OPERATING AGREEMENT

                                       OF

                            NORTHSTAR HOLDINGS, LLC


                                     [date]





THE  OWNERSHIP  INTERESTS  IN THIS  LIMITED  LIABILITY  COMPANY  HAVE  NOT BEEN
REGISTERED  WITH THE  SECURITIES  AND EXCHANGE  COMMISSION OR STATE  SECURITIES
AUTHORITIES  AND MAY NOT BE SOLD OR  TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION  STATEMENT  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  AND ANY
APPLICABLE  STATE  SECURITIES  LAWS OR AN OPINION OF COUNSEL  ACCEPTABLE TO THE
MANAGER THAT  REGISTRATION  IS NOT REQUIRED.  THE SALE OR OTHER TRANSFER OF THE
OWNERSHIP INTERESTS IS ALSO RESTRICTED BY CERTAIN PROVISIONS IN THIS AGREEMENT.
<PAGE>

                               TABLE OF CONTENTS

                                                                           Page

ARTICLE 1:  FORMATION AND DEFINITIONS.....................................- 1 -
      1.1   Formation.....................................................- 1 -
      1.2   Name..........................................................- 1 -
      1.3   Members.......................................................- 1 -
      1.4   Economic Interest.............................................- 1 -
      1.5   Office and Agent..............................................- 1 -
      1.6   Foreign Qualification.........................................- 1 -
      1.7   Term..........................................................- 2 -
      1.8   Definitions...................................................- 2 -

ARTICLE 2:  PURPOSES AND POWERS...........................................- 2 -
      2.1   Principal Purpose.............................................- 2 -
      2.3   Other Purposes................................................- 3 -
      2.4   Powers........................................................- 3 -

ARTICLE 3:  CAPITAL OF THE COMPANY........................................- 4 -
      3.1   Contributions.................................................- 4 -
      3.2   Additional Contributions in Excess of Capital Commitment......- 5 -
      3.3   The Property..................................................- 7 -
      3.4   Capital Accounts..............................................- 7 -
      3.5   Transfer......................................................- 8 -
      3.6   No Withdrawal of Capital......................................- 8 -
      3.7   No Interest on Capital........................................- 8 -
      3.8   No Drawing Accounts...........................................- 8 -
      3.9   Management Fee................................................- 8 -
      3.10  Contributions in the Event of an Emergency....................- 9 -
      3.11  Working Capital Reserve......................................- 10 -

ARTICLE 4:  INCOME AND LOSSES............................................- 10 -
      4.1   Allocation of Net Income and Net Loss........................- 10 -
      4.2   Company Minimum Gain Chargeback..............................- 13 -
      4.3   Minimum Gain Chargeback for Member Nonrecourse Debt..........- 13 -
      4.4   Qualified Income Offset......................................- 13 -
      4.5   Limit on Loss Allocations....................................- 14 -
      4.6   Net Loss from Member Nonrecourse Debt........................- 14 -
      4.7   Nonrecourse Deductions.......................................- 14 -
      4.8   Section 754 Adjustments......................................- 14 -
      4.9   Reversal of Mandatory Allocations............................- 14 -
      4.10  Compliance with Code.........................................- 14 -
<PAGE>

      4.11  Tax Allocations -- Section 704(c)............................- 14 -
      4.12  Allocation on Transfer.......................................- 14 -

ARTICLE 5:  DISTRIBUTIONS................................................- 15 -
      5.1   Distributions Generally......................................- 15 -
      5.2   Special Distributions........................................- 16 -
      5.3   Payment......................................................- 16 -
      5.4   Withholding..................................................- 16 -
      5.5   Distribution Limitation......................................- 16 -
      5.6   Booth Creek Return...........................................- 17 -

ARTICLE 6:  MANAGEMENT...................................................- 17 -
      6.1   Management...................................................- 17 -
      6.2   Actions or Decisions by the Manager..........................- 18 -
      6.3   Actions or Decisions Requiring Reasonable Consent............- 19 -
      6.4   Actions or Decisions Requiring Discretionary Consent of
            Booth Creek..................................................- 20 -
      6.5   Amendment of Agreement.......................................- 22 -
      6.7   Effect of Dissolution, Resignation or Retirement.............- 23 -
      6.8   Other Activities.............................................- 23 -
      6.9   Payment of Management Costs..................................- 23 -
      6.10  Master Development Plan......................................- 23 -
      6.11  Annual Plan..................................................- 23 -
      6.12  Amendments to Annual Plan....................................- 24 -
      6.13  Off-Site Mitigation..........................................- 24 -

ARTICLE 7:  MEETINGS OF MEMBERS..........................................- 24 -
      7.1   Special Meetings.............................................- 24 -
      7.2   Place........................................................- 24 -
      7.3   Notice.......................................................- 24 -
      7.4   Waiver of Notice.............................................- 24 -
      7.5   Record Date..................................................- 25 -
      7.6   Quorum.......................................................- 25 -
      7.7   Manner of Acting.............................................- 25 -
      7.8   Proxies......................................................- 25 -
      7.9   Meetings by Telephone........................................- 25 -
      7.10  Action Without a Meeting.....................................- 25 -

ARTICLE 8:  LIABILITY OF A MEMBER........................................- 25 -
      8.1   Limited Liability............................................- 25 -
      8.2   Capital Contribution.........................................- 26 -
      8.3   Capital Return...............................................- 26 -
      8.4   Reliance.....................................................- 26 -
<PAGE>

ARTICLE 9:  INDEMNIFICATION..............................................- 26 -
      9.1   Indemnification by Company...................................- 26 -
      9.2   Expense Advancement..........................................- 27 -
      9.3   Insurance....................................................- 27 -

ARTICLE 10: ACCOUNTING AND REPORTING.....................................- 27 -
      10.1  Fiscal Year..................................................- 27 -
      10.2  Accounting Method............................................- 27 -
      10.3  Tax Classification...........................................- 27 -
      10.4  Returns......................................................- 28 -
      10.5  Reports......................................................- 28 -
      10.6  Annual Audit.................................................- 28 -
      10.7  Books and Records............................................- 28 -
      10.8  Information..................................................- 29 -
      10.9  Banking......................................................- 30 -
      10.11 No Partnership...............................................- 32 -

ARTICLE 11: DISSOLUTION..................................................- 33 -
      11.1  Dissolution..................................................- 33 -
      11.2  Events of Withdrawal.........................................- 33 -
      11.3  Continuation.................................................- 34 -
      11.4  Payment for Rights...........................................- 34 -

ARTICLE 12: LIQUIDATION..................................................- 34 -
      12.1  Liquidation..................................................- 34 -
      12.2  Priority of Payment..........................................- 34 -
      12.3  Liquidating Distributions....................................- 35 -
      12.4  No Restoration Obligation....................................- 36 -
      12.5  Liquidating Reports..........................................- 36 -
      12.6  Certificate of Cancellation..................................- 36 -

ARTICLE 13: TRANSFER RESTRICTIONS........................................- 36 -
      13.1  General Restriction..........................................- 36 -
      13.2  No Member Rights.............................................- 36 -
      13.3  Permitted Transferee.........................................- 36 -
      13.4  General Conditions on Transfers..............................- 37 -
      13.6  Rights of Transferees........................................- 38 -
      13.7  Security Interest............................................- 38 -
      13.8  Sale of Resort...............................................- 39 -
      13.9  Break-Up Remedy..............................................- 39 -
      13.10 Reserved.....................................................- 41 -

ARTICLE 14: DISPUTE RESOLUTION...........................................- 43 -
<PAGE>

ARTICLE 15: GENERAL PROVISIONS...........................................- 43 -
      15.1  Amendment....................................................- 43 -
      15.2  Representations..............................................- 43 -
      15.3  Unregistered Interests.......................................- 44 -
      15.4  Waiver of Dissolution Rights.................................- 45 -
      15.5  Waiver of Partition Right....................................- 45 -
      15.6  Waivers and Consents.........................................- 45 -
      15.7  Equitable Relief.............................................- 45 -
      15.8  Remedies for Breach..........................................- 45 -
      15.9  Costs........................................................- 46 -
      15.10 Indemnification..............................................- 46 -
      15.11 Counterparts.................................................- 46 -
      15.12 Notice.......................................................- 46 -
      15.13 Deemed Notice................................................- 46 -
      15.14 Partial Invalidity...........................................- 46 -
      15.15 Entire Agreement.............................................- 47 -
      15.16 Benefit......................................................- 47 -
      15.17 Binding Effect...............................................- 47 -
      15.18 Further Assurances...........................................- 47 -
      15.19 Headings.....................................................- 47 -
      15.20 Terms........................................................- 47 -
      15.21 Governing Law................................................- 47 -
<PAGE>


                              OPERATING AGREEMENT

                                       OF

                            NORTHSTAR HOLDINGS, LLC


This  Operating  Agreement  is made as of [date],  by and between  Trimont Land
Company,  a  California  corporation  ("Booth  Creek")  and  East  West  Resort
Development V,  L.L.L.P.,  a Delaware  limited  liability  limited  partnership
("EWRD  V"),  as all of the  Members  of  Northstar  Holdings,  LLC, a Delaware
limited  liability  company.  In  consideration  of  our  mutual  promises  and
obligations, and with the intent of being legally bound, we agree as follows:


ARTICLE 1: FORMATION AND DEFINITIONS

1.1  Formation.  The  Company was formed on [date] by filing a  Certificate  of
Formation  with the  Delaware  Secretary  of State  pursuant  to the Act and on
behalf of all of the initial Members of the Company.  Unless expressly provided
otherwise (or reasonably  implied by an express  provision) in this  Agreement,
the rights,  duties and  liabilities  of the Members of the Company  will be as
provided in the Act,  the  provisions  of this  Agreement  will  control to the
extent permitted by the Act, and the conflicting  provisions of the Act will be
deemed waived to the maximum extent permitted in the Act.

1.2 Name. The name of the Company is Northstar  Holdings,  LLC. The business of
the Company  will be  conducted  under such name,  as well as any other name or
names as the Company may from time to time determine.

1.3  Members.  The name and address of each Member of the Company  (admitted as
provided in 3.1) is set forth on the attached Exhibit A.

1.4 Economic  Interest.  The Economic Interest initially held by each Member is
set forth on the attached  Exhibit B. The  economic  interest of the Company in
each  Project  LLC will in all  cases  be 80%  (such  that  EWRD V and the EWRD
Parties have,  in the  aggregate,  an 80% indirect and direct  interest in each
Project LLC and Booth Creek has a 20% indirect  interest in each Project  LLC),
subject to the other provisions of this Agreement  providing for dilution under
certain circumstances.

1.5 Office and Agent. The initial  registered office of the Company in Delaware
will be at 1013 Centre Road, Wilmington, New Castle County, Delaware 19805, and
its registered agent will be the Corporation  Service Company.  The Company may
change its registered office or registered agent in Delaware in accordance with
the Act.
<PAGE>

1.6  Foreign  Qualification.  The  Manager  will [a]  cause the  Company  to be
qualified  or  registered  as a foreign  limited  liability  company  under the
provisions of California law and cause such status to be maintained for so long
as the Company owns any real  property or otherwise  transacts  business in the
State of  California,  and [b] cause the  Company  to be  registered  under the
assumed or fictitious  name statutes or similar laws in the State of California
and in any other  jurisdiction  in which the Company  transacts  business.  The
initial   registered  office  of  the  Company  in  California  is  located  at
_________________________  [To be filled in with the  physical  address  of the
East West office in the Northstar  area],  and its initial  registered agent in
California is  _________________[To  be filed in with the name of the principal
East West employee located in the Northstar area]. The Company may subsequently
change its  registered  office or registered  agent in California in accordance
with  the  Beverly  Killea  Limited  Liability  Company  Act  of the  State  of
California.  The Company will also apply to the Colorado Secretary of State for
a  certificate  of  authority  to transact  business in  Colorado.  The initial
registered office of the Company in Colorado is located at 100 E. Thomas Place,
Beaver Creek Resort,  Avon, Colorado 81620, and its initial registered agent in
Colorado is  Christina  V.  Wright.  The Company  may  subsequently  change its
registered  office or  registered  agent in  Colorado  in  accordance  with the
Colorado Limited Liability Company Act. The Company will apply for any required
certificate of authority to do business in any other state or jurisdiction,  as
required or appropriate.

1.7 Term.  The  Company  will be  effective  from the date its  Certificate  of
Formation  is filed with the Delaware  Secretary of State and will  continue in
perpetuity,  unless and until a Dissolution occurs under 11.1 and a Certificate
of Termination is filed with the Delaware Secretary of State pursuant to 12.6.

1.8  Definitions.  Certain  definitions  used in this  Agreement are defined in
Exhibit U.


ARTICLE 2: PURPOSES AND POWERS


2.1  Principal  Purpose.  Subject  to the  provisions  of this  Agreement,  the
business and sole  purpose of the Company is,  whether  directly or  indirectly
through one or more  Project  LLC's,  [a] to  acquire,  own,  hold,  construct,
develop,  operate,  sell, or otherwise dispose of the Property and the Ten Year
Option Property,  if any, [b] to form,  capitalize,  operate, and dispose of an
entity or entities to engage in such other  operating  businesses as are agreed
to in writing by EWRD V and Booth Creek, [c] to borrow money pursuant to one or
more  construction  loans or otherwise  in  accordance  with this  Agreement in
furtherance  of the  business of the Company and to issue  promissory  notes or
other  evidences of indebtedness  in connection  with such  borrowings,  [d] to
grant one or more  mortgages,  deeds of  trust,  pledges  or other  liens on or
security  interests in all or any portion of the assets of the Company (subject
to restrictions  set forth elsewhere in this Agreement) to secure the Company's
obligations as debtor under any loans, lines of credit, debt offerings,  credit
facilities,  or other financing  arrangements  from time to time established to
finance any portion of the Company's activities, or [e] to do any and all other
acts or things which may be reasonably  incidental or necessary to carry on the
business of the Company as contemplated by this Agreement.  Except as otherwise
<PAGE>

provided in this  Agreement,  the Company will not engage in any other activity
or  business,  and no Member  will have any  authority  to hold itself out as a
general agent of another Member in any other business or activity.

2.2 Certain  References.  The Company  expects to own and operate  each Project
through a Project LLC created exclusively for that purpose.  For convenience of
reference in this Agreement,  the Company is sometimes referred to as the owner
of a Project and the entity  which  sells,  transfers  or  otherwise  conveys a
Project.  No such reference should be construed to evidence any intent that any
Project is, in fact,  owned  directly by, or sold,  transferred  or disposed of
directly by, the Company,  that any assets or  liabilities  relating to any one
Project are to be  commingled  with any assets or  liabilities  relating to any
other  Project,  or that the creditors of any one Project are to have access to
the assets of any other Project to satisfy  their claims.  Where the context so
requires,  any  reference  to the  Company  will be  construed  instead to be a
reference to the relevant Project LLC, and any reference to the sale,  transfer
or  disposition  of a Project by the Company will be construed  instead to be a
reference to the sale,  transfer or disposition of that Project by the relevant
Project  LLC,  or to the sale,  transfer or  disposition  by the Company of its
Ownership Interest in the relevant Project LLC.

2.3 Other Purposes.  The Company may engage in activities related or incidental
to its principal purpose,  as well as any other business or investment activity
agreed to in  writing  by the  affirmative  Vote of all  Members.  However,  as
provided in the Act,  the  Company  may not engage in the  business of granting
policies of insurance,  assuming insurance risks,  issuing debt instruments for
circulation as money or receiving deposits of money.

2.4 Powers.  The Company has all of the powers  granted to a limited  liability
company under the Act, including, without limitation, the power:

[a]  to conduct its business, carry on its operations and have and exercise all
     powers granted to a limited  liability company by the Act, in the State of
     California or in any other state, territory, district or possession of the
     United States,  or any foreign country in which the conduct of business by
     the  Company  may  be   necessary,   convenient   or   incidental  to  the
     accomplishment of the purposes of the Company;

[b]  to acquire, own, hold, operate,  maintain,  finance,  improve,  construct,
     renovate,  expand, lease, sell, convey,  mortgage,  transfer,  demolish or
     dispose of all or part of the Property,  the Ten Year Option Property,  if
     any, and the Ancillary Property,  if any, as may be necessary,  convenient
     or incidental to the accomplishment of the purposes of the Company;

[c]  to enter into,  perform and carry out  contracts  of any kind,  including,
     without limitation, contracts with any Member, any Affiliate of any Member
     or any agent of the Company necessary, convenient, desirable or incidental
     to the accomplishment of the purposes of the Company;
<PAGE>

[d]  to sue and be sued,  complain and defend and participate in administrative
     or other proceedings, in its name;

[e]  to appoint  officers,  employees  and agents of the Company,  define their
     duties and fix their compensation, if any;

[f]  to  indemnify  any  Person  in  accordance  with the Act,  subject  to the
     provisions  of  this  Agreement,  and to  obtain  any  and  all  types  of
     insurance;

[g]  to cease its activities and cancel its Certificate of Formation;

[h]  to negotiate, enter into, renegotiate,  extend, renew, terminate,  modify,
     amend, waive,  execute,  acknowledge or take any other action with respect
     to any lease,  contract,  agreement,  deed of trust,  security  agreement,
     pledge, collateral assignment, or other lien on the assets of the Company;

[i]  to pay, collect,  compromise,  litigate,  arbitrate or otherwise adjust or
     settle any and all claims or demands of or against  the Company or to hold
     such proceeds against the payment of contingent liabilities; and

[j]  to make execute and file any and all documents or  instruments  necessary,
     convenient,  desirable or incidental to the accomplishment of the purposes
     of the Company.


ARTICLE 3: CAPITAL OF THE COMPANY

3.1  Contributions.

[a]  Each  Member  separately  agrees to make the Initial  Contribution  to the
     Company in cash in the amounts,  in the manner, and at the times set forth
     opposite such Member's name on the attached  Exhibit C. Each Member agrees
     to make such Member's  Initial  Contribution by confirmed wire transfer of
     money,  in United States dollars and immediately  available  funds, to the
     Company's  account  (or,  alternatively,  such  payment may be made as the
     Company may otherwise agree).

[b]  To the extent that the balance of the EWRD Capital  Commitment  Account is
     less  than the  Capital  Commitment,  and  except  to the  extent  that an
     insufficiency  of  funds  results  from  an  Emergency,   EWRD  will  make
     Additional Contributions, at such times and in such installments as EWRD V
     reasonably determines are necessary to fund the expenditures  contemplated
     by the Master Development Plan and each subsequent Annual Plan and to fund
     the operations of the Company in the ordinary course of its business.
<PAGE>

[c]  If Booth Creek  reasonably  determines that Additional  Contributions  are
     required  to be made by EWRD V under [b],  Booth  Creek may give Notice to
     EWRD V of the amount  which  Booth  Creek  reasonably  believes  should be
     contributed  by EWRD V  pursuant  to [b].  Such  Notice  will  include  an
     explanation   of  the  reasons  Booth  Creek   believes  such   Additional
     Contributions  are required.  To the extent that Additional  Contributions
     are required  under [b],  EWRD V will make such  Additional  Contributions
     within 30 days after receipt of such Notice.

[d]  Any  breach  by EWRD V of its  obligations  under  [c] will be a  "Funding
     Default." Within 30 days after the occurrence of a Funding Default,  Booth
     Creek may give  Notice  of such  Funding  Default  to EWRD V, and if Booth
     Creek fails timely to give such Notice, Booth Creek will be deemed to have
     waived its remedies  with respect to such Funding  Default.  Following the
     receipt of any such Notice,  [i] the Company will be required to convey to
     Booth Creek, by grant deed, the Conveyance Property, free and clear of all
     liens and encumbrances  (except for Permitted  Liens),  on or prior to the
     later of [A] the date  which is 60 days  after  EWRD V's  receipt  of such
     Notice  and [B] the date  which  is 30 days  after  the date on which  the
     Conveyance  Property may first be legally conveyed,  [ii] Booth Creek will
     be required to pay to EWRD V, the Break-Up Infrastructure Costs (excluding
     Excess Infrastructure Costs) with respect to the Conveyance Property, such
     payment to be made at the time the  Conveyance  Property  is  conveyed  to
     Booth Creek by the delivery of an unsecured promissory note in the form of
     Exhibit L, [iii] the Company will  continue to develop the Projects  other
     than the Projects located on the Conveyance Property, but will be required
     to develop such  Projects  with  reasonable  diligence  after such time as
     Booth Creek has caused the development of the Village Core to be more than
     80% completed in accordance with the Master  Development  Plan, as amended
     from time to time,  [iv] upon  conveyance  of the  Conveyance  Property to
     Booth Creek,  this Agreement will be  automatically  amended,  without the
     requirement  of a signature or any other  action by any Person,  such that
     all of the  provisions  in 6.3 (other  than  6.3[b]) are moved to, and are
     governed by, the provisions of 6.2, and the provisions of 6.4[i] are moved
     to, and are  governed by, the  provisions  of 6.3, and [v] Booth Creek may
     make  Additional  Contributions  to  the  Company  which  will  be  deemed
     Additional Contributions for Excess Capital and bear a Preferred Return of
     15% until the closing of a purchase and sale under 13.12[b].  In addition,
     Booth Creek will have the remedy set forth in 13.12[a]  with  respect to a
     Funding Default.

[e]  Except as otherwise  provided in 3.1, 3.2 and 3.10, no Member is permitted
     or required to make Capital  Contributions  to the  Company.  The remedies
     provided for in this 3.1, including the remedies provided for by reference
     to  13.12[a],  are the sole and  exclusive  remedies  of Booth  Creek with
     respect to any Funding Default.

3.2  Additional Contributions in Excess of Capital Commitment.
<PAGE>

[a]  During any period in which EWRD V has  satisfied  its Capital  Commitment,
     either  Member,  in good faith,  may propose by Notice to the other Member
     that the Members make Additional  Contributions  for Excess Capital to the
     Company,  in an amount  reasonably  determined by the proposing  Member to
     fund  the  costs  of  developing  the  Property  and the Ten  Year  Option
     Property, if any. In addition,  if an Emergency has occurred,  the Members
     may make Additional Contributions for Excess Capital as provided in 3.10.

[b]  If both Members,  in the exercise of their  reasonable  discretion,  agree
     that the making of such Additional  Contributions for Excess Capital is in
     the best  interests  of the Company in order to complete any Project as to
     which  additional  capital is necessary in order to maximize return to the
     Members,  each Member will have the right (but not the obligation) to make
     its pro rata share of the  proposed  Additional  Contributions  for Excess
     Capital in  proportion  to such  Member's  Funding  Percentage.  If either
     Member  fails  to make  its pro  rata  share  of the  proposed  Additional
     Contribution for Excess Capital within 90 days after receipt of the Notice
     from the other  Member,  such other  Member  may make the entire  proposed
     Additional Contribution for Excess Capital.  Additional  Contributions for
     Excess Capital will bear a 15% Preferred Return,  but will not result in a
     change to the  Economic  Interests  of the  Members  except as provided in
     3.10.  If Booth  Creek  elects  to make its pro rata  share of a  proposed
     Additional  Contribution  for Excess  Capital and EWRD V does not elect to
     make  its pro rata  share of such  proposed  Additional  Contribution  for
     Excess Capital,  then,  subject to the right of first offer  provisions in
     [c], the Company may, at the discretion of Booth Creek,  admit  additional
     Persons  (each,  a "New  Member") to the  particular  Project LLC to which
     Booth  Creek's   Additional   Contribution  for  Excess  Capital  will  be
     allocated. Any contribution by a New Member must be made in cash.

[c]  If Booth Creek  desires to admit a New Member to a Project LLC as provided
     in [b],  Booth  Creek will give Notice (an  "Admission  Notice") to EWRD V
     setting  forth  the  terms  on which it  proposes  to admit a New  Member,
     including  the amount of cash which such New Member would  contribute  and
     the economic interest which such New Member would receive. For a period of
     90 days  following  the  receipt of an  Admission  Notice,  EWRD V (or its
     nominee) may elect to make such cash  contribution  on the terms set forth
     in the Admission Notice by giving Notice to Booth Creek. If EWRD V (or its
     nominee) makes such election and  contributes  such cash to the applicable
     Project LLC within such 90 day period, EWRD V (or its nominee) will become
     the New Member on the terms set forth in the Admission Notice,  subject to
     such New Member's  full  compliance  with the other terms of the Operating
     Agreement of the  applicable  Project LLC relating to the admission of new
     members.  If EWRD V (or its nominee)  does not timely give such Notice and
     make such  contribution,  Booth  Creek may, in its  discretion,  cause the
     applicable Project LLC to admit a New Member on the terms set forth in the
     Admission  Notice,  subject to such New Member's full  compliance with the
     other  terms of the  Operating  Agreement  of the  applicable  Project LLC
     relating to the  admission  of new members;  but if such  admission is not
     made  within  180 days  following  the  expiration  of the  90-day  period
     referenced  in the preceding  sentence,  Booth Creek's right to admit such
     New Member will expire and the  provisions  of this 3.2 will again  become
     applicable to the proposed  admission of such New Member.  If a New Member
     is admitted in  accordance  with the  provisions of this 3.2, any indirect
<PAGE>

     dilution to the Economic Interests of the Members caused by such admission
     will  be  borne  proportionally  by  both  Members,   notwithstanding  the
     provisions of Section 1.4.

3.3  The Property.

[a]  Real Estate Purchase Agreement; Assignment. Concurrently with the Members'
     execution of this  Agreement [i] East West  Partners,  Inc. will assign to
     the Company all of its right, title and interest in and to the Real Estate
     Purchase Agreement such that the Company is substituted as the "Purchaser"
     under such agreement in the place and stead of East West  Partners,  Inc.,
     [ii] the Company  will assume all of the  obligations  of the  "Purchaser"
     under the Real Estate Purchase Agreement,  and [iii] EWRD V will, and will
     cause any  Affiliate  of EWRD V to,  assign or cause to be assigned to the
     Company all of their respective  rights,  titles and interest,  if any, in
     and to all tangible and intangible property relating to the investigation,
     evaluation and prospective ownership, development, construction, financing
     and operation of the Property and the Projects, and the marketing and sale
     of  the  Units,   including,   all   inspection   reports,   environmental
     investigation  reports,  appraisals  and other due  diligence  studies and
     materials,   all  engineering  or  architectural  plans,   specifications,
     drawings, and artists renderings,  and copies of all other materials which
     would be relevant to the Company's  ownership,  development,  improvement,
     operation,  financing,  refinancing or disposition of the Property and the
     Projects,  and its  marketing and sale of the Units,  but  excluding  such
     materials as are subject to  attorney-client  privilege  or attorney  work
     product  privilege and any other  confidential  and proprietary  materials
     prepared by EWRD V or its  Affiliates  which are not useful in  connection
     with the development of the Property and the Projects.

[b]  Trademark License  Agreement.  Concurrently with the Members' execution of
     this Agreement,  the Company and Booth Creek will enter into the Trademark
     License Agreement in the form of Exhibit O, to be effective as of the date
     of this Agreement.

3.4  Capital Accounts. A Capital Account will be maintained for each Member and
     credited,  charged and otherwise adjusted as required by Section 704(b) of
     the Code and the Section 704(b) Regulations. Each Member's Capital Account
     will be:

[a]  Credited  with [i] the  amount of money  contributed  by the  Member as an
     Initial Contribution or an Additional  Contribution,  [ii] the Fair Market
     Value of property  contributed by the Member as an Initial Contribution or
     Additional  Contribution  (net of liabilities  that the Company assumes or
     takes property  subject to), [iii] the Member's  allocable share of Income
     and Net  Income,  and [iv] all other  items  properly  credited to Capital
     Account;

[b]  Charged  with [i] the  amount of money  distributed  to the  Member by the
     Company,  [ii] the Fair Market Value of property distributed to the Member
<PAGE>

     by the  Company  (net of  liabilities  that the  Member  assumes  or takes
     subject to),  [iii] the Member's  allocable  share of Losses,  Net Losses,
     Nonrecourse Deductions,  and Member Nonrecourse  Deductions,  and [iv] all
     other items properly charged to Capital Account; and

[c]  Otherwise adjusted as required by the Section 704(b) Regulations.

Any  unrealized   appreciation  or  depreciation  with  respect  to  any  asset
distributed in kind will be allocated  among the Members in accordance with the
provisions  of Article 4 as though such asset had been sold for its Fair Market
Value, as determined by agreement of the Members,  on the date of Distribution,
and the Members'  Capital  Accounts will be adjusted to reflect both the deemed
realization of such  appreciation or depreciation  and the Distribution of such
property.

The foregoing provisions and the other provisions of this Agreement relating to
the maintenance of the Capital Accounts are intended to comply with the Section
704(b)  Regulations and will be interpreted and applied in a manner  consistent
with such Regulations and any amendment or successor provision thereto.

3.5 Transfer.  If all or any part of an Ownership  Interest is  Transferred  in
accordance with this  Agreement,  the Capital Account of the Transferor that is
attributable to the Transferred interest will carry over to the Transferee.

3.6  No  Withdrawal  of  Capital.  Except  as  specifically  provided  in  this
Agreement,  no Member  will be  entitled  to  withdraw  all or any part of such
Person's  Capital   Contribution  from  the  Company  prior  to  the  Company's
Dissolution and Liquidation,  or, when such withdrawal of capital is permitted,
to demand a distribution of property other than money or as otherwise  provided
in this Agreement.

3.7 No Interest on Capital.  No Member will be entitled to receive  interest on
such Person's  Capital  Account or Capital  Contribution.  Any Member having an
Unpaid  Preferred  Return will be entitled to a Preferred Return as provided in
this Agreement.

3.8 No Drawing  Accounts.  The Company will not maintain a drawing  account for
any  Member.  All  Distributions  to  Members  will be  governed  by  Article 5
(relating to Distributions not in Liquidation of the Company) and by Article 12
(relating to Distributions in Liquidation of the Company).

3.9  Management  Fee.  EWRD V (or an  Affiliate  of EWRD V) will be entitled to
receive a  management  fee equal to 3% of the Gross  Sales  Price of each Unit,
calculated  and paid on a Project by Project  basis.  The Company  will pay the
estimated  management fee in advance,  in equal monthly payments,  beginning on
the Management Fee Commencement Date for each Project. The estimated management
fee will be based upon the Gross  Sales  Prices of the Units  specified  in the
Master Development Plan and Annual Plan(s), and the number of months over which
<PAGE>

such  estimated  management  fee  will be paid  will  likewise  be based on the
expected duration of the Project as set forth in the applicable Annual Plan(s).
EWRD V will refund to the Company any overpayments of such fee, and the Company
will pay to EWRD V any  underpayments  of such  fee,  as soon as is  reasonably
practicable  and in any event promptly after the sales of all Units for a given
Project are completed.  Such management fee will be deemed an operating expense
of the Company (and not a Distribution).  Except as provided in this Agreement,
no Member or Affiliate of a Member will be entitled to any salary or other form
of compensation paid by the Company for services rendered to the Company (other
than a Member's share of Distributions).

3.10 Contributions in the Event of an Emergency.  If an Emergency has occurred,
EWRD V, at its option, may make Additional Contributions for Capital Commitment
(to the extent of the Capital  Commitment)  in an amount  necessary to mitigate
the effects of such Emergency,  and if EWRD V does not make such  contributions
within 10 days after  receipt of a Notice from Booth Creek which states that an
Emergency has occurred and  specifies in  reasonable  detail the nature of such
Emergency,  Booth  Creek  may,  to the extent of EWRD V's  Capital  Commitment,
contribute  an  amount  equal  to  the  Additional   Contribution  for  Capital
Commitment which EWRD V did not make, and such  contribution  will be deemed an
Additional  Contribution for Excess Capital of Booth Creek. If an Emergency has
occurred and EWRD V has  satisfied  its Capital  Commitment,  either Member may
propose that the Members make Additional Contributions for Excess Capital in an
amount  necessary to mitigate the effects of such  Emergency by giving a Notice
to the other Member which states that an Emergency  has occurred and  specifies
in  reasonable  detail  the nature of such  Emergency.  For a period of 10 days
after the non-proposing  Member's receipt of such Notice, each Member will have
the right to make its pro rata  share  (based  on its  Funding  Percentage)  of
Additional  Contributions  for  Excess  Capital  in the amount set forth in the
Notice. To the extent that either Member does not contribute its pro rata share
of such Additional  Contributions for Excess Capital, the other Member may (but
is not required to) contribute  such amount.  If an Emergency has occurred,  to
the extent  that EWRD V does not make an  Additional  Contribution  for Capital
Commitment or contribute its pro rata share of an Additional  Contribution  for
Excess  Capital,  and  Booth  Creek  elects  to do so on EWRD V's  behalf,  the
Economic Interest of Booth Creek will be increased and the Economic Interest of
EWRD V will be decreased by an amount (expressed as a percentage) equal to a 4%
Economic Interest for each $1,000,000 of Additional  Contributions  which Booth
Creek  makes  on  behalf  of  EWRD V  (but  not on its  own  behalf)  (or  such
proportionately   lesser  or  greater   percentage   as  is   determined  by  a
proportionately  greater or lesser  Additional  Contribution  than $1,000,000),
except that the maximum  percentage by which EWRD V's Economic  Interest may be
reduced by one or more such events is 40%.  Thus, if the amount  contributed by
Booth  Creek on  behalf  of EWRD V  exceeds  $10,000,000,  any such  Additional
Contributions  by Booth Creek on behalf of EWRD V in excess of $10,000,000 will
not result in dilution of EWRD V's Economic  Interest but will be entitled to a
Preferred  Return, as provided in 3.2. If EWRD V's Economic Interest is diluted
pursuant to this 3.10,  Exhibit B will be appropriately  amended to reflect the
adjusted Economic  Interests.  The dilution remedy provided for in this 3.10 is
the sole and exclusive  remedy of Booth Creek if, in the event of an Emergency,
EWRD V fails to make an Additional  Contribution for Capital  Commitment or its
pro rata share of an Additional  Contribution  for Excess Capital,  as the case
may be, except only that if the amount  contributed by Booth Creek on behalf of
<PAGE>

EWRD V exceeds  $2,000,000,  Booth Creek may also, in addition to such dilution
remedy,  invoke the  Break-Up  Remedy  pursuant  to 13.9 as if a  Deadlock  had
occurred.

3.11 Working Capital Reserve.  The Manager may establish and maintain a working
capital  reserve  for  operating  expenses,   capital  expenditures,   repairs,
replacements,  contingencies  and  other  anticipated  costs  relating  to  the
Company's  business.  Such working  capital reserve will be consistent with the
Company's  Annual Plan with respect to the pertinent  Fiscal Year,  except that
the Manager may increase reserves above such amounts if the Manager  reasonably
determines  that such action is  necessary  to protect  the Company  against an
Emergency.

3.12  Authorization  of Emergency  Loans.  If an  Emergency  has occurred or is
likely to occur,  the  Manager may (but is not  obligated  to),  without  other
authorization  from the  Members,  make a loan  (an  "Emergency  Loan")  to the
Company in an amount  determined  by the Manager in its  reasonable  discretion
sufficient  to prevent  or  mitigate  the  effects  of the  Emergency;  but the
aggregate principal amounts of all outstanding  Emergency Loans will not exceed
$500,000. Each Emergency Loan will be unsecured, will be payable in full as set
forth in 5.1(b),  will be  prepayable  at the election of the Company,  without
penalty or premium, and will bear simple interest,  compounded  annually,  from
the date such funds are advanced at the lower of [a] a  fluctuating  rate equal
to 2% above the prime rate  announced  by The Wall Street  Journal from time to
time or [b] the maximum rate permitted by applicable law. No Emergency Loan may
be made at any time when EWRD V has not satisfied its Capital Commitment.


ARTICLE 4: INCOME AND LOSSES

4.1  Allocation  of Net Income and Net Loss.  Except as provided in 4.2 through
4.11,  the  Company's Net Income or Net Loss, as the case may be, and each item
of income, loss and deduction entering into the computation  thereof,  for each
Fiscal Year will be allocated to the Members as follows:

[a] Net Income for such Fiscal year will be allocated as follows:

     [i]  first,  an amount of Net Income equal to the excess of [x] the amount
          that has been  distributed to Booth Creek pursuant to 5.1[a] for such
          Fiscal  Year and all  prior  Fiscal  Years  over  [y] all Net  Income
          previously  allocated to Booth Creek  pursuant to this  4.1[a][i] for
          such Fiscal Year and all prior  Fiscal  Years,  will be  allocated to
          Booth Creek;

     [ii] second, an amount of Net Income equal to the excess of [x] the amount
          of Net Loss  that has  been  allocated  to the  Members  pursuant  to
          4.1[b][vii]  for such Fiscal Year and all prior Fiscal Years over [y]
          all Net Income  previously  allocated to the Members pursuant to this
          4.1[a][ii]  for such Fiscal Year and all prior Fiscal Years,  will be
          allocated to the Members in proportion to each Member's share of such
          excess of [x] over [y];
<PAGE>

     [iii]third,  an amount of Net Income equal to the excess of [x] the amount
          of Net Loss  that has  been  allocated  to the  Members  pursuant  to
          4.1[b][vi]  for such Fiscal Year and all prior  Fiscal years over [y]
          all Net Income  previously  allocated to the Members pursuant to this
          4.1[a][iii] for such Fiscal Year and all prior Fiscal Years,  will be
          allocated to the Members in proportion to each Member's share of such
          excess of [x] over [y];

     [iv] fourth, an amount of Net Income equal to the excess of [x] the amount
          of Net Loss  that has  been  allocated  to the  Members  pursuant  to
          4.1[b][v]  for such Fiscal Year and all prior  Fiscal  Years over [y]
          all Net Income  previously  allocated to the Members pursuant to this
          4.1[a][iv]  for such Fiscal Year and all prior Fiscal Years,  will be
          allocated to the Members in proportion to each Member's share of such
          excess [x] over [y];

     [v]  fifth,  an amount of Net Income equal to the excess of [x] the amount
          of Net Loss  that has  been  allocated  to the  Members  pursuant  to
          4.1[b][iv]  for such Fiscal Year and all prior  Fiscal Years over [y]
          all Net Income  previously  allocated to the Members pursuant to this
          4.1[a][v]  for such Fiscal Year and all prior Fiscal  Years,  will be
          allocated to the Members in proportion to each Member's share of such
          excess of [x] over [y];

     [vi] sixth,  an amount of Net Income equal to the excess of [x] the amount
          of Net Loss that has been allocated to EWRD V pursuant to 4.1[b][iii]
          for such  Fiscal  Year and all prior  Fiscal  years  over [y] all Net
          Income previously allocated to EWRD V pursuant to this 4.1[a][vi] for
          such Fiscal Year and all prior  Fiscal  Years,  will be  allocated to
          EWRD V;

     [vii]seventh,  an  amount  of Net  Income  equal to the  excess of [x] the
          amount  of Net Loss that has been  allocated  to EWRD V  pursuant  to
          4.1[b][ii]  for such Fiscal Year and all prior  Fiscal years over [y]
          all  Net  Income  previously  allocated  to EWRD V  pursuant  to this
          4.1[a][vii] for such Fiscal Year and all prior Fiscal Years,  will be
          allocated to EWRD V;

     [viii]  eighth,  an amount of Net  Income  equal to the  excess of [x] the
          amount of Net Loss that has been allocated to the Members pursuant to
          4.1[b][i]  for such Fiscal Year and all prior  Fiscal  Years over [y]
          all Net Income  previously  allocated to the Members pursuant to this
          4.1[a][viii] for such Fiscal Year and all prior Fiscal Years, will be
          allocated to the Members in proportion to each Member's share of such
          excess of [x] over [y];
<PAGE>

     [ix] ninth,  an  amount  of Net  Income  equal  to the  excess  of [x] the
          Preferred  Return for Excess  Capital  for such  Fiscal  Year and all
          prior  Fiscal Years over [y] all Net Income  previously  allocated to
          the Members pursuant to this 4.1 [a][ix] for such Fiscal Year and all
          prior Fiscal Years, will be allocated to the Members in proportion to
          each Member's share of such excess of [x] over [y];

     [x]  tenth,  an  amount  of Net  Income  equal  to the  excess  of [x] the
          Preferred Return for Capital  Commitment for such Fiscal Year and all
          prior  Fiscal Years over [y] all Net Income  previously  allocated to
          EWRD V pursuant to this  4.1[a][x] for such Fiscal Year and all prior
          Fiscal Years;

     [xi] eleventh,  an amount  of Net  Income  equal to the  excess of [x] the
          Preferred  Return for Land for such Fiscal Year and all prior  Fiscal
          Years over [y] all Net Income previously allocated to EWRD V pursuant
          to this  4.1[a][xi]  for such Fiscal Year and all prior Fiscal Years;
          and

     [xii]twelfth, any remaining Net Income will be allocated to the Members in
          proportion to their respective Economic Interests.

[b] Net Loss for such Fiscal Year will be allocated as follows:

     [i]  first,  an  amount  of Net Loss  equal to the  excess  of [x] all Net
          Income  previously  allocated to the Members pursuant to 4.1[a][viii]
          or  4.1[a][xii]  for such Fiscal Year and all prior Fiscal Years over
          [y] the sum of all  Net  Loss  previously  allocated  to the  Members
          pursuant to this  4.1[b][i] for such Fiscal Year and all prior Fiscal
          Years and all  Distributions  made  pursuant to 5.1[i] or 12.2[i] for
          such Fiscal Year and all prior Fiscal Years, will be allocated to the
          Members in proportion  to each  Member's  share of such excess of [x]
          over [y];

     [ii] second,  an  amount  of Net Loss  equal to the  excess of [x] all Net
          Income previously allocated to the Members pursuant to 4.1[a][vii] or
          4.1[a][xi]  for such Fiscal Year and all prior  Fiscal Years over [y]
          the sum of all Net Loss previously  allocated to the Members pursuant
          to this  4.1[b][ii]  for such Fiscal Year and all prior  Fiscal Years
          and all  Distributions  made  pursuant  to 5.1[f] or 12.2[h] for such
          Fiscal Year and all prior  Fiscal  Years,  will be  allocated  to the
          Members in proportion  to each  Member's  share of such excess of [x]
          over [y];

     [iii]third,  an  amount  of Net Loss  equal to the  excess  of [x] all Net
          Income  previously  allocated  to EWRD V pursuant  to  4.1[a][vi]  or
          4.1[a][x]  for such Fiscal Year and all prior  Fiscal  Years over [y]
          the sum of all Net Loss  previously  allocated  to EWRD V pursuant to
          this  4.1[b][iii] for such Fiscal Year and all prior Fiscal Years and
          all Distributions  made pursuant to 5.1[e] or 12.2[g] for such Fiscal
          Year and all prior Fiscal Years, will be allocated to EWRD V;
<PAGE>

     [iv] fourth,  an  amount  of Net Loss  equal to the  excess of [x] all Net
          Income previously  allocated to the Members pursuant to 4.1[a][v] for
          such  Fiscal  Year and all  prior  Fiscal  Years  and the sum for all
          Members of their Adjusted  Capital  Contribution  Amount for Land and
          their Adjusted Capital  Contribution  Amount for Capital  Commitment,
          over [y] all Net Loss previously allocated to the Members pursuant to
          this 4.1[b][iv] for such Fiscal Year and all prior Fiscal Years, will
          be allocated to the Members in proportion  to each Member's  share of
          such excess of [x] over [y];

     [v]  fifth,  an amount of Net Loss  equal to the  excess of [x] the sum of
          all Net  Income  previously  allocated  to the  Members  pursuant  to
          4.1[a][iv]  or 4[a][ix]  for such  Fiscal  Year and all prior  Fiscal
          Years over [y] the sum of all Net Loss  previously  allocated  to the
          Members pursuant to this 4.1[b][v] for such Fiscal Year and all prior
          Fiscal Years and all Distributions made pursuant to 5.1[c] or 12.2[e]
          for such Fiscal Year and all prior  Fiscal Years will be allocated to
          the Members in proportion  to each  Member's  share of such excess of
          [x] over [y];

     [vi] sixth,  an amount of Net Loss  equal to the  excess of [x] the sum of
          all Net  Income  previously  allocated  to the  Members  pursuant  to
          4.1[a][iii]  for such Fiscal Year and all prior  Fiscal Years and the
          aggregate  Adjusted Capital  Contribution  Amounts for Excess Capital
          over [y] the sum of all Net Loss previously  allocated to the Members
          pursuant to this 4.1[b][vi] for such Fiscal year and all prior Fiscal
          Years will be allocated to the Members in proportion to each Member's
          share of such excess of [x] over [y]; and

     [vii]seventh,  any  remaining Net Loss will be allocated to the Members in
          proportion to their respective Economic Interests.

4.2 Company  Minimum Gain  Chargeback.  Notwithstanding  any other provision of
this Agreement to the contrary,  if in any Fiscal Year or other period there is
a net decrease in the amount of the Company Minimum Gain, then the minimum gain
chargeback described in Regulations Section 1.704-2(f) and (g) will apply.

4.3 Minimum Gain Chargeback for Member  Nonrecourse Debt.  Notwithstanding  any
other provision of this Agreement to the contrary other than 4.2 if in any year
there is a net  decrease  in the amount of the Member  Minimum  Gain,  then the
partner minimum gain chargeback described in Regulations Section  1.704-1(i)(5)
will apply.

4.4  Qualified  Income  Offset.  Notwithstanding  any other  provision  of this
Agreement to the contrary (except 4.2 and 4.3 which will be applied first),  if
in  any  Fiscal  Year  or  other  period  a  Member  unexpectedly  receives  an
adjustment,   allocation  or  distribution  described  in  Regulations  Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), which adjustment, allocation or
<PAGE>

distribution  causes or increases a deficit  balance in such Member's  Adjusted
Capital  Account,  such Member will be specially  allocated  items of Income in
accordance with the qualified income offset provisions described in Regulations
Section 1.704-1(b)(2)(ii)(d).

4.5 Limit on Loss  Allocations.  Notwithstanding  the provisions of 4.1, or any
other provision of this Agreement to the contrary,  Net Loss (or items thereof)
will not be allocated to a Member if such allocation  would cause or increase a
deficit  balance  in  such  Member's  Adjusted  Capital  Account  and  will  be
reallocated to the other Members, subject to the limitations of this 4.5.

4.6 Net Loss from Member  Nonrecourse  Debt.  Any Loss  attributable  to Member
Nonrecourse Debt will be allocated to the Member who bears the economic risk of
loss with respect to such debt.

4.7 Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year or other
period will be allocated among the Members in accordance with their  respective
Economic Interests.

4.8 Section 754  Adjustments.  To the extent an  adjustment to the adjusted tax
basis of any Company  asset under  Sections  734(b) or 743(b) is required to be
taken into account in determining  Capital Accounts under  Regulations  Section
1.704-1(b)(2)(iv)(m), the amount of the adjustment to the Capital Accounts will
be treated  as an item of gain (if the  adjustment  increases  the basis of the
asset) or loss (if the  adjustment  decreases the basis),  and the gain or loss
will be  specially  allocated  to the Members in a manner  consistent  with the
manner in which their  Capital  Accounts  are  required  to be  adjusted  under
Regulations Section 1.704-1(b)(2)(iv)(m).

4.9 Reversal of Mandatory Allocations. In the event that any Income or Net Loss
is  allocated  pursuant to 4.2 through 4.5,  subsequent  Income or Net Loss (or
items  thereof)  will first be  allocated  (subject to 4.2 through  4.5) to the
Members in a manner which will result in each Member  having a Capital  Account
balance equal to that which would have resulted had the original  allocation of
Income or Net Loss (or items thereof) pursuant to 4.2 through 4.5 not occurred.

4.10 Compliance with Code. The foregoing  provisions of this Agreement relating
to the  allocation  of Net  Income  and Net Loss are  intended  to comply  with
Regulations  under  Section  704(b)  of the Code and  will be  interpreted  and
applied in a manner consistent with such Regulations.

4.11 Tax  Allocations -- Section  704(c).  In accordance with Section 704(c) of
the Code and the related  Regulations,  income,  gain,  loss and deduction with
respect to any property  contributed to the capital of the Company,  solely for
tax purposes,  will be allocated among the Members so as to take account of any
variation between the adjusted basis to the Company of the property for federal
income tax  purposes and the initial  Book Value of the  property.  If the Book
Value of any Company  asset is adjusted as described in the  definition of Book
Value,  subsequent allocations of income, gain, loss and deduction with respect
to that asset will take account of any variation  between the adjusted basis of
the asset for federal income tax purposes and its Book Value in the same manner
as under Section 704(c) and Regulations Section  1.704-3(b).  Allocations under
this 4.11 are solely for purposes of federal, state and local taxes.
<PAGE>

4.12 Allocation on Transfer. If any interest in the Company is transferred,  or
is  increased  or  decreased  by reason  of the  admission  of a new  Member or
otherwise,  during any Fiscal Year, the Company will allocate Net Income or Net
Loss or items  thereof to the  Persons  who were the  holders of such  interest
during such Fiscal Year by closing the books of the Company upon such transfer,
increase,  or decrease,  or, if the Members agree otherwise,  under a different
method permitted by the Code.


ARTICLE 5: DISTRIBUTIONS

5.1 Distributions  Generally.  Subject to 5.2 and 5.5, after the payment of all
Company  operating  expenses  payable at such time and all outstanding  Company
obligations,  other than  Emergency  Loans,  payable at such time (or within 60
days  thereafter),  and after the  establishment of working capital reserves by
the Manager under 3.11,  the Company will  distribute any cash it realizes from
operations  as soon as  practicable  after its  receipt of such  cash,  but the
Company need not make any  Distributions if the total amount  distributed would
be less than  $50,000.  All  Distributions  will be made to the  Members in the
following order and priority to the extent of available funds:

[a]  First, at such times as Booth Creek is entitled to receive the Booth Creek
     Return  pursuant to 5.6, an amount  equal to the Unpaid Booth Creek Return
     will be distributed to Booth Creek;

[b]  Second,  any  outstanding  Emergency  Loans will be repaid to the  Manager
     (which is not a Distribution as such but is listed here to show the intent
     of the Members as to the priority of payment of Emergency  Loans vis-a-vis
     Distributions);

[c]  Third, an amount equal to the aggregate Unpaid Preferred Return for Excess
     Capital  of all  Members  as of the  date  of  such  Distribution  will be
     distributed to all of the Members in proportion to their Unpaid  Preferred
     Returns for Excess Capital as of the date of such Distribution;

[d]  Fourth,  an amount equal to the aggregate  Adjusted  Capital  Contribution
     Amounts  for  Excess  Capital  of all  Members  as of  the  date  of  such
     Distribution  will be  distributed  to all of the Members in proportion to
     their Adjusted Capital  Contribution  Amounts for Excess Capital as of the
     date of such Distribution;

[e]  Fifth,  an amount  equal to the  aggregate  Unpaid  Preferred  Return  for
     Capital Commitment as of the date of such Distribution will be distributed
     to EWRD V;

[f]  Sixth, an amount equal to the aggregate  Unpaid  Preferred Return for Land
     as of the date of such distribution will be distributed to EWRD V;
<PAGE>

[g]  Seventh,  subject to the last sentence of this 5.1, an amount equal to the
     aggregate Adjusted Capital  Contribution  Amount for Capital Commitment as
     of the date of such Distribution will be distributed to EWRD V;

[h]  Eighth,  subject to the last  sentence of this 5.1, an amount equal to the
     aggregate Adjusted Capital  Contribution Amount for Land as of the date of
     such Distribution will be distributed to EWRD V; and

[i]  Ninth,  to the  Members  in  accordance  with  their  respective  Economic
     Interests.

Except  upon the  Dissolution  and  Liquidation  of the  Company or the written
consent of Booth  Creek,  at no time prior to the seventh  anniversary  of this
Agreement may any  Distribution  be made to EWRD V pursuant to 5.1[g] or 5.1[h]
if such Distribution  would reduce the Capital  Commitment Account of EWRD V to
less than $10,000,000.

5.2 Special  Distributions.  For each Fiscal Year the Company will, during such
Fiscal Year or the  immediately  subsequent  Fiscal Year, but not later than 90
days following the end of such Fiscal Year, use its reasonable  best efforts to
distribute to each Member,  with respect to such Fiscal Year, a distribution in
an amount equal to such Member's Presumed Tax Liability for such Fiscal Year (a
"Tax Distribution"). Any amount distributed pursuant to this 5.2 will be deemed
to be an advance distribution of amounts otherwise distributable to the Members
pursuant to 5.1 and will reduce the amounts that would  subsequently  otherwise
be  distributable  to the  Members  pursuant  to 5.1 in the  order  they  would
otherwise have been distributable. The Manager may distribute Tax Distributions
quarterly on an estimated  basis prior to the end of a Fiscal Year,  but if the
amounts  distributed by the Manager as estimated Tax  Distributions  exceed the
greater of [i] the amount of Tax Distributions to which such Member is entitled
for such Fiscal Year; or [ii] the total amount of  Distributions  to which such
Member is entitled in such Fiscal Year;  the Member will,  within 15 days after
the tax return for such Fiscal Year is filed, return such excess to the Company
and such excess will be treated as a  Distribution  to such Member  pursuant to
5.1 until it is returned.

5.3  Payment.  All  Distributions  will  be made to  Members  owning  Ownership
Interests  on the date of record,  such date being the last day of the calendar
month  preceding  the date of  Distribution,  as  reflected on the books of the
Company.

5.4 Withholding.  If required by the Code or by state or local law, the Company
will withhold any required amount from Distributions to a Member for payment to
the appropriate taxing authority.  Any amount so withheld from a Member will be
treated as a Distribution by the Company to such Member.  Each Member agrees to
file timely any agreement that is required by any taxing  authority in order to
avoid any  withholding  obligation  that  would  otherwise  be  imposed  on the
Company. If the amount required to be withheld with respect to a Member exceeds
the amount of Distributions payable to such Member, such excess will be treated
as a loan to the  Member,  payable  within  10 days  after  such  time that the
Company makes payment to the appropriate taxing authority.
<PAGE>

5.5  Distribution  Limitation.  Notwithstanding  any  other  provision  of this
Agreement,  the Company will not make any Distribution to the Members if, after
the  Distribution,  the  liabilities of the Company (other than  liabilities to
Members on account of their Ownership  Interests)  would exceed the Fair Market
Value of the Company's  assets or if the  Distribution  would otherwise  likely
render the Company unable to pay its  liabilities as they mature.  With respect
to any property  subject to a liability  for which the recourse of creditors is
limited to the specific property, such property will be included in assets only
to  the  extent  the  property's  Fair  Market  Value  exceeds  its  associated
liability, and such liability will be excluded from the Company's liabilities.

5.6 Booth  Creek  Return.  For  purposes  of  determining  when Booth  Creek is
entitled to receive the Booth Creek Return (as defined below), the Manager will
establish an account which [a] has an initial balance of zero, [b] is increased
by  EWRD  V's  Initial  Contribution,   Additional  Contributions  for  Capital
Commitment  which  are  used  to pay  Infrastructure  Costs  (excluding  Excess
Infrastructure  Costs),  Preferred Return for Capital  Commitment to the extent
that such Preferred  Return arises from  Additional  Contributions  for Capital
Commitment  which  are  used  to pay  Infrastructure  Costs  (excluding  Excess
Infrastructure  Costs),  and Preferred Return for Land, and [c] is decreased by
8% of the Gross Sales Price of each Unit sold.  The balance of such  account at
any given time is  referred  to in this  Agreement  as the  "Aggregate  Account
Balance." During any period in which the Aggregate  Account Balance is equal to
zero,  Booth Creek will be entitled to 8% of the Gross Sales Price of each Unit
sold during such period (the "Booth Creek Return").  Distributions of the Booth
Creek Return will be made in accordance with 5.1 and 12.2.


ARTICLE 6: MANAGEMENT

6.1 Management.

[a]  Powers of the Manager.  Subject to the  provisions of the Act,  subject to
     the  fiduciary  obligations  and  limitations  imposed upon it by law, and
     except as otherwise provided in this Agreement,  the Manager will have the
     right,  power and authority to do (or cause to be done) any and all things
     necessary,  proper, convenient or advisable to administer and carry on the
     business and affairs of the Company.  Except as otherwise provided in this
     Agreement,  no Person dealing with the Company will be required to inquire
     into the authority of the Manager to take any action or make any decision.
     Except for the Manager and except as otherwise provided in this Agreement,
     no Member will take part in the  operations,  management or control of the
     Company's  business,  transact any business in the Company's name, or have
     the power to sign documents for or otherwise  bind the Company.  Except as
     otherwise  provided  in  this  Agreement,  the  Manager  has  the  rights,
     authority and powers of a manager with respect to the  Company's  business
     and assets as provided in the Act as in effect on the date this  Agreement
     becomes  effective.  If an event of Withdrawal  occurs with respect to the
     Manager,  the other  Members may appoint a new Manager  upon a Vote of the
     holders  of a  majority  of the  Economic  Interests  held by  such  other
     Members.
<PAGE>

[b]  General Duties. Within the resources available to the Company, the Manager
     will  administer  the business and affairs of the Company in such a manner
     as to develop,  construct,  market and sell the Project in an  expeditious
     and cost  effective  manner,  subject to delays,  cost  overruns and other
     events beyond its reasonable control,  but in no event will the Manager be
     liable for breach of such  standard  of care  unless it engages in grossly
     negligent or willful  misconduct.  The  authority and  obligations  of the
     Manager will include,  without being limited to, the authority to, and the
     duty to use reasonable efforts to:

     [i]  Implement  the Master  Development  Plan and each  Annual Plan in all
          material respects;

     [ii] Cause the conduct of the Company's business to comply in all material
          respects with all applicable laws;

     [iii]Cause the Company to pay all real property taxes, loans, professional
          and service contract fees,  insurance  premiums and other obligations
          of the Company as the same may become due and payable;

     [iv] Maintain on behalf of the Company and the Project  public  liability,
          fire,  earthquake and extended  coverage and other  insurance in such
          forms and  amounts,  and from such  insurers as it  reasonably  deems
          necessary,  but in any event  complying  with the  minimum  insurance
          requirements set forth in Exhibit M; and

     [v]  Promptly  notify the  Members in  writing of [A]  material  financing
          proposals,  business  opportunities  or offers to purchase any of the
          Property  or the  Projects;  [B] the  commencement  by or against the
          Company  of any  material  Proceeding,  as  well  as  any  settlement
          proposals  related to such Proceeding and any material changes in the
          status of any such  Proceeding  from time to time; and [C] such other
          matters as  reasonably  may be of interest to the  Members,  together
          with any  recommendations  the Manager may have with  respect to such
          matters,  but the  Manager  will not be liable to the  Company or any
          Member for damages for any failure to notify under this 6.1[b][v].

6.2 Actions or Decisions by the Manager.  Without  limiting the  generality  of
6.1, the following  actions or decisions by (or  affecting) the Company will be
made by the Manager, without any requirement of approval by any other Person:

[a]  Subject to 6.4[g],  [h], and [i], the  borrowing of money and the issuance
     of promissory  notes or other evidences of indebtedness in connection with
     such borrowings;

[b]  Subject to 6.4[g]],  the granting of a mortgage,  deed of trust, pledge or
     other lien on or security  interest in all or any portion of the assets of
<PAGE>

     the Company to secure the Company's obligations as debtor under any loans,
     lines of credit,  debt offerings,  credit  facilities,  or other financing
     arrangements established from time to time;

[c]  The sale of developed  parcels of property or Units in the ordinary course
     of the Company's business  consistent with any Annual Plan then in effect,
     provided  that Units may not be sold at prices  lower than 80% of the list
     price of such Units (as set forth in the then current Annual Plan), except
     on an isolated basis;

[d]  The acquisition of Ancillary Property;

[e]  The acquisition of the Ten Year Option Property (if offered to the Company
     pursuant to the  Exclusive  Agreement  entered  into  pursuant to the Real
     Estate Purchase Agreement);

[f]  Subject to 6.3[l], the initiation and prosecution of any Proceeding in the
     name of and on behalf of the Company or any  Project  LLC in the  ordinary
     course of business,  including  the  enforcement  of rights of the Company
     against  Booth  Creek  or its  Affiliates  under  any  of  the  agreements
     contemplated  by 6.2[i],  the  enforcement of rights against  contractors,
     subcontractors,  vendors,  suppliers, trade creditors,  escrow agents with
     respect to any escrow, and purchasers and tenants of any of the Units;

[g]  The  voluntary  Dissolution:  [i] of any  Project  LLC after  the  Project
     Completion  Date with  respect to such  Project LLC or [ii] of the Company
     after the Project Completion Date of all Projects;

[h]  The  purchase by the Company of the  Ownership  Interests of any Member or
     Transferee, on such terms as are determined by the Manager and such Member
     or Transferee;

[i]  The entry into and performance and enforcement,  on behalf of the Company,
     of agreements, if any, entered into with Booth Creek or its Affiliates;

[j]  The contribution of parcels of the Property,  the Ancillary Property,  and
     the Ten Year Option  Property to one or more Project LLC's in exchange for
     ownership interests in such Project LLC, and the allocation (as determined
     by the Manager in its reasonable discretion) of Land Costs, Infrastructure
     Costs and other costs to such Project LLC;

[k]  The  payment  to EWRD V of  reimbursable  expenses  pursuant  to 6.9 and a
     management fee pursuant to 3.9;

[l]  Subject to 6.3[b] and 6.4[k] and [l], the  development  of the Property in
     accordance with the Master Development Plan;

[m]  With  respect to each Project  LLC,  the entry into and  performance  of a
     Sub-Management  Agreement with East West  Partners,  Inc., an Affiliate of
<PAGE>

     EWRD V, in the form attached as Exhibit T, and a Listing Agreement with an
     Affiliate of EWRD V, on terms customary for brokerage  agreements relating
     to properties  of the type and in the area held by the  pertinent  Project
     LLC at the time  such  listing  agreement  is  executed,  including  terms
     regarding real estate brokerage commissions payable to the broker; and

[n]  The management of the day-to-day operation of the Company, in a manner not
     inconsistent with the Annual Plan then in effect.

6.3 Actions or Decisions Requiring Reasonable Consent. The following actions or
decisions  by (or  affecting)  the Company are subject to the approval of Booth
Creek,  but such  approval may not be  unreasonably  withheld,  conditioned  or
delayed:

[a]  The engagement of one or more Persons to prepare a development  and zoning
     plan and to obtain all requisite  government approvals with respect to the
     possible development of the Ten Year Option Property;

[b]  Subject to 6.4[k] and [l], any changes to the Master Development Plan that
     affect in any material respect the exterior design,  mix, sizes and number
     of Units, lift access, trail location,  parking, and the boundaries of the
     Ancillary Property;

[c]  The  selection  and  removal  of  general  contractors  to  construct  the
     Projects;

[d]  The approval of each Annual Plan (and  amendments to such Annual Plans) as
     provided in 6.11 and 6.12;

[e]  In the absence of an Emergency, causing the Company to exceed expenditures
     in any Annual Plan with respect to any Fiscal Year by more than 20% in the
     aggregate;

[f]  The development of the Ten Year Option Property,  including the trading of
     density from existing development parcels other than the Village Core;

[g]  Dissolution prior to the Project Completion Date of all Project LLC's;

[h]  The making of loans by the Company in  connection  with the  Projects  or,
     subject to 6.4[h],  the  guaranty by the Company of  obligations  of third
     parties in connection with the Projects;

[i]  The  selection  and removal of the  accountants  chosen to conduct  annual
     audits of the Company's financial  statements under 10.6;  initially,  the
     Company's accountants will be Arthur Andersen & Co.;

[j]  The general  sales price  structure  (that is, the range of list prices of
     the Units);
<PAGE>

[k]  The sale of Units at a price lower than 80% of the lowest end of the range
     of list  prices of such  Units (as set  forth in the then  current  Annual
     Plan), other than on an isolated basis; and

[l]  The  initiation and  prosecution  of any  Proceeding  against a California
     governmental  agency  or  otherwise  not in  the  ordinary  course  of the
     Company's business.

6.4 Actions or Decisions  Requiring  Discretionary  Consent of Booth Creek. The
following actions or decisions by (or affecting) the Company are subject to the
approval  of Booth  Creek,  which Booth Creek may grant or withhold in its sole
and absolute discretion (subject to a duty to act in good faith):

[a]  The sale, exchange or other disposition of any, or of all or substantially
     all, of the Company's assets,  substantially as an entirety, other than as
     permitted in 6.2[c];

[b]  The expansion of the Company's business beyond its principal  purpose,  or
     beyond related or incidental activities;

[c]  The payment of  compensation  to any Member or  Affiliate  of a Member for
     services  rendered to the Company,  other than [i] such Member's  share of
     Income,  [ii] payments made pursuant to 6.9 and 3.9, or [iii] as otherwise
     provided in this Agreement;

[d]  The  admission of an additional  Member other than a Permitted  Transferee
     pursuant to Article 13;

[e]  The distribution of any assets in kind;

[f]  Any transaction  between the Company and EWRD V or any Affiliate of EWRD V
     (other than a Project LLC);

[g]  The granting of any mortgage,  deed of trust or other security interest in
     [i] any parcel included in the Village Core, unless in connection with the
     development of that specific parcel or [ii] the Essential Ski Property;

[h]  Subjecting  to any  recourse  of any  third  party  [i] any  parcel in the
     Village Core (subject to customary  carve-outs such as fraud and breach of
     environmental  representations and warranties or unless in connection with
     the  development  of that  specific  parcel)  or [ii]  the  Essential  Ski
     Property;

[i]  Any  Borrowing  or  Encumbrance  [A]  to  the  extent  such  Borrowing  or
     Encumbrance  is entered into for any purpose other than [i]  preventing or
     mitigating an Emergency and is in accordance  with 3.12, or [ii] obtaining
     funds for  construction of a Project (or the refinancing of a construction
     loan with another loan if the proceeds of such other loan are used to fund
<PAGE>

     construction costs) or [B] entered into for the purpose of obtaining funds
     for the  construction of a Project,  unless [i] the balance of the Capital
     Commitment  Account has been equal to the Capital  Commitment at any point
     in time, [ii] Booth Creek has waived the Capital Commitment, or [iii] such
     construction  financing relates to a particular Project, no Property other
     than the Property associated with such Project is subjected to a mortgage,
     deed of trust,  pledge or lien in connection  with the development of such
     Project, and the aggregate amount outstanding under all construction loans
     (after giving effect to the construction loan to be entered into) does not
     exceed three times the balance of EWRD V's Capital  Commitment  Account at
     the time such construction loan is entered into;

[j]  The  acquisition  of real property not in accordance  with the Annual Plan
     then in effect which would result in a material  expansion of the scope of
     the Projects, such as the acquisition of real property to construct a golf
     course;

[k]  The development of any Essential Ski Property;

[l]  Any changes to the Master  Development  Plan that  affect in any  material
     respect,  within the Village Core,  the exterior  design,  mix,  sizes and
     number of Units, lift access, trail location and parking;

[m]  The  sale of  undeveloped  parcels  of the  Property  or Ten  Year  Option
     Property; and

[n]  Any decision to cause the  operating  agreement for any Project LLC to be,
     in any material respect,  other than in the form of Exhibit J, or to cause
     any Person other than EWRD Parties,  the Company and any Persons  admitted
     pursuant  to 3.2[b] to hold  interests  in such  Project  LLC  (except for
     transferees  admitted as members in accordance with the provisions of such
     operating agreement),  or to cause the Company's economic interest in such
     Project LLC to be less than 80% (except as contemplated by 3.2[b]);

6.5  Amendment of Agreement.

[a]  Notwithstanding  anything to the contrary  contained in 6.1, 6.2, 6.3, and
     6.4, the Manager will have the power,  without any requirement of approval
     by any other Person, to amend this Agreement as may be required to reflect
     the  admission,  substitution,  termination,  or  Withdrawal of Members in
     accordance with this Agreement; and

[b]  Notwithstanding  anything to the contrary  contained in 6.1,  6.2, 6.3 and
     6.4,  and except as  provided  in 3.1[d],  3.4,  6.5[a],  13.9[b][iv]  and
     13.11[b],  this Agreement will not be amended without the affirmative Vote
     of all Members, duly evidenced by a writing signed by each Member.

[c]  Any duly adopted  amendment to this  Agreement is binding upon, and inures
     to the benefit of, each Person who holds an Ownership Interest at the time
<PAGE>

     of such  amendment,  without  the  requirement  that such  Person sign the
     amendment or any republication or restatement of this Agreement.

6.6  Administration  and  Termination  of  Affiliate  Contracts.  Any  material
decision or action of the Company  relating to the  enforcement of any contract
between the Company and any  Affiliate of EWRD V will be made by Booth Creek in
its  reasonable  discretion,  acting  alone  (subject  to a duty to act in good
faith).  Regardless  of any terms in any such  contract to the  contrary,  each
contract between the Company and an Affiliate of EWRD V will, if Booth Creek so
elects by Notice to EWRD V,  terminate  immediately  upon [a] the commission of
any Material Manager Breach by EWRD V or any of its Permitted  Transferees (but
if the Break-Up  Remedy is exercised in connection  with such Material  Manager
Breach,  contracts  may be  terminated  by Booth  Creek only to the extent such
contracts  involve the Village Core or the  Essential  Ski  Property);  [b] the
Dissolution of the Company  pursuant to 11.1; [c] the occurrence of an event of
Withdrawal  suffered  by EWRD V; or [d] upon an East West  Change  of  Control.
Termination of any such Affiliate contract pursuant to this 6.6 will be without
liability whatsoever to the Company,  regardless of anything to the contrary in
such Affiliate contract.

6.7 Effect of Dissolution, Resignation or Retirement. If any Member voluntarily
dissolves,  resigns from or retires from the Company,  such withdrawing  Member
will,  without  further act,  become a Transferee  of such  Member's  Ownership
Interest (with the limited rights of a Transferee as set forth in 13.6).

6.8 Other Activities. As a mutual inducement to cause the Members to enter into
this Agreement,  EWRD V, Booth Creek and certain of their respective Affiliates
and other Persons have entered into the Master Non-Competition Agreement in the
form of Exhibit I.

6.9  Payment  of  Management  Costs.  The  Company  will  pay for  all  direct,
out-of-pocket costs and expenses  (including the On-Site Management  Allowance)
reasonably  incurred by the Manager on behalf of the Company in connection with
the management of the Company's affairs, but not the general and administrative
expense of the Manager or any of its Affiliates.

6.10  Master  Development  Plan.  The  Members  have  approved  the
Master  Development  Plan of the Company which contains the initial
Annual Plan and is attached as Exhibit G.

6.11 Annual Plan.  The Manager  will cause to be prepared and  delivered to the
Members,  on or before  November 15 of each Fiscal Year, an Annual Plan for the
next Fiscal Year for review and approval by the Members.  Each such Annual Plan
will include a narrative section discussing the material features of the Annual
Plan,  a  projection  of the  development,  construction,  marketing  and sales
operations of the Company (including  projected  completion dates) for the next
succeeding  Fiscal  Year and  each  quarter  thereof  and a  narrative  section
comparing the projected  budgets contained within such Annual Plan to the prior
Fiscal Year's actual results (to the extent  available).  Each budget contained
in  the  Annual  Plan  will  be  prepared  in a  format  and  level  of  detail
substantially  equivalent  to  Exhibit  R.  As soon as  practicable  after  any
<PAGE>

proposed Annual Plan is delivered to each Member, but no later than 20 business
days after  receipt by each  Member,  each Member will provide the Manager with
its comments  regarding the proposed  Annual Plan. A failure to respond  within
such 20 business day period after receipt by each Member of the proposed Annual
Plan will constitute a waiver of such Member's right to comment  regarding such
Annual Plan and will constitute  such Member's  acceptance of such Annual Plan.
The proposed Annual Plan will contain substantially the following statement, in
bold face type and in all capital letters: "A FAILURE TO RESPOND TO THE MANAGER
WITH  COMMENTS  CONCERNING  THIS  PROPOSED  ANNUAL PLAN WITHIN 20 BUSINESS DAYS
AFTER  RECEIPT OF THIS  PROPOSED  ANNUAL PLAN WILL  CONSTITUTE  A WAIVER OF THE
RIGHT TO COMMENT ON SUCH PROPOSED ANNUAL PLAN AND WILL CONSTITUTE ACCEPTANCE OF
SUCH  PROPOSED  ANNUAL  PLAN." If a Member  does not  provide  comments  to the
Manager regarding the proposed Annual Plan, then such proposed Annual Plan will
be deemed to  constitute  the  Annual  Plan for the  Fiscal  Year in  question,
subject to  amendment  from time to time as provided in 6.12.  No later than 20
business  days after  receipt of each  Member's  comments  regarding the Annual
Plan, the Manager will reasonably respond to such comments. The Manager and the
Members will use their  reasonable  best efforts to resolve any questions  with
respect to revisions to the proposed operating plan and to agree upon an Annual
Plan for the Fiscal Year in question  prior to the beginning of the Fiscal Year
to which such Annual  Plan  relates.  If the  Manager  and the  Members  cannot
resolve such questions  prior to the  commencement  of the Fiscal year to which
the Annual  Plan in question  relates,  the  Manager  will  continue to manage,
maintain,  supervise and direct the Company in accordance  with its reasonable,
good faith belief as to the best interests of the Company.

6.12 Amendments to Annual Plan. If any change of circumstance occurs during any
Fiscal Year that the Manager reasonably believes makes it necessary to increase
expenditures  under  any  Annual  Plan by more than 20% in the  aggregate,  the
Manager will prepare a proposed  amended  Annual Plan,  as the case may be, and
will deliver it to the Members, at which time the procedures  applicable to the
approval of an Annual Plan under 6.11 will apply (as if such  proposed  amended
Annual Plan were for the entire Fiscal Year).

6.13  Off-Site  Mitigation.  The costs of off-site  mitigation  required by any
governmental  authority as a condition to  development  of the Property will be
borne by the Company,  but to the extent such mitigation includes a requirement
to construct employee housing,  Booth Creek will use its best efforts to convey
to the Company (or otherwise make  available for such  housing),  at no cost to
the  Company,  land  which  is  owned by Booth  Creek,  is  sufficient  for the
construction of such housing,  and is at a location reasonably  satisfactory to
Booth Creek.


ARTICLE 7: MEETINGS OF MEMBERS

7.1 Special Meetings. Meetings of the Members, for any purpose or purposes, may
be called at any time by any Member, but will in any case be held quarterly.
<PAGE>

7.2 Place.  The Manager may designate any place within Eagle County,  Colorado,
as the place of meeting for any meeting of the Members.  If no  designation  is
made, or if a special meeting is otherwise called, the place of meeting will be
the Company's registered office in Colorado.

7.3 Notice.  Notice of any meeting  must be given not less than 5 days nor more
than 30 days before the date of the meeting to all  Members,  but in case of an
Emergency,  such meeting may be called on one (1) Business  Day's notice.  Such
Notice must state the place,  day,  and hour of the meeting and the purpose for
which the meeting is called.

7.4 Waiver of Notice. Any Member may waive, in writing,  any Notice required to
be given to such  Member,  whether  before  or after  the time  stated  in such
Notice.  Any  Member  who  signs  minutes  of action  (or  written  consent  or
agreement)  will be deemed to have waived any  required  Notice with respect to
such action.

7.5 Record Date. For the purpose of determining  Members  entitled to Notice of
or to vote at any meeting of Members,  the date on which  Notice of the meeting
is first given will be the record date for the  determination  of Members.  Any
such  determination  of Members entitled to vote at any meeting of Members will
apply to any adjournment of a meeting.

7.6  Quorum.  A quorum at any  meeting of Members  will  consist of Members who
together own sufficient  Ownership  Interests to take the action proposed to be
taken at the  pertinent  meeting.  Any meeting at which a quorum is not present
may adjourn the meeting to a place, day and hour without further Notice.

7.7 Manner of Acting.  If a quorum is present at any annual or special  meeting
of the Company,  the affirmative Vote of Members as set forth in Article 6 will
be the act of the Members.

7.8  Proxies.  At any  meeting  of  Members,  a Member may vote in person or by
written proxy given to another Member.  Such proxy must be signed by the Member
or by a duly authorized  attorney-in-fact  and filed with the Company before or
at the time of the meeting. No proxy will be valid after eleven months from the
date of its signing unless otherwise  provided in the proxy.  Attendance at the
meeting by the Member  giving the proxy will revoke the proxy during the period
of attendance.

7.9 Meetings by  Telephone.  Members may  participate  in a meeting by means of
conference telephone or similar  communications  equipment by which all Members
participating  in the  meeting  can hear  each  other at the  same  time.  Such
participation  will constitute  presence in person at the meeting and waiver of
any required Notice.

7.10 Action Without a Meeting.  Any action required or permitted to be taken at
a meeting of Members may be taken  without a meeting if the action is evidenced
by one or more written consents  describing the action taken, signed by Members
owning total Economic  Interests  sufficient  for the particular  action as set
<PAGE>

forth in  Article  6.  Action so taken is  effective  when  sufficient  Members
approving  the action have signed the consent,  unless the consent  specifies a
later effective date. The Members who take any such action will promptly notify
any Members not executing  any such written  consent  concerning  the action so
taken by the Members.


ARTICLE 8: LIABILITY OF A MEMBER

8.1 Limited  Liability.  Except as  otherwise  provided in the Act,  the debts,
obligations and liabilities of the Company (whether  arising in contract,  tort
or otherwise)  will be solely the debts,  obligations  and  liabilities  of the
Company,  and neither the Manager nor any Member of the Company  (including any
Person who formerly held such status) is liable or will be obligated personally
for any such debt,  obligation or liability of the Company  solely by reason of
such status. No individual trustee,  officer,  director,  shareholder,  member,
manager,  partner,  employee,  agent or attorney of any entity  Member,  in its
individual  capacity  as  such,  will  have  any  personal  liability  for  the
performance  of any  obligation of such Member under this  Agreement  solely by
reason of such status.

8.2 Capital Contribution.  Each Member is liable to the Company for any Capital
Contribution or Distribution  that has been wrongfully or erroneously  returned
or made to such  Person  in  violation  of the  Act,  the  Certificate  or this
Agreement.  No  Member  is  liable  to  the  Company  to  make  any  Additional
Contribution,  but in the case of a Funding Default,  Booth Creek will have the
remedies set forth in 3.1[d] and 13.12[a].

8.3 Capital Return. If any Member receives a Distribution from the Company, the
Member will have no  liability  under the Act or other  applicable  law for the
amount of the Distribution after the expiration of three years from the date of
the Distribution,  unless an action to recover the Distribution from the Member
is  commenced  prior  to  the  expiration  of  the  three-year  period  and  an
adjudication of liability against the Member is made in such action. The amount
of any Distribution returned to the Company by a Member or paid by a Member for
the account of the Company or to a creditor of the Company will be added to the
account or accounts from which it was subtracted when it was distributed to the
Member.

8.4 Reliance.  Any Member  (including  the Manager) will be fully  protected in
relying  in  good  faith  upon  the  records  of  the  Company  and  upon  such
information,  opinions, reports or statements by [a] any of the Company's other
Members,  employees or committees or [b] any other Person who has been selected
with reasonable care as to matters such Person  reasonably  believes are within
such other Person's professional or expert competence. Matters as to which such
reliance  may be made  include  the value and  amount of  assets,  liabilities,
Income and  Losses of the  Company,  as well as other  facts  pertinent  to the
existence  and amount of assets  from  which  distributions  to  Members  might
properly be made.


ARTICLE 9: INDEMNIFICATION
<PAGE>

9.1  Indemnification  by Company.  To the maximum extent  permitted by law, the
Company will defend,  indemnify  and hold harmless the Members  (including  the
Manager, in its capacity as a manager) and their respective Affiliates, and the
partners, members, shareholders, directors, officers, and legal counsel of such
Members and their Affiliates,  and may defend,  indemnify and hold harmless the
agents and employees of any of the foregoing  (each such Person so indemnified,
an  "Indemnitee")  from and against any and all  liabilities,  losses,  claims,
judgments,  fines, settlements and damages incurred by the Indemnitee or by the
Company arising out of any claim based upon any acts performed or omitted to be
performed  by  the  Indemnitee  or  by  the  Company  in  connection  with  the
organization,  management,  business,  operations  or property of the  Company,
including  costs,  expenses and attorneys' fees (which may be paid as incurred)
expended in the settlement or defense of any such claims,  except to the extent
that the claim giving rise to such  indemnification  rights:  [a] arises out of
gross negligence  (which for purposes of this Agreement means an act or failure
to act with reckless  disregard of the  consequences  of such act or failure to
act), [b] willful misconduct,  [c] a Material Manager Breach by the Manager, or
[d] a material breach of this Agreement by any Member. Any amounts  indemnified
pursuant  to this 9.1 will be  recoverable  only from the assets of the Company
and not from the Members. Notwithstanding the foregoing, no Member or Affiliate
of a member will be indemnified  under this Agreement for any such liabilities,
losses, claims,  judgments,  fines,  settlements or damages incurred [a] in its
capacity  as an  independent  contractor  of the Company  (the  indemnification
provisions, if any, in the independent contractor agreement between such Person
and the Company  will apply  instead)  or [b] as a result of any claim  brought
against it by any of its shareholders,  partners,  members or Affiliates, or in
the case of EWRD V, brought against it by any EWRD Parties who may, directly or
indirectly, be members of a Project LLC.

9.2 Expense  Advancement.  With respect to the reasonable  expenses incurred by
the  Manager  or a Member  who is a party to a  Proceeding,  the  Company  will
provide  funds to such  Person  in  advance  of the  final  disposition  of the
Proceeding if [a] such Person  furnishes the Company with such Person's written
affirmation  of a  good-faith  belief  that it has met the  standard of conduct
described in 9.1, [b] such Person  agrees in writing to repay the advance if it
is determined that it has not met such standard of conduct, and [c] the Company
determines  that,  based on then known facts,  indemnification  is  permissible
under this Article.

9.3 Insurance.  The  indemnification  provisions of this Article do not limit a
Member's  or  the  Manager's  right  to  recover  under  any  insurance  policy
maintained  by the Company.  If, with respect to any loss,  damage,  expense or
liability  described  in 9.1,  any Member or the Manager  receives an insurance
policy indemnification payment which, together with any indemnification payment
made by the  Company,  exceeds  the  amount of such  loss,  damage,  expense or
liability, then such Person will immediately repay such excess to the Company.


ARTICLE 10: ACCOUNTING AND REPORTING
<PAGE>

10.1 Fiscal Year.  For income tax and accounting  purposes,  the Fiscal Year of
the Company will end on December 31 in each year (unless otherwise  required by
the Code).

10.2 Accounting  Method.  For income tax and accounting  purposes,  the Company
will use the accrual  method of accounting  (unless  otherwise  required by the
Code).

10.3 Tax Classification. Notwithstanding any other provision of this Agreement,
no Member,  Manager or employee of the Company may take any action  (including,
but  not  limited  to,  the  filing  of  a  U.S.   Treasury  Form  8832  Entity
Classification  Election) which would cause the Company to be  characterized as
an entity other than a partnership for federal income tax purposes  without the
affirmative unanimous Vote of the Members.

10.4 Returns.  The Company will use reasonable efforts to cause the preparation
and  timely  filing  of all tax  returns  required  to be filed by the  Company
pursuant  to the  Code,  as well as all  other  tax  returns  required  in each
jurisdiction in which the Company does business.

10.5 Reports.  The Manager, at the expense of the Company,  will use reasonable
efforts to cause to be prepared and  distributed  to the Members the  following
reports:

[a]  Monthly:  an income statement and a balance sheet,  prepared in accordance
     with GAAP, within seven (7) business days after the last day of each month
     on a monthly and year-to-date basis.

[b]  Quarterly:  an income statement,  balance sheet, a statement of cash flows
     and statements of the Company's equity on a quarterly  basis,  prepared in
     accordance with GAAP, within ten (10) business days following the last day
     of each calendar quarter.

[c]  Other:  From  time to time  and with  reasonable  promptness,  such  other
     financial statements,  budgets, plans,  schedules,  narrative information,
     and further information in respect of the business,  affairs and financial
     condition of the Company as any Member may reasonably request.

[d]  Annual:  unaudited annual financial statements prepared on an annual basis
     within ten (10) business days after the last day of each year.

10.6 Annual Audit.
<PAGE>

[a]  Each Fiscal Year,  an audit will be made by the Company's  accountants  at
     the expense of the Company. The audit will be conducted in accordance with
     generally accepted auditing  standards,  and will cover all of the assets,
     properties, liabilities and net worth of the Company and the Project LLC's
     as well as its and their dealings, transactions and operations during such
     Fiscal Year, together with all other matters customarily  included in such
     accountings  and audits or as may be  reasonably  required by the Manager.
     Any Member will have the right to audit the Company's financial statements
     and  those  of any  Project  LLC.  If such an  audit  occurs,  the  Member
     requesting the audit will have the books of the Company or the Project LLC
     audited or re-audited,  as the case may be, at that Member's expense,  but
     if the audit or re-audit  discloses a variance of 5% or greater in the net
     income or loss of the Company or the Project LLC,  from that  specified in
     the financial  statements  for the period  audited,  the audit or re-audit
     will be a Company expense.

[b]  At the expense of the  Company,  within 90 days after the last day of each
     Fiscal  Year,  the Manager  will  furnish the Members  with a copy of such
     audited financial statements promptly after they become available.

10.7  Books and Records.

[a]  The  following  books  and  records  of the  Company  will  be kept at its
     registered  office  in  Colorado:   [i]  a  current  list,  set  forth  in
     alphabetical order, of the full name and last known business, residence or
     mailing  address of each Member,  [ii] the original of the Certificate and
     of this  Agreement,  as amended (as well as any signed  powers of attorney
     pursuant to which any such  document  was  executed),  [iii] a copy of the
     Company's  federal,  state and local income tax returns and  reports,  and
     annual financial statements of the Company, for the six most recent years,
     [iv] minutes, or minutes of action or written consent, of every annual and
     special  meeting  of the  Company  and [v] copies of this  Agreement,  all
     amendments to this Agreement and all amended and restated  version of this
     Agreement and copies of any prior  operating  agreement  pertaining to the
     Company  but no  longer  in  effect,  and  [vi]  copies  of any  writings,
     permitted or required with respect to any Member's  obligation to make any
     Capital Contributions.

[b]  The  Manager,  at the  Company's  expense,  will  keep  at  the  Company's
     principal office separate books of account for the Company which will show
     a true and accurate record of all costs and expenses incurred, all credits
     made and received and all income derived in connection  with the operation
     of the Company business in accordance with generally  accepted  accounting
     principles consistently applied as to the Company's financial position and
     results of operations.

[c]  Each Member will, at its sole expense, have the right, at any time without
     Notice to the other,  to examine,  copy and audit the Company's  books and
     records during normal business hours.
<PAGE>

[d]  All books, records (including bills and invoices),  reports and returns of
     the Company required by this Article 10 will be maintained in a manner and
     form reasonably determined by the Manager.

10.8  Information.  Each  Member  has the  right,  from  time to time  and upon
reasonable  demand, to obtain from the Company:  [a] a current list of the full
name and last known business,  residence or mailing address of each Member, [b]
a copy of the  Certificate  and of this  Agreement,  as amended (as well as any
signed powers of attorney  pursuant to which any such  document was  executed),
[c] a copy of the  Company's  federal,  state and local  income tax returns and
reports and annual financial statements of the Company, for the six most recent
years, [d] minutes,  or minutes of action or written consent,  of every meeting
of the Members of the  Company,  [e] true and full  information  regarding  the
amount of money and a  description  and  statement  of the agreed  value of any
other property or services contributed or to be contributed by each Member, and
the date on which each became a Member, [f] true and full information regarding
the status of the business  and  financial  condition  of the Company,  and [g]
other  information  regarding  the  affairs  of  the  Company  as is  just  and
reasonable.  Any  demand by a Member  under  this 10.8 must be by Notice to the
Company.  Any  inspection or copying of the  Company's  books and records under
this 10.8 will be during  normal  business  hours,  and at the  expense  of the
Member making the demand.

10.9 Banking.  The Company may establish one or more bank or financial accounts
and safe deposit  boxes.  The Company may authorize one or more  individuals to
sign checks on and withdraw  funds from such bank or financial  accounts and to
have access to such safe  deposit  boxes,  and may place such  limitations  and
restrictions on such authority as the Company deems advisable.

10.10 Tax Matters Partner.

[a]  The  Manager  is hereby  designated  tax  matters  partner  ("Tax  Matters
     Partner") as defined in Section  6231(a)(7)  of the Code.  The Tax Matters
     Partner will take no action (other than  ministerial  action or any action
     specifically permitted under this 10.10) without the prior approval of the
     Members.  The Tax Matters  Partner will not be required to take any action
     or  incur  any  expenses  for the  prosecution  of any  administrative  or
     judicial  remedies  in its  capacity  as Tax  Matters  Partner  unless the
     Members agree on a method of sharing expenses  incurred in connection with
     the  prosecution of such remedies.  As long as the Tax Matters  Partner is
     not negligent and acts in good faith pursuant to  instructions it receives
     from the Members or from the Company,  the Company will indemnify and hold
     harmless the Tax Matters  Partner from and against any and all liabilities
     incurred by the Tax Matters  Partner in connection  with any activities or
     undertakings taken by it in its capacity as Tax Matters Partner.

[b]  The Tax Matters  Partner will be responsible for undertaking the statutory
     responsibilities  of the "tax matters partner" pursuant to Subchapter C of
     Chapter  63 of  Subtitle  F of the Code,  as set forth in the Code and the
     Treasury  Regulations.  The Tax Matters Partner will fully comply with the
     requirements of Temporary Treasury  Regulations Section  301.6223(g)-1 and
<PAGE>

     any successor  provision,  including providing each Member with notices of
     the following:

     [i]  The Tax Matters Partner will, within five (5) business days after the
          mailing by the Service of the notice specified in Section 6223(a)(1),
          forward a copy of that notice to each Member.

     [ii] The Tax Matters Partner will, within five (5) business days after the
          mailing by the Service of the notice specified in Section 6223(a)(2),
          forward a copy of that notice to each Member.

     [iii]The  Tax  Matters  Partner  will  promptly  furnish  to  each  Member
          information with respect to the following (in the case of any action,
          within five (5) business days of taking that action):

          [A]  Closing conference with the examining agent;

          [B]  Proposed  adjustments,  rights of appeal,  and  requirements for
               filing of a protest;

          [C]  Time and place of any appeals conference;

          [D]  Acceptance by the Internal Revenue Service (the "Service");

          [E]  Consent  to the  extension  of the  period of  limitations  with
               respect to all Members;

          [F]  Filing of a request for administrative  adjustment  (including a
               request  for   substituted   return   treatment   under  Section
               301.6227(b)-2T) on behalf of the Company;

          [G]  Filing by the Tax  Matters  Partner  or any other  Member of any
               petition for judicial review under Section 6226 or 6228(a);

          [H]  Filing of any appeal with respect to any judicial  determination
               provided for in Section 6226 or 6228(a), and;

          [I]  Final judicial redetermination.

[c]  Except as otherwise provided in the Code, the tax treatment of any Company
     item will be determined at the Company level.
<PAGE>

[d]  Any Member has the right to participate in any  administrative  proceeding
     relating to the determination of Company items at the Company level.

[e]  Members  will  furnish  the Tax  Matters  Partner  with  such  information
     (including information specified in Section 6230(e) of the Code) as it may
     reasonably  request to permit it to provide the Internal  Revenue  Service
     with  sufficient  information  to allow  proper  notice to the  Members in
     accordance with Section 6223 of the Code.

[f]  Every Member will, on the Member's  return,  treat a Company tax item in a
     manner  which  is  consistent  with  the  treatment  of  such  item on the
     Company's  return  unless the Member has given the Company  prior  written
     notice of inconsistent  treatment  identifying the  inconsistency.  If any
     Member intends to file a Notice of  Inconsistent  Treatment  under Section
     6222(b) of the Code,  that Member will,  at least ten (10)  business  days
     prior to the filing of that notice, notify the other Members of the intent
     and the manner in which such Member's intended treatment of a Company item
     is (or  may be)  inconsistent  with  the  treatment  of  that  item by the
     Company.

[g]  The Tax Matters Partner will not enter into any extension of the period of
     limitations  for making  assessments on behalf of any other Member without
     first securing the written consent of that Member.

[h]  No Member will file,  pursuant to Section  6227 of the Code, a Request for
     Administrative  Adjustment of Company  items for any Company  taxable year
     without first  notifying all other  Members.  If all other  Partners agree
     with the  requested  adjustment,  the Tax  Matters  Partner  will file the
     Request  for  Administrative  Adjustment  on  behalf  of the  Company.  If
     unanimous  consent is not obtained within 30 days (or, if shorter,  within
     the  period  required  to  timely  file  the  Request  for  Administrative
     Adjustment),  any Member,  including the Tax Matters  Partner,  may file a
     Request for Administrative Adjustment on its own behalf.

[i]  The Tax Matters Partner will not, in its capacity as Tax Matters  Partner,
     file a petition  under Section 6226,  6228,  6234 or other Sections of the
     Code with respect to any Company item, or other tax matters  involving the
     Company,  without the unanimous consent of all of the Members.  Any Member
     intending to file a petition  under  Sections  6226,  6228,  6234 or other
     Sections  of the Code  with  respect  to any  Company  item,  or other tax
     matters involving the Company,  will notify the other Members at least ten
     (10) business  days in advance of filing of that  intention and the nature
     of the  contemplated  proceeding.  If any Member intends to seek review of
     any court decision rendered as a result of the proceeding instituted under
     the  preceding  part of this  10.10,  that  Member  will  notify the other
     Members of that intended action at least ten (10) business days in advance
     of filing a petition for review.

[j]  The Tax Matters  Partner  will not bind the other  Members to a settlement
     agreement without  obtaining the written  concurrence of the other Members
     that would be bound by that agreement. Any other Member that enters into a
<PAGE>

     settlement  agreement  with the  Secretary of the Treasury with respect to
     any Company  items,  as defined by Section  6231(a)(3)  of the Code,  will
     notify the other Members of that settlement agreement and its terms within
     ten (10) business days from the date of settlement.

[k]  The  provisions of this 10.10 will survive the  termination of the Company
     or the termination of any Member's interest in the Company and will remain
     binding on the Members for a period of time  necessary  to resolve any and
     all  matters  regarding  the  federal  and, if  applicable,  state  income
     taxation of the Company.  The Company will retain its records with respect
     to each  Fiscal  Year  until the  expiration  of the period  within  which
     additional federal or state income tax may be assessed for such year.

10.11 No Partnership.  The  classification of the Company as a partnership will
apply only for  federal  (and,  as  appropriate,  state and  local)  income tax
purposes.  This characterization,  solely for tax purposes,  does not create or
imply a general  partnership  between  the  Members  for state law or any other
purpose.  Instead,  the  Members  acknowledge  the  status of the  Company as a
limited liability company formed under the Act.

10.12  Confidentiality.  The Members agree to keep  confidential,  and to cause
their respective Affiliates to keep confidential, all books, records, financial
statements,  tax  returns,  budgets,  business  plans  and  projections  of the
Company, all other information concerning the business,  affairs and properties
of the Company, and all of the terms and provisions of this Agreement,  subject
to [a] any obligation to comply any  applicable  law, any rule or regulation of
any legal  authority  or  securities  exchange  or any  subpoena or other legal
process to make  information  available to the Persons  entitled to possess it,
and [b] disclosure to attorneys,  accountants,  financial advisors, lenders and
other Persons who receive such information  subject to an obligation to hold it
in  confidence.   The  Members  (and  their   Affiliates)  will  maintain  such
confidentiality  to the same degree as a reasonably  prudent person would,  and
such obligation will continue until such time, if any, as any such confidential
information either is, or becomes, a matter of public knowledge.


ARTICLE 11: DISSOLUTION

11.1 Dissolution. Dissolution of the Company will occur upon the first to occur
of [a] the decision of the Manager, in accordance with 6.2[g] or 6.3[g]; [b] an
event of Withdrawal  of a Member and the election of the  remaining  Members to
dissolve in accordance with 11.3; [c] the sale,  transfer or other  disposition
of all of the  Property or the Projects  upon the receipt of the  consideration
(including   collection  of  any  promissory   notes  or  other   evidences  of
indebtedness  received as consideration)  paid for such sale, transfer or other
disposition;  [d] the election of Booth Creek or EWRD V, in connection  with an
election by Booth Creek to exercise the Break-Up Remedy under  13.9[b][v];  and
[e] the decision of all of the Members to dissolve the Company.

11.2 Events of  Withdrawal.  An event of Withdrawal of a Member occurs when any
of the following occurs:
<PAGE>

[a]  With respect to any Member, upon the voluntary  withdrawal,  retirement or
     resignation of the Member by Notice to the Company;

[b]  With respect to any Member that is a corporation,  upon filing of articles
     of dissolution of the corporation;

[c]  With  respect to any Member  that is a  partnership,  a limited  liability
     company or a similar  entity,  upon  dissolution  and  liquidation of such
     entity (but not solely by reason of a technical  termination under Section
     708(b)(1)(B) of the Code);

[d]  With respect to any Member that is a trust, upon termination of the trust;

[e]  With respect to any Member, the Bankruptcy of the Member; or

[f]  Any other event which  terminates the continued  membership of a Member in
     the Company; other than a Transfer to a Permitted Transferee.

Within 10 days following the happening of any event of Withdrawal  with respect
to a Member,  such  Member  must give Notice of the date and the nature of such
event to the Company.

11.3 Continuation.  Subject to 11.1[b], in the event of Withdrawal of a Member,
the Company will be continued, and all Members will have the right to cause the
Company to be continued,  unless the  remaining  Members  unanimously  elect to
dissolve.  If the  Company is so  continued,  with  respect to any Member as to
which an  event of  Withdrawal  has  occurred,  such  Member  or such  Member's
successor-in-interest  (as the case may be) will, without further act, cease to
be a Member and will have only those limited rights afforded a Transferee of an
Ownership Interest pursuant to 13.6.

11.4  Payment for Rights.  The Company  agrees to pay $100 to any Member (or to
such Member's successor-in-interest, as the case may be) as to whom an event of
Withdrawal occurs, and each Member agrees that if an event of Withdrawal occurs
with respect to it, it will accept such payment,  as full consideration for the
change in rights  applicable  to it as a result of 11.3.  Such  payment will be
made not later than one year after the event of Withdrawal occurs.


ARTICLE 12: LIQUIDATION

12.1 Liquidation. Upon Dissolution of the Company, the Company will immediately
proceed to wind up its affairs and  liquidate  pursuant to this Article 12. The
Manager or if the Manager fails to act, any Person  appointed by Members owning
more than 50% of the  Economic  Interests  held by all  Members  other than the
Manager, will act as the liquidating trustee. The winding up and Liquidation of
the Company will be accomplished in a businesslike  manner as determined by the
<PAGE>

liquidating  trustee.  A  reasonable  time  will be  allowed  for  the  orderly
Liquidation  of the Company and the discharge of liabilities to creditors so as
to enable the Company to minimize any losses  attendant upon  Liquidation.  Any
gain or loss on  disposition  of any  Company  assets  in  Liquidation  will be
allocated  to  Members  in  accordance  with the  provisions  of Article 4. Any
liquidating  trustee  is  entitled  to  reasonable  compensation  for  services
actually  performed,  and may contract for such  assistance in the  liquidating
process as such Person  deems  necessary  or  desirable.  Until the filing of a
certificate of cancellation  under 12.6, and without affecting the liability of
the Members and without  imposing  liability on the  liquidating  trustee,  the
liquidating trustee may settle and close the Company's business,  prosecute and
defend  suits,  dispose of its  property,  discharge or make  provision for its
liabilities, and make Distributions in accordance with the priorities set forth
in this Article.

12.2  Priority of Payment.  The assets of the Company  will be  distributed  in
Liquidation  in the  following  order of  priority  to the extent of  available
funds:

[a]  to  creditors  by the  payment or  provision  for payment of the debts and
     liabilities of the Company (other than any loans or advances that may have
     been made by any Member or any  Affiliate of a Member) and the expenses of
     Liquidation;

[b]  to the setting up of any reserves  that are  reasonably  necessary for any
     contingent,  conditional  or unmatured  liabilities  or obligations of the
     Company;

[c]  to the repayment of any loans,  including  Emergency Loans, or advances to
     the  Company  that were made by any  Member or any  Affiliate  of a Member
     (according  to the  relative  priority  of  repayment  of such  loans  and
     proportionally  among loans of equal priority if the amount  available for
     repayment is insufficient for payment in full);

[d]  an amount equal to the aggregate Adjusted Capital Contribution Amounts for
     Excess Capital of all Members as of the date of such  Distribution will be
     distributed to all of the Members in proportion to their Adjusted  Capital
     Contribution   Amounts  for  Excess   Capital  as  of  the  date  of  such
     Distribution;

[e]  an amount  equal to the  aggregate  Unpaid  Preferred  Return  for  Excess
     Capital  of all  Members  as of the  date  of  such  Distribution  will be
     distributed to all of the Members in proportion to their Unpaid  Preferred
     Returns for Excess Capital as of the date of such Distribution;

[f]  an amount equal to the sum of the Adjusted Capital Contribution Amount for
     Land, the Adjusted Capital Contribution Amount for Capital Commitment, and
     the Minimum  Booth Creek  Return,  each  determined as of the date of such
     Distribution,  will be  distributed  to the Members pro rata in accordance
     with the ratio  that each  component  of such sum bears to the total  sum;
     amounts  distributed to EWRD V pursuant to this 12.2[f] will be charged in
     order first to the Adjusted Capital  Contribution Amount for Land and then
     the Adjusted Capital Contribution Amount for Capital Commitment;
<PAGE>

[g]  an amount  equal to the  aggregate  Unpaid  Preferred  Return for  Capital
     Commitment as of the date of such Distribution will be distributed to EWRD
     V;

[h]  an amount equal to the aggregate  Unpaid  Preferred  Return for Land as of
     the date of such Distribution will be distributed to EWRD V; and

[i]  to the Members in accordance with their Economic Interests.

12.3  Liquidating  Distributions.  The  liquidating  Distributions  due  to the
Members will be made by selling the assets of the Company and  distributing the
net  proceeds.  Notwithstanding  the  preceding  sentence,  but  only  upon the
affirmative Vote of all Members,  the liquidating  Distributions may be made by
distributing  the assets of the Company in kind to the Members in proportion to
the amounts  distributable to them pursuant to 12.2, and valuing such assets at
their Fair Market Value (net of  liabilities  secured by such property that the
Member takes subject to or assumes) on the date of Distribution.  Any valuation
by appraisal  will be made in  accordance  with 3.4. Each Member agrees to save
and hold harmless the other Members from such Member's  proportionate  share of
any and all such liabilities which are taken subject to or assumed. Appropriate
and  customary  prorations  and  adjustments  will  be  made  incident  to  any
Distribution in kind. The Members will look solely to the assets of the Company
for the return of their Capital Contributions, and if the assets of the Company
remaining  after the payment or discharge of the debts and  liabilities  of the
Company  are  insufficient  to  return  such  contributions,  they will have no
recourse  against  any other  Member.  The  Members  acknowledge  that 12.2 may
establish  Distribution  priorities  different  from  those  set  forth  in the
provisions of the Act applicable to  Distributions  upon  Liquidation,  and the
Members  agree that they intend,  to that extent,  to vary those  provisions by
this Agreement.

12.4 No Restoration  Obligation.  Except as otherwise  specifically provided in
Article  8,  nothing  contained  in this  Agreement  imposes  on any  Member an
obligation  to make an  Additional  Contribution  in order to restore a deficit
Capital Account upon Liquidation of the Company.

12.5  Liquidating  Reports.  A report will be submitted  with each  liquidating
distribution  to  Members  made  pursuant  to 12.3,  showing  the  collections,
disbursements  and  distributions  during the period which is subsequent to any
previous report. A final report, showing cumulative collections,  disbursements
and  distributions,  will  be  submitted  upon  completion  of the  liquidation
process.

12.6  Certificate  of  Cancellation.  Upon  Dissolution  of the Company and the
completion  of  the  winding  up of  its  business,  the  Company  will  file a
certificate  of  cancellation  (to cancel the  Certificate)  with the  Delaware
Secretary  of State  pursuant to the Act. At such time,  the Company  will also
file an  application  for  withdrawal  of its  certificate  of authority in any
jurisdiction where it is then qualified to do business.
<PAGE>

ARTICLE 13: TRANSFER RESTRICTIONS

13.1  General  Restriction.  No  Person  may  Transfer  all or any part of such
Person's  Ownership  Interest  in any manner  whatsoever  except to a Permitted
Transferee,  and then, in each case, only if the requirements of 13.4 have also
been satisfied.  Any other Transfer of all or any part of an Ownership Interest
is null and void, and of no effect.

13.2 No  Member  Rights.  No Member  has the right or power to confer  upon any
Transferee, other than a Permitted Transferee of an Ownership Interest (subject
to 13.4),  the  attributes of a Member in the Company.  No Transferee of all or
any part of an Ownership Interest (including any Transferee in a Transfer which
occurs by operation of law to a Person who is not a Permitted Transferee), will
succeed, by virtue of such Transfer, to any rights as a Member in the Company.

13.3 Permitted  Transferee.  Subject to the  requirements  set forth in 13.4, a
Member may Transfer all or any part of such Member's  Ownership Interest to any
of the following Persons ("Permitted Transferees"):

[a]  With respect to the Transfer of all of an Ownership  Interest  (including,
     in the  case  of the  Manager,  a  Transfer  of  all  of  its  rights  and
     obligations  as  the  Manager),  any  Transferee;  but  if  such  Transfer
     constitutes  a Booth  Creek  Change of Control  or an East West  Change of
     Control,  the other provisions of this Agreement  regarding such change of
     control will also apply;

[b]  With respect to the  Transfer of less than all of an  Ownership  Interest,
     any  Transferee  approved  in  writing by all of the other  Members,  such
     approval not to be unreasonably withheld,  delayed or conditioned;  but if
     such Transfer  constitutes a Booth Creek Change of Control or an East West
     Change of Control,  the other provisions of this Agreement  regarding such
     change of control will also apply; and

[c]  In the case of Booth Creek, to any Transferee in connection with a sale of
     the Resort to such  Transferee,  if EWRD V has not  exercised the right of
     first offer set forth in the Resort Right of First Offer Agreement, but if
     such  Transfer  constitutes  a Booth Creek  Change of  Control,  the other
     provisions of this  Agreement  regarding  such change of control will also
     apply.

13.4 General Conditions on Transfers. No Transfer of an Ownership Interest will
be effective unless all of the conditions set forth below are satisfied:

[a]  Unless  waived by the Company,  the  Transferor  signs and delivers to the
     Company an undertaking in form and substance  satisfactory  to the Company
     to pay all reasonable  expenses incurred by the Company in connection with
     the Transfer  (including,  but not limited to,  reasonable fees of counsel
     and  accountants  and  the  costs  to  be  incurred  with  any  additional
<PAGE>

     accounting required in connection with the Transfer, and the cost and fees
     attributable  to preparing,  filing and recording  such  amendments to the
     Certificate  or  other  organizational  documents  or  filings  as  may be
     required by law);

[b]  Unless waived by the Company,  the  Transferor  delivers to the Company an
     opinion of counsel for the Transferor  satisfactory  in form and substance
     to the Company to the effect that the Transfer of the  Ownership  Interest
     is in compliance with the applicable  federal and state  securities  laws,
     and a statement of the  Transferee in form and substance  satisfactory  to
     the Company making appropriate  representations  and warranties in respect
     to compliance with the applicable federal and state securities laws and as
     to any other matter reasonably required by the Company;

[c]  The Transferor  signs and delivers to the Company a copy of the assignment
     of the Ownership Interest to the Transferee  (substantially in the form of
     the attached Exhibit D);

[d]  The   Transferee   signs  and   delivers  to  the  Company  an   agreement
     (substantially  in the form of the attached Exhibit E) to be bound by this
     Agreement;

[e]  The Transfer is in compliance  with the other  provisions of this Article;
     and

[f]  The  Transfer  does not  constitute  a violation of or an event of default
     under, or give rise to a right to accelerate any indebtedness described in
     any note,  mortgage,  loan agreement or similar  instrument or document to
     which the Company or any Project LLC is a party,  unless the  violation or
     event of  default  is  waived by the  parties  to any such  instrument  or
     document.

The  Transfer  of an  Ownership  Interest  will be  effective  as of 12:01 a.m.
(Mountain  Time) on the first day of the month following the month in which all
of the above  conditions  have been  satisfied.  Upon the effective  date,  the
Company will amend Exhibit B to reflect the new Economic Interests.

No  Transfer  by the  Manager  or  any  other  Member  will  relieve  it of any
liabilities accrued during the period prior to the Transfer.

13.5  Admission.  Without the consent of any other  Member,  and subject to the
provisions of 13.4,  [a] the Manager will cause any  Permitted  Transferee of a
Member to be admitted as a Member,  and [b] the Manager may cause any Permitted
Transferee of its Ownership Interest to be admitted as a Member and substituted
for it as the Manager (in which event, all references in this Agreement to EWRD
V will refer to such Transferee). Any other Transferee of an Ownership Interest
(including  any  Transferee in a Transfer which occurs by operation of law to a
Person who is not a Permitted  Transferee) will not become a substitute  Member
of the Company.

13.6 Rights of  Transferees.  Any Transferee of all or any part of an Ownership
Interest  (including  any Transferee in a Transfer which occurs by operation of
law to a Person who is not a  Permitted  Transferee)  who is not  admitted as a
substitute  Member  in  accordance  with  this  Agreement  has no right  [a] to
participate or interfere in the management or  administration  of the Company's
<PAGE>

business or affairs,  [b] to Vote or agree on any matter  affecting the Company
or  any  Member,   [c]  to  require  any  information  on  account  of  Company
transactions,  or [d] except as provided in the next  succeeding  sentence,  to
inspect the Company's books and records. The only rights of a Transferee of all
or any part of an Ownership Interest who is not admitted as a substitute Member
in accordance with this Agreement are [x] to obtain the  information  specified
in 10.8 if the  Transferee  executes a  confidentiality  agreement (in form and
substance  satisfactory to the Manager in its sole discretion)  concerning such
information,  [y] to receive the  allocations  and  Distributions  to which the
Transferor was entitled as if the Transferee held the Ownership Interest of the
Transferor (to the extent of the Ownership  Interest  Transferred),  and [z] to
receive all necessary tax reporting information.  The Company, the Manager, and
the Members will not owe any fiduciary  duty of any nature to a Transferee  who
is not  admitted as a  substitute  Member in  accordance  with this  Agreement.
However, each Transferee of all or any part of an Ownership Interest (including
both  immediate  and  remote  Transferees)  will  be  subject  to  all  of  the
obligations,  restrictions  and other terms  contained in this  Agreement as if
such  Transferee  were a  Member.  To the  extent  of  any  Ownership  Interest
Transferred,  the  Transferor  Member  does not possess any right or power as a
Member and may not exercise any such right or power  directly or  indirectly on
behalf of the Transferee.

13.7 Security Interest. The pledge or granting of a security interest,  lien or
other  encumbrance  in or  against  all or any  part  of a  Member's  Ownership
Interest is a Transfer that is subject to the  provisions  of 13.4,  but such a
Transfer does not cause the Member to cease to be a Member.  The foreclosure or
transfer in lieu of foreclosure of an Ownership  Interest is a Transfer that is
subject to all of the  provisions  of Article 13. Upon  foreclosure  or sale in
lieu of  foreclosure  of any such secured  interest,  the secured party will be
entitled to receive the  allocations and  Distributions  as to which a security
interest has been granted by such Member. In no event will any secured party be
entitled to exercise  any rights of a Member under this  Agreement  (unless and
until such Person is admitted as a substitute  Member),  and such secured party
may look only to such  Member  for the  enforcement  of any of its  rights as a
creditor.  In no event will the Company have any liability or obligation to any
Person by reason of the  Company's  payment of a  Distribution  to any  secured
party as long as the  Company  makes such  payment  in  reliance  upon  written
instructions from the Member to whom such Distributions  would be payable.  Any
secured party will be entitled,  with respect to the security interest granted,
only to the Distributions to which the assigning Member would be entitled under
this  Agreement,  and only if,  as and when  such  Distribution  is made by the
Company.  Neither the Company nor any Member will owe any fiduciary duty of any
nature to a secured party. Reference to any secured party includes any assignee
or successor-in-interest of such Person.

13.8  Sale of  Resort.  If Booth  Creek  commences  the  right  of first  offer
provisions in the Resort Right of First Offer  Agreement in  connection  with a
proposed sale of the Northstar Ski Area and Resort (the "Resort"),  Booth Creek
will by Notice to EWRD V (given at the same time that Booth Creek commences the
right of first offer under the Resort Right of First Offer  Agreement)  combine
such right of first offer with a right of first offer to purchase  all of Booth
Creek's  Ownership  Interest,  such that EWRD V must elect to purchase both the
Resort and the  Ownership  Interest if it elects to exercise the right of first
offer with respect to the Resort.  The  provisions of the Resort Right of First
<PAGE>

Offer  Agreement  relating  to such right of first  offer  (such as the duty to
transfer the Ownership  Interest  free and clear of all liens and  encumbrances
and covenants of further assurance) will also apply to the right of first offer
of Booth Creek's Ownership  Interest,  and the closing for the two transactions
will occur simultaneously. If EWRD V elects not to exercise such right of first
offer, Booth Creek will be free to sell its Ownership Interest to the purchaser
of the Resort as provided in the Resort Right of First Offer  Agreement (but if
Booth Creek in fact sells the Resort to such  purchaser,  such  purchaser  also
must  purchase  such  Ownership  Interest on the terms  specified in the Resort
Right of First  Offer  Agreement),  and such  purchaser  will be  admitted as a
Member of the  Company,  subject  to 13.4 and to EWRD V's  right to invoke  the
Booth Creek Change of Control Remedy specified in 13.11.

13.9 Break-Up Remedy.

[a]  If, prior to the Project  Completion  Date of all  Projects,  an East West
     Change of Control  occurs or  Deadlock  occurs,  Booth  Creek may elect to
     exercise the Break-Up Remedy, by giving Notice to EWRD V not later than 30
     days  after  Booth  Creek  receives  Notice  from EWRD V that an East West
     Change of Control has occurred or within 30 days after Deadlock occurs, as
     the case may be. If, prior to the Project Completion Date of all Projects,
     Deadlock  occurs,  EWRD V may elect to exercise  the Break-Up  Remedy,  by
     giving Notice to Booth Creek within 30 days after Deadlock occurs.

[b]  If Booth Creek or EWRD V elects to exercise the Break-Up  Remedy,  [i] the
     Company  will be required  to convey to Booth  Creek,  by grant deed,  the
     Conveyance Property,  free and clear of all liens and encumbrances (except
     for Permitted Liens), on or prior to the later of [A] the date which is 60
     days  after EWRD V's  receipt of such  Notice and [B] the date which is 30
     days after the date on which the Conveyance  Property may first be legally
     conveyed, [ii] Booth Creek will be required to pay to EWRD V, the Break-Up
     Infrastructure Costs with respect to the Conveyance Property, such payment
     to be made at the time the Conveyance  Property is conveyed to Booth Creek
     by the delivery of an unsecured  promissory note in the form of Exhibit L,
     [iii] the Company  will  continue to develop the  Projects  other than the
     Projects  located on the  Conveyance  Property,  but will be  required  to
     develop such Projects with  reasonable  diligence after such time as Booth
     Creek has caused the  development  of the Village Core to be more than 80%
     completed in accordance with the Master  Development Plan, as amended from
     time to time,  [iv] if no East West Change of Control has  occurred,  upon
     conveyance of the Conveyance  Property to Booth Creek, this Agreement will
     be  automatically  amended,  without the requirement of a signature or any
     other action by any Person,  such that all of the provisions in 6.3 (other
     than 6.3[b]) are moved to, and are governed by, the provisions of 6.2, and
     the provisions of 6.4[i] are moved to, and are governed by, the provisions
     of 6.3, and [v] if an East West Change of Control has  occurred,  if Booth
     Creek elects the Break-Up  Remedy in connection with such East West Change
     of  Control,  and if a  Deadlock  thereafter  occurs  (with the  beginning
     measurement  date in the  definition of Deadlock being the date that Booth
     Creek  so  exercises  the  Break-Up  Remedy),  then  the  Company  will be
     dissolved at the election of Booth Creek or EWRD V (with such  election to
     be made within 30 days after such Deadlock occurs). The foregoing remedies
<PAGE>

     are  referred  to as the  "Break-Up  Remedy."  The right of Booth Creek to
     exercise  the  Break-Up  Remedy in the  context of an East West  Change of
     Control  reflects the agreement of the Members that a substantial  portion
     of the  consideration  and  inducement  for Booth Creek to enter into this
     Agreement  and  the  Real  Estate  Purchase  Agreement  is  Booth  Creek's
     expectation  that Harry H.  Frampton,  III or the Key East West  Employees
     will develop the Projects;  accordingly,  the conveyance to Booth Creek of
     the  Essential  Ski Property and the Village Core upon an East West Change
     of Control is not intended to be a penalty or a forfeiture but is intended
     to reflect a shifting of rights to Booth  Creek to control  the  Essential
     Ski Property and the Village  Core,  and to develop,  and gain profit from
     the development of, the Village Core.

[c]  The remedies provided for in this 13.9 are the sole and exclusive remedies
     of Booth Creek if prior to the Project Completion Date of all Projects, an
     East West Change of Control occurs or Deadlock occurs.

[d]  From and after the exercise of any Break-Up Remedy, the remedy provided in
     Section 3.1[d],  or the Booth Creek Change of Control Remedy,  Parcel P of
     the  Property  will remain the site of the Resort's  existing  maintenance
     building and related  facilities and equipment  until such time as EWRD V,
     at the expense of the Company and upon  reasonable  advance written Notice
     to Booth Creek:  [i] relocates the  maintenance  building and such related
     facilities and equipment to, or constructs  comparable (i.e. comparable in
     size, utilities services and infrastructure) facilities on, a site outside
     the  Property  reasonably  satisfactory  to Booth Creek and EWRD V or [ii]
     pays  to  Booth  Creek  an  amount  equal  to the  lesser  of the  cost of
     relocating  such  facilities  or   constructing   comparable   facilities.
     Following any such construction,  EWRD V, at the Company's  expense,  also
     will  demolish  and remove the existing  maintenance  building and related
     facilities.  Any such relocation or demolition will be undertaken during a
     season  in  which  the  facility  is not  in  active  use  by the  Resort.
     Furthermore,  following  such  relocation or  demolition,  all snow making
     equipment, ski lifts, and other Essential Ski Property,  currently located
     on  Parcel P will  remain  intact  indefinitely  and will  continue  to be
     available  for use by the  Resort  without  interruption  and in the  same
     manner as at the present. The Company will accommodate its development and
     sale of Parcel P to these requirements.

13.10 Reserved.

13.11 Booth Creek Change of Control.

[a]  If a Booth Creek  Change of Control  occurs,  EWRD V may elect to exercise
     the Booth Creek Change of Control Remedy,  by giving Notice to Booth Creek
     not later than 30 days after EWRD V receives  Notice from Booth Creek that
     a Booth Creek Change of Control has occurred.
<PAGE>

[b]  If EWRD V elects to  exercise  the Booth Creek  Change of Control  Remedy,
     this Agreement will be automatically amended, without the requirement of a
     signature or any other action by any person,  such that, on any particular
     date of determination  after EWRD V's election,  as to all of the Property
     other than the  Conveyance  Property,  all of the provisions in 6.3 (other
     than 6.3[b]),  are moved to, and are governed by the  provisions  of, 6.2,
     and 6.4[l] and 6.4[i] are moved to, and  governed  by the  provisions  of,
     6.3.  The  foregoing  remedy is referred to as the "Booth  Creek Change of
     Control Remedy."

13.12 Buy-out in the Event of Material Manager Breach.

[a]  If a Material Manager Breach occurs, Booth Creek may elect to purchase all
     of the Manager's  Ownership Interests by giving Notice (an "Offer Notice")
     to EWRD V within 30 days after the  occurrence  of such  Material  Manager
     Breach.  If such election is timely made,  Booth Creek will be required to
     purchase,  and EWRD V will be required to sell, EWRD V's entire  Ownership
     Interest in the Company to Booth Creek for cash in an amount  equal to the
     sum of 90% of the Unpaid Preferred Return of EWRD V and 90% of the Capital
     Account  balance of EWRD V, both as  determined  as of the date of closing
     under 13.12[b] (the "Purchase Price").  Similarly, if Booth Creek gives an
     Offer Notice,  all other Members and  Transferees of EWRD V and such other
     Members and EWRD Parties owning interests in the Project LLC's (other than
     the Company and other than any New Member under  3.2[b],  even if such New
     Member is an EWRD Party) will be obligated  to sell,  and Booth Creek will
     be obligated to purchase,  the Ownership  Interests of such Persons in the
     Company and the ownership  interests of such Persons in the Project LLC's,
     at the same time as the sale and  purchase  of the  Ownership  Interest of
     EWRD V, at a price equal to the sum of 90% of the Unpaid  Preferred Return
     of such  Persons and 90% of the Capital  Account  balances of such Persons
     (which, in the case of EWRD Parties owning interests in the Project LLC's,
     will be  determined  under  analogous  provisions);  EWRD V will cause the
     operating  agreement  for each  Project LLC to contain  provisions  to the
     foregoing  effect  and will  cause all EWRD  Parties  to comply  with such
     provisions.  If the Material  Manager  Breach  referenced in this [a] is a
     Funding  Default,  then [i] the 30-day  period  referred  to above will be
     changed to 120 days,  [ii] the reference to 90% will be changed to 50% for
     purposes of the Purchase Price to be paid to EWRD V, its Transferees,  and
     the EWRD  Parties,  and [iii] no payment for any Unpaid  Preferred  Return
     will be included in the Purchase Price.

[b]  The  closing of a  purchase  and sale under this 13.12 will be held at the
     principal  offices of the Company on a mutually  acceptable  date not more
     than 90 days  after  EWRD V's  receipt  of the Offer  Notice.  At any such
     closing,  Booth Creek will tender  payment of the Purchase Price to EWRD V
     and the other Persons by the delivery of unsecured promissory notes in the
     form of  Exhibit L (except  that,  in the case of a Funding  Default,  all
     principal  and  accrued  interest  will be due and  payable  on the  third
<PAGE>

     anniversary of the closing,  and, in the case of a Material Manager Breach
     other than a Funding  Default,  all principal and accrued interest will be
     due and payable in equal  monthly  installments  of principal and interest
     commencing  six  months  after the  closing  and  continuing  to the third
     anniversary of the closing, at which time all unpaid principal and accrued
     interest  will be due and  payable  in  full),  and EWRD V and such  other
     Persons will assign their  Ownership  Interests or ownership  interests in
     the Project  LLC's to Booth Creek free and clear of all liens,  claims and
     encumbrances.  All parties will execute such documents as may be necessary
     to effectuate such purchase and sale.

[c]  If an event or circumstance occurs which is both a Material Manager Breach
     and an East West  Change of  Control,  Booth  Creek may elect  either  the
     remedy set forth in this 13.12 or the Break-Up Remedy.

[d]  If a Material Manager Breach occurs (other than a Funding  Default),  then
     in addition to the other  remedies  specified  in this 13.12,  Booth Creek
     will have the right to recover  its  actual  damages  resulting  from such
     Material  Manager  Breach  (but not  indirect,  consequential  or punitive
     damages  or  lost  profits)  to the  extent  such  actual  damages  exceed
     $1,000,000.  The remedies  provided for in 13.12[a] and this  13.12[d] are
     the sole and exclusive  remedies of Booth Creek with respect to a Material
     Manager Breach that is not a Funding Default.


ARTICLE 14: DISPUTE RESOLUTION

     If a dispute of any kind arises under or in  connection  with,  or relates
to,  this  Agreement   (including  any  dispute  concerning  its  construction,
performance  or breach),  the conduct of the Company's  business,  or any other
matter relating to the Company,  between the Company, the Manager, the Members,
or any  combination  of such parties,  the rights of the parties to the dispute
will be governed by the Arbitration Agreement.  The parties do not intend to be
required to submit to  arbitration  the  resolution  of a Deadlock,  but either
Member may arbitrate the  questions of whether  Deadlock has occurred,  whether
Booth Creek has unreasonably  withheld,  conditioned or delayed its approval of
an action under 6.3, or whether  Booth Creek has failed to act in good faith in
withholding  its approval of an action or decision under 6.4. No other disputes
arising  out of this  Agreement  will  be  subject  to  arbitration  under  the
Arbitration  Agreement.  By executing this  Agreement,  each Member agrees that
such  Member  has  become a party to the  Arbitration  Agreement,  without  the
necessity  of signing the  Arbitration  Agreement as a separate  document.  Any
Transferee (whether or not substituted as a Member) also will become a party to
the  Arbitration  Agreement,  in each case without the necessity of signing the
Arbitration Agreement as a separate document.


ARTICLE 15: GENERAL PROVISIONS

15.1 Amendment.  This Agreement may be amended by the  affirmative  Vote of all
Members or as provided in 6.5, or as provided elsewhere in this Agreement.  Any
amendment will become effective upon such approval,  unless otherwise provided.
Notice of any  proposed  amendment  must be given at least 5 days in advance of
<PAGE>

the meeting at which the amendment  will be considered  (unless the approval is
evidenced by duly signed minutes of action). Any duly adopted amendment to this
Agreement is binding upon,  and inures to the benefit of, each Person who holds
an Ownership  Interest at the time of such  amendment,  without the requirement
that such Person sign the amendment or any republication or restatement of this
Agreement.

15.2 Representations.  Each Member represents and warrants to each other Member
that, as of the signing of this Agreement:

[a]  If such  Member  is an  entity,  such  Member is duly  organized,  validly
     existing and in good standing under the laws of the jurisdiction  where it
     purports to be organized, and is a United States Person; has all requisite
     power to own, lease and operate its assets, properties and business and to
     carry on its business as now conducted,  and is duly qualified or licensed
     to do business as a foreign corporation,  partnership or limited liability
     company and is in good standing in every  jurisdiction in which the nature
     of  its  business  or  the  location  of  its  properties   requires  such
     qualification  or  licensing,  except  for such  jurisdictions  where  the
     failure  to so qualify or be  licensed  would not have a material  adverse
     effect  upon its  ability  to  perform  fully its  obligations  under this
     Agreement or any related agreement.

[b]  Such Member has full power and  authority  to enter into and perform  this
     Agreement  and all other  related  agreements  to be executed by it and to
     perform  fully its  obligations  under  this  Agreement  and such  related
     agreements;

[c]  All actions  necessary  to  authorize  the  signing  and  delivery of this
     Agreement,  and all  other  related  agreements,  and the  performance  of
     obligations under it, have been duly taken;

[d]  This  Agreement  has been duly signed and  delivered by a duly  authorized
     officer  or other  representative  of such  Member  (if such  Member is an
     entity) and  constitutes the legal,  valid and binding  obligation of such
     Member   enforceable  in  accordance   with  its  terms  (except  as  such
     enforceability  may be affected by  applicable  Bankruptcy,  insolvency or
     other similar laws affecting creditors' rights generally,  and except that
     the availability of equitable remedies is subject to judicial discretion);

[e]  No consent or approval of any other Person is required in connection  with
     the signing, delivery and performance of this Agreement by such Member;

[f]  The signing, delivery and performance of this Agreement do not violate [i]
     the  organizational  documents of such Member (in the case of a Member not
     an individual), [ii] in any material respect, any applicable law or order,
     or [iii] any  material  agreement  to which  such  Member is a party or by
     which such Member is bound;

[g]  Such Member has had an  opportunity  to perform any due  diligence  deemed
     necessary or desirable.
<PAGE>

15.3  Unregistered  Interests.  Each Member [a] acknowledges that the Ownership
Interests are being offered and sold without  registration under the Securities
Act of 1933, as amended (the "Securities  Act"), or under similar provisions of
state law,  [b]  acknowledges  that such Member is fully aware of the  economic
risks of an investment in the Company, and that such risks must be borne for an
indefinite  period of time,  [c]  represents  and warrants  that such Member is
acquiring an Ownership Interest for such Member's own account,  for investment,
and with no view to the distribution of the Ownership Interest,  [d] agrees not
to  Transfer,  or to  attempt  to  Transfer,  all or any part of its  Ownership
Interest without registration under the Securities Act and any applicable state
securities  laws,   unless  the  Transfer  is  exempt  from  such  registration
requirements, and [e] represents and warrants that such Member has either alone
or with  its  "purchaser  representatives,"  as that  term is  defined  in Rule
5.01(h) under the  Securities  Act, such  knowledge and experience in financial
and business  matters that it is capable of evaluating  the merits and risks of
its  investments  in the Company.  Each Member  further  acknowledges  that the
Company has made  available to such Member,  at a reasonable  time prior to its
acquisition  of its Economic  Interest,  the  opportunity  to ask questions and
receive answers  concerning the terms and conditions of such acquisition and to
obtain any additional  information  which the Company  possesses or can acquire
without unreasonable effort or expense that is necessary to verify the accuracy
of the information  furnished by the Company and the Manager in connection with
such acquisition.

15.4 Waiver of Dissolution  Rights.  The Members agree that irreparable  damage
would occur if any Member  should bring an action for judicial  dissolution  of
the  Company.  Accordingly,  each  Member  accepts  the  provisions  under this
Agreement as such Person's sole  entitlement  on Dissolution of the Company and
waives and renounces  such Person's right to seek a court decree of dissolution
or to seek the  appointment  by a court of a liquidator  for the Company.  Each
Member  further  waives  and  renounces  any  alternative  rights  which  might
otherwise be provided by law upon the Withdrawal of such Person and accepts the
provisions  under this  Agreement as such  Person's sole  entitlement  upon the
happening of such event.

15.5 Waiver of Partition Right. Each Member waives and renounces any right that
it may have prior to Dissolution  and  Liquidation to institute or maintain any
action for partition with respect to any real property held by the Company.

15.6 Waivers and Consents.  No waiver of any breach of any of the terms of this
Agreement will be effective  unless such waiver is in writing and signed by the
Member against whom such waiver is claimed. No course of dealing will be deemed
to amend or discharge any provision of this Agreement. No delay in the exercise
of any right  will  operate  as a waiver of such  right.  No single or  partial
exercise of any right will preclude its further exercise. A waiver of any right
on any one  occasion  will not be construed as a bar to, or waiver of, any such
right on any other  occasion.  Any  consent  of a Member  required  under  this
Agreement  must be in writing  and signed by such  Member to be  effective.  No
consent  given by a Member  in any one  instance  will be  deemed  to waive the
requirement for such Member's consent in any other or future instance.
<PAGE>

15.7 Equitable  Relief.  If any Member  proposes to Transfer all or any part of
its Ownership Interest in violation of the terms of this Agreement, the Company
or any Member may apply to any court of competent  jurisdiction for a temporary
injunctive order prohibiting such proposed Transfer except upon compliance with
the terms of this Agreement  (with the merits of such claim to be determined by
arbitration under the Arbitration Agreement), and the Company or any Member may
institute and maintain an arbitration  action under the  Arbitration  Agreement
against  the Person  proposing  to make such  Transfer  to compel the  specific
performance  of this  Agreement.  Any  attempted  Transfer in violation of this
Agreement is null and void, and of no force and effect. The Person against whom
such  action or  proceeding  is brought  waives  the claim or  defense  that an
adequate remedy at law exists, and such Person will not urge in any such action
or proceeding the claim or defense that such remedy at law exists.

15.8  Remedies for Breach.  Except for the  requirement  to arbitrate  disputes
provided for in Article 14 and as  otherwise  provided in this  Agreement,  the
rights and  remedies  of the Members  set forth in this  Agreement  are neither
mutually  exclusive  nor  exclusive of any right or remedy  provided by law, in
equity or otherwise,  and all legal remedies (such as monetary damages) as well
as all equitable remedies (such as specific  performance) will be available for
any breach or threatened breach of any provision of this Agreement.

15.9  Costs.  If the Company or any Member  retains  counsel for the purpose of
enforcing or preventing the breach or any threatened breach of any provision of
this  Agreement  or for any other  remedy  relating to it, then the  prevailing
party will be entitled to be reimbursed by the nonprevailing party for all fees
and costs so incurred (including  reasonable attorney's fees, but excluding the
fees and expenses of the arbitration  relating to the  arbitrator,  secretarial
and stenographic or other assistance, rental of space and other direct expenses
(as determined by the arbitrator),  all of which will be paid by the parties in
equal  shares).  The rights of the  prevailing  party to recover  such fees and
costs will be  separate  from,  will  survive  and will not be merged  into any
judgment. The "prevailing party" will mean the party who receives substantially
the  relief  desired,  whether  by  settlement,  dismissal,  summary  judgment,
judgment or otherwise.

15.10  Indemnification.  Each  Member  hereby  indemnifies  and  agrees to hold
harmless the Company and each other Member from any liability,  cost or expense
arising from or related to any act or failure to act of such Member which is in
violation of this Agreement.

15.11 Counterparts.  This Agreement may be signed in multiple  counterparts (or
with  detachable  signature  pages).  Each  counterpart  will be  considered an
original  instrument,  but all of them in the  aggregate  will  constitute  one
agreement.  Telecopies of  signatures  will be given effect for purposes of the
signature page of this Agreement and any amendments to this Agreement.

15.12 Notice. All notices,  consents,  approvals,  waivers, elections and other
communications (collectively "Notices") under this Agreement will be in writing
and will be  either  delivered  or sent  addressed  as  follows:  [a] if to the
Company,  at the  Company's  registered  office in Colorado,  and [b] if to any
<PAGE>

Member,  at such  Person's  home or business  address as then  appearing in the
records of the Company.  In computing  time periods,  the day of Notice will be
excluded.  For  Notice  purposes,  a day means a  calendar  day.  Copies of all
Notices will be sent to Crescent  Development  Management  Corporation at: COPI
Colorado,  L.P., at: 306 West Seventh  Street,  Suite 1000,  Fort Worth,  Texas
76102, facsimile:  (817) 339-2220, or such other address or facsimile number as
it designates by Notice given to the Members and the Company in accordance with
this 15.12.

15.13 Deemed  Notice.  Any Notices given to any Member in accordance  with this
Agreement will be deemed to have been duly given and received:  [a] on the date
of receipt if personally  delivered or if sent by U.S. mail,  postage  prepaid,
[b] the date of receipt,  if sent by registered or certified U.S. mail, postage
prepaid,  [c] one business day after receipt, if sent by confirmed facsimile or
telecopier  transmission,  or [d] one  business day after having been sent by a
nationally recognized overnight courier service with confirmation of delivery.

15.14 Partial Invalidity.  Wherever possible,  each provision of this Agreement
will  be  interpreted  in  such  manner  as to be  effective  and  valid  under
applicable law. However, if for any reason any one or more of the provisions of
this Agreement are held to be invalid, illegal or unenforceable in any respect,
such  action will not affect any other  provision  of this  Agreement.  In such
event,  this  Agreement  will be  construed  as if  such  invalid,  illegal  or
unenforceable provision had never been contained in it.

15.15 Entire Agreement.  This Agreement  (including its Exhibits)  contains the
entire agreement and understanding of the Members concerning its subject matter
and supersedes all prior  agreements,  understandings  and  negotiations,  both
written and oral,  among the Members with respect to the subject matter of this
Agreement.

15.16 Benefit. The contribution obligations of each Member will inure solely to
the benefit of the other  Members and the Company,  without  conferring  on any
other Person any rights of enforcement or other rights.

15.17 Binding Effect. This Agreement is binding upon, and inures to the benefit
of, the Members and their Permitted  Transferees,  but any Transferee will have
only the rights  specified in 13.6 unless  admitted as a  substitute  Member in
accordance with this Agreement.

15.18 Further Assurances. Each Member agrees, without further consideration, to
sign and deliver such deeds, assignments,  endorsements,  evidences of transfer
and other  instruments  and documents  and give such further  assurances as are
consistent  with the  provisions of this Agreement and necessary to perform its
obligations under this Agreement.

15.19  Headings.  Article and section titles have been inserted for convenience
of   reference   only.   They  are  not  intended  to  affect  the  meaning  or
interpretation of this Agreement.

15.20  Terms.  Terms used with initial  capital  letters will have the meanings
specified,  applicable to both  singular and plural forms,  for all purposes of
<PAGE>

this Agreement. All pronouns (and any variation) will be deemed to refer to the
masculine,  feminine or neuter, as the identity of the Person may require.  The
singular or plural includes the other, as the context requires or permits.  The
word include (and any variation) is used in an illustrative sense rather than a
limiting sense. The word day means a calendar day.

15.21  Governing  Law.  This  Agreement  will be governed by, and  construed in
accordance  with,  the  laws of the  State  of  Delaware  (without  considering
Delaware choice of law provisions).  Any conflict or apparent  conflict between
this Agreement and the Act will be resolved in favor of this Agreement,  except
as otherwise required by the Act.

        [remainder of page intentionally left blank, signatures follow]
<PAGE>

All of the Members have signed this Operating  Agreement of Northstar  Holdings
LLC, to be effective from the date first mentioned above,  notwithstanding  the
actual date of signing.

                                    East West Resort  Development  V, L.L.L.P.,
                                    as member and manager, by HF Holding Corp.,
                                    as general partner



[date]                              By:
                                       ------------------------------------
                                       Harry  H.  Frampton,  III, Chairman



                                    Trimont Land Company,
                                    a California corporation



[date]                              By:
                                       ------------------------------------
                                       [name and title]
<PAGE>

                                LIST OF EXHIBITS

           Exhibit A          Names and Addresses of Members

           Exhibit B          Economic Interests

           Exhibit C          Initial Capital Contributions

           Exhibit D          Assignment of Ownership Interest

           Exhibit E          Transferee's Agreement

           Exhibit F          Arbitration Agreement

           Exhibit G          Master Development Plan

           Exhibit H          Description of the Property

           Exhibit I          Master Non-Competition Agreement(term sheet only)

           Exhibit J          Form of Project LLC Operating Agreement

           Exhibit K          Infrastructure Standards

           Exhibit L          Form of Promissory Note

           Exhibit M          Minimum Insurance Requirements

           Exhibit N          Ten Year Option Property

           Exhibit O          Trademark License Agreement

           Exhibit P          Essential Ski Property

           Exhibit Q          Resort Right of First Offer Agreement (term sheet
                              only)

           Exhibit R          Annual Plan

           Exhibit S          Assumed Parcel Values

           Exhibit T          Form of Sub-Managment Agreement

           Exhibit U          Definitions
<PAGE>

                                   EXHIBIT A

                         Names and Addresses of Members


      East West Resort Development V, L.L.L.P.
      Attention: Harry H. Frampton, III
      c/o East West Partners, Inc.
      100 East Thomas Place
      P.O. Drawer 2770
      Avon, Colorado 81620

      Trimont Land Company
      Attention:  Betsy Cole and Chris Ryman
      1000 South Frontage Road
      Suite 100
      Vail, CO 81657
<PAGE>

                                   EXHIBIT B

                               Economic Interests


           Member                                   Initial      Economic
           ------                                   -------      --------
Interests
---------

        East West Resort Development V, L.L.L.P.             75%

        Trimont Land Company                                 25%
<PAGE>

                                   EXHIBIT C

                         Initial Capital Contributions


      Member                            Cash Amount
      ------                            -----------


                                                       As,   when  and  in  the
                                                       manner  contemplated  by
                             As of the date of         the Real Estate Purchase
                             Operating Agreement       Agreement
                             -------------------       ------------------------

East West Resort Development $10,000,000               $5,000,000
V, L.L.L.P

Trimont Land Company         $     1,000                     0
<PAGE>

                                   EXHIBIT D

                        Assignment of Ownership Interest



The undersigned Transferor hereby transfers and assigns a __________% Ownership
Interest rounded to four decimal points) in Northstar Holdings, LLC, a Delaware
limited liability company,  to  ______________________________,  as Transferee.
The Capital  Account of the Transferor  that is attributable to the transferred
Ownership  Interest will carry over to the Transferee.  The Ownership  Interest
transferred  is  subject  to all of the terms and  conditions  of that  certain
Operating  Agreement of Northstar  Holdings,  LLC, dated as of [date],  as such
Agreement may be amended, including the obligation to arbitrate disputes as set
forth in the Operating Agreement and the Arbitration Agreement.

                                    Transferor:


                                    -------------------------------------------
      Date
<PAGE>

                                   EXHIBIT E

                             Transferee's Agreement


As a Transferee of an Ownership Interest in Northstar Holdings, LLC, a Delaware
limited  liability  company  governed  by an  Operating  Agreement  dated as of
[date], the undersigned agrees to be bound as a party to such Agreement (which,
as it may be amended,  is hereby  incorporated  by  reference),  including  the
obligation to arbitrate  disputes as set forth in the  Operating  Agreement and
the Arbitration Agreement.  The Transferee acknowledges and agrees that, unless
admitted  as a Member of the  limited  liability  company as  provided  in such
Agreement,  the Transferee  will have only the limited rights of an assignee as
specified by law.

                                    Name of Transferee:

                                    -------------------------------------------
      Date
                                    Address:
                                            -----------------------------------

                                            -----------------------------------
                                    Taxpayer ID Number:
                                                       ------------------------
                                    Telephone Number:
                                                     --------------------------
                                    Fax Number:
                                               --------------------------------
<PAGE>

                                   EXHIBIT F

                             Arbitration Agreement

     This Arbitration Agreement (this "Agreement") is made as of [date], by and
among  Northstar  Holdings,  LLC, a Delaware  limited  liability  company  (the
"Company"),  and all of the  Members of the  Company  and  Transferees  of such
Members,  as evidenced by their  execution  of the  Operating  Agreement of the
Company dated the same date as this  Agreement or related  transfer  documents.
Each  initial  Member has become a party to this  Agreement by virtue of having
executed the Operating  Agreement,  and each new Member and each  Transferee of
any Member  will become a party to this  Agreement  without  having  executed a
counterpart  of this  Agreement.  This Agreement is an exhibit to the Operating
Agreement  and has been  incorporated  into,  and is a part of,  the  Operating
Agreement.

                                    Recitals


Except as  otherwise  provided,  the parties  desire that any and all  disputes
arising  out of, or  pertaining  in any way to,  the  Operating  Agreement,  be
governed by and settled  pursuant to this Agreement.  Each capitalized term not
otherwise  defined in this  Agreement is intended to have the meaning  given to
such term in the Operating Agreement.


                                   Agreement

     1.  Amicable  Resolution.  The parties  will attempt to settle any dispute
between them  amicably.  To this end, the parties will consult and negotiate to
reach a solution.  If the parties mutually agree,  they may seek to resolve the
dispute  through  mediation.  However,  nothing in this paragraph will preclude
either party from commencing  arbitration at any time,  subject to the terms of
this Agreement.

     2. Obligation to Arbitrate.  Except as otherwise provided in the Operating
Agreement, any dispute, controversy, or claim arising out of or relating in any
way to the Operating Agreement will be settled by binding arbitration conducted
in accordance with this Agreement, but the parties do not intend to be required
to submit to arbitration the resolution of a Deadlock.  However,  either Member
may  arbitrate the  questions of whether  Deadlock has occurred,  whether Booth
Creek has  unreasonably  withheld,  conditioned  or delayed its  approval of an
action  under  Section  6.3,  or whether  Booth Creek has failed to act in good
faith in withholding its approval of an action or decision under Section 6.4 of
the Operating Agreement.

     3. Commencement of Arbitration.

     [a] Notice.  Any party may at any time initiate an  arbitration  under the
Agreement by giving a written notice of arbitration (the "Notice") to the other
<PAGE>

party or parties to the  dispute.  The Notice will  contain a statement  of any
dispute in  sufficient  detail to apprise the other party of [i] the nature and
scope of each  dispute,  [ii] the  initiating  party's  position  and [iii] the
relief  sought.  The other  party  will,  within 30 days  after  receipt of the
Notice,  or within such other period of time as the parties may agree,  deliver
its response to the  initiating  party (the  "Answer"),  which will contain its
statement of the dispute,  its positions and any  counterclaims  that it seeks.
The  initiating  party  will then  have 20 days,  or such  other  period as the
parties may agree,  to deliver its response (the  "Reply") to any  counterclaim
raised in the Answer.  No  amendments  to the  Notice,  Answer or Reply will be
permitted without the consent of the other party or of the arbitrator. Upon the
appointment and acceptance of the arbitrator,  a copy of the Notice, Answer and
Reply will be given to the  arbitrator  promptly  as they become  available.  A
hearing will be commenced within 30 days after completion of discovery,  unless
the arbitrator  grants a continuance upon a showing of good cause by any party.
At least 21 days before the date for such  hearing,  the parties will  exchange
copies of exhibits to be offered as evidence and a list of  witnesses  who will
testify at such hearing.  Once  commenced,  the hearing will proceed day to day
until completed  unless the arbitrator  grants a continuance  upon a showing of
good cause by any party. Any party may cause to be prepared,  at its expense, a
written transcription or electronic recordation of such hearing.

     [b] Selection of an Arbitrator.  There will be one neutral arbitrator. If,
within 20 days after the Notice  provided for in paragraph 3[a], the parties to
the dispute  have been unable to agree upon a mutually  acceptable  arbitrator,
they will request that the Judicial  Arbiter Group,  Inc. appoint an arbitrator
from among its panel of available  arbitrators.  If the Judicial Arbiter Group,
Inc. is unable to appoint an  arbitrator,  any party may  petition the district
court for the City and County of Denver to appoint a single neutral  arbitrator
provided that such arbitrator is a retired state or federal judge with at least
five years experience in civil matters.  The arbitrator may appoint a secretary
to assist the tribunal in the administrative  arrangements for the proceedings.
The arbitrator may also employ such  stenographic  and other  assistance as the
arbitrator deems necessary.

     4.  Failure to  Participate.  If a party,  having  been  given  notice and
opportunity,  fails or refuses to appear or participate in an arbitration or in
any stage of the arbitration, the proceedings will nevertheless be conducted to
conclusion and final award. Any award rendered under such circumstances will be
as valid and enforceable as if both parties had appeared and participated fully
at all stages of the arbitration.

     5. Place of Arbitration.  The place of arbitration will be within the City
and County of Denver,  Colorado,  as  selected  by the  arbitrator,  unless the
parties otherwise mutually agree in writing.

     6.  Confidentiality.   The  parties  and  the  arbitrator  will  treat  as
confidential  all  aspects  of  the  arbitration   proceedings  (including  the
pleadings,  discovery,  testimony,  evidence, briefs and the award), unless the
parties otherwise agree in writing.

     7.  Preliminary  Meeting.  The arbitrator will hold a preliminary  meeting
with the parties,  at a time and place  determined by the  arbitrator,  for the
<PAGE>

discussion  of  procedural  matters  (prior to the issuance of such  procedural
directives by the  arbitrator)  and for discussion of such other matters as the
arbitrator may determine.

     8. Procedures.  The procedures to be followed in any arbitration under the
Transaction  Agreements  will be as  prescribed  in this  Agreement and in such
additional  directives,  consistent with the terms of this Agreement,  that are
issued  by the  arbitrator  following  consultation  with the  parties.  Unless
otherwise agreed by the parties, the procedures will provide for the submission
of briefs by the parties,  the introduction of documents and the oral testimony
of witnesses,  cross-examination of witnesses,  oral arguments,  the closure of
the proceedings and such other matters as the arbitrator may deem  appropriate.
Except as provided  otherwise in this  Agreement,  the arbitrator will regulate
all matters  relating to the conduct of the  arbitration and any other question
of  arbitration  law or  procedure in  accordance  with this  Agreement  and as
otherwise  provided  in  the  Commercial  Arbitration  Rules  of  the  American
Arbitration  Association  (the "Rules") and the Colorado  Arbitration  Act (the
"Act"). If any conflict exists between the provisions of the Rules and the Act,
the provisions of the Act will prevail.

     9. Limitations and Laches. As a preliminary  issue, the arbitrator may, in
response  to a motion to dismiss or a motion for  summary  judgment,  render an
award  determining the merits of such claim before  considering the substantive
merits of the arbitration claim.

     10.   Discovery.   The  parties  agree  that  discovery  will  be  handled
expeditiously,  and  the  arbitrator  will  define  the  limits  of  discovery,
including the number of depositions  that may be taken,  after  considering the
complexity of the issues and the amount in controversy,  but each party will be
entitled to take at least four depositions and the period for discovery will be
at least 90 days from the date such arbitrator is selected  pursuant to 3[b] of
this Agreement.  Discovery procedures available in litigation before the courts
will not apply in an arbitration conducted pursuant to this Agreement. However,
each party will produce  relevant and  non-privileged  documents  (or copies of
such  documents)  as  requested  by the other  party.  All  disputes  regarding
discovery will be promptly resolved by the arbitrator.

     11.  Affidavits.  Each  party  may  submit  evidence  in the form of sworn
affidavits,  but, upon the request of the other party, the party submitting the
affidavit will make the affiant available for cross-examination. If the affiant
is  not  made  available  for  cross-examination,  the  affidavit  will  not be
considered as evidence by the arbitrator  unless the arbitrator  finds that the
affiant  is beyond the  control  of the party  offering  the  affidavit  or the
affiant is unavailable,  and the interests of justice require  consideration of
the evidence submitted by the affiant.

     12. Time of  Proceedings.  It is the intent of the parties  that,  barring
extraordinary  circumstances,  any  arbitration,  including the issuance of the
arbitrator's award, will be concluded within 8 months after the date the Notice
is received by the arbitrator.  The arbitrator will use his or her best efforts
to issue the final award or awards  within a period of 30 days after closure of
the  proceedings  (but failure to do so will not be a basis for challenging the
award).
<PAGE>

     13. Written Opinion. Any award or portion of an award, whether final, will
be in a writing  signed by the arbitrator and will state the reasons upon which
the award or portion of the award is based.

     14. Entry of Judgment. Judgment on the arbitration award may be entered in
any federal or state court having  jurisdiction.  Subject to governing  law and
court rules,  the federal and state courts located in the states where the U.S.
principal  business office of each party is located will have jurisdiction over
an action brought to enforce the rights and  obligations  created in or arising
from this Agreement,  and each party irrevocably submits to the jurisdiction of
such courts.  Notwithstanding the above,  application may be made by a party to
any court of competent  jurisdiction  wherever  situated for enforcement of any
judgment and the entry of whatever orders are necessary for such enforcement.

     15. Governing Law. The arbitrator's  decision will be made pursuant to the
relevant substantive law of the State of Delaware.

     16.  Provisional  Relief.  Any  party  may  apply  to a court  that  would
otherwise  have  jurisdiction  for  preliminary  injunctions  and other similar
provisional or interim measures,  including,  without limitation, where [a] any
Member or Transferee proposes to sell, exchange, assign, pledge, encumber, gift
or otherwise dispose of, whether voluntarily or by operation of law, all or any
part of its interest in the Company in violation of the Operating Agreement, or
[b] any event or  circumstance  arises such that the Company or any party would
be expressly  injured and no adequate remedy at law would exist for such party.
Any  application  to a court for such purposes may include,  but is not limited
to, a request for a temporary injunction  prohibiting such proposed disposition
except on  compliance  with the  Operating  Agreement  and a request  to compel
specific  performance  of the Operating  Agreement.  Any attempted  transfer in
violation of the Operating  Agreement will be null and void and of no force and
effect.  With respect to any  attempted  transfer in violation of the Operating
Agreement,  the party or third party  against whom such action or proceeding is
brought waives the claim or defense that an adequate remedy at law exists,  and
such party or third party  agrees not to urge in any such action or  proceeding
the claim or defense that such remedy at law exists.  The merits of such claims
between  the  parties  that gave rise to the need for such  injunctive  relief,
including any entitlement to permanent injunctive relief, will be determined by
arbitration in accordance  with the provisions of this  Agreement.  The parties
agree  that any  measures  ordered by the  arbitrator  may be  immediately  and
specifically  enforced  by a  court  otherwise  having  jurisdiction  over  the
parties.

     17. Time and Notice.  All notices,  requests,  demands,  claims, and other
communications  under this Agreement will be in writing.  Any notice,  request,
demand,  claim, or other communication under this Agreement will be deemed duly
given  only if it is sent by  registered  or  certified  mail,  return  receipt
requested, postage prepaid, or by courier, telecopy or facsimile (together with
a copy of such writing  concurrently  sent by  registered  or  certified  mail,
return  receipt  requested,  postage  prepaid)  and  addressed  to the intended
recipient  [a] if to a Member other than EWRD V, as set forth in the  Company's
records, and [b] if to EWRD V or the Company, to:
<PAGE>

                                            Copy to:

      Attn: Harry H. Frampton, III          James F. Wood, Esq.
      100 East Thomas Place                 Sherman & Howard L.L.C.
      Beaver Creek Resort                   633 17th Street, Suite 3000
      P.O. Drawer 2770                      Denver, CO 80202
      Avon, CO  81620                       Telecopy: 303-298-0940
      Telecopy:  970-845-7205

Notices  will be deemed  given  three  business  days after  mailing if sent by
certified mail,  when delivered if sent by courier,  and one business day after
receipt of  confirmation  by person or machine if sent by telecopy or facsimile
transmission.  Any party may change the  address  to which  notices,  requests,
demands,  claims  and  other  communications  under  this  Agreement  are to be
delivered  by giving the other  parties  notice in the manner set forth in this
Agreement.  Copies of all notices will be given to COPI Colorado, L.P., at: 306
West Seventh Street,  Suite 1000,  Fort Worth,  Texas 76102,  facsimile:  (817)
339-2220,  or such other address or facsimile number as it designates by Notice
given to the Members and the Company in accordance with this paragraph 17.

     18. Extra Contractual Claims. Extra contractual claims of a party, such as
those arising out of allegations of bad faith or misrepresentation,  are within
the jurisdiction of the arbitrator.  Accordingly,  the arbitrator has the power
to  grant  exemplary,  statutory,  punitive  or  other  damages  in  excess  of
compensatory damages.  However, the initiating party with respect to such extra
contractual claims will have the burden to prove such claims in accordance with
the applicable  standard of proof applied to such claims in civil cases decided
under the laws of the State of Colorado.

     19.  Costs.  All fees and  expenses  of the  arbitration  relating  to the
arbitrator,  secretarial and stenographic or other assistance,  rental of space
and other direct expenses (as determined by the arbitrator) will be paid by the
parties in equal shares.  The arbitrator will notify the parties,  from time to
time, of estimated amounts to be advanced in order to meet all such anticipated
expenses,  and each  party  will  advance  its share  promptly.  Other fees and
expenses of the arbitration (including attorneys' fees, the fees of accounting,
actuarial  or other  experts,  and the cost of bonds) will be paid by the party
incurring  them, but the party  prevailing on  substantially  all of its claims
will be entitled to recover such fees and expenses  from the other party unless
the arbitrator specifically determines otherwise in the interests of fairness.

     20. Expeditious Proceeding.  The parties desire that any arbitration under
this Agreement  proceed  expeditiously  (subject to the needs and procedures of
the  arbitrator).  The parties  instruct the  arbitrator  to impose  reasonable
sanctions to insure that the arbitration  proceeds  expeditiously.  The parties
will make a good-faith  effort to cause no  unnecessary  delays or obstacles to
the arbitration process.
<PAGE>

     21.  Treatment  of Parties as a Group.  For  purposes of  selection  of an
arbitrator under paragraph 3[b] and the payment of costs under paragraph 20, if
any group of Persons elects to have their interests  represented  collectively,
such Persons may also elect to be considered one party.

     22.  Headings.  The  section  headings  contained  in this  Agreement  are
inserted  for  convenience  only and will not affect in any way the  meaning or
interpretation of this Agreement.

     23. Miscellaneous.  This Agreement constitutes the entire understanding of
the parties with respect to the procedures by which any dispute  between any of
them arising under the Transaction  Agreements will be resolved, and may not be
modified  except in a writing signed by all parties.  This Agreement is binding
upon,  and inures to the  benefit  of, the  parties  and upon their  respective
permitted transferees and other successors-in-interest.




                                    Northstar Holdings, LLC

                                    By: East West Resort Development V,
                                        L.L.L.P., its manager

                                    By: HF Holding Corp., its general partner


                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------

[The  signatures of the Members and Transferees are provided by virtue of their
execution of the Operating Agreement or related transfer documents.]
<PAGE>

                                   EXHIBIT G

                            MASTER DEVELOPMENT PLAN
<PAGE>

                                   EXHIBIT H

                          DESCRIPTION OF THE PROPERTY
<PAGE>

                                   EXHIBIT I

                        MASTER NON-COMPETITION AGREEMENT

                                   Term Sheet



Territory: Five county Lake Tahoe region

Scope: All businesses of any sort; any ownership,  direct or indirect,  and any
status as officer, director, manager, consultant, etc.

Parties covered:  Frampton, Ryman, Cole, Booth Creek and Controlled Affiliates,
East  West  and  Controlled  Affiliates,  and,  after  Frampton  ceases  to  be
principally  responsible  for the  management  of East West,  the East West Key
Managers. [NOT any of the Crescent entities,  Gillett, CIBC, or John Hancock or
their respective affiliates,  and not Ryman or Cole once he or she ceases to be
employed by (or retained as a consultant by) Booth Creek,  Gillett,  CIBC, John
Hancock, or any other Controlled Affiliates,  and not any East West Key Manager
once he or she ceases to be employed by (or retained as a  consultant  by) East
West or any of its Controlled Affiliates]

Term:  the later of (a) five years and (b) two years after the date that 90% of
the Units are sold

Duty:  covered  parties may not engage in business in the Territory  during the
Term  unless they first offer it to a new entity to be formed by EWRD V (or its
assignee) and Booth Creek (or its assignee)

Carveout: the noncompete will not apply to (a) South Lake Tahoe Ski Resort, (b)
existing  resort  management  business at Northstar  and South Lake Tahoe,  and
involvement by Booth Creek and its Affiliates in retail businesses  located on,
and  inherently  related to, the ski resort  operations  at Northstar and South
Lake Tahoe (such as ski and snowboard sales, repair, and rental; restaurants in
the resort) (c) any  expansion of the ski  operations of Northstar or the South
Lake Tahoe Ski Resort onto  contiguous  property or (d) any other ski resort in
which Booth Creek acquires an interest,  but the non-compete  will apply to any
ancillary property management, hospitality or brokerage business related to any
such ski resort.

Material terms of new entity:

     o              Delaware  llc
     o              Booth Creek and EWRD V each have a right to a 50% interest;
                    the non-proposing side can elect to participate at a lesser
                    rate  (down  to  20%),  but the  proposing  side  can  then
                    terminate  the  proposal  and not  engage in the  business.
                    Also, if the  nonproposing  side decides to  participate at
                    less than 50% (but at least 20%),  the  proposing  side can
<PAGE>

                    bring in a new party to pick up whatever the  non-proposing
                    side declines, but the proposing side still must retain 50%
                    (or at least  have  control  over the  interest  of the new
                    party).  If the  non-proposing  side is unwilling to put in
                    its pro rata share of  required  capital  for its  interest
                    (i.e.,  at least 20%),  then the proposing  side is free to
                    pursue the business (and the declining  member is not). The
                    amount and type (debt vs equity) of capital  required is to
                    be determined by the  proposing  party in good faith,  with
                    the generally  stated goal of putting in the minimum amount
                    of capital to operate the  business  prudently,  consistent
                    with avoiding the need for owner and  affiliate  guarantees
                    and obtaining  borrowed  funds on  commercially  reasonable
                    terms
     o              As long as  EWRD V  (together  with  any  new  party  whose
                    interest EWRD V controls) has a 50% or greater  interest in
                    the new  entity  and the  pertinent  business  is an EWRD V
                    Business (as defined  below),  then EWRD V or its affiliate
                    has  day-to-day  authority,  with major decision veto power
                    held by Booth  Creek,  similar in  structure  to  Northstar
                    Holdings LLC;  roles are reversed if Booth Creek  (together
                    with any new party whose interest Booth Creek controls) has
                    a 50%  or  greater  interest  in the  new  entity  and  the
                    pertinent  business is a Booth Creek  Business  (as defined
                    below). If the business in neither an EWRD V Business nor a
                    Booth  Creek  Business  (and it is owned  50/50),  then the
                    party who was  primarily  responsible  for  developing  the
                    business plan and proposing that the parties enter into the
                    business will be the party with day-to-day  authority (with
                    major  decision veto power held by the other party).  If it
                    is not clear who was primarily  responsible  for developing
                    the business plan and proposing that the parties enter into
                    the  business,  then the business  will be managed by joint
                    decision.
     o              EWRD V Business  means any  business  primarily  engaged in
                    resort property management, hotel management, travel agency
                    services,  tour  company  services,   internet  access  and
                    services, transportation, mortgage brokerage, real property
                    development,   golf  course   development   and   operation
                    (including associated restaurants and clubs), management of
                    private  clubs  and the  development  of one or  more  golf
                    courses   (and   related   restaurants,   clubs  and  other
                    businesses)  at  Waddle  Ranch  (the  so-called   "Pritzker
                    Parcel"). Booth Creek Business means any business primarily
                    engaged in  restaurant  ownership or  operation  (excluding
                    club and golf course  restaurants),  retail  sales of skis,
                    snowboards   and  related   products,   including  ski  and
                    snowboard  clothing  and  accessories,  ski  and  snowboard
                    repair and rental and _____________________.
     o              Market rate management fee to be paid to manager
     o              Standard of care, indemnification,  replacement of manager,
                    deadlock,  and  dissolution  provisions  to  be  structured
                    substantially the same as Northstar Holdings LLC
     o              Additional  operating  capital,  if needed  (as  reasonably
                    determined  by  either  party in a 50/50  entity  or by the
<PAGE>

                    majority  holder in a  non-50/50  entity),  and  additional
                    equity needed for cash  acquisitions (as determined by both
                    members or the  majority  member,  as the case may be),  is
                    invested on a pro rata basis with "preemptive  rights";  if
                    either side declines to contribute its pro rata share, then
                    dilution occurs based on a fair market value determination
     o              Issuance of ownership  interests and the resultant pro rata
                    dilution  (in the context of  acquisitions  from  unrelated
                    parties)  is within  control  of  manager;  no  "preemptive
                    rights" apply
     o              Approximately  10% of equity in entity to be available  for
                    key employee options
     o              Shotgun  provision  can be  exercised  by either party in a
                    50/50 entity after 5 years, or by a majority holder after 3
                    years, or by a minority  holder after 7 years;  the shotgun
                    operates separately from other entities
<PAGE>

                                   EXHIBIT J

                    FORM OF PROJECT LLC OPERATING AGREEMENT


       [to be attached upon entry into Northstar Holdings, LLC Operating
                                   Agreement]
<PAGE>

                                   EXHIBIT K

                            INFRASTRUCTURE STANDARDS

                                 See Attached.
<PAGE>

                                   EXHIBIT L

                            FORM OF PROMISSORY NOTE


$__________________
_____________, 200__                                     Eagle County, Colorado


     For valuable  consideration,  the receipt of which is  acknowledged by the
undersigned   ("Maker"),    Maker   promises   to   pay   to   the   order   of
___________________ ("Holder") the sum of $________________,  which amount will
bear interest at a rate of 8% per annum from the date of this Promissory  Note.
All principal and accrued  interest will be immediately  due and payable on the
earlier  of:  [a] the date  Maker  or any  transferee  of  Maker,  directly  or
indirectly,  obtains a loan for the  construction of improvements on all or any
portion of the  Conveyance  Property (as defined in the Operating  Agreement of
Northstar  Holdings,  LLC) from Northstar  Holdings,  LLC to Maker, and [b] the
first anniversary of the closing of the conveyance of the Conveyance  Property.
Any principal and accrued interest that is not paid when due will bear interest
at a rate of 13% per annum from the date such amounts are due until paid. Maker
may prepay part or all of this Promissory Note at any time.  Capitalized  terms
not defined herein have the meaning given to them in the Operating Agreement of
Northstar Holdings, LLC.

     Maker agrees to pay all reasonable  attorneys'  fees and costs incurred by
Holder in connection  with the  enforcement of this Promissory Note (whether or
not suit is commenced).

     This  Promissory  Note  will  be  governed  by the  laws of the  State  of
Delaware.

     The address of Maker for  purposes of the giving of notice will be Trimont
Land Company,  1000 South  Frontage  Road,  Suite 100,  Vail,  Colorado  81657,
attention:  Betsy Cole and Chris  Ryman,  until Maker gives  written  notice to
Holder  that a  different  address  should be used.  The  address of Holder for
purposes of making  payments due under this  Promissory  Note and the giving of
notices  will be East  West  Resort  Development  V,  L.L.L.P.,  c/o East  West
Partners,  Inc., 100 East Thomas Place, P.O. Drawer 2770, Avon, Colorado 81620,
attention: Harry H. Frampton, III, until Holder gives Maker written notice that
a different address should be used.


                          [Name of Maker]

                           By:
                              -------------------------------------------------
                           Title:
                                 ----------------------------------------------
<PAGE>


                                   EXHIBIT M

                         MINIMUM INSURANCE REQUIREMENTS


With respect to the Land,  Comprehensive General Liability Insurance for Bodily
Injury and Property  Damage with limits no lower than $1,000,000 per occurrence
and $2,000,000 in the aggregate.

With respect to vertical construction (condominiums, townhomes, etc.), property
insurance  written on a builder's risk policy form in the amount of the initial
contract  sum  including,  but not limited to,  coverage  against the perils of
fire,  extended  coverage,  theft,  vandalism,  malicious  mischief,  collapse,
windstorm,  falsework,  testing  and  startup,  temporary  building  and debris
removal, including demolition.
<PAGE>

                                   EXHIBIT N

                            TEN YEAR OPTION PROPERTY
<PAGE>

                                   EXHIBIT O

                          TRADEMARK LICENSE AGREEMENT
<PAGE>

                                   EXHIBIT P

                             ESSENTIAL SKI PROPERTY
<PAGE>

                                   EXHIBIT Q

                     RESORT RIGHT OF FIRST OFFER AGREEMENT

                                  (term sheet)

1.   If Booth Creek (or any Affiliate of Booth Creek) elects to sell all or any
     part  of the  Resort,  or any  interest  in the  Resort,  EWRD V (and  its
     assignees)  will  have,  for a period of 90 days  following  receipt  of a
     notice from Booth  Creek which  states the price at which it is willing to
     sell, a right of first offer to purchase the Resort at the price specified
     by Booth Creek in such notice.

2.   If EWRD V does not timely  exercise  its option to purchase the Resort (or
     interest in the  Resort),  Booth Creek will be free to sell the Resort (or
     interest in the Resort) to any third party, but if the price to be paid by
     the third  party is less than 95% of the  price at which  the  Resort  was
     offered  to EWRD V,  Booth  Creek  must once  again  offer EWRD V (and its
     assignees) the right to purchase the Resort (or interest in the resort).
<PAGE>

                                   EXHIBIT R

                                  ANNUAL PLAN
<PAGE>

                                   EXHIBIT S

                             ASSUMED PARCEL VALUES


Parcel                          Assumed Value
------                          -------------
<PAGE>

                                   EXHIBIT T

                        FORM OF SUB-MANAGEMENT AGREEMENT


                            SUB-MANAGEMENT AGREEMENT


     This agreement  (this  Agreement")  is dated as of [date],  and is between
Prototype,  LLC, a Delaware limited liability  company (the "Project  Entity"),
and East West Partners, Inc., a Colorado corporation (the "Sub-Manager").


                                    RECITALS

     The Project Entity was formed for the purpose  contemplated in the Project
Entity's  Operating  Agreement dated as of [date] (the "Operating  Agreement").
Northstar  Holdings,  LLC, a Delaware  limited  liability  company (the "Master
LLC") is the  "manager"  of the  Project  Entity as  contemplated  by  Delaware
limited liability  company law; however,  the Project Entity desires to appoint
the  Sub-Manager as a sub-manager  to oversee the day-to-day  operations of the
Project Entity pursuant to this Agreement.  Each  capitalized term used but not
defined in this  Agreement  has the  meaning  assigned  to it in the  Operating
Agreement.

                                   AGREEMENT

     16 Sub-Manager Powers.  Subject to the fiduciary  obligations imposed upon
it by law, and except as provided in this Agreement,  the Sub-Manager will have
complete  and  unrestricted   power  and  authority  to  manage  the  business,
properties  and  day-to-day  activities  of the Project  Entity in its sole and
exclusive  discretion,  except as  otherwise  directed in writing by the Master
LLC.

     17 Specific  Powers.  The  Sub-Manager  has the following  specific powers
(except as  otherwise  expressly  provided in this  Agreement),  any and all of
which may be exercised by the Sub-Manager  without obtaining the consent of the
Master LLC or any of the Members but all of which must be exercised, consistent
with the  standard of care  articulated  in Section 4, in a manner to cause the
Project  Entity to comply in all material  respects  with the Project  Entity's
(x) Operating Agreement and (y) Annual Plan, as such Annual Plan may be amended
from time to time:

     17.1 To sell,  exchange or otherwise  dispose of any part of the assets of
          the Project Entity in the ordinary course of business;

     17.2 To operate and manage,  at the  expense of the  Project  Entity,  any
          property or business acquired by or on behalf of the Project Entity;
<PAGE>

     17.3 To make all payments  required of the Project Entity pursuant to this
          Agreement,  including  all direct  and  indirect  costs and  expenses
          incurred in the conduct of Project Entity business;

     17.4 To establish  reasonable  reserves for the Project  Entity's  working
          capital, operating expenses, capital improvements and debt service;

     17.5 To execute on behalf of the Project  Entity any and all  documents or
          instruments of any kind which the Sub-Manager may deem appropriate in
          carrying out the purposes of the Project Entity,  except with respect
          to the borrowing of money if the  aggregate of the principal  amounts
          borrowed by the Project Entity exceeds $50,000;

     17.6 Unless the aggregate of the principal amounts borrowed by the Project
          Entity  exceeds  $50,000,  to borrow  money on behalf of the  Project
          Entity from banks, other lending  institutions or other sources or to
          otherwise  incur debt for capital  expenditures,  for  acquisition of
          real property,  and for other Project Entity purposes,  and to secure
          or provide for the repayment of such borrowing;

     17.7 To  purchase  or lease on  behalf  of the  Project  Entity  property,
          including real property, for Project Entity use;

     17.8 To  purchase,  at the expense of the Project  Entity,  liability  and
          other  insurance  to protect  the  Project  Entity's  properties  and
          business;

     17.9 To hold Project  Entity  properties in the name of the Project Entity
          or the name of a nominee chosen by the Sub-Manager;

     17.10To maintain,  at the expense of the Project Entity,  adequate records
          of all operations of the Project Entity;

     17.11To make and revoke tax elections on behalf of the Project Entity;

     17.12To select and  employ,  at the expense of the  Project  Entity,  such
          legal counsel,  certified public  accountants or other consultants as
          are  deemed by the  Sub-Manager  to be  appropriate  for any  Project
          Entity purpose;

     17.13To enter into contracts and other transactions for any Project Entity
          purpose, except as otherwise prohibited by this Agreement;
<PAGE>

     17.14To  engage  in  other  activity  on  behalf  of  the  Project  Entity
          customary  or  incident  to the  acquisition,  ownership,  operation,
          development, management and disposition of real property; and

     17.15 To request Emergency Loans as provided in the Operating Agreement.

     18   Reimbursement  of  Costs.  The  Project  Entity  will  reimburse  the
Sub-Manager and any Affiliate of the Sub-Manager for all direct,  out-of-pocket
costs and expenses  incurred on behalf of the Project  Entity and in connection
with Project Entity affairs.  Reimbursable costs include  architectural,  legal
and survey fees (and other direct out-of-pocket expenses) incurred with respect
to the  acquisition  and  development  of the property  acquired by the Project
Entity,  but  do  not  include  general  and  administrative  expenses  of  the
Sub-Manager.

     19  Standard  of  Care.  The  parties  intend  that the  standard  of care
applicable  to  the  Sub-Manager  in  performing  its  obligations  under  this
Agreement will be to act with the reasonable  belief that such action is in the
best interests of the Company.  In addition to the foregoing,  the  Sub-Manager
will use reasonable  efforts to perform its duties in all material  respects in
conformity with the Project  Entity's  Approved  Project Plan (as amended by an
Approved Annual Business Plan or otherwise). The Sub-Manager will not be liable
to the  Project  Entity or the Members  for any act or  omission  performed  or
omitted by it in accordance with the foregoing standard of care.

     20  Indemnification.  The Project  Entity will indemnify and hold harmless
the  Sub-Manager  and each of its  present and future  shareholders,  officers,
directors,  employees and agents from any loss, liability or damage incurred or
suffered by the  Sub-Manager  or any such Person by reason of any act performed
or omitted to be performed,  or alleged to have been  performed or omitted,  by
the  Sub-Manager  or any such  Person in  connection  with the  business of the
Sub-Manager  (including  any  judgment,  award,  settlement,  costs  and  other
expenses,  and  reasonable  attorneys'  fees  incurred in  connection  with the
defense of any actual or  threatened  claim or action  based on any such act or
omission).  However, if the action or omission to act of the Sub-Manager or any
such Person caused the loss,  liability,  or damage incurred or suffered,  then
neither the  Sub-Manager  nor any such Person may  receive  indemnification  or
avoid  liability  by reason of this  provision  with respect to any claim as to
which the Sub-Manager or any such Person is found by a final  arbitration award
to have  acted  contrary  to  Section 2 or  contrary  to the  standard  of care
described in Section 4, and similarly  neither the  Sub-Manager nor such Person
may receive  indemnification  to the extent that the loss,  liability or damage
incurred or suffered is found by a final  arbitration award to have been caused
by the breach of this Agreement by Sub-Manager.  Any such  indemnification will
only be paid from the assets of the  Project  Entity and will be made  promptly
following the fixing of the loss,  liability or damage  incurred or suffered by
final arbitration award, court order, settlement agreement or otherwise (except
that any attorneys' fees and the expenses of defense may be paid as incurred).
<PAGE>

     21  Management  Fee.  In  consideration  for  the  Sub-Manager's  services
pursuant to this  Agreement,  the Project  Entity  will pay the  Sub-Manager  a
management  fee in accordance  with Section 6.11 of the Operating  Agreement of
the Master LLC.

     22 Termination.

     22.1 The Project  Entity may  terminate  the  services of the  Sub-Manager
          under this  Agreement  upon the  occurrence of any of the grounds for
          termination  set forth in Section 6.6 of the  Operating  Agreement of
          the Master LLC or for Cause.  "Cause" means a final arbitration award
          finding (i) fraud, bad faith,  willful misconduct or gross negligence
          by the  Sub-Manager  in the  performance  of its  duties  under  this
          Agreement,  which action  results in a material  loss or detriment to
          the Project Entity; (ii) a failure to perform under this Agreement in
          accordance  with  Section  2 or the  standard  of care  described  in
          Section 4, which action in either case results in a material  loss or
          detriment  to the  Project  Entity;  (iii) a material  breach of this
          Agreement by  Sub-Manager,  which breach remains uncured for a period
          of 30 days after the Master  Partnership gives the Sub-Manager notice
          of such breach;  provided,  however,  that if the breach is of such a
          nature that it cannot  reasonably be cured within such 30-day period,
          but if it is curable and the Sub-Manager in good faith begins efforts
          to cure it within  such 30-day  period (and proof of such  efforts is
          demonstrated  to the Project  Entity) and continues  diligently to do
          so, it shall have a reasonable  (as  determined by the Project Entity
          in good faith)  additional period thereafter to effect the cure; (iv)
          Harry H. Frampton,  III ("Frampton") ceases to be "Actively Involved"
          (as defined in the limited partnership  agreement of East West Resort
          Development  V,  L.L.L.P.,   a  Delaware  limited  liability  limited
          partnership ("EWRD V") (the manager of the Master LLC)) in the Master
          LLC, EWRD V or in the general partner of EWRD V, other than by reason
          of an  Incapacity of Frampton (as such term is defined in the limited
          partnership   agreement  of  EWRD  V),  except  that  no  such  final
          arbitration  award shall be required if it is manifest  that Frampton
          is no longer Actively Involved (other than by reason of an Incapacity
          of  Frampton);  or (v)  Frampton  or the  general  partner  of EWRD V
          breaches  the  provisions  of Section 8.8 of the limited  partnership
          agreement of EWRD V.

     22.2 The  Sub-Manager  may terminate  this Agreement upon 30 days' written
          notice;  such notice may not be given  earlier than the date that the
          Project  Entity has been  dissolved,  its business has been wound up,
          and articles of  dissolution  for the Project  Entity have been filed
          with the Colorado Secretary of State.

     22.3 In the event of  termination  of this  Agreement,  the Project Entity
          will pay the  Sub-Manager  all amounts due under this Agreement as of
          the date the  termination  is  effective.  The  requirements  of this
          Section will be subject to the resolution of any disputes between the
          parties regarding payments, as provided in Section 9.
<PAGE>

     23 Covenants of the  Sub-Manager.  The Sub-Manager  will devote such time,
effort and attention as may be reasonably  necessary,  advisable or appropriate
to manage  and direct  the  operations,  business  and  affairs of the  Project
Entity.

     24  Arbitration.  If a dispute of any kind arises  under or in  connection
with,  or relates to, this  Agreement  (including  any dispute  concerning  its
construction,  performance  or breach) the rights of the parties to the dispute
will be governed  by the  Arbitration  Agreement  which is attached to and is a
part of the Operating Agreement of the Project Entity.

     25 Power of Attorney. Upon request by the Sub-Manager,  the Project Entity
will provide  designated  principals of the Sub-Manager with powers of attorney
or other documents of authority as may be required by any entity with which the
Sub-Manager does business on behalf of the Project Entity, sufficient to permit
the  Sub-Manager  to carry out its  duties  under  this  Agreement.

     26 General Provisions.

     26.1 Modification and Waiver.

               (1) No modification,  variation,  or amendment to this Agreement
          will be effective unless embodied in a writing signed by the parties.

               (2) No course of  dealing  will be deemed to amend or  discharge
          any  provision  of this  Agreement.  No delay in the  exercise of any
          right will  operate as a waiver of such  right.  No single or partial
          exercise of any right will preclude its further exercise. A waiver of
          any right on any one  occasion  will not be construed as a bar to, or
          waiver of, any such right on any other occasion.

     26.2 Remedies  for  Breach.  Subject  to  the  terms  of  the  Arbitration
          Agreement,  the rights and  remedies of the parties set forth in this
          Agreement are neither  mutually  exclusive nor exclusive of any right
          or remedy  provided  by law, in equity or  otherwise.  Subject to the
          terms of the Arbitration Agreement,  the parties agree that all legal
          remedies (such as monetary damages) as well as all equitable remedies
          (such as specific  performance)  will be available  for any breach or
          threatened breach of any provision of this Agreement.

     26.3 Costs.  If either party retains  counsel for the purpose of enforcing
          or preventing the breach or any threatened breach of any provision of
          this  Agreement  or for any other  remedy  relating  to it,  then the
          prevailing   party  will  be  entitled  to  be   reimbursed   by  the
          nonprevailing party for all costs and expenses so incurred (including
          reasonable attorney's fees, costs of bonds, and fees and expenses for
          expert witnesses).
<PAGE>

     26.4 Counterparts.  This Agreement may be signed in multiple  counterparts
          (or  with  detachable  signature  pages).  Each  counterpart  will be
          considered an original  instrument,  but all of them in the aggregate
          will constitute one agreement.

     26.5 Notices. All notices under this Agreement will be in writing and will
          be either delivered or sent addressed as follows:

          If to the Project Entity at:

                     Attention:  Harry H. Frampton, III
                     c/o East West Partners, Inc.
                     100 East Thomas Place
                     P.O. Drawer 2770
                     Avon, Colorado  81620

           With a copy to:

                     Attention:  James F. Wood, Esq.
                     Sherman & Howard L.L.C.
                     Suite 3000
                     633 - 17th Street
                     Denver, Colorado  80202

           If to the Sub-Manager at:

                     Attention:  Harry H. Frampton, III
                     c/o East West Partners, Inc.
                     100 East Thomas Place
                     P.O. Drawer 2770
                     Avon, Colorado  81620

           With a copy to:

                     Attention:  James F. Wood, Esq.
                     Sherman & Howard L.L.C.
                     Suite 3000
                     633 - 17th Street
                     Denver, Colorado  80202

          or to such other  address as from time to time  supplied by any party
          to the other by notice as required by this  Agreement.  In  computing
          time  periods,  the  day of  notice  will  be  included.  For  notice
          purposes, a day means a calendar day.
<PAGE>

     26.6 Deemed Notice. Any notices given to any party in accordance with this
          Agreement will be deemed to have been duly given:  [i] on the date of
          receipt if personally  delivered,  [ii] five days after being sent by
          U.S. mail,  postage  prepaid,  [iii] the date of receipt,  if sent by
          registered or certified U.S. mail, postage prepaid, [iv] one business
          day after  receipt,  if sent by  confirmed  facsimile  or  telecopier
          transmission,  or [v] one  business  day after  having been sent by a
          nationally recognized overnight courier service.

     26.7 Partial  Invalidity.   Wherever  possible,  each  provision  of  this
          Agreement  will be  interpreted in such manner as to be effective and
          valid under  applicable  law.  However,  if for any reason any one or
          more of the  provisions  of this  Agreement  are held to be  invalid,
          illegal or unenforceable in any respect,  such action will not affect
          any other provision of this Agreement.  In such event, this Agreement
          will  be  construed  as if such  invalid,  illegal  or  unenforceable
          provision had never been contained in it.

     26.8 Entire  Agreement.  This Agreement  contains the entire agreement and
          understanding of the parties concerning its subject matter.

     26.9 Benefit. The contribution obligations of each party will inure solely
          to the benefit of the other party,  without  conferring  on any other
          Person any rights of enforcement or other rights.

     26.10Binding  Effect.  This  Agreement is binding upon,  and inures to the
          benefit of, the parties, their successors and assigns.

     26.11Further Assurances. Each party agrees, without further consideration,
          to sign and deliver such other documents of further  assurance as may
          reasonably  be  necessary  to  effectuate   the  provisions  of  this
          Agreement.

     26.12Headings.   Article  and  Section   titles  have  been  inserted  for
          convenience  of reference  only.  They are not intended to affect the
          meaning or interpretation of this Agreement.

     26.13Terms. Terms used with initial capital letters will have the meanings
          specified,  applicable  to both  singular and plural  forms,  for all
          purposes of this Agreement.  All pronouns (and any variation) will be
          deemed to refer to the masculine, feminine or neuter, as the identity
          of the Person may require. The singular or plural includes the other,
          as the  context  requires  or  permits.  The  word  include  (and any
          variation)  is used in an  illustrative  sense rather than a limiting
          sense. The word day means a calendar day.

     26.14Governing  Law. This  Agreement will be governed by, and construed in
          accordance  with,  the  laws  of  the  State  of  Colorado   (without
<PAGE>

          considering  Colorado  choice of law  provisions).  Any  conflict  or
          apparent conflict between this Agreement and the Act will be resolved
          in favor of this Agreement, except as otherwise required by the Act.

     26.15Interest  on Past Due  Amounts.  Any  amounts not paid when due under
          this Agreement will bear interest until such amounts are paid, at the
          floating  rate of four  percent  per  annum  above the  "prime  rate"
          published  from time to time by The Wall  Street  Journal,  or at the
          maximum rate permitted by law, whichever is lower.

     26.16Attorneys Fees and Costs. Either party will be entitled to reasonable
          attorneys  fees and costs from the other party incurred in connection
          with  the  enforcement  of any of its  rights  under  this  Agreement
          against such other party.

     The parties have caused this Sub-Management Agreement to be executed as of
the date set forth above.

                    EAST WEST PARTNERS, INC.


                    By
                      ---------------------------------------------------------
                       Harry H. Frampton, III, President


                    Prototype, LLC
                    By: Northstar Holdings, LLC., its manager
                    By: East West Resort  Development V, L.L.L.P., its manager
                    By: HF Holding Corp., its general partner


                    By
                      ---------------------------------------------------------
                       Harry H. Frampton, III, President
<PAGE>

                                   EXHIBIT U

                                  DEFINITIONS


Act:                                    the Delaware Limited  Liability Company
                                        Act, as amended from time to time.

Additional                              Contribution:  a  Capital  Contribution
                                        (other than the  Initial  Contribution)
                                        that a Member makes to the Company.

Additional Contribution for
Capital Commitment:                     any Additional  Contribution  by EWRD V
                                        other than an  Additional  Contribution
                                        for Excess Capital.

Additional Contribution for
Excess Capital:                         an  Additional   Contribution   by  any
                                        Member pursuant to 3.2.

Adjusted Capital Account:               with respect to any Member, the Capital
                                        Account of that Member increased by [i]
                                        the Member's  share of Company  Minimum
                                        Gain and Member  Minimum  Gain and [ii]
                                        any amount such Member is  obligated to
                                        restore to the Company upon liquidation
                                        of  such   Member's   interest  in  the
                                        Company   (or   which  is  so   treated
                                        pursuant    to    Regulation    Section
                                        1.704-1(b)(2)(ii)(c)), and decreased by
                                        the  items   described  in   Regulation
                                        Section  1.704-1(b)(2)(ii)(d)(4),   (5)
                                        and (6).

Adjusted Capital Contribution
Amount for Capital Commitment:          as of any  Computation  Date, an amount
                                        equal to [i] the  aggregate  Additional
                                        Contributions  for  Capital  Commitment
                                        made  by  EWRD  V on or  prior  to  the
                                        computation   Date,   less   [ii]   all
                                        Distributions  made  to  EWRD  V on  or
                                        prior to the Computation  Date pursuant
                                        to 12.2[f] and 5.1[g] or deemed made to
                                        EWRD V on or prior  to the  Computation
                                        Date pursuant to 5.1[g] pursuant to the
                                        second sentence of 5.2.

Adjusted Capital Contribution
Amount for Excess Capital:              as of any Computation Date with respect
                                        to any Member, an
<PAGE>

                                        amount  equal  to  [i]  the   aggregate
                                        Additional   Contributions  for  Excess
                                        Capital made by such Member on or prior
                                        to the Computation  Date, less [ii] all
                                        Distributions made to such Member on or
                                        prior to the Computation  Date pursuant
                                        to 12.2[d] and 5.1[d] or deemed made to
                                        that   Member   on  or   prior  to  the
                                        Computation  Date  pursuant  to  5.1[d]
                                        pursuant to the second sentence of 5.2.

Adjusted Capital Contribution
Amount for Land:                        as of any  Computation  Date, an amount
                                        equal  to  [i]  the  aggregate  Capital
                                        Contributions  made by EWRD V used  for
                                        Land   Costs   on  or   prior   to  the
                                        Computation   Date,   less   [ii]   all
                                        Distributions  made  to  EWRD  V on  or
                                        prior to the Computation  Date pursuant
                                        to 12.2[f] and 5.1[h] or deemed made to
                                        EWRD V on or prior  to the  Computation
                                        Date pursuant to 5.1[h] pursuant to the
                                        second sentence of 5.2.

Adjusted Unpaid Preferred
Return Amount for Capital Commitment:   as of any  Computation  Date, an amount
                                        equal  to  [i]  the  Unpaid   Preferred
                                        Return for Capital Commitment as of the
                                        last day of the  immediately  preceding
                                        Fiscal    Year,     less    [ii]    all
                                        Distributions  made  to  EWRD  V on  or
                                        prior to the Computation  Date pursuant
                                        to 12.2[g] and 5.1[e] or deemed made to
                                        EWRD V on or prior  to the  Computation
                                        Date pursuant to 5.1[e] pursuant to the
                                        second  sentence  of  5.2,  during  the
                                        Fiscal    Year    within    which   the
                                        Computation Date occurs.

Adjusted Unpaid Preferred
Return Amount for Excess Capital:       as of the Computation Date with respect
                                        to any Member,  an amount  equal to [i]
                                        such Member's Unpaid  Preferred  Return
                                        for  Excess  Capital as of the last day
                                        of  the  immediately  preceding  Fiscal
                                        Year, less [ii] all Distributions  made
                                        to  that  Member  on or  prior  to  the
                                        Computation  Date  pursuant  to 12.2[e]
                                        and  5.1[c]  or  deemed  made  to  that
                                        Member  on or prior to the  Computation
                                        Date pursuant to 5.1[c] pursuant to the
                                        second   sentence  of  5.2  during  the
                                        Fiscal    Year    within    which   the
                                        Computation Date occurs.

Adjusted Unpaid Preferred
<PAGE>

Return Amount for Land:                 as of any  Computation  Date, an amount
                                        equal  to  [i]  the  Unpaid   Preferred
                                        Return  for  Land as of the last day of
                                        the immediately  preceding Fiscal Year,
                                        less  [ii]  all  Distributions  made to
                                        EWRD V on or prior  to the  Computation
                                        Date  pursuant to 12.2[h] and 5.1[c] or
                                        deemed  made to EWRD V on or  prior  to
                                        the Computation Date pursuant to 5.1[c]
                                        pursuant to the second  sentence of 5.2
                                        during the Fiscal year within which the
                                        Computation Date occurs.

Admission Notice:                       the  meaning  given to such term in 3.2
                                        [b].

Affiliate:                              with respect to any Person,  any Person
                                        that directly or  indirectly  controls,
                                        is  controlled  by, or is under  common
                                        control  with such  Person,  including,
                                        without  limitation,  any  Person  that
                                        directly or indirectly  owns,  controls
                                        or holds with power to vote 10% or more
                                        of the outstanding voting securities or
                                        other  voting  ownership  interests  of
                                        such Person;  any Person 10% or more of
                                        whose outstanding  voting securities or
                                        other voting  ownership  interests  are
                                        directly    or    indirectly     owned,
                                        controlled  or held with  power to vote
                                        by  such  Person;  any  partnership  in
                                        which the specified Person is a general
                                        partner; any officer or director of the
                                        specified Person; any limited liability
                                        company in which the  specified  Person
                                        is a  manager;  and any entity of which
                                        such  Person is an  executive  officer,
                                        director,  general partner,  or manager
                                        and any family  member of the specified
                                        Person.

Aggregate Account Balance:              the meaning given to such term in 5.6.

Agreement:                              this Operating Agreement, also known as
                                        a limited  liability  company agreement
                                        under the Act, as amended  from time to
                                        time.

Ancillary Property:                     one  or  more  small  (relative  to the
                                        Property)   parcels  of  real  property
                                        which are  contiguous  to the  Property
                                        (or the Ten Year  Option  Property,  if
                                        acquired by the Company), are necessary
                                        or desirable for the development of the
                                        Property   (or  the  Ten  Year   Option
                                        Property,  if acquired by the  Company)
                                        in    accordance    with   the   Master
                                        Development Plan, and which Booth
<PAGE>

                                        Creek  reasonably  determines  are  not
                                        necessary   or   advisable    for   the
                                        Operation of the Resort.

Annual Plan:                            means the annual  business plan for the
                                        Company,  including  a forecast  of the
                                        financial operations of the Company and
                                        the  Projects,  prepared by the Manager
                                        in accordance with 6.11 and approved by
                                        the Members  pursuant  to 6.11,  as the
                                        same may be  amended  from time to time
                                        by the Manager with the approval of the
                                        Members.  The Annual Plan will  include
                                        (as  applicable)  an  annual  operating
                                        budget, working capital budget, capital
                                        budget  and  a  marketing  budget,  all
                                        relating  to  the   operation   of  the
                                        Company     and    the     development,
                                        construction, marketing and sale of the
                                        Projects,  on a  month-by-month  basis.
                                        Such annual budget,  as the same may be
                                        amended  from  time  to  time,  will be
                                        prepared in accordance with GAAP by the
                                        Manager  and  approved  by the  Members
                                        pursuant to 6.11.

Arbitration Agreement:                  that  certain   Arbitration   Agreement
                                        entered  into  between  the Company and
                                        each  Member,  in the form set forth in
                                        Exhibit  F, as it may be  amended  from
                                        time to time.

Assumed Parcel Value:                   with  respect  each  Parcel  listed  on
                                        Exhibit  S, the  assumed  value of such
                                        Parcel as reflected on Exhibit S.

Bankruptcy:                             A Person will be deemed bankrupt if:

                                        [a] any proceeding is commenced against
                                        such Person as "debtor"  for any relief
                                        under bankruptcy or insolvency laws, or
                                        laws relating to the relief of debtors,
                                        reorganizations,          arrangements,
                                        compositions,  or  extensions  and such
                                        proceeding  is not  dismissed or stayed
                                        within one  hundred  twenty  (120) days
                                        after such proceeding has commenced, or

                                        [b]   such   Person    commences    any
                                        proceeding for relief under  bankruptcy
                                        or insolvency  laws or laws relating to
                                        the relief of debtors, reorganizations,
                                        arrangements,      compositions,     or
                                        extensions.
<PAGE>

Book Value:                             with respect to any asset,  the asset's
                                        adjusted  basis for federal  income tax
                                        purposes, except as follows:

                                        [a] the initial Book Value of any asset
                                        contributed   (or  deemed   contributed
                                        under section  1.708-1(b)(1)(iv) of the
                                        Regulations) by a Member to the Company
                                        will be the asset's  Fair Market  Value
                                        at the time of the contribution;

                                        [b]  the  Book  Value  of  all  Company
                                        assets  will be adjusted to equal their
                                        respective   Fair  Market   Values  (as
                                        determined by the Members):  [i] if the
                                        Members   determine  an  adjustment  is
                                        necessary or appropriate to reflect the
                                        relative  economic   interests  of  the
                                        Members  in the  Company  as of [A] the
                                        acquisition  of an additional  interest
                                        in the  Company by any new or  existing
                                        Member in  exchange  for more than a de
                                        minimis  capital  contribution,  or [B]
                                        the  distribution  by the  Company to a
                                        Member of more than a de minimis amount
                                        of Company  property  as  consideration
                                        for an  interest  in the  Company;  and
                                        [ii]  as  of  the  liquidation  of  the
                                        Company    within   the    meaning   of
                                        Regulations                     section
                                        1.704-1(b)(2)(ii)(g);

                                        [c] the Book Value of any Company asset
                                        distributed  to any Member  will be the
                                        Fair  Market  Value of the asset on the
                                        date of distribution; and

                                        [d] the Book  Values of Company  assets
                                        will  be  increased  or  decreased,  as
                                        determined  by the Members,  to reflect
                                        any adjustment to the adjusted basis of
                                        the assets under Code  Sections  734(b)
                                        or 743(b),  but only to the extent that
                                        the adjustment is taken into account in
                                        determining   Capital   Accounts  under
                                        Regulations  section  1.704-1(b)(2)(iv)
                                        (m).

                                        After  the Book  Value of any asset has
                                        been adjusted under clause [a],  clause
                                        [b] or clause  [d]  above,  Book  Value
                                        will be  adjusted  by the  Depreciation
                                        taken into  account with respect to the
                                        asset for  purposes  of  computing  Net
                                        Income and Net Loss.

Booth Creek:                            the  meaning  given to such term in the
                                        preamble.
<PAGE>

Booth Creek Change of Control:          any  event or  circumstance  such  that
                                        either [a] the Resort and the Ownership
                                        Interest  of Booth Creek in the Company
                                        are not  owned  and  controlled  by the
                                        same  Person  or by  Affiliates  of the
                                        same Person  (except that, for purposes
                                        of this  definition,  the  reference to
                                        10% in the  definition  of Affiliate is
                                        changed to 51%,  unless  Chris Ryman or
                                        Betsy Cole is actively  involved in the
                                        operations  of  such  Affiliate  or has
                                        substantial  day-to-day decision making
                                        authority  in the  operations  of  such
                                        Affiliate, in which case, the reference
                                        to 10% is not  changed to 51%),  or [b]
                                        both of  Chris  Ryman  and  Betsy  Cole
                                        cease to be  actively  involved  in the
                                        operations  of Booth  Creek or cease to
                                        have  substantial  day-to-day  decision
                                        making  authority in the  operations of
                                        Booth Creek,  except that if both cease
                                        to be so actively  involved or cease to
                                        have such  authority by reason of being
                                        employed  by  EWRD  V  or  any  of  its
                                        Affiliates,  then no Booth Creek Change
                                        of  Control  will  be  deemed  to  have
                                        occurred under [b].

Booth Creek Change of Control Remedy:   the meaning given to such term in 13.11.

Booth Creek Return:                     the  meaning given to such term in 5.6.

Borrowing:                              the  borrowing  of money by the Company
                                        or the issuance of promissory  notes or
                                        other evidence of  indebtedness  by the
                                        Company   in   connection    with   the
                                        borrowing of money.

Break-Up Remedy:                        the meaning given to such term in 13.9.

Break-Up Infrastructure Costs:          [a]   with   respect   to  the   remedy
                                        exercised   pursuant  to  3.1[d],   the
                                        Infrastructure   Costs  (but  excluding
                                        Excess Infrastructure Costs) reasonably
                                        attributable   to  the   Essential  Ski
                                        Property  or any portion of the Village
                                        Core that is  conveyed  to Booth  Creek
                                        pursuant  to 3.1[d]  and which have not
                                        previously  been  returned  to  EWRD  V
                                        pursuant   to  5.1[g];   and  [b]  with
                                        respect   to   the   remedy   exercised
                                        pursuant to 13.9,  Infrastructure Costs
                                        (including  any  Excess  Infrastructure
                                        Costs)  reasonably  attributable to the
                                        Essential  Ski  Property or any portion
                                        of the Village Core that is
<PAGE>

                                        conveyed to Booth  Creek in  connection
                                        with  the   exercise  of  the  Break-Up
                                        Remedy  by  Booth  Creek or EWRD V, and
                                        which have not previously been returned
                                        to EWRD V pursuant  to 5.1[g]  plus any
                                        Unpaid  Preferred  Return  for  Capital
                                        Commitment   reasonably  attributed  to
                                        such unreturned Infrastructure Costs.

Capital Account:                        the   capital   account   of  a  Member
                                        established     and    maintained    in
                                        accordance with 3.4.

Capital Commitment:                     an amount equal to $28,000,000.

Capital Commitment Account:             an account  with an initial  balance of
                                        zero,  which is  increased  by EWRD V's
                                        Initial Contribution and all Additional
                                        Contributions for Capital Commitment by
                                        EWRD   V  and  is   decreased   by  all
                                        Distributions  pursuant  to 5.1[g]  and
                                        5.1[h].

Capital Contribution:                   any  contribution  of money or property
                                        by a  Member  to the  Company  which is
                                        either an  Initial  Contribution  or an
                                        Additional Contribution.

Certificate:                            the  Certificate  of  Formation  of the
                                        Company, as amended from time to time.

Code:                                   the Internal  Revenue Code of 1986,  as
                                        amended  from  time to time  (including
                                        corresponding  provisions of subsequent
                                        revenue laws).

Company:                                Northstar  Holdings,   LLC,  as  formed
                                        under the  Certificate  and governed by
                                        this Agreement.

Company Minimum Gain:                   the amount  computed under  Regulations
                                        Section  1.704-2(d)(1)  with respect to
                                        the Company's Nonrecourse Liabilities.

Computation Date:                       the date as of which any computation is
                                        made.

Conveyance Property:                    the  Essential  Ski  Property  and  the
                                        Village  Core (to the  extent  the same
                                        are conveyed to the Company pursuant to
                                        the Real  Estate  Purchase  Agreement),
                                        except any parcel in the  Village  Core
                                        as to which  the  Project  Commencement
                                        Date has occurred as of
<PAGE>

                                        the date Booth Creek gives  Notice of a
                                        Funding  Default  under  3.1[d]  or its
                                        election  to  exercise   the   Break-Up
                                        Remedy under  13.9[a],  as the case may
                                        be.

Deadlock:                               the continued disagreement between EWRD
                                        V and Booth Creek  concerning  material
                                        matters   relating  to  the   Company's
                                        business,  such  that,  notwithstanding
                                        the  satisfaction by Booth Creek of its
                                        obligation  [a] to act reasonably as to
                                        matters  governed by 6.3 and [b] to act
                                        in good faith as to matters governed by
                                        6.4,  the  Company is unable to proceed
                                        in  a   reasonable   manner   with  the
                                        completion  of  the  Project,  and  the
                                        continuation  of such  condition  for a
                                        period  of  at  least  12  months,   as
                                        determined  either by the  agreement of
                                        EWRD  V  and  Booth   Creek  or  by  an
                                        arbitrator    under   the   Arbitration
                                        Agreement.

Depreciation:                           for each taxable year or other  period,
                                        an  amount  equal to the  depreciation,
                                        amortization  or  other  cost  recovery
                                        deduction  allowable with respect to an
                                        asset  for the  year or  other  period,
                                        except  that if the  Book  Value  of an
                                        asset  differs from its adjusted  basis
                                        for federal  income tax purposes at the
                                        beginning of the year or other  period,
                                        Depreciation  will be an  amount  which
                                        bears the same  ratio to the  beginning
                                        Book  Value as the  federal  income tax
                                        depreciation,   amortization  or  other
                                        cost recovery deduction for the year or
                                        other  period  bears  to the  beginning
                                        adjusted tax basis,  but if the federal
                                        income tax depreciation,  amortization,
                                        or other cost  recovery  deduction  for
                                        the  year  or  other  period  is  zero,
                                        Depreciation  will be  determined  with
                                        reference to the  beginning  Book Value
                                        using any reasonable method selected by
                                        the Manager.

Dissolution:                            the  happening of any of the events set
                                        forth in 11.1.

Distribution:                           the  amount  of any  money  or the Fair
                                        Market    Value    of   any    property
                                        distributed   by  the  Company  to  the
                                        Members as an operating or  liquidating
                                        distribution  in  accordance  with this
                                        Agreement.

East West Change of Control:            any  event or  circumstance  such  that
                                        neither of the  following is true:  [a]
                                        Harry H.
<PAGE>

                                        Frampton,  III is actively  involved in
                                        the  operations  of,  and  has  primary
                                        day-to-day decision making authority in
                                        the   operations  of  EWRD  V  (or  any
                                        Transferee  of  EWRD V as the  Manager)
                                        and [b] at least  one of the East  West
                                        Key Managers  are actively  involved in
                                        the  operations  of,  and have  primary
                                        day-to-day decision making authority in
                                        the  operations  of,  EWRD  V  (or  any
                                        Transferee of EWRD V as the Manager).

East West Key Managers:                 Ross  E.  Bowker,   Roger  W.  Lessman,
                                        Charles I. Madison, Blake L. Riva, Mark
                                        L. Smith, and James A. Telling plus any
                                        other  individual  whom  EWRD V adds to
                                        the foregoing  list and less any of the
                                        foregoing   individuals   whom  EWRD  V
                                        removes  from  the  list  (subject,  in
                                        either  case,  to the  consent of Booth
                                        Creek,   such   consent   not   to   be
                                        unreasonably   withheld,   delayed   or
                                        conditioned),  provided such individual
                                        has  agreed  to be bound by the  Master
                                        Non-Competition  Agreement  in the form
                                        of Exhibit I.

Economic Interest:                      each    Member's   (or    Transferee's)
                                        percentage  interest  (to  the  nearest
                                        one-thousandth  of a  percent)  in  the
                                        Income of the Company as  specified  in
                                        Exhibit B, as amended from time to time
                                        in accordance with this Agreement.

Emergency:                              an  event  that  causes  or  imminently
                                        threatens  to cause  risk of a material
                                        loss  of  income  or  property  of  the
                                        Company  arising from an  extraordinary
                                        circumstance or occurrence not expected
                                        and  not  in  the  ordinary  course  of
                                        business  (including  a loss  caused by
                                        contractual    defaults   and   similar
                                        occurrences  if not expected and not in
                                        the ordinary  course of  business),  or
                                        imminent risk of bodily injury or death
                                        to any individual. "Emergency" includes
                                        shortages  of  capital  caused  by such
                                        occurrences  as an  uninsured  casualty
                                        loss or tort claim, a material  adverse
                                        condition  with  respect to the geology
                                        or soils of the Property, the existence
                                        of hazardous  materials on the Property
                                        or  other  adverse  conditions,  or any
                                        other extraordinary  circumstance,  but
                                        does not include  shortages  of capital
                                        caused by cost overruns on the Projects
<PAGE>

                                        or  events  occurring  in the  ordinary
                                        course of development of the Property.

Encumbrance:                            the   granting  by  the  Company  of  a
                                        mortgage,  deed  of  trust,  pledge  or
                                        other lien on or  security  interest in
                                        any real property of the Company.

Essential Ski Property:                 [a] any portion of the  Property or the
                                        Ten Year Option  Property  specified on
                                        Exhibit P and [b] any other  portion of
                                        the  Property  or the Ten  Year  Option
                                        Property,    that   [i]   Booth   Creek
                                        reasonably   determines  could  not  be
                                        developed in the manner proposed by the
                                        Manager   without   having  an  adverse
                                        effect on the  operation of the Resort,
                                        [ii] if included  within the definition
                                        of Essential  Ski  Property,  would not
                                        have a materially adverse effect on the
                                        densities  contemplated  by the  Master
                                        Development Plan, and [iii] as to which
                                        Booth  Creek  provides  Notice  to  the
                                        Manager   (specifying   in   reasonable
                                        detail    the    reasons    for    such
                                        determination) within 10 days after the
                                        Manager  provides Notice to Booth Creek
                                        of an interest or plan to develop  such
                                        portion of  Property or Ten Year Option
                                        Property.

EWRD Party:                             [a] any  Affiliate  of EWRD V  owning a
                                        membership  interest  in a Project  LLC
                                        and  [b]  any   key   employee   of  an
                                        Affiliate  of  EWRD  V  having   direct
                                        management  duties with  respect to one
                                        or   more   Projects   and   owning   a
                                        membership interest in a Project LLC.

EWRD V:                                 the  meaning  given to such term in the
                                        preamble.

Excess Infrastructure Costs:            any Infrastructure  Costs to the extent
                                        they are  incurred  as a result  of the
                                        development   of    Infrastructure   to
                                        standards      higher      than     the
                                        Infrastructure Standards, as reasonably
                                        determined by EWRD V.

Fair Market Value:                      the  cash  price  at  which  a  willing
                                        seller  would sell and a willing  buyer
                                        would buy,  both having full  knowledge
                                        of the  relevant  facts and being under
                                        no  compulsion  to buy or  sell,  in an
                                        arm's-length  transaction  without time
                                        constraints.
<PAGE>

Fiscal Year:                            the period  commencing  on January 1 of
                                        each year and ending on  December 31 of
                                        such year,  but the first  Fiscal  Year
                                        will   begin   on  the   date  of  this
                                        Agreement and the last Fiscal Year will
                                        end on the date on which the Company is
                                        terminated.

Funding Default:                        the  meaning  given  to  such  term  in
                                        3.1[d].

Funding Percentage:                     80% with respect to EWRD V and 20% with
                                        respect to Booth Creek.

GAAP:                                   generally      accepted      accounting
                                        principles.

Gross Sales Price:                      the gross sales price of an arms length
                                        bona fide sale  transaction  of each of
                                        the  Units,   without   deduction   for
                                        commissions or selling  expenses of any
                                        nature  whatsoever,   and  specifically
                                        including    any   Unit   premium   but
                                        excluding   bona  fide  developer  cash
                                        discounts,       cash       allowances,
                                        furnishings,  any  and  all  membership
                                        initiation  fees  paid by the  buyer of
                                        the Unit, and Upgrades.

Income:                                 for  each  Fiscal  Year,  each  item of
                                        income   and   gain   as    determined,
                                        recognized  and  classified for federal
                                        income tax purposes, but [a] any income
                                        or gain  that is  exempt  from  federal
                                        income  tax will be  included  as if it
                                        were an item of taxable income, [b] any
                                        income  or  gain  attributable  to  the
                                        taxable   disposition  of  any  Company
                                        asset will be  computed  by the Company
                                        as if the adjusted  basis of such asset
                                        as of the date of the disposition  were
                                        equal in amount to the  Company's  Book
                                        Value with  respect to such asset as of
                                        such  date,  [c]  in  the  event  of  a
                                        distribution   of  any  Company  asset,
                                        whether  or  not in  connection  with a
                                        liquidation of the Company,  such event
                                        will for Capital Account  purposes be a
                                        deemed  taxable   disposition  of  such
                                        Company asset immediately prior to such
                                        distribution and income or gain will be
                                        computed   and   allocated   among  the
                                        Members  as  if  such   property   were
                                        actually  disposed  of  for  an  amount
                                        realized equal to the Fair Market Value
                                        of such  asset  and as if the  adjusted
                                        basis of such  asset  was  equal to its
                                        Book Value at such time, and [d] in the
<PAGE>

                                        event  the Book  Value  of any  Company
                                        asset is adjusted  upwards  pursuant to
                                        the definition of Book Value the amount
                                        of such  adjustment  will be taken into
                                        account for Capital Account purposes as
                                        income or gain from the  disposition of
                                        such Company asset and allocated  among
                                        the Members.

Indemnitee:                             the meaning given to such term in 9.1.

Infrastructure Costs:                   all   direct,    out-of-pocket    costs
                                        incurred by or on behalf of the Company
                                        or any  Project LLC in  developing  the
                                        infrastructure for the Property and any
                                        Ten Year Option  Property (to the point
                                        at which such infrastructure enters the
                                        boundary  of the site that is  intended
                                        to be  sold  to end  users),  including
                                        development  and   construction   costs
                                        associated with roads and utilities and
                                        the On-Site Management Allowance,  but,
                                        solely for the purposes of  determining
                                        the   Unpaid   Booth   Creek    Return,
                                        excluding Excess Infrastructure Costs.

Infrastructure Standards:               the  standards  set forth in Exhibit K,
                                        which  describe the  standards to which
                                        Infrastructure   is   expected   to  be
                                        developed  (but such  standards  do not
                                        restrict  EWRD  V in  any  decision  to
                                        develop  Infrastructure  to a  standard
                                        that is higher than the  Infrastructure
                                        Standards).

Initial Contribution:                   the initial capital  contribution  made
                                        by  a  Member   to  the   Company,   as
                                        described  in 3.1 and as set  forth  on
                                        the attached Exhibit C.

Land Costs:                             the  $15,000,000  purchase price of the
                                        Property.

Liquidation:                            the   process   of   winding   up   and
                                        terminating   the  Company   after  its
                                        Dissolution.

Loss:                                   for each Fiscal Year, each item of loss
                                        or deduction as determined,  recognized
                                        and  classified  for federal income tax
                                        purposes,  but  [a]  any  Code  Section
                                        705(a)(2)(B)    expenditure   will   be
                                        included  as if it  were  a  deductible
                                        expenditure,  [b] any loss attributable
                                        to  the  taxable   disposition  of  any
<PAGE>

                                        Company  asset will be  computed by the
                                        Company  as if the  adjusted  basis  of
                                        such  asset  as  of  the  date  of  the
                                        disposition were equal to the Company's
                                        Book Value  with  respect to such asset
                                        as of such date,  [c] in the event of a
                                        distribution   of  any  Company  asset,
                                        whether  or  not in  connection  with a
                                        liquidation of the Company,  such event
                                        will be a deemed taxable disposition of
                                        such  asset  immediately  prior to such
                                        distribution   and  any  loss  will  be
                                        computed   and   allocated   among  the
                                        Members  as  if  such   property   were
                                        actually  disposed  of  for  an  amount
                                        realized equal to the Fair Market Value
                                        of such  asset  and as if the  adjusted
                                        basis of such  asset  were equal to its
                                        Book  Value  at such  time,  [d] in the
                                        event  the Book  Value  of any  Company
                                        asset is adjusted  downward pursuant to
                                        the  definition  of  Book  Value,   the
                                        amount of such adjustment will be taken
                                        into   account   as  a  loss  from  the
                                        disposition of such asset and allocated
                                        among   the   Members,   and   [e]  any
                                        deductions   for   Depreciation    with
                                        respect  to a  Company  asset  will  be
                                        determined as if the adjusted  basis of
                                        such asset were equal to the Book Value
                                        of   such   asset   pursuant   to   the
                                        methodology  described  in  Regulations
                                        Section 1.704-1(b)(2)(iv)(g)(3).

Management Fee Commencement Date:       with respect to any  Project,  the date
                                        as  of  which  the  Company  retains  a
                                        design   firm  for  the   purposes   of
                                        preparing an architectural plan for the
                                        Project  that is  consistent  with  the
                                        Master Development Plan.

Manager:                                EWRD  V,  as  and  when  acting  in its
                                        capacity  as the manager of the Company
                                        as provided in this Agreement,  and any
                                        successor manager.

Master Development Plan:                the   development   plan   attached  as
                                        Exhibit  G, as the same may be  amended
                                        or revised from time to time.

Material Manager Breach:                [a] any Event of  Withdrawal  of EWRD V
                                        prior to the Project Completion Date of
                                        all Projects,  [b] the  occurrence of a
                                        Funding  Default,   or  [c]  any  other
                                        breach of the  terms of this  Agreement
                                        by  EWRD V if  [i]  Booth  Creek  gives
                                        Notice   of  such   breach  to  EWRD  V
                                        (specifying  in  reasonable  detail the
                                        nature of the breach), [ii] such
<PAGE>

                                        breach,  if reasonably  susceptible  to
                                        cure, remains uncured to the reasonable
                                        satisfaction of Booth Creek for 45 days
                                        after EWRD V's  receipt of such  Notice
                                        (or if such  breach  cannot be cured to
                                        the  reasonable  satisfaction  of Booth
                                        Creek within such 45-day  period,  then
                                        EWRD V fails to proceed  reasonably and
                                        in good faith to cure such breach until
                                        such breach is cured to the  reasonable
                                        satisfaction  of  Booth  Creek),  [iii]
                                        such  breach   results  in  a  material
                                        detriment  to the Company  which either
                                        cannot be, or is not,  compensated  for
                                        by the  payment  of  money by EWRD V to
                                        the Company or Booth  Creek,  or by the
                                        taking    of   any    alternative    or
                                        substituted  action by EWRD V that puts
                                        the   Company   and   Booth   Creek  in
                                        substantially  the same  position as if
                                        no breach had occurred.

Member:                                 a  Member  as  listed  on the  attached
                                        Exhibit   A,  and  any   other   Person
                                        subsequently admitted to the Company as
                                        an additional  or substitute  member in
                                        accordance   with  the  terms  of  this
                                        Agreement.

Member Minimum Gain:                    the minimum gain attributable to Member
                                        Nonrecourse  Debt as  determined  under
                                        Regulations Section 1.704-2(i)(3).

Member Nonrecourse Debt:                any   Nonrecourse   Liability   of  the
                                        Company for which any Member or related
                                        person bears the economic  risk of loss
                                        under   Regulations   Section   1.752-2
                                        within  the   meaning  of   Regulations
                                        Section 1.704-2(b)(4).

Member Nonrecourse Deductions:          Company  losses,   deductions  or  Code
                                        Section    705(a)(2)(B)    expenditures
                                        attributable  to  a  particular  Member
                                        Nonrecourse  Debt. The amount of Member
                                        Nonrecourse  Deductions  for any Fiscal
                                        Year or other period will be determined
                                        in  accordance  with the  provisions of
                                        Regulations Section 1.704-2(i)(2).

Minimum Booth Creek Return:             [a] if the Company is liquidated  prior
                                        to  the  development  of  the  Property
                                        substantially  in  accordance  with the
                                        Master  Development  Plan,  the sale of
                                        all   Units   and   the   distribution,
                                        pursuant  to  Article  5, of all of the
                                        net sales  proceeds  derived  from such
                                        development and sale (after the payment
                                        of  the   claims   of   the   Company's
                                        creditors), an amount equal
<PAGE>

                                        to the  difference  between [i] the sum
                                        of the  Assumed  Parcel  Values  of all
                                        Parcels  conveyed  to the  Company  and
                                        [ii]  the  sum  of  [A]  the  aggregate
                                        amount paid by EWRD V (or its  nominee)
                                        for such Parcels  under the Real Estate
                                        Purchase Agreement, and [B] any payment
                                        of the Booth  Creek  Return  made under
                                        5.1[a] or 12.2[f] or [b] if the Company
                                        is liquidated  after the development of
                                        the    Property     substantially    in
                                        accordance with the Master  Development
                                        Plan,  the  sale of all  Units  and the
                                        distribution, pursuant to Article 5, of
                                        all of the net sales  proceeds  derived
                                        from such  development  and sale (after
                                        the   payment  of  the  claims  of  the
                                        Company's  creditors),  an amount equal
                                        to zero.  For purposes of the foregoing
                                        calculation,  if any of the  Conveyance
                                        Property is  conveyed  to Booth  Creek,
                                        the sum of the Assumed Parcel Values of
                                        all Parcels previously  conveyed to the
                                        Company  will be decreased by an amount
                                        equal  to [i] such  sum  multiplied  by
                                        [ii] a fraction, the numerator of which
                                        is the  number  of all  Units  actually
                                        constructed or to be constructed on the
                                        Conveyance  Property as contemplated by
                                        the  Master  Development  Plan  and the
                                        denominator  of which is the  number of
                                        all Units  contemplated  by the  Master
                                        Development Plan, in each case, as such
                                        Master Development Plan is in effect at
                                        the time of conveyance.

Net Income and Net Loss:                for each Fiscal Year, (i) the excess of
                                        the  Income  for such  period  over the
                                        Loss  for  such  period,  or  (ii)  the
                                        excess of the Loss for such period over
                                        the    Income    for    such    period,
                                        respectively,  but Net  Income  and Net
                                        Loss for a Fiscal Year will be computed
                                        by excluding from such  computation any
                                        Income  or  Loss  specially   allocated
                                        under 4.2 through 4.12, any Nonrecourse
                                        Deduction,  and any Member  Nonrecourse
                                        Deductions.

New Member:                             the  meaning  given  to  such  term  in
                                        3.2[b].

Nonrecourse Deductions:                 Losses,   deductions  or  Code  Section
                                        705(a)(2)(B)  expenditures attributable
                                        to   Nonrecourse   Liabilities  of  the
                                        Company.   The  amount  of  Nonrecourse
                                        Deductions for any Fiscal
<PAGE>

                                        Year or other period will be determined
                                        in  accordance  with the  provisions of
                                        Regulations Section 1.704-2(c).

Nonrecourse Liability:                  A  nonrecourse  liability as defined in
                                        Regulations  Section  1.752-1(a)(2) and
                                        referred  to  in  Regulations   Section
                                        1.704-2(b)(3).

Northstar at Tahoe:                     the  approximately  8,000 acres of real
                                        property  owned by Booth Creek  located
                                        in  Placer  County,   California,   and
                                        identified with more  particularity  in
                                        the Real Estate Purchase Agreement.

Notice:                                 the  meaning  given  to  such  term  in
                                        15.12.

Offer Notice:                           the  meaning  given  to  such  term  in
                                        13.8[a]  or  13.12[a],  as the case may
                                        be.

On-Site Management Allowance:           an  amount  equal to [a] the  Manager's
                                        direct, out-of-pocket costs incurred in
                                        the on-site  management of the Projects
                                        and [b] 150% of the  salaries and wages
                                        paid to not more than seven individuals
                                        employed  or retained by the Manager or
                                        its    Affiliates   who   are   engaged
                                        primarily in on-site  management of the
                                        Projects,  but only, in each of [a] and
                                        [b],  for the period  from the  Closing
                                        under   the   Real   Estate    Purchase
                                        Agreement and the second anniversary of
                                        such date.

Ownership Interest:                     with  respect to each Person  owning an
                                        interest  in  the  Company,  all of the
                                        interests of such Person in the Company
                                        (including  an  interest  in the Income
                                        and  Losses of the  Company,  a Capital
                                        Account interest,  and all other rights
                                        and  obligations  of such Person  under
                                        this Agreement).

Parcel:                                 a  parcel  of  property  shown  on  the
                                        Master   Development  Plan  within  the
                                        black-bordered outlines.

Permitted Liens:                        the  exceptions  to title  permitted as
                                        "Conditions of Title" in Section 5.1 of
                                        the Real Estate Purchase  Agreement and
                                        any other  liens or matters  created or
                                        approved by Booth Creek.
<PAGE>

Permitted Transferee:                   a Person  described  in 13.3 to whom an
                                        Ownership Interest may be Transferred.

Person:                                 an       individual,       corporation,
                                        partnership, limited liability company,
                                        trust,   unincorporated   organization,
                                        association or other entity.

Preferred Return for Capital            for all or any  portion  of any  Fiscal
Commitment:                             Year,  a 12% annual rate of return,  on
                                        an  amount  equal to the sum of [a] the
                                        weighted   arithmetic  average  of  the
                                        Adjusted  Capital  Contribution  Amount
                                        for  Capital   Commitment  during  such
                                        Fiscal   Year   or   portion    thereof
                                        (calculated  by taking into account the
                                        amount   of   the   Adjusted    Capital
                                        Contribution    Amount   for    Capital
                                        Commitment  on  each  day  during  such
                                        Fiscal  Year  or  portion  of a  Fiscal
                                        Year) and [b] the  weighted  arithmetic
                                        average   of   the   Adjusted    Unpaid
                                        Preferred  Return  Amount  for  Capital
                                        Commitment  during  such Fiscal Year or
                                        portion of a Fiscal Year (calculated by
                                        taking  into  account the amount of the
                                        Adjusted Unpaid Preferred Return Amount
                                        for  Capital  Commitment  on  each  day
                                        during such Fiscal Year or portion of a
                                        Fiscal Year).

Preferred Return for
Excess Capital:                         for any Member,  for all or any portion
                                        of any Fiscal  Year,  a 15% annual rate
                                        of  return,  on an amount  equal to the
                                        sum  of  [a]  the  weighted  arithmetic
                                        average  of  such   Member's   Adjusted
                                        Capital  Contribution Amount for Excess
                                        Capital  during  such  Fiscal  Year  or
                                        portion  thereof  (calculated by taking
                                        into   account   the   amount  of  such
                                        Member's Adjusted Capital  Contribution
                                        Amount for  Excess  Capital on each day
                                        during such Fiscal Year or portion of a
                                        Fiscal   Year)  and  [b]  the  weighted
                                        arithmetic  average  of  such  Member's
                                        Adjusted Unpaid Preferred Return Amount
                                        for Excess  Capital  during such Fiscal
                                        Year  or  portion  of  a  Fiscal   Year
                                        (calculated  by taking into account the
                                        amount of such Member's Adjusted Unpaid
                                        Preferred   Return  Amount  for  Excess
                                        Capital on each day during  such Fiscal
                                        Year or portion of a Fiscal Year).
<PAGE>

Preferred Return for Land:              for all or any  portion  of any  Fiscal
                                        Year, an 8% annual rate of return on an
                                        amount  equal  to the  sum  of [a]  the
                                        weighted   arithmetic  average  of  the
                                        Adjusted  Capital  Contribution  Amount
                                        for Land  during  such  Fiscal  Year or
                                        portion  thereof  (calculated by taking
                                        into account the amount of the Adjusted
                                        Capital Contribution Amount for Land on
                                        each day  during  such  Fiscal  Year or
                                        portion  of a Fiscal  Year) and [b] the
                                        weighted   arithmetic  average  of  the
                                        Adjusted Unpaid Preferred Return Amount
                                        for Land  during  such  Fiscal  Year or
                                        portion of a Fiscal Year (calculated by
                                        taking  into  account the amount of the
                                        Adjusted Unpaid Preferred Return Amount
                                        for Land on each day during such Fiscal
                                        Year or portion of a Fiscal Year).

Preferred Return:                       [a]  with   respect   to  EWRD  V,  the
                                        Preferred    Return   for   Land,   the
                                        Preferred     Return    for     Capital
                                        Commitment,  and the  Preferred  Return
                                        for Excess  Capital  for EWRD V and [b]
                                        with  respect  to  Booth   Creek,   the
                                        Preferred Return for Excess Capital for
                                        Booth Creek.

Presumed Tax Liability:                 for any  Member for a Fiscal  Year,  an
                                        amount  equal to the product of [a] the
                                        amount of taxable  income  allocated to
                                        such  Member for that  Fiscal  Year and
                                        [b] the Presumed Tax Rate.

Presumed Tax Rate:                      the  combined  federal and state income
                                        tax  rate,  adjusted  for  the  federal
                                        deduction   for  state  income   taxes,
                                        applicable  during  a  Fiscal  Year for
                                        computing  regular  ordinary income tax
                                        liabilities   of   a   natural   person
                                        residing  in  Colorado  in the  highest
                                        bracket of taxable income.

Proceeding:                             any  threatened,  pending or  completed
                                        action,  suit  or  proceeding,  whether
                                        formal or informal,  and whether civil,
                                        administrative,     investigative    or
                                        criminal.

Project:                                the      acquisition,      development,
                                        operation, and sale of the Property and
                                        the Ten Year Option  Property,  if any,
                                        in phases or segments,  with each phase
<PAGE>

                                        or  segment  to  be  categorized  as  a
                                        separate Project,  as determined in the
                                        Master   Development  Plan  and  Annual
                                        Plans, as amended from time to time.

Project Commencement Date:              the earlier of: [a] the commencement of
                                        construction    with   respect   to   a
                                        particular  Project or [b] the issuance
                                        of  a   construction   permit  and  the
                                        recordation of a construction loan deed
                                        of trust or  mortgage  with  respect to
                                        such Project.

Project Completion Date:                with respect to any  Project,  the date
                                        on which all of the  Units  constructed
                                        for such Project have been sold.

Project LLC:                            each limited liability company which is
                                        created  to own and  operate a specific
                                        Project.

Property:                               the portions of real property described
                                        in  Exhibit  H which  are from  time to
                                        time  conveyed to the Company  pursuant
                                        to the Real Estate Purchase Agreement.

Purchase Price:                         the  meaning  given  to  such  term  in
                                        13.12[a].

Real Estate Purchase Agreement:         the  Agreement for Purchase and Sale of
                                        Real Property  dated  December 15, 1999
                                        between   Booth  Creek  and  East  West
                                        Partners, Inc.

Recipient Member:                       the  meaning  given  to  such  term  in
                                        13.11[a].

Regulations:                            the  Treasury  Regulations   (including
                                        temporary   or  proposed   regulations)
                                        promulgated  under the Code, as amended
                                        from    time   to    time    (including
                                        corresponding  provisions of succeeding
                                        regulations).

Resort:                                 the meaning given to such term in 13.8.

Resort Right of First Offer Agreement:  an  agreement  pursuant  to which Booth
                                        Creek  gives  EWRD V a right  of  first
                                        offer to purchase the Resort containing
                                        the general terms  contained in Exhibit
                                        Q,   which   will   be   entered   into
                                        concurrently with this Agreement.

Tax Distribution:                       the meaning given to such term in 5.2.
<PAGE>

Ten Year Option Property:               the  parcels  of real  property  within
                                        Northstar at Tahoe which are identified
                                        in  Exhibit  N and  which  Booth  Creek
                                        conveys to the Company  pursuant to the
                                        Ten Year Option Agreement  entered into
                                        pursuant  to the Real  Estate  Purchase
                                        Agreement.

Trademark License Agreement:            The  non-exclusive   license  agreement
                                        between  Trimont  Land  Company and the
                                        Company  in the form and  substance  of
                                        Exhibit O.

Transfer:                               a sale, exchange, assignment, transfer,
                                        pledge,  transfer  upon  or in  lieu of
                                        foreclosure, or other disposition of an
                                        Ownership Interest (whether  voluntary,
                                        involuntary  or by  operation  of  law)
                                        including  a  pledge  and  transfer  in
                                        foreclosure or in lieu of foreclosure.

Transferee:                             a Person to whom an Ownership  Interest
                                        is Transferred in compliance  with this
                                        Agreement,  who will  have  the  rights
                                        specified in 13.6 of this Agreement.

Transferor:                             a Person  who  Transfers  an  Ownership
                                        Interest   in   compliance   with  this
                                        Agreement.

Unit:                                   any  condominium,  town  home or  other
                                        residential  property  developed by the
                                        Company in connection with the Project.

Unpaid Booth Creek Return:              as of any  Computation  Date, an amount
                                        equal to [a] the sum of the Booth Creek
                                        Return [i] for the period  beginning on
                                        the first day of the Fiscal Year within
                                        which  such date  occurs  and ending on
                                        the  Computation  Date and [ii] for all
                                        prior   Fiscal   Years   less  [b]  all
                                        Distributions made to Booth Creek on or
                                        prior to the Computation  Date pursuant
                                        to 12.2[f] and 5.1[a] or deemed made to
                                        Booth   Creek   on  or   prior  to  the
                                        Computation  Date  pursuant  to  5.1[a]
                                        pursuant to the second sentence of 5.2.
<PAGE>

Unpaid Preferred Return for
Capital Commitment:                     as of any  Computation  Date, an amount
                                        equal  to [a] the sum of the  Preferred
                                        Return for Capital  Commitment  [i] for
                                        the period  beginning  on the first day
                                        of the Fiscal  Year  within  which such
                                        date   occurs   and   ending   on   the
                                        Computation Date and [ii] for all prior
                                        Fiscal    Years,     less    [b]    all
                                        Distributions  made  to  EWRD  V on  or
                                        prior to the Computation  Date pursuant
                                        to 12.2[g] and 5.1[e] or deemed made to
                                        EWRD V on or prior  to the  Computation
                                        Date pursuant to 5.1[e] pursuant to the
                                        second sentence of 5.2.

Unpaid Preferred Return
for Excess Capital:                     as of  any  Computation  Date  for  any
                                        Member,  an amount equal to [a] the sum
                                        of such Member's  Preferred  Return for
                                        Excess   Capital  [i]  for  the  period
                                        beginning  on  the  first  day  of  the
                                        Fiscal  Year  within  which  such  date
                                        occurs  and  ending on the  Computation
                                        Date  and  [ii]  for all  prior  Fiscal
                                        Years, less [b] all Distributions  made
                                        to  such  Member  on or  prior  to  the
                                        Computation  Date  pursuant  to 12.2[e]
                                        and  5.1[c]  or  deemed  made  to  such
                                        Member  on or prior to the  Computation
                                        Date pursuant to 5.1[c] pursuant to the
                                        second sentence of 5.2.

Unpaid Preferred Return
for Land:                               as of any  Computation  Date, an amount
                                        equal  to [a] the sum of the  Preferred
                                        Return  for  Land  [i] for  the  period
                                        beginning  on  the  first  day  of  the
                                        Fiscal  Year  within  which  such  date
                                        occurs  and  ending on the  Computation
                                        Date  and  [ii]  for all  prior  Fiscal
                                        Years, less [b] all Distributions  made
                                        to   EWRD   V  on  or   prior   to  the
                                        Computation  Date  pursuant  to 12.2[h]
                                        and 5.1[f] or deemed  made to EWRD V on
                                        or  prior  to  the   Computation   Date
<PAGE>

                                        pursuant  to  5.1[f]  pursuant  to  the
                                        second sentence of 5.2.

Unpaid Preferred Return:                as of any  Computation  Date, an amount
                                        equal  to [a] with  respect  to EWRD V,
                                        the Unpaid  Preferred  Return for Land,
                                        the Unpaid Preferred Return for Capital
                                        Commitment  and  the  Unpaid  Preferred
                                        Return  for Excess  Capital  for EWRD V
                                        and [b] with  respect  to Booth  Creek,
                                        the Unpaid  Preferred Return for Excess
                                        Capital for Booth Creek.

Upgrades:                               any   so-called   upgrades,    options,
                                        builder   options,   change  orders  or
                                        custom  requests  ordered by the buyers
                                        of the Units  which are in  addition to
                                        the  inclusions  and  features  of  the
                                        standard  unit plan and  specifications
                                        distributed  in  connection   with  the
                                        marketing of the Units.

Village Core:                           parcels A, B, C, and D, as  depicted on
                                        the Master  Development  Plan,  but any
                                        portion of parcel D which is subdivided
                                        and does  not  contain  parking  spaces
                                        will not be included in the  definition
                                        of Village Core and,  after all parking
                                        spaces on parcel D have been relocated,
                                        the  entirety  of  parcel D will not be
                                        included in the  definition  of Village
                                        Core.

Vote:                                   the  action  of  the   Company  by  the
                                        Members in  accordance  with the voting
                                        requirement  set  forth in  Article  6,
                                        either in meeting assembled  (including
                                        any  meeting  described  in  7.9) or by
                                        minutes of action (or  written  consent
                                        without a meeting).

Withdrawal:                             the   occurrence   of  an  event  which
                                        terminates  membership  in the Company,
                                        as provided in 11.2.