$105,000,000


                          SECOND LIEN CREDIT AGREEMENT


                                      among


                            AMERICAN SKIING COMPANY,


              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...............................18

SECTION II.  AMOUNT AND TERMS OF COMMITMENTS..................................18
         2.1.     Commitments.................................................18
         2.2.     Procedure for Borrowing.....................................18
         2.3.     Repayment of Term Loans.....................................19
         2.4.     Fees, etc...................................................19
         2.5.     Optional Prepayments........................................19
         2.6.     Mandatory Prepayments.......................................19
         2.7.     Conversion and Continuation Options.........................20
         2.8.     Limitations on Eurodollar Tranches..........................21
         2.9.     Interest Rates and Payment Dates............................21
         2.10.    Computation of Interest and Fees............................21
         2.11.    Inability to Determine Interest Rate........................22
         2.12.    Pro Rata Treatment and Payments.............................22
         2.13.    Requirements of Law.........................................23
         2.14.    Taxes.......................................................24
         2.15.    Indemnity...................................................26
         2.16.    Change of Lending Office....................................26
         2.17.    Replacement of Lenders......................................26

SECTION III.  REPRESENTATIONS AND WARRANTIES..................................27
         3.1.     Financial Condition.........................................27
         3.2.     No Change...................................................27
         3.3.     Existence; Compliance with Law..............................27
         3.4.     Power; Authorization; Enforceable Obligations...............28
         3.5.     No Legal Bar................................................28
         3.6.     Litigation..................................................28
         3.7.     No Default..................................................28
         3.8.     Ownership of Property; Liens................................28
         3.9.     Intellectual Property.......................................28
         3.10.    Taxes.......................................................29
         3.11.    Federal Regulations.........................................29
         3.12.    Labor Matters...............................................29
         3.13.    ERISA.......................................................29
         3.14.    Investment Company Act; Other Regulations...................29
         3.15.    Subsidiaries................................................30
         3.16.    Use of Proceeds.............................................30
         3.17.    Environmental Matters.......................................30
         3.18.    Accuracy of Information, etc................................31
         3.19.    Security Documents..........................................31
         3.20.    Solvency....................................................32
         3.21.    Senior Indebtedness.........................................32
         3.22.    Regulation H................................................32
         3.23.    Certain Documents...........................................32
         3.24.    Forest Service Term Special Use Permits.....................32
         3.25.    Location....................................................32
         3.26.    Water Rights................................................33
         3.27.    Grand Summit Resort Properties, Inc.........................33

                                       i

<PAGE>

SECTION IV.  CONDITIONS PRECEDENT.............................................33
         4.1.     Conditions to Loans.........................................33

SECTION V.  AFFIRMATIVE COVENANTS.............................................37
         5.1.     Financial Statements........................................37
         5.2.     Certificates; Other Information.............................38
         5.3.     Payment of Obligations......................................39
         5.4.     Maintenance of Existence; Compliance........................39
         5.5.     Maintenance of Property Insurance...........................39
         5.6.     Inspection of Property; Books and Records; Discussions;
                    Surveys...................................................39
         5.7.     Notices.....................................................39
         5.8.     Environmental Matters.......................................40
         5.9.     Additional Collateral, etc..................................41
         5.10.    Forest Service Permits......................................43
         5.11.    Agreements with Respect to Excluded Subsidiaries............43
         5.12.    Interest Rate Protection....................................43
         5.13.    Post-Closing Obligations....................................43

SECTION VI.  NEGATIVE COVENANTS...............................................44
         6.1.     Minimum Consolidated EBITDA.................................44
         6.2.     Indebtedness................................................44
         6.3.     Liens.......................................................45
         6.4.     Fundamental Changes.........................................46
         6.5.     Disposition of Property.....................................46
         6.6.     Restricted Payments.........................................48
         6.7.     Capital Expenditures........................................48
         6.8.     Investments.................................................49
         6.9.     Optional Payments and Modifications of Certain Debt
                    Instruments...............................................49
         6.10.    Transactions with Affiliates................................50
         6.11.    Sales and Leasebacks........................................50
         6.12.    Swap Agreements.............................................50
         6.13.    Changes in Fiscal Periods...................................50
         6.14.    Restrictive Agreements......................................50
         6.15.    Lines of Business...........................................51
         6.16.    Maintenance Capital Expenditures Variance...................51

SECTION VII.  EVENTS OF DEFAULT...............................................51

SECTION VIII.  THE AGENTS.....................................................54
         8.1.     Appointment.................................................54
         8.2.     Delegation of Duties........................................54
         8.3.     Exculpatory Provisions......................................54
         8.4.     Reliance by Agents..........................................54
         8.5.     Notice of Default...........................................55
         8.6.     Non-Reliance on Agents and Other Lenders....................55
         8.7.     Indemnification.............................................55
         8.8.     Agents in Their Individual Capacities.......................56
         8.9.     Successor Agents............................................56
         8.10.    Syndication Agent...........................................56

                                       ii
<PAGE>

SECTION IX.  MISCELLANEOUS....................................................56
         9.1.     Amendments and Waivers......................................56
         9.2.     Notices.....................................................57
         9.3.     No Waiver; Cumulative Remedies..............................58
         9.4.     Survival of Representations and Warranties..................58
         9.5.     Payment of Expenses and Taxes...............................58
         9.6.     Successors and Assigns; Participations and Assignments......59
         9.7.     Adjustments; Set-off........................................62
         9.8.     Counterparts................................................62
         9.9.     Severability................................................62
         9.10.    Integration.................................................63
         9.11.    GOVERNING LAW...............................................63
         9.12.    Submission To Jurisdiction; Waivers.........................63
         9.13.    Acknowledgments.............................................63
         9.14.    Releases of Guarantees and Liens............................64
         9.15.    Confidentiality.............................................64
         9.16.    WAIVERS OF JURY TRIAL.......................................64

                                      iii

<PAGE>

SCHEDULES:

1.1A              Commitments
1.1B              Owned and Leased Real Property
1.1C              Excluded Immaterial Subsidiaries
1.1D              [Intercreditor Agreement]
1.1E              New Junior Subordinated Note Terms
1.1G              Certain Non-Operating Assets
3.1               Certain Dispositions
3.4               Consents, Authorizations, Filings and Notices
3.6               Certain Litigation
3.15              Subsidiaries
3.19(a)           UCC Filings
3.19(b)           Mortgage Filings
3.22              Certain Real Property
3.24              Forest Service Permits
3.5(b)            Insurance Requirements
3.11              Certain Excluded Subsidiaries
4.1(k)(vi)        Post-Closing Landlord Certificates
5.13(b)           Certain Real Property Leases
5.2(b)            Existing Indebtedness
5.3(e)            Existing Liens
6.8(d)            Existing Investments
6.8(j)            Contemplated Sunday River Investment
6.14              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                 [Intentionally Omitted]
H                 Form of Intercreditor Agreement
I                 Form of Prepayment Option Notice

                                       iv

<PAGE>


                  SECOND LIEN CREDIT AGREEMENT (this "Agreement"), dated as of
November 24, 2004, among AMERICAN SKIING COMPANY (the "Borrower"), 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 the Borrower ending July 2005, $3,000,000; (b) for the fiscal
year of the Borrower ending July 2006, $5,000,000; and (c) for each fiscal year
of the Borrower 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.

                  "Agreement":  as defined in the preamble hereto.

                  "Applicable Margin":  for ABR Loans, 7.00% and for Eurodollar
Loans, 8.00%.

                  "Appraisal":  an appraisal of the fair market value of
property and business, performed by ResortNorth Valuation or another Independent
Appraiser, delivered pursuant to Section 4.1(q) and accepted and approved by the
Administrative Agent.
<PAGE>
                                                                               2

                  "Appraised Value": the fair market value of the subject
property determined by the Appraisal delivered pursuant to Section 4.1(q) or a
subsequent Appraisal or Desktop Appraisal. 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 Restricted Group Members 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 9.6(b).

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

                  "Assignee":  as defined in Section 9.6(b).

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

                  "Benefitted Lender":  as defined in Section 9.7(a).

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

                  "Borrower":  as defined in the preamble hereto.

                  "Borrowing Date":  any Business Day specified by the Borrower
as a date on which the Borrower requests the 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.
<PAGE>
                                                                               3


                  "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.

                  "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 the Borrower 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 the Borrower.

                  "Closing Date":  November 24, 2004.

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

                  "Collateral":  all property of the Loan Parties, 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 obligation of such Lender
to make a Loan to the Borrower in a principal amount equal to the amount set
forth under the heading "Commitment" opposite such Lender's name on Schedule
1.1A.  The original aggregate amount of the Commitments is $105,000,000.

                  "Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with any Restricted Group Member
within the meaning of Section 4001 of ERISA or is part of a group that includes
a Restricted Group Member and that is treated as a single employer under Section
414 of the Code.
<PAGE>
                                                                               4

                  "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 2.13, 2.14 or 9.5 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.

                  "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 the Borrower 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
the Borrower and its Restricted Subsidiaries at such date, but excluding (a) the
current portion of any Funded Debt of the Borrower and its Restricted
Subsidiaries and (b) without duplication of clause (a) above, all Indebtedness
consisting of revolving loans under the First Lien Loan Documents to the extent
otherwise included therein.

                  "Consolidated EBITDA": for any period (a) net income or (loss)
of the Borrower 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 the Borrower 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 the Borrower and its Restricted Subsidiaries, (ii)
amortization expense of the Borrower 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 the Borrower and
its Restricted Subsidiaries, (v) non-cash expenses associated with the Phantom
Stock Plan, (vi) other non-cash items of the Borrower 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 the Borrower 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.
<PAGE>
                                                                               5

                  "Consolidated Funded Debt" means, as of each date of
determination, without duplication (a) all Indebtedness for borrowed money of
the Borrower 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 for which the Borrower 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
for which the Borrower 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 the Borrower 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 the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than a Subsidiary of the Borrower) in which the Borrower or any of its
Restricted Subsidiaries has an ownership interest, except to the extent that any
such income is actually received by the Borrower or such Restricted Subsidiary
in the form of dividends or similar distributions and (c) the undistributed
earnings of any Subsidiary of the Borrower 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.

                  "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 the Borrower 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 7, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
<PAGE>
                                                                               6


                  "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 the Borrower
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.

                  "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
<PAGE>
                                                                               7


                  "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 7,
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 the Borrower, 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 the Borrower 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 (in
each case, determined in accordance with GAAP), (ii) the aggregate amount
actually paid by the Borrower 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 under
the First Lien Loan Documents during such fiscal year to the extent accompanying
permanent optional reductions of the revolving commitments thereunder and all
optional prepayments of the Loans and the First Lien Term Loans during such
fiscal year, (iv) the aggregate amount of all regularly scheduled principal
payments of Funded Debt (including the Loans and the First Lien Term Loans) of
the Borrower 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 the Borrower 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 First 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 6.8 and (iii) the Subsidiaries
of the Borrower designated as Excluded Immaterial Subsidiaries on Schedule 1.1C
or designated by the Borrower 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 the Borrower 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 the Borrower or its
Subsidiaries in connection therewith.
<PAGE>
                                                                               8


                  "Existing Junior Subordinated Note Indenture": the Indenture,
dated as of August 31, 2001, between the Borrower 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 the
Borrower or its Subsidiaries in connection therewith.

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

                  "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.

                  "Fee Letter":  as defined in Section 9.5.

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

                  "First Lien Credit Agreement": the First Lien Credit
Agreement, dated as of the date hereof, among the Restricted Group Members, 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.

                  "First Lien Debt": (a) the extensions of credit to the
Restricted Group Members pursuant to the First Lien Credit Agreement and (b)
Guarantee Obligations of the Guarantors in respect thereof.

                  "First Lien Facilities Event of Default":  an "Event of
Default" under the First Lien Loan Documents.

                  "First 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 First
Lien Debt.

                  "First Lien Loans":  the term loans made under the First Lien
Credit Agreement.

                  "Foreign Subsidiary":  any Subsidiary of the Borrower 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 3.24.

                  "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 shall have been paid in full in cash
and (b) all fees, expenses and other amounts then due and payable which
constituted Obligations shall have been paid in full in cash.
<PAGE>
                                                                               9


                  "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 Borrower, Indebtedness in respect of the
Loans.

                  "Funding Office": the office of the Administrative Agent
specified in Section 9.2 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 6.1,
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 3.1. 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 the Borrower 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 the Borrower's financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, 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 the Borrower 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 the Borrower and each
Guarantor, 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,

<PAGE>
                                                                              10


(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 the Borrower in good faith.

                  "Guarantor":  each Restricted Subsidiary of the Borrower.

                  "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 7(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 the
Borrower, 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 the Borrower in the future for services unrelated to
those arising under this Agreement, so long as the Borrower has given the
Administrative Agent notice of such unrelated services performed or to be
performed by such Independent Appraiser.
<PAGE>
                                                                              11


                  "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 Restricted Group Members, the Collateral Agent and
the First 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.

                  "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, nine or twelve) months thereafter, as selected by the
Borrower 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, nine or
twelve) months thereafter, as selected by the Borrower 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) the Borrower may not select an Interest  Period that would extend
     beyond the date final payment is due on the 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; and

          (iv) the first Interest Period selected for any Loan shall be required
     to end on the last Business Day of a calendar  month and the Borrower shall
     be permitted to select an initial  Interest Period of less than one month's
     duration in order to satisfy this requirement.
<PAGE>
                                                                              12


                  "Investments":  as defined in Section 6.8.

                  "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.

                  "Landlord Certificate":  as defined in Section 4.1(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.

                  "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.

                  "Loan Parties":  each Group Member that is a party to a Loan
Document.

                  "LTM EBITDA":  as defined in Section 6.1.

                  "Material Adverse Effect": a material adverse effect on (a)
the business, property, operations, condition (financial or otherwise) or
prospects of the Restricted Group Members 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 6.5) that yields gross proceeds
to the Borrower 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 6.5, 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.

                  "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 3.19(b).
<PAGE>
                                                                              13


                  "Mortgages": each of the mortgages and deeds of trust made by
any Loan Party 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 6.5) 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 a 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
the Borrower 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 the Borrower in connection with the New Junior Subordinated
Notes.

                  "Non-Excluded Taxes":  as defined in Section 2.14(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 the
Borrower (or, to the extent so used, for which the 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 the Borrower certifies
to the Administrative Agent at the time of sale (i) will be replaced within
twelve (12) months from the sale date (x) by the Borrower 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 the Borrower's operations or
access to any portion of the Ski Terrain and (e) other assets of the Restricted
Group Members 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 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).
<PAGE>
                                                                              14


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

                  "Non-U.S. Lender": as defined in Section 2.14(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": the unpaid principal of and interest on
(including interest accruing after the maturity of the Loans and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the 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 the
Borrower to the Administrative Agent or to 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 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 the Borrower pursuant
hereto) or otherwise.

                  "Operating Assets":  assets of the Borrower 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 9.6(c).

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

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

                  "Permitted Holder":  Oak Hill.

                  "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.
<PAGE>
                                                                              15


                  "Plan": at a particular time, any employee benefit plan that
is subject to ERISA and in respect of which the Borrower or any 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": the Borrower's 8.5% Series B Convertible
Participating Preferred Stock, the Borrower's 12% Series C-1 Convertible
Participating Preferred Stock, the Borrower's 15% Series C-2 Preferred Stock and
the Borrower's Series D Participating Preferred Stock, collectively.

                  "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 5.2(b).

                  "Purchase Money Indebtedness":  as defined in Section 6.2(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 the Borrower or any Restricted Subsidiary.

                  "Register":  as defined in Section 9.6(b).

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

                  "Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by any Restricted
Group Member in connection therewith that are not applied to prepay Loans
pursuant to Section 2.6(a) as a result of the delivery of a Reinvestment Notice.

                  "Reinvestment Event":  any Recovery Event in respect of which
the Borrower 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 the Borrower (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 the business of a
Restricted Group Member (such business as permitted pursuant to Section 6.15).

                  "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 6.7, as applicable) to acquire or repair assets useful
in the business of a Restricted Group Member (such business as permitted
pursuant to Section 6.15).

                  "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 the Borrower shall have determined
not to, or shall have otherwise ceased to, acquire or repair assets useful in
the Borrower's business (such business as permitted pursuant to Section 6.15)
with all or any portion of the relevant Reinvestment Deferred Amount.
<PAGE>
                                                                              16


                  "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 aggregate unpaid principal amount of the Loans then outstanding.

                  "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 the Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Borrower.

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

                  "Restricted Payments":  as defined in Section 6.6.

                  "Restricted Subsidiary": each Subsidiary of the Borrower other
than any Excluded Subsidiary.

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

                  "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 Collateral Agent
granting a Lien on any property of any Person to secure the obligations and
liabilities of any Loan Party under any Loan Document.

                  "Senior Subordinated Note Indenture": the Indenture, dated as
of June 28, 1996, between the Borrower 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 the Borrower
or its Subsidiaries in connection therewith.

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

                  "Series A Preferred Stock":  the 10.5% Repriced Convertible
Exchangeable Preferred Stock of the Borrower.
<PAGE>
                                                                              17


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

                  "Ski Resort Properties": the ski resort properties of the
Restricted Subsidiaries 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 Restricted Group Member and any "Lender" under the First Lien Loan Documents
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
Restricted Group Member, excluding non-profit homeowners associations and resort
village management associations controlled directly or indirectly by such
Restricted Group Member. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Borrower.

                  "Supermajority Lenders": at any time, the holders of more than
66 2/3% of (a) until the Closing Date, the Commitments then in effect and (b)
thereafter, the aggregate unpaid principal amount of the Loans 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>
                                                                              18


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

                  "Transferee":  any Assignee or Participant.

                  "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 Restricted Group Member 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.  Commitments.  Subject to the terms and conditions hereof, each Lender
severally  agrees to make a term loan (a "Loan") to the  Borrower on the Closing
Date in an amount  equal to the amount of the  Commitment  of such  Lender.  The
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 2.7.

     2.2.  Procedure for Borrowing.  The Borrower 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

<PAGE>
                                                                              19


anticipated  Closing  Date)  requesting  that the Lenders  make the Loans on the
Closing  Date.  The Loans made on the Closing Date shall  initially be ABR Loans
and, unless otherwise agreed by the Administrative Agent in its sole discretion,
no 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 Lender  thereof.  Not later than 12:00 Noon, New York City
time, on the Closing Date each Lender shall make available to the Administrative
Agent at the Funding  Office an amount in immediately  available  funds equal to
the Loan to be made by such Lender.  The  Administrative  Agent shall credit the
account of the Borrower on the books of such office of the Administrative  Agent
with the aggregate of the amounts made available to the Administrative  Agent by
the Lenders in immediately available funds.

     2.3.  Repayment  of Term Loans.  The Borrower  shall repay all  outstanding
Loans on November 24, 2011.

     2.4. Fees, etc. The Borrower agrees to pay to the Administrative  Agent the
fees in the amounts and on the dates as set forth in any fee agreements with the
Administrative Agent and to perform any other obligations contained therein.

     2.5.  Optional  Prepayments.  The Borrower may at any time and from time to
time prepay the Loans, in whole or in part, without premium (except as specified
below) or penalty,  upon  irrevocable  notice  delivered  by the Borrower 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  Borrower  shall  also pay any  amounts  owing
pursuant to Section 2.15; and, provided,  further, that each optional prepayment
made  on or  prior  to the  first  anniversary  of the  Closing  Date  shall  be
accompanied by payment of a fee in an amount equal to 3% of the principal amount
prepaid,  each optional  prepayment made subsequent to the first  anniversary of
the Closing Date and on or prior to the second  anniversary  of the Closing Date
shall  be  accompanied  by  payment  of a fee in an  amount  equal  to 2% of the
principal  amount prepaid and each optional  prepayment  made  subsequent to the
second  anniversary of the Closing Date and on or prior to the third anniversary
of the Closing Date shall be  accompanied  by  prepayment  of a fee in an amount
equal to 1% of the principal amount prepaid. 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  shall  be in an  aggregate
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.

     2.6. Mandatory Prepayments.  (a) If any Capital Stock or Indebtedness shall
be issued or incurred by any Restricted Group Member (excluding any Indebtedness
incurred  in  accordance  with  Section  6.2),  then,  except to the extent such
amounts have been  applied to prepay the First Lien Term Loans,  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  Lenders  as a  prepayment  of the Loans in  accordance  with
paragraphs (d) and (e) of Section 2.6.

          (b) If on any date the  Borrower or any  Restricted  Subsidiary  shall
     receive Net Cash  Proceeds  from any  Material  Asset Sale or any  Recovery
     Event then, if no First Lien Term Loans or revolving  commitments under the
     First Lien Loan  Documents  remain  outstanding,  and 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 6.5), such Net
     Cash Proceeds  shall be offered on such date to the Lenders as a prepayment
     of the  Loans  as set  forth  in  paragraphs  (d) and (e) of  Section  2.6;
     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 offered to the Lenders
     as a prepayment of the Loans in accordance  with  paragraphs (d) and (e) of
     Section 2.6.
<PAGE>
                                                                              20


          (c) If,  for any  fiscal  year of the  Borrower,  commencing  with the
     fiscal year ending July 31,  2005,  there shall be Excess Cash Flow,  then,
     except to the extent  such  amount  shall  have been  applied to prepay the
     First  Lien  Term  Loans  in  accordance  with  the  mandatory   prepayment
     provisions of the First Lien Credit  Agreement,  the Borrower shall, on the
     relevant Excess Cash Flow Application  Date, offer to the Lenders an amount
     equal to 50% of such Excess Cash Flow as a  prepayment  of the Loans as set
     forth in Section  2.6(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.

          (d) With  respect  to the  amount of any  mandatory  prepayment  offer
     required  pursuant  to  paragraph  (a),  (b) or (c) of this  Section  (such
     amount,  the  "Prepayment  Amount"),  the Borrower will, on or prior to the
     date specified in this Section 2.6 for such offer, give the  Administrative
     Agent telephonic notice (promptly confirmed in writing) requesting that the
     Administrative  Agent prepare and provide to each Lender a notice (each,  a
     "Prepayment Option Notice") in accordance with the following  sentence.  As
     promptly as practicable after receiving such notice from the Borrower,  the
     Administrative  Agent will send to each Lender a Prepayment  Option Notice,
     which shall be in the form of Exhibit I and shall include (i) an offer (the
     "Offer")  by the  Borrower  to  prepay  on the  date  (each,  a  "Mandatory
     Prepayment Date") that is 10 Business Days after the date of the Prepayment
     Option  Notice,  the Loans of such Lender by an amount equal to the portion
     of the  Prepayment  Amount  indicated in such  Lender's  Prepayment  Option
     Notice  as being  allocable  to such  Lender's  Loans  (with  such  portion
     allocable to such Lender being equal to its  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 Lenders  which do not accept the Offer,  the Loans of
     such  Lender by an amount  equal to the  lesser of (x) such  Lender's  then
     outstanding  Loan (after  deducting  therefrom the amount  allocable to the
     prepayment  thereof as a result of such  Lender's  acceptance of the Offer)
     and (y) a maximum amount  specified by such Lender in its acceptance of the
     Additional  Offer.  Each 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 an acceptance of
     such Offer and Additional  Offer),  it being  understood that no Lender may
     accept the Additional  Offer made to it unless it accepts the Offer made to
     it.  On the  Mandatory  Prepayment  Date,  the  Borrower  shall  pay to the
     Administrative Agent, for the benefit of each Lender which has accepted the
     Offer, (i) the prepayment amount specified in the Offer made to it and (ii)
     if such  Lender has also  accepted  the  Additional  Offer,  such  Lender's
     ratable share (based upon the  respective  amounts  accepted by each Lender
     accepting the Additional Offer made to it) of the amounts  specified in the
     Offers made to Lenders, if any which reject the Offers made to them.

          (e) The  application  of any  prepayment  pursuant to this Section 2.6
     shall be made, first to ABR Loans and, second, to Eurodollar Loans, in each
     case in accordance with Section 2.12(b). Each prepayment of the Loans under
     this Section shall be accompanied  by accrued  interest to the date of such
     prepayment on the amount prepaid.

     2.7. Conversion and Continuation  Options.  (a) The Borrower may elect from
time to time to convert Eurodollar Loans to ABR Loans by the Borrower 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 Borrower may elect from time to time to convert ABR Loans
to  Eurodollar  Loans by the  Borrower  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 may be converted into a Eurodollar Loan when any Event

<PAGE>
                                                                              21


of Default has occurred and is continuing  and the  Administrative  Agent or the
Required  Lenders 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 the Borrower
     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 may be continued as such when
     any Event of Default has occurred and is continuing and the  Administrative
     Agent has or the  Required  Lenders  have  determined  in its or their sole
     discretion not to permit such continuations, and provided, further, that if
     the Borrower 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.

     2.8.  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.

     2.9.  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 the  Required  Lenders  (which  option  shall be
     deemed exercised  automatically if an Event of Default  specified in clause
     (i) or (ii) of paragraph  (f) of Section VII has  occurred  with respect to
     the Borrower,  if any Event of Default shall occur and be  continuing,  all
     outstanding  Loans (whether or not overdue) shall bear interest during such
     continuance  at a rate per annum equal to the rate that would  otherwise be
     applicable  thereto  pursuant to the  foregoing  provisions of this Section
     plus 2%.

          (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.

     2.10.  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 the  Borrower  and the  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 the
Borrower  and the  Lenders  of the  effective  date and the  amount of each such
change in interest rate.
<PAGE>
                                                                              22


          (b) Each determination of an interest rate by the Administrative Agent
     pursuant to any provision of this Agreement shall be conclusive and binding
     on the  Borrower  and the  Lenders in the absence of  manifest  error.  The
     Administrative Agent shall, at the request of the Borrower,  deliver to the
     Borrower a statement  showing  the  quotations  used by the  Administrative
     Agent in determining any interest rate pursuant to Section 2.9(a).

     2.11.  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  Borrower)  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
          Required  Lenders  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 the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans 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 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 shall be made or continued as such, nor shall the
Borrower have the right to convert Loans to Eurodollar Loans.

     2.12. Pro Rata  Treatment and Payments.  (a) Each borrowing by the Borrower
from the Lenders  hereunder  and each  payment by the Borrower on account of any
fee  shall be made pro  rata  according  to the  respective  Percentages  of the
Lenders.

          (b) Each  payment  (including  each  prepayment)  by the  Borrower  on
     account of  principal  of and  interest on the Loans shall be made pro rata
     according  to the  respective  Percentages  of the  Loans  then held by the
     Lenders (except as otherwise provided in Section 2.6(b)).

          (c) All payments  (including  prepayments)  to be made by the 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 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.
<PAGE>
                                                                              23


          (d) 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  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 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.

          (e) Unless  the  Administrative  Agent  shall  have been  notified  in
     writing by the Borrower  prior to the date of any payment due to be made by
     the Borrower  hereunder that the Borrower will not make such payment to the
     Administrative Agent, the Administrative Agent may assume that the 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  Agent by the  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 the Borrower.

     2.13.  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 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 2.14 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;
<PAGE>
                                                                              24


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 to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower 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 the
Borrower (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 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 the Borrower (with a copy
     to the  Administrative  Agent) of a written request therefor,  the Borrower
     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  2.13(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 the Borrower  (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 Borrower 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 the Borrower 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 Borrower  pursuant to this Section shall survive the  termination of
     this  Agreement and the payment of the Loans and all other amounts  payable
     hereunder.

     2.14.  Taxes.  (a) All payments made by the Borrower  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 the  Borrower  shall  not 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

<PAGE>
                                                                              25


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 Borrower  with respect to such  Non-Excluded  Taxes
pursuant to this paragraph.

          (b) In  addition,  the  Borrower  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 the
     Borrower, as promptly as possible thereafter the 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 the Borrower  showing payment thereof.  If the 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 Borrower
     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
     the  Borrower  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 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
     Borrower  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 the Borrower at
     any time it  determines  that it is no longer in a position  to provide any
     previously  delivered  certificate  to the  Borrower  (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 the Borrower is located,  or any treaty to which such jurisdiction is
     a party, with respect to payments under this Agreement shall deliver to the
     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 the Borrower,  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 the Borrower or with respect to which the
     Borrower has paid additional amounts pursuant to this Section, it shall pay

<PAGE>
                                                                              26


     over such  refund to the  Borrower  (but  only to the  extent of  indemnity
     payments  made,  or additional  amounts  paid,  by the Borrower  under this
     Section  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 the  Borrower,  upon the request of the  Administrative  Agent or such
     Lender,  agrees to repay the  amount  paid over to the  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 the 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.

     2.15.  Indemnity.  The Borrower agrees 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 the Borrower in making a borrowing
of,  conversion into or continuation of Eurodollar  Loans after the Borrower has
given a notice  requesting  the same in accordance  with the  provisions of this
Agreement, (b) default by the Borrower in making any prepayment of or conversion
from  Eurodollar  Loans  after  the  Borrower  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 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 the  Borrower  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.

     2.16.  Change  of  Lending  Office.  Each  Lender  agrees  that,  upon  the
occurrence  of any event giving rise to the operation of Section 2.13 or 2.14(a)
with  respect  to such  Lender,  it will,  if  requested  by the  Borrower,  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 Borrower or the rights of any Lender
pursuant to Section 2.13 or 2.14(a).

     2.17.  Replacement  of Lenders.  The Borrower shall be permitted to replace
any Lender that (a) requests reimbursement for amounts owing pursuant to Section
2.13 or 2.14(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

<PAGE>
                                                                              27


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  2.16 so as to eliminate  the  continued  need for
payment of amounts owing  pursuant to Section 2.13 or 2.14(a) and shall not have
waived its rights 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 First Lien Term Loans and other  amounts
owing  to such  Lender  on or prior to such  date  under  the  First  Lien  Loan
Documents),  (v) the  Borrower  shall be liable to such  replaced  Lender  under
Section  2.15 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 9.6 (provided that (x)
the Borrower  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 Borrower shall pay all additional amounts (if any) required
pursuant  to  Section  2.13 or  2.14(a),  as the case may be,  and (ix) any such
replacement  shall not be deemed to be a waiver of any rights that the Borrower,
the  Administrative  Agent or any other  Lender  shall have against the replaced
Lender.

                  SECTION III. REPRESENTATIONS AND WARRANTIES

     To induce  the  Administrative  Agent and the  Lenders  to enter  into this
Agreement and to make the Loans, the Borrower hereby  represents and warrants to
the Administrative Agent and each Lender that:

     3.1. Financial  Condition.  The audited  consolidated balance sheets of the
Borrower 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 the Borrower 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 Restricted Group Member 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 3.1, during the
period from July 26,  2004 to and  including  the date hereof  there has been no
Disposition by the Borrower or any Restricted Subsidiary of any material part of
its business or property.

     3.2. 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.

     3.3.  Existence;  Compliance with Law. Each Restricted  Group Member (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.
<PAGE>
                                                                              28


     3.4. Power; Authorization;  Enforceable Obligations.  Each Restricted Group
Member 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
Restricted  Group  Member  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 3.4, 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 3.19.  Each Loan Document has been duly executed
and  delivered on behalf of each  Restricted  Group Member party  thereto.  This
Agreement  constitutes,  and  each  other  Loan  Document  upon  execution  will
constitute,  a legal,  valid and binding  obligation  of each  Restricted  Group
Member party thereto,  enforceable  against each such Restricted Group Member 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).

     3.5.  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 Restricted Group Member
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 3.5, no Requirement of Law
or  Contractual  Obligation  applicable  to any  Restricted  Group  Member could
reasonably be expected to have a Material Adverse Effect.

     3.6.  Litigation.  No litigation,  investigation or proceeding of or before
any arbitrator or Governmental  Authority is pending or, to the knowledge of any
Restricted Group Member, threatened by or against the 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.

     3.7. No Default.  Except as described on Schedule 3.7, no Restricted  Group
Member 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.

     3.8.  Ownership of Property;  Liens. Each Restricted Group Member 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 6.3.

     3.9.  Intellectual  Property.  Each  Restricted  Group Member  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

<PAGE>
                                                                              29


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 Restricted Group Member 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 any
Restricted  Group  Member  does not  infringe on the rights of any Person in any
material respect.

     3.10.  Taxes.  Each Restricted Group Member 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  Restricted
Group  Member);  no tax Lien has been  filed  that is not  permitted  by Section
6.3(a),  and, to the knowledge of any Restricted Group Member, as of the Closing
Date,  no claim is being  asserted,  with  respect to any such tax, fee or other
charge.

     3.11.  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, the 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.

     3.12. 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 Restricted Group Member pending or, to the knowledge
of any Restricted Group Member, threatened; (b) hours worked by and payment made
to  employees of any  Restricted  Group Member 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  Restricted  Group Member on
account of employee health and welfare  insurance have been paid or accrued as a
liability on the books of the relevant Restricted Group Member.

     3.13.  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  Restricted  Group  Member 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 Restricted Group Member nor
any Commonly  Controlled  Entity would become subject to any material  liability
under ERISA if any  Restricted  Group Member 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 Restricted Group Members'  knowledge,  no Multiemployer Plan
is in Reorganization or Insolvent.

     3.14. Investment Company Act; Other Regulations. No Restricted Group Member
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 Restricted Group Member is subject to regulation under any Requirement of Law

<PAGE>
                                                                              30


(other  than  Regulation  X of the  Board)  that  limits  its  ability  to incur
Indebtedness.

     3.15. Subsidiaries.  Except as disclosed to the Administrative Agent by any
Restricted Group Member in writing from time to time after the Closing Date, (a)
Schedule  3.15 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  Restricted  Group  Member  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
Restricted Group Member, except as created by the Loan Documents or as described
on Schedule 3.15.

     3.16.  Use of  Proceeds.  The  proceeds of the Loans shall be used to repay
amounts  outstanding  under the  Existing  Credit  Agreement  and to purchase or
redeem Senior Subordinated Notes and to pay related fees and expenses.

     3.17.  Environmental  Matters.  Except as set forth on Schedule 3.17 or as,
individually  or in the  aggregate,  could not  reasonably be expected to have a
Material Adverse Effect:

          (a) each Restricted  Group Member:  (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  Restricted  Group  Member  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  Restricted
     Group Member under any applicable  Environmental Law or otherwise result in
     costs to any Restricted Group Member, or (ii) interfere with any Restricted
     Group  Member'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;

          (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 Restricted Group Member is, or to the knowledge of any Restricted
     Group Member will become,  a party that is pending or, to the  knowledge of

<PAGE>
                                                                              31


     any Restricted  Group Member,  threatened,  or (ii) to the knowledge of any
     Restricted Group Member,  affecting or that could reasonably be expected to
     affect any Restricted Group Member;

          (d) no  Restricted  Group Member 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  Restricted  Group  Member  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 Restricted Group Member 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.

     3.18. 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  Restricted  Group  Member  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 Restricted Group Members 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  Restricted  Group  Member  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.

     3.19.  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 First
Lien 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
3.19(a) in  appropriate  form are filed in the  offices  specified  on  Schedule
3.19(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
3.19(a) are taken),  the Lien created by the Guarantee and Collateral  Agreement

<PAGE>
                                                                              32


shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of any  Restricted  Group Member 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 as provided in the  Intercreditor  Agreement and except,  in the
case of Collateral  other than Pledged Stock,  Liens  permitted by Section 6.3).
(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 3.19(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  Restricted  Group Members 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
as provided in the Intercreditor Agreement and except Liens permitted by Section
6.3).  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 Restricted Group Member.

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

     3.21. Senior Indebtedness.  The Obligations of each Restricted Group Member
constitute "Designated Senior Debt" of the 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 the Borrower.  The  obligations of each Restricted
Group Member under the Guarantee and  Collateral  Agreement  constitute  "Senior
Debt" of such  Restricted  Group  Member  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 the Borrower.

     3.22.  Regulation  H.  Except as set forth on  Schedule  3.22,  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.

     3.23. Certain Documents. The Restricted Group Members 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.

     3.24.  Forest  Service Term Special Use  Permits.  The Forest  Service Term
Special Use Permits are listed on Schedule 3.24 are each held by at least one of
the  Restricted  Group Members 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  Restricted  Group Member as
conducted during the fiscal year ended  immediately  prior to entering into this
Agreement and as planned to be operated.

     3.25. 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
Restricted Group Member,  (ii) leased by the applicable  Restricted Group Member
pursuant  to a lease  listed on Part B of  Schedule  1.1B,  (iii)  subject  to a
recorded  easement in favor of the applicable  Restricted Group Member,  or (iv)
with respect to which a Forest Service Term Special Use Permit is in effect.
<PAGE>
                                                                              33


     3.26.  Water Rights.  The Water Rights of the Restricted  Group Members are
sufficient for the ongoing ski operations of the Restricted Group Members.

     3.27.  Grand Summit Resort  Properties,  Inc. No Restricted Group Member is
liable for any Indebtedness or other obligations of GSRP, nor has any Restricted
Group  Member  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
Restricted Group Member.

                        SECTION IV. CONDITIONS PRECEDENT

     4.1.  Conditions  to Loans.  The  agreement of each Lender to make the Loan
requested  to  be  made  by it is  subject  to  the  satisfaction,  prior  to or
concurrently  with the making of such Loan 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,  the  Borrower  and each  initial
     Lender, (ii) the Guarantee and Collateral Agreement, executed and delivered
     by the Borrower and each Guarantor 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
     Restricted Group Member and the First Lien Collateral Agent.

          (c)  Financial  Statements.   The  Lenders  shall  have  received  the
     financial  statements  and audit report  described in the first sentence of
     Section 3.1, and such  financial  statements  shall not, in the  reasonable
     judgment  of the  Lenders,  reflect  any  material  adverse  change  in the
     consolidated  financial  condition  of the  Borrower,  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  4.1(k)(v))  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 Restricted  Group Members are located,  and such search shall reveal
     no liens on any of the assets of the  Restricted  Group Members  except for
     Liens  permitted  by Section 6.3 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 the Borrower 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>
                                                                              34


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

               (ii) the legal  opinion of local  counsel to the Loan  Parties 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 First  Lien
     Collateral  Agent (as defined in the  Intercreditor  Agreement)  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 as  provided in the  Intercreditor  Agreement  or with
     respect to Liens  expressly  permitted by Section 6.3),  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 3.25,  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 Restricted Group Member),  and (b) all compilation plans
          on which the foregoing surveyors reports and statements are based.
<PAGE>
                                                                              35


               (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 the
          Borrower  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 Restricted Group Member is the
          lessee  other than the  leaseholds  listed on Schedule  4.1(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 Restricted  Group Member 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  Restricted  Group  Member is a
     party,  and (c)  evidence of all Water Rights  required for any  Restricted
     Group Member's  current or intended  operations or for any property  owned,
     leased, or otherwise operated by any Restricted Group Member.

          (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.
<PAGE>
                                                                              36


          (n) First Lien Loans. The Borrower shall have received  $85,000,000 in
     gross proceeds from the borrowing of First Lien Term Loans.

          (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 the  Borrower  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,
     the Borrower 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 (as defined in the First
     Lien Credit Agreement).

          (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 the Borrower 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
     the  Borrower  which shall  document  the  solvency of the Borrower and its
     Subsidiaries  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  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 the Borrower  shall have exchanged such Capital Stock
     on a  dollar-for-dollar  basis  for New  Junior  Subordinated  Notes of the
     Borrower.

          (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.
<PAGE>
                                                                              37


          (w)  Representations  and Warranties.  Each of the representations and
     warranties  made by any Loan  Party 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.

          (x) 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.

                        SECTION V. AFFIRMATIVE COVENANTS

                  The Borrower hereby agrees that, until the Obligations have
been Fully Satisfied, the Borrower shall, and shall cause each of its Restricted
Subsidiaries to:

     5.1.  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 the  Borrower  (i) a  copy  of the  audited
     consolidated   balance   sheets  of  the  Borrower  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 the Borrower 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 the Borrower,  the  unaudited  consolidated  balance  sheets of the
     Borrower 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 Restricted Subsidiaries 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 the Borrower  prepares  internally  with respect to the  Restricted
     Subsidiaries  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>
                                                                              38


     5.2. 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  5.1(a) or (b),  (i) a  certificate  of a  Responsible
     Officer  of the  Borrower  stating  that,  to the best of such  Responsible
     Officer's  knowledge,  each Loan Party  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 Restricted Group Member with the provisions
     of this  Agreement  referred  to  therein  as of the last day of the fiscal
     quarter  or  fiscal  year of the  Borrower,  as the  case  may be,  (iii) a
     certificate   of  a   Responsible   Officer  of  the  Borrower   certifying
     Consolidated EBITDA for the four fiscal quarter period ended as of the last
     day of the fiscal  quarter or fiscal year of the Borrower,  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  Restricted  Group Member and a list of any  Intellectual
     Property acquired by any Restricted Group Member 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 the Borrower, a detailed consolidated budget
     for the following fiscal year (including a projected  consolidated  balance
     sheet of the Restricted Group Members 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 the  Borrower  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 the
     Borrower,  a narrative  discussion and analysis of the financial  condition
     and results of operations of the  Restricted  Group Members 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 the  Borrower  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 the
     Borrower may make to, or file with, the SEC;

          (f) promptly, copies of any agreements of the kind described in clause
     (a) of Section 4.1(l) not previously delivered hereunder; and
<PAGE>
                                                                              39


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

     5.3.  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 7(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
Restricted Group Member.

     5.4. 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 6.4
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  VII(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.

     5.5.  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 5.5(b).

     5.6. 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 Restricted Group
Members with  officers and  employees of the  Restricted  Group Members 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.

     5.7. 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 Restricted Group Member or (ii) litigation, investigation
     or  proceeding  that may exist at any time  between  any  Restricted  Group
     Member 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>
                                                                              40


          (c) any litigation or proceeding affecting any Restricted Group Member
     (i) in which the amount  involved is  $1,000,000 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  Restricted  Group  Member  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  the  Borrower  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 the Borrower's management,  could reasonably be expected to have
     a Material Adverse Effect.

Each notice pursuant to this Section 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 Restricted Group Member proposes to take
with respect thereto.

     5.8.  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 Restricted
     Group  Member  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  Restricted   Group  Member  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 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).
<PAGE>
                                                                              41


          (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  the   Borrower   with
     responsibility   therefor  and  the  Borrower'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 a  Restricted  Group  Member 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 Restricted  Group Member  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  Restricted  Group  Member 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 Restricted Group Member
     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
     Restricted  Group Member 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 Restricted Group Member
     is  aware  regarding  matters   concerning  the  EH&S  Program  that  could
     reasonably be expected to materially  affect the Restricted  Group Member'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).

     5.9. Additional Collateral,  etc. (a) With respect to any property acquired
after the  Closing  Date by any  Restricted  Group  Member  (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  6.3(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 the  provisions  of the  Intercreditor
Agreement  and to Liens  permitted  by  Section  6.3),  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

<PAGE>
                                                                              42


     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  acquired  after the Closing Date by any
     Restricted  Group Member  (other than any such real  property  subject to a
     Lien  expressly  permitted  by Section  6.3(f)),  promptly  (i) execute and
     deliver  a  first  priority  Mortgage  (subject  to the  provisions  of the
     Intercreditor Agreement and to Liens permitted by Section 6.3), 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  Restricted  Group  Member  (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  Restricted  Group
     Member  (subject to the  provisions of the  Intercreditor  Agreement and to
     Liens permitted by Section 6.3), (ii) deliver to the Collateral  Agent (or,
     if the First  Lien  Loan  Documents  are then in  effect,  the  First  Lien
     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  Restricted  Group Member,  (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,  (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 the provisions of the  Intercreditor  Agreement and to
     Liens  permitted  by  Section  6.3)  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 4.1(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 Restricted Group
     Member,  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 Restricted  Group Member  (subject to the provisions of the
     Intercreditor  Agreement  and to Liens  permitted  by  Section  6.3),  (ii)
     deliver to the  Collateral  Agent (or, if the First Lien Loan Documents are

<PAGE>
                                                                              43


     then  in  effect,   the  First  Lien  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
     Restricted Group Member, 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  4.1(h) shall be
     satisfactory).

     5.10. 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  Restricted  Group Member;  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.

     5.11.  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 any  Restricted  Group Member,  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 Restricted Group Members 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 5.11
     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 Restricted Group Member that owns
     such Excluded Immaterial Subsidiary.

     5.12.  Interest Rate  Protection.  In the case of the Borrower,  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 Loans and the
First 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.

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

          (b) Within 60 days after the Closing Date,  cause the operating leases
     of the  Restricted  Group  Members  listed on Schedule 5.13 to be converted
     into capital leases.
<PAGE>
                                                                              44


                         SECTION VI. NEGATIVE COVENANTS

     The Borrower hereby agrees that, until the Obligations are Fully Satisfied,
the Borrower shall not, and shall not permit any of its Restricted  Subsidiaries
to, directly or indirectly:

     6.1. Minimum Consolidated EBITDA. Permit Consolidated EBITDA for any period
of four fiscal quarters of the Borrower 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                                 $35,000,000
      FY2005 Quarter 3                                 $35,000,000
      FY2005 Quarter 4                                 $35,000,000
      FY2006 Quarter 1                                 $35,000,000
      FY2006 Quarter 2                                 $35,000,000
FY2006 Quarter 3 and thereafter                        $38,250,000

provided that, for the purpose of calculating Consolidated EBITDA for the first
and second fiscal quarters of the Borrower's fiscal year 2005, Consolidated
EBITDA shall be determined as if all operating leases set forth on Schedule 5.13
has been converted into capital leases during all relevant time periods in such
fiscal quarter.

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

          (a)  Indebtedness of any Restricted  Group Member pursuant to any Loan
     Document;

          (b) Indebtedness  (including  Purchase Money  Indebtedness (as defined
     below))  outstanding  on the date hereof and listed on Schedule  6.2(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 6.3(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 6.2(b) and any refinancings,  refundings, renewals or
     extensions  thereof,  is not greater than $30,000,000 during the Borrower's
     2005 and 2006 fiscal years, $27,500,000 during the Borrower'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 4.1(p) have been met) and the
     Existing Junior Subordinated Notes;

          (e) Indebtedness of any Loan Party to any other Loan Party;

          (f) Payment and performance  bonds entered into in the ordinary course
     of business in support of the activities of any Restricted  Group Member 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 $2,000,000;
<PAGE>
                                                                              45


          (g)  Indebtedness  constituting  First 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.

     6.3. 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  Restricted
     Group Member 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  Restricted  Group
     Member 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
     Restricted Group Member;

          (e) Liens in existence on the date hereof  listed on Schedule  6.3(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  the  Borrower  or  any  other
     Subsidiary  incurred  pursuant to Section 6.2(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>
                                                                              46


          (g) Liens created pursuant to the Security Documents;

          (h) any interest or title of a lessor under any lease  entered into by
     any  Restricted  Group  Member 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  Restricted  Group  Member  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
     6.8(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  Restricted  Group Member 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 6.5;

          (m) Liens on Collateral  securing  Indebtedness  incurred  pursuant to
     Section 6.2(g),  which Liens may also secure Specified Swap Agreements,  in
     each case 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.

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

          (b) any Restricted  Subsidiary may Dispose of any or all of its assets
     (upon  voluntary  liquidation  or otherwise) in a Disposition  permitted by
     Section  6.5(c) or (ii)  pursuant  to any other  Disposition  permitted  by
     Section 6.5; and

          (c)  any  Investment   expressly  permitted  by  Section  6.8  may  be
     structured as a merger, consolidation or amalgamation.

     6.5. Disposition of Property.  Dispose of any of its property,  whether now
owned or hereafter acquired, or, in the case of any Restricted Subsidiary, issue
or sell any shares of such Subsidiary's Capital Stock to any Person, except:
<PAGE>
                                                                              47


          (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 Restricted Group Member (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 Restricted Group
     Members  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 Restricted Group Member;

          (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 the  Borrower,  $4,000,000;  provided that in any fiscal
     year  of the  Borrower,  the  $4,000,000  amount  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 6.1, 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 Restricted
          Group Members since the Closing Date exceeds $45,000,000,  75%) of the
          excess, if any, of (x) the aggregate amount  Non-Operating  Asset Sale
          Proceeds received by the Borrower in any fiscal year from Dispositions
          pursuant  to this  clause  (c)  over  (y)  $4,000,000  is  applied  in
          accordance  with  Section  2.6(b)  (and such  amount will be deemed to
          constitute  Net Cash Proceeds of a Material Asset Sale for purposes of
          Section 2.6(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 (ii)
     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 6.8(j)
<PAGE>
                                                                              48


          (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.

     6.6. 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 Restricted  Group Member,  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 Restricted
Group  Member  (collectively,   "Restricted  Payments"),  except  that  (a)  any
Restricted  Group Member may make  Restricted  Payments to any other  Restricted
Group Member and (b) the Borrower 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 the  Borrower  not held by Oak Hill so long as (i) the ratio of (x) the
sum of the outstanding amount of the Loans and the aggregate  outstanding amount
of the First Lien Debt and all available  commitments in respect  thereof 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 5.1(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,  the  Borrower  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) the Borrower will no longer be
subject  to such  reporting  requirements  and,  after  completion  of the final
transaction in such series,  the Borrower is, in fact, no longer subject to such
reporting requirement.

     6.7. Capital Expenditures.  Make or commit to make any Capital Expenditure,
except  Capital  Expenditures  of the  Restricted  Group Members in the ordinary
course of business made while no Event of Default has occurred and is continuing
not  exceeding in any fiscal year of the  Borrower  the sum of (i)  $18,000,000,
(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  6.1(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,  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 6.5(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
Restricted  Group  Members  shall  be  permitted  to  make  additional   Capital
Expenditures  (A) as  described  on  Schedule  6.7 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  6.7  (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

<PAGE>
                                                                              49


fiscal year may be expended for such item in any subsequent fiscal year) and are
for the items  described on such  Schedule  6.7 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 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).

     6.8.  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 6.2;

          (d) (i) existing Investments in the Capital Stock of Subsidiaries that
     are not  Restricted  Group  Members,  as described on Schedule  3.15,  (ii)
     outstanding  intercompany loans and advances,  as listed as Indebtedness on
     Schedule  6.2(b) and  permitted by Section  6.2,  and (iii) other  existing
     Investments described on Schedule 6.8(d);

          (e) Capital Expenditures  permitted by Section 6.7 that are structured
     as Investments;

          (f) Restricted Payments permitted under Section 6.6;

          (g)  intercompany  Investments by any  Restricted  Group Member in any
     other Restricted Group Member;

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

          (i) Investments in respect of Swap Agreements  permitted under Section
     6.12;

          (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.

     6.9. 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; (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

<PAGE>
                                                                              50


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 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
Restricted  Group Members pursuant to the Loan Documents and the First 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.

     6.10. 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 Loan Party)  except that a  Restricted  Group Member (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  Restricted  Group Member 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 any
Junior  Subordinated  Notes or  Preferred  Stock to the extent  permitted by (i)
Section 6.9,  (ii) the Loan  Documents as  permitted by the terms  thereof,  and
(iii) the First 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  Restricted
Group Members may pay management  fees to Affiliates in an aggregate  amount for
all such Affiliates not to exceed $100,000 in any fiscal year of the Borrower.

     6.11.  Sales and  Leasebacks.  Enter into any  arrangement  with any Person
providing  for the leasing by any  Restricted  Group  Member of real or personal
property that has been or is to be sold or transferred by such Restricted  Group
Member 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  Restricted  Group  Member,  except  in  connection  with a
Disposition  of  Non-Operating   Assets  which  otherwise   complies  with  this
Agreement.

     6.12.  Swap  Agreements.  Enter  into any Swap  Agreement,  except (a) Swap
Agreements  entered  into to hedge or  mitigate  risks to which such  Restricted
Group Member 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 such Restricted Group Member.

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

     6.14.  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 Restricted  Group Member to create,  incur
or  permit  to exist any Lien upon any of its  property  or  assets,  or (b) the
ability of any  Restricted  Subsidiary 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  Restricted  Group Member or to guarantee  Indebtedness of
any other  Restricted  Group Member;  provided that (i) the foregoing  shall not

<PAGE>
                                                                              51


apply to restrictions and conditions  imposed by law or by the Loan Documents or
the  First  Lien  Loan  Documents,   (ii)  the  foregoing  shall  not  apply  to
restrictions and conditions  existing on the date hereof  identified on Schedule
6.14 (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  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.

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

     6.16. Maintenance Capital Expenditures  Variance.  Permit the actual amount
of  maintenance  Capital  Expenditures  of the  Restricted  Group Members in any
fiscal year of the Borrower to be less than the maintenance Capital Expenditures
of the  Restricted  Group  Members  budgeted  for such fiscal year in the budget
delivered for such fiscal year pursuant to Section 5.2(b) by more than 10%.

                         SECTION VII. EVENTS OF DEFAULT

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

          (a) (i) the Borrower  shall fail to pay any principal of any Loan when
     due in accordance with the terms hereof; or (ii) the Borrower shall fail to
     pay any  interest on any Loan,  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 Loan
     Party  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 Loan Party shall default in the  observance or performance
     of any agreement contained in Section 5.4, Section 5.5(b),  Section 5.7(a),
     Section 5.10,  Section 5.11 or Section 5.12 or Section 6 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 Loan Party 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 30 days after notice
     to the Borrower from the Administrative Agent or the Required Lenders; or
<PAGE>
                                                                              52


          (e) any Loan Party  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;  provided,
     further that a First Lien Facilities  Event of Default shall not constitute
     an Event of Default under this clause (e) unless such First Lien Facilities
     Event of Default shall continue uncured and unwaived for 60 days; or

          (f)  (i)  any  Restricted   Group  Member  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  Restricted  Group  Member shall make a general
     assignment  for the  benefit  of its  creditors;  or (ii)  there  shall  be
     commenced against any Restricted Group Member 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  Restricted  Group  Member 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
     Restricted  Group  Member  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 Restricted  Group
     Member  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 the
     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) the  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

<PAGE>
                                                                              53


     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
     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  Restricted  Group Members  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 Loan Party or any  Affiliate  of any Loan
     Party,  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 Loan  Party or any  Affiliate  of any  Loan  Party  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 Restricted Group Member, any Affiliate
     of any  Restricted  Group  Member,  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  Restricted  Group
     Member is terminated,  withdrawn or not renewed, or suspended for more than
     twenty  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 Restricted Group Member,
     any Affiliate of any  Restricted  Group Member,  the First Lien  Collateral
     Agent or the First 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 the  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 shall  immediately  become due and payable,  and (B) if
such event is any other  Event of  Default,  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 the Borrower,  declare the
Loans (with  accrued  interest  thereon) and all other  amounts owing under this
Agreement  and  the  other  Loan  Documents  to be due  and  payable  forthwith,
whereupon the same shall immediately become due and payable. Except as expressly
provided  above in this  Section,  presentment,  demand,  protest  and all other
notices of any kind are hereby expressly waived by the Borrower.
<PAGE>
                                                                              54


                            SECTION VIII. THE AGENTS

     8.1.  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 First Lien Loan  Documents to
extend  credit to the  Borrower,  and such  lenders  are  intended  third  party
beneficiaries of these provisions.

     8.2.  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.

     8.3.  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 the  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 Loan Party a
party thereto to perform its obligations hereunder or thereunder. No Agent shall
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 Loan Party.

     8.4. 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 Borrower), 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

<PAGE>
                                                                              55


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) 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), 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.

     8.5.  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 the 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);  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.

     8.6.  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 the Borrower or any affiliate of the 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 Loan Parties 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
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 Loan Parties 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 the Borrower or any affiliate of
the  Borrower  that may come  into the  possession  of such  Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.

     8.7.  Indemnification.  The Lenders  agree to  indemnify  each Agent in its
capacity  as such (to the extent not  reimbursed  by the  Borrower  and  without
limiting the  obligation of the Borrower to do so),  ratably  according to their
respective  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  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

<PAGE>
                                                                              56


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.

     8.8. 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 the Borrower as though it were not an Agent.  With respect to its
Loans made or renewed 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.

     8.9. Successor Agents. Each of the Administrative  Agent and the Collateral
Agent may resign in such  capacity  upon 10 days'  notice to the Lenders and the
Borrower.  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 the  Borrower.  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 the Borrower (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 8, the  provisions  of this
Section VIII 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.  Notwithstanding the foregoing, the replacement of GECC as Collateral
Agent by CSFB or any affiliate  thereof,  if agreed between GECC and CSFB, shall
not require the consent of the Borrower or any Lender.

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

                           SECTION IX. MISCELLANEOUS

     9.1.  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 9.1. The
Required  Lenders and each Loan Party party to the relevant  Loan  Document may,
or, with the written consent of the Required  Lenders,  the Agents and each Loan
Party 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,

<PAGE>
                                                                              57


supplement or modification  shall (i) forgive the principal amount or extend any
date of any payment on any 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 Required  Lenders) or extend the date of any payment thereof,
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 9.1 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 Restricted Group Member 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  9.14(b)),  in each case without the written
consent of all  Lenders;  (iv) amend,  modify or waive any  provision of Section
VIII without the written consent of each Agent affected  thereby;  or (v) change
the  definition  of the term  "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 2.6,  Section 6.2,  Section 6.3, Section 6.5, Section 6.8 or the last
two  sentences  of  Section  8.1  of  this  Agreement,   any  provision  of  the
Intercreditor   Agreement  or  Section  6.5  of  the  Guarantee  and  Collateral
Agreement,  in each case described in this clause (v) 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 Loan  Parties,  the Lenders,  the  Administrative  Agent and all future
holders of the Loans. In the case of any waiver,  the Loan Parties,  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.

     9.2. 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 Loan Party and the Administrative Agent,
and  as  set  forth  in  an  administrative   questionnaire   delivered  to  the
Administrative  Agent and the  Borrower in the case of the  Lenders,  or to such
other address as may be hereafter notified by the respective parties hereto:
<PAGE>
                                                                              58


  The Loan Parties:                         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 the Borrower 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.

     9.3. 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.

     9.4. 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.

     9.5.  Payment of  Expenses  and Taxes.  The  Borrower  agrees (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

<PAGE>
                                                                              59


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  5.6(c)),  with  statements  with  respect to the
foregoing to be submitted to the Borrower 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 Borrower 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 Restricted  Group Member 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
Restricted  Group  Member  under any Loan  Document  (all the  foregoing in this
clause (d), collectively,  the "Indemnified  Liabilities"),  provided,  that the
Borrower 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 Borrower agrees not to assert and to cause its  Subsidiaries  not to assert,
and hereby waive and agree to cause its  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  shall be payable not later than
10 days after  receipt of written  demand  therefor.  Statements  payable by the
Borrower  pursuant  to this  Section  9.5 shall be  submitted  to Betsy  Wallace
(Telephone No. (435) 615-0360) (Telecopy No. (435) 615-4780),  at the address of
the Borrower set forth in Section 9.2, or to such other Person or address as may
be  hereafter   designated   by  the  Borrower  in  a  written   notice  to  the
Administrative  Agent. The agreements in this Section shall survive repayment of
the Loans and all other amounts payable hereunder.

     9.6.  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,
except that (i) the  Borrower  may not assign or  otherwise  transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and the attempted  assignment or transfer by the 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.
<PAGE>
                                                                              60


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

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

               (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  the   Borrower   and  the
     Administrative  Agent otherwise consent,  provided that (1) no such consent
     of the  Borrower  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,  "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.

               (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  2.2,  2.3, 2.4 and 9.5).  Any  assignment or
          transfer  by a Lender of rights or  obligations  under this  Agreement
          that does not comply with this  Section  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.
<PAGE>
                                                                              61


               (iv) The  Administrative  Agent,  acting  for this  purpose as an
          agent of the Borrower,  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  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
          Borrower,  the  Administrative  Agent,  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  Borrower 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 Borrower,  the  Administrative
     Agent 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  9.1  and  (2)  directly   affects  such
     Participant.  Subject to paragraph  (c)(ii) of this  Section,  the Borrower
     agree that each  Participant  shall be entitled to the benefits of Sections
     2.13,  2.14  and  2.16 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  9.7(b) as though it were a Lender,
     provided such  Participant  shall be subject to Section 9.7(a) as though it
     were a Lender.

               (ii) A  Participant  shall not be entitled to receive any greater
          payment  under Section 2.13 or 2.14 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  Borrower'  prior written  consent.  Any
          Participant  that is a Non-U.S.  Lender  shall not be  entitled to the
          benefits of Section 2.14 unless such Participant complies with Section
          2.14(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, 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.
<PAGE>
                                                                              62


          (e) The  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 Borrower or the Administrative Agent and without
     regard to the limitations set forth in Section 9.6(b).  The 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.

     9.7.  Adjustments;  Set-off.  (a) Except to the extent that this  Agreement
expressly  provides for payments to be allocated to a particular  Lender, 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 7, 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 7(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 the
     Borrower,  any such notice  being  expressly  waived by the 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 the Borrower. Each Lender agrees promptly to notify the 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.

     9.8.  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.

     9.9.  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.
<PAGE>
                                                                              63


     9.10.  Integration.  This Agreement and the other Loan Documents  represent
the entire agreement of the Borrower,  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.

     9.11.  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.

     9.12. Submission To Jurisdiction;  Waivers. The 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 the
     Borrower at its  address set forth in Section 9.2 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

          (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.

     9.13. Acknowledgments. The 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 the 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
     Borrower,  on the other hand, in connection herewith or therewith is solely
     that of debtor and creditor; and
<PAGE>
                                                                              64


          (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 Borrower and the Lenders.

     9.14. 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 9.1)
to take any action  requested by the 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 9.1 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  Restricted  Group  Member  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  Borrower,  at the expense of the  Borrower,  to evidence and effect
     such termination.

     9.15.  Confidentiality.  Each of the  Administrative  Agent and each Lender
agrees to keep  confidential  all non-public  information  provided to it by any
Restricted Group Member, 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.

     9.16. WAIVERS OF JURY TRIAL. THE 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>
                                                                              65





     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


                      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: Tifta Ghilaga
                        Title: Vice President



                      WELLS FARGO BANK, N.A., as a Lender

                      By: /s/ Alan W Wray
                        ---------------------------------------
                        Name: Alan W Wray
                        Title: Sr Vice President

<PAGE>