EXHIBIT 10.20

SECOND AMENDED AND RESTATED

CREDIT AGREEMENT

Dated as of November 13, 2001

among

THE VAIL CORPORATION

(d/b/a "Vail Associates, Inc.")

Borrower

BANK OF AMERICA, N.A.

Agent

and

THE OTHER LENDERS PARTY HERETO

BANC OF AMERICA SECURITIES LLC

Sole Lead Arranger, Sole Book Manager and Syndication Agent

FLEET NATIONAL BANK

Syndication Agent

U.S. BANK NATIONAL ASSOCIATION

Documentation Agent

BANKERS TRUST COMPANY

Documentation Agent

$421,000,000

TABLE OF CONTENTS

 

Page

SECTION 1 DEFINITIONS AND TERMS

1

1.1 Definitions

1

1.2 Number and Gender of Words

17

1.3 Accounting Principles

17

SECTION 2 COMMITMENT

17

2.1 Credit Facility

17

2.2 Loan Procedure

17

2.3 L/C Subfacility

18

SECTION 3 TERMS OF PAYMENT

21

3.1 Notes and Payments

21

3.2 Interest and Principal Payments; Voluntary Commitment Reductions

21

3.3 Interest Options

22

3.4 Quotation of Rates

22

3.5 Default Rate

22

3.6 Interest Recapture

22

3.7 Interest Calculations

22

3.8 Maximum Rate

23

3.9 Interest Periods

23

3.10 Conversions

23

3.11 Order of Application

23

3.12 Sharing of Payments, Etc.

24

3.13 Booking Loans

24

3.14 Basis Unavailable or Inadequate for LIBOR

24

3.15 Additional Costs

24

3.16 Change in Laws

25

3.17 Funding Loss

25

3.18 Foreign Lenders

26

3.19 Affected Lender's Obligation to Mitigate

26

3.20 Replacement Lender

26

SECTION 4 FEES

26

4.1 Treatment of Fees

26

4.2 Fee Letter

27

4.3 L/C Fees

27

4.4 Commitment Fee

27

SECTION 5 GUARANTY AND SECURITY

27

5.1 Guaranty

27

5.2 Collateral

27

5.3 Additional Collateral and Guaranties

28

5.4 Additional Documents or Information

28

 

 

Page

SECTION 6 CONDITIONS PRECEDENT

28

6.1 Initial Advance

28

6.2 Each Advance

29

SECTION 7 REPRESENTATIONS AND WARRANTIES

29

7.1 Regulation U

29

7.2 Corporate Existence, Good Standing, Authority and Compliance

29

7.3 Subsidiaries

29

7.4 Authorization and Contravention

30

7.5 Binding Effect

30

7.6 Financial Statements; Fiscal Year

30

7.7 Litigation

30

7.8 Taxes

30

7.9 Environmental Matters

30

7.10 Employee Plans

31

7.11 Properties and Liens

31

7.12 Government Regulations

31

7.13 Transactions with Affiliates

31

7.14 Debt

31

7.15 Material Agreements

32

7.16 Labor Matters

32

7.17 Solvency

32

7.18 Intellectual Property

32

7.19 Full Disclosure

32

SECTION 8 AFFIRMATIVE COVENANTS

32

8.1 Items to be Furnished

32

8.2 Use of Proceeds

34

8.3 Books and Records

34

8.4 Inspections

34

8.5 Taxes

34

8.6 Payment of Obligations

34

8.7 Fees and Expenses

34

8.8 Maintenance of Existence, Assets, and Business

35

8.9 Insurance

35

8.10 Environmental Laws

35

8.11 Subsidiaries

35

8.12 Indemnification

36

SECTION 9 NEGATIVE COVENANTS

36

9.1 Taxes

36

9.2 Payment of Obligations

36

9.3 Employee Plans

36

9.4 Debt

36

9.5 Liens

36

9.6 Transactions with Affiliates

37

 

 

Page

9.7 Compliance with Laws and Documents

37

9.8 Loans, Advances and Investments

37

9.9 Management Fees and Distributions

38

9.10 Sale of Assets

39

9.11 Acquisitions, Mergers, and Dissolutions

39

9.12 Assignment

40

9.13 Fiscal Year and Accounting Methods

40

9.14 New Businesses

40

9.15 Government Regulations

40

SECTION 10 FINANCIAL COVENANTS

40

10.1 Maximum Leverage Ratios

40

10.2 Minimum Fixed Charge Coverage Ratio

41

10.3 Minimum Net Worth

41

10.4 Interest Coverage Ratio

41

10.5 Capital Expenditures

41

SECTION 11 DEFAULT

41

11.1 Payment of Obligation

41

11.2 Covenants

41

11.3 Debtor Relief

42

11.4 Judgments and Attachments

42

11.5 Government Action

42

11.6 Misrepresentation

42

11.7 Ownership

42

11.8 Default Under Other Agreements

42

11.9 Validity and Enforceability of Loan Papers

42

11.10 Employee Plans

43

SECTION 12 RIGHTS AND REMEDIES

43

12.1 Remedies Upon Default

43

12.2 Company Waivers

43

12.3 Performance by Agent

43

12.4 Not in Control

43

12.5 Course of Dealing

44

12.6 Cumulative Rights

44

12.7 Application of Proceeds

44

12.8 Diminution in Value of Collateral

44

12.9 Certain Proceedings

44

SECTION 13 AGREEMENT AMONG LENDERS

44

13.1 Agent

44

13.2 Expenses

46

13.3 Proportionate Absorption of Losses

46

13.4 Delegation of Duties; Reliance

46

13.5 Limitation of Agent's Liability

46

 

 

Page

13.6 Default; Collateral

47

13.7 Limitation of Liability

47

13.8 Relationship of Lenders

47

13.9 Collateral Matters

48

13.10 Benefits of Agreement

48

SECTION 14 MISCELLANEOUS

48

14.1 Headings

48

14.2 Nonbusiness Days; Time

49

14.3 Communications

49

14.4 Form and Number of Documents

49

14.5 Exceptions to Covenants

49

14.6 Survival

49

14.7 Governing Law

49

14.8 Invalid Provisions

49

14.9 Venue; Service of Process; Jury Trial

49

14.10 Amendments, Consents, Conflicts and Waivers

50

14.11 Multiple Counterparts

51

14.12 Successors and Assigns; Participation

51

14.13 Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances

52

14.14 Set-Off

52

14.15 Entirety

53

SCHEDULES AND EXHIBITS

Schedule 1

Parties, Addresses, Committed Sums, and Wiring Information

Schedule 2

Critical Assets

Schedule 2.3

Existing Letters of Credit and Scheduled Debt

Schedule 7.2

Corporate Organization and Structure

Schedule 7.7

Material Litigation Summary

Schedule 7.9

Material Environmental Matters

Schedule 7.13

Non-Standard Transactions with Affiliates

Exhibit A

Revolving Credit Promissory Note

Exhibit B

Guaranty

Exhibit C

Loan Request

Exhibit D

Compliance Certificate

Exhibit E

Conversion Request

Exhibit F

L/C Request

Exhibit G

Assignment

Exhibit H

Pledge Agreement

 

CREDIT AGREEMENT

This Second Amended and Restated Credit Agreement is entered into as of November
13, 2001,

among The Vail Corporation, a Colorado corporation doing business as "Vail
Associates, Inc." ("Borrower"),

the Lenders (defined below), Bank of America, N.A., as Agent for itself and the
other Lenders, and Banc

of America Securities LLC, as Sole Lead Arranger, Sole Book Manager and
Syndication Agent.

RECITALS

Borrower, certain lenders, and NationsBank of Texas, N.A., as Agent, were
parties to a Credit

Agreement dated as of December 19, 1997 (as amended, the "Original Agreement").

The Original Credit Agreement was amended and restated by that certain Amended
and Restated

Credit Agreement among Borrower, certain lenders and NationsBank, N.A.
(successor by merger to

NationsBank of Texas, N.A.), as Agent, dated as of May 1, 1999 (as amended, the
"Existing Agreement").

Effective July 5, 1999, NationsBank, N.A. changed its name to Bank of America,
N.A. Effective

July 23, 1999 Bank of America, N.A. merged with and into Bank of America
National Trust and Savings

Association which then changed its name to Bank of America, N.A.

The parties wish to amend and restate the Existing Agreement on the terms and
conditions of this

Agreement.

In consideration of the mutual covenants contained herein, and for other good
and valuable

consideration, the receipt and adequacy of which are hereby acknowledged, the
Existing Agreement is hereby

amended and restated to read in its entirety as follows:

SECTION 1 DEFINITIONS AND TERMS

.

1.1 Definitions.

Adjusted EBITDA

means the sum of (a) Resort EBITDA, and (b) EBITDA of the Restricted

Companies related to real estate activities in an amount not greater than 20% of
Adjusted EBITDA.

Affiliate

means with respect to any Person (the "relevant Person") (i) any other Person
that

directly, or indirectly through one or more intermediaries, controls the
relevant Person (a "Controlling

Person") or (ii) any Person (other than the relevant Person) which is controlled
by or is under common

control with a Controlling Person. As used herein, the term "control" means
possession, directly or indirectly,

of the power to direct or cause the direction of the management or policies of a
Person, whether through the

ownership of voting securities, by contract or otherwise.

Agent

means Bank of America, N.A., a national banking association, and its successor
or successors

as agent for Lenders under this Agreement.

Agreement

means this Second Amended and Restated Credit Agreement and all schedules and

exhibits, as amended, supplemented, or restated from time to time.

Applicable Margin

means, for any day, the margin of interest over the Base Rate or LIBOR, as the

case may be, that is applicable when any interest rate is determined under this
Agreement. The Applicable

Margin is subject to adjustment (upwards or downwards, as appropriate) based on
the ratio of Funded Debt

to Adjusted EBITDA, as follows:

Level

Ratio of Funded Debt to Adjusted EBITDA

Applicable Margin for LIBOR Loans

Applicable Margin forBase Rate Loans

I

Less than 3.00 to 1.00

1.500%

0.000%

II

Greater than or equal to 3.00 to 1.00, but less than 3.50 to 1.00

1.750%

0.250%

III

Greater than or equal to 3.50 to 1.00, but less than 4.00 to 1.00

2.00%

0.500%

IV

Greater than or equal to 4.0 to 1.00

2.50%

0.750%

Prior to Agent's receipt of the Companies' consolidated unaudited Financial
Statements for the Companies'

fiscal quarter ended October 31, 2001, the ratio of Funded Debt to Adjusted
EBITDA shall be fixed at

Level III. Thereafter, the ratio of Funded Debt to Adjusted EBITDA shall be
calculated on a consolidated

basis for the Companies in accordance with GAAP for the most recently completed
fiscal quarter of the

Companies for which results are available. The ratio shall be determined from
the Current Financials and any

related Compliance Certificate and any change in the Applicable Margin resulting
from a change in such ratio

shall be effective as of the date of delivery of such compliance certificate.
However, if Borrower fails to

furnish to Agent the Current Financials and any related Compliance Certificate
when required pursuant to

Section 8.1

, then the ratio shall be deemed to be at Level IV until Borrower furnishes the
required Current

Financials and any related Compliance Certificate to Agent. Furthermore, if the
Companies' audited Financial

Statements subsequently delivered to Agent for any fiscal year pursuant to
Section 8.1(a)(ii) result in a

different ratio, such revised ratio (whether higher or lower) shall govern
effective as of the date of such

delivery. For purposes of determining such ratio, Adjusted EBITDA for any fiscal
quarter shall include on

a pro forma basis all EBITDA for such period relating to assets acquired in
accordance with this Agreement

(including Restricted Subsidiaries formed or organized) during such period, but
shall exclude on a pro forma

basis all EBITDA for such period relating to any such assets disposed of in
accordance with this Agreement

during such period.

Applicable Percentage

means, for any day, the commitment fee percentage applicable under

Section 4.4

when commitment fees are determined under this Agreement. The Applicable
Percentage is

subject to adjustment (upwards or downwards, as appropriate) based on the ratio
of Funded Debt to Adjusted

EBITDA, as follows:

Level

Ratio of Funded Debt to Adjusted EBITDA

Applicable Percentage

I

Less than 3.00 to 1.00

0.350%

II

Greater than or equal to 3.00 to 1.00, but less than 3.50 to 1.00

0.500%

III

Greater than or equal to 3.50 to 1.00, but less than 4.00 to 1.00

0.500%

IV

Greater than or equal to 4.00 to 1.00

0.500%

The ratio of Funded Debt to Adjusted EBITDA shall be determined as described in
the definition of

"Applicable Margin."

Apollo

means any one or more of the following: Apollo Advisors, L.P., a Delaware
limited

partnership, or any fund, investment vehicle or account managed, advised or
controlled by Apollo

Advisors, L.P., or any of its Affiliates, other than the Companies.

Bank of America

means Bank of America, N.A., a national banking association, in its individual

capacity and not as Agent.

Base Rate

means, for any day, the rate per annum equal to the higher of (a) the sum of the
Federal

Funds Rate for such day plus 0.5%, and (b) the Prime Rate for such day. Any
change in the Base Rate due

to a change in the Prime Rate or the Federal Funds Rate shall be effective on
the effective date of such

change in the Prime Rate or Federal Funds Rate.

Base Rate Loan

means a Loan bearing interest at the sum of the Base Rate plus the Applicable

Margin.

BC Housing L/C

means the $9,232,709 irrevocable transferable L/C expiring June 15, 2002, issued

by Agent to Colorado National Bank and any successor thereto as Trustee under
the 1997 Trust Indenture

with Eagle County, Colorado, as Issuer, relating to $9,100,000 of Eagle County,
Colorado, Taxable Housing

Facilities Revenue Bonds (BC Housing, LLC Project) Series 1997A, under the terms
of which such Trustee

will be entitled to draw, with respect to such Bonds, up to (a) an amount
sufficient to pay (i) the principal of

such Bonds when due, or (ii) the portion of the purchase price of such Bonds
tendered or deemed tendered

for purchase in accordance with such Indenture and not subsequently remarketed
corresponding to the

principal amount of such Bonds, plus (b) an amount equal to approximately 35
days of accrued interest on

such Bonds (at up to 15% per annum), to pay (i) interest on such Bonds when due,
or (ii) the portion of the

purchase price of such Bonds tendered or deemed tendered for purchase in
accordance with such Indenture

and not subsequently remarketed corresponding to accrued interest.

Bond L/Cs

means the BC Housing L/C, the Smith Creek L/Cs, the Breckenridge Terrace L/C,
the

Tarnes L/C, the Tenderfoot Housing, L/C, the Red Sky L/C, and any L/C issued by
Agent on or after the date

hereof under this Agreement at the request of Borrower in support of revenue
bonds or notes for municipal

infrastructure or housing projects.

Borrower

is defined in the preamble to this Agreement.

Breckenridge Terrace L/C

means an irrevocable transferable L/C of up to $16,250,000 expiring

December 15, 2002, to be issued by Agent to U.S. Bank National Association and
any successor thereto as

Trustee under the 1999 Trust Indenture with Breckenridge Terrace LLC as Issuer,
relating to approximately

$16,000,000 of Breckenridge Terrace LLC Taxable Housing Facilities Revenue Notes
(Breckenridge Terrace

Project), Series 1999A, under the terms of which such Trustee will be entitled
to draw up to (a) an amount

sufficient to pay (i) the principal of such Notes when due, or (ii) the portion
of the purchase price of such

Notes tendered or deemed tendered for purchase in accordance with such Indenture
and not subsequently

remarketed corresponding to the principal amount of such Notes, plus (b) an
amount equal to approximately

35 days of accrued interest on such Notes (at up to 15% per annum), to pay (i)
interest on such Notes when

due, or (ii) the portion of the purchase price of such Notes tendered or deemed
tendered for purchase in

accordance with such Indenture and not subsequently remarketed corresponding to
accrued interest.

Business Day

means any day, other than Saturday, Sunday, and any other day that commercial

banks are authorized or required by Law to be closed in Texas or New York or,
for purposes of any LIBOR

Loan, in London.

Capital Lease

means any capital lease or sublease that has been (or under GAAP should be)

capitalized on a balance sheet.

Change of Control Transaction

means the occurrence of any transaction or event, other than the

issuance and sale in a public offering of equity securities of VRI, as a result
of which transaction or event

Apollo shall cease to possess, and some other Person shall obtain, in either
case directly or indirectly, the

power to direct or cause the direction of the management or policies of VRI,
whether through the ownership

of voting securities, by contract or otherwise.

Closing Date

means the date on which counterparts of this Agreement have been executed and

delivered to Agent by each party hereto in accordance with Section 14.11.

Co-Agent

means any syndication agent, documentation agent, or other co-agent under this

Agreement.

Code

means the Internal Revenue Code of 1986, as amended from time to time, and
related rules

and regulations from time to time in effect.

Collateral

is defined in Section 5.2.

Commitment Usage

means, at any time, the sum of (a) the aggregate Principal Debt, plus (b) the

L/C Exposure.

Committed Sum

means the amount (as reduced and canceled under this Agreement) stated beside

a Lender's name for the Facility on Schedule 1 as most recently amended under
this Agreement.

Companies

means VRI and each of VRI's Restricted and Unrestricted Subsidiaries now or

hereafter existing.

Compliance Certificate

means a certificate substantially in the form of Exhibit D and signed by

Borrower's Chief Financial Officer, together with the calculation worksheet
described therein.

Conversion Request

means a request substantially in the form of Exhibit E.

Current Financials

means, initially, the consolidated Financial Statements of the Companies for the

period ended July 31, 2001, and thereafter, the consolidated Financial
Statements of the Companies most

recently delivered to Agent under Section 6.1, 8.1(a) or 8.1(b), as the case may
be.

Debt

of any Person means at any date, without duplication (and calculated in
accordance with

GAAP), (a) all obligations of such Person for borrowed money (whether as a
direct obligation on a

promissory note, bond, zero coupon bond, debenture or other similar instrument,
or as an unfulfilled

reimbursement obligation on a drawn letter of credit or similar instrument, or
otherwise), including, without

duplication, all Capital Lease obligations (other than the interest component of
such obligations) of such

Person, (b) all obligations of such Person to pay the deferred purchase price of
property or services, other

than (i) obligations under employment contracts or deferred employee
compensation plans and (ii) trade

accounts payable and other expenses or payables arising in the ordinary course
of business, (c) all Debt of

others secured by a Lien on any asset of such Person (or for which the holder of
the Debt has an existing

Right, contingent or otherwise, to be so secured), whether or not such Debt is
assumed by such Person, and

(d) all guarantees and other contingent obligations (as a general partner or
otherwise) of such Person with

respect to Debt of others.

Debtor Relief Laws

means the Bankruptcy Reform Act of 1978, as amended from time to time,

and all other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership,

insolvency, reorganization, suspension of payments or similar Laws affecting
creditors' Rights from time to

time in effect.

Default

is defined in Section 11.

Default Rate

means an annual rate of interest equal from day to day to the lesser of (a) the
thenexisting

Base Rate plus the Applicable Margin for Base Rate Loans plus 2%, and (b) the
Maximum Rate.

Distribution

means, with respect to any shares of any capital stock or other equity
securities issued

by a Person, (a) the retirement, redemption, purchase or other acquisition for
value of those securities by such

Person, (b) the payment of any dividend on or with respect to those securities
by such Person, (c) any loan

or advance by that Person to, or other investment by that Person in, the holder
of any of those securities, and

(d) any other payment by that Person with respect to those securities.

EBITDA

means Net Income before interest expense, Taxes based on or measured by income,
and

Non-Cash Operating Charges, in each case to the extent deducted in determining
Net Income, calculated on

a consolidated basis for the Companies in accordance with GAAP.

Eligible Assignee

means (i) a Lender; (ii) an Affiliate of a Lender; and (iii) any other Person

approved by Agent and, unless a Default or Potential Default exists at the time
any assignment is effected

in accordance with Section 14.12(c), Borrower, such approval not to be
unreasonably withheld or delayed

by Borrower, provided, however, that neither Borrower nor an Affiliate of
Borrower shall qualify as an

Eligible Assignee.

Employee Plan

means an employee pension benefit plan covered by Title IV of ERISA and

established or maintained by any Company.

Environmental Law

means any Law that relates to the pollution or protection of ambient air, water

or land or to Hazardous Substances.

ERISA

means the Employee Retirement Income Security Act of 1974, as amended, and
related

rules and regulations.

Existing Agreement

is defined in the Recitals of this Agreement.

Facility

means the revolving credit facility and L/C Subfacility made available to
Borrower under

this Agreement.

Federal Funds Rate

means, for any day, the annual rate (rounded upwards, if necessary, to the

nearest 0.01%) determined (which determination is conclusive and binding, absent
manifest error) by Agent

to be equal to the weighted average of the rates on overnight federal funds
transactions with member banks

of the Federal Reserve System arranged by federal funds brokers on that day, as
published by the Federal

Reserve Bank of New York on the next Business Day, or, if those rates are not
published for any day, the

average rate charged to Agent (in its individual capacity) on such day on such
transactions as determined by

Agent.

Financial Hedge

means a transaction between Borrower and any Lender or an Affiliate of any

Lender (or another Person reasonably acceptable to Agent), which is intended to
reduce or eliminate the risk

of fluctuations in one or more interest rates, foreign currencies, commodity
prices, equity prices, or other

financial measures, whether or not such transaction is governed by or subject to
any master agreement, and

which is legal and enforceable under applicable Law.

Financial Statements

of a Person means balance sheets, profit and loss statements, reconciliations

of capital and surplus, and statements of cash flow prepared (a) according to
GAAP, and (b) other than as

stated in Section 1.3, in comparative form to prior year-end figures or
corresponding periods of the preceding

fiscal year, as applicable.

Forest Service Permit Agreements

means (a) that certain Multiparty Agreement regarding Forest

Service Term Special Use Permit No. 4056-01; (b) that certain Multiparty
Agreement regarding Forest

Service Special Use Permit Nos. 4149-01 and 4149-02; (c) any similar agreement
or instrument relating to

any Forest Service Permit and authorized or contemplated by the provisions of
the documents executed in

connection with the issuance of the Vail Bonds; and (d) all renewals, extensions
and restatements of, and

amendments and supplements to, any of the foregoing.

Forest Service Permits

means (a) Ski Area Term Special Use Permit Holder No. 4056/01 issued

by the Service to Borrower for the Vail ski area on November 23, 1993, and
expiring on October 31, 2031;

(b) Term Special Use Permit No. Holder 4065/03 issued by the Service to
Borrower's wholly-owned

subsidiary, Beaver Creek Associates, Inc., for the Beaver Creek ski area on
November 10, 1999, and expiring

on December 31, 2038; (c) Term Special Use Permit Holder No. 5289-01 for
Keystone ski area issued by

the Service to Ralston Resorts, Inc., now known as Vail Summit Resorts, on
December 31, 1996, and expiring

on December 31, 2032; (d) Term Special Use Permit Holder No. 5289-04 for
Breckenridge ski area issued

by the Service to Ralston Resorts, Inc., now known as Vail Summit Resorts, on
December 31, 1996, and

expiring on December 31, 2029; and (e) any replacements of any of the foregoing.

Funded Debt

means the following, calculated on a consolidated basis for the Restricted
Companies

and SSI (to the extent of Borrower's membership interests in SSI) in accordance
with GAAP: (a) all

obligations for borrowed money (whether as a direct obligation on a promissory
note, bond, zero coupon bond,

debenture or other similar instrument, or as an unfulfilled reimbursement
obligation on a drawn letter of credit

or similar instrument, or otherwise), plus (but without duplication) (b) all
Capital Lease obligations (other

than the interest component of such obligations) of SSI or any Restricted
Company.

Funding Loss

means any loss or expense that any Lender reasonably incurs because (a) Borrower

fails or refuses (for any reason whatsoever, other than a default by Agent or
the Lender claiming such loss

or expense) to take any Loan that it has requested under this Agreement, or (b)
Borrower pays any LIBOR

Loan or converts any LIBOR Loan to a Base Rate Loan, in each case, before the
last day of the applicable

Interest Period.

GAAP

means generally accepted accounting principles of the Accounting Principles
Board of the

American Institute of Certified Public Accountants and the Financial Accounting
Standards Board that are

applicable from time to time.

Guaranty

means a guaranty substantially in the form of Exhibit B.

Hazardous Substance

means any substance that is defined or classified as a hazardous waste,

hazardous material, pollutant, contaminant or toxic or hazardous substance under
any Environmental Law.

Intellectual Property

means (a) common law, federal statutory, state statutory and foreign

trademarks or service marks (including, without limitation, all registrations
and pending applications and the

goodwill of the business symbolized by or conducted in connection with any such
trademark or service mark),

trademark or service mark licenses and all proceeds of trademarks or service
marks (including, without

limitation, license royalties and proceeds from infringement suits), (b) U.S.
and foreign patents (including,

without limitation, all pending applications, continuations,
continuations-in-part, divisions, reissues, substitutions

and extensions of existing patents or applications), patent licenses and all
proceeds of patents (including,

without limitation, license royalties and proceeds from infringement suits), (c)
copyrights (including, without

limitation, all registrations and pending applications), copyright licenses and
all proceeds of copyrights

(including, without limitation, license royalties and proceeds from infringement
suits), and (d) trade secrets,

but does not include

(i) any licenses (including, without limitation, liquor licenses) or any permits
(including,

without limitation, sales tax permits) issued by a Tribunal and in which (y) the
licensee's or permittee's

interest is defeasible by such Tribunal and (z) the licensee or permittee has no
right beyond the terms,

conditions and periods of the license or permit, or (ii) trade names or "dba"s
to the extent they do not

constitute trademarks or service marks.

Interest Period

is determined in accordance with Section 3.9.

ISP 98

means the "International Standby Practices 1998" published by the Institute of
International

Banking Law & Practice (or such later version thereof as may be in effect at the
time of issuance).

Laws

means all applicable statutes, laws, treaties, ordinances, rules, regulations,
orders, writs,

injunctions, decrees and judgments.

L/C

means (a) each of the Bond L/Cs and each existing letter of credit issued by
Agent for the

account of any of the Companies and described on Part A of Schedule 2.3, and (b)
each other letter of credit

(in such form as shall be customary in respect of obligations of a similar
nature and as shall be reasonably

requested by Borrower) issued by Agent under this Agreement and an L/C
Agreement.

L/C Agreement

means a letter of credit application and agreement (in form and substance

satisfactory to Agent in its reasonable discretion) submitted by Borrower to
Agent for an L/C for the account

of any Company.

L/C Exposure

means, without duplication, the sum of (a) the aggregate face amount of all
undrawn

and uncancelled L/Cs, plus (b) the aggregate unpaid reimbursement obligations of
Borrower under drawings,

drafts or other forms of demand honored under any L/C.

L/C Request

means a request substantially in the form of Exhibit F.

L/C Subfacility

means a subfacility for the issuance of L/Cs, as described in Section 2.3.

Lenders

means each of the lenders named on the attached Schedule 1 or on the most
recently

amended Schedule 1, if any, delivered by Agent under this Agreement, and,
subject to this Agreement, their

respective successors and assigns (but not any Participant who is not otherwise
a party to this Agreement).

LIBOR

means, with respect to any LIBOR Loan for any Interest Period therefor

(a) the rate per annum equal to the rate determined by the Agent to be the
offered rate

that appears on the page of the Telerate screen (or any successor thereto) that
displays an average

British Bankers Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first

day of such Interest Period) with a term equivalent to such Interest Period,
determined as of

approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest

Period, or

(b) if the rate referenced in the preceding subsection (a) does not appear on
such page

or service or such page or service shall cease to be available, the rate per
annum equal to the rate

determined by the Agent to be the offered rate on such other page or other
service that displays an

average British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on

the first day of such Interest Period) with a term equivalent to such Interest
Period, determined as

of approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest

Period, or

(c) if the rates referenced in the preceding subsections (a) and (b) are not
available, the

rate per annum determined by the Agent as the rate of interest (rounded upward
to the next 1/100th

of 1%) at which deposits in Dollars for delivery on the first day of such
Interest Period in same day

funds in the approximate amount of the LIBOR Loan being made, continued or
converted by Bank

of America and with a term equivalent to such Interest Period would be offered
by Bank of

America's London Branch to major banks in the offshore Dollar market at their
request at

approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest

Period.

LIBOR Loan

means a Loan bearing interest at the sum of LIBOR plus the Applicable Margin.

Lien

means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or

encumbrance of any kind in respect of such asset. For the purposes of this
Agreement, a Person shall be

deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor

or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such

asset.

Litigation

means any action by or before any Tribunal.

Loan

means any amount disbursed by any Lender to Borrower or on behalf of any Company
under

the Loan Papers, either as an original disbursement of funds, the continuation
of an amount outstanding, or

payment under an L/C.

Loan Date

is defined in Section 2.2(a).

Loan Papers

means (a) this Agreement and the Notes, (b) each Guaranty, (c) all L/Cs and L/C

Agreements, (d) the Security Documents, (e) any Financial Hedge between Borrower
and any Lender or an

Affiliate of any Lender, (f) the Post-Closing Agreement, and (g) all renewals,
extensions and restatements

of, and amendments and supplements to, any of the foregoing.

Loan Request

means a request substantially in the form of Exhibit C.

Material Adverse Event

means any (a) material impairment of the ability of the Restricted

Companies as a whole to perform their payment or other material obligations
under the Loan Papers or

material impairment of the ability of Agent or any Lender to enforce any of the
material obligations of the

Restricted Companies as a whole under the Loan Papers, or (b) material and
adverse effect on the financial

condition of the Restricted Companies as a whole.

Material Agreement

means, for any Person, any agreement (excluding purchase orders for material,

services or inventory in the ordinary course of business) to which that Person
is a party, by which that Person

is bound, or to which any assets of that Person may be subject, and that is not
cancelable by that Person upon

30 or fewer days' notice without liability for further payment, other than
nominal penalty, and that requires

that Person to pay more than $2,000,000 during any 12-month period.

Maximum Amount

and Maximum Rate respectively mean, for a Lender, the maximum non-

usurious amount and the maximum non-usurious rate of interest that, under
applicable Law, such Lender is

permitted to contract for, charge, take, reserve or receive on the Obligation
held by such Lender.

Moody's

means Moody's Investors Service, Inc.

Multiemployer Plan

means a multiemployer plan as defined in Sections 3(37) or 4001(a)(3) of

ERISA or Section 414(f) of the Code to which any Company (or any Person that,
for purposes of Title IV

of ERISA, is a member of Borrower's controlled group or is under common control
with Borrower within the

meaning of Section 414 of the Code) is making, or has made, or is accruing, or
has accrued, an obligation

to make contributions.

Net Income

means, for any period, for the Companies on a consolidated basis, the net income
of the

Companies from continuing operations after extraordinary items (excluding gains
or losses from the disposition

of assets) for that period determined in accordance with GAAP.

Net Proceeds

means (a) with respect to any sale, lease, transfer or other disposition of any
asset by

any Person, the aggregate amount of cash and non-cash proceeds from such
transaction received by, or paid

to or for the account of, such Person, net of customary and reasonable
out-of-pocket costs, fees, and

expenses (other than costs, fees, and expenses paid to an Affiliate of such
Person), and (b) with respect to

the issuance of equity securities, debt securities, Subordinated Debt, or
similar instruments, or the incurrence

of Debt, the cash and non-cash proceeds received from such issuance or
incurrence, net of attorneys' fees,

investment banking fees, accountants fees, underwriting discounts and
commissions and other customary fees

and expenses actually incurred in connection with such issuance (other than
fees, discounts, commissions, and

expenses paid to an Affiliate of such Person). Non-cash proceeds include any
proceeds received by way

of deferred payment of principal pursuant to a note, installment receivable,
purchase price adjustment

receivable, or otherwise, but only as and when received.

Non-Cash Operating Charges

means depreciation expense, amortization expense, and any other

non-cash charges determined in accordance with GAAP.

Note

means a promissory note executed under this Agreement, in each case
substantially in the form

of Exhibit A, as amended, supplemented or restated.

Obligation

means all present and future indebtedness and obligations, and all renewals,
increases and

extensions thereof, or any part thereof, now or hereafter owed to Agent and
Lenders (and, with regard to any

Financial Hedge, to an Affiliate of any Lender) by the Companies under the Loan
Papers, together with all

interest accruing thereon, fees, costs and expenses (including, without
limitation, all attorneys' fees and

expenses incurred in the enforcement or collection thereof) payable under the
Loan Papers or in connection

with the protection of Rights under the Loan Papers.

Original Agreement

is defined in the Recitals to this Agreement.

Participant

is defined in Section 14.12(b).

PBGC

means the Pension Benefit Guaranty Corporation, or any successor thereof,
established under

ERISA.

Permitted Debt

means:

(a) the Obligation;

(b) Debt which is listed on Part B of Schedule 2.3;

(c) Debt arising from endorsing negotiable instruments for collection in the
ordinary

course of business;

(d) Subordinated Debt (and guarantees by Restricted Companies of Subordinated
Debt

of other Restricted Companies, if such guarantees are subordinated to the
payment and collection of

the Obligation on the same terms as such Subordinated Debt or otherwise upon
terms satisfactory

to Agent);

(e) in addition to the foregoing, (i) Debt of Unrestricted Subsidiaries which is
nonrecourse

to the Restricted Companies and their assets, (ii) fees and other amounts
payable under the

Forest Service Permits in the ordinary course of business, and (iii)
inter-Company Debt between

Restricted Companies;

(f) up to $12,975,000 of Debt arising under the guaranty by Borrower of amounts
owed

by SSI under its Credit Agreement dated as of December 30, 1999, as amended,
restated or

supplemented from time to time (with any remaining Debt under such guaranty
included in clause

(g) below); and

(g) in addition to the foregoing, up to $100,000,000 of additional Debt of the
Companies

in the aggregate at any point in time.

Permitted Liens

means:

(a) Liens created by the Security Documents or other Liens securing the
Obligation;

(b) Liens created by, or pursuant to, the Forest Service Permit Agreements for
the

benefit of the holders of the Vail Bonds and Liens on the amounts in the Bond
Fund established and

maintained in accordance with the provisions of the documents executed in
connection with the

issuance of the Vail Bonds (and Liens created on all or any portion of the same
assets in connection

with any refinancing of such bonds);

(c) Liens on the amounts in the Bond Fund, Redemption Fund and Rebate Fund

established and maintained in accordance with the provisions of the documents
executed in

connection with the issuance of the Summit Bonds (and Liens created on all or
any portion of the

same assets in connection with any refinancing of such bonds);

(d) Liens on assets of Unrestricted Subsidiaries securing Debt which is
non-recourse

to the Restricted Companies and their assets;

(e) purchase money liens which encumber only the assets acquired;

(f) pledges or deposits made to secure payment of workers' compensation,

unemployment insurance or other forms of governmental insurance or benefits or
to participate in any

fund in connection with workers' compensation, unemployment insurance, pensions
or other social

security programs;

(g) good-faith pledges or deposits made to secure performance of bids, tenders,

contracts (other than for the repayment of borrowed money) or leases, or to
secure statutory

obligations, surety or appeal bonds or indemnity, performance or other similar
bonds in the ordinary

course of business;

(h) encumbrances and restrictions on the use of real property which do not
materially

impair the use thereof;

(i) the following, if either (1) no amounts are due and payable and no Lien has
been filed

or agreed to, or (2) the validity or amount thereof is being contested in good
faith by lawful

proceedings diligently conducted, reserve or other provision required by GAAP
has been made, levy

and execution thereon have been (and continue to be) stayed or payment thereof
is covered in full

(subject to the customary deductible) by insurance: (i) Liens for Taxes; (ii)
Liens upon, and defects

of title to, property, including any attachment of property or other legal
process prior to adjudication

of a dispute on the merits; (iii) Liens imposed by operation of law (including,
without limitation, Liens

of mechanics, materialmen, warehousemen, carriers and landlords, and similar
Liens); and

(iv) adverse judgments on appeal;

(j) any interest or title of a lessor or licensor in assets being leased or
licensed to a

Company;

(k) licenses, leases or subleases granted to third Persons which do not
interfere in any

material respect with the business conducted by the Companies;

(l) any Lien on any asset of any entity that becomes a Subsidiary of VRI, which
Lien

exists at the time such entity becomes a Subsidiary of VRI and is not created in
contemplation

thereof;

(m) in respect of Water Rights, the provisions of the instruments evidencing
such Water

Rights and any matter affecting such Water Rights which does not affect the
Companies' rights to

sufficient quantity and quality of water to conduct business as in effect on the
date hereof or any

expansion planned as of the date hereof (including, without limitation, any Lien
of the Colorado Water

Conservation Board, or its successors and assigns, on stock owned by any Company
in a Colorado

ditch and reservoir company formed in accordance with the Colorado Corporation
Code, as

amended);

(n) in respect of the Forest Service Permits, the provisions of the instruments
evidencing

such permits and all rights of the U.S. and its agencies with respect thereto or
with respect to the

land affected thereby; and

(o) Liens on cash accounts not to exceed $250,000 in the aggregate at the
FirstBank of

Vail established in connection with collateralizing a portion, if any, of
certain second mortgage loans

made by such bank, and guaranteed by Borrower, as part of the Vail Associates
Home Mortgage

Program for Borrower's employees.

Person

means any individual, partnership, entity or Tribunal.

Pledge Agreement

means a pledge agreement substantially in the form of attached Exhibit "H".

Post-Closing Agreement

means the Post-Closing Agreement dated the same date as this Agreement

which is in a form reasonably acceptable to Borrower and Agent regarding the
pledge of the capital stock

of Grand Teton Lodge Company and the capital stock or equity interests of any
Restricted Company which

is not wholly-owned by another Restricted Company.

Potential Default

means the occurrence of any event or existence of any circumstance that would,

upon notice or lapse of time or both, become a Default.

Prime Rate

means the per annum rate of interest established from time to time by Agent as
its prime

rate. Such rate is a rate set by Bank of America based upon various factors
including Bank of America's

costs and desired return, general economic conditions and other factors, and is
used as a reference point for

pricing some loans, which may be priced at, above, or below such rate. Any
change in such rate announced

by Bank of America shall take effect at the opening of business on the day
specified in the public

announcement of such change.

Principal Debt

means, at any time, the unpaid principal balance of all Loans.

Pro Rata

and Pro Rata Part means, when determined for any Lender, if no Default or
Potential

Default exists, the proportion (stated as a percentage) that its Committed Sum
bears to the Total Commitment,

or if a Default or Potential Default exists, the proportion (stated as a
percentage) that the Principal Debt owed

to it bears to the aggregate Principal Debt owed to all Lenders.

Purchaser

is defined in Section 14.12(c).

Quarterly Date

means each January 31, April 30, July 31 and October 31.

Red Sky L/C

means an irrevocable transferable L/C of up to $12,140,000 expiring

December 15, 2002, issued by Agent to U.S. Bank National Association and any
successor thereto as Trustee

under the Trust Indenture dated as of June 1, 2001 with Holland Creek
Metropolitan District, pursuant to

which $12,000,000 in aggregate principal amount of the Holland Creek
Metropolitan District, Eagle County,

Colorado, Variable Rate Revenue Bonds, Series 2001, are being issued and
delivered by Holland Creek

Metropolitan District, a quasi-municipal corporation and political subdivision
of the State of Colorado under

the terms of which such Trustee will be entitled to draw, with respect to such
Bonds, up to (a) an amount

sufficient to pay (i) the principal of such Bonds when due, or (ii) the portion
of the purchase price of such

Bonds tendered or deemed tendered for purchase in accordance with such Indenture
and not subsequently

remarketed corresponding to the principal amount of such Bonds, plus (b) an
amount equal to approximately

35 days of accrued interest on such Bonds (at up to 12% per annum), to pay (i)
interest on such Bonds when

due, or (ii) the portion of the purchase price of such Bonds tendered or deemed
tendered for purchase in

accordance with such indenture and not subsequently remarketed corresponding to
accrued interest.

Representatives

means representatives, officers, directors, employees, attorneys and agents.

Required Capital Expenditures

means $30,000,000.

Required Lenders

means Lenders holding more than (a) 50% of the Total Commitment, if no

Default or Potential Default exists, or (b) 50% of the outstanding Principal
Debt, if a Default or Potential

Default exists.

Reserve Requirement

means, with respect to any LIBOR Loan for the relevant Interest Period, the

maximum rate at which reserves (including, without limitation, any marginal,
special, supplemental, or

emergency reserves) are required to be maintained under regulations issued from
time to time by the Board

of Governors of the Federal Reserve System (or any successor) by member banks of
the Federal Reserve

System against "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect

of the foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such

member banks with respect to (i) any category of liabilities which includes
deposits by reference to which

LIBOR is to be determined, or (ii) any category of extensions of credit or other
assets which include LIBOR

Loans. LIBOR shall be adjusted automatically on and as of the effective date of
any change in the Reserve

Requirement.

Resort EBITDA

means the total of EBITDA, plus insurance proceeds (up to a maximum of

$10,000,000 in the aggregate in any fiscal year) received by the Restricted
Companies under policies of

business interruption insurance (or under policies of insurance which cover
losses or claims of the same

character or type), minus EBITDA related to real estate activities and minus any
portion of EBITDA

attributable to Unrestricted Subsidiaries other than SSI (to the extent of
Borrower's membership interests

in SSI).

Responsible Officer

means the chairman, president, chief executive officer or chief financial
officer

of Borrower.

Restricted Company

means VRI, VHI, Borrower and all of VRI's other direct and indirect

Subsidiaries (other than Unrestricted Subsidiaries).

Restricted Subsidiary

means VHI, Borrower and all of VRI's other direct and indirect Subsidiaries

(other than Unrestricted Subsidiaries).

Rights

means rights, remedies, powers, privileges and benefits.

S&P

means Standard & Poor's Ratings Group (a division of The McGraw Hill Companies,
Inc.).

Security Documents

means, collectively, a Pledge Agreement, any security agreement, mortgage,

deed of trust or other agreement or document, together with all related
financing statements and stock

powers, in form and substance reasonably satisfactory to Agent and its legal
counsel, executed and delivered

by any Person in connection with this Agreement to create a Lien in favor of
Lenders on any of its real or

personal property, as amended, supplemented or restated.

Senior Debt

means Funded Debt other than Subordinated Debt.

Senior Subordinated Debt Indenture

means the Indenture dated as of May 11, 1999, between VRI,

as Issuer, United States Trust Company of New York, as Trustee, and certain of
VRI's Subsidiaries, as

guarantors, as supplemented from time to time.

Service

means the U.S. Department of Agriculture Forest Service or any successor agency.

Shareholders' Equity

means, as of any date of determination for the Restricted Companies on a

consolidated basis, shareholders' equity as of that date determined in
accordance with GAAP.

Smith Creek L/Cs

means the $21,110,356 irrevocable transferable L/C and the $19,625,206

irrevocable transferable L/C, each expiring October 15, 2002, and issued by
Agent to Colorado National Bank

and any successor thereto as Trustee under the 1995 Trust Indenture with Smith
Creek Metropolitan District

as Issuer, as supplemented by the 1997 First Supplemental Trust Indenture,
relating to the Smith Creek

Metropolitan District, Eagle County, Colorado, Variable Rate Revenue Bonds,
Series 1995 (in the amount

of $26,000,000) and Series 1997 (in the amount of $18,500,000), under the terms
of which such Trustee will

be entitled to draw, with respect to the applicable series of Bonds, up to (a)
an amount sufficient to pay (i)

the principal of the "Outstanding Bonds" (as defined in such Indenture) when
due, or (ii) the portion of the

purchase price of Outstanding Bonds tendered or deemed tendered for purchase in
accordance with such

Indenture and not subsequently remarketed corresponding to the principal amount
of such Bonds, plus (b)

an amount equal to approximately 185 days of accrued interest on the Outstanding
Bonds (at 12% per annum

or such higher rate as such Trustee may designate in accordance with such
Indenture), to pay (i) interest on

the Outstanding Bonds when due, or (ii) the portion of the purchase price of
Outstanding Bonds tendered or

deemed tendered for purchase in accordance with such Indenture and not
subsequently remarketed

corresponding to accrued interest.

Solvent

means, as to a Person, that (a) the aggregate fair market value of its assets
exceeds its

liabilities, (b) it has sufficient cash flow to enable it to pay its Debts as
they mature, and (c) it does not have

unreasonably small capital to conduct its businesses.

SSI

means SSI Venture LLC, a Colorado limited liability company doing business as
Specialty Sports

Venture and an Unrestricted Subsidiary of Borrower.

Subordinated Debt

means any unsecured indebtedness for borrowed money for which a Company

is directly and primarily obligated that (a) does not have any stated maturity
before the latest maturity of any

part of the Obligation, (b) has terms that are no more restrictive upon the
Company than the terms of the

Loan Papers, and (c) is subordinated, upon terms satisfactory to Agent, to the
payment and collection of the

Obligation; and, in any event, "Subordinated Debt" includes notes, guarantees
and all other obligations now

or hereafter arising under or pursuant to the Senior Subordinated Debt Indenture
(or any other indenture that

contains the same material terms as the Senior Subordinated Debt Indenture).

Subsidiary

means with respect to any Person, any corporation or other entity of which
securities or

other ownership interests having ordinary voting power to elect a majority of
the board of directors or other

persons performing similar functions are at the time directly or indirectly
owned by such Person.

Summit Bonds

means (a) the Summit County, Colorado, Sports Facilities Refunding Revenue Bonds

(Keystone Resorts Management, Inc. Project) Series 1990, in the original
principal amount of $20,360,000

(of which, approximately $19,000,000 is outstanding on the date hereof), (b) the
Summit County, Colorado,

Sports Facilities Refunding Revenue Bonds (Keystone Resorts Management, Inc.
Project) Series 1991, in

the original principal amount of $3,000,000 (all of which remains outstanding on
the date hereof), and

(c) refinancings of any of the foregoing.

Total Assets

means, as of any date of determination for the Restricted Companies on a
consolidated

basis, all assets of the Restricted Companies (as determined in accordance with
GAAP).

Tarnes L/C

means an irrevocable transferable L/C of up to $8,250,000 expiring December 15,
2002,

to be issued by Agent to U.S. Bank National Association and any successor
thereto as Trustee under the

1999 Trust Indenture with Eagle County, Colorado, as Issuer, relating to
approximately $8,000,000 of Eagle

County, Colorado, Taxable Housing Facilities Revenue Bonds (The Tarnes at BC,
LLC Project), Series

1999A, under the terms of which such Trustee will be entitled to draw up to (a)
an amount sufficient to pay

(i) the principal of such Bonds when due, or (ii) the portion of the purchase
price of such Bonds tendered or

deemed tendered for purchase in accordance with such Indenture and not
subsequently remarketed

corresponding to the principal amount of such Bonds, plus (b) an amount equal to
approximately 35 days of

accrued interest on such Bonds (at up to 15% per annum), to pay (i) interest on
such Bonds when due, or

(ii) the portion of the purchase price of such Bonds tendered or deemed tendered
for purchase in accordance

with such Indenture and not subsequently remarketed corresponding to accrued
interest.

Taxes

means, for any Person, taxes, assessments or other governmental charges or
levies imposed

upon it, its income, or any of its properties, franchises or assets.

Tenderfoot Housing L/C

means an irrevocable transferable L/C of up to $5,783,125 expiring

December 15, 2002, issued by Agent to U.S. Bank National Association and any
successor thereto as Trustee

under the Trust Indenture dated as of June 1, 2001 with Tenderfoot Seasonal
Housing, LLC, pursuant to

which $5,700,000 in aggregate principal amount of the Tenderfoot Seasonal
Housing, LLC Taxable Housing

Facilities Notes (Tenderfoot Seasonal Housing, LLC Project), Series 200A, are
being issued and delivered

by Tenderfoot Seasonal Housing, LLC, a Colorado limited liability company, under
the terms of which such

Trustee will be entitled to draw, with respect to such Notes, up to (a) an
amount sufficient to pay (i) the

principal of such Notes when due, or (ii) the portion of the purchase price of
such Notes tendered or deemed

tendered for purchase in accordance with such Indenture corresponding to the
principal amount of such

Notes, plus (b) an amount not to exceed $83,125 of accrued interest on such
Notes, to pay (i) interest on such

Notes when due, or (ii) the portion of the purchase price of such Notes tendered
or deemed tendered for

purchase which corresponds to the accrued interest on the principal amount of
such Notes.

Termination Date

means the earlier of (a) November 13, 2004, and (b) the effective date that

Lenders' commitments to lend under this Agreement are otherwise canceled or
terminated.

Total Commitment

means, at any time, the sum of all Committed Sums for all Lenders (as reduced

or canceled under this Agreement) then in effect.

Tribunal

means any (a) local, state, or federal judicial, executive, or legislative
instrumentality,

(b) private arbitration board or panel, or (c) central bank.

Trustee

means any Trustee designated as the beneficiary of a Bond L/C.

Type

means any type of Loan determined with respect to the applicable interest
option.

UCP

means The Uniform Customs and Practice for Documentary Credits, 1993 Revision,

International Chamber of Commerce Publication No. 500 (or any revision thereof).

Unrestricted Subsidiary

means any existing Subsidiary or newly-formed Subsidiary created by

Borrower pursuant to Section 8.11 (which may be a partnership, joint venture,
corporation, limited liability

company or other entity) (a) which does not own any Forest Service Permit or the
stock of any Restricted

Company or any of the assets described on Schedule 2, (b) which has (and whose
other partners, joint

venturers, members or shareholders have) no Debt or other material obligation
which is recourse to any

Restricted Company or to the assets of any Restricted Company (other than with
respect to limited

guarantees or other recourse agreements of the Restricted Companies which are
permitted to be incurred

under this Agreement under clauses (f) or (g) of the definition of "Permitted
Debt"), and (c) which has been

designated by Borrower as an Unrestricted Subsidiary by notice to Agent. Subject
to Section 14.10(b)(v),

Agent shall execute documentation reasonably required to release any Restricted
Subsidiary which is

redesignated by Borrower as an Unrestricted Subsidiary from its Guaranty. As of
the Closing Date the

Unrestricted Subsidiaries are Eagle Park Reservoir Company, SSI Venture LLC,
Boulder/Beaver, LLC,

Colter Bay Corporation, Gros Ventre Utility Company, Jackson Lake Lodge
Corporation, Jenny Lake Lodge,

Inc., Forest Ridge Holdings, Inc., Resort Technology Partners LLC, and RT
Partners, Inc.

U.S.

means the United States of America.

Vail Bonds

means (a) the Eagle County, Colorado, Sports Facilities Revenue Refunding Bonds
Series

1998, in the original principal amount of $41,200,000, and (b) refinancings of
any of the foregoing.

Vail Summit Resorts

means Vail Summit Resorts, Inc. (f/k/a "Ralston Resorts, Inc."), a Colorado

corporation and a wholly-owned Subsidiary of Borrower.

VHI

means Vail Holdings, Inc., a Colorado corporation and the direct owner of
Borrower.

VRI

means Vail Resorts, Inc., a Delaware corporation and the indirect owner of
Borrower.

Water Rights

means all water rights and conditional water rights that are appurtenant to real
property

owned by the Companies or that have been used or are intended for use in
connection with the conduct of

the business of the Companies, including but not limited to (a) ditch, well,
pipeline, spring and reservoir rights,

whether or not adjudicated or evidenced by any well or other permit, (b) all
rights with respect to groundwater

underlying any real property owned by the Companies, (c) any permit to construct
any water well, water from

18 ::ODMA\PCDOCS\DOCS\409767\11

which is intended to be used in connection with such real property, and (d) all
right, title and interest of the

Companies under any decreed or pending plan of augmentation or water exchange
plan.

1.2 Number and Gender of Words. The singular number includes the plural where
appropriate

and vice versa, and words of any gender include each other gender where
appropriate.

1.3 Accounting Principles. Under the Loan Papers and any documents delivered
thereunder,

unless otherwise stated, (a) GAAP in effect from time to time determines all
accounting and financial terms

and compliance with financial covenants, (b) otherwise, all accounting
principles applied in a current period

must be comparable in all material respects to those applied during the
preceding comparable period, and (c)

while VRI has any consolidated Restricted Subsidiaries, all accounting and
financial terms and compliance

with financial covenants must be on a consolidating and consolidated basis, as
applicable.

SECTION 2 COMMITMENT

.

2.1 Credit Facility. Subject to the provisions in the Loan Papers, each Lender
hereby severally

and not jointly agrees to lend to Borrower its Pro Rata Part of one or more
revolving Loans in an aggregate

principal amount outstanding at any time up to such Lender's Committed Sum,
which Borrower may borrow,

repay, and reborrow under this Agreement. Loans are subject to the following
conditions:

(a) Each Loan must occur on a Business Day and no later than the Business Day

immediately preceding the Termination Date;

(b) Each Loan must be in an amount not less than (i) $500,000 or a greater
integral

multiple of $100,000 (if a Base Rate Loan), or (ii) $1,000,000 or a greater
integral multiple of

$100,000 (if a LIBOR Loan); and

(c) When determined, (i) Commitment Usage may not exceed the Total Commitment,

and (ii) for any Lender, its Pro Rata Part of the Commitment Usage may not
exceed such Lender's

Committed Sum.

2.2 Loan Procedure.

(a) Borrower may request a Loan by submitting to Agent a Loan Request, which is

irrevocable and binding on Borrower. It must be received by Agent no later than
1:00 p.m. on the

third Business Day preceding the date on which funds are requested (the "Loan
Date") for any

LIBOR Loan or no later than 1:00 p.m. on the Business Day immediately preceding
the Loan Date

for any Base Rate Loan. Agent shall promptly notify each Lender of its receipt
of any Loan Request

and its contents.

(b) Each Lender shall remit its applicable Pro Rata Part of each requested Loan
to

Agent's principal office in Dallas, Texas, in funds that are available for
immediate use by Agent by

11:00 a.m. on the applicable Loan Date. Subject to receipt of such funds, Agent
shall (unless to its

actual knowledge any of the applicable conditions precedent have not been
satisfied by Borrower or

waived by Required Lenders) make such funds available to Borrower as directed in
the Loan

Request.

(c) Absent contrary written notice from a Lender, Agent may assume that each
Lender

has made its Pro Rata Part of the requested Loan available to Agent on the
applicable Loan Date,

and Agent may, in reliance upon such assumption (but shall not be required to),
make available to

Borrower a corresponding amount. If a Lender fails to make such Pro Rata Part of
any requested

Loan available to Agent on the applicable Loan Date, Agent may recover the
applicable amount on

demand (i) from that Lender, together with interest at the Federal Funds Rate
during the period

commencing on the date the amount was made available to Borrower by Agent and
ending on (but

excluding) the date Agent recovers the amount from that Lender, or (ii), if that
Lender fails to pay

its amount upon demand, then from Borrower, together with interest at an annual
interest rate equal

to the rate applicable to the requested Loan during the period commencing on the
Loan Date and

ending on (but excluding) the date Agent recovers the amount from Borrower. No
Lender is

responsible for the failure of any other Lender to fund any part of any Loan.

2.3 L/C Subfacility.

(a) Subject to the terms and conditions of this Agreement and applicable Law,
Agent

agrees, in reliance upon the agreements of the other Lenders set out in this
Section 2.3, to issue L/Cs

denominated in U.S. Dollars under the Facility upon Borrower's delivery of an
L/C Request and an

L/C Agreement, each of which must be received by Agent no later than 1:00 p.m.
on the third

Business Day preceding the date on which the requested L/C is to be issued;
provided that,

Commitment Usage may not exceed the Total Commitment after giving effect to the
issuance of

such L/C. Each L/C (other than the Bond L/Cs) must expire no later than 13
months from its

issuance; provided that any L/C (other than the Bond L/Cs) may, at Borrower's
request, provide

that it is self-extending upon its expiration date for successive periods of 6
to 12 months each (as

selected by Borrower), unless Agent has given the beneficiary thereunder at
least 30 days (but no

more than 120 days) prior written notice to the contrary (provided, however,
that such notice shall

in no event be given by Agent unless (i) Agent is directed so to do by Borrower,
(ii) a Default exists,

or (iii) such extension would extend the expiration date beyond the Termination
Date). Amounts

drawn under the Bond L/Cs are subject to reinstatement upon the terms set forth
therein. In no event

may any L/C have an expiration date later than the Termination Date.

(b) Immediately upon Agent's issuance of any L/C, Agent shall be deemed to have
sold

and transferred to each Lender, and each Lender shall be deemed irrevocably and
unconditionally

to have purchased and received from Agent, without recourse or warranty, an
undivided interest and

participation (to the extent of such Lender's Pro Rata Part) in the L/C and all
applicable Rights of

Agent in the L/C (other than Rights to receive the fronting fees provided for in
Section 4.3). Agent

shall provide copies of L/Cs to Lenders upon request and shall distribute
quarterly schedules of the

outstanding L/Cs to each Lender.

(c) To induce Agent to issue and maintain L/Cs, and to induce Lenders to
participate

in issued L/Cs, Borrower agrees to pay or reimburse Agent (i) on or before the
date when any draft,

draw or other form of demand is presented under any L/C, the amount paid or to
be paid by Agent

(subject to a credit, in the case of a Bond L/C, for any portion of such
reimbursement received by

Agent directly from the relevant Trustee for the account of Borrower under the
relevant Indenture)

and (ii) promptly, upon demand, the amount of any additional fees Agent
customarily charges for the

application and issuance of an L/C, for amending L/C Agreements, for honoring
drafts, draws or

other forms of demands, and taking similar action in connection with letters of
credit. If Borrower

(or, in the case of a drawing under a Bond L/C, the relevant Trustee) has not
reimbursed Agent for

any drafts or draws or other forms of demands paid or to be paid and Borrower
has not requested

a Loan to fund such reimbursement obligations within 24 hours following Agent's
demand for

reimbursement, Agent is irrevocably authorized to fund Borrower's reimbursement
obligations as a

Loan under this Agreement (and the proceeds of the Loan shall be advanced
directly to Agent to pay

Borrower's unpaid reimbursement obligations). If funds cannot be advanced
because the Facility

has been terminated under Section 12.1, then Borrower's reimbursement obligation
shall constitute

a demand obligation. Borrower's obligations under this Section 2.3(c) are
absolute and unconditional

under any and all circumstances and irrespective of any setoff, counterclaim or
defense (other than

payment) that Borrower may have at any time against Agent or any other Person.
Agent shall

promptly distribute reimbursement payments received from Borrower to all Lenders
according to

their Pro Rata Part. From the date due to the date paid, unpaid reimbursement
amounts accrue

interest that is payable on demand at the Default Rate.

(d) Agent shall promptly notify Borrower of the date and amount of any draft,
draw or

other form of demand presented for honor under any L/C and the date and amount
of any payment

by Agent in connection therewith (but failure to give notice will not affect
Borrower's obligations

under this Agreement). Agent shall pay the requested amount upon presentment of
a draft, draw or

other form of demand, unless presentment on its face does not comply with the
terms of the

applicable L/C. When making payment, Agent may disregard (i) any default or
potential default that

exists under any other agreement and (ii) obligations under any other agreement
that have or have

not been performed by the beneficiary or any other Person (and Agent is not
liable for any of those

obligations). Borrower's reimbursement obligations to Agent and Lenders, and
each Lender's

obligations to Agent, under this Section 2.3 are absolute and unconditional
irrespective of, and Agent

is not responsible for, (i) the validity, enforceability, sufficiency, accuracy
or genuineness of

documents or endorsements (even if they are in any respect invalid,
unenforceable, insufficient,

inaccurate, fraudulent or forged), (ii) any dispute by any Company with or any
Company's claims,

setoffs, defenses (other than payment), counterclaims or other Rights against
Agent, any Lender

or any other Person, or (iii) the occurrence of any Potential Default or
Default.

(e) If Borrower (or, in the case of a drawing under a Bond L/C, the relevant
Trustee)

fails to reimburse Agent as provided in Section 2.3(c) within 24 hours after
Agent's demand for

reimbursement, and funds cannot be advanced under this Agreement to satisfy the
reimbursement

obligations, Agent shall promptly notify each Lender of Borrower's failure, of
the date and amount

paid, and of each Lender's Pro Rata Part of the unreimbursed amount. Each Lender
shall promptly

and unconditionally make available to Agent in immediately available funds such
Pro Rata Part of the

unpaid reimbursement obligation. Funds are due and payable to Agent before the
close of business

on the Business Day when Agent gives notice to each Lender of Borrower's
reimbursement failure

(if notice is received by such Lender before 2:00 p.m.) (in the time zone where
such Lender's office

listed on Schedule 1 is located) or on the next succeeding Business Day (if
received after 2:00 p.m.).

All amounts payable by any Lender accrue interest at the Federal Funds Rate from
the day the

applicable draft, draw or other form of demand is paid by Agent to (but not
including) the date the

amount is paid by the Lender to Agent.

(f) Borrower acknowledges that each L/C is deemed issued upon delivery to the

beneficiary or Borrower. If Borrower requests any L/C be delivered to Borrower
rather than the

beneficiary, and Borrower subsequently cancels that L/C, Borrower agrees to
return it to Agent

together with Borrower's written certification that it has never been delivered
to the beneficiary. If

any L/C is delivered to the beneficiary under Borrower's instructions,
Borrower's cancellation is

ineffective without Agent's receipt of the beneficiary's written consent and the
L/C. Borrower

shall indemnify Agent for all losses, costs, damages, expenses and reasonable
attorneys'

fees suffered or incurred by Agent resulting from any dispute concerning
Borrower's

cancellation of any L/C.

(g) Agent agrees with each Lender that it will exercise and give the same care
and

attention to each L/C as it gives to its other letters of credit. Each Lender
and Borrower agree that,

in paying any draft, draw or other form of demand under any L/C, Agent has no
responsibility to

obtain any document (other than any documents expressly required by the
respective L/C) or to

ascertain or inquire as to any document's validity, enforceability, sufficiency,
accuracy or genuineness

or the authority of any Person delivering it. Neither Agent nor its
Representatives will be liable to

any Lender or any Company for any L/C's use or for any beneficiary's acts or
omissions. Any

action, inaction, error, delay or omission taken or suffered by Agent or any of
its Representatives in

connection with any L/C, applicable draws, drafts, other forms of demand or
documents, or the

transmission, dispatch or delivery of any related message or advice, if in good
faith and in conformity

with applicable Laws and in accordance with the standards of care specified in
the UCP or ISP 98,

as applicable, is binding upon the Companies and Lenders and does not place
Agent or any of its

Representatives under any resulting liability to any Company or any Lender.
Agent and its

Representatives are not liable to any Company or any Lender for any action taken
or

omitted, in the absence of gross negligence or willful misconduct, by Agent or
its

Representative in connection with any L/C.

(h) On the Termination Date, or during the continuance of any Default under

Section 11.3

, or upon any demand by Agent during the continuance of any other Default,
Borrower

shall provide to Agent, for the benefit of Lenders, cash collateral in an amount
equal to the thenexisting

L/C Exposure. Any cash collateral provided by Borrower to Agent hereunder shall
be

deposited by Agent in an interest-bearing cash collateral account maintained
with Agent at the office

of Agent and invested in obligations issued or guaranteed by the U.S. and, upon
cure of any Default

or upon the surrender of any L/C, Agent shall deliver the appropriate funds
(together with interest

earned with respect thereto) on deposit in such collateral account to Borrower.

(i) Borrower shall protect, indemnify, pay and save Agent, each Lender and

their respective Representatives harmless from and against any and all claims,
demands,

liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys'

fees) which any of them may incur or be subject to as a consequence of the
issuance of any

L/C, any dispute about it, or the failure of Agent to honor a draft, draw or
other form of

demand under any L/C, unless they arise as a result of Agent's failure to act in
accordance

with the procedures of the UCP or ISP 98, as applicable, (as modified by any L/C

Agreement or other writing between Borrower and Agent).

(j) Although referenced in any L/C, terms of any particular agreement or other

obligation to the beneficiary are not incorporated into this Agreement in any
manner. The fees and

other amounts payable with respect to each L/C are as provided in this
Agreement, drafts and draws

and other forms of demands under each L/C are part of the Obligation, and the
terms of this

Agreement control any conflict between the terms of this Agreement and any L/C
Agreement.

(k) Unless otherwise expressly agreed by Agent and Borrower when an L/C is
issued

(i) the rules of ISP 98 shall apply to each standby L/C, and (ii) the rules of
the UCP shall apply to

each commercial L/C.

SECTION 3 TERMS OF PAYMENT

.

3.1 Notes and Payments.

(a) The Principal Debt shall be evidenced by Notes, payable to each Lender in
the stated

principal amount of its Committed Sum.

(b) Borrower must make each payment on the Obligation to Agent's principal
office in

Dallas, Texas, in funds that will be available for immediate use by Agent by
12:00 noon on the day

due; otherwise, but subject to Section 3.8, those funds continue to accrue
interest as if they were

received on the next Business Day. Agent shall pay to each Lender any payment to
which that

Lender is entitled on the same day Agent receives the funds from Borrower if
Agent receives the

payment before 12:00 noon, and otherwise before 12:00 noon on the following
Business Day. If and

to the extent that Agent does not make payments to Lenders when due, unpaid
amounts shall accrue

interest at the Federal Funds Rate from the due date until (but not including)
the payment date.

3.2 Interest and Principal Payments; Voluntary Commitment Reductions.

(a) Accrued interest on each LIBOR Loan is due and payable on the last day of
its

Interest Period. If any Interest Period with respect to a LIBOR Loan is a period
greater than three

months, then accrued interest is also due and payable on the date three months
after the

commencement of the Interest Period. Accrued interest on each Base Rate Loan is
due and payable

on each Quarterly Date and on the Termination Date.

(b) The Principal Debt is due and payable on the Termination Date.

(c) If the Commitment Usage ever exceeds the Total Commitment, Borrower shall
pay

Principal Debt in at least the amount of that excess, together with (i) all
accrued and unpaid interest

on the principal amount so paid and (ii) any resulting Funding Loss.

(d) Borrower may voluntarily reduce or prepay the Facility as follows:

(i) Without premium or penalty and upon giving at least two Business Days

prior written and irrevocable notice to Agent, Borrower may terminate all or
reduce part of

the unused portion of the Total Commitment. Each partial reduction (unless the
remaining

portion of such commitment is less) must be in an amount of not less than
$5,000,000 or a

greater integral multiple of $1,000,000, and shall be Pro Rata among all
Lenders. Once

terminated or reduced, such commitments may not be reinstated or increased.

(ii) Borrower may voluntarily prepay all or any part of the Principal Debt at
any

time without premium or penalty, subject to the following conditions:

(A) Agent must receive Borrower's written payment notice (which shall

specify (1) the payment date, and (2) the Type and amount of the Loan(s) to be

paid; such notice shall constitute an irrevocable and binding obligation of
Borrower

to make a payment on the designated date) by 1:00 p.m. on (x) the third Business

Day preceding the date of payment of a LIBOR Loan and (y) the date of payment

of a Base Rate Loan;

(B) each partial payment must be in a minimum amount of at least

$500,000 if a Base Rate Loan or $1,000,000 if a LIBOR Loan or, in either case, a

greater integral multiple of $100,000;

(C) all accrued interest on the principal amount so to be prepaid must

also be paid in full on the date of payment; and

(D) Borrower shall pay any related Funding Loss upon demand.

3.3 Interest Options. Except where specifically otherwise provided, Loans bear
interest at an

annual rate equal to the lesser of (a) the Base Rate plus the Applicable Margin
or LIBOR plus the

Applicable Margin for the Interest Period, if any, selected by Borrower (in each
case as designated or

deemed designated by Borrower), as the case may be, and (b) the Maximum Rate.
Each change in the Base

Rate and Maximum Rate is effective, without notice to Borrower or any other
Person, upon the effective date

of change.

3.4 Quotation of Rates. A Responsible Officer of Borrower may call Agent before
delivering

a Loan Request to receive an indication of the interest rates then in effect,
but the indicated rates do not bind

Agent or Lenders or affect the interest rate that is actually in effect when
Borrower delivers its Loan Request

or on the Loan Date.

3.5 Default Rate. If permitted by Law, all past-due Principal Debt, Borrower's
past-due

payment and reimbursement obligations in connection with L/Cs, and past-due
interest accruing on any of the

foregoing bears interest from the date due (stated or by acceleration) at the
Default Rate until paid, regardless

whether payment is made before or after entry of a judgment.

3.6 Interest Recapture. If the designated interest rate applicable to any Loan
exceeds the

Maximum Rate, the interest rate on that Loan is limited to the Maximum Rate, but
any subsequent reductions

in the designated rate shall not reduce the interest rate thereon below the
Maximum Rate until the total

amount of accrued interest equals the amount of interest that would have accrued
if that designated rate had

always been in effect. If at maturity (stated or by acceleration), or at final
payment of the Notes, the total

interest paid or accrued is less than the interest that would have accrued if
the designated rates had always

been in effect, then, at that time and to the extent permitted by Law, Borrower
shall pay an amount equal to

the difference between (a) the lesser of the amount of interest that would have
accrued if the designated

rates had always been in effect and the amount of interest that would have
accrued if the Maximum Rate

had always been in effect, and (b) the amount of interest actually paid or
accrued on the Notes.

3.7 Interest Calculations.

(a) Interest will be calculated on the basis of actual number of days elapsed
(including

the first day, but excluding the last day), but computed as if each calendar
year consisted of 360 days

for LIBOR Loans (unless the calculation would result in an interest rate greater
than the Maximum

Rate, in which event interest will be calculated on the basis of a year of 365
or 366 days, as the case

may be), and 365 or 366 days, as the case may be, for Base Rate Loans. All
interest rate

determinations and calculations by Agent are conclusive and binding absent
manifest error.

(b) The provisions of this Agreement relating to calculation of the Base Rate
and

LIBOR are included only for the purpose of determining the rate of interest or
other amounts to be

paid under this Agreement that are based upon those rates. Each Lender may fund
and maintain its

funding of all or any part of each Loan as it selects.

3.8 Maximum Rate. Regardless of any provision contained in any Loan Paper or any
document

related thereto, no Lender is entitled to contract for, charge, take, reserve,
receive or apply, as interest on all

or any part of the Obligation any amount in excess of the Maximum Rate, and, if
Lenders ever do so, then

any excess shall be treated as a partial payment of principal and any remaining
excess shall be refunded to

Borrower. In determining if the interest paid or payable exceeds the Maximum
Rate, Borrower and Lenders

shall, to the maximum extent permitted under applicable Law, (a) treat all Loans
as but a single extension of

credit (and Lenders and Borrower agree that is the case and that provision in
this Agreement for multiple

Loans is for convenience only), (b) characterize any nonprincipal payment as an
expense, fee or premium

rather than as interest, (c) exclude voluntary payments and their effects, and
(d) amortize, prorate, allocate

and spread the total amount of interest throughout the entire contemplated term
of the Obligation. However,

if the Obligation is paid in full before the end of its full contemplated term,
and if the interest received for its

actual period of existence exceeds the Maximum Amount, Lenders shall refund any
excess (and Lenders

shall not, to the extent permitted by Law, be subject to any penalties provided
by any Laws for contracting

for, charging, taking, reserving or receiving interest in excess of the Maximum
Amount).

3.9 Interest Periods. When Borrower requests any LIBOR Loan, Borrower may elect
the

applicable interest period (each an "Interest Period"), which may be, at
Borrower's option, one, two, three

or six months, subject to the following conditions: (a) the initial LIBOR
Interest Period commences on the

applicable Loan Date or conversion date, and each subsequent LIBOR Interest
Period commences on the

day when the next preceding applicable Interest Period expires; (b) if any LIBOR
Interest Period begins on

a day for which no numerically corresponding Business Day in the calendar month
at the end of the Interest

Period exists, then the Interest Period ends on the last Business Day of that
calendar month; (c) no LIBOR

Interest Period for any portion of Principal Debt may extend beyond the
scheduled payment date for that

portion of Principal Debt; and (d) no more than 20 LIBOR Interest Periods may be
in effect at one time.

3.10 Conversions. Subject to the dollar limits and denominations of Section 2.1
and the limitations

on LIBOR Interest Periods of Section 3.9, Borrower may (a) convert all or part
of a LIBOR Loan on the

last day of the applicable Interest Period to a Base Rate Loan, (b) convert all
or part of a Base Rate Loan

at any time to a LIBOR Loan, and (c) elect a new Interest Period for all or part
of a LIBOR Loan, in each

case by delivering a Conversion Request to Agent no later than 1:00 p.m. on the
third Business Day before

the conversion date or the last day of the Interest Period, as the case may be
(for conversion to a LIBOR

Loan or election of a new Interest Period), and no later than 1:00 p.m. one
Business Day before the last day

of the Interest Period (for conversion to a Base Rate Loan). Absent Borrower's
notice of conversion or

election of a new Interest Period, a LIBOR Loan shall be converted to a Base
Rate Loan when the applicable

Interest Period expires.

3.11 Order of Application. If no Default or Potential Default exists, any
payment shall be applied

to the Obligation in the order and manner as Borrower directs. If a Default or
Potential Default exists or if

Borrower fails to give direction, any other payment (including proceeds from the
exercise of any Rights

hereunder) shall be applied in the following order (a) to all fees, expenses and
Funding Losses for which

Agent or Lenders have not been paid or reimbursed in accordance with the Loan
Papers (and if such

payment is less than all unpaid or unreimbursed fees and expenses, then the
payment shall be paid against

unpaid and unreimbursed fees and expenses in the order of incurrence or due
date), (b) to accrued interest

on the Principal Debt, and (c) ratably to the remainder of the Obligation.

3.12 Sharing of Payments, Etc.. If any Lender (a "benefitted Lender") shall at
any time receive

any payment of all or part of the Loans owing to it, or interest thereon, or
receive any Collateral in respect

thereof (whether voluntarily or involuntarily, by set-off, or otherwise), in a
greater proportion than any such

payment to or Collateral received by any other Lender, if any, in respect of
such other Lender's Loans owing

to it, or interest thereon, such benefitted Lender shall purchase for cash from
the other Lenders a participating

interest in such portion of each such other Lender's Loans owing to it, or shall
provide such other Lenders

with the benefits of any such Collateral, or the proceeds thereof, as shall be
necessary to cause such

benefitted Lender to share the excess payment or benefits of such Collateral or
proceeds ratably with each

of the Lenders; provided, however, that if all or any portion of such excess
payment or benefits is thereafter

recovered from such benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits

returned, to the extent of such recovery, but without interest. Borrower agrees
that any Lender so purchasing

a participation from a Lender pursuant to this Section 3.12 may, to the fullest
extent permitted by Law,

exercise all of its Rights of payment (including the Right of set-off) with
respect to such participation as fully

as if such Person were the direct creditor of Borrower in the amount of such
participation.

3.13 Booking Loans. To the extent permitted by Law, any Lender may make, carry
or transfer

its Loans at, to, or for the account of any of its branch offices or the office
of any of its Affiliates. However,

no Affiliate is entitled to receive any greater payment under Section 3.15 than
the transferor Lender would

have been entitled to receive with respect to those Loans.

3.14 Basis Unavailable or Inadequate for LIBOR. If, on or before any date when
LIBOR is to

be determined for a Loan, Agent or any Lender determines (and Required Lenders
agree with that

determination) that the basis for determining the applicable rate is not
available or that the resulting rate does

not accurately reflect the cost to Lenders of making or converting Loans at that
rate for the applicable

Interest Period, then Agent shall promptly notify Borrower and Lenders of that
determination (which is

conclusive and binding on Borrower absent manifest error) and the applicable
Loan shall bear interest at the

sum

of the Base Rate plus the Applicable Margin. Until Agent notifies Borrower that
those circumstances

no longer exist, Lenders' commitments under this Agreement to make, or to
convert to, LIBOR Loans are

suspended.

3.15 Additional Costs.

(a) With respect to any LIBOR Loan, (i) if any present or future Law imposes,
modifies,

or deems applicable (or if compliance by any Lender with any requirement of any
Tribunal results

in) any Reserve Requirement, and if (ii) those reserves reduce any sums
receivable by that Lender

under this Agreement or increase the costs incurred by that Lender in advancing
or maintaining any

portion of any LIBOR Loan, then (iii) that Lender (through Agent) shall deliver
to Borrower a

certificate setting forth in reasonable detail the calculation of the amount
necessary to compensate

it for its reduction or increase (which certificate is conclusive and binding
absent manifest error), and

(iv) Borrower shall promptly pay that amount to that Lender upon demand. This
paragraph shall

survive the satisfaction and payment of the Obligation and termination of this
Agreement. This

paragraph may be invoked by a Lender only if such Lender is generally invoking
similar provisions

against other Persons to which such Lender lends funds pursuant to facilities
similar to the Facility.

(b) With respect to any Loan or L/C, if any present or future Law regarding
capital

adequacy or compliance by Agent (as issuer of L/Cs) or any Lender with any
request, directive or

requirement now existing or hereafter imposed by any Tribunal regarding capital
adequacy, or any

change in its written policies or in the risk category of this transaction,
reduces the rate of return on

its capital as a consequence of its obligations under this Agreement to a level
below that which it

otherwise could have achieved (taking into consideration its policies with
respect to capital adequacy)

by an amount deemed by it to be material (and it may, in determining the amount,
utilize reasonable

assumptions and allocations of costs and expenses and use any reasonable
averaging or attribution

method), then (unless the effect is already reflected in the rate of interest
then applicable under this

Agreement) Agent or that Lender (through Agent) shall notify Borrower and
deliver to Borrower a

certificate setting forth in reasonable detail the calculation of the amount
necessary to compensate

it (which certificate is conclusive and binding absent manifest error), and
Borrower shall promptly

pay that amount to Agent or that Lender upon demand. This paragraph shall
survive the satisfaction

and payment of the Obligation and termination of this Agreement. This paragraph
may be invoked

by a Lender only if such Lender is generally invoking similar provisions against
other Persons to

which such Lender lends funds pursuant to facilities similar to the Facility.

(c) Any Taxes payable by Agent or any Lender or ruled (by a Tribunal) payable by

Agent or any Lender in respect of any Loan Paper or any document related thereto
shall, if permitted

by Law, be paid by Borrower, together with interest and penalties, if any (other
than for Taxes

imposed on or measured by the overall net income of Agent or that Lender and
interest and penalties

incurred as a result of the gross negligence or willful misconduct of Agent or
any Lender). Agent

or that Lender (through Agent) shall notify Borrower and deliver to Borrower a
certificate setting

forth in reasonable detail the calculation of the amount of payable Taxes, which
certificate is

conclusive and binding (absent manifest error), and Borrower shall promptly pay
that amount to

Agent for its account or the account of that Lender, as the case may be. If
Agent or that Lender

subsequently receives a refund of the Taxes paid to it by Borrower, then the
recipient shall promptly

pay the refund to Borrower.

3.16 Change in Laws. If any Law makes it unlawful for any Lender to make or
maintain LIBOR

Loans, then that Lender shall promptly notify Borrower and Agent, and (a) as to
undisbursed funds, that

requested Loan shall be made as a Base Rate Loan, and (b), as to any outstanding
Loan, (i) if maintaining

the Loan until the last day of the applicable Interest Period is unlawful, the
Loan shall be converted to a Base

Rate Loan as of the date of notice, and Borrower shall pay any related Funding
Loss, or (ii) if not prohibited

by Law, the Loan shall be converted to a Base Rate Loan as of the last day of
the applicable Interest Period,

or (iii) if any conversion will not resolve the unlawfulness, Borrower shall
promptly pay the Loan, without

penalty, together with any related Funding Loss. Concurrently with any payment
contemplated by clause (iii)

of the immediately preceding sentence, Borrower shall borrow a Base Rate Loan in
an equal principal amount

from such Lender (on which interest and principal shall be payable
contemporaneously with the related

LIBOR Loans of the other Lenders) and such Lender shall fund such Base Rate
Loan.

3.17 Funding Loss. Borrower agrees to indemnify each Lender against, and pay to
it upon

demand, any Funding Loss of that Lender. When any Lender demands that Borrower
pay any Funding

Loss, that Lender shall deliver to Borrower and Agent a certificate setting
forth in reasonable detail the basis

for imposing Funding Loss and the calculation of the amount, which calculation
is conclusive and binding

absent manifest error. The provisions of and undertakings and indemnification
set forth in this paragraph shall

survive the satisfaction and payment of the Obligation and termination of this
Agreement.

3.18 Foreign Lenders. Each Lender that is organized under the Laws of any
jurisdiction other

than the U.S. or any State thereof (a) represents to Agent and Borrower that (i)
no Taxes are required to

be withheld by Agent or Borrower with respect to any payments to be made to it
in respect of the Obligation

and (ii) it has furnished to Agent and Borrower two duly completed copies of
U.S. Internal Revenue Service

Form W-8BEN or Form W-8ECI (wherein it claims entitlement to complete exemption
from U.S. federal

withholding tax on all interest payments under the Loan Papers), or any other
successor tax form acceptable

to Agent and Borrower, and (b) covenants to (i) provide Agent and Borrower a new
tax form upon the

expiration, inaccuracy or obsolescence of any previously delivered form
according to, and to the extent

permitted by, Law, duly executed and completed by it, and (ii) comply from time
to time with all Laws with

regard to the withholding tax exemption. If any of the foregoing is not true or
the applicable forms are not

provided, then Borrower and Agent (without duplication) may deduct and withhold
from interest payments

under the Loan Papers U.S. federal income tax at the full rate applicable under
the Code. In addition,

Borrower shall not be required to make any payments contemplated by Section
3.15(c) to the extent that

such payments would not have been payable if such Lender had furnished the
appropriate form (properly and

accurately completed in all respects) which it was otherwise required to furnish
in accordance with this

Section 3.18

.

3.19 Affected Lender's Obligation to Mitigate. Each Lender agrees that, as
promptly as

practicable after it becomes aware of the occurrence of an event or the
existence of a condition which would

entitle it to exercise any rights under Sections 3.15 or 3.16, it shall use
commercially reasonable efforts to

make, fund or maintain the affected Loans of such Lender through another lending
office of such Lender if

(a) as a result thereof the additional moneys which would otherwise be required
to be paid in respect of such

Loans of such Lender would be reduced or the illegality or other adverse
circumstances which would

otherwise affect such Loans of such Lender would cease to exist or the increased
cost which would

otherwise be required to be paid in respect of such Loans would be reduced and
(b) the making, funding or

maintaining of such Loans through such other lending office would not otherwise
materially adversely affect

such Loans or such Lender.

3.20 Replacement Lender. In the event Borrower becomes obligated to pay any
additional

amounts to any Lender pursuant to Sections 3.15 or 3.16 as a result of any event
or condition described in

any of such Sections, then, unless such Lender has theretofore taken steps to
remove or cure, and has

removed or cured, the conditions creating the cause of such obligation to pay
such additional amounts,

Borrower may designate a substitute lender acceptable to Agent (such lender
herein called a "Replacement

Lender") to purchase such Lender's rights and obligations with respect to its
entire Pro Rata Part hereunder

with respect to the Facility as a whole, without recourse to or warranty by, or
expense to, such Lender in

accordance with Section 14.12(c) for a purchase price equal to the outstanding
principal amounts payable

to such Lender with respect to such Pro Rata Part, plus any accrued and unpaid
interest and accrued and

unpaid fees and charges in respect of such Pro Rata Part and on other terms
reasonably satisfactory to

Agent. Upon such purchase by the Replacement Lender and payment of all other
amounts owing to the

Lender being replaced hereunder, such Lender shall no longer be a party hereto
or have any rights or

obligations hereunder, and the Replacement Lender shall succeed to the rights
and obligations of such Lender

with respect to such Pro Rata Part hereunder.

SECTION 4 FEES

.

4.1 Treatment of Fees. The fees described in this Section 4 (a) are not
compensation for the

use, detention, or forbearance of money, (b) are in addition to, and not in lieu
of, interest and expenses

otherwise described in this Agreement, (c) are payable in accordance with
Section 3.1(b), (d) are nonrefundable,

and (e) to the fullest extent permitted by Law, bear interest, if not paid when
due, at the Default

Rate.

4.2 Fee Letter. Borrower shall pay the fees described in the letter agreements
between

Borrower and Agent dated November 19, 1997, April 30, 1999 and August 29, 2001.

4.3 L/C Fees.

(a) L/C Fees. Borrower shall pay to Agent for the account of each Lender in

accordance with its Pro Rata Part (i) a fee for each commercial L/C equal to 1/8
of 1% per annum

times the actual daily maximum amount available to be drawn under each such L/C,
and (ii) a fee for

each standby L/C equal to the Applicable Margin for LIBOR Loans times the actual
daily maximum

amount available to be drawn under each such L/C. Such fee for each L/C shall be
due and payable

quarterly in arrears on each Quarterly Date, commencing with the first such date
to occur after the

issuance of such L/C, and on the expiration date of such L/C. If there is any
change in the

Applicable Margin during any quarter, the actual daily amount of each standby
L/C shall be computed

and multiplied by the Applicable Margin separately for each period during such
quarter that such

Applicable Margin was in effect.

(b) Fronting Fee and Documentary and Processing Charges Payable to Agent. The

Borrower shall pay directly to the Agent for its own account a fronting fee in
an amount (i) with

respect to each commercial L/C, equal to 1/8 of 1% of the amount of such L/C,
due and payable

upon the issuance thereof, and (ii) with respect to each standby L/C, equal to
1/8 of 1% per annum

on the daily maximum amount available to be drawn thereunder, due and payable
quarterly in arrears

on each Quarterly Date, commencing with the first such date to occur after the
issuance of such L/C,

and on the expiration date of such L/C. In addition, the Borrower shall pay
directly to the Agent for

its own account the customary issuance, presentation, amendment and other
processing fees, and

other standard costs and charges, of the Agent relating to letters of credit as
from time to time in

effect. Such fees and charges are due and payable on demand and are
nonrefundable.

(c) Calculation of L/C Fees. Each L/C (other than a fee payable upon the
issuance of

the L/C) shall be calculated on the basis of a year of 360 days and the actual
number of days

elapsed.

4.4 Commitment Fee. Borrower shall pay to Agent for the ratable account of
Lenders a

commitment fee, payable as it accrues on each Quarterly Date and on the
Termination Date, equal to the

Applicable Percentage (per annum), of the amount by which the Total Commitment
exceeds the average daily

Commitment Usage, in each case during the calendar quarter (or portion thereof)
ending on such date,

calculated on the basis of the actual number of days elapsed (including the
first day, but excluding the last

day) in a calendar year of 365 or 366 days, as the case may be.

SECTION 5 GUARANTY AND SECURITY

.

5.1 Guaranty. Full and complete payment of the Obligation under the Loan Papers
shall be

guaranteed in accordance with a Guaranty executed by each Restricted Company
(other than Borrower).

5.2 Collateral. Full and complete payment of the Obligation under the Loan
Papers shall be

secured by (collectively, the "Collateral") (a) all capital stock or other
equity interests issued to a Restricted

Company by any Restricted Subsidiary organized under the laws of the United
States (or any state thereof),

(b) 65% of all capital stock or other equity interests issued to a Restricted
Company by any other Restricted

Subsidiary, and (c) a pledge by Borrower of its membership interests in SSI.

5.3 Additional Collateral and Guaranties. Agent may, without notice or demand
and without

affecting any Person's obligations under the Loan Papers, from time to time (a)
receive and hold additional

collateral from any Person for the payment of all or any part of the Obligation
and exchange, enforce or

release all or any part of that collateral (in accordance with Section 13.9(e)),
and (b) accept and hold any

endorsement or guaranty of payment of all or any part of the Obligation and
release any endorser or

guarantor, or any Person who has given any other security for the payment of all
or any part of the Obligation,

or any other Person in any way obligated to pay all or any part of the
Obligation (in accordance with Section

13.9(f)).

5.4 Additional Documents or Information. Each Company will execute, or cause to
be executed,

financing statements, stock powers, or other writings in the form and content
reasonably required by Agent.

Borrower shall pay all costs of (a) filing any financing, continuation,
amendment or terminations statements,

or (b) other actions taken by Agent relating to the Collateral, including,
without limitation, costs and expenses

of any Lien search required by Agent.

SECTION 6 CONDITIONS PRECEDENT

.

6.1 Initial Advance. Lenders will not be obligated to fund the initial Loan, and
Agent will not be

obligated to issue the initial L/C, unless Agent has received each of the items
in (a) - (g) and the conditions

in items (h) - (i) have been satisfied:

(a) the Promissory Notes;

(b) a Guaranty executed by each Restricted Company (other than Borrower) or, for

any Restricted Company which has previously executed a Guaranty, at Agent's
election, a consent

or ratification by such Restricted Company of its existing Guaranty;

(c) a Pledge Agreement executed by the holder of the capital stock or other
equity

interests of each Restricted Company, other than those set out in the
Post-Closing Agreement,

pledging that capital stock or those interests, and a Pledge Agreement (or a
ratification agreement)

executed by Borrower in respect of its interest in SSI;

(d) an Officers' Certificate for each Restricted Company, relating to articles
of

incorporation or organization, bylaws, regulations, or agreements, resolutions,
and incumbency;

(e) Certificates of Existence and Good Standing (Account Status) for each
Restricted

Company from its state of organization and each other state where it does
business, each dated after

September 15, 2001;

(f) Legal opinions of Martha Dugan Rehm, General Counsel of VRI, and Cahill
Gordon

& Reindel, special New York counsel to Borrower;

(g) Borrower's audited consolidated and consolidating Financial Statements for
2001;

(h) Payment in full of all amounts then due Agent under Section 8.7 or the fee
letters

described in Section 4; and

(i) Since July 31, 2001, no change has occurred in the business, assets,
liabilities,

operations, conditions (financial or otherwise) or prospects of the Companies
and no Litigation or

other proceeding or investigation in respect of any Company has been initiated
or threatened, which,

in either case, would constitute a Material Adverse Event.

6.2 Each Advance. Lenders will not be obligated to fund any Loan (including the
initial Loans),

continue any LIBOR Loan (as opposed to continuing any Base Rate Loan), or
convert any Base Rate Loan

into a LIBOR Loan (as opposed to converting any LIBOR Loan into a Base Rate
Loan), and Agent will not

be obligated to issue (as opposed to extend) any L/C (including the initial
L/Cs), unless on the applicable date

(and after giving effect to the requested Loan or L/C): (a) Agent shall have
timely received a Loan Request

or L/C Request (together with the applicable L/C Agreement), as the case may be;
(b) Agent shall have

received any applicable L/C fee; (c) all of the representations and warranties
of the Companies in the Loan

Papers are true and correct in all material respects (unless they speak to a
specific date or are based on facts

which have changed by transactions contemplated or permitted by this Agreement);
(d) no Material Adverse

Event, Default or Potential Default exists; and (e) the funding of the Loan or
issuance of the L/C is permitted

by Law. Upon Agent's reasonable request, Borrower shall deliver to Agent
evidence substantiating any of

the matters in the Loan Papers that are necessary to enable Borrower to qualify
for the Loan or L/C. Each

condition precedent in this Agreement is material to the transactions
contemplated by this Agreement, and

time is of the essence with respect to each condition precedent. Subject to the
prior approval of Required

Lenders, Lenders may fund any Loan, and Agent may issue any L/C, without all
conditions being satisfied,

but, to the extent permitted by Law, that funding and issuance shall not be
deemed to be a waiver of the

requirement that each condition precedent be satisfied as a prerequisite for any
subsequent funding or

issuance, unless Required Lenders specifically waive each item in writing.

SECTION 7 REPRESENTATIONS AND WARRANTIES

. Borrower represents and warrants to

Agent and Lenders as follows:

7.1 Regulation U. No Company is engaged principally, or as one of its important
activities, in the

business of extending credit for the purpose of purchasing or carrying any
"margin stock" within the meaning

of Regulations T or U of the Board of Governors of the Federal Reserve System,
as amended.

7.2 Corporate Existence, Good Standing, Authority and Compliance. Each Company
is duly

organized, validly existing and in good standing under the Laws of the
jurisdiction in which it is incorporated

or organized as identified on Schedule 7.2 (or any revised Schedule 7.2
delivered by Borrower to Lenders

pursuant to Section 8.11, 9.10 or 9.11). Except where failure is not a Material
Adverse Event, each

Restricted Company (a) is duly qualified to transact business and is in good
standing as a foreign corporation

or other entity in each jurisdiction where the nature and extent of its business
and properties require due

qualification and good standing as identified on Schedule 7.2 (or any such
revised Schedule 7.2), and (b)

possesses all requisite authority, permits and power to conduct its business as
is now being, or is contemplated

by this Agreement to be, conducted.

7.3 Subsidiaries. VRI has no Subsidiaries, other than as disclosed on Schedule
7.2 (or on any

revised Schedule 7.2 delivered by Borrower to Lenders pursuant to Section 8.11,
9.10 or 9.11). All of the

outstanding shares of capital stock (or similar voting interests) of the
Companies are duly authorized, validly

issued, fully paid and nonassessable. All of the outstanding shares of capital
stock of the Companies other

than VRI are owned of record and beneficially as set forth thereon, free and
clear of any Liens, restrictions,

claims or Rights of another Person, other than Permitted Liens, and are not
subject to any warrant, option

or other acquisition Right of any Person or subject to any transfer restriction,
other than restrictions imposed

by securities Laws and general corporate Laws.

7.4 Authorization and Contravention. The execution and delivery by each Company
of each

Loan Paper or related document to which it is a party and the performance by it
of its obligations thereunder

(a) are within its organizational power, (b) have been duly authorized by all
necessary action, (c) require no

action by or filing with any Tribunal (other than any action or filing that has
been taken or made on or before

the date of this Agreement), (d) do not violate any provision of its
organizational documents, (e) do not violate

any provision of Law or any order of any Tribunal applicable to it, other than
violations that individually or

collectively are not a Material Adverse Event, (f) do not violate any Material
Agreements to which it is a

party, or (g) do not result in the creation or imposition of any Lien on any
asset of any Company.

7.5 Binding Effect. Upon execution and delivery by all parties thereto, each
Loan Paper which

is a contract will constitute a legal and binding obligation of each Company
party thereto, enforceable against

it in accordance with its terms, except as enforceability may be limited by
applicable Debtor Relief Laws and

general principles of equity.

7.6 Financial Statements; Fiscal Year. The Current Financials were prepared in
accordance with

GAAP and, together with the notes thereto, present fairly, in all material
respects, the consolidated financial

32 ::ODMA\PCDOCS\DOCS\409767\11

condition, results of operations, and cash flows of the Companies as of, and for
the portion of the fiscal year

ending on the date or dates thereof (subject only to normal year-end
adjustments). Except for transactions

directly related to, or specifically contemplated by, the Loan Papers, no
subsequent material adverse changes

have occurred in the consolidated financial condition of the Companies from that
shown in the Current

Financials. The fiscal year of each Company ends on July 31.

7.7 Litigation. Except as disclosed on Schedule 7.7 (or on any revised Schedule
7.7 delivered

by Borrower to Lenders), (a) no Company (other than as a creditor or claimant)
is subject to, or aware of

the threat of, any Litigation that is reasonably likely to be determined
adversely to any Company and, if so

adversely determined, is a Material Adverse Event, (b) no outstanding or unpaid
judgments against any

Company exist, and (c) no Company is a party to, or bound by, any judicial or
administrative order, judgment,

decree or consent decree relating to any past or present practice, omission,
activity or undertaking which

constitutes a Material Adverse Event.

7.8 Taxes. All Tax returns of each Company required to be filed have been filed
(or extensions

have been granted) before delinquency, other than returns for which the failure
to file is not a Material

Adverse Event, and all Taxes shown as due and payable in such returns have been
paid before delinquency,

other than

Taxes for which the criteria for Permitted Liens (as specified in clause (i) of
the definition of

"Permitted Liens") have been satisfied or for which nonpayment is not a Material
Adverse Event.

7.9 Environmental Matters. Except as disclosed on Schedule 7.9 (or any revised
Schedule 7.9

delivered by Borrower to Lenders) and except for conditions, circumstances or
violations that are not,

individually or in the aggregate, a Material Adverse Event, no Company (a) knows
of any environmental

condition or circumstance adversely affecting any Company's properties or
operations, (b) has, to its

knowledge, received any written report of any Company's violation of any
Environmental Law, or (c) knows

that any Company is under any obligation imposed by a Tribunal to remedy any
violation of any Environmental

Law. Except as disclosed on Schedule 7.9 (or any such revised Schedule 7.9),
each Company believes that

its properties and operations do not violate any Environmental Law, other than
violations that are not,

individually or in the aggregate, a Material Adverse Event. No facility of any
Company is used for, or to the

knowledge of any Company has been used for, treatment or disposal of any
Hazardous Substance or storage

of Hazardous Substances, other than in material compliance with applicable
Environmental Laws.

7.10 Employee Plans. Except where occurrence or existence is not a Material
Adverse Event,

(a) no Employee Plan has incurred an "accumulated funding deficiency" (as
defined in section 302 of

ERISA or section 412 of the Code), (b) no Company has incurred liability under
ERISA to the PBGC in

connection with any Employee Plan (other than required insurance premiums, all
of which have been paid),

(c) no Company has withdrawn in whole or in part from participation in a
Multiemployer Plan, (d) no

Company has engaged in any "prohibited transaction" (as defined in section 406
of ERISA or section 4975

of the Code), and (e) no "reportable event" (as defined in section 4043 of
ERISA) has occurred with

respect to an Employee Plan, excluding events for which the notice requirement
is waived under applicable

PBGC regulations.

7.11 Properties and Liens.

(a) Each Company has good and marketable title to all its material property
reflected

on the Current Financials (other than for property that is obsolete or that has
been disposed of in the

ordinary course of business or, as otherwise permitted by Section 9.10 or
Section 9.11).

(b) Except for Permitted Liens, no Lien exists on any property of any Company

(including, without limitation, the Forest Service Permits and the Water
Rights), and the execution,

delivery, performance or observance of the Loan Papers will not require or
result in the creation of

any Lien on any Company's property.

(c) As of the date hereof, the Forest Service Permits constitute all of the
material

licenses, permits or leases from the U.S. held by the Companies for use in
connection with their

respective skiing businesses.

(d) Each of the Water Rights is, to the knowledge of the Companies, in full
force and

effect and, to the knowledge of the Companies, there is no material default or
existing condition

which with the giving of notice or the passage of time or both would cause a
material default under

any Water Right that is material to the operation of the Companies. Subject to
the available supply

and to the terms and conditions of the applicable decrees, the Companies' Water
Rights provide a

dependable, legal and physical snowmaking, irrigation and domestic water supply
for the operation

of the Companies' businesses.

7.12 Government Regulations. No Company is subject to regulation under the
Investment

Company Act of 1940, as amended, or the Public Utility Holding Company Act of
1935, as amended.

7.13 Transactions with Affiliates. Except as set forth in Schedule 7.13 and
except for other

transactions which do not, in the aggregate, cost the Restricted Companies more
than $2,000,000 in any fiscal

year, no Restricted Company is a party to any transaction with any Affiliate
(other than another Restricted

Company), except upon fair and reasonable terms not materially less favorable
than it could obtain or could

become entitled to in an arm's-length transaction with a Person that was not its
Affiliate.

7.14 Debt. No Company is an obligor on any Debt, other than Permitted Debt.

7.15 Material Agreements. All Material Agreements to which any Restricted
Company is a party

are in full force and effect, and no default or potential default exists on the
part of any Restricted Company

thereunder that is a Material Adverse Event.

7.16 Labor Matters. There are no binding agreements of any type with any labor
union, labor

organization, collective bargaining unit or employee group to which any Company
is bound, other than Vail

Summit Resorts' collective bargaining agreements with the Breckenridge
Professional Ski Patrol Association

and Keystone Professional Ski Patrol Association and agreements which may be
entered into after the date

of this Agreement which do not constitute a Material Adverse Event. No actual or
threatened strikes, labor

disputes, slow downs, walkouts, or other concerted interruptions of operations
by the employees of any

Company that constitute a Material Adverse Event exist. Hours worked by and
payment made to employees

of the Companies have not been in violation of the Fair Labor Standards Act, as
amended, or any other

applicable Law dealing with labor matters, other than any violations,
individually or collectively, that are not

a Material Adverse Event. All payments due from any Company for employee health
and welfare insurance

have been paid or accrued as a liability on its books, other than any
nonpayments that are not, individually

or collectively, a Material Adverse Event.

7.17 Solvency. On each Loan Date, Borrower is, and after giving effect to the
requested Loan

will be, Solvent.

7.18 Intellectual Property. Each Company owns (or otherwise holds rights to use)
all material

Intellectual Property, licenses, permits and trade names necessary to continue
to conduct its businesses as

presently conducted by it and proposed to be conducted by it immediately after
the date of this Agreement.

To its knowledge, each Company is conducting its business without infringement
or claim of infringement of

any license, patent, copyright, service mark, trademark, trade name, trade
secret or other intellectual property

right of others, other than any infringements or claims that, if successfully
asserted against or determined

adversely to any Company, would not, individually or collectively, constitute a
Material Adverse Event. To

the knowledge of any Company as of the date hereof, no infringement or claim of
infringement by others of

any material Intellectual Property, license, permit, trade name, or other
intellectual property of any Company

exists, other than claims which will not cause a Material Adverse Event.

7.19 Full Disclosure. Each material fact or condition relating to the Loan
Papers or the financial

condition, business or property of any Company has been disclosed to Agent. All
information furnished by

any Company to Agent in connection with the Loan Papers on or before the date of
this Agreement was,

taken as a whole, true and accurate in all material respects or based on
reasonable estimates on the date the

information is stated or certified.

SECTION 8 AFFIRMATIVE COVENANTS

. So long as Lenders are committed to fund Loans and

Agent is committed to issue L/Cs under this Agreement, and thereafter until the
Obligation is paid in full,

Borrower covenants and agrees as follows:

8.1 Items to be Furnished. Borrower shall cause the following to be furnished to
each Lender:

(a) With respect to each fiscal year of the Companies:

(i) Promptly after preparation, unaudited Financial Statements showing the

consolidated financial condition and results of operations of the Companies as
of the last day

of such fiscal year and for such fiscal year, accompanied by a Compliance
Certificate with

respect to such Financial Statements (for purposes of adjusting the Applicable
Margin and

the Applicable Percentage in accordance with the definitions of such terms); and

(ii) Promptly after preparation, and no later than 105 days after the last day
of

each fiscal year of the Companies, Financial Statements showing the consolidated
financial

condition and results of operations of the Companies as of, and for the year
ended on, that

last day, accompanied by: (A) the unqualified opinion of a firm of
nationally-recognized

independent certified public accountants, based on an audit using generally
accepted auditing

standards, that the Financial Statements were prepared in accordance with GAAP
and

present fairly, in all material respects, the consolidated financial condition
and results of

operations of the Companies, (B) any management letter prepared by the
accounting firm

delivered in connection with its audit, (C) a certificate from the accounting
firm to Agent

indicating that during its audit it obtained no knowledge of any Default or
Potential Default

or, if it obtained knowledge, the nature and period of existence thereof, and
(D) a

Compliance Certificate with respect to the Financial Statements.

(b) Promptly after preparation, and no later than 60 days after the last day of
each fiscal

quarter of the Companies, Financial Statements showing the consolidated
financial condition and

results of operations of the Companies for the fiscal quarter and for the period
from the beginning

of the current fiscal year to the last day of the fiscal quarter, accompanied by
a Compliance

Certificate with respect to the Financial Statements.

(c) Promptly after receipt, a copy of each interim or special audit report and

management letter issued by independent accountants with respect to any Company
or its financial

records.

(d) Notice, promptly after any Company knows or has reason to know, of (i) the

existence and status of any Litigation that, if determined adversely to any
Company, would be a

Material Adverse Event, (ii) any change in any material fact or circumstance
represented or

warranted by any Company in connection with any Loan Paper, (iii) the receipt by
any Company of

notice of any violation or alleged violation of any Environmental Law or ERISA
(which individually

or collectively with other violations or allegations is reasonably likely to
constitute a Material Adverse

Event), or (iv) a Default or Potential Default, specifying the nature thereof
and what action the

Companies have taken, are taking, or propose to take.

(e) Promptly after filing, copies of all material reports or filings filed by or
on behalf of

any Company with any securities exchange or the Securities and Exchange
Commission (including,

without limitation, copies of each Form 10-K, Form 10-Q and Form S-8 filed by or
on behalf of VRI

with the Securities and Exchange Commission within 15 days after filing).

(f) Promptly upon reasonable request by Agent or Required Lenders (through
Agent),

information (not otherwise required to be furnished under the Loan Papers)
respecting the business

affairs, assets and liabilities of the Companies (including, but not limited to,
seasonal operating

statistics, annual budgets, etc.) and opinions, certifications and documents in
addition to those

mentioned in this Agreement; provided, however, that Agent and Lenders shall not
disclose to any

third Person any data or information obtained thereby in accordance with the
provisions of this

paragraph (f)

, except (i) with the prior written consent of the appropriate Company, (ii) to
the extent

necessary to comply with Law or the ruling of any Tribunal in which event, Agent
and/or such

Lenders shall notify the appropriate Company as promptly as practicable (and, if
possible, prior to

making such disclosure) and shall seek confidential treatment of the information
desired, (iii) at the

request of any banking or other regulatory authority, or (iv) to their
respective Representatives to the

extent such disclosure is necessary in connection with the transactions
contemplated by the Loan

Papers.

8.2 Use of Proceeds. Borrower will use all of the proceeds of Loans and L/Cs for
seasonal

working capital, to make advances and other investments permitted by Section
9.8, to make acquisitions

permitted under Section 9.11, and for other general corporate purposes and
capital expenditures of the

Companies. No part of the proceeds of any L/C draft or drawing or of any Loan
will be used, directly or

indirectly, for a purpose that violates any Law, including without limitation,
the provisions of Regulation U.

8.3 Books and Records. Each Company will maintain books, records and accounts
necessary

to prepare financial statements in accordance with GAAP.

8.4 Inspections. Upon reasonable request, each Company will allow Agent (or its

Representatives) to inspect any of its properties, to review reports, files and
other records and to make and

take away copies, to conduct tests or investigations, and to discuss any of its
affairs, conditions and finances

with its other creditors, directors, officers, employees or representatives from
time to time, during reasonable

business hours; provided, however, that Agent and its Representatives shall not
disclose to any Person any

data or information obtained thereby in accordance with the provisions of this
Section 8.4 which is not a

matter of public knowledge, except (i) with the prior written consent of the
appropriate Company, (ii) to the

extent necessary to comply with Law or the ruling of any Tribunal in which
event, Agent and/or its

Representatives shall notify the appropriate Company as promptly as practicable
(and, if possible, prior to

making such disclosure) and shall seek confidential treatment of the information
desired, (iii) at the request

of any banking or other regulatory authority, or (iv) to their respective
Representatives to the extent such

disclosure is necessary in connection with the transactions contemplated by the
Loan Papers. Any of the

Lenders (or their Representatives) may accompany Agent during such inspections.

8.5 Taxes. Each Restricted Company will promptly pay when due any and all Taxes,
other than

Taxes which are being contested in good faith by lawful proceedings diligently
conducted, against which

reserve or other provision required by GAAP has been made; provided, however,
that all such Taxes shall,

in any event, be paid prior to any levy for execution in respect of any Lien on
any property of a Restricted

Company.

8.6 Payment of Obligations. Each Company will pay (or renew and extend) all of
its obligations

at such times and to such extent as may be necessary to prevent a Material
Adverse Event (except for

obligations, other than Funded Debt, which are being contested in good faith by
appropriate proceedings);

provided that

Borrower shall not and shall not permit any other Company to repay advances from
Apollo,

other than

as provided in Section 9.9.

8.7 Fees and Expenses. Borrower shall promptly pay upon demand (a) all
reasonable and

customary costs, fees, and expenses paid or incurred by Agent and its
Affiliates, in connection with the

arrangement, syndication and negotiation of the Facility and the negotiation,
preparation, delivery and

execution of the Loan Papers and any related amendment, waiver, or consent
(including in each case, without

limitation, the reasonable fees and expenses of Agent's counsel) and (b) all
reasonable costs and expenses

of Lenders and Agent incurred by Agent or any Lender in connection with the
enforcement of the obligations

of any Company arising under the Loan Papers or the exercise of any Rights
arising under the Loan Papers

(including, but not limited to, reasonable attorneys' fees and court costs), all
of which shall be a part of the

Obligation and shall bear interest, if not paid upon demand, at the Default Rate
until paid.

8.8 Maintenance of Existence, Assets, and Business.

(a) Except as otherwise permitted by Section 9.11, each Company will (i)
maintain its

organizational existence and good standing in its state of organization and its
authority to transact

business in all other states where failure to maintain its authority to transact
business is a Material

Adverse Event; (ii) maintain all Water Rights, licenses, permits (including,
without limitation, the

Forest Service Permits), and franchises necessary for its business where failure
to maintain is a

Material Adverse Event; and (iii) keep all of its assets that are useful in and
necessary to its business

in good working order and condition (ordinary wear and tear excepted) and make
all necessary

repairs and replacements.

(b) Neither Borrower, VRI nor VHI will change its name in any manner (except by

registering additional trade names), unless such Company shall have given Agent
prior notice thereof.

Borrower shall promptly notify Agent of any change in name of any other Company
(except the

registering of additional tradenames).

8.9 Insurance. Each Company will maintain with financially sound, responsible,
and reputable

insurance companies or associations (or, as to workers' compensation or similar
insurance, with an insurance

fund or by self-insurance authorized by the jurisdictions in which it operates)
insurance concerning its

properties and businesses against casualties and contingencies and of types and
in amounts (and with

co-insurance and deductibles) as is customary in the case of similar businesses.
At Agent's request, each

Company will deliver to Agent certificates of insurance for each policy of
insurance and evidence of payment

of all premiums.

8.10 Environmental Laws. Each Company will (a) conduct its business so as to
comply in all

material respects with all applicable Environmental Laws and shall promptly take
required corrective action

to remedy any non-compliance with any Environmental Law, except where failure to
comply or take action

would not be a Material Adverse Event, and (b) establish and maintain a
management system designed to

ensure compliance with applicable Environmental Laws and minimize material
financial and other risks to

each Company arising under applicable Environmental Laws or as the result of
environmentally related

injuries to Persons or property, except where failure to comply would not be a
Material Adverse Event.

Borrower shall deliver reasonable evidence of compliance with the foregoing
covenant to Agent within 30

days after any written request from Required Lenders, which request shall be
made only if Required Lenders

reasonably believe that a failure to comply with the foregoing covenant would be
a Material Adverse Event.

8.11 Subsidiaries. Subject to Section 9.8, the Companies may create or acquire
additional

Subsidiaries (including Unrestricted Subsidiaries); provided that (a) each
Person that becomes a Restricted

Subsidiary after the date of this Agreement (whether as a result of an
acquisition permitted under

Section 9.11

, creation, or otherwise) shall execute and deliver to Agent a Guaranty within
30 days after

becoming a Restricted Subsidiary, (b) each Restricted Company that becomes the
holder of the capital stock

or equity interest of each Person that becomes a Restricted Subsidiary after the
date of this Agreement

(whether as a result of an acquisition permitted under Section 9.11, creation,
or otherwise) shall execute and

deliver to Agent a Pledge Agreement, together with any related Security
Documents reasonably required by

Agent, pledging such capital stock or equity interests within 30 days after such
Person becomes a Subsidiary,

and (c) and Borrower shall deliver to Agent a revised Schedule 7.2 reflecting
such new Subsidiary within

30 days after it becomes a Subsidiary. Subject to Section 14.10(b)(v), Agent
shall execute documentation

reasonably required to release any Restricted Subsidiary which is re-designated
by Borrower as an

Unrestricted Subsidiary from its Guaranty.

8.12 Indemnification. Borrower shall indemnify, protect and hold Agent and
Lenders and

their respective Affiliates, Representatives, successors and assigns and
attorneys (collectively,

the "indemnified parties") harmless from and against any and all liabilities,
obligations, losses,

damages, penalties, actions, judgments, suits, claims and proceedings and all
costs, expenses

(including, without limitation, all attorneys' fees and legal expenses whether
or not suit is brought)

and disbursements of any kind or nature (the "indemnified liabilities") that may
at any time be

imposed on, incurred by or asserted against the indemnified parties, in any way
relating to or

arising out of (a) the direct or indirect result of the violation by any Company
of any Environmental

Law, (b) any Company's generation, manufacture, production, storage, release,
threatened release,

discharge, disposal or presence in connection with its properties of a Hazardous
Substance

(including, without limitation, (i) all damages of any use, generation,
manufacture, production,

storage, release, threatened release, discharge, disposal or presence, or (ii)
the costs of any

environmental investigation, monitoring, repair, cleanup or detoxification and
the preparation and

implementation of any closure, remedial or other plans), or (c) the Loan Papers
or any of the

transactions contemplated therein. However, although each indemnified party has
the Right to be

indemnified for its own ordinary negligence, no indemnified party has the Right
to be indemnified

for its own fraud, gross negligence or willful misconduct. The provisions of and
undertakings and

indemnification set forth in this paragraph shall survive the satisfaction and
payment of the

Obligation and termination of this Agreement.

SECTION 9 NEGATIVE COVENANTS. So long as Lenders are committed to fund Loans and
Agent

is committed to issue L/Cs under this Agreement, and thereafter until the
Obligation is paid in full, Borrower

covenants and agrees as follows:

9.1 Taxes. No Company shall use any portion of the proceeds of any Loan to pay
the wages

of employees, unless a timely payment to or deposit with the U.S. of all amounts
of Tax required to be

deducted and withheld with respect to such wages is also made.

9.2 Payment of Obligations. No Company shall voluntarily prepay principal of, or
interest on, any

Funded Debt, other than the Obligation, if a Default or Potential Default exists
(or would result from such

payment). No Company shall repay, repurchase, redeem or defease Subordinated
Debt without the prior

written consent of Required Lenders.

9.3 Employee Plans. Except where a Material Adverse Event would not result, no
Company

shall permit any of the events or circumstances described in Section 7.10 to
exist or occur.

9.4 Debt. No Company shall create, incur or suffer to exist any Debt, other than
Permitted

Debt.

9.5 Liens. No Company shall (a) create, incur or suffer or permit to be created
or incurred or

to exist any Lien upon any of its assets, other than Permitted Liens, or (b)
enter into or permit to exist any

arrangement or agreement that directly or indirectly prohibits any Company from
creating or incurring any

Lien, other than the Loan Papers, the documents executed in connection with the
Vail Bonds (and any

documents relating to a refinancing of the Vail Bonds), the Senior Subordinated
Debt Indenture as in effect

on May 11, 1999 (which does not prohibit the creation or incurrence of Liens
securing "Senior Debt," as

defined therein), any other indenture that contains the same exception for liens
securing "Senior Debt" as the

Senior Subordinated Debt Indenture, and leases or licenses that prohibit Liens
on the leased or licensed

property.

9.6 Transactions with Affiliates. Except for transactions which do not, in the
aggregate, cost the

Restricted Companies more than $2,000,000 in any fiscal year, no Restricted
Company shall enter into or

suffer to exist any transaction with any Affiliate (other than another
Restricted Company), or guaranty,

obtain any letter of credit or similar instrument in support of, or create,
incur or suffer to exist any Lien upon

any of its assets as security for, any Debt or other obligation of any Affiliate
(other than Debts or other

obligations of another Restricted Company) unless (a) such transaction is an
advance or equity contribution

to an Unrestricted Subsidiary permitted by Section 9.8(j), (b) such transaction
is described in Section 9.9 or

on Schedule 7.13, or (c) such transaction is upon fair and reasonable terms not
materially less favorable than

it could obtain or could become entitled to in an arm's-length transaction with
a Person that was not its

Affiliate.

9.7 Compliance with Laws and Documents. No Company shall (a) violate the
provisions of any

Laws or rulings of any Tribunal applicable to it or of any Material Agreement to
which it is a party if that

violation alone, or when aggregated with all other violations, would be a
Material Adverse Event, (b) violate

the provisions of its organizational documents if such violation would cause a
Material Adverse Event, or (c)

repeal, replace or amend any provision of its organizational documents if that
action would be a Material

Adverse Event.

9.8 Loans, Advances and Investments. Except as permitted by Section 9.9 or
Section 9.11, no

Restricted Company shall make or suffer to exist any loan, advance, extension of
credit or capital contribution

to, make any investment in, or purchase or commit to purchase any stock or other
securities or evidences of

Debt of, or interests in, any other Person, other than:

(a) expense accounts for and other loans or advances to its directors, officers
and

employees in the ordinary course of business;

(b) marketable obligations issued or unconditionally guaranteed by the U.S. or
issued by

any of its agencies and backed by the full faith and credit of the U.S., in each
case maturing within

one year from the date of acquisition;

(c) short-term investment grade domestic and eurodollar certificates of deposit
or time

deposits that are fully insured by the Federal Deposit Insurance Corporation or
are issued by

commercial banks organized under the Laws of the U.S. or any of its states
having combined capital,

surplus, and undivided profits of not less than $100,000,000 (as shown on its
most recently published

statement of condition);

(d) commercial paper and similar obligations rated "P-1" by Moody's or "A-1" by
S&P;

(e) readily marketable tax-free municipal bonds of a domestic issuer rated "A-2"
or

better by Moody's or "A" or better by S&P, and maturing within one year from the
date of issuance;

(f) mutual funds or money market accounts investing primarily in items described
in

clauses (b)

through (e) above;

(g) demand deposit accounts maintained in the ordinary course of business;

(h) current trade and customer accounts receivable that are for goods furnished
or

services rendered in the ordinary course of business and that are payable in
accordance with

customary trade terms;

(i) Financial Hedges existing on the date hereof which have previously been
approved

by Agent and other Financial Hedges entered into after the date hereof under
terms reasonably

acceptable to Agent;

(j) in addition to items covered elsewhere in this definition, but subject to
Sections 8.11

and 9.14, investments in any Person (including purchases of stock or other
securities or evidence of

Debt of, assets of, or loans, advances, extensions of credit or capital
contributions to such Person,

but excluding capital appreciation and accrued interest), provided that all such
investments (when

added to those made by Unrestricted Subsidiaries) made in (i) Unrestricted
Subsidiaries, (ii) Persons

that are not Affiliates of Borrower after such investment (excluding investments
in

Keystone/Intrawest LLC existing on the date of this Agreement and the existing
obligation of Vail

Summit Resorts to contribute to Keystone/Intrawest LLC additional land which had
a book value as

of June 30, 1996, of $8,900,000), and (iii) Apollo, shall not in the aggregate
exceed 15% of the

Companies' consolidated net worth at the time of determination; and

(k) the following investments:

(i) a secured loan of $300,000 made to Andrew P. Daly in 1991, a secured loan

of $438,750 made to Lucinda M. Daly in 1996, and a secured loan of $350,000 made
to Mr.

and Mrs. James P. Thompson in 1996;

(ii) a capital contribution, in an amount not to exceed $650,000, in

Boulder/Beaver LLC; and

(iii) Workers compensation reserve account, established pursuant to a
selfinsurance

permit from the State of Colorado Department of Labor, invested exclusively in

items described in clauses (b) through (f) above.

9.9 Management Fees and Distributions. No Company shall make any Distribution,
except as

follows:

(a) if no Default or Potential Default exists (or would result therefrom), the
Companies

may pay management fees to Apollo of up to $500,000 (in cash and/or services) in
any fiscal year

of the Companies;

(b) VRI may make payments of approximately $100,000 accruing to certain option

holders;

(c) any Company may make Distributions to a Restricted Company;

(d) if VRI issues any Subordinated Debt which is subsequently converted to
preferred

stock, VRI may, if no Default or Potential Default exists (or would result
therefrom), pay dividends

on such stock at an annual rate which is less than or equal to the annual rate
of interest payable on

such Subordinated Debt prior to its conversion; and

(e) if no Default or Potential Default exists (or would result therefrom), VRI
may make

other Distributions to its shareholders (in addition to those described in
clause (d) above), so long as

all of such other Distributions made during any four consecutive fiscal quarters
of the Companies

(including any dividends on preferred stock which exceed the amount permitted
under clause (d)

above) do not exceed 50% of the Restricted Companies' Net Income during such
period.

9.10 Sale of Assets. No Company may sell, assign, lease, transfer or otherwise
dispose of all or

any material portion of the assets described in Schedule 2, if the ratio
described in Section 10.1 would, on

a pro forma basis (taking the disposition into account), increase as a result of
such disposition.

9.11 Acquisitions, Mergers, and Dissolutions.

(a) Except as provided in this Section 9.11, and subject to Sections 8.11 and
9.8, a

Restricted Company may not (i) acquire all or any substantial portion of the
capital stock (or other

equity or voting interests) of any other Person, (ii) acquire all or any
substantial portion of the assets

of any other Person, (iii) merge or consolidate with any other Person, or (iv)
liquidate, wind up or

dissolve (or suffer any liquidation or dissolution).

(b) Any Restricted Subsidiary may (i) acquire all or any substantial portion of
the capital

stock (or other equity or voting interests) issued by any other Restricted
Subsidiary, (ii) acquire all

or any substantial portion of the assets of any other Restricted Subsidiary, and
(iii) merge or

consolidate with any other Restricted Subsidiary (and, in the case of such
merger or consolidation or,

in the case of the conveyance or distribution of such assets, the non-surviving
or selling entity, as the

case may be, may be liquidated, wound up or dissolved), provided that if
Borrower is a party to such

merger or consolidation, Borrower must be the surviving entity and if Borrower
is not a party to such

merger or consolidation, a Restricted Subsidiary must be the surviving entity.

(c) Any Restricted Subsidiary may (i) acquire all or any substantial portion of
the capital

stock (or other equity or voting interests) issued by any other Person, (ii)
acquire all or any

substantial portion of the assets of any other Person, or (iii) merge or
consolidate with any other

Person (and, in the case of such merger or consolidation, the non-surviving
entity may be liquidated,

wound up or dissolved), if

(i) such other Person is organized under the laws of the United States,

(ii) in respect of any such transaction for which the sum of the cash

consideration paid and the Debt assumed by Borrower or any other Restricted
Company

exceeds $25,000,000, at least 15 days before the transaction's closing date
Borrower delivers

to Agent a written description of the transaction, including the funding sources
and the total

investment or purchase price, and a calculation on a pro forma basis (taking the
transaction

into account) showing that no Default will occur as a result of such
transaction,

(iii) such other Person is engaged in a business in which a Restricted Company

would be permitted to engage under Section 9.14;

(iv) with respect to a merger or consolidation, if Borrower is a party to such

merger or consolidation, Borrower must be the surviving entity and if Borrower
is not a party

to such merger or consolidation, a Restricted Subsidiary must be the surviving
entity and, to

the extent such surviving entity has not already done so, shall, concurrently
with (and no later

than 30 days after) such merger or consolidation, execute and deliver to Agent a
Guaranty,

(v) the sum of the cash consideration paid and the Debt assumed by Borrower

or any other Restricted Company in connection with such transaction does not
exceed the

lesser

of (A) Adjusted EBITDA for the four immediately preceding fiscal quarters, and
(B)

$90,000,000, and

(vi) the sum of the cash consideration paid and the liabilities assumed by

Borrower or any other Restricted Company, in the aggregate, in connection with
all such

transactions during the term of this Agreement does not exceed $250,000,000.

9.12 Assignment. No Company shall assign or transfer any of its Rights or cause
to be delegated

its duties or obligations under any of the Loan Papers.

9.13 Fiscal Year and Accounting Methods. No Company shall change its fiscal year
or its method

of accounting (other than immaterial changes in methods or as required by GAAP).

9.14 New Businesses. No Restricted Company shall engage in any business, except
the

businesses in which they are presently engaged and any other business reasonably
related to the Companies'

current operations or the resort, leisure or ski business; provided, however,
that the foregoing shall not be

construed to prohibit the cessation by any Company of its business activities or
the sale or transfer of the

business or assets of such Company to the extent not otherwise prohibited by
this Agreement.

9.15 Government Regulations. No Company shall conduct its business in a way that
it becomes

regulated under the Investment Company Act of 1940, as amended, or the Public
Utility Holding Company

Act of 1935, as amended.

SECTION 10 FINANCIAL COVENANTS

. So long as Lenders are committed to fund Loans and Agent

is committed to issue L/Cs under this Agreement, and thereafter until the
Obligation is paid and performed

in full (except for provisions under the Loan Papers expressly intended to
survive payment of the Obligation

and termination of the Loan Papers), Borrower covenants and agrees as follows to
comply with each of the

following ratios. For purposes of determining each such ratio, Adjusted EBITDA
for any period shall include

on a pro forma basis all EBITDA for such period relating to assets acquired
(including Restricted

Subsidiaries formed or acquired) in accordance with this Agreement during such
period, but shall exclude on

a pro forma basis all EBITDA for such period relating to any such assets
disposed of in accordance with

this Agreement during such period.

10.1 Maximum Leverage Ratios.

(a) Funded Debt to Adjusted EBITDA. As calculated as of the last day of each
fiscal

quarter of the Companies, the Companies shall not permit the ratio of (i) the
unpaid principal amount

of Funded Debt existing as of such last day to (ii) Adjusted EBITDA for the four
fiscal quarters

ending on such last day to exceed 4.50:1.00.

(b) Senior Debt to Adjusted EBITDA. As calculated as of the last day of each
fiscal

quarter of the Companies, the Companies shall not permit the ratio of (i) the
unpaid amount of Senior

Debt existing as of such last day to (ii) Adjusted EBITDA for the four fiscal
quarters ending on such

last day to exceed the following:

As of the last day of each fiscal quarter ending July 31, January 31, and April
30:

3.25 to 1.00

As of the last day of each fiscal quarter ending October 31:

3.50 to 1.00

 

10.2 Minimum Fixed Charge Coverage Ratio. As calculated as of the last day of
each fiscal

quarter of the Companies, the Companies shall not permit the ratio of (a)
Adjusted EBITDA for the four

fiscal quarters ending on such last day minus expense for cash income Taxes paid
minus Required Capital

Expenditures, to (b) interest on the Obligation and scheduled principal and
interest payments on all other

Funded Debt plus Distributions (other than of stock) made by VRI, in each case
in such four fiscal quarters,

to be less than 1.25:1.00.

10.3 Minimum Net Worth. Shareholders' Equity may not at any time be less than an
amount equal

to the sum of (a) 90% of the Shareholders Equity for the fiscal quarter ended
July 31, 2001, plus (b) 75% of

the Net Income of the Restricted Companies, if positive, for each fiscal year
completed after July 31, 2001,

plus

(c) 100% of any Net Proceeds received by any Restricted Company (other than from
another Company)

from the offering, issuance, or sale of equity securities of a Restricted
Company after July 31, 2001.

10.4 Interest Coverage Ratio. As calculated as of the last day of each fiscal
quarter of the

Companies, the Companies shall not permit the ratio of (a) Adjusted EBITDA for
the four fiscal quarters

ending on such last day to (b) interest on Funded Debt in such four fiscal
quarters to be less than 2.50 to 1.00.

10.5 Capital Expenditures. The Restricted Companies may not make or become
legally obligated

to make any expenditure in respect of the purchase or other acquisition of any
fixed or capital asset (excluding

(a) normal replacements and maintenance which are properly charged to current
operations, and (b) such

expenditures relating to real estate held for resale), except for capital
expenditures in the ordinary course of

business not exceeding, in the aggregate for the Restricted Companies during
each fiscal year, an amount

equal to 10% of the value of Total Assets as of the last day of such fiscal
year.

SECTION 11 DEFAULT

. The term "Default" means the occurrence of any one or more of the following

events:

11.1 Payment of Obligation. The failure or refusal of any Company to pay (a) any
principal

payment contemplated by Section 3.2(b) of this Agreement after such payment
becomes due and payable

hereunder, (b) any principal payment (other than those contemplated by Section
3.2(b)) or interest payment

contemplated to be made hereunder within 3 Business Days after demand therefor
by Agent, (c) any amount

contemplated to be paid hereunder in respect of fees, costs, expenses or
indemnities within 10 Business Days

after demand therefor by Agent and (d) any amount in respect of its
reimbursement obligations in connection

with any drawing under an L/C within 3 Business Days after demand therefor by
Agent.

11.2 Covenants. The failure or refusal of any Company to punctually and properly
perform,

observe, and comply with:

(a) Any covenant, agreement or condition applicable to it contained in Sections
8.2, 9

(other than Sections 9.1, 9.3, 9.6 and 9.7) or 10; or

(b) Any other covenant, agreement or condition applicable to it contained in any
Loan

Paper (other than the covenants to pay the Obligation and the covenants in
clause (a) preceding),

and failure or refusal continues for 30 days.

11.3 Debtor Relief. Any Restricted Company (a) fails to pay its Debts generally
as they become

due, (b) voluntarily seeks, consents to, or acquiesces in the benefit of any
Debtor Relief Law, (c) becomes

a party to or is made the subject of any proceeding provided for by any Debtor
Relief Law that could suspend

or otherwise adversely affect the Rights of Agent or any Lender granted in the
Loan Papers (unless, if the

proceeding is involuntary, the applicable petition is dismissed within 60 days
after its filing), or (d) becomes

subject to an order for relief granted under the Bankruptcy Reform Act of 1978,
as amended from time to

time (other than as a creditor or claimant).

11.4 Judgments and Attachments. Any Restricted Company fails, within 60 days
after entry, to

pay, bond or otherwise discharge any judgment or order for the payment of money
in excess of $5,000,000

(individually or collectively) or any warrant of attachment, sequestration or
similar proceeding against any

assets of any Restricted Company having a value (individually or collectively)
of $5,000,000, which is neither

(a) stayed on appeal nor (b) diligently contested in good faith by appropriate
proceedings and adequate

reserves have been set aside on its books in accordance with GAAP.

11.5 Government Action. Any Tribunal condemns, seizes or otherwise appropriates,
or takes

custody or control of all or any substantial portion of the assets described on
Schedule 2.

11.6 Misrepresentation. Any material representation or warranty made by any
Company in

connection with any Loan Paper at any time proves to have been materially
incorrect when made; provided

that if such Company made such representation or warranty in good faith without
any knowledge on the part

of the Companies that it was materially incorrect, such misrepresentation shall
not constitute a Default if the

Companies notify Agent of such misrepresentation within 5 Business Days after
such Company has

knowledge thereof.

11.7 Ownership. There shall occur a Change of Control Transaction.

11.8 Default Under Other Agreements. (a) Any Restricted Company fails to pay
when due (after

lapse of any applicable grace period) any recourse Debt in excess (individually
or collectively) of $5,000,000;

or (b) any default exists under any agreement to which any Restricted Company is
a party, the effect of

which is to cause, or to permit any Person (other than a Restricted Company) to
cause, any recourse

obligation in excess (individually or collectively) of $5,000,000 to become due
and payable by any Restricted

Company before its stated maturity, except to the extent such obligation is
declared to be due and payable

as a result of the sale of any asset to which it relates.

11.9 Validity and Enforceability of Loan Papers. Except in accordance with its
terms or as

otherwise expressly permitted by this Agreement, any Loan Paper at any time
after its execution and delivery

ceases to be in full force and effect in any material respect or is declared to
be null and void or its validity or

enforceability is contested by any Company party thereto or any Company denies
that it has any further

liability or obligations under any Loan Paper to which it is a party.

11.10 Employee Plans. Except where occurrence or existence is not a Material
Adverse Event,

(a) an Employee Plan incurs an "accumulated funding deficiency" (as defined in
section 302 of ERISA or

section 412 of the Code), (b) a Company incurs liability under ERISA to the PBGC
in connection with any

Employee Plan (other than required insurance premiums paid when due), (c) a
Company withdraws in whole

or in part from participation in a Multiemployer Plan, (d) a Company engages in
any "prohibited

transaction" (as defined in section 406 of ERISA or section 4975 of the Code),
or (e) a "reportable event"

(as defined in section 4043

of ERISA) occurs with respect to an Employee Plan, excluding events for

which the notice requirement is waived under applicable PBGC regulations.

SECTION 12 RIGHTS AND REMEDIES

.

12.1 Remedies Upon Default.

(a) If a Default exists under Section 11.3, the commitment to extend credit
under this

Agreement automatically terminates, the entire unpaid balance of the Obligation
automatically

becomes due and payable without any action of any kind whatsoever, and Borrower
must provide

cash collateral in an amount equal to the then-existing L/C Exposure.

(b) If any Default exists, subject to the terms of Section 13.5(b), Agent may
(with the

consent of, and must, upon the request of, Required Lenders), do any one or more
of the following:

(i) if the maturity of the Obligation has not already been accelerated under
Section 12.1(a), declare

the entire unpaid balance of all or any part of the Obligation immediately due
and payable, whereupon

it is due and payable; (ii) terminate the commitments of Lenders to extend
credit or to continue or

convert any Loan under this Agreement; (iii) reduce any claim to judgment; (iv)
demand Borrower

to provide cash collateral in an amount equal to the L/C Exposure then existing;
and (v) exercise any

and all other legal or equitable Rights afforded by the Loan Papers, the Laws of
the State of New

York, or any other applicable jurisdiction.

12.2 Company Waivers. To the extent permitted by Law, each Company waives

presentment and demand for payment, protest, notice of intention to accelerate,
notice of

acceleration and notice of protest and nonpayment, and agrees that its liability
with respect to all

or any part of the Obligation is not affected by any renewal or extension in the
time of payment of

all or any part of the Obligation, by any indulgence, or by any release or
change in any security for

the payment of all or any part of the Obligation.

12.3 Performance by Agent. If any covenant, duty or agreement of any Company is
not

performed in accordance with the terms of the Loan Papers, Agent may, while a
Default exists, at its option

(but subject to the approval of Required Lenders), perform or attempt to perform
that covenant, duty or

agreement on behalf of that Company (and any amount expended by Agent in its
performance or attempted

performance is payable by the Companies, jointly and severally, to Agent on
demand, becomes part of the

Obligation, and bears interest at the Default Rate from the date of Agent's
expenditure until paid). However,

Agent does not assume and shall never have, except by its express written
consent, any liability or

responsibility for the performance of any covenant, duty or agreement of any
Company.

12.4 Not in Control. None of the covenants or other provisions contained in any
Loan Paper shall,

or shall be deemed to, give Agent or Lenders the Right to exercise control over
the assets (including, without

limitation, real property), affairs, or management of any Company; the power of
Agent and Lenders is limited

to the Right to exercise the remedies provided in this Section 12.

12.5 Course of Dealing. The acceptance by Agent or Lenders of any partial
payment on the

Obligation shall not be deemed to be a waiver of any Default then existing. No
waiver by Agent, Required

Lenders or Lenders of any Default shall be deemed to be a waiver of any other
then-existing or subsequent

Default. No delay or omission by Agent, Required Lenders or Lenders in
exercising any Right under the

Loan Papers will impair that Right or be construed as a waiver thereof or any
acquiescence therein, nor will

any single or partial exercise of any Right preclude other or further exercise
thereof or the exercise of any

other Right under the Loan Papers or otherwise.

12.6 Cumulative Rights. All Rights available to Agent, Required Lenders, and
Lenders under the

Loan Papers are cumulative of and in addition to all other Rights granted to
Agent, Required Lenders, and

Lenders at law or in equity, whether or not the Obligation is due and payable
and whether or not Agent,

Required Lenders, or Lenders have instituted any suit for collection,
foreclosure, or other action in connection

with the Loan Papers.

12.7 Application of Proceeds. Any and all proceeds ever received by Agent or
Lenders from the

exercise of any Rights pertaining to the Obligation shall be applied to the
Obligation according to

Section 3.11

.

12.8 Diminution in Value of Collateral. Neither Agent nor any Lender has any
liability or

responsibility whatsoever for any diminution in or loss of value of any
Collateral or other collateral ever

securing payment or performance of all or any part of the Obligation ( other
than diminution in or loss of value

caused by its gross negligence or willful misconduct).

12.9 Certain Proceedings. The Companies will promptly execute and deliver, or
cause the

execution and delivery of, all applications, certificates, instruments,
registration statements and all other

documents and papers Agent or Required Lenders reasonably request in connection
with the obtaining of any

consent, approval, registration, qualification, permit, license or authorization
of any Tribunal or other Person

necessary or appropriate for the effective exercise of any Rights under the Loan
Papers. Because Borrower

agrees that Agent's and Required Lenders' remedies at Law for failure of the
Companies to comply with the

provisions of this paragraph would be inadequate and that failure would not be
adequately compensable in

damages, Borrower agrees that the covenants of this paragraph may be
specifically enforced.

SECTION 13 AGREEMENT AMONG LENDERS

.

13.1 Agent.

(a) Each Lender appoints Agent (and Agent accepts appointment) as its nominee
and

agent, in its name and on its behalf pursuant to the terms and conditions of the
Loan Papers: (i) to

act as its nominee and on its behalf in and under all Loan Papers; (ii) to
arrange the means whereby

its funds are to be made available to Borrower under the Loan Papers; (iii) to
take any action that

it properly requests under the Loan Papers (subject to the concurrence of other
Lenders as may be

required under the Loan Papers); (iv) to receive all documents and items to be
furnished to it under

the Loan Papers; (v) to be the secured party, mortgagee, beneficiary, recipient
and similar party in

respect of any collateral for the benefit of Lenders; (vi) to promptly
distribute to it all material

information, requests, documents and items received from any Company under the
Loan Papers;

(vii) to promptly distribute to it its ratable part of each payment (whether
voluntary, as proceeds of

Collateral upon or after foreclosure, as proceeds of insurance thereon, or
otherwise) in accordance

with the terms of the Loan Papers; and (viii) to deliver to the appropriate
Persons requests, demands,

approvals, and consents received from it.

(b) If the initial or any successor Agent ever ceases to be a party to this
Agreement or

if the initial or any successor Agent ever resigns (whether voluntarily or at
the request of Required

Lenders), then Required Lenders shall appoint the successor Agent from among
Lenders ( other than

the resigning Agent). If Required Lenders fail to appoint a successor Agent
within 30 days after the

resigning Agent has given notice of resignation or Required Lenders have removed
the resigning

Agent, then the resigning Agent may, on behalf of Lenders, appoint a successor
Agent, which must

be a commercial bank having a combined capital and surplus of at least
$1,000,000,000 (as shown

on its most recently published statement of condition). Upon its acceptance of
appointment as

successor Agent, the successor Agent succeeds to and becomes vested with all of
the Rights of the

prior Agent, and the prior Agent is discharged from its duties and obligations
of Agent under the Loan

Papers (but, when used in connection with L/Cs issued and outstanding before the
appointment of

the successor Agent, "Agent" shall continue to refer solely to Bank of America,
N.A. (but, any L/Cs

issued or renewed after the appointment of any successor Agent shall be issued
or renewed by the

successor Agent)), and each Lender shall execute the documents as any Lender,
the resigning or

removed Agent, or the successor Agent reasonably request to reflect the change.
After any Agent's

resignation or removal as Agent under the Loan Papers, the provisions of this
Section 13 inure to its

benefit as to any actions taken or omitted to be taken by it while it was Agent
under the Loan Papers.

(c) Agent, in its capacity as a Lender, has the same Rights under the Loan
Papers as

any other Lender and may exercise those Rights as if it were not acting as
Agent; the term "Lender"

shall, unless the context otherwise indicates, include Agent; and Agent's
resignation or removal shall

not impair or otherwise affect any Rights that it has or may have in its
capacity as an individual

Lender. Each Lender and Borrower agree that Agent is not a fiduciary for Lenders
or for Borrower

but simply is acting in the capacity described in this Agreement to alleviate
administrative burdens

for Borrower and Lenders, that Agent has no duties or responsibilities to
Lenders or Borrower,

except

those expressly set forth in the Loan Papers, and that Agent in its capacity as
a Lender has

all Rights of any other Lender.

(d) Agent may now or hereafter be engaged in one or more loan, letter of credit,
leasing

or other financing transactions with Borrower, act as trustee or depositary for
Borrower, or otherwise

be engaged in other transactions with Borrower (collectively, the "other
activities") not the subject

of the Loan Papers. Without limiting the Rights of Lenders specifically set
forth in the Loan Papers,

Agent is not responsible to account to Lenders for those other activities, and
no Lender shall have

any interest in any other activities, any present or future guaranties by or for
the account of Borrower

that are not contemplated or included in the Loan Papers, any present or future
offset exercised by

Agent in respect of those other activities, any present or future property taken
as security for any of

those other activities, or any property now or hereafter in Agent's possession
or control that may be

or become security for the obligations of Borrower arising under the Loan Papers
by reason of the

general description of indebtedness secured or of property contained in any
other agreements,

documents, or instruments related to any of those other activities (but, if any
payments in respect of

those guaranties or that property or the proceeds thereof is applied by Agent to
reduce the Obligation,

then each Lender is entitled to share ratably in the application as provided in
the Loan Papers).

13.2 Expenses. Each Lender shall pay its Pro Rata Part of any reasonable
expenses (including,

without limitation, court costs, reasonable attorneys' fees and other costs of
collection) incurred by Agent

(while acting in such capacity) in connection with any of the Loan Papers if
Agent is not reimbursed from

other sources within 30 days after incurrence. Each Lender is entitled to
receive its Pro Rata Part of any

reimbursement that it makes to Agent if Agent is subsequently reimbursed from
other sources.

13.3 Proportionate Absorption of Losses. Except as otherwise provided in the
Loan Papers,

nothing in the Loan Papers gives any Lender any advantage over any other Lender
insofar as the Obligation

is concerned or to relieve any Lender from absorbing its Pro Rata Part of any
losses sustained with respect

to any portion of the Obligation in which it participates (except to the extent
unilateral actions or inactions by

any Lender result in Borrower or any other obligor on the Obligation having any
credit, allowance, setoff,

defense, or counterclaim solely with respect to all or any part of that Lender's
portion of the Obligation).

13.4 Delegation of Duties; Reliance. Lenders may perform any of their duties or
exercise any

of their Rights under the Loan Papers by or through Agent, and Lenders and Agent
may perform any of their

duties or exercise any of their Rights under the Loan Papers by or through their
respective Representatives.

Agent, Lenders and their respective Representatives (a) are entitled to rely
upon (and shall be protected in

relying upon) any written or oral statement believed by it or them to be genuine
and correct and to have been

signed or made by the proper Person and, with respect to legal matters, upon
opinion of counsel selected by

Agent or that Lender (but nothing in this clause (a) permits Agent to rely on
(i) oral statements if a writing

is required by this Agreement or (ii) any other writing if a specific writing is
required by this Agreement),

(b) are entitled to deem and treat each Lender as the owner and holder of its
portion of the Principal Debt

for all purposes until, subject to Section 14.12, written notice of the
assignment or transfer is given to and

received by Agent (and any request, authorization, consent or approval of any
Lender is conclusive and

binding on each subsequent holder, assignee or transferee of or Participant in
that Lender's portion of the

Principal Debt until that notice is given and received), (c) are not deemed to
have notice of the occurrence

of a Default unless a responsible officer of Agent, who handles matters
associated with the Loan Papers and

transactions thereunder, has actual knowledge or Agent has been notified by a
Lender or Borrower, and (d)

are entitled to consult with legal counsel (including counsel for Borrower),
independent accountants, and other

experts selected by Agent and are not liable for any action taken or omitted to
be taken in good faith by it in

accordance with the advice of counsel, accountants, or experts.

13.5 Limitation of Agent's Liability.

(a) Neither Agent nor any of its Affiliates, Representatives, successors or

assigns will be liable for any action taken or omitted to be taken by it or them
under the

Loan Papers in good faith and believed by it or them to be within the discretion
or power

conferred upon it or them by the Loan Papers or be responsible for the
consequences of

any error of judgment (except for fraud, gross negligence or willful
misconduct), and none

of them has a fiduciary relationship with any Lender by virtue of the Loan
Papers (but

nothing in this Agreement negates the obligation of Agent to account for funds
received

by it for the account of any Lender).

(b) Unless indemnified to its satisfaction, Agent may not be compelled to do any
act

under the Loan Papers or to take any action toward the execution or enforcement
of the powers

thereby created or to prosecute or defend any suit in respect of the Loan
Papers. If Agent requests

instructions from Lenders, or Required Lenders, as the case may be, with respect
to any act or action

in connection with any Loan Paper, Agent is entitled to refrain (without
incurring any liability to any

Person by so refraining) from that act or action unless and until it has
received instructions. In no

event, however, may Agent or any of its Representatives be required to take any
action that it or they

determine could incur for it or them criminal or onerous civil liability or that
is contrary to any Loan

Paper or applicable Law. Without limiting the generality of the foregoing, no
Lender has any right

of action against Agent as a result of Agent's acting or refraining from acting
under this Agreement

in accordance with instructions of Required Lenders (or of all Lenders, if
instructions from all

Lenders is specifically required by the terms of the Loan Papers).

(c) Agent is not responsible to any Lender or any Participant for, and each
Lender

represents and warrants that it has not relied upon Agent in respect of, (i) the
creditworthiness of any

Company and the risks involved to that Lender, (ii) the effectiveness,
enforceability, genuineness,

validity or due execution of any Loan Paper (other than by Agent), (iii) any
representation, warranty,

document, certificate, report or statement made therein (other than by Agent) or
furnished

thereunder or in connection therewith, (iv) the adequacy of any Collateral or
other collateral ever

securing the Obligation or the existence, priority or perfection of any Lien
ever granted or purported

to be granted on any collateral under any Loan Paper, or (v) the observance of
or compliance with

any of the terms, covenants or conditions of any Loan Paper on the part of any
Company. Each

Lender agrees to indemnify Agent and its Representatives and hold them harmless
from

and against (but limited to such Lender's Pro Rata Part of) any and all
liabilities,

obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable

expenses and reasonable disbursements of any kind or nature whatsoever that may
be

imposed on, asserted against, or incurred by them in any way relating to or
arising out of

the Loan Papers or any action taken or omitted by them under the Loan Papers if
Agent

and its Representatives are not reimbursed for such amounts by any Company.
Although

Agent and its Representatives have the right to be indemnified under this
Agreement for its or their

own ordinary negligence, Agent and its Representatives do not have the right to
be indemnified under

this Agreement for its or their own fraud, gross negligence or willful
misconduct.

13.6 Default; Collateral. While a Default exists, Lenders agree to promptly
confer in order that

Required Lenders or Lenders, as the case may be, may agree upon a course of
action for the enforcement

of the Rights of Lenders; and Agent is entitled to refrain from taking any
action (without incurring any liability

to any Person for so refraining) unless and until it has received instructions
from Required Lenders. In

actions with respect to any property of Borrower, Agent is acting for the
ratable benefit of each Lender.

Agent shall hold, for the ratable benefit of all Lenders, any security it
receives for the Obligation or any

guaranty of the Obligation it receives upon or in lieu of foreclosure.

13.7 Limitation of Liability. No Lender or any Participant will incur any
liability to any other

Lender or Participant, except for acts or omissions in bad faith, and neither
Agent nor any Lender or

Participant will incur any liability to any other Person for any act or omission
of any other Lender or any

Participant. No Co-Agent in its capacity as such assumes any responsibility or
obligation under this

agreement for servicing, syndication, enforcement or collection of the
indebtedness resulting from the Loans

or other advances under the Loan Papers, nor any duties as Agent under the Loan
Papers for the Lenders.

13.8 Relationship of Lenders. The Loan Papers and the documents delivered in
connection

therewith do not create a partnership or joint venture among Agent and Lenders
or among Lenders.

13.9 Collateral Matters.

(a) Each Lender authorizes and directs Agent to enter into the Security
Documents for

the ratable benefit of Lenders. Each Lender agrees that any action taken by
Agent concerning any

Collateral with the consent of, or at the request of, Required Lenders in
accordance with the

provisions of this Agreement, the Security Documents or the other Loan Papers,
and the exercise

by Agent (with the consent of, or at the request of, Required Lenders) of powers
concerning the

Collateral set forth in any Loan Paper, together with other reasonably
incidental powers, shall be

authorized and binding upon all Lenders.

(b) Agent is authorized on behalf of all Lenders, without the necessity of any
notice to

or further consent from any Lender, from time to time before a Default or
Potential Default, to take

any action with respect to any Collateral or Security Documents that may be
necessary to perfect

and maintain perfected the Liens upon the Collateral granted by the Security
Documents.

(c) Agent has no obligation whatsoever to any Lender or to any other Person to
assure

that the Collateral exists or is owned by any Company or is cared for, protected
or insured or has

been encumbered or that the Liens granted to Agent for the benefit of Lenders
under the Security

Documents have been properly or sufficiently or lawfully created, perfected,
protected or enforced,

or are entitled to any particular priority.

(d) Agent shall exercise the same care and prudent judgment with respect to the

Collateral and the Security Documents as it normally and customarily exercises
in respect of similar

collateral and security documents.

(e) Lenders irrevocably authorize Agent, at its option and in its discretion, to
release any

Lien upon any Collateral (i) upon full payment of the Obligation; (ii)
constituting property being sold

or disposed of as permitted under Section 9.10, if Agent determines that the
property being sold or

disposed is being sold or disposed in accordance with the requirements and
limitations of

Section 9.10

and Agent concurrently receives all mandatory prepayments with respect thereto,
if

any, (iii) constituting property leased to any Company under a lease that has
expired or been

terminated in a transaction permitted under this Agreement or is about to expire
and that has not

been, and is not intended by that Company to be, renewed; (iv) consisting of an
instrument evidencing

Debt pledged to Agent (for the benefit of Lenders), if the Debt evidenced
thereby has been paid in

full; or (v) if approved, authorized or ratified in writing by Required Lenders,
subject to Section

14.10. Upon request by Agent at any time, Lenders will confirm in writing
Agent's authority to

release particular types or items of Collateral under this Section 13.9(e).

(f) Lenders irrevocably authorize Agent, at its option and in its discretion, to
release any

Restricted Company from its Guaranty (i) upon full payment of the Obligation,
(ii) as permitted under

Section 8.11

, (iii) in connection with the sale of disposition of the stock (or other equity
interest)

issued by such Restricted Company permitted under Section 9.10, if Agent
determines that the

disposition or sale is in accordance with the requirements and limitations of
Section 9.10 and Agent

concurrently receives all mandatory prepayments with respect thereto, if any,
and (iv) if approved,

authorized or ratified in writing by Required Lenders, subject to Section 14.10.
Upon request by

Agent at any time, Lenders will confirm in writing Agent's authority to release
any Restricted

Company from its Guaranty under this Section 13.9(f).

13.10 Benefits of Agreement. None of the provisions of this Section 13 inure to
the benefit of any

Company or any other Person other than Agent and Lenders; consequently, no
Company or any other

Person is entitled to rely upon, or to raise as a defense, in any manner
whatsoever, the failure of Agent or any

Lender to comply with these provisions.

SECTION 14 MISCELLANEOUS

.

14.1 Headings. The headings, captions and arrangements used in any of the Loan
Papers are,

unless specified otherwise, for convenience only and shall not be deemed to
limit, amplify or modify the terms

of the Loan Papers, nor affect the meaning thereof.

14.2 Nonbusiness Days; Time. Any payment or action that is due under any Loan
Paper on a

non-Business Day may be delayed until the next-succeeding Business Day (but
interest shall continue to

accrue on any applicable payment until payment is in fact made) unless the
payment concerns a LIBOR

Loan, in which case if the next-succeeding Business Day is in the next calendar
month, then such payment

shall be made on the next-preceding Business Day. Unless otherwise indicated,
all time references (e.g., 1:00

p.m.) are to Dallas, Texas time.

14.3 Communications. Unless otherwise specifically provided, whenever any Loan
Paper requires

or permits any consent, approval, notice, request or demand from one party to
another, communication must

be in writing (which may be by telex or telecopy) to be effective and shall be
deemed to have been given

(a) if by telex, when transmitted to the appropriate telex number and the
appropriate answerback is received,

(b) if by telecopy, when transmitted to the appropriate telecopy number (and all
communications sent by

telecopy must be confirmed promptly thereafter by telephone; but any requirement
in this parenthetical shall

not affect the date when the telecopy shall be deemed to have been delivered),
(c) if by mail, on the third

Business Day after it is enclosed in an envelope and properly addressed,
stamped, sealed, and deposited in

the appropriate official postal service, or (d) if by any other means, when
actually delivered. Until changed

by notice pursuant to this Agreement, the address (and telecopy number) for each
party to a Loan Paper is

set forth on the attached Schedule 1.

14.4 Form and Number of Documents. The form, substance, and number of
counterparts of each

writing to be furnished under the Loan Papers must be satisfactory to Agent and
its counsel, each in its

reasonable discretion.

14.5 Exceptions to Covenants. The Companies may not take or fail to take any
action that is

permitted as an exception to any of the covenants contained in any Loan Paper if
that action or omission

would result in the breach of any other covenant contained in any Loan Paper.

14.6 Survival. All covenants, agreements, undertakings, representations and
warranties made in

any of the Loan Papers survive all closings under the Loan Papers and, except as
otherwise indicated, are

not affected by any investigation made by any party.

14.7 Governing Law. The Laws (other than conflict-of-laws provisions) of the
State of New

York and of the U.S. govern the Rights and duties of the parties to the Loan
Papers and the validity,

construction, enforcement and interpretation of the Loan Papers.

14.8 Invalid Provisions. Any provision in any Loan Paper held to be illegal,
invalid or

unenforceable is fully severable; the appropriate Loan Paper shall be construed
and enforced as if that

provision had never been included; and the remaining provisions shall remain in
full force and effect and shall

not be affected by the severed provision. Agent, Lenders, and the Companies
shall negotiate, in good faith,

the terms of a replacement provision as similar to the severed provision as may
be possible and be legal, valid

and enforceable.

14.9 Venue; Service of Process; Jury Trial. EACH PARTY TO ANY LOAN PAPER, IN
EACH CASE

FOR ITSELF, ITS SUCCESSORS AND ASSIGNS (AND IN THE CASE OF BORROWER, FOR EACH
OTHER

COMPANY), (A) IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE STATE
AND

FEDERAL COURTS OF THE STATE OF TEXAS, (B) IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT

PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE

OF ANY LITIGATION ARISING OUT OF OR IN CONNECTION WITH THE LOAN PAPERS AND THE
OBLIGATION

BROUGHT IN DISTRICT COURTS OF DALLAS OR HARRIS COUNTY, TEXAS, OR IN THE U.S.
DISTRICT COURT

FOR THE NORTHERN OR SOUTHERN DISTRICT OF TEXAS, DALLAS OR HOUSTON DIVISION, (C)
IRREVOCABLY

WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY OF THE AFOREMENTIONED
COURTS HAS

BEEN BROUGHT IN AN INCONVENIENT FORUM, (D) IRREVOCABLY AGREES THAT ANY LEGAL
PROCEEDING

AGAINST ANY PARTY TO ANY LOAN PAPER ARISING OUT OF OR IN CONNECTION WITH THE
LOAN PAPERS

OR THE OBLIGATION MAY BE BROUGHT IN ONE OF THE AFOREMENTIONED COURTS, AND (E)

IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ITS RESPECTIVE
RIGHTS TO A JURY

TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY LOAN
PAPER. The

scope of each of the foregoing waivers is intended to be all-encompassing of any
and all disputes that may

be filed in any court and that relate to the subject matter of this transaction,
including, without limitation,

contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims. Borrower

(for itself and on behalf of each other Company) acknowledges that these waivers
are a material inducement

to Agent's and each Lender's agreement to enter into a business relationship,
that Agent and each Lender

has already relied on these waivers in entering into this Agreement, and that
Agent and each Lender will

continue to rely on each of these waivers in related future dealings. Borrower
(for itself and on behalf of

each other Company) further warrants and represents that it has reviewed these
waivers with its legal

counsel, and that it knowingly and voluntarily agrees to each waiver following
consultation with legal counsel.

THE WAIVERS IN THIS SECTION 14.9 MAY NOT BE MODIFIED EXCEPT IN ACCORDANCE WITH
SECTION

14.10, AND SHALL, EXCEPT TO THE EXTENT WAIVED OR MODIFIED IN ACCORDANCE WITH
SECTION 14.10,

APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR PLACEMENTS TO OR OF THIS OR
ANY

OTHER LOAN PAPER. In the event of Litigation, this Agreement may be filed as a
written consent to a trial

by the court.

14.10 Amendments, Consents, Conflicts and Waivers.

(a) Unless otherwise specifically provided, (i) this Agreement may be amended
only by

an instrument in writing executed by Borrower, Agent and Required Lenders and
supplemented only

by documents delivered or to be delivered in accordance with the express terms
of this Agreement,

and (ii) the other Loan Papers may only be the subject of an amendment,
modification or waiver that

has been approved by Required Lenders and Borrower.

(b) Any amendment to or consent or waiver under any Loan Paper that purports to

accomplish any of the following must be by an instrument in writing executed by
Borrower and Agent

and executed (or approved, as the case may be) by each Lender: (i) extend the
due date, decrease

the amount of, or reallocate any scheduled payment of the Obligation; (ii)
decrease any rate or

amount of interest, fees or other sums payable to Agent or Lenders under this
Agreement (except

such reductions as are contemplated by this Agreement); (iii) change the
definition of "Committed

Sum," "Required Lenders," or "Termination Date;" (iv) increase any one or more
Lenders'

Committed Sums; (v) waive compliance with, amend or release (in whole or in
part) the Guaranties

of VRI or all or substantially all of the Restricted Subsidiaries; (vi) release
all or substantially all of

the Collateral, or (vii) change this clause (b), Section 9.12 or any other
matter specifically requiring

the consent of all Lenders under this Agreement.

(c) Any conflict or ambiguity between the terms and provisions of this Agreement
and

terms and provisions in any other Loan Paper is controlled by the terms and
provisions of this

Agreement.

(d) No course of dealing or any failure or delay by Agent, any Lender, or any of
their

respective Representatives with respect to exercising any Right of Agent or any
Lender under this

Agreement operates as a waiver thereof. A waiver must be in writing and signed
by Agent and

Lenders (or Required Lenders, if permitted under this Agreement) to be
effective, and a waiver will

be effective only in the specific instance and for the specific purpose for
which it is given.

14.11 Multiple Counterparts. Each Loan Paper (other than the Notes) may be
executed in a

number of identical counterparts, each of which shall be deemed an original for
all purposes and all of which

constitute, collectively, one agreement; but, in making proof of thereof, it
shall not be necessary to produce

or account for more than one counterpart. Each Lender need not execute the same
counterpart of this

Agreement so long as identical counterparts are executed by Borrower, each
Lender, and Agent. This

Agreement shall become effective when counterparts of this Agreement have been
executed and delivered

to Agent by each Lender, Agent and Borrower, or, in the case only of Lenders,
when Agent has received

telecopied, telexed or other evidence satisfactory to it that each Lender has
executed and is delivering to

Agent a counterpart of this Agreement.

14.12 Successors and Assigns; Participation.

(a) The Loan Papers bind and inure to the benefit of the parties hereto, any
intended

beneficiary thereof, and each of their respective successors and permitted
assigns. No Lender may

transfer, pledge, assign, sell any participation in, or otherwise encumber its
portion of the Obligation,

except

as permitted by this Section 14.12.

(b) Any Lender may, in the ordinary course of its business, at any time sell to
one or

more Persons (each a "Participant") participating interests in all or any part
of its Rights and

obligations under the Loan Papers. The selling Lender shall remain a "Lender"
under this

Agreement (and the Participant shall not constitute a "Lender" under this
Agreement) and its

obligations under this Agreement shall remain unchanged. The selling Lender
shall remain solely

responsible for the performance of its obligations under the Loan Papers and
shall remain the holder

of its share of the Principal Debt for all purposes under this Agreement.
Borrower and Agent shall

continue to deal solely and directly with the selling Lender in connection with
that Lender's Rights

and obligations under the Loan Papers. Participants have no Rights under the
Loan Papers, other

than certain voting Rights as provided below. Subject to the following, each
Lender may obtain (on

behalf of its Participants) the benefits of Section 3 with respect to all
participations in its part of the

Obligation outstanding from time to time so long as Borrower is not obligated to
pay any amount in

excess of the amount that would be due to that Lender under Section 3 calculated
as though no

participation have been made. No Lender may sell any participating interest
under which the

Participant has any Rights to approve any amendment, modification or waiver of
any Loan Paper,

except

to the extent the amendment, modification or waiver extends the due date for
payment of any

principal, interest or fees due under the Loan Papers or reduces the interest
rate or the amount of

principal or fees applicable to the Obligation (except reductions contemplated
by this Agreement).

(c) Any Lender may at any time, in the ordinary course of its business, assign
to any

Eligible Assignee (each a "Purchaser") all or any part (but if less than all,
then not less than

$5,000,000) of its Rights and obligations under the Loan Papers. In each case,
the Purchaser shall

assume those Rights and obligations under an assignment agreement substantially
in the form of the

attached Exhibit G. Each assignment under this Section 14.12(c) shall include a
ratable interest in

the assigning Lender's Rights and obligations under the Facility. Upon (i)
delivery of an executed

copy of the assignment agreement to Borrower and Agent and the recordation
thereof in the Register

provided for in Section 14.12(d) and (ii) with respect to each assignment after
the completion of the

primary syndication of the Facility, payment of a fee of $3,500 from the
transferor to Agent, from and

after the effective date specified in the Assignment Agreement (which shall be
after the date of

delivery), the Purchaser shall for all purposes be a Lender party to this
Agreement and shall have all

the Rights and obligations of a Lender under this Agreement to the same extent
as if it were an

original party to this Agreement with commitments as set forth in the assignment
agreement, and the

transferor Lender shall be released from its obligations under this Agreement to
a corresponding

extent, and, except as provided in the following sentence, no further consent or
action by Borrower,

Lenders or Agent shall be required. Upon the consummation of any transfer to a
Purchaser under

this clause (c), the then-existing Schedule 1 shall automatically be deemed to
reflect the name,

address and Committed Sum of such Purchaser, Agent shall deliver to Borrower and
Lenders an

amended Schedule 1 reflecting those changes, and Borrower shall execute and
deliver to the

Purchaser and, if applicable, such Lender, a Note in the face amount of its
Committed Sum and the

transferor Lender shall return to Borrower the Note previously delivered to it
under this Agreement.

A Purchaser is subject to all the provisions in this section as if it were a
Lender signatory to this

Agreement as of the date of this Agreement.

(d) Agent shall maintain at its address on Schedule 1 a copy of each Lender
assignment

agreement delivered to it in accordance with the terms of Section 14.12(c) and a
register for the

recordation of the principal amount, Type and Interest Period of each Loan and
the names, addresses

and Committed Sums of each Lender from time to time (the "Register"). Agent will
make

reasonable efforts to maintain the accuracy of the Register and to promptly
update the Register from

time to time, as necessary. The entries in the Register shall be conclusive in
the absence of manifest

error and Borrower, Agent and Lenders may treat each Person whose name is
recorded in the

Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement. The

Register shall be available for inspection by Borrower and each Lender, at any
reasonable time and

from time to time upon reasonable prior notice.

(e) This Section 14.12 relates to absolute assignments and, notwithstanding

Section 14.12(a)

, does not prohibit assignments creating security interests. Specifically,
without

limitation, any Lender may at any time, without the consent of Borrower or
Agent, assign all or any

part of its Rights under the Loan Papers to a Federal Reserve Bank without
releasing the transferor

Lender from its obligations thereunder.

14.13 Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. Each

Company's obligations under the Loan Papers remain in full force and effect
until the Total Commitment is

terminated and the Obligation is paid in full (except for provisions under the
Loan Papers expressly intended

to survive payment of the Obligation and termination of the Loan Papers). If at
any time any payment of the

principal of or interest on any Note or any other amount payable by Borrower or
any other obligor on the

Obligation under any Loan Paper is rescinded or must be restored or returned
upon the insolvency, bankruptcy

or reorganization of Borrower or otherwise, the obligations of each Company
under the Loan Papers with

respect to that payment shall be reinstated as though the payment had been due
but not made at that time.

14.14 Set-Off. In addition to any rights and remedies of the Lenders provided by
law, upon the

occurrence and during the continuance of any Default, each Lender is authorized
at any time and from time

to time, with prior notice to the Borrower or any other Company, to set off and
apply any and all deposits

(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any

time owing by, such Lender to or for the credit or the account of the respective
Companies against any and

all of the Obligation owing to such Lender, now or hereafter existing.

14.15 Entirety. THE RIGHTS AND OBLIGATIONS OF THE COMPANIES, LENDERS AND AGENT

SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS AND INSTRUMENTS,
AND

ANY PRIOR ORAL AGREEMENTS AMONG THE PARTIES ARE SUPERSEDED BY AND MERGED INTO
THOSE

WRITINGS. THIS AGREEMENT AND THE OTHER WRITTEN LOAN PAPERS (EACH AS AMENDED IN
WRITING

FROM TIME TO TIME) EXECUTED BY ANY COMPANY, ANY LENDER OR AGENT REPRESENT THE
FINAL

AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,

CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN

ORAL AGREEMENTS AMONG THE PARTIES. This Agreement supersedes all prior written
agreements and

understandings relating to the subject matter hereof and may be supplemented
only by documents delivered

in accordance with the terms hereof.

[Signatures begin on the next page and continue on the following pages.]

 

BORROWER:

THE VAIL CORPORATION

By:

______________________

Name:

______________________

Title:

______________________

 

 

AGENT:

BANK OF AMERICA, N.A., as Agent

By:

_____________________

 

Daniel M. Killian

 

Managing Director

 

 

SOLE LEAD ARRANGER, SOLE BOOK MANAGER, AND SYNDICATION AGENT:

BANC OF AMERICA SECURITIES LLC

By:

______________________________

 

Kathleen H. Price

 

Vice President

 

LENDER:

BANK OF AMERICA, N.A.

By:

_____________________

 

Daniel M. Killian

 

Managing Director

 

 

 

LENDER:

FLEET NATIONAL BANK

By:

_____________________

Name:

_____________________

Title:

_____________________

 

LENDER:

U.S. BANK NATIONAL ASSOCIATION

By:

_____________________

Name:

_____________________

Title:

_____________________

 

LENDER:

THE BANK OF NOVA SCOTIA

By:

_____________________

Name:

_____________________

Title:

_____________________

 

LENDER:

CREDIT LYONNAIS NEW YORK BRANCH

By:

_____________________

Name:

_____________________

Title:

_____________________

 

LENDER:

COMPASS BANK, a Alabama State Chartered Bank

By:

_____________________

Name:

_____________________

Title:

_____________________

 

LENDER:

BANKERS TRUST COMPANY

By:

_____________________

Name:

_____________________

Title:

_____________________

 

LENDER:

CIBC INC.

By:

_____________________

Name:

_____________________

Title:

_____________________

 

LENDER:

HARRIS TRUST AND SAVINGS BANK

By:

_____________________

Name:

_____________________

Title:

_____________________

 

LENDER:

WELLS FARGO BANK NATIONAL ASSOCIATION

By:

_____________________

Name:

_____________________

Title:

_____________________

GUARANTORS' CONSENT AND AGREEMENT

As an inducement to Agent and Lenders to execute, and in consideration of
Agent's and Lenders'

execution of the foregoing, the undersigned hereby consent thereto and agree
that the same shall in no way

release, diminish, impair, reduce or otherwise adversely affect the respective
obligations and liabilities of each

of the undersigned under the Guaranty described in this Agreement, or any
agreements, documents or

instruments executed by any of the undersigned to create liens, security
interests or charges to secure any

of the indebtedness under the Loan Papers, all of which obligations and
liabilities are, and shall continue to

be, in full force and effect. This consent and agreement shall be binding upon
the undersigned, and the

respective successors and assigns of each, and shall inure to the benefit of
Agent and Lenders, and respective

successors and assigns of each.

Vail Resorts, Inc.

Beaver Creek Associates, Inc.

Beaver Creek Consultants, Inc.

Beaver Creek Food Services, Inc.

Breckenridge Resort Properties, Inc.

Complete Telecommunications, Inc.

GHTV, Inc.

Gillett Broadcasting, Inc.

Grand Teton Lodge Company

Jackson Hole Golf and Tennis Club, Inc.

JHL&S LLC

Keystone Conference Services, Inc.

Keystone Development Sales, Inc.

Keystone Food & Beverage Company

Keystone Resort Property Management Company

Larkspur Restaurant & Bar, LLC

Lodge Properties, Inc.

Lodge Realty, Inc.

Mountain Thunder, Inc.

Property Management Acquisition Corp., Inc.

Teton Hospitality LLC

Teton Hospitality Services, Inc.

The Village at Breckenridge Acquisition Corp., Inc.

Vail/Arrowhead, Inc.

Vail Associates Consultants, Inc.

Vail Associates Holdings, Ltd.

Vail Associates Investments, Inc.

Vail Associates Management Company

Vail Associates Real Estate, Inc.

Vail/Battle Mountain, Inc.

Vail/Beaver Creek Resort Properties, Inc.

Vail Food Services, Inc.

Vail Holdings, Inc.

Vail Resorts Development Company

Vail RR, Inc.

Vail Summit Resorts, Inc.

Vail Trademarks, Inc.

VAMHC, Inc.

VA Rancho Mirage I, Inc.

VA Rancho Mirage II, Inc.

VR Holdings, Inc.

 

By:

_________________________________

James P. Donohue

Senior Vice President or Vice President of each

of the above