PURCHASE AND DEVELOPMENT AGREEMENT


                                  by and among

                             AMERICAN SKIING COMPANY
                                   ("Seller")

                 AMERICAN SKIING COMPANY RESORT PROPERTIES, INC.
                                    ("Owner")

                                       And

                        MARRIOTT OWNERSHIP RESORTS, INC.
                                  ("Purchaser")



<PAGE>


                                TABLE OF CONTENTS


ARTICLE I......................................................................2

   DEFINITIONS.................................................................2
   1.0    DEFINITIONS..........................................................2

ARTICLE II.....................................................................2

   PURCHASE AND SALE OF DEVELOPMENT RIGHTS.....................................2
   2.1    INTENT OF THE PARTIES................................................2
   2.2    PURCHASE AND SALE....................................................2
   2.3    PURCHASE PRICE.......................................................3
   2.4    CLOSING..............................................................3

ARTICLE III....................................................................3

   PURCHASE AND SALE OF REAL PROPERTY..........................................3
   3.1    PURCHASE AND SALE OF REAL PROPERTY...................................3
   3.2    PURCHASE PRICE.......................................................3
   3.3    CLOSINGS.............................................................3

ARTICLE IV.....................................................................3

   CONSIDERATION...............................................................3
   4.1    PURCHASE PRICE.......................................................3
   4.2    PAYMENT OF PURCHASE PRICE............................................3
   4.3    ROYALTY FEE..........................................................4
   4.4    COLLATERALIZING THE PURCHASE PRICE...................................6

ARTICLE V......................................................................8

   CO-DEVELOPMENT AGREEMENT....................................................8
   5.1    CO-DEVELOPMENT RELATIONSHIP GENERALLY................................8
   5.2    MARKETING AND DEVELOPMENT............................................9
   5.3    RESORT PROGRAMS.....................................................16

ARTICLE VI....................................................................17

   SURVEY.....................................................................17
   6.1    SURVEY..............................................................17

ARTICLE VII...................................................................17

   TITLE......................................................................17
   7.1    TITLE COMMITMENT....................................................17
   7.2    TITLE POLICY........................................................18

ARTICLE VIII..................................................................19

   POSSESSION, PRORATIONS AND CLOSING EXPENSES................................19
   8.1    POSSESSION..........................................................19
   8.2    PRORATIONS..........................................................19
   8.3    CLOSING EXPENSES....................................................19

ARTICLE IX....................................................................20

   AFFIRMATIVE COVENANTS......................................................20
   9.1    TRANSACTIONS AND ENCUMBRANCES AFFECTING THE DEVELOPMENT RIGHTS 
          OF THE REAL PROPERTY................................................20
   9.2    PURCHASER'S ACCESS..................................................20
   9.3    OTHER AGREEMENTS....................................................21
   9.4    TAXES...............................................................21

                                       i
<PAGE>

ARTICLE X.....................................................................21

   REPRESENTATIONS OF SELLER AND OWNER........................................21
   10.1   REPRESENTATIONS OF SELLER AND OWNER.................................21
   10.2   SELLER'S AND OWNER'S COVENANT.......................................24
   10.3   CONDITIONS PRECEDENT TO SELLER/OWNER OBLIGATIONS TO CLOSE...........24

ARTICLE XI....................................................................25

   ENVIRONMENTAL MATTERS......................................................25
   11.1   ENVIRONMENTAL REPRESENTATIONS.......................................25
   11.2   ENVIRONMENTAL INDEMNITY.............................................26
   11.3   NO NOTICES..........................................................26
   11.4   ENVIRONMENTAL ASSESSMENT............................................26

ARTICLE XII...................................................................27

   REPRESENSTATIONS OF PURCHASER..............................................27
   12.1   REPRESENTATIONS OF PURCHASER........................................27

ARTICLE XIII..................................................................27

   CONDITIONS PRECEDENT, REMEDIES.............................................27
   13.1   CONDITIONS PRECEDENT TO CLOSING.....................................27
   13.2   PURCHASER'S RIGHTS AND REMEDIES IN EVENT OF NON-SATISFACTION OF 
          CONDITIONS PRECEDENT................................................29
   13.3   PURCHASER'S REMEDIES................................................30
   13.4   SELLER'S AND OWNER'S SOLE AND EXCLUSIVE REMEDY......................31
   13.5   NOTICE OF DEFAULT AND OPPORTUNITY TO CURE...........................32

ARTICLE XIV...................................................................32

   CROSS DEFAULT..............................................................32
   14.1   CROSS DEFAULT.......................................................32

ARTICLE XV....................................................................33

   BROKERAGE..................................................................33
   15.1   BROKERAGE...........................................................33

ARTICLE XVI...................................................................33

   CASUALTY AND CONDEMNATION..................................................33
   16.1   CASUALTY AND CONDEMNATION...........................................33

ARTICLE XVII..................................................................34

   CLOSING....................................................................34
   17.1   CLOSING.............................................................34
   17.2   SELLER'S/OWNER'S CLOSING DOCUMENTS..................................35
   17.3   APPROVAL OF CLOSING DOCUMENTS.......................................36
   17.4   PURCHASER'S CLOSING DOCUMENTS.......................................36

ARTICLE XVIII.................................................................37

   CONTEMPLATED USE OF THE REAL PROPERTY......................................37
   18.1   CONTEMPLATED USE OF THE REAL PROPERTY...............................37

ARTICLE XIX...................................................................37

   NOTICES....................................................................37
   19.1   NOTICES.............................................................37

ARTICLE XX....................................................................38

   ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS...................................38
   20.1   ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS............................38


                                      ii

<PAGE>

ARTICLE XXII..................................................................38

   NO THIRD PARTY BENEFITS AND ASSIGNMENT.....................................38
   21.1   NO THIRD PARTY BENEFITS.............................................38
   21.2   ASSIGNMENT..........................................................38

ARTICLE XXII..................................................................39

   INCOME TAXES...............................................................39
   22.1   FEDERAL WITHHOLDING.................................................39
   22.2   DISCLOSURE TO TAXING AUTHORITIES....................................39

ARTICLE XXIII.................................................................39

   EVENTS OF DEFAULT..........................................................39
   23.1   EVENTS OF DEFAULT...................................................39

ARTICLE XXIV..................................................................40

   MISCELLANEOUS..............................................................40
   24.1   FURTHER ASSURANCES..................................................40
   24.2   SURVIVAL AND BENEFIT................................................40
   24.3   INTERPRETATION......................................................40
   24.4   DISCREPANCY IN DESCRIPTIONS.........................................41
   24.5   PUBLICITY...........................................................41

ARTICLE XXV...................................................................42

   OFFER AND ACCEPTANCE.......................................................42
   25.1   OFFER AND ACCEPTANCE................................................42

ARTICLE XXVI..................................................................42

   MEMORANDUM OF CONTRACT.....................................................42
   26.1   RECORDATION OF MEMORANDUM OF CONTRACT...............................42

ARTICLE XXVII.................................................................42

   RESTRICTIONS ON COMPETITION................................................42
   27.1   RESTRICTIONS........................................................42

ARTICLE XXVIII................................................................44

   FUTURE AMENDMENTS..........................................................44
   28.1   FUTURE AMENDMENTS...................................................44




                                       iii


<PAGE>



                       PURCHASE AND DEVELOPMENT AGREEMENT

         This Purchase and Development Agreement ("Contract") is entered into as
of the 22nd day of July,  1998 by and among  AMERICAN  SKIING  COMPANY,  a Maine
corporation  having  an  office  at  Sunday  River  Road,  Bethel,  Maine  04217
("Seller"),  and  AMERICAN  SKIING  COMPANY  RESORT  PROPERTIES,  INC.,  a Maine
corporation having an office at Sunday River Road, Bethel, Maine 04217 ("Owner")
and MARRIOTT OWNERSHIP RESORTS, INC., a Delaware corporation having an office at
6649 Westwood Boulevard, Suite 500, Orlando, Florida 32821 ("Purchaser").

                                    RECITALS

         WHEREAS,  Seller is the parent company of Owner and has acquired and/or
developed numerous properties  throughout the United States which it operates as
premier resorts, known primarily,  but not exclusively,  as major ski areas (the
"Seller Resorts");
         WHEREAS,  Owner, a wholly owned  subsidiary of Seller,  is (or prior to
any conveyance hereunder, will be) the fee title Owner of the Real Property;
         WHEREAS,  Purchaser is a company  primarily engaged in the development,
sales and  marketing  and  operation  of  resort  properties  in which  vacation
ownership or timeshare interests are sold;
         WHEREAS,   Seller,   Owner  and  Purchaser  desire  to  enter  into  an
arrangement whereby Seller and Owner will sell, and Purchaser will purchase, the
right and  opportunity  to  develop  resorts,  to be sold to third  parties on a
vacation  ownership  basis, at specified "ski on/ski off" locations at specified
Seller Resorts currently owned by Seller or Owner, pursuant to the terms of this
Contract.  This right and opportunity to develop specified sites is defined more
fully in Exhibit B, and is referred to herein as the Development Rights;
         WHEREAS,  as part of the Development Rights conveyed by this agreement,
Owner is granting to Purchaser  the right to purchase five (5)  identified  "ski
on/ski  off"  properties  (described  in  detail  under the  definition  of Real
Property  set forth in Exhibit B and  generally  described  in Exhibit A hereto)
from the Owner as vacation  ownership  sites to be  developed by  Purchaser.  In
addition  to  purchase  rights   pertaining  to  the   specifically   identified
properties, the Development Rights also include the right to acquire and develop
additional  parcels  on the  other  Seller  Resorts  currently  owned,  or to be
acquired by Seller or Owner or their designee,  as more  particularly  set forth
herein;


                                       1
<PAGE>

         WHEREAS,  the parties hereto desire to enter into a further arrangement
whereby  each party  will  market  and  promote  their  respective  products  at
locations  owned and operated by the other party,  including but not limited to,
the areas  around the Real  Property,  to the extent owned or operated by Seller
and/or Owner, subject to the terms and limited to the extent expressly set forth
herein;
         WHEREAS,  the parties  hereto  further desire to enter into a long term
relationship  relating to the future development of suitable  properties and the
sale and  marketing of interests  therein,  both as relates to their  respective
products as well as the products of the other parties; and
         WHEREAS,  Purchaser  contemplates  the development and  construction on
each parcel  included within the Real Property of a minimum of two hundred (200)
residential vacation ownership Units.

                                    AGREEMENT
         NOW,  THEREFORE,  in  consideration  of the foregoing  premises and the
respective   representations,   agreements,   covenants  and  conditions  herein
contained,  and other  good and  valuable  consideration,  the  sufficiency  and
receipt of which are hereby  acknowledged,  Seller, Owner and Purchaser agree as
follows:

                                    ARTICLE I
                                   DEFINITIONS
1.0 Definitions. See Exhibit B attached hereto and made a part hereof.

ARTICLE II PURCHASE  AND SALE OF  DEVELOPMENT  RIGHTS 2.1 Intent of the Parties.
The transaction  embodied herein contemplates a relationship among Seller, Owner
and Purchaser  continuing for the Term of this Agreement,  including any and all
extensions  thereof.  While that relationship shall not be interpreted or deemed
to create a  partnership  or joint  venture  arrangement,  there is a continuing
expectation  of mutual  cooperation,  effort,  obligation,  benefit  and  reward
arising  out of  that  relationship.  
2.2 Purchase and Sale.  Subject to the conditions and on the terms  contained in
this  Contract,  on the Closing  Date,  Seller and Owner  hereby  agree to sell,
convey  and  transfer  the  Development  Rights,  as  defined  in  Exhibit B, to
Purchaser and Purchaser hereby agrees to purchase such Development Rights, from


                                       2
<PAGE>

Seller and Owner.  Conveyance and transfer of the Development  Rights at Closing
shall be by an  Assignment  of  Development  Rights  (in the form of a  recorded
Memorandum  of this  Contract,  or  similarly  titled  instrument),  which shall
include  covenants  reflecting   Purchaser's   interest,   which  Assignment  of
Development  Rights (or other  document of similar  purpose and intent) shall be
recorded against each of the Real Property parcels as well as each of the Seller
Resorts.  The form of Assignment of Development  Rights (Memorandum of Contract)
shall be substantially as set forth on Exhibit C attached hereto and made a part
hereof. 
2.3 Purchase Price.  The total combined  purchase price (the "Combined  Purchase
Price") to be paid to Seller and Owner by Purchaser for the  Development  Rights
and the Real  Property  shall be as set forth in Article  IV  payable  and to be
applied as set forth in said Article.
2.4 Closing.  The Closing Date for the  acquisition  of the  Development  Rights
shall be as defined in Exhibit B to this Contract.

                 ARTICLE III PURCHASE AND SALE OF REAL PROPERTY


3.1 Purchase and Sale of Real  Property.  Subject to the  conditions  and on the
terms contained in this Contract,  Seller and Owner hereby agree to sell, convey
and  transfer  unto the  Purchaser  fee title  absolute to the Real  Property as
identified  in  Exhibit A and as defined  in  Exhibit  B. Each  parcel  shall be
conveyed  by a  recordable  special  warranty  deed,  subject  only  to (i)  the
Permitted  Exceptions  and (ii) the  restrictions  on  development  set forth in
Article XXVII of this Contract, ("Deed"). 
3.2 Purchase Price. The Purchase Price for the Real Property shall be the amount
set forth in Article IV of this  Contract.  
3.3  Closings.  The  closings  on the  conveyance  and  transfer of title to the
individual parcels of the Real Property  (collectively referred to herein as the
Conveyance Dates) shall be as set forth in Article 17.1 hereof.

                                   ARTICLE IV
                                  CONSIDERATION
4.1 Purchase  Price.  The Combined  Purchase Price to be paid to Seller/Owner by
Purchaser for the Development Rights and the Real Property shall be (a) Eighteen
Million Dollars  ($18,000,000) (the "Fixed Purchase Price"), and (b) the Royalty
Fee (as  defined  herein),  and each shall be payable  and  applied as set forth
below.  


                                       3
<PAGE>

4.2 Payment of Fixed  Purchase  Price.  The Fixed Purchase Price for the
Development  Rights inclusive of the Real Property shall be paid by Purchaser to
Seller as follows:  At Closing,  Purchaser  shall (a) make a cash payment of one
million six hundred thousand dollars ($1,600,000) (which may be made by check or
wire transfer,  at Seller's  election),  and (b) execute and deliver to Seller a
full  recourse  promissory  note  evidencing  a debt of six million four hundred
thousand dollars  ($6,400,000) (the "Note"). The Note will be due and payable in
full on July 31,  2003 (the  "Maturity  Date").  Until the  Maturity  Date,  the
interest  on the debt  will  accrue  at the rate  equal to the  applicable  U.S.
government rate paid on Five (5) Year Treasury Notes on the Closing Date. Except
for as otherwise  provided  herein,  or as otherwise  set forth in the Note,  no
payment of interest or principal  shall be due on the Note prior to the Maturity
Date. The Note shall be  substantially as set forth on Exhibit D attached hereto
and made a part hereof.
         The  Development  Rights  include,  among  other  rights,  the right to
acquire the Real Property.  The Combined Purchase Price for all five (5) parcels
comprising the Real Property, identified in Exhibit A and the Development Rights
shall be the Fixed Purchase Price plus the Royalty Fee.  Excluded from the Fixed
Purchase Price is any additional  amount  required in connection  with acquiring
the development  rights of the Heavenly  Valley parcel,  as discussed in Section
13.1.1. The amount payable at Closing, ($8,000,000) inclusive of interest on the
Note whether paid or accrued, shall be credited against the total Fixed Purchase
Price as follows: as title to a specific parcel of Real Property is conveyed and
transferred  from Owner to Purchaser,  the Note shall be prepaid by Purchaser in
an amount not to exceed  $3,600,000  in any twelve month period from the date of
the transfer of the first parcel of Real  Property.  Upon  repayment of the Note
principal  in full,  pursuant to the schedule set forth  herein,  the  Purchaser
shall continue to pay the Owner a maximum sum per annum not to exceed $3,600,000
until an aggregate  total of $18,000,000  (exclusive of the Royalty Fee payment)
has been paid for  acquisition of the  Development  Rights and title to all five
(5) parcels  comprising the Real Property.  It is the intent of the parties that
Purchaser  shall pay an average price of $3,600,000  per parcel of Real Property
and a Fixed  Purchase Price of $18,000,000  for the  Development  Rights and all
five (5) Real  Property  parcels  combined.  The cash payment made at Closing of
$1,600,000  shall be  credited  in its  entirety,  against  the  amount due from
Purchaser  in  connection  with the  acquisition  of the  first  parcel  of Real
Property, thereby reducing the initial pay-down on the Note to $2,000,000.  



                                       4
<PAGE>

4.3.Royalty  Fee.  (1) In addition to the Fixed  Purchase  Price as set forth in
this Article, Purchaser shall pay to Seller a Royalty Fee equal to three percent
(3%) of the Gross Receipts from the initial sale (excluding  rescinded sales) of
Purchaser Timeshare Interests in the Units sold at the Real Property,  including
any additional  properties owned by Seller or Owner which, by future  amendment,
or by purchase by Purchaser pursuant to the provisions of this Contract,  become
added to the  parcels  comprising  the Real  Property,  become  subject  to this
Contract ("Royalty Fee"). Payment of the appropriate Royalty Fee amount shall be
made on a  semi-annual  basis,  within  sixty  (60)  days of the  conclusion  of
Purchaser's semi-annual accounting period at each of the parcels comprising part
of the Real Property.  Such payment shall be based on Gross  Receipts  resulting
from actually concluded (closed)  unrescinded,  initial sales transactions.  Any
pending contract deposits or sales down-payments for unclosed  transactions,  or
amounts  refunded by  Purchaser  to the buyer of a Timeshare  Interest,  for any
reason,  in the usual and  ordinary  course of  Purchaser's  business,  shall be
excluded from the gross, post-closing receipts realized by Purchaser from closed
sales of Purchaser Timeshare Interests at the Real Property, and shall therefore
not constitute amounts to which Seller or Owner shall be entitled in whole or in
any part.  Purchaser shall be entitled to redact from such records the names and
addresses  (and  any  other  information   identifying  the  Timeshare  Interest
purchaser) which may appear on such records regarding closed sales. 

(2) The term "Gross  Receipts"  as used  herein is hereby  defined to mean gross
receipts from gross sales of Purchaser  Timeshare  Interests located at the Real
Property by Purchaser or its assignees or successors in interest,  or by a third
party on Purchaser's behalf, and whether such sales be evidenced by cash, check,
credit,  charge  account,  exchange or otherwise.  If any sales and marketing of
Timeshare  Interests shall be conducted by any person, firm or corporation other
than Purchaser  with respect to the Real Property,  then there shall be included
in the Gross  Receipts all of the gross sales of such persons in the same manner
and with the same  effect as if the  business  or sales of such  departments  or
divisions had been conducted by Purchaser  itself. No franchise or capital stock
tax and no income or similar  tax based upon  income or profits as such shall be
deducted from Gross Receipts in any event whatsoever, nor shall any such tax, or
any  other  tax of any  nature,  including  but not  limited  to sales  tax,  be
construed or considered as part of the Gross Receipts upon which the Royalty Fee
shall be  calculated.  Each charge or sale upon  installment  or credit shall be
treated as a sale for the full price in the month  during  which such  charge or
sale shall be made  irrespective  of the time when Purchaser (or its Affiliates,
assignees or successors  in interest)  shall  receive  payment  (whether full or


                                      5
<PAGE>

partial) therefore.  Gross Receipts shall include amounts received from the sale
of  Purchaser   Timeshare  Interests  through  any  point  based  sales  program
implemented by Purchaser.  

(3) Within forty-five (45) days after the end of each quarter during the term of
this  Contract,  Purchaser  shall furnish to Owner a written  statement  setting
forth the amount of Gross Receipts for such quarter.  Purchaser also agrees that
it will  furnish to Owner on or before  May 31 of each year an annual  statement
showing in all reasonable  detail the amount of Gross  Receipts  relating to the
period ending with Purchaser's most recently completed  quarter.  Each quarterly
and annual  statement  required by this Section shall be verified by the project
comptroller of the respective project. If Purchaser is materially  delinquent in
furnishing  Owner  with  quarterly  statements  of  Gross  Receipts  for two (2)
consecutive periods or is delinquent in furnishing Owner the annual statement of
Gross Receipts, any subsequent audit that Owner conducts shall be at Purchaser's
expense.  

(4) At its option,  Owner may conduct,  at any reasonable  time upon twenty (20)
days  prior  written  notice to  Purchaser,  a  complete  audit of the books and
records of  Purchaser  and its  assignees or  successors  relating to such Gross
Receipts. Purchaser shall cause such records to be preserved for a period of not
less than three (3) years. In the event that such examination or audit discloses
that  Purchaser  has  understated  Gross  Receipts by ten percent (10%) or more,
Purchaser  agrees to pay to Owner the  reasonable  cost of such  examination  or
audit plus any  additional  Marketing  Fee, and all future annual  statements of
Gross  Receipts  for the  following  two (2)  years  shall  be  certified  by an
independent  certified  public  accountant.  If, on the other hand,  the Owner's
audit  discloses  that the  Purchaser's  Gross  Receipts  report  was within ten
percent (10%) of the Gross Receipts  amount  revealed by said audit,  then Owner
shall  reimburse  Purchaser  for its  costs  of the  audit or  examination.  

4.4  Collateralizing  the  Purchase  Price.  

     A. In order to secure  Seller's and Owner's  obligations  hereunder  and in
     consideration  of the cash  payment to be made by Purchaser at the Closing,
     Seller and Owner will deliver to Purchaser,  at the Closing,  the following
     documents,  in  conjunction  with an assignment of the stock of Blunder Bay
     Development, Inc. (the "Company"), consisting of one thousand (1000) shares
     of common stock, as more particularly set forth below:

                                       6
<PAGE>
               (a) share  certificates  reflecting  1000  shares of stock in the
          Company (the  "Shares");  

               (b)  an  executed  stock  power  in  Purchaser's  favor;  

               (c) an  assignment  of the  Seller's  or Owner's  interest in the
          Company,  specifically  including  the  right to  receive  any and all
          revenue  derived from said interest (which right will not be exercised
          until the transfer of the  Collateral  pursuant to paragraph B of this
          Section);  

               (d) a title report  pertaining to the real property  owned by the
          Company,  including a lien search pertaining to the subject stock; 

               (e) any additional  document  required herein in relating to this
          assignment of stock and; 

               (f) a Power of Attorney enabling  Purchaser to act as Seller's or
          Owner's  Attorney-In-Fact  with  respect  to any  and  all  additional
          actions  which may be  required  to convey  the  subject  stock to the
          Purchaser.   The  foregoing  documents  are  hereinafter  collectively
          referred to as the "Collateral".

     A.  Purchaser  agrees to hold the  Collateral  until such time as Purchaser
acquires fee simple title to the first  parcel of Real  Property;  at which time
the Collateral shall be returned to Seller or Owner,  together with any releases
necessary to effect the release of Purchaser's  interest in the  Collateral.  If
Purchaser  believes,  in good faith,  that Seller or Owner has failed to satisfy
its obligations under this Contract, in a material respect, then, subject to the
provisions of Section 13.5 hereof,  Purchaser shall be permitted to complete the
conveyance of the Collateral,  to the Purchaser,  whereupon such interest or the
Collateral, as applicable, shall belong to Purchaser. If, however, the Seller or
Owner has  returned to the  Purchaser,  the cash  payment  made by  Purchaser at
Closing  (with  interest at the  maximum  rate  permitted  by  applicable  law),
together with the Note and a general  release of the Purchaser  from any and all
liability  under the Note, then Purchaser will release and return the Collateral
to the party from whom it was received.

                                       7
<PAGE>

     B. The Company is the fee title owner of a fifty percent (50%)  interest in
a parcel of property (more particularly described in the Lease as defined below)
comprising  a Seller  Resort  operated as a ski area,  commonly  known as Sunday
River in Bethel,  Maine.  The real property  underlying  portions of this Seller
Resort is leased by the  Company,  and the other  tenants in  common,  to Sunday
River Skiway  Corporation  ("SRSC") a Maine  corporation which is a wholly owned
subsidiary of the Seller,  pursuant to a lease  agreement dated October 15, 1980
between  the  predecessors  in  interest  of the  current  lessor  and SRSC (the
"Lease").  The annual rental income payable under the Lease includes, but is not
limited to "the greater of 2% of the Skiway's (SRSC) gross ski-related  receipts
or  $6,000.00.  Ski related  receipts  shall  include  gross  receipts from lift
tickets,  restaurants,  transient lodging,  lounges,  ski rentals,  instruction,
lessons,  and ski  equipment  sales  in  connection  with  all  lands  owned  or
controlled  by the Skiway and all future  lands  controlled  by the Skiway,  its
subsidiaries  or  assigns  in the Town of  Newry,  Maine."  As a  result  of the
Company's  fifty-percent  (50%) ownership  interest,  it is entitled to a rental
equal to the greater of one percent (1%) of the amount realized from ski-related
operations or $3,000.  Seller hereby  represents to Purchaser that the rent paid
by SRSC to the lessors  based on the gross  receipts  formula under the Lease is
approximately $525,000 per annum, of which one-half or approximately $262,500 is
paid to the Company as a fifty-percent (50%) owner of the leased property.

     C. Subject to the terms of this Section and provided the Collateral has not
been  returned to Seller,  commencing  on the date which is eighteen (18) months
after the Effective Date, the portion of rental income required to be paid under
the  Lease  to the  Company  shall  be paid  into an  escrow  account  held  and
maintained by BankBoston,  having its principal place of business at One Hundred
Federal  Street,  Boston,  Massachusetts,  pursuant  to the terms of a  separate
escrow  agreement,  for the  purpose of further  securing  Seller's  and Owner's
obligations hereunder.  In the event, however, that prior to such eighteen month
date,  the Purchaser  has exercised its right to complete the  conveyance of the
Collateral to the Purchaser  (under  Paragraph B above) then the rental  payment


                                       8
<PAGE>

due to the Company shall be made to the Company,  the stock of which shall, as a
result of the  conveyance,  belong to Purchaser.  Accordingly,  in such case the
rental  payment shall  thereafter be forwarded  directly to the Purchaser for as
long as the Lease shall remain in effect.

                                    ARTICLE V
                            CO-DEVELOPMENT AGREEMENT
5.1 Co-Development  Relationship Generally.  The specific provisions,  terms and
conditions of the parties post-Effective-Date  relationship are set forth below,
subject to mutually agreed to modifications, revisions and adjustments which may
be mutually agreed to be necessary or desirable as the contemplated relationship
evolves.  The terms of this  Article  shall  apply to Seller and Owner and their
respective affiliates,  subsidiaries,  successors and assigns. 
5.2 Marketing and  Development.  (1) Subject to the provisions of paragraph (10)
below, Purchaser shall have the exclusive right market,  promote, rent, exchange
and sell Purchaser's  Timeshare  Interests at all Seller Resorts  (including but
not limited to the Real  Property)  for the period  commencing  on the Effective
Date and  continuing  until  the  expiration  of the Term of this  Contract,  as
defined in Exhibit B annexed hereto and made a part hereof. This exclusive right
shall,  nonetheless,  be subject to (a) Seller's,  Owner's and their affiliates'
right to market,  promote  and sell their own  Timeshare  Interests,  as further
described and  restricted  below and (b) the  provisions of the fourth and fifth
sentences  of paragraph  (3) below.  
(2) A. Except as provided in the fourth and fifth  sentences  of  paragraph  (3)
below, or in Article XXVII hereof, for the Term of this Contract, neither Seller
nor Owner shall enter into any other marketing  agreement(s)  or  co-development
agreements with any third party (not including sales and marketing agents acting
on behalf of Seller/Owner) for the development,  marketing,  promotion,  rental,
exchange or sale of Timeshare Interest or interests therein, provided,  however,
that the terms of this sentence shall not restrict  Seller's or Owner's  ability
to enter into such agreements with respect to Seller Timeshare Interests,  which
shall be  governed  entirely  by Section  5.2(16)  hereof.  Notwithstanding  the
foregoing,  neither  Seller  nor Owner  shall be  prohibited  from  acquiring  a
property which, at the time of acquisition,  includes a parcel developed for the
sale of  on-site  Timeshare  Interests  at such  property.  If such  acquisition
occurs, the following conditions shall apply: (i) the on-site Timeshare Interest


                                       9
<PAGE>

developer  would not be entitled to any  marketing  rights or  opportunities  as
contemplated by this Contract and Seller/Owner shall not enter into a systemwide
or "global"  agreement for marketing  (similar to this  Contract);  (ii) any new
development site at the acquired property must be offered to Purchaser, pursuant
to the terms of paragraph (3) below;  and (iii)  Purchaser  shall be entitled to
market Purchaser  Timeshare  Interest at the acquired  property,  along with the
developer of Timeshare Interests at said property, and the Seller/Owner, subject
to any existing  exclusive  arrangements which exist at the time of acquisition.
Seller/Owner will exercise  reasonable  efforts to enable Purchaser to market at
the subject location (where the pre-existing  exclusive  arrangement applies) at
the earliest  possible  time. 
B.  In  the  event  Seller/Owner   acquires  a  property  (which  would  thereby
automatically  become a Seller  Resort)  which does not include,  at the time of
acquisition,  a parcel  developed for the sale of on-site  Timeshare  Interests,
then such property  shall be subject to all of the terms and  provisions of this
Contract.  Without limiting the generality of the foregoing, any portion of such
property conveyed by Seller/Owner to a third party,  other than Purchaser or its
Affiliates, (for hotel or other use) shall be subject to the prohibition against
marketing Timeshare Interest at such conveyed property, by the purchaser thereof
and any other party, except as permitted hereunder.  Moreover,  Seller shall use
reasonable  efforts to enable  Purchaser  to market and  promote  its  Timeshare
Interests within the improved  property.  
(3) A. For the period  commencing with the Effective Date, and continuing  until
the third  anniversary  of the  issuance to the  Purchaser  of the first  permit
authorizing  the start of construction of Units at a Real Property site acquired
by the Purchaser,  (the "Exclusive Development Period") Purchaser shall have the
exclusive right to acquire and develop sites for Purchaser  Timeshare  Interests
at all other Seller  Resorts (in addition to the Real  Property).  If, after the
expiration of the Exclusive  Development Period, Seller or Owner decides to make
any Seller Resort property (or portion thereof) available to a third party other
than an affiliate of Seller for  development  of Purchaser  Timeshare  Interests
(outside of the Real  Property,  as to which the Purchaser is hereby granted the
exclusive  right to develop)  then  Purchaser  shall have the further  exclusive
right for a period of thirty  (30) days from  receipt of a notice of Seller's or
Owner's  intent to  convey  any such  parcel to (a)  acquire  that  parcel  made
available  by Seller or Owner at a  purchase  price  equal to the  lesser of (i)
$18,000 per timeshare  Unit plus the Royalty Fee described in Section 4.3 hereof
or (ii) the purchase  price and terms which Owner intends to offer such property
(the "Asking Price"), or (b) decline to acquire the available parcel,  whereupon
Seller or Owner may sell such property  within 180 days of Purchaser's  response


                                       10
<PAGE>

hereunder  at a price  equal to or  greater  than  the  Asking  Price;  provided
however,  that  such  transaction  may  not be on  terms  less  advantageous  to
Seller/Owner  (than those  originally  presented to Purchaser)  unless and until
such less advantageous terms are first made available to the Purchaser, pursuant
to the procedures set forth herein.  In the event Purchaser  exercises its right
to purchase a parcel (other than the Real  Property  parcels  discussed  herein)
made  available  by Seller  hereunder,  pursuant  to  subparagraph  5.2(3)(a)(i)
hereof,  payment  of the  purchase  price to Seller  shall be made in five equal
installments  over a period of five (5)  years  from the date of  conveyance  of
title. In the event of a purchase pursuant to subparagraph  5.2(3)(a)(ii),  such
purchase  price shall be paid in accordance  with the terms of the Asking Price.
Owner and Seller  retain the right to permit the  purchaser  of any parcel under
this  paragraph  (3) to  market,  on a  non-exclusive  basis,  such  purchaser's
timeshare  product at such resort  only;  subject to  Purchaser's  right to also
market its product at said resort.  The provisions of this  paragraph  shall not
apply to any property  located  within the Park Avenue  Development  District in
South Lake Tahoe,  Nevada and  California.  

B. With respect to any Seller  Resort  acquired  (in fee title) by  Seller/Owner
after the  Effective  Date, a portion of which is made  available  for timeshare
development,  (excluding the Real Property and all Seller Resorts existing as of
the Effective Date),  such portion shall first be made available to Purchaser on
the same terms and conditions as would apply pursuant to  subparagraph A of this
paragraph  (3),  with the  following  exceptions:  (i) no Exclusive  Development
Period shall apply to any such post Effective Date acquisitions by Seller/Owner,
(ii) the  Purchaser  shall be given one  hundred  twenty  (120) days (in lieu of
thirty (30) days  pertaining to existing  Seller Resorts) to elect or decline to
acquire the subject parcel from the Seller/Owner and (iii) no more than one such
parcel in any twelve (12) month period  shall be made  available  for  timeshare
development by  Seller/Owner.  All other terms and conditions  pertaining to the
party's respective rights and obligations as set forth in subparagraph A of this
paragraph  (3) shall  continue to apply,  with respect to any such Seller Resort
acquired subsequent to the Effective Date.

(4)  Purchaser  shall have the right to promote,  maintain  and staff  marketing
desks at designated marketing areas at each Grand Summit Hotel owned/operated by
Seller or Owner as well as at other ski area  facilities  at Seller  (including,
for example, at base lodges,  summit lodges and similar locations);  hereinafter
the "Concierge/Marketing  Areas". In Seller's hotels, these areas will be in the
form of  Concierge  Desks,  at  which  Purchaser  shall  provide  concierge-type


                                       11
<PAGE>

services to Seller's guests. In addition to concierge type services (which shall
be the primary  purpose of such desks at Seller's  hotels)  Purchaser  may, on a
secondary  basis,  also market and promote  Purchaser  Timeshare  Interests  and
finally will  endeavor,  in  appropriate  circumstances,  to also promote Seller
ski-related  products,  including  Seller  Timeshare  Interests.   However,  the
marketing of Purchaser  Timeshare Interests at  Concierge/Marketing  Areas shall
consist  primarily of lead generation and similar  activities (as opposed to the
conducting of sales presentations).  The  Concierge/Marketing  Areas shall be at
high-traffic,  high profile locations within each facility,  such as adjacent to
the  front  desk,  check-in  area  or in the  main  lobby  area.  The  cost  and
responsibility  (including the  responsibility for staffing) for the maintenance
of such  Concierge/Marketing  Areas shall be borne by the Purchaser.  The design
and location of all  Concierge/Marketing  Areas must be mutually and  reasonably
acceptable  to Seller,  Owner and  Purchaser  and shall be  operated in a manner
consistent  with the  remaining  provisions  hereof and similar desks located at
premier MORI  locations.  The concierge  desks and marketing desks shall include
signage, in the form reasonably acceptable to Owner and Seller, identifying such
desks as Marriott  Vacation  Club  International  concierge  desks and marketing
desks, as applicable,  and shall be staffed by employees of Purchaser, and shall
distribute materials regarding both Purchaser's and Owner's Timeshare Interests.
(5) Purchaser shall have the right to provide marketing materials  pertaining to
its properties and timeshare  products in all  guestrooms,  transient  occupancy
facilities (including timeshare properties) and similar  accommodations owned or
managed by Seller or Owner or their respective subsidiaries and affiliates.  The
cost and content of such materials shall be the Purchaser's responsibility.  The
marketing  materials  contemplated  herein  shall be subject to  Seller's  prior
approval  and  satisfaction  by  Purchaser  of  Seller's  reasonable   marketing
standards,  which approval shall not be  unreasonably  withheld or delayed.  
(6)  Purchaser  shall have the right to directly  communicate  with Seller's and
Owner's guests and customers, regarding Purchaser's timeshare products. Any such
communication  shall be  subject to  Seller's  prior  approval,  based upon such
factors  as  the  form,   frequency,   general   content   and  timing  of  such
communication(s),  which approval, considering the aforementioned factors, shall
not be unreasonably  withheld or delayed. 
(7) Purchaser, Seller and Owner shall enhance their respective marketing efforts
on behalf of the others by creating an internal or  venture-specific  "currency"
for use by guests or  customers  while at either  parties  property and those of


                                       12
<PAGE>

said  parties   affiliates.   This  currency  shall  be  non-legal   tender  and
sufficiently  distinct in appearance to avoid confusion with actual U.S. (or any
other  sovereign's)  currency.  The purpose of this currency shall be to promote
the products and properties of the parties hereto by  facilitating  the purchase
process,  promoting  discounts to users of the currency,  generating interest in
such products and properties and generally  disseminating  information regarding
the parties hereto.  With respect to this currency  program the parties shall do
whatever is necessary to assure compliance with any and all applicable  federal,
state  and  local  statutes,   ordinances  or  regulations.   Moreover,  and  in
furtherance  thereof,  the parties will prepare and compile mutually  acceptable
"program  rules"  in order to set  forth  the  details  and  specific  terms and
provision of this currency  program,  including without  limitation,  the value,
volume allowed,  permitted use and circumstances under which the currency may be
disseminated.  
(8) Seller and Owner will (in addition to the Concierge/Marketing Areas referred
to above) provide space for the Purchaser to construct or supply one hospitality
structure  per  Seller  Resort  for use by  Purchaser  in  connection  with  the
marketing,  promotion,  sale  and  development  of  Purchaser's  properties  and
Timesharing Interests. The specific location of such hospitality structures will
be subject to the  reasonable  approval of all of the parties  hereto;  with the
general  understanding that they will be in high-traffic,  high profile areas at
each Seller Resort. Additional hospitality structures may be permitted at Seller
Resorts,  on a case by case basis,  and Seller and Owner agree to be  reasonable
with respect to the granting of their  approval of said  additional  hospitality
structures.   
(9)  Subject  to  the  limitations  set  forth  herein,  including  specifically
Purchaser's and it's Affiliate's right to market and promote their own Timeshare
Interests,  Seller  shall  be  entitled  to  market  and  promote  its  ski- and
golf-related products,  which may include Seller's thirteen (13) week or greater
Timeshare  Interest on an exclusive  basis,  at resorts owned and  controlled by
Purchaser.  This shall not include, however, any resort where the Purchaser does
not  enjoy  a  controlling  number  of  Association   Directorship  votes  or  a
controlling  percentage of common elements,  even in the event that Purchaser or
an affiliate of Purchaser is the managing agent of said resort property. At such
properties,  Purchaser will make a reasonable effort to secure the Association's
consent to such marketing activities by the Seller. In addition, Seller shall be
entitled  to market and  promote  its  ski-related  products,  which may include


                                       13
<PAGE>

Seller Timeshare Interests,  at other locations,  such as retail outlets,  where
Purchaser controls such locations and where such activities by Seller or a third
party is permitted, subject to the right of Purchaser and its Affiliates to also
market at such  locations.  Seller's/Owner's  right to market and promote  shall
include, without limiting the generality of that right, (i) the right to provide
marketing  materials  pertaining  to  Seller's/Owner's  resorts and  products in
guestrooms  at  such  resorts,  (ii)  the  right  to  display  and  provide  for
distribution  from Purchaser's  controlled  concierge  facilities  marketing and
promotional materials regarding Seller's/Owner's resorts and products, and (iii)
the  right  to  directly  communicate  with  Purchaser's  guests  and  customers
regarding   Seller's   ski-  and   golf-related   products   (but  not,  in  any
circumstances,  regarding  Timeshare  Interests),  provided that Seller's rights
under this clause (iii) shall be subject to Purchaser's  prior  approval,  based
upon such  factors as the form,  frequency,  general  content and timing of such
communication.  Seller shall retain responsibility for the cost, content, supply
and  display of any such  material  which it desires to exhibit at a  qualifying
MORI property. Seller's rights hereunder shall be subject to its satisfaction of
reasonable marketing and other standards required by Purchaser.  Purchaser shall
be reasonable and prompt with respect to its determination  concerning  Seller's
satisfaction of such standards.  
(10)  Notwithstanding  anything  to the  contrary  set  forth in this  Contract,
Purchaser shall have the right to market any of its products,  including but not
limited to its Timeshare  Interests,  pursuant to a co-development  agreement or
joint  marketing  agreement  on a  "global",  system-wide  or  networking  basis
(similar  hereto) in the  following  instances:  (i) at any  resort or  property
outside  of the  continental  United  States;  (ii) at any  resort  or  property
acquired  by virtue  of the  acquisition  (through  merger  or  otherwise)  of a
controlling  interest  in the  owner of said  property;  (iii) at any  resort or
property  owned or operated by an affiliate or subsidiary  of Purchaser,  unless
Purchaser  has  a  controlling   interest  therein.  [An  example  of  the  last
restriction  includes all of Purchaser's  lodging  affiliates,  such as The Ritz
Carlton  Company.],  and (iv) at a resort or property acquired by Purchaser in a
single,  individual transaction,  which does not create, or constitute part of a
system or network of  properties.  Any such  agreement as provided for hereunder
shall not limit,  curtail or compromise  Purchaser's right of exclusivity as set
forth herein.  In the event Purchaser  enters into any "global",  system-wide or
networking  co-development  agreement or joint marketing  agreement with a third
party which is not  expressly  permitted  under  clauses (i) through (iv) above,
then the rights of the  Purchaser  set forth in Sections  5.2(1) and (2) and any
exclusive rights of the Seller shall be discontinued and the remaining terms and


                                       14
<PAGE>

provisions  set  forth  herein,   regarding  marketing,   shall  continue  on  a
non-exclusive  basis, and the Exclusive  Development Period set forth in Section
5.2(3) shall have been deemed to have expired.  
(11) Seller and Purchaser will endeavor,  in good faith, to cooperatively create
a mutually  beneficial program whereby the sales and marketing personnel of each
party hereto will be trained, encouraged and incentivized to refer prospects who
are either not qualified or not interested in such party's  Timeshare  Interests
to the other party's sales personnel.  Even where affirmative  referrals are not
appropriate,  "negative  marketing"  or  "marketing-off"  of the  other  party's
product will be avoided,  and a sales and  marketing  training  program  jointly
developed by Seller and Purchaser will be employed to achieve this goal. Another
key  component of this effort  shall be the  creation of a jointly  designed and
mutually  acceptable  commission or other payment  structure  which is conducive
(from a sales standpoint) to the cross-referral of appropriate  prospects.  This
program will include appropriate monitoring devices and opportunities to further
the  goals of  Seller  and  Purchaser  to create  mutually  beneficial  referral
practices  pertaining  to each party's  respective  product by the other party's
sales and marketing personnel.  

(12) Seller and Purchaser will endeavor, in good faith, to cooperatively develop
and  implement,  as soon as reasonably  practicable,  a joint  "vacation  store"
program to the benefit of both parties.  The vacation store program will involve
the joint operation by the parties of a retail  location in high traffic,  urban
and  suburban  areas such as malls.  The  parties  will  jointly  promote  their
respective  Timeshare  Interests  from such  locations,  as well as each other's
Timeshare Interests, and will share equally in all expenses associated with such
locations.  The  parties  will test the  vacation  store  program in one or more
mutually  agreed upon venues and, if successful,  will develop and implement the
program as agreed on a  multi-site  basis.  The only  obligation  of the parties
created under this Contract with respect to the vacation  store program shall be
a good faith obligation to develop and implement a definitive agreement for such
program,  the terms of which are acceptable to both Seller and  Purchaser.  

(13) (1) For the Term of this  Contract,  Owner  shall be  entitled  to  include
marketing  materials  for  Owner's or Sellers  ski-related  products,  which may
include Seller's thirteen (13) week or greater Timeshare Interest, but shall not
pertain  exclusively  or  primarily to any  Timeshare  Interest  within  certain
distributions by Purchaser of written marketing materials to Purchaser's clients
or  prospective  clients.  Owner's  rights  hereunder  shall be  subject  to its


                                       15
<PAGE>

satisfaction of marketing and other reasonable  standards required by Purchaser.
(2) For the Term of this  Contract,  Purchaser  shall  be  entitled  to  include
marketing   materials  for  Purchaser's   Timeshare   Interests  within  certain
distributions  by Owner of written  marketing  materials  to Owner's  clients or
prospective  clients.  Purchaser's  rights  hereunder  shall be  subject  to its
satisfaction of marketing and other reasonable  standards required by Owner. (3)
The  specific  distributions  of either  party,  with  which  the other  party's
marketing  collateral  may be  included,  shall be  determined  on the  basis of
appropriateness  of the other  party's  materials (in the context of the subject
distribution),  the timing of the  distribution,  avoidance  of an  unreasonable
burden to the "distributing party," expectation of return  (profitability),  and
other  similar  factors  mutually  agreeable to the parties.  Both parties shall
cooperate fully with one another to provide  effective  analysis of, and use of,
their  respective  databases,  including  without  limitation,   demographic  or
geographic selection of distributions.  Each party hereunder will be responsible
for the costs of their respective marketing  collateral.  The distribution costs
(for those cases where both parties marketing collateral is included in the same
distribution) shall be borne proportionally between Owner and Purchaser. 
(14) In the event Seller or Owner shall seek to offer or market a site or parcel
in connection with the development,  construction,  conversion or operation of a
currently owned property (or one in which Seller or Owner acquire an interest in
the  future)  for  traditional  hotel  use  (excluding  Timeshare  Interests  as
otherwise covered herein),  Seller or Owner shall first offer the opportunity to
conclude such a transaction to the Purchaser and its  Affiliates.  The Purchaser
shall have a reasonable  period of time within which to review the  opportunity.
Should  Purchaser  initially  decline to develop  the site or parcel,  Purchaser
shall have a  continuing  right to be kept  apprised  with respect to a proposed
development  under this  paragraph,  and Seller and Purchaser  shall continue to
negotiate in good faith in order to attempt to conclude the subject transaction.
Any such  development  with a third party shall be subject to the  marketing and
other restrictions set forth in this Contract. 
(15) Purchaser's  marketing rights hereunder shall be primarily  directed to the
promotion  of  Purchaser's  relationship  with  Seller/Owner  and  the  sale  of
Purchaser  Timeshare  Interests  located at the Seller  Resorts,  secondarily to
market  and sell  MORI  products  located  elsewhere;  provided,  however,  that


                                       16
<PAGE>

Purchaser's  rights hereunder shall not include the right to market,  promote or
sell any  Timeshare  Interest  associated  with, or located at, a ski resort not
owned by  Seller/Owner,  except to the extent  included in  Purchaser's  general
marketing materials.  

(16) In the event  Seller or Owner  shall  seek to enter into any  marketing  or
codevelopment  agreement with respect to Seller Timeshare  Interests,  Seller or
Owner shall first offer the  opportunity  to enter into such an agreement to the
Purchaser.  The Purchaser shall have a reasonable period of time within which to
review the opportunity. Should Purchaser initially decline to enter into such an
agreement,  Purchaser  shall have a continuing  right to be kept  apprised  with
respect to a proposed  agreement under this paragraph,  and Seller and Purchaser
shall  continue to  negotiate  in good faith in order to attempt to conclude the
subject transaction. The parties acknowledge, however, that Seller or Owner may,
in the exercise of their reasonable  business  judgment,  need to terminate such
negotiations  in order to enter  into more  extensive  negotiations  with  other
potential parties, and the terms of this paragraph (subject to Purchaser's right
to  receive  notification  and a  proposal  overview)  shall not  restrict  such
ability. Any such agreement with a third party shall be subject to the marketing
and other  restrictions set forth in this Contract.  

5.3 Resort Programs (1) Ski Lift Tickets.  Purchaser agrees to purchase not less
than 14,000 full day  transferable ski lift tickets per six (6) month ski season
during the period in which Timeshare  Interests are being actively  marketed and
sold (i.e.  during which Royalty Fees are being  generated  under Section 4.3 of
this  Contract) by Purchaser at any of the five (5) parcels  comprising the Real
Property  ("Sales  Period"),  pursuant to the terms of the Ski and Golf  Package
Agreement entered into contemporaneously  herewith. For example, if Royalty Fees
are being generated at two (2) Seller Resorts, Purchaser shall only be obligated
to purchase  28,000  ski-lift  tickets  during  such  period.  (2) Golf  Rounds.
Purchaser  shall  purchase  from Seller and Seller shall sell to Purchaser  Golf
Rounds,  as defined in, and on the terms and conditions set forth in the Ski and
Golf Package  Agreement.  (3) Owners of  Purchaser  Timeshare  Interests  shall,
through their respective owners  associations,  be entitled to purchase ski lift
ticket packages and golf rounds  packages  either directly from  Seller/Owner or
through either of them, based on mutually agreeable terms to be determined.

                               ARTICLE VI SURVEY

6.1 Survey.  Owner  shall,  at its sole cost and  expense,  engage a surveyor or
engineer  licensed  in each  state  in which a parcel  of the Real  Property  is
located to  prepare a parcel  map,  subdivision  plat or other  appropriate  map
("Maps"),  fully  describing  each parcel of the Real  Property and suitable for
recording  in the Land  Records  office for each county in which a parcel of the
Real  Property  is  situated.  Such Maps or  descriptions  shall  conform to the
requirements  for an ALTA Form B Owners  Policy.  Any  revisions to such Maps or


                                       17
<PAGE>

descriptions  (other than corrections of same) shall be at Purchaser's  expense.
Owner shall further obtain,  prior to the Conveyance Date of each parcel of Real
Property,  final permission from the appropriate  government  agency(ies) of the
recordation of the Map or description for each such parcel,  all upon conditions
satisfactory to both Purchaser and Owner.  

The parties  hereto  acknowledge  that the  depictions  of the Real  Property in
Exhibit A hereto are not intended to reflect exact  boundary  lines or distances
but  rather  to  provide  a  general  identification  of  the  subject  parcels.
Accordingly,  all parties agree to endeavor to make such  adjustments  as may be
necessary  to more fully  define the metes and bounds of each parcel  comprising
part of the Real Property, in keeping with the Contemplated Use of the property,
as discussed in Article XVIII of this Contract.

                               ARTICLE VII TITLE

7.1 Title  Commitment.  Not later than  sixty  (60) days  after the  Purchaser's
request with respect to each Real Property  parcel,  and provided that the legal
description of the parcel has been  adequately  identified,  Owner shall furnish
Purchaser  the  commitment  of the Title Insurer to issue an ALTA Form B Owner's
Policy  of  title   insurance   covering   each  parcel  of  the  Real  Property
(individually "Title Commitment"), together with legible copies of all documents
appearing as exceptions to title  insurance  coverage in the case of each parcel
of Real  Property.  Not later than ninety (90) days after  receipt of each Title
Commitment,  Purchaser  shall  notify Owner in writing of those  exceptions  set
forth on Schedule B to each Title  Commitment which Purchaser will not accept as
permitted  exceptions to title.  Any item on Schedule B to each Title Commitment
or any state of facts  shown on any  survey to which  Purchaser  does not object
within such ninety (90) days shall  become  permitted  exceptions  to title (the
"Permitted Exceptions"). Mortgages, deeds of trust, mechanics' liens, tax liens,
and judgment liens affecting any parcel comprising part of the Real Property are
not Permitted  Exceptions  (regardless  of whether  specifically  objected to by
Purchaser  or not) and must  therefore  be  cleared by Owner at or prior to each
parcel's respective  Conveyance Date. If Purchaser timely disapproves of certain
other  exception(s),  Owner shall have the right to cure any  disapproved  items
within thirty (30) days of Owner's receipt of Purchaser's objection. Owner shall


                                       18
<PAGE>

notify  Purchaser of its election in writing  within five (5) days after receipt
of Purchaser's  notice.  If Owner elects not to cure such disapproved  items, or
elects  to cure and  fails to do so,  Purchaser  may  elect,  on or  before  the
Conveyance  Date to any  parcel of the Real  Property  which is the  subject  of
Purchaser's notice, to either (i) terminate this Contract, to the extent of that
specifically affected parcel of Real Property, in which event Purchaser shall be
entitled to Liquidated Damages, or (ii) accept title such as Owner is willing to
convey,  with the further right to deduct from the next  installment of the cash
portion  Purchase  Price the cost of removing  such  objections,  provided  such
objection is of a nature where removal is possible by payment of a predetermined
liquidated  amount.  If that is not the case,  Purchaser  may still  accept such
title as Seller can convey,  but no  adjustment  to the Purchase  Price would be
granted to Purchaser;  or (iii) select,  in cooperation  with  Seller/Owner,  an
alternate  parcel at such Seller Resort in accordance with the provisions of the
definition  of Real  Property  as well as Article  XIII  hereof.  Any  objection
arising after Purchaser's notice to Seller or Owner pursuant to this Section may
be referred to Owner for  disposition  as set forth  herein,  regardless of when
(after  Purchaser's  initial  notice)  such  objection  arises,  up  to  and  at
Conveyance Date for the subject parcel.  

7.2 Title  Policy.  Upon the transfer of title to each parcel on its  respective
Conveyance  Date,  Owner shall cause the Title Insurer to issue an updated Title
Commitment to insure to Purchaser's  fee simple title to each parcel of the Real
Property,  subject only to the Permitted  Exceptions  and the  restrictions  set
forth in Article XXVII hereof.  On or before the Conveyance Date for each parcel
of the Real Property,  Owner shall satisfy all  conditions  stated therein to be
satisfied in order for Title Insurer to issue the Title Policy.  The cost of the
Title  Policy,  and  any  endorsements  therein,   consistent  with  Purchaser's
contemplated use of the Property,  as defined herein, shall be paid by the party
customarily responsible for the payment therefor at each location where the Real
Property parcels are situated.

                                  ARTICLE VIII
                   POSSESSION, PRORATIONS AND CLOSING EXPENSES
8.1 Possession.  Sole,  exclusive,  and vacant  possession of each parcel of the
Real Property shall be delivered to Purchaser on the date on which title to each
respective  parcel is conveyed to the  Purchaser.  

                                       19
<PAGE>

8.2  Prorations.  General  and special  real estate and other ad valorem  taxes,
affecting the subject  parcel of Real Property for the year of conveyance  shall
be prorated as of the Conveyance  Date based upon the most recent  ascertainable
amounts of each such item. Any such taxes prorated on an estimated  basis on the
Conveyance  Date shall be adjusted by the parties when and as the actual  amount
of such item becomes known. Any such adjustment shall be effected not later than
fifteen (15) days following final  determination  of the amount of such item and
demand by the party to whom credit is due. All liens or assessments,  special or
otherwise,  imposed  against the Real Property as of the Conveyance Date and not
resulting  from the acts or omissions of Purchaser  shall be paid by Owner.  

8.3 Closing Expenses. Owner shall pay and be responsible for the following costs
associated with the transfer of the Development Rights and the conveyance of the
Real  Property,  (i) the cost of preparing and recording the Deeds and any other
instruments,  (ii) the cost of  curing  title  objections,  and  (iii) any other
expenses  customarily  charged to Seller  (Owner)  in  connection  with  similar
transactions,   except  as  otherwise  provided  herein.   Except  as  otherwise
specifically  set forth  herein,  the fees and  expenses of Seller's  designated
representatives,  accountants and attorneys  shall be borne by Seller,  the fees
and expenses of Owner's  designated  representatives,  accountants and attorneys
shall be borne by Owner,  and the fees and  expenses of  Purchaser's  designated
representatives,  accountants  and attorneys  shall be borne by  Purchaser.  The
Title Policy  premium and the cost of stamp taxes or other  transfer taxes shall
be paid by the party which customarily pays such expenses based on the practices
where each Real Property parcel is situated.  Both parties  acknowledge that the
current  practice  or  convention  is for a Seller to pay for title  charges and
transfer expenses  relating to properties to the west of the Mississippi  River,
and for the  Purchaser to pay such expenses  relating to properties  east of the
Mississippi River.

                                   ARTICLE IX
                              AFFIRMATIVE COVENANTS
9.1 Transactions and Encumbrances  Affecting the Development  Rights of the Real
Property.  From the date  hereof  to the date on which  the last  parcel of Real
Property is conveyed to the Purchaser, none of Purchaser, Seller nor Owner shall
do, suffer, permit or agree to do any of the following:
 


                                       20
<PAGE>

     9.1.1 Enter into any transaction  affecting the  Development  Rights or the
     Real Property  inconsistent  with, or in violation of, this Contract or out
     of the ordinary course of business; or

     9.1.2 Sell, lease, encumber or grant any interest in the Development Rights
     or Real Property, or any part thereof, in any form or manner whatsoever, or
     otherwise perform or permit any act which will diminish or otherwise affect
     Purchaser's interest under this Contract or which will prevent Seller's and
     Owner's full  performance  of their  obligations  hereunder;  provided that
     Seller or Owner may cause to be placed a mortgage lien on the Real Property
     parcels,  so long as such lien is satisfied  and removed of record prior to
     the parcel's  Conveyance Date;  

     9.1.3 Except as otherwise provided in this Contract,  seek, permit, approve
     or consent to, with respect to the Development  Rights or the Real Property
     (i) any zoning  change,  (ii)  annexation  or  subdivision,  (iii) erect or
     demolish any structures on the Real Property,  or (iv) deposit on or remove
     from the Real  Property  any soil,  rocks,  plantings  or other  materials,
     without the other party's prior written  request or consent,  which consent
     may be granted or withheld by such other party in its sole discretion.  

9.2  Purchaser's  Access.  From the date  hereof  to the date on which  the last
parcel of Real  Property is conveyed  to the  Purchaser,  Seller and Owner shall
permit the  Purchaser,  and  representatives,  agents,  employees,  contractors,
appraisers,  architects and/or engineers  designated by Purchaser access to, and
entry upon,  the Real  Property to examine,  inspect,  measure and test the Real
Property for the purposes set forth in Articles X, XI and XII hereof and for all
other reasonable  purposes.  Purchaser shall indemnify and hold Seller and Owner
harmless from and against any and all actions or demands arising from or related
to  any  incident,  occurrence,  damage,  personal  injury  or  property  damage
resulting from Purchaser or Purchaser's  agents,  employees or  contractors,  or
anyone  on  Purchaser's   behalf   performing  the   Purchaser's   examinations,
inspections,  measurements  and testing of and on the Real  Property.  Purchaser
also  agrees that upon the  completion  of any such  examinations,  inspections,
measurements  or tests that the Real  Property  will remain in or be restored to
substantially  the same  condition  as before  such  examinations,  inspections,
measurements or tests.  
9.3 Other  Agreements.  Until the  conveyance of the last parcel  comprising the
Real  Property  to the  Purchaser,  Seller  and  Owner  shall  comply  with  all
agreements  affecting  the Real  Property  which  survive the  Closing  Date and


                                       21
<PAGE>

Conveyance  Dates of the  transfers  of title,  and shall  deliver to  Purchaser
immediately upon receipt, copies of all material notices of default under any of
the foregoing served upon Seller or Owner.  

9.4 Taxes.  Owner shall pay when due all real estate and other ad valorem  taxes
assessed  against the Real  Property and  applicable  to the period prior to the
conveyance of title to each respective Real Property parcel.

                                    ARTICLE X
                       REPRESENTATIONS OF SELLER AND OWNER
10.1  Representations  of Seller  and Owner.  To induce  Purchaser  to  execute,
deliver and perform under this Contract,  Seller and Owner hereby  represent and
warrant  the  following  on and as of the  Effective  Date  and on and as of the
Closing  Date,  and on and as of the  Date of  Conveyance  of  title to the last
parcel comprising the Real Property.

     10.1.1 Accuracy of Representations. All representations of Seller and Owner
appearing in this and other  Articles and Sections of this Contract are true and
correct,  to the best of Seller's and Owner's  knowledge and without  additional
investigation in each case.

     10.1.2 Recapture Agreements. To the best of Seller's and Owner's knowledge,
there are no obligations in connection with the  Development  Rights or the Real
Property  involving  a refund for sewer  extension,  oversizing  utility  lines,
lighting or like expense or charge for work or services done upon or relating to
the Real Property (so called "recapture  agreements")  which will bind Purchaser
or the Real  Property  after the Closing Date or the Date of Conveyance of title
to any parcel comprising the Real Property.  Moreover,  the Real Property is not
the Subject of, or entitled  to, any real estate tax  exemption  or abatement or
other tax holiday of any kind. 10.1.3 Roadwork and Access. There is no agreement
or  undertaking  or bond with any  governmental  agency or  private  association
respecting  construction  or  repaving  of any street or road,  acceleration  or
deceleration lane or access or street lighting,  nor is Seller or Owner aware of
any facts or  circumstances  which would  result in  termination  of the current
access to and from any parcel  comprising the Real Property.  

     10.1.4  Donations.  There are no  donations  or payments to or for housing,
schools,  parks, fire departments or any other public entity or facilities which
are required to be made in respect to any parcel  comprising  the Real Property,


                                       22
<PAGE>

and which will be required on or after the  conveyance  of title to each parcel;
except to the extent that the donation or payment has been actually disclosed to
Purchaser and is a usual and ordinary donation required of all participants in a
master planned area.  

     10.1.5  Possession  and Use.  Unless  contradicted  by any of the Permitted
Exceptions,  there are no persons who have possessory rights or rights of use in
respect  to any  parcel  comprising  the Real  Property  in the  future.  

     10.1.6 Authorization. Seller and Owner each has full capacity, right, power
and  authority  to  execute,  deliver and perform  under this  Contract  and all
documents to be executed by Seller or Owner  pursuant  hereto,  and all required
corporate action and approvals  therefor have been duly and previously taken and
obtained. The individuals signing this Contract and all other documents executed
or to be executed  pursuant hereto on behalf of Seller or Owner are and shall be
duly  authorized  to sign the same on Seller's  and  Owner's  behalf and to bind
Seller  and Owner  thereto.  This  Contract  and all  documents  to be  executed
pursuant  hereto  by  Seller  and  Owner  are and  shall  be  binding  upon  and
enforceable  against Seller and Owner in accordance with their respective terms.

     10.1.7 Litigation.  Neither Seller nor Owner has been served with notice of
any claims,  causes of action or other litigation or proceedings  pending or, to
the best of their knowledge,  threatened in respect to the Development Rights or
to the Ownership,  operation or environmental  condition of the Real Property or
any part thereof  (including  disputes with  governmental  authorities,  utility
companies, Contractors, nearby or adjoining land Owners or suppliers of goods or
services).  

     10.1.8  Violations.   There  are  no  violations  of  any  health,  safety,
pollution, environmental, zoning or other laws, ordinances, rules or regulations
with respect to the Real Property  which affect the use,  development,  sale and
enjoyment  of the Real  Property  and which  have not been  heretofore  entirely
corrected.  In the event any such violations  exist,  Seller or Owner shall cure
and remove same of record prior to the  conveyance  of title to each  respective
parcel to  Purchaser.  

     10.1.9  Condemnation.  There is no  existing,  pending  or  threatened  (i)
condemnation of any part of the Real Property, (ii) widening, change of grade or
limitation  on use of streets,  roads or highways  abutting  the Real  Property,
(iii)  special tax or assessment to be levied  against the Real  Property,  (iv)


                                       23
<PAGE>

change in the zoning  classification  or permitted use of the Real Property,  or
(v)  change in the basis of the tax  assessment  of the Real  Property.  

     10.1.10  FIRPTA  Withholdings.  Purchaser  will  have no  duty  to  collect
withholding  taxes from Seller or Owner  pursuant to the Foreign  Investors Real
Property Tax Act of 1980, as amended  ("FIRPTA").  

     10.1.11 Material Facts.  There are no facts or circumstances  not disclosed
in writing to  Purchaser of which  Seller or Owner has  knowledge  which have or
would have a material  adverse  effect upon the  Development  Rights or the Real
Property.  Seller and Owner agree to notify Purchaser  immediately in writing of
such  facts or  circumstances  if  Seller  or Owner  becomes  aware of the same.

     10.1.12 Collateral. Seller is the actual and beneficial owner of all of the
Shares of stock in Blunder Bay  Development,  Inc. and the 1000 shares of common
stock referred to in Article IV represent all of the shares of said Company. The
Shares are all of the outstanding Shares of Blunder Bay Development, Inc.; there
are no outstanding  options,  warrants,  preferred  shares,  preference  shares,
bearer  shares or any other  securities  convertible  into or  exchangeable  for
shares of Blunder Bay Development,  Inc.; in addition,  no rights of first offer
or  first  refusal  in the  Shares  have  been  granted.  The  Shares  are  duly
authorized,  validly  issued,  fully paid and  nonassessable.  As of the Closing
Date, all of the Shares will be owned directly by Seller,  free and clear of all
liens. No new or additional  shares in the Company will be issued, of any class,
for as long as the  Collateral  is in  Purchaser's  possession.  The  Lease,  as
defined in said  Article IV is in full force and effect  without any defenses or
set-offs  available to the lessee. Any amendment or modification to the Lease on
or after  December 31, 1997 and prior to the return of the  Collateral to Seller
made  without  Purchaser's  consent,  which  consent  shall not be  unreasonably
withheld,  shall, at Purchaser's election,  constitute a breach of this Contract
by Seller and Owner.  The lease has not been  modified in any manner  except for
that certain lease  amendment  dated December 31, 1997 (the "Lease  Amendment").
The Seller and the Company each represent,  warrant and covenant that they shall
not (without  Purchaser's  consent which shall not be  unreasonably  withheld or
delayed)  exercise the option to purchase the underlying  real property which is
the subject of the lease for as long as the collateral is hereby pledged to, and


                                       24
<PAGE>

in the possession of, the Purchaser. On or before the Closing Date, Seller shall
be required to secure a fully  executed  estoppel  certificate  (as discussed in
Section 17.2.8) signed by all appropriate parties including, but not limited to,
the  Company.  Seller and Owner  will,  pursuant  to the terms of said  estoppel
certificate,  provide additional collateral if requested by the Purchaser, based
on a good  faith  belief  that  the  value  of the  Collateral  has  diminished.
Moreover,  Seller  and  Owner  agree  to take  any and all  further  actions  as
Purchaser  reasonably  requires to evidence the Collateral,  perfect Purchaser's
interest  therein or  provide  substitute  collateral,  all  pursuant  to and as
contemplated  by this Contract.  

     10.1.13 As of the Effective  Date, no portion of any Seller Resort is being
utilized,  developed or marketed for the sale of Purchaser  Timeshare  Interest,
nor has Seller or Owner conveyed a parcel of its Seller Resorts to a third party
for the development,  sales and marketing of Purchaser Timeshare Interest.  

     10.2 Seller's and Owner's Covenant. Seller and Owner shall notify Purchaser
promptly  in  writing if Seller or Owner  becomes  aware of any  transaction  or
occurrence  prior to the Closing Date or any  Conveyance  Date  pertaining  to a
specific parcel of the Real Property which would make any of the representations
of Seller or Owner  contained  in this  Article or  elsewhere  in this  Contract
untrue in any  material  respect.  Moreover,  Seller and Owner shall not take or
permit any action or inaction that would adversely affect or diminish or cause a
devaluation of the Development Rights or change the physical  characteristics of
the Real  Property or that would change or  contradict  or render  incomplete or
breach any of Seller's or Owner's representations or warranties. 

     10.3  Conditions  Precedent  to  Seller/Owner   Obligation  to  Close.  The
obligations of Seller/Owner to close the transaction contemplated hereby, or any
portion  thereof,  is,  at  Seller/Owner's   option,   further  subject  to  all
representations  and  warranties of Purchaser  contained in this Contract  being
true and correct on and as of the  Effective  Date and the Closing  Date and the
Conveyance Date of each of the individual  parcels  comprising the Real Property
and all obligations of Purchaser to have been performed on or before the Closing
Date and Conveyance Dates having been timely and duly performed.

                        ARTICLE XI ENVIRONMENTAL MATTER

     11.1  Environmental  Representations.  Except  as  may  be  revealed  by an
Environmental  Assessment,  on and as of the Effective Date and on and as of the
date title to each parcel comprising the Real Property is conveyed to Purchaser,
Seller  represents  and  warrants  that with  regard to each  parcel of the Real
Property:  

                                       25
<PAGE>

     11.1.1 No part of the Real  Property is in violation  of any  Environmental
Laws;
 
     11.1.2 No underground  storage tanks (or piping other than water and sewer)
are or have been present on the Real Property or on adjacent property within 200
yards of the Real  Property;  

     11.1.3 Neither the Real Property nor any part thereof, or adjacent property
within 200 yards of the Real  Property,  have been used as a sanitary  landfill,
waste  dump  site  or for  the  treatment,  storage  or  disposal  of  Hazardous
Materials;  

     11.1.4 No Release of Hazardous Materials has occurred from or upon the Real
Property,  nor has any Release of Hazardous  Materials  migrated  from  adjacent
property onto any parcel  comprising  part of the Real Property;  and 

     11.1.5 The entire Real  Property is free of any  Hazardous  Materials  that
would trigger  response action under any  Environmental  Laws or existing common
law theory based on, among  others,  nuisance,  negligence,  waste,  trespass or
strict liability  ("Common Law Theories").  

     If any  representation  made in this Article XI is in any manner inaccurate
(a  "Breach"),  and if  such  Breach  gives  rise  to or  results  in  liability
(including,  but not limited to, a response  action,  remedial action or removal
action) under any  Environmental  Laws or any Common Law  Theories,  or causes a
significant  effect on public  health,  and if  Seller  or Owner  shall  fail to
promptly  take or cause to be taken any and all remedial  and removal  action as
required by law to clean up the Real  Property,  mitigate  exposure to liability
arising therefrom,  and keep the Real Property free of any lien imposed pursuant
to any  Environmental  Laws as a result of such Breach (the "Remedial  Action"),
then Purchaser may elect to terminate this Contract,  on a prospective basis and
to  the  extent  any  further  rights  or  obligations  exist  (apart  from  the
obligations  under the Note and those regarding accrued (for parcels acquired by
Purchaser) but unpaid  portions of the Purchase Price, as well as payment of the
Royalty Fee). If any such Breach exist or if any required remedial action is not
taken,  such Breach or inaction  shall not impact  Purchaser's  rights under the
Contract to the extent or  pertaining  to any other parcel (not  impacted by the
Breach or failure to undertake  Remedial  Action)  comprising the Real Property.
The  termination  of this Contract as to a specific  parcel of the Real Property
shall result in  Purchaser's  right to Liquidated  Damages.  

     11.2 Environmental Indemnity. Additionally, but not in lieu of Seller's and
Owner's  affirmative  undertakings  set forth in Section 11.1,  Seller and Owner


                                       26
<PAGE>

agree to indemnify,  defend and hold harmless Purchaser from and against any and
all debts, liens, claims,  causes of action,  administrative orders and notices,
costs (including, without limitation,  response and/or remedial costs), personal
injuries, losses, damages, liabilities,  demands, interest, fines, penalties (to
the  maximum  extent  permitted  by  law)  and  expenses,  including  reasonable
attorney's fees and expenses,  consultants'  fees and expenses,  court costs and
all other out-of-pocket expenses,  suffered or incurred by Purchaser as a result
of (i) the  presence of  Hazardous  Materials  in, on, at,  about or beneath any
portion of the Real  Property,  which are  established  as having been caused by
Seller,  Owner or their  agents or others  acting on their  behalf,  or ii) with
respect to any portion of the Real Property,  the violation of any Environmental
Laws or existing Common Law Theories which are established as having been caused
by  Seller,  Owner or their  agents or others  acting on their  behalf.  

     11.3 No Notices.  Neither Seller nor Owner has received any notice that any
part of the Real Property is located within an area that has been  designated by
the Federal  Emergency  Management  Agency,  the Army Corps of  Engineers or any
other governmental body as being subject to special hazards.  

     11.4 Environmental  Assessment.  As soon as practicable after the Effective
Date, Purchaser may select and retain an environmental  consultant to perform an
"Environmental  Assessment"  of each parcel  comprising  the Real  Property,  at
Purchaser's sole cost and expense, (consisting of a phase one assessment and any
further  assessment  or testing  that may be  recommended  by the  environmental
consultant).  The  scope  and  form of the  Environmental  Assessments  shall be
determined by Purchaser in its sole  discretion  and may include soil and ground
water  analyses.  Seller and Owner shall on or before the Closing Date,  provide
Purchaser with its most recent copies of Environmental Assessment Reports (Phase
I) for each parcel comprising the Real Property.

                                   ARTICLE XII
                          REPRESENTATIONS OF PURCHASER

     12.1  Representations of Purchaser.  To induce Seller and Owner to execute,
deliver and perform under this Contract,  Purchaser hereby  represents to Seller
and Owner on and as of the Effective Date and on and as of the Closing Date, and
on and as of the Date of Conveyance of title to each parcel  comprising the Real
Property as follows:

                                       27
<PAGE>
   
     12.1.1  Accuracy  of  Representations.  All  representations  of  Purchaser
appearing in this and the other  Articles and Sections of this Contract are true
and  correct  to the  best  of  Purchaser's  knowledge  and  without  additional
investigation in each case. 

     12.1.2  Authorization.  Purchaser  has  full  capacity,  right,  power  and
authority to execute, deliver and perform under this Contract, the Note, and all
other documents to be executed by Purchaser  pursuant  thereto,  and, except for
obtaining the  authorization  of its parent  corporation as described in Section
13.1 (which  approval  has been  obtained  for  execution  of this  Contract and
delivery of the Note;  provided that such approval shall not limit or compromise
the  provisions  of Section  13.1.4  concerning  any or all of the Real Property
parcels),  all required  corporate actions and approvals therefor have been duly
taken  and  obtained.  The  individuals  signing  this  Contract  and all  other
documents  executed or to be executed pursuant hereto on behalf of Purchaser are
and shall be duly authorized to sign the same on Purchaser's  behalf and to bind
Purchaser  thereto.  This  Contract and all  documents  to be executed  pursuant
hereto  by  Purchaser  are and shall be  binding  upon and  enforceable  against
Purchaser in accordance with their respective terms.

                                  ARTICLE XIII
                         CONDITIONS PRECEDENT, REMEDIES

     13.1  Conditions  Precedent  to Closing.  The  obligation  of  Purchaser to
acquire title to each parcel of the Real Property, is subject to satisfaction of
each of the following conditions  precedent,  the satisfaction of which shall be
determined  solely by  Purchaser  in the  exercise  of its  reasonable  judgment
(unless a different standard is stated).  Any of these conditions  precedent may
be waived in Purchaser's sole discretion.
 
     13.1.1  Suitability  of  Real  Property.   Purchaser  shall  have  obtained
architectural,  engineering and environmental  studies showing that the physical
aspects and  condition  of each parcel of the Real  Property are  acceptable  to
Purchaser  and suitable for  Purchaser's  contemplated  use of each such parcel.
Such  suitability  shall  include  use of each parcel of the Real  Property  for
development  and  construction  of the Units,  vehicular  parking,  approval  of
ingress/egress curb cuts off public  rights-of-way  adjoining the Real Property,
and the current  availability of sufficient and necessary  utilities,  including
water.   Seller  represents,   and  Purchaser   acknowledges,   that  additional


                                       28
<PAGE>

development rights must be secured for development of the Heavenly Valley parcel
and Seller is  obligated  to secure such  rights,  as a condition  precedent  to
closing. Purchaser agrees to pay the costs of such additional development rights
(not to exceed  $2,000,000)  upon its acquisition of the Heavenly Valley parcel.

     13.1.2 No Other Approvals.  Purchaser shall have determined that no unusual
approvals  or permits  from either  governmental  agencies,  including,  but not
limited to, zoning boards or agencies,  or private  parties are required for the
construction and use of Purchaser's  Contemplated Use of each parcel of the Real
Property  and that there are no  donations  or  payments  under  Section  10.1.4
hereof,  except  for those to which  Purchaser  has  agreed in  writing.  

     13.1.3  Environmental.  Purchaser  shall  have  obtained  a written  report
containing the results of an  Environmental  Assessment and Purchaser shall have
determined in its sole subjective judgment that the results of the Environmental
Assessment are satisfactory to Purchaser and allow Purchaser's  Contemplated Use
of each parcel of the Real Property.  

     13.1.4  Authorization from Parent Company. A. Purchaser shall have obtained
by the Closing Date, the authorization of the appropriate executive committee of
its  parent  corporation,  Marriott  International,   Inc.,  to  carry  out  the
Purchaser's  obligations  under  this  Contract  pertaining  to the  Development
Rights.  In  addition  thereto,  Purchaser's  parent  company  must  approve the
acquisition  of each parcel of the Real Property  prior to the  Conveyance  Date
thereof.   In  the  event  Purchaser's  parent  company  does  not  approve  the
Purchaser's  acquisition of a particular  parcel of Real  Property,  the parties
will  endeavor,  in good faith,  to select an alternate  parcel or to revise the
terms of the transaction,  as they relate to the disapproved site, so as to gain
the approval of Marriott  International,  Inc. Seller and Owner acknowledge that
the  authorization  from  Purchaser's  parent  company may be granted or denied,
subject to the remaining  provisions  hereof. 

     B.  Seller/Owner   acknowledge  that  Purchaser's  obligations  under  this
Contract are subject to, and  expressly  conditioned  upon,  receipt of Marriott
International's  approval of each specific parcel of Real Property,  in addition
to the  acquisition of  Development  Rights on the Closing Date. If no parcel of
Real   Property  is  approved  by  Marriott   International,   due  to  Marriott
International's  good  faith  determination  that the  projects  fail to satisfy
Purchaser's generally applicable economic performance requirements for similarly
situated  projects,  then  Purchaser  and  Seller/Owner  shall have no liability
hereunder,  whereupon the cash portion of the Fixed Purchase Price, and the Note
given in  connection  therewith,  will be  promptly  returned  to  Purchaser  by
Seller/Owner, and the Collateral will be returned to Seller/Owner, together with


                                       29
<PAGE>

a release of the  Memoranda  of  Contract  as defined in  Articles  II and XXVI,
whereupon neither party will have any further right or liability  hereunder.  If
Purchaser fails to secure Marriott  International's approval for the acquisition
of any  single  parcel  of  the  Real  Property,  after  attempting  to do so in
accordance with the previous paragraph, then Purchaser shall have the option, in
its sole and  exclusive  discretion,  to reduce the Fixed  Purchase  Price by an
amount equal to  $3,600,000  for each Real  Property  parcel for which  Marriott
International approval is sought and not received, provided that Purchaser shall
have such option only in the event that the  failure to gain such  approval  was
due to Marriott  International's good faith determination that the project fails
to satisfy Purchaser's  generally applicable economic  performance  requirements
for similarly situated projects.  If Purchaser exercises its right to reduce the
Fixed Purchase  Price by an amount equal to $7,200,000  (based on two parcels of
Real Property having been disapproved by Marriott International),  then, in that
event  only,  Seller  shall  have the  option  of  either  continuing  with this
Contract, subject to a reduction in the Fixed Purchase Price, as recited herein,
or  prospectively  terminating  this  Contract,  whereupon  neither  Seller  nor
Purchaser  shall have any further right or liability  hereunder  except that (i)
Purchaser  must pay to the Seller any accrued  Purchase  Price for a  previously
acquired  parcel of Real  Property;  and (ii)  Purchaser  shall be  entitled  to
continue to market and develop its  Timeshare  Interests  at Seller  Resorts for
which Royalty Fees will be paid or are continuing to be paid. Seller shall in no
event have a right to terminate  this  Contract if (a) Purchaser has not reduced
the Fixed  Purchase  Price by  $7,200,000 or more due to the inability to secure
Marriott  International's  approval,  or  (b)  Purchaser  has  secured  Marriott
International approval for the acquisition of title to at least four (4) parcels
at Seller Resorts,  provided Purchaser has in fact acquired such parcels, or (c)
Seller has failed to satisfy any of its closing  obligations,  accruing to date,
including but not limited to the obligation to secure Entitlements for any given
parcel of Real  Property.  

     C. The parties hereto recognize that Purchaser's  performance  requirements
and all economic  information  pertaining  thereto is proprietary in nature, and
will be held in strict confidence by the parties hereto. 

     13.2  Purchaser's  Rights  and  Remedies  in Event of  Non-Satisfaction  of
Conditions Precedent. If Purchaser,  in its discretion,  subject to the exercise
of its reasonable judgment,  determines that any of the conditions precedent set
forth in Sections  13.1,  13.2 or 13.3 of this Article XIII shall be unsatisfied
by either the Closing Date and/or the date scheduled as the  Conveyance  Date of


                                       30
<PAGE>

title to any parcel comprising the Real Property, as applicable,  Purchaser may,
at its option,  elect i) following a good faith,  unsuccessful attempt to select
another parcel in accordance with clause (iv) hereof, to terminate this Contract
in its  entirety,  but  only  on a  prospective  basis  (i.e.  with  respect  to
obligations  and rights which are yet to be fulfilled  and satisfied and without
affecting  Purchaser's  obligations  regarding the Royalty Fee, the Note and any
accrued (for parcels previously acquired by Purchaser) but unpaid portion of the
Fixed Purchase  Price) by notice to Seller and Owner in which event the Contract
shall be terminated and of no further force or effect, ii) to waive satisfaction
of the  condition  precedent,  iii) to continue  this Contract in full force and
effect and extend the Closing Date, or the Conveyance  Date, if  applicable,  by
written  notice to Seller and Owner for up to (2)  consecutive  thirty  (30) day
periods,  or (iv) to select an alternate  parcel at the affected  Seller Resort,
subject to the reasonable  approval of both Seller and Owner,  and in the manner
specified under the definition of Real Property herein,  which parcel shall then
constitute part of the Real Property hereunder,  or (v) in the event the parties
good faith effort to select an alternate  parcel at the affected  Seller  Resort
(pursuant to clause iv) is  unsuccessful,  to terminate  the Contract as to such
Real Property and to recover Liquidated Damages, as defined in Exhibit B annexed
hereto and made a part hereof,  in which case the remainder of the Contract with
respect to the  Development  Rights and all other Real  Property  parcels  would
continue.  

     13.3  Purchaser's  Remedies.  The  obligation  of  Purchaser  to close  the
transaction  contemplated  hereby,  or any portion  thereof,  is, at Purchaser's
option,  further subject to all representations of Seller and Owner contained in
this  Contract  being true and correct on and as of the  Effective  Date and the
Closing Date and Conveyance  Date of each of the individual  parcels  comprising
the Real Property and all obligations of Seller and Owner to have been performed
on or before the Closing Date and  Conveyance  Dates having been timely and duly
performed.  Subject to the  requirements  set forth in Section 13.5 below,  upon
default by Seller or Owner or  either's  obligation  to convey  the  Development
Rights  and the Real  Property,  Purchaser  may,  by notice to Seller and Owner,
elect at any time during the term of this Contract, either to (i) terminate this
Contract  with  respect to such parcel;  or (ii) seek  specific  performance  of
Seller's and Owner's obligation to convey the Development Rights and/or title to
each parcel  comprising the Real Property  under this  Contract;  or (iii) avail
itself of any other remedy  pursuant to applicable  law or in equity.  

     13.3.1  In  the  event  that  this  Contract  shall  not  be   successfully
consummated  as a result of the  Seller's  or Owner's  inability  to deliver the
Development  Rights  to  Purchaser  or to  convey  title to a parcel of the Real


                                       31
<PAGE>

Property  to the  Purchaser  or the  refusal of the Title  Insurer to deliver to
Purchaser  a policy of title  insurance  as  required  herein,  or for any other
reason  entirely  beyond the  control of Seller,  then,  subject to  Purchaser's
receipt of the return of all  amounts  paid by  Purchaser  to Seller or Owner as
part of the Purchase  Price,  as well as all other sums  reasonably  expended by
Purchaser in connection with the transaction contemplated herein, as they relate
to such parcel of Real  Property,  as well as the Note,  (if Seller is unable to
convey  title to three or more Real  Property  parcels),  Seller and Owner shall
have no further  liability to Purchaser of any kind or nature and this Agreement
shall be prospectively  terminated with respect to such parcel.  Purchaser shall
continue  to be  responsible  for  payment of the  Royalty  Fee and the  accrued
purchase price, if any, for parcels of the Real Property  previously acquired by
Purchaser.  Purchaser may nonetheless,  at its sole option,  retain title to any
parcel conveyed to it by Seller whereupon the allowable  portion of the Purchase
Price and related  expenses (for such parcel(s))  shall be retained by Seller or
Owner.  

     13.4 Seller's and Owner's Sole and Exclusive Remedy. Prior to entering into
this  Contract,  Purchaser,  Seller and Owner have  considered  the damages that
would be  suffered by Seller and Owner in the event of default by  Purchaser  of
its obligation to purchase the Development  Rights.  Given all the factors which
directly  affect the value and  marketability  of the  Development  Rights,  the
parties realize that it would be extremely  difficult and impracticable,  if not
impossible,  to  ascertain  with any degree of  certainty  the amount of damages
which would be suffered by Seller and Owner in the event of Purchaser's  failure
to perform its  obligations  under this  Contract to  purchase  the  Development
Rights. The parties hereto hereby agree that the prospective termination of this
Contract,  represents a reasonable and adequate  remedy to Seller and Owner and,
in the event of  Purchaser's  failure  to  perform  its  obligations  under this
Contract to purchase the  Development  Rights,  Seller and Owner shall, as their
sole and exclusive  remedy for such failure,  be entitled to such termination of
this  Contract.  The  termination  of this Contract in its entirety,  or as to a
specific  Real  Property  parcel,   shall  not  affect  Purchaser's   continuing
obligation to pay Royalty  Fees,  or to make payments  under the Note, or to pay
the  accrued  but unpaid  Purchase  Price,  as it  pertains  to a parcel of Real


                                       32
<PAGE>

Property acquired by Purchaser.  If this Contract  terminates due to Purchaser's
breach or default, then at Seller's or Owner's request,  Purchaser shall deliver
to Seller or Owner, at no additional charge, all surveys,  engineering  studies,
soil reports,  maps,  master plans,  and other similar items  prepared by or for
Purchaser in  connection  with the Real  Property,  and further shall deliver to
Seller  or Owner any and all  documents  which  Seller  or Owner may  reasonably
require  for the  purpose of  removing  any cloud on title to the Real  Property
created by the  execution  of this  Contract,  provided  Purchaser  shall not be
required to incur any additional  expense as a result of such request (except to
the extent of the cost of a release of a memorandum of this Contract,  including
any termination of a financing  statement pursuant thereto).  Subject to Section
13.5 below,  and to the terms of the Note, the terms or this paragraph shall not
affect  Seller/Owners right to accelerate repayment (to the extent necessary for
payment  of  accrued  purchase  price for a parcel of Real  Property  previously
acquired  by  Purchaser)  of the Note upon a breach of the  provisions  thereof.

     13.4.1  Remedies  for Other  Defaults:  In the event that  Purchaser  shall
default in its obligations  hereunder in a material  respect,  other than as set
forth in Section 13.4,  subject to the provisions of Section 13.5,  Seller/Owner
may either:  (i) terminate  this  Contract  with respect to the affected  Seller
Resort,  or (ii) avail itself of any other remedy  pursuant to applicable law or
in equity  subject,  in the case,  of both clause (i) and (ii) to  Seller's  and
Purchaser's  respective rights and obligations at all other Seller Resorts. 

     13.5 Notice of Default and  Opportunity to Cure.  Prior to any party hereto
being held in default,  said party shall be entitled to written  notice from the
party  alleging  the default or breach and shall be afforded an  opportunity  to
cure the claimed default or breach,  which opportunity shall extend for a period
of thirty (30) days from receipt of the notice, unless the nature of the alleged
breach or default is such that it cannot be cured within such  period,  in which
case  the  period  within  which to cure  shall  be  extended  as  necessary  to
effectuate the curing of the breach or default,  provided that the party alleged
to have defaulted or breached commences to cure same within said thirty (30) day
period and continues to pursue,  in good faith, all actions  necessary to curing
the alleged default or breach.

                                   ARTICLE XIV
                                  CROSS DEFAULT

     14.1  Cross  Default.  Purchaser's  obligations  under the Note are  hereby
expressly  made  subject  to  and  contingent  upon  the  Seller's  and  Owner's
performance  of all the terms  and  conditions  imposed  upon  Seller  and Owner
pursuant to this Contract. In the event either Seller or Owner fails to satisfy,
in any material  respect,  any requirement or obligation  imposed on either such
party hereunder,  after receipt of written notice to such effect from Purchaser,
which shall include an opportunity to satisfy any such requirement or obligation
(for a period  not to  exceed  thirty  (30)  days),  in  Purchaser's  subjective
judgment,  then Purchaser  shall have no further  liability for repayment of the


                                       33
<PAGE>

debt  (principal or interest)  under the Note and Purchaser shall be entitled to
the  immediate  return  of the  original  Note from  Seller or Owner.  Moreover,
Purchaser  shall not be  obligated  to make a payment  during  the  Seller's  or
Owner's  cure  period,  referred  to above.  The  cessation  of the  Purchaser's
liability  under the Note under the terms of this  paragraph  shall in no manner
limit, alter, or otherwise compromise the remedies available to Purchaser either
under this  Article or by virtue of  applicable  law,  nor shall such  cessation
otherwise   affect  the  remaining  rights  and  obligations  of  Purchaser  and
Seller/Owner.  Moreover,  the Note shall  include a provision  referencing  this
Article.

                                   ARTICLE XV
                                    BROKERAGE

15.1 Brokerage.  Seller and Owner hereby represent and warrant to Purchaser that
neither Seller nor Owner has dealt with any broker or finder with respect to the
transaction  contemplated  hereby.  Purchaser hereby  represents and warrants to
Seller and Owner  that  Purchaser  has not dealt with any broker or finder  with
respect to the  transaction  contemplated  hereby.  Seller and Owner  shall each
indemnify,  defend  and hold  Purchaser  harmless  from any claim for  brokerage
commission or finder's fee asserted by any broker or finder or any other person,
firm or  corporation  claiming to have been  engaged by either  Seller or Owner.
Purchaser hereby agrees to indemnify,  defend and hold Seller and Owner harmless
from any claim for  brokerage  commission or finder's fee asserted by any broker
or finder or any other person, firm or corporation claiming to have been engaged
by Purchaser.  These  indemnities of the parties shall survive the expiration of
the term of this Contract.

                                   ARTICLE XVI
                           CASUALTY AND CONDEMNATION

     16.1 Casualty and  Condemnation.  If, after the Effective Date and prior to
the  Conveyance  Date  pertaining  to any of the  parcels  comprising  the  Real
Property,  any portion of the Real Property is damaged by a natural  disaster or
other  casualty or is taken by  exercise  of the power of eminent  domain or any
proceedings  are  threatened or  instituted  to effect such a taking,  Seller or
Owner shall immediately give Purchaser notice of such occurrence,  and if in the
sole but  reasonable  judgment of Purchaser  such  casualty or  condemnation  is
material  and  would  frustrate  Purchaser's  Contemplated  Use of the  affected
portion of the Real Property or any other part thereof,  Purchaser  may,  within


                                       34
<PAGE>

fifteen  (15) days after  receipt of such notice  elect either (i) to sever such
affected  parcel of Real Property  from this  Contract in which event  Purchaser
shall be entitled to Liquidated Damages, or (ii) to prospectively  terminate the
Contract in which event all  obligations  (on a going forward basis) shall cease
and this  Contract  shall have no further  force and effect,  with  respect to a
parcel of Real  Property not conveyed to  Purchaser,  but shall have  continuing
effect with respect to terms and  provisions  applicable  to parcels  previously
acquired by Purchaser, including any Royalty Fee, Note payment and accrued Fixed
Purchase  Price  obligations,  as  such  pertains  to such  previously  acquired
parcel(s),  or (iii) to close the transaction  contemplated  hereby as scheduled
(except that if the Closing Date or the Conveyance Date pertaining to any parcel
of Real  Property is scheduled to occur sooner than fifteen (15) days  following
Purchaser's  receipt of such  notice,  the Closing Date or the  Conveyance  Date
shall be delayed until Purchaser makes such election),  in which event Seller or
Owner shall  assign  and/or pay to Purchaser  at Closing  (Conveyance  Date) all
insurance proceeds or condemnation  awards or other damages collected or claimed
with  respect  to such  casualty  or  taking,  or,  if such  sums  are paid to a
mortgagee,  the Fixed  Purchase Price shall be reduced by the amount so paid. In
the case of a casualty  loss,  the Fixed  Purchase Price shall be reduced by the
amount of any  deductible or  co-insurance  amount  applicable to the unrestored
loss.

                                  ARTICLE XVII
                                     CLOSING


     17.1 Closing.  The sale of  Development  Rights  contemplated  hereby shall
close at 10:00 A.M. (local time) on the Closing Date at the Purchaser's offices,
or on such other date,  place and/or time as the parties may mutually  agree. In
addition, the transfer of title to each of the individual parcels comprising the
Real Property  shall take place at  Purchaser's  office on separate  dates to be
mutually agreed upon among the parties hereto. The scheduled date of transfer of
the separate parcels is sometimes referred to herein as the Conveyance Date, for
each respective parcel.  Notwithstanding  the foregoing,  the Conveyance Date of
each Real  Property  parcel shall be on or about that date which is  thirty-five


                                       35
<PAGE>

(35) days from  Purchaser's  notification  by Seller of the receipt by Seller of
all applicable  Entitlements pertaining to each respective Real Property parcel,
provided  Purchaser  is notified  by Seller of the receipt of such  Entitlements
within a reasonable time after such receipt.  The  Entitlements  must permit and
provide for the  development of each Real Property  parcel in not less than five
(5)  phases  or   increments   of  forty  (40)   Units  in  each   phase.   

     17.2 Seller's/Owner's  Closing Documents. A. On the Conveyance Date of each
parcel  comprising  part of the Real Property,  Seller or Owner shall deliver to
Purchaser the following  Closing  documents,  all duly executed by the Seller or
Owner, as applicable:  

     17.2.1 Owner's special  warranty grant deed in recordable form conveying to
Purchaser good,  marketable and  indefeasible fee simple title to the respective
parcel of the Real Property,  subject only to the Permitted  Exceptions.  

     17.2.2 Owner's FIRPTA  Affidavit,  dated as of the Conveyance Date.  

     17.2.3 The updated Title Commitment.  

     17.2.4 An  assignment  and transfer of, and physical  delivery to Purchaser
of, all of the Entitlements, including but not limited to, all local, municipal,
state,  county and federal approvals and permits  pertaining to the Property and
development  and  building  rights on the subject  parcel of the Real  Property.

     17.2.5 Documents  evidencing the legal status,  good standing and authority
of Owner and such other  documents,  transfer tax returns  (including  certified
checks  for  payment  of  same),  instruments,  affidavits,  certifications  and
confirmations  as may  reasonably  be  required  and  designated  by  Purchaser,
Purchaser's  attorney or the Title  Insurer to fully effect and  consummate  the
transactions contemplated hereby, so long as they do not require Owner to expend
any additional money not contemplated in this Contract.  

     17.2.6 Final consent of the  appropriate  agency to the  recordation of the
Maps.  All costs  and  expenses  of  recordation  of the Maps  shall be borne by
Seller.  B. On the Closing Date,  Seller or Owner shall deliver to Purchaser the
following  closing  documents,  all duly  executed  by the  Seller or Owner,  as
applicable:  

     17.2.7 The Collateral.  

     17.2.8. An estoppel certificate, signed by Lessor and Lessee, pertaining to
the Lease, as defined in Article IV of this Contract.  The estoppel  certificate
shall  contain a  provision  to the affect  that if, for any  reason,  Purchaser
believes,  in good faith,  that the Collateral has, or is about to, experience a
diminution  of  value,  the  Seller/Owner   shall  immediately   substitute  the
Collateral with other assets of Seller/Owner  having a value equal to or greater


                                       36
<PAGE>

than the value of the Collateral at the time of the pledge thereof to Purchaser,
or  otherwise  enhance  the  Collateral  value  to  the  extent  necessary,   in
Purchaser's  judgment,  to  restore  the total  value of the  assets  pledged to
Purchaser.  Moreover,  the signatories of the estoppel  certificate  shall agree
therein to notify the  Purchaser of any event,  act, or omission  which could or
has  caused or  resulted  in a  diminution  in the value of the  Collateral.  In
addition,  said  certificate  shall  contain a provision  prohibiting  SRSC from
incurring any further debt or other obligations which, in Purchaser's reasonable
judgment,  could  impair  or  compromise  SRSC's  ability  to make the  required
payments under the Lease, provided, however that the foregoing restriction shall
not in any manner restrict SRSC from incurring further debt or other obligations
which are permitted under its senior credit facility with BankBoston, N.A. dated
as of November  12, 1997,  as the same may be amended from time to time,  or any
superseding credit facility from an institutional  lender. 

     17.2.9 The Assignment of Development Rights, as described in Section 2.2 of
this  Contract,  in form  suitable for  recording in each  jurisdiction  where a
Seller  Resort is located.  

     17.2.10 An Assignment of Seller's interest in the Company.  

     17.2.11 A Power of  Attorney  pursuant  to  Section  4.4 of this  Contract.

     17.2.12 The  original  Lease,  as amended,  or a  certified  copy  thereof.

     17.2.13 All other documents  reasonably requested by Purchaser and/or Title
Insurer  in  order  to  close  on the  acquisition  of  Development  Rights,  as
contemplated  herein. 

     17.3 Approval of Closing  Documents.  All Closing documents to be furnished
by Owner or Seller  pursuant  hereto shall be in form and  substance  reasonably
satisfactory  to  Purchaser  and Title  Insurer.  All  closing  documents  to be
furnished by Purchaser pursuant hereto shall be in form and substance reasonably
satisfactory to Seller and Owner.  

     17.4 Purchaser's  Closing Documents.  On the Conveyance Date of each parcel
comprising part of the Real Property, Purchaser shall deliver to the Owner:

     17.4.1  Documents  evidencing  the legal status,  standing and authority of
Purchaser and such other documents, instruments, certifications and confirmation
as may reasonably be required and designated by Owner, Owner's attorney,  or the
Title  Insurer to fully  effect and  consummate  the  transactions  contemplated
hereby,  so long as they do not require Purchaser to expend any additional money
not  contemplated  in this  Contract.  

     17.4.2 The portion of the Purchase  Price  required at time of the transfer
of title to the respective parcel pursuant to Article IV of this Contract.



                                       37
<PAGE>

                                  ARTICLE XVIII
                      CONTEMPLATED USE OF THE REAL PROPERTY
  18.1  Contemplated  Use of the Real Property.  The parties hereto  acknowledge
  that Purchaser  contemplates  (i)  developing and  constructing a residential,
  condominium  resort on each parcel  identified in Exhibit A containing no less
  than two hundred (200) Units per parcel;  (ii)  submitting  some or all of the
  Real  Property  to a vacation  or interval  ownership  plan and (iii)  selling
  interval  Purchaser  Timeshare  Interests  pursuant  thereto.   The  size  and
  configuration of the Units, including number of bedrooms and bathrooms,  shall
  be left to  Purchaser's  sole  discretion.  Any  use in this  Contract  of the
  phrases  "Purchaser's   Contemplated  Use",  "contemplated  use  of  the  Real
  Property," or words of similar meaning shall mean Purchaser's development, use
  and enjoyment of the Real Property as described in this Article.

                                   ARTICLE XIX
                                     NOTICES
19.1 Notices. Any notice, request,  demand,  instruction or other document to be
given or served hereunder or under any document or instrument  executed pursuant
hereto  shall be in writing  and shall be  delivered  personally  with a receipt
requested  therefor  or by  cable,  telex or  telephone  facsimile  or sent by a
recognized overnight courier service or by United States registered or certified
mail, return receipt requested,  postage prepaid and addressed to the parties at
their respective addresses set forth herein, and the same shall be effective (i)
upon  receipt  or  refusal  if  delivered  personally  or by cable,  telex or by
telephone  facsimile,  (ii) one  business  day  after  depositing  with  such an
overnight  courier  service,  or (iii) three  business days after deposit in the
mails if  mailed.  A party may  change  its  address  for  receipt of notices by
service of a notice of such change in accordance herewith. All notices by cable,
telex or telephone facsimile shall be subsequently confirmed by U.S.
certified or registered mail or by recognized overnight courier service.

           If to Purchaser:         Marriott Ownership Resorts, Inc.
                                    Attn:   David E. Holton
                                    Vice President - Development
                                    6649 Westwood Boulevard
                                    Suite 500
                                    Orlando, Florida, 32021
                                    FAX:  (407) 206-6030



                                       38
<PAGE>

           with a copy to:          Marriott Ownership Resorts, Inc.
                                    Attn:   Daniel B. Zanini
                                    14344 State Road 535
                                    Orlando, Florida 32821
                                    FAX:  (407) 206-6420

         If to Seller/Owner:        American Skiing Company
                                    P. O. Box 450
                                    Sunday River Road
                                    Bethel, Maine 04217
                                    Attn: Christopher E. Howard

         with a copy to:            Foster A. Stewart, Jr. Esq
                                    American Skiing Company
                                    8th Floor
                                    One Monument Square
                                    Portland, Maine 04101
                                    FAX: 207-791-1350

                                   ARTICLE XX
                    ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS

     20.1 Entire Agreement,  Amendments and Waivers.  This Contract contains the
entire  agreement and  understanding  of the parties with respect to the subject
matter hereof,  and the same may not be amended,  modified or discharged nor may
any of its terms be waived  except by an  instrument  in  writing  signed by the
party to be bound thereby.

                                   ARTICLE XXI
                     NO THIRD PARTY BENEFITS AND ASSIGNMENT

     21.1 No Third Party  Benefits.  This Contract is for the sole and exclusive
benefit of the parties  hereto and their  respective  permitted  successors  and
assigns, and no third party other than a permitted assignee of Purchaser, Seller
or Owner is contemplated to or shall have any rights hereunder. 21.2 Assignment.
No party hereto may assign any of its rights or  obligations  hereunder  without
the prior written consent of the other parties, which consent may be withheld in
the sole and absolute  discretion  of other  parties,  provided,  however,  that
Purchaser  may  assign  its rights and  obligations  under this  Contract  to an
Affiliate without Seller's or Owner's consent so long as Purchaser remains bound

                                       39
<PAGE>

hereunder.  Any sale or transfer of a  controlling  interest in any party hereto
shall be deemed to be a prohibited  assignment of such party's rights under this
Contract.

                                  ARTICLE XXII
                                  INCOME TAXES

22.1 Federal  Withholding.  Pursuant to FIRPTA, and the regulations  promulgated
thereunder,  Seller and Owner agree to deliver to Purchaser,  at or prior to the
Closing Date, and at or prior to each Conveyance Date, an affidavit  executed by
Seller and Owner,  certifying  that neither  Seller nor Owner will be subject to
federal  withholding  pursuant  to this  Contract.  

     22.2 Disclosure to Taxing Authorities.  Each of Seller, Owner and Purchaser
agree to cooperate  fully with the others in completing or filing any disclosure
documents or in otherwise satisfying any disclosure requirements of the Internal
Revenue Code and any state or local taxing authority.

                                  ARTICLE XXIII
                                EVENTS OF DEFAULT

     23.1  Events of  Default.  In  addition  to the  default  events  described
elsewhere herein,  each of the following shall constitute an event of default to
the extent permitted by applicable law: (a) the filing by a party hereunder of a
voluntary petition under any bankruptcy, insolvency or similar law or a petition
for  reorganization  under  any  bankruptcy,  insolvency  or  similar  law,  the
admission by a party hereunder that it is unable to pay its debts as they become
due or the consent by a party  hereunder to an  involuntary  petition  under any
bankruptcy,  insolvency or similar law; (b) the failure to vacate, within ninety
(90) days from the date of entry  thereof,  any order  approving an  involuntary
petition under any bankruptcy,  insolvency or similar law by a party  hereunder;
(c) the  entering  of an order,  judgment,  or decree by any court of  competent
jurisdiction, on the application of a creditor, adjudicating any party hereto as
bankrupt,   insolvent  or  similar  status  or  approving  a  petition   seeking
reorganization  or  appointing a receiver,  trustee,  or  liquidator of all or a
substantial part of such person's assets,  and such order,  judgment,  or decree
continuing  unstayed  and in effect  for any  period of ninety  (90)  days;  (d)
failure of any party hereto to make any payment  required to be made pursuant to
this  Contract  within  thirty (30) days after  notice that such payment has not
been made; or (e) the material failure of a party hereunder to perform,  keep or
fulfill any of the other  warranties,  covenants,  undertakings,  obligations or


                                       40
<PAGE>

standards set forth in this Contract,  which failure shall continue for a period
of thirty (30) days following notice thereof by a non-defaulting  party (or such
longer  period of time as is  necessary  to cure such default if such failure is
not susceptible to being cured within thirty (30) days and the defaulting  party
shall  promptly  after such notice  diligently  begin,  prosecute,  and complete
curing such failure).  Any non-defaulting  party may (but shall not be obligated
to) cure any  default  hereunder  by taking  action on behalf of the  defaulting
party.

                                  ARTICLE XXIV
                                  MISCELLANEOUS

     24.1 Further Assurances. The parties each agree to do, execute, acknowledge
and deliver all such further acts,  instruments  and  assurances and to take all
such  further  action  before  or after  the  Closing  Date  and the  respective
Conveyance  Dates for each  parcel of Real  Property  as shall be  necessary  or
desirable to fully carry out the  intentions  set forth in this  Contract and to
fully consummate and effect the transactions  contemplated hereby. 

     24.2    Survival   and   Benefit.    All    representations,    agreements,
indemnification's  and obligations of the parties shall survive the Closing Date
and the  respective  Conveyance  Dates for each parcel of Real  Property and the
same  shall  inure to the  benefit  of,  and be  binding  upon,  the  respective
permitted successors and assigns of the parties. 

     24.3  Interpretation.  

     24.3.1 The  headings  and  captions  herein  are  inserted  for  convenient
reference  only and the same  shall not limit nor  construe  the  paragraphs  or
sections to which they apply nor  otherwise  affect the  interpretation  hereof.

     24.3.2 The terms "hereby", "hereof",  "hereto", "herein",  "hereunder", and
any similar terms shall refer to this Contract,  and the term "hereafter"  shall
mean after,  and the term  "heretofore"  shall mean before the  Effective  Date.

     24.3.3  Words of the  masculine,  feminine or neuter  gender shall mean and
include the correlative words of other genders, and words importing the singular
number  shall mean and include the plural  number and vice versa.  

     24.3.4  Words   importing   persons  shall  include  firms,   associations,
partnerships  (including  limited  partnerships),  limited liability  companies,
trusts, corporations and other legal entities,  including public bodies, as well


                                       41
<PAGE>

as natural persons. No reference herein to Seller,  Owner or Purchaser shall, in
and of itself,  be deemed to refer to its shareholders as such. 

     24.3.5  The  terms  "include,"  "including,"  and  similar  terms  shall be
construed as if followed by the phrase  "without being limited to".  

     24.3.6 This  Contract  and any  document or  instrument  executed  pursuant
hereto may be executed  in any number of  identical  counterparts  each of which
shall be  deemed  an  original,  but all of which  together  shall  collectively
constitute one and the same  instrument.  In making proof of this  Contract,  it
shall not be necessary to produce or account for more than one such counterpart.

     24.3.7  Whenever  the  terms  of  this  Contract  describes  the  time  for
performance of a covenant or condition,  all  references  herein to "days" shall
mean calendar  days.  

     24.3.8 This Contract shall be governed by and construed in accordance  with
the laws of the State of Florida.  

     24.3.9 Neither Seller, Owner nor Purchaser shall avail itself of any remedy
granted to it hereunder based upon an alleged default of another party hereunder
unless and until written notice of the alleged  default,  in reasonable  detail,
has been  delivered  to a  defaulting  party by a  non-defaulting  party and the
alleged  default has not been cured on or before 5:00 p.m.  (local  time) on the
tenth fifth (10th) day next following delivery of said notice of default, except
as otherwise  specifically  set forth in this  Contract.  

     24.3.10 This  Contract  shall not be construed  more  strictly  against one
party than  against the other merely by virtue of the fact that it may have been
prepared  primarily by counsel for one of the parties,  it being recognized that
Purchaser,  Owner and Seller have each contributed  substantially and materially
to the preparation of this Contract.  

     24.3.11  Any  condition  precedent  imposed  as a  contingency  under  this
Contract may be waived by the party entitled to satisfaction of the condition as
a  pre-requisite  to that party's  performance.  Any condition  precedent  which
remains  unsatisfied  upon the Closing Date and the Conveyance Dates for each of
the respective parcels comprising the Real Property shall be deemed to be waived
by the party entitled to  satisfaction.  

     24.4 Discrepancy in Descriptions. If prior or subsequent to the delivery of
each Deed, it appears that the legal  description  of the subject  parcel of the
Real Property to be purchased does not include or correctly describe Owner's fee
simple title therein or  appurtenances  thereto,  the legal  description  of the
respective  parcel  shall  be  modified  to  correctly   describe  the  same  at
Purchaser's request. 


                                       42
<PAGE>

     24.5  Publicity.  All  notices  to third  parties  and all other  publicity
concerning  the  transaction  contemplated  hereby prior to the Closing Date and
each respective  Conveyance Date, including but not limited to press releases of
any kind or  nature,  shall be  jointly  planned  and  coordinated  by and among
Purchaser,  Owner and Seller. This requirement shall not apply,  however, to any
notice,  document or  information  which any party  hereto is required by law to
provide or disclose.  None of the parties shall act  unilaterally in this regard
without the prior written approval of the others;  however,  this approval shall
not be unreasonably withheld or delayed.

                                   ARTICLE XXV
                              OFFER AND ACCEPTANCE

     25.1 Offer and  Acceptance.  Delivery by  Purchaser to Seller or Owner of a
copy of this  Contract  executed  by  Purchaser  shall  constitute  an  offer by
Purchaser  to purchase the  Development  Rights and the Real  Property  upon the
terms and  conditions  herein  set forth and  subject to the  provisions  herein
contained,  which offer shall be effective  until the close of business five (5)
business  days after  delivery of an executed copy of this Contract by Purchaser
to Seller and Owner (unless otherwise previously  revoked).  If Seller and Owner
fail to deliver a fully executed counterpart of this Contract to Purchaser prior
to expiration of the offer period, then the offer shall automatically be revoked
and rescinded in its entirety,  and upon such  revocation  and  rescission,  the
offer and this Contract shall have no further force or effect.

                                  ARTICLE XXVI
                             MEMORANDUM OF CONTRACT
26.1 Recordation of Memorandum of Contract. Seller, Owner and Purchaser agree to
execute  counterparts of memoranda of this Contract,  in recordable form, and to
do all  that  is  necessary  for the  recordation  of such  memoranda  with  the
appropriate  office or department where Land Records are recorded for properties
situated where the individual parcels comprising the Real Property are located.

                                  ARTICLE XXVII
                           RESTRICTIONS ON COMPETITION
27.1     Restrictions.


                                       43
<PAGE>

         A. Except as otherwise  set forth in this  Section,  during the term of
this  Contract;  (i) Seller  shall not  market,  develop  or sell any  Purchaser
Timeshare  Interests  without  the prior  written  consent of  Purchaser,  which
consent may be withheld in Purchaser's  sole and absolute  discretion;  and (ii)
Purchaser  shall not  market,  develop  or sell any Seller  Timeshare  Interests
without the prior  written  consent of Seller,  which consent may be withheld in
Seller's sole and absolute discretion.
         B. In the event that either Purchaser or Seller shall determine that it
wishes to market,  develop and/or sell Restricted  Buffer  Timeshare  Interests,
such party (the "Offering  Party") shall provide  written  notification  of such
intent to the other party (the "Receiving Party"),  which notification shall set
forth in reasonable detail: (i) the length of the Timeshare  Interests which the
Offering  Party  wishes  to  develop,   market  and  sell;  (ii)  the  location,
configuration  and number of units of the project to be  developed;  and (iii) a
preliminary or draft project  proforma  showing  project cost  estimates,  sales
estimates, marketing cost estimates and projections of profitability (the "Offer
Notice").  Within thirty (30) days  following  receipt of the Offer Notice,  the
Receiving  Party shall notify the Offering Party whether it wishes to pursue the
project as a Joint Development Timeshare Interest. In the event that the parties
agree to pursue the  project as a Joint  Development  Timeshare  Interest,  they
shall do so pursuant to a Joint Development Agreement whereby each party shares,
on an equal basis, in all aspects of the Joint Development  Timeshare  Interest,
including,  without limitation, an allocable value of the development site (land
and  improvements),  on a fair market value basis,  profits,  losses,  expenses,
capitalization  and  financial  backing,   sales  and  marketing,   construction
management  and  management  following  completion.  If, on the other hand,  the
Receiving Party declines to pursue the project as a Joint Development  Timeshare
Interest,  then neither  party shall  pursue or conclude the subject  Restricted
Buffer Timeshare  Interest project.  

     C. In the event  that  Seller  shall  determine  that it wishes to  market,
develop and/or sell Conditional Buffer Timeshare Interests, Seller shall provide
written  notification of such intent to the Purchaser,  which notification shall
set forth in reasonable detail: (i) the length of the Timeshare  Interests which
Seller wishes to develop, market and sell; (ii) the location,  configuration and
number of units of the project to be developed; and (iii) a preliminary or draft
proforma  showing  project cost  estimates,  sales  estimates,  marketing  costs
estimates and projections of profitability  (the "Offer Notice").  Within thirty
(30) days following  receipt of the Offer Notice,  Purchaser shall notify Seller


                                       44
<PAGE>

whether  it  wishes to  pursue  the  project  as a Joint  Development  Timeshare
Interest.  In the event that the parties  agree to pursue the project as a Joint
Development Timeshare Interest, they shall do so pursuant to a Joint Development
Agreement  whereby each party shares,  on an equal basis,  in all aspects of the
Joint  Development  Timeshare  Interest,   including,   without  limitation,  an
allocable  value of the  development  site  (land and  improvements),  on a fair
market value basis,  profits,  losses,  expenses,  capitalization  and financial
backing, sales and marketing,  construction  management and management following
completion.  If, on the other hand, the Purchaser declines to pursue the project
as a Joint Development Timeshare Interest, then the Seller shall be permitted to
pursue or conclude the subject  Conditional  Buffer Timeshare  Interest project,
without the  participation  of any third party primarily  engaged in the lodging
(including timeshare sales and development) industry,  other than as provider of
capital.

                                 ARTICLE XXVIII
                                FUTURE AMENDMENTS

28.1 Future  Amendments.  This  Contract  shall be amended  from time to time in
order to add to the definition of Real Property,  as set forth in Exhibit B, any
other parcel of Real Property  (outside of the Initial  Resorts) which Seller or
Owner  currently  owns or which may be  acquired  by Seller or Owner at any time
during the term of this Contract,  from which a mutually agreed upon portion may
be segregated and conveyed to Purchaser,  for the purposes  consistent  with the
Purchaser's  Contemplated Use as defined herein.  It is the understanding of the
parties hereto that any such other Real Property parcel owned or operated by (by
conveyance,  stock transfer,  asset purchase or any other means) Seller or Owner
shall  be  subject  to the  terms  and  provisions  hereof,  including,  without
limitation,  the exclusive right of the Purchaser to develop,  market,  sell and
promote  its  product  at an  agreed  upon  parcel  comprising  part of any such
property which may be rendered part of this Contract subsequent to the Effective
Date.

                                       45
<PAGE>

IN WITNESS  WHEREOF,  this  Contract has been  executed and delivered by Seller,
Owner and  Purchaser  on the  respective  dates set forth  next to each of their
signatures.





                                     SELLER:
                         
                                  AMERICAN SKIING COMPANY
                                   a Maine corporation


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

                                  Attest:  /s/  Foster A. Stewart, Jr.
                                           Vice President

                                   Dated:  July 22, 1998


                                       OWNER:
                                 AMERICAN SKIING COMPANY RESORT PROPERTIES, INC.
                                 a Maine corporation


                                   By: /s/ Christopher E. Howard
                                        Senior Vice President

                                   Attest:  /s/  Foster A. Stewart, Jr. 
                                           Vice President

                                   Dated:  July 22, 1998


                                       PURCHASER:
                                        MARRIOTT OWNERSHIP RESORTS, INC.
                                           a Delaware corporation


                                         By:  /s/ Stephen P. Weisz
                                              President

                                         Attest:  /s/ Joseph Scallo
                                               Assistant Secretary

                                         Dated:  July 22, 1998





                                       46
<PAGE>




             LIST OF EXHIBITS TO PURCHASE AND DEVELOPMENT AGREEMENT

Exhibit A      Descriptions of the Real Property

Exhibit B      Definitions

Exhibit C      Assignment of Development Rights

Exhibit D      Form of Promissory Note





                                       47
<PAGE>




                                    EXHIBIT A

                            DESCRIPTIONS OF PROPERTY


                                       48
<PAGE>


                                   EXHIBIT A-1

                                 HEAVENLY VALLEY
                             LAKE TAHOE, CALIFORNIA


                                       49
<PAGE>


                                   EXHIBIT A-2

                                   THE CANYONS
                                 PARK CITY, UTAH



                                       50
<PAGE>


                                   EXHIBIT A-3

                                    STEAMBOAT
                           STEAMBOAT SPRINGS, COLORADO



                                       51
<PAGE>


                                   EXHIBIT A-4

                                   KILLINGTON
                               KILLINGTON, VERMONT


                                       52
<PAGE>


                                   EXHIBIT A-5

                                  SUNDAY RIVER
                                  BETHEL, MAINE



                                       53
<PAGE>



                                    EXHIBIT B

                                   DEFINITIONS

Affiliate means (i) any corporation or partnership that controls,  is controlled
by, or is under common control with,  Purchaser,  (ii) any corporation resulting
from the merger or consolidation with Purchaser,  (iii) any entity that acquires
all of Purchaser's assets as a going concern, (iv) Marriott International,  Inc.
("Marriott"),   or  any  wholly-owned  subsidiary  thereof,  (v)  Host  Marriott
Corporation  ("Host"),  or a  wholly-owned  subsidiary  thereof,  and  (vi)  any
corporation or partnership  that is controlled by, or under common control with,
Marriott or Host.

Canyons  that  parcel  of  Real  Property  located  in  Park  City,  Utah,  more
particularly identified on Exhibit A-2 to this Contract.

Closing means the conveyance and transfer of the Development  Rights,  including
the  right to  purchase  the Real  Property  pursuant  to the  Contract  and the
consummation of all the other transactions specified in the Contract to occur on
the Closing Date.

Closing Date means that date on which the Closing  occurs,  which is anticipated
to be on or about July 22,  1998,  or such  other date as may be agreed  upon in
writing by Seller and Purchaser.

Collateral has the meaning ascribed to it in Article IV of this Contract.

Combined  Purchase  Price has the meaning  ascribed to it in Section 2.3 of this
Contract.

Conditional  Buffer Timeshare  Interest means any Timeshare Interest at a Seller
Resort not exceeding a twelve and one-half  (12-1/2) week period of time and not
less than a six and one-half (6-1/2) week period of time.

Contemplated Use means the use described in Article XVIII of the Contract.

Contract means the Purchase and Development  Agreement between Seller, Owner and
Purchaser to which this Exhibit is attached.

Conveyance  Date  means  the  date  of the  transfer  of  title  to  each of the
respective  parcels which comprise a part of the Real  Property.  While specific
Conveyance Dates will be left to the mutual agreement of the parties hereto,  it
is generally  intended that the  Conveyance  Date for each parcel shall be on or
about 35 days from the date on which  Purchaser has received  notice from Seller
or Owner that all Entitlements  applicable to the parcel which is the subject of
the notice have been received by the Seller or Owner;  provided  copies  thereof
are included with the notice to the Purchaser.



                                       54
<PAGE>

Development  Rights means the rights,  opportunities,  entitlements,  approvals,
permits,  licenses  and  authorizations  hereby  granted to  Purchaser to do the
following with respect to each parcel of Real Property described in Exhibit A of
this  Contract,  as well as all other Real Property  parcels  referred to in the
Contract and pursuant to the terms hereof (some of which are currently owned and
operated by Seller and Owner while others are subject to future  acquisition  or
operation by Seller or Owner or their respective designees): (i) to acquire each
parcel in fee simple  absolute (or in any other  interest  which  Purchaser  may
elect) inclusive of all future Development Rights, mineral rights, entitlements,
approvals,  permits,  licenses and all benefits arising therefrom on, beneath or
above the surface of each such parcel of Real  Property;  (ii) to  construct  on
each parcel of Real Property any  improvements  permitted by law,  including but
not  limited  to  Units  (as  defined  herein)   together  with  any  amenities,
recreational  facilities,   commercial  structures  or  other  structures  which
Purchaser elects to construct; (iii) to operate, manage and maintain the parcels
of Real  Property  and  all  improvements,  amenities  and  facilities  situated
thereon;  (iv) to market,  sell, convey,  transfer any interest in any parcel of
Real Property in whole or in part which is owned or controlled by Purchaser; (v)
to, upon acquisition of title by the Purchaser,  pledge,  hypothecate,  enfeoff,
mortgage or use as collateral any parcel of Real Property or interest therein in
connection  with any financing or borrowing  which  Purchaser  seeks or solicits
from any third party;  and (vi) to perform any other action or course of conduct
arising out of the Purchaser's right to acquire the Real Property as well as the
actual acquisition of said Real Property. In addition,  Development Rights shall
also  include  all  of the  marketing,  promotion,  sales,  access  and  similar
opportunities  afforded to Purchaser at all Seller Resorts as defined herein, as
well as all future opportunities for same as contemplated hereby.

Effective  Date  means the date on which the last  party to sign  executes  this
Contract, and delivers same to the other party.

Entitlements  means  all  necessary  approvals,   consents,   filings,  permits,
certificates  or similar  items  necessary  for the  development  of each parcel
comprising  the  Real  Property,   in  a  manner   consistent  with  Purchaser's
Contemplated  Use  of  the  Real  Property.   The  Entitlements  hereunder  must
specifically  permit and  provide  for the  development  of each  parcel of Real
Property in not less than five (5) phases or  increments  of forty (40) Units in
each  phase.  Examples  of  such  Entitlements   include,   without  limitation,
subdivision approval, plot plan approval,  environmental  clearances,  site plan
approval, Map filings, zoning approvals and related governmental authorizations.
It shall be the  obligation  of the Seller and Owner to secure all necessary and
applicable  Entitlements pertaining to each parcel comprising the Real Property.
Entitlements shall also specifically  include providing any and all utilities to
the boundary line of each respective parcel conveyed to Purchaser, including but
not limited to gas, electricity,  water, cable, and telephone. Purchaser retains
the right,  without any  obligation  whatsoever,  to take measures  necessary to
secure the  Entitlements  in which case  Seller/Owner  will cooperate fully with
Purchaser, including by signing all necessary documents.

Environmental Assessment has the meaning ascribed to it in Section 11.4.

Environmental  Law  means the Clean Air Act,  42  U.S.C.  ss.7401  et seq.;  the
Federal  Water  Pollution  Control Act of 1977,  33 U.S.C.  ss.1251 et seq.,  as


                                       55
<PAGE>

amended by the Water  Quality Act of 1987;  FIFRA;  the  National  Environmental
Policy Act of 1969, 42 U.S.C. ss.4321 et seq.; the Noise Control Act of 1972, 42
U.S.C.  ss.4901 et seq.;  the  Occupational  Safety  and Health Act of 1970,  29
U.S.C. ss.651 et seq., as amended by the Hazardous and Solid Waste Amendments of
1984; the Safe Drinking Water Act, 42 U.S.C. ss.300f et seq.; CERCLA, as amended
by the Superfund  Amendments and Reauthorization Act; the Emergency Planning and
Community  Right-To-Know Act of 1986, 42 U.S.C.  ss.11001, and the Radon Gas and
Indoor Air Quality Research Act of 1986, 42 U.S.C. ss.4701; RCRA; TSCA; AEA; and
NWPA,  all as may be amended,  with  implementing  regulations  and  guidelines.
Environmental  Laws shall also include all  federal,  state,  regional,  county,
municipal, and other local laws, regulations, and ordinances insofar as they are
equivalent  or similar to the federal laws above or purport to regulate  (now or
in the future) Hazardous Materials.

FIRPTA has the meaning ascribed to it in Section 10.1.10 of this Contract.

Fixed  Purchase  Price has the  meaning  ascribed  to it in Section  4.1 of this
Contract.

Hazardous  Materials means any substance,  material,  waste,  gas or particulate
matter, hazardous substance, pollutant or contamination,  giving those terms the
broadest meaning as accorded by statutes,  regulations and/or court decisions in
the  jurisdiction  in which  the  Property  is  located.  Without  limiting  the
generality  of the  foregoing,  the  definition  of those  terms  shall  include
substances which are regulated under the Comprehensive  Environmental  Response,
Compensation,  and Liability Act, 42 U.S.C. ss. 9601 et seq. ("CERCLA"); oil and
petroleum  products  and  by-products  and natural  gas,  natural  gas  liquids,
liquefied natural gas, and synthetic gas usable for fuel, urea formaldehyde foam
insulation,  and  chlorofluorocarbons;  pesticides  regulated  under the Federal
Insecticide,  Fungicide and Rodenticide Act, as amended, 7 U.S.C. ss.136 et seq.
("FIFRA");  asbestos,  polychlorinated  biphenyl, and other substances regulated
under the Toxic Substances  Control Act, as amended,  15 U.S.C.  ss.2601 et seq.
("TSCA");  chemicals  subject to the Occupational  Safety and Health  Standards,
Hazard  Communication,  29 C.F.R.  ss.1910.1200,  as amended;  source  material,
special nuclear  by-product  materials,  and any other radioactive  materials or
radioactive wastes,  however produced,  regulated under the Atomic Energy Act of
1954, as amended, 42 U.S.C. ss.2011 et seq. ("AEA"); or the Nuclear Waste Policy
Act of 1982, as amended, 42 U.S.C. ss.10101 et seq. ("NWPA"); industrial process
and pollution  control wastes whether or not hazardous within the meaning of the
Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. ss.6901 et
seq. ("RCRA"); and any other hazardous substance,  pollutant or contaminant that
is regulated or becomes regulated under any other Environmental Laws.

Heavenly  Valley  means that  parcel of Real  Property  located  in Lake  Tahoe,
California more particularly identified on Exhibit A-1 to this Contract.

Immediately Available Funds means funds deposited to the transferee's account by
federal funds wire transfer.

Initial  Resorts  means the five (5)  properties  owned by Owner  from which the
parcels identified in Exhibit A will be conveyed to Purchaser,  to wit, Heavenly


                                       56
<PAGE>

Valley, The Canyons, Steamboat, Killington and Sunday River. Initial Resorts are
distinguished  from the other resort  properties  currently owned or operated by
Owner or Seller or their  affiliates as well as from future acquired  properties
which may be subject to this  Contract at a later  time;  pursuant to and to the
extent provided herein.

Joint Development  Timeshare  Interest means any Buffer Timeshare Interest which
has been offered to Seller or  Purchaser  by the other party hereto  pursuant to
Section  26.1 hereof and which Seller and  Purchaser  have agreed to pursue on a
joint development basis pursuant to said Section.

Killington  means that parcel of Real Property  located in  Killington,  Vermont
more particularly identified on Exhibit A-4 to this Contract.

Land  Records  means the records of the clerk of court of the County  where each
parcel of Real  Property is located or other such  official  depository in which
documentation  of/and  transfers,  such as deeds and mortgages,  are recorded to
satisfy requirements of notice and applicable law.

Liquidated  Damages means, with respect to each Real Property parcel, the sum of
$3,600,000.00.  In the event  Purchaser  shall  select  Liquidated  Damages as a
remedy, Purchaser's right to such Liquidated Damages shall only be exercised via
a reduction in the Purchase Price.

Permitted Exceptions has the meaning ascribed to it in Section 7.1.

Purchaser means Marriott Ownership Resorts, Inc., a Delaware corporation.

     Purchaser  Timeshare  Interest  means any  Timeshare  Interest  at a Seller
Resort not exceeding a two (2) week period of time.

Real Property  means  collectively,  those parcels of real estate  identified in
Exhibit A of this Contract.  Individual parcels comprising the Real Property are
sometimes  referred to as a "parcel  comprising  part of the Real Property" or a
"Real Property  parcel".  Purchaser,  Owner and Seller recognize and acknowledge
that the parcels  described in Exhibit A are inexact and may require  additional
refinement or adjustment (of their respective size, boundary lines,  orientation
and/or  configuration)  in order to render  same  adequate  for  development  of
Purchaser  Timeshare  Interests.  However, in each case, the Real Property to be
conveyed hereunder shall be adequate for the development, marketing and sales of
Purchaser  Timeshare  Interests  in no less than five (5)  phases of forty  (40)
Units each.  Purchaser,  Owner and Seller agree to work together in a reasonable
and  cooperative  manner to identify  the parcels to be  ultimately  conveyed to
Purchaser hereunder,  which shall be reasonably acceptable to both Purchaser and
Owner/Seller. The foregoing shall apply to initial site selection/refinement and
any subsequent site selection/refinement provided for under this Agreement.

Release or Released means any actual or threatened spilling,  leaking,  pumping,
pouring,  emitting,  emptying,   discharging,   injecting,  escaping,  leaching,
presence,  dumping,  migration on or from the Property or adjacent property,  or
disposing of Hazardous  Materials  into the  environment,  as  "environment"  is
defined in CERCLA.



                                       57
<PAGE>

Restricted  Buffer Timeshare  Interest means any Timeshare  Interest at a Seller
Resort not exceeding a six and one-half (6-1/2) week period of time and not less
than a two (2) week period of time.

Seller means American Skiing Company, a Maine corporation.

Seller Resorts means all parcels of real property  currently or hereafter  owned
(including all properties in which Seller or Owner has a controlling interest by
virtue of a conveyance,  stock transfer,  asset purchase or otherwise) by Seller
or Owner or their affiliates, subsidiaries, parents or other related entities.

     Seller Timeshare  Interest means any Timeshare  Interest at a Seller Resort
not less than a thirteen (13) week period of time.

Ski and Golf Package Agreement means that certain agreement entered into between
the parties contemporaneously herewith which sets forth the terms and conditions
pertaining  to the sale and purchase of ski lift tickets and rounds of golf,  as
more particularly set forth therein.

Steamboat  means that  parcel of Real  Property  located in  Steamboat  Springs,
Colorado more particularly identified on Exhibit A-3 to this Contract.

Sunday River means that parcel of Real  Property  located in Bethel,  Maine more
particularly identified on Exhibit A-5 to this Contract.

Survey has the meaning ascribed to it in Section 6.1.

Term means the period which this Contract shall remain in effect,  including all
renewal terms and  extensions.  The initial Term shall commence on the Effective
Date and  shall  continue  for a period of ten (10)  years  from the date of the
issuance  to  the  Purchaser  of the  first  permit  authorizing  the  start  of
construction of Units at a Real Property  parcel acquired by the Purchaser.  The
initial Term shall automatically be extended, however, (i) to allow Purchaser to
complete  its  sales  and  marketing  activities  (on an  exclusive  basis) at a
particular  Real  Property  site  or  sites,  and  (ii)  if  there  remains,  in
Purchaser's  inventory,  not less than One Thousand (1,000) Purchaser  Timeshare
Interests  at the  Seller  Resorts.  If  less  than  1,000  Purchaser  Timeshare
Interests remain in Purchaser's  inventory at Seller Resorts, then the exclusive
right to market at Seller Resorts, as well as Purchaser's  exclusive development
rights as set forth in Section 5.2(3) shall be deemed to have expired (except at
Seller  Resorts where  Purchaser  continues to market its Timeshare  Interest at
said Seller Resort,  which Purchaser may continue to do on an exclusive  basis).
When Purchaser's total Timeshare Interest inventory at Seller Resorts is reduced
to less than 1,000 Timeshare Interests, its rights to market and develop, as set
forth herein, shall continue, but on a non-exclusive basis, for a maximum period
of five (5) years from the date when Purchaser's  inventory was reduced to below
1,000 Timeshare Interests.



                                       58
<PAGE>

Timeshare Interest means any vacation ownership undivided fractional interest in
a specific timeshare Unit, together with the right to use and occupy such a Unit
for a fixed period of time, on a recurring  basis  (generally  annually or every
other  year).  In  addition,  such term shall  include all  ancillary  marketing
programs  relating to the promotion and sale of such Interests.  For purposes of
this  Contract,  Timeshare  Interests may not and shall not include any vacation
ownership interest  consisting of an undivided  fractional  interest equal to or
less than one-half  (1/2) of one week.  Any Timeshare  Interest  consisting of a
three (3) to twelve (12) week period  (inclusive)  may be developed  pursuant to
the terms and conditions  set forth in Article XXVII of this  Contract.  Nothing
contained  herein shall restrict or limit either party's right to sell or convey
multiple Timeshare Interests to the same purchaser.  For example,  Purchaser may
sell more than two (2) consecutive one (1) week Timeshare  Interests to the same
Purchaser,  provided Purchaser is not actively marketing and packaging interests
of three (3) or more weeks as part of its sales and marketing program.

Title Commitment has the meaning ascribed to it in Section 7.1

Title Insurer means First American Title Insurance Company,  or such other title
insurance underwriter as may be approved in writing by Purchaser.

Title Policy has the meaning ascribed to it in section 7.2.

Unit means that certain  portion of the  improvements  to be constructed on each
parcel of the Real Property by Purchaser and designated as residential  Units or
apartments  and included in a plan for the sale of Timeshare  Interests  therein
pursuant to a vacation  ownership  or  interval  ownership  plan or  arrangement
created and implemented by Purchaser.


                                       59
<PAGE>



                                    EXHIBIT C

                        ASSIGNMENT OF DEVELOPMENT RIGHTS

                             MEMORANDUM OF CONTRACT

         This Memorandum of Contract, dated as of July 22, 1998, is entered into
by  and  among  American   Skiing   Company,   a  Maine   corporation   ("ASC"),
________________,   a  _______________  corporation  ("Owner")  American  Skiing
Company Resort Properties, Inc., a Maine corporation ("ASCRP" and, together with
ASC and Owner, the "Grantors") and Marriott Ownership Resorts,  Inc. ("Grantee")
for the purpose of setting  forth of record  certain  terms of the  Purchase and
Development  Agreement  dated July 22, 1998,  among ASC,  ASCRP and Grantee (the
"Purchase Agreement").

         A._______Grantors'   Covenants:   Under  the  terms  of  the   Purchase
Agreement,  the Grantors  have  conveyed to Grantee  (and do hereby  confirm the
conveyance of) the following:

          (1) The exclusive right to market,  promote,  rent,  exchange and sell
         Purchaser  Timeshare Interests (as defined below) at the Seller Resorts
         (as defined below),  including,  without limitation,  the real property
         described on Exhibit A hereto (the "Property"). This exclusive right is
         subject  to the right of  Grantors  and  their  affiliates  to  market,
         promote and sell Seller Timeshare  Interests (as defined below) and the
         rights of third parties to market, promote and sell Timeshare Interests
         at  portions of the  Property  which  Grantee  has  declined to acquire
         pursuant to Section A(4) hereof.

          (2) The right to acquire one (1) parcel of real estate for development
         and sale of Purchaser  Timeshare  Interests (in not less than 200 units
         per  location,  and developed in not less than five (5) phases of forty
         (40) Units each) at a to be agreed upon  location  within the  Property
         (each such  parcel is referred  to herein as a  "Development  Parcel"),
         subject to payment of any purchase  price  required  under the Purchase
         Agreement.

          (3)  From  the  date  hereof  until a date  which  is not  later  than
         thirty-six  (36) months  after the  issuance to  Purchaser of the first
         building  permit  authorizing  the start of  construction  of Units (as
         defined in the Purchase  Agreement) at any Development Parcel purchased
         under the Purchase  Agreement (the "Option  Date"),  Grantee shall have
         the exclusive right to acquire parcels of real property for development
         of Purchaser  Timeshare Interests thereon at the Seller Resorts and the
         Property. Grantee shall execute and record a certificate certifying the
         Option Date promptly after the issuance of such permit.

          (4) From the Option  Date  through the  remainder  of the term of this
         Memorandum  (as defined in Section  D(2)  hereof),  should  Grantors or
         either of them  determine  that  they wish to make any of the  Property
         available  for  development  of  Purchaser  Timeshare  Interests,  then


                                       60
<PAGE>

         Grantee shall have the exclusive right for a period of thirty (30) days
         from  receipt of notice of  Grantors'  intent to convey  such parcel to
         either:  (a) make a binding  commitment  to  acquire  such  parcel at a
         purchase  price  established  in accordance  with the provisions of the
         Purchase Agreement, or (b) to decline to acquire such parcel, whereupon
         Grantors may sell such Property  within 180 days of Grantee's  response
         at a price equal to or greater  than the price at which such parcel was
         offered to Grantee.  Grantors may permit any purchaser of such a parcel
         to market, on a non-exclusive basis, such purchaser's timeshare product
         at Grantors'  resort,  subject to Grantee's  right to market  Purchaser
         Timeshare Interests at such resort.

     B. Release Mechanism: Grantors or either of them may release any portion of
the Property  from the  covenants  and effect of this  Memorandum by recording a
release sworn to and executed by a duly authorized officer of such entity, which
release describes the portion of the Property to be so released and provides:

     (1) that such Property is being developed by Grantors or their  affiliates;
or

     (2)  that  such  Property  is  being  sold  for use as a  Seller  Timeshare
Interest, whole ownership condominium or single family residential use.

In any other  circumstance,  the Property  (or any portion  thereof) may only be
released from the covenants  and effect of this  Memorandum  prior to the end of
its term by a release  executed by  Grantee,  in form and  substance  reasonably
acceptable to Grantee.

          C. _____  Definitions:  The following terms used herein shall have the
meanings ascribed to them below:

     (1) Timeshare Interest:  means any vacation ownership undivided  fractional
interest in a specific timeshare unit, together with the right to use and occupy
such unit for a fixed period of time, on a recurring basis  (generally  annually
or every  other  year).  In  addition,  such term shall  include  all  ancillary
marketing programs relating to the promotion and sale of such interests.

     (2)  Seller  Resorts:  means all  parcels  of real  property  currently  or
hereafter owned by Grantors, their subsidiaries or affiliates.

     (3) Purchaser Timeshare Interest:  means any Timeshare Interest at a Seller
Resort not exceeding a two (2) week period of time.

     (4) Seller  Timeshare  Interest:  means any Timeshare  Interest at a Seller
Resort not less than a thirteen (13) week period of time.

          D.   Miscellaneous:

          (1) The parties  hereto agree that the  provisions  of Section A(2) of
         this Memorandum shall not restrict any portion of the Property which is


                                       61
<PAGE>

         used in or essential to the ski operations of the Grantors,  and that a
         release  properly  executed  pursuant  to  Section  B  hereof  shall be
         conclusive notice to third parties that this Memorandum does not affect
         such Property.
          (2) The Purchase  Agreement  has a minimum term of ten (10) years from
         the  issuance to the Grantee of the first  building  permit for any one
         Development Parcel,  subject to extension in certain  circumstances set
         forth in the Purchase  Agreement.  Grantors and Grantee agree that this
         Memorandum  shall be of no further force and effect with respect to the
         Property on July 31, 2009 unless an extension,  executed by all parties
         hereto,  is recorded  against the  Property on or before July 31, 2009;
         provided,  however,  that Grantee may unilaterally extend the effect of
         this  Memorandum  for a single,  five (5) year  period by  recording  a
         notice of  extension  against the  Property on or before July 31, 2009,
         which extension shall require only Grantee's signature.  Grantee hereby
         covenants to provide prior notice to Grantor of its intent to file such
         an extension.  If such an extension is recorded,  this Memorandum shall
         continue  in full force and effect as to any  Property to which it then
         applies until July 31, 2014; provided that the recording of such notice
         of extension shall not, in and of itself, effect any change in the term
         of the Purchase Agreement,  which document shall substantively  control
         with respect to this and all other issues set forth in the Memorandum.
          (3) This  Memorandum of Contract shall be construed in accordance with
         the laws of the state in which the Property is located.
          (4) This Memorandum of Contract is executed pursuant to the provisions
         contained  in the Purchase  Agreement  and is not intended to, and does
         not, vary the terms and conditions of such Purchase Agreement.
          (5) This  Memorandum of Contract  shall be subordinate to the mortgage
         lien of Owner's senior  lender,  and Grantee hereby agrees to execute a
         subordination agreement in favor of such lender upon request.
          (6) The terms of Section A(1) hereof shall not restrict the ability of
         purchasers  of  Seller  Timeshare  Interests  to rent or  exchange  any
         portion of those interests.

                                               AMERICAN SKIING COMPANY
     

                                              By:______________________________
                                                 Christopher E. Howard
                                                 Senior Vice President


                                                AMERICAN SKIING COMPANY
                                                RESORT PROPERTIES, INC.



                                                By:____________________________
                                                     Christopher E. Howard
                                                     Senior Vice President
 


                                       62
<PAGE>

                                                MARRIOTT OWNERSHIP RESORTS, INC.


                                                By:____________________________ 
                                                   Its:
                                                   Printed Name:


                                       63
<PAGE>




                                    EXHIBIT D

                             FORM OF PROMISSORY NOTE

$6,400,000.00                                               Date:  July 22, 1998

                              COMMERCIAL TERM NOTE

     PROMISE  TO PAY:  FOR VALUE  RECEIVED,  Marriott  Ownership  Resorts,  Inc.
("Maker")  promises  to pay to the  order  of  American  Skiing  Company  Resort
Properties,  Inc.  ("Holder")  the principal  amount of Six Million Four Hundred
Thousand  Dollars  ($6,400,000.00)  plus  interest,  costs and fees as described
herein.

         FIXED  INTEREST  RATE:  So long as there is no default under this Note,
interest  shall be  calculated  at the fixed rate of five and one- half  percent
(5.5%) per annum (the "Interest Rate").  Interest shall be computed on the basis
of actual days elapsed over a 360-day  year.  In the event of any default  under
this Note, the Holder may, in its discretion, determine that all amounts owed to
Holder shall  subsequently  bear  interest at a rate equal to the Interest  Rate
plus four percent (4%) per annum.

         PAYMENT SCHEDULE:  Maker shall pay the principal and interest according
to the  following  schedule:  (i) 4  installments  of principal in the amount of
$320,000.00 each, plus accrued interest, payable annually beginning on the first
anniversary of the date of this Note, followed by, (ii) a single balloon payment
on July 22, 2003 (the "Maturity Date") equal to all remaining  principal balance
of this Note,  together  with all accrued and unpaid  interest  and all fees and
charges payable to the Holder hereunder.  All payments will be made to Holder at
the address  designated  by Holder in lawful  currency  of the United  States of
America.  This  Note may be  prepaid  without  penalty  in part or in full on or
before the Maturity Date.

         PURCHASE AND DEVELOPMENT AGREEMENT:  This Note is delivered pursuant to
a Purchase and  Development  Agreement  among Maker,  Holder and American Skiing
Company dated July 22, 1998 (the "Purchase and Development  Agreement").  Holder
acknowledges that Maker's  obligations to make payments hereunder are subject to
the provisions of Article XIV of the Purchase and Development Agreement.  In the
event of a conflict between the terms of the Purchase and Development  Agreement
and the terms of this Note, the terms of the Purchase and Development  Agreement
shall control, except with regard to the Events of Default set forth herein.

         EVENTS OF DEFAULT:  The following shall be events of default under this
Note (each referred to herein as a "Default"): (1) failure by Maker to make full
and  prompt  payment  when  due,  of any  amount  required  to be paid to Holder
hereunder,  which failure  continues for 180 days following  receipt by Maker of
notice of the first such failure,  or continues for 90 days following receipt by
Maker of notice of any  subsequent  failure;  (2) the entry of a decree or order
for relief with  respect to the Maker in an  involuntary  case under the federal
bankruptcy law, as now or hereafter constituted, or any other applicable federal
or state bankruptcy,  insolvency or other similar law, or appointing a receiver,
liquidator,  trustee,  custodian (or similar  official) of or for the Maker,  or
ordering the  winding-up  or  liquidation  of its affairs  which is not promptly
contested  and  released  or  discharged   within  sixty  (60)  days;   (3)  the
commencement by the Maker of a voluntary case under the federal  bankruptcy law,
as now  constituted or hereafter  amended,  or any other  applicable  federal or
state  bankruptcy,  insolvency  or other similar law, or the consent by Maker to
the  appointment  of or taking  possession by a receiver,  liquidator,  trustee,
custodian (or other similar official) of or for the Maker or for any substantial
part of its property,  or the making by Maker of any  assignment for the benefit
of creditors, or the insolvency or the failure of the Maker generally to pay its
debts as such  debts  become  due,  or the  taking  of  action  by the  Maker in
furtherance of any of the foregoing.

         POWERS UPON DEFAULT:  Upon the occurrence of any Default or at any time
thereafter,  Holder may, at its option, without notice or demand, in addition to
any other right or remedy that Holder may have at law or in equity,  declare all
amounts owed under this Note to be immediately due and payable. The Maker waives


                                       64
<PAGE>

the rights of demand,  protest,  notice of  acceptance  of this Note,  notice of
default  or  dishonor,  presentment,  notice  of loans  made,  credit  extended,
collateral  received or delivered or other action taken by the Holder  hereunder
and all other demands and notices of any description.

         HOLDER'S  RIGHTS:  The Holder shall not be deemed to have waived any of
its rights  under this Note or  otherwise  unless  such waiver is in writing and
signed by the Holder.  Holder's  failure to require  strict  performance  of the
terms,  covenants  and  agreements of this Note, or any delay or omission on the
part of the Holder in  exercising  any right,  or any  acceptance  of partial or
adequate payment or performance  shall not waive,  affect or diminish such right
or Maker's duty of compliance  and  performance  therewith.  A waiver on any one
occasion  shall not be  construed as a bar to or waiver of the same or any other
right on the same or any future occasion.  All rights and remedies of the Holder
under  this  Note  shall  be  cumulative  and  may be  exercised  singularly  or
concurrently.  This Note may be  negotiated,  extended  or renewed by the Holder
without releasing the Maker.

         GOVERNING  LAW;  SEVERABILITY:  This  Note  shall be  construed  in all
respects in accordance  with, and governed by, the internal laws of the State of
Maine.  Wherever  possible,  each provision of this Note shall be interpreted in
such  manner as to be  effective  and valid  under  applicable  law,  but if any
provisions of this Note shall be prohibited by or invalid under  applicable law,
such  provision  shall be  ineffective  to the  extent  of such  prohibition  or
invalidity,  without  invalidating  the  remainder  of  such  provision  or  the
remaining  provisions  of this  Note.  This Note may not be  altered  or amended
except by an agreement in writing signed by both Holder and Maker.

         NOTICES:  All notices and other  communications  required or  permitted
under this Note shall be in writing and shall be  personally  delivered or given
by registered or certified  mail.  Any such notice shall be deemed  effective on
the  earlier of (a) the time when such  notice is  actually  received or (b) the
third day following its deposit in the United States mail,  postage  prepaid and
addressed  to the  addresses  of Maker and Holder set forth in the  Purchase and
Development Agreement.

         ASSIGNMENT;  SUCCESSORS AND ASSIGNS:  Neither party shall assign any of
its rights or  obligations  under this Note  without the other's  prior  written
consent,  which may be  withheld  in such  other  party's  absolute  discretion,
provided,  however,  that any such  assignment  shall not relieve the  assigning
party of its obligations hereunder. This Note shall be binding upon and inure to
the benefit of Maker, Holder and their respective permitted successors, assigns,
trustees,  receivers,  administrators,  personal  representatives,  legatees and
devisees.

                                    MAKER:   MARRIOTT OWNERSHIP RESORTS, INC.



______________________                  By: ___________________________
                                            Name:
                                            Title:



                                       65
<PAGE>