SITE DEVELOPMENT MORTGAGE NOTE

M&T Bank

Manufacturers and Traders Trust Company

SITE DEVELOPMENT MORTGAGE NOTE

(Construction Loan)

Pennsylvania

August 20, 2004

$864,820.00

BORROWER:

Big Boulder Corporation

a(n) (   ) individual(s) (   ) partnership ( x ) corporation (   ) trust (   ) limited liability company (   )

organized under the laws of Pennsylvania

Address of residence/chief executive office: Route 940 and Moseywood Road, P.O. Box 707, Blakeslee, Pennsylvania 18610-0747.

LENDER: Manufacturers and Traders Trust Company, a New York banking company, with offices located at One Fountain Plaza, Buffalo, New York 14203. Attn: M&T Real Estate, Inc.

Definitions. Each capitalized term shall have the meaning specified herein and the following terms shall have the indicated meanings:

a.

"Loan Agreement" shall mean the agreement between, inter alia, Borrower and the Lender dated on or about the date hereof in connection with the construction and mortgage financing of real property described in the Mortgage, as the same may be amended, modified or replaced from time to time.

b.

"Maturity Date" is August 1, 2006.

c.

"Mortgage" shall mean the mortgage dated on or about the date of this Note executed by Borrower as the same may be amended, modified or replaced from time to time.

e.

"Principal Sum" shall mean Eight Hundred Sixty-Four Thousand Eight Hundred Twenty Dollars ($864,820.00).

Promise to Pay. For value received, and intending to be legally bound, the undersigned Borrower promises to pay to the order of the Lender at its office identified above in lawful money of the United States and in immediately available funds, the Principal Sum or so much thereof as may be advanced, plus interest on the unpaid portion of the Principal Sum, and all Expenses (defined below). Advances under this Note shall be made pursuant to the terms and conditions of the Loan Agreement

Interest. All outstanding amounts of the Principal Sum advanced to Borrower under this Note shall accrue interest at a per annum rate equal to:

(   )

%

( x )

equal to the rate in effect as the rate announced by the Lender as its prime rate of interest on the first day of the calendar month containing such day. The Prime Rate may be greater or less than other interest rates charged by the Bank to other borrowers and is not solely based upon or dependent upon the interest rate which the Bank may charge any particular borrower or class of borrowers.

(   )

percentage points above LIBOR for a (   ) one month interest period, (   ) two month interest period, (   ) three month interest period or (   ) six month interest period ("LIBOR Rate"). If no interest period is specified, a one month period shall be used. The definition of LIBOR, adjustments to the LIBOR Rate and other provisions relative thereto are contained on Rider B attached hereto and made a part of this Note by reference.

(   )

See Rider A attached hereto and made a part of this Note by reference.

If no rate is specified, interest shall accrue at the Maximum Legal Rate defined below, fixed as of the date of disbursement. Interest will be calculated on the basis of a 360-day year consisting of twelve (12) months with the actual number of days of each month (28, 29, 30 or 31).

Maximum Legal Rate. It is the intent of the Lender and Borrower that in no event shall such interest be payable at a rate in excess of the maximum rate permitted by applicable law (the "Maximum Legal Rate"). Solely to the extent necessary to prevent interest under this Note from exceeding the Maximum Legal Rate, any amount that would be treated as excessive under a final judicial interpretation of applicable law shall be deemed to have been a mistake and automatically canceled and if received by the Lender shall be refunded to Borrower.

Default Rate. After maturity (whether due to the Maturity Date, by acceleration or otherwise), the interest rate on the unpaid Principal Sum shall be increased to 3 percentage points per year above the otherwise applicable rate per year (the "Default Rate"). Any judgment entered hereon or otherwise in connection with any suit to collect amounts due hereunder shall bear interest at such Default Rate. No failure to impose or delay in imposing the Default Rate shall be construed as a waiver by the Lender of its right to collect, and Borrower's obligation to pay, interest at the Default Rate effective as of the date of maturity (whether due to the Maturity Date, by acceleration or otherwise).

Repayment of Principal and Interest. Borrower shall pay the Principal Sum and interest owing pursuant to this Note to the Lender in installments as follows:

(1.)

Borrower shall pay accrued interest to Lender on the first day of September, 2004 and on the first day of each subsequent month thereafter to, but not including, the Maturity Date; and

(2.)

On the Maturity Date, Borrower shall pay the outstanding Principal Sum and all accrued and unpaid interest, premiums, Expenses and all other amounts owing pursuant to this Note, the Loan Agreement and the Mortgage and remaining unpaid. In addition, the Borrower shall make additional principal payments as set forth in the Loan Agreement.

Late Charge. If Borrower fails to pay the whole or any installment of principal or interest owing pursuant to this Note, the Mortgage or the Loan Agreement including any Escrow payment owing pursuant to the Mortgage or the Loan Agreement within ten (10) days of its due date, Borrower shall immediately pay to the Lender a late charge equal to six percent (6%) of the delinquent amount.

Application of Payments. Payment made with respect to this Note may be applied in any order in the sole discretion of the Lender, but prior to an Event of Default or maturity, each payment shall be shall be applied first to accrued and unpaid interest, next