AMENDED, RESTATED AND CONSOLIDATED CREDIT AGREEMENT

                          Dated as of October 12, 1999

                                      Among


                             AMERICAN SKIING COMPANY
                      AND THE OTHER BORROWERS PARTY HERETO,
                                  as Borrowers,


                            THE LENDERS PARTY HERETO,

                                       and

                                BANKBOSTON, N.A.,
                            as Agent for the Lenders





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                                TABLE OF CONTENTS
                                                                            Page
Section 1.1 Definitions........................................................1
Section 1.2 Accounting Terms..................................................25

ARTICLE 2.  THE CREDITS.......................................................25
Section 2.1 The Revolving Credit..............................................25
Section 2.2 Making of Revolving Credit Advances...............................27
Section 2.3 Interest on Revolving Credit Advances.............................28
Section 2.4 The Term Loans....................................................28
Section 2.5 Interest on the Term Loans........................................29
Section 2.6 Election of LIBOR Pricing Options.................................29
Section 2.7 Additional Payments...............................................29
Section 2.8 Computation of Interest, Etc......................................30
Section 2.9 Fees..............................................................30
Section 2.10 Set-Off..........................................................30
Section 2.11 Sharing of Payments..............................................31
Section 2.12 Reduction of Commitment by the Borrowers.........................31
Section 2.13 Increased Costs, Etc.............................................32
Section 2.14 Changed Circumstances............................................33
Section 2.15 Use of Proceeds..................................................34
Section 2.16 Letters of Credit................................................35
Section 2.17 Collection of Accounts...........................................39
Section 2.18 Swing Line Commitment............................................39
Section 2.19 Procedure for Swing Line Borrowing; Interest on Swing Line Loans.40
Section 2.20 Refunded Swing Line Loans; Swing Line Loan Participations........41
Section 2.21 Release of Certain Liens.........................................42

ARTICLE 3.  CONDITIONS TO LOANS AND ADVANCES..................................44
Section 3.1 Conditions to the Term Loans and the Initial Revolving Credit
            Advance...........................................................44
Section 3.2 Conditions to All Loans...........................................47

ARTICLE 4.  PAYMENT AND REPAYMENT.............................................48
Section 4.1 Mandatory Repayments and Prepayment...............................48
Section 4.2 Voluntary Prepayments.............................................51
Section 4.3 Payment and Interest Cutoff.......................................51
Section 4.4 Payment or Other Actions on Non-Business Days.....................52
Section 4.5 Method and Timing of Payments.....................................52
Section 4.6 Payments Not at End of Interest Period............................52
Section 4.7 Currency..........................................................53
Section 4.8 Foreign Lenders...................................................53
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ARTICLE 5.  REPRESENTATIONS AND WARRANTIES....................................53
Section 5.1 Existence, Charter and Formation Documents, Etc...................53
Section 5.2 Principal Place of Business; Location of Records..................53
Section 5.3 Qualification.....................................................53
Section 5.4 Subsidiaries......................................................53
Section 5.5 Power.............................................................54
Section 5.6 Valid and Binding Obligations.....................................55
Section 5.7 Other Agreements..................................................55
Section 5.8 Payment of Taxes..................................................55
Section 5.9 Financial Statements..............................................55
Section 5.10 Other Materials Furnished........................................56
Section 5.11 Stock............................................................56
Section 5.12 Changes in Condition.............................................56
Section 5.13 Assets, Licenses, Patents, Trademarks, Etc.......................57
Section 5.14 Litigation.......................................................57
Section 5.15 Pension Plans....................................................57
Section 5.16 Outstanding Indebtedness.........................................58
Section 5.17 Environmental Matters............................................58
Section 5.18 Foreign Trade Regulations........................................59
Section 5.19 Governmental Regulations.........................................60
Section 5.20 Margin Stock.....................................................60
Section 5.21 Solvency.........................................................60
Section 5.22 Compliance with Other Instruments, Laws, Etc.....................60
Section 5.23 Absence of Financing Statements, Etc.............................60
Section 5.24 Perfection of Security Interests.................................61
Section 5.25 Bank Accounts....................................................61
Section 5.26 Fiscal Year......................................................61
Section 5.27 Tax Status.......................................................61
Section 5.28 Consummation of Issuance of Series B Preferred Stock.............61
Section 5.29 Series B Preferred Stock Agreements..............................61
Section 5.30 Cerberus Purchase Agreement; Cerberus Amendment and Waiver Letter
             Agreement; Certificate of Designation ...........................62
Section 5.31 Wolf Acquisition Agreement.......................................62

ARTICLE 6.  REPORTS AND INFORMATION...........................................62
Section 6.1 Interim Financial Statements and Reports..........................62
Section 6.2 Annual Financial Statements.......................................63
Section 6.3 Annual Budget.....................................................63
Section 6.4 Reports of Skier Visits...........................................63
Section 6.5 Notice of Defaults................................................64
Section 6.6 Notice of Litigation..............................................64
Section 6.7 Communications with Others........................................64

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Section 6.8 Reportable Events.................................................66
Section 6.9 Reports to other Creditors........................................66
Section 6.10 Communications with Independent Public Accountants...............66
Section 6.11 Environmental Reports............................................67
Section 6.12 Notices Under Certain Agreements.................................67
Section 6.13 Miscellaneous....................................................68

ARTICLE 7.  FINANCIAL COVENANTS...............................................68
Section 7.1 Ratio of Consolidated Total Debt to Consolidated EBITDA...........68
Section 7.2 Ratio of Consolidated Adjusted Cash Flow to Consolidated Debt
            Service...........................................................68
Section 7.3 Ratio of Consolidated EBITDA to Consolidated Interest Expense.....69
Section 7.4 Minimum Consolidated Net Worth....................................69
Section 7.5 Minimum Consolidated EBITDA.......................................69

ARTICLE 8.  AFFIRMATIVE COVENANTS.............................................70
Section 8.1 Existence and Business............................................70
Section 8.2 Taxes and Other Obligations.......................................70
Section 8.3 Maintenance of Properties and Leases..............................71
Section 8.4 Insurance.........................................................71
Section 8.5 Records, Accounts and Places of Business..........................71
Section 8.6 Inspection........................................................72
Section 8.7 Maintenance of Accounts...........................................72
Section 8.8 [Intentionally Omitted]...........................................72
Section 8.9 Ownership of Restricted Subsidiaries..............................72
Section 8.10 Survey and Surveyor's Certificate................................72
Section 8.11 Appraisals.......................................................73
Section 8.12 Lease Renewal....................................................73
Section 8.13 Use of Series B Preferred Stock Proceeds.........................73
Section 8.14 Environmental and Land Use Compliance............................73
Section 8.15 Interest Rate Protection.........................................73
Section 8.16 Independence of Unrestricted Subsidiaries........................73
Section 8.17 Forest Service Permits...........................................74
Section 8.18 Further Assurances...............................................74

ARTICLE 9.  NEGATIVE COVENANTS................................................74
Section 9.1 Restrictions on Indebtedness......................................74
Section 9.2 Restriction on Liens..............................................76
Section 9.3 Investments.......................................................78
Section 9.4 Mergers, Acquisitions, Etc........................................79
Section 9.5 Transactions with Affiliates......................................79
Section 9.6 Distributions.....................................................80
Section 9.7 Capital Expenditures..............................................80

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Section 9.8 Dispositions of Assets............................................81
Section 9.9 Assumptions, Guaranties, Etc. of Indebtedness of Other Persons....81
Section 9.10 ERISA............................................................81
Section 9.11 Sale and Leaseback...............................................81
Section 9.12 Restrictive or Inconsistent Agreements...........................81
Section 9.13 Limitations on Real Estate Operations............................81
Section 9.14 Fiscal Year......................................................82
Section 9.15 Limitation on Excess Proceeds....................................82
Section 9.16 No Amendment of Subordinated Notes, Cerberus Purchase Agreement, or
             Series B Preferred Stock Agreements............................. 82
Section 9.17 Exchange of Cerberus 10 1/2% Repriced Convertible Exchangeable
             Preferred Stock and Amended and Restated Registration Rights
             Agreement Penalties..............................................82
Section 9.18 Limitation on Issuance of Capital Stock..........................82

ARTICLE 10.  EVENTS OF DEFAULT AND REMEDIES...................................82
Section 10.1 Events of Default................................................82
Section 10.2 Remedies.........................................................86
Section 10.3 Distribution of Proceeds.........................................86

ARTICLE 11.  CONSENTS; AMENDMENTS; WAIVERS; REMEDIES..........................87
Section 11.1 Actions by Lenders...............................................87
Section 11.2 Actions by Borrowers.............................................88
ARTICLE 12.  SUCCESSORS AND ASSIGNS...........................................89
Section 12.1 General..........................................................89
Section 12.2 Assignments......................................................89
Section 12.3 Participations...................................................90

ARTICLE 13.  THE AGENT........................................................92
Section 13.1 Authorization and Action.........................................92
Section 13.2 Agent's Reliance, Etc............................................93
Section 13.3 Agent as a Lender................................................93
Section 13.4 Lender Credit Decision...........................................93
Section 13.5 Indemnification of Agent.........................................94
Section 13.6 Successor Agent..................................................94
Section 13.7 Amendment of Article 13..........................................94

ARTICLE 14.  MISCELLANEOUS....................................................94
Section 14.1 Notices..........................................................94
Section 14.2 Merger...........................................................95
Section 14.3 Governing Law; Consent to Jurisdiction...........................95
Section 14.4 Counterparts.....................................................96

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Section 14.5 Expenses and Indemnification.....................................96
Section 14.6 Confidentiality..................................................97
Section 14.7 Reliance on Representations and Actions of American Ski..........98
Section 14.8 Joint and Several Obligations....................................98
Section 14.9 Continuity of 1997 Credit Agreements.............................98
Section 14.10 WAIVER OF JURY TRIAL............................................99



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                         LIST OF EXHIBITS AND SCHEDULES

Exhibit A-1           Form of Revolving Credit Note
Exhibit A-2           Form of Amended, Restated and Consolidated Term Loan Note
Exhibit A-3           Form of Amended, Restated and Consolidated Swing Line Note
Exhibit B             Form of Notice of Revolving Credit or Swing Line Borrowing
Exhibit C             Form of Compliance Certificate
Exhibit D             Form of Pricing Notice
Exhibit E-1           Form of Amended, Restated and Consolidated Security
                      Agreement
Exhibit E-2           Form of Amended and Restated Guarantor Security Agreement
Exhibit F             Form of Amended and Restated Unlimited Guaranty Agreement
Exhibit G             Form of Amended and Restated Fee and Leasehold Mortgage,
                      Assignment of Leases and Rents, Financing Statement and
                      Security Agreement
Exhibit H             Form of Amended and Restated Collateral Assignment of
                      Leases and Rents
Exhibit I             [Intentionally Omitted.]
Exhibit J             Form of Amended and Restated Assignment in Trust
Exhibit K             Form of Amended and Restated Assignment of Trademarks
Exhibit L             Form of Amended and Restated Assignment of Licenses,
                      Contracts and Permits
Exhibit M             Form of Amended and Restated Stock Pledge Agreement
Exhibit N             Form of Amended and Restated Hazardous Materials
                      Indemnification Agreement
Exhibit O             Form of Opinions of Borrowers' Counsel
Exhibit P             Form of Assignment and Acceptance Agreement
Exhibit Q             Form of Amended and Restated Otten Subordination Agreement
Exhibit R             Acknowledgment of Unrestricted Subsidiary
Exhibit S             Form of Joinder

Schedule 1            Schedule of Commitment Percentages
Schedule 2            Pricing Schedule
Schedule 2.1          Schedule of Funding of First Revolving Credit Advance and
                      Term Loans by Certain Lenders.
Schedule 2.16         Schedule of Letters of Credit
Schedule 2.17         Schedule of Bank Accounts
Schedule 3.1(q)       Schedule of Certain Leases
Schedule 5.2          Schedule of Principal Places of Business
Schedule 5.4(a)       Schedule of Subsidiaries and Issued and Outstanding Stock
Schedule 5.4(b)       Transactions with Unrestricted Subsidiaries
Schedule 5.8          Schedule of Certain Tax Matters
Schedule 5.9          Schedule of Financial Statements
Schedule 5.14         Schedule of Litigation
Schedule 5.13         Schedule of Licenses, Patents, Copyrights and Trademarks
Schedule 5.13(c)      Schedule of Certain Leasehold Personal Property Interests
                      and Personal Property Lease Agreements
Schedule 5.15         Schedule of Pension Plans
Schedule 5.16         Schedule of Indebtedness, Liens, Charges and Encumbrances

<PAGE>

Schedule 5.17         Environmental Matters
Schedule 8.4          Schedule of Insurance
Schedule 8.9          Schedule of Ownership of Restricted Subsidiaries
Schedule 8.12         Schedule of Leases
Schedule 8.13         Schedule of Use of Proceeds of Series B Preferred Stock
Schedule 8.14         Schedule of Environmental and Land Use Compliance
Schedule 8.17         Schedule of Forest Service Permits
Schedule 9.3          Investment Policy and Investments


<PAGE>





               AMENDED, RESTATED AND CONSOLIDATED CREDIT AGREEMENT

         This AMENDED,  RESTATED AND  CONSOLIDATED  CREDIT  AGREEMENT is entered
into as of October 12, 1999 by and among  AMERICAN  SKIING  COMPANY,  a Delaware
corporation  ("American  Ski") and the other  Borrowers  from time to time party
hereto (each with American Ski a "Borrower" and collectively,  the "Borrowers"),
the Lenders from time to time party  hereto,  and  BANKBOSTON,  N.A., a national
banking  association,  as Agent for the lenders  from time to time party  hereto
(the "Agent").

                                    Recitals

         American  Ski  (as  successor  to  American  Skiing  Company,  a  Maine
corporation),  certain of the other Borrowers,  the Lenders party hereto and the
Agent are parties to (a) an Amended and Restated  Credit  Agreement  dated as of
November 12, 1997, as amended (the "ASC East Credit Agreement") and (b) a Credit
Agreement  dated as of  November  12,  1997,  as amended  (the "ASC West  Credit
Agreement"  and together  with the ASC East Credit  Agreement,  the "1997 Credit
Agreements").  American  Ski and the other  Borrowers,  jointly  and  severally,
desire to amend, restate and consolidate their existing credit facilities on the
terms and  conditions  set  forth  herein.  The  credit  facilities  established
hereunder evidence the Borrowers'  obligations under the 1997 Credit Agreements,
as amended,  restated and consolidated hereunder,  and future advances hereunder
will be used (a) to fund  certain  capital  expenditures  and (b) to provide for
on-going  working capital and other specified  needs. The Lenders are willing to
provide such financing on the terms and conditions set forth herein,  including,
among  others,  that  American Ski and the other  Borrowers  amend,  restate and
consolidate the 1997 Credit Agreements as provided herein. The Borrowers conduct
their  operations  on a  combined  basis  with  shared  management,  purchasing,
planning,  financial  controls  and  other  functions,  and  the  access  of all
Borrowers to the credit facilities  provided hereunder benefits all Borrowers in
connection with their various businesses.

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency  of which are  hereby  acknowledged,  (a)  American  Ski,  the other
Borrowers,  the Agent and the Lenders party to the 1997 Credit Agreements hereby
amend,  restate and consolidate the 1997 Credit Agreements in their entirety and
(b) all the parties hereto hereby agree as follows:

                   ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS

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




                                       1
<PAGE>


                  "Affiliate"  shall mean (a) any director or executive  officer
         of American Ski or any of its  Subsidiaries  or any Person  owning more
         than 5% of the  outstanding  common stock of American Ski or any of its
         Subsidiaries  and (b) any Person that controls,  is controlled by or is
         under  common  control  with  such a Person  or any  Affiliate  of such
         Person.  For purposes of this  definition,  "control" of a Person shall
         mean the possession,  directly or indirectly, of the power to direct or
         cause the direction of its management or policies,  whether through the
         ownership of voting securities, by contract or otherwise.

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

                  "Aggregate  Outstanding  Revolving  Credit  Extensions"  shall
         mean, as to any Revolving Credit Lender at any time, an amount equal to
         the sum of (a) the aggregate  principal  amount of all Revolving Credit
         Advances made by such Lender then  outstanding  plus (b) such Revolving
         Credit Lender's Revolving Credit Commitment Percentage of the Letter of
         Credit Exposure then outstanding.

                  "Agreement" shall mean this Amended, Restated and Consolidated
         Credit  Agreement,  as  amended  or  supplemented  from  time to  time.
         References  to Articles,  Sections,  Exhibits,  Schedules  and the like
         refer to the Articles,  Sections,  Exhibits,  Schedules and the like of
         this Agreement, unless otherwise indicated, as amended and supplemented
         from time to time.

                  "Alpine Pipeline" shall mean Alpine Pipeline Company, a
         Vermont corporation.

                  "Applicable Base Rate" shall mean the sum of (a) the Base Rate
         plus (b) the Base Rate Margin, as each is in effect from time to time.

                  "Applicable  LIBOR  Rate"  shall mean the sum of (a) the LIBOR
         Rate plus (b) the LIBOR Rate Margin,  as each is in effect from time to
         time.

                  "Applicable  Money  Market Rate" shall mean the sum of (a) the
         Money Market Rate plus (b) the LIBOR Rate Margin,  as each is in effect
         from time to time.

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

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

                                       2
<PAGE>



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

                  "Assignment and Acceptance Agreement" -- See Section 12.2(a)
         hereof.

                  "Attitash Debentures" shall mean the Subordinated Debentures
         due 2002 issued by L.B.O. Holding, Inc. in the aggregate outstanding
         principal amount as of the date hereof as set forth on Schedule 5.16
         hereto.

                  "Available Revolving Credit Amount" shall mean at any time the
         Maximum Revolving Credit Amount in effect at such time (including after
         giving  effect to any  mandatory  reductions  of the Maximum  Revolving
         Credit Amount under Section 4.1(c)), less the Letter of Credit Exposure
         and less the  aggregate  principal  amount  of Swing  Line  Loans  then
         outstanding.

                  "Available  Revolving Credit Commitment" shall mean, as to any
         Revolving Credit Lender at any time, an amount equal to the excess,  if
         any, of (a) the product of (i) such Revolving Credit Lender's Revolving
         Credit Commitment  Percentage  multiplied by (ii) the Maximum Revolving
         Credit  Amount  over  (b)  such  Revolving  Credit  Lender's  Aggregate
         Outstanding Revolving Credit Extensions.

                  "Base Capital Expenditure Amount" shall mean $30,000,000.

                  "Base Rate" shall mean the greater of (a) the rate of interest
         announced  from time to time by the Agent at its head office in Boston,
         Massachusetts as its Base Rate and (b) the Federal Funds Effective Rate
         plus 1/2 of 1% per annum (rounded upwards, if necessary,  to the next _
         of 1%).

                  "Base Rate Loan" shall mean (a) any Revolving  Credit  Advance
         bearing  interest at a fluctuating  rate determined by reference to the
         Applicable  Base  Rate,  (b) any  portion  of the  Term  Loans  bearing
         interest  at  a  fluctuating   rate  determined  by  reference  to  the
         Applicable  Base Rate and (c) any portion of a Swing Line Loan  bearing
         interest  at  a  fluctuating   rate  determined  by  reference  to  the
         Applicable Base Rate.

                  "Base Rate Margin"  shall mean a rate per annum  determined in
         accordance with the Pricing Schedule.

                  "Business  Day" shall mean (a) for all purposes  other than as
         covered by clause (b) below,  any day other than a Saturday,  Sunday or
         legal holiday on which banks in Boston,  Massachusetts are open for the
         conduct of a substantial part of their commercial  banking business and


                                       3
<PAGE>

         (b) with respect to all notices and  determinations in connection with,
         and  payments of principal  and interest on, LIBOR Rate Loans,  any day
         that is a Business  Day  described in clause (a) and that is also a day
         for trading by and between banks in U.S.  Dollar deposits in the London
         interbank eurodollar market.

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

                  "Capital  Expenditure  Reinvestment  Amount"  shall  mean  the
         amount of proceeds of  Permitted  Dispositions  that is  reinvested  in
         Capital Expenditures within 365 days of such Permitted Dispositions.

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

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

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

                  "Cash Insurance  Proceeds" shall mean the proceeds received by
         American Ski or any of its Restricted  Subsidiaries  under any property
         and  casualty   insurance  policy  carried  by  American  Ski  or  such
         Restricted Subsidiary.

                  "Cash  Proceeds"  shall mean,  with  respect to any  Permitted
         Disposition,  the aggregate cash payments  (including any cash received
         by way of  deferred  payment  pursuant to a note  receivable  issued in
         connection  with  such  Permitted  Disposition,  but  only as and  when
         received)   received  by  American   Ski  or  any  of  its   Restricted
         Subsidiaries from such Permitted Disposition.

                  "Cerberus  Amendment and Waiver Letter  Agreement"  shall mean
         the Cerberus  Amendment and Waiver Letter  Agreement  dated November 3,


                                       4
<PAGE>

         1997 by and between  Madeleine  LLC and  American  Ski  relating to the
         exchange of the Series A  Exchangeable  Preferred  Stock and the Senior
         Exchangeable Notes into the 10 1/2% Repriced  Convertible  Exchangeable
         Preferred Stock,  the Series A Certificate of Designation,  the Amended
         and Restated Registration Rights Agreement dated as of November 3, 1997
         (the  "Amended and Restated  Registration  Rights  Agreement")  and the
         amendment of certain provisions of the Cerberus Purchase Agreement.

                  "Cerberus  Investment"  shall  mean the  initial  purchase  by
         Madeleine  LLC of the  Series A  Exchangeable  Preferred  Stock and the
         Senior Exchangeable Notes pursuant to the Cerberus Purchase Agreement.

                  "Cerberus  Purchase   Agreement"  shall  mean  the  Securities
         Purchase Agreement dated as of July 2, 1997 between American Ski (f/k/a
         ASC Holdings,  Inc.) and Madeleine LLC as the purchaser thereunder,  as
         amended by the First Amendment to Securities  Purchase  Agreement dated
         as of July 25, 1997, the Cerberus Amendment and Waiver Letter Agreement
         and the letter  agreement dated July 20, 1999 by and between  Madeleine
         LLC and American Skiing Company.

                  "Closing  Date"  shall  mean  the  date  on  which  all of the
         conditions set forth in Section 3.1 have been satisfied.

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

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

                  "Commission"shall mean the Securities and Exchange Commission.

                  "Commitment  Percentage" shall mean as to each Lender, the sum
         of its  Revolving  Credit  Commitment  Percentage  and  its  Term  Loan
         Commitment Percentage as set forth on Schedule 1 hereto.

                  "Compliance  Certificate" shall mean a certificate in the form
         of  Exhibit C hereto and  executed  by the chief  executive  officer or
         chief financial officer of American Ski.

                  "Consolidated" and  "Consolidating,"  when used with reference
         to any term, mean that term (or the terms  "combined" and  "combining,"
         as the case may be, in the case of  partnerships,  joint  ventures  and
         Affiliates  that are not  Subsidiaries)  as applied to the  accounts of
         American  Ski (or other  specified  Person)  and all of its  Restricted


                                       5
<PAGE>

         Subsidiaries  (or other specified  Persons),  or such of its Restricted
         Subsidiaries  as  may  be  specified,  consolidated  (or  combined)  in
         accordance  with  generally  accepted  accounting  principles  and with
         appropriate  deductions  for  minority  interests in  Subsidiaries,  as
         required by generally accepted accounting principles.

                  "Consolidated  Adjusted Cash Flow" shall mean (a) Consolidated
         EBITDA  (before  any  adjustments  to reflect  acquisitions,  sales and
         exchanges  of  property  during  such  period)  for each fiscal year of
         American Ski and its  Restricted  Subsidiaries  less (b) the sum of (i)
         the lesser of actual total Capital  Expenditures  or  $10,000,000,  and
         (ii) cash taxes paid.

                  "Consolidated   Debt  Service"  shall  mean  the  sum  of  (a)
         Consolidated  Interest  Expense,  (b) scheduled  principal  payments on
         Indebtedness for borrowed money and (c) without duplication with clause
         (b), scheduled reductions in the amount of the Maximum Revolving Credit
         Amount under clause (b) of the definition thereof, in each case for the
         period under review.

                  "Consolidated   EBITDA"  shall  mean  for  the  most  recently
         completed  four fiscal  quarters,  (a) net income or (loss) of American
         Ski and its Restricted  Subsidiaries on a consolidated basis determined
         in accordance with generally  accepted  accounting  principles  without
         giving effect to extraordinary  gains and losses from sales,  exchanges
         and  other  dispositions  of  property  not in the  ordinary  course of
         business,  and nonrecurring items and excluding from the calculation of
         net income all revenues from  Unrestricted  Subsidiaries  except to the
         extent received by American Ski or its Restricted  Subsidiaries in cash
         as a loan  repayment,  dividend  or other  distribution,  plus,  to the
         extent  deducted in  calculating  net income,  (b) the sum of,  without
         duplication,   (i)  depreciation   expense  of  American  Ski  and  its
         Restricted Subsidiaries,  (ii) amortization expense of American Ski and
         its Restricted  Subsidiaries,  (iii) Consolidated Interest Expense plus
         the non-cash  portion of consolidated  interest expense on Consolidated
         Funded Debt, (iv) income tax expense of American Ski and its Restricted
         Subsidiaries,  (v)  other  non-cash  items  of  American  Ski  and  its
         Restricted  Subsidiaries,   (vi)  non-recurring  expenses  incurred  in
         connection with the issuance of the Series B Preferred Stock and/or the
         amendment,  restatement and consolidation of the 1997 Credit Agreements
         on the date hereof and (vii) up to $2,000,000  of losses  incurred from
         the disposition of retail inventory through October 31, 1999.

                  "Consolidated  Excess Cash Flow"  shall mean,  for any period,
         Consolidated EBITDA less the sum of (a) Consolidated  Interest Expense,
         (b) cash taxes paid, (c) required  principal  payments of  Indebtedness
         and (d) the Base Capital  Expenditure  Amount, each determined for such
         period.

                  "Consolidated   Funded  Debt"  means,   as  of  each  date  of
         determination,  without  duplication (a) all  Indebtedness for borrowed
         money of  American  Ski and its  Restricted  Subsidiaries  on that date


                                       6
<PAGE>

         (including   without   limitation  all  obligations   with  respect  to
         Capitalized  Leases),  (b) the aggregate  amount  available for drawing
         under all letters of credit  outstanding  on that date  (including  the
         Letters of Credit) for which American Ski or any Restricted  Subsidiary
         is the account party (excluding however, the aggregate amount available
         for drawing  under  letters of credit  issued to lenders and lessors of
         Indebtedness  of the type  described  in clause  (a) in support of such
         Indebtedness),  and (c) the aggregate amount drawn under all letters of
         credit  (including the Letters of Credit) for which American Ski or any
         Restricted  Subsidiary is the account party and for which the issuer of
         such letters of credit has not been reimbursed on that date.

                  "Consolidated   Intangible   Assets"   shall   mean   (a)  all
         intercompany   loans  (without   duplication  for  exclusions  made  in
         accordance with generally accepted accounting  principles) and loans to
         any employee or officer of American Ski or any of its Subsidiaries, and
         all amounts payable to American Ski or any of its Subsidiaries from any
         of the aforesaid  persons,  (b) all assets which would be classified as
         intangible  assets  under  generally  accepted  accounting   principles
         consistently applied, including, without limitation,  goodwill (whether
         representing  the excess of cost over book value of assets  acquired or
         otherwise),  patents, trademarks, trade names, copyrights,  franchises,
         and deferred charges (including,  without limitation,  unamortized debt
         discount and expense,  organization costs, and research and development
         costs), (c) treasury stock and minority interests in other corporations
         or business organizations,  (d) cash set apart and held in a sinking or
         other analogous fund established for the purpose of redemption or other
         retirement of capital stock and (e) to the extent not already  deducted
         from total assets, reserves for depreciation,  depletion,  obsolescence
         and/or   amortization   of  properties   and  all  other   reserves  or
         appropriations of retained earnings which, in accordance with generally
         accepted  accounting  principles   consistently   applied,   should  be
         established in connection  with the business  conducted by American Ski
         and its Subsidiaries.

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

                  "Consolidated  Net  Income"  shall  mean  the net  income  (or
         deficit)   from   operations   of  American  Ski  and  its   Restricted
         Subsidiaries,  after taxes,  determined  in accordance  with  generally
         accepted accounting principles consistently applied.

                  "Consolidated  Net Worth" shall mean,  at any date as of which
         the amount thereof shall be determined,  (a) the consolidated assets of
         American Ski and its  Restricted  Subsidiaries  (excluding  from assets
         investments in  Unrestricted  Subsidiaries)  less (b) the  consolidated
         total  liabilities  of American  Ski and its  Restricted  Subsidiaries,
         determined in accordance with generally accepted accounting  principles
         consistently applied.

                                       7
<PAGE>

                  "Consolidated  Senior Secured Debt" shall mean the outstanding
         principal amount of the Term Loans, the Revolving Credit Advances,  the
         Swing Line Loans and all other  Consolidated  Funded  Debt  (other than
         Subordinated Indebtedness).

                  "Consolidated  Total  Debt"  shall  mean  the  sum of (a)  the
         outstanding principal amount of the Revolving Credit Advances, the Term
         Loans and the Swing Line  Loans,  (b)  without  duplication,  any claim
         required to be paid  pursuant  to  Guaranties  of American  Ski and its
         Restricted  Subsidiaries,  (c) the Senior  Subordinated  Notes, (d) all
         other  Consolidated  Funded  Debt of  American  Ski and its  Restricted
         Subsidiaries on a consolidated basis and (e) without  duplication,  the
         stated  amount of all  letters  of credit  issued  for the  account  of
         American Ski or any Restricted Subsidiary.

                  "Continuing Directors" means, as of any date of determination,
         any  member of the board of  directors  of  American  Ski who (a) was a
         member  of the  board  of  directors  on  October  8,  1999  or (b) was
         nominated  for election to the board of directors  with the approval of
         at least two-thirds of the Continuing Directors who were members of the
         board of directors at the time of such nomination or election.

                  "Credit Participants" -- See Section 12.3 hereof.

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

                  "Direct  Unrestricted  Subsidiary  Investments" shall mean the
         sum  of (a)  Investments  made  by  American  Ski  and  its  Restricted
         Subsidiaries in Unrestricted  Subsidiaries in cash or cash equivalents,
         plus (b) the book value of assets other than cash and cash  equivalents
         and other than Indirect Unrestricted Subsidiary Investments contributed
         to or invested  by  American  Ski and its  Restricted  Subsidiaries  in
         Unrestricted  Subsidiaries less (c) cash dividends or distributions and
         repayments  of the principal  amount of any loans  received by American
         Ski and its Restricted Subsidiaries from such Unrestricted Subsidiaries
         after the date such  Investments  described in clauses (a) and (b) were
         made.

                  "Distribution"  shall mean: (a) the  declaration or payment of
         any  dividend  on or in  respect  of any shares of any class of capital
         stock of American Ski or any of its Restricted Subsidiaries, other than
         dividends  payable solely in shares of common stock of the  corporation
         involved,  (b)  the  purchase,  redemption,  or  other  acquisition  or
         retirement  of any shares of any class of capital stock of American Ski
         or any of its Restricted  Subsidiaries directly or indirectly,  (c) any


                                       8
<PAGE>

         other  distribution  on or in  respect  of any  shares  of any class of
         capital  stock of American Ski or any  Restricted  Subsidiary,  (d) any
         setting apart or allocating  any sum for the payment of any dividend or
         distribution  or for the  purchase,  redemption  or  retirement  of any
         shares of capital  stock of American Ski or any  Restricted  Subsidiary
         and (e) any payment of principal on or any  retirement or defeasance of
         Subordinated Indebtedness.

                  "EBITDA"  shall  mean for the  most  recently  completed  four
         fiscal quarters, (a) net income or (loss) determined in accordance with
         generally  accepted  accounting  principles  without  giving  effect to
         extraordinary  gains  and  losses  from  sales,   exchanges  and  other
         dispositions  of property not in the ordinary  course of business,  and
         nonrecurring items and excluding from the calculation of net income all
         revenues from Unrestricted  Subsidiaries  except to the extent received
         by  American  Ski or its  Restricted  Subsidiaries  in  cash  as a loan
         repayment,    dividend,   redemption,   stock   repurchase   or   other
         distribution,  plus, to the extent  deducted in calculating net income,
         (b) the sum of, without  duplication,  (i) depreciation  expense,  (ii)
         amortization expense,  (iii) interest expense plus the non-cash portion
         of  interest  expense on funded  debt,  (iv) income tax expense and (v)
         other non-cash items.

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

                  "Environmental Law" means any judgment,  decree, order, common
         law rule, statute, act, law, code, ordinance,  permit, license, rule or
         regulation pertaining to environmental matters, or any federal,  state,
         county or local statute,  regulation,  code, ordinance, order or decree
         relating to public health, welfare, the Environment, or to the storage,
         handling,  treatment,  transportation,  use or  generation of Hazardous
         Materials  in or at the  workplace,  or to  worker  health  or  safety,
         whether now existing or hereafter enacted.

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

                  "Event of Default" -- See Section 10.1 hereof.

                  "Excess Cash Flow Leverage  Ratio" shall mean the ratio of (a)
         Consolidated  Senior  Secured  Debt plus the  Unused  Revolving  Credit
         Commitments  to (b)  Consolidated  EBITDA as of the end of the relevant
         Excess Cash Payment Period.

                  "Excess Cash  Payment  Date" shall mean the earlier of (a) the
         date of delivery of the financial statements pursuant to Section 6.2 in
         respect  of  American  Ski's  fiscal  year then  ended and (b) the date
         occurring  90 days after the last day of each  fiscal  year of American
         Ski (in either  case,  commencing  with its fiscal  year ended July 25,
         1999).

                  "Excess Cash Payment  Period" shall mean,  with respect to the
         repayment  required on each Excess Cash Payment Date,  the  immediately


                                       9
<PAGE>

         preceding  fiscal year of American Ski and its  Subsidiaries,  provided
         that the first Excess Cash Payment Period hereunder shall be the period
         from and including July 27, 1998 to and including July 25, 1999.

                  "Excess Real  Property"  shall mean  unimproved  parcels which
         constitute  part of any Mortgaged  Property and are not then  currently
         used or  contemplated  (except  with  respect  to lodging  and  related
         infrastructure)  to be used in  connection  with the  operation of such
         Mortgaged  Property  as a ski  resort  as  then  configured,  including
         lodging, other recreational uses and related amenities.

                  "Existing  Letters of Credit" shall mean the Letters of Credit
         described  as such on  Schedule  2.16  hereto and issued by the Issuing
         Bank.

                  "Fee Letter" -- See Section 2.9 hereof.

                  "Federal  Funds  Effective  Rate"  shall  mean for any day,  a
         fluctuating  interest  rate per annum equal to the weighted  average of
         the rates on overnight  Federal funds  transactions with members of the
         Federal Reserve System arranged by Federal funds brokers,  as published
         for such  day (or,  if such  day is not a  Business  Day,  for the next
         preceding  Business  Day) by the  Federal  Bank of New York or, if such
         rate is not so  published  for any day  that  is a  Business  Day,  the
         average of the quotations for such day on such transactions received by
         the Bank from  three  Federal  funds  brokers  of  recognized  standing
         selected by the Agent.

                  "Generally   accepted   accounting   principles"   shall  mean
         generally  accepted  accounting  principles  as defined by  controlling
         pronouncements  of the Financial  Accounting  Standards  Board, as from
         time to time supplemented and amended.

                  "Governmental  Authority" shall mean any nation or government,
         any  state  or  other  political  subdivision  thereof  and any  entity
         exercising   executive,    legislative,    judicial,    regulatory   or
         administrative functions of or pertaining to government.

                  "Guarantors" shall mean each of AJT, Inc. and WVSAL, Inc.

                  "Guaranty  Agreements"  shall mean the  Amended  and  Restated
         Guaranty  Agreements  of even date  herewith  in the form of  Exhibit F
         hereto  from  each of the  Guarantors  in  favor of the  Agent  and the
         Lenders.

                  "Guaranty" or  "Guarantee" or  "Guaranties"  shall include any
         arrangement  whereby a Person is or  becomes  liable in  respect of any
         Indebtedness or other  obligation of another and any other  arrangement
         whereby  credit is  extended  to  another  obligor  on the basis of any


                                       10
<PAGE>

         promise of a  guarantor,  whether that promise is expressed in terms of
         an obligation to pay the  Indebtedness of such obligor,  or to purchase
         or lease assets under  circumstances  that would enable such obligor to
         discharge one or more of its  obligations,  or to maintain the capital,
         the working capital,  solvency or general  financial  condition of such
         obligor, whether or not such arrangement is listed in the balance sheet
         of the guarantor or referred to in a footnote thereto.

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

                  "Heavenly Subsidiaries" shall mean Heavenly Valley Ski &
         Resort Corporation, Heavenly Corporation and Heavenly Valley, Limited
         Partnership.

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

                  "Indemnity  Agreements"  the  Amended and  Restated  Hazardous
         Materials  Indemnification  Agreements  of even date herewith from each
         Borrower  to the  Agent,  each in  substantially  the form of Exhibit N
         hereto.

                  "Indirect Unrestricted  Subsidiary Investments" shall mean (a)
         the book value of Excess Real Property  contributed  by American Ski or
         any Restricted  Subsidiary to Unrestricted  Subsidiaries  less (b) cash
         dividends or  distributions  and repayments of the principal  amount of
         any loans received by American Ski or its Restricted  Subsidiaries from


                                       11
<PAGE>

         such  Unrestricted  Subsidiaries  after the date such  Investments were
         made in excess of those  referred to in clause (c) of the definition of
         Direct  Unrestricted  Subsidiary  Investments in an amount equal to the
         sum of  Investments  described in clauses (a) and (b) of the definition
         of Direct Unrestricted Subsidiary Investments.

                  "Interest  Period"  shall mean with respect to each LIBOR Rate
         Loan,  the  period  commencing  on the date of such LIBOR Rate Loan and
         ending one, two, three or six months  thereafter,  as the Borrowers may
         request as provided in Sections 2.2(a) or 2.6 hereof, provided that:

                           (a) any  Interest  Period  (other  than  an  Interest
         Period  determined  pursuant  to clauses  (c) or (d) below)  that would
         otherwise  end on a day that is not a Business Day shall be extended to
         the next succeeding  Business Day unless such Business Day falls in the
         next calendar  month,  in which case such Interest  Period shall end on
         the immediately preceding Business Day;

                           (b) any  Interest  Period  that  begins  on the  last
         Business  Day of a  calendar  month (or on a day for which  there is no
         numerically  corresponding day in the calendar month at the end of such
         Interest  Period) shall,  subject to clauses (c) and (d) below,  end on
         the last Business Day of a calendar month;

                           (c) any  Interest  Period with respect to a Revolving
         Credit  Advance that would  otherwise  end after the  Revolving  Credit
         Termination Date shall end on the Revolving Credit Termination Date;

                           (d) any  Interest  Period with respect to any portion
         of the Term Loans that would otherwise end after the Term Loan Maturity
         Date shall end on the Term Loan Maturity Date; and

                           (e)  notwithstanding  clauses  (c) and (d) above,  no
         Interest  Period  shall have a duration of less than one month,  and if
         any Interest  Period  applicable  to any LIBOR Rate Loan would be for a
         shorter period, such Interest Period shall not be available hereunder.

                  "Interest Rate Protection  Agreement"  shall mean any interest
         rate swap agreement,  interest rate cap agreement, interest rate collar
         agreement,   interest  rate  hedging  agreement,  interest  rate  floor
         agreement or other similar agreement or arrangement.

                  "Investment"   shall   mean  (a)  any   stock,   evidence   of
         Indebtedness  or  other  security  of  another  Person,  (b) any  loan,
         advance,  contribution  to  capital,  extension  of credit  (except for
         current trade and customer  accounts  receivable  for inventory sold or
         services  rendered in the  ordinary  course of business  and payable in


                                       12
<PAGE>

         accordance  with  customary  trade  terms) to another  Person,  (c) any
         purchase of (i) stock or other securities of another Person or (ii) any
         business  or  undertaking  of another  Person  (whether  by purchase of
         assets  or  securities),  any  commitment  or  option  to make any such
         purchase if, in the case of an option, the aggregate consideration paid
         for such option was in excess of $100 or (d) any other  investment,  in
         all cases whether  existing on the date of this Agreement or thereafter
         made.

                  "Issuing Bank" shall mean the Agent.

                  "Kamori" shall mean Kamori International Corporation, a
         Delaware corporation.

                  "Kamori  Acquisition"  shall mean the acquisition by ASC West,
         Inc.  (which  has  been  merged  into  American  Ski)  of  all  of  the
         outstanding   stock  and   partnership   interests  in  the   Steamboat
         Subsidiaries  and the  Heavenly  Subsidiaries  pursuant  to the  Kamori
         Acquisition Documents.

                  "Kamori  Acquisition  Documents"  shall  mean  (a)  the  Stock
         Purchase  Agreement  dated August 1, 1997 among Kamori,  ASC West, Inc.
         and American Ski,  including  all  schedules,  exhibits and  amendments
         thereto  (the  "Kamori  Stock  Purchase  Agreement")  and (b) all other
         agreements,  instruments and documents delivered in connection with the
         Kamori Acquisition.

                  "Kamori  Combined  Entities"  shall mean Kamori,  the Heavenly
         Subsidiaries and the Steamboat Subsidiaries, collectively.

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

                  "Lender Agreements" shall mean this Agreement, the Term Notes,
         the  Revolving   Credit  Notes,  the  Swing  Line  Note,  the  Guaranty
         Agreements,  the Indemnity  Agreements,  the Security  Agreements,  the
         Otten  Subordination  Agreement,  the  applications  and  reimbursement
         agreements  relating  to the  Existing  Letters of Credit and any other
         present or future  agreement  from time to time  entered  into  between
         American Ski or any of its Restricted Subsidiaries and the Agent or any
         Lender (except for any such agreement  which  specifically  provides in
         writing that it is not a Lender  Agreement),  each as from time to time
         amended or supplemented,  and all statements,  reports and certificates
         delivered by American Ski or any of its Restricted  Subsidiaries to the
         Agent or any Lender in connection therewith.

                  "Lender   Obligations"  shall  mean  all  present  and  future
         obligations  and  Indebtedness of American Ski or any of its Restricted
         Subsidiaries  owing to the Agent or the Lenders under this Agreement or
         any  other  Lender  Agreement,   including,   without  limitation,  the
         obligations to pay the Indebtedness  from time to time evidenced by the


                                       13
<PAGE>

         Term  Notes,  the  Revolving  Credit  Notes,  the Swing Line Note,  the
         Reimbursement  Obligations and obligations to pay interest,  commitment
         fees, balance deficiency fees,  charges,  expenses and  indemnification
         from time to time owed under any Lender Agreement.

                  "Lenders" shall mean (a) initially,  each lender listed on the
         signature  pages  hereof,  (b) any other Person who becomes a Successor
         Lender  hereunder in  accordance  with the terms of Section 12.2 hereof
         and (c) the successors and assigns of the Persons  described in clauses
         (a) and (b).

                  "Letter of Credit" shall mean a letter of credit issued by the
         Issuing  Bank for the  account  of the  Borrowers  in  accordance  with
         Section 2.16 hereof.

                  "Letter of Credit  Exposure"  shall mean, at any time, the sum
         of (a) the Maximum Drawing Amount with respect to all Letters of Credit
         and (b) all unpaid Reimbursement Obligations.

                  "Letter of Credit Fee" -- See Section 2.16 hereof.

                  "Letter of Credit Participation" -- See Section 2.16(i)hereof.

                  "Leverage  Ratio"  shall  mean  as of the  end  of any  fiscal
         quarter  the  ratio  of  Consolidated  Total  Debt as of  such  date to
         Consolidated EBITDA for the four-quarter period ending on such date.

                  "LIBOR  Pricing  Option" shall mean the option  granted to the
         Borrowers  pursuant to Section 2.6 hereof to have  interest on all or a
         portion of the Loans computed on the basis of the Applicable LIBOR Rate
         for an applicable Interest Period.

                  "LIBOR Rate" shall mean for any Interest  Period for any LIBOR
         Rate Loan,  the quotient of (a) the rate of interest  determined by the
         Agent,  at about 10:00 a.m.  (Boston time) on the LIBOR Rate Fixing Day
         as being the rate at which  deposits in U.S.  dollars are offered to it
         by  first-class  banks in the London  interbank  market for deposit for
         such Interest Period in amounts  comparable to the aggregate  principal
         amount of LIBOR  Rate  Loans to which  such  Interest  Period  relates,
         divided  by (b) the  difference  between  one  (1)  minus  the  Reserve
         Requirement  (expressed  as a  decimal)  applicable  to  that  Interest
         Period.  The  LIBOR  Rate  shall be  adjusted  automatically  as of the
         effective date of any change in the Reserve Requirement.

                  "LIBOR Rate  Fixing Day" shall mean,  in the case of any LIBOR
         Rate Loan, the second  Business Day preceding the Business Day on which
         an Interest Period begins.

                                       14
<PAGE>

                  "LIBOR  Rate Loan"  shall mean any Loan  hereunder  upon which
         interest will accrue on the basis of a formula including as a component
         thereof  the LIBOR  Rate.  The  expiration  date of any LIBOR Rate Loan
         shall be the last day of the Interest  Period  applicable to such LIBOR
         Rate Loan.

                  "LIBOR Rate Margin" shall mean a rate per annum  determined on
         the first day of the applicable  Interest Period in accordance with the
         Pricing Schedule.

                  "Lien" -- See Section 9.2 hereof.

                  "Loan"  shall  mean all or a portion  of the Term  Loans,  any
         Revolving Credit Advance or any Swing Line Loan  outstanding  hereunder
         or made to the  Borrowers by the Lenders  pursuant to Article 2 of this
         Agreement, and "Loans" means all of such loans, collectively.

                  "Majority  Lenders"  shall mean, at any time,  any two or more
         Lenders  holding at least 51% of the sum of the  outstanding  principal
         amount  of  the  Loans  hereunder  and  the  Unused   Revolving  Credit
         Commitments.

                  "Management Projections" shall mean the projections for fiscal
         years 1999-2004, prepared by American Ski and delivered to the Agent by
         American Ski on behalf of itself and its Restricted Subsidiaries.

                  "Material  Adverse  Effect" shall mean any adverse  change (or
         occurrence or condition reasonably likely to produce an adverse change)
         in  the  financial  condition,   properties,  business,  operations  or
         prospects  which  is  material  to  American  Ski  and  its  Restricted
         Subsidiaries as a whole.

                  "Maximum  Drawing  Amount"  shall mean the  maximum  aggregate
         amount that the  beneficiaries  may at any time draw under  outstanding
         Letters of Credit, as such aggregate amount may be reduced from time to
         time pursuant to the terms of the Letters of Credit.

                  "Maximum Revolving Credit Amount" shall mean as of any date of
         determination,  the lesser of (a) the applicable amount set forth below
         (as each such amount may be reduced  from time to time  pursuant to the
         mandatory reduction requirements of Section 4.1(c)):

                  Closing Date through May 30, 2002  $100,000,000
                  May 31, 2002 through May 30, 2003  82,850,000
                  May 31, 2003 through May 30, 2004  74,800,000

                                       15
<PAGE>

         or (b) the amount to which the Maximum Revolving Credit Amount may have
         been reduced pursuant to Section 2.12;  provided that if the obligation
         of the Lenders to make further Loans is terminated  upon the occurrence
         of an Event of Default,  the Maximum  Revolving Credit Amount as of any
         date of determination thereafter shall be deemed to be $0.

                  "Money  Market  Rate" shall mean with  respect to Money Market
         Loans  the  interest  rate per  annum  determined  by the  Agent in its
         reasonable  discretion  with  reference to the Federal Funds  Effective
         Rate.

                  "Money  Market  Loans" shall mean any Loan  hereunder  bearing
         interest at a  fluctuating  rate  determined  by reference to the Money
         Market Rate.

                  "Mortgaged  Properties"  shall  mean all real  properties  and
         interests  therein  owned  by  American  Ski or  any of its  Restricted
         Subsidiaries  which are subject to mortgage liens in favor of the Agent
         under the Security Agreements.

                  "Mortgages" -- See definition of Security Agreements.

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

                  "1998  Financial   Statements"  shall  mean  the  Consolidated
         Balance Sheet of American Ski and its  Subsidiaries as of July 26, 1998
         and the related Consolidated  Statements of Operations,  Cash Flows and
         Changes in Stockholders'  Equity for the year then ended, and the notes
         to such financial statements, audited by Price Waterhouse Coopers LLP.

                  "Notes" shall mean the Term Loan Notes, the Revolving Credit
         Notes and the Swing Line Note.

                  "Notice of Revolving  Credit or Swing Line  Borrowing"  -- See
         Section 2.2(a) hereof.

                                       16
<PAGE>

                  "Oak  Hill"  shall mean Oak Hill  Capital  Partners,  L.P.,  a
         Delaware  limited  partnership,  Oak  Hill  Securities  Fund,  L.P.,  a
         Delaware limited partnership, and their respective affiliates.

                  "Otten  Shareholders"  shall mean Leslie B. Otten,  his spouse
         and  children,  and trusts  established  for his or any or all of their
         benefit, collectively.

                  "Otten  Subordination  Agreement" shall mean the Subordination
         Agreement of even date herewith in substantially  the form of Exhibit Q
         hereto by and among American Ski, Leslie B. Otten and the Agent.

                  "Pension  Plan" shall mean an employee  benefit  plan or other
         plan  maintained for the employees of American Ski or any Subsidiary as
         described in Section 4021(a) of ERISA.

                  "Permitted  Acquisitions"  shall mean acquisitions by American
         Ski or  any  Restricted  Subsidiary  of  all  of  the  stock  or all or
         substantially  all of the  assets of  another  domestic  (or  Canadian)
         Person  (or all the assets of a division  or line of  business  of such
         Person)  engaged in any line of business  substantially  similar to any
         existing   line  of  business  of  American  Ski  and  its   Restricted
         Subsidiaries, provided that the following terms and conditions are met:

                           (a)  American  Ski shall  provide the Agent notice of
                  each proposed  acquisition  at least 30 days in advance of the
                  proposed  closing  date,  such notice to include a  reasonably
                  detailed information package outlining the transaction and its
                  pro  forma   impact  on  American   Ski  and  its   Restricted
                  Subsidiaries  and  certification,  with  supporting  financial
                  statements, that:

                                    (i) no  Default  or Event of  Default  shall
                           exist at the time of or after  giving  effect to each
                           such acquisition on a pro forma basis;

                                    (ii)   American   Ski  and  its   Restricted
                           Subsidiaries will comply with the financial covenants
                           contained  herein  on a pro  forma  basis,  based  on
                           combined  adjusted  trailing  four-quarter  operating
                           performance,  pro  forma  debt  and  pro  forma  debt
                           service   based  on  scheduled   principal   payments
                           (including  any  acquisition   loan)  and  pro  forma
                           interest on total debt at then  prevailing  borrowing
                           rates. Any pro forma adjustments to historical EBITDA
                           of the Person to be acquired  shall be  acceptable to
                           the Lenders in their reasonable discretion,  provided
                           that contractual and adequately documented reductions
                           in the  former  owner's  compensation  and/or  rental
                           expense that will be effective as of the  acquisition
                           date and/or other  adjustments  not disallowed by the
                           Commission    and   certified   by   the   Borrowers'
                           independent  auditors as  reasonably  likely to occur
                           shall be deemed acceptable; and



                                       17
<PAGE>

                                    (iii) the Board of  Directors  of the Person
                           to be acquired has approved such acquisition.

                           (b)  Management  of  the  acquiring   Borrower  shall
                  reasonably  believe  that,  as a result of its  ownership  and
                  management,  the Person to be acquired  will achieve  positive
                  four-quarter  EBITDA  not  later  than  two  years  after  the
                  acquisition.

                           (c) The maximum  purchase  price  (exclusive  of that
                  portion of the  purchase  price that may be payable  solely in
                  common  stock  of  American  Ski)  for  any  single   proposed
                  acquisition shall not exceed the greater of (i) $50,000,000 or
                  (ii) 50% of  Consolidated  EBITDA for the most  recent  fiscal
                  year before giving effect to the proposed acquisition.

                           (d) The  terms  and  structure  of such  acquisitions
                  shall be  reasonably  acceptable  to the Lenders and shall not
                  subject the Agent or the Lenders to any  regulatory  approvals
                  in  connection  with the  exercise of any  remedies  under the
                  Lender Agreements.

                           (e)  The  acquired  Person  shall  be  merged  into a
                  Restricted Subsidiary or the acquired assets shall be acquired
                  by a Restricted Subsidiary,  or if it is to be a Subsidiary of
                  a  Borrower,  it shall  become an  obligor  under  the  Lender
                  Agreements  on terms  acceptable to the Agent and by executing
                  and  delivering  to the Agent the joinder in the form attached
                  hereto as Exhibit S.

                           (f) The  assets  or the  stock so  acquired  shall be
                  pledged to the Agent on a first perfected basis,  subject only
                  to prior liens and  encumbrances  associated with assumed debt
                  otherwise  permitted   hereunder,   on  terms  and  conditions
                  required  by the  Agent and  consistent  with the  pledges  of
                  collateral provided to the Agent on the Closing Date, together
                  with all related appraisals,  environmental reviews,  surveys,
                  title  insurance,   certificates,   instruments  and  opinions
                  requested  by the Agent  and  consistent  with  such  reviews,
                  surveys,  certificates  and opinions  provided to the Agent on
                  the Closing Date.

                  "Permitted   Capital    Expenditures"   shall   mean   Capital
         Expenditures of American Ski and its Restricted  Subsidiaries permitted
         under Section 9.7 hereto.

                  "Permitted  Dispositions" shall mean (a) sales or dispositions
         of assets of  American  Ski and its  Restricted  Subsidiaries  for fair
         market value in an amount not in excess of $20,000,000 in the aggregate
         in any fiscal year, provided that (i) 75% of the proceeds of such sales
         or  dispositions  must be in cash,  (ii) all non-cash  proceeds of such
         sales or  dispositions  must be pledged,  mortgaged  or assigned to the


                                       18
<PAGE>

         Agent on terms  acceptable  to the Agent  and  (iii) all cash  proceeds
         thereof must be,  within one year  following  the date of such sales or
         dispositions,  applied  to  permanently  reduce the  Maximum  Revolving
         Credit  Amount or to prepay the Term Loans,  in  accordance  with their
         terms,  or reinvested in Permitted  Capital  Expenditures  or Permitted
         Acquisitions,  (b)  dispositions  of Excess Real Property in accordance
         with the  requirements of Section 2.21, and (c) sales of developed real
         estate units in the ordinary course of business.

                  "Permitted Liens" -- See Section 9.2 hereof.

                  "Permitted  Non-Strategic  Asset  Sales"  shall  mean sales or
         other  dispositions  of  assets  of  American  Ski and  its  Restricted
         Subsidiaries,  between January 25, 1999 and January 30, 2000, for gross
         proceeds not to exceed  $30,000,000,  which American Ski determines are
         not strategic to the skiing and other resort activities of American Ski
         and its Restricted  Subsidiaries,  with the specific  assets so sold or
         disposed  of to be  approved  by the  Agent,  such  approval  not to be
         unreasonably withheld.

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

                  "Pricing  Notice"  shall mean (a) with  respect to a Revolving
         Credit  Advance  which  is  requested  to be a  LIBOR  Rate  Loan,  the
         applicable  Notice of Revolving  Credit or Swing Line Borrowing and (b)
         with  respect to any portion of the Term Loans  requested to be a LIBOR
         Rate Loan, a notice from American Ski to the Agent in substantially the
         form of Exhibit D hereto and meeting the requirements of Section 2.6(b)
         hereof.

                  "Pricing Schedule" shall mean the Pricing Schedule attached
         hereto as Schedule 2.

                  "Real  Estate   Capital   Expenditures"   shall  mean  Capital
         Expenditures  paid or incurred by American Ski or any of its Restricted
         Subsidiaries  for  the  purchase,  development,  marketing  or  sale of
         residential real estate or lodging operations.

                  "Real Estate Guaranties" shall mean Guaranties of American Ski
         and  its  Restricted   Subsidiaries  of  Indebtedness  of  Unrestricted
         Subsidiaries. The amount of any Real Estate Guaranty shall be deemed to
         be the  lesser of (a) an  amount  equal to the  stated or  determinable
         amount of the primary  obligation  in respect of which such Guaranty is
         made and (b) the  maximum  amount  for which  the  obligor  under  such
         Guaranty  may be  liable  pursuant  to  the  terms  of  the  instrument
         embodying such Guaranty, unless such primary obligation and the maximum
         amount  for  which  such  obligor  may  be  liable  is  not  stated  or
         determinable,  in which case the amount of such Guaranty  shall be such


                                       19
<PAGE>

         obligor's maximum reasonably  anticipated liability in respect thereof,
         as agreed upon between American Ski and the Agent.

                  "Refunded Swing Line Loans" -- See Section 2.20 hereof.

                  "Refunding Date" -- See Section 2.20 hereof.

                  "Reimbursement  Obligations"  shall  mean  (a) the  Borrowers'
         obligations  to  reimburse  the Issuing  Bank on account of any drawing
         under any Letter of Credit and interest  thereon as provided in Section
         2.16(c)  hereof and (b) any  Borrower's  obligation  to  reimburse  any
         Revolving  Credit  Lender on account of any drawing  under any Existing
         Letter of Credit.

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

                  "Reserve Requirement" shall mean the maximum aggregate reserve
         requirement  (including  all basic,  supplemental,  marginal  and other
         reserves)  which is imposed  under  Regulation  D on the Banks  against
         "Euro-currency Liabilities" as defined in said Regulation D.

                  "Restricted  Subsidiaries"  shall  mean  all  Subsidiaries  of
         American  Ski,  or other  specified  parent,  other  than  Unrestricted
         Subsidiaries of American Ski or such other specified parent.

                  "Revolving Commitment Fee" -- see Section 2.9 hereof.

                  "Revolving Credit Advance" shall mean any loan or advance from
         any Lender to the Borrower pursuant to Section 2.1  hereof.

                  Revolving Credit Commitment  Percentage" shall mean as to each
         Revolving  Credit  Lender,  its  percentage  interest  in  the  Maximum
         Revolving Credit Amount as set forth on Schedule 1 hereto.

                  "Revolving  Credit  Lenders"  shall mean the Revolving  Credit
         Lenders so identified on Schedule 1 hereto.

                  "Revolving Credit Notes" shall mean the Amended,  Restated and
         Consolidated  Revolving  Credit  Notes  substantially  in the  form  of
         Exhibit A-1 hereto executed by the Borrowers, jointly and severally, in
         favor of each Revolving  Credit Lender to evidence the Revolving Credit
         Advances to be made by the Revolving  Credit  Lenders from time to time
         hereunder.

                  "Revolving Credit Termination Date" shall mean May 31, 2004.

                                       20
<PAGE>

                  "Security Agreements" shall mean:

                           (a) The Amended,  Restated and Consolidated  Security
                  Agreements of even date herewith from American Ski and each of
                  its Restricted Subsidiaries to the Agent by which American Ski
                  and each of its  Restricted  Subsidiaries  has  granted to the
                  Agent, in order to secure the Lender  Obligations,  a security
                  interest  in  substantially   all  of  its  assets,   each  in
                  substantially the form of Exhibit E-1 hereto.

                           (b) The Amended,  Restated and Consolidated  Security
                  Agreements of even date  herewith  from the  Guarantors to the
                  Agent by  which  each of the  Guarantors  has  granted  to the
                  Agent, in order to secure the Lender  Obligations,  a security
                  interest  in  substantially   all  of  its  assets,   each  in
                  substantially the form of Exhibit E-2 hereto.

                           (c) The Amended,  Restated and  Consolidated  Fee and
                  Leasehold Mortgage,  Assignment of Leases and Rents, Financing
                  Statement  and Security  Agreements of even date herewith (the
                  "Mortgages") from each Borrower that owns any real property to
                  the  Agent  to  secure   the  Lender   Obligations,   each  in
                  substantially the form of Exhibit G hereto.

                           (d) The Amended, Restated and Consolidated Collateral
                  Assignments of Leases and Rents (the  "Collateral  Assignments
                  of Leases") from each Borrower that leases any real  property,
                  with respect to all Leases,  to the Agent to secure the Lender
                  Obligations,  each in  substantially  the  form of  Exhibit  H
                  hereto.

                           (e)   The   Amended,    Restated   and   Consolidated
                  Assignments  in  Trust  (the  "Assignments  in  Trust"),  from
                  certain   Borrowers   to  the  Agent  to  secure   the  Lender
                  Obligations, each in the form of Exhibit J hereto.

                           (f) The Amended, Restated and Consolidated Assignment
                  of Trademarks of even date herewith (the  "Trademark  Security
                  Agreements")  from each  Borrower  to the Agent to secure  the
                  Lender Obligations, each in the form of Exhibit K hereto.

                           (g)   The   Amended,    Restated   and   Consolidated
                  Assignments  of Licenses,  Contracts  and Permits of even date
                  herewith (the "Assignments of Licenses") from each Borrower to
                  the Agent to secure the Lender  Obligations,  each in the form
                  of Exhibit L hereto.

                                       21
<PAGE>

                           (h) The  Amended,  Restated  and  Consolidated  Stock
                  Pledge Agreements (the "Stock Pledges")  pledging to the Agent
                  the  collateral   described   therein   (excluding   stock  of
                  Unrestricted Subsidiaries) to secure the obligations described
                  therein, each in the form of Exhibit M hereto.

                           (i) All other security agreements, pledge agreements,
                  mortgages, assignments and other instruments by which American
                  Ski or any  Restricted  Subsidiary  grants or  pledges  to the
                  Agent a lien on,  security  interest in, or pledge or mortgage
                  or assignment of any of its assets.

                  "Senior Subordinated Notes" shall mean the $120,000,000 Senior
         Subordinated Notes of American Ski, as successor to ASC East, Inc., due
         July  16,  2006,  issued  pursuant  to the  Senior  Subordinated  Notes
         Indenture.

                  "Senior Subordinated Notes Indenture" shall mean the Indenture
         of Trust  dated as of June 28,  1996 by and  between  ASC East and U.S.
         Trust  Company  of  New  York,  as  Trustee,  as  amended  by  a  First
         Supplemental  Indenture  dated  as  of  November  12,  1997,  a  Second
         Supplemental  Indenture dated  September 4, 1998, a Third  Supplemental
         Indenture  dated August 6, 1999,  and a Fourth  Supplemental  Indenture
         dated October 6, 1999.

                  "Series  A  Certificate   of   Designation"   shall  mean  the
         Certificate  of   Designation   governing  the  Series  A  Exchangeable
         Preferred Stock.

                  "Series A Exchangeable  Preferred Stock" shall mean the 36,626
         shares  of 10.5%  Repriced  Convertible  Exchangeable  Preferred  Stock
         issued by American Ski under the Cerberus Purchase Agreement.

                  "Series  B  Certificate   of   Designation"   shall  mean  the
         Certificate  of  Designation  of  Preferences  and  Rights of the 8.50%
         Series B Convertible  Participating  Preferred Stock of American Skiing
         Company duly adopted by American Ski on August 5, 1999.

                  "Series   B   Gross   Proceeds"   shall   mean   $150,000,000,
         representing  the gross  proceeds  received  from the  issuance  of the
         Series B Preferred Stock.

                  "Series B Preferred  Stock"  shall mean the 150,000  shares of
         8.50%  Series B  Convertible  Participating  Preferred  Stock issued by
         American Ski under the Series B Preferred Stock Subscription Agreement.

                  "Series B Preferred Stock  Agreements" shall mean the Series B
         Certificate of Designation,  the Series B Preferred Stock  Subscription
         Agreement,  the Series B  Preferred  Stock  Voting  Agreement,  and the
         Series B Preferred Stock Stockholders Agreement.

                                       22
<PAGE>

                  "Series B Preferred Stock  Subscription  Agreement" shall mean
         the Preferred Stock Subscription  Agreement dated as of July 9, 1999 by
         and  among  American  Ski and Oak  Hill as  purchaser  of the  Series B
         Preferred  Stock,  as amended by Amendment  No. 1 dated as of August 6,
         1999.

                  "Series B Preferred Stock  Stockholders  Agreement" shall mean
         the  Stockholders  Agreement  dated as of  August  6, 1999 by and among
         American  Ski, the holders of the Series B Preferred  Stock,  Leslie B.
         Otten, and Oak Hill.

                  "Series B Preferred  Stock  Voting  Agreement"  shall mean the
         Voting  Agreement dated as of August 6, 1999 by and among American Ski,
         Leslie B. Otten and Oak Hill,  as  purchaser  of the Series B Preferred
         Stock.

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

                  "Steamboat Subsidiaries" shall mean Steamboat Ski & Resort
         Corporation, Steamboat Development Corporation and Orlando Resort
         Corporation.

                  "Subordinated   Indebtedness"   shall   mean  (a)  the  Senior
         Subordinated  Notes,  (b) the  Indebtedness  identified as Subordinated
         Indebtedness  on  Schedule  5.16  and (c)  all  other  Indebtedness  of
         American Ski or any Restricted  Subsidiary which is subordinated to the
         Indebtedness of American Ski or such Restricted Subsidiary to the Agent
         and the  Lenders  on terms and  conditions  approved  in writing by the
         Agent.

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

                  "Swing Line Commitment" shall mean $9,000,000.

                  "Swing Line Lender" -- See Section 2.18 hereof.

                  "Swing Line Loans" -- See Section 2.18 hereof.

                                       23
<PAGE>

                  "Swing  Line  Note"  shall  mean  the  Amended,  Restated  and
         Consolidated  Swing Line Note  substantially in the form of Exhibit A-3
         hereto  executed by the Borrowers,  jointly and severally,  in favor of
         the Swing Line  Lender to  evidence  the Swing Line Loans to be made by
         the Swing Line Lender from time to time hereunder.

                  "Swing Line Participation Amount" -- See Section 2.20 hereof.

                  "10 1/2% Repriced  Convertible  Exchangeable  Preferred Stock"
         shall mean the "10 1/2%  Repriced  Convertible  Exchangeable  Preferred
         Stock" under and as defined in the Cerberus Amendment and Waiver Letter
         Agreement and the Series A Certificate of Designation.

                  "Term Loan Commitment  Percentage"  shall mean as to each Term
         Loan Lender, its percentage  interest in the Term Loans as set forth on
         Schedule 1 hereto.

                  "Term Loan Lenders"  shall mean those Lenders so identified on
         Schedule 1 hereto.

                  "Term Loan Maturity Date" shall mean May 31, 2006.

                  "Term  Loan  Notes"  shall  mean  the  Amended,  Restated  and
         Consolidated  Term Loan Notes  substantially in the form of Exhibit A-2
         hereto  executed by the Borrowers,  jointly and severally,  in favor of
         each Term Loan Lender to evidence the Term Loans.

                  "Term  Loans"  shall mean the term loans made by the Term Loan
         Lenders to the Borrowers pursuant to Section 2.4 hereof.

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

                  "Uniform Customs and Practice" shall mean the Uniform Customs
         and Practice for Documentary Credits (1993 Revision) International
         Chamber of Commerce publication No. 500.

                  "Unrestricted  Subsidiaries" shall mean Killington West, Ltd.,
         a  California   corporation,   Mountain   Water   Company,   a  Vermont
         corporation, Grand Summit Resort Properties, Inc., a Maine corporation,
         American Skiing Company Resort  Properties,  Inc., a Maine corporation,
         The Canyons Resort  Properties,  Inc., a Maine  corporation,  Steamboat
         Resort  Properties,  Inc., a Maine  corporation,  Heavenly  Properties,
         Inc., a Maine corporation,  Sugarloaf Resort Properties,  Inc., a Maine
         corporation,  Killington Resort Properties,  Inc., a Maine corporation,


                                       24
<PAGE>

         Mount Snow Resort  Properties,  Inc.,  a Maine  corporation,  Sugarbush
         Resort  Properties,  Inc.,  a Maine  corporation,  Sunday  River Resort
         Properties,  Inc., a Maine  corporation,  Attitash  Resort  Properties,
         Inc.,  a  Maine   corporation,   S-K-I  Insurance  Company,  a  Vermont
         corporation,  Club  Sugarbush,  a Vermont  corporation,  Uplands  Water
         Company, a Vermont corporation,  Orlando Resort Corporation, a Delaware
         corporation,  Walton  Pond  Apartments,  a  Delaware  Corporation,  ASC
         Transportation, Inc., a New Hampshire corporation, ASC Leasing, Inc., a
         Maine corporation,  Heavenly Resort  Properties,  LLC, a Nevada limited
         liability   company,   Blunder  Bay   Development   Company,   a  Maine
         corporation, Grand Summit Resort Hotel Sales, Inc., a Maine corporation
         and such other Subsidiaries,  other than a Borrower or a Guarantor,  as
         may from time to time be designated by American Ski as an  Unrestricted
         Subsidiary and as are reasonably acceptable to the Agent.

                  "Unused Revolving Credit  Commitments"  shall mean the Maximum
         Revolving  Credit  Amount  in  effect  at such time less the sum of the
         Aggregate  Outstanding  Revolving Credit  Extensions for each Revolving
         Credit Lender less the Letter of Credit Exposure and less the aggregate
         principal amount of Swing Line Loans then outstanding.

                  "Uplands  Water" shall mean  Uplands  Water  Company,  Inc., a
         Vermont corporation.

                  "Wholly-Owned  Subsidiary"  shall  mean  any  Person  of which
         American Ski; any Restricted Subsidiary or other specified parent shall
         now or hereafter at the time own, directly or indirectly through one or
         more  Subsidiaries  or otherwise,  one hundred  percent  (100%) of such
         Person's capital stock or other beneficial interest.

                  "Wolf Acquisition  Agreement" shall mean the Purchase and Sale
         Agreement  by and between Wolf Resorts and ASC Utah dated as of May 30,
         1997.

                  "Wolf Resorts" shall mean Wolf Mountain Resorts,  L.C., a Utah
         limited liability company.

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


                             ARTICLE 2. THE CREDITS

         Section 2.1    The Revolving Credit.
--------------------------------------------------------------------------------


                  (a  Subject to the terms and  conditions of this Agreement and
so  long as no  Default  exists,  at any  time  prior  to the  Revolving  Credit
Termination Date, each Revolving Credit Lender, severally and not jointly, shall


                                       25
<PAGE>

make such Revolving  Credit  Advances to the Borrowers as the Borrowers may from
time to time request,  by notice to the Agent in accordance with Section 2.2, in
an aggregate amount (i) as to each Revolving Credit Lender, not to exceed at any
time such  Lender's  Revolving  Credit  Commitment  Percentage  of the Available
Revolving  Credit Amount and (ii) as to all  Revolving  Credit  Lenders,  not to
exceed an amount equal to the Available Revolving Credit Amount. The outstanding
principal  amount of the Revolving  Credit  Advances,  together with all accrued
interest and other fees and charges related thereto,  shall be repaid in full on
the Revolving  Credit  Termination  Date. On the Closing  Date,  the  Borrowers,
jointly and severally, shall execute and deliver to each Revolving Credit Lender
a Revolving  Credit Note to evidence the Revolving  Credit Advances from time to
time made by such  Revolving  Credit  Lender  to the  Borrowers  hereunder.  The
Revolving   Credit  Lenders  having  aggregate   Revolving   Credit   Commitment
Percentages  in  excess of 50% may from  time to time in  consultation  with the
Borrowers  establish  sublimits as to the amounts of Revolving  Credit  Advances
that may be advanced  for use by one or more  Borrowers  that do not operate ski
resorts.

                  (b  Subject to the foregoing limitations and the provisions of
Section 4.2, the Borrowers shall have the right to make prepayments reducing the
outstanding  balance  of  Revolving  Credit  Advances  and  to  request  further
Revolving  Credit  Advances,  all in accordance with Section 2.2,  without other
restrictions  hereunder;  provided that each Revolving  Credit Lender shall have
the absolute right to refuse to make any Revolving  Credit  Advances for so long
as there  exists any Default or any other  condition  which would  constitute  a
Default upon the making of such a Revolving Credit Advance; and provided further
that during each fiscal year of the Borrowers,  commencing  with the fiscal year
ending July 30, 2000, there shall be a period of 30 (thirty)  consecutive  days,
including  April 30 of each year,  during  which the sum of (i) the  outstanding
principal  amount of all Revolving Credit Advances and (ii) the Letter of Credit
Exposure shall not exceed $35,000,000.

                  (c  Lenders hereunder who were "Lenders" under the 1997 Credit
Agreements upon their  termination  shall be deemed to have made their Revolving
Credit  Commitment  Percentage of the first Revolving  Credit Advance  hereunder
upon  execution  and  delivery  hereof and shall  receive in full payment of the
principal amount of their "Revolving  Credit Notes" issued under the 1997 Credit
Agreements the difference,  if any, between the outstanding  principal amount of
their "Revolving Credit Notes" issued under the 1997 Credit Agreements and their
Commitment  Percentages  of the first  Revolving  Credit  Advance  hereunder  as
described on Schedule 2.1 hereto.


                                      26
<PAGE>
     Section 2.2       Making of Revolving Credit Advances

                  (a  Each  Revolving  Credit  Advance  shall be made on  notice
given by the Borrowers,  or by American Ski, as agent for the Borrowers,  to the
Agent  not later  than  12:00  noon  (Boston  time) on the date of the  proposed
borrowing (a "Notice of Revolving  Credit or Swing Line  Borrowing");  provided,
however,  that if the Borrowers elect a LIBOR Pricing Option with respect to any
Revolving  Credit Advance in accordance with Section 2.6 hereof,  such Notice of
Revolving  Credit or Swing Line  Borrowing  shall be given by  American  Ski, as
agent for the Borrowers,  contemporaneously  with a Pricing Notice in the manner
and within the time specified in Section 2.6. The Agent shall give the Revolving
Credit Lenders notice of each Notice of Revolving Credit or Swing Line Borrowing
in accordance with the Agent's customary practice. Each such Notice of Revolving
Credit or Swing Line Borrowing  shall be by telephone or telecopy,  in each case
confirmed immediately in writing by American Ski, as agent for the Borrowers, in
substantially the form of Exhibit B hereto, specifying therein (i) the requested
date of such  Revolving  Credit  Advance  and (ii) the amount of such  Revolving
Credit  Advance,  which must be a minimum of  $100,000  and  integral  multiples
thereof; provided, however, that the Swing Line Lender may request, on behalf of
the  Borrowers,  Revolving  Credit  Advances  that are Base Rate  Loans in other
amounts pursuant to Section 2.20(a). The Borrowers agree, jointly and severally,
to indemnify  and hold the  Revolving  Credit  Lenders  harmless for any action,
including  the making of any Revolving  Credit  Advances  hereunder,  or loss or
expense,  taken or incurred by the Agent or the Revolving Credit Lenders in good
faith reliance upon such telephone  request.  At the time of the initial request
for a Revolving  Credit Advance made under this Section 2.2, the Borrowers shall
have  provided the Agent with a Compliance  Certificate.  The  Borrowers  hereby
agree (A) that the Revolving  Credit  Lenders shall be entitled to rely upon the
Compliance  Certificate  most  recently  delivered  to  the  Agent  until  it is
superseded by a more recent Compliance Certificate and (B) that each request for
a Revolving  Credit  Advance,  whether by telephone or in writing or  otherwise,
shall constitute a confirmation of the representations and warranties  contained
in the most recent Compliance Certificate then in the Agent's possession.

                  (b   Subject to the terms and  conditions  of this  Agreement,
each Revolving Credit Lender shall make available on or before 2:00 p.m. (Boston
time) on the date of each proposed Revolving Credit Advance, to the Agent at the
Agent's  address and in immediately  available  funds,  such Lender's  Revolving
Credit Commitment Percentage of such Revolving Credit Advance. After the Agent's
receipt of such funds and upon  fulfillment  of the  applicable  conditions  set
forth in Article 3, the Agent will credit such funds to the Borrowers' accounts,
as directed  by  American  Ski,  on the date of the  proposed  Revolving  Credit
Advance.

                  (c   Unless  the  Agent  shall  have  received  notice  from a
Revolving  Credit Lender prior to the date of any Revolving  Credit Advance that
such Revolving  Credit Lender will not make available to the Agent such Lender's
Revolving Credit  Commitment  Percentage of such Revolving  Credit Advance,  the
Agent may  assume  that  such  Revolving  Credit  Lender  has made  such  amount
available  to the  Agent  on the  date  of  such  Revolving  Credit  Advance  in
accordance  with and as  provided  in this  Section  2.2 and the Agent  may,  in


                                       27
<PAGE>

reliance  upon such  assumption,  make  available  on such date a  corresponding
amount to the Borrowers. If and to the extent such Revolving Credit Lender shall
not have so made its Revolving  Credit  Commitment  Percentage of such Revolving
Credit  Advance  available to the Agent and the Agent shall have made  available
such corresponding amount to the Borrowers,  such Revolving Credit Lender agrees
to pay to the Agent forthwith on demand,  and the Borrowers  agree,  jointly and
severally, to repay to the Agent within two Business Days after demand (but only
after demand for payment has first been made to such Revolving Credit Lender and
such Revolving  Credit Lender has failed to make such payment),  an amount equal
to such  corresponding  amount together with interest  thereon for each day from
the date the Agent shall make such amount  available to the Borrowers  until the
date such amount is paid or repaid to the Agent,  at an  interest  rate equal to
the interest rate applicable at the time to such Revolving Credit  Advances.  If
such Revolving Credit Lender shall pay to the Agent such  corresponding  amount,
such amount so paid shall  constitute such Revolving  Credit Lender's  Revolving
Credit Advance for purposes of this Agreement. If the Borrowers make a repayment
required by the foregoing  provisions of this Section  2.2(c) and thereafter the
applicable Revolving Credit Lender or Revolving Credit Lenders make the payments
to the Agent required by this Section  2.2(c),  the Agent shall promptly  refund
the amount of the Borrowers' payment.

                  (d  The  failure of any  Revolving  Credit  Lender to make the
Revolving  Credit  Advance  to be made by it on any date shall not  relieve  any
other Revolving Credit Lender of its obligation,  if any,  hereunder to make its
Revolving  Credit Advance on such date, but no Revolving  Credit Lender shall be
responsible  for the failure of any other  Revolving  Credit  Lender to make the
Revolving Credit Advance to be made by such other Revolving Credit Lender.

     Section 2.3 Interest on Revolving Credit Advances.  Subject to the terms of
Section 2.6  relating  to LIBOR  Pricing  Options,  the  Borrowers,  jointly and
severally,  shall pay  interest on the unpaid  balance of the  Revolving  Credit
Advances  from  time  to time  outstanding  at a per  annum  rate  equal  to the
Applicable Base Rate for Revolving  Credit  Advances.  Interest on the Revolving
Credit  Advances  shall be payable  quarterly in arrears on the first day of the
month following the end of each fiscal quarter, commencing November 1, 1999, and
continuing  until all of the  Indebtedness  of the  Borrowers  to the  Revolving
Credit Lenders under the Revolving Credit Notes shall have been paid in full.

     Section 2.4 The Term  Loans.  Subject to the terms and  conditions  of this
Agreement, on the date hereof, the Term Loan Lenders, severally and not jointly,
shall make term loans (the "Term  Loans") to the Borrowers in an amount equal to
each Term Loan Lender's Term Loan  Commitment  Percentage of  $65,000,000 as set
forth on Schedule 1 hereto and the  Borrowers  shall execute and deliver to each
Term Loan  Lender a Term Loan Note to  evidence  the Term Loan made by such Term
Loan Lender to the Borrowers  hereunder.  Lenders  hereunder who were  "Lenders"
under the 1997 Credit  Agreements upon their termination shall be deemed to have
made their Term Loans  hereunder  upon  execution and delivery  hereof and shall


                                       28
<PAGE>

receive in full payment of the principal of their "Term Loan Notes" issued under
the 1997 Credit  Agreements  the  difference,  if any,  between the  outstanding
principal  amount of the "Term Loans" under the 1997 Credit  Agreements  and the
principal  amount of their Term Loans  hereunder  as  described  on Schedule 2.1
hereto.

     Section 2.5 Interest on the Term Loans. Subject to the terms of Section 2.6
relating to LIBOR Pricing Options, the Borrowers,  jointly and severally,  shall
pay  interest on the unpaid  balance of the Term Loans at a per annum rate equal
to the Applicable Base Rate for the Term Loans. Interest on the Term Loans shall
be payable  quarterly in arrears on the first day of the month following the end
of each fiscal quarter, commencing November 1, 1999, and continuing until all of
the  Indebtedness of the Borrowers to the Term Loan Lenders under the Term Loans
shall have been paid in full.

         Section 2.6  Election  of LIBOR  Pricing  Options.

                  (a  Subject to all the terms and conditions hereof and so long
as no  Default  exists,  American  Ski,  as agent  for the  Borrowers,  may,  by
delivering  a Pricing  Notice to the Agent  received  at or before  10:00  a.m.,
Boston time,  on the date two  Business  Days prior to the  commencement  of the
Interest Period selected in such Pricing Notice,  elect to have all or a portion
of the Term Loans or the outstanding Revolving Credit Advances, as American Ski,
as agent for the Borrowers,  may specify in such Pricing Notice, accrue and bear
daily interest  during the Interest Period so selected at a per annum rate equal
to the Applicable LIBOR Rate for such Interest Period;  provided,  however, that
any such election  made with respect to the Term Loans or the  Revolving  Credit
Advances  shall be in an amount not less than  $5,000,000  and in  increments of
$1,000,000;  and provided further that no such election will be made if it would
result in there being more than ten (10) LIBOR Pricing  Options in the aggregate
outstanding  at any one time under this  Agreement.  Interest  on Loans  bearing
interest at the Applicable  LIBOR Rate shall be payable  quarterly in arrears on
the first day of the month  following  the end of each  fiscal  quarter and when
such Loan is due (whether at maturity, by reason of acceleration or otherwise).

                  (b  Each Pricing Notice shall be  substantially in the form of
Exhibit D  attached  hereto  and shall  specify:  (i) the  selection  of a LIBOR
Pricing  Option;  (ii) the  effective  date and  amount  of the Term Loan or the
Revolving Credit Advances  subject to such LIBOR Pricing Option,  subject to the
limitations set forth herein; and (iii) the duration of the applicable  Interest
Period.  Each Pricing Notice shall be irrevocable.

                  (c  The Agent will  promptly  inform  each Lender of a Pricing
Notice  and  the  Interest  Period  specified  by the  Borrowers  therein.  Upon
determination  by the Agent of the Applicable LIBOR Rate for any Interest Period
selected by the Borrowers, the Agent will promptly inform the Borrowers and each
Lender of such Applicable LIBOR Rate so determined or, if applicable, the reason
why the Borrowers' election will not become effective.

                                       29
<PAGE>

     Section  2.7  Additional  Payments.  Upon the  occurrence  and  during  the
continuance of any Event of Default, the Borrowers shall, jointly and severally,
on demand,  pay to the Agent,  for the account of the  Lenders,  interest on the
unpaid  principal  balance of the Term Loans,  the Revolving Credit Advances and
the Swing  Line  Loans  and,  to the extent  permitted  by law,  on any  overdue
installments of interest, at a rate per annum equal to the stated interest rates
applicable thereto plus 2% per annum.

     Section 2.8 Computation of Interest,  Etc. Interest hereunder and under the
Loans shall be  computed  on the basis of a 360-day  year for the number of days
actually  elapsed.  Any increase or decrease in the  interest  rate on the Loans
resulting from a change in the Base Rate shall be effective immediately from the
date of such change.  No interest  payment or interest  rate  charged  hereunder
shall exceed the maximum rate  authorized  from time to time by applicable  law.
The outstanding  balance of the Term Notes,  the Revolving  Credit Notes and the
Swing Line Note as reflected  on the Agent's  records from time to time shall be
considered correct and binding on the Borrowers and the Lenders (absent manifest
error) unless within thirty (30) days after receipt of any written notice by the
Agent or any  Lender  of such  outstanding  amount,  the  Borrowers  or a Lender
notifies the Agent to the contrary.

     Section 2.9       Fees.

                  (a  The  Borrowers,  jointly and  severally,  shall pay to the
Agent,  for the account of each Revolving  Credit Lender,  a commitment fee (the
"Revolving   Commitment  Fee")  on  such  Revolving  Credit  Lender's  Available
Revolving Credit  Commitment from time to time in effect from the date hereof to
and including the Revolving  Credit  Termination Date computed at the applicable
rate set forth on the Pricing  Schedule.  The Revolving  Commitment Fee shall be
payable  quarterly in arrears on the first day of the month following the end of
each fiscal quarter,  commencing  November 1, 1999, for the period from the date
hereof through such date.

                  (b  The  Borrowers,  jointly and  severally,  shall pay to the
Agent,  for the  Agent's  own  account,  such fees as are  provided  in a letter
agreement  dated  October 12, 1999  between  American Ski and the Agent (as such
letter  agreement  may from time to time be  amended or  supplemented,  the "Fee
Letter").

     Section 2.10 Set-Off.  To the extent not prohibited by applicable  law, the
Borrowers,  jointly and severally,  hereby  authorize the Agent and each Lender,
without  prior  notice to the  Borrowers,  if and to the  extent  payment is not
promptly  made when due pursuant to the Term Loan Notes,  the  Revolving  Credit
Notes or the Swing Line Note or pursuant to any provision hereof or of any other
Lender  Agreement,  to charge against any account of any Borrower with the Agent
or such Lender,  an amount equal to the accrued interest and principal and other
amounts  from time to time  then due and  payable  to the Agent and the  Lenders
hereunder and under all other Lender  Agreements,  provided that the Agent shall
notify the Borrowers of any such set-off promptly thereafter.

                                       30
<PAGE>

     Section 2.11  Sharing of  Payments.  If any Lender shall obtain any payment
(whether voluntary,  involuntary,  through the exercise of any right of set-off,
or  otherwise) on account of the Loans made by it in excess of its ratable share
(according to the then outstanding principal amount of the Loans) of payments on
account of the Loans  obtained by all the Lenders,  such Lender  shall  purchase
from the other  Lenders  such  participations  in the Loans  held by such  other
Lenders as shall  cause such  purchasing  Lender to share such  payment  ratably
according  to the then  outstanding  principal  amount of the Loans with each of
such  other  Lenders;  provided,  however,  that if all or any  portion  of such
payment is thereafter  recovered from such purchasing Lender, the purchase shall
be rescinded  and the purchase  price  restored to the extent of such  recovery,
without  interest.   The  Borrowers  agree  that  any  Lender  so  purchasing  a
participation  in the Loans from  another  Lender  pursuant to this Section 2.11
may, to the fullest extent permitted by law,  exercise all its rights of payment
with  respect to such  participation  as fully as if such Lender were the direct
creditor of the Borrowers in the amount of such participation.

     Section 2.12  Reduction of  Commitment by the  Borrowers.  The Borrowers at
their option may, at any time and from time to time, (a)  irrevocably  reduce in
part (in a minimum amount of $5,000,000 and in integral multiples of $1,000,000)
the unused portion of the Available Revolving Credit Amount or (b) terminate the
entire unused portion of the Available  Revolving Credit Amount, in each case on
not less than seven (7) Business  Days' prior  written  notice to the Agent.  No
such reduction may be reinstated by the Borrowers.

                                       31
<PAGE>

         Section 2.13   Increased Costs, Etc.

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

                  (b  Anything herein to the contrary notwithstanding, if, after
the date  hereof,  any Lender shall have  determined  that any present or future


                                       32
<PAGE>

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

         Section 2.14      Changed Circumstances.  In the event that:

                  (a) on any date on  which  the  Applicable  LIBOR  Rate  would
otherwise  be  set  the  Agent  shall  have  determined  in  good  faith  (which
determination shall be final and conclusive) that adequate and fair means do not
exist for ascertaining the LIBOR Rate, as applicable; or

                  (b) at any time the Agent shall have  determined in good faith
(which determination shall be final and conclusive) that

                           (i) the  implementation  of the LIBOR Pricing  Option
         has been made  impracticable  or  unlawful by (A) the  occurrence  of a
         contingency that materially and adversely  affects the London interbank
         market  or  (B)  compliance  by any  Lender  in  good  faith  with  any
         applicable  law or  governmental  regulation,  guideline  or  order  or


                                       33
<PAGE>

         interpretation or change thereof by any Governmental  Authority charged
         with the  interpretation or administration  thereof or with any request
         or directive of any such Governmental  Authority (whether or not having
         the force of law); or

                           (ii) the LIBOR  Rate  shall no longer  represent  the
         effective  cost to the Lenders for U.S.  dollar  deposits in the London
         interbank  market,  as applicable  for deposits in which they regularly
         participate;

then, and in such event, the Agent shall so notify the Borrowers thereof.  Until
the Agent  notifies the  Borrowers  that the  circumstances  giving rise to such
notice no longer  apply,  the  obligation  of the Lenders and the Agent to allow
election by the  Borrowers of a LIBOR Pricing  Option shall be suspended.  If at
the time the Agent so notifies the  Borrowers,  the  Borrowers  have  previously
given the Agent a Pricing Notice with respect to a LIBOR Pricing Option, but the
LIBOR  Pricing  Option  requested  therein  has not yet gone into  effect,  such
Pricing Notice shall  automatically be deemed to be withdrawn and be of no force
or effect.  Upon such date as shall be specified in such notice (which shall not
be earlier than the date such notice is given),  the LIBOR  Pricing  Option with
respect to all LIBOR Rate Loans shall be terminated.

         In the event that the LIBOR  Pricing  Option is suspended in accordance
with the foregoing  provisions  for more than sixty (60) days, the Borrowers may
request that the Lenders propose an index,  and the spread above such index, for
determining  interest on the Loans as an  alternative  to the LIBOR Rate,  which
shall be an index in common usage by United  States  commercial  banks and which
shall adequately reflect the cost of funds to the Lenders.  The determination of
whether there is an appropriate  index meeting the foregoing  requirements,  and
the determination of the spread above such index,  shall be made by agreement of
all of the Lenders in their sole discretion.  In the event the Borrowers and the
Lenders agree on such alternative index, appropriate amendments shall be made to
this  Agreement  to  reflect  such  agreement  and any  particular  requirements
relating to such alternative index.

     Section  2.15 Use of  Proceeds.  The Term Loans and the  initial  Revolving
Credit  Advance  hereunder  shall  reflect the term loans and  revolving  credit
advances,  respectively,  under the 1997 Credit Agreements on the date hereof as
reduced in the case of the Term Loans,  as  provided in Section 2.4 hereof.  The
proceeds of all future  Revolving  Credit  Advances  and of the Swing Line Loans
shall be used by the  Borrowers  for (a)  Permitted  Capital  Expenditures,  (b)
on-going working capital requirements  relating to the Borrowers' operations and
(c) general  corporate  purposes  provided for by this Agreement.  The Borrowers
will not, directly or indirectly,  use any part of such proceeds for the purpose
of purchasing or carrying any margin stock within the meaning of Regulation U of
the Board of Governors of the Federal  Reserve System or to extend credit to any
Person for the purpose of purchasing or carrying any such margin stock.

                                       34
<PAGE>

         Section 2.16      Letters of Credit.

                  (a)  Subject  to the terms and  conditions  hereof,  including
satisfaction  of the  conditions  set forth in Sections 3.1 and 3.2 hereof,  and
provided no Default has  occurred  and that the Issuing  Bank is then  generally
issuing letters of credit for its banking  customers,  the Issuing Bank shall at
any time prior to the Revolving Credit Termination Date, upon the request of the
Borrowers  pursuant  to  paragraph  (b) below,  issue  Letters of Credit for the
account  of the  Borrowers,  provided  that the  aggregate  face  amount  of all
outstanding  Letters of Credit shall not at any time exceed  $10,000,000.  As of
the date  hereof,  the  Issuing  Bank has issued  the  letters of credit for the
account of the Borrowers  described on Schedule  2.16,  which from and after the
date hereof shall be deemed to be Letters of Credit  issued  hereunder,  and the
face amount  thereof  from time to time shall count  against the limit set forth
above.

                  (b) The  Borrowers  may request  that the Issuing Bank issue a
Letter of Credit by written notice (the "Letter of Credit  Notice") given by the
Borrowers to the Issuing Bank not less than five (5) Business  Days prior to the
proposed date of issuance of such Letter of Credit.  The Letter of Credit Notice
shall (i) specify the proposed date of issuance, the beneficiary, amount and the
purpose of such Letter of Credit and (ii) be  accompanied  by a letter of credit
application furnished by the Issuing Bank.

                  (c) The Borrowers hereby agree, jointly and severally,  to pay
to the Issuing  Bank on the date on which the Issuing  Bank shall be required to
pay any draft  presented  under any  Letter of  Credit,  a sum equal to: (i) the
amount so paid under such  Letter of Credit,  plus (ii)  interest  on any amount
remaining  unpaid by the Borrowers to the Issuing Bank under clause (i) from and
including the date on which such amount becomes  payable  pursuant to clause (i)
until payment in full,  payable on demand, at a per annum rate of interest equal
to the rate  applicable to the  Revolving  Credit  Advances  which are Base Rate
Loans under Section 2.7. If the Borrowers  shall fail to pay to the Issuing Bank
the  Reimbursement  Obligation  on the date on which the  Issuing  Bank shall be
required to pay any draft presented under any Letter of Credit, the Issuing Bank
shall,  to the extent the  Borrowers  have  availability  to request a Revolving
Credit  Advance,  consider  such failure to be a request for a Revolving  Credit
Advance or, with the Agent's  consent,  a Swing Line Loan,  in the amount of the
unpaid  Reimbursement  Obligation  (which request shall be deemed a confirmation
that the  conditions  set forth in  Section  3.2 have been  satisfied),  and the
Issuing Bank shall apply the proceeds of such Revolving  Credit Advance,  or the
Agent shall apply the proceeds of such Swing Line Loan, to reimburse the Issuing
Bank for the Reimbursement Obligation.

                  (d) The Borrowers shall,  jointly and severally,  quarterly in
arrears on the last day of each calendar  quarter for the immediately  preceding
calendar quarter or portion  thereof,  pay (i) a fee (in each case, a "Letter of
Credit Fee") to the Issuing Bank for the account of the Revolving Credit Lenders
in respect of each Letter of Credit issued at the request of the Borrowers equal
to the LIBOR Rate Margin for Revolving  Credit  Advances in effect at such time,


                                       35
<PAGE>

multiplied  by the face amount of each Letter of Credit and (ii) a fronting  fee
to the Issuing Bank for its account  equal to 1/4% per annum  multiplied  by the
face amount of each Letter of Credit.  The Issuing Bank shall, in turn, remit to
each Revolving  Credit Lender its pro rata portion of such Letter of Credit Fee.
In addition,  the Borrowers  shall,  jointly and  severally,  pay to the Issuing
Bank, for its own account, on the date of issuance,  or any extension or renewal
of any  Letter of Credit and at such  other  time or times as such  charges  are
customarily  made by the Issuing Bank,  the Issuing  Bank's  standard  issuance,
processing,  negotiation,  amendment  and  administrative  fees,  determined  in
accordance with customary fees and charges for similar facilities.

                  (e) Each payment by the Borrowers  hereunder  shall be made to
the Issuing Bank at the Issuing Bank's head office in Boston,  Massachusetts  in
immediately available funds. Interest on any and all amounts remaining unpaid by
the  Borrowers  under this  Section  2.16 at any time from the date such amounts
become due and payable  (whether as stated in this Section 2.16, by acceleration
or otherwise)  until payment in full (whether before or after judgment) shall be
payable to the Issuing  Bank on demand at the rate  specified in Section 2.7 for
the overdue principal on Revolving Credit Advances which are Base Rate Loans.

                  (f) The  obligations  of the  Borrowers  with  respect  to the
Letters of Credit shall be joint and several, unconditional and irrevocable, and
shall be paid strictly in accordance  with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:

                           (i)      any lack of validity or enforceability of
        the Letters of Credit;

                           (ii) any  amendment or waiver of or any consent to or
        actual departure from this Agreement;

                           (iii) the existence of any claim, set-off, defense or
         other  right  which  the  Borrowers  may have at any time  against  any
         beneficiary  or any transferee of a Letter of Credit (or any Persons or
         entities for which any such  beneficiary or any such  transferee may be
         acting),  the Issuing  Bank or any other  Person or entity,  whether in
         connection with this Agreement, the transactions contemplated herein or
         in any other agreements or any unrelated transaction;

                           (iv) any  statement or any other  document  presented
         under a Letter of Credit proving to be forged,  fraudulent,  invalid or
         insufficient  in any respect or any  statement  therein being untrue or
         inaccurate in any respect;

                           (v)  payment  by the  Issuing  Bank under a Letter of
         Credit against  presentation by the  beneficiary  thereof of a draft or
         certificate  which  does not  comply  with the terms of such  Letter of
         Credit; or



                                       36
<PAGE>

                           (vi) any other circumstance or happening  whatsoever,
         whether or not similar to any of the foregoing.

                  (g) The Uniform  Customs and Practice  shall be binding on the
Borrowers,  the Revolving  Credit  Lenders and the Issuing  Bank.  The Borrowers
assume all risks of the acts or omissions of the  beneficiary  of each Letter of
Credit with  respect to such  Letter of Credit.  In  furtherance  of, and not in
limitation of the Issuing Bank's rights and powers under the Uniform Customs and
Practice,  but  subject to all other  provisions  of this  paragraph  (g), it is
understood  and agreed that the Issuing Bank shall not have any  liability  for,
and that the Borrowers assume all responsibility for: (i) the genuineness of any
signature;  (ii) the  form,  correctness,  validity,  sufficiency,  genuineness,
falsification  and legal effect of any draft,  certification  or other  document
required by a Letter of Credit or the authority of the Person  signing the same;
(iii) the failure of any instrument to bear any reference or adequate  reference
to a Letter of Credit or the  failure  of any  Persons to note the amount of any
instrument  on the  reverse  of a Letter of Credit or to  surrender  a Letter of
Credit or  otherwise  to comply  with the  terms  and  condition  of a Letter of
Credit;  (iv) the good faith or acts of any Person  other than the Issuing  Bank
and its agents and employees;  (v) the existence,  form or sufficiency or breach
or default under any agreement or instrument of any nature whatsoever;  (vi) any
delay in giving or failure to give any notice,  demand or protest; and (vii) any
error,  omission,  delay in or nondelivery of any notice or other communication,
however  sent.  The  determination  as to whether  the  required  documents  are
presented  prior to the  expiration of a Letter of Credit and whether such other
documents  are in proper and  sufficient  form for  compliance  with a Letter of
Credit  shall  be  made  by the  Issuing  Bank  in its  sole  discretion,  which
determination shall be conclusive and binding upon the Borrowers absent manifest
error. It is agreed that the Issuing Bank may honor, as complying with the terms
of a Letter of Credit and this Agreement,  any documents  otherwise in order and
signed or issued by the beneficiary thereof. Any action, inaction or omission on
the part of the Issuing Bank under or in  connection  with the Letters of Credit
or any related instruments or documents, if in good faith and in conformity with
such laws,  regulations or commercial or banking customs as the Issuing Bank may
reasonably deem to be applicable, shall be binding upon the Borrowers, shall not
place the  Issuing  Bank under any  liability  to the  Borrowers,  and shall not
affect,  impair or prevent the vesting of any of the  Issuing  Bank's  rights or
powers  hereunder or the  Borrowers'  obligation to make full  reimbursement  of
amounts drawn under the Letters of Credit.

                  (h) If the Borrowers,  either in writing or orally, request or
consent to any  modification or extension of a Letter of Credit or waive failure
of any  draft,  certificate  or other  documents  to comply  with the terms of a
Letter of Credit, the Issuing Bank shall be entitled to rely and shall be deemed
to have relied on such  request,  consent or waiver  with  respect to any action
taken or omitted by the Issuing Bank  pursuant to any such  request,  consent or
waiver,  and such  extension,  modification  or waiver shall be binding upon the
Borrowers.

                                       37
<PAGE>

                  (i) Each  Revolving  Credit  Lender  severally  agrees that it
shall be absolutely  liable,  without regard to the occurrence of any Default or
Event of Default or any other condition precedent  whatsoever,  to the extent of
such Lender's Revolving Credit Commitment  Percentage,  to reimburse the Issuing
Bank on demand for the amount of each draft paid by the Issuing  Bank under each
Letter of Credit  to the  extent  that  such  amount  is not  reimbursed  by the
Borrowers pursuant to paragraph (c) above (such agreement for a Revolving Credit
Lender  being  called  herein  the  "Letter  of  Credit  Participation"  of such
Revolving Credit Lender).

                  (j) If any  draft  shall  be  presented  or other  demand  for
payment shall be made under any Letter of Credit,  the Issuing Bank shall notify
the  Borrowers  of the date and  amount of the  draft  presented  or demand  for
payment and of the date and time when it expects to pay such draft or honor such
demand for  payment.  If the  Borrowers  fail to  reimburse  the Issuing Bank as
provided in paragraph (c) above on or before the date that such draft is paid or
other  payment is made by the Issuing  Bank,  the  Issuing  Bank may at any time
thereafter  notify the Revolving Credit Lenders of the amount of any such unpaid
Reimbursement  Obligation. No later than 3:00 p.m. (Boston time) on the Business
Day next  following  the receipt of such notice,  each  Revolving  Credit Lender
shall make  available to the Issuing Bank, at its head office located in Boston,
Massachusetts,  in immediately  available funds, such Lender's  Revolving Credit
Commitment Percentage of such unpaid Reimbursement Obligation,  together with an
amount equal to the product of (i) the average, computed for the period referred
to in clause (iii)  below,  of the weighted  average  interest  rate paid by the
Issuing  Bank for federal  funds  acquired  by the Issuing  Bank during each day
included in such period,  times (ii) the amount equal to such Lender's Revolving
Credit  Commitment  Percentage of such unpaid  Reimbursement  Obligation,  times
(iii) a fraction,  the numerator of which is the number of days that elapse from
and  including  the date the Issuing Bank paid the draft  presented for honor or
otherwise  made  payment to the date on which  such  Lender's  Revolving  Credit
Commitment  Percentage  of such unpaid  Reimbursement  Obligation  shall  become
immediately available to the Issuing Bank, and the denominator of which is 360.

                  (k) Neither the Issuing Bank nor any  Revolving  Credit Lender
nor any of their officers, directors or employees shall be liable or responsible
for:  (i) the use  which  may be made of any  Letter  of  Credit  or any acts or
omissions of any  beneficiary  or transferee in connection  therewith;  (ii) the
validity,  sufficiency  or  genuineness  of  documents,  or of  any  endorsement
thereon,  even if  such  documents  should  prove  to be in any or all  respects
invalid,  insufficient,  fraudulent or forged; (iii) payment by the Issuing Bank
against presentation of documents which do not comply with the terms of a Letter
of Credit,  including failure of any documents to bear any reference or adequate
reference to a Letter of Credit; or (iv) any other  circumstances  whatsoever in
making or failure to make  payment  under a Letter of  Credit;  provided,  that,
notwithstanding  anything in this Section 2.16 to the  contrary,  the  Borrowers
shall have a claim  against the  Revolving  Credit  Lenders,  and the  Revolving
Credit Lenders shall be liable to the Borrowers,  to the extent, but only to the
extent,  of any direct,  as opposed to  consequential,  damages  suffered by the
Borrowers  which were  caused by the  Issuing  Bank's  failure to conform to the
standards  of the  Uniform  Customs  and  Practice.  In  furtherance  and not in


                                       38
<PAGE>

limitation of the foregoing,  the Issuing Bank may accept  documents that appear
on their face to be in order, without  responsibility for further investigation,
regardless of any notice or information to the contrary.

         Section 2.17      Collection of Accounts.

                  (a) American Ski and the other  Borrowers  shall establish and
maintain, at their expense,  deposit account arrangements with the Agent and the
other banks set forth on Schedule 2.17 hereto and after prior written  notice to
the Agent,  such other  banks as any  Borrower  may  hereafter  select  that are
acceptable to the Agent.  The banks set forth on Schedule 2.17 constitute all of
the  banks  with  whom  American  Ski,  any other  Borrower  and any  Restricted
Subsidiary has deposit account arrangements as of the date hereof and identifies
each of the  deposit  accounts  at such banks to an  operating  location of each
Borrower or otherwise describes the nature of the use of such deposit account by
each Borrower.

                  (b) Each  Borrower  shall  deposit  all  proceeds  (other than
amounts  of cash,  not to exceed  $100,000  for any  location  operated  by such
Borrower,  for opening cash at such location  consistent  with past practices so
long as no Default  exists or has  occurred)  from sales of goods or services in
every form,  including,  without limitation,  cash, checks, credit or debit card
sales  drafts,  credit or debit card sales or charge slips or receipts and other
forms of daily  receipts,  from each  location of each Borrower on each Business
Day into the concentration accounts of the Borrowers identified to each Borrower
location as set forth on Schedule 2.17.

                  (c)  For  purposes  of  calculating  interest  on  the  Lender
Obligations,  the payments or other funds  received  pursuant to  paragraph  (b)
above after 2:00 p.m. (Boston time) on any day will be applied (conditional upon
final  collection) to the Lender  Obligations one (1) Business Day following the
date  of  receipt  of  immediately   available  funds  by  the  Agent  from  the
concentration  accounts identified on Schedule 2.17. For purposes of calculating
the amount of the Revolving Credit Advances or Swing Line Loans available to the
Borrowers,  such payments will be applied (conditional upon final collection) to
the  Lender  Obligations  on the  Business  Day of  receipt  by the Agent in the
concentration  accounts  identified  on  Schedule  2.17,  if such  payments  are
received  within  sufficient  time (in  accordance  with the  Agent's  usual and
customary  practices as in effect from time to time) to credit  Borrowers'  loan
account  on such  day,  and if not,  then on the  next  Business  Day.  All such
payments shall be applied by the Agent first to any outstanding Swing Line Loans
and second,  at the Agent's  election and in accordance  with the  provisions of
Section 4.2(a), to any outstanding Revolving Credit Advances which are Base Rate
Loans,  and any  amounts not so applied  shall be retained in the  concentration
accounts until they can be so applied.

     Section  2.18 Swing Line  Commitment.  Subject to the terms and  conditions
hereof,  BankBoston,  N.A. (in such capacity, the "Swing Line Lender") agrees to
make a portion of the credit  otherwise  available to the  Borrowers  hereunder,
from time to time prior to the  Revolving  Credit  Termination  Date,  by making


                                       39
<PAGE>

swing line loans ("Swing Line Loans") to the  Borrowers,  jointly and severally,
in an aggregate  principal  amount not to exceed at any one time outstanding the
Swing Line Commitment; provided that (a) the aggregate principal amount of Swing
Line Loans  outstanding  at any time shall not exceed the Swing Line  Commitment
then in effect  (notwithstanding  that the Swing Line Loans  outstanding  at any
time,  when  aggregated  with the Swing Line Lender's  other  outstanding  Loans
hereunder,  may  exceed the Swing Line  Commitment  then in effect)  and (b) the
Borrowers shall not request, and the Swing Line Lender shall not make, any Swing
Line Loan if,  after  giving  effect to the making of such Swing Line Loan,  the
aggregate amount of the Available Revolving Credit Amount would be less than $0.
Prior to the Revolving Credit  Termination Date, the Borrowers may use the Swing
Line Commitment by borrowing,  repaying and reborrowing,  all in accordance with
the terms and  conditions  hereof.  Swing Line Loans shall be Base Rate Loans or
Money Market Loans only. The Borrowers may use the proceeds of Revolving  Credit
Advances  from time to time to repay  any  outstanding  Swing  Line  Loans.  The
Borrowers,  jointly and severally,  shall repay all outstanding Swing Line Loans
on the Revolving  Credit  Termination  Date. On the Closing Date,  the Borrowers
shall  deliver to the Swing Line Lender a Swing Line Note to evidence  the Swing
Line  Loans  from time to time made by the Swing  Line  Lender to the  Borrowers
hereunder.

     Section 2.19  Procedure  for Swing Line  Borrowing;  Interest on Swing Line
Loans.  Whenever the Borrowers desire that the Swing Line Lender make Swing Line
Loans  under  Section  2.18,  American  Ski  shall  give the Swing  Line  Lender
irrevocable  telephonic  notice  confirmed  promptly in writing by delivery of a
Notice of Revolving Credit or Swing Line Borrowing (which telephonic notice must
be received by the Swing Line Lender not later than 1:00 P.M.,  Boston time,  on
the proposed  borrowing  date),  specifying  (a) the amount to be borrowed,  (b)
whether  such Swing Line Loan is  requested  to be a Money Market Loan or a Base
Rate Loan and (c) the  requested  borrowing  date (which shall be a Business Day
prior to the Revolving Credit  Termination  Date); and not later than 3:00 P.M.,
Boston time, on the borrowing  date  specified in the notice in respect of Swing
Line  Loans,  the Swing Line Lender  shall make the  proceeds of such Swing Line
Loan  available to American  Ski, as agent for the  Borrowers on such  borrowing
date in accordance with the instructions of ASC East;  provided,  however,  that
the provisions of the cash management arrangements between the Borrowers and the
Swing Line Lender,  including any  provisions  relating to automatic  Swing Line
Loans to fund daily  disbursements  under a Borrower's  controlled  disbursement
account shall supersede the foregoing requirements.  The Borrowers,  jointly and
severally, shall pay interest on the unpaid balance of the Swing Line Loans from
time to time  outstanding at a per annum rate equal to the Applicable  Base Rate
or the Money  Market Rate as agreed to by the Swing Line Lender and the Borrower
at the time of making  the Swing  Line  Loan.  Interest  on the Swing Line Loans
shall be payable  quarterly  in arrears on the first day of the month  following
the end of each fiscal quarter, commencing November 1, 1999 and continuing until
all of the  Indebtedness  of the  Borrowers  to the Swing Line Lender  hereunder
shall have been paid in full.

                                       40
<PAGE>

         Section 2.20      Refunded Swing Line Loans; Swing Line Loan
                           Participations.

                  (a) The Swing Line  Lender,  at any time and from time to time
in its sole and  absolute  discretion  may,  and in any event not less than once
each week shall, on behalf of the Borrowers (which hereby irrevocably direct the
Swing Line Lender to act on their behalf) on one Business  Day's notice given by
the Swing Line  Lender no later than  12:00  noon,  Boston  time,  request  each
Revolving  Credit Lender to make, and each Revolving Credit Lender hereby agrees
to make,  a  Revolving  Credit  Advance  in an  amount  equal  to such  Lender's
Revolving Credit Commitment Percentage of the aggregate amount of the Swing Line
Loans (the "Refunded Swing Line Loans")  outstanding on the date of such notice,
to repay the Swing Line  Lender.  Unless any of the events  described in Section
10(f) shall have  occurred and be  continuing  (in which case the  procedures of
Section 2.20(c) shall apply), each Revolving Credit Lender shall make the amount
of such Revolving Credit Advance  available to the Agent at its office set forth
in Section  14.1 in  immediately  available  funds,  not later than 10:00  A.M.,
Boston time,  one  Business  Day after the date of such notice.  The proceeds of
such Revolving  Credit  Advances shall be immediately  applied by the Swing Line
Lender  to repay  the  Refunded  Swing  Line  Loans.  Effective  on the day such
Revolving  Credit Advances are made, the portion of the Swing Line Loans so paid
shall no longer be  outstanding  as Swing Line Loans and shall be outstanding as
Revolving Credit Advances and owed to the Revolving Credit Lenders in accordance
with their respective  Revolving Credit  Commitment  Percentages.  The Borrowers
irrevocably  authorize the Swing Line Lender to charge the  Borrowers'  accounts
with the Agent (up to the amount  available in each such account) to immediately
pay the amount of such Refunded Swing Line Loans to the extent amounts  received
from the  Revolving  Credit  Lenders  are not  sufficient  to repay in full such
Refunded Swing Line Loans.

                  (b) The  making of any  Swing  Line  Loan  hereunder  shall be
subject to the satisfaction of the applicable  conditions  precedent thereto set
forth in  Section  3.1,  in the case of any  Swing  Line  Loan to be made on the
Closing Date, and Section 3.2, in the case of all other Swing Line Loans (unless
otherwise  waived in accordance with Section 11.1).  The Swing Line Lender shall
notify  American Ski of its election not to make Swing Line Loans hereunder as a
result of the failure to satisfy such conditions  precedent,  unless an Event of
Default of the type  specified  in Section  10.1(f)  shall have  occurred and be
continuing.

                  (c) If prior to the time a Revolving Credit Advance would have
otherwise been made pursuant to Section  2.20(a) one of the events  described in
Section  10(f) shall have  occurred and be  continuing,  each  Revolving  Credit
Lender shall,  on the date such  Revolving  Credit Advance was to have been made
pursuant to the notice referred to in Section  2.20(a) (the  "Refunding  Date"),
purchase  an  undivided  participating  interest  in an amount  equal to (i) its
Commitment  Percentage  times (ii) the aggregate  principal amount of Swing Line
Loans then outstanding which were to have been repaid with such Revolving Credit
Advances (the "Swing Line  Participation  Amount").  On the Refunding Date, each


                                       41
<PAGE>

Revolving Credit Lender shall transfer to the Swing Line Lender,  in immediately
available funds, such Revolving Credit Lender's Swing Line Participation  Amount
and upon receipt  thereof the Swing Line Lender shall deliver to such  Revolving
Credit Lender a certificate evidencing such Swingline Participation Amount dated
the date of the Swing Line Lender's receipt of such funds and in such Swing Line
Participation Amount.

                  (d)  Whenever,  at any time  after the Swing  Line  Lender has
received from any Revolving  Credit Lender such Revolving  Credit Lender's Swing
Line Participation Amount, the Swing Line Lender receives any payment on account
of the Swing Line Loans, the Swing Line Lender will distribute to such Revolving
Credit Lender its Swing Line Participation Amount  (appropriately  adjusted,  in
the case of interest  payments,  to reflect the period of time during which such
Revolving Credit Lender's participating interest was outstanding and funded and,
in the case of principal and interest payments, to reflect such Revolving Credit
Lender's pro rata portion of such payment if such payment is not  sufficient  to
pay the  principal of and interest on all Swing Line Loans then due);  provided,
however,  that in the event that such payment  received by the Swing Line Lender
is required to be  returned,  such  Revolving  Credit  Lender will return to the
Swing Line Lender any portion thereof previously  distributed to it by the Swing
Line Lender.

                  (e) Each  Revolving  Credit  Lender's  obligation  to make the
Loans referred to in Section  2.20(a) and to a purchase  participating  interest
pursuant to Section 2.20(c) shall be absolute and unconditional and shall not be
affected by any circumstance,  including,  without limitation,  (i) any set-off,
counterclaim,  recoupment,  defense or other right which such  Revolving  Credit
Lender or the Borrowers may have against the Swing Line Lender, the Borrowers or
any other Person for any reason  whatsoever;  (ii) the occurrence or continuance
of a Default or an Event of Default or the  failure to satisfy  any of the other
conditions  specified  in Section 5; (iii) any adverse  change in the  condition
(financial or otherwise) of the Borrowers;  (iv) any breach of this Agreement or
any other Lender  Agreement by the  Borrowers  or any other  Lender;  or (v) any
other  circumstances,  happening or event whatsoever,  whether or not similar to
any of the foregoing.

     Section 2.21 Release of Certain Liens. (a) Notwithstanding  anything herein
to the contrary,  the parties hereto  acknowledge  that the Borrowers shall have
the right to  transfer  to any  Unrestricted  Subsidiary  parcels of Excess Real
Property,  in each case so long as there exists no Default. Upon the transfer of
any such Excess Real Property on request of American Ski, at any time so long as
there  exists no  Default,  the Agent  shall  release  any parcel of Excess Real
Property  from the Lien of the Mortgage and  Security  Agreements  to which such
parcel of Excess Real Property is subject, provided that such release shall only
be granted if the following conditions have been met or satisfied:

                           (i) The Borrowers  shall  reimburse the Agent for any
         costs and expenses it incurs arising from the transfer of the parcel of
         Excess  Real  Property  and any  release of such  parcel of Excess Real


                                       42
<PAGE>

         Property from the Lien of the Mortgage (including,  without limitation,
         reasonable attorneys' fees and expenses);

                           (ii)  No Default exists hereunder;

                           (iii) Each applicable  municipal authority exercising
         jurisdiction over the parcel of Excess Real Property has approved a lot
         split ordinance or other applicable action under local law dividing the
         parcel of Excess Real  Property  from the  remainder  of the  Mortgaged
         Property and assigning separate tax identification numbers to each;

                           (iv)  No  part of the  remaining  Mortgaged  Property
         shall be part of a tax lot  affecting  any  portion  of the  parcel  of
         Excess Real Property;

                           (v) All requirements under all laws, statutes,  rules
         and  regulations  (including,   without  limitation,   all  zoning  and
         subdivision laws, setback requirements,  sideline requirements, parking
         ratio  requirements,  use  requirements  and  building  and  fire  code
         requirements)   applicable  to  the  Mortgaged  Property  necessary  to
         accomplish the lot split shall have been fulfilled;

                           (vi) As a  result  of the lot  split,  the  remaining
         Mortgaged  Property  will not be in  violation of any  applicable  law,
         statute, rule or regulation (including,  without limitation, all zoning
         and subdivision  laws,  setback  requirements,  sideline  requirements,
         parking ratio requirements, use requirements and building and fire code
         requirements)  and all  necessary  variances,  if any,  shall have been
         obtained;

                           (vii) Appropriate  reciprocal easement agreements for
         the  benefit and burden of the  remaining  Mortgaged  Property  and the
         parcel of Excess Real Property  regarding the use of common  facilities
         of such parcels,  including, but not limited to, open areas, ski lifts,
         ski trails, roadways,  parking areas, utilities,  snowmaking facilities
         and community facilities and related infrastructure by the occupants of
         the  remaining  Mortgaged  Property  and  the  parcel  of  Excess  Real
         Property,  in a form  and  substance  acceptable  to  Agent.  shall  be
         declared and recorded;

                           (viii) American Ski shall have delivered to Agent one
         or more endorsements to the title insurance  policies insuring the Lien
         of the applicable Mortgage or such other evidence reasonably acceptable
         to the Lender insuring that,  after giving effect to such release,  the
         title insurance  policies insuring the Lien of the applicable  Mortgage
         are in full force and effect and unaffected by such release; and

                           (ix)  Borrower   shall  execute  such  documents  and
         instruments as Agent shall  reasonably  require in connection  with the
         foregoing.

                                       43
<PAGE>

                  (b) So long as no Default exists,  the Agent shall release the
liens on properties or assets sold or disposed of in connection  with  Permitted
Dispositions and Permitted Non-Strategic Asset Sales.

               ARTICLE 3. CONDITIONS TO LOANS AND ADVANCES

     Section 3.1 Conditions to the Term Loans and the Initial  Revolving  Credit
Advance.  The  Lenders'  obligations  to make the  Term  Loans  and the  initial
Revolving  Credit  Advance shall be subject to compliance by the Borrowers  with
their  agreements  contained in this Agreement,  and to the condition  precedent
that  the  Lenders  shall  have  received  each of the  following,  in form  and
substance  satisfactory  to the Agent and its  counsel  or in the form  attached
hereto as an Exhibit, as the case may be:

                  (a) Notes.  The Term Loan Notes and the Revolving Credit Notes
duly executed by the Borrowers.

                  (b) Guaranty Agreements. The Guaranty Agreements duly executed
by AJT, Inc., and WVSAL, Inc.

                  (c)  Resolutions.  Copies of the  resolutions  of the Board of
Directors  of  American  Ski and its  Subsidiaries  authorizing  the  execution,
delivery and performance of this Agreement,  the Term Loan Notes,  the Revolving
Credit  Notes,  the Swing Line  Note,  the  Guaranty  Agreements,  the  Security
Agreements and the other Lender  Agreements  executed in connection  herewith to
which the American Ski or any Restricted Subsidiary is a party, certified by the
Secretary or an Assistant  Secretary  (or Clerk or Assistant  Clerk) of American
Ski and each of its  Subsidiaries  (which  certificate  shall  state  that  such
resolutions are in full force and effect).

                  (d) Incumbency. A certificate of the Secretary or an Assistant
Secretary  (or  Clerk  or  Assistant  Clerk)  of  American  Ski and  each of its
Subsidiaries  certifying the name and signatures of the officers of American Ski
and each of its  Subsidiaries  authorized to sign this Agreement,  the Term Loan
Notes, the Revolving Credit Notes, the Swing Line Note, the Guaranty Agreements,
the Security  Agreements,  the other Lender  Agreements  executed in  connection
herewith to which  American  Ski, any Borrower or any  Subsidiary is a party and
the other documents to be delivered by American Ski and the Borrowers hereunder.

                  (e) Certificates of Existence. Copies of certificates of legal
existence,  corporate or partnership good standing and foreign qualification for
American Ski, each Borrower and each other Restricted Subsidiary of American Ski
of recent date issued by the appropriate California,  Colorado, Delaware, Maine,
Nevada, New Hampshire, Utah and Vermont Governmental Authorities.

                                       44
<PAGE>

                  (f) Legal Opinions.  The opinions of Pierce Atwood,  Wadleigh,
Starr,  Peters,  Dunn & Chiesa,  Reiber,  Kenlan,  Schwiebert,  Hall & Facey and
Scarpello & Alling,  counsel to American Ski, the Borrowers and their Restricted
Subsidiaries,  dated the date of execution of this Agreement,  in  substantially
the forms of Exhibit O attached hereto.

                  (g)  Satisfaction  of  Conditions.  A certificate of the chief
executive  officer or chief financial officer of American Ski and each Borrower,
dated the Closing Date, to the effect that all conditions  precedent on the part
of American Ski and the Borrowers to the  execution and delivery  hereof and the
making of the Term Loans and the  initial  Revolving  Credit  Advance  have been
satisfied.

                  (h)  Governmental  Approvals.  Evidence  of the receipt of all
necessary governmental authorizations, consents and approvals for the execution,
delivery and  performance  by American Ski and its Restricted  Subsidiaries  and
their  Subsidiaries  party thereto of this Agreement,  the Term Loan Notes,  the
Revolving Credit Notes, the Swing Line Note and the other Lender Agreements.

                  (i) Merger of ASC East and ASC West,  Inc.  Evidence  that the
merger of ASC East and ASC West,  Inc. with and into the predecessor of American
Ski has been consummated.

                  (j) Fourth  Supplemental  Indenture.  American  Ski and United
States Trust Company of New York, as Trustee, shall have entered into the Fourth
Supplemental  Indenture  relating to the Senior  Subordinated Notes on terms and
conditions satisfactory to the Agent.

                  (k) Agent's  Fee.  Receipt by the Agent for its own account of
the fees due to it pursuant to the Fee Letter.

                  (l) Solvency  Certificates.  Receipt of a  certificate  of the
chief  financial  officer  of  American  Ski  and  each  Restricted  Subsidiary,
demonstrating the solvency of American Ski and each Restricted Subsidiary.

                  (m)  Security  Agreements.  Each of the  Security  Agreements,
shall have been duly and  properly  authorized,  executed  and  delivered by the
parties  thereto  and shall be in full force and  effect,  and  pursuant  to the
Security  Agreements  the  Borrowers  shall  have  granted  to the  Agent  first
perfected,  valid and binding security interests,  liens and encumbrances on all
of the  assets of the  Borrowers  in favor of the Agent  (subject  only to Liens
permitted under Section 9.2) including without limitation:

                           (i) all fee simple and leasehold  interests in and to
         all real property owned or leased by the Borrowers and their Restricted


                                       45
<PAGE>

         Subsidiaries  other than those leases set forth on Schedule 3.1(q), and
         all  buildings  and  improvements  now  located  or to  be  constructed
         thereon, whether now owned or hereafter acquired;

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

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

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

                  (n) Recording of  Mortgages,  Financing  Statements,  Etc. All
actions  necessary  or  appropriate  to perfect the Agent's  liens and  security
interests in the assets of the Borrowers and their Restricted Subsidiaries shall
have been fully performed including without limitation:

                           (i) the due and proper recording and filing of all of
         the Mortgages, Collateral Assignments of Leases, Collateral Assignments
         of Income, Assignments in Trust and Assignments of Licenses;

                           (ii) the filing of Uniform  Commercial Code financing
         statements  necessary to perfect the security interests of the Agent in
         the assets of the Borrowers; and

                           (iii) the  receipt by the Agent of  commitments  from
         Lawyer's  Title  Insurance  Corporation  to issue  ALTA  standard  form
         mortgage  loan  policies or  endorsements  thereto  insuring  the first
         priority of the Mortgages,  subject only to Permitted  Liens,  covering
         all real  property of the  Borrowers  both as owned in fee or held as a
         leasehold  estate under the Leases or  otherwise  and covering the real
         property  described in the Mortgages in an aggregate amount of not less
         than   $165,000,000,   such  policies  to  be  in  form  and  substance
         satisfactory  to  the  Agent,   including  without   limitation,   such
         endorsements and affirmative  insurance as the Agent shall require with
         the standard tenant's and mechanic's liens exceptions  deleted and with
         such portions of the survey coverage  deleted as the Agent may require,


                                       46
<PAGE>

         and the Agent  shall also have  received  proof of full  payment of all
         fees and premiums for said policies and copies of all documents  listed
         as exceptions on Schedule B to each such policy.

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

                  (p) Unrestricted Subsidiary Acknowledgment.  An Acknowledgment
from each Unrestricted Subsidiary in the form attached hereto as Exhibit R.

                  (q) Series B Preferred Stock Agreements.  The Agent shall have
received true and correct copies of the Series B Preferred Stock Agreements duly
executed by all parties thereto and evidence that the transactions  contemplated
thereby,  including,  without limitation, the issuance of the Series B Preferred
Stock, have occurred.

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

     Section 3.2 Conditions to All Loans.  The Lenders'  obligations to make any
Loans pursuant to this Agreement shall be subject to compliance by the Borrowers
and the Guarantors  with their  agreements  contained in this Agreement and each
other Lender Agreement, and to the satisfaction, at or before the making of each
Loan, of all of the following conditions precedent:

                  (a) The  representations  and warranties herein and those made
by or on behalf of the Borrowers in any other Lender  Agreement shall be correct
as of the date on which any Loan is made, with the same effect as if made at and
as of such  time  (except  as to  representations  and  warranties  made as of a
certain  date,  which shall be true and correct in all  material  respects as of
such date, except as to transactions  permitted  hereunder,  and except that the
references  in  Article 5 to the 1998  Financial  Statements  shall be deemed to
refer to the most recent annual  audited  consolidated  financial  statements of
American Ski and its Subsidiaries furnished to the Agent.)

                  (b) On the date of any Loan  hereunder,  there  shall exist no
Default.

                                       47
<PAGE>

                  (c) The making of the  requested  Loan shall not be prohibited
by any law or governmental  order or regulation  applicable to the Lenders or to
the Borrowers,  and all necessary consents,  approvals and authorizations of any
Person for any such Loan shall have been obtained.


                        ARTICLE 4. PAYMENT AND REPAYMENT

     Section 4.1 Mandatory Repayments and Prepayment
--------------------------------------------------------------------------------

                  (a) If at any  time  the  sum  of  the  aggregate  outstanding
principal balance of all Revolving Credit Advances and all Swing Line Loans made
hereunder exceeds the Available Revolving Credit Amount, the Borrowers,  jointly
and severally,  shall immediately repay to the Agent for the ratable accounts of
the Revolving  Credit Lenders an amount equal to such excess to be applied first
to the Swing Line Loans and second to the Revolving Credit Advances.

                  (b) The  Borrowers  will  repay the Term  Loans in six  annual
installments,  payable on May 31 of each year,  commencing  May 31, 2000, in the
following amounts

                  Payment Date                                Amount

                  May 31, 2000                   $   650,000
                  May 31, 2001                       650,000
                  May 31, 2002                       650,000
                  May 31, 2003                       650,000
                  May 31, 2004                       650,000
                  May 31, 2005                       30,000,000
                  May 31, 2006                       31,750,000

In any event, the final  installment due on the Term Loan Maturity Date shall be
equal to the  outstanding  principal  balance of the Term Loans,  together  with
accrued  interest and all other amounts due  hereunder in connection  therewith.
The  amount of the  principal  installments  of the Term  Loans are  subject  to
adjustment as provided in paragraph (c) below.


                                       48
<PAGE>

                  (c) The Borrowers shall also make prepayments of the following
amounts:

                           (i) Ten days  following the delivery of the Mandatory
         Prepayment Notice (as defined below) by the Agent following each Excess
         Cash  Payment  Date and in  connection  with the  relevant  Excess Cash
         Payment Period,  if the Excess Cash Flow Leverage Ratio for such period
         exceeded  3.50-to-1,  an amount equal to 50% of the Consolidated Excess
         Cash Flow shall be applied as a mandatory  repayment  of  principal  of
         outstanding  Term  Loans  and a  mandatory  reduction  of  the  Maximum
         Revolving Credit Amount in accordance with clause (v) below.

                           (ii) At any time on and after the  Closing  Date,  if
         American  Ski  or  any of its  Restricted  Subsidiaries  receives  Cash
         Proceeds from any  Permitted  Disposition  or receives  Cash  Insurance
         Proceeds,  an amount equal to 100% of the Net Cash  Proceeds  therefrom
         shall be applied as a mandatory  repayment of principal of  outstanding
         Term Loans and a mandatory  reduction of the Maximum  Revolving  Credit
         Amount in accordance with clause (v) below; provided, however that with
         respect  to no more than  $250,000  in the  aggregate  of such Net Cash
         Proceeds  in any  fiscal  year  of  American  Ski  and  its  Restricted
         Subsidiaries,  such Net  Cash  Proceeds  shall  not be  required  to be
         so-applied  if no Default  then  exists  and  American  Ski  delivers a
         certificate to the Agent together with the notice referred to in clause
         (vii)  below  stating  that  such Net Cash  Proceeds  shall be used for
         Permitted Capital  Expenditures and Permitted  Acquisitions by American
         Ski and its Restricted  Subsidiaries  in compliance with this Agreement
         within 365 days following the date of such Permitted Disposition or the
         date of  receipt of such Cash  Insurance  Proceeds  (which  certificate
         shall set forth the estimates of the proceeds to be so  expended);  and
         provided further,  that if all or any portion of such Net Cash Proceeds
         not so-applied to the repayment of Term Loans and a mandatory reduction
         of the Maximum  Revolving Credit Amount are not so used within such 365
         day period,  such remaining portion shall be applied on the last day of
         such period as a mandatory  repayment of principal of outstanding  Term
         Loans and a mandatory  reduction of the Maximum Revolving Credit Amount
         as provided in clause (v) below.

                           (iii) At any time on and after the Closing  Date upon
         which American Ski or any of its Restricted  Subsidiaries  receives any
         proceeds from any issuance of any equity interests,  excluding proceeds
         received from the sale or issuance of equity  interests  which are used
         to effect  Permitted  Acquisitions  on the date of sale or  issuance of
         such equity interests and the Series B Gross Proceeds,  an amount equal
         to 100% of the cash proceeds  therefrom (net of underwriting  discounts
         or placement discounts and commissions and all reasonable and customary
         fees,  costs  and  expenses  associated  with the  marketing,  sale and
         issuance  of  such  equity   interests   paid  to  Persons  other  than
         Affiliates)  shall be applied as a mandatory  repayment of principal of
         outstanding  Term  Loans  and a  mandatory  reduction  of  the  Maximum
         Revolving Credit Amount in accordance with clause (v) below;  provided,
         however that the requirement of this clause (iii) shall not apply until


                                       49
<PAGE>

         the  proceeds  received  by  American  Ski or  any  of  its  Restricted
         Subsidiaries  from the sale or  issuance of equity  interests  to which
         this clause  (iii) would  otherwise  apply plus any  proceeds  from the
         incurrence of debt referred to in clause (iv) below exceed  $10,000,000
         in the aggregate.

                           (iv) At any time  after the  Closing  Date upon which
         American  Ski  or  any  of its  Restricted  Subsidiaries  receives  any
         proceeds  from  any  incurrence  by  American  Ski  or  its  Restricted
         Subsidiaries  of  Indebtedness,  an  amount  equal  to 100% of the cash
         proceeds   therefrom  (net  of  underwriting   discounts  or  placement
         discounts and commissions paid to Persons other than Affiliates)  shall
         be applied as a mandatory  repayment of principal of  outstanding  Term
         Loans and a mandatory  reduction of the Maximum Revolving Credit Amount
         in  accordance  with  clause  (v)  below;  provided,  however  that the
         requirement  of this  clause  (iv) shall not apply  until the  proceeds
         received by American Ski or any of its Restricted Subsidiaries from any
         incurrence of  Indebtedness  to which this clause (iv) would  otherwise
         apply plus any proceeds from the issuance of equity interests  referred
         to in clause (iii) above exceed $10,000,000 in the aggregate.

                           (v)  All  mandatory   prepayments  pursuant  to  this
         Section  4.1(c)  will  (A) be  applied  pro  rata  to  the  outstanding
         principal  amounts of the Term Loans and the Maximum  Revolving  Credit
         Amount,  (B) reduce the remaining  scheduled  principal payments of the
         Term Loans and any scheduled reductions of the Maximum Revolving Credit
         Amount,  as  applicable,  on a pro rata  basis and (C) be made ten days
         following  notice  from the Agent  that such  payment is  required  and
         specifying  the  payment  date (the  "Mandatory  Prepayment  Notice.").
         Nothing in this Section 4.1(c), however, shall require that the Maximum
         Revolving  Credit Amount be reduced to an amount less than  $74,800,000
         and to the extent that any  reductions  hereunder  would have otherwise
         reduced the Maximum  Revolving  Credit Amount below  $74,800,000,  such
         excess  amount shall be applied as a mandatory  prepayment  of the Term
         Loans,  unless  waived by the Term Loan  Lenders as  provided in clause
         (vi) below.

                           (vi)   Notwithstanding   anything  to  the   contrary
         contained in this Section  4.1(c) or elsewhere in this  Agreement,  the
         Term Loan Lenders  shall have the option to waive all or any portion of
         a mandatory repayment of the Term Loans pursuant to this Section 4.1(c)
         (each  such  repayment,  a  "Mandatory  Repayment")  upon the terms and
         provisions set forth in this Section 4.1(c)(vi) ratably on the basis of
         their outstanding Term Loans. In the event any Term Loan Lender desires
         to waive its right to receive all or any portion of any such  Mandatory
         Repayment  in whole or in part,  such Term Loan Lender  shall so advise
         the Agent no later than the close of business two  Business  Days after
         the date of the Mandatory  Prepayment  Notice,  which notice shall also
         include the amount such Term Loan Lender  desires to receive in respect
         of such Mandatory Repayment.  If any Term Loan Lender does not reply to
         the Agent within the two Business  Days,  it will be deemed not to have
         waived any part of such  Mandatory  Repayment.  If any Term Loan Lender
         does not specify an amount it wishes to  receive,  it will be deemed to


                                       50
<PAGE>

         have  accepted  100% of the total  payment.  In the event that any such
         Term Loan Lender waives all or part of such right to receive all or any
         portion of any such Mandatory Repayment,  the Agent shall apply 100% of
         the amount so waived by such Term Loan Lender to a mandatory  reduction
         of the Maximum Revolving Credit Amount as provided herein.

                           (vii)  American Ski shall,  within three (3) Business
         Days of the Excess Cash  Payment Date and the  occurrence  of any event
         described  in  clauses  (ii),  (iii)  or (iv) of this  Section  4.1(c),
         provide the Agent with written notice of the  Consolidated  Excess Cash
         Flow for the relevant  Excess Cash Payment  Period  and/or the proceeds
         received or to be received in  connection  with the  occurrence  of any
         event described in clauses (ii), (iii) or (iv) of this Section 4.1(c).

     Section 4.2      Voluntary Prepayments.

                  (a) The  Borrowers may make  prepayments  to the Agent for the
ratable  accounts  of the Term Loan  Lenders,  the  Swing  Line  Lender  and the
Revolving Credit Lenders,  respectively,  of any outstanding principal amount of
the Term  Loans,  Swing Line Loans or the  Revolving  Credit  Advances  equal to
$100,000 or an integral multiple thereof which are Base Rate Loans in accordance
with Section 4.3 at any time prior to 12:00 noon  (Boston  time) on any Business
Day without premium or penalty;  provided,  however, that repayment of Revolving
Credit  Advances  which are Base  Rate  Loans  may be made in other  amounts  as
provided in Section 2.17(c).

                  (b) The  Borrowers may make  prepayments  to the Agent for the
ratable  accounts  of the Term Loan  Lenders or the  Revolving  Credit  Lenders,
respectively,  of any  outstanding  principal  amount  of the Term  Loans or any
Revolving  Credit  Advances  equal to  $5,000,000  or an  integral  multiple  of
$1,000,000  in excess  thereof  which are LIBOR  Rate Loans in  accordance  with
Section 4.3 at any time prior to 12:00 noon  (Boston  time) on any  Business Day
subject, however, to the premiums and penalties set forth in Section 4.6.

                  (c) Any voluntary  prepayments  of the Term Loans  pursuant to
this Section 4.2 will reduce the remaining  scheduled  principal payments on the
Term Loans pro rata.

     Section 4.3 Payment and Interest Cutoff. Notice of each prepayment pursuant
to Section 4.2 shall be given to the Agent (a) in the case of prepayment of Base
Rate Loans,  not later than 12:00 noon (Boston  time) one (1) Business Day prior
to the proposed  date of payment and (b) in the case of prepayment of LIBOR Rate
Loans on any day  other  than the last  day of the  Interest  Period  applicable
thereto, not later than 12:00 noon (Boston time), three (3) Business Days, prior
to the  proposed  date of payment,  and, in each case,  shall  specify the total
principal  amount of the Term Loans or the Revolving  Credit Advances to be paid
on such date.  Notice of prepayment  having been given in  compliance  with this
Section 4.3, the amount  specified to be prepaid shall become due and payable on
the date  specified  for  prepayment  and from and after said date  (unless  the


                                       51
<PAGE>

Borrowers shall default in the payment thereof)  interest thereon shall cease to
accrue.  Unpaid  interest  on the  principal  amount  of the  Term  Loans or any
Revolving  Credit Advances so prepaid accrued to the date of prepayment shall be
due on the date of prepayment.

     Section 4.4 Payment or Other  Actions on  Non-Business  Days.  Whenever any
payment  to be made  hereunder  shall be stated to be due on a day other  than a
Business Day, such payment  shall be made on the next  succeeding  Business Day,
and such extension of time shall in such case be included in the  computation of
payment of interest or fees, as the case may be. In the case of any other action
the last day for  performance of which shall be a day other than a Business Day,
the date for performance shall be extended to the next succeeding Business Day.

         Section 4.5 Method and Timing of  Payments.

                  (a)  All  payments   required  to  be  made  pursuant  to  the
provisions of this Agreement and any other Lender Agreement, and all prepayments
pursuant to Section  4.1,  may be charged by the Agent  against  any  Borrower's
accounts  with the Agent.  Each  Borrower  hereby  authorizes  the Agent and the
Lenders, without prior notice to the Borrower but with confirming notice to such
Borrower  promptly  thereafter,  to charge  against any account of such Borrower
with the Agent or such Lender an amount equal to the accrued interest, principal
and other amounts from time to time due and payable to the Agent and the Lenders
hereunder and under all other Lender Agreements.

                  (b) The  Borrowers  shall make each payment to be made by them
hereunder  not later than 12:00 noon (Boston time) on the day when due in lawful
money of the United States to the Agent at its address set forth in Section 14.1
in  immediately  available  funds.  The Agent will,  after its receipt  thereof,
distribute  like funds  relating  to the payment of  principal,  interest or any
other amounts payable  hereunder ratably to the Lenders in accordance with their
respective  Commitment  Percentages.  Any payment  made by the  Borrowers to the
Agent  under this  Agreement  or under the Notes in the manner  provided in this
Agreement  shall be deemed to be a payment  to each of the  respective  Lenders,
unless the provisions of this Agreement  expressly provide that any such payment
shall be solely for the account of the Agent or any specific Lender.

     Section 4.6 Payments Not at End of Interest  Period.  If the  Borrowers for
any reason make any payment of principal  with respect to any LIBOR Rate Loan on
any day other than the last day of the Interest Period  applicable to such LIBOR
Rate Loan,  including without  limitation by reason of acceleration,  or fail to
borrow a LIBOR Rate Loan after  electing a LIBOR  Pricing  Option  with  respect
thereto  pursuant to Section 2.6, the Borrowers shall pay to the Agent,  jointly


                                       52
<PAGE>

and severally,  for the ratable account of the Lenders,  any amounts required to
compensate the Lenders for any additional  losses,  costs or expenses which they
may reasonably incur as a result of such payment or failure to borrow, including
without limitation, any loss, including lost profits, costs or expenses incurred
by reason of the liquidation, reutilization or reemployment of deposits or other
funds  acquired by the Lenders to fund or  maintain  such LIBOR Rate Loan.  Such
compensation may include, without limitation,  an amount equal to (a) the amount
of interest which would have accrued on the amount so paid or not borrowed,  for
the period from the date of such  payment or failure to borrow,  to the last day
of the then current Interest Period for such LIBOR Rate Loan (or, in the case of
a failure to borrow,  to the last day of the Interest  Period for the LIBOR Rate
Loan which would have  commenced on the date of such failure to borrow),  at the
applicable  rate of interest for such LIBOR Rate Loan  provided for herein minus
(b) the amount of interest (as reasonably  determined by the Agent), which would
accrue and become  payable to the Lenders  during  such period on the  principal
repaid or not borrowed if the Lenders,  following  such  repayment or failure to
borrow,  were to reinvest such principal in U.S. Treasury securities selected by
the Agent in an amount equal (as nearly as may be) to the principal so repaid or
not  borrowed  and having a term equal (as near as may be) to such  period.  The
Borrowers, jointly and severally, shall pay such amount upon presentation by the
Agent of a  statement  setting  forth the  amount  and the  Agent's  calculation
thereof pursuant hereto, which statement shall be deemed true and correct absent
manifest error.

     Section 4.7 Currency.  All payments and prepayments provided for under this
Agreement  shall be made in lawful  currency of the United  States of America in
immediately available funds.

     Section 4.8 Foreign Lenders.  Each Lender  (including any Successor Lender)
that  is  not a  citizen  or  resident  of  the  United  States  of  America,  a
corporation,  partnership  or other entity  created or organized in or under the
laws of the  United  States of America  (or any  jurisdiction  thereof),  or any
estate or trust that is subject to federal  income  taxation  regardless  of the
source of its income (a "Non-U.S.  Lender")  shall  deliver to the Borrowers and
the Agent (or, in the case of a Credit Participant, to the Lender from which the
related  participation  shall have been  purchased)  two  copies of either  U.S.
Internal  Revenue  Service Form 1001 or Form 4224, or, in the case of a Non-U.S.
Lender claiming exemption from U.S. federal withholding tax under Section 871(h)
or 881(c) of the Code with respect to payments of  "portfolio  interest," a Form
W-8, or any  subsequent  versions  thereof or  successors  thereto (and, if such
Non-U.S.  Lender delivers a Form W-8, an annual  certificate  representing  that
such Non-U.S. Lender is not a "bank" for purposes of Section 881(c) of the Code,
is not a 10%  shareholder  (within  the meaning of Section  871(h)(3)(B)  of the
Code)  of any of the  Borrowers  and  is not a  controlled  foreign  corporation
related to any of the Borrowers  (within the meaning of Section 864(d)(4) of the
Code)),  properly  completed and duly executed by such Non-U.S.  Lender claiming
complete  exemption from, or a reduced rate of, U.S. federal  withholding tax on
all  payments  by the  Borrowers  under  this  Agreement  and the  other  Lender
Agreements.  Such forms shall be delivered by each Non-U.S.  Lender on or before


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<PAGE>

the date it  becomes a party to this  Agreement  (or,  in the case of any Credit
Participant, on or before the date such Credit Participant purchases the related
participation).  In addition,  each  Non-U.S.  Lender  shall  deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S.  Lender. Each Non-U.S.  Lender shall promptly notify the Borrowers
at any time it  determines  that it is no longer in a position  to  provide  any
previously  delivered  certificate  to the  Borrowers  (or  any  other  form  of
certification  adopted  by  the  U.S.  taxing  authorities  for  such  purpose).
Notwithstanding any other provision of this Section 4.8, a Non-U.S. Lender shall
not be  required  to deliver  any form  pursuant  to this  Section 4.8 that such
Non-U.S. Lender is not legally able to deliver.


                   ARTICLE 5. REPRESENTATIONS AND WARRANTIES

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

     Section 5.1 Existence,  Charter and Formation Documents,  Etc. American Ski
and each Restricted  Subsidiary other than Heavenly Valley,  Limited Partnership
is a  corporation,  and  Heavenly  Valley,  Limited  Partnership  is  a  limited
partnership, and each of them is validly organized, legally existing and in good
standing  under the laws of the  jurisdiction  in which it is organized  and has
corporate or partnership power to own its properties and conduct its business as
now  conducted  and as proposed to be conducted by it.  Certified  copies of the
charter  documents  and By-Laws of American Ski and each  Restricted  Subsidiary
have been delivered to the Lenders and are true, accurate and complete as of the
date hereof.

     Section 5.2  Principal  Place of  Business;  Location of Records.  American
Ski's  and  each  Restricted  Subsidiary's  principal  place of  business  is as
described  on  Schedule  5.2,  and  neither  American  Ski  nor  any  Restricted
Subsidiary  has had any other  principal  place of business  during the last six
months.  All of the  books  and  records  or true and  complete  copies  thereof
relating to the  accounts  and  contracts  of American  Ski and each  Restricted
Subsidiary  are and will be kept at such  location  and at the  other  locations
designated on Schedule 5.2.

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

                                       54
<PAGE>

     Section 5.4 Subsidiaries.

                  (a) As of the date hereof and as of the end of the most recent
fiscal  quarter for which a  Compliance  Certificate  has been  delivered  under
Section 6.1(a) hereof,  American Ski has no Subsidiaries except for those listed
on Schedule  5.4(a).  All of the issued and  outstanding  capital  stock of each
Subsidiary  listed on  Schedule  5.4(a) is owned of record and  beneficially  as
described therein. At the time of delivery of a Compliance Certificate, American
Ski may amend Schedule 5.4(a) to add any additional Subsidiaries which have been
formed or acquired without violation of Section 9.3 hereof.

                  (b) As of the  dated  hereof  and  as of the  end of the  most
recent  fiscal  quarter for which a Compliance  Certificate  has been  delivered
under Section 6.1(a) hereof, there are no transactions or relationships  between
American Ski or any of its  Restricted  Subsidiaries,  on the one hand,  and any
Unrestricted  Subsidiary,  on the other, except as disclosed on Schedule 5.4(b).
At the time of  delivery of a  Compliance  Certificate,  American  Ski may amend
Schedule 5.4(b) to add  descriptions of any such  transactions or  relationships
entered into hereafter in compliance with Section 9.5 hereof.

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

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

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

                  (c)      do not and will not

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

                                       55
<PAGE>

                           (ii)   result  in,  or  require,   the   creation  or
         imposition  of any  mortgage,  deed of trust,  pledge,  lien,  security
         interest or other charge or  encumbrance  of any nature on any property
         now owned or  hereafter  acquired by any  Borrower  or any  Subsidiary,
         except as provided in the Lender Agreements, or

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

     Section 5.6 Valid and Binding  Obligations.  This Agreement,  the Term Loan
Notes,  the  Revolving  Credit  Notes,  the  Guaranty  Agreements,  the Security
Agreements and all the other Lender Agreements  executed in connection  herewith
and therewith  constitute,  or will  constitute  when  delivered,  the valid and
binding obligations of the Borrowers and their Subsidiaries  parties thereto, as
the case may be,  enforceable in accordance with their respective terms,  except
as  the  enforceability  thereof  may  be  subject  to  bankruptcy,  insolvency,
moratorium  and other laws  affecting  the rights and remedies of creditors  and
secured  parties and to the exercise of judicial  discretion in accordance  with
general equitable principles.

     Section  5.7 Other  Agreements.  Neither  American  Ski nor any  Restricted
Subsidiary is a party to any indenture,  loan or credit agreement,  or any lease
or other  agreement  or  instrument,  or  subject to any  charter  or  corporate
restriction or any judgment, decree, order, rule or regulation,  which is likely
to have a Material  Adverse  Effect,  or which restricts the ability of American
Ski or any  Restricted  Subsidiary  to carry out any of the  provisions  of this
Agreement,  the Term Loan  Notes,  the  Revolving  Credit  Notes,  the  Guaranty
Agreements,  the Security Agreements or any of the Lender Agreements executed in
connection herewith and therewith.

     Section 5.8 Payment of Taxes.  American Ski and its Subsidiaries have filed
all tax returns  which are  required to be filed by them and have paid,  or made
adequate  provision  for the  payment of, all taxes which have or may become due
pursuant to said returns or to  assessments  received,  except such as are being
contested in good faith by appropriate  proceedings.  All federal tax returns of
American Ski and its  Subsidiaries  through their fiscal year ended in 1991 have
been audited by the Internal Revenue Service or are not subject to such audit by
virtue of the  expiration  of the  applicable  statute  of  limitation,  and the
results of such audits are fully reflected in the balance sheet contained in the
1998  Financial  Statements.  American  Ski  knows  of  no  material  additional
assessments since such date for which adequate reserves appearing in the balance
sheet  contained in the 1998  Financial  Statements  have not been  established.
American Ski and its Subsidiaries  have made adequate  provision for all current
taxes,  and except as  described  on Schedule  5.8, to the best of the  American


                                       56
<PAGE>

Ski's  knowledge  there will not be any  additional  assessments  for any fiscal
periods  prior to and  including  that which  ended on the date of said  balance
sheet in excess of the amounts reserved therefor.

     Section 5.9 Financial Statements

                  (a)  All  balance  sheets,   statements  and  other  financial
information  furnished  to the Agent and the  Lenders  in  connection  with this
Agreement and the transactions contemplated hereby (certain of which information
is listed on Schedule 5.9),  including,  without limitation,  the 1998 Financial
Statements,  have been prepared in accordance with generally accepted accounting
principles  consistently  applied  throughout the periods  involved  (except for
normal  year-end  adjustments  and for the  absence of  footnotes  with  interim
statements) and present fairly as of the date thereof the consolidated financial
condition of American  Ski and its  Subsidiaries  reported  therein and all such
information so furnished was true,  correct and complete as of the date thereof,
in all material respects.

                  (b) To the best  knowledge  of each  Borrower,  no facts exist
that  (individually  or in the aggregate) would result in any material change in
the most recent  projections  delivered under Section 6.3 hereof. The Management
Projections and the most recent  projections  delivered under Section 6.3 hereof
are based  upon  estimates  and  assumptions  which  the  senior  executive  and
financial officers of the Borrowers consider as of the date thereof  reasonable,
have been prepared on the basis of the assumptions  stated therein and as of the
date thereof reflect the reasonable estimates of the Borrowers of the results of
operations and other information projected therein.

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

     Section  5.11  Stock.  As of the date  hereof,  the issued and  outstanding
capital stock of American Ski is as set forth on Schedule  5.4(a) hereto.  There
are presently issued by American Ski's  Restricted  Subsidiaries and outstanding
the shares of capital stock indicated on Schedule  5.4(a).  American Ski and its
Subsidiaries have received the consideration for which such stock was authorized
to be issued and have otherwise complied with all legal requirements relating to
the  authorization  and  issuance  of shares of stock  and all such  shares  are
validly  issued,  fully  paid  and  non-assessable.   The  Borrowers  and  their
Restricted Subsidiaries have no other capital stock of any class outstanding.

     Section 5.12  Changes in  Condition.  Since the date of the balance  sheets
contained in the 1998  Financial  Statements or the most recent  audited  annual
financial  statements  delivered  pursuant  to  Section  6.2  hereof,  except as
described  in any  filing  made by  American  Ski with the  Commission  and also


                                       57
<PAGE>

delivered to the Agent and the Lenders pursuant to Section 6.7 hereof, there has
been no material  adverse  change in the business or assets or in the condition,
financial or otherwise, of American Ski and its Restricted Subsidiaries taken as
a whole, and neither American Ski nor any Restricted Subsidiary has entered into
any transaction  outside of the ordinary course of business which is material to
American  Ski and its  Restricted  Subsidiaries  taken as a whole except for the
issuance and sale of the Series B Preferred Stock.  Neither American Ski nor any
Restricted Subsidiary had, as of the date thereof, any contingent liabilities of
any material amount which are not referred to in the 1998 Financial Statements.

     Section 5.13 Assets, Licenses, Patents, Trademarks, Etc.


                  (a) American Ski and its Restricted Subsidiaries have good and
marketable title to, or valid leasehold  interests in, all of their assets, real
and personal,  including the assets  carried on their books and reflected in the
1998 Financial Statements, subject to no liens, charges or encumbrances,  except
for (i) liens,  charges  and  encumbrances  in  existence  as of the date hereof
described  in Schedule  5.16 and  permitted  by Section 9.2 hereof,  (ii) liens,
charges and encumbrances  arising after the date hereof and permitted by Section
9.2 hereof and (iii)  assets sold,  abandoned  or  otherwise  disposed of in the
ordinary course of business.

                  (b) As of the date hereof and as of the end of the most recent
fiscal  quarter for which a  Compliance  Certificate  has been  delivered  under
Section 6.1(a)  hereof.  American Ski and its  Restricted  Subsidiaries  own all
material licenses,  patents,  patent  applications,  copyrights,  service marks,
trademarks,  trademark  applications,  and trade names  necessary to continue to
conduct their  business as heretofore  conducted by them,  now conducted by them
and  proposed to be conducted by them,  each of which is listed,  together  with
Patent  and  Trademark  Office  application  or  registration   numbers,   where
applicable,  on Schedule  5.13  hereto.  At the time of delivery of a Compliance
Certificate,  American  Ski  may  amend  Schedule  5.13  to add  any  additional
licences, patents, patent applications,  copyrights,  service marks, trademarks,
trademark  applications  and  trade  names.  American  Ski  and  its  Restricted
Subsidiaries  conduct their respective  businesses without infringement or claim
of  infringement  of any material  license,  patent,  copyright,  service  mark,
trademark,  trade name,  trade secret or other  intellectual  property  right of
others.  To the best  knowledge of American Ski and the  Borrowers,  there is no
infringement or claim of infringement by others of any material license, patent,
copyright,   service  mark,  trademark,   trade  name,  trade  secret  or  other
intellectual property right of American Ski and its Restricted Subsidiaries.

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

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<PAGE>

     Section 5.14  Litigation.  Except as described on Schedule 5.14 or the most
recent Compliance Certificate,  there is no litigation,  at law or in equity, or
any proceeding before any federal, state, provincial or municipal board or other
governmental  or  administrative  agency  pending  or, to the  knowledge  of the
Borrowers,  threatened, or any basis therefor, which involves a material risk of
any judgment or liability  which could have a Material  Adverse  Effect,  and no
judgment, decree, or order of any federal, state, provincial or municipal court,
board or other  governmental  or  administrative  agency has been issued against
American  Ski or any of its  Restricted  Subsidiaries  which  has or may  have a
Material Adverse Effect.

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

     Section 5.16 Outstanding Indebtedness. After application of the proceeds of
the Term Loans and the initial Revolving Credit Advance,  the outstanding amount
of Consolidated Funded Debt and Guaranties of borrowed money of American Ski and
its  Restricted  Subsidiaries  as of the date hereof is  correctly  set forth on
Schedule  5.16  hereto,  and  said  Schedule  correctly   describes  the  credit
agreements,  guaranties,  leases and other  instruments  pursuant  to which such
Indebtedness has been incurred and all liens, charges and encumbrances  securing
such  Indebtedness.  Said  schedule  also  describes  all  agreements  and other
arrangements  pursuant to which American Ski or any of its Restricted Subsidiary
may borrow any money.

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<PAGE>

     Section 5.17 Environmental Matters. Except as set forth on Schedule 5.17:

                  (a) None of American Ski, any  Restricted  Subsidiary  nor any
operator  of any of  their  respective  properties  is in  violation,  or to any
Borrower's  knowledge is in alleged  violation,  of any Environmental Law, which
violation would have a Material Adverse Effect.

                  (b) None of American Ski, any  Restricted  Subsidiary  nor any
operator of any of their  respective  properties  has  received  notice from any
third party,  including without limitation any federal,  state, county, or local
governmental  authority,  (i)  that  it has  been  identified  as a  potentially
responsible party under the Comprehensive  Environmental Response,  Compensation
and Liability Act of 1980 as amended  ("CERCLA")  or any  equivalent  state law,
with respect to any site or location; (ii) that any Hazardous Materials which it
has generated, transported or disposed of, has been found at any site at which a
federal,  state,  county,  or local agency or other third party has conducted or
has ordered  American Ski, any  Restricted  Subsidiary or another third party or
parties  (e.g.  a committee  of  potentially  responsible  parties) to conduct a
remedial  investigation,  removal  or  other  response  action  pursuant  to any
Environmental  Law;  or (iii) that it is or shall be a named party to any claim,
action,  cause  of  action,  complaint  (contingent  or  otherwise)  or legal or
administrative  proceeding  arising  out of any  actual or  alleged  release  or
threatened  release of  Hazardous  Materials.  For  purposes of this  Agreement,
"release"  means any past or  present  releasing,  spilling,  leaking,  pumping,
pouring,  emitting,  emptying,   discharging,   injecting,  escaping,  leaching,
disposing or dumping of any  Hazardous  Material  into the  Environment,  or the
uncontained presence of any Hazardous Material in the Environment.

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

                                       60
<PAGE>

                  (d) None of the  properties of American Ski or any  Restricted
Subsidiary  is or shall  be  subject  to any  applicable  environmental  cleanup
responsibility  law or environmental  restrictive  transfer law or regulation by
virtue of the transactions set forth herein and contemplated hereby.

     Section  5.18  Foreign  Trade  Regulations.  Neither  American  Ski nor any
Restricted  Subsidiary  is  (a) a  person  included  within  the  definition  of
"designated  foreign country" or "national" of a "designated foreign country" in
Executive  Order No. 8389, as amended,  in Executive Order No. 9193, as amended,
in the Foreign Assets Control  Regulations  (31 C.F.R.,  Chapter V, Part 500, as
amended),  in the Cuban Assets Control Regulations of the United States Treasury
Department (31 C.F.R., Chapter V, Part 515, as amended) or in the Regulations of
the Office of Alien Property,  Department of Justice (8 C.F.R., Chapter II, Part
507,  as  amended)  or  within  the  meanings  of  any  of the  said  Orders  or
Regulations,  or  of  any  regulations,   interpretations,   or  rulings  issued
thereunder, or in violation of said Orders or Regulations or of any regulations,
interpretations or rulings issued thereunder; or (b) an entity listed in Section
520.101 of the Foreign Funds  Control  Regulations  (31 C.F.R.,  Chapter V, Part
520, as amended).

     Section  5.19  Governmental  Regulations.  Neither  American  Ski  nor  any
Restricted  Subsidiary or any Affiliate of American Ski is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment  Company Act of 1940,  or is a common  carrier  under the  Interstate
Commerce Act, or is engaged in a business or activity  subject to any statute or
regulation  which  regulates the incurring by any Borrower of  Indebtedness  for
borrowed money, including statutes or regulations relating to common or contract
carriers  or to the  sale  of  electricity,  gas,  steam,  water,  telephone  or
telegraph or other public utility  services,  except for Uplands  Water,  Alpine
Pipeline, Community Water Company and Mountain Water Company.

     Section  5.20  Margin  Stock.  Neither  American  Ski  nor  any  Restricted
Subsidiary  owns any "margin  stock"  within the meaning of  Regulation U of the
Board  of  Governors  of  the  Federal  Reserve  System,   or  any  regulations,
interpretations  or rulings  thereunder,  nor is American Ski or any  Restricted
Subsidiary  engaged  principally  or as  one  of  its  important  activities  in
extending  credit which is used for the purpose of purchasing or carrying margin
stock.

     Section 5.21 Solvency. American Ski and each Restricted Subsidiary,  before
and after giving effect to the  transactions  contemplated by this Agreement and
the other Lender Agreements is Solvent.

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<PAGE>

     Section 5.22 Compliance with Other Instruments, Laws, Etc.


                  (a) Neither  American Ski nor any Restricted  Subsidiary is in
violation of any provision of its charter documents, bylaws, or any agreement or
instrument  to which it may be subject  or by which it or any of its  properties
may be  bound  or  any  decree,  order,  judgment,  statute,  license,  rule  or
regulation,  in any of the  foregoing  cases in a manner that could  result in a
Material Adverse Effect.

                  (b) American Ski and its Restricted Subsidiaries have complied
in all  respects  with  the  requirements  of the  Hart-Scott-Rodino  Anti-Trust
Improvement  Act of 1976, as amended (the "HSR Act"),  and have made all filings
with all Governmental  Authorities  required to be made thereunder in connection
with the issuance of the Series B Preferred  Stock. All waiting periods required
under the H-S-R Act have expired in connection with the issuance of the Series B
Preferred Stock. Neither American Ski nor any of its Restricted Subsidiaries has
any obligation or duty to take any further action (or to refrain from taking any
action) in order to be in compliance  with the H-S-R Act in connection  with the
issuance of the Series B Preferred Stock.

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

     Section 5.24 Perfection of Security  Interests.  All filings,  assignments,
pledges and deposits of documents  or  instruments  have been made and all other
actions have been taken that are required under  applicable law to establish and
perfect the Agent's security interest in the Collateral.  The Collateral and the
Agent's  rights with respect to the  Collateral  are not subject to any set-off,
claims,   withholdings  or  other  defenses.  American  Ski  or  its  Restricted
Subsidiaries  as specified in the Security  Agreements,  own the Collateral free
from any lien,  security  interest,  encumbrance  and any other  claim or demand
except for Permitted Liens.

     Section 5.25 Bank Accounts.  Schedule 2.17 sets forth the account  numbers,
location  and  description  of all  bank  accounts  of  American  Ski  and  each
Restricted Subsidiary.

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<PAGE>

     Section 5.26 Fiscal Year. American Ski and each Restricted Subsidiary has a
fiscal year which is the twelve-months ending on the last Sunday of July of each
year.

     Section  5.27  Tax  Status.  Each  Borrower  is a "C"  corporation  for all
purposes under the Code.

     Section 5.28 Consummation of Issuance of Series B Preferred Stock. American
Ski has successfully completed the issuance of the Series B Preferred Stock, and
has received the Series B Gross Proceeds.

     Section 5.29 Series B Preferred Stock Agreements.  True and complete copies
of the Series B Preferred Stock Agreements have been delivered to the Agent. The
Series B Preferred Stock  Agreements and the Series B Preferred Stock constitute
the entire agreement  between Oak Hill and its affiliates,  on the one hand, and
American Ski and its Restricted Subsidiaries and other Affiliates,  on the other
hand, and there are no other written agreements,  by or between them, except for
a letter of intent,  fee letter, and  confidentiality  agreement relating to the
Series B Preferred  Stock.  As of the date hereof,  the Series B Preferred Stock
Agreements have not been modified,  amended or supplemented  and no waivers have
been granted thereunder,  except for waivers of any closing conditions disclosed
to the Agent.  The Series B Preferred  Stock  Agreements have been duly executed
and delivered by American Ski and Oak Hill and are enforceable  against American
Ski and Oak Hill in accordance  with their terms.  The Series B  Certificate  of
Designation  has  been  duly  authorized  and  filed  by  American  Ski  and  is
enforceable  against  American Ski in  accordance  with its terms.  American Ski
hereby confirms and restates to the Agent and the Lenders as if set forth herein
in full the representations and warranties of American Ski set forth in Sections
3.01,  3.02,  3.03, 3.04 and 3.18 of the Series B Preferred  Stock  Subscription
Agreement.  All  conditions to closing of the issuance of the Series B Preferred
Stock set forth in  Article  VI of the  Series B  Preferred  Stock  Subscription
Agreement have been satisfied in full without amendment, modification or waiver,
except  as  disclosed  to the  Agent.  American  Ski will  use all net  proceeds
received  from the  issuance of the Series B  Preferred  Stock as  described  in
Schedule 8.13 hereto.

     Section 5.30 Cerberus  Purchase  Agreement;  Cerberus  Amendment and Waiver
Letter  Agreement;  Certificate of Designation.  A true and complete copy of the
Cerberus Purchase Agreement and the Series A Certificate of Designation has been
delivered  to  the  Agent.  The  Cerberus  Purchase  Agreement,   the  Series  A
Exchangeable  Preferred Shares and the Senior  Exchangeable Notes constitute the
entire agreement  between Cerberus,  Madeleine LLC and their affiliates,  on the
one hand, and American Ski and its Restricted Subsidiaries and other Affiliates,
on  the  other  hand,  and  there  are  no  other  agreements,   instruments  or
understandings by or between them. The Cerberus Purchase  Agreement has not been
modified,  amended or supplemented  and no consents or waivers have been granted
thereunder except for the Cerberus Amendment and Waiver Letter Agreement and the
letter dated July 20, 1999. The Cerberus  Amendment and Waiver Letter  Agreement


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<PAGE>

and the letter  dated July 20, 1999 have been duly  executed  and  delivered  by
Madeleine LLC and are enforceable against Madeleine LLC in accordance with their
terms.  The Series A Certificate  of  Designation  has been duly  authorized and
filed by American Ski and is enforceable against American Ski in accordance with
its terms.

     Section 5.31 Wolf  Acquisition  Agreement.  A true and complete copy of the
Wolf Acquisition Agreement has been delivered to the Agent. The Wolf Acquisition
Agreement  has not been  modified,  amended or  supplemented  and no consents or
waivers have been granted thereunder.


                    ARTICLE 6. REPORTS AND INFORMATIONARTICLE

 Section 6.1 Interim Financial Statements and Reports.
--------------------------------------------------------------------------------

                  (a) As soon as available,  and in any event within  forty-five
(45) days after the end of each of the first three  quarters  and within  ninety
(90) days after the end of the fourth  quarter of each  fiscal  year of American
Ski,  American Ski shall furnish to the Agent and each Lender:  (i) consolidated
and   consolidating   balance   sheets  of  American  Ski  and  its   Restricted
Subsidiaries,  as of the end of such quarter and consolidated and  consolidating
statements of operations, shareholders' equity and cash flow of American Ski and
its Restricted  Subsidiaries  for such quarter and for the period  commencing at
the end of the  previous  fiscal year and ending  with the end of such  quarter,
setting forth in each case in comparative form the corresponding figures for the
corresponding  period of the preceding  fiscal year,  all in reasonable  detail;
(ii) a Compliance Certificate;  and (iii) unconsolidated financial statements of
the Unrestricted  Subsidiaries  similar to the financial statements described in
clause (i) above.

                  (b) As soon as  available,  but in any  event  not  more  than
thirty (30) days after the end of each month,  American Ski shall furnish to the
Agent  and each  Lender  (i)  consolidated  and  consolidating  profit  and loss
statements  of  American  Ski and each of its  Restricted  Subsidiaries  for the
period then ended all in reasonable  detail and (ii)  unconsolidated  profit and
loss statements of the Unrestricted  Subsidiaries similar to the profit and loss
statements described in clause (i) above.

                  (c) Not more than seven (7) days after the end of each  month,
the  Borrowers  shall  furnish to the Agent and each Lender  their then  current
year-to-date  internally  prepared,  unaudited  profit  plan  report in the form
currently prepared by the Borrowers.

     Section 6.2 Annual Financial Statements.  As soon as available,  but in any
event  within  ninety  (90)  days  after  the  end of  each  fiscal  year of the


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Borrowers,  American Ski shall furnish to the Agent and each Lender: (a) audited
consolidated  and  consolidating  balance  sheets  of (i)  American  Ski and its
Restricted Subsidiaries,  and (ii) American Ski and its Subsidiaries,  as of the
end of such fiscal  year,  and  consolidated  and  consolidating  statements  of
operations,  shareholders'  equity  and cash  flow of (A)  American  Ski and its
Restricted  Subsidiaries  and (B)  American Ski and its  Subsidiaries,  for such
fiscal year, in each case (other than the consolidating  statements) reported on
by Arthur Andersen LLP, or other  independent  certified  public  accountants of
recognized  national standing  reasonably  acceptable to the Agent, which report
shall express,  without reliance upon others,  a positive opinion  regarding the
fairness of the  presentation  of such financial  statements in accordance  with
generally accepted accounting principles consistently applied, said report to be
without  qualification,  except in cases of unresolved litigation and accounting
changes with which such accountants concur,  together with the statement of such
accountants that they have caused the provisions of this Agreement and the other
Lender Agreements to be reviewed and that nothing has come to their attention to
lead them to believe that any Default exists hereunder or specifying any Default
and the nature thereof;  (b) a Compliance  Certificate;  and (c)  unconsolidated
audited  financial  statements of the Unrestricted  Subsidiaries  similar to the
financial  statements  described in clause (a) above. At the time of delivery of
the annual audited financial statements, American Ski shall furnish to the Agent
and each Lender copies of the written recommendations concerning the management,
finances,  financial  controls,  or operations of any Borrower or any Restricted
Subsidiary received from American Ski's independent public accountants.

     Section 6.3 Annual  Budget.  On or before August 15 of each year,  American
Ski  shall  furnish  to  the  Agent  and  each  Lender  (a)   consolidated   and
consolidating  projections of American Ski and its Restricted  Subsidiaries  and
(b)  consolidated  and   consolidating   projections  of  the  proposed  Capital
Expenditures   (which  proposed   expenditures  shall  be  consistent  with  the
limitations  set forth in Section 9.7 hereof) of American Ski and its Restricted
Subsidiaries,  in each case, for the fiscal year just  commenced,  prepared on a
quarter-by-quarter  basis  in  accordance  with  generally  accepted  accounting
principles consistently applied to the extent applicable to such projections and
in such detail as the Agent may reasonably request.

     Section  6.4  Reports  of Skier  Visits.  At the time of each  delivery  by
American Ski of (a) interim  financial  statements and reports under Section 6.1
hereof  and (b) annual  financial  statements  under  Section  6.2 hereof  shall
furnish to the Agent and the Lenders information setting forth (i) the number of
paid skier visits and unpaid skier visits to each ski resort or skiing  facility
owned or operated by American Ski or any Restricted Subsidiary during each month
of the  applicable  fiscal  period and for the fiscal  year-to-date  and (ii) in
comparative form the corresponding  figures for the corresponding  fiscal period
of the previous fiscal and for the  corresponding  year-to-date of such previous
fiscal year.

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<PAGE>

     Section  6.5  Notice of  Defaults.  As soon as  possible,  and in any event
within five (5) days after the  occurrence of each  Default,  American Ski shall
furnish to the Agent and each  Lender the  statement  of their  chief  executive
officers or chief financial  officers  setting forth details of such Default and
the action which American Ski has taken or propose to take with respect thereto.

     Section 6.6 Notice of Litigation.  Promptly after the commencement thereof,
American Ski shall  furnish to the Agent and each Lender  written  notice of all
actions,  suits and  proceedings  before any court or  governmental  department,
commission,  board,  bureau,  agency or  instrumentality,  domestic  or foreign,
affecting  American  Ski or  any  Restricted  Subsidiary,  which,  if  adversely
determined, would have a Material Adverse Effect.

     Section  6.7  Communications  with  Others.  If and when any debt or equity
security of American Ski or any  Restricted  Subsidiary  is or is proposed to be
traded publicly,  promptly after filing the same,  American Ski shall furnish to
the Agent and each Lender  copies of all regular,  periodic and special  reports
and all  registration  statements which American Ski or such Borrower files with
the Commission or any Governmental  Authority which may be substituted therefor,
or with any national or regional securities exchange.

     Section 6.8 Reportable Events. At any time that American Ski or any Pension
Affiliate has a Pension  Plan,  American Ski shall furnish to the Agent and each
Lender,  as soon as  possible,  but in any event  within  thirty (30) days after
American Ski knows or has reason to know that any Reportable  Event with respect
to any Pension Plan has occurred,  the statement of the chief executive officers
or chief  financial  officers of American Ski setting  forth the details of such
Reportable Event and the action which American Ski or any Pension  Affiliate has
taken or  proposes to take with  respect  thereto,  together  with a copy of the
notice of such Reportable Event to the Pension Benefit Guaranty Corporation.

     Section 6.9 Reports to other  Creditors.  Promptly  after  filing the same,
American Ski shall furnish to the Agent and each Lender copies of any compliance
certificate  and  other  information  furnished  to  any  other  holder  of  the
securities  (including the Senior  Subordinated Notes, the Series A Exchangeable
Preferred  Stock,  and  any  other  debt  obligations)  of  American  Ski or any
Restricted Subsidiary pursuant to the terms of any indenture,  loan or credit or
similar agreement and not otherwise required to be furnished to the Agent or the
Lenders pursuant to any other provision of this Agreement.

     Section 6.10  Communications  with Independent Public  Accountants.  At any
reasonable  time and from time to time upon  reasonable  request,  American  Ski
shall provide the Agent and the Lenders and any agents or representatives of the


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<PAGE>

Agent and the Lenders access to the independent  public  accountants of American
Ski and its  Restricted  Subsidiaries  to  discuss  their  financial  condition,
including,  without  limitation any  recommendations  of such independent public
accountants   concerning  the  management,   finances,   financial  controls  or
operations of American Ski and its Restricted Subsidiaries.

     Section  6.11  Environmental  Reports.  In the event that and to the extent
that any of the  following  provides  notice of  circumstances,  occurrences  or
events that have or could  reasonably  be expected to have a material  impact on
the operations of any Borrower,  American Ski or the Borrowers  shall furnish to
the Agent  and each  Lender:  (a) not later  than  seven (7) days  after  notice
thereof,  notice  of  any  enforcement  actions,  or,  to the  knowledge  of any
Borrower,   threatened   enforcement  actions  affecting  American  Ski  or  any
Restricted  Subsidiary by any  Governmental  Authority  related to Environmental
Laws; (b) copies,  promptly after they are received,  of all orders,  notices of
responsibility,  notices of  violation,  notices  of  enforcement  actions,  and
assessments,  and other  written  communications  pertaining to any such orders,
notices,  claims and  assessments  received  by American  Ski or any  Restricted
Subsidiary from any  Governmental  Authority;  (c) not later than seven (7) days
after  notice  thereof,  notice of any civil claims or  threatened  civil claims
affecting American Ski or any Restricted  Subsidiary by any third party alleging
any  violation  of  Environmental  Laws or harm to human  health,  safety or the
environment;  (d) copies of all cleanup plans, site assessment reports, response
plans,  remedial  proposals,  or  other  submissions  of  American  Ski  or  any
Restricted  Subsidiary,  other  third  party  (e.g.,  committee  of  potentially
responsible parties at a Superfund site), or any combination of same,  submitted
to a  Governmental  Authority  in response to any  communication  referenced  in
subsections  (a) and (b) herein  simultaneously  with their  submission  to such
Governmental Authority;  and (e) from time to time, on reasonable request of the
Agent,  evidence  satisfactory to the Agent of American Ski's and its Restricted
Subsidiaries' insurance coverage, if any, for any environmental liabilities.

     Section  6.12  Notices  Under  Certain  Agreements.  American  Ski  and its
Restricted  Subsidiaries  will  provide the Agent with copies of all notices and
other  written  communications  given or  received  by them  under the  Cerberus
Purchase  Agreement,  the Cerberus  Amendment and Waiver Letter  Agreement,  the
Series B Preferred  Stock  Agreements  (excluding  the Series B Preferred  Stock
Stockholders  Agreement),  the  Kamori  Stock  Purchase  Agreement  and the Wolf
Acquisition  Agreement  to the extent  such  notices  relate to (a)  defaults of
American  Ski  or any  Restricted  Subsidiary  or any  other  party  under  such
agreements,  (b)  events  which  with the giving of notice or passage of time or
both would constitute a default of American Ski or any Restricted  Subsidiary or
any other party under such agreements,  (c)  indemnification  claims of American
Ski or any  Restricted  Subsidiary  under such  agreements or (d) other material
transactions  under such  agreements.  Without  limiting the  generality  of the
foregoing,  American  Ski shall  provide  the Agent with  written  notice of any
indemnification  claims  pursuant to Section 10(b) of the Kamori Stock  Purchase


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<PAGE>

Agreement,  Section  7.02(c)  of  the  Series  B  Preferred  Stock  Subscription
Agreement  or  Section  5.10  of  the  Series  B  Preferred  Stock  Stockholders
Agreement.

         Section 6.13  Miscellaneous.  American Ski shall  provide the Agent and
the  Lenders  with such other  information  as the Agent or the Lenders may from
time to time reasonably request respecting the business, properties,  prospects,
condition  or  operations,  financial  or  otherwise,  of  American  Ski and its
Restricted Subsidiaries.


                      ARTICLE 7. FINANCIAL COVENANTSARTICLE

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

     Section  7.1  Ratio of  Consolidated  Total  Debt to  Consolidated  EBITDA.
American Ski and its  Restricted  Subsidiaries  shall  maintain as of the end of
each fiscal  quarter a ratio of (i)  Consolidated  Total Debt as of such date to
(ii) Consolidated  EBITDA for the four-quarter period ending on such date of not
more than the following levels as of the fiscal quarters indicated:

                    Fiscal Quarter Ratio Fiscal Quarter Ratio

         2000 Quarter 1 7.00-to-1.00     2001 Quarter 2 5.00-to-1.00
         2000 Quarter 2 5.50-to-1.00     2001 Quarter 3 4.50-to-1.00
         2000 Quarter 3 5.00-to-1.00     2001 Quarter 4 4.50-to-1.00
         2000 Quarter 4 5.00-to-1.00     2002 Quarter 1 4.50-to-1.00
         2001 Quarter 1 5.00-to-1.00     2002 Quarter 3 4.00-to-1.00
                                         and Thereafter

         Section 7.2 Ratio of  Consolidated  Adjusted Cash Flow to  Consolidated
Debt Service.  American Ski and its Restricted Subsidiaries shall maintain as of
the end of each fiscal  quarter,  commencing with 2000 fiscal quarter 3, for the
four-quarter  period  ending on such date a ratio of (a)  Consolidated  Adjusted
Cash Flow to (b) Consolidated Debt Service of not less than the following levels
as of the end of each fiscal quarter indicated:

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<PAGE>

                  Fiscal Quarter                            Ratio

                  2000 Quarter 3                           1.10-to-1.00
                  2000 Quarter 4                           1.10-to-1.00
                  2001 Quarter 1                           1.10-to-1.00
                  2001 Quarter 2                           1.10-to-1.00
                  2001 Quarter 3                           1.25-to-1.00
                  2001 Quarter 4                           1.25-to-1.00
                  2002 Quarter 1                           1.25-to-1.00
                  2002 Quarter 2                           1.25-to-1.00
                  2002 Quarter 3                           1.50-to-1.00
                  and Thereafter

         Section  7.3  Ratio of  Consolidated  EBITDA to  Consolidated  Interest
Expense.  American Ski and its Restricted  Subsidiaries shall maintain as of the
end of each fiscal  quarter for the  four-quarter  period  ending on such date a
ratio of (a)  Consolidated  EBITDA to (b)  Consolidated  Interest Expense of not
less than the following levels as of the end of each fiscal quarter indicated:

Fiscal Quarter      Ratio              Fiscal Quarter               Ratio

2000 Quarter 1      1.20-to-1.00       2001 Quarter 3               2.00-to-1.00
2000 Quarter 2      1.20-to-1.00       2001 Quarter 4               2.00-to-1.00
2000 Quarter 3      1.50-to-1.00       2002 Quarter 1               2.00-to-1.00
2000 Quarter 4      1.50-to-1.00       2002 Quarter 2               2.00-to-1.00
2001 Quarter 1      1.50-to-1.00       2002 Quarter 3               2.25-to-1.00
2001 Quarter 2      1.50-to-1.00       and Thereafter



     Section 7.4 Minimum Consolidated Net Worth. American Ski and its Restricted
Subsidiaries  shall maintain minimum  Consolidated Net Worth at all times of not
less than the sum of (a)  $200,000,000  plus (b) 75% of cumulative  Consolidated
Net Income of American Ski and its Restricted  Subsidiaries for the period after
April 26, 1999 plus (c) all amounts  received by American  Ski or the  Borrowers
after the Closing Date from the issuance of equity interests.

     Section 7.5 Minimum  Consolidated  EBITDA.  American Ski and its Restricted
Subsidiaries  shall have  Consolidated  EBITDA of not less than the  amounts set
forth below for the applicable fiscal quarter.

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<PAGE>

              Fiscal Quarter                        Minimum EBITDA

              1999 Quarter 4                       ($21,000,000)
              2000 Quarter 1                       ($21,000,000)
              2000 Quarter 2                         $25,000,000


                        ARTICLE 8. AFFIRMATIVE COVENANTS

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

     Section  8.1  Existence  and  Business.  American  Ski and each  Restricted
Subsidiary will (a) preserve and maintain its corporate or partnership existence
and qualify and remain qualified as a foreign corporation or partnership in each
jurisdiction in which such  qualification  is required except to the extent that
any failure to remain  qualified as a foreign  corporation or partnership  would
not have a Material Adverse Effect,  (b) preserve and maintain in full force and
effect all material rights, licenses,  patents and franchises, (c) comply in all
material respects with all valid and applicable statutes,  rules and regulations
necessary  for the  conduct of business  and (d) engage  only in the  businesses
which they are conducting on the date of this Agreement (operation of all-season
resort  properties,  including related hotel,  restaurant and retail operations,
but  excluding the real estate  development  prohibited by Section 9.13 hereof);
provided, however that a Restricted Subsidiary may merge into another Restricted
Subsidiary or American Ski.

     Section 8.2 Taxes and Other  Obligations.  American Ski and each Restricted
Subsidiary (a) will duly pay and discharge,  or cause to be paid and discharged,
before the same shall become in arrears,  all material  taxes,  assessments  and
other governmental charges, imposed upon each of them and its properties,  sales
and activities,  or upon the income or profits therefrom,  as well as the claims
for labor,  materials, or supplies which if unpaid might by law result in a lien
or charge upon any of its properties;  provided,  however, that American Ski and
any  Restricted  Subsidiary may contest any such charges or claims in good faith
so  long  as (i) an  adequate  reserve  therefor  has  been  established  and is
maintained if and as required by generally  accepted  accounting  principles and
(ii) no  action  to  foreclose  any such  lien has been  commenced  and (b) will
promptly  pay or cause to be paid when due,  or in  conformance  with  customary
trade  terms  (but not later than 60 days from the due date in the case of trade
debt),  all material lease  obligations,  trade debt and all other  Indebtedness
incident to its operations.  American Ski and each Restricted  Subsidiary  shall


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cause all  applicable tax returns and all amounts due thereunder to be filed and
paid,  as the case  may be,  in order to  maintain  its good  standing  with the
Internal Revenue Service and state, local and foreign tax authorities.

     Section 8.3  Maintenance  of Properties  and Leases.  American Ski and each
Restricted  Subsidiary  shall  maintain,  keep and  preserve all of its material
properties (tangible and intangible) in good repair and working order,  ordinary
wear and  tear  excepted.  American  Ski and each  Restricted  Subsidiary  shall
replace and improve its material  properties as necessary for the conduct of its
business.  American  Ski and each  Restricted  Subsidiary  shall  comply  in all
material respects with all leases naming it as lessee.

     Section 8.4 Insurance. American Ski and each Restricted Subsidiary (a) will
keep its  principal  assets  which  are of an  insurable  character  insured  by
financially  sound  and  reputable  insurers  against  loss or  damage  by fire,
explosion  or hazards,  by extended  coverage in an amount  sufficient  to avoid
co-insurance  liability  and  (b)  will  maintain  with  financially  sound  and
reputable  insurers  insurance  against other hazards and risks and liability to
persons and property to the extent and in a manner  satisfactory to the Lenders,
and in any event as  customary  for  companies in similar  businesses  similarly
situated;  provided,  however, that on prior notice to the Agent and the Lenders
it may effect workmen's  compensation and general liability insurance through an
insurance  fund  operated  by such  state  or  jurisdiction  and  may  also be a
self-insurer  with respect to workmen's  compensation  and with respect to group
medical  benefits under any medical benefit plan. The provisions of the Security
Agreements  relating to insurance shall not be limited by the provisions of this
Section 8.4. On request of the Agent from time to time, American Ski will render
to the  Agent  and the  Lenders  a  statement  in  reasonable  detail  as to all
insurance  coverage  required by this Section 8.4. A description of the material
elements of insurance  coverage of American Ski and its Restricted  Subsidiaries
as of the date hereof is set forth on Schedule 8.4.

     Section 8.5 Records, Accounts and Places of Business. American Ski and each
Restricted  Subsidiary  shall maintain  comprehensive  and accurate  records and
accounts  in  accordance   with   generally   accepted   accounting   principles
consistently applied. American Ski and each Restricted Subsidiary shall maintain
adequate and proper reserves.  American Ski and each Restricted Subsidiary shall
promptly  notify  the Agent of (a) any  changes  in the  places of  business  of
American Ski and any  Restricted  Subsidiary  and (b) any  additional  places of
business which may arise hereafter.

     Section 8.6  Inspection.  At any reasonable time and from time to time, the
Borrowers  shall permit the Agent and the Lenders and any of the Agent's and the
Lenders' agents or  representatives  to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of,  American
Ski and its  Subsidiaries  and to discuss the affairs,  finances and accounts of
American Ski and any Subsidiary with any of their officers or directors and with
American Ski's and its Subsidiaries'  independent accountants.  In addition, the
Agent shall be entitled,  and  American  Ski shall permit the Agent,  to conduct


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<PAGE>

field  examinations  of American  Ski and its  Restricted  Subsidiaries,  at the
Borrowers'  sole  expense  and at any time or times  in the  Agent's  reasonable
discretion.

     Section  8.7  Maintenance  of  Accounts.  American  Ski and its  Restricted
Subsidiaries  shall  maintain their  principal  concentration  and  disbursement
accounts with the Agent.

     Section 8.8 [Intentionally Omitted]

     Section  8.9  Ownership  of  Restricted  Subsidiaries.  American  Ski  will
maintain legal and beneficial ownership,  directly or indirectly, of 100% of the
equity interests of each of the Restricted Subsidiaries as described on Schedule
8.9 hereto with only such exceptions as described on Schedule 8.9 hereto.

     Section 8.10 Survey and Surveyor's  Certificate.  Upon request of the Agent
upon a Default not cured within any applicable cure period, or in the event that
the Agent  determines  in its  reasonable  judgment that a survey is required to
assure the  location of future  improvements  constructed  by American  Ski or a
Restricted  Subsidiary on the Mortgaged  Properties,  American Ski shall provide
the Agent with an instrument  survey of the affected  Mortgaged  Property,  such
survey to be satisfactory to the Agent in form and substance and with respect to
each survey,  a  certificate  executed by the surveyor who prepares  such survey
dated as of a recent  date  and  containing  such  information  relating  to the
affected  Mortgaged  Property  as the Agent or the title  insurance  company may
require,  such certificate to be satisfactory to the Agent in form and substance
and  sufficient  to obtain the  deletion  of the survey  exception  in the title
insurance  policy  furnished to the Agent with respect to the affected  Mortgage
Property.

      Section 8.11 Appraisals.

                  (a) The sum of (i) the Term Loans,  (ii) the Maximum Revolving
Credit  Amount,  (iii) the Letter of Credit  Exposure  and (iv) the  outstanding
amount  of all  other  Indebtedness  secured  by  any  assets  of the  Borrowers
(including  secured  Subordinated  Indebtedness)  shall  not at any time  exceed
seventy-five  percent (75%) of the Appraised  Value of the Collateral (the "Loan
to Value  Ratio").  If at any time the Loan to Value Ratio exceeds 75%, then the
Borrowers,  jointly and severally,  shall promptly (but no later than sixty (60)
days thereafter,  either (i) reduce the sum of such  outstanding  commitments or
Indebtedness  to a point  where the Loan to Value Ratio is less than 75% or (ii)
provide the Agent with  additional  Collateral  satisfactory to the Agent in its
discretion,  and at the expense of American Ski, such that the 75% Loan to Value
Ratio is satisfied.

                  (b) Upon the  occurrence of and during any  continuance  of an
Event of  Default,  the Agent  shall have the right to  obtain,  at the cost and


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expense of the Borrowers,  updated  appraisals of the Collateral,  provided that
the  Borrowers  shall  not be  obligated  to pay  for  the  costs  and  expenses
associated  with more than one such  appraisal  during  any  twelve  (12)  month
period.  The  costs  and  expenses  incurred  by the  Agent  in  obtaining  such
appraisals  shall  be  paid by the  Borrowers  and  American  Ski,  jointly  and
severally,  forthwith  upon  billing or  request by the Agent for  reimbursement
therefor.

     Section 8.12 Lease  Renewal.  The Borrowers will renew all leases set forth
on Schedule 8.12 in accordance with their terms.

     Section 8.13 Use of Series B Preferred  Stock  Proceeds.  American Ski will
use all net proceeds  received from the issuance of the Series B Preferred Stock
as described on Schedule 8.13 hereto.

     Section 8.14  Environmental  and Land Use Compliance.  American Ski and its
Restricted  Subsidiaries,  jointly and severally,  will undertake and diligently
pursue to completion  the  environmental  and land use cleanup,  compliance  and
permit requirements  described on Schedule 8.14 attached hereto and incorporated
herein by reference and will provide the Agent with documentation confirming the
completion  of the  specified  tasks  by  the  dates  specified  for  each  task
referenced on said Schedule 8.14. In addition, with each Compliance Certificate,
American  Ski shall  provide  the Agent  with a report as to the status of their
compliance  and  their  efforts  to comply  with the  obligations  specified  on
Schedule  8.14,  and any  information  relevant to their ability or inability to
obtain compliance with a particular  obligation by the requisite scheduled date,
any other environmental or land use cleanup, compliance or permit related matter
which arises  subsequent to the date hereof and which remains  unresolved to the
satisfaction  of  the  Agent  as  of  the  date  of  the  applicable  Compliance
Certificate.

     Section 8.15 Interest Rate Protection.  American Ski will maintain Interest
Rate Protection  Agreements on notional amounts for not less than $32,500,000 at
a rate and on terms satisfactory to the Agent.

     Section 8.16  Independence of Unrestricted  Subsidiaries.  American Ski and
its  Restricted   Subsidiaries   will  conduct  their  business  and  operations
separately  from  that of the  Unrestricted  Subsidiaries  and  will  cause  the
Unrestricted  Subsidiaries  to conduct their business and operations  separately
from  that  of  American  Ski  and  its  Restricted  Subsidiaries,  by  (a)  not
commingling  funds or other  assets,  (b)  maintaining  separate  corporate  and
financial  records and  observing all  corporate  formalities,  (c) paying their


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respective  liabilities  from their  respective  assets,  except pursuant to any
guarantees   extended  by  the   Restricted   Subsidiaries   of  obligations  of
Unrestricted    Subsidiaries   and   permitted   hereunder,    (d)   maintaining
capitalization  adequate  to  meet  their  respective  business  needs  and  (e)
conducting contractual dealings with third parties in their respective names and
as separate and independent entities.

     Section 8.17 Forest  Service  Permits.  The Borrowers  hold certain  rights
under and by virtue of the Term  Special  Use Permits  issued to the  applicable
Borrower by the Forest  Service of the United States  Department of  Agriculture
listed on  Schedule  8.18 hereto  (individually  a "Forest  Service  Permit" and
collectively the "Forest Service Permits").  The Borrowers will make no changes,
alterations or amendments to any Forest Service Permit without the prior written
consent of the Agent and except as would not have or  reasonably  be expected to
have a material  impact on the  operations of any Borrower;  provided,  however,
that changes or alterations in any master plan provided under or incorporated by
reference in any Forest Service Permit will not constitute changes,  alterations
or  amendments  under  this  Section  8.18.  Each  Borrower  will well and truly
perform,  or  cause  to be  performed,  all  of  its  material  obligations  and
agreements under the Forest Service Permits and under any renewals or extensions
thereof and will not do or suffer  anything which will impair any Forest Service
Permit or which would be a Default hereunder.

     Section  8.18  Further   Assurances.   American  Ski  and  each  Restricted
Subsidiary  will  cooperate  with the Agent and the  Lenders  and  execute  such
further  instruments and documents as the Agent or the Lenders shall  reasonably
request to carry out to their satisfaction the transactions contemplated by this
Agreement and the other Lender Agreements.


                          ARTICLE 9. NEGATIVE COVENANTS

         On and after the date hereof, until all of the Lender Obligations shall
have been paid in full and the  Lenders  shall  have no  commitment  to make any
loans or advances hereunder, the Borrowers, jointly and severally, covenant that
neither American Ski nor any Restricted Subsidiary will:

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

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

                  (b)  Indebtedness  (i)  described on Schedule  5.16 hereto and
(ii) any renewals,  extensions and refundings  thereof which do not increase the
amount thereof, extend the weighted average maturity of any thereof by more than
25%,  provide any  collateral  in excess of collateral  currently  securing such
Indebtedness  (after  giving  effect  to any  existing  after-acquired  property
clause) or grant,  modify or amend any  rights,  remedies  or  interests  of the
holders thereof in a manner materially  adverse to the interests of the Agent or
the Lenders.

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                  (c)      The Senior Subordinated Notes and the subordinated
guaranties of the Restricted Subsidiaries with respect thereto.

                  (d)      The Series A Exchangeable Preferred Stock and the
Series B Preferred Stock.

                  (e)  Subordinated  Indebtedness  incurred  to the  sellers  of
assets or stock in connection  with Permitted  Acquisitions,  provided that such
Indebtedness is unsecured,  has a cash interest rate of not greater than 12% per
annum, has no scheduled  amortization  until after payment in full of all Lender
Obligations  and is  subordinated  to the prior  payment  in full in cash of all
Lender Obligations on terms and conditions approved in writing by the Agent.

                  (f) (i) Real Estate Guaranties;  provided that the sum of Real
Estate  Guaranties  and Direct  Unrestricted  Subsidiary  Investments  shall not
exceed $25,000,000 at any time;

                           (ii)  (A)  Capitalized   Lease  Obligations  and  (B)
         Indebtedness of the Borrowers to purchase tangible assets to be used in
         the  Borrower's  operations  in an  amount  not to  exceed  100% of the
         purchase price of such assets, which Indebtedness may be secured by the
         assets so purchased but by no other assets; provided, however, that the
         aggregate  amount under clauses (A) and (B) of this Section  9.1(f)(ii)
         shall not exceed $50,000,000;

                           (iii)  Indebtedness of Persons that become Restricted
         Subsidiaries in connection with Permitted Acquisitions and not incurred
         in anticipation of such Permitted  Acquisitions in an aggregate  amount
         not to exceed $50,000,000; and

                           (iv)   Other unsecured Indebtedness in an amount not
to exceed $25,000,000; provided,  however, that the total amount of all
Indebtedness outstanding at any time under this clause (f) shall not exceed
$100,000,000.

                  (g)  Indebtedness  consisting  of  indemnification  and  price
adjustment obligations incurred in connection with Permitted Acquisitions.

                  (h)   Indebtedness   on   account  of   consolidated   current
liabilities  (other than for money borrowed) incurred in the normal and ordinary
course of business.

                  (i)  Indebtedness  in  respect  of  (i)  taxes,   assessments,
governmental  charges or levies and claims for labor,  materials and supplies to
the extent that payment  thereof shall not at the time be required to be made in
accordance  with the provisions of Section 8.2 hereof,  (ii) judgments or awards
which have been in force for less than the  applicable  appeal period so long as


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execution is not levied  thereunder  or in respect of which  American Ski or the
Restricted  Subsidiary  subject to such  judgment  or award shall at the time in
good  faith be  prosecuting  an appeal  or  proceedings  for  review in a manner
satisfactory to the Agent and in respect of which a stay of execution shall have
been obtained pending such appeal or review and for which adequate reserves have
been established in accordance with generally accepted accounting principles and
(iii)  endorsements  made in connection  with the deposit of items for credit or
collection in the ordinary course of business.

                  (j)  Indebtedness   consisting  of  intercompany  loans  among
American Ski and its Restricted Subsidiaries evidencing intercompany obligations
with respect to the Revolving Credit Advances hereunder,  and other intercompany
loans among  American  Ski and its  Restricted  Subsidiaries  provided  that the
aggregate  outstanding  principal  amount of all such other  intercompany  loans
shall not exceed  $5,000,000 and no such loan shall be evidenced by a promissory
note or other instrument  unless such note has been pledged and delivered to the
Agent as security for the Lender Obligations on terms and conditions  acceptable
to the Agent.

                  (k)   Indebtedness   of  American   Ski  and  its   Restricted
Subsidiaries  under Interest Rate Protection  Agreements entered into to protect
American Ski and its Restricted  Subsidiaries  against  fluctuations in interest
rates so long as management of American Ski and its Restricted  Subsidiaries has
determined  that the entering into of such Interest Rate  Protection  Agreements
are bona fide hedging activities.

                  (l) Payment and performance bonds entered into in the ordinary
course  of  business  in  support  of the  activities  of  American  Ski and its
Restricted Subsidiaries.

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

                  (a) Liens described on Schedule 5.16 securing certain existing
Indebtedness  and any renewals,  extensions and refundings  thereof which do not


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increase the amount thereof, extend such lien to any other property or assets of
the Restricted  Subsidiaries or grant,  modify or amend any rights,  remedies or
interests of the holders thereof in a manner materially adverse to the interests
of the Agent or the Lenders.

                  (b)  Purchase  money  security  interests  (which  term  shall
include mortgages,  conditional sale contracts, Capitalized Leases and all other
title  retention or deferred  purchase  devices) to secure the purchase price of
property  acquired  hereafter  by  any  Restricted  Subsidiary,   or  to  secure
Indebtedness  incurred  solely for the purpose of financing  such  acquisitions;
provided,  however,  that no such purchase money security interests shall extend
to or cover any property  other than the property the purchase price of which is
secured by it, and that the  principal  amount of  Indebtedness  (whether or not
assumed)  with  respect  to each item of  property  subject  to such a  security
interest  shall  not  exceed  the  fair  value  of such  item on the date of its
acquisition; and liens securing Indebtedness permitted under Section 9.1(f)(iii)
on assets acquired in connection with Permitted Acquisitions and subject to such
liens from the incurrence of such Indebtedness.

                  (c) Deposits or pledges made in connection  with, or to secure
payment of, workmen's compensation,  unemployment insurance, old age pensions or
other  social  security;  liens in respect of  judgments or awards to the extent
such  judgments or awards are  permitted as  Indebtedness  by the  provisions of
Section  9.1(i);  and liens for taxes,  assessments or  governmental  charges or
levies and liens to secure  claims for labor,  material  or  supplies  and liens
securing obligations to carriers,  warehousemen and mechanics to the extent that
payment  thereof shall not at the time be required to be made in accordance with
Section 8.2.

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

                  (e) Liens  (other than  judgments  and  awards)  created by or
resulting from any litigation or legal  proceeding which has not yet resulted in
an Event of Default, provided that the execution or other enforcement thereof is
effectively  stayed and the claims secured thereby are being actively  contested
in good faith by appropriate proceedings satisfactory to the Agent.

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

                  (g) Liens in favor of the Agent for the benefit of the Lenders
securing the Lender Obligations.

                  (h) Other Liens not  otherwise  permitted  hereunder  securing
Indebtedness in an amount not to exceed $5,000,000.

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<PAGE>

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

     Section 9.3  Investments.  Have  outstanding  or hold or acquire or make or
commit itself to acquire or make any Investment except the following:

                  (a)  Existing   Investments   in   Unrestricted   Subsidiaries
described  on Schedule  5.4,  including  the  Investment  in ASCRP  described on
Schedule 8.13 and other existing Investments described on Schedule 9.3.

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

                  (c) Investments in Restricted  Subsidiaries or other assets as
a result of Permitted Acquisitions.

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

                  (e)  Investments  consisting  of advances to  employees in the
ordinary  course of  business  in an  amount  not to  exceed  $2,000,000  in the
aggregate at any time outstanding.

                  (f)   Investments   consisting  of  Interest  Rate  Protection
Agreements to the extent permitted under Section 9.1(k).

                  (g) Guaranties to the extent permitted under Section 9.1(f)(i)
and (iv) and Section 9.5.

                  (h) Investments of American Ski in Unrestricted  Subsidiaries,
as follows:

                           (i)  Direct  Unrestricted   Subsidiary   Investments;
         provided that the sum of Direct Unrestricted Subsidiary Investments and
         Real Estate Guaranties shall not exceed $25,000,000 at any time;

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<PAGE>

                           (ii) Indirect Unrestricted  Subsidiary Investments in
         an amount not to exceed $25,000,000; provided that the aggregate amount
         of the  Investments  under clauses (i) above and this clause (ii) shall
         not exceed  $40,000,000,  except that if American Ski has  Consolidated
         EBITDA in any immediately preceding fiscal year of $75,000,000 or more,
         this  restriction  shall  not  apply  to  Investments  made in the then
         current fiscal year; and

                           (iii)  Investments  consisting  of  contributions  to
         Unrestricted  Subsidiaries  of Excess  Real  Property  not  included in
         appraisals of the Mortgaged Property.

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

                  (j) Investments consisting of (i) Pico's ownership of (A) 2001
shares of the capital stock of Uplands Water, constituting  approximately 95% of
the  issued  and  outstanding  capital  stock  thereof  and (B) 61 shares of the
capital stock of Alpine Pipeline and all related wastewater disposal units, (ii)
Sugarloaf Mountain  Corporation's  ownership of a 10% interest in Sugarloaf Land
Partners I and a 10% interest in Sugarloaf Land Partners II and (iii) ASC Utah's
rights to acquire stock in Community Water Company.

                  (k) Investments in Restricted Subsidiaries.

                  (l) Other  Investments  in an  aggregate  amount not to exceed
$5,000,000.

     Section  9.4  Mergers,   Acquisitions,   Etc.  Enter  into  any  merger  or
consolidation  with or  acquire  all or  substantially  all of the assets of any
Person,  or  sell,  assign,  lease  or  otherwise  dispose  of  (whether  in one
transaction  or in a series of  transactions)  all or  substantially  all of its
assets (whether now owned or hereafter  acquired) to any Person,  except for (a)
the merger of a Restricted Subsidiary into another Restricted Subsidiary or into
American Ski, (b)  acquisitions  approved in writing by the Majority Lenders and
(c) Permitted Acquisitions.

     Section  9.5  Transactions  with  Affiliates.  Enter into any  transaction,
including, without limitation, the purchase, sale or exchange of property or the
rendering of any service,  with any Affiliate,  except that American Ski and its
Restricted  Subsidiaries  (a) may pay reasonable  salaries,  fees and bonuses to
their  directors,  officers and employees as are usual and customary in American
Ski's or its Restricted  Subsidiaries' business, (b) may enter into transactions
among each other on terms that are not materially less favorable to American Ski
or any Restricted Subsidiary than those which could be obtained at the time from
Persons who are not Affiliates and which  transactions  (to the extent in excess
of  $250,000  for each  transaction  or a series of  related  transactions)  are
disclosed  to  the  Agent  in  Compliance  Certificates,   (c)  may  enter  into


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Investments  permitted  under Section  9.3(i) hereof and Real Estate  Guaranties
permitted  under  Section  9.1(h)  hereof,  (d) may enter into and perform their
obligations  under  the  Lender  Agreements  and (e) may  purchase  on or before
October 31, 1999  certain  assets from Leslie B. Otten from the  proceeds of the
Series B Preferred Stock as described in Schedule 8.13.

     Section 9.6 Distributions.  Make any Distribution or make any other payment
on account of the purchase, acquisition,  redemption, or other retirement of any
shares of stock, whether now or hereafter outstanding,  except that (a) American
Ski may make  Distributions not to exceed,  in the aggregate,  50% of cumulative
Consolidated  Net Income  after April 25, 1999  provided,  that after giving pro
forma  effect to such  Distribution,  the ratio of  Consolidated  Total  Debt to
Consolidated  EBITDA does not exceed  4.0-to-1  and  American  Ski's  Restricted
Subsidiaries  may make  lawful  Distributions  to American  Ski in an  aggregate
amount equal to the  Distributions  which American Ski is entitled to make under
this clause (a) and provided  further that no Default shall exist at the time of
or be  caused  by any such  Distribution;  and (b)  Restricted  Subsidiaries  of
American  Ski may make  Distributions  to American  Ski and to other  Restricted
Subsidiaries of American Ski.

     Section 9.7 Capital Expenditures. Make any Capital Expenditure except that:

                  (a)  For  their  fiscal  year  2000,   American  Ski  and  its
Restricted  Subsidiaries may make Capital  Expenditures not to exceed the sum of
(i) up to  $3,500,000  for the purchase of assets from Leslie B. Otten plus (ii)
$23,100,000.

                  (b) For  each  fiscal  year  after  their  fiscal  year  2000,
American Ski and its Restricted  Subsidiaries  may make Capital  Expenditures in
each  fiscal  year of not more  than the  lesser of (a)  $35,000,000  or (b) (i)
Consolidated  EBITDA for the four fiscal quarters ended in April of the previous
fiscal year less (ii)  Consolidated  Debt  Service for the four fiscal  quarters
ended in April of the previous fiscal year.

                  (c) In addition to the Capital  Expenditures  permitted  under
clauses (a) and (b) above, American Ski and its Restricted Subsidiaries may make
Capital  Expenditures  not to exceed  $30,000,000  to be used for the  purchase,
construction  and  installation  of a gondola  ski lift at  Heavenly  Valley Ski
Resort.

     Section 9.8 Dispositions of Assets. Sell, lease or otherwise dispose of any
assets  except  for (a) the  sale,  lease or  other  disposition  of  inventory,
including  residential real property held for resale,  in the ordinary course of
business, (b) the Permitted  Dispositions and (c) Permitted  Non-Strategic Asset
Sales.

     Section  9.9  Assumptions,   Guaranties,  Etc.  of  Indebtedness  of  Other
Persons.  Assume,  guarantee,  endorse or  otherwise  be or become  directly  or


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<PAGE>

contingently  liable  (including,  without  limitation,  by  way  of  agreement,
contingent or otherwise, to purchase, provide funds for payment, supply funds to
or otherwise  invest in any Person or otherwise assure the creditors of any such
Person against loss) in connection  with any  Indebtedness  of any other Person,
except  for (a)  Real  Estate  Guaranties,  (b)  Guaranties  by  endorsement  of
negotiable  instruments for deposit or collection or similar transactions in the
ordinary  course of business and (c)  Guaranties  which  constitute  Investments
permitted under Section 9.3 hereof.

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

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

     Section  9.12  Restrictive  or  Inconsistent  Agreements.  Enter  into  any
agreement (a) other than the Lender  Agreements,  the Senior  Subordinated Notes
Indenture  and related  guaranties  of  Restricted  Subsidiaries,  the  Cerberus
Purchase Agreement and the Series B Preferred Stock Agreements,  which, directly
or  indirectly,  prohibits or  restrains,  or has the effect of  prohibiting  or
restraining or otherwise imposes any materially adverse or burdensome  condition
upon, the declaration or payment of dividends or  distributions,  the incurrence
of  Indebtedness,  the  granting  of liens  (except for  customary  restrictions
against liens on assets leased under  Capitalized  Leases permitted  hereunder),
the  making  of loans  or  advances  to  American  Ski or any of its  Restricted
Subsidiaries or the amendment or modification of any of the Lender Agreements or
(b)  containing  any provision that would be violated or breached by any Loan or
the  performance  by American Ski or any of its Restricted  Subsidiaries  of its
obligations hereunder or under any of the Lender Agreements.

     Section  9.13  Limitations  on Real Estate  Operations.  Engage in any real
estate development  activities involving acquisition of land intended for resale
(except  incident to a Permitted  Acquisition)  or  development  of  residential
subdivisions, condominium units, hotels or related infrastructure and utilities,
except through the Unrestricted  Subsidiaries and except for Real Estate Capital
Expenditures to the extent permitted under Section 9.7 hereof.

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     Section  9.14 Fiscal Year.  Change their fiscal year from the  twelve-month
period ending on the last Sunday of July of each year.

     Section 9.15 Limitation on Excess Proceeds.  So long as applicable,  permit
Excess Proceeds (as defined in the Senior  Subordinated  Notes Indenture) at any
time to exceed $7,500,000.

     Section  9.16  No  Amendment  of  Subordinated  Notes,   Cerberus  Purchase
Agreement,  or Series B Preferred  Stock  Agreements.  Enter into any amendment,
modification  or waiver of or  supplement  to any of the terms or  provision  of
Senior Subordinated Notes, the Senior Subordinated Notes Indenture, the Cerberus
Purchase  Agreement,  the Series A Certificate  of  Designation  or the Series B
Preferred Stock Agreements  (except for amendments,  modifications,  waivers and
supplements of the Series B Preferred Stock Stockholders  Agreement) without the
prior written consent of the Majority Lenders.

     Section 9.17 Exchange of Cerberus 10 1/2% Repriced Convertible Exchangeable
Preferred  Stock  and  Amended  and  Restated   Registration   Rights  Agreement
Penalties.  Exercise its rights under Section 7 of the Series A  Certificate  of
Designation  to convert the Cerberus 10 1/2% Repriced  Convertible  Exchangeable
Preferred Stock into 10 1/2% Repriced Subordinated Debentures (as defined in the
Certificate of  Designation)  without the prior written  consent of the Majority
Lenders or incur any  Registration  Delay Fees (as  defined in the  Amended  and
Restated  Registration  Rights  Agreement)  pursuant  to  Section  2.1(b) of the
Amended and Restated  Registration  Rights  Agreement  without the prior written
consent of the Agent.

     Section 9.18  Limitation  on Issuance of Capital  Stock.  American Ski will
not, and will not permit any of its  Restricted  Subsidiaries  to, issue (a) any
class of preferred  stock (other than the Series A Exchangeable  Preferred Stock
and the Series B Preferred Stock) or (b) any class of redeemable  (except at the
sole option of American Ski or such Restricted Subsidiary) common stock.


                   ARTICLE 10. EVENTS OF DEFAULT AND REMEDIES

     Section  10.1  Events of Default.  Each of the  following  events  shall be
deemed to be Events of Default hereunder:

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                  (a) American Ski or any  Restricted  Subsidiary  shall fail to
make  any  payment  in  respect  of (i)  the  principal  of  any  of the  Lender
Obligations  as the same shall become due,  whether at the stated payment dates,
required prepayment or by acceleration, demand or otherwise, or (ii) interest or
commitment  fees on or in respect of any of the Lender  Obligations  as the same
shall become due, and such failure shall continue for a period of five (5) days.

                  (b) American Ski or any  Restricted  Subsidiary  shall fail to
perform or observe any of the terms,  covenants,  conditions  or  provisions  of
Articles 6, 7, 8 or 9 hereof; provided, however, that with respect to the terms,
covenants, conditions and provisions of Article 6 only (except for Sections 6.5,
6.6 and 6.11),  the Agent shall notify American Ski of American Ski's failure to
provide the  required  reports  when due and the Agent shall allow  American Ski
five (5) days to comply with the terms, covenants,  conditions and provisions of
Article 6.

                  (c) American Ski or any  Restricted  Subsidiary  shall fail to
perform or observe  any other  term,  covenant,  condition  or  provision  to be
performed or observed by American Ski or any  Restricted  Subsidiary  under this
Agreement or any other Lender Agreement, and such failure shall not be rectified
or cured to the  Agent's  satisfaction  within  thirty  (30) days after  written
notice thereof to American Ski.

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

                  (e) American Ski or any  Restricted  Subsidiary (i) shall fail
to make any  payment of  principal  of or  interest  on  Indebtedness  for money
borrowed  of  American  Ski or any  Restricted  Subsidiary  with an  outstanding
principal  amount of greater than  $2,000,000 or any Guaranty of money  borrowed
with an  outstanding  principal  amount of  greater  than  $2,000,000  when such
payment  is  due   (whether  by   scheduled   maturity,   required   prepayment,
acceleration,  demand or  otherwise)  or shall fail to  perform  or observe  any
provision of any agreement or instrument relating to such Indebtedness, and such
failure shall permit the holder thereof to accelerate such  Indebtedness or (ii)
shall fail to observe or perform its covenants, agreements and obligations under
any other material lease or other agreement by which it is bound,  including any
leasing facility with any of the Lenders or their affiliates.

                  (f)  American  Ski  or  any  Restricted  Subsidiary  shall  be
involved in financial difficulties as evidenced:

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

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

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

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

                           (v) by the entry of an order by a court of  competent
         jurisdiction  (1) finding it to be bankrupt or insolvent,  (2) ordering
         or approving its  liquidation,  reorganization  or any  modification or
         alteration of the rights of its  creditors or (3) assuming  custody of,
         or  appointing a receiver or other  custodian  for all or a substantial
         part of its  property  and such order shall not be vacated or stayed on
         appeal or otherwise stayed within 30 days;

                           (vi) by the filing of a petition against American Ski
         or any  Restricted  Subsidiary  under said Title 11 which  shall not be
         vacated within 30 days; or

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

                  (g) There shall have occurred a judgment  against American Ski
or any  Restricted  Subsidiary  in any  court  (i) for an  amount  in  excess of
$2,000,000  and from which no appeal has been taken or with respect to which all
appeal   periods  have  expired,   unless  such  judgment  is,  to  the  Agent's
satisfaction, insured against in full (less the applicable policy deductible) or
(ii) which shall have a Material Adverse Effect.

                  (h) The  adoption  of a plan  relating to the  liquidation  or
dissolution of American Ski.

                  (i) The first day on which more than  one-third of the members
of the Board of Directors of American Ski are not Continuing Directors.

                  (j) Any  person or group of  persons  within  the  meaning  of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended,  other than


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the Otten  Shareholders and Oak Hill,  shall own of record or beneficially  more
than 30% of the issued and outstanding capital stock of American Ski.

                  (k)      [Intentionally Omitted]

                  (l) American Ski shall cease to own,  directly or  indirectly,
of record and  beneficially  all of the issued and outstanding  capital stock of
any  Material  Restricted  Subsidiary,   except  as  a  result  of  a  Permitted
Disposition or the exercise of the Sugarloaf  warrants described on Schedule 8.9
hereto. For purposes of this Section 10.1(l), a "Material Restricted Subsidiary"
shall mean a Restricted  Subsidiary (i) whose assets constitute  greater than 5%
of the  consolidated  assets of American Ski and its Restricted  Subsidiaries or
(b) whose revenues  contributed greater than 5% of the consolidated  revenues of
American  Ski and its  Restricted  Subsidiaries  for any fiscal  year during the
preceding three fiscal years.

                  (m)  Any  of  the  Lender   Agreements   shall  be   canceled,
terminated,  revoked or rescinded  otherwise  than in accordance  with the terms
thereof or with the express prior written agreement,  consent or approval of the
Agent; or any Lender Agreement, or any Lien granted thereunder, shall (except in
accordance with its terms or the terms of this Agreement),  in whole or in part,
terminate,  cease to be effective or cease to be the legally valid,  binding and
enforceable  obligation of any Borrower or  Guarantor;  or any Lien securing any
Lender  Obligation  shall,  in whole or in part,  cease to be a perfected  first
priority Lien, subject only to those exceptions  expressly permitted by a Lender
Agreement or the terms of this  Agreement and except to the extent that any such
Lien has ceased to be a perfected  first  priority  Lien solely due to an act or
omission  by the  Agent or a Lender;  or any  action at law suit or in equity or
other legal proceeding to cancel, revoke or rescind any of the Lender Agreements
shall be commenced by or on behalf of American Ski or any Restricted Subsidiary,
or any court or any other  governmental  or  regulatory  authority  or agency of
competent  jurisdiction  shall make a  determination  that, or issue a judgment,
order,  decree or  ruling  to the  effect  that,  any one or more of the  Lender
Agreements is illegal,  invalid or  unenforceable  in accordance  with the terms
thereof.

                  (n)  American  Ski  or  any  Restricted  Subsidiary  shall  be
indicted  for a  federal  crime,  a  punishment  for  which  could  include  the
forfeiture of any assets of American Ski or such Restricted Subsidiary.

                  (o) American Ski shall make a claim for indemnification  under
the Kamori Stock Purchase Agreement in an amount in excess of $250,000.

                  (p) The subordination  provisions relating to any Subordinated
Indebtedness  shall  fail to be  enforceable  by the  Lenders  (which  have  not
effectively  waived the benefits  thereof) in accordance with the terms thereof,
or the principal or interest on any Lender  Obligation  shall fail to constitute
Senior  Indebtedness  (or  similar  term,  as defined  in any such  Subordinated


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<PAGE>

Indebtedness) or any Borrower, Guarantor, Restricted Subsidiary or any holder of
Subordinated  Indebtedness shall, directly or indirectly,  disavow or contest in
any manner  (i) the  effectiveness,  validity  or  enforceability  of any of the
provisions of the Subordinated Indebtedness, (ii) that any of such provisions of
Subordinated  Indebtedness exist for the benefit of the Agent and each Lender or
(iii) that all  payments  of  principal  or  interest  with  respect to any such
Subordinated  Indebtedness made by the Borrower, any Guarantor or any Restricted
Subsidiary,  or realized from the  liquidation  of any property of the Borrower,
any  Guarantor  or any  Restricted  Subsidiary,  shall be subject to any of such
provisions of Subordinated Indebtedness.

     Section 10.2 Remedies.  Upon the occurrence of an Event of Default, in each
and every  case,  the Agent may,  and upon the request of the  Majority  Lenders
shall, proceed to protect and enforce the rights of the Agent and the Lenders by
suit in equity,  action at law and/or other  appropriate  proceeding  either for
specific performance of any covenant or condition contained in this Agreement or
any other Lender  Agreement or in any  instrument  delivered to the Agent or the
Lenders  pursuant  hereto or  thereto,  or in aid of the  exercise  of any power
granted in this  Agreement,  any Lender  Agreement or any such  instrument,  and
(unless there shall have occurred an Event of Default under Section 10.1(f),  in
which case the unpaid  balance of the  Lender  Obligations  shall  automatically
become  due and  payable  without  notice or demand) by notice in writing to the
Borrowers (a) declare the  obligations of the Lenders to make  Revolving  Credit
Advances,  the  obligation of the Swing Line Lender to make Swing Line Loans and
the obligations of the Issuing Bank to issue,  extend or renew Letters of Credit
to be terminated,  whereupon such obligations  shall be terminated,  (b) declare
all or any part of the unpaid balance of the Lender Obligations then outstanding
to be forthwith due and payable,  whereupon  such unpaid balance or part thereof
shall become so due and payable without presentation,  protest or further demand
or notice of any kind, all of which are hereby expressly  waived,  and the Agent
may proceed to enforce payment of such balance or part thereof in such manner as
the Agent may elect,  and the Agent and each Lender may offset and apply  toward
the payment of such balance or part thereof any Indebtedness of the Agent or any
Lender to any  Borrower  or to any  Subsidiary,  or to any obligor of the Lender
Obligations,  including any Indebtedness  represented by deposits in any general
or  special  account  maintained  with the Agent or any Lender or with any other
Person controlling,  controlled by or under common control with the Agent or any
Lender and (c) demand that the Borrowers provide cash collateral to the Agent as
security  for the  Revolving  Credit  Lenders in an amount  equal to 105% of the
Letter of  Credit  Exposure  which  the  Borrowers  shall  provide  to the Agent
immediately upon such demand.

     Section  10.3  Distribution  of Proceeds.  Notwithstanding  anything to the
contrary  contained herein, in the event that following the occurrence or during
the  continuance of any Event of Default,  the Agent or any Lender  receives any
monies on account of the Lender  Obligations  from the  Borrowers or  otherwise,
such monies shall be distributed for application as follows:

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<PAGE>

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

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

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

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

                  (e)  Fifth, the excess, if any, shall be returned to the
Borrowers or to such other Persons as are entitled thereto.

               ARTICLE 11. CONSENTS; AMENDMENTS; WAIVERS; REMEDIES

     Section 11.1 Actions by Lenders. Except as otherwise expressly set forth in
any particular provision of this Agreement,  any consent or approval required or
permitted  by this  Agreement  to be given  by the  Lenders,  including  without
limitation  under Section 11.2, may be given,  and any term of this Agreement or
of any other instrument  related hereto or mentioned herein may be amended,  and
the  performance or observance by American Ski or any  Restricted  Subsidiary of
any term of this  Agreement may be waived  (either  generally or in a particular
instance and either  retroactively  or  prospectively)  with, but only with, the
written  consent of  American  Ski,  the  Borrowers  and the  Majority  Lenders;
provided, however, that (a) no amendment of Section 2.18 may be made without the
consent of the Swing Line  Lender,  (b) no  amendment  of Article 13 may be made
without the  consent of the Agent and (c)  without  the  written  consent of all
Lenders:

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

                           (ii) no  extension or  postponement  shall be made of
         the stated time of payment of the principal  amount of, interest on, or
         fees  payable to the Lenders or the Swing Line  Lender  relating to the
         Term Loans and the Revolving  Credit  Advances or the Swing Line Loans,
         respectively;

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<PAGE>

                           (iii)  no  change  in the  Maximum  Revolving  Credit
         Amount or the  principal  amount of the Term Loans and extension of the
         Revolving Credit  Termination Date or the Term Loan Maturity Date shall
         be made;

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

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

                           (vi)     no change in the provisions of Section
         12.1(a) or this Section 11.1 shall be made.

     Section 11.2 Actions by  Borrowers.  No delay or omission on the Agent's or
the Lenders' part in exercising  their rights and remedies against American Ski,
the Borrowers or any other  interested party shall constitute a waiver. A breach
by American Ski or any Borrower of its  obligations  under this Agreement may be
waived  only by a  written  waiver  executed  by the Agent  and the  Lenders  in
accordance  with Section 11.1.  The Agent's and the Lenders'  waiver of American
Ski's or a Borrower's  breach in one or more  instances  shall not constitute or
otherwise be an implicit waiver of subsequent breaches.  To the extent permitted
by applicable law, American Ski and the Borrowers, jointly and severally, hereby
agree  to  waive,  and do  hereby  absolutely  and  irrevocably  waive,  (a) all
presentments,  demands  for  performance,  notices  of  protest  and  notices of
dishonor in connection with any of the  Indebtedness  evidenced by the Term Loan
Notes, the Revolving Credit Notes and the Swing Line Note (b) any requirement of
diligence or promptness  on the Agent's or the Lenders' part in the  enforcement
of their rights under the provisions of this  Agreement or any Lender  Agreement
and (c) any and all notices of every kind and description  which may be required
to be given by any  statute  or rule of law with  respect to its  liability  (i)
under this  Agreement  or in respect of the  Indebtedness  evidenced by the Term
Loan Notes,  the  Revolving  Credit Notes and the Swing Line Note,  or any other
Lender Obligation or (ii) under any other Lender Agreement. No course of dealing
between any  American  Ski or any  Borrower or  American  Ski and the  Borrowers
collectively  and the Agent or the Lenders  shall  operate as a waiver of any of
the Agent's or the Lenders' rights under this Agreement or any Lender  Agreement
or with  respect  to any of the  Lender  Obligations.  This  Agreement  shall be
amended  only by a written  instrument  executed by the Agent and the Lenders in
accordance  with Section 11.1 making explicit  reference to this Agreement.  The
Agent's and the Lenders'  rights and remedies under this Agreement and under all
subsequent  agreements  between the Agent,  the  Lenders,  American  Ski and the
Borrowers  shall be cumulative  and any rights and remedies  expressly set forth
herein shall be in addition to, and not in  limitation  of, any other rights and
remedies  which may be  applicable  to the Agent  and the  Lenders  in law or at
equity.

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<PAGE>


                       ARTICLE 12. SUCCESSORS AND ASSIGNS

     Section 12.1 General.  This Agreement shall be binding upon and shall inure
to the  benefit of the parties  hereto and their  respective  successors  (which
shall include in the case of the Agent or any Lender any entity resulting from a
merger or consolidation)  and assigns,  except that (a) neither American Ski nor
any Borrower may assign its rights or  obligations  under this Agreement and (b)
each Lender may assign its rights in this  Agreement  only as set forth below in
this Article 12.

     Section 12.2      Assignments

                  (a)  Assignments.  In  compliance  with  applicable  laws with
respect to such  assignment and with the consent of the Agent and, so long as no
Event of Default has occurred and except for  assignments  between and among the
Lenders,  affiliates of the Lenders or an Approved Fund,  American Ski on behalf
of the Borrowers (which consents shall not be unreasonably  withheld),  a Lender
may assign to one or more financial  institutions (each a "Successor  Lender") a
proportionate  part of its  rights  and  obligations  in  connection  with  this
Agreement,  its Term Loan Note and/or its Revolving  Credit Note and the related
Lender  Agreements and each such  Successor  Lender shall assume such rights and
obligations pursuant to an Assignment and Acceptance Agreement  ("Assignment and
Acceptance Agreement") duly executed by such Successor Lender and such assigning
Lender and  acknowledged  and consented to by the Agent and, so long as no Event
of  Default  has  occurred  and  except for  assignments  between  and among the
Lenders,  affiliates of the Lenders or an Approved Fund,  American Ski on behalf
of the Borrowers,  substantially in the form of Exhibit P attached  hereto.  Any
assignment  under this Section 12.2(a) shall be of the Maximum  Revolving Credit
Amount  and for the term  Loans in an  aggregate  minimum  amount of  $5,000,000
except  that  there  shall be no  minimum  assignment  amount in the case of (i)
assignments  between  and among the  Lenders,  affiliates  of the  Lenders or an
Approved Fund and (ii) an assignment of a Lender's total remaining interest that
is in an amount less than  $5,000,000.  In connection with any assignment  under
this Section 12.2(a) there shall be paid to the Agent by the assigning Lender or
the Successor Lender an administrative processing fee in the amount of $2,500.

                  (b)  Assignment  Procedures.  In the event of an assignment in
accordance  with  Section  12.2(a),  upon  execution  and  delivery  of  such an
assignment  at least five (5)  Business  Days prior to the  proposed  assignment
date, and payment by such Successor  Lender to the assigning Lender of an amount
equal to the  purchase  price  agreed  between  such  assigning  Lender and such
Successor Lender,  such Successor Lender shall become party to this Agreement as
a  signatory  hereto and shall have all the rights and  obligations  of a Lender
under this Agreement and the other Lender Agreements with an interest therein as
set forth in such assignment,  and such assignor making such assignment shall be


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<PAGE>

released  from its  obligations  hereunder  to a  corresponding  extent,  and no
further consent or action by any party shall be required.  Upon the consummation
of any such  assignment,  the assigning  Lender,  the  Successor  Lender and the
Borrowers shall make appropriate  arrangements so that, if required,  a new Term
Loan Note and  Revolving  Credit Note are issued to the  Successor  Lender and a
replacement  Term  Loan  Note  and/or  Revolving  Credit  Note is  issued to the
assigning  Lender in  principal  amounts  reflecting  their  respective  revised
interests.

                  (c)  Register.  The  Agent  shall  maintain  a  register  (the
"Register")  for the recordation of (i) the names and addresses of all Successor
Lenders that enter into Assignment and Acceptance Agreements, (ii) the interests
of each Lender,  (iii) the principal amount of the Term Loans owing to each Term
Loan Lender from time to time, (iv) the amounts of the Revolving Credit Advances
owing to each  Revolving  Credit Lender from time to time and (v) the amounts of
the Swing  Line  Loans  owing to the Swing Line  Lender  from time to time.  The
entries in the Register shall be conclusive,  in the absence of manifest  error,
and the Borrowers, the Agent and the Lenders may treat each Person whose name is
registered  therein for all purposes as a party to this Agreement.  The Register
shall be  available  for  inspection  by the  Borrowers  and any  Lender  at any
reasonable time and from time to time upon reasonable prior notice.

                  (d) Further  Assurances.  American Ski and the Borrowers shall
sign such  documents  and take such other  actions from time to time  reasonably
requested  by the Agent or a Lender to enable any  Successor  Lender to share in
the benefits and rights created by the Lender Agreements.

                  (e)  Assignments  to Federal  Reserve Bank.  Any Lender at any
time may assign all or any portion of its rights under this Agreement,  its Term
Loan Note and/or its  Revolving  Credit Note to a Federal  Reserve Bank. No such
assignment shall release the transferor Lender from its obligations hereunder.

                  (f) Assignments of Security  Agreements/Endorsements  to Title
Policies. In connection with the assignment by a Lender of its rights under this
Agreement,  its Term Loan Note and/or its  Revolving  Credit  Note,  such Lender
shall assign all of its rights under the Security  Agreements to the  applicable
Successor  Lender.  In connection  with the  assignment of the Mortgages and the
Collateral  Assignment  of Leases  from such  Lender to such  Successor  Lender,
American Ski and the  Borrowers  shall  provide the Agent with  appropriate  and
acceptable  endorsements  to  the  title  policies  insuring  the  Lien  of  the
Mortgages,  if any are required,  reflecting the Assignment of the Mortgages and
the  Assignment  of  Leases  to such  Successor  Lender  in form  and  substance
acceptable to the Agent and the Successor Lender.

     Section  12.3  Participations.  Any Lender may,  without the consent of the
Borrowers  or the  Agent,  at any  time  grant  or offer to grant to one or more
financial institutions ("Credit  Participants")  participating interests in such
Lender's  rights and  obligations  in this  Agreement,  its Term Loan Note,  its
Revolving  Credit Note and the related Lender  Agreements,  and each such Credit


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<PAGE>

Participant  shall  acquire  such  participation  subject to the terms set forth
below.

                  (a) Procedure.  Each Lender granting such participation  shall
comply with all  applicable  laws with respect to such transfer and shall remain
responsible for the performance of its obligations hereunder and under the other
Lender Agreements and shall retain the sole right and responsibility to exercise
its rights and to enforce  the  obligations  of American  Ski and the  Borrowers
hereunder and under the other Lender Agreements,  including the right to consent
to any  amendment,  modification  or  waiver  of  any  provision  of any  Lender
Agreement,  except for those  matters  referred to in Section 11.1 which require
the consent of all Lenders and which may also require the consent of each Credit
Participant.

                  (b) Dealing with Lenders. American Ski and the Borrowers shall
continue to deal solely and directly with the Lenders in  connection  with their
rights and obligations under this Agreement and the other Lender Agreements.

                  (c) Rights of Credit  Participants.  The Borrowers  agree that
each Credit  Participant  shall,  to the extent  provided  in its  participation
instrument,  be entitled to the benefits of Sections 2.9, 2.10, 2.11, 2.13, 2.14
and  14.5,  and  the  set-off  rights  in  Section  10.2  with  respect  to  its
participating interest;  provided,  however, that no Credit Participant shall be
entitled to receive  any greater  payment  under such  Sections  than the Lender
granting such participation  would have been entitled to receive with respect to
the interests transferred.

                  (d) Notice.  At the time of granting  any  participation,  the
Lender granting such participation shall notify the Agent and the Borrowers.

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                              ARTICLE 13. THE AGENT

     Section 13.1  Authorization  and Action.  Each Lender  hereby  appoints and
authorizes  the Agent to take such  action on its  behalf and to  exercise  such
powers under this Agreement and the other Lender  Agreements as are delegated to
the Agent by the terms  hereof and  thereof,  together  with such  powers as are
reasonably  incidental  thereto. As to any matters not expressly provided for by
this Agreement and the other Lender Agreements  (including,  without limitation,
enforcement  or  collection  of the Term  Loan  Notes and the  Revolving  Credit
Notes),  the Agent shall not be required to exercise any  discretion or take any
action,  but shall be  required  to act or to refrain  from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders,  and such instructions  shall be binding upon all Lenders;
provided, however, that the Agent shall not be required to take any action which
exposes the Agent to  liability  or which is contrary to this  Agreement  or the
other Lender  Agreements or applicable law. Subject to the foregoing  provisions
and to the other  provisions  of this Article 13, the Agent shall,  on behalf of
the  Lenders:  (a) execute  any  documents  on behalf of the  Lenders  providing
collateral for or guarantees of the Lender  Obligations;  (b) hold and apply any
collateral for the Lender  Obligations,  and the proceeds  thereof,  at any time
received by it, in  accordance  with the  provisions  of this  Agreement and the
other Lender Agreements; (c) exercise any and all rights, powers and remedies of
the  Lenders  under  this  Agreement  or  any of the  other  Lender  Agreements,
including  the  giving of any  consent  or waiver  or the  entering  into of any
amendment,  subject to the  provisions of Section 11.1;  (d) at the direction of
the Lenders,  execute,  deliver and file UCC  financing  statements,  mortgages,
deeds of trust,  lease  assignments and such other  agreements in respect of any
collateral for the Lender Obligations,  and possess instruments  included in the
collateral  on behalf of the Lenders;  and (e) in the event of  acceleration  of
American Ski's or the Borrowers' Indebtedness hereunder, act at the direction of
the Majority  Lenders to exercise the rights of the Lenders  hereunder and under
the other Lender Agreements.

     Section  13.2  Agent's  Reliance,  Etc.  Neither  the  Agent nor any of its
directors,  officers, agents or employees shall be liable to the Lenders for any
action  taken or omitted to be taken by it or them under or in  connection  with
this Agreement or the other Lender Agreements, except for its or their own gross
negligence or willful  misconduct.  Without  limitation of the generality of the
foregoing,  the  Agent:  (a) may  treat  the  payee of any Term Loan Note or any
Revolving  Credit Note as the holder  thereof until the Agent  receives  written
notice of the  assignment or transfer  thereof  signed by such payee and in form
required  under  Article  12  hereof;   (b)  may  consult  with  legal  counsel,
independent public accountants and other experts selected by it and shall not be
liable  for any  action  taken or  omitted  to be  taken in good  faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or  representations  to any Lender and shall not be  responsible to any
Lender  for  any  statements,  warranties  or  representations  made  in  or  in
connection  with this  Agreement or the other Lender  Agreements;  (d) shall not
have any duty to ascertain or to inquire as to the  performance or observance of
any of the terms,  covenants or conditions of this Agreement or the other Lender


                                       92
<PAGE>

Agreements  on the part of the  Borrowers  or any other Person or to inspect the
property (including the books and records) of the Borrowers or any other Person;
(e) shall not be  responsible  to any  Lender for the due  execution,  legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
the other  Lender  Agreements  or any other  instrument  or  document  furnished
pursuant hereto or thereto; and (f) shall incur no liability under or in respect
of this  Agreement  or the other  Lender  Agreements  by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopy or
telegram)  believed  by the Agent to be genuine and signed or sent by the proper
party or parties.

     Section  13.3  Agent as a  Lender.  With  respect  to its  interest  in its
Commitment  Percentage of the Loans hereunder,  BankBoston,  N.A. shall have the
same rights and powers under this  Agreement and the other Lender  Agreements as
any other Lender and may exercise the same as though it were not the Agent;  and
the term "Lender" or "Lender(s)" shall,  unless otherwise  expressly  indicated,
include BankBoston,  N.A. in its individual capacity.  BankBoston,  N.A. and its
affiliates may lend money to, and generally engage in any kind of business with,
any  Borrower,  any Affiliate of any Borrower and any Person who may do business
with or own  securities  of any Borrower or any such  Affiliate of any Borrower,
all as if  BankBoston,  N.A.  were not the Agent and without any duty to account
therefor to the Lenders.

     Section 13.4 Lender Credit Decision.  Each Lender acknowledges that it has,
independently  and without reliance upon the Agent or any other Lender and based
on the financial  statements referred to in Section 5.9 and such other documents
and information as it has deemed  appropriate,  made its own credit analysis and
decision to enter into this  Agreement.  Each Lender also  acknowledges  that it
will,  independently and without reliance upon the Agent or any other Lender and
based on such  documents and  information  as it shall deem  appropriate  at the
time,  continue to make its own credit  decisions in taking or not taking action
under this Agreement.

     Section 13.5  Indemnification of Agent. Each Lender agrees to indemnify the
Agent and its directors,  officers, employees and agents (to the extent that the
Agent is not reimbursed by the  Borrowers),  ratably  according to each Lender's
Commitment  Percentage,  from and against any and all liabilities,  obligations,
losses,  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or  asserted  against the Agent or its  directors,  officers,  employees  or
agents in any way  relating  to or arising  out of this  Agreement  or any other
Lender  Agreement or any action  taken or omitted by the Agent in such  capacity
under this Agreement; provided that no Lender shall be liable for any portion of
such liabilities,  obligations,  losses, damages, penalties, actions, judgments,
suits,  costs,  expenses  or  disbursements  resulting  from the  Agent's  gross
negligence  or wilful  misconduct.  Without  limitation of the  foregoing,  each
Lender agrees to reimburse the Agent  promptly upon demand for its ratable share
of any out-of-pocket  expenses (including counsel fees) incurred by the Agent in


                                       93
<PAGE>

connection   with  the   preparation,   execution,   delivery,   administration,
modification,  amendment or enforcement  (whether  through  negotiations,  legal
proceedings  or  otherwise)  of,  or  legal  advice  in  respect  of  rights  or
responsibilities  under, this Agreement and each other Lender Agreement,  to the
extent that the Agent is not  reimbursed  for such  expenses by American Ski the
Borrowers.

     Section  13.6  Successor  Agent.  Except as provided  below,  the Agent may
resign at any time by giving  written notice thereof to the Lenders and American
Ski.  Upon any such  resignation,  the Lenders shall have the right to appoint a
successor  Agent which shall be  reasonably  acceptable  to American  Ski. If no
successor  Agent shall have been so  appointed  by the  Lenders  (other than the
resigning Agent),  and shall have accepted such appointment,  within thirty (30)
days after the retiring Agent's giving notice of resignation,  then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a
commercial bank or financial  institution organized under the laws of the United
States of America or of any state  thereof  and  having a combined  capital  and
surplus of at least $50,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent,  such successor Agent shall thereupon succeed to
and become  vested with all the  rights,  powers,  privileges  and duties of the
retiring  Agent,  and the retiring Agent shall be discharged from its duties and
obligations  under this  Agreement  and the other Lender  Agreements.  After any
retiring Agent's resignation  hereunder as Agent, the provisions of this Article
13 shall inure to its benefit as to any actions  taken or omitted to be taken by
it while it was Agent under this Agreement and the other Lender Agreements.

     Section 13.7 Amendment of Article 13. American Ski and the Borrowers hereby
agree that the  foregoing  provisions of this Article 13 constitute an agreement
among the Agent and the Lenders (and the Agent and the Lenders  acknowledge that
except for the  provisions of Section  13.6,  American Ski and the Borrowers are
not parties to or bound by such  foregoing  provisions)  and that any and all of
the provisions of this Article 13 (excepting Section 13.6) may be amended at any
time by the Lenders and the Agent  without the consent or approval of, or notice
to,  American Ski and the  Borrowers  (other than the  requirement  of notice to
American  Ski  and  the  Borrowers  of the  resignation  of the  Agent  and  the
appointment of a successor Agent).


                            ARTICLE 14. MISCELLANEOUS

     Section 14.1 Notices. All notices and other communications made or required
to be given pursuant to this  Agreement  shall be in writing and shall be mailed
by United  States  mail,  postage  prepaid,  or sent by hand,  by telecopy or by
nationally-recognized overnight carrier service, addressed as follows:

                  (a) If to the Agent, at 100 Federal Street,  Boston, MA 02110,
Telecopier No. 617/434-8102,  Attention: Mr. Carlton F. Williams, Director, with


                                       94
<PAGE>

a copy to:  Goodwin,  Procter  & Hoar LLP,  Exchange  Place,  Boston,  MA 02109,
Telecopier No. 617/523-1231,  Attention:  Edward Matson Sibble, Jr., P.C., or at
such other  address(es) or to the attention of such other Person(s) as the Agent
shall from time to time designate in writing to American Ski and the Lenders.

                  (b) If to American Ski or the Borrowers,  c/o American  Skiing
Company,  P.O. Box 450,  Bethel,  ME 04217, or for overnight  delivery  service,
Sunday River Road,  Bethel, ME 04217,  Telecopier No.  207/824-0192,  Attention:
Mark J. Miller,  Chief  Financial  Officer,  with a copy to:  Foster A. Stewart,
Esquire,  General Counsel,  American Skiing Company, One Monument Way, Portland,
ME  04101  or at such  other  address(es)  or to the  attention  of  such  other
Person(s)  as American  Ski shall from time to time  designate in writing to the
Agent and the Lenders.

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

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

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

     Section 14.2 Merger.  This  Agreement and the other Lender  Agreements  and
documents  contemplated  hereby constitute the entire agreement of American Ski,
the Borrowers,  the Agent and the Lenders and express their entire understanding
with  respect  to  credits  advanced  or to be  advanced  by the  Lenders to the
Borrowers.

     Section 14.3 Governing Law; Consent to Jurisdiction. This Agreement and all
matters  arising  hereunder or relating  hereto  (except to the extent local law
governs  the  exercise  of  remedies  under the  Security  Agreements)  shall be
governed by and construed  and enforced  under the laws of The  Commonwealth  of
Massachusetts.  American  Ski, each of its  Subsidiaries  and each Lender hereby
irrevocably  submits itself to the  non-exclusive  jurisdiction of the courts of
The Commonwealth of Massachusetts and to the  non-exclusive  jurisdiction of any
Federal court of the United States located in the District of Massachusetts  for
the  purpose  of any  suit,  action  or  other  proceeding  arising  out of this
Agreement or any other Lender Agreement or any of the transactions  contemplated
hereby or thereby.



                                       95
<PAGE>

     Section  14.4  Counterparts.  This  Agreement  and all  amendments  to this
Agreement  may be  executed in several  counterparts,  each of which shall be an
original. The several counterparts shall constitute a single Agreement.

     Section 14.5 Expenses and Indemnification.


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

                  (b) Without limitation of any other obligation or liability of
the Borrowers or right or remedy of the Agent or the Lenders  contained  herein,
the Borrowers hereby covenant and agree, jointly and severally, to indemnify and
hold  the  Agent,  the  Lenders,  and  the  directors,  officers,  subsidiaries,
shareholders,  agents,  affiliates  and  Persons  controlling  the Agent and the
Lenders,  harmless  from and against  any and all  damages,  losses,  settlement
payments,  obligations,  liabilities,  claims,  including,  without  limitation,
claims  for  finder's  or  broker's  fees,  actions  or  causes of  action,  and
reasonable costs and expenses  incurred,  suffered,  sustained or required to be
paid by any such  indemnified  party in each case by reason of or resulting from
any claim, investigation, litigation or other proceeding related to the entering
into of this Agreement or any other Lender  Agreement,  the use of any Letter of
Credit or the  proceeds  of any  Loans,  the  consummation  of the  transactions
contemplated  herein,  the exercise by the Agent and the Lenders of their rights
and remedies,  or otherwise  relating to the transactions  contemplated  hereby,
other  than any such  claims  which are  determined  by a final,  non-appealable
judgment or order of a court of competent  jurisdiction  to be the result of the
gross negligence or willful misconduct of such indemnified party.  Promptly upon


                                       96
<PAGE>

receipt by any indemnified  party hereunder of notice of the commencement of any
action  against such  indemnified  party for which a claim is to be made against
the Borrowers  hereunder,  such  indemnified  party shall notify American Ski in
writing of the commencement thereof, although the failure to provide such notice
shall  not  affect  the  indemnification  rights of any such  indemnified  party
hereunder  unless  and  only to the  extent  American  Ski  demonstrates  to the
reasonable  satisfaction  of such  party that such  failure  to  provide  notice
prejudiced  the  Borrowers in their defense of such claim.  The Borrowers  shall
have the right,  at their  option upon  notice to the  indemnified  parties,  to
defend any such matter at their own expense and with their own  counsel,  except
as  provided  below,  which  counsel  must  be  reasonably   acceptable  to  the
indemnified parties. The indemnified party shall cooperate with the Borrowers in
the defense of such matter. The indemnified party shall have the right to employ
separate  counsel  and to  participate  in the defense of such matter at its own
expense.  In the  event  that  (a) the  employment  of  separate  counsel  by an
indemnified  party has been  authorized  in writing  by  American  Ski,  (b) the
Borrowers  have failed to assume the defense of such matter within  fifteen (15)
days of notice thereof from the  indemnified  party, or (c) the named parties to
any such action (including  impleaded parties) include any indemnified party who
has been  advised  by  counsel  that  there  may be one or more  legal  defenses
available  to it or  prospective  bases  for  liability  against  it,  which are
different from those  available to or against the Borrowers,  then the Borrowers
shall not have the right to assume the defense of such  matter  with  respect to
such  indemnified  party.  The Borrowers shall not compromise or settle any such
matter  against  an  indemnified  party  without  the  written  consent  of  the
indemnified party, which consent may not be unreasonably withheld or delayed.

     Section  14.6  Confidentiality.  The  Agent  and the  Lenders  agree to use
commercially  reasonable  efforts to keep in confidence  all financial  data and
other  information  relative to the affairs of American Ski and its Subsidiaries
heretofore furnished or which may hereafter be furnished to them pursuant to the
provisions of this Agreement;  provided,  however,  that this Section 14.6 shall
not be  applicable  to  information  otherwise  disseminated  to the  public  by
American Ski or any of its Subsidiaries or any of their Affiliates; and provided
further,  that such  obligation of the Agent and the Lenders shall be subject to
the Agent's or the Lenders', as the case may be, (a) obligation to disclose such
information pursuant to a request or order under applicable laws and regulations
or pursuant to a subpoena or other legal process, (b) right to disclose any such
information  to  bank  or  other  regulatory  examiners,  affiliates,  auditors,
accountants and counsel or to any Person who evaluates,  approves, structures or
administers  the Loans on behalf of a Lender who agree to keep such  information
confidential  and (c) right to disclose any such  information  (i) in connection
with the  transactions  set forth herein  including  assignments  or the sale of
participation  interests  pursuant  to  Article  12,  so long as such  potential
assignees  or  participants  shall  agree in writing to be bound by the terms of
this Section 14.6 , (ii) to any direct or indirect  contractual  counterparty in
swap agreements or such contractual counterparty's professional advisor (so long
as such  contractual  counterparty or professional  advisor to such  contractual
counterparty  agrees to be bound by the  provisions  of this Section  14.6),  or
(iii) in connection  with any  litigation or dispute  involving the Agent or any
transfer or other  disposition by the Agent or the Lenders,  as the case may be,


                                       97
<PAGE>

of any of the Lender Obligations;  provided that information  disclosed pursuant
to this  provision  shall be so  disclosed  subject  to such  procedures  as are
reasonably calculated to maintain the confidentiality thereof.

     Section 14.7 Reliance on  Representations  and Actions of American Ski. The
Borrowers  hereby  appoint  American  Ski as the  Borrowers'  agent to  execute,
deliver  and  perform,  on  behalf  of  the  Borrowers,  any  and  all  notices,
certificates,  documents  and actions to be  executed,  delivered  or  performed
hereunder or under any of the other Lender Agreements,  and the Borrowers hereby
agree that the Agent and the Lenders may rely upon any representation, warranty,
certificate, notice, document or telephone request which purports to be executed
or made or which the Agent or the  Lenders  in good  faith  believe to have been
executed  or made by  American  Ski or any of its  executive  officers,  and the
Borrowers hereby further, jointly and severally, agree to indemnify and hold the
Agent and the Lenders harmless for any action,  including the making of the Term
Loans, the Revolving Credit Advances or the Swing Line Loans hereunder,  and any
loss or  expense,  taken or  incurred  by any of them as a result of their  good
faith  reliance upon any such  representation,  warranty,  certificate,  notice,
document or telephone request.

     Section  14.8  Joint  and  Several  Obligations.  All  obligations  of  the
Borrowers hereunder and under the Notes and all other Lender Agreements shall be
joint and several obligations. The Borrowers waive presentment, demand, protest,
notice of acceptance,  notice of indebtedness  incurred and all other notices of
any kind, all defenses which may be available by virtue of any valuation,  stay,
moratorium  law or other  similar law now or hereafter  in effect,  any right to
require  the  marshaling  of  assets  of  the  Borrowers  and  their  Restricted
Subsidiaries, and all suretyship defenses generally.

     Section 14.9 Continuity of 1997 Credit Agreements. The Borrowers, the Agent
and the Lenders  hereby  acknowledge  and agree that (a) each of the 1997 Credit
Agreements  and the Lender  Agreements  executed  in  connection  therewith,  as
amended,  restated and  consolidated  hereby,  shall  continue in full force and
effect,  as so amended,  restated  and  consolidated  and (b) the Agent shall be
entitled  to the  benefit  of all  documents,  opinions,  certificates  or other
instruments  which have been issued in favor of or which  otherwise  benefit the
Agent as agent  under one or both of the 1997 Credit  Agreements,  and the Agent
may take any actions to enforce any rights  thereunder  in  accordance  with the
terms  thereof  as the Agent  may deem  useful,  convenient  or  necessary.  The
Borrowers will execute and deliver,  or cause to be delivered,  such  documents,
opinions,  certificates or other instruments as the Agent may reasonably request
to assure the Agent the  continued  benefit of its rights and remedies as agent,
under  the  1997  Credit  Agreements  and  all  related   documents,   opinions,
certificates and instruments,  as in effect  immediately prior to the amendment,
restatement and consolidation of the 1997 Credit Agreements hereunder.

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<PAGE>

     Section  14.10  WAIVER OF JURY  TRIAL.  THE  AGENT,  THE  LENDERS,  AND THE
BORROWERS AGREE THAT NONE OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A
JURY  TRIAL  IN  ANY  LAWSUIT,  PROCEEDING,  COUNTERCLAIM  OR ANY  OTHER  ACTION
INVOLVING  THE AGENT OR ANY LENDER AS A PARTY BASED UPON OR ARISING OUT OF, THIS
AGREEMENT, THE TERM LOAN NOTES, THE REVOLVING CREDIT NOTES, THE SWING LINE NOTE,
ANY LENDER AGREEMENT, ANY RELATED INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS OR
THE  RELATIONSHIP  BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE  ANY
SUCH  ACTION  WITH ANY OTHER  ACTION IN WHICH A JURY TRIAL  CANNOT BE OR HAS NOT
BEEN WAIVED.  THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY EACH
OF THE AGENT, THE LENDERS,  AND THE BORROWERS WITH THEIR RESPECTIVE COUNSEL, AND
THESE  PROVISIONS  SHALL BE SUBJECT  TO NO  EXCEPTIONS.  NONE OF THE AGENT,  THE
LENDERS,  OR THE BORROWERS  HAVE AGREED WITH OR  REPRESENTED  TO ANY OTHER PARTY
THAT  THE  PROVISIONS  OF THIS  PARAGRAPH  WILL  NOT BE  FULLY  ENFORCED  IN ALL
INSTANCES.

                                       99
<PAGE>

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

                                                 AMERICAN SKIING COMPANY


                                                 By:\s\Mark J. Miller
                                                 Name: Mark J. Miller
                                                 Title:Chief Financial Officer

                                                 SUNDAY RIVER SKIWAY CORPORATION


                                                 By:\s\Mark J. Miller
                                                 Name: Mark J. Miller
                                                 Title:Chief Financial Officer

                                                 SUNDAY RIVER LTD.


                                                 By:\s\Mark J. Miller
                                                 Name: Mark J. Miller
                                                 Title:Chief Financial Officer

                                                 PERFECT TURN, INC.


                                                 By:\s\Mark J. Miller
                                                 Name: Mark J. Miller
                                                 Title:Chief Financial Officer

                                                 SUNDAY RIVER TRANSPORTATION INC


                                                 By:\s\Mark J. Miller
                                                 Name: Mark J. Miller
                                                 Title:Chief Financial Officer



                                      100
<PAGE>

                                                 L.B.O. HOLDING, INC.


                                                 By:\s\Mark J. Miller
                                                 Name: Mark J. Miller
                                                 Title:Chief Financial Officer

                                                 SUGARBUSH RESORT HOLDINGS, INC.


                                                 By:\s\Mark J. Miller
                                                 Name: Mark J. Miller
                                                 Title:Chief Financial Offier

                                                 SUGARBUSH LEASING COMPANY


                                                 By:\s\Mark J. Miller
                                                 Name: Mark J. Miller
                                                 Title:Chief Financial Officer

                                                 SUGARBUSH RESTAURANTS, INC.


                                                 By:\s\Mark J. Miller
                                                 Name: Mark J. Miller
                                                 Title:Chief Financial Officer

                                                 MOUNTAIN WASTEWATER TREATMENT,
                                                 INC.


                                                 By:\s\Mark J. Miller
                                                 Name: Mark J. Miller
                                                 Title:Chief Financial Officer

                                                 S-K-I, LTD.


                                                 By:\s\Mark J. Miller
                                                 Name: Mark J. Miller
                                                 Title:Chief Financial Officer

                                      101
<PAGE>

                                                  KILLINGTON, LTD.


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title:Chier Financial Officer

                                                  MOUNT SNOW LTD.


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title:Chief Financial Officer

                                                  PICO SKI AREA MANAGEMENT
                                                  COMPANY


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title:Chief Financial Officer

                                                  RESORT SOFTWARE SERVICES, INC.


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title:Chief Financial Officer

                                                  KILLINGTON RESTAURANTS, INC.


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title:Chief Financial Officer

                                                  RESORTS TECHNOLOGIES, INC.


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title:Chief Financial Officer



                                      102
<PAGE>

                                                  DOVER RESTAURANTS, INC.


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title:Chief Financial Officer

                                                  SUGARLOAF MOUNTAIN CORPORATION


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title:Chief Financial Officer

                                                  MOUNTAINSIDE


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title:Chief Financial Officer

                                                  SUGARTECH


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title:Chief Financial Officer


                                                  ASC UTAH


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title:Chief Financial Officer


                                                  STEAMBOAT SKI & RESORT
                                                  CORPORATION


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title:Chief Financial Officer



                                      103
<PAGE>

                                                  STEAMBOAT DEVELOPMENT
                                                  CORPORATION


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title:Chief Financial Officer


                                                  HEAVENLY VALLEY SKI & RESORT
                                                  CORPORATION


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title:Chief Financial Officer


                                                  HEAVENLY CORPORATION


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title:Chief Financial Officer


                                                  HEAVENLY VALLEY, LIMITED
                                                  PARTNERSHIP
                                                  By:   Heavenly Corporation,
                                                  its general partner


                                                  By:\s\Mark J. Miller
                                                  Name: Mark J. Miller
                                                  Title: Chief Financial Officer



                                      104
<PAGE>

                                                  BANKBOSTON, N.A., as Agent


                                                  By:\s\Carlton F. Williams
                                                  Name: Carlton F. Williams
                                                  Title: Director

                                                  100 Federal Street
                                                  Boston, MA  02110
                                                  Telecopier: (617) 434-8102
                                                  Attention:
                                                  Mr. Carlton F. Williams,
                                                  Director

                                                  BANKBOSTON, N.A.


                                                  By:\s\Carlton F. Williams
                                                  Name: Carlton F. Williams
                                                  Title: Director

                                                  100 Federal Street
                                                  Boston, MA  02110
                                                  Telecopier: (617) 434-8102
                                                  Attention:
                                                  Mr. Carlton F. Williams,
                                                  Director



                                      105
<PAGE>

                                                  WELLS FARGO BANK, NATIONAL
                                                  ASSOCIATION


                                                  By:\s\Dan Adams
                                                  Name: Dan Adams
                                                  Title:Vice President

                                                  400 Capital Mall, 7th Floor
                                                  Sacramento, CA 95814
                                                  Telecopier: (916) 444-2869
                                                  Attention: Mr. Dan Adams,
                                                  Vice President


                                                  U.S. BANK NATIONAL ASSOCIATION


                                                  By:\s\Hassan A. Salem
                                                  Name: Hassan A. Salem
                                                  Title:Assistant Vice President

                                                  918 17th Street
                                                  Denver, CO 80202
                                                  Telecopier: (303) 585-4135
                                                  Attention: Mr. Hassen Salem,
                                                  Assistant Vice President

                                      106
<PAGE>

                                                  FIRST SECURITY BANK, N.A.


                                                  By:\s\Dick van Klaveren
                                                  Name: Dick van Klaveren
                                                  Title:Vice President

                                                  15 East 100 South, 2nd Floor
                                                  Salt Lake City, Utah 84111
                                                  Telecopier: (801) 246-5532
                                                  Attention:
                                                  Mr. Dick Van Klaveren,
                                                  Vice President

                                                  THE HOWARD BANK, N.A.


                                                  By:\s\Michael W. Quinn
                                                  Name: Michael W. Quinn
                                                  Title:Senior Vice President

                                                  111 Main Street
                                                  Burlington, MA  05401
                                                  Telecopier: (802) 860-5542
                                                  Attention: Mr. Michael Quinn

                                      107
<PAGE>

                                                  MERRILL LYNCH SENIOR FLOATING
                                                  RATE FUND, INC.

                                                  By:    Merrill Lynch Asset
                                                  Management, L.P., as
                                                  Investment Advisor


                                                  By:\s\John M. Johnson
                                                  Name: John M. Johnson
                                                  Title:Authorized Signatory

                                                  800 Scudders Mill Road,Area 1B
                                                  Plainsboro, NJ 08536
                                                  Telecopier: (609) 282-3542
                                                  Attention: Ms. Jill Montanye

                                                  MERRILL LYNCH PRIME RATE
                                                  PORTFOLIO

                                                  By:    Merrill Lynch Asset
                                                  Management, L.P., as
                                                  Investment Advisor


                                                  By:\s\John M. Johnson
                                                  Name: John M. Johnson
                                                  Title:Authorized Signatory

                                                  800 Scudders Mill Road,Area 1B
                                                  Plainsboro, NJ 08536
                                                  Telecopier: (609) 282-3542
                                                  Attention: Mr. John Johnson

                                      108
<PAGE>

                                                  VAN KAMPEN AMERICAN CAPITAL
                                                  PRIME RATE INCOME TRUST


                                                  By:\s\Darvin D. Pierce
                                                  Name: Darvin D. Pierce
                                                  Title:Vice President

                                                  c/o Van Kampen American
                                                  Capital
                                                  One Parkview Plaza, 5th Floor
                                                  Oakbrook Terrace, IL 60181
                                                  Telecopier: (630) 684-6740
                                                  Attention: Mr. Scott Fries

                                                  CAPTIVA II FINANCE, LTD.


                                                  By:\s\John Cullinane
                                                  Name: John Cullinane
                                                  Title:Director

                                                  c/o Stanfield Capital Partners
                                                  330 Madison Ave., 27th Floor
                                                  New York, NY 10017
                                                  Telecopier: (212) 284-4320
                                                  Attention:
                                                  Mr. Timothy Daileader

                                      109
<PAGE>

                                                  KZH-PAMCO LLC


                                                  By:\s\James J. Fevola
                                                  Name: James J. Fevola
                                                  Title:Authorized Agent

                                                  c/o The Chase Manhattan Bank
                                                  450 West 33rd Street,
                                                  15th Floor
                                                  New York, NY  10001
                                                  Telecopier: (212) 946-7776
                                                  Attention: Ms. Virginia Conway

                                                  PAM CAPITAL FUNDING, L.P.

                                                  By:    Highland Capital
                                                  Management L.P., as
                                                  Collateral Manager


                                                  By:\s\Mark Okada
                                                  Name: Mark Okada
                                                  Title:Executive Vice President

                                                  c/o Highland Capital
                                                  Management, L.P.
                                                  1150 Two Galleria Tower
                                                  13455 Noel Rd. LB #45
                                                  Dallas, TX 75240
                                                  Telecopier: (972) 233-4343
                                                  Attention:
                                                  Mr. Mark Okada/Mr. Joe Doherty

                                      110
<PAGE>

                                                  KZH III LLC


                                                  By:\s\James J. Fevola
                                                  Name: James J. Fevola
                                                  Title:Authorized Agent

                                                  c/o The Chase Manhattan Bank
                                                  50 West 33rd Street-15th Floor
                                                  New York, NY 10001
                                                  Telecopier: (212) 946-7776
                                                  Attention: Ms. Virginia Conway

                                                  PAMCO CAYMAN, LTD.
                                                  By:    Highland Capital
                                                  Management L.P., as
                                                  Collateral Manager


                                                  By:\s\Mark Okada
                                                  Name: Mark Okada
                                                  Title:Executive Vice President

                                                  c/o Highland Capital
                                                  Management, L.P.
                                                  1150 Two Galleria Tower
                                                  13455 Noel Road, LB 45
                                                  Dallas, TXZ 75240
                                                  Telecopier: (972) 233-6143
                                                  Attention:
                                                  Mr. Mark Okada/Mr. Joe Doherty

                                      111
<PAGE>

                                                  DEBT STRATEGIES FUND II, INC.
                                                  By:    Merrill Lynch Asset
                                                  Management, L.P., as
                                                  Investment Advisor


                                                  By:\s\John M. Johnson
                                                  Name: John M. Johnson
                                                  Title:Authorized Signatory

                                                  c/o Merrill Lynch Asset
                                                  Management
                                                  800 Scudders Mill Road-Area 1B
                                                  Plainsboro, NJ 08536
                                                  Telecopier: (609) 282-2756
                                                  Attention: Mr. John Johnson

                                                  MORGAN STANLEY SENIOR
                                                  FUNDING, INC.


                                                  By:\s\Christopher A. Pucillo
                                                  Name: Christopher A. Pucillo
                                                  Title:Vice President

                                                  c/o Morgan Stanley Senior
                                                  Funding, Inc.
                                                  1585 Broadway, 10th Floor
                                                  New York, NY 10036
                                                  Telecopier: (212) 761-0592
                                                  Attention: Mr. James Morgan

                                      112
<PAGE>

                                                  OASIS COLLATERALIZED HIGH
                                                  INCOME PORTFOLIOS-I, LTD.


                                                  By:\s\Anthony R. Clemente
                                                  Name: Anthony R. Clemente
                                                  Title:Authorized Signatory

                                                  c/o Stanfield Capital Partners
                                                  LLC
                                                  330 Madison Ave., 27th Floor
                                                  New York, NY 10017
                                                  Telecopier: (212) 284-4302
                                                  Attention:
                                                  Mr. Christopher E. Jansen

                                                  BLACK DIAMOND CLO 1998-1 LTD.


                                                  By: /s/ [illegible]
                                                  Name:
                                                  Title:

                                                  c/o Black Diamond Capital
                                                  Management, L.L.C.
                                                  99 River Road
                                                  Cos Cob, CT 06807
                                                  Telecopier: (203) 552-1014
                                                  Attention: Mr. Bob Rosenbloom



                                                  LONG LANE MASTER TRUST IV
                                                  BankBoston, N.A. as Trust
                                                  Administrator

                                                  By:\s\Liam G. Stokes
                                                  Name: Liam G. Stokes
                                                  Title:Director

                                                  c/o BankBoston, N.A.
                                                  100 Federal Street
                                                  Boston, MA  02110


                                      113
<PAGE>