10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended April 29, 2007
	or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from        to              .

Commission File Number 1-13507

American Skiing Company

(Exact name of registrant as specified in its charter)

Delaware	04-3373730
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

136 Heber Avenue, #303

P.O.  Box 4552

Park City, Utah 84060

(Address of principal executive offices)

(Zip Code)

(435) 615-0340

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of June 1, 2007, 31,758,343 shares of common stock were issued and outstanding; of which 14,760,530 shares were Class A common stock.

Table of Contents

Part I - Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Statements of Operations and Changes in Accumulated Deficit for the 13 weeks ended April 30, 2006 and April 29, 2007 (unaudited)		3
	Condensed Consolidated Statements of Operations and Changes in Accumulated Deficit for the 39 weeks ended April 30, 2006 and April 29, 2007 (unaudited)		4
	Condensed Consolidated Balance Sheets as of July 30, 2006 and April 29, 2007 (unaudited)		5
	Condensed Consolidated Statements of Cash Flows for the 39 weeks ended April 30, 2006 and April 29, 2007 (unaudited)		7
	Notes to Condensed Consolidated Financial Statements (unaudited)		8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	General		24
	Liquidity and Capital Resources		26
	Results of Operations		27
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		32
Item 4.	Controls and Procedures		32
Part II – Other Information
Item 1A.		Other Risk Factors	33
Item 4.	Submission of Matters to Security Holders		33
Item 5.	Other Information		33
Item 6.	Exhibits		34

2

Part I - Financial Information

Item 1 Financial Statements

American Skiing Company and Subsidiaries

Condensed Consolidated Statements of Operations and Changes in Accumulated Deficit

(In thousands, except per share amounts)

	13 weeks ended
	April 30, 2006			April 29, 2007
	(unaudited)			(unaudited)
Net revenues:
Resort	$	46,978		$	48,847
Real estate	1,173			2,867
Total net revenues	48,151			51,714
Operating expenses:
Resort	23,305			23,108
Real estate	1,038			1,466
Marketing, general and administrative	7,628			17,603
Depreciation and amortization	5,086			4,700
Total operating expenses	37,057			46,877
Income from operations	11,094			4,837
Interest income	161			572
Interest expense	(12,177		)	(14,203		)
Loss from continuing operations, net of taxes of $0 for 2006 and 2007	(922		)	(8,794		)
Income from discontinued operations, net of taxes of $0 for 2006 and $3,127 for 2007 (Note 10)	30,335			202,497
Net income	$	29,413		$	193,703
Accumulated deficit, beginning of period	$	(670,400	)	$	(742,805	)
Net income	29,413			193,703
Accumulated deficit, end of period	$	(640,987	)	$	(549,102	)
Basic and diluted net income (loss) per common share
Loss from continuing operations	$	(0.03	)	$	(0.28	)
Income from discontinued operations	0.37			$	2.33
Net income attributable to common stockholders	$	0.34		$	2.05
Basic and diluted weighted average common shares outstanding	31,738			31,749

See accompanying Notes to Condensed Consolidated Financial Statements

3

American Skiing Company and Subsidiaries

Condensed Consolidated Statements of Operations and Changes in Accumulated Deficit

(In thousands, except per share amounts)

	39 weeks ended
	April 30, 2006			April 29, 2007
	(unaudited)			(unaudited)
Net revenues:
Resort	$	89,542		$	91,307
Real estate	2,979			4,767
Total net revenues	92,521			96,074
Operating expenses:
Resort	55,777			57,329
Real estate	3,467			3,248
Marketing, general and administrative	22,227			32,607
Depreciation and amortization	11,365			10,290
Total operating expenses	92,836			103,474
Loss from operations	(315		)	(7,400		)
Interest income	173			590
Interest expense	(35,776		)	(40,920		)
Gain on sale of property	169			—
Loss from continuing operations, net of taxes of $0 for 2006 and 2007	(35,749		)	(47,730		)
Income from discontinued operations, net of taxes of $0 for 2006 and $3,127 for 2007 (Note 10)	11,642			181,161
Net income (loss)	$	(24,107	)	$	133,431
Accumulated deficit, beginning of period	$	(616,880	)	$	(682,533	)
Net income (loss)	(24,107		)	133,431
Accumulated deficit, end of period	$	(640,987	)	$	(549,102	)
Basic and diluted net income (loss) per common share
Loss from continuing operations	$	(1.13	)	$	(1.50	)
Income from discontinued operations	0.37			2.92
Net income (loss) attributable to common stockholders	$	(0.76	)	$	1.42
Basic and diluted weighted average common shares outstanding	31,738			31,742

See accompanying Notes to Condensed Consolidated Financial Statements

4

American Skiing Company and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

	July 30, 2006		April 29, 2007
	(unaudited)		(unaudited)
Assets
Current assets
Cash and cash equivalents	$	6,269	$	64,414
Restricted cash	2,679		232
Accounts receivable, net	6,273		10,918
Inventory	4,115		1,398
Prepaid expenses and other	2,885		2,416
Assets held for sale (Note 10)	—		91,400
Deferred income taxes	3,923		2,015
Total current assets	26,144		172,793
Property and equipment, net	330,231		117,609
Real estate developed for sale	2,191		1,540
Intangible assets, net	6,249		6,035
Deferred financing costs, net	5,361		—
Other assets	12,488		7,438
Total assets	$	382,664	$	305,415

(continued on next page)

See accompanying Notes to Condensed Consolidated Financial Statements

5

	July 30, 2006			April 29, 2007
	(unaudited)			(unaudited)
Liabilities and Stockholders’ Deficit
Current liabilities
Current portion of long-term debt	$	9,286		$	1,382
Accounts payable and other current liabilities	42,155			39,357
Deposits and deferred revenue	25,144			6,352
Liabilities related to assets held for sale (Note 10)	—			18,890
Subordinated notes and debentures	—			81,200
Total current liabilities	76,585			147,181
Long-term debt, net of current portion	198,021			1,133
Subordinated notes and debentures	113,685			—
Other long-term liabilities	12,259			2,578
Deferred income taxes	3,923			2,015
Mandatorily Redeemable 8½% Series B Convertible Participating Preferred Stock, par value of $0.01 per share; 150,000 shares authorized, issued, and outstanding (redemption value of $0)	—			—
Mandatorily Redeemable Convertible Participating 12% Series C-1 Preferred Stock, par value of $0.01 per share; 40,000 shares authorized, issued, and outstanding, including cumulative dividends (redemption value of $71,530 and $78,144, respectively)	71,320			78,085
Mandatorily Redeemable 15% Nonvoting Series C-2 Preferred Stock, par value of $0.01 per share; 139,453 shares authorized, issued, and outstanding, including cumulative dividends (redemption value of $287,624 and $321,115, respectively)	286,801			320,882
Mandatorily Redeemable Nonvoting Series D Participating Preferred Stock, par value of $0.01 per share; 5,000 shares authorized; no shares issued or outstanding	—			—
Total liabilities	762,594			551,874
Stockholders’ deficit
Common stock, Class A, par value of $0.01 per share; 15,000,000 shares authorized; 14,760,530 shares issued and outstanding	148			148
Common stock, par value of $0.01 per share; 100,000,000 shares authorized;16,977,753 and 16,997,813 shares issued and outstanding, respectively	170			170
Additional paid-in capital	302,285			302,325
Accumulated deficit	(682,533		)	(549,102		)
Total stockholders’ deficit	(379,930		)	(246,459		)
Total liabilities and stockholders’ deficit	$	382,664		$	305,415

See accompanying Notes to Condensed Consolidated Financial Statements

6

American Skiing Company and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

	39 weeks ended
	April 30, 2006			April 29, 2007
	(unaudited)			(unaudited)
Cash flows from operating activities
Net income (loss)	$	(24,107	)	$	133,431
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	11,365			10,290
Amortization of deferred financing costs and accretion of discount and dividends on mandatorily redeemable preferred stock	36,169			41,491
Non-cash interest on junior subordinated notes	9,012			9,607
Non-cash (increase) decrease in fair value of interest rate swap agreement	(1,710		)	1,250
Phantom Equity Plan compensation expense	217			10,498
Gain from sale of resort assets	(357		)	(10		)
Cash flows from discontinued operations (Note 10)	33,121			(188,006		)
Decrease (increase) in assets:
Restricted cash	(107		)	1,984
Accounts receivable, net	(2,477		)	(3,109		)
Inventory	(486		)	339
Prepaid expenses and other	883			218
Real estate developed for sale	18			(767		)
Other assets	(108		)	240
Increase (decrease) in liabilities:
Accounts payable and other current liabilities	2,859			4,040
Deposits and deferred revenue	(672		)	(5,592		)
Other long-term liabilities	(51		)	(3,552		)
Net cash provided by operating activities	63,569			12,352
Cash flows from investing activities
Capital expenditures	(4,098		)	(9,655		)
Proceeds from sale of property	1,164			248
Proceeds from sale of resorts	—			300,935
Investments in discontinued operations (Note 10)	(2,594		)	(6,006		)
Net cash provided by (used) in investing activities	(5,528)			285,522
Cash flows from financing activities
Proceeds from resort senior credit facilities	47,475			50,340
Repayment of resort senior credit facilities	(62,068		)	(242,320		)
Repayment of long-term debt	(2,022		)	(1,737		)
Payments of subordinated debt	—			(39,277		)
Proceeds from exercise of stock options	—			40
Financing activities of discontinued operations (Note 10)	(23,556		)	(6,775		)
Net cash used in financing activities	(40,171		)	(239,729		)
Net increase in cash and cash equivalents	17,870			58,145
Cash and cash equivalents, beginning of period	6,216			6,269
Cash and cash equivalents, end of period	$	24,086		$	64,414
Supplemental disclosures of cash flow information:
Cash paid for interest	$	20,005		$	30,452
Acquisition of equipment held under capital leases	4,637			4,216
Addition of interest to principal outstanding for New Junior Subordinated Notes	8,728			9,710

See accompanying Notes to Condensed Consolidated Financial Statements

7

American Skiing Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

1.  General

American Skiing Company (“ASC”), a Delaware corporation, and its subsidiaries (collectively, the “Company”) own and operate resort facilities, real estate development companies, golf courses, ski and golf schools, retail shops, and other related companies. The Company has historically conducted its resort operations through its wholly owned subsidiaries which operated the following ski resorts during the 39 weeks ended April 29, 2007 and the year ended July 30, 2006 (“fiscal 2006”): Sugarloaf/USA and Sunday River in Maine, Attitash in New Hampshire, Killington/Pico and Mount Snow in Vermont, The Canyons in Utah, and Steamboat in Colorado.  The Company has historically conducted its real estate development operations through its wholly owned subsidiary, American Skiing Company Resort Properties (“Resort Properties”), and Resort Properties’ subsidiaries, including Grand Summit Resort Properties, Inc. (“Grand Summit”) and The Canyons Resort Properties, Inc.

The Company reports its results of operations in two business segments, resort operations and real estate operations.  The Company’s fiscal year is a fifty-two week or fifty-three week period ending on the last Sunday of July.  Fiscal 2006 and fiscal 2007 are fifty-two week reporting periods, with each quarter consisting of 13 weeks. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included.

On March 1, 2007, the Company completed the sale of its subsidiary Steamboat Ski & Resort Corporation (“Steamboat Corporation”) to Intrawest Holdings S.A.R.L. and Steamboat Acquisition Corp. (the “Steamboat Sale”).  On April 4, 2007, the Company completed the sale of its subsidiaries, Mount Snow, Ltd., the owner and operator of the Mount Snow ski resort, and LBO Holding, Inc., the owner and operator of the Attitash ski resort, to Peak Resorts, Inc. (the “Mount Snow/Attitash Sale”).  On May 11, 2007, the Company completed the sale of the assets of its subsidiaries, Killington, Ltd., and Pico Ski Area Management Company, Inc., to MBT Killington, LLC, AMSC Killington, LLC, and SP II Resort, LLC, as tenants-in-common (the “Killington/Pico Sale”).  The Company has accounted for these sales in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets.” Accordingly, all results from operations for Steamboat, Mount Snow, Attitash and Killington/Pico for the 13 and 39 weeks ended have been removed from continuing operations and classified as discontinued operations in the accompanying condensed consolidated statements of operations.    Because the Killington/Pico Sale occurred subsequent to periods presented herein, the assets and liabilities related to Killington and Pico have been reclassified as held for sale in the accompanying condensed consolidated balance sheets as of April 29, 2007.

Results for interim periods are not indicative of the results expected for the year due to the seasonal nature of the Company’s business.  Due to the seasonality of the ski industry, the Company typically incurs significant operating losses in its resort operating segment during its first and fourth fiscal quarters.  The unaudited condensed consolidated financial statements should be read in conjunction with the following notes and the Company’s consolidated financial statements included in its Form 10-K for the fiscal year ended July 30, 2006 filed with the Securities and Exchange Commission on October 30, 2006.

2.  Significant Accounting Policies

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting periods.  Areas where significant judgments are made include, but are not limited to: allowances for doubtful accounts, long-lived asset valuations and useful lives, inventory valuation reserves, litigation and claims reserves, and deferred income tax asset valuation allowances.  Actual results could differ materially from these estimates.  The following are the Company’s significant accounting policies:

8

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of ASC and its wholly owned subsidiaries.  All significant intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all highly liquid financial instruments with an original maturity to the Company of three months or less to be cash equivalents.  Cash equivalents, which consisted of short-term certificates of deposit, totaled approximately $0.7 million as of July 30, 2006 and April 29, 2007, respectively.

Restricted Cash

Restricted cash consists of deposits received and held in escrow related to pre-sales of real estate developed for sale, guest advance deposits for lodging reservations, and cash held in cash collateral accounts by lenders on behalf of the real estate companies.  The cash becomes available to the Company when the real estate units are sold, the lodging services are provided, or upon approval of expenditures by lenders.

Inventory

Inventory is stated at the lower of cost (first-in, first-out method) or market, and consists primarily of retail goods, food, and beverage products.

Property and Equipment

Property and equipment are carried at cost, net of accumulated depreciation, amortization, and impairment charges. Depreciation and amortization are calculated using the straight-line method over the assets’ estimated useful lives which range from 9 to 40 years for buildings, 3 to 12 years for machinery and equipment, 5 to 30 years for lifts, lift lines, and trails, and 10 to 50 years for land improvements.  Assets held under capital lease obligations are amortized over the shorter of their useful lives or their respective lease lives, unless a bargain purchase option exists or title transfers to the Company at the end of the lease, in which case, the assets are amortized over their estimated useful lives. Due to the seasonality of the Company’s business, the Company records a full year of depreciation and amortization relating to its winter resort operating assets during the second and third quarters of the Company’s fiscal year.

Real Estate Developed for Sale

The Company capitalizes as real estate developed for sale the original acquisition cost of land, direct construction and development costs, property taxes, interest incurred on costs related to real estate under development, and other related costs (engineering, surveying, landscaping, etc.) until the property has been developed to the point it is ready for sale.  The cost of sales for individual parcels of real estate or quarter and eighth share units within a project is determined using the relative sales value method.  Selling costs are charged to expense in the period in which the related revenue is recognized.

Goodwill and Other Intangible Assets

As prescribed in SFAS No. 142, “Goodwill and Other Intangible Assets,” certain indefinite-lived intangible assets, including trademarks, are no longer amortized but are subject to annual impairment assessments.  An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value.  Definite-lived intangible assets continue to be amortized on a straight-line basis over their estimated useful lives of 31 years, and assessed for impairment utilizing guidance provided by SFAS No. 144.

As of July 30, 2006 and April 29, 2007, other intangible assets consist of the following (in thousands):

	July 30, 2006			April 29, 2007
Definite-lived Intangible Assets:
Lease agreements	$	1,853		$	1,853
Less accumulated amortization	(462		)	(506		)
	1,391			1,347
Indefinite-lived Intangible Assets:
Trade names	170			—
Water rights	4,688			4,688
Intangible Assets, net	$	6,249		$	6,035

9

Amortization expense related to intangible assets was approximately $15,000 for both the 13 weeks ended April 30, 2006 and the 13 weeks ended April 29, 2007, and approximately $44,000 for both the 39 weeks ended April 30, 2006 and the 39 weeks ended April 29, 2007.  Future amortization expense related to definite-lived intangible assets is estimated to be approximately $58,000 for each of the next five fiscal years.

Long-Lived Assets

In accordance with SFAS No. 144, long-lived assets, such as property, equipment, and definite-lived intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset.  If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Assets Held for Sale and Discontinued Operations

Assets to be disposed of are classified separately as assets held for sale when their sale becomes probable as defined by the provisions of SFAS No. 144, at which time they are reported at the lower of the carrying amount or fair value less costs to sell, and depreciation ceases.  Revenues and expenses from operations related to the assets to be sold are classified as results from discontinued operations.  Interest expense related to debt to be assumed or debt required to be paid off as part of a sale transaction is also classified as results from discontinued operations.   No general allocation of interest expense on other debt is included in results from discontinued operations.

Revenue Recognition

Resort revenues include sales of lift tickets, skier development, golf course and other recreational activities fees, sales from restaurants, bars, and retail and rental shops, and lodging and property management fees (real estate rentals). Daily lift ticket revenue is recognized on the day of purchase.  Lift ticket season pass revenue is recognized on a straight-line basis over the ski season, which is the Company’s second and third quarters of its fiscal year.  The Company’s remaining resort revenues are generally recognized as the services are performed.  Real estate revenues are recognized under the full accrual method when title has been transferred, initial and continuing investments are adequate to demonstrate a commitment to pay for the property, and no continuing involvement exists.  Amounts received from pre-sales of real estate are recorded as restricted cash and deposits and deferred revenue in the accompanying condensed consolidated balance sheets until the earnings process is complete.

Stock Option Plan

Effective August 1, 1997, the Company established a fixed stock option plan, the American Skiing Company Stock Option Plan (the “Plan”), which is more fully described in Note 2 of the Company’s fiscal 2006 Annual Report on Form 10-K, that provides for the grant of incentive and non-qualified stock options for the purchase of up to 8,688,699 shares of the Company’s common stock by officers, management employees, members of the board of directors of the Company and its subsidiaries, and other key persons (eligible for nonqualified stock options only) as designated by the Compensation Committee.  The Plan has no restricted stock option component.  Additionally, there have been no options granted since July 2001.

The following table summarizes stock option activity during the 39 weeks ended April 29, 2007:

	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at July 30, 2006	3,811,187		$	4.26
Granted	—
Exercised	(20,060	)	$	2.00
Forfeited	—
Outstanding at April 29, 2007	3,791,127		$	4.27	2.49
Options vested at April 29, 2007	3,791,127		$	4.27	2.49
Exercisable at April 29, 2007	3,791,127		$	4.27	2.49

10

During fiscal 1998, the Company granted non-qualified options under the Plan to certain key members of management to purchase 672,010 shares of common stock with an exercise price of $2.00 per share when the fair value of the stock was estimated to be $18.00 per share. The majority of these options (511,530 shares) were granted to members of senior management and were 100% vested on the date of grant.  Accordingly, the Company recognized stock compensation expense of $8.1 million in fiscal 1998 relating to the grants based on the intrinsic value of the option of $16.00 per share.  Under these senior management grant agreements, the Company also agreed to pay the optionees a fixed tax “bonus” in the aggregate of $5.8 million to provide for certain fixed tax liabilities that the optionees would incur upon exercise.  The liability for this fixed tax bonus has been reduced to reflect $5.6 million in tax bonus payments made through April 29, 2007 in connection with options exercised, including $0.2 million paid during the 13 weeks then ended associated with the exercise of options to purchase 20,060 shares.  The remaining $0.2 million tax bonus liability is reflected in accounts payable and other current liabilities in the accompanying condensed consolidated balance sheet as of April 29, 2007.  The remainder of these original $2.00 options (160,480 shares) were granted under the Plan to certain members of management and were expensed as they vested through July 30, 2003.

In all periods presented, the Company’s stock options, including options exercised during the quarter and options outstanding and exercisable at April 29, 2007, had no intrinsic value.

Derivative Financial Instruments

All derivatives are recognized in the condensed consolidated balance sheets at their fair values.  During fiscal 2005, the Company entered into an interest rate swap agreement covering a notional amount of $95.0 million related to its Resort Senior Credit Facility.  The agreement is adjusted to market value at each reporting period and the increase or decrease is reflected in the condensed consolidated statement of operations.  For the 13-week period ended April 29, 2007, the Company recognized $0.8 million of non-cash loss from market value adjustments to this agreement, compared to $0.7 million of non-cash income in the corresponding period of the prior year.  For the 39-week period ended April 29, 2007, the Company recognized $1.3 million of non-cash loss from market value adjustments to this agreement, compared to $1.7 million of non-cash income in the corresponding period of the prior year.  As described in Note 10, the interest rate swap agreement was terminated on March 1, 2007, at which time it had a market value of $0.8 million.

Accounting for Variable Interest Entities

On May 14, 2004, Resort Properties completed the restructuring of its real estate term loan facility from Fleet National Bank, Ski Partners, LLC, and Oak Hill Capital Partners (the “Real Estate Term Facility’).  As a result of the restructuring, a new business venture called SP Land Company, LLC (“SP Land”) was created by Ski Partners, LLC, Resort Properties, and Killington, Ltd. (“Killington”) (an ASC subsidiary).  As part of the restructuring, certain developmental land parcels at the Killington resort and cash with a combined carrying value of approximately $2.2 million were transferred by Resort Properties and Killington into SP Land Company, LLC, together with all indebtedness, including related interest and fees, under the Real Estate Term Facility held by Fleet National Bank and Ski Partners, LLC (Tranche A and B of the Real Estate Term Facility) totaling $55.4 million.   Collectively, Killington and Resort Properties own 25% of the membership interests of SP Land.  The remaining 75% of the membership interests in SP Land is owned by Ski Partners, LLC, together with a preferential interest in SP Land of approximately $37.2 million.  In accordance with FIN No. 46R, “Consolidation of Variable Interest Entities”, and APB No. 18, SP Land is a variable interest entity and is accounted for on the equity method because it does not meet the requirements for consolidation.

As part of the restructuring of the Real Estate Term Facility, Killington also contributed all of its interest in approximately 256 acres of developmental real estate into a joint venture entity called Cherry Knoll Associates, LLC (“Cherry Knoll”).   Each of SP Land and Killington own 50% of the membership interests in Cherry Knoll.  In addition, Killington maintains a preferential distribution interest in Cherry Knoll of $1.5 million.  In accordance with FIN No. 46R and APB No. 18, Cherry Knoll is a variable interest entity and is accounted for on the equity method because it does not meet the requirements for consolidation.

11

In October 2004, the Company, through one of its subsidiaries, acquired a 49% interest in SS Associates, LLC (“SS Associates”) by contributing its rights to purchase a building to SS Associates and by making a refundable security deposit of $0.4 million.  In accordance with FIN No. 46R, “Consolidation of Variable Interest Entities”, the Company consolidates SS Associates because it meets the requirements of a variable interest entity for which the Company is the primary beneficiary.

SS Associates purchased a building in October 2004 for $3.5 million (including costs to close) through cash and long-term debt of $2.5 million.  The loan is secured by the building and has 59 monthly payments of $29,000 and a final payment in October 2009 of $1.5 million and bears interest at 6.5% per year.  SS Associates is obligated on the loan and none of the Company’s remaining subsidiaries are obligated.  SS Associates leases the building to the Company for $0.5 million per year.  The non-ASC owned interest in SS Associates of $0.6 million (owned in part by certain members of mid-level management at the Company’s Killington resort) is included in liabilities related to assets held for sale in the accompanying condensed consolidated balance sheet as of April 29, 2007.

In connection with the Killington/Pico Sale, the Company sold its ownership interests in SP Land, Cherry Knoll and SS Associates.

Reclassifications

Certain amounts in the prior period’s financial statements and related notes have been reclassified to conform to the current period’s presentation.

Recently Issued Accounting Standards

In June 2005, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” (“FIN No. 48”), effective for fiscal years beginning after December 15, 2006.  This Interpretation clarifies the accounting for uncertainty in income taxes recognized in accordance with FASB Statement No. 109, “Accounting for Income Taxes.”  Specifically, it prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.  The accounting provisions of FIN No. 48 will become effective beginning with the first quarter of the Company’s 2008 fiscal year.  The Company is currently reviewing the requirements of FIN No. 48 and has not yet determined the impact, if any, on its financial position or results of operations.

In 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements in Current Year Financial Statements” (“SAB No. 108”), which requires registrants to consider the effect of all carry-over and reversing effects of prior-year misstatements when quantifying errors in current year financial statements.  The SAB does not change the SEC staff’s previous guidance on evaluating the qualitative materiality of errors.  The SAB allows registrants to record the effects of adopting the guidance as a one-time cumulative-effect adjustment to retained earnings no later than the end of the first year of adoption.  The accounting provisions of SAB No. 108 are effective no later than the end of the Company’s 2007 fiscal year, at which time the Company intends to adopt them.  The Company is currently reviewing the requirements of SAB No. 108 and has not yet determined the impact, if any, on its financial position or results of operations.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”.  SFAS No. 157 defines fair value, establishes a framework for measuring fair value, and requires enhanced disclosures about fair value measurements.  SFAS No. 157 applies when other accounting pronouncements require or permit fair value measurements; it does not require new fair value measurements.  SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those years.  The Company is currently evaluating the impact of adopting SFAS No. 157 on its consolidated financial position and results of operations.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”.  SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value.  SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007.  The Company is currently evaluating the impact of adopting SFAS No. 159 on its consolidated financial position and results of operations.

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3.  Net Income (loss) per Common Share

Net income (loss) per common share for the 13 weeks and for the 39 weeks ended April 30, 2006 and April 29, 2007, respectively, was determined based on the following data (in thousands):

	13 weeks ended April 30, 2006			13 weeks ended April 29, 2007			39 weeks ended April 30, 2006			39 weeks ended April 29, 2007
Income (Loss)
Loss from continuing operations	$	(922	)	$	(8,794	)	$	(35,749	)	$	(47,730	)
Less: amounts allocated to participating securities	—			—			—			—
Loss attributable to common stockholders	$	(922	)	$	(8,794	)	$	(35,749	)	$	(47,730	)
Income from discontinued operations	30,335			202,497			11,642			181,161
Less: amounts allocated to participating securities	(18,720		)	(128,462		)	—			(88,497		)
Income attributable to common stockholders	$	11,615		$	74,035		$	11,642		$	92,664
Net income (loss)	29,413			193,703			(24,107		)	133,431
Less: amounts allocated to participating securities	(18,720		)	(128,462		)	—			(88,497		)
Net income (loss) attributable to common stockholders	$	10,693		$	65,241		$	(24,107	)	$	44,934
Shares
Basic and diluted weighted average common shares outstanding	31,738			31,749			31,738			31,742

The Company accounts for its earnings per share under Emerging Issues Task Force Issue No. 03-06, “Participating Securities and the Two Class Method Under FAS No. 128, Earnings per Share”.  The Company’s mandatorily redeemable 12% Series C-1 Convertible Participating Preferred Stock (“Series C-1 Preferred Stock”) is a participating security because it may participate in dividends with common stock.  Accordingly, net income is allocated to each security based on the ratio of the number of shares if-converted to the total number of shares.  In periods when a net loss is incurred, the net loss is not allocated to the Series C-1 Preferred Stock because it does not have a contractual obligation to share in the losses of the Company, and the impact of inclusion would be anti-dilutive.

As of April 30, 2006 and April 29, 2007, the Company had 14,760,530 shares of its Class A common stock outstanding, respectively, which are convertible into shares of the Company’s common stock. The shares of the Company’s common stock issuable upon conversion of the shares of the Company’s Class A common stock have been included in the calculation of the weighted average common shares outstanding.  As of April 30, 2006 and April 29, 2007, the Company had 40,000 shares of its Series C-1 Preferred Stock outstanding, respectively, which are convertible into shares of the Company’s common stock.  If converted at their liquidation preferences as of April 30, 2006 and April 29, 2007, these convertible preferred shares would convert into approximately 55,561,000 and 62,515,000 shares of common stock, respectively.  For the 13 weeks and 39 weeks ended April 30, 2006 and April 29, 2007, the common shares into which these preferred securities are convertible have not been included in the dilutive share calculation as the impact of their inclusion would be anti-dilutive.  The Company also had options outstanding to purchase 3,811,187 and 3,791,127 shares of its common stock under the Plan as of April 30, 2006 and April 29, 2007, respectively.  These stock options are excluded from the dilutive share calculation, as the impact of their inclusion would be anti-dilutive.

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4.  Segment Information

In accordance with SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information”, the Company has classified its operations into two business segments; resort operations and real estate operations.  Revenues at each of the resorts are derived from the same lines of business which include lift ticket sales, food and beverage, retail sales including rental and repair, skier development, lodging and property management, golf, other summer activities and miscellaneous revenue sources.  The performance of the resorts is evaluated on the same basis of profit or loss from operations.  Additionally, each of the resorts has historically produced similar operating margins and attracts the same class of customer.  Based on the similarities of the operations at each of the resorts, the Company has concluded that the resorts satisfy the aggregation criteria set forth in SFAS No. 131.  The Company’s real estate revenues are derived from the sale, resale, and leasing of interests in real estate at its resorts and the sale of other real property interests.  Revenues and operating losses from continuing operations for each of the two business segments excluding discontinued operations are as follows (in thousands):

	13 weeks ended April 30, 2006			13 weeks ended April 29, 2007			39 weeks ended April 30, 2006			39 weeks ended April 29, 2007
Revenues:
Resort	$	46,978		$	48,847		$	89,542		$	91,307
Real estate	1,173			2,867			2,979			4,767
Total	$	48,151		$	51,714		$	92,521		$	96,074
Income (loss) from continuing operations:
Resort	$	(1,057	)	$	(10,195	)	$	(35,261	)	$	(49,249	)
Real estate	135			1,401			(488		)	1,519
Total	$	(922	)	$	(8,794	)	$	(35,749	)	$	(47,730	)

Identifiable assets for the two business segments and a reconciliation of the totals reported for the operating segments to the totals reported in the condensed consolidated balance sheets is as follows (in thousands):

	July 30, 2006		April 29, 2007
Identifiable Assets:
Resort	$	347,493	$	202,102
Real estate	29,687		8,551
	$	377,180	$	210,653
Assets:
Identifiable assets for segments	$	377,180	$	210,653
Assets held for sale	—		91,400
Intangible and deferred income tax assets not allocated to segments	5,484		3,362
Total consolidated assets	$	382,664	$	305,415

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5.  Long-Term Debt

Resort Senior Credit Facility

The Company entered into agreements dated November 24, 2004 with Credit Suisse, GE Capital, and other lenders whereby the lenders provided the Company with a $230.0 million senior secured loan facility (“Resort Senior Credit Facility”) consisting of a revolving credit facility and two term loan facilities.  The proceeds of the Resort Senior Credit Facility were used to repay in full the previously existing resort senior credit facility and redeem the Company’s $120.0 million senior subordinated notes (“Senior Subordinated Notes”), as well as to pay fees and expenses related to the transaction.  The Resort Senior Credit Facility consisted of the following:

·Revolving Facility - $40.0 million, including letter of credit (L/C) availability of up to $6.0 million.  The amount of availability under this facility is correspondingly reduced by the amount of each L/C issued.

·First Lien Term Loan - $85.0 million borrowed on the funding date of November 24, 2004.

·Second Lien Term Loan - $105.0 million borrowed on the funding date of November 24, 2004.

The Revolving Facility and First Lien Term Loan were provided under a single credit agreement (collectively, the “First Lien Credit Agreement”), maturing in November 2010 and earning interest, at the option of the Company, either at a rate equal to the prime rate, as publicly quoted in The Wall Street Journal, plus 3.5%, or at a rate equal to LIBOR (as defined) plus 4.5%, payable quarterly   The First Lien Term Loan required 23 quarterly principal payments of $212,500 beginning on January 15, 2005 and a final payment of $80.1 million in November 2010. The Revolving Facility was comprised of two sub-facilities, each in the amount of $20.0 million and each with separate fees for the unused portion of the facilities in the amounts of 1.0% and 4.5% per annum, respectively.  The Second Lien Term Loan was provided under a separate credit agreement (“Sec ond Lien Credit Agreement”), maturing in November 2011, earning interest at a rate equal to the prime rate, as publicly quoted in The Wall Street Journal, plus 7.0%, or at a rate equal to LIBOR (as defined) plus 8.0%, payable quarterly and principal was due upon maturity.

The Revolving Facility and the First Lien Term Loan obligations under the First Lien Credit Agreement and the related guarantees are secured by a first-priority security interest in substantially all of the Company’s assets, other than assets held by Grand Summit, and the Company’s obligations under the Second Lien Credit Agreement and the Company’s subsidiaries’ obligations under the related guarantees were secured by a second-priority security interest in the same assets.

The Resort Senior Credit Facility contains affirmative, negative, and financial covenants customary for this type of credit facility, which includes maintaining a minimum level of EBITDA (as defined), limiting the Company’s capital expenditures, maintaining a minimum ratio of appraised asset value to debt, and having a zero balance on the Revolving Credit Facility (excluding L/Cs) on April 1 of each year.  The Resort Senior Credit Facility also contains events of default customary for such financings, including but not limited to nonpayment of amounts when due; violation of covenants; cross default and cross acceleration with respect to other material debt; change of control; dissolution; insolvency; bankruptcy events; and material judgments.  Some of these events of default allow for grace periods or are qualified by materiality concepts.  The Resort Senior Credit Facility requires the Company to offer to prepay the loans with proceeds of certain material asset sales and recovery events, certain proceeds of debt, 50% of excess cash flow, and proceeds from the issuance of capital stock. The Resort Senior Credit Facility also restricts the Company’s ability to pay cash dividends on or redeem its common and preferred stock.

On March 1, 2007, in conjunction with its completion of the Steamboat Sale, the Company permanently repaid all outstanding obligations under the $85.0 million First Lien Term Loan and the $105.0 million Second Lien Term Loan.  Additionally, with the permanent payoff of all outstanding term loan obligations under the Resort Senior Credit Facility, the Company terminated its interest rate swap agreement and received $0.8 million as the result of the termination.  Also, the Company wrote off the remaining balance of deferred financing costs associated with the Resort Senior Credit Facility, which totaled approximately $4.7 million as of March 1, 2007. Amounts related to deferred financing costs are included in discontinued operations in the accompanying condensed consolidated statements of operations and condensed consolidated statements of cash flows.

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In addition, the Company entered into an amendment of the $40.0 million Revolving Facility under the First Lien Credit Agreement. The amendment to the Revolving Facility, effective through July 29, 2007, provides, among other things, for a reduction of the aggregate commitments available under the facility to $10.0 million and the elimination of the commitment fee thereunder, the elimination of the annual EBITDA covenant through July 29, 2007, and requires the approval by the Revolving Facility lenders of any future advances under the Revolving Facility.  As of April 29, 2007, the Company had $1.4 million in outstanding Letters of Credit with $8.6 million available for additional borrowings under the Revolving Facility.  The Company was in compliance with all financial covenants of the Resort Senior Credit Facility as of April 29, 2007.

Construction Loan Facility

The Company has historically conducted substantially all of its real estate development through subsidiaries, each of which is a wholly-owned subsidiary of Resort Properties.  Grand Summit owned the existing Grand Summit Hotel project at Steamboat, which was primarily financed through a $110.0 million Senior Construction Loan (“Senior Construction Loan”).  Due to construction delays and cost increases at the Steamboat Grand Hotel project, on July 25, 2000, Grand Summit entered into the $10.0 million Subordinated Construction Loan, which was subsequently increased to $10.6 million in December 2003 (“Subordinated Construction Loan”).  Together, the Senior Construction Loan and the Subordinated Construction Loan comprise the “Construction Loan Facility”.    The Construction Loan Facility was without recourse to ASC and its resort operating subsidiaries and is collateralized by significant real estate assets of Resort Properties and its subsidiaries, including the assets and stock of Grand Summit, the Company’s primary hotel development subsidiary.

The outstanding principal amounts under the Construction Loan Facility were payable incrementally as quarter and eighth share unit sales were closed, based on a predetermined per unit amount, which approximated between 70% and 80% of the net proceeds of each closing up until the March 18, 2006 auction held at Steamboat and then 85% of the net proceeds from all units sold at the auction.  Mortgages against the commercial core units and unsold unit inventory at the Grand Summit Hotel at Steamboat and a promissory note from the Steamboat Homeowners Association secured by the Steamboat Grand Hotel parking garage collateralized the Construction Loan Facility, and were subject to covenants, representations, and warranties customary for that type of construction facility.

On February 28, 2007, in anticipation of the Steamboat Sale, the Company’s subsidiary, Grand Summit, repaid all outstanding obligations (consisting only of $3.2 million of deferred interest obligations) under its Construction Loan Facility.  In conjunction with the repayment of all obligations under the Construction Loan Facility, the Company terminated all agreements relating to the Construction Loan Facility.     Also in connection with this transaction, Grand Summit re-purchased approximately $0.7 million in seller financing notes previously assigned to and serviced by an affiliate of the lenders under the Construction Loan Facility.

Other Long-Term Debt

The Company has $2.5 million of other long-term debt as of April 29, 2007, which was comprised of capital lease obligations.  In addition, as described in Note 12, on May 11, 2007 the Company completed the sale of the assets of Killington.  As part of this sale, the purchasers assumed $1.9 million of Killington’s capital lease obligations.  These additional amounts are classified as liabilities related to assets held for sale in the accompanying condensed consolidated balance sheet.

6.  Subordinated Notes and Debentures

11.3025% Junior Subordinated Notes

On July 15, 2001, the Company entered into a securities purchase agreement with Oak Hill Capital Partners to assist the Company in meeting its current financing needs.  Pursuant to the terms of the securities purchase agreement, which closed on August 31, 2001, the Company issued, and Oak Hill Capital Partners purchased, $12.5 million aggregate principal amount of Junior Subordinated Notes (“Junior Subordinated Notes”), which were convertible into shares of the Company’s Non-voting Series D Participating Preferred Stock (“Series D Preferred Stock”).  The Junior Subordinated Notes were unsecured and bear interest at a rate of 11.3025%, which compounds annually and is due and payable at the maturity of the Junior Subordinated Notes.  The Junior Subordinated Notes were amended in connection with the Company’s entry into the Resort Senior Credit Facility on November 24, 2004 to extend their maturity to May 2012.  On April 4, 2007, the outstanding principal and interest balance due under the Junior Subordinated Notes, totaling approximately $22.8 million, was repaid in full using proceeds from the Mount Snow/Attitash Sale.   Interest expense on these notes is included in discontinued operations in the accompanying condensed consolidated statements of operations.

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New Junior Subordinated Notes

In connection with the refinancing of the Resort Senior Credit Facility, the Company entered into an exchange agreement with the holder of the Company’s Series A Preferred Stock and issued $76.7 million of new junior subordinated notes due May 2012 (“New Junior Subordinated Notes”) to the holder of the Series A Preferred Stock in exchange for all outstanding shares of Series A Preferred Stock.  The New Junior Subordinated Notes accrue interest at a rate of 11.25%, gradually increasing to a rate of 13.0% in 2012.  No principal or interest payments are required to be made on the New Junior Subordinated Notes until maturity.  However, interest is added to the principal outstanding on January 1 of each year.  On January 1, 2006, and January 1, 2007, $8.7 million and $9.7 million, respectively, of interest was added to the principal outstanding.  The New Junior Subordinated Notes are subordinated to all of the Company’s other debt obligations and all trade payables incurred in the ordinary course of business.  None of the Company’s subsidiaries are obligated on the New Junior Subordinated Notes, and none of the Company’s assets serve as collateral for repayment of the New Junior Subordinated Notes.  The indenture governing the New Junior Subordinated Notes also restricts the Company from paying cash dividends or making other distributions to its stockholders subject to certain limited exceptions.  On April 23, 2007, the Company paid $3.5 million in accrued interest and $16.5 million of principal on these notes, using a portion of the proceeds from the Mount Snow/Attitash Sale.  The outstanding balance and accrued interest on the New Junior Subordinated Notes were $79.5 million and $1.7 million, respectively, as of April 29, 2007.  As discussed in Note 12, on May 11, 2007, in conjunction with the Killington/Pico sale, the outstanding principal balance under the New Junior Subordinated Notes, together with accrued interest of $0.5 million, was repaid in full.  Because of differences in the methods of accrual and payment of interest on these notes, the Company realized a gain of approximately $0.3 million upon the partial repayment, and, subsequent to quarter-end, approximately $1.5 million upon the final repayment of these notes.  Interest expense on these notes is included in discontinued operations in the accompanying condensed consolidated statements of operations.

Other Subordinated Debentures

Other subordinated debentures owed by the Company to institutions and individuals totaled $6.2 million as of April 29, 2007, are related to Killington/Pico , are unsecured and are classified as liabilities related to assets held for sale in the accompanying condensed consolidated balance sheet.  As discussed in Note 12, on May 10, 2007, in conjunction with the Killington/Pico sale, all outstanding obligations due under these debentures were repaid in full.

7.  Mandatorily Redeemable Securities

Series A Preferred Stock

As of July 25, 2004, the Company had 36,626 shares of Series A Preferred Stock outstanding.  In connection with the Company’s entry into the Resort Senior Credit Facility on November 24, 2004 all outstanding shares of the Series A Preferred Stock were exchanged for New Junior Subordinated Notes in the principal amount of $76.7 million.

Series B Preferred Stock

Pursuant to a Preferred Stock Subscription Agreement (the “Series B Agreement”) dated July 9, 1999, the Company sold 150,000 shares of its 8.5% Series B Convertible Participating Preferred Stock (“Series B Preferred Stock”) on August 9, 1999 to Oak Hill for $150.0 million.

On August 31, 2001, in connection with a recapitalization transaction, the Series B Preferred Stock was stripped of all of its economic and governance rights and preferences, with the exception of its right to elect up to six directors of ASC.  The Company issued mandatorily redeemable Series C-1 Preferred Stock and Series C-2 Preferred Stock with an aggregate initial face value of $179.5 million which was equal to the accrued liquidation preference of the Series B Preferred Stock immediately before being stripped of its right to such accrued liquidation preference.  The Series B Preferred Stock currently remains outstanding but will lose its remaining rights, including voting rights, upon redemption of the Series C-1 Preferred Stock and Series C-2 Preferred Stock.

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Series C-1 Preferred Stock and Series C-2 Preferred Stock

On July 15, 2001, the Company entered into a securities purchase agreement with Oak Hill to assist the Company in meeting its current financing needs.  Pursuant to the terms of the securities purchase agreement, which closed on August 31, 2001, the Company issued to Oak Hill two new series of Preferred Stock: (i) $40.0 million face value of Series C-1 Preferred Stock; and (ii) $139.5 million face value of Series C-2 Preferred Stock.  The initial face values of the Series C-1 Preferred Stock and Series C-2 Preferred Stock correspond to the accrued liquidation preference of the Series B Preferred Stock immediately before being stripped of its right to such accrued liquidation preference.  The Series C-1 Preferred Stock and Series C-2 Preferred Stock are entitled to annual preferred dividends of 12% and 15%, respectively.  At the Company’s option, dividends can either be paid in cash or accumulated in arrears.  The Series C-1 Preferred Stock is convertible into common stock at a price of $1.25 per share, subject to adjustments.  The Series C-2 Preferred Stock is not convertible.  Both the Series C-1 Preferred Stock and Series C-2 Preferred Stock are mandatorily redeemable on July 31, 2007 to the extent that the Company has legally available funds to effect such redemption.  As of April 29, 2007, cumulative dividends in arrears totaled approximately $38.1 million and $181.6 million for the Series C-1 Preferred Stock and Series C-2 Preferred Stock, respectively.  The Series C-1 Preferred Stock and Series C-2 Preferred Stock have certain voting rights as defined in the securities certificates of designation relating thereto and rank senior in liquidation preference to all common stock and Class A common stock outstanding as of April 29, 2007, and to any common stock, Class A common stock and Series D Preferred Stock issued in the future, and rank pari passu with each other.  The Series C-1 Preferred Stock is also participating preferred stock and consequently has the right to participate in any dividends paid or payable to the common stock of the Company on an as-if-converted basis.

On March 1, 2007, the holders of the Company’s Series C-1 Preferred Stock and Series C-2 Preferred Stock (collectively, the “Holders”) terminated its agreement with the lenders under the Resort Senior Credit Facility that the Holders would not exercise any remedies as a result of the failure to redeem the Series C-1 Preferred Stock and the Series C-2 Preferred Stock at their final maturities.

Series D Preferred Stock

The Company has authorized the issuance of 5,000 shares of Series D Preferred Stock.  As of April 29, 2007, no shares of Series D Preferred Stock have been issued.  The Series D Preferred Stock is junior in right of preference to the Series C-1 Preferred Stock and Series C-2 Preferred Stock, is not entitled to preferred dividends, and is redeemable at the option of the shareholders.

8.  Dividend Restrictions and Stockholders Agreement

Dividend Restrictions

Borrowers under the Resort Senior Credit Facility, which include ASC, are restricted from paying cash dividends on any of their preferred or common stock.

Stockholders Agreement

The Company, Oak Hill, and Mr. Leslie B. Otten (“Mr. Otten”) entered into a Stockholders Agreement, dated as of August 6, 1999, amended on July 31, 2000 (as amended, the “Stockholders Agreement”), pursuant to which each of Mr. Otten and Oak Hill agreed to vote its capital stock of the Company so as to cause there to be:

·Six directors of the Company nominated by Oak Hill, so long as Oak Hill owns 80% of the shares of common stock it owned as of July 30, 2000 on a fully diluted basis, such number of directors decreasing ratably with the percentage of Oak Hill’s ownership of the common stock on a fully diluted basis compared to such ownership as of July 30, 2000; and

·Two directors of the Company nominated by Mr. Otten, so long as Mr. Otten owns 15% of the shares of common stock outstanding on a fully diluted basis, and one director so nominated, so long as Mr. Otten owns at least 5% of the shares of common stock outstanding on a fully diluted basis.

As of April 29, 2007, Oak Hill owned not less than 80% of the shares of common stock it owned as of July 30, 2000, on a fully diluted basis, and Mr. Otten owned not less than 15% of the shares of common stock outstanding on a fully diluted basis.

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The Stockholders Agreement provides that, so long as Oak Hill owns at least 20% of the outstanding shares of common stock on a fully diluted basis, the affirmative vote of at least one Oak Hill director is required prior to the approval of (i) the Company’s annual budget, (ii) significant executive personnel decisions, (iii) material actions likely to have an impact of 5% or more on the Company’s consolidated revenues or earnings, amendments to the Company’s articles of incorporation or by-laws, (iv) any liquidation, reorganization, or business combination of the Company, (v) the initiation of certain material litigation, and (vi) any material financing of the Company.

Under the Stockholders Agreement, Oak Hill and Mr. Otten have agreed not to dispose of their securities of the Company if, (i) as a result of such transfer, the transferee would own more than 10% of the outstanding shares of common stock of the Company (on a fully diluted basis), unless such transfer is approved by the Board of Directors (x) including a majority of the Common Directors (as defined in the Stockholders Agreement), or (y) the public stockholders of the Company are given the opportunity to participate in such transfer on equivalent terms, (ii) the transferee is a competitor of the Company or any of its subsidiaries, unless such transfer is approved by the Board of Directors, or (iii) such transfer would materially disadvantage the business of the Company.  The Stockholders Agreement provides for additional customary transfer restrictions applicable to each of Mr. Otten and Oak Hill as well as standstill provisions applicable to Oak Hill.

The Stockholders Agreement provides that, upon the Company’s issuance of shares of common stock or securities convertible into common stock, Mr. Otten and Oak Hill will have the right to purchase at the same price and on the same terms, the number of shares of common stock or securities convertible into common stock necessary for each of them to maintain individually the same level of beneficial ownership of common stock of the Company on a fully diluted basis as it owned immediately prior to the issuance.  This anti-dilution provision is subject to customary exceptions.

On February 26, 2007, Mr. Otten resigned from the board of directors of the Company.

9.  Phantom Equity Plan

ASC has established the American Skiing Company Phantom Equity Plan (“LTIP”).  Certain of ASC’s executive officers participate in the LTIP.  Participants are entitled to a payment on awards granted under the LTIP, to the extent vested upon a Valuation Event (as defined below) or in certain cases upon termination of employment.  The amount of any award is subject to a specified minimum amount, but is based ultimately on the Equity Value, as defined by the LTIP, obtained through a Valuation Event.  A Valuation Event is defined in the LTIP as any of the following:  (i) a sale or disposition of a significant asset, or a series of sales or dispositions of significant assets (disregarding any sales or dispositions prior to November 30, 2006), resulting in proceeds to the Company equal to or greater than $300 million as determined by the Board of Directors; (ii) a merger, consolidation, or similar event of the Company other than one (A) in which the Company is the surviving entity or (B) where no Change in Control (as defined in the LTIP) has occurred; (iii) a public offering of equity securities by the Company that yields net proceeds to the Company in excess of $50 million; or (iv) a Change in Control.  All awards under the plan expire if a Valuation Event has not occurred on or prior to December 21, 2011.  The LTIP was originally ratified by the Board of Directors on March 6, 2003, and amended on December 11, 2006.  Compensation expense relating to the LTIP is estimated and recorded based on the probability of the Company achieving a Valuation Event.  The Mount Snow/Attitash Sale, together with the Steamboat Sale, both as discussed in Note 10, constitute a Valuation Event under the LTIP.  The amounts payable to participants in the LTIP, as determined by the Compensation Committee of the Company’s Board of Directors, totaled approximately $12.0 million as of April 29, 2007, and were included in other current liabilities in the accompanying condensed consolidated balance sheet.  On May 31, 2007, this liability was paid in full using proceeds from the Killington Sale.

During the 13 weeks ended April 30, 2006 and April 29, 2007, the Company recorded expenses relating to the LTIP of approximately $0.1 million, and $10.4 million, respectively.  During the 39 weeks ended April 30, 2006 and April 29, 2007, the Company recorded expenses relating to the LTIP of approximately $0.2 million and $10.5 million, respectively. These amounts are included in marketing, general and administrative expenses in the accompanying condensed consolidated statements of operations.

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10.  Assets/Liabilities Held for Sale and Discontinued Operations

Steamboat

On March 1, 2007, the Company completed the Steamboat Sale for the agreed upon cash purchase price of $265.0 million, including approximately $4.0 million in assumed debt and subject to working capital and seasonal earnings adjustments.  In addition, in connection with the sale, the Company sold certain Steamboat-related assets of its subsidiary Grand Summit Resort Properties, Inc. (“Grand Summit”) to Steamboat Corporation.

The sales proceeds of $239.1 million were used first to pay off all outstanding balances due under the Resort Senior Credit Facility, including a 1% fee associated with the prepayment of the Second Lien Term Loan.  As of March 1, 2007, the total balance was $189.2 million, including $82.1 million under the First Lien Term Loan, $105.0 million under the Second Lien Term Loan, and $2.1 million in accrued interest and fees.  Repayment in full of the Resort Senior Credit Facility also resulted in the termination of the Company’s interest rate swap agreement, resulting in a payment to the Company of its market value of $0.8 million.  Repayment of the Resort Senior Credit Facility also resulted in the write-off of all remaining deferred financing costs, which totaled approximately $4.7 million as of March 1, 2007.  The Company also paid the remaining balance of deferred interest due under its Construction Loan Facility ($3.2 million as of March 1, 2007), which was collateralized by remaining assets at the Steamboat Grand Hotel which were sold as part of the transaction.

The Company has accounted for the Steamboat Sale in accordance with SFAS No. 144. Accordingly, the results of operations for Steamboat for the periods ended April 30, 2006 and April 29, 2007 have been removed from continuing operations and classified as discontinued operations.  The $164.6 million gain on sale of Steamboat is included in income from discontinued operations in the accompanying consolidated statement of operations at April 29, 2007.

Mount Snow/Attitash

On April 4, 2007, the Company completed the Mount Snow/Attitash Sale.  The purchase price was $73.5 million, plus assumption of approximately $2.0 million in debt and other liabilities, and was subject to certain working capital and earnings adjustments.   Total proceeds received by the Company, subject to final post-closing working capital and earnings adjustments, were $61.9 million.

The Company used a portion of the net sales proceeds to repurchase at par all of its issued and outstanding Junior Subordinated Notes ($22.8 million, including accrued interest, at April 4, 2007).  The Company also used a portion of the proceeds from the sale to repay a portion of its New Junior Subordinated Notes ($20.0 million, including accrued interest, at April 23, 2007).  The Company separately obtained the consent of its senior secured lender, General Electric Capital Corporation, to the Mount Snow/Attitash Sale and the aforementioned redemptions.

The Company has accounted for the Mount Snow/Attitash Sale in accordance with SFAS No. 144.  Accordingly, the results of operations for Mount Snow and Attitash for the periods ended April 30, 2006 and April 29, 2007 have been removed from continuing operations and classified as discontinued operations.  The $20.8 million gain on sale of Mount Snow/Attitash is included in income from discontinued operations in the accompanying consolidated statement of operations at April 29, 2007.

Killington/Pico

On February 16, 2007, the Company and its subsidiaries Killington, Ltd. and Pico Ski Area Management Company, Inc. entered into a definitive agreement with SP Land to sell the assets of Killington/Pico (the “Killington/Pico Sale”).  The purchase price to be paid for Killington/Pico is $83.5 million in cash plus the assumption of approximately $5.0 million in debt and other liabilities.  The purchase price is subject to certain customary adjustments, including certain season pass and working capital adjustments, set forth in the Purchase Agreement.  A closing escrow of $3.0 million will be withheld from the purchase price until July 1, 2008, to fund any post-closing indemnification obligations of the Seller. On May 11, 2007, the Company completed the Killington/Pico Sale (see Note 12 “Subsequent Events” for additional information).

The Company has accounted for the sale of the Killington and Pico resorts in accordance with SFAS No. 144.  Accordingly, the assets and liabilities related to Killington and Pico have been reclassified as held for sale in the accompanying consolidated balance sheets as of April 29, 2007, and all results from operations for Killington and Pico for the 13 and 39 weeks ended have been removed from continuing operations and classified as discontinued operations in the accompanying consolidated statements of operations.  The Company has recorded the disposal group at its carrying value, which is lower than its fair value less costs to sell.

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The components of the assets and liabilities held for sale as of April 29, 2007 related to Killington/Pico are as follows (in thousands):

	April 29, 2007
Assets held for sale
Cash equivalents	$	210
Restricted cash	1,514
Accounts receivable	1,462
Inventory	992
Prepaid expenses	727
Property & equipment, net	83,840
Intangibles	170
Other assets	2,485
	$	91,400

	April 29, 2007
Liabilities related to assets held for sale
Accounts payable and accrued liabilities	$	7,576
Deposits and deferred revenue	138
Current and long term debt	3,931
Other subordinated notes and debentures	6,208
Other long term liabilities	1,037
	$	18,890

Summary operating results for the Steamboat, Mount Snow, Attitash, and Killington/Pico resorts, which have historically been included in the Company’s resort segment in its results of operations, and for Grand Summit, which have historically been included in the Company’s real estate segment in its results of operations, for the 13- and 39-week periods ended April 30, 2006 and April 29, 2007, were as follows (in thousands):

	13 weeks ended April 30, 2006		13 weeks ended April 29, 2007			39 weeks ended April 30, 2006		39 weeks ended April 29, 2007
Total revenues	$	108,930	$	70,373		$	197,323	$	153,239
Pre-tax income (loss) from discontinued operations	$	30,335	$	20,190		$	11,642	$	(1,146	)
Gain on sale of discontinued operations	—		185,434			—		185,434
Provision for income taxes	—		(3,127		)	—		(3,127		)
Net income from discontinued operations	$	30,335	$	202,497		$	11,642	$	181,161

The Company expects that the tax effects of the net gain it has generated from the Steamboat Sale, and the Mount Snow/Attitash Sale will be offset by its net operating loss carry-forwards for regular income tax purposes.  As a result, the Company anticipates being subject only to the alternative minimum tax and state tax liabilities and has recorded an estimate of taxes payable based on the alternative minimum tax associated with these transactions.

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11.  Commitments and Contingencies

Certain claims, suits and complaints in the ordinary course of business are pending or may arise against the Company, including all of its direct and indirect subsidiaries.  In the opinion of management, all matters are adequately covered by insurance or, if not covered, are without merit or are of such kind, or involve such amounts as are not likely to have a material effect on the financial position, results of operations or liquidity of the Company if disposed of unfavorably.

As reported in the Company’s consolidated financial statements included in its Form 10-K for the fiscal year ended July 30, 2006, the Company is currently in dispute with Wolf Mountain Resorts, LC, one of its landlords at The Canyons, regarding the related lease agreement.  The Utah District Court has granted a temporary restraining order and amended a previous injunction to prohibit Wolf from terminating the lease until the Court finds that the Company has breached the lease and that Wolf is entitled to terminate the lease as a result of such breach.  Even though the Company strongly believes that it is presently in compliance all material provisions of its lease with Wolf, there can be no assurance that the Utah District Court will agree that it is not in default or that it has taken the steps necessary to cure any default.  In the event that the District Court finds that the Company is in default and the actions it has taken are not sufficient to cure the defaults raised by Wolf under the lease, and if the Company is unable to effect a cure of such defaults within any remaining cure period, the remedies available to Wolf may include damages to Wolf (which the Company believes to be minimal and/or speculative) and/or termination of the lease with Wolf.  Termination of the lease would significantly reduce the value of the Company’s operation at The Canyons, and would materially curtail, if not completely eliminate, its ability to obtain recurring revenues from those assets. Wolf may have certain rights to repurchase for fair market value certain of the Company’s assets that are used in conjunction with its operation of The Canyons.  Wolf’s right to terminate the lease is subject to certain rights of cure and foreclosure in favor of the Company’s lenders.

The Company has entered into agreements with 54 non-resort employees whereby a monetary incentive has been offered in exchange for an individual’s continued employment with the Company through a specified date (the “Employee Retention Agreements”).  The Company’s estimated financial obligation under these agreements totals approximately $1.2 million, and is being amortized over the contracted retention periods (varying from July 2007 through July 2008).  Approximately $0.2 million attributable to these commitments has been accrued through April 29, 2007, and is included in other current liabilities in the accompanying condensed consolidated balance sheets.

The Company is in the process of implementing compensation arrangements with certain of the Company’s employees, including members of its senior management.   These may include payment of cash bonuses if all remaining resort properties are under contract for their sale by a given date and following the closing of all such sales.  The Company is also in the process of amending certain of the Company’s employment agreements with senior management.

With respect to additional commitments and contingencies, reference should be made to the Company’s consolidated financial statements and disclosures thereto included in its Form 10-K for the fiscal year ended July 30, 2006 filed with the Securities and Exchange Commission on October 30, 2006, its Form 10-Q for the quarter ended October 29, 2006 filed with the Securities and Exchange Commission on December 8, 2006 and its Form 10-Q for the quarter ended January 28, 2007 filed with the Securities and Exchange Commission on March 14, 2007.

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12.  Subsequent Events

The Company completed the Killington/Pico Sale on May 11, 2007.  The purchase price was $83.5 million, plus assumption of approximately $5.0 million in debt and other liabilities, and was subject to certain working capital adjustments.  Total proceeds received by the Company, subject to a final post-closing working capital adjustment, were $85.2 million, after preliminary adjustments for working capital and debt assumed by the buyer.  Of this amount, $3.0 million will be held in an indemnity escrow account until June 30, 2008.

On May 11, 2007, in connection with the Killington/Pico Sale, the Company fully repaid the remaining principal balance of the Company’s New Junior Subordinated Notes, ($80.0 million, including accrued interest).  Because of differences in the methods of accrual and payment of interest on these notes, the Company realized a gain upon their final repayment of approximately $1.5 million.  Also, in anticipation of the closing, on May 10, 2007, the Company paid the remaining balances of certain debt obligations of Killington/Pico.  These totaled $6.3 million, including subordinated notes and debentures of $6.2 million, and accrued interest of $0.1 million.

On June 4, 2007, the Company entered into a definitive agreement (the “Sunday River/Sugarloaf Sale”) with Boyne USA, Inc. (“Boyne”) to purchase, all of the Company’s stock in Sunday River Skiway Corporation, the owner and operator of the Sunday River ski resort and Sugarloaf Mountain Corporation, the owner and operator of the Sugarloaf/USA ski resort.  The purchase price to be paid by Boyne is $77.0 million in cash, plus the assumption of approximately $2.0 million in debt and other liabilities.  Of this amount, $2.0 million will be held in an indemnity escrow account for one year following the closing date.  The purchase price is subject to certain customary adjustments, including reimbursement of the Company for pre-closing capital expenditures as set forth in the Purchase Agreement.  The Company expects the transaction to close on or before July 31, 2007.

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Item 2

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

Forward-Looking Statements

Certain statements contained in this report constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act).  These forward-looking statements are not based on historical facts, but rather reflect our current expectations concerning future results and events.  Similarly, statements that describe our objectives, plans or goals are or may be forward-looking statements.  We have tried, wherever possible, to identify such statements by using words such as “anticipate”, “assume”, “believe”, “expect”, “intend”, “plan”, and words and terms of similar substance in connection with any discussion of operating or financial performance.  Such forward-looking statements involve a number of risks and uncertainties.  In addition to factors discussed above, other factors that could cause actual results, performances or achievements to differ materially from those projected include, but are not limited to, the following: recent significant reductions in the size of our operating business; the failure to redeem all of the shares of our Series C Preferred Stock in accordance with their terms; the loss or termination or our leasehold rights at The Canyons as a result of any material defaults under governing lease documents that have not been cured within applicable cure periods; changes in regional and national business and economic conditions affecting both our resort operating and real estate segments; competition and pricing pressures; negative impact on demand for our products resulting from terrorism and availability of air travel (including the effect of airline bankruptcies); adverse weather conditions regionally and nationally; changes in weather patterns resulting from global warming; seasonal business activity; increased gas and energy prices; changes to federal, state and local regulations affecting both our resort operating and real estate segments; failure to renew land leases and forest service permits; disruptions in water supply that would impact snowmaking operations; the loss of any of our executive officers or key operating personnel; and other factors listed from time to time in our documents we have filed with the Securities and Exchange Commission.  We caution the reader that this list is not exhaustive.  We operate in a changing business environment and new risks arise from time to time.  The forward-looking statements included in this document are made only as of the date of this document and under Section 27A of the Securities Act and Section 21E of the Exchange Act, we do not have or undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.

General

The following is our discussion and analysis of financial condition and results of operations for the 13 and 39 weeks ended April 29, 2007.  As you read the information below, we urge you to carefully consider our fiscal 2006 Annual Report on Form 10-K filed on October 30, 2006, our quarter ended October 29, 2006 Quarterly Report on Form 10-Q filed on December 8, 2006, our quarter ended January 28, 2007 Quarterly Report on Form 10-Q filed on March 14, 2007 and our unaudited condensed consolidated financial statements and related notes contained elsewhere in this report.  Historical information contained therein and herein may not be indicative of results in future periods.

We are organized as a holding company and operate through various subsidiaries.   We develop, own and operate a range of hospitality-related businesses, including skier development programs, hotels, golf courses, restaurants and retail locations.  We also develop, market and operate ski-in/ski-out alpine villages, townhouses, condominiums, and quarter and eighth share ownership hotels.  We report our results of operations in two business segments: resort operations and real estate operations.

We have mandatorily redeemable convertible participating 12% preferred stock (Series C-1 Preferred Stock) with an accreted redeemable value of $78.1 million as of April 29, 2007, and mandatorily redeemable 15% non-voting preferred stock (Series C-2 Preferred Stock) with an accreted redeemable value of $321.1 million as of April 29, 2007, each of which mature and are redeemable on July 31, 2007, to the extent that we have legally available funds to effect such redemption.   There can be no assurance that we will be able to retire, redeem or refinance our preferred stock on or before its redemption date.

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Since December 2006, we have either sold or entered into contracts for the sale of all of our resort assets other than The Canyons resort in Park City, Utah.  We have used the proceeds from completed resort sales to retire substantially all of our indebtedness, with the exception of capital leases and letter of credit obligations relating to our remaining resorts at The Canyons, Sunday River and Sugarloaf/USA. On June 4, 2007, we entered into a binding contract for the sale of Sunday River and Sugarloaf/USA to Boyne USA, Inc.  Until our remaining resorts are each sold, we intend to continue operating them in accordance with our historical practices.  We also intend to continue honoring all of our contractual commitments and we will maintain adequate capitalization of our resorts through the proceeds available to us from resort sales which we have already completed.

As a result of a stockholders’ agreement and the terms of the preferred stock held by Oak Hill Capital Partners, L.P. and certain related entities (Oak Hill), and Leslie B. Otten (Mr. Otten), the holder of all of the 14,760,530 shares of Class A common stock, Oak Hill has the right to appoint a majority of our board of directors.  Oak Hill also owns all of our outstanding Series C-1 Preferred Stock and Series C-2 Preferred Stock.  Oak Hill may have interests different from the interests of the holders of our common stock.

Asset Sales and Reductions in Indebtedness

On March 1, 2007, we completed the sale of Steamboat Ski & Resort Corporation to Intrawest Holdings S.A.R.L. (the “Steamboat Sale”) for the agreed upon cash purchase price of $265.0 million, including approximately $4.0 million in assumed debt and subject to working capital and seasonal earnings adjustments. In addition, in connection with the sale, certain Steamboat-related assets of the Company’s subsidiary Grand Summit Resort Properties, Inc. were also sold.

On March 1, 2007, in conjunction with the completion of the Steamboat Sale, we permanently repaid all outstanding obligations under the $85.0 million term portion of the first lien loan and the $105.0 million second lien term loan (together with the $40.0 million revolving portion of the first lien term loan, collectively the “Resort Senior Credit Facility”). We terminated all agreements relating to the second lien term loan. In addition, we entered into an amendment of the $40.0 million revolving credit portion of the first lien loan (the “Revolving Facility”). The amendment to the Revolving Facility provides, among other things, for a reduction of the aggregate commitments available under the facility to $10.0 million and the elimination of the commitment fee thereunder, the elimination of the annual EBITDA covenant through July 29, 2007, and requires the approval by the Revolving Facility lenders of any future advances under the revolving credit facility.   In conjunction with the permanent payoff of all outstanding obligations under the Resort Senior Credit Facility, we terminated the interest rate swap agreement with Credit Suisse and received $0.8 million on March 1, 2007, as the result of the termination.

On April 4, 2007, we completed the sale of Mount Snow, Ltd., the owner and operator of the Mount Snow ski resort, and LBO Holding, Inc., the owner and operator of the Attitash ski resort, to Peak Resorts, Inc. (the “Mount Snow/Attitash Sale”).  The purchase price was $73.5 million, plus assumption of approximately $2.0 million in debt and other liabilities, and was subject to certain working capital and earnings adjustments.  Total proceeds received, subject to final post-closing working capital and earnings adjustments, were $61.9 million.

We used a portion of the net proceeds from the Mount Snow/Attitash Sale to repurchase at par all of our issued and outstanding 11.3025% Convertible Subordinated Notes Due 2012 (the “Junior Subordinated Notes”) ($22.8 million, including accrued interest, at April 4, 2007).  We also used a portion of the proceeds from the Mount Snow/Attitash Sale to repay a portion of our Junior Subordinated Notes Due 2012 (the “ New Junior Subordinated Notes”) ($20.0 million, including accrued interest, at April 23, 2007).  We separately obtained the consent of the lender under its Senior Resort Credit Facility to the Mount Snow/Attitash Sale and the aforementioned redemptions.

On May 11, 2007, we completed the sale of the assets of Killington, Ltd., and Pico Ski Area Management Company, Inc., to MBT Killington, LLC, AMSC Killington, LLC, and SP II Resort, LLC, as tenants-in-common (the “Killington/Pico Sale”).  The purchase price was $83.5 million, plus assumption of approximately $5.0 million in debt and other liabilities, and was subject to certain working capital adjustments.  Total proceeds received, subject to a final post-closing working capital adjustment, were $85.2 million, after preliminary adjustments for working capital and debt assumed by the buyer.  Of this amount, $3.0 million will be held in an indemnity escrow account until June 30, 2008.

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Also on May 11, 2007, we used $80.0 million of the proceeds from the Killington/Pico Sale to repay all of our remaining issued and outstanding New Junior Subordinated Notes.  In anticipation of the closing, we repaid long term notes payable of Killington, Ltd. of $3.9 million on March 23, 2007.  Also, in connection with the closing, we redeemed subordinated notes and debentures related to Killington totaling $6.2 million on May 10, 2007.   We had previously obtained the consent of the lender under its Senior Resort Credit Facility to the Killington/Pico Sale and the aforementioned redemptions

On June 4, 2007, we entered into a definitive agreement (the “Sunday River/Sugarloaf Sale”) with Boyne USA, Inc. (“Boyne”) to purchase, all of the Company’s stock in Sunday River Skiway Corporation, the owner and operator of the Sunday River ski resort and Sugarloaf Mountain Corporation, the owner and operator of the Sugarloaf/USA ski resort.  The purchase price to be paid by Boyne is $77.0 million in cash, plus the assumption of approximately $2.0 million in debt and other liabilities.  Of this amount, $2.0 million will be held in an indemnity escrow account for one year following the closing date.  The purchase price is subject to certain customary adjustments, including reimbursement of the Company for pre-closing capital expenditures as set forth in the Purchase Agreement.  We expect the transaction to close on or before July 31, 2007.

Liquidity and Capital Resources

Short-Term Liquidity Needs

Our primary short-term liquidity issue relates to the redemption of our Series C-1 and Series C-2 Preferred Stock. Our Series C-1 Preferred Stock has an accreted redeemable value of $78.1 million as of April 29, 2007, and our Series C-2 Preferred Stock has an accreted redeemable value of $321.1 million as of April 29, 2007.  Each of our Series C-1 and Series C-2 Preferred Stock mature and are redeemable on July 31, 2007, to the extent that we have legally available funds to effect such redemption.   We do not anticipate that we will be able to retire, redeem or refinance our preferred stock on or before its redemption date.  Consequently, cash availability for working capital needs, capital expenditures, and acquisitions, is significantly limited.

In addition to the redemption of our preferred stock, our primary short-term ski resort and real estate liquidity needs involve funding seasonal working capital requirements and funding our fiscal 2008 capital improvement program.

Our primary source of short term liquidity for working capital, capital improvements and any redemption of our Series C Preferred Stock are cash flows from operating activities of our remaining resort operating subsidiaries, the currently available net cash proceeds from the sales of the Steamboat, Mount Snow, Attitash, Killington and Pico ski resorts and any net cash proceeds to be received from the sale of our Sunday River and Sugarloaf ski resorts.

Long-Term Liquidity Needs

Our primary long-term liquidity needs are to fund skiing-related capital improvements at certain of our resorts.  For fiscal 2008, we anticipate our on-going capital spending to be approximately $6.0 million with the exclusion of Steamboat, Mount Snow, Attitash, and Killington/ Pico, each year, and $3.0 million after further excluding Sunday River and Sugarloaf, excluding the contractual obligations outlined below.  There is a considerable degree of flexibility in the timing and, to a lesser degree, scope of our growth capital program.  Although we can defer specific capital expenditures for extended periods, continued growth of skier visits, revenues, and profitability will require continued capital investment in on-mountain improvements.

We finance on-mountain capital improvements through resort cash flows, capital leases, proceeds from sales of non-operating assets along with, on a going forward basis, the net proceeds received from the sale of Steamboat, Killington, Mount Snow and Attitash.  The size and scope of the capital improvement program will generally be determined annually depending upon the strategic importance and expected financial return of certain projects and future availability of cash flows from each season’s resort operations.

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Contractual Obligations

Our non-cancelable, minimum contractual obligations related to continuing operations as of April 29, 2007, including estimated interest, where applicable, were as follows (in thousands):

	Payments due by period
Obligation	Total		Less than 1 Year		1 to 3 Years		3 to 5 Years		After 5 Years
Capital lease obligations	$	3,163	$	1,636	$	824	$	96	$	607
Mandatorily Redeemable 12% Series C-1 Preferred Stock	80,533		80,533		—		—		—
Mandatorily Redeemable 15% Series C-2 Preferred Stock	333,388		333,388		—		—		—
Operating leases	3,134		730		840		230		1,334
The Canyons infrastructure costs	1,159		1,159		—		—		—
The Canyons golf course obligations	3,291		3,291		—		—		—
The Canyons obligation to build ski lifts	2,200		—		2,200		—		—
Total	$	426,868	$	420,737	$	3,864	$	326	$	1,941

The operations of a substantial portion of our resort activities are dependent upon leased real estate.  The Company leases certain land and facilities used in the operations of its resorts under several operating lease arrangements that expire at various times from the year 2010 through the year 2060.  The related lease payments are generally based on a percentage of revenues.  Since these obligations are contingent on future revenues, they are not included in the table above. In addition, the Company is subject to additional one-time payments ranging from $1.0 million to $3.0 million upon achievement of incremental annual skier visit levels.  These amounts are not included in the table above since it is unknown as to the timing and probability of these payments.

Off-Balance Sheet Arrangements

Other than as set forth under “Contractual Obligations” above and our interest rate swap agreement described above under “Resort Liquidity”, we do not have any off-balance sheet transactions, arrangements, or obligations (including contingent obligations) that have, or are reasonably likely to have, a material current or future effect on our financial position, results of operations, business prospects, liquidity, capital expenditures, or capital resources.

Results of Operations

On March 1, 2007, the Company completed the Steamboat Sale.In addition, in connection with the sale, certain Steamboat-related assets of the Company’s subsidiary Grand Summit Resort Properties, Inc. were also sold.  On April 4, 2007, the Company completed the Mount Snow/Attitash Sale and on May 11, 2007, the Company completed the Killington/Pico Sale.  All results of operations related to Steamboat, Mount Snow, Attitash and Killington/Pico have been classified as “Income from discontinued operations” in the accompanying financial statements and are therefore excluded in the following discussion and analysis of Results of Operations for the 13 week and 39 week periods ended April 30, 2006 and April 29, 2007.

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Results of Operations

For the 13 weeks ended April 30, 2006 compared to the 13 weeks ended April 29, 2007

Resort Operations:

The components of resort operations for the 13 weeks ended April 30, 2006 and the 13 weeks ended April 29, 2007 are as follows (unaudited, in thousands):

	13 weeks ended April 30, 2006			13 weeks ended April 29, 2007			Variance
Net resort revenues	$	46,978		$	48,847		$	1,869
Cost of resort operations	23,305			23,108			(197		)
Marketing, general and administrative	7,628			17,603			9,975
Depreciation and amortization	5,086			4,700			(386		)
Total resort operating expenses	36,019			45,411			9,392
Income from resort operations	10,959			3,436			(7,523		)
Interest expense, net	(12,016		)	(13,631		)	(1,615		)
Loss from continuing resort operations	$	(1,057	)	$	(10,195	)	$	(9,138	)

Resort revenues were approximately $48.8 million as compared to $46.9 million, an increase of $1.9 million, or 4.1%, for the 13 weeks ended April 29, 2007 when compared to the 13 weeks ended April 30, 2006.  Total skier visits increased 6%, due primarily to increases at eastern resorts in response to abundant natural snowfall, beginning in mid-February.

Our resort segment generated a $10.2 million loss for the 13 weeks ended April 29, 2007, compared to a $1.1 million loss for the 13 weeks ended April 30, 2006.  This $9.1 million increase in the loss resulted primarily from the net effect of the following:

Increases in costs:
	(i)	$10.0 million increase in marketing, general and administrative expenses, due primarily to a $10.4 million provision for Phantom Equity Plan compensation;
	(ii)	$1.6 million increase in net interest expense;
Partially offset by increases revenues and decreases in costs:
	(iii)	$1.9 million increase in revenues;
	(iv)	$0.2 million decrease in cost of resort operations; and
	(v)	$0.4 million decrease in depreciation and amortization expense.

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Real Estate Operations:

The components of real estate operations for the 13 weeks ended April 30, 2006 and the 13 weeks ended April 29, 2007 are as follows (unaudited, in thousands):

	13 weeks ended April 30, 2006		13 weeks ended April 29, 2007		Variance
Net real estate revenues	$	1,173	$	2,867	$	1,694
Cost of real estate operations	1,038		1,466		428
Income from resort operations	135		1,401		1,266
Interest expense, net	—		—		—
Income from continuing real estate operations	$	135	$	1,401	$	1,266

Real estate revenues were approximately $2.9 million as compared to $1.2 million, an increase of $1.7 million, or 144%, for the 13 weeks ended April 29, 2007 when compared to the 13 weeks ended April 30, 2006, primarily due to higher amounts of land sales.

Our real estate segment generated income of $1.4 million for the 13 weeks ended April 29, 2007, compared to income from operations of $0.1 million for the 13 weeks ended April 30, 2006.  This $1.3 million improvement results primarily from the net effect of a $1.7 million increase in revenues offset by a $0.4 million increase in cost of real estate operations, both of which are attributable to additional land sales.

Benefit from income taxes:

We recorded no benefit from income taxes for losses from continuing operations for either the 13 weeks ended April 30, 2006 or the 13 weeks ended April 29, 2007.  We believe it is more likely than not that we will not realize income tax benefits from operating losses in the foreseeable future, and therefore, have recorded a full valuation allowance against our existing deferred income tax assets.

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For the 39 weeks ended April 30, 2006 compared to the 39 weeks ended April 29, 2007

Resort Operations:

The components of resort operations for the 39 weeks ended April 30, 2006 and April 29, 2007 are as follows (unaudited, in thousands):

	39 weeks ended
	April 30, 2006			April 29, 2007			Variance
Net resort revenues	$	89,542		$	91,307		$	1,765
Cost of resort operations	55,777			57,329			1,552
Marketing, general and administrative	22,227			32,607			10,380
Depreciation and amortization	11,365			10,290			(1,075		)
Total resort operating expenses	89,369			100,226			10,857
Income (loss) from resort operations	173			(8,919		)	(9,092		)
Interest expense, net	(35,603		)	(40,330		)	(4,727		)
Gain on sale of property	169			—			(169		)
Loss from continuing resort operations	$	(35,261	)	$	(49,249	)	$	(13,988	)

Resort revenues were approximately $91.3 million as compared to $89.5 million, an increase of $1.8 million, or 2.0%, for the 39 weeks ended April 29, 2007 when compared to the 39 weeks ended April 30, 2006.   Total skier visits increased 1%.

Our resort segment incurred a $49.3 million loss for the 39 weeks ended April 29, 2007, compared to a $35.3 million loss for the 39 weeks ended April 30, 2006.  This $14.0 million increase in the loss resulted primarily from the net effect of the following:

Increases in costs and decreases in other income items:
	(i)	$1.6 million increase in cost of resort operations;
	(ii)	$10.4 million increase in marketing, general and administrative expenses, due primarily to a $10.5 million provision for Phantom Equity Plan compensation;
	(iii)	$4.7 million increase in interest expense; and
	(iv)	$0.2 million decrease in gain on sale of property;
Partially offset by increases in revenues and decreases in costs:
	(v)	$1.8 million increase in resort revenues; and
	(vi)	$1.1 million decrease in depreciation expense.

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Real Estate Operations:

The components of real estate operations for the 39 weeks ended April 30, 2006 and April 29, 2007 are as follows (unaudited, in thousands):

	39 weeks ended
	April 30, 2006			April 29, 2007		Variance
Net real estate revenues	$	2,979		$	4,767	$	1,788
Cost of real estate operations	3,467			3,248		(219		)
Loss from real estate operations	(488		)	1,519		2,007
Other income (expense):	—			—		—
Loss from continuing real estate operations	$	(488	)	$	1,519	$	2,007

Real estate revenues increased by $1.8 million in the 39 weeks ended April 29, 2007 when compared to the 39 weeks ended April 30, 2006.  The increase was primarily due to higher land sales.

Our real estate segment generated net income of $1.5 million for the 39 weeks ended April 29, 2007, compared to a loss from operations of $0.5 million for the 39 weeks ended April 30, 2006.  This $2.0 million increase in income from operations results primarily from the net effect of the following:

Increase in revenues and decreases in costs:

(i)$1.8 million increase in land sales

(ii)$0.2 million decrease in cost of real estate operations

Benefit from income taxes:

We recorded no benefit from income taxes for losses from continuing operations for either the 39 weeks ended April 30, 2006 or the 39 weeks ended April 29, 2007.  We believe it is more likely than not that we will not realize income tax benefits from operating losses in the foreseeable future, and therefore, have recorded a full valuation allowance against our existing deferred income tax assets.

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Item 3

Quantitative and Qualitative Disclosures about Market Risk

Through April 29, 2007 there were no material changes in information relating to market risk since our disclosure included in Item 7A of Form 10-K for the fiscal year ended July 30, 2006, as filed with the Securities and Exchange Commission on October 30, 2006.  On March 1, 2007, in connection with the sale of Steamboat, the Company paid off all of its outstanding variable interest rate debt and terminated its interest rate swap agreement.

Item 4

Controls and Procedures

(a)Evaluation of disclosure controls and procedures.  Our Chief Executive Officer and our Chief Financial Officer carried out an evaluation of the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)).  Based on that evaluation, these officers have concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective.

(b)Changes in internal control over financial reporting.  No change occurred in the Company’s internal control over financial reporting (as defined in the Securities Exchange Act of 1934 Rules 13a-15(f) and 15d-15(f)) during the quarterly period ended April 29, 2007 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met.  In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events.  Because of these and other inherent limitations of control systems, there is only reasonable assurance that our controls will succeed in achieving their stated goals under all potential future conditions.

32

Part II - Other Information

Item 1A

Other Risk Factors

We have significantly reduced the size of our operating business.

Following the completion of the Steamboat Sale on March 1, 2007 and Mount Snow/Attitash Sale on April 4, 2007, and the Killington/Pico Sale on May 11, 2007, the size of our operating business has been significantly reduced.   The size of our operating business will be further reduced following the planned sale of our Sunday River and Sugarloaf/USA resorts, currently anticipated to take place on or prior to July 31, 2007.  Although the Company intends to reduce its corporate overhead following these sales, such a reduction may take some time and may not be proportional to the reduction in the Company’s operating income resulting from these sales. As a result, our operating margins may be reduced and we may have less available capital to invest in our remaining resorts. A failure to invest in capital improvements at our resorts could reduce our ability to attract customers and adversely affect our results of operations or ability to sell our remaining resorts on optimal terms.

Item 4

Submission of Matters to Vote of Security Holders

On February 15, 2007, the holders of the Company’s Series C-1 convertible participating preferred stock, the shares of which represented approximately 65.8% of the voting power of the Company’s outstanding capital stock on such date, executed a written consent approving the sale by the Company to Peak Resorts, Inc. of all of the outstanding capital stock of Mount Snow, Ltd., (the owner-operator of the Mount Snow resort) and LBO Holding, Inc., (the owner-operator of the Attitash resort).

On February 16, 2007, the holders of the Company’s Series C-1 convertible participating preferred stock, the shares of which represented approximately 65.8% of the voting power of the Company’s outstanding capital stock on such date, executed a written consent approving the sale by the Company and its subsidiaries Killington, Ltd. (the owner-operator of the Killington resort) and Pico Ski Area Management Company, Inc. (the owner-operator of the Pico resort) of all of the assets comprising the Killington and Pico resorts to SP Land Company, LLC.

Each of the foregoing consents is more fully described in the Schedule 14C filed with the Securities and Exchange Commission on March 9, 2007 and mailed by the Company to its stockholders on or about said date.

Item 5

Other Information

On June 12, 2007, the Compensation Committee of the Board of Directors of the Company approved certain incentive bonus awards for certain of the Company’s named executive officers, including the chief executive officer.  The incentive bonus awards resulted from recently completed sales by the Company of its Steamboat, Mount Snow and Attitash resorts.  Specifically, the approved incentive bonus payments to the Company’s named executive officers were William J. Fair (President and Chief Executive Officer) $1,433,258; Helen E. Wallace (Senior Vice President and Chief Financial Officer) $225,000; and Foster Stewart (Senior Vice President and General Counsel) $858,919.  With respect to Mr. Fair and Mr. Stewart, the Committee determined that the incentive bonus payments will be in lieu of any annual incentive payments under the Company’s annual incentive bonus plan.

33

Item 6

Exhibits

Included herewith are the following exhibits:

Exhibit No.	Description
10.1	Purchase Agreement, dated as of June 4, 2007, by and among American Skiing Company, Sunday River Skiway Corporation, Sugarloaf Mountain Corporation, and S-K-I Ltd., and Boyne USA, Inc.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

34

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	American Skiing Company
Date: June 13, 2007
	By: /s/ William J. Fair
	William J. Fair
	President and Chief Executive Officer
	(Principal Executive Officer)
	By: /s/ Helen E. Wallace
	Helen E. Wallace
	Senior Vice President, Chief
	Financial Officer
	(Principal Financial Officer)

35

EX-10.1

Exhibit 10.1

PURCHASE AGREEMENT

by and among

SUNDAY RIVER SKIWAY CORPORATION

SUGARLOAF MOUNTAIN CORPORATION

S-K-I LTD.

AMERICAN SKIING COMPANY

and

BOYNE USA, INC.

June 4, 2007

TABLE OF CONTENTS

		Page
	ARTICLE I
	CERTAIN DEFINITIONS
1.1	Certain Definitions	1
1.2	Other Capitalized Terms	9
	ARTICLE II
	PURCHASE PRICE AND PAYMENT
2.1	Sale and Purchase of Stock	11
2.2	Payment at the Closing, Subsequent Payment	11
	ARTICLE III
	REPRESENTATIONS AND WARRANTIES OF
	THE SELLERS
3.1	Organization and Qualification	11
3.2	Title to the Stock	12
3.3	Subsidiaries	12
3.4	Binding Obligation	12
3.5	No Default or Conflicts	13
3.6	No Governmental Authorization or Consent Required	13
3.7	Financial Statements	14
3.8	Powers of Attorney	14
3.9	Brokers	14
3.10	Compliance with Laws	14
3.11	Insurance	15
3.12	Litigation	15
3.13	Approvals	15
3.14	Labor Matters	16
3.15	Employee Benefit Plans	16
3.16	Real Property	19
3.17	Tax Matters	22
3.18	Contracts and Commitments	23
3.19	Environmental Matters	25
3.20	Intellectual Property	27
3.21	Related Persons	28
3.22	Condition of and Title to Assets	29

i

3.23	Absence of Certain Changes	30
3.24	Water Rights	30
3.25	No Clubs	30
3.26	Books and Records	30
	ARTICLE IV
	REPRESENTATIONS AND
	WARRANTIES OF THE BUYER
4.1	Organization of the Buyer	31
4.2	Power and Authority	31
4.3	No Conflicts	31
4.4	Purchase for Investment	32
4.5	Litigation	32
4.6	Brokers	32
4.7	Availability of Funds	32
4.8	No Divestitures	32
	ARTICLE V
	EMPLOYEES AND EMPLOYEE-RELATED MATTERS
5.1	Employment Matters	33
5.2	Benefit Plans	33
	ARTICLE VI
	CLOSING
6.1	Closing Date	34
	ARTICLE VII
	CONDITIONS TO OBLIGATIONS OF
	THE BUYER TO CONSUMMATE THE TRANSACTION
7.1	Representations and Warranties; Compliance with Covenants	34
7.2	No Material Adverse Effect	34
7.3	No Injunction	34
7.4	Approvals	35
7.5	Release of Liens	35
7.6	Assignment	35
7.7	Related Documents	35
7.8	FIRPTA	35
7.9	Resignations	35
7.10	Settlement of Accounts	35
7.11	Specimen Title Policies	35

ii

7.12	Approval of Documentation	35
7.13	Opinion and Certificates	36
	ARTICLE VIII
	CONDITIONS TO OBLIGATIONS OF
	THE SELLERS TO CONSUMMATE THE TRANSACTION
8.1	Representations and Warranties; Compliance with Covenants	36
8.2	No Injunction	36
8.3	Approvals	37
8.4	Settlement of Accounts	37
8.5	Related Documents	37
8.6	Letters of Credit	37
	ARTICLE IX
	COVENANTS
9.1	Regulatory Filings, Etc.	37
9.2	Injunctions	38
9.3	Access to Information	38
9.4	No Extraordinary Actions by the Sellers	39
9.5	Commercially Reasonable Efforts; Further Assurances	41
9.6	Use of Names; Name Change	43
9.7	Confidentiality; Publicity	44
9.8	Transition	45
9.9	Access to Records After the Closing	45
9.10	No Employee Solicitation	45
9.11	Interim Operations of the Buyer	45
9.12	No Solicitation	46
9.13	Intercompany Guarantees	46
9.14	Third Party Contracts and Cross Default Provisions	47
9.15	Patriot Act	48
9.16	Change in Control Bonuses	48
	ARTICLE X
	SURVIVAL AND INDEMNIFICATION
10.1	Survival	48
10.2	Indemnification by Sellers, Jointly and Severally	48
10.3	Indemnification by the Buyer	49
10.4	Limitations on Indemnification	49
10.5	Right to Indemnification not Affected by Knowledge	50

iii

	ARTICLE XI
	TAX MATTERS
11.1	Tax Indemnification	51
11.2	Tax Refunds	52
11.3	Preparation and Filing of Tax Returns and Payment of Taxes	52
11.4	Tax Cooperation	53
11.5	Tax Audits	54
11.6	Tax Treatment of Indemnification Payment	56
11.7	338(h)(10) Election	56
11.8	Tax Sharing Agreements	57
11.9	Survival of Obligations	57
	ARTICLE XII
	TERMINATION
12.1	Termination	57
12.2	Other Agreements; Material To Be Returned	58
12.3	Effect of Termination	59
	ARTICLE XIII
	MISCELLANEOUS
13.1	Complete Agreement	59
13.2	Waiver, Discharge, etc.	59
13.3	Fees and Expenses	59
13.4	Amendments	60
13.5	Notices	60
13.6	Venue	61
13.7	GOVERNING LAW; WAIVER OF JURY TRIAL	61
13.8	Headings	61
13.9	Interpretation	61
13.10	Exhibits and Schedules	61
13.11	Successors	61
13.12	Remedies	62
13.13	Third Parties	62
13.14	Severability	62
13.15	Counterparts; Effectiveness	62
13.16	NO OTHER REPRESENTATIONS	62
13.17	CONDITION OF THE BUSINESS	63
13.18	NO OTHER REPRESENTATIONS	63
13.19	INDEPENDENT INVESTIGATION	63

iv

EXHIBITS

A	-	CORIS and WRMS License Agreement
B	-	Specimen Title Policies
C	-	Transition Services Agreement
D	-	Escrow Agreement

v

PURCHASE AGREEMENT

PURCHASE AGREEMENT, dated as of June 4, 2007 (this “Agreement”), by and among SUNDAY RIVER SKIWAY CORPORATION, a Maine corporation (“SRSC”), SUGARLOAF MOUNTAIN CORPORATION, a Maine corporation (“SMC”), S-K-I LTD., a Delaware corporation (“SKI”), AMERICAN SKIING COMPANY, a Delaware corporation (“ASC”, and together with SKI, the “Sellers”), and BOYNE USA, INC., a Michigan corporation (“Buyer”), for the sale and purchase of all of the outstanding capital stock in SRSC, SMC, SRL and BBD (the “Stock”).

W I T N E S S E T H:

WHEREAS, ASC owns all of the Stock of SRSC, SRL and BBD, and SKI owns all of the Stock of SMC;

WHEREAS, ASC and SKI wish to sell to the Buyer, and the Buyer wishes to purchase from ASC and SKI, all of such Stock upon the terms and subject to the conditions of this Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants contained herein, the parties hereby agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

1.1Certain Definitions.  As used in this Agreement, unless the context requires otherwise, the following terms shall have the meanings indicated:

“Affiliate” of any specified Person means any other Person, directly or indirectly Controlling, Controlled by or under common Control with the specified Person.

“Approvals” means franchises, licenses, permits, certificates of occupancy and other required approvals, authorizations and consents.

“Base Balance Sheet” means the balance sheet of the Companies at April 29, 2007 included in the Interim Financial Statements.

“Base Balance Sheet Date” means April 29, 2007.

“BBD” means Blunder Bay Development, Inc., a Maine corporation.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close.

“Capital Expenditures” means the aggregate of all expenditures incurred by a Person with respect to and/or in connection with either (i) acquisition or leasing (pursuant to a capital lease) of fixed or capital assets or (ii) additions, improvements, replacements and/or repairs to real property, existing buildings and improvements, and/or equipment and all other expenditures that should be capitalized under GAAP on a balance sheet.

“Capital Lease” means any capital lease listed on Section 1.1(a) of the Seller Disclosure Letter.

“Closing” means the closing of the transactions contemplated by this Agreement.

“Closing Date” means the date on which the Closing actually occurs.

“Code” means the Internal Revenue Code of 1986, as amended.

“Companies” means SRSC, SMC, BBD and SRL.

“Confidentiality Agreement” means that certain letter agreement, dated March 20, 2006, by and between Buyer and ASC.

“Contamination” means the actual or threatened presence of, or Release at, in, on, under, from or to the environment of any Hazardous Substance, excepting the routine storage, handling, management and use of Hazardous Substances from time to time in the ordinary course of business in strict compliance with Environmental Laws and with good commercial practice.

“Contract” means any loan or credit agreement, note, bond, mortgage, indenture, deed of trust, license agreement, franchise, contract, agreement, Lease (including any Real Property Lease), instrument or guarantee (including any amendments, modifications, extensions or replacements thereof), option agreement or agreement conferring similar rights.

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“Control” means the power to direct or cause the direction of the management and policies of another Person, whether through the ownership of securities, by contract or otherwise.

“CORIS and WRMS License Agreements” mean duly executed license agreements in favor of each of SRSC and SMC substantially in the forms attached as Exhibit A hereto.

“Environmental Claims” means, with respect to either Company and its Subsidiaries, and the Real Property, any and all claims, demands, actions and/or proceedings brought or instigated by any Governmental Agency or other third party in connection with any Environmental Law (including without limitation civil, criminal and/or administrative proceedings), whether or not seeking costs, damages, penalties or expenses, and/or any and all third party claims, actions, demands or proceedings (including without limitation those based on negligence, trespass, strict liability, nuisance, or toxic tort) due to any actual or threatened Release of a Hazardous Substance, and whether or not seeking costs, damages, penalties or expenses (collectively, a “Demand”), including, without limitation, (a) any and all Demands for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to Environmental Laws and (b) any and all Demands seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief for Environmental Liabilities resulting from a Release or otherwise arising from an Environmental Condition.

“Environmental Conditions” means any and all conditions, including regulatory compliance, relating to soil, surface water, groundwater, or air, Releases and/or Contamination, whether on or migrating from the Real Property in actual or threatened violation of applicable standards of Environmental Laws in effect as of the date of this Agreement.

“Environmental Law” means all federal, state and local Laws pertaining or relating to or purporting to relate to the handling, use, presence, disposal, Release or threatened Release of any Hazardous Substance, noise, wetlands, Contamination or any injury or threat of injury to persons or property, the protection of the environment, natural resources and human health and safety, including, without limitation: (a) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”); (b) the Solid Waste Disposal Act, as amended; (c) the Clean Air Act, as amended; (d) the Clean Water Act, as amended and (e) the Toxic Substances Control Act, as amended, as each of the foregoing are in effect on the date of this Agreement, and including analogous applicable Laws of the State of Maine pertaining to the environment, natural resources and employee health and safety.

“Environmental Liability” means any and all Liabilities, Environmental Claims and/or Environmental Conditions which have, or would reasonably be expected to have, a Material Adverse Effect on a Resort, individually or in the aggregate, including arising in connection with any Environmental Claim by any private Person or Governmental Agency.

3

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any entity which is (or at any relevant time was) a member of a “controlled group of corporations” with, under “common control” with, or a member of an “affiliated service group” with any Company as defined in Section 414(b), (c), (m) or (o) of the Code, or under “common control” with any Company, within the meaning of Section 4001(b)(1) of ERISA.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

“Financial Statements” means the unaudited balance sheets and statements of operations, stockholder’s equity and cash flows of each Company and its Subsidiaries as of and for the fiscal years ended July 31, 2005 and July 30, 2006, as included in the audited consolidated financial statements of ASC for such periods.

“GAAP” means United States generally accepted accounting principles in effect at the time in question.

“Governmental Agency” means any federal, state or local governmental body or other regulatory or administrative agency or commission.

“Hazardous Substance” means (a) any hazardous materials, hazardous wastes, solid wastes, hazardous substances, toxic wastes and toxic substances as those or similar terms are listed in, defined by and/or regulated under any Environmental Laws; (b) asbestos or asbestos containing materials, urea-formaldehyde, lead-containing plumbing or paint, or radon; (c) polychlorinated biphenyls (PCBs) or PCB-containing materials or fluids; (d) any other hazardous, radioactive or toxic substance, or contaminant regulated under any Environmental Law; and (e) any petroleum, gasoline, oil, petroleum hydrocarbons, petroleum products (or by-products), crude oil and any constituents, additives, fractions or derivatives thereof.

“Hotels” means the Sugarloaf Grand Summit Hotel, located at the SMC Resort, and the Summit Hotel and the Jordan Grand Hotel, located at the SRSC Resort.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Indebtedness” means (i) any liability, contingent or otherwise, of any Company (a) for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such

4

Company or only to a portion thereof) or (b) evidenced by a note, debenture or similar instrument or letter of credit (including a purchase money obligation or other obligation relating to the deferred purchase price of property); (ii) any liability of others of the kind described in the preceding clause (i) which such Company has guaranteed or which is otherwise its legal liability; (iii) any monetary obligation secured by a lien to which the property or assets of such Company is subject, whether or not the obligations secured thereby shall have been assumed by it or shall otherwise be its legal liability, but not including Liens of the nature described in clauses (ii) and (iii) of the definition of “Permitted Exceptions”; and (iv) all capitalized lease obligations of such Company.  In no event shall Indebtedness include trade payables or operating lease obligations, provided the same are properly disclosed in the Financial Statements or included in the Interim Financial Statements or incurred in the ordinary course of business after the Base Balance Sheet Date.

“Intellectual Property” means all intellectual property and industrial property rights of any kind or nature, including all U.S. and foreign (i) patents, patent applications, patent disclosures, and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions, and extensions thereof, (ii) trademarks, service marks, names, corporate names, trade names, domain names, logos, slogans, trade dress, and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing, (iii) copyrights and copyrightable subject matter, (iv) rights of publicity, (v) computer programs (whether in source code, object code, or other form), algorithms, databases, compilations and data, technology supporting the foregoing, and all documentation, including user manuals and training materials, related to any of the foregoing (“Software”), (vi) trade secrets and all other confidential information, know-how, inventions, proprietary processes, formulae, models, and methodologies, (vii) rights of privacy and rights to personal information, (viii) telephone numbers and Internet protocol addresses, and (ix) all rights in the foregoing and in other similar intangible assets, (x) all applications and registrations for the foregoing, and (xi) all rights and remedies against past, present, and future infringement, misappropriation, or other violation thereof.

“Interim Financial Statements” means the unaudited balance sheet and statements of operations, stockholder’s equity and cash flows as of and for the nine (9) month period ended April 29, 2007.

“Judgment” means any judgment, ruling, writ, injunction, order, arbitral award or decree issued by a court of competent jurisdiction.

“Knowledge of the Companies” (and any similar phrases as they relate to the Companies) means the existing actual knowledge of Stan Hansen, B.J. Fair, Betsy Wallace, John Diller, Dana Bullen and Foster Stewart.

5

“Law” means any Judgment, law, statute, rule or regulation of any Governmental Agency.

“Lease” means any lease, sublease, license, or similar occupancy right in real or personal property.

“Liabilities” means losses, damages, deficiencies, obligations, claims, demands, judgments, awards, interest, fines, penalties or settlements of any nature or kind, including all costs and expenses, whether accrued or unaccrued, actual or contingent, known or unknown, foreseen or unforeseen, asserted or unasserted, liquidated or unliquidated, and due or to become due, and whether or not required to be reflected on a balance sheet prepared in accordance with GAAP.

“Lien” means any lien, encumbrance, security interest (whether or not the subject of a UCC financing statement), charge, mortgage, UCC financing statement, right of first offer, right of first refusal, collateral assignment or pledge of any nature whatsoever which encumbers or affects the Stock, any Company and/or any of any Company’s assets.

“Litigation” means any arbitration, action, suit, claim, proceeding, investigation or written inquiry by or before any Governmental Agency, court or arbitrator.

“Material Adverse Effect” means a material adverse effect upon (i) the results of operations, properties, assets, liabilities or financial condition of the business of either Resort, (ii) the valid, binding effect or enforceability of this Agreement or any Related Document, or (iii) the ability of either Seller to perform its obligations under this Agreement; provided, however, that “Material Adverse Effect” shall not include any change, effect, condition, event or circumstance (collectively, “Events”) arising out of, or attributable to (i) general economic conditions, changes, effects, events or circumstances, except to the extent such Events disproportionately affect such Resort, (ii) changes, effects, conditions, events or circumstances that generally affect the ski, resort or hospitality industries, except to the extent such Events disproportionately affect such Resort, (iii) in the case of either Resort, any effect which the financial condition of ASC may have on the terms and conditions on which inventory or other assets are purchased by such Resort (provided that such effect will be taken into account for purposes of this definition of Material Adverse Effect only to the extent such effect would reasonably be expected to have a material adverse effect (taking into account the reasonably expected duration of said effect) on such Resort following the Closing), (iv) any acts of terrorism or acts of war, whether occurring within or outside the United States, or any effect of any such acts on general economic or other conditions, except to the extent such Events disproportionately affect such Resort, (v) any climatic or weather condition, except to the extent of any damage or destruction of the assets of such Resort which has a material and adverse effect on such Resort and which is caused by such damage or destruction, (vi) changes arising from the consummation of the transactions contemplated hereby or the announcement of the execution of this Agreement.

6

“Materials of Environmental Concern” means pollutants, contaminants, wastes, toxic substances, hazardous substances, radioactive materials, asbestos, petroleum and petroleum products.

“Mountainside” means Mountainside, a Maine corporation and wholly owned subsidiary of SMC.

“Multiemployer Plan” means an employee pension benefit plan, as defined in Section 3(37) of ERISA, to which the Sellers or any of their ERISA Affiliates contribute, have contributed, are obligated to contribute or have been obligated to contribute.

“Outstanding Indebtedness” means the aggregate outstanding principal balance of, and accrued and unpaid interest on, all Indebtedness of the Companies, calculated as of the close of business on the day immediately preceding the Closing Date, but not including the Capital Leases or the ASC-Level Financings.

“Permitted Exceptions” means (i) Liens disclosed on any balance sheet included in the Financial Statements or Interim Financial Statements or securing liabilities reflected therein (provided that Liens securing the financings described in Section 1.1(b) of the Seller Disclosure Letter (the “ASC-Level Financings”) shall not be Permitted Exceptions); (ii) Liens for taxes, assessments and similar charges that are not yet due and payable; (iii) mechanic’s, materialman’s, carrier’s, repairer’s and other similar Liens imposed by applicable Law arising or incurred in the ordinary course of business; (iv) easements, rights-of-way, restrictions and other similar charges or encumbrances the existence of which do not materially adversely detract from the value of the property affected by such encumbrances(s) and do not materially interfere with the operation of the Companies’ or any of their respective Subsidiaries’ respective businesses as currently conducted; (v) Liens or other encumbrances that would be disclosed by an accurate survey of the Real Property provided that the same do not materially adversely detract from the value of the property affected by such encumbrance(s) and do not materially interfere with the operation of the Companies’ or any of their respective Subsidiaries’ respective businesses as currently conducted; (vi) applicable zoning regulations and ordinances, and building, health and other applicable laws or ordinances; and (vii) any exceptions to title set forth in any subsection of Section 3.16 of the Seller Disclosure Letter.

“Person” means an individual, a corporation, a limited liability company, a partnership, an unincorporated association, a joint venture, a Governmental Agency or any other entity.

“Prime Rate” means the prime rate of Citibank N.A., in effect on the applicable date.

7

“Related Documents” means (i) the CORIS and WRMS License Agreements, (ii) the Transition Services Agreement, and (iii) all other agreements, instruments and certificates described in or contemplated by this Agreement or reasonably requested by either the Buyer or the Sellers that are to be executed and delivered in connection with the transactions contemplated hereby, including, without limitation, good standing certificates, incumbency certificates and secretary certificates for the parties and Subsidiaries of the Companies.

“Release” means any actual or threatened presence in, or release, escape, spill, emission, discharge, leaking, pumping, injection, deposit, disposal, dispersal, leaching or migration into, on, at, from or under the indoor or outdoor environment (including, without limitation, ambient air, surface water, groundwater and surface or subsurface strata) of Hazardous Substances, whether intentional or unintentional, including in violation of Environmental Laws.

“Resorts” means the mountain resorts operated by SMC known as Sugarloaf Resort located in Carrabassett Valley, Maine and by SRSC known as Sunday River Resort located in Newry, Maine.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

“Seller Disclosure Letter” means the disclosure letter prepared by the Sellers, dated as of the date hereof, and delivered by the Sellers to the Buyer.

“Specimen Title Policies” shall mean the specimen owner title insurance policies issued by the Title Company in the form attached hereto as Exhibit B.

“SRL” means Sunday River Ltd., a Maine corporation.

“Subsidiary” of any specified Person means any other Person (i) as to which more than 50% of its outstanding shares or securities representing the right to vote for the election of directors or other managing authority of such other Person are owned or Controlled, directly or indirectly, by such specified Person, but such other Person shall be deemed to be a Subsidiary only so long as such ownership or Control exists, or (ii) which does not have outstanding shares or securities with such right to vote, as may be the case in a partnership, limited liability company, joint venture or unincorporated association, but more than 50% of whose ownership interest representing the right to make the decisions for such other Person is owned or Controlled, directly or indirectly, by such specified Person, but such other Person shall be deemed to be a Subsidiary only so long as such ownership or Control exists.

8

“Taxes” means all taxes, charges, fees, duties or levies, imposed by any federal, state or local taxing authority, including federal, state or local income, profits, franchise, gross receipts, environmental, customs duty, severances, stamp, payroll, sales, use, intangibles, employment, unemployment, disability, property, withholding, backup withholding, excise, production, occupation, service, service use, leasing and lease use, ad valorem, value added, occupancy, transfer, and other taxes, of any nature whatsoever, together with all interest, penalties and additions imposed with respect to such amounts and any interest in respect of such penalties and additions.

“Tax Returns” means all returns and reports, information returns, or payee statements (including, elections, declarations, filings, forms, statements, disclosures, schedules, estimates and information returns) required to be supplied to a Tax authority relating to Taxes.

“Title Company” means First American Title Insurance Company.

“Tramway Authorities” means the Board of Elevator and Tramway Safety, the State of Maine.

“WARN Act” means the Worker Adjustment and Retraining Notification Act, as amended.

“Week” means a period of seven days ending on Sunday at 11:59 p.m. Mountain Time.

1.2           Other Capitalized Terms.  The following capitalized terms are defined in the following Sections of this Agreement:

Term	Section
Agreement	Preamble
ASC	Preamble
ASC-Level Financings	1.1
Assignments	7.6
Base Balance Sheet	1.1
Base Balance Sheet Date	1.1
Buyer	Preamble
Buyer Indemnitees	10.2
Buyer Trade Names	9.6(b)
Capital Program	3.7
Companies	1.1
Company Plans	3.15(a)
Company Subject Matter	9.3
Contest	11.5(b)

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Term	Section
Current Plan Year	5.2(b)
Employees	5.1
Enforceability Exceptions	3.4
Escrow Agent	10.6
Escrow Agreement	10.6
FCC	3.6
Indemnifiable Losses	10.2
Indemnity Escrow Agreement	10.6
Indemnity Escrow Amount	10.6
Initial Purchase Price	2.1
Insurance Policies	3.11(a)
Intellectual Property	1.1
Interim Financial Statements	1.1
Interim Period	11.1(a)
Leased Real Property	3.16(a)
Nonqualified Deferred Compensation Plan	3.15(j)
Other ASC Resorts	5.1
Owned Real Property	3.16(a)
Plans	3.15(a)
Pre-Closing Periods	11.1(a)
Purchase Price	2.1
Real Property	3.16(a)
Real Property Leases	3.16(a)
Representatives	9.3
Resorts	1.1
SEC	9.4(e)
Section 338(h)(10) Election	11.7(a)
Seller Indemnitees	10.3
Sellers	Preamble
Seller Trade Names	9.6(a)
Software	1.1
Stock	Preamble
Straddle Contest	11.5(c)
Tax Indemnifying Party	11.1(a)
Tax Notice	11.5(a)
Tempest Agreement	2.1
Transition Services Agreement	9.5(1)
Unresolved Claims	10.6

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ARTICLE II

PURCHASE PRICE AND PAYMENT

2.1Sale and Purchase of Stock.  At the Closing, upon the terms and subject to the conditions of this Agreement, ASC and SKI shall sell to the Buyer, and the Buyer shall purchase from ASC and SKI, the Stock.  The aggregate purchase price for the Stock shall be (i) $76,500,000 (the “Initial Purchase Price”), plus (ii) the assignment by SRSC to ASC of all rights to receive any amounts (up to $500,000) that become payable to SRSC pursuant to Section 6(a) of the Short Form Purchase and Sale Agreement (the “Tempest Agreement”), dated as of January 18, 2006, between SRSC and Fort Point Real Estate Company, Inc. (the “Purchase Price”).  In addition, at the Closing, Buyer shall reimburse Seller (a) the amount actually expended prior to the Closing Date by ASC or its Affiliates with respect to the items described on the 2007-08 Capital Expenditure Plan for the Resorts pursuant to Section 3.7(b) of the Seller Disclosure Letter, plus (b) any amounts paid by ASC or its Affiliates subsequent to the Base Balance Sheet Date and prior to the Closing Date as prepayments under the equipment leases for the snow-grooming equipment located at the Resorts and listed on Section 2.1 of the Seller Disclosure Letter.  At the Closing, the Buyer shall cause SRSC to assign to ASC the rights described in clause (ii) above, as well as the mortgage securing the performance of such obligations, by an instrument or instruments reasonably satisfactory to ASC.  ASC shall reassign to Buyer such mortgage upon receipt by ASC of the payment contemplated by clause (ii) above.

2.2Payment at the Closing, Subsequent Payment.  At the Closing, the Buyer shall (subject to Section 10.6 hereof) pay the Initial Purchase Price and the reimbursement contemplated by Section 2.1 hereof by wire transfer of immediately available funds to ASC.  The balance of the Purchase Price shall be paid by wire transfer to ASC of immediately available funds by Fort Point pursuant to the terms of the Tempest Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF
THE SELLERS

The Sellers jointly and severally represent and warrant to the Buyer as follows:

3.1Organization and Qualification.

(a)Each Company has previously delivered to or made available to the Buyer, prior to the date hereof, a complete and correct copy of: the Certificate of Incorporation and bylaws (or similar organizational documents) of such Company and each Subsidiary, as each of the same may have been amended, each of which is in full force and effect.  Each of SMC, SRSC, SRL, BBD, and Mountainside is a corporation duly formed, validly existing and in good standing under the laws of the State of Maine, and each has all requisite power and authority to

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own, lease and operate its properties and to carry on its business as presently owned or conducted.

(b)Each of SKI and ASC has previously delivered to or made available to the Buyer, prior to the date hereof, complete and correct copies of its Certificate of Incorporation and bylaws, as each of the same may have been amended, each of which is in full force and effect.  Each of SKI and ASC is a corporation duly formed, validly existing and in good standing under the laws of Delaware and has all requisite power and authority to own, lease and operate its properties and carry on its business as presently owned or conducted; provided, however, that no representation is made as to the qualification of ASC or SKI in any jurisdiction other than its state of incorporation.

3.2Title to the Stock.  ASC owns, and as of the Closing Date will own, beneficially and of record, free and clear of any Lien with full right, power and authority to transfer, convey and deliver, the SRSC, SRL and BBD Stock, and SKI owns, and as of the Closing Date, will own, beneficially and of record, free and clear of any Lien with full right, power and authority to transfer, convey and deliver, the SMC Stock, and, upon delivery of and payment for the Stock at the Closing as herein provided, ASC and SKI, as applicable, will convey to the Buyer good and valid title thereto, free and clear of any Lien.  The Stock consists of all of the issued and outstanding capital stock in each Company, as the same is set forth in Section 3.2 of the Seller Disclosure Letter.  Except for the rights of Buyer under this Agreement, there is no outstanding right, warrant, subscription, call, preemptive right, option or other agreement or outstanding offer of any kind to sell, purchase, encumber or otherwise convey, transfer, encumber or dispose of any right, title and/or interest in and to the Stock and there is no outstanding debt or security which is convertible into same, and no other Person has any legal, beneficial or equitable right, title or interest in and/or to the Stock.  Upon consummation of the transactions contemplated hereby, Buyer will own all of the SRSC, SRL, BBD and SMC Stock free and clear of all Liens (other than those created by or with the consent of Buyer).  There are no voting trusts, proxies, or other agreements or understandings with respect to the voting of the Stock.

3.3Subsidiaries.  Except as set forth on Section 3.3 of the Seller Disclosure Letter, which sets forth the number and type of outstanding equity securities of each Subsidiary and a list of the holders thereof, none of the Companies has any Subsidiaries and does not directly or indirectly own or have any investment in the capital stock of, or other propriety interest in, any Person.  There is no outstanding right, warrant, subscription, call, preemptive right, option or other agreement or outstanding offer of any kind to sell, purchase, encumber or otherwise convey, transfer, encumber or dispose of any right, title and/or interest in and to the equity of any Subsidiary of any Company and there is no outstanding debt or security which is convertible into same, and no other Person has any legal, beneficial or equitable right, title or interest in and/or to such equity.

3.4Binding Obligation.  The Sellers have all requisite corporate authority and power to execute and deliver this Agreement and the Related Documents to be executed by them in connection herewith and to perform their respective obligations set forth herein and therein.  This Agreement has been, and such Related Documents will be at the Closing, duly and validly

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authorized by all required corporate or stockholder action on the part of the Sellers and no other corporate or stockholder proceedings on the part of any of them are necessary to authorize this Agreement or the Related Documents.  This Agreement has been duly executed and delivered by the Sellers and, assuming that this Agreement constitutes a legal, valid and binding obligation of the Buyer, constitutes the legal, valid and binding obligation of the Sellers, enforceable against them in accordance with its terms, except to the extent that the enforceability thereof may be limited by:  (i) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws from time to time in effect affecting generally the enforcement of creditors’ rights and remedies; and (ii) general principles of equity (the exceptions set forth in (i) and (ii), the “Enforceability Exceptions”).

3.5No Default or Conflicts.  The execution and delivery of this Agreement and the Related Documents by the Sellers and the performance by them of their respective obligations hereunder and thereunder (a) does not and will not result in any violation of, or breach or default under the Certificate of Incorporation or bylaws (or equivalent organizational documents) of ASC, SKI or any Company or any of their respective Subsidiaries (subject to receipt of approval of the shareholders of ASC, which has not yet been obtained); (b) assuming compliance with the matters referred to in Section 3.6, does not and will not violate nor result in a breach or default under any existing applicable Law material to the business of any Company or any of their respective Subsidiaries or any Judgment of any Governmental Agency having jurisdiction over any of the Sellers or any Company or any of their respective Subsidiaries or their or any of their respective Subsidiaries’ properties in any material respect; (c) does not and will not result in the imposition of any Lien upon any of the assets of ASC, SKI, any Company or any of their respective Subsidiaries; and (d) does not and will not conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the termination, cancellation or acceleration of obligations under, create in any party the right to terminate, modify or cancel any Contract to which ASC, SKI, any Company or any of their respective Subsidiaries is a party or by which ASC, SKI, any Company or any of their respective Subsidiaries is bound or to which any of their respective assets is subject, except, with respect to clause (c) (but only with respect to Liens upon any of the assets of ASC, SKI or their respective Subsidiaries (excluding the Companies and their respective Subsidiaries)) and clause (d), for any such conflicts, breaches, defaults and other occurrences which, individually or in the aggregate, would not materially and adversely affect, impede or delay the Sellers’ ability to consummate the transactions contemplated by this Agreement and the Related Documents (in accordance with the terms of this Agreement).

3.6No Governmental Authorization or Consent Required.  Except as set forth on Section 3.6 of the Seller Disclosure Letter and except for compliance with any applicable requirements of the HSR Act and the Federal Communications Commission (the “FCC”), no authorization or approval or other action by, and no notice to or filing with, any Governmental Agency will be required to be obtained or made by any of ASC, SKI or any Company or any of their respective Subsidiaries in connection with the due execution and delivery by ASC, SKI and the Companies of this Agreement and the consummation by such Persons of the transactions contemplated hereby, other than such authorizations, approvals, notices or filings with any Governmental Agency that, if not obtained or made, would not materially and adversely affect,

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impede or delay the Sellers’ ability to consummate the transactions contemplated by this Agreement and the Related Documents (in accordance with the terms of this Agreement).

3.7Financial Statements.  The Financial Statements and the Interim Financial Statements fairly present, in all material respects, the financial position of the Companies and their respective Subsidiaries, the results of operations, stockholder’s equity and cash flows for the periods indicated, all in conformity with GAAP applied on a consistent basis (except, in the case of the Interim Financial Statements, for the absence of footnotes and year end adjustments).  The Financial Statements and the Interim Financial Statements have been accurately derived from the books and records of the Companies and their respective Subsidiaries.  Neither the Companies nor any of their respective Subsidiaries have any material indebtedness, obligations or other liabilities of a kind required to be disclosed in its financial statements under GAAP other than those (i) fully reflected in, reserved against or otherwise described in the Base Balance Sheet; (ii) incurred in the ordinary course of business since the Base Balance Sheet Date (including work in progress on capital expenditures which are contemplated by the capital expenditures program set forth on Section 3.7(b) of the Seller Disclosure Letter (the “Capital Program”)) or (iii) set forth on Section 3.7(a) of the Seller Disclosure Letter.

3.8Powers of Attorney.  Except as set forth on Section 3.8 of the Seller Disclosure Letter, neither the Companies nor any of their respective Subsidiaries have any material outstanding revocable or irrevocable powers of attorney or similar authorizations issued to any individual who is not one of the Company’s employees or officers.

3.9Brokers.  Except as set forth on Section 3.9 of the Seller Disclosure Letter, no broker, finder, agent, investment banker, financial advisor or similar Person has acted for or on behalf of the Companies, ASC or SKI in connection with this Agreement or the transactions contemplated hereby (an “ASC Broker”), and no broker, finder, agent, investment banker, financial advisor or similar Person is entitled to any broker’s, finder’s, financial advisor’s or similar fee or other commission in connection therewith based on any agreement, arrangement or understanding with the Companies, ASC or SKI or any action taken by any such Person.

3.10Compliance with Laws.  As of the date hereof, except as set forth in Section 3.10(i) of the Seller Disclosure Letter, no investigation or material review by any Governmental Agency with respect to any Company or any of their respective Subsidiaries or their properties or assets is pending or, to the Knowledge of the Companies, threatened.  Except as set forth in Section 3.10(ii) of the Seller Disclosure Letter, neither ASC, SKI, any Company nor any of their respective Subsidiaries, has received any notice or communication of any noncompliance by any Company or any of their respective Subsidiaries in any material respect with any applicable Laws or Approvals, including without limitation any applicable Laws with respect to the Laws and standards of any Tramway Authorities, that has not been cured as of the date hereof.  Except as set forth on Section 3.10(iii) of the Seller Disclosure Letter, any of the Companies and their respective Subsidiaries is currently conducting, and has at all times since December 31, 2003 conducted, their respective businesses in compliance in all material respects with all applicable Laws and Approvals.

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3.11Insurance.

(a)Section 3.11(a) of the Seller Disclosure Letter sets forth as of the date hereof a description of each insurance policy (the “Insurance Policies”) of each Company and its Subsidiaries.  Except as noted on Section 3.11(a) of the Seller Disclosure Letter and as of the date hereof, (i) all Insurance Policies are in full force and effect and all premiums due and payable thereunder have been paid in full and will not in any way be adversely affected by, or terminate or lapse by reason of, the transactions contemplated by this Agreement, (ii) there are no pending claims in excess of $50,000 under any Insurance Policy as to which the respective insurers have denied coverage, (iii) since July 30, 2003, each Company and its Subsidiaries have been fully insured for worker’s compensation claims and (iv) none of the Companies nor any of their Subsidiaries is in material breach or default under any of the Insurance Policies, and no event has occurred which, with notice or lapse of time, would constitute such a material breach or default, or permit termination, modification or acceleration, under any of the Insurance Policies.  None of the Sellers nor any Subsidiary of any Company has received any notice from any insurance company of such insurance company’s intention not to renew any such Insurance Policy applicable to any Company or materially increase the premiums thereunder beyond such premiums currently in effect, nor, to the Knowledge of the Companies, is any such cancellation, non-renewal or premium increase threatened.  The consummation of the transactions contemplated by this Agreement will not constitute a default under the terms of, or result in the invalidation or termination of, any of the Insurance Policies.  All of the Insurance Policies are issued by financially sound and reputable insurers, and are in reasonable and customary amounts in light of the Companies’ respective businesses.

(b)Section 3.11(b) of the Seller Disclosure Letter sets forth a true and correct list of any pending worker’s compensation claims not covered by insurance.

3.12Litigation.  Except as disclosed on Section 3.12 of the Seller Disclosure Letter, there is no Litigation pending or, to the Knowledge of the Companies, threatened against any of the Sellers, the Companies or their respective Subsidiaries or any of their respective properties or assets that, with respect to each such Litigation (a) in the case of the Companies and their respective Subsidiaries (i) is not fully covered by insurance or (ii) is covered by insurance and would reasonably be expected to result in a liability to the Companies in excess of $50,000 individually or $150,000 in the aggregate for all such Litigation or (b) in the case of ASC or SKI, would reasonably be expected to result in a material and adverse effect on ASC’s or SKI’s ability to consummate the transactions contemplated by this Agreement.  Except as set forth on Section 3.12 of the Seller Disclosure Letter, none of the Companies nor any of their respective Subsidiaries is subject to any material order, Judgment, injunction or decree of any Governmental Agency.

3.13Approvals.  Except as set forth in Section 3.13(a) of the Seller Disclosure Letter, the Companies and their respective Subsidiaries have in full force and effect all material Approvals necessary for the lawful operation of the business of the Companies and their respective Subsidiaries as presently conducted (including for this purpose any Approvals

15

necessary for any development or construction activity that has been commenced with respect to any Real Property, or otherwise to the extent required by applicable Law).  Since December 31, 2003, except as set forth on Section 3.13(b) of the Seller Disclosure Letter, the Companies and their respective Subsidiaries have been in substantial compliance with the terms of each Approval and have not received written notice of any material default under any such Approval.  Except as set forth on Section 3.13(c) of the Seller Disclosure Letter, to the Knowledge of the Companies, no suspension or cancellation of any such Approval is threatened and there is no basis for believing that any such Approval will not be renewable upon expiration.  To the Knowledge of the Companies, Section 3.13(d) of the Seller Disclosure Letter sets forth a list of all material Approvals required for the operation of the business of the Companies and their Subsidiaries as presently conducted or for the consummation of the transactions contemplated by this Agreement.

3.14Labor Matters.

(a)Except as set forth on Section 3.14(a) of the Seller Disclosure Letter, the Companies and their respective Subsidiaries are in compliance in all material respects with all Laws relating to the employment of labor, including all such Laws relating to wages, hours, the WARN Act, collective bargaining, discrimination, civil rights, immigration, safety and health, workers’ compensation and the collection and payment of withholding and/or social security taxes and similar tax.

(b)There are no strikes, work stoppages, lockouts, boycotts or material labor disputes pending or, to the Knowledge of the Companies, threatened against or affecting the Companies or their respective Subsidiaries, and there have been no such events or actions since December 31, 2003.

(c)Except as set forth on Section 3.14(c) of the Seller Disclosure Letter, as of the date hereof, none of the Sellers has received written notice of any pending or, to the Knowledge of the Companies, threatened (i) proceedings under the National Labor Relations Act or before the National Labor Relations Board, the Equal Employment Opportunity Commission, the Department of Labor or any other Governmental Agency responsible for regulating employment practices, (ii) grievances or arbitrations, or (iii) organizational drives or unit clarification requests, in each case against or affecting any Company or their respective Subsidiaries.  There are no collective bargaining agreements or similar labor agreements that any Company or any of its respective Subsidiaries is bound by, party to or in the process of negotiating.

3.15Employee Benefit Plans.

(a)Section 3.15(a) of the Seller Disclosure Letter contains a true and complete list of each “employee benefit plan” (within the meaning of Section 3(3) of ERISA),

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stock purchase, stock option or other stock-related rights, severance, employment, change-in-control, fringe benefit, savings or thrift benefits, vacation benefits, cafeteria plan benefits, life, health, medical, or accident benefits (including any “voluntary employees’ beneficiary association” as defined in Section 501(c)(9) of the Code providing for the same or other benefits), employee assistance program, disability or sick leave benefits, worker’s compensation, supplemental unemployment benefits, insurance coverage (including any self-insured arrangements), post-employment or retirement benefits (including compensation, pension, health, medical or life insurance benefits), collective bargaining, bonus, incentive, deferred compensation, profit sharing, and all other employee benefit or compensation plans, agreements, programs, practices, policies or other arrangements, whether or not subject to ERISA and whether written or unwritten (collectively referred to as “Plans”), under which any employee, former employee, consultant, former consultant, director or former director of any Company has any present or future right to benefits or which is entered into, sponsored, maintained, contributed to or required to be contributed to, as the case may be, by any Company or any ERISA Affiliate or under which any Company or any ERISA Affiliate has any present or future liability (including, without limitation, contingent liability).  To the extent any Company sponsors, maintains, contributes to, is required to contribute to, or has any present or future liability (including, without limitation, contingent liability) with respect to any such Plans, the same shall be collectively referred to as the “Company Plans.”

(b)With respect to each Company Plan, the Buyer has been furnished access to a current and complete copy (or, to the extent no such copy exists, a description) thereof and all amendments thereto, and, to the extent applicable:  (i) any related trust agreement, annuity contract, or other funding instrument; (ii) the most recent IRS determination letter, if applicable; (iii) any summary plan description or other written description or interpretation thereof; (iv) for the three most recent plan years (a) the Form 5500 and attached schedules, (b) audited financial statements, (c) actuarial valuation reports and (d) attorneys’ responses to any auditor’s request for information; (v) any correspondence and other materials submitted to or received from the IRS or Department of Labor in connection with any correction program with respect to the Company Plans; (vi) any correspondence and other materials submitted to or received from any Multiemployer Plan or its trustees with respect to its funding status or potential withdrawal liability; and (vii) all contracts and other service agreements with any third party administrators in connection with the Company Plans.

(c)(i) Each Company Plan has been established, maintained, and administered in accordance with its terms, and in material compliance with the applicable provisions of ERISA, the Code and other applicable Laws; (ii) each Company Plan which is intended to be qualified within the meaning of Section 401(a) of the Code (and each related trust agreement, annuity contract, or other funding instrument) has received a favorable opinion letter from the IRS as to its qualification, and the Companies have no Knowledge of any reason why any such opinion letter would reasonably be expected to be revoked or not be reissued; (iii) for each Company Plan that is a “welfare plan” within the meaning of Section 3(1) of ERISA, neither the Companies nor any of their ERISA Affiliates has or will have any liability or obligation under any plan which provides medical, death or other welfare benefits with respect to

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current or former employees of any Company beyond their termination of employment (other than coverage mandated by Law) and no condition exists which would prevent any Company from amending or terminating any such welfare plan; (iv) no event has occurred with respect to any Company Plan that would subject any Company to any Tax, fine, lien, penalty or other liability imposed by ERISA, the Code or other applicable Laws; (v) no “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code, other than any such transaction which is subject to an administrative or statutory exemption) has occurred with respect to any Company Plan; (vi) none of the Companies nor any plan fiduciary of any Company Plan subject to ERISA has otherwise violated the provisions of Part 4 of Title I, Subtitle B of ERISA; and (vii) each Company Plan which is a “group health plan” as defined in Section 607(1) of ERISA has been operated in compliance with the provisions of Part 6 of Title I, Subtitle B of ERISA and Section 4980B of the Code, as well as with the provisions of any similar state law, at all times.

(d)Neither the Companies nor any of their ERISA Affiliates has ever (i) maintained, contributed to, or been obligated to contribute to any plan which is subject to Title IV of ERISA or the minimum funding requirements of Section 412 of the Code or (ii) contributed to, been obligated to contribute to, or incurred any liability to a Multiemployer Plan as defined in Section 3(37) of ERISA.  No liability under Title IV of ERISA has been incurred by any Company or any ERISA Affiliate that has not been satisfied in full, and no condition exists that presents a material risk to the Companies or any of their ERISA Affiliates of incurring a liability under such Title.

(e)Except as set forth on Section 3.15(e) of the Seller Disclosure Letter, the consummation of the transactions contemplated by this Agreement will not (either alone or together with any other event) entitle any current or former employee, director or consultant of any Company to severance pay or accelerate the time of payment or vesting of compensation or benefits under, increase the amount payable or trigger any other material obligation pursuant to, any Company Plan.  Except as set forth on Section 3.15(e) of the Seller Disclosure Letter, there is no Company Plan covering any current or former employee, director or consultant of any Company that, individually or collectively, will give rise to the payment of any amount that would not be deductible by such Company pursuant to Section 280G of the Code.

(f)All contributions (including all employer contributions and employee salary reduction contributions) required by each Company Plan or by any applicable Law or agreement to have been made under any Company Plan to any fund, trust, or account established thereunder or in connection therewith have been made by the due date thereof, or the deadline for making such contribution has not yet passed.

(g)None of the Company Plans are “multiple employer welfare arrangements” within the meaning of Section 3(40) of ERISA.  With respect to any of the Company Plans which are self-insured welfare benefit plans, no claims have been made pursuant to any such plans that have not been paid (other than claims which have not yet been paid but are

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in the normal course of processing) and no individual has incurred injury, sickness or other medical condition with respect to which claims may be made pursuant to any such plans where the liability could in the aggregate with respect to each such individual exceed $25,000 per year.

(h)There is no default on behalf of any Company with respect to any of the Plans and each of the Plans is in full force and effect, enforceable by the Companies in accordance with its terms.  There is no Litigation pending or, to the Knowledge of the Companies, threatened alleging any breach of the terms of any Company Plan or of any fiduciary duties thereunder or violation of any applicable Law with respect to any Company Plan, nor to the Knowledge of the Companies, any arbitration, proceeding or investigation.  None of the Companies nor any ERISA Affiliate nor any of their respective directors, officers, employees or, to the Knowledge of the Companies, other fiduciaries (as such term is defined in Section 3(21) of ERISA) has any liability for failure to comply with ERISA or the Code for any action or failure to act in connection with the administration or investment of any Company Plan.

(i)Section 3.15(i)(1) of the Seller Disclosure Letter lists all of the full-time year-round employees of each Company as of the date hereof, together with their respective salaries and date of hire; such list will be updated as of five Business Days prior to the Closing Date and delivered to Buyer prior to the Closing Date.  Section 3.15(i)(2) of the Seller Disclosure Letter also identifies those employees of each Company who are parties to employment agreements, bonus agreements or other written agreements relating to compensation and identifies those agreements.

(j)Each Company Plan that is a “nonqualified deferred compensation plan” within the meaning of, and subject to, Section 409A of the Code (a “Nonqualified Deferred Compensation Plan”) has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, the proposed regulations issued thereunder and Internal Revenue Service Notices 2005-1 and 2006-79.

3.16Real Property.

(a)Section 3.16(a)(1) of the Seller Disclosure Letter is a complete and accurate list of all real property owned by any Company or any of its Subsidiaries as of the date hereof and which is to be acquired and owned by any Company or any of its Subsidiaries on or prior to the Closing Date (the “Owned Real Property”).  Section 3.16(a)(2) of the Seller Disclosure Letter is a complete and accurate list of all leases, subleases, licenses, permits and other agreements, documents or instruments (including, without limitation, easement agreements) and all amendments, modifications and/or supplements thereto (collectively, the “Real Property Leases”) under which any Company or any of its Subsidiaries lease, sublease, license, use or occupy any real property (the land, buildings and other improvements covered by the Real Property Leases being herein called the “Leased Real Property” and together with the Owned Real Property, the “Real Property”).  The Companies have made available to the Buyer,

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prior to the date hereof, copies of the Real Property Leases, all of which are true, complete and correct in all material respects.  Except as set forth in Section 3.16(a)(3) of the Seller Disclosure Letter, each Real Property Lease is in full force and effect as to the applicable Company or its applicable Subsidiary and, to the Knowledge of the Companies, as to the other parties thereto.  Except as set forth in Section 3.16(a)(4) of the Seller Disclosure Letter, neither the applicable Company nor its applicable Subsidiary nor, to the Knowledge of the Companies, any other party to such Real Property Lease is in breach in any material respect thereof or default in any material respect thereunder.  The Real Property is all of the material real property that is necessary for the operation of the business of the Companies and their respective Subsidiaries as presently conducted.  Except as set forth in Section 3.16(a)(4) of the Seller Disclosure Letter, neither the Companies nor any of their respective Subsidiaries have received notice that any party to any Real Property Lease intends, or has threatened, to terminate or revoke all or any rights granted in favor of any Company or its applicable Subsidiary thereunder.

(b)The Companies own fee title to the Owned Real Property and good and valid non-subordinated leasehold interests in the Leased Real Property, subject only to Permitted Exceptions and Liens to be released on or before the Closing Date including as provided in Section 7.5.  The foregoing representation (a) shall not be construed in any event to relate to the fee interest in any Leased Real Property and (b) shall be deemed deleted with respect to any matter covered by a title insurance policy obtained for the benefit of Buyer.

(c)Except as set forth on Section 3.16(c) of the Seller Disclosure Letter, there are no outstanding options or rights of first refusal to purchase or lease the Real Property or any portion thereof or interest therein, other than rights running in favor of any Company and its Subsidiaries, and the Real Property is free from agreements creating any obligation on the part of any Person to sell, lease or grant a third party option to sell or lease.

(d)Except as set forth in Section 3.16(d) of the Seller Disclosure Letter, none of the Sellers has received notice of and there is no pending or, to the Knowledge of the Companies, threatened or contemplated condemnation proceeding affecting the Real Property or any part thereof, nor any sale or other disposition of the Real Property or any part thereof in lieu of condemnation.

(e)All chairlifts, gondolas, buildings and other improvements, access roads and ski-runs used in connection with either Resort and the conduct of the business of each Company and its Subsidiaries as presently conducted are located either on (i) the Owned Real Property, and/or (ii) the Leased Real Property pursuant to valid Real Property Leases (including valid easement agreements in favor of the applicable Company and its Subsidiaries) which allow and provide for the existence, operation, and maintenance of the chairlifts, gondolas, buildings, improvements, roads and/or ski-runs, as applicable.

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(f)Section 3.16(f)(i) of the Seller Disclosure Letter lists all of the Real Property Leases and other Contracts, including any amendments, modifications and/or supplements thereto, pursuant to which any Person has the right to use, occupy and/or possess all or any portion of the Real Property (the “Third Party Real Property Leases”); provided, however, that Section 3.16(f)(i) of the Seller Disclosure Letter need not include any bookings at hotels or conference facilities within either Resort in the ordinary course of business.  Except as set forth on Section 3.16(f)(ii) of the Seller Disclosure Letter, (i) there are no material real property Leases affecting the Real Property or any portion thereof, (ii) there are no material security deposits under any real property Leases affecting the Real Property or any portion thereof and (iii) no material tenant or other occupant is currently entitled to any material rent concessions, rent abatements or rent credits and no material rent concessions or rent abatements permitted under any real property Leases are currently claimed by any material tenant(s) or occupant(s) as a result of a default by any Company, its Subsidiaries or otherwise.  Copies of all such Third Party Real Property Leases (including any amendments, modifications and/or supplements) which are true, complete and correct in all material respects, have previously been made available to Buyer prior to the date hereof.  Except as set forth in Section 3.16(f) of the Seller Disclosure Letter, each third Party Real Property Lease is in full force and effect and none of the Companies nor any of their Subsidiaries nor, to the Knowledge of the Companies, any other party to such Third Party Real Property Lease is in breach in any material respect thereof or default in any material respect thereunder.

(g)Except as set forth on Section 3.16(g) of the Seller Disclosure Letter, none of the Sellers or the Companies nor any of their respective Subsidiaries has received written notice of, and the Companies have no Knowledge of, (i) any violations of any covenants or restrictions affecting any Real Property including any covenants, conditions or restrictions of or issued by any applicable condominium or home owners association, or (ii) any violations of any zoning codes or ordinances or other Laws of any Governmental Agency applicable to such Real Property.

(h)None of the Real Property is subject to regulation by the United States Forest Service.

(i)At Closing, other than with respect to the capital program described in Section 3.7(b) of the Seller Disclosure Letter, there will be no outstanding construction contracts made by the Sellers or any Company or its Subsidiaries for the construction, development or repair of any improvements located at any of the Real Property which have not been fully paid for, or provision for the payment of which has not been made by such Seller, Company or Subsidiary, and such Seller, Company or Subsidiary shall discharge and have released of record or bonded all mechanic’s, builder’s or materialman’s liens, if any, arising from any labor or materials furnished to the Real Property prior to the Closing to the extent any such lien is not bonded over pursuant to applicable Laws or insured over under a valid title insurance policy insuring the applicable Company and its Subsidiaries or the Buyer on the Closing Date.

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(Nothing contained herein shall be deemed to modify the Buyer’s reimbursement obligations under Section 2.1 hereof.)

(j)None of the Sellers or the Companies or their Subsidiaries has received written notice from any insurance carrier of defects or inadequacies in the Real Property which, if uncorrected, would result in a termination of insurance coverage or a material increase in the premiums charged therefore.

3.17Tax Matters.

(a)All material Tax Returns required to be filed by or with respect to any Company and/or its Subsidiaries on or before the date hereof have been properly prepared and timely filed.  All such Tax Returns were correct and complete in all material respects.  All material Tax Returns required to be filed by or with respect to any Company and/or its Subsidiaries after the date hereof and on or before the Closing Date shall be properly prepared and timely filed, in a manner consistent with prior years (except where any inconsistency is required by applicable laws and regulations) and applicable laws and regulations.  All material Taxes due and payable by any Company and its Subsidiaries (whether or not shown on a Tax return) have been paid.  All material Taxes that any Company or its Subsidiaries is or was required by Law to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Tax authority, and have been properly reported as required under applicable information reporting requirements.  With respect to any Taxes of any Company and/or its Subsidiaries not yet due and payable, adequate reserves and accruals in all material respects for such Taxes have been made in the Financial Statements or in the Interim Financial Statements.  None of the Companies or its Subsidiaries is currently the beneficiary of any extension of time within which to file any Tax Return.  No claim has been made by a Governmental Agency in a jurisdiction where any Company or its Subsidiaries do not file Tax Returns that any such corporation is or may be subject to taxation by that jurisdiction.

(b)None of the Companies nor their Subsidiaries has waived any statute of limitations in respect of any Taxes or agreed to any extension of time with respect to a material assessment or Tax deficiency.

(c)With respect to all material federal, state and local Tax Returns of each Company and/or its Subsidiaries, (i) no audit is in progress and no extension of time (other than automatic extensions of time) is in force with respect to any date on which any Tax Return was or is to be filed and no waiver or agreement is in force for the extension of time for the assessment or payment of any Tax; and (ii) there is no unassessed deficiency as to which any Company has received written notice or as to which the Companies have Knowledge based upon personal contact with any agent of a taxing authority against any Company.

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(d)Except as set forth on Section 3.17(d) of the Disclosure Letter, each Company and/or its Subsidiaries have not agreed to and, to the Knowledge of the Companies, each Company and/or its Subsidiaries are not required to make any adjustments pursuant to Section 481(a) of the Code by reason of a change in accounting method or otherwise for any Tax period for which the applicable federal statute of limitations has not yet expired.

(e)There are no material Liens for Taxes upon the assets or properties of any Company, except for statutory Liens for current Taxes not yet due and except for Taxes, if any, as are being contested in good faith.  None of the Sellers or any Company or its Subsidiaries has received any written notice for an audit or delinquency of any Taxes with respect to any portion of the Real Property which has not been resolved or completed.  None of the Sellers or any Company or its Subsidiaries is currently contesting any Taxes with respect to any portion of the Real Property except as disclosed in Section 3.17(e) of the Seller Disclosure Letter.

(f)None of the Companies nor any of their Subsidiaries is a party to any agreement providing for the allocation or sharing of Taxes.

(g)There are no special assessments or charges which have been levied, and with respect to which any Company has received written notice, against the Real Property that are not reflected on the tax bills issued with respect thereto.

(h)None of the Companies nor any of their Subsidiaries (i) has entered into any “reportable transaction” within the meaning of Treasury Regulations Section 1.6011-4(b) that must be disclosed pursuant to Section 6011 of the Code and the Regulations promulgated thereunder, (ii) is a party to any closing agreement as defined in Section 7121 of the Code or any similar provision of state, local, or foreign Law or (iii) has requested any private ruling from any Tax authority.

3.18Contracts and Commitments.  Except as set forth in Section 3.18 of the Seller Disclosure Letter, none of the Companies nor any of their Subsidiaries is a party to:

(a)any partnership agreements or joint venture agreements which require a payment, or delivery of assets or services beyond the 2006-2007 ski season and which are not terminable by the applicable Company on 30 days or less notice without penalty to the applicable Company or any of its Subsidiaries, or which contain exclusivity arrangements which will be binding upon Affiliates of the applicable Company (other than a Subsidiary thereof) following the Closing;

(b)any agreement pursuant to which the applicable Company or its Subsidiaries would be required to pay severance to any director, officer, employee or consultant;

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(c)any material agreement with another person or entity limiting or restricting the ability of the applicable Company or its Subsidiaries to enter into or engage in any market or line of business or restricting the ability of any Company or its Subsidiaries to enter into or engage in any market or line of business or restricts or limits the ability of any Company or its Subsidiaries to own, operate, sell, transfer, pledge, or otherwise dispose of or encumber any of its assets or properties;

(d)any material brokerage agreements;

(e)any agreements for the sale of any of the assets of the applicable Company or its Subsidiaries other than in the ordinary course of business or for the grant to any person or entity of any preferential rights to purchase any of its assets;

(f)any agreement relating to the acquisition by the applicable Company or its Subsidiaries of any operating business or the assets or capital stock of any other corporation, entity or business entered into during the last twelve (12) months;

(g)any material agreements relating to the incurrence, assumption, surety or guarantee of any indebtedness other than ASC-Level Financings;

(h)any material agreements (other than agreements granting rights to use readily available commercial Software and having an acquisition price of less than $50,000 in the aggregate for all such agreements and agreements allowing the use of Company trademarks, tradenames and the like in connection with promotional activities) (i) granting or obtaining any right to use any Intellectual Property or (ii) restricting the rights of the applicable Company or any of its Subsidiaries, or permitting other Persons, to use or register any Intellectual Property of the applicable Company;

(i)any material agreements under which the applicable Company or its Subsidiaries has made advances or loans to any entity or individual (which shall not include advances made to an employee of the applicable Company in the ordinary course of business consistent with past practice);

(j)any agreement for the supply of materials or services to a Company or its Subsidiaries (i) pursuant to which payments in excess of $50,000 in the aggregate were made by such Company or its Subsidiaries during the prior twelve (12) months, or (ii) that is otherwise necessary for the continued operation of the business which is conducted prior to the Closing Date, except, in either case, for purchases of retail inventory, insurance, or items subject to capital leases;

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(k)any agreement for the lease of personal property to or from any Person providing for lease payments in excess of $50,000 per year;

(l)any agreement relating to capital expenditures providing for payments in excess of $50,000 not cancelable without penalty or further payment or without more than 30 days notice;

(m)any agreement relating to the grant or receipt of any license or royalty fees providing for payments in excess of $50,000 to or from any Person;

(n)any agreement with ASC or any of its Affiliates that will not be terminated prior to the Closing;

(o)any sole source or exclusive supplier agreement; or

(p)except for agreements described in Section 3.18(a), any other agreement (or group of related agreements) the performance of which presently requires aggregate payments be made to or from any Company or any of its Subsidiaries in excess of $50,000 per year or requires performance by any Company and its Subsidiaries of any obligation for a period of time extending more than one (1) year from the date of this Agreement.

Each of the contracts to which any Company or any of its Subsidiaries is a party and which is required to be set forth on Section 3.18 of the Seller Disclosure Letter (the “Material Contracts”), a true and complete copy of each of which has been delivered or made available to the Buyer prior to the date hereof is in full force and effect and is the legal, valid and binding obligation of the applicable Company, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).  With respect to each Material Contract, neither the applicable Company nor its Subsidiaries nor, to the Knowledge of the Companies, any other party, is in material breach of violation of, or default under, any such Material Contract, and no event has occurred, is pending or, to the Knowledge of the Companies, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a material breach or default by the applicable Company or its Subsidiaries or, to the Knowledge of the Companies, any other party under such Material Contract.  With respect to each Material Contract, no Company or any of its Subsidiaries party thereto, and to the Knowledge of the Companies, no other party thereto, has repudiated any material provision of such contract.

3.19Environmental Matters.  Except as otherwise set forth on Section 3.19 of the Seller Disclosure Letter:

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(a)There has not been, and is not now present, any Contamination at any Real Property currently owned, leased or operated by any Company or its Subsidiaries, or any of them (including, without limitation, in improvements, soils, groundwater, surface water in, at, on, from or under such properties), and, to the Knowledge of the Companies, none of the Real Property is identified on any current list, schedule, log, inventory or record, however defined, of contaminated property (including, without limitation, the National Priorities List or other list with respect to sites from which there is or has been a Release of a Hazardous Substance, established and/or maintained or any Governmental Agency having jurisdiction over the Real Property and any Hazardous Substances including, without limitation, by the United States Environmental Protection Agency or the State of Maine;

(b)There was no Contamination at property formerly owned, leased or operated by any Company or its Subsidiaries, or any of them, during or, to the Knowledge of the Companies, prior to the period of ownership or operation by the Companies and their subsidiaries (including, without limitation in improvements, soils, groundwater, surface water in, at on, from or under such properties), and, to the Knowledge of the Companies, none of such property is identified on any current list, schedule, log, inventory or record, however defined, of contaminated property (including without limitation, the National Priorities List or other list with respect to sites from which there is or has been a Release of a Hazardous Substance), established and/or maintained or any Governmental Agency having jurisdiction over the property and any Hazardous Substances including without limitation, by the United States Environmental Protection Agency or the State of Maine;

(c)None of the Companies or any of their Subsidiaries, or any of them, nor, to the Knowledge of the Companies, any current or former tenant of any Real Property is subject to any orders, decrees, injunctions or other arrangements with any Governmental Agency or is subject to any indemnity or other agreement with any third party relating to liability or other obligation under any Environmental Law or relating to Hazardous Substances that obligates or may obligate any of the Companies or its Subsidiaries, or any of them, to pay money;

(d)The ownership and/or operation by each Company and its Subsidiaries of its business is currently and, at all times during such Company’s and its Subsidiaries’ ownership or operation, in strict compliance with all Environmental Laws;

(e)During ownership and/or operation of the Real Property by the Companies and their Subsidiaries and, to the Knowledge of the Companies, at all other times, Hazardous Substances have not been managed, manufactured, produced or generated by, Released, treated or stored in, on, at, under or transported to or from, the Real Property in violation of any Environmental Laws;

(f)To the Knowledge of the Companies, there has been no Release(s) and there exists no Environmental Condition(s) at, on, under or from any of the Real Property;

(g)There are no actual, pending, or, to the Knowledge of the Companies, threatened Environmental Claims including, without limitation, investigations by any Governmental Agency, against or concerning any Company or its Subsidiaries or any of their

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properties, assets or business, or any of them, which, if adversely decided, singly or in the aggregate, would reasonably be expected to have a Material Adverse Effect on the business use currently conducted or otherwise result in an Environmental Liability;

(h)There exists no material Lien affecting the business, properties or assets of any Company or its Subsidiaries arising under Environmental Laws; and

(i)The Sellers have made available to the Buyer complete and legible copies of all environmental assessments, reports, audits, communications to/from Governmental Agencies and other documents in their possession or under their control that relate to (i) any and all Real Property that each of the Companies and their Subsidiaries currently own, operate, or lease or (ii) compliance with Environmental Laws by the Companies and their Subsidiaries or any tenant at any and all Real Property.  To the Knowledge of the Companies, all information furnished to the Buyer concerning the Environmental Condition of any property, prior uses of any property, and/or the operations of the Companies and their Subsidiaries related to compliance with Environmental Laws is accurate and complete in all material respects, and there has been no material change in the Environmental Condition of any property of the Companies or their Subsidiaries and no violation of any Environmental Laws by any Company or its Subsidiaries since the most recent Phase I environmental site assessment.

3.20Intellectual Property.

(a)Section 3.20(a) of the Seller Disclosure Letter sets forth a true, correct, and complete list of all U.S. and foreign (i) issued Patents and Patent applications, (ii) Trademark registrations and applications, (iii) copyright registrations and applications, (iv) domain names and URLS and (v) Software, in each case which is owned, licensed or used by any Company or any of its Subsidiaries, and all material licenses, permissions, permits and other rights relating to Intellectual Property running to or from the Companies and their subsidiaries.  The applicable Company or its Subsidiaries, as set forth on Section 3.20(a) of the Seller Disclosure Letter, is the sole and exclusive beneficial and record owner of (or otherwise has the rights described therein to) each of the Intellectual Property items set forth on Section 3.20(a) of the Seller Disclosure Letter, and to the Knowledge of the Companies all such Intellectual Property is subsisting, valid and enforceable.  There are no actions that must be taken within 90 days from the date of this Agreement, including the payment of fees or the filing of documents, for the purposes of obtaining, maintaining, perfecting or renewing any rights in such registered or applied for Intellectual Property.

(b)Except as set forth on Section 3.20(b) of the Seller Disclosure Letter:

(i)each of the Companies owns, or has valid right to use, free and clear of all Liens, all Intellectual Property used or held for use in, or necessary to conduct, such Company’s business (including (as of the Closing Date) the CORIS and WRMS software systems as and to the extent provided in the CORIS and WRMS License

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Agreements); provided, however, that this Section 3.20(b)(i) shall not constitute a noninfringement representation (which noninfringement representation is the subject of Section 3.20(b)(ii) below);

(ii)the conduct of each Company’s business (including the products and services of such Company) as currently conducted does not infringe, misappropriate or otherwise violate any Person’s Intellectual Property rights, and there has been no such claim asserted or threatened in the past three years against such Company or, to the Knowledge of the Companies, any other Person;

(iii)to the Knowledge of the Companies, no Person is infringing, misappropriating or otherwise violating any Intellectual Property owned by or licensed to any Company, and no such claims have been asserted or threatened against any Person by any Company or, to the Knowledge of the Companies, any other Person, in the past three years;

(iv)the consummation of the transactions contemplated by this Agreement will not result in the loss or impairment of or payment of any additional amounts with respect to, nor require the consent of any other Person in respect of, any Company’s right to own, use or hold for use any of the Intellectual Property as owned, used or held for use in the conduct of the business of such Company as currently conducted; and

(v)each Company has at all times complied in all material respects with all applicable Laws, as well as its own rules, policies, and procedures relating to privacy, data protection, and the collection and use of personal information collected, used or held for use by such Company in the conduct of such Company’s business.  No claims have been asserted or, to the Knowledge of the Companies, threatened against any Company alleging a violation of any Person’s privacy or personal information or data rights and the consummation of the transactions contemplated hereby will not breach or otherwise cause any violation of any Law, policy or procedure related to privacy, data protection or the collection and use of personal information collected, used or held for use by any Company in the conduct of any Company’s business.  Each Company takes reasonable measures to ensure that such information is protected against unauthorized access, use, modification or other misuse.

3.21Related Persons.  Except as set forth on Section 3.21(a) of the Seller Disclosure Letter, as of the date hereof, and as immediately after the Closing, none of the assets, including Intellectual Property, used in the business of any Company and its Subsidiaries is or will be owned, or leased from a third party, by ASC, SKI or any of their respective Affiliates (other than such Company and its Subsidiaries).  Section 3.21(b) of the Seller Disclosure Letter sets forth a true and complete list of all material Contracts to which any Company or any of its Subsidiaries,

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on the one hand, and ASC, SKI or any of their respective Subsidiaries (other than any Company and their Subsidiaries), on the other hand, are party to.

3.22Condition of and Title to Assets.

(a)Section 3.22(a) of the Seller Disclosure Letter contains a listing (as of May 1, 2007) of the tangible assets owned by the Companies or their respective Subsidiaries having a book value in excess of $25,000 (excluding real property, buildings, fixtures and inventories).  Such assets are located on the Real Property, are not in the possession of any party other than a Company or its Subsidiaries, and are owned by one of the Companies or their respective Subsidiaries free and clear of all Liens.  Such assets are in the aggregate in sufficiently good operating condition (except for ordinary wear and tear) to allow the Companies and their Subsidiaries to operate their business as currently conducted, except where the failure to be in such condition or repair would not be reasonably likely to have a Material Adverse Effect on the applicable Resort.

(b)The accounts receivable of the Companies reflected on the Base Balance Sheet (as well as those arising thereafter and prior to the Closing Date) are (or will be) valid and genuine, arising from bona fide transactions in the ordinary course of the Companies’ (and their respective Subsidiaries’) business.

(c)The inventory held by the Companies and their Subsidiaries is of customary quality, is merchantable and fit for the purpose for which it was procured, is owned by the Companies and their Subsidiaries, will be (as of the Closing Date) free and clear of all Liens, and is accurately reflected in the Interim Financial Statements.

(d)Section 3.22(d) of the Seller Disclosure Letter contains a complete and accurate listing of the bank accounts and investment assets of the Companies and their Subsidiaries.

(e)Section 3.22(e) of the Seller Disclosure Letter contains a complete and accurate listing of each vendor with whom, during the current fiscal year, the Companies and their Subsidiaries expended more than $50,000, excluding retail inventory, capital leases and insurance.

(f)Except as set forth in Section 3.22(f) of the Seller Disclosure Letter, neither Company nor any of its Subsidiaries has made or is subject to any commitment to grant to any Governmental Agency in the future any easement or other right in respect of any of the Real Property.

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(g)Except as set forth in Section 3.22(g) of the Seller Disclosure Letter, neither ASC nor any of its Affiliates has issued any guarantee with respect to the indebtedness of any Company or its Subsidiaries.

(h)Section 3.22(h) of the Seller Disclosure Letter contains (i) a complete listing of all outstanding lifetime ski passes and (ii) a summary of the dollar amount of gift cards useable at either Resort.

3.23Absence of Certain Changes.  Since the Base Balance Sheet Date, each Company and its Subsidiaries have conducted their respective businesses in the ordinary course consistent with past practice. There has not been, with respect to any Company or any of its Subsidiaries, (i) any action taken since the Base Balance Sheet Date that, if taken during the period from the date of this Agreement through the Closing, would constitute a breach of Section 9.4, or (ii) since the Base Balance Sheet Date, any event, occurrence, development or state of circumstances or facts that has had or reasonably could be expected to have a Material Adverse Effect on either Resort.

3.24Water Rights.  Except as set forth in Section 3.24 of the Seller Disclosure Letter, each Company and its Subsidiaries has all water rights, riparian rights, appropriative rights, water allocations, water stock, water disbursal rights, water discharge rights and water collection rights necessary for the collection, discharge and disbursal of water and for the continued snowmaking, irrigation and operation of its business in accordance with its historical practices.

3.25No Clubs.  Except as set forth in Section 3.25 of the Seller Disclosure Letter, there are no clubs owned or operated by the Companies or their Subsidiaries in connection with their business, including, without limitation, golf and health and fitness facilities (each, a “Club” and collectively, the “Clubs”).  Neither the Sellers, the Companies or their Subsidiaries, their Affiliates, nor the officers, employees or agents thereof, have made any representations, statements, promises, or agreements (either orally or in writing) to any person or entity, including without limitation, home builders and prospective home buyers, regarding any of the following: (a) the right to membership in a Club or the intent to operate a Club as a private or semi-private country club, (b) the right to play golf at a Club or ski or make any other use of either Resort, except in the ordinary course of business, on the same terms and conditions as offered to the public, (c) the right to participate in the operation, management, or maintenance of either Resort or any of the properties or assets thereof, and (d) the manner in which any Club is to be operated, managed, maintained or improved.

3.26Books and Records.  The books and records of the Companies and their Subsidiaries (including all customer lists, manuals, drawings, imprints, engineering and design information, service and parts records, warranty records, maintenance and repair records relating to the Companies and their Subsidiaries, their business and any of their properties and assets) are complete and correct in all material respects and fairly reflect the transactions, dispositions, assets and liabilities of each of them.  The Sellers will deliver to the Buyer any such books and

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records in the possession of the Sellers, the Companies or their Subsidiaries (including any electronic records and data) prior to the Closing Date (subject to reimbursement for Seller’s out of pocket costs).  Each Company and its Subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurances that (a) transactions are executed in accordance with management’s general or specific authorizations, (b) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and to maintain asset accountability, (c) access to assets is permitted only in accordance with management’s general or specific authorization and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  Each Company and its Subsidiaries has maintained all books and records required to be maintained by applicable Law with respect to the operation of its business and the maintenance of its properties and assets.

ARTICLE IV

REPRESENTATIONS AND
WARRANTIES OF THE BUYER

The Buyer represents and warrants to ASC as follows:

4.1Organization of the Buyer.  Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Michigan, and has all requisite power and authority to own, operate and lease its properties and to carry on its business as presently owned or conducted.

4.2Power and Authority.  Buyer has the requisite corporate authority and power to execute and deliver this Agreement and the Related Documents and to perform the transactions contemplated hereby.  All corporate and stockholder action on the part of the Buyer necessary to approve or to authorize the execution and delivery of this Agreement and the Related Documents and the performance by the Buyer of the transactions contemplated hereby and thereby has been duly taken.  This Agreement has been duly executed and delivered by the Buyer and constitutes the legal, valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms, except to the extent that the enforceability thereof may be limited by the Enforceability Exceptions.

4.3No Conflicts.  Except as may be required under the HSR Act, neither the execution or delivery by the Buyer of this Agreement and the Related Documents nor the performance by the Buyer of the transactions contemplated hereby and thereby, shall:

(a)conflict with or result in a breach of any provision of the certificate of incorporation or bylaws of Buyer;

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(b)violate any existing applicable Law by which Buyer or any of its properties is bound, which violation would reasonably be expected to have a material adverse effect on the ability of Buyer to purchase the Stock or pay the Purchase Price, in each case on the terms and subject to the conditions set forth herein;

(c)require any consent, approval, authorization or other order or action of, or notice to, or declaration, filing or registration with, any Person other than any such consent, approval, authorization, order, action, notice, declaration, filing or registration the absence of which would not reasonably be expected to have a material adverse effect on the ability of Buyer to purchase the Stock or pay the Purchase Price, in each case on the terms and subject to the conditions set forth herein; or

(d)conflict with or result in a breach of any of the terms or provisions of, or constitute a default under any Material Contract other than such of the foregoing matters which would not reasonably be expected to have a material adverse effect on the ability of Buyer to purchase the Stock or pay the Purchase Price, in each case on the terms and subject to the conditions set forth herein.

4.4Purchase for Investment.  Buyer is purchasing the Stock for its own account for investment and not for resale or distribution in any transaction that would be in violation of the securities laws of the United States of America or any state thereof.  Buyer is an “accredited investor” as that term is defined in Rule 501 of the Regulation D promulgated under the Securities Act.

4.5Litigation.  There is no Litigation pending or, to the knowledge of Buyer, threatened against Buyer or any of its properties or assets which seeks to restrain, enjoin or prevent the consummation of this Agreement or any of the transactions contemplated hereby.

4.6Brokers.  No broker, finder or similar intermediary has acted for or on behalf of Buyer or its Affiliates in connection with this Agreement or the transactions contemplated hereby, and no broker, finder, agent or similar intermediary is entitled to any broker’s, finder’s or similar fee or other commission in connection therewith based on any agreement, arrangement or understanding with Buyer or its Affiliates or any action taken by Buyer or its Affiliates.

4.7Availability of Funds.  Buyer has cash available or existing borrowing facilities or binding funding commitments, true and complete copies of which have been provided to the Sellers, in each case that are sufficient to enable it to consummate the transactions contemplated by this Agreement and the Related Documents.

4.8No Divestitures.  To the knowledge of Buyer, none of the businesses or operations of Buyer or any of its Subsidiaries or use or ownership of assets or interests in connection with such businesses or operations would reasonably be expected, in connection with and in anticipation of the consummation of the transactions contemplated hereby, to result in Buyer being required to divest itself or hold or operate separately any of its assets or result in any other materially burdensome condition to Buyer or any Company

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ARTICLE V

EMPLOYEES AND EMPLOYEE-RELATED MATTERS

5.1Employment Matters.  Except to the extent otherwise agreed in writing by the parties, the Buyer agrees to cause each Company to offer employment to the employees of such Company and its Subsidiaries as of the Closing Date (the “Employees”) and that, through the day that is 180 days following the Closing Date, the compensation paid and benefits (to the extent described on Section 5.1 of the Seller Disclosure Letter) provided to the Employees, in the aggregate, will be at least comparable to the aggregate compensation and benefits under such Company’s compensation benefit plans immediately prior to the Closing Date.

5.2Benefit Plans.

(a)For all purposes of any employee welfare benefit plans in which Employees participate after the Closing Date, the Buyer shall credit Employees for prior service with the Sellers and their Affiliates to the extent permitted under the applicable Plan.  The Buyer shall allow Employees with vacation earned but unused as of the Closing Date to use such vacation in accordance with the Buyer’s policy as in effect on the date hereof with respect to Buyer’s employees generally.  The Buyer shall (i) credit deductible payments and coinsurance payments made in the plan year in which the Closing Date occurs (the “Current Plan Year”) by Employees under the applicable Company’s group health plans on or prior to the Closing Date towards deductibles and other out-of-pocket costs incurred by Employees in the Current Plan Year in connection with any group health plan in which Employees participate after the Closing Date; (ii) waive all pre-existing condition clauses applicable to any group health plan in which Employees participate after the Closing Date to the extent permitted under the applicable Plan; and (iii) waive eligibility waiting periods for Employees in connection with any group health plan in which Employees participate after the Closing Date to the extent permitted under the applicable Plan.  For purposes of the preceding sentence, “group health plan” shall have the meaning prescribed in Section 5000(b)(1) of the Code.

(b)Effective as of the Closing Date or as soon thereafter as reasonably practicable, the Buyer shall cause each Company to become a participating employer in the Buyer’s 401(k) Retirement Plan (the “401(k) Plan”) and shall cause each Employee to be given credit for his or her prior service as reflected in the records of the Companies for all purposes under the 401(k) Plan.

(c)No provision in this Article V shall be construed to prevent the termination of employment of any Employee or the amendment or termination of any particular Company Plan to the extent not prohibited by its terms as in effect immediately prior to the date hereof.

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ARTICLE VI

CLOSING

6.1Closing Date.  Subject to the satisfaction or waiver of the conditions set forth in Articles VII and VIII hereof, the Closing, unless the parties otherwise agree, shall be held at 10:00 a.m. on the second Business Day after the last to be fulfilled or waived of such conditions (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of such conditions) is satisfied or waived, at the offices of Pierce Atwood LLP, Portland, Maine, or at such other place as the parties hereto otherwise agree.

ARTICLE VII

CONDITIONS TO OBLIGATIONS OF
THE BUYER TO CONSUMMATE THE TRANSACTION

The obligations of the Buyer to be performed at the Closing shall be subject to the satisfaction or Buyer’s waiver, at or prior to the Closing, of the following conditions:

7.1Representations and Warranties; Compliance with Covenants.  The representations and warranties of the Sellers contained herein shall be true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse Effect” or similar terms set forth therein) both as of the date of this Agreement and on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date (except for those representations and warranties that are expressly limited by their terms to dates or times other than the Closing Date, which representations and warranties need only be true and correct as of such other date or time), except where the failure to be so true and correct individually or in the aggregate with all other such failures, does not have and would not reasonably be expected to have a Material Adverse Effect on either Resort.  The Sellers shall have performed and complied in all material respects with all covenants and agreements required hereby to be performed or complied with by them on or prior to the Closing Date.  ASC and SKI shall have delivered to the Buyer a certificate, dated the date of the Closing and signed by officers of ASC and SKI, to the foregoing effect.

7.2No Material Adverse Effect.  Since the date hereof, there shall have occurred no change, effect, condition, event or circumstance which has had or would reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect on either Resort.

7.3No Injunction.  No Judgment shall have been rendered in any Litigation which has the effect of enjoining the consummation of the transactions contemplated by this Agreement, and no Litigation shall be pending that would reasonably be expected to result in such a Judgment.

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7.4Approvals.  All Approvals required under the HSR Act necessary for the consummation of the transactions contemplated by this Agreement shall have been obtained, and all applicable waiting periods thereunder shall have expired or been terminated.

7.5Release of Liens.  On or prior to Closing, the Sellers shall have effected the release of (i) all Liens securing the ASC-Level Financings and (ii) all other Liens (other than Permitted Exceptions and any Liens relating to the Capital Leases) securing monetary obligations.

7.6Assignment.  ASC and SKI, as applicable, shall have delivered to the Buyer stock certificates representing all of the outstanding shares of the Stock and executed stock powers, in form and substance reasonably satisfactory to the Buyer, concerning the Stock (the “Assignment”).

7.7Related Documents.  The Sellers and the Companies shall have executed and delivered all Related Documents required to be executed by them at or prior to the Closing.

7.8FIRPTA.  The Buyer shall have received a statement from ASC that it is not a “foreign person” within the meaning of Section 1445 of the Code.

7.9Resignations.  On the Closing Date, the Sellers shall cause to be delivered to the Buyer duly signed resignations, effective immediately after the Closing, of all directors of the Companies and their respective Subsidiaries and all officers of the Companies which are not on any Company’s payroll.

7.10Settlement of Accounts.  On or prior to the Closing Date, all of the accounts payable and other obligations owing from any Company to ASC or any of its Affiliates shall have been cancelled or forgiven and, following the Closing Date, the Companies shall have no obligation or liability in respect thereof.

7.11Specimen Title Policies.  Provided that Buyer has taken all customary and necessary actions for the issuance of the title policies, including without limitation satisfying the requirements of the Title Company within the control and reasonably required to be satisfied on the part of Buyer, Title Company shall have committed and be prepared to deliver contemporaneously with the Closing, at the Buyer’s sole expense, an Owner’s Policy of Title Insurance materially in accordance with the Specimen Title Policies and with no exceptions to title other than as set forth in the Specimen Title Policies or the Permitted Exceptions.  Sellers hereby covenant to satisfy all requirements of the Title Company within the control of and reasonably required to be satisfied on the part of Sellers, including without limitation all actions required to be performed by Sellers pursuant to this Agreement.

7.12Approval of Documentation.  The form and substance of all certificates, instruments, opinions and other documents delivered to Buyer under this Agreement shall be satisfactory in all reasonable respects to Buyer and its counsel. 

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7.13Opinion and Certificates.

(a)Buyer shall have received an opinion of counsel to ASC, SKI and the Companies as to (i) the due organization and good standing of each such entity under the laws of its jurisdiction of incorporation, (ii) the due authorization by all necessary corporate action on the part of each such entity of the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, (iii) no knowledge of any litigation or investigation against the Sellers (relating to or affecting any Company, its Subsidiaries, the Resorts or the transaction contemplated by this Agreement) or any Company or its Subsidiaries and (iv) no default under or violation of any articles of incorporation or bylaws of any of the Sellers or the Companies and their Subsidiaries.

(b)Buyer shall have received tax clearance certificates with respect to each of the Companies and their respective Subsidiaries from the Maine Department of Revenue Services.

(c)Buyer shall have received copies of the approvals of Governmental Authorities that are required for the consummation of the transactions contemplated by this Agreement and which are listed on Section 7.13(c) of the Seller Disclosure Letter.

ARTICLE VIII

CONDITIONS TO OBLIGATIONS OF
THE SELLERS TO CONSUMMATE THE TRANSACTION

The obligations of the Sellers to be performed at the Closing shall be subject to the satisfaction or waiver, at or prior to the Closing, of the following conditions:

8.1Representations and Warranties; Compliance with Covenants.  The representations and warranties of the Buyer contained herein shall be true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse Effect” or similar terms set forth therein) both as of the date of this Agreement and on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date (except for those representations and warranties that are expressly limited by their terms to dates or times other than the Closing Date, which representations and warranties need only be true and correct as of such other date or time), except where the failure to be so true and correct, individually or in the aggregate with all other such failures, does not have and would not reasonably be expected to have a Material Adverse Effect on the Buyer.  The Buyer shall have performed and complied in all material respects with all material covenants and agreements required hereby to be performed or complied with by it on or prior to the Closing Date.  The Buyer shall have delivered to ASC, a certificate, dated the date of the Closing and signed by an officer of the Buyer, to the foregoing effect.

8.2No Injunction.  No Judgment shall have been rendered in any Litigation which has the effect of enjoining the consummation of the transactions contemplated by this Agreement

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and no Litigation shall be pending that would reasonably be expected to result in such a Judgment.

8.3Approvals.  All Approvals required under the HSR Act for the consummation of the transaction contemplated by this Agreement shall have been obtained, and all applicable waiting periods thereunder shall have expired or been terminated.  The shareholders of ASC shall have duly authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.  Twenty (20) days shall have passed since the date that ASC mailed an information statement pursuant to Section 14(c) of the Securities Exchange Act of 1934 providing notification of shareholder approval of the transaction contemplated by this Agreement (an “Information Statement”) to its shareholders.  ASC covenants that it will promptly submit a draft Information Statement to the Securities and Exchange Commission and (a) shall promptly send such Information Statement to its shareholders after the Securities and Exchange Commission declines review of such Information Statement or (b) if the Securities and Exchange Commission does review and comment on such Information Statement, shall diligently pursue finalization of such Information Statement and mail such Information Statement promptly thereafter.

8.4Settlement of Accounts.  On or prior to the Closing Date, all of the accounts receivable and other obligations owing to any Company from ASC or any of its Affiliates shall have been cancelled or forgiven and, following the Closing Date, ASC and any such Affiliate shall have no obligation in respect thereof.

8.5Related Documents.  The Buyer shall have executed and delivered all Related Documents required to be executed by them at or prior to the Closing.

8.6Letters of Credit.  The Buyer shall have provided substitute letters of credit for each of those letters of credit furnished by (or for the benefit of) SMC and SRSC and listed on Section 8.6 of the Seller Disclosure Letter (the “Seller LCs”), and each of the Seller LCs shall have been unconditionally released by the beneficiary thereof.

ARTICLE IX

COVENANTS

9.1Regulatory Filings, Etc.  As soon as practicable after the date hereof (and in any event no later than five (5) Business Days after the date hereof), the parties hereto shall make all filings with the appropriate Governmental Agencies of the information and documents required or contemplated by the HSR Act and the FCC and make application for all required Approvals thereunder or therewith with respect to the transactions contemplated by this Agreement.  The parties hereto shall keep each other apprised of the status of any communications with, and inquiries or requests for information from, such Governmental Agencies, in each case, relating to the transactions contemplated hereby.  The parties hereto shall each use their respective commercially reasonable best efforts to comply as expeditiously as possible in good faith with all

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lawful requests of the Governmental Agencies for additional information and documents pursuant to such Laws.

9.2Injunctions.  If any court having jurisdiction over any of the parties hereto issues or otherwise promulgates any restraining order, injunction, decree or similar order which prohibits the consummation of any of the transactions contemplated hereby or by any Related Document, the parties hereto shall use their respective commercially reasonable efforts in good faith to have such restraining order, injunction, decree or similar order dissolved or otherwise eliminated as promptly as possible and to pursue the underlying Litigation diligently and in good faith.  Notwithstanding anything to the contrary contained in this Agreement, nothing contained in this Section 9.2 shall limit the respective rights of the parties to terminate this Agreement in accordance with the terms of Section 12.1 or shall limit or otherwise affect the respective conditions to the obligations of the parties set forth in Articles VII and VIII hereof.

9.3Access to Information.  Between the date of this Agreement and the Closing Date, the Sellers shall, and shall cause their Affiliates (to the extent reasonably required) to, upon reasonable request by the Buyer, provide the Buyer, the Buyer’s lenders and their respective employees, counsel, accountants and other representatives and advisors (collectively, the “Representatives”) full access, during normal business hours on reasonable notice (and at such other times as Buyer reasonably requests) and under reasonable circumstances, to any and all premises, properties, Contracts, commitments, books and records and other information exclusively of or relating exclusively to the Stock or the Companies and their properties and assets, or relating to the status of any filings with Governmental Authorities made in connection with the transactions contemplated by this Agreement (the “Company Subject Matter”); provided, however, that the Sellers shall use their respective commercially reasonable efforts to provide to the Buyer and its lenders any such information that does not relate exclusively to the Company Subject Matter to the extent such information can be segregated without undue effort from information relating to the Sellers or their Affiliates and that is not otherwise confidential or of a competitive nature; provided, further, that such access may be limited to the location at which the relevant information is normally maintained, shall not unreasonably interfere with the operations of the Companies or their Affiliates, and shall be limited to the extent reasonably determined to be required by the applicable law.  In furtherance of the foregoing but subject to the limitations of this Section 9.3, the Sellers shall, and shall cause each Company’s Subsidiaries to, permit the Buyer, the Buyer’s lenders and their respective Representatives to have reasonable access to the Real Property to perform, at the Buyer’s expense, any environmental testing that the Buyer reasonably deems appropriate, including, without limitation, a Phase I environmental site assessment of any such property pursuant to ASTM Standard E 1527-05.  Prior to the Closing Date, neither the Buyer nor any of its Representatives shall contact or make inquiries to any governmental agencies (other than as contemplated by Articles VII and VIII hereof) in connection with the transactions contemplated by this Agreement without the prior written consent of Sellers.  Sellers shall promptly notify Buyer of any event or circumstance that could reasonably be expected to cause Sellers to breach any representation, warranty or covenant contained in this Agreement and promptly commence and diligently pursue reasonable actions to prevent or cure the same.

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9.4No Extraordinary Actions by the Sellers.  In each case except as disclosed on Section 9.4 of the Seller Disclosure Letter, or consented to or approved in writing by the Buyer (which consent or approval shall not be unreasonably withheld, conditioned, or delayed), or contemplated by this Agreement or the Related Documents from the date hereof until the Closing, the Sellers shall:

(a)cause the Companies and their respective Subsidiaries to conduct their respective businesses in the ordinary course and in accordance, in all material respects, with their respective past policies and procedures;

(b)not amend or otherwise change the Certificate of Incorporation or bylaws or other organizational documents of any Company or any of its Subsidiaries;

(c)not permit any Company or any of its Subsidiaries to admit, or undertake to admit, any new stockholders, nor issue or sell any stock or other securities of any Company or any of its Subsidiaries or any options, warrants or rights to acquire any such stock or other securities or repurchase or redeem any stock or other securities of any Company;

(d)not split, combine or reclassify any shares of any Company’s or any Subsidiary’s capital stock; or declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of such capital stock;

(e)cause the Companies and each of their respective Subsidiaries not to take any action with respect to, or make any material change in its accounting or Tax policies or procedures, except as may be required by changes in generally accepted accounting principles upon the advice of its independent accountants or as required by the Securities and Exchange Commission (the “SEC”) or any securities exchange;

(f)cause the Companies and their respective Subsidiaries not to make or revoke any material Tax election or settle or compromise any material Tax liability, or amend any material Tax Return;

(g)comply with and not take any action or fail to take any action which would constitute a material breach or default under any of (i) the Certificate of Incorporation or bylaws or other organizational documents of any Company or any of its Subsidiaries, (ii) any Real Property Lease, (iii) any other material Lease, or (iv) any other Material Contract and/or any material judgment, order or other writing with the force of Law;

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(h)not dispose of, pledge, hypothecate, encumber, transfer or assign any of the Stock or the equity securities of any Subsidiary of any Company, nor any material assets of any Company or any of its Subsidiaries;

(i)cause the Companies and their respective Subsidiaries not to acquire, lease or license any assets or property, other than purchases of assets in the ordinary course of business, or merge or consolidate with any entity;

(j)not take any action or omit to take any action for the purpose of directly or indirectly preventing, materially delaying or materially impeding the consummation of the transactions contemplated by this Agreement;

(k)maintain in full force and effect the casualty insurance policies currently in effect with respect to the Real Property and all other Insurance Policies, and shall deliver to the Buyer, upon request, reasonable evidence of same in the form of certificates of such insurance;

(l)not terminate, amend or modify any Real Property Lease, material Lease, or any other Material Contract, nor enter into any new or additional Material Contracts of any type, nature or description, except in the ordinary course of business and in accordance with past practice;

(m)not undertake any material capital improvement projects nor make any material additions, improvements or renovations to existing facilities and/or equipment;

(n)not institute or settle, except for settlements which do not exceed $100,000 in the aggregate or are claims which are fully covered by insurance, except for applicable self-insured retentions under existing insurance policies, any Litigation;

(o)not create, incur or assume any short-term Indebtedness (including obligations in respect of capital leases) on behalf of any Company or any Subsidiary, other than in the ordinary course of business, or create, incur or assume any long-term Indebtedness, and not assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, or make any loans, advances or capital contributions to, or investments in, any other Person;

(p)not enter into, adopt or amend in any respect any Company Plan or (except for annual adjustments in the ordinary course of business consistent with past practice) increase in any material respect the compensation or benefits of, or modify the employment terms of, its directors, officers or employees, generally or individually, or pay or promise to pay any bonus or

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benefit to its directors, officers or employees (except as required by the Company Plans in accordance with their terms immediately prior to the execution of this Agreement) or hire any new officers, or, except in the ordinary course of business, any new employees, nor terminate the employment of or reassign any employees other than non-officer employees in the ordinary course of business consistent with past practice;

(q)not increase the compensation or benefits payable under any existing employment, severance or termination policies or agreements, or enter into any employment, deferred compensation, severance or other similar agreement (or amend any such existing agreement) with any director, officer or employee of any Company or any Subsidiary (except as required by applicable Law), except for anniversary date adjustments for at-will employees;

(r)not enter into any collective bargaining agreement or similar labor agreement, or renew, extend or renegotiate any existing collective bargaining agreement or similar labor agreement; and

(s)not take any action that would make any representation or warranty of Sellers hereunder untrue in any material respect;

(t)take all commercially reasonable actions to cause the Companies and their Subsidiaries to preserve their organizational structures and their goodwill;

(u)exercise commercially reasonable efforts to cause the Companies and their Subsidiaries to maintain their properties and assets in good working order (ordinary wear and tear excepted);

(v)exercise commercially reasonable efforts to cause the Companies and their Subsidiaries to comply in all material respects with all applicable Laws;

(w)exercise commercially reasonable efforts to cause the Companies and their Subsidiaries to maintain their books and records in a consistent manner; and

(x)not agree to do anything prohibited by this Section 9.4.

9.5Commercially Reasonable Efforts; Further Assurances.

(a)Upon the terms and subject to the conditions hereof (including without limitation, Sections 9.2 and 13.3), the Sellers and the Buyer each agree, and agree to cause each of their respective Affiliates, to use their respective commercially reasonable efforts in good faith

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to take or cause to be taken all actions and to do, or cause to be done, all things necessary, proper or advisable to ensure that the conditions set forth in Articles VII and VIII are satisfied and to consummate and make effective the transactions contemplated by this Agreement and the Related Documents insofar as such matters are within their respective control.

(b)Except as otherwise expressly provided for in this Agreement, the parties hereto shall provide such information and cooperate fully with each other in making such applications, filings and other submissions which may be required or reasonably necessary in order to obtain all approvals, consents, authorizations, releases and waivers as may be required under this Agreement and the Related Documents as conditions to the parties’ Closing obligations.

(c)Except as otherwise expressly provided for in this Agreement, the parties hereto shall promptly take all actions necessary to make each filing, including any supplemental filing, which either of them may be required to make with any Governmental Agency as a condition to or consequence of the consummation of the transactions contemplated by this Agreement or any Related Document.

(d)On or prior to the Closing, the parties hereto shall execute and deliver to each other the Related Documents.

(e)The Sellers shall, to the extent permitted by applicable Law, use their commercially reasonable efforts to assist and cooperate with the Buyer in making such arrangements as would permit the continued sales of alcoholic beverages by the Companies at the Resorts following the Closing and pending the issuance of a new liquor license to the Companies reflecting the transactions contemplated by this Agreement, including assisting with transfer applications; and (ii) in causing the transfer of other operational permits used in the conduct of the Companies’ and their respective Subsidiaries’ businesses, including explosive permits, food service licenses and permits, FCC permits, Public Utilities Commission permits and day care licenses.

(f)[Intentionally omitted.]

(g)The Buyer agrees to cause the Companies to honor ASC’s obligations under ASC’s gift cards, Peaks Rewards Coupons/First Edge Visa Rewards Coupons (until their stated expiration date), Edge Frequent Skier Points and single-day complimentary lift ticket vouchers, as well as obligations arising in the 2006-07 ski season under ASC’s snow guaranty and season pass refund programs to customers who purchased their passes through one of the Resorts.  ASC will regularly and promptly reimburse the Buyer for ASC issued gift cards and Peaks Rewards Coupons to the extent redeemed at the Resorts after the Closing.  Each of ASC and the Companies will provide access to their respective systems to the other parties to enable

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them to track the usage of such cards, tickets and passes.  The manner of reimbursement and access described above shall be agreed upon in good faith by ASC and the Buyer.

(h)Subject to compliance by the Sellers with any proprietary rights, confidentiality or similar regulations or agreements, the Sellers shall transfer, or shall cause to be transferred, to each Company, at or prior to the Closing, all data and all right, title and interest to such data that relates exclusively to such Company and is maintained in electronic format by ASC or any of its Affiliates, including, without limitation, marketing data and customer lists (including skiers and lodging guests) for the past three years, and shall not retain any of such data for the use of ASC or for any other reason; provided, however, that the Sellers shall use their respective commercially reasonable efforts to transfer to each Company any such data that does not relate exclusively to such Company to the extent such data can be segregated from information relating to the Sellers or their Affiliates (other than such Company) and that is not otherwise subject to a proprietary rights, confidentiality or similar agreement.

(i)To the extent that, following the Closing, none of the Companies shall be able to continue to use any of the licenses set forth on Section 9.5(i) of the Seller Disclosure Letter, the Sellers agree to use their commercially reasonable efforts (excluding the payment of money or the delivery of any item of value) to assist such Company in replacing such licenses and/or to provide such Company with the benefits of such licenses (including allowing such Company to act as sub-licensee to the extent the underlying license permits).

(j)The Buyer agrees to cause the Companies to honor ASC’s obligations under the partnership marketing arrangements set forth on Section 9.5(j) of the Seller Disclosure Letter.  The parties agree to act in good faith to address any such marketing arrangements which continue beyond the 2006/2007 ski season.

(k)The Sellers shall use their commercially reasonable efforts to obtain estoppel certificates, in form and substance reasonably satisfactory to the Buyer, from all third parties to the contracts listed on Section 9.5(k) of the Seller Disclosure Letter.

(l)The Buyer agrees to cause the Companies to honor ASC’s obligations with respect to the ski passes described in Section 3.7(a) of the Seller Disclosure Letter, and to cause any subsequent owner or operator of either Resort to assume such obligations in writing.

9.6Use of Names; Name Change.

(a)As soon as reasonably practicable after the Closing (and in no event later than sixty (60) days after the Closing), the Buyer shall cease (and cause the Companies to cease) to use any written materials, including, without limitation, labels, packing materials, letterhead, advertising materials and forms, which include the words identified on Section 9.6(a) of the

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Seller Disclosure Letter (collectively, the “Seller Trade Names”); provided, however, that the Companies may use inventory, checks, application forms, product literature and sales literature (but not letterhead, business cards or the like), trail maps, signs or the like, each as in existence as of the Closing Date, until the earlier of the exhaustion of such materials or the opening of the 2007/2008 ski season.  Except as specifically provided herein, Buyer agrees that it shall not hereafter permit the Companies to adopt or use any trade name, trademark or service mark incorporating any of the Seller Trade Names or any trade name, trademark or service mark likely to indicate endorsement or sponsorship by, or any connection with, the Sellers or any of their Affiliates, including the name or mark “American Skiing” or any name or mark similar thereto.

(b)As soon as commercially reasonably practicable after the Closing (and in no event later than sixty 60 days after the Closing), ASC shall, and shall cause its Affiliates to, cease to use any written materials, including labels, packing materials, letterhead, advertising materials and forms, which include the words identified on Section 9.6(b) of the Seller Disclosure Letter (collectively, the “Buyer Trade Names”); provided, however, that ASC and its Affiliates may use inventory, checks, application forms, product literature, sales literature (but not letterhead, business cards or the like), trail maps, signs and the like, each as in existence as of the Closing Date, until the earlier of the exhaustion of such materials or the opening of the 2007/2008 ski season; and, provided, further, that ASC and its Affiliates shall be entitled to utilize “Perfect Turn” in connection with the operation of the Canyons Resort through the 2009-10 ski season.  .  Except as specifically provided herein, the Sellers agree that they and their Affiliates shall not hereafter adopt or use any trade name, trademark or service mark incorporating any of the Buyer Trade Names or any trade name, trademark or service mark likely to indicate endorsement or sponsorship by, or any connection with, Buyer or any of its Affiliates.

(c)ASC shall, and shall cause its Affiliates to, cease and desist the use of the internet domain names “Sugarloaf.com” and “Sundayriver.com” and any other domain names containing the words “Sugarloaf” or “Sunday River” at the Closing Date and all times thereafter.

9.7Confidentiality; Publicity.  Each party shall hold, and shall use its commercially reasonable efforts to cause its employees and agents to hold, in strict confidence all information concerning the other parties or their Affiliates furnished to it by such other Persons, all in accordance with the Confidentiality Agreement, as if originally a party thereto who was required to keep information confidential except that the Sellers shall maintain such information with respect to each Company as confidential only to the extent such information is specific to such Company and does not relate to the operations of ASC or any of their Affiliates following the Closing Date.  Any release to the public of information with respect to the matters contemplated by this Agreement (including any termination of this Agreement) shall be made only in the form and manner approved jointly by ASC and Buyer, provided that if a party is required by law to make any disclosure concerning such matters, such party shall discuss in good faith with the other party the form and content of such disclosure prior to its release (but such release shall not require the prior approval of the other parties).

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9.8Transition.  Without limiting the agreements set forth in Sections 9.9 and Article XI, for a period of six (6) months following the Closing Date, ASC shall, and the Buyer shall and shall cause the Companies to, cooperate in good faith to effect an orderly transition in the operation of the Resorts, provided, that no party shall be required to expend any funds or enter into any contractual commitments in performing its obligations under this Section 9.8.  In connection with the foregoing, at the Closing the Buyer shall cause the Companies to, and ASC shall, execute and deliver a Transition Services Agreement substantially in the form attached hereto as Exhibit C.

9.9Access to Records After the Closing.  The Sellers and the Buyer recognize that subsequent to the Closing they may have information and documents which relate to the Companies, the Resorts, their employees, their properties and Taxes that relate to the period prior to Closing and to which the other party may need access subsequent to the Closing.  Each such party shall provide the other party and their Representatives commercially reasonable access, during normal business hours on reasonable notice (and at such other times as such other party reasonably requests) and under reasonable circumstances, to all such information and documents, and to furnish copies thereof, which such other party reasonably requests.  The Buyer and the Sellers agree that prior to the destruction or disposition of any such books or records pertaining to the Companies at any time within three (3) years after the Closing Date (or, in any matter involving Taxes, within seven (7) years after the Closing Date), each such party shall provide not less than thirty (30) calendar days prior written notice to the other such party of any such proposed destruction or disposal.  If the recipient of such notice desires to obtain any such documents, it may do so by notifying the other party in writing at any time prior to the scheduled date for such destruction or disposal.  Such notice must specify the documents which the requesting party wishes to obtain.  The parties shall then promptly arrange for the delivery of such documents.  All out-of-pocket costs associated with the delivery of the requested documents shall be paid by the requesting party.  Notwithstanding any provision of this Agreement or the Related Documents to the contrary, in no event shall the Sellers or their Affiliates be required to provide the Buyer with access to or copies of the Sellers’, or their Affiliates’ Tax Returns to the extent such Tax Returns do not relate to the Companies and in no case shall the Buyer have any right to review any Tax Returns other than pro forma Tax Returns of the Companies.

9.10No Employee Solicitation.  For a period of 12 months following the Closing, without the prior written agreement of the other parties, (a) the Buyer and its Affiliates shall not, directly or indirectly, solicit for employment or employ or cause to leave the employ of ASC or its Affiliates any individual that is serving at such time as an officer of ASC or its Affiliates; and (b) ASC and its Affiliates shall not, directly or indirectly, solicit for employment any individual that is employed at such time by any Company or any of its Subsidiaries provided that the use of a general solicitation (such as advertisement) not specifically directed to applicable employees will not be deemed to be a violation of the no solicitation provision of this Section 9.10.

9.11Interim Operations of the Buyer.  Prior to the Closing, unless the Sellers have otherwise consented in writing thereto, the Buyer shall not:

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(a)take any action or omit to take any action for the purpose of directly or indirectly preventing, materially delaying or materially impeding the consummation of the transactions contemplated by this Agreement;

(b)directly or indirectly authorize any of, or commit or agree, in writing or otherwise, to take any action or actions which would make any representations of the Buyer set forth in this Agreement untrue or incorrect in any material respect; and

(c)enter into any binding agreement to do any of the foregoing.

9.12No Solicitation.  From the date hereof until the earlier of the Closing or the termination of this Agreement, Sellers shall not and shall cause each of their Representatives not to, directly or indirectly, (a) initiate, solicit, encourage or otherwise facilitate any inquiry, proposal, offer or discussion with any party (other than the Buyer) concerning any merger, reorganization, consolidation, recapitalization, business combination, liquidation, dissolution, share exchange, sale of stock, sale of material assets or similar business transaction involving the Company, its Subsidiaries or any division of any Company, (b) furnish, or make available, any non-public information concerning the business, properties or assets of any Company, its Subsidiaries or any division of any Company to any Person (other than the Buyer) or (c) engage in discussions or negotiations with any Person (other than the Buyer) concerning any such transaction.  Sellers shall immediately notify any Person with which discussions or negotiations of the nature described above were pending that the Sellers are terminating such discussions or negotiations.  If the Sellers receive any inquiry, proposal or offer of the nature described above, the Sellers shall, within two Business Days after such receipt, notify the Buyer of such inquiry, proposal or offer, including the general terms of such inquiry, proposal or offer.

9.13Intercompany Guarantees.  Prior to the Closing Date, ASC shall use its commercially reasonable efforts to cause the Companies and any of their respective Subsidiaries to be removed or released, effective as of the Closing, or, if not possible, as soon thereafter as reasonably practicable, in respect of all obligations of ASC or any of its Affiliates under each of the guarantees and letters of comfort obtained by the Companies or any of their respective Subsidiaries for the benefit of ASC and its Affiliates (other than the Companies and their respective Subsidiaries) prior to the Closing, and for all obligations of the Companies and their respective Subsidiaries in respect thereof to be terminated, with, in each case, such substitution, removal, release and termination to be in form and substance reasonably satisfactory to the Buyer.  ASC agrees to indemnify and hold harmless the Buyer and its Affiliates (including the Companies and their respective Subsidiaries) from and against and in respect of Indemnifiable Losses incurred by the Buyer and its Affiliates (including the Companies and their respective Subsidiaries) under or pursuant to any such guarantee or letters of comfort.  Prior to the Closing Date, the Companies shall use their commercially reasonable efforts and following the Closing, the Buyer shall use its commercially reasonable efforts, to cause ASC and any of its Affiliates to be removed or released, effective as of the Closing, or, if not possible, as soon thereafter as reasonably practicable, in respect of all obligations of the Companies or any of their respective Subsidiaries under each of the guarantees and letters of comfort obtained by ASC or any of its

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Affiliates for the benefit of the Companies and their respective Subsidiaries prior to the Closing, and for all obligations of ASC and its Affiliates in respect thereof to be terminated, with, in each case, such substitution, removal, release and termination to be in form and substance reasonably satisfactory to ASC.  The Buyer agrees to indemnify and hold harmless ASC and its Affiliates from and against and in respect of Indemnifiable Losses incurred by ASC and its Affiliates under or pursuant to any such guarantee or letters of comfort.

9.14Third Party Contracts and Cross Default Provisions.

(a)The parties agree that, to the extent that ASC or any of its Affiliates provides any Company and any of their respective Subsidiaries the ability to receive services or use assets that any Company or any of its Subsidiaries prior to the Closing receives or uses pursuant to a contract of ASC or any of its Affiliates with a third party, the parties will cooperate with each other to cause such Companies and any of their respective Subsidiaries, as applicable, to directly enter into a new contract with such third party with respect to such services or assets to the extent the Buyer desires that such Companies and their respective Subsidiaries continue to receive such services from, or use such assets of, such third party after the Closing, which cooperation shall be deemed to include, without limitation, ASC requiring a third party, to the extent it has the power to do so under any such contract, to split such contract into two separate contracts, one with ASC or its Affiliate and the other with such Company.  The parties agree that, to the extent that any of the Companies or any of their respective Subsidiaries provides ASC and any of its Affiliates (other than the Companies and their respective Subsidiaries) prior to the Closing the ability to receive services or use assets that ASC or any of its Affiliates (other than the Companies and their respective Subsidiaries) receives or uses pursuant to a contract of any of the Companies or any of their respective Subsidiaries with a third party, the parties will cooperate with each other to cause ASC and any of its Affiliates (other than the Companies and their respective Subsidiaries), as applicable, to directly enter into a new contract with such third party with respect to such services or assets to the extent ASC desires that ASC and the Affiliates (other than the Companies and their respective Subsidiaries) continue to receive such services from, or use such assets of, such third party after the Closing, which cooperation shall be deemed to include, without limitation, a Company requiring a third party, to the extent it has the power to do so under any such contract, to split such contract into two separate contracts, one with ASC or its Affiliate and the other with such Company.

(b)Prior to and after the Closing Date, ASC shall use its commercially reasonable efforts to cause the third party(ies) to each contract with any of the Companies or any of their respective Subsidiaries which have cross-default or cross-termination provisions referring to one or more contracts between such third party and/or one or more of its Affiliate(s), and ASC and/or one or more of its Affiliates (excluding the Companies and their respective Subsidiaries), to agree to the removal from such contract of the cross-default or cross-termination provisions which relate to such contracts with ASC and/or one or more of its Affiliate(s).  Prior to the Closing Date, ASC, and following the Closing Date, the Buyer, shall use their commercially reasonable efforts to cause the third party(ies) to each contract with ASC and/or one or more of its Affiliates (excluding the Companies or any of their respective Subsidiaries)

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which have cross-default or cross-termination provisions referring to one or more contracts between such third party and/or one or more of its Affiliate(s), and any of the Companies or any of their respective Subsidiaries, to agree to the removal from such contract of the cross-default or cross-termination provisions which relate to such contracts with any of the Companies or any of their respective Subsidiaries.

9.15Patriot Act.  The Sellers and their respective officers and principals shall not transfer the proceeds obtained as a result of this Agreement to any person or entity listed on the Office of Foreign Assets Control list as “Terrorists” and “Specially Designated Nationals and Blocked Persons”, or otherwise be in violation of the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001.

9.16Change in Control Bonuses.  On or prior to the Closing, ASC agrees to pay to the applicable individuals directly, and to indemnify the Purchasers and to assume all obligations of SSRC and SMC with respect to, or relating to, the Change in Control Bonuses payable under the agreements listed in Section 3.15(i)(2) of the Seller Disclosure Letter, provided, however, that SSRC, SMC and the Purchasers shall remain responsible for (and ASC shall not be responsible for) any Severance Payment (as defined in such agreements) which may be due or become due to the applicable individuals under such agreements.

ARTICLE X

SURVIVAL AND INDEMNIFICATION

10.1Survival.  The representations and warranties contained in Articles III and IV hereof and the covenants and agreements of the parties contained herein to be performed on or prior to the Closing shall terminate upon consummation of the Closing; provided, however, that the representations and warranties in Sections 3.1, 3.2, 3.4, 3.9, 3.12, 3.14, 3.15, 3.16, 3.17, 3.19(a)-(c), 3.19(e)-(h), 3.24 and 4.2 and 4.6) shall survive the Closing for a period of one (1) year.  The covenants of the Sellers and the Buyer contained in this Agreement which by their terms require action following the Closing shall survive the Closing.

Notices for claims in respect of an inaccuracy in any of the representations or a breach of any of the warranties which survive the Closing must be received prior to the expiration of the applicable statute of limitations for such representation or warranty for any Indemnifiable Losses arising therefrom to be recoverable hereunder.

10.2Indemnification by Sellers, Jointly and Severally.  Sellers, jointly and severally, shall indemnify and hereby hold harmless Buyer and its nominees, affiliates, officers, directors, employees and agents (the “Buyer Indemnitees”) against any loss or liability, in full as such loss or liability is incurred, suffered as a result of:  (a) any breach of any representation or warranty made by Sellers in this Agreement or in any other document, instrument or agreement entered into in connection herewith (subject to Section 10.1 hereof); (b) any breach of any covenant

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made by Sellers in this Agreement or in any other document, instrument or agreement entered into in connection herewith; (c) any loss or liability incurred by Buyer, any of the Companies or any of their respective Subsidiaries arising out of development obligations (other than obligations related to maintenance or operations) with respect to the Summit Hotel at the SRSC Resort; (d) any loss or liability incurred by Buyer, any of the Companies or any of their respective Subsidiaries arising out of the matter described in paragraph 3 of Section 3.12 of the Seller Disclosure Letter (to the extent in excess of (i) any insurance reimbursement received by a Buyer Indemnitee in connection with such matter and (ii) the portion of any such settlement or award that benefits SRSC by virtue of its ownership interest in the Hotel involved in such matter); and (e) any breach of the Confidentiality Agreement made herein in favor of Buyer; provided that such indemnification obligation shall only arise with respect to losses and liability suffered or incurred as a result of any breach of any representation or warranty (subject to Section 10.1 hereof) to the extent such losses or liability (which, individually, must be at least $25,000.00) in the aggregate exceed $1,000,000.00; provided, however, that the liability of Sellers hereunder, excluding any liability arising pursuant to clause (c) or clause (d) of this Section 10.2, shall not in the aggregate exceed $2,000,000; and, provided, further, that with respect to clause (c) of this Section 10.2, such indemnification obligation shall only arise with respect to losses and liability to the extent exceeding $250,000, but in no event shall the liability of the Sellers with respect thereto exceed $1,000,000 in the aggregate and that, with respect to clause (d) of this Section 10.2, such indemnification obligation shall apply to all such losses and liability.

10.3Indemnification by the Buyer.  Buyer shall indemnify and hereby hold harmless ASC and each of its Subsidiaries and their nominees, affiliates, officers, directors, employees and agents (“Seller Indemnitees”) against any loss or liability, in full as such loss or liability is incurred, suffered as a result of:  (a) any breach of any representation or warranty made by Buyer in this Agreement or in any other document, instrument or agreement entered into in connection herewith (subject to Section 10.1 hereof); (b) any breach of any covenant made by Buyer in this Agreement or in any other document, instrument or agreement entered into in connection herewith; and (c) any breach of the Confidentiality Agreement made herein in favor of ASC; provided that such indemnification obligation shall only arise with respect to losses and liability suffered or incurred as a result of any breach of any representation or warranty (subject to Section 10.1 hereof) to the extent such losses or liability (which, individually, must be at least $25,000.00) in the aggregate exceed $1,000,000.00.

10.4Limitations on Indemnification.

(a)To the extent that a party hereto shall have any obligation to indemnify and hold harmless any other Person hereunder, such obligation shall not include lost profits or other consequential, special, punitive, incidental or indirect damages (and the injured party shall not recover for such amounts), except to the extent such amounts are required to be paid to a third party other than an Indemnified Party or a Person affiliated therewith.

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(b)The amount of any loss, liability, cost or expense for which indemnification is provided under this Article X shall be net of any amounts actually recovered by a Buyer Indemnitee or a Seller Indemnitee, as the case may be, under an insurance policy with respect to such loss, liability, cost or expenses.

(c)Except as provided in Article XI and except for fraud, from and after the Closing, the indemnification obligations set forth in this Article X are the exclusive remedy of the Indemnitees (a) for any inaccuracy in any of the representations or any breach of any of the warranties or covenants contained herein or (b) otherwise with respect to this Agreement, the Company and the transactions contemplated by this Agreement and matters arising out of, relating to or resulting from the subject matter of this Agreement, whether based on statute, contract, tort, property or otherwise, and whether or not arising from the relevant party’s sole, joint or concurrent negligence, strict liability or other fault.

10.5Right to Indemnification not Affected by Knowledge.  The right to indemnification, payment of damages or other remedy based on such representations, warranties, covenants and obligations will not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation.  Without limiting the scope and effect of the immediately preceding and following sentences, Buyer will use its best efforts to give ASC notice when Buyer has actual knowledge that a representation or warranty of ASC is materially inaccurate.  The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, or Buyer’s notice to ASC with respect to the inaccuracy or lack of accuracy of any representation or warranty of ASC will not affect the right to indemnification, payment of damages, or other remedy based on such representations, warranties, covenants and obligations.

10.6Indemnity Escrow.  On the Closing Date, Buyer shall, on behalf of Sellers, pay from the Initial Purchase Price to Title Company, as agent to Buyer and Sellers (the “Escrow Agent”), in immediately available funds, to the account designated by the Escrow Agent (the “Indemnity Escrow Account”), an amount equal to $2,000,000 (the “Indemnity Escrow Amount”), in accordance with the terms of this Agreement and the Escrow Agreement, substantially in the form attached hereto as Exhibit D, which will be executed at the Closing, by and among Buyer, Sellers and the Escrow Agent (the “Escrow Agreement”).  Any payment any Seller is obligated to make to any Buyer Indemnitees pursuant to this Article X shall be paid first, to the extent there are sufficient funds in the Indemnity Escrow Account, by release of funds to the Buyer Indemnitees from the Indemnity Escrow Account by the Escrow Agent within five Business Days after the date notice of any sums due and owing is given to the Sellers (with a copy to the Escrow Agent pursuant to the Escrow Agreement) by the applicable Buyer Indemnitee and shall accordingly reduce the Indemnity Escrow Amount and, second, to the extent the Indemnity Escrow Amount is insufficient to pay any remaining sums due, then the Sellers shall be required to pay all of such additional sums due and owing to the Buyer Indemnitees by wire transfer of immediately available funds within five Business Days after the

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date of such notice.  On the first anniversary of the Closing Date, the Escrow Agent shall release the Indemnity Escrow Amount (to the extent not utilized to pay Buyer for any indemnification claim) to Sellers, except that the Escrow Agent shall retain an amount (up to the total amount then held by the Escrow Agent) equal to the amount of claims for indemnification under this Article X asserted prior to the first anniversary of the Closing Date but not yet resolved (“Unresolved Claims”).  The Indemnity Escrow Amount retained for Unresolved Claims shall be released by the Escrow Agent (to the extent not utilized to pay Buyer for any such claims resolved in favor of Buyer) upon their resolution in accordance with this Article X and the Escrow Agreement.

ARTICLE XI

TAX MATTERS

11.1Tax Indemnification.

(a)Subject to Section 13.3, from and after the Closing Date, ASC (for purposes of this Article XI only, the “Tax Indemnifying Party”), shall be responsible for, shall pay or cause to be paid, and shall indemnify, defend and hold harmless the Buyer and the Companies and reimburse the Buyer and the Companies for the following Taxes, to the extent that such Taxes have not been paid as of the Closing Date:  (i) all Taxes imposed on the Companies or the Buyer as a result of the operations of the Companies with respect to any taxable year or period ending on or before the Closing Date; (ii) with respect to taxable years or periods beginning before the Closing Date and ending after the Closing Date, all Taxes imposed on the Companies or the Buyer as a result of the operations of the Companies, which Taxes are allocable to the portion of such taxable year or period ending on the Closing Date (an “Interim Period”) (Interim Periods and any taxable years or periods that end on or prior to the Closing Date being referred to collectively hereinafter as “Pre-Closing Periods”); (iii) Taxes of any member of any affiliated group of corporations (as defined in Section 1504 of the Code) with which the Companies or any of their respective Subsidiaries files or has filed a Tax Return on a consolidated, combined, affiliated, unitary or similar basis for a taxable year or period beginning before the Closing Date; (iv) Taxes or other costs of the Buyer Indemnitees payable as a result of any inaccuracy in or breach of any representation or warranty made in Section 3.17 of this Agreement or any breach of any covenant contained in this Article XI, without duplication; and (v) any Taxes or other payments required to be made after the Closing Date by the Companies or any of their respective Subsidiaries to any Person under any Tax sharing, indemnity or allocation agreement or other arrangement in effect prior to the Closing (whether or not written) with respect to a Pre-Closing Period.

(b)For purposes of this Section 11.1, in order to apportion appropriately any Taxes relating to any taxable year or period that includes an Interim Period, the parties hereto shall, to the extent permitted under applicable law, elect with the relevant Tax authority to treat for all purposes the Closing Date as the last day of the taxable year or period of the Companies.

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In any case where applicable law does not permit the Companies to treat the Closing Date as the last day of the taxable year or period, then, in each such case, the portion of any Taxes that are allocable to the portion of the Interim Period ending on the Closing Date shall be: (i) in the case of Taxes that are based upon or related to income or receipts, deemed equal to the amount that would be payable if the taxable year or period ended on the Closing Date; and (ii) in the case of Taxes not described in subparagraph (i) above that are imposed on a periodic basis, deemed to be the amount of such Taxes for the entire period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period) multiplied by a fraction the numerator of which is the number of calendar days in the Interim Period ending on the Closing Date and the denominator of which is the number of calendar days in the entire relevant period.

(c)Subject to Section 11.5 and the limitations contained in Section 11.3(b), payment of any amount by the Tax Indemnifying Party under this Section 11.1 shall be made within ten (10) days following written notice by the Buyer or a Company to ASC that a Company is required to pay such amounts to the appropriate Tax authority; provided, however, that the Tax Indemnifying Party shall not be required to make any payment to Buyer or a Company hereunder earlier than five (5) Business Days before it is due to the appropriate Tax authority.

(d)All matters relating in any manner to Tax indemnification obligations and payments shall be governed exclusively by this Article XI except for provisions regarding notice of claims, which shall be governed by Section 10.5.

11.2Tax Refunds.  The Buyer shall pay to ASC all refunds or credits of Taxes received by Buyer or any Company or any of their respective Subsidiaries after the Closing Date and attributable to Taxes paid by any Company or their Subsidiaries (or any predecessor of any Company or their Subsidiaries) with respect to a Pre-Closing Period, net of any Taxes imposed on such refund amount, and adjusted to reflect any Tax benefit received by the Buyer or any Company in connection with the accrual or payment of amounts pursuant to this Section 11.2.

11.3Preparation and Filing of Tax Returns and Payment of Taxes.

(a)ASC shall be responsible for the preparation and filing of (i) all income Tax Returns with respect to the Companies and their respective Subsidiaries for any Tax period ending on or prior to the Closing Date and (ii) all non-income Tax Returns with respect to the Companies and their respective Subsidiaries for any Tax period ending on or prior to the Closing Date, but only to the extent such Tax Returns are required to be filed on or prior to the Closing Date.  All such Tax Returns shall be prepared and filed in a manner that is consistent, in all material respects, with the prior practice of the Companies and their respective Subsidiaries (including, without limitation, prior Tax elections and accounting methods or conventions made or utilized by the Companies and their respective Subsidiaries), except as required by a change in the applicable Law or regulations.

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(b)The Buyer shall prepare and timely file or cause the Companies or their respective Subsidiaries to prepare and timely file all Tax Returns required to be filed after the Closing Date other than Tax Returns described as the responsibility of ASC in Section 11.3(a).  All such Tax Returns with respect to Pre-Closing Periods shall be prepared and filed in a manner that is consistent, in all material respects, with the prior practice of the Companies or their respective Subsidiaries (including prior Tax elections and accounting methods or conventions made or utilized by the Companies or their respective Subsidiaries), except as required by a change in the applicable Law or regulations.  The Buyer shall deliver all such Tax Returns with respect to Pre-Closing Periods to ASC for ASC’s review at least forty-five (45) days prior to the due date (including extensions) of any such Tax Return.  If ASC disputes any item on such Tax Return, it shall notify the Buyer of such disputed item (or items) and the basis for its objection.  The parties shall act in good faith to resolve any such dispute prior to the date on which the Tax Return is required to be filed.  If the parties cannot resolve any disputed item, the item in question shall be resolved by an independent accounting firm mutually acceptable to ASC and the Buyer.  The fees and expenses of such accounting firm shall be borne equally by ASC and the Buyer.

(c)ASC shall deliver to Buyer for its review any sales use, real property, transfer or other non-income Tax Returns of the Companies that are to be filed on or prior to the Closing Date at least 45 days prior to the due date (including extensions) of any such Tax Return or within 15 days after the date hereof , whichever is later, provided that any such Tax Return that is due within 15 days after the date hereof shall be delivered to Buyer as soon as reasonably practicable, but in any event prior to the due date (including extensions) of such Tax Return.  If the Buyer disputes any item on a Tax Return delivered pursuant to the preceding sentence, it shall notify ASC of such disputed item (or items) and the basis for its objection.  The parties shall act in good faith to resolve any such dispute prior to the date on which the Tax Return is required to be filed.  If the parties cannot resolve any disputed item, the item in question shall be resolved by an independent accounting firm mutually acceptable to ASC and the Buyer.  The fees and expenses of such accounting firm shall be borne equally by ASC and the Buyer.  Notwithstanding the foregoing, nothing in this Section 11.3(c) shall prevent ASC or the Companies from timely filing any Tax Returns that are due (including extensions) on or prior to the Closing Date.

11.4Tax Cooperation.

(a)For a period of seven years from and after the Closing, ASC and the Buyer agree to furnish or cause to be furnished to each other, upon request, as promptly as practicable, such information (including access to books and records), and assistance relating to the Companies and their respective Subsidiaries as is reasonably requested for the filing of any Tax Returns, for the preparation of any audit, and for the prosecution or defense of any claim, suit or proceeding related to any proposed adjustment.  Any information obtained under this Section 11.4(a) shall be kept confidential, except as may be otherwise necessary in connection with the filing of Tax Returns or claims for refund or in conducting an audit or other proceeding.  After the expiration of such seven-year period, the Buyer or ASC, as the case may be, may dispose of

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such information, books and records, provided that prior to such disposition, (i) ASC shall give the Buyer the opportunity, at Buyer’s expense, to take possession of such information, books and records held by ASC; and (ii) the Buyer shall give ASC the opportunity, at ASC’s expense, to take possession of such information, books and records held by the Companies and their respective Subsidiaries.

(b)The Buyer agrees that with respect to Pre-Closing Periods, it shall not, on or after the Closing Date, without the prior written consent of ASC, amend any Tax Return (except as required by Law), or waive or extend any statute of limitations with respect to any such Tax Return to the extent such amendment or waiver would increase the Taxes of any Company or its Subsidiaries for any Pre-Closing Period.  ASC agrees that, with respect to Pre-Closing Periods, it shall not, on or after the date hereof, without the prior written consent of Buyer, amend any Tax Return (except as required by Law) of any Company or its Subsidiaries or the consolidated group of corporations of which any Company or any Subsidiary is a member, or waive or extend the statute of limitations with respect to any such Tax Return, to the extent such amendment or waiver would increase the Taxes of any Company, their Subsidiaries, or Buyer in a taxable period (or portion thereof) beginning on or after the Closing Date.

11.5Tax Audits.

(a)After the Closing, the Buyer shall notify ASC in writing (a “Tax Notice”) of any demand or claim received by the Buyer or any Company from any Tax authority or any other party with respect to Taxes for which the Tax Indemnifying Party is liable pursuant to Section 11.1 within ten (10) days of the receipt of such demand or claim by the Buyer or any Company; provided, however, that a failure to give such Tax Notice will not affect the rights of the Buyer or any Company to indemnification under Section 11.1 unless, or except to the extent that such failure precludes the Tax Indemnifying Parties from contesting such demand or claim.  Such Tax Notice shall contain factual information (to the extent known) describing the asserted Tax liability in reasonable detail and shall include copies of any notice or other document received from any Tax authority in respect of any such asserted Tax liability.

(b)Subject to the following sentence, ASC may elect to control the conduct, through counsel chosen by ASC and reasonably acceptable to the Buyer and at ASC’s own expense, of any audit, claim for refund, or administrative or judicial proceeding involving any asserted liability with respect to which indemnity may be sought under Section 11.1, including any contest in respect of an Interim Period (any such audit, claim for refund, or proceeding relating to an asserted Tax liability is referred to herein as a “Contest”).  If ASC elects to control a Contest, ASC shall within thirty (30) calendar days of receipt of the Tax Notice notify the Buyer in writing of its intent to do so; provided, however, that the Buyer and the Companies are authorized to file any motion, answer or other pleading that may be reasonably necessary or appropriate to protect their interests during such 30 day period.  If ASC properly elects to control a Contest, then ASC shall have all rights to settle, compromise and/or concede such asserted liability and the Buyer shall cooperate and shall cause the Companies (and any of their

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successors) to cooperate in each phase of such Contest.  If ASC does not elect to control the Contest, the Buyer or the Companies may, without affecting its or any other indemnified party’s rights to indemnification under this Article XI, assume and control the defense of such Contest with participation by the Sellers.

(c)In the event that a Contest involves an Interim Period (a “Straddle Contest”), the parties shall endeavor to cause the Contest proceeding to be separated into two or more separate proceedings, one of which shall involve exclusively the applicable Interim Period.  In the event that such separation cannot, after diligent efforts, be achieved, the Buyer and ASC shall jointly control the Straddle Contest; provided, however, that, subject to this Section 11.5 generally, the Buyer shall have all rights to make decisions, settle, compromise and/or concede such asserted liability as relates to the portion of the taxable period that begins after the Closing Date, and ASC shall have all rights to settle, compromise and/or concede such asserted liability as relates to the Interim Period.

(d)With respect to a Contest that is described in paragraphs (b) and (c) of this Section, and which relates to a method of accounting, a recurring item of income, gain, loss, deduction or credit.  Taxes other than income Taxes, franchise Taxes, and Transfer and Recording Taxes, ASC’s ability to settle, compromise and/or concede any asserted liability shall be subject to the Buyer’s consent, not to be unreasonably withheld, conditioned or delayed, if ASC’s proposed settlement, compromise or concession would adversely affect such Tax liability of a Company in a Post-Closing period; provided, however, if the Buyer does not provide ASC with such consent, and ASC shall pay to the Buyer the amount that ASC was willing to pay the Taxing authority to settle the asserted Tax liability, ASC shall be released by the Buyer from all indemnification obligations thereto pursuant to Section 11.1 and the Buyer shall assume control over the conduct of such Contest and shall have all rights if such Contest does not involve any issues for which ASC remains liable under this Article XI to make decisions, settle, compromise, and/or concede such asserted liability.

(e)Notwithstanding anything contained in this Section 11.5 to the contrary, none of the Buyer or the Companies shall be required to permit ASC to contest any claim; provided, however, that the Tax Indemnifying Parties shall have no obligation to pay, indemnify or reimburse the Buyer or the Companies for any amounts that the Buyer or the Companies pay without the prior approval of ASC (which may not be unreasonably withheld or delayed if the related indemnification obligation does not have a material economic impact on ASC or the Indemnifying Parties) with respect to a claim ASC timely elects to contest but is not permitted to contest under this Section 11.5(e).

(f)Notwithstanding anything contained in this Section 11.5 to the contrary, ASC shall not, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, contained or delayed), settle, compromise or concede any asserted liability unless ASC has (i) paid or otherwise satisfied the asserted liability on or prior to the date of such settlement, compromise or concession, or (ii) obtained, as an unconditional term of such

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settlement, compromise or concession, an unconditional release, issued by the applicable taxing authority in favor of the Companies, for all responsibility in respect of the asserted liability.

11.6Tax Treatment of Indemnification Payment.  The parties agree to treat any indemnity payment made under this Agreement as an adjustment to the Purchase Price for all Tax purposes.

11.7338(h)(10) Election.

(a)Section 338(h)(10) Election; Allocation of “Adjusted Grossed-Up Basis.”  ASC and the Buyer shall elect under Section 338(h)(10) of the Code to treat the sale of the Stock as a sale by the Companies and their respective Subsidiaries of all of their respective assets (the “Section 338(h)(10) Election”) and shall make any such available election under any substantially similar state or local law.  The making of the Section 338(h)(10) Election shall not increase the Purchase Price.  Subject to Section 13.3, ASC shall pay any Tax associated with the Section 338(h)(10) Election and any analogous election made under state or local law.  Each party shall take such actions as the other parties deem necessary to effect the Section 338(h)(10) Election (including, without limitation, the timely filing of Internal Revenue Service Form 8023 (Corporate Qualified Stock Purchase Elections)).

(b)Allocation.  On or before the date that is 30 days after the Closing Date, the Buyer shall provide to ASC a proposed allocation of the Purchase Price for the deemed sale of assets resulting from the making of the Section 338(h)(10) Election, setting forth the estimated fair market values of the assets of each Company and each of their respective Subsidiaries.  On or before the date that is 60 days after the Closing Date, ASC and the Buyer shall cooperate in developing and agree upon a final allocation of such Purchase Price (the “Final Allocation”).  ASC and the Buyer shall cooperate in developing the Final Allocation.

(c)Forms.  On or before the date that is ten days before the Closing Date, ASC shall provide to the Buyer drafts of all forms, together with all drafts of required attachments thereto, other than allocation of the Purchase Price, required for making the Section 338(h)(10) Election and any such available election under any substantially similar state or local law if requested by the Buyer (the “Election Forms”).  On the Closing Date, ASC shall deliver to the Buyer the Election Forms, properly executed by ASC.  ASC and the Buyer shall cooperate in drafting and making final the Election Forms.  If the parties have not reached agreement with respect to the allocation schedule, then the dispute shall be presented to an independent accounting firm mutually agreed upon by the Buyer and ASC, whose determination shall be binding on both parties.  The fees and expenses of such accounting firm shall be paid one-half by the Buyer and one-half by ASC.  ASC shall be responsible for filing the Election Forms with the proper taxing authorities, provided that the Buyer shall be responsible for filing any Election Form that must be filed with its Tax Returns.

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(d)Modification; Revocation.  The Buyer and ASC each agree that it shall not, and shall not permit any of its respective Affiliates to, take any action to modify the Election Forms following the execution thereof, or to modify or revoke the Section 338(h)(10) Election, or any such available election under any substantially similar state or local law, following the filing of the Election Forms, without the written consent of the Buyer or ASC, as the case may be.

(e)Consistent Treatment.  The Buyer and ASC shall, and shall cause their respective Affiliates to, file all Tax Returns in a manner consistent with the information contained in the Election Forms as filed and the Final Allocation, unless otherwise required because of a change in applicable tax law.

(f)Expenses Resulting from Section 338(h)(10) Elections.  The Buyer and its Affiliates, on the one hand, and ASC and its Affiliates, on the other hand, shall bear their respective administrative, legal and similar expenses resulting from the making of the Section 338(h)(10) Election and any such available elections under any substantially similar state or local law.

11.8Tax Sharing Agreements.  Any Tax sharing agreements or arrangements to which any Company or any of its Subsidiaries is a party or may have any liability or obligation shall be terminated effective as of the Closing.  After the Closing, this Agreement shall be the sole Tax sharing agreement relating to any Company or any Subsidiary for all Pre-Closing Tax Periods.

11.9Survival of Obligations.  Notwithstanding any other provision of this Agreement, the obligations of the parties set forth in this Article XI shall remain in effect until the expiration of the applicable statutes of limitations (including valid extensions thereof).

ARTICLE XII

TERMINATION

12.1Termination.  This Agreement may be terminated at any time prior to the Closing:

(a)by the written mutual consent of the parties hereto;

(b)upon written notice by (i) any party hereto, if any court of competent jurisdiction or any other Governmental Agency shall have issued a Judgment or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and (ii) such Judgment or other action shall have become final and nonappealable;

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(c)upon written notice at any time on or after July 31, 2007 (the “Termination Date”), by the Sellers, on the one hand, or the Buyer, on the other hand, if the Closing has not occurred by such date; provided, however, that (i) if any of the Sellers is seeking termination, then none of the Sellers is in breach in any material respect of their respective representations, warranties, covenants or agreements contained in this Agreement or (ii) if Buyer is seeking termination, then Buyer is not in breach in any material respect of any of its representations, warranties, covenants or agreements contained in this Agreement; and provided further, however, that the Sellers may elect to extend the date of the Termination Date by up to 60 additional days if the condition set forth in Section 7.4(a) shall have not been satisfied and the parties shall have received a “second request” or the equivalent from the applicable Governmental Authorities under the HSR Act; and

(d)upon written notice by the Sellers, on the one hand, or by the Buyer, on the other hand, to the other party if the other party (being any of the Sellers or the Buyer) is in material breach of any of its representations, warranties, covenants or agreements hereunder (which breach continues unremedied by such party for thirty (30) days after written notice thereof to such party); provided, however, that if such other party is Buyer, it shall not be entitled to such 30-day period if it is in default of its obligation to pay the Purchase Price to the Sellers on the Closing Date as provided herein; and provided, further, that (i) if any Seller is seeking termination, then no Seller is then in breach in any material respect of its respective representations, warranties, covenants or agreements contained in this Agreement or (ii) if Buyer is seeking termination, then Buyer is not then in breach in any material respect of any of its representations, warranties, covenants or agreements contained in this Agreement.

12.2Other Agreements; Material To Be Returned.

(a)In the event that this Agreement is terminated pursuant to Section 12.1, the transactions contemplated by this Agreement and the Related Documents shall be terminated, without further action by any party hereto, and the Sellers on the one hand and the Buyer on the other hand shall immediately enter into, or cause their relevant Affiliates to enter into, written consents to terminate each of the Related Documents that have become effective prior to the date of such termination.

(b)Furthermore, in the event that this Agreement is terminated pursuant to Section 12.1:

(i)The Buyer shall return to Sellers or destroy all documents and other material received from the Sellers, their Affiliates or any of their respective Representatives relating to the Resorts or the transactions contemplated by this Agreement and the Related Documents, whether obtained before or after the execution of this Agreement; and

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(ii)The Buyer agrees that all confidential information received by the Buyer or their Affiliates or its Representatives with respect to either of the Sellers, the Companies, the Resorts or this Agreement or any of the Related Documents or the transactions contemplated hereby or thereby shall be treated in accordance with the Confidentiality Agreement, which shall remain in full force and effect notwithstanding the termination of this Agreement, in accordance with Section 9.7.

12.3Effect of Termination.  In the event that this Agreement shall be terminated pursuant to Section 12.1 hereof, all obligations of the parties hereto under this Agreement shall terminate and become void and of no further effect and there shall be no liability of any party hereto to any other party except (a) for the obligations with respect to confidentiality and publicity contained in Section 9.7 hereof, (b) as set forth in Section 13.3 in respect of certain fees and expenses, (c) the obligations with respect to brokers contained in Sections 3.16 and 4.6 and (d) this Article XII; provided, however, that no party hereto shall be relieved from liabilities arising out of any willful breach of its representations and warranties, or for any breach of its covenants or other agreements contained in this Agreement.

ARTICLE XIII

MISCELLANEOUS

13.1Complete Agreement.  This Agreement, the Related Documents (if any) and the Schedules and Exhibits attached hereto and thereto and the documents referred to herein (including the Confidentiality Agreement referred to in Section 9.7) and therein shall constitute the entire agreement between the parties hereto with respect to the subject matter hereof and thereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter.

13.2Waiver, Discharge, etc.  This Agreement may not be released, discharged, abandoned, waived, changed or modified in any manner, except by an instrument in writing signed on behalf of each of the parties hereto by their duly authorized representatives.  The failure of any party hereto to enforce at any time any of the provisions of this Agreement shall in no way be construed to be a waiver of any such provision, nor in any way be construed to affect the validity of this Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision.  No waiver of any breach of this Agreement shall be held to be a waiver of any other or subsequent breach.

13.3Fees and Expenses.  Except as otherwise expressly provided in this Agreement, ASC shall pay all of the fees and expenses incurred by the Sellers and the Buyer shall pay all of the fees and expenses incurred by it, in connection with this Agreement, the Related Documents and the transactions contemplated hereby and thereby.  Notwithstanding the foregoing, the Buyer, shall be responsible for the payment of (i) all real estate transfer taxes and sales taxes payable as a result of the consummation of the transaction contemplated hereby, and (ii) the HSR Act filing fee.

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13.4Amendments.  No amendment to this Agreement shall be effective unless it shall be in writing signed by each party hereto.  Each of the parties hereto agree that no amendment to any Related Document shall be effective unless it shall have been approved in writing by each of the parties hereto.

13.5Notices.  All notices, requests, consents and demands to or upon the respective parties hereto shall be in writing, and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made (a) if delivered by hand (including by overnight courier), when delivered, (b) on the day after delivery to a nationally recognized overnight carrier service if sent by overnight delivery for next morning delivery, and (c) in the case of facsimile transmission, upon receipt of a legible copy.  In each case:  (x) if delivery is not made during normal business hours at the place of receipt, receipt and due notice under this Agreement shall be deemed to have been made on the immediately following Business Day, and (y) notice shall be sent to the address of the party to be notified, as follows, or to such other address as may be hereafter designated by the respective parties hereto in accordance with these notice provisions:

If to the Buyer, to:
	Roland Andreasson
	Chief Financial Officer
	Boyne USA, Inc.
	P.O. Box 19
	Boyne Falls, MI 49713
With a copy to:
	Ross Agre, Esq.
	P.O. Box 2304
	Edwards, CO 81632
If to the Sellers, to:
	c/o American Skiing Company
	One Monument Way
	Portland, ME 04101
	Attention:	Foster A. Stewart, Jr., Esq.
		General Counsel
	Facsimile:	(207) 791-2607

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and a copy to:
	Pierce Atwood LLP
	One Monument Square
	Portland, ME 04101
	Attention:	David J. Champoux, Esq.
	Facsimile:	(207) 791-1350

13.6Venue.  Any legal suit, action or proceeding arising out of or relating to this Agreement may be instituted in any federal or state court in Cumberland County, Maine and each party hereto waives any objection which it may now have or hereafter have to the laying of venue of any such suit, action or proceeding in Cumberland County, Maine and each party hereto hereby irrevocably submits to the jurisdiction of any such court in Cumberland County, Maine in any action, suit or proceeding.

13.7GOVERNING LAW; WAIVER OF JURY TRIAL.

(A)THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MAINE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF.

(B)EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING BETWEEN THE PARTIES TO THIS AGREEMENT ARISING OUT OF OR RELATING TO THIS AGREEMENT.

13.8Headings.  The descriptive headings of the several Articles and Sections of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

13.9Interpretation.  All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.  All terms defined in this Agreement in one form have correlative meanings when used herein in any other form.  Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein shall have the meaning as defined in this Agreement.  When a reference is made in this Agreement to a Section, Article, Exhibit or Schedule, such reference shall be to a Section or Article of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated.  For all purposes hereof, the terms “include”, “includes” and “including” shall be deemed to be followed by the words “without limitation”.

13.10Exhibits and Schedules.  The Exhibits and Schedules are a part of this Agreement as if fully set forth herein.

13.11Successors.  This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted

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assigns.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto except with the prior written consent of the other parties or by operation of law; provided, however, that Buyer may assign any or all of its rights or delegate any or all of its duties under this Agreement to any Affiliate without the prior written consent of Sellers; provided further, however, that the Buyer shall remain liable for its obligations and duties under this Agreement notwithstanding any such assignment.

13.12Remedies.

Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party shall be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy shall not preclude the exercise of any other remedy.  The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, without proof of actual damages, this being in addition to any other remedy to which the parties are entitled at law or in equity.

13.13Third Parties.  Except as provided in Article V and Sections 10.2 and 10.3, nothing herein expressed or implied is intended or shall be construed to confer upon or give any Person, other than the parties hereto and their successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

13.14Severability.  If any provision of this Agreement shall be declared by any court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, the other provisions shall not be affected by such invalidity, illegality or unenforceability, but shall remain in full force and effect.

13.15Counterparts; Effectiveness.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same instrument and each of which shall be deemed an original.  This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

13.16NO OTHER REPRESENTATIONS.  EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF THE SELLERS SPECIFICALLY CONTAINED IN ARTICLE III OR A WRITING DELIVERED BY A SELLER PURSUANT TO THE TERMS OF THIS AGREEMENT, NONE OF SELLERS, THE COMPANIES OR ANY OTHER PERSON MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY OR THE CONDITION (FINANCIAL OR OTHERWISE) OF, OR ANY OTHER MATTER INVOLVING, THE COMPANIES, THE RESORTS OR SELLERS.  IN ADDITION, EXCEPT AS SPECIFICALLY PROVIDED IN ARTICLE III, NONE OF SELLERS, THE COMPANIES OR ANY OTHER PERSON MAKES ANY REPRESENTATION OR

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WARRANTY WITH RESPECT TO ANY INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE TO THE BUYER, INCLUDING IN ANY “DATA ROOMS,” IN CONNECTION WITH ANY MANAGEMENT PRESENTATIONS, OR IN CONNECTION WITH ANY OTHER MATTER (INCLUDING, WITHOUT LIMITATION, THE PROVISION OF ANY BUSINESS OR FINANCIAL ESTIMATES AND PROJECTIONS AND OTHER FORECASTS AND PLANS (INCLUDING THE REASONABLENESS OF THE ASSUMPTIONS UNDERLYING SUCH ESTIMATES, PROJECTIONS OR FORECASTS)).

13.17CONDITION OF THE BUSINESS.  EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE III OR A WRITING DELIVERED BY A SELLER PURSUANT TO THE TERMS OF THIS AGREEMENT AND WITHOUT LIMITING THE PROVISIONS OF SECTION 13.16, THE COMPANIES ARE BEING SOLD WITH THEIR ASSETS AND THE RESORTS IN THEIR “AS IS” CONDITION, AND NONE OF SELLERS, THE COMPANIES OR ANY OTHER PERSON MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, WHATSOEVER, EXPRESS OR IMPLIED, RELATING TO SUCH ASSETS, THE RESORTS, OR THE COMPANIES, INCLUDING ANY REPRESENTATION OR WARRANTY (A) AS TO THE FUTURE SALES OR PROFITABILITY OF THE BUSINESS AS IT WILL BE CONDUCTED BY THE BUYER OR (B) ARISING BY STATUTE OR OTHERWISE IN LAW, FROM A COURSE OF DEALING OR USAGE OF TRADE.  ALL SUCH OTHER REPRESENTATIONS AND WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED BY THE SELLERS.

13.18NO OTHER REPRESENTATIONS.  EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF THE BUYER SPECIFICALLY CONTAINED IN ARTICLE IV, NEITHER THE BUYER NOR ANY OTHER PERSON MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO EITHER THE TRANSACTIONS CONTEMPLATED HEREBY OR THE CONDITION (FINANCIAL OR OTHERWISE) OF, OR ANY OTHER MATTER INVOLVING, THE BUYER.  IN ADDITION, EXCEPT AS SPECIFICALLY PROVIDED IN ARTICLE IV, NEITHER THE BUYER NOR ANY OTHER PERSON MAKES ANY REPRESENTATION OR WARRANTY WITH RESPECT TO ANY INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE TO THE SELLERS.

13.19INDEPENDENT INVESTIGATION.  BUYER HEREBY ACKNOWLEDGES AND AFFIRMS THAT IT HAS CONDUCTED AND COMPLETED ITS OWN INVESTIGATION, ANALYSIS AND EVALUATION OF THE COMPANIES, THEIR RESPECTIVE ASSETS AND THE RESORTS, THAT IT HAS MADE ALL SUCH REVIEWS AND INSPECTIONS OF THE RESULTS OF OPERATIONS, CONDITION (FINANCIAL AND OTHERWISE) AND PROSPECTS OF SUCH ASSETS, THE RESORTS AND THE COMPANIES AS IT HAS DEEMED NECESSARY OR APPROPRIATE, AND THAT IN MAKING ITS DECISION TO ENTER INTO THIS AGREEMENT AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY IT HAS RELIED SOLELY ON (A) ITS OWN INVESTIGATION, ANALYSIS AND EVALUATION OF THE RESORTS AND (B) THE REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLERS CONTAINED IN THIS AGREEMENT.

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by its duly authorized representatives as of the day and year first above written.

SUNDAY RIVER SKIWAY CORPORATION
By:	/s/ Foster A. Stewart, Jr.
	Name: Foster A. Stewart, Jr.
	Title: Senior Vice President
SUGARLOAF MOUNTAIN CORPORATION
By:	/s/ Foster A. Stewart, Jr.
	Name:  Foster A. Stewart, Jr.
	Title:  Senior Vice President
S-K-I LTD.
By:	/s/ Foster A. Stewart, Jr.
	Name:  Foster A. Stewart, Jr
	Title:  Senior Vice President
AMERICAN SKIING COMPANY
By:	/s/ Foster A. Stewart, Jr.
	Name:  Foster A. Stewart, Jr
	Title:  Senior Vice President
BOYNE USA, INC.
By:	/s/ Stephen Kircher
	Name:  Stephen Kircher
	Title:  President – Boyne Eastern Operations

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, William J. Fair, certify that:

1.I have reviewed this quarterly report on Form 10-Q of American Skiing Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 13, 2007
	By: /s/ William J. Fair
	William J. Fair
	President and Chief Executive Officer
	(Principal Executive Officer)

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EX-31.2

Exhibit 31.2

CERTIFICATION

I, Helen E. Wallace, certify that:

1.I have reviewed this quarterly report on Form 10-Q of American Skiing Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 13, 2007
	By: /s/ Helen E. Wallace
	Helen E. Wallace
	Senior Vice President, Chief Financial Officer
	(Principal Financial Officer)

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EX-32.1

Exhibit 32.1

AMERICAN SKIING COMPANY

SARBANES-OXLEY ACT SECTION 906 CERTIFICATIONS

In connection with the Quarterly Report of American Skiing Company (the “Company”) on Form 10-Q for the period ended April 29, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William J. Fair, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 13, 2007
	By:  /s/ William J. Fair
	William J. Fair
	President and Chief Executive Officer
	(Principal Executive Officer)

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EX-32.2

Exhibit 32.2

AMERICAN SKIING COMPANY

SARBANES-OXLEY ACT SECTION 906 CERTIFICATIONS

In connection with the Quarterly Report of American Skiing Company (the “Company”) on Form 10-Q for the period ended April 29, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Helen E. Wallace, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 13, 2007
	By:/s/ Helen E. Wallace
	Helen E. Wallace
	Senior Vice President, Chief Financial Officer
	(Principal Financial Officer)

1