$125,000,000


                           FIRST LIEN CREDIT AGREEMENT


                                      among


                            AMERICAN SKIING COMPANY,


           The Subsidiary Borrowers from Time to Time Parties Hereto,


              The Several Lenders from Time to Time Parties Hereto,


                           CREDIT SUISSE FIRST BOSTON,
                              as Syndication Agent,


                                       and


                      GENERAL ELECTRIC CAPITAL CORPORATION,
                  as Administrative Agent and Collateral Agent


                          Dated as of November 24, 2004


        GECC CAPITAL MARKETS GROUP, INC. and CREDIT SUISSE FIRST BOSTON,
                   as Co-Lead Arrangers and Joint Bookrunners


<PAGE>



                                TABLE OF CONTENTS

                                                                           Page

SECTION I.  DEFINITIONS........................................................1
         1.1.     Defined Terms................................................1
         1.2.     Other Definitional Provisions...............................22

SECTION II.  AMOUNT AND TERMS OF COMMITMENTS..................................22
         2.1.     Term Commitments............................................22
         2.2.     Procedure for Term Loan Borrowing...........................22
         2.3.     Repayment of Term Loans.....................................23
         2.4.     Revolving Commitments.......................................23
         2.5.     Procedure for Revolving Loan Borrowing......................24
         2.6.     Commitment Fees, etc........................................24
         2.7.     Termination or Reduction of Revolving Commitments...........25
         2.8.     Optional Prepayments........................................25
         2.9.     Mandatory Prepayments.......................................25
         2.10.    Conversion and Continuation Options.........................27
         2.11.    Limitations on Eurodollar Tranches..........................27
         2.12.    Interest Rates and Payment Dates............................27
         2.13.    Computation of Interest and Fees............................28
         2.14.    Inability to Determine Interest Rate........................28
         2.15.    Pro Rata Treatment and Payments.............................28
         2.16.    Requirements of Law.........................................30
         2.17.    Taxes.......................................................31
         2.18.    Indemnity...................................................32
         2.19.    Change of Lending Office....................................33
         2.20.    Replacement of Lenders......................................33

SECTION III.  LETTERS OF CREDIT...............................................33
         3.1.     L/C Commitment..............................................33
         3.2.     Procedure for Issuance of Letter of Credit..................34
         3.3.     Fees and Other Charges......................................34
         3.4.     L/C Participations..........................................34
         3.5.     Reimbursement Obligation of the Borrowers...................35
         3.6.     Obligations Absolute........................................36
         3.7.     Letter of Credit Payments...................................36
         3.8.     Applications................................................36

SECTION IV.  REPRESENTATIONS AND WARRANTIES...................................36
         4.1.     Financial Condition.........................................36
         4.2.     No Change...................................................37
         4.3.     Existence; Compliance with Law..............................37
         4.4.     Power; Authorization; Enforceable Obligations...............37
         4.5.     No Legal Bar................................................37
         4.6.     Litigation..................................................37
         4.7.     No Default..................................................37
         4.8.     Ownership of Property; Liens................................38
         4.9.     Intellectual Property.......................................38
         4.10.    Taxes.......................................................38

<PAGE>

         4.11.    Federal Regulations.........................................38
         4.12.    Labor Matters...............................................38
         4.13.    ERISA.......................................................38
         4.14.    Investment Company Act; Other Regulations...................39
         4.15.    Subsidiaries................................................39
         4.16.    Use of Proceeds.............................................39
         4.17.    Environmental Matters.......................................39
         4.18.    Accuracy of Information, etc................................40
         4.19.    Security Documents..........................................40
         4.20.    Solvency....................................................41
         4.21.    Senior Indebtedness.........................................41
         4.22.    Regulation H................................................41
         4.23.    Certain Documents...........................................41
         4.24.    Forest Service Term Special Use Permits.....................41
         4.25.    Location....................................................41
         4.26.    Water Rights................................................42
         4.27.    Grand Summit Resort Properties, Inc.........................42

SECTION V.  CONDITIONS PRECEDENT..............................................42
         5.1.     Conditions to Initial Extensions of Credit..................42
         5.2.     Conditions to Each Extension of Credit......................45

SECTION VI.  AFFIRMATIVE COVENANTS............................................46
         6.1.     Financial Statements........................................46
         6.2.     Certificates; Other Information.............................47
         6.3.     Payment of Obligations......................................48
         6.4.     Maintenance of Existence; Compliance........................48
         6.5.     Maintenance of Property Insurance...........................48
         6.6.     Inspection of Property; Books and Records; Discussions;
                  Surveys.....................................................48
         6.7.     Notices.....................................................48
         6.8.     Environmental Matters.......................................49
         6.9.     Additional Collateral, New Subsidiary Borrowers, etc........50
         6.10.    Forest Service Permits......................................52
         6.11.    Agreements with Respect to Excluded Subsidiaries............52
         6.12.    Interest Rate Protection....................................52
         6.13.    Post-Closing Obligations....................................52

SECTION VII.  NEGATIVE COVENANTS..............................................52
         7.1.     Financial Condition Covenants...............................53
         7.2.     Indebtedness................................................55
         7.3.     Liens.......................................................56
         7.4.     Fundamental Changes.........................................57
         7.5.     Disposition of Property.....................................57
         7.6.     Restricted Payments.........................................59
         7.7.     Capital Expenditures........................................59
         7.8.     Investments.................................................60
         7.9.     Optional Payments and Modifications of Certain Debt
                  Instruments.................................................60
         7.10.    Transactions with Affiliates................................61
         7.11.    Sales and Leasebacks........................................61
         7.12.    Swap Agreements.............................................61
         7.13.    Changes in Fiscal Periods...................................61

<PAGE>

         7.14.    Restrictive Agreements......................................61
         7.15.    Lines of Business...........................................62
         7.16.    Maintenance Capital Expenditures Variance...................62

SECTION VIII.  EVENTS OF DEFAULT..............................................62

SECTION IX.  THE AGENTS.......................................................65
         9.1.     Appointment.................................................65
         9.2.     Delegation of Duties........................................65
         9.3.     Exculpatory Provisions......................................65
         9.4.     Reliance by Agents..........................................66
         9.5.     Notice of Default...........................................66
         9.6.     Non-Reliance on Agents and Other Lenders....................66
         9.7.     Indemnification.............................................67
         9.8.     Agents in Their Individual Capacities.......................67
         9.9.     Successor Agents............................................67
         9.10.    Syndication Agent...........................................68

SECTION X.  MISCELLANEOUS.....................................................68
         10.1.    Amendments and Waivers......................................68
         10.2.    Notices.....................................................69
         10.3.    No Waiver; Cumulative Remedies..............................69
         10.4.    Survival of Representations and Warranties..................70
         10.5.    Payment of Expenses and Taxes...............................70
         10.6.    Successors and Assigns; Participations and Assignments......71
         10.7.    Adjustments; Set-off........................................73
         10.8.    Counterparts................................................74
         10.9.    Severability................................................74
         10.10.   Integration.................................................74
         10.11.   Governing Law...............................................74
         10.12.   Submission To Jurisdiction; Waivers.........................74
         10.13.   Acknowledgments.............................................75
         10.14.   Releases of Guarantees and Liens............................75
         10.15.   Confidentiality.............................................75
         10.16.   Joint and Several Liability of Borrowers....................76
         10.17.   Appointment of ASC as Borrowers' Agent......................77
         10.18.   Killington Indenture........................................77
         10.19.   WAIVERS OF JURY TRIAL.......................................77

<PAGE>

SCHEDULES:

1.1A              Commitments
1.1B              Owned and Leased Real Property
1.1C              Excluded Immaterial Subsidiaries
1.1D              [Intentionally Omitted]
1.1E              New Junior Subordinated Note Terms
1.1F              Existing Letters of Credit
1.1G              Certain Non-Operating Assets
4.1               Certain Dispositions
4.4               Consents, Authorizations, Filings and Notices
4.6               Certain Litigation
4.15              Subsidiaries
4.19(a)           UCC Filings
4.19(b)           Mortgage Filings
4.22              Certain Real Property
4.24              Forest Service Permits
5.1(k)(vi)        Post-Closing Landlord Certificates
6.5(b)            Insurance Requirements
6.11              Certain Excluded Subsidiaries
6.13(b)           Certain Real Property Leases
7.2(b)            Existing Indebtedness
7.3(e)            Existing Liens
7.8(d)            Existing Investments
7.8(j)            Contemplated Sunday River Investment
7.14              Existing Restrictive Agreements
9.9               Approved Successor Agents

EXHIBITS:

A                 Form of Guarantee and Collateral Agreement
B                 Form of Compliance Certificate
C                 Form of Closing Certificate
D                 Form of Mortgage
E                 Form of Assignment and Assumption
F                 Form of Exemption Certificate
G                 Form of Subsidiary Borrower Agreement
H                 Form of Intercreditor Agreement
I                 Form of Prepayment Option Notice

<PAGE>

                  FIRST LIEN CREDIT AGREEMENT (this "Agreement"), dated as of
November 24, 2004, among AMERICAN SKIING COMPANY ("ASC"), the Subsidiary
Borrowers (as hereinafter defined) from time to time party to this Agreement,
the several banks and other financial institutions from time to time parties to
this Agreement (the "Lenders"), CREDIT SUISSE FIRST BOSTON ("CSFB"), as
syndication agent for the Lenders hereunder (in such capacity, "Syndication
Agent"), and GENERAL ELECTRIC CAPITAL CORPORATION ("GECC"), as administrative
agent for the Lenders hereunder (in such capacity, the "Administrative Agent")
and as Collateral Agent under the Security Documents (as defined below) (the
"Collateral Agent").

                  The parties hereto hereby agree as follows:


                             SECTION I. DEFINITIONS

     1.1.  Defined Terms.  As used in this  Agreement,  the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.

                  "ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. Any change in the ABR due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.

                  "ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.

                  "Additional Non-Operating Asset Sale Amount": (a) for the
fiscal year of ASC ending July 2005, $3,000,000; (b) for the fiscal year of ASC
ending July 2006, $5,000,000; and (c) for each fiscal year of ASC thereafter,
$11,000,000.

                  "Administrative Agent": GECC, as the administrative agent for
the Lenders under this Agreement and the other Loan Documents, together with any
of its successors.

                  "Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.

                   "Agents": the collective reference to the Syndication Agent,
the Administrative Agent and the Collateral Agent.

                  "Aggregate Exposure": with respect to any Lender at any time,
an amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and (ii) the
amount of such Lender's Revolving Commitment then in effect or, if the Revolving
Commitments have been terminated, the amount of such Lender's Revolving
Extensions of Credit then outstanding.

                  "Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposures of all Lenders at such time.
<PAGE>
                                                                               2

                  "Aggregate Facilities Amount":  at any time, the aggregate
Aggregate Exposure of all Lenders at such time.

                  "Agreement":  as defined in the preamble hereto.

                  "Applicable Margin":  for each Type of Loan, the rate per
annum set forth under the relevant column heading below:

                               ABR Loans                      Eurodollar Loans
        Revolving Loans          3.50%                              4.50%
        Term Loans               3.50%                              4.50%


                  "Application":  an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to open a
Letter of Credit.

                  "Appraisal": an appraisal of the fair market value of property
and business performed by ResortNorth Valuation or another Independent Appraiser
(i) delivered pursuant to Section 5.1(q) and accepted and approved by the
Administrative Agent or (ii) commissioned by ASC pursuant to Section 7.1(b)(ii)
or by the Required Lenders pursuant to Section 9.1(b)(iii).

                  "Appraised Value": the fair market value of the subject
property determined by the most recent Appraisal or Desktop Appraisal conducted
in accordance with Section 7.1(b). The fair market value of any Ski Resort
Property shall be determined based on the assumption that such Ski Resort
Property will be sold individually as a going concern to an unrelated third
party on an arms'-length basis within a twelve-month period. For the purposes of
the Desktop Appraisals, fair market value shall be determined based on the most
recently available financial information of the Borrowers using the same
methodology as the September 2004 desktop appraisal based on EBITDA after
deduction for appropriate maintenance Capital Expenditures, as determined by the
appraiser, for the Ski Resort Properties and appropriate capitalization rates as
determined by the appraiser, or other normally used conventions, such as a
discounted cash-flow analysis, where appropriate.

                  "Approved Fund":  as defined in Section 10.6(b).

                  "ASCRP":  American Skiing Company Resort Properties, Inc., a
Maine corporation.

                  "Assignee":  as defined in Section 10.6(b).

                  "Assignment and Assumption":  an Assignment and Assumption,
substantially in the form of Exhibit E.

                  "Available Revolving Commitment": as to any Revolving Lender
at any time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Commitment then in effect over (b) such Lender's Revolving Extensions
of Credit then outstanding.

                  "Benefitted Lender":  as defined in Section 10.7(a).

                  "Board":  the Board of Governors of the Federal Reserve System
of the United States (or any successor).
<PAGE>
                                                                               3

                  "Borrower":  as applicable, ASC or the relevant Subsidiary
Borrower and "Borrowers" mean, collectively, ASC and each Subsidiary Borrower.

                  "Borrowing Date": any Business Day specified by a Borrower as
a date on which a Borrower requests the relevant Lenders to make Loans hereunder

                  "Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City or Salt Lake City, Utah, are
authorized or required by law to close; provided, that with respect to notices
and determinations in connection with, and payments of principal and interest
on, Eurodollar Loans, such day is also a day for trading by and between banks in
Dollar deposits in the interbank eurodollar market.

                  "Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person for the acquisition or
leasing (pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) that should be capitalized under GAAP on the balance sheet of such
Person. For the avoidance of doubt, "Capital Expenditures" does not include
capitalized interest on Indebtedness.

                  "Capital Lease Obligations": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.

                  "Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.

                  "Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of one year or less from the date of acquisition
issued by any Lender or by any commercial bank organized under the laws of the
United States or any state thereof having combined capital and surplus of not
less than $500,000,000; (c) commercial paper of an issuer rated at least A-1 by
Standard & Poor's Ratings Services ("S&P") or P-1 by Moody's Investors Service,
Inc. ("Moody's"), or carrying an equivalent rating by a nationally recognized
rating agency, if both of the two named rating agencies cease publishing ratings
of commercial paper issuers generally, and maturing within one year from the
date of acquisition; (d) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (b) of this definition,
having a term of not more than 30 days, with respect to securities issued or
fully guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody's; (f)
securities with maturities of one year or less from the date of acquisition
backed by standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition; (g) money market
mutual or similar funds that invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition; or (h) money market
funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the
Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by
Moody's and (iii) have portfolio assets of at least $5,000,000,000.
<PAGE>
                                                                               4

                  "Change of Control": (i) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of Exchange Act), excluding the
Permitted Holders, shall become, or obtain rights (whether by means of warrants,
options or otherwise) to become, the "beneficial owner" (as defined in Rules
13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of more
than the greater of (x) 25% of the voting power of the outstanding Capital Stock
of ASC or (y) the combined voting power of such Capital Stock of the Permitted
Holders; or (ii) Continuing Directors shall cease to constitute a majority of
the members of the board of directors of ASC.

                  "Closing Date":  November 24, 2004.

                  "Code":  the Internal Revenue Code of 1986, as amended from
time to time.

                  "Collateral":  all property of the Borrowers, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.

                  "Collateral Agent":  as defined in the preamble hereto.

                  "Commitment":  as to any Lender, the sum of the Term
Commitment and the Revolving Commitment of such Lender.

                  "Commitment Fee Rate":  (a) in the case of the Revolving A
Commitments, a rate per annum equal to the Applicable Margin for Term Loans that
are Eurodollar Loans and (b) in the case of the Revolving B Commitments, 1.0%
per annum.

                  "Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with any Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.

                  "Compliance Certificate":  a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.

                  "Conduit Lender": any special purpose corporation organized
and administered by any Lender for the purpose of making Loans otherwise
required to be made by such Lender and designated by such Lender in a written
instrument; provided that the designation by any Lender of a Conduit Lender
shall not relieve the designating Lender of any of its obligations to fund a
Loan under this Agreement if, for any reason, its Conduit Lender fails to fund
any such Loan, and the designating Lender (and not the Conduit Lender) shall
have the sole right and responsibility to deliver all consents and waivers
required or requested under this Agreement with respect to its Conduit Lender,
and provided, further, that no Conduit Lender shall (a) be entitled to receive
any greater amount pursuant to Section 2.16, 2.17 or 10.5 than the designating
Lender would have been entitled to receive in respect of the extensions of
credit made by such Conduit Lender or (b) be deemed to have any Commitment.

                  "Confidential Information Memorandum": the Confidential
Information Memorandum dated September 2004 and furnished to certain Lenders.
<PAGE>
                                                                               5

                  "Consolidated Current Assets": at any date, all amounts (other
than cash and Cash Equivalents) that would, in conformity with GAAP, be set
forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of ASC and its Restricted Subsidiaries at such date.

                  "Consolidated Current Liabilities": at any date, all amounts
that would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet of
ASC and its Restricted Subsidiaries at such date, but excluding (a) the current
portion of any Funded Debt of ASC and its Restricted Subsidiaries and (b)
without duplication of clause (a) above, all Indebtedness consisting of
Revolving Loans to the extent otherwise included therein.

                  "Consolidated EBITDA": for any period (a) net income or (loss)
of ASC and its Restricted Subsidiaries on a consolidated basis for such period
determined in accordance with GAAP without giving effect to extraordinary gains
and losses from sales, exchanges and other dispositions of property not in the
ordinary course of business, and nonrecurring items and excluding from the
calculation of net income all revenues from any Excluded Subsidiary except to
the extent received by ASC or any Restricted Subsidiary in cash as a loan
repayment, dividend or other distribution, plus, to the extent deducted in
calculating net income for such period, (b) the sum of, without duplication, (i)
depreciation expense of ASC and its Restricted Subsidiaries, (ii) amortization
expense of ASC and its Restricted Subsidiaries, (iii) Consolidated Interest
Expense plus the non-cash portion of consolidated interest expense on
Consolidated Funded Debt, (iv) income tax expense of ASC and its Restricted
Subsidiaries, (v) non-cash expenses associated with the Phantom Stock Plan, (vi)
other non-cash items of ASC and its Restricted Subsidiaries, and (vii)
non-recurring expenses incurred in connection with the consummation of the
transactions contemplated by the Loan Documents, the repayment of obligations
outstanding under, and the termination of, the Existing Credit Agreement, the
tender offer and consent solicitation with respect to, and the redemption of,
the Senior Subordinated Notes and the exchange of the Series A Preferred Stock
for, and the issuance of, the New Junior Subordinated Notes; provided that, for
the fiscal quarters of ASC ended January 2004, April 2004 and July 2004,
"Consolidated EBITDA" shall be deemed to be $16,204,000, $54,969,000 and
$(14,335,000), respectively.

                  "Consolidated Funded Debt" means, as of each date of
determination, without duplication (a) all Indebtedness for borrowed money of
ASC and its Restricted Subsidiaries on that date (including all Capital Lease
Obligations), (b) the aggregate amount available for drawing under all letters
of credit outstanding on that date (including the Letters of Credit) for which
ASC or any Restricted Subsidiary is the account party (excluding, however, the
aggregate amount available for drawing under letters of credit issued to lenders
and lessors of Indebtedness of the type described in clause (a) in support of
such Indebtedness), and (c) the aggregate amount drawn under all letters of
credit (including the Letters of Credit) for which ASC or any Restricted
Subsidiary is the account party and for which the issuer of such letters of
credit has not been reimbursed on that date.

                  "Consolidated Interest Expense" shall mean the cash portion of
consolidated interest expense (including commitment and letter of credit fees)
on Consolidated Funded Debt, as determined in accordance with GAAP.

                  "Consolidated Net Income": for any period, the consolidated
net income (or loss) of ASC and its Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of ASC or is merged into or consolidated with ASC or any of
its Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary of ASC) in which ASC or any of its Restricted Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by ASC or such Restricted Subsidiary in the form of dividends or
similar distributions and (c) the undistributed earnings of any Subsidiary of
ASC to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any Contractual Obligation (other than under any Loan Document) or Requirement
of Law applicable to such Subsidiary.
<PAGE>
                                                                               6

                  "Consolidated Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.

                  "Continuing Directors" means, as of any date of determination,
any member of the board of directors of ASC who (i) was a member of the board of
directors on the date of this Agreement or (ii) was nominated for election to
the board of directors by the Permitted Holders or with the approval of at least
two-thirds of the Continuing Directors who were members of the board of
directors at the time of such nomination or election.

                  "Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

                  "Control Investment Affiliate": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.

                  "CSFB":  as defined in the preamble hereto.

                  "Default":  any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.

                  "Desktop Appraisal": an appraisal of the fair market value of
property and business, performed by an Independent Appraiser without conducting
a site visit to such property or business, using the evaluation methodology
outlined in the definition of "Appraised Value".

                  "Disposition": with respect to any property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof. The terms "Dispose" and "Disposed of" shall have correlative meanings.

                  "Dollars" and "$": dollars in lawful currency of the United
States.

                  "Domestic Subsidiary":  any Subsidiary of ASC organized under
the laws of any jurisdiction within the United States.

                  "Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, codes, decrees, requirements of any
Governmental Authority or other Requirements of Law (including common law)
regulating or imposing liability or standards of conduct concerning protection
of human health, natural resources or the environment, as have been, are now or
at any time hereafter are in effect.

                  "Environmental Permits": any and all permits, licenses,
approvals, registrations, notifications, exemptions and any other authorization
required under any Environmental Law, including for the avoidance of doubt the
Forest Service Permits.
<PAGE>
                                                                               7

                  "ERISA":  the Employee Retirement Income Security Act of 1974,
as amended from time to time.

                  "Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves) under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.

                  "Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum determined
on the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period appearing on
Page 3750 of the Telerate screen as of 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period. In the event that such rate
does not appear on Page 3750 of the Telerate screen (or otherwise on such
screen), the "Eurodollar Base Rate" shall be determined by reference to such
other comparable publicly available service for displaying eurodollar rates as
may be reasonably selected by the Administrative Agent.

                  "Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.

                  "Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the nearest
1/100th of 1%):

                              Eurodollar Base Rate
            --------------------------------------------------------
                    1.00 - Eurocurrency Reserve Requirements

                  "Eurodollar Tranche": the collective reference to Eurodollar
Loans under a particular Facility the then current Interest Periods with respect
to all of which begin on the same date and end on the same later date (whether
or not such Loans shall originally have been made on the same day).

                  "Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.

                  "Excess Cash Flow": for any fiscal year of ASC, the excess, if
any, of (a) the sum, without duplication, of (i) Consolidated Net Income for
such fiscal year, (ii) the amount of all non-cash charges (including
depreciation and amortization) deducted in arriving at such Consolidated Net
Income (in each case, determined in accordance with GAAP), (iii) decreases in
Consolidated Working Capital for such fiscal year, and (iv) the aggregate net
amount of non-cash loss on the Disposition of property by ASC and its Restricted
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income over (b) the sum, without duplication, of (i) the amount
of all non-cash credits included in arriving at such Consolidated Net Income
(determined in accordance with GAAP), (ii) the aggregate amount actually paid by
ASC and its Restricted Subsidiaries (in cash during such fiscal year on account
of Capital Expenditures (excluding the principal amount of Indebtedness incurred
in connection with such expenditures and any such expenditures financed with the
proceeds of any Reinvestment Deferred Amount), (iii) the aggregate amount of all
prepayments of Revolving Loans during such fiscal year to the extent
accompanying permanent optional reductions of the Revolving Commitments and all

<PAGE>
                                                                               8

optional prepayments of the Term Loans and the Second Lien Term Loans during
such fiscal year, (iv) the aggregate amount of all regularly scheduled principal
payments of Funded Debt (including the Term Loans and the Second Lien Term
Loans) of ASC and its Restricted Subsidiaries made during such fiscal year
(other than in respect of any revolving credit facility to the extent there is
not an equivalent permanent reduction in commitments thereunder), (v) increases
in Consolidated Working Capital for such fiscal year, (vi) the aggregate net
amount of non-cash gain on the Disposition of property by ASC and its Restricted
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent included in arriving at such
Consolidated Net Income and (vii) non-recurring expenses incurred in connection
with the consummation of the transactions contemplated by the Loan Documents and
the Second Lien Loan Documents, the repayment of obligations outstanding under
the Existing Credit Agreement, the tender offer and consent solicitation with
respect to, and the redemption of, the Senior Subordinated Notes and the
exchange of the Series A Preferred Stock for, and the issuance of, the New
Junior Subordinated Notes, to the extent deducted in arriving at such
Consolidated Net Income.

                  "Excluded Subsidiaries": (i) GSRP, Community Water Company,
Ski Insurance Company, Uplands Water Company, Walton Pond Apartments, Inc. and
their Subsidiaries, (ii) any Subsidiary formed for the purpose of receiving
Investments as described in clause (j) of Section 7.8 and (iii) the Subsidiaries
of ASC designated as Excluded Immaterial Subsidiaries on Schedule 1.1C or
designated by ASC and approved in writing by the Administrative Agent after the
date hereof as Excluded Immaterial Subsidiaries (the Subsidiaries described in
this clause (iii), the "Excluded Immaterial Subsidiaries"), provided that any
such Subsidiary shall cease to be an Excluded Immaterial Subsidiary if it at any
time holds assets with a fair market value of greater than $1,000,000.

                  "Existing Credit Agreement": the Credit Agreement, dated as of
February 14, 2003, among ASC and the other borrowers party thereto, the lenders
party thereto, and GECC, as administrative agent, as amended, supplemented or
otherwise modified to the date hereof, together with all instruments and other
agreements entered into by ASC or its Subsidiaries in connection therewith.

                  "Existing Issuing Lender":  GECC, as issuer of the Existing
Letters of Credit.

                  "Existing Junior Subordinated Note Indenture": the Indenture,
dated as of August 31, 2001, between ASC and Oak Hill Capital Partners, L.P., as
Trustee, as amended, supplemented or otherwise modified to the date hereof,
together with all instruments and other agreements entered into by ASC or its
Subsidiaries in connection therewith.

                  "Existing Junior Subordinated Notes":  the subordinated notes
of ASC issued pursuant to the Junior Subordinated Note Indenture.

                  "Existing Letters of Credit":  the letters of credit issued by
GECC under the Existing Credit Agreement which are outstanding as of the date
hereof and listed on Schedule 1.1F.

                  "Facility": each of (a) the Term Commitments and the Term
Loans made thereunder (the "Term Facility"), (b) the Revolving A Commitments and
the extensions of credit made thereunder (the "Revolving A Facility") and (c)
the Revolving B Commitments and the extensions of credit made thereunder (the
"Revolving B Facility").

                  "Federal Funds Effective Rate": for any day, the rate equal to
the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day,
the average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
<PAGE>
                                                                               9

                  "Fee Letter":  as defined in Section 10.5.

                  "Fee Payment Date":  (a) the 15th day of each April, July,
October and January and (b) the last day of the Revolving Commitment Period.

                  "Foreign Subsidiary":  any Subsidiary of ASC that is not a
Domestic Subsidiary.

                  "Forest Service Permits": any and all permits, licenses,
approvals, registrations, notifications, exemptions and any other authorization,
including for the avoidance of doubt Forest Service Term Special Use Permits,
that are issued by, filed with, or granted, as the case may be, by the Forest
Service of the United States Department of Agriculture or by any similar state
agency, with respect to any use of or conduct concerning any land or resources
owned, managed, or under the jurisdiction of such agency.

                  "Forest Service Term Special Use Permits": the Term Special
Use Permits issued by the Forest Service of the United States Department of
Agriculture and listed on Schedule 4.24.

                  "Fully Satisfied" shall mean, with respect to the Obligations
as of any date, that, on or before such date, (a) the principal of and interest
accrued to such date on such Obligations (other than the aggregate undrawn
amount of Letters of Credit then outstanding) shall have been paid in full in
cash, (b) all fees, expenses and other amounts then due and payable which
constituted Obligations (other than the aggregate undrawn amount of Letters of
Credit then outstanding) shall have been paid in full in cash, (c) the
Commitments shall have expired or irrevocably been terminated and (d) the
aggregate undrawn amount of Letters of Credit then outstanding shall have been
Fully Secured.

                  "Fully Secured" shall mean, with respect to the aggregate
undrawn amount of Letters of Credit outstanding as of any date, that, on or
before such date, such amount shall have been secured by the grant to the
Issuing Lender by the Borrowers of a first priority, perfected security interest
in, and Lien on, (a) cash or Cash Equivalents in an amount at least equal to the
aggregate undrawn amount of the Letters of Credit being secured on such date or
(b) other collateral security which is acceptable to such Issuing Lender and the
Administrative Agent.

                  "Funded Debt": as to any Person, all Indebtedness of such
Person that matures more than one year from the date of its creation or matures
within one year from such date but is renewable or extendible, at the option of
such Person, to a date more than one year from such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such date, including
all current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from the date of
its creation and, in the case of the Borrowers, Indebtedness in respect of the
Loans.

                  "Funding Office": the office of the Administrative Agent
specified in Section 10.2 or such other office as may be specified from time to
time by the Administrative Agent as its funding office by written notice to the
Borrower and the Lenders.

                  "GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of Section 7.1,
GAAP shall be determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the most recent
audited financial statements referred to in Section 4.1. In the event that any
"Accounting Change" (as defined below) shall occur and such change results in a
change in the method of calculation of financial covenants, standards or terms
in this Agreement, then ASC and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
reflect equitably such Accounting Changes with the desired result that the
criteria for evaluating ASC's financial condition shall be the same after such
Accounting Changes as if such Accounting Changes had not been made. Until such

<PAGE>
                                                                              10

time as such an amendment shall have been executed and delivered by the
Borrowers, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. "Accounting
Changes" refers to changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.

                  "GECC":  as defined in the preamble hereto.

                  "Governmental Authority": any nation or government, any state
or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

                  "Group Members":  the collective reference to ASC and its
Subsidiaries.

                  "GSRP":  Grand Summit Resort Properties, Inc., a Maine
corporation.

                  "Guarantee and Collateral Agreement":  the Guarantee and
Collateral Agreement to be executed and delivered by ASC and each Subsidiary
Borrower, substantially in the form of Exhibit A.

                  "Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation, including a reimbursement, counterindemnity or similar
obligation, of the guaranteeing person that guarantees or in effect guarantees,
or which is given to induce the creation of a separate obligation by another
Person (including any bank under any letter of credit) that guarantees or in
effect guarantees, any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by ASC in good faith.

<PAGE>
                                                                              11

                  "Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current trade payables incurred in the ordinary course of
such Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) all obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any Capital Stock of such Person, (h) all Guarantee
Obligations of such Person in respect of obligations of the kind referred to in
clauses (a) through (g) above, (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be secured by) any
Lien on property (including accounts and contract rights) owned by such Person,
whether or not such Person has assumed or become liable for the payment of such
obligation, and (j) for the purposes of Section 8(e) only, all obligations of
such Person in respect of Swap Agreements. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness expressly
provide that such Person is not liable therefor.

                  "Independent Appraiser": an independent appraiser with
appraisal experience in the ski resort business who is not employed by ASC, the
Administrative Agent or any Lender or any of their respective Affiliates and who
has been approved by the Administrative Agent; provided, however, that no
independent appraiser shall be prevented from acting as an "Independent
Appraiser" or be prevented from rendering services to ASC unrelated to those
arising under this Agreement solely because such independent appraiser was used
or will be used by ASC in the future for services unrelated to those arising
under this Agreement, so long as ASC has given the Administrative Agent notice
of such unrelated services performed or to be performed by such Independent
Appraiser.

                  "Insolvency":  with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.

                  "Insolvent":  pertaining to a condition of Insolvency.

                  "Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including copyrights, copyright licenses, patents, patent licenses, trademarks,
trademark licenses, technology, know-how and processes, and all rights to sue at
law or in equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.

                  "Intercreditor Agreement": the Intercreditor Agreement to be
executed and delivered by the Borrowers, the Collateral Agent and the Second
Lien Collateral Agent (as defined in such Agreement), substantially in the form
of Exhibit I.

                  "Interest Payment Date": (a) as to any ABR Loan, the 15th day
of each April, July, October and January to occur while such Loan is outstanding
and the final maturity date of such Loan, (b) as to any Eurodollar Loan having
an Interest Period of three months or less, the last day of such Interest
Period, (c) as to any Eurodollar Loan having an Interest Period longer than
three months, each day that is three months, or a whole multiple thereof, after
the first day of such Interest Period, and the last day of such Interest Period
and (d) as to any Loan, the date of any repayment or prepayment made in respect
thereof.

<PAGE>
                                                                              12

                  "Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six (or, if
agreed to by all Lenders under the relevant Facility, nine or twelve) months
thereafter, as selected by ASC in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the then current Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six (or, if
agreed to by all Lenders under the relevant Facility, nine or twelve) months
thereafter, as selected by ASC by irrevocable notice to the Administrative Agent
not later than 11:00 A.M., New York City time, on the date that is three
Business Days prior to the last day of the then current Interest Period
applicable thereto; provided that, all of the foregoing provisions relating to
Interest Periods are subject to the following:

     (i)  if any  Interest  Period  would  otherwise  end on a day that is not a
          Business  Day,  such  Interest  Period  shall be  extended to the next
          succeeding  Business Day unless the result of such extension  would be
          to carry such  Interest  Period into another  calendar  month in which
          event such  Interest  Period  shall end on the  immediately  preceding
          Business Day;

     (ii) ASC may not select an Interest Period under a particular Facility that
          would extend beyond the Revolving  Termination Date or beyond the date
          final payment is due on the Term Loans;

     (iii)any  Interest  Period  that  begins  on  the  last  Business  Day of a
          calendar  month  (or  on a day  for  which  there  is  no  numerically
          corresponding  day in the calendar  month at the end of such  Interest
          Period) shall end on the last Business Day of a calendar month;

     (iv) ASC shall  select  Interest  Periods so as not to require a payment or
          prepayment of any Eurodollar  Loan during an Interest  Period for such
          Loan; and

     (v)  the first Interest  Period  selected for any Loan shall be required to
          end on the last  Business  Day of a  calendar  month  and ASC shall be
          permitted  to  select  an  initial  Interest  Period  of less than one
          month's duration in order to satisfy this requirement.

                  "Investments":  as defined in Section 7.8.

                  "Issuing Lender": GECC or any agent acting on its behalf, or
any other Revolving B Lender willing to act as such which is designated by the
Administrative Agent after the date hereof with, so long as no Event of Default
is continuing, the consent of the Borrower (such consent not to be unreasonably
withheld), in each case in its capacity as issuer of any Letter of Credit.

                  "Junior Subordinated Notes":  the Existing Junior Subordinated
Notes and the New Junior Subordinated Notes.

                  "Junior Subordinated Note Indentures":  the Existing Junior
Subordinated Note Indenture and the New Junior Subordinated Note Indenture.

                  "L/C Commitment":  $6,000,000.
<PAGE>
                                                                              13

                  "L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters of
Credit that have not then been reimbursed pursuant to Section 3.5.

                  "L/C Participants": the collective reference to all the
Revolving B Lenders other than the Issuing Lender.

                  "Landlord Certificate":  as defined in Section 5.1(k)(vi).

                  "Lenders":  as defined in the preamble hereto; provided that
unless the context otherwise requires, each reference herein to the Lenders
shall be deemed to include any Conduit Lender.

                  "Letters of Credit":  as defined in Section 3.1(a).

                  "Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).

                  "Loan": any loan made by any Lender pursuant to this Agreement

                  "Loan Documents":  this Agreement, the Security Documents, the
Notes, the Intercreditor Agreement and any amendment, waiver, supplement or
other modification to any of the foregoing.

                  "LTM EBITDA":  as defined in Section 7.1(a).

                  "Major Casualty Event":  a Recovery Event yielding gross
proceeds to ASC or any of its Restricted Subsidiaries in excess of $15,000,000.

                  "Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of the Term
Loans or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of either Revolving Facility,
prior to any termination of the Revolving Commitments under such Revolving
Facility, the holders of more than 50% of the Total Revolving Commitments under
such Revolving Facility).

                  "Material Adverse Effect": a material adverse effect on (a)
the business, property, operations, condition (financial or otherwise) or
prospects of the Borrowers taken as a whole, (b) the validity or enforceability
of this Agreement or any of the other Loan Documents or the rights or remedies
of the Administrative Agent or the Lenders hereunder or thereunder or (c) the
value of the Collateral.

                  "Material Asset Sale": any Disposition of property or series
of related Dispositions of property (excluding any such Disposition permitted by
clause (a), (b), (c), (d), (f) or (h) of Section 7.5) that yields gross proceeds
to ASC or any of its Restricted Subsidiaries in excess of $500,000, provided
that a disposition of Non-Operating Assets permitted by clause (e) of Section
7.5 shall constitute a Material Asset Sale solely to the extent that permission
to make such Disposition is granted pursuant to the proviso to such clause (e).

                  "Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea formaldehyde insulation, asbestos, molds,
pollutants, contaminants, radioactivity, and any substances of any kind, in each
case to the extent regulated pursuant to or that could give rise to liability
under any Environmental Law.
<PAGE>
                                                                              14

                  "Mortgaged Properties": the real properties listed on Part A
of Schedule 1.1B, as to which (or as to interests in which) the Collateral Agent
for the benefit of the Administrative Agent and the Lenders shall be granted a
Lien pursuant to the Mortgages as required by Section 4.19(b).

                  "Mortgages": each of the mortgages and deeds of trust made by
any Borrower in favor of, or for the benefit of, the Collateral Agent for the
benefit of the Administrative Agent and the Lenders, substantially in the form
of Exhibit D (with such changes thereto as shall be advisable under the law of
the jurisdiction in which such mortgage or deed of trust is to be recorded).

                  "Multiemployer Plan":  a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.

                  "Net Cash Proceeds": (a) in connection with any Material Asset
Sale (including a Material Asset Sale made in compliance with the proviso to
clause (e) of Section 7.5) or other Disposition or any Recovery Event, the
proceeds thereof in the form of cash (including any such proceeds received by
way of a permitted deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise, but
only as and when received) of such Disposition or Recovery Event (including any
cash received upon the Disposition of any permitted non-cash consideration
received upon such Disposition), net of reasonable attorneys' fees, accountants'
fees, investment banking fees, amounts required to be applied to the repayment
of Indebtedness secured by a Lien expressly permitted hereunder on any asset
that is the subject of such Disposition or Recovery Event (other than any Lien
pursuant to a Security Document) and other reasonable and customary fees and
expenses actually incurred in connection therewith and net of taxes paid or
reasonably estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements) and (b) in connection with any issuance or sale of Capital Stock
or any incurrence of Indebtedness, the cash proceeds received from such issuance
or incurrence, net of reasonable attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and other reasonable
and customary fees and expenses actually incurred in connection therewith.

                  "New Junior Subordinated Notes": junior subordinated notes of
ASC having terms consistent with those set forth on Schedule 1.1E and otherwise
containing terms reasonably satisfactory to the Agents.

                  "New Junior Subordinated Note Indenture":  the indenture
entered into by ASC in connection with the New Junior Subordinated Notes.

                  "Non-Excluded Taxes":  as defined in Section 2.17(a).

                  "Non-Operating Assets": (a) unused or obsolete inventory and
equipment, (b) real property specified on Part I of Schedule 1.1G which is not
currently used or contemplated to be used in ski resort operations of a Borrower
(or, to the extent so used, for which a Borrower retains a perpetual easement
for such use), (c) the assets comprising the Haystack ski area, (d) any asset
consisting of commercial or base lodge space generally used for administrative,
retail, or skier service purposes (but not consisting of Ski Terrain) and
specified on Part II of Schedule 1.1G which ASC certifies to the Administrative
Agent at the time of sale (i) will be replaced within twelve (12) months from
the sale date (x) by ASC with the applicable Non-Operating Asset Sale Proceeds,
or (y) by the purchaser as a contractual obligation under the applicable sale
documents, and (ii) may be temporarily unavailable during the period from the
sale date to the time of completion of the replacement thereof pursuant to
clause (i) above, or temporarily replaced during such period, without materially
affecting ASC's operations or access to any portion of the Ski Terrain and (e)
other assets of the Borrowers not listed on Schedule 1.1G which otherwise meet
the requirements of clause (b) or (d) of this definition, provided that the
sales price of such assets does not exceed $100,000 for any such asset
individually or $500,000 in the aggregate in any fiscal year. It is agreed that
Schedule 1.1G shall not be effective (and thus sales of Non-Operating Assets
specified on such Schedule shall not be permitted) until the date such schedule
is approved by the Required Lenders in the form in which originally delivered or

<PAGE>
                                                                              15


as subsequently revised as requested by the Required Lenders (and the Required
Lenders shall use commercially reasonable efforts to approve such schedule on or
prior to the 30th day after the Closing Date).

                  "Non-Operating Asset Sale Proceeds": as defined in
Section 7.1(a).

                  "Non-U.S. Lender": as defined in Section 2.17(d).

                  "Notes":  the collective reference to any promissory note
evidencing Loans.

                  "Oak Hill":  Oak Hill Capital Partners, L.P., a Delaware
limited partnership, Oak Hill Securities Fund, L.P., a Delaware limited
partnership, and their respective Control Investment Affiliates.

                  "Obligations": with respect to any Borrower, the unpaid
principal of and interest on (including interest accruing after the maturity of
the Loans and Reimbursement Obligations and interest accruing after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to such Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans and all other obligations and liabilities of such Borrower to the
Administrative Agent or to any Lender (or, in the case of Specified Swap
Agreements, any affiliate of any Lender), whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, this Agreement, any other
Loan Document, the Letters of Credit, any Specified Swap Agreement or any other
document made, delivered or given in connection herewith or therewith, whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by such
Borrower pursuant hereto) or otherwise. Unless otherwise specified,
"Obligations" shall refer to the Obligations of all Borrowers.

                  "Operating Assets":  assets of ASC and its Restricted
Subsidiaries other than Non-Operating Assets.

                  "Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.

                  "Participant":  as defined in Section 10.6(c).

                  "PBGC":  the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.

                  "Permitted Holders" means Oak Hill.
<PAGE>
                                                                              16


                  "Person":  an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

                  "Phantom Stock Plan":  the American Skiing Company Phantom
Equity Plan dated as of December 1, 2001, as amended, supplemented or otherwise
modified from time to time.

                  "Plan": at a particular time, any employee benefit plan that
is subject to ERISA and in respect of which any Borrower or Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.

                  "Preferred Stock": ASC's 8.5% Series B Convertible
Participating Preferred Stock, ASC's 12% Series C-1 Convertible Participating
Preferred Stock, ASC's 15% Series C-2 Preferred Stock and ASC's Series D
Participating Preferred Stock, collectively.

                  "Prepayment Amount":  as defined in Section 2.9(d).

                  "Prime Rate": for any day, a floating rate equal to the rate
publicly quoted from time to time by The Wall Street Journal as the "base rate
on corporate loans posted by at least 75% of the nation's 30 largest banks" (or,
if The Wall Street Journal ceases quoting a base rate of the type described, the
highest per annum rate of interest published by the Federal Reserve Board in
Federal Reserve statistical release H.15 (519) entitled "Selected Interest
Rates" as the Bank prime loan rate or its equivalent).

                  "Projections":  as defined in Section 6.2(b).

                  "Purchase Money Indebtedness":  as defined in Section 7.2(c).

                  "Recovery Event":  any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding relating
to any asset of ASC or any Restricted Subsidiary.

                  "Register":  as defined in Section 10.6(b).

                  "Regulation U": Regulation U of the Board as in effect from
time to time.

                  "Reimbursement Obligation": the obligation of each Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.

                  "Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by any Borrower in
connection therewith that are not applied to prepay Loans pursuant to Section
2.9(b) as a result of the delivery of a Reinvestment Notice.

                  "Reinvestment Event":  any Recovery Event in respect of which
ASC has delivered a Reinvestment Notice.

                  "Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and is
continuing and that ASC (directly or indirectly through a Subsidiary) intends
and expects to use all or a specified portion of the Net Cash Proceeds of a
Recovery Event to acquire or repair assets useful in its business (such business
as permitted pursuant to Section 7.15).
<PAGE>
                                                                              17


                  "Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date (in
accordance with Section 7.7, as applicable) to acquire or repair assets useful
in the Borrowers' business (such business as permitted pursuant to Section
7.15).

                  "Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring one year after such
Reinvestment Event and (b) the date on which ASC shall have determined not to,
or shall have otherwise ceased to, acquire or repair assets useful in ASC's
business (such business as permitted pursuant to Section 7.15) with all or any
portion of the relevant Reinvestment Deferred Amount.

                  "Reorganization":  with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.

                  "Reportable Event":  any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. ss. 4043.

                  "Required Lenders": at any time, the holders of more than 50%
of (a) until the Closing Date, the Commitments then in effect and (b)
thereafter, the sum of (i) the aggregate unpaid principal amount of the Term
Loans then outstanding and (ii) the Total Revolving Commitments then in effect
or, if the Revolving Commitments have been terminated, the Total Revolving
Extensions of Credit then outstanding.

                  "Required Value": at any time, the product of (A) the
Aggregate Facilities Amount at such time and (B) 2.0.

                  "Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

                  "Responsible Officer": the chief executive officer, president
or chief financial officer of ASC, but in any event, with respect to financial
matters, the chief financial officer of ASC.

                  "Restricted Payments":  as defined in Section 7.6.

                  "Restricted Subsidiary":  each Subsidiary of ASC other than
any Excluded Subsidiary.

                  "Revolving A Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving A Loans in an aggregate principal amount
not to exceed the amount set forth under the heading "Revolving A Commitment"
opposite such Lender's name on Schedule 1.1A or in the Assignment and Assumption
pursuant to which such Lender became a party hereto, as the same may be changed
from time to time pursuant to the terms hereof. The original amount of the Total
Revolving A Commitments is $20,000,000.

                  "Revolving A Facility":  as defined in the definition of
"Facility" in this Section 1.1.

                  "Revolving A Lender":  each Lender that has a Revolving A
Commitment or that holds Revolving A Loans.
<PAGE>
                                                                              18


                  "Revolving A Loans":  as defined in Section 2.4(a).

                  "Revolving A Percentage": as to any Revolving A Lender at any
time, the percentage which such Lender's Revolving A Commitment then constitutes
of the Total Revolving A Commitments. If the Revolving A Commitments have
expired or terminated, the Revolving A Percentages shall be determined based
upon the Revolving A Commitments most recently in effect, giving effect to any
assignments.

                  "Revolving B Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving B Loans and participate in Letters of
Credit in an aggregate principal and/or face amount not to exceed the amount set
forth under the heading "Revolving B Commitment" opposite such Lender's name on
Schedule 1.1A or in the Assignment and Assumption pursuant to which such Lender
became a party hereto, as the same may be changed from time to time pursuant to
the terms hereof. The original amount of the Total Revolving B Commitments is
$20,000,000.

                  "Revolving B Facility":  as defined in the definition of
"Facility" in this Section 1.1.

                  "Revolving B Lender":  each Lender that has a Revolving B
Commitment or that holds Revolving B Loans.

                  "Revolving B Loans":  as defined in Section 2.4(b).

                  "Revolving B Percentage": as to any Revolving B Lender at any
time, the percentage which such Lender's Revolving B Commitment then constitutes
of the Total Revolving B Commitments. If the Revolving B Commitments have
expired or terminated, the Revolving B Percentages shall be determined based
upon the Revolving B Commitments most recently in effect, giving effect to any
assignments.

                  "Revolving Commitment": as to any Revolving Lender, its
Revolving A Commitment or its Revolving B Commitment.

                  "Revolving Commitment Period":  the period from and including
the Closing Date to the Revolving Termination Date.

                  "Revolving Extensions of Credit": as to any Revolving Lender
at any time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Loans held by such Lender then outstanding and (b) in the case of
any Revolving Lender which is a Revolving B Lender, such Revolving B Lender's
Revolving B Percentage of the L/C Obligations then outstanding.

                  "Revolving Facilities": the Revolving A Facility and the
Revolving B Facility, collectively.

                  "Revolving Lenders": Revolving A Lenders and Revolving B
Lenders.

                  "Revolving Loans":  the Revolving A Loans and the Revolving B
Loans.

                  "Revolving Percentage": as to any Revolving Lender at any
time, the percentage which such Lender's Revolving Commitment then constitutes
of the Total Revolving Commitments. If the Revolving Commitments have expired or
terminated, the Revolving Percentages shall be determined based upon the
Revolving Commitments most recently in effect, giving effect to any assignments.
<PAGE>
                                                                              19


                  "Revolving Termination Date":  November 24, 2010.

                  "SEC":  the Securities and Exchange Commission, any successor
thereto and any analogous Governmental Authority.

                  "Second Lien Collateral Agent":  as defined in the
Intercreditor Agreement.

                  "Second Lien Credit Agreement": the Second Lien Credit
Agreement, dated as of the date hereof, among ASC, the lenders party thereto,
GECC, as administrative agent and collateral agent, and the other agents party
thereto, as such agreement may be refinanced, extended, renewed, restructured or
replaced in accordance with the terms hereof and of the Intercreditor Agreement.

                  "Second Lien Debt": (a) the term loans made pursuant to the
Second Lien Credit Agreement (the "Second Lien Term Loans") and (b) Guarantee
Obligations of the Borrowers in respect thereof.

                  "Second Lien Loan Documents": any agreement or instrument
(including any credit agreement, guarantee, security agreement or mortgage)
entered into by Borrower or any of its Subsidiaries in connection with the
Second Lien Debt.

                  "Second Lien Term Loans":  as defined in the definition of the
term "Second Lien Debt" in this Section 1.1.

                  "Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages, the Intercreditor Agreement
and all other security documents hereafter delivered to the Administrative Agent
granting a Lien on any property of any Person to secure the obligations and
liabilities of any Borrower under any Loan Document.

                  "Senior Subordinated Note Indenture": the Indenture, dated as
of June 28, 1996, between ASC and U.S. Trust Company of New York, as Trustee, as
amended, supplemented or otherwise modified to the date hereof, together with
all instruments and other agreements entered into by ASC or its Subsidiaries in
connection therewith.

                  "Senior Subordinated Notes":  the subordinated notes of ASC
issued pursuant to the Senior Subordinated Note Indenture.

                  "Senior Subordinated Notes Reserve": an amount which shall be
initially equal to $1,500,000 on the Closing Date and which shall be reduced
from time to time (but in no event to an amount less than zero) upon receipt by
the Administrative Agent of a certificate from a Responsible Officer of ASC
stating that ASC has made a payment in the amount specified therein to purchase
or redeem Senior Subordinated Notes when required by the redemption provisions
of the Senior Subordinated Note Indenture (which reduction shall be in the
amount so specified) and which shall be reduced to zero upon receipt by the
Administrative Agent of a certificate from a Responsible Officer of ASC stating
that all obligations of ASC and its Subsidiaries in respect of the Senior
Subordinated Notes have been paid in full.

                  "Series A Preferred Stock":  the 10.5% Repriced Convertible
Exchangeable Preferred Stock of ASC.

                  "Single Employer Plan":  any Plan that is subject to Title IV
of ERISA, but that is not a Multiemployer Plan.
<PAGE>
                                                                              20


                  "Ski Resort Properties": the ski resort properties of the
Borrowers constituting part of the Collateral, known as Attitash Bear Peak, The
Canyons, Killington/Pico, Mount Snow, Steamboat, Sugarloaf/USA and Sunday River,
in each case excluding any Non-Operating Assets.

                  "Ski Terrain": property used (or which is to be developed to
be used) to conduct snow skiing operations, including terrain used for skiing
and terrain used for supporting ski lift operations.

                  "Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person, as of such date, exceeds the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person, as of such date, is greater than
the amount that will be required to pay the probable liability of such Person on
its debts as such debts become absolute and matured, (c) such Person does not
have, as of such date, an unreasonably small amount of capital with which to
conduct its business, and (d) such Person is able to pay its debts as they
mature. For purposes of this definition, (i) "debt" means liability on a
"claim", and (ii) "claim" means any (x) right to payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (y) right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured or unmatured,
disputed, undisputed, secured or unsecured.

                  "Specified Swap Agreement": any Swap Agreement entered into by
any Borrower and any Lender or affiliate thereof in respect of interest rates.

                  "Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person, but with respect to any
Borrower, excluding non-profit homeowners associations and resort village
management associations controlled directly or indirectly by such Borrower.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
ASC.

                  "Subsidiary Borrower": collectively, (i) the Restricted
Subsidiaries of ASC as of the date hereof and (ii) each new Restricted
Subsidiary of ASC that becomes a party to this Agreement in accordance with
Section 6.9(c).

                  "Supermajority Lenders": at any time, the holders of more than
67% of (a) until the Closing Date, the Commitments then in effect and (b)
thereafter, the sum of (i) the aggregate unpaid principal amount of the Term
Loans then outstanding and (ii) the Total Revolving Commitments then in effect
or, if the Revolving Commitments have been terminated, the Total Revolving
Extensions of Credit then outstanding.

                  "Swap Agreement": any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or any of its Subsidiaries shall be a "Swap
Agreement".
<PAGE>
                                                                              21


                  "Syndication Agent":  as defined in the preamble hereto.

                  "Term Commitment": as to any Lender, the obligation of such
Lender, if any, to make a Term Loan to ASC in a principal amount not to exceed
the amount set forth under the heading "Term Commitment" opposite such Lender's
name on Schedule 1.1A. The original aggregate amount of the Term Commitments is
$85,000,000.

                  "Term Facility":  as defined in the definition of "Facility"
in this Section 1.1.

                  "Term Lender":  each Lender that has a Term Commitment or that
holds a Term Loan.

                  "Term Loan":  as defined in Section 2.1.

                  "Term Loan Final Maturity Date":  November 24, 2010.

                  "Term Percentage": as to any Term Lender at any time, the
percentage which such Lender's Term Commitment then constitutes of the aggregate
Term Commitments (or, at any time after the Closing Date, the percentage which
the aggregate principal amount of such Lender's Term Loans then outstanding
constitutes of the aggregate principal amount of the Term Loans then
outstanding).

                  "Total Revolving A Commitments":  at any time, the aggregate
amount of the Revolving A Commitments then in effect.

                  "Total Revolving A Extensions of Credit":  at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving A
Lenders outstanding at such time.

                  "Total Revolving B Commitments":  at any time, the aggregate
amount of the Revolving B Commitments then in effect.

                  "Total Revolving B Extensions of Credit":  at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving B
Lenders outstanding at such time.

                  "Total Revolving Commitments":  at any time, the Total
Revolving A Commitments and the Total Revolving B Commitments.

                  "Total Revolving Extensions of Credit": at any time, the Total
Revolving A Extensions of Credit and the Total Revolving B Extensions of Credit.

                  "Transferee":  any Assignee or Participant.

                  "Triple Peaks Reserve": an amount which shall be initially
equal to $2,140,000 on the Closing Date and which shall be reduced from time to
time (but in no event to an amount less than zero) upon receipt by the
Administrative Agent of a certificate from a Responsible Officer of ASC stating
that ASC has made a payment in the amount specified therein to Triple Peaks LLC
in accordance with the Full Release and Settlement Agreement, dated as of July
8, 2004, among Triple Peaks LLC, Steamboat LLC, ASC, Steamboat Ski and Resort
Corporation, Walton Pond Apartments, Inc., and ASCRP (which reduction shall be
in the amount so specified) and which shall be reduced to zero upon receipt by
the Administrative Agent of a certificate from a Responsible Officer of ASC
stating that all obligations of ASC and its Subsidiaries under such Settlement
Agreement have been paid in full.
<PAGE>
                                                                              22


                  "Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.

                  "United States":  the United States of America.

                  "Water Rights":  rights to use water from surface sources,
groundwater, or other water sources, whether such rights are conferred by
statute, contract, common law or otherwise.

                  "Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.

     1.2. Other Definitional Provisions.  (a)Unless otherwise specified therein,
all terms defined in this Agreement shall have the defined meanings when used in
the other Loan Documents or any  certificate or other document made or delivered
pursuant hereto or thereto.

     (b) As used herein and in the other Loan Documents,  and any certificate or
other  document made or delivered  pursuant  hereto or thereto,  (i)  accounting
terms relating to any Borrower not defined in Section 1.1 and  accounting  terms
partly  defined  in Section  1.1,  to the  extent  not  defined,  shall have the
respective  meanings  given  to them  under  GAAP,  (ii)  the  words  "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation",  (iii) the word "incur"  shall be construed to mean incur,  create,
issue,  assume,  become  liable in  respect of or suffer to exist (and the words
"incurred" and  "incurrence"  shall have correlative  meanings),  (iv) the words
"asset" and  "property"  shall be  construed to have the same meaning and effect
and to refer to any and all  tangible  and  intangible  assets  and  properties,
including  cash,  Capital  Stock,  securities,   revenues,  accounts,  leasehold
interests  and  contract  rights,  and (v)  references  to  agreements  or other
Contractual Obligations shall, unless otherwise specified, be deemed to refer to
such agreements or Contractual Obligations as amended, supplemented, restated or
otherwise modified from time to time.

     (c) The words  "hereof",  "herein"  and  "hereunder"  and words of  similar
import,  when used in this  Agreement,  shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.

(d) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

                  SECTION II. AMOUNT AND TERMS OF COMMITMENTS

     2.1. Term  Commitments.  Subject to the terms and conditions  hereof,  each
Term Lender  severally  agrees to make a term loan (a "Term Loan") to ASC on the
Closing  Date in an amount  equal to the amount of the Term  Commitment  of such
Lender.  The Term Loans may from time to time be Eurodollar  Loans or ABR Loans,
as  determined  by the  Borrower  and  notified to the  Administrative  Agent in
accordance with Sections 2.2 and 2.10.

     2.2.  Procedure for Term Loan Borrowing.  ASC shall give the Administrative
Agent  irrevocable  notice (which notice must be received by the  Administrative
Agent prior to 10:00 A.M.,  New York City time,  one  Business  Day prior to the
anticipated  Closing Date)  requesting that the Term Lenders make the Term Loans
on the Closing Date. The Term Loans made on the Closing Date shall  initially be
ABR Loans and, unless otherwise agreed by the  Administrative  Agent in its sole
discretion, no Term Loan may be converted into or continued as a Eurodollar Loan
having an  Interest  Period in excess of one month  prior to the date that is 60
days after the Closing  Date.  Upon  receipt of such  notice the  Administrative
Agent shall promptly notify each Term Lender thereof. Not later than 12:00 Noon,
New York City time, on the Closing Date each Term Lender shall make available to
the  Administrative  Agent  at the  Funding  Office  an  amount  in  immediately

<PAGE>
                                                                              23


available  funds  equal  to the  Term  Loan  to be  made  by  such  Lender.  The
Administrative Agent shall credit the account of ASC on the books of such office
of the Administrative  Agent with the aggregate of the amounts made available to
the Administrative Agent by the Term Lenders in immediately available funds.

     2.3.  Repayment of Term Loans. The Term Loan of each Lender shall mature in
twenty-four consecutive quarterly  installments,  the first 23 of which shall be
paid on the 15th day of each  January,  April,  July and October,  commencing on
January  15,  2005,  and the last of which  shall be paid on the Term Loan Final
Maturity  Date,  each of which shall be in an amount equal to such Lender's Term
Percentage multiplied by the amount set forth below opposite such installment:

         Installment                                  Principal Amount
           1 - 23                                        $  212,500
 Term Loan Final Maturity Date                          $80,112,500


     2.4. Revolving Commitments. (a) Subject to the terms and conditions hereof,
each  Revolving  A  Lender  severally  agrees  to make  revolving  credit  loans
("Revolving  A Loans")  to ASC and the  Subsidiary  Borrowers  from time to time
during the Revolving  Commitment Period in an aggregate  principal amount at any
one time outstanding which does not exceed such Lender's Revolving A Commitment.
During the  Revolving  Commitment  Period each  Borrower may use the Revolving A
Commitments  by borrowing  and  prepaying  the  Revolving A Loans in whole or in
part, and reborrowing,  all in accordance with the terms and conditions  hereof.
The Revolving A Loans may from time to time be Eurodollar Loans or ABR Loans, as
determined  by  the  Borrower  and  notified  to  the  Administrative  Agent  in
accordance with Sections 2.5 and 2.10.

     (b) Subject to the terms and  conditions  hereof,  each  Revolving B Lender
severally agrees to make revolving credit loans ("Revolving B Loans") to ASC and
the  Subsidiary  Borrowers  from time to time  during the  Revolving  Commitment
Period in an aggregate  principal amount at any one time outstanding which, when
added to such  Lender's  Revolving  B  Percentage  of the L/C  Obligations  then
outstanding,  does not exceed an amount  equal to the  excess,  if any,  of such
Lender's  Revolving B Commitment  over the sum of (i) such Lender's  Revolving B
Percentage  of the Triple Peaks  Reserve then in effect  (after giving effect to
any concurrent  reductions thereto resulting from the concurrent use of proceeds
of the Revolving B Loans being borrowed at such time to make a payment to Triple
Peaks LLC pursuant to the Triple Peaks Settlement Agreement) and (ii) the Senior
Subordinated Notes Reserve then in effect (after giving effect to any concurrent
reductions  thereto  resulting  from  the  concurrent  use  of  proceeds  of the
Revolving B Loans  being  borrowed at such time to make a payment to the holders
of  the  Senior   Subordinated   Notes  to  repurchase  or  redeem  such  Senior
Subordinated  Notes when  required by the  redemption  provisions  of the Senior
Subordinated  Note  Indenture).  During the  Revolving  Commitment  Period  each
Borrower  may use the  Revolving  B  Commitments  by  borrowing,  prepaying  the
Revolving B Loans in whole or in part, and  reborrowing,  all in accordance with
the terms and conditions  hereof. The Revolving B Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.5 and 2.10.
<PAGE>
                                                                              24


     (c)  Borrowings  under the  Revolving  Facilities  shall be  limited to the
extent necessary to comply with the provisions of Section 7.1(c).

     (d) Each  Borrower  shall  repay  all  outstanding  Revolving  Loans on the
Revolving Termination Date.

     2.5.  Procedure  for  Revolving  Loan  Borrowing.  ASC and  the  Subsidiary
Borrowers  may borrow  under the  Revolving  Commitments  during  the  Revolving
Commitment  Period  on any  Business  Day,  provided  that  ASC  shall  give the
Administrative  Agent  irrevocable  notice (which notice must be received by the
Administrative Agent prior to 11:00 A.M., New York City time, (a) three Business
Days prior to the requested  Borrowing Date, in the case of Eurodollar Loans, or
(b) on the requested  Borrowing  Date, in the case of ABR loans)  (provided that
any such notice of a borrowing of Loans under the Revolving  Facility to finance
payments  required by Section  3.5 may be given not later than 10:00  A.M.,  New
York City time, on the date of the proposed  borrowing),  specifying (i) whether
such  borrowing is to be made under the Revolving A Commitments or the Revolving
B Commitments or both (and if to be made under both the respective amounts to be
borrowed under each), (ii) the amount and Type of Revolving Loans to be borrowed
by each applicable  Borrower,  (ii) the requested  Borrowing Date,  (iii) in the
case of Eurodollar  Loans, the respective  amounts of each such Type of Loan and
the respective lengths of the initial Interest Periods therefor,  (iv) if all or
any portion of the proceeds of the  requested  borrowing  will be used by ASC to
make a payment to Triple Peaks LLC under the Triple Peaks Settlement  Agreement,
the amount to be so used (which request shall  constitute a covenant by ASC that
it will so use such  amount for such  purpose)  and (v) if all or any portion of
the proceeds of the requested borrowing will be used by ASC to make a payment to
purchase or redeem Senior  Subordinated  Notes when  required by the  redemption
provisions of the Senior  Subordinated Note Indenture,  the amount to be so used
(which  request  shall  constitute  a  covenant  by ASC that it will so use such
amount for such  purpose).  Any  Revolving  Loans made on the Closing Date shall
initially be ABR Loans, and, unless otherwise agreed by the Administrative Agent
in its sole  discretion,  no Revolving  Loan may be made as,  converted  into or
continued as a Eurodollar  Loan having an Interest Period in excess of one month
prior to the date that is 60 days after the Closing Date;  and provided  further
that  borrowings  under the  Revolving  Commitments  (other than  borrowings  to
finance  payments  required by Section 3.5) may be made not more frequently than
once per day. Each borrowing of Eurodollar Loans under the Revolving Commitments
shall be in an amount  equal to  $2,500,000  or a whole  multiple of $500,000 in
excess  thereof.  Upon receipt of any such notice from ASC,  the  Administrative
Agent shall promptly  notify each  applicable  Revolving  Lender  thereof.  Each
applicable  Revolving  Lender will make the amount of its pro rata share of each
borrowing available to the Administrative  Agent for the account of the relevant
Borrower(s)  at the Funding  Office prior to 12:00 Noon,  New York City time, on
the  Borrowing  Date  requested  by ASC in funds  immediately  available  to the
Administrative Agent. Such borrowing will then be made available to the relevant
Borrower(s)  the aggregate of the amounts made  available to the  Administrative
Agent  by  such  Revolving  Lenders  and  in  like  funds  as  received  by  the
Administrative Agent.

     2.6.  Commitment  Fees,  etc.  (a)  The  Borrowers  agree  to  pay  to  the
Administrative  Agent for the account of each Revolving  Lender a commitment fee
for the  period  from  and  including  the  date  hereof  to the last day of the
Revolving Commitment Period,  computed at the Commitment Fee Rate on the average
daily amount of the  Available  Revolving  Commitment  of such Lender during the
period  for which  payment  is made,  payable  quarterly  in arrears on each Fee
Payment Date, commencing on the first such date to occur after the date hereof.

     (b) The Borrowers agree to pay to the Agents the fees in the amounts and on
the dates as set forth in any fee agreements  among the Borrowers and the Agents
and to perform any other obligations contained therein.
<PAGE>
                                                                              25


     2.7. Termination or Reduction of Revolving Commitments.  ASC shall have the
right,  upon not less than three  Business  Days'  notice to the  Administrative
Agent,  to terminate the Revolving  Commitments or, from time to time, to reduce
permanently  the  amount of the  Revolving  Commitments;  provided  that no such
termination or permanent  reduction of Revolving  Commitments shall be permitted
if, after giving effect thereto and to any  prepayments  of the Revolving  Loans
made on the effective date thereof,  the Total  Revolving A Extensions of Credit
would  exceed  the  Total  Revolving  A  Commitments  or the Total  Revolving  B
Extensions of Credit would exceed the Total  Revolving B  Commitments.  Any such
permanent  reduction  shall be in an amount equal to $500,000,  or a multiple of
$100,000 in excess thereof,  shall be made pro rata to the Revolving Commitments
of all Revolving  Lenders (unless the Majority  Facility Lenders with respect to
the  Revolving A Facility or the Revolving B Facility  agree,  at the request of
the  Borrower,  that  such  reduction  need  not be  applied  to such  Revolving
Facility,  in which case such  reduction  may be made pro rata to the  Revolving
Commitments of all Revolving Lenders in the other Revolving  Facility) and shall
reduce permanently the Revolving Commitments then in effect.

     2.8. Optional  Prepayments.  The Borrowers may at any time and from time to
time prepay the Loans,  in whole or in part,  without  premium or penalty,  upon
irrevocable  notice delivered by ASC to the  Administrative  Agent no later than
11:00 A.M., New York City time,  three Business Days prior thereto,  in the case
of  Eurodollar  Loans,  and no later than 11:00  A.M.,  New York City time,  one
Business Day prior thereto, in the case of ABR Loans, which notice shall specify
the date and amount of  prepayment  and whether the  prepayment is of Eurodollar
Loans or ABR Loans;  provided,  that if a Eurodollar  Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrowers
shall also pay any amounts owing  pursuant to Section 2.18.  Upon receipt of any
such notice the Administrative  Agent shall promptly notify each relevant Lender
thereof.  If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with accrued interest
to such date on the amount prepaid.  Partial  prepayments of Term Loans shall be
in an aggregate  principal amount of $500,000 or a whole multiple of $100,000 in
excess thereof.

     2.9. Mandatory Prepayments.

     (a) If any Capital Stock or Indebtedness shall be issued or incurred by any
Borrower  (excluding any Indebtedness  incurred in accordance with Section 7.2),
an amount  equal to 50% (in the case of  Capital  Stock) or 100% (in the case of
Indebtedness)  of the Net Cash Proceeds  thereof shall be offered on the date of
such  issuance or  incurrence  to the Term Lenders as a  prepayment  of the Term
Loans in accordance with Section 2.9(d) and (e).

     (b) If on any date ASC or any Restricted  Subsidiary shall receive Net Cash
Proceeds  from any  Material  Asset Sale or any  Recovery  Event then,  unless a
Reinvestment  Notice  shall be delivered in respect  thereof  (provided  that no
Reinvestment  Notice may be delivered  in respect of the Net Cash  Proceeds of a
Material Asset Sale described in the proviso to clause (e) of Section 7.5), such
Net Cash  Proceeds  shall be applied as a  prepayment  of the Term Loans and, if
required,  a  reduction  of the  Revolving  Commitments  as set forth in Section
2.9(e);  provided,  that,  notwithstanding  the foregoing,  on each Reinvestment
Prepayment  Date,  an amount equal to the  Reinvestment  Prepayment  Amount with
respect to the relevant  Reinvestment  Event shall be applied as a prepayment of
the Term Loans and, if required,  a reduction of the  Revolving  Commitments  in
accordance with Section 2.9(e).

     (c) If, for any fiscal year of ASC,  commencing with the fiscal year ending
July 31,  2005,  there shall be Excess  Cash Flow,  ASC shall,  on the  relevant
Excess Cash Flow Application  Date, offer to the Term Lenders an amount equal to
50% of such Excess Cash Flow as a  prepayment  of the Term Loans as set forth in
Section 2.9(d) and (e). Such prepayment shall be made on a date (an "Excess Cash
Flow Application Date") no later than December 31 of the subsequent fiscal year.
<PAGE>
                                                                              26


     (d) With respect to the amount of any mandatory  prepayment  offer required
pursuant  to  paragraph  (a)  or (c) of  this  Section  2.9  (such  amount,  the
"Prepayment  Amount"),  ASC  will,  on or prior to the  date  specified  in this
Section 2.9 for such offer,  give the  Administrative  Agent  telephonic  notice
(promptly confirmed in writing) requesting that the Administrative Agent prepare
and provide to each Term Lender a notice (each, a "Prepayment Option Notice") in
accordance  with the  following  sentence.  As  promptly  as  practicable  after
receiving such notice from ASC, the Administrative  Agent will send to each Term
Lender a Prepayment  Option Notice,  which shall be in the form of Exhibit I and
shall include (i) an offer (the  "Offer") by ASC to prepay on the date (each,  a
"Mandatory  Prepayment  Date")  that is 10  Business  Days after the date of the
Prepayment Option Notice,  the Term Loans of such Term Lender by an amount equal
to the  portion  of the  Prepayment  Amount  indicated  in  such  Term  Lender's
Prepayment  Option  Notice as being  allocable to such Term  Lender's Term Loans
(with  such  portion  allocable  to such  Term  Lender  being  equal to its Term
Percentage  of  the  Prepayment  Amount)  and  (ii)  an  additional  offer  (the
"Additional  Offer")  to  prepay  on the  Mandatory  Prepayment  Date,  from the
portion, if any, of the Prepayment Amount allocable to Term Lenders which do not
accept the Offer,  the Term Loans of such Term Lender by an amount  equal to the
lesser of (x) such Term Lender's  then  outstanding  Term Loan (after  deducting
therefrom  the amount  allocable to the  prepayment  thereof as a result of such
Term  Lender's  acceptance of the Offer) and (y) a maximum  amount  specified by
such Term Lender in its  acceptance of the  Additional  Offer.  Each Term Lender
shall accept or reject such Offer and such  Additional  Offer in accordance with
the terms of the  Prepayment  Option  Notice  received  by it (and a failure  to
respond to such Prepayment Option Notice within the required  timeframe shall be
deemed  to be a  rejection  of  such  Offer  and  Additional  Offer),  it  being
understood that no Term Lender may accept the Additional Offer made to it unless
it accepts the Offer made to it. On the Mandatory Prepayment Date, ASC shall pay
to the  Administrative  Agent,  for the  benefit of each Term  Lender  which has
accepted the Offer, (i) the prepayment  amount specified in the Offer made to it
and (ii) if such Term Lender has also accepted the Additional  Offer,  such Term
Lender's ratable share (based upon the respective  amounts accepted by each Term
Lender  accepting the Additional  Offer made to it) of the amounts  specified in
the Offers made to Term  Lenders,  if any which  reject the Offers made to them.
Any portion of the  Prepayment  Amount that is not  accepted for  prepayment  as
described in clause (ii) of the immediately  preceding  sentence will be offered
to  prepay  the  Second  Lien  Term  Loans to the  extent  required  by,  and in
accordance with the terms of, the Second Lien Loan Documents.

     (e) Amounts to be applied in connection  with  prepayments  and  Commitment
reductions  made pursuant to paragraph (b) of this Section 2.9 shall be applied,
first, to the prepayment of the Term Loans and,  second,  to reduce  permanently
the  Revolving  Commitments.  Amounts to be applied to  prepayments  pursuant to
paragraphs  (a) and (c) of this  Section  2.9 shall not be applied to reduce the
Revolving Commitments; provided that outstanding Revolving Loans shall be repaid
without any reduction of the Revolving  Commitments to the extent of any portion
of any  Prepayment  Amount  which  is not  used to  prepay  the  Term  Loans  in
accordance  with Section 2.9(d) or the Second Lien Term Loans in accordance with
the mandatory prepayment provisions of the Second Lien Loan Documents.  Any such
reduction of the  Revolving  Commitments  as described in the first  sentence of
this paragraph (e) shall be accompanied by prepayment of the Revolving  Loans to
the extent,  if any,  that the Total  Revolving  Extensions of Credit exceed the
amount of the Total  Revolving  Commitments as so reduced,  provided that if the
aggregate  principal amount of Revolving Loans then outstanding is less than the
amount of such excess  (because L/C Obligations  constitute a portion  thereof),
the  Borrowers  shall,  to the  extent of the  balance  of such  excess,  return
outstanding  Letters  of  Credit  and/or  deposit  an  amount  in cash in a cash
collateral account  established with the Collateral Agent for the benefit of the
Administrative Agent and the Lenders on terms and conditions satisfactory to the
Collateral Agent. The application of any prepayment pursuant to this Section 2.9
shall be made, first to ABR Loans and, second, to Eurodollar Loans, in each case
in  accordance  with Section  2.15(b).  Each  prepayment of the Loans under this
Section  2.9  shall  be  accompanied  by  accrued  interest  to the date of such
prepayment on the principal amount prepaid.
<PAGE>
                                                                              27


     (f) In addition,  prepayments of Revolving Loans shall be required on April
1 of each year to the extent  necessary to comply with the provisions of Section
7.1(c).

     2.10. Conversion and Continuation Options. (a) The Borrowers may elect from
time to time  to  convert  Eurodollar  Loans  to ABR  Loans  by ASC  giving  the
Administrative  Agent prior  irrevocable  notice of such  election no later than
11:00 A.M.,  New York City time,  on the  Business  Day  preceding  the proposed
conversion  date. The Borrowers may elect from time to time to convert ABR Loans
to Eurodollar  Loans by ASC giving the  Administrative  Agent prior  irrevocable
notice of such  election  no later than 11:00 A.M.,  New York City time,  on the
third  Business Day preceding the proposed  conversion  date (which notice shall
specify the length of the initial  Interest Period  therefor),  provided that no
ABR Loan under a particular  Facility may be  converted  into a Eurodollar  Loan
when any Event of Default has occurred and is continuing and the  Administrative
Agent  or the  Majority  Facility  Lenders  in  respect  of such  Facility  have
determined in its or their sole discretion not to permit such  conversion.  Upon
receipt of any such notice the  Administrative  Agent shall promptly notify each
relevant Lender thereof.

     (b) Any Eurodollar Loan may be continued as such upon the expiration of the
then  current  Interest  Period with respect  thereto by ASC giving  irrevocable
notice to the Administrative Agent, in accordance with the applicable provisions
of the term  "Interest  Period"  set forth in Section  1.1, of the length of the
next Interest Period to be applicable to such Loan,  provided that no Eurodollar
Loan under a  particular  Facility  may be  continued  as such when any Event of
Default has occurred and is continuing and the  Administrative  Agent has or the
Majority  Facility Lenders in respect of such Facility have determined in its or
their sole discretion not to permit such continuations,  and provided,  further,
that if ASC shall fail to give any required  notice as  described  above in this
paragraph or if such  continuation  is not  permitted  pursuant to the preceding
proviso such Loans shall be automatically converted to ABR Loans on the last day
of such then  expiring  Interest  Period.  Upon  receipt of any such  notice the
Administrative Agent shall promptly notify each relevant Lender thereof.

     2.11. Limitations on Eurodollar Tranches.  Notwithstanding  anything to the
contrary in this Agreement,  all borrowings,  conversions and  continuations  of
Eurodollar Loans and all selections of Interest Periods shall be in such amounts
and be made pursuant to such elections so that, (a) after giving effect thereto,
the  aggregate   principal  amount  of  the  Eurodollar  Loans  comprising  each
Eurodollar  Tranche shall be equal to $2,500,000 or a whole multiple of $500,000
in  excess  thereof  and (b) no more  than  ten  Eurodollar  Tranches  shall  be
outstanding at any one time.

     2.12. Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per  annum  equal  to the  Eurodollar  Rate  determined  for  such  day plus the
Applicable Margin.

     (b) Each ABR Loan shall bear  interest at a rate per annum equal to the ABR
plus the Applicable Margin.

     (c) At the  option  of,  with  respect to either  Revolving  Facility,  the
Majority  Facility  Lenders  with  respect to such  Revolving  Facility or, with
respect to the Term Facility,  the Majority Facility Lenders with respect to the
Term Facility (which option shall be deemed exercised  automatically if an Event
of Default  specified in clause (i) or (ii) of paragraph (f) of Section VIII has
occurred with respect to any Borrower),  if any Event of Default shall occur and
be continuing,  all outstanding Loans and Reimbursement  Obligations (whether or
not  overdue)  under the relevant  Facility or  Facilities  shall bear  interest
during  such  continuance  at a rate per  annum  equal to (x) in the case of the
Loans,  the rate that would  otherwise  be  applicable  thereto  pursuant to the
foregoing provisions of this Section plus 2% or (y) in the case of Reimbursement
Obligations,  the rate  applicable  to ABR Loans under the  Revolving B Facility
plus 2%.
<PAGE>
                                                                              28


     (d) Interest  shall be payable in arrears on each  Interest  Payment  Date,
provided that interest  accruing pursuant to paragraph (c) of this Section shall
be payable from time to time on demand.

     2.13.  Computation  of Interest  and Fees.  (a)  Interest  and fees payable
pursuant  hereto  shall be  calculated  on the basis of a  360-day  year for the
actual days elapsed, except that, with respect to ABR Loans the rate of interest
on which is  calculated  on the basis of the Prime Rate,  the  interest  thereon
shall be  calculated  on the basis of a 365- (or  366-,  as the case may be) day
year for the actual  days  elapsed.  The  Administrative  Agent shall as soon as
practicable  notify  ASC and the  relevant  Lenders of each  determination  of a
Eurodollar  Rate.  Any change in the interest  rate on a Loan  resulting  from a
change  in  the  ABR or  the  Eurocurrency  Reserve  Requirements  shall  become
effective as of the opening of business on the day on which such change  becomes
effective.  The Administrative Agent shall as soon as practicable notify ASC and
the relevant Lenders of the effective date and the amount of each such change in
interest rate.

     (b) Each  determination  of an interest  rate by the  Administrative  Agent
pursuant to any provision of this  Agreement  shall be conclusive and binding on
each  Borrower  and  the  Lenders  in  the  absence  of  manifest   error.   The
Administrative  Agent shall,  at the request of ASC,  deliver to ASC a statement
showing the  quotations  used by the  Administrative  Agent in  determining  any
interest rate pursuant to Section 2.12(a).

     2.14.  Inability to Determine  Interest  Rate. If prior to the first day of
any Interest Period:

               (i)  the  Administrative   Agent  shall  have  determined  (which
          determination,  in the absence of manifest error,  shall be conclusive
          and  binding  upon the  Borrowers)  that,  by reason of  circumstances
          affecting the relevant  market,  adequate and reasonable  means do not
          exist for  ascertaining  the Eurodollar Rate for such Interest Period,
          or

               (ii) the Administrative Agent shall have received notice from the
          Majority Facility Lenders in respect of the relevant Facility that the
          Eurodollar  Rate  determined  or to be  determined  for such  Interest
          Period will not adequately and fairly reflect the cost to such Lenders
          (as  conclusively  certified by such Lenders) of making or maintaining
          their affected Loans during such Interest Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to ASC
and the relevant Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans under the relevant Facility requested to be made
on the first day of such Interest Period shall be made as ABR Loans, (y) any
Loans under the relevant Facility that were to have been converted on the first
day of such Interest Period to Eurodollar Loans shall be continued as ABR Loans
and (z) any outstanding Eurodollar Loans under the relevant Facility shall be
converted, on the last day of the then-current Interest Period, to ABR Loans.
Until such notice has been withdrawn by the Administrative Agent (and the
Administrative Agent hereby agrees that it shall promptly withdraw such notice
when the circumstances giving rise to such notice are no longer continuing), no
further Eurodollar Loans under the relevant Facility shall be made or continued
as such, nor shall any Borrower have the right to convert Loans under the
relevant Facility to Eurodollar Loans.

     2.15. Pro Rata  Treatment and Payments.  (a) Each borrowing by any Borrower
from the applicable Lenders  hereunder,  each payment by any Borrower on account
of any commitment fee and any reduction of the  Commitments of the Lenders shall
be made pro rata  according  to the  respective  Term  Percentages,  Revolving A
Percentages  or  Revolving B  Percentages,  as the case may be, of the  relevant
Lenders.
<PAGE>
                                                                              29


     (b) Each payment  (including each prepayment) by any Borrower on account of
principal of and interest on the Term Loans shall be made pro rata  according to
the  respective  Term  Percentages  of the Term  Lenders  (except  as  otherwise
provided in Section 2.9(d)). The amount of each principal prepayment of the Term
Loans  shall be applied to reduce the then  remaining  installments  of the Term
Loans,  pro rata based upon the  respective  then  remaining  principal  amounts
thereof. Amounts prepaid on account of the Term Loans may not be reborrowed.

     (c) Each payment  (including each prepayment) by any Borrower on account of
principal  of and  interest  on the  Revolving  Loans  shall  be made  pro  rata
according to the  respective  Revolving  Percentages  of the  Revolving  Lenders
(subject to the  parenthetical  clause  included in the last sentence of Section
2.7).

     (d)  All  payments  (including  prepayments)  to be  made  by any  Borrower
hereunder,  whether on account of principal,  interest,  fees or otherwise,  are
absolute and  unconditional,  shall be made without  setoff or  counterclaim  or
rescission or defense for any reason and shall be made prior to 12:00 Noon,  New
York City time,  on the due date thereof to the  Administrative  Agent,  for the
account of the Lenders,  at the Funding  Office,  in Dollars and in  immediately
available funds. The Administrative  Agent shall distribute such payments to the
applicable  Lenders  promptly  upon  receipt in like funds as  received.  If any
payment  hereunder  (other than in respect of Eurodollar  Loans) becomes due and
payable on a day other than a Business  Day,  such payment  shall be extended to
the next  succeeding  Business Day. If any payment on a Eurodollar  Loan becomes
due and payable on a day other than a Business  Day, the maturity  thereof shall
be  extended  to the next  succeeding  Business  Day  unless  the result of such
extension would be to extend such payment into another  calendar month, in which
event such payment shall be made on the immediately  preceding  Business Day. In
the case of any extension of any payment of principal  pursuant to the preceding
two sentences,  interest  thereon shall be payable at the then  applicable  rate
during such extension.

     (e) Unless the Administrative  Agent shall have been notified in writing by
any Lender  prior to a borrowing  that such Lender will not make the amount that
would  constitute  its share of such borrowing  available to the  Administrative
Agent,  the  Administrative  Agent may assume  that such  Lender is making  such
amount available to the Administrative  Agent, and the Administrative Agent may,
in reliance upon such  assumption,  make available to the applicable  Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative  Agent, on demand, such amount with interest thereon, at a
rate equal to the Federal Funds  Effective Rate for the period until such Lender
makes  such  amount  immediately   available  to  the  Administrative  Agent.  A
certificate of the Administrative  Agent submitted to any Lender with respect to
any amounts  owing under this  paragraph  shall be  conclusive in the absence of
manifest  error.  If such Lender's share of such borrowing is not made available
to the Administrative Agent by such Lender within three Business Days after such
Borrowing Date, the Administrative  Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to ABR Loans under
the relevant Facility,  on demand,  from the relevant Borrower.  If such amounts
are  received by the  Administrative  Agent from the  Borrower,  the  applicable
Lender shall have no  obligations  to make payment to the  Administrative  Agent
under this clause (e), provided that this sentence shall not relieve such Lender
from any liability of such Lender to the Borrower  resulting  from any breach by
such Lender of its obligations to the Borrower under this Agreement.

     (f) Unless the Administrative  Agent shall have been notified in writing by
ASC prior to the date of any payment due to be made by a Borrower hereunder that
such  Borrower  will not make such  payment  to the  Administrative  Agent,  the
Administrative  Agent may assume that such Borrower is making such payment,  and
the  Administrative  Agent may, but shall not be required  to, in reliance  upon
such assumption,  make available to the Lenders their respective pro rata shares
of a  corresponding  amount.  If such payment is not made to the  Administrative

<PAGE>
                                                                              30


Agent by the relevant  Borrower  within three Business Days after such due date,
the  Administrative  Agent shall be entitled  to recover,  on demand,  from each
Lender to which any amount which was made  available  pursuant to the  preceding
sentence,  such amount with interest  thereon at the rate per annum equal to the
daily average Federal Funds  Effective  Rate.  Nothing herein shall be deemed to
limit the rights of the Administrative Agent or any Lender against any Borrower.

     2.16.  Requirements  of Law.  (a) If the  adoption  of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive  (whether or not having the force of
law) from any central bank or other  Governmental  Authority made  subsequent to
the date hereof:

               (i) shall  subject  any Lender to any tax of any kind  whatsoever
          with respect to this Agreement,  any Letter of Credit, any Application
          or any Eurodollar  Loan made by it, or change the basis of taxation of
          payments to such Lender in respect  thereof  (except for  Non-Excluded
          Taxes  covered by Section  2.17 and  changes in the rate of tax on the
          overall net income of such Lender);

               (ii) shall impose, modify or hold applicable any reserve, special
          deposit,  compulsory loan or similar  requirement  against assets held
          by, deposits or other  liabilities in or for the account of, advances,
          loans or other  extensions of credit by, or any other  acquisition  of
          funds by, any office of such Lender that is not otherwise  included in
          the determination of the Eurodollar Rate; or

               (iii) shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrowers shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable as reasonably determined by
such Lender. If any Lender becomes entitled to claim any additional amounts
pursuant to this paragraph, it shall promptly notify ASC (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.

     (b) If any Lender shall have  determined that the adoption of or any change
in any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation  controlling
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental  Authority made subsequent to
the date  hereof  shall have the effect of  reducing  the rate of return on such
Lender's  or such  corporation's  capital as a  consequence  of its  obligations
hereunder  or under or in respect of any Letter of Credit to a level  below that
which such Lender or such corporation could have achieved but for such adoption,
change  or  compliance   (taking  into   consideration  such  Lender's  or  such
corporation's policies with respect to capital adequacy) by an amount reasonably
deemed by such Lender to be material,  then from time to time,  after submission
by such  Lender  to ASC (with a copy to the  Administrative  Agent) of a written
request therefor,  the Borrowers shall pay to such Lender such additional amount
or  amounts  as will  compensate  such  Lender  or  such  corporation  for  such
reduction.

     (c) Any such claim made under Section  2.16(a) or (b) shall be  accompanied
by a certificate  setting forth the basis of such claim in reasonable  detail. A
certificate  as to any  additional  amounts  payable  pursuant  to this  Section
submitted by any Lender to ASC (with a copy to the  Administrative  Agent) shall
be conclusive in the absence of manifest error.  Notwithstanding anything to the
contrary in this Section,  the  Borrowers  shall not be required to compensate a
Lender  pursuant to this Section for any amounts  incurred more than nine months
prior to the date that such Lender  notifies ASC of such  Lender's  intention to
claim compensation therefor;  provided that, if the circumstances giving rise to
such claim have a  retroactive  effect,  then such  nine-month  period  shall be
extended to include the period of such  retroactive  effect.  The obligations of
the Borrowers  pursuant to this Section shall  survive the  termination  of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
<PAGE>
                                                                              31


     2.17.  Taxes.  (a) All payments made by the Borrowers  under this Agreement
shall be made free and clear of, and without  deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties,  charges,  fees,  deductions or withholdings,  now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
(i) net income taxes and franchise  taxes  (imposed in lieu of net income taxes)
imposed  on the  Administrative  Agent or any Lender as a result of a present or
former  connection  between  the  Administrative  Agent or such  Lender  and the
jurisdiction of the  Governmental  Authority  imposing such tax or any political
subdivision  or  taxing  authority  thereof  or  therein  (other  than  any such
connection  arising solely from the  Administrative  Agent or such Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document) and (ii) any branch profits
taxes  imposed by the United States of America or any similar tax imposed by any
other  jurisdiction  described  in clause  (i) above.  If any such  non-excluded
taxes,  levies,  imposts,  duties,  charges,  fees,  deductions or  withholdings
("Non-Excluded  Taxes") or Other  Taxes are  required  to be  withheld  from any
amounts payable to the Administrative Agent or any Lender hereunder, the amounts
so payable to the Administrative  Agent or such Lender shall be increased to the
extent  necessary  to yield to the  Administrative  Agent or such Lender  (after
payment of all  Non-Excluded  Taxes and Other Taxes)  interest or any such other
amounts  payable  hereunder  at the rates or in the  amounts  specified  in this
Agreement, provided, however, that no Borrower shall be required to increase any
such amounts  payable to any Lender with respect to any  Non-Excluded  Taxes (i)
that are  attributable to such Lender's  failure to comply with the requirements
of  paragraph  (d) or (e) of  this  Section  or  (ii)  that  are  United  States
withholding  taxes  imposed on amounts  payable to such  Lender at the time such
Lender  becomes  a party to this  Agreement,  except  to the  extent  that  such
Lender's assignor (if any) was entitled,  at the time of assignment,  to receive
additional  amounts from the Borrowers with respect to such  Non-Excluded  Taxes
pursuant to this paragraph.

     (b) In addition,  the  Borrowers  shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

     (c)  Whenever  any  Non-Excluded  Taxes or Other  Taxes are  payable by any
Borrower,  as promptly as possible  thereafter  such Borrower  shall send to the
Administrative  Agent for its own  account or for the  account  of the  relevant
Lender,  as the case may be, a certified  copy of an original  official  receipt
received by such Borrower showing payment thereof.  If any Borrower fails to pay
any  Non-Excluded  Taxes  or Other  Taxes  when  due to the  appropriate  taxing
authority or fails to remit to the Administrative Agent the required receipts or
other  required  documentary   evidence,   the  Borrowers  shall  indemnify  the
Administrative  Agent and the Lenders  for any  incremental  taxes,  interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.

     (d) Each Lender (or Transferee)  that is not a "U.S.  Person" as defined in
Section  7701(a)(30) of the Code (a "Non-U.S.  Lender") shall deliver to ASC and
the Administrative  Agent (or, in the case of a Participant,  to the Lender from
which the related  participation shall have been purchased) two copies of either
U.S.  Internal Revenue Service Form W-8BEN or Form W-8ECI,  or, in the case of a
Non-U.S.  Lender  claiming  exemption from U.S.  federal  withholding  tax under

<PAGE>
                                                                              32


Section  871(h) or 881(c) of the Code with  respect to  payments  of  "portfolio
interest", a statement substantially in the form of Exhibit F and a Form W-8BEN,
or any subsequent versions thereof or successors thereto, properly completed and
duly executed by such Non-U.S.  Lender  claiming  complete  exemption from, or a
reduced rate of, U.S.  federal  withholding tax on all payments by the Borrowers
under this Agreement and the other Loan Documents. Such forms shall be delivered
by each  Non-U.S.  Lender  on or  before  the  date it  becomes  a party to this
Agreement  (or,  in the case of any  Participant,  on or  before  the date  such
Participant  purchases the related  participation).  In addition,  each Non-U.S.
Lender shall deliver such forms promptly upon the  obsolescence or invalidity of
any form  previously  delivered by such Non-U.S.  Lender.  Each Non-U.S.  Lender
shall  promptly  notify ASC at any time it determines  that it is no longer in a
position to provide any  previously  delivered  certificate to ASC (or any other
form of certification  adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph,  a Non-U.S.  Lender shall
not be  required  to  deliver  any form  pursuant  to this  paragraph  that such
Non-U.S. Lender is not legally able to deliver.

     (e) A Lender (or  Transferee)  that is  entitled  to an  exemption  from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
any Borrower is located,  or any treaty to which such  jurisdiction  is a party,
with respect to payments  under this  Agreement  shall  deliver to such Borrower
(with a copy to the Administrative Agent) (or, in the case of a Participant,  to
the Lender from which the related participant shall have been purchased), at the
time or times prescribed by applicable law or reasonably  requested by ASC, such
properly  completed and executed  documentation  prescribed by applicable law as
will permit such payments to be made without  withholding  or at a reduced rate,
provided that such Lender is legally  entitled to complete,  execute and deliver
such  documentation and in such Lender's judgment such completion,  execution or
submission would not materially prejudice the legal position of such Lender.

     (f) If  the  Administrative  Agent  or a  Lender  determines,  in its  sole
discretion,  that it has  received  a refund of any  Taxes or Other  Taxes as to
which it has been  indemnified  by any  Borrower  or with  respect  to which any
Borrower has paid additional amounts pursuant to this Section 2.17, it shall pay
over such refund to such Borrower (but only to the extent of indemnity  payments
made, or additional  amounts paid, by such Borrower under this Section 2.17 with
respect to the Taxes or Other  Taxes  giving  rise to such  refund),  net of all
out-of-pocket  expenses of the  Administrative  Agent or such Lender and without
interest  (other than any interest paid by the relevant  Governmental  Authority
with respect to such refund);  provided, that such Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
such Borrower  (plus any  penalties,  interest or other  charges  imposed by the
relevant  Governmental  Authority) to the Administrative Agent or such Lender in
the event the  Administrative  Agent or such  Lender is  required  to repay such
refund to such  Governmental  Authority.  This Section shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information  relating to its taxes which it deems confidential) to
any Borrower or any other Person.

     (g) The  agreements in this Section shall survive the  termination  of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

     2.18.  Indemnity.  The Borrowers agree to indemnify each Lender for, and to
hold each Lender harmless from, any loss or expense that such Lender may sustain
or incur as a  consequence  of (a) default by any Borrower in making a borrowing
of,  conversion into or  continuation of Eurodollar  Loans after ASC has given a
notice  requesting the same in accordance with the provisions of this Agreement,
(b)  default by any  Borrower in making any  prepayment  of or  conversion  from
Eurodollar  Loans after ASC has given a notice  thereof in  accordance  with the
provisions  of this  Agreement or (c) the making of a prepayment  of  Eurodollar
Loans or a conversion  of  Eurodollar  Loans into ABR Loans on a day that is not
the last day of an Interest Period with respect  thereto.  Such  indemnification
may include an amount equal to the excess, if any, of (i) the amount of interest
that would  have  accrued  on the  amount so  prepaid  or  converted,  or not so
borrowed,  converted  or  continued,  for  the  period  from  the  date  of such

<PAGE>
                                                                              33


prepayment or  conversion  or of such failure to borrow,  convert or continue to
the last day of such  Interest  Period  (or, in the case of a failure to borrow,
convert or continue,  the Interest  Period that would have commenced on the date
of such failure) in each case at the applicable  rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included therein,
if any) over (ii) the  amount of  interest  (as  reasonably  determined  by such
Lender)  that would have  accrued to such Lender on such amount by placing  such
amount on deposit for a comparable  period with leading  banks in the  interbank
eurodollar  market.  A certificate  as to any amounts  payable  pursuant to this
Section  submitted  to ASC by any Lender shall be  conclusive  in the absence of
manifest  error.  This covenant shall survive the  termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.

     2.19.  Change  of  Lending  Office.  Each  Lender  agrees  that,  upon  the
occurrence  of any event giving rise to the operation of Section 2.16 or 2.17(a)
with respect to such  Lender,  it will,  if  requested  by ASC,  use  reasonable
efforts (subject to overall policy  considerations  of such Lender) to designate
another  lending  office for any Loans affected by such event with the object of
avoiding the consequences of such event; provided, that such designation is made
on terms that,  in the sole  judgment of such Lender,  cause such Lender and its
lending office(s) to suffer no economic, legal or regulatory  disadvantage,  and
provided,  further, that nothing in this Section shall affect or postpone any of
the obligations of the Borrowers or the rights of any Lender pursuant to Section
2.16 or 2.17(a).

     2.20.  Replacement of Lenders. ASC shall be permitted to replace any Lender
that (a) requests  reimbursement  for amounts owing  pursuant to Section 2.16 or
2.17(a),  (b) defaults in its  obligation  to make Loans  hereunder and does not
cure such default  within five  Business Days or (c) that has refused to consent
to any  waiver or  amendment  with  respect to any Loan  Document  that has been
consented to by the Required Lenders, with a replacement financial  institution;
provided that (i) such  replacement  does not conflict with any  Requirement  of
Law,  (ii) no Event of Default shall have occurred and be continuing at the time
of such replacement,  (iii) prior to any such replacement pursuant to clause (a)
above,  such Lender shall not have used  reasonable  efforts in accordance  with
Section 2.19 so as to eliminate the continued  need for payment of amounts owing
pursuant  to Section  2.16 or 2.17(a) and shall not have waived its right to the
payment  of such  amounts,  (iv) the  replacement  financial  institution  shall
purchase,  at par, all Loans and other amounts owing to such replaced  Lender on
or prior to the date of  replacement  (and, if such  replacement  is pursuant to
clause (c) above,  all Second  Lien Term Loans and other  amounts  owing to such
Lender on or prior to such date under the Second Lien Loan  Documents),  (v) the
Borrowers  shall be liable to such  replaced  Lender  under  Section 2.18 if any
Eurodollar  Loan owing to such replaced  Lender shall be purchased other than on
the last day of the  Interest  Period  relating  thereto,  (vi) the  replacement
financial institution,  if not a Lender, an affiliate of a Lender or an Approved
Fund, shall be reasonably  satisfactory to the  Administrative  Agent, (vii) the
replaced  Lender shall be obligated to make such  replacement in accordance with
the  provisions  of  Section  10.6  (provided  that (x) the  Borrowers  shall be
obligated to pay the registration and processing fee referred to therein and (y)
the  Administrative  Agent shall have the right for such  purpose to execute and
deliver  the  relevant  Assignment  and  Assumption  on behalf  of the  replaced
Lender),  (viii) until such time as such replacement  shall be consummated,  the
Borrowers shall pay all additional amounts (if any) required pursuant to Section
2.16 or 2.17(a),  as the case may be, and (ix) any such replacement shall not be
deemed to be a waiver of any rights that the Borrowers, the Administrative Agent
or any other Lender shall have against the replaced Lender.

                         SECTION III. LETTERS OF CREDIT

     3.1. L/C  Commitment.  (a) Prior to the Closing Date, the Existing  Issuing
Lender has  issued the  Existing  Letters  of Credit  which,  from and after the
Closing Date, shall constitute Letters of Credit hereunder. Subject to the terms

<PAGE>
                                                                              34


and conditions  hereof, the Issuing Lender, in reliance on the agreements of the
other Revolving B Lenders set forth in Section  3.4(a),  agrees to issue letters
of credit (the letters of credit  issued on and after the Closing Date  pursuant
to this Section III, together with the Existing Letters of Credit, collectively,
the  "Letters of Credit") for the account of ASC or any  Subsidiary  Borrower on
any Business Day during the Revolving  Commitment  Period in such form as may be
approved  from time to time by the  Issuing  Lender;  provided  that the Issuing
Lender shall have no  obligation  to issue any Letter of Credit if, after giving
effect to such issuance, (i) the L/C Obligations would exceed the L/C Commitment
or (ii) the  aggregate  amount of the  Available  Revolving  Commitments  of the
Revolving B Lenders  (after  subtracting  therefrom the sum of (i) the amount of
the  Triple  Peaks  Reserve  then in effect  and (ii) the  amount of the  Senior
Subordinated  Notes Reserve then in effect) would be less than zero. Each Letter
of Credit shall (i) be  denominated in Dollars and (ii) expire no later than the
earlier of (x) the first  anniversary  of its date of issuance  and (y) the date
that is five  Business Days prior to the Revolving  Termination  Date,  provided
that any  Letter of Credit  with a one-year  term may  provide  for the  renewal
thereof for additional  one-year  periods (which shall in no event extend beyond
the date referred to in clause (y) above).

     (b) The  Issuing  Lender  shall not at any time be  obligated  to issue any
Letter of Credit if such  issuance  would  conflict  with,  or cause the Issuing
Lender or any L/C  Participant  to exceed any limits  imposed by, any applicable
Requirement of Law.

     3.2. Procedure for Issuance of Letter of Credit. Any Borrower may from time
to time  request  that the  Issuing  Lender  issue a  Letter  of  Credit  by ASC
delivering to the Issuing Lender at its address for notices  specified herein an
Application  therefor,  completed to the satisfaction of the Issuing Lender, and
such other  certificates,  documents  and other  papers and  information  as the
Issuing Lender may request. Upon receipt of any Application,  the Issuing Lender
will process such Application and the  certificates,  documents and other papers
and information  delivered to it in connection  therewith in accordance with its
customary  procedures and shall  promptly  issue the Letter of Credit  requested
thereby  (but in no event  shall the  Issuing  Lender be  required  to issue any
Letter of Credit  earlier  than three  Business  Days  after its  receipt of the
Application therefor and all such other certificates, documents and other papers
and  information  relating  thereto) by issuing  the  original of such Letter of
Credit  to the  beneficiary  thereof  or as  otherwise  may be  agreed to by the
Issuing  Lender and the relevant  Borrower.  The Issuing  Lender shall furnish a
copy of such Letter of Credit to such Borrower  promptly  following the issuance
thereof. The Issuing Lender shall promptly furnish to the Administrative  Agent,
which shall in turn promptly  furnish to the Lenders,  notice of the issuance of
each Letter of Credit (including the amount thereof).

     3.3.  Fees and  Other  Charges.  (a) The  Borrowers  shall pay a fee on all
outstanding Letters of Credit at a per annum rate equal to the Applicable Margin
then in effect with respect to Eurodollar  Loans under the Revolving B Facility,
shared ratably among the Revolving B Lenders and payable quarterly in arrears on
each Fee Payment Date after the issuance date. In addition,  the Borrowers shall
pay to the Issuing  Lender for its own account a fronting fee of 0.25% per annum
on the undrawn and unexpired amount of each Letter of Credit, payable monthly in
arrears on each Fee Payment Date after the issuance date.

     (b) In addition to the foregoing fees, the Borrowers shall pay or reimburse
the  Issuing  Lender for such  normal and  customary  costs and  expenses as are
incurred or charged by the Issuing  Lender in  issuing,  negotiating,  effecting
payment under, amending or otherwise administering any Letter of Credit.

     3.4. L/C Participations. (a) The Issuing Lender irrevocably agrees to grant
and hereby grants to each L/C Participant,  and, to induce the Issuing Lender to
issue Letters of Credit,  each L/C Participant  irrevocably agrees to accept and
purchase and hereby accepts and purchases from the Issuing Lender,  on the terms
and conditions set forth below, for such L/C  Participant's own account and risk
an undivided interest equal to such L/C Participant's  Revolving B Percentage in
the Issuing Lender's  obligations and rights under and in respect of each Letter

<PAGE>
                                                                              35


of Credit and the amount of each draft paid by the  Issuing  Lender  thereunder.
Each L/C  Participant  agrees with the Issuing  Lender that,  if a draft is paid
under any Letter of Credit for which the  Issuing  Lender is not  reimbursed  in
full by the Borrowers in accordance with the terms of this  Agreement,  such L/C
Participant  shall pay to the Issuing Lender upon demand at the Issuing Lender's
address for notices  specified herein an amount equal to such L/C  Participant's
Revolving B Percentage of the amount of such draft, or any part thereof, that is
not so reimbursed. Each L/C Participant's obligation to pay such amount shall be
absolute  and  unconditional  and shall  not be  affected  by any  circumstance,
including (i) any setoff, counterclaim,  recoupment, defense or other right that
such L/C Participant  may have against the Issuing  Lender,  any Borrower or any
other Person for any reason whatsoever,  (ii) the occurrence or continuance of a
Default  or an Event of  Default  or the  failure  to  satisfy  any of the other
conditions  specified  in Section 5, (iii) any adverse  change in the  condition
(financial or otherwise) of any Borrower,  (iv) any breach of this  Agreement or
any other Loan Document by any Borrower or any other L/C  Participant or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.

     (b) If any amount required to be paid by any L/C Participant to the Issuing
Lender pursuant to Section 3.4(a) in respect of any unreimbursed  portion of any
payment  made by the  Issuing  Lender  under any Letter of Credit is paid to the
Issuing  Lender  within three  Business Days after the date such payment is due,
such L/C  Participant  shall pay to the Issuing Lender on demand an amount equal
to the product of (i) such amount,  times (ii) the daily  average  Federal Funds
Effective  Rate during the period from and  including  the date such  payment is
required  to the date on which such  payment  is  immediately  available  to the
Issuing  Lender,  times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the  denominator of which is 360. If any
such  amount  required  to be paid by any L/C  Participant  pursuant  to Section
3.4(a) is not made  available  to the  Issuing  Lender  by such L/C  Participant
within  three  Business  Days after the date such  payment is due,  the  Issuing
Lender shall be entitled to recover from such L/C Participant,  on demand,  such
amount with interest thereon calculated from such due date at the rate per annum
applicable  to the Loans under the Revolving B Facility.  A  certificate  of the
Issuing  Lender  submitted  to any L/C  Participant  with respect to any amounts
owing under this Section shall be conclusive in the absence of manifest error.

     (c) Whenever,  at any time after the Issuing  Lender has made payment under
any  Letter of Credit and has  received  from any L/C  Participant  its pro rata
share of such payment in  accordance  with Section  3.4(a),  the Issuing  Lender
receives any payment related to such Letter of Credit (whether directly from any
Borrower or otherwise,  including  proceeds of collateral applied thereto by the
Issuing  Lender),  or any payment of interest  on account  thereof,  the Issuing
Lender  will  distribute  to such L/C  Participant  its pro rata share  thereof;
provided,  however,  that in the event  that any such  payment  received  by the
Issuing Lender shall be required to be returned by the Issuing Lender,  such L/C
Participant  shall return to the Issuing Lender the portion  thereof  previously
distributed by the Issuing Lender to it.

     3.5. Reimbursement  Obligation of the Borrowers. If any draft is paid under
any Letter of Credit,  the relevant  Borrower shall reimburse the Issuing Lender
for the  amount of (a) the draft so paid and (b) any  taxes,  fees,  charges  or
other costs or expenses  incurred by the Issuing Lender in connection  with such
payment,  not later than 12:00 Noon, New York City time, on (i) the Business Day
that such Borrower  receives notice of such draft, if such notice is received on
such day prior to 10:00  A.M.,  New York City time,  or (ii) if clause (i) above
does not  apply,  the  Business  Day  immediately  following  the day that  such
Borrower  receives  such notice.  Each such payment shall be made to the Issuing
Lender  at its  address  for  notices  referred  to  herein  in  Dollars  and in
immediately  available funds. Interest shall be payable on any such amounts from
the date on which the relevant  draft is paid until  payment in full at the rate
set forth in (x) Section 2.12(b) until the Business Day next succeeding the date
of the relevant notice and (y) Section 2.12(c) thereafter.
<PAGE>
                                                                              36


     3.6. Obligations Absolute. Each Borrower's obligations under this Section 3
shall  be  absolute  and  unconditional  under  any  and all  circumstances  and
irrespective of any setoff, counterclaim or defense to payment that any Borrower
may have or have had against the Issuing Lender,  any beneficiary of a Letter of
Credit or any other Person.  Each  Borrower also agrees with the Issuing  Lender
that the  Issuing  Lender  shall not be  responsible  for,  and such  Borrower's
Reimbursement  Obligations  under  Section 3.5 shall not be affected  by,  among
other things,  the validity or genuineness  of documents or of any  endorsements
thereon,  even  though  such  documents  shall  in  fact  prove  to be  invalid,
fraudulent  or forged,  or any  dispute  between or among any  Borrower  and any
beneficiary  of any Letter of Credit or any other  party to which such Letter of
Credit may be transferred or any claims  whatsoever of any Borrower  against any
beneficiary of such Letter of Credit or any such transferee.  The Issuing Lender
shall  not  be  liable  for  any  error,  omission,  interruption  or  delay  in
transmission,   dispatch  or   delivery  of  any  message  or  advice,   however
transmitted,  in  connection  with any  Letter of  Credit,  except for errors or
omissions  found by a final and  nonappealable  decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. Each Borrower agrees that any action taken or omitted by the
Issuing  Lender under or in connection  with any Letter of Credit or the related
drafts or  documents,  if done in the  absence  of gross  negligence  or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York,  shall be binding on such Borrower and
shall not result in any liability of the Issuing Lender to such Borrower.

     3.7. Letter of Credit Payments. If any draft shall be presented for payment
under any  Letter of  Credit,  the  Issuing  Lender  shall  promptly  notify the
relevant  Borrower of the date and amount  thereof.  The  responsibility  of the
Issuing Lender to the relevant  Borrower in connection  with any draft presented
for  payment  under any  Letter of Credit  shall,  in  addition  to any  payment
obligation  expressly  provided  for in such  Letter of  Credit,  be  limited to
determining  that the  documents  (including  each draft)  delivered  under such
Letter of Credit  in  connection  with such  presentment  are  substantially  in
conformity with such Letter of Credit.

     3.8.  Applications.  To the extent that any  provision  of any  Application
related  to any Letter of Credit is  inconsistent  with the  provisions  of this
Section 3, the provisions of this Section 3 shall apply.

                   SECTION IV. REPRESENTATIONS AND WARRANTIES

     To induce  the  Administrative  Agent and the  Lenders  to enter  into this
Agreement  and to make the Loans  and issue or  participate  in the  Letters  of
Credit, ASC and each Subsidiary  Borrower hereby jointly and severally represent
and warrant to the Administrative Agent and each Lender that:

     4.1. Financial Condition. The audited consolidated balance sheets of ASC as
at July 27, 2003 and July 25, 2004, and the related  consolidated  statements of
income and of cash flows for the fiscal  years ended on such dates,  reported on
by and  accompanied by an unqualified  report from KPMG LLP,  present fairly the
consolidated  financial  condition of ASC as at such dates, and the consolidated
results of its operations and its consolidated and consolidating  cash flows for
the respective fiscal years then ended. All such financial statements, including
the related  schedules and notes thereto,  have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as approved by
the aforementioned firm of accountants and disclosed  therein).  No Borrower has
any material Guarantee  Obligations,  contingent liabilities and liabilities for
taxes,  or any  long-term  leases or unusual  forward or long-term  commitments,
including any interest rate or foreign currency swap or exchange  transaction or
other  obligation in respect of derivatives,  that are not reflected in the most
recent financial  statements referred to in this paragraph.  Except as set forth
on Schedule 4.1,  during the period from July 26, 2004 to and including the date
hereof there has been no Disposition by ASC or any Restricted  Subsidiary of any
material part of its business or property.
<PAGE>
                                                                              37


     4.2. No Change. Since July 25, 2004, there has been no development or event
that has had or could reasonably be expected to have a Material Adverse Effect.

     4.3.  Existence;  Compliance with Law. Each Borrower (a) is duly organized,
validly  existing and in good standing under the laws of the jurisdiction of its
organization,  (b) has the power and authority,  and the legal right, to own and
operate its property, to lease the property it operates as lessee and to conduct
the  business  in which it is  currently  engaged,  (c) is duly  qualified  as a
foreign  corporation  and in good standing  under the laws of each  jurisdiction
where its  ownership,  lease or  operation  of  property  or the  conduct of its
business requires such qualification,  except for any failure to be so qualified
that could not reasonably be expected to have a Material Adverse Effect, and (d)
is in  compliance  with all  Requirements  of Law except to the extent  that the
failure to comply therewith could not, in the aggregate,  reasonably be expected
to have a Material Adverse Effect.

     4.4. Power; Authorization;  Enforceable Obligations.  Each Borrower has the
power and authority,  and the legal right, to make, deliver and perform the Loan
Documents to which it is a party, to obtain  extensions of credit  hereunder and
grant the Liens  under  the  Security  Documents.  Each  Borrower  has taken all
necessary  organizational  action  to  authorize  the  execution,  delivery  and
performance  of the Loan  Documents  to which it is a party,  to  authorize  the
extensions of credit on the terms and  conditions of this Agreement and to grant
the Liens under the Security  Documents.  No consent or authorization of, filing
with, notice to or other act by or in respect of, any Governmental  Authority or
any  other  Person is  required  in  connection  with the  extensions  of credit
hereunder   or  with  the   execution,   delivery,   performance,   validity  or
enforceability  of this  Agreement  or any of the  Loan  Documents,  except  (i)
consents,  authorizations,  filings and notices described in Schedule 4.4, which
consents, authorizations, filings and notices have been obtained or made and are
in full force and effect and (ii) the  filings  and acts  referred to in Section
4.19.  Each Loan Document has been duly executed and delivered on behalf of each
Borrower party thereto. This Agreement constitutes, and each other Loan Document
upon execution will constitute,  a legal,  valid and binding  obligation of each
Borrower  party  thereto,  enforceable  against each such Borrower in accordance
with  its  terms,   except  as  enforceability  may  be  limited  by  applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general  equitable  principles
(whether enforcement is sought by proceedings in equity or at law).

     4.5.  No  Legal  Bar.  The  execution,  delivery  and  performance  of this
Agreement and the other Loan Documents,  the issuance of Letters of Credit,  the
borrowings  hereunder  and the use of the proceeds  thereof will not violate any
Requirement  of Law or any  Contractual  Obligation of any Borrower and will not
result in, or require,  the creation or  imposition  of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security Documents).
Except as  described  on Schedule  4.5,  no  Requirement  of Law or  Contractual
Obligation  applicable  to any Borrower  could  reasonably be expected to have a
Material Adverse Effect.

     4.6.  Litigation.  No litigation,  investigation or proceeding of or before
any arbitrator or Governmental  Authority is pending or, to the knowledge of any
Borrower,  threatened  by or  against  any  Borrower  or  against  any of  their
respective  properties or revenues (a) with respect to any of the Loan Documents
or any of the  transactions  contemplated  hereby or  thereby,  or (b) except as
described on Schedule 4.6, that could  reasonably be expected to have a Material
Adverse Effect.

     4.7. No Default.  Except as  described  on Schedule  4.7, no Borrower is in
default under or with respect to (a) the Junior Subordinated Notes or the Senior
Subordinated  Notes  or (b)  any of its  other  Contractual  Obligations  in any
respect  that, in the case of this clause (b),  could  reasonably be expected to
have a Material Adverse Effect.  No Default or Event of Default has occurred and
is continuing.
<PAGE>
                                                                              38


     4.8.  Ownership of Property;  Liens.  Each Borrower has title in fee simple
to, or a valid  leasehold  interest in, all its real  property,  other than real
property with respect to which a valid Forest Service  Permit is in effect,  and
good title to, or a valid  leasehold  interest in, all its other  property,  and
none of such property is subject to any Lien except as permitted by Section 7.3.

     4.9. Intellectual Property.  Each Borrower owns, or is licensed to use, all
Intellectual  Property  necessary  for the conduct of its  business as currently
conducted.  No  material  claim has been  asserted  and is pending by any Person
challenging or questioning the use of any Intellectual  Property or the validity
or effectiveness of any Intellectual Property, nor does any Borrower know of any
valid basis for any such claim,  except, in either case, to the extent that such
claim could not reasonably be expected to have a Material  Adverse  Effect.  The
use of Intellectual Property by each Borrower does not infringe on the rights of
any Person in any material respect.

     4.10.  Taxes.  Each  Borrower  has filed or caused to be filed all Federal,
state and other  material tax returns that are required to be filed and has paid
all taxes shown to be due and payable on said returns or on any assessments made
against it or any of its  property and all other  taxes,  fees or other  charges
imposed on it or any of its property by any  Governmental  Authority (other than
any the amount or validity of which are currently  being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the relevant Borrower);  no tax Lien has
been filed that is not permitted by Section 7.3(a), and, to the knowledge of any
Borrower,  as of the Closing Date, no claim is being  asserted,  with respect to
any such tax, fee or other charge.

     4.11.  Federal  Regulations.  No part of the proceeds of any Loans,  and no
other  extensions of credit  hereunder,  will be used for "buying" or "carrying"
any "margin  stock" within the  respective  meanings of each of the quoted terms
under  Regulation U as now and from time to time  hereafter in effect or for any
purpose  that  violates  the  provisions  of the  Regulations  of the Board.  If
requested by any Lender or the Administrative  Agent, each Borrower will furnish
to the Administrative  Agent and each Lender a statement to the foregoing effect
in  conformity  with  the  requirements  of FR  Form  G-3  or FR  Form  U-1,  as
applicable, referred to in Regulation U.

     4.12. Labor Matters.  Except as, in the aggregate,  could not reasonably be
expected to have a Material  Adverse  Effect:  (a) there are no strikes or other
labor  disputes  against  any  Borrower  pending  or,  to the  knowledge  of any
Borrower,  threatened;  (b) hours worked by and payment made to employees of any
Borrower have not been in violation of the Fair Labor Standards Act or any other
applicable  Requirement  of Law dealing with such matters;  and (c) all payments
due from any Borrower on account of employee  health and welfare  insurance have
been paid or accrued as a liability on the books of the relevant Borrower.

     4.13.  ERISA.  Neither  a  Reportable  Event  nor an  "accumulated  funding
deficiency"  (within  the  meaning of Section  412 of the Code or Section 302 of
ERISA) has occurred during the five-year  period prior to the date on which this
representation  is made or deemed made with  respect to any Plan,  and each Plan
has complied in all material  respects with the  applicable  provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen,  during such  five-year  period.  The
present value of all accrued  benefits under each Single Employer Plan (based on
those  assumptions  used to fund  such  Plans)  did not,  as of the last  annual
valuation date prior to the date on which this  representation is made or deemed
made,  exceed the value of the  assets of such Plan  allocable  to such  accrued
benefits by a material amount.  Neither any Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan that
has resulted or could  reasonably be expected to result in a material  liability
under ERISA, and neither any Borrower nor any Commonly  Controlled  Entity would
become  subject to any  material  liability  under ERISA if any  Borrower or any
Commonly  Controlled  Entity were to withdraw  completely from all Multiemployer
Plans as of the  valuation  date most closely  preceding  the date on which this
representation  is  made  or  deemed  made.  To  the  Borrowers'  knowledge,  no
Multiemployer Plan is in Reorganization or Insolvent.
<PAGE>
                                                                              39


     4.14.  Investment  Company  Act;  Other  Regulations.  No  Borrower  is  an
"investment  company",  or a company  "controlled"  by an "investment  company",
within  the  meaning of the  Investment  Company  Act of 1940,  as  amended.  No
Borrower  is subject to  regulation  under any  Requirement  of Law (other  than
Regulation X of the Board) that limits its ability to incur Indebtedness.

     4.15. Subsidiaries.  Except as disclosed to the Administrative Agent by ASC
in writing  from time to time after the Closing  Date,  (a)  Schedule  4.15 sets
forth the name and  jurisdiction of  incorporation of each Subsidiary and, as to
each such Subsidiary, the percentage of each class of Capital Stock owned by any
Borrower  and (b) there are no  outstanding  subscriptions,  options,  warrants,
calls,  rights or other  agreements  or  commitments  (other than stock  options
granted to employees  or  directors  and  directors'  qualifying  shares) of any
nature  relating to any Capital Stock of any Borrower,  except as created by the
Loan Documents or as described on Schedule 4.15.

     4.16.  Use of  Proceeds.  The  proceeds  of the Term Loans shall be used to
repay amounts outstanding under the Existing Credit Agreement and to purchase or
redeem  all of the  Senior  Subordinated  Notes  and to  pay  related  fees  and
expenses.  The proceeds of the  Revolving  Loans shall be used to repay  amounts
outstanding  under the  Existing  Credit  Agreement  and for  general  corporate
purposes.

     4.17.  Environmental  Matters.  Except as set forth on Schedule 4.17 or as,
individually  or in the  aggregate,  could not  reasonably be expected to have a
Material Adverse Effect:

     (a) each Borrower: (i) is in compliance with all, and has not violated any,
applicable  Environmental  Laws; (ii) holds all  Environmental  Permits (each of
which is in full force and effect) and possesses  all Water Rights  required for
any of its current or intended operations or for any property owned,  leased, or
otherwise  operated by it; (iii) is in compliance with all, and has not violated
any, of its Environmental Permits, and has not acted or failed to act in any way
that could reasonably be expected to result in a diminution of its Water Rights;
and (iv)  reasonably  believes that: each of its  Environmental  Permits will be
timely  renewed and complied  with, and that its Water Rights and its ability to
use its Water Rights as needed will be maintained,  without its annual aggregate
expenses  for same  exceeding  its  expenses for such  renewal,  compliance  and
maintenance during the fiscal year ended immediately prior to entering into this
Agreement;  any additional Environmental Permits that may be required of it will
be timely obtained and complied with,  without its annual aggregate expenses for
same exceeding its expenses for such  obtaining and complying  during the fiscal
year ended  immediately  prior to entering into this  Agreement;  and compliance
with any  Environmental  Law that is or is expected to become  applicable  to it
will be timely attained and maintained,  without its annual  aggregate  expenses
for same exceeding its expenses for such compliance during the fiscal year ended
immediately prior to entering into this Agreement;

     (b) Materials of  Environmental  Concern are not present at, on, under, in,
or about any real  property  now or  formerly  owned,  leased or operated by any
Borrower or at any other location  (including any location to which Materials of
Environmental  Concern have been sent for re-use or recycling or for  treatment,
storage,  or disposal)  which could  reasonably  be expected to (i) give rise to
liability of any Borrower  under any applicable  Environmental  Law or otherwise
result in costs to any Borrower, or (ii) interfere with any Borrower's continued
operations,  or (iii)  impair the fair  saleable  value of any of the  Mortgaged
Properties  for  continued  use as it has been used during the fiscal year ended
immediately prior to entering into this Agreement, and as planned;
<PAGE>
                                                                              40


     (c) there is no judicial, administrative, or arbitral proceeding (including
any  notice  of  violation  or  alleged  violation)  under  or  relating  to any
Environmental  Law,  Environmental  Permits,  or Water Rights:  (i) to which any
Borrower is, or to the  knowledge of any Borrower  will become,  a party that is
pending  or,  to the  knowledge  of the  Borrower,  threatened,  or  (ii) to the
knowledge of any  Borrower,  affecting or that could  reasonably  be expected to
affect any Borrower;

     (d) no Borrower has received any written request for  information,  or been
notified  that it is a  potentially  responsible  party under or relating to the
federal Comprehensive Environmental Response, Compensation, and Liability Act or
any similar Environmental Law, or with respect to any Materials of Environmental
Concern;

     (e) no Borrower has entered into or agreed to any consent decree, order, or
settlement or other agreement, nor is subject to any judgment,  decree, or order
or other agreement, in any judicial,  administrative,  arbitral, or other forum,
relating  to  compliance  with  or  liability  under  any  Environmental  Law or
Environmental Permits, or with respect to any Water Rights; and

     (f) no Borrower has assumed or  retained,  by contract or operation of law,
any liabilities of any kind,  fixed or contingent,  known or unknown,  under any
Environmental Law or with respect to any Materials of Environmental Concern.

     4.18. Accuracy of Information,  etc. No statement or information  contained
in this  Agreement,  any  other  Loan  Document,  the  Confidential  Information
Memorandum or any other  document,  certificate or statement  furnished by or on
behalf of any Borrower to the  Administrative  Agent or the  Lenders,  or any of
them, for use in connection with the transactions contemplated by this Agreement
or  the  other  Loan  Documents,  contained  as  of  the  date  such  statement,
information,  document or  certificate  was so furnished (or, in the case of the
Confidential  Information  Memorandum,  as of the date of this  Agreement),  any
untrue  statement  of a  material  fact or  omitted  to  state a  material  fact
necessary to make the statements contained herein or therein not misleading,  in
either  case  which  has not  been in the case of such  statement,  information,
document or certificate  delivered or made prior to the Closing Date  corrected,
supplemented or remedied by any subsequent statement,  information,  document or
certificate  made or  delivered  prior to the Closing  Date to the same  parties
receiving such statement,  information, document or certificate. The projections
and pro forma financial  information contained in the materials referenced above
are based upon good faith  estimates and  assumptions  believed by management of
the  Borrowers to be  reasonable  at the time made,  it being  recognized by the
Lenders that such financial information as it relates to future events is not to
be viewed as fact and that actual results  during the period or periods  covered
by such financial  information  may differ from the projected  results set forth
therein by a material amount.  As of the Closing Date, there is no fact known to
any Borrower that could reasonably be expected to have a Material Adverse Effect
that has not been expressly  disclosed herein,  in the other Loan Documents,  in
the Confidential Information Memorandum or in any other documents,  certificates
and statements  furnished to the Administrative Agent and the Lenders for use in
connection  with the  transactions  contemplated  hereby  and by the other  Loan
Documents.

     4.19.  Security  Documents.  (a) The Guarantee and Collateral  Agreement is
effective  to create in favor of the  Collateral  Agent,  for the benefit of the
Administrative  Agent and the Lenders, a legal,  valid and enforceable  security
interest in the Collateral  described therein and proceeds thereof.  In the case
of the Pledged Stock described in the Guarantee and Collateral  Agreement,  when
stock  certificates  representing  such  Pledged  Stock  are  delivered  to  the
Collateral  Agent,  together with related stock powers executed in blank, and in
the case of the other  Collateral  described  in the  Guarantee  and  Collateral
Agreement,  when financing  statements  and other filings  specified on Schedule
4.19(a) in  appropriate  form are filed in the  offices  specified  on  Schedule
4.19(a) (and, after the Closing Date, any additional filings required to be made
by the Loan  Documents  are made and the other  actions  specified  on  Schedule
4.19(a) are taken),  the Lien created by the Guarantee and Collateral  Agreement
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Borrowers in such Collateral and the proceeds thereof,
as security for the  Obligations  (as defined in the  Guarantee  and  Collateral
Agreement),  in each  case  prior  and  superior  in right to any  other  Person
(except,  in the case of Collateral other than Pledged Stock, Liens permitted by
Section 7.3).
<PAGE>
                                                                              41


     (b) Each of the Mortgages is effective to create in favor of the Collateral
Agent,  for the benefit of the  Administrative  Agent and the Lenders,  a legal,
valid and enforceable  Lien on the Mortgaged  Properties  described  therein and
proceeds  thereof,  and when the Mortgages are filed in the offices specified on
Schedule 4.19(b) (and,  after the Closing Date, any additional  filings required
to be made by the Loan Documents are made),  each such Mortgage shall constitute
a fully  perfected  Lien on, and  security  interest  in,  all right,  title and
interest of the Borrowers in the Mortgaged  Properties and the proceeds thereof,
as security for the Obligations (as defined in the relevant  Mortgage),  in each
case prior and superior in right to any other Person (except Liens  permitted by
Section 7.3).  Parts A and B of Schedule 1.1B list, as of the Closing Date, each
parcel of owned real  property  and each  leasehold  interest  in real  property
located in the United States and held by any Borrower.

     4.20. Solvency.  Each Borrower,  both before and after giving effect to the
incurrence  of all  Indebtedness  and  obligations  being  incurred  under  this
Agreement, is Solvent.

     4.21.  Senior  Indebtedness.  The  Obligations of each Borrower  constitute
"Designated  Senior Debt" of such  Borrower  under and as defined in each Junior
Subordinated Note Indenture and the Senior  Subordinated Note Indenture,  except
to the extent such  Obligations  are held by an  "Affiliate"  (as defined in the
applicable  indenture)  of ASC.  The  obligations  of each  Borrower  under  the
Guarantee and  Collateral  Agreement  constitute  "Senior Debt" of such Borrower
under and as defined in each Junior  Subordinated  Note Indenture and the Senior
Subordinated  Note Indenture,  except to the extent such Obligations are held by
an "Affiliate" (as defined in the applicable indenture) of ASC.

     4.22.  Regulation  H.  Except as set forth on  Schedule  4.22,  no Mortgage
encumbers  improved  real  property  that is  located  in an area  that has been
identified by the Secretary of Housing and Urban  Development  as an area having
special flood hazards and in which flood insurance has been made available under
the National Flood Insurance Act of 1968.

     4.23. Certain Documents. The Borrowers have delivered to the Administrative
Agent a complete and correct  copy of the Senior  Subordinated  Note  Indenture,
each Junior  Subordinated  Note  Indenture  and the Existing  Credit  Agreement,
including any amendments,  supplements or  modifications  with respect to any of
the foregoing.

     4.24.  Forest  Service Term Special Use  Permits.  The Forest  Service Term
Special Use Permits are listed on Schedule 4.24 are each held by at least one of
the  Borrowers  and  constitute  all the term special use permits  issued by the
Forest Service of the United States Department of Agriculture that are necessary
or useful for the operations of any Borrower as conducted during the fiscal year
ended  immediately  prior to entering  into this  Agreement and as planned to be
operated.

     4.25. Location. All material buildings, structures, fixtures, improvements,
and other assets that  constitute  each of the respective Ski Resort  Properties
(including the lodge buildings, ski shelters, ski lifts, ski trails, snow making
equipment,  golf courses,  parking lots, and maintenance  buildings) are located
entirely  on land  either  (i)  that is owned in fee  simple  by the  applicable
Borrower,  (ii) leased by the applicable  Borrower pursuant to a lease listed on
Part B of Schedule  1.1B,  (iii) subject to a recorded  easement in favor of the
applicable Borrower, or (iv) with respect to which a Forest Service Term Special
Use Permit is in effect.
<PAGE>
                                                                              42


     4.26.  Water Rights.  The Water Rights of the Borrowers are  sufficient for
the ongoing ski operations of the Borrowers.

     4.27.  Grand Summit Resort  Properties,  Inc. No Borrower is liable for any
Indebtedness  or other  obligations of GSRP,  nor has any Borrower  provided any
material  support for any  Indebtedness  or other  obligation of GSRP during the
past four years other than indirectly  through the making of lease payments with
respect to commercial units of GSRP leased to such Borrower.

                        SECTION V. CONDITIONS PRECEDENT

     5.1.  Conditions  to Initial  Extensions  of Credit.  The agreement of each
Lender to make the initial  extension  of credit  requested  to be made by it is
subject to the  satisfaction,  prior to or concurrently  with the making of such
extension of credit on the Closing Date, of the following conditions precedent:

          (a)  Credit  Agreement;   Guarantee  and  Collateral  Agreement.   The
     Administrative  Agent shall have received (i) this Agreement,  executed and
     delivered by the Administrative Agent, ASC, each Subsidiary Borrower listed
     on Schedule 1.1D and each initial Lender, (ii) the Guarantee and Collateral
     Agreement,  executed and delivered by ASC and each Subsidiary  Borrower and
     (iii) an Acknowledgement  and Consent in the form attached to the Guarantee
     and Collateral Agreement, executed and delivered by each Issuer (as defined
     therein), if any, that is an Excluded Subsidiary.

          (b)  Intercreditor  Agreement.  The  Administrative  Agent  shall have
     received  the  Intercreditor  Agreement,  executed  and  delivered  by each
     Borrower and the Second Lien Collateral Agent.

          (c)  Financial  Statements.   The  Lenders  shall  have  received  the
     financial  statements  and audit report  described in the first sentence of
     Section 4.1, and such  financial  statements  shall not, in the  reasonable
     judgment  of the  Lenders,  reflect  any  material  adverse  change  in the
     consolidated  financial  condition of ASC, as  reflected  in the  financial
     statements  or  projections  contained  in  the  Confidential   Information
     Memorandum.

          (d) Approvals.  All governmental and third party approvals (other than
     those  covered by Section  5.1(k)(vi))  necessary  in  connection  with the
     transactions  contemplated  hereby shall have been  obtained and be in full
     force and effect,  and all  applicable  waiting  periods shall have expired
     without any action being taken or  threatened  by any  competent  authority
     that would restrain,  prevent or otherwise impose adverse conditions on the
     financing contemplated hereby.

          (e) Lien Searches.  The  Administrative  Agent shall have received the
     results of a recent lien search in each of the  jurisdictions  where assets
     of the Borrowers are located,  and such search shall reveal no liens on any
     of the assets of the Borrowers except for Liens permitted by Section 7.3 or
     discharged  on or prior  to the  Closing  Date  pursuant  to  documentation
     satisfactory to the Administrative Agent.

          (f)   Environmental   and   Health   and   Safety   Assessments.   The
     Administrative Agent shall have received an environmental  assessment and a
     health  and  safety  assessment  by  Environ  with  respect  to ASC and its
     Subsidiaries,  and a memorandum  from Vermont counsel with respect to water
     supply  issues at Mount  Snow,  in each case in scope,  form and  substance
     reasonably satisfactory to the Administrative Agent.
<PAGE>
                                                                              43


          (g) Closing Certificate;  Certified Certificate of Incorporation; Good
     Standing  Certificates.  The Administrative Agent shall have received (i) a
     certificate of each Borrower,  dated the Closing Date, substantially in the
     form of Exhibit C, with appropriate  insertions and attachments,  including
     the  certificate  of  incorporation  of each Borrower that is a corporation
     certified by the relevant  authority of the jurisdiction of organization of
     such  Borrower,  and (ii) a long form (or short form, if such  jurisdiction
     does not issue long form) good standing  certificate for each Borrower from
     its jurisdiction of organization.

          (h) Legal Opinions.  The Administrative  Agent shall have received the
     following executed legal opinions addressed to the Administrative Agent and
     the  Lenders,  in form and  substance  satisfactory  to the  Administrative
     Agent:

               (i) the legal opinion of Paul, Weiss, Rifkind, Wharton & Garrison
          LLP, special counsel to the Borrowers; and

               (ii) the legal  opinion of local counsel to the Borrowers in each
          of Colorado,  Utah,  Vermont,  New Hampshire and Maine, and each other
          special and local  counsel as may be  required  by the  Administrative
          Agent.

     Each  such  legal  opinion  shall  cover  such  matters   incident  to  the
     transactions contemplated by this Agreement as the Administrative Agent may
     reasonably require.

          (i) Pledged Stock;  Stock Powers;  Pledged Notes. The Collateral Agent
     shall have received (i) the certificates representing the shares of Capital
     Stock pledged pursuant to the Guarantee and Collateral Agreement,  together
     with an undated stock power for each such certificate  executed in blank by
     a duly  authorized  officer of the pledgor thereof and (ii) each promissory
     note (if any) pledged to the Collateral Agent pursuant to the Guarantee and
     Collateral  Agreement  endorsed (without recourse) in blank (or accompanied
     by an executed transfer form in blank) by the pledgor thereof.

          (j) Filings,  Registrations and Recordings.  Each document  (including
     any Uniform Commercial Code financing  statement)  required by the Security
     Documents or under law or reasonably  requested by the Administrative Agent
     to be  filed,  registered  or  recorded  in order to create in favor of the
     Administrative  Agent, for the benefit of the Lenders,  a perfected Lien on
     the Collateral described therein,  prior and superior in right to any other
     Person  (other than with  respect to Liens  expressly  permitted by Section
     7.3),  shall be in proper form for filing,  registration or recordation and
     shall have been delivered to the Administrative Agent.

          (k) Mortgages, etc. (i) The Administrative Agent shall have received a
     Mortgage with respect to each Mortgaged Property, executed and delivered by
     a duly authorized officer of each party thereto.

          (ii) The Administrative Agent shall have received,  for each Mortgaged
     Property,  (a) a surveyor's  report and statement  which certifies that the
     buildings,  improvements  and other  assets of the  respective  Ski  Resort
     Properties, in each case which are referred to in Section 4.25, are located
     entirely  on land that  constitutes  the  Mortgaged  Property  or land with
     respect  to which a Forest  Service  Term  Special  Use Permit is in effect
     (including land subject to an easement in favor of a Borrower  Subsidiary),
     and (b) all compilation plans on which the foregoing  surveyors reports and
     statements are based.
<PAGE>
                                                                              44


          (iii) The Administrative  Agent shall have received in respect of each
     Mortgaged  Property a mortgagee's  title insurance  policy (or policies) or
     marked up unconditional  binder for such insurance.  Each such policy shall
     (A) be in an amount satisfactory to the Administrative Agent; (B) be issued
     at ordinary rates;  (C) insure that the Mortgage  insured thereby creates a
     valid first Lien on such  Mortgaged  Property free and clear of all defects
     and encumbrances,  except as disclosed therein; (D) name the Administrative
     Agent for the benefit of the Lenders as the insured  thereunder;  (E) be in
     the form of ALTA Loan Policy - 1970  (Amended  10/17/70 and  10/17/84)  (or
     equivalent  policies);   (F)  contain  such  endorsements  and  affirmative
     coverage  as the  Administrative  Agent may  reasonably  request and (G) be
     issued  by  title  companies   satisfactory  to  the  Administrative  Agent
     (including any such title companies acting as co-insurers or reinsurers, at
     the option of the Administrative  Agent).  The  Administrative  Agent shall
     have received  evidence  satisfactory to it that all premiums in respect of
     each such policy,  all charges for mortgage  recording tax, and all related
     expenses, if any, have been paid.

          (iv) If  requested by the  Administrative  Agent,  the  Administrative
     Agent shall have received (A) a policy of flood  insurance  that (1) covers
     any parcel of improved real property that is encumbered by any Mortgage (2)
     is written in an amount not less than the outstanding  principal  amount of
     the indebtedness  secured by such Mortgage that is reasonably  allocable to
     such real  property or the maximum limit of coverage  made  available  with
     respect  to the  particular  type of  property  under  the  National  Flood
     Insurance  Act of 1968,  whichever  is less,  and (3) has a term ending not
     later than the maturity of the  Indebtedness  secured by such  Mortgage and
     (B)  confirmation  that ASC has  received the notice  required  pursuant to
     Section 208(e)(3) of Regulation H of the Board.

          (v)  The  Administrative  Agent  shall  have  received  a copy  of all
     recorded  documents  referred to, or listed as  exceptions to title in, the
     title  policy or policies  referred to in clause  (iii) above and a copy of
     all other material documents affecting the Mortgaged Properties.

          (vi) The  Administrative  Agent shall have  received,  with respect to
     each  material  leasehold for which a Borrower is the lessee other than the
     leaseholds  listed on Schedule  5.1(k)(vi),  a certificate  executed by the
     landlord of such leasehold that includes leasehold mortgagee protection and
     estoppel provisions reasonably  satisfactory to the Administrative Agent (a
     "Landlord Certificate").

          (l) Material Agreements;  Permits and Water Rights. The Administrative
     Agent shall have  received,  and be satisfied with its review of, copies of
     (a) each agreement, instrument or other undertaking,  including all leases,
     to which each Borrower is a party and the failure to comply therewith could
     reasonably  be  expected  to  have a  Material  Adverse  Effect,  (b)  each
     governmental  permit to which any Borrower is a party,  and (c) evidence of
     all Water Rights required for any Borrower's current or intended operations
     or for any property owned, leased, or otherwise operated by any Borrower.

          (m)  Forest  Service  Permits.  The  Administrative  Agent  shall have
     received  tripartite  agreements from the United States Forest Service with
     respect to the Forest Service Term Special Use Permits,  in accordance with
     the United States Forest Service's standard form for such documents.

          (n) Second Lien Term Loans.  ASC shall have received  $105,000,000  in
     gross proceeds from the borrowing of Second Lien Term Loans.
<PAGE>
                                                                              45


          (o) Termination of Existing Credit Agreement. The Administrative Agent
     shall have received evidence  satisfactory to the Administrative Agent that
     the Existing  Credit  Agreement  shall be  simultaneously  terminated,  all
     amounts  thereunder shall be  simultaneously  paid in full and arrangements
     satisfactory  to the  Administrative  Agent  shall  have  been made for the
     termination  of  Liens  and  security   interests   granted  in  connection
     therewith.

          (p) Tender of Senior  Subordinated  Notes.  The  Administrative  Agent
     shall have  received  evidence  reasonably  satisfactory  to it that (i) at
     least  $118,500,000   aggregate  principal  amount  of  outstanding  Senior
     Subordinated Notes shall have been repurchased,  repaid or redeemed in full
     pursuant to a tender offer  therefor  made by ASC prior to the Closing Date
     and (ii) if any of the  Senior  Subordinated  Notes  shall not have been so
     repurchased,  repaid or redeemed  pursuant to such tender offer,  ASC shall
     have initiated the  procedures  specified in the Senior  Subordinated  Note
     Indenture  for  the  mandatory   redemption   of  such   remaining   Senior
     Subordinated Notes.

          (q)  Appraisals.   The   Administrative   Agent  shall  have  received
     Appraisals of Ski Resort Properties,  satisfactory in form and substance to
     the  Administrative  Agent,  demonstrating an aggregate  Appraised Value of
     such properties of at least the Required Value.

          (r) Fees. The Lenders and the Administrative Agent shall have received
     all fees  required  to be paid,  and all  expenses  required to be paid for
     which  invoices have been  presented  (including  the  reasonable  fees and
     expenses  of legal  counsel),  on or before  the  Closing  Date,  including
     pursuant to any fee letter.  All such amounts will be paid with proceeds of
     Loans  made on the  Closing  Date  and  will be  reflected  in the  funding
     instructions  given by ASC to the  Administrative  Agent on or  before  the
     Closing Date.

          (s) Solvency  Analysis.  The Lenders  shall have received a reasonably
     satisfactory  solvency analysis certified by the chief financial officer of
     ASC which shall  document the  solvency of the  Borrowers  considered  as a
     whole  after  giving  effect to the  transactions  contemplated  hereby but
     disregarding any assets or liabilities of any Excluded Subsidiary.

          (t) Extension of Existing Junior  Subordinated  Notes. The maturity of
     the Existing Junior  Subordinated  Notes shall have been extended to a date
     at least six months after the final maturity of the Second Lien Term Loans,
     and the Administrative  Agent shall have received  reasonably  satisfactory
     evidence thereof.

          (u) Exchange of Series A Preferred  Stock. The holder(s) of the Series
     A  Preferred  Stock of ASC shall have  exchanged  such  Capital  Stock on a
     dollar-for-dollar basis for New Junior Subordinated Notes.

          (v)  PATRIOT  Act.  The  Lenders  shall have  received,  at least five
     Business  Days  prior to the  Closing  Date,  all  documentation  and other
     information required by bank regulatory  authorities under applicable "know
     your customer" and anti-money  laundering rules and regulations,  including
     the United States PATRIOT Act.

     5.2.  Conditions to Each Extension of Credit.  The agreement of each Lender
to  make  any  extension  of  credit  requested  to be  made  by it on any  date
(including its initial  extension of credit) is subject to the  satisfaction  of
the following conditions precedent:
<PAGE>
                                                                              46


          (a)  Representations  and Warranties.  Each of the representations and
     warranties  made by any Borrower in or pursuant to the Loan Documents shall
     be true  and  correct  on and as of such  date as if made on and as of such
     date.

          (b) No Default. No Default or Event of Default shall have occurred and
     be  continuing  on such date or after giving  effect to the  extensions  of
     credit requested to be made on such date.

Each borrowing by and issuance of a Letter of Credit on behalf of any Borrower
hereunder shall constitute a representation and warranty by the relevant
Borrower as of the date of such extension of credit that the conditions
contained in this Section 5.2 have been satisfied.

                       SECTION VI. AFFIRMATIVE COVENANTS

     The  Borrowers   hereby  jointly  and  severally  agree  that,   until  the
Obligations have been Fully Satisfied, each Borrower shall:

     6.1.  Financial  Statements.   Furnish  to  the  Administrative  Agent  for
distribution to each Lender:

          (a) as soon as  available,  but in any event  within 90 days after the
     end of each  fiscal  year of ASC  (i) a copy  of the  audited  consolidated
     balance sheets of ASC and its  consolidated  Subsidiaries  as at the end of
     such year and the related audited consolidated  statements of income and of
     cash flows for such year,  setting forth in each case in  comparative  form
     the figures for the previous year, with an unqualified  opinion thereon, by
     KPMG LLP or other  independent  certified public  accountants of nationally
     recognized  standing and (ii) the unaudited  consolidated and consolidating
     balance sheets of ASC and its  consolidated  Subsidiaries  as at the end of
     such  year  and  the  related  unaudited   consolidated  and  consolidating
     statements of income and of cash flows for such year, setting forth in each
     case in comparative form the figures for the previous year,  certified by a
     Responsible Officer as being fairly stated in all material respects;

          (b) as soon as  available,  but in any event  not  later  than 45 days
     after the end of each of the first three  quarterly  periods of each fiscal
     year of ASC,  the  unaudited  consolidated  balance  sheets  of ASC and its
     consolidated  Subsidiaries  as at the end of such  quarter  and the related
     unaudited  consolidated  statements  of income  and of cash  flows for such
     quarter and the portion of the fiscal year through the end of such quarter,
     setting forth in each case in comparative form the figures for the previous
     year,  certified by a  Responsible  Officer as being  fairly  stated in all
     material respects (subject to normal year-end audit adjustments); and

          (c) as soon as  available,  but in any event  not  later  than 45 days
     after the end of each fiscal month occurring during each fiscal year of the
     Borrower (or 90 days  thereafter in the case of July and 60 days thereafter
     in the case of August of each such fiscal  year),  copies of the  unaudited
     consolidated  balance sheets of the  Subsidiary  Borrowers as at the end of
     such fiscal  month and the related  unaudited  consolidated  statements  of
     income and of cash flows for such  Persons  for such  fiscal  month and the
     portion of the fiscal year  through the end of such fiscal  month,  in each
     case as ASC prepares  internally  with respect to the Subsidiary  Borrowers
     and setting forth in comparative form the figures for the previous year.

All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied (except as approved by such accountants or officer, as the case may be,
and disclosed in reasonable detail therein) consistently throughout the periods
reflected therein and with prior periods.
<PAGE>
                                                                              47


     6.2. Certificates;  Other Information.  Furnish to the Administrative Agent
for  distribution to each Lender (or, in the case of clause (g), to the relevant
Lender):

          (a)  concurrently  with  the  delivery  of  any  financial  statements
     pursuant  to Section  6.1(a) or (b),  (i) a  certificate  of a  Responsible
     Officer of ASC  stating  that,  to the best of such  Responsible  Officer's
     knowledge,  each Borrower  during such period has observed or performed all
     of its  covenants  and  other  agreements,  and  satisfied  every  required
     condition contained in this Agreement and the other Loan Documents to which
     it is a party to be  observed,  performed or satisfied by it, and that such
     Responsible  Officer has  obtained no  knowledge of any Default or Event of
     Default  except  as  specified  in  such  certificate,  (ii)  a  Compliance
     Certificate  containing  all  information  and  calculations  necessary for
     determining  compliance  by  each  Borrower  with  the  provisions  of this
     Agreement  referred to therein as of the last day of the fiscal  quarter or
     fiscal  year  of  ASC,  as the  case  may  be,  (iii)  a  certificate  of a
     Responsible  Officer  of ASC  certifying  Consolidated  EBITDA for the four
     fiscal  quarter  period  ended as of the last day of the fiscal  quarter or
     fiscal  year  of ASC,  as the  case  may be,  and  (iv) to the  extent  not
     previously  disclosed to the  Administrative  Agent,  a description  of any
     change in the  jurisdiction  of  organization or legal name of any Borrower
     and a list of any Intellectual  Property acquired by any Borrower since the
     date of the most recent report delivered  pursuant to this clause (iv) (or,
     in the case of the first such report so delivered, since the Closing Date);

          (b) as soon as available, and in any event no later than 45 days after
     the end of each fiscal year of ASC, a detailed  consolidated budget for the
     following fiscal year (including a projected  consolidated balance sheet of
     the  Borrowers  as of the end of the  following  fiscal  year,  the related
     consolidated  statements  of  projected  cash  flow,  projected  changes in
     financial position and projected income and a description of the underlying
     assumptions  applicable  thereto),  and, as soon as available,  significant
     revisions,  if any, of such  budget and  projections  with  respect to such
     fiscal year (collectively,  the "Projections"),  which Projections shall in
     each case be accompanied  by a certificate of a Responsible  Officer of ASC
     stating  that  such   Projections   are  based  on  reasonable   estimates,
     information and assumptions and that such Responsible Officer has no reason
     to  believe  that such  Projections  are  incorrect  or  misleading  in any
     material respect;

          (c)  within 45 days  after the end of each  fiscal  quarter  of ASC, a
     narrative discussion and analysis of the financial condition and results of
     operations of the Borrowers for such fiscal quarter and for the period from
     the  beginning  of the then  current  fiscal year to the end of such fiscal
     quarter,  as  compared  to the  portion of the  Projections  covering  such
     periods and to the comparable periods of the previous year;

          (d) no later  than  three  Business  Days  prior to the  effectiveness
     thereof,  copies of substantially  final drafts of any proposed  amendment,
     supplement,  waiver or other  modification  with  respect to either  Junior
     Subordinated Note Indenture;

          (e) within five days after the same are sent,  copies of all financial
     statements  and  reports  that ASC sends to all the holders of any class of
     its debt securities or public equity  securities in their capacity as such,
     or to any trustee for such  holders,  and,  within five days after the same
     are filed, copies of all financial statements and reports that ASC may make
     to, or file with, the SEC;
<PAGE>
                                                                              48


          (f) promptly, copies of any agreements of the kind described in clause
     (a) of Section 5.1(l) not previously delivered hereunder; and

          (g) promptly,  such additional  financial and other information as any
     Lender may from time to time reasonably request.

     6.3.  Payment of  Obligations.  Pay,  discharge or otherwise  satisfy at or
before  maturity or before they become  delinquent,  as the case may be, all its
material  payment  obligations  of whatever  nature (other than  obligations  in
respect of the principal of and interest on  Indebtedness,  which are covered by
Section 8(e)),  except where the amount or validity  thereof is currently  being
contested in good faith by  appropriate  proceedings  and reserves in conformity
with GAAP with respect  thereto have been  provided on the books of the relevant
Borrower.

     6.4. Maintenance of Existence; Compliance. (a) (i) Preserve, renew and keep
in full  force  and  effect  its  organizational  existence  and  (ii)  take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business (including all applicable Forest
Service Permits),  except,  in each case, as otherwise  permitted by Section 7.4
and except,  in the case of clause (ii) above,  to the extent that failure to do
so could not reasonably be expected to have a Material  Adverse Effect;  and (b)
comply with all Contractual  Obligations  (other than  obligations in respect of
Indebtedness,  which are covered by Section  VIII(e))  and  Requirements  of Law
except  to the  extent  that  failure  to comply  therewith  could  not,  in the
aggregate, reasonably be expected to have a Material Adverse Effect.

     6.5.  Maintenance of Property  Insurance.  (a) Keep all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted (it being  understood that such property may be temporarily out of
good working order and condition in  connection  with the repair or  maintenance
thereof or improvements  thereto provided that that such property is restored to
such condition as soon as commercially  practicable  subject to negative weather
conditions and ski season  requirements),  and (b) comply with the provisions of
Schedule 6.5(b).

     6.6. Inspection of Property; Books and Records;  Discussions;  Surveys. (a)
Keep proper books of records and account in which full, true and correct entries
in  conformity  with  GAAP  and all  Requirements  of Law  shall  be made of all
dealings and transactions in relation to its business and activities, (b) permit
representatives  of any Lender to visit and  inspect any of its  properties  and
examine and make  abstracts  from any of its books and records at any reasonable
time and as often as may  reasonably  be desired  and to discuss  the  business,
operations,  properties and financial and other  condition of the Borrowers with
officers and  employees of the Borrowers  and with their  independent  certified
public  accountants  and (c)  permit  the  Administrative  Agent  to cause to be
conducted surveys of the Mortgaged  Properties as the  Administrative  Agent may
reasonably request, at the Lender's expense.

     6.7. Notices.  Promptly after obtaining  knowledge of the same, give notice
to the Administrative Agent for distribution to each Lender of:

          (a) the occurrence of any Default or Event of Default;

          (b)  any (i)  default  or  event  of  default  under  any  Contractual
     Obligation of any Borrower or (ii) litigation,  investigation or proceeding
     that may  exist at any  time  between  any  Borrower  and any  Governmental
     Authority, that in either case, if not cured or if adversely determined, as
     the case may be, could  reasonably  be expected to have a Material  Adverse
     Effect;
<PAGE>
                                                                              49


          (c) any  litigation or proceeding  affecting any Borrower (i) in which
     the amount involved is $500,000 or more and not covered by insurance,  (ii)
     in which  injunctive or similar  relief is sought or (iii) which relates to
     any Loan Document;

          (d) the following  events, as soon as possible and in any event within
     30 days after any  Borrower  knows or has reason to know  thereof:  (i) the
     occurrence of any  Reportable  Event with respect to any Plan, a failure to
     make any required contribution to a Plan, the creation of any Lien in favor
     of  the  PBGC  or a Plan  or  any  withdrawal  from,  or  the  termination,
     Reorganization  or  Insolvency  of,  any  Multiemployer  Plan or  (ii)  the
     institution of proceedings or the taking of any other action by the PBGC or
     ASC or any  Commonly  Controlled  Entity  or any  Multiemployer  Plan  with
     respect to the  withdrawal  from,  or the  termination,  Reorganization  or
     Insolvency of, any Plan; and

          (e) any  development  or  event  that  has had or,  in the  reasonable
     opinion  of  ASC's  management,  could  reasonably  be  expected  to have a
     Material Adverse Effect.

Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the relevant Borrower proposes to take with
respect thereto.

     6.8.  Environmental  Matters. (a) Comply in all material respects with, and
ensure  compliance in all material  respects by all tenants and  subtenants,  if
any, with, all applicable  Environmental Laws; obtain and comply in all material
respects with and maintain,  and ensure that all tenants and  subtenants  obtain
and comply in all material respects with and maintain, any and all Environmental
Permits;  and obtain  and  maintain  all Water  Rights  necessary  for it in any
material respect;

     (b)  Conduct and  complete in all  material  respects  all  investigations,
studies,  sampling  and testing,  and all  remedial,  removal and other  actions
required under  Environmental  Laws and promptly comply in all material respects
with  all  orders  and  directives  of all  Governmental  Authorities  regarding
Environmental  Laws other than such orders or  directives  that have been timely
and properly challenged in good faith and diligently pursued,  provided that the
pendency of any and all such challenges could not reasonably be expected to give
rise to a Material  Adverse Effect and does not materially and adversely  affect
the value or marketability of any Mortgaged Properties;

     (c) Generate, use, treat, store, release,  dispose of, and otherwise manage
Materials  of  Environmental  Concern in a manner that would not  reasonably  be
expected  to  result  in a  material  liability  to any  Borrower  or any of its
Subsidiaries or to affect materially and adversely the value or marketability of
any  Mortgaged  Properties;  and take  reasonable  efforts to prevent  any other
person from generating,  using, treating, storing,  releasing,  disposing of, or
otherwise  managing  Hazardous  Materials in a manner that could  reasonably  be
expected  to  result  in a  material  liability  to any  Borrower  or any of its
Subsidiaries or to affect materially and adversely the value or marketability of
any Mortgaged Properties; and

     (d)  Maintain  a  program  to  facilitate  that  its and its  Subsidiaries'
properties  and operations  comply with, and are prudently  operated to minimize
liabilities under, all applicable  Environmental Laws and Environmental  Permits
(other than Forest Service Term Special Use Permits), and are prudently operated
to manage impacts on natural resources and the environment ("EH&S Program"). The

<PAGE>
                                                                              50


EH&S Program shall include  maintenance  of a system to share  information  with
respect to best management practices at each Ski Resort Property with respect to
attaining the compliance of its  properties and operations  with, and minimizing
the potential  liability of its  properties  and  operations  under,  applicable
Environmental  Laws and  Environmental  Permits  (other than Forest Service Term
Special Use Permits),  and managing the impacts of its properties and operations
on natural resources and the environment (including a meeting at least once each
calendar  quarter,  either in person or by telephone,  of at least the person at
each Ski  Resort  Property  with  overall  operational  responsibility  for such
matters).

     (e) At the request of the  Administrative  Agent (not more  frequently than
once in any  12-month  period,  unless a  Default  shall  have  occurred  and be
continuing), provide the Administrative Agent with a briefing regarding the EH&S
Program;  and,  within  thirty  days of the end of each fiscal  year,  deliver a
report  certified  by an officer of ASC with  responsibility  therefor and ASC's
chief financial  officer  summarizing  material  developments  involving matters
concerning  the EH&S Program (the "Annual EH&S  Report")  together  with,  where
appropriate,  a copy of the relevant  documents.  At a minimum,  the Annual EH&S
Report shall include: (1) a summary of any material investigation or remediation
undertaken  during  the  prior  year  to  address  environmental   contamination
(including a description of the contamination, the proposed action, the expected
time line for completion,  and a cost  estimate);  (2) a summary of any material
inspections by Governmental  Authorities  regulating matters concerning the EH&S
Program during the fiscal year just ended and any notices of violation issued to
Borrower or any of its Subsidiaries by such Governmental Authorities during such
fiscal year  (including  the authority  issuing the notice,  the subject  matter
thereof,  the relief sought,  and whether the Borrower believes that such notice
could  reasonably  result in a fine or  penalty  in excess  of  $50,000);  (3) a
summary of any  administrative  and  judicial  proceedings  brought  against the
Borrower  or any of its  Subsidiaries  regarding  matters  concerning  the  EH&S
Program  pending at any time during the fiscal year ended  (including the entity
bringing the proceeding, the subject thereof, the relief sought, and whether the
Borrower  believes that such  proceeding  could  reasonably  result in a fine or
penalty in excess of  $50,000);  (4) a summary  of any  material  violations  of
Environmental Laws or Environmental Permits identified by the Borrower or any of
its Subsidiaries and reported to a Governmental Authority during the past fiscal
year,  and a brief  description  of the  violations  and  whether  the  Borrower
believes that such notice or combination  thereof,  could reasonably be expected
to result in a fine or penalty in excess of $50,000;  (5) a  description  of any
material  modifications  or  enhancements  made to the EH&S  Program  during the
fiscal year just ended; (6) a copy of any compliance audit and corrective action
documentation  prepared pursuant to or with respect to any matter concerning the
EH&S Program  during the fiscal year just ended;  and (7) a  description  of any
legislative, regulatory, or enforcement initiatives of which a Borrower is aware
regarding matters  concerning the EH&S Program that could reasonably be expected
to  materially  affect  Borrower's  costs,  revenues,  or business  plans in the
current fiscal year or the remaining  term of the  Facilities  (or, if a Default
has occurred and is continuing, the four succeeding fiscal years).

     6.9. Additional Collateral, New Subsidiary Borrowers, etc. (a) With respect
to any property  acquired after the Closing Date by any Borrower (other than (x)
any property  described in paragraph  (b), (c) or (d) below and (y) any property
subject  to a Lien  expressly  permitted  by  Section  7.3(f)  as to  which  the
Collateral  Agent,  for the  benefit of the  Lenders,  does not have a perfected
Lien),  promptly (i) execute and deliver to the Collateral Agent such amendments
to the  Guarantee  and  Collateral  Agreement  or such  other  documents  as the
Collateral  Agent  reasonably  deems  necessary  or  advisable  to  grant to the
Collateral Agent, for the benefit of the Administrative Agent and the Lenders, a
security  interest  in such  property  and (ii) take all  actions  necessary  or
advisable  to  grant  to  the   Collateral   Agent,   for  the  benefit  of  the
Administrative  Agent and the  Lenders,  a  perfected  first  priority  security
interest in such property (subject to Liens permitted by Section 7.3), including
the filing of Uniform Commercial Code financing statements in such jurisdictions
as may be required by the Guarantee and Collateral Agreement or by law or as may
be requested by the Collateral Agent.

     (b) With respect to any fee interest in any real  property  comprising  Ski
Terrain  or having a value  (together  with  improvements  thereof)  of at least
$100,000  (including the projected value of any improvements  being constructed)
or any leasehold interest in any real property  comprising Ski Terrain or having
improvements  thereon with a value of at least $100,000 (or with improvements to
be constructed thereon with a projected value of at least $100,000) in each case

<PAGE>
                                                                              51


acquired  after  the  Closing  Date by any  Borrower  (other  than any such real
property subject to a Lien expressly permitted by Section 7.3(f)),  promptly (i)
execute and deliver a first  priority  Mortgage  (subject to Liens  permitted by
Section  7.3),  in  favor  of the  Collateral  Agent,  for  the  benefit  of the
Administrative  Agent and the  Lenders,  covering  such real  property,  (ii) if
requested by the Collateral Agent,  provide the Lenders with (x) title insurance
covering such real property in an amount at least equal to the purchase price of
such  real  property  (or such  other  greater  amount  as  shall be  reasonably
specified by the Collateral  Agent) as well as a surveyor's report and statement
which certifies that the buildings,  improvements and other assets pertaining to
such real  property  are  located  entirely on land that  constitutes  such real
property  and (y) any  consents or  estoppels  reasonably  deemed  necessary  or
advisable by the Collateral Agent in connection with such Mortgage,  each of the
foregoing in form and substance reasonably  satisfactory to the Collateral Agent
and (iii) if requested by the Collateral Agent,  deliver to the Collateral Agent
legal opinions relating to the matters described above,  which opinions shall be
in  form  and  substance,  and  from  counsel,  reasonably  satisfactory  to the
Collateral Agent.

     (c) With respect to any new Restricted Subsidiary created or acquired after
the Closing Date by any Borrower (which, for the purposes of this paragraph (c),
shall include any existing Subsidiary that ceases to be an Excluded Subsidiary),
promptly (i) execute and deliver to the Collateral  Agent such amendments to the
Guarantee and Collateral  Agreement as the Collateral  Agent deems  necessary or
advisable  to  grant  to  the   Collateral   Agent,   for  the  benefit  of  the
Administrative  Agent and the  Lenders,  a  perfected  first  priority  security
interest in the Capital Stock of such new Restricted Subsidiary that is owned by
any Borrower  (subject to Liens  permitted by Section 7.3),  (ii) deliver to the
Collateral Agent the certificates representing such Capital Stock, together with
undated stock  powers,  in blank,  executed and  delivered by a duly  authorized
officer of the relevant Borrower, (iii) cause such new Restricted Subsidiary (A)
to become a party to the Guarantee and  Collateral  Agreement,  by executing and
delivering to the Collateral Agent an Assumption  Agreement in the form attached
as Annex 1 to the Guarantee and Collateral  Agreement,  and to become a party to
this Agreement as a Borrower,  by executing and delivering to the Administrative
Agent a Subsidiary  Borrower  Agreement  substantially in the form of Exhibit G,
(B) to take such actions necessary or advisable to grant to the Collateral Agent
for the benefit of the  Administrative  Agent and the Lenders a perfected  first
priority  security  interest  (subject to Liens permitted by Section 7.3) in the
Collateral  described in the Guarantee and Collateral  Agreement with respect to
such new Subsidiary,  including the filing of Uniform  Commercial Code financing
statements  in  such  jurisdictions  as may be  required  by the  Guarantee  and
Collateral  Agreement  or by  law  or as  may  be  reasonably  requested  by the
Collateral  Agent and (C) to deliver to the  Collateral  Agent a certificate  of
such  Subsidiary,  substantially  in the form of  Exhibit  C,  with  appropriate
insertions and attachments, and (iv) deliver to the Administrative Agent and the
Collateral Agent legal opinions  relating to such new Subsidiary and the matters
described  above,  which  opinions  shall  be in form  and  substance,  and from
counsel,  reasonably satisfactory to the Administrative Agent and the Collateral
Agent (it being agreed that opinions of  substantially  the same scope, and from
the same counsel,  as the opinions delivered pursuant to Section 5.1(h) shall be
satisfactory).

     (d) With respect to any new Excluded  Subsidiary  created or acquired after
the Closing  Date that is a direct  Subsidiary  of any  Borrower,  promptly  (i)
execute and deliver to the Collateral Agent such amendments to the Guarantee and
Collateral  Agreement as the  Collateral  Agent deems  necessary or advisable to
grant to the Collateral Agent, for the benefit of the  Administrative  Agent and
the Lenders,  a perfected first priority  security interest in the Capital Stock
of such new Subsidiary that is owned by any Borrower (subject to Liens permitted
by  Section  7.3),  (ii)  deliver  to  the  Collateral  Agent  the  certificates
representing  such Capital Stock,  together with undated stock powers, in blank,

<PAGE>
                                                                              52


executed and delivered by a duly  authorized  officer of the relevant  Borrower,
and take  such  other  action as may be  necessary  or,  in the  opinion  of the
Collateral Agent,  desirable to perfect the Collateral Agent's security interest
therein,  and  (iii)  if  requested  by the  Collateral  Agent,  deliver  to the
Collateral Agent legal opinions relating to the matters  described above,  which
opinions  shall  be  in  form  and  substance,  and  from  counsel,   reasonably
satisfactory  to  the  Collateral  Agent  (it  being  agreed  that  opinions  of
substantially  the  same  scope,  and from the  same  counsel,  as the  opinions
delivered pursuant to Section 5.1(h) shall be satisfactory).

     6.10. Forest Service Permits.  Comply with all of its material  obligations
and  agreements  under the Forest  Service  Permits  and under any  renewals  or
extensions  thereof and not do or suffer  anything  which will impair any Forest
Service Term Special Use Permit.  Make no changes,  alterations or amendments to
any  Forest  Service  Permit  except  with  the  prior  written  consent  of the
Administrative  Agent or as would not have or  reasonably  be expected to have a
material  impact on the  operations of any  Borrower;  provided,  however,  that
changes or  alterations  in any master plan provided  under or  incorporated  by
reference  in any Forest  Service  Term  Special Use Permit will not  constitute
changes, alterations or amendments under this Section 6.10.

     6.11.  Agreements  with Respect to Excluded  Subsidiaries.  (a) Conduct its
business and operations  separately from that of the Excluded  Subsidiaries  and
cause the  Excluded  Subsidiaries  to  conduct  their  business  and  operations
separately  from that of each Borrower,  by (i) not  commingling  funds or other
assets, (ii) maintaining  separate corporate and financial records and observing
all corporate formalities,  (iii) paying their respective liabilities from their
respective assets,  except pursuant to any guarantees  extended by the Borrowers
of obligations of Excluded Subsidiaries and permitted hereunder,  (iv) except in
the case of GSRP, maintaining  capitalization  adequate to meet their respective
business  needs and (v)  conducting  contractual  dealings with third parties in
their respective names and as separate and independent entities.

     (b) Cause each Excluded  Subsidiary  not to conduct any business other than
the business indicated for such Excluded Subsidiary on Schedule 6.11 and matters
incidental thereto.

     (c) Not  permit  any  Excluded  Immaterial  Subsidiary  to  Dispose  of any
material assets,  except  Dispositions for fair market value consideration which
is dividended or distributed to the Borrower that owns such Excluded  Immaterial
Subsidiary.

     6.12.  Interest Rate Protection.  In the case of ASC, within 180 days after
the Closing Date,  enter into, and thereafter  maintain for a period of not less
than three years, Swap Agreements to the extent necessary to provide that 50% of
the aggregate outstanding principal amount of the Term Loans and the Second Lien
Term Loans is subject to interest rate  protection for a period of not less than
three years,  which Swap Agreements  shall have terms and conditions  reasonably
satisfactory to the Agents.

     6.13.  Post-Closing  Obligations.  (a) Use commercially  reasonable efforts
promptly  to obtain  Landlord  Certificates  for the leases  listed on  Schedule
5.1(k)(v).

     (b) Within 60 days after the Closing Date,  cause the  operating  leases of
the Borrowers listed on Schedule 6.13 to be converted into capital leases.

                        SECTION VII. NEGATIVE COVENANTS

     The  Borrowers   hereby  jointly  and  severally  agree  that,   until  the
Obligations  are  Fully  Satisfied,   each  Borrower  shall  not,   directly  or
indirectly:
<PAGE>
                                                                              53


     7.1. Financial Condition Covenants.

     (a) Minimum Consolidated EBITDA.  Permit Consolidated EBITDA for any period
of four fiscal  quarters  of ASC ending with any fiscal  quarter set forth below
("LTM  EBITDA") to be less than the amount set forth below  opposite such fiscal
quarter:

        Fiscal Quarter                               Minimum LTM EBITDA

       FY2005 Quarter 2                                 $38,900,000
       FY2005 Quarter 3                                 $38,900,000
       FY2005 Quarter 4                                 $38,900,000
       FY2006 Quarter 1                                 $38,900,000
       FY2006 Quarter 2                                 $38,900,000
  FY2006 Quarter 3 and thereafter                       $42,500,000

provided that, to the extent LTM EBITDA measured at the end of any fiscal
quarter is less than the minimum amount specified above for such period of four
fiscal quarters, amounts received by the Borrowers during such period consisting
of the Net Cash Proceeds of Dispositions of Non-Operating Assets in accordance
with Section 7.5(e) ("Non-Operating Asset Sale Proceeds") shall be deemed to be
added to LTM EBITDA (in an aggregate amount of up to $2,000,000 in any such
period of four fiscal quarters) for the purpose of determining the Borrowers'
compliance with this covenant; and, provided, further, that for the purpose of
calculating EBITDA for the first and second fiscal quarters of ASC's fiscal year
2005, EBITDA shall be determined as if all operating leases set forth on
Schedule 6.13 has been converted into capital leases during all relevant time
periods in such fiscal quarter.

     (b) Minimum Asset Value.  Permit the aggregate  Appraised  Value of the Ski
Resort  Properties  at any  time  to be  less  than  the  Required  Value  (such
requirement,  the "Minimum Asset Value Test"), determined pursuant to Appraisals
conducted in accordance with the following procedures:

               (i) Appraisals.  The Appraised Value of the Ski Resort Properties
          for the  purposes of  determining  compliance  with the Minimum  Asset
          Value Test shall be (A) based  initially upon the Appraisals  obtained
          by the  Administrative  Agent in connection  with the Closing Date and
          delivered pursuant to Section 5.1(q) and (B) based thereafter (subject
          to Sections  7.1(b)(ii),  (iii) and (iv)) on the most  recent  Desktop
          Appraisals  conducted with respect to the Ski Resort Properties at the
          request  of  the  Administrative  Agent  by an  Independent  Appraiser
          selected by the  Administrative  Agent, which Desktop Appraisals shall
          be  obtained  annually  on or about (but in no event more than 30 days
          following)  each  anniversary of the Closing Date (each Appraisal made
          pursuant  to this  clause  (B),  an "Annual  Appraisal").  Each Annual
          Appraisal shall be conducted with respect to Ski Resort  Properties in
          such  order  as  the  Administrative  Agent  may  determine,  and  the
          Administrative  Agent  shall  provide ASC with  preliminary  and final
          results of such Annual Appraisal and preliminary and final indications
          of  variances  from ski resort  industry  multiples  employed  by such
          Independent  Appraiser  promptly as such results or  variances  become
          available.  A  change  in  the  Appraised  Value  of  the  Ski  Resort
          Properties reflected in any Annual Appraisal shall become effective on
          the fifteenth day  following  the date when the  Administrative  Agent
          delivers to ASC a final copy of such Annual  Appraisal unless a notice
          of reappraisal is delivered to the  Administrative  Agent on or before
          such day pursuant to Section  7.1(b)(ii) (in which case the procedures
          specified in such Section shall become applicable).
<PAGE>
                                                                              54


               (ii) Borrower  Reappraisal  Right.  If the Appraised Value of the
          Ski Resort Properties  determined  pursuant to any Annual Appraisal is
          less than the Required Value at the time of delivery thereof, ASC may,
          by written notice to the Administrative Agent (delivered not more than
          15 days following the date of ASC's receipt of such Annual Appraisal),
          elect  to  have  the  Appraised  Value  of the Ski  Resort  Properties
          determined  by  Appraisals  conducted  by  an  Independent   Appraiser
          selected by ASC and reasonably acceptable to the Administrative Agent,
          which  Appraisals  shall be conducted  using a methodology  similar to
          that  described  in  Section   7.1(b)(i)  and  in  the  definition  of
          "Appraised  Value" in Section 1.1 and  completed  within 45 days after
          ASC's  receipt of such Annual  Appraisal,  in which case the Appraised
          Value of the Ski Resort  Properties  for the  purposes of  determining
          compliance  with the Minimum  Asset  Value Test shall  (subject to the
          provisions  of  Sections  7.1(b)(iii)  and (iv)) be the average of the
          Appraised  Values  of the Ski  Resort  Properties  determined  by such
          Annual  Appraisal  and  the  Appraisals  conducted  pursuant  to  this
          sentence. A change in the Appraised Value of the Ski Resort Properties
          as a result of a  reappraisal  under  this  Section  7.1(b)(ii)  shall
          become  effective on the fifteenth day following the date on which the
          applicable  Appraisals are delivered to the  Administrative  Agent and
          each  Lender  under  this  Section   7.1(b)(ii)  unless  a  notice  of
          dissatisfaction is delivered by any Lender to the Administrative Agent
          on or before such day pursuant to Section  7.1(b)(iii)  (in which case
          the procedures specified in such Section shall become applicable).  If
          a reappraisal  notice is given pursuant to this Section 7.1(b)(ii) but
          the Appraisals are not delivered  pursuant to this Section  7.1(b)(ii)
          within the time period required hereby, the Appraised Value of the Ski
          Resort  Properties  shall be  determined  on the  basis of the  Annual
          Appraisal to which such  reappraisal  notice  related,  and the change
          therein shall become  effective on the date when the  Appraisals  were
          required to be delivered pursuant to this Section 7.1(b)(ii).

               (iii) Lender  Reappraisal  Right.  If  Appraisals  are  delivered
          pursuant to Section  7.1(b)(ii)  and any Lender is not satisfied  with
          the  Appraised  Value  of the  Ski  Resort  Properties  as  determined
          pursuant  thereto or is otherwise not satisfied with such  Appraisals,
          such Lender may, by written  notice sent to the  Administrative  Agent
          (delivered  not more than 15 days following the date of the receipt by
          the  requesting  Lender  of such  Appraisals),  request  to  have  the
          Appraised  Value of the Ski Resort  Properties  determined  by another
          Independent  Appraiser  selected by the Required  Lenders.  Within ten
          days of the  delivery  of the first  such  notice by any  Lender,  the
          Required  Lenders  shall (x)  determine  whether to have the Appraised
          Value  of the Ski  Resort  Properties  re-determined,  and (y) if they
          determine   to   require   such  a   re-determination,   provide   the
          Administrative  Agent written notice thereof.  If the Required Lenders
          do not  provide  the  written  notice  described  in  the  immediately
          preceding  sentence  within the time period  required,  the  Appraised
          Value of the Ski Resort Properties shall not be re-determined, and the
          change in the Appraised  Value of the Ski Resort  Properties  shall be
          effective on the date when such notice from the  Required  Lenders was
          required to be  delivered.  If the  Required  Lenders do deliver  such
          notice to the  Administrative  Agent within the time period  required,
          the   Appraised   Value  of  the  Ski  Resort   Properties   shall  be
          re-determined  by  another  Independent   Appraiser  selected  by  the
          Required Lenders pursuant to Appraisals  conducted by such Independent
          Appraiser  using a  methodology  similar to that  described in Section
          7.1(b)(i) and the  definition of "Appraised  Value" in Section 1.1 and
          completed  within 45 days after the receipt of the  applicable  notice
          given by the Required Lenders pursuant to this Section 7.1(b)(iii). On
          the  date  of  the  delivery  to  the  Administrative  Agent  of  such
          Appraisals pursuant to this Section  7.1(b)(iii),  the Appraised Value
          of  the  Ski  Resort   Properties  for  the  purposes  of  determining
          compliance  with the Minimum  Asset Value Test shall be the average of
          the Appraised  Values of the Ski Resort  Properties  determined by the
          related Appraisals delivered pursuant to Sections 7.1(b)(i),  (ii) and
          (iii) and the change therein shall become  effective as of the date of
          such delivery. If a re-determination  notice is given pursuant to this
          Section  7.1(b)(iii)  but the requested  Appraisals  are not delivered

<PAGE>
                                                                              55


          within the time period required hereby, the Appraised Value of the Ski
          Resort Properties for the purposes of determining  compliance with the
          Minimum  Asset  Value  Test  shall  be  the  average  of  the  related
          Appraisals  delivered  pursuant to Sections  7.1(b)(i) and 7.1(b)(ii),
          and the change  therein  shall  become  effective on the date when the
          Appraisals  were  required to be  delivered  pursuant to this  Section
          7.1(b)(iii).

               (iv) Event of Default or Major Casualty Event. The Administrative
          Agent may obtain new  Appraisals  at any time when an Event of Default
          has  occurred and is  continuing  or after the  occurrence  of a Major
          Casualty Event (and in the latter case (x) the Required Value shall be
          measured  after giving  effect to any  concurrent  prepayment  of Term
          Loans or  reduction  of Revolving  Commitments,  whether  mandatory or
          voluntary,  in connection  therewith and (y) if a Reinvestment  Notice
          shall  have been  delivered  in  connection  with the  Recovery  Event
          resulting from such Major Casualty Event, the Appraised Value shall be
          determined  assuming  that the Net Cash  Proceeds  thereof  have  been
          reinvested as specified in such Reinvestment Notice).

     (c) Annual  Liquidity  Test.  On April 1 of any year prior to the Revolving
Termination  Date,  permit  any  Revolving  Loans to be  outstanding  other than
Revolving Loans borrowed on such date to repay Reimbursement  Obligations due on
such date.

     7.2.  Indebtedness.  Create, issue, incur, assume, become liable in respect
of or suffer to exist any Indebtedness, except:

          (a) Indebtedness of any Borrower pursuant to any Loan Document;

          (b) Indebtedness  (including  Purchase Money  Indebtedness (as defined
     below))  outstanding  on the date hereof and listed on Schedule  7.2(b) and
     any  refinancings,  refundings,  renewals or  extensions  thereof  (without
     increasing,  or shortening  the maturity of, the principal  amount  thereof
     (after giving effect to any repayments)  except for increases to the extent
     of any premium and reasonable costs and expenses or capitalized interest);

          (c) (i) Indebtedness  (including Capital Lease Obligations) secured by
     Liens permitted by Section 7.3(f)  ("Purchase  Money  Indebtedness")  in an
     aggregate principal amount at any one time outstanding, which when added to
     the aggregate then outstanding principal amount of any secured Indebtedness
     specified on Schedule 7.2(b) and any refinancings,  refundings, renewals or
     extensions  thereof,  is not greater than $30,000,000 during ASC's 2005 and
     2006 fiscal years, $27,500,000 during ASC's 2007 and 2008 fiscal years, and
     $25,000,000 thereafter;

          (d) Indebtedness in respect of the Senior  Subordinated Notes (so long
     as all Senior  Subordinated  Notes remaining  outstanding after the Closing
     Date are repurchased, redeemed or defeased in full within 60 days after the
     Closing Date and the  requirements of Section 5.1(p) have been met) and the
     Existing Junior Subordinated Notes;

          (e) Indebtedness of any Borrower to any other Borrower;

          (f) Payment and performance  bonds entered into in the ordinary course
     of business in support of the  activities  of any  Borrower in  conjunction
     with Capital Expenditures permitted hereunder; provided, that the aggregate
     amount of such payment and performance  bonds outstanding at any time shall
     not exceed $1,000,000;
<PAGE>
                                                                              56


          (g)  Indebtedness  constituting  Second Lien Debt and any refinancing,
     refunding,  renewal or extension thereof (without increasing, or shortening
     the maturity of, the principal  amount  thereof (after giving effect to any
     repayments)  except  for  increases  to  the  extent  of  any  premium  and
     reasonable  costs and  expenses or  capitalized  interest),  subject to the
     Intercreditor Agreement;

          (h)  Indebtedness  in  respect of the New  Junior  Subordinated  Notes
     issued in exchange for or as a conversion  of the Series A Preferred  Stock
     on a dollar-for-dollar basis; and

          (i)  Indebtedness   incurred  in  connection  with  the  financing  of
     insurance  premiums for insurance  policies obtained in the ordinary course
     of business.

     7.3. Liens.  Create,  incur, assume or suffer to exist any Lien upon any of
its property, whether now owned or hereafter acquired, except:

          (a) Liens for  taxes not yet due or that are being  contested  in good
     faith by  appropriate  proceedings,  provided that  adequate  reserves with
     respect  thereto are maintained on the books of the applicable  Borrower in
     conformity with GAAP;

          (b) carriers', warehousemen's,  mechanics', materialmen's, repairmen's
     or other like Liens arising in the ordinary course of business which secure
     payment of obligations (other than Indebtedness) that are not overdue for a
     period of more than 30 days or that are being  contested  in good  faith by
     appropriate  proceedings,  provided  that  adequate  reserves  with respect
     thereto  are  maintained  on  the  books  of  the  applicable  Borrower  in
     conformity with GAAP;

          (c) pledges or  deposits in  connection  with  workers'  compensation,
     unemployment  insurance  (other  than  ERISA)  and  other  social  security
     legislation;

          (d)   easements,   rights-of-way,   restrictions   and  other  similar
     encumbrances  incurred  in the  ordinary  course of business  that,  in the
     aggregate,  are not  substantial  in  amount  and  that do not in any  case
     materially  detract  from the  value of the  property  subject  thereto  or
     materially  interfere  with the  ordinary  conduct of the  business  of any
     Borrower;

          (e) Liens in existence on the date hereof  listed on Schedule  7.3(e),
     provided that no such Lien is spread to cover any additional property after
     the  Closing  Date  (except  for  additional  property  in  the  nature  of
     improvements  to property  already subject to any such Lien or additions to
     accounts  receivable or inventory,  as the case may be, already  subject to
     such Lien) and that,  if securing  Indebtedness,  the  principal  amount of
     Indebtedness secured thereby is not increased;

          (f)  Liens  securing  Indebtedness  of  ASC or  any  other  Subsidiary
     incurred  pursuant to Section 7.2(c) to finance the acquisition of fixed or
     capital assets, provided that (i) such Liens shall be created substantially
     simultaneously  with the acquisition of such fixed or capital assets,  (ii)
     such Liens do not at any time encumber any property other than the property
     financed by such Indebtedness (except for additional property in the nature
     of improvements  to property  already subject to any such Lien or additions
     to accounts receivable or inventory, as the case may be, already subject to
     such  Lien) and (iii) the  amount of  Indebtedness  secured  thereby is not
     increased;
<PAGE>
                                                                              57


          (g) Liens created pursuant to the Security Documents;

          (h) any interest or title of a lessor under any lease  entered into by
     any Borrower in the ordinary  course of its business and covering  only the
     assets so leased;

          (i) deposits to secure the performance of bids, trade contracts (other
     than for borrowed money), leases, statutory obligations,  surety and appeal
     bonds, performance bonds and other obligations of a like nature incurred in
     the ordinary course of business;

          (j) Liens (other than  judgments  and awards)  created by or resulting
     from any  litigation or legal  proceeding  which has not yet resulted in an
     Event of Default,  provided that the execution or other enforcement thereof
     is  effectively  stayed and the claims  secured  thereby are being actively
     contested  in good faith by  appropriate  proceedings  satisfactory  to the
     Administrative  Agent  and  adequate  reserves  with  respect  thereto  are
     maintained on the books of the applicable Borrower in conformity with GAAP;

          (k) possessory Liens in favor of securities intermediaries,  commodity
     intermediaries,   brokers  and  dealers  arising  in  connection  with  the
     acquisition  or disposition of Investments of the type permitted by Section
     7.8(b),  provided that such Liens (i) attach only to such  Investments  and
     (ii) secure only obligations incurred in the ordinary course of business of
     the relevant  Borrower and arising in connection  with the  acquisition  or
     disposition of such  Investments  and not any obligation in connection with
     margin financing;

          (l) leases permitted by Section 7.5;

          (m) Liens on Collateral  securing  Indebtedness  incurred  pursuant to
     Section 7.2(g), subject to the Intercreditor Agreement; and

          (n) Liens on insurance  policies and the proceeds thereof securing the
     financing of the insurance premiums with respect thereto.

     7.4.  Fundamental  Changes.   Enter  into  any  merger,   consolidation  or
amalgamation,   or  liquidate,  wind  up  or  dissolve  itself  (or  suffer  any
liquidation  or  dissolution),  or  Dispose of all or  substantially  all of its
property or business, except that:

          (a) any Borrower may be merged or consolidated  with or into any other
     Borrower  (provided  that, in the case of any such merger or  consolidation
     involving ASC, ASC shall be the continuing or surviving corporation);

          (b) any  Borrower  may  Dispose of any or all of its assets (i) to any
     other Borrower (upon  voluntary  liquidation or otherwise) in a Disposition
     permitted  by  Section  7.5(c) or (ii)  pursuant  to any other  Disposition
     permitted by Section 7.5; and

          (c)  any  Investment   expressly  permitted  by  Section  7.8  may  be
     structured as a merger, consolidation or amalgamation.

     7.5. Disposition of Property.  Dispose of any of its property,  whether now
owned or hereafter acquired,  or, in the case of any Subsidiary Borrower,  issue
or sell any shares of such  Subsidiary  Borrower's  Capital Stock to any Person,
except:
<PAGE>
                                                                              58


          (a) the  Disposition in the ordinary course of business of obsolete or
     worn out  property  with an  aggregate  book  value or fair  market  value,
     whichever is less, not in excess of $500,000 in any fiscal year;

          (b) the sale, lease or other  disposition of inventory in the ordinary
     course of business;

          (c) Dispositions to any other Borrower (upon voluntary  liquidation or
     otherwise);  provided that any Disposition of Collateral  included  therein
     shall be made  subject to the Liens of the  Collateral  Agent  thereon and,
     prior to any such  Disposition,  the applicable  Borrowers shall have taken
     all action required by the Collateral Agent to create,  perfect and protect
     such Liens and the priority thereof;

          (d) the sale or issuance of any Restricted  Subsidiary's Capital Stock
     to any Borrower;

          (e) the  Disposition  of  Non-Operating  Assets for fair market  value
     (measured  in  the  case  of  Dispositions  of  Non-Operating   Assets  for
     consideration  in excess of $5,000,000 based on the appraised value of such
     Non-Operating Assets) cash consideration not to exceed in the aggregate for
     any fiscal  year of ASC,  $4,000,000;  provided  that in any fiscal year of
     ASC,  the amount in this  clause  (e) may be  increased  by the  Additional
     Non-Operating Asset Sale Amount for such fiscal year if:

               (i) LTM EBITDA for the period ending on the last day of the third
          fiscal quarter of the preceding  fiscal year was not less than the LTM
          EBITDA  required for such period  pursuant to Section  7.1(a)  without
          giving effect to the addition of any Non-Operating Asset Sale Proceeds
          permitted by the proviso to such Section, and

               (ii) an amount  equal to at least 50% (or,  if at the time of any
          Disposition  pursuant to this clause (e) the aggregate  amount of cash
          proceeds of  Dispositions  of  Non-Operating  Assets by the  Borrowers
          since the Closing Date  exceeds  $45,000,000,  75%) of the excess,  if
          any, of (x) the aggregate amount of Non-Operating  Asset Sale Proceeds
          received by the Borrowers in any fiscal year of ASC from  Dispositions
          pursuant  to this  clause  (e)  over  (y)  $4,000,000  is  applied  in
          accordance  with  Section  2.9(b)  (and such  amount will be deemed to
          constitute  Net Cash Proceeds of a Material Asset Sale for purposes of
          Section 2.9(b));

          (f) the license of  intellectual  property in the  ordinary  course of
     business;

          (g)  dispositions of Capital Stock of Grand Summit Resort  Properties,
     Inc. and Community Water Company;

          (h) Leases  that have a lease term of three  years or less (or no more
     than five years with a five-year  renewal term in the case of subclause (i)
     below) that are (i) retail  space  leases to  third-party  retailers,  (ii)
     other leases covering spaces of 10,000 square feet or less, or (iii) ground
     leases of real property other than (x) Skiable  Terrain,  (y) improved real
     property  (except in the case of a  replacement  or renewal of any lease on
     such property  existing as of the Closing  Date) or (z) any other  property
     necessary  for the  operation of any Ski Resort  Properties in the ordinary
     course of business;

          (i)  Dispositions  of  Non-Operating   Assets  consisting  of  capital
     contributions permitted by Section 7.8(j);
<PAGE>
                                                                              59


          (j)  transfers  to  Wolf  Mountain  Resorts,  LC  ("Wolf")  of (i) 100
     hotel/lodging  unit  undeveloped  lots in Red Pine  Village at The Canyons,
     together with  associated  water rights and utilities,  in accordance  with
     Section 12 of the Second  Amendment  to Ground  Lease  between ASC Utah and
     Wolf and (ii) ASC Utah's  interest in the land  underlying  the Willow Draw
     subdivision,  consisting of 35 undeveloped  residential lots, in accordance
     with Section 9 of the Second Amendment to Ground Lease between ASC Utah and
     Wolf, together with associated water rights and utilities; and

          (k)  modifications  of the  "Premises"  under the Ground Lease between
     Wolf  and ASC  Utah to  facilitate  property  re-alignment  and  base  area
     development  at The  Canyons,  on terms  disclosed  to and  approved by the
     Administrative Agent.

     7.6. Restricted Payments. Declare or pay any dividend (other than dividends
payable  solely in common stock of the Person making such  dividend) on, or make
any payment on account of, or set apart assets for a sinking or other  analogous
fund for, the purchase, redemption,  defeasance, retirement or other acquisition
of, any Capital Stock of any Borrower, whether now or hereafter outstanding,  or
make any other  distribution in respect thereof,  either directly or indirectly,
whether in cash or property or in  obligations  of any  Borrower  (collectively,
"Restricted  Payments"),  except  that  (a) any  Borrower  may  make  Restricted
Payments to any other  Borrower and (b) ASC shall be permitted  make  Restricted
Payments of up to $5,000,000 in the aggregate since the Closing Date, whether in
a single transaction or a series of related transactions, to purchase or acquire
common stock of ASC not held by Oak Hill so long as (i) the ratio of (x) the sum
of the aggregate outstanding amounts of the Term Loans, the Revolving Extensions
of Credit  and the  Second  Lien Term  Loans on the date of any such  Restricted
Payment to (y)  Consolidated  EBITDA for the period of four  consecutive  fiscal
quarters most recently ended as of such date for which financial statements have
been  delivered in  accordance  with Section  6.1(a) or (b) shall not be greater
than  4.20:1.00,  (ii) no Default or Event of Default shall have occurred and be
continuing and (iii) after the consummation of such single transaction, ASC will
no longer be subject to the reporting  requirements  of the Securities  Exchange
Act of 1934 (or such obligations  shall be suspended) or, in any case where such
purchases or  acquisitions  are being  effected  pursuant to a series of related
transactions,  it is  reasonable  to  conclude  that,  after  completion  of all
transactions  in such series (and the  termination of any applicable  suspension
period), ASC will no longer be subject to such reporting requirements and, after
completion of the final  transaction in such series,  ASC is, in fact, no longer
subject to such reporting requirement.

     7.7. Capital Expenditures.  Make or commit to make any Capital Expenditure,
except Capital  Expenditures of the Borrowers in the ordinary course of business
made while no Event of Default has occurred and is  continuing  not exceeding in
any fiscal year of ASC the sum of (i)  $15,500,000,  (ii) an amount equal to 50%
of the aggregate excess of LTM EBITDA for the prior fiscal year over the minimum
LTM EBITDA  required by Section  7.1(a) for such fiscal year (without  adding in
any  Non-Operating  Asset Sale  Proceeds  as  permitted  by the  proviso to such
Section),  (iii) an amount equal to Non-Operating  Asset Sale Proceeds  received
during  such  fiscal  year in excess of the  aggregate  amount of such  proceeds
applied to satisfy  the minimum LTM EBITDA  requirements  of Section  7.1(a) for
such fiscal year, up to a maximum of $4,000,000 for this clause (iii),  and (iv)
an amount equal to 50% of the Non-Operating  Asset Sale Proceeds received during
such  fiscal  year  from any  additional  Disposition  of  Non-Operating  Assets
permitted  pursuant to the proviso to Section  7.5(e);  provided,  that any such
amount  referred to above, if not so expended in the fiscal year for which it is
permitted,  may be carried over for  expenditure in the next  succeeding  fiscal
year;  and  provided,  further,  that the  Borrowers  shall be permitted to make
additional Capital  Expenditures (A) as described on Schedule 7.7 so long as (x)
such Capital  Expenditures  do not exceed in any such fiscal year the amount set
forth for such  fiscal  year on Schedule  7.7  (provided  that if the amount set
forth on such  Schedule to be  expended  for any such item in any fiscal year is
not expended in such fiscal year for such item,  the amount for such item not so
expended in such fiscal  year may be  expended  for such item in any  subsequent
fiscal year) and are for the items  described  on such  Schedule 7.7 and (y) for
each such described  item, the amount  expended on such item does not exceed the
amount  set  forth  on such  Schedule  for  such  item;  (B) in  respect  of the
conversion  of  operating  leases  existing  on the  Closing  Date and listed on

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                                                                              60


Schedule 6.13 into Capital  Leases within 60 days after the Closing Date and (C)
with the Net  Cash  Proceeds  of any  Recovery  Event  with  respect  to which a
Reinvestment Notice has been delivered in accordance with Section 2.9(b).

     7.8.  Investments.  Make any advance,  loan, extension of credit (by way of
guaranty or  otherwise)  or capital  contribution  to, or  purchase  any Capital
Stock,  bonds,  notes,  debentures  or other debt  securities  of, or any assets
constituting  a business  unit of, or make any other  investment  in, any Person
(all of the  foregoing,  "Investments"),  or have  outstanding  any  Investment,
except:

          (a) extensions of trade credit in the ordinary course of business;

          (b) Investments in Cash Equivalents;

          (c) Guarantee Obligations permitted by Section 7.2;

          (d) (i) existing Investments in the Capital Stock of Subsidiaries that
     are  not  Borrowers,  as  described  on  Schedule  4.15,  (ii)  outstanding
     intercompany  loans and  advances,  as listed as  Indebtedness  on Schedule
     7.2(b) and permitted by Section 7.2, and (iii) other  existing  Investments
     described on Schedule 7.8(d);

          (e) Capital Expenditures  permitted by Section 7.7 that are structured
     as Investments;

          (f) Restricted Payments permitted under Section 7.6;

          (g) intercompany Investments by any Borrower in any other Borrower;

          (h) Investments  acquired in connection with the bankruptcy or workout
     of account debtors;

          (i) Investments in respect of Swap Agreements  permitted under Section
     7.12;

          (j) the Investments described on Schedule 7.8(j); and

          (k)  Investments in SS Associates,  LLC in connection with the call by
     Killington, Ltd., or the put by TMG Associates, LLC to Killington, Ltd., of
     TMG  Associates,  LLC's  membership  interest  in  SS  Associates,  LLC  in
     accordance  with  the  terms of the  Limited  Liability  Company  Operating
     Agreement of SS  Associates,  LLC dated October 15, 2004, as such agreement
     is in effect on the date hereof.

     7.9. Optional  Payments and Modifications of Certain Debt Instruments.  (a)
Make or offer to make any optional or voluntary payment, prepayment,  repurchase
or redemption of or otherwise  optionally  or  voluntarily  defease or segregate
funds with  respect to any Junior  Subordinated  Notes or (except in the case of
voluntary  prepayments  with  amounts not accepted  for  prepayment  by any Term
Lender in accordance with Section  2.9(d)) Second Lien Debt; (b) amend,  modify,
waive or otherwise change,  or consent or agree to any amendment,  modification,
waiver or other  change to, any of the terms of any  Junior  Subordinated  Notes
(other than any such  amendment,  modification,  waiver or other change that (i)
would  extend the  maturity  or reduce the  amount of any  payment of  principal
thereof or reduce the rate or extend any date for payment of interest thereon or
waive  any  default  or make any  covenant  less  restrictive  and (ii) does not
involve the payment of a consent  fee);  (c) amend,  modify,  waive or otherwise
change,  or consent  or agree to any  amendment,  modification,  waiver or other
change  to,  any of the  terms  of any  Preferred  Stock  (other  than  any such
amendment,  modification,  waiver  or other  change  that (x) would  extend  the
scheduled  redemption  date or reduce  the  amount of any  scheduled  redemption

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                                                                              61


payment or reduce the rate or extend any date for payment of  dividends  thereon
and (y) does not involve the payment of a consent  fee);  or (d)  designate  any
Indebtedness  (other  than  obligations  of the  Borrowers  pursuant to the Loan
Documents and the Second Lien Loan  Documents) as  "Designated  Senior Debt" (or
any other defined term having a similar  purpose) for the purposes of the Junior
Subordinated Note Indentures.

     7.10. Transactions with Affiliates.  Enter into any transaction,  including
any purchase,  sale, lease or exchange of property, the rendering of any service
or the payment of any  management,  advisory or similar fees, with any Affiliate
(other than any other  Borrower)  except that a Borrower (a) may pay  reasonable
salaries,  fees and bonuses  (including  the  reimbursement  of expenses and the
granting of stock options and phantom stock awards) to its  directors,  officers
and employees in accordance with prudent and customary business  practices,  (b)
may enter into  transactions  with an Affiliate on terms that are not materially
less  favorable  to such  Borrower  taken as a whole than those  which  could be
obtained at the time from Persons who are not Affiliates and which  transactions
(x) to the  extent in excess of  $250,000  for each  transaction  or a series of
related  transactions are disclosed to the  Administrative  Agent in writing and
(y) to the extent in excess of $5,000,000  for each  transaction  or a series of
related  transactions are approved by the  Supermajority  Lenders,  in each case
prior to the consummation of such transactions,  (c) may amend, modify, waive or
otherwise  change the terms of (i) any Junior  Subordinated  Notes or  Preferred
Stock to the  extent  permitted  by  Section  7.9,  (ii) the Loan  Documents  as
permitted by the terms thereof,  and (iii) the Second Lien Loan Documents to the
extent permitted by the Intercreditor  Agreement, (d) may enter into and perform
their  obligations  under  the Loan  Documents  and (e) enter  into  such  other
transactions  with  Affiliates  that have been approved in advance in writing by
the Administrative Agent.  Notwithstanding the foregoing, so long as no Event of
Default is continuing, the Borrowers may pay management fees to Affiliates in an
aggregate  amount for all such  Affiliates not to exceed  $100,000 in any fiscal
year of ASC.

     7.11.  Sales and  Leasebacks.  Enter into any  arrangement  with any Person
providing for the leasing by any Borrower of real or personal  property that has
been or is to be sold or  transferred  by such Borrower to such Person or to any
other Person to whom funds have been or are to be advanced by such Person on the
security of such  property or rental  obligations  of such  Borrower,  except in
connection with a Disposition of Non-Operating  Assets which otherwise  complies
with this Agreement.

     7.12.  Swap  Agreements.  Enter  into any Swap  Agreement,  except (a) Swap
Agreements  entered  into  to  hedge  or  mitigate  risks  to  which  ASC or any
Restricted  Subsidiary  has  actual  exposure  (other  than  those in respect of
Capital Stock) and (b) Swap Agreements entered into in order to effectively cap,
collar or  exchange  interest  rates (from  fixed to  floating  rates,  from one
floating  rate to  another  floating  rate or  otherwise)  with  respect  to any
interest-bearing liability or investment of ASC or any Restricted Subsidiary.

     7.13. Changes in Fiscal Periods.  Permit the fiscal year of ASC to end on a
day other than the last  Sunday in July or change  ASC's  method of  determining
fiscal quarters.

     7.14.  Restrictive  Agreements.  Enter  into,  incur or permit to exist any
agreement  or  other  arrangement  that  prohibits,  restricts  or  imposes  any
condition  upon (a) the ability of any  Borrower  to create,  incur or permit to
exist any Lien upon any of its  property  or assets,  or (b) the  ability of any
Subsidiary  Borrower to pay dividends or other distributions with respect to any
shares of its  capital  stock or to make or repay loans or advances to any other
Borrower or to guarantee  Indebtedness of any other Borrower;  provided that (i)
the foregoing shall not apply to restrictions  and conditions  imposed by law or
by the Loan  Documents  or the Second Lien Loan  Documents,  (ii) the  foregoing
shall not apply to  restrictions  and  conditions  existing  on the date  hereof
identified  on Schedule 7.14 (but shall apply to any extension or renewal of any
such  restriction,  or any amendment or modification of any such  restriction or
condition  making such  restriction  or condition more  restrictive),  (iii) the
foregoing shall not apply to customary  restrictions and conditions contained in
agreements  relating to the sale of a Subsidiary or assets or stock pending such

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                                                                              62


sale,  provided such restrictions and conditions apply only to the Subsidiary or
assets or stock that is to be sold and such sale is  permitted  hereunder,  (iv)
clause  (a) of the  foregoing  shall not  apply to  restrictions  or  conditions
imposed by any  agreement  relating to secured  Indebtedness  permitted  by this
Agreement  if such  restrictions  or  conditions  apply only to the  property or
assets securing such  Indebtedness and (v) clause (a) of the foregoing shall not
apply to customary  provisions  in leases and other  contracts  restricting  the
assignment thereof.

     7.15.  Lines of  Business.  Enter into any  business,  either  directly  or
through  any  Subsidiary,  except  for  those  businesses  in which  ASC and its
Subsidiaries  are engaged on the date of this  Agreement or that are  reasonably
related thereto.

     7.16. Maintenance Capital Expenditures  Variance.  Permit the actual amount
of maintenance  Capital  Expenditures of the Borrowers in any fiscal year of ASC
to be less than the maintenance  Capital  Expenditures of the Borrowers budgeted
for such fiscal year in the budget  delivered  for such fiscal year  pursuant to
Section 6.2(b) by more than 10%.

                        SECTION VIII. EVENTS OF DEFAULT

     If any of the following events shall occur and be continuing:

          (a) (i) any  Borrower  shall fail to pay any  principal of any Loan or
     Reimbursement  Obligation when due in accordance with the terms hereof;  or
     (ii)  any  Borrower  shall  fail  to  pay  any  interest  on  any  Loan  or
     Reimbursement  Obligation,  or any other amount payable  hereunder or under
     any other Loan Document,  within,  in the case of subclause (ii) only, five
     days after any such interest or other amount becomes due in accordance with
     the terms hereof; or

          (b) any representation or warranty made or deemed made by any Borrower
     herein  or in  any  other  Loan  Document  or  that  is  contained  in  any
     certificate,  document or financial or other  statement  furnished by it at
     any time under or in connection  with this Agreement or any such other Loan
     Document shall prove to have been inaccurate in any material  respect on or
     as of the date made or deemed made; or

          (c) (i) any Borrower shall default in the observance or performance of
     any agreement  contained in Section 6.4,  Section  6.5(b),  Section 6.7(a),
     Section 6.10, Section 6.11 or Section 6.12 or Section 7 (other than Section
     7.1(b)) of this  Agreement  or Section 5.4 or 5.6(b) of the  Guarantee  and
     Collateral  Agreement or (ii) an "Event of Default" under and as defined in
     any Mortgage shall have occurred and be continuing; or

          (d) any Borrower shall default in the observance or performance of any
     other  agreement  contained in this  Agreement  or any other Loan  Document
     (other than as provided in paragraphs (a) through (c) of this Section), and
     such default shall  continue  unremedied for a period of (i) in the case of
     Section 7.1(b), five Business Days or (ii) in any other case, 30 days after
     notice to ASC from the Administrative Agent or the Required Lenders; or
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                                                                              63


          (e) any  Borrower  shall (i)  default  in making  any  payment  of any
     principal of any  Indebtedness  (including  any Guarantee  Obligation  with
     respect to  Indebtedness,  but  excluding  the Loans) on the  scheduled  or
     original  due date with  respect  thereto;  or (ii)  default  in making any
     payment  of any  interest  on any such  Indebtedness  beyond  the period of
     grace,  if any,  provided in the  instrument or agreement  under which such
     Indebtedness was created; or (iii) default in the observance or performance
     of any other  agreement or condition  relating to any such  Indebtedness or
     contained in any instrument or agreement  evidencing,  securing or relating
     thereto,  or any other event shall occur or condition  exist, the effect of
     which  default or other event or  condition  is to cause,  or to permit the
     holder or beneficiary of such Indebtedness (or a trustee or agent on behalf
     of such  holder  or  beneficiary)  to cause,  with the  giving of notice if
     required,  such  Indebtedness to become due prior to its stated maturity or
     (in the case of any such Indebtedness  constituting a Guarantee Obligation)
     to become payable;  provided,  that a default, event or condition described
     in clause (i),  (ii) or (iii) of this  paragraph  (e) shall not at any time
     constitute an Event of Default unless,  at such time, one or more defaults,
     events or conditions  of the type  described in clauses (i), (ii) and (iii)
     of this paragraph (e) shall have occurred and be continuing with respect to
     Indebtedness   the   outstanding   principal   amount  of  which   exceeds,
     individually,  $2,000,000, or in the aggregate, $5,000,000 (or with respect
     to any Junior  Subordinated  Notes  regardless  of whether the  outstanding
     principal  amount  of such  Indebtedness  at such  time  exceeds  any  such
     threshold); or

          (f) (i) any  Borrower  shall  commence any case,  proceeding  or other
     action (A) under any existing or future law of any  jurisdiction,  domestic
     or foreign, relating to bankruptcy, insolvency, reorganization or relief of
     debtors, seeking to have an order for relief entered with respect to it, or
     seeking  to   adjudicate   it  a   bankrupt   or   insolvent,   or  seeking
     reorganization,    arrangement,    adjustment,   winding-up,   liquidation,
     dissolution,  composition  or other relief with respect to it or its debts,
     or (B) seeking appointment of a receiver, trustee,  custodian,  conservator
     or other similar  official for it or for all or any substantial part of its
     assets, or any Borrower shall make a general  assignment for the benefit of
     its  creditors;  or (ii) there shall be commenced  against any Borrower any
     case,  proceeding  or other  action of a nature  referred  to in clause (i)
     above  that (A)  results  in the entry of an order  for  relief or any such
     adjudication  or appointment or (B) remains  undismissed,  undischarged  or
     unbonded for a period of 60 days; or (iii) there shall be commenced against
     any Borrower any case,  proceeding  or other action  seeking  issuance of a
     warrant of attachment,  execution, distraint or similar process against all
     or any substantial part of its assets that results in the entry of an order
     for any such relief that shall not have been vacated, discharged, or stayed
     or bonded pending appeal within 60 days from the entry thereof; or (iv) any
     Borrower shall take any action in furtherance of, or indicating its consent
     to,  approval of, or  acquiescence  in, any of the acts set forth in clause
     (i),  (ii), or (iii) above;  or (v) any Borrower  shall  generally  not, or
     shall be unable to, or shall  admit in writing  its  inability  to, pay its
     debts as they become due; or

          (g) (i) any Person shall engage in any  "prohibited  transaction"  (as
     defined in Section 406 of ERISA or Section 4975 of the Code)  involving any
     Plan, (ii) any "accumulated  funding deficiency" (as defined in Section 302
     of ERISA),  whether or not waived,  shall exist with respect to any Plan or
     any Lien in favor of the PBGC or a Plan  shall  arise on the  assets of any
     Borrower or any Commonly Controlled Entity,  (iii) a Reportable Event shall
     occur with  respect  to, or  proceedings  shall  commence to have a trustee
     appointed,  or a trustee shall be appointed, to administer or to terminate,
     any  Single  Employer  Plan,  which  Reportable  Event or  commencement  of
     proceedings or  appointment  of a trustee is, in the reasonable  opinion of
     the Required Lenders,  likely to result in the termination of such Plan for
     purposes  of Title  IV of  ERISA,  (iv)  any  Single  Employer  Plan  shall
     terminate  for  purposes  of Title IV of  ERISA,  (v) any  Borrower  or any
     Commonly  Controlled  Entity  shall,  or in the  reasonable  opinion of the
     Required  Lenders is likely to, incur any  liability in  connection  with a
     withdrawal  from, or the Insolvency or  Reorganization  of, a Multiemployer
     Plan or (vi) any other event or condition shall occur or exist with respect
     to a Plan;  and in each case in clauses (i) through (vi) above,  such event

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                                                                              64


     or condition,  together with all other such events or  conditions,  if any,
     could, in the sole judgment of the Required Lenders, reasonably be expected
     to have a Material Adverse Effect; or

          (h) one or more  judgments or decrees shall be entered  against one or
     more  Borrowers  involving in the  aggregate a liability (to the extent not
     paid or fully  covered  by  insurance  as to which the  relevant  insurance
     company has  acknowledged  coverage) of  $2,000,000  or more,  and all such
     judgments or decrees  shall not have been  vacated,  discharged,  stayed or
     bonded pending appeal within 30 days from the entry thereof; or

          (i) any of the Security  Documents shall cease, for any reason,  to be
     in full force and effect, or any Borrower or any Affiliate of any Borrower,
     shall so assert, or any Lien created by any of the Security Documents shall
     cease to be enforceable and of the same effect and priority purported to be
     created thereby; or

          (j)  the  guarantee  contained  in  Section  2 of  the  Guarantee  and
     Collateral  Agreement shall cease, for any reason,  to be in full force and
     effect or any Borrower or any Affiliate of any Borrower shall so assert; or

          (k) a Change of Control shall occur; or

          (l) any Junior  Subordinated  Notes shall cease, for any reason, to be
     validly subordinated to the Obligations, as provided in the relevant Junior
     Subordinated  Note  Indenture,  or  any  Borrower,  any  Affiliate  of  any
     Borrower,  the trustee in respect of the Junior  Subordinated  Notes or the
     holders  of  a  majority  in  aggregate  principal  amount  of  the  Junior
     Subordinated Notes shall so assert;

          (m)  any  license,   approval  or  permit  held  by  any  Borrower  is
     terminated,  withdrawn  or not  renewed,  or  suspended  for more  than ten
     Business Days and such termination,  withdrawal,  non-renewal or suspension
     could, in the judgment of the Required  Lenders,  reasonably be expected to
     have a Material Adverse Effect;

          (n) any material term of the Intercreditor  Agreement shall cease, for
     any reason, to be in full force and effect, or any Borrower,  any Affiliate
     of any  Borrower,  the Second  Lien  Collateral  Agent or the  Second  Lien
     Required  Lenders  (as  each  such  term is  defined  in the  Intercreditor
     Agreement) shall so assert.

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to any Borrower,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents (including all amounts of L/C Obligations, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) shall immediately become due and
payable, and (B) if such event is any other Event of Default, either or both of
the following actions may be taken: (i) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to ASC, declare the Revolving
Commitments to be terminated forthwith, whereupon the Revolving Commitments
shall immediately terminate; and (ii) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to ASC, declare the Loans (with accrued
interest thereon) and all other amounts owing under this Agreement and the other
Loan Documents (including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the

<PAGE>
                                                                              65


documents required thereunder) to be due and payable forthwith, whereupon the
same shall immediately become due and payable. With respect to all Letters of
Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the Borrowers shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be applied
by the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrowers hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other Obligations
shall have been fully satisfied, the balance, if any, in such cash collateral
account shall be returned to the relevant Borrower (or such other Person as may
be lawfully entitled thereto). Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived by the Borrowers.

                             SECTION IX. THE AGENTS

     9.1.  Appointment.  Each Lender hereby irrevocably  designates and appoints
each Agent as the agent of such Lender under this  Agreement  and the other Loan
Documents,  and each such Lender  irrevocably  authorizes  each  Agent,  in such
capacity,  to take  such  action on its  behalf  under  the  provisions  of this
Agreement  and the other Loan  Documents and to exercise such powers and perform
such  duties  as are  expressly  delegated  to such  Agent by the  terms of this
Agreement and the other Loan  Documents,  together with such other powers as are
reasonably  incidental  thereto.  Notwithstanding  any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary  relationship with any
Lender,  and  no  implied  covenants,   functions,   responsibilities,   duties,
obligations or  liabilities  shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent. Each Lender (a) acknowledges that
it has received a copy of the Intercreditor Agreement, (b) consents to the terms
thereof,  (c)  agrees  that it  will be  bound  by the  Intercreditor  Agreement
(including  the  provisions  of Section  7.05  thereof) and will take no actions
contrary to the provisions of the Intercreditor Agreement and (d) authorizes and
instructs  the  Collateral  Agent to enter into the  Intercreditor  Agreement as
Collateral  Agent and on behalf of such Lender.  The  foregoing  provisions  are
intended as an inducement to the lenders under the Second Lien Loan Documents to
extend credit to ASC, and such lenders are intended third party beneficiaries of
these provisions.

     9.2.  Delegation of Duties.  Each Agent may execute any of its duties under
this   Agreement  and  the  other  Loan   Documents  by  or  through  agents  or
attorneys-in-fact  and shall be  entitled  to advice of counsel  concerning  all
matters  pertaining  to such  duties.  No  Agent  shall be  responsible  for the
negligence or misconduct of any agents or attorneys  in-fact selected by it with
reasonable care.

     9.3.  Exculpatory  Provisions.  Neither any Agent nor any of its  officers,
directors,  employees,  agents,  attorneys-in-fact  or  affiliates  shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Loan Document (except to
the  extent  that any of the  foregoing  are found by a final and  nonappealable
decision of a court of competent  jurisdiction to have resulted from its or such
Person's own gross negligence or willful  misconduct) or (ii) responsible in any
manner to any of the Lenders for any recitals,  statements,  representations  or
warranties  made  by any  Borrower  or any  officer  thereof  contained  in this
Agreement or any other Loan Document or in any certificate, report, statement or
other  document  referred to or provided for in, or received by such Agent under
or in  connection  with,  this  Agreement or any other Loan  Document or for the
value, validity,  effectiveness,  genuineness,  enforceability or sufficiency of
this  Agreement or any other Loan  Document or for any failure of any Borrower a
party thereto to perform its obligations hereunder or thereunder. No Agent shall

<PAGE>
                                                                              66


be under any  obligation  to any  Lender to  ascertain  or to  inquire as to the
observance or performance  of any of the agreements  contained in, or conditions
of, this  Agreement or any other Loan  Document,  or to inspect the  properties,
books or records of any Borrower.

     9.4. Reliance by Agents. Each Agent shall be entitled to rely, and shall be
fully protected in relying, upon any instrument,  writing,  resolution,  notice,
consent,  certificate,  affidavit,  letter, telecopy, telex or teletype message,
statement,  order or other document or conversation believed by it to be genuine
and  correct  and to have  been  signed,  sent or made by the  proper  Person or
Persons and upon advice and  statements of legal counsel  (including  counsel to
the  Borrowers),  independent  accountants  and other  experts  selected by such
Agent.  Each Agent may deem and treat the payee of any Note as the owner thereof
for all purposes unless a written notice of assignment,  negotiation or transfer
thereof shall have been filed with the Administrative Agent. Each Agent shall be
fully  justified in failing or refusing to take any action under this  Agreement
or any  other  Loan  Document  unless  it shall  first  receive  such  advice or
concurrence of the Required Lenders (or, if so specified by this Agreement,  all
Lenders, the Supermajority  Lenders or the applicable Majority Facility Lenders)
as it deems  appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense that may be incurred by it
by reason of taking or continuing  to take any such action.  Each Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement  and the other  Loan  Documents  in  accordance  with a request of the
Required  Lenders  (or, if so  specified by this  Agreement,  all  Lenders,  the
Supermajority  Lenders or the applicable  Majority Facility  Lenders),  and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Loans.

     9.5.  Notice of  Default.  No Agent  shall be deemed to have  knowledge  or
notice of the  occurrence  of any Default or Event of Default  unless such Agent
has received  notice from a Lender or any Borrower  referring to this Agreement,
describing  such  Default or Event of Default and stating  that such notice is a
"notice of default".  In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give notice thereof to the Lenders.  Each
Agent shall take such action with respect to such Default or Event of Default as
shall be  reasonably  directed by the  Required  Lenders (or, if so specified by
this  Agreement,  all  Lenders,  the  Supermajority  Lenders  or the  applicable
Majority Facility Lenders); provided that unless and until such Agent shall have
received  such  directions,  such Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of  Default  as it shall  deem  advisable  in the  best  interests  of the
Lenders.

     9.6.  Non-Reliance  on Agents  and Other  Lenders.  Each  Lender  expressly
acknowledges  that  neither  any  Agent  nor  any  of its  officers,  directors,
employees, agents, attorneys-in-fact or affiliates have made any representations
or warranties to it and that no act by any Agent hereafter taken,  including any
review of the affairs of a Borrower  or any  affiliate  of a Borrower,  shall be
deemed to constitute any representation or warranty by such Agent to any Lender.
Each  Lender  represents  to each Agent that it has,  independently  and without
reliance  upon such Agent or any other Lender,  and based on such  documents and
information  as it  has  deemed  appropriate,  made  its  own  appraisal  of and
investigation  into the  business,  operations,  property,  financial  and other
condition and  creditworthiness  of the Borrowers and their  affiliates and made
its own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon any
Agent or any other Lender,  and based on such  documents and  information  as it
shall deem  appropriate at the time,  continue to make its own credit  analysis,
appraisals and decisions in taking or not taking action under this Agreement and

<PAGE>
                                                                              67


the other Loan Documents,  and to make such  investigation as it deems necessary
to inform itself as to the business,  operations,  property, financial and other
condition and creditworthiness of the Borrowers and their affiliates. Except for
notices,  reports and other documents  expressly required to be furnished to the
Lenders by the Administrative  Agent hereunder,  no Agent shall have any duty or
responsibility  to  provide  any  Lender  with any  credit or other  information
concerning  the  business,   operations,   property,   condition  (financial  or
otherwise),  prospects or creditworthiness of any Borrower or any affiliate of a
Borrower that may come into the possession of such Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.

     9.7.  Indemnification.  The Lenders  agree to  indemnify  each Agent in its
capacity  as such (to the extent not  reimbursed  by the  Borrowers  and without
limiting the obligation of the Borrowers to do so),  ratably  according to their
respective  Aggregate  Exposure  Percentages  in  effect  on the  date on  which
indemnification  is sought under this Section (or, if  indemnification is sought
after the date upon which the  Commitments  shall have  terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages  immediately  prior  to such  date),  from and  against  any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses or  disbursements  of any kind  whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred by or
asserted  against  such  Agent in any way  relating  to or  arising  out of, the
Commitments,  this  Agreement,  any of the other Loan Documents or any documents
contemplated   by  or  referred  to  herein  or  therein  or  the   transactions
contemplated  hereby or  thereby  or any  action  taken or omitted by such Agent
under or in connection with any of the foregoing;  provided that no Lender shall
be liable for the  payment  of any  portion  of such  liabilities,  obligations,
losses,  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent  jurisdiction  to have resulted from such Agent's gross  negligence or
willful misconduct.  The agreements in this Section shall survive the payment of
the Loans and all other amounts payable hereunder.

     9.8. Agents in Their Individual  Capacities.  Each Agent and its affiliates
may make loans to,  accept  deposits  from and  generally  engage in any kind of
business  with any Borrower as though it were not an Agent.  With respect to its
Loans made or renewed by it and with  respect to any Letter of Credit  issued or
participated  in by it, each Agent  shall have the same rights and powers  under
this  Agreement and the other Loan  Documents as any Lender and may exercise the
same as though it were not an Agent,  and the terms "Lender" and "Lenders" shall
include each Agent in its individual capacity.

     9.9. Successor Agents. Each of the Administrative  Agent and the Collateral
Agent may resign in such  capacity  upon 10 days' notice to the Lenders and ASC.
If the  Administrative  Agent  or the  Collateral  Agent  fails to  perform  its
obligations under the Loan Documents,  such Agent may be removed by the Required
Lenders  upon 10 days'  notice to such Agent and ASC. If such Agent shall resign
or be  removed  in  such  capacity  under  this  Agreement  and the  other  Loan
Documents,  then the  Required  Lenders  shall  appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall, unless an Event of
Default  shall have  occurred and be  continuing,  be subject to approval by ASC
(which approval shall not be unreasonably  withheld or delayed),  whereupon such
successor  agent  shall  succeed  to  the  rights,  powers  and  duties  of  the
Administrative  Agent or  Collateral  Agent,  as the  case may be,  and the term
"Administrative  Agent" or "Collateral  Agent",  as applicable,  shall mean such
successor  agent effective upon such  appointment  and approval,  and the former
Agent's rights, powers and duties as such Agent shall be terminated, without any
other  or  further  act or deed on the part of such  former  Agent or any of the
parties to this Agreement or any holders of the Loans. If no successor agent has
accepted  appointment  as the  applicable  Agent  by the  date  that  is 10 days
following the applicable retiring Agent's notice of resignation or removal,  the
applicable  retiring Agent's  resignation  shall  nevertheless  thereupon become
effective,  and the Lenders  shall  assume and perform all of the duties of such
Agent  hereunder  until such time,  if any, as the  Required  Lenders  appoint a
successor agent as provided for above. After any retiring Agent's resignation as
such Agent or its removal  pursuant to this  Section 9, the  provisions  of this
Section 9 shall inure to its  benefit as to any  actions  taken or omitted to be
taken by it while  it was an Agent  under  this  Agreement  and the  other  Loan
Documents.
<PAGE>
                                                                              68


     9.10.  Syndication Agent.  Notwithstanding the foregoing provisions of this
Section IX, the Syndication Agent shall not have any duties or  responsibilities
hereunder in its capacity as such.


                            SECTION X. MISCELLANEOUS

     10.1.  Amendments  and  Waivers.  Neither  this  Agreement,  any other Loan
Document,  nor any terms  hereof or  thereof  may be  amended,  supplemented  or
modified  except in accordance  with the  provisions  of this Section 10.1.  The
Required  Lenders and each Borrower party to the relevant Loan Document may, or,
with the written consent of the Required Lenders,  the Administrative  Agent and
each Borrower  party to the relevant  Loan Document may, from time to time,  (a)
enter into written  amendments,  supplements or modifications  hereto and to the
other Loan Documents or (b) waive,  on such terms and conditions as the Required
Lenders or the Administrative  Agent (with the consent of the Required Lenders),
as the case may be, may specify in such  instrument,  any of the requirements of
this  Agreement  or the other Loan  Documents or any Default or Event of Default
and  its  consequences;  provided,  however,  that no  such  waiver  and no such
amendment,  supplement or modification shall (i) forgive the principal amount or
extend the final  scheduled  date of maturity of any Loan,  extend the scheduled
date of any payment of principal in respect of any Term Loan,  reduce the stated
rate of any interest or fee payable  hereunder  (except in  connection  with the
waiver of applicability  of any  post-default  increase in interest rates (which
waiver shall be effective with the consent of the Majority  Facility  Lenders of
each adversely affected Facility) or extend the date of any payment thereof,  or
increase  the amount or extend the  expiration  date of any  Lender's  Revolving
Commitment,  in each case  without the written  consent of each Lender  directly
affected thereby; (ii) eliminate or reduce the voting rights of any Lender under
this Section 10.1 or under any other Loan Document  without the written  consent
of such Lender; (iii) change the definition of Required Lenders or Supermajority
Lenders,  consent to the  assignment  or transfer by any  Borrower of any of its
rights and  obligations  under  this  Agreement  and the other  Loan  Documents,
release all or substantially all of the Collateral or release any Guarantor from
its  obligations  under  the  Guarantee  and  Collateral  Agreement  (except  in
accordance with Section  10.14),  or change the application of any prepayment of
the Loans or reduction of the Revolving Commitments required pursuant to Section
2.9(b),  in each case without the written  consent of all  Lenders;  (iv) amend,
modify or waive any provision of Section 2.15 without the written consent of the
Majority  Facility  Lenders  in  respect  of each  Facility  adversely  affected
thereby;  (v) reduce the  percentage  specified  in the  definition  of Majority
Facility Lenders with respect to any Facility without the written consent of all
Lenders  under such  Facility;  (vi)  amend,  modify or waive any  provision  of
Section IX without the written consent of each Agent directly  affected thereby;
(vii)  amend,  modify or waive any  provision  of Section 3 without  the written
consent of the Issuing  Lender;  or (viii)  change the  definition  of the terms
"Obligations", "Excess Cash Flow" or "Net Cash Proceeds", expand the obligations
secured  by any of the  Security  Documents  to  include  those  other  than the
Obligations,  amend,  modify or waive any  provision  of  Section  2.9,  Section
7.1(b),  Section  7.2,  Section  7.3,  Section  7.5,  Section  7.8, the last two
sentences  of Section  9.1,  any  provision  of the  Intercreditor  Agreement or
Section 6.5 of the Guarantee and Collateral Agreement, in each case described in
this clause (viii) without the consent of the  Supermajority  Lenders.  Any such
waiver and any such amendment, supplement or modification shall apply equally to
each of the Lenders and shall be binding upon the  Borrowers,  the Lenders,  the
Administrative  Agent and all future  holders  of the Loans.  In the case of any
waiver,  the  Borrowers,  the  Lenders  and the  Administrative  Agent  shall be
restored to their former position and rights  hereunder and under the other Loan
Documents,  and any  Default  or Event of Default  waived  shall be deemed to be
cured and not  continuing;  but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
<PAGE>
                                                                              69


     10.2. Notices. All notices,  requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless otherwise  expressly  provided herein,  shall be deemed to have been duly
given or made when  delivered,  or three Business Days after being  deposited in
the mail,  postage prepaid,  or, in the case of telecopy notice,  when received,
addressed as follows in the case of any Borrower and the  Administrative  Agent,
and  as  set  forth  in  an  administrative   questionnaire   delivered  to  the
Administrative  Agent  and ASC in the  case  of the  Lenders,  or to such  other
address as may be hereafter notified by the respective parties hereto:

        The Borrowers:                c/o American Skiing Company
                                      136 Heber Avenue, #303
                                      Park City, UT 84060
                                      Attention:  Betsy Wallace
                                      Telecopy:  (435) 615-4780
                                      Telephone:  (435) 615-0360

        With a copy to:               American Skiing Company
                                      One Monument Way
                                      Portland, ME 04101
                                      Attention:  Foster A. Stewart, Esq.
                                      Telecopy:  (207) 791-2607
                                      Telephone:  (207) 773-7934

        Administrative Agent:        General Electric Capital Corporation
                                     401 Merritt Seven, Second Floor
                                     Norwalk, CT  06851
                                     Attention:  Jennifer Lane
                                     Telecopy:  (203) 229-1992
                                     Telephone:  (203) 229-1428

provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.

     Notices and other  communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative  Agent;  provided that the  foregoing  shall not apply to notices
pursuant to Section 2 unless  otherwise agreed by the  Administrative  Agent and
the applicable Lender.  The Administrative  Agent or ASC may, in its discretion,
agree to accept notices and other  communications  to it hereunder by electronic
communications  pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications.

     10.3. No Waiver;  Cumulative Remedies.  No failure to exercise and no delay
in exercising, on the part of the Administrative Agent or any Lender, any right,
remedy,  power or privilege  hereunder or under the other Loan  Documents  shall
operate as a waiver  thereof;  nor shall any single or partial  exercise  of any
right,  remedy,  power or  privilege  hereunder  preclude  any other or  further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights,  remedies,  powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
<PAGE>
                                                                              70


     10.4. Survival of Representations  and Warranties.  All representations and
warranties  made  hereunder,  in the other Loan  Documents  and in any document,
certificate or statement  delivered  pursuant  hereto or in connection  herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.

     10.5.  Payment of Expenses and Taxes.  The Borrowers  jointly and severally
agree (a) to pay or reimburse the Administrative Agent and the Syndication Agent
for all their respective reasonable out-of-pocket costs and expenses incurred in
connection  with  the  development,   preparation  and  execution  of,  and  any
amendment,  supplement  or  modification  to, this  Agreement and the other Loan
Documents and any other documents prepared in connection  herewith or therewith,
and the consummation and administration of the transactions  contemplated hereby
and thereby,  including reasonable  appraisal fees and expenses,  the reasonable
fees and  disbursements  of counsel to the  Administrative  Agent and filing and
recording  fees and  expenses  (but  excluding  costs and  expenses  of  surveys
conducted  pursuant to Section  6.6(c)),  with  statements  with  respect to the
foregoing  to be  submitted  to ASC  prior to the  Closing  Date (in the case of
amounts to be paid on the Closing  Date) and from time to time  thereafter  on a
quarterly basis or such other periodic basis as the  Administrative  Agent shall
deem appropriate  (provided that the agreement by the Borrowers to reimburse any
such costs and expenses incurred by the Administrative  Agent in connection with
the  development,  preparation and execution of the Loan Documents and any other
documents  prepared in connection  therewith shall be subject to the limitations
and further  agreements  contained in the fee letter with the Co-Lead  Arrangers
and Joint  Bookrunners (the "Fee Letter")),  (b) to pay or reimburse each Lender
and the  Administrative  Agent  for all  its  costs  and  expenses  incurred  in
connection  with the  enforcement  or  preservation  of any  rights  under  this
Agreement, the other Loan Documents and any such other documents,  including the
fees and disbursements of counsel  (including the allocated fees and expenses of
in-house counsel) to each Lender and of counsel to the Administrative Agent, (c)
to pay,  indemnify,  and hold each Lender and the Administrative  Agent harmless
from,  any and all  recording and filing fees and any and all  liabilities  with
respect  to, or  resulting  from any delay in  paying,  stamp,  excise and other
taxes,  if any,  that may be payable or  determined  to be payable in connection
with the execution and delivery of, or consummation or  administration of any of
the transactions  contemplated by, or any amendment,  supplement or modification
of, or any waiver or consent under or in respect of, this  Agreement,  the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each  Lender  and  the  Administrative  Agent  and  their  respective  officers,
directors,  employees,  affiliates,  agents and  controlling  persons (each,  an
"Indemnitee")   harmless  from  and  against  any  and  all  other  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses or disbursements  of any kind or nature  whatsoever with respect to the
execution,  delivery,  enforcement,   performance  and  administration  of  this
Agreement, the other Loan Documents and any such other documents,  including any
of the  foregoing  relating to the use of proceeds of the Loans or the violation
of,  noncompliance  with or liability under, any Environmental Law applicable to
the  operations of any Borrower or any of the  properties  it owns,  operates or
leases and the reasonable  fees and expenses of legal counsel in connection with
claims,  actions or proceedings by any Indemnitee against any Borrower under any
Loan  Document  (all  the  foregoing  in  this  clause  (d),  collectively,  the
"Indemnified   Liabilities"),   provided,  that  the  Borrowers  shall  have  no
obligation  hereunder to any Indemnitee with respect to Indemnified  Liabilities
to  the  extent  such   Indemnified   Liabilities  are  found  by  a  final  and
nonappealable  decision of a court of competent  jurisdiction  to have  resulted
from the gross  negligence  or willful  misconduct of such  Indemnitee.  Without
limiting  the  foregoing,  and to the extent  permitted by  applicable  law, the
Borrowers agree not to assert and to cause their respective  Subsidiaries not to
assert,  and hereby waive and agree to cause their  respective  Subsidiaries  to
waive,  all rights for contribution or any other rights of recovery with respect
to all claims, demands,  penalties,  fines, liabilities,  settlements,  damages,
costs and expenses of whatever kind or nature, under or related to Environmental
Laws, that any of them may have by statute or otherwise  against any Indemnitee,
except to the extent resulting from the gross  negligence or willful  misconduct
of such Indemnitee. All amounts due under this Section 10.5 shall be payable not
later than 10 days after receipt of written demand therefor.  Statements payable
by the  Borrowers  pursuant to this  Section  10.5 shall be  submitted  to Betsy

<PAGE>
                                                                              71


Wallace  (Telephone No. (435) 615-0360)  (Telecopy No. (435)  615-4780),  at the
address of the  Borrowers  set forth in Section 10.2, or to such other Person or
address  as may be  hereafter  designated  by ASC  in a  written  notice  to the
Administrative  Agent.  The  agreements  in  this  Section  10.5  shall  survive
repayment of the Loans and all other amounts payable hereunder.

     10.6.  Successors  and Assigns;  Participations  and  Assignments.  (a) The
provisions of this  Agreement  shall be binding upon and inure to the benefit of
the parties hereto and their respective  successors and assigns permitted hereby
(including  any  affiliate  of the  Issuing  Lender  that  issues  any Letter of
Credit), except that (i) no Borrower may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and any attempted  assignment or transfer by any Borrower  without such consent
shall be null and void) and (ii) no Lender may assign or otherwise  transfer its
rights or obligations hereunder except in accordance with this Section.

     (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender  may  assign to one or more  assignees  (each,  an  "Assignee")  all or a
portion of its rights and obligations  under this Agreement  (including all or a
portion of its Commitments and the Loans at the time owing to it) with the prior
written consent of:

          (A) the  Borrowers  (such  consent not to be  unreasonably  withheld),
     provided  that  no  consent  of the  Borrowers  shall  be  required  for an
     assignment  to a Lender,  an  affiliate of a Lender,  an Approved  Fund (as
     defined below) or, if a Default has occurred and is  continuing,  any other
     Person;

          (B)  the  Administrative  Agent,  provided  that  no  consent  of  the
     Administrative  Agent shall be required for an  assignment of all of or any
     portion  of a Loan to a Lender,  an  Affiliate  of a Lender or an  Approved
     Fund; and

          (C) the Issuing Lender, provided that no consent of the Issuing Lender
     shall be required for an assignment of all or any portion of a Term Loan or
     a Revolving A Commitment.

               (ii)  Assignments  shall be subject to the  following  additional
          conditions:

          (A) except in the case of an assignment to a Lender, an affiliate of a
     Lender or an Approved Fund or an assignment of the entire  remaining amount
     of the assigning  Lender's  Commitments  or Loans under any  Facility,  the
     amount of the Commitments or Loans of the assigning  Lender subject to each
     such  assignment  (determined  as of the date the Assignment and Assumption
     with respect to such assignment is delivered to the  Administrative  Agent)
     shall not be less than  $1,000,000  unless  each of the  Borrowers  and the
     Administrative  Agent otherwise consent,  provided that (1) no such consent
     of the Borrowers  shall be required if an Event of Default has occurred and
     is  continuing  and (2) such amounts shall be aggregated in respect of each
     Lender and its affiliates or Approved Funds, if any;

          (B) the parties to each  assignment  shall  execute and deliver to the
     Administrative  Agent  an  Assignment  and  Assumption,   together  with  a
     processing and recordation fee of $3,500; and

          (C) the  Assignee,  if it shall not be a Lender,  shall deliver to the
     Administrative Agent an administrative questionnaire.

     For the purposes of this  Section  10.6,  "Approved  Fund" means any Person
(other than a natural person) that is engaged in making, purchasing,  holding or
investing in bank loans and similar  extensions of credit in the ordinary course
of its  business  and that is  administered  or managed by (a) a Lender,  (b) an
Affiliate  of a Lender  or (c) an  entity  or an  Affiliate  of an  entity  that
administers or manages a Lender.
<PAGE>
                                                                              72


     (iii) Subject to acceptance  and  recording  thereof  pursuant to paragraph
(b)(iv) below,  from and after the effective  date specified in each  Assignment
and  Assumption  the  Assignee  thereunder  shall be a party  hereto and, to the
extent of the interest  assigned by such  Assignment  and  Assumption,  have the
rights and  obligations  of a Lender  under this  Agreement,  and the  assigning
Lender  thereunder  shall,  to the  extent  of the  interest  assigned  by  such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption  covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall  continue to be entitled to the benefits of Sections
2.16,  2.17, 2.18 and 10.5). Any assignment or transfer by a Lender of rights or
obligations  under this  Agreement  that does not comply with this  Section 10.6
shall be treated for  purposes of this  Agreement  as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

     (iv) The Administrative  Agent,  acting for this purpose as an agent of the
Borrowers,  shall  maintain at one of its offices a copy of each  Assignment and
Assumption  delivered to it and a register for the  recordation of the names and
addresses of the Lenders,  and the Commitments  of, and principal  amount of the
Loans and L/C  Obligations  owing to, each Lender  pursuant to the terms  hereof
from  time to time  (the  "Register").  The  entries  in the  Register  shall be
conclusive,  and the Borrowers, the Administrative Agent, the Issuing Lender and
the  Lenders  may treat each  Person  whose  name is  recorded  in the  Register
pursuant  to the terms  hereof as a Lender  hereunder  for all  purposes of this
Agreement, notwithstanding notice to the contrary.

     (v) Upon its receipt of a duly completed Assignment and Assumption executed
by an assigning Lender and an Assignee, the Assignee's completed  administrative
questionnaire  (unless the Assignee  shall already be a Lender  hereunder),  the
processing and  recordation fee referred to in paragraph (b) of this Section and
any  written  consent  to such  assignment  required  by  paragraph  (b) of this
Section,  the  Administrative  Agent shall accept such Assignment and Assumption
and record the  information  contained  therein in the  Register.  No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.

     (c) (i) Any  Lender  may,  without  the  consent  of the  Borrowers  or the
Administrative Agent, sell participations to one or more banks or other entities
(a  "Participant")  in all or a portion of such Lender's  rights and obligations
under this  Agreement  (including  all or a portion of its  Commitments  and the
Loans  owing to it);  provided  that (A) such  Lender's  obligations  under this
Agreement  shall  remain   unchanged,   (B)  such  Lender  shall  remain  solely
responsible to the other parties hereto for the performance of such  obligations
and (C) the  Borrowers,  the  Administrative  Agent,  the Issuing Lender and the
other  Lenders  shall  continue to deal solely and directly  with such Lender in
connection with such Lender's rights and obligations  under this Agreement.  Any
agreement  pursuant to which a Lender sells such a  participation  shall provide
that such Lender shall retain the sole right to enforce  this  Agreement  and to
approve  any  amendment,  modification  or  waiver  of  any  provision  of  this
Agreement;  provided that such  agreement may provide that such Lender will not,
without the consent of the Participant, agree to any amendment,  modification or
waiver that (1) requires the consent of each Lender  directly  affected  thereby
pursuant to the proviso to the second  sentence of Section 10.1 and (2) directly
affects such  Participant.  Subject to paragraph  (c)(ii) of this  Section,  the
Borrowers  agree that each  Participant  shall be  entitled  to the  benefits of
Sections  2.16,  2.17 and 2.19 to the same extent as if it were a Lender and had
acquired its interest by  assignment  pursuant to paragraph (b) of this Section.
To the extent  permitted by law, each  Participant also shall be entitled to the
benefits  of  Section  10.7(b)  as  though  it  were  a  Lender,  provided  such
Participant shall be subject to Section 10.7(a) as though it were a Lender.
<PAGE>
                                                                              73



     (ii) A  Participant  shall not be entitled  to receive any greater  payment
under Section 2.16 or 2.17 than the  applicable  Lender would have been entitled
to receive with respect to the participation  sold to such  Participant,  unless
the sale of the  participation  to such  Participant is made with the Borrowers'
prior written consent.  Any Participant  that is a Non-U.S.  Lender shall not be
entitled to the benefits of Section 2.17 unless such  Participant  complies with
Section 2.17(d).

     (d) Any Lender may at any time pledge or assign a security  interest in all
or any portion of its rights under this Agreement to secure  obligations of such
Lender,  including any pledge or assignment to secure  obligations  to a Federal
Reserve Bank or the Federal Home Loan Bank,  and this Section shall not apply to
any such pledge or  assignment  of a security  interest;  provided  that no such
pledge or assignment of a security  interest  shall release a Lender from any of
its  obligations  hereunder or substitute  any such pledgee or Assignee for such
Lender as a party hereto.

     (e) Each Borrower, upon receipt of written notice from the relevant Lender,
agrees to issue Notes to any Lender  requiring Notes to facilitate  transactions
of the type described in paragraph (d) above.

     (f) Notwithstanding the foregoing, any Conduit Lender may assign any or all
of the Loans it may have funded hereunder to its designating  Lender without the
consent of the Borrowers or the  Administrative  Agent and without regard to the
limitations  set forth in Section  10.6(b).  Each Borrower,  each Lender and the
Administrative  Agent  hereby  confirms  that it will not  institute  against  a
Conduit Lender or join any other Person in instituting  against a Conduit Lender
any   bankruptcy,   reorganization,   arrangement,   insolvency  or  liquidation
proceeding  under any state  bankruptcy or similar law, for one year and one day
after the payment in full of the latest maturing commercial paper note issued by
such Conduit Lender; provided, however, that each Lender designating any Conduit
Lender  hereby  agrees to  indemnify,  save and hold  harmless  each other party
hereto for any loss,  cost,  damage or expense  arising out of its  inability to
institute  such a proceeding  against such Conduit  Lender during such period of
forbearance.

     10.7.  Adjustments;  Set-off.  (a) Except to the extent that this Agreement
expressly provides for payments to be allocated to a particular Lender or to the
Lenders  under a  particular  Facility,  if any Lender (a  "Benefitted  Lender")
shall,  at any time after the Loans and other amounts  payable  hereunder  shall
have  become  immediately  due and payable  pursuant  to Section 8,  receive any
payment of all or part of the Obligations owing to it, or receive any collateral
in respect thereof (whether voluntarily or involuntarily,  by set-off,  pursuant
to  events  or  proceedings  of the  nature  referred  to in  Section  8(f),  or
otherwise),  in a greater  proportion  than any such  payment  to or  collateral
received by any other  Lender,  if any, in respect of the  Obligations  owing to
such other Lender, such Benefitted Lender shall purchase for cash from the other
Lenders a  participating  interest in such portion of the  Obligations  owing to
each such other Lender, or shall provide such other Lenders with the benefits of
any such  collateral,  as shall be necessary to cause such Benefitted  Lender to
share the excess payment or benefits of such collateral ratably with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter  recovered  from such  Benefitted  Lender,  such purchase
shall be rescinded,  and the purchase price and benefits returned, to the extent
of such recovery, but without interest.

     (b) In addition to any rights and remedies of the Lenders  provided by law,
each Lender shall have the right, without prior notice to any Borrower, any such
notice  being  expressly  waived by each  Borrower  to the extent  permitted  by
applicable  law,  while  any  Event of  Default  is  continuing,  to set off and
appropriate  and apply  against  any  amount  then due and  payable  any and all
deposits  (general or special,  time or demand,  provisional  or final),  in any
currency,  and any other credits,  indebtedness or claims,  in any currency,  in
each case  whether  direct or  indirect,  absolute  or  contingent,  matured  or
unmatured,  at any time  held or owing by such  Lender  or any  branch or agency
thereof to or for the credit or the account of such Borrower. Each Lender agrees
promptly to notify the relevant Borrower and the Administrative  Agent after any
such setoff and  application  made by such Lender,  provided that the failure to
give such notice shall not affect the validity of such setoff and application.
<PAGE>
                                                                              74


     10.8.  Counterparts.  This  Agreement may be executed by one or more of the
parties to this  Agreement  on any number of separate  counterparts,  and all of
said counterparts  taken together shall be deemed to constitute one and the same
instrument.  Delivery  of an  executed  signature  page  of  this  Agreement  by
facsimile  transmission  shall be effective  as delivery of a manually  executed
counterpart  hereof.  A set of the  copies of this  Agreement  signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.

     10.9.  Severability.  Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

     10.10.  Integration.  This Agreement and the other Loan Documents represent
the entire agreement of the Borrowers,  the Administrative Agent and the Lenders
with  respect  to the  subject  matter  hereof  and  thereof,  and  there are no
promises,  undertakings,  representations  or warranties  by the  Administrative
Agent or any Lender  relative to the subject  matter  hereof not  expressly  set
forth or referred to herein or in the other Loan Documents.

     10.11.  Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

     10.12.   Submission  To   Jurisdiction;   Waivers.   Each  Borrower  hereby
irrevocably and unconditionally:

          (a)  submits  for  itself  and its  property  in any  legal  action or
     proceeding relating to this Agreement and the other Loan Documents to which
     it is a party,  or for  recognition  and  enforcement  of any  judgment  in
     respect thereof, to the non-exclusive general jurisdiction of the courts of
     the State of New York,  the  courts of the United  States for the  Southern
     District of New York, and appellate courts from any thereof;

          (b) consents that any such action or proceeding may be brought in such
     courts and waives any  objection  that it may now or hereafter  have to the
     venue of any such  action  or  proceeding  in any such  court or that  such
     action or proceeding was brought in an inconvenient court and agrees not to
     plead or claim the same;

          (c) agrees that  service of process in any such  action or  proceeding
     may be effected by mailing a copy thereof by registered  or certified  mail
     (or any  substantially  similar  form of mail),  postage  prepaid,  to such
     Borrower at its address set forth in Section 10.2 or at such other  address
     of which  the  Administrative  Agent  shall  have  been  notified  pursuant
     thereto;

          (d)  agrees  that  nothing  herein  shall  affect  the right to effect
     service of process in any other manner  permitted by law or shall limit the
     right to sue in any other jurisdiction; and
<PAGE>
                                                                              75


          (e) waives,  to the maximum extent not prohibited by law, any right it
     may have to claim or recover in any legal action or proceeding  referred to
     in this Section any special, exemplary, punitive or consequential damages.

     10.13. Acknowledgments. Each Borrower hereby acknowledges that:

          (a) it has been advised by counsel in the  negotiation,  execution and
     delivery of this Agreement and the other Loan Documents;

          (b) neither the Administrative  Agent nor any Lender has any fiduciary
     relationship  with or duty to any Borrower  arising out of or in connection
     with  this  Agreement  or  any  of  the  other  Loan  Documents,   and  the
     relationship between Administrative Agent and Lenders, on one hand, and the
     Borrowers, on the other hand, in connection herewith or therewith is solely
     that of debtor and creditor; and

          (c) no joint venture is created  hereby or by the other Loan Documents
     or otherwise exists by virtue of the transactions contemplated hereby among
     the Lenders or among the Borrowers and the Lenders.

     10.14.  Releases of Guarantees and Liens. (a)  Notwithstanding  anything to
the contrary contained herein or in any other Loan Document,  the Administrative
Agent is hereby  irrevocably  authorized by each Lender (without  requirement of
notice to or consent of any Lender except as expressly required by Section 10.1)
to take any action  requested by any Borrower having the effect of releasing any
Collateral  or  guarantee  obligations  (i) to the  extent  necessary  to permit
consummation  of any transaction not prohibited by any Loan Document or that has
been   consented  to  in  accordance   with  Section  10.1  or  (ii)  under  the
circumstances described in paragraph (b) below.

     (b) At such time as the Obligations  shall have been Fully  Satisfied,  the
Collateral  shall be released from the Liens created by the Security  Documents,
and the  Security  Documents  and all  obligations  (other than those  expressly
stated  to  survive  such  termination)  of the  Administrative  Agent  and each
Borrower under the Security  Documents shall terminate,  all without delivery of
any instrument or performance of any act by any Person. The Administrative Agent
agrees to execute such further  agreements,  instruments  and other documents as
may be reasonably  requested by the Borrowers,  at the expense of the Borrowers,
to evidence and effect such termination.

     10.15.  Confidentiality.  Each of the Administrative  Agent and each Lender
agrees to keep  confidential  all non-public  information  provided to it by any
Borrower,  the  Administrative  Agent or any Lender pursuant to or in connection
with this Agreement that is designated by the provider  thereof as confidential;
provided  that nothing  herein  shall  prevent the  Administrative  Agent or any
Lender from disclosing any such information (a) to the Administrative Agent, any
other  Lender or any  affiliate  thereof,  (b) subject to an agreement to comply
with the provisions of this Section, to any actual or prospective  Transferee or
any direct or indirect  counterparty to any Swap Agreement (or any  professional
advisor  to  such  counterparty),  (c)  to  its  employees,  directors,  agents,
attorneys,  accountants and other  professional  advisors or those of any of its
affiliates,  (d)  upon the  request  or  demand  of any  Governmental  Authority
(including any Governmental Authority having regulatory oversight of any Lender,
including the FDIC and the Federal Home Loan Bank), (e) in response to any order
of any court or other  Governmental  Authority  or as may  otherwise be required
pursuant to any  Requirement  of Law,  (f) if  requested or required to do so in
connection with any litigation or similar proceeding, (g) that has been publicly
disclosed,  (h) to the National  Association of Insurance  Commissioners  or any
similar  organization or any nationally  recognized  rating agency that requires
access to information about a Lender's  investment  portfolio in connection with
ratings issued with respect to such Lender or to any Lender's  funding source or
lender,  or (i) in connection with the exercise of any remedy hereunder or under
any other Loan Document.
<PAGE>
                                                                              76


     10.16.  Joint and Several  Liability of  Borrowers.  Each  Borrower  hereby
irrevocably and  unconditionally  agrees that it is jointly and severally liable
for  all  of the  liabilities,  obligations,  covenants  and  agreements  of the
Borrowers hereunder and under the other Loan Documents, whether now or hereafter
existing or due or to become due. The  obligations  of the  Borrowers  under the
Loan  Documents  may be  enforced  by the  Administrative  Agent and the Lenders
against any one or more Borrowers or all of them in any manner or order selected
by the  Administrative  Agent or the requisite Lenders in their sole discretion.
Each Borrower hereby  irrevocably  waives (i) any rights of subrogation and (ii)
any rights of contribution,  indemnity or  reimbursement,  in each case, that it
may acquire or that may arise  against any other  Borrower due to any payment or
performance made under this Agreement,  in each case until all Obligations shall
have been Fully  Satisfied.  Without  limiting the foregoing  provisions of this
Section 10.16, each Borrower acknowledges and agrees that:

          (a) its  obligations  under this  Agreement  shall remain  enforceable
     against  it  even  though  such  obligations  may be  unenforceable  or not
     allowable  against any other Borrower due to the existence of an insolvency
     proceeding involving any other Borrower;

          (b) its  obligations  under  this  Agreement  are  independent  of the
     obligations of each other Borrower, and a separate action or actions may be
     brought  and  prosecuted   against  it  in  respect  of  such   obligations
     irrespective of whether any action is brought against any other Borrower or
     any other Borrower is joined in any such action or actions;

          (c) it  hereby  irrevocably  waives  any  defenses  it may now have or
     hereafter acquire in any way relating to, any or all of the following:

               (i) any lack of validity or  enforceability  of this Agreement or
          any agreement or instrument  relating  thereto in respect of any other
          Borrower;

               (ii) any change in the time, manner or place of payment of, or in
          any other term of, all or any of the obligations of any other Borrower
          under or in  respect  of this  Agreement,  or any other  amendment  or
          waiver of or any consent to departure from this Agreement,  in respect
          of any other Borrower;

               (iii) any change,  restructuring  or termination of the structure
          or existence of any other Borrower;

               (iv) the  failure of any other  Person to execute or deliver  any
          other  agreement or the release or reduction of liability of any other
          Person with  respect to any  obligations  of the  Borrower  under this
          Agreement; or

               (v) any other circumstance  (including any statute of limitations
          but other than the  Obligations  having been Fully  Satisfied)  or any
          existence  of or reliance on any  representation  by any other  Person
          that might otherwise constitute a defense available to, or a discharge
          of, any other Borrower;

          (d)  its  obligations  under  this  Agreement  shall  continue  to  be
     effective or be reinstated,  as the case may be, if at any time any payment
     of any such  obligations  is rescinded or must otherwise be returned by any
     Person  upon the  insolvency,  bankruptcy  or  reorganization  of any other
     Borrower, all as though such payment had not been made; and
<PAGE>
                                                                              77


          (e) it hereby  unconditionally  and  irrevocably  waives  any right to
     revoke  its joint  and  several  liability  under  the Loan  Documents  and
     acknowledges that such liability is continuing in nature and applies to all
     obligations of the Borrowers under the Loan Documents, whether existing now
     or in the future.

          (f)  Anything  herein or in any other Loan  Document  to the  contrary
     notwithstanding,  the maximum liability of each Borrower under this Section
     and  under  the  other  Loan  Documents  for the  obligations  of the other
     Borrowers (in its capacity as a joint and several  obligor and a guarantor)
     shall in no  event  exceed  the  amount  which  can be  guaranteed  by such
     Borrower  under  applicable  federal and state laws  relating to fraudulent
     conveyances  or transfers or the insolvency of debtors (after giving effect
     to any applicable  right of contribution  established in Section 2.2 of the
     Guarantee and Collateral Agreement).

     10.17.  Appointment of ASC as Borrowers'  Agent. ASC is hereby appointed as
the  Borrowers'  agent  hereunder  by  each  Borrower  (in  such  capacity,  the
"Borrowers' Agent").  Each Borrower hereby authorizes,  directs and empowers ASC
to act for and in the name of such Borrower and as its agent hereunder and under
the Loan Documents and other instruments and agreements  referred to herein. ASC
hereby  accepts  each  such  appointment.   Each  Borrower  hereby   irrevocably
authorizes  ASC to take such  action on such  Borrower's  behalf and to exercise
such  powers  hereunder,  under the other  Loan  Documents,  and under the other
agreements and instruments  referred to herein or therein as may be contemplated
being  taken or  exercises  by such  Borrower by the terms  hereof and  thereof,
together  with such powers as may be  incidental  thereto,  including  to borrow
hereunder  and  deliver  notices of  borrowing,  Letter of Credit  requests  and
Compliance  Certificates  hereunder, to repay or prepay Loans made hereunder, to
reduce the Commitments,  to pay interests,  fees, costs and expenses incurred in
connection  with the Loans,  this Agreement,  the other Loan Documents,  and the
other agreements and instruments  referred to herein, to receive from or deliver
to the Administrative Agent any notices,  statements,  reports,  certificates or
other documents or instruments  contemplated herein, in the other Loan Documents
or in any other  agreement or instrument  referred to herein and to receive from
or transmit to the  Administrative  Agent any Loan  proceeds  or  payments.  The
Administrative  Agent  and  each  Lender  shall  be  entitled  to  rely  on  the
appointment and authorization of ASC with respect to all matters related to this
Agreement,  the other Loan  Documents and any other  agreements  or  instruments
referred to herein  whether or not any  particular  provision  hereof or thereof
specifies that such matters may or shall be undertaken by Borrowers'  Agent.  In
reliance hereon, the Administrative Agent and each Lender may deal only with ASC
with the same effect as if the  Administrative  Agent or such  Lenders had dealt
with each Borrower separately and individually.

     10.18.  Killington  Indenture.  The Lenders and Agents acknowledge that the
Obligations  of  Killington,  Ltd.  are not  superior in right of payment to the
unsecured  Indebtedness  of Killington,  Ltd.  issued pursuant to the Indentures
dated December 21, 1984,  September 25, 1986, November 5, 1987, October 13, 1989
and October 24, 1990 between Killington, Ltd. and The Howard Bank, as trustee.

     10.19.  WAIVERS OF JURY TRIAL. EACH BORROWER,  THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY  IRREVOCABLY AND  UNCONDITIONALLY  WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.

<PAGE>
                                                                              78


     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed and delivered by their proper and duly  authorized  officers as of
the day and year first above written.

                           AMERICAN SKIING COMPANY


                           By: /s/ Foster A Stewart, Jr
                              -----------------------------------
                              Name: Foster A Stewart, Jr
                              Title: Senior Vice President


                           AMERICAN SKIING COMPANY RESORT PROPERTIES, INC.
                           ASC LEASING, INC.
                           ASC UTAH
                           BLUNDER BAY DEVELOPMENT, INC.
                           DOVER RESTAURANTS, INC.
                           KILLINGTON, LTD.
                           KILLINGTON RESTAURANTS, INC.
                           L.B.O. HOLDING, INC.
                           MOUNT SNOW LTD.
                           MOUNTAINSIDE
                           PERFECT TURN, INC.
                           PICO SKI AREA MANAGEMENT COMPANY
                           S-K-I LTD.
                           STEAMBOAT SKI & RESORT CORPORATION
                           SUGARLOAF MOUNTAIN CORPORATION
                           SUNDAY RIVER LTD.
                           SUNDAY RIVER SKIWAY CORPORATION


                           By:  /s/ Helen E Wallace
                              ---------------------------------
                              Name: Helen E Wallace
                              Title:  Authorized Officer of each of the
                                        foregoing Borrowers


                           GENERAL ELECTRIC CAPITAL CORPORATION, as
                           Administrative Agent, as Collateral Agent and as a
                           Lender

                           By: /s/ Julia R Meade
                              ---------------------------------
                              Name: Julia R Meade
                              Title: Duly Authorized Signatory


                           CREDIT SUISSE FIRST BOSTON, as Syndication Agent and
                           as a Lender

                           By: /s/ Robert Hetu
                              ---------------------------------
                              Name: Robert Hetu
                              Title: Director

                           By: /s/ Vanessa Gomez
                              ---------------------------------
                              Name: Vanessa Gomez
                              Title: Associate



                           NATEXIS BANQUES POPULARIES, as a Lender

                           By: /s/ Harold Birk
                              ---------------------------------
                           Name: Harold Birk
                           Title: Vice President


                           By: /s/ Tefta Ghilaga
                              ----------------------------------
                           Name: Tefta Ghilaga
                           Title: Vice President


                           WELLS FARGO BANK, NA, as a Lender

                           By: /s/ [Illegible]
                              ----------------------------------
                           Name: [Illegible]
                           Title: Sr Vice President