Document:

<PAGE>

                             ASSET SALE AGREEMENT

                                     Among

                                ORTHOVITA, INC.

                                      And

                             VITA LICENSING, INC.

                                      And

                           IMPLANT INNOVATIONS, INC.

                         Dated as of February 10, 2000
<PAGE>

                                TABLE OF CONTENTS
                                -----------------

<TABLE>
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                                                            Page
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<S>                                                         <C>
RECITALS....................................................  3

ARTICLE I DEFINITIONS.......................................  3

ARTICLE II SALE OF ASSETS...................................  5

ARTICLE III CONSIDERATION...................................  5

ARTICLE IV CLOSING..........................................  7

ARTICLE V COVENANTS AND AGREEMENTS..........................  7

ARTICLE VI REPRESENTATIONS AND WARRANTIES................... 12

ARTICLE VII SURVIVAL OF REPRESENTATIONS; INDEMNITY.......... 16

ARTICLE VIII TERMINATION OF AGREEMENT....................... 19

ARTICLE  IX MISCELLANEOUS................................... 20
</TABLE>

SCHEDULES

     Schedule 1.2        Biogran(R) Know-How
     Schedule 1.3        Biogran(R) Patents
     Schedule 1.4        Biogran(R) Regulatory Approvals
     Schedule 1.5        Biogran(R) Trademarks
     Schedule 1.6        Contracts
     Schedule 1.7        Equipment
     Schedule 1.9        Inventory
     Schedule 1.11       Marketing Materials
     Schedule 1.14       Specifications
     Schedule 3.3.2      Revised Inventory List
     Schedule 3.5        Purchase Price Allocation
     Schedule 3.7        Current CORTOSS(TM) and ORTHOCOMP(TM) Products
     Schedule 4.2A       Form of Biogran(R) Patent Assignment
     Schedule 4.2B       Form of Biogran(R) Regulatory Approval Assignment
     Schedule 4.2C       Form of Biogran(R) Trademark Assignment
     Schedule 4.3.1      Wiring Instructions
     Schedule 6.1.5      Pending Actions
     Schedule 6.1.10     Suppliers

                                   -i-
<PAGE>

     Schedule 6.1.14     Studies and Information

EXHIBITS

     Exhibit 4.2D       Form of Escrow Agreement
     Exhibit 4.2E       Form of Bill of Sale
     Exhibit 4.2F       Form of Termination Agreement for Distribution Agreement
     Exhibit 4.2G       Form of Assignment of Contracts
     Exhibit 4.2H       Form of Legal Opinion of Sellers' Counsel
     Exhibit 4.3A       Form of Legal Opinion of Purchaser's Counsel

                                     -ii-
<PAGE>

                             ASSET SALE AGREEMENT
                             --------------------

This ASSET SALE AGREEMENT is dated as of February 10, 2000 (the "Signing Date")
among ORTHOVITA, INC., a Pennsylvania corporation ("Orthovita"), and VITA
LICENSING, INC., a Delaware corporation ("Vita Licensing", collectively with
Orthovita, the "Sellers") and IMPLANT INNOVATIONS, INC., a Florida corporation
("Implant Innovations" or "Purchaser").

                                   RECITALS
                                   --------

               WHEREAS, Orthovita and Implant Innovations entered into a Global
Distribution Agreement on April 29, 1998 (the "Distribution Agreement") to
facilitate the global distribution of Finished Product (as defined below) for
dental surgical indications and the parties wish to terminate the Distribution
Agreement in favor of this Asset Sale Agreement; and

               WHEREAS, Sellers wish to sell Purchaser the Transferred Assets
(as defined below) and Purchaser desires to purchase from the Sellers the
Transferred Assets necessary for the manufacture and sale of Finished Product;
and

               WHEREAS, Vita Licensing is the sole assignee of the Biogran(R)
Patents (as defined below) referred to in Title I of Schedule 1.3, Orthovita is
                                                     ------------
the sole assignee of the Biogran(R) Patents referred to in Title II of Schedule
                                                                       --------
1.3, and Orthovita is the sole owner of the Biogran(R) Trademarks, the Biogran
---
(R) Know-How, the Biogran(R) Regulatory Approvals, the Equipment, the Contracts,
the Marketing Materials, and the Inventory (each as defined below).

NOW, THEREFORE, in consideration of the respective covenants contained herein
and intending to be legally bound hereby, the parties hereto agree as follows:

                                   ARTICLE I
                                   ---------
                                  DEFINITIONS
                                  -----------

1.1  "Agreement" shall mean this document and any annex, addendum, exhibit,
     attachment, schedule or modification hereto.

1.2  "Biogran(R) Know-How" shall mean all currently existing proprietary
     material and information including data, technical information, know-how,
     experience, inventions, discoveries, trade secrets, compositions of matter
     and methods, whether or not patentable or confidential, solely as they
     relate to and are necessary for the manufacture and packaging of Finished
     Product, owned by Sellers and described in Schedule 1.2.
                                                ------------

1.3  "Biogran(R) Patents" shall mean the patents and patent applications listed
     in Schedule 1.3 and any patents issuing therefrom.
        ------------

1.4  "Biogran(R) Regulatory Approvals" shall mean with respect to the United
     States and the European Union, all authorizations, licenses or permits
     required by the appropriate
<PAGE>

     governmental entity or entities and necessary for commercial sale of
     Finished Product in that territory including, without limitation and where
     applicable, approval of labeling, price, reimbursement and manufacturing,
     owned by Sellers and listed in Schedule 1.4.
                                    ------------

1.5  "Biogran(R) Trademarks" shall mean the registered and unregistered
     trademarks for Finished Product, owned by Sellers and identified in
     Schedule 1.5.
     ------------

1.6  "Contracts" shall mean all the contracts relating to Finished Product
     manufacture, sale, and research, and use of the Transferred Assets, to be
     transferred from Sellers to Purchaser, and identified in Schedule 1.6,
                                                              ------------
     Subsection A.
     ------------

1.7  "Equipment" shall mean that equipment used for the manufacture and
     packaging of Finished Product and identified in Schedule 1.7.
                                                     ------------

1.8  "Finished Product" shall mean Product packaged, labeled and boxed with
     instructions for use, and ready for distribution to the customer.

1.9  "Inventory" shall mean all inventories of (a) Finished Product, (b) raw
     materials, (c) Packaged Product, and (d) packaging materials used in the
     manufacture and packaging of Finished Product that are owned by Sellers and
     are in the possession or under the control of Sellers and identified in
     Schedule 1.9.
     ------------

1.10 "Knowledge" shall mean the knowledge of each corporate officer of the party
     or parties. An individual is deemed to have knowledge of a particular fact
     or matter if (a) such individual is actually aware of the fact or matter or
     (b) a prudent individual could be expected to discover or otherwise become
     aware of the fact or matter in the course of performing his or her ordinary
     duties in a competent manner.

1.11 "Marketing Materials" shall mean all of the currently existing marketing
     materials owned by Sellers and used by Purchaser in relation to Finished
     Product distribution and identified in Schedule 1.11.
                                            -------------

1.12 "Packaged Product" shall mean Product packaged, labeled and boxed with
     instructions for use, but not ready for distribution to customer.

1.13 "Product" shall mean bioactive glass granules that are formulated for use
     as a bone substitute known as Biogran(R) brand bone substitute and are
     covered by a claim of a Biogran(R) Patent.

1.14 "Specifications" shall mean the written specifications for the Finished
     Product attached as Schedule 1.14, as the same may be amended from time to
                         -------------
     time by Sellers in accordance with U.S. Food and Drug Administration
     ("FDA") requirements and other regulatory requirements.
<PAGE>

                                  ARTICLE II
                                  ----------
                                SALE OF ASSETS
                                --------------

2.1     Sale and Purchase of Assets. Subject to and upon the terms and
        ---------------------------
        conditions set forth in this Agreement, Sellers shall, at the Closing
        provided for in Article IV, grant, sell, transfer, convey, assign and
        deliver to Purchaser all their respective interests in, and Purchaser
        shall purchase, the following assets, properties and rights of every
        kind and description, real, personal and mixed, tangible and intangible
        (including all causes of action, rights of action, contract rights and
        claims against third parties), wherever situated as the same shall exist
        on the Closing Date (as defined below) (the assets being purchased from
        Sellers are sometimes collectively referred to as the "Transferred
        Assets"): (1) the Biogran(R) Patents, Biogran(R) Trademarks, and
        Biogran(R) Know-How (collectively, the "Intellectual Property"); (2)
        the Biogran(R) Regulatory Approvals; (3) the Equipment; (4) the
        Contracts; (5) the Marketing Materials; and (6) the Revised Inventory
        (as defined below).

2.2     Liabilities. With the exception of payments due under the Contracts, the
        -----------
        Transferred Assets are hereby conveyed free and clear of all debts,
        taxes, claims, options, liabilities, obligations, liens and
        encumbrances. Title to and risk of loss of the Transferred Assets shall
        pass to Purchaser as of the Closing (as defined below).

                                  ARTICLE III
                                  -----------
                                 CONSIDERATION
                                 -------------

3.1     Purchase Price. On the Closing Date (as defined below), Purchaser shall
        --------------
        pay to Sellers as the purchase price for the Transferred Assets sold
        hereunder the sum of (a) Three Million Nine Hundred Thousand Dollars
        ($3,900,000) and (b) the Revised Inventory Amount (as defined below) in
        the manner described in Section 4.3. In addition, Purchaser shall pay to
        Sellers on the Closing Date the Distribution Agreement Amount (as
        defined below) in the manner described in Section 4.3.

3.2     Inventory Amount. Schedule 1.9 sets forth, as of January 21, 2000, a
        ----------------  ------------
        true and complete list of all items in Inventory, including (a) the part
        number of each item, (b) the quantity of each item, and (c) the location
        of each item (the "Inventory List").

3.3     Inspection and Revisions to Inventory List. Prior to the Closing Date
        ------------------------------------------
        (as defined below), representative(s) of Purchaser shall meet with
        representative(s) of Sellers to inspect jointly the Inventory wherever
        located and to update the quantity and location of the items on the
        Inventory List. The parties agree and acknowledge that the Purchaser
        will not necessarily purchase all of the packaging material referenced
        on Schedule 1.9, but shall, prior to Closing, specify the amount of
           ------------
        packaging material, if any, it wishes to acquire.

        3.3.1  Purchaser may reject and deduct from the Inventory List any items
               that do not reasonably meet the standards set forth in Section
               6.1.12 and cannot reasonably be expected to meet such standards
               on or prior to the Closing Date.
<PAGE>

        3.3.2  Sellers shall then revise the Inventory List to reflect
               adjustments made by the parties under this Section 3.3 (the
               "Revised Inventory List"). The Revised Inventory List shall
               represent the items in the Inventory, including the packaging
               material Purchaser wishes to acquire, as of the last business day
               before the Closing Date, shall include a calculation of the total
               value of the items listed thereon (the "Revised Inventory
               Amount") and shall be appended to this Agreement as Schedule
                                                                   --------
               3.3.2.
               -----

        3.3.3  Purchaser shall pay the Revised Inventory Amount to Sellers at
               the Closing in the manner set forth in Section 4.3. For the
               purposes of calculating the values of the items listed on the
               Revised Inventory List, the following criteria shall be employed:

               3.3.3.1  Raw Materials shall be valued at documented cost to
                        Orthovita.

               3.3.3.2  Packaging materials shall also be valued at documented
                        cost to Orthovita.

               3.3.3.3  Finished Product shall be valued as follows: (a)
                        Finished Product which has not been delivered to
                        Purchaser and is the subject of Implant Innovations
                        Purchase Order No. 6994 or Purchase Order No. 8374
                        (calling for the purchase of the quantities set forth in
                        such purchase orders) shall be valued based on the
                        number of units multiplied by the unit value as
                        established under the Distribution Agreement; (b)
                        Finished Product which has not been delivered to
                        Purchaser and is the subject of any new Implant
                        Innovations purchase orders mutually agreed upon and
                        entered into by the parties after the Signing Date shall
                        be valued based on the number of units multiplied by the
                        unit value as established under the Distribution
                        Agreement; and (c) Finished Product other than the
                        foregoing, shall be valued based on the number of units
                        multiplied by the sum of the documented cost per unit
                        plus fifteen percent (15%) of such documented cost.

               3.3.3.4  Any Packaged Product which cannot be converted into
                        Finished Product prior to the Closing Date shall be
                        properly disposed of by Purchaser as waste product at
                        Purchaser"s expense, unless the parties mutually agree
                        otherwise.

3.4     Distribution Agreement Amount. On the Closing Date (as defined below),
        -----------------------------
        Purchaser shall pay to Sellers all amounts owed by Purchaser to Sellers,
        net of any amount owed by Sellers to Purchaser, under the Distribution
        Agreement (the "Distribution Agreement Amount") for Finished Product
        purchased by Purchaser and delivered by Sellers in accordance with the
        Distribution Agreement. Purchaser shall pay the Distribution Agreement
        Amount to Sellers in the manner set forth in Section 4.3.

3.5     Allocation. Sellers and Purchaser agree that the portion of the purchase
        ----------
        price referred to in Section 3.1(a) shall be allocated to the various
        categories of Transferred Assets in
<PAGE>

        accordance with the attached Schedule 3.5. The parties agree that the
                                     ------------
        values assigned to the various categories of the Transferred Assets as
        set forth in Schedule 3.5 are fair and reasonable values for such assets
                     ------------
        purchased.

3.6     Technical Assistance. During the period of six (6) months following the
        --------------------
        Closing Date (as defined below), Sellers shall make up to two employees
        reasonably available to provide technical support for the manufacture of
        the Finished Product at the Purchaser"s reasonable request, at times and
        places agreed to by the parties; provided, however, that Purchaser shall
        pay (i) all reasonable out-of-pocket costs and expenses (including
        travel, lodging and other similar expenses) of such Sellers" employees
        incurred in connection with providing such technical support, such
        amount not to exceed $10,000 without Purchaser"s prior approval, and
        (ii) $850 per day for each of Sellers" employees used in connection with
        providing technical support services to Purchaser in excess of twenty
        (20) total work days during this six (6) month period.

3.7     Right of First Refusal for New Products. If during the period from the
        ---------------------------------------
        Closing Date (as defined below) to April 29, 2003, a Seller develops or
        obtains transferable rights to a new product(s) that (a) includes
        bioactive glass granules as an active component, except for Orthovita"s
        current products trademarked as (i) CORTOSS(TM) and (ii) ORTHOCOMP(TM)
        described on Schedule 3.7, and (b) has application in the dental
                     ------------
        surgical field (the "New Product"), Purchaser shall have the right of
        first refusal to distribution rights for the New Product in such field.
        Such Seller shall provide to Purchaser timely notice that the New
        Product is available for distribution (the "New Product Notice") and
        Purchaser shall have seven (7) business days from receipt of the New
        Product Notice to provide written notice to Seller providing whether it
        has an interest or has no interest in the New Product (the "Interest
        Notice"). If the Interest Notice provides that the Purchaser has no
        interest in the New Product, Seller shall have no further obligation to
        provide any rights to Purchaser with respect to the New Product. If the
        Interest Notice provides that the Purchaser has an interest in the New
        Product, Seller will have seven (7) business days to provide written
        notice to Purchaser that describes the terms and conditions under which
        such Seller is prepared to grant the rights regarding the New Product to
        Purchaser (the "Terms Notice"). Upon Purchaser"s receipt of the Terms
        Notice, the parties shall enter into good faith negotiations regarding
        the New Product. If the parties are unable to reach a mutually
        acceptable arrangement for Purchaser to distribute the new product
        within 60 days after Purchaser receives the Terms Notice, Seller may
        enter into an agreement with any third party to distribute the New
        Product, except that Seller shall not offer the New Product to a third
        party on terms that on balance are more favorable to that third party
        than the terms offered by Seller to Purchaser.

                                  ARTICLE IV
                                  ----------
                                    CLOSING
                                    -------

4.1     Location, Date. Unless the parties agree in writing to another date or
        --------------
        place, the closing of the transactions contemplated by this Agreement
        ("Closing") shall be held at the offices of Morgan, Lewis & Bockius LLP
        in Philadelphia, Pennsylvania, at 10:00 a.m., local time, on the date
        (the "Closing Date") that is the earlier of (a) ninety (90) days after
<PAGE>

        Purchaser receives from Sellers (1) Orthovita"s certificate and written
        declaration of conformity for Finished Product and (2) the written
        report of TNO (Orthovita"s current Notified Body for the Finished
        Product) on the recently performed Design Examinations on Finished
        Product or (b) the later of (i) five (5) business days after Purchaser
        receives written notification from its Notified Body that the CE
        Certificate for the Finished Product will be issued in the Purchaser"s
        name or (ii) Sellers' delivery to Purchaser of all quantities of
        Finished Product set forth in Purchase Order No. 6994 and Purchase Order
        No. 8374.

4.2     Sellers" Obligations. On the Closing Date, Sellers shall deliver to
        --------------------
        Purchaser:

        4.2.1    the executed Biogran(R) Patent Assignments in substantially the
                 form of the attached Schedule 4.2A;
                                      -------------

        4.2.2    the executed Biogran(R) Regulatory Approvals Assignments in
                 substantially the form of the attached Schedule 4.2B;
                                                        -------------

        4.2.3    the executed Biogran(R) Trademark Assignments in substantially
                 the form of the attached Schedule 4.2C;
                                          -------------

        4.2.4    the executed Escrow Agreement in substantially the form of the
                 attached Exhibit 4.2D (the "Escrow Agreement");
                          ------------

        4.2.5    the executed Bill of Sale in substantially the form of the
                 attached Exhibit 4.2E;
                          ------------

        4.2.6    the executed Distribution Termination Agreement in
                 substantially the form of the attached Exhibit 4.2F;
                                                        ------------

        4.2.7    the executed Assignment of Contracts in substantially the form
                 of the attached Exhibit 4.2G;
                                 ------------

        4.2.8    an opinion dated the date of the Closing in form and substance
                 satisfactory to Purchaser in substantially the form of the
                 attached Exhibit 4.2H;
                          ------------

        4.2.9    a copy of the executed Agreement between Orthovita and Vita
                 Licensing regarding the termination of the Vita Licensing, Inc.
                 License to Orthovita dated June 28, 1999;

        4.2.9    copies of all files and other data and documents pertaining to
                 the Biogran(R) Know-How, Biogran(R) Trademarks, Biogran(R)
                 Patents and Biogran(R) Regulatory Approvals (which, if
                 requested by Purchaser, shall be shipped to a location
                 designated by Purchaser at Purchaser"s expense); and

        4.2.10   the resolutions duly adopted by the Board of Directors of each
                 Seller evidencing the taking of all corporate action necessary
                 to authorize the execution, delivery and performance of this
                 Agreement and the other transaction documents and the
                 consummation of the transactions contemplated hereby and
                 thereby.
<PAGE>

4.3     Purchaser's Obligations.  On the Closing Date, Purchaser shall:
        -----------------------

        4.3.1    deliver to Vita Licensing the sum of Three Million Five Hundred
                 Thousand Dollars ($3,500,000) in the form of a wire transfer
                 executed in accordance with Vita Licensing wiring instructions
                 provided by Sellers in Schedule 4.3.1;
                                        --------------

        4.3.2    execute and deliver the Escrow Agreement in substantially the
                 form of Exhibit 4.2D and deliver to Chase Manhattan Trust
                         ------------
                 Company, N.A. (the "Escrow Agent") the sum of Four Hundred
                 Thousand Dollars ($400,000) by a cashier"s check or wire
                 transfer, which sum shall be held in escrow by the Escrow Agent
                 pursuant to the Escrow Agreement;

        4.3.3    execute and deliver the Distribution Termination Agreement in
                 substantially the form of the attached Exhibit 4.2F;
                                                        ------------

        4.3.4    deliver to Sellers an opinion dated the date of the Closing in
                 form and substance satisfactory to Sellers in substantially the
                 form of the attached Exhibit 4.3A;
                                      ------------

        4.3.5    deliver to Orthovita an amount equal to the Revised Inventory
                 Amount plus the Distribution Agreement Amount by cashier"s
                 check or wire transfer executed in accordance with the
                 Orthovita wiring instructions in Schedule 4.3.1;
                                                  --------------

        4.3.6    deliver to Sellers proof of filing an amended registration with
                 the U.S. Food and Drug Administration evidencing the addition
                 of Finished Product to Purchaser"s registration; and

        4.3.7    deliver to Sellers the resolutions duly adopted by the Board of
                 Directors of Purchaser evidencing the taking of all corporate
                 action necessary to authorize the execution, delivery and
                 performance of this Agreement and the other transaction
                 documents and the consummation of the transactions contemplated
                 hereby and thereby.

                                   ARTICLE V
                                   ---------
                           COVENANTS AND AGREEMENTS
                           ------------------------

5.1     Cooperation. Prior to the Closing Date, the Purchaser will use
        -----------
        commercially reasonable efforts to obtain a CE Mark for the Finished
        Product. Sellers will cooperate in good faith with Purchaser to obtain
        such CE Mark, including (a) providing to Purchaser or its designee as
        soon as reasonably practicable the documents listed in Section 4.1 and
        (b) providing to Purchaser or its designee as soon as reasonably
        practicable any other documentation required to achieve the same.
        Sellers shall provide to Purchaser, Purchaser"s Notified Body for the
        Finished Product (mdc, medical device certification GmbH), and
        Purchaser"s other regulatory authority representatives reasonable access
        to (a) Orthovita's technical files relating to Biogran(R) Regulatory
        Approvals, (b) Orthovita"s device history and quality records relating
        to the Finished Product and (c) copies of such documents. Sellers shall
        retain these records for a period that, after the expiration date of the
        last lot of Finished Product manufactured by Orthovita, is the greater
        of (i) two years
<PAGE>

        or (ii) the life of the Finished Product. Except as to the delivery of
        documents contemplated by Section 4.1, Purchaser shall reimburse Sellers
        for all out-of-pocket costs incurred by Sellers as a result of Sellers"
        assistance in connection with Purchaser"s request for assistance with
        such CE Mark. All regulatory filings for regulatory approvals after the
        Closing Date shall be the sole responsibility and at the expense of the
        Purchaser.

5.2     Conduct of Business Pending Closing. Prior to the Closing Date, and
        -----------------------------------
        unless Purchaser shall otherwise consent or agree in writing, the
        Sellers covenant and agree that:

        5.2.1    Sellers will engage in the manufacture of Finished Product in
                 the ordinary course of business and consistent with past
                 practice, except that the Sellers shall not be required to take
                 any action to purchase raw materials or commission manufacture
                 of Finished Product unless Sellers receive prior written
                 consent or instruction from Purchaser to do so;

        5.2.2    Sellers will not incur, create, assume or suffer to exist any
                 license (other than the existing license between Orthovita and
                 Vita Licensing set forth on Schedule 1.6), mortgage, pledge,
                                             ------------
                 lien, restriction, encumbrance, tenancy, encroachment,
                 covenant, condition, right-of-way, easement, claim, security
                 interest, charge or other matter affecting title on any of the
                 Transferred Assets or waive any right relating to the
                 Transferred Assets;

        5.2.3    Sellers shall not (a) modify, amend, extend, renew or terminate
                 any of the Contracts or enter into any new contracts relating
                 to the Transferred Assets or (b) make purchases relating to the
                 Transferred Assets or the Finished Product in an amount greater
                 than $25,000, except with respect to consents or instructions
                 from Purchaser in accordance with Section 5.2.1;

        5.2.4    Sellers shall keep the Biogran(R) Regulatory Approvals in full
                 force and effect and renew any of them that will expire on or
                 before the Closing Date;

        5.2.5    Sellers shall conduct the business in such a manner so that the
                 representations and warranties contained in Article 6 shall
                 continue to be true and correct on and as of the Closing Date
                 as if made on and as of the Closing Date;

        5.2.6    Sellers shall make all reasonable efforts to provide
                 information about the Transferred Assets and Finished Products
                 to the Purchaser that is reasonably requested;

        5.2.7    Sellers shall maintain in force (including necessary renewals)
                 any existing insurance policies covering the Transferred
                 Assets, except to the extent that they may be replaced with
                 equivalent policies appropriate to insure the Transferred
                 Assets;

        5.2.8    Sellers shall inform Purchaser prior to the Closing of any
                 updates to the Schedules to this Agreement as necessary to
                 cause the information contained in them to continue to be
                 accurate up to and including the Closing Date;
<PAGE>

        5.2.9    Sellers will not take any action or omit to take any action
                 which will result in a violation of any applicable law or cause
                 a breach of any agreements, contracts or commitments;

        5.2.10   Sellers shall not (a) solicit, initiate or encourage the
                 submission of a competing proposal to purchase the Transferred
                 Assets, (b) enter into or agree to enter into any contract to
                 sell the Transferred Assets, or (c) participate in any
                 discussions or negotiations that would reasonably be expected
                 to lead to such a contract; or

        5.2.11   Sellers shall not enter into any agreement to do or not to do
                 any of the foregoing, as the case may be.

5.3     Conditions Precedent to Obligations of Purchaser. The obligations of
        ------------------------------------------------
        Purchaser to proceed with the Closing under this Agreement are subject
        to the fulfillment prior to or at Closing of the following conditions
        (any one or more of which may be waived in whole or in part by Purchaser
        in Purchaser's sole discretion):

        5.3.1    Bringdown of Representations and Warranties. Sellers"
                 -------------------------------------------
                 representations and warranties contained in this Agreement
                 shall be true and correct on and as of the time of Closing,
                 with the same force and effect as though such representations
                 and warranties had been made on, as of and with reference to
                 such time, and Purchaser shall have received a certificate to
                 such effect signed by each Seller.

        5.3.2    Performance and Compliance. The Sellers shall have performed
                 --------------------------
                 all of the covenants and complied with all of the provisions
                 required by this Agreement to be performed or complied with by
                 them on or before the Closing.

        5.3.3    Satisfactory Instruments. All instruments and documents
                 ------------------------
                 required on the Sellers' part to effectuate and consummate the
                 transactions contemplated hereby shall have been delivered to
                 Purchaser and shall be in form and substance reasonably
                 satisfactory to Purchaser and its counsel.

5.4     Conditions Precedent to Obligations of Sellers. The obligations of
        ----------------------------------------------
        Sellers to proceed with the Closing under this Agreement are subject to
        the fulfillment prior to or at Closing of the following conditions (any
        one or more of which may be waived in whole or in part by Sellers in
        Sellers" sole discretion):

        5.4.1    Bringdown of Representations and Warranties. Purchaser"s
                 -------------------------------------------
                 representations and warranties contained in this Agreement
                 shall be true and correct on and as of the time of Closing,
                 with the same force and effect as though such representations
                 and warranties had been made on, as of and with reference to
                 such time, and Sellers shall have received a certificate to
                 such effect signed by Purchaser.

        5.4.2    Performance and Compliance. The Purchaser shall have performed
                 all of the covenants and complied with all of the provisions
                 required by this Agreement to be performed or complied with by
                 it on or before the Closing Date.
<PAGE>

        5.4.3    Satisfactory Instruments. All instruments and documents
                 ------------------------
                 required on the Purchaser"s part to effectuate and consummate
                 the transactions contemplated hereby shall have been delivered
                 to Sellers and shall be in form and substance reasonably
                 satisfactory to Sellers and their counsel.

5.5     Finished Product Complaints; Recalls. The Sellers shall cooperate in
        ------------------------------------
        good faith with the Purchaser in matters regarding traceability of the
        Finished Product, complaints regarding the Finished Product, the
        vigilance system regarding the Finished Product and recalls (whether
        mandatory or voluntary) regarding the Finished Product. Each party shall
        provide information and data as reasonably required by the other party
        with respect to such matters and shall cooperate fully with the other
        party in order to permit the other party to meet its reporting
        requirements under applicable law.

        5.5.1    The decision to conduct a recall belongs solely to Sellers as
                 it relates to Finished Product manufactured by Sellers prior to
                 and on the Closing Date.

        5.5.2    The decision to conduct a recall belongs solely to Purchaser as
                 it relates to Finished Product manufactured by Purchaser after
                 the Closing Date.

        5.5.3    The parties will cooperate fully with each other in effecting
                 any recall of the Finished Product pursuant to this Section
                 5.5, including communications with any purchasers or users of
                 the Finished Product.

        5.5.4    Sellers shall bear all costs and expenses of any recall of the
                 Finished Product manufactured by Sellers on or before the
                 Closing Date and Purchaser shall bear all costs and expenses of
                 any recall of the Finished Product manufactured by Purchaser
                 after the Closing Date.

5.6     Sale of Product. After the Closing Date, Sellers agree that they shall
        ---------------
        not make, use, or sell any Finished Product until the expiration date of
        the last to expire of the Biogran" Patents.

5.7     Packaging and Labeling. If Purchaser, despite commercially reasonable
        ----------------------
        efforts, is unable to obtain packaging materials without Sellers' name
        and/or logo prior to the Closing Date, Sellers agree to allow Purchaser
        to use, for a reasonable period of time, Sellers' packaging materials
        with Sellers' name and/or logo in connection with its manufacture and
        sale of the Finished Product, provided that Purchaser places Purchaser's
                                      -------- ----
        label (a) securely and completely over the Sellers' name and/or logo
        (other than the packaging trays embossed with Sellers' name and/or logo)
        and (b) does so in compliance with all applicable regulatory
        requirements until Purchaser is able to obtain packaging materials
        without Sellers' name and/or logo.

5.8     Exchange of Information and Confidentiality. This Agreement contemplates
        -------------------------------------------
        the exchange of certain confidential and proprietary information
        relating to the Finished Product and the Transferred Assets by one party
        (the "Disclosing Party") to the other party (the "Receiving
<PAGE>

           Party") in the negotiations leading up to this Agreement and in the
           period between the Signing Date and the Closing Date.

           5.8.1     During the period between the Signing Date and the Closing
                     Date, with respect to the Confidential Information of the
                     Disclosing Party, each party, shall (a) use the respective
                     Confidential Information only for the purpose of performing
                     its duties or exercising its rights under this Agreement
                     and for no other purpose, subject to the terms and
                     conditions of this Agreement; (b) safeguard the respective
                     Confidential Information against disclosure to others with
                     the same degree of care as it exercises with its own data
                     of a similar nature; and (c) not disclose the respective
                     Confidential Information to others (except to those who are
                     bound by a like obligation of confidentiality and
                     restriction on use) without the express written consent of
                     the other party.

           5.8.2     The obligations of Section 5.8.1 shall not apply to that
                     Confidential Information of the Disclosing Party which: (a)
                     the Receiving Party can demonstrate by written records was
                     previously known to it; (b) is now, or in the future
                     becomes, public knowledge other than through the acts or
                     omissions of the Receiving Party; and (c) the Receiving
                     Party is required to disclose by law or pursuant to the
                     direction of a court or government agency, provided the
                     Disclosing Party is first given a reasonable opportunity to
                     contest such disclosure.

           5.8.3     Nothing contained herein is intended to prevent either
                     party from using the Confidential Information to obtain
                     necessary or appropriate regulatory approvals, to execute
                     or obtain patent rights in connection with the Transferred
                     Assets, or to use such Confidential Information in
                     disclosure instruments prepared by the parties to comply
                     with applicable securities laws.

           5.8.4     Except as otherwise set forth in this Agreement, the
                     furnishing of the Confidential Information of the
                     Disclosing Party to the Receiving Party shall not
                     constitute any grant or license to the Receiving Party
                     under any legal rights now or hereinafter held by the
                     Disclosing Party.

           5.8.5     The obligations of this Section 5.8 shall survive the
                     termination of this Agreement.

5.9        Marketing Materials. Purchaser shall be required to make its own
           -------------------
           determination whether the Marketing Materials are appropriate and
           suitable for Purchaser's use in connection with the sale and
           marketing of the Finished Product after the Closing Date.

5.9        CE Mark. Purchaser has in place valid certifications for ISO-9001 and
           -------
           EN-46001 and will maintain such certifications up to and including
           the Closing Date in order to facilitate obtaining Purchaser's CE Mark
           for the Finished Product.

5.10       Trademark Use. Other than as set forth in Section 5.7 and Purchaser"s
           -------------
           use and ownership of the Biogran(R) Trademarks, neither party shall,
           without written permission from the other,
<PAGE>

           use in any manner any trademark, trade name, design, symbol, logo
           styles, service mark, emblem or other mark owned by the other party;
           except as packaging of certain of the Inventory manufactured by
           Sellers and transferred hereunder may currently have such trademark,
           trade name, design, symbol, logo styles, service mark, emblem or
           other mark affixed to it as of the Closing Date.

5.11       Covenant Not To Sue. Sellers hereby agree to grant Purchaser,
           -------------------
           effective on the Closing Date, a covenant not to sue Purchaser with
           respect to its manufacture, distribution or sale of Finished Product
           for infringement of any issued patents or patent applications owned
           by Sellers.

5.12       Product Liability Insurance. After the Closing Date, Sellers shall
           ---------------------------
           maintain tail coverage with respect to its product liability
           insurance with coverage of at least $1 million per claim and $3
           million in the aggregate to cover any product liability claims
           arising from Finished Product manufactured by Sellers. Sellers shall
           provide, as soon as reasonably practicable, a copy of the certificate
           of insurance related to such insurance coverage and shall provide
           prompt notice to Purchaser of any change in such insurance.

5.13       Taxes and Unemployment Compensation. Sellers hereby agree to pay all
           -----------------------------------
           taxes and unemployment compensation contributions due for all periods
           prior to the Closing.

                                  ARTICLE VI
                                  ----------
                        REPRESENTATIONS AND WARRANTIES
                        ------------------------------

6.1        Representations and Warranties of Sellers. Sellers, jointly and
           -----------------------------------------
           severally, hereby represent and warrant to Purchaser that, as of the
           Signing Date:

         6.1.1        Corporate Status of Orthovita. Orthovita is a corporation
                      -----------------------------
                  duly incorporated and in good standing under the laws of the
                  Commonwealth of Pennsylvania, and has all requisite power and
                  authority to enter into this Agreement, to perform its
                  obligations hereunder and to consummate the transactions
                  contemplated hereby.

         6.1.2        Corporate Status of Vita Licensing. Vita Licensing is a
                      ----------------------------------
                  corporation duly incorporated and in good standing under the
                  laws of the State of Delaware, and has all requisite power and
                  authority to enter into this Agreement, to perform its
                  obligations hereunder and to consummate the transactions
                  contemplated hereby.

         6.1.3        Authority Relative to Agreement. The execution, delivery
                      -------------------------------
                  and performance of this Agreement by Sellers and the
                  consummation by Sellers of the transactions contemplated
                  hereby have been duly authorized by all necessary corporate
                  action, and this Agreement constitutes the legal, valid and
                  binding obligation of Sellers, enforceable against Sellers in
                  accordance with its terms, except as limited by (i) applicable
                  bankruptcy, insolvency, reorganization, moratorium and other
                  laws of general applicability relating to or affecting
                  creditors' rights, and (ii) equitable principles generally and
                  limitations on the availability of equitable remedies.

         6.1.4        Brokers and Finders. Neither Sellers nor any person, firm
                      -------------------
                  or corporation acting on
<PAGE>

                  their respective behalf has employed any broker, agent or
                  finder or incurred any liability for any brokerage fees,
                  agents' commissions or finders' fees in connection with the
                  transactions contemplated herein.

         6.1.5        Pending Actions. Except as disclosed in Schedule 6.1.5,
                      ---------------                         --------------
                  there are no claims, actions, proceedings, or investigations
                  pending or, to Sellers' Knowledge, threatened, against or
                  relating to the Transferred Assets or the Finished Product,
                  before any court, tribunal or regulatory body.

         6.1.6        Title to Properties; Encumbrances. Sellers have good and
                      ---------------------------------
                  marketable title in the Transferred Assets free and clear of
                  any and all liens, pledges, claims, charges, security
                  interests or other encumbrances. Vita Licensing and Orthovita
                  are the assignees of the Biogran(R) Patents, and Orthovita is
                  the owner of the Biogran(R) Know-How, the Biogran(R)
                  Trademarks, the Biogran(R) Regulatory Approvals, the Equipment
                  and the Inventory.

         6.1.7        Equipment. To Orthovita's Knowledge, the Equipment is in
                      ---------
                  good operating condition and repair (ordinary wear and tear
                  excepted), is not in need of any repair or maintenance (other
                  than normal and routine repair and maintenance) and it is
                  suitable and appropriate for the current use thereof made by
                  Orthovita in connection with manufacturing Finished Product.
                  ORTHOVITA EXPRESSLY DISCLAIMS ANY AND ALL OTHER WARRANTIES
                  WITH RESPECT TO THE EQUIPMENT, EXPRESS OR IMPLIED. ORTHOVITA
                  SHALL NOT HAVE ANY LIABILITY TO PURCHASER, ITS CUSTOMERS,
                  FINISHED PRODUCT END-USERS OR ANY OTHER PERSON OR ENTITY FOR
                  ANY DIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
                  ARISING OUT OF THE USE OR PERFORMANCE OF THE EQUIPMENT ON OR
                  AFTER THE CLOSING DATE.

         6.1.8        Liabilities. Other than listed in Schedule 1.6 and
                      -----------
                  Schedule 6.1.5, Sellers have no outstanding claims,
                  liabilities or indebtedness, contingent or otherwise, relating
                  to the Transferred Assets.

         6.1.9        Transferred Assets Complete. The Transferred Assets
                      ---------------------------
                  constitute all of the material assets and rights owned by the
                  Sellers relating to the manufacture, marketing and sale of the
                  Finished Product. Upon the transfer of the Transferred Assets
                  (other than any required regulatory approvals, Biogran(R)
                  Know-How and Biogran(R) Patents) to the Purchaser, the
                  Purchaser will have all of the material assets and rights
                  necessary to manufacture, market and sell Finished Product.
                  Upon the transfer of the Biogran(R) Regulatory Approvals to
                  the Purchaser, the Purchaser will have all of the material
                  assets and rights necessary to manufacture, market and sell
                  Finished Product in the United States and the European Union.
                  To Sellers" Knowledge, upon the transfer of the Biogran(R)
                  Know-How and Biogran(R) Patents to the Purchaser, the
                  Purchaser will own all of the intellectual property rights
                  necessary to manufacture, market and sell the Finished
                  Product.
<PAGE>

         6.1.10      Suppliers. The relationships of Orthovita with its
                     ---------
                  suppliers currently used to manufacture and package the
                  Finished Product, identified in Schedule 6.1.10, are good
                                                  ---------------
                  commercial working relationships and (i) none of these
                  suppliers have within the last 12 months threatened to cancel
                  or otherwise terminate, or to the Knowledge of Orthovita,
                  intend to cancel or terminate, the relationship of such
                  supplier with Orthovita, (ii) none of these suppliers have
                  during the last 12 months decreased materially or threatened
                  to decrease or limit materially any supply to Orthovita, or to
                  the Knowledge of Orthovita, intend to modify materially its
                  relationship with the Orthovita in connection with the
                  Finished Product or any of the Transferred Assets, (iii) none
                  of these suppliers have informed Orthovita of regulatory
                  matters that would preclude the continued manufacture of
                  Finished Product, and (iv) to the Knowledge of Orthovita, the
                  consummation of the transactions contemplated hereby will not
                  materially affect the ability of any of these suppliers to
                  provide supplies related to Finished Product. Vita Licensing
                  does not have a relationship with any of the suppliers set
                  forth in Schedule 6.1.10.
                           ---------------

         6.1.11      Compliance with Laws. Sellers are in compliance, and have
                     --------------------
                  not received any notice of any alleged violation, of any
                  applicable federal, state or local law, ordinance, regulation,
                  order, judgment or other requirement of any governmental or
                  regulatory body, court or arbitrator, which violation could
                  have a material adverse effect on the condition of the
                  Transferred Assets or the Finished Product. Orthovita
                  currently has all Biogran(R) Regulatory Approvals necessary to
                  manufacture, market and sell the Finished Product in the
                  United States and the European Union and such regulatory
                  approvals have not been withdrawn or revoked. No material
                  violations exist in respect of any Biogran(R) Regulatory
                  Approval and no proceeding is pending or, to Sellers"
                  Knowledge, threatened, to revoke or limit any Biogran(R)
                  Regulatory Approval.

         6.1.12      Inventory. The Finished Product described on Schedule 3.3.2
                     ---------                                    --------------
                  manufactured by Orthovita or its designee has been
                  manufactured, stored, packaged, and labeled by Orthovita or
                  its designee in accordance with applicable warranties and
                  Specifications. The Finished Product is of merchantable
                  quality, fit for the purpose intended and free of defects in
                  design and manufacture. The raw material described on the list
                  of Inventory is suitable for use in and in condition for the
                  manufacture of Finished Product in conformity with applicable
                  warranties and Specifications. The list of Inventory, listed
                  on Schedule 3.3.2, is true and correct in all material
                     --------------
                  respects. To Orthovita's Knowledge, there are no adverse
                  conditions materially affecting the supply of items of
                  Inventory. EXCEPT FOR THE FOREGOING AND THE REPRESENTATIONS
                  AND WARRANTIES OF ORTHOVITA SET FORTH IN THIS SECTION 6.1,
                  ORTHOVITA MAKES NO WARRANTY OF ANY KIND WITH RESPECT TO
                  INVENTORY, EITHER EXPRESS OR IMPLIED, BY FACT OR LAW, OTHER
                  THAN ORTHOVITA'S IMPLIED WARRANTIES OF TITLE, FREEDOM FROM
                  ENCUMBRANCE, AND RIGHT TO TRANSFER SAME.

         6.1.13      Tax Matters. Sellers have filed all federal, state, county,
                     -----------
                  local and other tax returns, reports and forms that each
                  Seller is required to file with respect to the
<PAGE>

                  Transferred Assets. There are no present disputes as to taxes
                  of any nature payable by Sellers with respect to the
                  Transferred Assets.

         6.1.14      Studies and Information. All written information provided
                     -----------------------
                  by Sellers to Purchaser regarding the safety and efficacy of
                  the Finished Product, identified in Schedule 6.1.14, is true
                                                      ---------------
                  and accurate in all material respects.

         6.1.15      Full Disclosure. The material documents and other papers
                     ---------------
                  delivered by or on behalf of Sellers in connection with this
                  Agreement are true, complete and authentic. None of the
                  Sellers' representations or warranties contained in this
                  Agreement contain an untrue statement of a material fact or
                  omit to state a material fact necessary to prevent the
                  statements, in the context in which made, from being
                  materially false or misleading. There are no material facts
                  that were not disclosed to the Purchaser in writing that would
                  have a material adverse effect on the condition of the
                  Transferred Assets or the ability of the Sellers to perform
                  their material obligations under this Agreement.

         6.1.16      No Breach. The execution, delivery and performance of this
                     ---------
                  Agreement by the Sellers and the consummation of the
                  transactions contemplated hereby by the Sellers will not (a)
                  violate, conflict with or result in the breach of any
                  provision of the Articles of Incorporation or Bylaws of each
                  Seller; (b) violate or result in the material breach of any of
                  the terms of any material contract to which a Seller is a
                  party or to which it or any of the Transferred Assets may be
                  bound or subject; (c) violate any statute, law or regulation
                  of any jurisdiction; or (d) violate or result in the
                  revocation, invalidity or suspension of any Biogran(R)
                  Regulatory Approval.

         6.1.17      No Third Party Rights. To Sellers' Knowledge, no third
                     ---------------------
                  party rights are required to manufacture, market or sell the
                  Finished Product under the Biogran(R) Patents or Biogran(R)
                  Know-How assigned to Purchaser hereunder. Sellers have not
                  entered into any arrangements with third parties which would
                  allow them to circumvent this Agreement and continue to make,
                  use and sell Finished Product under the Biogran(R) Patents.

         6.1.18      Intellectual Property. To Sellers' Knowledge, all
                     ---------------------
                  Biogran(R) Patents, Biogran(R) Trademarks, and Biogran(R)
                  Know-How that are used with or incorporated into the Finished
                  Product are owned exclusively by Sellers, free and clear of
                  claims or rights of any other person or entity. To Sellers'
                  Knowledge, the use, development, manufacture, or sale of
                  Finished Product by the Purchasers will not infringe a valid
                  claim of any third party patent. Sellers have not communicated
                  with any third party to the effect that the actions or
                  products of that third party may conflict with or infringe any
                  rights of the Sellers under the Biogran(R) Patents, Biogran(R)
                  Trademarks, or Biogran(R) Know-How. Except as set forth in
                  Schedule 6.1.5, no claim is pending regarding the Intellectual
                  --------------
                  Property. Except as set forth in Schedule 6.1.5, Sellers have
                                                   --------------
                  not received notice from any third party to the effect that
                  the Finished Product, Biogran(R) Patents, Biogran(R)
                  Trademarks, or Biogran(R) Know-How infringes upon, may
                  infringe upon, or conflicts with the rights of the third party
                  or any other persons
<PAGE>

                  and, to Sellers' Knowledge, there is no basis for any such
                  claim (whether or not pending or threatened). Except as set
                  forth in Schedule 6.1.5, Sellers have not received any written
                           --------------
                  communication from any third party to the effect that any of
                  the Biogran(R) Patents or Biogran(R) Trademarks may be invalid
                  or unenforceable and to Sellers' Knowledge, there is no basis
                  for any such claim (whether or not pending or threatened).

         6.1.19      Consents. No consents are required of any third party for
                     --------
                  the Sellers to enter into this Agreement or sell the
                  Transferred Assets.

         6.1.20      Contracts and Other Agreements. Schedule 1.6, Subsection B
                     ------------------------------  --------------------------
                  sets forth all of the material contracts, oral agreements, and
                  other commitments relating to the manufacture and sale of the
                  Finished Product and use of the Transferred Assets to which
                  the Sellers are a party or by or to which any of the
                  Transferred Assets are bound. Neither Seller is in default
                  under any Contract, nor is any other party to any Contract in
                  default, nor does any condition exist that with notice or
                  lapse of time or both would constitute a default under any
                  Contract. Schedule 1.6, Subsection B also lists and describes
                            --------------------------
                  the status of all Contracts currently in negotiation or
                  proposed by each Seller relating to the Finished Product or
                  the Transferred Assets that would be required to be listed on
                  Schedule 1.6, Subsection B if entered into by a Seller.
                  --------------------------

6.2        Representations and Warranties of Purchaser. Purchaser hereby
           -------------------------------------------
           represents and warrants to Sellers that, as of the Signing Date:

         6.2.1    Corporate Status of Purchaser. Purchaser is a corporation duly
                  -----------------------------
                  incorporated, validly existing and in good standing under the
                  laws of Florida, and has all requisite power and authority to
                  enter into this Agreement, to perform its obligations
                  hereunder and to consummate the transactions contemplated
                  hereby.

         6.2.2    Authority Relative to Agreement. The execution, delivery and
                  -------------------------------
                  performance of this Agreement by Purchaser and the
                  consummation by Purchaser of the transactions contemplated
                  hereby have been duly authorized by all necessary corporate
                  action, and this Agreement constitutes the legal, valid and
                  binding obligation of Purchaser, enforceable in accordance
                  with its terms, except as limited by (i) applicable
                  bankruptcy, insolvency, reorganization, moratorium and other
                  laws of general applicability relating to or affecting
                  creditors' rights, and (ii) equitable principles generally and
                  limitations on the availability of equitable remedies.

         6.2.3    Brokers and Finders. Neither Purchaser nor any person, firm or
                  -------------------
                  corporation acting on its behalf has employed any broker,
                  agent or finder or incurred any liability for any brokerage
                  fees, agents' commissions or finders' fees in connection with
                  the transactions contemplated herein.

         6.2.4    CE Mark. To Purchaser's Knowledge, Purchaser should receive in
                  -------
                  a timely manner the written notification from its Notified
                  Body that the CE Certificate for the Finished Product will be
                  issued in the Purchaser"s name, provided that Purchaser
                  receives in a
<PAGE>

                  timely manner the documents Sellers are required to deliver
                  under Section 4.1.

         6.2.5    No Breach. The execution, delivery and performance of this
                  ---------
                  Agreement by the Purchaser and the consummation of the
                  transactions contemplated hereby by the Purchaser will not (a)
                  violate, conflict with or result in the breach of any
                  provision of the Articles of Incorporation or Bylaws of the
                  Purchaser; (b) violate or result in the material breach of any
                  of the terms of any material contract to which Purchaser is a
                  party; or (c) violate any statute, law or regulation of any
                  jurisdiction.

         6.2.6    Consents. No consents are required of any third party for the
                  --------
                  Purchaser to enter into this Agreement and purchase the
                  Transferred Assets.

                                  ARTICLE VII
                                  -----------
                    SURVIVAL OF REPRESENTATIONS; INDEMNITY
                    --------------------------------------

7.1      Survival of Representations. The respective representations and
         ---------------------------
         warranties of the parties contained in this Agreement and the
         obligations to indemnify and hold harmless pursuant to this Article
         shall survive the consummation of the transactions contemplated hereby.

7.2      Sellers' Indemnifications. Sellers, jointly and severally, agree to
         -------------------------
         indemnify and hold harmless Purchaser and each of its affiliates,
         officers, directors, employees, agents, successors and assigns
         (collectively with Purchaser, "Purchaser's Indemnified Persons") from,
         against and in respect of all damages, losses or expenses suffered or
         paid, directly or indirectly, as a result of any and all third party
         claims, demands, suits, causes of action, proceedings, judgments and
         liabilities, including reasonable counsel fees and expenses incurred in
         litigation or otherwise, assessed, incurred or sustained by or against
         Purchaser's Indemnified Persons with respect to or arising out of (i)
         each of the actions listed in Schedule 6.1.5; (ii) any sales, use,
                                       --------------
         excise or transfer taxes which may be imposed in connection with the
         Transferred Assets on or before the Closing Date; (iii) Sellers'
         operation of the Transferred Assets on or before the Closing Date; (iv)
         any Finished Product manufactured by Orthovita or its designee on or
         before the Closing Date; (v) any infringement of third party rights
         resulting from Sellers' manufacture or sale of Finished Product on or
         before the Closing Date; and (vi) Sellers' promotion, distribution,
         marketing or sale of the Finished Product on or before the Closing
         Date.

7.3      Purchaser's Indemnifications. Purchaser agrees to indemnify and hold
         ----------------------------
         harmless Sellers and each of their affiliates, officers, directors,
         employees, agents, successors and assigns (collectively with Sellers,
         "Sellers' Indemnified Persons") from, against and in respect of all
         damages, losses or expenses suffered or paid, directly or indirectly,
         as a result of any and all third party claims, demands, suits, causes
         of action, proceedings, judgments and liabilities, including reasonable
         counsel fees and expenses incurred in litigation or otherwise,
         assessed, incurred or sustained by or against Sellers' Indemnified
         Persons with respect to or arising out of (i) any Finished Product
         manufactured by Purchaser or its designee after the Closing Date; (ii)
         any sales, use, excise or transfer taxes which
<PAGE>

         may be imposed for operating the Transferred Assets after the Closing
         Date; (iii) Purchaser's operation of the Transferred Assets after the
         Closing Date; (iv) except as to matters identified in Schedule 6.1.5 or
                                                               --------------
         matters relating to a breach of a representation or warranty of Sellers
         relating to intellectual property under Section 6.1.18 of this
         Agreement, any infringement of third party rights resulting from
         Purchaser's manufacture or sale of Finished Product after the Closing
         Date; and (v) Purchaser's promotion, distribution, marketing or sale of
         the Finished Product after the Closing Date.

7.4      Mutual Indemnifications. Each party agrees to indemnify and hold
         -----------------------
         harmless Sellers' Indemnified Persons or Purchaser's Indemnified
         Persons, as the case may be, from, against and in respect of all
         damages, losses or expenses suffered or paid, directly or indirectly,
         as a result of any and all claims, demands, suits, causes of action,
         proceedings, judgments and liabilities, including reasonable counsel
         fees and expenses incurred in litigation or otherwise, assessed,
         incurred or sustained by or against the other with respect to or
         arising out of (a) any breach of a covenant or agreement in this
         Agreement by that party or (b) the failure of any representation or
         warranty made by such party in this Agreement to be true and correct in
         all respects as of the Closing Date.

7.5      Deductible. Except as set forth in the second sentence of this Section
         ----------
         7.5, if the Purchaser seeks indemnification under Section 7.2 or 7.4,
         it may not make any claim for such indemnification under this Article
         against Sellers unless and until the aggregate amount of all such
         claims against such Sellers exceed $200,000 (the "Deductible"),
         whereupon the Purchaser may claim indemnification for the amount of all
         such claims, excluding the Deductible. This Section 7.5 (Deductible)
         shall not apply to the actions listed in Schedule 6.1.5 nor shall it
                                                  --------------
         apply to Seller's breach of its covenant in Section 5.13.

7.6      Procedure for Indemnification.
         -----------------------------

         7.6.1    In the case of any claim, demand, action or proceeding for
                  which indemnification is sought pursuant to Sections 7.2, 7.3
                  or 7.4, the party or parties seeking indemnification (the
                  "Indemnitee") shall promptly notify the party or parties from
                  whom indemnification is sought (the "Indemnitor") in writing
                  of the existence and nature of such claim, demand, action or
                  proceeding specifying the nature of such claim or demand and
                  the amount or the estimated amount thereof to the extent then
                  feasible, which estimate shall not be conclusive of the final
                  amount of such claim or demand (the "Claim Notice"). No
                  failure or delay by the Indemnitee in the performance of the
                  foregoing shall reduce or otherwise affect the obligation of
                  the Indemnitor to indemnify and hold the Indemnitee harmless.
                  The Indemnitor shall have ten (10) business days from the date
                  of delivery of the Claim Notice (the "Notice Period") to
                  notify the Indemnitee whether or not the Indemnitor disputes
                  its liability to the Indemnitee hereunder with respect to such
                  claim or demand and, notwithstanding any such dispute, whether
                  or not it desires, at its sole cost and expense, to defend the
                  Indemnitee against any such claim or demand.
<PAGE>

         7.6.2    If such claim, demand, action or proceeding is by a third
                  party (a "Claim"), the Indemnitee hereby agrees that it shall
                  give the Indemnitor a reasonable opportunity to defend the
                  same or prosecute such action to conclusion or settlement
                  satisfactory to the Indemnitor at its sole cost and expense
                  and with counsel of its own selection (who shall be approved
                  by the Indemnitee, which approval shall not be unreasonably
                  withheld) and the Indemnitor shall pay any resulting
                  settlements, judgments or decrees. If the Indemnitor controls
                  the defense of any such claim, allegation, suit or proceeding,
                  the Indemnitor shall vigorously defend such claim, allegation,
                  suit or proceeding. The Indemnitee shall at all times also
                  have the right fully to participate in the defense at
                  Indemnitee's sole costs and expense so long as such
                  participation occurs without hindering or impairing the
                  defense of the Indemnitor. If the Claim is one that cannot by
                  its nature be defended solely by the Indemnitor, the
                  Indemnitee shall make available all information and assistance
                  that the Indemnitor may reasonably request; provided, however,
                                                              --------  -------
                  that any associated out-of-pocket expenses shall be paid by
                  the Indemnitor.

         7.6.3    With respect to the matter described as European Patent
                  Office, Opposition, Number T-0307/99-332 on Schedule 6.1.5 to
                                                              --------------
                  this Agreement (the "Existing Matter"), Purchaser shall
                  control the prosecution and defense of the Existing Matter,
                  provided that Purchaser (a) retains Sellers' existing counsel
                  Woodcock Washburn Kurtz Mackiewicz & Norris LLP and Ablett &
                  Stebbing ("Existing Counsel") in connection with such Existing
                  Matter, (b) shall within seven (7) business days promptly
                  submit all invoices relating to costs of defense of the
                  Existing Matter to Sellers (in which case, Sellers shall,
                  within thirty (30) days of receipt, remit its payment to
                  Purchaser), and (c) provides Sellers the opportunity to
                  participate in settlement discussions, if any, with respect to
                  the Existing Matter. Any settlement of the Existing Matter
                  shall be subject to Sellers' prior written consent, not to be
                  unreasonably withheld. If Purchaser does not retain the
                  Existing Counsel, Purchaser may control the prosecution and
                  defense of the Existing Matter but Sellers shall only be
                  required to pay up to $25,000 for legal costs and expenses
                  with respect to the Existing Matter.

         7.6.4    If the Indemnitor elects not to defend the Indemnitee against
                  a claim or demand, either by written notice or by failure to
                  respond within the Notice Period, then Indemnitee may defend
                  such claim or demand at its sole cost and expense. If any
                  Indemnitor desires to participate in, but not control, any
                  such defense it may do so at its sole cost and expense.
                  Indemnitor shall reimburse Indemnitee for its reasonable costs
                  and expenses and the amount of any resulting judgment or
                  settlement.

         7.6.5    Prior to the termination of the Escrow Agreement, upon the
                  determination of a Purchaser's Indemnified Person's right to
                  indemnification under this Agreement, the Indemnitor and the
                  Indemnitee shall execute and deliver a joint written
                  instruction to the Escrow Agent setting forth the amount of
                  Escrow Funds to be disbursed to the Purchaser's Indemnified
                  Person.
<PAGE>

         7.6.6    The indemnification rights under this Section are independent
                  of and in addition to such rights and remedies as the parties
                  may have at law or in equity or otherwise for any
                  misrepresentation, breach of warranty or failure to fulfill
                  any agreement or covenant hereunder on the part of any party
                  hereto including, without limitation, the right to seek
                  specific performance, rescission or restitution, none of which
                  rights or remedies shall be affected or diminished hereby.

                                 ARTICLE VIII
                                 ------------

                           TERMINATION OF AGREEMENT.
                           ------------------------

8.1        Termination. This Agreement may be terminated prior to the Closing
           -----------
           Date as follows:

         8.1.1    at the election of Purchaser or Sellers, as the case may be,
                  if the other party has not fulfilled any one or more of the
                  conditions to its respective obligations to close by the
                  Closing Date fixed by this Agreement;

         8.1.2    at the election of Purchaser or Sellers, as the case may be,
                  if the other party has breached any material representation,
                  warranty, covenant or agreement contained in this Agreement
                  which breach cannot be or is not cured by the Closing Date;

         8.1.3    at the election of Purchaser or Sellers, if any legal
                  proceeding is commenced or threatened by any governmental or
                  regulatory body or other person directed against the
                  consummation of the Closing and either Purchaser or Sellers,
                  as the case may be, reasonably and in good faith deems it
                  impractical or inadvisable to proceed in view of such legal
                  proceeding or threat thereof; or

         8.1.4    at any time on or prior to the Closing Date, by mutual written
                  agreement of the Sellers and the Buyer.

8.2        Survival. If this Agreement is terminated in accordance with its
           --------
           terms and the transactions contemplated hereby are not consummated as
           described above, this Agreement shall become void and of no further
           force and effect, except for the provisions of Sections 5.8, 8, 9.4
           and 9.11.

                                  ARTICLE IX
                                  ----------
                                 MISCELLANEOUS
                                 -------------

9.1        Execution in Counterparts. For the convenience of the parties, this
           -------------------------
           Agreement may be executed in counterparts, each of which shall be
           deemed an original, but all of which together shall constitute one
           and the same document.

9.2        Notices. All notices which are required or may be given pursuant to
           -------
           the terms of this Agreement shall be in writing and shall be
           sufficient in all respects if given in writing and delivered or
           mailed by registered mail, certified mail, or express courier,
           postage prepaid, or if sent by telex or telefax (in each case
           promptly confirmed by registered or certified mail postage prepaid)
           as follows:
<PAGE>

            If to Sellers, to:

                 Orthovita, Inc.
                 45 Great Valley Parkway
                 Malvern, Pennsylvania 19355
                 Fax: (610) 640-1714
                 Attention:  Bruce A. Peacock, Chief Operating Officer and
                             President

                 Vita Licensing, Inc.
                 300 Delaware Avenue
                 Suite 900, 9th Floor
                 MC " DE5403
                 Wilmington, Delaware 19801
                 Fax:  (302) 552-3128
                 Attention:  Joseph M. Paiva, Vice President

            With a copy to:

                 Morgan, Lewis & Bockius LLP
                 1701 Market Street
                 Philadelphia, PA 19103
                 Fax: (215) 963-5299
                 Attention: David R. King, Esquire

            If to Purchaser, to:

                 Implant Innovations, Inc.
                 4555 Riverside Drive
                 Palm Beach Gardens, Florida 33410
                 Fax: (561) 776-6833
                 Attention: President

            With a copy to:

                 Steel, Hector & Davis LLP
                 1900 Phillips Point West
                 777 South Flagler Drive
                 West Palm Beach, Florida 33401
                 Fax: (561) 655-1509
                 Attention:  Thomas G. O"Brien, III, Esquire

         or such other address as a party hereto shall have designated by notice
         in writing to the other parties hereto. Unless otherwise provided
         herein, all notices, demands and requests sent in
<PAGE>

           the manner provided herein shall be effective upon the earlier of
           delivery thereof or three days after the mailing thereof by
           registered or certified mail.

9.3        Waivers. Either party hereto may, by written notice executed by an
           -------
           authorized representative and provided to the other party hereto, (a)
           extend the time for the performance of any of the obligations or
           other actions of the other under this Agreement; (b) waive any
           inaccuracies in the representations or warranties of the other party
           contained in this Agreement or in any document delivered pursuant to
           this Agreement; (c) waive compliance with any of the conditions to
           its obligations contained in this Agreement; or (d) waive or modify
           performance of any of the obligations of the other party under this
           Agreement. Except as provided in the preceding sentence, no action
           taken pursuant to this Agreement shall be deemed to constitute a
           waiver, by either party taking such action, of compliance with any
           representation, warranty, covenant or agreement contained in this
           Agreement. The waiver by any party hereto of a breach of any
           provision of this Agreement shall not operate or be construed as a
           waiver of any subsequent breach.

9.4        Publicity. The parties hereto will consult with each other before
           ---------
           issuing any press release or making any public statement with respect
           to this Agreement and the transactions contemplated by this
           Agreement, and, except as may be required by applicable law or any
           stock exchange regulations, no party shall issue any such press
           release or make any such public statement without the consent of the
           other parties hereto, which consent shall not be unreasonably
           withheld.

9.5        Entire Agreement. This Agreement, together with the Exhibits and
           ----------------
           Schedules hereto, constitutes the entire agreement among the parties
           hereto with respect to the subject matter hereof and supersedes all
           prior representations, agreements and understandings, oral or
           written, by or among the parties hereto with respect to the subject
           matter hereof.

9.6        Applicable Law. This Agreement and the legal relations between the
           --------------
           parties hereto shall be governed by and construed in accordance with
           the laws of the Commonwealth of Pennsylvania.

9.7        Jurisdiction. Any judicial proceeding brought against either party to
           ------------
           this Agreement in connection with any dispute arising out of this
           Agreement or any matter related hereto may be brought in the federal
           or state courts of the Commonwealth of Pennsylvania and, by execution
           and delivery of this Agreement, each of the parties to this Agreement
           accepts for itself the exclusive jurisdiction of the aforesaid
           courts, and irrevocably agrees to be bound by any judgment rendered
           thereby in connection with this Agreement.

9.8        Binding Effect; Benefits. This Agreement shall inure to the benefit
           ------------------------
           of and be binding upon the parties hereto and their respective
           successors and permitted assigns. Nothing in this Agreement,
           expressed or implied, is intended to confer on any person other than
           the parties hereto or their respective successors and permitted
           assigns, any rights, remedies, obligations or liabilities under or by
           reason of this Agreement.
<PAGE>

9.9        Assignability. Neither this Agreement nor any of the parties' rights
           -------------
           hereunder shall be assignable by either party hereto without the
           prior written consent of the other party hereto.

9.10       U.S. Dollars. Any and all references herein to the word "Dollars" or
           ------------
           the symbol "$" is a reference to United States Dollars.

9.11       Expenses. Each party agrees to pay its transfer, excise or related
           --------
           taxes payable by reason of the consummation of the transactions
           contemplated in this Agreement. Each party shall pay its own legal
           fees and disbursements and other expenses incurred in connection with
           this Agreement.

9.12       Rights of Third Parties. Nothing in this Agreement shall be construed
           -----------------------
           as giving any person, firm, corporation or other entity, other than
           the parties hereto and their respective successors and permitted
           assigns, any right, remedy or claim under or in respect of this
           Agreement or any provision hereof.

9.13       Captions; Language. The Article and Section captions used herein are
           ------------------
           for reference purposes only, and shall not in any way affect the
           meaning or interpretation of this Agreement. In this Agreement,
           unless the context otherwise requires, the singular includes the
           plural, the plural, the singular, and the word "or" is used in the
           inclusive sense.

9.14       Amendments. This Agreement may not be changed orally, but only by an
           ----------
           agreement in writing signed by Sellers and Purchaser and making
           specific reference to this Agreement and Section. Any provision of
           this Agreement can be waived, amended, supplemented or modified by
           the written agreement of Sellers and Purchaser.

9.15       Severability. In case any provision in this Agreement shall be held
           ------------
           invalid, illegal or unenforceable, the validity, legality and
           enforceability of the remaining provisions hereof will not in any way
           be affected or impaired thereby.

9.16       Cross References; Exhibits. References in this Agreement to Articles,
           --------------------------
           Sections, Schedules and Exhibits are references to Articles and
           Sections of this Agreement and to Schedules and Exhibits attached to
           this Agreement. The Schedules and Exhibits are hereby made a part of
           this Agreement.

9.17       Further Assurances. At any time and from time to time, each party
           ------------------
           hereto, without further consideration, shall cooperate, take such
           further action and execute and deliver such further instruments and
           documents as may be reasonably requested by any other party in order
           to carry out the provisions and purposes of this Agreement and to
           transfer possession of and good title to the Transferred Assets to
           Purchaser. This obligation shall survive the consummation of the
           transactions contemplated hereby.
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the date first
above written.

                               IMPLANT INNOVATIONS, INC.

                               By: /s/ Edward Sabin
                               Title: Vice President, Finance and Administration

                               ORTHOVITA, INC.

                               By: /s/ Bruce A. Peacock
                               Title:  President and Chief Operating Officer

                               VITA LICENSING, INC.

                               By: /s/ Joseph M. Paiva
                               Title: Vice President
<PAGE>

                  FEBRUARY 10, 2000 -- SCHEDULES AND EXHIBITS
                  -------------------------------------------

SCHEDULES

     Schedule 1.2       Biogran(R) Know-How
     Schedule 1.3       Biogran(R) Patents
     Schedule 1.4       Biogran(R) Regulatory Approvals
     Schedule 1.5       Biogran(R) Trademarks
     Schedule 1.6       Contracts
     Schedule 1.7       Equipment
     Schedule 1.9       Inventory
     Schedule 1.11      Marketing Materials
     Schedule 1.14      Specifications
     Schedule 3.3.2     Revised Inventory List
     Schedule 3.5       Purchase Price Allocation
     Schedule 3.7       Current CORTOSS(TM) and ORTHOCOMP(TM) Products
     Schedule 4.2A      Form of Biogran(R) Patent Assignment
     Schedule 4.2B      Form of Biogran(R) Regulatory Approval Assignment
     Schedule 4.2C      Form of Biogran(R) Trademark Assignment
     Schedule 4.3.1     Wiring Instructions
     Schedule 6.1.5     Pending Actions
     Schedule 6.1.10    Suppliers
     Schedule 6.1.14    Studies and Information

EXHIBITS

     Exhibit 4.2D       Form of Escrow Agreement
     Exhibit 4.2E       Form of Bill of Sale
     Exhibit 4.2F       Form of Termination Agreement for Distribution Agreement
     Exhibit 4.2G       Form of Assignment of Contracts
     Exhibit 4.2H       Form of Legal Opinion of Sellers' Counsel
     Exhibit 4.3A       Form of Legal Opinion of Purchaser"s Counsel
<PAGE>

                                 Schedule 1.2
                              Biogran(R) Know-How

                   Manufacturing and Packaging of Biogran(R)

MO-SCI Standard Operation Procedure Index
For C1099 Project

     SOP #                          Title                         Version
     -------                        -----                         -------
SOP#C1099-1           Raw Material Inspection & Handling              1.4
SOP#C1099-2           Batching Process                                1.5
SOP#C1099-3           Melting and Draining                            1.4
SOP#C1099-4           Drying Process                                  1.2
SOP#C1099-6           Crushing by Hand                                1.1
SOP#C1099-9           Daily Log for Hand Crushing                     1.1
SOP#C1099-10          Screening for Fibers                            1.1
SOP#C1099-11          Engineering Change Order                        1.0
SOP#C1099-13          Final Product Release                           1.2
SOP#C1099-14          Grinding by Machine                             1.3
SOP#C1099-15          Remelting Procedure                             1.0
SOP#C1099-17          Furnace Calibration                             1.0
SOP#C1099-18          Furnace Maintenance                             1.0
SOP#C1099-19          Personnel Responsibility                        1.0
SOP#C1099-20          Vorti-Siv Cleaning                              1.0
SOP#C1099-21          Precision Screen of Biogran(R)                  1.0

Ethox Corporation Device Master Record Index

Ethox Corp Device Master Record for Part Number 2100-0001 (2 pack, 750 mg.
Syringe)
Ethox Corp Device Master Record for Part Number 2100-0002 (7 pack, 750 mg.
Syringe)
Ethox Corp Device Master Record for Part Number 2100-0003 (7 pack, 500 mg. Cup)
Ethox Corp Device Master Record for Part Number 2100-0004 (7 pack, 750 mg. Cup)
Ethox Corp Device Master Record for Part Number 2100-0005 (7 pack, 1550 mg. Cup)

Steris-Isomedix Sterilization Specification

Packaged Product is Gamma sterilized utilizing 25kGy minimum dosage, with
validation performed by Pharmaceutical Systems, Inc., Mundelein, Illinois,
consistent with the recommendations of ANSI/AAMI/ISO 11137, 1994.
<PAGE>

                                 Schedule 1.3
                              Biogran(R) Patents

I.  Title:  Process for Restoring an Osseous Defect or Deficiency by Filling
with Osseous Tissue

Country                                       Patent No.
--------                                      ----------
United States                                 5,204,106
Austria                                       107519
Belgium                                       09000433
Canada                                        2,014,940
German Democratic Republic                    293728
(Former)
Germany                                       EP 394152
European Patent Office                        394152
Spain                                         2,055,386
France                                        8905504
Japan                                         1,873,690
Switzerland                                   EP 394152
Denmark                                       EP 394152
Great Britain                                 EP 394152
Greece                                        3,012,309
Italy                                         26375BE/94
Luxembourg                                    EP 394152
the Netherlands                               EP 394152
Sweden                                        EP 394152

II.  Title:  Bioactive Granules for Bone Tissue Formation

Country                                       Patent or Application No.
-------                                       -------------------------
United States                                 5,658,332*
European Patent Office                        869749
Austria                                       EP 869749
Belgium                                       EP 869749
Denmark                                       EP 869749
France                                        EP 869749
Great Britain                                 EP 869749
Germany                                       EP 869749
Greece                                        EP 869749
Ireland                                       EP 869749
Italy                                         EP 869749
Luxembourg                                    EP 869749
Monaco                                        EP 869749
Netherlands                                   EP 869749
Portugal                                      EP 869749
Spain                                         EP 869749
Sweden                                        EP 869749
Switzerland                                   EP 869749
India                                         699/CAL/95
Japan                                         503243/96

*The U.S. patent is the only issued patent in the family; the others are pending
applications.
<PAGE>

                                 Schedule 1.4
                        Biogran(R) Regulatory Approvals

                                   510K--US
                                   --------

K941780, decision date 02/10/95, and
K952922, decision date 12/19/95.

                                  CE MARK--EU
                                  -----------

CE Certificate, Medical Devices, Class III products, Certificate Number
CE2240.01
EC Design Examination Certificate, Class III products,
Certificate Number DEXAM2240.01
SYSTEMCERTIFICATE, meets ISO9001 and EN46001 requirements,
Certificate Number S97.070A

Note:  The CE Mark is not transferable. The Purchaser must register for its own
CE Mark.
<PAGE>

                                 Schedule 1.5
                             Biogran(R) Trademarks

United States
Mark                     Registration No.          Registration Date
----                     ----------------          -----------------
BIOGRAN(R)               2,034,186                 1/28/97

Argentina
Mark                     Application No.           Filing Date
----                     ---------------           -----------
BIOGRAN(R)               1978993                   5/29/95

Brazil
Mark                     Registration No.          Registration Date
----                     ----------------          -----------------
BIOGRAN(R)               818742259                 5/5/98

Chile
Mark                     Registration No.          Registration Date
----                     ----------------          -----------------
BIOGRAN(R)               465,076                   7/30/96

Colombia
Mark                     Registration No.          Registration Date
----                     ----------------          -----------------
BIOGRAN(R)               181,748                   11/29/95

European Community
Mark                     Registration No.          Effective Registration Date*
----                     ----------------          ---------
BIOGRAN(R)               64725                     4/1/96

Mexico
Mark                     Registration No.          Effective Registration Date*
----                     ----------------          ----------------------------
BIOGRAN(R)               530,711                   7/28/95

*This date, actually the filing date, should be used to calculate expiration of
the registration and renewal periods. These periods are measured in 10-year
increments beginning with the filing date. In many countries, such statutory
periods are based on the filing date, although retroactive protection for events
occurring between the filing date and the actual registration date is not
available.
<PAGE>

                                 Schedule 1.6
                                   Contracts

A.

Contracts:

<TABLE>
<CAPTION>
                                    --------------------------------------------------------------------           --------------
                                                                  UNITS                                             Lots of Raw
                                    --------------------------------------------------------------------
                                                  Finished Goods Inventory Part Number                              Material
                                    --------------------------------------------------------------------
                                    2100-0001    2100-0002    2100-0003    2100-0004     2100-0005                  Bioglass
                                    --------------------------------------------------------------------
<S>                                 <C>          <C>          <C>          <C>           <C>
Ethox P.O. 99040501                            0          600            0             0            0
Ethox P.O. 99110902                            0            0        1,350             0          150
Ethox P.O. 00013108                            0          900            0             0            0
Mo-Sci P.O. 00010455
Steris " Isomedix P.O. 00013105                0            5            3             0            1
(Lots)                     13
Mo-Sci P.O. 00010437 (space
rental=$3,438/yr)
</TABLE>

Quality:

Mo-Sci Corporation     cGMP compliance agreement between Orthovita, Inc. and Mo-
                         Sci Corporation dated November 29, 1999.

Ethox Corporation      cGMP compliance agreement between Orthovita, Inc. and
                         Ethox Corporation dated December 9, 1996.
<PAGE>

B.

Contracts:

<TABLE>
<CAPTION>
                                  -------------------------------------------------------------------               --------------
                                                                  UNITS                                             Lots of Raw
                                  -------------------------------------------------------------------
                                                  Finished Goods Inventory Part Number                              Material
                                  -------------------------------------------------------------------
                                    2100-0001    2100-0002    2100-0003    2100-0004     2100-0005                  Bioglass
                                  -------------------------------------------------------------------               --------------
<S>                               <C>            <C>          <C>          <C>           <C>                        <C>
Ethox P.O. 99040501                            0          600            0             0            0
Ethox P.O. 99110902                            0            0        1,350             0          150
Ethox P.O. 00013108                            0          900            0             0            0
Mo-Sci P.O. 00010455                                                                                                           13
Steris " Isomedix P.O. 00013105                0            5            3             0            1
(Lots)
Mo-Sci P.O. 00010437 (space
rental=$3,438/yr)
</TABLE>

Quality:

Mo-Sci Corporation     cGMP compliance agreement between Orthovita, Inc. and Mo-
                        Sci Corporation dated November 29, 1999.

Ethox Corporation      cGMP compliance agreement between Orthovita, Inc. and
                        Ethox Corporation dated December 9, 1996.

Dental Research Studies:

Clinical Research Agreement between New York University and Orthovita, Inc.
                        dated November 22, 1996; the term of the agreement

has expired.
          Principal Investigator: Stuart J. Froum DDS
          Total Cost: $55,000.00

Clinical Study Agreement between Texas A&M Research Foundation - Baylor College
                        of Dentistry and Orthovita, Inc., as amended
February 1999. The term of the agreement and the term of the amendment have
expired.
          Principal Investigator: Dr. Roger R. Throndson
          Total Cost: $23,017.00

Intellectual Property:

Orthovita, Inc. Patent Assignment to Vita Licensing, Inc. dated May 19, 1999

Vita Licensing, Inc. License to Orthovita, Inc. dated June 28, 1999

Distribution:

Global Distribution Agreement between Orthovita, Inc. and Implant Innovations,
                        Inc. dated April 29, 1998
<PAGE>

                                 Schedule 1.7
                                   Equipment

Description                               Asset ID       Location     Qty

Model 69 Granulizer Mill                    143-1          MoSci       1
IMD 69 Rolls                                189-1          MoSci       1
Crucible, 3L, Platinum-20% Rhodi            334-1          MoSci       1
Despatch LAC Oven                           193-1          Ethox       1
Biogran(R) Safety Flange Injection          377-1          Ethox       1
Silicone Spray Application System           403-1          Ethox       1
Biologival Safety Cabinet                   404-1          Ethox       1
Ethox 40 mil Tool Tray                      485-1          Ethox       1

Tooling - Cup Tray           Kenson Plastics, Inc., 920 Brush Creek Road,
Warrendale, PA 15086

                             p - (412) 776-6820     f - (412) 776-3910

Tooling - Syringe Tray       Crystal Thermoplastics, Inc., P.O. Box 7007,
Cumberland, RI

                             p - (401) 333-6363     f - (401) 333-6592

Note - physical possession of tooling cannot be transferred from the vendors'
location.
<PAGE>

                                 Schedule 1.9
                                   Inventory

                               (as of 1/21/2000)

<TABLE>
<CAPTION>
                                                                    ------------------------------------------------   ------------
                         QUANTITY                                                        UNITS                           Lots of
                                                                            Finished Goods Inventory Part Number           Raw
                                                                    ------------------------------------------------
  ITEM                  DESCRIPTION                     LOCATION     2100-0001     2100-    2100-    2100-   2100-       Material
                                                                                   0002     0003     0004    0005        Bioglass
                                                                    ------------------------------------------------   ------------
<S>    <C>                                         <C>              <C>            <C>      <C>      <C>     <C>       <C>
I.     Inventory Amount (as of 1/21/2000)
       Finished Product Inventory at
       Orthovita (Units)                           Malvern                 0          36       557      326      82
       Packaged Product In-Transit from
       Ethox or Steris, Net                        In-Transit from     1,150         600       900        0     150
                                                   Ethox to Malvern
              (Net of retains & samples)
       Raw Material Bioglass at Ethox (Lots)       Ethox                                                                     16
                                                                    --------     -------   -------   ------  ------      ------
       Total Inventory Amount (as of 1/21/2000)                        1,150         636     1,457      326     232          16
</TABLE>

Note: Miscellaneous packaging materials in unknown quantities located at Ethox.
<PAGE>

                                 Schedule 1.11
                              Marketing Materials

1.   From Orthovita - Price List Biogran(R)

2.   From Orthovita - Comparison Chart of Biogran(R) & DFDBA

3.   From Orthovita - Comparison Chart of Biogran(R) & Xeno-Graft

4.   From Orthovita - article - Biogran(R) - "This raises the question whether
     Bio-Oss may be regarded as a resorbable material, as previously reported."

5.   From Orthovita - article - Biogran(R) - "We showed that different bone bank
     preparations of DFDBA even for the same bank, varied considerably in their
     ability to induce new bone, suggesting inherent differences in the quality
     of the material."

6.   From Orthovita - article - Biogran(R) - "Ability of Commercial
     Demineralized Freeze-Dried Bone Allograft to Induce New Bone Formation Is
     Dependent on Donor Age But Not Gender."

7.   From Orthovita - article - Biogran(R) - "Xenogenic bovine bone and DFDBA
     did not contribute to bone to microscrew contacts and are not recommended
     for enhancement of vital bone to implant contacts".Xenogenic bone and DFDBA
     appear to interfere with normal extraction socket healing."

8.   From Orthovita - article - Biogran(R) - "Biogran" vs. Bio-Oss Part II

9.   Biogran(R) - Compendium of studies - A comprehensive listing of articles.

10.  Orthovita Clinical Case Review - "Biogran(R) Case Report: Ridge
     Preservation of Edentulated Mandible for Optimal Implant Placements."

11.  Orthovita Clinical Case Review - "Biogran(R) Case Report: Regeneration of
     Large Extraction Socket Defect Prior to Implant Placement."

12.  Orthovita Clinical Case Review - "Biogran(R) Case Report: Salvage of a
     Molar Compromised By a Large Infrabony Defect."

13.  ART 659 - "What is a Periodontist?"

14.  ART 667 - "What is Ridge Preservation?"

15.  No ART number - Laminated Ridge Preservation Chart.
<PAGE>

16.  ART 668 rev 10/99 - "Biogran(R) - Resorbable Synthetic Bone Graft"
     information brochure.

17.  1 set of 52 slides for a presentation created by Chuck Cohen, on Biogran(R)
     & Orthovita.
<PAGE>

                                 Schedule 1.14
                                Specifications

     Sterile 45S5 glass particles sized to 300-355 microns.
<PAGE>

                                Schedule 3.3.2
                            Revised Inventory List

To be provided as set forth in Section 3.3.2.
<PAGE>

                                 Schedule 3.5
                           Purchase Price Allocation

      Transferred Asset Category              Schedule         Assigned
                                                                 Value

      Biogran(R) Patents (Title I)          Schedule 1.3
            United States                                      $2,520,000
            All other outside the
            United States                                       1,080,000
      Biogran(R) Patents (Title II)         Schedule 1.3           50,000
      Biogran(R) Trademarks                 Schedule 1.5           26,500
      Biogran(R) Know-How                   Schedule 1.2           26,500
      Contracts                             Schedule 1.6A          26,500

      Biogran(R) Regulatory Approvals       Schedule 1.4           26,500
      Equipment                             Schedule 1.7          144,000
                                                               $3,900,000
<PAGE>

                                 Schedule 3.7
                Current CORTOSS(TM) and ORTHOCOMP(TM) Products

                            CORTOSS Injectable(TM)
                               CORTOSS Putty(TM)
                             CORTOSS Implants(TM)
                        ORTHOCOMP Injectable Cement(TM)

The products listed above are patented, nonresorbable, bone bonding composites
that, subject to the receipt of all required regulatory approvals by
governmental and regulatory authorities, will offer ease of use in delivery and
immediate function to load bearing, bone reinforcement, implant stabilization
and bone grafting applications. The biocompatible nature allows for intimate
conformation to the area of placement and the setting or polymerization reaction
leads to immediate load bearing strength with elastic moduli closely resembling
that of natural bone, as opposed to metal alone. The strength of the composite
material is integrated by the surface grafting and chemical bonding to bone and
tissue surfaces. This interaction leads to improved fracture toughness of the
entire implant system. This composite is ideal for osteoporotic patients and
other patients whose bone vitality is compromised, such as those being treated
for cancer. The specially formulated thermoset resin matrix exhibits a low
exotherm on polymerization and strong 3-dimensional bonding that prohibits
residual monomer leaching.
<PAGE>

                                 Schedule 4.2A
                     Form of Biogran(R) Patent Assignment
                      (A)     WORLDWIDE PATENT ASSIGNMENT

     This Patent Assignment is made on this _____ day of ______________ 2000, by
Orthovita, Inc., a corporation formed under Pennsylvania law, and having a place
of business at 45 Great Valley Parkway, Malvern, Pennsylvania 19355 (the
"Assignor") in favor of Implant Innovations, Inc., having a place of business at
4555 Riverside Drive, Palm Beach Gardens, Florida, a corporation formed under
Florida law ("Assignee").

               WHEREAS, Assignor owns all right, title and interest in and to,
or arising under, certain United States and foreign Letters Patent and
applications for Letters Patent set forth on the attached Schedule A; and

               WHEREAS, Assignee desires to acquire all right, title, and
interest in and to said United States and foreign Letters Patent and
applications for Letters Patent;

               NOW, THEREFORE, for One Dollar ($1) and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Assignor hereby assigns and transfers to Assignee, the entire right, title, and
interest in and to the United States and foreign Letters Patent and applications
for Letters Patent set forth on the attached Schedule A and in and to all
Letters Patent granted on said applications, and hereby agrees to execute all
applications or papers necessary to obtain and maintain said United States and
foreign Letters Patent and applications for Letters Patent in all countries.

by Assignor                           ORTHOVITA, INC.

                                  By:  ___________________________
                                  Name:  _________________________
                                  Title:  __________________________

State of   Pennsylvania
County of :

On this ______ day of ___________, 2000, personally appeared before me a Notary
Public for the State of Pennsylvania; and acknowledged to me that he executed
the same for the uses and purposes therein set forth.

                                      Signature of Notary Public

Seal                                  Residing at: ________________________
                                      _____________________________________
<PAGE>

                                      My Commission Expires:  _____________
<PAGE>

                                  SCHEDULE A

I.  Title: Process for Restoring an Osseous Defect or Deficiency by Filling with
Osseous Tissue

Country                                     Patent No.
--------                                    ----------
United States                               5,204,106
Austria                                     107519
Belgium                                     09000433
Canada                                      2,014,940
German Democratic Republic                  293728
(Former)
Germany                                     EP 394152
European Patent Office                      394152
Spain                                       2,055,386
France                                      8905504
Japan                                       1,873,690
Switzerland                                 EP 394152
Denmark                                     EP 394152
Great Britain                               EP 394152
Greece                                      3,012,309
Italy                                       26375BE/94
Luxembourg                                  EP 394152
the Netherlands                             EP 394152
Sweden                                      EP 394152

II.  Title:  Bioactive Granules for Bone Tissue Formation

Country                                     Patent or Application No.
-------                                     -------------------------
United States                               5,658,332*
European Patent Office                      869749
Austria                                     EP 869749
Belgium                                     EP 869749
Denmark                                     EP 869749
France                                      EP 869749
Great Britain                               EP 869749
Germany                                     EP 869749
Greece                                      EP 869749
Ireland                                     EP 869749
Italy                                       EP 869749
Luxembourg                                  EP 869749
Monaco                                      EP 869749
Netherlands                                 EP 869749
Portugal                                    EP 869749
Spain                                       EP 869749
Sweden                                      EP 869749
Switzerland                                 EP 869749
India                                       699/CAL/95
Japan                                       503243/96

*The U.S. patent is the only issued patent in the family; the others are pending
applications.
<PAGE>

                                 Schedule 4.2B
               Form of Biogran(R) Regulatory Approval Assignment

______________, 2000

Document Mail Center (HFZ-401)
Center for Devices and Radiological Health
Food and Drug Administration
9200 Corporate Boulevard
Rockville, MD  20850

Re:    K941780, decision date 02/10/95, and
     K952922, decision date 12/19/95.

Dear Sir/Madam:

This is to inform you that, effective ____, 2000, ownership of K941780, decision
date 02/10/95, and K952922, decision date 12/19/95, was transferred from
Orthovita, Inc. to:

                      Implant Innovations, Inc.,
                      4555 Riverside Drive
                      Palm Beach Gardens, Florida
                      Fax: (561) 776-6833

Please include a copy of this letter each of the files for K941780 and K952922.
Thank you for your attention to this matter.

Sincerely,

Orthovita, Inc.

_________________________________
By:
Title:
<PAGE>

                                 Schedule 4.2C
                    Form of Biogran(R) Trademark Assignment

                             TRADEMARK ASSIGNMENT
                             --------------------

               This Trademark Assignment is made on this _____ day of
______________ 2000, by Orthovita, Inc., a corporation formed under Pennsylvania
law, and by Vita Licensing, Inc., a corporation formed under Delaware law
(collectively the "Assignors") in favor of Implant Innovations, Inc., a
corporation formed under Florida law ("Assignee").

               WHEREAS, Assignors own all right, title and interest in and to,
or arising under, certain United States and foreign trademarks, together with
all registrations or applications therefor, set forth on the attached Schedule A
("Marks"), and the goodwill of the business developed through the use of the
Marks; and

               WHEREAS, Assignee desires to acquire all right, title, and
interest in and to the Marks and the goodwill developed through the use of the
Marks; and

               WHEREAS, Assignee is a successor to a portion of the business of
Assignors to which the Marks pertain and such business is ongoing and existing.

               NOW, THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, Assignors hereby assign and
transfer to Assignee, the entire right, title, and interest in and to the Marks
and the goodwill of the business symbolized by the Marks. All rights and
privileges, including the right to sue for and receive all damages from past
infringements of the Marks, will be held and enjoyed by the Assignee, its
successors, or future assigns, and other legal representatives.

by Assignor                           ORTHOVITA, INC.

                                   By:  ___________________________
                                   Name:  _________________________
                                   Title:  __________________________

State of   Pennsylvania
County of :

On this ______ day of ___________, 2000, personally appeared before me a Notary
Public for the State of Pennsylvania; and acknowledged to me that he executed
the same for the uses and purposes therein set forth.
<PAGE>

                                     Signature of Notary Public

Seal                                       Residing at:_______________________

                                     _________________________________

                                     My Commission Expires:  ____________

Assignor                                VITA LICENSING, INC.

                                 By:  ___________________________
                                 Name:  _________________________
                                 Title:  __________________________

State of   Delaware
County of :

On this ______ day of ___________, 2000, personally appeared before me a Notary
Public for the State of Delaware; and acknowledged to me that he executed the
same for the uses and purposes therein set forth.

                                     Signature of Notary Public

Seal                                       Residing at: _______________________

                                     _________________________________

                                     My Commission Expires:  ____________

by Assignee                             IMPLANT INNOVATION, INC.

                                 By:  ___________________________
                                 Name:  _________________________
                                 Title:  __________________________

State of   Florida
County of :

On this ______ day of ___________, 2000, personally appeared before me a Notary
Public for the State of Delaware; and acknowledged to me that he executed the
same for the uses and purposes therein set forth.

                                     Signature of Notary Public

Seal                                       Residing at: _______________________
<PAGE>

                                     _________________________________

                                     My Commission Expires:  ____________

                                  SCHEDULE A

United States
Mark                     Registration No.          Registration Date
----                     ----------------          -----------------
BIOGRAN(R)               2,034,186                 1/28/97

Argentina
Mark                     Application No.           Filing Date
----                     ---------------           -----------
BIOGRAN(R)               1978993                   5/29/95

Brazil
Mark                     Registration No.          Registration Date
----                     ----------------          -----------------
BIOGRAN(R)               818742259                 5/5/98

Chile
Mark                     Registration No.          Registration Date
----                     ----------------          -----------------
BIOGRAN(R)               465,076                   7/30/96

Colombia
Mark                     Registration No.          Registration Date
----                     ----------------          -----------------
BIOGRAN(R)               181,748                   11/29/95

European Community
Mark                     Registration No.          Effective Registration Date*
----                     ----------------          ----------------------------
BIOGRAN(R)               64725                     4/1/96

Mexico
Mark                     Registration No.          Effective Registration Date*
----                     ----------------          ----------------------------
BIOGRAN(R)               530,711                   7/28/95

*This date, actually the filing date, should be used to calculate expiration of
the registration and renewal periods. These periods are measured in 10-year
increments beginning with the filing date. In many countries, such statutory
periods are based on the filing date, although retroactive protection for events
occurring between the filing date and the actual registration date is not
available.
<PAGE>

                                Schedule 4.3.1
                              Wiring Instructions

VITA LICENSING WIRING INSTRUCTIONS:

First Union National Bank
ABA 053000219
Trust Operations Account #5000000016439
FBO:  Vita Licensing, Inc.
Account #6728013862
Attention DTCM fax (302) 552-3127

ORTHOVITA WIRING INSTRUCTIONS:

Progress Bank
ABA 231371841
Account #1050-00988
FBO: Orthovita, Inc.
Attention: Steven Hobman
<PAGE>

                                Schedule 6.1.5
                                Pending Actions

1.   Court of Appeals for the Federal Circuit Docket No. 99-1071, 99-1072;
     Status: affirmed without opinion, deadline for appeal to Supreme Court has
     passed.

2.   European Patent Office, Opposition, Number T-0307/99-332.
<PAGE>

                                Schedule 6.1.10
                                   Suppliers

               Mo-Sci Corporation
               4000 Enterprise Drive
               P.O. Box 2
               Rolla, Missouri 65402-0002
               p - (573) 364-2338
               f - (573) 364-9589

               Ethox Corporation
               251 Seneca Street Buffalo,
               New York 14204-2088
               p - (716) 842-4000
               f - (716) 842-4040

               Steris-Isomedix Services
               4405 Marketing Place
               Groveport, Ohio 43125
               p - (614) 836-5757
               f - (614) 836-9829
<PAGE>

                                Schedule 6.1.14
                            Studies and Information

Compendium of Studies
March 1999

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
Title/Reference                              Study Design                                Status/Results
-----------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                                         <C>
Toshitake Furusawa, Kazuaki Mizunuma,        25 patients received subantral              Histologies confirmed excellent
Osteoconductive properties and efficacy of   augmentation with Biogran(R). At 7          bone growth inside and surrounding
resorbable bioactive glass as a bone         months, biopsies were taken and implants    excavated granules. Transformed
grafting material, Implant Dentistry, Vol    placed. Histological, micromechanical,      Biogran(R) is the same hardness as
                   -----------------
6, Num 2, 1997, 93-101.                      and chemical analysis were performed.       natural bone.  Silica was nearly
                                                                                         absent at the 7 month time point.
-----------------------------------------------------------------------------------------------------------------------------

Schepers, E, DeClercq, M, Ducheyne, P, and   Biogran(R) compared to dense and porous     HA The paper which documented
Kempeneers, R, Bioactive glass particles     in Beagle mandible. Histologies at 1,       Biogran(R)'s unique osteostimulatory
as a filler for bone lesions, J Oral         2, 3, 6, and 12 months.                     effect on bone tissue formation.
                              ------
Rehabilitation, 1991, 18:439-52.                                                         Phenomenon not seen with other
--------------
                                                                                         materials.
-----------------------------------------------------------------------------------------------------------------------------

Schepers, E. Ducheyne, P. Bioactive glass    Original dog study extended for 24          This is the study that documents
particles of narrow size range for           months.  Additional comparisons with        the criticality and superiority of
treatment of oral bone defects:  A 1-24      212-300, 425-800, and 100-710um particle    300-355 um bioactive glass particle
month experiment with several materials      sizes.                                      size range for stimulating bone
and particle sizes and size ranges.  J.                                                  growth.
                                     ---
Oral Rehabilitation, 1997, 24: 171-181.
-------------------
-----------------------------------------------------------------------------------------------------------------------------

Schepers, E, Ducheyne, P, Bioactive glass    Clinical evaluation of Biogran(R) in        Biogran(R) was found effective for
particles of limited size range: a new       extraction sites, ridge augmentations,      the treatment of a variety of oral
material for the repair of bone defects,     cystic defects, and apical defects. 86      bone defects with no incidence of
Implant Dentistry, Vol 2, Num 3, 1993,       patients with 106 defect sites. 3 year      material failure.
-----------------
151-156.                                     follow up.
-----------------------------------------------------------------------------------------------------------------------------

E. Schepers and P. Ducheyne, Long term       Clinical evaluation of Biogran" in          This study documents that the
clinical evaluation of bioactive glass       extraction sites, ridge augmentations,      excellent results evident in the
particles of narrow size range,              cystic defects,  and apical defects.        Implant Dentistry article after two
Bioceramics, Vol 9, 99-102, 1996.            119 patients with 139 defect sites.  5      years of follow up, are maintained
                                             year follow up.                             for at least 5 years.
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
Title/Reference                              Study Design                                Status/Results
-----------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                                         <C>
AM Gatti, Glass corrosion layers on          Biogran(R) was placed in the jaws, muscle,  These two animal models confirmed
bioactive glass granules of uniform size     and skin of rabbits and sheep.              the osteostimulatory effect of
affect cellular function, Bioceramics, Vol                                               Biogran(R) in bony sites.  Biogran(R)
                          -----------
6, 1993, 395-400                                                                         placed in non osseous sites would
                                                                                         excavate without bone growth.
-----------------------------------------------------------------------------------------------------------------------------

Evert Schepers, Lieven Barbier, Paul         Implants are placed into Biogran(R)         Quantification of bone growth
Ducheyne, Implant placement enhanced by      treated or ungrafted extraction sockets     reveals much greater bone formation
bioactive glass particles of narrow size     after 3 months of healing in the beagle     in the extraction sockets treated
range, Int Journal of Oral and               mandible. Implants are allowed to           with Biogran(R). Also, there was
Maxillofacial Implants, 1998; 13:655-665     osseointegrate for 3 additional months,     better osseointegration of the
                                             and are then loaded for 2 months.  All      implants placed into Biogran(R)
                                             sites are evaluated histologically.         treated sites than control sites
                                                                                         for both before and after loading
                                                                                         of the implants.  Presented at
                                                                                         Congress of Preprosthetic Surgery,
                                                                                         Copenhagen, Denmark, June 1997
-----------------------------------------------------------------------------------------------------------------------------

W. Lai, P. Ducheyne, J. Garino, Removal      5 rabbits received 1500 mg (equivalent      Resorbed silica gel is harmlessly
pathway of silicon released from bioactive   to 30 cc in human) Biogran(R) and 4         excreted in soluble form through
glass granules, in vivo, Bioceramics, 1998   control rabbits.  Urine and blood           urine.  No accumulation in distal
                                             samples collected daily and weekly,         organs (appendix, brain, kidney,
                                             respectively.  Distal organs examined at    liver, heart, and lung).
                                             6 weeks.
-----------------------------------------------------------------------------------------------------------------------------

Greg Fox, DMD, Edwin S. Rosenberg, DMD,      12 patients with paired interproximal       The Biogran(R) treated sites
Bioactive glass particles of narrow size     defects.  Biogran(R) vs. ungrafted          significantly (P0.0001)
range for the repair of human                control.  6 months reentry to measure       outperformed the control sites for
interproximal periodontal defects            bone height gain.                           both bone height gain and clinical
                                                                                         attachment level gain.  Presented
                                                                                         at AAP New Orleans, Oct. 1996.
-----------------------------------------------------------------------------------------------------------------------------

V. Lekovic, E.B. Kenney, P. Camargo Socket   17 patients with bilateral extractions      Ridge Preservation with Biogran(R)
                         ----------
preservation with Biogran(R) and calcium     were treated.  Primary closure was not      was statistically significantly
sulfate barrier for closure, UCLA and        attempted.  Capset was used to contain      better than controls.  Final
University of Belgrade                       Biogran(R).  Control sites were not         manuscript is in preparation.
                                             grafted.  Sites reentered at 6 months.      Biopsies undergoing histological
                                             Ridge dimensions are measured pre-op and    preparation.
                                             at 6 months.
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
Title/Reference                              Study Design                                Status/Results
-----------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                                         <C>
Gert L. deLange, E. K. Berger, Clinical      Patients are treated with different         The first group of patients (50-50
and histological evaluation of bone          mixture ratios (50-50; 80-20; 100-0;        mixture) were biopsied at 3-5
regeneration in atrophic maxillae by the     0-100) of Biogran(R) and autogenous bone    months and show very active bone
use of Biogran(R), Dept of Oral Cell         taken from the iliac crest.  Trephine       growth throughout the sinus as
Biology, Academic Center for Dentistry,      core biopsies are taken prior to implant    evidenced by new woven bone covered
Amsterdam, NETHERLANDS                       placement.                                  by large bands of osteoid tissue.
                                                                                         Presented at  Euro Perio Congress,
                                                                                         Florence, Italy, May 1997.
                                                                                         Submitted by J. Clinical Oral
                                                                                         Implants Research.
-----------------------------------------------------------------------------------------------------------------------------

A. Valentin, The clinical application of     50 patients underwent subantral grafting    The first biopsies have been
Biogran(R) for sinus augmentation and ridge  or ridge splitting with implants.           prepared histologically and
splitting augmentations with implant         Biopsies are taken at 6 months.             confirmed good bone growth.
placements, Mannheim, Germany                                                            Presented at the Congress for
                                                                                         Preprosthetic Surgery, Copenhagen,
                                                                                         Denmark, June 1997.  Submitted to
                                                                                         Quintessence Jan 99.
-----------------------------------------------------------------------------------------------------------------------------

G. Triplett, R. Throndson, The Application   20 patients with bi-lateral impacted 3rd    All surgeries were completed. Six
of Biogran(R) for Enhanced Clinical Outcomes molars will be studied. One site is         month evaluation completed 6/99.
After 3rd Molar Extractions, Baylor          grafted with Biogran(R); other not grafted  Reduced pain in Biogran(R) grafted
University                                   as control. Periodontal health distal       sites.
                                             to 2nd molar will be charted for one
                                             year.
-----------------------------------------------------------------------------------------------------------------------------

Stuart J. Froum, Dennis Tarnow, and Edwin    Biogran(R) will be compared to DFDBA and    All surgeries are completed.
S. Rosenberg, Comparison of two bone graft   ungrafted control for treating              Preliminary results presented at 3i
materials for extraction socket repair,      extraction sockets.  Trephine core          International Symposium Jan 99.
Department of Implant Dentistry, New York    biopsies will be taken prior to implant     Biogran(R) histologies show superior
University College of Dentistry              placement at 3 and 6 months.                bone density than DFDBA and
                                                                                         controls.
-----------------------------------------------------------------------------------------------------------------------------

Evert Schepers, Daniel van Steenberghe,      Histological analysis of treatments for     Pilot study showed promising
Periodontal Study in Beagle Dogs,            bone loss from chronically inflamed         results for regeneration of
Departments of Periodontology and            tissues. Four treatment modalities will     attachment apparatus in Biogran(R)
Prosthetic Dentistry, Catholic University    be compared (Biogran(R); Membrane e-PTFE,   treated sites after 3 months.
of Leuven, BELGIUM                           Perioglas, Control-no material)             Study is complete pending histological
                                                                                         evaluation.  Data very promising for
                                                                                         Biogran(R).
-----------------------------------------------------------------------------------------------------------------------------

Peter Blijdorp, Sinus elevation              Biogran(R) plus autogenous bone             6 patients are entered into the
using bioactive glass granules of            (50/50) is compared to Autogenous           study. First histologies confirm
narrow size range and autogenous             bone extended with HA (80/20).              good bone growth.
bone, Dutch Academy of Aesthetic Dentistry,
Arnhem, NETHERLANDS
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
Title/Reference                              Study Design                                Status/Results
-----------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                                         <C>
G. Cordioli, C. Mazzocco, Sinus              At least 3 implants are placed              36 implants placed, no failures at
augmentation using Biogran(R) with           immediately in each grafted sinus.  15%     2 years.  Histologies show active
simultaneous implant placement, Padova,      autogenous, 85% Biogran(R) placed in class  bone growth.  Histomorphometric
ITALY                                        IV sinuses.  Biopsies taken at 9 months.    data being analyzed.
-----------------------------------------------------------------------------------------------------------------------------

Bercy, Use of Biogran(R) to treat large      Twenty four patients with 6mm or greater    Excellent stable results at 2
periodontal defects. Academic Hospital,      defects with 2 or less bony walls are       years. Data being written-up for
St. Luc, Brussels, BELGIUM                   being entered into the study for            submission.
                                             treatment with Biogran(R) without a
                                             membrane. Standardized x-rays and
                                             clinical follow-up will occur at 12
                                             and 24 months post-op.
-----------------------------------------------------------------------------------------------------------------------------

F. Khoury, Grafting of Chin Autogenous       30 consecutive patients to have             About 10 patients have been entered
Bone Harvest Sites.                          autogenous harvest sites in symphysis       into study, preliminary results are
                                             filled with Biogran(R) and covered with     excellent.
                                             Guidor7 membrane.
-----------------------------------------------------------------------------------------------------------------------------

R.C. Rhoad, E. Vresilovic, Bioactive glass   4 beagles were bilaterally grafted with     Biogran(R) was over 95% resorbed.
as a bone graft substitute in a canine       Biogran(R) and autogenous bone for 6        Active bone growth with Biogran(R)
metaphyseal bone defect, University of       months                                      was nearly indistinguishable
Pennsylvania, Department of Orthopaedic                                                  compared to autogenous bone control
Surgery                                                                                  sites.
-----------------------------------------------------------------------------------------------------------------------------

Fumihiko Watanabe, Comparative study of      5 beagles treated for tooth extraction,     Study just getting started.
graft materials for filling extraction       Biooss, Biogran(R), TCP and autogenous to
sites, School of Dentistry, Tokyo            be compared.  Implants placed 3 months
                                             after grafting.  Histology after 3
                                             months of integration.
-----------------------------------------------------------------------------------------------------------------------------

Brett Dyer, Raul Caffessee, Biogran(R) for   1 year human clinical trial.  Clinical      First histologic sections under
the treatment of periodontal defects,        parameters measured preop, and 1 year       preparation.
Houston, Texas                               with surgical reentry.  Biopsies of
                                             grafted sites taken at 1 year.
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                 Exhibit 4.2D
                           Form of Escrow Agreement

                           FORM OF ESCROW AGREEMENT

     This ESCROW AGREEMENT ("Escrow Agreement") is made as of __________________
2000, by and among ORTHOVITA, INC., a Pennsylvania corporation, and VITA
LICENSING, INC., a Delaware corporation, (collectively the "Sellers"), CHASE
MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION (the "Escrow Agent") and IMPLANT
INNOVATIONS, INC., a Florida corporation ("Buyer").

                                  Background
                                  ----------

     The Buyer and the Sellers are parties to that certain Asset Sale Agreement
dated as of even date herewith (the "Asset Sale Agreement"). This Escrow
Agreement is being executed and delivered pursuant to Sections 4.2.4 and 4.3.2
of the Asset Sale Agreement.

                                  Witnesseth
                                  ----------

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

1.   Effect of Asset Sale Agreement
     ------------------------------

     As between the Buyer and the Sellers, the provisions of the Asset Sale
Agreement are incorporated herein by reference, but only as the context of this
Escrow Agreement may require. The Escrow Agent is not a party to the Asset Sale
Agreement and shall, therefore, act only in accordance with the terms and
conditions contained herein. Unless otherwise defined herein, capitalized terms
are used herein as defined in the Asset Sale Agreement.

2.   Creation of the Escrow Account.
     ------------------------------

     There is hereby created and established with the Escrow Agent an escrow
account (the "Escrow Account"), to be held in the custody of the Escrow Agent in
accordance with this Escrow Agreement.

3.   Escrow Funds.
     ------------

     (a)  On the date of this Escrow Agreement, the Buyer is depositing
exclusively with the Escrow Agent the sum of $400,000 (together with any
interest thereon or proceeds therefrom from the
<PAGE>

date hereof, the "Escrow Funds"), and the Escrow Agent acknowledges receipt of
the Escrow Funds and deposit thereof into the Escrow Account.

     (b)  The Escrow Funds shall be continuously invested and reinvested by the
Escrow Agent in short-term United States obligations issued by or guaranteed by
the United States Treasury, or in such other securities or instruments, as may
be approved in writing from time to time by the Sellers and the Buyer. Absent
joint specific written investment directions from such parties, the Escrow Funds
will be invested in the Vista 100% U.S. Treasury Fund, which is a mutual fund
for which the Escrow Agent or an affiliate of the Escrow Agent may serve as
investment manager, administrator, shareholder servicing agent, and/or custodian
or subcustodian, notwithstanding that (i) the Escrow Agent or an affiliate of
the Escrow Agent receives fees from such funds for services rendered, (ii) the
Escrow Agent charges and collects fees for services rendered pursuant to this
Escrow Agreement that are separate from the fees received from such funds, and
(iii) services performed for such funds and pursuant to this Escrow Agreement
may at times duplicate those provided to such funds by the Escrow Agent or its
affiliates. All interest income or other investment proceeds thereon shall
become part of the Escrow Funds.

     (c)  The Escrow Funds shall not be subject to lien or attachment by any
creditor of any party hereto, and shall be used solely for the purpose set forth
in this Escrow Agreement and the Asset Sale Agreement. Other than as provided
herein, the Escrow Funds shall not be subject to set-off.

     (d)  Except as provided in Sections 4 or 5 hereof, the Escrow Funds may
only be disbursed from the Escrow Account upon the joint written direction of
the Sellers and the Buyer.

     (e)  Subject to the remaining provisions contained herein, including
Sections 4 and 5 hereof, any payment of the Escrow Funds (including accrued
interest) shall automatically include payment of the Escrow Agent"s compensation
in accordance with Section 7 below, after which time payment shall be
automatically made to Sellers, without the requirement of any further action by
the parties hereto.

     (f)  Each of the Buyer and the Sellers, in the notice section of this
Escrow Agreement, are providing the Escrow Agent with its Tax Identification
Number (TIN) as assigned by the Internal Revenue Service.

4.   Claims under the Asset Sale Agreement.
     -------------------------------------
<PAGE>

     (a)  If at any time during the Escrow Period (as herein defined) the Escrow
Agent receives written notice (a "Claim Notice") from Buyer that it is entitled
to indemnification pursuant to Article VII of the Asset Sale Agreement together
with a certificate from the President and CEO or any Vice President certifying
that (x) the Deductible has been met and the procedures set forth in Article VII
of the Asset Sale Agreement that are applicable to the Buyer have been followed,
and (y) the Buyer has given the Sellers" contemporaneous notice of such claim
for indemnification, then the Escrow Agent shall pay from the Escrow Funds the
amount of damages specified in such notice, unless the Escrow Agent receives a
written objection from the Sellers" (a "Claim Response") to Buyer's claim within
30 days after the date of the Claim Notice.

     (b)  In the case of a Claim Response, the Escrow Agent shall pay from the
Escrow Funds only such amount as specified:

        (i)  in a joint written direction of the Buyer and the Sellers, or

        (ii) in a final order of a court of competent jurisdiction (a "Final
Order").

5.   Escrow Period; Termination of Escrow.
     ------------------------------------

     (a)  The period during which the Escrow Funds shall be held in escrow
hereunder (the "Escrow Period") shall commence on the date hereof and shall end
on the date that is the later of (i) the date on which all of the Escrow Funds
have been delivered to the Buyer pursuant to Section 4 hereof and (ii) the first
anniversary of the date hereof (the "Disbursement Date").

     (b)  If a dispute with respect to a Claim Notice is unresolved on the
Disbursement Date, the Escrow Agent shall (i) hold back and not distribute a
portion of the then remaining Escrow Funds in an amount equal to such unresolved
claim (the "Hold Back Funds"), and (ii) release from escrow and distribute to
the Sellers the remaining Escrow Funds, if any, in accordance with Section 3(d)
hereof. The Hold Back Funds shall continue to be held by the Escrow Agent
pursuant to this Escrow Agreement and the Escrow Agent shall only pay the Hold
Back Funds to the Sellers and/or the Buyer, as the case may be, in accordance
with the provisions of Section 4(b) above. This Escrow Agreement shall terminate
at such time as the Hold Back Funds have been delivered to the Buyer and/or the
Sellers pursuant to the terms of this Escrow Agreement.

6.   Duties of the Escrow Agent.
     --------------------------
<PAGE>

     (a)  The Escrow Agent shall be liable as a depository only. The duties and
responsibilities of the Escrow Agent hereunder shall be determined solely by the
express provisions of this Escrow Agreement. The Escrow Agent undertakes to
perform only such duties as are expressly set forth herein and no further duties
or responsibilities shall be implied. The Escrow Agent shall have no duty to
solicit any payments that may be due to it hereunder. The Escrow Agent shall not
be liable for any action taken or omitted by it in good faith unless a court of
competent jurisdiction determines that the Escrow Agent's gross negligence or
willful misconduct caused a loss to the Buyer or any Seller. In the
administration of this Escrow Agreement and the Escrow Account hereunder, the
Escrow Agent may execute any of its powers and perform its duties hereunder
directly or through agents or attorneys and may consult with counsel,
accountants and other skilled persons to be selected and retained by it. The
Escrow Agent shall not be liable for anything done, suffered or omitted in good
faith by it in accordance with the advice or opinion of any such counsel,
accountants or other skilled persons. The Escrow Agent shall not be liable for
any mistake of fact or error in judgment, or for any act or failure to act of
any kind taken in good faith and believed by it to be authorized or within the
rights or powers conferred by this Escrow Agreement, unless such act or failure
to act has been determined by a court of competent jurisdiction to constitute
willful misconduct or gross negligence that caused a loss to the Buyer or any
Seller, as the case may be.

     (b)  The Escrow Agent shall not be liable in any respect on account of
identity, authority or rights of persons executing or delivering, or purporting
to execute or deliver, any document, item, or other writing, and may rely
absolutely and be fully protected in acting upon any item, document or other
writing believed by it in good faith to be authentic in performing its duties
hereunder. The Escrow Agent shall have no duty to inquire into or investigate
the validity, accuracy or content of any such document or other writing.

     (c)  The Buyer, on the one hand, and the Sellers, on the other hand,
jointly and severally, agree to indemnify and hold the Escrow Agent and its
directors, officers, agents and employees (collectively, the "Indemnitees")
harmless from and against any and all claims, liabilities, losses, damages,
fines, penalties, and expenses, including out-of-pocket, incidental expenses,
legal fees and expenses, the allocated costs and expenses of in-house counsel
and legal staff and the costs and expenses of defending or preparing to defend
against any claim ("Losses") that may be imposed on, incurred by, or asserted
against, the Indemnitees or any of them for following any instruction or other
direction upon which the Escrow Agent is authorized to rely pursuant to the
terms of this Escrow Agreement. All Losses hereunder shall be paid 50% by the
Buyer, on the one hand, and 50% by the Sellers, on the other hand. The
provisions of this Section 6(c) shall survive the
<PAGE>

termination of this Escrow Agreement and the resignation or removal of the
Escrow Agent for any reason. Anything in this Escrow Agreement to the contrary
notwithstanding, in no event shall the Escrow Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Escrow Agent has been advised of such
loss or damage and regardless of the form of action.

     (d)  In the event of disagreement between the parties to this Escrow
Agreement, or persons claiming under them, or any of them, the Escrow Agent
reserves the right to hold all Escrow Funds in its possession until a mutual
agreement has been reached between all of said parties, or until delivery is
made to court in any interpleader action, or until as otherwise authorized by
final judgment or decree.

     (e)  The Escrow Agent may resign and be discharged from its duties under
this Escrow Agreement by giving the Buyer and the Sellers 30 days? prior written
notice thereof.

     (f)  At any time, the Buyer and the Sellers may discharge the Escrow Agent
by jointly executing and delivering to the Escrow Agent notice of its discharge
as Escrow Agent hereunder and specifying (i) the date when such discharge shall
take effect and (ii) the successor (the "Successor Escrow Agent") is, in which
event the Escrow Agent will be discharged of its duties as of such date and
shall transfer all Escrow Funds then held by the Escrow Agent to the Successor
Escrow Agent. This Agreement shall terminate, and the Escrow Agent shall be
discharged from any further obligations hereunder upon the disbursement of the
Escrow Funds.

     (g)  If the Escrow Agent shall be dissolved, or if its property or affairs
shall be taken under the control of any state or federal court or administrative
body or agency because of insolvency or bankruptcy, or if for any other reason a
vacancy shall forthwith exist in the office of Escrow Agent, then within a
period of 30 days thereafter, a Successor Escrow Agent shall be appointed by the
mutual agreement of the Buyer and the Sellers. If no agreement has been reached
as aforesaid and no Successor Escrow Agent shall have been so appointed and have
accepted such appointment within such 30-day period, the Buyer shall appoint a
Successor Escrow Agent (which shall be independent of the Buyer).

7.   Expenses.
     --------

     The Escrow Agent shall be entitled to reasonable compensation for its
services and reimbursement for its out-of-pocket expenses set forth on Exhibit A
                                                                       ---------
hereto. All such compensation and reimbursement for out-of-pocket expenses and
fees (including reasonable attorneys' fees) shall be paid out of any payment of
the Escrow Funds (including accrued interest) which shall automatically
<PAGE>

be paid to the Escrow Agent under Section 3 hereof without the requirement of
any further action by the parties hereto. The Buyer and the Sellers shall each
bear their own expenses in connection with the resolution of any Claim under
Section 4 hereof.

8.   Notices.
     -------

     Unless expressly specified otherwise herein, all notices or other
communications required or permitted to be given under this Escrow Agreement
shall be in writing and shall be considered sufficiently given in all respects
(a) when personally delivered, (b) when sent by telecopier, with written
confirmation of receipt, (c) the day after being sent by overnight courier
service or (d) three days after being deposited in the United States Certified
Mail, Postage Prepaid, Return Receipt Requested, addressed as follows or in each
case to such other address or facsimile number as shall be designated by notice
duly given pursuant to this Section:

           If to Sellers, to:

                   Orthovita, Inc.
                   45 Great Valley Parkway
                   Malvern, Pennsylvania 19355
                   Fax: (610) 640-1714
                   Attention:  Bruce A. Peacock, Chief Operating Officer and
President
                   Telephone: (610) 407-5250

                   Vita Licensing, Inc.
                   300 Delaware Avenue
                   Suite 900, 9th Floor
                   MC - DE5403
                   Wilmington, Delaware 19801
                   Fax:  (302) 552-3128
                   Attention:  Joseph M. Paiva, Vice President
                   Telephone: (610) 407-5233

           With a copy to:

                   Morgan, Lewis & Bockius LLP
                   1701 Market Street
                   Philadelphia, PA 19103
                   Fax: (215) 963-5299
                   Attention: David R. King, Esquire
                   Telephone: (215) 963-5371

           If to Purchaser, to:
<PAGE>

                   Implant Innovations, Inc.
                   4555 Riverside Drive
                   Palm Beach Gardens, Florida 33410
                   Fax: (561) 776-6833
                   Attention:  President
                   Telephone: (561) 776-6702

           With a copy to:

                   Steel, Hector & Davis LLP
                   1900 Phillips Point West
                   777 South Flagler Drive
                   West Palm Beach, Florida 33401
                   Fax: (561) 655-1509
                   Attention:  Thomas G. O'Brien III, Esquire
                   Telephone: (561) 650-7287

     If to the Escrow Agent:

           Chase Manhattan Trust Company, National Association
           One Liberty Place, Suite 5210
           1650 Market Street
           Philadelphia, PA  19103
           Fax: (215) 568-1450
           Attention:  Capital Market Fiduciary Services
           Telephone: (215) 988-1322

9.   General Terms.
     -------------

     (a)  This Escrow Agreement shall be construed and enforced in accordance
with the laws of the Commonwealth of Pennsylvania without regard to its
provisions concerning conflict of laws.

     (b)  This Escrow Agreement shall be binding upon the parties hereto and
their respective successors and assigns. Any corporation or association into
which the Escrow Agent in its individual capacity may be merged or converted or
with which it may be consolidated, or any corporation or association resulting
from any merger, conversion or consolidation to which the Escrow Agent in its
individual capacity shall be a party, or any corporation or association to which
all or substantially all the corporate trust business of the Escrow Agent in its
individual capacity may be sold or otherwise transferred, shall be the successor
to the Escrow Agent hereunder without further act.

     (c)  This Escrow Agreement and, as between the Buyer and Sellers only, the
Asset Sale Agreement, contain the entire agreement among the parties hereto with
respect to the subject matter hereof. This Escrow Agreement may not be amended
or revised except by a written instrument signed by all the parties hereto.

     (d)  Unless the context of this Escrow Agreement clearly
<PAGE>

requires otherwise, (i) references to the plural include the singular, the
singular the plural, the part the whole, (ii) references to one gender include
all genders, (iii) "including" has the inclusive meaning frequently identified
with the phrase "but not limited to" and (iv) references to "hereunder,"
"herein," "hereto" or "hereof" relate to this Escrow Agreement. The section and
other headings contained in this Escrow Agreement are for reference purposes
only and shall not control or affect the construction of this Escrow Agreement
or the interpretation thereof in any respect. Section, subsection, schedule and
exhibit references are to this Escrow Agreement unless otherwise specified. Each
accounting term used herein that is not specifically defined herein shall have
the meaning given to it under generally accepted accounting principles.

     (e)  This Escrow Agreement may be executed in two or more counterparts,
each of which shall be binding as of the date first written above. Each such
copy shall be deemed an original, and it shall not be necessary in making proof
of this Escrow Agreement to produce or account for more than one such
counterpart.

     (f)  In the event funds transfer instructions are given (other than in
writing at the time of execution of this Escrow Agreement), whether in writing,
by facsimile or otherwise, the Escrow Agent shall seek confirmation of such
instructions by telephone call-back to the person or persons designated in
Section 8 hereof, and the Escrow Agent may rely upon the confirmation of anyone
purporting to be the person or persons so designated. The persons and telephone
numbers for call-backs may be changed only in a writing actually received and
acknowledged by the Escrow Agent. The Buyer and the Sellers acknowledge that
such security procedure is commercially reasonable.

     (g)  It is understood that the Escrow Agent and the beneficiary's bank in
any funds transfer may rely solely upon any account numbers or similar
identifying number provided by either of the other parties hereto to identify
(i) the beneficiary, (ii) the beneficiary's bank, or (iii) an intermediary bank.
The Escrow Agent may apply any of the Escrow Funds for any payment order it
executes using any such identifying number, even where its use may result in a
person other than the beneficiary being paid, or the transfer of funds to a bank
other than the beneficiary's bank, or an intermediary bank designated.

                     [THIS SPACE INTENTIONALLY LEFT BLANK]
<PAGE>

                     [SIGNATURE PAGE TO ESCROW AGREEMENT]

     IN WITNESS WHEREOF, this Escrow Agreement has been executed by the
undersigned as of the day and year first written above.

                              CHASE MANHATTAN TRUST COMPANY,

                                    NATIONAL ASSOCIATION, as Escrow Agent

                              By:  ____________________________________
                              Name:       Judith Wisniewski
                              Title:      Assistant Vice President

                              IMPLANT INNOVATIONS, INC.

                              By:  ____________________________________
                              Name:
                              Title:

                              ORTHOVITA, INC.

                              By:  ____________________________________
                              Name:
                              Title:

                              VITA LICENSING, INC.

                              By:  ____________________________________
                              Name:
                              Title:
<PAGE>

                                   EXHIBIT A

                        Escrow Agent Fees and Expenses

                                Orthovita, Inc.
                   Proposed Escrow Agency Agreement Between
            Orthovita, Inc. VITA Licensing and Implant Innovations
              Chase Manhattan Trust Company, National Association
                       Proposal to Serve as Escrow Agent

                                  Initial Fee
                                  -----------

To cover the review and negotiation of the draft Escrow Agency Agreement,
establishment of the trust account on our system and communication with the
Working Party.

                                    $500.00
                            (Payable upon Closing)

                                  Annual Fee
                                  ----------

To cover the ongoing administrative functions of the Escrow Agent in accordance
with the terms and conditions of the Escrow Agency Agreement.

                                   $2000.00
(Payable upon Closing and in Advance of Annual Anniversary Dates)

                                   Expenses
                                   --------

Out-of-pocket expenses (capped at 4% of First Year Invoice), fees and
disbursements, and services of an unanticipated or extraordinary nature are not
included in the above schedule.
<PAGE>

                                 Exhibit 4.2E
                             Form of Bill of Sale

Orthovita, Inc., a Pennsylvania corporation (hereinafter referred to as the
"Seller"), for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, paid to it by Implant Innovations, Inc., a
Florida corporation (hereinafter referred to as the "Purchaser"), hereby sells,
assigns, and transfers to the Purchaser the assets set forth on Schedules 1.7,
1.9 and 1.11 to the Asset Sale Agreement (referred to below) owned by the Seller
and forming a portion of the Transferred Assets (as defined in the Asset Sale
Agreement referred to below). Nothing in this Bill of Sale shall be construed to
be a modification of, or limitation on, any provision of the Asset Sale
Agreement dated as of ________________ ___, 2000 among the Seller, Vita
Licensing, Inc. and the Purchaser, including the representations and warranties
set forth therein.

DATED:  ______________

ORTHOVITA, INC.

By: ___________________________________
Title:
<PAGE>

                                 Exhibit 4.2F
           Form of Termination Agreement for Distribution Agreement

Orthovita, Inc., a Pennsylvania corporation ("Orthovita") and Implant
Innovations, Inc., a Florida corporation ("3i"), are parties to the Global
Distribution Agreement, entered into April 29, 1998 for the purpose of
facilitating the distribution and sale of Biogran" brand bone graft material.
The parties hereby acknowledge and agree to terminate the Distribution Agreement
in favor of the Asset Sale Agreement dated as of ______________. Upon execution
of this Termination Agreement, the parties will cease to have any rights or
obligations under the Global Distribution Agreement, except Sections 5, 6, 7, 8,
9, and 10 of the Global Distribution Agreement that survive under Section 7.3
thereof.

The parties hereby agree that any purchase orders entered into pursuant to the
Global Distribution Agreement shall terminate with the execution of this
Termination Agreement.

                                    ORTHOVITA, INC.

                                    By:  ___________________________
                                    Name:  _________________________
                                    Title:  ________________________

                                    IMPLANT INNOVATION, INC.

                                    By:  ___________________________
                                    Name:  _________________________
                                    Title:  ________________________
<PAGE>

                                 Exhibit 4.2G
                        Form of Assignment of Contracts

           This ASSIGNMENT OF CONTRACTS ("Assignment") is entered into this ___
day of _________________, 2000, by and between ORTHOVITA, INC., a Pennsylvania
corporation ("Assignor"), and IMPLANT INNOVATIONS, INC., a Florida corporation
("Assignee"). For valuable consideration, the parties hereto, each intending to
be legally bound and to bind their respective successors and assigns, hereby
covenant and agree as follows.

           1.  For the purpose of performing the parties' respective obligations
under the Asset Sale Agreement, dated as of ________________ ___, 2000, among
Assignor, Vita Licensing, Inc., a Delaware corporation ("Vita Licensing), and
Assignee (the "Asset Sale Agreement"), the Assignor hereby assigns, transfers
and sets over unto Assignee, and Assignee hereby accepts, all of Assignor's
rights, title and interest in and to the Contracts (as defined in Section 1.6 of
the Asset Sale Agreement).

           2.  This Assignment shall inure to the benefit of and shall be
binding upon the parties hereto and their respective successors and assigns.

           3.  This Assignment shall be governed by and construed according to
the laws of the Commonwealth of Pennsylvania.

           IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be executed by their duly authorized representatives on the date first above
written.

                                             ORTHOVITA, INC.

                                             -----------------------------
                                             By:
                                             Title:

                                             IMPLANT INNOVATIONS, INC.

                                             -----------------------------
                                             By:
                                             Title:
<PAGE>

                                 Exhibit 4.2H
                   Form of Legal Opinion of Sellers" Counsel

February ___, 2000

Implant Innovations, Inc.
4555 Riverside Drive
Palm Beach Gardens, FL 33410

Ladies and Gentlemen:

We have acted as counsel to Orthovita, Inc., a Pennsylvania corporation
("Orthovita"), and Vita Licensing, Inc., a Delaware corporation ("Vita",
collectively with Orthovita, the "Sellers") in connection with the Asset Sale
Agreement dated as of _____________ ___, 2000 (the "Asset Purchase Agreement"),
among Orthovita, Vita, and Implant Innovations, Inc., a Florida corporation (the
"Purchaser").

Terms that are defined in the Asset Sale Agreement and also used herein shall
have the definitions set forth in the Asset Sale Agreement unless they are
otherwise defined herein.

This opinion is being delivered pursuant to Section 4.2.8 of the Asset Sale
Agreement. In connection with the opinions expressed below, we have examined and
relied upon executed copies of the Asset Sale Agreement, the certificate or
articles of incorporation and the bylaws of each of Orthovita and Vita. We have
also examined and relied upon such other documents, instruments and certificates
of public officials and made such other investigations of fact and law as we
have deemed necessary.

We have assumed the genuineness of all signatures (other than the signatures of
the applicable officers of the Sellers), the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. We have further assumed
that the Asset Sale Agreement and all other agreements and documents
contemplated by the Asset Sale Agreement (the "Ancillary Documents"), constitute
legal, valid and binding obligations of all parties thereto (other than the
Sellers).

As to certain matters of fact material to this opinion, we have, where such
facts were not independently known to us, relied without independent
investigation upon certificates of officers of the Sellers.
<PAGE>

Based upon and subject to the foregoing, and subject to the additional
qualifications set forth below, we are of the opinion that:

1.   Orthovita is a corporation validly subsisting under the laws of the
     Commonwealth of Pennsylvania. Vita is a corporation duly incorporated,
     validly existing and in good standing under the laws of the State of
     Delaware.

2.   Each Seller has the requisite corporate power and authority to carry on its
     business as, to our knowledge, it is now conducted.

3.   Each Seller has all requisite corporate power and authority necessary to
     execute, deliver and perform its obligations under the Agreement and the
     Ancillary Documents.

4.   The Agreement and the Ancillary Documents have been duly executed and
     delivered by each Seller.

5.   The execution and delivery of the Agreement and the Ancillary Documents,
     performance by Sellers of their respective obligations under the Agreement
     and the Ancillary Documents and the exercise by Sellers of their respective
     rights created by the Agreement and the Ancillary Documents do not (i)
     violate the Articles of Incorporation or Bylaws of either Seller, (ii) to
     our knowledge, constitute a breach of or a default under any material
     agreement or instrument to which either Seller is a party or by which it or
     its assets are bound, (iii) to our knowledge, result in the creation of a
     mortgage, security interest or other encumbrance upon the assets of either
     Seller, (iv) violate any judgment, decree, injunction, writ or order of any
     court, arbitration or administrative tribunal, which judgment, decree,
     injunction, writ or order, known to us and binding on either Seller or its
     assets or (v) to our knowledge, violate any federal or Pennsylvania law,
     rule or regulation.

6.   Except as disclosed in Schedule 6.1.5, to our knowledge, there is no
     action, suit or proceeding pending or threatened against either Seller that
     could reasonably be expected to have a material adverse effect on the
     applicable Seller or that in any manner draws into question the validity of
     the Agreement or the Ancillary Documents.

7.   Except as disclosed in the next paragraph, the Agreement and the Ancillary
     Documents are valid and binding obligations of each Seller enforceable
     against the applicable Seller in accordance with its terms, except as
     enforceability may be limited by bankruptcy, insolvency, reorganization,
     moratorium, fraudulent
<PAGE>

     conveyance or other laws from time to time in effect that affect creditors'
     rights generally and subject to general principles of equity (regardless of
     whether such enforceability is considered in a proceeding in equity or at
     law).

The opinions expressed herein are limited to matters governed by the laws of the
Commonwealth of Pennsylvania, the General Corporation Law of the State of
Delaware, and the federal laws of the United States. To the extent that any
opinion herein relates to matters governed by any laws other than the laws to
which the opinions expressed herein are limited, we have assumed that such laws
are the same in all relevant respects as the laws of the Commonwealth of
Pennsylvania. In addition, our opinions expressed in paragraph 1 above as to the
subsistence of Orthovita and existence in good standing of Vita are based solely
on certificates of valid subsistence or legal existence or good standing issued
by the Secretaries of State of the Commonwealth of Pennsylvania or the State of
Delaware and have the meanings imparted by such certificates.

Wherever we have stated that we have assumed any matter or relied or based our
opinion upon any representation or advice, it is intended to indicate that we
have assumed such matter or relied or based our opinion upon such representation
or advice without making any factual, legal or other inquiry or investigation,
and without expressing any opinion or conclusion of any kind concerning such
matter; no inference as to our knowledge of any matters bearing on the accuracy
of any such statement or opinion should be drawn from the fact of our
representation of the Sellers.

In rendering the foregoing opinions and advice, whenever a statement set forth
herein is qualified to "our knowledge" or limited to matters "known to us" or by
any similar phrase, it is intended to indicate that, during the course of our
representation of the Sellers, no information that would give us current actual
knowledge of the inaccuracy of such statement has come to the attention of those
attorneys in our firm who have rendered legal services in connection with the
transactions contemplated by the Asset Sale Agreement. However, we have not
undertaken any independent investigation to determine the accuracy of such
statement and no inference as to our knowledge of any matters bearing on the
accuracy of any such statement should be drawn from the fact of our
representation of the Sellers.

No opinion is expressed herein with respect to any provisions of the Asset Sale
Agreement or Ancillary Documents that purport to specify certain governing laws,
the jurisdictions in which legal proceedings may be instituted or methods of
resolving disputes. In addition, no opinion is expressed herein as to any of the
topics
<PAGE>

listed under Section 19 "Specific Legal Issues" of the Third-Party Legal Opinion
                                                       -------------------------
Report, published in 1991 by the Section of Business Law of the American Bar
------
Association.

The opinions expressed herein are solely for the benefit of you in connection
with the Asset Sale Agreement and Ancillary Documents and may not be relied on
in any manner or for any purpose by any other Person; nor may copies be
furnished to any other Person without the prior written consent of this firm.

Very truly yours,

MORGAN, LEWIS & BOCKIUS LLP
<PAGE>

                                 Exhibit 4.3A
                 Form of Legal Opinion of Purchaser"s Counsel

February ___, 2000

Orthovita, Inc.
45 Great Valley Parkway
Malvern, PA 19355

Vita Licensing, Inc.
300 Delaware Avenue
Suite 900, 9/th/ Floor
MC-DE5403
Wilmington, DE 19801

Ladies and Gentlemen:

We have acted as counsel to Implant Innovations, Inc., a Florida corporation
(the "Company"), in connection with the Asset Sale Agreement dated as of
February ___, 2000 (the "Agreement") by and among Orthovita, Inc., Vita
Licensing, Inc. and the Company. Except as otherwise indicated herein,
capitalized terms used in this Opinion Letter are defined as set forth in the
Agreement or the Accord (as defined below), as the case may be. We are
delivering this Opinion Letter at the request of our clients pursuant to Section
4.3.4 of the Agreement.

Except as otherwise expressly modified herein to the contrary, this Opinion
Letter is governed by, and shall be interpreted in accordance with, the Legal
Opinion Accord and commentary thereto (the "Accord") of the ABA Section of
Business Law (1991). As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord, and this Opinion
Letter should be read in conjunction with the Accord.

In our capacity as counsel to the Company, we have examined signed copies of the
Transaction Documents to which the Company is a party. With respect to various
questions of fact material to this Opinion Letter, we have relied upon (i) the
representations and warranties made by the Company in the Transaction Documents
and (ii) the Certificate of ____________, ___________ of the Company, attached
to this Opinion Letter as Attachment A.

Based upon and subject to the foregoing, and subject to the qualifications that
follow, it is our opinion that:
<PAGE>

1.   The Company is incorporated under the laws of the State of Florida and its
     status is active.

2.   To our Knowledge, the Company has the corporate power and authority to
     conduct its business as it is now being conducted.

3.   The Company has the corporate power and authority to execute and deliver
     the Transaction Documents and to perform its obligations under the
     Transaction Documents.

4.   The Transaction Documents have been executed and delivered by the Company.

5.   The execution and delivery of the Transaction Documents, performance by the
     Company of its obligations under the Transaction Documents and the exercise
     by the Company of the rights created by the Transaction Documents do not
     (i) violate the Company's Constituent Documents; (ii) to our Knowledge,
     constitute a breach of or default under any material agreement or
     instrument to which the Company is a party or by which it or its assets are
     bound; (iii) to our Knowledge, result in the creation of a mortgage,
     security interest or other encumbrance upon the assets of the Company; (iv)
     to our Knowledge, violate any judgment, decree or order of any court or
     administrative tribunal, which judgment, decree or order is binding upon
     the Company or its assets; or (v) to our Knowledge, violate any Federal or
     Florida law, rule or regulation.

6.   The Agreement and the Transaction Documents are enforceable against the
     Company.

The opinions expressed herein are specifically limited to the Federal Law and
the Laws of the State of Florida.

This opinion is limited to matters expressly set forth herein and no opinion is
to be implied or may be inferred beyond the matters expressly stated herein.

Pursuant to Section 21 of the Accord, the phrase "Primary Lawyer Group," as used
in the Accord is hereby modified. For purposes of applying the Accord to this
Opinion Letter, the Primary Lawyer Group means the lawyers of this firm who have
given substantive legal attention to the representation of the Company in
connection with the Agreement and the transactions contemplated by it.

Subject to the foregoing, this Opinion Letter may be relied upon by you only in
connection with the Agreement and the Transaction Documents and the transactions
contemplated thereby, and may not be used or relied upon by you or any other
person, firm, corporation or entity for any other purpose whatsoever, except to
<PAGE>

Orthovita, Inc.
Vita Licensing, Inc.
February ___, 2000
Page 75

the extent authorized in the Accord, without our prior express written consent
in each such instance.

Very truly yours,

STEEL HECTOR & DAVIS LLP

KAP/TGO/JIM
<PAGE>

                                 ATTACHMENT A

                         CERTIFICATE OF _____________
                AS ______________ OF IMPLANT INNOVATIONS, INC.

I am _________ of Implant Innovations, Inc., a Delaware corporation (the
"Company"). I give this Certificate as support for factual matters contained in
the Opinion Letter of Steel Hector & Davis LLP ("SHD") delivered to Orthovita,
Inc. and Vita Licensing, Inc. (collectively, "Sellers") in connection with the
Asset Sale Agreement (the "Agreement") dated as of February ___, 2000 among
Sellers and the Company. All information in this Certificate is given as of
today. Capitalized terms used in this Certificate are defined as set forth in
the Agreement.

1.   A true and correct copy of each of the Company's Articles of Incorporation
and Bylaws as currently in effect has previously been provided to SHD and has
not been rescinded or repealed.

2.   The Company has not approved dissolution and has not taken any other steps
leading to its dissolution.

3.   The Company has adopted resolutions authorizing the Company to take all
actions required to be taken by it in connection with the transactions
contemplated by the Agreement and the related documents and agreements
(collectively, the "Transaction Documents").

4.   The Company has delivered to SHD all of the documents that may affect
authorization of the Agreement. All of the documents delivered are true and
correct and have not been rescinded or repealed.

5.   The Company is not a party to any agreement or instrument that may
adversely affect the Transaction Documents and is not subject to any
restrictions, judgments, orders, decrees, actions, claims, investigations or
other proceedings that may adversely affect the transactions contemplated by the
Transaction Documents.

6.   The Company's books and records are complete.

Dated: February ___, 2000
          __________________________________
                                                     ----------, ------------
                                                     Implant Innovations, Inc.
<PAGE>

Orthovita, Inc.
Vita Licensing, Inc.
February ___, 2000
Page 2

                                      -2-ASSET PURCHASE AGREEMENT

                                 BY AND BETWEEN

            BOOTH CREEK SKI HOLDINGS, INC., a Delaware corporation,

                                   AS SELLER,

                                      AND

          GT ACQUISITION I, LLC a Delaware limited liability company,

                                    AS BUYER

                                  DATED AS OF

                                 MARCH 21, 2000
<PAGE>

                               Table of Contents
                               -----------------
                                                               Page
                                                               ----

RECITALS:.........................................................1
  ARTICLE I Definitions...........................................2
   1.01 Previously Defined Terms..................................2
   1.02 General Definitions.......................................2
  ARTICLE II Purchase and Sale of the Purchased Assets............7
   2.01 Purchase and Sale.........................................7
   2.02 Assumed Liabilities.......................................7
   2.03 Deposit...................................................8
   2.04 Consideration.............................................9
  ARTICLE III Closing and Closing Date Deliveries.................9
   3.01 Closing and Closing Date..................................9
   3.02 Closing Deliveries.......................................10
   3.03 Cooperation..............................................11
  ARTICLE IV Representations and Warranties of Ski Holdings......11
   4.01 Organization and Qualification...........................11
   4.02 Authority................................................12
   4.03 No Conflicts.............................................12
   4.04 Investments..............................................12
   4.05 Intentionally Omitted....................................12
   4.06 Intentionally Omitted....................................12
   4.07 Absence of Certain Changes or Events.....................13
   4.08 Brokers..................................................13
   4.09 Taxes....................................................13
  ARTICLE V Representations and Warranties of GT Acquisition.....16
   5.01 Valid Existence..........................................16
   5.02 GT Acquisition Authority.................................16
   5.03 No Conflict..............................................16
   5.04 Brokers..................................................17
   5.05 Limited Representations and Warranties...................17
  ARTICLE VI Conditions of Closing Applicable to GT Acquisition..17
   6.01 Termination..............................................17
   6.02 Bring Down...............................................17
   6.03 No Pending Matters.......................................18
   6.04 Closing Proceedings......................................18
   6.05 Governmental Approvals; U.S. Forest Service..............18
   6.06 Absence of Certain Changes or Events.....................19
   6.07 Cash Proceeds............................................19
   6.08 Transition Services......................................20
   6.09 Necessary Assets and Rights..............................20
   6.10 Contingent Liabilities...................................20
   6.11 Accounts Payable.........................................21
   6.12 Releases from Credit Agreement...........................22
   6.13 Opinion..................................................22
   6.14 Transfer of Premises and Liquor Licenses.................22
   6.15 Targhee Corp Mergers.....................................23
   6.16 Consents.................................................23
<PAGE>

                               Table of Contents
                               -----------------
                                                               Page
                                                               ----

  ARTICLE VII Conditions to Closing Applicable to Ski Holdings...23
   7.01 Termination..............................................23
   7.02 Bring Down...............................................23
   7.03 Pending Matters..........................................23
   7.04 Closing Proceedings......................................24
   7.05 Transition Services......................................24
   7.06 Governmental Approvals; U.S. Forest Service..............24
   7.07 Liens....................................................25
   7.08 Release of Guarantees....................................25
   7.09 Opinion and Release......................................25
   7.10 Consents.................................................25
  ARTICLE VIII Termination.......................................25
   8.01 Termination Events.......................................25
  ARTICLE IX Certain Agreements and Understandings...............26
   9.01 Purchase Price Allocation................................26
   9.02 Access to Information....................................27
   9.03 Exclusivity..............................................28
   9.04 Indemnification..........................................29
  ARTICLE X Miscellaneous........................................32
   10.01 Expenses................................................32
   10.02 Survival................................................32
   10.03 Entire Agreement........................................32
   10.04 Counterparts............................................32
   10.05 Assignment..............................................33
   10.06 Headings................................................33
   10.07 Governing Law...........................................33
   10.08 Notices.................................................33
   10.09 U.S. Dollars............................................35
   10.10 Savings Clause..........................................35
   10.11 Interpretation..........................................35

Schedules
---------

Schedule 1.02-1 - Cash Receipts and Disbursements during Interim Period
Schedule 1.02-2 - Other Charges during Interim Period
Schedule 1.02-3 - Legal Description of Real Properties
Schedule 4.03 - Consents
Schedule 4.09 - Tax Matters
Schedule 6.09 - Assets
Schedule 7.08 - Release of Guarantees
Schedule 9.01 - Purchase Price Allocation

Exhibits
--------

Exhibit A - Option and Purchase Agreements; Agreement to Initiate
Exhibit B - Transition Services Agreement
<PAGE>

                            ASSET PURCHASE AGREEMENT

          THIS  ASSET  PURCHASE  AGREEMENT  dated as of March  21,  2000  (this
"Agreement")  is by and between  Booth  Creek Ski  Holdings,  Inc.,  a Delaware
corporation,  as Seller ("Ski Holdings"), and GT Acquisition I, LLC, a Delaware
limited liability company, as Buyer ("GT Acquisition").

                                   RECITALS:

     A. Ski Holdings  owns all of the issued and  outstanding  capital stock of
Grand Targhee Incorporated,  a Delaware corporation  ("Targhee Corp").  Targhee
Corp owns all of the issued and outstanding capital stock of B-V Corporation, a
Wyoming corporation,  Targhee Company, a Delaware corporation,  and Targhee Ski
Corp., a Delaware corporation (collectively, the "Subsidiaries").

     B. Targhee  Corp  operates  the Grand  Targhee Ski and Summer  Resort (the
"Resort") in Alta,  Wyoming (the "Resort Business") under that certain Ski Area
Term Special Use Permit approved and issued by the United States  Department of
Agriculture-Forest  Service (the "U.S.  Forest Service") on March 18, 1997 (the
"Forest Service Permit") for the Resort.

     C. Targhee Corp and each of its Subsidiaries will merge with Ski Holdings,
with Ski Holdings  being the surviving  corporation  in each case (the "Targhee
Corp Mergers").

     D. After the  consummation  of the  Targhee  Corp  Mergers,  Ski  Holdings
desires to sell to GT Acquisition  and GT Acquisition  desires to purchase from
Ski  Holdings  all  of the  assets  formerly  held  by  Targhee  Corp  and  its
Subsidiaries  prior to the Targhee Corp Mergers on the terms and  conditions of
this Agreement.
<PAGE>

     NOW,  THEREFORE,  in  consideration of the mutual covenants and agreements
hereinafter  set forth  and for  other  good and  valuable  consideration,  the
receipt and  sufficiency of which are hereby  acknowledged,  the parties hereto
agree as follows:

                                   ARTICLE I

                                  Definitions

     1.01  Previously  Defined Terms.  Each term defined in the first paragraph
and the Recitals  shall have the meaning set forth above  whenever used herein,
unless  otherwise  expressly  provided or unless the context  clearly  requires
otherwise.

     1.02 General  Definitions.  In addition to the terms  defined in the first
paragraph and Recitals,  whenever used herein,  the following  terms shall have
the meanings set forth below unless otherwise  expressly provided or unless the
context clearly requires otherwise:

          "Affiliated Parties" See Section 9.03.

          "Assumed Liabilities" See Section 2.02(a).

          "Assumed Tax-related  obligations" shall mean Tax-related obligations
(for Taxes  other than  income  taxes)  which (i) were  accrued on the books of
Targhee Corp or its Subsidiaries  immediately prior to the Targhee Corp Mergers
consistent  with past practices and reserved in accordance with GAAP, (ii) were
incurred in the  ordinary  course of business  and (iii) are not past due as of
the Closing Date.

          "Assumption Agreement" See Section 3.02(b).

          "Closing" See Section 3.01.

          "Closing Date" See Section 3.01.

          "Code" shall mean the Internal Revenue Code of 1986, as amended.

          "Credit Agreement" See Section 6.12.
<PAGE>

          "Delaware Law" shall mean the general  corporation laws applicable in
the State of Delaware.

          "Deposit" See Section 2.03.

          "Deposit Agent" shall mean Compass Bank.

          "Deposit  Escrow  Agreement"  shall mean that certain  Deposit Escrow
Agreement, dated March 21, 2000, among Ski Holdings, GT Acquisition and Deposit
Agent.

          "Effective  Date"  shall  mean  the  last  calendar  day  before  the
commencement of the Interim Period.

          "GAAP" shall mean  generally  accepted  accounting  principles in the
United States.

          "Indenture" See Section 6.13.

          "Interim  Period" shall mean the period  beginning  February 21, 2000
and ending as of the close of business on the day before the Closing Date.

          "Knowledge" of Ski Holdings shall mean the actual knowledge,  without
inquiry, of Christopher Ryman,  Elizabeth Cole, Brian Pope, Tamra Underwood and
Tim Beck.

          "Net Cash  Receipts" of Targhee Corp during the Interim  Period shall
mean  (a)  the  aggregate   actual  cash  receipts  of  Targhee  Corp  and  its
Subsidiaries during the Interim Period, minus (b) the actual cash disbursements
of Targhee Corp and its Subsidiaries  during the Interim Period, all as (a) and
(b) above are more particularly  determined pursuant to Schedule 1.02-1,  minus
(c) those charges listed on Schedule  1.02-2 attached hereto (to the extent not
actually paid by Targhee Corp during the Interim Period),  minus (d) any costs,
expenses  and other  charges of Targhee  Corp and/or its  Subsidiaries  and any
costs,  expenses and other  charges of Ski  Holdings  allocable to Targhee Corp
and/or its  Subsidiaries  that are, in each case,  directly related to the land
<PAGE>

exchange  process  between  Targhee Corp and the U.S.  Forest  Service that, in
accordance with the original terms thereof, are not delinquent on the Effective
Date or are incurred  thereafter  (to the extent not  actually  paid by Targhee
Corp during the Interim  Period),  minus (e) any charges  which would have been
allocable to Targhee Corp had the Transition  Services Agreement been in effect
during the  Interim  Period and minus (f) per diem  interest  on the  principal
amount of $11,000,000 during the period commencing on April 30, 2000 and ending
on the day preceding the Closing Date at a rate of 12% per annum.

          "Person" shall mean any individual,  corporation,  limited  liability
company, partnership,  joint venture, association,  joint stock company, trust,
unincorporated organization or governmental agency.

          "Purchase Price" See Section 2.04.

          "Purchased  Assets"  shall mean all of the right,  title and interest
formerly  held by Targhee Corp and its  Subsidiaries  immediately  prior to the
Targhee Corp Mergers in and to the Resort Business and all assets and interests
pertaining to, or used in the operation of, the Resort Business, whether or not
carried  and  reflected  on the  books  of  Ski  Holdings,  including,  without
limitation, the following:

          (a) cash or cash equivalents (subject to Section 6.07);

          (b) marketable securities;

          (c) all  present  and future  rights to payment for goods or services
rendered whether or not earned by performance, notes or other receivables;

          (d) all contracts, leases, subleases,  arrangements,  commitments and
other  agreements,  including,  without  limitation,  the option  and  purchase
agreements and any other agreements listed on Exhibit A hereto,  the beneficial
interests of Targhee Corp and its  Subsidiaries  in and to any such  agreements
<PAGE>

listed on Exhibit A hereto to which Ski Holdings or another  affiliated  entity
is a party, and all of the right,  title and interest of Ski Holdings under all
contracts and  agreements  (whether or not listed on Exhibit A hereto) to which
it is a party for the exclusive  benefit of the Resort or the Resort  Business,
all  vendor   agreements,   purchase   orders,   installation  and  maintenance
agreements, computer software licenses, hardware lease or rental agreements;

          (e) except for prepaid expenses relating to insurance costs allocated
to Targhee Corp for periods  following  the  Effective  Date,  all deposits and
advances, prepaid expenses and other prepaid items;

          (f) all buildings,  structures,  installations,  fixtures,  fittings,
improvements,  betterments  and additions  situated on the parcels of land more
fully   described  on  Schedule   1.02-3,   together  with  all  easements  and
rights-of-way used or useful in connection therewith;

          (g) all inventories,  spare parts, stores, supplies, fuel, machinery,
equipment,  vehicles, trucks, chassis, generators,  containers, spare tires and
parts,  tools,  appliances,   furniture,  office  furniture,  fixtures,  office
supplies and office  equipment,  computers,  computer  terminals  and printers,
computer software, telephone systems,  telecopiers and photocopiers,  and other
tangible personal property of every kind and description;

          (h)    the     World     Wide    Web    site    for    the     Resort
(http://www.grandtarghee.com)  and all content  relating to the Resort thereon,
the domain  name  "www.grandtarghee.com"  and any  registrations  with  respect
thereto,  all  trade  names,  trademarks,  trademark  registrations,  trademark
applications,   service  marks,   service  mark  registrations,   service  mark
applications,  copyrights,  copyright  registrations,  copyright  applications,
patent rights,  licenses with respect to any of the  foregoing,  trade secrets,
proprietary  information and know-how,  inventions,  inventors' notes, drawings
<PAGE>

and designs,  customer and vendor lists and the goodwill associated with any of
the foregoing, it being understood that the Purchased Assets do not include any
right,  interest or assets related to Ski Holdings'  e-commerce "virtual store"
and gift certificate transaction processing system;

          (i)  all  qualifications,  registrations,  filings  (other  than  Tax
registrations  and filings  except that copies of all Wyoming sales tax filings
and  records  related  to  the  Purchased  Assets  will  be  transferred  to GT
Acquisition),    privileges,   franchises,   immunities,   licenses,   permits,
authorizations  and approvals of any  governmental  authority which are used or
required  in order to own  and/or  operate  the Resort as  presently  operated,
including,  without limitation,  the Forest Service Permit, all certificates of
occupancy and certificates,  licenses and permits relating to building, safety,
environmental laws,  alcoholic beverage laws, fire and health to the extent any
of the same are transferable or assignable to GT Acquisition;

          (j)  choses  in  action,  claims  and  causes  of action or rights of
recovery  or  set-off  of every  kind and  character,  in each case only to the
extent related to the Purchased Assets or the Assumed Liabilities;

          (k)  all  files,  papers,  documents  and  records  relating  to  the
Purchased Assets, including,  without limitation,  credit, sales and accounting
records,  price sheets,  catalogues  and sales  literature,  books,  processes,
formulae, advertising material, stationery, office supplies, forms, catalogues,
manuals,  correspondence,  production records, employment records and any other
information  reduced to writing relating to the Purchased Assets, but excluding
Tax  returns,  work papers and  corporate  minute and stock  books  except that
copies of all Wyoming  sales tax filings and records  related to the  Purchased
Assets will be transferred to GT Acquisition; and

          (l) the Resort as a going concern.
<PAGE>

          "Reference  Balance Sheet" shall mean the consolidated  balance sheet
of Targhee Corp and its Subsidiaries as at the Reference Balance Sheet Date.

          "Reference Balance Sheet Date" shall mean January 28, 2000.

          "Senior Notes" See Section 2.03(d)(ii).

          "Tax" See Section 4.09(a).

          "Tax-related obligation" See Section 9.04(c).

                                  ARTICLE II.

                   Purchase and Sale of the Purchased Assets

     2.01  Purchase and Sale.  Upon the terms and subject to the  conditions of
this Agreement,  Ski Holdings shall sell, assign, convey,  transfer and deliver
the Purchased  Assets to GT Acquisition at the Closing on the Closing Date, and
GT  Acquisition  shall  purchase the Purchased  Assets from Ski Holdings at the
Closing on the Closing Date (and shall cause Booth Creek,  Inc. to assign to GT
Acquisition  its right,  title and interest to the Agreement to Initiate listed
on Exhibit A hereto),  subject to all liens, security interests,  encumbrances,
charges  and  rights of  others,  except  for the  liens,  security  interests,
encumbrances and charges arising under the Credit Agreement and liens, security
interests, encumbrances and charges in favor of Ski Holdings.

     2.02  Assumed   Liabilities.   GT  Acquisition   shall,  at  the  Closing,
irrevocably and absolutely,  assume,  agree to perform,  and, when due, pay and
discharge,  all debts,  obligations  and  liabilities of any nature  whatsoever
(fixed, contingent, known or unknown and whenever arising) that were the debts,
obligations or liabilities of (i) Targhee Corp or its Subsidiaries  immediately
prior to the  consummation  of the Targhee  Corp  Mergers and (ii) Ski Holdings
incurred with respect to the Resort or the Resort Business,  including, without
limitation,  all obligations  arising under the contracts and agreements of Ski
Holdings listed on Exhibit A hereto (collectively,  the "Assumed Liabilities");
<PAGE>

provided,   however,  that  the  Assumed  Liabilities  shall  not  include  any
Tax-related obligations other than Assumed Tax-related obligations.

     2.03  Deposit.  Concurrently  with the  execution  of this  Agreement,  GT
Acquisition  shall deposit with Deposit Agent ONE MILLION ONE HUNDRED  THOUSAND
DOLLARS ($1,100,000) (the "Deposit") in the manner more particularly  described
in  subsection  (d) below,  which Deposit shall be held by the Deposit Agent in
accordance  with the terms of the  Deposit  Escrow  Agreement  to be applied as
follows:

     (a) If the Closing shall occur,  the Deposit,  plus any accrued  interest,
shall be  applied as a credit  against  the  purchase  price  consideration  as
provided in Section 2.03.

     (b) If the Closing  shall not occur  because of a material  breach of this
Agreement by GT Acquisition  and Ski Holdings is not in material breach of this
Agreement,  then upon the  termination  of this  Agreement in  accordance  with
Article VIII, Ski Holdings  shall be entitled to the Deposit,  plus any accrued
interest,  and such payment shall constitute  liquidated damages and be in lieu
of any legal recourse for any additional damages,  specific  performance or any
other rights or remedies available to Ski Holdings resulting therefrom.

     (c) If the  Closing  shall not occur for any other  reason,  then upon the
termination of this  Agreement in accordance  with Article VIII, GT Acquisition
shall retain the Deposit,  plus any accrued  interest,  and all amounts held by
the Deposit Agent shall be immediately returned to GT Acquisition.

     (d) At the election of GT  Acquisition,  the Deposit  shall be paid on the
date hereof to the Deposit Agent in the following manner:

               (i) $1,100,000 in cash to the Deposit Agent; or
<PAGE>

               (ii) $1,100,000  in aggregate  principal  amount of senior notes
                    (the "Senior Notes"), issued by Booth Creek Ski Group, Inc.
                    to  Booth  Creek  Partners  Limited  II,  L.L.L.P.,   (plus
                    warrants to purchase  74.7 shares of common  stock of Booth
                    Creek Ski Group, Inc.) duly endorsed for transfer in blank.

     2.04  Consideration.  On the terms and subject to the  conditions  of this
Agreement and in consideration  for the Purchased Assets, at the Closing on the
Closing Date, GT  Acquisition  shall pay to Ski Holdings the sum of $11,000,000
(the  "Purchase  Price") in the  following  manner:

               (i)  if the Deposit is made pursuant to Section 2.02(d)(i),  the
                    $1,100,000  Deposit  paid to the  Deposit  Agent,  plus the
                    accrued  interest,  shall be applied to the Purchase  Price
                    and paid to Ski Holdings by the Deposit  Agent  pursuant to
                    the Deposit Escrow Agreement; plus

               (ii) $11,000,000 less the amount paid pursuant to clause (i), if
                    any,  shall be paid by GT  Acquisition  to Ski  Holdings by
                    wire transfer of  immediately  available  federal funds for
                    credit  to Ski  Holdings  to a  bank  account  or  accounts
                    designated by Ski Holdings in writing prior to the Closing.

     If the Deposit constitutes Senior Notes, such securities shall be returned
to GT Acquisition at the Closing.

                                  ARTICLE III

                      Closing and Closing Date Deliveries

     3.01  Closing and Closing  Date.  The term  "Closing" as used herein shall
refer to the  actual  conveyance,  transfer,  assignment  and  delivery  of the
Purchased  Assets to GT Acquisition in exchange for the Purchase Price pursuant
to Section 2.04 of this Agreement.  The Closing shall take place at the offices
of Winston & Strawn,  200 Park Avenue,  New York,  New York, at 10:00 a.m., New
York time,  within three (3) business  days after the  conditions  set forth in
Articles VI and VII hereof  have been  satisfied  or waived  subject to Article
VIII of this Agreement  ("Closing Date"), or at such other place and time or on
<PAGE>

such other date as is mutually  agreed to in writing by GT Acquisition  and Ski
Holdings. Such Closing may be accomplished by facsimile transmission of Closing
documents and facsimile  signatures,  provided that the original of such signed
documents  are  transmitted  to the party or parties  entitled to receive  such
documents within three (3) business days following the Closing Date.

     3.02 Closing Deliveries. At or prior to the Closing on the Closing Date:

     (a) Ski Holdings shall deliver to GT Acquisition:

               (i)  all such  bills  of  sale,  deeds,  assignments  and  other
                    documents and instruments of sale,  assignment,  conveyance
                    and  transfer,  as GT  Acquisition  or its counsel may deem
                    necessary  or  desirable  to  effect  the  transfer  of the
                    Purchased Assets to GT Acquisition;

               (ii) certified  copies  of  the  resolutions  of  the  Board  of
                    Directors  of  Ski  Holdings,   approving  the   execution,
                    delivery  and   performance   of  this  Agreement  and  the
                    consummation of the  transactions  contemplated  under this
                    Agreement,  all  in  accordance  with  its  Certificate  of
                    Incorporation and By-laws;

               (iii)certificates  of the  Secretaries  of State of the State of
                    Delaware  and the State of Wyoming as to the  Targhee  Corp
                    Mergers;

               (iv) certificates  of the  Secretary  of State  of the  State of
                    Delaware as to the legal existence and good standing of Ski
                    Holdings;

               (v)  a certificate of  non-foreign  status in the form set forth
                    in the U.S. Treasury Regulations;

               (vi) schedules  of  accounts  payable  of  Targhee  Corp and its
                    Subsidiaries,  including  accounts  payable of Ski Holdings
                    allocable  to Targhee  Corp,  as at  February  18, 2000 for
                    Targhee  Corp and its  Subsidiaries  and as at February 21,
                    2000 for Ski Holdings, in each case reflecting the aging of
                    such accounts; and

               (vii)such other  documents  to be  delivered by Targhee Corp and
                    Ski Holdings  hereunder or as GT Acquisition or its counsel
                    may  reasonably  request to carry out the  purposes of this
                    Agreement.

     (b) GT Acquisition shall deliver to Ski Holdings:

               (i)  the payment to be delivered by GT  Acquisition  pursuant to
                    Section 2.04 of this Agreement;
<PAGE>

               (ii) an assumption  agreement  pursuant to which GT  Acquisition
                    assumes   the   Assumed    Liabilities   (the   "Assumption
                    Agreement");

               (iii)certified copies of a written consent of the sole Member of
                    GT  Acquisition  approving  the  execution,   delivery  and
                    performance of this Agreement and the  consummation  of the
                    transactions  contemplated  under  this  Agreement,  all in
                    accordance  with  its  certificate  of  formation  and  its
                    limited liability company agreement;

               (iv) such other  documents  to be  delivered  by GT  Acquisition
                    hereunder or as Ski Holdings or its counsel may  reasonably
                    request to carry out the purposes of this Agreement.

     3.03  Cooperation.  Prior to the Closing Date, each of Ski Holdings and GT
Acquisition  shall use  reasonable  efforts to attempt to secure all  necessary
consents required for its consummation of the transactions  contemplated herein
and to cause all  conditions  precedent  for its benefit to be  satisfied  in a
timely manner. In addition,  Ski Holdings and GT Acquisition shall, on request,
on and after the Closing Date,  cooperate  with one another by  furnishing  any
additional  information,  executing and  delivering  any  additional  documents
and/or instruments and doing any and all such other things as may be reasonably
required by the parties or their counsel to  consummate or otherwise  implement
the transactions contemplated by this Agreement.

                                  ARTICLE IV.

                 Representations and Warranties of Ski Holdings

     Ski  Holdings  represents  and  warrants  to  and  covenants  with  (which
representations,  warranties  and  covenants  shall  survive the Closing to the
extent provided in this Agreement) GT Acquisition as follows:

     4.01 Organization and Qualification.  Ski Holdings is a corporation,  duly
organized, validly existing and in good standing under the laws of the State of
<PAGE>

Delaware,  and has all  requisite  corporate  power and  authority  to execute,
deliver and perform its obligations  under this Agreement and to consummate the
transactions  contemplated hereby.

     4.02  Authority.  Ski Holdings has full right and power to enter into, and
perform  its  obligations  under this  Agreement,  and has taken all  requisite
action to authorize the execution,  delivery and performance of this Agreement,
and the consummation of the sale of the Purchased Assets and other transactions
contemplated  by this Agreement;  and this Agreement has been duly  authorized,
executed and  delivered by Ski Holdings and is binding  upon,  and  enforceable
against,  Ski Holdings in accordance with its terms; except as such enforcement
may be limited by bankruptcy, insolvency,  reorganization,  moratorium or other
similar laws  affecting  enforcement  of  creditors'  rights  generally  and by
general  principles  of equity  (whether  applied in a proceeding  at law or in
equity).

     4.03 No Conflicts.  The  execution  and delivery of this  Agreement by Ski
Holdings and the  performance  of its  obligations  hereunder will not conflict
with or constitute a default under its certificate of  incorporation or by-laws
or, to Ski Holdings' Knowledge, conflict with or constitute a default under any
bond,  note,  debt  instrument,  security  agreement or mortgage,  or any other
material  agreement  or  commitment  binding  upon Ski  Holdings,  provided the
consents specified on Schedule 4.03 are obtained.

     4.04 Investments.  On the date hereof,  except for equity interests in the
Subsidiaries,  Targhee Corp does not own any  securities or any other direct or
indirect  interest in any Person  (including any joint venture or partnership),
other than the Jackson Hole Resort Association.

     4.05 Intentionally Omitted.

     4.06 Intentionally Omitted.
<PAGE>

     4.07 Absence of Certain  Changes or Events.  To Ski  Holdings'  Knowledge,
since October 31, 1999, the Resort has been operated in the ordinary course and
there has not occurred any sale or transfer of a material amount of property of
the Resort,  except in the ordinary  course of business.  Without  limiting the
foregoing,  to Ski  Holdings'  Knowledge,  between the date hereof  through and
including the Closing Date, Targhee Corp shall have recognized deferred revenue
in the ordinary  course of business and in accordance with GAAP consistent with
the past  practices of Targhee Corp.  During the Interim  Period,  Targhee Corp
shall not have declared or paid any cash dividend or otherwise  declared,  paid
or distributed  to Ski Holdings any property of any type or nature,  whether in
cash or otherwise,  except for  distribution of cash permitted by Section 6.07,
or purchased,  redeemed or otherwise acquired or agreed to purchase,  redeem or
otherwise, acquire any of the issued and outstanding stock of Targhee Corp.

     4.08 Brokers.  Neither this Agreement nor the sale of the Purchased Assets
or any other transaction contemplated by this Agreement was induced or procured
through any Person acting on behalf of, or representing  either Targhee Corp or
Ski  Holdings or any of its  partners  as broker,  finder,  investment  banker,
financial advisor or in any similar capacity.

     4.09 Taxes.

     (a) The term "Tax"  means any net income,  capital  gains,  gross  income,
gross receipts, sales, use, transfer, ad valorem, franchise,  profits, license,
capital,  withholding,   payroll,  employment,   excise,  goods  and  services,
severance, stamp, occupation, premium, property, windfall profits, or other tax
or  customs  duties,  or  any  interest,  any  penalties,  additions  to tax or
additional  amounts  incurred or accrued under  applicable  tax law or properly
assessed or charged by any Taxing authority (domestic or foreign), or any fees,
interest,  or penalties due the United States under the Forest  Service  Permit
approved  by the U.S.  Forest  Service  for the  Resort.  For  purposes  of the
definition  of Tax, any  interest,  penalties,  additions to Tax or  additional
amounts that relate to Taxes for any period, or a portion of any period,  ended
<PAGE>

on or before the Closing Date shall include any interest, penalties,  additions
to Tax, or additional amounts relating to Taxes for such periods, regardless of
whether such items are  incurred,  accrued,  assessed or similarly  charged on,
before or after the Closing Date.

     (b) For purposes of this  Section  4.09 and Section 9.04 hereof,  the term
"Targhee Corp" shall be deemed to include any Subsidiary of Targhee Corp.

     (c) To Ski  Holdings'  Knowledge,  (i) Targhee  Corp has timely  filed Tax
returns or reports for all years and periods (and portions thereof) and for all
jurisdictions  (whether  federal,  state,  local or  foreign) in which any such
returns or reports  were due and which Tax  returns are true and correct in all
material respects;  (ii) all Taxes shown to be due and payable on such returns,
reports and estimates  have been paid;  (iii) all Taxes not yet due and payable
have in all  material  respects  been  accrued on the books of Targhee  Corp in
accordance with GAAP and reserves have been established  therefor in accordance
with GAAP and (iv) there are no unpaid assessments for additional Taxes for any
period  ending  prior to the date  hereof,  other than those  contested in good
faith,  in all such  cases,  except to the extent any  failure to do any of the
foregoing  could not  reasonably be expected to have a material  adverse effect
upon Targhee Corp and its Subsidiaries, taken as a whole.

     (d) To Ski Holdings'  Knowledge,  Targhee Corp is not a party to any joint
venture,   partnership  or  other  arrangement  that  could  be  treated  as  a
partnership  for  federal  income Tax  purposes,  except to the extent any such
treatment  could not  reasonably be expected to have a material  adverse effect
upon Targhee Corp and its Subsidiaries, taken as a whole.
<PAGE>

     (e) To Ski Holdings' Knowledge, Targhee Corp has (i) withheld all required
amounts from its employees,  agents,  contractors and nonresidents and remitted
such amounts to the proper agencies;  (ii) paid all employer  contributions and
premiums;  and (iii) filed all federal,  state,  local and foreign  returns and
reports  with  respect to  employee  income Tax  withholding,  social  security
unemployment  Taxes  and  premiums,   all  in  material   compliance  with  the
withholding  Tax  provisions  of the Internal  Revenue Code of 1986, as amended
(the "Code") as in effect for the applicable year and other applicable federal,
state,  local or  foreign  laws,  in all such  cases,  except to the extent any
failure to do any of the foregoing  could not  reasonably be expected to have a
material  adverse  effect upon  Targhee Corp and its  Subsidiaries,  taken as a
whole.  Targhee  Corp is a United  States  person for U.S.  federal  income Tax
purposes and will provide GT  Acquisition  with a  certificate  of  non-foreign
status at the Closing.

     (f) Except as set forth on Schedule 4.09, to Ski Holdings'  Knowledge,  no
federal,   state,   local  or  foreign  Tax  audits  or  other   administrative
proceedings, discussions or court proceedings are presently pending with regard
to any Taxes or tax  returns  of  Targhee  Corp which  audits,  proceedings  or
discussions could reasonably be expected to have a material adverse effect upon
Targhee Corp and its Subsidiaries, taken as a whole.

     (g) To Ski  Holdings'  Knowledge,  Targhee  Corp is not a party to any tax
sharing agreement or similar  arrangement for the sharing of Tax liabilities or
benefits,  the  provisions  of  which  survive  the  Closing  and  which  could
reasonably be expected to have a material  adverse effect upon Targhee Corp, or
its successors, and its Subsidiaries, taken as a whole, after the Closing.
<PAGE>

     (h) Ski Holdings shall pay all federal,  state, local and foreign transfer
taxes  applicable  to,  imposed  upon,  or arising  out of the  transfer of the
Purchased  Assets;  provided,  however,  that GT Acquisition shall not take any
action or permit any of its agents to take any action which causes the transfer
of the  Purchased  Assets  to fail to  qualify  under the  "business  transfer"
exemption  (Wyoming Statutes Section  39-15-101(M))  from Wyoming sales and use
tax.

                                   ARTICLE V

                Representations and Warranties of GT Acquisition

     GT  Acquisition  represents  and  warrants  to and  covenants  with (which
representations,  warranties  and  covenants,  shall survive the Closing to the
extent provided in this Agreement) Ski Holdings as follows:

     5.01 Valid Existence.  GT Acquisition is a limited  liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware.

     5.02 GT Acquisition Authority.  GT Acquisition has full right and power to
enter into, and perform its obligations under this Agreement, and has taken all
requisite limited liability company action to authorize the execution, delivery
and  performance of this Agreement and the  consummation of the purchase of the
Purchased Assets and other  transactions  contemplated by this Agreement.  This
Agreement has been duly executed and delivered by GT Acquisition and is binding
upon, and  enforceable  against,  GT Acquisition in accordance  with its terms;
except  as  such   enforcement  may  be  limited  by  bankruptcy,   insolvency,
reorganization,  moratorium  or other  similar laws  affecting  enforcement  of
creditors'  rights  generally  and by  general  principles  of equity  (whether
applied in a proceeding at law or in equity).

     5.03 No  Conflict.  The  execution  and  delivery of this  Agreement by GT
Acquisition  and the  performance of its  obligations  hereunder and thereunder
will not  conflict  with or  constitute  a  default  under its  certificate  of
<PAGE>

formation  or  limited  liability  company  agreement  or under any note,  debt
instrument,  security agreement or mortgage, or any other material agreement or
commitment binding upon GT Acquisition or upon any of its properties.

     5.04  Brokers.  Neither this  Agreement  nor the purchase of the Purchased
Assets or any other  transaction  contemplated by this Agreement was induced or
procured through any Person acting on behalf of, or representing GT Acquisition
or any of its  affiliates  as  broker,  finder,  investment  banker,  financial
advisor or in any similar capacity.

     5.05 Limited Representations and Warranties. Except as otherwise expressly
set forth in this  Agreement,  GT Acquisition  understands  and agrees that Ski
Holdings  will be  transferring  the  Purchased  Assets  to GT  Acquisition  in
exchange  for  the  Purchase  Price  pursuant  to  Section  2.04  in an "AS IS"
transaction and that Ski Holdings is not making any representation, warranty or
assurance  whatsoever to GT Acquisition with respect to the Purchased Assets or
the Assumed Liabilities.  Without limiting the generality of the foregoing,  to
the fullest  extent  permitted by  applicable  law, Ski Holdings  disclaims any
warranty of any nature which may be implied by applicable statutory or judicial
authority.

                                  ARTICLE VI

               Conditions of Closing Applicable to GT Acquisition

     The obligations of GT Acquisition  hereunder  (including the obligation of
GT Acquisition to close the transactions  herein  contemplated)  are subject to
the following conditions precedent:

     6.01  Termination.  Neither GT  Acquisition  nor Ski  Holdings  shall have
terminated this Agreement pursuant to Section 8.01 hereof.

     6.02 Bring Down. The  representations  and warranties made by Ski Holdings
herein to GT Acquisition  shall be true and correct in all material respects on
<PAGE>

and as of the Closing Date with the same effect as if such  representations and
warranties  had been made on and as of the Closing Date, and Ski Holdings shall
have  performed and complied with all  agreements,  covenants and conditions on
their part  required to be performed or complied in all material  respects with
on or prior to the Closing  Date.  At the Closing,  GT  Acquisition  shall have
received a certificate executed by Ski Holdings to the foregoing effect.

     6.03 No Pending Matters.  No investigation,  action, suit or proceeding by
any governmental or regulatory  commission,  agency, body or authority,  and no
action, suit or proceeding by any other Person, shall be pending on the Closing
Date which challenges, or might result in a challenge to, this Agreement or any
transactions  contemplated  hereby,  or which  claims,  or might give rise to a
claim for, damages in a material amount as a result of the consummation of this
Agreement.

     6.04 Closing  Proceedings.  All proceedings to be taken in connection with
the  consummation  of the  transactions  contemplated by this Agreement and all
documents  incident  thereto,  shall  be  reasonably  satisfactory  in form and
substance to GT Acquisition and its counsel, and GT Acquisition and its counsel
shall have received  copies of such documents as GT Acquisition and its counsel
may reasonably request in connection with said transactions.

     6.05  Governmental  Approvals;   U.S.  Forest  Service.  All  governmental
agencies,  departments,  bureaus,  commissions and similar bodies, the consent,
authorization or approval of which is necessary under any applicable law, rule,
order or regulation for the  consummation  by Ski Holdings of the  transactions
contemplated  hereunder and the operation of the Resort by GT Acquisition after
consummation of the transactions hereunder shall have consented to, authorized,
permitted or approved the consummation of the transactions hereunder, including
without  limitation,  the U.S.  Forest  Service and those  governmental  bodies
having  jurisdiction with respect to the various liquor licenses and other such
<PAGE>

licenses and permits  issued in  connection  with the  operation of the Resort.
Without  limiting the foregoing,  GT Acquisition  shall have at the Closing all
rights, title and interest as purchaser under those certain option and purchase
agreements, and as non-federal proponent in that certain Agreement to Initiate,
which are collectively  listed in the attached Exhibit A, which is incorporated
by  reference   thereto  and  Ski  Holdings  shall  transfer  or  cause  to  be
transferred,  all such  right,  title and  interest  to GT  Acquisition  at the
Closing  (other than the right,  title and interest of Booth Creek,  Inc. under
the Agreement to Initiate listed in Exhibit A, which GT Acquisition shall cause
to be transferred to itself). In addition,  without limiting the foregoing, the
U.S. Forest Service shall have consented to, authorized,  permitted or approved
the  substitution  of GT Acquisition  as the  non-federal  proponent  under the
Agreement to Initiate listed in Exhibit A. Ski Holdings shall have no liability
if Targhee Corp suffers any loss or liability as a result of any election by GT
Acquisition to waive this condition and close without such consents.

     6.06 Absence of Certain Changes or Events. From and after the date hereof,
the Resort  shall have been  operated in the  ordinary  course of business  and
there shall not have  occurred  any sale or  transfer  of a material  amount of
property of the Resort,  except in the  ordinary  course of  business.  Without
limiting  the  foregoing,  between the date hereof  through and  including  the
Closing  Date,  Targhee  Corp shall  have  recognized  deferred  revenue in the
ordinary  course of business and in accordance  with GAAP  consistent  with the
past practices of Targhee Corp.

     6.07 Cash  Proceeds.  Immediately  prior to the Targhee Corp Mergers,  Ski
Holdings shall insure that Targhee Corp and its Subsidiaries  have cash on hand
and in bank  accounts  in an amount not less than the sum of (a) the  aggregate
Net Cash Receipts of Targhee Corp during the Interim Period and (b) the balance
<PAGE>

of  deferred  revenues  of Targhee  Corp as of the close of business on the day
before the Closing Date, computed in accordance with GAAP.

     6.08  Transition  Services.   Ski  Holdings  shall  have  entered  into  a
Transition  Services Agreement  substantially in the form of Exhibit B attached
hereto  pursuant to which Ski Holdings  shall provide to GT  Acquisition  those
services  set forth on the  Schedules  to Exhibit B hereto for the time periods
and for the fees  corresponding  to such services as set forth on the Schedules
to Exhibit B hereto.

     6.09  Necessary   Assets  and  Rights.   Upon  the   consummation  of  the
transactions  contemplated by this Agreement, the Purchased Assets will include
all  of  the  material  assets,   properties  and  rights  of  every  type  and
description,  real, personal and mixed, tangible and intangible,  owned or used
by  Targhee  Corp  and  its  Subsidiaries  as of  the  date  hereof,  including
replacement  of such  property  in the  ordinary  course of  business,  for the
conduct of the Resort as presently conducted,  free and clear of any mortgages,
pledges,  liens, security interests,  claims and other encumbrances of any kind
or nature whatsoever, except the ownership interests of the U.S. Forest Service
in the land used by Targhee  Corp and except as  disclosed  on  Schedule  6.09.
Without limiting the foregoing, the Purchased Assets shall include all material
rights as of the Closing Date to the name "Grand Targhee  Incorporated" and all
variations  thereof and all intellectual  property used in the operation of the
Resort that Targhee Corp has as of the date hereof.

     6.10 Contingent Liabilities. The Reference Balance Sheet has been prepared
based upon the  accounting  practices,  procedures  and methods  regularly  and
historically employed by Targhee Corp and its Subsidiaries for reporting to Ski
Holdings and is in  accordance  with GAAP, as  historically  applied by Targhee
Corp and its  Subsidiaries,  and is in accordance with the books and records of
<PAGE>

Targhee  Corp (which books and records are complete and correct in all material
respects) and fairly  presents the  financial  position of Targhee Corp and its
Subsidiaries  in all  material  respects as of such date.  As of the  Reference
Balance Sheet Date,  neither  Targhee Corp nor any  Subsidiary has any material
liabilities  (whether absolute,  accrued,  contingent or otherwise) of a nature
required to be set forth on a balance sheet  prepared in accordance  with GAAP,
except for those set forth on the Reference Balance Sheet.  Since the Reference
Balance  Sheet Date,  Targhee Corp has not  incurred or become  subject to, and
prior to the Closing will not have incurred or become  subject to, any material
liabilities other than liabilities incurred in the ordinary course of business.
GT  Acquisition  acknowledges  that the  accuracy of the  foregoing  statements
contained in this Section 6.10 are intended to constitute a condition precedent
to its obligations to close the transactions contemplated by this Agreement and
are not intended to constitute  representations  and warranties  that would, if
inaccurate,  form  the  basis  of  a  pre-closing  or  post-closing  claim  for
indemnity.

     6.11 Accounts Payable.  On the Effective Date and at the Closing,  (a) all
of the  accounts  payable  (other than those which are  individually  less than
$1,000  and in the  aggregate  less  than  $10,000)  of  Targhee  Corp  and its
Subsidiaries  (including  accounts payable of Ski Holdings allocable to Targhee
Corp) shall have been paid in accordance  with the original  terms of each such
account and in the ordinary course of business, (b) no such accounts payable of
Targhee Corp and its Subsidiaries shall be past due and (c) all amounts payable
with respect to any options and purchase agreements including,  but not limited
to,  the  agreements  listed in  Exhibit A shall have been paid when due by Ski
Holdings in order to preserve the rights, options and other obligations arising
under or in connection with the respective agreements.
<PAGE>

     6.12  Releases  from Credit  Agreement.  Ski Holdings  shall have obtained
releases  of all  liens  on the  Purchased  Assets  from  Fleet  National  Bank
(formerly  known  as  BankBoston,   N.A.),  a  national   banking   association
("BankBoston"),   arising  under  that  certain  Amended  and  Restated  Credit
Agreement  dated as of October 30, 1998,  as amended by the First  Amendment to
Amended and Restated Credit  Agreement  entered into as of the 18th day of May,
1999 (the  "Credit  Agreement"),  by and among Ski  Holdings,  Booth  Creek Ski
Acquisition Corp., a Delaware  corporation,  Trimont Land Company, a California
corporation,  Sierra-at-Tahoe,  Inc., a Delaware  corporation,  Bear  Mountain,
Inc., a Delaware  corporation,  Waterville Valley Ski Resort,  Inc., a Delaware
corporation,  Mount  Cranmore  Ski Resort,  Inc., a Delaware  corporation,  Ski
Lifts, Inc., a Washington corporation, Targhee Corp, LMRC Holdings Corporation,
a Delaware corporation,  Loon Mountain Recreation Corporation,  a New Hampshire
corporation,   Loon  Realty  Corporation,   a  New  Hampshire  corporation  and
BankBoston,  as agent for  itself and the other  lenders  named  therein.  Such
releases shall be delivered in form and substance reasonably satisfactory to GT
Acquisition on or prior to the Closing Date.

     6.13   Opinion.   Ski  Holdings   shall  have  received  a  customary  and
satisfactory  fairness  opinion  dated on or before the  Closing  Date from Sno
Engineering,  Inc.,  pursuant to that certain  Indenture  dated as of March 18,
1997, as amended (the  "Indenture"),  among Ski Holdings,  the Guarantors named
therein and Marine Midland Bank, as Trustee thereunder.

     6.14 Transfer of Premises and Liquor  Licenses.  Immediately  prior to the
consummation  of the  Targhee  Corp  Mergers,  each  of  Targhee  Corp  and its
Subsidiaries  shall have (a) entered into a lease or a sublease of the premises
which  it  occupies  with a  separate  subsidiary  of GT  Acquisition  and  (b)
<PAGE>

transferred its liquor license for such premises to such subsidiary.  Each such
lease or  sublease  shall be for a term  ending on January 7, 2001 at a monthly
rent and upon other terms and conditions acceptable to GT Acquisition.

     6.15 Targhee Corp Mergers.  Immediately prior to the Closing,  the Targhee
Corp  Mergers  shall  have  been  consummated  in  accordance  with the laws of
Delaware and Wyoming, as applicable, and the requirements of the certificate or
articles  of  incorporation  of  each of Ski  Holdings,  Targhee  Corp  and its
Subsidiaries.

     6.16 Consents. Prior to the Closing Date, Ski Holdings shall have obtained
all consents  specified  on Schedule  4.03 and such  consents  shall be in full
force and effect.

                                  ARTICLE VII

                Conditions to Closing Applicable to Ski Holdings

     The obligations of Ski Holdings hereunder (including the obligation of Ski
Holdings  to close the  transactions  herein  contemplated)  are subject to the
following conditions precedent:

     7.01  Termination.  Neither Ski  Holdings  nor GT  Acquisition  shall have
terminated this Agreement pursuant to Section 8.01 hereof.

     7.02 Bring Down. All representations and warranties made by GT Acquisition
herein to Ski Holdings  shall be true and correct in all  material  respects on
and as of the Closing Date with the same effect as if such  representations and
warranties  had been made on and as of the  Closing  Date,  and GT  Acquisition
shall have performed and complied with all agreements, covenants and conditions
on its part required to be performed or complied in all material  respects with
on or prior to the  Closing  Date.  At the  Closing,  Ski  Holdings  shall have
received a certificate executed by GT Acquisition to the foregoing effect.

     7.03 Pending Matters. No investigation,  action, suit or proceeding by any
governmental  or  regulatory  commission,  agency,  body or  authority,  and no
<PAGE>

action,  suit or proceeding by any other Person shall be pending on the Closing
Date which  challenges or might result in a challenge to this  Agreement or any
transaction contemplated hereby, or which claims, or might give rise to a claim
for,  damages  in a  material  amount  as a result of the  consummation  of the
transactions contemplated hereby.

     7.04 Closing  Proceedings.  All proceedings to be taken in connection with
the  consummation of the transactions  contemplated by this Agreement,  and all
documents  incident  thereto,  shall  be  reasonably  satisfactory  in form and
substance to Ski  Holdings  and its  counsel,  and Ski Holdings and its counsel
shall  have  received  copies  of  such  documents  as it and its  counsel  may
reasonably request in connection with said transactions.

     7.05  Transition  Services.  GT  Acquisition  shall  have  entered  into a
Transition  Services  Agreement  substantially  in a form of Exhibit B attached
hereto  pursuant to which Ski Holdings  shall provide to GT  Acquisition  those
services  set forth on the  Schedules  to Exhibit B hereto for the time periods
and for the fees  corresponding  to such services as set forth on the Schedules
to Exhibit B hereto.

     7.06  Governmental  Approvals;   U.S.  Forest  Service.  All  governmental
agencies,  departments,  bureaus,  commissions and similar bodies, the consent,
authorization or approval of which is necessary under any applicable law, rule,
order or regulation  for the  consummation  by Targhee Corp and Ski Holdings of
the transactions  contemplated  hereunder and the operation of the Resort by GT
Acquisition  after  consummation  of  the  transactions  hereunder  shall  have
consented  to,  authorized,  permitted  or  approved  the  consummation  of the
transactions hereunder,  including without limitation,  the U.S. Forest Service
and those governmental  bodies having  jurisdiction with respect to the various
liquor  licenses and other such licenses and permits issued in connection  with
the operation of the Resort.  Without  limiting the  foregoing,  GT Acquisition
<PAGE>

shall have at the Closing all rights,  title and  interest as  purchaser  under
those certain option and purchase agreements,  and as non-federal  proponent in
that certain Agreement to Initiate, which are collectively listed in Exhibit A.
In addition, without limiting the foregoing, the U.S. Forest Service shall have
consented  to,  authorized,  permitted  or  approved  the  substitution  of  GT
Acquisition as the non-federal proponent under the Agreement to Initiate listed
in Exhibit A.

     7.07 Liens. Ski Holdings shall have obtained releases for all liens on the
Purchased  Assets  arising under the Credit  Agreement.  Such releases shall be
delivered in form and substance  reasonably  satisfactory to Ski Holdings prior
to the Closing Date.

     7.08 Release of Guarantees.  Ski Holdings shall have obtained the releases
listed on Schedule  7.08 for all executed  guarantees  provided by Ski Holdings
for obligations of Targhee Corp in its operation of the Resort.

     7.09 Opinion and Release. Ski Holdings shall have received a customary and
satisfactory  fairness  opinion  dated on or before the  Closing  Date from Sno
Engineering,  Inc., pursuant to the Indenture, and Targhee Corp and each of its
Subsidiaries shall have been released as Guarantors under the Indenture.

     7.10 Consents. Prior to the Closing Date, Ski Holdings shall have obtained
all consents  specified  on Schedule  4.03 and such  consents  shall be in full
force and effect.

                                  ARTICLE VIII

                                  Termination

     8.01  Termination  Events.  This  Agreement  may be terminated at any time
prior to the Closing as follows, and in no other manner:

     (a) by mutual written consent of Ski Holdings and GT Acquisition;
<PAGE>

     (b) by GT Acquisition, upon written notice to Ski Holdings, if the Closing
Date has not  occurred  on or before 60 days from the date  hereof  (which date
shall be  extended  by Ski  Holdings  to the extent  necessary  to satisfy  the
conditions  precedent set forth in Sections 6.05,  6.12 and 6.13 hereof but Ski
Holdings  shall not be required to extend  such date  beyond an  additional  30
days), or such later date as the parties may agree in writing, provided that GT
Acquisition is not in breach or default under this Agreement; and

     (c) by Ski Holdings, upon written notice to GT Acquisition, if the Closing
Date has not  occurred  on or before 60 days from the date  hereof  (which date
shall be automatically extended if so extended under clause (b) of this Section
8.01),  or such later date as the parties may agree in writing,  provided  that
Ski Holdings is not in breach or default under this Agreement.

     Any termination  pursuant to this Article VIII shall not limit or restrict
the rights or other remedies of any party hereto.

                                  ARTICLE IX

                     Certain Agreements and Understandings

     9.01 Purchase  Price  Allocation.  Ski Holdings and GT  Acquisition  shall
allocate the  Purchase  Price among the  Purchased  Assets in  accordance  with
Schedule  9.01  attached  hereto and this  Section  9.01.  Ski  Holdings and GT
Acquisition shall use their reasonable  efforts to reach agreement prior to the
Closing Date as to the  allocation  of the Purchase  Price among the  Purchased
Assets.  Ski Holdings and GT Acquisition agree that if they have not reached an
agreement  as to such  allocation  by the date  which is ninety  days after the
Closing  Date,  the  allocation  shall  be  made  as  determined  by a firm  of
<PAGE>

independent accountants of national standing selected by the parties or, if the
parties  are  unable to agree  upon the  selection  of such a firm  within  one
hundred  days after the Closing  Date,  selected by the New York City office of
the  American  Arbitration  Association  at the  request  of either  party (the
"Allocation  Accounting Firm"), who shall have appraisal capabilities and, as a
condition to retention, shall commit to make a determination within thirty days
after  selection.  Ski Holdings and GT Acquisition  shall use their  reasonable
efforts  to  cooperate  with the  Allocation  Accounting  Firm and to cause the
Allocation  Accounting Firm to make its determination  within thirty days after
selection.  The  resolution of the dispute by the  Allocation  Accounting  Firm
shall be final, binding and conclusive on the parties. The fees and expenses of
the Allocation  Accounting  Firm shall be borne one-half by GT Acquisition  and
one-half by Ski Holdings. Each party shall promptly notify the other of any tax
proceeding, audit or investigation relating to the allocation described in this
Section 9.01 and shall keep the other advised of the progress thereof.

     9.02 Access to Information.

     (a) Upon  reasonable  notice from GT  Acquisition  to Targhee Corp and Ski
Holdings,  Targhee  Corp will cause to be  afforded to GT  Acquisition  and its
financing providers, and their respective officers, employees,  representatives
and  advisors   access  during  normal   business   hours  to  the   employees,
representatives, advisors, facilities and books and records of Targhee Corp and
its  Subsidiaries  so as to afford GT Acquisition  and its financing  providers
full  opportunity to make such review,  examination  and  investigation  of the
Resort as they each may reasonably  deem  necessary to make in connection  with
the transactions contemplated hereby.

     (b) For a  period  ending  seven  (7)  years  following  the  Closing,  GT
Acquisition  will (except as provided  below)  retain all  business  records of
Targhee Corp and its Subsidiaries for periods prior to the Closing. During such
period and on two (2) business days prior notice,  GT  Acquisition  will afford
<PAGE>

duly authorized  representatives of Ski Holdings reasonable access,  subject to
reasonable  restrictions as GT Acquisition may require, during regular business
hours,  to all of such  records and will permit  such  representatives,  at Ski
Holdings'  expense,  to make  abstracts  from,  or to make  copies  of any such
records, or to obtain temporary possession (as long as such possession,  in the
reasonable judgment of GT Acquisition,  does not interfere with the business of
GT  Acquisition)  of any thereof as may reasonably be required by Ski Holdings.
Should GT Acquisition wish to dispose of any such records,  GT Acquisition will
advise Ski  Holdings of its wishes in writing and, if Ski Holdings so requests,
GT  Acquisition  will promptly  deliver,  at the expense of Ski  Holdings,  the
records in question to Ski Holdings.  If Ski Holdings does not request delivery
of such  records  within  thirty  (30)  days  of GT  Acquisition's  notice,  GT
Acquisition may thereafter dispose of such records.

     9.03  Exclusivity.  Targhee Corp and Ski Holdings agree that from the date
hereof and until the  Closing  Date or such time as this  Agreement  shall have
been terminated in accordance with the provisions of Section 8.01 hereof,  none
of  Targhee  Corp,  Ski  Holdings  or any of  Targhee  Corp's or Ski  Holdings'
officers,   directors,   shareholders,   affiliates  or  other  representatives
(collectively  the  "Affiliated  Parties")  will  invite,  solicit or encourage
proposals  or offers or  entertain,  accept,  negotiate,  discuss or  otherwise
participate in a possible  merger,  combination,  sale or other  disposition of
Targhee Corp or the Resort,  or any capital stock  associated with Targhee Corp
or the Resort or any  interest  therein (a "Targhee  Corp Sale") with any other
party. Targhee Corp and Ski Holdings each represents that neither it nor any of
its  stockholders  is a party to or bound by any  agreement  with  respect to a
Targhee  Corp Sale other than this  Agreement.  Ski  Holdings  shall  cause the
Affiliated  Parties to  immediately  cease and  terminate any existing or prior
existing  activities,  discussions or negotiations with any persons or entities
conducted  heretofore with respect to any Targhee Corp Sale, and shall promptly
<PAGE>

request  each  such  person  or  entity  who  has  heretofore  entered  into  a
confidentiality  agreement  in  connection  with a  Targhee  Corp  Sale  or has
otherwise  received  information in connection  with a Targhee Corp Sale to (a)
return to Ski Holdings all  confidential  information  heretofore  furnished to
such  person or entity by or on behalf of  Targhee  Corp or the  Resort and (b)
destroy  (and  certify  to Ski  Holdings  as to  the  destruction)  all  notes,
analyses, compilations, reports, forecasts, studies, memoranda, computer stored
data or other  documents  which  contain,  or are  based in whole or in part or
otherwise  reflect,  confidential  information  received in  connection  with a
Targhee  Corp Sale.  It is intended  by the parties  hereto that so long as the
terms of this Agreement are in effect,  GT Acquisition shall have the exclusive
right to  purchase  Targhee  Corp  and the  Resort  on the  general  terms  and
conditions herein contained.

     9.04 Indemnification.

     (a) GT Acquisition hereby indemnifies and holds harmless Ski Holdings from
and  against all  claims,  damages,  losses,  liabilities,  costs and  expenses
(including,  without limitation,  settlement costs and any legal, accounting or
other  expenses for defending any actions or threatened  actions) in connection
with any  misrepresentation or breach of any representation or warranty made by
GT Acquisition  in this  Agreement or any breach of any covenant,  agreement or
obligation  of GT  Acquisition  contained in this  Agreement  or any  agreement
executed or delivered pursuant hereto; provided, however, that GT Acquisition's
maximum aggregate  liability  pursuant to this Section 9.04(a) shall not exceed
the amount of $1,000,000,  except with respect to GT Acquisition's  obligations
under the Assumption Agreement as to which such limit shall not apply.

     In no event shall Ski Holdings be entitled to indemnification  pursuant to
this Section 9.04(a) unless and until the aggregate  liability  suffered by Ski
<PAGE>

Holdings collectively exceeds $150,000 whereupon Ski Holdings shall be entitled
to  indemnification  hereunder from GT  Acquisition  for liability in excess of
such threshold amount to the extent permitted herein.

     (b) Ski Holdings hereby indemnifies and holds harmless GT Acquisition from
and  against all  claims,  damages,  losses,  liabilities,  costs and  expenses
(including,  without limitation,  settlement costs and any legal, accounting or
other  expenses for defending any actions or threatened  actions) in connection
with any  misrepresentation or breach of any representation or warranty made by
either  Targhee  Corp or Ski  Holdings in this  Agreement  or any breach of any
covenant,  agreement  or  obligation  of either  Targhee  Corp or Ski  Holdings
contained in this  Agreement;  provided,  however,  that Ski Holdings'  maximum
aggregate  liability  pursuant  to this  Section  9.04(b)  shall not exceed the
amount  of  $1,000,000,  except  with  respect  to any  Tax-related  obligation
provided for in Section 9.04(c).

     Except with respect to any Tax-related  obligation provided for in Section
9.04(c),  GT Acquisition shall not be entitled to  indemnification  pursuant to
this Section  9.04(b) unless and until the aggregate  liability  suffered by GT
Acquisition  collectively  exceeds $150,000  whereupon GT Acquisition  shall be
entitled to indemnification hereunder from Ski Holdings for liability in excess
of such threshold amount to the extent permitted herein.

     (c) Ski Holdings hereby indemnifies and holds harmless GT Acquisition (and
after the Closing,  Targhee Corp) from and against all claims, damages, losses,
costs and expenses  (including,  without  limitation,  settlement costs and any
legal,  accounting or other expenses  incurred in connection with any audits or
defending  any actions or threatened  actions) in connection  with all Taxes of
Targhee Corp and its Subsidiaries (a "Tax-related  obligation") for all periods
(or portions  thereof) ending on or before the Closing Date (whether or not any
such  Tax-related  obligation  constitutes  a breach of any  representation  or
<PAGE>

warranty  contained  in  Section  4.09),  except  for the  Assumed  Tax-related
obligations.  GT Acquisition hereby indemnifies and holds harmless Ski Holdings
from and against all claims,  damages,  losses,  costs and expenses (including,
without  limitation,  settlement  costs  and any  legal,  accounting  or  other
expenses  incurred in  connection  with any audits or defending  any actions or
threatened  actions)  for (i) all  Tax-related  obligations  arising out of the
ownership or use of the Purchased Assets for all periods (or portions  thereof)
ending after the Closing Date and (ii) the Assumed Tax-related obligations.

     (d) The  indemnities  contained  in this  Section  9.04 with respect to GT
Acquisition and Ski Holdings shall survive the consummation of the transactions
hereunder to and including  December 31, 2000,  except that (i) the indemnities
for Tax-related obligations contained in Section 9.04(c) or representations and
warranties  contained in Section 4.09 hereof shall survive the Closing Date and
terminate upon the  expiration of the  applicable  Tax statute of  limitations,
plus 30 days and (ii) the  indemnities  for Assumed  Liabilities  contained  in
Section  9.04(a)  hereof shall survive the Closing Date and terminate  upon the
expiration of the applicable statute of limitations.

     9.05.Rehiring  of Employees.  On the Closing Date,  GT  Acquisition  shall
offer  employment to  substantially  all of the employees  then employed by the
Resort,  upon  terms  and  conditions  substantially  similar  to the terms and
conditions  upon which such  employees  are then  employed by the  Resort.  The
foregoing,   however,   shall  not  preclude  GT  Acquisition  from  thereafter
terminating any such employee in accordance  with its employment  practices and
policies.
<PAGE>

                                   ARTICLE X

                                 Miscellaneous

     10.01 Expenses.

     (a)  Whether or not this Agreement is consummated,  Ski Holdings shall pay
the costs and  expenses  (including  attorneys'  fees and other legal costs and
expenses and accounting fees and other accounting costs and expenses)  incurred
by Targhee  Corp and Ski Holdings in  connection  with this  Agreement  and the
transactions contemplated hereby.

     (b) Whether or not this Agreement is consummated, GT Acquisition shall pay
all of the costs and expenses (including  attorneys' fees and other legal costs
and expenses and  accountants'  fees and other  accounting  costs and expenses)
incurred  by  it  in  connection  with  this  Agreement  and  the  transactions
contemplated hereby.

     10.02 Survival. The representations,  warranties, agreements and covenants
made by the  respective  parties  hereto in this  Agreement  shall  survive the
Closing Date to the extent provided herein.

     10.03 Entire Agreement.  This Agreement  (including the attached Schedules
and Exhibits)  contains the entire  agreement  between the parties  hereto with
respect  to  the  transactions   contemplated  hereunder,  and  supersedes  all
negotiations,  representations,  warranties, commitments, offers, contracts and
writings prior to the date hereof.  No waiver and no  modification or amendment
of any provisions of this Agreement shall be effective unless specifically made
in writing and duly signed by the party to be bound thereby.

     10.04  Counterparts.  This  Agreement  may be  executed  in  one  or  more
counterparts,  each of which  shall be  deemed  an  original  but all of which,
together, shall constitute one and the same instrument.
<PAGE>

     10.05  Assignment.  Pending  the  Closing,  Ski  Holdings  agrees  not  to
transfer,  sell, assign or convey any of the stock of Targhee Corp owned by Ski
Holdings  and shall cause  Targhee Corp and its  Subsidiaries  not to transfer,
sell,  assign or convey any of the  Purchased  Assets,  except in the  ordinary
course of the Resort Business or as contemplated  hereunder. GT Acquisition may
assign  its  right to  receive  the  Purchased  Assets  to an  affiliate  of GT
Acquisition or any lender  providing  financing to GT Acquisition in connection
with the transactions  contemplated hereby.  Subject to the foregoing sentence,
this  Agreement  shall inure to the benefit of and be binding  upon the parties
hereto and their respective successors and assigns. This Agreement shall not be
construed so as to confer any rights or benefits upon any Person other than the
parties hereto and their respective successors and assigns.

     10.06 Headings.  The captions of the various Sections and Articles of this
Agreement  have been inserted only for  convenience  and shall not be deemed to
modify, explain, enlarge or restrict any of the provisions of this Agreement.

     10.07  Governing  Law.  The  validity,  interpretation  and effect of this
Agreement shall be governed by the laws of the State of New York, excluding the
"conflicts of laws" rules thereof.

     10.08 Notices. (a) All notices, requests, demands and other communications
under  this  Agreement  shall be in writing  and  delivered  in  person,  or by
overnight  courier,  or by telecopy (with receipt  confirmed),  or by facsimile
transmission  (with  written  confirmation)  or sent by registered or certified
mail,  return receipt  requested,  postage prepaid,  and properly  addressed as
follows:
<PAGE>

      To GT Acquisition:       GT Acquisition I, LLC
                               c/o Booth Creek Management Corp.
                               1000 South Frontage Road West, Suite 100
                               Vail, Colorado 81657
                               Attn:  George N. Gillett, Jr.
                               Fax:  (970) 479-0291
                               Tel:   (970) 476-4030

      With A Copy To:          Winston & Strawn
                               200 Park Avenue
                               New York, New York 10166-4193
                               Attn:Richard B. Teiman
                               Fax:  (212) 294-4700
                               Tel:   (212) 294-6730

      To Ski Holdings
      or Targhee Corp:         Booth Creek Ski Holdings, Inc.
                               1000 South Frontage Road West, Suite 100
                               Vail, Colorado  81657
                               Attn:  Elizabeth J. Cole
                               Fax:  (970) 479-0291
                               Tel:   (970) 476-4030

      With A Copy To:          Loeb & Loeb, LLP
                               345 Park Avenue
                               New York, New York  10154-0037
                               Attn:  Michael D. Beck, P.C.
                               Fax:  (212) 407-4000
                               Tel:   (212) 407-4990

     (b) Any party may from time to time  change its address for the purpose of
notices to that party by a similar notice specifying a new address, but no such
change shall be deemed to have been given until it is actually  received by the
party sought to be charged with its contents.

     (c) All notices and other communications  required or permitted under this
Agreement  which are  addressed as provided in this Section  10.08 if delivered
personally,   or  by  telecopy  (with  receipt  confirmed),   or  by  facsimile
transmission  (with written  confirmation)  or by overnight  courier,  shall be
effective  upon  delivery;  and if delivered by mail,  shall be effective  upon
receipt.
<PAGE>

     10.09 U.S.  Dollars.  All  amounts  expressed  in this  Agreement  and all
payments required by this Agreement are in United States dollars.

     10.10 Savings  Clause.  If any  provision of this  Agreement is held to be
illegal,  invalid or  unenforceable  under any present or future  law,  rule or
regulation, such provision shall be fully severable and this Agreement shall be
construed and enforced as if such illegal,  invalid or unenforceable  provision
had never comprised a part hereof.  The remaining  provisions of this Agreement
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance therefrom.  Furthermore,
in lieu of such illegal,  invalid or  unenforceable  provision,  there shall be
added automatically as a part of this Agreement, a legal, valid and enforceable
provision  as  similar  in  terms to such  illegal,  invalid  or  unenforceable
provision as may be possible.

     10.11  Interpretation.  Unless  the  context of this  Agreement  otherwise
requires, (a) words of any gender shall be deemed to include each other gender,
(b) words using the singular or plural  number shall also include the plural or
singular  number,  respectively,  and (c)  references  to  "hereof",  "herein",
"hereby" and similar terms shall refer to this entire Agreement.
<PAGE>

     IN WITNESS  WHEREOF,  the  parties  hereto have duly  executed  this Asset
Purchase Agreement on the day and year first above written.

                                        BOOTH CREEK SKI HOLDINGS, INC.

                                        By: /s/ Elizabeth J. Cole
                                           ------------------------------------

                                        Title: Exec. Vice President / CFO
                                              ---------------------------------

                                        GT ACQUISITION I, LLC

                                        By: /s/ Jeffery J. Joyce
                                           ------------------------------------

                                        Title: Executive Vice President
                                              ---------------------------------

<PAGE>

                                Schedule 1.02-1

Treatment of Cash Flow Activity Prior to and Through the Effective Date

Ski Holdings and Targhee  Corp.  shall treat and process  cash  receipts,  cash
disbursements  and  other  cash  activity  through  the  Effective  Date in the
following manner:

1.   As  a  condition   precedent  to  the  Closing,   Targhee  Corp.  and  its
     Subsidiaries must have paid their accounts payable (other than those which
     are,  individually,  less than  $1,000 and,  in the  aggregate,  less than
     $10,000) in accordance with the original terms of each such account and in
     the ordinary course of business,  and no such accounts  payable of Targhee
     Corp. and its Subsidiaries may be past due.

2.   Any daily cash deposits made to Targhee  Corp.'s Cash  Depository  Account
     (KeyBank  Account No.  70745521) for business on or prior to the Effective
     Date shall be for the benefit of Ski  Holdings,  and Ski Holdings  may, at
     its sole  discretion,  transfer  such  deposits to its  consolidated  cash
     management accounts with BankBoston.

3.   Ski  Holdings  will  make  available  sufficient  funds to  honor  payroll
     disbursements  made to Targhee Corp.  employees  for  regularly  scheduled
     payrolls  paid from the Local  Payroll Bank Account  (KeyBank  Account No.
     70753871)  which require  funding on or prior to the Effective  Date.  Any
     funds in Account No.  70753871  in excess of the amount  required to honor
     payroll checks issued on or prior to the Effective Date may be transferred
     by Ski  Holdings,  at  its  sole  discretion,  to  its  consolidated  cash
     management accounts at BankBoston.

4.   Ski Holdings will honor and fund any accounts payable  disbursement checks
     issued by Targhee Corp. from the Disbursement  Account (BankBoston Account
     No. 80058180) on or prior to the Effective Date.

5.   Any credit  card  deposits  made to the Credit  Card  Account  (BankBoston
     Account No. 26844196) for business on or prior to the Effective Date shall
     be for the benefit of Ski Holdings, and will be automatically swept to Ski
     Holdings' consolidated cash management accounts with BankBoston.

6.   Any daily cash deposits  made to the Targhee  Express  Depository  Account
     (Bank of Jackson Hole Account No.  222646) for business on or prior to the
     Effective Date shall be for the benefit of Ski Holdings,  and Ski Holdings
     may, at its sole discretion, transfer such deposits to its cash management
     accounts with BankBoston.

7.   Ski Holdings  will honor payroll ACH  disbursements  made to Targhee Corp.
     employees for regularly  scheduled  payrolls  which require  funding on or
     prior to the Effective  Date. Such  disbursements  will  automatically  be
     posted and clear against the Payroll ACH Account  (BankBoston  Account No.
     80064441)  which  is part of Ski  Holdings  consolidated  cash  management
     system with BankBoston.
<PAGE>

8.   Ski Holdings  will fund payroll tax deposits  through  System Tax Services
     ("STS") for regularly  scheduled  payrolls which require  funding prior to
     the Effective Date.

9.   Ski   Holdings   will  fund  CBA  Health  and  Welfare   Claims  and  Flex
     Contributions which require funding prior to the Effective Date.

Treatment of Cash Activity  During the Interim  Period after the Effective Date
and to the close of business on the day before the Closing Date

1.   Daily  cash  deposits  made to Targhee  Corp.'s  Cash  Depository  Account
     (KeyBank  Account No.  70745521)  for business  during the Interim  Period
     shall be for the  benefit  of GT Corp.  and shall be treated as a positive
     amount in the determination of Net Cash Receipts for the Interim Period.

2.   Any checks  issued to Targhee  Corp.  employees for payrolls paid from the
     Local Payroll Bank Account  (KeyBank  Account No.  70753871) which require
     funding  during the Interim Period shall be the obligation of GT Corp. and
     shall be  treated as a negative  amount in the  determination  of Net Cash
     Receipts for the Interim Period.

3.   Any  checks  issued  by  Targhee  Corp.  from  the  Disbursement   Account
     (BankBoston  Account No.  80058180) during the Interim Period shall be the
     obligation  of GT Corp.  and shall be treated as a negative  amount in the
     determination of Net Cash Receipts for the Interim Period.

4.   Credit card deposits made to the Credit Card Account  (BankBoston  Account
     No.  26844196)  for  business  during the Interim  Period shall be for the
     benefit  of GT Corp.  and shall be  treated  as a  positive  amount in the
     determination of Net Cash Receipts for the Interim Period.

5.   Daily cash deposits made to the Targhee Express  Depository  Account (Bank
     of Jackson Hole Account No. 222646) for business during the Interim Period
     shall be for the  benefit  of GT Corp.  and shall be treated as a positive
     amount in the determination of Net Cash Receipts for the Interim Period.

6.   Payroll  ACH  disbursements  issued to Targhee  Corp.  employees  from the
     Payroll ACH Account  (BankBoston  Accounting  No.  80064441) for regularly
     scheduled  payrolls which require  funding during the Interim Period shall
     be the obligation of GT Corp. and shall be treated as a negative amount in
     the determination of Net Cash Receipts for the Interim Period.

7.   Payroll tax deposits  made through STS for  regularly  scheduled  payrolls
     which require funding during the Interim Period shall be the obligation of
     GT Corp. and shall be treated as a negative amount in the determination of
     Net Cash Receipts for the Interim Period.
<PAGE>

8.   CBA Health and Welfare Claims and Flex Contributions which require funding
     during the Interim Period shall be the obligation of GT Corp. and shall be
     treated as a negative amount in the determination of Net Cash Receipts for
     the Interim Period.

9.   As provided in the definition of "Net Cash Receipts", those charges listed
     on Schedule  1.02-2  attached  hereto (to the extent not actually  paid by
     Targhee  Corp.  during the Interim  Period) shall be treated as a negative
     amount in the determination of Net Cash Receipts for the Interim Period.

10.  As provided in the definition of "Net Cash Receipts",  any costs, expenses
     and other  charges of Ski Holdings  which are  allocable to Targhee  Corp.
     and/or its  Subsidiaries  directly  related to the land  exchange  process
     between Targhee Corp. and the U.S. Forest Service that, in accordance with
     the original terms thereof, are not delinquent as of the Effective Date or
     are incurred  thereafter (to the extent not actually paid by Targhee Corp.
     during the Interim  Period) shall be the  obligation of GT Corp. and shall
     be treated as a negative amount in the  determination of Net Cash Receipts
     for the Interim Period.

11.  As provided in the  definition of "Net Cash  Receipts",  any charges which
     would have been  allocable to Targhee Corp.  had the  Transition  Services
     Agreement been in effect during the Interim Period shall be the obligation
     of GT Corp. and shall be treated as a negative amount in the determination
     of Net Cash Receipts for the Interim Period.

Treatment of Cash Accounts on and After the Closing Date

1.   As the  activity  in the Cash  Depository  Account  (KeyBank  Account  No.
     70745521),  Local Payroll Bank Account (KeyBank Account No. 709753871) and
     Targhee  Express  Depository  Account  (Bank of Jackson  Hole  Account No.
     222646) is not directly tied to Ski Holdings' consolidated cash management
     system,  GT  Acquisition  may continue to utilize these  accounts for cash
     activity originating on or after the Closing Date.

2.   For accounts payable disbursements,  GT Acquisition  representatives shall
     commence the necessary  actions  following the Effective Date to establish
     their own disbursement  checking account for use for activity  originating
     on or after the  Closing  Date.  GT  Acquisition  may not  originate  cash
     disbursements  from  the  Disbursement  Account  (BankBoston  Account  No.
     80058180) on or after the Closing Date.

3.   Credit card deposit  activity  will require some  coordination  amongst GT
     Acquisition,  MCMS and GT Acquisition's intended depository institution to
     properly  transition.  GT Acquisition  representatives  shall commence the
     necessary  actions  following  the  Effective  Date  to have  credit  card
     deposits  following the Closing Date  processed  through a new account for
     the benefit of GT Acquisition.  In the event that any credit card deposits
     for business on or after the Closing Date  continue to be deposited to the
     Credit Card Depository  Account  (BankBoston  Account No.  26844196),  Ski
     Holdings shall remit such amounts to GT Acquisition in a timely manner.
<PAGE>

4.   Payroll ACH  disbursements  will not be permitted to be processed  through
     the Payroll ACH Account  (BankBoston  Account No.  80064441)  for payrolls
     which require  funding on or after the Closing Date. GT Acquisition  shall
     either convert  existing  payroll ACH  dibursements  to live checks (which
     clear  against the KeyBank  Local  Payroll Bank Account) or change all ACH
     payments to clear against the KeyBank Local Payroll Bank Account.

5.   Payroll tax  deposits  for  regularly  scheduled  payrolls  which  require
     funding on or after the Closing  Date shall be modified to be funded by GT
     Acquisition.

6.   CBA Health and Welfare Claims and Flex Contributions which require funding
     on or after the Closing Date shall be funded by GT Acquisition.
<PAGE>

                                                                Schedule 1.02-2

Booth Creek Ski Holdings, Inc.
Outstanding Accounts Payable on Grand Targhee's Behalf
As of February 21, 2000

<TABLE>
<S>             <C>      <C>      <C>              <C>         <C>           <C>                     <C>
                                                    Original    Invoice                            Responsible
                Invoice  Invoice  Invoice           Invoice     Amount                              Party for
 Vendor Name     Date    Number   Due Date           Amount   Outstanding       Description          Payment
-------------  --------  -------  --------         ---------  -----------  ----------------------  -----------
                                        1998/1999 Rental Buy
                                        --------------------

Skis Dynastar  10/05/98  635096   03/1/00          $3,922.38   $1,961.19   98/99 rental equipment      Buyer
Skis Dynastar  10/28/98  638971   03/1/00           4,424.12    2,212.06   98/99 rental equipment      Buyer
Skis Dynastar  10/28/98  638972   03/1/00           3,870.05    1,935.03   98/99 rental equipment      Buyer
Skis Dynastar  11/19/98  644514   03/1/00           9,601.87    4,800.94   98/99 rental equipment      Buyer
Skis Dynastar  11/23/98  645059   03/1/00           1,060.71      530.36   98/99 rental equipment      Buyer
Skis Dynastar  11/24/98  645328   03/1/00           2,640.00    1,320.00   98/99 rental equipment      Buyer
Skis Dynastar  12/02/98  646506   03/1/00             125.30       62.65   98/99 rental equipment      Buyer
Skis Dynastar  12/23/98  651371   03/1/00               9.98        4.99   98/99 rental equipment      Buyer
                                                              ----------
Total Skis Dynastar Outstanding                               $12,827.21
                                                              ----------

K2 Corporation 08/07/98  157022    3/1/00          $6,195.00   $3,097.50   98/99 rental equipment      Buyer

                                        1999/2000 Rental Buy (1)
                                        ------------------------

Skis Dynastar  10/28/99  672594/  03/01/2000-01    $3,452.38   $3,452.38   99/00 rental equipment      Buyer
                         672595   03/01/2000-01
Skis Dynastar  10/28/99  672596/  03/01/2000-01     1,801.80    1,801.80   99/00 rental equipment      Buyer
                         672597   03/01/2000-01
Skis Dynastar  12/7/99   679637   03/01/2000-01     1,724.85    1,724.85   99/00 rental equipment      Buyer
Skis Dynastar  12/10/99  680437   03/01/2000-01     1,076.43    1,076.43   99/00 rental equipment      Buyer
Skis Dynastar  12/10/99  678854   03/01/2000-01     3,166.52    3,166.52   99/00 rental equipment      Buyer
Skis Dynastar  12/10/99  679385   03/01/2000-01       635.36      635.36   99/00 rental equipment      Buyer
Skis Dynastar  12/10/99  685639   03/01/2000-01       977.20      977.20   99/00 rental equipment      Buyer
Skis Dynastar  12/10/99  687976   03/01/2000-01       309.20      309.20   99/00 rental equipment      Buyer
                                                              ----------
Total Skis Dynastar Outstanding                               $13,143.74
                                                              ----------

Salomon        10/20/99  9567686  3/1/00            3,800.72   $3,800.72   99/00 rental equipment      Buyer

Smith          10/15/99  101599   3/1/00            3,400.00   $3,400.00   99/00 rental equipment      Buyer
                                                              ----------
Total Owed For Rental Buys As of February 21, 2000            $36,269.17
                                                              ----------

                                   Other Misc. Outstanding Accounts Payable
                                   ----------------------------------------

Marker           12/2/99 10006820  03/1/00          1,445.94   $  722.97     99/00 uniform items       Buyer
Marker           12/2/99 10006821  03/1/00          4,362.50    2,181.25     99/00 uniform items       Buyer
Marker           11/8/99 10004941  03/1/00          3,274.46    1,637.23     99/00 uniform items       Buyer
Marker          10/26/99 10003846  03/1/00          1,876.50      938.25     99/00 uniform items       Buyer
Marker          10/29/99 10004193  03/1/00          6,271.38    3,135.69     99/00 uniform items       Buyer
                                                              ----------
Total Marker Outstanding                                      $ 8,615.39
                                                              ----------
                                                              ----------
       Total Owed to Misc Vendors As of February 21, 2000     $ 8,615.39
                                                              ----------

      Total Outstanding Accounts Payable                      ----------
              on Behalf of Grand Targhee                      $44,884.56
      ----------------------------------                      ----------

Amount to Be Paid by Seller                                   $     -

Amount to Be Paid by Buyer                                    $44,884.56

(1) Note: The rental equipment amounts to Dynastar will be paid 50% on 3/1/2000
and the remaining 50% on 3/1/2001
</TABLE>
<PAGE>
                                Schedule 1.02-3

                     Legal Description of Real Properties

Graphic of Grand Targhee  Special Use Permit Map of  Approximately  2,400 acres
omitted.
<PAGE>

                                 Schedule 4.03

                                    CONSENTS

1. Bank  Boston N.A.  pursuant to that  certain  Amended  and  Restated  Credit
Agreement  dated as of October 30, 1998,  as amended by the First  Amendment to
Amended and Restated  Credit  Agreement  entered into as of May 18, 1999 by and
among Ski Holdings,  Booth Creek Ski Acquisition Corp., a Delaware corporation,
Trimont  Land  Company,  a  California  corporation,  Sierra-at-Tahoe,  Inc., a
Delaware corporation,  Bear Mountain, Inc., a Delaware corporation,  Waterville
Valley Ski Resort,  Inc., a Delaware  corporation,  Mount  Cranmore Ski Resort,
Inc.,  a Delaware  corporation,  Ski Lifts,  Inc.,  a  Washington  corporation,
Targhee Corp., LMRC Holdings Corporation, a Delaware corporation, Loon Mountain
Recreation  Corporation,  a New Hampshire corporation and BankBoston,  as agent
for itself and the other Lenders named therein.

2. United States  Department of  Agriculture-Forest  Service in connection with
the U.S.  Forest Service Term Special Use Permit issued by that agency on March
18, 1997.

3. United States  Department of  Agriculture-Forest  Service in connection with
the Agreement to Initiate the Forest  Service,  U.S.  Department of Agriculture
and Booth Creek, Inc., executed as of September 3 and 4, 1997.

4. Exclusive GPS Tracking  Agreement,  dated November ___, 1999, between Maptek
LLC and Booth Creek Ski  Holdings,  Inc.  regarding  guest  global  positioning
system mapping at the Grand Targhee resort.

5. Service Agreement, dated _____________, 1999 between Grand Targhee, Inc. and
Alltrans, Inc. regarding bus shuttle service.

6. Service  Agreement,  dated November 9, 1999 between Grand Targhee,  Inc. and
Southwest Unlimited LLC, dba Downhill Express regarding bus and van service.

7. Equipment Lease  Agreement  Number  83422-100 and Equipment  Schedule No. 1,
dated December 29, 1997,  between  Bombardier  Capital,  Inc. and Grand Targhee
Incorporated regarding lease of two 1996 Bombardier Plus MP Snowgroomers.

8. Price,  Parts and  Warranty  Agreement,  dated  November  __,  1999  between
Bombardier  Motor  Corporation of America Utility  Division and Booth Creek Ski
Holdings, Inc., as it relates to Grand Targhee.

9. Master Agreement, dated December 23, 1998, and Lease Schedule No. 1 thereto,
dated December 24, 1998, each between BancBoston Leasing Inc. and Grand Targhee
regarding lease of Bombardier Corporation equipment.

10. United States  Department of the Interior,  National Park Service,  Special
Use Permit  issued to Grand Targhee  Resort issued by that agency  November 24,
1999.
<PAGE>

11. Federal  Communications  Commission VHF  translator  Station  Licenses each
issued to Grand Targhee on July 29, 1999 by that agency:  (i)  K02KD-Channel  2
(License BRTTV-980807 AE); (ii) KO5GU-Channel 5 (License  BRTTV-980807AF);  and
(iii) K07QC-Channel 7 (License BRTTV-980807 AG).

12. Federal  Communications  Commission Radio Station  Licenses  issued:  (i)to
Grand  Targhee  Inc. on March 29, 1996 (Call Sign:  KRV764);  and (ii)to  Booth
Creek Ski  Holdings  Inc dba Grand  Targhee Ski & Summer  resort on May 8, 1998
(Call Sign: WPMA885).

13. Department of Environmental  Quality,  Water Quality Division,  water waste
treatment plant permit (Teton County Location,  Permit No. WY0024708) issued by
that agency to Booth Creek Holdings, Inc.

14. State of Wyoming, Teton County: (i) Resort Liquor License (No. 2148) issued
on January  7, 2000 to Grand  Targhee  Incorporated  in  connection  with Grand
Targhee  Resort (Grand  Targhee Bar):  (ii) Retail  Liquor  License (No.  2135)
issued on January 7, 2000 to Targhee Ski Corp. in connection with Grand Targhee
Resort;  (iii) County Retail Malt Beverage  Permit (No. 2151) issued on January
7, 2000 to BV Corporation in connection with the General Store; and (iv) County
Retail Malt  Beverage  Permit  issued on January 7, 2000 to Targhee  Company in
connection with the Igloo Bar.

15. Option and Purchase  Agreement,  dated  September 3, 1997,  between Krispen
Family Holdings,  L.C. and Booth Creek Ski Holdings, Inc. (as assignee of Booth
Creek,  Inc.) , as amended by the First  Amendment  to the Option and  Purchase
Agreement,  dated November 23, 1999, regarding Squirrel Meadows land, if at the
Closing, GT Acquisition is not an "affiliate" of Ski Holdings as defined in the
foregoing agreement.

16. State of Wyoming,  Department of Family  Services:  day care center license
issued to Grand Targhee Resort on December 11, 1998.

17.  State of  Wyoming,  Office of the State  Engineer,  permit to  appropriate
ground water,  issued to Big Valley  Corporation and assigned to Grand Targhee,
Inc.

18. Option and Purchase Agreement,  dated  ______________,  1999, between Booth
Creek Ski Holdings, Inc. and Ricks College regarding Squirrel Meadows land.

19. Equipment lease between Newcourt/Lucent/AT&T and Grand Targhee Incorporated
in connection  with Phone #1-10000 for the lease period  commencing  January 1,
2000.

20. Equipment lease between Newcourt/Lucent/AT&T and Grand Targhee Incorporated
in connection  with Phone#2 -M3002 for the lease period  commencing  January 1,
2000.

21.  Equipment  lease  between GE Capital  and Grand  Targhee  Incorporated  in
connection with a copier for the lease period commencing January 1, 1999.

22.  Equipment  lease  between  Toshiba  and  Grand  Targhee   Incorporated  in
connection  with a copier and fax  equipment  for the lease  period  commencing
January 1, 1999.
<PAGE>

23.  Equipment  lease  between  Toshiba  and  Grand  Targhee   Incorporated  in
connection with a copier for the lease period commencing March 1, 1999.

24.  Equipment  lease between  Pitney Bowes and Grand Targhee  Incorporated  in
connection  with certain  postage  equipment  for the lease  period  commencing
January 1, 1999.

25.  Equipment  lease between  Pitney Bowes and Grand Targhee  Incorporated  in
connection  with certain  postage  equipment  for the lease  period  commencing
January 1, 2000.

26.  Equipment  lease between Dell Financial and Grand Targhee  Incorporated in
connection  with computer  equipment for the lease period  commencing  March 1,
2000.
<PAGE>

                                Schedule 4.09(f)

                                     AUDITS

1. On February  7,2000,  Targhee Corp received notice from the Internal Revenue
Service  concerning an  appointment  scheduled for March 14, 2000 for a federal
income tax audit of Targhee Corp and its Subsidiaries for the period commencing
June 1, 1996 and ending March 18, 1997.

2. Targhee  Corp.  may have  received  double credit for a prior payment to the
USFS. No such liability has been asserted by the USFS.
<PAGE>

                                 Schedule 6.09

                                MATERIAL ASSETS

1.   Equipment subject to that certain UCC-1 financing  statement dated January
     28,  1999  (Filing No.  99028131A06)  executed  by Targhee  Corp.  for the
     benefit of BancBoston Leasing Inc.

2.   Equipment subject to that certain UCC-1 financing statement, filed January
     9, 1998 (Filing No. U-87798) in Teton County,  Wyoming executed by Targhee
     Corp. for benefit of Bombardier Capital, Inc.

3.   Equipment subject to that certain UCC-1 financing  statement,  executed in
     December 14, 1999 by Targhee Corp. for benefit of Bombardier Capital, Inc.

4.   Equipment subject to that certain UCC-1 financing statement, filed July 7,
     1995 by Targhee Corp. for benefit of AT&T Commercial Finance Corp.

5.   Equipment subject to that certain UCC-1 financing statement, filed January
     24, 1996 by Targhee Corp. for benefit of Citicorp Leasing, Inc.

6.   Equipment  subject  to  that  certain  UCC-1  financing  statement,  filed
     February 3, 1997 by Targhee Corp. for benefit of Garaventa CTEC, Inc.

7.   Items 19 through 26 listed on  Schedule  4.03 are  incorporated  herein by
     reference.
<PAGE>

                                 Schedule 7.08

                             RELEASE OF GUARANTEES

1. Guaranty of Master Lease  Agreement  dated December 29, 1997 between Targhee
Corp. and Bombardier  Capital,  Inc. and leasing  transaction  made pursuant to
Equipment  Schedule No. 1 dated December 29, 1997 and Equipment  Schedule No. 2
dated December, 1999.

2.  Obligations  related  to the  Parts,  Price and  Warranty  Agreement  dated
November 23, 1999 between Booth Creek Ski Holdings,  Inc. and Bombardier  Motor
Corporation of America.

3. Guaranty of Master  Agreement dated December 23, 1998 by and between Targhee
Corp and BancBoston  Leasing,  Inc. and that certain leasing  transaction dated
December 23, 1998 pursuant to Lease Schedule No. 1.
<PAGE>

                                 Schedule 9.01

                           PURCHASE PRICE ALLOCATION

     GT Corp shall allocate the Purchase Price among the assets and liabilities
of Targhee Corp. in the following manner:

1.   Any cash on hand or cash made available  pursuant to Section 6.07 shall be
     valued based on their recorded amounts.

2.   Receivables  shall be valued at present  values of amounts to be  received
     determined  at   appropriate   interest   rates,   less   allowances   for
     uncollectibility and collection costs, if necessary.

3.   Finished  goods  inventories  at estimated  selling prices less the sum of
     costs of  disposal  and a  reasonable  profit  allowance  for the  selling
     effort.  However,  in the event that recorded  balances of finished  goods
     inventories  as of the  Closing  Date,  net  of  applicable  reserves  for
     obsolete, damaged or slow-moving goods, approximate the amounts that would
     be determined pursuant to the preceding  sentence,  then existing recorded
     balances may be used.

4.   Supplies and similar  inventories at current replacement cost. However, in
     the event that recorded balances of supplies and similar inventories as of
     the Closing Date approximate the amounts that would be determined pursuant
     to the preceding sentence, then existing recorded balances may be used.

5.   Prepaid  expenses and other current  assets shall be valued based on their
     recorded  values as of the Closing Date,  unless the nature of such assets
     would otherwise indicate a more appropriate value.

6.   Property  and  equipment  to be  used  shall  be  valued  at  the  current
     replacement  costs on a going  concern  basis for  current use for similar
     capacity unless the expected future use of the asset(s)  indicates a lower
     value to the acquirer.

7.   Property and  equipment to be sold shall be valued at fair value less cost
     to sell.

8.   Costs  incurred in  connection  with the proposed  land swap with the U.S.
     Forest Service shall be valued at their recorded  values as of the Closing
     Date, which shall be deemed to approximate their estimated fair values.

9.   Option  contract  payments made in connection  with the proposed land swap
     with the U.S.  Forest Service shall be valued at their recorded  values as
     of the Closing Date, which shall be deemed to approximate  their estimated
     fair values.

10.  Intangible  assets,  if any, that can be identified  and named,  including
     contracts, patents, franchises, customer and supplier lists, and favorable
     leases, at their estimated fair values.
<PAGE>

11.  Accounts and notes  payable,  long-term  debt and other claims  payable at
     present  values of amounts to be paid  determined at  appropriate  current
     interest rates.

12.  Liabilities  and  accruals  at  present  values  of  amounts  to  be  paid
     determined at appropriate current interest rates.

13.  Other   liabilities  and  commitments,   including   unfavorable   leases,
     contracts,  and  commitments,  at  present  values of  amounts  to be paid
     determined at appropriate current interest rates.

14.  Any  excess  purchase  price  over the  estimated  fair  values  of assets
     acquired and liabilities assumed shall be recorded to goodwill.
<PAGE>

                                   Exhibit A

                OPTION AND PURCHASE AGREEMENTS; OTHER AGREEMENTS

1. Agreement to Initiate,  dated September 4, 1997, between U.S.  Department of
Agriculture  Forest  Service and Booth Creek,  Inc., as amended by the Squirrel
Meadows-Grand  Targhee Resort Land Exchange Amendment to Agreement to Initiate,
dated August 25, 1999.

2. Option and Purchase  Agreement,  dated  September 3, 1997,  between  Krispen
Family Holdings,  L.C. and Booth Creek Ski Holdings, Inc. (as assignee of Booth
Creek,  Inc.),  as amended by the First  Amendment  to the Option and  Purchase
Agreement, dated November 23, 1999, regarding Squirrel Meadows land.

3.  Option  and  Purchase  Agreement,  dated  May  ___,  1999,  among  Wildwood
Properties,  Kent M. Wright and Betty A. Wright,  Trustees, and Booth Creek Ski
Holdings, Inc. regarding certain real property regarding Squirrel Meadows land.

4.  Option and  Purchase  Agreement,  dated  _______,  1999,  between  Wildwood
Properties  and Booth  Creek Ski  Holdings,  Inc.  regarding  Squirrel  Meadows
mineral rights.

5. Letter to Victor S. Merrill,  general partner of Wildwood  Properties,  from
Booth Creek Ski Holdings, Inc., dated May 12, 1999, regarding ski passes.

6. Letter to Victor S. Merrill,  general partner of Wildwood  Properties,  from
Booth Creek Ski  Holdings,  Inc.,  dated May 12, 1999,  regarding  simultaneous
exercise of the land and mineral options.

7. Option and Purchase Agreement,  dated ______,  1999, between Booth Creek Ski
Holdings, Inc. and Ricks College regarding Squirrel Meadows land.

8. Development Contingent Payment Agreement,  dated March 18, 1997, among Booth
Creek Ski Holdings,  Inc., Grand Targhee Incorporated,  Moritz O. Bergmeyer and
Carol Mann Bergmeyer regarding a per-developed unit fee.

9. Exclusive GPS Tracking  Agreement,  dated October 22, 1999,  between Map Tek
LLC and Booth Creek Ski  Holdings,  Inc.  regarding  guest  global  positioning
system mapping.

10.  Service  Agreement,  dated ______,  1999 between Grand  Targhee,  Inc. and
Alltrans, Inc. regarding bus shuttle service.

11. Service Agreement,  dated November 9, 1999 between Grand Targhee,  Inc. and
Southwest Unlimited LLC, dba Downhill Express regarding bus and van service.

12. Equipment Lease Agreement  Number  83422-100 and Equipment  Schedule No. 1,
<PAGE>

dated December 29, 1997,  between  Bombardier  Capital,  Inc. and Grand Targhee
Incorporated regarding lease of two 1996 Bombardier Plus MP Snowgroomers.

13.  Price,  Parts and Warranty  Agreement,  dated  November  ___, 1999 between
Bombardier  Motor  Corporation of America Utility  Division and Booth Creek Ski
Holdings, Inc., as it relates to Grand Targhee.

14.  Master  Agreement,  dated  December  23,  1998,  and Lease  Schedule No. 1
thereto,  dated  December 24, 1998,  each between  Bancboston  Leasing Inc. and
Grand Targhee regarding lease of Bombardier Corporation equipment.
<PAGE>

                                   Exhibit B

                         TRANSITION SERVICES AGREEMENT

          This Transition Services Agreement (this "Agreement") is entered into
as of  ______________,  2000 by and between GT  Acquisition  I, LLC, a Delaware
limited liability company (the "Company"),  and Booth Creek Ski Holdings, Inc.,
a Delaware corporation ("Ski Holdings").

          A. The Company and Ski Holdings,  among  others,  are parties to that
certain Asset Purchase Agreement (the "Asset Purchase Agreement"),  dated as of
____________, 2000.

          B.  Pursuant  to  the  Asset  Purchase  Agreement,  the  Company  is,
concurrently  herewith,   purchasing  from  Ski  Holdings  all  of  the  assets
constituting the Grand Targhee Ski and Summer Resort.

          C. The Company and Ski Holdings now wish to arrange for the provision
of certain services by Ski Holdings to the Company, on the terms and conditions
set forth herein.

          NOW THEREFORE,  in consideration of the mutual promises and covenants
set forth herein, the parties agree as follows:

     1. Certain Definitions.

          "Closing"   shall   mean  the   consummation   of  the   transactions
contemplated  by the Asset  Purchase  Agreement,  including  the  execution and
delivery of this Agreement by each of the parties hereto.

          "Closing Date" shall mean the date upon which the Closing occurs.

          "Person" shall mean any entity,  corporation,  company,  association,
joint  venture,  joint  stock  company,   partnership,   trust,   organization,
individual  (including  personal  representatives,  executors  and  heirs  of a
deceased individual),  nation, state, government (including agencies, branches,
departments,  bureaus,  boards,  divisions  and  instrumentalities,   thereof),
trustee, receiver or liquidator.

          All Exhibits and Schedules to this Agreement, as existing on the date
of this Agreement or as thereafter supplemented,  modified or amended from time
to time, are incorporated into this Agreement by this reference as though fully
set forth herein.  All accounting terms not otherwise  defined herein or in any
other related  agreement  shall have the meanings  accorded to them under GAAP.
References herein to "Articles,"  "Sections,"  "Schedules" and "Exhibits" shall
be to  Articles,  Sections,  Schedules  and  Exhibits,  respectively,  of  this
Agreement unless otherwise  specifically  provided. Any of the terms defined in
Section 1 may, unless the context otherwise  requires,  be used in the singular
or the plural and in any gender depending on the reference.
<PAGE>

     2. Services;  Term.  Commencing on the Closing Date and continuing for the
term  specified  in Exhibit A with respect to each such  service,  Ski Holdings
shall provide the services (collectively, the "Transition Services") enumerated
in Exhibit "A" to the Company with respect to the Grand  Targhee Ski and Summer
Resort in Alta,  Wyoming (the "Grand Targhee resort"),  subject in all cases to
the terms and  conditions  specified in Exhibit A.  Additional  services may be
added to Exhibit "A" at any time by mutual  agreement  of the  parties  hereto.
Except for the Transition Services  specifically  delineated in this Agreement,
Ski Holdings will have no  responsibility  for providing any other  services to
the Company from and after the Closing Date.

     3.  Termination.  The Company may terminate this Agreement or Ski Holdings
provision of any  particular  Transition  Service  upon 30 days' prior  written
notice to Ski Holdings.

     4.  Compensation.  As compensation  for the Transition  Services  rendered
hereunder,  the  Company  shall pay the fees and  reimbursements  specified  in
Exhibit A (the "Transition Service Fees"). The Transition Service Fees shall be
billed in the following manner:

          (a) For Transition Services which can be billed directly by the third
party vendors  supplying such services,  Ski Holdings and the Company shall use
their best efforts to cause such vendors to bill the Company directly.

          (b) For  Transition  Services  for  which  the  fees  are  fixed  and
determinable  each monthly  fiscal period of Ski Holdings,  Ski Holdings  shall
present  invoices to the Company on or before the tenth (10th)  business day of
each  month,  which  invoices  shall  be due  and  payable  within  15  days of
presentment.

          (c) For  Transition  Services  which are based on actual  usage,  Ski
Holdings  shall provide the Company with invoices on a monthly basis in arrears
not  later  than 15 days  following  the  close  of each  fiscal  month  of Ski
Holdings,   which  invoices  shall  be  due  and  payable  within  15  days  of
presentment.

     5.  Expenses.  In  addition to paying all  Transition  Service  Fees,  the
Company  shall also  reimburse  Ski  Holdings  for all  out-of-pocket  expenses
incurred by it in connection with the Transition  Services  including,  without
limitation,   advertising,   legal  and  other  reasonable  professional  fees;
provided,  however, that Ski Holdings shall obtain the Company's prior approval
on a  case-by-case  basis before  incurring  any outside  legal fees and before
incurring any other  out-of-pocket  expenses exceeding $1,000 in any particular
case.  Ski Holdings  shall  include all such  itemized  expenses in the monthly
invoices for Transition Services referred to in Section 4.

     6.  Arms  Length  Terms.  The  parties  acknowledge  and  agree  that  the
compensation   and  other  terms  of  this   Agreement   afford  Ski   Holdings
consideration  for the rendition of the  Transition  Services which is at least
equal to that which could be obtained from unaffiliated Persons if Ski Holdings
were to provide the  Transition  Services to such  unaffiliated  Persons in the
same geographic areas in which the Company conducts business.
<PAGE>

     7.  Documentation  and Disputes.  In the event that any of the  Transition
Service Fees or  reimbursements  are based upon hourly rates or  allocations of
combined  costs other than as specified in Exhibit A, Ski Holdings  will,  upon
request, provide to the Company documentation supporting the amount charged.

     8. Confidential Information.

          (a) Each of Ski Holdings and the Company shall: (i) hold in trust and
maintain  confidential,  (ii) not disclose to others  without the prior written
approval  of the  other,  and (iii) not use for any  purpose,  other  than such
purposes as may be authorized in writing by the other, any Information received
from the other under this Agreement;  provided,  however, that Ski Holdings may
disclose any such  information to Fleet National Bank (f/k/a  BankBoston NA) as
required by its loan arrangement with such bank.

          (b) For these  purposes,  "Information"  shall  mean any  information
relating to the Transition  Services or the other party which is  confidential,
proprietary  or otherwise not generally  available to the public (but excluding
information  which has become part of the public domain, or which the receiving
party has obtained independently from third party sources without those sources
having violated any fiduciary or other duty not to disclose such information).

          (c) The foregoing obligations of confidentiality,  non-disclosure and
non-use shall not apply,  however,  to any  Information  to the extent that the
receiving  party can show that: (i) such  Information  is or becomes  generally
available  to the  public  other  than  through  the acts or  omissions  of the
receiving party; (ii) such Information is or becomes available to the receiving
party on a non-confidential  basis from a third party having the legal right to
disclose  such  Information,  (iii)  such  Information  relates  to  historical
activities of the other party prior to the date hereof;  or (iv)  disclosure of
such  Information  is required  under  applicable law or regulations or is made
pursuant to the request of any regulatory  authority having  jurisdiction  over
the receiving party.

     9.  Standard of Care;  Limitation  of  Liability.  Ski Holdings  shall use
reasonable efforts to attempt to provide the Transition Services to the Company
with the same  general  degree of care,  skill and  prudence as is  customarily
exercised by Ski Holdings in its own business. Ski Holdings, however, shall not
be liable for any act or omission  related to or arising from its  provision of
the  Transition  Services  unless  that  act  or  omission   constitutes  gross
negligence or willful misconduct on its part.  Furthermore,  Ski Holdings shall
not be liable to the Company  hereunder for any liabilities,  losses,  damages,
expenses or other amounts (however  characterized) which may be suffered by the
Company  as a result of any breach of this  Agreement  by Ski  Holdings  to the
extent any such liabilities,  losses, damages, expenses or other amounts exceed
the aggregate Transition Service Fees payable by the Company hereunder,  and in
no  event  shall  Ski  Holdings  be  liable   hereunder  for  any  indirect  or
consequential  damages which may be suffered by the Company. Ski Holdings shall
have no duties to the Company  except those  expressly  set forth  herein,  and
shall  have  no  duty  or  responsibility  to  determine  whether  any  data or
information provided to it or any of its employees or agents hereunder by the
<PAGE>

Company is accurate,  but may, instead,  conclusively rely upon the accuracy of
any such data or information.

     10. Indemnification. The Company shall indemnify, defend and hold harmless
Ski Holdings and its shareholders,  directors,  officers,  employees and agents
from and against (i) any breach of this  Agreement  by the Company and (ii) any
and all damages,  losses,  claims,  judgments,  amounts paid in settlement  and
out-of-pocket expenses (including reasonable legal and accounting fees) arising
out  of  any  actual  or  threatened   third  party  claims,   proceedings   or
investigations  relating to or resulting  from Ski  Holdings'  rendition of the
Transition  Services  or  Ski  Holdings'  performance  of  any  of  its  duties
hereunder,  except to the extent the same  proximately  result from the willful
misconduct,  gross  negligence  or  negligence  of Ski  Holdings  or  any  such
shareholder,    director,   officer,   employee   or   agent.   The   Company's
indemnification  obligations  shall survive the  termination of this Agreement,
and Ski  Holdings  shall  have the right to  require  the  Company  to  advance
expenses  incurred by it in advance of the final disposition of any such claim,
proceeding or investigation.

     11.  Assignment or Transfer.  No party shall assign,  transfer or delegate
any of its rights or obligations under this Agreement without the prior written
approval of the other party, except that no such approval shall be required for
an  assignment  or  delegation  to an  affiliate  or to a successor to all or a
substantial  portion of the assets or the  business of either  party,  provided
that such  affiliate or successor  assumes such party's  obligations  hereunder
with respect to the rights  assigned or  transferred.  This Agreement  shall be
binding  on the  parties'  respective  permitted  or  approved  successors  and
assigns.

     12.  Notices.  All  notices,  requests,  demands and other  communications
provided for hereunder shall be in writing (including facsimile communications)
and shall be mailed (return receipt requested),  sent by facsimile or delivered
by courier or other means of personal  service to each party at the address set
forth as follows, and any such notice,  request,  demand or other communication
shall be effective upon receipt.  All payments required in this Agreement shall
be paid to and delivered to the party as provided herein for notice.

If to the            c/o Booth Creek Management Corp.
Company:             1000 South Frontage Road West, Suite 101
                     Vail, Colorado 81657
                     Attn: George N. Gillett, Jr.
                     Fax: (970) 479-0291
                     Tel:  (970) 476-4030
<PAGE>

With copy to:        Winston & Strawn
                     200 Park Avenue
                     New York, New York 10166-4193
                     Attn: Richard B. Teiman, Esq.
                     Fax: (212) 294-4700
                     Tel:  (212) 294-6730

If to Ski Holdings:  Booth Creek Ski Holdings, Inc.
                     9705 Highway 267, Suite 2
                     Truckee, CA  96161
                     Attn: Brian Pope
                     Vice President of Finance and Accounting
                     Fax:  (530) 550-5118
                     Tel:   (530) 550-5103

With copy to:        Loeb & Loeb LLP
                     345 Park Avenue
                     New York, New York 10154-0037
                     Attn: Michael D. Beck, Esq.
                     Fax:  (212) 407-4000
                     Tel:   (212) 407-4990

     13. Entire  Agreement.  This Agreement  (including the exhibits hereto and
provisions  of the Asset  Purchase  Agreement  incorporated  by  reference)  is
intended  to embody the  final,  complete  and  exclusive  agreement  among the
parties with respect to the subject matter hereof; is intended to supersede all
prior  agreements,  understandings  and  representations  written or oral, with
respect  thereto;  and may not be contradicted by evidence of any such prior or
contemporaneous agreement, understanding or representation,  whether written or
oral.

     14.  Governing  Law and Venue.  This  Agreement  is to be  governed by and
construed in  accordance  with the laws of the State of New York  applicable to
contracts made and to be performed wholly within such State, and without regard
to the conflicts of laws principles thereof.  Any suit brought hereon,  whether
in  contract,  tort,  equity or  otherwise,  shall be  brought  in the state or
federal courts sitting in the City and County of Denver, Colorado,  California,
the parties  hereto hereby  waiving any claim or defense that such forum is not
convenient  or proper.  Each party hereby agrees that any such court shall have
in personam  jurisdiction over it, consents to service of process in any manner
prescribed in Section 13 or in any other manner authorized by Colorado law, and
agrees  that a final  judgment  in any  such  action  or  proceeding  shall  be
conclusive and may be enforced in other  jurisdictions  by suit on the judgment
or in any other manner specified by law.

     15. Binding Effect. This Agreement and the rights,  covenants,  conditions
and  obligations  of the  respective  parties  hereto  and  any  instrument  or
agreement  executed pursuant hereto shall be binding upon the parties and their
respective successors, assigns and legal representatives.
<PAGE>

     16.  Attorney's Fees. If any party shall bring an action against the other
by reason of any alleged breach of any covenant, provision or condition hereof,
or otherwise arising out of this Agreement,  the unsuccessful  party(ies) shall
pay to the prevailing party(ies) all attorney's fees and cost actually incurred
by the  prevailing  party(ies),  in addition to any other relief to which it or
they may be entitled.

     17.  Counterparts.  This Agreement may be executed  simultaneously  in any
number of  counterparts,  each of which shall be deemed an original  but all of
which together shall constitute one and the same instrument. In making proof of
this  Agreement  it shall not be  necessary to produce or account for more than
one counterpart.

     18.  Section  Headings.  The section  headings of this  Agreement  are for
convenience  of  reference  only and shall not be deemed to alter or affect any
provision hereof.

     19.  Severability.  In the  event  that any  provision  or any part of any
provision  of this  Agreement  shall be void or  unenforceable  for any  reason
whatsoever,  then such provision  shall be stricken and of no force and effect.
However,   unless  such  stricken   provision   goes  to  the  essence  of  the
consideration  bargained  for by a  party,  the  remaining  provisions  of this
Agreement shall continue in full force and effect,  and to the extent required,
shall be modified to preserve their validity.

     20. No Third-Party Rights.  Except as contemplated by Section 10,  nothing
in this Agreement, whether express or implied, is intended to confer any rights
or remedies  under or by reason of this Agreement on any Persons other than the
parties to it and their respective  successors and assigns,  nor is anything in
this Agreement  intended to relieve or discharge the obligation or liability of
any third Persons to any party to this Agreement,  nor shall any provision give
any third Persons any right of  subrogation or action over against any party to
this Agreement.

     21.  Ambiguities.  The parties acknowledge that each party and its counsel
has materially  participated in the drafting of this Agreement and consequently
the rule of contract interpretation that ambiguities, if any, in the writing be
construed against the drafter, shall not apply.

      [remainder of this page intentionally left blank; signatures follow]
<PAGE>

     IN WITNESS  WHEREOF,  the parties hereto have duly executed this Agreement
the day and year first above written.

                                   GT ACQUISITION I, LLC, a Delaware
                                   limited liability company

                                   By: __________________________

                                   Its: __________________________

                                   SKI HOLDINGS

                                   BOOTH CREEK SKI HOLDINGS, INC., a
                                   Delaware corporation

                                   By: __________________________

                                   Its: __________________________
<PAGE>

                                  EXHIBIT "A"

                              SCHEDULE OF SERVICES

     1.  Employee  Transition  Services.  From and after the  Closing  Date and
continuing  until the later of June 30, 2000 or the ninetieth  (90th) day after
the Closing  Date,  at the written  request of the Company,  Ski Holdings  will
cause  employees  selected by it to provide  business  advisory and  consulting
services to the Company ("Employee Transition Services").  The provision by Ski
Holdings of such Employee Transition Services to the Company will be subject to
the following:

          (a) The Company must provide reasonable advance written notice of its
request for Employee Transition Services.

          (b) The  demands  of  each  employee's  existing  and  expected  work
commitments  to Ski Holdings will have  priority  over the Employee  Transition
Services,  with the objective  that the provision of the Employees  Services to
the Company will not impede the proper  execution of any such  employee's  work
commitments to Ski Holdings.

          (c) The fees charged by Ski Holdings to the Company for such Employee
Transition Services will be based on the fully distributed cost of the Employee
Transition  Services  on a per hour or per day basis,  which will  include  the
following:  (i) the average per hour rate of compensation  paid to the employee
based on (x) such  employee's  then current  annual salary rate divided by 2080
hours,  or (y) such  employee's  then current  hourly wage rate, as applicable;
(ii) Ski  Holdings'  estimated  annual payroll overhead burden rate of 25%; and
(iii) other directly allocable costs and expenses associated with the provision
of such Employee Transition Services.

     2. Specific Employee Transition Services.  Without limiting the generality
of Section 1 of this Exhibit A and subject to the provisos in Sections 1(a) and
1(b) above:

          (a) from and after the  Closing  Date and until the later of June 30,
2000 or the  ninetieth  (90th) day after the  Closing  Date,  the  Company  may
utilize the services of the following  employees at no charge:  Tamra Underwood
(Ski  Holdings'  Vice  President  and General  Counsel);  Mark  Petrozzi  (Risk
Management);  Laura  Moriarty;  and Julie Mauer;  provided,  however,  that the
services of Mark Petrozzi shall be limited to risk management  consultation and
shall specifically  exclude  negotiations to procure new insurance on behalf of
the Company; and

          (b) from and after the Closing Date and through  April 28, 2000,  the
Company  may  utilize  the  services  of each of Tim Beck and Pat Peeples at no
charge.  After  April 28,  2000 and until  the  earlier  of (i) the date of the
initial  rendering of the record of the  decision to approve the  Environmental
Impact Statement  currently in process with respect to the Grand Targhee resort
(without regard to any applicable administrative or judicial appeal periods) or
(ii) August 31, 2000,  the Company  shall pay for any such services by Mr. Beck
at the rates sets forth in Section 1 of this  Exhibit A and the Company will be
required to make its own arrangements  with Ms. Peeples if it wishes to use her
<PAGE>

services,  and any arrangements  between Ski Holdings and Ms. Peeples shall not
preclude the use by the Company of her services. Thereafter, should the Company
request that Tim Beck render  services to it as a consultant or expert  witness
with  respect  to any  administrative  or  judicial  appeal  arising  from  the
foregoing land exchange with the U.S. Forest Service, Ski Holdings will provide
Mr. Beck's services on a limited basis provided that (i) only Mr. Beck, and not
personnel otherwise  available to the Company,  has the knowledge and expertise
to render the requested  services,  (ii) Mr. Beck's availability to perform his
regular  duties  on  behalf  of  Ski  Holdings  will  not  be  impaired  by his
performance of the requested  services to the Company and (iii) the Company and
Ski Holdings reach mutually  acceptable  agreements as to the terms pursuant to
which Mr. Beck's services will be provided to the Company.

Notwithstanding  anything else provided in this Section 2,  however, the amount
of time  devoted  by any  employee  listed  in items  (a) and (b)  above to any
matters  related to the Company shall not  generally  exceed the amount of time
currently devoted by such employee to matters for the Company.

     3.  Commercial  Insurance.  From and after the Closing Date and continuing
until the earlier of (i) the later of June 30, 2000 or the ninetieth (90th) day
after the Closing Date, or (ii) the date on which the Company  procures its own
like insurance, Ski Holdings will cause its insurers to continue to provide the
Company with the following forms of insurance coverage ("Transition Insurance")
under Ski Holdings'  existing  commercial  insurance  policies,  subject in all
cases to the Company's  compliance  with the existing  terms and  conditions of
such insurance policies:

          (a) Commercial property.

          (b) Boiler and machinery.

          (c) Electronic data processing.

          (d)  Commercial  general  liability,  umbrella  coverage,  and First,
Second, Third and Fourth Excess Layer.

          (e) Business automobile.

          (f) Crime.

Except for the Transition  Insurance,  Ski Holdings will have no responsibility
for  arranging to provide to the Company any other form of insurance  coverage,
including  directors and officers  liability  insurance,  employment  practices
liability  insurance,  fiduciary liability  insurance,  workman compensation or
other forms of insurance.

          The Company will  promptly  reimburse  Ski Holdings for its allocable
share of all  premium  costs  of the  Transition  Insurance,  as  reflected  on
Schedule 1. The Company will pay all actual  uncovered  claims,  excess losses,
deductibles  and other costs  applicable  to the  Transition  Insurance for any
<PAGE>

incidents  applicable to its business and  operations,  as well as any taxes or
administrative expenses associated with the Transition Insurance.

     4. Health Welfare and Other Benefits.

          (a) Subject to all applicable  rules and regulations  related to such
health,  welfare and  benefit  plans,  Ski  Holdings  will  continue to provide
eligible  employees of the Company with the  opportunity  to participate in the
following  Ski Holdings  health and welfare  programs  (the "Health and Welfare
Programs") for the period  commencing on the Closing Date and continuing  until
the earlier of (i) the later of June 30, 2000 or the ninetieth (90th) day after
the  Closing  Date  or  (ii)  such  time  as the  Company  has  made  alternate
arrangements for Health and Welfare Programs:

               (i) Benefits  provided under the Booth Creek Ski Holdings,  Inc.
     Indemnity Employee Benefit Plan.

               (ii) Benefits provided under the Booth Creek Ski Holdings,  Inc.
     Vision Plan.

               (iii) Benefits provided under the Booth Creek Ski Holdings, Inc.
     Dental Plan.

               (iv) Employer  provided life  insurance and  accidental  death &
     disability coverage.

               (v) Employer provided dependent life insurance coverage.

               (vi) Employee funded supplemental life insurance coverage.

               (vii) Employer provided short-term disability coverage.

               (viii) Employer provided long-term disability coverage.

               (ix) Employee funded supplemental long-term disability coverage.

The Company will  promptly  reimburse  Ski Holdings for, or pay directly to the
various providers and  administrators  of the Health and Welfare Programs,  the
Company's direct or allocable share (based upon participating employees) of all
administrative fees, employer premiums,  employee premiums,  claims, losses and
any other costs  incurred by Ski  Holdings and  associated  with the Health and
Welfare  Programs.  Schedule 2  summarizes  the  current  administrative  fees,
employer premiums and employee premiums  associated with the Health and Welfare
Programs.

          (b) From and after the Closing  Date and until the earlier of (i) the
later of June 30, 2000 or the  ninetieth  (90th) day after the Closing  Date or
(ii) such  time as the Company has made alternate  arrangements  for retirement
programs, Ski Holdings will continue to hold and administer in the Ski Holdings
<PAGE>

401(k) plan (the "Plan") the accounts and funds of employees of the Company who
were formerly employees of Ski Holdings and/or its affiliates.

     5.  Banking  Services.  Following  the  Closing  Date,  the  Company  will
establish  its own banking and cash  management  accounts and Ski Holdings will
have no responsibility  therefor.

     6. Ticketing and Loyalty System Services. The parties acknowledge that the
Company  currently  maintains and supports its own primary ticketing system and
participates in the Vertical Value loyalty program  maintained and supported by
Ski Holdings and its First Tracks ticketing system. Each of the Company and Ski
Holdings acknowledge the low volume of Vertical Value members maintained by the
Company. During the remainder of the 1999/00 ski season:

          (a) the Company may continue to use the First Tracks ticketing system
relating to the Vertical Value program at no cost to the Company; and

          (b)  Ski  Holdings  will  honor  Vertical  Value  redemptions  at Ski
Holdings'  other ski resorts from  Vertical  Value members at the Grand Targhee
resort;  and the Company  will honor  Vertical  Value  redemption  at the Grand
Targhee resort from Vertical Value members at Ski Holdings'  other ski resorts,
each party honoring such Vertical Value redemption at no cost to the other.

          Following  the  1999/00  ski  season,   Ski  Holdings  will  have  no
responsibility to provide any ticketing or loyalty system support or integrated
programs to the Company.

     7. Human  Resources  and  Employee  Development  Services.  At the written
request of the Company,  from and after the Closing Date and  continuing  until
the later of June 30, 2000 or the ninetieth  (90th) day after the Closing Date,
Ski Holdings  will  continue to provide to the Company  substantially  the same
training,  program  assistance  and other  services  it  provides  to its other
resorts through its corporate Human  Resources  personnel and consultants  (the
"Human  Resources  Services").  In  particular,  Ski Holdings  will provide the
following  Human  Resources  Services  to the Company as of the dates set forth
below:

          (a) Laura  Moriarty will be  coordinating  the "360 Degree  Feedback"
process  commencing in February,  2000. If the Company elects to participate in
such program with respect to the Grand  Targhee  resort after the Closing Date,
the Company  will  reimburse  Ski  Holdings  for its  allocable  portion of the
consolidated  set-up fee and the $80 per head  processing  fee for any selected
participants.

          (b) Employee Climate Surveys will be conducted in February, 2000  for
all of Ski Holdings' ski resorts.  If the Company elects to participate in such
program with respect to the Grand Targhee resort after the Closing Date (i) the
Company will,  at its cost,  be  responsible  for all data  collection  efforts
associated with the program,  (ii) the  Company will reimburse Ski Holdings for
Ski Holdings' out of pocket costs related to providing the program to the Grand
<PAGE>

Targhee resort and (iii) Ski Holdings will provide compilation services for the
Employee Climate Survey to the Company at no charge.

          (c) Woody Liswood provides certain  compensation  consulting services
to the Ski Holdings'  resorts.  Any such services  provided by Woody Liswood to
the Company  after the Closing  Date with respect to the Grand  Targhee  resort
will be promptly paid for (or  reimbursed,  if previously paid by Ski Holdings)
and billed  directly to the  Company at Woody  Liswood's  applicable  rates and
charges.

          (d) Dick Tappley  provides  certain  training  and  customer  quality
consulting  services to Ski Holdings'  resorts.  Any such services  provided by
Dick Tappley  after the Closing Date with respect to the Grand  Targhee  resort
will be promptly paid for (or  reimbursed,  if previously paid by Ski Holdings)
and billed  directly  to the  Company at Dick  Tappley's  applicable  rates and
charges.

     8. Marketing Services and Promotional Arrangements.

          (a) Ski  Holdings  maintains  a number  of  promotional  arrangements
designed to increase visitation at its resorts. Schedule 3 reflects promotional
product arrangements currently in place for the 1999/00 ski season which permit
usage or  visitation  at the Grand  Targhee  resort  for the  remainder  of the
1999/00 ski season.  From and after the Closing  Date and for the  remainder of
the  1999/00  ski  season,  Ski  Holdings  will  continue to honor at its other
resorts the  redemption of existing  promotional  items  initiated by the Grand
Targhee  resort,  provided that the Company  honors the redemption at the Grand
Targhee  resort of  promotional  items  initiated  by the Ski  Holdings'  other
resorts,  each at no cost to the other. Any changes in the promotional programs
that would cause  visitation  levels at either Grand  Targhee or Ski  Holdings'
other resorts to increase  significantly  over current  levels will require the
approval of the Company and Ski Holdings.

          (b) Ski Holdings also maintains a number of other marketing programs,
initiatives and research programs which involve its resorts. From and after the
Closing and  continuing  for the  remainder  of the  1999/00  ski  season,  Ski
Holdings  will  continue  to  afford  the  Company  with  the   opportunity  to
participate in these programs  provided the Company promptly pays Ski Holdings,
or  reimburses  Ski  Holdings  if  previously  paid  by Ski  Holdings,  for all
allocable  or direct costs  incurred by Ski Holdings  with respect to the Grand
Targhee resort.  Schedule 4 reflects these programs and the estimated allocable
or direct  cost to be  charged  to the  Company  for such  programs  during the
remainder of the 1999/00 ski season.

     9.  E-Business  Services.  From and after the Closing Date and  continuing
until the later of June 30, 2000 or the ninetieth  (90th) day after the Closing
Date,  the Company may continue to utilize Ski  Holdings'  E-Commerce  "virtual
store" and transaction system for processing gift certificate transactions,  at
no charge.  However,  except as specified in this Section 9, Ski Holdings  will
have no  responsibility  to provide any other E-Commerce system services to the
Company.
<PAGE>

     10.  Enterprise  Systems  Software.  From and after the  Closing  Date and
continuing until August 25, 2000, the Company may maintain access to and use of
Ski Holdings' JD Edwards  enterprise system software and AS/400 computer.  Such
access will be limited to those uses currently in place,  including  accounting
systems  capabilities  comprised of the general  ledger,  financial  reporting,
accounts payable/cash disbursements, payroll, human resources, fixed assets and
other JD Edwards modules  currently in place.  For such access the Company will
pay Ski Holdings (or reimburse Ski Holdings if previously paid by Ski Holdings)
for all allocable and direct costs arising from such usage. The estimated costs
of access to and usage of JD Edwards and the AS/400 are  reflected  on Schedule
5. Any  non-recurring  or unusual  system  support  provided  by Ski  Holdings'
personnel  associated  with the  Company's  usage of the JD Edwards  system and
AS/400  will be charged to the Company in  accordance  with  Section 1  of this
Exhibit A.

     11. Internet Access.  From and after the Closing Date and continuing until
August 25, 2000, the Company may continue to maintain  internet access services
through  Ski  Holdings.  The  estimated  costs of  access  to and  usage of Ski
Holdings'  internet  access  services  will  include the charges  reflected  on
Schedule 5. Any system  support  services  provided by Ski Holdings'  personnel
associated  with the  Company's  continued  usage of internet  services will be
charged to the Company in accordance with Section 1 of this Exhibit A.

     12.  Telecommunications  Services.  From and  after the  Closing  Date and
continuing  until  August  25,  2000,  the  Company  may  continue  to use  the
telecommunication  services  currently  provided  to it by Ski  Holdings  or by
telecommunications   vendors  under  consolidated  buying   arrangements.   The
estimated costs of access to and usage of such telecommunications services will
include the charges  reflected  on Schedule 5. Any  telecommunications  support
services  provided by Ski  Holdings'  personnel  associated  with the Company's
continued usage of telecommunication services will be charged to the Company in
accordance with Section 1 of this Exhibit A.

     13.  Daily Sales and Labor  Systems.  From and after the Closing  Date and
continuing  for the  remainder  of the  1999/00  ski  season,  the  Company may
continue to use Ski Holdings' Daily Sales and Labor Systems, at no charge.

     14.  Determination of Allowable Costs. All determinations of the Company's
allocable  share of  (i) employee  salaries,  other benefits and annual payroll
overhead burden  relating to the Employee  Transition  Services  (ii) insurance
premiums and other costs relating to the Transition Insurance; (iii) Health and
Welfare Program and retirement program  administrative fees, employer premiums,
employee premiums,  claims,  losses and other related costs; and (iv) all other
direct and indirect  costs incurred by Ski Holdings in rendering the Transition
Services will be made by Ski Holdings  exclusively  and will be conclusive  and
binding upon the Company in the absence of manifest error.

     15. Services at No Charge. To the extent that any Transition  Services are
to be  provided to the  Company at no charge  pursuant  to this  Exhibit A, the
<PAGE>

parties agree that such Transition  Services will be provided to the Company at
no charge only for so long as the costs to Ski  Holdings of  providing  them to
the  Company do not  increase to a level  materially  in excess of the costs so
incurred by Ski Holdings as of the date hereof.  If such a material increase in
costs occurs,  Ski Holdings will have the right to charge the Company for those
excess costs.
<PAGE>

Transition Services Agreement
Schedule 1
Premium Allocation - Commercial Insurance

                                 Allocation for Month Ended
                        ---------------------------------------------
                        February   March     April      May      June
 Form of Insurance        2000      2000     2000      2000      2000     Total
-------------------------------------------------------------------------------
Commercial Property     $ 1,237  $ 1,237   $ 1,237   $ 1,237   $ 1,237  $ 6,186

Boiler and Machinery        176      176       176       176       176      881

Electronic Data              31       31        31        31        31      156
  Processing

Commercial General       13,702   16,486     4,502        11     1,556   36,257
  Liability, Umbrella
  coverage and first,
  second, third and
  fourth Excess Layer
  (A)

Business Automobile         870      870       870       870       870    4,349

Crime                        91       91        91        91        91      456
                     ----------------------------------------------------------

                       $ 16,108 $ 18,892   $ 6,908   $ 2,416   $ 3,961 $ 48,285
                     ==========================================================

Note:  The Premium  Allocation  above  excludes  any  amounts due to  uncovered
losses,  excess losses,  deductibles  and any other costs  applicable  with the
insurance  coverages  for  any  incidents  applicable  to the  Company  and its
subsidiaries'  operations,  as  well as any  taxes  or  administrative  expense
associated  with such  coverage.  The Buyer shall be  responsible  for all such
costs.

(A) - General  liability  allocation is based on $73,211 premium  allocation to
Grand  Targhee  times the  percentage  of  monthly  budgeted  revenue to annual
budgeted revenue for fiscal 2000.
<PAGE>

Transition Services Agreement
Schedule 2
Health and Welfare Plan
Adminstrative Fees, Premiums and Other Charges

     Administrative Fees / Premiums   Billing Rate
     ------------------------------   ------------

     Specific Stop Loss
          Single:                       $ 16.68    per current census
          2 Person:                       45.09    per current census
          Family:                         45.09    per current census
     Medical Administration Fees
          Single:                          9.50    per current census
          2 Person:                        9.50    per current census
          Family:                          9.50    per current census
     Dental Administration Fees
          Single:                          2.75    per current census
          2 Person:                        2.75    per current census
          Family:                          2.75    per current census

     Utilization Review                    1.75    per current census
     STD                                   1.00    per current census
     COBRA                                 0.75    per current census
     Billing Fee                           0.35    per current census
     Flex Fee                              4.50    per current census

     Employee Contributions / Premiums
     ---------------------------------
     Indemnity Employee Benefit Plan     $16.00 Employee
                                         $40.00 Employee with 1 Dependent
                                         $64.00 Employee with 2 or more
                                         Dependents
     Dental Plan                         $5.00 Employee
                                         $12.00 Employee with 1 Dependent
                                         $18.00 Employee with 2 or more
                                         Dependents
     Vision Plan                         No employee contribution required
     Employee Supplemental Life          Deductible amounts per coverage table
     Insurance Coverage
     Employee Supplemental Buy-Up        $.22 per $100 of covered payroll
     Long-Term Coverage

     Employer Premiums and Charges
     -----------------------------
     Indemnity Employee Benefit Plan     Actual Incurred Claims Losses
                                         (Net of Employee Contributions)
     Dental Plan                         Actual Incurred Claims Losses
                                         (Net of Employee Contributions)
     Vision Plan                         Actual Incurred Claims Losses
     Employer Provided Life Insurance    $.18 per $1000 of coverage
     and AD&D Coverage
     Employer Provided Dependent Life    $1.75 per covered employee
     Insurance Coverage
     Employer Provided Short-Term        Note A
     Disability Coverage
     Employer Provided Core Long-Term    $.21 per $100 of covered payroll
     Disability Coverage

Note A: If short term  disability  benefits are provided under a state mandated
plan, no additional  benefits  provided.  If a state  mandated is not available
then benefits are as follows: 1) Waiting period: accident - 0 days, illness - 7
days, 2) Benefit amount:  66.67% of basic earnings,  3) Maximum weekly benefit:
$500, and 4) Maximum benefit period: 26 weeks.
<PAGE>

Transition Services Agreement
Schedule 3

                Booth Creek Resorts Promotional Product Listing
                                Winter 1999/2000

 Promotion        Offer/          Restrictions/   Redeem At       Comments
 Name             Discount        Requirements
-------------------------------------------------------------------------------
 Backstage        Free season     Any day         Ticket          All BC
 Pass             pass                            Booths          Resorts
-------------------------------------------------------------------------------
 Brandywine       Free lift       Sun-Fri,        Special         Valid at
 Voucher          ticket          non-hol.        Tickets         all BC
                                  Collect         Ticket          Resorts
                                  coupon.         Booth
-------------------------------------------------------------------------------
 Big Bear         Free lift       Sun-Fri,        Ticket          Valid at
 season pass      ticket          non-hol.        Booths          NS, SAT
 holders                          Collect                         and GT only.
                                  voucher.
-------------------------------------------------------------------------------
 Big Bear         All day         Sun-Fri,        Ticket          Valid at
 season           ticket at       non-hol.        Booths          all BC
 pass holders     pm rate         Must                            Resorts
                                  present
                                  pass
-------------------------------------------------------------------------------
 Dynastar -       Free lift       Sun-Fri,        Special         Valid at
 New              ticket          non-hol.        Tickets         all BC
 Shape of                         Collect         Ticket Booth    Resorts
 Skiing                           coupon &
                                  Check id.
-------------------------------------------------------------------------------
 Dynastar -       Bring a         Sun-Fri,        Ski/Board       Valid at
 New              Buddy Offer*    non-hol.        Rental          all BC
 Shape of                         Collect         Ticket Booth    Resorts
 Skiing                           coupon and      Special
                                  check id        Tickets
                                  for name
                                  match.
-------------------------------------------------------------------------------
 Gold Team        Free lift       Sun-Fri,        Ticket          Valid at
 Voucher - AA     ticket          non-hol         Booths          all BC
                                  Collect                         Resorts
                                  voucher.
-------------------------------------------------------------------------------
 Grand Targhee    All day         Sun-Fri,        Ticket          Valid at
 pass holders     ticket at       non-hol.        Booths          all BC
                  pm rate         Must                            Resorts
                                  present
                                  pass
-------------------------------------------------------------------------------
 Harry's Fresh    2 for 1         Any day         Any resort      Valid at
 Foods            bowl of                         food &          all BC
                  soup (not                       beverage        Resorts
                  chili)                          location
-------------------------------------------------------------------------------
 K2 sticker       Free            Collect         Special         Valid at
                  Vertical        sticker         Tickets         all BC
                  Value                           Activity        Resorts
                                                  Center
-------------------------------------------------------------------------------
 Northstar        All day         Sun-Fri,        Ticket          Valid at
 pass holders     ticket at       non-hol         Booths          all BC
                  pm rate                                         Resorts
-------------------------------------------------------------------------------
 Platinum         Free lift       Anyday          Special         Loon and WV
 Season Pass      ticket                          Tickets         pass. Valid
                                                                  at all BC
                                                                  Resorts.
-------------------------------------------------------------------------------
 Sierra pass      All day         Sun-Fri,        Ticket          Valid at
 holders          ticket at       non-hol         Booths          all BC
                  pm rate         Must                            Resorts
                                  present
                                  pass
-------------------------------------------------------------------------------
 Ski Magazine     Bring a         Sun-Fri,        Ski/Board       Valid at
 (January         Buddy           non-holiday.    Rental          all BC
 issue)           Offer *         Collect                         Resorts
                                  coupon
<PAGE>

                Booth Creek Resorts Promotional Product Listing
                                Winter 1999/2000

 Promotion        Offer/          Restrictions/   Redeem At       Comments
 Name             Discount        Requirements
-------------------------------------------------------------------------------
 Skier's Edge     25% off         Sun-Fri,        Marketing       Skier's
                  adult all       non-hol                         Edge will
                  day lift                                        contact
                  ticket                                          Mktg Dir
                                                                  To purchase
                                                                  tickets as
                                                                  needed.
-------------------------------------------------------------------------------
 Snowlink         Bring a         Sun-Fri,        Ski/Board       Valid at
 survey           Buddy           non-holiday.    Rental          all BC
 letter           Offer           Collect                         Resorts
                                  Coupon
-------------------------------------------------------------------------------
 Snoworld         Bring a         Sun-Fri,        Ski/Board       Valid at all
 Magazine         Buddy Offer*    non-holiday.    Rental          BC Resorts
                                  Collect
                                  coupon
<PAGE>

                Booth Creek Resorts Promotional Products Listing
                                Winter 1999/2000

Promotion        Offer/          Restrictions/   Redeem At       Comments
Name             Discount        Requirements
-------------------------------------------------------------------------------
 Student          Bring a         Sun-Fri,        Special         Valid at
 Advantage        Buddy* OR       non-hol         Tickets         all BC
                  $5 off          Must                            Resorts
                  snowtoy         present
                  rental          member
                                  card.
-------------------------------------------------------------------------------
Summit pass       All day         Sun-Fri,        Special         Valid at
holders           ticket at       non-hol         Tickets         all BC
                  pm rate         Must                            Resorts
                                  present
                                  pass
-------------------------------------------------------------------------------
Threedom          All day         Sun-Fri,        Special         Valid at
pass holders      ticket at       non-hol         Tickets         all BC
                  pm rate         Must                            Resorts
                                  present
                                  pass
-------------------------------------------------------------------------------
Vertical          Five paid       Anyday.         Special         Valid at
Value             visits,         Must            Tickets or      all BC
                  sixth is        present         Ticket          Resorts
                  free.           membership      Booths
                  Then, three
                  paid
                  visits-4th
                  free.
-------------------------------------------------------------------------------

Updated:  February 24, 2000

Primary Holiday dates:  December 18,  1999-January 2, 2000; January 15-17, 2000
and February 19-21, 2000. Holiday dates may vary some by resort.

*Bring a Buddy  Offer - sign a friend  up for  learn to  ski/ride  package  and
receive a free lift ticket for yourself.
<PAGE>

Transition Services Agreement
Schedule 4
Marketing and Promotional Services

                                          February    March     April
Program / Initiative                        2000      2000      2000     Total
--------------------                        -----     -----     -----    ------

Vertical Value Program (A)                  $ 486     $ 486     $ 486   $ 1,458

RRC (Invoices Direct Billed to Resort)

Customers First (TBA once                     TBA       TBA       TBA
final costs associated with
 database work are known.)
                                       ----------------------------------------
                                            $ 486     $ 486     $ 486   $ 1,458
                                       ========================================

(A) Amount  represents  Targhee's portion of Vertical Value costs accrued as of
January 28, 2000 at Corporate.
<PAGE>

Transition Services Agreement
Schedule 5
E Commerce and Web-Site Services

Resort Sports Network Costs and Charges
---------------------------------------
January 2000 Resort Cam Hosting Charge             $ 1,200
January 2000 Web-Site Hosting Charge               $   612
January 2000 Quick Edit Charge                     $   856

XOR Engineering Costs and Charges
---------------------------------
Services are provided by XOR on request at either  negotiated terms or based on
XOR's applicable rate schedules.

World Res Costs and Charges
---------------------------
World Res  receives  a 5%  commission  on all  lodging  reservations  initiated
through their sales channels.
<PAGE>

Transition Services Agreement
Schedule 5
Other Information and Telecommunication Services

<TABLE>
<S>       <C>                   <C>                  <C>         <C>       <C>      <C>       <C>       <C>     <C>        <C>
                                                                 Amount Allocated / Charged in Month Ending
                                                    February     March     April     May      June      July    August
          Vendor                Service               2000       2000      2000      2000     2000      2000     2000      Total
         -------                -------               ----       ----      ----      ----     ----      ----     ----      -----

       JD Edwards and AS/400 System Charges
       ------------------------------------

     Information Services Infrastructure Costs
           Allocable to Targhee (A)                   $3,348    $3,348    $3,348    $3,348   $3,348    $3,348   $3,348   $23,438
                                                    ----------------------------------------------------------------------------
                Total:                                $3,348    $3,348    $3,348    $3,348   $3,348    $3,348   $3,348   $23,438
                                                    ============================================================================

       Internet Access Services
       ------------------------

Pacific Bell         Internet Access                   $ 111     $ 111     $ 111     $ 111    $ 111     $ 111    $ 111     $ 777
Internet Firewall
  Depreciation                                            32        32        32        32       32        32       32       224
                                                    ----------------------------------------------------------------------------
                Total:                                 $ 143     $ 143     $ 143     $ 143    $ 143     $ 143    $ 143    $1,001
                                                    ============================================================================

       Telecommunication Services
       --------------------------

Sprint               Frame Relay to Northstar Server   $ 235     $ 235     $ 235     $ 235    $ 235     $ 235    $ 235    $1,645
Sprint               Frame Relay Targhee to Northstar    475       475       475       475      475       475      475     3,325
Hewlett Packard      Frame Relay Maintenance              68        68        68        68       68        68       68       476
AT&T Wireless        Cell Phone - L. Williamson (B)      100       100       100       100      100       100      100       700
Sprint               Long Distance Charges (C)
Sprint               Teleconferencing Charges C)
                                                    ----------------------------------------------------------------------------
                Total:                                 $ 878     $ 878     $ 878     $ 878    $ 878     $ 878    $ 878    $6,146
                                                    ============================================================================

             Grand Totals:                            $4,369    $4,369    $4,369    $4,369   $4,369    $4,369   $4,369   $30,585
                                                    ============================================================================
</TABLE>

(A) Represents costs for use of JDE Enterprise and AS/400 system and support.

(B) Monthly cost for L.  Williamson  cell phone  expense is estimated  based on
historical amounts. Actual expense may vary based on usage.

(C) Actual long  distance,  teleconferencing  and other  charges are or will be
billed/charged to Grand Targhee based on actual usage and charges.

<PAGE>
Transition Services Agreement
Schedule 5
Other Information and Telecommunication Services
Support For IS Infrastructure Cost Allocation

Annual Corporate Information Services Budget (net of allocations)      $262,976
Add Allocated costs not included in net annual budget                    98,640
                                                                       --------
Total Annual Adjusted Corp IS Budget                                   $361,616
Monthly IS Budget Amounts                                                30,135
                                                                       --------

Total Monthly Infrastructure Costs Allocable to Targhee                  $3,348
                                                                       ========
<PAGE>

                         BOOTH CREEK SKI HOLDINGS, INC.

                                 March 21, 2000

GT Acquisition I, LLC
c/o Booth Creek Management Corp.
1000 South Frontage Road West, Suite 100
Vail, Colorado  81657
Attention:  George N. Gillett, Jr.

                     Re:  Grand Targhee

Gentlemen:

      Reference is made to that certain Asset  Purchase  Agreement  (the "Asset
Purchase  Agreement"),  dated as of March 21,  2000 by and  between you and the
undersigned.  When  countersigned by you in the space provided below, this will
confirm  that  the  Asset  Purchase  Agreement  is  hereby  amended,  effective
immediately, to the following effect:

      1. The  following  additional  condition  precedent for the benefit of GT
Acquisition  I, LLC is hereby added as a new Section 6.17 of the Asset Purchase
Agreement:

                6.17 Booth Creek Ski Group Restructuring.  Prior to the Closing
           Date, a capital restructuring the economic terms of which conform to
           those described under the heading "Capital  Restructuring" at page 8
           of that  certain  Consent  Solicitation  Statement,  dated March 15,
           2000,  issued by Ski  Holdings  to the  holders of the  $133,500,000
           aggregate  principal  amount of 12-1/2% Senior Notes due 2007 of Ski
           Holdings,  and  containing  such other terms and  conditions  as are
           satisfactory to Booth Creek Partners  Limited II,  L.L.L.P.,  in its
           sole and  absolute  discretion  (such  satisfaction  to be evidenced
           conclusively  by the  execution  and  delivery  by such party of the
           capital  restructuring  documents),  shall  have  been  consummated;
           provided,  however,  that  if  Ski  Holdings  does  not  obtain  the
           requisite  consent of its  noteholders to the proposed  amendment to
           the  definition  of "Change of Control"  described  in such  Consent
           Solicitation Statement, then the terms of such capital restructuring
           may not  effect a "Change  of  Control"  within  the  meaning of the
           Indenture  relating to such 12-1/2%  Senior  Notes due 2007.

     2. The following  additional  condition precedent for the benefit of Booth
Creek Ski  Holdings,  Inc. is hereby  added as a new Section  7.11 of the Asset
Purchase Agreement:

                7.11 Booth Creek Ski Group Restructuring.  Prior to the Closing
           Date, a capital restructuring the economic terms of which conform to
           those described under the heading "Capital  Restructuring" at page 8
           of that  certain  Consent  Solicitation  Statement,  dated March 15,
           2000,  issued by Ski  Holdings  to the  holders of the  $133,500,000
           aggregate  principal  amount of 12-1/2% Senior Notes due 2007 of Ski
           Holdings,  and  containing  such other terms and  conditions  as are
           satisfactory to John Hancock Life Insurance Company,  CIBC WG Argosy
           Merchant Fund 2, L.L.C.  and their respective  affiliates,  in their
           respective sole and absolute  discretions  (such  satisfaction to be
           evidenced conclusively by the execution and delivery by such parties
           of  the   capital   restructuring   documents),   shall   have  been
           consummated; provided, however, that if Ski Holdings does not obtain
           the requisite  consent of its noteholders to the proposed  amendment
           to the  definition of "Change of Control"  described in such Consent
           Solicitation Statement, then the terms of such capital restructuring
           may not  effect a "Change  of  Control"  within  the  meaning of the
           Indenture relating to such 12-1/2% Senior Notes due 2007.
<PAGE>

     3. Except as  specifically  set forth  herein,  all of the other terms and
provisions  of the Asset  Purchase  Agreement  shall  remain in full  force and
effect.

                               BOOTH CREEK SKI HOLDINGS, INC., a
                               Delaware corporation

                               By: /s/ Elizabeth J. Cole
                                  -----------------------------------------
                                  Its: Executive Vice President / CFO
                                      -------------------------------------

AGREED AND ACCEPTED THIS
21ST DAY OF MARCH, 2000

GT ACQUISITION I, LLC

By: /s/ Jeffery J. Joyce
   -------------------------------------
   Its: Executive Vice President
       ---------------------------------

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