuate, complete, perfect, continue, or preserve (a) the obligations of
Grantor and Borrower under the Note, this Mortgage, and the Related
Documents, and (b) the liens and security interests created by this
Mortgage as first and prior liens on the Property, whether now owned or
hereafter acquired by Grantor. Unless prohibited by law or agreed to the
contrary by Lender in writing, Grantor shall reimburse Lender for all costs
and expenses incurred in connection with the matters referred to in this
paragraph.
Attorney-in-Fact. If Grantor fails to do any of the things referred to in
the preceding paragraph, Lender may do so for and in the name of Grantor
and at Grantor's expense. For such purposes, Grantor hereby irrevocably
appoints Lender as Grantor's attorney-in-fact for the purpose of making,
executing, delivering, filing, recording, and doing all other things as may
be necessary or desirable, in Lender's sole opinion, to accomplish the
matters referred to in the preceding paragraph.
FULL PERFORMANCE. If Borrower pays all the indebtedness when due, and otherwise
performs all the obligations imposed upon Grantor under this Mortgage, Lender
shall execute and deliver to Grantor a suitable satisfaction of this Mortgage
and suitable statements of termination of any financing statement on file
evidencing Lender's security interest in the Rents and the Personal Property.
Grantor will pay, if permitted by applicable law, any reasonable termination fee
as determined by Lender from time to time.
<PAGE>
<PAGE>
06-30-1997 MORTGAGE Page 4
Loan No 27027106 (Continued)
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DEFAULT. Each of the following, at the option of Lender, shall constitute an
event of default ("Event of Default") under this Mortgage:
Default on Indebtedness. Failure of Borrower to make any payment when due
on the indebtedness.
Default on Other Payments. Failure of Grantor within the time required by
this Mortgage to make any payment for taxes or insurance, or any other
payment necessary to prevent filing of or to effect discharge of any lien.
Compliance Default. Failure of Grantor or Borrower to comply with any other
term, obligation, covenant or condition contained in this Mortgage, the
Note or in any of the Related Documents.
Default in Favor of Third Parties. Should Borrower or any Grantor default
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Borrower's or any Grantor's property or
Borrower's ability to repay the Note or Borrower's or Grantor's ability to
perform their respective obligations under this Mortgage or any of the
Related Documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Grantor or Borrower under this
Mortgage, the Note or the Related Documents is false or misleading in any
material respect, either now or at the time made or furnished.
Defective Collateralization. This Mortgage or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
documents to create a valid and perfected security interest or lien) at any
time and for any reason.
Death or Insolvency. The dissolution or termination of Grantor or
Borrower's existence as a going business or the death of any partner, the
insolvency of Grantor or Borrower, the appointment of a receiver for any
part of Grantor or Borrower's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Grantor or
Borrower.
Foreclosure, Forfeiture, etc. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Grantor or by any governmental agency
against any of the Property. However, this subsection shall not apply in
the event of a good faith dispute by Grantor as to the validity or
reasonableness of the claim which is the basis of the foreclosure or
forfeiture proceeding, provided that Grantor gives Lender written notice
of such claim and furnishes reserves or a surety bond for the claim
satisfactory to Lender.
Breach of Other Agreement. Any breach by Grantor or Borrower under the
terms of any other agreement between Grantor or Borrower and Lender that is
not remedied within any grace period provided therein, including without
limitation any agreement concerning any indebtedness or other obligation of
Grantor or Borrower to Lender, whether existing now or later.
Events Affecting Guarantor. Any of the preceding events occurs with respect
to any Guarantor of any of the Indebtedness or any Guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability
under, any Guaranty of the indebtedness. Lender, at its option, may, but
shall not be required to, permit the Guarantor's estate to assume
unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure the Event of Default.
Events Affecting Co-Borrowers. Any of the preceding events occurs with
respect to any co-borrower of any of the indebtedness or any co-borrower
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any of the indebtedness. Lender, at its option, may, but
shall not be required to, permit the co-borrower's estate to assume
unconditionally the obligations on the indebtedness in a manner
satisfactory to Lender, and, in doing so, cure the Event of Default.
Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the
indebtedness is impaired.
Insecurity. Lender in good faith deems itself insecure.
Right to Cure. If such a failure is curable and if Grantor or Borrower has
not been given a notice of a breach of the same provision of this Mortgage
within the preceding twelve (12) months, it may be cured (and no Event of
Default will have occurred) if Grantor or Borrower, after Lender sends
written notice demanding cure of such failure: (a) cures the failure within
ten (10) days; or (b) if the cure requires more than ten (10) days,
immediately initiates steps sufficient to cure the failure and thereafter
continues and completes all reasonable and necessary steps sufficient to
produce compliance as soon as reasonably practical.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and
at any time thereafter, Lender, at its option, may exercise any one or more of
the following rights and remedies, in addition to any other rights or remedies
provided by law:
Accelerate Indebtedness. Lender shall have the right at its option without
notice to Borrower to declare the entire indebtedness immediately due and
payable, including any prepayment penalty which Borrower would be required
to pay.
UCC Remedies. With respect to all or any part of the Personal Property,
Lender shall have all the rights and remedies of a secured party under the
Uniform Commercial Code.
<PAGE>
Collect Rents. Lender shall have the right, without notice to Grantor or
Borrower, to take possession of the Property and collect the Rents,
including amounts past due and unpaid, and apply the net proceeds, over and
above Lender's costs, against the indebtedness. In furtherance of this
right, Lender may require any tenant or other user of the Property to make
payments of rent or use fees directly to Lender. If the Rents are collected
by Lender, then Grantor irrevocably designates Lender as Grantor's
attorney-in-fact to endorse instruments received in payment thereof in the
name of Grantor and to negotiate the same and collect the proceeds.
Payments by tenants or other users to Lender in response to Lender's demand
shall satisfy the obligations for which the payments are made, whether or
not any proper grounds for the demand existed. Lender may exercise its
rights under this subparagraph either in person, by agent, or through a
receiver.
Appoint Receiver. Lender shall have the right to have a receiver appointed
to take possession of all or any part of the Property, with the power to
protect and preserve the Property, to operate the Property preceding
foreclosure or sale, and to collect the Rents from the Property and apply
the proceeds, over and above the cost of the receivership, against the
indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not
the apparent value of the Property exceeds the indebtedness by a
substantial amount. Employment by Lender shall not disqualify a person from
serving as a receiver.
Judicial Foreclosure. Lender may obtain a judicial decree foreclosing
Grantor's interest in all or any part of the Property.
Nonjudicial Sale. If permitted by applicable law, Lender may foreclose
Grantor's interest in all or in any part of the Personal Property or the
Real Property by nonjudicial sale.
Deficiency Judgment. If permitted by applicable law, Lender may obtain a
judgment for any deficiency remaining in the indebtedness due to Lender
after application of all amounts received from the exercise of the rights
provided in this section.
Tenancy at Sufferance. If Grantor remains in possession of the Property
after the Property is sold as provided above or Lender otherwise becomes
entitled to possession of the Property upon default of Grantor, Grantor
shall become a tenant at sufferance of Lender or the purchaser of the
Property and shall, at Lendor's option, either (a) pay a reasonable rental
for the use of the Property, or (b) vacate the Property immediately upon
the demand of Lender.
Other Remedies. Lender shall have all other rights and remedies provided in
this Mortgage or the Note or available at law or in equity.
Sale of the Property. To the extent permitted by applicable law, Grantor or
Borrower hereby waive any and all right to have the property marshalled. In
exercising its rights and remedies, Lender shall be free to sell all or any
part of the Property together or separately, in one sale or by separate
sales. Lender shall be entitled to bid at any public sale on all or any
portion of the Property.
Notice of Sale. Lender shall give Grantor reasonable notice of the time and
place of any public sale of the Personal Property or of the time after
which any private sale or other intended disposition of the Personal
Property is to be made. Reasonable notice shall mean notice given at least
ten (10) days before the time of the sale or disposition.
Power of Sale. Where Lender invokes the power of sale, Lender's rights and
duties shall be determined according to existing Vermont law governing said
power of sale. If it shall be necessary to initiate any legal action to
determine the person or persons legally entitled to any excess proceeds of
the sale then the Lender's cost of said action shall be deducted from the
said excess and reimbursed to Lender before its ultimate disbursal.
Waiver; Election of Remedies. A waiver by any party of a breach of a
provision of this Mortgage shall not constitute a waiver of or prejudice
the party's rights otherwise to demand strict compliance with that
provision or any other provision. Election by Lender to pursue any remedy
shall not exclude pursuit of any other remedy, and an election to make
expenditures or take action to perform an obligation of Grantor or Borrower
under this Mortgage after failure of Grantor or Borrower to perform shall
not affect Lender's right to declare a default and exercise its remedies
under this Mortgage.
Attorneys' Fees; Expenses. If Lender institutes any suit or action to
enforce any of the terms of this Mortgage, Lender shall be entitled to
recover such sum as the court may adjudge reasonable as attorneys' fees at
trial and on any appeal. Whether or not any court action is involved, all
<PAGE>
<PAGE>
06-30-1997 MORTGAGE Page 5
Loan No 27027106 (Continued)
================================================================================
reasonable expenses incurred by Lender that in Lender's opinion are
necessary at any time for the protection of its interest or the enforcement
of its rights shall become a part of the indebtedness payable on demand and
shall bear interest from the date of expenditure until repaid at the rate
provided for in the Note. Expenses covered by this paragraph include,
without limitation, however subject to any limits under applicable law,
Lender's attorneys fees and Lender's legal expenses whether or not there is
a lawsuit, including attorneys' fees for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction), appeals and
any anticipated post-judgment collection services, the cost of searching
records, obtaining title reports (including foreclosure reports),
surveyors' reports, and appraisal fees, and life insurance, to the extent
permitted by applicable law. borrower also will pay any court costs, in
addition to all other sums provided by law.
NOTICES TO GRANTOR AND OTHER PARTIES. Any notice under this Mortgage, including
without limitation any notice of default and any notice of sale to Grantor,
shall be in writing, may be sent by telefacsimile, and shall be effective when
actually delivered, or when deposited with a nationally recognized overnight
courier, or, if mailed, shall be deemed effective when deposited in the United
States mail first class, certified or registered mail, postage prepaid, directed
to the addresses shown near the beginning of this Mortgage. Any party may change
its address for notices under this Mortgage by giving formal written notice to
the other parties, specifying that the purpose of the notice is to change the
party's address. All copies of notices of foreclosure from the holder of any
lien which has priority over this Mortgage shall be sent to Lender's address, as
shown near the beginning of this Mortgage. For notice purposes, Grantor agrees
to keep Lender informed at all times of Grantor's current address.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Mortgage:
Amendments. This Mortgage, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Mortgage. No alteration of or amendment to this Mortgage
shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.
Annual Reports. If the Property is used for purposes other than Grantor's
residence, Grantor shall furnish to Lender, upon request, a certified
statement of net operating income received from the Property during
Grantor's previous fiscal year in such form and detail as Lender shall
require. "Net operating income" shall mean all cash receipts from the
Property less all cash expenditures made in connection with the operation
of the Property.
Applicable Law. This Mortgage has been delivered to Lender and accepted by
Lender in the State of Vermont. This Mortgage shall be governed by and
construed in accordance with the laws of the State of Vermont.
Caption Headings. Caption headings in this Mortgage are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Mortgage.
Merger. There shall be no merger of the interest or estate created by this
Mortgage with any other interest or estate in the Property at any time held
by or for the benefit of Lender in any capacity, without the written
consent of Lender.
Multiple Parties. All obligations of Grantor and Borrower under this
Mortgage shall be joint and several, and all references to Grantor shall
mean each and every Grantor, and all references to Borrower shall mean
each and every Borrower. This means that each of the persons signing below
is responsible for all obligations in this Mortgage.
Severability. If a court of competent jurisdiction finds any provision of
this Mortgage to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Mortgage in all other respects shall remain valid and enforceable.
Successors and Assigns. Subject to the limitations stated in this Mortgage
on transfer of Grantor's interest, this Mortgage shall be binding upon and
inure to the benefit of the parties, their successors and assigns. If
ownership of the Property becomes vested in a person other than Grantor,
Lender, without notice to Grantor, may deal with Grantor's successors with
reference to this Mortgage and the indebtedness by way of forebearance or
extension without releasing Grantor from the obligations of this Mortgage
or liability under the indebtedness.
Time is of the Essence. Time is of the essence in the performance of this
Mortgage.
Waiver of Homestead Exemption. Grantor hereby releases and waives all
rights and benefits of the homestead exemption laws of the State of Vermont
as to all indebtedness secured by this Mortgage.
Waivers and Consents. Lender shall not be deemed to have waived any rights
under this Mortgage (or under the Related Documents) unless such waiver is
in writing and signed by Lender. No delay or omission on the part of Lender
in exercising any right shall operate as a waiver of such right or any
other right. A waiver by any party of a provision of this Mortgage shall
not constitute a waiver of or prejudice the party's right otherwise to
demand strict compliance with that provision or any other provision. No
prior waiver by Lender, nor any course of dealing between Lender and
Grantor or Borrower, shall constitute a waiver of any of Lender's rights or
any of Grantor's or Borrower's obligations as to any future transactions.
Whenever consent by Lender is required in this Mortgage, the granting of
such consent by Lender in any instance shall not constitute continuing
consent to subsequent instances where such consent is required.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND
GRANTOR AGREES AS TO ITS TERMS.
GRANTOR:
ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.
By: /s/ SUSAN D. PLAUSTEINER
-------------------------------------------------------------------------
SNOWDANCE HOTEL COMPANY, SUSAN D. PLAUSTEINER, PRESIDENT, General Partner
Signed, acknowledged and delivered in the presence of:
x /s/ [SIGNATURE ILLEGIBLE]
----------------------------------------
Witness
x
----------------------------------------
Witness
- --------------------------------------------------------------------------------
PARTNERSHIP ACKNOWLEDGEMENT
STATE OF VERMONT }
} ss
COUNTY OF WINDSOR }
At White River Junction, this day of 30 June, 1997, personally appeared
SNOWDANCE HOTEL COMPANY, SUSAN D. PLAUSTEINER, PRESIDENT, agent of said
partnership, signer and sealer of the foregoing written instrument, and
acknowledged the same to be the free act and deed of such partnership.
Before me: /s/ [SIGNATURE ILLEGIBLE]
--------------------------------------------------
Notary Public
Comm. Expires 2/10/99
================================================================================
<PAGE>
<PAGE>
RECORDATION REQUESTED BY:
MASCOMA SAVINGS BANK,fsb
10 GATES STREET
PO BOX 426
WHITE RIVER JCT., VT 05001
WHEN RECORDED MAIL TO:
MASCOMA SAVINGS BANK,fsb
10 GATES STREET
PO BOX 426
WHITE RIVER JCT., VT 05001
SEND TAX NOTICE TO:
MASCOMA SAVINGS BANK,fsb
10 GATES STREET
PO BOX 426
WHITE RIVER JCT., VT 05001
SPACE ABOVE THIS LINE IS FOR RECORDER'S USE ONLY
- -------------------------------------------------------------------------------
MORTGAGE
THIS MORTGAGE IS DATED JUNE 30, 1997, between ASCUTNEY MOUNTAIN RESORT,
L.P., whose address is ROUTE 44 PO BOX 699, BROWNSVILLE, VT 05037 (referred to
below as "Grantor"); and MASCOMA SAVINGS BANK,fsb, whose address is 10 GATES
STREET, PO BOX 426, WHITE RIVER JCT., VT 05001 (referred to below as "Lender").
GRANT OF MORTGAGE. For valuable consideration, Grantor grants and conveys to
Lender and Lender's successors and assigns, with power of sale, all of Grantor's
right, title, and interest in and to the following described real property,
together with all existing or susequently erected or affixed buildings,
improvements and fixtures; all easements, rights of way, and appurtenances; all
water, water rights, watercourses and ditch rights (including stock in utilities
with ditch or irrigation rights); and all other rights, royalties, and profits
relating to the real property, including without limitation all minerals, oil,
gas, geothermal and similar matters, located in WINDSOR County, State of Vermont
(the "Real Property"):
SEE ATTACHED SCHEDULE A
The Real Property or its address is commonly known as ASCUTNEY MOUNTAIN RESORT,
BROWNSVILLE, VT 05037.
Grantor presently assigns to Lender all of Grantor's right, title, and interest
in and to all leases of the Property and all Rents from the Property. In
addition, Grantor grants to Lender a Uniform commercial Code security interest
in the Personal Property and Rents.
DEFINITIONS. The following words shall have the following meanings when used in
this Mortgage. Terms not otherwise defined in this Mortgage shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.
Grantor. The word "Grantor" means ASCUTNEY MOUNTAIN RESORT, L.P. The
Grantor is the mortgagor under this Mortgage.
Guarantor. The word "Guarantor" means and includes without limitation each
and all of the guarantors, sureties, and accommodation parties in
connection with the indebtedness.
Improvements. The word "Improvements" means and includes without limitation
all existing and future improvements, buildings, structures, mobile homes
affixed on the Real Property, facilities, additions, replacements and other
construction on the Real Property.
Indebtedness. The word "Indebtedness" means all principal and interest
payable under the Note and any amounts expended or advanced by Lender to
discharge obligations of Grantor or expenses incurred by Lender to enforce
obligations of Grantor under this Mortgage, together with interest on such
amounts as provided in this Mortgage. Specifically, without limitation,
this Mortgage secures a revolving line of credit, under which Lender may
make advances to Grantor so long as Grantor complies with all the terms of
the Note.
Lender. The word "Lender" means MASCOMA SAVINGS BANK, fsb, its successors
and assigns. The Lender is the mortgagee under this Mortgage.
Mortgage. The word "Mortgage" means this Mortgage between Grantor and
Lender, and includes without limitation all assignments and security
interest provisions relating to the Personal Property and Rents.
Note. The word "Note" means the promissory note or credit agreement dated
June 30, 1997. In the original principal amount of $1,500,000.00 from
Grantor and any co-borrowers to Lender, together with all renewals of,
extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the promissory note or agreement. NOTICE TO GRANTOR: THE
NOTE CONTAINS A VARIABLE INTEREST RATE.
Personal Property. The words "Personal Property" mean all equipment,
fixtures, and other articles of personal property now or hereafter owned by
Grantor, and nor or hereafter attached or affixed to the Real Property;
togther with all accessions, parts, and additions to, all replacements of,
and all substitutions for, any of such property; and together with all
proceeds (including without limitation all insurance proceeds and refunds
of premiums) from any sale or other disposition of the Property.
Property. The word "Property" means collectively the Real Properly and the
Personal Property.
Real Property. The words "Real Property" mean the property, interests and
rights described above in the "Grant of Mortgage" section.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the indebtedness.
Rents. The word "Rents" means all present and future rents, revenues
income, issues, royalties, profits, and other benefits derived from the
Property.
THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN
THE RENTS AND PERSONAL PROPERTY IS GIVEN TO SECURE (1) PAYMENT OF THE
INDEBTENDESS AND (2) PERFORMANCE OF ALL OBLIGATIONS OF GRANTOR UNDER THIS
MORTGAGE AND THE RELATED DOCUMENTS. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE
FOLLOWING TERMS:
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor
shall pay to Lender all amounts secured by this Mortgage as they become due, and
shall strictly perform all of Grantor's obligations under this Mortgage.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's
possession and use of the Property shall be governed by the following
provisions:
Possession and Use. Until in default or until Lender exercises its right to
collect Rents as provided for in the Assignment of Rents form executed by
Grantor in connection with the Property, Grantor may remain in possession
and control of and operate and manage the Property and collect the Rents
from the Property.
Duty to Maintain. Grantor shall maintain the Property in tenentable
condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.
Hazardous Sustances. The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this Mortgage,
shall have the same meanings as set forth in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended. 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"),
the Hazardous Materials Transportation Act, 59 U.S.C. Section 1801, et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901,
et seq., or other applicable state or Federal laws, rules, or regulations
adopted pursuant to any of the foregoing. The terms "hazardous waste" and
"hazardous substance" shall also include, without limitation, petroleum and
petroleum by-products or any fraction thereof and asbestos. Grantor
represents and warrants to Lender that: (a) During the period of Grantor's
ownership of the Property, there has been no use, generation, manufacture,
storage, treatment, disposal, release or threatened release of any
hazardous waste or substance by any person on, under, about or from the
Property; (b) Grantor has no knowledge of, or reason to believe that there
has been, except as previously disclosed to
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06-30-1997 MORTGAGE Page 2
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and acknowledge by Lender in writing, (i) any use, generation, manufacture,
storage, treatment, disposal, release or threatened release of any
hazardous waste or substance on, under, about or form the Property by any
prior owners or accupants of the Property or (ii) any actual or threatened
litigation or claims of any kind by any person relating to such matters;
and (c) Except as previously disclosed to and acknowledged by Lender in
writing. (i) neither Grantor nor any tenant, contractor, agent or other
authorized user of the Property shall use, generate, manufacture, store,
treat, dispose of, or release any hazardous waste or substance on, under,
about or form the Property and (ii) any such activity shall be conducted in
compliance with all applicable federal, state, and local laws, regulations
and ordinances, including without limitation those laws, regulations, and
ordinances described above. Grantor authorizes Lender and its agents to
enter upon the Property to make such inspections and tests, at Grantor's
expenses, as Lender may deem appropriate to determine compliance of the
Property with this section of the Mortgage. Any inspections or tests made
by Lender shall be for Lender's purposes only and shall not be construed to
create any responsibility or liability on the part of Lender to Grantor or
to any other person. The representations and warranties contained herein
are based on Grantor's due diligence in investigating the Property for
hazardous waste and hazardous substances. Grantor hereby (a) releases and
waives any future claims against Lender for Indeminity or contribution in
the event Grantor become liable for cleanup or other costs under any such
laws, and (b) agrees to indemnify and hold harmless Lender against any and
all claims, losses, liabilities, damages, penalties, and expenses which
Lender may directly or indirectly sustain or suffer resulting from a breach
of this section of the Mortgage or as a consequence of any use, generation,
manufacture, storage, disposal, release or threatened release occurring
prior to Grantor's ownership or interest in the Property, whether or not
the same was or should have been known to Grantor. The provisions of this
section of the Mortgage, including the obligation to indemnify,shall
survive the payment of the indebtedness and the satisfaction and
revonveyance of the lien of this Mortgage and shall not be affected by
Lender's acquisition of any interest in the Property, whether by
foreclosure or otherwise.
Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance
nor commit, permit, or suffer any stripping of or waste on or to the
Property or any portion of the Property. Without limiting the generally of
the foregoing. Grantor will not remove, or grant to any other party the
right to remove, any timber, minerals (including oil and gas), soil, gravel
or rock products without the prior written consent of Lender.
Removal of Improvements. Grantor shall not demolish or remove any
improvements from the Real Property without the prior written consent of
Lender. As a condition to the removal of any improvements, Lender may
require Grantor to make arrangements satisfactory to Lender to replace
such improvements with improvements of at least equal value.
Lender's Right to Enter. Lender and its agents and representatives may
enter upon the Real Property at all reasonable times to attend to Lender's
interests and to inspect the Property for purposes of Grantor's compliance
with the terms and conditions of this Mortgage.
Compliance with Governmental Requirements. Grantor shall promptly comply
with all laws, ordinances, and regulations, now or hereafter in effect, of
all governmental authorities applicable to the use or occupancy of the
Property, including without limitation, the Americans With Disabilities
Act. Grantor may contest in good faith any such law, ordinance, or
regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Grantor has notified Lender in writing
prior to doing so and so long as, in Lender's sole opinion, Lender's
interest in the Property are not jeopardized. Lender may require
Grantor to post aduate security or a surety bond, reasonably
satisfactory to Lender, to protect Lender's interest.
Duty to Protect Grantor agrees neither to abandon nor leave unattended the
Property. Grantor shall do all other acts. In addition to those acts set
forth above in this section, which from the character and use of the
Property are reasonable necessary to protect and preserve the Property.
DUE ON SALE - CONSENT BY LENDER. Lender may, at its option, declare immediately
due and payable all sums secured by this Mortgage upon the sale or transfer,
without the Lender's prior written consent, of all or any part of the Real
Property, or any interest in the Real Property. A "sale or transfer" means the
conveyance of Real Property or any right, title or interest therein; whether
legal, beneficial or equitable; whether voluntary or involuntary; whether by
outright sale, deed, installment sale contract, land contract, contract for
deed, leasehold interest with a term greater than three (3) years, lease-option
contract, or by sale, assignment, or transfer of any beneficial interest in or
to any land trust holding title to the Real Property, or by any other method of
conveyance of Real Property interest. If any Grantor is a corporation,
partnership or limited liability company, transfer also includes any change in
ownership of more than twenty-five percent (25%) of the voting stock,
partnership interests or limited liability company interests, as the case may
be, of Grantor. However, this option shall not be exercised by Lender if such
exercise is prohibited by federal law or by Vermont law.
<PAGE>
<PAGE>
TAXES AND LIENS. The following provisions relating to the taxes and liens on the
Property are a part of this Mortgage.
Payment. Grantor shall pay when due (and in all events prior to
delinquency) all taxes, payroll taxes, special taxes, assessments, water
charges and sewer service charges levied against or on account of the
Property, and shall pay when due all claims for work done on or for
services rendered or material furnished to the Property. Grantor shall
maintain the Property free of all liens having priority over or equal to
the interest of Lender under this Mortgage, except for the lien of taxes
and assessments not due, and except as otherwise provided in the following
paragraph.
Right to Contest. Grantor may withhold payment of any tax, assessment, or
claim in connection with a good faith dispute over the obligation to pay,
so long as Lender's interest in the Property is not jeopardized. If a lien
arises or is filed as a result of nonpayment, Grantor shall within fifteen
(15) days after the lien arises or, if a lien is filed, within fifteen (15)
days after Grantor has notice of the filing, secure the discharge of the
lien, or if requested by Lender, deposit with Lender cash or a sufficient
corporate surety bond or other security satisfactory to Lender in an amount
sufficient to discharge the lien plus any costs and attorneys' fees or
other charges that could accrue as a result of a foreclosure or sale under
the lien. In any contest, Grantor shall defend itself and Lender and shall
satisfy any adverse judgment before enforcement against the Property.
Grantor shall name Lender as an additional obligee under any surety bond
furnished in the contest proceedings.
Evidence of Payment. Grantor shall upon demand furnish to Lender
satisfactory evidence or payment of the taxes or assessments and shall
authorize the appropriate government official to deliver to Lender at any
time a written statement of the taxes and assessments against the Property.
Notice of Construction. Grantor shall notify Lender at least fifteen (15)
days before any work is commenced, any services are furnished, or any
materials are supplied to the Property, if any mechanic's lien,
materialmen's lien, or other lien could be asserted on account of the work,
services, or materials. Grantor will upon request of Lender furnish to
Lender advance assurances satisfactory to Lender that Grantor can and will
pay the cost of such improvements.
PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the
Property are a part of this Mortgage.
Maintenance of Insurance. Grantor shall procure and maintain policies of
fire insurance with standard extended coverage endorsements on a
replacement basis for the full insurable value covering all improvements on
the Real Property in an amount sufficient to avoid application of any
coinsurance clause, and with a standard mortgagee clause in favor of
Lender. Grantor shall also procure and maintain comprehensive general
liability insurance in such coverage amounts as Lender may request with
Lender being named as additional insureds in such liability insurance
policies. Additionally, Grantor shall maintain such other insurance,
including but not limited to hazard, business interruption and boiler
insurance as Lender may require. Policies shall be written by such
insurance companies and in such form as may be reasonably acceptable to
Lender. Grantor shall deliver to Lender certificates of coverage from each
insurer containing a stipulation that coverage will not be cancelled or
diminished without a minimum of ten (10) days' prior written notice to
Lender and not containing any disclaimer of the insurer's liability for
failure to give such notice. Each insurance policy also shall include an
endorsement providing that coverage in favor or Lender will not be impaired
in any way by any act, omission or default of Grantor or any other person.
Should the Real Property at any time become located in an area designated
by the Director of the Federal Emergency Management Agency as a special
flood hazard area, Grantor agrees to obtain and maintain Federal Flood
Insurance for the full unpaid principal balance of the loan, up to the
maximum policy limits set under the National Flood Insurance Program, or as
otherwise required by Lender, and to maintain such insurance for the term
of the loan.
Application of Proceeds. Grantor shall promptly notify Lender of any loss
or damage to the Property. Lender may make proof of loss if Grantor fails
to do so within fifteen (15) days of the casualty. Whether or not Lender's
security is impaired, Lender may, at its election, apply the proceeds to
the reduction of the indebtedness, payment of any lien affecting the
Property, or the restoration and repair of the Property. If Lender elects
to apply the proceeds to restoration and repair, Grantor shall repair or
replace the damaged or destroyed improvements in a manner satisfactory to
Lender. Lender shall, upon satisfactory proof of such expenditure, pay or
reimburse Grantor from the proceeds for the reasonable cost of repair or
restoration if Grantor is not in default hereunder. Any proceeds which have
not been disbursed within 180 days after their receipt and which Lender has
not committed to the repair or restoration of the Property shall be used
first to pay any amount owing to Lender under this Mortgage, then to prepay
accrued interest, and the remainder, if any, shall be applied to the
principal balance of the indebtedness. If Lender holds any proceeds after
payment in full of the indebtedness, such proceeds shall be paid to
Grantor.
Unexpired Insurance at Sale. Any unexpired insurance shall inure to the
benefit of, and pass to, the purchaser of the Property covered by this
Mortgage at any trustee's sale or other sale held under the provisions of
this Mortgage, or at any foreclosure sale of such Property.
Grantor's Report on Insurance. Upon request of Lender, however not more
than once a year, Grantor shall furnish to Lender a report on each existing
policy of insurance showing: (a) the name of the insurer; (b) the risks
insured; (c) the amount of the policy; (d) the property insured, the then
current replacement value of such property, and the manner of determining
that value; and (e) the expiration date of the policy. Grantor shall, upon
request of Lender, have an independent appraiser satisfactory to Lender
determine the cash value replacement cost of the Property.
TAX AND INSURANCE RESERVES. Subject to any limitations set by applicable law,
Lender may require Grantor to maintain with Lender reserves for payment of
annual taxes, assessments, and insurance premiums, which reserves shall be
created by advance payment or monthly payments of a sum estimated by Lender to
be sufficient to produce amounts at least equal to the taxes, assessments, and
insurance premiums to be paid. The reserve funds shall be held by Lender as a
general deposit from Grantor, which Lender may satisfy by payment of the taxes,
assessments, and insurance
<PAGE>
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06-30-1997 MORTGAGE Page 3
Loan No 27027106 (Continued)
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premiums required to be paid by Grantor as they become due. Lender shall have
the right to draw upon the reserve funds to pay such items, and Lender shall not
be required to determine the validity or accuracy of any item before paying it.
Nothing in the Mortgage shall be construed as requiring Lender to advance other
monies for such purposes, and Lender shall not incur any liability for anything
it may do or omit to do with respect to the reserve account. All amounts in
the reserve account are hereby pledged to further secure the indebtedness, and
Lender is hereby authorized to withdraw and apply such amounts on the
indebtedness upon the occurrence of an Event of Default. Lender shall not be
required to pay any interest or earnings on the reserve funds unless required by
law or agreed to by Lender in writing. Lender does not hold the reserve funds
in trust for Grantor, and Lender is not Grantor's agent for payment of the taxes
and assessments required to be paid by Grantor.
EXPENDITURES BY LENDER. If Grantor fails to comply with any provision of this
Mortgage, or if any action or proceeding is commenced that would materially
affect Lender's interests in the Property, Lender on Grantor's behalf may, but
shall not be required to, take any action that Lender deems appropriate. Any
amount that Lender expends in so doing will bear interest at the rate provided
for in the Note from the date incurred or paid by Lender to the date of
repayment by Grantor. All such expenses, at Lender's option, will (a) be payable
on demand, (b) be added to the balance of the Note and be apportioned among and
be payable with any installment payments to become due during either (i) the
term of any applicable insurance policy or (ii) the remaining term of the Note,
or (c) be treated as a balloon payment which will be due and payable at the
Note's maturity. This Mortgage also will secure payment of these amounts. The
rights provided for in this paragraph shall be in addition to any other rights
or any remedies to which Lender may be entitled on account of the default. Any
such action by Lender shall not be construed as curing the default so as to bar
Lender from any remedy that it otherwise would have had.
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of
the Property are a part of this Mortgage.
Title. Grantor warrants that: (a) Grantor holds good and marketable title
of record to the Property in fee simple, free and clear of all liens and
encumbrances other than those set forth in the Real Property description or
in any title insurance policy, title report, or final title opinion issued
in favor of, and accepted by, Lender in connection with this Mortgage, and
(b) Grantor has the full right, power, and authority to execute and deliver
this Mortgage to Lender.
Defense of Title. Subject to the exception in the paragraph above, Grantor
warrants and will forever defend the title to the Property against the
lawful claims of all persons. In the event any action or proceeding is
commenced that questions Grantor's title or the interest of the Lender
under this Mortgage, Grantor shall defend the action at Grantor's expense.
Grantor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the
proceeding by counsel of Lender's own choice, and Grantor will deliver, or
cause to be delivered, to Lender such instruments as Lender may request
from time to time to permit such participation.
Compliance with Laws. Grantor warrants that the Property and Grantor's use
of the Property complies with all existing applicable laws, ordinances, and
regulations of governmental authorities.
CONDEMNATION. The following provisions relating to condemnation of the Property
are a part of this Mortgage.
Application of Net Proceeds. If all or any part of the Property is
condemned by eminent domain proceedings or by any proceeding or purchase in
lieu of condemnation, Lender may at its election require that all or any
portion of the net proceeds of the award be applied to the indebtedness or
the repair or restoration of the Property. The net proceeds of the award
shall mean the award after payment of all reasonable costs, expenses, and
attorneys' fees incurred by Lender in connection with the condemnation.
Proceedings. If any proceeding in condemnation is filed, Grantor shall
promptly notify Lender in writing, and Grantor shall promptly take such
steps as may be necessary to defend the action and obtain the award.
Grantor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the
proceeding by counsel of its own choice, and Grantor will deliver or cause
to be delivered to Lender such instruments as may be requested by it from
time to time to permit such participation.
<PAGE>
IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following
provisions relating to governmental taxes, fees and charges are a part of this
Mortgage.
Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall
execute such documents in addition to this Mortgage and take whatever other
action is requested by Lender to perfect and continue Lender's lien on the
Real Property. Grantor shall reimburse Lender for all taxes, as described
below, together will all expenses incurred in recording, perfecting or
continuing this Mortgage, including without limitation all taxes, fees,
documentary stamps, and other charges for recording or registering this
Mortgage.
Taxes. The following shall constitute taxes to which this section applies:
(a) a specific tax upon this type of Mortgage or upon all or any part of
the indebtedness secured by this Mortgage; (b) a specific tax on Grantor
which Grantor is authorized or required to deduct from payments on the
indebtedness secured by this type of Mortgage; (c) a tax on this type of
Mortgage chargeable against the Lender or the holder of the Note; and (d) a
specific tax on all or any portion of the indebtedness or on payments of
principal and interest made by Grantor.
Subsequent Taxes. If any tax to which this section applies is enacted
subsequent to the date of this Mortgage, this event shall have the same
effect as an Event of Default (as defined below), and Lender may exercise
any or all of its available remedies for any Event of Default as provided
below unless Grantor either (a) pays the tax before it becomes delinquent,
or (b) contests the tax as provided above in the Taxes and Liens section
and deposits with Lender cash or a sufficient corporate surety bond or
other security satisfactory to Lender.
SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to
this Mortgage as a security agreement are a part of this Mortgage.
Security Agreement. This instrument shall constitute a security agreement
to the extent any of the Property constitutes fixtures or other personal
property, and Lender shall have all of the rights of a secured party under
the Uniform Commercial Code as amended from time to time.
Security Interest. Upon request by Lender, Grantor shall execute financing
statements and take whatever other action is requested by Lender to perfect
and continue Lender's security interest in the Rents and Personal Property.
In addition to recording this Mortgage in the real property records, Lender
may, at any time and without further authorization from Grantor, file
executed counterparts, copies or reproductions of this Mortgage as a
financing statement. Grantor shall reimburse Lender for all expenses
incurred in perfecting or continuing this security interest. Upon default,
Grantor shall assemble the Personal Property in a manner and at a place
reasonably convenient to Grantor and Lender and make it available to Lender
within three (3) days after receipt of written demand from Lender.
Addresses. The mailing addresses of Grantor (debtor) and Lender (secured
party), from which information concerning the security interest granted by
this Mortgage may be obtained (each as required by the Uniform Commercial
Code), are as stated on the first page of this Mortgage.
FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to
further assurances and attorney-in-fact are a part of this Mortgage.
Further Assurances. At any time, and from time to time, upon request of
Lender, Grantor will make, execute and deliver, or will cause to be made,
executed or delivered, to Lender or to Lender's designee, and when
requested by Lender, cause to be filed, recorded, refiled, or rerecorded,
as the case may be, at such times and in such offices and places as Lender
may deem appropriate, any and all such mortgages, deeds of trust, security
deeds, security agreements, financing statements, continuation statements,
instruments of further assurance, certificates, and other documents as may,
in the sole opinion of Lender, be necessary or desirable in order to
effectuate, complete, perfect, continue, or preserve (a) the obligations of
Grantor under the Note, this Mortgage, and the Related Documents, and (b)
the liens and security interests created by this Mortgage as first and
prior liens on the Property, whether now owned or hereafter acquired by
Grantor. Unless prohibited by law or agreed to the contrary by Lender in
writing, Grantor shall reimburse Lender for all costs and expenses incurred
in connection with the matters referred to in this paragraph.
Attorney-in-Fact. If Grantor fails to do any of the things referred to in
the preceding paragraph, Lender may do so for and in the name of Grantor
and at Grantor's expense. For such purposes, Grantor hereby irrevocably
appoints Lender as Grantor's attorney-in-fact for the purpose of making,
executing, delivering, filing, recording, and doing all other things as may
be necessary or desirable, in Lender's sole opinion, to accomplish the
matters referred to in the preceding paragraph.
FULL PERFORMANCE. If Grantor pays all the indebtedness when due, and otherwise
performs all the obligations imposed upon Grantor under this Mortgage, Lender
shall execute and deliver to Grantor a suitable satisfaction of this Mortgage
and suitable statements of termination of any financing statement on file
evidencing Lender's security interest in the Rents and the Personal Property.
Grantor will pay, if permitted by applicable law, any reasonable termination fee
as determined by Lender from time to time.
DEFAULT. Each of the following, at the option of Lender, shall constitute an
event of default ("Event of Default") under this Mortgage:
Default on Indebtedness. Failure of Grantor to make any payment when due on
the indebtedness.
Default on Other Payments. Failure of Grantor within the time required by
this Mortgage to make any payment for taxes or insurance, or any other
payment necessary to prevent filing of or to effect discharge of any lien.
Compliance Default. Failure of Grantor to comply with any other term,
obligations, covenant or condition contained in this Mortgage, the Note or
in any of the Related Documents.
Default in Favor of Third Parties. Should Grantor default under any loan,
extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may
materially affect any of Grantor's property or Grantor's ability to repay
the
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060-30-197 MORTGAGE Page 4
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Note or Grantor's ability to perform Grantor's obligations under this
Mortgage or any of the Related Documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Grantor under this Mortgage, the
Note or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished.
Defective Collateralization. This Mortgage or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
documents to create a valid and perfected security interest or lien) at any
time and for any reason.
Death or Insolvency. The dissolution or termination of Grantor's existence
as a going business or the death of any partner, the insolvency of Grantor,
the appointment of a receiver for any part of Grantor's property, any
assignment for the benefit of creditors, any type of credit workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws by
or against Grantor.
Foreclosure, Forfeiture, etc. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-helf, repossession or any
other method, by any creditor of Grantor or by any governmental agency
against any of the Property. However, this subsection shall not apply in
the event of a good faith dispute by Grantor as to the validity or
reasonableness of the claim which is the bais of the foreclosure or
forefeiture proceeding, provided that Grantor gives Lender written notice
of such claim and furnishes reserves or a surety bond for the claim
satisfactory to Lender.
Breach of Other Agreement. Any breach by Grantor under the terms of any
other agreement between Grantor and Lender that is not remedied within any
grace period provided therein, including without limitation any agreement
concerning any indebtedness or other obligation of Grantor to Lender,
whether existing now or later.
Events Affecting Guarantor. Any of the preceding events occurs with respect
to any Guarantor of any of the indebtedness or any Guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability
under, any Guaranty of the Indebtedness. Lender, at its option, may, but
shall not be required to, permit the Guarantor's estate to assume
unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure the Event of Default.
Events Affecting Co-Borrowers. Any of the preceding events occurs with
respect to any co-borrower of any of the indebtedness or any co-borrower
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any of the indebtedness. Lender, at its option, may, but
shall not be required to, permit the co-borrower's estate to assume
unconditionally the obligations on the indebtedness in a manner
satisfactory to Lender, and, in doing so, cure the Event of Default.
Adverse Change. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of the
indebtedness is impaired.
Insecurity. Lender in good faith deems itself insecure.
Right to Cure. If such a failure is curable and if Grantor has not been
given a notice of a breach of the same provision of this Mortgage within
the preceding twelve (12) months, it may be cured (and no Event of Default
will have occurred) if Grantor, after Lender sends written notice demanding
cure of such failure: (a) cures the failure within ten (10) days; or (b) if
the cure requires more than ten (10) days, immediately initiates steps
sufficient to cure the failure and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical.
<PAGE>
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and
at any time thereafter, Lender, at its option, may exercise any one or more of
the following rights and remedies, in addition to any other rights or remedies
provided by law:
Accelerate indebtedness. Lender shall have the right at its option without
notice to Grantor to declare the entire indebtedness immediately due and
payable, including any prepayment penalty which Grantor would be required
to pay.
UCC Remedies. With respect to all or any part of the Personal Property,
Lender shall have all the rights and remedies of a secured party under the
Uniform Commercial Code.
Collect Rents. Lender shall have the right, without notice to Grantor, to
take possession of the Property and collect the Rents, including amounts
past due and unpaid, and apply the net proceeds, over and above Lender's
costs, against the indebtedness. In furtherance of this right, Lender may
require any tenant or other user of the Property to make payments of rent
or use fees directly to Lender. If the Rents are collected by Lender, then
Grantor irrevocably designates Lender as Grantor's attorney-in-fact to
endorse instruments received in payment thereof in the name of Grantor and
to negotiate the same and collect the proceeds. Payments by tenants or
other users to Lender in response to Lender's demand shall satisfy the
obligations for which the payments are made, whether or not any proper
grounds for the demand existed. Lender may exercise its rights under this
subparagraph either in person, by agent, or through a receiver.
Appoint Receiver. Lender shall have the right to have a receiver appointed
to take possession of all or any part of the Property, with the power to
protect and preserve the Property, to operate the Property preceding
foreclosure or sale, and to collect the Rents from the Property and apply
the proceeds, over and above the cost of the receivership, against the
indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist wiether or not
the apparent value of the Property exceeds the indebtedness by a
substantial amount. Employment by Lender shall not disqualify a person from
serving as a receiver.
Judicial Foreclosure. Lender may obtain a judicial decree foreclosing
Grantor's interest in all or any part of the Property.
Nonjudicial Sale. If permitted by applicable law, Lender may foreclose
Grantor's interest in all or in any part of the Personal Property or the
Real Property by nonjudicial sale.
Deficiency Judgement. If permitted by applicable law, Lender may obtain a
judgment for any deficiency remaining in the indebtedness due to Lender
after application of all amounts received from the exercise of the rights
provided in this section.
Tenancy at Sufferance. If Grantor remains in possession of the Property
after the Property is sold as provided above or Lender otherwise becomes
entitled to possession of the Property upon default of Grantor, Grantor
shall become a tenant at sufferance of Lender or the purchaser of the
Property and shall, at Lender's option, either (a) pay a reasonable rental
for the use of the Property, or (b) vacate the Property immediately upon
the demand of Lender.
Other Remedies. Lender shall have all other rights and remedies provided in
this Mortgage or the Note or available at law or in equity.
Sale of the Property. To the extent permitted by applicable law, Grantor
hereby waives any and all right to have the property marshalled. In
exercising its rights and remedies, Lender shall be free to sell all or any
part of the Property together or separately, in one sale or by separate
sales. Lender shall be entitilted to bid at any public sale on all or any
portion of the Property.
Notice of Sale. Lender shall give Grantor reasonable notice of the time and
place of any public sale of the Personal Property or of the time after
which any private sale or other intended disposition of the Personal
Property is to be made. Reasonable notice shall means notice given at least
ten (10) days before the time of the sale or disposition.
Power of Sale. Where Lender invokes the power of sale, Lender's rights and
duties shall be determined according to existing Vermont law governing said
power of sale. If it shall be necessary to inflate any legal action to
determine the person or persons legally entitled to any excess proceeds of
the sale then the Lender's cost of said action shall be deducted from the
said excess and reimbursed to Lender before its ultimate disbursal.
Waiver; Election of Remedies. A waiver by any party of a breach of a
provision of this Mortgage shall not constitute a waiver of or prejudice
the party's rights otherwise to demand strict compliance with that
provision or any other provision. Election by Lender to pursue any remedy
shall not exclude pursuit of any other remedy, and an election to make
expenditures or take ation to perform an obligation of Grantor under this
Mortgage after failure of Grantor to perform shall not affect Lender's
right to declare a default and exercise its remedies under this Mortgage.
Attorneys' Fee; Expenses. If Lender institutes any suit or action to
enforce any of the terms of this Mortgage, Lender shall be entitled to
recover such sum as the court may adjudge reasonable as attorneys' fees at
trial and on any appeal. Whether or not any court action is involved, all
reasonable expenses incurred by Lender that in Lender's opinion are
necessary at any time for the protection of its interest or the enforcement
of its rights shall become a part of the indebtedness payable on demand and
shall bear interest from the date of expenditure until repaid at the rate
provided for in the Note. Expenses covered by this paragraph include,
without limitation, however subject to any limits under applicable law,
Lender's attorneys' fees and Lender's legal expenses whether or not there
is a lawsuit, including attorneys' free for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals and any anticipated post-judgment collection services, the cost of
searching records, obtaining title reports (including foreclosure reports),
surveyors' reports, and appraisal fees, and title insurance, to the extent
permitted by applicable law. Grantor also will pay any court costs, in
addition to all other sums provided by law.
NOTICES TO GRANTOR AND OTHER PARTIES. Any notice under this Mortgage, including
without limitation any notice of default and any notice of sale to Grantor,
shall be in writing, may be be sent by telefacsimile, and shall be effective
when actually delivered, or when deposited with a nationally recognized
overnight courier, or, if mailed, shall be deemed effective when deposited in
the United States mail first class, certified or registered mail, postage
prepaid, directed to the addresses shown near the beginning of this Mortgage.
Any party may change its address for notices under this Mortgage by giving
formal written notice to the other parties specifying that the purpose of the
notice is to change the party's address. All copies of
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06-30-1997 MORTGAGE Page 5
Loan No. 27027106 (Continued)
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notices of foreclosure from the holder of any lien which has priority over this
Mortgage shall be sent to Lender's address, as shown near the beginning of this
Mortgage. For notice purposes, Grantor agrees to keep Lender informed at all
times of Grantor's current address.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Mortgage:
Amendments. This Mortgage, together with any Related
Documents, constitutes the entire understanding and
agreement of the parties as to the matters set forth in this
Mortgage. No alteration of or amendment to this Mortgage
shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the
alteration or amendment.
Annual Reports. If Property is used for purposes other than
Grantor's residence, Grantor shall furnish to Lender, upon
request, a certified statement of net operating income
received from the Property during Grantor's previous fiscal
year in such form and detail as Lender shall require. "Net
operating income" shall mean all cash receipts from the
Property less all cash expenditures made in connection with
the operation of the Property.
Applicable Law. This Mortgage has been delivered to Lender
and accepted by Lender in the State of Vermont. This
Mortgage shall be governed by and construed in accordance
with the laws of the State of Vermont.
Caption Headings. Caption Headings in this Mortgage are for
convenience purposes only and are not to be used to
interpret or define the provisions of this Mortgage.
Merger. There shall be no merger of the interest or estate
created by this Mortgage with any other interest or estate
in the Property at any time held by or for the benefit of
Lender in any capacity, without written consent of Lender.
Multiple Parties. All obligations of Grantor under this
Mortgage shall be joint and several, and all references to
Grantor shall mean each and every Grantor. This means that
each of the persons signing below is responsible for all
obligations in this Mortgage.
<PAGE>
Severability. If a court of competent jurisdiction finds any
provision of this Mortgage to be invalid or unenforceable as
to any person or circumstance, such finding shall not render
that provision invalid or unenforceable as to any other
persons or circumstances. If feasible, any such offending
provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the
offending provision cannot be so modified, it shall be
stricken and all other provisions of this Mortgage in all
other respects shall remain valid and enforceable.
Successors and Assigns. Subject to the limitation stated in
this Mortgage on transfer of Grantor's interest, this
Mortgage shall be binding upon and inure to be the benefit
of the parties, their successors and assigns. If ownership
of the Property becomes vested in a person other than
Grantor, Lender, without notice to Grantor, may deal with
Grantor's successors with reference to this Mortgage and the
indebtedness by way of forbearance or extension without
Releasing Grantor from the obligations of this Mortgage or
lability under the indebtedness.
Time is of the Essence. Time is of the essence in the
performance of this Mortgage.
Waiver of Homestead Exemption. Grantor hereby releases and
waives all rights and benefits of the homestead exemption
laws of the State of Vermont as to all indebtedness secured
by this Mortgage.
Waiver and Consents. Lender shall not be deemed to have
waived any rights under this Mortgage (or under the Related
Documents) unless such waiver is in writing and signed by
Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such sight
or any other right. A waiver by any party of a provision of
this Mortgage shall not constitute a waiver of or prejudice
the party's right otherwise to demand strict compliance with
that provision or any other provision. No prior waiver by
Lender, nor any course of dealing between Lender and
Grantor, shall constitute a waiver of any of Lender's rights
or any of Grantor's obligations as to any future
transactions. Whenever consent by Lender is required in this
Mortgage, the granting of such consent by Lender in any
instance shall not constitute continuing consent to
subsequent instances where such consent is required.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND
GRANTOR AGREES TO ITS TERMS.
GRANTOR:
ASCUTNEY MOUNTAIN RESORT, L.P.
By: /s/ SUSAN D. PLAUSTEINER
_________________________
SNOWDANCE SKI COMPANY, General Partner, SUSAN D. PLAUSTEINER, PRESIDENT
Signed, acknowledged and delivered in the presence of:
[signature illegible]
- ----------------------------------
Witness
- ----------------------------------
Witness
- --------------------------------------------------------------------------------
PARNTERSHIP ACKNOWLEDGMENT
STATE OF VERMONT )
)ss
COUNTY OF WINDSOR )
At Hartford, this day of June 30, 1997, personally appeared SUSAN D.
PLAUSTEINER, PRESIDENT Officer of SNOWDANCE SKI COMPANY, General Partner of
ASCUTNEY MOUNTAIN RESORT, L.P., agent of said partnership, signer and sealer of
the foregoing written instrument, and acknowledged the same to be the free act
and deed of such partnership.
Before me: [signature illegible]
___________________________
Notary Public
<PAGE>
<PAGE>
SCHEDULE A
(Legal Description - Resort)
It being a portion of the same lands and premises with all rights
appurtenance thereto conveyed by virtue of a Trustee's Deed dated September 1,
1993 from John R. Canney, III, Trustee to Ascutney Mountain Resort, L.P.,
recorded in Book 49 at Pages 85-91 of the West Windsor Land Records and
described in particular as follows:
The following real property being 716.36 acres, more or less, together with
all buildings and improvements thereon and any and all easements, licenses,
rights and interests therein or appurtenant thereto (including, without
limitation, the easements, licenses, rights and interests described
hereinbelow), located in the Town of West Windsor, County of Windsor, State of
Vermont being more particularly described and/or depicted on a survey dated
April 21, 1988, revised April 23, 1988, and May 10, 1988, prepared by Farnsworth
Surveys of Brownsville, Vermont entitled "Land of Mt. Ascutney Associates,
Brownsville, Vermont" comprising 2 sheets, being Drawing No. 88-737 and Drawing
No. 88-737A, a mylar thereof recorded on Pages 176-177 of the West Windsor Map
Rack:
1. Parcels 1, 8, 9, 10, 11, 12, 13A, 13B, and 20. Containing 575.44 acres,
more or less, with all buildings and improvements thereon situated, located on
the southerly side of Vermont Route #44 in West Windsor (Brownsville), Vermont,
and further being described and commonly referred to as the Mt. Ascutney Ski
Area, owned by Mt. Ascutney Associates by virtue of a Warranty Deed dated
September 28, 1984 from Mt. Ascutney Corporation, recorded in Book 29 at Pages
16-23 of the West Windsor Land Records, and a Corrective Warranty Deed dated
November 14, 1984 from Mt. Ascutney Corporation, recorded in Book 29 at Pages
166-173 of the West Windsor Land Records, and by virtue of a Warranty Deed dated
November 12, 1984 from Mt. Ascutney Corporation, recorded in Book 29 at Pages
128-130 of the West Windsor Land Records.
2. Parcel 5. Containing .98 acres, more or less, and further being
described as Lot S-65 of the Sky Hawk Village Development, so-called, owned by
Mt. Ascutney Associates by virtue of a Warranty Deed dated September 28, 1984
from Mt. Ascutney Corporation, recorded in Book 29 at Pages 24-26 of the West
Windsor Land Records.
3. McArdle Parcel. Containing 1.07 acres, more or less, and further being
described as Lot S-46 of the Sky Hawk Village Development, so-called, owned by
Mt. Ascutney Associates by virtue of a Warranty Deed dated October 3, 1988 from
Richard and Lois McArdle, recorded in Book 41 at Pages 102-103 of the West
Windsor Land Records.
<PAGE>
<PAGE>
4. McDermott Parcel. Containing 1.05 acres, more or less, and further being
described as Lot S-47 of the Sky Hawk Village Development, so-called, owned by
Mt. Ascutney Associates by virtue of a Warranty Deed dated March 26, 1988 from
Michael J. and Linda C. McDermott, recorded in Book 39 at Pages 422-424 of the
West Windsor Land Records.
5. Parcels 14 and 15. Containing 95.26 acres, more or less, with
right-of-way appurtenant thereto, located on both sides of Town Road No. 40 in
West Windsor, Vermont, and further being described as property owned by Mt.
Ascutney Associates by virtue of a Warranty Deed dated September 28, 1984 from
Summit Ventures Incorporated, recorded in Book 29 at Pages 29-33 of the West
Windsor Land Records, and a Corrective Warranty Deed dated November 14, 1984
from Summit Ventures Incorporated, recorded in Book 29 at Pages 161-165 of the
West Windsor Land Records.
6. Parcels 17A and 17B. Containing a total of 3.15 acres, more or less, and
further being described as Lots No. 3 and 4 of the Ascutney Mountain Village
Development, so-called, owned by Mt. Ascutney Associates by virtue of a Warranty
Deed dated June 18, 1985 from Charlotte A. Donaldson Maher, recorded in Book 32
at Pages 140-142 of the West Windsor Land Records.
7. Parcels 18A, 18B, 18C, 18D, and 18E. Containing a total of 51.2 acres,
more or less, and further being described as the property owned by Mt. Ascutney
Associates by virtue of a Warranty Deed dated July 18, 1985 from Summit Ventures
Incorporated, recorded in Book 32 at Pages 218-221 of the West Windsor Land
Records.
8. Village Road, so-called. That portion of Village Road, so-called,
extending from State Aid Highway 2 to Sky Hawk Lane, so-called, containing by
estimate 3.5 acres, more or less.
9. Brown Parcel. Containing 1.64 acres, more or less, and further being
described as the property owned by Mt. Ascutney Associates by virtue of a
Warranty Deed dated November 13, 1987 from Kneeland C. Brown and Shirley A.
Brown, recorded in Book 39 at Pages 425-426 of the West Windsor Land Records.
10. Easement granted pursuant to a Warranty Deed dated September 28, 1984
from Mt. Ascutney Corporation, recorded in Book 29 at Pages 16-23 of the West
Windsor Land Records, and a Corrective Warranty Deed dated November 14, 1984
from Mt. Ascutney Corporation, recorded in Book 29 at Pages 166-173 of the West
Windsor Land Records.
11. Right of Way granted pursuant to a Warranty Deed dated March 16, 1987
from Lee R. Sisti, recorded in Book 36 at Pages 194-196 of the West Windsor Land
Records.
12. Right of Way granted pursuant to a Warranty Deed dated October 3, 1988
from Richard and Lois McArdle, recorded in Book
<PAGE>
<PAGE>
41 at Pages 102-103 of the West Windsor Land Records.
13. Right of Way granted pursuant to a Warranty Deed dated March 26, 1988
from Michael J. and Linda C. McDermott, recorded in Book 39 at Pages 422-424 of
the West Windsor Land Records.
14. Any rights to the land within Town Road 40 granted pursuant to a
Warranty Deed dated September 28, 1984 from Summit Ventures Incorporated,
recorded in Book 29 at Pages 29-33 of the West Windsor Land Records, and a
Corrective Warranty Deed dated November 14, 1984 from Summit Ventures
Incorporated, recorded in Book 29 at Pages 161-165 of the West Windsor Land
Records.
15. Rights in land granted pursuant to a Warranty Deed dated July 18, 1985
from Summit Ventures Incorporated, recorded in Book 32 at Pages 218-221 of the
West Windsor Land Records.
16. Easements and rights granted pursuant to a Warranty Deed, from Mt.
Ascutney Associates, to Mt. Ascutney Associates Realty Company, Inc., dated
December 17, 1984 and recorded in the West Windsor Land Records on December 20,
1984 in Book 29, Pages 253-258.
17. Spring Rights granted pursuant to a Warranty Deed, dated as of May 26,
1961 from Stewart and Patricia Barrows to Mt. Ascutney Ski Area, Inc., recorded
in the West Windsor Land Records in Book 14, Page 126.
18. All real property, improvements, leases, licenses, easements, rights of
way, and such other interests of John R. Canney, Trustee in, to or pertaining to
lands and premises of the Debtors known as the Mt. Ascutney Ski Area and Resort
a/k/a the Mt. Ascutney Ski Resort, but specifically excluding any real property,
improvements, leases, licenses, rights-of-way, and easements granted by Trustee
to:
(a) Ascutney Mountain Resort Hotel, L.P., a Delaware limited
partnership, pursuant to the terms of a Trustee's Deed (Hotel) dated
September 1, 1993, recorded in Book 49 at Page 92-102 of the West Windsor
Land Records.
(b) Ascutney Mountain Resort Realty, L.P., a Delaware limited
partnership, pursuant to the terms of that certain Trustee's Deed
(Mountain's Edge), dated September 1, 1993, recorded in book 49 at Pages
103-110 of the West Windsor Land Records.
(c) Ascutney Mountain Resort, L.P. a Delaware limited partnership,
pursuant to the terms of a Trustee's Deed (Sewerline), dated September 1,
1993, recorded in Book 49 at Page 111-115 of the West Windsor Land Records.
The references contained in Paragraphs 1 through 7 and Paragraph 9 of this
Exhibit A to any deeds or the previous owner
<PAGE>
<PAGE>
of the property or interests described therein are included solely for reference
purposes and do not, in any way, modify or limit the legal description of the
property or interests conveyed hereby.
With the EXCEPTION of a parcel of land containing 16.93 acres, more or
less, conveyed by Ascutney Mountain Resort, L.P. to Steven Plausteiner and Susan
D. Plausteiner by Warranty Deed dated June 30, 1997 to be recorded in the West
Windsor Land Records, to which deed and a survey dated April 29, 1994 prepared
by Robert W. Farnsworth, Registered Land Surveyor, of Brownsville, Vermont
entitled "Land Surveyed for Steven & Susan Plausteiner - Coaching Land - West
Windsor - Vermont", Drawing No. 94-1118, and being a portion of Parcel 15
hereinabove described, to which surveys reference may be made for further
particulars of description of lands and premises excluded from the legal
description of the insured premises.
<PAGE>
<PAGE>
RECORDATION REQUESTED BY:
MASCOMA SAVINGS BANK,fsb
10 GATES STREET
PO BOX 426
WHITE RIVER JCT., VT 05001
WHEN RECORDED MAIL TO:
MASCOMA SAVINGS BANK,fsb
10 GATES STREET
PO BOX 426
WHITE RIVER JCT., VT 05001
SEND TAX NOTICES TO:
MASCOMA SAVINGS BANK,fsb
10 GATES STREET
PO BOX 426
WHITE RIVER JCT., VT 05001
SPACE ABOVE THIS LINE IS FOR RECORDER'S USE ONLY
- --------------------------------------------------------------------------------
MORTGAGE
THIS MORTGAGE IS DATED JUNE 30, 1997, between STEVEN H. PLAUSTEINER and SUSAN D.
PLAUSTEINER, whose address is COACHING LN,BROWNSVILLE, VT 05037 (referred to
below as "Grantor"); and MASCOMA SAVINGS BANK, fsb, whose address is 10 GATES
STREET, PO 80X 426, WHITE RIVER JCT., VT 05001 (referred to below as "Lender").
GRANT OF MORTGAGE. For valuable consideration, Grantor grants and conveys to
Lender and Lender's successors and assigns, with power of sale, all of Grantor's
right, title, and interest in and to the following described real property,
together with all existing or subsequently erected or affixed buildings,
improvements and fixtures; all easements, rights of way, and appurtenances; all
water, water rights, watercourses and ditch rights (including stock in utilities
with ditch or irrigation rights); and all other rights, royalties, and profits
relating to the real property, including without limitation all minerals, oil,
gas, geothermal and similar matters, located in WINDSOR County, State of Vermont
(the "Real Property"):
SEE ATTACHED SCHEDULE A
The Real Property or its address is commonly known as COACHING LANE,
BROWNSVILLE, VT 05037.
Grantor presently assigns to Lender all of Grantor's right, title, and interest
in and to all leases of the Property and all Rents from the Property. In
addition, Grantor grants to Lender a Uniform Commercial Code security interest
in the Personal Property and Rents.
DEFINITIONS. The following words shall have the following meanings when used in
this Mortgage. Terms not otherwise defined in this Mortgage shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.
Borrower. The word "Borrower" means each and every person or entity signing
the Note, including without limitation ASCUTNEY MOUNTAIN RESORT, L.P. and
ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.
Grantor. The word "Grantor" means any and all persons and entities
executing this Mortgage, including without limitation all Grantors named
above. The Grantor is the mortgagor under this Mortgage.
Guaranty. The word "Guaranty" means the guaranty from Grantor to Lender,
including without limitation a guaranty or all or part of the Note.
Guarantor. The word "Guarantor" means and includes without limitation each
and all of the guarantors, sureties, and accommodation parties in
connection with the indebtedness.
Improvements. The word "Improvements" means and includes without limitation
all existing and future improvements, buildings, structures, mobile homes
affixed on the Real Property, facilities, additions, replacements and other
construction on the Real Property.
Indebtedness. The word "Indebtedness" means all obligations of Grantor
under the Guaranty and any amounts expended or advanced by Lender to
discharge obligations of Grantor or expenses incurred by Lender to enforce
obligations of Grantor under this Mortgage, together with interest on such
amounts as provided in this Mortgage. Specifically, without limitation,
this Mortgage secures a guaranty of a revolving line of credit, under which
Lender may make advances to Borrower so long as Borrower complies with all
the terms of the Note.
Lender. The word "Lender" means MASCOMA SAVINGS BANK, fsb, its successors
and assigns. The Lender is the mortgagee under this Mortgage.
Mortgage. The word "Mortgage" means this Mortgage between Grantor and
Lender, and includes without limitation all assignments and security
interest provisions relating to the Personal Property and Rents.
Note. The word "Note" means the promissory note or credit agreement dated
June 30, 1997, in the original principal amount of $1,500,000.00 from
Borrower and any co-borrowers to Lender, together with all renewals of,
extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the promissory note or agreement. NOTICE TO GRANTOR: THE
NOTE CONTAINS A VARIABLE INTEREST RATE.
Personal Property. The words "Personal Property" mean all equipment,
fixtures, and other articles of personal property now or hereafter owned by
Grantor, and now or hereafter attached or affixed to the Real Property;
together with all accessions, parts, and additions to, all replacement
of, and all substitutions for, any of such property; and together with all
proceeds (including without limitation all insurance proceeds and refunds
of premiums) from any sale or other disposition of the Property.
Property. The word "Property" means collectively the Real Property and the
Personal Property.
Real Property. The words "Real Property" mean the property, interests and
rights described above in the "Grant of Mortgage" section.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the Indebtedness.
Rents. The word "Rents" means all present and future rents, revenues,
income, issues, royalties, profits, and other benefits derived from the
Property.
THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN
THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (1) A GUARANTY FROM GRANTOR
TO LENDER, AND DOES NOT DIRECTLY SECURE THE OBLIGATIONS DUE LENDER UNDER THE
NOTE, AND (2) PERFORMANCE OF ALL OBLIGATIONS OF GRANTOR UNDER THIS MORTGAGE AND
THE RELATED DOCUMENTS. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING
TERMS:
GRANTOR'S WAIVERS. This Mortgage secures a guaranty and does not directly secure
the indebtedness due Lender under the Note. Grantor waives any and all
rights and defenses arising by reason of (a) any "one-action" or
"anti-deficiency" law, or any other law that may prevent Lender from bringing
any action or claim for deficiency against Grantor, (b) any election of remedies
by Lender which may limit Grantor's rights to proceed against any party indebted
under the Note, or (c) any disability or defense of any party indebted under the
Note, any other guarantor or any other person by reason of cessation of the
indebtedness due under the Note for any reason other than full payment of the
Note.
GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (a) this
Mortgage is executed at Borrower's request and not at the request of Lender; (b)
Grantor has the full power, right, and authority to enter into this Mortgage and
to hypothecate the Property; (c) the provisions of this Mortgage do not conflict
with, or result in a default under any agreement or other instrument binding
upon Grantor and do not result in a violation of any law, regulation, court
decree or order applicable to Grantor; (d) Grantor has established adequate
means of obtaining from Borrower on a continuing basis information about
Borrower's financial condition; and (e) Lender has made no representation to
Grantor about Borrower (including without limitation the creditworthiness of
Borrower).
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor
shall strictly perform all of Grantor's obligations under the Guaranty and under
this Mortgage.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor and Borrower agree that
Grantor's possession and use of the Property shall be
<PAGE>
<PAGE>
06-30-1997 MORTGAGE Page 2
Loan No. 27027106 (Continued)
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governed by the following provisions:
Possession and Use. Until in default or until Lender exercises its right to
collect Rents as provided for in the Assignment of Rents form executed by
Grantor in connection with the Property, Grantor may remain in possession
and control of and operate and manage the Property and collect the Rents
from the Property.
Duty to Maintain. Grantor shall maintain the Property in tenantable
condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.
Hazardous Substances. The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this Mortgage,
shall have the same meanings as set forth in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"). The Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"),
the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901,
et seq., or other applicable state or Federal laws, rules, or regulations
adopted pursuant to any of the foregoing. The terms "hazardous waste" and
"hazardous substance" shall also include, without limitation, petroleum
and petroleum by-products or any fraction thereof and asbestos. Grantor
represents and warrants to Lender that: (a) During the period of Grantor's
ownership of the Property, there has been no use, generation, manufacture,
storage, treatment, disposal, release or threatened release of any
hazardous waste or substance by any person on, under, about or from the
Property; (b) Grantor has no knowledge of, or reason to believe that there
has been, except as previously disclosed to and acknowledged by Lender in
writing, (i) any use, generation, manufacture, storage, treatment,
disposal, release, or threatened release of any hazardous waste or
substance on, under, about or from the Property by any prior owners or
occupants of the property or (ii) any actual or threatened litigation or
claims of any kind by any person relating to such matters; and (c) Except
as previously disclosed to and acknowledged by Lender in writing, (i)
neither Grantor nor any tenant, contractor, agent or other authorized user
of the Property shall use, generate, manufacture, store, treat, dispose of,
or release any hazardous waste or substance on, under, about or from the
Property and (ii) any such activity shall be conducted in compliance with
all applicable federal, state, and local laws, regulations and ordinances,
including without limitation those laws, regulations, and ordinances
described above. Grantor authorizes Lender and its agents to enter upon the
Property to make such inspections and tests, at Grantor's expense, as
Lender may deem appropriate to determine compliance of the Property with
this section of the Mortgage. Any inspections or tests made by Lender shall
be for Lender's purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to Grantor or to any
other person. The representations and warranties contained herein are based
on Grantor's due diligence in investigating the Property for hazardous
waste and hazardous substances. Grantor hereby (a) releases and waives any
future claims against Lender for indemnity or contribution in the event
Grantor becomes liable for, cleanup or other costs under any such laws, and
(b) agrees to indemnify and hold harmless Lender against any and all
claims, losses, liabilities, damages, penalties, and expenses which Lender
may directly or indirectly sustain or suffer resulting from a breach of
this section of the Mortgage or as a consequence of any use, generation,
manufacture, storage, disposal, release or threatened release occurring
prior to Grantor's ownership or interest in the Property, whether or not
the same was or should have been known to Grantor. The provisions of this
section of the Mortgage, including the obligation to indemnify, shall
survive the payment of the indebtedness and the satisfaction and
reconveyance of the lien of this Mortgage and shall not be affected by
Lender's acquisition of any interest in the Property, whether by
foreclosure or otherwise.
Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance
nor commit, permit, or suffer any stripping of or waste on or to the
Property or any portion of the Property. Without limiting the generality of
the foregoing, Grantor will not remove, or grant to any other party the
right to remove, any timber, minerals (including oil and gas), soil, gravel
or rock products without the prior written consent of Lender.
Removal of Improvements. Grantor shall not demolish or remove any
improvements from the Real Property without the prior written consent of
Lender. As a condition to the removal of any improvements. Lender may
require Grantor to make arrangements satisfactory to Lender to replace such
improvements with improvements of at least equal value.
Lender's Right to Enter. Lender and its agents and representatives may
enter upon the Real Property at all reasonable times to attend to Lender's
interests and to inspect the Property for purposes of Grantor's compliance
with the terms and conditions of this Mortgage.
Compliance with Governmental Requirements. Grantor shall promptly comply
with all laws, ordinances, and regulations, now or hereafter in affect, of
all governmental authorities applicable to the use or occupancy of the
Property, including without limitation, the Americans With Disabilities
Act. Grantor may contest in good faith any such law, ordinance, or
regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Grantor has notified Lender in writing
prior to doing so and so long as, in Lender's sole opinion, Lender's
interests in the Property are not jeopardized. Lender may require Grantor
to post adequate security or a surety bond, reasonably satisfactory to
Lender, to protect Lender's interest.
Duty to Protect. Grantor agrees neither to abandon nor leave unattended the
Property. Grantor shall do all other acts, in addition to those acts set
forth above in this section, which from the character and use of the
Property are reasonably necessary to protect and preserve the Property.
<PAGE>
DUE ON SALE - CONSENT BY LENDER. Lender may, at its option, declare immediately
due and payable all sums secured by this Mortgage upon the sale or transfer,
without the Lender's prior written consent, of all or any part of the Real
Property, or any interest in the Real Property. A "sale or transfer" means the
conveyance of Real Property or any right, title or interest therein; whether
legal, beneficial or equitable; whether voluntary or involuntary; whether by
outright sale, deed, installment sale contract, land contract, contract for
deed, leasehold interest with a term greater than three (3) years, lease-option
contract, or by sale, assignment, or transfer of any beneficial interest in or
to any land trust holding title to the Real Property, or by any other method of
conveyance of Real Property Interest. If any Grantor is a corporation,
partnership or limited liability company, transfer also includes any
change in ownership of more than twenty-five percent (25%) of the voting stock,
partnership interests or limited liability company interests, as the case may
be, of Grantor. However, this option shall not be exercised by Lender if such
exercise is prohibited by federal law or by Vermont law.
TAXES AND LIENS. The following provisions relating to the taxes and liens on
the Property are a part of this Mortgage.
Payment. Grantor shall pay when due (and in all events prior to delinquency)
all taxes, payroll taxes, special taxes, assessments, water charges and
sewer service charges levied against or on account of the Property, and
shall pay when due all claims for work done on or for services rendered or
material furnished to the Property. Grantor shall maintain the Property free
of all liens having priority over or equal to the interest of Lender under
this Mortgage, except for the lien of taxes and assessments not due, and
except as otherwise provided in the following paragraph.
Right To Contest. Grantor may withhold payment of any tax, assessment, or
claim in connection with a good faith dispute over the obligation to pay, so
long as Lender's Interest in the Property is not jeopardized. If a lien
arises or is filed as a result of nonpayment, Grantor shall within fifteen
(15) days after the lien arises or, if a lien is filed, within fifteen (15)
days after Grantor has notice of the filing, secure the discharge of the
lien, or if requested by Lender, deposit with Lender cash or a sufficient
corporate surety bond or other security satisfactory to Lender in an amount
sufficient to discharge the lien plus any costs and attorneys' fees or other
charges that could accrue as a result of a foreclosure or sale under the
lien. In any contest, Grantor shall defend itself and Lender and shall
satisfy any adverse judgment before enforcement against the Property.
Grantor shall name Lender as an additional obligee under any surety bond
furnished in the contest proceedings.
Evidence of Payment. Grantor shall upon demand furnish to Lender
satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at any
time a written statement of the taxes and assessments against the Property.
Notice of Construction. Grantor shall notify Lender at least fifteen (15)
days before any work is commenced, any services are furnished, or any
materials are supplied to the Property, if any mechanic's lien,
materialmen's lien, or other lien could be asserted on account of the work,
services, or materials. Grantor will upon request of Lender furnish to
Lender advance assurances satisfactory to Lender that Grantor can and will
pay the cost of such improvements.
PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the
Property are a part of this Mortgage.
Maintenance of Insurance. Grantor shall procure and maintain policies of
fire insurance with standard extended coverage endorsements on a replacement
basis for the full insurable value covering all improvements on the Real
Property in an amount sufficient to avoid application of any coinsurance
clause, and with a standard mortgagee clause in favor of Lender. Grantor
shall also procure and maintain comprehensive general liability insurance
in such coverage amounts as Lender may request with Lender being named as
additional insureds in such liability insurance policies. Additionally,
Grantor shall maintain such other insurance, including but not limited to
hazard, business interruption and boiler insurance as Lender may require.
Policies shall be written by such insurance companies and in such form as
may be reasonably acceptable to Lender. Grantor shall deliver to Lender
certificates of coverage from each Insurer containing a stipulation that
coverage will not be cancelled or diminished without a minimum of ten (10)
days' prior written notice to Lender and not containing any disclaimer of
the Insurer's liability for failure to give such notice. Each insurance
policy also shall include an endorsement providing that coverage in favor of
Lender will not be impaired in any way by any act, omission or default of
Grantor or any other person. Should the Real Property at any time become
located in an area designated by the Director of the Federal Emergency
Management Agency as a special flood hazard area, Grantor agrees to obtain
and maintain Federal Flood Insurance for the full unpaid principal balance
of the loan, up to the maximum policy limits set under the National Flood
Insurance Program, or as otherwise required by Lender, and to maintain such
insurance for the term of the loan.
Application of Proceeds. Grantor shall promptly notify Lender of any loss or
damage to the Property. Lender may make proof of loss if Grantor fails to do
so within fifteen (15) days of the casualty. Whether or not Lender's
security is impaired, Lender may, at its election, apply the proceeds to the
reduction of the Indebtedness, payment of any lien affecting the Property,
or the restoration and repair of the Property. If Lender elects to apply the
proceeds to restoration and repairs, Grantor shall repair or replace the
damaged or destroyed improvements in a manner satisfactory to
<PAGE>
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06-30-1997 MORTGAGE Page 3
Loan No 27027106 (Continued)
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Lender. Lender shall, upon satisfactory proof of such expenditure, pay or
reimburse Grantor from the proceeds for the reasonable cost of repaid or
restoration if Grantor is not in default hereunder. Any proceeds which have
not been disbursed within 180 days after their receipt and which Lender has
not committed to the repair or restoration of the Property shall be used
first to pay any amount owing to Lender under this Mortgage, then to prepay
accrued interest, and the remainder, if any, shall be applied to the
principal balance of the Indebtedness. If Lender holds any proceeds after
payment in full of the Indebtedness, such proceeds shall be paid to Grantor.
Unexpired Insurance at Sale. Any unexpired insurance shall inure to the
benefit of, and pass to, the purchaser of the Property covered by this
Mortgage at any trustee's sale or other sale held under the provisions of
this Mortgage, or at any for enclosure sale of such Property.
Grantor's Report on Insurance. Upon request of Lender, however not more than
once a year, Grantor shall furnish to Lender a report on each existing
policy of insurance showing: (a) the name of the insurer; (b) the risks
insured; (c) the amount of the policy; (d) the property insured, the then
current replacement value of such property, and the manner of determining
that value; and (e) the expiration date of the policy. Grantor shall, upon
request of Lender, have an independent appraiser satisfactory to Lender
determine the cash value replacement cost of the Property.
TAX AND INSURANCE RESERVES. Subject to any limitations set by applicable law,
Lender may require Grantor to maintain with Lender reserves for payment of
annual taxes, assessments, and insurance premiums, which reserves shall be
created by advance payment or monthly payments of a sum estimated by Lender to
be sufficient to produce amounts at least equal to the taxes, assessments, and
insurance premiums to be paid. The reserve funds shall be held by Lender as a
general deposit from Grantor, which Lender may satisfy by payment of the taxes,
assessments, and insurance premiums required to be paid by Grantor as they
become due. Lender shall have the right to draw upon the reserve funds to pay
such items, and Lender shall not be required to determine the validity or
accuracy of any item before paying it. Nothing in the Mortgage shall be
construed as requiring Lender to advance other monies for such purposes, and
Lender shall not incur any liability for anything it may do or omit to do with
respect to the reserve account. All amounts in the reserve account are hereby
pledged to further secure the Indebtedness, and Lender is hereby authorized to
withdraw and apply such amounts on the Indebtedness upon the occurrence of an
Event of Default. Lender shall not be required to pay any interest or earnings
on the reserve funds unless required by law or agreed to by Lender in writing.
Lender does not hold the reserve funds in trust for Grantor, and Lender is not
Grantor's agent for payment of the taxes and assessments required to be paid by
Grantor.
EXPENDITURES BY LENDER. If Grantor fails to comply with any provision of this
Mortgage, or if any action or proceeding is commenced that would materially
affect Lender's Interests in the Property, Lender on Grantor's behalf may, but
shall not be required to, take any action that Lender deems appropriate. Any
amount that Lender expends in so doing will bear interest at the rate provided
for in the Note from the date incurred or paid by Lender to the date of
repayment by Grantor. All such expenses, at Lender's option, will (a) be payable
on demand, (b) be added to the balance of the Note and be apportioned among and
be payable with any installment payments to become due during either (i) the
term of any applicable insurance policy or (ii) the remaining term of the Note,
or (c) be treated as a balloon payment which will be due and payable at the
Note's maturity. This Mortgage also will secure payment of these amounts. The
rights provided for in this paragraph shall be in addition to any other rights
or any remedies to which Lender may be entitled on account of the default. Any
such action by Lender shall not be construed as curing the default so as to bar
Lender from any remedy that it otherwise would have had.
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of
the Property are a part of this Mortgage.
Title. Grantor warrants that: (a) Grantor holds good and marketable title of
record to the Property in fee simple, free and clear of all liens and
encumbrances other than those set forth in the Real Property description or
in any title insurance policy, title report, or final title opinion issued
in favor of, and accepted by, Lender in connection with this Mortgage, and
(b) Grantor has the full right, power, and authority to execute and deliver
this Mortgage to Lender.
Defense of Title. Subject to the exception in the paragraph above, Grantor
warrants and will forever defend the title to the Property against the
lawful claims of all persons. In the event any action or proceeding is
commenced that questions Grantor's title or the interest of Lender under
this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor
may be the nominal party in such proceeding, but Lender shall be entitled to
participate in the proceeding and to be represented in the proceeding by
counsel of Lender's own choice, and Grantor will deliver, or cause to be
delivered, to Lender such instruments as Lender may request from time to
time to permit such participation.
Compliance With Laws. Grantor warrants that the Property and Grantor's use
of the Property complies with all existing applicable laws, ordinances, and
regulations of governmental authorities.
CONDEMNATION. The following provisions relating to condemnation of the Property
are a part of this Mortgage.
Application of Net Proceeds. If all or any part of the Property is condemned
by eminent domain proceedings or by any proceeding or purchase in lieu of
condemnation, Lender may at its election require that all or any portion of
the net proceeds of the award be applied to the Indebtedness or the repair
or restoration of the Property. The net proceeds of the award shall mean the
award after payment of all reasonable costs, expenses, and attorneys' fees
incurred by Lender in connection with the condemnation.
Proceedings. If any proceeding in condemnation is filed, Grantor shall
promptly notify Lender in writing, and Grantor shall promptly take such
steps as may be necessary to defend the action and obtain the award. Grantor
may be the nominal party in such proceeding, but Lender shall be entitled to
participate in the proceeding and to be represented in the proceeding by
counsel of its own choice, and Grantor will deliver or cause to be delivered
to Lender such instruments as may be requested by it from time to time to
permit such participation.
<PAGE>
IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following
provisions relating to governmental taxes, fees and charges are a part of this
Mortgage:
Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall
execute such documents in addition to this Mortgage and take whatever other
action is requested by Lender to perfect and continue Lender's lien on the
Real Property. Grantor shall reimburse Lender for all taxes, as described
below, together with all expenses incurred in recording, perfecting or
continuing this Mortgage, including without limitation all taxes, fees,
documentary stamps, and other charges for recording or registering this
Mortgage.
Taxes. The following shall constitute taxes to which this section applies:
(a) a specific tax upon this type of Mortgage or upon all or any part of the
indebtedness secured by this Mortgage; (b) a specific tax on Borrower which
Borrower is authorized or required to deduct from payments on the
indebtedness secured by this type of Mortgage; (c) a tax on this type of
Mortgage chargeable against the Lender or the holder of the Note; and (d) a
specific tax on all or any portion of the Indebtedness or on payments of
principal and interest made by Borrower.
Subsequent Taxes. If any tax to which this section applies is enacted
subsequent to the date of this Mortgage, this event shall have the same
effect as an Event of Default (as defined below), and Lender may exercise
any or all of its available remedies for an Event of Default as provided
below unless Grantor either (a) pays the tax before it becomes delinquent,
or (b) contests the tax as provided above in the Taxes and Liens section and
deposits with Lender cash or a sufficient corporate surety bond or other
security satisfactory to Lender.
SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to
this Mortgage as a security agreement are a part of this Mortgage.
Security Agreement. This instrument shall constitute a security agreement to
the extent any of the Property constitutes fixtures or other personal
property, and Lender shall have all of the rights of a secured party under
the Uniform Commercial Code as amended from time to time.
Security Interest. Upon request by Lender, Grantor shall execute financing
statements and take whatever other action is requested by Lender to perfect
and continue Lender's security interest in the Rents and Personal Property.
In addition to recording this Mortgage in the real property records, Lender
may, at any time and without further authorization from Grantor, file
executed counterparts, copies or reproductions of this Mortgage as a
financing statement. Grantor shall reimburse Lender for all expenses
incurred in perfecting or continuing this security interest. Upon default,
Grantor shall assemble the Personal Property in a manner and at a place
reasonably convenient to Grantor and Lender and make it available to Lender
within three (3) days after receipt of written demand from Lender.
Addresses. The mailing addresses of Grantor (debtor) and Lender (secured
party), from which information concerning the security interest granted by
this Mortgage may be obtained (each as required by the Uniform Commercial
Code), are as stated on the first page of this Mortgage.
FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to
further assurances and attorney-in-fact are a part of this Mortgage.
Further Assurances. At any time, and from time to time, upon request of
Lender, Grantor will make, execute and deliver, or will cause to be made,
executed or delivered, to Lender or to Lender's designee, and when requested
by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case
may be, at such times and in such offices and places as Lender may deem
appropriate, any and all such mortgages, deeds of trust, security deeds,
security agreements, financing statements, continuation statements,
instruments of further assurance, certificates, and other documents as may,
in the sole opinion of Lender, be necessary or desirable in order to
effectuate, complete, perfect, continue, or preserve (a) the obligations of
Grantor and Borrower under the Note, this Mortgage, and the Related
Documents, and (b) the liens and security interests created by this Mortgage
as first and prior liens on the Property, whether now owned or hereafter
acquired by Grantor. Unless prohibited by law or agreed to the contrary by
Lender in writing, Grantor shall reimburse Lender for all costs and expenses
incurred in connection with the matters referred to in this paragraph.
Attorney-In-Fact. If Grantor fails to do any of the things referred to in
the preceding paragraph, Lender may do so for and in the name of Grantor and
at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints
Lender as Grantor's attorney-in-fact for the purpose of making, executing,
delivering, filing, recording, and doing all other things as may be
necessary or desirable, in Lender's sole opinion, to
<PAGE>
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06-30-1997 MORTGAGE
Loan No. 27027106 (Continued) Page 4
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accomplish the matters referred to in the preceding paragraph.
FULL PERFORMANCE. If Grantor shall strictly perform all of Grantor's obligations
under the Guaranty and otherwise performs all the obligations imposed upon
Grantor under this Mortgage, Lender shall execute and deliver to Grantor a
suitable satisfaction of this Mortgage and suitable statements of termination of
any financing statement on file evidencing Lender's security interest in the
Rents and the Personal Property. Grantor will pay, if permitted by applicable
law, any reasonable termination fee as determined by Lender from time to time.
DEFAULT. Each of the following, at the option of Lender, shall constitute an
event of default ("Event of Default") under this Mortgage:
Default on Indebtedness. Failure of Borrower to make any payment when due on
the indebtedness.
Default Under the Guaranty. Failure by Grantor to comply with any term,
obligation, covenant or condition contained in the Guaranty.
Default on Other Payments. Failure of Grantor within the time required by
this Mortgage to make any payment for taxes or insurance, or any other
payment necessary to prevent filing of or to effect discharge of any lien.
Compliance Default. Failure of Grantor or Borrower to comply with any other
term, obligation, covenant or condition contained in this Mortgage, the Note
or in any of the Related Documents.
Default in Favor of Third Parties. Should Borrower or any Grantor default
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Borrower's or any Grantor's property or
Borrower's ability to repay the Note or Borrower's or Grantor's ability to
perform their respective obligations under this Mortgage or any of the
Related Documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Grantor or Borrower under this
Mortgage, the Note or the Related Documents is false or misleading in any
material respect, either now or at the time made or furnished.
Defective Collateralization. This Mortgage or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
documents to create a valid and perfected security interest or lien) at any
time and for any reason.
Death or Insolvency. The dissolution or termination of Grantor or Borrower's
existence as a going business or the death of any partner, the insolvency of
Grantor or Borrower, the appointment of a receiver for any part of Grantor
or Borrower's property, any assignment for the benefit of creditors, any
type of creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Grantor or Borrower.
Foreclosure, Forfeiture, etc. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Grantor or by any governmental agency
against any of the Property. However, this subsection shall not apply in the
event of a good faith dispute by Grantor as to the validity or
reasonableness of the claim which is the basis of the foreclosure or
forfeiture proceeding, provided that Grantor gives Lender written notice of
such claim and furnishes reserves or a surety bond for the claim
satisfactory to Lender.
Breach of Other Agreement. Any breach by Grantor or Borrower under the terms
of any other agreement between Grantor or Borrower and Lender that is not
remedied within any grace period provided therein, including without
limitation any agreement concerning any indebtedness or other obligation of
Grantor or Borrower to Lender, whether existing now or later.
Events Affecting Guarantor. Any of the preceding events occurs with respect
to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes
incompetent, or revokes or disputes the validity of, or liability under, any
Guaranty of the Indebtedness, Lender, at its option, may, but shall not be
required to, permit the Guarantor's estate to assume unconditionally the
obligations arising under the guaranty in a manner satisfactory to Lender,
and, in doing so, cure the Event of Default.
Events Affecting Co-Borrowers. Any of the preceding events occurs with
respect to any co-borrower of any of the Indebtedness or any co-borrower
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any of the indebtedness. Lender, at its option, may, but
shall not be required to, permit the co-borrower's estate to assume
unconditionally the obligations on the indebtedness in a manner satisfactory
to Lender, and, in doing so, cure the Event of Default.
Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
Insecurity. Lender in good faith deems itself insecure.
Right to Cure. If such a failure is curable and if Grantor or Borrower has
not been given a notice of a breach of the same provision of this Mortgage
within the preceding twelve (12) months, it may be cured (and no Event of
Default will have occurred) if Grantor or Borrower, after Lender sends
written notice demanding cure of such failure: (a) cures the failure within
ten (10) days; or (b) if the cure requires more than ten (10) days,
immediately initiates steps sufficient to cure the failure and thereafter
continues and completes all reasonable and necessary steps sufficient to
produce compliance as soon as reasonably practical.
<PAGE>
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and
at any time thereafter, Lender, at its opinion, may exercise any one or more of
the following rights and remedies, in addition to any other rights or remedies
provided by law:
Accelerate Indebtedness. Lender shall have the right at its option without
notice to Borrower to declare the entire Indebtedness immediately due and
payable, including any prepayment penalty which Borrower would be required
to pay.
UCC Remedies. With respect to all or any part of the Personal Property,
Lender shall have all the rights and remedies of a secured party under the
Uniform Commercial Code.
Collect Rents. Lender shall have the right, without notice to Grantor or
Borrower, to take possession of the Property and collect the Rents,
including amounts past due and unpaid, and apply the net proceeds, over and
above Lender's costs, against the Indebtedness. In furtherance of this
right, Lender may require any tenant or other user of the Property to make
payments of rent or use fees directly to Lender. If the Rents are collected
by Lender, then Grantor irrevocably designates Lender as Grantor's
attorney-in-fact to endorse instruments received in payment thereof in the
name of Grantor and to negotiate the same and collect the proceeds.
Payments by tenants or other users to Lender in response to Lender's demand
shall satisfy the obligations for which the payments are made, whether or
not any proper grounds for the demand existed. Lender may exercise its
rights under this subparagraph either in person, by agent, or through a
receiver.
Appoint Receiver. Lender shall have the right to have a receiver appointed
to take possession of all or any part of the Property, with the power to
protect and preserve the Property, to operate the Property preceding
foreclosure or sale, and to collect the Rents from the Property and apply
the proceeds, over and above the cost of the receivership, against the
Indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not
the apparent value of the Property exceeds the Indebtedness by a
substantial amount. Employment by Lender shall not disqualify a person from
serving as a receiver.
Judicial Foreclosure. Lender may obtain a judicial decree foreclosing
Grantor's interest in all or any part of the Property.
Nonjudicial Sale. If permitted by applicable law, Lender may foreclose
Grantor's interest in all or in any part of the Personal Property or the
Real Property by nonjudicial sale.
Deficiency Judgment. If permitted by applicable law, Lender may obtain a
judgment for any deficiency remaining in the indebtedness due to Lender
after application of all amounts received from the exercise of the rights
provided in this section.
Tenancy at Sufferance. If Grantor remains in possession of the Property
after the Property is sold as provided above or Lender otherwise becomes
entitled to possession of the Property upon default of Grantor, Grantor
shall become a tenant at sufferance of Lender or the purchaser of the
Property and shall, at Lender's option, either (a) pay a reasonable rental
for the use of the Property, or (b) vacate the Property immediately upon
the demand of Lender.
Other Remedies. Lender shall have all other rights and remedies provided in
this Mortgage or the Note or available at law or in equity.
Sale of the Property. To the extent permitted by applicable law, Grantor or
Borrower hereby waive any and all right to have the property marshalled. In
exercising its rights and remedies, Lender shall be free to sell all or any
part of the Property together or separately, in one sale or by separate
sales. Lender shall be entitled to bid at any public sale on all or any
portion of the Property.
Notice of Sale. Lender shall give Grantor reasonable notice of the time and
place of any public sale of the Personal Property or of the time after
which any private sale or other intended disposition of the Personal
Property is to be made. Reasonable notice shall mean notice given at least
ten (10) days before the time of the sale or disposition.
Power of Sale. Where Lender invokes the power of sale, Lender's rights and
duties shall be determined according to existing Vermont law governing said
power of sale. If it shall be necessary to initiate any legal action to
determine the person or persons legally entitled to any excess proceeds of
the sale then the Lender's cost of said action shall be deducted from the
said excess and reimbursed to Lender before its ultimate disbursal.
<PAGE>
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06-30-1997 MORTGAGE Page 5
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Waiver; Election of Remedies. A waiver by any party of a breach of a
provision of this Mortgage shall not constitute a waiver of or prejudice
the party's rights otherwise to demand strict compliance with that
provision or any other provision. Election by Lender to pursue any remedy
shall not exclude pursuit of any other remedy, and an election to make
expenditures or take action to perform an obligation of Grantor or Borrower
under this Mortgage after failure of Grantor or Borrower to perform shall
not affect Lender's right to declare a default and exercise its remedies
under this Mortgage.
Attorneys' Fees; Expenses. If Lender institutes any suit or action to
enforce any of the terms of this Mortgage, Lender shall be entitled to
recover such sum as the court may adjudge reasonable as attorneys' fees at
trial and on any appeal. Whether or not any court action is involved, all
reasonable expenses incurred by Lender that in Lender's opinion are
necessary at any time for the protection of its interest or the enforcement
of its rights shall become a part of the Indebtedness payable on demand and
shall bear interest from the date of expenditure until repaid at the rate
provided for in the Note. Expenses covered by this paragraph include,
without limitation, however subject to any limits under applicable law,
Lender's attorneys' fees and Lender's legal expenses whether or not there
is a lawsuit, including attorneys' fees for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals and any anticipated post-judgment collection services, the cost of
searching records, obtaining title reports (including foreclosure reports),
surveyors' reports, and appraisal fees, and title insurance, to the extent
permitted by applicable law. Borrower also will pay any court costs, in
addition to all other sums provided by law.
NOTICES TO GRANTOR AND OTHER PARTIES. Any notice under this Mortgage, including
without limitation any notice of default and any notice of sale to Grantor,
shall be in writing, may be sent by telefacsimile, and shall be effective when
actually delivered, or when deposited with a nationally recognized overnight
courier, or, if mailed, shall be deemed effective when deposited in the United
States mail first class, certified or registered mail, postage prepaid, directed
to the addresses shown near the beginning of this Mortgage. Any party may change
its address for notices under this Mortgage by giving formal written notice to
the other parties, specifying that the purpose of the notice is to change the
party's address. All copies of notices of foreclosure from the holder of any
lien which has priority over this Mortgage shall be sent to Lender's address, as
shown near the beginning of this Mortgage. For notice purposes, Grantor agrees
to keep Lender informed at all times of Grantor's current address.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Mortgage:
Amendments. This Mortgage, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Mortgage. No alteration of or amendment to this Mortgage
shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.
Annual Reports. If the Property is used for purposes other than Grantor's
residence, Grantor shall furnish to Lender, upon request, a certified
statement of net operating income received from the Property during
Grantor's previous fiscal year in such form and detail as Lender shall
require. 'Net operating income' shall mean all cash receipts from the
Property less all cash expenditures made in connection with the operation
of the Property.
Applicable Law. This Mortgage has been delivered to Lender and accepted by
Lender in the State of Vermont. This Mortgage shall be governed by and
construed in accordance with the laws of the State of Vermont.
Caption Headings. Caption headings in this Mortgage are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Mortgage.
Merger. There shall be no merger of the interest or estate created by this
Mortgage with any other interest or estate in the Property at any time held
by or for the benefit of Lender in any capacity, without the written
consent of Lender.
Multiple Parties. All obligations of Grantor and Borrower under this
Mortgage shall be joint and several, and all references to Grantor shall
mean each and every Grantor, and all references to Borrower shall mean each
and every Borrower. This means that each of the persons signing below is
responsible for all obligations in this Mortgage.
Severability. If a court of competent jurisdiction finds any provision of
this Mortgage to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Mortgage in all other respects shall remain valid and enforceable.
Successors and Assigns. Subject to the limitations stated in this Mortgage
on transfer of Grantor's Interest, this Mortgage shall be binding upon and
inure to the benefit of the parties, their successors and assigns. If
ownership of the Property becomes vested in a person other than Grantor,
Lender, without notice to Grantor, may deal with Grantor's successors with
reference to this Mortgage and the Indebtedness by way of forbearance or
extension without releasing Grantor from the obligations of this Mortgage
or liability under the Indebtedness.
Time is of the Essence. Time is of the essence in the performance of this
Mortgage.
Waiver of Homestead Exemption. Grantor hereby releases and waives all
rights and benefits of the homestead exemption laws of the State of Vermont
as to all Indebtedness secured by this Mortgage.
Waivers and Consents. Lender shall not be deemed to have waived any rights
under this Mortgage (or under the Related Documents) unless such waiver is
in writing and signed by Lender. No delay or omission on the part of Lender
in exercising any right shall operate as a waiver of such right or any
other right. A waiver by any party of a provision of this Mortgage shall
not constitute a waiver of or prejudice the party's right otherwise to
demand strict compliance with that provision or any other provision. No
prior waiver by Lender, nor any course of dealing between Lender and
Grantor or Borrower, shall constitute a waiver of any of Lender's rights or
any of Grantor or Borrower's obligations as to any future transactions.
Whenever consent by Lender is required in this Mortgage, the granting of
such consent by Lender in any instance shall not constitute continuing
consent to subsequent instances where such consent is required.
EACH GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND
EACH GRANTOR AGREES TO ITS TERMS.
GRANTOR:
/s/ STEVEN H. PLAUSTEINER /s/ SUSAN D. PLAUSTEINER
X------------------------------- X------------------------------
STEVEN H. PLAUSTEINER SUSAN D. PLAUSTEINER
Signed, acknowledged and delivered in the presence of:
[signature]
X-------------------------------
Witness
John A. Hughes, Jr.
X-------------------------------
Witness
<PAGE>
<PAGE>
06-30-1997 MORTGAGE Page 6
Loan No 27027106 (Continued)
- --------------------------------------------------------------------------------
INDIVIDUAL ACKNOWLEDGMENT
STATE OF VERMONT )
)ss
COUNTY OF WINDSOR )
BE IT REMEMBERED that on the 30th day of June, 1997, personally appeared STEVEN
H. PLAUSTEINER and SUSAN D. PLAUSTEINER, signers and sealers of the foregoing
written instrument and acknowledged the same to be their free act and deed.
Before me: [signature illegible]
-------------------------------
Notary Public
- --------------------------------------------------------------------------------
[copy illegible]
<PAGE>
<PAGE>
EXHIBIT A
(Property Description)
It being all and the same lands and premises conveyed to Steven Plausteiner
and Susan D. Plausteiner from Ascutney Mountain Resort, L.P. by Warranty Deed
dated June 30, 1997, to be recorded immediately prior hereto in the West Windsor
Land Records, and described therein in particular as follows:
It being a parcel of land containing 16.93 acres, more or less, located on
the easterly side of Town Highway No. 40, also referred to as Coaching Lane
Road, and depicted on a survey dated April 29, 1994 prepared by Robert W.
Farnsworth, Registered Land Surveyor, of Brownsville, Vermont entitled "Land
Surveyed for Steven & Susan Plausteiner--Coaching Lane--West Windsor--Vermont",
Drawing No. 94-1118, a mylar thereof filed in Map Rack #302. of the West Windsor
Land Records. The lands and premises herein conveyed are described from the
above-referenced survey as follows:
Beginning at a point located on the easterly edge of the right-of-way of
Town Highway No. 40; thence North 44[d]01'41" East 293.00 feet to a point
on the easterly side of a stone wall; thence South 68[d]42'26" East 933.28
feet along the easterly side of said stone wall and running parallel thereto to
an iron pipe; thence South 29[d]38'10" West 937.80 feet crossing said stone
wall to a point in the course of another stone wall; thence North
58[d]41'05" West 728.90 feet following the course of said stone wall and
crossing a right-of-way extending to land owned by the Town of West Windsor to a
point of intersection with another stone wall; thence North 23[d]55'40"
East 102.95 feet to a point at the end of said stone wall; thence North
24[d]22'01" East 126.46 feet to a point; thence 04[d]25'39" West 60.90
feet to a point at the end of Town Highway No. 40; thence North 66[d]04'04"
East 50.00 feet along the terminus of Town Highway No. 40 to a point; thence
North 23[d]55'56" West 300.00 feet along the easterly edge of the
right-of-way of Town Highway No. 40 to a point, which is the point and place of
beginning.
Meaning hereby to convey a portion of lands and premises conveyed by John
R. Canney, III, Esq., Trustee of the Bankruptcy Estates of Summit Ventures,
Inc., Mt. Ascutney Associates, and the other debtors named in the jointly
administered bankruptcy proceedings in the United States Bankruptcy Court for
the District of Vermont entitled "In re: Summit Ventures, Inc. et al," Case Nos.
90-00213-90-00221, inclusive, to Ascutney Mountain Resort, L.P. by Trustee's
Deed dated September 1, 1993, recorded in Book 49 at Pages 85-91 of the West
Windsor Land Records.
Reference may be made to the above mentioned deed and survey and to the
records of deeds and surveys therein referred to for further particulars of
description.
<PAGE>
<PAGE>
The lands and premises herein conveyed are subject to reservations,
conditions, easements, covenants, agreements, limitations of title and all other
provisions contained in the Amended Declaration of Protective Covenants,
Restrictions, and Reservations of Mt. Ascutney Corporation dated May 12, 1984,
recorded on August 10, 1984 in Book 28 at Pages 455-482 of the West Windsor Land
Records, and assigned to Ascutney Mountain Resort, L.P. by Quit Claim Assignment
dated September 1, 1993, recorded in Book 49 at Pages 134-146 of the West
Windsor Land Records, and are further subject to spring rights, rights-of-way,
Board of Health Subdivision Permits and Land Use Permits of record, and
specifically the terms and conditions of Land Use Permit Case No. 2SO397-13,
recorded in Book 50 at Pages 487-488 of the West Windsor Land Records.
<PAGE>
<PAGE>
COLLATERAL ASSIGNMENT OF LEASES, RENTS,
PERMITS, WORKPRODUCT AND AGREEMENTS
THIS ASSIGNMENT is by and between ASCUTNEY MOUNTAIN RESORT, L.P. and
ASCUTNEY MOUNTAIN RESORT HOTEL, L.P., with its principal place of business at
Ascutney Mountain Resort, Brownsville, Vermont ("Assignor") and MASCOMA SAVINGS
BANK, fsb, a banking corporation with a place of business at 10 Gates Street,
PO Box 426, White River Junction, Vermont, ("Assignee").
Background
1. Assignor owns a parcels of land on Route 44, Brownsville, Vermont,
and which are more particularly described on Schedule A and Schedule B to this
Assignment, with buildings and other improvements thereon (the "Premises").
2. Assignee has made a Line of Credit to Assignor for up to One Million
Five Hundred Thousand and No/100 ($1,500,000.00) Dollars (the "Loan") evidenced
by a Note executed by Assignor (the "Note") and payable to Assignee and secured
in part by a mortgage deed dated of even dated granted by Assignor to Assignee
creating a mortgage on the Premises (the "Mortgage"). The Note, Mortgage and
Loan and Security Agreement dated of even dated herewith between Assignor and
Assignee and related documents are hereinafter referred to as the "Loan
Documents".
3. The proceeds of the Loan are to provide funding for takeout of
current lender of the Brownsville, Vermont real estate as well as working
capital for the Assignor.
4. Assignee will take and hold a security interest in the leases and
rents associated with the subject property as well as an assignment of all
architectural and engineering plans and specifications, the construction
contract and all governmental approvals as security for Assignor's performance
of its obligations under the Loans and the Loan Documents.
NOW THEREFORE, subject to the terms and conditions hereinafter set
forth, Assignor hereby assigns to Assignee, as additional security for the
performance of its obligations under the Loan Documents, all right, title and
interest of the Assignor in and to:
(a) all permits and approvals issued by governmental authorities having
jurisdiction over the Premises necessary for the capital improvements to the
Premises (the "Permits"); and
<PAGE>
<PAGE>
(b) all drawings, plans, surveys, or other workproduct prepared for
Assignor by the contractors' engineers and architects retained by Assignor in
connection with the capital improvements to be made to the Premises (the
"Workproduct"); and
(c) all contracts and agreement between the Assignor and the
contractors, engineers and architects retained by Assignor in connection the
capital improvements to be made to the Premises, including but not limited to
the contract with the general contractor (the "Agreements").
(d) all leases and rents associated with the subject property.
Section 1. Assiqnor's Retained Rights. This assignment is effective only
to the extent Assignor has the right to make this Assignment without violating
applicable law, voiding the Permits or causing a default under the terms and
conditions of the Agreements by reason of this Assignment. Assignor shall retain
the rights to and shall be entitled to have, hold, use and exercise all rights,
privileges and benefits under or pursuant to the terms of the Permits,
Workproduct and Agreements until the occurrence of a default by Assignor in its
obligations under the Loan Documents, which continues uncured beyond any
applicable notice, grace and cure period, if any.
Section 2. Remedy for Default. Upon the occurrence of a default by
Assignor in its obligations under the Loan Documents or this Assignment, which
continues beyond any applicable notice, grace and cure period, Assignee, at its
sole option, shall be entitled to assume and exercise the rights and benefits of
the Assignor under the Permits and Agreement, and use the Workproduct, provided
Assignee proceeds to obtain title to the Premises. The Permit shall be deemed to
run with the title to the Premises and shall be held by and sued for the benefit
of the occupants of the Premises. This Assignment shall not have the effect of
nor allow severing the Permits or the benefits of the Permits from the Premises.
Section 3. No Releases. Noting contained herein shall in any way release
Assignor from any of its obligations or duties under the Permits or the
Agreements, except to the extent provided by applicable law, if Assignee
exercises and/or assumes the rights, duties and obligations of Assignor under
the Permits and Agreements.
Section 4. Assignor's Covenants. Assignor will (1) comply with the terms
and conditions of the Permits and Agreements, (2) promptly give notice to
Assignee of any revocation or threatened revocation of any of the Permits, (3)
promptly give notice to Assignee of the commencement of any action or proceeding
relating to any Permit or Agreement, and
<PAGE>
<PAGE>
(4) comply with all laws, rules, ordinances, regulations and lawful
requirements of all governmental authorities relating to the construction of the
aforesaid capital improvements and occupancy of the Premises. Assignor further
covenants that, to the best of its knowledge, there are no present violations of
any of the Permits. Assignor will use its best reasonable efforts to cure any
violation that may occur in the future promptly after notice of the occurrence
of such violation. Breach of any of these covenants shall constitute a default
under this Assignment.
Section 5. Termination. This Assignment shall terminate upon payment of
all sums due and payable under the Loan Documents. Assignee shall execute and
deliver to Assignor a release of this Assignment upon its termination.
Section 6. Further Assurances. Upon written request of Assignee,
Assignor shall execute and deliver to Assignee such further instruments as
Assignee may reasonably deem necessary to effect this Assignment and the
covenants of Assignor contained herein. Assignor shall cause such further
instruments to be recorded in such manner and in such places as may be required
by applicable law.
Section 7. Choice of Law, Binding Effect. This Assignment shall be
governed by, construed, and enforced in accordance with the laws of the State of
Vermont. This Assignment shall be binding on the Assignor and its successors and
assigns and insure to the benefit of the Assignee and its successors and
assigns. No amendment or alteration of the terms and conditions of this
instrument shall be effective unless contained in a written instrument executed
by Assignor and Assignee.
IN WITNESS WHEREOF, Assignor and Assignee, by and through their
respective authorized agents, have caused this Assignment to be duly executed
and delivered under seal as of the 30th day of June, 1997.
In The Presence Of: ASCUTNEY MOUNTAIN RESORT, L.P.
By its general partner,
Snowdance Ski Company
(Signature illegible) /s/ SUSAN D. PLAUSTEINER
- -------------------- By: ------------------------------
Witness Susan D. Plausteiner,
President
ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.
By its general partner,
Snowdance Ski Company
(Signature illegible)
- -------------------- /s/ SUSAN D. PLAUSTEINER
Witness to By: ---------------------------
Susan D. Plausteiner
President
<PAGE>
<PAGE>
WARRANTY DEED
KNOW ALL PERSONS BY THESE PRESENTS that ASCUTNEY MOUNTAIN RESORT, L.P., a
Delaware Limited Partnership having a place of business in West Windsor in the
County of Windsor and State of Vermont, Grantor, in the consideration of One
($1.00) Dollar and other good and valuable considerations paid to its full
satisfaction by STEVEN PLAUSTEINER and SUSAN D. PLAUSTEINER of West Windsor in
the County of Windsor and State of Vermont, Grantees, by these presents do
freely GIVE, GRANT, SELL, CONVEY, AND CONFIRM unto the said Grantees, STEVEN
PLAUSTEINER and SUSAN D. PLAUSTEINER, husband and wife, as tenants by the
entirety with right of survivorship, and their heirs and assigns forever, a
certain piece of land in West Windsor in the County of Windsor and State of
Vermont, described as follows, viz:
It being a parcel of land containing 16.93 acres, more or less, located on
the easterly side of Town Highway No. 40, also referred to as Coaching Lane
Road, and depicted on a survey dated April 29, 1994 prepared by Robert W.
Farnsworth, Registered Land Surveyor, of Brownsville, Vermont entitled "Land
Surveyed for Steven & Susan Plausteiner - Coaching Lane - West Windsor -
Vermont", Drawing No. 94-1118, a mylar thereof filed in Map Rack #302 of the
West Windsor Land Records. The lands and premises herein conveyed are described
from the above-referenced survey as follows:
Beginning at a point located on the easterly edge of the right-of-way of
Town Highway No. 40; thence North 44[d]01'41" East 293.00 feet to a point on the
easterly side of a stone wall; thence South 68[d]42'26" East 933.28 feet along
the easterly side of said stone wall and running parallel thereto to an iron
pipe; thence South 29[d]38'10" West 937.80 feet crossing said stone wall to a
point in the course of another stone wall; thence North 58[d]41'05" West 728.90
feet following the course of said stone wall and crossing a right-of-way
extending to land owned by the Town of West Windsor to a point of intersection
with another stone wall; thence North 23[d]55'40" East 102.95 feet to a point at
the end of said stone wall; thence North 24[d]22'01" East 126.46 feet to a
point; thence 04[d]25'39" West 60.90 feet to a point at the end of Town Highway
No. 40; thence North 66[d]04'04" East 50.00 feet along the terminus of Town
Highway No. 40 to a point; thence North 23[d]55'56" West 300.00 feet along the
easterly edge of the right-of-way of Town Highway No. 40 to a point, which is
the point and place of beginning.
<PAGE>
<PAGE>
Meaning hereby to convey a portion of lands and premises conveyed by John
R. Canney, III, Esq., Trustee of the Bankruptcy Estates of Summit Ventures,
Inc., Mt. Ascutney Associates, and the other debtors named in the jointly
administered bankruptcy proceedings in the United States Bankruptcy Court for
the District of Vermont entitled "In re: Summit Ventures, Inc. et al, "Case Nos.
90-00213-90-00221, inclusive, to Ascutney Mountain Resort, L.P. by Trustee's
Deed dated September 1, 1993, recorded in Book 49 at Pages 85-91 of the West
Windsor Land Records.
Reference may be made to the above mentioned deed and survey and to the
records of deeds and surveys therein referred to for further particulars of
description.
The lands and premises herein conveyed are subject to reservations,
conditions, easements, covenants, agreements, limitations of title and all other
provisions contained in the Amended Declaration of Protective Covenants,
Restrictions, and Reservations of Mt. Ascutney Corporation dated May 12, 1984,
recorded on August 10, 1984 in Book 28 at Pages 455-482 of the West Windsor Land
Records, and assigned to Ascutney Mountain Resort, L.P. by Quit Claim Assignment
dated September 1, 1993 recorded in Book 49 at Pages 134-146 of the West Windsor
Land Records, and are further subject to spring rights, rights-of-way, Board of
Health Subdivision Permits and Land Use Permits of record, and specifically the
terms and conditions of Land Use Permit Case No. 2SO397-13, recorded in Book 50
at Pages 487-488 of the west Windsor Land Records.
TO HAVE AND TO HOLD said granted premises, with all the privileges and
appurtenances thereof, to the said Grantees, STEVEN PLAUSTEINER and SUSAN D.
PLAUSTEINER, husband and wife, as tenants by the entirety with right of
survivorship, and their heirs and assigns, to their own use and behoof forever;
and ASCUTNEY MOUNTAIN RESORT, L.P., the said Grantor, does for itself and its
successors and assigns, does COVENANT with the said Grantees, STEVEN PLAUSTEINER
and SUSAN D. PLAUSTEINER, and their heirs and assigns, that until the unsealing
of these presents ASCUTNEY MOUNTAIN RESORT, L.P. is the sole owner of the
premises, and has good right and title to convey the same manner aforesaid, and
that they are FREE FROM EVERY ENCUMBRANCE, except as herein stated, and ASCUTNEY
MOUNTAIN RESORT, L.P. does hereby engage to WARRANT AND DEFEND the same against
all lawful claims whatever, except as herein stated.
-2-
<PAGE>
<PAGE>
IN WITNESS WHEREOF, this Warranty Deed is executed the 30th day of June,
1997.
IN PRESENCE OF: ASCUTNEY MOUNTAIN RESORT, L.P.
/s/ CURTIS BOWDIN By: /s/ SUSAN D. PLAUSTEINER
- -------------------------------- -------------------------------
Witness Susan D. Plausteiner, President
and Duly Authorized Agent of
Snowdance ski Company, its
General Partner
STATE OF VERMONT )
) ss.
COUNTY OF WINDSOR )
At Hartford this 30th day of June, 1997, ASCUTNEY MOUNTAIN RESORT, L.P. by
Susan D. Plausteiner, President and Duly Authorized Agent of SNOWDANCE SRI
COMPANY, its General Partner, personally appeared, and she acknowledged this
instrument by her sealed and subscribed to be her free act and deed and the free
act and deed of ASCUTNEY MOUNTAIN RESORT, L.P.
Before me, /s/ CURTIS BOWDIN
---------------------------
Notary Public
My commission expires: 2/10/99
-3-
<PAGE>
<PAGE>
RECORDATION REQUESTED BY:
MASCOMA SAVINGS BANK, fsb
10 GATES STREET
PO BOX 426
WHITE RIVER JCT., VT 05001
WHEN RECORDED MAIL TO:
MASCOMA SAVINGS BANK, fsb
10 GATES STREET
PO BOX 426
WHITE RIVER JCT., VT 05001
SEND TAX NOTICES TO:
MASCOMA SAVINGS BANK, fsb
10 GATES STREET
PO BOX 426
WHITE RIVER JCT., VT 05001 SPACE ABOVE THIS LINE IS FOR
RECORDER'S USE ONLY
- --------------------------------------------------------------------------------
ASSIGNMENT OF RENTS
THIS ASSIGNMENT OF RENTS IS DATED JUNE 30, 1997, between ASCUTNEY MOUNTAIN
RESORT, L.P. and ASCUTNEY MOUNTAIN RESORT HOTEL, L.P., whose address is ROUTE
44, P.0. BOX 699, BROWNSVILLE, VT 05037 (collectively referred to below as
"Grantor"); and MASCOMA SAVINGS BANK, fsb, whose address is 10 GATES STREET, PO
BOX 426, WHITE RIVER JCT., VT 05001 (referred to below as "Lender").
ASSIGNMENT. For valuable consideration, Grantor assigns, grants a continuing
security interest in, and conveys to Lender all of Grantor's right, title, and
interest in and to the Rents from the following described Property located in
WINDSOR County, State of Vermont:
SEE ATTACHED SCHEDULE A
The Real Property or its address is commonly known as ASCUTNEY MOUNTAIN RESORT,
BROWNSVILLLE, VT 05037
DEFINITIONS. The following words shall have the following meanings when used in
this Assignment. Terms not otherwise defined in this Assignment shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.
Assignment. The word "Assignment" means this Assignment of Rents between
Grantor and Lender, and includes without limitation all assignments and
security interest provisions relating to the Rents.
Event of Default. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section
titled "Events of Default."
Grantor. The word "Grantor" means ASCUTNEY MOUNTAIN RESORT, L.P. and
ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.
Indebtedness. The word "Indebtedness" means all principal and interest
payable under the Note and any amounts expended or advanced by Lender to
discharge obligations of Grantor or expenses incurred by lender to enforce
obligations of Grantor under this Assignment, together with interest on
such amounts as provided in this Assignment. Specifically, without
limitation, this Assignment secures a revolving line of credit, under which
Lender may make advances to Grantor so long as Grantor complies with all
the terms of the Note.
Lender. The word "Lender" means MASCOMA SAVINGS BANK, fsb, its successors
and assigns.
Note. The word "Note" means the promissory note or credit agreement dated
June 30, 1997, in the original principal amount of $1,500,000.00 from
Grantor and any co-borrowers to Lender, together with all renewals of,
extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the promissory note or agreement.
Property. The word "Property" means the real property, and all improvements
thereon, described above in the "Assignment" section.
Real Property. The words "Real Property" mean the property, interests and
rights described above in the "Property Definition" section.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the indebtedness.
<PAGE>
Rents. The word "Rents" means all rents, revenues, income, issues, profits
and proceeds from the Property, whether due now or later, including without
limitation all Rents from all leases described on any exhibit attached to
this Assignment.
THIS ASSIGNMENT IS GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2)
PERFORMANCE OF ANY AND ALL OBLIGATIONS OF GRANTOR UNDER THE NOTE, THIS
ASSIGNMENT, AND THE RELATED DOCUMENTS. THIS ASSIGNMENT IS GIVEN AND ACCEPTED ON
THE FOLLOWING TERMS:
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Assignment or any
Related Document, Grantor shall pay to Lender all amounts secured by this
Assignment as they become due, and shall strictly perform all of Grantor's
obligations under this Assignment. Unless and until Lender exercises its right
to collect the Rents as provided below and so long as there is no default under
this Assignment, Grantor may remain in possession and control of and operate and
manage the Property and collect the Rents, provided that the granting of the
right to collect the Rents shall not constitute Lender's consent to the use of
cash collateral in a bankruptcy proceeding.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE RENTS. With respect
to the Rents, Grantor represents and warrants to Lender that:
Ownership. Grantor is entitled to receive the Rents free and clear of all
rights, loans, liens, encumbrances, and claims except as disclosed to and
accepted by Lender in writing.
Right to Assign. Grantor has the full right, power, and authority to enter
into this Assignment and to assign and convey the Rents to Lender.
No Prior Assignment. Grantor has not previously assigned or conveyed the
Rents to any other person by any instrument now in force.
No Further Transfer. Grantor will not sell, assign, encumber, or otherwise
dispose of any of Grantor's rights in the Rents except as provided in this
Agreement.
LENDER'S RIGHT TO COLLECT RENTS. Lender shall have the right at any time, and
even though no default shall have occurred under this Assignment, to collect and
receive the Rents. For this purpose, Lender is hereby given and granted the
following rights, powers and authority:
Notice to Tenants. Lender may send notices to any and all tenants of the
Property advising them of this Assignment and directing all Rents to be
paid directly to Lender or Lender's agent.
Enter the Property. Lender may enter upon and take possession of the
Property; demand, collect and receive from the tenants or from any other
persons liable therefor, all of the Rents; institute and carry on all legal
proceedings necessary for the protection of the Property, including such
proceedings as may be necessary to recover possession of the Property;
collect the Rents and remove any tenant or tenants or other persons from
the Property.
Maintain the Property. Lender may enter upon the Property to maintain the
Property and keep the same in repair; to pay the costs thereof and of all
services of all employees, including their equipment, and of all continuing
costs and expenses of maintaining the Property in proper repair and
condition, and also to pay all taxes, assessments and water utilities, and
the premiums on fire and other insurance effected by Lender on the
Property.
Compliance with Laws. Lender may do any and all things to execute and
comply with the laws of the State of Vermont and also all other laws,
<PAGE>
<PAGE>
06-30-1997 ASSIGNMENT OF RENTS Page 2
Loan No 27027106 (Continued)
================================================================================
rules, orders, ordinances and requirements of all other governmental
agencies affecting the Property.
Lease the Property. Lender may rent or lease the whole or any part of the
Property for such term or terms and on such conditions as Lender may deem
appropriate.
Employ Agents. Lender may engage such agent or agents as Lender may deem
appropriate, either in Lender's name or in Grantor's name, to rent and
manage the Property, including the collection and application of Rents.
Other Acts. Lender may do all such other things and acts with respect to
the Property as Lender may deem appropriate and may act exclusively and
solely in the place and stead of Grantor and to have all of the powers of
Grantor for the purposes stated above.
No Requirement to Act. Lender shall not be required to do any of the
foregoing acts or things, and the fact that Lender shall have performed one
or more of the foregoing acts or things shall not require Lender to do any
other specific act or thing.
APPLICATION OF RENTS. All costs and expenses incurred by Lender in connection
with the Property shall be for Grantor's account and Lender may pay such costs
and expenses from the Rents. Lender, in its sole discretion, shall determine the
application of any and all Rents received by it; however, any such Rents
received by Lender which are not applied to such costs and expenses shall be
applied to the Indebtedness. All expenditures made by Lender under this
Assignment and not reimbursed from the Rents shall become a part of the
Indebtedness secured by this Assignment, and shall be payable on demand, with
interest at the Note rate from date of expenditure until paid.
FULL PERFORMANCE. If Grantor pays all of the Indebtedness when due and otherwise
performs all the obligations imposed upon Grantor under this Assignment, the
Note, and the Related Documents, Lender shall execute and deliver to Grantor a
suitable satisfaction of this Assignment and suitable statements of termination
of any financing statement on file evidencing Lender's security interest in the
Rents and the Property. Any termination fee required by law shall be paid by
Grantor, if permitted by applicable law.
EXPENDITURES BY LENDER. If Grantor fails to comply with any provision of this
Assignment, or if any action or proceeding is commenced that would materially
affect Lender's interests in the Property, Lender on Grantor's behalf may, but
shall not be required to, take any action that Lender deems appropriate. Any
amount that Lender expends in so doing will bear interest at the rate provided
for in the Note from the date incurred or paid by Lender to the date of
repayment by Grantor. All such expenses, at Lender's option, will (a) be payable
on demand, (b) be added to the balance of the Note and be apportioned among and
be payable with any installment payments to become due during either (i) the
term of any applicable insurance policy or (ii) the remaining term of the Note,
or (c) be treated as a balloon payment which will be due and payable at the
Note's maturity. This Assignment also will secure payment of these amounts. The
rights provided for in this paragraph shall be in addition to any other rights
or any remedies to which Lender may be entitled on account of the default. Any
such action by Lender shall not be construed as curing the default so as to bar
Lender from any remedy that it otherwise would have had.
DEFAULT. Each of the following, at the option of Lender, shall constitute an
event of default ("Event of Default") under this Assignment:
Default on Indebtedness. Failure of Grantor to make any payment when due on
the Indebtedness.
Compliance Default. Failure of Grantor to comply with any other term,
obligation, covenant or condition contained in this Assignment, the Note or
in any of the Related Documents.
Default in Favor of Third Parties. Should Borrower or any Grantor default
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Borrower's property or Borrower's or any
Grantor's ability to repay the Loans or perform their respective
obligations under this Assignment or any of the Related Documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Grantor under this Assignment, the
Note or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished.
Defective Collateralization. This Assignment or any of the Related
Documents ceases to be in full force and effect (including failure of any
collateral documents to create a valid and perfected security interest or
lien) at any time and for any reason.
Other Defaults. Failure of Grantor to comply with any term, obligation,
covenant, or condition contained in any other agreement between Grantor and
Lender.
Death or Insolvency. The dissolution or termination of Grantor's existence
as a going business or the death of any partner, the insolvency of Grantor,
the appointment of a receiver for any part of Grantor's property, any
assignment for the benefit of creditors, any type of creditor workout, or
the commencement of any proceeding under any bankruptcy or insolvency laws
by or against Grantor.
Foreclosure, Forfeiture, etc. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Grantor or by any governmental agency
against any of the Property. However, this subsection shall not apply in
the event of a good faith dispute by Grantor as to the validity or
reasonableness of the claim which is the basis of the foreclosure or
forfeiture proceeding, provided that Grantor gives Lender written notice
of such claim and furnishes reserves or a surety bond for the claim
satisfactory to Lender.
Events Affecting Guarantor. Any of the preceding events occurs with respect
to any Guarantor of any of the Indebtedness or any Guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability
<PAGE>
under, any Guaranty of the Indebtedness. Lender, at its option, may, but
shall not be required to, permit the Guarantor's estate to assume
unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure the Event of Default.
Events Affecting Co-Borrowers. Any of the preceding events occurs with
respect to any co-borrower of any of the Indebtedness or any co-borrower
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness. Lender, at its option,
may, but shall not be required to, permit the co-borrower's estate to
assume unconditionally the obligations on the Indebtedness in a manner
satisfactory to Lender, and, in doing so, cure the Event of Default.
Adverse Change. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
Insecurity. Lender in good faith deems itself insecure.
Right to Cure. If such a failure is curable and if Grantor has not been
given a notice of a breach of the same provision of this Assignment within
the preceding twelve (12) months, it may be cured (and no Event of Default
will have occurred) if Grantor, after Lender sends written notice demanding
cure of such failure: (a) cures the failure within ten (10) days; or (b) if
the cure requires more than ten (10) days, immediately initiates steps
sufficient to cure the failure and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and
at any time thereafter, Lender may exercise any one or more of the following
rights and remedies, in addition to any other rights or remedies provided by
law:
Accelerate Indebtedness. Lender shall have the right at its option without
notice to Grantor to declare the entire indebtedness immediately due and
payable, including any prepayment penalty which Grantor would be required
to pay.
Collect Rents. Lender shall have the right, without notice to Grantor, to
take possession of the Property and collect the Rents, including amounts
past due and unpaid, and apply the net proceeds, over and above Lender's
costs, against the Indebtedness. In furtherance of this right, Lender shall
have all the rights provided for in the Lender's Right to Collect Section,
above. If the Rents are collected by Lender, then Grantor irrevocably
designates Lender as Grantor's attorney-in-fact to endorse instruments
received in payment thereof in the name of Grantor and to negotiate the
same and collect the proceeds. Payments by tenants or other users to Lender
in response to Lender's demand shall satisfy the obligations for which the
payments are made, whether or not any proper grounds for the demand
existed. Lender may exercise its rights under this subparagraph either in
person, by agent, or through a receiver.
Appoint Receiver. Lender shall have the right to have a receiver appointed
to take possession of all or any part of the Property, with the power to
protect and preserve the Property, to operate the Property preceding
foreclosure or sale, and to collect the Rents from the Property and apply
the proceeds, over and above the cost of the receivership, against the
Indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not
the apparent value of the Property exceeds the Indebtedness by a
substantial amount. Employment by Lender shall not disqualify a person from
serving as a receiver.
Other Remedies. Lender shall have all other rights and remedies provided in
this Assignment or the Note or by law.
Waiver; Election of Remedies. A waiver by any party of a breach of a
provision of this Assignment shall not constitute a waiver of or prejudice
the party's rights otherwise to demand strict compliance with that
provision or any other provision. Election by Lender to pursue any remedy
shall not exclude pursuit of any other remedy, and an election to make
expenditures or take action to perform an obligation of Grantor under this
Assignment after failure of Grantor to perform shall not affect Lender's
right to declare a default and exercise its remedies under this Assignment.
Attorneys' Fees; Expenses. If Lender institutes any suit or action to
enforce any of the terms of this Assignment, Lender shall be entitled to
recover such sum as the court may adjudge reasonable as attorneys' fees at
trial and on any appeal. Whether or not any court action is involved, all
reasonable expenses incurred by Lender that in Lender's opinion are
necessary at any time for the protection of its interest or the enforcement
<PAGE>
<PAGE>
06-30-1997 ASSIGNMENT OF RENTS Page 3
Loan No 27027106 (Continued)
================================================================================
of its rights shall become a part of the indebtedness payable on demand and
shall bear interest from the date of expenditure until repaid at the
rate provided for in the Note. Expenses covered by this paragraph include,
without limitation, however subject to any limits under applicable law,
Lender's attorneys' fees and Lender's legal expenses whether or not there
is a lawsuit, including attorneys' fees for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals and any anticipated post-judgment collection services, the cost of
searching records, obtaining title reports (including foreclosure reports),
surveyors' reports, and appraisal fees, and title insurance, to the extent
permitted by applicable law. Grantor will also pay any court costs, in
addition to all other sums provided by law.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Assignment:
Amendments. This Assignment, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Assignment. No alteration of or amendment to this
Assignment shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment.
Applicable Law. This Assignment has been delivered to Lender and accepted
by Lender in the State of Vermont. This Assignment shall be governed by and
construed in accordance with the laws of the State of Vermont.
Multiple Parties. All obligations of Grantor under this Assignment shall be
joint and several, and all references to Grantor shall mean each and every
Grantor. This means that each of the persons signing below is responsible
for all obligations in this Assignment.
No Modification. Grantor shall not enter into any agreement with the holder
of any mortgage, deed of trust, or other security agreement which has
priority over this Assignment by which that agreement is modified, amended,
extended, or renewed without the prior written consent of Lender. Grantor
shall neither request nor accept any future advances under any such
security agreement without the prior written consent of Lender.
Severability. If a court of competent jurisdiction finds any provision of
this Assignment to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Assignment in all other respects shall remain valid and enforceable.
Successors and Assigns. Subject to the limitations stated in this
Assignment on transfer of Grantor's interest, this Assignment shall be
binding upon and inure to the benefit of the parties, their successors and
assigns. If ownership of the Property becomes vested in a person other than
Grantor, Lender, without notice to Grantor, may deal with Grantor's
successors with reference to this Assignment and the Indebtedness by way of
forebearance or extension without releasing Grantor from the obligations of
this Assignment or liability under the Indebtedness.
Time is of the Essence. Time is of the essence in the performance of this
Assignment.
Waiver of Homestead Exemption. Grantor hereby releases and waives all
rights and benefits of the homestead exemption laws of the State of Vermont
as to all Indebtedness secured by this Assignment.
Waivers and Consents. Lender shall not be deemed to have waived any rights
under this Assignment (or under the Related Documents) unless such waiver
is in writing and signed by Lender. No delay or omission on the part of
Lender in exercising any right shall operate as a waiver of such right or
any other right. A waiver by any party of a provision of this Assignment
shall not constitute a waiver of or prejudice the party's right otherwise
to demand strict compliance with that provision or any other provision. No
prior waiver by Lender, nor any course of dealing between Lender and
Grantor, shall constitute a waiver of any of Lender's rights or any of
Grantor's obligations as to any future transactions. Whenever consent by
Lender is required in this Assignment, the granting of such consent by
Lender in any instance shall not constitute continuing consent to
subsequent instances where such consent is required.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS ASSIGNMENT OF
RENTS, AND GRANTOR AGREES AS TO ITS TERMS.
GRANTOR: GRANTOR:
ASCUTNEY MOUNTAIN RESORT, L.P. ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.
By: /s/ SUSAN D. PLAUSTEINER By: /s/ SUSAN D. PLAUSTEINER
------------------------------- -------------------------------
SNOWDANCE SKI COMPANY, General Snowdance Hotel Company, General
Partner, Partner,
SUSAN D. PLAUSTEINER, PRESIDENT Susan D. Plausteiner, President
Signed, acknowledged and delivered in the presence of:
x [SIGNATURE]
----------------------------------------
Witness
x [SIGNATURE]
----------------------------------------
Witness
- --------------------------------------------------------------------------------
PARTNERSHIP ACKNOWLEDGEMENT
STATE OF VERMONT }
} ss
COUNTY OF WINDSOR }
At White River Junction, this day of June 30, 1997, personally appeared
SUSAN D. PLAUSTEINER, PRESIDENT Officer of SNOWDANCE SKI COMPANY, General
Partner of ASCUTNEY MOUNTAIN RESORT, L.P., and President of Snowdance Hotel
Company, General Partner of Ascutney Mountain Resort Hotel, L.P., agent of said
partnerships, signer and sealer of the foregoing written instrument, and
acknowledged the same to be the free act and deed of such partnerships.
Before me: [SIGNATURE]
--------------------------------------------------
Notary Public
Comm. Expires 2/10/99
================================================================================
<PAGE>
<PAGE>
AGREEMENT TO PROVIDE INSURANCE
<TABLE>
<CAPTION>
Principal Loan Date Maturity Loan No. Call Account Collateral Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$1,500,000.00 06-30-1997 06-30-1998 27027106 1E 204 DGW
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<S> <C>
Borrower: ASCUTNEY MOUNTAIN RESORT, L.P. (TIN: Lender: MASCOMA SAVINGS BANK, fsb
03-0339700); ET. AL. GATES STREET OFFICE
ROUTE 44, P.O. BOX 699 10 GATES STREET
BROWNSVILLE, VT 05037 PO BOX 426
WHITE RIVER JCT., VT 05001
</TABLE>
- -------------------------------------------------------------------------------
INSURANCE REQUIREMENTS. ASCUTNEY MOUNTAIN RESORT, L.P. ("Grantor") understands
that insurance coverage is required in connection with the extending of a loan
or the providing of other financial accommodations to Grantor by Lender. These
requirements are set forth in the security documents. The following minimum
insurance coverages must be provided on the following described collateral (the
"Collateral"):
Collateral: Real Estate at ASCUTNEY MOUNTAIN RESORT, BROWNSVILLE, VT. 05037.
Type. Fire and extended coverage.
Amount. Full insurance value.
Basis. Replacement value.
Endorsements. Standard mortgagee's clause with stipulation that
coverage will not be cancelled or diminished without a minimum
of ten (10) days' prior written notice to Lender, and without
disclaimer of the insurer's liability for failure to give such
notice.
Collateral: All inventory, Equipment and Fixtures.
Type. All risks, including fire, theft and liability.
Amount. Full insurable value.
Basis. Replacement value.
Endorsements. Lender's loss payable clause with stipulation that
coverage will not be cancelled or diminished without a minimum of
ten (10) days' prior written notice to Lender.
INSURANCE COMPANY. Grantor may obtain insurance from any insurance company
Grantor may choose that is reasonably acceptable to Lender. Grantor understands
that credit may not be denied solely because insurance was not purchased through
Lender.
FLOOD INSURANCE. Flood insurance for property given as security for this loan is
described as follows:
REAL ESTATE at ASCUTNEY MOUNTAIN RESORT, BROWNSVILLE, VT 05037.
Should the Collateral at any time be deemed to be located in an area
designated by the Director of the Federal Emergency Management Agency as a
special flood hazard area and should Federal Flood Insurance covering the
Collateral ever become available, Grantor agrees to obtain and maintain
Federal Flood Insurance, for the full unpaid principal balance of the loan,
up to the maximum policy limits set under the National Flood Insurance
Program, or as otherwise required, and to maintain such insurance for the
term of the loan.
Real Estate at COACHING LANE, BROWNSVILLE, VT 05037.
Real Estate at OFF WHITEFACE INN ROAD, LAKE PLACID, VT 12946.
Real Estate at ASCUTNEY MOUNTAIN RESORT HOTEL, BROWNSVILLE, VT 05037.
INSURANCE MAILING ADDRESS. All documents and other materials relating to
insurance for this loan should be mailed, delivered or directed to the following
address:
MASCOMA SAVINGS BANK
67 NORTH PARK STREET
PO BOX 435
LEBANON, NH 03766
(603) 448-3650
FAILURE TO PROVIDE INSURANCE. Grantor agrees to purchase and maintain any
required flood insurance within 45 days following notice given by Lender.
Additionally, Grantor agrees to deliver to Lender, on or before closing,
evidence of all other required insurance as provided above, with an effective
date of June 30, 1997, or earlier. Grantor acknowledges and agrees that if
Grantor fails to provide any required insurance or fails to continue such
insurance in force, Lender may do so at Grantor's expense as provided in the
applicable security document. The cost of any such insurance, at the option of
Lender, shall be payable on demand or shall be added to the indebtedness as
provided in the security document. GRANTOR ACKNOWLEDGES THAT IF LENDER SO
PURCHASES ANY SUCH INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION
AGAINST PHYSICAL DAMAGE TO THE COLLATERAL, UP TO THE BALANCE OF THE LOAN;
HOWEVER, GRANTOR'S EQUITY IN THE COLLATERAL MAY NOT BE INSURED. IN ADDITION, THE
INSURANCE MAY NOT PROVIDE ANY PUBLIC LIABILITY OR PROPERTY DAMAGE
INDEMNIFICATION AND MAY NOT MEET THE REQUIREMENTS OF ANY FINANCIAL
RESPONSIBILITY LAWS.
AUTHORIZATION. For purposes of insurance coverage on the Collateral, Grantor
authorizes Lender to provide to any person (including any insurance agent or
company) all information Lender deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO PROVIDE
INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JUNE 30, 1997.
GRANTORS:
ASCUTNEY MOUNTAIN RESORT, L.P.
By: /s/ SUSAN D. PLAUSTEINER
-----------------------------------------------------
SNOWDANCE SKI COMPANY, General Partner, SUSAN D. PLAUSTEINER, PRESIDENT
ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.
By: /s/ SUSAN D. PLAUSTEINER
-----------------------------------------------------
SNOWDANCE HOTEL COMPANY, General Partner, SUSAN D. PLAUSTEINER, PRESIDENT
/s/ SUSAN D. PLAUSTEINER
- ------------------------------------------------
SUSAN D. PLAUSTEINER, Individually
/s/ STEVEN H. PLAUSTEINER
- ------------------------------------------------
STEVEN H. PLAUSTEINER, Individually
Signed, acknowledged and delivered in the presence of:
<PAGE>
<PAGE>
06-30-1997 AGREEMENT TO PROVIDE INSURANCE Page
Loan No 27027106 (Continued)
================================================================================
X /s/ [Signature illegible]
- ------------------------------------------------
Witness
X /s/ [Signature illegible]
- ------------------------------------------------
Witness
FOR LENDER USE ONLY
INSURANCE VERIFICATION
DATE: PHONE:
---------------------------- ------------------------------------
AGENT'S NAME:
-------------------------------------------------------------------
INSURANCE COMPANY:
-------------------------------------------------------------
POLICY NUMBER:
------------------------------------------------------------------
EFFECTIVE DATES:
----------------------------------------------------------------
COMMENTS:
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<PAGE>
<PAGE>
LOAN AGREEMENT
THIS AGREEMENT dated this 6th day of May, 1994, by and between VERMONT ECONOMIC
DEVELOPMENT AUTHORITY, a body corporate and politic and a public instrumentality
of the State of Vermont with a principal office at 56 East State Street,
Montpelier, Vermont 05602 ("Lender"), and ASCUTNEY MOUNTAIN RESORT, L.P. and
ASCUTNEY MOUNTAIN RESORT HOTEL, L.P., limited partnerships organized and
existing under the laws of the State of Delaware, with a place of business at
West Windsor, Vermont (hereinafter referred to respectively as "AM Resort" and
"AMR Hotel" and collectively as "Borrowers").
WHEREAS, Borrowers have applied to Lender for a loan to finance, in part,
the acquisition of and improvements to the Ascutney Mountain Resort, so-called,
situated in West Windsor, Vermont (hereinafter referred to as the "Project");
and
WHEREAS, Lender is willing to make such a loan to the Borrowers on the
terms and conditions hereinafter set forth;
NOW THEREFORE, for and in consideration of the mutual covenants hereinafter
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
THE LOAN
SECTION 1.01: THE LOAN NOTE AND RATE
Subject to the terms and conditions of this Agreement, Lender hereby agrees
to lend to Borrowers, and Borrowers hereby agree to borrow from Lender, the sum
of Four Hundred Thousand Dollars ($400,000.00) (hereinafter referred to as the
"Loan"). The obligation of the Borrowers to repay the Loan shall be evidenced by
the promissory note (hereinafter referred to as the "Note") of the Borrowers in
a form satisfactory to Lender dated the date on which the Loan is made
(hereinafter referred to as the "Closing") payable to the order of Lender in the
principal amount of Four Hundred Thousand Dollars ($400,000.00) with interest
thereon at the Rate specified therein (hereinafter referred to as the "Rate").
SECTION 1.02: THE TERM AND REPAYMENT
The term of the Loan shall be ten (10) years. The Note shall be repaid in
120 equal installments of principal and interest calculated daily by reference
to a repayment term or amortization period of fifteen (15) years. All payments
shall be applied first to interest and then to principal. All payments shall be
timely made to Lender, or its order, at or to 56 East State Street, Montpelier,
Vermont 05602, or at such other address as the holder thereof may designate in
writing.
<PAGE>
<PAGE>
SECTION 1.03: PURPOSE OF LOAN
The purpose of the Loan is to finance a portion of the cost of the
acquisition and improvement of the Ascutney Mountain Resort, so-called, situated
in West Windsor, Vermont.
ARTICLE II
BORROWERS' REPRESENTATIONS AND WARRANTIES
The Borrowers represent and warrant the following:
SECTION 2.01: DULY ORGANIZED
AM Resort and AMR Hotel are limited partnerships duly organized, validly
existing and in good standing under the laws of the State of Delaware and have
the authority to enter into this Agreement and take such action as is required
hereunder.
SECTION 2.02: DULY AUTHORIZED
AM Resort and AMR Hotel are duly authorized, qualified and licensed under
all applicable laws, regulations, ordinances and orders of public authority to
carry on their businesses and hold each and every license, permit and other
regulatory approval necessary to conduct their business operations at West
Windsor, Vermont.
SECTION 2.03: LEGALLY BINDING INSTRUMENTS
When this Agreement is executed by the Borrowers and Lender, and when the
Note is executed and delivered by the Borrowers for value, each such instrument
shall constitute the legal, valid and binding obligation of the Borrowers in
accordance with its terms. Each Security Agreement and Instrument, Financing
Statement, Mortgage Deed and other lien on real or personal property shall
constitute legal, valid and binding liens free and clear of all prior liens and
encumbrances, except as otherwise expressly provided for herein.
SECTION 2.04: NO LEGAL SUITS
There are no claims, actions, suits or proceedings instituted or filed and,
to the best of the Borrowers' knowledge, there are no claims, actions, suits or
proceedings threatened at law or in equity or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality that would have a materially adverse effect on the Project or
the Borrowers' performance of this Agreement, except Appellant's right to appeal
or move for rehearing the decision dated April 29, 1994 of the United States
Court of Appeals, Second Circuit, in Ivankovich v. Canney, Docket No. 93-5116.
-2-
<PAGE>
<PAGE>
SECTION 2.05: NO LEGAL AUTHORIZATION NEEDED
No authorization, consent or approval, or any formal exemption of any
governmental body, regulatory authority (federal, state or local) or mortgagee,
creditor or third party is or was necessary to the valid execution and delivery
by the Borrowers of this Agreement, the Note, or any Security Agreement or
Instrument, Financing Statement or Mortgage.
SECTION 2.06: NOT IN DEFAULT
Borrowers are not in default of any obligation, covenant or condition
contained in any bond, debenture, note or other evidence of indebtedness or any
mortgage, security agreement or collateral instrument securing the same.
SECTION 2.07: NO UNREMEDIED ADVERSE CHANGE
The Borrowers certify that there has been no unremedied material adverse
change since the date of loan application or loan approval in the financial
condition of Borrowers, or the organization, operation, business prospects,
fixed properties or personnel of the Borrowers.
ARTICLE III
CONDITIONS TO CLOSING
The obligation of the Lender to make the Loan shall be subject to the
fulfillment at the time of closing of each of the following conditions:
SECTION 3.01: EXECUTION OF AUTHORIZATION
The Borrowers shall have executed and delivered, in a form satisfactory to
Lender and its legal counsel, this Loan Agreement, the Note, Mortgage Deed,
Security Agreement and Financing Statements granting to Lender security in the
real property and improvements thereto, machinery and equipment, accounts
receivable and inventory that are to be or have been acquired, constructed,
created, produced, generated or improved with the Loan proceeds, together with
such other security instruments, guaranties, certificates, documents and
assurances as Lender or its legal counsel may require. Said Mortgage Deed,
Security Agreement, Financing Statements and other security instruments shall
represent a valid and enforceable lien upon the property described therein, free
and clear of all liens and encumbrances upon such property, except as otherwise
expressly provided for therein, herein or otherwise in writing by Lender.
SECTION 3.02: ADDITIONAL SECURITY
The Borrowers shall have complied with, delivered or caused to be delivered
such other or additional security as Lender or its legal counsel may require,
including but not limited to, for
-3-
<PAGE>
<PAGE>
example, subordination agreements, personal guaranties or guaranties by
Borrowers' general partners and the pledge of collateral not otherwise expressly
referred to herein.
SECTION 3.03: REPRESENTATIONS AND WARRANTIES
All representations and warranties of Borrowers set forth herein shall be
accurate as of the closing date as though such representations and warranties
have been made as of that time.
SECTION 3.04: OPINION OF LEGAL COUNSEL TO BORROWER
The Borrowers shall have delivered, or cause to be delivered to Lender, in
a form acceptable to legal counsel for Lender, an opinion of legal counsel to
Borrowers, which addresses, among other issues, the capacity and authority of
the Borrowers to perform under the terms of this Loan Agreement and the
documents referred to herein; the compliance of Borrowers' Project plans with
all local, State of Vermont and federal environmental, zoning, planning,
sanitary, land use and related statutes, rules and regulations and that all
permits necessary or incidental to the Project have issued or been obtained by
Borrowers; the status of title to Borrowers' real and/or personal property and
the marketability thereof; and the enforceability of the security documents
executed and delivered hereunder. Legal counsel to Lender shall be entitled to
require such opinion to address any issues deemed pertinent by counsel and to
require such supporting documentation as may also be deemed material to the
opinion.
SECTION 3.05: COMPLIANCE WITH AGREEMENT
The Borrowers shall have complied with each term, provision and condition
of this Agreement required to be complied with before the closing date.
SECTION 3.06: EXTENSION OF CREDIT BY FLEET BANK-NH
The Borrowers shall have received additional financing for the Project in
the form of a loan from Fleet Bank-NH in the amount of One Million Two Hundred
Fifty Thousand Dollars ($1,250,000.00), and a loan from Springfield Regional
Development Corporation in the amount of Forty Thousand Dollars ($40,000.00).
Said loan from Fleet Bank-NH to be in the form of a Reducing Revolver Credit
Facility for a term of eight (8) years. The loan from Springfield Regional
Development Corporation may be in the form of an equity pass-through type loan.
SECTION 3.07: CONTRIBUTION OF CAPITAL
The Borrowers shall have received in the form of a contribution to capital
a sum of not less than $1,500,000.00 from their limited and general partners,
which sum shall be available for employment as equity to fund costs and expenses
of the Project.
-4-
<PAGE>
<PAGE>
SECTION 3.08: APPROVAL OF LENDER'S COUNSEL
All actions, undertakings, instruments and documents required to carry out
this Agreement or incidentally related thereto, including related legal matters,
have been approved by counsel to Lender, which shall not be unreasonably
withheld or delayed.
SECTION 3.09: BORROWERS' CERTIFICATE REGARDING HAZARDOUS MATERIALS AND
SOLID WASTES
Borrowers shall have provided Lender with a sworn statement as to whether
any hazardous materials or solid wastes have been disposed or generated on, upon
or within the property pledged as security for repayment of the Note, or will be
generated on such property, and if so, the nature and extent of same, the
location where the hazardous materials or solid wastes have been disposed of or
will be stored or deposited and, if located upon this pledged property. The
nature and extent of same and how the hazardous materials and solid wastes have
been or will be disposed of, stored or deposited and whether such disposal,
storage and deposit has been or will be pursuant to a federal or state permit.
A true copy of any such permit shall be attached to Borrowers' certificate.
SECTION 3.10: JOINT AND SEVERAL PERSONAL GUARANTY OF STEVEN PLAUSTEINER AND
SUSAN PLAUSTEINER
There shall have been delivered to Lender, in a form satisfactory to legal
counsel for Lender, the unconditional joint and several personal guaranties of
the Note and the Loan by Steven Plausteiner and Susan Plausteiner.
SECTION 3.11: GUARANTY OF SNOWDANCE SKI COMPANY AND SNOWDANCE HOTEL
COMPANY
There shall have been delivered to Lender, in a form satisfactory to legal
counsel for Lender, the unconditional guaranties of the Note and the Loan by
Snowdance Ski Company and Snowdance Hotel Company.
ARTICLE IV
AFFIRMATIVE COVENANTS OF THE BORROWERS
The Borrowers agree to comply with the following covenants from the date
hereof until Lender has been fully repaid with interest, unless Lender, its
successors or assigns, shall otherwise consent in writing:
SECTION 4.01: PAYMENT OF THE LOAN
The Borrowers agree to immediately pay when due the principal and
interest on the Note according to its terms and conditions and to immediately
pay when due any other amounts that
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may become due and payable to Lender under or pursuant to the terms of this
Agreement or the documents executed and delivered in connection herewith.
SECTION 4.02: PAYMENT OF ORIGINATION FEE AND LENDER'S EXPENSES
In consideration of Lender's expenses associated with processing and
servicing this Loan, the Borrowers agree to pay to Lender at closing an
origination fee of two percent (2%) of the principal amount of the Loan
($8,000.00) and all engineering and extraordinary legal expenses that may be
incurred in connection with review and assessment of the Project and closing of
the Loan.
SECTION 4.03: COMPLIANCE WITH CLOSING DOCUMENTS
The Borrowers agree to comply with each term, condition and provision of
all documents and instruments required under the terms of this Loan Agreement
including, but not limited to, the Note, Real Property Mortgage, Security
Agreement, Financing Statements and other documents granting security for the
Loan to be made hereunder.
SECTION 4.04: MAINTAIN AND INSURE PROPERTY
The Borrowers agree at all times to maintain the property provided as
security for this Loan in such condition and repair that Lender's security will
be adequately protected. The Borrowers also agree to maintain during the term of
the Loan adequate hazard insurance policies covering fire and such other
hazards, including but not limited to windstorm, lightning, hail, business
interruption, explosion, riot, civil commotion, aircraft, vehicle, marine,
smoke, builder's risk, public liability, property damage, flood or mudslide, or
any other hazard insurance that may be required to protect the security, in an
amount that is at least the lesser of the depreciated replacement value of the
insured property, the amount of the Loan or sufficient to prevent the Borrowers
from becoming co-insurers and issued by companies satisfactory to Lender with
acceptable loss payee clauses in favor of Lender under a standard or New York
Mortgage Interest Clause which shall provide a minimum of thirty (30) days'
written notice to Lender prior to cancellation. Borrowers agree Lender
may advance and pay any unpaid premiums necessary to maintain adequate hazard
insurance coverage upon the secured property and that any sums so paid shall, at
the sole discretion of Lender, be immediately due and payable or be added to the
principal indebtedness of the Note and bear interest at the Rate provided for
therein.
SECTION 4.05: MAINTAIN WORKER'S COMPENSATION INSURANCE
The Borrowers agree at all times to maintain worker's compensation
insurance in accordance with the applicable provisions of Vermont Statutes
Annotated.
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SECTION 4.06: MAINTAIN AND SUBMIT FINANCIAL STATEMENTS; CERTIFICATION
The Borrowers agree to maintain quarterly internally compiled financial
statements and balance sheets and to provide the said financial statements and
balance sheets to Lender within 45 days of the end of the accounting period. The
Borrowers also agree to submit to Lender within 90 days of the end of its fiscal
year CPA reviewed annual income statements and balance sheets. Such financial
statements shall be submitted to Lender as long as the Note remains unpaid.
In addition, year end financial statements shall be accompanied by a
certification of a certified public accountant that at fiscal year end Borrowers
were in compliance with all loan covenants set forth in this Loan Agreement, in
a form acceptable to Lender.
SECTION 4.07: PAY ALL TAXES
The Borrowers agree to pay and discharge all taxes, assessments and
governmental charges upon them or against their properties prior to the date
upon which penalties attach thereto, except that the Borrowers shall not be
required to pay any such tax, assessment or governmental charge which is being
contested by them in good faith by or through appropriate proceedings. Borrowers
agree Lender may advance and pay any taxes or assessments made against or upon
the secured property and that any sums so paid shall, at the sole discretion of
Lender, be immediately due and payable or be added to the principal indebtedness
of the Note and bear interest at the Rate provided for therein.
SECTION 4.08: MAINTAIN EXISTENCE
The Borrowers agree to maintain their existence under Delaware law, and
their rights, privileges and franchises within the State of Vermont and to
qualify and remain qualified to do business in good standing under the laws of
the State of Vermont.
SECTION 4.09: RIGHT TO INSPECTION
The Borrowers agree to grant Lender, until the Note has been fully repaid
with interest, the right at reasonable hours to inspect the real and/or personal
property pledged to secure this Loan. The Borrowers further agree to provide
Lender free access to the Borrowers' premises for the purpose of such inspection
to determine the condition of such real and personal property and real estate.
SECTION 4.10: NULL AND VOID COVENANTS
The Borrowers agree that in the event any provision of this Loan Agreement,
any other instrument executed at closing or the application thereof to any
person or circumstance shall be
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declared null and void, invalid, or held for any reason to be unenforceable
by a court of competent jurisdiction, the remainder of such agreement shall
nevertheless remain in full force and effect, and to this end, the provisions of
all covenants, conditions and agreements described herein are deemed separate.
SECTION 4.11: EXPENSES AND CLOSING COSTS
The Borrowers agree to pay all fees, expenses and charges in respect to the
Loan, or its making, or the transfer of security to Lender or in any way
connected therewith, including but not limited to applicable title insurance and
survey costs, recording and filing fees, property transfer taxes, if any, and
any other taxes, fees and expenses in connection with this transaction or with
the enforcement of this Loan Agreement, the Note, the Mortgage Deeds and
Security Agreement.
SECTION 4.12: INDEMNIFICATION
The Borrowers agree to indemnify and save Lender or its successors and
assigns harmless against any and all liability with respect to, or resulting
from, any delay in discharging any obligation of the Borrowers.
SECTION 4.13: HAZARDOUS MATERIAL AND SOLID WASTE INDEMNIFICATION
The Borrowers hereby agree to indemnify and save Lender and its successors
and assigns harmless from any and all liability resulting from any storage or
disposal of hazardous materials or solid wastes upon the property pledged as
security for repayment of the Note, which such indemnification shall include,
but not be limited to, the cost and expense of clean-up and response to such
storage or disposal.
SECTION 4.14: COMPLIANCE WITH ENVIRONMENTAL REGULATIONS
The Borrowers agree to comply with all applicable federal and state
environmental regulations concerning the storage and disposal of hazardous
materials and solid wastes during the term of the Note, including any extensions
thereof.
SECTION 4.15: COMPLIANCE WITH CONDITIONS OF LOAN
Borrowers agree to comply with all covenants, terms and conditions imposed
by Fleet Bank-NH in connection with the Loan of said Bank to Borrower. All
covenants, terms and conditions of said loan from Fleet Bank-NH to Borrowers are
hereby incorporated by reference as affirmative covenants of the Borrowers in
this agreement.
SECTION 4.16: EXPENSES OF COLLECTION OR ENFORCEMENT
The Borrowers agree, if at any time the Borrowers default on any provision
of this Loan Agreement, to pay Lender or its successors and assigns, in addition
to any other amounts that may
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be due from the Borrowers, an amount equal to the reasonable costs and expenses
of collection, enforcement or correction of default incurred by Lender or its
assigns in such collection, enforcement or correction of default, including, but
not limited to, the fees, costs and expenses of legal representation of Lender.
SECTION 4.17: MAINTENANCE OF EMPLOYMENT
Borrowers shall maintain a reasonable level of employment, as required by
10 V.S.A. 'SS' 264, at the eligible facilities owned by Borrowers upon which
Lender is taking a mortgage as security for the Note. For the purposes of this
covenant, a reasonable level of employment shall be deemed not to have been
maintained whenever the Borrowers, employing collectively fifty (50) or more
employees at their facilities, permanently transfer, within any three (3) month
period, fifty percent (50%) or more of those employees or employment positions
to any out-of-state facility.
SECTION 4.18: OCCUPY AND UTILIZE ELIGIBLE FACILITY
As long as the Note remains unpaid, Borrowers agree to occupy and utilize
the Project as an eligible facility as that term is defined in 10 V.S.A.
'SS' 212(6).
ARTICLE V
NEGATIVE COVENANTS OF THE BORROWER
The Borrowers covenant and agree that, from the date hereof until payment
in full of the Note, unless Lender, its successors or assigns, shall otherwise
consent in writing, they will not enter into any agreement or other commitment
the performance of which would constitute a breach of any of the covenants
contained in this Loan Agreement including, but not limited to, the following:
SECTION 5.01: ENCUMBER THE MORTGAGED PROPERTY
The Borrowers will neither create nor suffer to exist any mortgage, pledge,
lien, charge or encumbrance, including liens arising from judgments, on the
property pledged as security for repayment of the Note ("Mortgaged Property"),
exclusive of that arising under the Mortgage Deed, Security Agreement and other
security instruments executed and delivered to Lender hereunder, or except as
otherwise agreed to in writing, in advance, by Lender, or the following: (i)
deposits under Workmen's Compensation, Unemployment Insurance and Social
Security laws; (ii) liens imposed by law such as carrier's, warehousemen's or
mechanic's liens incurred in good faith in the ordinary course of business, and
which do not in the aggregate have a material adverse effect on the Borrowers'
financial condition or the mortgaged property; and (iii) purchase money security
interests in machinery and equipment acquired by Borrowers subsequent to the
date of this Loan Agreement pursuant to Section 5.06(a) of
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this Agreement. Borrowers agree that any loan made to them by their limited
partners, general partners or directors shall be subordinate to the Loan of
Lender.
SECTION 5.02: PREPAYMENT OF OBLIGATIONS
The Borrowers shall not make payments of principal before the due date
thereof pursuant to the terms of a note or notes executed and delivered by
Borrowers to Fleet Bank-NH or Springfield Regional Development Corporation
without contemporaneous payment of a proportional percentage of the principal
due pursuant to the Note.
SECTION 5.03: CONVEY THE MORTGAGED PROPERTY
The Borrowers will not sell, convey, or suffer to be conveyed, lease,
assign, transfer, hypothecate or otherwise dispose of the Mortgaged Property
without the express prior written approval of Lender.
SECTION 5.04: CHANGE OF OWNERSHIP
The Borrowers will not, without the express prior written approval of
Lender, permit or cause to occur any material change in the ownership,
structure, control or operation of AM Resort or AMR Hotel, including but not
limited to:
(a) merger into or consolidation with any other person, firm,
corporation or business entity;
(b) any dissolution, termination or liquidation of the Borrowers or
transfer of a majority interest, including but not limited to the pledge,
encumbrance or hypothecation of such interest; or
(c) any transfer, alienation or conveyance of Borrowers' capital
assets or properties outside of the ordinary course of business.
For purposes of this Section 5.04, a "material change" is any change in
which majority control is lost, gained, transferred or conveyed.
SECTION 5.05: CHANGE OF THE PROJECT
The Borrowers will neither permit nor suffer to exist, without the prior
written consent of Lender, any material change in the Project's plans and/or
specifications as same are represented by the existing plans and specifications
heretofore submitted to Lender by Borrowers in connection with the Loan
application. A material change will include any significant variance in the
accepted plans and specifications and increases in contract prices, and/or
additional financial obligation with respect to the construction of improvements
on the Mortgaged Property.
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SECTION. 5.06: RESTRICTION UPON FINANCIAL ACTIVITIES
The Borrowers shall not, absent the prior written approval of Lender, which
shall not be unreasonably withheld if, in the sole discretion of Lender, the
financial operations of Borrowers justify approval, conduct, perform, commit nor
suffer any of the following:
(a) Purchase or lease of capital assets not included in the Project
having a fair market value in the aggregate in excess of $300,000 in any
fiscal year;
(b) Pay salaries, bonuses or compensation to any limited or general
partner of Borrowers, or any officer, director or shareholder of a general
partner of Borrowers or any guarantor of the Note in excess of $50,000 in
any fiscal year;
(c) Make loans to any partner, officer, director or shareholder of a
general partner or any guarantor of the Loan;
(d) Pay interest or principal on loans made to AM Resort or AMR Hotel
from a partner, officer or director of a general partner or any guarantor
of the Loan;
(e) Merge or be consolidated by, into or with any other business
entity;
(f) Acquire any business entity;
(g) Be acquired by any business entity;
(h) Substantially revise or restructure the ownership of Borrowers
which, for purposes of this Section 5.06(h), shall be defined to be any
change in majority control of either Borrower;
(i) Form, capitalize or acquire any subsidiary; or
(j) Make distributions to limited or general partners of Borrowers,
except for distributions sufficient to offset the income tax liabilities of
the partners due to income earned by Borrowers.
ARTICLE VI
EVENTS OF DEFAULT AND ACCELERATION
The entire unpaid principal of the Note, and the interest accrued thereon,
shall become immediately due and payable, without any notice or demand of any
kind or any presentment or protest, if any one of the following events
(hereinafter referred to as an "Event of Default") shall occur, whether
voluntarily or
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involuntarily, or without limitation occurring or brought about by operation of
law or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rules or regulations of any administrative or governmental
body:
SECTION 6.01: NON-PAYMENT OF LOAN
If the Borrowers shall fail to make payment when due of any installment of
principal on the Note, or interest accrued thereon, and if the default shall
remain unremedied for twenty (20) days after the mailing of notice of such
default to Borrowers.
SECTION 6.02: NON-PAYMENT OF OTHER INDEBTEDNESS
If default shall be made in the payment when due of any installment of
principal or of interest on any of Borrowers' other indebtedness and if such
default shall remain unremedied for twenty (20) days after the mailing of notice
of such default to Borrowers.
SECTION 6.03: INCORRECT REPRESENTATION OR WARRANTY
Any representation or warranty contained in this Loan Agreement or in any
certificate furnished pursuant hereto, shall prove to have been incorrect when
made in any material respect.
SECTION 6.04: DEFAULT IN COVENANTS
The Borrowers shall default in the performance of any other term, covenant
or agreement contained in this Loan Agreement, and such default shall continue
unremedied for twenty (20) days after the mailing of notice of such default to
Borrowers.
SECTION 6.05: VOLUNTARY INSOLVENCY
The Borrowers shall become insolvent or shall cease to pay its debts as
they mature or shall voluntarily file a petition seeking reorganization of, or
the appointment of, a receiver, trustee or the pursuit of liquidation of the
Borrowers or a substantial portion of their assets, or to effect a plan or other
arrangements with creditors, or shall be adjudicated bankrupt, or shall make a
voluntary assignment for the benefit of creditors.
SECTION 6.06: INVOLUNTARY INSOLVENCY
If an involuntary petition shall be filed against the Borrowers under any
bankruptcy, insolvency or similar law seeking the reorganization of or the
appointment of any receiver, trustee or liquidator for the Borrowers, or of a
substantial part of the property of the Borrowers, or a writ or warrant of
attachment or similar process shall be issued against a substantial part of the
property of the Borrowers, and such petition shall not be dismissed, or such
writ or warrant of attachment or similar
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process shall not be released or bonded, within sixty (60) days after filing or
levy thereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01: WAIVER OF NOTICE
No failure or delay on the part of the Lender in exercising any right,
power or remedy shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof or the exercise of any other right, power or remedy hereunder. No
modification or waiver of any provision of this Loan Agreement or of the Note,
nor of any event will be effective unless the same shall be reduced to a
writing, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No notice to or demand
upon the Borrowers in any case shall entitle the Borrowers to any other or
further notice or demand in similar or other circumstances.
SECTION 7.02: NOTICES
All notices, consents, requests, demand and other communications hereunder
shall be in writing and shall be deemed to have been duly given to a party
hereto if mailed by certified mail, postage prepaid, to the Lender and the
Borrowers at the following addresses:
If to Lender: Vermont Economic Development Authority
56 East State Street
Montpelier, VT 05602
If to Borrowers: Ascutney Mountain Resort, L.P.
Attention: Susan D. Plausteiner
P. O. Box 699
Brownsville, VT 05037
Ascutney Mountain Resort Hotel, L.P.
Attention: Susan D. Plausteiner
P. O. Box 699
Brownsville, VT 05037
SECTION 7.03: SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All agreements, representations and warranties made by the Borrowers herein
or in any other document or certificate delivered to Lender in connection with
the transactions contemplated by this Loan Agreement shall survive the delivery
of this Agreement, the Note, the Mortgage Deed and the Security
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Agreement hereunder, and shall continue in full force and effect so long as the
Note is outstanding.
SECTION 7.04: SUCCESSORS AND ASSIGNS
This Loan Agreement shall be binding upon the Borrowers, their successors
and permitted assigns, provided however, that the Borrowers may not assign or
transfer any rights hereunder without the prior written consent of Lender. This
Agreement shall inure to the benefit of Lender, its successors and assigns, and,
except as otherwise expressly provided in particular provisions hereof, all
subsequent holders of the Note.
SECTION 7.05: COUNTERPARTS
This Loan Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
SECTION 7.06: GOVERNING LAW
This Loan Agreement, the Note, the Security Agreements and Financing
Statements, the Mortgage Deed and each and every other document contemplated
hereby shall be deemed contracts made under the laws of the State of Vermont,
and for all purposes shall be construed in accordance with the laws of the State
of Vermont.
SECTION 7.07: ARTICLE AND SECTION HEADINGS
Article and section headings used in this Agreement are for convenience
only and shall not affect the construction of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused their names to be
subscribed and their seals affixed as of the date and the year first above
written.
[signature]
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Witness
VERMONT ECONOMIC DEVELOPMENT
AUTHORITY
By: /s/ PAUL S. DENTON
-------------------------
Paul S. Denton, Manager
ASCUTNEY MOUNTAIN RESORT,
L.P., By its General partner,
Snowdance Ski Company
[signature] By: /s/ SUSAN D. PLAUSTEINER
- --------------------- ---------------------------
Witness President and Duly
Authorized Agent of
Snowdance Ski Company
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ASCUTNEY MOUNTAIN RESORT
HOTEL, L.P., By its General
Partner, Snowdance Hotel
Company
[signature] By: /s/ SUSAN D. PLAUSTEINER
- --------------------- -------------------------------
Witness President and Duly
Authorized Agent of
Snowdance Hotel Company
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AGREEMENT BETWEEN
VERMONT ECONOMIC DEVELOPMENT AUTHORITY,
SUSAN D. PLAUSTEINER, STEVEN H. PLAUSTEINER,
SNOWDANCE SKI COMPANY AND SNOWDANCE HOTEL COMPANY
THIS AGREEMENT made as of the date and year hereinafter referred to by and
between Vermont Economic Development Authority ("VEDA"), Steven H. Plausteiner
and Susan D. Plausteiner (collectively "Plausteiners"), Snowdance Ski Company
("Snowdance Ski") and Snowdance Hotel Company ("Snowdance Hotel").
WHEREAS, Ascutney Mountain Resort, L.P. and Ascutney Mountain Resort Hotel,
L.P. ("Borrowers") have applied to VEDA for a loan in the principal amount of
Four Hundred Thousand Dollars ($400,000.00) with interest at 5.5% and a term of
ten (10) years (the "Loan"); and
WHEREAS, as a condition precedent to making said loan, VEDA has required
Plausteiners, Snowdance Ski and Snowdance Hotel to guarantee payment of the
Promissory Note evidencing such loan (the "Note") and to comply with certain
requirements of the Loan Agreement entered into by and between Borrowers and
VEDA (the "Loan Agreement"); and
WHEREAS, Snowdance Ski is the general partner and Plausteiners are the
limited partners of Ascutney Mountain Resort, L.P., and Susan Plausteiner is the
sole shareholder of Snowdance Ski; and
WHEREAS, Snowdance Hotel is the general partner and Plausteiners are the
limited partners of Ascutney Mountain Resort Hotel, L.P., and Susan Plausteiner
is the sole shareholder of Snowdance Hotel;
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NOW, THEREFORE, for and in consideration of One Dollar and Other Good and
Valuable Consideration paid to the Borrowers, Plausteiners, Snowdance Ski and
Snowdance Hotel by VEDA, and in order to induce VEDA to make the loan to
Borrowers, the parties hereto agree as follows:
1. Plausteiners agree to submit personal financial statements to VEDA
contemporaneous with execution of the within Agreement and annually within 90
days of the end of Borrowers' fiscal year, as long as the Note remains unpaid.
2. Snowdance Ski and Snowdance Hotel each agree to submit CPA reviewed
annual financial statements to VEDA contemporaneous with execution of the within
Agreement and annually within 90 days of the end of Borrowers' fiscal year, as
long as the Note remains unpaid.
3. Plausteiners, Snowdance Ski and Snowdance Hotel agree to comply with the
restrictions upon financial activities set forth in Section 5.06 of the Loan
Agreement and to be bound thereby.
4. Plausteiners, Snowdance Ski and Snowdance Hotel certify there has been
no unremedied material adverse change since the date of Borrowers' loan
application or loan approval in the financial condition of Plausteiners,
Snowdance Ski and Snowdance Hotel.
5. This Agreement shall be construed pursuant to and in accordance with the
laws of the State of Vermont, shall inure to the benefit of and bind the
successors and assigns of each of the
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parties hereto, and may be executed in several counterparts, each of which shall
constitute but one and the same original.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
this _____ day of May, 1994.
VERMONT ECONOMIC DEVELOPMENT
AUTHORITY
By: /s/ PAUL S. DENTON
------------------------
Paul S. Denton, Manager
/s/ STEVEN H. PLAUSTEINER
-------------------------
Steven H. Plausteiner
/s/ SUSAN D. PLAUSTEINER
-------------------------
Susan D. Plausteiner
SNOWDANCE SKI COMPANY
By: /s/ SUSAN D. PLAUSTEINER
-------------------------
Its President and Duly
Authorized Agent
SNOWDANCE HOTEL COMPANY
By: /s/ SUSAN D. PLAUSTEINER
-------------------------
Its President and Duly
Authorized Agent
3
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<PAGE>
TERM PROMISSORY NOTE
$400,000.00 West Windsor, Vermont
May 6, 1994
FOR VALUE RECEIVED, the undersigned, ASCUTNEY MOUNTAIN RESORT, L.P. and
ASCUTNEY MOUNTAIN RESORT HOTEL, L.P. ("Borrowers"), jointly and severally
promise to pay to VERMONT ECONOMIC DEVELOPMENT AUTHORITY ("Lender"), or order,
the principal sum of Four Hundred Thousand Dollars ($400,000.00) in lawful
currency of the United States of America, with interest thereon from the date
hereof until paid at the rate of five and five-tenths percent (5.5%) per annum,
in 120 equal monthly installments of $3,268.33 each, commencing on the 6th day
of June, 1994, and on the 6th day of each succeeding month thereafter until May
6, 2004, when the entire indebtedness evidenced by this Note, including accrued
interest, if not sooner paid, shall be due and payable in full.
Each of such installments shall be applied first in the payment of interest
and the remainder in the reduction of the principal amount of this note.
Payments shall be made at the office of the Lender in Montpelier, Vermont.
Borrowers reserve the right to prepay the principal sum outstanding, in
whole or in part, without incurring penalty, fine, interest or premium charge.
If default is made in the payment of any installment of principal or
interest due on this Note, or if default is made in the performance of any other
term, condition, provision or covenant of the Loan Agreement by and between
Borrowers and Lender of even date herewith (the "Loan Agreement"), or of any
Mortgage Deed or Security Agreement securing this Note, and if such default
continues for more than twenty (20) days after the mailing of notice thereof by
Lender to Borrowers, as set forth in the Loan Agreement, the entire unpaid
principal balance hereof and accrued thereon shall at once become due and
payable, without further notice. If default occurs in this Note, the undersigned
agrees to reimburse the Lender for all reasonable attorney's fees and expenses
and all other reasonable fees, costs and expenses incurred by Lender in
connection with the default, as provided in the Loan Agreement. Borrowers
further agree that all of the terms, conditions, provisions and covenants in the
Loan Agreement and other instruments executed and delivered as security for this
Note are incorporated herein by reference and made a part hereof, including, but
not limited to, events of default and the Lender's
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rights as to acceleration of the indebtedness evidenced by this Note. Failure to
exercise any option provided for herein shall not constitute a waiver of such
right in the event of a subsequent default or the right to exercise same at any
other time.
All parties to this Note, whether principal, surety, guarantor, endorser or
accommodation maker, hereby waive presentment for payment, demand, protest,
notice of protest and notice of dishonor, and agree that the receipt of interest
in advance or the extension of time shall not relinquish or discharge any
endorser, surety, accommodation maker or guarantor of this Note.
This Note shall be governed as to validity, interpretation, construction of
fact and in all other respects by the laws of the State of Vermont. If any
provision of this Note should conflict with applicable law, such conflict shall
not affect other provisions which can be given effect without the conflicting
provision, and to this end the provisions of this Note are declared to be
severable.
NOTICE TO CO-SIGNER:
YOUR SIGNATURE TO THIS NOTE MEANS THAT YOU ARE EQUALLY LIABLE FOR REPAYMENT
OF THIS NOTE. IF THE BORROWERS DO NOT PAY, THE LENDER HAS A LEGAL RIGHT TO
COLLECT FROM YOU.
ASCUTNEY MOUNTAIN RESORT,
L.P., By its General Partner,
Snowdance Ski Company
/s/ By: /s/
- ------------------------- ---------------------------
Witness President and Duly
Authorized Agent of
Snowdance Ski Company
ASCUTNEY MOUNTAIN RESORT
HOTEL, L.P., By its General
Partner, Snowdance Hotel
Company
/s/ By:/s/
- ------------------------- ---------------------------
Witness President and Duly
Authorized Agent of
Snowdance Hotel Company
<PAGE>
<PAGE>
MORTGAGE DEED
KNOW ALL MEN BY THESE PRESENTS, that ASCUTNEY MOUNTAIN RESORT, L.P., a
limited partnership organized and existing under the laws of the State of
Delaware, with its principal place of business at West Windsor, in the County of
Windsor and State of Vermont ("Mortgagor"), in consideration of Ten and More
Dollars ($10.00) paid to it by VERMONT ECONOMIC DEVELOPMENT AUTHORITY, a body
corporate and politic and a public instrumentality of the State of Vermont,
organized and existing pursuant to Title 10 of Vermont Statutes Annotated,
Chapter 13, with a principal office in Montpelier, County of Washington, State
of Vermont, ("Mortgagee"), the receipt of which is hereby acknowledged, do
hereby GIVE, GRANT, BARGAIN, SELL AND CONVEY unto the Mortgagee, its successors
and assigns forever, the following described premises situated in West Windsor,
in the County of Windsor and State of Vermont, viz:
Being all those same lands and premises described in Schedule A attached
hereto and made a part hereof as if set forth at length and in full herein.
TO HAVE AND TO HOLD such property unto Mortgagee and Mortgagee's successors
and assigns forever, together with all improvements now or hereafter erected on
the property, and all easements, rights, appurtenances, rents, royalties,
interests, water, water rights, and all fixtures now or hereafter attached to
the property, all of which, including replacements and additions thereto, shall
be deemed to be and remain a part of the property covered by this Mortgage, and
all of the foregoing, together with said property, are all hereafter
collectively referred to as the "Property";
And further, the said Mortgagor, for itself and its successors and assigns,
does covenant with the said Mortgagee, its successors and assigns, that until
the ensealing of these presents it is the sole owner of the premises above
described and has good right and title to convey the same in the manner
aforesaid; and that it is FREE FROM EVERY ENCUMBRANCE, except as aforesaid, and
it does hereby engage to WARRANT AND DEFEND the same against all lawful claims
whatsoever, except as aforesaid.
<PAGE>
<PAGE>
THE CONDITION OF THIS DEED is that if the said Mortgagor or its successors
and assigns shall well and truly pay or cause to be paid VERMONT ECONOMIC
DEVELOPMENT AUTHORITY, its successors or assigns, the principal sum of Four
Hundred Thousand Dollars ($400,000.00), as specified in one note in that amount
of even date, the terms of which are herein incorporated by reference, and any
renewal, substitution or replacements thereof, together with accrued interest
and any other amounts required to be paid pursuant to the terms thereof ("the
Note"), and to secure to Mortgagee the full and faithful payment and performance
of each and all of the following when due:
(a) The repayment of all amounts advanced by Mortgagee to Mortgagor,
whether now outstanding or hereafter arising, and whether absolute or
contingent;
(b) The payment of all other sums, with interest thereon, advanced in
accordance herewith to protect the security of this Mortgage;
(c) The performance of the covenants and agreements of Mortgagor in this
Mortgage;
(d) The performance by Mortgagor of all other present or future agreements,
covenants and contracts between Mortgagor and Mortgagee, however arising;
(e) Any and all other indebtedness, obligations and loans owed or
guaranteed by Mortgagor to Mortgagee, whether now existing or hereafter arising,
and whether absolute or contingent; and
(f) All attorney's fees and expenses and all fees and expenses of other
experts employed by Mortgagee hereunder.
All of the previously referred to present and future debts, covenants,
contracts and obligations of Mortgagor to Mortgagee are hereafter referred to as
the "Obligations".
And the Mortgagor further COVENANTS AND AGREES that:
1. Mortgagor shall promptly pay when due the principal of and interest on
the Note, and the indebtedness evidenced by the Obligations, together with any
prepayment and late charges as provided in the Obligations, and shall fully and
promptly perform when due all of Mortgagor's other duties under the Obligations.
2. Mortgagor shall keep the buildings and improvements now or hereafter
erected on the Property insured by fire and extended coverage insurance policies
issued by insurance companies authorized to do business in the State of Vermont
in an amount approved by Mortgagee, with Mortgagee named as Mortgagee under a
standard mortgage clause providing for payment to Mortgagee in the event of loss
despite any defenses insurer may ahve against Mortgagor and providing for
cancellation or non-renewal of the policy only upon ten days' prior written
notice to Mortgagee. Insurers are authorized to make payment of loss directly
to Mortgagee, and Mortgagor shall pay all insurance premiums on said policies.
In the event of loss, the Mortgagor shall
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<PAGE>
immediately give notice by mail to the Mortgagee which may make proof of loss if
not promptly made by the Mortgagor.
3. Mortgagor shall pay all land lease rental, all local, municipal, county,
state and federal taxes and assessments, water rents, sewage charges and other
governmental or municipal charges or assessments levied upon the Property or
upon the interests of the Mortgagee in the Property, and in the event of default
thereof, the Mortgagee may (but without obligation to do so) pay the same and
any insurance premiums due under paragraph 2 hereof, and the same, when so paid
by the Mortgagee, shall, with interest at the rate of 10% per annum, be
immediately due and payable or, at the sole option of the Mortgagee, be added to
the principal of the Note.
4. Mortgagor shall not convey or attempt to convey any equitable, legal or
other interests in the Property encumbered by this Mortgage, except a prior and
senior mortgage heretofore granted by Mortgage and Security Agreement dated
February 23, 1994, to Fleet Bank-NH, which appears of record in Book 50, at
pages 178-202 of the Town of West Windsor Land Records.
5. No sale of the Property and no forbearance on the part of the Mortgagee
and no extension given by the Mortgagee of the time for the payment of the
indebtedness hereby secured shall operate to release, discharge, modify, change
or affect the original liability of the Mortgagor in whole or in part.
6. Mortgagor shall not suffer liens superior to the lien hereby created to
attach to or be enforced against the Property premises or any part thereof,
except that referred to above in paragraph 4 hereof, and will keep said premises
in as good repair, order and condition as they now are or hereafter may be put
into and will not commit nor permit any strip or waste of the Property or any
part thereof, reasonable use and wear excepted.
7. The Mortgagee may, at its sole option, advance and pay any sums of money
that in its judgment may be necessary in order that this Mortgage shall at all
times be a prior mortgage upon the Property, except the prior and senior
mortgage interest conveyed to Fleet Bank-NH, and any and all sums of money so
advanced shall, with interest at the rate of 10% per annum, be immediately due
and payable, or, at the sole option of the Mortgagee, be added to the principal
indebtedness secured by this Mortgage.
8. The Mortgagor will comply with the provisions of a Loan Agreement
entered into between the Mortgagor and Mortgagee herein dated of even date
herewith, the provisions of which are incorporated herein by reference, and with
the terms of any agreement, mortgage note or Mortgage and Security Agreement
entered into between the Mortgagor and Fleet Bank-NH.
9. If there shall be a default in the payment of any installment of
principal or interest of the Note or if there be a default in the due observance
or performance of any other covenant, condition or agreement contained in this
Mortgage or the Loan Agreement dated of even date herewith, and such default
continues for more than twenty (20) days after the mailing of the notice thereof
by the Mortgagee to the Mortgagor, addressed to Susan D. Plausteiner, President,
Snowdance Ski Company, General Partner, Ascutney Mountain Resort, L.P., P.O. Box
699, Brownsville VT 05037, or to such other address as Mortgagor may request in
writing, then the entire unpaid principal balance of the Note secured hereby and
accrued interest theron and any other amounts provided for herein shall at once
become due and payable without further notice, at the option of the Mortgagee.
In
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<PAGE>
the event of such acceleration, the Mortgagee may immediately start
proceedings to protect its interest. If the Mortgagor defaults, it hereby agrees
to pay all the reasonable costs and charges of any such proceeding including,
but not limited to foreclosure proceedings, together with Mortgagee's reasonable
attorney's fees in excess of 2% of the amount of this Mortgage, if applicable.
10. Mortgagor hereby assigns to Mortgagee the rents of the Property and all
profits derived from any and all uses of the Property, including but not limited
to those derived from business and business conducted thereon, provided that
Mortgagor shall, prior to acceleration under paragraph 9 hereof, or abandonment
of the Property, have the right to collect and retain such rents and profits as
they become due and payable. Upon acceleration of the Note or any other
Obligation or abandonment of the Property, Mortgagee in person, by agent, or by
judicially appointed receiver, shall be entitled to enter upon, take possession
of and manage the Property and to lease the Property or any part thereof, and to
collect the said rents and profits of the Property, including those past due.
All rents and profits collected by Mortgagee or the receiver shall be applied
first to payment of the cost of management of the Property and collection of
rents and profits, including but not limited to reasonable receiver's fees,
premiums on receiver's bonds and reasonable attorney's fees, and then to the sum
secured by this Mortgage. Mortgagee and the receiver shall be liable to account
only for those rents and profits actually received; Mortgagor hereby consents to
the appointment of such receiver.
11. This Mortgage includes a power of sale in accordance with 12 V.S.A.
'SS' 4531 et seq.
NOW THEREFORE, if the Mortgagor shall well and truly pay all amounts as
specified hereunder and as above provided according to the tenor and effect of
this instrument and shall faithfully perform all the other conditions and
covenants contained in this Mortgage and in the Note and in the Loan Agreement
dated May , 1994, then this Mortgage shall be void; otherwise the same shall
remain in full force and virtue in law.
IN WITNESS WHEREOF, the said Mortgagor, ASCUTNEY MOUNTAIN RESORT, L.P., has
caused its name to be hereunto subscribed and its seal hereto affixed by its
President and Duly Authorized Agent, this day of May, 1994.
ASCUTNEY MOUNTAIN RESORT, L.P.
BY: SNOWDANCE SKI COMPANY, ITS
GENERAL PARTNER
___________________________
Witness By:________________________________
President and Duly
Authorized Agent of
Snowdance Ski Company
___________________________
Witness
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<PAGE>
STATE OF VERMONT
WINDSOR COUNTY, SS.
At in said County this day of May, 1994, personally appeared Susan
D. Plausteiner, President and Duly Authorized Agent of Snowdance Ski Company,
General Partner of Ascutney Mountain Resort, L.P., and she acknowledged the
foregoing instrument by her subscribed to be her free act and deed, and the free
act and deed of Ascutney Mountain Resort, L.P.
Before me,_________________________
Notary Public
DISCHARGE
Vermont Economic Development Authority, by its duly authorized agent,
hereby acknowledges satisfaction of the Mortgage Deed within, and the same is
discharged at , on , A.D., 19 .
_________________________ _______________________
Witness
_________________________ _______________________
Witness
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<PAGE>
SCHEDULE A
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Legal Description - Resort
---------------------------
It being all and the same lands and premises with all rights appurtenant
thereto conveyed by virtue of a Trustee's Deed dated September 1, 1993 from John
R. Canney, III, Trustee to Ascutney Mountain Resort, L.P., recorded in Book 49
at Pages 85-91 of the West Windsor Land Records and described in particular as
follows:
The following real property being 743.51 acres, more or less, together with
all buildings and improvements thereon and any and all easements, licenses,
rights and interests therein or appurtenant thereto (including, without
limitation, the easements, licenses, rights and interests described
hereinbelow), located in the Town of West Windsor, County of Windsor, State of
Vermont being more particularly described and/or depicted on a survey dated
April 21, 1988, revised April 23, 1988, and May 10, 1988, prepared by Farnsworth
Surveys of Brownsville, Vermont entitled "Land of Mt. Ascutney Associates,
Brownsville, Vermont" comprising 2 sheets, being Drawing No. 88-737 and Drawing
No. 88-737A, a mylar thereof recorded on Pages 176-177 of the West Windsor Map
Rack:
1. Parcels 1, 8, 9, 10, 11, 12, 13A, 13B, and 20. Containing 575.44
acres, more or less, with all buildings and improvements thereon situated,
located on the southerly side of Vermont Route #44 in West Windsor
(Brownsville), Vermont, and further being described and commonly referred
to as the Mt. Ascutney Ski Area, owned by Mt. Ascutney Associates by virtue
of a Warranty Deed dated September 28, 1984 from Mt. Ascutney Corporation,
recorded in Book 29 at Pages 16-23 of the West Windsor Land Records, and a
Corrective Warranty Deed dated November 14, 1984 from Mt. Ascutney
Corporation, recorded in Book 29 at Pages 166-173 of the West Windsor Land
Records, and by virtue of a Warranty Deed dated November 12, 1984 from Mt.
Ascutney Corporation, recorded in Book 29 at Pages 128-130 of the West
Windsor Land Records.
2. Parcel 2. Containing 2.54 acres, more or less, with building thereon
situated, and further being described as Lot S-1 of the Sky Hawk Village
Development, so-called, at Mt. Ascutney, owned by Mt. Ascutney Associates
by virtue of a Warranty Deed dated December 31, 1986 from Lee E. Thurston
and Edith M. Thurston, recorded in Book 35 at Pages 346-347 of the West
Windsor Land Records.
3. Parcel 3. Containing 2.26 acres, more or less, and further being
described as Lot T-5 of the Ascutney Mountain Village Development,
so-called, owned by Mt. Ascutney Associates by virtue of a Quit-Claim Deed
dated April 1, 1985 from Sarah H. Giles, recorded in Book 32 at Pages
23-24 of the West Windsor Land Records.
4. Parcel 4. Containing 2.24 acres, more or less, and further being
described as Lot T-1 of the Ascutney Mountain Village Development,
so-called, owned by Mt. Ascutney Associates by virtue of a Quit-Claim Deed
dated April 1, 1985 from Sarah H. Giles, recorded in Book 32 at Pages 25-26
of the West Windsor Land Records.
<PAGE>
<PAGE>
5. Parcel 5. Containing .98 acres, more or less, and further being
described as Lot S-65 of the Sky Hawk Village Development, so-called, owned
by Mt. Ascutney Associates by virtue of a Warranty Deed dated September 28,
1984 from Mt. Ascutney Corporation, recorded in Book 29 at Pages 24-26 of
the West Windsor Land Records.
6. Parcel 7. Containing 1.09 acres, more or less, and further being
described as Lot S-45 of the Sky Hawk Village Development, so-called, owned
by Mt. Ascutney Associates by virtue of a Warranty Deed dated March 16,
1987 from Lee R. Sisti, recorded in Book 36 at Pages 194-196 of the West
Windsor Land Records.
7. McArdle Parcel. Containing 1.07 acres, more or less, and further
being described as Lot S-46 of the Sky Hawk Village Development, so-called,
owned by Mt. Ascutney Associates by virtue of a Warranty Deed dated October
3, 1988 from Richard and Lois McArdle, recorded in Book 41 at Pages 102-103
of the West Windsor Land Records.
8. McDermott Parcel. Containing 1.05 acres, more or less, and further
being described as Lot S-47 of the Sky Hawk Village Development, so-called,
owned by Mt. Ascutney Associates by virtue of a Warranty Deed dated March
26, 1988 from Michael J. and Linda C. McDermott, recorded in Book 39 at
Pages 422-424 of the West Windsor Land Records.
9. Parcels 14 and 15. Containing 95.26 acres, more or less, with
right-of-way appurtenant thereto, located on both sides of Town Road No. 40
in West Windsor, Vermont, and further being described as property owned by
Mt. Ascutney Associates by virtue of a Warranty Deed dated September 28,
1984 from Summit Ventures Incorporated, recorded in Book 29 at Pages 29-33
of the West Windsor Land Records, and a Corrective Warranty Deed dated
November 14, 1984 from Summit Ventures Incorporated, recorded in Book 29 at
Pages 161-165 of West Windsor Land Records.
10. Parcel 16. Containing 2.09 acres, more or less, and further being
described as Lot No. 5 of the Ascutney Mountain Village Development,
so-called, owned by Mt. Ascutney Associates by virtue of a Warranty Deed
dated December 18, 1984 from Walter C. Paine, recorded in Book 30 at Pages
1-2 of the West Windsor Land Records.
11. Parcels 17A and 17B. Containing a total of 3.15 acres, more or less,
and further being described as Lots No. 3 and 4 of the Ascutney Mountain
Village Development, so-called, owned by Mt. Ascutney Associates by virtue
of a Warranty Deed dated June 18, 1985 from Charlotte A. Donaldson Maher,
recorded in Book 32 at Pages 140-142 of the West Windsor Land Records.
12. Parcels 18A, 18B, 18C, 18D, and 18E. Containing a total of 51.2
acres, more or less, and further being described as the property owned by
Mt. Ascutney
<PAGE>
<PAGE>
Associates by virtue of a Warranty Deed dated July 18, 1985 from Summit
Ventures Incorporated, recorded in Book 32 at Pages 218-221 of the West
Windsor Land Records.
13. Village Road, so-called. That portion of Village Road, so-called,
extending from State Aid Highway 2 to Sky Hawk Lane, so-called, containing
by estimate 3.5 acres, more or less.
14. Brown Parcel. Containing 1.64 acres, more or less, and further being
described as the property owned by Mt. Ascutney Associates by virtue of a
Warranty Deed dated November 13, 1987 from Kneeland C. Brown and Shirley A.
Brown, recorded in Book 39 at Pages 425-426 of the West Windsor Land
Records.
15. Easement granted pursuant to a Warranty Deed dated September 28,
1984 from Mt. Ascutney Corporation, recorded in Book 29 at Pages 16-23 of
the West Windsor Land Records, and a Corrective Warranty Deed dated
November 14, 1984 from Mt. Ascutney Corporation, recorded in Book 29 at
Pages 166-173 of the West Windsor Land Records.
16. Right of Way granted pursuant to a Warranty Deed dated March 16,
1987 from Lee R. Sisti, recorded in Book 36 at Pages 194-196 of the West
Windsor Land Records.
17. Right of Way granted pursuant to a Warranty Deed dated October 3,
1988 from Richard and Lois McArdle, recorded in Book 41 at Pages 102-103 of
the West Windsor Land Records.
18. Right of Way granted pursuant to a Warranty Deed dated March 26,
1988 from Michael J. and Linda C. McDermott, recorded in Book 39 at Pages
422-424 of the West Windsor Land Records.
19. Any rights to the land within Town Road 40 granted pursuant to a
Warranty Deed dated September 28, 1984 from Summit Ventures Incorporated,
recorded in Book 29 at Pages 29-33 of the West Windsor Land Records, and a
Corrective Warranty Deed dated November 14, 1984 from Summit Ventures
Incorporated, recorded in Book 29 at Pages 161-165 of the West Windsor Land
Records.
20. Rights in land granted pursuant to a Warranty Deed dated July 18,
1985 from Summit Ventures Incorporated, recorded in Book 32 at Pages
218-221 of the West Windsor Land Records.
21. Easements and rights granted pursuant to a Warranty Deed, from Mt.
Ascutney Associates, to Mt. Ascutney Associates Realty Company, Inc., dated
December
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<PAGE>
17, 1984 and recorded in the West Windsor Land Records on December 20, 1984
in Book 29, pages 253-258.
22. Spring Rights granted pursuant to a Warranty Deed, dated as of May
26, 1961 from Stewart and Patricia Barrows to Mt. Ascutney Ski Area, Inc.,
recorded in the West Windsor Land Records in Book 14, Page 126.
23. All real property, improvements, leases, licenses, easements, rights
of way, and such other interests of Trustee in, to or pertaining to lands
and premises of the Debtors known as the Mt. Ascutney Ski Area and Resort
a/k/a the Mt. Ascutney Ski Resort, but specifically excluding any real
property, improvements, leases, licenses, rights-of-way, and easements
granted by Trustee to:
(a) Ascutney Mountain Resort Hotel, L.P., a Delaware limited
partnership, pursuant to the terms of that certain Trustee's Deed
(Hotel) bearing even date herewith;
(b) Ascutney Mountain Resort Realty, L.P., a Delaware limited
partnership, pursuant to the terms of that certain Trustee's Deed
(Mountain's Edge), bearing even date herewith; and
(c) Ascutney Mountain Resort, L.P., a Delaware limited partnership,
pursuant to the terms of that certain Trustee's Deed (Sewerline),
bearing even date herewith.
The references contained in Paragraphs 1 through 12 and Paragraph 14 of
this Exhibit A to any deeds or the previous owner of the property or interests
described therein are included solely for reference purposes and do not, in any
way, modify or limit the legal description of the property or interests insured
hereby.
<PAGE>
<PAGE>
MORTGAGE DEED
KNOW ALL MEN BY THESE PRESENTS, that ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.,
a limited hotel partnership organized and existing under the laws of the State
of Delaware, with its principal place of business at West Windsor, in the County
of Windsor and State of Vermont ("Mortgagor"), in consideration of Ten and More
Dollars ($10.00) paid to it by VERMONT ECONOMIC DEVELOPMENT AUTHORITY, a body
corporate and politic and a public instrumentality of the State of Vermont,
organized and existing pursuant to Title 10 of Vermont Statutes Annotated,
Chapter 13, with a principal office in Montpelier, County of Washington, State
of Vermont, ("Mortgagee"), the receipt of which is hereby acknowledged, do
hereby GIVE, GRANT, BARGAIN, SELL AND CONVEY unto the Mortgagee, its successors
and assigns forever, the following described premises situated in West Windsor,
in the County of Windsor and State of Vermont, viz:
Being all those same lands and premises described in Schedule A
attached hereto and made a part hereof as if set forth at length and in
full herein.
TO HAVE AND TO HOLD such property unto Mortgagee and Mortgagee's successors
and assigns forever, together with all improvements now or hereafter erected on
the property, and all easements, rights, appurtenances, rents, royalties,
interests, water, water rights, and all fixtures now or hereafter attached to
the property, all of which, including replacements and additions thereto, shall
be deemed to be and remain a part of the property covered by this Mortgage, and
all of the foregoing, together with said property, are all hereafter
collectively referred to as the "Property";
And further, the said Mortgagor, for itself and its successors and assigns,
does covenant with the said Mortgagee, its successors and assigns, that until
the ensealing of these presents it is the sole owner of the premises above
described and has good right and title to convey the same in the manner
aforesaid; and that it is FREE FROM EVERY ENCUMBRANCE, except as aforesaid, and
it does hereby engage to WARRANT AND DEFEND the same against all lawful claims
whatsoever, except as aforesaid.
<PAGE>
<PAGE>
THE CONDITION OF THIS DEED is that if the said Mortgagor or its successors
and assigns shall well and truly pay or cause to be paid to VERMONT ECONOMIC
DEVELOPMENT AUTHORITY, its successors or assigns, the principal sum of Four
Hundred Thousand Dollars ($400,000.00), as specified in one note in that amount
of even date, the terms of which are herein incorporated by reference, and any
renewal, substitution or replacements thereof, together with accrued interest
and any other amounts required to be paid pursuant to the terms thereof ("the
Note"), and to secure to Mortgagee the full and faithful payment and performance
of each and all of the following when due:
(a) The repayment of all amounts advanced by Mortgagee to Mortgagor,
whether now outstanding or hereafter arising, and whether absolute or
contingent;
(b) The payment of all other sums, with interest thereon, advanced in
accordance herewith to protect the security of this Mortgage;
(c) The performance of the covenants and agreements of Mortgagor in
this Mortgage;
(d) The performance by Mortgagor of all other present or future
agreements, covenants and contracts between Mortgagor and Mortgagee,
however arising;
(e) Any and all other indebtedness, obligations and loans owed or
guaranteed by Mortgagor to Mortgagee, whether now existing or hereafter
arising, and whether absolute or contingent; and
(f) All attorney's fees and expenses and all fees and expenses of
other experts employed by Mortgagee hereunder.
All of the previously referred to present and future debts, covenants,
contracts and obligations of Mortgagor to Mortgagee are hereafter referred to as
the "Obligations".
And the Mortgagor further COVENANTS AND AGREES that:
1. Mortgagor shall promptly pay when due the principal of and interest
on the Note, and the indebtedness evidenced by the Obligations, together
with any prepayment and late charges as provided in the Obligations, and
shall fully and promptly perform when due all of Mortgagor's other duties
under the Obligations.
2. Mortgagor shall keep the buildings and improvements now or
hereafter erected on the Property insured by fire and extended coverage
insurance policies issued by insurance companies authorized to do business
in the State of Vermont in an amount approved by Mortgagee, with Mortgagee
named as Mortgagee under a standard mortgage clause providing for payment
to Mortgagee in the event of loss despite any defenses insurer may have
against Mortgagor and providing for cancellation or non-renewal of the
policy only upon ten days' prior written notice to Mortgagee. Insurers are
authorized to make payment of loss directly to Mortgagee, and Mortgagor
shall pay all insurance premiums on said policies. In the event of loss,
the Mortgagor shall
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<PAGE>
immediately give notice by mail to the Mortgagee which may make proof of loss if
not promptly made by the Mortgagor.
3. Mortgagor shall pay all land lease rental, all local, municipal,
county, state and federal taxes and assessments, water rents, sewage
charges and other governmental or municipal charges or assessments levied
upon the Property or upon the interests of the Mortgagee in the Property,
and in the event of default thereof, the Mortgagee may (but without
obligation to do so) pay the same and any insurance premiums due under
paragraph 2 hereof, and the same, when so paid by the Mortgagee, shall,
with interest at the rate of 10% per annum, be immediately due and payable
or, at the sole option of the Mortgagee, be added to the principal of the
Note.
4. Mortgagor shall not convey or attempt to convey any equitable,
legal or other interests in the Property encumbered by this Mortgage,
except a prior and senior mortgage heretofore granted by Mortgage and
Security Agreement dated February 23, 1994, to Fleet Bank-NH, which appears
of record in Book 50, at pages 178-202 of the Town of West Windsor Land
Records.
5. No sale of the Property and no forbearance on the part of the
Mortgagee and no extension given by the Mortgagee of the time for the
payment of the indebtedness hereby secured shall operate to release,
discharge, modify, change or affect the original liability of the Mortgagor
in whole or in part.
6. Mortgagor shall not suffer liens superior to the lien hereby
created to attach to or be enforced against the Property premises or any
part thereof, except that referred to above in paragraph 4 hereof, and will
keep said premises in as good repair, order and condition as they now are
or hereafter may be put into and will not commit nor permit any strip or
waste of the Property or any part thereof, reasonable use and wear
excepted.
7. The Mortgagee may, at its sole option, advance and pay any sums of
money that in its judgment may be necessary in order that this Mortgage
shall at all times be a prior mortgage upon the Property, except the prior
and senior mortgage interest conveyed to Fleet Bank-NH, and any and all
sums of money so advanced shall, with interest at the rate of 10% per
annum, be immediately due and payable, or, at the sole option of the
Mortgagee, be added to the principal indebtedness secured by this Mortgage.
8. The Mortgagor will comply with the provisions of a Loan Agreement
entered into between the Mortgagor and Mortgagee herein dated of even date
herewith, the provisions of which are incorporated herein by reference, and
with the terms of any agreement, mortgage note or Mortgage and Security
Agreement entered into between the Mortgagor and Fleet Bank-NH.
9. If there shall be a default in the payment of any installment of
principal or interest of the Note, or if there be a default in the due
observance or performance of any other covenant, condition or agreement
contained in this Mortgage or the Loan Agreement dated of even date
herewith, and such default continues for more than twenty (20) days after
the mailing of the notice thereof by the Mortgagee to the Mortgagor,
addressed to Susan D. Plausteiner, President, Snowdance Hotel Company,
General Partner, Ascutney Mountain Resort Hotel, L.P., P.O. Box 699,
Brownsville, VT 05037, or to such other address as Mortgagor may request
in writing, then the entire unpaid principal balance of the Note secured
hereby and accrued interest thereon and any other amounts provided for
herein shall at once become due and payable without further notice, at the
option of the Mortgagee. In
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<PAGE>
the event of such acceleration, the Mortgagee may immediately start
proceedings to protect its interest. If the Mortgagor defaults, it hereby
agrees to pay all the reasonable costs and charges of any such proceeding
including, but not limited to foreclosure proceedings, together with
Mortgagee's reasonable attorney's fees in excess of 2% of the amount of
this Mortgage, if applicable.
10. Mortgagor hereby assigns to Mortgagee the rents of the Property
and all profits derived from any and all uses of the Property, including
but not limited to those derived from business and business conducted
thereon, provided that Mortgagor shall, prior to acceleration under
paragraph 9 hereof, or abandonment of the Property, have the right to
collect and retain such rents and profits as they become due and payable.
Upon acceleration of the Note or any other Obligation or abandonment of the
Property, Mortgagee in person, by agent, or by judicially appointed
receiver, shall be entitled to enter upon, take possession of and manage
the Property and to lease the Property or any part thereof, and to collect
the said rents and profits of the Property, including those past due. All
rents and profits collected by Mortgagee or the receiver shall be applied
first to payment of the cost of management of the Property and collection
of rents and profits, including but not limited to reasonable receiver's
fees, premiums on receiver's bonds and reasonable attorney's fees, and then
to the sum secured by this Mortgage. Mortgagee and the receiver shall be
liable to account only for those rents and profits actually received;
Mortgagor hereby consents to the appointment of such receiver.
11. This Mortgage includes a power of sale in accordance with 12
V.S.A. 'SS' 4531 et seq.
NOW THEREFORE, if the Mortgagor shall well and truly pay all amounts as
specified hereunder and as above provided according to the tenor and effect of
this instrument and shall faithfully perform all the other conditions and
covenants contained in this Mortgage and in the Note and in the Loan Agreement
dated May __, 1994, then this Mortgage shall be void; otherwise the same shall
remain in full force and virtue in law.
IN WITNESS WHEREOF, the said Mortgagor, ASCUTNEY MOUNTAIN RESORT HOTEL,
L.P., has caused its name to be hereunto subscribed and its seal hereto affixed
by its President and Duly Authorized Agent, this ___ day of May, 1994.
ASCUTNEY MOUNTAIN RESORT
HOTEL, L.P.
By: SNOWDANCE HOTEL COMPANY,
ITS GENERAL PARTNER
__________________________________ By: __________________________________
Witness President and Duly
Authorized Agent of
Snowdance Hotel Company
__________________________________
Witness
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<PAGE>
<PAGE>
STATE OF VERMONT
WINDSOR COUNTY, SS.
At ________________________ in said County this ______ day of May, 1994,
personally appeared Susan D. Plausteiner, President and Duly Authorized Agent of
Snowdance Hotel Company, General Partner of Ascutney Mountain Resort Hotel,
L.P., and she acknowledged the foregoing instrument by her subscribed to be her
free act and deed, and the free act and deed of Ascutney Mountain Resort Hotel,
L.P.
Before me, ______________________________
Notary Public
DISCHARGE
Vermont Economic Development Authority, by its duly authorized agent,
hereby acknowledges satisfaction of the Mortgage Deed within, and the same is
discharged at ___________________, on ______________________, A.D., 19___.
__________________________________ __________________________________
Witness
__________________________________ __________________________________
Witness
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SCHEDULE A
Legal Description - Hotel
It being all and the same lands and premises with all rights appurtenant
thereto conveyed by virtue of a Trustee's Deed dated September 1, 1993 from John
R. Canney, III, Trustee to Ascutney Mountain Resort Hotel, L.P., recorded in
Book 49 at Pages 92-102 of the West Windsor Land Records and described in
particular as follows:
The following real property, together with any and all easements, licenses,
rights and interest therein or appurtenant thereto (including, without
limitation, the easements, licenses, rights and interests described
hereinbelow), located in the Town of West Windsor, County of Windsor, State of
Vermont:
The parcel shown as "Phase I - Mt. Ascutney Assoc. Realty Co., Inc."
on a survey dated April 21, 1988, revised April 23, 1988, and May 10, 1988,
prepared by Farnsworth Surveys of Brownsville, Vermont entitled "Land of
Mt. Ascutney Associates, Brownsville, Vermont" comprising 2 sheets, being
Drawing No. 88-737 and Drawing No. 88-737A, a mylar thereof recorded on
Pages 176-177 of the West Windsor Map Rack, together with buildings and
improvements thereon situated, and further being described as the property
depicted on a survey dated December 7, 1984, revised December 13, 1984,
prepared by Farnsworth Surveys of Brownsville, Vermont, Robert W.
Farnsworth, Registered Land Surveyor, entitled "Property Survey for Mt.
Ascutney Associates - Mt. Ascutney Ski Area - Phase I (Built-Up Area) -
Brownsville, West Windsor, Vermont", Drawing No. 84-455-B, a mylar thereof
recorded at Page 135 of the West Windsor Map Rack, comprising two parcels
of land containing 25.9 acres, more or less (Site "A") and 3.2 acres, more
or less (Site "B"), together with that portion of Village Road, so-called,
situated between Sites "A" and "B" containing .7 acre, more or less,
totalling 29.8 acres, more or less, formerly owned by Mt. Ascutney
Associates Realty Company, Inc. by virtue of a Warranty Deed dated December
17, 1984 from Mt. Ascutney Associates, recorded in Book 29 at Pages 253-258
of the West Windsor Land Records.
Reference may also be made to a Termination of Declaration of Mt. Ascutney
Hotel Condominium dated January 12, 1994, recorded in Book 50 at Pages 35-36 of
the West Windsor Land Records, wherein the Declaration of Mt. Ascutney Hotel
Condominium dated December 17, 1984, recorded in Book 29 at Pages 282-318 of the
West Windsor Land Records was terminated.
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SECURITY AGREEMENT
THIS AGREEMENT made this 6th day of May, 1994, under the laws of the State
of Vermont, between Ascutney Mountain Resort Hotel, L.P. ("Debtor"), whose
mailing address is P. O. Box 699, Brownsville, VT 05037, and Vermont Economic
Development Authority ("Secured Party"), whose address is 56 East State Street,
Montpelier, Vermont;
W I T N E S S E T H
1. To secure the payment of an indebtedness in the amount of $400,000.00 as
evidenced by a note in the principal amount of $400,000.00 with interest at five
and five-tenths percent (5.5%) per annum for a term of ten (10) years (the
"Note"), and also to secure any other indebtedness or liability of the Debtor to
the Secured Party, direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising, including all future advances or loans
which may be made at the option of the Secured Party ("Obligations"), Debtor
hereby grants and conveys to the Secured Party a security interest in, and
mortgages to the Secured Party,
(a) the property described in the schedule herein ("collateral"),
which collateral the Debtor represents will be used primarily in business;
(b) all property, goods and chattels of the same classes as those
scheduled, acquired by the Debtor subsequent to the execution of this
Agreement and prior to its termination;
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(c) all proceeds, if any;
(d) all increases, substitutions, replacements, additions and
accessions thereto.
2. DEBTOR WARRANTS, COVENANTS AND AGREES AS FOLLOWS:
(a) Payment. To pay and perform all of the Obligations secured by this
Agreement according to their terms;
(b) Defend Title. To defend the title to the collateral against all
persons and against all claims and demands whatsoever, which collateral is
lawfully owned by the Debtor and is now free and clear of all liens,
security interests, claims, charges, encumbrances, taxes and assessments
except as may be set forth in the schedule;
(c) Assurance of Title. On demand of the secured party to:
i. furnish further assurance of title;
ii. execute any written agreement or do any other acts necessary
to effectuate the purposes and provisions of this Agreement;
iii. execute any instrument or statement required by law or
otherwise in order to perfect, continue or terminate the security
interest of the Secured Party in the collateral; and
iv. pay all costs of filing in connection therewith;
(d) Possession. To retain possession of the collateral during the
existence of this Agreement and not to sell, exchange, assign, loan,
deliver, lease, mortgage or otherwise dispose of same without the written
consent of the Secured Party except as may be set forth in the schedule;
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(e) Location. To keep the collateral at the location identified as
Route 44, Brownsville, VT 05037, and not to remove same (except in the
usual course of business for temporary periods) without the prior written
consent of the Secured Party;
(f) Liens. To keep the collateral free and clear of all liens,
charges, encumbrances, taxes and assessments, except the prior lien of
Fleet Bank-NH in the principal amount of $1,250,000, or as expressly agreed
to in writing by Lender provided, however, that any such lien, charge,
encumbrance or assessment which Debtor is actively contesting or making a
diligent effort to remove shall not be construed to be in violation of this
paragraph (f);
(g) Taxes. To pay, when due, all taxes, assessments and license fees
relating to the collateral provided, however, that any such tax, assessment
or license fee which Debtor is actively contesting, appealing or
challenging pursuant to statute shall not be construed to be in violation
of paragraph (g);
(h) Repairs. To keep the collateral, at Debtor's own cost and expense,
in working order and not to misuse, abuse or waste it or allow it to
deteriorate except for normal wear and tear and to make it and the books of
the Corporation available for inspection by the Secured Party at the
location specified in the schedule at all reasonable times and upon
reasonable notice;
(i) Insurance. To keep the collateral insured against loss by fire and
extended coverage, theft and other hazards as the Secured Party may
require. Policies shall be in such
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form and amounts and with such companies as the Secured Party may designate
and the policies shall be obtained from responsible insurers authorized and
licensed to engage in the insurance business in the State of Vermont.
Certificates of insurance or policies shall name the Secured Party as an
additional insured as the holder of a security interest and shall be
deposited with the Secured Party who is authorized, but under no duty, to
obtain such insurance upon failure of the Debtor to do so. Policies shall
provide that there will be no cancellation or non-renewal without at least
thirty (30) days notice in writing to the Secured Party and that any
defenses the insurer may have against the Debtor will not be defenses
against the Secured Party. Debtor shall give immediate written notice to
the Secured Party and to insurers of loss or damage to the collateral and
shall promptly file proofs of loss with insurers. In the event of default
by Debtor as defined in Section 3(e), Debtor agrees to appoint the Secured
Party the attorney-in-fact for the Debtor in obtaining, adjusting and
canceling any such insurance and endorsing settlement drafts and agrees to
assign to the Secured Party all sums which may become payable under such
insurance, including return premiums and dividends, as additional security
for the indebtedness. At least twenty (20) days before the termination date
of any fire and extended coverage insurance policies covering all secured
property, Debtor shall provide Lender evidence that the policies are being
renewed or new policies will be in force on the termination date;
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(j) Use of Loan Proceeds. To use the proceeds of the loan to pay part
of the purchase price of the machinery and equipment to be purchased with
the proceeds of the loans by Secured Party and Fleet Bank-NH ("Bank"), and
other costs incidental thereto as represented by Debtor in its application;
(k) Change of Address. To immediately notify the Secured Party in
writing of any change in or discontinuance of Debtor's place or places of
business and/or residence;
(1) Affixed to Realty. If the collateral has been attached to or is to
be attached to real estate, to provide a description of the real estate and
the name and address of the record owner as set forth in the schedule
herein; if the said collateral is attached to real estate prior to the
perfection of the security interest granted hereby, Debtor will, on demand
of the Secured Party, furnish the latter with a disclaimer or disclaimers,
signed by all persons having an interest in the real estate, of any
interest in the collateral which is prior to Secured Party's interest.
3. GENERAL PROVISIONS:
(a) Notes. Notes, if any, executed in connection with this Agreement,
are separate instruments and may be negotiated by the Secured Party without
releasing Debtor, the collateral or any guarantor or co-maker. Debtor
consents to any extension of time of payment. If there be more than one
Debtor, guarantor or co-maker of this Agreement or of Notes secured hereby,
the obligation of all shall be primary, joint and several;
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(b) Non-Waiver. Waiver of, or acquiescence in, any default by the
Debtor, or failure of the Secured Party to insist upon strict performance
by the Debtor of any warranties or agreements in this Security Agreement,
shall not constitute a waiver of any subsequent or other default or
failure;
(c) Notices. Notices to either party shall be in writing and shall be
delivered personally or by mail addressed to the party at the address
herein set forth or otherwise designated in writing;
(d) Law Applicable. The Vermont Uniform Commercial Code shall govern
the rights, duties and remedies of the parties, and any provisions herein
declared invalid under any law shall not invalidate this Agreement or any
other provision thereof;
(e) Default. The following shall constitute a default by Debtor:
i. Non-Payment. Failure to pay the principal or interest on the
Note or any indebtedness owed to Secured Party when due;
ii. Violation. Failure by Debtor to comply with or perform any
provision of this Agreement, the Loan Agreement, the Note or mortgage
between Secured Party and Debtor, or loan agreements, notes, mortgages
or security agreements between Bank and Debtor;
iii. Misrepresentation. False or misleading representations or
warranties made by Debtor in this Agreement;
iv. Levy. Subjection of the collateral to levy of execution or
other judicial process;
v. Bankruptcy or Other Insolvency Proceedings. The Debtor making
a general assignment for the benefit of creditors, or filing a
petition in voluntary bankruptcy or seeking a reorganization or
consenting to
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the appointment of a receiver of its property or allowing a petition
against it seeking declaration of bankruptcy or insolvency and the
failure by Debtor to vacate same within 60 days after the filing of
said petition;
vi. Liquidation. Liquidation or termination of the legal
existence of the Debtor or the death of both individual guarantors of
the Debtor's obligations;
vii. Impairment of Security. Any substantial reduction in the
value of the collateral or any act of the Debtor which substantially
imperils the prospect of full performance or satisfaction of the
Debtor's Obligations herein;
(f) Remedies on Default.
i. Acceleration. Upon default by the Debtor as defined hereunder,
and if such default shall remain unremedied for twenty (20) days after
notice of default is mailed to Debtor, then the Secured Party may at
its option declare all of the Obligations of this Agreement and the
Note secured hereby immediately due and payable without further
notice. In the event of default and in the event of acceleration, the
Secured Party shall have all the rights, remedies and privileges with
respect to repossession, retention and sale of the collateral and
disposition of the proceeds as are accorded to a secured party by the
applicable sections of the Uniform Commercial Code respecting
"Default" in effect as of the date of this Security Agreement;
ii. Attorneys' Fees, etc. Upon any default, the Secured Party
may consult an attorney and Debtor agrees to reimburse Secured Party
for all reasonable attorneys' fees and expenses as provided in the
Loan Agreement of even date between the Debtor and the Secured Party
and the legal and other expenses for pursuing, searching for,
receiving, taking, keeping, storing, advertising and selling the
collateral;
iii. Deficiency. The Debtor shall remain liable for any
deficiency resulting from a sale of the collateral and shall pay any
such deficiency forthwith on demand;
iv. Monies Advanced. If the Debtor shall default in the
performance of any of the provisions of this Agreement on the Debtor's
part to be performed, the Secured Party may perform same for the
Debtor's account and any monies expended in so doing shall be
chargeable with interest to the Debtor and added to the indebtedness
secured hereby;
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v. Seizure. Assembling Collateral and Notice of Sale. In
conjunction with, addition to or substitution for those rights, the
Secured Party, at its discretion, may in a commercially reasonable
fashion: (1) enter upon Debtor's premises peaceably by the Secured
Party's own means or with legal process and take possession of the
collateral, or render it unusable, or dispose of the collateral on the
Debtor's premises and the Debtor agrees not to resist or interfere;
(2) require Debtor to assemble the collateral and make it available to
the Secured Party at a place to be designated by the Secured Party,
reasonably convenient to both parties (Debtor agrees that the Secured
Party's address as set forth above is a place reasonably convenient
for such assembling). Unless the collateral is perishable or threatens
to decline speedily in value or is of a type customarily sold on a
recognized market, Secured Party will give Debtor reasonable notice of
the time and place of any public sale thereof or of the time after
which any private sale or any other intended disposition thereof is to
be made. The requirements of reasonable notice will be met if such
notice is mailed, postage prepaid, to the address of the Debtor shown
above, at least three days before the time or sale or disposition;
(g) Assignment. The Secured Party may assign this Agreement and if
assigned the assignee shall be entitled, upon notifying the Debtor, to the
performance of all of Debtor's Obligations and agreements hereunder and the
assignee shall be entitled to all of the rights and remedies of the Secured
Party hereunder. Debtor will not assert against the assignee any claims or
defenses which the Debtor may have against the Secured Party. The Debtor
shall not assign this Agreement without the written consent of Secured
Party;
(h) Financing Statement. The Secured Party is hereby authorized to
file a Financing Statement;
(i) Captions. The Captions are inserted only as a matter of
convenience and for reference and in no way
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define, limit or describe the scope of this Agreement nor the intent of any
provision thereof.
(j) Binding and Benefit. The terms, warranties and agreements herein
contained shall bind and inure to the benefit of the respective parties
hereto, and their respective legal representatives, successors and assigns.
(k) Miscellaneous. The gender and number used in this Agreement are
used as a reference term only and shall apply with the same effect whether
the parties are of the masculine or feminine gender, corporate or other
form, and the singular shall likewise include the plural. This Agreement
shall be construed pursuant to the laws of the State of Vermont.
IN WITNESS WHEREOF, the Parties have respectively signed these presents the
day and year first above written.
SECURED PARTY: VERMONT ECONOMIC DEVELOPMENT
AUTHORITY
By: /s/ PAUL S. DENTON
______________________________________
Paul S. Denton, Manager
DEBTOR: ASCUTNEY MOUNTAIN RESORT HOTEL,
L.P., by its General Partner,
Snowdance Hotel Company
By:
______________________________________
President and Duly
Authorized Agent of
Snowdance Hotel Company
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SCHEDULE A TO SECURITY AGREEMENT
Ascutney Mountain Resort Hotel, L.P., Debtor
Vermont Economic Development Authority, Secured Party
This Security Agreement includes all right, title, estate and interest of
the Debtor in, to and under all of the following described property, whether now
owned by or owing to, or hereafter acquired by or arising in favor of, Debtor,
wherever located:
All fixtures as defined in the Uniform Commercial Code for the State
of Vermont (the "Code") in which Debtor now or hereafter has any interest,
to the extent of that interest, including, without limitation, all of the
fixtures, systems, machinery, apparatus, equipment and fittings of every
kind and nature whatsoever and all appurtenances and additions thereto and
substitutions or replacements thereof, now or hereafter attached or affixed
to or constituting a part of, or located in or upon, the Debtor's lands and
premises located on Route 44 in West Windsor, Vermont, including, without
limitation, all heating, electrical, mechanical, lighting, lifting,
plumbing, ventilating, air conditioning and air cooling, refrigerating,
incinerating, power, loading and unloading systems or apparatus, signs,
escalators, elevators, boilers, communication systems or apparatus,
switchboards, sprinkler and other fire prevention and extinguishing
fixtures, systems, machinery, apparatus and equipment, and all engines,
motors, turbines, dynamos, machinery, pipes, pumps, tanks, conduits and
ducts constituting a part of any of the foregoing;
All equipment (as defined in the Code) in which Debtor now or
hereafter has any interest, to the extent of that interest, including, but
not limited to, machinery, tools, office machines and equipment, computers
and appliances;
All inventory (as defined in the Code) in which Debtor now or
hereafter has any interest, to the extent of that interest, including,
without limitation, all inventory, merchandise, goods and other personal
property which are held by or on behalf of the Debtor for sale or lease or
are furnished or are to be furnished under a contract of service or which
constitute raw materials, work in process or materials used or consumed or
to be used or consumed in the Debtor's business, or the processing,
packaging, promotion, delivery or shipping of the same, and all finished
goods;
All other goods and personal property in which the Debtor has any
interest, to the extent of that interest, whether now or hereafter owned or
existing, leased, consigned by or to or acquired by Debtor, and wherever
located and miscellaneous property of whatsoever nature which are now or
may from time to time be incorporated in or
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installed in or attached to or otherwise made part of or used in connection
with the Debtor's lands and premises located on Route 44, West Windsor,
Vermont;
All accounts and accounts receivable (as defined in the Code) in which
the Debtor now or hereafter has any interest, to the extent of that
interest, including any right of Borrower to payment for goods sold or
leased or for services rendered; all contract rights (as defined in the
Code) in which the Debtor now or hereafter has any interest; all general
intangibles (as defined in the Code) in which the Debtor now or hereafter
has any interest, to the extent of that interest;
All proceeds and products of the foregoing, including, without
limitation, (i) proceeds resulting from voluntary or involuntary
dispositions thereof and including, but not limited to, all property of any
type (including without limitation all accounts, chattel paper, deposit
accounts, instruments, equipment, inventory, consumer goods, farm products,
documents and general intangibles) that is acquired with any cash proceeds,
and (ii) all guarantees, insurance and rights against sureties Debtor may
have in connection therewith and all proceeds and products relating thereto
or therefrom, and all Debtor's right, title and interest in and to
additions, accessions, replacements and substitutions to and for the
foregoing, and all documents, ledger sheets and files of Debtor relating
thereto.
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SECURITY AGREEMENT
THIS AGREEMENT made this 6th day of May, 1994, under the laws of the State
of Vermont, between Ascutney Mountain Resort, L.P. ("Debtor"), whose mailing
address is P. O. Box 699, Brownsville, VT 05037, and Vermont Economic
Development Authority ("Secured Party"), whose address is 56 East State Street,
Montpelier, Vermont;
W I T N E S S E T H
1. To secure the payment of an indebtedness in the amount of $400,000.00 as
evidenced by a note in the principal amount of $400,000.00 with interest at
five and five-tenths percent (5.5%) per annum for a term of ten (10) years (the
"Note"), and also to secure any other indebtedness or liability of the Debtor to
the Secured Party, direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising, including all future advances or loans
which may be made at the option of the Secured Party ("Obligations"), Debtor
hereby grants and conveys to the Secured Party a security interest in, and
mortgages to the Secured Party,
(a) the property described in the schedule herein ("collateral"),
which collateral the Debtor represents will be used primarily in business;
(b) all property, goods and chattels of the same classes as those
scheduled, acquired by the Debtor subsequent to the execution of this
Agreement and prior to its termination;
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(c) all proceeds, if any;
(d) all increases, substitutions, replacements, additions and
accessions thereto.
2. DEBTOR WARRANTS, COVENANTS AND AGREES AS FOLLOWS:
(a) Payment. To pay and perform all of the Obligations secured by this
Agreement according to their terms;
(b) Defend Title. To defend the title to the collateral against all
persons and against all claims and demands whatsoever, which collateral is
lawfully owned by the Debtor and is now free and clear of all liens,
security interests, claims, charges, encumbrances, taxes and assessments
except as may be set forth in the schedule;
(c) Assurance of Title. On demand of the secured party to:
i. furnish further assurance of title;
ii. execute any written agreement or do any other acts necessary
to effectuate the purposes and provisions of this Agreement;
iii. execute any instrument or statement required by law or
otherwise in order to perfect, continue or terminate the security
interest of the Secured Party in the collateral; and
iv. pay all costs of filing in connection therewith;
(d) Possession. To retain possession of the collateral during the
existence of this Agreement and not to sell, exchange, assign, loan,
deliver, lease, mortgage or otherwise dispose of same without the written
consent of the Secured Party except as may be set forth in the schedule;
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(e) Location. To keep the collateral at the location identified as
Route 44, Brownsville, VT 05037, and not to remove same (except in the
usual course of business for temporary periods) without the prior written
consent of the Secured Party;
(f) Liens. To keep the collateral free and clear of all liens,
charges, encumbrances, taxes and assessments, except the prior lien of
Fleet Bank-NH in the principal amount of $1,250,000, or as expressly agreed
to in writing by Lender provided, however, that any such lien, charge,
encumbrance or assessment which Debtor is actively contesting or making a
diligent effort to remove shall not be construed to be in violation of this
paragraph (f);
(g) Taxes. To pay, when due, all taxes, assessments and license fees
relating to the collateral provided, however, that any such tax, assessment
or license fee which Debtor is actively contesting, appealing or
challenging pursuant to statute shall not be construed to be in violation
of paragraph (g);
(h) Repairs. To keep the collateral, at Debtor's own cost and expense,
in working order and not to misuse, abuse or waste it or allow it to
deteriorate except for normal wear and tear and to make it and the books of
the Corporation available for inspection by the Secured Party at the
location specified in the schedule at all reasonable times and upon
reasonable notice;
(i) Insurance. To keep the collateral insured against loss by fire and
extended coverage, theft and other hazards as the Secured Party may
require. Policies shall be in such
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form and amounts and with such companies as the Secured Party may designate
and the policies shall be obtained from responsible insurers authorized and
licensed to engage in the insurance business in the State of Vermont.
Certificates of insurance or policies shall name the Secured Party as an
additional insured as the holder of a security interest and shall be
deposited with the Secured Party who is authorized, but under no duty, to
obtain such insurance upon failure of the Debtor to do so. Policies shall
provide that there will be no cancellation or non-renewal without at least
thirty (30) days notice in writing to the Secured Party and that any
defenses the insurer may have against the Debtor will not be defenses
against the Secured Party. Debtor shall give immediate written notice to
the Secured Party and to insurers of loss or damage to the collateral and
shall promptly file proofs of loss with insurers. In the event of default
by Debtor as defined in Section 3(e), Debtor agrees to appoint the Secured
Party the attorney-in-fact for the Debtor in obtaining, adjusting and
canceling any such insurance and endorsing settlement drafts and agrees to
assign to the Secured Party all sums which may become payable under such
insurance, including return premiums and dividends, as additional security
for the indebtedness. At least twenty (20) days before the termination date
of any fire and extended coverage insurance policies covering all secured
property, Debtor shall provide Lender evidence that the policies are being
renewed or new policies will be in force on the termination date;
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(j) Use of Loan Proceeds. To use the proceeds of the loan to pay part
of the purchase price of the machinery and equipment to be purchased with
the proceeds of the loans by Secured Party and Fleet Bank-NH ("Bank"), and
other costs incidental thereto as represented by Debtor in its application;
(k) Change of Address. To immediately notify the Secured Party in
writing of any change in or discontinuance of Debtor's place or places of
business and/or residence;
(1) Affixed to Realty. If the collateral has been attached to or is to
be attached to real estate, to provide a description of the real estate and
the name and address of the record owner as set forth in the schedule
herein; if the said collateral is attached to real estate prior to the
perfection of the security interest granted hereby, Debtor will, on demand
of the Secured Party, furnish the latter with a disclaimer or disclaimers,
signed by all persons having an interest in the real estate, of any
interest in the collateral which is prior to Secured Party's interest.
3. GENERAL PROVISIONS:
(a) Notes. Notes, if any, executed in connection with this Agreement,
are separate instruments and may be negotiated by the Secured Party without
releasing Debtor, the collateral or any guarantor or co-maker. Debtor
consents to any extension of time of payment. If there be more than one
Debtor, guarantor or co-maker of this Agreement or of Notes secured hereby,
the obligation of all shall be primary, joint and several;
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(b) Non-Waiver. Waiver of, or acquiescence in, any default by the
Debtor, or failure of the Secured Party to insist upon strict performance
by the Debtor of any warranties or agreements in this Security Agreement,
shall not constitute a waiver of any subsequent or other default or
failure;
(c) Notices. Notices to either party shall be in writing and shall be
delivered personally or by mail addressed to the party at the address
herein set forth or otherwise designated in writing;
(d) Law Applicable. The Vermont Uniform Commercial Code shall govern
the rights, duties and remedies of the parties, and any provisions herein
declared invalid under any law shall not invalidate this Agreement or any
other provision thereof;
(e) Default. The following shall constitute a default by Debtor:
i. Non-Payment. Failure to pay the principal or interest on the
Note or any indebtedness owed to Secured Party when due;
ii. Violation. Failure by Debtor to comply with or perform any
provision of this Agreement, the Loan Agreement, the Note or mortgage
between Secured Party and Debtor, or loan agreements, notes, mortgages
or security agreements between Bank and Debtor;
iii. Misrepresentation. False or misleading representations or
warranties made by Debtor in this Agreement;
iv. Levy. Subjection of the collateral to levy of execution or
other judicial process;
v. Bankruptcy or Other Insolvency Proceedings. The Debtor making
a general assignment for the benefit of creditors, or filing a
petition in voluntary bankruptcy or seeking a reorganization or
consenting to
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the appointment of a receiver of its property or allowing a petition
against it seeking declaration of bankruptcy or insolvency and the
failure by Debtor to vacate same within 60 days after the filing of
said petition;
vi. Liquidation. Liquidation or termination of the legal
existence of the Debtor or the death of both individual guarantors of
the Debtor's obligations;
vii. Impairment of Security. Any substantial reduction in the
value of the collateral or any act of the Debtor which substantially
imperils the prospect of full performance or satisfaction of the
Debtor's Obligations herein;
(f) Remedies on Default.
i. Acceleration. Upon default by the Debtor as defined hereunder,
and if such default shall remain unremedied for twenty (20) days after
notice of default is mailed to Debtor, then the Secured Party may at
its option declare all of the Obligations of this Agreement and the
Note secured hereby immediately due and payable without further
notice. In the event of default and in the event of acceleration, the
Secured Party shall have all the rights, remedies and privileges with
respect to repossession, retention and sale of the collateral and
disposition of the proceeds as are accorded to a secured party by the
applicable sections of the Uniform Commercial Code respecting
"Default" in effect as of the date of this Security Agreement;
ii. Attorneys' Fees, etc. Upon any default, the Secured Party
may consult an attorney and Debtor agrees to reimburse Secured Party
for all reasonable attorneys' fees and expenses as provided in the
Loan Agreement of even date between the Debtor and the Secured Party
and the legal and other expenses for pursuing, searching for,
receiving, taking, keeping, storing, advertising and selling the
collateral;
iii. Deficiency. The Debtor shall remain liable for any
deficiency resulting from a sale of the collateral and shall pay any
such deficiency forthwith on demand;
iv. Monies Advanced. If the Debtor shall default in the
performance of any of the provisions of this Agreement on the Debtor's
part to be performed, the Secured Party may perform same for the
Debtor's account and any monies expended in so doing shall be
chargeable with interest to the Debtor and added to the indebtedness
secured hereby;
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<PAGE>
<PAGE>
v. Seizure. Assembling Collateral and Notice of Sale. In
conjunction with, addition to or substitution for those rights, the
Secured Party, at its discretion, may in a commercially reasonable
fashion: (1) enter upon Debtor's premises peaceably by the Secured
Party's own means or with legal process and take possession of the
collateral, or render it unusable, or dispose of the collateral on the
Debtor's premises and the Debtor agrees not to resist or interfere;
(2) require Debtor to assemble the collateral and make it available to
the Secured Party at a place to be designated by the Secured Party,
reasonably convenient to both parties (Debtor agrees that the Secured
Party's address as set forth above is a place reasonably convenient
for such assembling). Unless the collateral is perishable or threatens
to decline speedily in value or is of a type customarily sold on a
recognized market, Secured Party will give Debtor reasonable notice of
the time and place of any public sale thereof or of the time after
which any private sale or any other intended disposition thereof is to
be made. The requirements of reasonable notice will be met if such
notice is mailed, postage prepaid, to the address of the Debtor shown
above, at least three days before the time or sale or disposition;
(g) Assignment. The Secured Party may assign this Agreement and if
assigned the assignee shall be entitled, upon notifying the Debtor, to the
performance of all of Debtor's Obligations and agreements hereunder and the
assignee shall be entitled to all of the rights and remedies of the Secured
Party hereunder. Debtor will not assert against the assignee any claims or
defenses which the Debtor may have against the Secured Party. The Debtor
shall not assign this Agreement without the written consent of Secured
Party;
(h) Financing Statement. The Secured Party is hereby authorized to
file a Financing Statement;
(i) Captions. The Captions are inserted only as a matter of
convenience and for reference and in no way
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<PAGE>
define, limit or describe the scope of this Agreement nor the intent of any
provision thereof.
(j) Binding and Benefit. The terms, warranties and agreements herein
contained shall bind and inure to the benefit of the respective parties
hereto, and their respective legal representatives, successors and assigns.
(k) Miscellaneous. The gender and number used in this Agreement are
used as a reference term only and shall apply with the same effect whether
the parties are of the masculine or feminine gender, corporate or other
form, and the singular shall likewise include the plural. This Agreement
shall be construed pursuant to the laws of the State of Vermont.
IN WITNESS WHEREOF, the Parties have respectively signed these presents the
day and year first above written.
SECURED PARTY: VERMONT ECONOMIC DEVELOPMENT
AUTHORITY
By: /s/ PAUL S. DENTON
______________________________________
Paul S. Denton, Manager
DEBTOR: ASCUTNEY MOUNTAIN RESORT,
L.P., by its General Partner,
Snowdance Ski Company
By:
______________________________________
President and Duly
Authorized Agent of
Snowdance Ski Company
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<PAGE>
<PAGE>
SCHEDULE A TO SECURITY AGREEMENT
Ascutney Mountain Resort, L.P., Debtor
Vermont Economic Development Authority, Secured Party
This Security Agreement includes all right, title, estate and interest of
the Debtor in, to and under all of the following described property, whether now
owned by or owing to, or hereafter acquired by or arising in favor of, Debtor,
wherever located:
All fixtures as defined in the Uniform Commercial Code for the State
of Vermont (the "Code") in which Debtor now or hereafter has any interest,
to the extent of that interest, including, without limitation, all of the
fixtures, systems, machinery, apparatus, equipment and fittings of every
kind and nature whatsoever and all appurtenances and additions thereto and
substitutions or replacements thereof, now or hereafter attached or affixed
to or constituting a part of, or located in or upon, the Debtor's lands and
premises located on Route 44 in West Windsor, Vermont, including, without
limitation, all heating, electrical, mechanical, lighting, lifting,
plumbing, ventilating, air conditioning and air cooling, refrigerating,
incinerating, power, loading and unloading systems or apparatus, signs,
escalators, elevators, boilers, communication systems or apparatus,
switchboards, sprinkler and other fire prevention and extinguishing
fixtures, systems, machinery, apparatus and equipment, and all engines,
motors, turbines, dynamos, machinery, pipes, pumps, tanks, conduits and
ducts constituting a part of any of the foregoing;
All equipment (as defined in the Code) in which Debtor now or
hereafter has any interest, to the extent of that interest, including, but
not limited to, machinery, tools, office machines and equipment, computers
and appliances;
All inventory (as defined in the Code) in which Debtor now or
hereafter has any interest, to the extent of that interest, including,
without limitation, all inventory, merchandise, goods and other personal
property which are held by or on behalf of the Debtor for sale or lease or
are furnished or are to be furnished under a contract of service or which
constitute raw materials, work in process or materials used or consumed or
to be used or consumed in the Debtor's business, or the processing,
packaging, promotion, delivery or shipping of the same, and all finished
goods;
All other goods and personal property in which the Debtor has any
interest, to the extent of that interest, whether now or hereafter owned or
existing, leased, consigned by or to or acquired by Debtor, and wherever
located and miscellaneous property of whatsoever nature which are now or
may from time to time be incorporated in or
<PAGE>
<PAGE>
installed in or attached to or otherwise made part of or used in connection
with the Debtor's lands and premises located on Route 44, West Windsor,
Vermont;
All accounts and accounts receivable (as defined in the Code) in which
the Debtor now or hereafter has any interest, to the extent of that
interest, including any right of Borrower to payment for goods sold or
leased or for services rendered; all contract rights (as defined in the
Code) in which the Debtor now or hereafter has any interest; all general
intangibles (as defined in the Code) in which the Debtor now or hereafter
has any interest, to the extent of that interest;
All proceeds and products of the foregoing, including, without
limitation, (i) proceeds resulting from voluntary or involuntary
dispositions thereof and including, but not limited to, all property of any
type (including without limitation all accounts, chattel paper, deposit
accounts, instruments, equipment, inventory, consumer goods, farm products,
documents and general intangibles) that is acquired with any cash proceeds,
and (ii) all guarantees, insurance and rights against sureties Debtor may
have in connection therewith and all proceeds and products relating thereto
or therefrom, and all Debtor's right, title and interest in and to
additions, accessions, replacements and substitutions to and for the
foregoing, and all documents, ledger sheets and files of Debtor relating
thereto.
<PAGE>
<PAGE>
GUARANTY
THIS GUARANTY given by the undersigned, Susan D. Plausteiner and Steven H.
Plausteiner ("Guarantors"), to induce Vermont Economic Development Authority
("Lender") to extend credit to or otherwise become the creditor of Ascutney
Mountain Resort, L.P. and Ascutney Mountain Resort Hotel, L.P. ("Borrowers").
In consideration of the foregoing, it is agreed:
1. Obligation. The Guarantors jointly and severally guarantee to Lender,
its successors and assigns, the prompt and full payment to the Lender when due
of the principal sum of $400,000.00 as evidenced by the Note of Borrowers dated
of even date herewith in the principal amount of $400,000.00 with interest at
the rate therein specified and a term of ten (10) years (the "Note"), and any
renewal or replacement thereof, which sum shall be due and payable in full ten
(10) years from the date thereof, including all principal, interest, attorney's
fees, costs and expenses of collection and any other charges becoming due under
the terms of said Note and the security instruments executed and delivered as
security for said Note. A copy of the Note is attached hereto as Exhibit A.
2. Term. The joint and several liability of the Guarantors shall continue
until payment is made of every obligation of the Borrowers now due or hereafter
to become due to Lender and until payment is made of any loss or damage incurred
by the Lender with respect to any matter covered by this Guaranty.
<PAGE>
<PAGE>
3. Consent to Lender's Acts. The Guarantors jointly and severally consent,
without affecting the Guarantors' liability to the Lender hereunder, that the
Lender may, without notice to or consent of the Guarantors, upon such terms as
it may deem advisable:
(a) Extend, in whole or in part, by renewal or otherwise, the time of
payment of any indebtedness owing by the Borrowers to the Lender or held by
the Lender as security for any such obligation;
(b) Release, surrender, exchange, modify, impair or extend the period
of duration or the time for performance or payment of any collateral
securing any obligation of the Borrowers to the Lender;
(c) Settle or compromise any claim of the Lender against the Borrowers
or against any other person, firm or corporation whose obligation is held
by the Lender as collateral security for any obligation of the Borrowers to
the Lender.
The Guarantors hereby ratify and affirm any such extension, renewal,
release, surrender, exchange, modification, impairment, settlement or
compromise; and all such actions shall be binding upon the Guarantors who hereby
waive all defenses, counterclaims or offsets which the Guarantors might have by
reason thereof.
4. Waiver. The Guarantors waive:
(a) Notice of presentment, demand for payment or protest of any of the
Borrowers' obligations or the obligation of any person, firm or corporation
held by the Lender as collateral security for the Borrowers' obligation,
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<PAGE>
<PAGE>
acceptance and Notice of Acceptance of this Guaranty by the Lender, and the
Guarantors acknowledge that by the making of the loan to Borrowers the
Lender has accepted this Guaranty and given Notice of Acceptance to the
undersigned;
(b) Notice of the failure of any person, firm or corporation to pay to
the Lender any indebtedness held by the Lender as collateral security for
any obligation of the Borrowers; and
(c) All defenses, offsets and counterclaims which the Guarantors may
at any time have against the Borrowers are waived only to the extent that
they shall not be available to the Guarantors against the Lender.
5. Representations by Guarantors. The Guarantors represent that at the time
of the execution and delivery of this Guaranty nothing exists to impair the
effectiveness of the liability of the Guarantors to the Lender hereunder or the
immediate taking effect of this Guaranty as the sole agreement between the
Guarantors and the Lender with respect to the guaranty of the Borrowers'
obligation to the Lender.
6. Remedies. The Lender may at its option proceed in the first instance
against the Guarantors to collect any obligation covered by this Guaranty,
without first proceeding against the Borrowers or any other person, firm or
corporation and without first resorting to any property at any time held by the
Lender as collateral security.
7. Modifications. The whole of this Guaranty is herein set forth and there
is no verbal or other written agreement and no understanding or custom affecting
the terms hereof. This
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<PAGE>
<PAGE>
Guaranty can be modified only by a written instrument signed by the party to be
charged therewith.
8. Benefit. This Guaranty is delivered and made in and shall be construed
pursuant to the laws of the State of Vermont and is binding upon the Guarantors
and their heirs, executors, administrators and legal representatives, and shall
inure to the benefit of the Lender, its successors and assigns.
IN WITNESS WHEREOF, the Guarantors have executed and delivered the within
Guaranty this _________ day of May, 1994.
- ------------------------------------ -----------------------------------
Witness Susan D. Plausteiner
- ------------------------------------ -----------------------------------
Witness Steven H. Plausteiner
-4-
<PAGE>
<PAGE>
GUARANTY
THIS GUARANTY given by the undersigned, Snowdance Ski Company
("Guarantor"), to induce Vermont Economic Development Authority ("Lender") to
extend credit to or otherwise become the creditor of Ascutney Mountain Resort,
L.P. and Ascutney Mountain Resort Hotel, L.P. ("Borrowers").
In consideration of the foregoing, it is agreed:
1. Obligation. The Guarantor guarantees to Lender, its successors and
assigns, the prompt and full payment to the Lender when due of the principal sum
of $400,000.00 as evidenced by the Note of Borrowers dated of even date herewith
in the principal amount of $400,000.00 with interest at the rate therein
specified and a term of ten (10) years (the "Note"), and any renewal or
replacement thereof, which sum shall be due and payable in full ten (10) years
from the date thereof, including all principal, interest, attorney's fees, costs
and expenses of collection and any other charges becoming due under the terms of
said Note and the security instruments executed and delivered as security for
said Note. A copy of the Note is attached hereto as Exhibit A.
2. Term. The joint and several liability of the Guarantor shall continue
until payment is made of every obligation of the Borrowers now due or hereafter
to become due to Lender and until payment is made of any loss or damage incurred
by the Lender with respect to any matter covered by this Guaranty.
<PAGE>
<PAGE>
3. Consent to Lender's Acts. The Guarantor consents, without affecting the
Guarantor's liability to the Lender hereunder, that the Lender may, without
notice to or consent of the Guarantor, upon such terms as it may deem advisable:
(a) Extend, in whole or in part, by renewal or otherwise, the time of
payment of any indebtedness owing by the Borrowers to the Lender or held by
the Lender as security for any such obligation;
(b) Release, surrender, exchange, modify, impair or extend the period
of duration or the time for performance or payment of any collateral
securing any obligation of the Borrowers to the Lender;
(c) Settle or compromise any claim of the Lender against the Borrowers
or against any other person, firm or corporation whose obligation is held
by the Lender as collateral security for any obligation of the Borrowers to
the Lender.
The Guarantor hereby ratifies and affirms any such extension, renewal,
release, surrender, exchange, modification, impairment, settlement or
compromise; and all such actions shall be binding upon the Guarantor who hereby
waives all defenses, counterclaims or offsets which the Guarantor might have by
reason thereof.
4. Waiver. The Guarantor waives:
(a) Notice of presentment, demand for payment or protest of any of the
Borrowers' obligations or the obligation of any person, firm or corporation
held by the Lender as collateral security for the Borrowers' obligation,
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<PAGE>
<PAGE>
acceptance and Notice of Acceptance of this Guaranty by the Lender, and the
Guarantor acknowledges that by the making of the loan to Borrowers the
Lender has accepted this Guaranty and given Notice of Acceptance to the
undersigned;
(b) Notice of the failure of any person, firm or corporation to pay to
the Lender any indebtedness held by the Lender as collateral security for
any obligation of the Borrowers; and
(c) All defenses, offsets and counterclaims which the Guarantor may at
any time have against the Borrowers are waived only to the extent that
they shall not be available to the Guarantor against the Lender.
5. Representations by Guarantor. The Guarantor represents that at the time
of the execution and delivery of this Guaranty nothing exists to impair the
effectiveness of the liability of the Guarantor to the Lender hereunder or the
immediate taking effect of this Guaranty as the sole agreement between the
Guarantor and the Lender with respect to the guaranty of the Borrowers'
obligation to the Lender.
6. Remedies. The Lender may at its option proceed in the first instance
against the Guarantor to collect any obligation covered by this Guaranty,
without first proceeding against the Borrowers or any other person, firm or
corporation and without first resorting to any property at any time held by the
Lender as collateral security.
7. Modifications. The whole of this Guaranty is herein set forth and there
is no verbal or other written agreement and no understanding or custom affecting
the terms hereof. This
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<PAGE>
<PAGE>
Guaranty can be modified only by a written instrument signed by the party to be
charged therewith.
8. Benefit. This Guaranty is delivered and made in and shall be construed
pursuant to the laws of the State of Vermont and is binding upon the Guarantor
and its successors and legal representatives, and shall inure to the benefit of
Lender, its successors and assigns.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
by its Duly Authorized Agent and delivered this _______ day of May, 1994.
SNOWDANCE SKI COMPANY
________________________________ By: ______________________________
Witness Susan D. Plausteiner,
President and Duly
Authorized Agent
________________________________
Witness
-4-
<PAGE>
<PAGE>
GUARANTY
THIS GUARANTY given by the undersigned, Snowdance Hotel Company
("Guarantor"), to induce Vermont Economic Development Authority ("Lender") to
extend credit to or otherwise become the creditor of Ascutney Mountain Resort,
L.P. and Ascutney Mountain Resort Hotel, L.P. ("Borrowers").
In consideration of the foregoing, it is agreed:
1. Obligation. The Guarantor guarantees to Lender, its successors and
assigns, the prompt and full payment to the Lender when due of the principal sum
of $400,000.00 as evidenced by the Note of Borrowers dated of even date herewith
in the principal amount of $400,000.00 with interest at the rate therein
specified and a term of ten (10) years (the "Note"), and any renewal or
replacement thereof, which sum shall be due and payable in full ten (10) years
from the date thereof, including all principal, interest, attorney's fees,
costs and expenses of collection and any other charges becoming due under the
terms of said Note and the security instruments executed and delivered as
security for said Note. A copy of the Note is attached hereto as Exhibit A.
2. Term. The joint and several liability of the Guarantor shall continue
until payment is made of every obligation of the Borrowers now due or hereafter
to become due to Lender and until payment is made of any loss or damage incurred
by the Lender with respect to any matter covered by this Guaranty.
<PAGE>
<PAGE>
3. Consent to Lender's Acts. The Guarantor consents, without affecting the
Guarantor's liability to the Lender hereunder, that the Lender may, without
notice to or consent of the Guarantor, upon such terms as it may deem advisable:
(a) Extend, in whole or in part, by renewal or otherwise, the time of
payment of any indebtedness owing by the Borrowers to the Lender or held by
the Lender as security for any such obligation;
(b) Release, surrender, exchange, modify, impair or extend the period of
duration or the time for performance or payment of any collateral securing
any obligation of the Borrowers to the Lender;
(c) Settle or compromise any claim of the Lender against the Borrowers
or against any other person, firm or corporation whose obligation is held
by the Lender as collateral security for any obligation of the Borrowers to
the Lender.
The Guarantor hereby ratifies and affirms any such extension, renewal,
release, surrender, exchange, modification, impairment, settlement or
compromise; and all such actions shall be binding upon the Guarantor who hereby
waives all defenses, counterclaims or offsets which the Guarantor might have by
reason thereof.
4. Waiver. The Guarantor waives:
(a) Notice of presentment, demand for payment or protest of any of the
Borrowers' obligations or the obligation of any person, firm or corporation
held by the Lender as collateral security for the Borrowers' obligation,
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<PAGE>
<PAGE>
acceptance and Notice of Acceptance of this Guaranty by the Lender, and the
Guarantor acknowledges that by the making of the loan to Borrowers the
Lender has accepted this Guaranty and given Notice of Acceptance to the
undersigned;
(b) Notice of the failure of any person, firm or corporation to pay to
the Lender any indebtedness held by the Lender as collateral security for
any obligation of the Borrowers; and
(c) All defenses, offsets and counterclaims which the Guarantor may at
any time have against the Borrowers are waived only to the extent that
they shall not be available to the Guarantor against the Lender.
5. Representations by Guarantor. The Guarantor represents that at the time
of the execution and delivery of this Guaranty nothing exists to impair the
effectiveness of the liability of the Guarantor to the Lender hereunder or the
immediate taking effect of this Guaranty as the sole agreement between the
Guarantor and the Lender with respect to the guaranty of the Borrowers'
obligation to the Lender.
6. Remedies. The Lender may at its option proceed in the first instance
against the Guarantor to collect any obligation covered by this Guaranty,
without first proceeding against the Borrowers or any other person, firm or
corporation and without first resorting to any property at any time held by the
Lender as collateral security.
7. Modifications. The whole of this Guaranty is herein set forth and there
is no verbal or other written agreement and no understanding or custom affecting
the terms hereof. This
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<PAGE>
<PAGE>
Guaranty can be modified only by a written instrument signed by the party to be
charged therewith.
8. Benefit. This Guaranty is delivered and made in and shall be construed
pursuant to the laws of the State of Vermont and is binding upon the Guarantor
and its successors and legal representatives, and shall inure to the benefit of
Lender, its successors and assigns.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
by its Duly Authorized Agent and delivered this _____ day of May, 1994.
SNOWDANCE HOTEL COMPANY
_______________________________ By: _____________________________
Witness Susan D. Plausteiner
President and Duly
Authorized Agent
_______________________________
Witness
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<PAGE>
<PAGE>
SUBORDINATION AGREEMENT
This Agreement of Subordination made this 6th day of May, 1994, between
Vermont Economic Development Authority, a body corporate and politic and a
public instrumentality of the State of Vermont, with its principal place of
business at Montpelier, Vermont ("Lender"), and the Limited and General Partners
("Partners") of Ascutney Mountain Resort, L.P. and Ascutney Mountain Resort
Hotel, L.P. (collectively the "Borrowers").
WHEREAS, the Limited and General Partners of each of the Borrowers are as
follows:
ASCUTNEY MOUNTAIN RESORT, L.P.
Limited Partners:
----------------
Susan D. Plausteiner
Steven H. Plausteiner
General Partner:
---------------
Snowdance Ski Company
ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.
Limited Partners:
----------------
Susan D. Plausteiner
Steven H. Plausteiner
General Partner:
---------------
Snowdance Hotel Company
and;
WHEREAS, the Borrowers have applied to Lender for a loan in the principal
amount of Four Hundred Thousand Dollars ($400,000.00) for a term of ten (10)
years, together with interest at 5.5% per annum (the "Loan"); and
WHEREAS, Lender will only make that loan to the Borrowers if the Partners
will enter into this Subordination Agreement;
<PAGE>
<PAGE>
NOW, THEREFORE, for and in consideration of One Dollar and other good and
valuable consideration paid to the Partners by the Lender, and in order to
induce Lender to loan the sum of Four Hundred Thousand Dollars ($400,000.00) to
Borrowers, the Partners and Lender hereby agree as follows:
1. Subordination
All principal Loan indebtedness and accrued interest thereon owed by the
Borrowers to the Partners, individually or collectively, whether owed now or in
the future, is hereby subordinated to the Loan made by Lender to Borrowers
evidenced by Borrowers' Note dated May 6, 1994 in the principal amount of
$400,000.00 (the "Note").
2. Representation
The Partners represent that they have made Loans to the Borrowers in the
aggregate principal amounts set forth below as of the date of this Agreement:
ASCUTNEY MOUNTAIN RESORT, L.P.*
Limited Partners:
----------------
Susan D. Plausteiner
Steven H. Plausteiner
General Partner:
---------------
Snowdance Ski Company
ASCUTNEY MOUNTAIN RESORT HOTEL, L.P.*
Limited Partners:
----------------
Susan D. Plausteiner
Steven H. Plausteiner
General Partner:
---------------
Snowdance Hotel Company
* In the aggregate, $300,000
2
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<PAGE>
3. Term
The subordination shall continue in force until all principal and interest
on the Note is paid in full.
4. Construction; Benefit
This Agreement shall be binding upon and inure to the benefit of each of
the parties hereto and their legal representatives, successors and assigns, and
shall be governed by and construed in accordance with the laws of the State of
Vermont.
VERMONT ECONOMIC DEVELOPMENT
AUTHORITY
By: /s/ PAUL S. DENTON
______________________________________
Paul S. Denton, Manager
SNOWDANCE SKI COMPANY
By: /s/ SUSAN D. PLAUSTEINER
______________________________________
Its President and Duly
Authorized Agent
SNOWDANCE HOTEL COMPANY
By: /s/ SUSAN D. PLAUSTEINER
______________________________________
Its President and Duly
Authorized Agent
/s/ SUSAN D. PLAUSTEINER
_________________________________________
Susan D. Plausteiner, individually
and as a Limited Partner of
Ascutney Mountain Resort Hotel,
L.P. and Ascutney Mountain Resort,
L.P.
/s/ STEVEN H. PLAUSTEINER
_________________________________________
Steven H. Plausteiner, individually
and as a Limited Partner of
Ascutney Mountain Resort Hotel,
L.P. and Ascutney Mountain Resort,
L.P.
3
<PAGE>
<PAGE>
LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement dated this 3rd of November, 1994, in
consideration of a certain loan extended this same date by the Town of West
Windsor, Vermont (Town of West Windsor) to ASCUTNEY MOUNTAIN RESORT, L.P., a
Delaware limited partnership and ASCUTNEY MOUNTAIN RESORT HOTEL, L.P., a
Delaware limited partnership (together, the Borrower), owner and operator of a
ski resort and related businesses with its principal place of business at Route
44, Brownsville, Vermont hereby agree to the following:
DEFINITIONS
As used in this document, the words and phrases set forth below shall have the
following meanings:
"Agency" means the Vermont Agency of Development and Community Affairs.
"Borrower" means Ascutney Mountain Resort, L.P., a Delaware limited partnership,
and Ascutney Mountain Resort Hotel, L.P., a Delaware limited partnership.
"Collateral" means all real estate of the Borrower, including fixtures attached
thereto, but excluding the condominiums located in the Town of West Windsor,
Vermont.
"Debt" means the $240,000.00 loan which this document secures, any and all
renewals thereof, the indebtedness represented thereby, and any other
indebtedness which is now or may hereafter become due and owed from Borrower to
Town of West Windsor.
"Grant or Grant Agreement" means Grant Agreement #0256/94IG(08) between the Town
of West Windsor and the State of Vermont, Agency of Development and Community
Affairs, a copy of which is attached hereto and incorporated herewith by
reference.
"HUD" means the U.S. Department of Housing and Urban Development.
"Loan Agreement" means this Loan and Security Agreement.
"Permitted Encumbrances" means purchase money security interests given by
Borrower and equipment financing leases entered into by Borrower.
"Project" means the following activities for the benefit of the Borrower or work
on the premises of the Borrower in the Town of West Windsor, Vermont:
1
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<PAGE>
1. Refurbishment and operation of the Ascutney Mountain Resort Hotel;
2. Working capital, with a minimum of $160,000 for advertising and
promotion, a maximum of $60,000 for food and beverage related to conferences and
conventions, and the balance for trail and property maintenance.
All of the above work to be on the premises of Borrower at Route 44,
Brownsville, Vermont.
"Real Property" means the real property described in Appendix 1 to this Loan
Agreement, subject to the Permitted Encumbrances.
"Sale" means the sale, exchange, transfer or other disposition or series of
related sales, exchanges, transfers or dispositions of all or substantially all
of the Real Property, including, without limitation, a sale under foreclosure or
a sale in lieu of or transfer pursuant to condemnation by a public authority;
the term "sale" does not include an assignment or other transfer for security
purposes to the Senior Lenders, nor does it include a sale, assignment or
transfer whether outright or for security purposes, of all or any portion of the
interests of the Borrower.
"Senior Debt" means loan(s) or other financing arrangements for the Project or
other activities of the Borrower on its premises from the Senior Lenders,
including, without limitation, construction, bridge and take-out financing(s),
which indebtedness may be secured by mortgage and security interests in the
Project; the term "Senior Debt" includes, without limitation, any refinancing or
other loan, the proceeds of which are used to repay or discharge existing Senior
Debt; provided however, at no time shall the Borrower incur additional
indebtedness (excluding the Permitted Encumbrances) secured by the Real Property
which, together with outstanding Senior Debt and the Debt then outstanding
exceeds the lesser of $8 million or 80% of the grand list value, after
application of the equalization ratio (i.e., the grand list value divided by the
equalization ratio, currently the resulting quotient is $10,196,445) of the Real
Property determined from time to time as set forth in the tax records of the
Town of West Windsor, Vermont (the "Grand List Value").
"Security Interest" means the interest, including the mortgages, in the Real
Property given to Lender pursuant to this Loan Agreement.
"Senior Lenders" means Fleet Bank, NA, Vermont Economic Development Authority,
and any other financial institution lending money to the Borrower.
"VCDP" means the Vermont Community Development Program.
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TERM OF THE LOAN
This Loan Agreement shall commence as of the date hereof and shall be complete
on June 30, 1996. The Debt shall be evidenced by a Note substantially similar
that set forth in Appendix 2 attached hereto (the Note). The Note term shall be
a 15 year fully amortizing note with an interest rate of 5% per annum and a
balloon payment of the outstanding principal balance due at the end of the year
10. The first payment due February 20, 1995 shall be interest only with interest
accruing from the first take down date. Annual payments of principal and
interest shall be due to the Town of West Windsor on every February 20
thereafter in the amount of Twenty-two Thousand Seven Hundred Seventy-five
Dollars ($22,775.00). Payments under the Note shall be applied first to any
delinquencies and fees, second to interest, and last to principal. There shall
be no prepayment penalty under the Note.
Based on skier days as defined below, an additional principal payment shall be
due to the Town of West Windsor in any year any of the below designated
threshold levels are obtained. The amount of such additional principal payment
shall equal the Principal Acceleration Amount corresponding with the largest
applicable threshold level of skier days attained for such year. An accelerated
principal payment shall be due only in the particular year for which the
threshold level is attained. Accelerated principal payments shall be treated as
prepayments on the Note.
Threshold levels Principal Acceleration Amount
---------------- -----------------------------
80,000 skier days $5,000
90,000 skier days $15,000
100,000 skier days $25,000
Skier days are defined as all full priced adults and junior tickets sold during
any given ski season which runs from approximately November in any year to the
next April 15. The determination of whether accelerated principal payments are
due for any given ski season shall be made no later than April 30 of each year.
The Borrower's computer system will be used to calculate the number of full
priced adult and junior tickets sold during a ski season. The report generated
by the computer for this calculation will be provided to the Town of West
Windsor for verification purposes. Accelerated payments required to be made
shall be due on May 15 for such year.
TERMS AND CONDITIONS
The Borrower hereby recognizes and accepts the terms and conditions of the Loan
Agreement and the Grant Agreement, and will comply with the Town of West Windsor
loan policies and procedures. The Borrower also agrees to repay the loan under
the terms of the Note
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in the amount of $240,000.00.
BORROWER:
1. The representations made with respect to the financial and operational
aspects of the business in the written documents previously provided to the Town
of West Windsor are accurate and not misleading as of today.
2. The proceeds of the loan will be utilized solely for the business purposes
related to the development and operation of a ski mountain resort business of
the Borrower located in the Town of West Windsor, Vermont, and in accordance
with the Agency's Necessary or Appropriate Determination and the Town of West
Windsor economic development policy.
3. The Borrower shall create 50 full-time equivalent positions of which 51% are
to be filled by or made available to persons of low and moderate income.
Documentation of the filling of such positions shall be given to the Town of
West Windsor as they occur and all such jobs shall be filled by June 26, 1996
pursuant to VCDP public benefit requirements as set forth in the Grant
Agreement.
4. In the event of a payment default and so long as it is continuing, financial
and operational reports shall be submitted to the Town of West Windsor as they
may reasonably request, and the Town of West Windsor shall have access to the
records of the business during normal business hours or as arranged in advance.
5. No material change in the financial aspects of the business shall be
initiated, specifically including but not limited to the borrowing of additional
money, the granting of additional liens significantly altering the plan for
capital expenditures, salaries of partners or Borrower's product or service,
without the prior written consent of the Town of West Windsor except for
Permitted Encumbrances and the Senior Debt, or as otherwise provided for in this
Loan Agreement.
6. Except as provided for in this Loan Agreement, no Sale or transfer of Real
Property or refinancing or restructuring of the Debt is permitted which would
result in the aggregate amount of the Debt and the Senior Debt then outstanding
(excluding the Permitted Encumbrances) being more than the lesser of $8 million
or 80% of the Grand List Value or, in the case of a Sale, if such Sale is not
consented to by Fleet Bank, N.A. or its successor notwithstanding a "Due on
Sale" clause in the Senior Debt loan documents; provided, further that the Town
of West Windsor does hereby consent to the transfer to Steven Plausteiner and/or
Susan Plausteiner the property containing 16.93 acres more or less located on
the easterly side of Town Highway No. 40, also referred to as Coaching Lane
Road, and depicted on a survey dated April 29, 1994 prepared by Robert W.
Farnsworth, Registered Land Surveyor of Brownsville, Vermont entitled "Land
Surveyed for Steven & Susan
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Plausteiner-Coaching Lane Road-West Windsor Vermont", Drawing No. 94-115, a
mylar thereof to be filed in the Map Rack of the West Windsor Land Records. VCDP
funds may not be used to restructure debt in any way.
7. A Security Interest is hereby granted in the Real Property located at Route
44, Brownsville, Vermont, and fixtures attached thereto, now held or hereafter
acquired. As stated in UCC-1 financing statements the Collateral covered
includes the fixtures attached or affixed to the Real Property.
8. The Borrower shall take out, pay for and keep in full force, insurance on the
Collateral against such risks, in such amounts, with such insurance carrier, and
with such loss payee clause as is commercially reasonable to protect the
interests of the Town of West Windsor, and shall furnish the Town of West
Windsor with the satisfactory evidence of such insurance.
9. Steven Plausteiner and Susan Plausteiner are not and/or will not seek or hold
office in the Town of West Windsor while the Debt is outstanding. In addition,
Steven Plausteiner and Susan Plausteiner will not become employed by the Town of
West Windsor while the Debt is outstanding.
10. The Borrower shall provide documentation to certify that, as of the date
hereof, the Borrower is in good standing with respect to, or in full compliance
with a plan to pay, any and all federal, state and local taxes shown as due
under tax returns filed by the Borrower.
11. The Borrower shall provide documentation to certify that, as of the date
hereof, the Borrower is current on all payment obligations, or is in full
compliance with a plan to pay, any and all financing programs of the Senior
Lenders.
12. The Borrower shall provide documentation to certify that, as of the date
hereof, all permits needed for the Project have been identified and those needed
to commence activities have been secured.
13. The Borrower shall provide documentation to certify that, as of the date
hereof, a certificate of authority to do business in the State of Vermont has
been secured.
14. The Borrower shall have entered into the Employment Agreement which is
attached hereto as Appendix 3.
15. The Borrower and all principals holding 20% or more partnership interests in
either of the Borrowers shall have entered into the Stand-by Agreement which is
attached hereto as Appendix 4 prohibiting all principals from receiving funds
taken out of the Borrower; except that Steven Plausteiner and Susan Plausteiner
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shall be permitted to receive debt repayments and compensation for services as
permitted under the Senior Debt loan from Fleet Bank, NA.
LENDER:
1. The Town of West Windsor shall, in accordance with the terms and conditions
of the Grant Agreement, loan VCDP funds to the Borrower for working capital and
advertising of the Borrower.
2. Disbursements shall be made up to the loan maximum, upon request by the
Borrower, outlining the purposes for which the funds shall be used, so long as
the request is in accordance with Attachment B, Description of Activities, and
the Agency Procedures of the Agency of Development and Community Affairs.
MISCELLANEOUS PROVISIONS
1. CONFLICT OF INTEREST: The Borrower agrees to comply with the requirements of
Section XV of the Grant Agreement; Section 3012, Category 3, Chapter 30 of the
Agency Procedures, and Category 2, Chapter 45, Conflict of Interest of the
Agency Procedures.
2. RETENTION OF AND ACCESS TO RECORDS: The Borrower agrees to comply with the
requirements of Section XX of the Grant Agreement, and the requirements of
Category 2, Chapter 23 of the Agency Procedures.
A. Financial records, supporting documents, statistical records, and all
other records pertinent to this VCDP shall be retained in accordance
with Agency Procedures (Category 2, Chapter 21).
B. Authorized representatives of the Secretary of the Agency, the
Secretary of HUD, the Inspector General of the United States, or the
U.S. General Accounting Office shall have access to all books,
accounts, records, reports, files, papers, things, or property
belonging to, or in use by, the Grantee (or any subrecipients)
pertaining to the receipt and administration of Vermont Community
Development Program Funds, as may be necessary to make audits,
examinations, excerpts, and transcripts.
3. EQUAL OPPORTUNITY: The Borrower agrees to comply with the requirements of
Section XVI of the Grant Agreement, and the requirements of Title 21, V.S.A.
Chapter 5, Subchapter 6, relating to fair employment practices.
4. SINGLE AUDIT ACT: If applicable, the Borrower agrees to comply with the
provisions of the Single Audit Act of 1984.
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5. AMENDMENTS: All amendments to the Loan Agreement shall be reduced to writing
and shall be executed by all parties to the document. A copy of any amendment to
this document shall be submitted to the Agency of Development and Community
Affairs for its records prior to execution of the amendment. Provisions for
amendments must comply with the requirements of Section XXI and XXV of the Grant
Agreement.
6. EXTENSIONS: No extension of this Loan Agreement shall be valid unless the
same is in writing and signed by the parties hereto and it is in compliance with
the provisions of Section XXI and XXV of the Grant Agreement.
7. ENVIRONMENTAL REVIEW: No activities funded in whole or in part using VCDP
funds can be initiated and no expenses can be incurred prior to the date of the
Environmental Release provided by VCDP to the Town of West Windsor pursuant to
Section VII (D), (E), (F) of the Grant Agreement.
8. NECESSARY OR APPROPRIATE DETERMINATION: The Borrower shall expend no VCDP
funds made available to Borrower through this document that are not consistent
with the Determination of Necessary or Appropriate conducted by the Agency.
9. OTHER RESOURCES: The Other Resources to be used in the grant consist of
borrowings of total $400,000 from the Vermont Economic Development Authority.
The Borrower has provided to the Town of West Windsor evidence of firm
commitment of such $400,000 loan.
10. APPLICABLE LOCAL, STATE, AND FEDERAL PERMITS: BORROWER IS RESPONSIBLE FOR
SECURING ALL PERMITS WHICH ARE NECESSARY, AS WELL AS ANY CONDITIONS RELATED TO
THE DISBURSEMENT OF FUNDS IMPOSED BY AGENCIES REQUIRING THEM.
11. MERGER. This Loan Agreement and the other loan documents, including the
Grant Agreement of even date the terms of which are incorporated herein by
reference, constitute the entire agreement and understanding between the
Borrower and the Town of West Windsor with respect to all matters discussed
therein and supersede all prior negotiations, representations, agreements and
understandings relating to the subject matter thereof, whether written or oral.
DEFAULT AND REMEDIES
1. DEFAULT: If any of the following events of default shall occur without being
cured within 30 days from the date that written notice of such default is
received by Borrower from the Town of West Windsor, the Debt secured by this
Loan Agreement shall be immediately due and payable.
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The following events shall constitute events of default:
(a) The Borrower shall default in making any payment of principal or
interest when the same shall become due under the Note or this
Loan Agreement following the grace period.
(b) The Borrower shall fail to comply with the applicable terms of the
Grant Agreement or this Loan Agreement.
(c) The failure of the Borrower to obtain the prior consent to
transfer or conveyance of the Real Property if such transfer or
conveyance results in the aggregate value of the Debt and the
Senior Debt (excluding the Permitted Encumbrances) being more than
the lesser of $8 million or 80% of the Grand List Value.
(d) Commencement of proceedings under any bankruptcy or insolvency law
by or against the Borrower.
(e) Any material representation or warranty made by the Borrower
herein or in any other document relating to this loan shall fail
to be true and correct when made or furnished.
(f) Commencement of any levy upon or execution or other proceedings of
any nature whereby the Borrower shall be deprived of title or
right of possession to the Real Property with the result that the
grand list value as determined from time to time shall be less
than the Senior Debt (excluding the Permitted Encumbrances) and
the Debt then outstanding.
(g) The dissolution or termination of existence of the Borrower.
2. REMEDIES: If Borrower fails to pay the Debt or cure any breach or default
prior to the expiration of the 30 day grace period, the Town of West Windsor may
declare the indebtedness evidenced by the Note immediately due and payable,
without presentment, protest, demand or notice of any kind, all of which are
waived by the Borrower; and may pursue any and all remedies provided hereunder
and in any one or more of the loan documents or at law or in equity.
3. REMEDIES CUMULATIVE: All remedies provided in this Loan Agreement are
distinct and cumulative to any other right or remedy under this Loan Agreement,
or otherwise at law or in equity, and may be exercised concurrently,
independently or successively.
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4. FORBEARANCE NOT A WAIVER: Any forbearance by Town of West Windsor in
exercising any right or remedy hereunder, or otherwise afforded by applicable
law, shall not be a waiver of or preclude the exercise of any such right or
remedy.
IN WITNESS WHEREOF this Loan Agreement on the day and year first above
mentioned.
LENDER: BORROWER:
Town of West Windsor Ascutney Mountain Resort, L.P.
by its general partner,
Snowdance Ski Company
By /s/ Annie Burke - Chair By /s/ SUSAN D. PLAUSTEINER - PRESIDENT
-------------------------- ------------------------------------
Authorized Signature/Title Authorized Signature/Title
Ascutney Mountain Resort Hotel, L.P.
by its general partner, Snowdance
Hotel Company
By /s/ SUSAN D. PLAUSTEINER - PRESIDENT
------------------------------------
Authorized Signature/Title
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THIS DRAFT PURCHASE AND SALE AGREEMENT ("AGREEMENT") HAS BEEN PREPARED FOR
DISCUSSION PURPOSES ONLY. IT REMAINS SUBJECT TO FURTHER REVIEW AND COMMENT BY
SKYLINE PARTNERS L.P.,("SELLER") AND TO FINAL APPROVAL BY AUTHORIZED OFFICERS OF
SELLER. THIS IS NOT A COMMITMENT BY SELLER TO ENTER INTO THE TRANSACTIONS
DESCRIBED HEREIN. THE DELIVERY OF THIS AGREEMENT BY OR ON BEHALF OF SELLER IS
NOT, NOR SHOULD IT BE CONSTRUED TO BE, A CONTRACT, AN OFFER OR COUNTER-OFFER, IT
BEING THE SELLER'S INTENTION THAT THIS AGREEMENT IS NOT BINDING ON ANY PARTY AND
THAT NO CONTRACT SHALL ARISE UNLESS AND UNTIL THIS AGREEMENT HAS BEEN COMPLETED
AND DULY AUTHORIZED, EXECUTED AND DELIVERED. ANY PARTY MAY TERMINATE
NEGOTIATIONS AT ANY TIME PRIOR TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT
WITHOUT NOTICE OR LIABILITY TO ANY OTHER PARTY. IN NO EVENT SHALL THIS AGREEMENT
OR ANY DISCUSSIONS IN CONNECTION HEREWITH BE INTRODUCED OR USED AS EVIDENCE IN
ANY LITIGATION OR PROCEEDING.
PURCHASE AND SALE AGREEMENT
By
and
Between
SKYLINE PARTNERS, L.P.
(Seller)
and
SNOWDANCE, INC.
(Purchaser)
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THIS DRAFT PURCHASE AND SALE AGREEMENT ("AGREEMENT") HAS BEEN PREPARED FOR
DISCUSSION PURPOSES ONLY. IT REMAINS SUBJECT TO FURTHER REVIEW AND COMMENT BY
SKYLINE PARTNERS L.P.,("SELLER") AND TO FINAL APPROVAL BY AUTHORIZED OFFICERS OF
SELLER. THIS IS NOT A COMMITMENT BY SELLER TO ENTER INTO THE TRANSACTIONS
DESCRIBED HEREIN. THE DELIVERY OF THIS AGREEMENT BY OR ON BEHALF OF SELLER IS
NOT, NOR SHOULD IT BE CONSTRUED TO BE, A CONTRACT, AN OFFER OR COUNTER-OFFER, IT
BEING THE SELLER'S INTENTION THAT THIS AGREEMENT IS NOT BINDING ON ANY PARTY AND
THAT NO CONTRACT SHALL ARISE UNLESS AND UNTIL THIS AGREEMENT HAS BEEN COMPLETED
AND DULY AUTHORIZED, EXECUTED AND DELIVERED. ANY PARTY MAY TERMINATE
NEGOTIATIONS AT ANY TIME PRIOR TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT
WITHOUT NOTICE OR LIABILITY TO ANY OTHER PARTY. IN NO EVENT SHALL THIS AGREEMENT
OR ANY DISCUSSIONS IN CONNECTION HEREWITH BE INTRODUCED OR USED AS EVIDENCE IN
ANY LITIGATION OR PROCEEDING.
Dated as of August __, 1997
<PAGE>
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TABLE OF CONTENTS
ARTICLE I
PURCHASE AND SALE; PURCHASE PRICE 1
Section 1.1 Property 1
Section 1.2 Purchase Price 1
ARTICLE II
EXAMINATION PERIOD 3
Section 2.1 Examination Period 3
Section 2.2 Diligence Materials 3
Section 2.3 Access to Property 5
Section 2.4 "AS IS" if Purchaser Proceeds to Closing 5
Section 2.5 Maintenance of Property by Seller 5
ARTICLE III
TITLE 5
Section 3.1 Condition of Title 5
Section 3.2 Title Commitment 6
Section 3.3 No Obligation to Cure Title Objections 7
Section 3.4 Title Clearance 7
Section 3.5 (Intentionally omitted) 8
Section 3.6 Franchise Taxes 8
ARTICLE IV
CLOSING 8
Section 4.1 Closing 8
Section 4.2 Payment of Purchase Price 8
ARTICLE V
REPRESENTATIONS AND WARRANTIES 9
Section 5.1 Representations and Warranties by Seller 9
Section 5.2 Purchaser's Representations and Warranties 10
Section 5.3 Purchaser Accepts Property "As Is" 11
ARTICLE VI
CLOSING DELIVERIES 13
Section 6.1 Seller's Closing Deliveries 13
Section 6.2 Purchaser's Closing Deliveries 14
ARTICLE VII
PRORATIONS; CLOSING EXPENSES 14
Section 7.1 Prorations 14
Section 7.2 Closing Expenses 15
Section 7.3 Past Due Rentals 15
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Section 7.4 Taxes 15
ARTICLE VIII
CONDITIONS TO CLOSING 15
Section 8.1 Seller's Conditions 15
Section 8.2 Purchaser's Conditions 16
Section 8.3 Failure of Condition 16
ARTICLE IX
INDEMNITY 17
Section 9.1 Purchaser's Indemnity 17
Section 9.2 Seller's Indemnity 17
ARTICLE X
CASUALTY; CONDEMNATION 17
Section 10.1 Casualty 17
Section 10.2 Condemnation 18
ARTICLE XI
BROKERAGE 18
Section 11.1 Brokerage Commissions 18
ARTICLE XII
NOTICES 18
Section 12.1 Notices 18
ARTICLE XIII
DAMAGES 20
Section 13.1 Purchaser's Default 20
Section 13.2 Seller's Default 20
ARTICLE XIV
MISCELLANEOUS 20
Section 14.1 Time of the Essence 20
Section 14.2 Attorneys' Fees 20
Section 14.3 No Waiver 20
Section 14.4 Entire Agreement 20
Section 14.5 Survival 20
Section 14.6 Successors and Assigns 21
Section 14.7 Assignment 21
Section 14.8 Relationship of the Parties 21
Section 14.9 Governing Law 21
Section 14.10 (Intentionally omitted) 21
Section 14.11 Review by Counsel 21
Section 14.12 (Intentionally omitted) 22
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Section 14.13 Consent to Jurisdiction; Service of Process 22
Section 14.14 Business Days 23
Section 14.15 Certain Terms 23
Section 14.16 Severability 23
Section 14.17 Waiver of Jury Trial 24
Section 14.18 No Recording 24
Section 14.19 Like-Kind Exchange 24
Section 14.20 Exclusivity 24
Section 14.21 Effectiveness 24
Section 14.22 Counterparts 24
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SCHEDULES
Schedule 1.1 - Legal Description
Schedule 1.2 - Intentionally Omitted
Schedule 3.1 - Permitted Exceptions
Schedule 5.1(iv) - Existing Leases relating to the Property
Schedule 5.1(vi) - Contracts
EXHIBITS
Exhibit A - Limited Warranty Deed
Exhibit B - Assignment and Assumption of Leases
Exhibit C - Assignment and Assumption of Contracts
Exhibit D - FIRPTA Affidavit
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made as of the __
day of August, 1997 by and between SKYLINE PARTNERS, L.P., a Delaware limited
partnership ("Seller"), and SNOWDANCE, INC. ("Snowdance").
A. Seller owns certain real property commonly known
as Hogback Mountain located in the townships of Marlboro and
Wilmington, Windham County, Vermont.
B. Subject to the terms and conditions set forth herein, Seller
desires to sell, and SNOWDANCE or its designee (collectively, referred to as the
"Purchaser") desires to purchase the Property (as defined below).
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Seller and Purchaser agree as follows:
ARTICLE I
PURCHASE AND SALE; PURCHASE PRICE
Section 1.1 Property. Subject to the terms and conditions hereof,
Seller hereby agrees to sell to Purchaser, and Purchaser hereby agrees to
purchase from Seller on the Closing Date (as defined in Section 1.2 below) those
certain plots, pieces and parcels of land located in the townships of Marlboro
and Wilmington, County of Windham, State of Vermont more particularly described
on Schedule 1.1 attached hereto and made a part hereof (the "Land"), together
with all of the Seller's right, title and interest in and to (a) the buildings
and other improvements situated on the Land (collectively, the "Improvements"),
(b) all easements, rights-of-way, reservations, privileges, appurtenances and
other estates and rights of Seller pertaining to the Land and the Improvements,
(c) all fixtures, machinery, equipment and other articles of personal property
attached or appurtenant to the Land or the Improvements, or used in connection
therewith (collectively, the "Personal Property"), (d) each of the Leases (as
defined in Section 5.1(iv) hereof) and all modifications and amendments thereof,
together with all security deposits thereunder in Seller's possession, if any,
(e) each of the Contracts (as defined in Section 5.1(vi) hereof), and (f) all
licenses, warranties and guaranties, if any, and all benefits thereof, which
affect the Improvements or any component thereof (the Land, together with all of
the foregoing items listed in clauses (a) through (f) above being sometimes
hereinafter collectively referred to as the "Property").
Section 1.2 Purchase Price. The purchase price ("Purchase Price") to
be paid by the Purchaser to the Seller for the Property is five hundred thousand
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shares of common stock of SNOWDANCE (the "Shares") to be delivered to the Seller
on the date of the consummation of Snowdance's initial public offering ("IPO")
of securities (the "Closing Date").
ARTICLE II
EXAMINATION PERIOD
Section 2.1 Examination Period. Purchaser shall have a period of
thirty (30) days (the "Examination Period") from the date hereof to notify
Seller in writing of any matter arising out of Purchaser's review of the
documents set forth below or of any matter arising out of Purchaser's
investigation of the physical condition of the Property which is disapproved by
Purchaser, which disapproval shall be given in good faith and which notice shall
specifically describe the matter or item disapproved and the reason for its
disapproval. If Purchaser fails to give such notice of disapproval with respect
to any matter relating to the Property before the date set forth above, such
failure shall be conclusively deemed to be full and complete approval of such
matters and a satisfaction of this condition. If Purchaser timely notifies
Seller, in accordance with this Section 2.1, that Purchaser disapproves any
matter relating to the Property, Purchaser shall have the right, simultaneously
with the giving of such notice, to terminate this Agreement and thereupon all
further rights and obligations of the parties shall cease and terminate without
any further liability of either party to the other (except as otherwise provided
in this Agreement). Notwithstanding anything to the contrary contained herein,
Seller shall have no obligation to cure any matter disapproved by Purchaser in
accordance with this Section 2.1.
Section 2.2 Diligence Materials. The parties acknowledge that, on or
before the execution of this Agreement, the Seller has provided, or made
available for inspection, to the Purchaser the following documents to the extent
the same are in Seller's possession:
(a) Real and personal property tax bills and the assessed value of the
Property for the prior three years;
(b) Statement of insurance coverages on or affecting the Property and
the current premiums therefor by policy type and copies of such insurance
policies;
(c) As-built plans and specifications for improvements constructed on
the Property and soil reports (as available);
(d) Policy of Title Insurance, dated February 7, 1994, together with
legible copies of all exceptions thereto;
(e) Legal Description and current survey dated _______________,
showing the location of all improvements, easements, parking spaces and lot
size;
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(f) Certificate(s) of Occupancy or conditional use permit under which
the Property is operated, and business licenses of Seller relating to operation
of the Property;
(g) Maintenance and operations contracts;
(h) Most current rent roll;
(i) Operating income and expense detail for the Property for the 1995
and 1996 operating years, as well as a year-to-date statement;
(j) Phase I Environmental Site Assessment of buildings and property at
the Hogback Ski Area/Gift Shop and Skyline Restaurant dated January 7, 1994;
(k) Legible copies of all tenant leases and amendments or
modifications, certificates of insurance on coverages obtained by tenant, and
any records of tenant financial statements, credit reports and other financial
information; and
(l) Tenant payment history reports for the prior fiscal years 1995 and
1996.
Section 2.3 Access to Property. Until the first to occur of the
Closing or the earlier termination of this Agreement, Seller shall permit
Purchaser and its agents, at reasonable times, upon reasonable prior notice to
Seller and in a manner which will not unreasonably interfere with business being
conducted by the tenants at the Property, to enter upon the Property, at
Purchaser's sole cost and expense, for the purpose of conducting such physical
inspections and non-destructive soil and engineering tests as Purchaser may
elect to make or obtain. Purchaser hereby agrees to indemnify and hold harmless
Seller from and against any mechanics' lien or claim therefor and any claim,
cause of action, lawsuit, damage, liability, loss, cost or expense (including,
without limitation, attorneys' fees and expenses) arising out of any such entry
by Purchaser or its agents or out of any such inspections or tests conducted by
Purchaser or its agents. The provisions of the preceding sentence shall survive
termination of this Agreement or the Closing hereunder.
Section 2.4 "AS IS" if Purchaser Proceeds to Closing. If the Purchaser
closes on the purchase of the Property, the Purchaser shall be deemed to have
accepted the Property "As Is, Where Is" and "With All Faults".
Section 2.5 Maintenance of Property by Seller. Between the date of
this Agreement and the Closing Date, Seller agrees to operate and maintain the
Property substantially in the same manner in which the Property is currently
being
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operated by Seller. Prior to the expiration of the Examination Period, Seller
shall have the absolute right, without Purchaser's consent, to (a) let any
vacant space affecting any part of the Property, including any space which may
become vacant after the date of this Agreement, (b) extend, modify or amend any
Lease or (c) terminate or cancel any Lease if the tenant thereunder is in
default, and Purchaser shall take title subject to any such new lease or
extended, modified or amended Lease or such terminated or canceled Lease, as the
case may be. If Purchaser has elected, prior to the expiration of the
Examination Period, to close on the purchase of the Property, Seller shall have
the right, subject to Purchaser's consent, which consent shall not be
unreasonably withheld or delayed, to perform the actions set forth in the
preceding sentence, and Purchaser shall take title subject thereto.
ARTICLE III
TITLE
Section 3.1 Condition of Title. Title to the Property shall be
delivered to Purchaser and Purchaser agrees to accept such title subject to all
of the following (the "Permitted Exceptions"):
(a) all matters set forth in Schedule 3.1 attached hereto [exceptions
to be inserted from existing Title Policy];
(b) all leases, subleases, or other agreements demising any portion of
the Property and all tenancies and rights of occupancy thereunder;
(c) rights of any utility company to construct, maintain and operate
lines, wires, poles, cables, distribution boxes and appurtenances thereto,
on, under or across the Property, including without limitation all utility
easements of record or in fact and all other easements of record;
(d) violations of laws, regulations, ordinances, orders or
requirements, if any, noted in or issued by any governmental or municipal
department or authority having jurisdiction over the Property after the
date hereof and any conditions constituting such violations, although not
so noted or issued;
(e) possible projections and/or encroachments of retaining walls,
stoops, areas, steps, sills, trim, cornices, standpipes, coal chutes,
casings, ledges, water tables, lintels, porticos, keystones, bay windows,
hedges, canopies, cellar doors, sidewalks, curbs, elevators, fences and the
like, or similar projections or objects on, under or above any adjoining
streets of the Property, or within any setback areas, and variations
between the lines of record title and fences, retaining walls, hedges, and
the like;
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(f) rights contained in instruments of record, if any, so far as the
same may be of present force or effect, in favor of any public or
quasi-public utility;
(g) building and zoning restrictions, ordinances and regulations
affecting the Property heretofore or hereafter adopted by the state,
county, city, town or village in which any portion of the Property lies or
by any other governmental authority having jurisdiction thereof, and all
amendments or additions thereto now in effect or which are in force and
effect on the date of closing hereunder;
(h) real estate taxes, ad valorem personal property taxes, water
rates, water frontage charges and storm sewer and sanitary sewer taxes, and
water meter and sewer rent charges based thereon, subject to adjustment;
(i) any state of facts which an accurate survey or personal inspection
of the Property would show provided the same does not materially and
adversely impair the uses of the Property for the purposes for which it is
presently used; and
(j) any and all other covenants, restrictions, agreements, reversions,
easements and matters of record, provided that any title insurance company
authorized to conduct business as such in the State of Vermont will insure
that the same do not prohibit the maintenance of the Improvements on the
Property.
Section 3.2 Title Commitment.(a) Purchaser shall order, at its sole
cost and expense, a commitment for an owner's title insurance policy with
respect to the Property (the "Title Commitment") from [__________ Title
Insurance Company] (the "Title Company") and shall request the Title Company to
deliver copies of the Title Commitment as soon as the same is or becomes
available, together with true and complete copies of all instruments giving rise
to any defects or exceptions to title to the Property, to Purchaser's and
Seller's attorneys. If the Title Commitment indicates the existence of any
liens, encumbrances or other defects or exceptions to title to the Property,
other than the Permitted Encumbrances subject to which Purchaser is unwilling to
accept title (collectively, the "Title Objections") and Purchaser gives Seller
notice of the same within fifteen (15) days after Purchaser's receipt of the
Title Commitment, Seller shall have the right (but shall not be obligated) to
eliminate or cure the same. Purchaser hereby waives any right Purchaser may have
to advance as objections to title or as grounds for Purchaser's refusal to close
this transaction any Title Objections of which Purchaser does not notify Seller
within such 15-day period unless such Title Objections were first raised by the
Title Company subsequent to the date of the applicable Title Commitment, in
which event Purchaser shall be deemed to have waived its right to raise such
Title Objections as an objection to title or as a ground for Purchaser's refusal
to close this transaction if Purchaser fails to notify
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Seller of the same within five (5) days after Purchaser first becomes aware of
such Title Objections. Seller, in its sole discretion, may adjourn the Closing
one or more times for up to ninety (90) days in the aggregate in order to
eliminate Title Objections.
(b) If Seller is unable or unwilling to eliminate all Title Objections
not waived by Purchaser, or to arrange for title insurance reasonably acceptable
to Purchaser insuring against enforcement of such Title Objections against, or
collection of the same out of, the Property, and to convey title in accordance
with the terms of this Agreement on or before the Closing Date (whether or not
the Closing is adjourned as provided in Section 3.2(a)), Purchaser may elect on
the Closing Date either to terminate this Agreement by written notice given to
Seller, or to accept title subject to such Title Objections and without any
reduction in or credit against the Purchase Price.
Section 3.3 No Obligation to Cure Title Objections. Notwithstanding
anything to the contrary set forth in this Article III or elsewhere in this
Agreement, Seller shall not be obligated to bring any action or proceeding, make
any payments or otherwise incur any expense in order to eliminate Title
Objections not waived by Purchaser or to arrange for title insurance insuring
against enforcement of such Title Objections against, or collection of the same
out of, the Property. Seller's failure or refusal to bring any action or
proceeding, make any payments or otherwise incur any expense in order to
eliminate Title Objections not waived by Purchaser or to arrange for such title
insurance shall be deemed an inability of Seller to eliminate such Title
Objections or to arrange for such title insurance and shall not be a default by
Seller hereunder (willful or otherwise).
Section 3.4 Title Clearance. If, on the Closing Date, there are any
liens or encumbrances which Seller must pay or discharge in order to convey to
Purchaser such title as is herein provided to be conveyed: (a) Seller shall
deliver to Purchaser or the Title Company, at the Closing, instruments in
recordable form and sufficient to satisfy such liens or encumbrances of record,
together with the cost of recording or filing said instruments; or (b) Seller
shall deposit with the Title Company sufficient moneys acceptable to the Title
Company to insure the obtaining and the recording of such satisfactions. The
existence of any such liens or encumbrances shall not be deemed objections to
title if Seller shall comply with the foregoing requirements.
Section 3.5 ( Intentionally Omitted )
Section 3.6 Franchise Taxes. Any franchise or corporate tax open,
levied or imposed against Seller or other owners in the chain of title that may
be a lien on the Closing Date shall not be an objection to title if the Title
Company omits the same from the title policy issued pursuant to the Title
Commitment.
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ARTICLE IV
CLOSING
Section 4.1 Closing. The Closing ("Closing") of the purchase and sale
of the Property shall take place on the Closing Date, simultaneously with the
consummation of Snowdance's IPO. The Closing shall take place at the offices of
_______, whose address is _______, at 10:00 AM New York Time. In the event that
the Closing Date shall not occur on or prior to December 31, 1997, then unless
otherwise amended by mutual agreement of the parties hereto, this Agreement
shall terminate and be of no further force or effect. In the event that
subsequent to the Closing Purchaser desires Seller to continue to manage the
Property, Seller shall so manage the Property pursuant to a separate management
agreement to be executed between the parties, under which Seller would inter
alia in consideration of the payment by Purchaser to Seller of $1,000 per month
(i) collect all rents for the Property and submit same, together with a monthly
statement to Purchaser; (ii) arrange for rentals of the Property as vacancies
occur; (iii) represent Purchaser in dealings with tenants of the Property; (iv)
arrange for and manage maintenance of the Property; and (v) prepare expense
statements for approval and payment by Purchaser.
Section 4.2 Payment of Purchase Price. Purchaser agrees to deliver the
Shares by no later then 10 A.M. (New York Time) on the Closing Date.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties by Seller. (a) Seller
represents, warrants, and covenants to Purchaser that:
(i) Seller (1) is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware, (2) has
the full power and authority to convey the Property and to execute this
Agreement and all documents contemplated hereby, (3) has taken all actions and
obtained all consents and approvals required for the consummation of the
transactions contemplated by this Agreement.
(ii) This Agreement constitutes a valid and binding obligation of
Seller and is enforceable against Seller in accordance with its terms except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting enforcement of creditors' rights generally, and the application of
equitable principles in any action, legal or equitable. The execution of this
Agreement, the delivery of all required documents, the Seller's performance of
this Agreement and the transactions contemplated hereby have been duly
authorized by all requisite action on the part of the Seller.
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(iii) Neither the execution and delivery of, nor the performance
under, this Agreement or any other document executed and delivered by the Seller
(both contemporaneously herewith or at the Closing) in connection with this
transaction is precluded by, will conflict with, result in a breach of or
violate, any provision of (1) any existing Federal, state, local or other
governmental or quasi-governmental law, statute, ordinance, restriction, rule or
regulation, or (2) any judgment, order decree, writ or injunction of any court
or governmental department, commission, board, bureau, agency or instrumentality
applicable to Seller.
(iv) Schedule 5.1(iv) sets forth all of the leases (collectively
"Leases") entered into with respect to the Property, together with all security
deposits held by or on behalf of Seller pursuant to any of the Leases. All
Leases are in full force and effect in accordance with their respective terms.
To the Seller's knowledge, no tenant under a Lease has asserted any claim or
default or offset against the Seller with respect thereto.
(v) There are no brokerage or leasing commissions which are due
and unpaid with respect to any of the Leases.
(vi) All service, management or maintenance contracts
(collectively "Contracts") relating to or affecting the Property are set forth
in Schedule 5.1(vi) annexed hereto and made a part hereof and true and correct
copies of all Contracts, including all agreements, amendments, and other
documents relating thereto, have been made available to the Purchaser for
inspection. All Contracts are in full force and effect in accordance with their
respective terms. To the Seller's knowledge, no party to any of the Contracts
has asserted any claim or default or offset against the Seller with respect
thereto.
(vii) There are no actions, proceedings or other litigation
pending or, to Seller's knowledge, threatened, with respect to the Property, the
use or operation thereof or the Seller, as owner thereof, nor are there any
outstanding or unpaid judgments against the Seller or affecting the Property.
(viii) Seller is acquiring the Shares for investment purposes
only and not with a view to the resale or distribution thereof.
(ix) To Seller's knowledge, there are no pending or threatened
condemnation proceedings affecting the Property.
(b) Except as set forth in Section 5.1(a), Seller has not made any
warranty or representation, express or implied, written or oral, concerning the
Property or any uses to which the Property may or may not be put including, but
not limited to, the following:
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(i) the condition of title to the Property;
(ii) the nature, physical condition or other aspect of the
Property;
(iii) the income or expenses generated, paid or incurred in
connection with the Property;
(iv) the accuracy of any statements, calculations or conditions
stated or set forth in Seller's books and records concerning the Property;
(v) the suitability of the Property for any intended use or
development;
(vi) the dimensions of the Property or the accuracy of any square
footage, sketches or abstracts, revenue or expense projections related to the
Property;
(vii) the ability of Purchaser to obtain any and all necessary
governmental approvals or permits for Purchaser's intended use and development
of the Property; or
(viii) the existence of Hazardous Materials (as defined in
Section 5.3(b)) in, on, about, under, or affecting the Property.
Section 5.2 Purchaser's Representations and Warranties. Purchaser
represents, warrants, and covenants to Seller that:
(a) Purchaser (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of ______, (ii) has
the full power and authority to purchase the Property and to execute this
Agreement and all documents contemplated hereby, and (iii) has taken all actions
and obtained all consents and approvals required for the consummation of the
transactions contemplated by this Agreement.
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(b) This Agreement constitutes a valid and binding obligation of
Purchaser and is enforceable against Purchaser in accordance with its terms
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting enforcement of Creditors' rights generally, and the application of
equitable principles in any action, legal or equitable. Purchaser is (or will be
on the Closing Date) validly formed, duly organized and in good standing under
the laws of the state in which the Property is located. The execution of this
Agreement and delivery of the Shares, and all required documents, Purchaser's
performance of this Agreement and the transactions contemplated hereby have been
duly authorized by all requisite action on the part of the Purchaser. Upon
delivery of the Shares in accordance with the terms of this Agreement, the
Shares will be duly and validly issued, fully-paid and non-assessable, and
the holder thereof shall not be subject to any liability solely by being the
holder thereof.
(c) Neither the execution and delivery of, nor the performance
under, this Agreement or any other document executed and delivered by the
Purchaser (both contemporaneously herewith or at the Closing) in connection with
this transaction is precluded by, will conflict with, result in a breach of or
violate, any provision of (i) any existing Federal, state, local or other
governmental or quasi-governmental law, statute, ordinance, restriction, rule or
regulation, or (ii) any judgment, order decree, writ or injunction of any court
or governmental department, commission, board, bureau, agency or instrumentality
applicable to Purchaser.
Section 5.3 Purchaser Accepts Property "As Is". (a) If Purchaser
consummates the Closing hereunder, Purchaser acknowledges for Purchaser and
Purchaser's successors and assigns, that Purchaser (i) has been given a
reasonable opportunity to inspect and investigate the Property and all aspects
relating thereto, either independently or through agents and experts of
Purchaser's choosing, and (ii) is acquiring the Property based upon Purchaser's
own investigation and inspection thereof. SELLER AND PURCHASER AGREE THAT THE
PROPERTY SHALL BE SOLD AND THAT PURCHASER SHALL ACCEPT POSSESSION OF THE
PROPERTY ON THE CLOSING DATE "AS IS, WHERE IS, WITH ALL FAULTS" WITH NO RIGHT OF
SET-OFF OR REDUCTION IN THE PURCHASE PRICE AND THAT, EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, SUCH SALE SHALL BE WITHOUT REPRESENTATION OR WARRANTY
OF SELLER OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
WARRANTY OF INCOME POTENTIAL, OPERATING EXPENSES, USES, MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE (BUT SPECIFICALLY EXCLUDING THE WARRANTY OF
TITLE TO BE GIVEN IN THE DEED), AND SELLER DOES HEREBY DISCLAIM AND RENOUNCE ANY
SUCH REPRESENTATION OR WARRANTY. PURCHASER SPECIFICALLY ACKNOWLEDGES THAT
PURCHASER IS NOT RELYING ON
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ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED,
FROM SELLER OR ANY AGENTS OR BROKERS AS TO ANY MATTER CONCERNING THE PROPERTY
(EXCEPT FOR THE WARRANTY OF TITLE SPECIFICALLY SET FORTH ABOVE), INCLUDING
WITHOUT LIMITATION: (1) THE CONDITION OF THE PROPERTY OR ANY IMPROVEMENTS
THEREON, INCLUDING, BUT NOT LIMITED TO, ANY PLUMBING, SEWER, HEATING AND
ELECTRICAL SYSTEMS, ROOFING, AIR CONDITIONING, IF ANY, FOUNDATIONS, SOILS AND
GEOLOGY INCLUDING HAZARDOUS MATERIALS, LOT SIZE, OR SUITABILITY OF THE PROPERTY
OR ANY IMPROVEMENTS FOR A PARTICULAR PURPOSE; (2) WHETHER THE APPLIANCES, IF
ANY, PLUMBING OR UTILITIES, IF ANY, ARE IN WORKING ORDER; (3) THE HABITABILITY
OR SUITABILITY FOR OCCUPANCY OF ANY STRUCTURE AND THE QUALITY OF ITS
CONSTRUCTION; (4) THE FITNESS OF ANY PERSONAL PROPERTY; OR (5) WHETHER THE
IMPROVEMENTS ARE STRUCTURALLY SOUND, IN GOOD CONDITION, OR IN COMPLIANCE WITH
APPLICABLE CITY, COUNTY, STATE OR FEDERAL STATUTES, CODES OR ORDINANCES.
PURCHASER IS RELYING SOLELY UPON ITS OWN INSPECTION OF THE PROPERTY AND NOT UPON
ANY REPRESENTATIONS MADE TO IT BY ANY PERSON WHOMSOEVER. ANY REPORTS, REPAIRS OR
WORK REQUIRED BY PURCHASER ARE TO BE THE SOLE RESPONSIBILITY OF PURCHASER AND
PURCHASER AGREES THAT THERE IS NO OBLIGATION ON THE PART OF SELLER TO MAKE ANY
CHANGES, ALTERATIONS, OR REPAIRS TO THE PROPERTY, AND PURCHASER ACKNOWLEDGES
THAT, IF PURCHASER CLOSES ITS PURCHASE OF THE PROPERTY, PURCHASER HAS COMPLETED
ITS DUE DILIGENCE WITH RESPECT TO THE PROPERTY TO ITS SATISFACTION.
(b) Purchaser further acknowledges that Seller makes no
representations or warranties whatsoever regarding the presence or absence of
any Hazardous Materials (as hereinbelow defined) in, at, or under the Property.
Purchaser has made, or has been given the opportunity to make, such studies and
investigations, conducted such tests and surveys, and engaged such specialists
as Purchaser has deemed appropriate to evaluate fairly the Property and its
risks relating to any and all environmental matters. Purchaser, for itself and
Purchaser's successors and assigns, releases Seller from, and waives all claims
and liability against Seller for, any structural, physical or environmental
condition at the Property and further releases Seller from, and waives all
liability against Seller attributable to, the structural, physical and
environmental condition of the Property, including without limitation the
presence, discovery or removal of any Hazardous Materials in, at, about or under
the Property, or for, connected with or arising out of any and all claims or
causes of action based upon the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Resource Conservation and Recovery Act, the
Toxic Substances Control Act, as such acts may be amended from time to time, or
any other federal or state statutory or
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regulatory cause of action for environmental contamination at, in or under the
Property (collectively, the "Hazardous Waste Laws"). For purposes of this
Agreement, the term "Hazardous Materials" shall mean any substance, chemical,
waste or material that is or becomes regulated by any federal, state or local
governmental authority because of its toxicity, infectiousness, radioactivity,
explosiveness, ignitability, corrosiveness or reactivity, including, without
limitation, those substances regulated by the Hazardous Waste Laws.
Notwithstanding anything herein to the contrary, the agreements of Purchaser set
forth in this Section 5.3(b) shall survive the Closing Date and shall be
enforceable at any time.
ARTICLE VI
CLOSING DELIVERIES
Section 6.1 Seller's Closing Deliveries. At the Closing, Seller shall
deliver to Purchaser the following:
(a) Warranty Deed(s) in the form attached hereto as Exhibit A
("Deed(s)") which shall convey the Property to Purchaser subject to the
Permitted Encumbrances, in proper form for recording;
(b) Assignment and Assumption, in the form annexed hereto and made a
part hereof as Exhibit B, of all of Seller's right, title and interest, as
lessor, in, to and under the Leases, together with any security deposits
then held by Seller as security from tenants to the extent not applied by
Seller to defaults by such tenants. Purchaser shall assume all of Seller's
obligations under the Leases arising from and after the Closing Date;
(c) Assignment and Assumption, in the form annexed hereto and made a
part hereof as Exhibit C, of all of Seller's right, title and interest in,
to and under the Contracts. Purchaser shall assume all of Seller's
obligations under the Contracts arising from and after the Closing Date;
(d) Certificate of non-foreign status in the form set forth on Exhibit
D attached hereto, pursuant to Section 1445 of the Internal Revenue Code of
1986, as amended;
(e) Transfer tax declarations or returns;
(f) Copies of the Seller's Certificate of Limited Partnership;
(g) A certificate stating that as of the Closing Date all of the
representations and warranties of Seller set forth in this Agreement are
true, correct and complete in all material respects with the same force and
effect as if made on the Closing Date;
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(h) Notices to all Tenants, advising each of them of the sale of the
Property and the assignment of the Leases and security deposits held
thereunder to Purchaser;
(i) Original Leases to the extent the same are in the possession of
Seller and kept in the normal course of Seller's business; and
(j) Such other documents as may be reasonably necessary and
appropriate to consummate the Closing (e.g. Vermont Land Gains Tax Returns,
Vermont Withholding Tax Returns, Lead Paint Disclosure Statement, Smoke
Detector Certificate, etc.)
Section 6.2 Purchaser's Closing Deliveries. At the Closing, Purchaser
shall deliver to Seller the following:
(a) A certificate representing the Shares, made out in the name of
Seller;
(b) Intentionally Omitted;
(c) Assignment and Assumption of Leases;
(d) The leases set forth on Schedule 4.1 annexed hereto;
(e) Assignment and Assumption of Contracts;
(f) A certificate stating that as of the Closing Date all of the
representations and warranties of Purchaser set forth in this Agreement are
true, correct and complete in all material respects with the same force and
effect as if made on the Closing Date;
(g) Transfer tax declarations or returns; and
(h) Such other documents as may be reasonably necessary and
appropriate to consummate the Closing.
ARTICLE VII
PRORATIONS; CLOSING EXPENSES
Section 7.1 Prorations. The following shall be apportioned between
Seller and Purchaser as of 11:59 P.M. of the day before the Closing Date:
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(a) Real estate, property and ad valorem taxes and assessments, on the
basis of the fiscal year for which the same are levied, imposed or
assessed; and
(b) Rents as and when collected, less agents' commissions, due under
the Leases for the month in which the Closing shall occur;
(c) Charges for water, sewer rents, vaults, electricity, steam, gas,
fuel and any other utilities, which are not metered or otherwise charged
directly to tenants under the Leases and which are payable by the Seller;
(d) Premiums on all existing insurance policies, and on renewals or
replacements thereof, to the extent the same are assumed by Purchaser;
(e) Prepaid license and permit fees with respect to the Property; and
(f) Amounts paid or payable under the Contracts which are assigned to
Purchaser pursuant to the terms of this Agreement.
If such closing adjustments are in favor of Seller, Purchaser shall pay such
amounts at Closing by wire transfer of immediately available funds. If such
closing adjustments are in favor of Purchaser, Seller shall, at Purchaser's
option, either deliver a certified check for the same or provide a wire transfer
of immediately available funds for the same at Closing.
Section 7.2 Closing Expenses. Purchaser shall pay for the cost of
recording the Deed(s), all costs relating to any financing obtained by Purchaser
in connection with its purchase of the Property, mortgage taxes or other similar
taxes, fees or assessments, and all costs incurred by Purchaser in performing
any feasibility studies and related tests and investigations (including any
environmental assessments, audits or reports) and the charges and premium for
the Title Commitment and the Title Policy. Seller shall pay for any transfer
taxes, and the cost of the survey. Each of Purchaser and Seller, respectively,
will bear its own costs for legal, accounting and other services incurred in
connection with the preparation, negotiation and execution of this Agreement and
the purchase and sale of the Property.
Section 7.3 Past Due Rentals. If any past due rentals or charges are
owing by tenants at Closing, Purchaser agrees that the first moneys received by
Purchaser within thirty (30) days after the Closing from such tenants owing such
current rentals or past-due rentals or charges shall be received by Purchaser as
trustee for Seller on account or in payment of such rentals or charges to which
Seller is entitled, and Purchaser agrees to remit forthwith to Seller the amount
of such rentals and charges to which Seller is entitled, out of such first
moneys received by Purchaser from such tenants, less (i) any amounts currently
owed to Purchaser by such tenant under its lease, and (ii) the reasonable
expenses of Purchaser incurred in the collection
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thereof. Seller agrees that following such 90-day period, Purchaser shall have
no further obligation to remit to Seller any delinquent rents. The provisions of
this Section 7.3 shall survive the Closing.
Section 7.4 Taxes. (a) The Seller shall be solely liable for the
filing of all returns relating to and the payment of any and all transfer taxes
incurred in connection with the purchase and sale of the Property and shall
indemnify and hold harmless the Purchaser from and against any and all liability
therefor.
(b) The Purchaser shall be solely responsible for the filing of
all returns relating to and the payment of any and all withholding taxes
incurred in connection with the purchase and sale of the Property and shall
indemnify and hold harmless the Seller from and against any and all liability
therefor.
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.1 Seller's Conditions. The obligation of Seller to sell and
convey the Property under this Agreement is subject to the satisfaction of the
following conditions precedent or conditions concurrent (the satisfaction of
which may be waived only in writing by Seller):
(a) Delivery of all moneys, and delivery and execution by
Purchaser of documents and other instruments required to be delivered by
Purchaser to Seller with respect to the Closing;
(b) Purchaser's covenants, warranties, and representations set
forth herein shall be true and correct in all material respects as of the
Closing Date;
(c) All of the actions by Purchaser contemplated by this
Agreement shall have been completed with respect to the Closing; and
(d) There shall be no incurred default by Purchaser of any of its
obligations under this Agreement.
Section 8.2 Purchaser's Conditions. The obligation of Purchaser to
acquire the Property under this Agreement is subject to the satisfaction of the
following conditions precedent or conditions concurrent (the satisfaction of
which may be waived only in writing by Purchaser):
(a) All of the actions by Seller contemplated by this Agreement
shall have been completed with respect to the Closing;
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(b) Consummation of IPO;
(c) There shall be no incurred default by Seller of any of its
obligations under this Agreement; and
(d) Delivery and execution by Seller of all items and other
instruments required to be delivered by Seller to Purchaser with respect to the
Closing.
Section 8.3 Failure of Condition.
(a) In the event of a failure of any condition contained in
Section 8.2 above, Purchaser may:
(i) Terminate this Agreement, in which event all documents and
funds deposited by Purchaser shall be immediately returned to Purchaser and all
documents deposited by Seller shall be immediately returned to Seller; or
(ii) Close the transaction.
(b) In the event of a failure of any condition contained in
Section 8.1 above, Seller may:
(i) Terminate this Agreement in which event all documents
deposited by Purchaser shall be immediately returned to Purchaser, and all
documents deposited by Seller shall be immediately returned to Seller; or
(ii) Close the transaction.
ARTICLE IX
INDEMNITY
Section 9.1 Purchaser's Indemnity. From and after the Closing Date,
Purchaser hereby agrees to indemnify, defend (with counsel reasonably acceptable
to Seller), protect and hold harmless Seller and its affiliates, directors,
officers, employees and agents against any and all costs, losses, liabilities,
expenses (including attorneys' fees and expenses), judgments, fines and amounts
paid in settlement in connection with claims arising out of or in any way
connected to (a) any inaccuracy in or breach of any representation or warranty
of Purchaser or (b) the Leases or the Contracts accruing prior to the Closing
Date. Such indemnity shall survive the Closing.
Section 9.2 Seller's Indemnity. From and after the Closing Date,
Seller hereby agrees to indemnify, defend (with counsel reasonably acceptable to
Purchaser), protect and hold harmless Purchaser and its affiliates, directors,
officers,
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employees and agents against any and all costs, losses, liabilities, expenses
(including attorneys' fees and expenses), judgments, fines and amounts paid in
settlement in connection with claims arising out of or in any way connected to
the Leases or the Contracts accruing prior to the Closing Date. Such indemnity
shall survive the Closing.
ARTICLE X
CASUALTY; CONDEMNATION
Section 10.1 Casualty. If, prior to Closing, the Property or any
portion thereof is damaged by fire or other casualty, Seller shall promptly
notify Purchaser. If the reasonable cost to restore the Property to the
condition existing prior to such casualty is estimated by Seller's insurance
company to be more than $_________ (the "Threshold Amount"), Purchaser may
terminate this Agreement by written notice to Seller sent within fifteen (15)
days after receipt of Seller's written notice indicating that the restoration
costs are equal to or greater than the Threshold Amount. If Purchaser so
terminates this Agreement, this Agreement shall be of no further force and
effect and the provisions of Section 8.3(a)(i) hereof shall control. If
Purchaser does not so terminate this Agreement with respect to such casualty of
the Property, or if the casualty is less than the Threshold Amount, Purchaser
shall accept the Property subject to the casualty without a reduction in the
Purchase Price and shall receive, on the Closing Date, an assignment of all of
Seller's rights to any insurance proceeds.
Section 10.2 Condemnation. If prior to Closing all or a Material Part
(as hereinafter defined) of the Property is subject to a proposed taking by any
public authority, Seller shall promptly notify Purchaser of such proposed taking
and Purchaser may terminate this Agreement by notice to Seller within fifteen
(15) days after written notice thereof. If Purchaser so terminates this
Agreement with respect to such taking of the Property, this Agreement shall be
of no further force and effect and the provisions of Section 8.3(a)(i) hereof
shall control. If Purchaser does not so terminate this Agreement with respect to
such taking of the Property, or if the taking is as to a non-Material Part of
the Property, Purchaser shall accept the Property subject to the taking without
a reduction in the Purchase Price and shall receive, on the Closing Date, an
assignment of all of Seller's rights to any condemnation award. A "Material
Part" of the Property shall mean a portion of the Property having a value in
excess of $__________ as determined by a licensed appraiser mutually approved by
Seller and Purchaser; provided that if Seller and Purchaser are unable to agree
on such appraiser within ten (10) business days after Purchaser's receipt of
Seller's notice advising of such taking, then the parties hereby appoint and
designate [___________________] as the appraiser.
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ARTICLE XI
BROKERAGE
Section 11.1 Brokerage Commissions. Purchaser and Seller agree that
neither has been involved with a real estate broker or agent in connection with
the purchase and sale of the Property. Each of Seller and Purchaser agrees to
indemnify, defend and hold the other party harmless from any and all demands or
claims which now or hereafter may be asserted against such indemnified party for
any brokerage fees, commissions or similar types of compensation which may be
claimed by any broker, which was engaged or which claims to have been engaged by
the indemnifying party, and all expenses and costs in handling or defending any
such demand or claim. This indemnity shall survive the Closing and not be merged
therein. Nothing contained in this Agreement is intended to be for the benefit
of any person or entity other than Seller and Purchaser and their respective
permitted successors and assigns, except as otherwise expressly provided in this
Agreement. No person or entity, other than Seller, Purchaser, or their
respective permitted successors and assigns, is entitled, as a consequence of
any term, condition, covenant or agreement contained in this Agreement or of
Seller's or Purchaser's failure to observe or perform the same, to seek, claim
or recover damages or any other legal or equitable remedy against Seller or
Purchaser.
ARTICLE XII
NOTICES
Section 12.1 Notices. All notices, requests or demands to a party
hereunder shall be in writing and shall be effective (i) when delivered
personally, (ii) when received by overnight courier service or facsimile
telecommunication (provided that a copy of such notice, request or demand is
deposited into the United States mail within one (1) business day of the
facsimile transmission), or (iii) three (3) days after being deposited into the
United States mail (sent certified or registered, return receipt requested), in
each case addressed as follows (or to such other address as Purchaser or Seller
may designate in accordance with this Section 12.1):
If to Seller:
Skyline Partners, L.P.
c/o Josephthal Lyon & Ross Incorporated.
200 Park Avenue, 25th Floor
New York, New York 10166
Attn: Dan Purjes
Facsimile: (212)-907-4080
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With a copy to:
Attn:
Facsimile:______________
If to Purchaser:
Snowdance, Inc.
Route 44
Brownsville, Vermont 05037
Attn: Mr. Robert Plausteiner
Facsimile: (802)__________
With a copy to:
Sonnenchein Nath & Rosenthal
1221 Avenue of the Americas
New York, NY 10020
Attn: Dennis Berman, Esq.
Facsimile: (212)_________
ARTICLE XIII
DAMAGES
Section 13.1 Purchaser's Default. If Purchaser is unable or fails to
perform any of its obligations under this Agreement, then the letter of intent
between Snowdance and First Allied Securities, Inc. ("First Allied") dated May
21, 1997 relating to the IPO shall be null and void and of no further force and
effect, whereupon neither First Allied nor Seller shall have any liability or
obligation whatsoever to Snowdance or Purchaser (if other than Snowdance).
Section 13.2 Seller's Default. If Seller fails to perform any of its
obligations under this Agreement, Purchaser shall be entitled either (a) to
terminate this Agreement; or (b) pursue a remedy for specific performance in
accordance with applicable law.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Time of the Essence. Time is of the essence as to the
performance of the Purchaser's obligations hereunder.
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Section 14.2 Attorneys' Fees. If any legal action, arbitration or
other proceeding is commenced to enforce or interpret any provision of this
Agreement, the prevailing party shall be entitled to an award of its reasonable
attorneys' fees and expenses actually incurred. The phrase "prevailing party"
shall include a party who receives substantially the relief desired whether by
dismissal, summary judgment, judgment or otherwise.
Section 14.3 No Waiver. No waiver by any party of the performance or
satisfaction of any covenant or condition shall be valid unless in writing and
shall not be considered to be a waiver by such party of any other covenant or
condition hereunder.
Section 14.4 Entire Agreement. This Agreement contains the entire
agreement between the parties regarding the Property and supersedes all prior
agreements, whether written or oral, between the parties regarding the same
subject. This Agreement may only be modified in writing.
Section 14.5 Survival. The delivery of the Deed by Seller and the
acceptance thereof by Purchaser shall be deemed the full performance and
discharge of every obligation on the part of Seller to be performed hereunder,
except those obligations of Seller which are expressly stated in this Agreement
to survive the Closing.
Section 14.6 Successors and Assigns. Subject to Section 14.7, this
Agreement shall bind and inure to the benefit of the parties hereto and to their
respective legal representatives, successors and permitted assigns.
Notwithstanding anything to the contrary contained herein, no party other than
the parties hereto or their respective successors and permitted assigns shall
have any right or benefit herein, including, without limitation, the right to
insist upon or enforce against either Seller or Purchaser the performance of all
or any of their respective obligations hereunder and no such third party shall
be deemed to have received any benefit as a result of any of the provisions of
this Agreement.
Section 14.7 Assignment. Seller's written consent shall be required
for any assignment of Purchaser's rights under this Agreement, which consent
shall not unreasonably be withheld. Any attempted assignment, except with
Seller's prior written consent shall be ineffective and shall constitute a
default under this Agreement. Notwithstanding any assignment hereunder,
Purchaser shall remain liable for the obligations of Purchaser under this
Agreement and the consideration paid for the transfer of the Property shall be
the Shares of Snowdance (and no other entity). Purchaser represents, warrants
and certifies to Seller that Purchaser has not assigned, transferred or
encumbered or agreed to assign, transfer or encumber, directly or
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indirectly, all or any portion of its rights or obligations under this Agreement
except to any such affiliate of Purchaser.
Section 14.8 Relationship of the Parties. The parties acknowledge that
neither party is an agent for the other party, and that neither party shall or
can bind or enter into agreements for the other party.
Section 14.9 Governing Law. This Agreement and the legal relations
between the parties hereto shall be governed by and construed in accordance with
the laws of the state where the Property is located.
Section 14.10 (Intentionally omitted)
Section 14.11 Review by Counsel. The parties acknowledge that each
party and its counsel have reviewed and approved this Agreement, and the parties
hereby agree that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments or exhibits hereto.
Section 14.12 (Intentionally omitted)
Section 14.13 Consent to Jurisdiction; Service of Process. THE
PURCHASER IRREVOCABLY CONSENTS THAT ANY LEGAL ACTION OR PROCEEDING AGAINST IT
UNDER, ARISING OUT OF OR IN ANY MANNER RELATING TO THIS AGREEMENT MAY BE BROUGHT
IN ANY COURT OF WINDHAM COUNTY STATE OF VERMONT OR THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF VERMONT. THE PURCHASER, BY THE EXECUTION AND DELIVERY
OF THIS AGREEMENT, EXPRESSLY AND IRREVOCABLY ASSENTS AND SUBMITS TO THE PERSONAL
JURISDICTION OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING. THE
PURCHASER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF ANY COMPLAINT, SUMMONS,
NOTICE OR OTHER PROCESS RELATING TO ANY SUCH ACTION OR PROCEEDING BY DELIVERY
THEREOF TO IT BY HAND OR BY MAIL IN THE MANNER PROVIDED FOR IN SECTION 12.1
HEREOF. THE PURCHASER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY CLAIM OR
DEFENSE IN ANY SUCH ACTION OR PROCEEDING BASED ON ANY ALLEGED LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS OR ANY SIMILAR BASIS.
NOTHING IN THIS SECTION 14.13 SHALL AFFECT OR IMPAIR IN ANY MANNER OR TO ANY
EXTENT THE RIGHT OF THE SELLER TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST THE PURCHASER IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY
MANNER PERMITTED BY LAW.
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Section 14.14 Business Days. If the last day of the period prescribed
herein for the giving of any notice, election, consent, approval, demand,
objection or request or the submission of any documents by any party hereunder
shall fall on a Saturday, Sunday or any day observed as a public holiday by the
federal government or the state in which the Property is situated, then such
period shall be deemed to be extended to the immediately following day which is
not a Saturday, Sunday or such public holiday. The term "business day" as used
in this Agreement shall mean any day other than Saturday, Sunday or any day
observed as a public holiday by the federal government or the state in which the
Property is situated.
Section 14.15 Certain Terms. Unless otherwise specified herein, (a)
references to persons or parties include their permitted successors and assigns;
(b) references to modifications or amendments shall in all events mean
modifications and amendments; (e) references to statutes are to be construed as
including all rules and regulations adopted pursuant to the statute referred to
and all statutory provisions consolidating, amending or replacing the statute
referred to; (d) references to agreements and other contractual instruments
shall be deemed to include all subsequent amendments and other modifications
thereto entered into from time to time after the date hereof to satisfy the
requirements of this Agreement or otherwise with Seller's prior written consent;
(e) the words "include" or "including", and words of similar import, shall be
deemed to be followed by the words "but not limited to" or "without limitation";
and (f) the words "hereto", "herein", "hereof" and "hereunder", and words of
similar import, refer to this Agreement in its entirety.
Section 14.16 Severability. If any provision of this Agreement shall
be unenforceable or invalid, the same shall not affect the remaining provisions
of this Agreement and to this end the provisions of this Agreement are intended
to be and shall be severable.
Section 14.17 Waiver of Jury Trial. Seller and Purchaser hereby waive
trial by jury in any action, proceeding or counterclaim (whether arising in tort
or contract) brought by either against the other on any matter arising out of or
in any way connected with this Agreement.
Section 14.18 No Recording. The provisions hereof shall not
constitute a lien on the Property and this Agreement shall not be placed or
suffered to be placed by Purchaser for recording with the office of the recorder
for the county in which the Property is located. Purchaser hereby appoints
Seller as Purchaser's true and lawful attorney-in-fact, coupled with an
interest, for the purposes of the execution of such documents and doing such
acts as shall be necessary to effect the discharge of the recording of this
Agreement if such recording shall have been accomplished in violation of this
Section 14.18.
[Section 14.19 Like-Kind Exchange. Upon the written request of
Purchaser, Seller agrees to cooperate with the Purchaser to effect a like-kind
exchange
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of the Property under Section 1031 of the Internal Revenue Code of 1986, as
amended; provided, however, that such exchange shall be accomplished at the sole
cost and expense of Purchaser and shall not cause a delay in the Closing
hereunder. Purchaser hereby indemnifies Seller against any claims, liabilities,
costs or expenses (including, without limitation, reasonable attorneys' fees and
disbursements) arising from the sale of the Property pursuant to a like-kind
exchange (as opposed to a direct sale of the Property). The indemnity contained
in this Section 14.19 shall survive the Closing hereunder.]
Section 14.20 Exclusivity. Seller agrees not to market the Property to
third parties until after the expiration of the Examination Period and then only
in the event that the Purchaser has elected not to purchase the Property.
Section 14.21 Effectiveness. This Agreement shall only be effective if
a counterpart is signed by both Seller and Purchaser.
Section 14.22 Counterparts. This Agreement may be signed by different
parties on different counterpart copies hereof and said counterparts shall
together constitute a single agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement of
Purchase and Sale as of the date first set forth above.
SKYLINE PARTNERS, L.P.
By: SKYLINE PARTNERS, INC., its general
partner
By: _____________________________
Name:
Title:
SNOWDANCE, INC.
By: ___________________________________
Name:______________________________
Title: ____________________________
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SCHEDULE 1.1
[Legal Description of the Property]
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SCHEDULE 1.2
[Intentionally Omitted]
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SCHEDULE 3.1
[Permitted Exceptions]
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SCHEDULE 5.1(iv)
[Existing Leases relating to the Property]
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SCHEDULE 5.1(vi)
[List of Contracts]
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EXHIBIT A
[Form of Deed]
THIS WARRANTY DEED (the "Deed") made this __ day of ____, 1997, between
SKYLINE PARTNERS, L.P. a Delaware limited partnership ("Grantor") and SNOWDANCE,
INC., ("Grantee"), for and in consideration of [Ten Dollars ($10.00)/Actual
Consideration] cash in hand and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Grantor does hereby
grant, sell, transfer and deliver unto Grantee in fee simple with limited
warranty, all that certain parcel of land more particularly described on
Schedule A attached hereto (the "Premises") and made a part hereof;
TOGETHER WITH all of the ways, easements, rights, privileges, improvements,
and appurtenances to the same belonging in any way appertaining; all rights of
Grantor in and to any and all adjoining public and private streets, roadways and
rights-of-way, and any and all easements, rights-of-way, covenants, benefits,
agreements, rights and appurtenances belonging or in any way appertaining to the
Premises; and all of the estate, right, title, interest, and claim either at law
or in equity, or otherwise however, of Grantor of, in, to or out of the
Premises.
SUBJECT, HOWEVER, to all easements, rights-of-way, covenants, and
restrictions of record as of the date of this conveyance.
TO HAVE AND TO HOLD the above described premises together with all and
singular the rights and appurtenances thereto in any wise belonging unto
Grantee, its successors and assigns forever.
AND DOES HEREBY WARRANT and will forever defend same against the claim or
claims of all persons whomsoever claiming or to claim the same or any part
thereof.
IN WITNESS WHEREOF, the Grantor has signed, sealed and delivered this
Warranty Deed as of the date first above written.
SKYLINE PARTNERS, L.P.,
By: Skyline Partners, Inc., its
general partner
By: _______________________
Name:
Title:
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EXHIBIT B
[Form of Assignment and Assumption of Leases]
THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this "Assignment"), made and
entered into this _____ day of ___________, 1997, by and between SKYLINE
PARTNERS, L.P., a Delaware limited partnership ("Assignor"), and SNOWDANCE,
INC.,a_____________ corporation("Assignee").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Purchase and Sale Agreement ("Agreement")
dated as of ___ __, 1997, by and among Assignor and Assignee, Assignor has
agreed, on and subject to the terms and conditions set out therein, to transfer,
convey and assign to Assignee all of Assignor's right, title and interest in, to
and under the real property situated in Windham County, Vermont, and described
in Schedule A attached hereto and made part hereof (the "Property").
WHEREAS, Assignor is the landlord under the leases listed on Exhibit A
attached hereto and made part hereof, relating to the Property (the "Tenant
Leases").
WHEREAS, in connection with the aforesaid transfer, conveyance and
assignment: (i) Assignor desires to assign its entire right, title and interest
in and to the Tenant Leases to Assignee, and (ii) Assignee desires to accept
such assignment and to assume and agree to perform, subject to the terms and
conditions hereof, all of the Assignor's duties, obligations and liabilities
under the Tenant Leases arising or accruing from, on or after the date hereof
(the "Assumption Date").
NOW, THEREFORE, for and in consideration of the sum of Ten Dollars ($10.00)
in hand paid by Assignee to Assignor and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by Assignor,
Assignor and Assignee hereby agree as follows:
1. Assignor hereby assigns, conveys and sets over unto Assignee all of
Assignor's right, title and interest in and to the Tenant Leases. Assignor
agrees to indemnify, protect, defend and hold Assignee harmless from and against
any and all claims, damages, losses, suits, proceedings, costs and expenses
(including, but not limited to, reasonable attorneys' fees and expenses) arising
in connection with the assigned Tenant Leases which first arise or accrued
before the Assumption Date. Such indemnity shall survive the execution and
delivery hereof.
2. Assignee hereby accepts the foregoing assignment, and assumes and agrees
to perform all of the duties, obligations and liabilities of the Assignor under
the
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Tenant Leases which first arise or accrue or are to be performed on or after the
Assumption Date. Assignee agrees to indemnify, protect, defend and hold Assignor
harmless from and against any and all claims, damages, losses, suits,
proceedings, costs and expenses (including, but not limited to, reasonable
attorneys' fees and expenses) arising in connection with the assigned Tenant
Leases which first arise or accrue after the Assumption Date. Such indemnity
shall survive the execution and delivery hereof.
3. This Assignment shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns. This Assignment and the
provisions hereof are solely for the benefit of the parties hereto and their
respective successors and assigns and not any other person; and, without
limiting the generality of the foregoing, no other person shall be deemed to be
a third party beneficiary hereof or shall have any right or remedy hereunder or
with respect to any provision hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Assignment as of the date first above written.
SKYLINE PARTNERS, L.P.
By: Skyline Partners, Inc., its general partner
By: ______________________
Name:
Title:
SNOWDANCE, INC.
By: __________________________
Name:
Title:
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EXHIBIT C
[Form of Assignment and
Assumption of Contracts]
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS (this "Assignment"), made and
entered into this _____ day of ___________, 1997, by and between SKYLINE
PARTNERS, L.P., a Delaware limited partnership ("Assignor"), and SNOWDANCE,
INC., a ________corporation ("Assignee").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Purchase and Sale Agreement ("Agreement")
dated as of August __, 1997, by and among Assignor and Assignee, Assignor has
agreed, on and subject to the terms and conditions set out therein, to transfer,
convey and assign to Assignee all of Assignor's right, title and interest in, to
and under the real property situated in Windham County, State of Vermont, and
described Schedule A attached hereto and made part hereof (the "Property").
WHEREAS, Assignor is a party to the contracts listed on Exhibit A attached
hereto and made part hereof, relating to the Property (the "Contracts").
WHEREAS, in connection with the aforesaid transfer, conveyance and
assignment: (i) Assignor desires to assign its entire right, title and interest
in and to the Contracts to Assignee, and (ii) Assignee desires to accept such
assignment and to assume and agree to perform, subject to the terms and
conditions hereof, all of the Assignor's duties, obligations and liabilities
under the Contracts arising or accruing from, on or after the date hereof (the
"Assumption Date").
NOW, THEREFORE, for and in consideration of the sum of Ten Dollars ($10.00)
in hand paid by Assignee to Assignor and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by Assignor,
Assignor and Assignee hereby agree as follows:
1. Assignor hereby assigns, conveys and sets over unto Assignee all of
Assignor's right, title and interest in and to the Contracts. Assignor agrees to
indemnify, protect, defend and hold Assignee harmless from and against any and
all claims, damages, losses, suits, proceedings, costs and expenses (including,
but not limited to, reasonable attorneys' fees and expenses) arising in
connection with the assigned Contracts which first arise or accrued before the
Assumption Date. Such indemnity shall survive the execution and delivery hereof.
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2. Assignee hereby accepts the foregoing assignment, and assumes and agrees
to perform all of the duties, obligations and liabilities of the Assignor under
the Contracts which first arise or accrue or are to be performed on or after the
Assumption Date. Assignee agrees to indemnify, protect, defend and hold Assignor
harmless from and against any and all claims, damages, losses, suits,
proceedings, costs and expenses (including, but not limited to, reasonable
attorneys' fees and expenses) arising in connection with the assigned Contracts
which first arise or accrue after the Assumption Date. Such indemnity shall
survive the execution and delivery hereof.
3. This Assignment shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns. This Assignment and the
provisions hereof are solely for the benefit of the parties hereto and their
respective successors and assigns and not any other person; and, without
limiting the generality of the foregoing, no other person shall be deemed to be
a third party beneficiary hereof or shall have any right or remedy hereunder or
with respect to any provision hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Assignment as of the date first above written.
SKYLINE PARTNERS, L.P.
By: Skyline Partners, Inc., its general partner
By: _________________________
Name:
Title:
SNOWDANCE, INC.
By: __________________________
Name:
Title:
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EXHIBIT D
FIRPTA AFFIDAVIT
STATE OF NEW YORK )
) SS.
COUNTY OF NEW YORK )
Section 1445 of the Internal Revenue Code provides that a transferee of a
United States real property interest must withhold tax if the transferor is a
foreign person. To inform the transferee that withholding of tax is not required
upon the disposition of a United States real property interest by SKYLINE
PARTNERS, L.P., a Delaware limited partnership ("Seller"), the undersigned
hereby certifies the following on behalf of Seller:
1. Seller is not a foreign corporation, foreign partnership, foreign trust,
or foreign estate (as those terms are defined in the Internal Revenue Code and
Income Tax Regulations); and
2. Seller's U.S. employer tax identification number is _______________; and
3. Seller's office address is c/o Josephthal Lyon & Ross Incorporated, 200
Park Avenue, 25th Floor, New York, New York 10166.
Seller understands that this certification may be disclosed to the Internal
Revenue Service by transferee and that any false statement contained herein
could be punished by fine, imprisonment, or both.
The undersigned officer of Seller declares that she has examined this
certification and to the best of her knowledge and belief it is true, correct
and complete, and she further declares that she has authority to sign this
document on behalf of Seller.
Dated:___________ , 1997
________________________________
Name:
Title:
Sworn to and subscribed before me
this ___ day of __________ 1997.
__________________________________
Notary Public
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FORM OF
SNOWDANCE, INC.
1997 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
Article I
Purpose
The purpose of the Snowdance, Inc. 1997 Stock Option Plan For
Non-Employee Directors (as set forth herein and as amended from time to time,
the "Plan") is to encourage qualified persons to become and remain directors of
Snowdance, Inc. (the "Company") and to promote the interests of the Company and
its stockholders by increasing the proprietary and vested interest of the
non-employee Directors in the growth and performance of the Company.
Article II
Definitions
2.1 "Annual Meeting" means an annual meeting of the stockholders of the
Company.
2.2 "Article" means an Article of this Plan.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Common Stock" means the common stock, par value $0.001 per share, of
the Company.
2.5 "Director" means a member of the Board.
2.6 "Effective Date" shall have the meaning provided in Article XII.
2.7 "Eligible Director" means a Director who is not an employee of the
Company or any of its affiliates as of the date of any grant of an
Option to him/her; provided, however, that in no event shall Mr. Dan
Purjes be deemed an Eligible Director.
2.8 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.9 "Fair Market Value" of a security means, as of any applicable date:
(i) if the security is listed for trading on a national
securities exchange or the NASDAQ National Market, the closing price,
regular way, of the security as reported on the consolidated transaction
reporting system applicable to such security, or if no such reported
sale of the security shall have occurred on such date, on the next
preceding date on which there was such a reported sale, or
(ii) if the security is not listed for trading on a national
securities exchange or the NASDAQ National Market, but is listed on the
NASDAQ SmallCap Market, the average
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of the closing bid and asked prices, regular way, on the NASDAQ SmallCap
Market or, if no such prices shall have been so reported for such date,
on the latest preceding date for which such prices were so reported.
2.10 "Grantee" means the holder of an Option or any person entitled to
exercise an Option under Article VI.
2.11 "Option" means a right to purchase Common Stock granted under this Plan.
2.12 "Section 16 Person" means a person who is subject to potential liability
under Section 16(b) of the Exchange Act with respect to transactions
involving equity securities of the Company.
2.13 "Term" shall have the meaning provided in Article 5.2.
Article III
Administration
The Plan is intended to allow Eligible Directors to receive Options and
to require no discretionary action by any administrative body with regard to any
transaction under the Plan. Subject to the provisions of the Plan, the Board
shall have the power to construe and interpret the Plan, to determine all
questions (including factual questions) arising thereunder, and to establish,
amend and rescind any rules for the administration of the Plan as it may deem
desirable; provided, however, that no such interpretation or rule shall change
those Directors eligible to receive Options, change the number of Options that
may be granted under the Plan, change the number of shares of Common Stock
subject to any Options or the terms upon which, or the times at which, or the
periods within which, such Options may be exercised. Any decision of the Board
in the administration of the Plan shall be final. No Director shall be liable
for anything done or omitted to be done by such Director or by any other
Director in connection with the Plan, except for such Director's willful
misconduct.
Article IV
Amount of Common Stock
The aggregate number of shares of Common Stock in respect of which
Options may be exercised shall not exceed 150,000, subject to adjustment
pursuant to Article VII. Such shares of Common Stock shall be authorized but
unissued shares of Common Stock or treasury shares. If any Options terminate or
expire without being exercised in whole or in part, new Options may be granted
covering the shares not purchased under such lapsed Options.
Article V
Grant of Options
5.1 Grant of Options. Immediately following the date of each Annual Meeting
commencing with the meeting following the close of fiscal year 1997,
each Eligible Director who is elected or re-elected to serve as a
Director shall automatically be granted an Option in respect of 5,000
shares of Common Stock (each, an "Annual Grant"). In addition, upon
first election or appointment to the Board, each newly elected or
appointed Eligible
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Director shall be granted an Option to purchase 5,000 shares of Common
Stock (the"Initial Grant"). No Eligible Director may be awarded more
than one Initial Grant and no Director may be awarded both an Initial
Grant and an Annual Grant in any 12 month period. For the purposes of
the Plan, only Eligible Directors who attend 75% of Board and committee
meetings applicable to such Eligible Director during the fiscal year
immediately preceding the applicable Annual Meeting shall be granted an
Annual Grant and shall be deemed an Eligible Director for such purposes.
5.2 Term of Options. Unless earlier terminated as provided herein, each
Option shall have a term of 5 years from the date of grant (the "Term").
5.3 Exercise Price. The exercise price per share of Common Stock shall be
100% of the Fair Market Value of a share of Common Stock on the date of
grant, subject to adjustment pursuant to Article VII.
5.4 Option Agreements. Each Option shall be evidenced by an agreement in
such form as the Board shall prescribe from time to time which shall set
forth or incorporate by reference the terms and conditions of the
Option.
Article VI
Exercise of Options
6.1 Vesting. An Option shall become exercisable, in whole or in part, on the
earlier of (i) the first anniversary of the grant date of such Option,
or (ii) death, or (iii) disability; provided in each such case that the
Grantee has remained an Eligible Director at all times since such grant
date.
6.2 Exercise. An Option shall be exercised by delivery to the Company during
the Term of the Option of (i) written notice of the exercise specifying
the number of shares of Common Stock to be purchased and (ii) payment in
full for the shares of Common Stock being acquired thereunder. Payment
may be made in cash or alternatively, if permitted by the Board at the
time of grant, the exercise price may be paid, in whole or in part, by
exchanging previously owned shares of Common Stock that have been held
by the Director for at least 6 months with a Fair Market Value equal to
the portion of the Option exercise price not elected to be paid in cash.
Common Stock tendered to the Company in satisfaction or partial
satisfaction of the exercise price of any award will increase the number
of shares available for awards except to the extent prohibited by Rule
16b-3 under the Exchange Act.
6.3 Limitation on Transferability of Options. An Option by its terms shall
not be transferable by the Grantee other than by will or by the laws of
descent and distribution, and shall be exercisable, during the lifetime
of the Grantee, only by the Grantee.
6.4 Exercise After Termination of Directorship. If a person shall cease to
be an Eligible Director for any reason while holding an unexpired Option
that has not been fully exercised, such Option shall thereupon
terminate; provided that such person, or in the case of his death or
adjudication of incompetency, his executor, administrator, distributees,
guardian or legal representative, as the case may be, may exercise the
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Option (to the extent that it was exercisable pursuant to Section
6.1 on the date the person ceased to be an Eligible Director) at any
time until the earliest to occur of (i) one year after the date such
person ceased to be an Eligible Director, or (ii) the expiration of the
Term of such Option.
6.5 Exercise after Death. If an Option is exercised by the executors,
administrators, legatees or distributees of the estate of a deceased
Grantee or by the guardian or legal representative of a Grantee, the
Company shall be under no obligation to issue Common Stock thereunder
unless it is satisfied that the person or persons exercising the Option
are the duly appointed legal representatives of the optionee or of the
deceased optionee's estate or the proper legatees or distributees of
such estate, as applicable.
Article VII
Adjustments upon Changes in Capitalization
7.1 Adjustments. If the outstanding Common Stock is changed by reason of
reorganization, merger, consolidation, recapitalization,
reclassification, stock split, reverse stock split, stock dividend,
rights offering, combination, spinoff, exchange of shares, or the like,
an appropriate adjustment shall be made by the Board to (i) the
aggregate number of shares then-remaining available under the Plan, (ii)
the number of shares of Common Stock in respect of which Options are
subsequently to be granted, and (iii) to the extent that the following
adjustments are necessary to preserve the economic value of unexercised
Options, the number or type of shares of Common Stock subject to, and
the exercise price of, outstanding Options.
7.2 No Fractional Shares. If a fraction of a share would otherwise result
from any adjustment pursuant to Section 7.1, the adjusted share amount
shall be reduced to the next lower whole number.
Article VIII
Miscellaneous
8.1 Expenses. The expenses of the Plan shall be borne by the Company. Any
taxes imposed on a Grantee upon exercise of an Option shall be paid by
such Grantee.
8.2 No Right to Re-Election. Neither the Plan nor any action taken hereunder
shall be construed as giving any Director any right to be retained or
re-elected as a Director.
8.3 Securities Registration. The Company shall not be obligated to deliver
any shares of Common Stock hereunder until such shares have been listed
on each securities exchange or national market system on which the
Common Stock may then be listed, and until there has been compliance
with such state or federal laws as the Company may deem applicable.
8.4 Taxes. The Company shall not be required to issue shares of Common Stock
upon the exercise of an Option unless the Grantee first pays to the
Company such amount, if any, as may be requested by the Company to
satisfy any liability to withhold federal, state, local or foreign
income or other taxes relating to such exercise.
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8.5 Rights as Stockholder. A Grantee shall not by reason of any Option have
any right as a stockholder of the Company with respect to the shares of
Common Stock which may be deliverable upon exercise of such Option until
such shares have been delivered to him.
8.6 Severability. If all or any part of the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any portion of the Plan not
declared to be unlawful or invalid. Any Article or part of an Article so
declared to be unlawful or invalid shall, if possible, be construed in a
manner which gives effect to the terms of such Article or part of an
Article to the fullest extent possible while remaining lawful and valid.
8.7 Applicable Law. The law of Delaware, except its law with respect to
choice of law, shall be controlling in all matters relating to the Plan,
except to the extent that such laws are preempted by the federal laws of
the United States of America.
Article IX
Amendment
9.1 Amendment. The Board may amend or revise the Plan in whole or in part at
any time; provided, however, that:
(i) no amendment of the Plan shall adversely affect the rights of any
Grantee under an Option without the consent of such Grantee;
(ii) subject to section 7.1, the following amendments or revisions shall
be subject to approval of the holders of a majority of the Company's
outstanding capital stock:
(a) an increase in the number of shares of Common Stock as to
which Options may be granted;
(b) a change in the number of shares of Common Stock which may be
optioned to any single individual;
(c) the vesting conditions, terms of exercisability, timing,
amount or exercise price of Options;
(d) an extension of the term of the Plan or the term of an Option
previously granted;
(e) a change in the class of individuals eligible to be granted
an Option; or
(f) any change which requires an amendment of the Company's
Certificate of Incorporation; and
(iii) any amendment or revision of the Plan, subject to the provisions
of Section 9.1(i) and (ii) above, shall be subject to the approval of
the holders of a majority of the shares of Common Stock present and
entitled to vote at a meeting of the Company's stockholders to the
extent that such approval is required by the listing requirements of
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any securities exchange or national market system on which are then
listed the Company's equity securities.
Article X
Approval of Plan
This Plan shall be contingent on the approval thereof by the
stockholders of the Company no later than the first Annual Meeting of
Stockholders held after the adoption by the Board of the Plan. No Option granted
hereunder shall be effective, nor shall any such Option be exercised or any
shares of Common Stock issued or purchased hereunder, prior to the approval of
the Plan by the stockholders of the Company.
Article XI
Termination
The Plan shall terminate on the day following the tenth Annual Meeting
at which Directors are elected, unless sooner terminated by the Board. Any
termination of the Plan shall not affect any Option then outstanding.
Article XII
Effective Date
The Plan shall become effective on _______________ __, 1997.
Executed this ___ day of _________, 1997.
SNOWDANCE, INC.
By: _________________________________
Title: _________________________________
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FORM OF EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the "Agreement") is made and entered into as of
______ __, 1997 by and among Steven H. Plausteiner, a resident of the State of
Vermont, ("Steven"), Susan D. Plausteiner, a resident of the State of Vermont
("Susan"; Susan and Steven are sometimes referred to herein collectively as the
"Plausteiners"), Snowdance Ski Company ("Ski"), a Delaware corporation and
general partner of Ascutney Mountain Resort, L.P., Snowdance Hotel Company
("Hotel"), a Delaware corporation and general partner of Ascutney Mountain
Resort Hotel, L.P., Snowdance Realty Company ("Realty"), a Delaware corporation
and general partner of Ascutney Mountain Resort Realty, L.P.; Steven, Susan,
Ski, Hotel and Realty are sometimes collectively referred to herein as the
"Partners" and individually as a "Partner") and Snowdance, Inc., a Delaware
corporation (the "Company").
RECITALS
WHEREAS, the partnership interests (the "Resort Partnership Interests")
of Ascutney Mountain Resort, L.P. ("Resort L.P.") are owned beneficially and
held of record as follows:
Ski....................................................1%
Susan.................................................89%
Steven................................................10%;
WHEREAS, the partnership interests (the "Hotel Partnership Interests")
of Ascutney Mountain Resort Hotel, L.P. ("Hotel L.P.") are owned beneficially
and held of record as follows:
Hotel..................................................1%
Susan.................................................89%
Steven................................................10%;
WHEREAS, the partnership interests (the "Realty Partnership Interests")
of Ascutney Mountain Resort Realty, L.P. ("Realty L.P.") are owned beneficially
and held of record as follows:
Realty.................................................1%
Susan.................................................89%
Steven................................................10%;
WHEREAS, Susan is the sole beneficial and record owner of the
outstanding capital stock of Ski, Hotel and Realty;
WHEREAS, Susan and Steven are the only beneficial and record owners of
the outstanding capital stock of Ascutney Mountain Foods, Inc. ("Foods"), a
Vermont corporation; and
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WHEREAS, after the exchange below, the parties also desire to terminate
the following Partnership Agreements, each dated as of August 23, 1993 (the
"Partnership Agreements"): Agreement of Limited Partnership Agreement among Ski,
Susan and Steven; Agreement of Limited Partnership Agreement among Hotel, Susan
and Steven and Agreement of Limited Partnership Agreement among Realty, Susan
and Steven.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements set forth
herein, the parties hereto agree as follows:
1. Transfer of Partnership Interests by the Plausteiners. Each of
the Plausteiners hereby transfers and assigns to the Company, and the Company
hereby acquires from the Plausteiners, (a) all of the Resort Partnership
Interests owned beneficially and held by the Plausteiners, (b) all of the Hotel
Partnership Interests owned beneficially and held by the Plausteiners and (c)
all of the Realty Partnership Interests owned beneficially and held by the
Plausteiners (collectively, the "Partnership Interests").
2. Transfer of Common Stock by Susan and Steven. Susan hereby
transfers and assigns to the Company, and the Company hereby acquires from
Susan, (a) all of the common stock of Ski owned beneficially and held by Susan,
(b) all of the common stock of Hotel owned beneficially and held by Susan and
(c) all of the common stock of Realty owned beneficially and held by Susan
(collectively, the "GP Common Stock"). In addition, the Plausteiners hereby
transfer and assign to the Company and the Company hereby acquires from the
Plausteiners all of the common stock of Foods owned beneficially and held by the
Plausteiners.
3. Issuance of Shares by the Company. In exchange for each of the
Partnership Interests transferred by the Plausteiners to the Company pursuant to
Section 1 and all of the GP common Stock transferred by Susan to the Company
pursuant to Section 2, the Company hereby issues to Susan and Steven the
following number of duly authorized, validly issued, fully paid and
nonassessable shares of Company Common Stock:
Susan: ___ shares of Company Common Stock for Susan's
partnership interests in Resort L.P.
___ shares of Company Common Stock for Susan's
partnership interests in Hotel L.P.
___ shares of Company Common Stock for Susan's
partnership interests in Realty L.P.
___ shares of Company Common Stock for Susan's common
stock in Ski
___ shares of Company Common Stock for Susan's common
stock in Hotel
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___ shares of Company Common Stock for Susan's common
stock in Realty
___ shares of Company Common Stock for Susan's common
stock in Foods
Steven: ___ shares of Company Common Stock for Steven's
partnership interests in Resort L.P.
___ shares of Company Common Stock for Steven's
partnership interests in Hotel L.P.
___ shares of Company Common Stock for Steven's
partnership interests in Realty L.P.
___ shares of Company Common Stock for Steven's common
stock in Foods
4. Termination of Partnership Agreements. After the exchanges
pursuant to Sections 1, 2 and 3 above, the parties agree that the Partnership
Agreements are hereby terminated and shall have no further force and effect.
5. Representations of the Partners.
5.1 Each of the Partners severally represents and warrants to the
Company that he or she or it has valid and marketable title to its respective
Resort Partnership Interests, Hotel Partnership Interests and Realty Partnership
Interests set forth in the Recitals, free and clear of all liens, charges,
encumbrances, equities, claims, options, proxies, pledges, security interests
and rights of whatever nature, and the transfer of such partnership interests to
the Company by the Plausteiners, directly, and by Ski, Hotel and Realty,
indirectly, hereunder shall pass good and marketable title to such Resort
Partnership Interests, Hotel Partnership Interests and Realty Partnership
Interests, free and clear of all liens, charges, encumbrances, equities, claims,
options, proxies, pledges, security interests and rights of whatever nature.
5.2 Each of the Partners severally represents and warrants to the
Company that he or she or it has the absolute and unrestricted right, power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder, and this Agreement is a valid and binding agreement of each of the
Partners enforceable against each of them in accordance with its terms.
5.3 Each of the Plausteiners severally represents and warrants to
the Company that he or she is acquiring the Company Common Stock for investment
and not with a view to or for sale in connection with any distribution of the
Company Common Stock, other than 70,000 shares of Company Common Stock that is
registered on Form SB-2 and subject to an over-allotment option (the "Registered
Stock"). Except for the Registered Stock, each of the Plausteiners severally
acknowledges that the Company Common Stock has not been registered under the
Securities Act of 1933, as amended, that any disposition of the Company Common
Stock is subject to restrictions imposed by federal and state law, and that
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the certificates representing the Company Common Stock will bear a restrictive
legend. Each of the Plausteiners severally also acknowledges that he or she
cannot dispose of the Company Common Stock absent registration and
qualification, or an available exemption from registration and qualification.
6. Representation of the Company. The Company represents and
warrants to each of the Plausteiners (i) that the Company has the absolute and
unrestricted right, power and authority to execute and deliver this Agreement
and to perform its obligations hereunder, (ii) this Agreement is a valid and
binding agreement of the Company enforceable against the Company in accordance
with its terms and (iii) that the shares of Company Common Stock have been duly
authorized and validly issued, and are fully paid and nonassessable.
7. Further Assurances. Each of the parties hereto covenants that
he, she or it shall cooperate with the other parties hereto and execute such
further instruments and documents as any of the parties shall reasonably request
to carry out the transactions contemplated by this Agreement.
8. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the date first written above.
_____________________________
STEVEN H. PLAUSTEINER
_____________________________
SUSAN D. PLAUSTEINER
_____________________________
SNOWDANCE SKI COMPANY
By: _________________________
Its:_________________________
SNOWDANCE HOTEL COMPANY
By: _________________________
Its:_________________________
SNOWDANCE REALTY COMPANY
By: _________________________
Its:_________________________
SNOWDANCE, INC.
By: _________________________
Its:_________________________
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The accompanying financial statements give effect to the consummation of
the Combination as described in Note 1 to the financial statements. The
following consent is in the form that will be furnished by Deloitte &
Touche LLP upon consummation of the Combination assuming that no other
material events have occurred that would affect the accompanying
financial statements or required disclosures therein.
Deloitte & Touche LLP
New York, New York
August 11, 1997
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement of Snowdance, Inc.
on Form SB-2 of our report dated July 11, 1997 (September ___, 1997 as to Note
1), appearing in the Prospectus, which is part of this Registration Statement.
We also consent to the reference to us under the headings "Selected
Financial Data" and "Experts" in such Prospectus.
New York, New York
September ____, 1997
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Consent
I, Dan Purjes, do hereby consent to the use of my name in the
Registration Statement on Form SB-2 to be filed by Snowdance, Inc. on August 11,
1997 in connection with the issuance of 800,000 shares of its Common Stock.
------------------------
Dan Purjes
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