Document:

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                                                                    EXHIBIT 10.9

                              MANAGEMENT AGREEMENT

                                 BY AND BETWEEN

                                SARDY HOUSE, LLC
                                    ("OWNER")

                                       AND

                                  BLOCK 66, LLC
                                  ("OPERATOR")

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                                TABLE OF CONTENTS

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ARTICLE 1 DEFINITIONS.............................................................................................   1
         1.1      Advisory Committee..............................................................................   1
         1.2      Annual Operations Budget........................................................................   1
         1.3      Capital Reserve.................................................................................   1
         1.4      Carriage House Inn..............................................................................   2
         1.5      Commencement Date...............................................................................   2
         1.6      Exclusive Weeks.................................................................................   2
         1.7      Financial Statements............................................................................   2
         1.8      Fiscal Quarter..................................................................................   2
         1.9      Fiscal Year.....................................................................................   2
         1.10     Gross Receipts..................................................................................   2
         1.11     Improvements....................................................................................   3
         1.12     Intangible Property.............................................................................   3
         1.13     Management Fee..................................................................................   3
         1.14     Member Owners...................................................................................   4
         1.15     Operating Agreement.............................................................................   4
         1.16     Operating Expenses..............................................................................   4
         1.17     Operator Overhead Allocation....................................................................   5
         1.18     Operator's Overhead.............................................................................   5
         1.19     Operator Fee....................................................................................   6
         1.20     Owner's Advances................................................................................   6
         1.21     Personal Property...............................................................................   6
         1.22     Property........................................................................................   6
         1.23     Real Property...................................................................................   6
         1.24     Residences......................................................................................   6
         1.25     Term............................................................................................   6
         1.26     Working Capital.................................................................................   7

ARTICLE 2 TERM....................................................................................................   7

ARTICLE 3 APPOINTMENT OF OPERATOR.................................................................................   7

ARTICLE 4 SPECIFIC RESPONSIBILITIES OF OPERATOR...................................................................   7
         4.1      Marketing and promotion.........................................................................   7
         4.2      Financial Management and Budgets................................................................   8
         4.3      General Management Duties.......................................................................   9
         4.4      Specific Management Duties.....................................................................   10
         4.5      Emergency Expenditures.........................................................................   11
         4.6      Expenditures Required For Compliance With Law..................................................   12

ARTICLE 5 GENERAL RESPONSIBILITIES OF OWNER......................................................................   12
         5.1      Improvements and Personal Property.............................................................   12
         5.2      Owner's Advances...............................................................................   12
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ARTICLE 6 MANAGEMENT FEES AND EXPENSES...........................................................................   13
         6.1      Management Fees................................................................................   13
         6.2      Operator Overhead Allocation...................................................................   13
         6.3      Out-of-Pocket Expenses.........................................................................   14

ARTICLE 7 OWNER'S COVENANTS AND REPRESENTATIONS..................................................................   14

ARTICLE 8 OPERATOR'S COVENANTS AND REPRESENTATIONS...............................................................   15

ARTICLE 9 INSURANCE..............................................................................................   16
         9.1      Insurance......................................................................................   16
         9.2      Cost and Expense, Policies and Endorsement.....................................................   16

ARTICLE 10 DAMAGE AND CONDEMNATION...............................................................................   16
         10.1     Total Destruction..............................................................................   16
         10.2     Partial Destruction............................................................................   17
         10.3     Condemnation...................................................................................   17

ARTICLE 11 INDEMNIFICATION.......................................................................................   17
         11.1     Indemnification................................................................................   17

ARTICLE 12 RIGHT TO CURE.........................................................................................   18
         12.1     Right to Cure..................................................................................   18

ARTICLE 13 ASSIGNMENT............................................................................................   18
         13.1     Sale or Assignment.............................................................................   18
         13.2     Effect of Assignment...........................................................................   18

ARTICLE 14 EVENTS OF DEFAULT.....................................................................................   19

ARTICLE 15 REMEDIES..............................................................................................   20
         15.1     Owner's Remedies...............................................................................   20
         15.2     Operator's Remedies............................................................................   20

ARTICLE 16 TERMINATION...........................................................................................   21
         16.1     Events of Termination..........................................................................   21
         16.2     Effect of Termination..........................................................................   21

ARTICLE 17 UNAVOIDABLE DELAYS....................................................................................   22

ARTICLE 18 RELATIONSHIP, AUTHORITY AND FURTHER ACTIONS...........................................................   22
         18.1     No Joint Venture...............................................................................   22
         18.2     Contractual Authority..........................................................................   22
         18.3     Further Actions................................................................................   22

ARTICLE 19 MISCELLANEOUS.........................................................................................   23
         19.1     Restrictions as to Employees...................................................................   23
         19.2     Notices........................................................................................   23
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         19.3     Entire Agreement...............................................................................   23
         19.4     Assignment.....................................................................................   24
         19.5     Survival.......................................................................................   24
         19.6     Outside Businesses.............................................................................   24
         19.7     Exhibits.......................................................................................   24
         19.8     Construction and Interpretation of Agreement...................................................   24
         19.9     Specific Performance...........................................................................   25
         19.10    Amendment and Waiver...........................................................................   25
         19.11    Severability...................................................................................   25
         19.12    Binding Contract...............................................................................   25
         19.13    Governing Document.............................................................................   25
         19.14    Approvals Reasonable...........................................................................   25
         19.15    Use of Name....................................................................................   26
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         EXHIBITS

         Exhibit A             Description of Real Property [Section 1.23]

         Exhibit B             Owner's Insurance Requirements [Section 9.1]

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                              MANAGEMENT AGREEMENT

         THIS MANAGEMENT AGREEMENT ("Agreement"), made and entered into as of
the 21st day of March, 2003, by and between Sardy House, LLC, a Colorado limited
liability company ("Owner"), Block 66, LLC, a Colorado corporation ("Operator"),
is as follows:

                                   WITNESSETH

         WHEREAS, Owner is the present owner of the historic Victorian home, the
carriage house, grounds and other amenities located in Aspen, Colorado, commonly
referred to as the Sardy House (as more fully defined and described below, the
"Property") and

         WHEREAS, the Property contains certain private residence, lodging and
recreational facilities including but not limited to a seven bedroom main house,
which also includes several other formal and informal living and dining spaces,
and a eight-room lodging facility known as the "Carriage House Inn;" and

         WHEREAS, the Property facilities also include all fixtures, equipment,
furniture and operating inventories associated with the operation of the
Property; and

         WHEREAS, Operator has the expertise to manage the Property in a manner
consistent with the objectives and operating standards of Owners.

         NOW THEREFORE, for and in consideration of the mutual covenants,
promises and agreements contained herein and for other valuable consideration,
the sufficiency and receipt of which are hereby acknowledged, the parties
hereto, each intending to be legally bound, do hereby agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

1.1      ADVISORY COMMITTEE

         The terms "Advisory Committee", Approval of the Advisory Committee",
and "Committee Member" shall have the meanings set forth in the Operating
Agreement."

1.2      ANNUAL OPERATIONS BUDGET

         The term "Annual Operations Budget" shall have the meaning set forth in
Paragraph 4.2.1.1.

1.3      CAPITAL RESERVE

         The term "Capital Reserve" shall mean those amounts at any given time
allocated as determined by Owner and agreed to by Operator to an account for
replacements to property and equipment within and to the Property.

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1.4      CARRIAGE HOUSE INN

         Means the eight-room lodging facility, excluding the Carriage House
Residence, located on the Real Property apart from the Main Residence.

1.5      COMMENCEMENT DATE

         The term "Commencement Date" shall mean the effective date of this
Agreement, which is the date on which Owner acquires the Property pursuant to
the Purchase Agreement of even date herewith between North and South Aspen, LLC
and Owner.

1.6      EXCLUSIVE WEEKS

         Means a period of seven consecutive days during which a Member has
exclusive possession, occupancy and right to use a Residence pursuant to the
Operating Agreement.

1.7      FINANCIAL STATEMENTS

         The term "Financial Statements" shall mean a balance sheet of the Owner
as of the close of a fiscal period and statements of income and expense of the
Property (including Gross Receipts and Operating Expenses) for that portion of
the Fiscal Year then ended, applied on a basis consistent with that of the
preceding period or containing disclosure of the effect on the financial
position or results of operation of any change during the period.

1.8      FISCAL QUARTER

         The term "Fiscal Quarter" shall mean a fourth of a Fiscal Year. There
shall be four (4) Fiscal Quarters in each Fiscal Year, each of which shall
consist of three (3) months.

1.9      FISCAL YEAR

         The term "Fiscal Year" shall mean a period commencing on April 1 and
ending March 31.

1.10     GROSS RECEIPTS

         The term "Gross Receipts" shall mean all receipts related to or derived
from the operation of the Property on or after the Commencement Date, and shall
include, but shall not be limited to, room rentals, equipment rental fees, and
all other usage fees for any facility or equipment located on the Property,
income, derived from the investment of Gross Receipts, the amount of all sales
(wholesale or retail) of food, beverages, goods, wares or merchandise on, at or
from the Property, or for services of any nature performed on, at or from the
Property, determined in accordance with generally accepted hotel accounting
principles applied on a consistent basis. Any of the above provisions resulting
in a double inclusion into Gross Receipts shall be allowed as an inclusion only
once. Gross Receipts shall be reduced by any refunds, rebates, discounts and
credits of a similar nature given, paid or returned by Operator or Owner in the
course of obtaining such Gross Receipts. Gross Receipts shall not include any
revenues for services performed before the Commencement Date or from accounts
receivable existing prior to the

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Commencement Date (except for prepaid items which shall be included as
recognized on accrual basis).

         Gross Receipts shall not include:

         1.10.1.  Applicable gross receipts, taxes, admission, cabaret, excise,
sales and use taxes, or similar governmental charges collected directly from
customers, members or their guests or as a part of the sales price of any goods
or services.

         1.10.2.  Income and revenues of licensees and concessionaires of
Operator from the Property or any part thereof; provided, however, that all
commissions, percentages or other payments received or earned by Operator from
any licensee or concessionaire shall be included in Gross Receipts.

         1.10.3.  Service charges, which are defined to mean percentage
gratuities added to customer or member billings as compensation to Operator's
employees.

         1.10.4.  Proceeds of borrowings by Owner.

         1.10.5.  Proceeds paid as a result of an insurable loss, unless paid
for the loss or interruption of business, provided such sums are used
exclusively to remedy said losses.

         1.10.6.  Owner's Advances.

         1.10.7.  Any assessments paid by Owner Members to fund expenses of the
Lodge or Owner pursuant to the Operating Agreement.

         Any of the above provisions resulting in a double exclusion from Gross
Receipts shall be allowed as an exclusion only once.

1.11     IMPROVEMENTS

         The term "Improvements" shall mean the improvements, structures and
fixtures placed, constructed or installed on the Real Property, and any
additions or subsequent modifications thereto.

1.12     INTANGIBLE PROPERTY

         The term "Intangible Property" shall mean all intangible property or
rights owned or held by Owner in connection with the Property, including, but
not limited to, security deposits, prepaid rents, liquor and operating licenses
and all trademarks related to the Property.

1.13     MANAGEMENT FEE

         The term "Management Fee" shall collectively mean (i) the Operator Fee,
(ii) the Incentive Fee; and (iii) the Leasing Fee.

                                       3

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1.14     MEMBER OWNERS

         The term "Member Owners" shall mean the holders of membership interests
in the Owner, who are entitled to reserve the Residences for themselves, their
families and their guests for Exclusive Weeks in accordance with the Operating
Agreement.

1.15     OPERATING AGREEMENT

         The term "Operating Agreement" shall mean the Operating Agreement, as
amended from time to time, governing Owner.

1.16     OPERATING EXPENSES

         The term "Operating Expenses" shall mean those necessary or reasonable
operating expenses incurred on behalf of Owner on an accrual basis on or after
the Commencement Date in connection with the normal course of conducting and
operating the business affairs of the Property, including, but not limited to,
the following items:

         1.16.1.  Salaries, wages, employee benefits and payroll expenses,
including payroll taxes, approved profit sharing programs and insurance of all
employees to the extent employed exclusively on-site in the direct operation of
the Property (regardless of whether employed by Owner, Operator or an affiliate
of Operator), excluding, however, service charges, which are defined as
percentage gratuities added to customer billing and paid to employees.

         1.16.2.  Marketing, advertising and promotional expenses, including
without limitation, travel agent and credit card commissions.

         1.16.3.  Housekeeping, laundry, cleaning and rental charges for
uniforms and linen and all other operational charges related to the room and
cottage operations.

         1.16.4.  Replacement of inventories of maintenance parts and supplies,
food stores and bar supplies.

         1.16.5.  Replacement of broken, lost or damaged silver, chinaware,
glassware, cooking utensils and other similar items of equipment.

         1.16.6.  Office supplies, postage, printing, routine office expenses
and accounting services incurred in the on-site operation of the Property.

         1.16.7.  The costs of entertainment at any of the dining or lounge
facilities included in the Property.

         1.16.8.  Reasonable travel expenses of on-site employees incurred
exclusively in connection with the business of the Property.

         1.16.9.  Accrual of a reserve for insurance and property taxes
(exclusive of any federal, state or local income taxes) each Fiscal Month in an
amount or at a rate that is sufficient to pay such insurance premiums or
property taxes when they become due and payable.

                                       4

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         1.16.10. Insurance premiums and property taxes, to the extent not
provided for in the reserve established therefore which are due and payable on
or after the Commencement Date.

         1.16.11. The amount credited to the Capital Reserve, as permitted
herein.

         1.16.12. Accounts receivable previously included within Gross Receipts,
to the extent they remain unpaid ninety (90) days after the first billing.

         1.16.13. Auditing, tax filing and reporting costs, account costs,
computer fees and legal fees incurred in respect of the operation of the
Property.

         1.16.14. Costs incurred for utilities, including, but not limited to,
all electric, gas and water costs, and any other private utility charges
incurred in connection with the operation of the Property.

         1.16.15. Lease payments on any item of furniture, fixtures or equipment
utilized in the operation of the Property.

         1.16.16. The amount to be retained for purposes of maintaining the
Working Capital at the level of the Property.

         1.16.17. Management Fees.

         1.16.18. The Operator Overhead Allocation and any reasonable
out-of-pocket expenses incurred by Operator in providing the services under the
terms of this Agreement.

         Any of the above provisions resulting in a double deduction as an
Operating Expense shall be allowed as a deduction only once. Operating Expenses
shall not include (i) depreciation or amortization, (ii) principal and interest
payments on any indebtedness, (iii) rental or lease payments for major items of
furniture, fixtures or equipment, acquired in the future, which, in accordance
with generally accepted accounting principles, are purchased and capitalized as
fixed assets which constitute a substantial increase in the operating budget,
and (iv) all costs associated with the sale of ownership interests in the Owner.

1.17     OPERATOR OVERHEAD ALLOCATION

         The term "Operator Overhead Allocation" shall mean the amount to be
paid to Operator pursuant to Section 6.2 hereof representing an allocation of
Operator's Overhead.

1.18     OPERATOR'S OVERHEAD

         The term "Operator's Overhead" shall mean Operator's office expenses
related, office space, supplies, equipment, utilities, overhead, photocopy and
other reasonable expenses incurred by personnel used for Property operations in
the performance of their duties (but not wages, salaries or employee benefits).

                                       5

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1.19     OPERATOR FEE

         The term "Operator Fee" shall mean the amount to be paid to Operator
pursuant to Section 6.1.1 hereof.

1.20     OWNER'S ADVANCES

         The term "Owner's Advances" shall have the meanings set forth in
Paragraph 5.2. "Dues" has the same meaning as the term "Operating Contributions"
under the Operating Agreement.

1.21     PERSONAL PROPERTY

         The term "Personal Property" shall mean all equipment, machinery,
vehicles, fixtures, furnishings, accessories, and other tangible personal
property placed or installed, or to be placed or installed, on or about the Real
Property and used as a part of or in connection with the operation of the
Property.

1.22     PROPERTY

         The term "Property" shall mean the Residences, the Carriage House Inn
and the recreational amenities associated therewith, with the Residences to be
operated primarily for the benefit of the Member Owners and their guests and the
Carriage House Inn to be operated primarily as a trade or business, consisting
of (i) the Improvements, (ii) the Intangible Property, (iii) the Personal
Property, and (iv) the Real Property, owned by Owner and to be managed by
Operator pursuant to the terms of this Agreement.

1.23     REAL PROPERTY

         The term "Real Property" shall mean that certain parcel or parcels of
land located in Pitkin County, Colorado upon which the Improvements are located,
as further described in Exhibit A attached hereto.

1.24     RESIDENCES

         Means either and both (a) the Main Residence, and (b) the Carriage
House Residence. The "Main Residence" is the original Jack Atkinson home, as
renovated since 1892, which includes seven bedrooms, each with private baths,
formal and informal living and dining spaces, an open "family" kitchen, the
library, an executive office suite, a media room, and an exercise room. The
"Carriage House Residence" means the two-level suite in the Carriage House Inn,
which is a separate structure from the Main Residence. The Carriage House
Residence includes a first floor private entrance into a living room, dining
room and kitchen with spiral stairs leading to a second floor single bedroom,
two baths and dressing/sitting room with sofa bed.

1.25     TERM

         The term "Term" shall mean the period beginning on the Commencement
Date and ending June 30, 2006.

                                       6

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1.26     WORKING CAPITAL

         The term "Working Capital" shall mean funds which are reasonably
necessary, as established annually by Operator and approved for Owner (which
approval shall not be unreasonably withheld), to be maintained for the
day-to-day operation of the Property, including, without limitation, Operating
Expenses, amounts sufficient for the maintenance of required operating banking
account balances, the timely payment of necessary receivables, payrolls,
Management Fees, and the funds required to maintain inventories and supplies at
their proper levels.

                                    ARTICLE 2
                                      TERM

         The Term of this Agreement shall commence on the Commencement Date and
end on June 30, 2006.

                                    ARTICLE 3
                             APPOINTMENT OF OPERATOR

         Owner hereby appoints, hires and employs Operator, as Owner's exclusive
agent, to supervise, manage, direct, lease and operate the Residences, the
Carriage House Inn and the other Property during the Term of this Agreement and
Operator hereby accepts said appointment and assignment upon and subject to the
terms, conditions, covenants and provisions set forth herein and set forth in
the Operating Agreement. Operator may delegate to one or more consultants any of
the powers and duties of Operator hereunder and under the Operating Agreement,
as Operator determines in its sole discretion.

                                    ARTICLE 4
                      SPECIFIC RESPONSIBILITIES OF OPERATOR

4.1      MARKETING AND PROMOTION

         Operator shall develop a marketing program for public lodging at the
Carriage House Inn and for leasing to persons other than Member Owners for use
of the Residences when not used by Members Owners, for Owner's review and
approval that will provide a high-quality image for the Property consistent with
the current image of the Property and the standards of the Owner. Such
responsibilities would include, but would not be limited to, the following:

         4.1.1.   At least annually, develop and submit to the Advisory
Committee for Approval by the Advisory Committee a general business plan for the
Property.

         4.1.2.   If requested by the Advisory Committee, provide advice on the
structure, marketing and policies of specific marketing/sales programs.

                                       7

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4.2      FINANCIAL MANAGEMENT AND BUDGETS

         Operator shall, by and through its accountants and other financial
consultants maintain all books, records and other data associated with the
financial operations of the Property (the cost of which shall be an Operating
Expense); shall prepare all operating budgets, cash flow budgets and other
financial projections and forecasts; and shall be responsible for the day-to-day
financial affairs of the Property.

         4.2.1.   Budgets. All budgets, as hereinafter set forth, shall be
submitted to the Advisory Committee for review and comment and shall include a
projected statement of operation, a projected cash flow an a projection of
expenditures anticipated for the period. All budgets shall be presented in
reasonable detail and in a format similar to that utilized by Operator for the
Property prior to the Commencement Date.

                  4.2.1.1  Annual Operations Budget. Operator shall prepare an
initial annual operations budget setting forth the projected costs associated
with the operations of the Property for the balance of the Fiscal Year (the
"Annual Operations Budget") and submit same to the Advisory Committee for its
approval, and for ratification by the Member Owners. In addition, on or before
November 30 of each year, Operator shall submit to the Advisory Committee, for
its approval and for ratification by the Member Owners, the proposed Annual
Operations Budget for the next Fiscal Year.

                  4.2.1.2  Management Reports. The Operator shall cause to be
prepared and delivered at least annually to the Advisory Committee management
reports relating to the Residences including, but not limited to, cash flow
analyses, capital expenditures budgets, occupancy and use reports, operating
expense reports and such other items as may be necessary or desirable in
connection with the management of the Residences or as the Advisory Committee
may reasonably request.

                  4.2.1.3  Owner's Review of Budgets and Reports. The budgets
and reports to be submitted herein shall be submitted to the to the Advisory
Committee for its approval, and for ratification by the Member Owners for
guidance, direction and advice to the Operator. Final approval of the Annual
Operations Budget shall be Owner's responsibility, subject to the terms and
conditions of this Agreement. The Advisory Committee shall give its comments
and/or approval within thirty (30) days after receiving the Annual Operations
Budget from Operator and the meeting for ratification of the Annual Operations
Budget by the Member Owners shall be set no later than 60 days after Advisory
Committee approval. In the event a proposed Annual Operations Budget is not
approved, the budget last verified by the Members Owners continues until such
time as the Member Owners ratify a subsequent Annual Operations Budget approved
by the Advisory Committee.

         4.2.2.   Expenditures in Excess of Budget. Owner agrees that these
operating and capital budgets are intended to be reasonable estimates, and,
accordingly, Operator shall be entitled to increase these budgets to cover any
expenditures that were unanticipated at the time of preparation of these budgets
but are reasonable and necessary to carry out the provisions of this Agreement.
Operator, for and on behalf of and at Owner's expense, is authorized to take all
action deemed necessary by Operator to implement, perform or cause the
performance of the

                                       8

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items set forth in these budgets. Owner acknowledges that Operator has not made
any guarantee, warranty or representation of any nature concerning or related to
the amounts of Gross Receipts or Operating Expenses to be generated or incurred
from the operation of the Property during the Term of this Agreement by
Operator. Owner acknowledges that all budgets are intended only to be reasonable
estimates. Operator agrees to obtain the Advisory Committee's prior written
consent for any increase in expenditure for any capital expenditure line item,
which is $10,000.00 or more in excess of the budgeted line item, or any
anticipated cost overruns in fixed costs such as travel, budgeted payroll costs,
advertising, marketing, repair and maintenance costs which are $10,000.00 or
more in excess of the budgeted line item. Operator will notify the Advisory
Committee as soon as reasonably possible of any actual "significant" variance in
the budgeted monthly income or expenses for any department, and will provide an
explanation of the reason for the variance and measures being taken in response
to it. Any variance which exceeds the monthly budgeted total departmental amount
for that department by ten percent (10%) or more will be deemed "significant" as
said term is used herein. Further, Operator may reallocate all or any portion of
any amount budgeted with respect to any one item in the budget to another item
budgeted therein, provided the overall budget is not affected by such
reallocation.

                  4.2.2.1  Accounting Records and Reporting. Operator agrees
that during the Term of this Agreement, it will maintain efficient and accurate
account records. Within ninety (90) days after the close of each Fiscal Year,
Operator shall submit to the Advisory Committee, Financial Statements for the
Fiscal Year then ended.

         4.2.3.   Inspection during the Term of this Agreement. Member Owners
(or their duly appointed agents) shall have the right, after notice to Operator,
to inspect the books, records, invoices, deposits, canceled checks or other
financial data or transactions of Operator related to the Property, at
reasonable times and during normal business hours. After termination, all such
books and records relating to the Property shall belong to the Owner, with the
exception of all original payroll records of Operator for Operator's employees
and Operator's Overhead, which Operator shall retain. Copies of said records
shall be available to the Advisory Committee's upon request.

4.3      GENERAL MANAGEMENT DUTIES

         To the extent of available Gross Receipts and Owner's Advances, the
Operator shall operate the Property in the same manner as is customary and usual
in the operation of comparable facilities, shall provide such services as are
customarily provided by operators of a private residence club and lodge of
comparable class and standard with comparable charges and fees consistent with
the Property's facilities, and keep the Advisory Committee advised as to all
material policy matters within the knowledge of Operator and affecting the
Property. The standard of operation and service shall be at least the level of
current operations and service, except that the level of staffing may be less
than current staffing levels during periods when occupancy levels are low, as
determined by Operator, due to a Member Owner having exclusive use of the
Residences during such period. Notwithstanding any provisions to the contrary,
Operator will make no major policy changes not reflected in the budgets without
the prior approval of the Advisory Committee nor change any rights or privileges
of Member Owners or their guests to use the Residences, except in accordance
with the Operating Agreement. Except as otherwise required by this Agreement, or
except to the extent that significant policy decisions

                                       9

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are involved, Operator shall have all reasonable discretion in the day-to-day
operating decisions relating to the operation, direction, management and
supervision of the Property, including without limitation, labor matters, credit
collection and cash management, terms of admittance, charges for rooms, guest
services, entertainment and amusement, food and beverages, purchasing of
Operating Equipment and operating supplies, maintenance of the Property, repairs
to and replacements of furnishings and equipment, employee compensation and
benefits, and shall work in coordination with the Advisory Committee regarding
all phases of advertising, promotion, publicity, marketing and leasing strategy
relating to the Residences and the Carriage House Inn.

4.4      SPECIFIC MANAGEMENT DUTIES

         Subject to the provisions and limitations contained herein, Operator
shall have the duty and authority to perform any act that is necessary in the
opinion of Operator to operate and manage the Residences and the other Property
on behalf and for the account of Owner, including, but not limited to, the
following (the costs of which shall be deemed an item of Operating Expense):

         4.4.1.   Employees. Operator shall hire, promote, discharge and
supervise, under Operator's service, the General Manager, Guest Services
Manager, the Maintenance Manager (and determine to eliminate any of such
positions), any other department heads and all ancillary and supportive
employees performing services in and about the Property. All of the employees of
the Residences and the Carriage House Inn, shall be employees of Operator or its
affiliates. Owner shall not be liable to Operator or to others for any act or
omission on the part of such employees unless Owner has been guilty of gross
negligence or willful misconduct.

         4.4.2.   Service Agreements. Operator shall negotiate and consummate,
for the account of Owner, such agreements as Operator may deem necessary or
advisable for the furnishing of all utilities, services, concessions and
supplies for the maintenance and operation of the Property.

         4.4.3.   Purchases. Operator shall have the responsibility and
authority to purchase such food, beverages, equipment, operating supplies, and
other materials and supplies as Operator determines are needed from time to time
for the maintenance and operations of the Property. Operator shall provide
complete concepts for all food and beverage areas, including operational plans,
menus, wine lists and receipts, as well as food and beverage control systems.

         4.4.4.   Repairs. Operator shall have the responsibility and authority
to make, install or cause to be installed as an item of Operating Expense all
necessary and proper repairs and replacements in and to the Property, and the
furnishings and equipment, in order to keep and maintain the same in good
repair, working order and condition and outfitted and equipped for the proper
operation thereof in accordance with standards set forth herein; provided,
however, Operator may not make any changes to the exterior structure of the
Improvements nor any discretionary maintenance in excess of $10,000 without the
prior written approval of Owner.

         4.4.5.   Reservation Services. Operator shall develop, implement,
manage, and supervise a reservation system for the Residences and the Carriage
House Inn, consistent with the Operating Agreement pursuant to which Member
Owners may reserve the Residences and for themselves and their guests, and other
persons may reserve a room at the Carriage House Inn.

                                       10

<PAGE>

         4.4.6.   Licenses, Permits and Accreditations. Operator shall apply
for, obtain and maintain, in Operator's name or Owner's name as determined by
Operator, all licenses, permits and accreditations required in connection with
the management and operation of the Property. Owner will cooperate with Operator
in apply for, obtaining and maintaining such licenses, permits and
accreditations.

         4.4.7.   Legal Action. Operator shall have the responsibility and
authority to retain an attorney and shall institute (after securing the approval
of Owner) in its own name or in the name of Owner, any and all legal actions or
proceedings to collect charges, rents or other income for the Property, or
lawfully cancel, modify or terminate any lease, license or concession agreement
for the breach thereof or default thereunder by the tenant or licensee or
concessionaire.

         4.4.8.   Food and Beverage. Operator will develop, implement, and
manage all food and beverage operating concepts. Operator will determine all
menu items and will periodically update the master recipe files. Operator will
monitor the alcohol management programs and make all uniform selections.

         4.4.9.   Bank Accounts. Operator shall establish in Owner's name such
bank accounts at such banks as approved by Owner and as are required by Operator
for the operation and maintenance of the Property according to generally
accepted hotel accounting principles. Operator shall have sole control of said
bank accounts and the funds deposited therein. The records and bank statements
shall be subject to Owner's inspection pursuant to the terms recited herein.
Owner acknowledges and agrees that all Gross Receipts and Operating Expenses of
the Property shall be collected, received, handled and expended exclusively by
Operator through such accounts. Operator shall be authorized to withdraw and
write checks on all Owner's bank accounts; except any check or withdrawal in
excess of $50,000 shall require the co-signature of the Member of the Advisory
Committee.

         4.4.10.  Operator Advances. Operator shall not be obligated to advance
any of its own funds to or for the account of Owner or for any Operating
Expenses or other expenses of Owner, nor to incur any liability on behalf of
Owner unless Owner shall have furnished Operator with funds necessary for the
discharge thereof. However, if Operator shall for any reason have advanced funds
in payment of Operating Expenses or other expenses of Owner in the maintenance
and operation of the Property, Owner shall reimburse Operator on demand for such
authorized payments.

4.5      EMERGENCY EXPENDITURES

         In the event that a condition should exist in, on or about the Property
of an emergency nature, including structural repairs, which requires immediate
repairs to preserve and protect the Property and assure its continued operation
and to protect the customer, guests, members or employees, Operator, on behalf
of and at the expense of Owner, is authorized to take all steps and to make all
expenditures necessary to repair and correct any such condition, whether or not
provisions have been made in the applicable budgets for any such emergency
expenditures, provided such emergency expenditures shall not exceed $25,000
without the Owner's prior consent.

                                       11

<PAGE>

4.6      EXPENDITURES REQUIRED FOR COMPLIANCE WITH LAW

         In the event that at any time during the Term of this Agreement
repairs, additions, changes or corrections in the Improvements of any nature
shall be required by reason of any laws, ordinances, rules or regulations now or
hereafter in force, or by order of any governmental or municipal power,
department, agency, authority or officer, such repairs, additions, changes or
corrections shall be made at the direction of Operator, and shall be paid for by
Owner. Any such repairs, additions, changes or corrections, to the extent
practicable, shall be accomplished with as little hindrance to the operation of
the Improvements as possible.

                                    ARTICLE 5
                        GENERAL RESPONSIBILITIES OF OWNER

5.1      IMPROVEMENTS AND PERSONAL PROPERTY

         It is the intention of the parties that Owner will provide the
Improvements and Personal Property necessary to operate the Property to the high
quality standards recited herein. Therefore, Owner hereby agrees, at its
expense, to (i) construct any additional improvements, renovations or
reconfigurations deemed necessary by Owner and Operator for the development and
operation of the Property, (ii) to furnish and equip same with the Personal
Property, and provide any additional furniture, fixtures and equipment required
for the operation of the Property, and (iii) to obtain and/or maintain all
certificates of occupancy or other permits required for Operator to operate the
Property. Both parties acknowledge that the funds allocated to the Capital
Reserve shall be utilized first for additional repair and replacement
expenditures to the Improvements and the Personal Property, and then for
additional improvements. However, Owner acknowledges that it is responsible for
all reasonable and necessary capital expenditures required for or on behalf of
the Property if such expenditures have not been contemplated in an approved
budget prepared by Operator in accordance with the provisions hereof and/or if
there are insufficient funds in the Capital Reserve or insufficient Gross
Receipts, Owner shall fund the costs required for said repairs, maintenance and
capital expenditures as part of Owner's Advances.

5.2      OWNER'S ADVANCES

         Owner shall be required to advance funds to Operator to conduct the
affairs and maintain Property (hereinafter referred to as "Owner's Advances") as
provided hereunder.

         5.2.1.   Working Capital and Capital Reserves. On an annual basis and
within fifteen (15) days of receipt of written notice from Operator, Owner shall
present Operator with Owner's Advances adequate to cover the Working Capital and
Capital Reserves requirements for the Property, if required by Operator, in
connection with the ongoing operation and improvement of the Property.

         5.2.2.   Revenue Deficits. For any month in which the Gross Receipts or
the proceeds of borrowings by Owner made available to Operator to fund Working
Capital requirements is projected to be insufficient to cover Working Capital
requirements, Owner shall, on a monthly

                                       12

<PAGE>

basis and upon fifteen (15) days receipt of notice from Operator, remit to
Operator Owner's Advances in the amount of the estimated deficiency.

                                    ARTICLE 6
                          MANAGEMENT FEES AND EXPENSES

6.1      MANAGEMENT FEES

         During the period in which this Agreement is in effect, Owner shall pay
the following management fees:

         6.1.1.   Operator Fee. Owner shall pay to Operator an Operator Fee
equal to $45,000.00 per year for rendering the management services in accordance
with the terms and conditions of this Agreement; payable monthly in advance as
follows: (i) $3,750.00 on November 1, 2003, and (ii) $3,750.00 on the first day
of each next month until the end of the Term. Of the monthly Operator Fees,
$1,667 is allocated to services in managing the Residences and $2,083 is
allocated to services in managing the Carriage House Inn.

         6.1.2.   Incentive Fee. Owner shall pay to Operator an Incentive Fee
equal to (i) ten percent (10%) of the Gross Receipts, plus (ii) ten percent
(10%) of those Gross Receipts in excess of the projected income as shown on the
Annual Operations Budget from Carriage House Inn room rental and other guest
charges. Item (i) of the Incentive Fees will be paid monthly on or before the
20th day of each month based on Gross Receipts received in the preceding month.
Item (ii) of the Incentive Fees will be paid annually on or before 90 days after
the close of each Fiscal Year.

         6.1.3.   Leasing Fee. Owner shall pay to Operator a Leasing Fee equal
to (i) forty percent (40%) of the gross rental revenue received from leasing a
Residence for a Member Owner, if the occupant was not procured by the Member
Owner, and (ii) thirty percent (30%) of the gross rental revenue received from
leasing a Residence for a Member Owner, if the Member Owner procured the
occupant. Gross rental revenues exclude state and local taxes and similar
government charges applicable to lodging or short-term occupancy and also
exclude incidental charges incurred by the occupant. Operator shall be
responsible for all housekeeping fees and travel agent commissions incurred in
connection with leasing the Residences. Leasing Fees will be paid monthly on or
before the 20th day of each month based on the total gross rental revenue
received in the preceding month.

6.2      OPERATOR OVERHEAD ALLOCATION

         The parties acknowledge that Operator shall be providing a portion of
the management services set forth herein at its office and by use of Operator's
office equipment and supplies. In order to compensate Operator for use of
Operator's office, equipment, and supplies in Operator rendering the management
services, Owner shall pay to Operator an Operator Overhead Allocation equal to
$12,000.00 per year, payable monthly in advance as follows: (i) $1,000.00 on
April 1, 2003, and (ii) $1,000.00 on the first day of each next month until the
end of the Term.

                                       13

<PAGE>

6.3      OUT-OF-POCKET EXPENSES

         In addition to the fees and reimbursement recited in Paragraphs 6.1 and
6.2 payable to Operator and subject to the provisions of Article 4, it is agreed
to that Owner shall reimburse Operator for all actual out-of-pocket costs
incurred by Operator in the performance of this Agreement, other than Operator's
Overhead. Reimbursable costs shall include, but shall not be limited to,
reasonable travel, entertainment, costs of marketing and promotion (including
applicable travel agent commissions) and other incidental expenses. It is agreed
that Operator shall be entitled to reimbursement of these expenses directly from
the Gross Receipts, subject to provisions of Article 4.

                                    ARTICLE 7
                      OWNER'S COVENANTS AND REPRESENTATIONS

         Owner makes the following representations to Operator, which
representations shall, unless otherwise stated herein, survive the execution and
delivery of this Agreement and the Commencement Date:

         7.1.1.   Corporate Status. Owner is a Colorado limited liability
company, duly organized, validly existing and in good standing under the laws of
the State of Colorado with full power and authority to enter into this
Agreement.

         7.1.2.   Authorization. The making, execution, delivery and performance
of this Agreement by Owner has been duly authorized and approved by all
requisite action of the Members of the Company, and this Agreement has been duly
executed and delivered by Owner and constitutes a valid and binding obligation
of Owner, enforceable in accordance with its terms.

         7.1.3.   Litigation, Claims or Proceedings. There are no existing or
pending actions, suits, litigation, claims, proceedings or governmental
investigations with respect to any aspect of any of the Owner or the Property,
nor, to the knowledge of Owner, have any such actions, suits, litigation,
claims, proceedings or governmental investigations been threatened or asserted.

         7.1.4.   Permits. Owner shall cooperate fully with Operator as
necessary to enable Operator, if required by local or state law, to procure
and/or transfer and maintain all licenses, permits or authorizations necessary
for the operation of the Property, including, if applicable, transferring the
existing liquor licenses from Owner.

         7.1.5.   Warranties. Owner will maintain all warranties, guarantees and
maintenance contracts on the equipment and furnishings of the Property and will
endeavor to cause the reimbursement of expenses for maintenance, repair and
replacement, and for labor and materials associated with all warranted or
guaranteed equipment and furnishings utilized in the operation of the Property.

         7.1.6.   Violation of Representations. From and after the date hereof
and until the termination of this Agreement, Owner shall not take any action or
omit to take any action which

                                       14

<PAGE>

would have the effect of violating any of the representations of Owner contained
in this Agreement.

         7.1.7.   Violation of Agreement. Neither the execution and delivery of
this Agreement by Owner nor Owner's performance of its obligations hereunder
will result in a violation or breach of any term or provision or constitute a
default or accelerate the performance required under any other agreement or
document to which Owner is a party or is otherwise bound or to which the
Property, or any part thereof, is subject, and will not constitute a violation
of any law, ruling, regulation or order to which Owner is subject.

         7.1.8.   Documentation. If necessary to carry out the intent of this
Agreement, Owner agrees to execute and provide to Operator, on or after the date
hereof, any and all other instruments, documents, conveyances, assignments and
agreements which Operator may reasonably request in connection with the
operation of the Property.

                                    ARTICLE 8
                    OPERATOR'S COVENANTS AND REPRESENTATIONS

         Operator makes the following representations to Owner, which
representations shall, unless otherwise stated herein, survive the execution and
delivery of this Agreement:

         8.1.1.   Corporate Status. Operator is a limited liability company,
duly organized, validly existing and in good standing under the laws of the
State of Colorado with full power to enter into this Agreement and execute all
documents required hereunder.

         8.1.2.   Authorization. The making, execution, delivery and performance
of this Agreement by Operator has been duly authorized and approved by all
requisite action of the Board of Directors of Operator, and this Agreement has
been duly executed and delivered by Operator and constitutes a valid and binding
obligation of Operator, enforceable in accordance with its terms.

         8.1.3.   Applicable Laws. After the Commencement Date, Operator shall
use its best efforts to comply and cause the Property to comply with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, except where contested in good faith and by proper
proceedings.

         8.1.4.   First Class Condition. To the extent of funds provided in the
Annual Operations Budget and the receipt of sufficient Gross Receipts and
Owner's Advances, Operator agrees to maintain the Property in a first-class
condition in accordance with the standards established by Owner.

         8.1.5.   Bank Accounts. Operator acknowledges that all funds deposited
in the general account, reserve accounts, payroll accounts and any other
accounts to be used in the operation of the Property established by Operator on
behalf of Owner, shall be utilized solely for the payment of Operating Expenses,
Management Fees, and the other fees, charges and amounts recited herein, and
that said accounts will not be pledged, assigned or encumbered by Operator
except with Owner's consent.

                                       15

<PAGE>

         8.1.6.   Violation of Representations. From and after the date hereof
and until the termination of this Agreement, Operator shall not take any action
or omit to take any action which would have the effect of violating any of the
representations of Operator contained in this Agreement.

         8.1.7.   Violation of Agreement. Neither the execution and delivery of
this Agreement by Operator nor Operator's performance of its obligations
hereunder will result in a violation or breach of any term or provision or
constitute a default or accelerate the performance required under any other
agreement or document to which Operator is a party or is otherwise bound or to
which the Property, or any part thereof, is subject, and will not constitute a
violation of any law, ruling, regulation or order to which Operator is subject.

                                    ARTICLE 9
                                    INSURANCE

9.1      INSURANCE

         On the Commencement Date and continuing throughout the Term of this
Agreement, Owner shall procure and maintain with insurance companies licensed to
do business in Colorado, which are reasonably agreeable to Owner and Operator,
such insurance as is described on the attached Exhibit B.

9.2      COST AND EXPENSE, POLICIES AND ENDORSEMENT

         Insurance premiums and any costs or expenses with respect to the
insurance described in this Article 9 shall be Operating Expenses. All liability
policies of insurance provided under this Article 9 shall name Owner as the
named insured and all liability policies of insurance shall name Operator as an
additional insured. Individual Member Owners shall also be named as additional
insureds of the Company's liability policies to the extent reasonably obtainable
at no or minimal cost to the Company. All policies of insurance provided for
under this Article 9 shall, to the extent reasonably obtainable, have attached
thereto a waiver of subrogation of rights endorsement and an endorsement that
such policy shall not be canceled or materially changed without at least thirty
(30) days prior written notice to Owner and Operator.

                                   ARTICLE 10
                             DAMAGE AND CONDEMNATION

10.1     TOTAL DESTRUCTION

         In the event the Property is totally destroyed by fire or other
casualty or damaged by fire or other casualty to the extent that it cannot be
operated as substantially contemplated by this Agreement to the extent that the
property cannot be materially restored with the insurance proceeds and with due
diligence in one hundred twenty (120) days following such event, either party
hereto may terminate this Agreement by written notice to the other party given
within thirty (30) days following such destruction. In the event of termination
of this Agreement pursuant to this Section, this Agreement and the Term hereof
shall cease and come to an end as

                                       16

<PAGE>

of the date of such damage or destruction as though such date were the date
originally fixed for the expiration of the Term of this Agreement, and neither
party shall have any obligation to the other arising out of or in any way
connected with the provisions of this Agreement.

10.2     PARTIAL DESTRUCTION

         In the event the Property is damaged by fire or other casualty, but can
continue to be operated as contemplated by this Agreement, and such damage can
be materially restored with the insurance proceeds, Owner shall have the
obligation to repair the Property as nearly as practical to the condition same
was in prior to such damage. Owner shall cause such repair to be made with all
reasonable dispatch so as to complete the same at the earliest possible date and
shall seek the advice and counsel of Operator as to the allocation and
expenditure of insurance proceeds in connection with any repair and/or
replacement within the Property.

10.3     CONDEMNATION

         10.3.1.  Substantial Condemnation. In the event all or substantially
all of the Property shall be taken in any eminent domain, condemnation,
compulsory acquisition or similar proceeding by any competent authority for any
public or quasi-public use or purpose, or in the event a substantial portion of
the Property shall be so taken, but the result is that it is unreasonable to
continue to operate the Property, then either party shall have the right to
terminate this Agreement upon written notice to the other party within ninety
(90) days of the conclusion of the condemnation proceedings.

         10.3.2.  Partial Condemnation. In the event a portion of the Property
shall be taken by the events described in Paragraph 10.3.1 above above, or is
affected but on a temporary basis, and the result is not to make it unreasonable
to continue to operate the Property, this Agreement shall not terminate;
however, so much of any award for any such partial taking or condemnation as
shall be necessary to render the Property equivalent to its condition prior to
such event shall be used for such purpose.

                                   ARTICLE 11
                                 INDEMNIFICATION

11.1     INDEMNIFICATION

         With respect to third party claims, Operator, its agents and employees,
shall not be liable to Owner or to any other person for any act or omission,
negligent, tortious or otherwise, of any agent or employee of Owner or Operator
in the performance of this Agreement, except this provision will not apply to
any such liability arising from any fraud, willful misconduct or gross
negligence of Operator, its employees or agents. Owner hereby agrees to
indemnify and hold harmless Operator, its agents and employees, from and against
any such liability, loss, damage, cost or expense (including attorneys' fees) by
reason of any such act or omission which is covered as provided in the preceding
two sentences. With respect to claims against each other, each party waives and
releases the other from liability for any act or omission, negligent, or
tortious or otherwise, of any agent or employee of either the Owner or the
Operator, causing a loss covered by any insurance to be provided herein; except
this provision will not apply to

                                       17

<PAGE>

claims for breach of this Agreement or any liability arising from any fraud,
willful misconduct or gross negligence.

                                   ARTICLE 12
                                  RIGHT TO CURE

12.1     RIGHT TO CURE

         12.1.1.  Operator's Performance. If after the expiration of any
permitted grace period Operator shall have failed to cure any default in the
performance of any covenant or promise on its part to be performed, Owner may
immediately, or any time thereafter, without further notice, perform the same
for the account and at the expense of Operator. Notwithstanding the above, in
the case of an emergency, Owner may, after notice to Operator, so perform in
Operator's stead prior to the expiration of any applicable grace period;
provided, however, Operator shall not be deemed in default under this Agreement.

         12.1.2.  Owner's Performance. If after the expiration of any permitted
grace period Owner shall have failed to cure any default in the performance of
any covenant or promise on its part to be performed, Operator may immediately,
or any time thereafter, without further notice, perform the same for the account
and at the expense of Owner. Notwithstanding the above, in the case of an
emergency, Operator may, after notice to Owner, so perform in Owner's stead
prior to the expiration of any applicable grace period; provided, however, Owner
shall not be deemed in default under this Agreement.

                                   ARTICLE 13
                                   ASSIGNMENT

13.1     SALE OR ASSIGNMENT

         13.1.1.  Operator. Operator shall not assign or permit an assignment by
operation of law of this Agreement or any interest hereunder except to an
affiliate of Operator, without the prior written approval of Owner, which
approval may be withheld at Owner's sole discretion.

         13.1.2.  Owner. Owner shall not assign or permit an assignment by
operation of law of this Agreement or any interest hereunder without the prior
written approval of Operator, which approval may be withheld at Operator's sole
discretion.

13.2     EFFECT OF ASSIGNMENT

         In the event either party consents to an assignment of this Agreement
by the other, no further assignment shall be made without the express consent in
writing of such other party, unless such assignment may otherwise be made
without such consent pursuant to the terms of this Agreement. Any other
assignment by either Owner or Operator of its interest in this Agreement shall
not relieve Owner or Operator, as the case may be, from their respective
obligations under this Agreement, and shall inure to the benefit of and be
binding upon their respective successors, heirs, legal representatives or
assigns.

                                       18

<PAGE>

                                   ARTICLE 14
                                EVENTS OF DEFAULT

         The occurrence of any one or more of the following events which is not
cured in the time permitted shall constitute default under this Agreement
(hereinafter referred to as a "Default" or an "Event of Default"):

         14.1.1.  Operator's Default. If Operator shall fail in the performance
of or compliance with any of the covenants, agreements, terms or conditions
contained in this Agreement and such failure shall continue for a period of
fifteen (15) days after written notice thereof from Owner to Operator specifying
in detail the nature of such failure, or, in the case such failure cannot with
due diligence be cured within such period of fifteen (15) days, if Operator
fails to proceed promptly and with all due diligence to cure the same and
thereafter to prosecute the curing of such failure with all due diligence (it
being intended that in connection with a failure not susceptible of being cured
with due diligence within fifteen (15) days that the time within which to cure
the same shall be extended for such period as may be necessary to complete the
same with all due diligence).

         14.1.2.  Owner's Default. If Owner shall fail in the performance of or
compliance with any of the covenants, agreements, terms or conditions contained
in this Agreement and such failure shall continue for a period of fifteen (15)
days after written notice thereof from Operator to Owner specifying in detail
the nature of such failure, or, in the case such failure cannot with due
diligence be cured within such period of fifteen (15) days, if Owner fails to
proceed promptly and with all due diligence to cure the same and thereafter to
prosecute the curing of such failure with all due diligence (it being intended
that in connection with a failure not susceptible of being cured with due
diligence within fifteen (15) days that the time within which to cure the same
shall be extended for such period as may be necessary to complete the same with
all due diligence).

         14.1.3.  Bankruptcy. Any party (i) applying for or consenting to the
appointment of a receiver, trustee or liquidator of itself or any of its
property, (ii) being unable to pay its debt as they mature or admitting in
writing its inability to pay its debts as they mature, (iii) making a general
assignment for the benefit of creditors, (iv) being adjudicated a bankrupt or
insolvent, or (v) filing a voluntary petition in bankruptcy or a petition or an
answer seeking reorganization or an arrangement with creditors, or taking
advantage of any bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation law or statute, or admitting the material allegations
of a petition filed against it in any proceedings under any such law, or if any
action shall be taken by Operator or Owner for the purpose of effecting any of
the foregoing.

         14.1.4.  Reorganization, Receiver. An order, judgment or decree being
entered without the application, approval or consent of the party by any court
of competent jurisdiction approving a petition seeking reorganization of
Operator or Owner or appointing a receiver, trustee or liquidator of Operator or
Owner or of all or a substantial part of any of the assets of Operator or Owner
and such order, judgment or decree continuing unstayed and in effect for a
period of ninety (90) days from the date of entry thereof.

                                       19

<PAGE>

                                   ARTICLE 15
                                    REMEDIES

15.1     OWNER'S REMEDIES

         Upon the occurrence of a Default by Operator hereunder which is not
cured within the time permitted, Owner shall be entitled to:

         15.1.1.  Specific performance of Operator's obligations hereunder and
injunctive relief, as applicable, under the laws of Colorado.

         15.1.2.  Demand payment of all amounts due Owner under the terms of
this Agreement and demand the payment of all costs, damages, expenses and
reasonable attorney's fees of Owner due to Operator's default. In the event
Operator fails to pay any amount due Owner, after the applicable cure period,
Owner shall be entitled to interest on the unpaid amount at the statutory
judgment rate permitted under applicable law.

         15.1.3.  Remedy any Default of Operator, and in connection with such
remedy, Owner may pay all expenses and employ counsel, and all sums so expended
or obligations incurred by Owner in connection therewith shall be paid by
Operator to Owner, upon demand by Owner, and on failure of such reimbursement,
Owner may, at Owner's option, deduct all costs and expenses incurred in
connection with remedying a Default of Operator from the next sums subsequently
becoming due to Operator from Owner under the terms of this Agreement.

         15.1.4.  Terminate this Agreement by Owner's written notice of
termination to Operator upon an affirmative vote, in accordance with the
Operating Agreement, of the Member Owners holding a majority of the membership
interests in the Company. Upon receipt of Owner's notice, Operator shall
surrender possession of the Property and all books and records relating thereto
to Owner, except original payroll records of Operator's employees and transfer
all contracts, licenses, unearned accounts receivable, furniture, fixtures and
equipment to Owner and assist in an orderly transfer of the operation to another
management entity or Owner.

         No remedy granted to Owner is intended to be exclusive of any other
remedy herein or by law provided, but each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law, in equity or by statute. No delay or omission of Owner to exercise any
right or power accruing upon any Default shall impair Owner's exercise of any
right or power or shall be construed to be a waiver of any Default or
acquiescence therein.

15.2     OPERATOR'S REMEDIES

         Upon the occurrence of a Default by Owner which is not cured within the
time permitted, Operator shall be entitled to:

         15.2.1.  Specific performance of Owner's obligations hereunder and
injunctive relief, as applicable, under the laws of Colorado.

         15.2.2.  Demand payment of all amounts due Operator under the terms of
this Agreement and demand the payment of all costs, damages, expenses and
reasonable attorney's

                                       20

<PAGE>

fees of Operator due to Owner's default. In the event Owner fails to pay any
amount due Operator, after the applicable cure period, Operator shall be
entitled to interest on the unpaid amount at the statutory judgment rate
permitted under applicable law.

         15.2.3.  Remedy any Default of Owner, and in connection with such
remedy, Operator may pay all expenses and employ counsel, and all sums so
expended or obligations incurred by Operator in connection therewith shall be
paid by Owner to Operator, upon demand by Operator, and on failure of such
reimbursement, Operator may, at Operator's option, deduct all costs and expenses
incurred in connection with remedying a Default of Owner from the next sums
subsequently becoming due to Owner from Operator under the terms of this
Agreement.

         15.2.4.  Terminate this Agreement by Operator's written notice of
termination to Owner.

         No remedy granted to Operator is intended to be exclusive of any other
remedy herein or by law provided, but each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law, in equity or by statute. No delay or omission of Operator to exercise any
right or power accruing upon any Event of Default shall impair Operator's
exercise of any right or power or shall be construed to be a waiver of any
Default or acquiescence therein.

                                   ARTICLE 16
                                   TERMINATION

16.1     EVENTS OF TERMINATION

         The Term of this Agreement shall terminate on the occurrence of any of
the events set forth in Paragraphs 16.1.1 through 16.1.4 below:

         16.1.1.  A Default by Operator which is not cured within the time
permitted and Owner sends Operator a notice of termination for cause following
an affirmative vote, in accordance with the Operating Agreement, of the Member
Owners holding a majority of the membership interests in the Company;

         16.1.2.  A Default by Owner which is not cured within the time
permitted and Operator sends Owner a notice of termination for cause;

         16.1.3.  On the expiration of the Term; or

         16.1.4.  All parties agree in writing to terminate this Agreement.

16.2     EFFECT OF TERMINATION

         Upon termination, all sums owed by either party to the other shall be
paid within thirty (30) days.

                                       21

<PAGE>

                                   ARTICLE 17
                               UNAVOIDABLE DELAYS

         The provisions of this Section shall be applicable if there shall occur
during the Term of this Agreement any (i) strike(s), lockout(s) or labor
dispute(s); (ii) inability to obtain labor or materials, or reasonable
substitutes therefore; (iii) acts of God, governmental restrictions, regulations
or controls, enemy or hostile governmental action, civil commotion, fire or
other casualty; or (iv) other conditions similar to those enumerated in this
Section beyond the reasonable control of the party obligated to perform. If
Operator or Owner shall, as the result of any of the above described events,
fail punctually to perform any obligation on its part to be performed under this
Agreement, then, upon written notice to the other within ten (10) days of such
event, such failure shall be excused and not be a breach of this Agreement by
the party claiming an unavoidable delay, but only to the extent occasioned by
such event. If any right or option of either party to take any action under or
with respect to the Term of this Agreement is conditioned upon the same being
exercised within any prescribed period of time or at or before a named date,
then such prescribed period of time or such named date shall be deemed to be
extended or delayed, as the case may be, upon written notice, as provided above,
for a time equal to the period of the unavoidable delay. Notwithstanding
anything contained herein to the contrary, the provisions of this Article shall
not be applicable to Operator's or Owner's obligation to pay any sums, monies,
costs, charges or expenses required to be paid pursuant to the terms of this
Agreement.

                                   ARTICLE 18
                   RELATIONSHIP, AUTHORITY AND FURTHER ACTIONS

18.1     NO JOINT VENTURE

         Nothing contained herein shall be deemed or construed by the parties
hereto or by any third party as creating the relationship of (i) a partnership,
or (ii) a joint venture between or among any of the parties hereto; it being
understood and agreed that neither any provisions contained herein nor any acts
of the parties hereto shall be deemed to create any relationship between the
parties hereto other than the relationship of owner and operator.

18.2     CONTRACTUAL AUTHORITY

         Operator is authorized to make, enter into and perform, in the name of,
for the account of, on behalf of, and at the expense of Owner, any contracts and
agreements provided for under this Agreement, so long as Operator has complied
with all the requirements of this Agreement with respect to such contracts and
agreements, including, but not limited to, any required consent or approval of
Owner.

18.3     FURTHER ACTIONS

         Owner and Operator agree to execute all contracts, agreements and
documents and to take all actions necessary to comply with the provisions of
this Agreement and the intent hereof.

                                       22

<PAGE>

                                   ARTICLE 19
                                  MISCELLANEOUS

19.1     RESTRICTIONS AS TO EMPLOYEES

         It is agreed that neither party shall seek to contact, entice or
discuss employment with any employee of the other party, nor shall either party
employ or seek to employ any such employee, without first obtaining the consent
of the other party. It is further agreed that this restriction shall survive for
a period of one (1) year following the termination of this Agreement.

19.2     NOTICES

         Any notice, demand or communication required or permitted to be given
hereunder shall be in writing and shall be deemed to have been given when (i)
delivered personally to the party to be notified, (ii) upon receipt if sent by
facsimile or electronic mail (e-mail) or (iii) upon receipt or refusal if sent
by United States mail, postage and charges prepaid, certified with return
receipt requested and addressed as shown below. Delivery by private courier,
including, but not limited to, a reputable overnight courier such as Federal
Express shall be deemed personal delivery. All notices forwarded by mail shall
be deemed received on the date seven (7) days (excluding Sundays and Holidays)
immediately following date of deposit in the U.S. Mail. Provided, however, the
return receipt indicating the date upon which all notices were received shall be
prima facie that such notices were received on the date on the return receipt.

If to Owner:                        Sardy House, LLC
                                    128 East Main Street
                                    Aspen, Colorado 81611

If to Operator:                     Block 66, LLC
                                    200 South Aspen Street
                                    Aspen, Colorado 81611

         The addresses and addressees may be changed by giving notice of such
change in the manner provided herein for giving notice. Unless and until such
written notice is received, the last address and addressee given shall be deemed
to continue in effect for all purposes.

19.3     ENTIRE AGREEMENT

         This Agreement and the Operating Agreement embody the entire agreement
and understanding of Owner relating to the subject matter hereof and supersede
all prior representations, agreements and understandings, oral or written,
relating to such subject matter. Neither this Agreement nor any provision hereof
may be amended, enlarged, modified, waived, discharged or terminated orally, but
only as expressly provided herein or by an instrument signed by Owner and
Operator.

                                       23

<PAGE>

19.4     ASSIGNMENT

         Except as otherwise provided in Section 13.1, this Agreement and any
documents executed in connection therewith shall not be assigned by Owner or
Operator without the prior written consent of the other party, and any
assignment without such prior written consent shall be null and void.

19.5     SURVIVAL

         All covenants, agreements, representations and warranties made herein
shall survive the execution and delivery of (i) this Agreement, and (ii) other
documents and instruments to be executed and delivered in accordance herewith,
and shall continue in full force and effect.

19.6     OUTSIDE BUSINESSES

         Nothing contained in this Agreement shall be construed to restrict or
prevent, in any manner, any party or any party's affiliates, parent corporations
or representatives or principals from engaging in any other businesses or
investments.

19.7     EXHIBITS

         All Exhibits attached hereto are incorporated herein by this reference
as if fully set forth herein; provided, however, in the event that at the time
of the execution of this Agreement any of the Exhibits to be attached are
incomplete, the parties shall use their best efforts to complete such Exhibits
at the earliest possible date. To the extent this Agreement may be rendered
unenforceable by the lack of completion of any of the Exhibits, such defect
shall be cured as such incomplete Exhibits are made complete in accordance with
this Section, except to the extent that such Exhibits are deemed and stipulated
by the parties to be complete on the execution of this Agreement by the parties
hereto. If any Exhibits are subsequently changed by the mutual written agreement
of the parties, the Exhibits shall be modified to reflect such change or changes
and initialed by the parties.

19.8     CONSTRUCTION AND INTERPRETATION OF AGREEMENT

         This Agreement shall be governed by and construed under the laws of the
State of Colorado. Any action brought to enforce or interpret this Agreement and
shall be governed by and construed under the laws of the State of Colorado. Any
action brought to enforce or interpret this Agreement shall be brought in the
court of appropriate jurisdiction in Pitkin County. Should any provision of this
Agreement require judicial interpretation, it is agreed that the court
interpreting or considering same shall not apply the presumption that the terms
hereof shall be more strictly construed against a party by reason of the rule or
conclusion that a document should be construed more strictly against the party
who itself or through its agent prepared the same; it being agreed that all
parties hereto have participated in the preparation of this Agreement and that
legal counsel was consulted by each responsible party before the execution of
this Agreement.

                                       24

<PAGE>

19.9     SPECIFIC PERFORMANCE

         Owner and Operator agree that in addition to all other remedies, each
of their obligations contained herein shall be subject to the remedy of specific
performance by appropriate action commenced by the aggrieved party in a court of
proper jurisdiction.

19.10    AMENDMENT AND WAIVER

         This Agreement may not be amended or modified in any way except by an
instrument in writing executed by all parties hereto; provided, however, either
Owner or Operator may, in writing, (i) extend the time for performance of any of
the obligations of the other, (ii) waive any inaccuracies and representations by
the other contained in this Agreement, (iii) waive compliance by the other with
any of the covenants contained in this Agreement, and (iv) waive the
satisfaction of any condition that is precedent to the performance by the party
so waiving of any of its obligations under this Agreement.

19.11    SEVERABILITY

         Except as expressly provided to the contrary herein, each section,
part, term or provision of this Agreement shall be considered severable, and if
for any reason any section, part, term or provision herein is determined to be
invalid and contrary to or in conflict with any existing or future law or
regulation by a court or agency having valid jurisdiction, such determination
shall not impair the operation of or have any other affect on other sections,
parts, terms or provisions of this Agreement as may remain otherwise
intelligible, and the latter shall continue to be given full force and effect
and bind the parties hereto, and said invalid sections, parts, terms or
provisions shall not be deemed to be a part of this Agreement.

19.12    BINDING CONTRACT

         This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, legal representatives and
assigns, where permitted.

19.13    GOVERNING DOCUMENT

         This Agreement shall govern in the event of any inconsistency between
this Agreement and any of the Exhibits attached hereto.

19.14    APPROVALS REASONABLE

         Any consent or approval referred to herein (by whatever words used) of
either party shall not be unreasonably withheld or delayed, and neither party
shall seek or obtain any payment in connection therewith as a condition
therefor. Except as otherwise expressly provided herein, whenever either party
has called upon the other to execute and deliver a consent or approval in
accordance with the terms of this Agreement, the failure of such party to
respond to the demand within fifteen (15) days after receipt of written request
therefor, or such other period as specifically set forth herein, shall be deemed
to be a consent or approval. In the event that either party refuses to give its
consent or approval to any request by the other, such refusing party shall
indicate by written notice to the other the reason for such refusal.

                                       25

<PAGE>

19.15    USE OF NAME

         Operator acknowledges that Owner owns the rights to the mark and name
"Sardy House." The Owner grants Operator the right to use "Sardy House" during
the term of this Agreement for the sole purpose of carrying out its obligations
herein. The Operator agrees to relinquish all use and all claims to use of
"Sardy House" upon the termination of this Agreement.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first written above.

                                            Owner:

                                            SARDY HOUSE, LLC,
                                            a Colorado limited liability company

                                            By: /S/ FRANK S. PETERS
                                                --------------------------------
                                                Frank S. Peters, President

                                            Operator:

                                            BLOCK 66, LLC,
                                            a Colorado limited liability company

                                            By: /S/ DANIEL D. DELANO
                                                --------------------------------
                                                Daniel D. Delano, Manager

                                       26

<PAGE>

                                    EXHIBIT A
                                       TO
                              MANAGEMENT AGREEMENT

                              PROPERTY DESCRIPTION

Lots A, B and C,
Block 75 and
all of Lots P, Q, R and S, and Lots F, G, H and I,
less the northerly 75 feet thereof and that part of the vacated alley bounded by
the extension of the easterly lot lines of Lots I and S and the westerly lot
lines of Lots F and P, all in Block 66,
City and Townsite of Aspen, Pitkin County, Colorado.

                                      A-1

<PAGE>

                                    EXHIBIT B
                                       TO
                              MANAGEMENT AGREEMENT

                         OWNER'S INSURANCE REQUIREMENTS

                                       B-1Exhibit 10.1

                                   QMED, INC.
                       2003 OUTSIDE DIRECTORS EQUITY PLAN

1.       PURPOSE

         The loyal and dedicated service of "outside" directors is essential to
the growth and progress of any public company. Accordingly, the Outside
Directors Equity Plan (the "Plan") of QMed, Inc. (the "Company") has been
adopted to better enable the Company to retain and attract qualified outside
directors to serve on the Company's Board of Directors, while reducing the
Company's cash outlay of director's fees. The Plan is also designed to provide a
stronger nexus between the contributions made to the Company by its outside
directors and the value of the compensation they receive.

2.       ADMINISTRATION

         The Plan will be administered by the Executive Evaluation and
Compensation Committee of the Board of Directors (or successor thereto) (the
"Committee"). Awards of the Company's Common Stock, par value $.001 per share
("Stock"), and options to purchase the Stock ("Options"), and the amount and
nature of the Stock and Options so awarded, will be automatic, as provided in
Sections 5 and 6 of the Plan. All questions of interpretation of the Plan will
be determined by the Committee. Such determinations will be final and binding
upon all persons having an interest in the Plan.

3.       PARTICIPATION IN THE PLAN

         Directors who are not employees of the Company or any subsidiary of the
Company are eligible to participate in the Plan.

4.       STOCK SUBJECT TO THE PLAN

         4.1. Total Shares Available. Up to two hundred fifty thousand (250,000)
shares (subject to adjustment under Section 11 of the Plan) of Stock are
authorized for issuance under the Plan. Such shares of Stock may be issued (i)
outright, pursuant to deferred elections set forth in Section 5 of the Plan, or
(ii) upon the exercise of Options. The total number of shares of Stock awarded
under (i) and (ii) shall not exceed 250,000. The Company may issue authorized
but unissued shares of its Stock, may repurchase shares in the open market or in
private transactions, or may otherwise make a sufficient number of shares
available under the Plan. The Company shall not be required to reserve or
otherwise set aside funds or shares of Stock for the payment of its obligations
hereunder. The Company shall make available as and when required a sufficient
number of shares of Stock to meet the needs of the Plan.

         4.2. Unexercised or Expired Options. Upon the expiration or termination
of any Option under the Plan, the Stock allocable to the unexercised or
surrendered portion of such Option will revert to the Plan's pool of Stock, and
may thereupon become subject to Stock and Options subsequently awarded under the
Plan.

<PAGE>

5.       AWARDS OF STOCK

         5.1. Fair Market Value of Stock. "Fair Market Value" means, as of any
given date, the closing price of the Stock on such date on the Nasdaq Stock
Market, Inc. (NASDAQ) National Market System or Small Cap Market, or if not then
traded or listed on that system, on the securities trading system or stock
exchange on which the Stock is then primarily traded or listed; or if the stock
is not traded or listed on an exchange the average of the reported bid and ask
price on such date.

         5.2. Election. Awards of Stock will be made to each eligible director
who has submitted to the Committee a written election to receive Stock in lieu
of all or any part of the compensation which is not being deferred under any
other plan and which otherwise would have been payable currently for services
rendered as a director (including the director's retainer, committee and meeting
fees) and, where applicable, as Chairman, specified as a percentage of such
fees. An initial election shall be made 30 days after the effective date of this
plan. In the case of a new director, such election may be effective immediately
if received within a reasonable time after the director's election. Each such
election shall be effective until revoked by a later written election, but no
such later election or modified shall become effective until the first calendar
year to begin at least 5 days after the later election is received by the
Company.

         5.3. Stock Awards and Formula. On each date of payment of directors
fees, a director who has previously submitted an appropriate election to receive
Stock in accordance with Section 5.2 above shall receive Stock, as deferred
compensation, calculated to the nearest one-thousandth of a share, determined in
accordance with the following formula:

         Directors Compensation x   Percentage Deferred           Number
    Fair Market Value of Stock On the Day Preceding Payment   =   of Shares
                                                                  of Stock

         5.4 Payment Dates. The date of payment for annual director, chairman
and committee fees shall be the date of the first meeting of the Company's board
of directors following the company's annual meeting of shareholders. Payment
dates for board and committee meetings shall be the date of such meetings.

         5.5 Deemed Investments. All amounts deferred for a calendar year shall
be treated as having been invested in shares of Common Stock, and the directors
account shall be adjusted as set forth below. Each such director's account shall
be expressed in shares of Common Stock. In the event any director ceases to be a
director during a calendar year, any unearned fees and retainers which were
deferred in such calendar year shall be forfeited at the then current Fair
Market Value of the Common Stock. Such forfeitures shall not be credited to any
other director's account, but shall be kept in a suspense account to be used for
the deemed investment of deferrals in subsequent calendar years.

<PAGE>

         There shall be credited to each director's account an amount equal to
dividends or other distributions with respect to Common Stock at the time such
dividends or other distributions are paid or made. With respect to cash amounts
so paid, such amounts shall be treated as having been invested in shares of
Common Stock.

         No director may acquire under the Plan more than one (1%) percent of
the shares of Common Stock outstanding on the date the Plan was adopted, and
together with all plans of the Company (other than plans for which shareholder
approval is not required) more than five (5%) percent of the Common Stock
outstanding on the date the Plan was adopted.

         5.6 Distribution. The Common Stock that each director shall be deemed
to have invested in shall be distributed to such director upon the earlier to
occur of:

                  (a)      Death of the director;

                  (b)      Disability of the director preventing continued
                           service on the Board;

                  (c)      A Change in Control as hereinafter defined; or

                  (d)      A date specified by the director or, if no date is so
                           specified, the date of termination of service as a
                           director.

         Upon the occurrence of an event specified above, a director or his
beneficiary will receive any amounts credited to his or her account in a single
lump sum payment, or, if elected at least one year prior to the event,
installment payments as determined by the director. A director may elect to
change an election to defer payments pursuant to paragraph (d) above if such
election is made at least one year prior to the event, and provided that any
date specified pursuant to paragraph (d) shall not be earlier than the date n
which the director is then entitled to payment of the amounts credited to the
director's account. The last election of the time and form of distribution will
govern all payments unless such election is made within one year of the date of
distribution. All distributions shall be made in the form of Common Stock. If
payment is made in installments, the account shall continue to be invested in
accordance with the provisions of Section 5.5. A director shall have the right
to designate a beneficiary in the event of the director's death, or in the
absence of any such designation, the beneficiary shall be the director's estate.

         5.7 Share Certificates, Voting and Other Rights. Any Common Stock held
on behalf of a director prior to distribution shall be held in a rabbi trust
subject to the claims of the Company's general creditors in the event of the
Company's insolvency. Prior to distribution no director shall be entitled to any
voting, dividend or distribution rights, however, the trustee of the rabbi trust
shall have all such rights with respect to all such shares. No certificates for
Common Stock shall be issued to a director until a distribution event occurs as
provided in Section 5.6 above. Upon distribution, the certificates for shares
issued hereunder shall be issued in the name of such director.

<PAGE>

         5.8 Fractions of Shares. The Company shall not issue fractions of
shares. Whenever the terms of the Plan a fractional share would otherwise be
required to be issued, the director shall be issued full share in lieu of such
fractional share based upon the same Fair Market Value which was utilized to
determine the number of shares to be issued on the relevant payment date.

         5.9 Change in Control. "Change in Control" means a change in control of
the Company of a nature that would be required to be reported in response to
Item 1(a) of the Current Report on Form 8-K, as in effect on the effective date
of the Plan, pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 (the "Exchange Act"); provided that, without limitation, such a "Change in
Control" shall be deemed to have occurred if:

                  (a) A third person, including a "group" as such term is used
in Section 13(d)(3) of the Exchange Act, other than the trustee of a Company
employee benefit plan, becomes the beneficial owner, directly or indirectly, of
20 percent or more of the combined voting power of the Company's outstanding
voting securities ordinarily having the right to vote for the election of
directors of the Company;

                  (b) During any period of 24 consecutive months individuals
who, at the beginning of such consecutive 24-month period, constitute the Board
of the Company cease for any reason (other than retirement upon reaching normal
retirement age, disability, or death) to constitute at least a majority of the
Board; provided that any person becoming a director subsequent to the effective
date of the Plan whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board (other than an election or nomination of any
individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the Directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of this Plan, considered as
though such person were a member of the Incumbent Board; or

                  (c) The Company shall cease to be a publicly owned corporation
having its outstanding stock listed on the or quoted in the NASDAQ National
Market System, NASDAQ Small Cap Market or national securities exchange.

         5.10 General Restrictions. The issuance of shares or the delivery of
certificates for such shares to director share under shall be subject to the
requirement that, if at any time the general counsel of the Company shall
reasonably determine, in his discretion, that the listing, registration or
qualification of such shares upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental body, is necessary
or desirable as a condition of, or in connection with, such issuance or delivery
thereunder, such issuance or delivery shall not take place unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not reasonably acceptable to the general
counsel.

<PAGE>

6.       AWARDS OF OPTIONS

         All Options awarded under the Plan will be "non-statutory options," and
therefore are not entitled to special tax treatment under Section 422 of the
Internal Revenue Code of 1986, as it may be amended from time to time (the
"Code"). Each Option awarded under the Plan will be evidenced by a written
agreement, grant certificate or electronic notice in such form as the Committee
may from time to time approve, consistent with and subject to the following
terms and conditions:

         6.1. Exercise Price of Options. The exercise price of Options to be
awarded with respect to any calendar quarter shall be one hundred percent (100%)
of the Fair Market Value of the Stock on the day preceding.

         6.2. Option Awards and Formula. Following stockholder approval of this
Plan, each eligible director shall receive 2,500 Options on the date of the
first meeting of the Board of Directors immediately following each annual
meeting of the Company's stockholders during the term of the Plan.

         6.3. Exercise of Options. Options may be exercised at any time
commencing one year after their grant. To exercise an Option in whole or in
part, the holder of an Option ("Optionee") shall give written or approved
electronic notice of exercise to the Company's Stock Option Administrator
specifying the number of shares as to which the Option is being exercised,
accompanied by payment in full of the Option Price for such shares either in
cash or in such other consideration as approved by the Committee in its sole
discretion including, but not limited to, (i) shares of previously owned Common
Stock held by the Optionee for at least six (6) months, or (ii) in the event of
hardship and with the advance approval of the Committee, the Company's retention
of shares of Common Stock otherwise issuable to the Optionee upon exercise.
Shares of Stock used to make payments under subsections (ii) and (iii) shall be
valued at Fair Market Value on the date such notice is received by the Stock
Option Administrator (or if unavailable on such date, on the next preceding
trading date), and the number of shares to be required for payments under (ii)
or (iii) shall be rounded to the nearest whole share so that no cash payment
shall be required by reason of any fractional amount.

         6.4. Termination of Options.

                  (a) Options awarded pursuant to the Plan may not be exercised
after the tenth anniversary of the date of grant. Any Options which have not
been exercised on or before such tenth anniversary shall thereupon expire.

                  (b) Any Option granted hereunder shall terminate if the
director, prior to the first anniversary of the date of grant, ceases to serve
as such for any reason, except death or retirement.

                  (c) Any Option awarded a director under the Plan and
unexercised, in whole or in part, on the date of his death may be exercised by
the personal representative of the deceased director's estate, or by any heir,

<PAGE>

devisee, or other taker who, by will or operation of law, is entitled to said
Option or any portion thereof. In each such case, such Option(s) may be
exercised at any time on or before the third anniversary of the director's death
or the tenth anniversary of the date of grant, whichever shall be earlier.

         6.5. No Shareholder Rights By Reason of Options. A director does not
have any rights whatsoever as a shareholder with respect to any unexercised
Option until the date of the issuance to that director of a stock certificate(s)
for shares to be issued upon the proper exercise of said Option. No adjustment
will be made for dividends or other rights with respect to which the record date
occurs prior to the date such certificate is issued.

         6.6. Options Not Assignable Or Transferable. Options awarded under the
Plan are not assignable or transferable other than by will or by the laws of
intestate succession. During the lifetime of a director, Options awarded under
the Plan will be exercisable only by that director.

7.       LIMITATION OF RIGHTS

         7.1. No Right to Continue as a Director. Neither the Plan, the awarding
of any Stock or Option, nor any other action taken pursuant to the Plan
constitutes or is evidence of any agreement or understanding, express or
implied, that the Company will retain a director for any period of time or at
any particular rate of compensation.

         7.2. No Rights to Receive Stock or Options After Eligibility Ceases. A
director has no rights to receive Stock or Options under the Plan, and will not
receive any Stock or Options for any calendar quarter, or part thereof, once he
or she: (i) becomes an employee of the Company or any subsidiary of the Company;
or (ii) ceases to be a director.

         7.3. Limitation on Rights of Optionee. Except as expressly provided in
Section 9, an Optionee shall have no rights by reason of the issuance of (i)
shares of Stock pursuant to this Plan, (ii) additional shares of Stock, (iii)
any other security or debenture convertible into Stock, (iv) or any other equity
security, including issuance pursuant to a plan of merger, consolidation, or
statutory share exchange, and no adjustment by reason thereof shall be made with
respect to the number of shares of Stock subject to an Option or the exercise
price.

         7.4. Rights of the Company. The grant of an Option pursuant to the Plan
shall not affect in any way the right or power of the Company to issue
additional shares of stock; to make adjustments, reclassifications,
reorganizations or changes in its capital or business structure; to participate
in a merger, consolidation, or share exchange with another corporation; or to
dissolve, liquidate, or sell or transfer all or any part of its business or
assets.

8.       ADJUSTMENTS

         In the event any change is made to the Stock by reason of merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
combination of shares, exchange of shares, change in corporate structure or
otherwise, including but not limited to any change whereby the Stock is
converted into or exchanged for another class of shares or shares of another

<PAGE>

entity, appropriate and comparable adjustments will be made to the number and
kind of shares subject to the Plan, and to the number and kind of shares and
price per share of Stock subject to outstanding Options issued pursuant to the
Plan, and the prices of Stock used in calculating the Fair Market Value of the
Stock under Section 5.1. All such adjustments will be made in such a manner as
avoids dilution or enlargement of the rights of directors under the Plan.

9.       AMENDMENT OF THE PLAN

         The Board of Directors of the Company may suspend or terminate the Plan
or revise or amend it in any respect whatsoever; provided that, without approval
of the shareholders of the Company, no revision or amendment may change the
number of shares subject to the Plan (except as provided in Section 9 of the
Plan) or materially increase the benefits accruing to participants under the
Plan, and provided further that no revision or amendment or termination shall,
without the consent of the affected director(s), impair the rights of any
director under any Option previously awarded.

10.      LEGAL RESTRICTIONS

                  (a) The Company will not be obligated to issue shares of Stock
if counsel to the Company determines that such issuance would violate any law or
regulation of any governmental authority or any agreement between the Company
and any national securities exchange upon which the Stock is listed. In
connection with any stock issuance or transfer, the person acquiring the shares
shall, if requested by the Company, give assurances satisfactory to counsel by
the Company regarding such matters as the Company may deem desirable to assure
compliance with all legal requirements. The Company shall in no event be obliged
to take any action in order to cause the exercise of any Option.

                  (b) Of the 250,000 shares subject to the Plan, no single
director may acquire from these new shares more than 145,110 shares, which is
one percent of the shares outstanding as of February 4, 2003.

11.      RULE 16b-3 COMPLIANCE

         11.1. Six-Month Holding Period. Unless an Optionee could otherwise
dispose of equity securities, including derivative securities, acquired under
the Plan without incurring liability under Section 16(b) of the Exchange Act,
equity securities acquired under the Plan must be held for a period of six
months following the date of such acquisition, provided that this condition
shall be satisfied with respect to a derivative security if at least six months
elapse from the date of acquisition of the derivative security to the date of
disposition of the derivative security (other than upon exercise or conversion)
or its underlying equity security.

         11.2. Other Compliance Provisions. The Committee shall implement
transactions under the Plan and administer the Plan in a manner that will ensure
that each transaction by an Optionee is exempt from liability under Rule 16b-3,
except that Optionees may be permitted to engage in a non-exempt transaction
under the Plan if written notice has been given to the Optionee regarding the
non-exempt nature of the transaction. The Committee may authorize the Company to

<PAGE>

repurchase any Option or shares of Stock acquired under the Plan in order to
prevent an Optionee from incurring liability under Section 16(b). Unless
otherwise specified by the Optionee, equity securities, including derivative
securities, acquired under the Plan which are disposed of by an Optionee shall
be deemed to be disposed of in the order acquired by the Optionee.

12.      GOVERNING LAW

         The Plan will be governed, and its provisions construed, in accordance
with the laws of the State of Delaware and applicable federal law, without
regard to conflicts of law.

___________________

Approved by the Board of Directors February 10, 2003.

Approved by the Stockholders May 12, 2003.

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