Copy: __________

Issued To: ______________________________

CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM

MOUNT SNOW
CARINTHIA GROUP
89 Grand Summit Way
West Dover, VT 05356

LIMITED PARTNERSHIP INTERESTS

OFFERED HEREBY AT A SUBSCRIPTION PRICE PER UNIT OF $500,000*
*Subscription price includes $500,000 capital contribution but does not include
a $50,000 administrative fee to be paid by each investor. See Plan of Distribution
beginning on Page 54.

Neither the Securities and Exchange Commission nor any regulatory agency of any state or
foreign jurisdiction has approved or disapproved of these securities or passed on the
adequacy or accuracy of this private placement memorandum. Any representation to the
contrary is a criminal offense.

April 11, 2014

IMPORTANT INFORMATION ABOUT THIS OFFERING

AND THIS PRIVATE PLACEMENT MEMORANDUM
This private placement memorandum consists of five sections:
SECTION 1

OFFERING

SECTION 2

BUSINESS PLAN

SECTION 3

LIMITED PARTNERSHIP AGREEMENTS

SECTION 4

SUBSCRIPTION DOCUMENTS

SECTION 5

EXHIBITS

Please review each section carefully before you make an investment in the Partnership. The term
Partnership refers to Carinthia Group 1, L.P. and its parallel partnership, Carinthia Group 2, L.P. An
investment in the Partnership involves substantial risks. In making an investment decision, you must rely
on your own examination of the terms of the offering and the merits and risks involved. You are invited to
ask questions of, and upon request may obtain additional information from authorized representatives of
the general partner concerning the Partnership, its contemplated business, the terms and conditions of the
offering and any other relevant matters to the extent the general partner possesses such information or can
acquire it without unreasonable effort or expense. See the section of this private placement memorandum
entitled Risk Factors for a description of certain factors that you should consider.

THE FOLLOWING PARAGRAPHS CONTAIN IMPORTANT INFORMATION AND

DISCLAIMERS THAT SHOULD BE CAREFULLY CONSIDERED BY PROSPECTIVE
PURCHASERS OF LIMITED PARTNERSHIP UNITS.
The limited partnership interests (each interest referred to herein as Unit) offered hereby have not been
registered under the Securities Act of 1933, as amended (the Securities Act), in reliance upon
exemptions from registration contained in the Securities Act and Regulation D and Regulation S
promulgated thereunder. The Units are being offered to a limited number of persons and investors who
will purchase the Units for their own accounts as a long-term investment. There will be no public market
for the Units and re-sales and other transfers of the Units are limited by federal and state laws and
contractual restrictions contained in a Limited Partnership Agreement (the Partnership Agreement).
Hedging transactions involving the Units may not be conducted unless in compliance with the Securities
Act.
This private placement memorandum is not an offer to sell the Units in any jurisdiction to any person
where the offer and sale is not permitted. It is the responsibility of any person outside the United States
wishing to purchase any Units to satisfy itself as to the full observance of the laws of any relevant
territory outside of the United States in connection with any such purchase, including obtaining any
required governmental or other consents or observing any other applicable formalities. You will not be
permitted to purchase Units and become an investor in the Partnership unless and until your subscription
agreement has been accepted by the general partner, which reserves the unconditional right to reject your
subscription.
In making an investment decision, you must rely on your own examination of the Partnership and the
terms of this offering, including the merits and risks involved. An investment in the Units involves a high

degree of risk and the Units are subject to substantial restrictions on transferability and resale. See the
section of this private placement memorandum entitled Risk Factors for a description of certain factors
that you should consider.
This private placement memorandum is the only document being used to offer and sell the Units offered
hereby. Prospective investors must not rely on any other information, either written or oral, in connection
with the decision to purchase the Units offered hereby. No person should consider investing until such
person has fully read and understood the contents of this private placement memorandum (including the
Exhibits). The general partner will be available to answer questions regarding the terms and conditions of
this offering, and any additional information that may be requested by prospective investors.
This private placement memorandum has been drafted in the English language and we have not
authorized anyone on our behalf to translate this private placement memorandum into any other language.
To the extent this private placement memorandum shall be translated into any language other than
English, and there are inconsistencies between the original English document and the translated
document, the language contained in the English document will supersede the language contained in the
translated document.
No dealer, salesman or other person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in this private placement
memorandum, and, if given or made, such information or representations must not be relied upon as
having been authorized by us or any other person.
Except as otherwise indicated, this private placement memorandum speaks as of the date hereof. There
may be changes in our affairs, prospects, or attributes after the date hereof. We do not undertake to
update this private placement memorandum to reflect any such change, and neither the delivery of this
private placement memorandum nor any sale made hereunder shall, under any circumstances, create any
implication that there has been no change in our affairs after the date hereof.
The sale of the Units is subject to the provisions of, and each purchaser of Units will be required to
execute, a subscription agreement (which includes a consent to limited partnership agreement), an
investor questionnaire and an escrow agreement (collectively referred to in this private placement
memorandum as the Subscription Documents). Any summary of the terms of a Subscription Document
that we provide in this private placement memorandum is subject to and qualified in its entirety by the
full text of such Subscription Document. Any purchase of the Units should be made only after a
complete and thorough review of the provisions of the Subscription Documents. In the event that any of
the terms, conditions, or other provisions of the Subscription Documents are inconsistent with or contrary
to the description or terms in this private placement memorandum, the Subscription Documents will
control. Investors will be required to represent that they are familiar with and understand the terms of this
offering; that they agree to comply with the restrictions on transfer described herein; and that they meet
certain investor suitability standards.
Parallel Fund
Carinthia Group 1, L.P. will be exempt from registration under Section 3(c)(1) of the Investment
Company Act of 1940. A separate parallel fund, Carinthia Group 2, L.P., is being established which will
rely upon another exemption; it will have an identical investment program, the same general partner and
substantially identical Limited Partnership Agreement with that of Carinthia Group 1, L.P. Without
altering the economic rights and obligations of the partners, the general partner, in its reasonable
discretion, may at any time cause a limited partner to exchange its interest in Carinthia Group 1, L.P. for
an economically equivalent interest in the parallel fund, Carinthia Group 2, L.P.

Prospective investors should not rely on the information contained in this private placement
memorandum as legal, immigration or tax advice and you are urged to consult with your personal
counsel, accountant, or other advisor as to legal, immigration, tax, financial, and other related matters
concerning your investment in the Partnership.
By accepting receipt of this private placement memorandum, you agree not to copy or furnish copies of
the private placement memorandum or any part thereof in any form whatsoever or to disclose information
contained herein to persons other than your professional advisors instructed solely to assist you in the
evaluation. You and they are prohibited from using the private placement memorandum and any
information contained herein other than to evaluate an investment in the Partnership, and acknowledge
that written translation of this private placement memorandum, or any part thereof, into any other
language is not authorized. The agreements made herein shall survive your withdrawal from the offering
and/or the Partnership for whatever reason and shall continue in full force and effect regardless of the
eventual result of any application for lawful permanent residence in the United States of America made in
conjunction with investment in the Partnership. If you do not invest in the Partnership, then prior to
release of any escrow deposit you shall immediately return to the general partner your copy of this private
placement memorandum, together with any copies furnished by you to your advisors or counsel.

Section 1
The Offering

TABLE OF CONTENTS
INTRODUCTION ........................................................................................................................... 1
SUITABILITY STANDARDS ........................................................................................................ 1
SUMMARY OF THE OFFERING .................................................................................................. 5
ADDITIONAL INFORMATION .................................................................................................... 9
FORWARD LOOKING STATEMENTS AND ASSOCIATED RISKS ......................................... 9
THE PROJECT .............................................................................................................................. 10
THE LOAN FACILITIES .............................................................................................................. 15
U.S. IMMIGRATION FOR EB-5 INVESTORS ........................................................................... 18
RISK FACTORS............................................................................................................................ 24
TERMS OF THE OFFERING ....................................................................................................... 40
MANAGEMENT ........................................................................................................................... 42
FEDERAL INCOME TAX CONSEQUENCES ............................................................................ 43
SUMMARY OF PARTNERSHIP AGREEMENTS ...................................................................... 49
PLAN OF DISTRIBUTION .......................................................................................................... 54
EXIT STRATEGIES...................................................................................................................... 54
TRANSFERABILITY OF UNITS ................................................................................................. 54

INTRODUCTION
Carinthia Group 1, L.P. and Carinthia Group 2, L.P. are Vermont limited partnerships (the Partnership)
that were organized in October 2012 and March 2014, respectively, by their general partner, Mount Snow
GP Services LLC (the general partner) to finance two construction projects at the Mount Snow Ski
Resort in Windham County, Vermont, described in this private placement memorandum (collectively, the
Project). The sole member of the general partner is Mount Snow Ltd., which is a wholly owned
subsidiary of Peak Resorts, Inc. The Partnership will operate as an approved project within the State of
Vermont Regional Center (the regional center) which is a federally designated regional center under
Section 610 of the Departments of Commerce, Justice and State, the Judiciary and Related Agencies
Appropriations Act of 1993, as amended. As described below on Page 53, the general partner may at its
discretion cause a limited partner to exchange its interest in Carinthia Group 1, L.P. for an economically
equivalent interest in the parallel fund, Carinthia Group 2, L.P.
The Project has been structured to help investors meet the requirements of the immigrant investor
program created pursuant to Section 203(b)(5) of the Immigration and Nationality Act (INA) and
administered by the United States Citizenship and Immigration Services (USCIS). The immigrant
investor program allocates 10,000 immigrant visas per year to qualified individuals seeking lawful
permanent resident status on the basis of their investment in a commercial enterprise. In this private
placement memorandum we refer to this program as the EB-5 Visa Program and to such qualified
individuals as alien entrepreneurs or EB-5 Investors. The offering is not limited to EB-5 Investors.
The Partnership hereby offers for sale on a best efforts basis up to 104 Units in the Partnership at a
subscription price of $500,000 (the subscription price), with a minimum subscription for all investors of
one Unit ($500,000). The subscription price of $500,000 shall constitute a capital contribution to the
Partnership. The subscription price does not include an administrative fee of $50,000 per Unit (the
administrative fee) to be paid to the general partner, which amount shall not constitute a capital
contribution, but which amount will be used to pay the fees and expenses of the general partner and
Mount Snow Ltd. incurred in structuring and organizing the Project described herein in compliance with
the requirements of the EB-5 Visa Program, including marketing, consulting, escrow, legal and other fees
and expenses and any fees of foreign broker/dealers, and coordinating with counsel and foreign
broker/dealers with respect to the collection of information from potential alien entrepreneurs and other
administrative matters arising in connection with their admission as limited partners of the Partnership.

SUITABILITY STANDARDS
In General
You should invest in the Partnership only if you are willing to assume the risk of a speculative, illiquid,
and long-term investment. The decision to accept or reject your subscription will be made by the general
partner, in its sole discretion, and is final. The general partner will not accept your subscription until it
has reviewed your apparent qualifications and determined that you are eligible to participate in the
offering. This offering is being conducted under Regulation D and Regulation S, which were adopted by
the SEC under the Securities Act of 1933, as amended (the Securities Act).
Subscription Agreement
You will be required to execute a subscription agreement that contains your representations, among
others, that:

you, either alone or together with your advisors, have such knowledge and experience in financial
and business matters that you are capable of evaluating the merits and risks of the purchase of the
Unit;

you have received all information you deem necessary to evaluate the merits and risks of
purchasing the Unit and have had the opportunity to ask questions and receive answers
concerning the Unit and the Partnership from the general partner;

you are acquiring the Unit for your own account, for investment only and not with a view to or in
connection with any resale or distribution of the Unit;

you understand that the Units offered by the Partnership are restricted securities under
applicable federal securities laws and that you may only dispose of your Unit pursuant to an
effective registration statement under the Securities Act or an exemption from such registration if
available;

you are either (a) an accredited investor (as defined in Regulation D, see below) or (b) not a
U.S. person and are purchasing the interest in an offshore transaction (as defined in Regulation S,
see below).

Regulation D
Regulation D sets forth restrictions on the persons from whom subscriptions may be accepted, and this
offering is made in the United States only to accredited investors as defined in Regulation D. Your
suitability compliance will be evidenced by your completion of the Purchaser Questionnaire, which is
included in the Subscription Documents as Section 4 to this private placement memorandum. As of the
date of this private placement memorandum an accredited investor includes, among others, any person
who comes within any of the following categories, or who the issuer reasonably believes comes within
any of the following categories, at the time of the sale of the securities to that person:

Any bank as defined in section 3(a)(2) of the Act, or any savings and loan association or
other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or
fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities
Exchange Act of 1934; any insurance company as defined in section 2(13) of the Act; any
investment company registered under the Investment Company Act of 1940 or a business
development company as defined in section 2(a)(48) of that Act; Small Business Investment
Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of
the Small Business Investment Act of 1958; any plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality of a state or its political
subdivisions for the benefit of its employees, if such plan has total assets in excess of
$5,000,000; employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in
section 3(21) of such Act, which is either a bank, savings and loan association, insurance
company, or registered investment advisor, or if the employee benefit plan has total assets in
excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by
persons that are accredited investors;

Any private business development company as defined in section 202(a)(22) of the

Investment Advisors Act of 1940;

Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation,
Massachusetts or similar business trust, or partnership, not formed for the specific purpose of
acquiring the securities offered, with total assets in excess of $5,000,000;

Any director, executive officer, or general partner of the issuer of the securities being offered
or sold, or any director, executive officer, or general partner of a general partner of that
issuer;

Any natural person whose individual net worth, or joint net worth with that person's spouse,
at the time of his purchase exceeds $1,000,000 (for purposes of calculating a natural person's
net worth, such natural person's primary residence shall not be included as an asset and (a)
indebtedness that is secured by such natural person's primary residence, up to the estimated
fair market value of the primary residence at the time of the sale of securities, shall not be
included as a liability (except that if the amount of such indebtedness outstanding at the time
of sale of securities exceeds the amount outstanding 60 days before such time, other than as a
result of the acquisition of the primary residence, the amount of such excess shall be included
as a liability); and (b) indebtedness that is secured by such natural person's primary residence
in excess of the estimated fair market value of the primary residence at the time of the sale of
securities shall be included as a liability).

Any natural person who had an individual income in excess of $200,000 in each of the two
most recent years or joint income with that person's spouse in excess of $300,000 in each of
those years and has a reasonable expectation of reaching the same income level in the current
year;

Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of
acquiring the securities offered, whose purchase is directed by a sophisticated person as
described in 230.506(b)(2)(ii); and

Any entity in which all of the equity owners are accredited investors.

Regulation S
Regulation S is a safe harbor from the registration requirements of the Securities Act for offshore offers
and sales of securities. An offer or sale of securities is made in an offshore transaction if: (i) the offer is
not made to a person in the United States; and (ii) at the time the buy order is originated, the buyer is
outside the United States, or the seller and any person acting on its behalf reasonably believe that the
buyer is outside the United States. Among other conditions, the purchaser of the securities in a transaction
in reliance on Regulation S must certify that it is not a U.S. person and is not acquiring the securities for
the account or benefit of any U.S. person or is a U.S. person who purchased securities in a transaction that
did not require registration under the Act. A U.S person means:

Any natural person resident in the United States;

Any partnership or corporation organized or incorporated under the laws of the United States;

Any estate of which any executor or administrator is a U.S. person;

Any trust of which any trustee is a U.S. person;

Any agency or branch of a foreign entity located in the United States;

Any non-discretionary account or similar account (other than an estate or trust) held by a
dealer or other fiduciary for the benefit or account of a U.S. person;

Any discretionary account or similar account (other than an estate or trust) held by a dealer or
other fiduciary organized, incorporated, or (if an individual) resident in the United States; and

Any partnership or corporation if:

o
o

Organized or incorporated under the laws of any foreign jurisdiction; and

Formed by a U.S. person principally for the purpose of investing in securities not
registered under the Act, unless it is organized or incorporated, and owned, by accredited
investors (as defined above) who are not natural persons, estates or trusts.

Restrictions Imposed by the USA Patriot Act and Related Acts

In accordance with the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, as amended (the "USA PATRIOT Act"), the units offered
hereby may not be offered, sold, transferred or delivered, directly or indirectly, to anyone who is:

a designated national, specially designated national, specially designated terrorist,

specially designated global terrorist, foreign terrorist organization, or blocked person
within the definitions set forth in the Foreign Assets Control Regulations of the U.S. Treasury
Department;

acting on behalf of, or an entity owned or controlled by, any government against whom the
U.S. maintains economic sanctions or embargoes under the Regulations of the U.S. Treasury
Department;

within the scope of Executive Order 13224 Blocking Property and Prohibiting
Transactions with Persons who Commit, Threaten to Commit, or Support Terrorism, effective
September 24, 2001;

subject to additional restrictions imposed by the following statutes or regulations, and

executive orders issued there under: the Trading with the Enemy Act, the Iraq Sanctions Act,
the National Emergencies Act, the Antiterrorism and Effective Death Penalty Act of 1996,
the International Emergency Economic Powers Act, the United Nations Participation Act, the
International Security and Development Cooperation Act, the Nuclear Proliferation
Prevention Act of 1994, the Foreign Narcotics Kingpin Designation Act, the Iran and Libya
Sanctions Act of 1996, the Cuban Democracy Act, the Cuban Liberty and Democratic
Solidarity Act and the Foreign Operations, Export Financing and Related Programs
Appropriation Act or any other law of similar import as to any non-U.S. country, as each such
act or law has been or may be amended, adjusted, modified or reviewed from time to time; or

designated or blocked, associated or involved in terrorism, or subject to restrictions under

laws, regulations, or executive orders as may apply in the future similar to those set forth
above.

SUMMARY OF THE OFFERING

This is a summary and does not include all of the information that may be important to you. You should
read this entire private placement memorandum and the attached exhibits before you decide to invest in
the Partnership. Throughout this private placement memorandum when there is a reference to you it is a
reference to you as a potential investor or participant in the Partnership.
The Limited Partnerships
Carinthia Group 1, L.P. and Carinthia Group 2, L.P. are limited partnerships formed under the laws of the
State of Vermont. The principal office of each such partnership is 89 Grand Summit Way, West Dover,
VT 05356. These partnerships were formed to conduct the business and activities described below under
Project Description. Throughout this memorandum, we refer to both partnerships as the
Partnership. Carinthia Group 2, L.P. is a parallel partnership formed to comply with the Investment
Company Act of 1940. To comply with securities laws, the general partner may, in its reasonable
discretion, cause a limited partner to exchange its interests in Carinthia Group 1, L.P. for an economically
equivalent interest in Carinthia Group 2, L.P. These two partnerships will serve as co-lenders of the Loan
Facilities described on Page 15.
The General Partner
The general partner of the Partnership is Mount Snow GP Services LLC, a limited liability company
organized under the laws of the State of Vermont. The principal office of the general partner is 89 Grand
Summit Way, West Dover, VT 05356. The general partner will be responsible for the day to day
management of the Partnership. The rights and duties of the general partner are set forth in the Partnership
Agreements included in Section 3 of this private placement memorandum. You should read the entire
Partnership Agreements before you decide to invest in the Partnership.
The sole member of the general partner is Mount Snow Ltd. (Mount Snow). Mount Snow owns and
operates the Mount Snow Ski Resort, adjacent hotels, a golf course and other parcels of land, all of which
are located in West Dover and Wilmington, Windham County, Vermont. Mount Snow is a wholly owned
subsidiary of Peak Resorts, Inc., a Missouri corporation (Peak Resorts). Peak Resorts is a holding
company that, through its wholly owned subsidiaries, owns or leases and operates a total number of 13
day ski areas and overnight drive destination ski areas through the Midwestern, Northeastern and
Southeastern United States. Its principal executive offices are located at 17409 Hidden Valley Drive,
Wildwood, Missouri 63025.
Project Description
The Partnership intends to use the proceeds of this offering to fund loans that will be advanced to newly
created wholly-owned subsidiaries of Mount Snow to finance the development of two capital projects for
the Mount Snow Ski Resort the West Lake Project and the Carinthia Ski Lodge Project (together, the
Project).
The West Lake Project includes the construction of a new water storage reservoir for snowmaking with
capacity of up to 120 million gallons, three new pump houses and the installation of snowmaking
pipelines, trail upgrades and expansion, new ski lift and ancillary equipment. The Carinthia Ski Lodge
Project includes the construction of Carinthia Ski Lodge, a new three-story approximately 36,000-squarefoot skier service building located at the base of the Carinthia slopes. Carinthia Ski Lodge will include a
restaurant, cafeteria and bars with seating for over 600 people, a retail store, convenience store and sales
center for lift tickets and rentals. The anticipated overall cost of the Project is $66,000,000, of which
$52,000,000 is intended to be funded with the proceeds from this offering and will be supplemented with
the additional investment in cash, land or value of $14,000,000 provided by Mount Snow.

All Units are offered by the Partnership on a best efforts basis. There is no assurance that all or any of
the desired capital will be raised through the offering. The offering has a minimum amount of $500,000
(one Unit) and, subject to the release of the funds from escrow, the Partnership may utilize proceeds as
they are received. To the extent that the offering is not fully subscribed and less than $52,000,000 is
raised, the Partnership will allocate up to the first $30,000,000 of subscriptions received and accepted to
West Lake Water Project LLC for the development of the West Lake Project. The West Lake Project will
be developed in three tranches consisting of $10,000,000 (tranche one), $12,500,000 (tranche two) and
$7,500,000 (tranche three). To the extent that the general partner accepts subscriptions for any tranche
and the proceeds resulting from such subscriptions do not equal the amount for such tranche set forth
above, Mount Snow will be required to make alternative arrangements to finance the balance of the
tranche. There can be no assurance that Mount Snow will be able to obtain such additional financing on
acceptable terms, or at all.
If and when subscriptions received exceed $30,000,000, the next $22,000,000 will be allocated to
Carinthia Ski Lodge LLC for the development of the Carinthia Ski Lodge Project. To the extent that the
general partner accepts subscriptions for the development of the Carinthia Ski Lodge and the proceeds
resulting from such subscriptions do not equal $22,000,000, Mount Snow will be required to make
alternative arrangements to finance the balance required to complete the Project. There can be no
assurance that Mount Snow will be able to obtain such additional financing on acceptable terms, or at all.
For a more complete description of the Project, please see The Project below, and Section 2. Business
Plan.
Terms of the Offering
You are being offered the opportunity to purchase a Unit in the Partnership. The time period for the offer
and sale of the Units began on the date of this private placement memorandum and will continue until the
Partnership has received capital contributions from the sale of Units of $52,000,000, unless terminated
sooner by the general partner in its discretion.
The minimum individual capital contribution to the Partnership is $500,000 which is the minimum
investment amount prescribed for qualifying investments in a regional center under the EB-5 Visa
Program. To the extent that the minimum qualifying investment amount is increased, the minimum
subscription and capital contribution will be increased to match the minimum qualifying investment
amount. The minimum subscription may be reduced by the general partner in its discretion in the case of
investors that are not EB-5 Investors and such investors will not be required to pay the administrative fee
described below. In addition to his or her capital contribution each EB-5 Investor must also pay an
administrative fee of $50,000 to the general partner. The administrative fee will be used to pay (including
reimbursement of previously paid amounts) the fees and expenses of the general partner and Mount Snow
Ltd. incurred in structuring and organizing the Project in compliance with the requirements of the EB-5
Visa Program, including marketing, consulting, escrow, legal and other fees and expenses and any fees of
foreign broker/dealers, and coordinating with counsel and foreign broker/dealers with respect to the
collection of information from potential alien entrepreneurs and other administrative matters arising in
connection with their admission as limited partners of the Partnership.
All capital contributions and administrative fees will be held in escrow by Peoples United Bank (the
Escrow Agent) pursuant to the terms of an escrow agreement between the investor, the general partner
and the Escrow Agent (the Escrow Agreement). Funds will not be released from escrow until USCIS
approval of the first I-526 petition filed by an investor in the Partnership (the Escrow Release
Conditions). Once the Escrow Release Conditions are satisfied, the funds will remain in escrow until
released by the general partner to be used to fund the Project. Until such time as the general partner
releases the funds from escrow, the general partner may, in its sole discretion, reject an investment in the
partnership. The general partner's acceptance of your subscription is discretionary, and the general

partner may reject your subscription for any reason without incurring any liability to you for this decision.
If your subscription is rejected, then all of your funds, including the administrative fee, will be promptly
returned to you.
The Loan Facilities
The capital contributions of investors will be used to fund two credit facilities that the Partnership will
enter into with (1) West Lake Water Project LLC, a Vermont limited liability company (West Lake
LLC) in the amount of $30,000,000 (such facility, the West Lake facility) and (2) Carinthia Ski Lodge
LLC, a Vermont limited liability company (Carinthia Ski Lodge LLC and together with West Lake
LLC, the Developers) in the amount of $22,000,000 (such facility, the Carinthia facility and, together
with the West Lake facility, the facilities). West Lake LLC and Carinthia Ski Lodge LLC are wholly
owned subsidiaries of Mount Snow Ltd. The facilities will be used to develop the West Lake Project and
the Carinthia Ski Lodge Project, respectively.
Each facility will be represented by a non-revolving line of credit note (Note) and subject to the terms
of a loan agreement. Interest shall accrue on the unpaid Principal Sum on a simple interest basis at a fixed
rate of 1.0% per annum commencing on the First Advance Date until the Maturity Date as set forth in
each respective Note. In the event Borrower exercises the Extension Option in the Note, interest shall
accrue on the unpaid Principal Sum on a simple interest basis as follows: (i) at a fixed rate of 7.0% per
annum commencing on the fifth (5th) anniversary of the First Advance Date; and (ii) a fixed rate of 10.0%
per annum commencing on the sixth (6th) anniversary of the First Advance Date until the Maturity Date.
Such interest will not be compounded or capitalized. Interest payments shall be paid to the Lender in
arrears by the Borrower by way of annual payments on December 1 of each year during which any
portion of the Principal Sum is outstanding. Interest shall be computed on the basis of the actual number
of days elapsed and a year of 365 days commencing on the First Advance Date. The Developer may
prepay the loan at any time subject to the condition that such prepayment does not negatively impact the
capacity of the limited partners of the Partnership to be admitted to the United States under the EB-5 Visa
Program. For a more complete description of the facilities, please see The Loan Facilities below.
EB-5 Visa Program
The Project has been structured to help investors meet the requirements of the immigrant investor
program created pursuant to Section 203(b)(5) of the Immigration and Nationality Act (INA) and
administered by the United States Citizenship and Immigration Services (USCIS). The immigrant
investor program allocates 10,000 immigrant visas per year to qualified individuals seeking lawful
permanent resident status on the basis of their investment in a commercial enterprise. In this private
placement memorandum we refer to this program as the EB-5 Visa Program and to such qualified
individuals as alien entrepreneurs or EB-5 Investors.
The Project has been structured to qualify under separate provisions in the law that permit: (1) a reduced
investment of $500,000, relying upon the presence of the principal place of business of the commercial
enterprise within a targeted employment area (TEA); and (2) reliance upon a less restrictive indirect job
creation requirement due to the location of the Project within an approved regional center (in this case, the
Mount Snow Resort is located in the Vermont Regional Center) authorized by the INA under a pilot
program that was created in 1992. The pilot program is currently scheduled to expire on September 30,
2015.
The U.S. immigration laws and the requirements of the EB-5 Visa Program are complex. You should
consult with counsel familiar with U.S. immigration laws and practice. Purchase of a Unit does not
guarantee you will receive lawful permanent residence in the United States. Please see Risk Factors
Risks Related to the Immigration Process below.

Risk Factors
You should carefully consider a number of significant risk factors inherent in the offering, including risks
that affect your ability to achieve lawful permanent residence in the United States and your ability to
receive any return on your investment in the Partnership, including the following:

risks incident to the development and construction of the Project by the Developers that could
result in substantial unanticipated delays or budget overruns or, under certain circumstances, the
failure to complete the Project;

the seasonality of the ski resort business and the possible occurrence of events during peak times
that could have a negative effect on revenues generated by the Project and the Developers ability
to service and repay the loans to the Partnership;

the absence of any guarantee that investment in the Project will assure that your I-526 Petition
will be granted by USCIS or, if it is, that you will obtain conditional or unconditional lawful
permanent resident status;

the risk that the Project may fail to create the requisite number of jobs under the EB-5 Visa
Program and result in the denial of your I-829 Petition; and

restrictions on your ability to transfer your Unit in the Partnership which mean that you must be
prepared to hold your Unit for an indefinite period of time.

For a more complete description of the risks involved with an investment in this offering, please see
Risk Factors below.
Compensation
The administrative fee of $50,000 will be paid to the general partner and will be used to pay (including
reimbursement of previously paid amounts) the fees and expenses of the general partner and Mount Snow
Ltd. incurred in structuring and organizing the Project in compliance with the requirements of the EB-5
Visa Program, including marketing, consulting, escrow, legal and other fees and expenses and any fees of
foreign broker/dealers, and coordinating with counsel and foreign broker/dealers with respect to the
collection of information from potential alien entrepreneurs and other administrative matters arising in
connection with their admission as limited partners of the Partnership.
Other than receiving its general partnership interest and receiving reimbursement for expenses and other
costs incurred directly or indirectly by the general partner to fulfill its duties under the Partnership
Agreement, the general partner is not entitled to compensation for its services rendered pursuant to the
Partnership Agreement. The construction of the West Lake Project and the Carinthia Ski Lodge Project
will be overseen by Mount Snow or one of its affiliates, who will enter into contracts with West Lake
LLC and Carinthia Ski Lodge LLC for this service. Mount Snow or such affiliate thereof will receive
contractor supervision payments of 15% of the build cost for each Project.
Return of Funds if I-526 is denied
In general, once the General Partner accepts the investment and the funds are released from escrow, the
funds are nonrefundable. However, an investor may seek a return of the $500,000 capital contribution
and a portion of the $50,000 administrative fee if his or her I-526 petition is denied. Any return of funds
is subject to the discretion of the General Partner, and requires that an investor has made a good faith
effort to secure USCIS approval of his or her I-526 petition. A request for the return of capital and a
portion of the administrative fee must be made in writing to the General Partner.

ADDITIONAL INFORMATION
If you deem it necessary to verify the accuracy of the information referred to in this private placement
memorandum, you are invited to:

ask questions of, and receive answers from, the general partner; and

obtain information concerning the terms and conditions of this offering, to the extent the general
partner possesses the information or can acquire it with reasonable effort or expense.

No one has been authorized to give you any information or make any agreement that is not expressly
stated in this private placement memorandum or authorized by the foregoing right to request additional
information from the general partner.

FORWARD LOOKING STATEMENTS AND ASSOCIATED RISKS

This private placement memorandum includes forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended.
All statements other than statements of historical facts included in this private placement memorandum or
in any supplement to this private placement memorandum, including without limitation, any statements as
to the expected timing of the Project, projected financial condition and operating results, business
strategies, plans, intentions, and objectives of management, are forward-looking statements. Nothing
contained in this private placement memorandum is, or should be relied upon as, a promise or
representation as to future performance. Any statements, assumptions, estimates, projections, intentions,
or other forward-looking statements with respect to such future performance set forth in this private
placement memorandum are based upon assumptions made, which may or may not prove to be correct.
No representation is made as to the accuracy of such statements, assumptions, estimates, projections, and
intentions. Furthermore, we are under no duty to update any of the forward-looking statements after the
date of this private placement memorandum to conform them to actual results.
Important factors that could cause our actual results to differ from our expectations are disclosed in this
private placement memorandum, including under the heading Risk Factors. You should read carefully
the section of this private placement memorandum under the heading Risk Factors for a discussion of
certain factors that may affect our business, prospects and actual results.

THE PROJECT
Introduction
Mount Snow Resort, located in southern Vermont, is the closest major ski area to eastern metropolitan
centers, just a 4 hour drive from the major metropolitan areas of New York City and approximately 2
hours from Boston. Mount Snow Ski Resort is owned by Mount Snow Ltd., which is a wholly-owned
subsidiary of Peak Resorts Inc., headquartered in Missouri.
Mount Snow
Founded in 1954, Mount Snow is one of the largest resorts in the eastern United States, with a land area
of 2,451 acres, of which 894 acres are within the Green Mountain National Forest. Mount Snow Ski Area
includes 460 acres of trails spread over four mountain areas (including Carinthia) and served by a
network of 20 lifts. Ski terrain features 80 trails, gladed tree-skiing areas, a 400-foot competition
superpipe, a minipipe, nine freestyle parks, a tubing park and several beginner areas. With 70% of the
trails rated intermediate, it appeals to skiers and snowboarders from throughout the East. The Carinthia
area includes almost 100 acres of terrain park features for freestyle skiers and snowboarders. It has been
the site for national freestyle competitions drawing thousands of spectators.
In addition to skiing and snowboarding, other winter activities include day and night-time snow tubing,
snowmobile tours, ski/snowboard lessons, competitions and special events. Summer offerings include an
18-hole golf course, mountain bike trail network, hiking trails, scenic summer chairlift rides and special
events/festivals. Lodging accommodations with conference facilities serve transient guests, conference
groups and wedding parties. For further information see Section 2 -- Business Plan.
Mount Snow was one of the early resorts to use snowmaking, the process of making snow to ensure
reliable ski conditions. Initially, 7% of the mountain was covered by snowmaking. Today, almost 80%
of the mountain can be covered by snowmaking. Mount Snows snowmaking fleet includes high-tech fan
guns, which can produce large amounts of snow in a short period of time. Currently, water for
snowmaking comes from three storage ponds totaling approximately 22 million gallons. All water
withdrawals have been approved by state and federal regulations pursuant to the regulations in place at
the time of construction.
In 2011 Mount Snow received approval from the State of Vermont Agency of Natural Resources for its
Master Development Plan. This plan includes the development of up to 900 residential units;
development of 200,000 square feet of new skier service buildings; and mountain improvements
including additional snowmaking and new ski lifts. The first phase of the master plan is the
redevelopment of the Carinthia Base Area with up to 150 residential units, a new skier service lodge and
a redesigned parking area.
West Lake Project
Both Mount Snow and the Vermont Agency of Natural Resources (VANR) have long recognized the
need to improve Mount Snows snowmaking system and bring its snowmaking sources into compliance
with existing minimum flow requirements. Since the 1990s, Mount Snow has been working with the
State to look for alternative sources of water for snowmaking and to bring water withdrawals into
compliance with current standards. After exploring several options, a proposal to withdraw water from
Cold Brook was identified as a viable alternative. Water will be withdrawn from Cold Brook and then
pumped to West Lake, a 120-million-gallon water storage facility. From West Lake, water for
snowmaking will be pumped to Mount Snow. West Lake will support future snowmaking expansion at
Mount Snow Ski Resort and also address long-standing deficiencies of appropriate minimum flows at
existing snowmaking water sources. On September 1, 2010, VANR released its Flow Determination

10

under the environmental protection rules Chapter 16: Water Withdrawals for Snowmaking (Appendix
B). This determination concluded that Mount Snows West Lake proposal was consistent with the rules
and that VANR would permit the proposed Cold Brook water withdrawal, with various conditions
pertaining to conservation flows, flow monitoring, system maintenance and others.
Once West Lake is constructed and operational, Mount Snows plans include increasing snowmaking
coverage to 100% of skiable terrain. This includes 157 acres of new snowmaking terrain, most of which
(79%) is located on National Forest Service lands. The Project involves the installation of more than
40,000 feet of pipelines to carry water, air and/or electrical conduit for snowmaking operation. In
October 2010, the U.S. Forest Service issued a Decision Notice approving the snowmaking expansion.
Mount Snows West Lake Project is the culmination of nearly two decades of effort that will provide
sufficient water to meet Mount Snows snowmaking demands for the foreseeable future, including all
anticipated new trail construction, and allow all water withdrawals from Mount Snows current water
supply sources to either be eliminated or brought into compliance with Vermonts current snowmaking
water withdrawal rules.
To support the development of Mount Snows new snowmaking operations, Mount Snow will purchase
two parcels of raw land in Wilmington, Vermont for development and operation of the water storage
reservoir. Upon purchase of the two parcels, Mount Snow will enter into a Ground Lease Agreement
with West Lake LLC (the West Lake Ground Lease). The West Lake Ground Lease will cover the
property comprising the West Lake Project, its development and management, and will operate in tandem
with a Water Use Agreement (described below) for supply of snowmaking water to the Mount Snow
resort. With this, the West Lake Ground Lease will include use of the proposed pipeline. The West Lake
Ground Lease will run for a term of fifty (50) years, with an option to extend for an additional forty-nine
(49) years. Rent payments under the West Lake Ground Lease will be $10.00 per year, in addition to the
sale of snowmaking water, as further provided in the Water Use Agreement.
Mount Snow and West Lake LLC will also enter into a Water Use Agreement for the sale and distribution
of snowmaking water to Mount Snow. The term of the Water Use Agreement, insurance requirements,
maintenance obligations and default-related provisions will be consistent with the terms of the West Lake
Ground Lease. Under the Water Use Agreement, Mount Snow will pay West Lake LLC $5,000.00 per
one million gallons of snowmaking water, except as provided in the subordination, non-disturbance and
attornment agreement. See The Loan Facilities Subordination.
Carinthia Ski Lodge Project
The Carinthia Base Area, home to Mount Snows freestyle terrain parks, is a key portal to Mount Snow.
Mount Snow has proposed the construction of a new approximately 36,000 square-foot ski lodge. The
new Carinthia Ski Lodge will serve both day and overnight guests and include a cafeteria, restaurant, two
bars, a retail shop, convenience store, ski rentals, ski school, lockers and a game room for kids. The new
ski lodge will be the commercial guest services hub for future planned upscale accommodations that are
to be built at the Carinthia base area as part of the Mount Snow master development plan. In addition, a
new expanded paved parking lot is proposed that will replace the existing dirt lot. The new lot will
address existing environmental concerns (iron seep, storm water runoff) that occur with the current
parking lot.
The Carinthia Ski Lodge Project will be developed on land currently owned and controlled by Mount
Snow. Accordingly, Mount Snow will also enter into a Ground Lease Agreement with Carinthia Ski
Lodge LLC (the Carinthia Ground Lease and, together with the West Lake Ground Lease, the Ground
Leases) to support the construction of the new Carinthia Ski Lodge. Carinthia Ski Lodge LLC will
manage all aspects of the proposed construction. Under the Carinthia Ground Lease, Carinthia Ski Lodge
LLC will be granted the right of access over roads, parking areas, driveways, and sidewalks in connection

11

with the use of and access to the facility. Full use of the development will be granted to Mount Snow and
expressly provided for in the Carinthia Ground Lease. The Carinthia Ground Lease will run for a term of
fifty (50) years, with an option to extend for an additional forty-nine (49) years. Rent payments under the
Carinthia Ground Lease will be $10.00 per year, except as provided in the subordination, nondisturbance and attornment agreement. See The Loan Facilities-Subordination.
Permitting
The West Lake Project including the snowmaking expansion received a decision notice from the U.S.
Forest Service in October 2010. The West Lake Project also must be approved by State of Vermont
regulatory agencies. The application is under review by the state and it is anticipated a permit will be
issued by early 2014.
In October 2010, Mount Snow submitted an Act 250 application with the State of Vermont for its master
plan. In July 2011, the Vermont District Environmental Commission approved the master plan in concept.
However, each construction project requires a separate application and the issuance of a permit to
construct. Mount Snow anticipates that the permitting process for the construction phase is anticipated to
conclude in calendar 2014. In addition, land development laws in Vermont determine when and how
much land may be opened for development at any one time.
Subject to approval by the applicable state, local and federal regulatory agencies under applicable laws
and the approval and issuance of all permits required for construction of the Projects, both the West Lake
Project and Carinthia Ski Lodge Project are expected to begin preliminary groundbreaking in 2014 The
Partnership will not release funds for hard construction costs to the Developers until all applicable
approvals and permits have been obtained.
Project Cost
The anticipated overall cost of the Project is $66,000,000, of which $52,000,000 is intended to be funded
with the proceeds from this offering (assuming all Units offered hereby are sold) and will be
supplemented with the additional investment in cash, land or value of $14,000,000 provided by Mount
Snow.
To the extent that the offering is not fully subscribed and less than $52,000,000 is raised, the Partnership
will allocate up to the first $30,000,000 of subscriptions received and accepted to West Lake LLC for the
development of the West Lake Project.
The West Lake Project will be developed in three tranches consisting of $10,000,000 (tranche one),
$12,500,000 (tranche two) and $7,500,000 (tranche three). To the extent that the general partner accepts
subscriptions for any tranche and the proceeds resulting from such subscriptions do not equal the amount
for such tranche set forth above, Mount Snow will be required to make alternative arrangements to
finance the balance of the tranche. There can be no assurance that Mount Snow will be able to obtain such
additional financing on acceptable terms, or at all.
If and when subscriptions received exceed $30,000,000, the next $22,000,000 will be allocated to
Carinthia Ski Lodge LLC for the development of the Carinthia Ski Lodge. To the extent that the general
partner accepts subscriptions for the development of the Carinthia Ski Lodge and the proceeds resulting
from such subscriptions do not equal $22,000,000, Mount Snow will be required to make alternative
arrangements to finance the balance required to complete the Project. There can be no assurance that
Mount Snow will be able to obtain such additional financing on acceptable terms, or at all.

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EB-5 Visa Program

The Project has been structured to help investors meet the requirements of the EB-5 Visa Program and
qualify via their investment in the Project to become eligible for admission to the United States as lawful
permanent residents with the investors qualifying family members.
1.
Amount of Investment; Targeted Employment Area: The EB-5 Visa Program typically calls for a
minimum investment of $1,000,000 to be invested by EB-5 Investors; however, the minimum investment
amount in the case of the Project is reduced to $500,000 because the Project is situated in a TEA. A TEA
must meet one of two criteria, the first, concerning population, or the second, concerning high rates of
unemployment in towns whose population equals or exceeds 20,000. The first criterion, concerning
population, is the relevant criterion for the Project, as it states that if an investment is made in a town or
city whose population is less than 20,000, and the town or city is not within a metropolitan statistical area
(MSA) as designated by the U.S. Office of Management and Budget, the investment is deemed to have
been made in a TEA. The general partner believes that the Project is in a TEA because West Dover and
Wilmington, Vermont have a population well below 20,000.
2.
Counting Employment Positions Created; State of Vermont Regional Center: To qualify as an
investor under the EB-5 Visa Program, each investor must demonstrate that 10 full-time, year-around
employment positions will be created on account of the investment for U.S. citizens, lawful permanent
residents and other immigrants lawfully authorized to be employed in the United States. Non-immigrant
(temporary) workers, the investor, the investors spouse and the investors children are excluded from the
count. A full-time employment position (including one position shared by more than one employee)
means one that requires at least 35 hours each week to fulfill. An employment position is deemed created
when the worker is remunerated on the payroll of the new enterprise (the Payroll Condition).
Independent contractors are excluded from the direct employment position creation count.
An exception to the Payroll Condition is made if the enterprise is located within and affiliated with a
regional center created under a pilot program first enacted by the U.S. Congress in 1992 that provides for
the authorization of regional centers by the U.S. Department of Justice, Immigration and Naturalization
Service (n/k/a USCIS). Enterprises located within and affiliated with a regional center are not required to
employ 10 workers for each qualifying investment. Instead it suffices if the investor demonstrates that at
least 10 qualifying employment positions will be created directly or indirectly on account of the
investment.
In June 1997, the State of Vermont, Agency of Commerce and Community Development (ACCD), was
granted a designation as an approved regional center under this pilot program. An investment in a
commercial enterprise situated within and affiliated with the regional center, the State of Vermont, that
fosters economic expansion through increased exports, greater regional productivity, employment
creation or additional domestic capital investment, qualifies for the broader view of employment creation.
Accordingly, an investor in the Project, which is established in Vermont, is permitted to demonstrate that
some, possibly all, of the employment positions created on account of the investment in the enterprise
will be indirect employment positions, i.e., not on the payroll of the enterprise. In demonstrating the
number of indirect employment positions created the investor may rely upon reasonable methodologies
such as multiplier tables, feasibility studies, analyses of foreign and domestic markets for the goods or
services to be exported, and other economically or statistically valid forecasting devices which indicate
the likelihood that the business will result in increased employment.
The general partner has commissioned an economic impact assessment to determine the number of
employment positions expected to be created as a result of 104 EB-5 Investors each contributing
$500,000 to the Project, and Resort Owner contributing $14,000,000. The methodology employed in the

13

assessment was derived from the IMPLAN software model developed by the Minnesota IMPLAN group.
This analysis demonstrates that the combined Project development and business activities carried on by
the Partnership is expected to create greater than 1040 permanent full time employment positions within
the State of Vermont, ACCD regional center and within the United States by the year 2016

14

THE LOAN FACILITIES

The proceeds from the offering will be used to fund two credit facilities that the Partnership will enter into
with (1) West Lake LLC in the amount of up to $30,000,000 and (2) Carinthia Ski Lodge LLC in the
amount of up to $22,000,000. To the extent that the offering is not fully subscribed and less than
$52,000,000 is raised, up to the first $30,000,000 will be allocated to the West Lake facility and the credit
facilities will be reduced accordingly. West Lake LLC and Carinthia Ski Lodge LLC are wholly owned
subsidiaries of Mount Snow Ltd. The facilities will be used to develop the West Lake Project and the
Carinthia Ski Lodge Project, respectively.
Each facility will be represented by a non-revolving line of credit note and subject to the terms of a loan
agreement. The following is a summary of certain material terms of the notes, the loan agreements and
the guaranties of collection and is qualified in its entirety by the complete text of such documents, which
are included in Section 5 of this private placement memorandum.
Interest. The loans bear interest at a rate of 1% per annum. Interest accrues on a simple interest basis and
1
is not compounded or capitalized and is payable in arrears semi-annually. In the event Borrower
exercises the Extension Option in the Note, interest shall accrue on the unpaid Principal Sum on a simple
interest basis as follows: (i) at a fixed rate of 7.0% per annum commencing on the fifth (5th) anniversary
of the First Advance Date; and (ii) a fixed rate of 10.0% per annum commencing on the sixth (6th)
anniversary of the First Advance Date until the Maturity Date. Such interest will not be compounded or
capitalized. Interest payments shall be paid to the Lender in arrears by the Borrower by way of annual
payments on December 1 of each year during which any portion of the Principal Sum is outstanding.
Interest shall be computed on the basis of the actual number of days elapsed and a year of 365 days
commencing on the First Advance Date. The Developer may prepay the loan at any time subject to the
condition that such prepayment does not negatively impact the capacity of the limited partners of the
Partnership to be admitted to the United States under the EB-5 Visa Program.
Maturity. The Borrower shall repay the Loan in full, together with any interest accrued but unpaid
thereon, on the maturity date set forth in the Note. The Note shall automatically mature and be due and
payable in full, together with any interest accrued but unpaid thereon, on the fifth anniversary date of the
first Advance (First Advance Date) under the respective Note (the Maturity Date); provided,
however, the Borrower may upon written consent of the Lender, such consent not to be unreasonably
withheld, extend the Maturity Date for a period of up to an additional two (2) years (the Extension
Option). If the Borrower exercises the Extension Option, then the term Maturity Date shall include the
Extension Option. It is the Borrower's intention to repay the Principal Sum, together with any interest
accrued but unpaid thereto, on the Maturity Date with the proceeds of long-term financing or from other
2
available sources.

The general partner expects that each Developer will make interest payments from income generated from
the Project. See Business Plan in Section 2 of this private placement memorandum. Pending completion of
the Projects and commencement of revenues, Mount Snow will put in place working capital facilities which
the Developers may utilize to make interest payments to the Partnership.
The general partner expects each Developer will consider a number of options to repay the loan to the
Partnership upon maturity. Such options include but are not limited to: (1) a strategic refinancing of the
facility; (2) reserving funds from operations; (3) the proceeds of a loan from Mount Snow or Peak Resorts;
and (4) the purchase of the Developers assets by Mount Snow or Peak Resorts or another of its affiliates.
See Risk Factors below beginning on page 24.

15

Prepayment. The Developer may prepay the loan at any time subject to the condition that such
prepayment does not negatively impact the capacity of the limited partners of the Partnership to be
admitted to the United States under the EB-5 Visa Program.
Covenants. The loan agreement contains covenants with respect to: (a) the use of the proceeds of the
advances to develop and construct the Project; (b) compliance with laws and maintenance of all
authorizations necessary for the development of the Project; (c) preservation of existence; (d)
maintenance and implementation of procedures necessary for the development of the Project; (e)
maintenance of properties; (f) maintenance of insurance; (g) payment of taxes; (h) performance of
obligations under the loan agreement; (i) inspection rights; and (j) assurances. The loan agreement
prohibits the Developer from taking certain actions without the consent of the Partnership including: (i)
creating any lien upon any of the properties or assets financed or purchased with the proceeds of the loan
other than security interests with respect to money borrowed from the Partnership and permitted liens (as
defined); (ii) transferring or granting a security interest other than permitted liens in any of the properties
or assets financed or purchased with the proceeds of the loan; (iii) selling any equity interests to any
person other than Peak Resorts, Inc. or any of its wholly-owned subsidiaries or merging or consolidating
with any person; (iv) guaranteeing the obligations of any other person, except endorsements of negotiable
instruments for collection in the ordinary course of business; (v) other than transactions on terms no less
favorable to the Developer than those that could reasonably be obtained at arms' length in the ordinary
course of business, entering into any transaction with any affiliate; (vi) extending any credit to any
affiliate or any other person; and (vii) granting any lien in, or otherwise encumber, any of its properties or
other assets other than permitted liens.
Default. The following shall constitute events of default: (a) failure to pay as and when due any principal
or interest; (b) failure to observe any other obligation to be performed by the Developer under the loan
agreement or under the note which is uncured for a period of 60 business days after the Developer
becomes aware of the occurrence thereof; (c) any representation or warranty made by the Developer in
the loan agreement was false or misleading in any material respect at the time when made; (d) any
judgment involving an amount in excess of $100,000 is entered against the Developer and is undischarged
for a period of 30 days; (e) the Developer makes an assignment for the benefit of creditors generally; (f)
the commencement of any action for the dissolution or liquidation of the Developer, or the
commencement of any case or proceeding for reorganization or liquidation of the Developer's debts under
the Bankruptcy Code or similar law provided, however, that the Developer has 60 days to obtain the
dismissal or discharge of any involuntary proceeding filed against it; (g) the appointment of a receiver
for the Developer for a material portion of its property; (h) the loan agreement or the note ceases for any
reason to be in full force and effect or shall be declared to be null and void or unenforceable in whole or
in part; (i) other than liens in favor of the Partnership or liens otherwise consented to in writing by the
Partnership, the imposition of any lien or series of liens against the Developer or any of the properties or
other assets financed or purchased with the proceeds of the loan except permitted liens; (j) the Developer
ceases to develop and construct the Project prior to completion; and (k) the guaranty described below
ceases to be in effect.
Remedies on Default. Upon an event of default the Partnership may declare all obligations, including all
principal and interest, to be immediately due and payable, without protest, demand or other notice. Upon
the occurrence of an event of default specified in clauses (e), (f) or (g) above, all advances, including all
interest accrued but unpaid thereon, are immediately due and payable without any declaration by the
Partnership. The Developer will pay the Partnership's fees incurred in any action seeking enforcement of
its rights hereunder. No rights and remedies may be exercised upon an event of default if such rights or
remedies would jeopardize any of the limited partners capacity to be admitted to the United States of

16

America as unconditional lawful permanent residents with their spouses and unmarried, minor children
pursuant to the EB-5 Visa Program.
Guaranty of Collection. Each Developers indebtedness to the Partnership is subject to a guaranty of
collection from Peak Resorts. The word indebtedness means and includes any and all of the
Developers liabilities, obligations, debts, and indebtedness to the Partnership that are incurred in
connection with the loan and evidenced by the note. The guaranty is a guaranty of collection only, and not
a guaranty of payment. As such, the Partnership acknowledges that upon an uncured default and lawful
acceleration of indebtedness, the Partnership will resort first directly against the Developer and fully
exhaust any and all legal remedies existing or available and shall have failed to collect the full amount of
the indebtedness before proceeding against the guarantor; and (b) give notice of the terms, time, and place
of any public or private sale of collateral held, if any, by the Partnership and comply with any other
applicable provisions of the Uniform Commercial Code as adopted in Vermont, or any other applicable
law. Under the terms of the facilities, the loans are not secured by any collateral. The guaranty contains a
covenant with respect to the provision by the guarantor of financial information concerning the guarantor
to a third party that is not affiliated with the guarantor or any of its affiliates.
Subordination
Mount Snow and the Developers, as the tenants under the Ground Leases, will enter into a subordination,
non-disturbance and attornment agreement with Mount Snow's existing lender, acknowledging the
subordinate status of the applicable lease, but with such lender's agreement not to disturb such tenant's
tenancy and possession of the West Lake and Carinthia Lodge properties in the event of any foreclosure,
sale or other action or proceeding for the enforcement of the loan documents, or deed in lieu thereof;
provided and on and subject to the condition that (i) at the time of such foreclosure or other enforcement
proceeding or deed in lieu of foreclosure, the tenant under such lease is not in default, (ii) such tenant and
lender or any transferee of the property, as the successor landlord, shall agree, (1) with respect to the
Carinthia Ground Lease, to adjust rent under such lease to an amount equal the then market rent, and (2)
with respect to the Water Use Agreement to cap the annual water use payments to an amount equal to the
lesser of (x) $1,050,000.00 and (y) the principal amount owed by West Lake LLC pursuant to the West
Lake Facility, multiplied by three and one-half percent (3.5%), and (iii) upon foreclosure, or other
enforcement proceeding or a deed in lieu of foreclosure, the sale of any and all ski lift tickets and ski
rentals (and all other sales relating to or requiring access to and the use of the Mount Snow Resort) shall
be managed by the lender or other transferee/successor landlord of the property, and the profits from such
sales shall belong to lender or transferee/successor landlord; provided, however, any use of the lodge, or
any part thereof, by such successor landlord shall be at market rent and subject to approval by the tenant..

17

U.S. IMMIGRATION FOR EB-5 INVESTORS

The information with respect to the EB-5 Visa Program and other immigration matters provided in this
private placement memorandum is not intended to be and should not be construed as legal advice. You
should consult with your own counsel regarding United States immigration laws and your eligibility for
participation in the EB-5 Visa Program. There can be no assurance that foreign investors will meet the
requirements of the EB-5 Visa Program and become lawful permanent residents of the United States.
Please see Risk FactorsRisks Related to the Immigration Process for certain risks that you
should consider prior to making an investment in the Partnership.
The discussion of immigration matters below reflects the Partnerships current understanding of
applicable law, regulations and guidance from USCIS as of the date of this private placement
memorandum. Such laws, regulations and guidance may change in the future and, in the event of any such
changes, the investor and the Project will be required to comply with any new or modified conditions of
the EB-5 Visa Program.
Four Steps to Becoming a Lawful Permanent Resident through the EB-5 Visa Program
As discussed below there are four steps to becoming a lawful permanent resident (LPR) of the United
States through the EB-5 Visa Program:

Filing and approval of an investors Form I-526, Immigration Petition for Alien Entrepreneur (the
I-526 Petition);.

Application for an immigrant visa either through an application for immigrant visa with the
Department of State (DOS) (to which we refer below as consular processing), or through
adjustment of status in the United States with USCIS.

Upon admission on an EB-5 immigrant visa or approval of the adjustment of status, the alien is
granted two-years of conditional permanent resident status.

Filing and approval of an investors Form I-829, Petition by Entrepreneur to Remove Conditions
(I-829 Petition), which form must be filed at the end of the two-year conditional period. If the
investor has fulfilled the requirements of the EB-5 Visa Program, then the conditions will be
removed and the investor will be an unconditional LPR.

Step One: The I-526 Petition

For investors seeking lawful permanent residence in the United States as alien entrepreneurs, the first step
in the process is to file the Form I-526 Petition, together with accompanying evidence that the investment
meets the requirements of the EB-5 Visa Program. Upon acceptance of your subscription and your
admission as a limited partner, it is your sole responsibility and risk to file the I-526 Petition promptly.
USCIS adjudicates I-526 petitions by reviewing these criteria, among others:

New Commercial Enterprise: There must be evidence that shows that the enterprise is new and
authorized to transact business.

Investment Capital: The petition must be supported by evidence that the petitioner has invested
the minimum investment amount. USCIS expects these funds to be at risk, connoting an
irrevocable commitment to the enterprise, and the funds must be used by the enterprise
exclusively to create employment. Funds used to pay administrative costs or other obligations
undertaken to promote the investment; to create reserve accounts or for any purpose that does not

18

lead to the creation of employment by the enterprise are not deemed at risk. Any commitment
by the enterprise to the investor that is deemed to transform the relationship from an investment
to a debt arrangement (for example, a promise to pay a fixed rate of return or to repay some or all
of the investment on a date certain or to repay some or all of the investment irrespective of the
financial performance of the project) will disqualify the invested funds from being deemed at
risk. Funds that are not deemed at risk will not be counted towards the minimum sum required
to be invested, possibly resulting in the denial of the I-526 Petition.

Source of Capital: The investor must provide evidence that the investor legally acquired the
investment capital. In support of the I-526 Petition, an investor should expect to provide detailed
records demonstrating the personal and business financial transactions through which the investor
acquired the invested funds, how the investor managed those funds during the entire period of
ownership by the investor and demonstrating the transactions by which the funds were transferred
by the investor into the commercial enterprise. Where countries require by law the filing of
annual individual and business tax returns the investor should also expect to provide at least the
last five years tax returns in certain instances, when, for example, the investor acquires
investment funds as a gift, or in the case of the investor receiving loans from individuals or
entities to acquire the investment funds, the donor or the lender, as the case may be, will be
expected to provide financial records of comparable detail establishing that the funds were
lawfully acquired. Funds earned or obtained in the United States while the investor was in
unlawful immigration status are not deemed by USCIS to be lawfully acquired. If USCIS is not
satisfied that the invested funds were acquired by the investor lawfully, such funds will not be
counted towards the minimum required investment amount, potentially causing the I-526 Petition
to fail. Investment in a commercial project under the EB-5 Visa Program is not appropriate for
individuals who are unable or unwilling to provide all financial records that USCIS may require
to demonstrate that invested funds have been lawfully acquired by the investor.

Managerial role: The investor is expected to participate in the management of the new enterprise
by assisting in the formulation of the enterprises business policy, by participating in one or more
of the activities permitted in Section 3423(b) of the Vermont Revised Uniform Limited
Partnership Act (VRULPA), and as otherwise set forth in the Partnership Agreement. The
Partnership Agreement provides that this management role consists, in part, of the right to replace
the general partner under certain circumstances. Limited partner investors in a commercial
enterprise under the EB-5 Visa Program must have all the rights and duties usually accorded to
limited partners by the Uniform Limited Partnership Act (ULPA), as adopted in Vermont as
VRULPA. The general partner believes that the Partnership Agreement satisfies these conditions.
The investor is advised to seek counsel to review the Partnership Agreement for compliance with
both VRULPA and immigration law requirements.

The I-526 Petition will be approved only if USCIS is satisfied that the all statutory criteria have been met.
The determination of whether these criteria have been established is within the discretion of USCIS.
USCIS may also request information about other aspects of the investment and the relationship of the
investor to the enterprise.
In the event that USCIS denies the I-526 Petition, the investor may not proceed with the next step in the
immigration process which is consular processing or adjustment of status, as discussed below. Instead, the
investor must decide whether to appeal the denial of the I-526 Petition, revise and re-file the I-526
Petition or abandon the prospect of obtaining LPR status through investment in the project.

19

Applicable law, regulations and guidance from USCIS have changed in the past and may do so in the
future. In the event of any such changes affecting the I-526 Petition, the investor will be required to
comply with any new or modified procedures.
Step Two: Consular Processing or Adjustment of Status
Approval of the I-526 Petition means that the foreign investor and the foreign investors spouse and
children under the age of 21 years may apply for admission as conditional lawful permanent residents
(CLPR). Approval of the I-526 Petition does not mean that the foreign investor has been granted
admission to the United States as a lawful permanent resident. Approval of an I-526 Petition means that
the investment documented by the I-526 Petition has qualified the foreign investor as an alien
entrepreneur. The CLPR application for admission is a separate and subsequent process that concerns
issues common to all aliens who wish to live in the United States permanently. Admission as a CLPR
may be sought using one of two methods: consular processing or adjustment of status.
Consular Processing
Consular processing is designed for aliens living outside of the United States, or for those who prefer to
process at a consulate for strategic reasons or as a matter of convenience or are ineligible to adjust status.
Typically, the consular post, which is designated at the time the I-526 Petition is filed, is in the country of
last residence, i.e., the last principal actual dwelling place.
In their sole discretion, consulates issue visas, a travel document, usually affixed to a passport that
authorizes the holder to seek admission to the United States at a port of entry. The visa is issued for an
immigration status that a consul believes the visa applicant is qualified to hold. Under the EB-5 Visa
Program, the visa may be sought from a consulate only after the investors I-526 Petition is approved. A
foreign investor and the foreign investors spouse and qualifying children are granted immigrant visas.
Use of these visas to enter the United States results in a grant of conditional lawful permanent residence.
Before issuing an immigrant visa, the consular post must determine if each alien is admissible to the
United States. Approval of the I-526 Petition does not by itself establish admissibility. In addition, an
alien must prove that there are no grounds of inadmissibility and that the alien has proper travel
documents. Waivers are available for certain of the many grounds of inadmissibility, but the grant of a
waiver is in the discretion of the government and aliens seeking waivers experience lengthy delays in
adjudication of waiver applications. Foreign investors should consult with immigration counsel to
determine if any grounds of inadmissibility may affect the eligibility of the investor or the investors
spouse or otherwise qualifying children for admission to the United States and if a waiver is available for
such grounds of inadmissibility.
If the consular post finds that the investor is admissible, it will issue an immigrant visa to the investor.
The consular post will also determine if the spouse and the qualifying children of the investor are
admissible. A determination of admissibility must be made as to each visa applicant. There is no
guarantee that all members of the investors family will be granted an immigrant visa. If the investor is
denied an immigrant visa, applications by the spouse and children of the investor for such a visa will also
be denied. Consular processing subjects both the visa applicant and the I-526 Petition to the scrutiny of a
second government agency whose decisions are not appealable. If the consular officer, based upon
information not available to USCIS in its adjudications process, suspects fraud or misrepresentation in the
I-526 Petition process or if the consul doubts the eligibility for lawful permanent resident status, the
consul may return the case to USCIS for re-adjudication of the I-526 Petition.
Consular processing begins when USCIS transmits the I-526 Petition of the foreign investor to the
National Visa Center (NVC). In time, the applicants will be instructed to obtain fingerprints and
medical examinations and to report to a consular interview. Immigrant visas usually are issued shortly

20

after the interview unless the consul detects problems in the visa application, the underlying I-526 Petition
or during the interview process. The investor is advised to seek immigration counsel for guidance on the
processing experience and potential delays in the consul office handling the investors application.
Decisions by consuls are to be made in accordance with regulatory guidance on this process. However,
consuls have broad authority and discretion under such regulatory procedures and their decisions are
unreviewable. The investor should seek advice of immigration counsel regarding visa issuance guidelines.
U.S. consuls advise that visa applicants should not change any living, employment, schooling or other
lifestyle arrangements in their country of residence before they are issued an immigrant visa based upon
an approved I-526 Petition.
A visa authorizes the holder to seek admission to the United States at a port of entry. However,
admission is subject to U.S. Customs and Border Protection (USCPB) inspection discussed below.
After issuance, immigrant visas generally remain valid for six months. During this period, the holder of
the visa must use it to apply for admission to the United States at a designated port of entry. The port of
entry is frequently in an international airport. When the foreign investor at the port of entry, he or she
will present the immigrant visa and accompanying consular documents to a USCPB officer who has the
authority to admit the foreign investor or to deny his or her admission to the United States as a CLPR.
This process is known as inspection.
Admission to the United States as a visitor or in most other non-immigrant statuses is predicated upon the
intent to depart the country at the end of the period of admission. Investors should consult with
immigration counsel to evaluate the risks associated with seeking temporary (non-immigrant) admission
to the United States subsequent to making the investment or filing an I-526 Petition or an applicant for an
immigrant visa. Despite best efforts, an inspector may deny admission under these circumstances. Such
a denial may also result in a finding that the Investor is ineligible for immigration benefits or for
admission into the United States.
Adjustment of Status
The adjustment of status (AOS) procedure is designed to permit aliens who have been admitted to the
United States as non-immigrants to apply for admission as permanent residents without leaving the
country. These non-immigrants must establish that they are admissible permanently, meeting the same
standards as aliens who use consular processing to obtain a permanent resident visa.
Aliens seeking AOS must also comply with all statutory and regulatory requirements relating to the
submission of an I-485 Application. Aliens who do not meet these additional requirements will be
required to use consular processing to obtain an immigrant visa, which will necessitate a departure from
the United States. Aliens admitted in certain non-immigrant statuses may encounter more difficulties (and
may not be successful) adjusting status than aliens admitted in other non-immigrant statuses. Investors
seeking AOS should consult with immigration counsel regarding these issues before filing the I-526
Petition.
During AOS processing, the applicant will be required to submit a medical examination and will receive
instructions from USCIS regarding biometric data collection and an interview. The interview may be
waived by USCIS at its discretion. There is no formal process to request the waiver of an interview. If
the investor is interviewed, the spouse and children of the investor will be required to attend the
interview.
The USCIS California Service Center currently has jurisdiction of the AOS process for investors in the
Project. The interview is conducted at a USCIS office near the investors residence. USCIS uses the
interview to update information about AOS applicants that may have changed subsequent to the filing of

21

the AOS application and to explore any issue that USCIS believes is relevant to deciding the AOS case.
Typically, but not always, CLPR is conferred on approved AOS applicants at the conclusion of the
interview.
Advance permission to depart the United States is issued routinely if the alien articulates a bona fide need
to travel. An alien who leaves the United States without advance permission while an AOS application is
pending is deemed to have abandoned that application unless the applicant has been admitted in and
continues to hold valid H or L non-immigrant status pending adjudication of the AOS application. Alien
investors admitted to the United States in any non-immigrant status who have obtained advance parole
during the AOS process should consult with immigration counsel before traveling.
If an alien is deemed to have abandoned an AOS application, the applicant must seek consular processing
to obtain an immigrant visa at a U.S. consular post abroad. This process typically takes about one year,
and during this period the applicant would be required to remain outside the United States.
Applicants for AOS who wish to work in the United States must obtain employment authorization unless
they have been admitted to the United States in a non-immigrant status that confers employment
authorization and does not end before AOS is granted. Self-employment requires employment
authorization. Employment in the United States without authorization is a violation of immigration status
and may jeopardize the right to adjust status.
AOS is granted in the discretion of USCIS. An alien whose AOS application has been denied may
request that the case be re-considered by the same office that denied AOS. If the request to re-open or reconsider the case is denied, or, if, after such a review, the alien fails to convince this office to reverse its
original decision, the alien is without further recourse. AOS applicants should not make any permanent
connections to the United States or change any permanent living, employment, schooling or other lifestyle
arrangements in their country of residence before they are issued AOS based upon an approved I-526
Petition.
Step Three: Conditional Lawful Permanent Resident Status
Approval of an AOS application or the grant of an immigrant visa followed by entry into the United
States means that the investor and the spouse and qualified children of the investor have been granted
CLPR for two years. The conditions must be removed so that the aliens may reside permanently in the
United States. Failure to remove the conditions results in the termination of CLPR status and will result in
the commencement of removal proceedings.
Step Four: Removal of Conditions
In order to remove conditions on his or her conditional permanent residence, the foreign investor must file
the I-829 Petition in the 90 day period immediately preceding the second anniversary of the grant of
CLPR status. In support of the I-829 Petition, the foreign investor must demonstrate full investment in
the enterprise, that the investment was sustained continuously since becoming a CLPR and compliance
with the requirement that 10 employment positions have been created as a result of the investment.
The general partner will without liability use reasonable efforts to assist foreign investors legal counsel
with the filing of their I-829 Petitions. The Partnership will instruct the general partner to engage with,
delegate to, and the Partnership shall reasonably compensate qualified persons in the assembly and
preparation of documents, reports and required verification of requisite job creation in connection with
and in support of the foreign investors I-829 Petition. It is at the sole responsibility and risk of the
foreign investor to file the I-829 Petition in the 90 day period immediately preceding the second
anniversary of the grant of CLPR status at the investors sole expense. There is no refund of the capital
contribution or administrative fee for delay or failure for any reason whatsoever to file an I-829 Petition.

22

The California Service Center currently has jurisdiction to decide a petition to remove conditions. It is
authorized to approve an I-829 Petition, seek additional written information before deciding the petition,
refer the petition to a local office where information will be elicited in an interview, or, it may deny the
petition. If the petition is referred for an interview, the local office of USCIS will decide the petition after
the interview.
During the pendency of the petition, aliens admitted in CLPR status remain in valid status even if the
petition is not decided before the expiry of the two year period of admission. Improper denials of and
delays in obtaining documents evidencing extended CLPR status are sometimes experienced. CLPR is
extended in one year increments or until the I-829 Petition is adjudicated.
USCIS regulations control the process of removal of conditions. These regulations may change in the
future. The investor will be expected to comply with and proceed with removal of condition under the
regulations in effect at the time the investor seeks removal of conditions.
There cannot be any assurance that USCIS will not change the requirements for removal of conditions
after investors are granted CLPR status through investment in the Project. There cannot be any assurance
that an investor will able to demonstrate to the satisfaction of USCIS that the Project is operating within
its business plan, that it has created the requisite employment positions at the time required by USCIS or
that any other requirements for the removal of conditions have been met.

Sunset of Regional Center Proposals under the EB-5 Visa Program

By virtue of recent amendments to the enabling legislation, the regional center pilot program has been
extended through September 30, 2015. Thereafter, if the regional center pilot program lapses, for each
investor whose case is filed with USCIS but not adjudicated on or before the date of lapse, such investors
$500,000 capital contribution will remain invested in the Partnership provided:
1.

The regional center pilot program is reauthorized retroactively or is pending reauthorization

within a twelve month period following sunset, and the investor's I-526 Petition is in due course
adjudicated;
or,

2.

Legislation is enacted or pending providing substantially similar immigration benefits to investors

under the former EB-5 regional center program within a twelve month period following sunset.

If none of the events described in 1 or 2 occur, or are not pending as stated, at the investors election, the
investor may (1) remain invested in the Project; or, (2) make a written request to the general partner for a
refund of the capital contribution of $500,000. Within 90 days of the general partners receipt of a
request for a refund, the capital contribution will be refunded by the Partnership to the investor. In any
such event, the investors rights are limited solely to the return of his or her capital contribution.

23

RISK FACTORS
Interests should be purchased only by persons with sufficient resources to assume the economic risks
inherent in the Project. Because of the lack of liquidity involved, no person should become a limited
partner unless he or she can afford to invest in the Partnership on a long-term basis. There can be no
assurance that the Developers will be able to service and repay the Partnerships loans, and it is possible
that the partners total investment in the Partnership will be lost. Set forth below is a brief description of
certain special factors and risks associated with investment in the Partnership and the business of the
Partnership, the Developers, Mount Snow and Peak Resorts. Other risks not presented here or which are
not currently known to the Partnership may affect the results and operations of the Partnership.
Risks Related to an Investment in the Partnership and the Business of the Partnership, the
Developers, Mount Snow and Peak Resorts
There is no guaranty that investors in the Partnership will receive a return of their capital.
According to the guidelines of USCIS relating to investments made within a project approved under the
EB-5 Visa Program, an investment within such a project must be fully at-risk. In order to ensure that the
capital invested by each EB-5 investor remains fully at risk for the period of time required under the EB-5
Visa Program, the Partnership Agreement specifically prohibits the Partnership from returning any
portion of the capital investment amount prior to the approval of the EB-5 investors I-829 Petition. In
addition, there is no guarantee that the loans will be repaid by the Developers to the Partnership upon
maturity which, may be extended from five years to seven years. The general partner expects that each
Developer will consider a number of options to repay the loan to the Partnership upon maturity. However,
there can be no assurance that the Developers will be successful in completing any refinancing or other
transaction that will result in proceeds that will enable the Developers repay the loans to the Partnership
in full. In any such event the Partnership may pursue any remedies available to it as an unsecured creditor
of the Developers and may also seek recourse to the guaranty of Peak Resorts of the facilities for any
unpaid amounts. The guaranty is not secured by any assets of Peak Resorts and there can be no assurance
that Peak Resorts will have sufficient resources to satisfy the guaranty. Any failure by the Developers to
repay the loans or by Peak Resorts to satisfy the guaranty may have a material adverse effect on the
ability of the limited partners to receive a return of their capital and may result in the complete loss of
their investment.
Risks inherent in construction and development projects may result in substantial unanticipated delays
or budget overruns and could prevent completion of the Project.
The Project being developed by West Lake LLC and Carinthia Ski Lodge LLC will be subject to the risks
normally associated with construction and development activities. The anticipated costs and construction
periods for the Project are based upon budgets, conceptual design documents and construction schedule
estimates prepared by Mount Snow in consultation with its engineers, architects, contractors and other
advisors. The Developers construction and development activities may be materially affected by the
availability and timely receipt of zoning and other regulatory approvals, adverse weather or labor
conditions, material shortages, construction, equipment or staffing requirements or problems and other
unpredictable contingencies beyond the control of the general partner and the Partnership. These risks
could result in substantial unanticipated delays or budget overruns and under certain circumstances could
prevent completion of construction and development activities once undertaken. In addition, although
Mount Snows master plan has been approved by the U.S. Department of Agriculture Forest Service and
the State of Vermont Natural Resources Board under Act 250, the Project is subject to environmental
review and analysis under the National Environmental Policy Act, and Peak Resorts must also submit
applications for the construction phases in order to proceed with the redevelopment, including the Project.
In addition, construction and approval of all plans and specifications for improvements to the properties
subject to the Ground Leases are subject to certain approval rights of Mount Snows existing lender.

24

Obtaining all required approvals and permits may result in unanticipated delays in the commencement of
construction. There is also a risk that approvals and permits may be conditioned on making changes that
increase the cost of implementing the Project.
There may be conflicts between the interests of the general partner of the Partnership and the interests
of the limited partners.
The affairs of the Partnership will be managed by the general partner. The sole member of the general
partner is Mount Snow. West Lake LLC and Carinthia Ski Lodge LLC, the two entities developing the
Project and to which the Partnership will loan funds via the facilities, are wholly owned subsidiaries of
Mount Snow Ltd. Accordingly, the Partnership is subject to potential conflicts of interest arising out of
the relationship between the general partner and its affiliates. No assurance can be given that disputes or
conflicts will not arise between the Partnership and the Developers or that such disputes or conflicts will
not be resolved in a manner that has a material adverse effect on the Partnership.
The Project is subject to further approval under Vermonts Act 250 and other land development laws.
In October 2010, Mount Snow submitted an Act 250 application with the State of Vermont for its master
plan, and in July 2011, the Vermont District Environmental Commission approved the master plan in
concept. However, each construction project requires a separate application and the issuance of a permit
to construct. In addition, land development laws in Vermont determine when and how much land may be
opened for development at any one time. Subject to approval by the applicable state, local and federal
regulatory agencies under applicable laws and the approval and issuance of all permits required for
construction of the projects, both the West Lake Project and Carinthia Ski Lodge Project are expected to
begin preliminary groundbreaking in 2014. However, there is no assurance that Mount Snow will be able
to obtain the required approvals and permits in a timely manner, or at all. This could result in a delay of
the Project or the inability to move forward with the Project altogether. Although the Partnership will not
release funds for hard construction costs to the Developers until all applicable approvals and permits have
been obtained, the inability of the Developers to move forward with the Project would affect the ability of
the EB-5 Investors to obtain a visa under the EB-5 Visa Program.
We may require substantial additional funds to complete the Project if all of the Units being offered are
not sold.
The anticipated overall cost of the Project is $66,000,000, of which $52,000,000 is intended to be funded
with the proceeds from this offering and will be supplemented with the additional investment in cash,
land or value of $14,000,000 provided by Mount Snow. To the extent that the offering is not fully
subscribed and less than $52,000,000 is raised, the Partnership will allocate up to the first $30,000,000 of
subscriptions received and accepted to West Lake LLC for the development of the West Lake Project.
The West Lake Project will be developed in three tranches consisting of $10,000,000 (tranche one),
$12,500,000 (tranche two) and $7,500,000 (tranche three). To the extent that the general partner accepts
subscriptions for any tranche and the proceeds resulting from such subscriptions do not equal the amount
for such tranche set forth above, Mount Snow will be required to make alternative arrangements to
finance the balance of the tranche. If and when subscriptions received exceed $30,000,000, the next
$22,000,000 will be allocated to Carinthia Ski Lodge LLC for the development of the Carinthia Ski
Lodge Project. To the extent that the general partner accepts subscriptions for the development of the
Carinthia Ski Lodge Project and the proceeds resulting from such subscriptions do not equal $22,000,000,
Mount Snow will be required to make alternative arrangements to finance the balance required to
complete the Project. There can be no assurance that Mount Snow will be able to obtain any required
additional financing on acceptable terms, or at all. To the extent that such additional financing is required
but cannot be obtained, it could result in substantial delays or could prevent completion of construction
and development of the Project. To the extent that Mount Snow obtains such financing through the
issuance of additional debt, such debt may have rights and preferences senior to the loans made by the

25

Partnership to the Project. In addition, any such debt financing, may involve agreements that include
covenants limiting or restricting the ability to take specific actions.
Peak Resorts and Mount Snow currently rely on one lender and its affiliates as a source for financing
and credit.
Peak Resorts and Mount Snow have historically relied on one lender and its affiliates for substantially all
of their financing and credit needs. In the event that Peak Resorts or Mount Snow is in default under the
credit facilities with this lender, or if the lender is otherwise not available to extend credit for any reason,
Peak Resorts or Mount Snow may not be able to obtain financing on terms as favorable as those under its
arrangements with this lender, if at all. As a result, if West Lake LLC and/or Carinthia Ski Lodge LLC are
unable to repay the loans upon maturity of the facilities, Peak Resorts may not be in a position to satisfy
its guaranty of payment of the loans from the Partnership.
The land upon which the Projects are being developed is subject to an existing mortgage, which if
foreclosed, could affect the developers interests in the Projects.
The land upon which each project is being developed is owned (or to be owned) by Mount Snow, and the
Developers of the Project are to enter into the Ground Leases with Mount Snow. Under the terms of each
Ground Lease, each Developer will be leasing the underlying land for approximately fifty (50) years at an
annual rent of $10.00 per year with the developer being responsible for paying all costs of maintaining
and operating each Project. This land is subject to a mortgage held by the lender to Peak Resorts and
Mount Snow. The mortgage currently secures approximately $100 million in debt of Mount Snow, Peak
Resorts and other affiliates of Peak Resorts. If there is an event of default under any of such indebtedness,
the lender would be entitled to foreclose the mortgage (or exercise other remedies). While the lender has
entered into an agreement whereby it has agreed not to disturb such tenant's tenancy and possession of the
West Lake and Carinthia Lodge properties in the event of any foreclosure, sale or other action or
proceeding for enforcement or deed in lieu of foreclosure, such agreement also provides that upon
foreclosure, such tenant and lender or any transferee of the property, as the successor landlord, shall
agree, with respect to the Carinthia Ground Lease, to adjust rent under such Ground Lease to an amount
equal to the then market rent, and upon foreclosure, the sale of any and all ski lift tickets and ski rentals
(and all other sales relating to or requiring access to and the use of the Mount Snow Resort) shall be
managed by the lender or other transferee/successor landlord of the property, and the profits from such
sales shall belong to lender or transferee/successor landlord. Such agreement further provides that annual
water payments under the Water Use Agreement shall be capped to an amount equal to the lesser of (i)
$1,050,000.00, and (ii) the principal amount owed by West Lake LLC pursuant to the West Lake Facility,
multiplied by three and one-half percent (3.5%). Based on our forecasts, profits from such sales are
expected to account for up to 80% of the profits generated by the Carinthia Ski Lodge. Accordingly, a
default under such indebtedness and foreclosure of the mortgage (or exercise other remedies), would
negatively affect the ability of the Developers to service the interest payment on the loan facilities, to
repay the loan facilities upon maturity and would have a material adverse effect on the ability of the
limited partners to receive a return of their capital and may result in the complete loss of their investment.
See also The Loan Facilities-Subordination. In addition, the lender also has a security interest in the
capital stock of Mount Snow. Accordingly, if there is an event of default under any of such indebtedness,
the lender would be entitled to exercise its rights under the security interest, which could also negatively
affect the ability of the Developers to service the interest payment on the loan facilities and to repay the
loan facilities upon maturity.
The agreements with the current lender prohibit Peak Resorts and its affiliates from incurring
additional debt.
The agreements with the current lender prohibit Peak Resorts and its affiliates from incurring additional
debt. The lenders consent was obtained to allow West Lake LLC and Carinthia Ski Lodge LLC to enter
into the loan facilities with the Partnership and to allow Peak Resorts to guarantee the collection of such

26

indebtedness. If additional funding is needed to complete the Project, consent will need to be obtained
from the lender to obtain additional debt. There can be no assurance that the lender will provide such
consent. If the Developers are not able to obtain the required consent from the lender to obtain additional
funding, the ability of the Developers to complete the Project will be materially and adversely affected.
Assumptions underlying financial projections may be inaccurate and/or incomplete.
Any projected financial information included in this private placement memorandum is based on
assumptions that the general partner believed to be reasonable at the time they were made; however, such
information necessarily involves known and unknown risks, uncertainties and other factors that may
cause the actual results, performance or achievements to be materially different from the results,
performance or achievements contained in such information. There can be no assurance that the
assumptions on which such information is based will prove to be accurate. No representation or warranty
of any kind is made with respect to the accuracy or completeness of any projected financial information
or the assumptions underlying them. Any projected financial information should not be relied upon in
connection with making an investment decision in the Partnership. Any projected financial information
was not prepared with a view toward compliance with published guidelines of the SEC, the American
Institute of Certified Public Accountants, or generally accepted accounting principles. Unless otherwise
noted, the Partnership did not retain independent accountants to prepare or review any projected financial
information and, accordingly, no independent accountant is expressing an opinion with respect thereto.
The ski resort business is vulnerable to the risk of unseasonably warm weather conditions and skier
perceptions of weather conditions.
The ability to attract visitors to the Mount Snow Resort is influenced by weather conditions and by the
number of cold weather days during the ski season. Unseasonably warm weather can adversely affect
skier visits and the revenues and profits generated by the resort. For example, warm weather may result in
inadequate natural snowfall and render snowmaking wholly or partially ineffective in maintaining quality
skiing conditions. Also, the early season snow conditions and skier perceptions of early season snow
conditions influence the momentum and success of the overall season. There is no way to predict future
weather patterns or the impact that weather patterns may have on the results of operations or visitation at
the resort. During the 2011/2012 ski season, Mount Snow experienced historic low snowfall. This
resulted in lower than expected revenues. Revenues for the 2011/12 season were 19% below projected
and 10.7% below the average of the previous three years. This resulted in an EBITDA of 42% below
projected and 32% below the average of the previous three years. The operating margin in 2011/12 was
19.9% compared with 28.8% projected and 24.3% averaged over the previous three years.
The ski resort business is highly seasonal and the occurrence of certain events during peak times could
have a negative effect on revenues and the Developers ability to service the loan and repay the
facilities.
Ski resort operations are highly seasonal. Although the air temperatures and timing and amount of
snowfall can influence the number and type of skier visits, the majority of the skier visits are from midDecember to the end of March. Accordingly, the significant majority of Mount Snows revenues are
generated during the third and fourth fiscal quarters and in those periods the highest revenues are
generated on weekends and during three major holiday periods: Christmas, Dr. Martin Luther King, Jr.
Weekend and Presidents Weekend. This high degree of seasonality and dependence on weekends and the
three major ski holidays increases the impact of certain events on operating results. Adverse weather
conditions, equipment failures, and other developments of even moderate or limited duration occurring
during these peak business periods could significantly reduce revenues and cash flows and adversely
affect the Developers ability to service the loans and repay the facilities.

27

Mount Snow competes with other leisure activities and ski areas, which makes maintaining the
customer base difficult.
The skiing industry is highly competitive and capital intensive. Mount Snow competes against other ski
areas in their markets for both day skiers and extended travel skiers. Its competitive position depends on a
number of factors, such as the quality and coverage of snowmaking operations, resort size, the
attractiveness of terrain, lift ticket prices, prevailing weather conditions, the appeal of related services and
resort reputation. Some of Mount Snows competitors have stronger competitive positions in respect of
one or more of these factors, which may adversely affect its ability to maintain or grow its customer base.
Mount Snow also faces competition from various alternative leisure activities. Mount Snows ability to
maintain levels of skier visits depends on, among other things, weather conditions, costs of lift tickets
and related skier services relative to the costs of other leisure activities and its ability to attract people
interested in recreational sports.
Mount Snow is subject to extensive environmental laws and regulations.
Mount Snows operations are subject to a variety of federal, state and local environmental laws and
regulations, including those relating to emissions to the air; discharges to water; storage, treatment and
disposal of wastes; land use; remediation of contaminated sites; and protection of natural resources such
as wetlands. The facilities at Mount Snow are subject to risks associated with mold and other indoor
building contaminants. From time to time its operations are subject to inspections by environmental
regulators or other regulatory agencies. It is also subject to worker health and safety requirements. Efforts
to comply with applicable laws do not eliminate the risk that Mount Snow may be held liable, incur fines
or be subject to claims for damages, and that the amount of any liability, fines, damages or remediation
costs may be material for, among other things, the presence or release of regulated materials at, on or
emanating from properties it now owns or leases and operates, or formerly owned, leased or operated,
newly discovered environmental impacts or contamination at or from any of its properties, or changes in
environmental laws and regulations or their enforcement. The costs or liabilities could exceed the value
of the affected real estate and could have a material adverse effect on the ability of the limited partners to
receive a return of their capital and may result in the complete loss of their investment.
The high fixed cost structure of ski resort operations can result in significantly reduced cash flows if
revenues decline.
The cost structure of ski resort operations has a significant fixed component with variable expenses
including, but not limited to, resort related fees, credit card fees, retail/rental cost of sales and labor, ski
school labor and dining operations. Any material declines in the economy, elevated geopolitical
uncertainties and/or significant changes in historical snowfall patterns, as well as other risk factors
discussed herein, could adversely affect revenue. As such, the margins, profits and cash flows of Mount
Snow may be materially reduced due to declines in revenue given the relatively high fixed cost structure.
In addition, increases in wages and other labor costs, energy, healthcare, insurance, transportation, fuel,
and other expenses included in fixed cost structure may also reduce margins, profits and cash flows.
A substantial portion of the skiable terrain at Mount Snow is used under the terms of Forest Service
permits.
A substantial portion of the skiable terrain at Mount Snow is federal land that is used under the terms of a
permit with the United States Forest Service. The permit gives the United States Forest Service the right
to review and comment on the location, design, and construction of improvements in the permit area and
on certain other operational matters. The permit expires on April 4, 2047 but can also be terminated or
modified by the United States Forest Service for specific compelling reasons or in the event the permit
holder fails to perform any of its obligations under the permits. Otherwise, the permits may be renewed.
A natural disaster could damage property and reduce the number of guests who visit the Mount Snow
Ski Resort.

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A severe natural disaster, such as a forest fire, flood or landslide, may interrupt our operations, damage
our properties and reduce the number of guests who visit Mount Snow and other Peak Resorts ski areas.
Damage to property could take a long time to repair and there is no guarantee that there would be
adequate insurance to cover the costs of repair or the expense of the interruption to business. Furthermore,
such a disaster may interrupt or impede access to the affected properties or require evacuations and may
cause visits to affected properties to decrease for an indefinite period. The ability to attract visitors to ski
resorts is also influenced by the aesthetics and natural beauty of the outdoor environment where the
resorts are located. A severe forest fire or other severe impacts from naturally occurring events could
negatively impact the natural beauty of a resort and have a long-term negative impact on overall guest
visitation as it would take several years for the environment to recover.
The loss of key executive officers would harm Mount Snows business.
Mount Snows success depends to a significant extent upon the performance and continued service of
Peak Resorts key management team which includes Timothy Boyd, its president and principal executive
officer, Stephen Mueller, its vice president and principal financial and accounting officer, and Richard
Deutsch, its vice president in charge of business and real estate development. The loss of the services of
this management team could have a material adverse effect on business and operations because of Messrs.
Boyds, Muellers and Deutschs specific and unique knowledge of acquiring and operating multiple ski
resorts, including day ski areas and overnight drive ski areas.
Mount Snow depends on a seasonal workforce.
Mount Snows mountain and lodging operations are highly dependent on a large seasonal workforce.
Mount Snow recruits year-round to fill thousands of seasonal staffing needs each season and works to
manage seasonal wages and the timing of the hiring process to ensure the appropriate workforce is in
place. There is no guarantee that material increases in the cost of securing this seasonal workforce will not
be necessary in the future. Furthermore, there is no guarantee that Mount Snow will be able to recruit and
hire adequate seasonal personnel as the business requires. Increased seasonal wages or an inadequate
workforce could have an adverse impact on Mount Snows results of operations, and the ability of West
Lake LLC and/or Carinthia Ski Lodge LLC to repay the loans upon maturity of the facilities.
The nature of the ski resort business subjects Mount Snow and Peak Resorts to litigation in the
ordinary course of business.
The safety of guests and employees is a major concern and focus for all ski resorts. By the nature of the
activities, ski resorts and their owners are exposed to the risk that guests or employees may be involved in
accidents during the use, operation or maintenance of ski lifts, rides and other resort facilities. As a result,
Mount Snow and Peak Resorts are, from time to time, subject to various asserted or unasserted legal
proceedings and claims. Any such claims, regardless of merit, could be time-consuming and expensive to
defend and could divert managements attention and resources. While it is believed that there is adequate
insurance coverage and/or accrual for loss contingencies for all known matters that are probable and can
be reasonably estimated, there can be no assurance that the outcome of all current or future litigation will
not have a material adverse effect on the results of operations of Mount Snow and/or Peak Resorts.
A disruption in water supply would impact snowmaking capabilities and adversely affect operations.
Mount Snow is subject to state laws and regulations regarding its use of water. There can be no assurance
that applicable laws and regulations will not change in a manner that could have an adverse effect on
development of the West Lake Project, or that important permits, licenses, or agreements will not be
canceled or will be renewed on terms as favorable as the current terms. Any failure to have access to
adequate water supplies to support current operations and the Project would have a material adverse effect
on Mount Snow and the Partnerships ability to achieve the objectives described in the Business Plan,
including the job creation objectives.

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Peak Resorts is structured as a holding company and has no assets other than the equity and
membership interests in its subsidiaries.
Peak Resorts is a holding company and it does not currently have any material assets other than equity
and membership interests in its direct and indirect subsidiaries. Peak Resorts working capital needs are
dependent, in part, upon the receipt of dividends and other distributions from its subsidiaries. Certain laws
may restrict or limit such payments to Peak Resorts by its subsidiaries. Accordingly, if West Lake LLC
and/or Carinthia Ski Lodge LLC are unable to repay the loans upon maturity of the facilities, Peak
Resorts may not be in a position to satisfy its guaranty of the loans from the Partnership.
There is no public market for the Units, and you must be prepared to hold your investment for an
indefinite period of time.
There is not now, and there is not expected to be, a trading market for the Units. The Units are restricted
securities within the meaning of applicable securities laws and may not be sold or otherwise transferred
by you in the absence of a registration statement covering the Units or pursuant to an exemption from
such registration. The Partnership has no obligation to register Units and does not currently intend to do
so. In addition, the Units are subject to restrictions on transfer under the Partnership agreement which
substantially restricts your ability to transfer the Units. Accordingly, if you purchase a Unit, you must be
prepared to hold your investment for an indefinite period of time.
There are substantial U.S. federal and state income tax risks associated with an investment in the
Partnership.
There are substantial U.S. federal and state income tax risks associated with an investment in the
Partnership. For instance, the Partnership will not be subject to entity-level federal income tax. Instead,
each partner will be required annually to take into account its respective distributive share of the
Partnerships items of taxable income, gain, loss, deduction and credit, without regard to whether any
distributions are made by the Partnership. Accordingly, partners may recognize taxable income for
federal, state and local income tax purposes without receiving any or a sufficient distribution from the
Partnership with which to pay the taxes thereon. For additional risks and other important information, see
Federal Income Tax Consequences.
Mount Snow is involved in a dispute with a consultant it engaged in connection with this offering.
Mount Snow currently has a dispute pending before the American Arbitration Association in connection
with a breach of contract claim with a consulting firm that was engaged to provide certain services in
connection with this offering. Both parties allege that a breach of contract has occurred. Mount Snow
believes that it has substantial legal and factual defenses to the breach of contract claim alleged by the
consultant, and it intends to pursue these defenses vigorously. While it is not possible to estimate
potential, if any, damages that Mount Snow may be required to pay as a result of this claim, this dispute is
not expected to have a material impact on Mount Snow or on this offering. Certain fees and expenses in
connection with this dispute, including any costs of settlement, will be paid by Mount Snows parent
company Peak Resorts.

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Risk Factors Related to the Immigration Process

Prospective investors should consult with counsel familiar with U.S. immigration laws and practice.
Purchase of a Unit in the Partnership does not guarantee you will receive lawful permanent residence in
the United States. Among the risk factors that you should consider when making your decision to invest in
this offering are those that relate to the immigration process including, but not limited to the following set
forth below.
General
USCIS may modify its practices under the EB-5 Visa Program by providing updated guidance to its
examiners. On occasion, but not consistently, USCIS publishes instructions for the use of EB-5 Investors
and their counsel. EB-5 Investors and their counsel often first become aware of new practices and
policies through the adjudication process for I-526 or I-829 Petitions. If such modifications occur, EB-5
Investors may be required to provide new information or modified business plans or other modifications
to an EB-5 Project during the adjudication process to comply with USCIS requirements that were
unknown to investors and their counsel at the time an I-526 Petition or an 1-829 Petition was filed.
Changes in applicable law, regulations and guidance may also occur from time-to-time, which may have
the effect of requiring EB-5 Projects and EB-5 Investors to provide new information or modify their
previous submissions to satisfy new requirements. There can be no assurance that such modifications will
not be required in this Project on account of new policies, practices, laws or regulations not effective or
not known at this time. There can be no assurance that this Project will be able to modify its business
plan or take other actions that may be required to comply with yet unknown requirements. The investor
should retain legal counsel for continuing advice on these matters.
While efforts have been made to structure this offering so that foreign investors may be able to satisfy the
requirements of the EB-5 Visa Program and qualify as alien entrepreneurs, (which is only a preliminary
step to becoming eligible for admission to the United States with their spouse and unmarried minor
children as lawful permanent residents), no representations can be made and no guarantees can be given
that investment in the Partnership will guarantee or otherwise assure that your I-526 Petition will be
granted by USCIS or, if it is, that investors with their spouse and such children will obtain conditional or
unconditional lawful permanent resident status.
Loan model
The Partnership will loan the proceeds of the offering to West Lake LLC and Carinthia Ski Lodge LLC to
develop the Project. The loans will be subject to a guaranty of collection by Peak Resorts.
The general partner is aware that, in the past, USCIS has questioned whether a loan structure in which a
lender extends one loan to a developer satisfies the requirement that the lender be an ongoing
commercial enterprise under the INA. The general partner believes that structuring the loans as lines of
credit with multiple advances to more than one developer may address USCIS concern. However, there
can be no assurance that USCIS will accept that the structure is permissible under the EB-5 Visa Program
or, if it does so currently, that USCIS will not change its interpretation subsequently and disqualify the
loan model contemplated by this offering as permissible under the EB-5 Visa Program.
In addition, under the EB-5 Visa Program any commitment by the enterprise to the investor that is
deemed to transform the relationship from an investment to a debt arrangement will disqualify the
invested funds from being deemed at risk and will not be counted towards the minimum sum required
to be invested. The general partner does not believe that the guaranty of collection in favor of the
Partnership that is being provided by Peak Resorts disqualifies the investment from being deemed at
risk since the investors are making an equity investment in the Partnership that is not subject to the
guaranty and they have no commitment from the Partnership that their equity capital will be returned or

31

what, if any, rate of return will be realized on the investment. The general partner is aware that similar
arrangements have passed muster with USCIS in the past but no ruling is being requested from USCIS
with respect to this matter and there can be no assurance that USCIS will not change its interpretation
subsequently and disqualify the arrangement contemplated by this offering as permissible under the EB-5
Visa Program.
If USCIS determines that the loan and guaranty model described in the private placement memorandum
and implemented by the Subscription Documents does not qualify under the EB-5 Visa Program for any
reason, then petitions filed by EB-5 Investors may not be granted resulting in a denial of an investors
petition for permanent residency in the United States.
Approval of investments in the Project
There is no procedure in the INA or its enabling regulations to pre-qualify an investment for the EB-5
Visa Program. Individual investor applications on Form I-526 must be filed with USCIS by the foreign
investor to determine the suitability of the Project and the partnership interests for immigration purposes
under 8 U.S.C. 1153 (b)(5)(a) - (d); INA 203 (b)(5)(a) - d). USCIS may deny such an application.
Processing times
USCIS and USDOS processing times for I-526 Petitions and the adjustment of status or consular
processing cases are not predictable, notwithstanding published processing times by these agencies.
Delays in processing may occur. USCIS and USDOS advise investors not to make changes in any living,
employment, schooling or other lifestyle arrangements before receiving CLPR through the EB-5 Visa
Program.
Government filing fees
Government filing fees may change. Such changes may increase the immigration filing costs to an
investor who has made an investment in the Project and who is waiting to file an I-526 Petition or a
consular processing or AOS case (and collateral applications for employment authorization and advanced
permission to travel).
Limitations on return of funds if I-526 Petition is denied
In general, once the General Partner accepts the investment and the funds are released from escrow, the
funds are nonrefundable. However, an investor may seek a return of the $500,000 capital contribution
and a portion of the $50,000 administrative fee if his or her I-526 petition is denied. Any return of funds
is subject to the discretion of the General Partner, and requires that an investor has made a good faith
effort to secure USCIS approval of his or her I-526 petition. A request for the return of capital and a
portion of the administrative fee must be made in writing to the General Partner.
Additionally, the EB-5 Visa Program, by virtue of recent amendments to the regional center pilot program
enabling legislation, has been extended through September 30, 2015. Thereafter, if the regional center
pilot program lapses, for each investor whose case is filed with USCIS but not adjudicated on or before
the date of lapse, such investors $500,000 capital contribution will remain invested in the Partnership
provided: (1) The regional center pilot program is reauthorized retroactively or is pending reauthorization
within a twelve month period following sunset, and the investor's I-526 petition is in due course
adjudicated; or (2) Legislation is enacted or pending providing substantially similar immigration benefits
to investors under the former EB-5 regional center program within a twelve month period following
sunset. If none of the events described in 1 or 2 occur, or are not pending as stated, at the investors
election, the investor may (1) remain invested in the Project; or, (2) make a written request to the general
partner for a refund of the capital contribution of $500,000. Within 90 days of the general partners
receipt of a request for a refund, the capital contribution will be refunded by the Partnership.

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Targeted employment areas and the minimum investment amount

As a general rule, the EB-5 Visa Program calls for a minimum investment of $1,000,000 USD. This sum
may be reduced to $500,000 USD if the EB-5 Project that receives the investment is situated in a TEA.
The eligibility of an EB-5 Project to accept $500,000 USD investments is questioned if the project was
situated in a TEA at the time the investment was made but is not in a TEA at the time the I-526 Petition is
filed. In the case of a TEA based upon the project's location in a rural area, this difference might occur
because during this interim period new population data is published or because a new MSA is described
to include the location of the project, albeit within a rural area.
In the event of a change between the date of the investment and the date of the filing of the I-526 Petition,
USCIS has said that it will consider the project to be within a TEA at the time of the investment if the
invested funds were available to the project to undertake employment creation before the I-526 Petition
was filed. In this Project, USCIS should apply this standard inasmuch as the invested funds are
irrevocably committed to the Project before the I-526 Petition is filed. There can be no assurance that
USCIS will apply this rule appropriately.
USCIS has also said it will not permit every investor in a pooled investment project to invest only
$500,000 USD merely because one or more investors were previously permitted to do so based upon the
prior presence of a project in a TEA.
If the location of the project is judged to no longer be within a TEA, investors filing 1-526 Petitions
thereafter will be required to invest $1,000,000 USD. No assurance can be provided that no new
population data will be published rendering the location of a project outside a rural area or that new MSA
boundaries depicting the location of the Project in the MSA will not be published.
Investors should consult with their counsel concerning TEA issues and issues concerning the effects of
investments of differing amounts on immigration and investment matters of significance to the investor.
Attaining lawful permanent residence
Despite the approval of an investors I-526 Petition, there cannot be any guarantee that the investor or the
investors spouse or any of the investors minor, unmarried children will be granted lawful permanent
residence. The grant of such immigration status is dependent upon the personal background of each
applicant. Any one of several government agencies may determine in its discretion, usually without the
possibility of appeal, that an applicant for lawful permanent residence is excludable from the United
States.
Additionally, USCIS or a U.S. consulate or embassy could readjudicate and/or return an approved I-526
petition for revocation if there is a concern that the petition was approved in error.
Grounds for exclusion or inadmissibility
Applicants for lawful permanent residence must demonstrate, affirmatively, that they are admissible to
the United States. There are many grounds of inadmissibility that the government may cite as the basis to
deny admission for lawful permanent residence.
1.
Various statutes, including, for example, Sections 212, 237 and 241 of the INA, the Antiterrorism
and Effective Death Penalty Act of 1996 and the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996 set forth grounds of inadmissibility, which may prevent an otherwise
eligible applicant from receiving an immigrant visa, entering the United States or adjusting to
lawful permanent residence.
2
Examples of aliens precluded from entering the United States include:
Persons who are determined to have a communicable disease of public health significance;

33

Persons who are found to have, or have had, a physical or mental disorder, and behavior
associated with the disorder which poses, or may pose, a threat to the property, safety, or
welfare of the alien or of others, or have had a physical or mental disorder and a history of
behavior associated with the disorder, which behavior has posed a threat to the property,
safety, or welfare of the immigrant alien or others, and which behavior is likely to recur or to
lead to other harmful behavior;
Persons who have been convicted of a crime involving moral turpitude (other than a purely
political offense), or persons who admit having committed the essential elements of such a
crime;
Persons who have been convicted of any law or regulation relating to a controlled substance,
admitted to having committed or admits committing acts which constitute the essential
elements of same;
Persons who are convicted of multiple crimes (other than purely political offenses) regardless
of whether the conviction was in a single trial or whether the offenses arose from a single
scheme of misconduct and regardless of whether such offenses involved moral turpitude;
Persons who are known, or for whom there is reason to believe, are, or have been, traffickers
in controlled substances;
Persons engaged in prostitution or commercialized vice;
Persons who have committed in the United States certain serious criminal offenses, regardless
of whether such offense was not prosecuted as a result of diplomatic immunity;
Persons excludable on grounds related to national security, related grounds, or terrorist
activities;
Persons determined to be excludable by the Secretary of State of the United States on grounds
related to foreign policy;
Persons who are or have been a member of a totalitarian party, or persons who have
participated in Nazi persecutions or genocide;
Persons who are likely to become a public charge at any time after entry;
Persons who were previously deported or excluded and deported from the United States;
Persons who by fraud or willfully misrepresenting a material fact, seek to procure (or have
procured) a visa, other documentation or entry into the United States or other benefit under
the INA;
Persons who have at any time assisted or aided any other alien to enter or try to enter the
United States in violation of law;
Certain aliens who have departed the United States to avoid or evade U.S. military service or
training;
Persons who are practicing polygamists; and
Persons who were unlawfully present in the United States for continuous or cumulative
periods in excess of 180 days.

No return of funds if visa or adjustment of status is denied

Following approval of an investors I-526 Petition, the investor and the spouse and qualifying children of
the investor must apply for an immigrant visa or adjustment to permanent resident status. As part of this
process, they undergo medical, police, security and immigration history checks to determine whether any
of them are inadmissible to the United States for any of the reasons mentioned above or for any other
reason. The visa or adjustment of status may be denied notwithstanding the eligibility for or approval of
the I-526 Petition. If, following subscription and payment of the investment funds and payment of the
administrative fee the investor or the spouse or any children of the investor are denied a visa for
conditional lawful permanent residence or denied adjustment of status to conditional lawful permanent
residence such action will not entitle the investor to the return of any funds paid to the Partnership

34

pursuant to this offering unless and until a substitute partner is found as set forth in the Partnership
Agreement, and, in any event, there shall be no refund of the administration fees.
Conditional lawful permanent residence
Lawful permanent residence status granted initially to an investor and the spouse and qualifying children
of the investor is conditional. Each investor and the spouse and qualifying children of the investor must
seek removal of conditions before the second anniversary of lawful permanent admission to the United
States. There cannot be any assurance that USCIS will consent to the removal of conditions as to the
investor or as to the spouse or qualifying children of the investor, each of whom must make a separate
application to remove conditions (albeit a single form is used to identify all applicants). If the investor
fails to have conditions removed, the investor and the spouse and children of the investor will be required
to leave the United States and will be placed in removal proceedings. Even if the investor succeeds in
having conditions removed, the spouse and each qualifying child of the investor, separately, must have
conditions removed. Failure to have conditions removed as to any of these members of the investor's
family will require some members to depart from the United States and such family members will be
placed in removal proceedings.
No regulations regarding removal of conditions
Generally
USCIS regulations governing lawful permanent residence for investors do not state specifically the
criteria which USCIS apply to determine eligibility for the removal of conditions to lawful permanent
resident status. Courts have determined some standards and USCIS have issued memoranda on some
issues. The investor should seek the advice of immigration counsel to determine all of the issues that may
arise in the I-829 Petition process on account of the absence of regulations controlling the process or
resulting from ambiguities in existing law and regulations. USCIS can be arbitrary in interpreting the law.
Policy memos issued by USCIS do not necessarily have the binding authority of a regulation. This means
that USCIS may change the agencys interpretation of the law with little or no notice to the public.
Business changes and business failures
The I-526 Petition must be supported by evidence that the EB-5 Project has received all investor capital,
will dedicate the funds to furtherance of the EB-5 Project and thereby will create the requisite number of
employment positions. When an investor seeks removal of conditions, the I-829 Petition must be
supported by evidence that these requirements have been met, or, if they have not been met, there must be
compelling explanations for delays or changes in the EB-5 Project. If the EB-5 Project is delayed in its
implementation, if invested funds are expended differently or more slowly than anticipated or if
employment is behind schedule, USCIS will expect documentation of changed circumstances to explain
the delay and evidence that the project is following its essential business plan.
It will be incumbent upon the investor to establish that despite such changes, the requirements of the EB-5
Visa Program have been met, the required capital has been paid to the Project, the investment has been
sustained and the requisite number of employment positions has been created. There cannot be any
assurance that USCIS will consider a change in the business plan to be immaterial, will be persuaded by
the investors explanation of the reason for the change, or will conclude that the investors EB-5 Project is
following the business plan contemplated by the I-526 Petition and that the requirements of the EB-5 Visa
Program are being or will be met by the Project. Failure to persuade USCIS on each of these issues will
result in the denial of an investors I-829 Petition. In this event, the investor and the investor's qualifying
family members will be placed in removal proceedings and may be required to depart the United States.
In the event of a material change to the business plan in the Project between the time the I-526 Petition is
filed and the time the investor applies for removal of conditions, the investor may be required by USCIS

35

to file a new I-526 Petition that incorporates changes in the Project. Investors are solely responsible for
seeking qualified U.S. immigration counsel to determine whether USCIS would require the filing of a
new I-526 petition, should circumstances and facts change. In some cases, this will necessitate a new twoyear period of conditional permanent residence after which the investor will be expected to file a new I829 Petition to remove conditions. If a new I-526 Petition is filed, the children of the investor who
become twenty-one (21) years old or who married before the new I-526 Petition is filed will be deemed to
have aged out and will not be eligible to immigrate based upon the parent-child relationship with the
investor. The spouse of the investor, divorced from the investor before the new I-526 Petition is filed,
will also be ineligible to immigrate based on the former marriage.
There cannot be any assurance that all investors in the Partnership will have subscribed and have paid in
all required capital on the anticipated schedule, that the Project will be developed as scheduled or that
invested funds will be expended as scheduled or in a manner anticipated in the business plan. It is
possible, and no assurance may be provided to the contrary, that the Project will not hire workers on the
predicted schedule. Should one or more of these circumstances occur, no assurance may be given that
USCIS will be satisfied with the explanation. If USCIS rejects the explanation, the I-829 Petition will be
denied and the investor and the investors qualifying family members will be placed in removal
proceedings which may require them to depart the United States.
USCIS expects that an EB-5 Project will be continuously maintained through the period of conditional
lawful residence to the time the I-829 Petition is filed. USCIS will examine the matter of whether the
investment has been lost prior to or may be lost soon after conditions are removed. USCIS will also focus
on whether an EB-5 Project is likely to cease its operations shortly after conditions are removed, thereby
shedding employment it has created.
If an EB-5 Project fails (meaning foreign investments are lost or are expected to be lost, or if jobs are not
created in sufficient numbers or once created are lost or are expected to be lost) during the period of an
investors conditional residence or is deemed likely to fail shortly after conditions are removed, USCIS
will not remove conditions. Investors are not credited for having made investments in good faith or for
having created all the required employment during a part of the period of conditional residence. No
assurances may be given that this Project will not fail during the period of conditional permanent
residence or at some time thereafter. No assurance may be provided that USCIS will forgive such failure
or anticipated failure by granting an investors I-829 Petition. If the petition is denied, the investor and
the investors qualified family members will be placed in removal proceedings and may be required to
depart the United States.
Review of I-526 Petition compliance during the I-829 Petition process
USCIS, at its election, uses the I-829 Petition process to review the investors compliance with previously
resolved I-526 Petition requirements. Such a review will be undertaken if the examiner believes that the
prior favorable determination was legally deficient or if material facts have changed during the period
of conditional residence. If USCIS believes the investor is not eligible to participate in the EB-5 Visa
Program, the burden is on the investor to establish eligibility by reliance on independent objective
evidence.
The Partnership will seek as much information as possible from USCIS, where good business practices
permit, in an effort to assist investors in qualifying for the removal of conditions. However, in the
absence of regulations the Partnership may make certain management decisions without assurance that
they will not be challenged by USCIS, thus resulting in a request for evidence and, possibly, the denial of
an investors I-829 Petition. If the I-829 Petition is denied the investor and the investors spouse and
qualifying children will be expected to depart the United States and will be placed into removal
proceedings.

36

Each investor should consult with immigration counsel and become educated about the standards that will
determine eligibility of the investor and the spouse or children of the investor to achieve unconditional
lawful permanent residence in the United States.
Numerical quotas
Currently, 3,000 of the total 10,000 visas that are allocated annually under the EB-5 Visa Program are
available to foreign investors and their spouses and qualifying children who are making an investment in
a TEA. The Project is currently situated within a TEA. The visas are available on a first-come, firstserve basis. Recently, USCIS has announced that it considers the 3,000 visas for investors in a TEA as a
guaranteed allocation, not a quota, so that all TEA cases are eligible to seek a visa, up to the annual quota
of 10,000 visas.
Currently, the allocation of visas for foreign investors in TEAs has not been oversubscribed despite
increasing demand for visas under the EB-5 Visa Program. There is no reliable means to predict if delay
due to unavailability of visas will occur, or, if it occurs, how long an investor or the spouse and qualifying
children of the investor will wait before visas becomes available for them. In addition, there could be an
exhaustion of visa numbers in a fiscal year for nationals of a specific country (e.g. China).
Changes to current law on quotas or USCIS practices regarding the allocation of visas under the EB-5
Visa program could adversely impact the investor. Investors should seek the advice of immigration
counsel concerning the law and USCIS practices regarding the availability of visas.
Expiration of the regional center pilot program
The regional center pilot program is significant to each investor until the investor receives unconditional
lawful permanent residence. Each of the three stages to be completed by the investor in an EB-5 Project
affiliated with a regional center prior to removal of CPLR is dependent upon the existence of the regional
center as authorized by the pilot program. Certain government agencies that confer immigration benefits
upon EB-5 Investors have announced that they are not authorized to confer such benefits (e.g., approve an
I-526 Petition, approve an I-485, application to adjust status or grant an immigrant visa to an EB-5
Investor or approve an I-829 Petition) in the event the regional center pilot program expires. The
investors qualifying relatives are subject to the same outcomes as the investor if the regional center pilot
program expires.
The regional center pilot program was first created in 1992. Since then it has been extended, most
recently in 2012, until September 30, 2015. This Project seeks the benefit of the regional center pilot
program that permits employment created indirectly by investments in the Project to be counted towards
the minimum number of employment positions needed to qualify under the EB-5 Visa Program. There is
no reliable means to know if the regional center program will be extended beyond September 30, 2015 or
made permanent.
If the regional center pilot program lapses, investors whose projects depend upon regional centers may
not be able to file I-526 Petitions or have filed petitions adjudicated; and, applications for lawful
permanent residence or the removal of conditions may be rejected, delayed or denied, depriving the
investor and the investors qualifying family unable to enter, live or work in the United States. Currently,
there is no way to know or predict the positions that the relevant government agencies will take
concerning the immigration rights of EB-5 Investors in regional center pilot program projects should the
pilot program lapse.

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Active participation in Partnership business

The EB-5 Visa Program requires that each investor be actively involved in the business affairs of the
Partnership. Failure to be actively involved may jeopardize approval of the I-526 Petition or result in the
denial of lawful permanent residence status for the investor and the spouse and the qualifying children of
the investor. The Partnership Agreement mandates that each limited partner shall participate in the
management of the business of the Partnership by making suggestions or recommendations to the general
partner on issues of policy important to the Partnership. The Partnership Agreement also permits limited
partners to participate in one or more of the activities (i) permitted of limited partners under VRULPA
and (ii) otherwise set forth under the Partnership Agreement. No limited partner shall control the
Partnerships business or management or have any authority to act or bind the Partnership in any manner
contrary to the provisions of the Partnership Agreement. The general partner cannot assure investors in
the Partnership that these provisions are or will be satisfactory to USCIS to meet the active involvement
requirement.
Risks attendant to status as an alien entrepreneur
USCIS frequently reinterprets the criteria for participation in the EB-5 Visa Program. The creation of new
standards, changes in the emphasis that USCIS places on different factors, the reinterpretation of existing
criteria and the publication of new field instructions to examiners without prior notice all become binding
upon previously filed but unadjudicated I-526 Petitions and may affect whether such petitions will be
approved. These USCIS actions also are binding on EB-5 Projects that have accepted some investors
whose I-526 Petitions are being prepared for filing and may determine if such projects and the I-526
Petitions and I-829 Petitions based upon the projects will continue to be deemed compliant with
applicable rules. There can be no assurance that compliance with standards in effect as of the date an I526 Petition is filed will lead to the approval of the I-526 or I-829 Petitions.
The EB-5 Visa Program contains many conditions that must be met to the satisfaction of USCIS.
Investors should consult with immigration counsel to review all EB-5 Visa Program requirements. The
failure to meet even one of these requirements to the satisfaction of USCIS may result in the denial of the
investors I-526 Petition or subsequent petitions.
Consular processing - visa not guaranteed
In some instances, consulates place visa applicants in administrative processing. Consuls are very
reluctant to explain the specific reasons for this additional step taken before a visa will be issued. This
procedure may be encountered in consular posts that report high levels of visa fraud, posts in some
countries that are hyper-vigilant concerning security matters or because some information about a visa
applicant, in the opinion of a consular officer, merits further background checks. Once administrative
processing begins, consulates will not discuss the progress of a visa application. Applicants are relegated
to indeterminate waiting for a decision on a visa application. Such a decision may take years to obtain.
Decisions by consuls are discretionary and unreviewable. USCIS and USDOS report efforts to
communicate more efficiently regarding their respective roles in determining the eligibility of EB-5
Investors for immigrant visas. There cannot be any assurance that improved communications will occur
generally or with respect to a particular investor or the investors spouse or minor children. Neither may
it be assured that improved communications will result in the issuance of a visa. Factors extraneous to the
EB-5 Project or the relationship of the investor to the project that a consul may, with unreviewable
discretion, elect to consider could result in the denial of a visa. Investors are advised to seek immigration
counsel on matters of consular processing.
Admission after investing, filing the I-526 Petition or during consular processing
Admission to the United States as a visitor or in most other non-immigrant statuses is predicated upon the
intent to depart the country at the end of the period of admission. Experienced legal practitioners caution
that non-immigrant intent may be difficult to establish once an investor has paid funds into an EB-5

38

Project or files an I-526 Petition, as the sole purpose of this investment and petition is to establish that the
investor qualifies to become a lawful permanent resident. Investors should consult with immigration
counsel to evaluate the risks associated with seeking temporary (non-immigrant) admission to the United
States subsequent to making the investment or filing an I-526 Petition or an application for an immigrant
visa. Despite best efforts, an inspector may deny admission under these circumstances. Such a denial
may also result in formal exclusion from the United States which might preclude admission with an
immigrant visa for a period of years.
Adjustment of status
Making the investment and filing the I-526 Petition before applying for AOS may be viewed by USCIS as
evidence of immigrant intent and may result in the denial of AOS. In such an event, the investor will be
required to depart the United States and will need to seek an immigrant visa through consular processing.
Any fraud or misrepresentation to U.S. immigration or consular officials could result in a finding of an
Investors permanent ineligibility to secure a green card.
There may be additional reasons why an alien may not adjust status, which is a benefit granted in the
discretion of USCIS. There is no appeal from a denial of AOS; the only relief available is a request to reopen or re-consider the AOS application. Investors should consult with immigration counsel to determine
if they, their spouse and their children are eligible for AOS or if pursuit of AOS would be prudent.
Near the conclusion of an AOS case, USCIS may schedule an interview for the AOS applicant. The
interview may be waived by USCIS, but the waiver should not be expected. Experienced immigration
law practitioners believe that USCIS uses profiling information to determine who will be interviewed and
it also interviews some AOS applicants to maintain the integrity of its screening process. There is no
formal process to request the waiver of an interview. Investors should consult with immigration counsel
on all matters concerning adjustment of status.
Removal of conditions
In the history of the EB-5 Visa Program, INS (now USCIS) modified the requirements for removal of
conditions after the time that some investors were granted CLPR. As a result of this action, certain of
those investors were unable to comply with the new requirements, creating the possibility that they would
be removed from the United States. Certain of these investors contested the change in rules after their
investments were made. Their position was supported in litigation that resulted in INS being ordered to
reconsider their applications to remove conditions by applying the original rules.
There is an increased interest by USCIS in examining all aspects of an EB-5 Project and investor petition
compliance during the removal of conditions process. Investors should seek guidance from competent
counsel concerning all aspects of the removal conditions process and the effect of possible USCIS actions
on the investor and the investors spouse and qualifying children.
Family relationships
1. The spouse of the investor may accompany or follow to join an investor who has been granted
conditional lawful permanent residence provided that the investor and the spouse were married at
the time of the investors acquisition of CLPR. If the relationship is one in common law, the
spouse of the investor may not acquire lawful permanent resident status on account of the
relationship. Not all valid marriages will be recognized for purposes of U.S. immigration.
Investors should consult competent counsel regarding the eligibility of their spouse for
immigration benefits.
2. Certain children or step-children of the investor may accompany or follow to join an investor who
has been granted conditional lawful permanent residence provided that the investor can establish
parentage or step-parentage at the time of the investors first admission to the United States as a
conditional lawful permanent resident or adjustment of status to lawful permanent residence.

39

Failure to comply with all applicable requirements may result in the separation of a child from the
investor or the investors spouse for protracted periods, in some instances for years, while other
immigration opportunities are attempted in an effort to reunite the family. U.S. law excludes
some step-children and adopted children from eligibility for immigration benefits. Investors
should consult competent immigration counsel regarding the eligibility of their children for
immigration benefits.
3. A child is someone under the age of 21 years who is unmarried. If a child becomes age 21 or
marries before being admitted to the United States as a lawful permanent resident or adjusting to
lawful permanent resident status, the former child, now deemed a son or daughter, may not be
eligible to accompany or follow to join the investor. In some circumstances, the Child Status
Protection Act (CSPA) may assist a son or daughter to qualify as a child by reducing the
deemed age of the son or daughter to less than 21 years, but the law is unclear and USCIS has not
issued any regulations interpreting the CSPA. Failure to meet the requirements of the CSPA
may result in the separation of a son or daughter from the investor or the investor's spouse for
protracted periods, in some instances for years, while other immigration opportunities are
attempted in an effort to reunite the family.
4. Under some circumstances a child who becomes 21 years of age or marries while holding
conditional lawful permanent resident status, or the spouse of the investor who is divorced from
the investor while holding conditional lawful permanent resident status, may be eligible to
remove conditions by being included in the investors I-829 Petition or filing a separate I-829
Petition. Failure to meet qualifying conditions, which may not be within the childs or divorced
spouses control, and about which the law and regulations do not provide clear guidance, will
result in the child or divorced spouse being placed in removal proceedings and may require the
child or divorced spouse to depart the United States.
5. Upon the death of an investor holding conditional lawful permanent resident status, a spouse and
qualifying children of the investor also holding such status are entitled to seek removal of
conditions by submission of the same evidence demonstrating compliance with required criteria
that USCIS requires of an investor seeking to remove conditions. Failure of each member of the
family to establish these criteria will result in the denial of the application to remove conditions,
placement of the family members in removal proceedings and their mandated departure from the
United States.

TERMS OF THE OFFERING

Subscriptions to the Partnership
You are being offered the opportunity to purchase a limited partnership interest in the Partnership. Each
such interest is referred to herein as a Unit and is being offered for a subscription price of $500,000,
which does not include the $50,000 administrative fee described below. The time period for the offer and
sale of the Units began on the date of this private placement memorandum and will continue until the
Partnership has received gross proceeds from the sale of Units of both partnerships totaling $52,000,000
(exclusive of the administrative fee), unless terminated sooner by the general partner in its sole discretion.
The minimum individual subscription and capital contribution to the Partnership is $500,000 which is the
minimum investment amount prescribed for qualifying investments in a regional center under the EB-5
Visa Program. To the extent that the minimum qualifying investment amount is increased, the minimum
subscription and capital contribution will be increased to match the minimum qualifying investment
amount.
In addition to his or her capital contribution each investor must also pay an administrative fee of $50,000
to the general partner. The administrative fee will be used to pay (including reimbursement of previously
paid amounts) the fees and expenses of the general partner and Mount Snow Ltd. incurred in structuring

40

and organizing the Project in compliance with the requirements of the EB-5 Visa Program, including
marketing, consulting, escrow, legal and other fees and expenses and any fees of foreign broker/dealers,
and coordinating with counsel and foreign broker/dealers with respect to the collection of information
from potential alien entrepreneurs and other administrative matters arising in connection with their
admission as limited partners of the Partnership.
In order to participate in the offering and purchase a Unit in the Partnership, you should make a check for
$550,000 for your subscription and capital contribution ($500,000) and for your administrative fee
($50,000) payable to Peoples United Bank. You should mail your check together with your completed
and signed subscription agreement and consent to limited partnership agreement and investor
questionnaire, to the general partner at the following address:
Mount Snow GP Services LLC
PO Box 2805
89 Grand Summit Way
West Dover, VT 05356.
Alternatively, in lieu of check you may pay your subscription and capital contribution and administrative
fee by wire transfer to the following account:
Peoples United Bank
Two Burlington Square
ABA# 221172186
A/C# 0019100316
Attn: Trust Operations
FBO: Mount Snow Carinthia Group Escrow
As described below on Page 53, the general partner may at its discretion cause a limited partner to
exchange its interest in Carinthia Group 1, L.P. for an economically equivalent interest in the parallel
fund, Carinthia Group 2, L.P.
Escrow Agreement /Acceptance of Subscriptions
Your execution of the subscription agreement and consent to limited partnership agreement constitute
your offer to buy a Unit in the Partnership and to hold the offer open until your subscription is either
accepted or rejected by the general partner or you withdraw your offer. To withdraw your subscription
agreement, you must give written notice to the general partner before your subscription agreement is
accepted by the general partner.
All capital contributions and administrative fees will be held in escrow by Peoples United Bank (the
Escrow Agent) pursuant to the terms of an escrow agreement between the investor, the general partner
and the Escrow Agent (the Escrow Agreement). Funds will not be released from escrow until approval
of the first I-526 petition filed by an investor in the Partnership (the Escrow Release Condition). Once
the Escrow Release Condition is satisfied, the funds will remain in escrow until released by the general
partner to be used to fund the Project. Until such time as the general partner releases the funds from
escrow, the general partner may, in its sole discretion, reject an investment in the partnership.
Subject to the foregoing, your investment will be accepted or rejected by the general partner in its sole
discretion. The general partner's acceptance of your subscription is discretionary, and the general partner
may reject your subscription for any reason without incurring any liability to you for this decision. If
your subscription is rejected, then all of your funds, including the administrative fee, will be promptly
returned to you without deduction for any fees.

41

There is no minimum level of aggregate subscriptions that must be received by the general partner before
it accepts an individual investors subscription. Subject to the terms of the Escrow Agreement and the
satisfaction of the Escrow Release Condition, unless rejected by the general partner in its sole discretion,
each subscription may be accepted by the general partner as and when received. Accordingly, subject to
satisfaction of the Escrow Release Condition, upon confirmation that the capital contribution and
administrative fee has been deposited in to the escrow account and receipt from the general partner of the
executed subscription agreement and consent to limited partnership agreement, escrow agreement and
investor questionnaire, the general partner may authorize the escrow agent to release the subscription
amount to the Partnership and the administrative fee to the general partner.
Your subscription may be accepted before subscriptions have been accepted that would permit the
Partnership to fund the loans to West Lake LLC and Carinthia Ski Lodge LLC in full and enable them to
complete development of the Project.
To the extent that the offering is not fully subscribed and less than $52,000,000 is raised, the Partnership
will allocate up to the first $30,000,000 of subscriptions received and accepted to West Lake LLC for the
development of the West Lake Project. Further, the West Lake Project will be developed in three tranches
consisting of $10,000,000 (tranche one), $12,500,000 (tranche two) and $7,500,000 (tranche three). To
the extent that the general partner accepts subscriptions for any tranche and the proceeds resulting from
such subscriptions do not equal the amount for such tranche set forth above, Mount Snow will be required
to make alternative arrangements to finance the balance of the tranche. There can be no assurance that
Mount Snow will be able to obtain such additional financing on acceptable terms, or at all.
If and when subscriptions received exceed $30,000,000, the next $22,000,000 will be allocated to
Carinthia Ski Lodge LLC for the development of the Carinthia Ski Lodge. To the extent that the general
partner accepts subscriptions for the development of the Carinthia Ski Lodge and the proceeds resulting
from such subscriptions do not equal $22,000,000, Mount Snow will be required to make alternative
arrangements to finance the balance required to complete the Project. There can be no assurance that
Mount Snow will be able to obtain such additional financing on acceptable terms, or at all.

MANAGEMENT
General Partner
The Partnership will have no officers, directors or employees. Instead, Mount Snow GP Services LLC
will serve as the general partner of the Partnership. The general partner is headquartered at 89 Grand
Summit Way, West Dover, VT 05356, which is also the Partnership's primary office. Mount Snow Ltd. is
the sole member of the general partner.
Officers of General Partner
Since the general partner is a limited liability company, and not a corporation, it has no directors but is
managed by a board of managers. The sole manager of the general partner is currently Richard Deutsch.
Mr. Deutsch is Vice President Business and Real Estate Development and a Director of Peak Resorts.
He has served in these positions for over ten years. As the Vice President Business and Real Estate
Development, Mr. Deutsch is responsible for developing Peak Resorts growth strategy, along with
Messrs. T. Boyd and Mueller, and identifying and evaluating acquisition targets and other potential
growth opportunities.

42

FEDERAL INCOME TAX CONSEQUENCES

The following discussion is for informational purposes only and is not intended as tax or legal
advice. Each potential investor should seek advice based on the investors particular circumstances
from an independent tax advisor.
Introduction
This discussion is based on the Partnerships intended plan of operation, as described in this private
placement memorandum and the Partnership Agreement, applying the federal income tax laws as
currently in effect as contained in the Internal Revenue Code of 1986, as amended (the Code), Treasury
Regulations promulgated thereunder, and relevant judicial decisions and administrative guidance. The
federal tax laws are subject to change, possibly with retroactive effect, and any such change may
materially affect the tax consequences of an investment in the Partnership. Neither the General Partner
nor its counsel has any continuing duty to advise the Partnership or any limited partner of any changes in
the tax law that may affect any party or cause any part of this discussion to become inaccurate. No
rulings or opinions of counsel have been, or will be, requested with respect to any tax-related matter
discussed herein. There can be no assurance that the positions the Partnership takes on its tax returns will
be accepted by the Internal Revenue Service (the IRS). This discussion relates only to U.S. federal
income taxes and not to any local, state or foreign taxes or U.S. federal taxes other than income taxes.
Because this discussion is a general summary, it does not address all aspects of federal income taxation
that may be relevant to a particular investor in light of the investors particular circumstances, nor does it
address, unless explicitly noted (and only to the extent so noted), certain types of investors subject to
special treatment under the federal income tax laws, including but not limited to the following:

tax-exempt organizations (except as discussed under Tax-Exempt Partners below);

insurance companies;
financial institutions,
broker-dealers;
dealers in securities or currencies;
traders in securities that elect to use the mark-to-market method of accounting for their securities;
investors who are themselves partnerships or other pass-through entities for federal income tax
purposes;
regulated investment companies;
real estate investment companies;
real estate mortgage investment conduits;
expatriates;
persons liable for alternative minimum tax;
persons whose functional currency is not the U.S. dollar;
persons holding their investment as part of a hedging, constructive sale or conversion, straddle, or
other risk-reducing transaction; and
persons acquiring their interests in the Partnership in connection with the performance of
services.

Except as otherwise explicitly noted under Non-U.S. Partners below, this summary addresses only (i)
individual citizens or residents of the United States (including dual residents treated as a U.S. tax resident
under an applicable tax treaty), (ii) corporations (including entities treated as corporations for U.S. federal
income tax purposes) created or organized under the laws of the United States, any state thereof or the
District of Columbia, (iii) estates with income subject to United States federal income tax regardless of its

43

source, (iv) trusts subject to primary supervision by a United States court and for which United States
persons control all substantial decisions, or that were in existence on August 20, 1996 and have elected to
be treated as a U.S. person; or (v) persons whose worldwide income or gain is otherwise subject to U.S.
federal income tax on a net income basis. The discussion below assumes that a partner holds its interest
in the Partnership as a capital asset within the meaning of section 1221 of the Code.
Portions of this discussion address the ability of investors to utilize items of loss or deduction allocated to
them by the Partnership. Potential investors are cautioned that the Partnership will not be operated for the
purpose of generating tax deductions, losses, credits or other benefits. Investors should not anticipate that
an investment in the Partnership will yield items of deduction, loss, or credit to offset items of income or
gain from other sources.
Tax Status of the Partnership
The Partnership intends to be treated as a partnership for federal income tax purposes. In general, as
discussed below, partnerships are not separate taxable entities. However, certain publicly traded
partnerships are taxed as corporations for federal income tax purposes. A partnership is publicly
traded for this purpose if its interests are traded on an established securities market or are readily
tradable on a secondary market (or the substantial equivalent thereof), as defined in the Code. The
Partnership Agreement may contain restrictions on the transferability of any interest in the Partnership
and other terms designed to prevent the Partnership from being treated as publicly traded for this purpose.
If the Partnership were classified as an association or a publicly traded partnership taxable as a
corporation, the Partnership would pay federal income tax at corporate rates on its net income, and
distributions to the partners would in general be dividends to the extent of the Partnerships earnings and
profits (as defined for tax purposes), with distributions in excess thereof being treated first as a return of
capital and thereafter as capital gain. Any such tax at the entity level would reduce the amount of cash
available for distribution to the partners. This discussion of material U.S. federal income tax
consequences assumes that the Partnership will be treated as a partnership (other than a publicly traded
partnership taxable as a corporation) for federal income tax purposes.
Taxation of Partners on Profits, Losses and Distributions of the Partnership
As a partnership, the Partnership will not be subject to entity-level federal income tax. Instead, each
partner will be required annually to take into account and report separately, on its own federal income tax
return, its respective distributive share of the Partnerships items of taxable income, gain, loss, deduction
and credit for the taxable year of the Partnership ending with or within the partners taxable year,
regardless of whether the partner has received or will receive any distribution of cash or property from the
Partnership. It is possible that partners will incur tax liabilities attributable to the Partnership that exceed
the amount of cash distributions made to them. Generally, ordinary income or loss earned or incurred by
the Partnership will be ordinary income or loss to the partners, and capital gain or loss earned or incurred
by the Partnership will be capital gain or loss to the partners. Whether such capital gain or loss is longterm or short-term will generally depend on the Partnerships holding period for the underlying capital
asset and not a partners holding period for its interest in the Partnership.
Distributive shares of income, gain, loss, deduction and credit are allocated in accordance with the
Partnership Agreement. The Partnership expects that such allocations will be respected by the IRS as
either having substantial economic effect (or be deemed to have substantial economic effect) or being
determined in accordance with a partners interest in the partnership. However, the Treasury
Regulations regarding when allocations are respected for tax purposes are very complex, and there can be
no assurance that the allocations described in the Partnership Agreement will be respected by the IRS.

44

Generally, cash distributions received by a partner from the Partnership (as opposed to allocations of
taxable income or loss) will only be taxable to the extent such distributions exceed the partners basis in
its Partnership interest. Distributions of property (other than cash) received by a partner from the
Partnership are generally not taxable. However, if the Partnership does not qualify as an investment
partnership within the meaning of Section 731(c)(3)(C) of the Code, a partner receiving a distribution of
marketable securities from the Partnership may recognize taxable gain to the extent the fair market value
of the distributed securities, plus any distributed money, exceeds the partners basis in its Partnership
interest. A partner selling appreciated securities distributed to it tax-free by the Partnership will generally
recognize taxable gain based on the total appreciation in the value of the securities (subject to certain
adjustments and exceptions in the case of a distribution in liquidation of a partners Partnership interest),
including such appreciation that accrued while the securities were held by the Partnership.
Although the Partnership itself will not be subject to federal income tax, it will compute its taxable
income like an individual, except that certain deductions are not allowed, and certain items must be
separately stated on the Partnerships annual federal partnership information tax return. The Partnerships
taxable year will be determined in accordance with the requirements of the Code and is expected to be the
calendar year. The Partnership also will provide partners with statements to assist partners in determining
and reporting on their federal income tax returns items of taxable income, gain, loss, deduction and credit
arising from their investment in the Partnership. While the Partnership will endeavor to provide timely
tax reporting to all partners, it cannot guarantee that this can be accomplished in any year or at all. It may
be that, in any given fiscal year, such reporting may not be available until after April 15 of the following
year. Partners, therefore, should be prepared to obtain extensions of the filing date for their income tax
returns at the federal, state and local level.
Limitation on Use of Partnership Losses and Certain Deductions
The Code and Treasury Regulations limit the ability of partners to utilize losses and deductions that may
arise from the Partnerships activities. For instance, allocations of loss or deduction from the Partnership,
or the ability to utilize such allocations, may be limited by a partners adjusted tax basis in its interest in
the Partnership at the end of the Partnerships taxable year in which the loss or deduction incurred.
Additionally, individuals and certain closely held corporations are subject to the at risk rules that limit a
partners ability to utilize losses to the amount the partner has at risk in the Partnerships activities. A
partners at-risk amount generally is equal to the partners adjusted tax basis in its interest in the
Partnership, except that it will generally not include any amount attributable to liabilities of the
Partnership or any amount borrowed by the partner on a non-recourse basis. To the extent that a partners
allocable share of Partnership losses is not allowed because the partner has an insufficient amount at-risk
in the Partnership, such disallowed losses may be carried forward by the partner to subsequent taxable
years and will be allowed to the extent of the partners at-risk amount, if any, in subsequent years.
The use of capital losses is subject to significant limitations, as is the use of deductions for investment
interest should the Partnership use leverage in its investments. The Partnerships organizational
expenses are not currently deductible, but may be amortizable only over a 15-year period, if at all.
Certain syndication expenses incurred by the Partnership in offering and selling Partnership interests will
be non-deductible altogether. Partners that are individuals, estates or trusts may deduct so-called
miscellaneous itemized deductions (e.g., fees paid to the Management Company) only to the extent
such deductions exceed 2 percent of the partners adjusted gross income. Further, the amount in excess of
that 2-percent floor is subject to an overall limitation on itemized deductions.
The Code restricts the deductibility of losses from a passive activity against certain income which is not
derived from a passive activity. Except to the extent the Partnership invests in entities operating a trade

45

or business and organized as a partnership for tax purposes, the Partnerships investment activities should
not constitute a passive activity for purposes of the passive activity loss rules. Therefore, a partner will
not be able to utilize losses and deductions from passive activities to offset the partners share of the
Partnerships income and gain (until the partner disposes of its interest in the passive activity).
Disposition of Interest
Upon a sale or transfer of an interest in the Partnership, a partner will recognize gain or loss equal to the
difference between such partners amount realized (as determined for tax purposes) and such partners
adjusted tax basis in the interest (or portion thereof) sold or transferred. A partners amount realized
generally will include both the fair market value of the consideration received and the partners allocable
share of any liabilities of the Partnership. A partners tax basis in his, her, or its interest in the Partnership
initially will be the amount paid for the Partnership interest plus the partners share (as determined for
federal income tax purposes) of any liabilities of the Partnership, and will thereafter be adjusted as
required under the Code to give effect on an ongoing basis to the partners share of the Partnerships tax
items, distributions, and liabilities. The rules governing basis adjustments and the taxation of distributions
are complex, and prospective investors should consult with their own tax advisors concerning these rules.
A partners gain or loss upon a disposition of its interest in the Partnership will typically be capital gain or
loss, long-term if the partner holds the interest for more than one year, except that gains or losses
attributable to inventory or unrealized receivables (defined broadly to include, among others, recapture
items, market-discount bonds, short-term obligations, and stock in certain foreign corporations) will be
ordinary income or loss. As described above, the use of capital losses is subject to significant limitations.
Tax Audits
An IRS audit of the Partnership would be conducted at the Partnership level in a single proceeding, rather
than by individual audits or judicial proceedings involving the partners separately. The General Partner
would represent the Partnership at any such audit as the Partnerships tax matters partner and has
considerable authority to make decisions affecting the tax treatment and procedural rights of the partners.
The General Partner may also enter into settlement agreements with the IRS that bind partners and
consent on behalf of the Partnership to extend the statute of limitations for assessing a deficiency with
respect to a Partnership item. An audit of the Partnership may result in changes to the treatment of the
Partnerships tax items and may result in partners being required to pay additional tax, interest and
possibly penalties. An audit of a return filed by the Partnership could lead to an audit of a partners
separate tax return and to adjustments to items that are not related to an investment in the Partnership.
The Partnership will not be responsible for paying any expenses incurred by a Partner in connection with
an audit of its returns, a partners participation in an audit of a return filed by the Partnership, or in any
subsequent judicial proceeding.
Tax Elections
The General Partner has the authority under the Partnership Agreement to make all tax elections for the
Partnership, including an election under Section 754 of the Code to adjust the tax basis of the
Partnerships assets upon distributions of Partnership property to a partner and transfers of Partnership
interests (including by reason of death). Once a Code Section 754 election has been made, it will remain
in effect unless revoked with the consent of the IRS. As a result of the complexity and added expense of
the tax accounting required to implement a Code Section 754 election, the General Partner may determine
not to cause the Partnership to make a Code Section 754 election.

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Tax Shelter Reporting Requirements

The Treasury Regulations impose special reporting rules for so-called reportable transactions. If it
were determined that an investment in the Partnership constitutes a reportable transaction, each partner
would be required to complete and file IRS Form 8886 with such partners tax return for the taxable year
that includes the date that such partner acquired an interest in the Partnership. In addition, the General
Partner may be required to disclose certain information about the partners and the Partnership to the IRS,
including the partners capital commitments, tax identification numbers (if any), and dates of admission to
the Partnership.
The Partnership may engage in certain transactions that constitute reportable transactions and with respect
to which both the Partnership and certain partners may be required to file Form 8886. In certain
situations, the General Partner or its affiliates may be required to maintain lists of the investors in the
Partnership and may be required to furnish such lists to the IRS at its request. Partners should consult
their tax advisors for advice concerning compliance with the reportable transaction rules.
Non-U.S. Partners
The discussion below addresses the application of certain federal income tax laws to partners who are not
United States citizens, residents, business entities, estates, or trusts (Non-U.S. Partners). The
application of the federal tax laws to non-U.S. persons is complex, and this summary does not address all
aspects of those laws.
Except to the extent of income effectively connected with a U.S. trade or business (in all cases to
include the disposition of U.S. real property or U.S. real property holding corporations), a Non-U.S.
Partners distributive share of the Partnerships capital gains will not be subject to U.S. tax, and its
distributive share of the Partnerships dividends, interest, and certain other income will be subject only to
a 30-percent withholding tax. Under certain circumstances, the withholding tax may be reduced or
eliminated if a Non-U.S. Partner properly certifies to its entitlement to tax treaty benefits or the portfolio
interest exception (generally available to non-U.S. persons who do not own 10 percent or more of the
issuing entity and receive non-contingent interest on registered debt obligations).
A Non-U.S. Partners distributive share of the net gain recognized upon a disposition by the Partnership
of a United States real property interest would be treated for federal income tax purposes as if it were
effectively connected with a U.S. trade or business. In general, the Partnership must withhold tax on the
Non-U.S. Partners distributive share of such net gain and each Non-U.S. Partner would be required to
report its share of such gain on a U.S. tax return. The term United States real property interest
generally would include: (i) an interest in real property in the United States or Virgin Islands; (ii) shares
of stock in a U.S. corporation that does not have a publicly traded class of stock outstanding if 50 percent
or more of the value of the corporations assets at any point during the preceding 5 years consisted of
interests in United States real property; and (iii) shares of stock in a U.S. corporation that does have a
publicly traded class of stock outstanding where (A) the corporation satisfies the real property ownership
test described in clause (ii), above, and (B) the Partnership held (directly or pursuant to certain attribution
rules) more than 5 percent of the outstanding stock of any publicly traded class of shares or held shares of
non-publicly traded stock with a fair market value greater than that of 5 percent of the publicly traded
class of the corporations stock with the lowest fair market value.
If the Partnership is deemed engaged in a U.S. trade or business, or if a portfolio company treated as a
partnership engages in a U.S. trade or business, then a Non-U.S. Partner of the Partnership will be deemed
engaged in a U.S. trade or business. A Non-U.S. Partner deemed engaged in a U.S. trade or business is
subject to federal income tax on any income effectively connected with that trade or business on similar

47

terms and rates as a U.S. person. In those circumstances, the Partnership must withhold tax on the NonU.S. Partners distributive share of effectively connected income, and the Non-U.S. Partner must file a
U.S. tax return. Furthermore, the Non-U.S. Partner may be subject to U.S. federal income tax on its gain
from the disposition of its interest in the Partnership, and, if a corporation, the Non-U.S. Partner may be
subject to an additional 30-percent branch profits tax on its earnings and profits effectively connected
with the U.S. trade or business.
The Partnership generally intends not to engage in a U.S. trade or business in its own activities.
However, there can be no assurance that no part of a Non-U.S. Partners distributive share of income from
the Partnership will be treated as effectively connected with a U.S. trade or business. Each potential
investor should consult an independent tax advisor regarding the consequences of a cross-border
investment in the Partnership in light of the investors particular circumstances.
Foreign Account Tax Compliance Act
The recently enacted Foreign Account Tax Compliance Act (FATCA) will impose a 30% withholding
tax on any withholdable payment from a U.S. payer (including the Partnership) to (i) a foreign
financial institution, unless such institution enters into an agreement with the U.S. government to collect
and provide to the U.S. tax authorities substantial information regarding U.S. account holders of such
institution (which would include certain equity and debt holders of such institution, as well as certain
account holders that are foreign entities with United States owners) or (ii) a foreign entity that is not a
financial institution, unless such entity provides the U.S. payer with a certification identifying the
substantial U.S. owners of the entity, which generally includes any U.S. person who directly or indirectly
owns more than 10% of the entity. Under certain circumstances, the payee might be eligible for refunds or
credits of such taxes.
Withholdable payments to the Partnership subject to FATCA will include U.S.-source payments
otherwise subject to nonresident withholding tax, and also include the entire gross proceeds from the sale
of any equity or debt instruments of U.S. issuers (in either case to exclude payments made on
obligations that were outstanding on March 18, 2012). The withholding tax will apply regardless of
whether the payment would otherwise be exempt from U.S. nonresident withholding tax (e.g., under the
portfolio interest exemption or as capital gain). The IRS is authorized to provide rules for implementing
the FATCA withholding regime with the existing nonresident withholding tax rules. Under proposed
regulations, this withholding will apply to U.S.-source payments otherwise subject to nonresident
withholding tax made on or after January 1, 2014 and to the payment of gross proceeds from the sale of
any equity or debt instruments of U.S. issuers made on or after January 1, 2015. Investors are urged to
consult with their tax advisors regarding the effect, if any, of FATCA to them based on their particular
circumstances.
THE SUMMARY OF INCOME TAX CONSEQUENCES SET FORTH IN THIS MEMORANDUM IS NOT
INTENDED TO BE A COMPLETE SUMMARY OF THE TAX CONSEQUENCES OF THIS
INVESTMENT AND IS NOT INTENDED AS A SUBSTITUTE FOR CAREFUL TAX PLANNING. NO
REPRESENTATION OR WARRANTY IS MADE BY THE GENERAL PARTNER WITH RESPECT TO
THE TAX CONSEQUENCES OF THIS INVESTMENT. IN VIEW OF THE FOREGOING, EACH
INVESTOR IS STRONGLY ADVISED TO CONSULT WITH ITS OWN PERSONAL TAX ADVISOR AS
TO THE TAX ASPECTS AND RISKS OF THE ENTIRE TRANSACTION AND INVESTMENT
DESCRIBED IN THIS PRIVATE PLACEMENT MEMORANDUM. CIRCULAR 230 DISCLOSURE:
PURSUANT TO REGULATIONS GOVERNING PRACTICE BEFORE THE INTERNAL REVENUE
SERVICE, ANY TAX ADVICE CONTAINED HEREIN IS NOT INTENDED OR WRITTEN TO BE USED
AND CANNOT BE USED BY A TAXPAYER FOR THE PURPOSE OF AVOIDING TAX PENALTIES
THAT MAY BE IMPOSED ON THE TAXPAYER.

48

SUMMARY OF PARTNERSHIP AGREEMENTS

The following summary of the Partnership Agreements does not encompass all of the terms of the
Partnership Agreements and is only a summary of material terms. This summary is qualified by reference
to the actual terms of the Partnership Agreements, the forms of which are included in Section 3 of the
private placement memorandum. Prospective investors are advised not to subscribe until they have made
a careful study of the actual text of the Partnership Agreements.
NOTHING IN THE PARTNERSHIP AGREEMENTS CONSTITUTES OR IS INTENDED TO
CONSTITUTE A GUARANTY OF REPAYMENT OF A LIMITED PARTNERS CAPITAL
CONTRIBUTION OR AN AGREEMENT TO REDEEM OR REPURCHASE A LIMITED
PARTNERS INTEREST OR ANY RIGHT OF A LIMITED PARTNER IMPLIED BY SUCH
INTEREST.
Purpose
The purpose of the Partnership is (a) to assist no more than 104 alien entrepreneurs to make qualifying at
risk investments in a commercial enterprise that is intended to also meet the requirements of the EB-5
Visa Program; (b) to assist independent legal counsel acting for EB-5 Investors with the filing of each of
the EB-5 Investors' required petitions under the EB-5 Visa Program with USCIS; and (c) to enter into the
lending arrangements for undertaking the Project.
Term
The term of the Partnership is 20 years after the date that the last limited partner is accepted into the
Partnership, unless sooner terminated in accordance with the Partnership Agreement. See Dissolution
below.
Partnership Interests
The general partner is obligated to contribute to the capital of the Partnership $10.00 and such other
additional capital contributions in accordance with the Partnership Agreement. Each limited partner is
obligated to contribute to the capital of the Partnership the amount of $500,000 in cash. In addition, each
limited partner shall pay an administrative fee of $50,000 to the general partner. In the event the general
partner receives official notice of denial of a limited partners I-526 Petition, other than based on the fraud
or material misrepresentation of the investor, the Partnership shall return such limited partners capital
contribution within 90 days of written request by the limited partner and the interest of such limited
partner shall automatically be terminated upon such repayment; provided that the general partner receives
such notice within 30 days following such denial. No limited partner is required to make any additional
contributions of capital beyond the amount of his or her $500,000 capital commitment.
General Partner
The general partner shall conduct and direct the business of the Partnership. The general partners
authority to take certain actions without the consent of specified thresholds of the limited partners is
limited by the provisions of the Partnership Agreement. The general partner may, in the name and on
behalf of the Partnership, enter into related party transactions or other agreements with third parties for
the performance of services for and on behalf of the Partnership and the limited partners and obligate the
Partnership to pay or reimburse the payment of compensation and fees for and on account of any such
services; provided, however, that such compensation and fees are fair and reasonable as to the Partnership
at the time the same are authorized. The general partner may be terminated by a supermajority in interest
of the limited partners subject to their appointment of a new general partner that is an affiliate of the
removed general partner (except that in the event the general partner is terminated as a result of certain
types of misconduct by the general partner, the new general partner need not be an affiliate of the
removed general partner).

49

Limited Partners
The limited partners shall participate in the management of the business of the Partnership (a) by making
suggestions or recommendations to the general partner on issues of policy important to the Partnership,
and (b) by exercising voting rights in accordance with the Partnership Agreement. The prior affirmative
consent of a supermajority-in-interest is required for specified actions set forth in the Partnership
Agreement. No limited partner shall have the power or authority to bind the Partnership or to sign any
agreement or document in the name of the Partnership. To the fullest extent allowed by law, each limited
partner will be protected and immune from personal liability for any and all debts, obligations and
liabilities of the Partnership or chargeable to the Partnership, and for the acts of any other partner,
employee or agent of the Partnership.
Each limited partner that is an alien entrepreneur acknowledges and agrees (i) that, notwithstanding any
provision of the private placement memorandum, the subscription agreement or the Partnership
Agreement to the contrary, the responsibility for the preparation, content and filing of each of the I-526
Petition and the I-829 Petition, and any other governmental forms required under or pursuant to an alien
entrepreneurs participation in the EB-5 Visa Program, remains solely with such alien entrepreneur; (ii) to
file his/her I-526 Petition within 90 days after becoming a limited partner and, in addition, to file all other
applications and petitions respecting his/her lawful permanent resident status within the United States
within a reasonable time of becoming eligible to do so; (iii) that it may be beneficial to file his/her I-829
Petitions as soon as he/she is entitled to do so in the event that fewer than all of the jobs projected to be
created by the Project are actually created, recognizing that such jobs will be allocated with preference
first to those alien entrepreneur whose I-829 Petitions are approved, and then to those alien entrepreneur
who have obtained lawful permanent admission to the United States.
Allocations
A capital account shall be established and maintained on the Partnerships books for and in the name of
each partner. Each capital account shall reflect the dollar amounts of the respective partners (i) capital
contributions, (ii) allocable share of profits and losses realized in each fiscal year from the conduct of
business and other transactions and activities of the Partnership, and (iii) distributions made to them.
Capital accounts shall also be adjusted if and when required by tax regulatory requirements. Profits and
losses for each fiscal year shall be allocated among the partners in the following manner: (a) 0.01% to the
general partner; and (b) 99.99% to the limited partners, to be allocated and distributed among the limited
partners as reasonably determined by the general partner after taking into account the date on which (1)
each limited partner made his or her investment, and (2) the Partnership used such investment to advance
loans to the Project, and once such determination by the general partner is made, then among the limited
partners who are similarly situated with respect to the above criteria in proportion to their respective
capital contributions invested in such loans. Losses incurred in any fiscal year shall not be allocated to
the capital account of any limited partner to the extent that the allocation would cause such limited partner
to have an (or to cause an increase in such limited partners) adjusted capital account deficit at the end of
such fiscal year. Losses that cannot be allocated to a limited partner on account of this limitation shall be
allocated to the capital account of the general partner. Profits realized in any fiscal year after allocation of
such excess losses to the general partners capital account shall first be allocated to offset the cumulative
balance of excess losses in the general partners capital account.
Distributions
Except as otherwise provided in connection with a dissolution below, distributions shall be made by the
general partner only from available cash as follows: (a) tax distributions may be made in order to defray
the federal income tax liabilities arising from the partners interests; (b) no distributions shall be made to
any partner in an amount that would give rise to, or increase, a negative balance in such partner's capital
account; and (c) subject to the remaining provisions below, distributions by the Partnership shall be made

50

among the partners in the following order or priority: (i) first, among the partners in proportion to their
Undistributed Income until the Undistributed Income of each partner is zero, (ii) second, to each partner
in proportion to its Unreturned Capital Contributions, and (iii) thereafter, to each partner in proportion to
such partners Adjusted Capital Account balance. For purposes hereof, Undistributed Income shall
mean, with respect to a partner, the aggregate profits allocated to such partner, less the aggregate losses
allocated to such partner, less any previous distributions to such partner under clause (c)(i) above;
Unreturned Capital Contributions shall mean, with respect to a partner, the partners aggregate capital
contributions, less any previous distributions to such partner under clause (c)(ii) above; and Adjusted
Capital Account shall mean, with respect to a partner, such partners capital account, (A) increased by
any amounts which such partner is obligated to restore pursuant to any provision of the Partnership
Agreement or is treated as being obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c)
or is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5), and (B) decreased by the items described in Treasury
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6) (the
foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Treasury
Regulations Section 1.704-1(b)(2)(ii)(d) and is to be interpreted consistently therewith).
Indemnification
To the fullest extent allowed by VRULPA or otherwise by law, the Partnership shall indemnify the
general partner, and each of its managers, managing members and members, and their respective officers,
employees and agents (in its capacity as such), and hold each of them harmless against and from (i) any
and all costs, expenses and fees reasonably paid or incurred in the defense of any claims, demands and
causes of action threatened, asserted or filed against the general partner, and/or any of its managers,
managing members and members, and their respective officers, employees and agents, and related to the
affairs of the Partnership and/or the conduct of its business, (ii) amounts reasonably paid in settlement of
any such claims, demands and causes of action, and (iii) liabilities and damages incurred as a result
thereof. The right to indemnification shall not apply where it is proven by clear and convincing evidence
that the general partner has engaged in (i) any willful violation of law that has or may have a material
adverse effect upon the Partnership; or (ii) acts or omissions constituting fraud, deceit, defalcation,
embezzlement, misappropriation or the like in connection with the business, assets and properties,
accounts, reports or other affairs of the Partnership (unprotected conduct).
Exculpation from Liability
Neither the general partner, nor any of its managers, managing members and members, and their
respective officers, employees and agents, shall be liable to the Partnership or any limited partner for any
errors of judgment or for any other actions taken or omissions made, except only if it is determined
pursuant to a final non-appealable judgment of a court of the United States that such person has engaged
in unprotected conduct.
Withdrawals
A limited partner may withdraw from the Partnership upon the occurrence of either of the following
events: (i) such limited partner provides written notice to the general partner (with such supporting
documentation as the general partner may reasonably request) to the effect that such limited partners I526 Petition has been denied by the USCIS for reasons other than fraud committed by or the material
misrepresentation of such limited partner; provided, however, that this clause (i) shall be applicable only
if the general partner actually receives such notice not later than 30 days following such denial; or (ii)
such limited partner provides written notice to the general partner (with such supporting documentation as
the general partner may reasonably request) within 30 days following the fulfillment of all of the
following: (1) the regional center pilot program, created in support of the EB-5 Visa Program as described
in the private placement memorandum (the pilot program) lapsed after the filing of his or her I-526
Petition but prior to its adjudication of such application; and (2) the pilot program was not reauthorized,

51

or replaced by another program providing substantially the same immigration status benefits as the pilot
program, within 12 months of such lapse (and such reauthorization or replacement is not then-pending);
and (3) such I-526 Petition (or, if applicable, the alternative petition) has not been adjudicated. In either
of the events described in (i) and (ii) above, within 90 days of the general partners receipt of such notice
(and such supporting documentation), the general partner shall cause the Partnership to return to such
limited partner, in full satisfaction of its rights and interests in, to and under its interest, the balance (but
not less than zero) of its capital account, whereupon such limited partner shall, automatically and without
more, be deemed to have dissociated from the Partnership.
Except as provided above, a limited partner may withdraw from the Partnership only in the sole and
absolute discretion of the general partner. Without limiting the general partners discretion, as a condition
to authorizing such withdrawal, a limited partner is required to (i) accept in full satisfaction of its rights
and interests in, to and under its interest 90% of the lesser of (x) the balance (but not less than zero) of its
capital account, or (y) its capital contribution, (ii) deliver to the Partnership an acknowledgement that the
subject withdrawal may disqualify such limited partner for eligibility under the EB-5 Visa Program and a
release of the general partner and the Partnership from any direct or consequential damages and all other
consequences therefrom, and (iii) deliver to the Partnership and the general partner such other agreements
as the general partner may require.
Additional Limited Partners
The limited partners acknowledge that any withdrawal may necessitate the replacement of the capital that
was or is to be paid to the withdrawing alien entrepreneur. The general partner may, at any time and from
time to time (i) create such additional classes of partnership interests having such relative rights, powers
and duties as such general partner may establish, including rights, powers and duties equal or junior to
existing partnership interests; and (ii) whether or not in connection with clause (i) above, designate one or
more persons for admission as a limited partner and, in connection therewith, determine the amount and
the time or times at which shall be made, such persons capital contribution, the partnership interests to
which such person shall be entitled, and all other terms and conditions of such persons admission as a
limited partner.
Transferability of Interests
The Partnership will not recognize a transfer of a Unit unless the limited partner has submitted to the
Partnership and the general partner, in a form acceptable to the general partner, an acknowledgement that
the transfer may disqualify such limited partner for eligibility under the EB-Visa Program and a release of
the Partnership and the general partner from all damages therefrom.
The general partner may prohibit any transfer if, in the opinion of counsel for the Partnership, such
transfer will violate, or cause the original issuance of the interests to be in violation of, the securities laws,
rules or regulations of the United States, any state thereof or any other jurisdiction, or if such transfer
would jeopardize the ability of any other limited partner to qualify under the EB-5 Visa Program to
become a lawful permanent resident of the United States.
The general partner may suspend all transfers for a period of up to 12 months whenever the general
partner reasonably determines, or is advised by counsel, that in light of previous transfers, any subsequent
transfer may reasonably be expected to result in a termination of the Partnership under applicable tax
laws.
Any person who has acquired a Unit shall be admitted as a limited partner, and thereby succeed to the
related ancillary legal interest, only with the approval of the general partner in its sole and absolute
discretion, upon its execution and delivery of an instrument, in such form as the general partner may
require, whereby such person will become bound by the Partnership Agreement, and if such person or the

52

subject limited partners pay for all expenses incurred by the Partnership in connection with such person's
becoming a limited partner.
Dissolution
The Partnership shall dissolve upon the earliest of the following: (i) the expiration of the term of the
Partnership; (ii) the full repayment of the loans extended by the Partnership to West Lake LLC and
Carinthia Ski Lodge LLC as described in the private placement memorandum, and all other loans made
by the Partnership in furtherance of the Projects described therein; (iii) the written consent of the general
partner and a supermajority-in-interest of the limited partners; (iv) the written consent of all limited
partners; (v) an event of withdrawal of the general partner within the meaning of Section 3432 of the
VRULPA, unless there is at least one general partner then remaining in office or within 90 days after such
event, a supermajority-in-interest appointed a replacement general partner and determined to continue the
business of the Partnership, and the replacement general partner has become legally bound by the
Partnership Agreement; (vi) the sale of all or substantially all of the assets of the Partnership; (vii) the
entry of a final judgment, order or decree of a court with competent jurisdiction adjudicating the
Partnership to be bankrupt, and the expiration of the period, if any, allowed by applicable law in which to
appeal therefrom; or (viii) as provided in VRUPLA.
Allocations and Distributions upon Winding Up
Prior to any distribution upon dissolution, the general partner shall adjust each partners capital account to
reflect the manner in which the unrealized income, gain, loss and deduction inherent in the Partnerships
property (that has not been reflected in the partners capital accounts previously) would be allocated
among the partners if there were a taxable disposition of such property for the fair market value of such
property on the date of distribution. Distribution of the Partnership assets upon dissolution shall be made
in accordance with the net credit balances in the partners respective capital accounts after taking into
account all capital account adjustments for the Partnership taxable year. If the general partner has a deficit
balance in its capital account following the distribution of Partnership assets upon dissolution, as
determined after taking into account all capital account adjustments, the general partner shall be required
to restore the amount of such deficit to the Partnership as soon as practicable.
Parallel Fund
Carinthia Group 1, L.P. will be exempt from registration under Section 3(c)(1) of the Investment
Company Act of 1940. A separate parallel fund, Carinthia Group 2, L.P., is being established which will
rely upon another exemption; it will have an identical investment program, the same general partner and
substantially identical Limited Partnership Agreement with that of Carinthia Group 1, L.P. Without
altering the economic rights and obligations of the partners, the general partner, in its reasonable
discretion, may at any time cause a limited partner to exchange its interest in Carinthia Group 1, L.P. for
an economically equivalent interest in the parallel fund, Carinthia Group 2, L.P.

53

PLAN OF DISTRIBUTION
All Units are offered by the Partnership on a best efforts non-minimum basis. There is no assurance that
all or any of the desired capital will be raised through the offering. The offering has no minimum amount
and the Partnership will utilize proceeds as they are received. The general partner reserves the right to
waive the payment of a portion of the administrative fee by any EB-5 Investor, in which case the
subscription price to any such EB-5 Investor will be less than the subscription price paid by EB-5
Investors that pays the full administrative fee.
EXIT STRATEGIES
The general partner expects each Developer will consider a number of options to repay the loan to the
Partnership upon maturity. Such options include but are not limited to: (1) a strategic refinancing of the
facility; (2) reserving funds from operations; (3) the proceeds of a loan from Mount Snow or Peak
Resorts; and (4) the purchase of the Developers assets by Mount Snow or Peak Resorts or another of its
affiliates.
The general partner expects that the period from commencement of the offering until the date on which
the I-829 petitions of all investors have been adjudicated, with any and all appeals having been decided,
could be up to at least six years. At that time, subject to repayment of the loans by the Developers, the
general partner in its sole discretion will determine to provide liquidity to the limited partners by
redeeming their interest in the Partnership or otherwise liquidating the Partnership in accordance with the
provisions of the Partnership Agreement. Notwithstanding the foregoing, no interests of EB-5 investors
will be repurchased or otherwise acquired by the Partnership unless such repurchase or other acquisition
complies with the requirements of the EB-5 Visa Program. In addition, no assurance can be made, and by
signing the Partnership Agreement, each limited partner is deemed to acknowledge and agree that there is
no promise or guaranty that his or her interest will be redeemed.
TRANSFERABILITY OF UNITS
The Units being offered hereby have not been registered under the Securities Act or the securities laws of
any jurisdiction, including any foreign jurisdictions, and are being offered in reliance upon Regulation D
and Regulation S, promulgated under the Securities Act. The right of subscribers to sell, transfer, pledge
or otherwise dispose of the Units will be limited by the Securities Act and state securities laws. Such
Units may be sold only pursuant to an effective registration statement under the Securities Act or an
exemption from such registration. The Partnership has no plans to conduct any such registration and is
under no obligation to do so.

54

Section 2
The Business Plan

Section 2 - Business Plan | Carinthia Group.

CONTENTS

EB-5 PROGRAM ................................................................................................................................................................. 1
CARINTHIA GROUP FORWARD LOOKING STATEMENTS ........................................................................................ 2
CARINTHIA GROUP EXECUTIVE SUMMARY .................................................................................................................. 4
THE PARTNERSHIP AND ITS BUSINESS ........................................................................................................................ 4
THE STATE OF VERMONT A USCIS DESIGNATED REGIONAL CENTER ............................................................... 6
PROJECT INVESTMENT SUMMARY ........................................................................................................................... 8
JOB CREATION ............................................................................................................................................................... 9
ALLOCATION OF JOBS CREATED .............................................................................................................................. 10
VERMONT METROPOLITAN STATISTICAL AREA................................................................................................... 11
BUSINESS AND DEVELOPMENT SUMMARY ............................................................................................................... 14
MOUNT SNOW LTD. ...................................................................................................................................................... 14
PEAK RESORTS, INC.................................................................................................................................................... 14
DEVELOPER AND CONSTRUCTION ........................................................................................................................... 14
MOUNT SNOW BASE AREA DEVELOPMENT............................................................................................................. 15
MOUNTAIN MASTER PLAN .......................................................................................................................................... 15
DEVELOPMENT PERMITS ACT 250 ......................................................................................................................... 15
DEVELOPMENT PHASES ............................................................................................................................................. 16
MOUNT SNOW SKI RESORT MASTER PLAN ............................................................................................................. 17
SUMMARY OF JOB CREATING PROJECTS .................................................................................................................. 18
WEST LAKE PROJECT ................................................................................................................................................. 18
WEST LAKE PROJECT SITE MAP................................................................................................................................ 20
WEST LAKE PROJECT CONCEPT IMAGES................................................................................................................ 21
CARINTHIA SKI LODGE PROJECT .............................................................................................................................. 23
CARINTHIA SKI LODGE LOCATION AND CONCEPT IMAGES .................................................................................. 24
THE FINANCIAL TRANSACTION .................................................................................................................................... 26
CAPITAL INVESTMENT AND PROJECTED FINANCIAL STATEMENT ...................................................................... 26
CAPITAL INVESTMENT INTO THE COMMERCIAL ENTERPRISE ............................................................................. 26
INVESTMENT TERMS AND CONDITIONS ................................................................................................................... 30
LOAN STRUCTURE ....................................................................................................................................................... 31
EXIT STRATEGY ........................................................................................................................................................... 33
NO GUARANTEES OR REDEMPTION RIGHTS .......................................................................................................... 34
PROJECTED STATEMENT OF PARTNERSHIP INCOME ........................................................................................... 35
STRUCTURE OF BUSINESS OPERATIONS: CARINTHIA GROUP 1 AND 2, L.P. ....................................................... 36
JOB CREATION CALCULATION ..................................................................................................................................... 37
IMPLAN SOFTWARE MODEL ....................................................................................................................................... 37
SUMMARY OF JOB IMPACTS FOR CARINTHIA GROUP 1 AND 2 PROJECT .......................................................... 39
USE OF PARTNERSHIP FUNDS...................................................................................................................................... 42
WEST LAKE PROJECT - LOANED FUNDS: $30,000,000 .............................................................................................. 42

Section 2 - Business Plan | Carinthia Group.

PURPOSE AND NEED FOR THE PROJECT ................................................................................................................ 42
PROJECT COMPONENTS ............................................................................................................................................ 43
PERMITTING STATUS .................................................................................................................................................. 47
SOURCE AND APPLICATION OF FUNDS ................................................................................................................... 47
PROCEEDS OF LOAN FROM CARINTHIA GROUP 1 AND 2, L.P. ............................................................................. 48
PROJECTED DIRECT COST SUMMARY ..................................................................................................................... 49
WEST LAKE PROJECTED DEVELOPMENT SCHEDULE ........................................................................................... 50
PROJECTED INCOME STATEMENT: WEST LAKE WATER PROJECT, LLC ........................................................... 51
BASIS OF REVENUES; SNOWMAKING WATER USAGE ANALYSIS AND ASSUMPTIONS .................................... 53
WEST LAKE PROJECTED ENERGY CONSUMPTION ................................................................................................ 54
CARINTHIA SKI LODGE PROJECT - LOANED FUNDS: $22,000,000 .......................................................................... 55
PURPOSE AND NEED FOR THE PROJECT ................................................................................................................ 55
NEED FOR NEW SEATING - RESTAURANT SEAT ANALYSIS .................................................................................. 56
CARINTHIA SKI LODGE (BUILDING B) PROJECT MAP ............................................................................................. 57
CARINTHIA SKI LODGE BUILDING SUMMARY .......................................................................................................... 57
PERMITTING STATUS .................................................................................................................................................. 61
SOURCE AND APPLICATION OF FUNDS ................................................................................................................... 61
PROCEEDS OF LOAN FROM CARINTHIA GROUP 1 AND 2, L.P. ............................................................................. 62
PROJECTED DIRECT COST SUMMARY ..................................................................................................................... 63
PROJECTED INCOME STATEMENT: CARINTHIA SKI LODGE, LLC ........................................................................ 64
PROJECTED INCOME STATEMENT SCHEDULE A ASSUMPTIONS AND BASIS OF DATA ................................ 65
MOUNT SNOW .................................................................................................................................................................. 66
LOCATION...................................................................................................................................................................... 66
HISTORY ........................................................................................................................................................................ 66
MARKET REVIEW .......................................................................................................................................................... 68
MARKETING STRATEGIES........................................................................................................................................... 69
COMPETITION ............................................................................................................................................................... 70
REVENUE....................................................................................................................................................................... 70
RESORT OPERATIONS REVENUE .............................................................................................................................. 70
SEASONALITY ............................................................................................................................................................... 71
MOUNT SNOW RESORT MANAGEMENT TEAM ........................................................................................................ 72
PEAK RESORTS MANAGEMENT TEAM ...................................................................................................................... 72
THE SKI INDUSTRY.......................................................................................................................................................... 73
PEAK RESORTS ............................................................................................................................................................... 76
PEAK RESORTS INC. AND ITS SUBSIDIARY MOUNT SNOW ................................................................................... 76
BUSINESS AND FINANCIAL OVERVIEW ..................................................................................................................... 76
AUDITED ACCOUNTS ................................................................................................................................................... 77
OPERATIONAL GOALS AND STRATEGY.................................................................................................................... 77
MANAGEMENT TEAM ................................................................................................................................................... 77

APPENDIX
MASTER PLAN FINDINGS OF FACT
U.S. FOREST SERVICE MASTER PLAN ACCEPTANCE LETTER
U.S. FOREST SERVICE NOTICE OF DECISION FOR WEST LAKE

ii

Section 2 - Business Plan | Carinthia Group.

EB-5 PROGRAM

THE PROJECT DESCRIBED IN THIS BUSINESS PLAN HAS BEEN STRUCTURED TO HELP
FOREIGN NATIONALS MEET THE REQUIREMENTS OF THE IMMIGRANT INVESTOR
PROGRAM CREATED PURSUANT TO SECTION 203(B)(5) OF THE IMMIGRATION AND
NATIONALITY ACT (INA) AND ADMINISTERED BY THE UNITED STATES CITIZENSHIP AND
IMMIGRATION SERVICES (USCIS). THE IMMIGRANT INVESTOR PROGRAM ALLOCATES
10,000 IMMIGRANT VISAS PER YEAR TO QUALIFIED INDIVIDUALS SEEKING LAWFUL
PERMANENT RESIDENT STATUS ON THE BASIS OF THEIR INVESTMENT IN A
COMMERCIAL ENTERPRISE. IN THIS BUSINESS PLAN WE REFER TO THIS PROGRAM AS
THE EB-5 VISA PROGRAM AND TO SUCH QUALIFIED INDIVIDUALS AS ALIEN
ENTREPRENEURS OR EB-5 INVESTORS.

Note: Unless otherwise stated, the photographs included in this business plan are images of similar
facilities and items of equipment located at other ski resorts and are presented for illustrative
purposes only. They are not actual representations of the facilities and equipment that have been or
will be constructed or purchased with the proceeds of the offering.

INTENTIONALLY LEFT BLANK

Section 2 - Business Plan | Carinthia Group

CARINTHIA GROUP FORWARD LOOKING STATEMENTS

IMPORTANT NOTICE
THIS PARTNERSHIP BUSINESS PLAN WHICH FORMS A PART OF THE PRIVATE PLACEMENT
MEMORANDUM CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
FEDERAL SECURITIES LAWS. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL
FACTS INCLUDED IN THIS BUSINESS PLAN, INCLUDING STATEMENTS RELATING TO
ASSUMPTIONS, FUTURE FINANCIAL POSITION, ECONOMIC PERFORMANCE, RESULTS OF
OPERATIONS, BUSINESS STRATEGY, BUDGETS, PROJECTED COSTS, PLANS AND OBJECTIVES OF
THE GENERAL PARTNER
FOR THE BUSINESS OPERATIONS, ARE FORWARD-LOOKING
STATEMENTS.
THE FORWARD-LOOKING STATEMENTS MAY ADDRESS, AMONG OTHER THINGS, THE
SNOWMAKING WATER USAGE, SKI LODGE AND ANCILLARY PROJECTS DEVELOPMENT AND
STRATEGY, PROJECTED CONSTRUCTION TIMES, EXPANSION STRATEGY, DEVELOPMENT OF
SERVICES, USE OF PROCEEDS, PROJECTED REVENUE AND CAPITAL EXPENDITURES,
OPERATING COSTS, LIQUIDITY, JOB CREATION, ECONOMIC MODELING, DEVELOPMENT OF
ADDITIONAL REVENUE SOURCES, DEVELOPMENT AND MAINTENANCE OF PROFITABLE
MARKETING AND MANAGEMENT AND MAINTENANCE ALLIANCES, ABILITY TO FURTHER DEVELOP
''RESORT'' IDENTIFICATION AND ITS EXPANSION, AND THE GENERAL PARTNERS STATEMENTS OF
EXPERIENCE AND EXPECTATIONS.
IT IS TO BE NOTED THAT FORWARD-LOOKING STATEMENTS GENERALLY CAN BE IDENTIFIED BY
THE USE OF FORWARD-LOOKING TERMINOLOGY, SUCH AS MAY, WILL, EXPECT, INTEND,
ESTIMATE, ANTICIPATE, BELIEVE, CONTINUE OR SIMILAR TERMINOLOGY, ALTHOUGH NOT
ALL FORWARD-LOOKING STATEMENTS CONTAIN THESE WORDS.THESE FORWARD-LOOKING
STATEMENTS ARE NOT HISTORICAL FACTS, AND ARE BASED ON CURRENT EXPECTATIONS,
ESTIMATES AND PROJECTIONS ABOUT THE INDUSTRY AND THIS PROJECT, MANAGEMENTS
BELIEFS AND CERTAIN ASSUMPTIONS MADE BY MANAGEMENT, MANY OF WHICH, BY THEIR
NATURE, ARE INHERENTLY UNCERTAIN AND BEYOND ITS CONTROL. ACCORDINGLY, YOU ARE
CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF
FUTURE PERFORMANCE AND ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND
ASSUMPTIONS THAT ARE DIFFICULT TO PREDICT. ALTHOUGH THE GENERAL PARTNER BELIEVES
THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE
REASONABLE AS OF THE DATE MADE, NO ASSURANCE CAN BE MADE NOR IS ANY ASSURANCE
GIVEN IN ANY FORM IMPLIED OR OTHERWISE THAT THE FORWARD LOOKING STATEMENTS WILL
PROVE ACCURATE. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM OUR EXPECTATIONS INCLUDE (AMONG OTHERS THE FACTORS DESCRIBED IN
THE SECTION ENTITLED RISK FACTORS IN SECTION 1 OF THE PRIVATE PLACEMENT
MEMORANDUM):

PERMITTING AND REGULATORY DELAYS;

BUILD COSTS AND CONTRACTOR PERFORMANCE;
WEATHER;

Section 2 - Business Plan | Carinthia Group

SEASONALITY;
COMPETITION WITH OTHER LEISURE ACTIVITIES AND SKI AREAS;
ENVIRONMENTAL LAWS AND REGULATIONS;
DEPENDENCE ON KEY PERSONNEL;
FUNDS FOR CAPITAL EXPENDITURES;
THE EFFECT OF DECLINING REVENUES ON MARGINS;
THE DEVELOPMENT OF MOUNT SNOW SKI AREA;
RELIANCE ON INFORMATION TECHNOLOGY;
THE ECONOMY OF THE STATE OF VERMONT AND THE REST OF THE UNITED STATES; AND
NATURAL DISASTERS.

NEITHER THE GENERAL PARTNER NOR THE PARTNERSHIP HAS ANY OBLIGATION UNLESS
OTHERWISE REQUIRED BY LAW TO REVISE OR UPDATE ANY FORWARD LOOKING STATEMENT
FOR ANY REASON PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER ALL THESE RISKS,
IN ADDITION TO OTHER INFORMATION CONTAINED AND RISK FACTORS DETAILED WITHIN THE
PRIVATE PLACEMENT MEMORANDUM BEFORE DECIDING WHETHER TO INVEST IN THE
PARTNERSHIP.

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Section 2 - Business Plan | Carinthia Group

CARINTHIA GROUP EXECUTIVE SUMMARY

THE PARTNERSHIP AND ITS BUSINESS
Carinthia Group 1, L.P. is a Vermont limited partnership (the Partnership) with its
principal place of business in West Dover, Vermont, at the location of Mount Snow
Resort (the Resort, Mount Snow or Mount Snow Resort) owned by Mount Snow
Ltd. (the Resort Owner).
Carinthia Group 2, L.P. is a parallel partnership formed to comply with the Investment
Company Act of 1940. The general partner may, in its reasonable discretion, cause a
limited partner to exchange its interests in Carinthia Group 1, L.P. for an economically
equivalent interest in Carinthia Group 2, L.P. Hereinafter the two partnerships are
referred to as the Partnership, and references to Carinthia Group 1, L.P. throughout
this business plan and our offering memorandum are inclusive of Carinthia Group 2,
L.P. Both partnerships are new commercial enterprises that will serve as co-lenders in
our overall business plan and transaction.
The total anticipated investment is $52,000,000 from up to 104 alien entrepreneurs
through the EB-5 Visa Program, although the offering is not limited only to EB-5
investors. The proceeds of the offering will be used to advance loans to two entities
controlled by Mount Snow Ltd. West Lake Water Project, LLC and Carinthia Ski Lodge
LLC - who will undertake the job creating activities described herein.
The following summary of principal objectives and activities including financial data and
supporting schedules is included in the Private Placement Memorandum for the benefit
of potential alien entrepreneurs under the EB-5 Visa Program and should be read in its
entirety. Important Notice: See Risk Factors set forth in Section 1 of this Private
Placement Memorandum.
The alien entrepreneur or "petitioner" is contemplating making an investment that has a
minimum capital contribution of $500,000 in the Partnership. Upon subscription to and
being accepted as a limited partner the petitioner will submit his I-526
Immigrant Petition by Alien Entrepreneur to the United States Department of Justice,
Immigration and Naturalization Service (USCIS). Each petition submitted must be
adjudicated on its own merits. The limited partner's relationship to the Partnership and
his or her rights and obligations as a limited partner are governed by the Limited
Partnership Agreement included as an exhibit under Section 3 in the private placement
memorandum.
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Section 2 - Business Plan | Carinthia Group

Carinthia Group 1, L.P. was formed as a Vermont limited partnership in October 2012 to
serve as the "capital investment vehicle" which will loan development funds to West
Lake Water Project, LLC and Carinthia Ski Lodge, LLC, both of which are job creating"
commercial business projects for purposes of the EB-5 Visa Program. In this business
plan we refer to the loan of the development funds and the activities conducted by West
Lake Water Project, LLC and Carinthia Ski Lodge, LLC as the Carinthia Group 1 and 2
Project. Carinthia Group 2, L.P., has an identical structure and purpose.
West Lake Water Project, LLC and Carinthia Ski Lodge, LLC were formed in October
2012. The West Lake Water Project, LLC job creating project is a proposed 120-million
gallon water storage reservoir with associated piping and pumping equipment,
snowmaking facilities, trail upgrades and expansion, and new ski lift, all located on land
owned by Mount Snow, Ltd. (the West Lake Project). The Carinthia Ski Lodge, LLC
job creating project is a proposed approximately 36,000 square-foot full-service skier
services lodge to be built at the Carinthia Base Area of Mount Snow Ski Resort on land
owned by Mount Snow, Ltd. (the Carinthia Ski Lodge Project and, collectively with the
West Lake Project, the Carinthia Group 1 and 2 Project).
The components of the job creating projects are situated in the towns of Wilmington and
West Dover, Windham County, Vermont, are located within the State of Vermont
Regional Center and have been designed to meet the qualifications of USCIS to be
financed under the EB-5 Visa Program. The entire State of Vermont is a Regional
Center. An investor in an enterprise, such as this Project, established in Vermont, being
located in a rural area (not within the boundaries of a Metropolitan Statistical Area) and
designated as a targeted employment area ("TEA") is permitted to demonstrate that
some, possibly all of the employment positions created on account of the investment in
the enterprise will be indirect employment positions, i.e., not on the payroll of the
enterprise. The petitioner, by investing in Carinthia Group 1 or 2, L.P., which will in turn
loan development funds to West Lake Water Project, LLC and Carinthia Ski Lodge, LLC
respectively, will help promote economic growth, improve regional productivity and
create jobs.
The combined West Lake and Carinthia Ski Lodge Projects are expected to create
greater than 1,040 full-time employment positions and overall, have a significant
economic impact on the local economy within the State of Vermont Regional Center and
reach into the northeastern US and the rest of the United States.
The anticipated overall expenditure of the Carinthia Group 1 and 2 Project is
$66,000,000, of which $52,000,000 will be funded with the proceeds from this offering
and will be supplemented with the additional contribution in cash, land or value of
$14,000,000 ($14 million) provided by the Resort Owner as summarized hereunder.
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Section 2 - Business Plan | Carinthia Group

The proposed source of funds is described below:

Carinthia Group 1 and 2, L.P. Proceeds $52,000,000 79%
Resort Owner Contributions
$14,000,000 21%
Total
$66,000,000 100%
Mount Snow, Ltd., directly or through one or more affiliated entities, will have an
ownership interest in the job creating projects by virtue of its ownership of West Lake
Water Project, LLC and Carinthia Ski Lodge, LLC.
To the extent that the offering is not fully subscribed and less than $52,000,000 is
raised, the Partnership will allocate up to the first $30,000,000 of subscriptions received
and accepted to West Lake Water Project, LLC for the development of the West Lake
Project. The West Lake Project will be developed in three tranches consisting of
$10,000,000 (tranche one), $12,500,000 (tranche two) and $7,500,000 (tranche three).
To the extent that the general partner accepts subscriptions for any tranche and the
proceeds of such subscriptions do not equal the amount for such tranche set forth
above, Mount Snow Ltd. will make alternative arrangements to finance the balance of
the tranche. If and when subscriptions received exceed $30,000,000, the next
$22,000,000 will be allocated to Carinthia Ski Lodge, LLC for the development of the
Carinthia Ski Lodge.
West Lake Water Project, LLC and Carinthia Ski Lodge, LLC will enter into a
commercial lease agreement with Mount Snow Ltd. for the lease of the land on which
the West Lake Project and the Carinthia Ski Lodge Project will be constructed. The
term of each lease is 50 years. Mount Snow Ltd. will also enter into a water supply
agreement with West Lake Water Project, LLC. See Section 5, Exhibits.
The alien entrepreneurs as limited partners will collectively own 99.99% of the
Partnership, whereas, the general partner will own an interest of .01%. The general
partner has delegated certain of the management duties to an experienced team of
professional managers and consultants. Mount Snow Ltd. is the sole member of the
general partner.

THE STATE OF VERMONT A USCIS DESIGNATED REGIONAL CENTER

The U.S. Congress created a pilot program, now rescheduled to sunset on September
30, 2015, that provides for the authorization of regional centers by USCIS. Enterprises
located within and affiliated with a regional center are not required to employ ten (10)
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Section 2 - Business Plan | Carinthia Group

workers for each investment that qualifies under the EB-5 Visa Program. It suffices if the
investor demonstrates that at least ten (10) qualifying employment positions will be
created directly or indirectly on account of the investment.
In June 1997, the State of Vermont, Agency of Commerce and Community
Development (VACCD), was granted a designation as an approved regional center
under this pilot program. An investment in a new commercial enterprise situated within
and affiliated with the regional center, the state of Vermont, that fosters economic
expansion through increased exports, greater regional productivity, employment
creation or additional domestic capital investment, qualifies for the broader view of
employment creation.
Mount Snow, with land parcels located in West Dover and Wilmington, Vermont is
located within the VACCD Regional Center, and the project described in this business
plan has been structured so that foreign investors may meet the requirements of the
EB-5 Visa Program and become eligible for admission to the United States of America
as lawful permanent residents with the investors qualifying family members.
The designation of the VACCD Regional Center was reaffirmed via a written
request dated August 17, 2009 whereby VACCD Regional Center sought to
amend its initial regional center designation, to expand the types of approved
economic activities and industrial clusters as follows:
1. To add manufacturing, professional services, education, information and
lending institutions to their current list of approved industries.
2. To add the economic activities of design, development and production of new
products; expansion or renovation of existing facilities; establishing and
expanding post-secondary schools including building, development and
operation of the schools; design, development & publishing of software,
books and other information publishing activities.
3. To provide direct equity investments in or to the industry clusters and/or to
provide indirect investments to the industries through investment in an
enterprise which in turn will lend the funds for specific industry related
project(s).
USCIS granted such request as follows: Based on its review and analysis of the
request to amend the previous VACCD regional center designation and prior amended
proposals, business plan, and supplementary evidence, USCIS amended the
7

Section 2 - Business Plan | Carinthia Group

designation of the regional center as requested to incorporate the above changes.

[referring to the expansion of the types of approved economic activities and
industrial clusters, above]. In accepting the amendment, USCIS has updated its
records of the regional center approval, designation, and business plan to
encompass these amendments relative to the investment focus of the regional center
.
In January 2014, Carinthia Group 1, L.P. executed a Memorandum of Understanding
with VACCD, authorizing the project described in this business plan as a qualifying
investment in a new commercial enterprise being situated within the Vermont EB-5
Regional Center. See Section 5, Exhibits.
PROJECT INVESTMENT SUMMARY
The Carinthia Group 1 and 2 Project is the first in a series of development projects in
the Mount Snow Master Plan, approved by the State of Vermont Act 250 and which is
summarized elsewhere in this business plan. The Carinthia Group 1 and 2 Project will
comprise the extension of two loan facilities to two new commercial enterprises, namely
West Lake Water Project, LLC and Carinthia Ski Lodge, LLC, both of which are
subsidiaries of Mount Snow Ltd., and will each conduct the development activities
described below. Subscriptions accepted by the general partner will be applied first to
the West Lake Project and, once subscriptions accepted equal $30,000,000, the next
$22,000,000 in subscription proceeds will be applied to the Carinthia Ski Lodge Project.
1. West Lake Project - The partnership will establish a non-revolving line of credit

facility and loan up to $30,000,000 to West Lake Water Project, LLC to facilitate
the construction of a new water storage reservoir and dam for snowmaking with
capacity of up to 120 million gallons, three new pump houses and the installation
of 28,500 feet of pipelines, a new ski lift and ancillary infrastructure on trails, lifts
and snowmaking equipment. The line of credit will be in the minimum amount of
$500,000 and a maximum principal amount of $30,000,000 (the West Lake
loan) based upon the number of Units sold pursuant to the offering described in
the private placement memorandum. The West Lake Project will be structured in
three tranches as follows: Tranche One in the amount of $10,000,000 for Stage 1
Expenditures (which also includes pre-construction expenditures for professional
fees, administration and permitting); Tranche Two in the amount of $12,500,000
for Stage 2 Expenditures; and Tranche Three in the amount of $7,500,000 for
Stage 3 Expenditures; all as detailed on Schedule A herein on page 48. To the
extent that subscriptions accepted for any Tranche do not equal the funds
required for such Tranche as set forth above, Mount Snow Ltd. will make
arrangements to finance the balance of the Tranche required. Mount Snow Ltd.
8

Section 2 - Business Plan | Carinthia Group

will also make arrangements to fund interest payments on the loan pending
income generating activities. In the event that funds are not raised that are
sufficient to perform all tranches concurrently, the construction of the West Lake
project may be revised, and the flow of funds will be adjusted accordingly.
2. Carinthia Ski Lodge Project - The partnership will establish a non-revolving line

credit facility and loan up to $22,000,000 to Carinthia Ski Lodge LLC for the
construction of Carinthia Ski Lodge, a new approximately 36,000 square-foot
skier services building located at the base of the Carinthia Slopes providing
extensive food and beverage facilities, ski rentals, retail and convenience store,
and lift ticket and ski school sales. The line of credit will be in the minimum
amount of $500,000 and a maximum principal amount of $22,000,000 (the Ski
Lodge Loan) based upon the number of units sold pursuant to the offering
described in the private placement memorandum. In the event that the
subscriptions accepted for the Carinthia Ski Lodge Project do not equal
$22,000,000 and the maximum loan amount is not advanced, Mount Snow Ltd.
will make arrangements to finance the balance required. Mount Snow Ltd. will
also make arrangements to fund interest payments on the loan pending income
generating activities.
It is projected that the Resort Owner, will separately contribute $14 million in cash, land
or other value into these projects to create and upgrade certain resort facilities,
including but not limited to lifts and lift relocation, adding access roads, commercial
areas build out and resort/project infrastructure and improvements, lighting, storm water
management upgrades, streams and tributaries improvements.
The West Lake Project and the Carinthia Ski Lodge Project will stimulate economic
development and create many new permanent full-time jobs within the strategic area of
the Mount Snow resort, within the State of Vermont regional center, the Northeast
region of the United States and within the United States as a whole.

JOB CREATION
An economic impact assessment has been conducted to determine the number of
employment positions expected to be created as a result of 104 alien entrepreneurs
each contributing US$500,000 to the Carinthia Group 1 and 2 Project, and the Mount
Snow contributions. This analysis was conducted using IMPLAN methodology, a
nationally recognized economic impact assessment program. The current analysis is
focused on the project as a source of employment creation, so that it is more specific
than the analysis that supported the Regional Center designation for the greater state of
9

Section 2 - Business Plan | Carinthia Group

Vermont. This analysis demonstrates that the combined project development and
business activities carried on by the limited partnership are expected to create greater
than 1,040 permanent full time employment positions within the State of Vermont,
VACCD regional center, the northeastern U.S. and the rest of the U.S, in excess of the
employment positions required under the requirements of the EB-5 Visa Program if all
Units are sold to alien entrepreneurs.

ALLOCATION OF JOBS CREATED

Full-time equivalent indirect and or direct jobs created as stated in the supplied project
economic analysis will be applied only to alien entrepreneurs under the EB-5 Visa
Program seeking to utilize the investment for immigration purposes. The offering
mandates that jobs will be allocated to investors in the order of priority for those I-829
petitions that are approved, and then to investors in the order of priority for those who
have obtained lawful permanent admission to the United States (i.e. obtained a visa or
adjustment of status).

INTENTIONALLY LEFT BLANK

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Section 2 - Business Plan | Carinthia Group

VERMONT METROPOLITAN STATISTICAL AREA

Figure 1. Vermont County Map demonstrating that the Mount Snow Ski Resort is not
within Vermonts only Metropolitan Statistical Area the Burlington/South Burlington
MSA

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Section 2 - Business Plan | Carinthia Group

MOUNT SNOW RESORT LOCATION OF CARINTHIA PROJECT

Mount Snow trail map showing the location of the proposed Carinthia development

Architect design depicting new Carinthia Aki Area Hotel condominiums, skier services lodge,
recreation and parking area

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Section 2 - Business Plan | Carinthia Group

WEST LAKE PROJECT RESERVOIR LOCATION

Site location in Wilmington, VT of the proposed 120 million gallon West Lake Reservoir. Map
location depicts location relative to Mount Snow Ski Resort in West Dover, VT

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BUSINESS AND DEVELOPMENT SUMMARY

MOUNT SNOW LTD.
Established in 1954, Mount Snow Resort is one of the largest resorts in the eastern
United States, with a land area of 2,451 acres, of which 894 acres are within the Green
Mountain National Forest. Mount Snow ski area includes 460 acres of trails spread
over four mountain areas and served by a network of 20 lifts, including the only sixpassenger covered lift in North America. Ski terrain features 80 trails, gladed tree-skiing
areas, a 400-foot competition superpipe, a minipipe, 9 freestyle parks, a tubing park and
several beginner areas. With 70% of the trails rated intermediate, it appeals to skiers
and snowboarders from throughout the East.
With its location in southern Vermont, Mount Snow is the closest major ski area to
eastern metropolitan centers, just a 4-hour drive from New York City and Long Island,
3 hours or less from the affluent Fairfield County in Connecticut (Greenwich), 2 hours
from Boston and 2 hours from Hartford. Its this close proximity to more than 30 million
people, coupled with the trail system and extensive snowmaking, that make Mount
Snow one of the most popular ski resorts in the region.

PEAK RESORTS, INC.

Headquartered in St. Louis, Missouri, Peak Resorts Inc. is a leader and innovator in the
ski industry, owning and/or operating 13 ski areas through the midwestern, northeastern
and southeastern United States. Mount Snow Ltd., a wholly owned subsidiary of Peak
Resorts Inc., is the largest resort in the Peak Resorts portfolio.

DEVELOPER AND CONSTRUCTION

The construction of the Carinthia Group 1 and 2 Project will be supervised by Mount
Snow Develop and Build, LLC, who will enter into a contract for this service with West
Lake Water Project, LLC and Carinthia Ski Lodge, LLC. Mount Snow Develop and
Build, LLC will receive contractor supervision payments of fifteen (15%) of the build cost
for each project. The main contractor for Carinthia Ski Lodge is DEW Construction, a
company based in Williston Vermont and familiar with hotel and related building facilities
in Vermont ski resorts. The main contractor for the West Lake Project is GW Tatro

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Section 2 - Business Plan | Carinthia Group

Construction, a company based in Jeffersonville Vermont and familiar with heavy civil
construction related to ski areas and snowmaking systems.

MOUNT SNOW BASE AREA DEVELOPMENT

The purpose of the Mount Snow Master Plan (MSMP) is two-fold. First, the plan
addresses requests by the State Commission for a master plan of development. The
master plan encompasses all of Mount Snows land holdings. This allows the
Commission and the community to assess and understand the impacts of the proposed
development in its entirety. This is completely different from the past, where projects
were approved one by one. The plan also addresses existing environmental issues,
identifying the methods to be employed for their remediation.

MOUNTAIN MASTER PLAN

Because Mount Snow is located partially on U.S. Forest Service lands and operates
under a Special Use Permit (SUP) from the United States Forest Service (USFS, see
Appendix), a mountain master plan is required by the USFS. A mountain master plan
was accepted by the USFS in January 2007 (see Appendix). An update to the plan was
submitted in April of 2010 and accepted in May 2010. The mountain master plan
presented in this application is taken from the Forest Service plans. Currently Mount
Snow has an need for more snowmaking coverage, water for snowmaking, lift capacity,
skier service buildings and beginner terrain. The mountain master plan addresses
these deficiencies.

DEVELOPMENT PERMITS ACT 250

In July 2010 the Vermont Act 250 Commission issued Partial Findings of Fact for the
MSMP, which approved certain aspects of the master plan project including the total
number of units and the design concept (copy of overall master plan rendering on page
17). The Commissions approval of future conceptual development plans by Mount
Snow Resort, including hotel facilities, provides conditions and guidance for
development applications made by Mount Snow Resort under the land use laws of the
State of Vermont to obtain development permits (so-called Act 250 permits).
This approved plan includes the development of up to 900 residential units;
development of 200,000 square feet of new skier service buildings; and mountain
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Section 2 - Business Plan | Carinthia Group

improvements including additional snowmaking and new ski lifts. The first phase of the
MSMP is the development of the Carinthia Base Area with up to 150 residential units, a
new skier service lodge and an expanded and paved parking area.

DEVELOPMENT PHASES
While overall planning is contained within the MSMP, planning, permitting review and
state and county regulatory applications for the individual project components are
projected to commence in early 2014. The State of Vermont land development laws
determine when and how much land may be opened for development at any one time.
Subject thereto and to the approval and issuance of regulatory permits and the receipt
of sufficient funds from investors, both the West Lake and Carinthia Ski Lodge projects
are expected to begin groundbreaking in 2015.
The funds raised in the offering described in the private placement memorandum are
expected to be expended over approximately a 24-30 month period as will be noted
from the relevant tables shown in this business plan. Business operations are projected
to commence during the 2017 winter season, subject to no unforeseen delays or
inclement weather factors during the exterior structures build phase.
The job creation information prepared by Economic and Development Research Group
of Boston, MA detailing the full-time permanent jobs created by the Carinthia Group 1
and 2 Project is provided in summary in this business plan on pages 38-40.

INTENTIONALLY LEFT BLANK

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Section 2 - Business Plan | Carinthia Group

MOUNT SNOW SKI RESORT MASTER PLAN

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Section 2 - Business Plan | Carinthia Group

SUMMARY OF JOB CREATING PROJECTS

WEST LAKE PROJECT
Snowmaking is an essential element of any successful eastern ski resort. Snowmaking allows
Mount Snow to open in November and provide reliable snow conditions through early April.
Snowmaking also compliments natural snowfall by increasing base depths and providing
insurance against winter thaws. During thaw/freeze cycles, snowmaking is used to re-surface
trails, covering ice and providing a much more enjoyable experience for visitors.
Snowmaking itself is simply water combined with compressed air. Water is delivered via pipeline
to a snowmaking gun. When this water is combined with compressed air and sprayed through
the snowmaking gun at below-freezing temperatures, it drops to the ground as snow. Because the
density of the snow can be controlled by the air-water mixture, snowmaking snow is actually more
durable and can last longer than natural snow. The amount of snow that a ski resort can make is
directly related to the water available for snowmaking.
Although it does not affect Mount Snows present ability to make snow and provide a consistent
snow surface, Mount Snow has limited water resources for snowmaking. One such resource is
Snow Lake, an 11-million gallon in-stream impoundment. Although it is grandfathered and Mount
Snow is allowed to use it for snowmaking, the State of Vermont is requiring Mount Snow to
eliminate or bring Snow Lake into compliance with current environmental standards.
Existing water storage ponds available to Mount Snow total 21.7 million gallons, which is used to
cover 78% of the mountain with snowmaking. The West Lake Project will provide 120 million
gallons of water storage, enough water to not only meet existing needs but also allow expansion of
snowmaking to cover 100% of the mountain. The increase in available water will also enable
Mount Snow to increase its snowmaking capacity, operate more snowmaking guns at one time
over an expanded area and to open trails faster early in the season to potentially extend the length
of the ski season.
Components of the West Lake Project include:

West Lake, a 120-million gallon storage pond. Water will be pumped into the pond for storage,
and pumped out of the pond to be used for snowmaking.

Water withdrawal and intake structure. A small, three-foot high rubber inflatable dam will be
installed in the Cold Brook. During the winter season, the dam will be inflated, creating a pool
of water behind it. This water will feed by gravity via an intake pipe to the West Lake pump

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Section 2 - Business Plan | Carinthia Group

house. In addition to the dam, a Parshall flume will be installed in the stream. This flume
allows for the required federal and state minimum stream flows in Cold Brook.

Pump houses. Three pump houses will be constructed. The West Lake pump house will pump
water from Cold Brook to West Lake for storage, and also pump water from West Lake to the
Carinthia pump house at Mount Snow. The Carinthia and Air Center pump houses will take the
water from West Lake and pump it to all areas of the mountain for snowmaking.

Pipelines. Pipelines, totaling 28,500 feet and ranging from 24 to 48 in diameter, will connect
West Lake and the pump houses.

Other components of the West Lake Project include on-mountain snowmaking upgrades, a
new beginner lift and infrastructure improvements.

INTENTIONALLY LEFT BLANK

19

Section 2 - Business Plan | Carinthia Group

WEST LAKE PROJECT SITE MAP

20

Section 2 - Business Plan | Carinthia Group

WEST LAKE PROJECT CONCEPT IMAGES

Similar snowmaking reservoir in Vermont

Similar water withdrawal structure showing inflatable dam (left) and

Parshall Flume (right) to allow minimum flow

21

Section 2 - Business Plan | Carinthia Group

Artists rendering of Carinthia Pump House, one of three pump houses

to be constructed as part of the West Lake Project

The West Lake Project will provide more water for snowmaking, and allow Mount Snow
to operate more snow guns at once and open more terrain early in the season.

22

Section 2 - Business Plan | Carinthia Group

CARINTHIA SKI LODGE PROJECT

In 1986 Mount Snow purchased Carinthia Ski Area, a smaller ski area located adjacent to Mount
Snow. Snowmaking and lift upgrades, along with integration into the main mountain of Mount
Snow made Carinthia a popular area of the mountain. In 2008, the entire Carinthia area was
turned into a freestyle area, with 9 parks and nearly 100 acres of terrain covering more than 5
miles. Its the largest freestyle area in New England. Carinthia and Mount Snow have been the
site for major winter competitions including the ESPN Winter X Games and the Winter Dew Tour,
both broadcast on live TV and seen internationally in millions of households.
The new Carinthia Ski Lodge will be a state-of-the-art facility designed to provide needed skier
services in a comfortable, modern building. Totaling approximately 36,000 square feet, it will
house a full-service cafeteria, restaurant, two bars and coffee counter. Skier services will include
a ski rental shop, lift ticket and ski school sales, retail and convenience store, bag storage service
and kids activity room. The interior of the lodge is designed so that during the off-season it can be
modified for conferences or other groups. The lodge will also feature modern technology including
wi-fi and outlets for charging electronic devices.
Storm water and other environmental issues will be addressed through the installation of properly
engineered drainage. The parking area and entryway will be expanded and paved, creating a
welcoming arrival experience.

INTENTIONALLY LEFT BLANK

23

Section 2 - Business Plan | Carinthia Group

CARINTHIA SKI LODGE LOCATION AND CONCEPT IMAGES

Carinthia Ski Lodge site plan showing Ski Lodge and

future proposed Carinthia development

Concept image a similar ski lodge facility in Vermont

24

Section 2 - Business Plan | Carinthia Group

Architects rendering of slopeside perspective of new Carinthia Ski Lodge

Architects rendering of south perspective and entry of new Carinthia Ski Lodge

25

Section 2 - Business Plan | Carinthia Group

THE FINANCIAL TRANSACTION

CAPITAL INVESTMENT AND PROJECTED FINANCIAL STATEMENT
Investment funds and value totaling $66,000,000 are estimated as required to complete the
Carinthia Group 1 and 2 Projects, with investors providing up to $52,000,000 pursuant to the
offering and the resort owner contributing $14,000,000 in cash, land or other value.

The revenues to the partnership will be from interest income received from the separate
loans advanced to West Lake Water Project, LLC and Carinthia Ski Lodge, LLC.

A five year summary of projected partnership income and management costs is shown in
the table on page 35. (See Projected Statement of Partnership Income)

A summary of projected revenue from business operations for West Lake Water Project,
LLC and Carinthia Ski Lodge, LLC is shown elsewhere in the business plan see pages 52
and 63.

A flow chart depicting the structure of business operations for the Carinthia Group I and 2
LP has been included on page 36.

CAPITAL INVESTMENT INTO THE COMMERCIAL ENTERPRISE

1. Description
The Carinthia Group 1 and 2 Projects will be structured on a Loan Model. The two partnerships will
be co-lenders. The capital investment commercial enterprise is the Partnership, which will serve as
the entity in to which proceeds received from EB-5 investors are invested for the purpose of
extending development loans to fund the construction of the job-creating projects. In essence, the
EB-5 investors will invest in Carinthia Group 1 and 2, which will in turn loan the EB-5 investors
funds directly to the developers of the job-creating projects, West Lake Water Project, LLC and
Carinthia Ski Lodge, LLC. Subscriptions accepted by the general partner will be applied first to the
West Lake Project and then to the Carinthia Ski Lodge Project.
The EB-5 investors will purchase units at a capital investment amount equal to $500,000 per Unit.
Their Units of investment will be evidenced by a Certificate of Partnership Interest and an
executed subscription agreement which incorporates consent to the limited partnership
agreement.

26

Section 2 - Business Plan | Carinthia Group

West Lake Water Project, LLC and Carinthia Ski Lodge, LLC will enter into and execute separate
promissory notes for $30 million and $22 million, respectively, that are payable to the lender,
Carinthia Group 1 and 2, L.P.
The obligation of the borrowers under each promissory note will be supported by a limited
guarantee of collection to be issued by Peak Resorts, Inc. Upon maturity of loan facilities pursuant
to the loan agreement for each entity repayment of the loan to the Partnership will be made by the
borrowers from sources that may be available at that time depending on credit and market
conditions and other factors: See Exit Strategy and Risk Factors below and in Section 1 of the
private placement memorandum.
2. Ownership Structure
The ownership structure of the capital investment commercial enterprise is described in the chart
below:

Mount Snow GP Services LLC is the general partner of Carinthia Group 1 and 2, L.P. These
entities were formed in the State of Vermont on 10/4/2012 and 3/4/14 respectively. The general
partner will manage the day-to-day operations of the Partnership. The manager of the general
partner is Richard Deutsch, who is also a director of Peak Resorts, Inc. The sole member of
Mount Snow GP Services LLC is Mount Snow Ltd.
Investors: Investment in the Partnership is available to qualified foreign nationals that are seeking
lawful permanent residency in the United States through the USCIS EB-5 Visa Program. The
minimum investment amount is $500,000 per EB-5 Investor (which excludes a separate $50,000
27

Section 2 - Business Plan | Carinthia Group

administrative fee that is not part of the investment and is payable by the EB-5 investor to Mount
Snow Ltd. concurrently with his or her subscription). The general partner may accept subscriptions
in a lesser amount from investors that are not EB-5 Investors and such investors will not be
required to pay the administrative fee.

3. Management

The general partner of the Partnership is Mount Snow GP Services LLC. The sole member of the
general partner is Mount Snow Ltd. and the manager of the general partner is Richard Deutsch.
A summary of the duties of the general partner under the Partnership Agreement shall include:
1. Oversight of the marketing of the investment units to EB-5 investors.
2. Liaison with escrow agent to assure that all investor funds are escrowed until
acceptance of subscriptions. [Note: All capital contributions and administrative fees will
be held in escrow until the approval of the first I-526 petition filed by an investor.]
3. Review all construction draw requests issued by West Lake Water Project, LLC and
Carinthia Ski Lodge, LLC as borrowers to assure that the Carinthia Group 1 and 2
Project is being constructed on time and within budget.
4. Liaise on a regular basis with all investors to keep them informed as to the status of their
investment and the Carinthia Group 1 and 2 Project.
5. Assist, when necessary, in providing the required information for use in preparation of
EB-5 Investor I-526 Petitions and I-829 Petitions and any other USCIS required
28

Section 2 - Business Plan | Carinthia Group

documentation necessary for the investor to obtain conditional and ultimately, lawful
permanent residency.
6. Oversee the maintenance of current information for all EB-5 investors in compliance with
the requirements of the EB-5 Visa Program.
7. Assure the establishment of the proper tracking systems to monitor investor funds, I-526
and I-829 applications.
Other than receiving its general partnership interest herein, and receiving reimbursement for
expenses and other costs incurred directly or indirectly by the general partner to fulfill its duties
under the limited partnership agreement, the general partner shall not be entitled to compensation
for its services rendered pursuant to the limited partnership agreement.

4.

Limited Partners

In order to invest in Carinthia Group 1 or 2 L.P., a potential investor must meet the criteria set forth
in the private placement memorandum, follow the subscription procedures required in the private
placement memorandum and the Subscription Documents, and, if an EB-5 investor, follow all
required immigration procedures. The rights and obligations of each Investor are governed by the
partnership agreement, and in accordance with the "limited partnership" laws of the state of
Vermont and the Vermont Revised Uniform Limited Partnership Act. The Partnership will be
managed by its General Partner, Mount Snow GP Services, LLC, a Vermont Limited Liability
Company. All investor funds, will initially be held in a non-interest bearing escrow account, until
approval of the first I-526 petition filed by an investor (the Escrow Release Condition). Once the
Escrow Release Condition is satisfied, the funds will remain in escrow until released by the
general partner to be used to fund the Project.
Until such time as the general partner releases the funds from escrow, the general partner may, in
its sole discretion, reject an investment in the Partnership. The general partner's acceptance of an
investors subscription is discretionary, and the general partner may reject any subscription for any
reason without incurring any liability to an investor for this decision. If an investors subscription is
rejected, then all funds, including the administrative fee, will be promptly returned to such investor..
The Partnership Agreement mandates that each limited partner shall participate in the
management of the business of the partnership by making suggestions or recommendations to
the general partner on issues of policy important to the partnership. The limited partnership
agreement also permits limited partners to participate in one or more of the activities (i) permitted of
limited partners under the Vermont Revised Uniform Limited Partnership Act and (ii) otherwise set
forth under the limited partnership agreement. (See Limited Partnership Agreement).

29

Section 2 - Business Plan | Carinthia Group

Distributions to limited partners may be made at the discretion of the general partner out of available
net cash after payment of expenses, and any reserves made, or other funds withheld as deemed
necessary by the general partner in its sole discretion (see Limited Partnership Agreement).

INVESTMENT TERMS AND CONDITIONS

A full disclosure of all the investment terms and conditions are contained in the private placement
memorandum and Subscription Agreement (see Exhibits),
A summary of the terms and conditions of the investment include the following:

The capital investment commercial enterprise is Carinthia Group 1 and 2 L.P. The Partnership
will accept subscriptions from eligible EB-5 investors and other investors and use the
subscription proceeds to fund development loans to facilitate the job creating projects by West
Lake Water Project, LLC and Carinthia Ski Lodge, LLC.

All EB-5 investors who file I-526 petitions in a commercial enterprise, located in a USCIS
designated Regional Center, must meet the requirements of 8 CFR 204.6 of the US Immigration
and Naturalization Code of Federal Regulations.

Each investment is referred to as a Unit" and each unit is priced at $500,000. This amount
represents the minimum capital investment required by the EB-5 Visa Program for any job
creating project that is located in a Target Employment Area. In addition to the capital
contribution, each EB-5 investor must pay a non-refundable administrative fee of $50,000 to the
general partner to pay to pay (including reimbursement of previously paid amounts) the fees
and expenses of the general partner and Mount Snow Ltd. incurred in structuring and
organizing the Carinthia Group 1 and 2 Project in compliance with the requirements of the EB-5
Visa Program, including marketing, consulting, escrow, legal and other fees and expenses and
any fees of foreign broker/dealers, and coordinating with counsel and foreign broker/dealers
with respect to the collection of information from potential alien entrepreneurs and other
administrative matters arising in connection with their admission as limited partners of the
Partnership. The minimum subscription may be reduced by the general partner in its discretion
in the case of investors that are not EB-5 Investors and such investors shall not be required to
pay the administrative fee.

Investor funds are considered non-refundable and "fully at risk" once the Investor has
subscribed to and been accepted as a limited partner in the Partnership. The $50,000 paid for
the administrative expenses is non-refundable. However, as outlined in the Private Placement
Memo on Page 32 (Limitation on Return of Funds if I-526 Petition is Denied), in the event that
USCIS denies an investor's I-526 petition, the investor may seek a return of the $500K capital
contribution and a portion of the $50,000 administrative fee. Any return of funds is subject to
the discretion of the General Partner.

30

Section 2 - Business Plan | Carinthia Group

LOAN STRUCTURE
Carinthia Group 1 and 2, LP will offer Units to eligible investors who meet the investor suitability
requirements described in Section 1 of the private placement memorandum. Proceeds from the
sale of units will be loaned by the Partnership to West Lake Water Project, LLC and Carinthia Ski
Lodge, LLC to fund the job creating projects. Each loan will be evidenced by a properly executed
promissory note and loan agreement in favor of the Partnership. Each advance under the
promissory notes will be subject to the receipt of a documented draw request that will clearly
identify the use of proceeds and their investment directly into the project in accordance with the
plans, specifications and budget.
The terms and conditions of the loans are as follows:
Borrower:

West Lake Water Project, LLC

Co-Lenders:

Carinthia Group 1, LP and Carinthia Group 2, LP

Total Amount:

Minimum: $500,000 / Maximum: $30,000,000

Collateral:

The Loans will be secured by a guaranty of collection executed by Peak

Resorts, Inc.

Term of Loan:

5 years, with borrowers option to extend for an additional 2 years.

Origination Fee:

0%

Interest Rate:

1.0% fixed (increased to 7.0% if the loan is extended to year 6, and 10.0% if
the loan is extended to year 7)

Amortization:

Interest payable annually. Principal, in full, at final maturity.

Sources of
Repayment:

See "Exit Strategy" below.

Disbursement
Requirements:

Covenants:

To assure funds are invested directly into the West Lake Project, prior to
every disbursement, borrower must submit to lender the detailed
documentation in the form of a draw request that indicates the amount of loan
proceeds requested and the use of such proceeds in the project in
accordance with the plans, specifications and budget.
The loan agreement contains covenants with respect to, among other things:
the provision by the borrower and the guarantor of financial information and
monitoring rights to a third party that is not affiliated with Mount Snow or any

31

Section 2 - Business Plan | Carinthia Group

of its affiliates; a prohibition of any amendments of the terms of, or waiver of

any rights under, the loan agreement and note without the consent of a
majority-in-interest of the limited partners. The loan agreement contains
covenants with respect to, among other things, the provision of by the
borrower and the guarantor of financial information, monitoring rights to an
unaffiliated third party, and prohibitions against the granting of liens to third
parties except as specifically permitted by the loan agreement (under the
terms of Peak Resorts credit facility, the lender has a mortgage on the land
on which the West Lake Project will be constructed).
Events of Default: The loan agreement and note contain standard events of default, including for
non-payment of interest and principal when due and violation of covenants.
Upon an event of default, after expiration of any applicable cure period, the
Partnership shall have all the rights and remedies of a creditor of the borrower
under applicable laws. Notwithstanding the foregoing, no action shall be taken
nor shall any remedy be exercised that would adversely affect the eligibility of
alien entrepreneurs for admission into the United States as lawful permanent
residents on the basis of their investment in a commercial enterprise.

Borrower:

Carinthia Ski Lodge, LLC

Co-Lenders:

Carinthia Group 1, LP and Carinthia Group 2, LP

Total Amount:

Minimum: $500,000 / Maximum: $22,000,000

Collateral:

The Loans will be secured by a guaranty of collection issued by Peak

Resorts, Inc.

Term of Loan:

5 years, with borrowers option to extend for an additional 2 years.

Origination Fee:

0%

Interest Rate:

1.0% fixed (increased to 7.0% if the loan is extended to year 6, and 10.0% if
the loan is extended to year 7)

Amortization:

Interest payable annually. Principal, in full, at final maturity.

Sources of
Repayment:

See "Exit Strategy" below.

Disbursement
Requirements:

To assure funds are invested directly into the Carinthia Ski Lodge Project,
prior to every disbursement, borrower must submit to lender the detailed
32

Section 2 - Business Plan | Carinthia Group

documentation in the form of a draw request that indicates the amount of loan
proceeds requested and the use of such proceeds in the project in
accordance with the plans, specifications and budget.
Covenants:

The loan agreement contains covenants with respect to, among other things:
the provision by the borrower and the guarantor of financial information and
monitoring rights to a third party that is not affiliated with Mount Snow or any
of its affiliates; the prohibition of any amendments of the terms of, or waiver of
any rights under, the loan agreement and note without the consent of a
majority-in-interest of the limited partners. The loan agreement contains
covenants with respect to, among other things, the provision of by the
borrower and the guarantor of financial information, monitoring rights to an
unaffiliated third party, and prohibitions against the granting of liens to third
parties except as specifically permitted by the loan agreement (under the
terms of Peak Resorts credit facility, the lender has a mortgage on the land
on which the Carinthia Ski Lodge Project will be constructed).

Events of Default: The loan agreement and note contain standard events of default, including for
non-payment of interest and principal when due and violation of covenants.
Upon an event of default, after expiration of any applicable cure period, the
Partnership shall have all the rights and remedies of a creditor of the borrower
under applicable laws. Notwithstanding the foregoing, no action shall be taken
nor shall any remedy be exercised that would adversely affect the eligibility of
alien entrepreneurs for admission into the United States as lawful permanent
residents on the basis of their investment in a commercial enterprise.

EXIT STRATEGY
According to the guidelines of USCIS relating to investments made within an approved EB-5
project, an "investment within such a project must be fully at-risk. In order to ensure that the
capital invested by each EB-5 investor remains fully at risk for the period of time required under
the EB-5 Visa Program, the partnership agreement specifically prohibits the Partnership from
returning any portion of the capital investment amount prior to the approval of the EB-5 investor's I829 Petition.
The general partner expects each borrower will consider a number of options to repay the loan to
the partnership upon maturity. Such options include but are not limited to: (1) a strategic
refinancing of the facility; (2) reserving funds from operations; (3) the proceeds of a loan from
Mount Snow or Peak Resorts; and (4) the purchase of the borrowers assets by Mount Snow or
Peak Resorts or another of its affiliates.

33

Section 2 - Business Plan | Carinthia Group

There can be no assurance that the borrowers will be successful in completing any such
refinancing or other transaction or that the proceeds of any such transaction will enable the
borrowers to repay the loans to the Partnership in full. In any such event the Partnership may
pursue any remedies available to it as an unsecured creditor of the borrowers and may also seek
recourse to the guaranty of Peak Resorts of the facilities for any unpaid amounts. The guaranty is
not secured by any assets of Peak Resorts and there can be no assurance that Peak Resorts
would have sufficient resources to satisfy the guaranty. Any failure by the borrowers to repay the
loans or Peak Resorts to satisfy the guaranty may have a material adverse effect on the ability of
the limited partners to receive a return of their capital and may result in the complete loss of
investment.

NO GUARANTEES OR REDEMPTION RIGHTS

Each limited partner acknowledges and agrees by his receipt and execution of a Subscription
Agreement which includes a consent to the limited partnership agreement that no promises or
guarantees of performance, investment results or returns, rights to redeem their Interests or right
to or probability of removal of conditions under the EB-5 Program have been made to them by
anyone, including but not limited to by the general partner or any of its affiliates, and their agents,
representatives, officers, salesmen, managers, employees, attorneys, consultants and third party
contractors, and they are not relying on anything from the general partner or any of its affiliates,
and their agents, representatives, officers, salesmen, managers, employees, attorneys,
consultants and third party contractors except the private placement memorandum and the
subscription documents in making the decision to invest.
INTENTIONALLY LEFT BLANK

34

Section 2 - Business Plan | Carinthia Group

PROJECTED STATEMENT OF PARTNERSHIP INCOME

PROJECTED STATEMENT OF PARTNERSHIP INCOME

CARINTHIA GROUP 1 AND 2 L.P. 104 INVESTORS $52,000,000

S e e R is k F a c t o rs : F o rwa rd Lo o k ing S t a t e m e nt s

YEAR 1

YEAR 2

YEAR 3

YEAR 4

YEAR 5

INCOME
W EST LAKE PROJECT LOAN $30M
INTEREST INCOME

97,500

200,000

300,000

300,000

300,000

CARINT HIA SKI LODGE LOAN $22M

INTEREST INCOME

82,500

192,500

220,000

220,000

220,000

T OT AL INCOME

180,000

392,500

520,000

520,000

520,000

PROFESSIONAL FEES
COMPLIANCE
MISCELLANEOUS

$
$
$

20,000
10,000
5,000

$
$
$

20,000
10,000
5,000

$
$
$

20,000
10,000
5,000

$
$
$

20,000
10,000
5,000

$
$
$

20,000
10,000
5,000

T OT AL EXPENSES

35,000

35,000

35,000

35,000

35,000

PART NERSHIP NET OPERAT ING INCOME

UNIT INVEST MENT INCOME

$
$

145,000
1,394

$
$

357,500
3,438

$
$

485,000
4,663

$
$

485,000
4,663

$
$

485,000
4,663

EXPENSES

ANNUAL % RETURN ON INVESTMENT

0.3%

0.7%

0.9%

0.9%

0.9%

(No te: excludes M o ney M arket A cco unt Interest)

Dividends paid annually, subject to the limited partnership agreement, to investors based
upon available cash funds. Interest Income in Years 1 and 2 is received in arrears and
based upon the projected advances to borrowers. See Limited Partnership Agreement.
Carinthia Group 2, LP has an identical projected income structure.
A summary of projected business operations and job creation for each activity created by the
use and application of partnership funds is shown elsewhere in the business plan.

INTENTIONALLY LEFT BLANK

35

Section 2 - Business Plan | Carinthia Group

STRUCTURE OF BUSINESS OPERATIONS: CARINTHIA GROUP 1 AND 2, L.P.

OVERALL PROJECT EXPENDITURE: $66 MILLION

$52 million from 104 EB-5 investors at

$14 million contribution by Resort

$500,000 per investor

Owner to provide infrastructure. etc.

CARINTHIA GROUP 1 and 2, L.P

Resort Owner

Receives funds from Investors into the Limited Partnership (LP)

LP loans these funds to business enterprises for commercial development and job creation

LP Income source: partnership receives loan interest

cash, land or
other value
applied to:
Carinthia area

West Lake Water Project, LLC:

JOB
CREATION

Receives funds of up to
$30,000,000 by way of loan from
LP. Utilizes funds for
development and construction of
snowmaking reservoir, pumps,
piping, pump houses and related
infrastructure.

Requisite jobs
created by:

Pays interest on loan to L.P.

Creates jobs from development
expenditures into project.

Carinthia Ski Lodge, LLC:

Receives funds of up to
$22,000,000 by way of loan
from L.P. Utilizes funds for
development and
construction of Ski Lodge of
approx. 36,000 sq ft.
located at Mount Snow
Carinthia Base Area. Ski
Lodge will provide retail,
skier services, food and
beverage.

The money
invested into
the projects
Revenues
from
operations

upgrade
General
Resort
Infrastructure
access roads,
drainage,
trails,
snowmaking
Equipment
facilities etc.

Increased
visitor
spending at
the Mount
Snow Resort

Pays interest on loan to LP.

Creates jobs from
development expenditures
into project, and revenues
from operations.

EXIT STRATEGY:
Please refer to page 33 of this document.
The general partner expects each borrower will consider a number of options to repay the loan to the partnership upon maturity.
Such options include but are not limited to: (1) a strategic refinancing of the facility; (2) reserving funds from operations; (3) the
proceeds from a loan from Mount Snow or Peak Resorts; and (4) the purchase of the borrowers assets by Mount Snow or Peak
Resorts or another of its affiliates.

36

Section 2 - Business Plan | Carinthia Group

JOB CREATION CALCULATION

IMPLAN SOFTWARE MODEL
The methodology employed in the analysis for the Carinthia Group 1 and 2 Project was derived
from the IMPLAN software model developed by the Minnesota IMPLAN group (MIG).
IMPLAN is based on the national input-output technology tables that show how each type of
industry relies on a different mix of its own labor and supplies purchased from other industries and
it is calibrated to reflect local economic patterns (of employment, payroll and business sales)
occurring within specified counties (or sub-county areas). This shows a default on the extent to
which local industries purchase goods and services from suppliers located within the same county.
IMPLAN is the most widely used analysis software systems for measuring or estimating the
economic impacts associated with openings, closings, expansion, contraction, and on-going
operations of facilities ranging from industrial plants to national parks.
Carinthia Group 1 and 2, L.P. has retained Economic Development Research Group (EDR) of
Boston, Massachusetts to calculate, prepare and submit the job creation report for the project.
The EDR group team is headed by Ms. Lisa Petraglia, V.P. of Research. Ms. Petraglia has 22
years of experience working in economic modeling and policy analysis, focusing specifically on
economic impact evaluation.
EDR has performed job creation calculations demonstrating project job creation of 1,112 new full
time non-direct jobs for the years of the development phase of the project for the U.S. economy, of
which 966 occur within the regional center. The second year of business operations on new
facilities will support 155 jobs within the 4-county project economy located within the Vermont
regional center. The total project job creation when considering construction and year 2 of
operations is 1,267 new full time jobs, for the U.S. economy. Total jobs created far exceeds the
requisite job creation total of 1,040 jobs for 104 foreign EB-5 investors. EDR below provides a
synopsis of the job generating impacts.
Allocation of jobs created - although the project is open to both U.S. and foreign investors, full
time equivalent indirect and or direct jobs created as stated in the supplied project economic
analysis will be applied only to foreign investors seeking to utilize the investment for immigration
purpose.

INTENTIONALLY LEFT BLANK

37

Section 2 - Business Plan | Carinthia Group

Summary of Job Generating Impacts Mount Snow Master Expansion Plan

Carinthia Group Project
November 12, 2012
An IMPLAN analysis (using region specific date for 2010) was conducted to evaluate the business plan for the Mount Snow
(located in Windham County, Vermont) Carinthia Group expansion for job generation potential.
Key findings are as follows:

Development phase activity-associated with a $66 million budget (in 2012$), $65.2 million as economic transactions, will
support 836 indirect jobs in the State of Vermont and 275 indirect jobs outside the boundary of the Regional Center.
These 1,112 FTE jobs represent eligible job impacts supported during the development phase.

Once the facilities are completed specifically the Carinthia Ski Lodge Additional visitor spending in each of the first two
years of operation (of the new facility) is valued at $4.98 million and $5.16 million in 2012$.

The total job generating effects of the annual visitor spending are 154 FTEs by YR2 within the 4-county Southern
Vermont study area and 1 indirect FTEs in the remainder of the Vermont Regional Center.

Job Generation effects of Carinthia Group Proposed Expansion Source: IMPLAN multi-region impact model
Phase ==>
Study Region ==>

Operations

Development Phase

4-county Southern VT*

State of Vermont

Year 1
Visitor spending, mil. $2012

4.98

Year 2
$

non-direct Jobs (FTE)

FTE Job impacts in Study Region

Snowmaking Reservoir^

2 Years

3 Years

$27.6 (79%)

$37.6 (80%)

5.16

Construction Budget, mil. 2012$(VT

purchases)**
direct Jobs (FTE)

Ski Lodge

not applicable

not applicable

not applicable

not applicable

148

154

393

443

148

154

393

443

rest of Vermont

not applicable

not applicable

rest of Northeast

not applicable

not applicable

48

82

rest of U.S.

not applicable

not applicable

47

99

149

155

488

624

All Regions FTE Job Impact

* includes Windham, Windsor, Rutland and Bennington counties

** excludes land contribution, and working capital
^Development phase non-direct job impacts in southern VT region included contracted Construction laborers on-site for the West Lake
Reservoir Project
th

155 Federal Street, 6 Floor, Boston Massachusetts 02110 USA telephone 617.338.6775 fax 617.338.1174 www.edrgroup.com

38

Section 2 - Business Plan | Carinthia Group

SUMMARY OF JOB IMPACTS FOR CARINTHIA GROUP 1 AND 2 PROJECT

Using IMPLAN 2010 data files, two multi-regional analysis systems were defined: for the development
phase analysis a three-region context comprised of the Vermont economy, the rest of Northeast1, and
the balance of the U.S. was assembled; for the visitor-spending analysis, the two-region analysis used
an immediate 4-county sub-state economy centered on the Mount Snow facility2; and a second region
identifying the rest of State.
Using the development phasing for the Carinthia Ski Lodge Project (requiring $22 m of foreign investor
funds plus another $6 m of private funds and a duration of within 2 years), and the West Lake
Snowmaking Reservoir (requiring $30 m of foreign investor funds plus another $8 m of private funds for
a 2+ year undertaking), the following eligible job impacts (Vermonts job impact for the ski lodge
exclude the direct construction positions since the development duration is within 2 years) have been
estimated:

WestLakeReservoir

REGION
VT

yr1
146

yr2
186

yr3
111

RESTOFNO'EAST
restofU.S.

27
33

35
41

21
25

Maine, New Hampshire, Connecticut, Rhode Island, Massachusetts, and New York.
Bennington, Windham, Windsor and Rutland counties.

39

Section 2 - Business Plan | Carinthia Group

The combined job creation is as follows for the two development schedules:

REGION
VT

yr 1
285

REST OF NO'EAST
rest of U.S.

44
49

ALL Development
yr 2
yr 3
440
111
66
72

21
25

During development there is a minimum of approximately $1.15 m of explicit equipment purchases for
the Carinthia Ski Lodge (office equipment, telephone systems, computer network and servers). For the
West Lake reservoir there is approximately $7.4 m of equipment purchases manufactured outside of
Vermont (Mount. Snow estimates that 50 percent of these manufactures will be sourced from the
northeast region, and the balance from Colorado, and Indiana). Vermonts wholesale distributors will
bring manufactured product in from out-of-state manufacturers, and the in-state distributors will earn their
15% mark-up. Therefore none of the manufactured content (pumps, pipes, air compressors, magic
carpets, refrigeration units etc.) is assumed to come from Vermont.

First two years of annual operations (years 3 and 4 chronologically) are associated with new visitor
spending of $4.976 m and $5.163 m respectively (in 2012 dollar basis). The estimate of total job
impacts in Year 2 is as follows:

IMPLANSector
413Eating&drinkingestablishments
329RetailGeneralMerchandise
407RecreationalCenters

Description
Meals&Beverages
Retail&ConvenienceStore
Skirental
Liftpasses&Tickets
WindsorCo.&3otherSo.VT
counties
elswhereinVermont
VermontregionalCenter

40

TotalJobImpacts
acrossallsectorsin
SouthernVT
YR2
54
8
92
154
1
155

Section 2 - Business Plan | Carinthia Group

Threshold test (104 investors x 10 eligible jobs = 1,040 full-time jobs): 1,040

SumforVTthrudevelopmentplusYR2
Operations
991
withrestofNortheast
1,122
withrestofNortheast&restofU.S.
1,267

See Economic Impact Report: Section 5 Exhibits for full EDR Report

INTENTIONALLY LEFT BLANK

41

Section 2 - Business Plan | Carinthia Group

USE OF PARTNERSHIP FUNDS

WEST LAKE PROJECT - LOANED FUNDS: $30,000,000
PURPOSE AND NEED FOR THE PROJECT
The purpose and need for the proposed West Lake Project is to build a new snowmaking water
storage and distribution source required by state and regulatory authorities and to provide Mount
Snow with capacity to meet all of their current and future snowmaking water supply needs.
Mount Snows primary water storage pond for snowmaking is Snow Lake, an 11-million gallon instream impoundment built in the 1960s. Snow Lake does not meet todays state and federal
requirements. Although it is grandfathered and Mount Snow is currently allowed to use it for
snowmaking, the State of Vermont requires Mount Snow to bring Snow Lake into compliance with
current environmental standards. The West Lake Project is the culmination of several years of
planning and will allow Mount Snow to eliminate Snow Lake, and bring its other two sources of
water for snowmaking into compliance with current rules and regulations for snowmaking ponds.
The development of West Lake will increase Mount Snows capacity to make and distribute snow
for skiing and snowboarding, to operate more snowmaking guns at once and open more trails
early in the season with increased snowmaking capability, to improve snow conditions throughout
the season, particularly after a thaw/freeze event, and to improve water quality through compliance
with state and federal guidelines and rules for minimum flows and storm water management.
The existing trail system at Mount Snow consists of 460 acres, of which approximately 359 acres
(or roughly 78%) of ski trails are covered by snowmaking.
Snowmaking is an essential part of making ski operations economically viable. Without it, resorts
in the East would have shorter seasons and fewer open trails in all but high snowfall years,
resulting in less than optimal conditions due to both inferior snow surfaces and skier congestion.
Snowmaking allows ski resorts to create a dependable base that can withstand skier traffic and
enables resorts to provide better snow conditions by re-surfacing trails after heavy use and/or
thaw/freeze events. In the competitive ski market, snowmaking is a necessary tool that allows
resorts to create favorable ski conditions and meet the high snow condition expectations of todays
recreational skier and snowboarder.
Currently, Mount Snow draws water for snowmaking from three ponds, totaling just 21.7 million
gallons of water storage. These ponds are drawn down and replenished several times over the
course of the winter. Based on historical records, these existing water storage facilities and water
sources provide 229 million gallons of water for snowmaking over the course of the winter season.
The industry standard is one million gallons of water for every acre of snowmaking. With 359
42

Section 2 - Business Plan | Carinthia Group

snowmaking acres, current water storage facilities fall short of industry standards. Consequently,
Mount Snow via its subsidiary West Lake Water Project, LLC proposes to construct a 120-million
gallon snowmaking reservoir to meet its current and future snowmaking needs. Water would be
supplied to the reservoir from an intake in Cold Brook.
The new proposed snowmaking system will provide sufficient water to meet Mount Snows
snowmaking demands for the foreseeable future, including all anticipated trail expansion.
Additionally, it will allow all water withdrawals from their current water supply sources to either be
eliminated or brought into compliance with current standards, and allow Mount Snow to come into
compliance with Vermont Agency of Natural Resources Snowmaking Rules.
PROJECT COMPONENTS
The major project component is the construction of a 120-million gallon water storage reservoir
covering approximately 12 acres. It will have a change in elevation of approximately 55 feet from
the bottom of the lake to the top of the berm. A dam will be constructed at the south end of the
lake. Additional components are:
An Intake and Withdrawal Structure Located in Cold Brook. An inflatable dam installed in the
brook will allow water to pool behind it. A Parshall flume installed in the brook will allow minimum
required stream flows in Cold Brook. When water levels are such that they exceed the minimum
flow, excess water will be fed via gravity to the West Lake pump house.
West Lake Pump House. The West Lake pump house, a 1764-square foot building located on
the West Lake parcel, will pump water from Cold Brook into West Lake and also pump water from
West Lake to Mount Snow for snowmaking. If conditions allow, it can also pump water directly
from Cold Brook to Mount Snow for snowmaking. The pump house will contain up to 10 pumps,
and at full capacity be able to pump 10,000 gallons per minute.

West Lake Pump House and intake

to Cold Brook

West Lake Pump House interior with up to 10 pumps

43

Section 2 - Business Plan | Carinthia Group

Carinthia Pump House. Water pumped from West Lake will be delivered to a new pump house
at the Carinthia base area. The Carinthia pump house will serve as a water distribution hub to
supply water to the snowmaking guns that cover the ski slopes. Carinthia Pump House,
approximately 4,000 square feet, also includes an attached snow garage, office space, restrooms,
loft space and staff lockers. To cope with the increased demand of expanded snowmaking, up to
10 pumps and associated infrastructure will be installed within this building.

Carinthia Pump House Floor Plan

Architect's Plan of Carinthia Pump House

Air Center Pump House. In a similar capacity as the Carinthia pump house, the new Air Center
will serve as an air and water distribution hub to the snowmaking guns which cover the ski slopes.
Located on the mountain, the approximately 3,500-square-foot Air Center will house air
compressors and booster pumps to distribute compressed air and water for snowmaking to all
areas of the mountain. To cope with the increased demand of expanded snowmaking, new air
compressors and pumps capable of meeting that demand will be installed within this building.

Interior of Air Center Pump House

Air Center Pump House site plan

44

Section 2 - Business Plan | Carinthia Group

Images of Pump House Equipment

Pipelines. A total of 28,500 feet of pipe, ranging in size from 24 to 48 in diameter, will be
installed to connect Cold Brook, West Lake and the pump houses.

Ski Lift. The project will also include a new Magic Carpet ski lift on the lower slope of the
Carinthia Ski Area (Ski Baba) to provide skier access to the Carinthia area.

Images of Similar Magic Carpet Ski Lift

Other Components. Additional components of the West Lake Project include the installation of
fire hydrants along the pipeline, trail improvements, up to 33,300 feet of pipe on the mountain to
improve and expand the delivery of water for snowmaking, and other mountain improvements.

45

Section 2 - Business Plan | Carinthia Group

Shaded trails (blue) depict proposed new snowmaking trails

46

Section 2 - Business Plan | Carinthia Group

PERMITTING STATUS
Federal, state and local permits are required to construct the West Lake Project. Mount Snow has
secured most of the permits required for construction; see below for the status of permits. No
money would be released by the Partnership for hard construction costs until the relevant permits
have been secured.
Federal An ACOE (Army Corps of Engineers) permit and a Notice of Decision from the US
Forest Service have been issued. See Appendix, Notice of Decision from U.S. Forest Service
State The State Act 250 permit for West Lake is pending and expected to be issued in 2014.
The following state permits have been issued: Dam Order, Conditional Use Determination/401
Water Quality Certification, Stormwater Discharge Permits, Construction Stormwater Permits, and
Flow Determination Letter.
Local Local zoning permits from the towns of Dover and Wilmington have been issued.

SOURCE AND APPLICATION OF FUNDS

The tables and narrative which follow summarize the use of loan funds by West Lake Water
Project, LLC and its projected revenues from snowmaking activities.
Highlights

Total Project Cost $38 million

$30 million loan from Carinthia Group 1 and 2 L.P. funded by subscription proceeds
received from EB-5 Investors
$8 million contributed by Resort Owner
Projected build time: 2 + years

Tables
1. Proceeds of Loan from Carinthia Group 1 and 2 LP funded by subscription proceeds
received from EB-5 Investors
2. Projected Direct Cost Summary
3. West Lake Development Schedule
4. Projected Income Statement: 10 years operations
5. Basis of Revenues; Snowmaking Water Usage Analysis and Assumptions:
6. Breakdown of Projected Electricity Consumption Costs

47

Section 2 - Business Plan | Carinthia Group

PROCEEDS OF LOAN FROM CARINTHIA GROUP 1 AND 2, L.P.

WEST LAKE WATER PROJECT, LLC: LOAN DEAL PRO-FORMA SOURCE AND USE OF FUNDS
See Risk Factors: Forward Looking Statements

LOAN PROCEEDS FROM CARINTHIA GROUP 1 AND 2 LP EB-5 INVESTORS

$30,000,000

USE OF FUNDS
Project Direct Build Cost per Schedule A

$24,000,000

Ancillary Costs
Costs of Road Closures related expenses, etc.

$150,000

General Infrastructure, Utilities, Common Areas, Rec. Areas, Parking

$500,000

Sub-total Ancilliary Items

$650,000

Arch & Eng, Design, Engineering

$1,104,000

Sub-total Ancilliary Items

$1,754,000

TOTAL BUILD COST

$25,754,000

Management Fees & Supervision

15%

Misc. General Administration Expenses

$3,863,100
$382,900

TOTAL EXPENDITURES OF FUNDS FROM PARTNERSHIP

$30,000,000

MOUNT SNOW CONTRIBUTION

Promoter Contribution to Project Costs

$3,000,000

Resort Enhancement Costs

$5,000,000

SUB-TOTAL

$8,000,000
$38,000,000

TOTAL ESTIMATED PROJECT COST

INTENTIONALLY LEFT BLANK

48

Section 2 - Business Plan | Carinthia Group

PROJECTED DIRECT COST SUMMARY

Schedule A
West Lake Project: Projected Direct Cost Summary - 6,000 GPM
Details

Projected Cost

Tranche 1

Tranche 2

Tranche 3

Mount Snow Scope

Initial set up costs, site preparation,
resort preparation, excavations and
related elements

$1,621,000

Torrent pumping equipment &

installation, snowmaking and snow
grooming equipment and accessories

$2,432,210

L1 carpet install incl. equipment and

installation, snowmaking and sno
grooming equipment and accessories

$417,522

$417,522

Carinthia pump houses incl. groundworks

and infrastructure

$1,208,533

$1,208,533

Air Center including ancillary equipment

$1,210,000

$1,210,000

On hill pipelines, trails and lift upgrade,

and relocation works

$1,594,153

$1,594,153

Ski Baba Magic Carpet Ski Lift including

all infrastructure, site clearance and prep.

$576,380

Misc. trail upgrades and site works to

facilitate new installations

$986,550

$1,621,000

$2,432,210

$576,380
$986,550

$10,046,348

$1,621,000

West Lake Storage incl. Site Prep, Ledge

and Blasting

$5,488,000

$5,488,000

Coldbrook Inflatable, Pumphouse & Refill

Piping and

$8,465,652

MS Subtotal

$2,202,435

$6,222,913

GC Scope

$8,465,652

PH to Carinthia Piping, road works,

substructures, piling and related costs
GC Subtotal

TOTAL TO FUNDS SUMMARY

$13,953,652

$5,488,000

$8,465,652

$24,000,000

$7,109,000

$10,668,087

$6,222,913

From Investor Funds Summary

Architects, Engineers

$1,104,000

General Infrastructure

$150,000

$201,174

$298,826

$1,254,450

$1,630,389

$978,261

-$350

$350

$0

$2,891,000

$1,831,913

$1,277,087

$10,000,000

$12,500,000

$7,500,000

Supervision Fee

$382,900

Misc. Admin. Expenses

Less, Mount Snow Contribution
Sub-total
GRAND TOTAL
Data provided by Mount Snow

49

Section 2 - Business Plan | Carinthia Group

WEST LAKE PROJECTED DEVELOPMENT SCHEDULE

Projected build dates are subject to change see Risk Factors Section 1 of PPM
S ta rt

End

Feb-15

Jul-17

Feb-15

Jan-15

Feb- 15

Apr- 15

Feb- 15

Apr- 15

Feb- 15

Jun- 15

Apr- 15

Jun- 15

Jul- 15

Aug- 15

Jun- 15

Nov- 15

Jun-15

Oct-16

Jun- 15

Jul- 15

Jul- 15

Aug- 15

Aug- 15

Nov- 15

Apr- 16

Sep- 16

Jun- 15

Jul- 15

Aug- 15

Oc t- 15

Apr- 16

Sep- 16

Jun- 16

Jul- 16

Apr- 16

Jul- 16

Jul- 16

Oc t- 16

Sep- 16

Nov- 16

Aug-16

Jul-17

Aug- 16

Nov- 16

Oct- 16

Jan- 17

Jul- 16

Oc t- 16

Oct- 16

Nov- 16

Jul- 16

Nov- 16

Apr- 17

Sep- 17

Apr- 17

Jun- 17

May- 17

Jun- 17

Jun- 17

Jul- 17

Fe b- 15

Ma y- 15

Jul- 15

O c t- 15

Ja n- 16

April- 16

Jul- 16

O c t- 16

Ja n- 17

Apr- 17

Jul- 17

The above Gantt chart depicts the projected hard construction schedule for the West Lake Project. Each development tranche
is further detailed in the summary of projected direct costs.
50

Section 2 - Business Plan | Carinthia Group

PROJECTED INCOME STATEMENT: WEST LAKE WATER PROJECT, LLC

WEST LAKE WATER PROJECT, LLC, SNOWMAKING RESERVOIR FUNDED BY EB-5 LOAN FUNDS $30,000,000
PROJECTED STATEMENT OF INCOME FROM OPERATIONS UPON BUILD COMPLETION
S e e R is k F a c t o rs : F o rwa rd Lo o k ing S t a t e m e nt s

Year 1
Revenues
Direct Costs
Snowmaking reporting (Nov-March, May)
Annual stormwater fees
Electric
Pumphouse road (driveway) maintenance
Pump maintenance (incl seals)
Pump oil
Heat (propane)
Annual NAA modeling
Survey after initial operations
Monitoring of stream changes
Annual dam inspection
Annual stormwater inspection
Labor
Cost of Sales
Expenses
Equipment rental
Motor Vehicle Expenses
General Supplies
Office Expenses
Utilities
Phone
Printing and Postage
Insurance
Property Taxes
Admin Salaries
Travel
Management Fees 15%

Year 2

Year 3

Year 4

Year 5

1,560,190

1,575,792

1,623,066

1,731,811

1,870,356

1,000
300
201,179
0
20,000
3,200
3,000
3,000
0
0
600
1,000
92,080

1,000
300
204,197
0
20,000
3,200
3,090
3,090
5,000
0
618
1,000
92,080

1,030
309
212,365
0
20,600
3,296
3,183
3,183
0
3,000
637
1,030
92,080

1,061
318
220,859
0
21,218
3,395
3,278
0
0
3,090
656
1,061
94,842

1,093
328
229,693
0
21,855
3,497
3,377
0
0
0
675
1,093
97,688

325,359

5,000
24,000
6,536
12,000
24,000
6,000
3,000
25,750
8,000
46,000
6,000
234,029

333,575

5,000
24,200
6,732
12,360
24,720
6,180
3,000
25,750
8,240
46,040
6,180
236,369

340,711

5,000
24,926
6,934
12,731
25,462
6,365
3,000
26,523
8,487
46,040
6,365
243,460

349,778

5,000
25,674
7,142
13,113
26,225
6,556
3,000
27,318
8,742
46,040
6,556
259,772

359,298

5,000
26,444
7,356
13,506
27,012
6,753
3,000
28,138
9,004
46,040
6,753
280,553

Total Expenses

400,314

404,770

415,292

435,138

459,559

Total Operating Costs

725,673

738,345

756,003

784,916

818,857

Net Operating Income before Interest

834,517

837,447

867,062

950,828

1,051,499

Loan Interest
Principal Loan Amt: $30,000,000

300,000

300,000

300,000

300,000

300,000

Net Income before Taxes & Depn.

534,517

537,447

567,062

650,828

751,499

Highlights:
West Lake Water Project, LLC, via its reservoir water storage facilities, dam, pumps and pipes is
designed to distribute water to the Mount Snow Ski Resort for all of its planned snowmaking
needs as well as monitoring the environmental impacts from water withdrawal and
replenishment. Mount Snow will pay for the supply and services via a metered water
measurement system. The meters utilize very reliable odometer technology and are factory
calibrated to exacting standards prior to being shipped. Water flows through the meter and
records the volume of water that has passed through the meter; meters do not record any level of
51

Section 2 - Business Plan | Carinthia Group

consumption unless water is flowing through them. Vermont Department of Environmental

Conservation laws require that detailed reports and analysis be submitted that demonstrate items
such as water usage, stream flow, water withdrawal and conservation flow requirements. As such
snowmaking water consumption will be metered by a master meter. Point of use meters may
also be required for compliance.
West Lake Water Project, LLC will strive for rates that are equitable and easy to understand. A
cost of service study may be completed periodically by West Lake Water Project, LLC to
determine if revenues are sufficient to cover all costs. As the business operates, historic cost and
usage data will be used as a basis. These studies look out over a period of three to five years
comparing both costs and revenues.
Amongst other things, the usage charge includes a portion of the repair and replacement costs
for pipes, pumps, and all equipment required to supply, deliver and monitor water for
snowmaking. It also includes the services, supplies, equipment and labor required to produce
and store snowmaking water, such as power and maintenance of water pumping, and storage
facilities.

INTENTIONALLY LEFT BLANK

52

Section 2 - Business Plan | Carinthia Group

BASIS OF REVENUES; SNOWMAKING WATER USAGE ANALYSIS AND ASSUMPTIONS

W EST LAKE W AT ER PROJECT , LLC. SNOW MAKING RESERVOIR FUNDED BY EB-5 LOAN FUNDS $30,000,000
PROJECTED WATER USAGE GENERATED: ASSUMPTIONS AND STATEMENT OF ANNUAL INCOME FROM OPERATIONS

S e e R is k F a c t o rs : F o rwa rd Lo o k ing S t a t e m e nt s

T EMPORARY SNOW MAKING ACT IVIT IES: 79% COVERAGE

S ourc e

2 0 11- 12
Conse rva tion
Dra ina ge Are a
Flow
Da te Withdra wa ls Da te Withdra wa ls
(mi 2 )
Re quire me nt
Comme nc e d
Ende d

Oct

Nov

De c

Ja n

Fe b

Ma r

S e a son

Usa ble S tora ge

Ca pa c ity (million
ga llons)
Re se rvoir

0.42

41.65

53.47

23.37

118.91

11.0

31.50

27.64

19.06

7.2

85.40

14.6

5.85

22.38

13.73

6.09

42.2

3.0

14.07

0.42

95.53

94.84

48.52

7.2

246.51

28.6

10 . 2 4

0.11

25.39

25.21

12.90

1.91

65.53

0.53

12 0 . 9 2

12 0 . 0 5

6 1. 4 2

9 . 11

3 12 . 0 4

12 0 . 0 0

2.60

$2,658.23

$604,620.25

$ 6 0 0 , 2 5 3 . 16

$307,088.61

North Branc h (Snow

Lake)

2.64

0.15 csm

11/30/2011

Cold Brook (Mirror

Lake)

3.35

0.58 c sm

12/02/2011

03/12/2012

Carinthia Pond

0.18

0.5 c sm

12/01/2011

02/20/2012

02/20/2012

TO TALS

Add: inc reased usage to make resort 100% snowmaking

Re - Use
Fa c tor
Multiple

10.81

NEW P ERMANENT S NO WMAKING ACTIV ITIES : 10 0 % CO V ERAG E

WES T LAKE
P RO JECTED REV ENUES : Usa ge ra te = $ 5 , 0 0 0 pe r million ga llons or pa rt he re of

$45,569.62

$ 1, 5 6 0 , 18 9 . 8 7

Re sort P ropose d Ne w Expa nsion Are a S nowma king e st. 11%

0.06

13.30

13.21

6.76

1.00

34.32

12 0 . 0 0

0.29

TO TAL G ALLO NAG E REQ UIRED FO R EX P ANDED RES O RT

0.59

13 4 . 2 3

13 3 . 2 6

6 8 . 17

10 . 12

346.36

12 0 . 0

2.89

$2,950.63

$ 6 7 1, 12 8 . 4 8

$ 6 6 6 , 2 8 1. 0 1

$340,868.35

$50,582.28

$ 1, 7 3 1, 8 10 . 7 6

P RO JECTED G RO S S REV ENUES : Usa ge ra te = $ 5 , 0 0 0 pe r million ga llons or pa rt he re of

INTENTIONALLY LEFT BLANK

53

Section 2 - Business Plan | Carinthia Group

WEST LAKE PROJECTED ENERGY CONSUMPTION

WEST LAKE PROJECTED ENERGY CONSUMPTION
ON PEAK
Regular
0.09159

12.81

ON PEAK
KWH

Demand

Dollars

Regular

Demand

0.06796

3.31

OFF PEAK

Regular
Month

OFF PEAK

Demand

KW

Regular

Dollars

KWH

Demand

Dollars

KW

Dollars

May

200

$18.32

200

$2,562.00

200

$13.59

200

$662.00

Jun

200

$18.32

200

$2,562.00

200

$13.59

200

$662.00

Jul

200

$18.32

200

$2,562.00

200

$13.59

200

$662.00

Aug

200

$18.32

200

$2,562.00

200

$13.59

200

$662.00

Sep

200

$18.32

200

$2,562.00

200

$13.59

200

$662.00

Oct

200

$18.32

200

$2,562.00

200

$13.59

200

$662.00

Nov

96,864

$8,871.76

200

$2,562.00

96,864

$6,582.87

1,860

$6,156.60

Dec

298,664

$27,354.60

200

$2,562.00

298,664

$20,297.18

1,860

$6,156.60

Jan

298,664

$27,354.60

200

$2,562.00

298,664

$20,297.18

1,860

$6,156.60

Feb

113,008

$10,350.39

200

$2,562.00

113,008

$7,680.01

1,860

$6,156.60

Mar

200

$18.32

200

$2,562.00

200

$13.59

3,200

$10,592.00

Apr

200

$18.32

200

$2,562.00

200

$13.59

665

$2,201.15

TOTAL

808,800

$74,077.91

2,400

$30,744.00

808,800

$54,965.98

12,505

$41,391.55

TOTAL

$201,179

INTENTIONALLY LEFT BLANK

END OF WEST LAKE PROJECT SECTION

54

Section 2 - Business Plan | Carinthia Group

CARINTHIA SKI LODGE PROJECT - LOANED FUNDS: $22,000,000

Carinthia Ski Lodge (aka BUILDING B) Approximately 36,000 Sq. ft.

PURPOSE AND NEED FOR THE PROJECT

All quality resort facilities have a central commercial zone at their core. From this nucleus,
varying amenities and recreational facilities emanate. At Mount Snow, the construction of a new
approximately 36,000 square foot ski lodge at the Carinthia Base Area will serve to strengthen
and expand the core at Carinthia. The new ski lodge will be a support building for day and
overnight guests alike and will include food and beverage outlets, a retail and convenience store,
ski rental shop, skier services, lift ticket and ski school sales, and entertainment areas for their
needs. The lodge will also provide additional dining space. A restaurant seat analysis is provided
below. In addition, an expanded parking lot, which corrects existing stormwater and
environmental deficiencies, will be developed.
The new ski lodge will be the main guest services hub for future planned extensive upscale hotel
accommodations and recreational facilities which are to be built at the Carinthia Base Area as
part of the MSMP. There is sufficient vacant land in the Carinthia Base Area for development and

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Section 2 - Business Plan | Carinthia Group

construction of an appropriately sized base lodge as well as development and construction of the
future accommodations.
The Carinthia Base Area has undergone a significant change in the past few years. In 2008,
Carinthia was designated to be a dedicated terrain park making it the largest terrain park and the
only one of its kind in the Northeast. The future development of the Carinthia Base Area will
enhance the overall Mount Snow resort experience.
NEED FOR NEW SEATING - RESTAURANT SEAT ANALYSIS
An industry standard for determining capacity at a ski area is Comfortable Carrying Capacity
(CCC). CCC is defined as a level of utilization for a given resort that provides a pleasant
recreational experience, without overburdening the resort infrastructure. CCC does not indicate a
maximum level of visitation, but rather the number of visitors that can be comfortably
accommodated on a daily basis. Related skier service facilities, including base lodge seating and
restaurant requirements, are planned around this number. Mount Snows CCC is 10,370 visitors.
Mount Snow Resort is serviced by three on-mountain food service facilities including one large
facility, the Main Base Lodge, which includes six food service outlets. Additional food service
facilities include the Sundance Base Lodge and the Summit Lodge. An inventory of the available
seating was prepared from data collected on site and is presented in Table 1 below.

Building
Main Base Lodge
Sundance Base
Lodge
Summit Lodge
Totals

Number of
Seats

Number
of Turns

3,261

439
200
3,900

2
2

Number of
Skiers
Served
6,522
878
400
7,800

Mount Snow has 3,900 indoor seats that can be used by skiers over the lunch period. The
capacity of food service establishments to provide lunch and other snacks to skiers is calculated
by assuming an average turnover of 2.0 skiers per seat on any given day. Based on these
assumptions, the existing restaurants and food outlets at Mount Snow can accommodate up to
7,800 skiers, short of the mountains Comfortable Carrying Capacity (CCC) of 10,370.
In line with the National Ski Areas Association Kottke National End of Season Survey,
approximately 26% of skier visits to Mount Snow are snowboarders, many of whom frequent the
Carinthia Base Area and its dedicated terrain parks. While some of the snowboarders use other
mountain areas, a similar portion of skiers utilize the freestyle areas at Carinthia. It is estimated
that Carinthia captures 22% of snowboarder and skier visits which equates to 2,281 of the CCC.

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Section 2 - Business Plan | Carinthia Group

The new Carinthia Ski Lodge will add an additional 619 seats. By assuming an average turnover
of 2.0 skiers per seat, it is estimated overall that the Carinthia Ski Lodge will have a theoretic
capacity to provide lunch service for 1,238 guests. This will greatly improve the overcrowding
that exists in the two base lodges and summit lodge today and provide a much better resort
experience.

CARINTHIA SKI LODGE (BUILDING B) PROJECT MAP

CARINTHIA SKI LODGE BUILDING SUMMARY

Floor 1: 15,590 sq. ft
Floor 2: 10,885 sq. ft.
Floor 3:
9,600 sq. ft
TOTAL: 35,875 sq. ft
Note: Figures are approximate and subject to change upon actual build.

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Carinthia Ski Lodge: Floor 1

Floor 1 features a main entrance hall, retail store, convenience store, bakery, infirmary, ski lockers,
bag check services, extensive restroom facilities, ski rentals, ski school and skier services, ticket
sales and lift passes, freezer and cold storage, offices and mechanical room.

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Carinthia Ski Lodge: Floor 2

Floor 2 features a full service cafeteria with serving stations, caf/coffee lounge, bar, full service
kitchen and food storage facilities, 272 seats.

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Carinthia Ski Lodge: Floor 3

Floor 3 features a full service restaurant, bar and lounge, pizza shop, youth room for video
games etc., 347 seats.
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PERMITTING STATUS
In July 2011 the Vermont Act 250 Commission issued Partial Findings of Fact for the MSMP,
which approved certain aspects of the master plan project including the total number of units and
the design concept. Specifically, the approval includes the development in concept of up to 150
units at Carinthia and the Carinthia Ski Lodge.
State and local permits are required for construction of the Carinthia Ski Lodge. Some ancillary
permit applications, such as the potable water and storm water applications, have been
submitted and are currently under review. It is expected that the State Act 250 permit application
and the Dover local zoning permit application will be submitted in the first quarter of 2014. The
permitting process for those permits will take approximately 4-6 months. No money will be
released by the Partnership for hard construction costs until the relevant permits have been
secured.

SOURCE AND APPLICATION OF FUNDS

The tables and narrative which follows summarize the use of loan funds by Carinthia Ski Lodge
LLC and projected revenues from business operations.
Highlights

Total Project Cost $28 million

$22 million loan from Carinthia Group 1 and 2 L.P. funded by subscription proceeds
received from EB-5 Investors
$6 million contributed by Resort Owner
Projected build time: 2 years

Tables
1. Proceeds of Loan from Carinthia Group 1 and 2 L.P. funded by subscription proceeds
received from EB-5 Investors
2. Projected Direct Cost Summary detail and timelines
3. Projected Income Statement: 10 years operations
4. Basis of Revenues Assumptions

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PROCEEDS OF LOAN FROM CARINTHIA GROUP 1 AND 2, L.P.

CARINTHIA SKI LODGE LLC: LOAN DEAL PRO-FORMA SOURCE AND USE OF FUNDS
See Risk Factors: Forward Looking Statements

LOAN PROCEEDS FROM CARINTHIA GROUP 1 AND 2 LP EB-5 INVESTORS

$22,000,000

USE OF FUNDS
CARINTHIA SKIER LODGE & SERVICES
Ski Lodge Direct Costs (See Schedule B)

$14,602,000

Ancillary Costs
Project Start-up Costs, site office, equipment, admin,

$150,000

Parking Area "E" Infrastructure, Fire Hydrants, Utilities, Common Areas, Access roads, Landscaping

$1,919,707

Sub-total

$2,069,707

Arch & Eng, Design, Engineering

$2,117,175

Sub-total Ancilliary Items

$4,186,882

TOTAL BUILD COST

$18,788,882

Management Fees & Supervision

15%

SUB-TOTAL

$2,818,332
$21,607,214

Misc. General Administration Expenses

$392,786

TOTAL EXPENDITURES OF FUNDS FROM PARTNERSHIP

$22,000,000

MOUNT SNOW CONTRIBUTION (PROVISIONAL)

LAND AND RELATED GROUNDWORKS COSTS

$500,000

Promoter Project Project Costs

$2,000,000

Resort Impacts

$3,500,000

SUB-TOTAL

$6,000,000
$28,000,000

TOTAL ESTIMATED PROJECT COST

Data provided by Mount Snow

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PROJECTED DIRECT COST SUMMARY

Schedule B

S e e Risk Fa c tors: Forwa rd Looking S ta te me nts

Carinthia Ski Lodge also known as Building "B" on plans, is a three-story skier services building that includes locker rooms, restrooms, ski rental area,
ticketing area, infirmary, two levels of dining, two levels of lounges, servery, youth dining area, kitchen and bakery facilities, retail, convenience store and an
exterior deck facing ski slopes.

Carinthia Ski Lodge Project - Build size approx. 36,000 sq. ft.
Estimated Projected New
Cost
DEW of Burlington, VT : Main
Contractor

Year 1

Year 2

Year 1

Year 2

Initial Set up Costs, etc.

100%

0% $

80%

20% $

662,838

Foundations

90%

10% $

Core & Shell

20%

80% $

Building Weathertight

0%

100% $

Walkways Exterior works, etc.

0%

100% $

Fit-up

0%

100% $

Building Sitework

$828,547

Contingency
Subtotal

9,142,707.00

Subtotal

9,971,254.00

22%

165,709

78% $

2,011,395.54

7,131,311.46

2,674,233.54

7,297,020.46

100% $

595,968

331,520

Upgraded Design and Buildouts

595,968

Sewer Hookup fees and related costs

331,520

Water Storage, build and

infrastructure related costs

757,500

50%

50% $

378,750

378,750

Electrical Transformers upgrade and

relocation and related costs

853,660

50%

50% $

426,830

426,830

0%

100%

Lighting (walkways, fire lanes, etc.)

1,155,000

1,155,000

Fixtures & Equipment & Supplies

536,175

0%

100%

536,175

Office Equipmt, Phone, Networks,

Terminals and related items

400,500

0%

100%

400,500

Contingency

423

GC Subtotal

4,630,746

423

100%
$

805,580

3,825,166

GRAND T OT AL

14,602,000.12

3,479,813.54

11,122,186.58

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PROJECTED INCOME STATEMENT: CARINTHIA SKI LODGE, LLC

CARINT HIA SKI LODGE, LLC, 36,000 approx. sq. ft. FUNDED BY EB-5 LOAN FUNDS $22,000,000
P RO JECTED S TATEMENT O F INCO ME FRO M O P ERATIO NS UP O N BUILD CO MP LETIO N AND O CCUP ANCY
S e e Risk Fa c tors: Forwa rd Looking S ta te me nts

Assumptions: See Schedule A

Year 1

Year 2

Year 3

Year 4

Year 5

Gross Revenues
Restaurant & Bars
Events & Banquets
Sub-total Food and Beverage
Rental & Convenience Store
Ski Rentals and Service
Ski Passes and Tickets

1,776,696
500,000
2,276,696
552,345
257,559
1,890,000

1,829,997
515,000
2,344,997
568,915
265,286
1,984,500

1,884,897
530,450
2,415,347
585,983
273,244
2,123,415

1,941,444
546,364
2,487,807
673,880
314,231
2,441,927

1,999,687
562,754
2,562,441
694,097
323,658
2,515,185

Total Sales

4,976,600

5,163,698

5,397,989

5,917,846

6,095,381

674,759
375,595
38,634
18,900
1,043,343

695,002
386,863
39,793
19,845
1,074,643

715,852
398,469
40,987
21,234
1,106,883

737,327
458,239
47,135
24,419
1,217,571

759,447
471,986
48,549
25,152
1,254,098

Cost of Goods
Food & Beverage
Rental & Convenience Store
Ski Rentals and Service
Ski Passes and Tickets
Labor
Cost of Sales
Gross Profit

2,151,231

2,216,146

2,283,424

2,484,691

2,559,232

2,825,369

2,947,552

3,114,565

3,433,154

3,536,149

50,000
22,767
3,600
124,415
5,000
24,000
56,507
24,000
48,000
35,100
45,000
12,000
120,000
15,000
18,000
75,000
45,000
72,000
90,909
15,000
746,490

50,000
23,450
3,600
129,092
5,000
24,720
58,202
24,000
48,000
35,100
45,000
12,000
123,600
15,000
18,000
75,000
45,000
72,000
93,636
15,000
774,555

50,000
24,154
3,600
134,950
5,000
25,462
59,948
24,000
48,000
35,100
45,000
12,000
127,308
15,000
18,000
75,000
45,000
72,000
96,445
15,000
809,698

75,000
24,878
3,600
147,946
5,000
26,225
61,747
30,000
60,000
42,120
45,000
15,000
131,127
15,000
24,000
84,000
45,000
72,000
99,339
15,000
887,677

75,000
25,624
3,600
152,384
5,000
27,012
63,599
30,000
60,000
42,120
45,000
15,000
135,061
15,000
24,000
96,000
45,000
72,000
102,319
15,000
914,307

Total Expenses

1,647,788
33.11%

1,689,955
32.73%

1,740,665
32.25%

1,909,659
32.27%

1,963,027
32.21%

Net Operating Income before Interest

1,177,581

1,257,597

1,373,900

1,523,496

1,573,122

Expenses
Advertising
Brochures
Bank Charges
Credit Card Charges
Licenses & Permits
Equipment rental
Repairs & Maint.
General Supplies
Office Expenses
Uniforms & Laundry
Utilities
Phone
Power and Propane
Internet Services
Printing and Postage
Marketing
Insurance
Property Taxes
Admin Salaries
Travel & Entertain.
Management Fees 15%

Loan Interest

220,000

220,000

220,000

220,000

220,000

Net Income before Taxes & Depn.

957,581
19.24%

1,037,597
20.09%

1,153,900
21.38%

1,303,496
22.03%

1,353,122
22.20%

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PROJECTED INCOME STATEMENT SCHEDULE A ASSUMPTIONS AND BASIS OF DATA

Employee average wage is based upon an average wage rate of $11 per hour, 35 hour
week, plus employer contributions and benefits.

Expenses fixed and variable are based upon extracts and proration of date from Mount
Snow resort operations over past 3 seasons (2009-10, 2010-11, 2011-12)

During years 1 through 3 of operations, revenues are projected to increase along with
Consumer Price Index and resort enhancement factors to a stabilized growth pattern. Year
4 contemplates increased revenues arising from planned new hotel residential
development in the Carinthia Base Area.

Other assumptions are derived from the table below. (Also see Restaurant Seat Analysis
above.)

Schedule A

See R isk F act o r s: F o r war d Lo o ki ng St at ement s

CARINT HIA SKI LODGE, LLC

Building Size, Occupancies and Operator's assumptions based upon comparable operations elsewhere at Mount Snow Resort

Net Bu ild in g Area S ales/S F

Ground Floor

S F or seats

Reven u e

Assu m p tion s

15,490
Retail

300

1630

Convenience

123

515

$489,000 Sales/SF based on Backside

$63,345 Sales/SF based on food products only at GS Deli
Based on units x 4/unit x 121 days x 51% occupancy (taken from previous
calcs) x 7% rentals (based on clocktower rentals) x $40 per rental plus
day skier rentals calculated by 50 we/holidays x 4000 skier visits x 20%
$232,559 at Carinthia (based on car counts + 4%) x 3% rentals x $30

Rentals
Ski Services

$25,000 50 days x 5/day x $100

Vending

$10,000 AT Ms, games, lockers

T ticket Sales
Middle Floor

$1,890,000 Increase of 20% over 2010-11 sales at Carinthia Area T errain Park
10,885

Cafeteria

$859,196 Car. Revenue x increase in seats x 25%

Bar

$75,000

Caf

$100,000

Upper Floor

9,600
Rest. Lunch

$248,000 124 seats x 2 turns x 50 days x $20 check

Rest. Dinner

$279,000 124 seats x 1.5 turns x 50 days x $30 check

Bar
Summer

$205,500 137 seats x 2 turns x 50 days x $15 check

1,273

Banquets, special events

$500,000

Entrance Areas
T OT AL

37,248

$4,976,600

Data p rovid ed b y M ou n t S n ow

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END OF CARINTHIA SKI LODGE SECTION

MOUNT SNOW
LOCATION
Mount Snow is a premier four season resort located in the Green
Mountains of southern Vermont in West Dover. Mount Snow is the
closest major resort to eastern metropolitan centers, just 4 hours
from New York City and 2 hours or less from Boston, Hartford
and Albany. In fact, Mount Snow is located within 4 hours drive of
over 30 million people.
HISTORY
Although Carinthia Group 1 and 2, L.P. West Lake Water Project,
LLC and Carinthia Ski Lodge, LLC are newly formed entities, Mount Snow Resort has been a
successful, largely winter resort for almost 60 years and is one of the leading ski resorts in
eastern North America.
The history of Mount Snow is a long and storied one. Founded in 1954 by ski visionary Walter
Schoenknecht (who was inducted into the Ski Hall of Fame), Mount Snow has always been at
the forefront of the industry. In the late 1950s, long before it became common, Mount Snow was
the first eastern resort to feature a heated outdoor swimming pool open year-round and an indoor
skating rink. In 1964, Mount Snow installed the first skis-on gondola. Mount Snow was also one
of the early resorts to install snowmaking on its trails. Snow Lake, located at the base of the
mountain, was dug out and not only stored water for snowmaking, but was used for summer
recreation. Snow Lake Lodge was built on the edge of the lake offering winter and summer
accommodations.
During the period from 1970-1990, Mount Snow
expanded its trail network through the development
of the Sunbrook Area on the back side of the
mountain and the acquisition of neighboring
Carinthia Ski Area. Snowmaking increased from
7% to 78% of the mountain.
The 1990s saw a flurry of activity. Mount Snow
opened Un Blanco Gulch, the first snowboard park
in the East. The 200-room Grand Summit Resort Hotel and Conference Center was built,
offering ski-on ski-off accommodations and conference facilities for up to 875 guests. More than
$5 million was invested in the Discovery Center, a new facility designed to introduce beginners to
skiing and snowboarding.
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In 2007 Mount Snow was purchased by Peak Resorts Inc. Peak Resorts has invested significant
capital into the resort, including the installation of energy efficient snowmaking fan guns, the
largest fleet of high-tech fan guns in North America.
In 2008, all of Carinthia was converted to terrain parks,
the most freestyle terrain in the East. Carinthia Park
received the 2012 Visitors Choice awards from
onthesnow.com for the best park and pipe in the
Northeast. It was recently voted the top terrain park on
the East coast in both Transworld Snowboarding and
SKI magazines for the 2013-14 season, and Freeskier
magazine selected it as one of the top ten terrain parks
in North America.
Over the past decade Mount Snow has hosted numerous national and international events and
competitions attracting many tens of thousands of competitors and spectators. Major
competitions include events such as the ESPN Winter X Games and Dew Tour, which in 2009
drew a signature pro field including Olympic gold medalists Shaun White, Hannah Teter, and
Mount Snows own Kelly Clark. Additionally Mount Snow has hosted the USA cycling mountain
bike national championships and the New England Tough
Mudder adventure challenge series.
Today Mount Snow continues to be a leader in the resort
industry. The resort covers an area of 2,451 acres (over 3
square miles) spread over four mountain areas and
welcomes on average 430,000 winter guests each year. In
addition to skiing and snowboarding, winter activities at the
resort include snow tubing, snowshoeing and snowmobile
tours. Cross-country skiing and sleigh rides are offered nearby. The Grand Summit Hotel
features a full-service spa, restaurant and bar open to the public. Summer activities include
mountain and road biking, golf at the 18-hole Mount Snow Golf
Club, hiking, fishing and a full schedule of festivals and events.
Mount Snows year-round conference and banquet facilities
cater to groups, conferences and wedding parties looking to
get away to a mountain resort setting.
Mount Snows commitment is to provide the best experience
possible for their guests and visitors by investing into the
resort each year in capital improvements and state of the art
technology. The resort will continue to develop as a year-round, all-season destination so that
economic viability is strengthened and job creation throughout the region prospers from this 4season economic structure. While the winter ski product remains Mount Snows primary focus,

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spring, summer and fall events and conferences will continue to be an important business
function.
MARKET REVIEW
The momentum that Mount Snow is creating is in large part
due to the fact that Mount Snow has been true to their brand
and has a good understanding of their core market and how
to reach them.
Mount Snows location in southern Vermont puts the resort
within an easy drive from more than 30 million people.
Based on the latest surveys, the largest percentage (41%)
of Mount Snows guests come from the New York City
metropolitan area, which consists of the largest city in the U.S. (New York City); counties
comprising Long Island and the lower Hudson Valley in New York State; the six largest cities in
New Jersey; and six of the seven largest cities in Connecticut including Fairfield County. The
Boston and New Haven/Hartford areas each draw 15%. Mount Snow
guests are affluent, with 59% having household incomes of greater
than $100,000, and of those, 14% have incomes of greater than
$250,000.
Most of Mount Snows guests (75%) are overnight visitors. On
average, they spend 3.3 nights in the area, although during holiday
periods they come for longer stays. Almost half of Mount Snows
guests are here with their families. Many are multi-generational,
having come with their parents when they were children, they now
are returning with their own children.
Mount Snows strengths allow it to capitalize on its
core market. Those strengths include proximity to
the market, which is especially beneficial in a weak
economy; superior snowmaking and grooming;
variety of terrain for all ability levels; strong reputation
for parks and pipes; exceptional childrens programs;
strong aprs-ski music scene; respect for ownership;
large capital investments in lifts and snowmaking;
and customer loyalty. These attributes all contribute
to the Mount Snow brand and make Mount Snow one
of the most popular resorts in the East.

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MARKETING STRATEGIES
Mount Snows marketing plan incorporates a variety of outlets ranging from the traditional to the
latest in social media. More traditional marketing includes print advertising, radio and TV
advertising, outdoor billboards and direct mail. Mount Snow is also promoted extensively on the

Grand Summit Hotel and Conference Center, Mount Snow

internet though on-line advertising, web banners, travel sites such as travelzoo and expedia.
Mount Snows own extensive interactive web site (mountsnow.com) allows guests to book lift
tickets, ski lessons and lodging directly on-line. Marketing through social media includes the use
of Facebook, Twitter, YouTube, Foursquare, Instagram, Vimeo and Google+.
The group sales department has marketing programs in place directed at attracting groups such
as religious organizations, social clubs, corporate entities, schools, civic organizations and
military personnel. Mount Snow believes that these group discounts encourage new participants
to try snow sports. Sales strategies include attending travel shows and expositions and working
with travel wholesalers.
Mount Snow also maximizes awareness through special
events and promotions at ski shops and restaurants in
southern New England and New York. TV and radio
media are invited to cover special events and broadcast
live from the resort. Past TV broadcasts have included the
ESPN Winter X Games and the DEW Winter Tour,
bringing Mount Snow into the homes of millions of viewers.

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COMPETITION
Mount Snows competition comes primarily from other ski resorts in southern and central
Vermont, namely Stratton and Okemo. All three resorts have good snowmaking systems,
although Mount Snow has a competitive advantage because by using fan gun technology
snowmaking is more efficient and productive during marginal temperatures. Stratton and
especially Okemo, because of their location slightly north, sometimes get more snow than Mount
Snow. All three mountains are similar in size.
Stratton and Okemo have extensive on-mountain
accommodations while Mount Snows are limited. On the
other hand, because of Mount Snows location near two
Vermont villages, Mount Snow visitors have many more
choices when it comes to restaurants and shopping.

West Dover Village at Mount Snow

From a pricing standpoint, Stratton is the most expensive of

the three resorts to visit and it is expected they will remain so
followed by Okemo, who have a similar though slightly lower
pricing structure. Mount Snows pricing is similar to but more

competitive than that of Okemo.

In summary, Okemo has a positive reputation, a strong family market, has built a strong
reputation for snowmaking/grooming, yet lacks personality. Stratton charges a premium, has
moderate crowds, and is perceived as being pricey and a bit pretentious.
REVENUE
The bulk of Mount Snows revenue (79%) comes from Resort
Operations, defined as revenue from skier services and
mountain operations. The second highest contributor to
revenue is lodging, which is revenue from lodging and
conference facilities. Resort operations and lodging revenue
combined make up 96% of Mount Snows total revenue. The
remainder of revenue comes from golf operations and real
estate sales commissions. From 2008 to 2013, Mount
Snows total revenue grew 14.3%.

RESORT OPERATIONS REVENUE

Season pass and lift ticket sales make up the majority of Mount Snows resort revenues. Of
Mount Snows total resort revenue, 58% comes from ticket or season pass sales and of that,
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27% is from season pass sales. Season pass sales are an important revenue stream because
they represent loyal Mount Snow customers who commit prior to the start of the ski season.
From 2007 to 2013, pass and ticket revenues have increased 11.4%.
The remainder of Mount Snow resort revenue comes from skier services. The table below shows
the percentage of resort revenue and growth from 2008 to 2013 for Mount Snows highest resort
revenue contributors.

RESORTOPERATIONSREVENUE
LiftTicketandSeasonPass
FoodandBeverage
SkiSchoolandCompetitions
Retail
RentalEquipmentandRepair
TotalResortOperationsRevenue

%ofTotal
Resort
Revenue
58%
14%
12%
9%
4%

Increaseinrevenues
from2008to2011
11%
30%
28%
12%
8%
16%

SEASONALITY
Ski resort operations are highly seasonal in nature. Mount Snows typical ski season begins in
mid-November and runs through early April. In an effort to partially counterbalance the
concentration of revenue during the winter months, Mount Snow offers non-ski attractions, such
as golf, scenic lift rides, hiking and mountain biking, but these activities do not comprise a
substantial portion of annual revenues.
Important Note: Market data and certain industry forecasts used herein were obtained from
Mount Snow and Peak Resort internal surveys, market research, and publicly available
information and industry publications. While Mount Snow and Peak Resorts believe that the
market research, publicly available information and industry publications they use are reliable,
they have not independently verified market and industry data from third-party sources.
Moreover, while Mount Snow and Peak Resorts believe their internal surveys are reliable, they
have not been verified by any independent source.

INTENTIONALLY LEFT BLANK

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MOUNT SNOW RESORT MANAGEMENT TEAM

PEAK RESORTS MANAGEMENT TEAM

INTENTIONALLY LEFT BLANK

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THE SKI INDUSTRY

The United States ski market represented approximately 56.9 million skier visits in the 2012/2013
ski season, the largest year-over-year percentage gain (up 11.7%) and absolute gain (up 5.9
million) in 30 years. The National Ski Areas Association Kottke National End of Season Survey
reported that there were 478 ski areas operating during the 2012/2013 ski season in the United
States. Given the consistency and strength of annual skier visits over a substantial time period
and the recovering economy, Peak Resorts believe that participation will remain strong in the
coming seasons.
As noted above, an important measure of ski resort industry performance is the skier visit. The
United States achieved approximately 56.90 million skier visits during the 2012/2013 ski season.
The three years with the highest number of skier visits in the United States have occurred in the
past six completed ski seasons. The Northeast region increased 21.0% over the previous year,
and exceeded its 10-season average. The chart below illustrates the number of skier visits to
U.S. ski resorts, industry-wide, during the past ten completed ski seasons.

Skiersinmillions

TotalU.S.SkiResortVisits(millions)

57.1

60.5

58.9

59.8

60.5

57.4

56.9

56.9

55.1
51.0

03/04

04/05

05/06

06/07

07/08

08/09

09/10

INTENTIONALLY LEFT BLANK

73

10/11

11/12

12/13

Average
57.4

Section 2 - Business Plan | Carinthia Group

The following chart shows the aggregate number of skier visits to Peak Resorts 13 ski areas
during the past seven completed ski seasons. Mount Snow is the largest of these resorts, with
some 430,000 annual average skier visits.

SkiersinMillions

PeakResortsTotalSkierVisits(millions)
1.63

1.54

1.67

1.75

1.35

06/07

1.69
1.35

07/08

08/09

09/10

10/11

11/12

Average
1.57

12/13

The Kottke National End of Season Survey also reported that, similar to the prior three seasons,
snowboarders make up 29.5% of overall skier visits nationally and approximately 26% of overall
skier visits in the Northeast.
The ski industry divides ski areas into three distinct categories: overnight fly destination ski areas,
overnight drive ski areas and day ski areas. Overnight fly destination ski areas are defined as ski
areas which primarily serve skiers who fly or drive considerable distances and stay for multiple
nights. Overnight drive ski areas are ski areas which primarily serve skiers from the regional drive
market who stay overnight. Day ski areas are those ski areas at which overnight, dining and
after-ski facilities are limited, since the areas primarily serve a day skier market.
Overnight fly destination ski areas are generally situated in or amidst major mountainous areas
and are typically large facilities. These resorts depend, in large part, on long-distance travel by
their visitors and on the development of adjacent real estate for housing, hospitality and retail
uses.
Day ski areas are smaller in size and usually located near metropolitan areas. As an owner and
operator of primarily day ski areas and overnight drive ski areas, Peak Resorts and Mount Snow
focus on selling lift tickets, renting ski equipment, selling ski lessons, selling convenienceoriented food and beverages and capitalizing on the convenience they provide to the targeted
local market. Peak Resorts and Mount Snow believe that their resorts target a wide cross-section
of the skiing public, from beginners who are skiing for the first time to intermediate and advanced
skiers who are honing their skills.
The sale of lift tickets comprises a large portion of the ski industry revenues. As such, another
important measurement of the ski industrys profitability is the average ticket yield, which is the
74

Section 2 - Business Plan | Carinthia Group

ratio of total ticket and season pass revenue to total skier visits. The pricing for various lift ticket
products is such that single-day or multi-day tickets, which are typically purchased for a holiday
or weekend of skiing, generate a higher average ticket yield than season passes or discounted
frequency cards.

AverageTicketYield

From the 2005/2006 ski season to 2012/2013 ski season, the average ticket yield of ski resorts in
the United States has increased at a compound annual growth rate of 3.7%. Ski resorts in the
United States had an average ticket yield of $42.06 during the 2012/2013 ski season, the highest
within the past eight ski seasons despite the impact of the global economic downturn.

AverageTicketYieldofU.S.SkiResorts
$31.55

$34.52

$36.79

$37.15

$37.54

$37.73

$40.88

$42.06

05/06

06/07

07/08

08/09

09/10

10/11

11/12

12/13

AverageTicketYield

The average ticket yield of Peak Resorts 13 ski resorts combined has increased at a compound
annual growth rate of 2.15% from the 2005/2006 ski season to the 2012/2013 ski season.

PeakResortsAverageTicketYield
$25.22

$27.46

$26.38

$28.16

$27.82

$29.07

$30.41

$29.91

05/06

06/07

07/08

08/09

09/10

10/11

11/12

12/13

The ski industry statistics stated in the foregoing sections have been derived from data published
by the Kottke National End of Season Survey 2012/2013 and other industry publications,
including those of the National Ski Areas Association.

INTENTIONALLY LEFT BLANK

75

Section 2 - Business Plan | Carinthia Group

PEAK RESORTS
PEAK RESORTS INC. AND ITS SUBSIDIARY MOUNT SNOW
Policy and decision making for Mount Snow is handled at group level by the board of Peak
Resorts, Inc. The following information is provided to explain and inform interested parties of
group polices strategy and data which may pertain to Mount Snow Ltd.

BUSINESS AND FINANCIAL OVERVIEW

Peak Resorts is a leader and innovator in the ski industry with 13 ski resorts throughout the
United States. Their resorts, located in geographically diverse areas, appeal to a wide range of
visitors. All of Peak Resorts properties employ snowmaking capability on a majority of their
terrain, and all offer terrain parks for snowboarding and other alternative snow sports in addition
to skiing.
Through both organic growth and acquisitions, Peak Resorts believes that it has created an
efficient, focused and highly profitable operation. In the past eight ski seasons, Peak Resorts
revenues have grown approximately 211%, from $32,045,000 for the fiscal year ended March 31,
2006 to $99,688,500 for the fiscal year ended April 30, 2013. One of the primary ski industry
statistics for measuring performance is a skier visit, which represents a person utilizing a ticket
or pass to access a mountain resort for any part of one day and includes both paid and
complimentary access. During the 2012/2013 ski season, total skier visits for all of the United
States ski areas were approximately 59.6 million. Combined, Peak Resorts ski areas had
approximately 1.3 million skier visits in the 2010/2011 ski season and approximately 1.7 million
skier visits in the 2012/2013 ski season, which Peak Resorts believe put them among the top
U.S. companies in terms of number of skier visits during these ski seasons.
Peak Resorts is also a recognized leader within the alternative snow sports industry. To
compensate for the steady decline in baby boom skiers, who are traditionally downhill skiers, the
ski industry began to shift its focus to snowboarding and snow tubing during the 1990s in order to
attract the younger skier population. This trend is easier for day and overnight drive ski areas to
incorporate and is more likely to interest a novice participant who may be more likely to visit
these ski areas than an overnight fly destination ski area. Because of Peak Resorts snowmaking
abilities, they have been able to create terrain parks with rails, jumps and pipes and other snow
sport amenities that have won them industry recognition. Transworld Snowboarding magazine
named both Mount Snows Carinthia terrain park and Big Boulders terrain park in the top five
east coast parks for 2011, and for the second consecutive year, Mad River was named Favorite
Terrain Park in the Midwestern region by the visitors of OnTheSnow.com.

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Section 2 - Business Plan | Carinthia Group

AUDITED ACCOUNTS
FINANCIAL STATEMENTS
Consolidated Audited Financial Statements for Peak Resorts, Inc. and its subsidiaries for the
fiscal years ended April 30, 2010, 2011, 2012 and 2013 together with the Independent Auditors
Report are available to prospective investors upon request.

OPERATIONAL GOALS AND STRATEGY

Peak Resorts operational goals include providing a quality ski experience for both traditional and
alternative snow sports and maintaining maximum snowmaking capability to increase operable
business days.
Peak Resorts, like other operators of day ski areas and overnight drive ski areas, has a high
fixed cost basis, attributable to snowmaking, human resource costs, equipment operation,
maintenance and repairs. Therefore, increasing skier visits and increasing revenues per skier
visit has a substantial impact on revenues.
Adverse weather patterns are one of the core challenges faced by the entire industry. Peak
Resorts anticipates this challenge and employs snowmaking systems that provide snowmaking
capability on substantially all skiable areas. This makes the Peak Resorts ski areas less reliant
on natural snowfall, which enables them to open earlier in the season, increasing the length of
the ski season that is already relatively short. Snowmaking also gives the Peak Resorts ski
areas a competitive advantage during the season, especially when natural snowfall is below
average.
The impact that snowmaking has on the ski experience is significant. Peak Resorts commitment
to snowmaking excellence is an important component in developing their brand and ongoing
market reputation. Peak Resorts has invested substantial amounts of money, and continues to
invest in Mount Snow to adopt what they believe to be the most efficient snowmaking system
available. Peak Resorts believe that their snowmaking system provides them with a competitive
advantage over other ski area operators. Additionally, Peak Resorts is focused on reducing costs
and energy usage. The snowmaking technology employed at its resorts not only provides stateof-the-art snowmaking, but the technology is extremely efficient, resulting in reduced energy
costs at its resorts. In addition to snowmaking, Peak Resorts is also continually improving
existing facilities and equipment at their ski areas.

MANAGEMENT TEAM
The general partner of the Partnership is Mount Snow GP Services, LLC. The sole member of
the general partner is Mount Snow Ltd. and the manager is Richard Deutsch. All authority,

77

Section 2 - Business Plan | Carinthia Group

responsibilities and duties of the general partner are more fully described in the limited
partnership agreement. Mount Snow Ltd. is a wholly owned subsidiary of Peak Resorts. Ultimate
control, corporate decisions strategy, financial control and operational direction devolves from the
Directors and management of Peak Resorts. As such the Directors of Peak Resorts are
referenced hereunder together followed by the management structure and organization of the
subsidiary Mount Snow Ltd. The term "Company" in the narrative below refers to Peak Resorts.
Timothy D. Boyd is the Chief Executive Officer, President and Chairman of the Board of the
Company, and has served in these specific roles since Peak Resorts, Inc. was founded in 1997
as the holding company for ski areas that Mr. Boyd developed beginning in 1982. In 1982 and
1985, he developed the Hidden Valley ski area in St. Louis, Missouri and the Snow Creek ski
area in Kansas City, Missouri, respectively, which are now owned by the Company. Mr. Boyd has
extensive experience in the operation of day ski areas and overnight drive ski areas, as well as
snowmaking. The board believes that this experience and his positions of Chief Executive Officer
and President provide him with intimate knowledge of the Companys day-to-day operations,
business and competitive environment, as well as the Companys opportunities, challenges and
risks. Mr. Boyd graduated from the University of Missouri with a Bachelor of Science degree in
Education and Economics.
Stephen J. Mueller serves as the Companys Chief Financial Officer, Vice President, Secretary
and Director and has held these positions since 2001. In these positions, Mr. Mueller serves as
the Companys principal financial officer and is responsible for all group financial and accounting
aspects of the operations. Prior to joining the Company, Mr. Mueller was a shareholder with a
firm of certified public accountants that he founded in 1991. He has also served as a partner at
Touche Ross & Co. (now Deloitte & Touche LLP) and as Chief Financial Officer of an
environmental services firm. While in public accounting, Mr. Mueller served a wide variety of
clients in construction, service and recreation activities. Mr. Mueller received a Bachelor of
Science degree in Accounting from St. Louis University. The board selected Mr. Mueller because
of his experience in finance and accounting, as well as for his in-depth knowledge of the
Company.
Richard Deutsch is the Companys Vice President, (and based at Mount Snow Resort) Business
and Real Estate Development and a Director. He has served in these positions for over ten
years. As the Vice President Business and Real Estate Development, Mr. Deutsch is
responsible for developing the Companys growth strategy, along with Messrs. Boyd and Mueller,
and identifying and evaluating acquisition targets and other potential growth opportunities. The
board believes that Mr. Deutschs successful acquisition experience in the ski industry and his
understanding of the Companys operations will be valuable in executing the Companys growth
strategy.

INTENTIONALLY LEFT BLANK

78

Section 2 - Business Plan | Carinthia Group

APPENDIX
MASTER PLAN FINDINGS OF FACT
U.S. FOREST SERVICE MASTER PLAN ACCEPTANCE LETTER
U.S. FOREST SERVICE NOTICE OF DECISION FOR WEST LAKE

79

STATE OF VERMONT
NATURAL RESOURCES BOARD
DISTRICT ENVIRONMENTAL COMMISSION #2
RE: Mount Snow Ltd.
Attn: Laurie Newton
P.O. Box 2810
West Dover, VT 05356

I.

Application #2W1281
PARTIAL FINDINGS OF FACT
AND CONCLUSIONS OF LAW
AND ORDER
10 V.S.A., 6001 - 6092

INTRODUCTION

On October 29, 2010, Mount Snow Ltd. filed Application #2W1281 for partial findings
under Act 250 for a project described as the Mount Snow Master Plan. The Master
Plan encompasses the redevelopment of Mount Snows base areas; projects at the
Golf Course and Howe Farm to include a total of 900 residential units, 200,000 square
feet of skier services, and on-mountain improvements, including additional
snowmaking and new/replacement lifts. The Master Plan also includes a number of
restoration and remediation components, including the restoration of the North Branch
of the Deerfield River (North Branch) and the Base Lodge tributary, as well as the
implementation of stormwater-related improvements. The project is located at Mount
Snow Ltd properties in Dover, Wilmington and Somerset.
Under Act 250, projects are reviewed based on the 10 criteria of 10 V.S.A. 6086(a)
(1)-(10). Before granting a permit, the District Environmental Commission (the
Commission) must find that the project complies with these criteria and is not
detrimental to the public health, safety or general welfare. The Master Plan application
is a request for partial findings based on the conceptual nature of proposed project
elements as presented in the application. Before the Commission can grant a permit to
construct, it must be able to make affirmative findings under all of the criteria for those
aspects of the project seeking construction approval.
The current Master Plan application does not include a request for affirmative findings
under all criteria to construct any particular phase of the Master Plan project as there
are no individual projects ready to commence. Each construction project will require a
separate application and the Applicant will need to demonstrate conformance with
criteria which were not granted affirmative findings in this decision.
The Commissions review is pursuant to Act 250 Rule 21 and the Environmental
Master Permit Policy and Procedure for Partial Findings of Fact, adopted on
February 25, 1998, Amended on March 29, 2000 (the Policy). Pursuant to the Policy,
the Commission cannot issue a master construction permit, but will, instead, issue
findings to guide the Applicant as it proceeds with implementation of the Master Plan.
The Applicant will file applications for individual phases of the project. In order to
obtain a permit for an individual phase, the Applicant must provide additional
information, which will enable the Commission to issue affirmative findings on all
criteria. The Commission emphasizes that these findings reflect only the information

Partial Findings of Fact and

Conclusions of Law and Order #2W1281
Page 64
VII.

ORDER

The Commission's Partial Findings of Fact described above shall remain in effect for a
period of ten (10) years from the date of this decision. Prior to the submission of
subsequent applications to construct discrete components of the Master Plan project,
the Applicant shall produce additional evidence as outlined herein.
Dated at Springfield, Vermont on July 1, 2011.

By:________________________________
Michael Bernhardt, Chair
District #2 Environmental Commission
Natural Resources Board
Commissioners participating in this decision:
Leslie Hanafin Cota
Stephan Morse

Any party may file a Motion to Alter with the District Environmental Commission within 15 days
from the date of this decision, pursuant to Act 250 Rule 31(A). Any appeal of this decision must
be filed with the Superior Court, Environmental Division, within 30 days of the date the decision
was issued, pursuant to 10 V.S.A. Chapter 220. The Notice of Appeal must comply with the
Vermont Rules for Environmental Court Proceedings (VRECP). The appellant must file with the
Notice of Appeal, the entry fee required by 32 V.S.A. 1431 and the 5% surcharge required by
32 V.S.A. 1434(a), which is $262.50 as of Jan. 2011. The appellant must also serve a copy of
the Notice of Appeal on the Natural Resources Board, National Life Records Center Building,
Montpelier, VT 05620-3201, and on other parties in accordance with Rule 5(b)(4)(B) of the
Vermont Rules for Environmental Court Proceedings. Decisions on minor applications may be
appealed only if a hearing was held by the District Environmental Commission. Please note that
there are certain limitations on the right to appeal. See 10 V.S.A. 85404(k). For additional
information on filing appeals, see the Courts website
at: http://www.vermontjudiciary.org/GTC/environmental/default.aspx or call 802-828-1660.
The Courts mailing address is: Superior Court, Environmental Division, 2418 Airport Rd, Suite
1, Barre, VT 05641-8701.

United States
Department of
Agriculture

Decision Notice
and
Finding of No Significant Impact

Forest
Service
Eastern Region

Mount Snow Resort Snowmaking Project

October 2010

Manchester Ranger District, Green Mountain National Forest

Towns of Dover and Somerset, Windham County, Vermont

(formerly West Lake Project)

Responsible Official:
Colleen Madrid, Forest Supervisor
Green Mountain National Forest

For Information Contact:

Susan Mathison
Winter Sports Team Leader
White Mountain National Forest
Supervisors Office, Forest Headquarters
71 White Mountain Drive
Campton, NH 03223
Phone: 603 536-6245
Email address: smathison@fs.fed.us

Section 3
The Limited Partnership Agreements
56

CARINTHIA GROUP 1, L.P.

LIMITED PARTNERSHIP AGREEMENT

December 13, 2013

THE PARTNERSHIP INTERESTS (THE SECURITIES) OFFERED HEREBY HAVE

NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE SECURITIES ACT), AND MAY NOT BE OFFERED OR SOLD IN THE
UNITED STATES OR TO A U.S. PERSON UNLESS THE SECURITIES ARE
REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM
REGISTRATION IS AVAILABLE. HEDGING TRANSACTIONS INVOLVING THE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT. ADDITIONAL RESTRICTIONS ON TRANSFER OF THE

PARTNERSHIP INTERESTS OR INTERESTS THEREIN ARE SET FORTH IN THIS

AGREEMENT.

CARINTHIA GROUP 1, L.P.

LIMITED PARTNERSHIP AGREEMENT

This Limited Partnership Agreement, dated as of December 13, 2013, is entered into
between and among Mount Snow GP Services, LLC, a Vermont limited liability company, as the
General Partner,
AND
Douglas Hauer as the Initial Limited Partner, and the additional persons listed Exhibit A
hereto who have taken such steps as are set forth in and required by the Offering Memorandum and
Subscription Agreement, who have joined herein and agreed to be bound hereby, and who have
been admitted as Limited Partners to the Partnership by the General Partner, as Limited Partners.
PREAMBLE
The Partnership

was formed under the name CARINTHIA GROUP 1, L.P. pursuant to a Certificate of
Limited Partnership filed in the office of the Secretary of State, State of Vermont on or
about December 13, 2013, and is being organized under this Limited Partnership
Agreement.

was formed to undertake certain lending transactions to facilitate development Projects

and to stimulate economic activity and create full-time jobs, all as more fully described
in the attached Exhibit B.
AGREEMENTS

Therefore, with the intent to be legally bound, the parties agree that, from and after the date
of this Agreement, the affairs of the Partnership shall be governed by, and its business shall be
conducted in accordance with, the following terms and provisions:
Section 1.
Certain Definitions. Except as the context may otherwise require, when used
in this Agreement, terms in capitalized form shall have the meanings ascribed to them in the
attached Appendix I.
Section 2.

Name, Organization, Limited Liability, Office and Agent.

(a)

As stated in its Certificate, the name of the Partnership is:

CARINTHIA GROUP 1, L.P.

The Partnership may conduct business under any other name selected by the General Partner.
(b)
To the fullest extent permitted by law, the internal affairs of the Partnership
shall be governed by, and its business shall be conducted in accordance with, this Agreement.

(c)
To the fullest extent allowed by law, each Limited Partner will be protected
and immune from personal liability for any and all debts, obligations and liabilities of the
Partnership, or chargeable to the Partnership, and for the acts of any other Partner, employee or
agent of the Partnership.
(d)
The street address and mailing address of the Partnerships office in which
shall be located the records required to be maintained by Section 3405 of the Act shall be 89 Grand
Summit Way, West Dover, VT 05356. The General Partner may designate a different address of
the Partnerships office by amending the Certificate in accordance with the Act.
(e)
The name and address of the Partnerships initial registered agent in Vermont
are Thomas J. Montemagni, Esq., P.O. Box 2805, 39 Mount Snow Road, West Dover, Vermont
05356. The General Partner may designate a different name and address of its registered agent by
amending the Certificate in accordance with the Act.
Section 3.
(a)

Purposes and Powers of the Partnership.

The Partnership is organized for the purposes of ---

(i)
assisting not more than 98 Alien Entrepreneurs make qualifying (socalled at risk) investments in a commercial enterprise which, though not restricted to such
investments, that is intended to meet the requirements of Section 203(b)(5)(A)-(D) of the IN Act,
thus making such Alien Investors eligible for the immigration benefits available under the EB-5
Immigrant Investor Program;
(ii)
using its reasonable efforts, assisting independent legal counsel acting
for EB-5 Investors with the filing of each of the Alien Entrepreneurs required petitions under the
EB-5 Immigrant Investor Program with the USCIS;
(iii)
as noted in the Preamble, entering into the lending arrangements in
respect of the Projects all as further described and defined in the attached Exhibit B and the
Offering Memorandum, and otherwise carrying out the purposes of the Partnership as set forth
therein.
(b)
The Partnership shall have and may exercise any right, power, franchise or
privilege that a domestic corporation engaged in the same business might exercise under the laws of
Vermont. The powers of the Partnership will therefore include those enumerated in Section 3.02 of
the Vermont Business Corporation Act (11A V.S.A. 1.01 et. seq.).
Section 4.
General Partners Powers, Authority and Duties; Engagement of Affiliates
and Reimbursement of Expenses; Role and Activities of Limited Partners.
(a)
All powers of the Partnership referred to in Section 3(b) above and otherwise
conferred by law shall be exercised by or under the authority of, and the business of the Partnership
shall be conducted by or under the direction of, the General Partner. Accordingly,
(i)

No Partner, other than the General Partner acting in that capacity,

-2-

shall have any right to participate in conducting or controlling the Partnerships business or any
authority to act as an agent of the Partnership.
(ii)
The Limited Partners shall have the right to participate in the
management of the business of the Partnership -(1)
by making suggestions or recommendations to the General
Partner on issues of policy important to the Partnership;
(2)

as set forth in Paragraph (b) below; and

(3)
by voting on or otherwise consenting (or failing to consent) to
matters reserved to the Limited Partners under this Agreement;
provided, however, that no Limited Partner shall have the power or authority to bind the Partnership
or to sign any agreement or document in the name of the Partnership, and, provided, further, that the
foregoing provisions of this clause (ii) and the voting or approval of the Limited Partners as set
forth in this Agreement shall not be deemed to be participation in the control of the business or
affairs of the Partnership.
(iii)
Each Limited Partner shall be prohibited from engaging in any
Unauthorized Conduct on behalf of the Partnership or in its name.
(iv)
The Partnership shall not be required to indemnify any Limited
Partner (in its capacity as such) for any payments made in connection with the conduct of the
Partnerships business or the preservation of its business or property.
(b)
Notwithstanding Paragraph (a)(i) above, without the consent of a Majorityin-Interest of the Limited Partners, the General Partner shall not
(i)
amend or waive any provision of the West Lake Loan Documents or
the Carinthia Ski Lodge Loan Documents (as defined in Exhibit B).
(ii)
take any action that would intentionally jeopardize or would
reasonably be expected to jeopardize any of the limited partners capacity to be admitted to the
United States of America as unconditional lawful permanent residents with their spouses and
unmarried, minor children pursuant to the EB-5 Immigrant Investor Program; or
(iii) (1) borrow from the Partnership any funds that (a) have been
contributed to the Partnership as Capital Contributions from Alien Entrepreneurs or (b) have been
received as interest payments on, or repayment of principal of, loans extended by the Partnership to
West Lake, LLC and Carinthia Ski Lodge, LLC (where such loans were funded by the Capital
Contributions of the Limited Partners) or (2) commingle such funds with the funds of any other
entity; provided that Affiliates of the General Partner may borrow such funds from the Partnership
solely for the borrowers deployment of such funds in the Projects provided such borrowing does
not intentionally jeopardize any of the Limited Partners capacity to be admitted to the United States
of America as unconditional lawful permanent residents with their spouses and unmarried, minor
children pursuant to the EB-5 Immigrant Investor Program.
-3-

(c)
The General Partner shall perform its functions in good faith; with such care,
including reasonable skill, diligence and inquiry, as a person of ordinary prudence would use in
similar circumstances; and in such manner as the General Partner reasonably believes to be lawful,
practicable, in conformity with its duties of loyalty and care, and in furtherance of the purposes of
the Partnership.
(d)
The General Partner may, in the name and on behalf of the Partnership, enter
into Related Party Transactions or other agreements with third parties for the performance of
services for and on behalf of the Partnership and the Limited Partners and obligate the Partnership
to pay or reimburse the payment of compensation and fees for and on account of any such services;
provided, however, that such compensation and fees are fair and reasonable as to the Partnership at
the time the same are authorized.
(e)
The General Partner may make loans to the Partnership, in its discretion,
which loans shall be (i) on terms that are fair and reasonable at the time such loans are made, and
(ii) used by the Partnership for deployment in the Projects. Any such loans from the General
Partner shall be repaid in full by the Partnership prior to any distributions being made by the
Partnership to the Partners.
(f)
In the event of a default under the West Lake Loan Documents or the
Carinthia Ski Lodge Loan Documents, the General Partner will act in a commercially reasonable
manner in enforcing the Partnerships rights thereunder.
(g)

Each Alien Entrepreneur hereby acknowledges and agrees ---

(i)
that, notwithstanding any provision of the Offering Memorandum, the
Subscription Agreement or this Agreement to the contrary, the responsibility for the preparation,
content and filing of each of the I-526 Petition and the I-829 Petition, and any other governmental
forms required under or pursuant to an Alien Entrepreneurs participation in the EB-5 Immigrant
Investor Program, remains solely with such Alien Entrepreneur;
(ii)
to file his/her I-526 Petition within 90 days after becoming a Limited
Partner and, in addition, to file all other applications and petitions respecting his/her lawful
permanent resident status within the United States within a reasonable time of becoming eligible to
do so;
(iii)
that it may be beneficial to file his/her I-829 Petitions as soon as
he/she is entitled to do so in the event that fewer than all of the jobs projected to be created by the
Project are actually created, recognizing that such jobs will be allocated with preference first to
those Alien Entrepreneur whose I-829 Petitions are approved, and then to those Alien Entrepreneur
who have obtained lawful permanent admission to the United States.
Section 5.
Other Activities of Partners Not Restricted. The General Partner shall not be
deemed in violation of any legal or equitable duty or any duty under this Agreement by reason of,
and no Limited Partner shall be prohibited from, directly or indirectly (i) making investments in and
loans to other business ventures of any nature, independently of and without being held accountable
to the Partnership and the other Partners, or (ii) rendering services to any such other business
-4-

ventures. The foregoing shall apply whether or not the other venture is or will be engaged in a
business the same or similar to the business of the Partnership.
Section 6.
Term. The Partnership shall continue for a term of 20 years from the date of
admission of the last Limited Partner to be admitted.
Section 7

Capital Contributions.

(a)
Partnership Interests will be issued under this Agreement and held by the
General Partner and the Limited Partners. For convenience of administration, Partnership Interests
may, in the discretion of the General Partner, be denominated in Units, and such Partnership
Interests (or Units) may be certificated.
(b)
(i)
The General Partner shall contribute to the capital of the Partnership
the amount set forth opposite its name on Exhibit A.
(ii)
The General Partner is authorized in its sole discretion, but shall not
be obligated to any Limited Partner, to contribute additional amounts to the capital of the
Partnership in order to fund the Partnerships requirements for working capital. The General
Partner acknowledges that any such additional contribution will be for the primary benefit of the
General Partner or its Affiliates by enhancing the eligibility of the Alien Entrepreneurs to obtain the
benefits of the EB-5 Immigrant Investor Program and, for that reason, the General Partners
Partnership Interest and its Ancillary Legal Interest shall not be increased by any such additional
Capital Contribution.
(c)
The Initial Limited Partner shall not be required to make a Capital
Contribution. See Section 15(e).
(d)
(i)
Each Limited Partner, other than the Initial Limited Partner, shall
contribute to the capital of the Partnership the amount (not less than US$500,000) so committed by
such Limited Partner in its Subscription Agreement (and shown on Exhibit A).
(ii)
As a condition to the acceptance of the Limited Partners Capital
Contribution, each Alien Entrepreneur, simultaneously with the submission of its Capital
Contribution, shall also be required to pay the Administrative Fee to the General Partner (which
payment shall be separate from, and not be accounted for as, a Capital Contribution).
Upon the acceptance of the related, executed Subscription Agreement, the Capital Contribution and
the Administrative Fee by the General Partner, such Limited Partner shall be deemed to have been
admitted as a Limited Partner under this Agreement. No Limited Partner will be required to make
any additional contributions of capital beyond the amount of such Partners Capital Commitment.
Section 8.
Capital Accounts. A Capital Account shall be established and maintained on
the Partnerships books for and in the name of each Partner. Each Capital Account shall reflect the
dollar amounts of the respective Partners (i) Capital Contributions, (ii) allocable share of Profits
and Losses realized in each Fiscal Year from the conduct of business and other transactions and
activities of the Partnership, and (iii) distributions made to them. Allocable shares of Profits and
Losses shall be determined and recorded in the Capital Accounts in accordance with Section 9
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below. Distributions shall be made and recorded in the Capital Accounts in accordance with
Section 10 below. The Capital Accounts shall also be adjusted if and when required by Appendix II
or other Tax Regulatory Requirements.
Section 9.

Allocation of Profits and Losses Among Partners.

(a)
Profits and Losses for each Fiscal Year shall be allocated among the Partners
in the following manner: (i) 0.01% to the General Partner; and (ii) 99.99% to the Limited Partners,
to be allocated and distributed among the Limited Partners as reasonably determined by the General
Partner after taking into account the date on which (A) each Limited Partner made his or her
investment, and (B) the Partnership used such investment to advance loans to the Projects, and once
such determination by the General Partner is made, then among the Limited Partners who are
similarly situated with respect to the above criteria in proportion to their respective Capital
Contributions invested in the loans described on Exhibit B.
(b)
Losses incurred in any Fiscal Year shall not be allocated to the Capital
Account of any Limited Partner to the extent that the allocation would cause such Limited Partner
to have an (or to cause an increase in such Limited Partners) Adjusted Capital Account Deficit at
the end of such Fiscal Year. Losses which cannot be allocated to a Limited Partner on account of
this limitation (the Excess Losses) shall be allocated to the Capital Account of the General
Partner. Profits realized in any Fiscal Year after allocation of Excess Losses to the General
Partners Capital Account shall first be allocated to offset the cumulative balance of Excess Losses
in the General Partners Capital Account.
Section 10. Distributions. Except as otherwise provided in Section 17(c) below (relating
to winding up of the Partnership), distributions to the Partners on behalf of the Partnership shall be
made by the General Partner only from Available Cash and in accordance with the following
provisions:
(a)
Tax Distributions may be made in order to defray the federal income tax
liabilities arising from the Partners Partnership Interests at the time indicated in, and calculated in
accordance with, and subject to the terms of, Appendix II.
(b)
No distributions shall be made to any Partner in an amount that would give
rise to, or increase, a negative balance in such Partner's Capital Account.
(c)
Subject to the remaining provisions of this Section 10 or Section 17,
distributions by the Partnership shall be made among the Partners in the following order or priority:
(i)
First, among the Partners in proportion to their Undistributed Income until the
Undistributed Income of each Partner is zero.
(ii)
(iii)
balance.
(d)

Second, to each Partner in proportion to its Unreturned Capital Contributions.

Thereafter, to each Partner in proportion to such Partners Adjusted Capital Account

For purposes of this Section 10:

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(i)
Undistributed Income shall mean, with respect to a Partner, the aggregate Profits
allocated to such Partner, less the aggregate Losses allocated to such Partner, less any previous
distributions to such Partner under Section 10(c)(i).
(ii)
Unreturned Capital Contributions shall mean, with respect to a Partner, the
Partners aggregate Capital Contributions, less any previous distributions to such Partner under
Section 10(c)(ii).
(iii) Adjusted Capital Account shall mean, with respect to a Partner, such Partners
Capital Account, (i) increased by any amounts which such Partner is obligated to restore pursuant to
any provision of this Agreement or is treated as being obligated to restore pursuant to Regulations
Section 1.704-1(b)(2)(ii)(c) or is deemed to be obligated to restore pursuant to the penultimate
sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), and (ii) decreased by
the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5),
and 1.704-1(b)(2)(ii)(d)(6). The foregoing definition of Adjusted Capital Account is intended to
comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.
Section 11.

Reports; Confidentiality.

(a)
On or earlier than March 15 of each calendar year (or within 75 days after the
end of any Fiscal Year which is not a calendar year), the General Partner shall cause to be prepared
and submitted to each Limited Partner an annual report of the Partnership for such Fiscal Year. The
annual report shall include (i) the balance sheet of the Partnership as of the last day of such Fiscal
Year and statements of profit or loss and cash flows of the Partnership for such Fiscal Year, all
prepared in accordance with the method of accounting used by the Partnership for U.S. federal
income tax purposes, and (ii) a narrative commentary setting forth the General Partners analysis of
the Partnerships financial condition and results and a description of material developments in the
Partnerships business during the Fiscal Year. The report shall be accompanied by a supplementary
schedule showing the entries to the Partners Capital Accounts (individually and in the aggregate) in
respect of such Fiscal Year, together with all other information necessary for the Partners to prepare
their federal and state income tax returns.
(b)
In connection with the dissolution and winding up of the Partnership, the
General Partner or the Liquidation Trustee shall furnish to each Partner a termination report
containing the balance sheet and statements of profit or loss and cash flows of the Partnership as of
and for the period ended on the substantial completion of the dissolution and winding up of the
Partnership, together with a supplementary schedule showing the final entries to the Partners
Capital Accounts (individually and in the aggregate).
(c)
Each Partner acknowledges and agrees that the information contained in the
reports delivered pursuant to this Section 11, and all other information and data relating to the
Partnership and the business and affairs of the Partnership delivered to or obtained by any of the
Partners, shall be deemed and treated by them as confidential and proprietary to the Partnership. In
addition to the other duties imposed by this Agreement or the Act, each Partner shall be required to
refrain from using or divulging such information in a manner that would or might interfere with
carrying out the Partnerships purposes or cause damage to the Partnerships economic prospects,
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good will or commercial standing. The foregoing provisions of this Paragraph (c) shall not be
deemed to limit or supersede the right, power and authority of the General Partner to protect trade
secrets and other information on behalf of the Partnership or to comply with legal or contractual
obligations applicable to the Partnership.
Section 12.

Indemnification.

(a)
To the fullest extent allowed by the Act or otherwise by law, the Partnership
shall indemnify the General Partner, and each of its managers, managing members and members,
and their respective officers, employees and agents (in its capacity as such), and hold each of them
harmless against and from, and where requested advance amounts for the payment of, (i) any and all
costs, expenses and fees reasonably paid or incurred in the defense of any claims, demands and
causes of action threatened, asserted or filed against the General Partner, and/or any of its managers,
managing members and members, and their respective officers, employees and agents, and related
to the affairs of the Partnership and/or the conduct of its business, (ii) amounts reasonably paid in
settlement of any such claims, demands and causes of action, and (iii) liabilities and damages
incurred as a result thereof.
(b)
The rights to indemnification set forth in Paragraph (a) above shall apply to
claims, demands and causes of action threatened, asserted or filed in any court, other tribunal or
arbitral forum (i) derivatively on behalf of the Partnership, (ii) by or on behalf of a Limited Partner
or former Limited Partner in its own right, and/or (iii) by or on behalf of a third party, including any
creditor, creditor representative or governmental agency; provided, however, that the rights to such
indemnification shall not apply where Unprotected Misconduct is determined to have taken place by
the General Partner pursuant to a final non-appealable judgment of a court of the United States.
Section 13.
Exculpation from Liability. Neither the General Partner, nor any of its
managers, managing members and members, and their respective officers, employees and agents,
shall be liable to the Partnership or any Limited Partner for any errors of judgment or for any other
actions taken or omissions made, except only where Unprotected Misconduct or a willful violation
of this Agreement is determined to have taken place by the General Partner pursuant to a final nonappealable judgment of a court of the United States.
Section 14.

Termination of General Partner.

(a)
A Supermajority-in-Interest of the Limited Partners shall have the right to
terminate the General Partners powers and authority under Section 4 above and under the Act, and
to remove the incumbent from its position as General Partner, upon the occurrence of either of the
following items (i) or (ii) and the adoption of a resolution so directing. Such termination shall be
effective upon the date set forth in such resolution, if adopted because of and within a reasonable
time after:
(i)
Unprotected Misconduct is determined to have taken place by the
General Partner pursuant to a final non-appealable judgment of a court of the United States; or
(ii)
the willful and wrongful failure or refusal by the General Partner to
substantially perform its functions under Section 4(a) above after notice of such failure or refusal
has been provided to the General Partner and the General Partner has failed to cure such failure or
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refusal within 60 days of receipt of such notice.

Notwithstanding the prior provisions of this Paragraph (a), no such termination and removal shall be
effective unless and until, in addition to the requirements set forth above, a Supermajority-inInterest of the Limited Partners shall have appointed a new General Partner who or which is an
Affiliate of the terminated and removed General Partner and such Affiliate shall have joined in this
Agreement in the capacity as such new General Partner, whereupon such new General Partner shall
be deemed to have been admitted as such (except that in the case of a removal pursuant to clause
(a)(i) above, the new General Partner need not be an Affiliate of the terminated General Partner).
(b)
(i)
Except as described in Section 15(b), the General Partner shall not
have any right to withdraw from the Partnership. Unless consented to by a Supermajority-inInterest of the Limited Partners, a resignation or similar act by the General Partner abdicating its
position or functions shall constitute a breach of this Agreement and an event of withdrawal of the
general partner under Section 17(a)(v) below.
(ii)
A termination of the General Partner under Paragraph (a) above shall
not constitute a breach of this Agreement, but shall be deemed an event of withdrawal of the
general partner under Section 17(a)(v) below.
(c)
If, at the time of the termination, removal or resignation of the General
Partner as described in Paragraphs (a) and/or (b) above, the affected or subject General Partners
Capital Account has a negative balance, such General Partner shall be required to contribute to the
capital of the Partnership such amount as will cause such Capital Account balance to be increased to
zero.
(d)
If the business of the Partnership is continued with a replacement General
Partner after an event of withdrawal of the general partner, as permitted by Section 17(a)(v)
below, the Partnership shall be required to redeem the Partnership Interest of the terminated General
Partner by payment in cash of an amount equal to the positive balance (if any) of its Capital
Account as of the effective date of termination, such payment to be made within 270 days
thereafter. If the balance of the terminated General Partners Capital Account is not positive as of
the effective date of termination, its Partnership Interest shall nevertheless be surrendered and
cancelled, without any payment by the Partnership. The foregoing provisions shall not affect any
rights of the terminated General Partner: (i) to receive distributions in respect to its Partnership
Interest under Section 10 above prior to completion of the redemption or surrender thereof, or (ii) to
indemnification under Section 12 above; nor shall they constitute a release of any liabilities the
terminated General Partner may have to the Partnership as a consequence of a breach (if any) of this
Agreement.
Section 15. Partnership Interests; Transfers; Admission of Substitute or Additional
Limited Partners; Withdrawals.
(a)
The provisions of this Section 15 shall constitute an encumbrance upon all
Partnership Interests and Ancillary Legal Interests. Any Transfer or purported Transfer by a Partner
in violation of this Section 15 shall constitute a breach of duty under this Agreement. The
Partnership shall not be required to recognize or give effect to any purported Transfer that has not
been made in compliance with this Section 15.
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(b)
All Transfers by the General Partner shall be prohibited unless made to an
Affiliate of the General Partner.
(c)
(i)
No Transfer by any Alien Entrepreneur shall be recognized by the
Partnership or recorded in the Partnerships records unless such Alien Entrepreneur shall have
submitted to the Partnership and the General Partner, in such form as shall be acceptable to the
General Partner in its sole and absolute discretion, an acknowledgement that the subject Transfer
may disqualify such Alien Entrepreneur for eligibility under the EB-5 Immigrant Investor Program
and a release of the Partnership and the General Partner from all damages, whether direct, indirect,
consequential or other, and all other consequences therefrom.
(ii)
No Limited Partner shall have the power to give any person the right
to be admitted to the Partnership as a Limited Partner. Except as provided in Section 7(d), any
person who has acquired any Partnership Interest shall be admitted as a Limited Partner, and
thereby succeed to the related Ancillary Legal Interest, only (x) with the approval of the General
Partner in its sole and absolute discretion, (y) upon its execution and delivery of an instrument, in
such form as the General Partner may require, whereby such person will become bound by this
Agreement, and (z) if such person or the subject Limited Partners pays for all expenses incurred by
the Partnership in connection with such person's becoming a Limited Partner.
(iii)
Notwithstanding clauses (i) and (ii), a Transfer by testamentary
disposition of a Partnership Interest to an Alien Entrepreneurs spouse or child(ren) shall
automatically cause such transferee(s) to be admitted to the Partnership as a Limited Partner(s) and
thereby succeed to the related Ancillary Legal Interest.
(d)
Except as provided in this Paragraph (d), no Limited Partner may withdraw
from the Partnership. An Alien Entrepreneur may withdraw from the Partnership by giving written
notice to the General Partner (with such supporting documentation as the General Partner may
reasonably request) --(i)
to the effect that such Alien Entrepreneurs I-526 Petition has been
denied by the USCIS for reasons other than fraud committed by or the material misrepresentation of
such Alien Entrepreneur; provided, however, that this clause (i) shall be applicable only if the
General Partner actually receives such notice not later than 30 days following such denial.
(ii)

within 30 days following the fulfillment of the all of the following

conditions:
(1)
the regional center pilot program, created in support of the
EB-5 Immigrant Investor Program as described in the Offering Memorandum (the Pilot Program)
lapsed after the filing of his or her I-526 Petition but prior to its adjudication; AND
(2)
the Pilot Program was not reauthorized, or replaced by another
program providing substantially the same immigration status benefits as the Pilot Program, within
12 months of such lapse (and such reauthorization or replacement is not then-pending); AND
(3)

such I-526 Petition has not been adjudicated.

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In either of the events described in clauses (i) or (ii) above, within 90 days of the General Partners
receipt of such notice (and such supporting documentation), the General Partner shall cause the
Partnership to return to such Alien Entrepreneur, in full satisfaction of its rights and interests in, to
and under its Partnership Interest and its Ancillary Legal Interest, the amount of such Alien
Entrepreneurs Capital Contribution, whereupon such Alien Entrepreneur shall, automatically and
without more, be deemed to have dissociated from the Partnership.
(iii)
to the effect that such Alien Entrepreneur wishes to withdraw, in
which event the General Partner, in its sole and absolute discretion, is authorized (but shall not be
required) to allow a Limited Partner to withdraw from the Partnership. Without limiting the
General Partners discretion under the immediately preceding sentence, as a condition to
authorizing withdrawal under this clause (iii), the subject Limited Partner is required to (i) accept in
full satisfaction of its rights and interests in, to and under its Partnership Interest and its Ancillary
Legal Interest ninety (90%) percent of the lesser of (x) the balance (but not less than zero) of its
Capital Account, or (y) its Capital Contribution, (ii) deliver to the Partnership an acknowledgement
that the subject withdrawal may disqualify such Limited Partner for eligibility under the EB-5
Immigrant Investor Program and a release of the General Partner and the Partnership from any
direct or consequential damages and all other consequences therefrom, and (iii) deliver to the
Partnership and the General Partner such other agreements as the General Partner may require.
Upon the delivery of the documents and payment of the amount described above, the subject
Limited Partner shall, automatically and without more, be deemed to have dissociated from the
Partnership.
(e)
The Limited Partners acknowledge that any withdrawal under Paragraph (d)
above may necessitate the replacement of the capital that was or is to be paid to the withdrawing
Alien Entrepreneur. The General Partner may, at any time and from time to time -(i)
create such additional classes of Partnership Interests having such
relative rights, powers and duties as such General Partner may establish, including rights, powers
and duties equal or junior to existing Partnership Interests; and
(ii)
whether or not in connection with clause (i) above, designate one or
more persons for admission as a Limited Partner and, in connection therewith, determine the
amount and the time or times at which shall be made, such person's Capital Contribution, the
Partnership Interests to which such person shall be entitled, and all other terms and conditions of
such person's admission as a Limited Partner (and in connection with which any such admission,
Exhibit A shall be modified as appropriate).
Each Limited Partner hereby consents to the admission to the Partnership of any additional Limited
Partner in accordance with this Paragraph (e).
(f)
Notwithstanding the foregoing, the Initial Limited Partner shall,
automatically and without more, be deemed to have dissociated from the Partnership upon the
admission of the first additional Limited Partner to be admitted.
(g)

Notwithstanding any other provision of this Section 15,

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(i)
the General Partner may suspend all Transfers for a period of up to 12
months whenever the General Partner reasonably determines, or is advised by counsel, that in light
of previous Transfers, any subsequent Transfer may reasonably be expected to result in a
termination of the Partnership under Tax Regulatory Requirements; and
(ii)
the General Partner will prohibit any Transfer (a) unless, in the
opinion of counsel for the Partnership or such other counsel satisfactory to the General Partner, such
Transfer will not violate, or cause the original issuance of Partnership Interests or the Partnership to
be in violation of, the securities laws, rules or regulations of the United States, including without
Limitations the Investment Company Act of 1940 any state thereof or any other jurisdiction, or (b)
if such Transfer would jeopardize the ability of any other Limited Partner to qualify under the EB-5
Immigration Investor Program to become a conditional lawful permanent resident of the United
States.
(h)
Upon the Transfer of any Partnership Interest, the Partnership may elect, in
the sole and absolute discretion of the General Partner, to adjust the basis of the Partnership
property under Tax Regulatory Requirements.
(i)
Upon the occurrence of the various events described in this Section, the
General Partner shall make appropriate modifications to Exhibit A; provided, however, that the
failure to make such modifications shall not affect the substantive rights or obligations of the
affected parties.
(j)
Nothing in this Agreement constitutes or is intended to constitute a guaranty
of repayment of a Limited Partners Capital Contribution or an agreement to redeem or repurchase a
Limited Partners Partnership Interest or its Ancillary Legal Interest.
Section 16.

Action by and Meetings of the Limited Partners.

(a)
Any consent, approval or determination in regard to any Partnership matter
committed by this Agreement or the Act for decision (in whole or in part) by the Limited Partners
may be (or shall be deemed to have been) expressed as follows:
(i)

by the signed written consent of a Limited Partner with or without a

meeting;
(ii)
by a Limited Partner's failure to respond to a written request for
consent sent by the General Partner to such Limited Partner, which failure to respond continues for
at least 30 days after the date upon which such request was deemed received by such Limited
Partner (which date shall be determined with reference to the date set forth in the return receipt with
respect to the mailing or delivery of such request by the General Partner); or
(iii)
by the affirmative vote of a Limited Partner or its duly authorized
proxy, registered orally or in writing at any meeting called to consider such matter and attended, in
person or by representatives holding written proxies, by a Supermajority-in-Interest of the Limited
Partners.

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(b)
Any matter requiring the vote, consent, approval, determination, election or
agreement of the Limited Partners pursuant to any provision of this Agreement or by law may be
considered at a meeting, to be held at the principal office of the Partnership or at such other place as
may be specified by the General Partner, or may be held by means of conference telephone or
similar methods of communication during which all persons participating may be heard
simultaneously, not fewer than five (5) days nor greater than sixty (60) days after written notice
thereof shall have been given by the General Partner. The General Partner may give such notice in
its discretion at any time, but shall be required to give such notice within fifteen (15) days after
receipt of a written request for such meeting from the Limited Partners holding a majority of the
total Partnership Interests held by all Limited Partners.
Section 17.

Dissolution and Winding Up of Partnership; Distribution of Assets.

(a)
The Partnership shall dissolve upon the final and non-appealable adjudication
of all I-829 Petitions filed by all Alien Entrepreneurs; provided, however, that the Partnership shall
not dissolve until the occurrence of the earliest of the following events to occur:
(i)

the expiration of the term of the Partnership as set forth in Section 6

above;
(ii)
the repayment to the Partnership of the Loan (as described and
defined in the Offering Memorandum) and all other loans as the Partnership may make consistent
with the carrying out of its purposes as described in Section 3 and in furtherance of the completion
of the Projects, together will all interest and other amounts due thereon;
(iii) the written consent of the General Partner and a Supermajority-inInterest of the Limited Partners;
(iv)

the written consent of all Limited Partners;

(v)
an event of withdrawal of the general partner within the meaning of
Section 3432 of the Act, unless there is at least one General Partner then remaining in office or
within 90 days after such event, a Supermajority-in-Interest of the Limited Partners has, by written
consent, appointed a replacement General Partner and determined to continue the business of the
Partnership, and the replacement General Partner has become legally bound by this Agreement (as
the same may be amended);
(vi)

the sale of all or substantially all of the assets of the Partnership;

(vii) the entry of a final judgment, order or decree of a court with

competent jurisdiction adjudicating the Partnership to be bankrupt, and the expiration of the period,
if any, allowed by applicable law in which to appeal therefrom; or
(viii) to the extent not otherwise inconsistent with this Section 17(a), as
provided in the Act.
(b)
After an event of dissolution, the General Partner or the Liquidation Trustee
shall wind up the affairs of the Partnership, and marshal, liquidate and distribute its assets in
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accordance with the Act; provided, however, the General Partner or the Liquidation Trustee shall
have full power and authority to defer liquidation of, or refrain from liquidating, any assets of the
Partnership if such action is deemed by the General Partner or the Liquidation Trustee to be in the
best interests of the Partnerships creditors and the Partners.
(c)
Distributions relating to dissolution shall be made as provided in Appendix II
and may be made in cash or other property (or a combination thereof).
(d)
No Limited Partner shall have any obligation to restore any negative balance
in its Capital Account upon dissolution or liquidation of the Partnership or otherwise, except as may
be required by the Act.
Section 18.

Amendment of Agreement.

(a)
This Agreement, including this Section 18, may be amended in whole or in
part only with the written consent of the General Partner, provided, however, that (i) each Limited
Partner to be affected must give its written consent to any amendment that would (A) increase the
amount of the Capital Contribution payable by such Limited Partner, (B) increase the liability of
such Limited Partner, or (C) cause such Limited Partners share of the Partnerships assets to be
modified unless all interests of persons or entities who are Partners are similarly modified, and (ii)
the additional consent of a Supermajority-in-Interest of the Limited Partners shall be required in
connection with any amendments that would (A) change the purpose of the Partnership, (B)
jeopardize the limited partners capacity to be admitted to the United States of America as
unconditional lawful permanent residents with their spouses and unmarried,, minor children
pursuant to the EB-5 Immigrant Investor Program, (C) modify in a manner adverse to the Limited
Partners any of the provisions of this Agreement, (D) impose additional obligations on the Limited
Partners, or (E) change the conditions for admission to the Partnership as a Limited Partner.
(b)
Notwithstanding Paragraph (a) above, this Agreement may be amended by
the General Partner without the approval of the Limited Partners (i) if such amendment is for the
purpose of documenting admission of a person as a General Partner or a Limited Partner in
accordance with the provisions of Sections 7(d), 14 or 15 above, (ii) as and to the extent determined
by the General Partner to be necessary to comply with the IN Act or the rules, regulations or other
administrative requirements of USCIS in order to comply with the requirements of and under the
EB-5 Immigrant Investor Program, or (iii) to merely cure any ambiguity, or correct or supplement
any provision of this Agreement which may be inconsistent with any other provision of this
Agreement, but only in a manner not inconsistent with the provisions of this Agreement, the
purposes of the Partnership, or the Offering Memorandum.
(c)
Without the express written consent of each Partner affected thereby, no
amendment shall reduce the Capital Account of any Partner or its rights to allocations and
distributions with respect thereto. The General Partner shall give prior written notice of any
proposed amendment to all of the Partners, which notice shall set forth the text of the proposed
amendment.
(d)
If the General Partner changes the conditions for admission of a Limited
Partner to the Partnership, any such new Limited Partners who are not admitted as Alien
Entrepreneurs will not be included among the Limited Partners for voting purposes with respect to
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any action or amendment to this Agreement that (1) expressly requires the consent of a
Supermajority-in-Interest of the Limited Partners, and (2) that eliminates rights safeguarding the
economic and EB-5 benefits accruing to the Alien Entrepreneurs.
Section 18A. Parallel Partnership.
(a)

Section 19.

General. The Limited Partners acknowledge that the Partnership shall

seek exemption from registration as an investment company, within the
meaning of the Investment Company Act, through qualification under
Section 3(c)(1) of the Investment Company Act. The General Partner
shall also form a parallel partnership ( the QP Fund) which shall be
governed by an agreement the terms of which are substantially identical
to those of this Agreement, but shall seek exemption from such
registration through qualification under Section 3(a)(7) of the Investment
Company Act (and shall restrict Transfers of its fund interests
accordingly). In order to most efficiently seek exemption from such
registration for both the Partnership and the QP Fund without materially
altering the economic rights and obligations of the Partners, the General
Partner, in its reasonable discretion, may at any time cause a Limited
Partner to exchange its interest in the Partnership for an economically
equivalent interest in the QP Fund or vice versa.
Power of Attorney.

(a) Each Limited Partner hereby makes, constitutes and appoints the General Partner
with full power of substitution and resubstitution, its true and lawful attorney, for it and in its name,
place and stead, with full power and authority to sign, execute, certify, acknowledge, swear to, file
and record all instruments amending, supplementing or canceling the Certificate, as the same may
hereafter be amended, supplemented or canceled consistent with the terms of this Agreement and as
may be appropriate, and to sign, execute, deliver, certify, acknowledge, swear to, file and record
such other agreements, instruments or documents (i) as may be necessary or advisable (A) to reflect
the exercise by the General Partner of any of the powers granted to it under this Agreement, or (B)
to reflect the admission to the Partnership of any Limited Partner or the dissociation of any Limited
Partner, in the manner prescribed in this Agreement; or (ii) which may be required of the
Partnership or of the Partners by the laws of the State of Vermont or any other jurisdiction for the
proper conduct of the Partnerships business. Each Limited Partner authorizes such attorney-in-fact
to take any further action which such attorney-in-fact shall consider necessary or advisable in
connection with any of the foregoing, hereby giving the General Partner, as attorney-in-fact, full
power and authority to do and perform each and every act or thing whatsoever requisite or advisable
to be done in and about the foregoing as fully as such Limited Partner might or could do if
personally present, and hereby ratifying and confirming all that such attorney-in-fact shall lawfully
do or cause to be done by virtue hereof.
(b) The power of attorney granted pursuant to Paragraph (a) of this Section 19
(i) is a special power of attorney coupled with an interest and is irrevocable;
(ii) may be executed by each such attorney-in-fact by listing all of the
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Limited Partners executing any agreement, certificate, instrument or document with the single
signature of any such attorney-in-fact acting as attorney-in-fact for all of them;
(iii) shall survive the delivery of a proper assignment by a Limited Partner of
its Partnership Interest, except that where the purchaser, transferee or assignee thereof has the right
to be, or with the consent of the General Partner is admitted as, a Limited Partner, the power of
attorney shall survive the delivery of such assignment for the sole purpose of enabling any such
attorney-in-fact to execute, acknowledge, swear to, file and record any such agreement, certificate,
instrument or document necessary to effect such admission; and
(iv) shall be binding on any permitted assignee of a Limited Partners
Partnership Interest.
Section 20.

Dispute Resolution Procedures.

(a)
Arbitration of Disputes. Any unresolved claim, controversy or dispute
arising with respect to the interpretation of this Agreement (including the scope and application of
this Section 20), or the performance of any duty under this Agreement or the Act, between or
among any of the Partners or the Partnership (a "Dispute") shall be submitted to final and binding
arbitration pursuant to the following provisions of this Section 20:
(i)
Any party to an unresolved Dispute shall have the right to file a
written Demand for Arbitration pursuant to this Section 20 with the Vermont Regional Office of the
American Arbitration Association nearest to the office of the Partnership in Vermont, whereupon
such party shall simultaneously send a copy of such Demand to the other party or parties to such
Dispute.
(ii)
Arbitration proceedings under this Section 20 shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration Association, except
that all substantive decisions and awards rendered shall be accompanied by a written opinion setting
forth the rationale for such decisions and awards.
(iii)
Venue for all evidentiary hearings conducted in such proceedings
shall be in the County in which the office of the Partnership in Vermont is located, unless otherwise
mutually agreed by the parties thereto.
(iv)
Unless otherwise agreed by the parties thereto, arbitration proceedings
under this Section 20 shall be conducted before one impartial arbitrator selected through the
procedures of the American Arbitration Association.
(v)
To the extent practicable, the arbitration proceedings under this
Section 20 shall be conducted in such manner as will enable completion within 120 days after the
filing of the Demand for Arbitration hereunder.
(b)
Awards. On all matters, the decisions and awards of the arbitrator shall be
determinative. Any award hereunder may include an order directing a party to perform and
prohibiting a party from violating its duties under this Agreement and the Act. The award may
include an allocation of legal fees, costs of arbitration and interest to the substantially prevailing
- 16 -

party, but punitive damages shall not be allowed. The award may be enforced in such manner as
allowed by law.
(c)
Injunctive Relief. The parties agree that during the pendency of any
arbitration, if injunctive relief is not able to be granted through the arbitration, then a party shall be
permitted to seek such relief through a court of applicable jurisdiction.
Section 21.

Miscellaneous.

(a)
Any payment, notice or other communication given pursuant to any provision
of this Agreement or the Act shall be in writing and shall be deemed to have been delivered if sent
by electronic mail (e-mail) as well as by facsimile transmission (to the coordinates provided by the
recipient), or if sent by a reputable courier service, postage and charges prepaid:
(i)
To the Partnership or the General Partner, if addressed to the office of
the Partnership in Vermont.
(ii)
To any Limited Partner, if addressed to that Limited Partner at its
business or residence address shown in the Partnership records.
(b)
Section references contained in this Agreement relate to sections of this
Agreement unless specific reference is made to the Act. References herein to persons includes
entities as well as natural persons.
(c)
The provisions of this Agreement shall be deemed severable, and the
invalidity or unenforceability of any provision shall not affect the validity or enforceability of the
remainder of this Agreement.
(d)
The provisions of this Agreement, as written in English, control their
respective meanings and effects. No translation hereof into another language shall affect the
provisions or enforceability hereof as written and determined in English.
(e)
The laws of the State of Vermont, excluding its choice of law provisions,
shall govern this Agreement.
(f)
This Agreement may be executed in any number of counterparts with the
same effect as if all parties hereto had signed the same document. All counterparts shall be
construed together and shall constitute one Agreement.
(g)
The terms of this Agreement supersede any description of the Partnership as
discussed or appearing in any other document, including any oral or written communication
between or among the parties and/or their respective counsel.
(h)
Each and every covenant, term, provision and agreement herein contained
shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs,
personal representatives, successors and assigns.
(i)

A copy of the Certificate and each amendment thereto and cancellation

- 17 -

thereof, and any other document filed by the Partnership or the General Partner in the office of the
Secretary of State, State of Vermont shall be delivered to any Limited Partner requesting same, but
not otherwise.

[EXECUTION PAGE FOLLOWS]

- 18 -

83/@7/2.613 !3228

6I428a3434

PAGE O3/83

HYATTREGENCV

wlTNEsstheduoexecutionhoreofasoftlredatefirstsetforthabove.

GENEMLPARTNER:
LL(
SNOWGPSERVICES'
r'NCiUIIT

LIMITEDPARTNER:
TNITTAL
DOUGLASI{AUER

--/--*-----.---l

-19-

EXHIBIT A

Name and Address

Capital Contribution

Partnership Interest

General Partner:
ZZZ

, LLC

0.01%

Limited Partners:
$

-i-

EXHIBIT A (cond)
$

Total Partnership Interests of All

Limited Partners:

- ii -

99.99%

EXHIBIT B
DESCRIPTION OF PROJECT AND LOAN
The total anticipated investment from Qualified Investors is $52,000,000. The
Partnership and Carinthia Group 2, L.P. (collectively, the Partnerships) will use the proceeds
of their offerings to fund loans that will be advanced to newly created wholly-owned subsidiaries
of Mount Snow Ltd. (Mount Snow) to finance the development of two capital projects for the
Mount Snow Ski Resort in West Dover, Vermont (the Resort). The Resort is owned and
operated by Mount Snow which is a wholly owned subsidiary of Peak Resorts, Inc. In essence,
the Alien Entrepreneurs will invest in the Partnerships which will in turn loan the Alien
Entrepreneurs funds directly to the developers of the job-creating projects, West Lake, LLC and
Carinthia Ski Lodge, LLC as described below.
The Partnerships will establish a non-revolving line of credit facility and collectively loan
up to $30,000,000 to West Lake LLC, a wholly-owned subsidiary of Mount Snow, to facilitate
the construction of a new water storage reservoir and dams for snowmaking with capacity of up
to 120 million gallons, three new pump houses and the installation of snowmaking pipelines, trail
upgrades and expansion, new ski lift and ancillary equipment (the "West Lake project"). The
line of credit will be in the minimum amount of $500,000 and a maximum principal amount of
$30,000,000 based upon the number of units sold pursuant to the offering described in the
Offering Memorandum. The line of credit will be extended pursuant to a loan agreement
between the Partnerships and West Lake LLC and will be evidenced by a non-revolving line of
credit note and subject to a guaranty of collection by Peak Resorts, Inc. (collectively, the "West
Lake Loan Documents").
The Partnerships will establish a non-revolving line credit facility and collectively loan
up to $22,000,000 to Carinthia Ski Lodge LLC, a wholly-owned subsidiary of Mount Snow, for
the construction of Carinthia Ski Lodge, a new three-story approximately thirty six thousand
square-foot skier service building located at the base of the Carinthia slopes providing a
restaurant, cafeteria and bars with seating for over six hundred people, a retail store, convenience
store and sales center for lift tickets and rentals (the "Carinthia Ski Lodge project"). The line of
credit will be in the minimum amount of $500,000 and a maximum principal amount of
$22,000,000 based upon the number of units sold pursuant to the offering described in the
Offering Memorandum. The line of credit will be extended pursuant to a loan agreement
between the Partnerships and Carinthia Ski Lodge LLC and will be evidenced by a nonrevolving line of credit note and subject to a guaranty of collection by Peak Resorts, Inc.
(collectively, the "Carinthia Ski Lodge Loan Documents").
To the extent that the offering is not fully subscribed and less than $52,000,000 is raised,
the Partnerships will allocate up to the first $30,000,000 of subscriptions received and accepted
to West Lake LLC for the development of the West Lake project. The West Lake project will be
developed in three tranches consisting of $10,000,000 (tranche one), $12,500,000 (tranche two)
and $7,500,000 (tranche three). To the extent that the General Partner accepts subscriptions for
any tranche and the proceeds resulting from such subscriptions do not equal the amount for such
tranche set forth above, Mount Snow will make alternative arrangements to finance the balance
of the tranche. If and when subscriptions received exceed $30,000,000, the next $22,000,000
will be allocated to Carinthia Ski Lodge LLC for the development of the Carinthia Ski Lodge.

To the extent that the General Partner accepts subscriptions for the development of the Carinthia
Ski Lodge and the proceeds resulting from such subscriptions do not equal $22,000,000, Mount
Snow will make alternative arrangements to finance the balance required to complete the project.
Without altering the economic rights and obligations of the Partners, the General Partner,
in its reasonable discretion, may at any time cause a Limited Partner to exchange its interest in
the Partnership for an economically equivalent interest in Carinthia Group 2, L.P.
The parties intend that the West Lake project and the Carinthia Ski Lodge project will
stimulate economic activity and preserve and create jobs at the Resort and have a significant
economic impact on the local economy within the State of Vermont Regional Center and reach
into the Northeastern United States and the rest of the United States.

--2--

APPENDIX I
DEFINITIONS
"Act" means Chapter 23 of the Vermont Statutes (11 V.S.A. 3401 et. seq.) and, to the
extent applicable to limited partnerships, Chapter 22 of the Vermont Statutes (11 V.S.A. 3201
et. seq.).
Adjusted Capital Account Deficit means, with respect to any Partner, the deficit
balance, if any, in such Partners Capital Account after giving effect to the following
adjustments:
(a) credit to such Capital Account any amounts which such Partner is obligated to
restore pursuant to any provision of this Agreement or is deemed to be obligated to restore
pursuant to Treasury Regulation 1.704-1(b)(2)(ii)(c), the penultimate sentence of Treasury
Regulation 1.704-2(g)(1), or the penultimate sentence of Treasury Regulation 1.704-2(i)(5);
and
(b) debit to such Capital Account the items described in Treasury Regulation
1.704-1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the
provisions of Treasury Regulation 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
Administrative Fee means a separate fee to be paid by each Limited Partner in
accordance with such Limited Partners Subscription Agreement to reimburse and compensate
the General Partner and/or its Affiliates for its costs incurred (or to be incurred) and/or services
provided (or to be provided) in respect of Organizational Expenses, Pre-Operating Expenses and
Syndication Expenses.
Affiliate means, with respect to any Partner, any person that directly or indirectly
controls, is controlled by, or is under common control with, such Partner. Control means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a person, whether through ownership of voting securities, by contract or
otherwise.
Agreement means this Limited Partnership Agreement, as it may be amended and
supplemented from time to time, and all Appendices attached hereto.
Alien Entrepreneur means a Limited Partner who is not a citizen or lawful permanent
resident of the United States and who is seeking to obtain conditional lawful permanent
residency status in the United States through the EB-5 Immigrant Investor Program.
Ancillary Legal Interest means all the rights of a Partner expressed or implied by this
Agreement or arising under the Act (or otherwise at law or in equity), including the right to grant

I-1

or withhold consents and approvals in Partnership affairs, but does not include the economic
rights of a Partner encompassed by the definition of Partnership Interest below.
Available Cash means all funds (including liquid investments) of the Partnership,
from all sources, on hand from time to time, including (without limitation) all cash obtained from
current activities and operations of the Partnership and from any sales of the assets of the
Partnership and available to the Partnership after the General Partner has made reasonable
provision (i) for the working capital requirements of the Partnership, to enable the Partnership to
carry out its purposes, and (ii) to enable the Partnership to satisfy its contractual and other legal
obligations to creditors. The General Partner's determinations as to the amount of Available
Cash, from time to time, shall be conclusive.
Capital Account means the capital account of each Partner established and maintained
under this Agreement.
"Capital Commitment", in respect of any Partner, means that which is agreed to be
contributed to the capital of the Partnership by such Partner without regard to such Partner's
Capital Contribution.
Capital Contribution means, with respect to any Partner, the amount of cash and/or
the mutually agreed fair value of the property actually contributed to Partnership capital by such
Partner, as determined on the date of contribution.
Certificate refers to the Certificate identified in the Preamble.
"EB-5 Immigrant Investor Program" refers to a program that exists under and pursuant
to the IN Act for the purpose of enabling Alien Entrepreneurs to obtain EB-5 visas under United
States law.
Excess Losses see Section 9(b).
Fiscal Year means the Partnerships fiscal year, which shall commence on January 1
and end on December 31 of each year, except that such term shall also include any other period
for which the Partnership is required to allocate Profits, Losses or any items of income, gain, loss
or deduction.
General Partner means Mount Snow GP Services, LLC, a Vermont limited liability
company, and any other person who becomes a General Partner in accordance with this
Agreement or the Act.
I-526 Petition refers to USCIS Form I-526, Immigrant Petition by Alien Entrepreneur,
to be filed by an Alien Entrepreneur with the USCIS under and in accordance with the EB-5
Immigrant Investor Program.
I-829 Petition refers to USCIS Form I-829, Petition By Entrepreneur to Remove
Conditions, to be filed by an Alien Entrepreneur with the USCIS under and in accordance with

I-2

the EB-5 Immigrant Investor Program.

"IN Act" means the Immigration & Nationality Act, 8 U.S.C. 1153.
Initial Limited Partner means Douglas Hauer.
Limited Partner means the Initial Limited Partner and any other person who becomes
admitted as an Limited Partner in accordance with this Agreement.
Liquidation Trustee means the person chosen, if a General Partner is not then serving
as such, by a Supermajority-in-Interest of the Limited Partners to wind up the affairs of the
Partnership in accordance with Section 3473 and other applicable provisions of the Act and this
Agreement.
Losses for any Fiscal Year or period means the excess, if any, of the items of loss and
deduction over the items of income and gain of the Partnership as recorded on its financial
accounting books and records for such Fiscal Year or period.
Majority-in-Interest of the Limited Partners means those Limited Partners holding
more than Fifty (50%) percent of the total of the Partnership Interests held by all Limited
Partners.
Offering Memorandum means that certain Private Placement Memorandum of
Carinthia Group I, L.P. and Carinthia Group 2, L.P. dated February 27, 2014, as the same may be
amended or supplemented.
Organizational Expenses means the fees, costs and expenses of, and incidental to, the
organization of the Partnership. Such expenses shall include any and all amounts categorized as
organizational expenses under the Code, including without limitation, expenditures for legal,
accounting and professional fees incurred in connection with the formation of the Partnership,
structuring and preparation of this Agreement, organizational meetings and establishing the
books and records of the Partnership.
Partners means the General Partner and the Limited Partners, and each of them
individually.
Partnership means the limited partnership formed pursuant to the Certificate.
Partnership Interest means a Partners economic rights under this Agreement to
share in Profits and Losses and to receive distributions of Available Cash or other Partnership
assets, but does not include a Partners Ancillary Legal Interest.
Pre-Operating Expenses means the investigative fees, costs and expenses incidental
to the creation of the Partnership and the fees, costs and expenses incurred prior to the
commencement of operations of the Partnership. Such expenses shall include any and all
amounts categorized as "start-up expenditures" under the Code.

I-3

Profits for any Fiscal Year or period means the excess, if any, of the items of income
and gain over the items of loss and deduction of the Partnership as recorded on its financial
accounting books and records for such Fiscal Year or period.
Projects means the West Lake project and the Carinthia Ski Lodge project, each as
more fully described in Exhibit B.
Related Party Transaction means any actual or proposed transaction of the
Partnership directly or indirectly with any one or more of the General Partner or any Affiliate of
the General Partner.
Subscription Agreement means the Subscription Agreement included in Section 4 of
the Offering Memorandum.
Supermajority-in-Interest of the Limited Partners means those Limited Partners
holding more than Sixty-Six and two-thirds (66-2/3%) percent of the total of the Partnership
Interests held by all Limited Partners.
Syndication Expenses means expenses incurred to promote the sale of, or to sell,
Partnership Interests.
Tax Code means the Internal Revenue Code of 1986, as amended from time to time.
Tax Distributions see Section 10(a) and Appendix II.
Tax Regulatory Requirements means legal duties and requirements imposed by the
Tax Code, Treas. Reg. 1.704 1(b)(a)(iv) or any other provision of the Income Tax Regulations
promulgated under the Tax Code, as the same may be amended from time to time (and including
corresponding provisions of any successor statutes or governmental regulations).
Transfer includes an assignment, conveyance, grant or suffering the existence of a
security interest or other lien or encumbrance, inter vivos gift and testamentary disposition, and
any other disposition (whether voluntary or by operation of law) of a Partners Partnership
Interest or Ancillary Legal Interest, in whole or in part; and in the case of the General Partner,
also entering into a merger or other form of business combination transaction with, or issue of
voting securities to, any person other than an Affiliate of the General Partner.
Unauthorized Conduct means, with respect to any Limited Partner, directly or
indirectly, (i) executing any instrument, (ii) conveying title to any Partnership property, (iii)
making any oral or written admission or representation, (iv) accepting notice from any third
party or service of process, (v) receiving money or property of a third party, or (vi) taking any
action to bind the Partnership after dissolution or in connection with winding up its affairs;
provided, however, the foregoing shall not apply to a person who has been (x) duly elected a
manager or managing member of the General Partner, or (y) duly appointed by the General
Partner as an officer, employee or agent of the General Partner, or the Partnership or (z) duly

I-4

appointed as a Liquidation Trustee, when such person acts in any such indicated capacity.
Unit means the smallest whole number representing the ownership share of a holder
(whether or not the holder has been admitted as a Partner) in the aggregate of the Partnership
Interests.
Unprotected Misconduct means, with respect to the General Partner, either of the
following: (i) any willful and material violation of law that has a material adverse financial effect
upon the Partnership; or (ii) an intentional act or omission constituting fraud, embezzlement or
misappropriation in connection with the business, assets and properties, accounts or reports of
the Partnership.
USCIS means the United States Citizenship and Immigration Services.

I-5

APPENDIX II
ADDITIONAL CAPITAL ACCOUNT MAINTENANCE, ALLOCATION AND
DISTRIBUTION PROVISIONS
I.
Definitions.
this Appendix II:

The following definitions are applicable to the requirements as set forth in

"Nonrecourse Deduction" has the meaning set forth in Treas. Reg. 1.704-2(b).
"Partnership Minimum Gain" has the meaning set forth in Treas. Reg. 1.704-2(d).
"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in Treas. Reg.
1.704-2(i).
"Partner Nonrecourse Deduction" has the meaning set forth in Treas. Reg. 1.704-2(i).
"Partner Nonrecourse Loan" means a loan made to, or credit arrangement for the
benefit of, the Partnership by a Partner or by a person related to a Partner (as defined in Treas.
Reg. 1.752-4(b)) which by its terms exculpates the Partners from personal liability on the debt,
but under which such Partner or related person bears the ultimate economic risk of loss within
the meaning of Treas. Reg. 1.752-2.
II.
Capital Accounts. If allocations are required pursuant to Parts III (B) (ii) or (iii) of this
Appendix II, then the adjustments to the Capital Accounts of the Partners in respect of the
property described therein shall be made in accordance with Treas. Reg. 1.704-1(b)(2)(iv)(g) for
allocations to them of items of income, gain, loss and deduction (including depreciation,
depletion, amortization and other cost recovery) as computed for book purposes, and no further
adjustments shall be made to the Capital Accounts to reflect the Members' shares of the
corresponding tax items. For purposes of computing such adjustments to the Capital Accounts,
the Partnership will utilize the method of computing depreciation, depletion or amortization with
respect to such property as is utilized for federal income tax purposes except that the property's
value for book purposes will be used rather than its adjusted tax basis.
III.

Allocations of Profits and Losses.

(A)
Special Allocations. Notwithstanding any other provision of this Agreement, the
following allocations shall be made for each Fiscal Year prior to the making of any other
allocations under this Agreement and in the following order of priority:
(i)
If there is a net decrease in Partnership Minimum Gain during any Fiscal
Year such that an allocation is required by Treas. Reg. 1.704-2(f), items of income and gain shall
be allocated to the Partners in the manner and to the extent required by such Regulation. This
provision is intended to be a minimum gain chargeback within the meaning of Treas. Reg.
1.704-2(f)(1) and shall be interpreted and applied consistently therewith.

II-1

(ii)
If there is a net decrease in the minimum gain attributable to a Partner
Nonrecourse Loan during any Fiscal Year such that an allocation is required by Treas. Reg.
1.704-2(i)(4) (minimum gain chargeback attributable to a Partner nonrecourse debt), items of
income and gain shall be allocated in the manner and to the extent required by such Regulation.
(iii)
If a Partner receives any adjustments, allocations, or distributions
described in subclauses (4), (5) or (6) of Treas. Reg. 1.704-1(b)(2)(ii)(d), items of Partnership
income and gain shall be specially allocated to such Partner in an amount and manner sufficient
to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of
such Partner as quickly as possible, provided that an allocation pursuant to this subsection shall
be made only if and to the extent that such Partner would have an Adjusted Capital Account
Deficit after all other allocations provided for in Section 9 of the Agreement and this Paragraph
(A) have been tentatively made as if this subparagraph (iii) were not in this Appendix.
(iv)
Nonrecourse Deductions, if any, for any Fiscal Year or period shall be
allocated to the Partners in an amount equal, and in proportion, to the allocation of Profits for
such Fiscal Year or period pursuant to Section 9 of the Agreement.
(v)
Any Partner Nonrecourse Deduction shall be allocated to the Partner who
bears the economic risk of loss with respect to the loan giving rise to such deduction within the
meaning of Treas. Reg. 1.752-2.
(B)

Tax Allocations.

(i)
For federal, state and local income tax purposes, all items of taxable
income, gain, loss and deduction for each Fiscal Year shall be allocated among the Partners in
accordance with the manner in which the corresponding items were allocated under Section 9
and the applicable provisions of this Appendix II, except as otherwise provided in this Paragraph
(B).
(ii)
If property is contributed to the Partnership by a Partner and there is a
difference between the basis of such property to the Partnership for federal income tax purposes
and the fair market value at the time of its contribution, then items of income, gain, loss and
deduction with respect to such property as computed for federal income tax purposes (but not for
book purposes) shall be shared among the Partners so as to take account of such difference as
required by Section 704(c) of the Tax Code.
(iii)
If property of the Partnership (other than property described in
subparagraph (ii) of this Paragraph (B)) is reflected in the Capital Accounts of the Partners and
on the books of the Partnership at a book value that differs from the adjusted basis of such
property for federal income tax purposes by reason of a revaluation of such property, then items
of income, gain, loss and deduction with respect to such property for federal income tax purposes
(but not for book purposes) shall be shared among the Partners in a manner that takes account of
the difference between the adjusted basis of such property for federal income tax purposes and
its book value in the same manner as differences between adjusted basis and fair market value
are taken into account in determining the Partners shares of tax items under Section 704(c) of
II-2

the Tax Code.

IV.

Tax Distributions.

(A)
Within 90 days after the end of each Fiscal Year, the Partnership may, at
the reasonable discretion of the General Partner, distribute to each Partner from Profits allocated
to such Partner under Section 9 of the Agreement cash in an amount (the "Tax Distributions")
equal to the product of (i) such allocated Profits, multiplied by (b) the highest individual U.S.
federal income tax rate effective in such Fiscal Year (not including the rate of withholding
applicable to nonresident alien partners under Section 1446 of the Tax Code). Tax Distributions
shall be treated as non-interest bearing advances of, and shall be credited against, the first
distributions otherwise to be made to such Partner in accordance with Section 10 of the
Agreement.
(B)
The General Partner shall cause the Partnership to be responsible for
making income tax payments to the Internal Revenue Service with respect to the nonresident
alien Partners pursuant to Section 1446 of the Tax Code (the "Section 1446 Payments"), which
payments shall constitute constructive distributions to such Partners (and shall be credited
against the amount of distributions owing to each such Partner pursuant to the preceding
Paragraph (A)). In the event that the Section 1446 Payments made on behalf of any particular
Partner exceeds the Tax Distributions required to be distributed in accordance with the preceding
Paragraph (A) to such Partner, such excess shall be treated as a loan to such Partner, which loan
shall bear interest at 10% per annum, non-compounded, and (along with accrued interest) shall
be withheld by the Partnership from the first distributions otherwise to be made to such Partner
in accordance with Section 10 of the Agreement.
(C)
Notwithstanding the provisions of the preceding Paragraph (A), Tax
Distributions otherwise required to be made to any Partner with respect to any Fiscal Year
pursuant to this Part IV shall be reduced by the amount of any other cash distributions (other
than in return of capital) made by the Partnership to such Partner during such Fiscal Year or
within 90 days thereafter; provided, however, that any Tax Distribution made within 90 days
after the beginning of any Fiscal Year with respect to a prior year shall be accounted for as a Tax
Distribution for such prior Fiscal Year.
(D)
The Partnership, in the sole discretion of the General Partner, may make
Tax Distributions to the Partners during any Fiscal Year to enable them to satisfy their liabilities
to make estimated tax payments with respect to such Fiscal Year or the preceding Fiscal Year
based on calculations of the Partners' estimated tax liabilities made pursuant to this Part IV as of
such dates as the General Partner in its sole discretion may determine.
V.

Allocations and Distributions upon Winding Up.

(A)
Prior to any distribution relating to dissolution of the Partnership, the
General Partner or the Liquidation Trustee shall adjust each Partners Capital Account to reflect
the manner in which the unrealized income, gain, loss and deduction inherent in the Partnerships
property (that has not been reflected in the Partners Capital Accounts previously) would be
II-3

allocated among the Partners if there were a taxable disposition of such property for the fair
market value of such property (taking Section 7701(g) of the Tax Code into account) on the date
of distribution.
(B)
Distribution to the Partners of the Partnership assets upon dissolution shall
be made in accordance with the net credit balances in their respective Capital Accounts as
determined after taking into account all Capital Account adjustments for the Partnership taxable
year during which such dissolution and winding up occurs (other than those made pursuant to
this Paragraph (B) or the following Paragraph (C)) by the end of such taxable year (or, if later,
within 90 days after the date of such dissolution and winding up).
(C)
If the General Partner has a deficit balance in its Capital Account
following the distribution of Partnership assets upon dissolution, as determined after taking into
account all Capital Account adjustments for the taxable year during which such dissolution
occurs (other than those made pursuant to this Paragraph (C)), the General Partner shall be
required to restore the amount of such deficit to the Partnership as soon as practicable but in no
event later than the end of such taxable year (or, if later, within 90 days after the date of the
Partnership's liquidation), which amount shall be paid to the Partnership's creditors or distributed
to the Partners in accordance with their respective positive Capital Account balances in
accordance with Paragraph (B); provided, however, that no Partnership creditor may rely upon
this sentence in order to create an obligation of the General Partner to pay a Partnership debt
which the General Partner is not otherwise personally obligated to pay.

II-4
7366839v.9

CARINTHIA GROUP 2, L.P.

LIMITED PARTNERSHIP AGREEMENT

March 4, 2014

THE PARTNERSHIP INTERESTS (THE SECURITIES) OFFERED HEREBY HAVE

NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE SECURITIES ACT), AND MAY NOT BE OFFERED OR SOLD IN THE
UNITED STATES OR TO A U.S. PERSON UNLESS THE SECURITIES ARE
REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM
REGISTRATION IS AVAILABLE. HEDGING TRANSACTIONS INVOLVING THE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT. ADDITIONAL RESTRICTIONS ON TRANSFER OF THE

PARTNERSHIP INTERESTS OR INTERESTS THEREIN ARE SET FORTH IN THIS

AGREEMENT.

27142904v.3

CARINTHIA GROUP 2, L.P.

LIMITED PARTNERSHIP AGREEMENT

This Limited Partnership Agreement, dated as of March 4, 2014, is entered into between and
among Mount Snow GP Services, LLC, a Vermont limited liability company, as the General
Partner,
AND
Douglas Hauer as the Initial Limited Partner, and the additional persons listed Exhibit A
hereto who have taken such steps as are set forth in and required by the Offering Memorandum and
Subscription Agreement, who have joined herein and agreed to be bound hereby, and who have
been admitted as Limited Partners to the Partnership by the General Partner, as Limited Partners.
PREAMBLE
The Partnership

was formed under the name CARINTHIA GROUP 2, L.P. pursuant to a Certificate of
Limited Partnership filed in the office of the Secretary of State, State of Vermont on or
about March 4, 2014, and is being organized under this Limited Partnership Agreement.

was formed to undertake certain lending transactions to facilitate development Projects

and to stimulate economic activity and create full-time jobs, all as more fully described
in the attached Exhibit B.
AGREEMENTS

Therefore, with the intent to be legally bound, the parties agree that, from and after the date
of this Agreement, the affairs of the Partnership shall be governed by, and its business shall be
conducted in accordance with, the following terms and provisions:
Section 1.
Certain Definitions. Except as the context may otherwise require, when used
in this Agreement, terms in capitalized form shall have the meanings ascribed to them in the
attached Appendix I.
Section 2.

Name, Organization, Limited Liability, Office and Agent.

(a)

As stated in its Certificate, the name of the Partnership is:

CARINTHIA GROUP 2, L.P.

The Partnership may conduct business under any other name selected by the General Partner.
(b)
To the fullest extent permitted by law, the internal affairs of the Partnership
shall be governed by, and its business shall be conducted in accordance with, this Agreement.

(c)
To the fullest extent allowed by law, each Limited Partner will be protected
and immune from personal liability for any and all debts, obligations and liabilities of the
Partnership, or chargeable to the Partnership, and for the acts of any other Partner, employee or
agent of the Partnership.
(d)
The street address and mailing address of the Partnerships office in which
shall be located the records required to be maintained by Section 3405 of the Act shall be 89 Grand
Summit Way, West Dover, VT 05356. The General Partner may designate a different address of
the Partnerships office by amending the Certificate in accordance with the Act.
(e)
The name and address of the Partnerships initial registered agent in Vermont
are Thomas J. Montemagni, Esq., P.O. Box 2805, 39 Mount Snow Road, West Dover, Vermont
05356. The General Partner may designate a different name and address of its registered agent by
amending the Certificate in accordance with the Act.
Section 3.
(a)

Purposes and Powers of the Partnership.

The Partnership is organized for the purposes of ---

(i)
assisting not more than 6 Alien Entrepreneurs make qualifying (socalled at risk) investments in a commercial enterprise which, though not restricted to such
investments, that is intended to meet the requirements of Section 203(b)(5)(A)-(D) of the IN Act,
thus making such Alien Investors eligible for the immigration benefits available under the EB-5
Immigrant Investor Program;
(ii)
using its reasonable efforts, assisting independent legal counsel acting
for EB-5 Investors with the filing of each of the Alien Entrepreneurs required petitions under the
EB-5 Immigrant Investor Program with the USCIS;
(iii)
as noted in the Preamble, entering into the lending arrangements in
respect of the Projects all as further described and defined in the attached Exhibit B and the
Offering Memorandum, and otherwise carrying out the purposes of the Partnership as set forth
therein.
(b)
The Partnership shall have and may exercise any right, power, franchise or
privilege that a domestic corporation engaged in the same business might exercise under the laws of
Vermont. The powers of the Partnership will therefore include those enumerated in Section 3.02 of
the Vermont Business Corporation Act (11A V.S.A. 1.01 et. seq.).
Section 4.
General Partners Powers, Authority and Duties; Engagement of Affiliates
and Reimbursement of Expenses; Role and Activities of Limited Partners.
(a)
All powers of the Partnership referred to in Section 3(b) above and otherwise
conferred by law shall be exercised by or under the authority of, and the business of the Partnership
shall be conducted by or under the direction of, the General Partner. Accordingly,
(i)
No Partner, other than the General Partner acting in that capacity,
shall have any right to participate in conducting or controlling the Partnerships business or any
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authority to act as an agent of the Partnership.

(ii)
The Limited Partners shall have the right to participate in the
management of the business of the Partnership -(1)
by making suggestions or recommendations to the General
Partner on issues of policy important to the Partnership;
(2)

as set forth in Paragraph (b) below; and

(3)
by voting on or otherwise consenting (or failing to consent) to
matters reserved to the Limited Partners under this Agreement;
provided, however, that no Limited Partner shall have the power or authority to bind the Partnership
or to sign any agreement or document in the name of the Partnership, and, provided, further, that the
foregoing provisions of this clause (ii) and the voting or approval of the Limited Partners as set
forth in this Agreement shall not be deemed to be participation in the control of the business or
affairs of the Partnership.
(iii)
Each Limited Partner shall be prohibited from engaging in any
Unauthorized Conduct on behalf of the Partnership or in its name.
(iv)
The Partnership shall not be required to indemnify any Limited
Partner (in its capacity as such) for any payments made in connection with the conduct of the
Partnerships business or the preservation of its business or property.
(b)
Notwithstanding Paragraph (a)(i) above, without the consent of a Majorityin-Interest of the Limited Partners, the General Partner shall not
(i)
amend or waive any provision of the West Lake Loan Documents or
the Carinthia Ski Lodge Loan Documents (as defined in Exhibit B).
(ii)
take any action that would intentionally jeopardize or would
reasonably be expected to jeopardize any of the limited partners capacity to be admitted to the
United States of America as unconditional lawful permanent residents with their spouses and
unmarried, minor children pursuant to the EB-5 Immigrant Investor Program; or
(iii) (1) borrow from the Partnership any funds that (a) have been
contributed to the Partnership as Capital Contributions from Alien Entrepreneurs or (b) have been
received as interest payments on, or repayment of principal of, loans extended by the Partnership to
West Lake, LLC and Carinthia Ski Lodge, LLC (where such loans were funded by the Capital
Contributions of the Limited Partners) or (2) commingle such funds with the funds of any other
entity; provided that Affiliates of the General Partner may borrow such funds from the Partnership
solely for the borrowers deployment of such funds in the Projects provided such borrowing does
not intentionally jeopardize any of the Limited Partners capacity to be admitted to the United States
of America as unconditional lawful permanent residents with their spouses and unmarried, minor
children pursuant to the EB-5 Immigrant Investor Program.

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(c)
The General Partner shall perform its functions in good faith; with such care,
including reasonable skill, diligence and inquiry, as a person of ordinary prudence would use in
similar circumstances; and in such manner as the General Partner reasonably believes to be lawful,
practicable, in conformity with its duties of loyalty and care, and in furtherance of the purposes of
the Partnership.
(d)
The General Partner may, in the name and on behalf of the Partnership, enter
into Related Party Transactions or other agreements with third parties for the performance of
services for and on behalf of the Partnership and the Limited Partners and obligate the Partnership
to pay or reimburse the payment of compensation and fees for and on account of any such services;
provided, however, that such compensation and fees are fair and reasonable as to the Partnership at
the time the same are authorized.
(e)
The General Partner may make loans to the Partnership, in its discretion,
which loans shall be (i) on terms that are fair and reasonable at the time such loans are made, and
(ii) used by the Partnership for deployment in the Projects. Any such loans from the General
Partner shall be repaid in full by the Partnership prior to any distributions being made by the
Partnership to the Partners.
(f)
In the event of a default under the West Lake Loan Documents or the
Carinthia Ski Lodge Loan Documents, the General Partner will act in a commercially reasonable
manner in enforcing the Partnerships rights thereunder.
(g)

Each Alien Entrepreneur hereby acknowledges and agrees ---

(i)
that, notwithstanding any provision of the Offering Memorandum, the
Subscription Agreement or this Agreement to the contrary, the responsibility for the preparation,
content and filing of each of the I-526 Petition and the I-829 Petition, and any other governmental
forms required under or pursuant to an Alien Entrepreneurs participation in the EB-5 Immigrant
Investor Program, remains solely with such Alien Entrepreneur;
(ii)
to file his/her I-526 Petition within 90 days after becoming a Limited
Partner and, in addition, to file all other applications and petitions respecting his/her lawful
permanent resident status within the United States within a reasonable time of becoming eligible to
do so;
(iii)
that it may be beneficial to file his/her I-829 Petitions as soon as
he/she is entitled to do so in the event that fewer than all of the jobs projected to be created by the
Project are actually created, recognizing that such jobs will be allocated with preference first to
those Alien Entrepreneur whose I-829 Petitions are approved, and then to those Alien Entrepreneur
who have obtained lawful permanent admission to the United States.
Section 5.
Other Activities of Partners Not Restricted. The General Partner shall not be
deemed in violation of any legal or equitable duty or any duty under this Agreement by reason of,
and no Limited Partner shall be prohibited from, directly or indirectly (i) making investments in and
loans to other business ventures of any nature, independently of and without being held accountable
to the Partnership and the other Partners, or (ii) rendering services to any such other business
ventures. The foregoing shall apply whether or not the other venture is or will be engaged in a
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business the same or similar to the business of the Partnership.

Section 6.
Term. The Partnership shall continue for a term of 20 years from the date of
admission of the last Limited Partner to be admitted.
Section 7

Capital Contributions.

(a)
Partnership Interests will be issued under this Agreement and held by the
General Partner and the Limited Partners. For convenience of administration, Partnership Interests
may, in the discretion of the General Partner, be denominated in Units, and such Partnership
Interests (or Units) may be certificated.
(b)
(i)
The General Partner shall contribute to the capital of the Partnership
the amount set forth opposite its name on Exhibit A.
(ii)
The General Partner is authorized in its sole discretion, but shall not
be obligated to any Limited Partner, to contribute additional amounts to the capital of the
Partnership in order to fund the Partnerships requirements for working capital. The General
Partner acknowledges that any such additional contribution will be for the primary benefit of the
General Partner or its Affiliates by enhancing the eligibility of the Alien Entrepreneurs to obtain the
benefits of the EB-5 Immigrant Investor Program and, for that reason, the General Partners
Partnership Interest and its Ancillary Legal Interest shall not be increased by any such additional
Capital Contribution.
(c)
The Initial Limited Partner shall not be required to make a Capital
Contribution. See Section 15(e).
(d)
(i)
Each Limited Partner, other than the Initial Limited Partner, shall
contribute to the capital of the Partnership the amount (not less than US$500,000) so committed by
such Limited Partner in its Subscription Agreement (and shown on Exhibit A).
(ii)
As a condition to the acceptance of the Limited Partners Capital
Contribution, each Alien Entrepreneur, simultaneously with the submission of its Capital
Contribution, shall also be required to pay the Administrative Fee to the General Partner (which
payment shall be separate from, and not be accounted for as, a Capital Contribution).
Upon the acceptance of the related, executed Subscription Agreement, the Capital Contribution and
the Administrative Fee by the General Partner, such Limited Partner shall be deemed to have been
admitted as a Limited Partner under this Agreement. No Limited Partner will be required to make
any additional contributions of capital beyond the amount of such Partners Capital Commitment.
Section 8.
Capital Accounts. A Capital Account shall be established and maintained on
the Partnerships books for and in the name of each Partner. Each Capital Account shall reflect the
dollar amounts of the respective Partners (i) Capital Contributions, (ii) allocable share of Profits
and Losses realized in each Fiscal Year from the conduct of business and other transactions and
activities of the Partnership, and (iii) distributions made to them. Allocable shares of Profits and
Losses shall be determined and recorded in the Capital Accounts in accordance with Section 9
below. Distributions shall be made and recorded in the Capital Accounts in accordance with
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Section 10 below. The Capital Accounts shall also be adjusted if and when required by Appendix II
or other Tax Regulatory Requirements.
Section 9.

Allocation of Profits and Losses Among Partners.

(a)
Profits and Losses for each Fiscal Year shall be allocated among the Partners
in the following manner: (i) 0.01% to the General Partner; and (ii) 99.99% to the Limited Partners,
to be allocated and distributed among the Limited Partners as reasonably determined by the General
Partner after taking into account the date on which (A) each Limited Partner made his or her
investment, and (B) the Partnership used such investment to advance loans to the Projects, and once
such determination by the General Partner is made, then among the Limited Partners who are
similarly situated with respect to the above criteria in proportion to their respective Capital
Contributions invested in the loans described on Exhibit B.
(b)
Losses incurred in any Fiscal Year shall not be allocated to the Capital
Account of any Limited Partner to the extent that the allocation would cause such Limited Partner
to have an (or to cause an increase in such Limited Partners) Adjusted Capital Account Deficit at
the end of such Fiscal Year. Losses which cannot be allocated to a Limited Partner on account of
this limitation (the Excess Losses) shall be allocated to the Capital Account of the General
Partner. Profits realized in any Fiscal Year after allocation of Excess Losses to the General
Partners Capital Account shall first be allocated to offset the cumulative balance of Excess Losses
in the General Partners Capital Account.
Section 10. Distributions. Except as otherwise provided in Section 17(c) below (relating
to winding up of the Partnership), distributions to the Partners on behalf of the Partnership shall be
made by the General Partner only from Available Cash and in accordance with the following
provisions:
(a)
Tax Distributions may be made in order to defray the federal income tax
liabilities arising from the Partners Partnership Interests at the time indicated in, and calculated in
accordance with, and subject to the terms of, Appendix II.
(b)
No distributions shall be made to any Partner in an amount that would give
rise to, or increase, a negative balance in such Partner's Capital Account.
(c)
Subject to the remaining provisions of this Section 10 or Section 17,
distributions by the Partnership shall be made among the Partners in the following order or priority:
(i)
First, among the Partners in proportion to their Undistributed Income until the
Undistributed Income of each Partner is zero.
(ii)
(iii)
balance.
(d)

Second, to each Partner in proportion to its Unreturned Capital Contributions.

Thereafter, to each Partner in proportion to such Partners Adjusted Capital Account

For purposes of this Section 10:

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(i)
Undistributed Income shall mean, with respect to a Partner, the aggregate Profits
allocated to such Partner, less the aggregate Losses allocated to such Partner, less any previous
distributions to such Partner under Section 10(c)(i).
(ii)
Unreturned Capital Contributions shall mean, with respect to a Partner, the
Partners aggregate Capital Contributions, less any previous distributions to such Partner under
Section 10(c)(ii).
(iii) Adjusted Capital Account shall mean, with respect to a Partner, such Partners
Capital Account, (i) increased by any amounts which such Partner is obligated to restore pursuant to
any provision of this Agreement or is treated as being obligated to restore pursuant to Regulations
Section 1.704-1(b)(2)(ii)(c) or is deemed to be obligated to restore pursuant to the penultimate
sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), and (ii) decreased by
the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5),
and 1.704-1(b)(2)(ii)(d)(6). The foregoing definition of Adjusted Capital Account is intended to
comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.
Section 11.

Reports; Confidentiality.

(a)
On or earlier than March 15 of each calendar year (or within 75 days after the
end of any Fiscal Year which is not a calendar year), the General Partner shall cause to be prepared
and submitted to each Limited Partner an annual report of the Partnership for such Fiscal Year. The
annual report shall include (i) the balance sheet of the Partnership as of the last day of such Fiscal
Year and statements of profit or loss and cash flows of the Partnership for such Fiscal Year, all
prepared in accordance with the method of accounting used by the Partnership for U.S. federal
income tax purposes, and (ii) a narrative commentary setting forth the General Partners analysis of
the Partnerships financial condition and results and a description of material developments in the
Partnerships business during the Fiscal Year. The report shall be accompanied by a supplementary
schedule showing the entries to the Partners Capital Accounts (individually and in the aggregate) in
respect of such Fiscal Year, together with all other information necessary for the Partners to prepare
their federal and state income tax returns.
(b)
In connection with the dissolution and winding up of the Partnership, the
General Partner or the Liquidation Trustee shall furnish to each Partner a termination report
containing the balance sheet and statements of profit or loss and cash flows of the Partnership as of
and for the period ended on the substantial completion of the dissolution and winding up of the
Partnership, together with a supplementary schedule showing the final entries to the Partners
Capital Accounts (individually and in the aggregate).
(c)
Each Partner acknowledges and agrees that the information contained in the
reports delivered pursuant to this Section 11, and all other information and data relating to the
Partnership and the business and affairs of the Partnership delivered to or obtained by any of the
Partners, shall be deemed and treated by them as confidential and proprietary to the Partnership. In
addition to the other duties imposed by this Agreement or the Act, each Partner shall be required to
refrain from using or divulging such information in a manner that would or might interfere with
carrying out the Partnerships purposes or cause damage to the Partnerships economic prospects,
good will or commercial standing. The foregoing provisions of this Paragraph (c) shall not be
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deemed to limit or supersede the right, power and authority of the General Partner to protect trade
secrets and other information on behalf of the Partnership or to comply with legal or contractual
obligations applicable to the Partnership.
Section 12.

Indemnification.

(a)
To the fullest extent allowed by the Act or otherwise by law, the Partnership
shall indemnify the General Partner, and each of its managers, managing members and members,
and their respective officers, employees and agents (in its capacity as such), and hold each of them
harmless against and from, and where requested advance amounts for the payment of, (i) any and all
costs, expenses and fees reasonably paid or incurred in the defense of any claims, demands and
causes of action threatened, asserted or filed against the General Partner, and/or any of its managers,
managing members and members, and their respective officers, employees and agents, and related
to the affairs of the Partnership and/or the conduct of its business, (ii) amounts reasonably paid in
settlement of any such claims, demands and causes of action, and (iii) liabilities and damages
incurred as a result thereof.
(b)
The rights to indemnification set forth in Paragraph (a) above shall apply to
claims, demands and causes of action threatened, asserted or filed in any court, other tribunal or
arbitral forum (i) derivatively on behalf of the Partnership, (ii) by or on behalf of a Limited Partner
or former Limited Partner in its own right, and/or (iii) by or on behalf of a third party, including any
creditor, creditor representative or governmental agency; provided, however, that the rights to such
indemnification shall not apply where Unprotected Misconduct is determined to have taken place by
the General Partner pursuant to a final non-appealable judgment of a court of the United States.
Section 13.
Exculpation from Liability. Neither the General Partner, nor any of its
managers, managing members and members, and their respective officers, employees and agents,
shall be liable to the Partnership or any Limited Partner for any errors of judgment or for any other
actions taken or omissions made, except only where Unprotected Misconduct or a willful violation
of this Agreement is determined to have taken place by the General Partner pursuant to a final nonappealable judgment of a court of the United States.
Section 14.

Termination of General Partner.

(a)
A Supermajority-in-Interest of the Limited Partners shall have the right to
terminate the General Partners powers and authority under Section 4 above and under the Act, and
to remove the incumbent from its position as General Partner, upon the occurrence of either of the
following items (i) or (ii) and the adoption of a resolution so directing. Such termination shall be
effective upon the date set forth in such resolution, if adopted because of and within a reasonable
time after:
(i)
Unprotected Misconduct is determined to have taken place by the
General Partner pursuant to a final non-appealable judgment of a court of the United States; or
(ii)
the willful and wrongful failure or refusal by the General Partner to
substantially perform its functions under Section 4(a) above after notice of such failure or refusal
has been provided to the General Partner and the General Partner has failed to cure such failure or
refusal within 60 days of receipt of such notice.
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Notwithstanding the prior provisions of this Paragraph (a), no such termination and removal shall be
effective unless and until, in addition to the requirements set forth above, a Supermajority-inInterest of the Limited Partners shall have appointed a new General Partner who or which is an
Affiliate of the terminated and removed General Partner and such Affiliate shall have joined in this
Agreement in the capacity as such new General Partner, whereupon such new General Partner shall
be deemed to have been admitted as such (except that in the case of a removal pursuant to clause
(a)(i) above, the new General Partner need not be an Affiliate of the terminated General Partner).
(b)
(i)
Except as described in Section 15(b), the General Partner shall not
have any right to withdraw from the Partnership. Unless consented to by a Supermajority-inInterest of the Limited Partners, a resignation or similar act by the General Partner abdicating its
position or functions shall constitute a breach of this Agreement and an event of withdrawal of the
general partner under Section 17(a)(v) below.
(ii)
A termination of the General Partner under Paragraph (a) above shall
not constitute a breach of this Agreement, but shall be deemed an event of withdrawal of the
general partner under Section 17(a)(v) below.
(c)
If, at the time of the termination, removal or resignation of the General
Partner as described in Paragraphs (a) and/or (b) above, the affected or subject General Partners
Capital Account has a negative balance, such General Partner shall be required to contribute to the
capital of the Partnership such amount as will cause such Capital Account balance to be increased to
zero.
(d)
If the business of the Partnership is continued with a replacement General
Partner after an event of withdrawal of the general partner, as permitted by Section 17(a)(v)
below, the Partnership shall be required to redeem the Partnership Interest of the terminated General
Partner by payment in cash of an amount equal to the positive balance (if any) of its Capital
Account as of the effective date of termination, such payment to be made within 270 days
thereafter. If the balance of the terminated General Partners Capital Account is not positive as of
the effective date of termination, its Partnership Interest shall nevertheless be surrendered and
cancelled, without any payment by the Partnership. The foregoing provisions shall not affect any
rights of the terminated General Partner: (i) to receive distributions in respect to its Partnership
Interest under Section 10 above prior to completion of the redemption or surrender thereof, or (ii) to
indemnification under Section 12 above; nor shall they constitute a release of any liabilities the
terminated General Partner may have to the Partnership as a consequence of a breach (if any) of this
Agreement.
Section 15. Partnership Interests; Transfers; Admission of Substitute or Additional
Limited Partners; Withdrawals.
(a)
The provisions of this Section 15 shall constitute an encumbrance upon all
Partnership Interests and Ancillary Legal Interests. Any Transfer or purported Transfer by a Partner
in violation of this Section 15 shall constitute a breach of duty under this Agreement. The
Partnership shall not be required to recognize or give effect to any purported Transfer that has not
been made in compliance with this Section 15.

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(b)
All Transfers by the General Partner shall be prohibited unless made to an
Affiliate of the General Partner.
(c)
(i)
No Transfer by any Alien Entrepreneur shall be recognized by the
Partnership or recorded in the Partnerships records unless such Alien Entrepreneur shall have
submitted to the Partnership and the General Partner, in such form as shall be acceptable to the
General Partner in its sole and absolute discretion, an acknowledgement that the subject Transfer
may disqualify such Alien Entrepreneur for eligibility under the EB-5 Immigrant Investor Program
and a release of the Partnership and the General Partner from all damages, whether direct, indirect,
consequential or other, and all other consequences therefrom.
(ii)
No Limited Partner shall have the power to give any person the right
to be admitted to the Partnership as a Limited Partner. Except as provided in Section 7(d), any
person who has acquired any Partnership Interest shall be admitted as a Limited Partner, and
thereby succeed to the related Ancillary Legal Interest, only (x) with the approval of the General
Partner in its sole and absolute discretion, (y) upon its execution and delivery of an instrument, in
such form as the General Partner may require, whereby such person will become bound by this
Agreement, and (z) if such person or the subject Limited Partners pays for all expenses incurred by
the Partnership in connection with such person's becoming a Limited Partner.
(iii)
Notwithstanding clauses (i) and (ii), a Transfer by testamentary
disposition of a Partnership Interest to an Alien Entrepreneurs spouse or child(ren) shall
automatically cause such transferee(s) to be admitted to the Partnership as a Limited Partner(s) and
thereby succeed to the related Ancillary Legal Interest.
(d)
Except as provided in this Paragraph (d), no Limited Partner may withdraw
from the Partnership. An Alien Entrepreneur may withdraw from the Partnership by giving written
notice to the General Partner (with such supporting documentation as the General Partner may
reasonably request) --(i)
to the effect that such Alien Entrepreneurs I-526 Petition has been
denied by the USCIS for reasons other than fraud committed by or the material misrepresentation of
such Alien Entrepreneur; provided, however, that this clause (i) shall be applicable only if the
General Partner actually receives such notice not later than 30 days following such denial.
(ii)

within 30 days following the fulfillment of the all of the following

conditions:
(1)
the regional center pilot program, created in support of the
EB-5 Immigrant Investor Program as described in the Offering Memorandum (the Pilot Program)
lapsed after the filing of his or her I-526 Petition but prior to its adjudication; AND
(2)
the Pilot Program was not reauthorized, or replaced by another
program providing substantially the same immigration status benefits as the Pilot Program, within
12 months of such lapse (and such reauthorization or replacement is not then-pending); AND
(3)

such I-526 Petition has not been adjudicated.

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In either of the events described in clauses (i) or (ii) above, within 90 days of the General Partners
receipt of such notice (and such supporting documentation), the General Partner shall cause the
Partnership to return to such Alien Entrepreneur, in full satisfaction of its rights and interests in, to
and under its Partnership Interest and its Ancillary Legal Interest, the amount of such Alien
Entrepreneurs Capital Contribution, whereupon such Alien Entrepreneur shall, automatically and
without more, be deemed to have dissociated from the Partnership.
(iii)
to the effect that such Alien Entrepreneur wishes to withdraw, in
which event the General Partner, in its sole and absolute discretion, is authorized (but shall not be
required) to allow a Limited Partner to withdraw from the Partnership. Without limiting the
General Partners discretion under the immediately preceding sentence, as a condition to
authorizing withdrawal under this clause (iii), the subject Limited Partner is required to (i) accept in
full satisfaction of its rights and interests in, to and under its Partnership Interest and its Ancillary
Legal Interest ninety (90%) percent of the lesser of (x) the balance (but not less than zero) of its
Capital Account, or (y) its Capital Contribution, (ii) deliver to the Partnership an acknowledgement
that the subject withdrawal may disqualify such Limited Partner for eligibility under the EB-5
Immigrant Investor Program and a release of the General Partner and the Partnership from any
direct or consequential damages and all other consequences therefrom, and (iii) deliver to the
Partnership and the General Partner such other agreements as the General Partner may require.
Upon the delivery of the documents and payment of the amount described above, the subject
Limited Partner shall, automatically and without more, be deemed to have dissociated from the
Partnership.
(e)
The Limited Partners acknowledge that any withdrawal under Paragraph (d)
above may necessitate the replacement of the capital that was or is to be paid to the withdrawing
Alien Entrepreneur. The General Partner may, at any time and from time to time -(i)
create such additional classes of Partnership Interests having such
relative rights, powers and duties as such General Partner may establish, including rights, powers
and duties equal or junior to existing Partnership Interests; and
(ii)
whether or not in connection with clause (i) above, designate one or
more persons for admission as a Limited Partner and, in connection therewith, determine the
amount and the time or times at which shall be made, such person's Capital Contribution, the
Partnership Interests to which such person shall be entitled, and all other terms and conditions of
such person's admission as a Limited Partner (and in connection with which any such admission,
Exhibit A shall be modified as appropriate).
Each Limited Partner hereby consents to the admission to the Partnership of any additional Limited
Partner in accordance with this Paragraph (e).
(f)
Notwithstanding the foregoing, the Initial Limited Partner shall,
automatically and without more, be deemed to have dissociated from the Partnership upon the
admission of the first additional Limited Partner to be admitted.
(g)

Notwithstanding any other provision of this Section 15,

(i)

the General Partner may suspend all Transfers for a period of up to 12

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months whenever the General Partner reasonably determines, or is advised by counsel, that in light
of previous Transfers, any subsequent Transfer may reasonably be expected to result in a
termination of the Partnership under Tax Regulatory Requirements; and
(ii)
the General Partner will prohibit any Transfer (a) unless, in the
opinion of counsel for the Partnership or such other counsel satisfactory to the General Partner, such
Transfer will not violate, or cause the original issuance of Partnership Interests or the Partnership to
be in violation of, the securities laws, rules or regulations of the United States, including without
Limitations the Investment Company Act of 1940 any state thereof or any other jurisdiction, or (b)
if such Transfer would jeopardize the ability of any other Limited Partner to qualify under the EB-5
Immigration Investor Program to become a conditional lawful permanent resident of the United
States.
(h)
Upon the Transfer of any Partnership Interest, the Partnership may elect, in
the sole and absolute discretion of the General Partner, to adjust the basis of the Partnership
property under Tax Regulatory Requirements.
(i)
Upon the occurrence of the various events described in this Section, the
General Partner shall make appropriate modifications to Exhibit A; provided, however, that the
failure to make such modifications shall not affect the substantive rights or obligations of the
affected parties.
(j)
Nothing in this Agreement constitutes or is intended to constitute a guaranty
of repayment of a Limited Partners Capital Contribution or an agreement to redeem or repurchase a
Limited Partners Partnership Interest or its Ancillary Legal Interest.
Section 16.

Action by and Meetings of the Limited Partners.

(a)
Any consent, approval or determination in regard to any Partnership matter
committed by this Agreement or the Act for decision (in whole or in part) by the Limited Partners
may be (or shall be deemed to have been) expressed as follows:
(i)

by the signed written consent of a Limited Partner with or without a

meeting;
(ii)
by a Limited Partner's failure to respond to a written request for
consent sent by the General Partner to such Limited Partner, which failure to respond continues for
at least 30 days after the date upon which such request was deemed received by such Limited
Partner (which date shall be determined with reference to the date set forth in the return receipt with
respect to the mailing or delivery of such request by the General Partner); or
(iii)
by the affirmative vote of a Limited Partner or its duly authorized
proxy, registered orally or in writing at any meeting called to consider such matter and attended, in
person or by representatives holding written proxies, by a Supermajority-in-Interest of the Limited
Partners.
(b)
Any matter requiring the vote, consent, approval, determination, election or
agreement of the Limited Partners pursuant to any provision of this Agreement or by law may be
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considered at a meeting, to be held at the principal office of the Partnership or at such other place as
may be specified by the General Partner, or may be held by means of conference telephone or
similar methods of communication during which all persons participating may be heard
simultaneously, not fewer than five (5) days nor greater than sixty (60) days after written notice
thereof shall have been given by the General Partner. The General Partner may give such notice in
its discretion at any time, but shall be required to give such notice within fifteen (15) days after
receipt of a written request for such meeting from the Limited Partners holding a majority of the
total Partnership Interests held by all Limited Partners.
Section 17.

Dissolution and Winding Up of Partnership; Distribution of Assets.

(a)
The Partnership shall dissolve upon the final and non-appealable adjudication
of all I-829 Petitions filed by all Alien Entrepreneurs; provided, however, that the Partnership shall
not dissolve until the occurrence of the earliest of the following events to occur:
(i)

the expiration of the term of the Partnership as set forth in Section 6

above;
(ii)
the repayment to the Partnership of the Loan (as described and
defined in the Offering Memorandum) and all other loans as the Partnership may make consistent
with the carrying out of its purposes as described in Section 3 and in furtherance of the completion
of the Projects, together will all interest and other amounts due thereon;
(iii) the written consent of the General Partner and a Supermajority-inInterest of the Limited Partners;
(iv)

the written consent of all Limited Partners;

(v)
an event of withdrawal of the general partner within the meaning of
Section 3432 of the Act, unless there is at least one General Partner then remaining in office or
within 90 days after such event, a Supermajority-in-Interest of the Limited Partners has, by written
consent, appointed a replacement General Partner and determined to continue the business of the
Partnership, and the replacement General Partner has become legally bound by this Agreement (as
the same may be amended);
(vi)

the sale of all or substantially all of the assets of the Partnership;

(vii) the entry of a final judgment, order or decree of a court with

competent jurisdiction adjudicating the Partnership to be bankrupt, and the expiration of the period,
if any, allowed by applicable law in which to appeal therefrom; or
(viii) to the extent not otherwise inconsistent with this Section 17(a), as
provided in the Act.
(b)
After an event of dissolution, the General Partner or the Liquidation Trustee
shall wind up the affairs of the Partnership, and marshal, liquidate and distribute its assets in
accordance with the Act; provided, however, the General Partner or the Liquidation Trustee shall
have full power and authority to defer liquidation of, or refrain from liquidating, any assets of the
- 13 -

Partnership if such action is deemed by the General Partner or the Liquidation Trustee to be in the
best interests of the Partnerships creditors and the Partners.
(c)
Distributions relating to dissolution shall be made as provided in Appendix II
and may be made in cash or other property (or a combination thereof).
(d)
No Limited Partner shall have any obligation to restore any negative balance
in its Capital Account upon dissolution or liquidation of the Partnership or otherwise, except as may
be required by the Act.
Section 18.

Amendment of Agreement.

(a)
This Agreement, including this Section 18, may be amended in whole or in
part only with the written consent of the General Partner, provided, however, that (i) each Limited
Partner to be affected must give its written consent to any amendment that would (A) increase the
amount of the Capital Contribution payable by such Limited Partner, (B) increase the liability of
such Limited Partner, or (C) cause such Limited Partners share of the Partnerships assets to be
modified unless all interests of persons or entities who are Partners are similarly modified, and (ii)
the additional consent of a Supermajority-in-Interest of the Limited Partners shall be required in
connection with any amendments that would (A) change the purpose of the Partnership, (B)
jeopardize the limited partners capacity to be admitted to the United States of America as
unconditional lawful permanent residents with their spouses and unmarried,, minor children
pursuant to the EB-5 Immigrant Investor Program, (C) modify in a manner adverse to the Limited
Partners any of the provisions of this Agreement, (D) impose additional obligations on the Limited
Partners, or (E) change the conditions for admission to the Partnership as a Limited Partner.
(b)
Notwithstanding Paragraph (a) above, this Agreement may be amended by
the General Partner without the approval of the Limited Partners (i) if such amendment is for the
purpose of documenting admission of a person as a General Partner or a Limited Partner in
accordance with the provisions of Sections 7(d), 14 or 15 above, (ii) as and to the extent determined
by the General Partner to be necessary to comply with the IN Act or the rules, regulations or other
administrative requirements of USCIS in order to comply with the requirements of and under the
EB-5 Immigrant Investor Program, or (iii) to merely cure any ambiguity, or correct or supplement
any provision of this Agreement which may be inconsistent with any other provision of this
Agreement, but only in a manner not inconsistent with the provisions of this Agreement, the
purposes of the Partnership, or the Offering Memorandum.
(c)
Without the express written consent of each Partner affected thereby, no
amendment shall reduce the Capital Account of any Partner or its rights to allocations and
distributions with respect thereto. The General Partner shall give prior written notice of any
proposed amendment to all of the Partners, which notice shall set forth the text of the proposed
amendment.
(d)
If the General Partner changes the conditions for admission of a Limited
Partner to the Partnership, any such new Limited Partners who are not admitted as Alien
Entrepreneurs will not be included among the Limited Partners for voting purposes with respect to
any action or amendment to this Agreement that (1) expressly requires the consent of a
Supermajority-in-Interest of the Limited Partners, and (2) that eliminates rights safeguarding the
- 14 -

economic and EB-5 benefits accruing to the Alien Entrepreneurs.

Section 18A. Parallel Partnership.
(a)

Section 19.

General. The Limited Partners acknowledge that the Partnership shall

seek exemption from registration as an investment company, within the
meaning of the Investment Company Act, through qualification under
Section 3(c)(7) of the Investment Company Act. The General Partner
shall also form a parallel partnership ( the ICA Fund) which shall be
governed by an agreement the terms of which are substantially identical
to those of this Agreement, but shall seek exemption from such
registration through qualification under Section 3(a)(1) of the Investment
Company Act (and shall restrict Transfers of its fund interests
accordingly). In order to most efficiently seek exemption from such
registration for both the Partnership and the ICA Fund without materially
altering the economic rights and obligations of the Partners, the General
Partner, in its reasonable discretion, may at any time cause a Limited
Partner to exchange its interest in the Partnership for an economically
equivalent interest in the ICA Fund or vice versa.
Power of Attorney.

(a) Each Limited Partner hereby makes, constitutes and appoints the General Partner
with full power of substitution and resubstitution, its true and lawful attorney, for it and in its name,
place and stead, with full power and authority to sign, execute, certify, acknowledge, swear to, file
and record all instruments amending, supplementing or canceling the Certificate, as the same may
hereafter be amended, supplemented or canceled consistent with the terms of this Agreement and as
may be appropriate, and to sign, execute, deliver, certify, acknowledge, swear to, file and record
such other agreements, instruments or documents (i) as may be necessary or advisable (A) to reflect
the exercise by the General Partner of any of the powers granted to it under this Agreement, or (B)
to reflect the admission to the Partnership of any Limited Partner or the dissociation of any Limited
Partner, in the manner prescribed in this Agreement; or (ii) which may be required of the
Partnership or of the Partners by the laws of the State of Vermont or any other jurisdiction for the
proper conduct of the Partnerships business. Each Limited Partner authorizes such attorney-in-fact
to take any further action which such attorney-in-fact shall consider necessary or advisable in
connection with any of the foregoing, hereby giving the General Partner, as attorney-in-fact, full
power and authority to do and perform each and every act or thing whatsoever requisite or advisable
to be done in and about the foregoing as fully as such Limited Partner might or could do if
personally present, and hereby ratifying and confirming all that such attorney-in-fact shall lawfully
do or cause to be done by virtue hereof.
(b) The power of attorney granted pursuant to Paragraph (a) of this Section 19
(i) is a special power of attorney coupled with an interest and is irrevocable;
(ii) may be executed by each such attorney-in-fact by listing all of the
Limited Partners executing any agreement, certificate, instrument or document with the single
signature of any such attorney-in-fact acting as attorney-in-fact for all of them;
- 15 -

(iii) shall survive the delivery of a proper assignment by a Limited Partner of

its Partnership Interest, except that where the purchaser, transferee or assignee thereof has the right
to be, or with the consent of the General Partner is admitted as, a Limited Partner, the power of
attorney shall survive the delivery of such assignment for the sole purpose of enabling any such
attorney-in-fact to execute, acknowledge, swear to, file and record any such agreement, certificate,
instrument or document necessary to effect such admission; and
(iv) shall be binding on any permitted assignee of a Limited Partners
Partnership Interest.
Section 20.

Dispute Resolution Procedures.

(a)
Arbitration of Disputes. Any unresolved claim, controversy or dispute
arising with respect to the interpretation of this Agreement (including the scope and application of
this Section 20), or the performance of any duty under this Agreement or the Act, between or
among any of the Partners or the Partnership (a "Dispute") shall be submitted to final and binding
arbitration pursuant to the following provisions of this Section 20:
(i)
Any party to an unresolved Dispute shall have the right to file a
written Demand for Arbitration pursuant to this Section 20 with the Vermont Regional Office of the
American Arbitration Association nearest to the office of the Partnership in Vermont, whereupon
such party shall simultaneously send a copy of such Demand to the other party or parties to such
Dispute.
(ii)
Arbitration proceedings under this Section 20 shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration Association, except
that all substantive decisions and awards rendered shall be accompanied by a written opinion setting
forth the rationale for such decisions and awards.
(iii)
Venue for all evidentiary hearings conducted in such proceedings
shall be in the County in which the office of the Partnership in Vermont is located, unless otherwise
mutually agreed by the parties thereto.
(iv)
Unless otherwise agreed by the parties thereto, arbitration proceedings
under this Section 20 shall be conducted before one impartial arbitrator selected through the
procedures of the American Arbitration Association.
(v)
To the extent practicable, the arbitration proceedings under this
Section 20 shall be conducted in such manner as will enable completion within 120 days after the
filing of the Demand for Arbitration hereunder.
(b)
Awards. On all matters, the decisions and awards of the arbitrator shall be
determinative. Any award hereunder may include an order directing a party to perform and
prohibiting a party from violating its duties under this Agreement and the Act. The award may
include an allocation of legal fees, costs of arbitration and interest to the substantially prevailing
party, but punitive damages shall not be allowed. The award may be enforced in such manner as
allowed by law.
- 16 -

(c)
Injunctive Relief. The parties agree that during the pendency of any
arbitration, if injunctive relief is not able to be granted through the arbitration, then a party shall be
permitted to seek such relief through a court of applicable jurisdiction.
Section 21.

Miscellaneous.

(a)
Any payment, notice or other communication given pursuant to any provision
of this Agreement or the Act shall be in writing and shall be deemed to have been delivered if sent
by electronic mail (e-mail) as well as by facsimile transmission (to the coordinates provided by the
recipient), or if sent by a reputable courier service, postage and charges prepaid:
(i)
To the Partnership or the General Partner, if addressed to the office of
the Partnership in Vermont.
(ii)
To any Limited Partner, if addressed to that Limited Partner at its
business or residence address shown in the Partnership records.
(b)
Section references contained in this Agreement relate to sections of this
Agreement unless specific reference is made to the Act. References herein to persons includes
entities as well as natural persons.
(c)
The provisions of this Agreement shall be deemed severable, and the
invalidity or unenforceability of any provision shall not affect the validity or enforceability of the
remainder of this Agreement.
(d)
The provisions of this Agreement, as written in English, control their
respective meanings and effects. No translation hereof into another language shall affect the
provisions or enforceability hereof as written and determined in English.
(e)
The laws of the State of Vermont, excluding its choice of law provisions,
shall govern this Agreement.
(f)
This Agreement may be executed in any number of counterparts with the
same effect as if all parties hereto had signed the same document. All counterparts shall be
construed together and shall constitute one Agreement.
(g)
The terms of this Agreement supersede any description of the Partnership as
discussed or appearing in any other document, including any oral or written communication
between or among the parties and/or their respective counsel.
(h)
Each and every covenant, term, provision and agreement herein contained
shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs,
personal representatives, successors and assigns.
(i)
A copy of the Certificate and each amendment thereto and cancellation
thereof, and any other document filed by the Partnership or the General Partner in the office of the
Secretary of State, State of Vermont shall be delivered to any Limited Partner requesting same, but
- 17 -

not otherwise.

[EXECUTION PAGE FOLLOWS]

- 18 -

._O3/.W/2A74

t3i20

6L428A3O34

HYATT REGENCY

wlTNEsstheduecxeoutionhereofasofthedateffstsetforthabovc.

GENERALPARTNER:
LLI :
MOTNTSNOWGPSERVICESI,

iNITIAL LIMITEDPARTNER:

-19-

PAGE A2/83

EXHIBIT A

Name and Address

Capital Contribution

Partnership Interest

General Partner:
Mount Snow GP Services, LLC
89 Grand Summit Way
PO Box 2805
West Dover, VT 05356

0.01%

Limited Partners:
$

Total Partnership Interests of All

Limited Partners:

-i-

99.99%

EXHIBIT B
DESCRIPTION OF PROJECT AND LOAN
The total anticipated investment from Qualified Investors is $52,000,000. The
Partnership and Carinthia Group 1, L.P. (collectively, the Partnerships) will use the proceeds
of their offerings to fund loans that will be advanced to newly created wholly-owned subsidiaries
of Mount Snow Ltd. (Mount Snow) to finance the development of two capital projects for the
Mount Snow Ski Resort in West Dover, Vermont (the Resort). The Resort is owned and
operated by Mount Snow which is a wholly owned subsidiary of Peak Resorts, Inc. In essence,
the Alien Entrepreneurs will invest in the Partnerships which will in turn loan the Alien
Entrepreneurs funds directly to the developers of the job-creating projects, West Lake, LLC and
Carinthia Ski Lodge, LLC as described below.
The Partnerships will establish a non-revolving line of credit facility and collectively loan
up to $30,000,000 to West Lake LLC, a wholly-owned subsidiary of Mount Snow, to facilitate
the construction of a new water storage reservoir and dams for snowmaking with capacity of up
to 120 million gallons, three new pump houses and the installation of snowmaking pipelines, trail
upgrades and expansion, new ski lift and ancillary equipment (the "West Lake project"). The
line of credit will be in the minimum amount of $500,000 and a maximum principal amount of
$30,000,000 based upon the number of units sold pursuant to the offering described in the
Offering Memorandum. The line of credit will be extended pursuant to a loan agreement
between the Partnerships and West Lake LLC and will be evidenced by a non-revolving line of
credit note and subject to a guaranty of collection by Peak Resorts, Inc. (collectively, the "West
Lake Loan Documents").
The Partnerships will establish a non-revolving line credit facility and collectively loan
up to $22,000,000 to Carinthia Ski Lodge LLC, a wholly-owned subsidiary of Mount Snow, for
the construction of Carinthia Ski Lodge, a new three-story approximately thirty six thousand
square-foot skier service building located at the base of the Carinthia slopes providing a
restaurant, cafeteria and bars with seating for over six hundred people, a retail store, convenience
store and sales center for lift tickets and rentals (the "Carinthia Ski Lodge project"). The line of
credit will be in the minimum amount of $500,000 and a maximum principal amount of
$22,000,000 based upon the number of units sold pursuant to the offering described in the
Offering Memorandum. The line of credit will be extended pursuant to a loan agreement
between the Partnerships and Carinthia Ski Lodge LLC and will be evidenced by a nonrevolving line of credit note and subject to a guaranty of collection by Peak Resorts, Inc.
(collectively, the "Carinthia Ski Lodge Loan Documents").
To the extent that the offering is not fully subscribed and less than $52,000,000 is raised,
the Partnerships will allocate up to the first $30,000,000 of subscriptions received and accepted
to West Lake LLC for the development of the West Lake project. The West Lake project will be
developed in three tranches consisting of $10,000,000 (tranche one), $12,500,000 (tranche two)
and $7,500,000 (tranche three). To the extent that the General Partner accepts subscriptions for
any tranche and the proceeds resulting from such subscriptions do not equal the amount for such
tranche set forth above, Mount Snow will make alternative arrangements to finance the balance
of the tranche. If and when subscriptions received exceed $30,000,000, the next $22,000,000
will be allocated to Carinthia Ski Lodge LLC for the development of the Carinthia Ski Lodge.

To the extent that the General Partner accepts subscriptions for the development of the Carinthia
Ski Lodge and the proceeds resulting from such subscriptions do not equal $22,000,000, Mount
Snow will make alternative arrangements to finance the balance required to complete the project.
Without altering the economic rights and obligations of the Partners, the General Partner,
in its reasonable discretion, may at any time cause a Limited Partner to exchange its interest in
Carinthia Group 1, L.P. for an economically equivalent interest in the Partnership.
The parties intend that the West Lake project and the Carinthia Ski Lodge project will
stimulate economic activity and preserve and create jobs at the Resort and have a significant
economic impact on the local economy within the State of Vermont Regional Center and reach
into the Northeastern United States and the rest of the United States.

--2--

APPENDIX I
DEFINITIONS
"Act" means Chapter 23 of the Vermont Statutes (11 V.S.A. 3401 et. seq.) and, to the
extent applicable to limited partnerships, Chapter 22 of the Vermont Statutes (11 V.S.A. 3201
et. seq.).
Adjusted Capital Account Deficit means, with respect to any Partner, the deficit
balance, if any, in such Partners Capital Account after giving effect to the following
adjustments:
(a) credit to such Capital Account any amounts which such Partner is obligated to
restore pursuant to any provision of this Agreement or is deemed to be obligated to restore
pursuant to Treasury Regulation 1.704-1(b)(2)(ii)(c), the penultimate sentence of Treasury
Regulation 1.704-2(g)(1), or the penultimate sentence of Treasury Regulation 1.704-2(i)(5);
and
(b) debit to such Capital Account the items described in Treasury Regulation
1.704-1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the
provisions of Treasury Regulation 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
Administrative Fee means a separate fee to be paid by each Limited Partner in
accordance with such Limited Partners Subscription Agreement to reimburse and compensate
the General Partner and/or its Affiliates for its costs incurred (or to be incurred) and/or services
provided (or to be provided) in respect of Organizational Expenses, Pre-Operating Expenses and
Syndication Expenses.
Affiliate means, with respect to any Partner, any person that directly or indirectly
controls, is controlled by, or is under common control with, such Partner. Control means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a person, whether through ownership of voting securities, by contract or
otherwise.
Agreement means this Limited Partnership Agreement, as it may be amended and
supplemented from time to time, and all Appendices attached hereto.
Alien Entrepreneur means a Limited Partner who is not a citizen or lawful permanent
resident of the United States and who is seeking to obtain conditional lawful permanent
residency status in the United States through the EB-5 Immigrant Investor Program.
Ancillary Legal Interest means all the rights of a Partner expressed or implied by this
Agreement or arising under the Act (or otherwise at law or in equity), including the right to grant

I-1

or withhold consents and approvals in Partnership affairs, but does not include the economic
rights of a Partner encompassed by the definition of Partnership Interest below.
Available Cash means all funds (including liquid investments) of the Partnership,
from all sources, on hand from time to time, including (without limitation) all cash obtained from
current activities and operations of the Partnership and from any sales of the assets of the
Partnership and available to the Partnership after the General Partner has made reasonable
provision (i) for the working capital requirements of the Partnership, to enable the Partnership to
carry out its purposes, and (ii) to enable the Partnership to satisfy its contractual and other legal
obligations to creditors. The General Partner's determinations as to the amount of Available
Cash, from time to time, shall be conclusive.
Capital Account means the capital account of each Partner established and maintained
under this Agreement.
"Capital Commitment", in respect of any Partner, means that which is agreed to be
contributed to the capital of the Partnership by such Partner without regard to such Partner's
Capital Contribution.
Capital Contribution means, with respect to any Partner, the amount of cash and/or
the mutually agreed fair value of the property actually contributed to Partnership capital by such
Partner, as determined on the date of contribution.
Certificate refers to the Certificate identified in the Preamble.
"EB-5 Immigrant Investor Program" refers to a program that exists under and pursuant
to the IN Act for the purpose of enabling Alien Entrepreneurs to obtain EB-5 visas under United
States law.
Excess Losses see Section 9(b).
Fiscal Year means the Partnerships fiscal year, which shall commence on January 1
and end on December 31 of each year, except that such term shall also include any other period
for which the Partnership is required to allocate Profits, Losses or any items of income, gain, loss
or deduction.
General Partner means Mount Snow GP Services, LLC, a Vermont limited liability
company, and any other person who becomes a General Partner in accordance with this
Agreement or the Act.
I-526 Petition refers to USCIS Form I-526, Immigrant Petition by Alien Entrepreneur,
to be filed by an Alien Entrepreneur with the USCIS under and in accordance with the EB-5
Immigrant Investor Program.
I-829 Petition refers to USCIS Form I-829, Petition By Entrepreneur to Remove
Conditions, to be filed by an Alien Entrepreneur with the USCIS under and in accordance with

I-2

the EB-5 Immigrant Investor Program.

"IN Act" means the Immigration & Nationality Act, 8 U.S.C. 1153.
Initial Limited Partner means Douglas Hauer.
Limited Partner means the Initial Limited Partner and any other person who becomes
admitted as an Limited Partner in accordance with this Agreement.
Liquidation Trustee means the person chosen, if a General Partner is not then serving
as such, by a Supermajority-in-Interest of the Limited Partners to wind up the affairs of the
Partnership in accordance with Section 3473 and other applicable provisions of the Act and this
Agreement.
Losses for any Fiscal Year or period means the excess, if any, of the items of loss and
deduction over the items of income and gain of the Partnership as recorded on its financial
accounting books and records for such Fiscal Year or period.
Majority-in-Interest of the Limited Partners means those Limited Partners holding
more than Fifty (50%) percent of the total of the Partnership Interests held by all Limited
Partners.
Offering Memorandum means that certain Private Placement Memorandum of
Carinthia Group I, L.P. and Carinthia Group 2, L.P. dated February 27, 2014, as the same may be
amended or supplemented.
Organizational Expenses means the fees, costs and expenses of, and incidental to, the
organization of the Partnership. Such expenses shall include any and all amounts categorized as
organizational expenses under the Code, including without limitation, expenditures for legal,
accounting and professional fees incurred in connection with the formation of the Partnership,
structuring and preparation of this Agreement, organizational meetings and establishing the
books and records of the Partnership.
Partners means the General Partner and the Limited Partners, and each of them
individually.
Partnership means the limited partnership formed pursuant to the Certificate.
Partnership Interest means a Partners economic rights under this Agreement to
share in Profits and Losses and to receive distributions of Available Cash or other Partnership
assets, but does not include a Partners Ancillary Legal Interest.
Pre-Operating Expenses means the investigative fees, costs and expenses incidental
to the creation of the Partnership and the fees, costs and expenses incurred prior to the
commencement of operations of the Partnership. Such expenses shall include any and all
amounts categorized as "start-up expenditures" under the Code.

I-3

Profits for any Fiscal Year or period means the excess, if any, of the items of income
and gain over the items of loss and deduction of the Partnership as recorded on its financial
accounting books and records for such Fiscal Year or period.
Projects means the West Lake project and the Carinthia Ski Lodge project, each as
more fully described in Exhibit B.
Related Party Transaction means any actual or proposed transaction of the
Partnership directly or indirectly with any one or more of the General Partner or any Affiliate of
the General Partner.
Subscription Agreement means the Subscription Agreement included in Section 4 of
the Offering Memorandum.
Supermajority-in-Interest of the Limited Partners means those Limited Partners
holding more than Sixty-Six and two-thirds (66-2/3%) percent of the total of the Partnership
Interests held by all Limited Partners.
Syndication Expenses means expenses incurred to promote the sale of, or to sell,
Partnership Interests.
Tax Code means the Internal Revenue Code of 1986, as amended from time to time.
Tax Distributions see Section 10(a) and Appendix II.
Tax Regulatory Requirements means legal duties and requirements imposed by the
Tax Code, Treas. Reg. 1.704 1(b)(a)(iv) or any other provision of the Income Tax Regulations
promulgated under the Tax Code, as the same may be amended from time to time (and including
corresponding provisions of any successor statutes or governmental regulations).
Transfer includes an assignment, conveyance, grant or suffering the existence of a
security interest or other lien or encumbrance, inter vivos gift and testamentary disposition, and
any other disposition (whether voluntary or by operation of law) of a Partners Partnership
Interest or Ancillary Legal Interest, in whole or in part; and in the case of the General Partner,
also entering into a merger or other form of business combination transaction with, or issue of
voting securities to, any person other than an Affiliate of the General Partner.
Unauthorized Conduct means, with respect to any Limited Partner, directly or
indirectly, (i) executing any instrument, (ii) conveying title to any Partnership property, (iii)
making any oral or written admission or representation, (iv) accepting notice from any third
party or service of process, (v) receiving money or property of a third party, or (vi) taking any
action to bind the Partnership after dissolution or in connection with winding up its affairs;
provided, however, the foregoing shall not apply to a person who has been (x) duly elected a
manager or managing member of the General Partner, or (y) duly appointed by the General
Partner as an officer, employee or agent of the General Partner, or the Partnership or (z) duly

I-4

appointed as a Liquidation Trustee, when such person acts in any such indicated capacity.
Unit means the smallest whole number representing the ownership share of a holder
(whether or not the holder has been admitted as a Partner) in the aggregate of the Partnership
Interests.
Unprotected Misconduct means, with respect to the General Partner, either of the
following: (i) any willful and material violation of law that has a material adverse financial effect
upon the Partnership; or (ii) an intentional act or omission constituting fraud, embezzlement or
misappropriation in connection with the business, assets and properties, accounts or reports of
the Partnership.
USCIS means the United States Citizenship and Immigration Services.

I-5

APPENDIX II
ADDITIONAL CAPITAL ACCOUNT MAINTENANCE, ALLOCATION AND
DISTRIBUTION PROVISIONS
I.
Definitions.
this Appendix II:

The following definitions are applicable to the requirements as set forth in

"Nonrecourse Deduction" has the meaning set forth in Treas. Reg. 1.704-2(b).
"Partnership Minimum Gain" has the meaning set forth in Treas. Reg. 1.704-2(d).
"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in Treas. Reg.
1.704-2(i).
"Partner Nonrecourse Deduction" has the meaning set forth in Treas. Reg. 1.704-2(i).
"Partner Nonrecourse Loan" means a loan made to, or credit arrangement for the
benefit of, the Partnership by a Partner or by a person related to a Partner (as defined in Treas.
Reg. 1.752-4(b)) which by its terms exculpates the Partners from personal liability on the debt,
but under which such Partner or related person bears the ultimate economic risk of loss within
the meaning of Treas. Reg. 1.752-2.
II.
Capital Accounts. If allocations are required pursuant to Parts III (B) (ii) or (iii) of this
Appendix II, then the adjustments to the Capital Accounts of the Partners in respect of the
property described therein shall be made in accordance with Treas. Reg. 1.704-1(b)(2)(iv)(g) for
allocations to them of items of income, gain, loss and deduction (including depreciation,
depletion, amortization and other cost recovery) as computed for book purposes, and no further
adjustments shall be made to the Capital Accounts to reflect the Members' shares of the
corresponding tax items. For purposes of computing such adjustments to the Capital Accounts,
the Partnership will utilize the method of computing depreciation, depletion or amortization with
respect to such property as is utilized for federal income tax purposes except that the property's
value for book purposes will be used rather than its adjusted tax basis.
III.

Allocations of Profits and Losses.

(A)
Special Allocations. Notwithstanding any other provision of this Agreement, the
following allocations shall be made for each Fiscal Year prior to the making of any other
allocations under this Agreement and in the following order of priority:
(i)
If there is a net decrease in Partnership Minimum Gain during any Fiscal
Year such that an allocation is required by Treas. Reg. 1.704-2(f), items of income and gain shall
be allocated to the Partners in the manner and to the extent required by such Regulation. This
provision is intended to be a minimum gain chargeback within the meaning of Treas. Reg.
1.704-2(f)(1) and shall be interpreted and applied consistently therewith.

II-1

(ii)
If there is a net decrease in the minimum gain attributable to a Partner
Nonrecourse Loan during any Fiscal Year such that an allocation is required by Treas. Reg.
1.704-2(i)(4) (minimum gain chargeback attributable to a Partner nonrecourse debt), items of
income and gain shall be allocated in the manner and to the extent required by such Regulation.
(iii)
If a Partner receives any adjustments, allocations, or distributions
described in subclauses (4), (5) or (6) of Treas. Reg. 1.704-1(b)(2)(ii)(d), items of Partnership
income and gain shall be specially allocated to such Partner in an amount and manner sufficient
to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of
such Partner as quickly as possible, provided that an allocation pursuant to this subsection shall
be made only if and to the extent that such Partner would have an Adjusted Capital Account
Deficit after all other allocations provided for in Section 9 of the Agreement and this Paragraph
(A) have been tentatively made as if this subparagraph (iii) were not in this Appendix.
(iv)
Nonrecourse Deductions, if any, for any Fiscal Year or period shall be
allocated to the Partners in an amount equal, and in proportion, to the allocation of Profits for
such Fiscal Year or period pursuant to Section 9 of the Agreement.
(v)
Any Partner Nonrecourse Deduction shall be allocated to the Partner who
bears the economic risk of loss with respect to the loan giving rise to such deduction within the
meaning of Treas. Reg. 1.752-2.
(B)

Tax Allocations.

(i)
For federal, state and local income tax purposes, all items of taxable
income, gain, loss and deduction for each Fiscal Year shall be allocated among the Partners in
accordance with the manner in which the corresponding items were allocated under Section 9
and the applicable provisions of this Appendix II, except as otherwise provided in this Paragraph
(B).
(ii)
If property is contributed to the Partnership by a Partner and there is a
difference between the basis of such property to the Partnership for federal income tax purposes
and the fair market value at the time of its contribution, then items of income, gain, loss and
deduction with respect to such property as computed for federal income tax purposes (but not for
book purposes) shall be shared among the Partners so as to take account of such difference as
required by Section 704(c) of the Tax Code.
(iii)
If property of the Partnership (other than property described in
subparagraph (ii) of this Paragraph (B)) is reflected in the Capital Accounts of the Partners and
on the books of the Partnership at a book value that differs from the adjusted basis of such
property for federal income tax purposes by reason of a revaluation of such property, then items
of income, gain, loss and deduction with respect to such property for federal income tax purposes
(but not for book purposes) shall be shared among the Partners in a manner that takes account of
the difference between the adjusted basis of such property for federal income tax purposes and
its book value in the same manner as differences between adjusted basis and fair market value
are taken into account in determining the Partners shares of tax items under Section 704(c) of
II-2

the Tax Code.

IV.

Tax Distributions.

(A)
Within 90 days after the end of each Fiscal Year, the Partnership may, at
the reasonable discretion of the General Partner, distribute to each Partner from Profits allocated
to such Partner under Section 9 of the Agreement cash in an amount (the "Tax Distributions")
equal to the product of (i) such allocated Profits, multiplied by (b) the highest individual U.S.
federal income tax rate effective in such Fiscal Year (not including the rate of withholding
applicable to nonresident alien partners under Section 1446 of the Tax Code). Tax Distributions
shall be treated as non-interest bearing advances of, and shall be credited against, the first
distributions otherwise to be made to such Partner in accordance with Section 10 of the
Agreement.
(B)
The General Partner shall cause the Partnership to be responsible for
making income tax payments to the Internal Revenue Service with respect to the nonresident
alien Partners pursuant to Section 1446 of the Tax Code (the "Section 1446 Payments"), which
payments shall constitute constructive distributions to such Partners (and shall be credited
against the amount of distributions owing to each such Partner pursuant to the preceding
Paragraph (A)). In the event that the Section 1446 Payments made on behalf of any particular
Partner exceeds the Tax Distributions required to be distributed in accordance with the preceding
Paragraph (A) to such Partner, such excess shall be treated as a loan to such Partner, which loan
shall bear interest at 10% per annum, non-compounded, and (along with accrued interest) shall
be withheld by the Partnership from the first distributions otherwise to be made to such Partner
in accordance with Section 10 of the Agreement.
(C)
Notwithstanding the provisions of the preceding Paragraph (A), Tax
Distributions otherwise required to be made to any Partner with respect to any Fiscal Year
pursuant to this Part IV shall be reduced by the amount of any other cash distributions (other
than in return of capital) made by the Partnership to such Partner during such Fiscal Year or
within 90 days thereafter; provided, however, that any Tax Distribution made within 90 days
after the beginning of any Fiscal Year with respect to a prior year shall be accounted for as a Tax
Distribution for such prior Fiscal Year.
(D)
The Partnership, in the sole discretion of the General Partner, may make
Tax Distributions to the Partners during any Fiscal Year to enable them to satisfy their liabilities
to make estimated tax payments with respect to such Fiscal Year or the preceding Fiscal Year
based on calculations of the Partners' estimated tax liabilities made pursuant to this Part IV as of
such dates as the General Partner in its sole discretion may determine.
V.

Allocations and Distributions upon Winding Up.

(A)
Prior to any distribution relating to dissolution of the Partnership, the
General Partner or the Liquidation Trustee shall adjust each Partners Capital Account to reflect
the manner in which the unrealized income, gain, loss and deduction inherent in the Partnerships
property (that has not been reflected in the Partners Capital Accounts previously) would be
II-3

allocated among the Partners if there were a taxable disposition of such property for the fair
market value of such property (taking Section 7701(g) of the Tax Code into account) on the date
of distribution.
(B)
Distribution to the Partners of the Partnership assets upon dissolution shall
be made in accordance with the net credit balances in their respective Capital Accounts as
determined after taking into account all Capital Account adjustments for the Partnership taxable
year during which such dissolution and winding up occurs (other than those made pursuant to
this Paragraph (B) or the following Paragraph (C)) by the end of such taxable year (or, if later,
within 90 days after the date of such dissolution and winding up).
(C)
If the General Partner has a deficit balance in its Capital Account
following the distribution of Partnership assets upon dissolution, as determined after taking into
account all Capital Account adjustments for the taxable year during which such dissolution
occurs (other than those made pursuant to this Paragraph (C)), the General Partner shall be
required to restore the amount of such deficit to the Partnership as soon as practicable but in no
event later than the end of such taxable year (or, if later, within 90 days after the date of the
Partnership's liquidation), which amount shall be paid to the Partnership's creditors or distributed
to the Partners in accordance with their respective positive Capital Account balances in
accordance with Paragraph (B); provided, however, that no Partnership creditor may rely upon
this sentence in order to create an obligation of the General Partner to pay a Partnership debt
which the General Partner is not otherwise personally obligated to pay.

II-4

Section 4
The Subscription Documents
57

CARINTHIA GROUP 1, L.P. SUBSCRIPTION DOCUMENTS

INSTRUCTIONS FOR COMPLETION
In connection with your subscription for an Interest in Carinthia Group 1, L.P., enclosed are the following
documents which must be properly and fully completed, signed and returned as set forth herein:
Exhibit A:

Escrow Agreement

Exhibit B:

Investor Questionnaire

Exhibit C:

Subscription Agreement and Consent to Limited Partnership Agreement

In order to participate in the offering and purchase a Unit in the Partnership, you should make a check for
$550,000 for your subscription and capital contribution ($500,000) and for your administrative fee
($50,000) payable to Peoples United Bank. You should mail your check together with your completed
and signed subscription agreement and consent to limited partnership agreement and investor
questionnaire, to the general partner at the following address:
Mount Snow GP Services LLC
PO Box 2805
89 Grand Summit Way
West Dover, VT 05356
Alternatively, in lieu of check you may pay your subscription and capital contribution and administrative
fee by wire transfer to the following account:
Peoples United Bank
Two Burlington Square
Burlington, VT 05401
ABA# 221172186
A/C# 0019100316
Attn: Trust Operations
FBO: Mount Snow Carinthia Group Escrow

Your execution and delivery of the Subscription Agreement and Consent to Limited Partnership
Agreement constitute your offer to buy an Interest in the Partnership and to hold the offer open until your
subscription is either accepted or rejected by Mount Snow GP Services LLC (the General Partner), or
you withdraw your offer. To withdraw your subscription agreement, you must give written notice to the
General Partner before your subscription agreement is accepted by the General Partner. You will have a
30-day rescission right to withdraw your subscription and to receive a full refund of your Capital
Contribution and Administrative Fee from the date you deliver your subscription agreement to the
General Partner, as detailed in the Escrow Agreement. This rescission right is strictly limited to 30
calendar days from the date that the General Partner receives your executed subscription documents and
will not be extended.
Parallel Fund
Carinthia Group 1, L.P. will be exempt from registration under Section 3(c)(1) of the Investment
Company Act of 1940. A separate parallel fund, Carinthia Group 2, L.P., is being established which will

rely upon another exemption; it will have an identical investment program, the same general partner and
substantially identical Limited Partnership Agreement with that of Carinthia Group 1, L.P. Without
altering the economic rights and obligations of the partners, the general partner, in its reasonable
discretion, may at any time cause a limited partner to exchange its interest in Carinthia Group 1, L.P. for
an economically equivalent interest in the parallel fund, Carinthia Group 2, L.P.
Conditions of Escrow
All capital contributions and administrative fees will be held in escrow by Peoples United Bank (the
Escrow Agent) pursuant to the terms of an Escrow Agreement between the General Partner and the
Escrow Agent (the Escrow Agreement). Your $500,000 Capital Contribution will not be released from
escrow until approval of the first I-526 petition filed by an investor in the Partnership (the Escrow
Release Condition). The $50,000 Administrative Fee will be permitted to be released from Escrow to the
General Partner after your 30-day rescission period has terminated. Upon written notice by the General
Partner to the Escrow Agent that the 30-day rescission period has passed, the $50,000 administrative fee
will be released to the General Partner and is non-refundable. Once the Escrow Release Condition for
your $500,000 is satisfied, meaning that once USCIS has approved the first EB-5 petition for the project,
the funds will remain in escrow until released by the general partner to be used to fund the Project. Until
such time as the general partner releases the funds from escrow, the general partner may, in its sole
discretion, reject an investment in the Partnership. Please deliver a copy of fully executed Exhibits A, B
and C to Richard Deutsch or Laurie Newton at ddeutsch@mountsnow.com or lnewton@mountsnow.com.
If you have any transmission problems, please call Laurie Newton at 802-464-4012. Upon the receipt of
copies of the fully executed Exhibits, Laurie Newton from Mount Snow will fax or email you with a
request to either (1) mail the originals of the fully executed Exhibits A, B and C to the address below, or
(2) if necessary, complete any information that may be missing from any Exhibit.
Upon receiving instructions from Laurie Newton via email or fax, please mail the original completed
Exhibits A, B and C c/o:
Richard Deutsch
Mount Snow GP Services LLP
PO Box 2805
89 Grand Summit Way
West Dover, VT 05356
Tel: 802-464-4012
Emails: ddeutsch@mountsnow.com or lnewton@mountsnow.com
PAYMENT INSTRUCTIONS FOR WIRE TRANSFER:
Amount: US $550,000
People's United Bank
2 Burlington Square
Burlington, Vermont 05401
ABA# 221172186
A/C# 0019100316
Attn: Trust Operations
FBO: Mount Snow Carinthia Group Escrow
For benefit of: . (The Investor)
Partnership Interests are available on a first-come, first-served basis, but subject at all times to the
sole discretion of the General Partner.

EXHIBIT A
INVESTOR ESCROW AGREEMENT
FOR INVESTMENTS IN CARINTHIA GROUP 1, L.P. AND CARINTHIA GROUP 2, L.P.
THIS INVESTOR ESCROW AGREEMENT (the "Agreement"), is made by and among the
undersigned (the "Investor") and
Mount Snow GP Services LLC
and
People's United Bank
2 Burlington Square
Burlington, VT 05401
Peoples United Bank is a savings bank chartered under the laws of the United States of America (the
"Escrow Agent"), as of the date the Escrow Agent signs the Agreement.

Recitals
A.
Offering. Carinthia Group 1, L.P. and Carinthia Group 2, L.P., both Vermont limited
partnerships (the "Partnerships"), are offering to sell limited partnership interests to investors
(collectively, the "Investors" and individually, an "Investor"), pursuant to a Private Placement
Memorandum (the "PPM") and Limited Partnership Agreements included therein (the "Partnership
Agreements"), on the terms and for the purposes set forth therein (the "Offering"). The General Partner of
both Partnerships is Mount Snow GP Services LLC (the "General Partner"). The required minimum
subscription amount for each interest in the Partnerships under the EB-5 Visa Program administered by
United States Citizenship and Immigration Services (USCIS) is US$500,000 (the "Investment"). In
addition, though not part of the Investment, under the terms of the Offering each Investor must also pay
an administrative fee of $50,000 (the "Administrative Fee"), which may also be negotiated and which
amount shall not constitute a capital contribution, but which amount will be paid to the General Partner,
and will be used to pay the fees and expenses of the General Partner and affiliated entities incurred in
structuring and organizing the EB-5 project described in the PPM (the Carinthia Group 1, L.P. EB-5
Project or Carinthia Group 2, L.P. EB-5 Project) in compliance with the requirements of the EB-5
Visa Program, including marketing, consulting, escrow, legal and other fees and expenses and any fees of
foreign broker/dealers, and coordinating with counsel and foreign broker/dealers with respect to the
collection of information from potential alien entrepreneurs and other administrative matters arising in
connection with their admission as limited partners of the Partnership.
B.
Purpose of Agreement. The Escrow Agent has been retained by the General Partner to
hold on deposit, in an account for the benefit of the Investors, the Partnership and the General Partner, the
Investment and Administrative Fee received from each Investor pending the acceptance of their
subscription agreement by the General Partner and the conditions below.
Terms and Provisions
In consideration of the respective covenants and agreements hereinafter set forth, and other good
and valuable consideration now paid by each party to the other (the sufficiency and receipt of which is
hereby acknowledged), the parties hereto agree as follows:

A-1

1.
Acknowledgment of Escrow Agent and Ratification of its Duties. As of the date of this
Agreement, the Escrow Agent acknowledges receipt from the Investor of $500,000 in payment of the
Investment and $50,000 in payment of the Administrative Fee. Note: There may be circumstances that
prevent an investor from paying the Investment and Administrative Fee in one lump sum (e.g. exchange
controls may limit the amount that may be transferred at one time). In that event, indicate the amount of
your initial payment here: US $_________________ and estimate the timing and amount(s) of your
subsequent payment(s) here:_____________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
All funds deposited with the Escrow Agent shall be defined herein as the "Escrow Funds". The
Escrow Funds are comprised of two separate amounts: (1) a $500,000 investor Capital Contribution and
(2) a $50,000 Administrative Fee, or an Administrative Fee amount of $________ as agreed to by the
General Partner and the Investor. The Escrow Agent agrees with the Investor to hold the Escrow Funds
in an account (the "Escrow Account") and disburse the Escrow Funds as set forth herein.
2.

Acknowledgements of Investor.

(a)
The Investor acknowledges that the Investor's subscription may be accepted or rejected
by the General Partner, in its sole discretion. The General Partner may reject Investor's subscription for
any reason without incurring any liability to Investor for this decision.
(b)
The Investor represents that he or she meets the qualifications for investing in the
Partnership as set forth in the PPM, and that the Escrow Agent and the General Partner are relying on this
representation and the representations in the Subscription Documents in accepting the Escrow Funds.
The Investor also acknowledges that the Partnership is a third-party beneficiary of this Agreement.
3.

Release of Escrow Funds/Escrow Release Conditions.

(a) The Escrow Funds comprised of the $500,000 Capital Contribution may not be released to the
Partnership or to the General Partner as set forth in Section 3(c) below until the first investor in either
Partnership receives an approved I-526 petition in the Project (the Escrow Release Condition). The
$50,000 Administrative Fee, or other negotiated Administrative Fee in the amount of $_________, shall
be released to the General Partner from the Escrow Account no sooner than 30 days after an Investor
executes and delivers his or her subscription agreement to the General Partner. The General Partner shall
provide notice to the Escrow Agent of execution and delivery of an Investors subscription documents
after the 30-day rescission period in Section (d) below has expired (Withdrawal of Subscription by
Investor).
(b)
Rejection of Subscription by General Partner. At any time prior to (i) acceptance of the
subscription by the General Partner as set forth in Section 3(c) below or (ii) withdrawal of the
subscription by Investor as set forth in Section 3(d) below, the General Partner may, in its sole discretion,
reject Investors subscription by providing written notice to the Escrow Agent (with a copy to the
Investor) in the form attached hereto as Exhibit 3(b). Upon receipt of such written notice of rejection by
the General Partner by the Escrow Agent, the Escrow Agent shall promptly return the Investment and the
Administrative Fee to Investor without interest and without deduction for any fees.
(c)
Acceptance of Subscription by General Partner. Subject to the satisfaction of the Escrow
Release Condition, at any time prior to withdrawal of the subscription by Investor as set forth in Section
3(d) below, the General Partner may, in its sole discretion, accept Investors subscription by providing

A-2

written notice to the Escrow Agent (with a copy to the Investor) in the form attached hereto as Exhibit
3(c). Upon receipt of such written notice of acceptance by the General Partner by the Escrow Agent, the
Escrow Agent shall release (i) Investors Investment to the Partnership and (ii) Investors Administrative
Fee to the General Partner. Upon acceptance of the subscription by the General Partner, the funds will be
irrevocably committed.
(d)
Withdrawal of Subscription by Investor. (i) Within 30 days of the execution and delivery
of the subscription agreement to the General Partner, the Investor may exercise a right of rescission.
Specifically, in its sole discretion, the Investor may withdraw Investors subscription by providing written
notice to the Escrow Agent (with a copy to the General Partner) in the form attached hereto as Exhibit
3(d). (ii) Upon receipt of such written notice of withdrawal of the Investor by the Escrow Agent in the
30-day rescission period, the Escrow Agent shall promptly return the Investment and the Administrative
Fees to Investor without interest and without deduction for any fees. (iii) After the 30-day rescission
period has passed, the Investor is deemed to have irrevocably committed its funds to the investment and
has no rescission rights, and the Administrative Fee may be released to the General Partner. (iv) The
General Partner must provide written notice to the Escrow Agent that an Investors subscription
agreements have been executed and delivered, that 30 days have passed from their deliver to the General
Partner, and that the Investors Administrative Fees are to be released by the Escrow Agent to the General
Partner.
4.

Duties and Responsibilities of Escrow Agent.

(a)
As Escrow Agent hereunder, Escrow Agent, acting in such capacity, shall have no duties
or responsibilities except for those expressly set forth herein.
(b)
The General Partner and the Investor shall jointly and severally indemnify and hold
harmless the Escrow Agent against any loss, damage or liability, including, without limitation, attorney's
fees which may be incurred by the Escrow Agent in connection with this Agreement, except any such
loss, damage or liability incurred by reason of the negligence or misconduct of the Escrow Agent.
(c)
The Escrow Agent, acting as such, shall not be liable to anyone by reason of an error in
judgment, a mistake of law or fact, or for any act done or step taken or omitted, in good faith, and this
provision shall survive the termination of this Agreement.
(d)
At the time all the Escrow Funds are released by Escrow Agent in accordance with this
Agreement, Escrow Agent shall be discharged from any obligation under this Agreement.
5.

Rights of Escrow Agent Upon Dispute.

(a)
In the event of any disagreement between the Escrow Agent and the Investor or between
them and any other person, resulting in adverse claims or demands being made in connection with the
Escrow Funds, or in the event that the Escrow Agent, in good faith, shall be in doubt as to what action it
should take hereunder, the Escrow Agent may, at its option, refuse to comply with any claims or demands
on it or refuse to take any other action hereunder, so long as such disagreement continues or doubt exists,
and in any such event, the Escrow Agent shall not be or become liable in any way or to any person for its
failure or refusal to act, and the Escrow Agent shall be entitled to continue so to refrain from acting until
(i) the rights of the Escrow Agent and the Investor shall have been fully and finally adjudicated by a court
of competent jurisdiction, or (ii) all differences shall have been adjusted and all doubt resolved by
agreement between the Escrow Agent and the Investor, and the Escrow Agent shall have been notified
thereof in writing.

A-3

(b)
In the event Escrow Agent becomes involved in litigation in connection with this
Agreement, the Investor and the General Partner agree to jointly and severally indemnify and hold the
Escrow Agent harmless from all losses, costs, damages, expenses, liabilities, judgments and reasonable
attorney's fees suffered or incurred by Escrow Agent as a result thereof, except that this indemnity
obligation shall not apply to any litigation in which relief is sought for the negligence or misconduct of
the Escrow Agent.
(c)
The Escrow Agent may consult with independent legal counsel in the event of any
dispute or questions as to the construction of any of the provisions hereof or its duties hereunder and it
shall incur no liability and shall be fully protected in acting in accordance with the opinion and
instructions of counsel. The Escrow Agent shall have the right to file legal proceedings, including
interpleader, to determine the proper dispositions of assets hereunder, all costs thereof constituting an
expense of administration of this Agreement.
6.
Notices. All notices, instructions and other communications required or permitted to be
given hereunder or necessary or convenient in connection herewith shall be in writing and shall be
deemed to have been duly given if delivered personally or telexed or mailed, postage prepaid, registered
or certified mail, as follows:
(a)

If to the Investor: To the address set forth on the signature page.

(b)

If to Escrow Agent:
Peoples United Bank
2 Burlington Square
Burlington, VT 05401 Attn: Institutional Trust

(c)

If to the General Partner:

Richard Deutsch
Mount Snow GP Services LLP
PO Box 2805
89 Grand Summit Way
West Dover, VT 05356
Please also send by email to Laurie Newton at LNewton@mountsnow.com

Any notice delivered or telexed as aforesaid shall be deemed to have been received by the party or parties
to whom it is sent on the date of its being so delivered or telexed. Any notice mailed as aforesaid shall be
deemed to have been received by the party or parties hereto to whom it is so mailed five business days
after the date of its being so mailed.
7.

Generally.

(a)
This Agreement shall be governed by and construed and in accordance with the laws of
the State of Vermont, United States of America.
(b)
The section headings are for reference purposes and shall not affect the meaning or
interpretation of this Agreement.

A-4

(c)
This Agreement shall be binding upon, and inure to the benefit of and be enforceable by
the parties hereto and their respective successors and assigns.
(d)
The terms and provisions of this Agreement may only be amended, modified, waived,
superseded or canceled by written instrument executed by both of the parties hereto or, in the case of a
waiver, by the party or parties waiving compliance. Notwithstanding the foregoing, no term which affects
the Investor's rights or responsibilities may be amended, modified, superseded or canceled without the
prior express written consent of the Investor.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the dates set forth below.

INVESTOR

BY
Name:
Address:

Dated: _________________

ESCROW AGENT
PEOPLES UNITED BANK
BY
Name:
Duly Authorized Agent
Dated: _________________

GENERAL PARTNER
MOUNT SNOW GP SERVICES LLC
BY
Name:
Duly Authorized Agent
Dated: _________________

A-5

EXHIBIT 3(b)
NOTICE OF REJECTION OF SUBSCRIPTION

Pursuant to Section 3(b) of that certain Investor Escrow Agreement (the Escrow Agreement) by
and among [_________________] (the Investor), Mount Snow GP Services LLC (the General Partner)
and Peoples United Bank (the Escrow Agent), the General Partner hereby notifies the Escrow Agent that
it has rejected the subscription of the Investor. The Escrow Agent is hereby instructed to return the Escrow
Funds (as defined in the Escrow Agreement) in the amount of $550,000 to the Investor.

MOUNT SNOW GP SERVICES LLC

By: _______________________
Name:
Title:

PLEASE PROVIDE WIRING INSTRUCTIONS, OR AN ADDRESS FOR RETURN OF FUNDS:

___________________
___________________
___________________
___________________
___________________
___________________

A-6

EXHIBIT 3(c)
NOTICE OF ACCEPTANCE OF SUBSCRIPTION

Pursuant to Section 3(c) of that certain Investor Escrow Agreement (the Escrow Agreement) by
and among [_________________] (the Investor), Mount Snow GP Services LLC (the General Partner)
and Peoples United Bank (the Escrow Agent), the General Partner hereby notifies the Escrow Agent that
it has accepted the subscription of the Investor. The General Partner represents and warrants to the Escrow
Agent that the Escrow Release Conditions have been satisfied. The Escrow Agent is hereby instructed to
release Investors $500,000 Investment to the Partnership. Capitalized terms used herein and not otherwise
defined have the meanings set forth in the Escrow Agreement.

MOUNT SNOW GP SERVICES LLC

By: _______________________
Name:
Title:

A-7

EXHIBIT 3(d)
NOTICE OF WITHDRAWAL OF SUBSCRIPTION WITHIN 30-DAY RESCISSION PERIOD

Pursuant to Section 3(d) of that certain Investor Escrow Agreement (the Escrow Agreement) by
and among [_________________] (the Investor), Mount Snow GP Services LLC (the General Partner)
and Peoples United Bank (the Escrow Agent), the Investor hereby notifies the Escrow Agent that it is
withdrawing its subscription within 30 days of the subscription documents being executed and delivered to
the General Partner. The Investor represents and warrants to the Escrow Agent that it has not received
notice that the subscription has been accepted by the General Partner. The Escrow Agent is hereby
instructed to return the Escrow Funds (as defined in the Escrow Agreement) in the amount of $550,000 to
the Investor.

INVESTOR

By: _______________________
Name:
Title:

PLEASE PROVIDE WIRING INSTRUCTIONS, OR AN ADDRESS FOR RETURN OF FUNDS:

___________________
___________________
___________________
___________________
___________________
___________________

A-8

INVESTOR QUESTIONNAIRE
THIS QUESTIONNAIRE IS REQUIRED TO ENSURE THAT THE OFFERING
IS CONDUCTED IN COMPLIANCE WITH APPLICABLE EXEMPTIONS FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND UNDER
THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED.
Mount Snow GP Services LLC
Carinthia Group 1 and 2
89 Grand Summit Way
West Dover, VT 05356
Gentlemen:
I understand that the limited partnership interest (the Interest) offered for sale to me by Carinthia Group
1, L.P. or Carinthia Group 2, L.P. (the Partnership) will not be registered under the Securities Act of
1933, as amended (the Act) and applicable state securities laws (the State Acts), nor will the
Partnership be registered as an investment company under the Investment Company Act of 1940, as
amended (the ICA).
In order to induce the Partnership to permit me to purchase an Interest, I hereby warrant and represent the
following:
NOTE: The information provided herein will be relied upon in connection with the determination as to
whether you meet the standards imposed by Regulation D or Regulation S promulgated under the Act,
since the Interests offered hereby have not been and will not be registered under the Act and are being
sold in reliance upon the exemption provided by Regulation S or Regulation D as applicable to the
Investor. It will also be used to determine whether you are a qualified purchaser under Section 2(a)(51)
of the ICA. All information supplied will be treated in confidence; except that this Questionnaire may be
presented to such parties as deemed appropriate or necessary to establish that the sale of an Interest to you
will not result in violation of the exemption from registration under the Act which is being relied upon in
connection with the sale of the Interest.
INSTRUCTIONS: Please answer each question fully and attach additional information, if necessary. If
the answer to any question is "None" or "Not Applicable" please so state. Please sign and date the
Questionnaire on the final page.
1.

Name:
(dd/mm/yyyy)

Date of Birth:
Residence Address:

Country of Residence:
Citizenship:
Residence Telephone Number:
Mobile/Cell Telephone Number:
E-mail:

B-1

2.

(a)

Education:

Other specialized Education or Instruction:

(b)

3.

All Professional Memberships or Licenses:

Occupation
Present occupation (with date of commencement):

Occupations during last five years (with dates):

4.

My net worth or joint net worth with my spouse is at least $US_________. My proposed
investment will
will not
exceed ten percent of my net worth.
NOTE: for purposes of calculating your net worth, your primary residence shall not be included
as an asset and (a) indebtedness that is secured by your primary residence, up to the estimated fair
market value of the primary residence at the time of the sale of the Interest, shall not be included
as a liability (except that if the amount of such indebtedness outstanding at the time of sale of the
Interest exceeds the amount outstanding 60 days before such time, other than as a result of the
acquisition of the primary residence, the amount of such excess shall be included as a liability);
and (b) indebtedness that is secured by your primary residence in excess of the estimated fair
market value of the primary residence at the time of the sale of the Interest shall be included as a
liability.

5.

My income
have
I
current year.

has
has not exceeded $US200,000 in each of the two most recent years, and
do not have a reasonable expectation of reaching the same income level in the

My joint income with my spouse

have
most recent years, and I
income level in the current year.

has
has not exceeded $US300,000 in each of the two
do not have a reasonable expectation of reaching the same

B-2

6.

I do not have any other investments or contingent liabilities which I reasonably anticipate could
cause the need for sudden cash requirements in excess of cash readily available to me.
Yes

7.

I have checked my investment objectives where applicable:

Income

8.

Appreciation

Other Please specify: _____________________

I can bear the risk of the proposed investment, including the loss of my entire investment, a lack
of liquidity in the investment or an inability to sell the investment for an indefinite period of time.
Yes

9.

No

No

I learned about this investment in the following manner (check each applicable line).
Personal contact or acquaintance
Investment adviser or counselor
Prior investment or Association with the Partnership
Broker-dealer
Affiliation with business or management
Immigration Research
Other (please state):

10.

With respect to my qualifications as an "alien entrepreneur" for purposes of the Immigration and
Nationality Act, as amended, I represent and warrant that:
(a)

I have attained the age of 18 years and have the legal capacity and competence to execute
all necessary documents in connection with this Offering;

(b)

I have complied and will continue to comply with all the requirements, terms and
conditions prescribed by U.S. Citizen and Immigration Services and the U.S. Department
of State in connection with my forthcoming petition as an EB-5 fifth employment-based
visa preference "alien entrepreneur" and subsequent applications for lawful permanent
residence;

(c)

If I am resident of and living in the United States at the time of sale, I have accumulated a
net worth of not less than $US1,000,000; or an individual income in excess of $200,000
each of the two most recent years; or a joint income with my spouse in excess of
$300,000 in each of the two most recent years and reasonably expect to reach the same
income level in the current year (for purposes of calculating your net worth, your primary
residence shall not be included as an asset and (a) indebtedness that is secured by your
primary residence, up to the estimated fair market value of the primary residence at the
time of the sale of securities, shall not be included as a liability; liability (except that if
the amount of such indebtedness outstanding at the time of sale of securities exceeds the
amount outstanding 60 days before such time, other than as a result of the acquisition of

B-3

the primary residence, the amount of such excess shall be included as a liability); and (b)
indebtedness that is secured by your primary residence in excess of the estimated fair
market value of the primary residence at the time of the sale of securities shall be
included as a liability);
(d)

I am in good health and know of no health impairment which would likely result in my
exclusion or the exclusion of any of my family members under the Immigration and
Nationality Act, as amended; and

(e)

I have never been convicted of any criminal offense, including any crime of moral
turpitude, or engaged in any acts which constitute crimes of which I have not been
convicted and I do not know of any facts howsoever whatsoever which would result in
my failure to meet the requirements of an "alien entrepreneur" under the applicable
sections of the US Immigration & Nationality Act, or any grounds of inadmissibility that
the United States Government may cite which would result in my failure to be admitted
into the United States as a lawful permanent resident.

(f)

I have read Grounds for exclusion or inadmissibility included under Risk Factors
Risk Factors Related to the Immigration Process in the Private Placement Memorandum,
and do not know of any grounds of inadmissibility that the United States Government
may cite which would result in my failure to be admitted into the United States as a
lawful permanent resident, and

(g)

I have read Risk Factors Risk Factors Related to the Immigration Process in the
Private Placement Memorandum and do not know of any facts whatsoever which would
result in my failure to meet the requirements of an "alien entrepreneur" under the
applicable sections of the US Immigration and Nationality Act.

11.

I was not solicited by any general form of advertisement for this investment.

12.

I am aware that there are limitations on my ability to sell the Interest and that the certificate
evidencing the Interest will carry a restrictive legend.

13.

I am purchasing the Interest for personal investment and without a view to redistribution.

14.

I represent and warrant to the Partnership and its general partner that the information contained in
this Investor Questionnaire is true, complete and correct.

15.

I agree to notify the Partnership promptly of any change in the information in this Questionnaire
which may occur prior to transfer of the Interest to me.

B-4

16.

The amounts contributed by me to the Partnership were not and are not directly or indirectly
derived from activities that may contravene federal, state or international laws and regulations,
including anti-money laundering laws and regulations. Federal regulations and Executive Orders
administered by the U.S. Treasury Departments Office of Foreign Assets Control (OFAC)
prohibit, among other things, the engagement in transactions with, and the provision of services to,
certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited
countries, territories, persons and entities can be found on the OFAC website at
http://www.treas.gov/ofac. In addition, the programs administered by OFAC (the OFAC
Programs) prohibit dealing with individuals or entities in certain countries regardless of whether
such individuals or entities appear on the OFAC lists.
To the best of my knowledge, none of (a) me, or (b) any person controlling or controlled by me is a
country, territory, individual or entity named on an OFAC list, nor is a person prohibited under the
OFAC Programs.
Please be advised that the Partnership may not accept any amounts from a prospective investor if it
cannot make the representations set forth in the preceding paragraphs. If an existing investor cannot
make these representations, the Partnership may require the withdrawal of such investor.
I agree promptly to notify the Partnership should I become aware of any change in the information
set forth in these representations. I am advised that, by law, the Partnership may be obligated to
freeze my account, including by segregating the assets in the account in compliance with
governmental regulations, and the Partnership may also be required to report such action and to
disclose my identity to OFAC. I further acknowledge that the General Partner may, by written
notice to me, suspend distributions payable to me if the General Partner reasonably deems it
necessary to do so to comply with anti-money laundering regulations applicable to the Partnership,
the General Partner and its affiliates, subsidiaries or associates or any of the Partnerships other
service providers.

17.

During the past three years, have you individually, or together with your spouse, purchased
securities in private placement offerings in which you did not qualify as an accredited investor?
Yes

18.

During the past three years, have you individually, or together with your spouse, purchased
securities in private placement offerings in which you or your spouse were not an affiliate (e.g.,
officer or member of the board of directors)?
Yes

19.

No

No

Purchaser Representative. If you plan to use a Purchaser Representative to assist you in

analyzing this investment, please provide his/her name and address:
___________________________
___________________________
___________________________
___________________________
If you do not plan to use a Purchaser Representative, do you have such knowledge and experience
such that you are capable of evaluating the merits and risks of this investment?
Yes

No _______

B-5

20.

The undersigned hereby represents and warrants that the undersigned is a Qualified Purchaser
1
under Section 2(a)(51) of the ICA , or that the undersigned is an accredited investor (Please check
the applicable box that applies):
A natural person who owns at least $5,000,000 in investments (as defined in Rule
2a51-1 under the ICA), or
The undersigned is an accredited investor based on (i) earned income that exceeded
$200,000 per year (or $300,000 per year together with a spouse) in each of the prior
two years, and reasonably expects the same for the current year for each of the past
two years, or has a net worth over $1 million, either alone or together with a spouse
(excluding the value of the spouses primary residence.

Dated:

Investor Signature:

In order to complete the following information, the undersigned must read Annexes 1 and 2 attached hereto for the
definition of investments and for information regarding the valuation of investments, respectively.

B-6

ANNEX 1

DEFINITION OF INVESTMENTS
The term investments means:
(1)

Securities, other than securities of an issuer that controls, is controlled by or is under

common control with, the Investor that owns such securities, unless the issuer of such
securities is:
(i)
an investment company or a company that would be an investment company
but for the exclusions or exemptions provided by the Investment Company Act, or a
commodity pool; or
(ii)

a Public Company (as defined below); or

(iii)
a company with shareholders equity of not less than US$50 million
(determined in accordance with generally accepted accounting principles) as reflected on
the companys most recent financial statements; provided, that such financial statements
present the information as of a date within 16 months preceding the date on which the
Investor acquires Interests;
(2)

Real estate held for investment purposes;

(3)

Commodity Interests (as defined below) held for investment purposes;

(4)

Physical Commodities (as defined below) held for investment purposes;

(5)

To the extent not securities, Financial Contracts (as defined below) entered into for
investment purposes;

(6)

In the case of an Investor that is a company that would be an investment company but for
the exclusions provided by Section 3(c)(1) or 3(c)(7) of the Investment Company Act, or
a commodity pool, any amounts payable to such Investor pursuant to a firm agreement or
similar binding commitment pursuant to which a Person has agreed to acquire an interest
in, or make capital contributions to, the Investor upon the demand of the Investor; and

(7)

Cash and cash equivalents (including foreign currencies) held for investment purposes.

Real estate that is used by the owner or a Related Person (as defined below) of the
owner for personal purposes, or as a place of business, or in connection with the conduct of the
trade or business of such owner or a Related Person of the owner, shall NOT be considered real
estate held for investment purposes; provided, that real estate owned by an Investor that is
engaged primarily in the business of investing, trading or developing real estate in connection
with such business may be deemed to be held for investment purposes. However, residential real
estate shall not be deemed to be used for personal purposes if deductions with respect to such
real estate are not disallowed by Section 280A of the Code.
A Commodity Interest or Physical Commodity owned, or a Financial Contract
entered into, by the Investor that is engaged primarily in the business of investing, reinvesting or

B-7

trading in Commodity Interests, Physical Commodities or Financial Contracts in connection with

such business may be deemed to be held for investment purposes.
Commodity Interests means commodity futures contracts, options on commodity
futures contracts and options on physical commodities traded on or subject to the rules of:
(i)
any contract market designated for trading such transactions under the U.S.
Commodity Exchange Act, as amended, and the rules thereunder; or
(ii)
any board of trade or exchange outside the United States, as contemplated in
Part 30 of the rules under the U.S. Commodity Exchange Act, as amended.
Public Company means a company that:
(i) files reports pursuant to Section 13 or 15(d) of the U.S. Securities Exchange
Act of 1934, as amended; or
(ii)
has a class of securities that are listed on a Designated Offshore Securities
Market, as defined by Regulation S of the Securities Act.
Financial Contract means any arrangement that:
(i)
takes the form of an individually negotiated contract, agreement, or option to
buy, sell, lend, swap or repurchase, or other similar individually negotiated transaction
commonly entered into by participants in the financial markets;
(ii) is in respect of securities, commodities, currencies, interest or other rates,
other measures of value, or any other financial or economic interest similar in purpose or
function to any of the foregoing; and
(iii)
is entered into in response to a request from a counter party for a quotation, or
is otherwise entered into and structured to accommodate the objectives of the
counterparty to such arrangement.
Physical Commodities means any physical commodity with respect to which a
Commodity Interest is traded on a market specified in the definition of Commodity Interests
above.
Related Person means a person who is related to the Investor as a sibling, spouse or
former spouse, or is a direct lineal descendant or ancestor by birth or adoption of the Investor, or
is a spouse of such descendant or ancestor; provided, that in the case of a Family Company, a
Related Person includes any owner of the Family Company and any person who is a Related
Person of such an owner. Family Company means a company that is owned directly or
indirectly by or for two or more natural persons who are related as siblings or spouse (including
former spouses), or direct lineal descendants by birth or adoption, spouses of such persons, the
estates of such persons, or foundations, charitable organizations or trusts established for the
benefit of such persons.
For purposes of determining the amount of investments owned by a company, there
may be included investments owned by majority-owned subsidiaries of the company and
investments owned by a company (Parent Company) of which the company is a majority-

B-8

owned subsidiary, or by a majority-owned subsidiary of the company and other majority-owned

subsidiaries of the Parent Company.
In determining whether a natural person is a qualified purchaser, there may be
included in the amount of such persons investments any investment held jointly with such
persons spouse, or investments in which such person shares with such persons spouse a
community property or similar shared ownership interest. In determining whether spouses who
are making a joint investment in the Fund are qualified purchasers, there may be included in the
amount of each spouses investments any investments owned by the other spouse (whether or not
such investments are held jointly). There shall be deducted from the amount of any such
investments any amounts specified by paragraph 2(a) of Annex 2 incurred by such spouse.
In determining whether a natural person is a qualified purchaser, there may be included in the
amount of such persons investments any investments held in an individual retirement account or
similar account the investments of which are directed by and held for the benefit of such person.

B-9

EXHIBIT B
Annex 2
VALUATION OF INVESTMENTS
The general rule for determining the value of investments in order to ascertain
whether a Person is a qualified purchaser is that the value of the aggregate amount of
investments owned and invested on a discretionary basis by such Person shall be their fair
market value on the most recent practicable date or their cost. This general rule is subject to the
following provisos:
(1)

In the case of Commodity Interests, the amount of investments shall be the value of the
initial margin or option premium deposited in connection with such Commodity Interests;
and

(2)

In each case, there shall be deducted from the amount of investments owned by such
Person the following amounts:
(a)

The amount of any outstanding indebtedness incurred to acquire or for the purpose
of acquiring the investments owned by such Person.

(b)

A Family Company, in addition to the amounts specified in paragraph (a) above,

shall have deducted from the value of such Family Companys investments any
outstanding indebtedness incurred by an owner of the Family Company to acquire
such investments.

27143726v.1

B-10

SUBSCRIPTION AGREEMENT AND CONSENT

TO LIMITED PARTNERSHIP AGREEMENT
Dated: ____/___/____ (MONTH/DAY/YEAR)
Carinthia Group 1, L.P.
89 Grand Summit Way
West Dover, VT 05356
Gentlemen:
The undersigned (or "I" or "me" or "my," as applicable), subject to the terms and conditions herein,
hereby irrevocably subscribes for one limited partnership Interest (the Interest) in Carinthia Group 1,
L.P., a Vermont limited partnership or Carinthia Group 2, L.P. (the Partnership). The minimum capital
contribution (the "Capital Contribution") is Five Hundred Thousand Dollars (US$500,000) for an investor
seeking lawful permanent resident status under the EB-5 Visa Program under 203 (b)(5)(A) - (D) of the
Immigration and Nationality Act (the "Act") (the "EB-5 Visa Program"). 1
In addition, though not part of my investment for purposes of the EB-5 Visa Program, under the terms of
the Limited Partnership Agreement I am also paying an "Administrative Fee" of Fifty Thousand Dollars
(US$50,000) to Mount Snow GP Services LLP, the general partner of the Partnership (the General
Partner), which amount shall not constitute a capital contribution, but which amount will be used to pay
(including reimbursement of previously paid amounts) the fees and expenses of the General Partner and
Mount Snow Ltd. incurred in structuring and organizing the project in compliance with the requirements
of the EB-5 Visa Program, including marketing, consulting, escrow, legal and other fees and expenses
and any fees of foreign broker/dealers, and coordinating with counsel and foreign broker/dealers with
respect to the collection of information from potential alien entrepreneurs and other administrative
matters arising in connection with their admission as limited partners of the Partnership.
Payment in full for the Interest purchased and the Administrative Fee must accompany this Agreement.
An "Interest" is defined In the Limited Partnership Agreement as the partner's right, title, and interest in
the Partnership, including any and all assets, distributions, losses, profits and shares of the Partnership,
whether cash or otherwise, and any other interests and economic incidents of ownership whatsoever of
such partner in the Partnership.
Subject to the terms set forth herein, the undersigned agrees that the Partnership may accept or reject this
Subscription Agreement in its sole and absolute discretion. If upon payment of the Subscription Amount
of $550,000 that consists of (a) the Capital Contribution of US$500,000 and (b) the Administrative Fee of
US$50,000, and subject to the terms of the Escrow Agreement by and between the General Partner and
Peoples United Bank (the Escrow Agreement) (a copy of which has been provided to the undersigned),
the Partnership accepts the Subscription Agreement, the Partnership shall notify the undersigned that it
has accepted the subscription herein by delivering to the undersigned a fully signed copy of the
Subscription Agreement and the undersigned shall be admitted as a Limited Partner of the Partnership,
with a certificate evidencing the undersigned's Interest in the Partnership issued in the undersigneds
name to the undersigned within a reasonable period of time.

For investors not seeking the benefits of such EB-5 program, the minimum Capital Contribution may be reduced at
the sole discretion of the general partner.

C-1

Parallel Fund
Carinthia Group 1, L.P. will be exempt from registration under Section 3(c)(1) of the Investment
Company Act of 1940. A separate parallel fund, Carinthia Group 2, L.P., is being established which will
rely upon another exemption; it will have an identical investment program, the same general partner and
substantially identical Limited Partnership Agreement with that of Carinthia Group 1, L.P. Without
altering the economic rights and obligations of the partners, the general partner, in its reasonable
discretion, may at any time cause a limited partner to exchange its interest in Carinthia Group 1, L.P. for
an economically equivalent interest in the parallel fund, Carinthia Group 2, L.P.
Investor Representations
I reaffirm the representations concerning me made in the Investor Questionnaire, all of which are hereby
incorporated herein by reference. I further represent and warrant as follows:
(a)
I have received and read the Private Placement Memorandum, dated [____________],
including the Limited Partnership Agreement and Exhibits thereto (the "Memorandum"), covering the
sale of the Interests (the Offering) and hereby acknowledge that I am not acting on the basis of any
representations and warranties other than those contained in the Memorandum. I hereby acknowledge
that all matters relating to the Memorandum have been explained to me to my satisfaction and approval,
and that I understand the speculative nature and the risks involved in the proposed investment. Nothing
set forth in the Limited Partnership Agreement or the terms of the Offering constitutes a guaranty of
repayment of my capital contribution or can be considered an agreement of any kind to redeem my
investment under any circumstances. My investment is totally at risk.
(b)
I, either alone or together with my advisors, have such knowledge and experience in financial
and business matters that I am capable of evaluating the merits and risks of the purchase of the Interest
and of protecting my interests in connection therewith. I understand that no federal or state or other
government agency has passed upon the Interest or made any finding or determination concerning the
fairness or advisability of this investment.
(c)
I have been furnished with all information which I deem necessary to evaluate the merits and
risks of purchasing the Interest and have had the opportunity to ask questions and receive answers
concerning the Interest and the Partnership from the General Partner and the Partnership and all questions
posed have been answered to my satisfaction. I have been given the opportunity to visit the Mount Snow
ski resort and obtain any additional information I deem necessary to verify the accuracy of any
information obtained concerning the Interest and the Partnership.
(d)
I agree to be bound by all of the terms and provisions of the Memorandum and to perform
any obligations therein imposed on a purchaser with respect to an Interest purchased as a result thereof,
and I acknowledge that the Partnership will be relying on the agreements and information as provided by
me in determining my qualifications to invest in the Partnership.
(e)

I am (check the box that applies):

(i) A resident of, and living in the United States at the time of sale and therefore
Regulation D of the Securities Act of 1933, as amended (the Securities Act), shall apply
(Regulation D Investor); or

C-2

(ii) Not resident in the United States at this time. I will not be a resident at the
time of sale, and therefore Regulation S of the Securities Act shall apply (Regulation S
Investor).
(f)
For Regulation D Investors only: I am an accredited investor (as defined in Regulation D
under the Securities Act).
(g)
For Regulation S Investors only: I am not a "U.S. person" (as defined in Regulation S under
the Securities Act) and am not acquiring the Interest for the account or benefit of any U.S. person. I was
not physically present in the United States (i) when this Subscription Agreement and other offering
materials were received from the Partnership or any person acting on its behalf, or (ii) when I execute the
Subscription Agreement, the Partnership Agreement and any other materials executed by me in
connection with my purchase of the Interest. I agree that, in addition to any other limitations set forth
herein or in the Partnership Agreement, I (i) shall not resell the Interest except in accordance with
Regulation S, pursuant to the registration requirements of the Securities Act or pursuant to valid
exemption from the registration requirements of the Securities Act, and (ii) shall not to engage in hedging
transactions with regard to such Interest unless in compliance with the Securities Act. I understand that
the Partnership shall refuse to register any transfer of the Interest not made in accordance with this
Subscription Agreement and the Partnership Agreement. If I act in violation of these restrictions, I shall
be solely responsible for any liability resulting from such violation. I understand that any certificate or
other document evidencing an Interest shall be endorsed with a legend substantially to such effect.
(h)
The Partnership has made all documents pertaining to this investment available to me and, if I
so requested, to my attorney and/or accountant. I have relied solely upon the Memorandum presented by
the Partnership, the Exhibits to the Memorandum, and such independent investigations as made by me in
making a decision to purchase the Interest subscribed for herein. I have received all information and data
that I believe to be necessary in order to reach an informed decision as to the advisability of an investment
in the Interest. To the extent that I have deemed it appropriate to do so, I have retained, and relied upon,
appropriate professional advice regarding the tax, legal, immigration and financial merits and
consequences of an investment in the Interest.
(i)
I am investing in my own name and I am acquiring the Interest for my own account, for
investment only and not with a view to or in connection with any resale or distribution of the Interest. I
have no contract, undertaking, agreement or arrangement with any person to sell, transfer or pledge the
Interest.
(j)
I understand that the Interest has not been registered under the Securities Act, or any state
securities laws by reason of specific exemptions under the provisions thereof which depend in part upon
the representations made by me in this Subscription Agreement. The Partnership is relying upon my
representations contained in this Subscription Agreement for the purpose of determining whether this
transaction meets the requirements for such exemptions. I hereby agree to indemnify the Partnership, the
General Partner, their affiliates, agents, consultants and advisors, including their respective members,
officers and directors, and to hold each harmless from and against all liabilities, costs or expenses
(including attorneys fees) arising by reason of or in connection with any misrepresentation or any breach
of such warranties by me, or my failure to fulfill any of my covenants or agreements set forth herein, or
arising as a result of the sale or distribution of the Interest by me in violation of the Securities Exchange
Act of 1934, as amended, the Securities Act, or any other applicable law
(k)
I understand that the Interests offered by the Partnership are restricted securities under
applicable federal securities laws and the Securities Act and the rules of the Securities and Exchange
Commission provide, in substance, that I may only dispose of the Interest pursuant to an effective

C-3

registration statement under the Securities Act or an exemption from such registration if available (as
evidenced by a written opinion of counsel of the Partnership). I agree that I shall be responsible for
compliance with all conditions on transfer imposed by the Limited Partnership Agreement and any
regulatory authority and for any expenses incurred by the Partnership for legal or accounting services in
connection with reviewing any proposed transfer or issuing opinions in connection therewith. In addition
to the foregoing, I acknowledge an understanding of the restrictions on transferability of the Interest under
the Limited Partnership Agreement and realize that no transfer may occur, excepting as permitted under
the Limited Partnership Agreement. I understand that any certificate or other document evidencing an
Interest shall be endorsed with a legend substantially to such effect.
(l)
This Subscription Agreement and the representations and warranties contained herein shall be
binding upon my heirs, legal representatives, successors and assigns.
For investors subscribing for an interest to meet the requirements of the EB-5 Visa Program
With respect to my qualifications as an alien entrepreneur for purposes of the EB-5 Visa Program, I
represent, acknowledge and warrant to the Partnership and the General Partner as follows:
(i)
I have attained the age of 18 years and have the legal capacity and competence to execute all
necessary documents in connection with this Offering and to take all actions required pursuant to those
documents.
(ii)
I shall hire independent counsel for immigration processing and other legal matters. I shall
be responsible for payment of my own legal fees and costs.
(iii)
I have complied and will continue to comply with all the requirements, terms and conditions
prescribed by U.S. Citizen and Immigration Services and the U.S. Department of State in connection with
my forthcoming petition I-526 Petition and subsequent applications for lawful permanent residence.
(iv)
I am in good health and know of no health impairment which would likely result in my
exclusion or the exclusion of any my family members under the US Immigration and Nationality Act, as
amended.
(v)
I have never been convicted of any criminal offense, including crimes of moral turpitude, or
engaged in any acts which constitute crimes of which I have not been convicted and I do not know of any
facts howsoever whatsoever which would result in my failure to meet the requirements of an "alien
entrepreneur" under the applicable sections of the US Immigration and Nationality Act, or any grounds of
inadmissibility that the United States Government may cite which would result in my failure to be
admitted into the United States as a lawful permanent resident. See section captioned "Risk Factors Risk
Factors Related to the Immigration Process" in the Memorandum.
(vi)
I understand that the Partnership and the General Partner shall use their reasonable efforts to
provide documentation to my immigration counsel in support of the filing of my I-526 Petition.
(vii)
I understand that the Partnership and the General Partner shall use their reasonable efforts to
provide documentation to my immigration counsel in support of the filing of my I-829 Petition and
hereby authorize the General Partner to engage with, delegate to, and reasonably compensate qualified
persons in the assembly and preparation of documents, reports and required verification of requisite job
creation in connection with and in support of my I-829 Petition to remove conditions to obtaining
permanent residency. I acknowledge that any costs incurred by the General Partner pursuant to the
foregoing authorization shall be reimbursed by the Partnership.

C-4

(viii) I understand that upon acceptance of my subscription and admittance as a limited partner of
the Partnership, it is my sole responsibility and at my own risk and cost to file my I-526 and I-829
petitions within the periods prescribed by applicable laws. I understand that I am not entitled to a refund
of my Capital Contribution or Administrative Fee for failure to file my I-526 or I-829 Petitions within the
periods prescribed by applicable laws.
(ix) I understand that in general, once the General Partner accepts the investment and the funds are
released from escrow, the funds are nonrefundable. However, I may seek a return of the $500,000 capital
contribution and a portion of the $50,000 administrative fee if my I-526 petition is denied. Any return of
funds is subject to the discretion of the General Partner, and requires that I have made a good faith effort
to secure USCIS approval of my I-526 petition. A request for the return of capital and a portion of the
administrative fee must be made in writing to the General Partner.
(x) If I do not have a US social security number (SSN) or an individual tax identification number
(ITIN) at the time of my investment into the Partnership, I must apply for and provide one in a timely
manner after the investment and prior to any distributions to me as described in the Partnership
Agreement.

C-5

Power of Attorney
To facilitate the expeditious administration of the business operations of the Partnership, I hereby
irrevocably designate and appoint [ Richard Deutsch ], or his designee, with full power of substitution,
my agent and attorney-in-fact in my name, place and stead to do any act or thing required by me under the
Limited Partnership Agreement and to make, execute, swear to and acknowledge, amend, file, record,
deliver and publish, or apply for (a) any certificate of limited partnership, or amended certificate of
limited partnership required to be filed on behalf of the Partnership under the laws of the State of
Vermont, or required or permitted to be filed or recorded under the statutes relating to limited
partnerships under the laws of any jurisdiction in which the Partnership shall engage or seek to engage in
business; (b) any fictitious or assumed name certificate required or permitted to be filed by or on behalf of
the Partnership; (c) any other instruments necessary to conduct the operations of the Partnership or which
may be required or permitted by law to be filed on behalf of the Partnership; and (d) a social security
number (SSN) or an individual tax identification number (ITIN) in connection with distributions to be
made to me under the Limited Partnership Agreement. Provided, however, the said agent and attorney-infact may not take any action which under the Limited Partnership Agreement requires or permits the
holders of the Interests to vote. The existence of this power of attorney, which shall not be affected by
my disability, shall not preclude execution of any such instrument by me individually on such matter.
The foregoing power of attorney is coupled with an interest, shall be irrevocable and shall survive my
death, bankruptcy or incapacity and the assignment by me of my Interest. Any person dealing with the
Partnership shall conclusively presume and rely upon the fact that any such instrument executed by such
agent and attorney-in-fact is authorized, regular and binding without further inquiry. I shall execute and
deliver to the Partnership within five days after receipt of a request therefore by the Partnership such
further designations, powers of attorney and other instruments as the Partnership shall reasonably deem
necessary.

Consent to Limited Partnership Agreement

The undersigned hereby consents (the Consent) to the terms and conditions of the Limited Partnership
Agreement of Carinthia Group 1, L.P. or Carinthia Group 2, L.P. (the Partnership) in connection with
the undersigneds subscription for a limited partnership interest in the Partnership (an Interest) for a
capital contribution of US$500,000 and agrees that this Consent shall constitute the equivalent of signing
the Limited Partnership Agreement.
The undersigned also confirms and attests that I have received and reviewed, and understand and am fully
satisfied with, all of the information and documentation I consider necessary or appropriate in deciding
whether to purchase an Interest in the Partnership, including but not limited to the Memorandum,
including all exhibits thereto and all financial information disclosed therein or under the Limited
Partnership Agreement; have had the opportunity to ask questions and receive answers from the General
Partner and the Partnership regarding the terms and conditions of the purchase of an Interest in the
Partnership, and regarding the business, properties, prospects, risk factors and financial condition of the
Partnership; and have had the opportunity to review the books and records of the Partnership and to
obtain additional information (to the extent the Partnership possessed such information or could acquire it
without unreasonable effort or expense) necessary to verify the accuracy of any information furnished to
me or to which I have had access.

C-6

The undersigned acknowledges the receipt of a true and correct copy of the Memorandum
including the Limited Partnership Agreement and agrees to be bound by its terms. My Capital
Contribution shall be used to further the business purposes of the Partnership as set forth in the
Limited Partnership Agreement and the Memorandum.

Individual Investor
Name
Date

Signature
Address

Country of Residence
Place of Birth
Telephone:

Email:
ACCEPTANCE

On this _____ day of ____________, 20__, Carinthia Group 1, L.P./Carinthia Group 2, L.P. (the
Partnership) hereby accepts the subscription of _________________________ for one Interest, on the
terms set forth herein.
Carinthia Group 1, L.P./Carinthia Group 2, L.P.
By: Mount Snow GP Services LLC, the General Partner

By:
Duly Authorized Agent
ACCEPTANCE OF AGENT UNDER POWER OF ATTORNEY (IF APPLICABLE)
Richard Deutsch acknowledges that the foregoing Subscription Agreement contains a power of
attorney from the specific Investor, and he accepts his appointment as the Investors true and lawful agent
and attorney-in-fact. Richard Deutsch understands his duties under the Subscription Agreement and
Vermont law regarding powers of attorney as defined in 14 V.S.A. Section 3503(e).

______________________________________________
Agent: Richard Deutsch

C-7

Witness Affirmation
The undersigned witness to the signature of [INVESTOR NAME] ____________________
affirms that he appeared to be of sound mind and free from duress at the time the power of attorney
contained in the foregoing instrument was signed, and that he affirmed that he was aware of the nature of
the foregoing document and the power of attorney contained therein and signed it freely and voluntarily.
Witness
Acknowledgement (By notary public or foreign equivalent thereof)
On this _____ day of ________, 2014, before me personally appeared [INVESTOR NAME]
_______________________ to me known to be the person who executed the foregoing instrument, and
he thereupon duly acknowledged to me that he executed the same to be his free act and deed.

Name:

C-8

Section 5
The Exhibits

58

Schedule of Exhibits
EXHIBIT 1

REGIONAL CENTER DESIGNATION

EXHIBIT 2

TEA: POPULATION STATISTICS AS EVIDENCE OF WEST DOVER AND

WILMINGTON, VT HAVING POPULATIONS WELL BELOW 20,000

EXHIBIT 3

U.S. SENATOR PATRICK LEAHY LETTER

STATE OF VERMONT GOVERNOR PETER SHUMLIN LETTER
STATE OF VERMONT SECRETARY OF COMMERCE LAWRENCE MILLER LETTER

EXHIBIT 4

LETTERS OF SUPPORT FROM LOCAL OFFICIALS

EXHIBIT 5

CERTIFICATES OF LIMITED PARTNERSHIP OF CARINTHIA GROUP 1, L.P. AND

CARINTHIA GROUP 2, L.P.

EXHIBIT 6

LETTERS FROM IRS CONFIRMING FEDERAL EMPLOYER IDENTIFICATION

NUMBER FOR THE PARTNERSHIPS

EXHIBIT 7

CERTIFICATE OF ORGANIZATION OF GENERAL PARTNER; MOUNT SNOW GP

SERVICES LLC

EXHIBIT 8

OPERATING AGREEMENT OF MOUNT SNOW GP SERVICES LLC

EXHIBIT 9

CERTIFICATE OF ORGANIZATION OF WEST LAKE WATER PROJECT LLC

EXHIBIT 10

CERTIFICATE OF ORGANIZATION OF CARINTHIA SKI LODGE LLC

EXHIBIT 11

FORM OF LOAN AGREEMENT BETWEEN WEST LAKE WATER PROJECT LLC AND
CARINTHIA GROUP 1 AND 2, L.P. (INCLUDING THE FORM OF NOTE ATTACHED
THERETO AS EXHIBIT A AND THE FORM OF GUARANTY OF COLLECTION BY
PEAK RESORTS, INC. ATTACHED THERETO AS EXHIBIT B)

EXHIBIT 12

FORM OF LOAN AGREEMENT BETWEEN CARINTHIA SKI LODGE LLC AND

CARINTHIA GROUP 1 AND 2, L.P. (INCLUDING THE FORM OF NOTE ATTACHED
THERETO AS EXHIBIT A AND THE FORM OF GUARANTY OF COLLECTION BY
PEAK RESORTS, INC. ATTACHED THERETO AS EXHIBIT B)

EXHIBIT 13

ECONOMIC AND JOB CREATION IMPACTS STUDY

EXHIBIT 14

MEMORANDUM OF UNDERSTANDING - VERMONT REGIONAL CENTER

EXHIBIT 15

FORM OF GROUND LEASE BETWEEN MOUNT SNOW LTD. AND CARINTHIA SKI
LODGE LLC

EXHIBIT 16

FORM OF GROUND LEASE BETWEEN MOUNT SNOW LTD. AND WEST LAKE
WATER PROJECT LLC

EXHIBIT 1

REGINIONAL CENTER DESIGNATION

EXHIBIT 2
TEA: POPULATION STATISTICS AS EVIDENCE OF WEST DOVER AND
WILMINGTON, VT HAVING POPULATIONS WELL BELOW 20,000

Town of

Wilmington
(802) 464-8591 (Voice)
(802) 464-8477 (FAX)
www.wilmingtonvermont.us

September 19, 2012

To Whom It May Concern:
The Town of Wilmingtons 2010 census count was 1,876 people. Currently, the town has
approximately 1,582 registered voters.
Since the 2010 census, I see the towns population decreasing slightly with an increase in the number
of out-of-state people buying property in town.
If you need additional information, please do not hesitate to contact me.
Sincerely,

Scott Murphy
Wilmington Town Manager

2 East Main Street

Post Office Box 217

Wilmington, Vermont 05363

EXHIBIT 3

U.S. SENATOR PATRICK LEAHY LETTER

STATE OF VERMONT GOVERNOR PETER SHUMLIN LETTER
STATE OF VERMONT SECRETARY OF COMMERCE LAWRENCE MILLER LETTER

PETERSHUMLIN
Governor

StatercrfVermont

OFFICEOFTHE GOVERNOR
25,2014
February

Dick Deutsch,Principal
Mount Snow Resort
39 Mount Snow Road
WestDover,VT 05356
Dear Dick:
It's exciting news that Mount Snow hascreatedits first EB-5 project in southern
Vermont. As a native Vermonter from the southernpart of the state,I'm especially
pleasedthat Mount Snow is working to bring new developmentto this areaof our state.
I understandthe West Lake Water:Projectwill provide Mount Snow with six times the
water it currently has available for snowrnakingwhile at the sametime respectingthe
surrounding.nuiron*ent. Togetherwith l;heCarinthiaSki Lodge which will provide a
new, three-storybuilding that includesa cafeteria,restaurant,retail shop,convenience
storeand skier servicas,I am thrilled at thejobs and positive economicimpactsyour
proposeddevelopmentwill createin SouthernVermont'
The Vermont EB-5 RegionalCenterhas a long history of successfulprojectsand we are
glad to welcomeyo,tt ptoposeddeveloprnentto the program. I look forward to the future
successof the Mount Sno* project und I, as well as our RegionalCenterteam,stand
readyto assistyou.

ncerely,

4f\yr"l*
r,^n,/

J(,\L-',,-

\P\ .^r.t;0/
c

PeterShumlin
Governor

6l i19\r'
t

\J

109STAfE STREET I THE PAVILION O MONTPELIER,VT 05609-0101T WWW.VERMONT.GOV

TELEPHONE:802.828.3333
r FAX: 802.828.3339r TDD: 802.828.3345

EXHIBIT 4
LETTERS OF SUPPORT FROM LOCAL OFFICIALS

BRATTLEBORO DEVELOPMENT CREDIT CORPORATION

"WHERE VERMONT

BEGINS"

76

corroN

MILL HILL

c-1 BRATTLEBoRo,

vr

05301-8694

(802) 2s7-7731
Fax: (802) 257-0294

Richard Deutsch, Principal

Peak Resorts
Mount Snow Resort
West Dover, VT 05356
Re: West Lake snowmaking water

project

Dear Dick:
The Board of Directors of the Brattleboro Development Credit Corporation, the
economic development agency for the Windham region, has discussed the Mount
Snow West Lake project and is in strong support. We recognize that this project is
critical for the success of Mount Snow, and that Mount Snow's success is critical for
the Deerfield Valley and Southern Vermont. The West Lake snowmaking project will
allow Mount Snow to grow and increase snowmaking to 100% of the mountain,
while allowing the resort to meet current regulatory standards in terms of water

withdrawal.
The proposal is innovative and thoughtful offering the prospect of outcomes that
satisfy key stakeholders including Mount Snow and its need to be competitive in the
industry, the environmental concerns, and the long-term stability, economic and
environmental, of this beautiful area.

M. Lewis

utive Director

EXHIBIT 5

CERTIFICATES OF LIMITED PARTNERSHIP OF CARINTHIA GROUP 1, L.P. AND

CARINTHIA GROUP 2, L.P.

EXHIBIT 6
LETTERS FROM IRS CONFIRMING FEDERAL EMPLOYER IDENTIFICATION
NUMBER FOR THE PARTNERSHIPS

DEPARTMENT OF THE TREASURY

aW01-"L'INTERNAL REVENUE SERVICE
45999-0023
CINCINNATI OH
Date of this notice:

03-13-2014

Employer Identification Number:

46-5081430
Form:

SS-4

Number of this notice:

CARINTHIA GROUP 2 LP
DOUGLAS HAUER
89 GRAND SUMMIT WAY
WEST DOVER, VT 05356

CP 575 B

For assistance you may call us at:

1-800-829-4933

IF YOU WRITE, ATTACH THE

STUB AT THE END OF THIS NOTICE.

WE ASSIGNED YOU AN EMPLOYER IDENTIFICATION NUMBER

Thank you for applying for an Employer Identification Number (EIN). We assigned you
EIN 46-5081430. This EIN will identify you, your business accounts, tax returns, and
documents, even if you have no employees. Please keep this notice in your permanent
records.
When filing tax documents, payments, and related correspondence, it is very important
that you use your EIN and complete name and address exactly as shown above. Any variation
may cause a delay in processing, result in incorrect information in your account, or even
cause you to be assigned more than one EIN. If the information is not correct as shown
above, please make the correction using the attached tear off stub and return it to us.
Based on the information received from you or your representative, you must file
the following form(s) by the date(s) shown.
Form 1065

04/15/2015

If you have questions about the form(s) or the due date(s) shown, you can call us at
the phone number or write to us at the address shown at the top of this notice. If you
need help in determining your annual accounting period (tax year), see Publication 538,
Accounting Periods and Methods.
We assigned you a tax classification based on information obtained from you or your
representative. It is not a legal determination of your tax classification, and is not
binding on the IRS. If you want a legal determination of your tax classification, you may
request a private letter ruling from the IRS under the guidelines in Revenue Procedure
2004-1, 2004-1 I.R.B. 1 (or superseding Revenue Procedure for the year at issue). Note:
Certain tax classification elections can be requested by filing Form 8832, Entity
Classification Election. See Form 8832 and its instructions for additional information.
A limited liability company (LLC) may file Form 8832, Entity Classification
Election, and elect to be classified as an association taxable as a corporation. If
the LLC is eligible to be treated as a corporation that meets certain tests and it
will be electing S corporation status, it must timely file Form 2553, Election by a
Small Business Corporation. The LLC will be treated as a corporation as of the
effective date of the S corporation election and does not need to file Form 8832.
To obtain tax forms and publications, including those referenced in this notice,
visit our Web site at www.irs.gov. If you do not have access to the Internet, call
1-800-829-3676 (TTY/TDD 1-800-829-4059) or visit your local IRS office.

EXHIBIT 7
CERTIFICATE OF ORGANIZATION OF GENERAL PARTNER; MOUNT SNOW GP
SERVICES LLC

EXHIBIT 8
OPERATING AGREEMENT OF MOUNT SNOW GP SERVICES LLC

OPERATING AGREEMENT
This Operating Agreement (the "Agreement") made and entered into this 2nd day of October,
2012 (the "Execution Date"),
BY

Mount Snow Ltd. of PO Box 2805, West Dover, VT 05356

(the "Member").

BACKGROUND
A. The Member wishes to be the sole member of a limited liability company.
B. The terms and conditions of this Agreement will govern the member within the limited
liability company.
IN CONSIDERATION OF and as a condition of the Member entering into this Agreement and
other valuable consideration, the receipt and sufficiency of which is acknowledged, the Member
declares as follows:
1. Formation: By this Agreement the Member forms a Limited Liability Company (the
"Company") in accordance with the laws of the State of Vermont. The rights and
obligations of the Member will be as stated in Chapter 21 of the Vermont Statutes (the
"Act") except as otherwise provided here.
2. Name: The name of the Company will be Mount Snow GP Services, LLC.
3. Purpose: Real Estate Development.
4. Term: The Company will continue until terminated as provided in this Agreement or
may dissolve under conditions provided in the Act.
5. Place of Business: The Principal Office of the Company will be located at 89 Grand
Summit Way, PO Box 2805, West Dover, VT 05356 or such other place as the Members
may from time to time designate.
6. Capital Contributions: The following is a list of the Members Initial Capital
Contributions to the Company according to the following terms:

Member

Mount Snow Ltd.

MountSnowGPServicesOperatingAgmt.

Contribution Description
Office space, clerical and legal
and administrative assistance.

Page1of7

Value of
Contribution
$10,000.00

Delivery
Date
October 2,
2012

Distribution of Profits/Losses
8. Subject to the other provisions of this Agreement, the Net Profits or Losses of the
Company, for both accounting and tax purposes, will accrue to and be borne by the
Company. Distributions are to be made at the will of the Manager.
9. Tax Allocations will be borne entirely by the company.
10. No Member will have priority over any other Member, if any, for the distribution of Net
Profits or Losses.
11. Voting: The Member will have a single equal vote on any matter.
12. Nature of Interest: The Member's interest in the Company will be considered personal
property, and will at no time be considered real property.
13. Withdrawal of Contribution: The Member will not withdraw any portion of its Capital
Contribution until the termination of the company.
14. Liability for Contribution: The Member has no obligation to make a Capital
Contribution.
15. Additional Contributions: Capital Contributions may be required from time to time,
according to the requirements of the Company provided that the Members interests are
not affected.
16. Capital Accounts: An individual capital account will be maintained for the Member.
Any Additional Contributions made by the Member will be credited to that Member's
individual Capital Account.
17. Interest on Capital: No borrowing charge or loan interest will be due or payable to the
Member in the event of a Capital Contribution inclusive of any agreed Additional
Contributions.
18. Compensation of Members for Services Rendered: The Member will not be
compensated by the Company for services rendered to or on behalf of the Company.
19. Management: Management of this Company is vested in the Member.
20. Authority to Bind Company: Only Richard Deutsch has the authority to bind the
Company in contract.
21. Duty to Devote Time: The Member will devote such time and attention to the business
of the Company reasonably determine for the conduct of the Company business.
24. Member Meetings: Member meetings will be held at the following address, or any other
location that the Members may from time to time designate: 89 Mount Snow Rd., West

MountSnowGPServicesOperatingAgmt.

Page2of7

Dover, VT 05356. Any impending Member meeting will require 1 day notice be given to
all Members.
25. Admission of New Members: A new Member may only be admitted to the Company
by a vote of the existing Member. The new Member agrees to be bound by all the
covenants, terms, and conditions of this Agreement, inclusive of all current and future
amendments. Further, a new Member will execute such documents as are needed to
effect the admission of the new Member. Any new Member will receive such business
interest in the Company as determined by a unanimous decision of the other Members.
26. Dissociation of a Member:
Voluntary Withdrawal: Any Member (the "Dissociated Member") will have the right to
voluntarily withdraw from the Company at the end of any fiscal year. The withdrawal of
such Member will result in the dissolution of the Company. It remains incumbent on the
withdrawing Member to exercise this right in good faith and to minimize any present or
future harm done to the Company as a result of the withdrawal.
Involuntary Withdrawal: Events leading to the involuntary withdrawal of the Member
(the "Dissociated Member") from the Company will include but not be limited to: breach
of fiduciary duties by the Member; Operation of Law against the Member or a legal
judgment against the Member that can reasonably be expected to materially affect the
business operation of the Company. Expulsion of a Member can also occur on application
by the Company or another Member, if any, where it has been judicially determined that
the Member: has engaged in wrongful conduct that adversely and materially affected the
Company's business; has willfully or persistently committed a material breach of the
Operating Agreement or of a duty owed to the Company or to the other Members; or has
engaged in conduct relating to the Company's business that makes it not reasonably
practicable to carry on the business with the Member. The withdrawal of such Member
will result in the dissolution of the Company.
27. Valuation of Interest: In the absence of a written agreement setting a value, the value of
the Company will be based on the fair market value appraisal of all Company assets (less
liabilities) determined in accordance with generally accepted accounting procedures. This
appraisal will be conducted by an independent accounting firm. An appraiser will be
appointed within a reasonable period of the date of withdrawal or dissolution. The results
of the appraisal will be binding on the Member. A Member's interest will be in proportion
to their profit and loss share in the Company, less any outstanding liabilities the Member
may have to the Company. No allowance will be made for goodwill, trade name, patents
or other intangible assets, except where those assets have been reflected on the Company
books immediately prior to valuation.
28. Dissolution: The Company may be dissolved by a vote of the Member. The Company
will also be dissolved on the occurrence of events specified in the Act. Upon Dissolution
of the Company and liquidation of Company property, and after payment of all selling
costs and expenses, the liquidator will distribute the Company assets to the following
groups according to the following order of priority:
MountSnowGPServicesOperatingAgmt.

Page3of7

a. in satisfaction of liabilities to creditors except Company obligations to the

Member;
b. in satisfaction of Company obligations to the Member to pay debts.
29. The claims of each priority group will be satisfied in full before satisfying any claims of a
lower priority group. Any excess of Company assets after liabilities or any insufficiency
in Company assets in resolving liabilities under this section will be resolved by the
Member.
30. Records: The Company will at all times maintain accurate records of the following:
a. Information regarding the status of the business and the financial condition of the
Company.
b. A copy of the Company federal, state, and local income taxes for each year
(promptly after becoming available).
c. Name and last known business, residential, or mailing address of the Member.
d. A copy of this Agreement and any articles or certificate of formation, as well as
all amendments, together with any executed copies of any written powers of
attorney pursuant to which this Agreement, articles or certificate, and any
amendments have been executed.
e. reserved
31. The Member has the right to demand, within a reasonable period of time, a copy of any
of the above documents for any purpose reasonably related to their interest as the
Member of the Company, at its expense.
32. Books of Account: Accurate and complete books of account of the transactions of the
Company will be kept and at all reasonable times be available and open to inspection and
examination by the Member. The Books of Account will be kept on the cash basis
method of accounting.
33. Banking and Company Funds: The funds of the Company will be placed in such
investments and banking accounts as will be designated by the Member.
34. Audit: The Member will have the right to request an audit of the Company books. The
cost of the audit will be borne by the Company. The audit will be performed by an
accounting firm acceptable to the Member. Not more than one (1) audit will be required
by the Member for any fiscal year.
35. Fiscal Year End: The fiscal year end of the Company is the 1st day of April.

MountSnowGPServicesOperatingAgmt.

Page4of7

36. Tax Treatment: This Company is intended to be treated as a disregarded entity, for the
purposes of Federal and State Income Tax.
37. Annual Report: As soon as practicable after the close of each fiscal year, the Company
will furnish to the Member an annual report showing a full and complete account of the
condition of the Company This report will consist of at least:
a. A copy of the Company's federal income tax returns for that fiscal year.
38. Goodwill: The goodwill of the Company will be assessed at an amount to be determined
by appraisal using generally accepted accounting procedures.
39. Governing Law: The Member shall submit to the jurisdiction of the courts of the State
of Vermont for the enforcement of this Agreement or any arbitration award or decision
arising from this Agreement.
40. Mediation and Arbitration: In the event a dispute arises out of or in connection with
this Agreement, the Company will attempt to resolve the dispute through friendly
consultation. If the dispute is not resolved within a reasonable period then any or all
outstanding issues may be submitted to mediation in accordance with any statutory rules
of mediation. If mediation is not successful in resolving the entire dispute or is
unavailable, any outstanding issues will be submitted to final and binding arbitration in
accordance with the laws of the State of Vermont. The arbitrator's award will be final,
and judgment may be entered upon it by any court having jurisdiction within the State of
Vermont.
41. Force Majeure: The Member will be free of liability to the Company where the
Member is prevented from executing their obligations under this Agreement in whole or
in part due to force majeure, such as earthquake, typhoon, flood, fire, and war or any
other unforeseen and uncontrollable event.
Forbidden Acts:
42. The Member may not do any act in contravention of this Agreement.
43. The Member may not permit, intentionally or unintentionally, the assignment of express,
implied or apparent authority to a third party that is not a Member of the Company.
44. The Member may not do any act that would make it impossible to carry on the ordinary
business of the Company.
45. The Member will not have the right or authority to bind or obligate the Company to any
extent with regard to any matter outside the intended purpose of the Company.
46. The Member may not confess a judgment against the Company.
47. Indemnification: The Member will be indemnified and held harmless by the Company
from and against any and all claims of any nature, whatsoever, arising out of the
Member's participation in Company affairs. The Member will not be entitled to
MountSnowGPServicesOperatingAgmt.

Page5of7

indemnification under this section for liability arising out of gross negligence or willful
misconduct of the Member or the breach by the Member of any provisions of this
Agreement.
48. Liability: The Member or any of its employees will not be liable to the Company or to
any other Member for any mistake or error in judgment or for any act or omission
believed in good faith to be within the scope of authority conferred or implied by this
Agreement or the Company. The Member or employee will be liable only for any and all
acts and omissions involving intentional wrongdoing.
49. Liability Insurance: The Company may acquire insurance on behalf of the Member,
employees, agent or other person engaged in the business interest of the Company against
any liability asserted against them or incurred by them while acting in good faith on
behalf of the Company.
50. Amendment of Operating Agreement: Amendments can only be made at the approval
of the Manager. Amendment of this section or the Voting section will require the consent
of the Member.
51. Title to Company Property: Title to all Company property will remain in the name of
the Company.
Miscellaneous
52. Time is of the essence in this Agreement.
53. This Agreement may be executed in counterparts.
54. Headings are inserted for the convenience of the parties only and are not to be considered
when interpreting this Agreement. Words in the singular mean and include the plural and
vice versa. Words in the masculine gender include the feminine gender and vice versa.
Words in a neutral gender include the masculine gender and the feminine gender and vice
versa.
55. If any term, covenant, condition or provision of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that
such provision be reduced in scope by the court only to the extent deemed necessary by
that court to render the provision reasonable and enforceable and the remainder of the
provisions of this Agreement will in no way be affected, impaired or invalidated as a
result.
56. This Agreement contains the entire agreement between the parties. All negotiations and
understandings have been included in this Agreement. Statements or representations that
may have been made by any party to this Agreement in the negotiation stages of this
Agreement may in some way be inconsistent with this final written Agreement. All such
statements have no force or effect in respect to this Agreement. Only the written terms of
this Agreement will bind the parties.

MountSnowGPServicesOperatingAgmt.

Page6of7

57. This Agreement and the terms and conditions containedin this Agreement apply to and
arebinding upon the Member'ssuccessors,
assigns,executors,administrators,
beneficiaries,and representatives.
58. Any notices or delivery required here will be deemedcompleted when hand-delivered,
delivered by agent,or seven(7) days after being placed in the post, postageprepaid, to
the parties at the addressescontainedin this Agreement or as the parties may later
designatein writing.
59. A11of the rights, remediesand benefits provided by this Agreernentwill be cumulative
and will not be exclusive of any other such rights, remediesand benefits allowed by law.
Definitions
60. For the purposeof this Agreement,the following terms are defined as follows:
a. "Additional Contribution" meansCapital Contributions, other than Initial
Contributions, made the Mernber to the Company.
b. "Capital Contribution" meansthe total amount of cash,property, or services
contributed to the Company by any one Member.
c. "Initial Contribution" meansCapital Contributions made by the Member to
acquire an interest in the Company.
d. "Net Profits or Losses"meansthe net profits or lossesof the Companyas
determinedby generally acceptedaccountingprinciples.
e. "Operationof Law" meansriLghtsor dutiesthat are castupon aparty by the law,
without any act or agreementon the part of the individual including, but not
limited to, an assignmentfor the benefit of creditors, a divorce, or a bankruptcy.
f.

"Principal Office" meansthe office whether inside or outside the Stateof

Vermont where the executive or managementof the Company maintain their
primary office.

IN WITNESS WHEREOF the parties have duly affixed their signaturesunder hand and seal on
this 2nd dav of October. 2012.
a
r/ ' t t .
Witness: ( (,btzth'td b/].r-"zc\Sign1
--T4U4R"4
Grt S+
(Print)

M o u n t S n o wG PS e r v i c e O
s p e r a t i n gA g m t .

MountSnowLtd. (Member)

P a g e To f 7

EXHIBIT 9
CERTIFICATE OF ORGANIZATION OF WEST LAKE WATER PROJECT LLC

EXHIBIT 10
CERTIFICATE OF ORGANIZATION OF CARINTHIA SKI LODGE LLC

EXHIBIT 11
FORM OF LOAN AGREEMENT BETWEEN WEST LAKE WATER PROJECT LLC AND
CARINTHIA GROUP 1 AND 2, L.P. (INCLUDING THE FORM OF NOTE ATTACHED
THERETO AS EXHIBIT A AND THE FORM OF GUARANTY OF COLLECTION BY
PEAK RESORTS, INC. ATTACHED THERETO AS EXHIBIT B)

LOAN AGREEMENT
THIS LOAN AGREEMENT (the Agreement), dated as of [__________], 2014,
is made by and among Carinthia Group 1, L.P., a limited partnership organized under the
laws of the State of Vermont (the Carinthia 1) and Carinthia Group 2, L.P., a limited
partnership organized under the laws of the State of Vermont (Carinthia 2) (Carinthia 1
and Carinthia 2, each collectively referred to as a Lender and collectively as Lender)
and West Lake Water Project LLC, a limited liability company organized under the laws
of the State of Vermont (the Borrower).
RECITALS:
WHEREAS, the Borrower was organized to undertake the development and
construction of a new water storage reservoir and dams for snowmaking with capacity of
up to 120 million gallons, three new pump houses and the installation of approximately
28 thousand feet of new snowmaking pipelines, a new ski lift and ancillary infrastructure
on trails, lifts and snow making equipment at the Mount Snow Ski Resort in West Dover,
Vermont (the Project);
WHEREAS, under the terms of the offering (the Offering) described in the
Carinthia Group Private Placement Memorandum (the Private Placement
Memorandum), the Lender is seeking to raise capital from, among other investors,
persons who are not citizens or lawful permanent residents of the United States and who
desire to become limited partners of the Lender, and the investments may enable such
investors to become eligible for admission to the United States of America as lawful
permanent residents with their spouses and unmarried, minor children pursuant to 8
U.S.C.1153 (b)(5)(A)-(D); INA 203 (b)(5)(A)-(D) of the Immigration and Nationality
Act (the EB-5 Program); and
WHEREAS, to comply with the EB-5 Program the Lender must invest or loan the
funds raised through the Offering from such investors in or to a business carrying on a
commercial venture; and
WHEREAS, in furtherance of the Offering and in compliance with the
requirements of the EB-5 Program, each Lender has agreed, subject to the terms and
conditions of this Agreement, to extend to the Borrower a line of credit in the minimum
amount of $500,000 and a maximum principal amount of $30,000,000 based upon the
number of limited partnership interests in each Lender sold pursuant to the Offering for
the development and construction by Borrower of the Project, subject to the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
1.

Line of Credit.

1.1
Line of Credit Established. Subject to the terms and conditions hereof,
and in reliance on the representations and warranties and covenants contained herein,
Lender hereby agrees to extend one or more advances (each, an Advance and
collectively, Advances), up to an aggregate principal amount of $30,000,000 (the sum
of such Advances, the Loan), such Loan to be made by each Lender in accordance with
each Lenders proportionate interest set forth on Schedule 1 attached hereto; provided
that the Borrower shall draw, and the Lender shall make, Advances equal to the entire
principal amount of the Loan to the Borrower (or such lesser proceeds as shall have been
received by the Lender from investors pursuant to the Offering) in material compliance
with all requirements of the EB-5 Program and the Business Plan included in the Private
Placement Memorandum including, without limitation, any applicable deadline for
disbursement of the Loan, provided that any such non-compliance that would jeopardize
any of the Lenders limited partners capacity to be admitted to the United States of
America as unconditional lawful permanent residents with their spouses and unmarried,
minor children pursuant to 8 U.S.C. 1153 (b)(5)(A) (D), INA 203 (b)(5)(A) (D);
the Departments of Commerce, Justice and State, the Judiciary, and Related Agencies
Appropriations Act of 1993, Pub. L. No. 102-395, section 610, as amended; or 8 U.S.C.
1186b, INA 216A, as any of the foregoing may be amended, shall be deemed material.
1.2
Note. Concurrently with the execution of this Agreement, the Borrower
hereby executes and delivers a promissory note payable to the Lender in the original
principal amount of $30,000,000 (as amended, supplemented, restated, replaced or
otherwise modified from time to time, the Note). The Note shall evidence the absolute
and unconditional obligation of the Borrower to repay the Lender for all Advances made
by the Lender, with interest as provided in this Agreement and the Note. Each Advance
from time to time shall be deemed evidenced by the Note, which is deemed incorporated
in this Agreement by reference and made part hereof. The Note shall be in the form set
forth on Exhibit A.
1.3
Maturity and Interest Rate. The Borrower shall repay the Loan in full,
together with any interest accrued but unpaid thereon, on the maturity date set forth in the
Note. Advances shall bear interest on the unpaid principal balance of the Loan
outstanding at any time from the Funding Date of each such Advance to the maturity date
(or repayment) at the rate set forth in the Note. Funding Date means, with respect to
any Advance, the date on which such Advance is made to the Borrower.
1.4

Draw Requests.

(a)
At any time and from time to time, subject to the requirements of
the EB-5 Program and the Business Plan included in the Private Placement Memorandum
including, without limitation, any applicable deadline for disbursement of the Loan, the
Borrower may request one or more Advances by submitting to the Lender a completed
and executed draw request (Draw Request) no later than five business days prior to the
Funding Date of such Advance. Each such Advance shall be in the aggregate amount of
not less than $25,000 (or, if less, the remaining amount available under the Loan).
Subject to the provisions of this Agreement, the Lender shall make the Advance on the
proposed Funding Date in accordance with the Borrower's Draw Request. Each Draw

Request shall clearly identify the use of the proceeds and their investment directly into
the Project in accordance with the Project's plans, specifications and budget and shall be
accompanied by appropriate supporting documentation.
2.
Representations and Warranties. The Borrower represents and warrants to
the Lender on the date hereof and on each Funding Date as follows.
2.1

Organization, Good Standing and Qualification.

(a)
The Borrower is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Vermont. The
Borrower has all requisite power and authority to own and operate its properties and
assets, to execute and deliver this Agreement and to develop and construct the Project.
(b)
The Borrower is not in violation or default of any term of its
organizational documents. The execution, delivery, and performance of this Agreement
and the Note will not, with or without the passage of time or giving of notice, result in
any such violation, or be in conflict with or constitute a default under its organizational
documents.
2.2
Authorization; Binding Obligations. All action on the part of the
Borrower, its officers, managers and members necessary for the authorization of this
Agreement and the Note and the performance of all obligations of the Borrower
hereunder and thereunder has been taken. This Agreement and the Note have been duly
executed and delivered by the Borrower and constitute valid and binding obligations of
the Borrower enforceable in accordance with their respective terms, except (a) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights and (b) as limited by general
principles of equity (regardless of whether considered and applied in a proceeding in
equity or at law) that restrict the availability of equitable remedies.
2.3
Liabilities. The Borrower does not have and is not subject to any liability
or obligation of any nature, whether accrued, absolute, contingent, or otherwise, asserted
or unasserted, known or unknown (including, without limitation, liabilities as guarantor
or otherwise with respect to obligations of others, or liabilities for taxes due or then
accrued or to become due), except liabilities incurred in the ordinary course of business
of the Borrower in connection with the development and construction of the Project.
2.4
Agreements. All agreements, understandings, arrangements or other
commitments to which the Borrower is a party (collectively, Contracts) are in all
material respects valid and enforceable in accordance with their terms. The Borrower is
not in default in the performance, observance or fulfillment of any obligation, covenant
or condition contained therein, and, to the Borrower's knowledge, no event has occurred
which with or without the giving of notice or lapse of time, or both, would constitute a
default thereunder by the Borrower, except in either case where such default would not
and would not reasonably be expected to have, individually or collectively, a material
adverse effect on the Borrower. The execution, delivery, and performance by the

Borrower of this Agreement and the Note will not, with or without the passage of time or
giving of notice, result in any such violation, or be in conflict with or constitute a default
under any Contract, except in either case where such default would not and would not
reasonably be expected to have, individually or collectively, a material adverse effect on
the Borrower.
2.5
Obligations to Related Parties. The Borrower has no obligations to
executive officers, managers, members, employees or affiliates of the Borrower, except
obligations to Mount Snow Ltd. or any of its affiliates solely to the extent such
obligations have arisen or arise in connection with the development and construction of
the Project.
2.6

Real and Personal Property.

(a)
Real Property. The Borrower does not own any real property.
With respect to real property leased by the Borrower (the Leased Real Property), each
of the leases for the Leased Real Property is in full force and effect, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights. Neither the Borrower nor, to the
Borrower's knowledge, any other party thereto is in material default under any of said
leases, nor is the Borrower aware of any event that has occurred which, with the giving of
notice or the passage of time, or both, would give rise to a material default thereunder.
(b)
Personal Property. The Borrower has good and marketable title to
all of its personal property and assets, and all such personal property and assets are in
good working condition, reasonable wear and tear excepted. None of such personal
property or assets is subject to any Lien other than Permitted Liens. Lien means any
security interest, mortgage, pledge, lien, claim, charge, title retention or other
encumbrance. Permitted Liens means (a) statutory Liens for taxes, which are not yet
due and payable, (b) statutory or common law Liens of landlords securing obligations to
pay lease payments that are not yet due and payable or in default, (c) statutory or
common law Liens in favor of carriers, warehousemen, mechanics and materialmen to
secure claims for labor, materials or supplies and other like liens incurred in the ordinary
course of business that are not yet due and payable, (d) pledges or deposits made in the
ordinary course of business to secure payment of workmen's compensation, or to
participate in any fund in connection with workmen's compensation, unemployment
insurance, old-age pensions or other social security programs, (e) encumbrances
consisting of zoning restrictions, easements or other restrictions on the use of real
property, none of which materially impairs the use of such property or the value thereof,
and none of which is violated in any material respect by existing or proposed structures
or land use, (f) Liens in favor of Mount Snow Ltd. or any of its affiliates solely to the
extent such Lien is attached to personal property or other assets that have been
contributed to the Project by Mount Snow Ltd. or any of such affiliates, and (g) Liens
securing indebtedness advanced by a third party to the Borrower to the extent that such
indebtedness has been or will be used by the Borrower to complete the Project pursuant
to the Business Plan and remains outstanding.

2.7
Litigation. There is no litigation, arbitration, mediation or proceeding or
investigation pending or, to the knowledge of the Borrower, threatened against the
Borrower or affecting any of its properties or assets or which may call into question the
validity or hinder the enforceability of this Agreement or the Note or the transactions
contemplated hereby and thereby.
2.8

Compliance with Laws; Authorizations.

(a)
The Borrower has complied in all material respects with each, and
is not in violation of any, law, statute, regulation, rule, ordinance or order (Laws) to
which the Borrower or its business, operations, employees, assets or properties is or has
been subject.
(b)
Except as set forth in the schedule attached to this Agreement as
Schedule 2.8, all material licenses, permits and other authorizations (Authorizations)
required by the Borrower for the development and construction of the Project (other than
predevelopment and preconstruction expenditures) are valid and in full force and effect
and none of such authorizations will be terminated or impaired or become terminable as a
result of the transactions contemplated by this Agreement and the Note.
2.9
Insurance. The Borrower has fire, casualty, product liability, and business
interruption and other insurance policies, with extended coverage, sufficient in amount to
allow it to replace any of its material properties which might be damaged or destroyed or
sufficient to cover liabilities to which the Borrower may reasonably become subject, and
such types and amounts of other insurance with respect to its business and properties, on
both a per occurrence and an aggregate basis, as are customarily carried by persons
engaged in the same or similar businesses as Borrower. There is no material default by
the Borrower, or to the knowledge of the Borrower, by any insurance carrier of such
policies, or event which could give rise to a material default under any such policy.
3.

Conditions
3.1

Conditions Precedent to Each Advance.

(a)
The Borrower shall have executed and delivered the Note to the
Lender (initial Advance only).
(b)

The Lender shall have timely received a Draw Request.

(c)
The Borrower shall have delivered to the Lender a certificate,
dated as of the date of the Advance, signed by the President of the Borrower certifying (i)
compliance in all material respects with all covenants and agreements herein then
required to be or to have been complied with by it and (ii) the absence of any Event of
Default or any event which, with the passage of time, or the giving of notice, or both,
would constitute an Event of Default under this Agreement, in each case both prior to and
immediately upon the making of such Advance.

(d)
No injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the extending of such credit shall have been issued and
remain in force by any governmental authority against the Borrower or the Lender.
(e)
Peak Resorts, Inc. shall have executed and delivered the Guaranty
in the form attached hereto as Exhibit B (the Guaranty) to the Lender (initial Advance
only).
4.

Covenants of Borrower.

4.1
Affirmative Covenants. From the Effective Date until the date on which
all Advances hereunder and under the Note are paid in full, together with any interest
accrued but unpaid thereon, the Borrower will, unless the Lender shall otherwise consent
in writing:
(a)
Use of Proceeds. Use the proceeds of the Advances solely to
develop and construct the Project in the State of Vermont and in material compliance
with the requirements of the EB-5 Program and the Business Plan that is included in the
Private Placement Memorandum, provided that any such non-compliance that would
jeopardize any of the Lenders limited partners capacity to be admitted to the United
States of America as unconditional lawful permanent residents with their spouses and
unmarried, minor children pursuant to 8 U.S.C. 1153 (b)(5)(A) (D), INA 203
(b)(5)(A) (D); the Departments of Commerce, Justice and State, the Judiciary, and
Related Agencies Appropriations Act of 1993, Pub. L. No. 102-395, section 610, as
amended; or 8 U.S.C. 1186b, INA 216A, as any of the foregoing may be amended,
shall be deemed material. Upon written request of the Lender the Borrower shall furnish
such written evidence that the proceeds have been used for such purposes and
periodically furnish such written evidence that establishes the requisite employment
created in the Project pursuant to the EB-5 Program and as disclosed in the Private
Placement Memorandum.
(b)
Compliance with Laws. Comply in all material respects with all
applicable Laws and maintain in effect all Authorizations that are required or otherwise
necessary for the Borrower to develop the Project.
(c)
Preservation of Existence. Preserve and maintain its existence,
rights, franchises and privileges in the jurisdiction of its organization, and qualify and
remain qualified in good standing as a foreign corporation in each jurisdiction where the
nature of its business requires it to be so qualified or where the ownership of its
properties or the nature of its activities makes such qualification necessary, except where
the failure to be so qualified would not materially adversely affect the enforceability of
this Agreement and the Note, the business, properties, operations, profits or condition
(financial or otherwise) of the Borrower or the ability of the Borrower to perform its
obligations hereunder.
(d)
Keeping of Records and Books of Account. Maintain and
implement administrative and operating procedures and keep and maintain all documents,

books, records and other information reasonably necessary or advisable for the
development, construction and administration of the Project in compliance with all
applicable Laws and Authorizations.
(e)
Maintenance of Properties. Maintain its properties and assets,
whether owned or leased, in good condition and repair (normal wear and tear excepted),
and pay and discharge or cause to be paid and discharged, when due, the cost of repairs to
or maintenance of the same.
(f)
Insurance. Maintain insurance with respect to its properties and
assets and business against such casualties and contingencies as shall be in accordance
with general practices of businesses engaged in similar activities. Such insurance shall be
in such amounts, contain such terms, be in such forms and be for such periods as may be
reasonably satisfactory to the Lender (but in no event less than the amount of the Loan
then outstanding together with interest accrued but unpaid thereon). In addition, all such
insurance shall name the Lender as loss payee and/or additional insured, as applicable,
for the benefit of the Lender.
(g)
Taxes. File or cause to be filed all federal, state and local tax
returns which are required to be filed by it. The Borrower shall pay or cause to be paid all
taxes shown to be due and payable on such returns or on any assessments received by it.
At its option, the Lender may discharge taxes, liens or security interests or other
encumbrances at any time levied or placed on the Project, may pay for insurance on the
Project and may pay for the maintenance and preservation of the Project. The Borrower
agrees to reimburse the Lender on demand for any reasonable payments made, or any
reasonable expenses incurred by the Lender pursuant to the foregoing authorization.
(h)
Performance of Obligations. Perform, pay and discharge, as and
when due, all of the Borrower's obligations (both monetary and non-monetary) under this
Agreement.
(i)
Inspection Rights. Permit Vermont Regional Center as agent of the
limited partners of the Lender (the Agent) to inspect the Project upon reasonable
request and provide copies of such financial records pertaining thereto as such Agent may
reasonably request.
(j)
Assurances. The Borrower will, at its expense, upon reasonable
request of the Lender promptly and duly execute and deliver such documents and
assurances and take such actions as may be necessary or desirable or as the Lender may
reasonably request in order to correct any defect, error or omission which may at any
time be discovered or to more effectively carry out the intent and purpose of this
Agreement.
4.2
Negative Covenants. From the date of this Agreement until the date on
which all Advances hereunder and under the Notes are paid in full, together with any
interest accrued but unpaid thereon, the Borrower will not, without the written consent of
the Lender:

(a)
Liens and Encumbrances. Create, assume or permit to exist any
Lien upon any of the properties or assets financed or purchased with the proceeds of the
Loan other than security interests with respect to money borrowed from the Lender and
Permitted Liens.
(b)
Transfer of Assets or Properties. Sell, enter into an agreement of
sale for, convey, lease, assign, transfer, pledge, grant a security interest, mortgage or
other Lien other than Permitted Liens in, or otherwise dispose of the any of the properties
or assets financed or purchased with the proceeds of the Loan.
(c)
Stock, Merger, Consolidation, Etc. Sell any equity interests to any
person other than Peak Resorts, Inc. or any of its wholly-owned subsidiaries or merge or
consolidate with any person.
(d)
Guarantees. Guarantee, endorse or otherwise be or become
contingently liable in connection with the obligations of any other person, except
endorsements of negotiable instruments for collection in the ordinary course of business.
(e)
Limitation on Transactions with Affiliates. Other than transactions
on terms no less favorable to the Borrower than those that could reasonably be obtained
at arms' length in the ordinary course of business, enter into, or be a party to, any
transaction with any affiliate.
(f)
Limitation on Investments. Make or suffer to exist any loans or
advances to, or extend any credit to, or make any investments (by way of transfer of
property, contributions to capital, purchase of stock or securities or evidences of
indebtedness, acquisition of the business or assets, or otherwise) in, any affiliate or any
other person.
(g)
Negative Pledge. Grant any Lien in, or otherwise encumber, any of
its properties or other assets other than Permitted Liens.
5.

Default

5.1
Events of Default. The occurrence of any one or more of the following
events, conditions or state of affairs shall constitute an Event of Default hereunder and
under the Note:
(a)
The Borrower shall fail to pay as and when due any principal or
interest hereunder or under the Note.
(b)
The Borrower shall fail to observe or perform any obligation or
any covenant to be observed or performed by it hereunder or under the Note (other than
the obligation to pay principal and/or interest under the Note) and such failure shall
continue uncured for a period of 60 business days after the Borrower becomes aware of
the occurrence thereof (such cure period to be applicable only in the event such default
can be remedied by corrective action of the Borrower as determined by the Lender).

(c)
Any representation or warranty made by Borrower in this
Agreement, shall prove to have been false or misleading in any material respect at the
time when made.
(d)
Any judgment, writ or warrant of attachment or similar process
involving an amount in excess of U.S. $100,000 shall be entered or filed against the
Borrower or any of its assets or properties and shall remain undischarged for a period of
30 days.
(e)
If the Borrower makes an assignment for the benefit of creditors
generally, offers a composition or extension to creditors, or makes or sends notice of an
intended bulk sale of any business or assets now or hereafter owned or conducted by
Borrower, except as otherwise expressly permitted in this Agreement.
(f)
Upon the commencement of any action for the dissolution or
liquidation of the Borrower, or the commencement of any case or proceeding for
reorganization or liquidation of the Borrower's debts under the Bankruptcy Code or any
other state or federal law, now or hereafter enacted for the relief of debtors, whether
instituted by or against the Borrower; provided, however, that the Borrower shall have 60
days to obtain the dismissal or discharge of any involuntary proceeding filed against it
and the Lender may seek adequate protection in any bankruptcy proceeding.
(g)
Upon the appointment of a receiver, liquidator, custodian, trustee
or similar official or fiduciary for the Borrower or for a material portion of any property
of the Borrower.
(h)
This Agreement or the Note shall cease for any reason to be in full
force and effect or shall be declared to be null and void or unenforceable in whole or in
part.
(i)
Other than Liens in favor of the Lender or Liens otherwise
consented to in writing by the Lender, imposition of any Lien or series of Liens against
the Borrower or any of the properties or other assets financed or purchased with the
proceeds of the Loan except Permitted Liens.
(j)

The Borrower shall cease to develop and construct the Project prior

(k)

The Guaranty shall cease to be in effect.

to completion.

5.2

Remedies on Default. Upon the occurrence of an Event of Default:

(a)
Subject to Section 5.2(d), in addition to the rights specifically
granted hereunder or now or hereafter existing in equity, at law, by virtue of statute or
otherwise (each of which rights may be exercised at any time and from time to time), the
Lender may forthwith declare all obligations, including all principal and interest, to be
immediately due and payable, without protest, demand or other notice (which are hereby
expressly waived by Borrower). Upon the occurrence of an Event of Default specified in
9

Section 5.1(e), (f) or (g) above, but subject to Section 5.2(d), all Advances, including all
interest accrued but unpaid thereon, shall be immediately due and payable without any
declaration by the Lender.
(b)
The Borrower will pay the Lender's fees incurred in any action
seeking enforcement of the Lender's rights hereunder.
(c)
No failure on the part of the Lender to exercise, and no delay in
exercising, any right, power or remedy shall operate as a waiver thereof, nor shall any
single or partial exercise by the Lenders of any right, power or remedy preclude any other
further exercise thereof or the exercise of any other right, power or remedy. The rights
and remedies provided herein shall be in addition to and not exclusive of any rights or
remedies provided at law or in equity. The remedies provided herein or in the Note or
otherwise available to the Lender at law or in equity shall be cumulative and concurrent,
and may be pursued singly, successively or together at the sole discretion of the Lender,
and may be exercised as often as occasion therefor shall occur.
(d)
No rights and remedies may be exercised upon an Event of Default
if such rights or remedies would jeopardize any of the Lenders limited partners capacity
to be admitted to the United States of America as unconditional lawful permanent
residents with their spouses and unmarried, minor children pursuant to 8 U.S.C. 1153
(b)(5)(A) - (D), INA 203 (b)(5)(A) - (D); the Departments of Commerce, Justice and
State, the Judiciary, and Related Agencies Appropriations Act of 1993, Pub. L. No. 102395, section 610, as amended; or 8 U.S.C. 1186b, INA 216A, as any of the foregoing
may be amended.
6.

Miscellaneous.

6.1
Amendment and Waiver. No amendment to or waiver of any provision of
this Agreement nor consent to any departure by the Borrower, shall in any event be
effective unless (a) the same shall be in writing and signed by the Lender and Borrower
(with respect to an amendment) or the Lender (with respect to a waiver or consent by it)
or the Borrower (with respect to a waiver or consent by it), as the case may be, and such
waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given. Any amendment or waiver by the Lender of any provision of
this Agreement or the Note shall require the consent of limited partners in the Lender that
own not less than a majority of the limited partnership interests then outstanding.
6.2
Entire Agreement. This Agreement, the Note and the Guaranty constitute
the entire agreement among the parties relative to the specific subject matter hereof and
thereof.
6.3
Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given: (a) upon personal delivery to the party to be
notified; (b) when sent by confirmed facsimile if sent during normal business hours of the
recipient, if not, then on the next business day; (c) five days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; or (d) the next

10

business day after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be sent to a
party at the address or facsimile number of such party set forth on such party's signature
page hereof, or at such other address as such party may designate by 10 days' advance
written notice to the other parties hereto.
6.4
Binding Effect. This Agreement shall be binding upon and inure to the
benefit of Borrower and the Lender and their respective successors and permitted assigns
(which successors of the Borrower shall include a trustee in bankruptcy). The Borrower
may not assign any of its rights and obligations hereunder or any interest herein without
the prior written consent of the Lender. The Lender may not assign any of its rights and
obligations hereunder and interests without the prior written consent of the Borrower. .
6.5
GOVERNING LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT
AND THE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF VERMONT WITHOUT
REGARD TO CONFLICT OF LAWS. THE BORROWER HEREBY AGREES TO
THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
VERMONT AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE
BY REGISTERED MAIL DIRECTED TO THE BORROWER AT THE ADDRESS
SET FORTH ON THE SIGNATURE PAGE HEREOF AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER THE SAME
SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE
BORROWER AND THE LENDER HEREBY WAIVE ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE BETWEEN THE BORROWER AND THE
LENDER ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION
WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT
WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY. WITH RESPECT
TO THE FOREGOING CONSENT TO JURISDICTION, BOTH PARTIES HEREBY
WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS
IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION 8.5
SHALL AFFECT THE RIGHT OF THE LENDER TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE
LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST THE
BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
6.6
Survival. All warranties, representations, and covenants made by the
Borrower in this Agreement and the Note shall be considered to have been relied upon by
the Lender, and shall survive the delivery to the Lender of the Note, regardless of any
investigation made by the Lender. All statements in any such certificate or other
instrument prepared and/or delivered for the benefit of the Lender shall constitute

11

warranties and representations by the Borrower under this Agreement. Except as

otherwise expressly provided in this Agreement, all covenants made by the Borrower
under this Agreement or the Note shall be deemed continuing until all Obligations are
satisfied in full.
6.7
Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the
same instrument.
6.8
Severability. In the event one or more of the provisions of this Agreement
should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
6.9
EB-5 Program. Notwithstanding anything in this Agreement, the Note or
instruments, agreements and documents executed by the Borrower at the Lender's request
contemporaneously hereof in connection with this Agreement or the Note to the contrary,
no payment shall be made by the Borrower to Lender or any other creditor that would
jeopardize evidencing the use of the proceeds of the Loan to create the requisite
employment in the Project pursuant to the requirements of the EB-5 Program.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

12

[LOAN AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth in the first paragraph hereof.
CARINTHIA GROUP 1, L.P.
By: [__________________],
Its general partner
By: _______________________
Name:
Title:
Address:
_______________________
_______________________
_______________________
Facsimile: _____________

CARINTHIA GROUP 2, L.P.

By: [__________________],
Its general partner
By: _______________________
Name:
Title:
Address:
_______________________
_______________________
_______________________
Facsimile: _____________

13

WEST LAKE WATER PROJECT LLC

By: _______________________
Name:
Title:
Address:
_______________________
_______________________
_______________________
Facsimile: _____________

14

EXHIBIT A
FORM OF NON-REVOLVING LINE OF CREDIT NOTE
U.S. $30,000,000

[________________, 2014]

FOR VALUE RECEIVED, WEST LAKE WATER PROJECT LLC, a Vermont limited
liability company with a principal place of business at [_______________] (the
Borrower), hereby promises to pay to Carinthia Group 1, L.P., a Vermont limited
partnership with a principal place of business at [________________] and Carinthia
Group 2, L.P., a limited partnership organized under the laws of the State of Vermont
(Carinthia 2) with a principal place of business at [
] (Carinthia 1 and
Carinthia 2 each referred to as a Lender and collectively as the Lender), in
accordance with each Lenders proportionate interest set forth on Schedule 1 attached
hereto, or order, the principal sum of $30,000,000 or such lesser amount as shall have
been advanced and remain outstanding under the terms of the Agreement defined below
(the Principal Sum), together with accrued interest thereon, in the manner and upon the
terms and conditions set forth below. The actual amount due and owing from time to time
under this Non-Revolving Credit Note (Note) shall be evidenced by Lender's records of
receipts and disbursements, which shall be prima facie evidence of such amount, absent
manifest error.
1.
Incorporation of the Loan Agreement. Each Lender and the Borrower are parties
to that certain Loan Agreement (the Agreement) dated as of [___________], 2014.
The terms and conditions of the Agreement are hereby incorporated in this Note by
reference and the Lender and the Borrower are entitled to all rights and benefits of the
Agreement. Capitalized terms used but not defined herein shall have the meanings given
to such terms in the Agreement.
2.

Payment of Principal and Interest.

(a)
This Note shall automatically mature and be due and payable in full,
together with any interest accrued but unpaid thereon, on the fifth anniversary date of the
first Advance (First Advance Date) under this Note (the Maturity Date) provided,
however, the Borrower may upon written consent of the Lender, such consent not to be
unreasonably withheld, extend the Maturity Date for a period of up to an additional two
(2) years (the Extension Option). If the Borrower exercises the Extension Option, then
the term Maturity Date shall include the Extension Option. It is the Borrower's
intention to repay the Principal Sum, together with any interest accrued but unpaid
thereto, on the Maturity Date with the proceeds of long-term financing or from other
available sources.
(b)
Interest shall accrue on the unpaid Principal Sum on a simple interest basis
at a fixed rate of 1.0% per annum commencing on the First Advance Date until the
Maturity Date. In the event Borrower exercises the Extension Option, interest shall

accrue on the unpaid Principal Sum on a simple interest basis as follows: (i) at a fixed
rate of 7.0% per annum commencing on the fifth (5th) anniversary of the First Advance
Date; and (ii) a fixed rate of 10.0% per annum commencing on the sixth (6th) anniversary
of the First Advance Date until the Maturity Date. Such interest will not be compounded
or capitalized. Interest payments shall be paid to the Lender in arrears by the Borrower by
way of annual payments on December 1 of each year during which any portion of the
Principal Sum is outstanding. Interest shall be computed on the basis of the actual
number of days elapsed and a year of 365 days commencing on the First Advance Date.
(c)
All sums payable hereunder shall be payable in lawful money of the
United States and shall be applied first to accrued and unpaid interest and then in
payment of the Principal Sum.
(d)
Without in any way limiting Lender's rights and remedies hereunder and
under the Note, after the occurrence of an Event of Default, and until such time such
Event of Default shall have been cured or waived, Advances and other obligations
hereunder shall bear interest at the rate of 5% per annum (the Default Interest Rate) or
such lesser rate permitted by applicable law, if the Default Interest Rate would violate
applicable law. This clause (d) shall not be given effect to the extent that the application
of the Default Interest Rate would in any way alter or amend the calculations of the
Business Plan included in the Private Placement Memorandum.
3.
Place of Payment. The Principal Sum together with and all accrued and
unpaid interest thereon shall be payable at the Lender's principal executive offices at
[______________], or at such other place as the Lender, from time to time, may
designate in writing.
4.
Prepayment. The Borrower shall be prohibited from prepaying the Principal Sum,
in whole or in part, if such prepayment would jeopardize any of the Lenders limited
partners capacity to be admitted to the United States of America as unconditional lawful
permanent residents with their spouses and unmarried, minor children pursuant to 8
U.S.C. 1153 (b)(5)(A) - (D), INA 203 (b)(5)(A) - (D); the Departments of Commerce,
Justice and State, the Judiciary, and Related Agencies Appropriations Act of 1993, Pub.
L. No. 102-395, section 610, as amended; or 8 U.S.C. 1186b, INA 216A, as any of
the foregoing may be amended. Subject to the foregoing, any portion of the Principal
Sum that is prepaid shall be accompanied by any and all interest accrued but unpaid
thereon.
5.
Presentment. The Borrower hereby waives diligence, demand, presentment for
payment, protest and notice of protest, notice of acceleration, and all other notices or
demands of any kind.
6.
Rights and Remedies. The rights and remedies granted or available to the Lender
with respect to the obligations of the Borrower evidenced by this Note are set forth in the
Agreement, and the Lender may exercise the respective rights, options, and remedies
provided for in the Agreement, or otherwise available at law or in equity, all in
accordance with their respective terms. All rights and remedies granted or available to

the Lender by this Note and the Agreement shall be deemed concurrent and cumulative,
and not exclusive of any rights or remedies available at law or in equity. Notwithstanding
the foregoing, no such rights and remedies may be exercised if the exercise of such rights
or remedies would jeopardize any of the Lenders limited partners' capacity to be
admitted to the United States of America as unconditional lawful permanent residents
with their spouses and unmarried, minor children pursuant to 8 U.S.C. 1153 (b)(5)(A) (D), INA 203 (b)(5)(A)-(D); the Departments of Commerce, Justice and State, the
Judiciary, and Related Agencies Appropriations Act of 1993, Pub. L. No. 102-395,
section 610, as amended; or 8 U.S.C. 1186b, INA 216A, as any of the foregoing may
be amended.
7.
Costs and Expenses. In addition to all other sums payable under this Note, the
Borrower also agrees to pay to the Lender, on demand, all reasonable costs and expenses
(including attorneys' fees and legal expenses) incurred by the Lender in the enforcement
of the Borrower's obligations under this Note.
8.
Severability. If any provision of this Note is held to be invalid or unenforceable
by a court of competent jurisdiction, the other provisions of this Note shall remain in full
force and effect and shall be construed liberally in favor of the Lender in order to
effectuate the purposes and intent of this Note.
9.
Governing Law. This instrument shall be governed by and construed in
accordance with the laws of the State of Vermont, excluding its conflicts of laws rules.
BORROWER HEREBY AGREES TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF VERMONT AND WAIVES PERSONAL SERVICE OF
ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE
OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO BORROWER AT
THE ADDRESS SET FORTH ON THE SIGNATURE PAGE OF THE AGREEMENT
AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS
AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS,
POSTAGE PREPAID.
10.
Successors and Assigns. The provisions of this Note shall be binding upon and
inure to the benefit of the Borrower and the Lender and their respective heirs, executors
or administrators and assigns. The Borrower may not assign any of its rights and
obligations hereunder or any interest herein without the prior written consent of the
Lender. The Lender may not assign any of its rights and obligations hereunder and
interests without the prior written consent of the Borrower and subject to Section 11
below.
11.
Transfers. The Borrower shall maintain at its offices a register (the Register)
for the recordation of the names and addresses of the Lender and each holder of this
Note. Without limitation of any other provision of Section 10 above or this Section 11,
no transfer shall be effective until recorded in the Register. The entries in the Register
shall be conclusive absent manifest error and the Borrower may treat each person whose
name is recorded in the Register as a holder of this Note notwithstanding any notice to
the contrary. The foregoing provisions are intended to comply with the registration

requirements in the U.S. Treasury Regulation Section 5f.103-1 so that this Note is
considered to be in registered form pursuant to such regulation.

IN WITNESS WHEREOF, the Borrower has executed this Note as of the date
first above written.
West Lake Water Project LLC

By: _______________________
Name:
Title:
Address:
______________________
______________________
______________________
Telephone:_____________
Facsimile: _____________

SCHEDULE 1

Proportionate Interest

Lender

Carinthia Group 1, L.P.

_____%

Carinthia Group 2, L.P.

_____%

EXHIBIT B
FORM OF GUARANTY OF COLLECTION
For good and valuable consideration, Peak Resorts, Inc. a corporation with its registered
office in St Louis Missouri, and with a mailing address of 17409 Hidden Valley Drive,
Wildwood, Missouri 63025 (the Guarantor of Collection), absolutely and
unconditionally guarantees and promises to pay to Carinthia Group 1 L.P, a Vermont
limited liability company with a principal place of business in West Dover, Vermont and
Carinthia Group 2, L.P., a limited partnership organized under the laws of the State of
Vermont (Carinthia 2) (Carinthia 1 and Carinthia 2 each collectively referred to as a
Lender and collectively as the Lender), or its order, on demand, in legal tender of the
United States of America, the Indebtedness (as that term is defined below) of its affiliate
West Lake Water Project LLC, a limited liability company organized under the laws of
the State of Vermont, and with a mailing address of [_____________] (the Borrower),
owed to the Lender on the terms and conditions set forth in this Guaranty. Under this
Guaranty, the liability of the Guarantor is limited to the Indebtedness and the obligations
of the Guarantor are continuing until the Indebtedness is fully paid and satisfied and all
loan facilities comprising the Indebtedness are expired or terminated.
1.
Defined Terms. The following words shall have the following meanings when
used in this Guaranty:
(a)
Guaranty shall mean this Guaranty of Collection made by the Guarantor
for the benefit of the Lender.
(b)
Indebtedness shall mean all of the Borrower's liabilities, obligations,
debts, and indebtedness to the Lender that are incurred in connection with a loan in the
maximum principal amount of $30,000,000 pursuant to that certain Loan Agreement
among each Lender and the Borrower of even date herewith (the Loan Agreement) and
evidenced by that certain promissory note payable to the Lender dated of even date
herewith (the Note), or arising out of the various Related Documents as that term is
defined below.
(c)
Related Documents shall mean and include without limitation any other
instruments, agreements and documents executed by the Borrower at the Lender's request
contemporaneously hereof in connection with the Loan Agreement and the Note.
2.
Guaranty. The Guarantor guarantees to the Lender full and prompt collection of
up to the principal amount due under the Note and all accrued and unpaid interest
thereon. This Guaranty is a guaranty of collection only, and not a guaranty of payment.
As such, the Lender in accepting this Guaranty acknowledges that upon
(i) the
Borrowers failure to make a payment when the same shall be due and owing to the
Lender in respect of the Indebtedness and (ii) lawful acceleration of the Indebtedness, the
Lender will (a) resort first directly against the Borrower and fully exhaust any and all
legal remedies existing or available and shall have failed to collect the full amount of the

Indebtedness before proceeding against Guarantor; and (b) give notice of the terms, time,
and place of any public or private sale of collateral held, if any, by the Lender and
comply with any other applicable provisions of the Uniform Commercial Code as
adopted in Vermont, or any other applicable law. This Guaranty will take effect when
received by the Lender without the necessity of any acceptance by the Lender, or any
notice to the Guarantor or to the Borrower, and will continue in full force until all
Indebtedness incurred or contracted before receipt by the Lender of any notice of
revocation shall have been fully and finally paid and satisfied and all other obligations of
the Guarantor under this Guaranty shall have been performed in full. Guarantor hereby
agrees that it shall provide to [____________], as agent of the limited partners of the
Lender (the Agent), such quarterly and annual financial statements and operational
reports as it may provide to its principal lender as promptly as reasonably practicable
following the preparation thereof.
3.
Representations and Warranties. The Guarantor represents and warrants to the
Lender, at the time of execution of this Guaranty and as of the time of each drawing
under or other utilization of the loan as set forth and more particularly detailed in the
Loan Agreement, that to the best of its knowledge (a) no representations or agreements of
any kind have been made to the Guarantor which would limit or qualify in any way the
terms of this Guaranty; (b) the execution by Guarantor of the Guaranty and the incurring
of liability and indebtedness to the Lender does not and will not contravene any provision
contained in any other loan or credit agreement or borrowing instrument or contract to
which the Guarantor is a party; (c) the Guaranty has been duly executed and delivered by
the Guarantor, and constitutes valid and binding obligations of the Guarantor enforceable
in accordance with its terms; and (d) this Guaranty constitutes an independent obligation
of the Guarantor, notwithstanding its ownership interest in the Borrower.
4.
Governing Law. This Guaranty is conclusively deemed to be made under and for
all purposes to be governed by and construed in accordance with the laws of the State of
Vermont. In relation to any legal action or proceedings arising out of or in connection
with this Guaranty, the Guarantor submits to the jurisdiction of the courts of the State of
Vermont, as the Lender may elect, and to the extent permitted by law, waives any
objection to such legal action or proceedings in such courts on the grounds of venue or on
the grounds that such legal action or proceedings have been brought in an inconvenient
forum. These submissions are made for the benefit of the Lender and shall not affect the
right of the Lender to take legal action or proceedings in any other court of competent
jurisdiction nor shall the taking of legal action or proceedings in any court of competent
jurisdiction preclude the Lender from taking legal action or proceedings in any other
court of competent jurisdiction (whether concurrently or not). The Lender and the
Guarantor hereby waive the right to any jury trial in any action, proceeding or
counterclaim brought by either the Lender or the Guarantor against the other.
5.
Miscellaneous. The following miscellaneous provisions are a part of this
Guaranty:

(a)
Amendments. This Guaranty 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.
(b)
Attorneys' Fees; Expenses. The Guarantor agrees to pay upon demand the
Lender's reasonable costs and expenses, including reasonable attorneys' fees and the
Lender's reasonable legal expenses, incurred in connection with the successful
enforcement of this Guaranty. The Guarantor also shall pay all court costs and such
additional fees as may be directed by the court in connection with the successful
enforcement of this Guaranty.
(c)
Notices. All notices required to be given by either party to the other under
this Guaranty shall be in writing and shall be effective when actually delivered or one (1)
business day after being deposited with a nationally recognized overnight courier with
receipt confirmed, or three (3) business days after being deposited in the United States
mail, first class postage prepaid with return receipt requested, 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.
(d)
Interpretation. 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.
(e)
Waiver. The Lender shall not be deemed to have waived any rights under
this Guaranty unless such waiver is given in writing and signed by the Lender. No delay
or omission on the part of the Lender in exercising any right shall operate as a waiver of
such right or any other right. A waiver by the Lender of a provision of this Guaranty shall
not prejudice or constitute a waiver of the Lender's right otherwise to demand strict
compliance with that provision or any other provision of this Guaranty. No prior waiver
by the Lender, nor any course of dealing between the Lender and the Guarantor, shall
constitute a waiver of any of the Lender's rights or of any of the Guarantor's obligations
as to any future transactions. Whenever the consent of the Lender is required under this
Guaranty, the granting of such consent by the 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 the Lender. Any
amendment or waiver by the Lender of any provision of this Guaranty shall require the
consent of limited partners in the Lender that own not less than a majority of the limited
partnership interests then outstanding.
(f)
Lender's Records. Every certificate issued under the hand of an officer of
the Lender purporting to show the amount at any particular time due and payable to the
Lender, and covered by this Guaranty, shall be received as conclusive evidence as against

the Guarantor that such amount is at such time so due and payable to the Lender and is
covered hereby.
(g)
Change. The Guarantor agrees that no change or changes in the name or
names of the Borrower or Guarantor, no change or changes in the objects, capital or
enabling documents of the Borrower or the amalgamation of the Borrower with any other
entity, and no other change or changes of any kind whatsoever shall in any way affect the
liability of the Guarantor, either with respect to transactions occurring before or after any
such change or changes, and the Lender shall not be obliged to inquire into powers of the
Borrower, its officers, directors or agents acting or purporting to act on its behalf, and
monies, advances, renewals or credits in fact borrowed or obtained by the Borrower from
the Lender and all liabilities incurred by the Borrower from the Lender in professed
exercise of such powers shall be deemed to form part of the Indebtedness hereby
guaranteed notwithstanding that such borrowing, obtaining of monies, advances,
renewals or credits, or incurring of such liabilities shall be in excess of the powers of the
Borrower, or its officers, directors or agents, or be in any way irregular, defective or
informal.
(h)
Successors and Assigns. The Guarantor may not delegate any of its
obligations hereunder. The provisions of this Guaranty shall be binding upon any
successors of the Guarantor.
(i)
Sharing of Payments. By its acceptance of this Guaranty, each Lender
agrees to share in all payments made under this Guaranty in accordance with its
Proportionate Interest set forth on Schedule 1 of the Note.

THE UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE

PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN
ADDITION, THE GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS
EFFECTIVE UPON THE GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO THE LENDER AND THAT THE GUARANTY WILL CONTINUE
UNTIL TERMINATED. NO FORMAL ACCEPTANCE BY THE LENDER IS
NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS
DATED AND SHALL BE EFFECTIVE AS OF [___________], 2014,
NOTWITHSTANDING THE DATE OF ANY OF THE RELATED DOCUMENTS.

GUARANTOR OF COLLECTION
PEAK RESORTS, INC.

By: ________________________
Name:
Title:

Address:
______________________
______________________
______________________
Facsimile: _____________

Signed, acknowledged and delivered in the presence of:

____________________________________
Authorized Officer

20023765v.2

EXHIBIT 12
FORM OF LOAN AGREEMENT BETWEEN CARINTHIA SKI LODGE LLC AND
CARINTHIA GROUP 1 AND 2, L.P. (INCLUDING THE FORM OF NOTE ATTACHED
THERETO AS EXHIBIT A AND THE FORM OF GUARANTY OF COLLECTION BY
PEAK RESORTS, INC. ATTACHED THERETO AS EXHIBIT B)

LOAN AGREEMENT
THIS LOAN AGREEMENT (the Agreement), dated as of [__________], 2014,
is made by and among Carinthia Group 1, L.P., a limited partnership organized under the
laws of the State of Vermont (Carinthia 1) and Carinthia Group 2, L.P., a limited
partnership organized under the laws of the State of Vermont (Carinthia 2) (Carinthia 1
and Carinthia 2, each collectively referred to as a Lender and collectively as the
Lender) and Carinthia Ski Lodge LLC, a limited liability company organized under the
laws of the State of Vermont (the Borrower).
RECITALS:
WHEREAS, the Borrower was organized to undertake the development and
construction of the Carinthia Ski Lodge, a new approximately thirty six thousand squarefoot skier services building located at the base of the Carinthia slopes providing extensive
food and beverage facilities, ski rentals services, retail and convenience store, parking lot
and lift ticket sales at the Mount Snow Ski Resort in West Dover, Vermont (the
Project);
WHEREAS, under the terms of the offering (the Offering) described in the
Carinthia Group Private Placement Memorandum (the Private Placement
Memorandum), the Lender is seeking to raise capital from, among other investors,
persons who are not citizens or lawful permanent residents of the United States and who
desire to become limited partners of the Lender, and the investments may enable such
investors to become eligible for admission to the United States of America as lawful
permanent residents with their spouses and unmarried, minor children pursuant to 8
U.S.C.1153 (b)(5)(A)-(D); INA 203 (b)(5)(A)-(D) of the Immigration and Nationality
Act (the EB-5 Program); and
WHEREAS, to comply with the EB-5 Program the Lender must invest or loan the
funds raised through the Offering from such investors in or to a business carrying on a
commercial venture; and
WHEREAS, in furtherance of the Offering and in compliance with the
requirements of the EB-5 Program, each Lender has agreed, subject to the terms and
conditions of this Agreement, to extend to the Borrower a line of credit in the minimum
amount of $500,000 and a maximum principal amount of $22,000,000 based upon the
number of limited partnership interests in each Lender sold pursuant to the Offering for
the development and construction by Borrower of the Project, subject to the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
1.

Line of Credit.

1.1
Line of Credit Established. Subject to the terms and conditions hereof,
and in reliance on the representations and warranties and covenants contained herein,
Lender hereby agrees to extend one or more advances (each, an Advance and
collectively, Advances), up to an aggregate principal amount of $22,000,000 (the sum
of such Advances, the Loan), such Loan to be made by each Lender in accordance with
each Lenders proportionate interest set forth on Schedule 1 attached hereto; provided
that the Borrower shall draw, and the Lender shall make, Advances equal to the entire
principal amount of the Loan to the Borrower (or such lesser proceeds as shall have been
received by the Lender from investors pursuant to the Offering) in material compliance
with all requirements of the EB-5 Program and the Business Plan included in the Private
Placement Memorandum including, without limitation, any applicable deadline for
disbursement of the Loan, provided that any such non-compliance that would jeopardize
any of the Lenders limited partners capacity to be admitted to the United States of
America as unconditional lawful permanent residents with their spouses and unmarried,
minor children pursuant to 8 U.S.C. 1153 (b)(5)(A) (D), INA 203 (b)(5)(A) (D);
the Departments of Commerce, Justice and State, the Judiciary, and Related Agencies
Appropriations Act of 1993, Pub. L. No. 102-395, section 610, as amended; or 8 U.S.C.
1186b, INA 216A, as any of the foregoing may be amended, shall be deemed material.
1.2
Note. Concurrently with the execution of this Agreement, the Borrower
hereby executes and delivers a promissory note payable to the Lender in the original
principal amount of $22,000,000 (as amended, supplemented, restated, replaced or
otherwise modified from time to time, the Note). The Note shall evidence the absolute
and unconditional obligation of the Borrower to repay the Lender for all Advances made
by the Lender, with interest as provided in this Agreement and the Note. Each Advance
from time to time shall be deemed evidenced by the Note, which is deemed incorporated
in this Agreement by reference and made part hereof. The Note shall be in the form set
forth on Exhibit A.
1.3
Maturity and Interest Rate. The Borrower shall repay the Loan in full,
together with any interest accrued but unpaid thereon, on the maturity date set forth in the
Note. Advances shall bear interest on the unpaid principal balance of the Loan
outstanding at any time from the Funding Date of each such Advance to the maturity date
(or repayment) at the rate set forth in the Note. Funding Date means, with respect to
any Advance, the date on which such Advance is made to the Borrower.
1.4

Draw Requests.

(a)
At any time and from time to time, subject to the requirements of
the EB-5 Program and the Business Plan included in the Private Placement Memorandum
including, without limitation, any applicable deadline for disbursement of the Loan, the
Borrower may request one or more Advances by submitting to the Lender a completed
and executed draw request (Draw Request) no later than five business days prior to the
Funding Date of such Advance. Each such Advance shall be in the aggregate amount of
not less than $25,000 (or, if less, the remaining amount available under the Loan).
Subject to the provisions of this Agreement, the Lender shall make the Advance on the
proposed Funding Date in accordance with the Borrower's Draw Request. Each Draw

Request shall clearly identify the use of the proceeds and their investment directly into
the Project in accordance with the Project's plans, specifications and budget and shall be
accompanied by appropriate supporting documentation.
2.
Representations and Warranties. The Borrower represents and warrants to
the Lender on the date hereof and on each Funding Date as follows.
2.1

Organization, Good Standing and Qualification.

(a)
The Borrower is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Vermont. The
Borrower has all requisite power and authority to own and operate its properties and
assets, to execute and deliver this Agreement and to develop and construct the Project.
(b)
The Borrower is not in violation or default of any term of its
organizational documents. The execution, delivery, and performance of this Agreement
and the Note will not, with or without the passage of time or giving of notice, result in
any such violation, or be in conflict with or constitute a default under its organizational
documents.
2.2
Authorization; Binding Obligations. All action on the part of the
Borrower, its officers, managers and members necessary for the authorization of this
Agreement and the Note and the performance of all obligations of the Borrower
hereunder and thereunder has been taken. This Agreement and the Note have been duly
executed and delivered by the Borrower and constitute valid and binding obligations of
the Borrower enforceable in accordance with their respective terms, except (a) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights and (b) as limited by general
principles of equity (regardless of whether considered and applied in a proceeding in
equity or at law) that restrict the availability of equitable remedies.
2.3
Liabilities. The Borrower does not have and is not subject to any liability
or obligation of any nature, whether accrued, absolute, contingent, or otherwise, asserted
or unasserted, known or unknown (including, without limitation, liabilities as guarantor
or otherwise with respect to obligations of others, or liabilities for taxes due or then
accrued or to become due), except liabilities incurred in the ordinary course of business
of the Borrower in connection with the development and construction of the Project.
2.4
Agreements. All agreements, understandings, arrangements or other
commitments to which the Borrower is a party (collectively, Contracts) are in all
material respects valid and enforceable in accordance with their terms. The Borrower is
not in default in the performance, observance or fulfillment of any obligation, covenant
or condition contained therein, and, to the Borrower's knowledge, no event has occurred
which with or without the giving of notice or lapse of time, or both, would constitute a
default thereunder by the Borrower, except in either case where such default would not
and would not reasonably be expected to have, individually or collectively, a material
adverse effect on the Borrower. The execution, delivery, and performance by the

Borrower of this Agreement and the Note will not, with or without the passage of time or
giving of notice, result in any such violation, or be in conflict with or constitute a default
under any Contract, except in either case where such default would not and would not
reasonably be expected to have, individually or collectively, a material adverse effect on
the Borrower.
2.5
Obligations to Related Parties. The Borrower has no obligations to
executive officers, managers, members, employees or affiliates of the Borrower, except
obligations to Mount Snow Ltd. or any of its affiliates solely to the extent such
obligations have arisen or arise in connection with the development and construction of
the Project.
2.6

Real and Personal Property.

(a)
Real Property. The Borrower does not own any real property.
With respect to real property leased by the Borrower (the Leased Real Property), each
of the leases for the Leased Real Property is in full force and effect, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights. Neither the Borrower nor, to the
Borrower's knowledge, any other party thereto is in material default under any of said
leases, nor is the Borrower aware of any event that has occurred which, with the giving of
notice or the passage of time, or both, would give rise to a material default thereunder.
(b)
Personal Property. The Borrower has good and marketable title to
all of its personal property and assets, and all such personal property and assets are in
good working condition, reasonable wear and tear excepted. None of such personal
property or assets is subject to any Lien other than Permitted Liens. Lien means any
security interest, mortgage, pledge, lien, claim, charge, title retention or other
encumbrance. Permitted Liens means (a) statutory Liens for taxes, which are not yet
due and payable, (b) statutory or common law Liens of landlords securing obligations to
pay lease payments that are not yet due and payable or in default, (c) statutory or
common law Liens in favor of carriers, warehousemen, mechanics and materialmen to
secure claims for labor, materials or supplies and other like liens incurred in the ordinary
course of business that are not yet due and payable, (d) pledges or deposits made in the
ordinary course of business to secure payment of workmen's compensation, or to
participate in any fund in connection with workmen's compensation, unemployment
insurance, old-age pensions or other social security programs, (e) encumbrances
consisting of zoning restrictions, easements or other restrictions on the use of real
property, none of which materially impairs the use of such property or the value thereof,
and none of which is violated in any material respect by existing or proposed structures
or land use, (f) Liens in favor of Mount Snow Ltd. or any of its affiliates solely to the
extent such Lien is attached to personal property or other assets that have been
contributed to the Project by Mount Snow Ltd. or any of such affiliates, and (g) Liens
securing indebtedness advanced by a third party to the Borrower to the extent that such
indebtedness has been or will be used by the Borrower to complete the Project pursuant
to the Business Plan and remains outstanding.

2.7
Litigation. There is no litigation, arbitration, mediation or proceeding or
investigation pending or, to the knowledge of the Borrower, threatened against the
Borrower or affecting any of its properties or assets or which may call into question the
validity or hinder the enforceability of this Agreement or the Note or the transactions
contemplated hereby and thereby.
2.8

Compliance with Laws; Authorizations.

(a)
The Borrower has complied in all material respects with each, and
is not in violation of any, law, statute, regulation, rule, ordinance or order (Laws) to
which the Borrower or its business, operations, employees, assets or properties is or has
been subject.
(b)
Except as set forth in the schedule attached to this Agreement as
Schedule 2.8, all material licenses, permits and other authorizations (Authorizations)
required by the Borrower for the development and construction of the Project (other than
predevelopment and preconstruction expenditures) are valid and in full force and effect
and none of such authorizations will be terminated or impaired or become terminable as a
result of the transactions contemplated by this Agreement and the Note.
2.9
Insurance. The Borrower has fire, casualty, product liability, and business
interruption and other insurance policies, with extended coverage, sufficient in amount to
allow it to replace any of its material properties which might be damaged or destroyed or
sufficient to cover liabilities to which the Borrower may reasonably become subject, and
such types and amounts of other insurance with respect to its business and properties, on
both a per occurrence and an aggregate basis, as are customarily carried by persons
engaged in the same or similar businesses as Borrower. There is no material default by
the Borrower, or to the knowledge of the Borrower, by any insurance carrier of such
policies, or event which could give rise to a material default under any such policy.
3.

Conditions
3.1

Conditions Precedent to Each Advance.

(a)
The Borrower shall have executed and delivered the Note to the
Lender (initial Advance only).
(b)

The Lender shall have timely received a Draw Request.

(c)
The Borrower shall have delivered to the Lender a certificate,
dated as of the date of the Advance, signed by the President of the Borrower certifying (i)
compliance in all material respects with all covenants and agreements herein then
required to be or to have been complied with by it and (ii) the absence of any Event of
Default or any event which, with the passage of time, or the giving of notice, or both,
would constitute an Event of Default under this Agreement, in each case both prior to and
immediately upon the making of such Advance.

(d)
No injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the extending of such credit shall have been issued and
remain in force by any governmental authority against the Borrower or the Lender.
(e)
Peak Resorts, Inc. shall have executed and delivered the Guaranty
in the form attached hereto as Exhibit B (the Guaranty) to the Lender (initial Advance
only).
4.

Covenants of Borrower.

4.1
Affirmative Covenants. From the Effective Date until the date on which
all Advances hereunder and under the Note are paid in full, together with any interest
accrued but unpaid thereon, the Borrower will, unless the Lender shall otherwise consent
in writing:
(a)
Use of Proceeds. Use the proceeds of the Advances solely to
develop and construct the Project in the State of Vermont and in material compliance
with the requirements of the EB-5 Program and the Business Plan that is included in the
Private Placement Memorandum, provided that any such non-compliance that would
jeopardize any of the Lenders limited partners capacity to be admitted to the United
States of America as unconditional lawful permanent residents with their spouses and
unmarried, minor children pursuant to 8 U.S.C. 1153 (b)(5)(A) (D), INA 203
(b)(5)(A) (D); the Departments of Commerce, Justice and State, the Judiciary, and
Related Agencies Appropriations Act of 1993, Pub. L. No. 102-395, section 610, as
amended; or 8 U.S.C. 1186b, INA 216A, as any of the foregoing may be amended,
shall be deemed material. Upon written request of the Lender the Borrower shall furnish
such written evidence that the proceeds have been used for such purposes and
periodically furnish such written evidence that establishes the requisite employment
created in the Project pursuant to the EB-5 Program and as disclosed in the Private
Placement Memorandum.
(b)
Compliance with Laws. Comply in all material respects with all
applicable Laws and maintain in effect all Authorizations that are required or otherwise
necessary for the Borrower to develop the Project.
(c)
Preservation of Existence. Preserve and maintain its existence,
rights, franchises and privileges in the jurisdiction of its organization, and qualify and
remain qualified in good standing as a foreign corporation in each jurisdiction where the
nature of its business requires it to be so qualified or where the ownership of its
properties or the nature of its activities makes such qualification necessary, except where
the failure to be so qualified would not materially adversely affect the enforceability of
this Agreement and the Note, the business, properties, operations, profits or condition
(financial or otherwise) of the Borrower or the ability of the Borrower to perform its
obligations hereunder.
(d)
Keeping of Records and Books of Account. Maintain and
implement administrative and operating procedures and keep and maintain all documents,

books, records and other information reasonably necessary or advisable for the
development, construction and administration of the Project in compliance with all
applicable Laws and Authorizations.
(e)
Maintenance of Properties. Maintain its properties and assets,
whether owned or leased, in good condition and repair (normal wear and tear excepted),
and pay and discharge or cause to be paid and discharged, when due, the cost of repairs to
or maintenance of the same.
(f)
Insurance. Maintain insurance with respect to its properties and
assets and business against such casualties and contingencies as shall be in accordance
with general practices of businesses engaged in similar activities. Such insurance shall be
in such amounts, contain such terms, be in such forms and be for such periods as may be
reasonably satisfactory to the Lender (but in no event less than the amount of the Loan
then outstanding together with interest accrued but unpaid thereon). In addition, all such
insurance shall name the Lender as loss payee and/or additional insured, as applicable,
for the benefit of the Lender.
(g)
Taxes. File or cause to be filed all federal, state and local tax
returns which are required to be filed by it. The Borrower shall pay or cause to be paid all
taxes shown to be due and payable on such returns or on any assessments received by it.
At its option, the Lender may discharge taxes, liens or security interests or other
encumbrances at any time levied or placed on the Project, may pay for insurance on the
Project and may pay for the maintenance and preservation of the Project. The Borrower
agrees to reimburse the Lender on demand for any reasonable payments made, or any
reasonable expenses incurred by the Lender pursuant to the foregoing authorization.
(h)
Performance of Obligations. Perform, pay and discharge, as and
when due, all of the Borrower's obligations (both monetary and non-monetary) under this
Agreement.
(i)
Inspection Rights. Permit Vermont Regional Center as agent of the
limited partners of the Lender (the Agent) to inspect the Project upon reasonable
request and provide copies of such financial records pertaining thereto as such Agent may
reasonably request.
(j)
Assurances. The Borrower will, at its expense, upon reasonable
request of the Lender promptly and duly execute and deliver such documents and
assurances and take such actions as may be necessary or desirable or as the Lender may
reasonably request in order to correct any defect, error or omission which may at any
time be discovered or to more effectively carry out the intent and purpose of this
Agreement.
4.2
Negative Covenants. From the date of this Agreement until the date on
which all Advances hereunder and under the Notes are paid in full, together with any
interest accrued but unpaid thereon, the Borrower will not, without the written consent of
each Lender:

(a)
Liens and Encumbrances. Create, assume or permit to exist any
Lien upon any of the properties or assets financed or purchased with the proceeds of the
Loan other than security interests with respect to money borrowed from the Lender and
Permitted Liens.
(b)
Transfer of Assets or Properties. Sell, enter into an agreement of
sale for, convey, lease, assign, transfer, pledge, grant a security interest, mortgage or
other Lien other than Permitted Liens in, or otherwise dispose of the any of the properties
or assets financed or purchased with the proceeds of the Loan.
(c)
Stock, Merger, Consolidation, Etc. Sell any equity interests to any
person other than Peak Resorts, Inc. or any of its wholly-owned subsidiaries or merge or
consolidate with any person.
(d)
Guarantees. Guarantee, endorse or otherwise be or become
contingently liable in connection with the obligations of any other person, except
endorsements of negotiable instruments for collection in the ordinary course of business.
(e)
Limitation on Transactions with Affiliates. Other than transactions
on terms no less favorable to the Borrower than those that could reasonably be obtained
at arms' length in the ordinary course of business, enter into, or be a party to, any
transaction with any affiliate.
(f)
Limitation on Investments. Make or suffer to exist any loans or
advances to, or extend any credit to, or make any investments (by way of transfer of
property, contributions to capital, purchase of stock or securities or evidences of
indebtedness, acquisition of the business or assets, or otherwise) in, any affiliate or any
other person.
(g)
Negative Pledge. Grant any Lien in, or otherwise encumber, any of
its properties or other assets other than Permitted Liens.
5.

Default

5.1
Events of Default. The occurrence of any one or more of the following
events, conditions or state of affairs shall constitute an Event of Default hereunder and
under the Note:
(a)
The Borrower shall fail to pay as and when due any principal or
interest hereunder or under the Note.
(b)
The Borrower shall fail to observe or perform any obligation or
any covenant to be observed or performed by it hereunder or under the Note (other than
the obligation to pay principal and/or interest under the Note) and such failure shall
continue uncured for a period of 60 business days after the Borrower becomes aware of
the occurrence thereof (such cure period to be applicable only in the event such default
can be remedied by corrective action of the Borrower as determined by the Lender).

(c)
Any representation or warranty made by Borrower in this
Agreement shall prove to have been false or misleading in any material respect at the
time when made.
(d)
Any judgment, writ or warrant of attachment or similar process
involving an amount in excess of U.S. $100,000 shall be entered or filed against the
Borrower or any of its assets or properties and shall remain undischarged for a period of
30 days.
(e)
If the Borrower makes an assignment for the benefit of creditors
generally, offers a composition or extension to creditors, or makes or sends notice of an
intended bulk sale of any business or assets now or hereafter owned or conducted by
Borrower, except as otherwise expressly permitted in this Agreement.
(f)
Upon the commencement of any action for the dissolution or
liquidation of the Borrower, or the commencement of any case or proceeding for
reorganization or liquidation of the Borrower's debts under the Bankruptcy Code or any
other state or federal law, now or hereafter enacted for the relief of debtors, whether
instituted by or against the Borrower; provided, however, that the Borrower shall have 60
days to obtain the dismissal or discharge of any involuntary proceeding filed against it
and the Lender may seek adequate protection in any bankruptcy proceeding.
(g)
Upon the appointment of a receiver, liquidator, custodian, trustee
or similar official or fiduciary for the Borrower or for a material portion of any property
of the Borrower.
(h)
This Agreement or the Note shall cease for any reason to be in full
force and effect or shall be declared to be null and void or unenforceable in whole or in
part.
(i)
Other than Liens in favor of the Lender or Liens otherwise
consented to in writing by the Lender, imposition of any Lien or series of Liens against
the Borrower or any of the properties or other assets financed or purchased with the
proceeds of the Loan except Permitted Liens.
(j)

The Borrower shall cease to develop and construct the Project prior

(k)

The Guaranty shall cease to be in effect.

to completion.

5.2

Remedies on Default. Upon the occurrence of an Event of Default:

(a)
Subject to Section 5.2(d), in addition to the rights specifically
granted hereunder or now or hereafter existing in equity, at law, by virtue of statute or
otherwise (each of which rights may be exercised at any time and from time to time), the
Lender may forthwith declare all obligations, including all principal and interest, to be
immediately due and payable, without protest, demand or other notice (which are hereby
expressly waived by Borrower). Upon the occurrence of an Event of Default specified in
9

Section 5.1(e), (f) or (g) above, but subject to Section 5.2(d), all Advances, including all
interest accrued but unpaid thereon, shall be immediately due and payable without any
declaration by the Lender.
(b)
The Borrower will pay the Lender's fees incurred in any action
seeking enforcement of the Lender's rights hereunder.
(c)
No failure on the part of the Lender to exercise, and no delay in
exercising, any right, power or remedy shall operate as a waiver thereof, nor shall any
single or partial exercise by the Lenders of any right, power or remedy preclude any other
further exercise thereof or the exercise of any other right, power or remedy. The rights
and remedies provided herein shall be in addition to and not exclusive of any rights or
remedies provided at law or in equity. The remedies provided herein or in the Note or
otherwise available to the Lender at law or in equity shall be cumulative and concurrent,
and may be pursued singly, successively or together at the sole discretion of the Lender,
and may be exercised as often as occasion therefor shall occur.
(d)
No rights and remedies may be exercised upon an Event of Default
if such rights or remedies would jeopardize any of the Lenders limited partners capacity
to be admitted to the United States of America as unconditional lawful permanent
residents with their spouses and unmarried, minor children pursuant to 8 U.S.C. 1153
(b)(5)(A) - (D), INA 203 (b)(5)(A) - (D); the Departments of Commerce, Justice and
State, the Judiciary, and Related Agencies Appropriations Act of 1993, Pub. L. No. 102395, section 610, as amended; or 8 U.S.C. 1186b, INA 216A, as any of the foregoing
may be amended.
6.

Miscellaneous.

6.1
Amendment and Waiver. No amendment to or waiver of any provision of
this Agreement nor consent to any departure by the Borrower, shall in any event be
effective unless (a) the same shall be in writing and signed by the Lender and Borrower
(with respect to an amendment) or the Lender (with respect to a waiver or consent by it)
or the Borrower (with respect to a waiver or consent by it), as the case may be, and such
waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given. Any amendment or waiver by the Lender of any provision of
this Agreement or the Note shall require the consent of limited partners in the Lender that
own not less than a majority of the limited partnership interests then outstanding.
6.2
Entire Agreement. This Agreement, the Note and the Guaranty constitute
the entire agreement among the parties relative to the specific subject matter hereof and
thereof.
6.3
Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given: (a) upon personal delivery to the party to be
notified; (b) when sent by confirmed facsimile if sent during normal business hours of the
recipient, if not, then on the next business day; (c) five days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; or (d) the next

10

business day after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be sent to a
party at the address or facsimile number of such party set forth on such party's signature
page hereof, or at such other address as such party may designate by 10 days' advance
written notice to the other parties hereto.
6.4
Binding Effect. This Agreement shall be binding upon and inure to the
benefit of Borrower and the Lender and their respective successors and permitted assigns
(which successors of the Borrower shall include a trustee in bankruptcy). The Borrower
may not assign any of its rights and obligations hereunder or any interest herein without
the prior written consent of the Lender. The Lender may not assign any of its rights and
obligations hereunder and interests without the prior written consent of the Borrower.
6.5
GOVERNING LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT
AND THE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF VERMONT WITHOUT
REGARD TO CONFLICT OF LAWS. THE BORROWER HEREBY AGREES TO
THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
VERMONT AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE
BY REGISTERED MAIL DIRECTED TO THE BORROWER AT THE ADDRESS
SET FORTH ON THE SIGNATURE PAGE HEREOF AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER THE SAME
SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE
BORROWER AND THE LENDER HEREBY WAIVE ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE BETWEEN THE BORROWER AND THE
LENDER ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION
WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT
WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY. WITH RESPECT
TO THE FOREGOING CONSENT TO JURISDICTION, BOTH PARTIES HEREBY
WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS
IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION 8.5
SHALL AFFECT THE RIGHT OF THE LENDER TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE
LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST THE
BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
6.6
Survival. All warranties, representations, and covenants made by the
Borrower in this Agreement and the Note shall be considered to have been relied upon by
the Lender, and shall survive the delivery to the Lender of the Note, regardless of any
investigation made by the Lender. All statements in any such certificate or other
instrument prepared and/or delivered for the benefit of the Lender shall constitute

11

warranties and representations by the Borrower under this Agreement. Except as

otherwise expressly provided in this Agreement, all covenants made by the Borrower
under this Agreement or the Note shall be deemed continuing until all Obligations are
satisfied in full.
6.7
Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the
same instrument.
6.8
Severability. In the event one or more of the provisions of this Agreement
should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
6.9
EB-5 Program. Notwithstanding anything in this Agreement, the Note or
instruments, agreements and documents executed by the Borrower at the Lender's request
contemporaneously hereof in connection with this Agreement or the Note to the contrary,
no payment shall be made by the Borrower to Lender or any other creditor that would
jeopardize evidencing the use of the proceeds of the Loan to create the requisite
employment in the Project pursuant to the requirements of the EB-5 Program.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

12

[LOAN AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth in the first paragraph hereof.
CARINTHIA GROUP 1, L.P.
By: [__________________],
Its general partner
By: _______________________
Name:
Title:
Address:
_______________________
_______________________
_______________________
Facsimile: _____________

CARINTHIA GROUP 2, L.P.

By: [__________________],
Its general partner
By: _______________________
Name:
Title:
Address:
_______________________
_______________________
_______________________
Facsimile: _____________

13

CARINTHIA SKI LODGE LLC

By: _______________________
Name:
Title:
Address:
_______________________
_______________________
_______________________
Facsimile: _____________

14

EXHIBIT A
FORM OF NON-REVOLVING LINE OF CREDIT NOTE
U.S. $22,000,000

[________________, 2014]

FOR VALUE RECEIVED, CARINTHIA SKI LODGE LLC, a Vermont limited liability
company with a principal place of business at [_______________] (the Borrower),
hereby promises to pay to Carinthia Group 1, L.P., a Vermont limited partnership with a
principal place of business at [________________] and Carinthia Group 2, L.P., a limited
partnership organized under the laws of the State of Vermont (Carinthia 2) with a
principal place of business at [________________] (Carinthia 1 and Carinthia 2 each
collectively referred to as a Lender and collectively as the Lender), in accordance
with each Lenders proportionate interest set forth on Schedule 1 attached hereto, or
order, the principal sum of $22,000,000 or such lesser amount as shall have been
advanced and remain outstanding under the terms of the Agreement defined below (the
Principal Sum), together with accrued interest thereon, in the manner and upon the
terms and conditions set forth below. The actual amount due and owing from time to time
under this Non-Revolving Credit Note (Note) shall be evidenced by Lender's records of
receipts and disbursements, which shall be prima facie evidence of such amount, absent
manifest error.
1.
Incorporation of the Loan Agreement. Each Lender and the Borrower are parties
to that certain Loan Agreement (the Agreement) dated as of [___________], 2014.
The terms and conditions of the Agreement are hereby incorporated in this Note by
reference and the Lender and the Borrower are entitled to all rights and benefits of the
Agreement. Capitalized terms used but not defined herein shall have the meanings given
to such terms in the Agreement.
2.

Payment of Principal and Interest.

(a)
This Note shall automatically mature and be due and payable in full,
together with any interest accrued but unpaid thereon, on the fifth anniversary date of the
first Advance (First Advance Date) under this Note (the Maturity Date) provided,
however, the Borrower may upon written consent of the Lender, such consent not to be
unreasonably withheld, extend the Maturity Date for a period of up to an additional two
(2) years (the Extension Option). If the Borrower exercises the Extension Option, then
the term Maturity Date shall include the Extension Option. It is the Borrower's
intention to repay the Principal Sum, together with any interest accrued but unpaid
thereto, on the Maturity Date with the proceeds of long-term financing or from other
available sources.
(b)
Interest shall accrue on the unpaid Principal Sum on a simple interest basis
at a fixed rate of 1.0% per annum commencing on the First Advance Date until the
Maturity Date. In the event Borrower exercises the Extension Option, interest shall

accrue on the unpaid Principal Sum on a simple interest basis as follows: (i) at a fixed
rate of 7.0% per annum commencing on the fifth (5th) anniversary of the First Advance
Date; and (ii) a fixed rate of 10.0% per annum commencing on the sixth (6th) anniversary
of the First Advance Date until the Maturity Date. Such interest will not be compounded
or capitalized. Interest payments shall be paid to the Lender in arrears by the Borrower by
way of annual payments on December 1 of each year during which any portion of the
Principal Sum is outstanding. Interest shall be computed on the basis of the actual
number of days elapsed and a year of 365 days commencing on the First Advance Date.
(c)
All sums payable hereunder shall be payable in lawful money of the
United States and shall be applied first to accrued and unpaid interest and then in
payment of the Principal Sum.
(d)
Without in any way limiting Lender's rights and remedies hereunder and
under the Note, after the occurrence of an Event of Default, and until such time such
Event of Default shall have been cured or waived, Advances and other obligations
hereunder shall bear interest at the rate of 5% per annum (the Default Interest Rate) or
such lesser rate permitted by applicable law, if the Default Interest Rate would violate
applicable law. This clause (d) shall not be given effect to the extent that the application
of the Default Interest Rate would in any way alter or amend the calculations of the
Business Plan included in the Private Placement Memorandum.
3.
Place of Payment. The Principal Sum together with and all accrued and unpaid
interest thereon shall be payable at the Lender's principal executive offices at
[______________], or at such other place as the Lender, from time to time, may
designate in writing.
4.
Prepayment. The Borrower shall be prohibited from prepaying the Principal Sum,
in whole or in part, if such prepayment would jeopardize any of the Lenders limited
partners capacity to be admitted to the United States of America as unconditional lawful
permanent residents with their spouses and unmarried, minor children pursuant to 8
U.S.C. 1153 (b)(5)(A) - (D), INA 203 (b)(5)(A) - (D); the Departments of Commerce,
Justice and State, the Judiciary, and Related Agencies Appropriations Act of 1993, Pub.
L. No. 102-395, section 610, as amended; or 8 U.S.C. 1186b, INA 216A, as any of
the foregoing may be amended. Subject to the foregoing, any portion of the Principal
Sum that is prepaid shall be accompanied by any and all interest accrued but unpaid
thereon.
5.
Presentment. The Borrower hereby waives diligence, demand, presentment for
payment, protest and notice of protest, notice of acceleration, and all other notices or
demands of any kind.
6.
Rights and Remedies. The rights and remedies granted or available to the Lender
with respect to the obligations of the Borrower evidenced by this Note are set forth in the
Agreement, and the Lender may exercise the respective rights, options, and remedies
provided for in the Agreement, or otherwise available at law or in equity, all in
accordance with their respective terms. All rights and remedies granted or available to

the Lender by this Note and the Agreement shall be deemed concurrent and cumulative,
and not exclusive of any rights or remedies available at law or in equity. Notwithstanding
the foregoing, no such rights and remedies may be exercised if the exercise of such rights
or remedies would jeopardize any of the Lenders limited partners' capacity to be
admitted to the United States of America as unconditional lawful permanent residents
with their spouses and unmarried, minor children pursuant to 8 U.S.C. 1153 (b)(5)(A) (D), INA 203 (b)(5)(A)-(D); the Departments of Commerce, Justice and State, the
Judiciary, and Related Agencies Appropriations Act of 1993, Pub. L. No. 102-395,
section 610, as amended; or 8 U.S.C. 1186b, INA 216A, as any of the foregoing may
be amended.
7.
Costs and Expenses. In addition to all other sums payable under this Note, the
Borrower also agrees to pay to the Lender, on demand, all reasonable costs and expenses
(including attorneys' fees and legal expenses) incurred by the Lender in the enforcement
of the Borrower's obligations under this Note.
8.
Severability. If any provision of this Note is held to be invalid or unenforceable
by a court of competent jurisdiction, the other provisions of this Note shall remain in full
force and effect and shall be construed liberally in favor of the Lender in order to
effectuate the purposes and intent of this Note.
9.
Governing Law. This instrument shall be governed by and construed in
accordance with the laws of the State of Vermont, excluding its conflicts of laws rules.
BORROWER HEREBY AGREES TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF VERMONT AND WAIVES PERSONAL SERVICE OF
ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE
OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO BORROWER AT
THE ADDRESS SET FORTH ON THE SIGNATURE PAGE OF THE AGREEMENT
AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS
AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS,
POSTAGE PREPAID.
10.
Successors and Assigns. The provisions of this Note shall be binding upon and
inure to the benefit of the Borrower and the Lender and their respective heirs, executors
or administrators and assigns. The Borrower may not assign any of its rights and
obligations hereunder or any interest herein without the prior written consent of the
Lender. The Lender may not assign any of its rights and obligations hereunder and
interests without the prior written consent of the Borrower and subject to Section 11
below.
11.
Transfers. The Borrower shall maintain at its offices a register (the Register)
for the recordation of the names and addresses of the Lender and each holder of this
Note. Without limitation of any other provision of Section 10 above or this Section 11,
no transfer shall be effective until recorded in the Register. The entries in the Register
shall be conclusive absent manifest error and the Borrower may treat each person whose
name is recorded in the Register as a holder of this Note notwithstanding any notice to
the contrary. The foregoing provisions are intended to comply with the registration

requirements in the U.S. Treasury Regulation Section 5f.103-1 so that this Note is
considered to be in registered form pursuant to such regulation.
IN WITNESS WHEREOF, the Borrower has executed this Note as of the date
first above written.
CARINTHIA SKI LODGE LLC

By: _______________________
Name:
Title:
Address:
______________________
______________________
______________________
Telephone:_____________
Facsimile: _____________

SCHEDULE 1

Lender

Proportionate Interest

Carinthia Group 1, L.P.

____%

Carinthia Group 2, L.P.

____%

EXHIBIT B
FORM OF GUARANTY OF COLLECTION
For good and valuable consideration, Peak Resorts, Inc. a corporation with its registered
office in St Louis Missouri, and with a mailing address of 17409 Hidden Valley Drive,
Wildwood, Missouri 63025 (the Guarantor of Collection), absolutely and
unconditionally guarantees and promises to pay to Carinthia Group 1 L.P, a Vermont
limited liability company with a principal place of business in West Dover, Vermont and
Carinthia Group 2, L.P., a limited partnership organized under the laws of the State of
Vermont (Carinthia 2) (Carinthia 1 and Carinthia 2 each collectively referred to as a
Lender and collectively as the Lender), or its order, on demand, in legal tender of the
United States of America, the Indebtedness (as that term is defined below) of its affiliate
Carinthia Ski Lodge LLC, a limited liability company organized under the laws of the
State of Vermont, and with a mailing address of [_____________] (the Borrower),
owed to the Lender on the terms and conditions set forth in this Guaranty. Under this
Guaranty, the liability of the Guarantor is limited to the Indebtedness and the obligations
of the Guarantor are continuing until the Indebtedness is fully paid and satisfied and all
loan facilities comprising the Indebtedness are expired or terminated.
1.
Defined Terms. The following words shall have the following meanings when
used in this Guaranty:
(a)
Guaranty shall mean this Guaranty of Collection made by the Guarantor
for the benefit of the Lender.
(b)
Indebtedness shall mean all of the Borrower's liabilities, obligations,
debts, and indebtedness to the Lender that are incurred in connection with a loan in the
maximum principal amount of $22,000,000 pursuant to that certain Loan Agreement
among each Lender and the Borrower of even date herewith (the Loan Agreement) and
evidenced by that certain promissory note payable to the Lender dated of even date
herewith (the Note), or arising out of the various Related Documents as that term is
defined below.
(c)
Related Documents shall mean and include without limitation any other
instruments, agreements and documents executed by the Borrower at the Lender's request
contemporaneously hereof in connection with the Loan Agreement and the Note.
2.
Guaranty. The Guarantor guarantees to the Lender full and prompt collection of
up to the principal amount due under the Note and all accrued and unpaid interest
thereon. This Guaranty is a guaranty of collection only, and not a guaranty of payment.
As such, the Lender in accepting this Guaranty acknowledges that upon
(i) the
Borrowers failure to make a payment when the same shall be due and owing to the
Lender in respect of the Indebtedness and (ii) lawful acceleration of the Indebtedness, the
Lender will (a) resort first directly against the Borrower and fully exhaust any and all
legal remedies existing or available and shall have failed to collect the full amount of the

Indebtedness before proceeding against Guarantor; and (b) give notice of the terms, time,
and place of any public or private sale of collateral held, if any, by the Lender and
comply with any other applicable provisions of the Uniform Commercial Code as
adopted in Vermont, or any other applicable law. This Guaranty will take effect when
received by the Lender without the necessity of any acceptance by the Lender, or any
notice to the Guarantor or to the Borrower, and will continue in full force until all
Indebtedness incurred or contracted before receipt by the Lender of any notice of
revocation shall have been fully and finally paid and satisfied and all other obligations of
the Guarantor under this Guaranty shall have been performed in full. Guarantor hereby
agrees that it shall provide to [____________], as agent of the limited partners of the
Lender (the Agent), such quarterly and annual financial statements and operational
reports as it may provide to its principal lender as promptly as reasonably practicable
following the preparation thereof.
3.
Representations and Warranties. The Guarantor represents and warrants to the
Lender, at the time of execution of this Guaranty and as of the time of each drawing
under or other utilization of the loan as set forth and more particularly detailed in the
Loan Agreement, that to the best of its knowledge (a) no representations or agreements of
any kind have been made to the Guarantor which would limit or qualify in any way the
terms of this Guaranty; (b) the execution by Guarantor of the Guaranty and the incurring
of liability and indebtedness to the Lender does not and will not contravene any provision
contained in any other loan or credit agreement or borrowing instrument or contract to
which the Guarantor is a party; (c) the Guaranty has been duly executed and delivered by
the Guarantor, and constitutes valid and binding obligations of the Guarantor enforceable
in accordance with its terms; and (d) this Guaranty constitutes an independent obligation
of the Guarantor, notwithstanding its ownership interest in the Borrower.
4.
Governing Law. This Guaranty is conclusively deemed to be made under and for
all purposes to be governed by and construed in accordance with the laws of the State of
Vermont. In relation to any legal action or proceedings arising out of or in connection
with this Guaranty, the Guarantor submits to the jurisdiction of the courts of the State of
Vermont, as the Lender may elect, and to the extent permitted by law, waives any
objection to such legal action or proceedings in such courts on the grounds of venue or on
the grounds that such legal action or proceedings have been brought in an inconvenient
forum. These submissions are made for the benefit of the Lender and shall not affect the
right of the Lender to take legal action or proceedings in any other court of competent
jurisdiction nor shall the taking of legal action or proceedings in any court of competent
jurisdiction preclude the Lender from taking legal action or proceedings in any other
court of competent jurisdiction (whether concurrently or not). The Lender and the
Guarantor hereby waive the right to any jury trial in any action, proceeding or
counterclaim brought by either the Lender or the Guarantor against the other.
5.
Miscellaneous. The following miscellaneous provisions are a part of this
Guaranty:

(a)
Amendments. This Guaranty 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.
(b)
Attorneys' Fees; Expenses. The Guarantor agrees to pay upon demand the
Lender's reasonable costs and expenses, including reasonable attorneys' fees and the
Lender's reasonable legal expenses, incurred in connection with the successful
enforcement of this Guaranty. The Guarantor also shall pay all court costs and such
additional fees as may be directed by the court in connection with the successful
enforcement of this Guaranty.
(c)
Notices. All notices required to be given by either party to the other under
this Guaranty shall be in writing and shall be effective when actually delivered or one (1)
business day after being deposited with a nationally recognized overnight courier with
receipt confirmed, or three (3) business days after being deposited in the United States
mail, first class postage prepaid with return receipt requested, 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.
(d)
Interpretation. 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.
(e)
Waiver. The Lender shall not be deemed to have waived any rights under
this Guaranty unless such waiver is given in writing and signed by the Lender. No delay
or omission on the part of the Lender in exercising any right shall operate as a waiver of
such right or any other right. A waiver by the Lender of a provision of this Guaranty shall
not prejudice or constitute a waiver of the Lender's right otherwise to demand strict
compliance with that provision or any other provision of this Guaranty. No prior waiver
by the Lender, nor any course of dealing between the Lender and the Guarantor, shall
constitute a waiver of any of the Lender's rights or of any of the Guarantor's obligations
as to any future transactions. Whenever the consent of the Lender is required under this
Guaranty, the granting of such consent by the 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 the Lender. Any
amendment or waiver by the Lender of any provision of this Guaranty shall require the
consent of limited partners in the Lender that own not less than a majority of the limited
partnership interests then outstanding.
(f)
Lender's Records. Every certificate issued under the hand of an officer of
the Lender purporting to show the amount at any particular time due and payable to the
Lender, and covered by this Guaranty, shall be received as conclusive evidence as against

the Guarantor that such amount is at such time so due and payable to the Lender and is
covered hereby.
(g)
Change. The Guarantor agrees that no change or changes in the name or
names of the Borrower or Guarantor, no change or changes in the objects, capital or
enabling documents of the Borrower or the amalgamation of the Borrower with any other
entity, and no other change or changes of any kind whatsoever shall in any way affect the
liability of the Guarantor, either with respect to transactions occurring before or after any
such change or changes, and the Lender shall not be obliged to inquire into powers of the
Borrower, its officers, directors or agents acting or purporting to act on its behalf, and
monies, advances, renewals or credits in fact borrowed or obtained by the Borrower from
the Lender and all liabilities incurred by the Borrower from the Lender in professed
exercise of such powers shall be deemed to form part of the Indebtedness hereby
guaranteed notwithstanding that such borrowing, obtaining of monies, advances,
renewals or credits, or incurring of such liabilities shall be in excess of the powers of the
Borrower, or its officers, directors or agents, or be in any way irregular, defective or
informal.
(h)
Successors and Assigns. The Guarantor may not delegate any of its
obligations hereunder. The provisions of this Guaranty shall be binding upon any
successors of the Guarantor.
(i)
Sharing of Payments. By its acceptance of this Guaranty, each Lender
agrees to share in all payments made under this Guaranty in accordance with its
Proportionate Interest set forth on Schedule 1 of the Note.

THE UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE

PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN
ADDITION, THE GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS
EFFECTIVE UPON THE GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO THE LENDER AND THAT THE GUARANTY WILL CONTINUE
UNTIL TERMINATED. NO FORMAL ACCEPTANCE BY THE LENDER IS
NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS
DATED AND SHALL BE EFFECTIVE AS OF [___________], 2014,
NOTWITHSTANDING THE DATE OF ANY OF THE RELATED DOCUMENTS.

GUARANTOR OF COLLECTION
PEAK RESORTS, INC.

By: ________________________
Name:
Title:

Address:
______________________
______________________
______________________
Facsimile: _____________

Signed, acknowledged and delivered in the presence of:

____________________________________
Authorized Officer

20024486v.3

EXHIBIT 13
ECONOMIC AND JOB CREATION IMPACTS STUDY

May 2, 2014
Douglas Hauer | Member
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center, Boston, MA 02111
To Whom This May Concern:
I submit this letter as a statement of confirmation on the results of the job impact analysis (of
November 2012) as relates to the proposed business plan (October 2012, Rapid USA Visa, Inc.)
for improvements to Mt. Snow Resort.
Specifically, the job impacts were measured for two development elements, one (the Carinthia
Ski Lodge, providing skier services) which would complete within a 2 year interval, and the
second within 3 years (the West Lake Snow making reservoir). On-site development labor for
the ski lodge are excluded from the Vermont job impacts due to the limited duration of that
project. Both project elements will require limited sourcing of goods and services from the
surrounding Northeast regional economy as well as from other U.S. vendors. The job impacts
for the development phase are as follows:
Carinthia Ski Lodge

REGION
Vermont
REST OF NO'EAST
Rest of U.S.

yr1
139
17
17

yr2
254
31
30

West Lake Reservoir

yr3
0
0
0

yr1
146
27
33

yr2
186
35
41

All Development

yr3
111
21
25

yr1
285
44
49

yr2
440
66
72

yr3 Job years

111
836
21
130
25
145

A job impact analysis of the business plans forecasted incremental visitor-generated revenues
was also developed for a 4-county southern Vermont region based upon the first two years of
Operations of the ski lodge. The job impacts are associated with visitor-spending on food &
beverages, assorted retail, equipment rental, and lift tickets (passes). The job impacts for the
southern Vermont 4-county economy are as follows:

155 Federal Street, Suite 600, Boston, Massachusetts 02110 USA

telephone 617.338.6775

fax 617.338.1174

www.edrgroup.com

IMPLAN Sector
Description
413 - Eating & drinking establishments Meals & Beverages
329- Retail General Merchandise
Retail & Convenience Store
Ski rental
407 - Recreational Centers
Lift passes & Tickets
Windsor Co. & 3 other So. VT
counties
elswhere in Vermont
Vermont regional Center

Total Job Impacts

across all sectors in
Southern VT
YR1
YR2
52
54
8
8
88
92

148

154

1
149

1
155

Respectfully submitted,

Lisa Petraglia
Vice-President

155 Federal Street, Suite 600, Boston, Massachusetts 02110 USA

telephone 617.338.6775

fax 617.338.1174

www.edrgroup.com

Job Generating Impacts from

The Carinthia Group Projects at Mount
Snow,
A project within the Mount Snow Resort Master Plan
Prepared for:

Mount Snow Resort, Ltd.

West Dover, Vermont

Prepared by:
Economic Development Research Group, Inc.
155 Federal Street, 6th Floor, Boston, MA 02110

November 12, 2012

i|Page

Table of Contents
Executive Summary .............................................................................................. ii
Methodology & Assumptions ................................................................................1
Introduction ..............................................................................................................1
Methodology ............................................................................................................1
Jobs Multiplier Analysis using the IMPLAN Model ..........................................1
Isolating the Non-direct Job Impacts for the Development Phase. .....................3
Visitor-spending related Impacts .........................................................................4
Visitor-spending the First Two Years .................................................................4
Development-related Impacts ...............................................................................6
Development Phase Expenditure for the Carinthia Ski Lodge ................................6
Total (non-direct) Job Impacts for the Vermont Regional Center and
surrounding Economies .......................................................................................8
Development Phase Expenditure for the West Lake Reservoir project .................11
Total (non-direct) Job Impacts for the Vermont Regional Center and
surrounding Economies .....................................................................................16
Job Impacts from combined Development Phases ................................................20
Conclusions ...........................................................................................................21
Appendix 1: Firm Overview ..................................................................................22
Appendix 2: Carinthia Projects Group 1 Business Plan ........................................26
Appendix 3: IMPLAN Type SAM Employment Multiplier Data 3-digit NAICS
Aggregation, 2010..................................................................................................28

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page i

ii | P a g e

EXECUTIVE SUMMARY
Overview: The purpose of this assessment was to measure the job generating
effects from two proposed projects (the Carinthia Group 1 projects) at Mount
Snow Ski Resort in southern Vermont. Specifically, the expansion proposal
relates to building an additional ski lodge (Carinthia Lodge, and a reservoir
project (West Lake) for expanded snow making capabilities. Funding for the
proposed expansion is to be in the form of $52 million from foreign investors
through the USCIS EB-5 Visa Program, and additional investment of $14 million
from the resort owners, Mount Snow, Ltd.
Methodology: Four basic steps were used to develop this assessment:
1. Analyze the Business Plan data for incremental annual operations
(visitor activity and spending) in each of the first two years associated
with the new lodge, as well as for the initial Development Phase Capital
Expenditure
2. Conduct multiplier analysis - relevant aspects of the business plan for
each phase are applied to a geographically appropriate multi-region
IMPLAN economic impact model (vintage 2010)
3. Identify total impacts for each of the first two years of operation on the 4county southern Vermont study region1, with spillover job impacts for rest
of Vermont; and the total jobs during the development phase for the
Vermont economy, the rest of the Northeast regional economy, and the
balance of the U.S. economy.
4. Identify non-direct2 job impacts for the development phase for the relevant
study region (state of Vermont) for the remaining Northeast regional
economy3, and for the balance of the U.S. economy.

Comprised of Windham, Windsor, Rutland, and Bennington counties.

Non-direct is defined as the set of impacts that result from
indirect and induced transactions in the study region initiated by the project activity.
3 The Northeast region apart from Vermont includes Maine, New Hampshire, New York, Rhode
Island, Connecticut, and Massachusetts
1
2

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page ii

iii | P a g e
Key Findings: Summarized in Exhibit ES-1 are the job impacts related to the
capital expenditure into the Project, and for each of the first two years of annual
additional visitor activities associated with the new facilities.
Exhibit. ES-1 Job Generation effects of Carinthia projects at Mt. Snow
Phase ==>
Study Region =>

Operations
4-county Southern VT*
Year 1

Visitor spending, mil.$2012

Construction Budget,mil. 2012$ (VT
purchases)**
direct Jobs
non-direct Jobs
Job impacts in Study Region
rest of Vermont
rest of Northeast
rest of U.S.
All Regions_Job Impact

Development Phase
State of Vermont
Ski Lodge
Snowmaking Reservoir^
2 Years
3 Years

Year 2
4.98 $

not applicable
148
148
1
not applicable
not applicable
149

5.16

not applicable
154
154
1
not applicable
not applicable
155

$27.6 (79%)
not applicable
393
393
not applicable
48
47
488

$37.6 (80%)
not applicable
443
443
not applicable
82
99
624

* includes Windham, Windsor, Rutland, and Bennington counties

** excludes land contribution, and working capital
^Development phase non-direct job impacts in southern VT region include contracted
Construction laborers on-site for the West Lake Reservoir project
Source: IMPLAN multi-region impact model

The remainder of this report presents details used to assemble this analysis.
Relevant portions of the Carinthia Group 1 Projects Business Plan are included in
an Appendix to this document.

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page iii

Methodology & Assumptions

METHODOLOGY &
ASSUMPTIONS
Introduction
Mount Snow, Ltd. retained Economic Development Research Group, Inc. (EDR
Group) of Boston, Massachusetts to develop the (jobs) impact analysis of its
proposed development of a new skier services building (the Carinthia lodge) and
snowmaking reservoir (West Lake) for the Mount Snow Resort in West Dover,
Vermont. Key staff of EDR Group have earned a national reputation for
conducting economic impact analyses using various economic impact analysis
data sets and models (REMI and IMPLAN models, RIMS data) with over 56 staff
years of experience among its three lead staff. (For more about EDR Group refer
to the end of the report).

Methodology
The following sections describe the jobs impact estimation approach used in
conjunction with information from the Carinthia Group Projects Business Plan to
provide job impact counts that conform to the EB-5 investment program criteria.

Jobs Multiplier Analysis using the IMPLAN Model

Both USCIS and the chief economist of the Department of Homeland Security
have from time to time acknowledged familiarity and suitability of several
methodologies for estimating the job impacts associated with EB-5 project
proposals. Given the more recent interpretation of regulations which have
emphasized consideration of indirect job impacts created beyond the economic
boundary of the regional center (in this case the state of Vermont), the IMPLAN
software model (MIG, Stillwater, MN) offers advantages (relative to other
methods) due to its multi-region impact analysis capabilities (added in early
2010) while remaining a cost-effective system to use, with ample customer
support and a proven track-record. As such this analysis was duly developed
using the IMPLAN impact software (the internally calculated Output multiplier
data, defined as Type SAM4, is derived from region-specific data for 2010).
SAM stands for social accounting matrix and the concept reflects a multiplier that accounts for
indirect and induced transactions as well as monetary transfers between institutions (consisting
predominantly of income stratified households and state/local/Federal government entities). The
reference to Output in describing the multiplier makes an important distinction to RIMSII data.

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 1

Methodology & Assumptions

Those analysis model for the eventual additional visitor operations was structured
around the following 2-region: a combined 4-county southern Vermont territory,
comprised of Windsor (where West Dover is), Windham, Bennington and Rutland
counties, the rest of Vermont region. For the development phase analysis for
sourcing construction supplies, services and equipment, a 3-region model was
configured to represent the Vermont economy, the rest of the Northeast region5,
and the rest of U.S. region. The IMPLAN multi-regional model starts with the
direct assignment of (development or operations-related) spending stimulus posed
to the specific study, and for budget expenditures that are either not procured or
entirely procured from the study area (whether certain manufactured items or
labor supply), we assign the respective amounts to the other relevant regions. The
IMPLAN models trade-flow logic (based upon county-to-county historical $
flows for the entire U.S) then creates an allocation of subsequent spillover
multiplier effects to all regions under consideration. The pattern of sourcing is a
balance between proximity for trading, and scale of the trading partner.
For both phases, data from the business plan (in 2012$ basis) were mapped to
corresponding industry (supplying) sectors (IMPLAN flexibly allows for the user
to introduce the project data in the basis they were developed, and within the
analysis IMPLAN deflates to 2010$ while solving, and then re-scales results upon
viewing results).
The following caveats are made in moving from the business plan to the IMPLAN
model runs: aspects of visitor spending (retail purchases on resort) were
margined within IMPLAN, for aspects of the development budget IMPLANs
regionally-estimated local purchase coefficient by industry were relied upon to
change line item expenditures into some percent of local sales. For the Carinthia
Lodge project 79 percent of the budget is sourced from Vermont, and for the West
Reservoir project it is 80 percent from Vermont, with 10 percent of budget
sourced from surrounding northeast states, and the remaining 10 percent from rest
of U.S. for specialized equipment6. What remains after the fulfillment by local
sales is eligible for spill-over fulfillment in the surrounding economies.

The latter describes the areas response when $1 of final demand for specific commodities, or
industrial product emerges, whereas IMPLAN describes he response when $1 of sales emerges
within the region for a specific commodity, or industrial product.
5 The Northeast region apart from Vermont includes Maine, New Hampshire, New York, Rhode
Island, Connecticut,, and Massachusetts
6 From Indiana and Colorado according to Mt. Snow Resort engineers.

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 2

Methodology & Assumptions

Isolating the Non-direct Job Impacts for the Development Phase.

Pursuant to a USCIS memorandum dated December 11, 2009, USCIS has
interpreted that the full time employment requirement must exclude jobs that are
intermittent, seasonal or transient in nature. The business plan indicates whether
there are any direct employees of the newly formed Commercial enterprise for the
development phase. The IMPLAN model will identify the region-specific job
impacts related to the construction activities. In input-output multiplier analysis,
the direct construction sector (and other supplying sectors for the budget) effects
(sales, jobs) are not the same concept of direct as intended in the USCIS
regulation. However this analysis does refrain from counting construction-sector
job impact in the first-round of input-output effect when the development phase
on a project is less than two years.

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 3

Visitor-spending Related Impacts

VISITOR-SPENDING RELATED
IMPACTS
The incremental, annual visitor-spending, for YR1 and YR2 of the completed
Carinthia Lodge, is analogous to gauging annual operations of the new visitorserving facility. To develop the job impacts of this phase of the proposal we
examine how much extra visitor spending is expected at Mount Snow, and what is
that money spent on. Once we answer these questions using information in
(behind) the business plan we introduce this profile of spending into the Southern
VT region of the IMPLAN modeling system.

Visitor-spending the First Two Years

The amount of extra visitor-spending to the resort is shown (with its allocation
and IMPLAN sector assignment) in Exhibit 2-1.
Exhibit 2-1: Additional Visitor-spending at Mount Snow
Region: Southern Vermont centered on Windsor Co.
IMPLAN Sector
Description
413 - Eating & drinking establishmentsMeals & Beverages
329- Retail General Merchandise
Retail & Convenience Store*
Ski rental
407 - Recreational Centers
Lift passes & Tickets
Total added (mil. 2012$)
Total added (mil. 2010$)

New Visitor Spend

YR1
YR2
$2.28
$2.34
$0.55
$0.57
$0.26
$0.27
$1.89
$1.98
$4.98
$5.16
$4.42

*These dollar amounts were margined within the IMPLAN analysis model.

$4.59

The result (in terms of total employment impacts) of combining these visitorspending amounts with the IMPLAN employment multipliers are shown next in
Exhibit 2-2.

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 4

Visitor-spending Related Impacts

Exhibit 2-2: Results from Visitor-spending in 4-county Study Region Total, direct, and Non-direct Jobs

Region: Southern Vermont centered on Windsor Co.

IMPLAN Sector
Description
413 - Eating & drinking establishmentsMeals & Beverages
329- Retail General Merchandise
Retail & Convenience Store*
Ski rental
407 - Recreational Centers
Lift passes & Tickets

Employment
Total Job Impacts
IMPLAN's Job equivalent multiplier So. VT across all sectors in
on added Visitor Spend region (detailed
Southern VT
440-sectors)
YR1
YR2
YR1
YR2
41
42
1.28
52
54
6
6
1.26
8
8
75

78

1.18

122
126
measured through
IMPLAN's trade flow
linkage between
southern VT and the rest Non-direct Jobs
rest of VT
of state ====>
for all Vermont

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page

88

92

148

154

1
149

1
155

Construction-related Impacts

DEVELOPMENT-RELATED
IMPACTS
A similar treatment (as presented in Ch. 2) is followed to estimate the job impacts
for the development phase with two exceptions. First, only the non-direct
employment impacts are of consequence. The non-direct employment impacts
pertain to any job that is related to the project that is not employed by the EB-5
Commercial Enterprise. Therefore the term direct impact within the USCIS
regulatory language is different from what direct means within the input-output
economic multiplier analysis. Since there are no commercial enterprise
employees proposed for the development phase, the IMPLAN jobs impacts that
result from allocating the development budget over the various supplying
industries will all be non-direct jobs. Second, when a projects development
interval is less than two years in duration, the first-round of construction sector
jobs are omitted from the job generation results.

Development Phase Expenditure for the

Carinthia Ski Lodge
Beginning with the Mount Snow Resort business plan, information pertaining to
the 1+-year construction schedule and budget is assessed and assigned to
industries that provide the goods/service needed, and then we verify (a) the
presence of the industry within the Vermont regional center economy, and (b) the
scale (or size) of the Vermont industry and whether it can plausibly meet the
demand from the project (using the IMPLAN data for the VT regional center
2010). Exhibit 3-1 presents the construction spending detail by year and
assignment into an IMPLAN sector for the VT economy. Equipment and fit-up
expenditures are treated as being manufactured outside of the VT economy but
accessed through VT wholesale distribution channels and earning the 15 percent
mark-up in-state. The larger surrounding supplier shed represented by the rest of
Northeast region provides a majority of these manufactured items, and the
remaining balance from the rest of U.S. region.

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 6

Construction-related Impacts

Exhibit 3-1: Capital expenditure for the Proposed Carinthia Lodge

CARINTHIA SKI LODGE Project
$22M FOREIGN FUNDS; $6M PRIV. (2012$)

annual schedule=>
$27,653,077

YR1
35%
$9,772,255

YR2
65%
$17,880,822

$828,547
$9,142,707
$595,968
$331,520
$757,500
$853,660

$662,838
$2,011,396
$0
$0
$378,750
$426,830

$165,709
$7,131,311
$595,968
$331,520
$378,750
$426,830

39_M&R construct non-res

319_Wholesale Distributors
319_Wholesale Distributors
319_Wholesale Distributors

$577,500
$231,000
$536,175
$400,500

$0
$0
$0
$0

$577,500
$231,000
$536,175
$400,500

Ancillary Costs (temp office, admin, equip, access

roads, hydrants, utilities)
(temp office, admin, equip) 322_Retail-electronics
(access roads, hydrants, utilities) 33_Sewer,Water contracting
Arch & Engr,Envir/Permitting 369_Arch/Engr

$7,398,000
$150,000
$1,919,707
$2,117,175

$5,792,441
$150,000
$1,919,707
$2,117,175

$1,605,559
$0
$0
$0

$2,818,332

$1,409,166

$1,409,166

$392,786

$196,393

$196,393

$500,000
$4,000,000
$1,500,000

$500,000
$0
$0

$0
$4,000,000
$1,500,000

Preliminary Sitework
CONSTRUCTION Non-res COMMERCIAL STRCTR
UPGRADED DESGN & BUILDOUT
Sewer hookups
Water storage (build & rel. infrs.)
Relocate & upgrade ELEC Transformers
SOLAR WORKS - Lighting, (walkways, fire lanes,
etc.)

FURN & FIXT _wholesale receipts

OFFICE EQUIP/PHONE SYS;NETWORK, TERMINALS

IMPLAN sector
19_Support activities Agr& Forestry
34_New non-res Comm.
370_Specialized Design srvcs
33_Sewer,Water contracting
33_Sewer,Water contracting
39_M&R construct non-res

Management fees _admin & supervsn 381_Mngmnt of Companies

Misc. admin . Expenses 384_Office Admin srvcs
PRIVATE FUNDS into the Lodge project
Infrstructure & related groundwork
PROJECT REL. COSTS - Carinthia Terrain Trail work
Existing Building & Environmental Improvements

33_Sewer,Water contracting
19_Support activities Agr& Forestry
375_Envir. consultg

*the budget excludes land contribution payments and working capital

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 7

Construction-related Impacts

Total (non-direct) Job Impacts for the Vermont Regional Center

and surrounding Economies
For Carinthia Lodge development phase supplying industries (contractors,
vendors) that are present in Vermont, the expenditure amounts from Exhibit 3-1
(in 2012$) are converted (within the IMPLAN model) to initial job requirements
by sector, and those then are applied to the employment multipliers shown above
to give the total job impacts for Vermont, shown next in Exhibit 3-2. None of the
jobs estimated in the IMPLAN analysis represent a job employed by the EB-5
Commercial enterprise, therefore all of the impacts from building the Carinthia
Lodge represent non-direct jobs. However, since this project is expected to take
less than two years to complete, the first-round of construction sector jobs are
excluded from the results presented.

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 8

Construction-related Impacts

Exhibit 3-2: Vermont Job Impacts from Carinthia Lodge Development

CARINTHIA SKI LODGE Project

initial round
Job
equivalent

IMPLAN sector
Preliminary Sitework
CONSTRUCTION Non-res COMMERCIAL
STRCTR
UPGRADED DESGN & BUILDOUT
Sewer hookups
Water storage (build & rel. infrastr)
Relocate & upgrade ELEC Transformers
SOLAR WORKS - Lighting, (walkways,
fire lanes, etc.)

FURN & FIXT _wholesale receipts

OFFICE EQUIP/PHONE SYS;NETWORK,
TERMINALS

YR1

YR2

VT
Employment
Multiplier
(2010)

Total Job Impact

YR1

YR2

Sales-per
-Worker

19_Support activities Agr&

Forestry
34_New non-res Comm.

$28,713

23

1.194

28

$114,193

18

62

1.601

28

100

370_Specialized Design srvcs

33_Sewer,Water contracting
33_Sewer,Water contracting
39_M&R construct non-res

$97,452
$113,551
$113,551
$105,011

0
0
3
4

6
3
3
4

1.471
1.559
1.559
1.641

0
0
5
7

9
5
5
7

39_M&R construct non-res

$105,011

1.641

319_Wholesale Distributors

$139,958

1.727

319_Wholesale Distributors
319_Wholesale Distributors

$139,958
$139,958

0
0

4
3

1.727
1.727

0
0

7
5

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page

Construction-related Impacts

Ancillary Costs (temp office, admin, equip, access roads, hydrants, utilities)
(temp office, admin, equip)
(access roads, hydrants, utilities)
Arch & Engr,Envir/Permitting
Management fees _admin & supervision
Misc. admin . Expenses
PRIVATE FUNDS into the Lodge project
Infrastructure & related groundwork
PROJECT REL. COSTS - Carinthia Terrain
Trail work
Existing Building & Environmental
Improvements

322_Retail-electronics
33_Sewer,Water contracting
369_Arch/Engr
381_Mngmnt of Companies

$89,814
$113,551
$88,683
$162,548

2
17
24
9

0
0
0
9

1.635
1.559
1.744
2.312
1.811

3
26
42
20
0
4

0
0
0
20
0
4

384_Office Admin srvcs

$82,877

33_Sewer,Water contracting
19_Support activities Agr&
Forestry
375_Envir. consultg

$113,551
$28,713

4
0

0
139

1.559
1.194

7
0

0
166

$92,034

16

1.781

29

170
36

375
116

133

260

16

32

16

31

166

322

Total for VT
# as
Construction
eligible for
VT
elsewhere
Northeast
elsewhere
U.S.
All regions

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page

10

Construction-related Impacts

As a result of the Carinthia Lodge development activity, there are approximately

133 eligible jobs impacted in YR1 for Vermont region, and 260 in YR2. Another
32 jobs are contributed in YR1 and 63 additional for YR2 from the rest of the
Northeast region, and from the remainder of the U.S. supplier bases. These nondirect jobs are created extra-regional to Vermont as a result of cycles of supplier
transactions to support the broader VT economy as it is stimulated downstream of
the project).

Development Phase Expenditure for the West

Lake Reservoir project
Beginning with the Mount Snow Resort business plan, information pertaining to
the 2+-year construction schedule and budget is assessed and assigned to
industries that provide the goods/service needed, and then we verify with
information from Mount Snow engineers where specialized equipment will be
sourced from. Exhibit 3-3 presents the construction spending detail by year and
assignment into an IMPLAN sector for the VT economy, and the rest of U.S.
region. Equipment expenditures for pump houses are not manufactured in VT
will be accessed through VT wholesale distribution channels and earning the 15
percent mark-up in-state. The larger surrounding supplier shed represented by the
rest of U.S. region (in particular Colorado and Indiana) provides a majority of
these manufactured items.

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 11

Construction-related Impacts

Exhibit 3-3: Capital expenditure (2012$ basis) for the Proposed West Lake Reservoir
WESTLAKE RESERVOIR

% of
$
$
Expense as Equipment Equipment
Equipment
From
From
Northeast elsewhere
in U.S.

Line item spend

annual
schedule=>
$30M FOREIGN FUNDS;
$8M PRIV. (2012$)

INITIAL SET UP;SITE

PREP;EXCAV ETC

YR1

YR2

YR3

33%

42%

25%

$37,499,999 $12,375,000 $15,750,000 $9,375,000

Sector
Assignment
19_Support act
agr& forestry

$1,621,000

$534,930

$680,820

$405,250

$0

$0

Install torrent
pumping/snowmakinggrooming capabilities

33_Sewer,water
contracting

$2,432,210

$802,629

$1,021,528

$608,053

100%

$0 $2,432,210

install L1 Carpet &

accessories

33_Sewer,water
contracting

$417,521

$137,782

$175,359

$104,380

50.3%

$0

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page

12

$178,511

Construction-related Impacts

estb. Carinthia pump

houses

36_New other
non-res
Construction

$1,208,533

$398,816

$507,584

$302,133

8.2%

$0

$0

Develop Air Center

36_New other
non-res
Construction

$1,210,000

$399,300

$508,200

$302,500

5.7%

$7,759

$43,968

Ski hill pipelines, upgrade

lift & relocation work

33_Sewer,water
contracting

$1,594,153

$526,070

$669,544

$398,538

0%

$0

$0

install Ski Baba magic

carpet

36_New other
non-res
Construction

$576,380

$190,205

$242,080

$144,095

0%

$0

$0

Trail upgrades prior to all

installation work

19_Support act
agr& forestry

$832,500

$274,725

$349,650

$208,125

0%

$832,500

$0

West Lake reservoir- site

prep, blasting

30_Support
activities _Othr
Mining

$5,488,000

$1,811,040

$2,304,960 $1,372,000

0%

$0

$0

Coldbrook Piping road

works, substructures,
piling

36_New other
non-res
Construction

$8,465,652

$2,793,665

$3,555,574 $2,116,413

1%

Road Closure costs (model

432_S/L Other

$150,000

$49,500

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

$63,000
Page

$37,500

13

0%

$2,158,741 $1,100,535

$0

$0

Construction-related Impacts

as Local govt spending)

GEN INFRASTRUCTURE
Arch &
Engr,Envir/Permitting

33_Sewer,water
contracting
369_Arch/Engr

$500,000

$165,000

$210,000

$125,000

0%

$0

$0

$1,104,000

$364,320

$463,680

$276,000

0%

$0

$0

$3,863,100

$1,274,823

$1,622,502

$965,775

0%

$0

$0

$382,900

$126,357

$160,818

$95,725

0%

$0

$0

33_Sewer,water
contracting

$2,400,000

$792,000

$1,008,000

$600,000

0%

$0

$0

39_M&R
construct nonres

$3,600,000

$1,188,000

$1,512,000

$900,000

0%

$0

$0

Management fees _admin

& supervsn

381_Mngmnt of
Companies

Misc. admin . Expenses

384_Office
Admin srvcs

PROMOTER CONTRIB TO
PROJECT COSTS
On Mountain Snow
Making upgrades, pipe
installations, road works
POWER STATION
UPGRADES AND RELATED
COSTS
RESORT ENHANCEMENT
COSTS

Trail work, parking lot grading & improvements, building improvements, &
other general improvements to the resort.

infrastructure (25%) 33_Sewer,water

contracting
repair & maintenance 39_M&R

$500,000

$165,000

$210,000

$125,000

0%

$0

$0

$1,000,000

$330,000

$420,000

$250,000

0%

$0

$0

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page

14

Construction-related Impacts

construction(50%) construct nonres

trail work (25%) 19_Support
$500,000
$165,000
$210,000
activities Agr&
Forestry
*the budget excludes land contribution payments, contingency and working capital

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page

$125,000

15

0%

$0

$0

Construction-related Impacts

Total (non-direct) Job Impacts for the Vermont Regional Center

and surrounding Economies
For West Lake Reservoir development phase supplying industries (contractors,
vendors) that are present in Vermont, the expenditure amounts from Exhibit 3-3
(in 2012$) are converted (within the IMPLAN model) to initial job requirements
by sector, and those then are applied to the employment multipliers shown above
to give the total job impacts for Vermont, shown next in Exhibit 3-4. None of the
jobs estimated in the IMPLAN analysis represent a job employed by the EB-5
Commercial enterprise, therefore all of the impacts from building the
snowmaking reservoir represent non-direct jobs.

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 16

Construction-related Impacts

Exhibit 3-4: Vermont Job Impacts from West Lake Reservoir

WESTLAKE RESERVOIR

VT Spend
over 2+
years

Sales per
Worker
(IMPLAN
2010)

Initial
round of
Jobs*

VT
Employment
Multiplier
(2010)

Total Job
Impacts

$30M FOREIGN FUNDS; $8M PRIV.

(2012$)

INITIAL SET UP;SITE PREP;EXCAV ETC

VT sector transacted
with..
19_Support act agr&
forestry

$1,621,000

YR1

YR2

YR3

$28,713

56

1.19

22

28

17

Install torrent pumping/snowmakinggrooming capabilities

33_Sewer,water
contracting

$0 $113,551

1.56

install L1 Carpet & accessories

33_Sewer,water
contracting

$239,010 $113,551

1.56

estb. Carinthia pump houses

36_New other non-res

Construction

$1,109,433 $116,992

1.72

Develop Air Center

36_New other non-res

Construction

$1,158,273 $116,992

1.72

Ski hill pipelines, upgrade lift &

33_Sewer,water

$1,594,153 $113,551

14

1.56

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page

17

Construction-related Impacts

relocation work

contracting

install Ski Baba magic carpet

36_New other non-res

Construction

Trail upgrades prior to all installation

work

19_Support act agr&

forestry

West Lake reservoir- site prep, blasting

1.72

$28,713

1.19

30_Support activities
_Othr Mining

$5,488,000 $725,000

4.61

11

14

Coldbrook Piping -roadworks,

substructures, piling

36_New other non-res

Construction

$4,317,483 $116,992

34

1.72

19

25

15

Road Closure costs (model as Local govt

spending)
GEN INFRSTRCTR

432_S/L Other

$150,000 $252,847

3.12

33_Sewer,water
contracting
369_Arch/Engr

$500,000 $113,551

1.56

$88,683

12

1.74

$3,863,100 $162,548

22

2.31

17

22

13

$382,900 $82,877
$643,195 $139,958

4
5

1.81
1.73

3
3

3
3

2
2

Arch & Engr,Envir/Permitting

Management fees _admin & supervsn

381_Mngmnt of
Companies

Misc. admin . Expenses

VT distributors
PROMOTER CONTRIB TO PROJECT
COSTS

384_Office Admin srvcs

319_Wholesale Trade

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

$576,380 $116,992

$0

$1,104,000

Page

18

Construction-related Impacts

On Mountain Snow Making upgrades,

pipe installations, road works
POWER STATION UPGRADES AND
RELATED COSTS

33_Sewer,water
contracting
39_M&R construct nonres

$2,400,000 $113,551

21

1.56

11

14

$3,600,000 $105,011

32

1.64

17

22

13

$500,000 $113,551

1.56

$1,000,000 $105,011

1.64

17

1.19

146

186

111

27
33
206

35
41
262

21
25
156

RESORT ENHANCEMENT COSTS

Trail work, parking lot grading & improvements, building improvements, & other general
improvements to the resort.

infrastructure (25%) 33_Sewer,water

contracting
repair & maintenance construction(50%) 39_M&R construct nonres
trail work (25%) 19_Support activities Agr&
Forestry

$500,000

$28,713

Annual Job impacts in

VT =
.in rest of Northeast =
.in rest of U.S.=
All of
U.S.

The restatement of Vermont transactions into first-round jobs incorporates the sector-specific Output deflators from IMPLAN
to move from a 2012 dollar to the 2010 dollar basis the database is calibrated upon.

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page

19

Construction-related Impacts

Job Impacts from combined Development

Phases
The schedule of resulting job impacts from both the Carinthia Lodge development
and the West Lake reservoir project is as follows for the overall 2+ years of
construction. Note: the job impacts below preserve the exclusion of first-round
construction labor positions for the Carinthia Lodge.

ALL Development
REGION

yr1

yr2

yr3

VT

280

446

111

REST OF NO'EAST

43

66

21

rest of U.S.
All regions

48
371

72
584

25
157

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 20

Conclusions

CONCLUSIONS
The proposed Carinthia Ski Lodge and the West Lake snowmaking Reservoir
projects is expected to attract additional visitors to the Mount Snow resort and the
surrounding region. An examination of the first two years operating the new
facilities (vis a vis visitor-spending levels on-resort) as well as the 2-3 year
development phases will generate significant employment impacts for the 4county southern Vermont region as a result of visitor-spending, and for the state
as a whole during the construction interval.
Phase ==>
Study Region =>

Operations
4-county Southern VT*
Year 1

Visitor spending, mil.$2012

Construction Budget,mil. 2012$ (VT
purchases)**
direct Jobs
non-direct Jobs
Job impacts in Study Region
rest of Vermont
rest of Northeast
rest of U.S.
All Regions_Job Impact

Development Phase
State of Vermont
Ski Lodge
Snowmaking Reservoir^
2 Years
3 Years

Year 2
4.98 $

not applicable
148
148
1
not applicable
not applicable
149

5.16

not applicable
154
154
1
not applicable
not applicable
155

$27.6 (79%)
not applicable
393
393
not applicable
48
47
488

$37.6 (80%)
not applicable
443
443
not applicable
82
99
624

* includes Windham, Windsor, Rutland, and Bennington counties

** excludes land contribution, and working capital
^Development phase non-direct job impacts in southern VT region include contracted
Construction laborers on-site for the West Lake Reservoir project
Source: IMPLAN multi-region impact model

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 21

Appendix 1

Appendix 1: Firm Overview

Economic Development Research Group, Inc. (EDR Group)

is a consulting firm focusing specifically on applying state-of-the-art tools and

techniques for evaluating economic development performance, impacts and
opportunities. The firm was started in 1996 by a core group of economists and
planners who are specialists in models and tools for evaluating impacts of
infrastructure, technology workforce and natural resources on economic
development opportunities. Glen Weisbrod, President of EDR Group, is a former
board member of the Council for Urban Economic Development, now IEDC.
Lisa Petraglia, Director of Economic Research since joining the firm in 2000,
previously spent 8 years with REMI as head of Technical Client Consulting.
EDR Group provides both consulting advisory services and full-scale research
projects for public and private agencies throughout North America as well as in
Europe, Asia and Africa. Our work focuses on three issues:
Economic Impact Analysis -- How can my project/program affect economic
growth & attraction? How can I best target my efforts?
Market / Strategy Analysis -- How will I be affected by changes in the economy?
What should I do to respond to them?
Benefit / Cost Analysis -- What will be the economic benefits & costs of my
project / program?
What should I do to maximize net value?
The economic development work of EDR Group is organized in terms of five
areas: (1) Forecasting economic change and needs, (2) Opportunities assessment,
(3) Strategy development, (4) Benefit-cost analysis, and (5) Program evaluation.
Our firms work and clients have been nationally recognized for project
excellence, including a 2005 recognition award by the International Economic
Development Council, a 2002 award by the Northeast Economic Developers
Association and a 2000 award by the Government Research Association.

Mail.

Economic Development Research Group, Inc.

155 Federal Street, 6th Floor, Boston, MA 02110
Web.
www.edrgroup.com
Email. info@edrgroup.com
Tel
1.617.338.6775
Fax.
1.617.338.1174

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 22

Appendix 1

Economic Impact Modeling

Staff Experience
Note: Economic Development Research Group is certified as a national expert in
economic impact modeling for the IMPLAN Model (http://www.implan.com/
ConsultantsList/Default.asp or call the staff of IMPLAN at 651-439-4421) and also
for the REMI Model (see http://www.remi.com/Consulting/consulting.html or call
the staff of REMI at 413-549-1169). The firm is also expert at using the RIMS-II
model (you can call their staff at 202-606-5343 to confirm our expertise though
they do not formally published a list of experts).
Arizona
California

Colorado
Connecticut
Delaware
Florida
Georgia

Iowa
Illinois

Indiana
Kentucky

IMPLAN model of impacts of airports and aviation industries

IMPLAN model of economic impact of high speed rail
REMI model of impacts of LA regional transportation
program, also electric utility merger
RIMS-II model of impacts of electric utility merger
IMPLAN model of statewide airport impacts
IMPLAN model of regional economic development impacts of
utility rates
IMPLAN model of impact of casino
REMI model of Solar-energy adoption
IMPLAN model of impacts of new highway development
REMI model of impacts of building moratorium
REMI model of HSGT alternatives Atlanta-Chattanooga
IMPLAN model of impact of industrial development
IMPLAN model for 28 county regional impact of Airport
REMI model of impacts of energy policies
REMI model of impacts of railroad industry & urban renewal
scenarios
IMPLAN model of impacts of Performing Arts College
IMPLAN model of impacts of METRA New START
investments
REMI model of impacts of transportation, tourism and business
attraction
REMI model of impacts of transportation, tourism and business
attraction
IMPLAN model of impact of industrial infrastructure
development
IMPLAN model of impacts from Natural Gas Mining activities

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 23

Appendix 1

Louisiana

REMI model of impacts of transportation, tourism and business

attraction; RIMS-II critical review of impact reports on
behalf of Bureau of Governmental Research (BGR) in New
Orleans
REMI model of impacts of proposed civic / convention center
Maine
IMPLAN model for impacts of rail service
Maryland
IMPLAN model of impact of public infrastructure projects
Massachusetts REMI models of impacts of highway, Clean Air Act, and
Boston Harbor Cleanup Project, RGGI (advisory)
IMPLAN model of impacts of Logan International Airport
IMPLAN model of impacts of Bostons MFA expansion
IMPLAN model for impacts of an office/industrial park and
resort
IMPLAN model of impacts of developing Biomass-fired
energy generation
RIMS-II models of impact of airports (statewide) and
community health centers (statewide)
IMPLAN model of Visitor-spending at BCEC and Hynes
Convention Centers
IMPLAN model of Impacts of the Clark Art Institute
Expansion
Michigan
IMPLAN model of impacts of airports (statewide)
REMI model of impacts of gas pipeline
REMI model of MDOTs 5-Year Plan(s) through UMI
New Jersey
IMPLAN model analyses for Health Care Institute of NJ
(HINJ) and Bio-Tech Council of NJ (BCNJ)
New York State IMPLAN model of impacts of airports in North Country, also
industrial infrastructure
REMI model of impacts of army base and economic
diversification
RIMS-II model of impact of Lincoln Center
IMPLAN model of impacts from NYSERDA Main-tier RPS
contracts
IMPLAN model of impact of public infrastructure
Northeast US
PC/I-O model of impacts of high speed rail
Oregon
IMPLAN model of impacts for 90 airports
IMPLAN model for statewide impacts of air cargo
Pennsylvania
IMPLAN model of impacts from proposed expansion of the
PA Convention Center
IMPLAN model of impacts of cultural-leisure Tourism to the
Greater Philadelphia Region
IMPLAN model of impact of industrial park development &
expansion of Philadelphias Free Library
IMPLAN model of impacts of Delaware River Ports
Infrastructure

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 24

Appendix 1

Rhode Island
S. Carolina
Tennessee
Texas
Vermont

Virginia
West Virginia
Wisconsin

Appalachia
New England
Mid-Atlantic
National

Scotland

REMI models of impacts of transit system and highway

improvements
IMPLAN model of impacts from Natural Gas Mining activities
IMPLAN model of terminal/runway expansion at PHL
IMPLAN model of impacts of airport expansion
IMPLAN model of impact of industrial infrastructure
investment
IMPLAN model of impact of Nashville Airport; also sewer,
water and industrial parks
REMI model of San Antonio Municipal Utility energyefficiency program
REMI model to project scenarios for aviation planning
IMPLAN model of impacts of aviation statewide
IMPLAN model and RIMS II analysis of Jay Peak master plan
projects
IMPLAN model of impact of highway, also impact of
industrial infrastructure investment and airport impacts
IMPLAN model of impacts from Natural Gas Mining activities
IMPLAN model of impacts from Natural Gas Mining activities
IMPLAN model of impact of GA and commercial airports
(statewide)
REMI model of impacts of highways, tourism, and energyefficiency programs
IMPLAN model to evaluate exports
REMI modeling of Proposed state-level energy-efficiency
ramp-up policies.
REMI modeling for RGGI; for Low-carbon fuel standard
development
IMPLAN-based toolkit to evaluate Scenic Byways Tourism
Economic Impacts
REMI model of Clear Skies Proposal / Carper Amendment
REMI modeling of Eastern Canadian Provinces Multi-fuel
Efficiency Policies
Scottish I-O model of economic impacts of Glasgow airport

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 25

Appendix 2

Appendix 2: Carinthia Projects Group 1 Business

Plan
Core data into the business plan and financial statements were provided by Mount
Snow Resort. Financial statements were prepared by K. Douglas Hulme,
Chartered Accountant, Rapid USA Visas of Naples, FL. Selected data from the
business plan are included in the following pages.

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 26

Appendix 2

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page

27

Appendix 3: IMPLAN Type SAM Employment

Multiplier Data 3-digit NAICS Aggregation, 2010
Employment
Multipliers

Copyright 2012 Minnesota IMPLAN

Group, Inc.

IMPLAN ID
1
12
15
17
19
20
21
28
31
34
41
70
75
86
92
95
104
113

Description Aggregated sectors

111 Crop Farming
112 Livestock
113 Forestry & Logging
114 Fishing- Hunting & Trapping
115 Ag & Forestry Svcs
211 Oil & gas extraction
212 Mining
213 Mining services
221 Utilities
230 Construction
311 Food products
312 Beverage & Tobacco
313 Textile Mills
314 Textile Products
316 Leather & Allied
321 Wood Products
322 Paper Manufacturing
323 Printing & Related

115

324 Petroleum & coal prod

120
142
153
170
181
203
234
259
276
295
305
319
320
321
322
323
324
325
326

325 Chemical Manufacturing

326 Plastics & rubber prod
327 Nonmetal mineral prod
331 Primary metal mfg
332 Fabricated metal prod
333 Machinery Mfg
334 Computer & oth electron
335 Electircal eqpt & appliances
336 Transportation eqpmt
337 Furniture & related prod
339 Miscellaneous mfg
42 Wholesale Trade
441 Motor veh & parts dealers
442 Furniture & home furnishings
443 Electronics & appliances stores
444 Bldg materials & garden dealers
445 food & beverage stores
446 Health & personal care stores
447 Gasoline stations

Type SAM Employment Multiplier

4County
rest of
U.S.
Souther
rest of
Northea
n VT
VT
st
1.703
2.258
1.627
2.598
1.269
1.483
1.352
2.760
1.782
2.295
2.147
3.016
1.351
1.390
1.660
1.777
1.255
1.173
1.324
1.473
1.597
1.598
3.163
3.244
1.817
1.698
2.087
3.590
6.296
7.436
2.272
3.809
2.243
2.633
2.898
4.300
1.668
1.792
1.993
2.659
3.657
4.223
3.258
8.148
2.551
2.858
5.728
9.600
1.494
1.568
2.018
3.200
1.425
1.633
2.257
2.809
1.489
1.691
1.912
2.618
2.033
2.690
2.325
3.385
3.601
4.035
3.992
6.689
1.613
1.826
2.069
2.852
30.74
3.650
3.571
6.669
1
12.68
3.217
3.991
5.785
3
1.845
1.950
2.309
3.862
2.004
2.067
2.577
3.992
4.656
5.056
4.312
7.189
1.812
2.152
2.281
3.464
1.884
2.121
2.716
4.710
2.133
3.102
3.925
6.684
2.082
2.046
2.670
4.373
2.277
2.115
2.829
6.118
1.724
1.688
2.026
2.982
1.841
1.962
2.329
3.329
1.675
1.827
2.142
2.573
1.644
1.750
1.814
2.234
1.476
1.528
1.622
1.902
1.582
1.679
1.797
2.222
1.486
1.547
1.577
1.834
1.295
1.337
1.362
1.583
1.474
1.517
1.565
1.841
1.360
1.402
1.510
1.713

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 28

327
328
329
330
331
332
333
334
335
336
337
338
339
340
341
346
348
350
351
352
353
354
355
356
357
359
360
362
366
367
381
382
390
391
394
397
398
399
402
406
407
411
413
414

448 Clothing & accessories stores

451 Sports- hobby- book & music
stores
452 General merch stores
453 Misc retailers
454 Non-store retailers
481 Air transportation
482 Rail Transportation
483 Water transportation
484 Truck transportation
485 Transit & ground passengers
486 Pipeline transportation
487 Sightseeing transportation
492 Couriers & messengers
493 Warehousing & storage
511 Publishing industries
512 Motion picture & sound
recording
515 Broadcasting
516 Internet publishing and
broadcasting
517 Telecommunications
518 Internet & data process svcs
519 Other information services
521 Monetary authorities
522 Credit inmediation & related
523 Securities & other financial
524 Insurance carriers & related
525 Funds- trusts & other finan
531 Real estate
532 Rental & leasing svcs
533 Lessor of nonfinance intang
assets
541 Professional- scientific & tech
svcs
551 Management of companies
561 Admin support svcs
562 Waste mgmt & remediation svcs
611 Educational svcs
621 Ambulatory health care
622 Hospitals
623 Nursing & residential care
624 Social assistance
712 Performing arts & spectator
sports
712 Museums & similar
713 Amusement- gambling &
recreation
721 Accomodations
722 Food svcs & drinking places
811 Repair & maintenance

1.355

1.375

1.479

1.654

1.276
1.271
1.206
1.475
2.266
2.662
2.856
1.803
1.237
0.000
1.702
1.493
1.496
2.313

1.329
1.332
1.275
1.531
2.403
2.939
3.828
1.964
1.241
4.071
1.881
1.433
1.502
2.187

1.358
1.342
1.390
1.598
2.813
3.268
4.537
1.922
1.272
4.864
1.983
1.470
1.631
3.530

1.509
1.520
1.525
1.603
4.042
4.703
6.438
2.480
1.451
9.764
2.502
1.776
2.004
4.654

1.616
2.108

1.674
2.590

2.736
4.203

3.260
4.786

1.967
2.946
1.444
1.373
3.327
1.908
2.164
1.596
1.653
1.443
1.533

1.987
3.192
1.689
1.430
3.778
2.125
2.483
2.076
2.040
1.591
1.663

3.134
3.941
2.397
1.774
4.399
2.610
3.450
2.591
5.149
1.795
2.379

6.970

7.881

8.469

4.580
4.974
2.972
2.342
5.481
2.911
3.662
2.915
4.918
2.031
2.912
10.57
5

1.614
2.399
1.340
1.841
1.499
1.685
1.846
1.381
1.229

1.769
2.289
1.363
1.957
1.576
1.811
1.960
1.433
1.278

2.227
2.889
1.531
2.244
1.689
1.917
2.034
1.474
1.353

2.597
3.528
1.712
2.919
1.946
2.452
2.582
1.671
1.501

1.339
1.567

1.426
1.589

1.652
1.811

1.891
2.087

1.284
1.532
1.274
1.505

1.300
1.608
1.314
1.580

1.389
1.880
1.371
1.711

1.631
2.145
1.598
2.071

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 29

419
423
426
427

812 Personal & laundry svcs

813 Religious- grantmaking- &
similar orgs
814 Private households
92 Government & non NAICs

1.524

1.634

1.715

2.044

1.645
1.064
1.470

1.800
1.060
1.550

1.988
1.121
1.641

2.387
1.124
1.945

Job Impacts from Carinthia Group Projects at Mt. Snow, November 2012

Page 30

EXHIBIT 14
MEMORANDUM OF UNDERSTANDING - VERMONT REGIONAL CENTER

MEMORANDUM OF UNDERSTANDING
BETWEEN
STATE OF VERMONT
AGENCY OF COMMERCE AND COMMUNITY DEVELOPMENT
AND
CARINTHIA GROUP I and 2, L.P.
This Memorandum of Understanding (Agreement) is made and entered into, by and between:
State of Vermont Agency of Commerce and Community Development, and its
successors and assigns (ACCD), and

CARINTHIA GROUP I and 2, L.P., limited partnerships organized under the laws of the State of
Vermont, and their respective successors and assigns.
WHEREAS
ACCD, a governmental unit of the State of Vermont, is charged with enhancing the Vermont business
climate, marketing Vermont to businesses by facilitating, promoting and creating commercial and
business opportunities within Vermont to contribute to the economic viability of and benefit the
growth of the state; and,
ACCD is an approved and designated Regional Center recognized by the U.S. Department of
Homeland Security (DHS), U.S. Citizenship and Immigration Services (USCIS) in accordance
with the Immigrant Investor Pilot Program pursuant to section 203(b)(5) of the Immigration and
Nationality Act, as amended, the Departments of Commerce, Justice and State, the Judiciary, and
Related Agencies Appropriations Act of 1993, Pub. L. No. 102-395, section 610, as amended, and all
applicable regulations promulgated thereunder, (collectively, the Pilot Program law); and,
Initial designation as a Regional Center was made in a letter dated June 26, 1997, to Howard Dean,
M.D., Governor of the State of Vermont from legacy U.S. Immigration and Naturalization Service
(INS), informing him of the ACCDs appointment as a Regional Center; reaffirmation of ACCDs
Regional Center was given by USCIS in a letter dated June 11, 2007 to Kevin L. Dorn, secretary of
ACCD; and the ACCD Regional Center designation was amended and approved for EB-5 investment
across a wider range of business sectors by USCIS in a letter dated October 6, 2009 to Kevin L. Dorn,
secretary of ACCD; and,
CARINTHIA GROUP I and 2, L.P. is organized for the purpose of creating related, intertwined and
successive EB-5, Alien Entrepreneur investment project within the ACCD Regional Center and
managing and operating these investment project in conformance with 8 U.S.C. 1153 (b)(5)(A) -

CARINTHIA GROUP I and 2, L.P.

July 2014
(D); INA 203 (b)(5)(A) - (D) of the Immigration & Nationality Act (the "Act") and the Pilot
Program law; and,
CARINTHIA GROUP I and 2, L.P. has contracted with Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C. , Attorneys-at-Law, for legal counsel regarding compliance with U.S. immigration and
nationality law as it relates to EB-5, Alien Entrepreneur investment project and to Regional Center
Pilot Programs, and for the purpose of advising upon all immigration matters in connection with such
a project; and,
Pursuant to its responsibilities and obligations as a USCIS approved and designated Regional Center
within the Immigrant Investor Pilot Program, ACCD desires to obtain assistance in the planning and
management of the CARINTHIA GROUP I and 2, L.P. EB-5, Alien Entrepreneur investment project
within ACCDs Regional Center and to assure the project compliance with U.S. immigration laws
and regulations, as well as all applicable federal and state securities laws and regulations, concerning
investments within a regional center in the EB-5 visa preference category and, thereby, to have
greater assurance of its compliance with regional center requirements; and,
ACCD and CARINTHIA GROUP I and 2, L.P. desire an arrangement whereby CARINTHIA
GROUP I and 2, L.P. with the on-going benefit of legal counsel will, together with the periodic
concurrence of the ACCDs designated Regional Center monitoring official, assist with the oversight,
administration, management and overall compliance of the CARINTHIA GROUP I and 2, L.P.
project with legal and regulatory requirements, and CARINTHIA GROUP I, L.P. will formally report
to ACCD in writing not less than every three (3) months upon the activities of the project and respond
to any ongoing ACCD inquiries about the project and assist ACCD to comply with its obligations as a
USCIS approved and designated regional center with respect to the project.
NOW, THEREFORE, in consideration of the mutual agreements, and representations set forth herein,
the parties agree as follows:
1. ACCD will promptly request that USCIS acknowledge ACCDs designation of Patricia
Moulton, Secretary of the Agency of Commerce and Community Development as the
principal representative of ACCD in its capacity as a Regional Center.
2. ACCD will promptly request that USCIS acknowledge ACCDs designation of John
Kessler, General Counsel for the Agency of Commerce and Community Development and
Brent Raymond of the Agency of Commerce and Community Development as the
principal administrators of the Regional Center.
3. ACCD will promptly request that USCIS acknowledge ACCDs designation of
CARINTHIA GROUP I, L.P. to assist in the management, administration and overall
compliance of the Alien Entrepreneur project organized by CARINTHIA GROUP I and 2,
L.P. within ACCDs Regional Center with U.S. immigration laws and regulations, as well
as all applicable federal and state securities laws and regulations, controlling the
investment process and participation in a regional center, and to report upon the activities
of the project to ACCD and respond to ACCD inquiries about the project and assist
ACCD to comply with its obligations as a regional center with respect to the project;

Page 2 of 9

CARINTHIA GROUP I and 2, L.P.

July 2014
4. CARINTHIA GROUP I and 2, L.P. will provide support to ACCD including, but not
limited to, providing investment-related and supporting documentation to prospective
investors, supplying economic analysis and modeling reports on direct and indirect job
creation, defining investment opportunities within the CARINTHIA GROUP I and 2, L.P.
project, and assisting ACCD to comply with relevant regulatory or administrative
requirements in support of individual petitions filed with USCIS by immigrant investors
affiliated with the CARINTHIA GROUP I, L.P. project, such as providing area maps,
valid unemployment data, general economic data and demographics concerning the
geographic area covered by the CARINTHIA GROUP I and 2, L.P. project.
5. CARINTHIA GROUP I and 2, L.P. will further support ACCDs compliance with
regional center requirements by providing on a quarterly basis formal written progress
reports on its activities, overseas meetings and other relevant efforts to promote
investment in the CARINTHIA GROUP I and 2, L.P. project through the EB-5 Alien
Entrepreneur Regional Center Pilot Program. The Quarterly reports will set forth for the
preceding quarter and year-to-date the number of investors, the status of alien investor
capital (in escrow, transfers from escrow to the limited partnership) and activity of the
limited partnership in furtherance of the project. The reports will also contain information
distinguishing Investor Petitions in preparation, filed with USCIS, approved by
USCIS, denied by USCIS, or filed with the USCIS office of Administrative Appeals.
6. CARINTHIA GROUP I and 2, L.P. will support the purpose and goals of ACCDs
Regional Center by encouraging investment and employment creation within the Regional
Center through marketing at emigration fairs and conferences with individual investors
outside the United States; maintaining a website to promote and describe the project;
preparing a desirable business plan to encourage individual investments in the project
within the Regional Center; establishing escrow accounts to assist orderly investment in
the project; facilitating, on a fee basis, the preparation and submission of the I-526, Alien
Entrepreneur petition and petitions for other immigration benefits to USCIS or the
Department of State for individual investors; providing the primary entity and related
entities to carry out the activities of the project; structuring the enterprise so that it creates
requisite employment prior to the investors seeking removal of conditions; seeing to the
timely completion and opening of the project; providing operating expertise and personnel
to operate the project efficiently; and, if requested by individual investors, making
referrals to advisors who may assist with issues arising from relocation by the investor and
the investors spouse and children to the United States.
7. CARINTHIA GROUP I and 2, L.P. agrees to promote investment in its project and to
perform its obligations under this Agreement honestly, consistently and fairly in
furtherance of its efforts to assist ACCD with the oversight and management of the
Regional Center in connection with CARINTHIA GROUP I and 2, L.P..

8. CARINTHIA GROUP I and 2, L.P. will act in an independent capacity and not as officers
or employees of ACCD or the State of Vermont. CARINTHIA GROUP I and 2, L.P.

Page 3 of 9

CARINTHIA GROUP I and 2, L.P.

July 2014
shall indemnify, defend, and hold harmless ACCD, the State of Vermont and its officers
and employees from liability and any claims, suits, judgments, and damages arising as a
result of CARINTHIA GROUP I and 2, L.P. acts and/or omissions performed under this
Agreement.
9. CARINTHIA GROUP I and 2, L.P. will pay to ACCD an administrative fee of $1,500.00
for each investor to support administration of the EB-5 Regional Center program. The fee
established under 10 V.S.A. 21 authorizes the ACCD Secretary to assess an
administrative charge to support the operations of the ACCD Regional Center and to cover
the costs of providing specialized services in support of participating economic
development project. The fee will be due and payable to ACCD on a quarterly basis with
the amount of the fee owed being determined by the number of investors whose I-526
Petitions have been approved by USCIS for investment in the EB-5 project.
10. CARINTHIA GROUP I and 2, L.P., and its owners, principals and directors, will disclose,
in connection with any business they have owned or directed, any and all previous
bankruptcy or insolvency proceedings under the federal bankruptcy code or any other
similar applicable federal or state law, consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee or other similar official, or the
making by it of an assignment for the benefit of creditors generally, or the admission by it
in writing of its inability to pay its debts as they become due;
11. CARINTHIA GROUP I and 2, L.P.s owners, principals and directors will disclose any
and all personal bankruptcy or insolvency proceedings anywhere in the world;
12. CARINTHIA GROUP I and 2, L.P. , and its owners, principals and directors, will disclose
any and all civil or criminal securities investigations or findings by the SEC, and by any
federal or state government in any country;
13. CARINTHIA GROUP I and 2, L.P. affirms that its owners, principals and directors will
disclose any and all criminal convictions or criminal proceedings, judgments or plea
bargains, in and with any tribunal anywhere in the world, even if such charges or
convictions were dismissed, pardoned, expunged, nullified or retroactively extinguished,
as well as any and all allegations of fraud or tax evasion by any tribunal in the world even
if these allegations were not prosecuted, or were dismissed or eventually expunged or
pardoned or subject to any clemency.
14. CARINTHIA GROUP I and 2, L.P. affirms that its owners, principals and directors will
disclose any tax liens, judgments or past due tax liabilities against themselves or against
any businesses in the United States that they have owned, operated or directed.
15. CARINTHIA GROUP I and 2, L.P. affirms that its owners, principals and directors will
disclose any and all pending civil litigation, lawsuits or arbitration proceedings where
CARINTHIA GROUP I and 2, L.P. and or its owners, principals and directors are named
as parties anywhere in the world.

Page 4 of 9

CARINTHIA GROUP I and 2, L.P.

July 2014
16. CARINTHIA GROUP I and 2, L.P. assents to provide to the Vermont Regional Center,
upon request, copies of any payment or legal services agreements with any and all law
firms or attorneys receiving fees from CARINTHIA GROUP I and 2, L.P. or a related
entity in connection with the offering and with advising CARINTHIA GROUP I and 2,
L.P. on immigration-related or related suitability or legal issues for any prospective
investors.

17. This Agreement shall be governed by the laws of the State of Vermont.
18. This Agreement may be modified by written consent of the parties.
19. This Agreement may be cancelled by ACCD by notifying CARINTHIA GROUP I and 2,
L.P. in writing for reasons including but not limited to the following:
(a) Harm to the Vermont brand as determined by ACCD in consultation with the States
Chief Marketing Officer;
(b) Material misrepresentation by CARINTHIA GROUP I and 2, L.P. that causes ACCD
to lose confidence in the CARINTHIA GROUP I and 2, L.P. EB-5 project or one or
more of its principals;
(c) Non-compliance with laws, rules or regulations of USCIS or the US Securities and
Exchange Commission, including provisions in the JOBS Act regarding using the
internet for general solicitations in private offerings, or non-compliance with any
applicable local laws in a country where an offering is marketed and sold to investors;
(d) Non-compliance with state laws, rules or regulations governing securities and
investments otherwise known as blue sky laws;
(e) Any false or misleading assertions to any prospective investors about the at-risk nature
of an EB-5 investment or about the Issuers offering;
(f) Failure to control agents and brokers or migration agents sourcing investors abroad for
misstatements or misleading information with respect to the terms or expected
financial performance of an investment, or about an investors ability to secure a green
card;
(g) Violation of state blue sky laws in conducting United States based marketing and
promotional activities within the United States;
(h) Payment of finders fees to individuals or entities sourcing EB-5 investors within the
United States where those individuals or entities do not possess required federal and/or
state registrations necessary for the promotion and recommendation of securities to
investors;

Page 5 of 9

CARINTHIA GROUP I and 2, L.P.

July 2014
(i) Non-compliance with or violation of provisions of the Foreign Corrupt Practices
Act (FCPA) in conducting marketing and promotional activities outside the
United States in connection with any EB-5 offering, or in connection with hiring
or engaging third-parties involved in sourcing investors;
(j) Failure to timely submit to ACCD any reports, certifications or other required
submissions made a condition of this MOU;
(k) Failure to timely submit to ACCD any requests for information or records requested by
ACCD reasonably related to ACCDs responsibilities under this MOU or connected
with its duties as a USCIS approved EB-5 Regional Center; or
(l) Failure to comply with any of the terms or conditions of this MOU.
(m) Failure to furnish the Vermont Regional center with any documents requested within
15 business days to confirm compliance with any US federal and state laws.
20. Certificate of Compliance.
CARINTHIA GROUP I and 2, L.P. covenants that it will file with ACCD every six (6) month
period from date of execution, a certificate of CARINTHIA GROUP I and 2, L.P., signed by
the Authorized Representative, confirming:
(a) CARINTHIA GROUP I and 2, L.P. has made a review of its activities during the
preceding six (6) months for the purpose of determining whether or not the
CARINTHIA GROUP I and 2, L.P. has complied with all of the terms, provisions and
conditions of the Memorandum of Understanding;
(b) CARINTHIA GROUP I and 2, L.P. has maintained, observed, performed and fulfilled
each and every covenant, provision and condition of the Memorandum of
Understanding on its part to be performed; and
(c) CARINTHIA GROUP I and 2, L.P. is not in default in the performance or observance
of any of the covenants, provisions or conditions of the Memorandum of
Understanding, or if CARINTHIA GROUP I and 2, L.P. shall be in default, such
certificate shall specify all such defaults, the nature thereof and a detailed plan for
curing the default.
21. Payment of Fees and Expenses.
CARINTHIA GROUP I and 2, L.P. shall pay the following within thirty (30) days after receipt
of a bill therefore:
All fees and expenses, including attorneys fees, of the ACCD for any extraordinary services
rendered by it under the Memorandum of Understanding. All such fees and expenses are to be
paid directly to the ACCD as and when such fees and expenses become due and payable, and
All other reasonable fees and expenses incurred in connection with the issuance and
responsibilities to be performed under the Memorandum of Understanding, enforcing any

Page 6 of 9

CARINTHIA GROUP I and 2, L.P.

July 2014
obligation of CARINTHIA GROUP I, L.P. under the Memorandum of Understanding or any
related agreement entered into by CARINTHIA GROUP I, L.P., taking any action required or
permitted by the Memorandum of Understanding, as well as the reasonable costs and expenses
of defending against any claim or liability arising out of or relating to the Memorandum of
Understanding.
22. Independence, Liability.
CARINTHIA GROUP I and 2, L.P. will act in an independent capacity and not as officers or
employees of the State.
CARINTHIA GROUP I and 2, L.P. shall defend the State and its officers and employees against
all claims or suits arising in whole or in part from any act or omission of CARINTHIA GROUP
I, L.P. or of any agent of CARINTHIA GROUP I, L.P., including but not limited to, those
arising or resulting from:
(a) any USCIS or United States Securities and Exchange Commission violations;
(b) A violation of any agreement, warranty, covenant or condition of CARINTHIA
GROUP I and 2, L.P. investor offering materials or any other agreement executed in
connection with the Alien Entrepreneur project;
(c) A violation of any contract, agreement or restriction by CARINTHIA GROUP I and 2,
L.P. relating to its property;
(d) A violation of any international, federal, state or municipal law, ordinance, rules,
regulation or court order affecting CARINTHIA GROUP I and 2, L.P., the Alien
Entrepreneur project, its property or use of EB-5 investor proceeds, or any other
investor proceeds thereof; and
(e) Any statement or information concerning CARINTHIA GROUP I and 2, L.P., any of
its officers and members, its operations or financial condition generally or any
facilities contained in any offering memorandum, official statement or supplement or
amendment thereto furnished to ACCD or an investor(s), that is untrue or incorrect in
any material respect, and any omission from such official statement or any statement or
information which should be contained therein for the purpose for which the same is to
be used or which is necessary to make the statements therein concerning CARINTHIA
GROUP I and 2, L.P., any of its officers and members and any facilities not misleading
in any material respect.
The State shall notify CARINTHIA GROUP I and 2, L.P. in the event of any such claim or suit,
and CARINTHIA GROUP I and 2, L.P. shall immediately retain counsel and otherwise provide a
complete defense against the entire claim or suit.
After a final judgment or settlement CARINTHIA GROUP I and 2, L.P. may request recoupment
of specific defense costs and may file suit in Washington Superior Court requesting recoupment.
CARINTHIA GROUP I and 2, L.P. shall be entitled to recoup costs only upon a showing that
such costs were entirely unrelated to the defense of any claim arising from an act or omission of
CARINTHIA GROUP I and 2, L.P.

Page 7 of 9

CARINTHIA GROUP I and 2, L.P.

July 2014

CARINTHIA GROUP I and 2, L.P. shall indemnify the State and its officers and employees in the
event that the State, its officers or employees become legally obligated to pay any damages or
losses arising from any act or omission of CARINTHIA GROUP I and 2, L.P.
23. Maintenance of Corporate Existence and Qualification.
CARINTHIA GROUP I and 2, L.P. agrees that as long as the Alien Entrepreneur project
is in existence and owes any investor it will maintain its existence, will not dissolve,
liquidate or otherwise dispose of all or substantially all of its assets, and will not
consolidate with, allow itself to be acquired or merge into another corporation or permit
one or more other corporations to consolidate with or merge into it without the prior
written approval of ACCD.
ACCD will notify USCIS in writing within thirty (30) days of any change in the
designation of the principal representative of ACCD or the principal administrator to
ACCD or any significant change in or the termination of this Agreement with
CARINTHIA GROUP I and 2, L.P.
In the event of cancellation of this Agreement, ACCD will provide USCIS a clear
explanation as to how services and responsibilities of CARINTHIA GROUP I and 2, L.P.
hereunder will be performed, and by whom, without interruption to the functioning of the
Regional Center in connection with the CARINTHIA GROUP I and 2, L.P. project or any
affected alien investor in the CARINTHIA GROUP I and 2, L.P. project.

24. Notices given hereunder shall be in writing and delivered by courier or by U.S. mail to:
For ACCD:
The ACCD Secretary or ACCD General Counsel
National Life Building, Drawer 20
Montpelier, VT 05620-0501

For CARINTHIA GROUP I and 2, L.P.:

Mount Snow GP Services, General Partner
Richard Deutsch
PO Box 2805
89 Grand Summit Way
West Dover, VT 05356

Page 8 of 9

EXHIBIT 15
FORM OF GROUND LEASE BETWEEN MOUNT SNOW LTD. AND CARINTHIA SKI
LODGE LLC

Ground Lease Agreement

(Carinthia)
This Ground Lease Agreement is entered into by and between Mount Snow Ltd., a Vermont
corporation having an address of 39 Mountain Road, West Dover, VT 05356 (Ground
Lessor) and Carinthia Ski Lodge LLC, a Vermont limited liability company with an address of
89 Grand Summit Way, West Dover, VT 05356 (Ground Lessee) (referred to herein as the
Lease).
1. Definitions: As used in this Agreement, the following terms have the following meanings:
A. Rent: The amount of rent described in Section 10.
B. Commencement Date: The date that this Lease is executed.
C. Impositions: All taxes (including real estate, sales, use and occupancy taxes),
assessments, permit fees and other charges and special, ordinary and extraordinary,
foreseen and unforeseen, of any kind and nature whatsoever (including all interest and
penalties thereon), which shall or may during the Term of this Lease be assessed, levied,
charged, confirmed or imposed upon or become payable out of or become a lien on the
Premises or any part thereof or for any use or occupation of the Premises, this transaction
or any documents to which Ground Lessee is a party, creating or transforming an interest
or estate in the Premises.
D. Improvements: The buildings, structures, and other improvements currently comprising
the Carinthia Base Lodge (the Existing Lodge) as shown on the site plan attached
hereto as Exhibit A-1 and by this reference made a part hereof, owned by Ground
Lessor, and comprising a part of the Resort (defined below) and any and all other
improvements, parking, equipment and machinery, hereafter constructed, erected or
located on the Premises by or on behalf of the Ground Lessee, including but not limited
to the Carinthia Ski Lodge (as hereafter defined).
E. Legal Requirements: All laws, statutes, codes, ordinances, orders, judgments, decrees,
injunctions, rules, regulations, permits or licenses which now or at any time hereafter
may be applicable to the Premises or any part thereof, or any use or condition of the
Premises or any part thereof.
F. Premises: The demised land and rights related thereto as further described in Section 2.
G. Resort: The Resort shall mean the approximately 2,451-acre ski and snowboarding
resort located at located at 39 Mount Snow Road, West Dover, Vermont 05356 and
commonly known as Mount Snow.
2. Premises. On and subject to the terms and conditions set forth in this Lease, Ground Lessor
hereby demises and lets to Ground Lessee for the Term hereinafter described, the
Premises, which shall be comprised of (i) the real property located in the Town of West

Dover, State of Vermont, as more particularly described in Exhibit A attached hereto and
incorporated herein by reference on which the Existing Lodge is located (the "Land"); (ii) the
Existing Lodge and any and all other buildings or structures existing on the Land; (iii) the
new ski lodge to be constructed on the Land by Ground Lessee, as herein provided, and all
other Improvements hereafter located or constructed on the Land; and (iv) rights in and to the
Common Area as hereafter defined.
3. Parking Area. The Ground Lessee and its subtenant(s) and guests and Ground Lessor and
its subtenant(s) and guests shall have the non-exclusive right to use of the parking areas
located on the Premises and serving the Premises and the Resort. Ground Lessee agrees that
it shall not use or permit use of such parking facilities except solely as an appurtenance to use
of the Premises as a ski lodge and consistent with Ground Lessees use and activities
permitted under this Lease, and with Ground Lessors operation of the Resort. Ground
Lessee and its subtenant(s) and guests shall also have the right to park on portions of the
Resort owned and retained by Ground Lessor, adjacent or in close proximity to the Premises,
to be determined by Ground Lessor in its sole discretion.
4. Common Areas. Subject to all covenants, conditions, restrictions, reservations,
encumbrances, rights-of-way, public dedications, easements and other matters of record in
the Land Records of West Dover, Vermont or the applicable District Environmental
Conservation office, Ground Lessor hereby grants to the Ground Lessee, its permitted
successors and assigns, and its employees, agents, representatives, vendors, customers and
invitees (collectively, "Ground Lessee's Permitted Users"), the nonexclusive right of use, free of
charge (except parking or other similar charges for use of Common Areas imposed on all
tenants, occupants and invitees), of the Common Areas (as defined below) in common with
Ground Lessor, and its employees, agents, representatives, vendors, customers and other
invitees and tenants. Common Areas shall mean all parking areas, streets, driveways, curb
cuts, and sidewalks serving the Resort which Ground Lessor makes available from time to
time for the common use and benefit of any tenants and occupants of the Resort and which
are not exclusively available for use by a single tenant, occupant, and invitees including,
without limitation, (i) ingress and egress ways to and from the Premises and the Town
Highway and from the interior roadways within the Resort, (ii) utilities and connections
thereto serving the Premises, (iii) general parking areas, garages and lots, and also including
areas designed for commercial vehicles as may be available and in accordance with
applicable law, (iv) other roads and access ways, exit ways and loading docks, (v) walkways,
sidewalks, landscaped and planted areas located on, for the benefit, or serving the Premises,
and (vi) all sidewalks, terraces, walkways, and any other connecting passageways for access
to the Premises. Ground Lessee shall promptly repair, at its sole cost and expense, any
damage caused by Ground Lessee, or any of its Permitted Users, to the Common Areas, or
any part thereof.
5. Ground Lessor's Use the Resort. Nothing contained in this Lease shall limit the ability of
Ground Lessor, or its employees, agents, invitees, guests, staff, prospects, licensees, lessees,
and customers from using the Resort for all lawful purposes. Without limiting the generality
of the foregoing, nothing contained in this Lease shall limit the ability of Ground Lessee to
construct, install, lay, re-lay, operate, restore, repair, use and maintain: (i) structures, terraces
2

and improvements located or to be located on the Resort, including any area adjacent to the
Premises; (ii) roads, walkways, culverts, stormwater drainage works, parking areas, lighting,
and directional and sales signage on the Resort; (iii) downhill skiing, snowboarding,
snowshoe and hiking trails, golf and other recreational facilities and trails in existing
locations on the Premises, if any, whether owned, constructed or leased by or to Ground
Lessor, and in other locations that may be established in the future by Ground Lessor in its
sole discretion; (iv) landscaping and gardens in such locations and in such vegetative
varieties as Ground Lessor in its reasonable discretion may determine from time to time; (v)
overhead and underground utilities, including without limitation, electricity, water, sewer,
telephone and cable utilities, hookups, connections, pipelines, electrical wires, and
appurtenant works; and to grant to the appropriate utility service providers such easements as
they may reasonably require in connection therewith; and (vi) other structures and works
reasonably necessary to effectively operate the Resort. In addition, nothing contained in this
Lease shall prohibit Ground Lessor from granting other easements, leases or licenses to use
the Resort, or any part thereof, to third parties, subject to the rights of Ground Lessee
hereunder. Further, all use of the Resort is subject to Ground Lessors right, in its sole
discretion, to limit or restrict access to, or charge fees in connection with the usage of, certain
portions of the Resort that are part of its systems of ski or snowboarding trails, golf facilities
and other recreational or maintenance facilities, provided that such limitations or restrictions
do not unreasonably restrict access to and use of the Premises and the Carinthia Ski Lodge.
The Resort shall be subject to such reasonable rules and regulations as Ground Lessor may
reasonably impose in connection with the health, welfare and safety of the residents and
visitors to the Resort, in order to preserve and protect the natural beauty of the Resort, and in
connection with the operation by Ground Lessor of the recreational aspects of the Resort,
including without limitation ski and snowboarding trails other accommodations and other
amenities.
6. Use of the Premises.
A. Ground Lessee shall, for the Term of this Lease, continuously use and operate (subject to
any casualty or other events of force majeure, temporary closure to complete repairs,
holidays, or seasonal operations) the Premises as a ski lodge serving the Resort, open to
all invitees, guests, customers, staff, and other users and occupants of the Resort. The
Carinthia Ski Lodge may include the following related amenities: restaurants,
concessions, ski rentals and other skier services, lift ticket sales, retail stores, medical
facilities, convenience stores, entertain areas and other similar amenities offered at ski
resorts of comparable size and quality to the Resort.
B. In no event shall the Premises be used or operated for any purpose or use that is
inconsistent with the customary character of a first-class, family ski resort, which shall
include associated restaurant and ski school operations. Ground Lessee agrees not to
permit any unlawful or immoral practice to be carried on at or committed in the Premises
or the Resort, or a use which would injure the reputation of the Premises, the Resort or
the owner of the Resort. Ground Lessee shall not, without Ground Lessors prior
consent, which may be withheld in Ground Lessor's reasonable discretion: (i) use strobe
or flashing or rotating lights visible from outside the Premises or in any signs therefor;
3

(ii) operate any electrical or other device which interferes with or impairs radio,
television, microwave, cellular or other broadcasting or reception from or in the Resort;
(iii) do or permit anything on or about the Premises that creates any noise, vibration,
litter, dust, dirt, odor or other activity which may constitute a public or private nuisance;
(iv) do or permit anything in or about the Premises that is obscene, pornographic or
which creates a public or private nuisance; (v) use or permit upon the Premises anything
that violates the certificates of occupancy issued for the Premises or the Resort; (vi) do or
permit anything to be done upon the Premises in any way unreasonably and materially
tending to disturb, bother, or annoy any other tenant in the Resort; (vii) offer within all or
any part of the Premises any goods or services that Landlord determines, in its sole
discretion, to be inconsistent with the image of a first-class, family-oriented ski resort or
permit within all or any part of the Premises the display, sale, or rental of any item or
thing which, in Landlords sole opinion, is pornographic, lewd, vulgar, obscene,
graphically violent, or immoral (including, without limitation, any suggestive adult
newspaper, book, magazine, picture, representation or merchandise of any kind, nude
photographs, sexual devices, objects depicting genitalia, and any similar items); (viii) use
or permit the Premises to be used for any type of adult entertainment including without
limitation: allowing topless, bottomless, or bikini-clad individuals, waitresses, or
performers, or any type of staged or theatrical dancing, burlesque, modeling, or contests
in the Premises, or selling or having adult gifts or products, including without
limitation: adult videos, movies, peep shows, games, magazines, toys, birth control
devices, or other items of a sexual nature in or upon the Premises; (viii) use or permit the
Premises to be used for any living quarters or sleeping apartments, except that employees
of Ground Lessee and medical response personnel shall be permitted to stay at the
Premises as needed for general operations; (ix) use or permit the Premises to be used for
an ice skating rink.
C. Subject to the terms of this Lease, including Section A above, and except as otherwise
provided herein, Ground Lessee shall have the exclusive use of all Improvements now or
hereafter erected or located on the Premises by or on behalf of Ground Lessee during the
Term of the Lease.
7. Title and Condition. The Premises is demised and let subject to the rights of the Ground
Lessor and the state of the title thereof as of the commencement of this Lease, to any state of
facts which an accurate survey or physical inspection thereof might show, and to all zoning
regulations, 10 V.S.A. Chapter 151 (Act 250) permits, restrictions, easements, rules and
ordinances and other laws and regulations now in effect or hereafter adopted by any
governmental authority having jurisdiction and to any existing encumbrances, if any,
specifically described in Exhibit B attached hereto and incorporated herein
(Encumbrances). Ground Lessor warrants to Ground Lessee, to Ground Lessor's
knowledge, upon which warranty the Ground Lessee relies, that, other than as expressly
provided herein, at the time of the execution of this Lease, there are no encumbrances upon
title to the Premises that would materially interfere with Ground Lessees quiet use and
enjoyment thereof.
8. Compliance with Laws and Insurance Requirements; Permits; Utilities.
4

A. Ground Lessee will not do nor permit any act or use which is contrary to any Legal
Requirement or insurance requirement set forth in this Lease, or which constitutes a
public or private nuisance or waste. Ground Lessee shall not do nor permit any action or
use of the Premises that would interfere with or compete with Ground Lessors business
or operations.
B. Ground Lessee shall obtain and maintain all permits and approvals necessary for the use
and operation of the Premises, including all Improvements thereon.
C. Ground Lessee shall pay all charges for gas, electricity, water, sewer service and other
utilities used in the Premises and Improvements thereon during the Term of this Lease,
all such utilities to be separately metered and to be obtained by Ground Lessee from the
applicable utility company. Ground Lessee also shall be solely responsible for the
payment of any connection, tap, hookup or other fee(s) imposed by any governmental
authorities or by any utility company to extend, connect or continue utility service to the
Premises.
9. Term. Subject to the terms, covenants and conditions herein, Ground Lessee shall have and
hold the Premises for a term commencing on the Commencement Date and expiring at
midnight on the anniversary of the fiftieth (50th ) calendar year following the Commencement
Date unless terminated sooner as hereinafter provided (the Term). Upon no less than
ninety (90) days written notice prior to Ground Lessor, and no greater than one hundred
twenty (120) days prior to the expiration of the original term hereof, Ground Lessee shall
have the one time option to extend the original term of this Lease by forty-nine (49) years
(the Extended Term). In the event Ground Lessee exercises its right to extend the Term as
provided in this paragraph 7, any reference in this Lease to the Term, the term of this
Lease or any similar expression shall be deemed to include the Extended Term.
10. Rent. Ground Lessee covenants and agrees to pay to Ground Lessor as Rent for the
Premises during the Term of this Lease at the rate of $10.00 per annum, subject to Section 33
of this Lease.
11. Ownership of Improvements.
A. Title to any Improvements constructed by Ground Lessee on the Premises after the date
of this Lease shall remain the property of Ground Lessee, subject nevertheless to the
terms and conditions of this Lease, until the expiration or earlier termination of this
Lease.
B. Notwithstanding anything to the contrary, subject to any rights of Ground Lessors
mortgagee, upon the expiration or earlier termination of this Lease, all Improvements
then located on the Premises shall, with the Premises, be vacated and surrendered by
Ground Lessee to the Ground Lessor in good condition and repair (subject to casualty and
ordinary wear and tear) and shall become the property of Ground Lessor, and Ground
Lessee agrees to execute and deliver to Ground Lessor such quitclaim deeds, bills of sale,
5

assignments or other instruments of conveyance as the Ground Lessor may deem

reasonably necessary to evidence such transfer of title to Ground Lessor.
12. Net Lease. This is a net lease and Ground Lessor shall not be required to provide any
utilities, services or do any acts in connection with the Premises except as specifically
provided herein, and the Rent reserved hereunder shall be paid to Ground Lessor without any
claims on the part of Ground Lessee for diminution, offset or abatement. Ground Lessee shall
pay, as additional rent during the term of this Lease, all real estate taxes, assessments, and
other governmental charges and Impositions which may be levied, assessed or shall become
liens upon the Premises or any part thereof (or any building or other Improvement now
existing or hereafter constructed, made or placed thereon by Ground Lessee).
Notwithstanding anything to the contrary herein, in the event that Ground Lessor shall elect to
supply any of utilities to the Premises, Ground Lessee agrees to purchase the same from Ground
Lessor. In the event any of such utilities are not separately metered to the Premises, at Ground
Lessors election, Ground Lessee shall pay its equitable share thereof based on its usage and
Landlord shall have the right, at its sole discretion, to reasonably determine Ground Lessee's
equitable share. In lieu of the foregoing, Ground Lessor may, with respect to any utility
supplied to the Premises and not separately metered, at its sole option, require Ground Lessee to
pay its pro-rata share of such utility, not on the basis of usage but on the basis of square footage,
and Landlord shall have the right, at its sole discretion, to reasonably determine Ground Lessee's
pro rata share.
13. Liens. Ground Lessee will not directly nor indirectly create or permit to be created or to
remain, and will promptly discharge, any lien, encumbrance or charge on or pledge of, the
Premises, any Improvements thereon, or any part thereof without the prior written consent of
Ground Lessor and of the holder of any mortgage lien on the Resort or Premises. Ground
Lessee will not permit any mechanics lien or other liens to be placed upon the Premises as a
result of any materials or labor ordered by Ground Lessee or any of Ground Lessees agents,
officers or employees. If any such lien is filed, Ground Lessee shall have such lien released
of record or bond over said lien in form and amount reasonably satisfactory to Ground
Lessor, at its sole cost and expense, and within a reasonable period of time.
14. Maintenance and Repair. Ground Lessee shall at all times during the Term, of this Lease,
at its own cost and expense, keep and maintain, or cause to be kept and maintained, in first
class, safe, working order and operating condition (ordinary wear and tear accepted), the
Premises and all Improvements on the Premises and shall prevent waste to the Premises and
use all commercially reasonable efforts to prevent damage, or injury to the Premises.
Without limiting the generality of the foregoing, Ground Lessee shall make all exterior and
interior, structural and nonstructural repairs to the Premises and the Improvements thereon.
Ground Lessor shall not be required to make any improvements, repairs, or alterations in or
to the Premises during the Term of this Lease. Ground Lessee shall indemnify and save
Ground Lessor harmless from and defend Ground Lessor against any and all costs, expenses,
claims, losses, damages, fines or penalties, including reasonable attorneys fees, because of
or due to Ground Lessees failure to comply with the foregoing.

15. Construction.
A. Ground Lessee shall, at its sole cost and expense, demolish the Existing Lodge on the
Premises and construct a new ski lodge (the "Carinthia Ski Lodge") on the Premises in
accordance with the Plans and Specifications (as hereinafter defined). Ground Lessee
shall use commercially reasonable efforts to complete the construction of the Carinthia
Ski Lodge within five (5) years of the Commencement Date. In the event that (i) Ground
Lessee fails to complete the construction of the Carinthia Ski Lodge, subject to
reasonable delays caused by any Force Majeure event, within five (5) years of the
Commencement Date, or, (ii) in the event that Ground Lessee commences construction
but fails thereafter to diligently pursue the completion thereof (subject to delays caused
by any Force Majeure event), then Ground Lessor shall have the right to (a) terminate this
Lease and exercise any other rights or remedies provided for in this Lease or (b) to
complete the Carinthia Ski Lodge and to charge the cost of such completion to Ground
Lessee, which shall be promptly reimbursed by Ground Lessee within ten (10) days after
receipt of an invoice detailing such costs and expenses incurred by Ground Lessor in
connection with the completion of construction. In the event that this Lease is not
terminated by Ground Lessor, any Improvements constructed at the expense of Ground
Lessor under this subsection above shall remain the property of Ground Lessor.
B. Ground Lessor also agrees to grant such rights to use any sanitary and storm sewer lines,
water, gas, electric, telephone and other utility lines, utility systems and conduits on the
Resort Property for the use and operation of the Existing Lodge and the Carinthia Ski
Lodge to be hereafter constructed on the Premises on and subject to the terms and
conditions set forth in this Lease and provided that such use shall be at Ground Lessee's
sole cost and expense and shall not interfere with Ground Lessor's or other user's use of
the foregoing and further provided that Ground Lessee obtains all necessary approvals
and permits in connection with such use. Ground Lessor shall cooperate with Ground
Lessee to secure any easements, licenses or permits to complete the installation of the
utility systems and conduits for the Carinthia Ski Lodge as reasonably required by
Ground Lessee.
C. Ground Lessee shall not construct or place any structures or objects on the Premises,
other than the Carinthia Ski Lodge and related parking, utilities, landscaping, sidewalks,
and similar improvements, without Ground Lessors prior written consent, not to be
unreasonably withheld or delayed.
D. All costs connected with the construction, implementation and use of the Lodge
Improvements including but not limited to plans, permits, labor, and material shall by
borne solely by Ground Lessee.
E. Prior to the commencement of construction of the Carinthia Ski Lodge, or any other
Improvements, all of the plans and specifications therefore, showing the location thereof,
including, without limitation, preliminary development plans and final construction plans,
specifications and working drawings, (the "Plans and Specifications") shall be submitted
to Ground Lessor, and approved in writing by Ground Lessor. Ground Lessee will
7

deliver to Ground Lessor evidence satisfactory to Lender that all governmental

authorities, including, without limitation, development agencies and offices having
jurisdiction over the Premises (and whose approval of the Improvements is required)
have approved the Plans and Specifications. Any material deviations from the approved
Plans and Specifications shall be subject to the prior written approval of Ground Lessor.
F. In no event shall the demolition of the Existing Lodge, the construction of the Carinthia
Ski Lodge or of any other Improvements to the Premises interfere with the use and
operation of the Resort.
G. Ground Lessee shall cause the construction of the Carinthia Ski Lodge to be prosecuted
with diligence in a good and workmanlike manner, substantially in accordance with the
Plans and Specifications and all building, zoning and other applicable governmental laws,
statutes, ordinances, regulations, rules, permits and requirements affecting the Premises.
Ground Lessee shall, at its own expense, remedy in a manner satisfactory to Ground
Lessor, such portions or aspects of the construction of the Carinthia Ski Lodge, or any
other Improvements, as Ground Lessor may reasonably determine are not in compliance
(in all material respects) with the Plans and Specifications or any applicable
governmental laws, ordinances, statutes, rules and regulations.
H. Upon completion of construction of the Carinthia Ski Lodge and other Improvements,
Ground Lessee shall provide to Ground Lessor a certificate by Ground Lessee's architect,
certifying with respect to those matters deemed necessary by Ground Lessor, including a
certification of completion of such Improvements in accordance (in all material respects)
with the Plans and Specifications.
I. Ground Lessee shall provide to Ground Lessor such affidavits, lien waivers, releases and
other documentations as may be reasonably requested by Ground Lessor in connection
with the construction of the Carinthia Ski Lodge and any other Improvements,
confirming payment in full of all contracts, cost and expenses for all work, materials and
supplies in connection with the construction of the Carinthia Ski Lodge and any other
Improvements and the waiver and release of any and all mechanic's or materialmen's
liens in connection with any work performed on the Premises.
J. Ground Lessee shall cause its contractors to comply with the insurance requirements set
forth in this Lease with respect to the construction of any Improvements.
16. Condemnation. If at any time during the Term of this Lease a substantial portion of the
Premises (meaning thereby so much as shall render the Premises to any extent unusable by
Ground Lessee, as reasonably determined by Ground Lessee) shall be taken by exercise of
the right of condemnation or eminent domain or by agreement between Ground Lessor and
those authorized to exercise such rights (all such proceedings being collectively designated as
a taking in condemnation or a taking), this Lease shall, in the reasonable discretion of
Ground Lessor or Ground Lessee terminate and expire on the date of such taking and the rent
and other amounts payable to Ground Lessee hereunder shall be apportioned and paid to the
date of such taking. Ground Lessee shall have no right to interpose, prosecute or collect a
8

claim against Ground Lessor in any proceedings for taking in condemnation, for the loss of
the value of this Lease or improvements made by Ground Lessee to the Premises, provided,
however, that Ground Lessee may pursue its own claim (without diminishing Ground
Lessor's award as hereinafter described) to recover from the condemning authority, but not
from the Ground Lessor, such compensation as may be separately awarded or recoverable by
Ground Lessee in Ground Lessees own right on account of any and all damage to
Improvements constructed at the sole cost and expense of Ground Lessee, or to its operation
by reason of taking in condemnation.
If the title to less than a substantial portion of the Premises shall be taken in condemnation so
that the operations conducted on the Premises can be continued without material diminution,
this Lease shall continue in full force and effect and Ground Lessee shall restore the
Improvements to as near a condition as possible to the condition that existed prior to such
taking. Any award for a partial taking shall be vested as set forth in the prior paragraph
relating to the total taking in condemnation. The proceeds of any award to Ground Lessee in
case of any condemnation shall be held in trust by Ground Lessor and applied and disbursed
to Ground Lessee on account of the obligation of Ground Lessee to repair and rebuild the
Premises in the event of a condemnation.
17. Insurance and Indemnity. During the Term of this Lease, Ground Lessee, at its sole cost
and expense, and for the benefit of the Ground Lessor, shall carry and maintain the following
insurance:
A. Casualty Insurance. Ground Lessee will keep the Premises, and all Improvements
thereon, insured in the name of Ground Lessor and Ground Lessee (as their interests may
appear with each as a named insured, additional insured or loss payee, as applicable, to
provide each with the best position) against loss or damage by fire, windstorm and other
hazards, casualties and contingencies which are covered by what is commonly referred to
as "all risk" or Causes of Loss Special Form insurance, and such other contingencies,
"additional coverage" and types of casualty as Ground Lessor or its lender may require.
Unless otherwise specified by Ground Lessor, all insurance required hereunder shall be
for 100% of the full replacement cost of the Premises with a deductible amount not to
exceed $50,000.00. Each policy of casualty insurance shall (a) provide that any loss shall
be payable in accordance with the terms of such policy notwithstanding any act or
negligence of Ground Lessee which might otherwise result in forfeiture of said insurance,
(c) contain a waiver by the insurer of all rights of setoff, counterclaim or deduction
against Ground Lessor, (d) include an agreed amount endorsement and a replacement
cost endorsement, and (e) include a broad form boiler and machinery endorsement if any
fired pressure vessels or piping or machinery of 10 or more horsepower is located on the
Land. The insurance required to be carried by Ground Lessee under this Section shall be
evidenced by a certificate of insurance (issued on ACORD 28 or equivalent form) from
Ground Lessee's insurer, authorized agent or broker. Upon request, Ground Lessee shall
name the holder of any mortgage on the Premises pursuant to a standard mortgagee,
additional insured or loss payee clause as such holder shall elect with respect to the
foregoing property insurance, provided such holder agrees with Ground Lessee in writing
to disburse such insurance proceeds to Tenant for, and periodically during the course of,
9

repair and restoration of the Improvements as set forth in this Lease. Any such insurance
proceeds not required for the repair and restoration of the Premises shall belong to
Ground Lessor.
B. Builder's Risk Insurance. During the course of any construction upon the Premises,
Ground Lessee shall maintain such builder's risk insurance as may be required by Ground
Lessor or its lender. Unless otherwise specified by Ground Lessor, Ground Lessee shall
maintain builder's risk insurance against all risks of physical loss, including collapse and
transit coverage, for 100% of the full replacement cost of the completed construction,
such insurance to be in non reporting form, with a deductible amount not to exceed
$50,000.00. Each policy of builder's risk insurance shall (a) provide that any loss shall be
payable in accordance with the terms of such policy notwithstanding any act or
negligence of Ground Lessee which might otherwise result in forfeiture of said insurance,
(b) contain a waiver by the insurer of all rights of setoff, counterclaim or deduction
against Ground Lessor, (d) contain a "permission to occupy upon completion of work"
endorsement, and (e) include such coverage for stored materials and materials in transit
as Ground Lessor or its lender may reasonably require.
C. Flood Insurance. If the Premises is in an area identified as a flood hazard area by the
Federal Emergency Management Agency or any other similar entity, Ground Lessee shall
maintain such flood insurance as may be required by Ground Lessor or its lender.
D. Public Liability Insurance. Ground Lessee shall maintain commercial general liability
insurance against claims for personal injury, bodily injury, death or property damage
occurring upon, in or about the Premises or the Common Areas, such insurance (A) to be
on the so called "occurrence" form containing minimum limits per occurrence of
$___________ in the aggregate, together with excess and/or umbrella liability in an
amount of at least $_______________; (B) to contain a liquor liability endorsement if
any part of the Premises is covered by a liquor license; (C) to continue at not less than the
aforesaid limit until required to be changed by Ground Lessor in writing by reason of
changed economic conditions making such protection inadequate; (D) to cover at least
the following hazards, (1) premises and operations, (2) products and completed
operations on an "if any" basis, (3) independent contractors, (4) blanket contractual
liability for all written and oral contracts, (5) contractual liability covering the
indemnities contained in this Lease to the extent the same is available, and (6) all legal
liability imposed upon Ground Lessor and all court costs and attorneys' fee incurred in
connection with Ground Lessee's ownership, operation and maintenance of the
Improvements on the Premises; ; and (E) to be without any deductible. Ground Lessee
shall cause Ground Lessor to be named as an additional insured on all policies of liability
insurance maintained by Ground Lessee (including excess liability and umbrella policies)
with respect to the Premises. The insurance required to be carried by Ground Lessee
under this Section shall be evidence by a certificate of insurance (issued on ACCORD 25
or equivalent form) from Ground Lessee's insurer, authorized agent or broker.
E. Other Insurance. Ground Lessee shall maintain such worker's compensation insurance as
is required by law from time to time.
10

F. Evidence of Insurance. Ground Lessee shall deliver and keep in Ground Lessor's
possession at all times originals of all insurance policies required hereunder and shall
deliver renewals of all such policies to Ground Lessor at least ten (10) days prior to any
expiration or termination thereof. All insurance maintained by Ground Lessee pursuant
to the terms hereof shall be in such forms and with such companies as Ground Lessor
may require. In the event that renewals of policies, correctly written, in approved
companies and of such kinds and types and for such term and amounts as Ground Lessor
may require, are not delivered to Ground Lessor ten (10) days or more before the
termination or expiration of the existing policy or policies, Ground Lessee authorizes
Ground Lessor to act for it and procure at Ground Lessee's expense the necessary
insurance coverage (which may, at Ground Lessor's option, be single interest insurance to
protect Ground Lessor's interests) and agrees to keep insurance so written in force until
its expiration date of this Lease.
G. Insurers and Cancellation. All insurance maintained pursuant to the terms of this Lease
shall be issued by insurers of recognized responsibility, which are qualified to do
business in the State of Vermont. Each such policy of insurance shall provide that it shall
not be cancelled or terminated for any reason or modified or amended in any manner so
as to reduce the scope or amount of coverage or the deductible amount except upon thirty
(30) days' prior written notice to Ground Lessor.
H. Indemnity. Ground Lessee agrees to defend, indemnify and hold Ground Lessor, its
directors, officers, employees, agents and servants, harmless from and against all
liabilities, costs and expenses (including reasonable attorneys fees and expenses) and all
damages imposed upon or asserted against the Ground Lessor, as owner of the Premises,
including, without limitation, any liabilities, costs and expenses and actual or
consequential damages imposed upon or asserted against Ground Lessor, on account of
(i) any use, misuse, non-use, condition, maintenance or repair by Ground Lessee of the
Premises, (ii) any taxes, and other Impositions which are the obligation of Ground Lessee
to pay pursuant to the applicable provisions of this Lease, (iii) any failure on the part of
Ground Lessee to perform or comply with any other of the terms of this Lease or any
sublease, (iv) any liability Ground Lessor may incur or suffer as a result of Ground
Lessee's breach of any environmental laws or other laws affecting the Premises, and (vi)
accident, injury to or death of any person or damage to property on or about the Premises.
If at any time any claims, costs, demands, losses or liabilities are asserted against Ground
Lessor by reason of any of the matters as to which Ground Lessee indemnifies Ground
Lessor hereunder, Ground Lessee will, upon notice from Ground Lessor, defend any such
claims, costs, demands, losses or liabilities at Ground Lessees sole cost and expense by
counsel reasonably acceptable to Ground Lessor. This indemnity shall survive the
expiration or earlier termination of this Lease.
18. Casualty. If, at any time during the Term of this Lease, the Improvements or any part
thereof, shall be damaged or destroyed by fire or other casualty (including any casualty for
which insurance coverage was not obtained or obtainable) of any kind or nature, ordinary or
extraordinary, foreseen or unforeseen, Ground Lessee, at its sole cost and expense, shall
11

proceed with reasonable diligence (subject to a Force Majeure event), subject to a reasonable
time allowance for the purpose of adjusting such loss, to repair, alter, restore, replace or
rebuild the same as nearly as possible to its use, value, condition and character immediately
prior to such damage or destruction, subject to such changes or alterations as the Ground
Lessee may elect to make in conformity with the provisions of Section 15 hereof. The
insurance proceeds in the case of a casualty shall be held in trust by Ground Lessor and
applied and disbursed to Ground Lessee on account of the obligation of Ground Lessee to
repair and rebuild the Premises in the event of a casualty.
19. Assignment, Mortgage, Subletting. This Lease may not be assigned or sublet, by merger,
consolidation, operation of law or otherwise, by Ground Lessee without the prior written
consent of Ground Lessor, which consent may be withheld by Ground Lessor in its sole
discretion. Notwithstanding the foregoing, it is agreed by the parties hereto that Ground
Lessee may sublet to one or more tenants for the purpose of operating the Premises and
leasing out the Improvements for commercial purposes. Notwithstanding any assignment or
sublease of this Lease, be it in whole or in part hereof, Ground Lessee shall remain liable for
the full and faithful performance of all of Ground Lessees obligations hereunder and with
respect to the Premises.
20. Arbitration. All disputes and controversies of every kind and nature between the parties to
this Lease arising out of or in connection with the Lease including but not limited to the
existence, construction, validity, interpretation or meaning, performance, non-performance,
enforcement, operation, breach continuance or termination thereof shall be submitted to
arbitration under the rules of the American Arbitration Association then pertaining pursuant
to the procedure set forth below.
A. Either party may demand such arbitration in writing within five days after the
controversy arises, together with a statement of the matter in controversy.
B. The arbitration costs and expenses of each party shall be borne by that party except that
the costs and expenses of the arbitrators shall be born equally by the parties.
C. The arbitration hearing shall be held in Dover, Vermont, within sixty (60) days of the
appointment of the third arbitrator, if such an arbitrator is appointed, upon ten days
notice to the parties.
D. An award rendered by a majority of the arbitrators appointed hereunder shall be final and
binding on all parties to the proceeding and enforceable under the laws of the State of
Vermont.
THE PARTIES UNDERSTAND THAT THIS AGREEMENT CONTAINS AN
AGREEMENT TO ARBITRATE. AFTER SIGNING THE DOCUMENT, GROUND
LESSEE WILL NOT BE ABLE TO BRING A LAWSUIT CONCERNING ANY
DISPUTE THAT MAY ARISE THAT IS COVERED BY THE ARBITRATION
AGREEMENT, UNLESS IT INVOLVES A QUESTION OF CONSTITUTIONAL OR
CIVIL RIGHTS. INSTEAD, GROUND LESSEE AGREES TO SUBMIT ANY SUCH
DISPUTE TO AN IMPARTIAL ARBITRATOR AS OUTLINED ABOVE.
12

__________ Ground Lessor Initials

________ Ground Lessee Initials

21. Quiet Enjoyment. Ground Lessor covenants that if and so long as Ground Lessee keeps and
performs each and every covenant, agreement, term, provision and condition herein
contained on the part and on behalf of Ground Lessee to be kept and performed, Ground
Lessee shall quietly enjoy the Premises without hindrance or molestation by Ground Lessor
subject to the covenants, agreements, terms, provisions and conditions of this Lease,
excluding but not limited to the property rights retained by the Ground Lessor in this Lease.
22. Surrender. Upon any expiration of this Lease, Ground Lessee shall quit and surrender the
Premises to Ground Lessor in good order and condition, except for ordinary wear and tear
and except for any portion or portions of the Premises which shall have been taken in a
condemnation proceeding resulting in such termination under Section 16 or destruction under
Section 18.
23. Notices. All notices, demands, requests or other communications which may be or are
required to be given, served or sent by either party to the other shall be in writing and shall be
deemed to have been properly given or sent by mailing by register or certified mail or
recognized overnight carrier with the postage prepaid, addressed to such party at the address
hereinabove first set forth for such party.
24. Miscellaneous Provisions.
A. This Lease may be amended only by an instrument in writing, signed by Ground Lessor
and Ground Lessee.
B. This Lease may be executed in any number of counterparts, each of which shall be an
original, but all of which shall together constitute one and the same instrument.
C. This lease shall be construed and enforced in accordance with the laws of the State of
Vermont.
25. Memorandum of Lease. Ground Lessor and Ground Lessee hereby agree to execute as
soon as practical after execution of this Lease a short form or memorandum of lease, in
proper form for recording at the Dover Town Office.
26. Taxes. Ground Lessee shall, during the Term of this Lease, pay and discharge punctually, as
and when the same shall become due and payable, all taxes, special and general assessments,
water rents, rates and charges, and other Impositions and charges of every kind and nature
whatsoever, extraordinary as well as ordinary, and each and every installment thereof which
shall or may, during the Term of this lease, be charged, levied, laid, assessed, imposed,
become due and payable, or liens upon or for, or with respect to the Premises or any part
thereof, or any Improvements, appurtenances, or equipment owned or used by Ground
Lessee thereon or therein, or any part thereof, together with all interest and penalties thereon,
under or by virtue of all present or future laws, ordinances, requirements, order, or
13

regulations of the federal, state, county, town and city governments, and of all other
governmental authorities whatsoever, and all sewer rents, charges for water, steam, heat, gas,
hot water, electricity, light and power, and other service or services, furnished to the
Premises or the occupants thereof during the Term of this lease. If the Premises are not taxed
as a subdivided parcel, Taxes shall be equitably prorated between the Premises and the parcel
of which it is a part.
27. Compliance with Laws. Ground Lessee, at its sole expense, shall comply with all laws,
orders and regulations of federal, state, and municipal authorities, and with any direction of
any public officer, pursuant to law, respecting the use or occupancy of the Premises, and the
construction of all Improvements. During the Term of this Lease, Ground Lessee shall not
cause or permit any hazardous substances or hazardous materials to be used or stored on, in
or under the Premises by Ground Lessee, its agents, employees or contractors, or anyone
claiming by, through or under Ground Lessee, except in the ordinary course of business in
the operation of Ground Lessee's business as permitted by Section 6 of this Lease, or as
reasonably required in performing the obligations of Ground Lessee under this Lease, and
then only to the extent no Legal Requirements in effect at such time are violated by Ground
Lessee. Ground Lessee, at its sole expense, shall obtain all licenses or permits which may be
required for the conduct of its business or operations, or for the construction of the
Improvements and the making of repairs, alterations or additions to the Improvements or
Premises. Ground Lessor where necessary will join with Ground Lessee at its own expense
in applying for all such permits or licenses. Ground Lessee shall not use or occupy the
Premises for unlawful purposes or purposes in conflict with the uses contemplated herein.
28. Condition of Premises. Ground Lessee acknowledges that it has had sufficient opportunity
to inspect the Premises and accepts the Premises in its present condition, as is, where is and
without any representation or warranty by Ground Lessor as to the condition of the Premises,
any improvements which are located in, on, or under the Premises and improvements which
serve the Premises but are not located thereon, or as to the use or occupancy which may be
made thereof. Ground Lessee acknowledges that Ground Lessor and Ground Lessors agents
have made no representation or warranties as to the condition or use of the Premises. At the
expiration or early termination of this Lease, Ground Lessee, but only if requested in writing
by Ground Lessor in Ground Lessors sole discretion, shall remove all Improvements
constructed by or on behalf of Ground Lessee and shall peaceably surrender the Premises in
as good condition as they were in at the beginning of the Term, reasonable wear and tear
accepted. Absent such written request by Ground Lessor to remove the Improvements
constructed by or on behalf of Ground Lessee, Ground Lessee upon expiration or early
termination of this Lease shall leave said Improvements as is, which shall immediately
become the owned property of Ground Lessor. Ground Lessee by its signature hereto
acknowledges and agrees that in consideration of the mutual covenants contained herein and
in consideration of such financial considerations as are contained in the Limited Partnership
Agreement that governs Ground Lessee and its limited partners, any Improvements
constructed by or on behalf of Ground Lessee are being constructed and/or installed for the
benefit of both Ground Lessor and Ground Lessee, and in conjunction with and to benefit the
operations of the Resort.

14

29. Alterations and Improvements. Ground Lessee may make alterations, additions and
Improvements to the Premises from time to time and all of such alterations, additions or
Improvements shall be and remain the property of Ground Lessee at all times during the
Term of this Lease and any extensions or renewals thereof; provided that any Improvements
costing in excess of $100,000 or affecting the structure of any Improvements, shall be
approved in writing, in advance, by Ground Lessor. With the prior written consent of
Ground Lessor in writing, Ground Lessee at its sole expense may demolish and remove any
and all Improvements on the Premises owned by Ground Lessee; provided, however, that
Ground Lessor acknowledges and agrees that in connection with the construction of the
Carinthia Ski Lodge, Ground Lessee shall demolish the Existing Lodge.
Unless provided otherwise in this Lease, Ground Lessee shall not be required to remove any
alterations, additions or Improvements, provided, however, Ground Lessees failure to do so
prior to the termination or expiration of this Lease shall be deemed abandonment thereof and,
at Ground Lessors option, title thereto shall vest in Ground Lessor. In the case of removal
or demolition of any Improvements required by Ground Lessor, Ground Lessee shall level
the Premises, remove all rubble and promptly repair any damage caused by said removal.
30. Ground Lessees Default. A default or an event of default shall be defined as follows (an
Event of Default):
A. If default shall be made in the due and punctual payment of any Rent or additional rent or
other sums payable under this Lease, or any part thereof, when and as the same shall
become due and such default shall continue for a period of twenty (20) days after written
notice by Ground Lessor to Ground Lessee; or
B. If default shall be made by the Ground Lessee in the performance or compliance with any
agreements, terms, covenants, or conditions in this Lease other than those referenced in
the foregoing subparagraph (A), and shall not be cured within a period of thirty (30) days
after notice by the Ground Lessor to the Ground Lessee specifying the event of default, or
in the case of a default which cannot with due diligence be cured within said thirty (30)
day period, if the Ground Lessee fails to commence within said thirty (30) day period the
steps necessary to cure the same and thereafter to prosecute the cure of such default with
due diligence within sixty (60) days; or
C. Ground Lessee fails to perform or observe any obligations pursuant to Ground Lessee's
operating covenant hereunder, or
D. If the Ground Lessee shall file a voluntary petition in bankruptcy or shall be adjudicated a
bankrupt or insolvent, or if there shall be appointed a receiver or trustee of all or
substantially all of the property of the Ground Lessee, or if the Ground Lessee shall make
an assignment for the benefit of one of Ground Lessees creditors; or
E. Ground Lessee vacates the Premises in violation of this Lease or abandons the Premises.

15

Upon the occurrence of one or more Events of Default, in addition to any other rights or
remedies Ground Lessor may have at law or in equity, Ground Lessor shall have the right to
immediately re-enter and regain possession of the Premises and to exclude Ground Lessee
from further use, occupancy, and enjoyment thereof. Ground Lessee waives any and all
claims which the Ground Lessee may have against the Ground Lessor, regardless of when the
same arise, on account of such regaining of possession by Ground Lessor or such exclusion.
In particular, but not by way of limitation, Ground Lessor may remove all persons and
property from the Premises and may store such property in a public warehouse or elsewhere
at the cost of and for the account of Ground Lessee, all without service of notice or resort to
legal process and without being deemed guilty of trespass or becoming liable for any loss or
damage which may be occasioned thereby.
In the event Ground Lessor elects to re-enter and regain possession of the Premises, as
provided herein, or should Ground Lessor take possession pursuant to legal proceedings or
pursuant to any notice or mechanism provided by law, Ground Lessor may either terminate
this Lease or may from time to time, without terminating this Lease, make such alterations
and repairs as Ground Lessor deems necessary in order to relet and operate the Premises.
Ground Lessor may relet and operate the Premises or any part thereof for such term or terms
which may be for a term extending beyond the Term of this Lease, and at such rental or rents
and upon such other terms and conditions as Ground Lessor, in its sole discretion deems
advisable. Upon such reletting, all rental thereby received by Ground Lessor shall be applied:
first, to the payment of any indebtedness or rent due hereunder from Ground Lessee to
Ground Lessor; second, to the payment of any costs and expenses of such reletting, including
brokerage fees and attorneys fees, and costs of any such alterations and repairs as Ground
Lessor may make to facilitate such re-rental; and, third, the residue, if any, shall be held by
Ground Lessor and applied in payment of future rent as the same may become due and
payable hereunder. No such re-entry or taking possession of the Premises by Ground Lessor
shall be construed as an election on its part to terminate this Lease unless a written notice of
such intention be mailed to Ground Lessee or unless the termination thereof be decreed by a
court of competent jurisdiction, at which time all amounts recovered by Ground Lessor by
reletting and operating the Premises may be kept by it.
Notwithstanding any such reletting without termination, Ground Lessor may, at any time
thereafter elect to terminate this Lease for such previous Event of Default. Should Ground
Lessor at any time terminate this Lease for any breach, in addition to any other remedies it
may have, Ground Lessor may recover from Ground Lessee the Rent owed for the remainder
of the Term, and all damages Ground Lessor may incur by reason of such breach, including
the costs of recovering the Premises and reasonable attorneys fees. Ground Lessee also
consents and agrees that any rights granted hereby or expressed herein as to the Premises, as
a result of Ground Lessees default, shall also appertain to any of Ground Lessees
Improvements on the Premises or serving the Premises but not located thereon.
31. Ground Lessors Right to Perform Ground Lessees Obligations. If Ground Lessee is in
default of any material provision of this Lease, other than the provisions requiring the
payment of Rent, and Ground Lessor shall give to Ground Lessee written notice of such
Event of Default, and if Ground Lessee shall fail to cure or commerce to cure such Event of
16

Default within thirty (30) days after the receipt of such notice, then Ground Lessor may, in its
sole discretion, enter the Premises at any time and cure such Event of Default for the account
of Ground Lessee, and any sums reasonably expended by Ground Lessor in connection
therewith shall be deemed to be additional rent and payable upon written demand by Ground
Lessor.
32. Right of Access. Ground Lessor and its representatives may enter upon the Premises and
any Improvement located on the Premises at any reasonable time for the purpose of
inspections relating to compliance with this Lease, or at any time in the event of an
emergency.
33. Priority of Mortgages; Estoppel; Subordination.
A. It is understood and expressly agreed between the parties that this Lease shall always be
subject and subordinate to any present or future mortgages or assignments to mortgagees
affecting the Premises. Ground Lessee may require as a precondition to any such
subordination that the mortgagee agree to honor this Lease in the event of foreclosure
and, in return, Ground Lessee shall agree to attorn to such mortgagee; provided, however,
that Ground Lessee hereby acknowledges and agrees that upon a foreclosure, deed in lieu
of foreclosure, or the enforcement of any such mortgagee's rights and remedies, (i) any
revenues from the Premises that are based upon the sale of access to the Resort (e.g.,
ski lift tickets, ski rentals, ski school and similar revenues based upon Resort access)
would flow to and be managed by the mortgagee or purchaser of the Resort, as successor
landlord, and (ii) rent under the lease would become market rent, all as further set forth
and described in the form of subordination, non-disturbance and attornment agreement
attached hereto Exhibit C (the "SNDA Form").
B. Simultaneously with the execution of this Lease, Ground Lessor, Ground Lessee, and
Ground Lessor's existing lender (such existing lender, together with its successors,
assigns and transferees, as applicable, the "Existing Lender") which holds a mortgage on
the Resort, including the Premises (as such mortgage may be amended, restated,
modified, assigned or transferred, the "Existing Mortgage")shall execute the SNDA
Form. Ground Lessee further acknowledges and agrees that the SNDA Form, upon
execution by all of the parties thereto, shall be binding upon and inure to the benefit of all
of the parties thereto, and their respective successors and assigns. Ground Lessee also
agrees, upon request by Existing Lender or Ground Lessor, to execute any confirmation,
ratification, or necessary amendments of or to the SNDA Form in connection with (i) any
refinancing, substitutions, splitting or bifurcation, amendments, modifications,
ratification or restatement of the promissory note(s) and any other indebtedness and/or
other obligations secured by the Existing Mortgage or by any other documents
evidencing, securing or relating to such indebtedness and/or other obligations, (ii) the
release, substitution or exchange of any collateral securing such indebtedness or other
obligations, (iii) increase to or changes in the terms of payment of the promissory note(s)
and any other indebtedness and/or other obligations secured by the Existing Mortgage, or
(iv) any assignment (including by operation of law) or transfer of any rights or interests

17

of Existing Lender under the Existing Mortgage and/or the indebtedness and/or other
obligations secured thereby.
C. Ground Lessee agrees, within fifteen (15) days after request by Ground Lessor, to
execute, acknowledge and deliver to and in favor of the proposed holder of any mortgage
or purchaser of the Premises, an estoppel certificate in such form as Ground Lessor may
reasonably require.
D. Except as otherwise provided in A. or B. of this Section 33, upon request of the holder of
any mortgage affecting the Premises following the date hereof, Ground Lessee will
subordinate its rights under this Lease to the lien thereof and to all advances made or
hereafter to be made upon the security thereof, and Ground Lessee shall execute,
acknowledge and deliver an instrument effecting such subordination; provided, however,
Ground Lessor shall obtain and deliver to Ground Lessee, in recordable form, from the
holder of any such mortgage to which this Lease is to become subordinate following the
date hereof, a non-disturbance agreement substantially in the form attached hereto as
Exhibit C or such form reasonably approved by Ground Lessor, Ground Lessee and the
applicable mortgagee.
34. Cumulative Remedies. The remedies of Ground Lessor herein shall be cumulative and not
alternative, and not exclusive of any other right or remedy available to Ground Lessor.
35. Holdover Tenancy. Any holding over by the Ground Lessee after the termination of this
Lease shall be on a day to day basis at the rent in effect at the time of the holding over
prorated on a daily basis. The covenants and agreements contained herein shall remain in
force during the period of any holding over insofar as applicable.
36. Waiver. The failure of the Ground Lessor to insist upon a strict performance of any of the
terms, conditions and covenants herein, shall not be deemed a waiver of any rights or
remedies that the Ground Lessor may have and shall not be deemed a waiver of any
subsequent breach or default in the terms, conditions and covenants herein contained.
37. Force Majeure. In the event Ground Lessor or Ground Lessee shall be delayed, hindered in
or prevented from the performance of any act required hereunder (other than the payment of
Rent) by reason of strikes, lock-outs, labor troubles, inability to procure materials, failure of
power, restrictive governmental laws or regulations, riots, insurrection, the act, war or other
reason beyond their reasonable control, then performance of such act shall be excused for the
period of the delay and the period for the performance of any such act shall be extended for a
period equivalent to the period of such delay. The provisions of this Section shall not operate
to excuse Ground Lessee from prompt payment of rent or any other payment required by
Ground Lessee under the terms of this Lease or (ii) be applicable to delays resulting from the
inability of a party to obtain financing or to proceed with its obligations under this Lease
because of lack of funds.
38. Invalidity or Inapplicability of Clause. If any term or provision of this Lease or the
application thereof to any person or circumstances shall, to any extent, be deemed invalid or
18

unenforceable, the remainder of this Lease, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or unenforceable,
shall be affected thereby, and each term and provision of this Lease shall be valid and be
enforced to the fullest permitted by law. Any portion of this Lease determined to be invalid
or unenforceable shall, to the extent possible, be reformed to accomplish its intended effect.
39. Captions. The parties mutually agree that the headings and captains contained in this Lease
are inserted for convenience of reference only, and are not to be deemed part of or to be used
in construing this Lease.
40. Notices. Service of all notices under this Lease shall be sufficient if delivered personally or
if mailed via registered mail to the party involved at the address hereinafter set forth, or at
such other address as such party may provide in writing from time to time. Any such notice
mailed to such address shall be effective when deposited in the United States mail, duly
addressed and with postage prepaid.
Ground Lessors Address:
Mount Snow Ltd., PO Box 2810, West Dover, VT 05356
Ground Lessees Address:
89 Grand Summit Way, West Dover, VT 05356
41. Successors or Assigns. Except as otherwise provided herein, the covenants and agreements
herein contained shall, subject to the provisions of this Lease, bind and inure to the benefit of
the Ground Lessor, its successors and assigns, and Ground Lessee, and it successors and
assigns.
42. Entire Agreement; Amendments. It is expressly understood and agreed by and between
the parties hereto that this Lease sets forth all the promises, agreements, conditions,
inducements and understandings between Ground Lessor and Ground Lessee relative to the
demised Premises and that there are no promises, agreements, conditions, understandings,
inducements, warranties or representations, oral or written, express or implied, between them
other than as herein set forth and shall not be modified in any manner except by an
instrument in writing executed by the parties.
43. Recording. The parties agree that this Lease or a Memorandum of Lease may be recorded at
Ground Lessees option in the Land Records of West Dover, Vermont.
[Signatures on following page]

19

20

IN WITNESS WHEREOF, the parties have executed this Ground Lease Agreement under
seal as of this _____ day of ____________, 2013.

GROUND LESSOR:
MOUNT SNOW LTD.

By: ___________________
Name:
Title:
Hereunto duly authorized

STATE OF VERMONT
COUNTY OF WINDHAM, SS.:
On the ____ day of ___________ 201__, before me personally appeared
_____________________________, to me known, who being by me duly sworn, did depose
and say that he/she is the _______________________of _________________, the Lessor
described in and which executed the foregoing instrument as his/her free act and deed and as
the free act and deed of __________________________.
____________________________
My Commission Expires: _________
Notary Public

21

GROUND LESSEE:
CARINTHIA SKI LODGE LLC

By: ___________________
Name:
Title:
Hereunto duly authorized

STATE OF VERMONT
COUNTY OF WINDHAM, SS.:
On the ____ day of ___________ 201__, before me personally appeared
_____________________________, to me known, who being by me duly sworn, did depose
and say that he/she is the _______________________of _________________, the Lessor
described in and which executed the foregoing instrument as his/her free act and deed and as
the free act and deed of __________________________.
____________________________
My Commission Expires: _________
Notary Public

22

EXHIBIT A
Premises Description

23

EXHIBIT A-1
SITE PLAN

24

EXHIBIT B
Encumbrances

25

EXHIBIT 16
FORM OF GROUND LEASE BETWEEN MOUNT SNOW LTD. AND WEST LAKE WATER
PROJECT LLC

Ground Lease Agreement

(West Lake)
This Ground Lease Agreement entered into by and between Mount Snow Ltd., a Vermont
corporation having an address of 39 Mountain Road, West Dover, VT 05356 (Ground
Lessor) and West Lake Water Project LLC, a Vermont limited liability company with an
address of 89 Grand Summit Way, West Dover, VT 05356 (Ground Lessee) (referred to
herein as the Lease).
1. Definitions: As used in this Agreement, the following terms have the following meanings:
A. Rent: The amount of rent described in Section 6.
B. Commencement Date: The date that this Lease is executed.
C. Impositions: All taxes (including real estate, sales, use and occupancy taxes),
assessments, permit fees and other charges and special, ordinary and extraordinary,
foreseen and unforeseen, of any kind and nature whatsoever (including all interest and
penalties thereon), which shall or may during the Term of this Lease be assessed, levied,
charged, confirmed or imposed upon or become payable out of or become a lien on the
Premises or any part thereof or for any use or occupation of the Premises, this transaction
or any documents to which Ground Lessee is a party, creating or transforming an interest
or estate in the Premises.
D. Improvements: The buildings, structures, Water Impoundment and other improvements
including, without limitation, water lines, pumps, pump houses, air compressors,
pipelines, and any and all other improvements, equipment and machinery, which may
now or hereafter during the Term of the Lease be constructed, erected or located on the
Premises including but not limited to the Snowmaking System, by or on behalf of the
Ground Lessee.
E. Legal Requirements: All laws, statutes, codes, ordinances, orders, judgments, decrees,
injunctions, rules, regulations, permits or licenses which now or at any time hereafter
may be applicable to the Premises or any part thereof, or any use or condition of the
Premises or any part thereof.
F. Premises: The demised land and rights related thereto as further described in Section 2.
G. Resort: The Resort shall mean the ski and snowboarding resort located at located at 39
Mount Snow Road, West Dover, Vermont 05356 and commonly known as Mount
Snow.
H. Snowmaking System: Includes the Water Impoundment, water sources, pipes, pumps,
diversions, dams, pump houses, rights of way, setbacks and all ancillary parts of the
system on the Premises.

I. Water Impoundment: A 120-million gallon water storage pond and associated pumps,
piping, weirs, dams and pump house to be constructed on the Premises by Ground Lessee
and subject to a Water Use Agreement, as defined below, between the parties.
J. Water Use Agreement: That agreement between the Ground Lessor and Ground Lessee
whereby the Ground Lessee agrees to supply water to Ground Lessor for snowmaking
and other related purposes for use and operation of the Water Impoundment and
Snowmaking System, in substantially the form attached hereto as Exhibit A.
2. Premises. Ground Lessor hereby demises and lets to Ground Lessee for the Term
hereinafter described, the Premises, which shall be comprised of (i) that parcel of land
located in the Town of Wilmington, County of Windham, State of Vermont, as more
particularly described in Exhibit B attached hereto and incorporated herein by reference, (ii)
access to, connection and use of that Handle Road pipeline subject to that Agreement by and
between the Town of Dover and Ground Lessor dated as of July 6, 2010, and as further
shown on attached Exhibit C, (iii) any and all rights to utilize the Water Impoundment held
by Ground Lessor, and (iv) any and all buildings or structures of any nature existing thereon
as of the date of this Lease, and together with any and all easements, rights, privileges,
benefits and appurtenances thereto.
3. Title and Condition. The Premises are demised and let subject to the rights of the Ground
Lessor and the state of the title thereof as of the commencement of this Lease, to any state of
facts which an accurate survey or physical inspection thereof might show, and to all zoning
regulations, 10 V.S.A. Chapter 151 (Act 250) permits, restrictions, easements, rules and
ordinances and other laws and regulations now in effect or hereafter adopted by any
governmental authority having jurisdiction and to any existing encumbrances, if any,
specifically described in Exhibit D attached hereto and incorporated herein
(Encumbrances). Ground Lessor warrants to Ground Lessee, upon which warranty the
Ground Lessee relies, that, other than as expressly provided herein, at the time of the
execution of this Lease, there are no encumbrances upon title to the Premises that would
materially interfere with Ground Lessees quiet use and enjoyment thereof.
4. Use of the Premises; Permits.
A. Ground Lessee is granted the right to occupy and use the Premises for the construction,
development and operation of the Water Impoundment and Snowmaking System by
directly related or by designated independent contractors, and for related snowmaking
purposes, and for any other lawful purpose approved by Ground Lessor. Ground Lessee
will not do nor permit any act or use which is contrary to any Legal Requirement or
Insurance Requirement or which constitutes a public or private nuisance or waste.
Ground Lessee shall not do nor permit any action or use of the Premises that would
interfere with or compete with Ground Lessors business or operations. All costs
connected with the construction, implementation and use of the Water Impoundment and
Snowmaking System including but not limited to plans, permits, labor, and material shall
by borne solely by Ground Lessee.

B. Ground Lessees right to occupy and use the Premises, as granted in this Lease is subject
to and contingent upon execution of the Water Use Agreement, and effectiveness of the
Water Use Agreement for the entirety of the Term. In the event the Water Use
Agreement is terminated for any reason, Ground Lessor shall have the right to terminate
this Lease upon written notice to Ground Lessee.
C. Ground Lessor hereby reserves the right to occupy, sell, develop, donate, and use that
part of the Premises that will not be used or required by Ground Lessee to construct and
operate the Water Impoundment and Snowmaking System. Except as provided herein
nothing contained in this Lease shall limit the ability of Ground Lessor, Ground Lessee,
or their employees, agents, invitees, staff, prospects, licensees, and lessees from using the
Premises for all lawful purposes permitted in this Lease, or authorized by Ground Lessor.
D. Notwithstanding anything to the contrary herein, Ground Lessor and Ground Lessee shall
have the exclusive use of all Improvements now or hereafter erected or located on the
Premises by or on behalf of Ground Lessee during the Term of the Lease.
5. Term. Subject to the terms, covenants and conditions herein, Ground Lessee shall have and
hold the Premises for a term commencing on the Commencement Date and expiring at
midnight on the anniversary of the fiftieth (50th ) calendar year following the Commencement
Date unless terminated sooner as hereinafter provided (the Term). Upon no less than
ninety (90) days written notice prior to Ground Lessor, and no greater than one hundred
twenty (120) days prior to the expiration of the original term hereof, Ground Lessee shall
have the one time option to extend the original term of this Lease by forty-nine (49) years
(the Extended Term). In the event Ground Lessee exercises its right to extend the Term as
provided in this paragraph 5, any reference in this Lease to the Term, the term of this
Lease or any similar expression shall be deemed to include the Extended Term.
6. Rent. Ground Lessee covenants and agrees to pay to Ground Lessor as Rent for the
Premises during the Term of this Lease at the rate of $10.00 per annum, and to supply water
and operate the Water Impoundment and Snowmaking System in accordance with the Water
Use Agreement.
7. Ownership of Improvements.
A. Title to any Improvements constructed by Ground Lessee on the Premises after the date
of this Lease, which may be subject to revision from time to time in Ground Lessees sole
discretion, shall remain the property of Ground Lessee, subject nevertheless to the terms
and conditions of this Lease, until the expiration or earlier termination of this Lease.
B. Notwithstanding anything to the contrary, subject to any rights of Ground Lessors
mortgagee rights, upon the expiration or earlier termination of this Lease, all
Improvements then located on the Premises shall, with the Premises, be vacated and
surrendered by Ground Lessee to the Ground Lessor and shall become the property of
Ground Lessor, and Ground Lessee agrees to execute and deliver to Ground Lessor such
quitclaim deeds, bills of sale, assignments or other instruments of conveyance as the
3

Ground Lessor may deem reasonably necessary to evidence such transfer of title to
Ground Lessor.
8. Net Lease Nonterminability. This is a net lease and Ground Lessor shall not be required
to provide any utilities, services or do any acts in connection with the Premises except as
specifically provided herein, and the Rent reserved hereunder shall be paid to Ground Lessor
without any claims on the part of Ground Lessee for diminution, offset or abatement. Ground
Lessee shall pay, as additional rent during the term of this Lease, all real estate taxes,
assessments, and other governmental charges and Impositions which may be levied, assessed
or shall become liens upon the Premises or any part thereof (or any building or other
Improvement now existing or hereafter constructed, made or placed thereon by Ground
Lessee).
9. Liens. Ground Lessee will not directly nor indirectly create or permit to be created or to
remain, and will promptly discharge, any lien, encumbrance or charge on or pledge of, the
Premises or any part thereof without the prior written consent of Ground Lessor. Ground
Lessee will not permit any mechanics lien or other liens to be placed upon the Premises as a
result of any materials or labor ordered by Ground Lessee or any of Ground Lessees agents,
officers or employees. If any such lien is filed, Ground Lessee shall have such lien released
of record or bond over said lien in form and amount reasonably satisfactory to Ground
Lessor, at its sole cost and expense, and within a reasonable period of time.
10. Maintenance and Repair. Ground Lessee shall at all times during the Term, of this Lease,
at its own cost and expense, keep and maintain, or cause to be kept and maintained, in repair
and good, safe working order and operating conditions (ordinary wear and tear accepted), all
Improvements on the Premises and shall use all reasonable precaution to prevent waste,
damage, or injury to the Premises. Ground Lessor shall not be required to make any
improvements, repairs, or alterations in or to the Premises during the Term of this Lease.
Ground Lessee shall indemnify and save Ground Lessor harmless from and defend Ground
Lessor against any and all costs, expenses, claims, losses, damages, fines or penalties,
including reasonable attorneys fees, because of or due to Ground Lessees failure to comply
with the foregoing.
11. Construction. Ground Lessee shall endeavor to complete the construction of the Water
Impoundment and Snowmaking System within five (5) years of the Commencement Date. In
the event Ground Lessee fails to complete the construction of the Water Impoundment and
Snowmaking System, subject to any Force Majeure event or other delay beyond the
reasonable control of Ground Lessee, within five (5) years of the Commencement Date,
Ground Lessor shall have the right to complete the Water Impoundment and Snowmaking
System. Improvements constructed by Ground Lessor shall become part of the Premises but
shall remain the property of Ground Lessor. Upon completion of construction of the Water
Impoundment and Snowmaking System, Ground Lessee shall continuously operate the Water
Impoundment and Snowmaking System, subject to any Force Majeure event or periods of
inactivity due to the need to complete repairs, replacements, upgrades, or for reasons outside
of Ground Lessees reasonable control.

12. Condemnation. If at any time during the Term of this Lease a substantial portion of the
Premises (meaning thereby so much as shall render the Premises to any extent unusable by
Ground Lessee, as reasonably determined by Ground Lessee) shall be taken by exercise of
the right of condemnation or eminent domain or by agreement between Ground Lessor and
those authorized to exercise such rights (all such proceedings being collectively designated as
a taking in condemnation or a taking), this Lease shall, in the reasonable discretion of
Ground Lessee terminate and expire on the date of such taking and the rent and other
amounts payable to Ground Lessee hereunder shall be apportioned and paid to the date of
such taking. Ground Lessee shall have no right to interpose, prosecute or collect a claim
against Ground Lessor in any proceedings for taking in condemnation, for the loss of the
value of this Lease or improvements made by Ground Lessee to the Premises, provided,
however, that Ground Lessee may pursue its own claim (without diminishing Ground
Lessor's award as hereinafter described) to recover from the condemning authority, but not
from the Ground Lessor, such compensation as may be separately awarded or recoverable by
Ground Lessee in Ground Lessees own right on account of any and all damage to Ground
Lessees Improvements, or to its operation by reason of taking in condemnation and for and
on account of related any cost or loss to which Ground Lessee might incur in removing
Ground Lessees Improvements, furniture, fixtures and equipment. Any award for the value
of the land, the value, benefit or use under the Water Use Agreement, residual rights in and to
the Improvements, and loss of Rent shall belong to Ground Lessor, and Ground Lessee shall
not be entitled to share in any such award on account of any leasehold interest.
If the title to less than a substantial portion of the Premises shall be taken in condemnation so
that the operations conducted on the Premises can be continued without material diminution,
this Lease shall continue in full force and effect and Ground Lessee shall restore the
Improvements to as near a condition as possible to the condition that existed prior to such
taking. Any award for a partial taking shall be vested as set forth in the prior paragraph
relating to the total taking in condemnation. The proceeds of any award to Ground Lessee in
case of any condemnation shall be held in trust and applied on account of the obligation of
Ground Lessee to repair and rebuild the Premises in the event of a condemnation.
13. Insurance and Indemnity. During the Term of this Lease, Ground Lessee, at its sole cost
and expense, and for the benefit of the Ground Lessor, shall carry and maintain commercial
general liability insurance, including property damage, insuring Ground Lessor against
liability for injury to persons or property occurring in or about the Premises and areas serving
the Premises and any parking areas used by or on behalf of Ground Lessee or arising out of
the ownership, maintenance, use, or occupancy thereof, or any other such insurance
reasonably required by Ground Lessor. The coverage of such insurance shall not be less than
Two Million Dollars ($2,000,000.00) for commercial general insurance, property insurance
for not less than the full replacement value of the System, and an umbrella policy of not less
than Four Million Dollars ($4,000,000.00) for both, provided that such amounts may be
reasonably increased from time to time at the request of Ground Lessor. During the Term of
this Lease, Ground Lessee shall at its expense keep the Premises insured in the name of
Ground Lessor and Ground Lessee (as their interests may appear with each as named insured,
additional insured or loss payee, as applicable) against damage or destruction by all risks of
direct physical loss or damage including fire and the perils commonly covered under a
5

special form policy in an amount equal to the full replacement cost thereof (without
deduction for physical depreciation). Such policy also shall cover such other additional
coverage insurance as Ground Lessor may reasonably require, which at the time is usual and
commonly obtained in connection with similar properties. The proceeds of such insurance
in case of loss or damage shall be held in trust and applied on account of the obligation of
Ground Lessee to repair and rebuild the Premises in the event of a casualty.
All insurance policies maintained by Ground Lessee pursuant to the terms of this Lease shall
name Ground Lessor, Ground Lessors mortgagees, and Ground Lessee as insureds as their
respective interests may appear and shall be written as primary policies which do not
contribute to and are not in excess of coverage which Ground Lessor may carry. All such
insurance policies shall require the insurance carriers to provide Ground Lessor with at least
thirty (30) days written notice prior to termination or cancellation of any policy. At the
commencement of the Term of this Lease and thereafter not less than thirty (30) days prior to
the expiration date of any policy required hereunder, Ground Lessee shall deliver to Ground
Lessor certificates of insurance reflecting the required insurance provided under this Section
13, upon request by Ground Lessor.
Ground Lessee agrees to defend, indemnify and hold Ground Lessor, its directors, officers,
employees, agents and servants, harmless from and against all liabilities, costs and expenses
(including reasonable attorneys fees and expenses) and all damages imposed upon or
asserted against the Ground Lessor, as owner of the Premises, including, without limitation,
any liabilities, costs and expenses and actual or consequential damages imposed upon or
asserted against Ground Lessor, on account of (i) any use, misuse, non-use, condition,
maintenance or repair by Ground Lessee of the Premises, (ii) any taxes, and other
Impositions which are the obligation of Ground Lessee to pay pursuant to the applicable
provisions of this Lease, (iii) any failure on the part of Ground Lessee to perform or comply
with any other of the terms of this Lease or any sublease, (iv) any liability Ground Lessor
may incur or suffer as a result of Ground Lessee's breach of any environmental laws or other
laws affecting the Premises, and (vi) accident, injury to or death of any person or damage to
property on or about the Premises. If at any time any claims, costs, demands, losses or
liabilities are asserted against Ground Lessor by reason of any of the matters as to which
Ground Lessee indemnifies Ground Lessor hereunder, Ground Lessee will, upon notice from
Ground Lessor, defend any such claims, costs, demands, losses or liabilities at Ground
Lessees sole cost and expense by counsel reasonably acceptable to Ground Lessor. This
indemnity shall survive the expiration or earlier termination of this Lease.
14. Casualty. If, at any time during the Term of this Lease, the Improvements or any part
thereof, shall be damaged or destroyed by fire or other casualty (including any casualty for
which insurance coverage was not obtained or obtainable) of any kind or nature, ordinary or
extraordinary, foreseen or unforeseen, Ground Lessee, at its sole cost and expense, , shall
proceed with reasonable diligence (subject to a Force Majeure event), subject to a reasonable
time allowance for the purpose of adjusting such loss, to repair, alter, restore, replace or
rebuild the same as nearly as possible to its use, value, condition and character immediately
prior to such damage or destruction, subject to such changes or alterations as the Ground
Lessee may elect to make in conformity with the provisions of Section 11 hereof.
6

15. Assignment, Mortgage, Subletting. This Lease may not be assigned or sublet, by merger,
consolidation, operation of law or otherwise, by Ground Lessee without the prior written
consent of Ground Lessor, which consent may be withheld by Ground Lessor in its sole
discretion. Notwithstanding the foregoing, it is agreed by the parties hereto that Ground
Lessee may sublet to one or more tenants for the purpose of operating the Premises and
leasing out the Improvements for commercial purposes, subject at all times to the provisions
hereof and the Water Use Agreement. Notwithstanding any assignment or sublease of this
Lease, be it in whole or in part hereof, Ground Lessee shall remain liable for the full and
faithful performance of all of Ground Lessees obligations hereunder and with respect to the
Premises. In no event shall Ground Lessee have the right to assign or sublet any right,
benefit, value under the Water Use Agreement without the prior written consent of Ground
Lessor, which consent may be withheld by Ground Lessor in its sole discretion.
16. Arbitration. All disputes and controversies of every kind and nature between the parties to
this Lease arising out of or in connection with the Lease including but not limited to the
existence, construction, validity, interpretation or meaning, performance, non-performance,
enforcement, operation, breach continuance or termination thereof shall be submitted to
arbitration under the rules of the American Arbitration Association then pertaining pursuant
to the procedure set forth below.
A. Either party may demand such arbitration in writing within five days after the
controversy arises, together with a statement of the matter in controversy.
B. The arbitration costs and expenses of each party shall be borne by that party except that
the costs and expenses of the arbitrators shall be born equally by the parties.
C. The arbitration hearing shall be held in Dover, Vermont, within sixty (60) days of the
appointment of the third arbitrator, if such an arbitrator is appointed, upon ten days
notice to the parties.
D. An award rendered by a majority of the arbitrators appointed hereunder shall be final and
binding on all parties to the proceeding and enforceable under the laws of the State of
Vermont.
THE PARTIES UNDERSTAND THAT THIS AGREEMENT CONTAINS AN
AGREEMENT TO ARBITRATE. AFTER SIGNING THE DOCUMENT, GROUND
LESSEE WILL NOT BE ABLE TO BRING A LAWSUIT CONCERNING ANY
DISPUTE THAT MAY ARISE THAT IS COVERED BY THE ARBITRATION
AGREEMENT, UNLESS IT INVOLVES A QUESTION OF CONSTITUTIONAL OR
CIVIL RIGHTS. INSTEAD, GROUND LESSEE AGREES TO SUBMIT ANY SUCH
DISPUTE TO AN IMPARTIAL ARBITRATOR AS OUTLINED ABOVE.
__________ Ground Lessor Initials

________ Ground Lessee Initials

17. Quiet Enjoyment. Ground Lessor covenants that if and so long as Ground Lessee keeps and
performs each and every covenant, agreement, term, provision and condition herein
7

contained on the part and on behalf of Ground Lessee to be kept and performed, Ground
Lessee shall quietly enjoy the Premises without hindrance or molestation by Ground Lessor
subject to the covenants, agreements, terms, provisions and conditions of this Lease,
excluding but not limited to the property rights retained by the Ground Lessor in Section 4.C
above.
18. Surrender. Upon any expiration of this Lease, Ground Lessee shall quit and surrender the
Premises to Ground Lessor in good order and condition, except for ordinary wear and tear
and except for any portion or portions of the Premises which shall have been taken in a
condemnation proceeding resulting in such termination under Section 12 or destruction under
Section 14.
19. Notices. All notices, demands, requests or other communications which may be or are
required to be given, served or sent by either party to the other shall be in writing and shall be
deemed to have been properly given or sent by mailing by register or certified mail or
recognized overnight carrier with the postage prepaid, addressed to such party at the address
hereinabove first set forth for such party.
20. Miscellaneous Provisions.
A. This Lease may be amended only by an instrument in writing, signed by Ground Lessor
and Ground Lessee.
B. This Lease may be executed in any number of counterparts, each of which shall be an
original, but all of which shall together constitute one and the same instrument.
C. This lease shall be construed and enforced in accordance with the laws of the State of
Vermont.
21. Memorandum of Lease. Ground Lessor and Ground Lessee hereby agree to execute as
soon as practical after execution of this Lease a short form or memorandum of lease, in
proper form for recording at the Dover Town Office.
22. Taxes. Ground Lessee shall, during the Term of this Lease, pay and discharge punctually, as
and when the same shall become due and payable, all taxes, special and general assessments,
water rents, rates and charges, and other Impositions and charges of every kind and nature
whatsoever, extraordinary as well as ordinary, and each and every installment thereof which
shall or may, during the Term of this lease, be charged, levied, laid, assessed, imposed,
become due and payable, or liens upon or for, or with respect to the Premises or any part
thereof, or any Improvements, appurtenances, or equipment owned or used by Ground
Lessee thereon or therein, or any part thereof, together with all interest and penalties thereon,
under or by virtue of all present or future laws, ordinances, requirements, order, or
regulations of the federal, state, county, town and city governments, and of all other
governmental authorities whatsoever, and all sewer rents, charges for water, steam, heat, gas,
hot water, electricity, light and power, and other service or services, furnished to the
Premises or the occupants thereof during the Term of this lease.
8

23. Compliance with Laws. Ground Lessee, at its sole expense, shall comply with all laws,
orders and regulations of federal, state, and municipal authorities, and with any direction of
any public officer, pursuant to law, respecting the use or occupancy of the Premises, and the
construction of all Improvements. Ground Lessee, at its sole expense, shall obtain all
licenses or permits which may be required for the conduct of its business or operations, or for
the construction of the Improvements and the making of repairs, alterations or additions to
the Improvements or Premises. Ground Lessor where necessary will join with Ground
Lessee at its own expense in applying for all such permits or licenses. Ground Lessee shall
not use or occupy the Premises for unlawful purposes or purposes in conflict with the uses
contemplated herein.
24. Condition of Premises. Ground Lessee acknowledges that it has had sufficient opportunity
to inspect the Premises and accepts the Premises in its present condition, as is, where is and
without any representation or warranty by Ground Lessor as to the condition of the Premises,
any improvements which are located in, on, or under the Premises and improvements which
serve the Premises but are not located thereon, or as to the use or occupancy which may be
made thereof. Ground Lessee acknowledges that Ground Lessor and Ground Lessors agents
have made no representation or warranties as to the condition or use of the Premises. At the
expiration or early termination of this Lease, Ground Lessee, but only if requested in writing
by Ground Lessor in Ground Lessors sole discretion, shall remove all Improvements
constructed by or on behalf of Ground Lessee and shall peaceably surrender the Premises in
as good condition as they were in at the beginning of the Term, reasonable wear and tear
accepted. Absent such written request by Ground Lessor to remove the Improvements
constructed by or on behalf of Ground Lessee, Ground Lessee upon expiration or early
termination of this Lease shall leave said Improvements as is, which shall immediately
become the owned property of Ground Lessor. Ground Lessee by its signature hereto
acknowledges and agrees that in consideration of the mutual covenants contained herein and
in consideration of such financial considerations as are contained in the Limited Partnership
Agreement that governs Ground Lessee and its limited partners, any Improvements
constructed by or on behalf of Ground Lessee are being constructed and/or installed for the
benefit of both Ground Lessor and Ground Lessee, and in conjunction with and to benefit the
operations of the Resort.
25. Alterations and Improvements. Ground Lessee may make alterations, additions and
Improvements to the Premises from time to time and all of such alterations, additions or
Improvements shall be and remain the property of Ground Lessee at all times during the
Term of this Lease and any extensions or renewals thereof. With the prior written consent of
Ground Lessor in writing, Ground Lessee at its sole expense may demolish and remove any
and all Improvements on the Premises owned by Ground Lessee, subject to and so long as
any such demolition or removal of any or all of the Improvements do not interfere with or
adversely impact the supply of water to Ground Lessor for snowmaking and other related
purposes for use and operation of the Water Impoundment and Snowmaking System, as
provided in the Water Use Agreement.

Unless provided otherwise in this Lease, Ground Lessee shall not be required to remove any
alterations, additions or Improvements, provided, however, Ground Lessees failure to do so
prior to the termination or expiration of this Lease shall be deemed abandonment thereof and,
at Ground Lessors option, title thereto shall vest in Ground Lessor. In the case of removal
or demolition of any Improvements, Ground Lessee shall level the Premises, remove all
rubble and promptly repair any damage caused by said removal.
26. Ground Lessees Default. A default or an event of default shall be defined as follows (an
Event of Default):
A. If default shall be made in the due and punctual payment of any Rent or additional rent or
other sums payable under this Lease, or any part thereof, when and as the same shall
become due and such default shall continue for a period of thirty (30) days after written
notice by Ground Lessor to Ground Lessee; or
B. If default shall be made by the Ground Lessee in the performance or compliance with any
of the material agreements, terms, covenants, or conditions in this Lease other than those
referenced in the foregoing subparagraph (A), and shall not be cured within a period of
thirty (30) days after notice by the Ground Lessor to the Ground Lessee specifying the
event of default, or in the case of a default which cannot with due diligence be cured
within said thirty (30) day period, if the Ground Lessee fails to commence within said
thirty (30) day period the steps necessary to cure the same and thereafter to prosecute the
cure of such default with due diligence; or
C. If the Ground Lessee shall file a voluntary petition in bankruptcy or shall be adjudicated a
bankrupt or insolvent, or if there shall be appointed a receiver or trustee of all or
substantially all of the property of the Ground Lessee, or if the Ground Lessee shall make
an assignment for the benefit of one of Ground Lessees creditors; or
D. Ground Lessee vacates the Premises in violation of this Lease or abandons the Premises;
or
E. The occurrence of a Default, as defined in the Water Use Agreement.
Upon the occurrence of one or more Events of Default, in addition to any other rights or
remedies Ground Lessor may have at law or in equity, Ground Lessor shall have the right to
immediately re-enter and regain possession of the Premises and to exclude Ground Lessee
from further use, occupancy, and enjoyment thereof. Ground Lessee waives any and all
claims which the Ground Lessee may have against the Ground Lessor, regardless of when the
same arise, on account of such regaining of possession by Ground Lessor or such exclusion.
In particular, but not by way of limitation, Ground Lessor may remove all persons and
property from the Premises and may store such property in a public warehouse or elsewhere
at the cost of and for the account of Ground Lessee, all without service of notice or resort to
legal process and without being deemed guilty of trespass or becoming liable for any loss or
damage which may be occasioned thereby.

10

In the event Ground Lessor elects to re-enter and regain possession of the Premises, as
provided herein, or should Ground Lessor take possession pursuant to legal proceedings or
pursuant to any notice or mechanism provided by law, Ground Lessor may either terminate
this Lease or may from time to time, without terminating this Lease, make such alterations
and repairs as Ground Lessor deems necessary in order to relet and operate the Premises.
Ground Lessor may relet and operate the Premises or any part thereof for such term or terms
which may be for a term extending beyond the Term of this Lease, and at such rental or rents
and upon such other terms and conditions as Ground Lessor, in its sole discretion deems
advisable. Upon such reletting, all rental thereby received by Ground Lessor shall be applied:
first, to the payment of any indebtedness or rent due hereunder from Ground Lessee to
Ground Lessor; second, to the payment of any costs and expenses of such reletting, including
brokerage fees and attorneys fees, and costs of any such alterations and repairs as Ground
Lessor may make to facilitate such re-rental; and, third, the residue, if any, shall be held by
Ground Lessor and applied in payment of future rent as the same may become due and
payable hereunder. No such re-entry or taking possession of the Premises by Ground Lessor
shall be construed as an election on its part to terminate this Lease unless a written notice of
such intention be mailed to Ground Lessee or unless the termination thereof be decreed by a
court of competent jurisdiction, at which time all amounts recovered by Ground Lessor by
reletting and operating the Premises may be kept by it.
Notwithstanding any such reletting without termination, Ground Lessor may, at any time
thereafter elect to terminate this Lease for such previous Event of Default. Should Ground
Lessor at any time terminate this Lease for any breach, in addition to any other remedies it
may have, Ground Lessor may recover from Ground Lessee the Rent owed for the remainder
of the Term, and all damages Ground Lessor may incur by reason of such breach, including
the costs of recovering the Premises and reasonable attorneys fees. Ground Lessee also
consents and agrees that any rights granted hereby or expressed herein as to the Premises, as
a result of Ground Lessees default, shall also appertain to any of Ground Lessees
Improvements on the Premises or serving the Premises but not located thereon.
27. Ground Lessors Right to Perform Ground Lessees Obligations. If Ground Lessee is in
default of any material provision of this Lease, other than the provisions requiring the
payment of Rent, and Ground Lessor shall give to Ground Lessee written notice of such
Event of Default, and if Ground Lessee shall fail to cure or commerce to cure such Event of
Default within thirty (30) days after the receipt of such notice, then Ground Lessor may enter
the Premises at any time and cure such Event of Default for the account of Ground Lessee,
and any sums reasonably expended by Ground Lessor in connection therewith shall be
deemed to be additional rent and payable upon written demand by Ground Lessor.
28. Right of Access. Ground Lessor and its representatives may enter upon the Premises and
any Improvement located on the Premises at any reasonable time for the purpose of
inspections relating to compliance with this Lease, or at any time in the event of an
emergency.
29. Priority of Mortgages; Estoppel; Subordination.

11

A. It is understood and expressly agreed between the parties that this Lease shall always be
subject and subordinate to any present or future mortgages or assignments to mortgagees
affecting the Premises. Ground Lessee may require as a precondition to any such
subordination that the mortgagee agree to honor this Lease in the event of foreclosure
and, in return, Ground Lessee shall agree to attorn to such mortgagee; provided, however,
that Ground Lessee hereby acknowledges and agrees that upon a foreclosure, deed in lieu
of foreclosure, or the enforcement of any such mortgagee's rights and remedies,
payments, as defined under Section 4 of the Water Use Agreement, shall be adjusted in
accordance with that the form of subordination, non-disturbance and attornment
agreement attached hereto Exhibit E (the "SNDA Form").
B. Simultaneously with the execution of this Lease, Ground Lessor, Ground Lessee, and
Ground Lessor's existing lender (such existing lender, together with its successors,
assigns and transferees, as applicable, the "Existing Lender") which holds a mortgage on
the Resort, including the Premises (as such mortgage may be amended, restated,
modified, assigned or transferred, the "Existing Mortgage") shall execute the SNDA
Form. Ground Lessee further acknowledges and agrees that the SNDA Form, upon
execution by all of the parties thereto, shall be binding upon and inure to the benefit of all
of the parties thereto, and their respective successors and assigns. Ground Lessee also
agrees, upon request by Existing Lender or Ground Lessor, to execute any confirmation,
ratification, or necessary amendments of or to the SNDA Form in connection with (i) any
refinancing, substitutions, splitting or bifurcation, amendments, modifications,
ratification or restatement of the promissory note(s) and any other indebtedness and/or
other obligations secured by the Existing Mortgage or by any other documents
evidencing, securing or relating to such indebtedness and/or other obligations, (ii) the
release, substitution or exchange of any collateral securing such indebtedness or other
obligations, (iii) increase to or changes in the terms of payment of the promissory note(s)
and any other indebtedness and/or other obligations secured by the Existing Mortgage, or
(iv) any assignment (including by operation of law) or transfer of any rights or interests
of Existing Lender under the Existing Mortgage and/or the indebtedness and/or other
obligations secured thereby.
C. Ground Lessee agrees, within fifteen (15) days after request by Ground Lessor, to
execute, acknowledge and deliver to and in favor of the proposed holder of any mortgage
or purchaser of the Premises, an estoppel certificate in such form as Ground Lessor may
reasonably require.
D. Except as otherwise provided in A. or B. of this Section 29, upon request of the holder of
any mortgage affecting the Premises following the date hereof, Ground Lessee will
subordinate its rights under this Lease to the lien thereof and to all advances made or
hereafter to be made upon the security thereof, and Ground Lessee shall execute,
acknowledge and deliver an instrument effecting such subordination; provided, however,
Ground Lessor shall obtain and deliver to Ground Lessee, in recordable form, from the
holder of any such mortgage to which this Lease is to become subordinate following the
date hereof, a non-disturbance agreement substantially in the form attached hereto as

12

Exhibit E or such form reasonably approved by Ground Lessor, Ground Lessee and the
applicable mortgagee.
30. Cumulative Remedies. The remedies of Ground Lessor herein shall be cumulative and not
alternative, and not exclusive of any other right or remedy available to Ground Lessor.
31. Holdover Tenancy. Any holding over by the Ground Lessee after the termination of this
Lease shall be on a day to day basis at the rent in effect at the time of the holding over
prorated on a daily basis. The covenants and agreements contained herein shall remain in
force during the period of any holding over insofar as applicable.
32. Waiver. The failure of the Ground Lessor to insist upon a strict performance of any of the
terms, conditions and covenants herein, shall not be deemed a waiver of any rights or
remedies that the Ground Lessor may have and shall not be deemed a waiver of any
subsequent breach or default in the terms, conditions and covenants herein contained.
33. Force Majeure. In the event Ground Lessor or Ground Lessee shall be delayed, hindered in
or prevented from the performance of any act required hereunder (other than the payment of
Rent) by reason of strikes, lock-outs, labor troubles, inability to procure materials, failure of
power, restrictive governmental laws or regulations, riots, insurrection, the act, failure to act
or default of the other party, war or other reason beyond their reasonable control, then
performance of such act shall be excused for the period of the delay and the period for the
performance of any such act shall be extended for a period equivalent to the period of such
delay.
34. Invalidity or Inapplicability of Clause. If any term or provision of this Lease or the
application thereof to any person or circumstances shall, to any extent, be deemed invalid or
unenforceable, the remainder of this Lease, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or unenforceable,
shall be affected thereby, and each term and provision of this Lease shall be valid and be
enforced to the fullest permitted by law. Any portion of this Lease determined to be invalid
or unenforceable shall, to the extent possible, be reformed to accomplish its intended effect.
35. Captions. The parties mutually agree that the headings and captains contained in this Lease
are inserted for convenience of reference only, and are not to be deemed part of or to be used
in construing this Lease.
36. Notices. Service of all notices under this Lease shall be sufficient if delivered personally or
if mailed via registered mail to the party involved at the address hereinafter set forth, or at
such other address as such party may provide in writing from time to time. Any such notice
mailed to such address shall be effective when deposited in the United States mail, duly
addressed and with postage prepaid.
Ground Lessors Address:
Mount Snow Ltd., PO Box 2810, West Dover, VT 05356

13

Ground Lessees Address:

89 Grand Summit Way, West Dover, VT 05356
37. Successors or Assigns. Except as otherwise provided herein, the covenants and agreements
herein contained shall, subject to the provisions of this Lease, bind and inure to the benefit of
the Ground Lessor, its successors and assigns, and Ground Lessee, and it successors and
assigns.
38. Entire Agreement; Amendments. It is expressly understood and agreed by and between
the parties hereto that this Lease sets forth all the promises, agreements, conditions,
inducements and understandings between Ground Lessor and Ground Lessee relative to the
demised Premises and that there are no promises, agreements, conditions, understandings,
inducements, warranties or representations, oral or written, express or implied, between them
other than as herein set forth and shall not be modified in any manner except by an
instrument in writing executed by the parties.
39. Recording. The parties agree that this Lease or a Memorandum of Lease may be recorded at
Ground Lessees option in the Land Records of West Dover, Vermont.
[Signatures on following page]

14

IN WITNESS WHEREOF, the parties have executed this Ground Lease Agreement under
seal as of this _____ day of ____________, 2013.

GROUND LESSOR:
MOUNT SNOW LTD.

By: ___________________
Name:
Title:
Hereunto duly authorized

STATE OF VERMONT
COUNTY OF WINDHAM, SS.:
On the ____ day of ___________ 201__, before me personally appeared
_____________________________, to me known, who being by me duly sworn, did depose
and say that he/she is the _______________________of _________________, the Lessor
described in and which executed the foregoing instrument as his/her free act and deed and as
the free act and deed of __________________________.
____________________________
My Commission Expires: _________
Notary Public

15

GROUND LESSEE:
WEST LAKE WATER PROJECT LLC

By: ___________________
Name:
Title:
Hereunto duly authorized

STATE OF VERMONT
COUNTY OF WINDHAM, SS.:
On the ____ day of ___________ 201__, before me personally appeared
_____________________________, to me known, who being by me duly sworn, did depose
and say that he/she is the _______________________of _________________, the Lessor
described in and which executed the foregoing instrument as his/her free act and deed and as
the free act and deed of __________________________.
____________________________
My Commission Expires: _________
Notary Public

16

EXHIBIT A
Water Use Agreement

17

Upon Recording Return To:

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Attention: Ani E. Ajemian, Esq.
WATER USE AGREEMENT
This Water Use Agreement (Agreement) is entered into by and between Mount Snow, Ltd.
(Mount Snow), a Vermont corporation with its principal place of business at 39 Mount Snow
Road, West Dover, Vermont, and West Lake Water Project LLC, a Vermont limited liability
company (West Lake), with its principal place of business at 89 Grand Summit Way, West
Dover, Vermont 05356.
RECITALS
WHEREAS, Mount Snow is owner of the skiing facility located at 39 Mount Snow
Road, West Dover, Vermont, commonly known as Mount Snow (Resort); and
WHEREAS, Mount Snow is also owner of certain real property located in the Town of
Wilmington, County of Windham, State of Vermont, as more particularly described on Schedule
A attached hereto (the Premises) ; and
WHEREAS, West Lake is Ground Lessee under that Ground Lease Agreement by
Mount Snow, as Ground Lessor, dated as of ____________ for the Premises and other rights and
interests as more particularly described and referred to therein (the Lease); and
WHEREAS, West Lake intends to construct, maintain and operate a Snowmaking
System (as defined in the Lease) on a portion of the Premises, as more particularly described in
the Lease, comprised of water lines, dams, pumps, pump houses and other equipment associated
therewith and a Water Impoundment (as defined in the Lease), consisting of a 120-million gallon
water storage pond and associated pumps, piping, weirs, dams and pump house (all of the
foregoing, collectively, the System); and
WHEREAS, West Lake desires to operate the System for the benefit of Mount Snow to
provide snowmaking water for the Resort and to sell all of snowmaking water produced by the
System to Mount Snow, and Mount Snow desires to purchase all of the snowmaking water
produced by the System from West Lake; and
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, the parties covenant and agree as follows:

1. Supply of Water. West Lake hereby agrees to use and operate the System for the Term of
this Agreement, and to supply all of the water produced, managed and stored by the System
exclusively to Mount Snow, subject to the terms and conditions of this Agreement and the
Lease. Mount Snow hereby agrees to procure all water needed for the Resort for
snowmaking purposes from West Lake.
2. Term of Agreement. The term of this Agreement shall be commence as of the date hereof
and expire within fifty (50) years or the earlier termination of this Agreement (Term).
Upon not less than ninety (90) days prior written notice to West Lake, but not more than
hundred eighty (180) days prior to the expiration of the original term of this Agreement,
Mount Snow shall have the one time option to extend the original term of this Agreement by
forty-nine (49) years. Notwithstanding the foregoing, in the event the Lease expires or
terminates prior to the expiration of the Term or earlier termination of this Agreement, then,
at the sole option of Mount Snow, this Agreement shall terminate upon written notice to
West Lake.
3. Environmental Impacts. West Lake hereby agrees to monitor any and all environmental
impacts that are or may be associated with water withdrawal and replenishment for or related
in any manner to the System, including but not limited to mandatory reporting to the State of
Vermonts Department of Environmental Conservation (DEC) (and any other applicable
governmental authority), along with any supporting documentation thereof including by not
limited to detailed reports and analysis that may be required by the DEC. West Lake shall
not commit or permit any act or occurrence which results or may result in a release or harm
to the environment, violation of any applicable state or federal law or regulation, or impact
under, in or on the Premises, the groundwater, surface water, or air. West Lake shall
indemnify, defend, and hold harmless Mount Snow, its successors and assigns, from any and
all claims, damages, liabilities, expenses or fees related to its operation and use of the
System. West Lake shall furnish to Mount Snow true, accurate and complete copies of any
reports, correspondence, or filings of any manner sent to the DEC (or other governmental
authority) within seven (7) days of submission.
4. Payments.
a. As consideration for being supplied all of its snowmaking water Mount Snow shall
pay West Lake for the volume of water received and for services reasonably related to
delivery of snowmaking water. All water supplied to Mount Snow shall be monitored
by meter recording water volume. West Lake shall read each meter on a monthly or
otherwise regular basis, and shall report the water usage to Mount Snow.
b. Mount Snow shall pay to West Lake on a quarterly basis, in the amount of Five
Thousand Dollars ($5,000.00) per one million gallons of snowmaking water supplied
to it by West Lake for use at the Resort for snowmaking purposes. Mount Snow shall
commence payment for West Lakes snowmaking water upon receipt of the first
delivery of water by West Lake to Mount Snow.
c. West Lake shall be responsible for any and all operating expenses incurred at the
Premises, with respect to the System, and as otherwise provided in the Lease.

5. Permit Responsibility. West Lake shall be responsible for obtaining any and all permits and
regulatory approvals necessary for or associated with supplying snowmaking water to Mount
Snow and operating the System. Mount Snow shall retain full and unrestricted right to
appear or participate as a party in, or to furnish comments in connection with, any regulatory
proceeding or review involving supplying snowmaking water to the Resort.
6. Right to Terminate.
a. Inadequate Supply and Authority. Mount Snow may terminate this Agreement and
exercise any and all rights and remedies available to it hereunder, at law or in equity
if at any time (i) West Lake does not have the legal right or authority to supply
snowmaking water to Mount Snow, or (ii) West Lake cannot, in Mount Snows
reasonable discretion, supply adequate amounts of water to meet Mount Snows
snowmaking needs. In the event West Lake cannot provide adequate amounts of
water to meet Mount Snows snowmaking needs, Mount Snow shall have the right
supplement its supply of snowmaking water from other sources without waiving any
rights under this Agreement, and this Agreement shall not be deemed terminated.
b. For Reasons Pertaining to Regulatory Approval. Mount Snow may terminate this
Agreement by giving notice to West Lake in writing if West Lake does not obtain all
permits and approvals from all applicable governmental authorities, as are necessary
for the use of snowmaking water from West Lakes water storage pond.
c. For Reasons Pertaining to Material Adverse Impacts. Mount Snow may terminate
this Agreement if the operation of the System causes a Material Adverse Impact (as
hereinafter defined) on its business operation. A Material Adverse Impact shall
mean an impact that substantially impairs Mount Snows ability to make snow at the
Resort, in Mount Snows reasonable discretion.
d. Notice to Cure. Notwithstanding anything to the contrary herein, in the event of a
Material Adverse Impact, Mount Snow shall provide West Lake with written notice
thereof, and Mount Snow shall not have any right to terminate this Agreement unless
and until West Lake has not cured such Material Adverse Impact within ninety (90)
days following receipt of such notice by Mount Snow.
7. Insurance. During the Term of this Agreement, West Lake, at its sole cost and expense, and
for the benefit of Mount Snow, shall carry and maintain commercial general liability
insurance, including personal property damage, insuring Mount Snow against liability for
injury to persons or property occurring in or about the System or arising out of the
ownership, maintenance, use, or occupancy thereof, or any other such insurance reasonably
required by Mount Snow. The coverage of such insurance shall not be less than Two Million
Dollars ($2,000,000.00) for commercial general insurance, property insurance for not less
than the full replacement value of the System, and an umbrella policy of not less than Four
Million Dollars ($4,000,000.00) for both.
All insurance policies maintained by West Lake pursuant to the terms of this Agreement shall
name Mount Snow, Mount Snows mortgagees, and West Lake as insureds as their
respective interests may appear and shall be written as primary policies which do not
contribute to and are not in excess of coverage which Mount Snow may carry. All such

insurance policies shall require the insurance carriers to provide Mount Snow with at least
thirty (30) days written notice prior to termination or cancellation of any policy. At the
commencement of the Term of this Agreement and thereafter not less than thirty (30) days
prior to the expiration date of any policy required hereunder, West Lake shall deliver to
Mount Snow certificates of insurance reflecting the required insurance provided under this
Section 7, upon request by Mount Snow.
8. Damage and Destruction. In the event the Premises, or any part thereof, including but not
limited to the System or any part thereof, is hereafter damaged or destroyed by casualty or
otherwise, then West Lake shall promptly repair any such damage or destruction, including
any replacements that may be required, and shall defend, hold harmless and indemnify
Mount Snow in connection therewith from any third-party claims in the manner set forth in
Section 9. West Lake shall also hold harmless and indemnify Mount Snow from any and all
damages to Mount Snow proximately caused thereby. This Section shall survive termination
of this Agreement.
9. Third-Party Claims. West Lake shall defend, hold harmless and indemnify Mount Snow in
full from and against any and all loss, costs (including attorney's fees), damages, claims and
liability resulting from any third-party claims against Mount Snow resulting from West
Lakes actions under this Agreement. West Lake shall also defend, hold harmless and
indemnify Mount Snow from and against any and all loss, costs (including attorney's fees),
damages, claims and liability arising from or relating to the negligence or willful misconduct
of West Lake or its officers, agents, contractors, representatives or employees in connection
with the operation, maintenance or replacement or repair of the System. This Section shall
survive termination of this Agreement.
10. Compliance with Law. West Lake shall comply with all federal, state and municipal laws,
statutes, ordinances, orders, rules and/or regulations in connection with this Agreement. West
Lake shall defend, hold harmless and indemnify Mount Snow from any and all liabilities or
costs arising out of West Lakes failure to comply with any such non-compliance. This
Section shall survive termination of this Agreement.
11. Maintenance, Improvements and Reconstruction. West Lake shall maintain the System in
good order and repair, as necessary to comply with all applicable local, state and federal
regulations, in conformance with reasonable engineering standards, and as otherwise required
under the Lease. In addition, West Lake shall obtain any necessary permits for, and complete
any and all capital improvements, or capital reconstruction, reasonably necessary for
operation, preservation and maintenance of the System and shall be responsible for paying all
of the costs of repair of any damage caused by, or performance of any capital repairs required
as a result complying with its obligations under this Agreement.
12. Default by West Lake. The occurrence of any of the following events shall constitute a
default and breach of this Agreement if not cured or corrected in accordance herewith (herein
referred to as a Default). In the event of a Default, Mount Snow may terminate this
Agreement by written notice to West Lake.
a. Failure by West Lake to observe and perform any provision of this Agreement to be
observed or performed by West Lake, where such failure continues for thirty (30)
days after receipt of written notice thereof by Mount Snow to West Lake, except that

said thirty (30) day period shall be extended for a reasonable period of time if the
alleged default is not reasonably capable of cure within said thirty (30) day period and
so long as West Lake commences to cure such default within such initial period of
thirty (30) days and thereafter diligently and continuously proceeds to cure the
default; or
b. The making by West Lake of a general assignment for the benefit of creditors
(exclusive of assignments in connection with financings as reasonably approved by
Mount Snow), the filing by or against West Lake of a petition to have West Lake
deemed bankrupt, or a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against West Lake, the
same is dismissed within ninety (90) days), the appointment of a trustee or receiver to
take possession that is not restored to West Lake within ninety (90) days, or the
attainment, execution or other judicial seizure that is not discharged within ninety
(90) days; or
c. Failure by West Lake to remedy a violation of a condition of any regulatory permit or
applicable law related to its use of the Premises within thirty (30) days after receipt of
notice from any applicable authority or by Mount Snow of such violation with request
to cure same, provided that it shall not be deemed a default hereunder if, at the time
of such notice or within thirty (30) days thereafter, West Lake in good faith contests
the validity of the violation in a proceeding initiated with the agency or other body
with jurisdiction over such permit; or
d. Failure by West Lake to satisfy, in full, any indemnity obligation hereunder; or
e. An Event of Default under the Lease, as defined therein, shall constitute a Default
under this Agreement, and Mount Snow shall have the right to pursue any and all
rights and remedies provided under the Lease in addition to any rights and remedies
under this Agreement, in its sole discretion; or
f. In addition to the remedies provided under this Agreement, in the event of a Default
by West Lake, Mount Snow shall have the right, but not the obligation, to (i) cure
said Default, at West Lakes sole cost and expense, and (ii) Mount Snow shall have
the right, but not the obligation, to apply any payments due under Section 4 of this
Agreement to offset rental payments due under the Ground Lease by West Lake.
13. Default by Mount Snow. The parties covenant and agree that West Lake shall have a claim to
terminate this Agreement or to pursue a claim against Mount Snow, its agents, officers or
employees for monetary damages arising out of any breach by Mount Snow of a material
term of this Agreement and said breach continues for thirty (30) days after receipt of written
notice thereof by Mount Snow to West Lake, except that said thirty (30) day period shall be
extended for a reasonable period of time if the alleged default is not reasonably capable of
cure within said thirty (30) day period and so long as Mount Snow commences to cure such
default within such initial period of thirty (30) days and thereafter diligently and
continuously proceeds to cure the default.
14. Transfer. The parties covenant and agree that in the event of any transfer of Ground Lessors
interest in the Premises by foreclosure, deed in lieu of foreclosure, sale or other action, water

payments as provided under Section 4 of this Agreement shall be increased to an amount

equal to the lesser of: (i) $1,050,000.00, and (ii) the principal amount owed by West Lake
pursuant to that certain promissory note in the principal amount of $30,000,000.00 dated
___________, made payable to Carinthia Group 1, L.P. multiplied by three and one-half
percent (3.5%).
15. Notices. Notices and demands required, or permitted, to be sent to those listed hereunder
shall be sent by certified mail, return receipt requested, postage prepaid, or by Federal
Express or other reputable overnight courier service and shall be deemed to have been given
on the date the same is postmarked if sent by certified mail or the day deposited with Federal
Express or such other reputable overnight courier service, but shall not be deemed received
until one (1) business day following deposit with Federal Express or other reputable
overnight courier service or five (5) business days following deposit in the United States
Mail, if sent by certified mail to address shown below, or at such other address requested in
writing by either party upon thirty (30) days notice to the other party:
If to West Lake:
Richard Deutsch
West Lake Water Project LLC
89 Grand Summit Way
PO Box 2805
West Dover, Vermont 05356
If to Mount Snow:
General Manager
Mount Snow, Ltd.
39 Mount Snow Road
PO Box 2810
West Dover, VT 05356
The parties may in writing designate new addresses for purposes of notice hereunder.
16. Binding Effect. All covenants, promises, conditions, representations and agreements herein
contained shall be binding upon, apply and inure to the parties hereto and their respective
heirs, executors, administrators, successors and assigns. This Agreement shall run with the
land.
17. No Waiver. The failure of either West Lake or Mount Snow to insist upon strict performance
by the other of any of the covenants, conditions, and terms of this Agreement or to pursue
any right hereunder shall not be deemed a waiver of any subsequent breach or default in any
of the covenants, conditions and agreements of this Agreement.
18. Applicable Law and Choice of Forum. This Agreement shall be governed by the laws of the
State of Vermont. Any litigation arising hereunder shall be prosecuted in a court of
competent jurisdiction within the State of Vermont or the United States District Court of the
District of Vermont.

19. Entire Agreement. This Agreement contains all of the understandings of the parties hereto
with respect to matters covered or mentioned in this Agreement and no prior agreement,
letters, representations, warranties, promises, or understandings pertaining to any such
matters shall be effective for any such purpose. This Agreement may be amended or added to
only by an agreement in writing signed by the parties hereto or their respective successors in
interest.
20. Survival. In the event that the Agreement is terminated before the Term has expired, the
rights of defense, indemnity, to be held harmless and to restoration shall survive, as shall any
claim that arose under the Agreement before the date of termination.
21. Arbitration. In connection with any right of arbitration specifically provided in this
Agreement, and unless otherwise agreed by the parties in writing, the arbitration shall take
place in West Dover, Vermont, and shall be conducted according to the applicable rules of
the American Arbitration Association. If the parties cannot agree on an arbitrator, each party
shall select one arbitrator and the two arbitrators so chosen shall choose the third person.
Unless otherwise specified herein, the parties shall jointly bear all costs of arbitration. All
arbitration shall be binding.
22. Taxes. West Lake shall pay any and all real and personal property taxes levied against the
fees paid by Mount Snow for services provided by West Lake.
23. Authority of Parties. West Lake and Mount Snow hereby represent, warrant and affirm that
they have full authority to execute this Agreement. They further represent, warrant and
affirm to each other that the Agreement is a binding and enforceable obligation.
24. Assignment. West Lake shall not assign its right, title and interest hereunder to any third
party except with the prior written consent of Mount Snow, which may be refused for any
reason. Notwithstanding the foregoing, West Lake may assign and transfer any or all of its
right, title and interest hereunder provided that the assignee agrees in writing to assume all of
West Lake's obligations hereunder, to any entity wholly owned and controlled by West Lake;
or to the purchaser of all or substantially all of the assets of West Lake, or to an entity that
merges or consolidates with or into West Lake or into which West Lake is merged or
consolidated.
[Signatures on following page]

IN WITNESS WHEREOF, the parties have executed this Agreement under seal, as of
this ____ day of _______________, _______.

MOUNT SNOW LTD.

__________________________
Witness:

By:____________________________
Name:
Title:
Hereunto Duly Authorized

STATE OF VERMONT
COUNTY OF _________

At West Dover, Vermont, this __ day of ____________, _______________________, duly

authorized officer of Mount Snow Ltd., personally appeared and s/he acknowledged this
instrument by his/her sealed and subscribed, to be his/her free act and deed and the free act and
deed of Mount Snow Ltd..
Before me, _______________________________
Notary Public:
My Commission Expires:

[Signatures continue on following page]

WEST LAKE WATER PROJECT, LLC

__________________________
Witness

By:____________________________
Name:
Title:
Hereunto Duly Authorized

STATE OF VERMONT
COUNTY OF ___________

At West Dover, Vermont, this ___ day of _______________, ____________________, duly

authorized officer of West Lake Water Project LLC, personally appeared and s/he acknowledged
this instrument by s/he sealed and subscribed, to be s/he free act and deed and the free act and
deed of West Lake Water Project LLC.
Before me, _______________________________
Notary Public:
My Commission Expires:

EXHIBIT B
Premises Legal Description

18

Schedule A

12614155v.7

EXHIBIT C
Pipeline Agreement

19

EXHIBIT D
Encumbrances

20

EXHIBIT E
Form of SNDA

12613823v.8

21