Document:

TERMS OF EMPLOYMENT
                                 Hernan Martinez
                                 April 28, 2000

Position:                Chief Operating Officer, American Skiing Company Resort
                         Properties, Inc.
                         Sr. Vice President American Skiing Company

Job:                     Description:  Responsible  for  management  of all real
                         estate   operations   and   divisions   and  ultimately
                         responsible for  and  accountable  for  achieving  both
                         functional  and  financial  real  estate  objectives as
                         outlined in the annual Business Plan and Budget.

Employment Status:       Employee at will.  This memorandum is not intended as a
                         contract or agreement of  employment  and no commitment
                         is made by ASC or  its subsidiary to employment for any
                         specific period of time.  Continuation of employment is
                         the discretion of ASC or its subsidiary.

Compensation:            o   Annual Base Salary: $300,000 (paid weekly, reviewed
                             every 12 months.)
                         o   Bonus: Employee is eligible for bonus of up to  70%
                             of annual base salary in accordance with  ASC bonus
                             plan.  Employee will not be eligible to participate
                             in the bonus plan for FY '00 (which is  payable  in
                             FY '01)

Stock Options:           400,000  shares  of  incentive  stock options under the
                         Company's incentive  stock  option plan will be granted
                         on employment start date with a strike price calculated
                         based  on  ASC's  shares  average price for the 4 weeks
                         preceding April 28,2000, plus a 10% premium. This grant
                         will vest on a 4 year vesting  schedule, (25% per year)
                         beginning on the first anniversary of  the  grant date,
                         provided, however,  that no options will be exercisable
                         for  two  years  following  the  grant  date. All other
                         grants will  have amounts,  strike  price  and  vesting
                         schedule according to the terms set by the Compensation
                         Committee.

Severance:               During   the  first   three years of employment, in the
                         event    of   involuntary   termination  of  employment
                         by  the   Company   without cause or as a  result  of a
                         change   in    control   of American   Skiing  Company,
                         severance  will  be paid in an  amount   equal  to  one
                         year's base compensation.

Benefits:                   1)  Vacation Benefits and Moving
                                a) Employee will be reimbursed for up to $25,000
                                   of relocation  expenses  in  connection  with
                                   commencement of employment
                                b) Employee  will be eligible for four (4) weeks
                                   annual vacation
                                c) Employee will be  eligible for  participation
                                   in Company health and 401k programs,  subject
                                   to applicable waiting periods
                                d) Company  will  pay  up to $11,118 per year of
                                   premiums   for    employee's   existing  life
                                   insurance and disability  policies.  Employee
                                   will be  responsible  for  any  resulting tax
                                   liability.

Location:                Employee will divide  time  between  Company's  eastern
                         and  western  resorts (estimated in 50/50 of the time).
                         Company will provide  employee with the vehicle benefit
                         extended to Company Executives.  For the first 6 months
                         of  employment:   ASC  to  provide  a $2,000  per month
                         housing  allowance  for  housing   in   Bethel  and  an
                         apartment  in  the  GSH at the  Canyons. In addition, a
                         vehicle in  each  location.  After the  first 6 months:
                         Employee will pay for his housing and car costs  at the
                         location of his preference.  ASC to pay for housing and
                         car at the other.

/s/Leslie B. Otten                              /s/Hernan Martinez
---------------------------                     --------------------------------
Leslie B. Otten                                 Hernan Martinez
President
American Skiing Company
Resort Properties, Inc.

Date:_______________________                    Date:___________________________FIRST AMENDMENT TO THE MASTER DISPOSITION AND DEVELOPMENT AGREEMENT

         This First Amendment to Master  Disposition  and Development  Agreement
("First  Amendment") is entered into as of this 18th day of April,  2000, by and
among the South Tahoe Redevelopment Agency, a public body, corporate and politic
("Agency"),  the City of South Lake Tahoe, a municipal  corporation ("City") and
American Skiing Company Resort Properties,  Inc., a Maine corporation ("ASCRP"),
Heavenly Valley,  LLC, a Nevada limited liability company  ("Heavenly  Valley"),
Trans-Sierra  Investments,  a Nevada  Corporation  ("TSI"),  and Cecil's Market,
Inc.,  a  California  corporation  ("Cecil's  Market"),  (collectively,   ASCRP,
Heavenly Resort Properties,  Heavenly Valley, TSI and Cecil's Market, Inc. shall
be referred to as the  "Developers").  This First  Amendment  amends that Master
Disposition  and  Development  Agreement  executed  on  October  28,  1999  (the
"Agreement").

                                    RECITALS

         A. The Agency,  the  City and  the  Developers  entered into the Master
Disposition and Development Agreement on October 28,1999. The Agreement provides
for the development of an  approximately  17 acres  parcel located  in the South
Lake Tahoe Redevelopment Project  No. 1 with a Gondola, Hotel Resort, and retail
uses.

         B. The  parties to the  Agreement now desire to  amend the Agreement in
accordance with the terms of this First Amendment.

         NOW,  THEREFORE,  in  consideration  of the  covenants  and  conditions
contained herein, the Agency and the Developers hereby agree as follows:

         1. Letter of Credit.  Section  2.01(b)(3) of  the  Agreement  is hereby
amended in its entirety to read as follows:

            (3) The existing letter of credit posted by American Skiing  Company
which currently  expires on May 1, 2000, must be extended or replaced with a new
letter of  credit  which  expires  no earlier than July 10.  2000.  In addition,
Heavenly   Resort  Properties   must  deliver   to  the  Agency  fully  executed
construction  contracts  for the Grand Summit Hotel on or before April 28, 2000.
IF neither of these conditions is not met, Agency  shall draw upon the  existing
letter of  credit to  pay costs  associated  with the acquisition of the Phase 1
Development Site.

                The extended  letter of credit shall provide that the Agency may
draw upon the letter of credit to pay costs associated with the  acquisition  of
the Phase 1 Development  Site in the  event Heavenly Resort  Properties fails to
deliver to the Agency a Final Public Report from  the Department of Real Estate,
evidence  of  irrevocable  financing  as further  described in  Section 8.01 (a)
below,  and  payment and  performance  bonds for  the construction  of the Grand
Summit Hotel on or before June 30, 2000. In the event  the  Agency  draws on the
letter of credit  because  Heavenly  Resort  Properties fails to deliver a Final
Public  Report  from the  Department  of Real  Estate, evidence  of  irrevocable
financing  as  further  described  in  Section  8.01(a)  below,  or  payment and
performance  bonds for the construction of the  Grand  Summit Hotel on or before
June 30, 2000, but Heavenly  Resort  Properties  delivers a Final Public  Report
from the  Department  of Real  Estate,  evidence  of  irrevocable  financing  as
further described in Section 8.01(a) below, and  payment  and performance  bonds
for the  construction of the Grand Summit Hotel on or before September 15, 2000,
the Agency shall reimburse  Heavenly Resort  Properties,  or  the party  posting
the letter of credit,  the amount drawn down on the letter of credit at the time
that  Heavenly  Resort Properties  does not  deliver a Final Public  Report from
the  Department  of Real  Estate,  evidence  of irrevocable financing as further
described  in Section  8.01(a) below,  and  payment  performance  bonds  for the
construction  of  the  Grand  Summit  Hotel on or before September 15, 2000, the
Agency shall have no obligation to repay any funds drawn on the letter of credit
to the party  posting  the letter of credit and this  Agreement  shall terminate
with rspect to Heavenly  Resort  Properties  pursuant to Section 12.05 and 12.06
and the Agency shall be entitled to any remedies  pursuant to Sections 12.05 and
12.06.

                                       1
<PAGE>

                In  the event Heavenly Resort Properties delivers a Final Public
Report from the Department of Real Estate, evidence of irrevocable  financing as
further  described in Section  8.01(a) below, and payment and performance  bonds
for the construction of the Grand Summit Hotel on or before June 30, 2000,  then
at the same  time of such  delivery,  the amount of  the letter of credit may be
reduced to Three Hundred Thousand Dollars  ($300,000) or a  separate  letter  of
credit  can  be  posted  as  security  for  Phase  2 construction.  The $300,000
letter  of  credit  may  be  drawn  upon  by  the agency to pay Development Site
acquisition costs,  maintenance and  holding costs  associated with the Agency's
ownership of the Phase 2 Development Site, lost tax revenues to the City and the
Agency resulting from the removal from the Development Site of the  improvements
currently on the Development Site and the payment of interest on the BANS in the
event ASCRP fails to perform  any conditions of  this Agreement.  The  letter of
credit may be released completely at such times as performance and payment bonds
are posted for the full amount of the construction contract for Phase 2.

         2.     Phase 2 Acquisitions. Section 3.01(e) is amended in its entirety
to read as follows:

                Phase 2  Acquisitions.    The  agency   shall   not   begin  the
acquisition  of the  Phase 2  Development  Site  until  such  time as ASCRP  has
provided the Agency with a notice in writing of its intent to construct Phase 2;
provided  however,  the Agency may proceed with the  acquisition of the property
occupied  by the Red  Carpet  Inn  immediately  upon  execution  of  this  First
Amendment. ASCRP must give a notice of intent to construct Phase 2 no later than
September 1, 2001; provided,  however, if ASCRP desires to begin construction of
Phase 2 during  the year 2001  building  season,  ASCRP  must give the  agency a
notice of intent  to build on or  before  September  1,  2001,  the  Agency  may
terminate this Agreement pursuant to Section 12.05 and exercise any remedies the
Agency may have pursuant to Article 12,  unless on or before  September 1, 2001,
ASCRP delivers to the Agency a letter of credit meeting all of the  requirements
set forth in  Section  2.01  (b)(1)  and (2) in the  amount of One  Million  Six
Hundred Sixty-Three Thousand Dollars  ($1,663,000).  The letter of credit may be
drawn on by the Agency to cover costs  associated with Phase 2 Site  Acquisition
at any time after the Letter of Credit is posted.

         3.     Demolition.  Section 5.01(d) is hereby  amended in its  entirety
to read as follows:

                Demolition  of  Existing  Improvements.  The  Agency  shall have
demolished and removed any improvements,  structures or debris currently located
in Phase 1 Development Site and shall have placed the property in a condition to
begin construction; provided, however, prior to demolition of the portion of the
Lake Tahoe Inn in the Phase 1  Development  Site,  ASCRP shall have  granted the
Agency a right of entry to the Lake Tahoe Inn,  including  the right to demolish
the improvements  located on the Phase 1 Development Site, provided further, the
Agency and the Developers  agree that the Agency shall not demolish the building
housing Bandana's Pizza prior to the Closing.  In the event the Agency is unable
to deliver the Phase 1  Development  Site to Heavenly  Valley,  Heavenly  Resort
Properties  and TSI in the time set forth in the  Schedule of  Performance  as a
result  of delays  related  to the  demolition  of  improvements  on the Phase 1
Development  Site, the Agency shall pay to the  Developers any costs  associated
with such a delay,  including  costs related to maintaining the Letter of Credit
required  pursuant to Section  2.01(b)  and costs  associated  with  keeping the
construction contract in effect.

                At the  close of escrow,  the  Agency and  Heavenly  Valley L.P.
shall enter into a lease whereby the Agency will lease from Heavenly  Valley the
portion of the property  upon which the Bandanas  Pizza  restaurant  building is
located  ("Bandanas  Pizza Site").  The lease shall provide that the Agency will
rent the Bandanas  Pizza Site free of charge until such time as Heavenly  Valley
provides  the Agency with a thirty day notice to vacate,  which notice shall not
be given before September 1, 2000. If the Agency subleases the property,  Agency
shall  indemnify  and hold Heavenly  Valley  harmless from any and all liability
arising  therefrom and shall take all steps necessary to terminate any tenancies
in a timely fashion. Upon vacation of the Bandanas Pizza Site by the Agency, the
Agency shall be  responsible  for the  demolition of the Bandanas Pizza building
within sixty (60) days of receipt of a written notice from Heavenly  Valley that
the building is ready for demolition.

                                       2
<PAGE>

         4.     Conditions Precedent to Transfer of Phase 1 Development  Site to
Developers.  Subsections (e) and (I) of section 5.01 are hereby deleted in their
entirety.

         5.     Construction of  Public Improvements.  Section 5.01(f) is hereby
amended in its entirety to read as follows:

                Contracts for Public Improvements.  The Agency  shall have taken
all steps necessary to award  contracts for the realignment of Park  Avenue, the
relocation  of  utilities  located  under  Park  Avenue  and Van Sickle, and the
construction of a right turn lane on  U.S. Highway50  between  Pioneer Trail and
Park Avenue.

         6.     Evidence of Financing. Section 6.01(e) is hereby  amended in its
to read as follows:

                (e) Evidence of Financing. Heavenly Valley and TSI have provided
the Agency with evidence satisfactory to the Agency in its Reasonable Discretion
of a binding  construction  loan or other financing  commitment for the  Gondola
and the Ice Rink in an amount sufficient to construct  the   Gondola and the Ice
Rink in  accordance  with the  Financing  Plan.  In  addition,  Heavenly  Valley
shall  provide  the  Agency  with  evidence  satisfactory  to  the Agency in its
Reasonable  Discretion  that  the  terms  of  the  agreement for the purchase of
Gondola equipment  have been fully  met and  the purchase  agreement is still in
full force and effect.

         7.     Developers'  Conditions  Precedent  to  Transfer  of Development
Site.  Subsection (g) of Section 6.01 is deleted in its entirety.

         8.     Performance  and  Payment  Bonds.   Section  6.01(k)  is  hereby
amended to delete all references to Heavenly Resort Properties.

         9.     Section  8.01  through  8.18 are renumbered as 8.02 through 8.19
consecutively and a new Section 8.01 is added in its entirety below:

                8.01  Commencement  of  Construction.   No  construction   shall
commence on the Grand Summit Hotel or the Grand  Summit Annex and no liens shall
be  placed  on  Lots 5, 8, and 9  of the  Phase 1  Development  Site  until  the
following  three  conditions have been met by Heavenly Resort Properties:

                      (a) Evidence  of  Financing.   Heavenly Resort  Properties
shall have provided the  Agency with evidence  satisfactory to the Agency in its
Reasonable  Discretion  of  a  binding  construction  loan  or  other  financing
commitments for the Grand  Summit Hotel  and the Grand Summit Annex in an amount
sufficient  to construct  the  Grand  Summit Hotel and the Grand Summit Annex in
accordance with the Financing Plan.

                      (b) Department  of  Real Estate Approval.  Heavenly Resort
Properties shall provide the Agency with  evidence of  receipt of a Final Public
Report from the California Department of Real Estate.

                      (c) Performance  and   Payment  Bonds.   Heavenly   Resort
Properties shall deliver to the Agency performance and payment bonds in form and
substance  reasonably  satisfactory  to  the  Agency  in  the full amount of the
construction contract. The performance and payment shall name  the Agency as the
co-obligee.

                      Said  bonds should be issued by an insurance company which
is  licensed  to  do  business  in  California  and named in the current list of
"Surety  Companies  Acceptable on  Federal Bonds" as  published  in  the Federal
Register by the Audit Staff Bureau of Accounts, U.S. Treasury Department and for
amounts which are not in excess of the acceptable  amount set forth on such list
for the respective surety. The insurance company shall have a rating  equivalent
to a Best rating of A of FSC rating of 9.

         10.    Commencement  of  Construction.  The  first  sentence of Section
8.01,  now renumbered as 8.02, is amended in its entirety to read as follows:

                                       3
<PAGE>

                8.02  Commencement of Construction.   Heavenly  Valley  L.P. and
TSI  shall  commence  or  cause to be commenced  construction  of Phase 1 of the
Project  within thirty (30)  days  of  close  of  escrow  for  their  respective
portions  of the Phase 1 Development Site, and Heavenly Resort  Properties shall
commence or cause to be commenced  construction  of the Grand  Summit  Hotel and
the Grand  Summit Annex  within 30 days of satisfying the  conditions  precedent
to the  commencement  of  construction  in  Section  8.01(a), (b) and (c) above;
provided, however, if Escrow  for the  Phase 1  Development  Site does not close
prior to July 1, 2000, as a result of delays  that are not  within  the  control
of the  Developers,  the  Developers  may  delay  commencement  of  construction
until the year 2001 building season without being in default of this Agreement.

         11.   Use of Paul Kennedy Steakhouse Site. Section 8.16, now renumbered
as 8.17, is amended in its entirety to read as follows:

               Use  of  Paul  Kennedy  Steakhouse Site.  During  construction of
Phase 1,  Cecil's  Market,  Inc.,  shall  be  entitled  to use the Paul  Kennedy
Steakhouse Site for retail use.  Cecil's Market Inc. may also lease out the Paul
Kennedy  Steakhouse  Site as long as the Agency approves the lease and the lease
contains provisions acceptable to the Agency such that the lease does not create
any new obligations to the Agency regarding  relocation or loss of goodwill upon
the Agency acquisition of the Paul Kennedy Steakhouse Site.

         12.   Construction Manager.  A new paragraph is hereby added at the end
of Section 9.01 to read as follows:

               In   the   event  there  will   be  multiple   contracts  working
simultaneously  at or near the Phase 1 Development  Site, the Agency shall enter
into a contract with a construction manager acceptable to both the Developer and
the  Agency  which   provides  for  the   construction   manager  to  coordinate
construction  of  the  Public   Improvements   with  the   construction  of  the
Development.

         13.   Mello-Roos  District.  Section 9.05(a) is amended in its entirety
to read as follows:

               (a) No  later  than  March 1,  2001,  Agency  shall  cause to  be
formed,  and  the  Developers  will  facilitate  the  formation  of, a community
facilities  district  pursuant  to  the  Mello-Roos  Community  Facilities   Act
(California  Government  Code  Section  5334  and  following)  (the  "Mello-Roos
District") to encompass the  Phase 1 Property  which   will  levy  a  Mello-Roos
Special  Tax in  accordance  with this Section 9.05.

               The first sentence of Section 9.05(f) is amended in its  entirety
to read as follows:

               (f) The  Mello-Roos  Bonds shall be issued no later than April 1,
2001 provided the following conditions are met:

         14.   Exhibits.  Exhibit  G,  the  Schedule  of Performance,  is hereby
replaced in its entirety with the Schedule of  Performance  attached  hereto and
incorporated herein.

         15.   Effect of Amendment. This amendment  shall be effective as of the
effective date of the Agreement. Unless otherwise amended herein, all provisions
of this  Agreement  shall  continue in full force and effect.  In the event of a
conflict  between this First  Amendment and the Agreement,  this First Amendment
shall  control.  All defined terms not otherwise  defined  herein shall have the
meaning given in this agreement.

         AS OF  THE  DATE  FIRST  WRITTEN  ABOVE,  the  Parties  evidence  their
agreement to the terms of this Agreement by signing below:

                                       4
<PAGE>

Approved As To Form:                        AGENCY:

By:___________________                      SOUTH TAHOE REDEVELOPMENT AGENCY,
     Agency Counsel                         a public body, corporate and politic

                                            By:/s/Hal Cole
                                               ---------------------------------
                                            Its:________________________________

                                            Dated:______________________________

Approved As To Form:                        CITY:

By:____________________                     CITY OF SOUTH LAKE TAHOE,
     City Attorney                          a municipal corporation

                                            By:/s/Tom Davis
                                               ---------------------------------
                                            Its:________________________________

                                            Dated:______________________________

Approved As To Form:                        DEVELOPER:

By:/s/Lewis Feldman                         AMERICAN SKIING COMPANY RESORT
   --------------------                     PROPERTIES, a Maine corporation
      Lewis Feldman
      Attorney for Devlopers
                                            By:/s/Stan Hansen
                                               ---------------------------------
                                            Its:  Senior Vice President Western
                                                  Region
                                            Dated:4/26/2000

                                            HEAVENLY RESORT PROPERTIES, LLC,
                                            a Nevada limited liability company

                                            By:/s/Stan Hansen
                                               ---------------------------------
                                            Its:  Senior Vice President Western
                                                  Region
                                            Dated:4/26/2000

                                            HEAVENLY VALLEY,Limited Partnership,
                                            a Nevada limited Partnership

                                            By:/s/Dennis J. Harmon
                                               ---------------------------------
                                            Its:  President

                                            Dated:4/26/00

                                            TRANS-SIERRA INVESTMENTS,
                                            a Nevada corporation

                                            By:/s/Gary B. Casteel
                                               ---------------------------------
                                            Its:  President

                                            Dated:April 26,00

                                            CECIL'S MARKET, INC.,
                                            a California corporation

                                            By:/s/John Jovicich
                                               ---------------------------------
                                            Its:  President

                                            Dated:4/26/00

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