EXHIBIT 10.78
SECOND MORTGAGE DEED, SECURITY AGREEMENT
AND FINANCING STATEMENT
KNOW ALL BY THESE PRESENTS, that MOUNT CRANMORE SKI RESORT, INC., a
Delaware corporation, having a mailing address of Skimobile Road, North Conway,
New Hampshire, (hereinafter called "Grantor"), does hereby GIVE, GRANT, BARGAIN,
SELL, ASSIGN and CONVEY unto American Skiing Company, a Maine corporation
(hereinafter called "Grantee"), its successors and assigns forever, WITH
MORTGAGE COVENANTS to secure payment of that certain Subordinated Promissory
Note dated as of the date hereof from Booth Creek Ski Acquisition Corp.,
Waterville Valley Ski Resort, Inc. and Mount Cranmore Ski Resort, Inc., as
co-makers, in the principal amount of Two Million Seven Hundred Fifty Thousands
Dollars ($2,750,000) with interest and other charges, as applicable, in
accordance with the terms and conditions of the said Subordinated Promissory
Note, which note, together with any extensions, amendments, modifications,
replacements or substitutions thereof or thereto, is referred to herein as the
"Note", all as hereafter set forth, a certain lot or parcel of land situated in
Xxxxxxx County, New Hampshire, and all improvements thereon and all easements,
rights and appurtenances thereto, which lot or parcel is bounded and described
on Exhibit A attached hereto and by this reference incorporated herein;
provided, however, that all grants contained herein and all rights of Grantee
hereunder are subordinated to the prior and superior rights of the holders of
Senior Debt (as such term is defined in the Note) pursuant to the terms and
conditions set forth in the Note.
Also hereby conveying all of the Grantor's right, title and interest in
and to the fee underlying all public or private rights-of-way, easements,
streets and alleys over, contiguous, benefiting or appurtenant to the premises
conveyed hereby.
(All of the above are collectively referred to herein as the "Premises".)
As additional security for payment and performance of the Note and the
covenants and agreements described herein, Grantor hereby transfers, assigns and
grants a second mortgage and security interest to Grantee in the following
property and in all additions, accessions, substitutions and replacements
thereto and therefor (which personal property, together with all additions,
accessions, substitutions and replacements thereto and therefor are collectively
referred to herein as the "Personal Property Collateral"), such second mortgage
and security interest to be subject to and subordinate to the prior and superior
rights of the holders of Senior Debt pursuant to the terms and conditions set
forth in the Note:
(a) All rents, profits, revenues, royalties, rights and benefits
under any and all leases or tenancies now existing or hereafter created of the
Premises or any part thereof and all deposits granted to secure the tenants'
performance thereunder, and all other income, receivables, general intangibles,
products and proceeds derived from the ownership, management and operation of
the Premises, with the right to receive and apply the same to the obligations
secured hereby, and Grantee may demand, xxx for and recover such payments, but
shall not be required to do so; provided, however, that so long as Grantor is
not in default hereunder, as hereinafter defined, the right to receive and
retain such rents, issues, profits and income is reserved to Grantor. Nothing
herein shall obligate Grantee to perform the duties of Grantor as landlord or
lessor under any such leases or tenancies, which duties Grantor hereby covenants
and agrees to well and punctually perform;
(b) All judgments, awards of damages and settlements hereafter made
as a result or in lieu of any taking of the Premises or any interest therein or
part thereof under the power of eminent domain, or for any damage (whether
caused by such taking or otherwise) to the Premises, or the improvements thereon
or any part thereof, including any award for change of grade of streets, now
existing or hereafter arising. Grantee may apply all such sums or any part
thereof so received to the obligations secured hereby in such manner as it
elects or, at its option, the entire amount, or any part thereof so received,
may be released. Grantor hereby irrevocably authorizes and appoints Grantee as
Grantor's attorney-in-fact to collect and receive any such judgments, awards and
settlements from the authorities or entities making the same, to appear in any
proceeding therefor, to give receipts and acquaintances therefor, and to apply
the same to payment on account of the obligations secured hereby, whether then
matured or not; and Grantor will execute and deliver to Grantee on demand such
assignments and other instruments as Grantee may require for said purposes and
will reimburse Grantee for its costs (including counsel fees) in the collection
of such judgments and settlements; and
(c) All machinery, equipment, construction materials and supplies,
furniture, fixtures and other personal property, including inventory, of
Grantor, now owned or hereafter acquired by Grantor, located at or on the
Premises, including without limitation all ski lifts, snowmaking equipment, snow
grooming equipment, compressors, pumps and pumphouse structures, plumbing,
electrical, heating, ventilating, lighting and air conditioning equipment or
apparatus, water tanks, mantels, screens, storm doors and windows, screen doors,
window shades, awnings, garbage incinerators and receptacles, elevators and
elevator machinery, boilers, tanks, motors, sprinkler and fire extinguishing
systems, doorbell and alarm systems, and all other personal property of whatever
kind or nature now or hereafter affixed to the Premises together with all
accessions and additions thereto, substitutions and replacements thereof,
electronic programs and software used with, and parts and accessories therefor,
all cash or non-cash proceeds thereof (although no disposition thereof by
Grantor is thereby authorized) including, without limitation, insurance
proceeds.
(d) All permits, licenses, authorizations and approvals relating to
the operation of the Premises as a ski resort (other than any permits, licenses,
authorization or approvals for which an assignment or grant of a security
interest is prohibited by the contractual terms thereof or under applicable
law);
(e) All contracts, agreements, leases and commitments necessary for,
or used or useful in the operation of the Premises as a ski resort (other than
any contracts, agreements, leases or commitments for which an assignment or
grant of a security interest is prohibited by the contractual terms thereof or
under applicable law).
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Receipt of rents, awards and any other monies or evidences thereof,
pursuant to the provisions of the foregoing paragraphs (a) through (e) and any
disposition of the same by Grantee shall not constitute a waiver of the right of
foreclosure by Grantee in the event of default or failure of performance by
Grantor of any covenant or agreement contained herein or in the note secured
hereby which right of foreclosure is limited pursuant to paragraph 7 hereof.
TO HAVE AND TO HOLD, subject to the prior and superior rights of the
holders of Senior Debt pursuant to the Note, the aforegranted and bargained
Premises and Personal Property Collateral, with all the privileges and
appurtenances thereof (all of which are collectively referred to hereinafter as
the "Mortgaged Property"), to Grantee, its successors and assigns, to their use
forever; PROVIDED, NEVERTHELESS, that if Grantor pays to Grantee the sum of TWO
MILLION SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($2,750,000.00) together with
interest thereon and such other amounts as may become due and payable under the
terms of the Note, and performs all of Grantor's obligations, covenants and
agreements contained herein, then this Second Mortgage Deed, Security Agreement
and Financing Statement shall be void, otherwise it shall remain in full force.
Grantor, for itself, its successors and assigns, covenants and agrees with
Grantee, its successors and assigns, as follows:
1. Grantor is lawfully seized of an indefeasible estate in fee simple,
free from encumbrances other than Permitted Liens (as defined below), and has
good right and power to convey the Mortgaged Property to Grantee to hold as
aforesaid and that Grantor shall and will Warrant and Defend the same to Grantee
forever against the claims and demands of all persons other than holders of
Senior Debt. For purposes herein, "Permitted Liens" shall mean (a) liens and
encumbrances in favor of the United States of America or any political
subdivision thereof to secure partial payments under contracts, (b) all liens
and encumbrances incurred or deposits made in connection with workers'
compensation, unemployment insurance and other types of social security
benefits, or to secure the performance of statutory obligations, surety and
appeal bonds, bids, leases, performance and return-of-money bonds and other
similar obligations, (c) liens and encumbrances for taxes, assessments or
governmental charges not then due, (d) liens and encumbrances arising in
connection with court proceedings, (e) liens and encumbrances in the nature of
zoning restrictions, easements, rights and restrictions of record on the use of
real property, and all exceptions to title as are set forth in the title
insurance policy or title commitment delivered to Grantor, (f) liens and
encumbrances incidental to the conduct of business or the ownership of
properties and assets (including warehousemen's and attorney's liens, mechanics;
liens, materialmen's liens, carriers' liens and statutory landlords' liens) and
liens to secure the performance of bids, tenders or trade contracts, or to
secure statutory obligations, surety or appeal bonds or other liens of a like
general nature, and (g) liens and encumbrances securing Senior Debt.
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2. Grantor shall pay all sums secured hereby pursuant to the terms of the
Note.
3. Grantor shall pay, when due, all taxes and assessments of every type or
nature levied or assessed against the Mortgaged Property and any claim, lien or
encumbrance against the Premises, the buildings, improvements, fixtures and
personal property thereon.
4. Grantor shall have and maintain on the Premises and the buildings,
improvements, fixtures and personal property thereon, insurance against fire and
other casualty and general liability insurance in amounts and with coverages
consistent with customary industry practices, which insurance shall contain the
Standard Maine Mortgagee Clause with loss payable to the holders of Senior Debt
and the Grantee as their interests may appear. Receipt of any insurance proceeds
and any disposition of the same by Grantee shall not constitute a waiver of any
rights of Grantee, statutory or otherwise, and specifically shall not constitute
a waiver of the right of foreclosure by Grantee in the event of default or
failure of performance by Grantor of any covenant or agreement contained herein
or any note secured hereby.
5. Grantor shall maintain the Mortgaged Property in good condition and
repair, ordinary wear and tear excepted, shall not commit or suffer any material
waste thereof and shall comply in all material respects with all laws,
ordinances, regulations, covenants, conditions and restrictions affecting the
Mortgaged Property except where the failure to so comply could not reasonably be
expected to have a material adverse effect on the business of Grantor.
6. If Grantor fails to pay any claim, lien or encumbrance or any tax,
assessment or insurance premium when due, unless being contested in good faith,
or to keep the Mortgaged Property in good condition and repair, ordinary wear
and tear excepted, or shall commit or permit any material waste, or if there be
commenced any action or proceeding affecting this Mortgage or the indebtedness
secured hereby, the lien established hereunder upon the Mortgaged Property, then
Grantee, at its option, may pay said claim, lien, encumbrance, tax, assessment
or premium, with right of subrogation thereunder, may procure such abstracts or
other evidence of title as it deems reasonably necessary, may make such repairs
and take such steps as it deems reasonably necessary to prevent or cure such
waste, and may appear in any such action or proceeding and retain counsel
therein, and take such action therein as Grantee deems reasonably necessary, and
for any of said purposes Grantee may advance such sums of money as it deems
reasonably necessary.
7. The Grantee may not unilaterally commence proceedings to enforce any
rights or remedies that it may have against the Grantor or any of the Mortgaged
Property under this Mortgage until the later to occur of the passage of 360 days
after the receipt by Grantor and the holders of Senior Debt of notice from
Grantee that a default has occurred under this Mortgage.
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8. This Mortgage shall constitute a security agreement with respect to the
Personal Property Collateral whether now owned or hereafter acquired. Grantor
hereby grants and conveys to Grantee, its successors and assigns, a security
interest in the Personal Property Collateral. The security interest and other
rights established hereunder are subject to and subordinate to the prior and
superior security interest of the holders of Senior Debt. Grantee shall give
Grantor notice, by registered mail, postage prepaid, of the time and place of
any public sale of any of the Personal Property Collateral or of the time any
private sale or other intended disposition thereof is to be made by sending
notice to Grantor at least ten (10) days before the time of the sale or other
disposition, which provisions for notice Grantor and Grantee hereby agree are
reasonable; provided, however, that nothing herein shall preclude Grantee from
proceeding as to both real and personal property in accordance with Grantee's
rights and remedies in respect of the real property covered hereby. Grantee
shall have all of the remedies of a secured party under the Uniform Commercial
Code as now in effect in the State of New Hampshire and such further remedies as
may from time to time hereafter be provided in New Hampshire for a secured party
subject to the prior and superior right of the holders of Senior Debt. Grantor
agrees that all rights of Grantee as to said Personal Property Collateral and as
to said real estate, and rights and interests appurtenant thereto, may be
exercised together or separately and further agrees that in exercising its power
of sale as to said Personal Property Collateral and as to said real estate, and
rights and interests appurtenant thereto, Grantee may sell the Personal Property
Collateral or any part thereof, either separately from or together with the said
real estate, rights and interests appurtenant thereto, or any part thereof, all
as Grantee in its discretion elects subject to the prior and superior right of
the holders of Senior Debt.
9. This instrument is intended to serve as a FINANCING STATEMENT under the
New Hampshire Uniform Commercial Code with respect to the Personal Property
Collateral. The address of Grantor (Debtor) is Xxxxxxxxx Xxxx, Xxxxx Xxxxxx, Xxx
Xxxxxxxxx. The address of Grantee (Secured Party) is X.X. Xxx 000, Xxxxxx, Xxxxx
00000.
10. Subject to the prior and superior right of the holders of Senior Debt,
it is an additional condition of Grantor herein for breach of which foreclosure
may be claimed and for breach of which all indebtedness secured hereby may be
declared due and payable at once, that legal or beneficial title to the within
described Mortgaged Property shall not pass from Grantor by deed, mortgage,
pledge, encumbrance, lien, lease of the Mortgaged Property in its entirety or
substantially in its entirety to one person or entity for a term in excess of
one year, conditional sale, title retention agreement or operation of law, or
from any subsequent title holder, either voluntarily or involuntarily. Any
change in the legal or equitable title or ownership of the Premises or the
Personal Property Collateral or in the beneficial ownership of the Premises or
Personal Property Collateral, whether or not of record and whether or not for
consideration, or any sale, transfer or other disposition or new issuance of any
or all of the stock of Grantor if Grantor is a corporation, or of any or all of
the partnership interest of Grantor or admission of new partners, if Grantor is
a limited or general partnership, shall be deemed to be a sale of the Premises
and the Personal Property Collateral and shall, unless done with the prior
written consent of Grantee, constitute a breach of this covenant and shall be a
default hereunder.
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This condition shall continue until all indebtedness and obligations secured
hereby are satisfied, and permission given or election not to foreclose or
accelerate said indebtedness by Grantee, its successors or assigns, as to any
one such transfer, shall not constitute a waiver of any rights of Grantee, its
successors or assigns, as to any subsequent such transfer of title as to which
this condition shall remain in full force and effect. The term title as used
herein shall mean the estate of Grantor subject to the lien of this Mortgage.
11. The covenants and agreements herein contained shall bind, and the
benefits and advantages thereof shall inure to, the respective heirs, executors,
administrators, successors and assigns of Grantor, Grantee and the holders of
Senior Debt. Wherever used, the singular number shall include the plural, the
plural shall include the singular and the use of any gender shall be applicable
to all genders.
12. This Mortgage is given upon the STATUTORY CONDITION, a breach of which
shall be an event of default hereunder. The covenants and agreements set forth
herein are in addition to the covenants and agreements set forth in the
Statutory Condition.
13. The Grantee, its heirs, personal representatives, successors and
assigns, for breach of any term, condition, covenant or agreement contained or
referred to herein or upon breach of the Statutory Condition, shall have the
right of foreclosure and any and all other rights and remedies given to a
Mortgagee and Secured Party under the law of New Hampshire as of the date hereof
or at the time of such breach, including without limitation the STATUTORY POWER
OF SALE, which is expressly incorporated herein by reference, to the extent
authorized by any present or future law of the State of New Hampshire subject to
the limitations set forth in Paragraph 7. This Mortgage is given primarily for a
business, commercial or agricultural purpose. Grantor warrants that the loan
proceeds secured by this Mortgage will be used for, and this Mortgage is given
primarily for, business, commercial or agricultural purposes.
14. If any obligation or portion of this Mortgage is determined to be
invalid or unenforceable under law, it shall not affect the validity or
enforcement of the remaining obligations or portions hereof.
The provisions of this Mortgage regarding subordination and other matters
relating to the holders of Senior Debt are for the benefit of the holders of
Senior Debt and may be enforced directly by them against the Grantee. The
Grantee acknowledges and agrees, by acceptance hereof, that the holders of the
Senior Debt have relied upon and will continue to rely upon the subordination
provided for herein in entering into the transaction to which they are a party
and making the extensions of credit comprising the Senior Debt. The Grantee
hereby waives notice of or proof of reliance hereon.
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IN WITNESS WHEREOF, the undersigned party hereto has caused its duly
authorized officer to execute and deliver this Second Mortgage Deed, Security
Agreement and Financing Statement as of this 27th day of November, 1996.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF: MOUNT CRANMORE SKI RESORT, INC.
/s/ [Illegible] By: /s/ Xxxxxxx X. Xxxxx
---------------------------- ------------------------------
Print Name: Xxxxxxx X. Xxxxx
----------------------
Its: Vice President
-----------------------------
STATE OF MASSACHUSETTS
COUNTY OF SUFFOLK , ss
On November 27th, 1996, personally appeared the above-named Xxxxxxx X.
Xxxxx, as Vice President of said Mount Cranmore Ski Resort, Inc., and
acknowledged the foregoing instrument to be his free act and deed in his said
capacity, and the free act and deed of said corporation.
Before me,
[NOTARY STAMP] [SEAL]
/s/ Xxxxxxx X. X'Xxxxxx
---------------------------------------------
Notary Public/Maine Attorney
Typed or Printed Name: _____________________
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