AMENDED AND RESTATED

                                CREDIT AGREEMENT

                           Dated as of January 8, 1999

                                      Among

                 AMERICAN SKIING COMPANY RESORT PROPERTIES, INC.
                                  as Borrower,


                            THE LENDERS PARTY HERETO,

                                       and

                                BANKBOSTON, N.A.
                            as Agent for the Lenders










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                                      -iv-
ATL/591251.2
                                             TABLE OF CONTENTS
         Page

RECITALS 1

ARTICLE 1.   DEFINITIONS AND ACCOUNTING TERMS                                  1
         Section 1.1       DEFINITIONS.                                        1
         Section 1.2       ACCOUNTING TERMS                                   16

ARTICLE 2.   THE CREDIT                                                       16
         Section 2.1       THE TERM LOANS                                     16
         Section 2.2       PRINCIPAL INSTALLMENTS AND INTEREST ON THE 
                           TERM LOANS                                         16
         Section 2.3       INTEREST RESERVES                                  16
         Section 2.4       GENERAL CASH COLLATERAL ACCOUNT                    17
         Section 2.5       PROCEDURE FOR RESERVES                             17
         Section 2.6       ADDITIONAL PAYMENTS                                17
         Section 2.7       COMPUTATION OF INTEREST, ETC                       17
         Section 2.8       FEES                                               18
         Section 2.9       SET-OFF                                            18
         Section 2.10      INCREASED COSTS, ETC                               18
         Section 2.11      USE OF PROCEEDS                                    20

ARTICLE 3.  CONDITIONS TO LOANS AND ADVANCES                                  20
         Section 3.1       CONDITIONS TO THE TERM LOANS AND
                           ALL ADVANCES                                       20
         Section 3.2       CONDITIONS TO ADVANCES                             24
         Section 3.3       BUDGET COMPLIANCE                                  25
         Section 3.4       PROCEDURES FOR ADVANCES                            25

ARTICLE 4.  PAYMENT AND REPAYMENT                                             27
         Section 4.1       MANDATORY REPAYMENTS AND PREPAYMENTS               27
         Section 4.2       VOLUNTARY PREPAYMENTS                              27
         Section 4.3       PAYMENT OR OTHER ACTIONS ON
                           NON-BUSINESS DAYS                                  27
         Section 4.4       METHOD AND TIMING OF PAYMENTS                      27
         Section 4.5       CURRENCY                                           28
         Section 4.6       FOREIGN LENDERS                                    28

ARTICLE 5.   REPRESENTATIONS AND WARRANTIES                                   28
         Section 5.1       EXISTENCE, CHARTER AND FORMATION
                           DOCUMENTS, ETC                                     29
         Section 5.2       PRINCIPAL PLACE OF BUSINESS; LOCATION
                           OF RECORDS                                         29
         Section 5.3       QUALIFICATION                                      29
         Section 5.4       SUBSIDIARIES                                       29
         Section 5.5       POWER                                              29
         Section 5.6       VALID AND BINDING OBLIGATIONS                      30
         Section 5.7       OTHER AGREEMENTS                                   30
         Section 5.8       PAYMENT OF TAXES                                   30
         Section 5.9       FINANCIAL STATEMENTS                               31
         Section 5.10      OTHER MATERIALS FURNISHED                          31
         Section 5.11      STOCK                                              31
         Section 5.12      CHANGES IN CONDITION                               31
         Section 5.13      ASSETS, LICENSES, PATENTS, TRADEMARKS, ETC         31
         Section 5.14      LITIGATION                                         32
         Section 5.15      PENSION PLANS                                      32
         Section 5.16      OUTSTANDING INDEBTEDNESS                           32
         Section 5.17      ENVIRONMENTAL MATTERS                              33
         Section 5.18      FOREIGN TRADE REGULATIONS                          34
         Section 5.19      GOVERNMENTAL REGULATIONS                           34
         Section 5.20      MARGIN STOCK                                       34
         Section 5.21      SOLVENCY                                           34
         Section 5.22      COMPLIANCE WITH OTHER INSTRUMENTS,
                           LAWS, ETC                                          35
         Section 5.23      ABSENCE OF FINANCING STATEMENTS, ETC               35
         Section 5.24      FISCAL YEAR                                        35
         Section 5.25      TAX STATUS                                         35
         Section 5.26      PURCHASE OPTION                                    35
         Section 5.27      LEASES                                             35
         Section 5.28      PERMITTED CONSTRUCTION LOANS                       35
         Section 5.29      STATUS MEMORANDUM                                  36
         Section 5.30      SECURITY AGREEMENTS                                36
         Section 5.31      COMPREHENSIVE EFFECT OF MASTER EASEMENT            36

ARTICLE 6.   REPORTS AND INFORMATION                                          36
         Section 6.1       FINANCIAL STATEMENTS AND OTHER REPORTS             36
         Section 6.2       NOTICE OF DEFAULTS                                 38
         Section 6.3       NOTICE OF LITIGATION                               38
         Section 6.4       REPORTABLE EVENTS                                  39
         Section 6.5       COMMUNICATIONS WITH INDEPENDENT
                           PUBLIC ACCOUNTANTS                                 39
         Section 6.6       ENVIRONMENTAL REPORTS                              39
         Section 6.7       MISCELLANEOUS                                      40
         Section 6.8       PURCHASE OPTION AND LEASES                         40
         Section 6.9       PERMITS, ZONING AND OTHER
                           DEVELOPMENT RIGHTS                                 40
         Section 6.10      MARRIOTT JOINT VENTURE                             40
         Section 6.11      PERMITTED CONSTRUCTION LOANS                       40
         Section 6.12      BUDGET COMPLIANCE                                  40

ARTICLE 7.   FINANCIAL COVENANTS                                              41
         Section 7.1       MINIMUM TANGIBLE NET WORTH                         41
         Section 7.2       LOAN TO VALUE RATIO                                41

ARTICLE 8.  AFFIRMATIVE COVENANTS                                             41
         Section 8.1       REPRESENTATIONS AND WARRANTIES                     41
         Section 8.2       TAXES AND OTHER OBLIGATIONS                        41
         Section 8.3       MAINTENANCE OF PROPERTIES AND LEASES               42
         Section 8.4       INSURANCE                                          42
         Section 8.5       RECORDS, ACCOUNTS AND PLACES OF BUSINESS           43
         Section 8.6       INSPECTION                                         43
         Section 8.7       MAINTENANCE OF ACCOUNTS                            43
         Section 8.8       OWNERSHIP OF SUBSIDIARIES                          43
         Section 8.9       DUE DILIGENCE MATTERS                              43
         Section 8.10      REQUIRED DUE DILIGENCE                             44
         Section 8.11      PLEDGE OF COLLATERAL                               45
         Section 8.12      DISTRIBUTION OF CASH AND CASH EQUIVALENTS
                           BY BORROWER SUBSIDIARIES                           45
         Section 8.13      ADDITIONAL DOCUMENTS AND COLLATERAL                45

ARTICLE 9.  NEGATIVE COVENANTS                                                45
         Section 9.1       RESTRICTIONS ON INDEBTEDNESS                       46
         Section 9.2       RESTRICTION ON LIENS                               47
         Section 9.3       INVESTMENTS                                        48
         Section 9.4       MERGERS, ACQUISITIONS, CREATION OF
                           SUBSIDIARIES                                       49
         Section 9.5       TRANSACTIONS WITH AFFILIATES                       49
         Section 9.6       DISTRIBUTIONS                                      49
         Section 9.7       CAPITAL EXPENDITURES                               49
         Section 9.8       DISPOSITIONS OF ASSETS                             50
         Section 9.9       ASSUMPTIONS, GUARANTIES, ETC. OF
                           INDEBTEDNESS OF OTHER PERSONS                      50
         Section 9.10      ERISA                                              50
         Section 9.11      SALE AND LEASEBACK                                 50
         Section 9.12      RESTRICTIVE OR INCONSISTENT AGREEMENTS             50
         Section 9.13      NO AMENDMENT OF MARRIOTT JOINT VENTURE,
                           INTER COMPANY DEBT, PURCHASE OPTION
                           AND LEASES                                         51
         Section 9.14      LIMITATION ON ISSUANCE OF CAPITAL STOCK            51
         Section 9.15      PURCHASE MONEY MORTGAGES                           51
         Section 9.16      PERMITTED FINANCIAL FACILITIES                     51
         Section 9.17      CHANGE OF CONTROL51
         Section 9.18      PROPERTY ACQUISITIONS                              51
         Section 9.19      COMMENCEMENT OF PROJECTS                           51

ARTICLE 10.       RELEASE OF COLLATERAL AND ADDITIONAL CONSTRUCTION AND 
                    CAPITAL IMPROVEMENTS                                      52
         Section 10.1      RELEASE PROVISIONS                                 52
         Section 10.2      PRESALE REQUIREMENTS                               53

ARTICLE 11.   DESIGNATED PROPERTIES AND FURTHER ASSURANCES                    53
         Section 11.1      SELECTION OF MORTGAGED PROPERTIES                  53
         Section 11.2      FURTHER ASSURANCES                                 53

ARTICLE 12.   EVENTS OF DEFAULT AND REMEDIES                                  54
         Section 12.1      EVENTS OF DEFAULT                                  54
         Section 12.2      REMEDIES                                           56
         Section 12.3      DISTRIBUTION OF PROCEEDS                           57

ARTICLE 13.   CONSENTS; AMENDMENTS; WAIVERS; REMEDIES                         58
         Section 13.1      ACTIONS BY LENDERS                                 58
         Section 13.2      ACTIONS BY BORROWER                                59

ARTICLE 14.   SUCCESSORS AND ASSIGNS                                          60
         Section 14.1      GENERAL                                            60
         Section 14.2      ASSIGNMENTS                                        60
         Section 14.3      BANKBOSTON AS AGENT UNDER SENIOR FACILITY
                           AND ROLE OF BRS                                    66

ARTICLE 15.   THE AGENT                                                       66
         Section 15.1      AUTHORIZATION AND ACTION                           66
         Section 15.2      AGENT'S RELIANCE, ETC                              67
         Section 15.3      AGENT AS A LENDER AND AGENT UNDER
                           SENIOR FACILITY                                    67
         Section 15.4      LENDER CREDIT DECISION                             68
         Section 15.5      INDEMNIFICATION OF AGENT                           68
         Section 15.6      SUCCESSOR AGENT                                    68
         Section 15.7      AMENDMENT OF ARTICLE 15                            69

ARTICLE 16.   MISCELLANEOUS                                                   69
         Section 16.1      NOTICES                                            69
         Section 16.2      MERGER                                             70
         Section 16.3      GOVERNING LAW; CONSENT TO JURISDICTION             70
         Section 16.4      COUNTERPARTS                                       70
         Section 16.5      EXPENSES AND INDEMNIFICATION                       70
         Section 16.6      CONFIDENTIALITY                                    72
         Section 16.7      JOINT AND SEVERAL OBLIGATIONS                      72
         Section 16.8      WAIVER OF JURY TRIAL                               72
         Section 16.9      AMENDMENT AND RESTATEMENT                          73
         Section 16.10     NONRECOURSE OBLIGATION                             73




<PAGE>
                     AMENDED AND RESTATED CREDIT AGREEMENT

         This  AMENDED AND RESTATED  CREDIT  AGREEMENT is entered into as of the
Closing Date by and among AMERICAN  SKIING COMPANY  RESORT  PROPERTIES,  INC., a
Maine corporation ("Borrower"),  the lenders from time to time party hereto, and
BANKBOSTON,  N.A., a national banking association, as Agent for the lenders from
time to time party hereto ("Agent").

                                    RECITALS

         Borrower  and the Lenders  entered  into Credit  Agreement  dated as of
September  4,  1998  which  was  subsequently  modified  by that  certain  First
Modification  of Credit  Agreement  dated December 4, 1998 (the original  Credit
Agreement,   as  modified,   being  referred  to  herein  as  "Original   Credit
Agreement").  The  Lenders  agreed  to  advance  and  did  advance  the  sum  of
$28,950,000.00  which was secured by certain Security  Agreements and which were
filed of record from and after December 4, 1998.

         Borrower and Lenders  desire to amend and restate the  Original  Credit
Agreement  in order to allow for the  increase  of the Term  Loans  (as  defined
therein) to a maximum  principal amount of $58,000,000.00 to reflect the payment
of the Term Loans on the Closing  Date to an  outstanding  principal  balance of
$1.00, and to allow for the disbursement of the additional  amount available for
advance in the amount of up to $58,000,000.00 for the following purposes: (a) to
fund  certain  capital  expenditures  for  Projects  (b) to provide for on-going
working  capital and other  specified  needs in the  Budget,  and (c) to fund an
interest reserve, all in accordance with the terms of this Agreement.

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby  acknowledged,  the Borrower,  the Agent and the
Lenders agree hereby as follows:

                   ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS

         Section 1.1 DEFINITIONS.  In addition to the terms defined elsewhere in
this Agreement,  unless otherwise  specifically  provided herein,  the following
terms  shall have the  following  meanings  for all  purposes  when used in this
Agreement,  and in any note,  agreement,  certificate,  report or other document
made or delivered in connection with this Agreement:

         "AFFILIATE"  shall  mean  (a) any  director  or  executive  officer  of
American Ski or any of its  Subsidiaries  or any Person  owning more than 10% of
the outstanding  common stock of American Ski or any of its Subsidiaries and (b)
any Person that controls,  is controlled by or is under common control with such
a Person or any  Affiliate  of such  Person.  For  purposes of this  definition,
"control" of a Person shall mean the possession,  directly or indirectly, of the
power to direct or cause the direction of its  management  or policies,  whether
through the ownership of voting securities, by contract or otherwise.

         "AGENT" shall mean  BankBoston,  N.A., in its capacity as agent for the
Lenders, and its successors in that capacity.

         "AGREEMENT"   shall  mean  this   Credit   Agreement,   as  amended  or
supplemented from time to time.

         "AMERICAN SKI" shall mean American Skiing Company, a Maine corporation.

         "AMORTIZATION  SCHEDULE"  shall mean the mandatory  principal  payments
required herein as set forth on Schedule 1.1.

         "APPRAISAL"  shall  mean an  appraisal  of the  fair  market  value  of
property  and  business,  accepted  and  approved by the Agent,  performed by an
independent appraiser selected by the Agent who is not employed by American Ski,
any of its  Subsidiaries  or the  Agent,  the  form  of such  appraisal  and the
identity of the appraiser to be reasonably acceptable to the Agent.

         "APPRAISED  VALUE"  shall  mean the fair  market  value of the  subject
property determined by the most recent Appraisal.

         "APPROVED  FUND" means,  with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed by the same  investment  advisor as such Lender or by an affiliate of
such investment advisor.

         "ASSIGNMENT AND ACCEPTANCE AGREEMENT" See Section 14.2    hereof.

         "BALANCE" shall mean that funds remain in: (i) that portion of the Term
Loan allocated on the Budget for each Permitted Construction Project and purpose
therefore;  (ii) the Permitted  Construction Loans; and (iii) amounts of presale
deposits  available for use in the construction of improvements under applicable
law,  are  sufficient  at the time of  reference  to complete  all  improvements
constituting  each Permitted  Construction  Project  contemplated  by the Budget
pursuant  to plans  and  specifications  approved  by the  applicable  Permitted
Construction  Loan Lender and as required  under contract with the purchasers of
the  portion  of the  improvements  set  forth in the  Budget  in each case with
respect to the Projects relating to the Permitted Construction Loans.
         "BASE PROPERTY"  shall mean that portion of the real property  affected
by the Purchase Option set forth on Exhibit H hereto.

         "BASE  RATE"  means,  the  higher of (a) the  annual  rate of  interest
announced  from time to time by BKB at its head office in Boston,  Massachusetts
as its "base rate" or (b)  one-half  percent  (.5%) plus the  overnight  federal
funds  effective  rate,  as  published  by the Board of Governors of the Federal
Reserve System, as in effect from time to time. Each adjustment to the Base Rate
shall be effective as of the opening of business on the date of  announcement of
a change in the Base Rate.

         "BASE RATE MARGIN" means 825 basis points.

         "BKB" BankBoston, N.A.

         "BORROWER" shall mean American Skiing Company Resort Properties,  Inc.,
a Maine corporation.

         "BORROWER AVAILABLE CASH" shall mean, on a monthly basis, the amount of
cash and cash  equivalents  held by the  Borrower  on the last day of any month,
including  any  Subsidiary  Available  Cash  subject  to  the  maintenance  of a
cumulative  cash  reserve for  obligations  of the  Borrower to be paid within a
rolling three month period as provided in the Budget.

         "BORROWER  SUBSIDIARIES"  shall mean Canyons Resort,  Grand Summit, and
Heavenly Resort and those subsidiaries listed on Schedule 1.2, together with all
subsidiaries created in the future.

         "BRS" shall mean BancBoston Robertson Stephens Securities, Inc.

         "BUDGET"  shall  mean  the  budget  of the  Borrower  and the  Borrower
Subsidiaries  in form and  substance  acceptable to and approved by the Agent as
amended by Borrower  and approved by Agent from time to time  hereunder,  except
for the  modification  of the Budget for Capital  Expenditures,  substitution or
commencement  of a Project  other than a Permitted  Construction  Project  which
shall require the approval of the Lenders. The initial Budget is attached hereto
as Exhibit C.

         "BUSINESS  DAY"  shall  mean for all  purposes,  any day  other  than a
Saturday,  Sunday or legal holiday on which banks in Boston,  Massachusetts  are
open for the conduct of a substantial part of their commercial banking business.

         "CANYONS" shall mean the recreational and resort facilities operated by
American Ski or a Subsidiary located in Summit County, Utah.
         "CANYONS  RESORT" shall mean Canyons Resort  Properties,  Inc., a Maine
corporation.

         "CAPITAL ASSETS" shall mean fixed assets,  both tangible (such as land,
buildings,  fixtures,  machinery and equipment) and intangible (such as patents,
copyrights,  trademarks,  franchises  and  goodwill);  PROVIDED,  HOWEVER,  that
Capital  Assets shall not include any item  customarily  charged  directly as an
expense  or  depreciated  over a useful  life of twelve  (12)  months or less in
accordance with generally accepted accounting principles.

         "CAPITAL  EXPENDITURES" shall mean amounts paid or incurred,  including
indebtedness incurred, by Borrower or any of its Subsidiaries in connection with
the purchase or lease by Borrower or any of its  Subsidiaries  of Capital Assets
that would be required to be or are  capitalized  and shown on the balance sheet
of  Borrower  and  its  Subsidiaries  in  accordance  with  generally   accepted
accounting principles.

         "CAPITALIZED  LEASE"  shall  mean  any  lease  which  is or  should  be
capitalized  on the balance  sheet of the lessee in  accordance  with  generally
accepted accounting  principles and Statement of Financial  Accounting Standards
No. 13.

         "CAPITALIZED  LEASE OBLIGATIONS" shall mean the amount of the liability
reflecting  the  aggregate  discounted  amount  of  future  payments  under  all
Capitalized Leases calculated in accordance with generally  accepted  accounting
principles and Statement of Financial Accounting Standards No. 13.

         "CASH FLOW PROJECTION" shall mean a 36 month projection of cash flow of
the Borrower as approved  from time to time by the Agent.  The initial Cash Flow
Projection is attached hereto as Exhibit I and made a part hereof.

         "CASH INSURANCE  PROCEEDS" shall mean the proceeds received by Borrower
and its  Subsidiaries  under any key man life insurance or property and casualty
insurance policy carried by Borrower and it Subsidiaries.

         "CASH  PROCEEDS"  shall  mean,  with  respect to any  disposition,  the
aggregate cash payments  (including any cash received by way of deferred payment
pursuant to a note receivable  issued in connection with such  disposition,  but
only as and when received)  received by Borrower or any of its Subsidiaries from
such disposition.

         "CHANGE OF CONTROL"  means any of the following:  (i) the sale,  lease,
conveyance or other disposition of all or substantially all of the assets of the
Borrower  or any  Borrower  Subsidiary  or of  American  Ski,  as an entirety or
substantially  as an  entirety  to any Person or "group"  (within the meaning of
Section 13(d)(3) of the Exchange Act) in one or a series of  transactions;  (ii)
(a) the acquisition of fifty percent (50%) or more of the aggregate voting power
of all classes of Common  Equity of the Borrower or any Borrower  Subsidiary  in
one  transaction or a series of related  transactions;  (iii) the liquidation or
dissolution  of the Borrower any Borrower  Subsidiary  or American  Ski, (b) the
acquisition of sufficient  shares of Common Equity of American Ski in any one or
series of  transactions  so that Leslie B. Otten no longer controls the Board of
Directors of American Ski or no longer is the  principal  executive in charge of
American Ski; or (iv) a majority of the Board of Directors of the  Borrower,  or
Borrower  Subsidiary or American Ski not being comprised of persons who (a) were
members  of the  Board  of  Directors  of  such  entity  as of the  date of this
Agreement  ("Original  Directors") or (b) were nominated for election or elected
to the Board of Directors of such entity with the affirmative vote of at least a
majority of the directors  who  themselves  were Original  Directors or who were
similarly nominated for election or elected.

         "CLOSING DATE" shall mean January 8, 1999.

         "CODE" shall mean the Internal Revenue Code of 1986, as amended, and in
effect from time to time.

         "COLLATERAL"  shall mean all of the  property,  rights and interests of
Borrower  and its  Subsidiaries  that are  subject  to the  security  interests,
pledges, and mortgages created by the Security Agreements.

         "COMMENCEMENT RELEASE PROVISIONS"  See Section 9.19.

         "COMMISSION" shall mean the Securities and Exchange Commission.

         "COMMITMENT  PERCENTAGE"  shall mean as to each Lender,  the sum of its
Term Loan Commitment Percentage as set forth on Schedule l hereto.

         "COMPLIANCE  CERTIFICATE" shall mean a certificate in a form acceptable
to Agent.

         "CONSOLIDATED"  and  "CONSOLIDATING"  when used with  reference  to any
term, mean that term (or the terms  "combined" and  "combining," as the case may
be, in the case of  partnerships,  joint  ventures and  Affiliates  that are not
Subsidiaries)  as applied to the  accounts of American  Ski (or other  specified
Person) and all of its Subsidiaries (or other specified Persons), or such of its
Subsidiaries as may be specified,  consolidated (or combined) in accordance with
generally  accepted  accounting  principles and with appropriate  deductions for
minority interests in Subsidiaries, as required by generally accepted accounting
principles.

         "CONTEMPLATED  IMPROVEMENTS" shall mean the proposed improvements to be
located on the Mortgaged Property as described in the Status Memorandum.

         "DEFAULT"  shall mean an event or  condition  which with the passage of
time or giving of notice, or both, would become an Event of Default.

         "DEFAULT RATE" shall mean the Base Rate plus the  applicable  Base Rate
Margin plus 400 basis points.

         "DESIGNATED  PROPERTIES"  shall mean the real  properties and interests
therein owned by Borrower and described on Exhibit B or  replacement  properties
designated pursuant to Article 11.

         "DISTRIBUTION"  shall  mean:  (a) the  declaration  or  payment  of any
dividend  on or in  respect  of any  shares  of any  class of  capital  stock of
Borrower,  (b) the purchase,  redemption,  or other acquisition or retirement of
any shares of any class of capital stock of Borrower, (c) any other distribution
on or in respect of any shares of any class of capital  stock of  Borrower,  (d)
any  setting  apart or  allocating  any sum for the  payment of any  dividend or
distribution  or for the  purchase,  redemption  or  retirement of any shares of
capital stock of Borrower and (e) any payment of principal on or any  retirement
or defeasance of Subordinated  Indebtedness  other than payments  required to be
paid by the Borrower under the Senior Note Guaranty.

         "ELIGIBLE  ASSIGNEE(S)"  shall  mean  any  of  (a)  a  commercial  bank
organized  under the laws of the  United  States,  or any State  thereof  or the
District of Columbia,  and having  total assets in excess of  $1,000,000,000.00;
(b) a savings and loan  association or savings bank organized  under the laws of
the United States, or any State thereof or the District of Columbia,  and having
a net worth of at least $100,000,000.00, calculated in accordance with generally
accepted accounting  principles;  (c) a commercial bank organized under the laws
of any  other  country  which  is a  member  of the  Organization  for  Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of  $1,000,000,000.00,  provided that
such bank has a branch or agency in the United  States  and is acting  through a
branch or agency  located  in the  country in which it is  organized  or another
country which is also a member of the OECD;  (d) the central bank of any country
which is a member of the OECD (e) an investment  fund  sponsored by a commercial
investment  advisor having total assets of at least  $500,000,000,  all with the
prior  approval of the Agent;  and (f) such other investor as may be approved by
the Agent and Borrower.

         "ENVIRONMENT"  means soil, surface waters,  groundwaters,  land, stream
sediments,  surface or  subsurface  strata,  ambient air, and any  environmental
medium.

         "ENVIRONMENTAL LAW" means any judgment, decree, order, common law rule,
statute,  act,  law,  code,  ordinance,  permit,  license,  rule  or  regulation
pertaining to  environmental  matters,  or any federal,  state,  county or local
statute, regulation, code, ordinance, order or decree relating to public health,
welfare,   the   Environment,   or  to   the   storage,   handling,   treatment,
transportation, use or generation of Hazardous Materials in or at the workplace,
or to worker  health or  safety,  whether  now  existing  or  hereafter  enacted
including the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental  Response,  Compensation and Liability Act of 1980 ("CERCLA"),  as
amended by the Superfund  Amendments and  Reauthorization  Act of 1986 ("SARA"),
the Federal Clean Water Act, the Toxic Substances Control Act, the Federal Clean
Air Act, the Safe Drinking Water Act, the Flood Disaster  Protection Act of 1973
and all amendments thereto.

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

         "EVENT OF DEFAULT" See Section 12.1 hereof.

         "FAIR MARKET VALUE" shall mean the price a willing buyer would pay to a
willing seller in an arm's length  transaction  with neither party being under a
compulsion to act.

         "FEE LETTER" See Section 2.5 hereof.

         "FEES" shall mean all fees and amounts  payable in connection  with the
Fee  Letter and such other fees as may from time to time be charged by the Agent
in connection with the Term Loan.

         "FINANCIAL  COVENANTS"  shall mean the covenants set forth at Article 7
as of the Closing Date and as may be added from time to time.

         "FULLY  FUNDED  PROJECT"  shall mean any Project other than a Permitted
Construction Project on the Closing Date where: (i) 85% of the units are presold
and (ii) the Project Equity is provided by a source other than the Borrower or a
Borrower Subsidiary.

         "GENERAL CASH COLLATERAL ACCOUNT" shall mean the account established by
the Borrower pursuant to the provisions of Section 2.4.

         "GENERALLY  ACCEPTED   ACCOUNTING   PRINCIPLES"  shall  mean  generally
accepted accounting  principles as defined by controlling  pronouncements of the
Financial  Accounting  Standards  Board, as from time to time  supplemented  and
amended.
         "GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state
or other  political  subdivision  thereof and any entity  exercising  executive,
legislative,  judicial,  regulatory or administrative functions of or pertaining
to government.

         "GRAND SUMMIT" shall mean Grand Summit Resort Properties, Inc., a Maine
corporation.

         "GUARANTY" or "GUARANTEE" or "GUARANTIES" shall include any arrangement
whereby a Person is or becomes  liable in respect of any  Indebtedness  or other
obligation of another and any other  arrangement  whereby  credit is extended to
another obligor on the basis of any promise of a guarantor, whether that promise
is expressed in terms of an obligation to pay the  Indebtedness of such obligor,
or to  purchase  or lease  assets  under  circumstances  that would  enable such
obligor to discharge one or more of its obligations, or to maintain the capital,
the working capital,  solvency or general  financial  condition of such obligor,
whether or not such  arrangement is listed in the balance sheet of the guarantor
or referred to in a footnote thereto.

         "HAZARDOUS MATERIAL" means any pollutant, contaminant, toxic substance,
chemical substance or mixture, hazardous waste, hazardous material, or hazardous
substance,  or any oil,  petroleum,  or  petroleum  product,  as  defined  in or
pursuant  to the  Resource  Conservation  and  Recovery  Act,  as  amended,  the
Comprehensive  Environmental  Response,  Compensation,  and  Liability  Act,  as
amended,  the  Superfund  Amendment  and  Reauthorization  Act, as amended,  the
Federal Clean Water Act, as amended, the Hazardous Materials Transportation Act,
as amended,  the Toxic  Substances  Control  Act, as  amended,  any  regulations
promulgated under these Acts, or any other Environmental Law.

         "HEAD OFFICE" shall mean the office of the Agent located at 100 Federal
Street, Boston, Massachusetts or such other office as the Agent may from time to
time designate as its Head Office.

         "HEAVENLY RESORT" shall mean Heavenly Resort Properties,  LLC, a Nevada
limited liability company.

         "INDEBTEDNESS" shall mean, as to any Person,  without duplication:  (a)
all  obligations  of such  Person  for  borrowed  money or  evidenced  by bonds,
debentures,  notes or similar  instruments);  (b) all obligations of such Person
for the  deferred  purchase  price of property or  services  (including  without
limitation  deferred  payment  obligations  which are part of the  consideration
provided for in agreements not to compete),  except trade  accounts  payable and
accrued  liabilities  arising in the ordinary  course of business  which are not
overdue  by more  than 90 days or which  are being  contested  in good  faith by
appropriate  proceedings;  (c) all capital lease obligations of such Person; (d)
all  Indebtedness  of  others  secured  by a lien on any  properties,  assets or
revenues of such  person;  (e) all  Indebtedness  of others  guaranteed  by such
Person (except  completion  Guaranties  under which such person has not yet been
required to perform);  (f) all net  obligations  of such Person  under  interest
rate, commodity,  foreign currency and financial markets swaps, options, futures
and  other  hedging  obligations);  and (g)  all  obligations  of  such  Person,
contingent or otherwise, in respect of letters of credit or bankers' acceptances
or similar instruments.

         "INDEMNITY    AGREEMENTS"   shall   mean   the   Hazardous    Materials
Indemnification  Agreements dated September 4, 1998 as amended on even date from
Borrower to the Agent.

         "INTERCOMPANY DEBT" shall mean the indebtedness by Borrower to American
Ski in the maximum principal amount of $20,289,000.00.

         "INTEREST RESERVE" - See Section 2.3.

         "INVESTMENT"  shall mean (a) any stock,  evidence  of  Indebtedness  or
other  security  of  another  Person,  (b) any loan,  advance,  contribution  to
capital,  extension of credit  (except for current  trade and customer  accounts
receivable  for inventory  sold or services  rendered in the ordinary  course of
business  and  payable in  accordance  with  customary  trade  terms) to another
Person,  (c) any purchase of (i) stock or other  securities of another Person or
(ii) any  business  or  undertaking  of another  Person  (whether by purchase of
assets or securities), any commitment or option to make any such purchase if, in
the case of an option,  the aggregate  consideration paid for such option was in
excess of $100, (d) any other  investment,  in all cases whether existing on the
date of this Agreement or thereafter made, or (e) any contract to accomplish any
of the foregoing.

         "KEY BANK FACILITY"  shall mean the existing  construction  loan by Key
Bank,  N.A. in favor of Canyons  Resort  dated  December,  1998 in the  original
principal amount of $29,000,000.00.

         "LEASES"  shall mean all leases and other  agreements  under  which the
Borrower have rights to use or occupy any real property.

         "LENDER  AGREEMENTS"  shall mean this  Agreement,  the Term Notes,  the
Indemnity Agreements,  the Security Agreements,  and any other present or future
agreement  from  time  to  time  entered  into  between  Borrower  or any of its
Subsidiaries and the Agent or any Lender with respect to this Agreement, each as
from time to time  amended or  supplemented,  and all  statements,  reports  and
certificates  delivered by Borrower or any of its  Subsidiaries  to the Agent or
any Lender in connection therewith.

         "LENDER  OBLIGATIONS" shall mean all present and future obligations and
Indebtedness  of Borrower or any of its  Subsidiaries  owing to the Agent or the
Lenders under this Agreement or any other Lender Agreement,  including,  without
limitation,  the obligations to pay the Indebtedness from time to time evidenced
by the Term Notes,  and obligations to pay interest,  commitment  fees,  balance
deficiency fees, charges,  expenses and  indemnification  from time to time owed
under any Lender Agreement, and any modifications or amendments thereto.

         "LENDER(S)"  shall  mean  (a)  initially,  each  lender  listed  on the
signature  pages hereof and  designated  on Schedule 1, (b) any other Person who
becomes a Successor  Lender  hereunder in  accordance  with the terms of Section
14.2  hereof and (c) the  successors  and assigns of the  Persons  described  in
clauses (a) and (b).

         "LIEN" -- See Section 9.2 hereof.

         "LOAN" shall mean all or a portion of the Loans  outstanding  hereunder
or made to the Borrower by the Lenders  pursuant to Article 2 of this Agreement,
and "Loans" means all of such loans, collectively.

         "LOAN DOCUMENTS" This Credit Agreement,  the Security  Agreements,  and
the Term Loan Notes together with such other  documents or instruments  that now
exist or hereafter exist which evidence or secure the Term Loan Notes.

         "LOAN RESERVE ANALYSIS" shall mean the projection of the amounts of the
Reserves  prepared by the  Borrower  and approved by the Agent from time to time
with the initial Loan Reserve Analysis being attached hereto as Exhibit G.

         "MAJORITY  LENDERS"  shall mean,  at any time,  any two or more Lenders
holding  at least  51% of the sum of the  outstanding  principal  amount  of the
Loans.

         "MARRIOTT  JOINT  VENTURE"  shall  mean the  Purchase  and  Development
Agreement  among American Ski,  Marriott  Ownership  Resorts,  Inc. and Borrower
dated July 22, 1998.

         "MASTER EASEMENT" shall mean, collectively,  the easement agreements in
form and  substance  acceptable  to the Agent between the Borrower and Agent and
such other necessary  parties,  including the agent of the Senior  Facility,  to
provide  for  an  unencumbered  easement  for  utilities,   access  and  density
allocation  in  sufficient  scope to permit  the  development  of the  Mortgaged
Properties  as  resort,  hotel,  condominium  or retail  facilities  and for the
Contemplated Improvements.

         "MATERIAL  ADVERSE EFFECT" shall mean any adverse change (or occurrence
or condition  reasonably  likely to produce an adverse  change) in the financial
condition,  properties,  business,  operations or prospects which is material to
Borrower and its subsidiaries taken as a whole.

         "MORTGAGED  PROPERTIES"  shall mean all real  properties  and interests
therein  owned by  Borrower  or any of its  Subsidiaries  which are  subject  to
mortgage liens in favor of the Agent including the Master Easement.

         "MORTGAGES"  shall  mean the  various  deeds of  trust,  mortgages  and
similar  security  instruments  executed by the Borrower on September 4, 1998 as
modified on even date.

         "NET  PROCEEDS"  shall  mean the Cash  Proceeds  (with  respect  to any
disposition)  or Cash  Insurance  Proceeds (with respect to any casualty) net of
the sum of (a) the  amount of such  proceeds  required  to be  applied  to repay
Indebtedness  (other than the Loans)  incurred or secured by a lien on any asset
disposed of; (b) brokerage commissions,  legal fees, accounting fees, investment
banking  fees,  trustee's  fees,  finder's  fees  and  other  similar  fees  and
commissions,  all of which amounts under this clause (b) shall be reasonable and
customary and paid to non Affiliates of the Borrower, American Ski or a Borrower
Subsidiary; (c) transfer and ad valorem taxes payable in connection with or as a
result of such  transaction;  (d) amounts held in escrow in connection  with any
such  Permitted  Disposition  (prior  to the  release  thereof);  and (e)  other
reasonable and customary out-of-pocket costs incurred in connection therewith.

         "NOTES" shall mean the Term Loan Notes.

         "OUTSTANDING  AMOUNT"  shall mean the amount  outstanding  from time to
time with respect to the Lender Obligations.

         "PENSION  PLAN"  shall  mean an  employee  benefit  plan or other  plan
maintained  for the  employees  of Borrower or any  Subsidiary  as  described in
Section 4021(a) of ERISA.


         "PERMITTED  CONSTRUCTION  LOANS" shall mean the construction  loans for
the  Permitted  Construction  Projects as follows:  by Textron in favor of Grand
Summit in the original  principal  amount of  $145,000,000  dated  September 30,
1998,  and having a maturity  date of September  30, 2002;  by KeyBank,  N.A. in
favor of Canyons Resort in the original  principal  amount of $29,000,000  dated
December  1998,  and  having  a  maturity  date  of  June  30,  2000;  and  such
construction  loans for the financing of the construction of a Project as may be
approved from time to time by the Agent.
         "PERMITTED CONSTRUCTION LOAN LENDER" shall mean Key Bank, N.A., Textron
or the lender of any other Permitted Construction Loan.

         "PERMITTED  CONSTRUCTION  PROJECTS"  shall  mean  the  following  hotel
projects: (i) Grand Summit at the Canyons; (ii) Grand Summit at Steamboat; (iii)
the Sundial Lodge at the Canyons;  (iv) Fully Funded Projects approved from time
to time by the Agent,  and (v) such other Projects as approved from time to time
by the Lenders.

         "PERMITTED  EXCEPTIONS"  shall mean the title exceptions  affecting the
Mortgaged  Properties approved by the Agent, and the liens of the Purchase Money
Mortgages and such other  exceptions as may be approved from time to time by the
Agent.

         "PERMITTED FINANCIAL FACILITIES"   See Section 9.1(d).

         "PERMITTED LIENS" See Section 9.2 hereof.

         "PERSON"  shall mean an  individual,  corporation,  partnership,  joint
venture,   association,   estate,  joint  stock  company,  trust,  organization,
business, or a government or agency or political subdivision thereof.

         "PRESALE REQUIREMENTS" - See Section 10.2.

         "PROJECT"  shall mean the  construction of improvements as contemplated
by and listed on the Budget and located on the Mortgaged Property or on property
owned by a Borrower  Subsidiary  whose equity interests have been pledged by the
Borrower to the Agent as part of the  Collateral,  all as approved  from time to
time by the Lenders  except for Fully Funded  Projects  which may be approved by
the Agent.

         "PROJECT  EQUITY"  shall mean the  difference  in the total  costs of a
Project  minus amounts to be funded from the  construction  loan for the Project
and any Subordinated Debt attributable to such project approved by Agent.

          "PROPOSED  CONSTRUCTION  PROJECTS" shall mean any Construction Project
identified on the Budget.

         "PROPOSED  PROJECT   CONSTRUCTION   LOANS"   Construction   loans  from
institutional lenders for the construction of a Proposed Construction Project.

         "PURCHASE  MONEY  MORTGAGE"  shall mean the  Purchase  Money  Mortgages
described in Schedule 2 attached hereto.

         "PURCHASE MONEY  INDEBTEDNESS"  shall mean indebtedness  affecting real
property  known as Parcel A-2 of the Canyons being more  particularly  set forth
as:

         1.      $300,000 mortgage loan from LRJ Enterprises, Inc.;
         2.      $1,000,000 mortgage loan from Songbird Enterprises; and
         3.      $1,720,000 mortgage loan from Wolf Mountain Resorts, L.C.

         "PURCHASE  OPTION" shall mean that portion of the Option to Purchase in
that certain  Ground Lease  Agreement  dated July 3, 1997 between Wolf  Mountain
Resorts,  L.L.C.  and ASC Utah,  Inc., as assigned to Borrower  pursuant to that
certain  Assignment of Purchase  Option Interest dated September 4, 1998 between
ASC Utah, Inc. and Borrower with respect to the real property  commonly known as
the Canyons located in Utah.

         "QUARTERSHARE   FACILITIES"   shall  mean  dwellings   subject  to  the
condominium  form of ownership sold on the basis of multiple  ownership based on
thirteen weeks per year.

         "REPORTABLE  EVENT"  shall  mean an  event  reportable  to the  Pension
Benefit Guaranty Corporation under Section 4043 of Title IV of ERISA.

         "RESERVE  ACCOUNT"  shall mean the account for each Reserve at the Head
Office of the Agent where the Reserves are held.

         "RESERVES"  shall mean the  General  Cash  Collateral  Account  and the
Interest Reserve and all proceeds thereof including any interest earned thereon.

         "SECURITY   AGREEMENTS"   shall  mean  the   following   documents  and
instruments  now or hereafter  existing  from the  Borrower to the Agent,  those
dated September 4, 1998 having been modified on the Closing Date:

         (a)     The Mortgages;

         (b)     The Assignment of Trademarks from Borrower to the Agent;

         (c)     The Collateral Assignment of Agreements; and

         (d) Pledge and Security  Agreement with respect to all equity interests
in any Borrower Subsidiary.

         All  other   security   agreements,   pledge   agreements,   mortgages,
assignments  and other  instruments by which  Borrower  grants or pledges to the
Agent a lien on,  security  interest in, or pledge or mortgage or  assignment of
any of its assets.

         "SENIOR  FACILITY"  The  senior  secured  credit  facility  in favor of
American Ski and related entities by BankBoston, N.A., as Agent set forth in the
Amended and Restated Credit  Agreement dated as of November 12, 1997 as modified
on July 20, 1998, and as further modified from time to time.

         "SENIOR NOTE  GUARANTY"  shall mean the Guaranty by the Borrower of the
Series A and Series B 12% Senior  Subordinated  Notes due 2006  pursuant  to the
Indenture dated June 28, 1996.

         "SOLVENT" or "SOLVENCY" shall mean, as to any Person,  that such Person
(a) has assets  having a fair  value in excess of its  liabilities  (other  than
contingent  liabilities),  (b) has  assets  having a fair value in excess of the
amount  required to pay its  liabilities  on existing debts as such debts become
absolute  and  matured and (c) has,  and expects to continue to have,  access to
adequate  capital  for the  conduct of its  business  and the ability to pay its
debts  from  time to time  incurred  in  connection  with the  operation  of its
business as such debts mature.

         "STATUS  MEMORANDUM"  shall mean memorandum as to the status of certain
aspects of the Mortgaged Properties set forth on Exhibit D.

         "SUBORDINATION   AGREEMENT"  shall  mean  the  Subordination  Agreement
between  American  Ski,  Borrower  and Agent  dated as of  September  4, 1998 as
ratified on even date.

          "SUBORDINATED  INDEBTEDNESS"  shall mean the Senior Note  Guaranty and
the Intercompany Debt.

         "SUBSIDIARY" or "SUBSIDIARIES"  shall mean any Person of which Borrower
shall now or hereafter at the time own,  directly or  indirectly  through one or
more  Subsidiaries or otherwise,  sufficient  voting stock (or other  beneficial
interest)  to entitle it to elect at least a majority of the board of  directors
or trustees or similar managing body.

          "SUBSIDIARY AVAILABLE CASH" See Section 8.12.

         "TANGIBLE  NET WORTH"  shall mean the excess of Total Assets over Total
Liabilities.

          "TERM LOAN  ADVANCE"  or  "ADVANCE"  shall mean on advance of the Term
Loan.

         "TERM  LOAN  COMMITMENT  PERCENTAGE"  shall  mean as to each  Term Loan
Lender,  its  percentage  interest  in the Term Loans as set forth on Schedule 1
hereto.

         "TERM  LOAN  LENDER(S)"  shall  mean those  Lenders  so  identified  on
Schedule 1 hereto.

         "TERM LOAN MATURITY DATE" shall mean June 30, 2001.

         "TERM LOAN NOTES" shall mean the Term Loan Notes  substantially  in the
form of EXHIBIT A hereto  executed by Borrower in favor of each Term Loan Lender
to evidence the Term Loans.

         "TERM  LOAN(S)" shall mean the term loans made by the Term Loan Lenders
to Borrower pursuant to Section 2.1 hereof.

         "TEXTRON  FACILITY" shall mean the existing  Construction Loan Facility
provided  to Grand  Summit  from  Textron  Financial  Corporation,  as agent and
co-lender and Green Tree Financial Servicing Corporation, as co-lender.

         "TITLE COMPANY" shall mean Land America National Title Services,  Inc.,
First American Title Insurance Company, or any other nationally recognized title
insurance company approved by Agent.

         "TITLE  POLICIES"  shall mean the mortgagee  title  insurance  policies
which insure the priority of the liens of the Mortgages.

         "TOTAL  ASSETS"  shall  mean  all  assets  of  the  Borrower  excluding
intangible assets such as goodwill,  all determined in accordance with generally
accepted accounting principles.

         "TOTAL  LIABILITIES"  shall mean all  liabilities of the Borrower which
are  properly  accounted  for as  such in  accordance  with  generally  accepted
accounting principles,  excluding Intercompany Debt and the Senior Note Guaranty
for so long as it is a contingent liability.

         "UCC"  shall  mean  the  Uniform  Commercial  Code  in  effect  in  the
applicable jurisdiction, as amended from time to time.

         "WHOLLY-OWNED SUBSIDIARY" shall mean any Person of which Borrower shall
now or hereafter  at the time own,  directly or  indirectly  through one or more
Subsidiaries or otherwise,  one hundred percent (100%) of such Person's  capital
stock or other beneficial interest.

         Section 1.2 ACCOUNTING TERMS. All accounting terms used and not defined
in this  Agreement  shall be construed in  accordance  with  generally  accepted
accounting  principles  consistently applied, and all financial data required to
be delivered hereunder shall be prepared in accordance with such principles.

                                          ARTICLE 2.   THE CREDIT

         Section 2.1 THE TERM LOANS. Subject to the terms and conditions of this
Agreement, on the date hereof, the Term Loan Lenders, severally and not jointly,
shall make term loans ("Term Loans") to Borrower in an amount equal to each Term
Loan Lender's Term Loan  Commitment  Percentage of  $58,000,000  as set forth on
Schedule 1 hereto,  and  Borrower  shall  execute  and deliver to each Term Loan
Lender a Term Loan Note to evidence  the Term Loan made by such Term Loan Lender
to Borrower hereunder.

         Section  2.2  PRINCIPAL  INSTALLMENTS  AND  INTEREST ON THE TERM LOANS.
Borrower shall pay to the Lenders mandatory principal installments in the amount
and upon the date set forth on the  Amortization  Schedule  and as  required  on
Section 12.3, 1. All payments under Section 12.3, 1 shall apply against the next
due and owing installments under the Amortization  Schedule.  The Borrower shall
pay interest on the unpaid, outstanding balance of the Term Loans at a per annum
rate  equal to the Base  Rate plus the Base Rate  Margin.  Interest  on the Term
Loans  shall be  payable  monthly  in  arrears  on the  last day of each  month,
commencing January 31, 1999, and continuing until all of the Indebtedness of the
Borrower to the Term Loan  Lenders  under the Term Loans shall have been paid in
full.

         Section 2.3 PROCEDURE FOR RESERVES.  Borrower hereby  acknowledges  and
recognizes that the Borrower and Agent have established the Interest Reserve and
the  General  Cash  Collateral  Account.   The  following  provisions  shall  be
applicable to the Reserves:

         (a) All Reserves held by Agent in each respective Reserve Account.  The
Borrower  shall  establish  with the Agent a cash  collateral  account  for each
Reserve  at the Head  Office of Agent in the name of and for the  benefit of the
Agent from which withdrawals may be made only by the Agent The Agent shall apply
the proceeds of the Reserve Accounts as follows:

                      (i) If a Default  or Event of  Default  then  exists,  the
amounts in any Reserve Account shall be applied in
accordance with Section 12.3(2);

                      (ii) If no Default or Event of Default  exists  hereunder,
then, for the purpose of and conditions established
for the respective Reserve Account and pursuant to Section 12.3.

         (b) The Reserves  shall bear interest at such rate as the Agent and the
Borrower  may from  time to time  agree but in any  event at the  interest  rate
applicable  to  interest  bearing  checking  accounts  by the  Agent at its Head
Office.

         (c) All Reserves shall be the subject of a first in priority  perfected
security  interest  in favor of the Agent to secure  the  payment  of the Lender
Obligations in accordance with the terms hereof.

         Section 2.4 INTEREST  RESERVE.  Borrower hereby agrees that the Lenders
shall  establish the Interest  Reserve  either from the hold back of proceeds of
the Loan  reserved for the payment of interest and for no other  purpose or from
cash flow of the  Borrower in  accordance  with  Section  12.3  deposited in the
Interest Reserve in a combined amount equal to the interest that will become due
and  payable  in cash  under  the Term Loan in the next  rolling  five (5) month
period.  The  Interest  Reserve  shall be  disbursed  by the  Agent to pay:  (i)
regularly scheduled  installments of accrued and unpaid interest under the Notes
prior to the Maturity Date or (ii) from and after the Maturity Date, for accrued
and  unpaid  interest  under the Notes at the  discretion  of the  Lenders.  The
Interest  Reserve may be disbursed for purposes  other than the  foregoing  only
with the consent of the Lenders and, prior to the occurrence of a Default,  with
the consent of the Borrower.

         Section  2.5  GENERAL  CASH   COLLATERAL   ACCOUNT.   Borrower   hereby
establishes  the General Cash  Collateral  Account with the Agent subject to the
terms and conditions hereof. The General Cash Collateral Account shall be funded
from the cash of the Borrower in an amount  elected by the Borrower to be placed
in the General Cash  Collateral  Account  pursuant to Section 12.3. The Borrower
shall  have the  right to cause  the  Agent  to apply  all or a  portion  of the
proceeds  of the General  Cash  Collateral  Account to the payment of  principal
under the Term Loan including any principal  installments under the Amortization
Schedule.

         Section 2.6  ADDITIONAL  PAYMENTS.  Upon the  occurrence and during the
continuance of any Event of Default,  the Borrower shall, on demand,  pay to the
Agent, for the account of the Lenders,  interest on the unpaid principal balance
of the  Term  Loans,  and,  to the  extent  permitted  by  law,  on any  overdue
installments of interest, at a rate per annum equal to the Default Rate.
         Section 2.7 COMPUTATION OF INTEREST,  ETC. Interest hereunder and under
the Loans  shall be  computed  on the basis of a 360-day  year for the number of
days actually  elapsed.  No interest payment or interest rate charged  hereunder
shall exceed the maximum rate  authorized  from time to time by applicable  law.
The  outstanding  balance of the Term Notes as reflected on the Agent's  records
from time to time shall be  considered  correct and binding on the  Borrower and
the Lenders (absent manifest error).

         Section  2.8 FEES.  Borrower  shall pay the Fees to the Agent,  for the
Agent's own account as are provided in the Fee Letter and as otherwise  required
to be paid by the Agent.

         Section 2.9 SET-OFF.  To the extent not  prohibited by applicable  law,
the Borrower hereby  authorizes the Agent and each Lender,  without prior notice
to the  Borrower,  if and to the extent  payment is not  promptly  made when due
pursuant to the Term Loan Notes or pursuant  to any  provision  hereof or of any
other Lender  Agreement,  to charge against any account of any Borrower with the
Agent or such Lender,  an amount equal to the accrued interest and principal and
other  amounts  from  time to time  then due and  payable  to the  Agent and the
Lenders hereunder and under all other Lender Agreements, provided that the Agent
shall notify the Borrower of any such set-off promptly thereafter.

         Section 2.10 INCREASED COSTS, ETC.

         (a) Anything herein to the contrary notwithstanding,  if any changes in
present or future  applicable law (which term "applicable  law," as used in this
Agreement,   includes   statutes  and  rules  and  regulations   thereunder  and
interpretations  thereof by any competent court or by any  governmental or other
regulatory   body  or  official   charged   with  the   administration   or  the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time heretofore or hereafter made upon or otherwise  issued
to any Lender by any central bank or other fiscal,  monetary or other authority,
whether or not having the force of law), including without limitation any change
according to a prescribed  schedule of increasing  requirements,  whether or not
known or in effect as of the date  hereof,  shall (i) subject such Lender to any
tax, levy,  impost,  duty,  charge,  fee, deduction or withholding of any nature
with respect to this  Agreement or the payment to such Lender of any amounts due
to it hereunder,  or (ii) materially change the basis of taxation of payments to
such  Lender  of the  principal  of or the  interest  on the  Loans or any other
amounts payable to such Lender hereunder,  or (iii) impose or increase or render
applicable   any  special  or   supplemental   deposit  or  reserve  or  similar
requirements  or  assessment  against  assets held by, or deposits in or for the
account  of, or any  liabilities  of, or loans by an office of such  Lender with
respect to the transactions  contemplated  herein, or (iv) impose on such Lender
any other  condition or  requirement  with respect to this Agreement or the Term
Loans,  and the result of any of the  foregoing  is (a) to increase  the cost to
such Lender of making,  funding or  maintaining  all or any part of the Loans or
its commitment hereunder, or (b) to reduce the amount of principal,  interest or
other amount payable to such Lender hereunder,  or (c) to require such Lender to
make any payment or to forego any interest or other sum payable  hereunder,  the
amount of which  payment or  foregone  interest  or other sum is  calculated  by
reference to the gross amount of any sum  receivable or deemed  received by such
Lender  from  Borrower  hereunder,  then,  and in each such  case not  otherwise
provided for hereunder,  Borrower will upon demand made by such Lender  promptly
following such Lender's receipt of notice pertaining to such matters accompanied
by calculations thereof in reasonable detail, pay to such Lender such additional
amounts as will be  sufficient  to  compensate  such Lender for such  additional
cost,  reduction,  payment or foregone  interest or other sum; PROVIDED that the
foregoing  provisions  of this  sentence  shall  not  apply  in the  case of any
additional cost, reduction,  payment or foregone interest or other sum resulting
from any taxes  charged upon or by reference to the overall net income,  profits
or gains of any Lender. In determining the additional amounts payable hereunder,
the  Lenders  may  use  any  reasonable  method  of  averaging,   allocating  or
attributing such additional costs,  reductions,  payments,  foregone interest or
other sums among their respective customers.

         (b) Anything herein to the contrary notwithstanding, if, after the date
hereof,  any Lender shall have determined that any present or future  applicable
law, rule,  regulation,  guideline,  directive or request (whether or not having
force of law), including without limitation any change according to a prescribed
schedule of increasing requirements, whether or not known or in effect as of the
date hereof,  regarding capital requirements for banks or bank holding companies
generally,  or any change  therein or in the  interpretation  or  administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration  thereof, or compliance by such Lender
with any of the  foregoing,  either  imposes a  requirement  upon such Lender to
allocate additional capital resources or increases such Lender's  requirement to
allocate  capital  resources or such  Lender's  commitment  to make,  or to such
Lender's  maintenance  of the Term Loans,  which has or would have the effect of
reducing  the return on such  Lender's  capital to a level below that which such
Lender  could have  achieved  (taking  into  consideration  such  Lender's  then
existing policies with respect to capital adequacy and assuming full utilization
of such Lender's capital) but for such  applicability,  change,  interpretation,
administration  or  compliance,  by any  amount  deemed  by  such  Lender  to be
material,  such Lender shall promptly after its determination of such occurrence
give notice thereof to the Borrower accompanied by an opinion of counsel to such
Lender with respect to such matters,  the cost of which opinion shall be paid by
Borrower. Borrower and such Lender shall thereafter attempt to negotiate in good
faith an adjustment to the compensation  payable hereunder which will adequately
compensate  such  Lender for such  reduction.  If  Borrower  and such Lender are
unable to agree on such adjustment  within thirty (30) days of the date on which
Borrower  receives such notice,  then commencing on the date of such notice (but
not  earlier  than  the  effective  date  of  any  such  applicability,  change,
interpretation,  administration or compliance), the fees payable hereunder shall
increase by an amount which will,  in such  Lender's  reasonable  determination,
evidenced by calculations in reasonable detail furnished to Borrower, compensate
such Lender for such reduction, such Lender's determination of such amount to be
conclusive and binding upon Borrower, absent manifest error. In determining such
amount,  such Lender may use any reasonable methods of averaging,  allocating or
attributing such reduction among its customers.

         Section 2.11 USE OF PROCEEDS.  The proceeds of the Term Loans hereunder
shall be advanced to the  Borrower  pursuant to the terms of the  Agreement  and
used  by  Borrower:  (a) to pay  the  fees  and  expenses  associated  with  the
transactions  contemplated hereby, (b) to establish the Interest Reserve, (c) to
the extent (a) and (b) are fully  reserved  or paid,  for  amounts  shown on the
Budget;  and (d) for such other  amounts and payees as the Agent shall  approve.
Borrower will not, directly or indirectly, use any part of such proceeds for the
purpose of  purchasing  or  carrying  any  margin  stock  within the  meaning of
Regulation  U of the Board of  Governors  of the  Federal  Reserve  System or to
extend  credit to any Person for the purpose of  purchasing or carrying any such
margin stock. This provision shall control over the provisions of Section 9.6.

                   ARTICLE 3. CONDITIONS TO LOANS AND ADVANCES

         Section 3.1 CONDITIONS TO THE TERM LOANS AND ALL ADVANCES. The Lenders'
obligations  to make the Term  Loans and to make  Advances  shall be  subject to
compliance by Borrower with its agreements  contained in this Agreement,  and to
the  condition  precedent  that the  Lenders  shall  have  received  each of the
following, in form and substance satisfactory to the Agent and its counsel or in
the form attached hereto as an Exhibit or Schedule, as the case may be:

         (a)     NOTES. The Term Loan Notes duly executed by the Borrower.

         (b) RESOLUTIONS. Copies of the resolutions of the Board of Directors of
Borrower authorizing the execution,  delivery and performance of this Agreement,
the Term Loan Notes, the Security  Agreements and the other Lender Agreements to
which the Borrower or any  Subsidiary is a party,  certified by the Secretary or
an Assistant Secretary (or Clerk or Assistant Clerk) of Borrower and each of its
Subsidiaries  (which  certificate  shall state that such resolutions are in full
force and effect).

         (c)  INCUMBENCY.  A  certificate  of  the  Secretary  or  an  Assistant
Secretary  (or Clerk or  Assistant  Clerk) of Borrower  certifying  the name and
signatures of the officers of Borrower  authorized to sign this  Agreement,  the
Term Loan Notes, the Security  Agreements,  the other Lender Agreements to which
Borrower or any Subsidiary is a party and the other documents to be delivered by
Borrower hereunder.
         (d)  CERTIFICATES  OF  EXISTENCE.   Certificates  of  legal  existence,
corporate or partnership good standing and foreign qualification for Borrower of
recent date issued by the appropriate  California,  Colorado,  Delaware,  Maine,
Nevada, Utah and Vermont Governmental Authorities.

         (e)  CERTIFICATES  OF GOOD  STANDING.  Certificate of good standing for
Borrower  and  each  Subsidiary  of  Borrower  of  recent  date  issued  by  the
appropriate  California,  Colorado,  Delaware,  Maine,  Nevada, Utah and Vermont
Governmental Authorities.

         (f) LEGAL OPINIONS. The opinions of counsel to the Borrower,  dated the
date of  execution  of this  Agreement,  in form  acceptable  to counsel for the
Lenders.

         (g)  SATISFACTION  OF CONDITIONS.  A certificate of the chief operating
officer or chief financial  officer of Borrower,  dated the Closing Date, to the
effect  that  all  conditions  precedent  on the  part  of the  Borrower  to the
execution  and  delivery  hereof  and the  making  of the Term  Loans  have been
satisfied.

         (h)  GOVERNMENTAL  APPROVALS.  Evidence of the receipt of all necessary
governmental authorizations,  consents and approvals for the execution, delivery
and  performance  by  Borrower  and  its  Subsidiaries  party  thereto  of  this
Agreement,  the Term Loan Notes,  the Security  Agreements  and the other Lender
Agreements.

          (i) CLOSING  FEE.  Receipt by the Agent for the account of the Lenders
of the closing fees due to it pursuant to the Fee Letter.

         (j) TITLE.  The Designated  Properties  have been conveyed to Borrower,
and Borrower owns fee simple title or other title acceptable to the Lenders with
respect to the Designated Properties.

         (k) PURCHASE OPTION.  Borrower is the owner of the Purchase Option.  No
encumbrance  exists with respect to the  Purchase  Option other than the lien of
the collateral  documents  securing the Senior Facility which affects all of the
Purchase Option other than the Base Property.

         (l)  MARRIOTT.  Borrower  has  assigned  a first in  priority  security
interest (subject to perfection) in the distribution interest of Borrower in the
Marriott Joint Venture.

         (m) SECURITY AGREEMENTS.  Each of the security agreement  modifications
shall have been duly and  properly  authorized,  executed  and  delivered by the
parties  thereto  and shall be in full force and  effect,  and  pursuant  to the
Security  Agreements,  Borrower  shall have granted to the Agent first valid and
binding  perfected  security  interests,  liens and  encumbrances  on all of the
assets of Borrower (other than personal  property which are either de minimis or
non core assets of the Borrower and restricted  cash balances and investments of
the disbursed  loan proceeds  other than the  Killington  Property  prior to the
filing of the required subdivision plats permitted the recording of the Mortgage
applicable to the  Killington  Property) in favor of the Agent  (subject only to
permitted Liens including without limitation:

                  (i) all fee simple and leasehold  interests in and to all real
         property   owned  or  leased  by  Borrower,   and  all   buildings  and
         improvements  now  located or to be  constructed  thereon,  whether now
         owned or hereafter acquired;

                  (ii) all tangible and intangible  assets of Borrower,  whether
         now owned or  hereafter  acquired,  including  without  limitation  all
         machinery, equipment, furniture,  furnishings,  inventory,  appliances,
         contract rights,  deposit  accounts,  cash collateral,  hotel and motel
         revenues, instruments,  general intangibles, etc., whether now owned or
         hereafter acquired, but excluding leasehold personal property interests
         which  Borrower  is  prohibited  by the lessor from  assigning  and any
         interest in any personal  property  lease  agreement  which Borrower is
         prohibited from assigning;

                  (iii) all leases, tenancies,  purchase and sale agreements for
         the sale of condominium units or other property,  operating agreements,
         contract  and  rental  agreements  for the  lease,  sale (as  permitted
         hereunder), rental, occupancy, hire or use of any of Borrower's assets,
         including without limitation the Mortgaged  Properties,  or any portion
         thereof together with all income,  profits,  revenues,  cash collateral
         and other proceeds thereof; and

                  (iv) all licenses, permits, trade names, patents,  trademarks,
approvals and contracts.

         (n)  INSURANCE.  The Agent  shall have  received  (i)  certificates  of
insurance as to the liability, hazard and other insurance maintained by Borrower
on the Collateral in conformity with the insurance requirements contained herein
(including  flood  insurance if  necessary)  from the insurer or an  independent
insurance broker dated as of the Closing Date,  identifying  insurers,  types of
insurance,  insurance  limits,  and  policy  terms  all in  accordance  with the
provisions of the Security  Agreements;  (ii)  certified  copies of all policies
evidencing such insurance (or certificates  therefor signed by the insurer or an
agent  authorized to bind the insurer);  and (iii) such further  information and
certificates from Borrower,  its insurers and insurance brokers as the Agent may
request.

         (o) LEASES/SERVICE  CONTRACTS.  The Agent shall have received copies of
all material service contracts and leases affecting any portion of the Mortgaged
Properties.

         (p) SUBORDINATION AGREEMENT. The Agent shall have received the executed
Subordination Agreement.

         (q) MISCELLANEOUS.  The Agent shall have received such other documents,
certificates and opinions as the Agent or the Lenders may reasonably request.

         (r) PERMITTED  CONSTRUCTION LOANS. No Default or Event of Default shall
exist with respect to the Permitted Construction Loans.

         (s) INTEREST RESERVE FULLY  ESTABLISHED.  The Interest Reserve is fully
established to the levels required herein.

         (t)  MASTER  EASEMENT.  The  Master  Easement  shall  be  executed  and
delivered  and remain in full force and  effect,  and the Title  Policies  shall
insure the lien and interest thereof subject only to the Permitted Exceptions.

         (u)  AUTHORIZED  EXPENDITURES  AND  ADVANCES.  The  borrower  shall  be
entitled to Advances  under the Loan to fund all  expenditures  reflected in the
Budget as in effect  from time to time.  Each  request  for an Advance  shall be
accompanied by a requisition  for advance in the form attached hereto as Exhibit
containing:

                  (i) A certification of the Borrower's chief financial  officer
or vice  president  of finance as to the accuracy of the  information  contained
therein.

                  (ii) A report reflecting any variance of the Advance requested
from the Budget in effect.  Borrower may  reallocate  budgeted  amounts shown as
line items or the contingency  line item in the Budget provided the Term Loan is
in Balance.

                  (iii)  Confirmation  that  the  amount  of the  Advance,  when
funded,  will not  cause  the  Outstanding  Amount  of the Term  Loan to  exceed
$58,000,000.00.

                  (iv)  Certification  that, to the best of the knowledge of the
officer  executing the certificate,  no Default then exists (or if so specifying
the same).

                  (v) The certification that after the Advance is made, the Term
Loan will remain in Balance.

         Section 3.2  CONDITIONS TO ADVANCES.  The  obligation of each Lender to
make any Term Loan  Advances  subsequent to the Closing Date shall be subject to
the satisfaction of the following conditions precedent:

         (a) Legality of Transactions.  It shall not be unlawful for any Person,
including  the  Agent  or any  Lender,  to  perform  any of  its  agreements  or
obligations under any of the Lender Agreements to which the Agent or such Lender
is a party on the date of such Term Loan Advance.

         (b)  Representations  and Warranties.  Each of the  representations and
warranties made by or on behalf of the Borrower and the Borrower Subsidiaries to
the Agent and the Lenders in this Agreement or any other Lender Agreements shall
be true and  correct  in all  material  respects  when made and  shall,  for all
purposes  of this  Agreement,  be deemed to be repeated on and as of the date of
the  Borrower's  notice of borrowing for such Term Loan Advance and on and as of
the date of such  Term  Loan  Advance,  and  shall be true  and  correct  in all
material  respects on and as of each of such  dates,  except,  in each case,  as
affected by the  consummation  of the  transactions  contemplated  by the Lender
Agreements.

         (c) Performance, etc. The Borrower and its Subsidiaries shall have duly
and properly performed, complied with and observed in all material respects each
of its covenants, agreements and obligations contained in this Credit Agreement,
including  the  covenants  set forth in  Article  7 and any of the other  Lender
Agreements  to  which  it is a party or by which it is bound on the date of such
Term Loan Advance. No Event of Default or Default shall exist.

         (d) Proceedings and Documents. Any corporate, partnership, governmental
and other  proceedings  which are undertaken in connection with the transactions
contemplated  by such  Term  Loan  Advance  and any  instruments  and  documents
incidental to such Term Loan Advance  shall be in form and substance  reasonably
satisfactory  to  the  Agent,  and  the  Agent  shall  have  received  all  such
counterpart  originals or certified or other copies of all such  instruments and
documents as the Agent shall have reasonably requested. With respect to any Term
Loan  Advance  requested  after  any date on which  the  outstanding  term  loan
advances have been repaid in full, the Borrower shall have provided to the Agent
evidence  satisfactory  to the  Agent as to the  continuing  perfected  first in
priority and effectiveness of the Agent's security interest in and lien upon all
of the Collateral.

         (e)  Payment  of  Fees.  The  Borrower  shall  have  complied  with its
obligations under ss. 2.5 to pay the Fees, or any other amount arising hereunder
at any time  subsequent  to the Closing  Date and becoming due and payable on or
before the date of such Term Loan Advance.
         (f) Interest Reserve Fully  Established.  The Interest Reserve is fully
established to the levels required herein.

         (g)  Required  Due  Diligence.  The  Required  Due  Diligence  shall be
submitted to and approved by Agent as provided in Section 8.11.

         Section 3.3 BUDGET COMPLIANCE.  The amount of the proposed Advance when
taken  together  with all other  advances in the category of the Budget shall be
within the amount set forth in the applicable category in the Budget.

          Section 3.4 PROCEDURES FOR ADVANCES.

         (a) Requests for Advances.  Whenever the Borrower  desires to receive a
Advance,  the Borrower  shall give notice to the Agent by  telephone,  telecopy,
telex or cable, in each case confirmed in writing by the Borrower,  delivered to
the Agent's office at 115 Perimeter Center Place,  Suite 500,  Atlanta,  Georgia
30346, Attn. Mr. Jeff Aycock.

         Each such notice  delivered by the Borrower shall specify the aggregate
principal amount of the Advance  requested.  Each such notice shall obligate the
Borrower  to accept the  Advance  requested  from the  Lenders  on the  proposed
Drawdown Date therefor.  Whenever  there is an Obligation  due and payable,  the
Agent may (but  shall not be  required  to) make a Advance in the amount of such
Obligation  and  apply  the  proceeds  of  the  Advance  to the  payment  of the
Obligation,  provided that the Agent shall promptly  notify the Borrower of such
Advance and the application of proceeds thereof.

         The time periods in this section are subject to and shall commence only
upon the completion of the Advance  Requirements  and the  determination  by the
Agent  that the  submission  meets all  requirements  for  Advances  established
herein.  The Agent shall have a minimum of two (2) days from the submission of a
complete request for Advance in which to make a determination of compliance. The
Borrower shall be entitled to request  Advances no more frequently than once per
month with fundings scheduled for on or about the 25th of each month.

         The  Borrower  shall give the Agent not later  than 10:00 a.m.  (Boston
time) one  Business  Day prior to the date of a  proposed  Advance,  irrevocable
prior  notice by  telephone  or telecopy  and shall  confirm any such  telephone
notice with a written request for Advance;  provided,  however, that the failure
by the Borrower to confirm any notice by  telephone  or telecopy  with a request
for Advance shall not invalidate any notice so given.

         (b) Notification of Lenders. Upon receipt of a request for Advance, the
Agent shall promptly notify each Lender by telephone or telecopy of the contents
thereof and the amount of each Lender's portion of any such Advance. Each Lender
shall,  not later than 2:00 p.m.  (Boston  time) on the date  specified for such
Advance in such notice, make available to the Agent at the Agent's office, or at
such account as the Agent shall  designate,  the amount of such Lender's portion
of the Advance in immediately available funds.

         (c)  Disbursement.  Prior to 3:00 p.m.  (Boston time) on the date of an
Advance,  the Agent shall,  subject to the  satisfaction  of the  conditions set
forth in  ss.3.4(b),  disburse  the amounts  made  available to the Agent by the
Lenders in like funds by  transferring  the amounts so made available by deposit
into the Borrower's  account  maintained  with BKB.  Unless the Agent shall have
received  notice from a Lender prior to 11:00 a.m.  (Boston time) on the date of
any Advance that such Lender will not make  available to the Agent such Lender's
ratable portion of such Advance,  the Agent may assume that such Lender has made
or will make such portion available to the Agent on the date of such Advance and
the Agent may, in its sole discretion and in reliance upon such assumption, make
available to the  Borrower on such date a  corresponding  amount.  If and to the
extent such Lender shall not have so made such ratable portion  available to the
Agent,  such  Lender  agrees to repay to the  Agent  forthwith  on  demand  such
corresponding  amount together with interest thereon, for each day from the date
such  amount is made  available  to the  Borrower  until the date such amount is
repaid  to the  Agent,  (x) for the  first  two  Business  Days,  at the rate on
overnight Federal funds  transactions with members of the Federal Reserve System
arranged by Federal  funds  brokers,  as  published  for such day by the Federal
Reserve Lender of New York, and (y) thereafter, at the Base Rate. If such Lender
shall repay to the Agent such corresponding  amount, such amount so repaid shall
constitute such Lender's portion of the applicable  Advance for purposes of this
Agreement  and if both such  Lender  and the  Borrower  shall pay and repay such
corresponding  amount,  the Agent shall  promptly  relend to the  Borrower  such
corresponding  amount. If such Lender does not repay such  corresponding  amount
immediately  upon the  Agent's  demand  therefor,  the Agent  shall  notify  the
Borrower and the Borrower shall immediately pay such corresponding amount to the
Agent.  The failure of any Lender to fund its  portion of any Advance  shall not
relieve  any  other  Lender of its  obligation,  if any,  hereunder  to fund its
respective  portion of the Advance on the date of such borrowing,  but no Lender
shall be responsible for any such failure of any other Lender. In the event that
a Lender  for any reason  fails or refuses to fund its  portion of an Advance in
violation of this Agreement, then, until such time as such Lender has funded its
portion of such  Advance,  or all other  Lenders have  received  payment in full
(whether by  repayment  or  prepayment)  of the  principal  and  interest due in
respect of such Advance, such non-funding Lender shall (i) have no right to vote
regarding  any  issue on which  voting  is  required  or  advisable  under  this
Agreement or any other Loan Document,  and (ii) shall not be entitled to receive
any  payments  of  principal,  interest  or fees  from the  Agent  (or the other
Lenders) in respect of its Loans,  which amounts may be applied by the Agent for
the benefit of the Agent and the other Lenders in accordance with the provisions
of ss.10.5(b)  and  thereafter  in a manner  determined by the Agent in its sole
discretion. Furthermore, upon such failure of a Lender to fund its portion of an
Advance,  the  Agent  shall  have  the  right,  but not the  obligation,  at its
election,  to purchase the portion of the Loan held by such  non-funding  Lender
for a purchase  price equal to the then  outstanding  principal  balance of such
Lender's Loan or portion thereof.

                                     ARTICLE 4.  PAYMENT AND REPAYMENT

          Section 4.1 MANDATORY REPAYMENTS AND PREPAYMENTS. Borrower shall repay
the Term  Loans in full on the  Term  Loan Maturity Date.

         Section 4.2 VOLUNTARY PREPAYMENTS. Borrower may make prepayments to the
Agent for the  ratable  accounts  of the Term Loan  Lenders  of any  outstanding
principal amount of the Term Loans upon three (3) days notice to the Agent.

         Section 4.3 PAYMENT OR OTHER ACTIONS ON NON-BUSINESS DAYS. Whenever any
payment  to be made  hereunder  shall be stated to be due on a day other  than a
Business Day, such payment  shall be made on the next  succeeding  Business Day,
and such extension of time shall in such case be included in the  computation of
payment of interest or fees, as the case may be. In the case of any other action
the last day for  performance of which shall be a day other than a Business Day,
the date for performance shall be extended to the next succeeding Business Day.

         Section  4.4 METHOD AND TIMING OF  PAYMENTS.  Borrower  shall make each
payment to be made by Borrower  hereunder  not later than 3:00 (Boston  time) on
the day when  due in  lawful  money of the  United  States  to the  Agent at its
address set forth in Section  16.1 in  immediately  available  funds.  The Agent
will, after its receipt  thereof,  distribute like funds relating to the payment
of principal,  interest or any other amounts  payable  hereunder  ratably to the
Lenders in accordance with their respective Commitment Percentages.  Any payment
made by  Borrower to the Agent  under this  Agreement  or under the Notes in the
manner provided in this Agreement shall be deemed to be a payment to each of the
respective  Lenders,  unless the provisions of this Agreement  expressly provide
that any such  payment  shall be  solely  for the  account  of the  Agent or any
specific Lender.

         Section 4.5 CURRENCY.  All payments and prepayments  provided for under
this Agreement  shall be made in lawful currency of the United States of America
in immediately available funds.

         Section  4.6 FOREIGN  LENDERS.  Each Lender  (including  any  Successor
Lender)  that is not a citizen or  resident of the United  States of America,  a
corporation,  partnership  or other entity  created or organized in or under the
laws of the  United  States of America  (or any  jurisdiction  thereof),  or any
estate or trust that is subject to federal  income  taxation  regardless  of the
source of its income ("Non-U.S. Lender") shall deliver to Borrower and the Agent
(or, in the case of a Credit  Participant,  to the Lender from which the related
participation  shall have been  purchased)  two copies of either  U.S.  Internal
Revenue  Service  Form 1001 or Form 4224,  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 Form W-8,
or any subsequent  versions thereof or successors thereto (and, if such Non-U.S.
Lender  delivers  a Form  W-8,  an  annual  certificate  representing  that such
Non-U.S.  Lender is not a "bank" for purposes of Section  881(c) of the Code, is
not a 10% shareholder  (within the meaning of Section  871(h)(3)(B) of the Code)
of Borrower  and is not a  controlled  foreign  corporation  related to Borrower
(within the meaning of Section 864(d)(4) of the Code)),  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 Borrower under
this Agreement and the other Lender Agreements. 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 Credit  Participant,  on or before the date such Credit
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 Borrower at any time it determines that it is no longer in
a position to provide any previously  delivered  certificate to Borrower (or any
other form of  certification  adopted by the U.S.  taxing  authorities  for such
purpose).  Notwithstanding  any other  provision of this Section 4.6, a Non-U.S.
Lender  shall not be required to deliver any form  pursuant to this  Section 4.6
that such Non-U.S. Lender is not legally able to deliver.

                    ARTICLE 5. REPRESENTATIONS AND WARRANTIES

         In order to  induce  the  Agent  and the  Lenders  to enter  into  this
Agreement  and to induce the Lenders to make the Loans as  contemplated  hereby,
Borrower hereby makes the following representations and warranties:

         Section 5.1 EXISTENCE,  CHARTER AND FORMATION DOCUMENTS,  ETC. Borrower
is a  corporation,  and is  validly  organized,  legally  existing  and in  good
standing  under the laws of the  jurisdiction  in which it is organized  and has
corporate  power to own its properties and conduct its business as now conducted
and as proposed to be conducted by it. Certified copies of the charter documents
and  By-Laws  of  Borrower  have been  delivered  to the  Lenders  and are true,
accurate and complete as of the date hereof.

         Section  5.2  PRINCIPAL   PLACE  OF  BUSINESS;   LOCATION  OF  RECORDS.
Borrower's and each Subsidiary's  principal place of business is as described on
Schedule 5.2. All of the books and records or true and complete  copies  thereof
relating to the accounts and  contracts of Borrower are and will be kept at such
location and at the other locations designated on Schedule 5.2.

         Section  5.3  QUALIFICATION.  Borrower  and  each  Subsidiary  is  duly
qualified,  licensed and  authorized to do business and is in good standing as a
foreign  corporation or partnership in each jurisdiction  where its ownership or
leasing of  properties  or the  conduct  of its  business  requires  it to be so
qualified  except to the extent  that any failure to be so  qualified  would not
have a Material Adverse Effect.

          Section 5.4 SUBSIDIARIES.

          (a) Borrower has no Subsidiaries except for the Borrower Subsidiaries.

         (b)  There  are  no  material  transactions  or  relationships  between
Borrower and American Ski or its Subsidiaries  except for the InterCompany Debt,
except as disclosed on Schedule 5.4, or after the Closing  Date,  pursuant to an
Affiliate transaction permitted hereunder.

         Section 5.5 POWER.  The  execution,  delivery and  performance  of this
Agreement,  the  Term  Notes,  the  Security  Agreements  and all  other  Lender
Agreements and other  documents  delivered or to be delivered by Borrower to the
Agent  or the  Lenders,  and  the  incurrence  of  Indebtedness  to the  Lenders
hereunder or thereunder, now or hereafter owing:

         (a) are within the powers of Borrower,  having been duly  authorized by
its Board of Directors or other similar governing body, and, if required by law,
by its charter documents or by its By-Laws, by its stockholders or partners;

         (b) do not require any  approval  or consent  of, or filing  with,  any
governmental agency or other Person (except for such approvals and consents that
have been obtained and delivered to the Lenders) and are not in contravention of
law or the  terms  of the  charter  documents  or  By-Laws  of  Borrower  or any
amendment thereof;

         (c)      do not and will not

                  (i) result in a breach of or  constitute  a default  under any
         indenture or loan or credit agreement or any other agreement,  lease or
         instrument  to which  Borrower or any  Subsidiary  or American Ski is a
         party or by which  Borrower or any Subsidiary or American Ski or any of
         their  respective  properties  are bound or affected,  except for those
         breaches or defaults  which have been waived or consented to in writing
         or which will not in the aggregate result in a Material Adverse Effect,

                  (ii) result in a violation of or default under any law,  rule,
         regulation, order, writ, judgment, injunction, decree, determination or
         award having applicability to Borrower or any Subsidiary,  or to any of
         their respective properties.

         Section 5.6 VALID AND BINDING  OBLIGATIONS.  This  Agreement,  the Term
Loan Notes, the Security Agreements and all the other Lender Agreements executed
in  connection  herewith  and  therewith  constitute,  or will  constitute  when
delivered,  the  valid and  binding  obligations  of  Borrower,  enforceable  in
accordance with their respective terms, except as the enforceability thereof may
be subject to  bankruptcy,  insolvency,  moratorium and other laws affecting the
rights and  remedies of  creditors  and secured  parties and to the  exercise of
judicial discretion in accordance with general equitable principles,  subject to
perfection as provided herein.

         Section 5.7 OTHER AGREEMENTS. Borrower is not a party to any indenture,
loan or credit  agreement,  or any lease or other  agreement or  instrument,  or
subject to any charter or corporate restriction or any judgment,  decree, order,
rule or regulation, which at the time it is entered into is reasonably likely to
have a Material  Adverse  Effect,  or which restricts the ability of Borrower to
carry out any of the  provisions  of this  Agreement,  the Term Loan Notes,  the
Security  Agreements  or any of the Lender  Agreements  executed  in  connection
herewith and therewith except for the compliance by Borrower with the provisions
of Section 11.2.

         Section 5.8 PAYMENT OF TAXES.  Borrower has filed all tax returns which
are  required  to be filed  and has paid,  or made  adequate  provision  for the
payment of, all taxes which have or may become due  pursuant to said  returns or
to  assessments  received,  except such as are being  contested in good faith by
appropriate proceedings.

         Section 5.9 FINANCIAL  STATEMENTS.  All balance sheets,  statements and
other financial information furnished to the Agent and the Lenders in connection
with this Agreement and the transactions contemplated hereby, including, without
limitation,  the financial  statement  for the fiscal  quarter ended October 25,
1998,  has been  prepared  in  accordance  with  generally  accepted  accounting
principles  consistently  applied  throughout the periods  involved  (except for
normal  year-end  adjustments  and for the  absence of  footnotes  with  interim
statements) and present fairly the consolidated  financial condition of Borrower
and its Subsidiaries  reported therein and all such information so furnished was
true, correct and complete as of the date thereof, in all material respects.

         Section  5.10  OTHER  MATERIALS  FURNISHED.  The  written  information,
exhibits,  memoranda  or reports  furnished to the Agent or the Lenders by or on
behalf of Borrower in connection with the  negotiation of this Agreement,  taken
as a whole, does not contain any material  misstatement of fact or omit to state
a  material  fact  necessary  to  make  the  statements  contained  therein  not
misleading.

         Section 5.11 STOCK.  As of the date hereof,  the issued and outstanding
capital  stock of Borrower is as set forth on Schedule  5.11  hereto.  There are
presently  issued by  Borrower  and  outstanding  the  shares of  capital  stock
indicated on Schedule 5.11.  Borrower has received the  consideration  for which
such stock was  authorized  to be issued and have  otherwise  complied  with all
legal requirements relating to the authorization and issuance of shares of stock
and all such shares are validly issued, fully paid and non-assessable.  Borrower
has no other capital stock of any class outstanding.

         Section 5.12 CHANGES IN CONDITION.  Since  October 25, 1998,  there has
been no material  adverse  change in the business or assets or in the condition,
financial or otherwise,  of Borrower and its Subsidiaries  taken as a whole, and
neither Borrower nor any Subsidiary have entered into any transaction outside of
the  ordinary  course  of  business  which  is  material  to  Borrower  and  its
Subsidiaries  taken  as a whole  other  than:  (i) the  closing  of the Key Bank
Facility and (ii) the  Borrower's  buy-out of the  leasehold  interest of United
Concerts at The Canyons  for an  aggregate  cash  settlement  of  $1,000,000.00.
Neither Borrower nor any Subsidiary have, as of the date thereof, any contingent
liabilities  of any material  amount other than the Senior Note Guaranty and the
existing guaranty of a portion of the Key Bank Facility by the Borrower.

         Section 5.13      ASSETS, LICENSES, PATENTS, TRADEMARKS, ETC.

         (a)  Borrower  has good and  marketable  title to,  or valid  leasehold
interests  in, all of its assets,  real and personal,  including the  Designated
Properties  and  the  Purchase   Option,   subject  to  no  liens,   charges  or
encumbrances,  except for liens, charges and encumbrances  described in Schedule
5.13 and permitted by Section 9.2 hereof.

         (b) Borrower owns all material licenses,  patents, patent applications,
copyrights,  service marks, trademarks,  trademark applications, and trade names
necessary to continue to conduct its business.

         (c) Except as set forth on Schedule 5.13 hereto, no leasehold  personal
property  interest which Borrower is prohibited by the lessor from assigning and
no  interest  in  any  personal  property  lease  agreement  which  Borrower  is
prohibited from assigning is material,  or taken as a whole are material, to the
operations of Borrower.

         Section 5.14 LITIGATION.  There is no litigation,  at law or in equity,
or any proceeding  before any federal,  state,  provincial or municipal board or
other  governmental  or  administrative  agency  pending or, to the knowledge of
Borrower,  threatened,  or any basis therefor, which involves a material risk of
any judgment or liability  which could have a Material  Adverse  Effect,  and no
judgment, decree, or order of any federal, state, provincial or municipal court,
board or other  governmental  or  administrative  agency has been issued against
Borrower  or any of its  Subsidiaries  which has or may have a Material  Adverse
Effect.

         Section 5.15 PENSION  PLANS.  No employee  benefit plan  established or
maintained by Borrower or any of its  Subsidiaries  or any other Person a member
of the  same  "control  group,"  as  American  Ski  or  any of its  Subsidiaries
("Pension  Affiliate"),  within the  meaning of Section  302(f)(6)(b)  of ERISA,
(including  any  multi-employer  plan  to  which  American  Ski  or  any  of its
Subsidiaries contributes) which is subject to Part 3 of Subtitle B of Title I of
the  ERISA,  had a  material  accumulated  funding  deficiency  (as such term is
defined in Section  302 of ERISA) as of the last day of the most  recent  fiscal
year of such  plan  ended  prior  to the  date  hereof,  or  would  have  had an
accumulated funding deficiency (as so defined) on such day if such year were the
first  year of such  plan to  which  Part 3 of  Subtitle  B of  Title I of ERISA
applied,  and no  material  liability  under  Title IV of ERISA has been,  or is
expected by Borrower or any of its  Subsidiaries to be, incurred with respect to
any such plan by Borrower or any of its  Subsidiaries or any Pension  Affiliate.
The execution, delivery and performance by American Ski and the Borrower of this
Agreement and the other Lender  Agreements  executed on the date hereof will not
involve any prohibited  transaction  within the meaning of ERISA or Section 4975
of the Code. Borrower and its Subsidiaries have no Pension Plan other than those
described on Schedule 5.15.

         Section  5.16  OUTSTANDING  INDEBTEDNESS.   After  application  of  the
proceeds of the Term Loans, the outstanding amount of borrowed money of Borrower
and its  Subsidiaries  as of the date hereof is correctly  set forth on Schedule
5.16  hereto,  and said  Schedule  correctly  describes  the credit  agreements,
guaranties, leases and other instruments pursuant to which such Indebtedness has
been   incurred  and  all  liens,   charges  and   encumbrances   securing  such
Indebtedness. This schedule also describes all agreements and other arrangements
pursuant  to which  Borrower  or any of its  Subsidiary  may  borrow  any money.
Neither Borrower nor any Subsidiary has any indebtedness other than as set forth
on Section 5.16 and those amounts payable from Term Loan Advances on the Closing
Date.

          Section 5.17  ENVIRONMENTAL  MATTERS.  Except as set forth on Schedule
5.17:

         (a) Neither  Borrower,  any  Subsidiaries,  nor any  operator of any of
their respective  properties is in violation,  or to Borrower's  knowledge is in
alleged  violation,  of any  Environmental  Law,  which  violation  would have a
Material Adverse Effect.

         (b)  Neither  Borrower,  nor any  operator  of any of their  respective
properties  has  received  notice  from  any  third  party,   including  without
limitation any federal, state, county, or local governmental authority, (i) that
it  has  been   identified  as  a  potentially   responsible   party  under  the
Comprehensive Environmental Response,  Compensation and Liability Act of 1980 as
amended  ("CERCLA")  or any  equivalent  state law,  with respect to any site or
location; (ii) that any Hazardous Materials which it has generated,  transported
or disposed of, has been found at any site at which a federal, state, county, or
local  agency or other third party has  conducted  or has ordered  Borrower,  or
another  third party or parties  (E.G.  a committee of  potentially  responsible
parties) to conduct a remedial  investigation,  removal or other response action
pursuant to any Environmental Law; or (iii) that it is or shall be a named party
to any claim,  action, cause of action,  complaint  (contingent or otherwise) or
legal or administrative  proceeding arising out of any actual or alleged release
or threatened  release of Hazardous  Materials.  For purposes of this Agreement,
"release"  means any past or  present  releasing,  spilling,  leaking,  pumping,
pouring,  emitting,  emptying,   discharging,   injecting,  escaping,  leaching,
disposing or dumping of any  Hazardous  Material  into the  Environment,  or the
uncontained presence of any Hazardous Material in the Environment.

         (c) (i)  Borrower,  and each  operator  of any real  property  owned or
operated  by Borrower  is in  compliance,  in all  material  respects,  with all
provisions of the  Environmental  Laws relating to the handling,  manufacturing,
processing,  generation, storage or disposal of any Hazardous Materials; (ii) to
the best of  Borrower's  knowledge,  no portion of property  owned,  operated or
controlled  by  Borrower  has  been  used  for  the   handling,   manufacturing,
processing,  generation,  storage or disposal of Hazardous  Materials  except in
accordance with applicable  Environmental  Laws; (iii) to the best of Borrower's
knowledge,  there have been no releases  or  threatened  releases  of  Hazardous
Materials on, upon, into or from any property  owned,  operated or controlled by
Borrower,  which releases could have a Material Adverse Effect; (iv) to the best
of Borrower's knowledge,  there have been no releases of Hazardous Materials on,
upon,  from or into any real  property in the  vicinity  of the real  properties
owned,  operated or controlled by Borrower  which,  through soil or  groundwater
contamination,  may have come to be located on the  properties of Borrower;  and
(v) to the  best  of  Borrower's  knowledge,  there  have  been no  releases  of
Hazardous  Materials on, upon,  from or into any real  property  formerly but no
longer owned, operated or controlled by Borrower.

         (d) None of the  properties  of  Borrower is or shall be subject to any
applicable environmental cleanup responsibility law or environmental restrictive
transfer law or  regulation by virtue of the  transactions  set forth herein and
contemplated hereby.
         Section 5.18 FOREIGN  TRADE  REGULATIONS.  Borrower is not (a) a person
included within the definition of "designated  foreign country" or "national" of
a  "designated  foreign  country" in Executive  Order No. 8389,  as amended,  in
Executive Order No. 9193, as amended,  in the Foreign Assets Control Regulations
(31  C.F.R.,  Chapter V, Part 500,  as  amended),  in the Cuban  Assets  Control
Regulations of the United States Treasury Department (31 C.F.R., Chapter V, Part
515,  as  amended)  or in the  Regulations  of the  Office  of  Alien  Property,
Department of Justice (8 C.F.R., Chapter II, Part 507, as amended) or within the
meanings  of any of the  said  Orders  or  Regulations,  or of any  regulations,
interpretations, or rulings issued thereunder, or in violation of said Orders or
Regulations or of any regulations, interpretations or rulings issued thereunder;
or (b) an  entity  listed  in  Section  520.101  of the  Foreign  Funds  Control
Regulations (31 C.F.R., Chapter V, Part 520, as amended).

         Section  5.19  GOVERNMENTAL  REGULATIONS.  Borrower  is not  subject to
regulation  under the Public  Utility  Holding  Company Act of 1935, the Federal
Power Act, the Investment  Company Act of 1940, or is a common carrier under the
Interstate  Commerce Act, or is engaged in a business or activity subject to any
statute or regulation  which regulates the incurring by Borrower of Indebtedness
for borrowed  money,  including  statutes or  regulations  relating to common or
contract carriers or to the sale of electricity, gas, steam, water, telephone or
telegraph or other public utility services.

         Section 5.20 MARGIN  STOCK.  Borrower  does not own any "margin  stock"
within the  meaning of  Regulation  U of the Board of  Governors  of the Federal
Reserve System, or any regulations,  interpretations or rulings thereunder,  nor
is  Borrower  engaged  principally  or as  one of its  important  activities  in
extending  credit which is used for the purpose of purchasing or carrying margin
stock.

         Section 5.21 SOLVENCY.  Borrower, before and after giving effect to the
transactions  contemplated by this Agreement and the other Lender  Agreements is
Solvent.

          Section 5.22 COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC.

         (a)  Borrower  is not in  violation  of any  provision  of its  charter
documents,  bylaws, or any agreement or instrument to which it may be subject or
by  which  it or any of  its  properties  may be  bound  or any  decree,  order,
judgment, statute, license, rule or regulation, in any of the foregoing cases in
a manner that could result in a Material Adverse Effect.

         (b) Borrower has complied in all respects with the  requirements of the
Hart-Scott-Rodino Anti-Trust Improvement Act of 1976, as amended ("HSR Act")

         Section  5.23  ABSENCE  OF  FINANCING  STATEMENTS,  ETC.  To  the  best
knowledge of Borrower and except with  respect to Permitted  Liens,  there is no
financing statement,  security agreement, chattel mortgage, real estate mortgage
or other document filed or recorded with any filing  records,  registry or other
public office,  that purports to cover,  effect or give notice of any present or
possible  future  lien on, or  security  interest  in, any assets or property of
Borrower or any Subsidiary or any rights relating thereto.

          Section  5.24  FISCAL  YEAR.  Borrower  has a fiscal year which is the
twelve-months ending on the last Sunday of July of each year.

          Section  5.25  TAX  STATUS.  Borrower  is a "C"  corporation  for  all
purposes under the Code.

         Section 5.26 PURCHASE OPTION.  The Purchase Option is in full force and
effect  and no event of  default or  default  exists  thereunder.  No consent or
approval  of the  optionor  is  required  for the pledge of the  interest of the
Borrower to Lender thereunder.

         Section  5.27  LEASES.  As of the Closing Date neither the Borrower nor
any  Borrower  Subsidiary  is a party to any  Lease  other  than as set forth on
Schedule  5.27.  Any Leases  subsequently  entered into by the Borrower  must be
approved by Agent and will be subject to a first in priority  perfected security
interest.  All such  Leases  shall be in full  force and  effect and no event of
default or default shall exist thereunder.  No consent shall be required for the
pledge of the interest of the Borrower to the Lender thereunder.

         Section 5.28 PERMITTED  CONSTRUCTION LOANS. The Permitted  Construction
Loans have been closed and are in full force and effect;  no Default or Event of
Default  exists  thereunder;  the  amounts  thereof are  sufficient,  when taken
together with amounts  previously  invested by the Borrower or a Subsidiary,  or
scheduled to be invested under the Budget to complete the Project for which they
were granted in the manner contemplated by the Permitted  Construction Loan; and
the lender  thereof  has not  indicated  any  intent to  withhold  any  advances
thereunder  other than the delivery of certain due diligence  items set forth in
the documents for the respective Permitted Construction Loan.

          Section  5.29 STATUS  MEMORANDUM.  The  information  contained  in the
Status Memorandum is true and correct in all material respects.

         Section 5.30  SECURITY  AGREEMENTS.  The Security  Agreements  create a
perfected first in priority security  interest in and to the Collateral  subject
only to Permitted  Exceptions.  The Collateral includes all of the assets of the
Borrower and all shares of all equity  interests  of the  Borrower  Subsidiaries
except for  personal  property  which is either a de  minimis  asset or non core
asset of the Borrower.

         Section  5.31  COMPREHENSIVE  EFFECT OF  MASTER  EASEMENT.  The  Master
Easement  conveys to the Lenders all utilities,  access rights,  and development
rights in sufficient  scope and in an encumbered state to permit the development
of the Mortgaged Property for the Contemplated  Improvements and as set forth in
the  Appraisals  delivered to the Agent on or before the Closing Date.  Borrower
acknowledges  receipt of the Appraisals on or before the Closing Date subject to
completion  of master  planning.  All such rights may be  exercised  without the
prior consent of the Borrower any Affiliate of Borrower or American Ski,  except
as set forth in the Master Easement.

                       ARTICLE 6. REPORTS AND INFORMATION

         Section 6.1 FINANCIAL  STATEMENTS AND OTHER REPORTS.  The Borrower will
furnish  or  cause to be  furnished  financial  statements  and  other  monthly,
quarterly  or other  periodic  reports  to the Agent and each of the  Lenders as
follows:

                  (a) within  ninety  (90) days  after the close of each  fiscal
year, the  consolidated  balance sheets and  consolidated  statements of income,
retained earnings and cash flows (the "Financial  Statements") for such year, in
reasonable  detail,  and,  setting forth in comparative  form the  corresponding
figures for the preceding year,  prepared pursuant to agreed upon procedures and
in  accordance  with  generally  accepted  accounting  principles   consistently
applied,  accompanied by a report of an independent  certified public accountant
selected by Borrower and approved by the Agent;

                  (b) within  forty-five  (45) days after the end of each Fiscal
Quarter of each fiscal year, the unaudited balance sheet, income statement and a
statement of cash flows similar to those  required by clause (a) above (but with
a requirement as to comparison with the prior year) as of the end of such Fiscal
Quarter and for such Fiscal  Quarter then ended and for the Fiscal  Quarter from
the  beginning  of the current  fiscal  year to the end of such Fiscal  Quarter,
prepared  in  accordance   with   generally   accepted   accounting   principles
consistently  applied  and  certified  as  to  preparation  in  accordance  with
generally accepted accounting principles and that such statements fairly present
the financial condition of the Borrower at the dates thereof and for the periods
then ended,  on behalf of the Borrower by its chief financial  officer,  subject
only to changes resulting from audit and normal year-end adjustments;

                  (c) at the delivery of each quarterly and annual statement,  a
detailed  computation  showing compliance with the Financial Covenants certified
by the chief financial  officer of the Borrower or other  designated  officer of
Borrower acceptable to Agent ("Compliance Certificate");  and further certifying
that such officer has caused this  Agreement to be reviewed and has no knowledge
of any Default by it in the  performance  or observance of any of the provisions
hereof,  during such month or at the end of such year,  or, if such  officer has
such knowledge, specifying each Default and the nature thereof;

                  (d) on a quarterly  basis:  (i) a  certification  by the chief
financial  officer of the  Borrower as to the progress of  construction  and the
ability of the Borrower to complete the Permitted  Construction  Projects in the
time  required  by the  Permitted  Construction  Lender  or  under  any  presale
contracts with respect to such Project, and evidence that no default or event of
default  under the Permitted  Construction  Loan and that all  requirements  and
conditions for further advances thereunder have been met, together with: (i) the
most recent construction  inspector report for each Permitted  Construction Loan
and (ii) at the  request of the  Agent,  copies of all  reports of  construction
inspectors and architects  retained to render periodic  construction  reports to
the Permitted  Construction Loans Lenders,  copies of the applicable budgets and
other financial information relevant to the Permitted Construction Projects;

                           (ii)     evidence that the Term Loan is in Balance;

                           (iii)  copies  of all  title  endorsements  and title
policies applicable to the Projects.

                  (e) promptly upon receipt  thereof,  copies of all  management
letters  which are  submitted  to Borrower  by its  independent  accountants  in
connection  with any annual or interim  audit of  Borrower's  books made by such
accountants;

                  (f) Borrower shall submit to the Agent and the Lenders updated
versions of the Budget and Cash Flow Projections on a semi-annual basis and Loan
Reserve  Analysis  quarterly or at such earlier times as may be requested by the
Agent;

                  (g) The Borrower shall submit to the Agent an updated  version
of the Loan Reserve  Analysis on a quarterly  basis.  The Loan Reserve  Analysis
shall provide an analysis of the rolling five month  interest  obligations  with
respect  to the  Term  Loans  and  evidence  that  the  Interest  Reserve  is in
sufficient  amount to fully fund the five month pro forma interest  requirement.
The Borrower  shall provide the Agent with all  necessary  support in performing
any due  diligence  required to verify the  information  reported in the updated
Loan  Reserve  Analysis  and  Budget.  In the  event  of a  dispute  as to  such
calculation, the Agent's calculation shall control;

                  (h) on a quarterly  basis, a Budget variance report as to each
category of the Budget  setting  forth the current  status of the Budget and the
variance of the  categories  thereof on an incurred  basis  during the  previous
quarter;
                  (i) on a monthly  basis, a report showing the total number and
dollar value of sales of all units at all  Projects,  including  the total units
closed with the total  purchase  price and Net  Proceeds,  the total units under
contract including purchase price and total deposit, and a status report of such
contracts and closings as to the amounts projected for the month in the Budget;

                  (j) such other periodic reports,  financial statements,  other
information as the Agent from time to time  reasonably  requests,  on a monthly,
quarterly or other  periodic  basis,  including,  without  limitation,  periodic
reports of financial information,  construction progress,  inventory,  marketing
and  sales  results,  and  compliance  with  financial,  environmental  or other
covenants and including a report from an independent certified public accountant
selected  by  Borrower  and  approved  by  Agent  certifying   without  material
qualification  such  financial  matters  relating  to  Borrower  or  a  Borrower
Subsidiary  as Agent may  reasonably  request.  Borrower  shall  submit to Agent
reports  required on an annual  basis  within  ninety (90) days,  on a quarterly
basis or within  forty-five  (45) days and on a monthly basis within thirty (30)
days each after the end of the applicable reporting period. The method and basis
of calculation of financial data shall be consistently  calculated in accordance
with generally accepted accounting principles;

                  (k) Borrower shall provide to Agent with all payments pursuant
to  Section  8.12,  a cash  reconciliation  of the  Borrower  and  the  Borrower
Subsidiaries  in form and  substance  acceptable to the Agent which sets forth a
report of: (i) the amount of cash and cash  equivalents of the Borrower and each
Borrower  Subsidiary as of the last date of the month;  (ii) the  calculation of
any reserves  including amounts included in the Borrower  Available Cash and the
Interest  Reserve;  and (iii) a reconciliation  of amounts in the Budget as they
apply to any reserves or cash distributed.

         Section 6.2 NOTICE OF DEFAULTS.  As soon as possible,  and in any event
within  five (5) days  after the  occurrence  of each  Default,  Borrower  shall
furnish to the Agent and each  Lender the  statement  of their  chief  executive
officers or chief financial  officers  setting forth details of such Default and
the action which Borrower has taken or propose to take with respect thereto.

         Section  6.3  NOTICE OF  LITIGATION.  Promptly  after the  commencement
thereof,  Borrower  shall furnish to the Agent and each Lender written notice of
all actions, suits and proceedings before any court or governmental  department,
commission,  board,  bureau,  agency or  instrumentality,  domestic  or foreign,
affecting  Borrower,  which,  if  adversely  determined,  would  have a Material
Adverse Effect.

         Section 6.4 REPORTABLE EVENTS. At any time that Borrower or any Pension
Affiliate  has a Pension  Plan,  Borrower  shall  furnish  to the Agent and each
Lender,  as soon as  possible,  but in any event  within  thirty (30) days after
Borrower knows or has reason to know that any  Reportable  Event with respect to
any Pension Plan has occurred,  the statement of the chief executive officers or
chief  financial  officers  of  Borrower  setting  forth  the  details  of  such
Reportable  Event and the action  which  Borrower or any Pension  Affiliate  has
taken or  proposes to take with  respect  thereto,  together  with a copy of the
notice of such Reportable Event to the Pension Benefit Guaranty Corporation.

         Section 6.5 COMMUNICATIONS WITH INDEPENDENT PUBLIC ACCOUNTANTS.  At any
reasonable  time and from time to time upon reasonable  request,  Borrower shall
provide the Agent and the Lenders and any agents or representatives of the Agent
and the Lenders access to the independent public accountants of Borrower and its
Subsidiaries to discuss their financial condition, including, without limitation
any  recommendations  of such  independent  public  accountants  concerning  the
management,  finances,  financial  controls or  operations  of Borrower  and its
Subsidiaries.

         Section 6.6 ENVIRONMENTAL  REPORTS. In the event that and to the extent
that any of the  following  provides  notice of  circumstances,  occurrences  or
events that have or could  reasonably  be expected to have a material  impact on
the  operations  of Borrower,  the Borrower  shall furnish to the Agent and each
Lender:  (a) not later than seven (7) days after notice  thereof,  notice of any
enforcement  actions, or, to the knowledge of Borrower,  threatened  enforcement
actions  affecting  Borrower or any  Subsidiary  by any  Governmental  Authority
related to Environmental Laws; (b) copies,  promptly after they are received, of
all  orders,  notices  of  responsibility,  notices  of  violation,  notices  of
enforcement   actions,  and  assessments,   and  other  written   communications
pertaining  to any such  orders,  notices,  claims and  assessments  received by
Borrower or any Subsidiary from any Governmental  Authority;  (c) not later than
seven (7) days after notice  thereof,  notice of any civil claims or  threatened
civil claims  affecting  Borrower or any  Subsidiary by any third party alleging
any  violation  of  Environmental  Laws or harm to human  health,  safety or the
environment;  (d) copies of all cleanup plans, site assessment reports, response
plans,  remedial  proposals,  or  other  submissions  of  American  Ski  or  any
Subsidiary,  other third  party  (e.g.,  committee  of  potentially  responsible
parties  at a  Superfund  site),  or any  combination  of same,  submitted  to a
Governmental   Authority  in  response  to  any   communication   referenced  in
subsections  (a) and (b) herein  simultaneously  with their  submission  to such
Governmental Authority;  and (e) from time to time, on reasonable request of the
Agent,  evidence  satisfactory  to the Agent of Borrower  and its  Subsidiaries'
insurance coverage, if any, for any environmental liabilities.

         Section 6.7  MISCELLANEOUS.  Borrower  shall  provide the Agent and the
Lenders with such other information as the Agent or the Lenders may from time to
time  reasonably  request  respecting  the  business,   properties,   prospects,
condition  or   operations,   financial  or  otherwise,   of  Borrower  and  its
Subsidiaries.

         Section 6.8 PURCHASE OPTION AND LEASES. Borrower shall take all actions
necessary  to cause the Leases and the  Purchase  Option to remain in full force
and  effect and to cause no event of  default  to occur or exist  thereunder  or
under any Purchase Money  Mortgage.  Borrower  hereby  authorizes the Lenders to
take such actions as the Lenders may deem  necessary  to cause this  warranty to
remain true and correct. Lenders may advance sums pursuant to the foregoing from
and after  the  expiration  of ten (10)  days  from the  giving of notice to the
Borrower of the intent of the Lender to undertake  such action  unless  either a
Lease or the Purchase Option would terminate without immediate action, and then,
in such  event,  Lenders  may take  immediate  action  hereunder.  All  funds so
advanced  shall be secured by the  Security  Agreements,  bear  interest  at the
Default Rate of interest specified in the Notes and shall be immediately due and
payable.

         Section 6.9 PERMITS,  ZONING AND OTHER DEVELOPMENT RIGHTS. Borrower and
the Lenders  acknowledge  and  recognize  that the Mortgaged  Properties  are in
various stages of permitting for ultimate commercial development. Borrower shall
take such actions as are necessary to cause such permits to be issued and vested
in the Borrower and to be included in the Security  Agreements.  Borrower  shall
provide such  additional  information  and  periodic  reports as the Lenders may
request  concerning  the business  plan and issuance of the  foregoing  permits,
zoning and development rights.

         Section 6.10 MARRIOTT JOINT VENTURE.  Borrower shall cause the Marriott
Joint  Venture  to remain in full  force and  effect  and to cause no default or
event of default thereunder.

         Section 6.11 PERMITTED  CONSTRUCTION  LOANS.  Borrower shall provide to
the Agent  upon  receipt  copies of all  notices  of Default or Event of Default
under the Permitted Construction Loans and copies of all loan documents executed
in connection therewith.

          Section 6.12 BUDGET COMPLIANCE. At all times, the Term Loan must be in
Balance.

          ARTICLE 7. FINANCIAL COVENANTS

         On and after the date hereof, until all of the Lender Obligations shall
have been paid in full and the  Lenders  shall  have no  commitment  to make any
loans or advances hereunder, Borrower shall observe the following covenants:

          Section 7.1 MINIMUM  TANGIBLE  NET WORTH.  Borrower  shall  maintain a
minimum  Tangible  Net  Worth  at  all  times  of  not  less  than  the  sum  of
$60,000,000.00.

         Section 7.2 LOAN TO VALUE RATIO.  From and after the Closing Date,  the
Borrower will not permit the amount  outstanding under the Lender Obligations to
exceed 45% of the Appraised Value of the Collateral.

                        ARTICLE 8. AFFIRMATIVE COVENANTS

         On and after the date hereof, until all of the Lender Obligations shall
have been paid in full and the  Lenders  shall  have no  commitment  to make any
loans or advances hereunder,  Borrower will, comply with the following covenants
and provisions in all material respects:

         Section 8.1  REPRESENTATIONS  AND  WARRANTIES.  Borrower shall take all
actions necessary in order to cause the representations and warranties set forth
in this Agreement to be true, accurate and in full force and effect.

         Section 8.2 TAXES AND OTHER OBLIGATIONS. Borrower (a) will duly pay and
discharge,  or cause to be paid and discharged,  before the same shall become in
arrears, all material taxes, assessments and other governmental charges, imposed
upon each of them and its properties,  sales and activities,  or upon the income
or profits therefrom,  as well as the claims for labor,  materials,  or supplies
which  if  unpaid  might  by law  result  in a lien or  charge  upon  any of its
properties;  PROVIDED,  HOWEVER,  that  Borrower may contest any such charges or
claims  in good  faith  so long as (i) an  adequate  reserve  therefor  has been
established  and  is  maintained  if  and  as  required  by  generally  accepted
accounting  principles  and (ii) no action to  foreclose  any such lien has been
commenced  and (b)  will  promptly  pay or  cause  to be paid  when  due,  or in
conformance with customary trade terms (but not later than ninety (90) days from
the due date in the case of trade debt), all material lease  obligations,  trade
debt and all other Indebtedness incident to its operations. Borrower shall cause
all  applicable tax returns and all amounts due thereunder to be filed and paid,
as the case may be, in order to maintain  its good  standing  with the  Internal
Revenue Service and state, local and foreign tax authorities.

         Section  8.3  MAINTENANCE  OF  PROPERTIES  AND LEASES.  Borrower  shall
maintain,  keep  and  preserve  all of its  material  properties  (tangible  and
intangible) including the Mortgaged Properties in good repair and working order,
ordinary wear and tear excepted. Borrower shall replace and improve its material
properties  as  necessary  for the conduct of its  business.  Borrower  and each
Subsidiary  shall comply in all material  respects  with all leases naming it as
lessee.
         Section 8.4  INSURANCE.  The Borrower will  maintain  with  financially
sound and  reputable  insurers  insurance  with  respect to its  properties  and
business  against such  casualties  and  contingencies  including  windstorm and
hurricane  insurance and as shall be in accordance with the general practices of
businesses  engaged in similar  activities in similar  geographic  areas, and in
amounts,  containing  such terms,  in such forms and for such  periods as may be
reasonable and prudent in accordance with sound business practices. With respect
to the Collateral,  all such insurance  shall be in such amount,  such form, for
such periods and written by such companies as may be reasonably  satisfactory to
the Agent and shall be payable to the Agent and to the Borrower, as the case may
be, as their interests may appear. If a Default then exists, the Agent may apply
all proceeds received by it to pay the Obligations hereunder in such order as it
shall  determine in its  discretion;  but if no Default  then  exists,  then the
Borrower  shall  have the right to  determine  whether  to apply  such  proceeds
against the  Obligations  or against the costs of  repairing  or  restoring  the
damage to the Mortgaged Property.  All policies of insurance shall provide for a
minimum thirty (30) days prior written minimum  cancellation notice to the Agent
and shall name the Agent as additional  insured  party,  and, in the case of the
Collateral,  shall name the Agent as mortgagee and loss payee.  Certificates  of
insurance  (or, if requested by the Agent,  certified  copies of policies)  with
respect to all renewals or  replacements  of such insurance from time to time in
force together with evidence of payment of premiums thereon  satisfactory to the
Agent  shall be  delivered  to the  Agent at least  ten  (10)  days  before  the
expiration date of then current insurance.  No settlement on account of any loss
covered by such insurance shall be made without the consent of the Agent. In the
event of failure to provide and maintain insurance as herein provided, the Agent
may, at its option, after giving notice to the Borrower, as applicable,  provide
such  insurance  and charge the amount  thereof to the  Borrower  (including  by
making  an  Advance   therefor).   The  Borrower  shall  furnish  to  the  Agent
certificates or other evidence  satisfactory to the Agent of compliance with the
foregoing insurance provision. Without limiting the foregoing, the Borrower will
(i) keep all of its physical property insured against fire and extended coverage
risks in amounts and with deductibles and endorsements  acceptable to the Agent,
(ii)  maintain all such  workers'  compensation  or similar  insurance as may be
required by law, and (iii) maintain,  in amounts,  deductibles and  endorsements
acceptable to the Agent,  general public liability  insurance against claims for
bodily injury, death or property damage occurring on, in or about the properties
of the Borrower and business interruption  insurance,  and (iv) in the event the
Property or any portion  thereof is located in a flood hazard area 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, as amended by the Flood  Disaster Act of 1973 (and
any successor Act thereto), maintain a flood insurance policy as required by the
Flood  Disaster  Act of 1973.  The  Borrower  shall at all times comply with and
conform to all provisions of each such insurance  policy and to all requirements
of the insurers  thereunder  applicable  to Borrower the Property or to the use,
occupation,  possession,  operation, maintenance or repair of all or any portion
of the Property.

         Section 8.5 RECORDS,  ACCOUNTS AND PLACES OF BUSINESS.  Borrower  shall
maintain  comprehensive  and accurate  records and accounts in  accordance  with
generally accepted accounting principles  consistently  applied.  Borrower shall
maintain adequate and proper reserves.  Borrower shall promptly notify the Agent
of (a) any changes in the places of business of Borrower and (b) any  additional
places of business which may arise hereafter.

         Section 8.6  INSPECTION.  At any reasonable time and from time to time,
Borrower  shall  permit the Agent and the Lenders and any of the Agent's and the
Lenders' agents or  representatives  to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of,  Borrower
and to discuss the affairs,  finances and accounts of Borrower with any of their
officers or directors and with American Ski's and its Subsidiaries'  independent
accountants. In addition, the Agent shall be entitled, and Borrower shall permit
the Agent, to conduct field examinations of Borrower, at Borrower's sole expense
and at any time or times in the Agent's sole discretion.

         Section  8.7   MAINTENANCE   OF  ACCOUNTS.   Borrower  and   Borrower's
Subsidiaries  shall  maintain their  principal  concentration  and  disbursement
accounts with the Agent unless otherwise required by the Permitted  Construction
Lender.

         Section 8.8 OWNERSHIP OF SUBSIDIARIES. Borrower will maintain legal and
beneficial ownership, directly or indirectly, of 100% of the equity interests of
each of the Subsidiaries,  except for its interest in Heavenly Resort which is a
partial  percentage  interest  and such other  joint  ventures  as the Agent may
approve from time to time and sales of stock in existing  Subsidiaries  as Agent
may approve from time to time.

         Section 8.9 DUE DILIGENCE  MATTERS.  Borrower  agrees to provide to the
Agent, upon request, such surveys, evidence of zoning, title insurance policies,
appraisals, copies of permits, environmental reports, evidence of utilities, and
consents of lessors and optionors as the Agent may request, all at the sole cost
and expense of the Borrower.

         Section 8.10  REQUIRED  DUE  DILIGENCE.  The Borrower  shall submit the
Required Due  Diligence to the Agent for and obtain  approval of the Agent on or
before February 8, 1999.

         The term "Required Due Diligence" shall mean:
         1. A  mortgagee  title  insurance  policy  which  insures  the lien and
interest of the Mortgages as a perfected,  first in priority  security  interest
subject only to the Permitted  Exceptions and a survey  exception  issued by the
Title Company in the Term Loan Amount  containing such endorsements as the Agent
may reasonably request.

          2.  Updates of or new Phase 1 reports  with  respect to all  Mortgaged
Properties with reliance letters in favor of the Agent.

         3. Evidence of availability of utilities  provided by utility providers
or engineers certifying to the Agent such availability.

         4.  Evidence  of zoning  of the  Mortgaged  Property  in the form of an
opinion of a lawyer or engineer acceptable to the Agent, a zoning endorsement to
the Title Policy or letter from the  applicable  governmental  authority  having
jurisdiction over the respective portion of the Mortgaged Property.

         5.  Evidence of the  availability  of all permits and  licenses for the
Mortgaged  Property to permit the  construction  of a resort,  retail,  hotel or
condominium facility on the Mortgaged Property as contemplated to be constructed
prior to the Maturity Date as described in the Contemplated Improvements.

         6. The consents and requirements circled on the closing agenda attached
hereto as Exhibit E and made a part hereof.

         7. Such other requirements as the Agent may reasonably require.

         The  conditions  set  forth  at 3,  4,  and 5 may be  satisfied  by the
submission of an analysis by an engineer or lawyer acceptable to the Agent which
describes the time period and procedure required to attain sufficient utilities,
zoning and  permits  and  licenses to permit the  development  of the  Mortgaged
Property in the manner  described in  requirement  5. As used  herein,  the term
"Mortgaged  Property"  shall not  include the Master  Easement  or the  Purchase
Option.

         Section 8.11 PLEDGE OF  COLLATERAL.  Borrower  shall pledge a perfected
first in priority security interest in and to all assets of the Borrower and all
stock of all Borrower Subsidiaries and all assets of a Borrower subsidiary which
are not subject to the lien of a Permitted Construction Loan except for personal
property which is either de minimis or non core asset of the Borrower.
The Collateral shall include:

          1.  Any  unencumbered   real  or  personal   property  of  a  Borrower
Subsidiary;

          2. The Reserves; and

          3. Any cash or cash  equivalents  held by or on behalf  of a  Borrower
Subsidiary required by a Permitted Construction Loan.

         Section  8.12  DISTRIBUTION  OF CASH AND CASH  EQUIVALENTS  BY BORROWER
SUBSIDIARIES.  Borrower  shall  cause all  Borrower  Subsidiaries  to pay to the
Borrower all Subsidiary Available Cash on the last day of each month or upon the
request of the Agent. The term "Subsidiary  Available Cash" is hereby defined as
all cash or cash  equivalents  held by or on behalf of the  Borrower  Subsidiary
excluding  Project Equity minus: (i) an operating reserve for obligations of the
Borrower  Subsidiary  to be paid within a rolling three month period as provided
in the Budget and (ii) any mandatory cash or cash equivalent  reserves  required
under a Permitted  Construction  Loan,  which is not available for the operating
expenses of the Borrower Subsidiary.  All Borrower Available Cash including, any
Net Proceeds,  shall be immediately deposited by the Borrower with the Agent for
disposition in accordance with Section 12.3.  Borrower shall provide the reports
required under Section 6.1 (k) upon any payments made hereunder.

         Section 8.13 ADDITIONAL DOCUMENTS AND COLLATERAL. Except for collateral
or  guaranties  granted at the closing of the  Permitted  Construction  Loans or
otherwise approved by the Agent,  Borrower shall grant or execute and deliver to
the Agent such additional collateral,  guaranties,  intercreditor  agreements or
other  documents  and  instruments  that it executes or delivers in favor of any
Permitted  Construction Loan Lender, agent of the Senior Facility or the trustee
of the Senior Notes.

                                      ARTICLE 9.  NEGATIVE COVENANTS

         On and after the date hereof, until all of the Lender Obligations shall
have been paid in full and the  Lenders  shall  have no  commitment  to make any
loans or advances  hereunder,  Borrower  covenants  that  Borrower  will not and
Borrower  will  take  such  actions  as are  necessary  to  cause  the  Borrower
Subsidiaries not to do any of the following without the prior written consent of
the Agent:

         Section 9.1  RESTRICTIONS ON  INDEBTEDNESS.  Create,  incur,  suffer or
permit to exist,  or assume or  guarantee,  either  directly or  indirectly,  or
otherwise become or remain liable with respect to, any Indebtedness,  except the
following:

          (a)  Indebtedness  to the Lenders and the Agent under this  Agreement,
the Term Loan Notes, and the other Lender Agreements;

         (b) the InterCompany  Debt and such other  indebtedness by the Borrower
to  American  Ski and its  Subsidiaries  provided  that  it is  governed  by the
Subordination Agreement;

          (c) the Purchase Money Indebtedness;

         (d) as to the Borrower Subsidiaries,  Permitted Construction Loans, and
indebtedness  of a  Subsidiary  of  Borrower  associated  with the  exercise  of
Borrower's rights under the Purchase Option (collectively,  "Permitted Financial
Facilities") Indebtedness shall not constitute a Permitted Financial Facility or
a Permitted Construction Loan unless: (i) the terms and conditions and documents
evidencing  and  securing  the  Indebtedness,  and  any  proposed  modifications
thereto, have been approved in advance by the Agent and (ii) no such document or
instrument  either  prohibits  or  causes  the  acceleration  of the  respective
Indebtedness upon the pledge of the equity interests of the Borrower  Subsidiary
to the Agent or upon the  foreclosure of such pledge by the Agent.  Agent hereby
approves those documents and instruments delivered to the Agent on or before the
Closing  Date (but not  otherwise)  executed in  connection  with the  Permitted
Construction  Loans  which have been  closed as of the  Closing  Date,  and such
facilities  shall  constitute  Permitted  Financial  Facilities   regardless  of
satisfaction  of  the  conditions  of the  preceding  sentence.  Subject  to the
preceding  sentence,  any Indebtedness of the Borrower or a Borrower  Subsidiary
that initially  qualifies as a Permitted  Financial Facility shall automatically
be  disqualified  as a  Permitted  Financial  Facility  upon the  failure of the
Borrower or the Borrower Subsidiary to meet the requirements set forth above;

         (e) the existing  indebtedness set forth on Schedule 5.16, or otherwise
approved by the Agent from time to time subject to the conditions established in
subsection (d) and the guaranty of a portion of the Key Bank Facility;

         (f) guaranties by a Borrower Subsidiary for the Indebtedness  permitted
hereunder of another Borrower Subsidiary;

         (g) Indebtedness which refinances any previously permitted Indebtedness
hereunder  provided the terms and  conditions of such  Indebtedness  are no less
stringent   that  the  previous   permitted   Indebtedness   and  the  refinance
Indebtedness  otherwise  meets the  requires  established  herein for  permitted
Indebtedness;

         (h) the Senior Note Guaranty  provided that it remains  subordinate  to
the Lender Obligations;

          (i) such other subordinated  indebtedness as is approved by the Agent;
and

          (j) indebtedness under the Purchase Option.

         Section  9.2  RESTRICTION  ON  LIENS.  Create  or incur or suffer to be
created or incurred or permit to exist any encumbrance,  mortgage, pledge, lien,
charge or other security interest of any kind upon any of its property or assets
of any character,  whether now owned or hereafter  acquired,  or transfer any of
such property or assets for the purposes of  subjecting  the same to the payment
of Indebtedness or performance of any other obligation in priority to payment of
its  general  creditors,  or acquire  or agree or have an option to acquire  any
property or assets upon  conditional  sale or other title  retention  agreement,
device or arrangement  (including  Capitalized  Leases) or suffer to exist for a
period of more than thirty (30) days after the same shall have been incurred any
Indebtedness  against  it which if  unpaid  might by law or upon  bankruptcy  or
insolvency,  or otherwise,  be given any priority  whatsoever over the claims of
its  general  creditors,  or sell,  assign,  pledge or  otherwise  transfer  for
security any of its accounts,  contract rights, general intangibles,  or chattel
paper (as those terms are defined in the UCC) with or without  recourse (each of
the foregoing, a "Lien");  PROVIDED,  HOWEVER, that Borrower may create or incur
or suffer to be created or incurred or permit to exist the following ("Permitted
Liens"):

          (a) The Purchase Money Mortgages;

         (b) Deposits or pledges made in connection  with, or to secure  payment
of, workmen's compensation,  unemployment  insurance,  old age pensions or other
social  security and liens for taxes,  assessments  or  governmental  charges or
levies and liens to secure  claims for labor,  material  or  supplies  and liens
securing obligations to carriers,  warehousemen and mechanics to the extent that
payment  thereof shall not at the time be required to be made in accordance with
Section 8.2;

         (c) Encumbrances in the nature of zoning restrictions,  easements,  and
rights  or  restrictions  of  record  on the use of real  property  which do not
materially  detract  from the value of such  property  or impair  its use in the
business of the owner or lessee;

         (d) 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 Agent;

         (e) Liens arising by operation of law to secure  landlords,  lessors or
renters  under  leases  or  rental  agreements  made in the  ordinary  course of
business and confined to the premises or property rented;

          (f)  Liens  in favor  of the  Agent  for the  benefit  of the  Lenders
securing the Lender Obligations;

          (g)  the  liens  created  with  respect  to  any  Permitted  Financial
Facilities;

          (h) liens securing the Indebtedness set forth on Schedule 5.16;

         (i) liens with  respect to the  Indebtedness  permitted  under  Section
9.1(j).

Nothing  contained  in this  Section  9.2  shall  permit  Borrower  to incur any
Indebtedness  or take any other  action  or permit to exist any other  condition
which would be in contravention of any other provision of this Agreement.

         Section 9.3 INVESTMENTS. Have outstanding or hold or acquire or make or
commit  itself to  acquire  or enter into any  contract  to make any  Investment
except the following:

         (a)  Investments  having a maturity of less than one year from the date
thereof by the Borrower or any  Subsidiary  in: (i)  obligations of the Agent or
any of the  Lenders;  (ii)  obligations  of the United  States of America or any
agency  or  instrumentality   thereof;  (iii)  repurchase  agreements  involving
securities  described  in  clauses  (i) and (ii)  with  the  Agent or any of the
Lenders; and (iv) commercial paper which is rated not less than prime-one or A-1
or their  equivalents  by Moody's  Investor  Service,  Inc. or Standard & Poor's
Corporation, respectively, or their successors.

         (b)  Investments  received  as  consideration  from the sale of  assets
otherwise  permitted  hereunder,  which  Investments are pledged to the Agent on
terms and conditions acceptable to the Agent.

         (c)  Investments  consisting  of advances to  employees in the ordinary
course  of  business  up to a  maximum  at  any  one  time  of an  aggregate  of
$500,000.00.

         (d)  Investments  acquired in connection with the bankruptcy or workout
of account debtors.

         (e) The conveyance of sites for the Permitted  Construction Projects to
the  Subsidiaries  of the Borrower and the  investments  permitted under Section
9.7, subject to the release provisions of Section 10.1.

         (f) investments in Borrower Subsidiaries set forth on Schedule 9.3.

         Section 9.4 MERGERS, ACQUISITIONS, CREATION OF SUBSIDIARIES. Enter into
any merger or  consolidation  with or acquire  all or  substantially  all of the
assets of any Person, or sell, assign, lease or otherwise dispose of (whether in
one transaction or in a series of transactions)  all or substantially all of its
assets (whether now owned or hereafter  acquired) to any Person.  Borrower shall
not create a Subsidiary  without the prior consent of the Agent.  Any consent of
the Agent shall be conditioned upon the newly created  Subsidiary  entering into
such documents as the Agent may request based upon the Lender Agreements so that
the required pledge and mortgage provisions hereof are complied with.

         Section 9.5 TRANSACTIONS  WITH AFFILIATES.  Enter into any transaction,
including, without limitation, the purchase, sale or exchange of property or the
rendering  of any  service,  with any  Affiliate,  except that  Borrower and its
Subsidiaries  (a) may  pay  reasonable  salaries,  fees  and  bonuses  to  their
directors,  officers  and  employees as are usual and  customary  in  Borrower's
business, (b) may enter into transactions among each other on terms that are not
materially less favorable to Borrower or its Subsidiaries than those which could
be  obtained  at the  time  from  Persons  who  are  not  Affiliates  and  which
transactions  (to the extent in excess of  $250,000  for each  transaction  or a
series  of  related  transactions)  are  disclosed  to the  Agent in  Compliance
Certificates,  and (c)  Borrower  may enter into and perform  their  obligations
under  the  Lender  Agreements,  Master  Easement  and  the  existing  affiliate
contracts set forth on Schedule 9.5.

         Section  9.6  DISTRIBUTIONS.  Make any  Distribution  or make any other
payment on account of the purchase, acquisition, redemption, or other retirement
of any shares of stock, whether now or hereafter outstanding.  The provisions of
this Section shall not apply to any  distributions  of a Borrower  Subsidiary to
the Borrower,  but shall apply to any payment or Distribution  from the Borrower
to American Ski.

         Section 9.7 CAPITAL  EXPENDITURES.  Make any Capital Expenditure except
as limited by and provided in the Budget or Intercompany subordinated debt which
is subject to the Subordination Agreement.

         Section  9.8  DISPOSITIONS  OF ASSETS.  Subject  to the  payment of Net
Proceeds,  sell,  lease or otherwise  dispose of any assets except for the sale,
lease or other  disposition of inventory,  including  residential  real property
held for resale,  in the ordinary  course of business,  sales under the Marriott
Joint Venture, and dispositions permitted under Section 9.3(e).

         Section 9.9  ASSUMPTIONS,  GUARANTIES,  ETC. OF  INDEBTEDNESS  OF OTHER
PERSONS.  Assume,  guarantee,  endorse or  otherwise  be or become  directly  or
contingently  liable  (including,  without  limitation,  by  way  of  agreement,
contingent or otherwise, to purchase, provide funds for payment, supply funds to
or otherwise  invest in any Person or otherwise assure the creditors of any such
Person against loss) in connection  with any  Indebtedness  of any other Person.
The Permitted Financial Facilities,  the Senior Note Guaranty and the completion
guaranty to be executed by Borrower in connection  therewith  shall be permitted
hereunder.

         Section  9.10  ERISA.  At  any  time  while  Borrower  or  any  of  its
Subsidiaries has a Pension Plan,  permit any accumulated  funding  deficiency to
occur  with  respect  to any  Pension  Plan  or  other  employee  benefit  plans
established or maintained by American Ski or any of its Subsidiaries or to which
contributions  are made by Borrower or any of its  Subsidiaries  ("Plans"),  and
which are  subject to the  "Pension  Reform  Act" and the rules and  regulations
thereunder  or to Section 412 of the  Internal  Revenue  Code,  and at all times
comply in all material  respects  with the  provisions of the Act and Code which
are  applicable  to the Plans.  Borrower  will not permit  the  Pension  Benefit
Guaranty  Corporation  to  cause  the  termination  of any  Pension  Plan  under
circumstances  which would cause the lien  provided  for in Section  4068 of the
Pension  Reform  Act  to  attach  to  the  assets  of  Borrower  or  any  of its
Subsidiaries.

         Section 9.11 SALE AND LEASEBACK. Sell or transfer any of its properties
with the  intention of taking back a lease of the same property or leasing other
property  for  substantially  the  same  use  as  the  property  being  sold  or
transferred.

         Section 9.12  RESTRICTIVE OR  INCONSISTENT  AGREEMENTS.  Enter into any
agreement (a) other than the Lender  Agreements  which,  directly or indirectly,
prohibits or  restrains,  or has the effect of  prohibiting  or  restraining  or
otherwise  imposes any  materially  adverse or burdensome  condition  upon,  the
declaration  or  payment  of  dividends  or  distributions,  the  incurrence  of
Indebtedness, the granting of liens, the making of loans or advances to Borrower
or  the  amendment  or  modification  of any of  the  Lender  Agreements  or (b)
containing  any provision  that would be violated or breached by any Loan or the
performance by Borrower of its obligations  hereunder or under any of the Lender
Agreements.

         Section 9.13 NO  AMENDMENT OF MARRIOTT  JOINT  VENTURE,  INTER  COMPANY
DEBT, PURCHASE OPTION AND LEASES.  Borrower shall not modify or amend any of the
Marriott Joint Venture, InterCompany Debt, Purchase Money Option or the Leases.

         Section 9.14 LIMITATION ON ISSUANCE OF CAPITAL STOCK. Borrower will not
issue any class of preferred stock or any class of redeemable common stock which
would cause a Change of Control to occur.

         Section 9.15 PURCHASE  MONEY  MORTGAGES.  Borrower  shall not modify or
amend or permit a Default or Event of Default to exist under any of the Purchase
Money Mortgages.

         Section  9.16   PERMITTED   FINANCIAL   FACILITIES.   Borrower  or  its
Subsidiaries  shall not  modify or amend or permit a Default or Event of Default
to occur or exist under any document or instrument  given in connection with any
Permitted Financial Facility.

          Section 9.17 CHANGE OF CONTROL.  Borrower  will not permit a Change of
Control to occur.

         Section 9.18 PROPERTY ACQUISITIONS.  Borrower shall not be permitted to
make or  commit  to make  additional  property  acquisitions  without  the prior
written consent of the Agent.

          Section 9.19  COMMENCEMENT  OF PROJECTS.  Borrower  shall not commence
work on any Project prior to the  satisfaction  of the following:

          (i) the Borrower has  obtained  the required  written  approval of the
Lender or the Agent as the case may be;

          (ii) the Budget  will be in  Balance  after the  commencement  of such
Project;

          (iii)  All  necessary  federal,  state and  local  licenses,  permits,
approvals and other  entitlements  required for commencement of the Project have
been  obtained  or will be  provided  subject to release of the  property  under
Article 10;

          (iv) A guaranteed  maximum price  construction  contract providing for
the construction of the Project is in full force and effect;

          (v) Closing on the construction financing for the project in an amount
at least  sufficient  to fund all Project  costs in excess of the equity for the
project plus any amounts that the Lenders have  approved to be Advanced from the
General Cash Collateral Account, if any;

          (vi) The Presale Requirements shall be continuously satisfied;

          (vii) No Default or Event of Default  exists or would  exist after the
entry into the Proposed Project Construction Loan and corresponding release of a
portion or the Collateral; and

          (viii)  the  Master  Easement  shall be in full  force and  effect and
insured by the Title Policy as unencumbered except for the Permitted Exceptions.

         The provisions  set forth in (i) through  (viii) shall be  collectively
referred to herein as the "Commencement Release Provisions."

                ARTICLE 10. RELEASE OF COLLATERAL AND ADDITIONAL
                      CONSTRUCTION AND CAPITAL IMPROVEMENTS

          Section 10.1 RELEASE PROVISIONS.

         (a) Agent and the Lenders  acknowledge that subject to the restrictions
contained herein, the Borrower  contemplates  entering into the Proposed Project
Construction  Loans.  Agent and the  Lenders  agree to  release  their  first in
priority security  interests in the real property to be developed  provided that
Agent and the Lenders  receive a first in priority  perfected  assignment of Net
Proceeds  (after  repayment of release  prices to the  Construction  Lender) and
partnership or other entity interests of the applicable  Borrower Subsidiary all
upon such terms,  conditions and  procedures as the Agent may require.  Prior to
the  commencement of construction  and the release of the Mortgage lien in favor
of the Agent,  all Financial  Covenants are and will be in compliance  after the
release, and the Commencement Release Provisions shall be satisfied.

         (b) Agent shall release parcels  affected by the Marriott Joint Venture
provided that:  (i) Borrower  provides to Agent evidence prior to the conveyance
that the parcel to be released is affected by the Marriott Joint  Venture;  (ii)
all Net Proceeds are applied  pursuant to Section  12.3;  and (iii) the purchase
price  for the  parcel to be  released  is  calculated  in  accordance  with the
provisions of the Marriott Joint Venture  together with any  amendments  thereto
approved by the Agent.

         (c) Without the permission of Agent,  no release shall be granted while
a Default is pending or for any non-cash sale.

         (d) Agent shall have the right to release: (i) non material portions of
the Mortgaged Property for easements,  licenses and other interests required for
the development of the Permitted  Construction Projects and (ii) portions of the
Mortgaged Property sold in accordance with the provisions of Section 9.8.

         Section  10.2  PRESALE  REQUIREMENTS.  In the  event  Lenders  agree to
approve a new  Project,  in order to  request a release  of any  portion  of the
Collateral for a Proposed Project  Construction  Loan, the Borrower must satisfy
the following PreSales Requirements:

         1.       As  to  Quartershare  Facilities:   existing  contracts  which
                  produce sufficient Net Proceeds to pay 35% of the construction
                  costs of the Proposed Project; and

         2.       As to Condominiums  (single owner):  existing  contracts which
                  produce   sufficient   Net   Proceeds   to  pay  100%  of  the
                  construction costs of the Proposed Project.

         All of the contracts to satisfy the PreSales  Requirement  must be bona
fide third party contracts,  containing a non-refundable  deposit of at least 5%
of the purchase price and for which there is any financing contingency.

            ARTICLE 11. DESIGNATED PROPERTIES AND FURTHER ASSURANCES

         Section 11.1  SELECTION OF MORTGAGED  PROPERTIES.  Borrower and Lenders
acknowledge and recognize that the Agent has relied upon certain representations
and  warranties  summarized  in the  memorandum  attached as Exhibit D as to the
Mortgaged  Properties  in order for the Agent to  designate  them as  Designated
Properties.  In the event any  representations  or warranties  are inaccurate or
events  contemplated  therein as material to such property's value as collateral
do not  materialize,  Borrower  and  Agent  shall  exercise  good  faith and due
diligence to identify  substitute  properties owned by American Ski and exchange
the impaired parcel(s) for the identified parcels as newly Designated  Property,
which shall become  Mortgaged  Property  hereunder.  Borrower and Agent agree to
undertake  all  such  action  as may be  reasonably  necessary  to  effect  such
exchange.

         Section 11.2 FURTHER  ASSURANCES.  Borrower  agrees that the  Mortgaged
Properties are subject to a first in priority  security interest in favor of the
Agent for the  benefit  of the  Lenders  subject  to the  Permitted  Exceptions.
Borrower shall take such actions as are necessary in order to cause the Security
Agreements to constitute a first in priority  security interest on the Mortgaged
Property subject to the Permitted  Exceptions and related development rights and
further to deliver to the Agent such  additional due diligence  materials as the
Lenders may request from time to time with respect thereto.  Without  limitation
to  the  foregoing,   Borrower  shall  provide  such  additional  documents  and
instruments  as the Agent may  request  in order to  assure  the Agent  that the
Mortgaged  Property  may be fully  developed in the manner  contemplated  by the
Appraisals and the Contemplated Improvements.

                   ARTICLE 12. EVENTS OF DEFAULT AND REMEDIES

          Section 12.1 EVENTS OF DEFAULT.  Each of the following events shall be
deemed to be Events of Default hereunder: 

         (a)  Borrower  shall  fail to make any  payment  in  respect of (i) the
principal of any of the Lender Obligations as the same shall become due, whether
at the stated payment date,  required  prepayment or by acceleration,  demand or
otherwise  or (ii)  interest or  commitment  fees on or in respect of any of the
Lender Obligations as the same shall become due.

         (b) Borrower  shall fail to perform or observe any other material term,
covenant,  condition or provision to be performed or observed by Borrower  under
this Agreement or any other Lender  Agreement,  including the maintenance of the
Interest  Reserve in the amount  required  under  Section  2.3, and such failure
shall not be rectified or cured to the Agent's  satisfaction  within thirty (30)
days after written notice thereof to Borrower.

         (c) Any representation or warranty of Borrower or any Subsidiary herein
or in any other Lender Agreement or any amendment to any thereof shall have been
materially false or misleading at the time made or intended to be effective.

         (d) An event of default or  termination  shall occur under the Purchase
Money Mortgage,  the Marriott Joint Venture, the Leases, or the Purchase Option,
a default  under any of the Permitted  Financial  Facilities or should a default
occur under the Senior Facility.

         (e) Borrower shall be involved in financial difficulties as evidenced:

                  (i) by its  commencement of a voluntary case under Title 11 of
         the  United  States  Code as from  time  to time in  effect,  or by its
         authorizing,  by  appropriate  proceedings of its board of directors or
         other governing body, the commencement of such a voluntary case;

                  (ii) by its filing an answer or other  pleading  admitting  or
         failing to deny the material allegations of a petition filed against it
         commencing  an  involuntary  case  under  said  Title 11,  or  seeking,
         consenting to or acquiescing in the relief therein provided,  or by its
         failing to  controvert  timely  the  material  allegations  of any such
         petition;

                  (iii) by the entry of an order for  relief in any  involuntary
case commenced under said Title 11;

                  (iv) by its seeking  relief as a debtor  under any  applicable
         law,  other than said  Title 11, of any  jurisdiction  relating  to the
         liquidation  or  reorganization  of debtors or to the  modification  or
         alteration  of the  rights of  creditors,  or by its  consenting  to or
         acquiescing in such relief;

                  (v)  by  the  entry  of  an  order  by a  court  of  competent
         jurisdiction  (l) finding it to be bankrupt or insolvent,  (2) ordering
         or approving its  liquidation,  reorganization  or any  modification or
         alteration of the rights of its  creditors or (3) assuming  custody of,
         or  appointing a receiver or other  custodian  for all or a substantial
         part of its  property  and such order shall not be vacated or stayed on
         appeal or otherwise stayed within thirty (30) days;

                  (vi) by the filing of a petition  against  American Ski or any
         Subsidiary under said Title ll which shall not be vacated within thirty
         (30) days; or

                  (vii) by its  making  an  assignment  for the  benefit  of, or
         entering  into a  composition  with,  its  creditors,  or appointing or
         consenting to the  appointment of a receiver or other custodian for all
         or a substantial part of its property.

         (f) There  shall  have  occurred  a judgment  against  Borrower  or any
Subsidiary in any court which constitutes a Material Adverse Effect.

         (g) A Change of Control shall occur.

         (h) Any "Event of Default" under any other Lender Agreement.

         (i) Any of the Lender Agreements shall be canceled, terminated, revoked
or rescinded  otherwise  than in  accordance  with the terms thereof or with the
express prior written agreement, consent or approval of the Agent; or any Lender
Agreement, or any Lien granted thereunder,  shall (except in accordance with its
terms or the terms of this Agreement), in whole or in part, terminate,  cease to
be  effective  or  cease  to be  the  legally  valid,  binding  and  enforceable
obligation of any Borrower; or any Lien securing any Lender Obligation shall, in
whole or in part,  cease to be a perfected first priority Lien,  subject only to
those exceptions  expressly permitted by a Lender Agreement or the terms of this
Agreement  and  except  to the  extent  that any such  Lien has  ceased  to be a
perfected first priority Lien solely due to an act or omission by the Agent or a
Lender;  or any  action at law suit or in equity or other  legal  proceeding  to
cancel, revoke or rescind any of the Lender Agreements or the acquisition of all
or portions of the property affected by the Purchase Option.

         (j) Borrower or any Subsidiary shall be indicted for a federal crime, a
punishment  for which could include the  forfeiture of any assets of Borrower or
such Subsidiary.

         An Event of Default  shall  occur upon the  occurrence  set forth above
except for the  following  Defaults  which  shall ripen into an Event of Default
after the  giving of notice by the  Agent to the  Borrower  and  failure  of the
Borrower to completely  cure the Default within the time period set forth below.
The cure periods applicable to certain Defaults are as set forth below:
         NO CURE PERIOD:  Monetary  events of default,  Defaults  under sections
8.4,  8.6,  8.8,  8.12,  9.1,  9.2 (except for the right of Borrower to bond off
materialmen  liens  within  thirty (30) days of  discovery of the filing of such
lien),  9.3, 9.4, 9.6, 9.7, 9.8, 9.9, 9.11,  9.13, 9.14, 9.15, 9.16, 9.17, 9.18,
9.19.

         TEN DAY CURE PERIOD: 6.1, 6.8, 8.2, 8.10, 8.11.

All other cure periods shall be governed by the provisions of Section 12.1(b).

         Section 12.2 REMEDIES.  Upon the occurrence of an Event of Default,  in
each and every case, the Agent may, and upon the request of the Majority Lenders
shall,  exercise  any right or remedy  under the  Security  Agreements  or other
Lender Agreement, proceed to protect and enforce the rights of the Agent and the
Lenders by suit in equity,  action at law and/or  other  appropriate  proceeding
either for specific  performance of any covenant or condition  contained in this
Agreement or any other Lender  Agreement or in any  instrument  delivered to the
Agent or the Lenders  pursuant  hereto or thereto,  or in aid of the exercise of
any  power  granted  in  this  Agreement,  any  Lender  Agreement  or  any  such
instrument,  and  (unless  there shall have  occurred an Event of Default  under
Section  12.1(e),  in which  case the unpaid  balance of the Lender  Obligations
shall  automatically  become due and payable without notice or demand) by notice
in writing to the Borrower  declare all or any part of the unpaid balance of the
Lender  Obligations then outstanding to be forthwith due and payable,  whereupon
such unpaid  balance or part  thereof  shall  become so due and payable  without
presentation,  protest or further demand or notice of any kind, all of which are
hereby  expressly  waived,  and the Agent may proceed to enforce payment of such
balance or part thereof in such manner as the Agent may elect, and the Agent and
each  Lender  may offset and apply  toward the  payment of such  balance or part
thereof any  Indebtedness  of the Agent or any Lender to any  Borrower or to any
Subsidiary,  or  to  any  obligor  of  the  Lender  Obligations,  including  any
Indebtedness   represented  by  deposits  in  any  general  or  special  account
maintained  with the Agent or any Lender or with any other  Person  controlling,
controlled by or under common control with the Agent or any Lender.

         Upon the occurrence of a default under Section  12.1(d) the Agent shall
have the right to advance such sums and to take such actions as it determines to
be necessary  in order to protect its  security  interest in the portions of the
Collateral  affected by such default.  The amounts so advanced shall  constitute
Advances  and shall be subject to the  Advance  provisions  as to the payment by
Lenders of such amounts as set forth herein.  All such curative  amounts  shall:
(i) be secured by the Lender  Agreements;  (ii) be immediately  due and payable;
and (iii) bear interest at the Default Rate.

         Section 12.3      APPLICATION OF CASH INCLUDING NET PROCEEDS.

         1. In the event that a Default has not occurred and is not  continuing,
the Borrower  Available  Cash shall be paid to the Agent on the last day of each
month and shall be applied as follows:

         First, (a) in the manner set forth in Section 12.3, 2, (a);

         Second, (b) in the manner set forth in Section 12.3, 2 (b)

         Third, (c) to fund the Interest Reserve to the required amount;

         Fourth, (d) to fund overhead  requirements of the Borrower for the next
month as set forth in the Budget which are not otherwise  reserved for either by
a Borrower Subsidiary or in the calculation of the Borrower Available Cash,

          Fifth,  (e) at the  election  of the  Borrower,  to the  General  Cash
Collateral Account; and

         Sixth,  (f) the remainder shall be applied against the principal amount
of the Term Loan.

         The  payments  set  forth  at  2(d)  shall  be  conditioned   upon  the
satisfaction  of the Financial  Covenants both prior to and after the payment is
made.

         2. Upon the occurrence or during the  continuance  of any Default,  the
Borrower  shall  pay all of its cash and cash  equivalents  to the Agent and the
Agent or any Lender  receives  any  monies on account of the Lender  Obligations
from the  Borrower  or  otherwise,  including  distributions  from the  Borrower
Subsidiaries  or the proceeds of the Reserves;  such monies shall be distributed
for application as follows:

                  (a)  First,  to the  payment of or the  reimbursement  of, the
Agent for or in respect of all costs,  expenses,  disbursements and losses which
shall  have been  incurred  or  sustained  by the Agent in  connection  with the
collection  of such monies by the Agent,  or in  connection  with the  exercise,
protection or  enforcement  by the Agent of all or any of the rights,  remedies,
powers and  privileges of the Agent or the Lenders  under this  Agreement or any
other Lender Agreement;

                  (b) Second, to the payment of all interest, including interest
on overdue  amounts,  interest  calculated at the Default Rate and late charges,
then due and payable with respect to the Loans,  allocated  among the Lenders in
proportion to their respective Commitment Percentages;

                  (c) Third, to the payment of the outstanding principal balance
of the Loans,  allocated  among the Lenders in  proportion  to their  respective
Commitment Percentages;

                  (d)  Fourth,  to any  other  outstanding  Lender  Obligations,
allocated  among  the  Lenders  in  proportion  to their  respective  Commitment
Percentages.

               ARTICLE 13. CONSENTS; AMENDMENTS; WAIVERS; REMEDIES

         Section 13.1  ACTIONS BY LENDERS.  Except as  otherwise  expressly  set
forth in any  particular  provision of this  Agreement,  any consent or approval
required or permitted  by this  Agreement to be given by the Agent may be given,
and any term of this  Agreement  or of any other  instrument  related  hereto or
mentioned  herein may be amended,  and the performance or observance by Borrower
or any Subsidiary of any term of this Agreement may be waived (either  generally
or in a particular instance and either retroactively or prospectively) with, but
only  with,  the  written  consent of the  Borrower  and the  Majority  Lenders;
PROVIDED,  HOWEVER,  that no  amendment  of Article 15 may be made  without  the
consent of the Agent without the written consent of all Lenders:

                  i) no reduction in the interest  rates on or any fees relating
         to the Loans shall be made;

                  ii) no extension or  postponement  shall be made of the stated
         time of  payment  of the  principal  amount  of,  interest  on, or fees
         payable to the Lenders relating to the Term Loans;

                  iii) no change in the  principal  amount of the Term Loans and
         extension of the Term Loan Maturity Date shall be made;

                  iv) no release of all or  substantially  all of the collateral
         security  for, or any  guarantor  of, the Lender  Obligations  shall be
         made;

                  v) no change in the definition of the term "Majority  Lenders"
         shall be made;

                  vi) approval of new Projects other than Fully Funded Projects;
         and

                  vii) disbursements from the General Cash Collateral Account.

         Section 13.2  ACTIONS BY BORROWER.  No delay or omission on the Agent's
or the Lenders' part in exercising their rights and remedies against Borrower or
any other  interested  party shall  constitute a waiver. A breach by Borrower of
its  obligations  under this  Agreement  may be waived only by a written  waiver
executed by the Agent and the  Lenders in  accordance  with  Section  13.1.  The
Agent's and the Lenders'  waiver of Borrower's  breach in one or more  instances
shall not constitute or otherwise be an implicit waiver of subsequent  breaches.
To the extent permitted by applicable law,  Borrower hereby agrees to waive, and
does hereby absolutely and irrevocably waive, (a) all presentments,  demands for
performance,  notices of protest and notices of dishonor in connection  with any
of the  Indebtedness  evidenced by the Term Loan Notes;  (b) any  requirement of
diligence or promptness  on the Agent's or the Lenders' part in the  enforcement
of their rights under the provisions of this Agreement or any Lender  Agreement;
and (c) any and all notices of every kind and description  which may be required
to be given by any  statute  or rule of law with  respect to its  liability  (i)
under this Agreement or with respect to the  Indebtedness  evidenced by the Term
Loan  Notes or (ii)  under  any other  Lender  Agreement.  No course of  dealing
between  the  Borrower  and the  Lenders  shall  waive or  modify  the terms and
conditions hereof.  This Agreement shall be amended only by a written instrument
executed by the Agent and the Lenders.  The Agent's and the Lenders'  rights and
remedies under this Agreement and under all  subsequent  agreements  between the
Agent,  the Lenders and Borrower shall be cumulative and any rights and remedies
expressly  set forth herein shall be in addition to, and not in  limitation  of,
any other  rights  and  remedies  which may be  applicable  to the Agent and the
Lenders in law or at equity.

                       ARTICLE 14. SUCCESSORS AND ASSIGNS

         Section 14.1 GENERAL.  This  Agreement  shall be binding upon and shall
inure to the  benefit  of the  parties  hereto and their  respective  successors
(which shall include in the case of the Agent or any Lender any entity resulting
from a merger or  consolidation)  and assigns,  except that (a) Borrower may not
assign its rights or  obligations  under this  Agreement and (b) each Lender may
assign its rights in this Agreement only as set forth below in this Article 14.

                            Section 14.2 ASSIGNMENTS.

                  (a)  CONDITIONS TO  ASSIGNMENT BY LENDERS.  Except as provided
herein,  each  Lender may assign to one or more  Eligible  Assignees  all of its
interests,  rights and  obligations  under this  Agreement  (including  all or a
portion of its Commitment  Percentage and Commitment and the same portion of the
Loan at the time owing to it, and the Notes  held by it;  provided  that (a) the
Agent shall have given its prior written  consent to such  assignment,  (b) each
such assignment shall be of a constant, and not a varying, percentage of all the
assigning  Lender's rights and obligations  under this Agreement;  (c) Agent may
make partial or non-voting assignments in amounts it deems appropriate; (d) each
Lender  which is a Lender  on the date  hereof  shall  retain,  free of any such
assignment, an amount of its Commitment of not less than $5,000,000.00,  and, as
long as no Default exists,  Agent shall retain, free of any such assignment,  of
not less than $10,000,000  provided that the Agent assign greater amounts of its
Commitment  with the  approval of the Borrower  which shall not be  unreasonably
withheld;  and (e) the parties to such  assignment  shall execute and deliver to
the Agent, for recording in the Register (as hereinafter defined), an Assignment
and Acceptance,  substantially in the form established by  Administrative  Agent
("Assignment  and  Acceptance"),   together  with  any  Notes  subject  to  such
assignment.  Upon such execution,  delivery,  acceptance and recording, from and
after the effective date  specified in each  Assignment  and  Acceptance,  which
effective  date shall be at least  five (5)  Business  Days after the  execution
thereof, but in no event prior to recording (i) the assignee thereunder shall be
a party hereto and, to the extent  provided in such  Assignment and  Acceptance,
have the rights and  obligations  of a Lender  hereunder  and (ii) the assigning
Lender shall,  to the extent provided in such assignment and upon payment to the
Agent of the registration fee referred to in Section 14.2.(c),  be released from
its  further  obligations  under this  Agreement  with  respect to the  interest
assigned.

         Subject to the  provisions  of this  Article 14, each Lender may at any
time assign or pledge its Loan or Note to a Federal  Reserve Bank,  and a Lender
which is a "fund"  may at any time  assign or pledge  all or any  portion of its
rights under this Agreement to secure such Lender's  indebtedness,  in each case
without  the prior  written  consent of the  Borrower,  provided  that each such
assignment  shall be made in accordance  with applicable law and shall be either
to a Federal Reserve Bank or Eligible  Assignee,  and no such  assignment  shall
release a Lender from any of its obligations  hereunder.  In order to facilitate
any such assignment, the Borrower shall, at the request of the assigning Lender,
duly  execute  a  registered  promissory  note or notes  evidencing  the  Lender
Obligations made or extended to the Borrower by the assigning Lender  hereunder,
provided that the  assignment is otherwise in compliance  with the terms hereof.
For  avoidance  of doubt,  the parties to this  Agreement  acknowledge  that the
provisions of this subsection concerning assignments do not prohibit assignments
creating  security  interests,  including,  without  limitation,  any  pledge or
assignment  by a  Lender  of any  Loan or Note to any  Federal  Reserve  Bank in
accordance with applicable law and the terms hereof.

         (b) CERTAIN REPRESENTATIONS AND WARRANTIES;  LIMITATIONS; COVENANTS. By
executing  and  delivering  an  Assignment  and  Acceptance,  the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows: (a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Lender makes no  representation  or warranty
and assumes no  responsibility  with respect to any  statements,  warranties  or
representations  made in or in connection  with this Agreement or the execution,
legality, validity,  enforceability,  genuineness,  sufficiency or value of this
Agreement,  the other  Lender  Agreements  or any other  instrument  or document
furnished  pursuant hereto;  (b) the assigning Lender makes no representation or
warranty and assumes no responsibility  with respect to the financial  condition
of the Borrower or any other Person  primarily or secondarily  liable in respect
of any of the  Lender  Obligations,  or the  performance  or  observance  by the
Borrower or any other Person  primarily or secondarily  liable in respect of any
of the Lender  Obligations or any of their  obligations  under this Agreement or
any of the other Lender Agreements or any other instrument or document furnished
pursuant  hereto or thereto;  (c) such assignee  confirms that it has received a
copy of this  Agreement,  together  with  copies  of the most  recent  financial
statements  referred to in ss.5.9 and such other documents and information as it
has deemed  appropriate  to make its own credit  analysis  and decision to enter
into such Assignment and Acceptance;  (d) such assignee will,  independently and
without reliance upon the assigning Lender, the Agent or any Lender and based on
such  documents  and  information  as it shall  deem  appropriate  at the  time,
continue to make its own credit  decisions in taking or not taking  action under
this Agreement; (e) such assignee represents and warrants that it is an Eligible
Assignee;  (f) such  assignee  appoints  and  authorizes  the Agent to take such
action as agent on its behalf and to exercise  such powers under this  Agreement
and the  other  Lender  Agreements  as are  delegated  to the Agent by the terms
hereof or  thereof,  together  with such  powers  as are  reasonably  incidental
thereto;  (g) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Agreement are required to
be performed by it as a Lender;  (h) such assignee  represents and warrants that
it is legally  authorized to enter into such Assignment and Acceptance;  and (i)
such assignee  represents that it is acquiring the portion of the Loans assigned
to it pursuant to the Assignment and Acceptance for investment only and not with
a  view  to  or  with  any  intention  to  resell,   distribute,   subdivide  or
fractionalize  such  portion  in whole or in part,  or grant  any  participation
therein.

         (c) REGISTER.  The Agent shall  maintain a copy of each  Assignment and
Acceptance  delivered to it and a register or similar list  ("Register") for the
recordation  of the  names  and  addresses  of the  Lenders  and the  Commitment
Percentages and  Commitments of, and principal  amount of the Loans owing to the
Lenders  from time to time as a  condition  to the  effectiveness  thereof.  All
assignments  of Loans or  Commitment  must be  reported  to the  Agent to permit
registration  in the Register.  The entries in the Register shall be conclusive,
in the absence of manifest  error,  and the Borrower,  the Agent and the Lenders
may treat  each  Person  whose  name is  recorded  in the  Register  as a Lender
hereunder for all purposes of this  Agreement.  The Register  shall be available
for inspection by the Borrower and the Lenders at any  reasonable  time and from
time to time upon reasonable prior notice.  Upon each such recordation,  (i) the
assigning  Lender  agrees to pay to the Agent a  registration  fee in the sum of
$2,500.00 and (ii) the Agent will deliver a copy of the Register to the Arranger
and the Borrower.

         (d) NEW  NOTES.  Upon  its  receipt  of an  Assignment  and  Acceptance
executed by the parties to such  assignment,  together with each Note subject to
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrower and the Lenders
(other than the assigning  Lender).  Within five (5) Business Days after receipt
of such notice, the Borrower,  at its own expense,  shall execute and deliver to
the Agent,  in exchange  for each  surrendered  Note, a new Note to the order of
such Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Lender
has  maintained  some portion of its  obligations  hereunder,  a new Note to the
order of the  assigning  Lender in an amount equal to the amount  retained by it
hereunder.  Such new Notes  shall  provide  that they are  replacements  for the
surrendered  Notes,  shall  be in an  aggregate  principal  amount  equal to the
aggregate  principal  amount  of the  surrendered  Notes,  shall  be  dated  the
effective  date of such  Assignment  and  Acceptance  and shall  otherwise be in
substantially  the form of the Notes  delivered at the time of execution of this
Agreement.  Within five (5) Business Days of issuance of any new Notes  pursuant
to this Article 14, the Borrower shall deliver an opinion of counsel,  addressed
to the Lenders and the Agent,  relating to the due authorization,  execution and
delivery  of such new  Notes  and the  legality,  validity,  enforceability  and
binding effect thereof.  The surrendered Notes shall be canceled and returned to
the Borrower.

         (e) NO  ASSIGNMENT  BY  BORROWER.  The  Borrower  shall  not  assign or
transfer  any of its rights or  obligations  under any of the Lender  Agreements
without the prior written consent of each of the Lenders.

         (f)  DISCLOSURE.  Each  Lender  agrees to take  normal  and  reasonable
precautions  and  exercise  due  care to  maintain  the  confidentiality  of all
information  identified  as  "confidential"  or  "secret"  by the  Borrower  and
provided to it by the Borrower, or by the Agent on Borrower's behalf, under this
Agreement or any other Loan  Document,  and neither it nor any of its affiliates
shall use any such  information  other than in connection with or in enforcement
of this  Agreement  and the other Lender  Agreements;  except to the extent such
information (i) was or becomes generally available to the public other than as a
result  of  disclosure  by the  Lender  or (ii) was or  becomes  available  on a
non-confidential basis from a source other than the Borrower, provided that such
source is not bound by a  confidentiality  agreement  with the Borrower known to
the Lender; provided, however, that any Lender may disclose such information (A)
at the request or pursuant to any requirement of any  Governmental  Authority to
which the Lender is subject or in connection  with an examination of such Lender
by any such authority; (B) pursuant to subpoena or other court process; (C) when
required  to  do  so  in  accordance  with  the  provisions  of  any  applicable
requirement of law; (D) to the extent reasonably required in connection with any
litigation  or  proceeding  to which the Agent,  any Lender or their  respective
affiliates  may be party;  (E) to the extent  reasonably  required in connection
with the exercise of any remedy hereunder or under any other Loan Document;  (F)
to such Lender's  independent auditors and other professional  advisors;  (G) to
any  participant  or assignee,  actual or  potential,  provided that such Person
agrees in  writing  to keep such  information  confidential  to the same  extent
required  of the  Lenders  hereunder,  and (H) as to any  Lender,  as  expressly
permitted  under  the  terms  of  any  other  document  or  agreement  regarding
confidentiality  to which the  Borrower  is party or is deemed  party  with such
Lender.

         (g)      WITHHOLDING TAX.

                  i)       If any Lender is a "foreign corporation,  partnership
                           or trust"  within  the  meaning  of the Code and such
                           Lender claims exemption from, or a reduction of, U.S.
                           withholding  tax under  Sections  1441 or 1442 of the
                           Code,  such  Lender  agrees  with and in favor of the
                           Agent, to deliver to the Agent:

                           (1)      if such Lender claims an exemption  from, or
                                    a  reduction  of,  withholding  tax  under a
                                    United States tax treaty, properly completed
                                    IRS Forms 1001 and W-8 before the payment of
                                    any interest in the first  calendar year and
                                    before the  payment of any  interest in each
                                    third succeeding  calendar year during which
                                    interest may be paid under this Agreement;

                           (2)      if such  Lender  claims that  interest  paid
                                    under this  Agreement  is exempt from United
                                    States   withholding   tax   because  it  is
                                    effectively  connected  with a United States
                                    trade  or  business  of  such  Lender,   two
                                    properly  completed  and executed  copies of
                                    IRS Form  4224  before  the  payment  of any
                                    interest is due in the first taxable year of
                                    such Lender and in each  succeeding  taxable
                                    year of such Lender  during  which  interest
                                    may be paid  under this  Agreement,  and IRS
                                    Form W-9;

                           (3)      such other form or forms as may be  required
                                    under the Code or other  laws of the  United
                                    States as a condition to exemption  from, or
                                    reduction of, United States withholding tax;
                                    and

                           (4)      in the case of any Lender claiming exemption
                                    from  U.S.  Withholding  Tax  under  Section
                                    871(b) or 881(c) of the Code,  with  respect
                                    to payments of  "Portfolio  Interest" a Form
                                    W-8, or any subsequent  versions  thereof or
                                    successors   thereto   and  if  the   Lender
                                    delivers   a   Form   W-8,   a   certificate
                                    representing  that such Lender is not a bank
                                    for purposes of Section  881(c) of the Code,
                                    is  not  a  ten  percent  (10%)  shareholder
                                    (within the meaning of Section  871(h)(3)(b)
                                    of the Code) of the Borrower thereof, and is
                                    not a controlled foreign corporation related
                                    to  the  Borrower  (within  the  meaning  of
                                    Section  864(d)(4)  of the Code).  Each such
                                    certificate   and  form  shall  be  properly
                                    completed  and duly  executed by such Lender
                                    claiming  complete  exemption from a reduced
                                    rate of U.S.  Withholding Tax on payments by
                                    the Borrower  under this Agreement and other
                                    Lender Agreements.

         Such  Lender  agrees to  promptly  notify  the  Agent of any  change in
circumstances  which would  modify or render  invalid any claimed  exemption  or
reduction.

                  (ii)     If any Lender claims exemption from, or reduction of,
                           withholding  tax under a United  States tax treaty by
                           providing  IRS  Form  1001  and  such  Lender  sells,
                           assigns,  grants a  participation  in,  or  otherwise
                           transfers  all or part of the Lender  Obligations  of
                           the  Borrower to such Lender,  such Lender  agrees to
                           notify the Agent of the percentage amount in which it
                           is  no  longer   the   beneficial   owner  of  Lender
                           Obligations  of the Borrower to such  Lender.  To the
                           extent of such  percentage  amount,  the  Agent  will
                           treat such Lender's IRS Form 1001 as no longer valid.

                  (iii)    If any Lender  claiming  exemption from United States
                           withholding  tax by  filing  IRS Form  4224  with the
                           Agent, sells, assigns,  grants a participation in, or
                           otherwise   transfers  all  or  part  of  the  Lender
                           Obligations  of the  Borrower  to such  Lender,  such
                           Lender agrees to undertake  sole  responsibility  for
                           complying  with  the  withholding  tax   requirements
                           imposed by Sections 1441 and 1442 of the Code.

                  (iv)     If any  Lender  is  entitled  to a  reduction  in the
                           applicable  withholding  tax,  the Agent may withhold
                           from any  interest  payment to such  Lender an amount
                           equivalent to the  applicable  withholding  tax after
                           taking into account such  reduction.  If the forms or
                           other  documentation  required by  subsection  (a) of
                           this ss.19.7 are not delivered to the Agent, then the
                           Agent may withhold from any interest  payment to such
                           Lender   not   providing    such   forms   or   other
                           documentation an amount  equivalent to the applicable
                           withholding tax.

                  (v)      If the IRS or any other Governmental Authority of the
                           United States or other  jurisdiction  asserts a claim
                           that the Agent  did not  properly  withhold  tax from
                           amounts  paid to or for  the  account  of any  Lender
                           (because the appropriate form was not delivered,  was
                           not properly executed,  or because such Lender failed
                           to  notify  the  Agent of a change  in  circumstances
                           which  rendered the exemption  from, or reduction of,
                           withholding tax ineffective, or for any other reason)
                           such Lender shall  indemnify  the Agent fully for all
                           amounts paid, directly or indirectly, by the Agent as
                           tax or otherwise,  including  penalties and interest,
                           and including  any taxes imposed by any  jurisdiction
                           on the  amounts  payable  to  the  Agent  under  this
                           Article  14  together  with all  costs  and  expenses
                           (including   reasonable  attorney's  fees  and  legal
                           expenses).  The  obligation of the Lenders under this
                           subsection  (e)  shall  survive  the  payment  of all
                           Lender Obligations and the resignation or replacement
                           of the Agent.

         Section 14.3 BANKBOSTON AS AGENT UNDER SENIOR FACILITY AND ROLE OF BRS.
Borrower and the Lenders acknowledge and recognize that BankBoston,  N.A. is the
agent under the Senior  Facility and, in such  capacity,  may take actions which
may be in conflict with or detrimental  to this  facility,  the Borrower and the
Lenders.  Furthermore,  Borrower and Lenders  acknowledge and recognize that BRS
has advised the  Borrower in  connection  with the  structure,  syndication  and
funding of the Term Loan.  Borrower  and Lenders  agree that such BKB,  N.A. may
serve in both  capacities  and take such  actions as it deems  necessary  as the
agent of both this facility and under the Senior Facility. Furthermore, Borrower
and  Lenders  agree  that the  actions  of BRS or BKB as agent  under the Senior
Facility  shall not  constitute  a conflict of interest of the  obligations  and
duties and rights of the Agent hereunder or create any liability of Agent or BKB
with respect  thereto and shall not  constitute a defense by Borrower or Lenders
to the  performance  of any  obligation of any of them  hereunder  including the
Lender  Obligations  or any obligation of a Lender to timely fund its Commitment
Percentage of the Term Loan.

                              ARTICLE 15. THE AGENT

         Section 15.1 AUTHORIZATION AND ACTION.  Each Lender hereby appoints and
authorizes  the Agent to take such  action on its  behalf and to  exercise  such
powers under this Agreement and the other Lender  Agreements as are delegated to
the Agent by the terms  hereof and  thereof,  together  with such  powers as are
reasonably  incidental  thereto. As to any matters not expressly provided for by
this Agreement and the other Lender Agreements  (including,  without limitation,
enforcement  or  collection  of the Term Loan  Notes),  the  Agent  shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain  from  acting  (and shall be fully  protected  in so acting or
refraining from acting) upon the instructions of the Majority Lenders,  and such
instructions  shall be binding upon all  Lenders;  PROVIDED,  HOWEVER,  that the
Agent  shall not be  required  to take any  action  which  exposes  the Agent to
liability or which is contrary to this Agreement or the other Lender  Agreements
or  applicable  law.  Subject  to the  foregoing  provisions  and  to the  other
provisions  of this Article 13, the Agent shall,  on behalf of the Lenders:  (a)
execute any  documents  on behalf of the  Lenders  providing  collateral  for or
guarantees of the Lender Obligations;  (b) hold and apply any collateral for the
Lender  Obligations,  and the proceeds  thereof,  at any time received by it, in
accordance   with  the  provisions  of  this  Agreement  and  the  other  Lender
Agreements;  (c) exercise any and all rights, powers and remedies of the Lenders
under this Agreement or any of the other Lender Agreements, including the giving
of any consent or waiver or the entering into of any  amendment,  subject to the
provisions  of Section  13.1;  (d) at the  direction  of the  Lenders,  execute,
deliver and file UCC  financing  statements,  mortgages,  deeds of trust,  lease
assignments  and such other  agreements  in respect  of any  collateral  for the
Lender Obligations, and possess instruments included in the collateral on behalf
of the Lenders; and (e) in the event of acceleration of Borrower's  Indebtedness
hereunder,  act at the  direction  of the Lenders to exercise  the rights of the
Lenders hereunder and under the other Lender Agreements.

         Section 15.2 AGENT'S  RELIANCE,  ETC.  Neither the Agent nor any of its
directors,  officers, agents or employees shall be liable to the Lenders for any
action  taken or omitted to be taken by it or them under or in  connection  with
this Agreement or the other Lender Agreements, except for its or their own gross
negligence or willful  misconduct.  Without  limitation of the generality of the
foregoing,  the  Agent:  (a) may  treat  the  payee of any Term Loan Note as the
holder  thereof until the Agent  receives  written  notice of the  assignment or
transfer  thereof  signed by such payee and in form  required  under  Article 14
hereof;  (b) may consult with legal counsel,  independent public accountants and
other  experts  selected  by it and shall not be liable for any action  taken or
omitted  to be taken in good faith by it in  accordance  with the advice of such
counsel, accountants or experts; (c) makes no warranty or representations to any
Lender and shall not be responsible to any Lender for any statements, warranties
or  representations  made in or in connection  with this  Agreement or the other
Lender Agreements;  (d) shall not have any duty to ascertain or to inquire as to
the  performance  or observance of any of the terms,  covenants or conditions of
this  Agreement  or the other Lender  Agreements  on the part of Borrower or any
other  Person or to inspect the  property  (including  the books and records) of
Borrower or any other Person; (e) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability,  genuineness,  sufficiency or
value of this Agreement or the other Lender  Agreements or any other  instrument
or  document  furnished  pursuant  hereto or  thereto;  and (f)  shall  incur no
liability  under or in respect of this Agreement or the other Lender  Agreements
by acting upon any notice,  consent,  certificate or other instrument or writing
(which may be by telecopy or  telegram)  believed by the Agent to be genuine and
signed or sent by the proper party or parties.

         Section  15.3 AGENT AS A LENDER AND AGENT UNDER SENIOR  FACILITY.  With
respect to its interest in its  Commitment  Percentage  of the Loans  hereunder,
BankBoston,  N.A. shall have the same rights and powers under this Agreement and
the other  Lender  Agreements  as any other  Lender and may exercise the same as
though it were not the Agent; and the term "Lender" or "Lender(s)" shall, unless
otherwise  expressly  indicated,  include  BankBoston,  N.A.  in its  individual
capacity.  BankBoston,  N.A. and its affiliates may lend money to, and generally
engage in any kind of business  with,  Borrower,  American Ski, any Affiliate of
American  Ski and any  Person  who may do  business  with or own  securities  of
American Ski or any such Affiliate of American Ski, all as if  BankBoston,  N.A.
were not the Agent and  without  any duty to account  therefor  to the  Lenders.
Borrower and Lenders hereby acknowledge that BankBoston, N.A. is the agent under
this facility and under the Senior Facility. Borrower and the Lenders agree that
BankBoston, N.A. as the agent under the Senior Facility may take actions adverse
to the Lenders and the Borrower under this facility.  Borrower and Lenders agree
that this  Agreement  and all  Lender  Agreement  shall not  constitute  "Lender
Agreements" under the Senior Credit Facility.

         Section 15.4 LENDER CREDIT DECISION.  Each Lender  acknowledges that it
has,  independently  and without reliance upon the Agent or any other Lender and
based on the  financial  statements  referred  to in Section  5.9 and such other
documents  and  information  as it has deemed  appropriate,  made its own credit
analysis  and  decision  to  enter  into  this   Agreement.   Each  Lender  also
acknowledges that it will,  independently and without reliance upon the 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 decisions in taking or
not taking action under this Agreement.

         Section 15.5  INDEMNIFICATION OF AGENT. Each Lender agrees to indemnify
the Agent and its directors,  officers, employees and agents (to the extent that
the Agent is not  reimbursed  by Borrower),  ratably  according to each Lender's
Commitment  Percentage,  from and against any and all liabilities,  obligations,
losses,  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or  asserted  against the Agent or its  directors,  officers,  employees  or
agents in any way  relating  to or arising  out of this  Agreement  or any other
Lender  Agreement or any action  taken or omitted by the Agent in such  capacity
under this Agreement; PROVIDED that no Lender shall be liable for any portion of
such liabilities,  obligations,  losses, damages, penalties, actions, judgments,
suits,  costs,  expenses  or  disbursements  resulting  from the  Agent's  gross
negligence  or wilful  misconduct.  Without  limitation of the  foregoing,  each
Lender agrees to reimburse the Agent  promptly upon demand for its ratable share
of any out-of-pocket  expenses (including counsel fees) incurred by the Agent in
connection   with  the   preparation,   execution,   delivery,   administration,
modification,  amendment or enforcement  (whether  through  negotiations,  legal
proceedings  or  otherwise)  of,  or  legal  advice  in  respect  of  rights  or
responsibilities  under, this Agreement and each other Lender Agreement,  to the
extent that the Agent is not reimbursed for such expenses by Borrower.

         Section 15.6 SUCCESSOR  AGENT.  Except as provided below, the Agent may
resign at any time by giving written notice thereof to the Lenders and Borrower.
Upon any such  resignation,  the  Lenders  shall  have the  right to  appoint  a
successor  Agent  which  shall  be  reasonably  acceptable  to  Borrower.  If no
successor  Agent shall have been so  appointed  by the  Lenders  (other than the
resigning Agent),  and shall have accepted such appointment,  within thirty (30)
days after the retiring Agent's giving notice of resignation,  then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a
commercial bank or financial  institution organized under the laws of the United
States of America or of any state  thereof  and  having a combined  capital  and
surplus of at least $50,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent,  such successor Agent shall thereupon succeed to
and become  vested with all the  rights,  powers,  privileges  and duties of the
refiring  Agent,  and the retiring Agent shall be discharged from its duties and
obligations  under this  Agreement  and the other Lender  Agreements.  After any
retiring Agent's resignation  hereunder as Agent, the provisions of this Article
15 shall inure to its benefit as to any actions  taken or omitted to be taken by
it while it was Agent under this Agreement and the other Lender Agreements.

         Section 15.7 AMENDMENT OF ARTICLE 15.  Borrower  hereby agrees that the
foregoing  provisions of this Article 15 constitute an agreement among the Agent
and the Lenders (and the Agent and the Lenders  acknowledge  that except for the
provisions of Section 13.5,  Borrower is not party to or bound by such foregoing
provisions) and that any and all of the provisions of this Article 15 (excepting
Section  15.6) may be amended at any time by the Lenders  and the Agent  without
the consent or approval of, or notice to Borrower (other than the requirement of
notice to  Borrower of the  resignation  of the Agent and the  appointment  of a
successor Agent).

                            ARTICLE 16. MISCELLANEOUS

         Section  16.1  NOTICES.  All notices and other  communications  made or
required to be given pursuant to this Agreement shall be in writing and shall be
mailed by United States mail,  postage prepaid,  or sent by hand, by telecopy or
by nationally-recognized overnight carrier service, addressed as follows:

         (a) If to the Agent,  BankBoston,  N.A.,  115  Perimeter  Center Place,
N.E., Suite 500,  Atlanta,  GA and Paul,  Hastings,  Janofsky & Walker LLP,, 600
Peachtree Street,  N.E., Suite 2400,  Atlanta,  Georgia  30308-2222,  Attention:
Charles T. Sharbaugh,  or at such other  address(es) or to the attention of such
other  Person(s)  as the Agent shall from time to time  designate  in writing to
Borrower and the Lenders.

         (b) If to Borrower,  c/o American Skiing Company, P.O. Box 450, Bethel,
ME 04217,  or for overnight  delivery  service,  Sunday River Road,  Bethel,  ME
04217,  Telecopier No.  207/824-5158,  Attention:  Christopher E. Howard,  Esq.,
Senior Vice President and Chief Administrative Officer and Mark J. Miller, Chief
Financial Officer,  with a copy to: David J. Champoux,  Esq., Pierce Atwood, One
Monument  Square,  Portland,  ME 04101,  Telecopier No.  207/791-1350 or at such
other  address(es) or to the attention of such other Person(s) as Borrower shall
from time to time designate in writing to the Agent and the Lenders.

         (c) If to any Lender,  at the  address(es)  and to the attention of the
Person(s)  specified  below such  Lender's  name on the  execution  page of this
Agreement (or in the case of a Successor  Lender,  at the address(es) and to the
attention of the Person(s) specified in the Assignment and Acceptance  Agreement
executed by such  Successor  Lender),  or at such other  address(es)  and to the
attention  of  such  other  Person(s)  as any  Lender  shall  from  time to time
designate in writing to the Agent and Borrower.

         Any notice so addressed  and mailed by  registered  or  certified  mail
shall be deemed to have been given when mailed. Any notice so addressed and sent
by hand,  by telecopy or by overnight  carrier  service  shall be deemed to have
been given when received.

         A notice from the Agent stating that it has been given on behalf of the
Lenders shall be relied upon by Borrower as having been given by the Lenders.

         Section 16.2 MERGER. This Agreement and the other Lender Agreements and
documents  contemplated  hereby constitute the entire agreement of the Borrower,
the Agent and the Lenders and express their entire understanding with respect to
credits advanced or to be advanced by the Lenders to the Borrower.

         Section 16.3 GOVERNING  LAW;  CONSENT TO  JURISDICTION.  This Agreement
shall be governed by and construed  and enforced  under the laws of the State of
Georgia.

         Section 16.4  COUNTERPARTS.  This  Agreement and all amendments to this
Agreement  may be  executed in several  counterparts,  each of which shall be an
original. The several counterparts shall constitute a single Agreement.

         Section 16.5      EXPENSES AND INDEMNIFICATION.

         (a) Borrower  agrees to pay, on demand,  all of the Agent's  reasonable
expenses in preparing,  executing,  delivering and administering this Agreement,
the Lender Agreements,  all related  instruments and documents and any requested
amendment,  waiver or consent  relating  hereto or thereto,  including,  without
limitation,  the  reasonable  fees and  out-of-pocket  expenses  of the  Agent's
third-party consultants, special counsel, Paul, Hastings, Janofsky & Walker LLP,
and local counsel in each  jurisdiction  in which Borrower and or any Subsidiary
has assets and the Agent's and Lenders'  reasonable  expenses in connection with
periodic audits of Borrower and its  Subsidiaries.  Borrower also agrees to pay,
on demand, all reasonable  out-of-pocket  expenses incurred by the Agent and the
Lenders,  including,  without  limitation,   reasonable  legal,  accounting  and
third-party  consultant  fees, in connection  with the collection of amounts due
hereunder and under all other Lender Agreements upon the occurrence of a Default
hereunder, the revision,  protection or enforcement of any of the Agent's or the
Lenders' rights against  Borrower under this Agreement,  the Notes, the Guaranty
Agreements,  the Security  Agreements,  and all other Lender  Agreements and the
administration  of special  problems that may arise under this  Agreement or any
other Lender Agreement. Borrower also agrees to pay all stamp and other taxes in
connection  with the  execution  and  delivery  of this  Agreement  and  related
instruments and documents.

         (b) Without limitation of any other obligation or liability of Borrower
or right or remedy of the Agent or the Lenders contained herein, Borrower hereby
covenants  and agrees to  indemnify  and hold the Agent,  the  Lenders,  and the
directors, officers, subsidiaries,  shareholders, agents, affiliates and Persons
controlling  the Agent and the  Lenders,  harmless  from and against any and all
damages,  losses,  settlement  payments,   obligations,   liabilities,   claims,
including, without limitation,  claims for finder's or broker's fees, actions or
causes  of  action,  and  reasonable  costs  and  expenses  incurred,  suffered,
sustained or required to be paid by any such  indemnified  party in each case by
reason  of or  resulting  from any  claim,  investigation,  litigation  or other
proceeding  related to the entering  into of this  Agreement or any other Lender
Agreement,  the  use of the  proceeds  of any  Loans,  the  consummation  of the
transactions  contemplated  herein, the exercise by the Agent and the Lenders of
their  rights  and  remedies,   or  otherwise   relating  to  the   transactions
contemplated hereby, other than any such claims which are determined by a final,
non-appealable  judgment or order of a court of competent jurisdiction to be the
result of the gross negligence or willful  misconduct of such indemnified party.
Promptly  upon  receipt  by any  indemnified  party  hereunder  of notice of the
commencement of any action against such  indemnified  party for which a claim is
to be made  against  Borrower  hereunder,  such  indemnified  party shall notify
Borrower in writing of the commencement thereof, although the failure to provide
such notice shall not affect the indemnification  rights of any such indemnified
party  hereunder  unless and only to the  extent  Borrower  demonstrates  to the
reasonable  satisfaction  of such  party that such  failure  to  provide  notice
prejudiced Borrower in its defense of such claim. Borrower shall have the right,
at its option upon notice to the indemnified  parties, to defend any such matter
at its own expense and with their own counsel,  except as provided below,  which
counsel  must  be  reasonably   acceptable  to  the  indemnified   parties.  The
indemnified  party shall  cooperate with Borrower in the defense of such matter.
The  indemnified  party shall have the right to employ  separate  counsel and to
participate in the defense of such matter at its own expense.  In the event that
(a) the  employment  of  separate  counsel  by an  indemnified  party  has  been
authorized in writing by Borrower, (b) Borrower has failed to assume the defense
of such matter within fifteen (15) days of notice  thereof from the  indemnified
party, or (c) the named parties to any such action (including impleaded parties)
include any indemnified  party who has been advised by counsel that there may be
one or more legal defenses  available to it or  prospective  bases for liability
against it, which are  different  from those  available to or against  Borrower,
then Borrower shall not have the right to assume the defense of such matter with
respect to such indemnified  party.  Borrower shall not compromise or settle any
such matter  against an  indemnified  party  without the written  consent of the
indemnified party, which consent may not be unreasonably withheld or delayed.

         Section 16.6  CONFIDENTIALITY.  The Agent and the Lenders  agree to use
commercially  reasonable  efforts to keep in confidence  all financial  data and
other  information  relative  to the affairs of  Borrower  and its  Subsidiaries
heretofore furnished or which may hereafter be furnished to them pursuant to the
provisions of this Agreement;  PROVIDED,  HOWEVER,  that this Section 16.6 shall
not be  applicable  to  information  otherwise  disseminated  to the  public  by
Borrower or any of its  Subsidiaries  or any of their  Affiliates;  and PROVIDED
FURTHER,  that such  obligation of the Agent and the Lenders shall be subject to
the Agent's or the Lenders', as the case may be, (a) obligation to disclose such
information pursuant to a request or order under applicable laws and regulations
or pursuant to a subpoena or other legal process, (b) right to disclose any such
information  to  bank  or  other  regulatory  examiners,  affiliates,  auditors,
accountants and counsel or to any Person who evaluates,  approves, structures or
administers  the Loans on behalf of a Lender who agree to keep such  information
confidential  and (c) right to disclose any such  information  (i) in connection
with the transactions set forth herein  including  assignments,  so long as such
potential  assignees or  participants  shall agree in writing to be bound by the
terms of this Section 16.6 or (ii) in connection  with any litigation or dispute
involving  the Agent or any  transfer or other  disposition  by the Agent or the
Lenders,  as the case may be, of any of the Lender  Obligations;  PROVIDED  that
information  disclosed  pursuant to this provision shall be so disclosed subject
to such procedures as are reasonably  calculated to maintain the confidentiality
thereof.

         Section   16.7  JOINT  AND   SEVERAL   OBLIGATIONS.   Borrower   waives
presentment,  demand,  protest,  notice of  acceptance,  notice of  indebtedness
incurred and all other notices of any kind,  all defenses which may be available
by virtue of any  valuation,  stay,  moratorium  law or other similar law now or
hereafter in effect,  any right to require the  marshaling of assets of Borrower
and its Subsidiaries, and all suretyship defenses generally.

         Section 16.8 WAIVER OF JURY TRIAL. THE AGENT, THE LENDERS, AND BORROWER
AGREE  THAT NONE OF THEM NOR ANY  ASSIGNEE  OR  SUCCESSOR  SHALL (A) SEEK A JURY
TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION INVOLVING THE
AGENT OR ANY LENDER AS A PARTY BASED UPON OR ARISING OUT OF, THIS AGREEMENT, THE
TERM LOAN NOTES, ANY LENDER AGREEMENT,  ANY RELATED INSTRUMENTS,  ANY COLLATERAL
OR THE DEALINGS OR THE RELATIONSHIP  BETWEEN OR AMONG ANY OF THEM OR (B) SEEK TO
CONSOLIDATE  ANY SUCH ACTION WITH ANY OTHER  ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED.  THE  PROVISIONS  OF THIS  PARAGRAPH  HAVE BEEN FULLY
DISCUSSED BY EACH OF THE AGENT,  THE LENDERS AND BORROWER WITH THEIR  RESPECTIVE
COUNSEL,  AND THESE  PROVISIONS  SHALL BE SUBJECT TO NO EXCEPTIONS.  NONE OF THE
LENDERS,  AGENT OR BORROWER HAVE AGREED WITH OR  REPRESENTED  TO ANY OTHER PARTY
THAT  THE  PROVISIONS  OF THIS  PARAGRAPH  WILL  NOT BE  FULLY  ENFORCED  IN ALL
INSTANCES.

         Section  16.9  AMENDMENT  AND  RESTATEMENT.  This  Amended and Restated
Credit Agreement amends and restates the Original Credit Agreement. The Lender's
Obligations of the Original  Credit  Agreement  shall be amended and restated in
accordance  with the terms  and  conditions  hereof  but  shall  continue  to be
secured, without interruption or novation, by the Security Agreements.  Borrower
hereby acknowledges and recognizes that the outstanding principal balance of the
Lenders  Obligations as of the Closing Date under the Original Credit  Agreement
was the Closing  Date  Balance and that the Closing  Date Balance is included in
the Term Loans and Lenders Obligations as of the Closing Date.

         Section  16.10  NONRECOURSE  OBLIGATION  UNDER  SENIOR NOTE  INDENTURE.
Lenders and Agent  understand and  acknowledge  that this Agreement  constitutes
"Non-Recourse Real Estate Debt" as defined in that certain Indenture dated as of
June 28, 1996 among  American  Ski,  United States Trust Company of New York, as
trustee and the other  parties  named  therein.  The  Lenders  shall not, in any
circumstance,  have  recourse  to the  assets  of ASC East,  Inc.  or any of its
subsidiaries,  other than the Borrower and its Subsidiaries, for satisfaction of
the Lender Obligations.


<PAGE>


         IN WITNESS  WHEREOF,  Borrower,  the Agent and the Lenders  have caused
this Agreement to be executed by their duly  authorized  officers as of the date
set forth above.

                                 AMERICAN SKIING COMPANY RESORT PROPERTIES, INC.

                                 By:  /s/ Christopher E. Howard
                                    -------------------------------------------
                                 Name: Christopher E. Howard       
                                 Title: Senior Vice President




                                 [EXECUTION CONTINUED ON FOLLOWING PAGES]


<PAGE>

                                 BANKBOSTON, N.A., as Agent

                                 By: /s/ Paul F. DeVito
                                    ------------------------------------------
                                 Name:  Paul F. DeVito
                                 Title: Managing Director


                                 [EXECUTION CONTINUED ON FOLLOWING PAGES]


<PAGE>


                                BANKBOSTON, N.A.

                                 By: /s/ Paul F. DeVito
                                    ------------------------------------------
                                 Name:  Paul F. DeVito
                                 Title: Managing Director


                                 [EXECUTION CONTINUED ON FOLLOWING PAGES]

                                  MORGAN STANLEY SENIOR FUNDING, INC.

                                 By: Unreadable
                                    -------------------------------------------
                                    Name:  Unreadable
                                    Title:  Vice President


<PAGE>



                                LIST OF SCHEDULES


Schedule 1    Commitment Percentages, Designated Lenders

Schedule 1.1  Mandatory Amortization Payments

Schedule 1.2  Borrower Subsidiaries

Schedule 2    Purchase Money Mortgages

Schedule 5.2  Borrower and each Subsidiary's principal place of business

Schedule 5.4  Intercompany Debt Disclosure

Schedule 5.11 Issued and Outstanding Capital Stock of Borrower

Schedule 5.13 Liens, Charges, and Encumbrances

Schedule 5.15 ERISA

Schedule 5.16 Outstanding Indebtedness

Schedule 5.17 Environmental Matters

Schedule 5.27 Leases

Schedule 8.8  Legal Ownership of Subsidiaries

Schedule 9.3  Borrower Subsidiary Investments

Schedule 9.5  Existing Affiliate Transactions


<PAGE>



                                LIST OF EXHIBITS


Exhibit A                     Form of Term Loan Notes

Exhibit B                     Designated Properties

Exhibit C                     Budget

Exhibit D                     Status Memorandum

Exhibit E                     Closing Agenda

Exhibit F                     Advance Certificate

Exhibit G                     Loan Reserve Analysis

Exhibit H                     Base Property

Exhibit I                     Cash Flow Projection



<PAGE>


                                                SCHEDULE 1





 Lenders:               Commitment Percentage:



BankBoston, N.A.                  100%





<PAGE>


                                               SCHEDULE 1.1

                                      Mandatory Amortization Schedule


<PAGE>


                                               SCHEDULE 1.2

                                           Borrower Subsidiaries

1.       Grand Summit Resort Properties, Inc., a Maine corporation

2.       Canyons Resort Properties, Inc., a Maine corporation

3. Heavenly Resort Properties, LLC, a Nevada limited liability company



<PAGE>


                                               SCHEDULE 5.11

                             Issued and Outstanding Capital Stock of Borrower


<PAGE>


                                               SCHEDULE 5.27

                                                  Leases


<PAGE>


                                               SCHEDULE 9.3

                                      Borrower Subsidiary Investments