Document:

AGREEMENT FOR PURCHASE AND SALE

                                       OF

                                 REAL PROPERTY

                                    BETWEEN

                              TRIMONT LAND COMPANY

                                      AND

                          TRIMONT LAND HOLDINGS, INC.

                               September 22, 2000

<PAGE>

                               TABLE OF CONTENTS

                               -----------------

                                                                           Page

                                                                          ----

ARTICLE I         DEFINITIONS...............................................1

      Section 1.1.      Closing Date........................................1

      Section 1.2.      Contract Obligations................................1

      Section 1.4.      Density.............................................2

      Section 1.5.      Hazardous Substances, Environmental Laws............2

      Section 1.6.      Improvements........................................2

      Section 1.7.      Land................................................3

      Section 1.8.      Laws and Restrictions...............................3

      Section 1.9.      Master Development Plan.............................3

      Section 1.10.     NEWCO...............................................3

      Section 1.11.     Personal Property...................................4

      Section 1.12.     Property............................................4

      Section 1.13.     Title Company.......................................4

      Section 1.14.     Title Report........................................4

      Section 1.15.     Unit................................................4

      Section 1.16.     Water Rights........................................4

ARTICLE II        PURCHASE AND SALE OF THE PROPERTY.........................4

      Section 2.1.      Purchase and Sale...................................4

      Section 2.2.      Purchase Price; Subsequent Closings.................4

ARTICLE III       CONDITIONS TO AGREEMENT...................................6

      Section 3.1.      Buyer's Conditions Precedent........................6

      Section 3.2.      Seller's Conditions Precedent.......................6

      Section 3.3.      Waiver..............................................6
<PAGE>

ARTICLE IV        REPRESENTATIONS AND WARRANTIES  COVENANTS AND
                  INDEMNIFICATIONS..........................................6

      Section 4.1.      Seller's Express Representations and
                        Warranties..........................................6

      Section 4.2.      As Is...............................................7

      Section 4.3.      Breaches of Representations/Warranties and
                        Covenants.  ........................................8

      Section 4.4.      Indemnification.....................................8

      Section 4.5.      Buyer's Representations.............................8

ARTICLE V         TITLE, ESCROW AND CLOSING.................................9

      Section 5.1.      Conditions of Title.................................9

      Section 5.2.      Title Insurance.....................................9

      Section 5.3.      Closing Date........................................9

      Section 5.4.      Deposits and Deliveries by Seller..................10

      Section 5.5.      Deposits and Deliveries by Buyer...................10

      Section 5.6.      Closing............................................11

      Section 5.7.      Prorations.........................................11

      Section 5.8.      Closing Costs......................................12

      Section 5.9.      Possession.........................................12

      Section 5.10.     Filing of Reports..................................12

ARTICLE VI        [INTENTIONALLY DELETED PRIOR TO EXECUTION]...............13

ARTICLE VII       DAMAGE AND DESTRUCTION, CONDEMNATION.....................13

      Section 7.1.      Damage and Destruction.............................13

      Section 7.2.      Condemnation.......................................13

ARTICLE VIII      COMMISSIONS..............................................13

      Section 8.1.      Brokerage Commission and Finder's Fee..............13

ARTICLE IX        PARKING; IMPROVEMENTS....................................14
<PAGE>

      Section 9.1.      Ski Resort Parking.................................14

      Section 9.2.      Improvements.......................................14

      The provisions of this Article IX shall survive the closing..........14

ARTICLE X         GENERAL PROVISIONS.......................................15

      Section 10.1.     Notices............................................15

      Section 10.2.     Agreement, No Modifications........................15

      Section 10.3.     Time...............................................16

      Section 10.4.     Attorneys' Fees....................................16

      Section 10.5.     Relationship.......................................16

      Section 10.6.     No Merger..........................................16

      Section 10.7.     Successors and Assigns.............................16

      Section 10.8.     Further Assurances.................................16

      Section 10.9.     Counterparts.......................................17

      Section 10.10.    Construction.......................................17

      Section 10.11.    Seller's Inability.................................17

      Section 10.12.    Exculpation........................................18

      Section 10.13.    Miscellaneous......................................18

<PAGE>

                        AGREEMENT FOR PURCHASE AND SALE

                        -------------------------------

                                       OF

                                       --

                                 REAL PROPERTY

                                 -------------
                                   (TLH/TLC)

          THIS   AGREEMENT   FOR  PURCHASE  AND  SALE  OF  REAL  PROPERTY  (the
"AGREEMENT") is made and entered into as of the 22nd day of September,  2000 by
and between  TRIMONT LAND COMPANY,  a California  corporation  ("SELLER"),  and
TRIMONT LAND HOLDINGS, INC., a Delaware corporation ("BUYER").

                                    RECITALS

                                    --------

          A. Seller owns approximately 8000 acres of land in Placer County,
California in a ski area development known as Northstar-at-Tahoe ("NORTHSTAR").

          B. Within  Northstar  are several  parcels of land which are suitable
for the construction of approximately  1,800  multifamily  units, and which are
contemplated to be developed in accordance with the Master Development Plan (as
defined in Section 1.9 below, the  "DEVELOPMENT"),  the basic locations of such
parcels being depicted on Exhibit A attached hereto and made a part hereof.

          C. Buyer is desirous of purchasing said parcels from Seller.

                                   ARTICLE I

                                  DEFINITIONS

                                  -----------

          Unless the context otherwise specifies or requires,  for the purposes
of this Agreement the following terms shall have the meanings set forth in this
Article 1:

          Section 1.1. Closing Date. The term "CLOSING DATE" or "CLOSING" shall
mean the date  scheduled  pursuant  to the  provisions  of Section  5.3 for the
delivery  of the Deed (as  defined in Section 5.1 below) and the payment of the
Purchase  Price (as defined in Section  2.2  below).  If there is more than one
closing as contemplated by Section 2.2(c) hereof  ("MULTIPLE  CLOSINGS"),  then
the terms "CLOSING DATE" or "CLOSING" shall refer to the closing  applicable to
the portion of the Property  being  conveyed at a particular  time and the term
"PURCHASE PRICE" shall refer to the portion of the Purchase Price applicable to
such portion of the  Property  being  conveyed  pursuant to and as specified in
Section  2.2(c)  hereof.  The term "INITIAL  CLOSING"  shall refer to the first
Closing  that a conveyance  of all or any portion of the Property  occurs or is
scheduled to occur pursuant to the provisions of this Agreement.

          Section 1.2. Contract  Obligations.  The term "CONTRACT  OBLIGATIONS"
shall mean  those  contracts,  agreements  and  obligations,  whether or not in
writing,  which will be  assigned  by Seller to Buyer on the  Closing  Date and
which  Buyer  will  assume  from and after the  Closing  Date,  pursuant  to an
assignment and assumption agreement (the "OBLIGATIONS ASSUMPTION AGREEMENT") in
<PAGE>

the form attached  hereto and made a part hereof as Exhibit B, all of which are
listed in Exhibit C to this Agreement.

          Section 1.3. [Intentionally deleted prior to execution.]

          Section 1.4.  Density.  The term  "DENSITY"  shall mean the number of
Units and all  commercial  and other  non-residential  development  that can be
developed as of the date hereof as of right pursuant to existing  zoning and/or
existing  governmental  approvals  or  approved  plans  (collectively,  "Zoning
Approvals")  affecting the Property.  The term "Density" shall also include all
Zoning  Approvals  applicable to Northstar that are provided for in Conditional
Use Permit  No.  LDA-674  dated  March 5, 1971 of the  Placer  County  Planning
Department.

          Section  1.5.  Hazardous  Substances,  Environmental  Laws.  The term
"HAZARDOUS SUBSTANCES" shall mean and include any chemical, compound, material,
mixture,  waste or substance that is now or hereafter  defined or listed in, or
otherwise  classified pursuant to, any Environmental Laws (as defined below) as
a "HAZARDOUS  SUBSTANCE,"  "HAZARDOUS  MATERIAL," "HAZARDOUS WASTE," "EXTREMELY
HAZARDOUS WASTE,"  "INFECTIOUS  WASTE," "TOXIC SUBSTANCE," "TOXIC POLLUTANT" or
any other  formulation  intended to define or classify  substances by reason of
deleterious   properties  such  as   ignitability,   corrosivity,   reactivity,
carcinogenicity or toxicity,  including any petroleum, natural gas, natural gas
liquids,  liquefied natural gas or synthetic gas usable for fuel (or mixture of
natural gas and such  synthetic  gas).  "HAZARDOUS  SUBSTANCES"  shall include,
without limitation, any hazardous or toxic substance, material or waste, or any
chemical,  compound or mixture  which is (i)  asbestos,  (ii)  designated  as a
"HAZARDOUS  SUBSTANCE"  pursuant to Section 1317 of the Federal Water Pollution
Control Act (33 U.S.C.  Section  1251 et seq.),  (iii)  defined as a "HAZARDOUS
WASTE"  pursuant  to Section  6903 of the  Federal  Resource  Conservation  and
Recovery  Act (42 U. S.C.  Section 6901 et seq.),  (iv)  defined as  "HAZARDOUS
SUBSTANCES"  pursuant  to  Section  9601  of  the  Comprehensive  Environmental
Response, Compensation and Liability Act, (42 U. S.C. Section 9601 et seq.) (v)
listed in the United States Department of Transportation Table (49 CFR 172.101)
or by the Environmental  Protection Agency as hazardous substances (40 CFR part
302),  (vi) in any laws and  regulations  of the State of California and Placer
County,  California,  and in any and all amendments thereto in effect as of the
Closing Date, and (vii) any such chemicals,  compounds,  mixtures,  substances,
materials or wastes otherwise  regulated under any applicable  local,  state or
federal  Environmental  Laws.   Notwithstanding   anything  contained  in  this
Agreement  to the  contrary,  for  purposes  of  this  Agreement,  a  chemical,
compound, material, mixture, waste or substance shall not be considered to be a
"HAZARDOUS  SUBSTANCE" unless it exists in such quantities or is used in such a
manner  so as to be in  violation  of the  Environmental  Laws (as  hereinafter
defined).  The  term  "ENVIRNMENTAL  LAWS"  shall  mean  any and all  presently
existing  federal,  state and local laws  (whether  under common law,  statute,
rule, regulation or otherwise),  requirements under permits issued with respect
thereto,  and other  requirements of any federal,  state or local  governmental
agency,  court,  board,  bureau or other  authority  having  jurisdiction  with
respect to or relating to the environment, to any Hazardous Substance or to any
activity involving Hazardous Substances, and shall include, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act (42 U.
S.C. Section 9601, et seq.) and the Federal Resource  Conservation and Recovery
Act (42 U. S.C. Section 6901, et seq.), and all amendments thereto in effect as
of the Closing Date.

          Section 1.6. Improvements. The term "IMPROVEMENTS" shall mean all
improvements and fixtures now or hereafter located on the Land.
<PAGE>

          Section  1.7.  Land.  Subject  to  all  of  the  provisions  of  this
Agreement,  the term  "LAND"  shall mean the real  property  in Placer  County,
California,  described in Exhibit A to this  Agreement (i) as parcels A, B, 16,
17,  18,  19A,  20, 21,  22,  23,  27A and those  portions  of parcel 27B shown
cross-hatched on Exhibit A ("Parcel 27B"),  (ii) all of Seller's  equitable and
beneficial ownership interest in and to parcel 26, other than the equitable and
beneficial  ownership  interest in and to the real property which is identified
as Northstar unit 7A (lots 19-33) on the plat prepared by Auerbach  Engineering
Group  (the "AEG  Plat")  dated  October,  1999,  ("UNIT 7A  PROPERTY"),  which
equitable and beneficial  ownership in the Unit 7A Property shall remain vested
in Seller,  (the portion of parcel 26 so being sold and conveyed to Buyer being
hereafter  referred to as the "Parcel 26  Interests",  (iii) those  portions of
parcel 15 shown  cross-hatched  on  Exhibit  A (the  "PARCEL  15  SUBDIVISION")
(expressly  reserving  to Seller all Density on parcel 15  associated  with the
contemplated  single  family  development  on the  portion  of  parcel 15 being
retained by Seller,  and (iv) those portions of parcel 29 shown crosshatched on
Exhibit  A (the  "Parcel  29  Subdivision")  (the  interests  described  in the
foregoing  clauses  (i),  (ii),  (iii) and (iv)  being  collectively  hereafter
referred to as the "PARCELS"), including, (except as otherwise set forth in the
definition  of the  term  "Property")  all  easements,  rights  of  way,  other
interests appurtenant thereto, all zoning, Density and development entitlements
relative thereto, (except as otherwise set forth in Section 10.13(c) hereof)and
all right,  title and interest of Seller in and to any land lying in the bed of
any street, road, highway or avenue, open or proposed, in front of, adjacent to
or adjoining such real property as set forth in the Master Development Plan.

            Parcels A, B, 16, 17, 19A, 20, 21, 22, 23, the Parcel 26 Interests,
the Beneficial 15 Interest (as such term is hereafter defined),  the Beneficial
18 Interest,  as such term is hereafter defined, and the Beneficial 29 Interest
(as such term is hereafter defined) are hereafter  collectively  referred to as
the  "INITIAL  SITE" and parcels 27A and 27B shall  hereafter  collectively  be
referred to as the "SECOND SITE".

          The terms  "BENEFICIAL  15  INTEREST",  "BENEFICIAL  18 INTEREST" and
"BENEFICIAL 29 INTEREST" shall mean  respectively,  all of Seller's  beneficial
and equitable  right,  title and interest in and to the Parcel 15  Subdivision,
parcel 18 and the Parcel 29 Subdivision,  respectively, such that following the
Closing Seller shall only retain bare legal title to the Parcel 15 Subdivision,
parcel 18 and the Parcel 29 Subdivision, respectively.

          Section 1.8. Laws and Restrictions.  The term "LAWS AND RESTRICTIONS"
shall mean all  applicable  federal,  state,  local and other  laws,  statutes,
regulations, codes, orders, ordinances and rules including, without limitation,
those  relating  to  fire,  safety,  land  use,  subdivision,   health,  labor,
environmental protection,  seismic design,  conservation,  parking, handicapped
access,  zoning and building,  and all  restrictive  covenants (if any),  other
title encumbrances,  all Environmental  Laws, all applicable  provisions of the
Fair Housing Act of 1968 and the Americans With  Disabilities  Act of 1990, and
all amendments thereto.

          Section 1.9. Master  Development  Plan. The term "MASTER  DEVELOPMENT
PLAN" shall refer to the master  development  plan that is annexed as Exhibit F
of the Operating Agreement of Newco.

          Section 1.10. NEWCO. NEWCO shall mean Northstar Mountain Properties,
LLC, the entity created by Buyer and East West Resort Development V, L.P.,
L.L.L.P., a Delaware limited liability partnership ("EWRD V") to own, develop
and operate the Property and other parcels.
<PAGE>

          Section 1.11.  Personal Property.  The term "PERSONAL PROPERTY" shall
mean those items of personal property, if any, listed in Exhibit E, attached to
and made a part of this Agreement.

          Section 1.12.  Property.  The term "PROPERTY" shall mean the Land but
excluding  all  Improvements  and  Water  Rights,  or,  if there  are  Multiple
Closings,  then if the context so requires,  the portion of the Property  being
conveyed at a particular  Closing.  The  Improvements,  together with all Water
Rights on or associated with the Land, shall remain the property of Seller.

Section 1.13. Title Company. The term "TITLE COMPANY" shall mean First American
Title Insurance Company, whose address for this transaction is as follows:

                  First American Title Insurance Company
                  228 East 45th Street
                  New York, New York 10017-3303
                  Attn:  Christopher Burdick, Esq.
                  Telephone No.:  (212) 850-0627
                  Fax No.:       (212) 331-1514

          Section 1.14.  Title Report.  The term "TITLE  REPORT" shall mean the
policy for title insurance with respect to the Land and  Improvements  dated as
of the date hereof issued by the Title  Company in connection  with the sale of
the Property contemplated by this Agreement.

          Section 1.15. Unit. The term "UNIT" shall mean one residential
housing unit, whether in a multi-family or single family building.

          Section 1.16.  Water Rights.  The term "WATER  RIGHTS" shall mean any
and all  water and water  rights,  ditches  and  ditch  rights,  reservoir  and
reservoir  rights,  wells and well rights,  springs and spring rights,  whether
surface   or   subsurface,   tributary   or   non-tributary,   adjudicated   or
unadjudicated, used on or in connection with the Land.

                                   ARTICLE II

                       PURCHASE AND SALE OF THE PROPERTY

                       ---------------------------------

          Section 2.1. Purchase and Sale. Seller agrees to sell the Property to
Buyer,  and Buyer agrees to purchase the  Property  from Seller,  on all of the
terms, covenants and conditions set forth in this Agreement.

          Section 2.2.  Purchase  Price;  Subsequent  Closings.  Subject to the
provisions  of Section  2.1(c) of this  Agreement,  the purchase  price for the
Property (the  "Purchase  Price") shall be  $27,600,000  which,  subject to all
prorations and adjustments  provided in this Agreement,  shall be paid by Buyer
to Seller as follows:

               (a)  The  purchase   price  for  the  portion  of  the  Property
comprising  the  Initial  Site  shall  be the  sum  of  $21,000,000,  of  which
$17,850,000  shall be paid in cash at the Initial Closing and the balance shall
be paid by the  delivery  at the  Initial  Closing by Buyer to Seller of a note
(the "INITIAL NOTE") in the amount of $3,150,000 in the form attached hereto as
Exhibit F.

<PAGE>

               (b)  Subject  to  the  provisions  of  Section  2.1(c)  of  this
Agreement,  the purchase  price for the portion of the Property  comprising the
Second  Site  shall  be the sum of  $6,600,000  (the  "BASE  PRICE"),  of which
$5,610,000  shall be paid in cash at the  Closing  of the  Second  Site and the
balance  shall be paid by the delivery at said Closing by Buyer to Seller of an
amended and restated note (the "AMENDED AND RESTATED  NOTE"),  the sole purpose
of which shall be to increase the  principal  amount of the Initial Note by the
sum of $990,000.  Except for said increase in the principal amount,  all of the
other terms and conditions of the Initial Note shall remain unchanged.

               (c) In the event that the  Closing  of the Second  Site does not
occur on or before the first  anniversary of the date of this  Agreement,  then
the purchase price of the Second Site shall be the greater of the Base Price or
the Fair Market Value of the Second Site, in either event,  payable 85% in cash
and 15% by increasing  the amount of the Initial Note by said sum,  pursuant to
the Amended and  Restated  Note.  The parties  agree that the Fair Market Value
shall be determined by an appraisal prepared by Sno. engineering,  Inc. (or any
successor  thereto) or a similarly  experienced or other  reputable  appraiser,
such  appraisal  to be dated no  earlier  than  ninety  (90) days  prior to the
Closing of the Second Site.

               (d) The parties hereto  acknowledge  that the Second Site cannot
be conveyed by Seller to Buyer until the parcels comprising the Second Site are
subdivided in the manner  contemplated  by Exhibit L. Seller,  at its sole cost
and expense,  shall use all reasonable efforts to so subdivide said parcels. If
despite all reasonable  efforts,  Seller is unable to so subdivide said parcels
by the fifth  anniversary of the date of this  Agreement,  Seller shall have no
further  obligation  to convey the Second Site to Buyer.  Seller shall  deliver
notice to Buyer within ninety (90) days  following the date of the  subdivision
of the Second  Site,  which  notice  shall set forth a date for  closing of the
Second Site,  which date shall be no earlier than thirty (30) days and no later
than ninety (90) days from the date of such notice, provided,  however, that if
Seller delivers such notice prior to July 1, 2002,  Buyer shall have the right,
on notice to Seller,  to extend the  Closing  Date of the Second  Site until no
later than September 30, 2002.

               (e) Following the  subdivision as  contemplated by paragraph (d)
above,  Buyer shall have the right to  separate  the Closing of the Second Site
into two  closings,  one for parcel 27A and one for Parcel  27B.  The  purchase
price for parcel 27A shall be $2,632,500, and the purchase price for Parcel 27B
shall be  $3,967,500,  each payment 85% in cash and 15% pursuant to the Amended
and  Restated  Note,  as such  purchase  prices may be  increased  pursuant  to
paragraph  (c) above.  In such  event,  the  Initial  Note shall be amended and
restated  twice, to reflect the  incremental  increase in the principal  amount
thereof as the result of there being two, and not one,  subsequent  closings as
contemplated under paragraph (b) above.

               (f)  Simultaneously  with the  conveyance to Buyer of parcel 27A
and Parcel  27B,  the Net Lease shall be amended so as to include in the Leased
Premises  (as such term is defined in the Net Lease) the portions of parcel 27A
and Parcel 27B shown  crosshatched  on Exhibit M, together with such additional
land surrounding such crosshatched  portions so that the portions of parcel 27A
and Parcel 27B that are to become  part of the Leased  Premises  shall  consist
solely of one or more legally  conveyable  parcels  (hereinafter,  collectively
"PARCEL P"). The release provisions of the Net Lease shall also be amended such
that the  provisions  governing the release of Parcel P shall be  substantially
<PAGE>

similar to the release provisions  governing the portion of the Leased Premises
as of the date  hereof  that do not  contain  AEG  Parcel  16 (as such  term is
defined in the Net Lease).  In the event Buyer elects to bifurcate the closings
as contemplated  under Section 2.2(e), the Net Lease shall be amended not once,
but twice, to reflect the additions of parcel 27A and Parcel 27B, respectively,
to the Leased Premises.

                                  ARTICLE III

                            CONDITIONS TO AGREEMENT

                            -----------------------

          Section 3.1.  Buyer's  Conditions  Precedent.  Buyer's  obligation to
purchase the Property or otherwise to perform any  obligation  provided in this
Agreement shall be conditioned expressly upon the satisfaction of the following
condition precedent:

          The due and timely  performance by Seller of each and every covenant,
undertaking  and agreement to be performed by Seller pursuant to this Agreement
at or prior  to  Closing  and the  truth,  accuracy  and  completeness  of each
representation and warranty made in this Agreement by Seller.

          Section 3.2. Seller's  Conditions  Precedent.  Seller's obligation to
sell the  Property  or  otherwise  to perform any  obligation  provided in this
Agreement shall be conditioned expressly upon the satisfaction of the following
conditions precedent:

          The due and timely  performance by Buyer of each and every  covenant,
undertaking  and agreement to be performed by Buyer  pursuant to this Agreement
at or prior to  Closing,  and the  truth,  accuracy  and  completeness  of each
representation  and warranty  made in this  Agreement  by Buyer,  the breach of
which would have a material adverse effect on Seller or the Property.

          Section  3.3.  Waiver.  At any time or times on or before the Closing
Date,  at Buyer's or  Seller's  election  as the case may be,  either  Buyer or
Seller may waive any of the foregoing  conditions  set forth in Sections 3.1 or
3.2  respectively,  by written  notice to the other.  Other  than  Buyer's  and
Seller's  consummation of the transaction  contemplated herein pursuant to this
Agreement which shall waive all such unfulfilled conditions, no waiver shall be
effective  unless  made in  writing  by the party  having  the  benefit  of the
condition,  specific as to the conditions or matters so waived.  No such waiver
shall be  inferred  or implied  by any act or  conduct  of Buyer or Seller,  or
reduce the rights or remedies of Buyer or Seller arising from any breach of any
undertaking, agreement, covenant, warranty or representation by the other party
under this Agreement.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

                         ------------------------------

                         COVENANTS AND INDEMNIFICATIONS

                         ------------------------------

          Section 4.1.  Seller's Express  Representations  and Warranties.  All
references in this  Agreement to the "ACTUAL  KNOWLEDGE",  "BEST  KNOWLEDGE" or
"KNOWLEDGE" of Seller shall refer to only the current  (i.e.,  upon the date of
this Agreement)  actual  knowledge of the Designated  Employees (as hereinafter
defined) of Seller or its  affiliates  and shall be based on the  understanding
<PAGE>

and  agreement  that  the  Designated  Employees  shall  be  under  no  duty to
undertake,  and shall not be deemed to have undertaken,  any  investigations or
inquiries  with  respect  to the  matters in  question.  For  purposes  of this
Agreement,  the term "Designated  Employees" shall refer to Tim Beck, Elizabeth
J. Cole, Christopher P. Ryman and Tim Silva.

          Seller  represents  and  warrants  to Buyer  that:  (a)  Seller  is a
corporation,  duly organized,  validly  existing and in good standing under the
laws of the State of California, with full corporate power and authority to own
and  operate  the  Property  and  perform  all of its  obligations  under  this
Agreement and any documents executed by Seller pursuant hereto;  Seller has the
full right and authority to enter into this  Agreement and consummate the sale,
transfer and assignment  contemplated by it. The person or persons signatory to
this  Agreement  on behalf of Seller  have  full  power and  authority  to bind
Seller;  the  execution  and  performance  by Seller of this  Agreement and any
documents  executed by Seller pursuant hereto shall not constitute or result in
a violation or breach by Seller of any  judgment,  order,  writ,  injunction or
decree issued or imposed upon Seller,  or result in a violation of any Laws and
Restrictions;  and no approval, consent, order,  authorization,  designation or
filing (other than recording),  except of a ministerial  nature, by or with any
judicial or governmental  authority,  is required in conjunction  with Seller's
execution of this Agreement and the performance of its  obligations  hereunder;
and

          (b) Seller is not a "foreign  person" as defined in Internal  Revenue
Code Section 1445 and any related regulations.

          Section 4.2. As Is. In addition to the covenants contained elsewhere
in this Agreement, it is hereby covenanted and agreed as follows:

               (a)  Buyer  represents  that,  as of  the  date  hereof,  it has
inspected  the  Property,  the uses  thereof and the  fixtures,  equipment  and
personal property,  if any, included in this sale to its satisfaction,  that it
has   independently   investigated,   analyzed  and  appraised  the  value  and
profitability  thereof,  that it has reviewed  and/or,  if requested,  received
copies  of and has  reviewed  the  leases,  service  contracts,  and all  other
documents  and/or  state of facts  affecting  the  Property  which  Buyer deems
relevant,  including, without limitation, any documents referred to herein with
respect  to the  Property,  that it is  thoroughly  acquainted  with all of the
foregoing and that it agrees to take title to the Property in "as is" condition
on the date  hereof,  reasonable  wear and tear between the date hereof and the
Closing Date excepted.  Buyer expressly  acknowledges that, except as expressly
provided herein,  Seller has not made any representations or warranties and has
held out no inducements to Buyer to execute this  Agreement.  Without  limiting
the generality of the foregoing, except as expressly provided herein, Buyer has
not relied on any  representations  or warranties,  and Seller has not made any
representations  or  warranties,  in either  case  express or implied as to any
thing or matter  relating to the  Property  or  otherwise,  including,  without
limitation,  with  respect  to (a)  the  current  or  future  real  estate  tax
liability,   assessment  or  valuation  of  the  Property;  (b)  the  potential
qualification  of the Property  for any and all benefits  conferred by federal,
state or  municipal  laws,  whether  for  subsidies,  special  real  estate tax
treatment,  insurance,  financing,  or any other  benefits,  whether similar or
dissimilar to those  enumerated;  (c) the  compliance  of the Property,  in its
current or any future state with applicable  zoning  ordinances and the ability
to obtain a variance in respect to the  Property  and  possible  non-compliance
with said zoning  ordinances;  (d) the  availability  of any  financing for the
purchase,  alteration,  rehabilitation  or operation  of the Property  from any
source,  including but not limited to state, city or federal governments or any
institutional  lenders;  (e) the current or future use of the  Property (f) the
<PAGE>

present and future  condition and  operating  state of any and all machinery or
equipment  on the Property  and the present or future  structural  and physical
condition  of  the  buildings  or  their  suitability  for   rehabilitation  or
renovation; (g) the ownership or state of title of any personal property on the
Property;  (h) the presence or absence of any rules or notices of violations of
law  issued  by any  governmental  authority,  including,  without  limitation,
building codes, fire codes and environmental  laws; (i) the presence or absence
of any pending or threatened action instituted by a tenant or occupant; (j) the
status of any tenancies or occupancies  at the Property  and/or the prospect of
continued  occupancy  by such  tenants or  occupants;  and (k) the  presence or
absence  of any lead  based  paint,  asbestos  or any  other  substance  deemed
hazardous  under any federal,  state or  municipal  laws on, under or about the
Property.

               (b) IN ADDITION, BUYER ACKNOWLEDGES RECEIPT OF COPIES OF THOSE
CERTAIN ENVIRONMENTAL SURVEY REPORTS DATED RESPECTIVELY (A) MARCH, 1993, CALLED
PHASE I ENVIRONMENTAL SITE ASSESSMENT BY SHB - AGRA, INC., (B) OCTOBER 6, 1993
PREPARED BY RAY C. HAMPSON AND ASSOCIATES, AND (C) OCTOBER, 1996 PREPARED BY
RAY C. HAMPSON & ASSOCIATES.

          Section 4.3.  Breaches of  Representations/Warranties  and Covenants.
Notwithstanding  anything  contained in this Agreement to the contrary,  (i) if
the Initial  Closing  occurs,  neither  party shall have any rights or remedies
resulting  from or arising out of a breach by the other of any  representation,
warranty or covenant made by the other, to the extent such non-breaching  party
had actual knowledge of any such breach prior to the Initial Closing,  and (ii)
no representation, warranty, covenant, undertaking or agreement shall be deemed
to have been breached by Seller,  and no  representation  or warranty of Seller
shall  be  deemed  to be  untrue,  inaccurate  or  incomplete,  unless  all the
breaches,  untruths,  inaccuracies  or  incompletenesses  on an aggregate basis
would have a material adverse effect on Buyer or the Property.

          Section 4.4. Indemnification.

               (a)  Seller's  Indemnity.  After the Closing,  Seller  agrees to
indemnify,  protect and defend Buyer  against and hold Buyer  harmless from any
and all claims,  demands,  liabilities,  losses,  damages,  costs and expenses,
including,   without  limitation,  all  reasonable  attorneys'  fees,  asserted
against,  incurred or suffered by Buyer  resulting from any personal  injury or
property  damage  occurring  in, on or about the  Property or relating  thereto
before the Closing Date from any cause whatsoever,  except actions or inactions
of Buyer, it's agents, employees and contractors.

               (b) Buyer's  Indemnity.  Buyer agrees to indemnify,  protect and
defend  Seller  against  and hold  Seller  harmless  from  any and all  claims,
demands,  liabilities,  losses, damages, costs and expenses, including, without
limitation,  all reasonable  attorneys'  fees,  asserted  against,  incurred or
suffered  by Seller  resulting  from any  personal  injury or  property  damage
occurring in, on or about the Property,  or relating  thereto,  on or after the
Closing Date from any cause  whatsoever  except for injury or damage  caused by
the action or inaction of Seller, its agents, employees and contractors.

          Section 4.5. Buyer's Representations. Buyer represents and warrants
to Seller that Buyer is a corporation, duly organized, validly existing and in
<PAGE>

good  standing  under the laws of the State of  Delaware,  with full  corporate
power and authority, and duly qualified to perform all of its obligations under
this Agreement and any documents  executed by Buyer pursuant hereto;  Buyer has
the full right and authority to enter into this  Agreement and  consummate  the
sale,  transfer  and  assignment  contemplated  by it.  The  person or  persons
signatory to this Agreement on behalf of Buyer have full power and authority to
bind Buyer;  the execution and  performance  by Buyer of this Agreement and any
documents executed by Buyer pursuant hereto shall not constitute or result in a
violation or breach by Buyer of any judgment, order, writ, injunction or decree
issued  or  imposed  upon  Buyer,  or  result  in a  violation  of any Laws and
Restrictions;  and no approval, consent, order,  authorization,  designation or
filing (other than recording),  except of a ministerial  nature, by or with any
judicial or  governmental  authority  is required in  conjunction  with Buyer's
execution of this Agreement and the performance of its obligations hereunder.

                                   ARTICLE V

                           TITLE, ESCROW AND CLOSING

                           -------------------------

          Section 5.1.  Conditions  of Title.  Seller shall convey title to the
Property in  accordance  with this  Agreement to Buyer upon the Closing Date by
good and  sufficient  Grant Deed in the form attached  hereto as Exhibit D (the
"DEED"),  subject to no exceptions other than the following (the "CONDITIONS OF
TITLE"):

               (a) The lien for local real estate taxes and assessments not yet
due or payable;

               (b) Those items set forth in Schedule B of the Title Report;

               (c) Liens  (other than deeds of trust and  mortgages),  provided
the Title Company  insures  Buyer  against the  collection of the same from the
Property; and

               (d) Those documents contemplated to be recorded pursuant to the
terms of this Agreement.

          Section 5.2.  Title  Insurance.  Buyer's  obligation  to purchase the
Property shall be subject to the irrevocable commitment of the Title Company to
issue,  upon  payment  of its  normal  premium  on the  close of  escrow of the
transaction  contemplated by this  Agreement,  its CLTA Owner's Policy of Title
Insurance  with  extended  coverage  (Form B, Rev.  10/17/70),  together with a
non-imputation  endorsement,  insuring Buyer in the full amount of the Purchase
Price that fee  simple  title to the Land and  Improvements  is vested in Buyer
subject only to the Conditions of Title in the current CLTA form.

          Section 5.3.  Closing Date.  Buyer and Seller shall cause the Closing
to occur at the  offices  of Loeb & Loeb LLP,  345 Park  Avenue,  New York,  NY
10154,  commencing at 10:00 a.m. on the Closing Date.  The Closing Date for the
Initial Closing shall be on the date of this Agreement,  provided, however, the
parties shall, in good faith, attempt to execute all documents at a pre-closing
on the day prior to the Closing Date. In addition to any rights to postpone the
<PAGE>

Closing  Date which  Seller may have  pursuant to any other  provision  of this
Agreement,  Seller  shall have the right to postpone  the  Closing  Date to any
business day which is not more than thirty (30) days  following  the date Buyer
is obligated to close pursuant to this Agreement.

          Section 5.4. Deposits and Deliveries by Seller. Seller shall deliver
or cause to be delivered on the Closing Date the following documents:

               (a) A duly executed and acknowledged Deed.

               (b) A duly executed and acknowledged Obligations Assumption
Agreement.

               (c) A duly executed and  acknowledged  Affidavit of  Non-Foreign
Status  (the  "NON-FOREIGN  AFFIDAVIT")  and Real Estate  Reporting  Transferor
Identification form.

               (d)  Evidence  acceptable  to the Title  Company and  reasonably
acceptable to Buyer's  counsel that the documents  delivered to Buyer by Seller
at closing have been duly authorized and duly executed by Seller.

               (e) A Closing Statement (hereinafter referred to as the "CLOSING
STATEMENT")  evidencing all prorations between Seller and Buyer and expenses of
the transaction contemplated herein which are disbursed on the Closing Date.

               (f) Such  affidavits  and other  documents as reasonably  may be
required  by the Title  Company  so as to enable  the Title  Company to furnish
Buyer with the owner's title  insurance  policy,  containing as exceptions only
the Conditions of Title.

               (g) A duly  executed  trademark  license  agreement  in the form
annexed hereto as Exhibit G (the "LICENSE AGREEMENT").

               (h) All other documents contemplated by this Agreement.

          Section 5.5. Deposits and Deliveries by Buyer. Buyer shall deliver or
cause to be delivered on the Closing Date, each of the following documents and
funds:

               (a) Federal wire transfer of immediately  available funds, to an
account designated by Seller, in the amount of the Purchase Price.

               (b) Evidence reasonably  acceptable to Seller's counsel that the
documents delivered to Seller by Buyer at closing have been duly authorized and
executed by Buyer.

               (c) A duly executed counterpart of the Closing Statement.

               (d) A duly executed Buyer's Affidavit and Agreement.

               (e) A duly executed and acknowledged Obligations Assumption
Agreement.

               (f) A duly executed copy of the License Agreement.
<PAGE>

               (g) All other documents contemplated by this Agreement.

          Section 5.6. Closing.  The transaction  contemplated  herein shall be
closed  when the Title  Company  is  irrevocably  committed  to issue the title
insurance  described in Section 5.2 above. The transaction  contemplated herein
shall be closed with the assistance of the Title Company, and the Title Company
shall:

               (a) Record the Deed and all other documents contemplated to be
recorded; and

               (b)  Issue to  Buyer  the  owner's  policy  of  title  insurance
described in Section 5.2 above.

          Section 5.7. Prorations.

               (a) Rents and other  income,  if any,  current  taxes,  service,
management, operating and maintenance expenses shall be prorated between Seller
and Buyer as of the Closing Date. Installments of taxes and assessments levied,
due and payable on or before the Closing  Date shall be paid in full by Seller.
Seller  shall be entitled to receive and retain all income with  respect to the
Property  and  shall be  obligated  to pay all  expenses  with  respect  to the
Property  for all time  periods  through  and  including  the date prior to the
Closing Date. Buyer shall be entitled to receive and retain all such income and
shall be obligated to pay all such expenses for all time periods  commencing on
or after the Closing  Date.  In the event that the 1999 and 2000 real  property
taxes and district  assessments  are not available as of the Closing Date,  the
proration shall be based upon the latest available information,  and Seller and
Buyer shall  effect a  reconciliation  between them within sixty days after the
actual amount of 1999 and 2000 taxes is available. Rent shall be prorated based
on the actual  number of days in the month  during  which the  Closing  occurs.
Income and  expenses  (other  than  property  taxes and  assessments)  shall be
prorated  on the basis of the cash  method of  accounting.  All rents and other
sums  received by Buyer on or after the Closing Date shall be applied  first to
rent and other  obligations  owing for the month  during which the Closing Date
occurs,  and  thereafter  to rent and other  obligations  then owing for months
after the month during which the Closing Date occurs,  and  thereafter  to rent
and other  obligations  owing for months  prior to the month  during  which the
Closing Date occurs,  then to Buyer's costs of  collection,  if any,  including
attorneys'  fees,  provided  that  Buyer  shall have no  obligation  to collect
delinquent  rents for Seller's  account.  There shall be no  proration  between
Seller and Buyer with respect to insurance  premiums,  as Buyer will obtain its
own insurance with respect to the Property.

               (b) All items  subject  to  proration  pertaining  to the period
prior to the Closing Date shall be credited or charged to Seller,  and all such
prorations  pertaining  to the period on or following the Closing Date shall be
credited  or charged to Buyer.  For  purposes  of this  paragraph,  installment
payments  of  assessments  (other  than the  normal  regularly  recurring  real
property taxes affecting the Property)  payable  following the Closing shall be
deemed to pertain to periods  following  the Closing Date  notwithstanding  the
fact that the assessment was imposed, or first became a lien, prior to Closing.
Seller and Buyer  shall  cooperate  to  produce as  complete  and  accurate  as
reasonably  possible  prior to the Closing Date a schedule of  prorations to be
made as of the Closing Date. All prorations which can be liquidated  accurately
<PAGE>

or  reasonably  estimated  as of the Closing  Date shall be made on the Closing
Date by Federal  wire  transfer to the Title  Company for  disbursement  by the
Title Company in accordance with the Closing  Statement.  All other prorations,
and  adjustments to initial  estimated  prorations,  shall be made by Buyer and
Seller with due diligence and cooperation  within 60 days following the Closing
Date, or such later time as may be required to obtain necessary information for
proration,  by cash  payment  to the  party  yielding  a net  credit  from such
prorations  from the other party.  Such cash  payment  shall be made within ten
business  days of demand for  payment  by the party  entitled  to receive  such
payment and, if not timely paid,  such amount due shall bear  interest from the
date due until the date of actual  payment at an  interest  rate of ten percent
(10%) per annum.

               (c)  Seller  shall  pay in full all  invoices,  bills  and other
obligations  for the  management,  operation,  servicing and maintenance of the
Property  pertaining  to the period prior to the Closing  Date,  including  all
water, gas,  electricity,  sewer and other utility charges or rental agreements
with  respect  to the  Property  entered  into on or before the  Closing  Date,
whether the invoices,  bills or other evidence of such obligations are received
prior to, on or following the Closing Date.

               (d) The provisions of this Section 5.7 shall survive the
Closing.

          Section 5.8. Closing Costs. Seller shall pay any excise taxes imposed
by any governmental  authority on this  transaction,  the cost of all transfer,
sales and conveyance taxes on this transaction,  recording fees, Seller's legal
fees and title insurance premiums.  Subject to Section 10.11 below, in addition
Seller  shall  be  solely  responsible  for  the  cost  (including  payment  of
prepayment  fees or other  charges) to pay off in full,  and have  canceled and
discharged of record,  all liens,  encumbrances and other instruments of record
other than the approved Conditions of Title. Buyer shall pay Buyer's legal fees
and costs incurred in connection with the contemplated  transaction.  All other
costs of this transaction,  if any, shall be borne by the parties in accordance
with the terms of this Agreement.

          Section 5.9. Possession. Upon the Closing, the right to possession of
the portion of the Property  being  conveyed to Buyer shall  transfer to Buyer,
and Seller shall transfer and deliver to Buyer the originals of all instruments
and documents evidencing or relating to the Contract Obligations as same relate
to the portion of the Property being conveyed to Buyer,  to the extent the same
are  within  the  possession  or  control  of  Seller,  which have not yet been
delivered  to Buyer.  On the Closing  Date,  Seller shall notify in writing all
parties  with whom  Seller  has  entered  into  oral or  written  contracts  or
arrangements  pertaining  to the  Property as same relate to the portion of the
Property being conveyed to Buyer,  including,  without limitation,  all utility
companies,  of the transfer of the Property from Seller on the Closing Date and
directing  that sums due from such parties be made to Buyer,  or Buyer's order,
from and after the Closing  Date.  All such sums, to the extent they pertain to
periods  prior to Closing,  shall be  credited  to Seller as a proration  under
Section  5.7 above.  All  deposits,  if any,  made by Seller  with any  utility
company shall be transferred for the benefit of Buyer and credited to Seller as
a proration under Section 5.7.

          Section  5.10.  Filing of Reports.  The Title Company shall be solely
responsible for the timely filing of any reports or returns  required  pursuant
to the provisions of Section 6045(e) of the Internal  Revenue Code of 1986 (and
any  similar  reports or  returns  required  under any state or local  laws) in
connection with the closing of the transaction contemplated in this Agreement.

<PAGE>

                                   ARTICLE VI

                   [INTENTIONALLY DELETED PRIOR TO EXECUTION]
                   ------------------------------------------

                                  ARTICLE VII

                      DAMAGE AND DESTRUCTION, CONDEMNATION

                     ------------------------------------

          Section 7.1. Damage and Destruction.  If prior to the Initial Closing
the Property is damaged by any casualty,  Seller shall immediately notify Buyer
in writing upon learning of the same (the "CASUALTY NOTICE") and if:

Ten percent  (10%) or less in value or in acreage of the Land is  destroyed  or
materially  damaged,  then  Seller and Buyer  shall  proceed  with the  Initial
Closing  as  provided  for in this  Agreement  without  repair of the  casualty
damage, and without any reduction in or credit against the Purchase Price; or

Greater than ten percent  (10%) in value or in acreage of the Land is destroyed
or  materially  damaged,  then  Buyer must  elect not later  than  thirty  (30)
calendar days after receipt of the Casualty Notice to either (i) terminate this
Agreement by giving notice to such effect to Seller (in which event the Deposit
and all the  interest  shall be returned to Buyer and neither  Seller nor Buyer
shall have any further  obligations or liabilities  one to the other  hereunder
except as  otherwise  provided  hereunder)  or (ii)  proceed  with the  Initial
Closing as set forth herein without  repair of the casualty  damage and without
any reduction in or credit against the Purchase Price, receive an assignment of
Seller's  rights in any  insurance  proceeds  which remain  unpaid to Seller in
connection with such casualty,  and receive a credit against the Purchase Price
in the amount of any amounts previously paid to Seller as insurance proceeds in
connection with such casualty less the cost of collecting the same.

          Section 7.2. Condemnation. Seller shall notify Buyer immediately upon
learning  of  the   occurrence  of  the   institution  or  maintenance  of  any
condemnation   or  similar   proceeding  with  respect  to  the  Property  (the
"CONDEMNATION NOTICE"). In the event any such condemnation or other proceedings
are instituted or maintained and is prior to the Initial Closing,  and the same
would  materially  impair the  Development,  Buyer at its option may either (i)
terminate this Agreement  within fifteen days after receiving the  Condemnation
Notice,  in which  event the  Deposit  and all the  interest  shall be promptly
returned  to Buyer  and  neither  Seller  nor  Buyer  shall  have  any  further
obligations  or  liabilities  one to the other  hereunder  except as  otherwise
provided  hereunder;  or (ii)  consummate the transaction  contemplated  herein
without any  reduction in or credit  against the Purchase  Price in which event
Buyer shall receive from Seller at Closing all condemnation proceeds previously
paid to Seller (less the cost of collecting  the same) and an assignment of any
such  proceeds  payable in respect to such  condemnation  or other  proceedings
subsequent  to the  Closing  (less the cost  previously  incurred  by Seller in
collecting the same).

                                  ARTICLE VIII

                                  COMMISSIONS

                                  -----------

          Section 8.1. Brokerage Commission and Finder's Fee.

               (a) Each party to this Agreement  represents and warrants to the
other that no person or entity can  properly  claim a real  estate  commission,
<PAGE>

real estate  finder's  fee,  real estate  acquisition  fee or other real estate
brokerage-type  compensation  (collectively,  "REAL ESTATE COMPENSATION") based
upon the acts of that party with  respect to the  transaction  contemplated  by
this Agreement. Seller agrees to indemnify, defend and hold Buyer harmless from
any loss,  cost or  expense  (including  but not  limited to  attorneys'  fees)
resulting from any claim  whatsoever for Real Estate  Compensation,  whether or
not the transaction  contemplated  herein is closed and consummated,  resulting
solely  from the  actions of Seller.  Seller  and Buyer each  hereby  agrees to
indemnify,  defend and hold the other  harmless from any loss,  cost or expense
(including but not limited to attorneys' fees) resulting from any breach by the
indemnifying party of its representation and warranty in this Section 8.1(a).

               (b) The provisions of this Section 8.1 shall survive the Closing
and the termination of this Agreement.

                                   ARTICLE IX

                             PARKING; IMPROVEMENTS

                             ---------------------

          Section 9.1. Ski Resort  Parking.  Buyer hereby assigns to Seller the
right, title, interest and privilege to act in the place and stead of Buyer and
make all  decisions  of Buyer  pursuant  to Section  9.1 of the  agreement  for
purchase and sale of real property (the "EAST WEST CONTRACT") between Buyer and
East West  Partners,  Inc.  ("EAST  WEST") as if Seller were a signatory to the
East West Contract.

          Section 9.2. Improvements. (a) Buyer acknowledges and agrees that all
Improvements are and shall remain the property of Seller and that  simultaneous
with the  Closing,  Buyer  shall net lease  (the  "NET  LEASE")  in the form of
Exhibit H to Seller the land upon which the Improvements are situated, together
with certain other lands, all as more particularly set forth in the Net Lease.

               (b) The  Essential  Ski Property (as such term is defined in the
Operating Agreement) shall, at no cost to Seller, be subdivided, separated into
new tax lots, and reconveyed to Seller subject only to the Conditions of Title.
Buyer shall, at Buyer's sole cost and expense, diligently seek and prosecute to
completion  said  subdivision  and tax lot  separation  and all other  required
governmental  approvals in connection therewith,  if any, or cause such actions
to occur. Buyer shall reconvey to Seller portions of the Essential Ski Property
no later than twenty (20) days following the subdivision  thereof. Any transfer
taxes  associated  with such  reconveyance  shall be paid by  Buyer.  If in the
reasonable opinion of Seller,  some or all of the Essential Ski Property cannot
be subdivided and reconveyed to Seller, Buyer shall have no further obligations
under this Section  9.2(b) with respect to such  portions of the  Essential Ski
Property that cannot be so subdivided and  reconveyed to Seller,  provided that
the Property  shall  remain  subject to all of the  provisions  of the easement
agreement  (the  "EASEMENT  AGREEMENT")  that is being  executed  and  recorded
simultaneously  herewith  in the form of Exhibit I hereof,  together  with such
reasonable modifications thereof as requested by Seller.

          The provisions of this Article IX shall survive the closing.

<PAGE>

                                   ARTICLE X

                               GENERAL PROVISIONS

                              ------------------

          Section 10.1.  Notices.  Any notice required or permitted to be given
under this  Agreement  shall be in writing and (i) personally  delivered,  (ii)
sent by United States mail,  registered  or certified  mail,  postage  prepaid,
return receipt  requested,  (iii) sent by Federal Express or similar nationally
recognized  overnight courier service,  or (iv) transmitted by facsimile and in
all cases  addressed  as follows,  and such notice shall be deemed to have been
given  upon the date of  actual  receipt  or  delivery  (or  refusal  to accept
delivery)  at the address  specified  below (or such other  addresses as may be
specified by notice in the foregoing manner) as indicated on the return receipt
or air bill or, in the case of facsimile  transmission,  upon  confirmation  of
transmission as indicated by the sender's facsimile machine:

            To Seller:         Booth Creek Ski Holdings, Inc.
            ---------          1000 S. Frontage Road West
                               Suite 100
                               Vail, Colorado 81657

                               Attention:  Christopher P. Ryman

                               and

                               Elizabeth J. Cole
                               Telephone:  (970) 476-3190
                               Facsimile:   (970) 479-0291

            To Buyer:          Booth Creek Ski Holdings, Inc.
            --------           1000 S. Frontage Road West
                               Suite 100
                               Vail, Colorado 81657

                               Attention:  Christopher P. Ryman

                               and

                               Elizabeth J. Cole
                               Telephone:  (970) 476-3190
                               Facsimile:   (970) 479-0291

            To the Title       First American Title Insurance Company
            ------------       228 East 45th Street
            Company            New York, New York 10017-3303
            -------            Attn:  Christopher Burdick, Esq.
                               Telephone: (212) 850-0627
                               Facsimile: (212) 331-1514

          Section 10.2. Agreement, No Modifications. This Agreement, together
with the exhibits attached to this Agreement, incorporates all agreements,
warranties, representations and understandings between the parties to the
Agreement with respect to the subject matter hereof and constitutes the entire
<PAGE>

agreement  of Seller and Buyer with  respect  to the  purchase  and sale of the
Property.   Any   prior   or   contemporaneous    correspondence,    memoranda,
understandings,  offers,  negotiations  and  agreements,  oral or written,  are
merged herein and replaced in total by this  Agreement and the exhibits  hereto
and shall be of no further force or effect.  This Agreement may not be modified
or amended except in a writing signed by Seller and Buyer.

          Section 10.3. Time. Time is of the essence in the performance of the
parties' respective obligations set forth in this Agreement.

          Section  10.4.  Attorneys'  Fees.  In  the  event  of any  action  or
proceeding at law or in equity between Buyer and Seller (including an action or
proceeding  between Buyer and the trustee or debtor in possession  while Seller
is a debtor or between  Seller and the  trustee or debtor in  possession  while
Buyer is a debtor,  in a proceeding  under the Bankruptcy Code (Title 11 of the
United  States  Code) or any  successor  statute  to such  Code) to  enforce or
interpret any provision of this  Agreement or to protect or establish any right
or remedy of either Buyer or Seller hereunder,  the unsuccessful  party to such
action or proceeding  shall pay to the prevailing party all costs and expenses,
including,  without limitation,  reasonable attorneys' and paralegals' fees and
expenses, incurred in such action or proceeding and in any appeal in connection
therewith by such prevailing party,  whether or not such action,  proceeding or
appeal is  prosecuted to judgment or other final  determination,  together with
all costs of enforcement and/or collection of any judgment or other relief. The
term "PREVAILING PARTY" shall include,  without limitation, a party who obtains
legal  counsel or brings an action  against  the other by reason of the other's
breach or default  and  obtains  substantially  the relief  sought,  whether by
compromise,  settlement  or judgment.  If such  prevailing  party shall recover
judgment in any such action,  proceeding  or appeal,  such costs,  expenses and
attorneys'  and  paralegals'  fees  shall  be  included  in and as part of such
judgment.

          Section 10.5. Relationship.  It is not intended by this Agreement to,
and nothing  contained in this Agreement shall,  create any partnership,  joint
venture,  financing arrangement or other agreement between Buyer and Seller. No
term or  provision  of this  Agreement  is intended to be, or shall be, for the
benefit of any person,  firm,  organization  or corporation not a party hereto,
and no such other person,  firm,  organization  or  corporation  shall have any
right or cause of action hereunder.

          Section 10.6. No Merger. The obligations, covenants,  representations
and  warranties,  and the  remedies  for  breach  of  them,  set  forth in this
Agreement shall not merge with transfer of title but shall remain in effect for
a period of time  either  specifically  as provided  in this  Agreement,  or as
follows:

          The  provisions of Sections  4.1(a) and (b) shall survive the Initial
Closing for a period of one year.

          Section 10.7.  Successors and Assigns.  This Agreement shall inure to
the  benefit of and be binding  upon the  parties to this  Agreement  and their
respective  successors  and  permitted  assigns.  Buyer  shall have no right to
assign its interest  under this  Agreement  except only to Newco and shall,  in
accordance with the provisions of this Agreement  immediately prior to Closing,
assign its interest under this Agreement to Newco.

          Section 10.8. Further Assurances. Whenever and so often as requested
by Buyer or Seller, the other party promptly will execute and deliver or cause
to be executed and delivered all such other and further instruments, documents
<PAGE>

or  assurances,  and promptly do or cause to be done all such other things,  as
may be necessary and  reasonably  required to vest more fully in the requesting
party all  rights,  interests,  powers,  benefits,  privileges  and  advantages
conferred or intended to be conferred upon it by this Agreement.

          Section 10.9. Counterparts.  This Agreement may be executed in one or
more counterparts, and each such counterpart shall be deemed to be an original;
all  counterparts  so executed  shall  constitute  one  instrument and shall be
binding on all of the parties to this Agreement notwithstanding that all of the
parties are not signatory to the same counterpart.

          Section 10.10. Construction.  This Agreement shall be governed by and
construed  under the laws of the State of California.  The parties  acknowledge
that each party and its counsel have reviewed and revised this  Agreement,  and
that no rule of  construction  to the  effect  that any  ambiguities  are to be
resolved against the drafting party shall be employed in the  interpretation of
this Agreement,  any amendments or exhibits to it, or any document executed and
delivered by either party in connection  with this  Agreement.  All captions in
this   Agreement  are  for  reference  only  and  shall  not  be  used  in  the
interpretation of this Agreement or any related  document.  If any provision of
this  Agreement  shall be  determined  to be  illegal  or  unenforceable,  such
determination  shall not affect any other provision of this Agreement,  and all
such other provisions shall remain in full force and effect.

          Section 10.11 Seller's  Inability.  If at the Initial Closing, as the
Initial  Closing may be extended  pursuant to the provisions of this Agreement,
Seller is unable to convey title to the Property in  accordance  with the terms
of this Agreement, either (i) as the result of any inability to convey, or (ii)
in accordance with any  representations or warranties made by Seller hereunder,
the sole  responsibility  of Seller will be to notify Buyer and upon the giving
of such notice, this Agreement shall be terminated and neither Buyer nor Seller
shall have any further  claim  against  the other by reason of this  Agreement,
except as otherwise provided in this Agreement.  In respect to both the Initial
Closing and all subsequent Closings,  except as otherwise expressly provided in
this Agreement,  Seller may, but shall not be required to, take any measures of
any kind,  bring any  action or  proceeding,  or incur any  expense in order to
remove any  objection  to title that Buyer has not agreed  hereunder to accept.
Buyer,  nevertheless,  may  accept  such title as Seller may be able to convey,
without  reduction of the Purchase Price or any credit or allowance against the
same and without any other  liability on the part of Seller,  and provided that
Buyer  irrevocably  waives  in  writing  any right or claim  against  Seller in
connection therewith.  If Buyer does not agree to accept such title, the parcel
or parcels so  affected  shall no longer be the subject of this  Agreement  and
Buyer shall have no rights with respect thereto.  The acceptance of the Deed by
Buyer shall be deemed to be a full performance and discharge of every agreement
and obligation on the part of Seller to be performed pursuant to the provisions
of this Agreement, except those, if any, that herein specifically are stated to
survive the Closing.  Unless so specifically  stated,  no agreement,  covenant,
warranty or  representation  made herein  shall  survive  the  Closing.  If the
Property  is  affected  by any  lien,  encumbrance  or  question  of title  not
expressly  consented  to herein by Buyer or which the Buyer is not  required to
take title  subject to, Seller  shall,  subject to the following  provisions of
this Section  10.11,  have the privilege to remove or satisfy the same or cause
the Title  Company to insure  Buyer  against  the  collection  of same from the
Property  and shall be entitled  to an  adjournment  of the Closing  Date for a
period  or  periods  not  exceeding  ninety  (90)  days (in the  aggregate)  in
connection therewith.

<PAGE>

          Section 10.12 Exculpation.  Buyer agrees that the liability of Seller
under this Agreement,  and with respect to all matters pertaining to or arising
out of this Agreement,  shall be limited to Seller's  interest in the Property.
In addition,  under no  circumstances  shall either Buyer or Seller make claims
against  or  seek  to  impose  any  personal  liability  upon  any  individual,
including,  without  limitation,  any  general  or  limited  partner,  officer,
director, employee or shareholder.

          Section 10.13. Miscellaneous.

               (a) Interim  Resort Use.  Until  construction  on an  individual
parcel,  Seller shall have the right to continue to use all undeveloped parcels
for all resort related activities, including, without limitation, cross-country
skiing and biking.  Seller shall  indemnify  Buyer  against such use and Seller
shall  maintain  adequate  insurance  and will name Buyer and any  successor in
title to Buyer as an additional insured thereon.

               (b)  Water  Rights.   Seller  shall  retain  all  Water  Rights,
including the collection of surface run off water from the Property, but Seller
and Buyer shall  reasonably  agree as to the  appropriate  method of  supplying
sufficient  water to service the needs of the  Development  and Seller shall be
obligated to supply same.

               (c)  Retained  Density.  Seller  shall  retain a portion  of the
Density  attributable to the Property necessary for the development of 36 Units
on Seller's  remaining  property (which includes the Density retained by Seller
in connection  with parcel 15),  together  with any portion of the Density,  if
any,  required to maintain  and utilize at the level of useage  existing on the
date hereof all existing structures on Seller's remaining property.

               (d) Multiple  Closings.  Notwithstanding  any  provision of this
Agreement to the contrary,  in the event of Multiple Closings,  if a particular
provision of this Agreement does not contemplate  Multiple  Closings,  then any
document  that  is to be  delivered,  term  or  condition  to be  satisfied  or
proration  to be made  that  is  applicable  to all of the  Property  shall  be
modified by the agreement of Seller and Buyer acting  reasonably to account for
the Multiple Closings.

               (e) Other Closing Documents.  At the Initial Closing,  Buyer and
Seller shall enter into the Net Lease, the Easement Agreement,  the Declaration
of Construction Covenants,  Conditions and Restrictions ("Declaration") and the
Deed of Trust in the forms annexed hereto respectively as Exhibits H, I, J, and
K.  Simultaneous  with (i) the closing of the Second Site (or at both closings,
if the closing of the Second  Site is  bifurcated  pursuant  to Section  2.2(e)
hereof) and (ii) the conveyances contemplated in Section 10.13(g) hereof, Buyer
and Seller agree that (x) the Easement Agreement, Declaration and Deed of Trust
shall  be  amended  so as to  include  within  the  legal  description  of such
documents all such  subsequent  conveyed  parcels,  (y) this  Agreement and all
other  documents  referenced  in this  Section  shall be recorded  against such
subsequent  conveyed  parcels in the same order as they are being  recorded  in
connection  with  the  Initial  Closing  and (z) the  Deed of  Trust  shall  be
subordinated to the amendments  contemplated  hereby of the Easement Agreement,
the  Declaration  and the recorded  copy of this  Agreement.  The Deed of Trust
shall also be subordinated to any  modifications of the Net Lease  contemplated
by this Agreement.

<PAGE>

               (f) Parcel 26 and Unit 7A  Property.  Upon the  delivery  of the
Deed at the  Initial  Closing,  the  Parcel 26  Interests  shall be  considered
conclusively and irrevocably  transferred and assigned to Buyer. As soon as the
proposed  single  family  subdivision  of the Unit 7A Property has received the
requisite  approvals so that the Unit 7A Property comprises one or more legally
conveyable parcels,  Buyer shall, within twenty (20) days thereof,  reconvey to
Seller  the  Unit  7A  Property,   or  subdivided  portions  thereof,   for  no
consideration  and subject only to the  Conditions  of Title.  Buyer and Seller
shall  equally  share the cost of any  transfer  taxes  for such  reconveyance.
Pending  such  reconveyance,   Seller  shall  retain  the  sole  equitable  and
beneficial ownership interest in the Unit 7A Property.  Buyer, at its sole cost
and  expense,  agrees  to  diligently  seek and  prosecute  to  completion  the
subdivision process for the Unit 7A Property.

               (g) Parcel 15 Subdivision,  Parcel 18 and Parcel 29 Subdivision.
Seller agrees to diligently seek and prosecute to completion  either a boundary
line  adjustment  or a  subdivision,  so that  legal  title  to the  Parcel  15
Subdivision,  parcel 18 and the Parcel 29 Subdivision can be conveyed to Buyer.
As soon as said  boundary  line  adjustment  or  subdivision  has  received the
requisite approvals so that the Parcel 15 Subdivision,  parcel 18 or the Parcel
29 Subdivision, respectively, comprises one or more legally conveyable parcels,
Seller shall,  within  twenty (20) days thereof,  convey to Buyer the Parcel 15
Subdivision,  parcel 18 or the  Parcel  29  Subdivision,  respectively,  for no
additional consideration, subject only to the Conditions of Title. Seller shall
pay any transfer taxes applicable to such conveyances.  From and after the date
of the Initial Closing,  Buyer shall be responsible for all real property taxes
applicable to the three  aforesaid  parcels and Buyer and Seller agree to enter
into a tax lot sharing agreement  regarding said parcels, in form and substance
reasonably satisfactory to both Buyer and Seller.

               (h) Tax Lots.  Buyer  covenants and agrees to cause any property
that is reconveyed by Buyer to Seller  pursuant to the terms of this  agreement
to be separate and distinct tax lots  comprising  no portions of any land other
than the land so  reconveyed.  If any such  reconveyance  of land from Buyer to
Seller occurs prior to the time that such land comprises  separate and distinct
tax lots,  as provided  above,  Buyer and Seller  agree to enter into a tax lot
sharing agreement,  in form and substance reasonably satisfactory to both Buyer
and Seller.

               (i) At the Initial  Closing,  Buyer hereby agrees that it shall,
and hereby agrees to, assume the items listed on Exhibit C hereof.

               (j) Survival. All of the provisions of this Section 10.13 shall
survive the closing.
<PAGE>

          IN WITNESS WHEREOF,  Buyer and Seller have executed this Agreement as
of the date and year first written above:

                                    SELLER:

                                    TRIMONT LAND COMPANY, a
                                    California corporation

                                    By:  /s/ Elizabeth J. Cole
                                       ----------------------------------------
                                    Name:  Elizabeth J. Cole
                                    Title: Executive Vice President

                                    BUYER:

                                    TRIMONT LAND HOLDINGS, INC.,
                                    a Delaware corporation

                                    By:  /s/ Elizabeth J. Cole
                                       ----------------------------------------
                                    Name:  Elizabeth J. Cole
                                    Title: Executive Vice President
<PAGE>

                                   EXHIBIT A

                                      LAND

The land referred to herein is situated in the State of California, County of
Placer, unincorporated area, and is described as follows:

PARCEL ONE: (AEG Parcel 16)
----------

All those portions of the twelfth tract of land described in paragraph "g" in
the Deed to Fibreboard Products, Inc., recorded in Volume 496 at page 130,
Official Records of Placer County, lying Westerly of the Westerly right of way
lines of county Road No. W8002 (commonly known as Big Springs Drive) and County
Road No. W8001 (commonly known as Northstar Drive) as shown and so designated
on Northstar Unit No. 1-B filed in Book J of Maps, at page 40, Northstar Unit
No. 3 filed in Book J of Maps, at page 55, and Northstar Unit No.4, filed in
Book K of Maps, at page 13, Placer County Records, located in Section 32,
Township 17 North, Range 17 East, M.D.M., Placer County, California.

EXCEPTING THEREFROM any portion of the aforementioned lands of Fibreboard
Products lying within the boundaries of the following described tracts of land:

Exception A
-----------

Beginning at the West one-quarter corner of said Section 32, thence from the
point of beginning North 01 degrees 11' 38" West along the West line of Section
32 for a distance of 206.52 feet; thence leaving said West line, South 36
degrees 14' 44" East for a distance of 337.50 feet; thence South 17 degrees 52'
25" East for a distance of 355.14 feet; thence South 18 degrees 36' 40" West
for a distance of 219.46 feet; thence South 37 degrees 34' 53" West for a
distance of 273.82 feet; thence South 18 degrees 38' 22" West for a distance of
152.02 feet to a point on said East line; thence North 01 degrees 05' 55" West
along said East line for a distance of 972.94 feet to the point of beginning.

Exception B
-----------

Beginning at the Southwest corner of Section 32, thence from the point of
beginning North 01 degrees 05' 55" West for. a distance of 1399.10 feet; thence
leaving said West line South 22 degrees 37' 12" East for a distance of 110.53
feet; thence South 28 degrees 52' 32" East for a distance of 310.62 feet;
thence South 05 degrees 15' 14" West for a distance of 1027.73 feet; to a point
on the South line of Section 32, thence South 88 degrees 52' 28" West for a
distance of 71.59 feet to the point of beginning.

TOGETHER WITH all those portions of the eleventh tract of land described in
Paragraph "g" in the Deed to Fibreboard Products, Ins., recorded in Volume 496,
at page 130, Official Records of Placer County, located in Section 31, Township
17 North, Range 17 East, M.D.M., Placer County, California, described as
follows;

Parcel A
--------

Beginning at a point on the East line of said Section 31, and from said point
the East one-quarter corner of Section 31 bears South 01 degrees 11' 38" East
for a distance of 206.52 feet; thence from the point of-beginning., leaving
<PAGE>

said East line North 36 degrees 14' 44" West for a distance of 415.15 feet;
thence North 29 degrees 09' 20" West for a distance of 385.89 feet; thence
North 47 degrees 23' 28" West for a distance of 322.01 feet; thence North 51
degrees 11' 38 degrees West for a distance of 183.51 feet; thence North 56
degrees 42' 33" West for a distance of 205.16 feet; thence North 29 degrees 5'
03" West for a distance of 64.49 feet to a point on the Southerly line of the
tract of land shown on the map of Tract No. 283, Northstar Unit 5-B filed in
Book L of Maps, at page 5, Placer County Records; thence along said Southerly
line the following two (2) consecutive courses and distances: (1) along the arc
of a non-tangent curve to the right, concave Southerly, having a radius of
630.00 feet, a central angle of 21 degrees 58' 57", a length of 241.71 feet and
a chord bearing South 88 degrees 21' 42" East for a distance of 240.23 feet;
and. (2) South 77 degrees 22' 14" East for a distance of 73.94 feet to a point
on the Westerly line of the tract of land shown on the map of Tract No. 224;
Northstar Unit 1-C filed in Book J of Maps, at page 46, Placer County Records;
thence along the Southerly line of the last mentioned tract of land the
following four (4) consecutive courses and distances: (1) South 77 degrees 22'
1411 East for a distance of 394.23 feet; (2) along the arc of a tangent curve
to the right, concave Southeasterly, having a radius of 830.00 feet, a central
angle of 22 degrees 01' 33", a length of 319.07 feet-and a chord bearing South
66 degrees 21' 27" East for a distance of 317.11 feet; (3) South 34 degrees 39'
19" West for a distance of 60.00 feet; and (4) along the arc of a non-tangent
curve to the right, concave Southeasterly, having a radius of 770.00 feet, a
central angle of 04 degrees 15' 27", a length of 57.22 feet and a chord bearing
South 53 degrees 12' 57" West for a distance of 57.20 feet to a point on the
East line of said Section 31; thence leaving said Southerly line South 01
degrees 11' 38" East along said East line for a distance of 853.59 feet to the
point of beginning.

Parcel B
--------

Beginning at a point on the East line of said Section 31, and from said point
the Southeast corner of Section 31 bears South 01 degrees 05' 55" East for a
distance of 1399.10 feet; thence from the point of beginning, leaving said East
line North 22 degrees 37' 12" West for a distance of 71.47 feet; thence North
05 degrees 59' 17" West for a distance of 143.79 feet; thence North 18 degrees
38' 22" East for a distance of 113.93 feet to a point on said East line; thence
South 01 degrees 05' 55", East along the East line for a distance of 316.99
feet.

APNS: 110-030-055 and 057
      110--080-042

PARCEL TWO:  (AEG Parcel 17 )
----------

A portion of the tracts of land described in the patents recorded in Book L of
Patents, page 32, located in Section 32, Township 9.7 North, Range 17 East,
M.D.M., Placer County, California. Beginning at a point of intersection of the
Westerly line of the tract of land shown and designated as Parcel A on the plat
of Northstar Unit No. 4-filed in Book K of Maps, at page 13, Placer County
Records with the Southerly line of the above described Section 32, and from
said point the Southeast corner of said Section 32 bears North 88 degrees 52'
28" East along said Southerly line for a distance of 3565.14 feet; thence from
the point of beginning South 86 degrees 52' 28" West along said Southerly line
for a distance of 555.64 feet to a point on the Easterly line of the tract of
land shown and designated as Block 1 on said plat of Northstar Unit No. 4;
thence North 12 degrees 20' 0" East along said Easterly line for a distance of
226.22 feet to an angle point in said Easterly line, being the Northerly most
Southwest corner of said Parcel A; thence along the Southerly and Westerly
lines of said Parcel A the following two (2) consecutive courses and distances:
<PAGE>

          (1) South 75 degrees 30' 00" East for a distance of 523.90 feet; and

          (2) South for a distance of 78.91 feet to the point of beginning.

APN:  110-080-010

PARCEL THREE: (AEG #19A)
------------

A portion of the tracts of land described in the patents recorded in Book F of
Patents at page 270, Book K of Patents at page 65 and Book L of Patents at Page
78, located in Section 32, Township 17 North Range 17 East, M.D.M., Placer
County California.

Beginning at the South one-quarter corner of the above described Section 32,
and from said point the Southeast corner of said Section 32 bears North 88
degrees 52' 28" East along the Southerly line of section 32 for a distance of
2585.18 feet; thence from the point of beginning South 88 degrees 52' 28" West
along said Southerly line for a distance of 561.04 feet to the point of
intersection of said Southerly line with the Easterly line of the tract of land
shown and designated as Parcel A on the plat of Northstar Unit 4 filed in Book
K of Maps at page 13, Placer County Records; thence leaving said Southerly line
North 19 degrees 40' 00" East along said Easterly line of Parcel A for a
distance of 512.29 feet to the Southeast corner of the tract of land described
in the Quitclaim Deed to the Northstar Property Owner's a Association recorded
in Instrument No. 96-008557, Official Records of Placer County; thence along
the Northerly and Westerly lines of said lands of the Northstar Property
owner's Association the following eleven (11) consecutive courses and
distances:

     1. North 44 degrees 51' 00" West for a distance of 600.22 feet;

     2. North 23 degrees 54' 00" west for a distance of 494.99 feet;

     3. North 79 degrees 26' 00" West-for a -distance of 178.00 feet;

     4. South 51 degrees 00' 00" West for a distance of 98.56 feet;

     5. South 27 degrees 11' 00" West for a distance of 233.21 feet;

     6. West for a distance of 37.62 feet;

     7. South for a distance of 52.00 feet;

     8. East for a distance of 15.00 feet;

     9. South for a distance of 249.73 feet;

     10. South 79 degrees 35' 32" West for a distance of 15.26 feet; and

     11. South for a distance of 336.73 feet to a point on the Northerly line
of said Parcel A; thence along the Northerly line of Parcel A and the Northerly
and Easterly lines of the tract of land shown and designated as Block I on said
plat of Northstar Unit No. 4 the following eight (8) consecutive courses and
distances:
<PAGE>

     1. West for a distance of 220.41 feet;

     2. North 35 degrees 41' 12" West for a distance of 173.97 feet;

     3. North 81 degrees 45' 00" West for a distance of 171.00 feet;

     4. North 37 degrees 30' 00" West for a distance of 506.35 feet;

     5. North 20 degrees 00' 00" West for a distance of 209.65 feet;

     6. North 57 degrees 20' 00" West for a distance of 16.79. feet;

     7. Along the arc of a non-tangent curve to the right, concave
Southeasterly having a radius of 470.00 feet, a central angle of 34 degrees 05'
l1" and a length of 279.61 feet; and

     8. North 36 degrees 20' 57" East for a distance of 235.1.9 feet to an
angle point in the Westerly line of the tract of land shown and designated as
Parcel Z on the Plat of Northstar Unit 3 filed in Book J of Maps at page 55,
Placer County Records; thence along said Westerly line of Parcel Z the
following six (6) consecutive courses and distances:

     1. South 53 degrees 39' 03" East for a distance of 15.69 feet;

     2. South 36 degrees 20' 57" West for a distance of 70.00 feet;

     3. South 53 degrees 39' 03" East for a distance of 68.00 feet;

     4. South 36 degrees 20' 57" West for a distance of 80.00 feet;

     5. South 22 degrees 25' 04" East for a distance of 101.42 feet; and

     6. South 15 degrees 48' 13" West for a distance of 4.38 feet; thence South
15 degrees 48' 13" West for a distance of 1.96 feet to an angle point in the
tract of land described as Parcel 3 in the Grant Deed to Trimont Land
Corporation recorded in Volume 1405 at page 291, Official Records of Placer
County; thence along the Southwesterly line of said lands of Trimont Land
Company the following six (6) consecutive courses and. distances:

     1. South 15 degrees 48' 13" West for a distance of 34.05 feet;

     2. South 74 degrees 11' 47" East for a distance of 95.19 feet;

     3. North 15 degrees 48' 13" East for a distance of 14.00 feet;

     4. South 74 degrees 11' 47" East for a distance of 155.52 feet

     5. South 39 degrees 11' 47" East for a distance of 160.54 feet; and

     6. North 50 degrees 48' 13" East for a distance of 16.85 feet to the
Northwest corner of the tract of land shown and designated as Lot 1 on the plat
of Brookside Condominiums filed in Book U of Maps at page 37, Placer County
<PAGE>

Records; thence along the Southwesterly, Southeasterly and Northeasterly lines
of said Lot 1 the following fifteen (7.5) consecutive courses and distances;

     1. South 27 degrees 12' 58" East for a distance of 29.31 feet;

     2. South 84 degrees 09' 37" East for a distance of 11.10 feet;

     3. South 39 degrees 09' 37" East for a distance of 214.06 feet;

     4. South 05 degrees 50' 23" West for a distance of 5.10 feet;

     5. South 84 degrees 09' 37" East for .a distance of 22.00 feet;

     6. North 05 degrees 50' 23" East for a distance of 7.93 feet;

     7. North 50 degrees 50 23" East for a distance of 51.44 feet;

     8. North 39 degrees 09' 37" West for a distance of 11.33 feet;

     9. North 50 degrees 50' 23" East for a distance of 22.00 feet;

     10. North 39 degrees 09' 37" West for a distance of 9.00 feet;

     11. North 50 degrees 50' 23" East for a distance of 6.50 feet;

     12. North 39 degrees 09' 37" West for -a distance of 29.94 feet;

     13. North 50 degrees 50' 23" East for a distance of 9.50 feet;

     14. North 39 degrees 09' 37" West for a distance of 213.94 feet; and

     15. South 50 degrees 48' 13" West for a distance of 6.80 feet to an angle
point in the Northeasterly line of the aforementioned lands of Trimont Land
Corporation; thence along the Northeasterly line of said lands of Trimont Land
Corporation the following seven (7) consecutive courses and distances:

     1. North 39 degrees 11' 47" West for a distance of 147.43 feet;

     2. Along the arc of a tangent curve to the right, concave Easterly, having
a radius of 98.00 feet, a central angle of 42 degrees 43' 26", a length of
73.08 feet and a chord bearing North 17 degrees 50' 04" West for a distance of
17.39 feet;

     3. North 03 degrees 31' 39" East for a distance of 83.54 feet;

     4. along the arc of a tangent curve to the left, concave Westerly, having
a radius of 515.00 feet, a central angle of 34 degrees 08' 04", a length of
306.81 feet and a chord bearing North 13 degrees 32' 23" West for a distance of
302.30 feet to a point of compound curvature;
<PAGE>

     5. along the arc of a tangent curve to the left, concave Southwesterly,
having a radius of 265.00 feet, a central angle of 22 degrees 22' 59", a length
of 103.52 feet and a chord bearing North 41 degrees 47' 54" West for a distance
of 102.87 feet to a point of reverse curvature;

     6. along the arc of a tangent curve to the right, concave Northeasterly,
having a radius of 22,00 feet, a central angle of 89 degrees 20' 21", a length
of 34.30 feet and a chord bearing North 08 degrees 19'13" West for a distance
of 30.93 feet; and

     7. North 36 degrees 20' 57" East for a distance of 183.17 feet to a point
on the Southwesterly line of the tract of land shown and designated as Block 6
on the plat of Northstar Unit 1-B fixed in Book J of Maps at page 40, Placer
County Records; thence South 53 degrees 39' 03" East along the Southwesterly
lines of Block 6 and the tracts of land shown and designated as Block 5 and
Block 6 on said plat of Northstar Unit l-B for a distance of 668.38 feet;
thence East along the Southerly lines of said Block 4 and the tract of land
shown and designated as Parcel A on said plat of Northstar Unit 1-B for a
distance of 595.00 feet; thence North 08 degrees 59' 38" East along the
Easterly line of said Parcel. A for a distance of 1007.71 feet to a point on
the Southwesterly line of the tract of land shown and designated as Lot 13 on
the plat of Northstar Unit 1-A filed in Book J of Maps at page 38, Placer
County Records; thence along the Southwesterly lines of said Lot 13 and the
tracts of land shown and designated as Lot 14 and Parcel C and the
Southeasterly lines of said Lot 15 and the tracts of land shown and designated
as Lots 16 and 17 on said plat of Northstar Unit l-A the following seven (7)
consecutive courses and distances:

     1. South 64 degrees 22' 06" East for a distance of 65.79 feet;

     2. South 61 degrees 55' 51" East for a distance of 90.00 feet;

     3. South 81 degrees 10' 47" East for a distance of 90.77, feet;

     4. South 89 degrees 12' 21" East for a distance of 80.00 feet;

     5. North 23 degrees 19' 35" East for a distance of 120.00 feet;

     6. North 24 degrees 01' 07" East for a distance of 70.01 feet; and

     7. North 22 degrees 43' 34" East for a distance of 9.50 feet to a point of
intersection of said Southeasterly line with the North-South centerline of said
Section 32; thence South 01 degrees 43' 33" East along said centerline for a
distance of 2799.07 feet to the point of beginning.

EXCEPTING THEREFROM all that portion of Section 32, Township 17 North, Range 17
East, M.D.B.& M. situated in the County of Placer, State of California, more
particularly described as follows:

Being a portion of those certain lands of Trimont Land Company, as described in
that certain Grant Deed .'filed as Document No. 92-090695, Placer County
Official Records; more particularly described as follows:
<PAGE>

The Basis of Bearing for this description is identical to that certain
Subdivision map entitled "Brookside Condominiums", Tract Map No. 798, filed in
Book "U" of Maps, page 37, Placer County Records.

ACQUIRING PARCEL ONE:
--------------------

Beginning at the most Northerly corner of Lot 1, as shown on that certain
Subdivision Map entitled "Brookside Condominiums", Tract Map No. 798, filed in
Hook "U" of Maps, Page 37, Placer County Records; thence North 50 degrees 48'
13" East 4.00 feet; thence South 39009137" East 213.94 feet; thence South 50
degrees 50' 23" West 4.00 feet, to the Easterly boundary of said Lot 1; thence
along said Easterly boundary, North 39 degrees 09' 37" west 213.94 feet; more
or less to the point of beginning.

ACQUIRING PARCEL TWO:
--------------------

Beginning at a point on the Southerly line of Lot 1, as shown on that certain
Subdivision Map entitled "Brookside Condominiums", Tract Map No. .798, filed in
Book "U" of Maps, Page 37, Placer County Records, from which Point the most
Northerly corner of said Lot 1 bears the following Four (4) courses:

1. North 39 degrees 09' 37" West 214.06 feet;

2. North 84 degrees 09' 37" West 11.10 feet;

3. North 27 degrees 12' 52" West 29.31 feet;

4. North 50 degrees 48' 13" East 108.78 feet;

thence from said point of beginning along the boundary of said Lot 1, South 05
degrees 50' 23" West 2.54 feet; thence leaving the boundary of said Lot 1,
North 84 degrees 09' 37" West 4.11 feet; thence North 05 degrees 50' 23" East
6.66 feet to the boundary of said Lot 1; thence South 39 degrees 09' 37" East
5.82 feet, more or less to the point of beginning.

APNS: 110-080-024 (ptn)
      110-080-038 (ptn)

PARCEL THREE-B:
--------------

All that portion of Section 32, Township 17 North, Range 17 East, M.D.B.& M.
situate in the County of Placer, State of California, more particularly
described as follows:

Being a portion of Lot 1,, according to that certain Subdivision Map entitled
"Brookside Condominiums", Tract Map No. 798, filed in Book "U" of Maps, page
37, Placer County Records, and being also a portion of those certain lands of
Northstar Club, L.L.C. as described in that certain Grant Deed filed as
Document No. 98-0030893, Placer County Official Records, more particularly
described as follows:
<PAGE>

The Basis of Bearing for this description is identical to that certain
Subdivision Map entitled "Brookside Condominiums", Tract No. 798, filed in Book
"U" of maps, Page 37, Placer County Records.

TRANSFERRING PARCEL ONE:
-----------------------

Beginning at a point on the Southeasterly line of said Lot 1, from which point
the most Northerly corner of said Lot 1 bears the following five (5) courses:

1. North 39 degrees 09' 37" West 9.00 feet;

2. North 50 degrees 50' 23" East 6.50 feet;

3. North 39 degrees 09' 37" West 29.94 feet;

4 . North 50 degrees 50' 23" East 9.50 feet;

5. North 39 degrees 09' 37" West 213.94 feet; thence from said point of
beginning along the boundary of said Lot 1 the following six (6) courses:

1. South 50 degrees 50' 23" West 22.00 feet;

2. South 39 degrees 09' 37" East 11.33 feet;

3. South 50 degrees 50' 23" West 51.44 feet;

4. South 05 degrees 50' 23 degrees West 7.93 feet;

5. North 84 degrees 09' 37" West 22.00 feet;

6. North 05 degrees 50' 23" East 2.56 feet;

thence leaving the boundary of said Lot 1 South 84 degrees 09' 37" East 19.76
feet; thence North 05 degrees 50123" East 5.79 feet; thence North 50 degrees
50' 23" East 50.83 feet; thence North 39 degrees 09' 37" West 10.20 feet;
thence North 50 degrees 50' 23" East 23.90 feet to the boundary of said Lot 1;
thence South 39 degrees 09137" East 0.75 feet, more or less to the point of
beginning.

TRANSFERRING PARCEL TWO:
-----------------------

Beginning at a point on the Southerly line of said Lot 1, from which point the
most Northerly corner of. said Lot 1 bears the following two (2) courses:

1. North 27 degrees 12' 52" West 29.31 feet;

2. North 50 degrees 48' 13" East 108.78 feet;

thence from said point of beginning North 27 degrees 12' 52" West 1.96 feet;
thence leaving the boundary of said Lot 1 South 84 degrees 09' 37" East 14.99
<PAGE>

feet; thence South 39 degrees 09' 37" East 204.26 feet; thence South 05 degrees
50' 23" West 4.46 feet to the boundary of said Lot 1; thence along the boundary
of said Lot 1 the following two (2) courses:

1. North 39 degrees 09' 37" West 208.24 feet;

2. North 84 degrees 09' 37" West 11.10 feet, more or less to the point of
beginning.

PARCEL FOUR: (AEG Parcel 21)
-----------

Parcel "U" as shown on the plat of Northstar Unit #3, filed September 21, 1972
in Book "J" of Maps, at page 55.

APN:  110-250-002

PARCEL FIVE:      INTENTIONALLY DELETED
-----------

PARCEL SIX: (AEG Parcels 20 & 23)
----------

All that portion of Section 32, Township 17 North, Range 17 East, Mount Diablo
Meridian, described as follows:

Beginning at the most Southerly corner of Northstar Drive as said drive is
shown on that certain map entitled "Tract No. 223 Northstar Unit 1-B, A
Condominium Development being a portion of Section 32 T17N R17E MDM, Placer
County, California", filed for record on December 1, 1971 in Book J of Maps, at
page 40, Placer County Records; thence from said point of beginning
Southwesterly along the Southwesterly prolongation of the Southeasterly line of
said Northstar Drive South 36 degrees 20' 57" West 183.17 feet to a point
thereon; thence leaving last said line and tangent to the preceding course
along the arc of a curve to the left having a radius of 22 feet and a central
angle of 89 degrees 20' 21", an arc length of 34.30 feet to a point of reverse
curvature; thence tangent to the preceding curve along the arc of a curve to
the right having a radius of 265 feet and a central angle of 22 degrees 22'
59", an arc length of 103.52 feet to a point on compound curvature; thence
tangent to the preceding curve along the arc of a curve to the right having a
radius of 515 feet and a central angle of 34 degrees 08' 04", an arc length of
306.81 feet; thence tangent to the preceding curve South 3 degrees 31' 39" West
83.54 feet; thence tangent to the preceding course along the arc of a curve to
the left having a radius of 98 feet and a central angle of 42 degrees 43' 26",
an arc length of 73.08 feet, thence tangent to the preceding curve South 39
degrees 11' 47" East 147.43 feet; thence South 50 degrees 48' 13" West 118.83
feet to a point being distant North 38 degrees 34' 14" East 161.8.74 feet from
 .the Southwest corner a said Section 32, being a 3/4 inch iron pipe set in a
rock mound distant North 89 degrees 35' 27" West 2702.98 feet from a 3/4 inch
iron pipe designated 637-38 on that certain Record of Survey filed for record
on July 28, 1971 in Book 4 of Surveys at page 10, Placer County Records; thence
from last said point the following courses: North 39 degrees 11' 47", West
160.54 feet, North 74 degrees 11' 47" West 155.52 feet, South 15 degrees 48'
31" West 14.00 feet, North 74 degrees 11' 47" West 95.19 feet, North 15 degrees
48' 13" East 34.05 feet, from a tangent that bears South 83 degrees 24' 24"
East along the arc of a curve to the left having a radius of 75 feet and a
central angle of 122 degrees 03' 27", an arc length of 135.46 feet, North 45
degrees 02' 04" East 5.00 feet, South 44 degrees 57' 56" East 21.00 feet, from
a tangent that bears North 45 degrees 13' 32" East along the arc of a curve to
the left having a radius of 284 feet and a central angle of 69 degrees 48' 30",
an arc length of 346.02 feet, South 65 degrees 25' 02" West 68.00 feet, from a
tangent that bears South 24 degrees 34' 58", East along the arc of a curve to
<PAGE>

the right having a radius of 216 feet and a central angle of 22 degrees 55'
16", an arc length of 86.40 feet, from a tangent that bears South 88 degrees
50' 06" West. along the arc of a curve to the right having a radius of 19 feet
and a central angle of 37 degrees 30' 51", an arc length of 12.44 feet, tangent
to the preceding curve North 53 degrees 39" 31' West 51.68 feet and tangent to
the preceding course along the arc of a curve to the right with a radius of 24
feet and a central angle of 51 degrees 08 47", an arc length of 21.42 feet to a
point on the above mentioned Southwesterly prolongation of the Southeasterly
line of Northstar Drive; thence

Southwesterly along last said line South 36 degrees 20' 57" West 106.31 feet to
a point thereon; thence leaving last said line North 53 degrees 39' 31" West
60.00 feet to a point on a line being parallel. with and perpendicularly
distant 60 feet Northwesterly from said Southwesterly prolongation of the
Southeasterly line of Northstar Drive; thence Northeasterly along last said
line North 36 degrees 20' 57" East 497.05 feet to a point thereon; thence
leaving said parallel line tangent thereto, along the arc of a curve to the
left having a radius of 56.00 feet and a central angle of 8 degrees 41' 53", an
arc length of 8.50 feet; thence South 53 degrees 39' 03" East 60.64 feet to the
point of beginning.

EXCEPTING THEREFROM that portion lying within the plat of Northstar Unit 3,
Tract 256, filed for record in Book J of Maps, at page 55.

The California Coordinate System, Zone 11, has been used as the basis of
bearings. All bearings shown are grid bearings.- All distances shown are ground
distances: To convert ground distances to grid distances multiply ground
distances of combined factor of 9.9995841.

APNS: 110-250-003 and 007

PARCEL SEVEN: (AEG Parcel 22 )
------------

Parcel Z as shown on the plat of Northstar Unit #3, filed September 21, 1972 in
Book J, Page 55 of Maps.

APNS : 110-250-004 and 006

PARCEL EIGHT: (AEG Parcels A & B)
------------

Parcels A & B as shown on the map of Tract 256, NORTHSTAR UNIT 3, recorded on
September 21, 1972, in Book J of Maps, at page 55 of the Official Records of
Placer County.

APNS: 110-250-001
      110-250-005

PARCEL NINE: (AEG Parcel 26)
-----------

A portion of the East one-half of Section 31, Township 17 North, Range 17 East,
Mount Diablo Meridian, together with a portion of Section 5 and a portion of
Lots 1 and 2 of the Northeast one-quarter of Section 6, Township 16 North,
Range 17 East, Mount Diablo Meridian, Placer County, California.
<PAGE>

Beginning at the South one-quarter corner of said Section 31, Thence from the
point of beginning North 01 degrees 25' 44" West along the North-South
centerline of Section 31 for a distance of 2252.55 feet; thence, leaving said
North-South centerline South 74 degrees 34' 17" East for a distance of 1433.24
feet; thence South 12 degrees 149' 171" East for a distance of 892.25 feet;
thence South 23 degrees 52' 06" East for a distance of 617.84 feet; thence
South 67 degrees 51' 33" East for a distance of 954.71 feet to the Southeast
section corner of said Section 31; thence North 88 degrees 52' 28" East along
the Northerly line of the above mentioned Section 5 for a distance of 71.59
feet; thence, leaving said Northerly line South 05 degrees 15' 14" West for a
distance of 719.61 feet; thence South 25 degrees 07' 59" West for a distance of
894.71 feet; thence South 28 degrees 36' 38" West for a distance of 1002.4
feet; thence North 81 degrees 23' 04" West for a distance of 667.53 feet; .
thence North 09 degrees 16' 21" West for a distance of 496.49 feet; thence
North--21 degrees 22' 14" West for a distance of 740.95 feet; thence North 37
degrees 05' 26" West for a distance of 1315.60 feet to the point of beginning.

The above described land being the same real property designated Resultant
Parcel 2 and described in that certain Resolution To Approve a Minor Boundary
Line Adjustment (MER-9987) recorded November 23, 1993, as Instrument No.
93-087531, Official Records.

APNS: 110-030-053
      110-050-036

<PAGE>

                                   EXHIBIT B

                    Intentionally Deleted Prior to Execution

<PAGE>

                                   EXHIBIT C

                       [List of Contracts to be Assumed]

     1. At the Initial  Closing,  Buyer shall assume the  obligations of Seller
under the Agreement between Northstar Club, LLC and Seller, a copy of which has
heretofore  been  delivered  to Buyer  concerning  the  possible  option of the
Northstar Club, LLC to purchase  additional  property from Seller.  Buyer shall
then have the right to reasonably  select the portion of the Property that will
be used to satisfy the terms of such agreement, and if such portion has not yet
been  conveyed  by  Seller to  Buyer,  Seller  shall  cooperate  with  Buyer to
effectuate the terms of such agreement.

     2. Items set forth in a letter from Tamra N. Underwood, Esq. to James R.
Wear, Esq. dated December 14, 1999, to the extent such items relate to all or
any portion of the Property not under the beneficial control of Seller.
<PAGE>

                                   EXHIBIT D

                               Form of Grant Deed

Order No.
Escrow No.
Loan No.

WHEN RECORDED MAIL TO:
Loeb & Loeb LLP
345  Park Avenue

New York, NY 10154-0037
Attention: Michael D. Beck, Esq.

------------------------------------------------------------------------------
                                      SPACE ABOVE THIS LINE FOR RECORDER'S USE

MAIL TAX STATEMENTS TO:
Trimont Land Holdings, Inc.           DOCUMENTARY TRANSFER TAX $23,100.00
c/o Booth Creek Ski Holdings, Inc.      X   Computed on the consideration or
1000 South Frontage Road, Suite 100   ----- value of property conveyed; OR
Vail, CO 81657
Attention: Christopher P. Ryman       ----- Computed on the consideration or
                                            value less liens or encumbrances at
                                            time of sale.

                                      -----------------------------------------
                                      Signature of Declarant or Agent
                                      determining tax - Firm Name

-------------------------------------------------------------------------------

                             CORPORATION GRANT DEED

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Trimont
Land Company,

a corporation organized under the laws of the State of California does hereby

GRANT to Trimont Land Holdings, Inc., a Delaware corporation

the real property in the County of Placer,  State of  California,  described as
Exhibit A attached hereto and made a part hereof (the "Land"),

RESERVING  THEREFROM (i) any and all physical  improvements  on, under or above
the Land and (ii) any and all water and water rights, ditches and ditch rights,
reservoir  and  reservoir  rights,  wells and well  rights,  springs and spring
rights, whether surface or subsurface, tributary or non-tributary,  adjudicated
or unadjudicated,  used on or in connection with the Land,  including,  without
limitation, the collection of surface run off water from the Land.

Dated: September    , 2000
                ----
                                         TRIMONT LAND COMPANY

                                         By:
                                            -----------------------------------
                                             Elizabeth J. Cole, Executive Vice
                                             President
<PAGE>

STATE OF NEW YORK    )
                       ) SS.:
COUNTY OF NEW YORK)

            On  the  day  of  September,   2000  before  me,  the  undersigned,
personally  appeared Elizabeth J. Cole,  personally known to me or proved to me
on the  basis of  satisfactory  evidence  to be the  individual  whose  name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her capacity,  and that by his/her signature on the instrument,
the  individual,  or the  person  upon  behalf of which the  individual  acted,
executed the instrument.

--------------------------------
Notary Public

                     MAIL TAX STATEMENTS AS DIRECTED ABOVE

<PAGE>

                                   EXHIBIT A

                                   ---------
<PAGE>

                                   EXHIBIT E

                               Personal Property

      All personal  property  delineated  on this Exhibit  shall be conveyed to
Buyer by a quit claim bill of sale without payment of additional  consideration
at the Closing.

                                     NONE.

<PAGE>

                                   EXHIBIT F

                                  Initial Note

THIS  SUBORDINATED  SECURED  CONVERTIBLE NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").  NO SALE OR DISPOSITION  MAY BE
EFFECTED  EXCEPT IN  COMPLIANCE  WITH  RULE 144  UNDER THE ACT OR AN  EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR UPON RECEIPT OF AN OPINION OF COUNSEL
FOR THE HOLDER,  SATISFACTORY  TO THE BORROWER,  THAT SUCH  REGISTRATION IS NOT
REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND
EXCHANGE COMMISSION.

PAYMENT OF THIS NOTE AND THE RIGHTS OF THE HOLDER  HEREOF ARE  SUBORDINATED  TO
THE PRIOR PAYMENT OF CERTAIN OTHER INDEBTEDNESS OF TRIMONT LAND HOLDINGS, INC.,
AND TO THE RIGHTS OF THE HOLDER THEREOF, PURSUANT TO THE TERMS OF SUBORDINATION
SET FORTH BELOW.

                              SUBORDINATED SECURED

                                CONVERTIBLE NOTE

$3,150,000                                                  September   , 2000
                                                                     ---

     FOR VALUE RECEIVED,  TRIMONT LAND HOLDINGS,  INC., a Delaware corporation,
having an address of 1000 South Frontage Road West,  Suite 100, Vail,  Colorado
81657,  unconditionally and without set-off or counterclaim  promises to pay to
TRIMONT LAND  COMPANY,  or its assigns,  the principal sum of Three Million One
Hundred Fifty Thousand Dollars and No/100 ($3,150,000),  together with interest
from the date of this  Subordinated  Secured  Convertible Note (this "Note") on
the unpaid  principal  balance at a rate equal to ten percent  (10%) per annum,
computed  on the basis of the actual  number of days  elapsed and a year of 360
days.  Subject to the provisions of Section 2 below,  interest shall be payable
quarterly,  commencing October 15, 2000 and continuing on the last business day
of each fiscal quarter of the Borrower  thereafter  until the Maturity Date, at
which time all unpaid  principal,  together  with any then  unpaid and  accrued
interest and other amounts payable hereunder, shall be due and payable in full.

1. DEFINITIONS.

     As used in this Note, the following  capitalized  terms have the following
meanings:

     1.1 "BORROWER" shall mean Trimont Land Holdings, Inc. and any Person which
shall  succeed to or assume its  obligations  under this Note  pursuant  to the
terms hereof.

     1.2  "CERTIFICATE"  shall mean the  Certificate  of  Incorporation  of the
Borrower, as amended from time to time.

     1.3 "CHANGE OF CONTROL" of any Person shall mean the occurrence of any of
the following: (a) the acquisition by any other Person, or two or more other
Persons acting in concert, of beneficial ownership (within the meaning of Rule
<PAGE>

13d-3 of the Securities and Exchange  Commission under the Securities  Exchange
Act of 1934, as amended),  directly or indirectly, of Equity Securities of such
Person  representing  greater than fifty percent  (50%) of the combined  voting
power of all Equity  Securities of such Person entitled to vote in the election
of directors, or the execution and delivery by any other Person, or two or more
other Persons  acting in concert,  of any contract or arrangement  which,  upon
consummation,  will result in the foregoing;  (b) any change in the composition
of the board of  directors of such Person  having the effect  that,  during any
twenty-four month (24) period, individuals who were directors of such Person on
the first day of such period,  together  with any directors who are approved by
the  directors  who were  directors at the  beginning of such period,  cease to
constitute a majority of the board of directors of such Person; (c) the sale of
all or substantially  all of the assets of such Person;  or (d) the acquisition
of such Person by another Person.

     1.4 "COMMON  STOCK" shall mean the Common Stock,  $1.00 par value,  of the
Borrower.

     1.5  "EAST-WEST  JOINT VENTURE"  shall mean,  collectively,  (i) the joint
venture to be known as Northstar Mountain  Properties,  LLC, a Delaware limited
liability company, between the Borrower and East West Partners, Inc. and/or its
affiliates,  successors or transferees in interest,  to which joint venture the
Borrower will transfer:  up to 750 acres of real estate located in the ski area
development  known  as  Northstar-at-Tahoe  for  purposes  of  developing  such
property in exchange for cash  consideration  and/or a percentage  of the gross
sales price of the property  developed and sold by the joint venture and (ii) a
joint venture to be formed  between the Borrower and East West  Partners,  Inc.
and/or its  affiliates,  successors or transferees in interest,  to which joint
venture the Borrower will  transfer its existing  golf course  and/or  property
management business in the ski area development known as Northstar-at-Tahoe for
purposes of owning and  operating  such  businesses  in exchange  for an equity
interest in the joint venture  and/or cash  consideration;  and (iii) any other
joint venture or business activity  contemplated by the Operating  Agreement of
Northstar Mountain Properties, LLC, the Agreement for Purchase and Sale of Real
Property by which the Borrower transfers the above-referenced  real property to
Northstar  Mountain  Properties,  LLC  or  any  other  agreement  executed  and
delivered pursuant to any of the foregoing.

     1.6 "EQUITY  SECURITIES"  of any Person  shall mean (a) all common  stock,
preferred stock,  participations,  shares,  or other equity interests in and of
such  Person  (regardless  of how  designated  and  whether  or not  voting  or
non-voting)  and (b) all  warrants,  options and other rights to acquire any of
the foregoing.

     1.7 "EVENT OF DEFAULT" has the meaning given in Section 7 hereof.

     1.8  "FUNDAMENTAL  CHANGE"  of any  Person  shall  mean:  (a) a merger  or
consolidation of such Person,  direct or indirect,  whether by operation of law
or  otherwise,  in which  such  Person  is not the  surviving  entity,  (b) any
liquidation,  winding up or dissolution of such Person,  or (c) any sale of all
or substantially all of the assets of such Person.

     1.9  "HOLDER"  shall mean  Trimont Land Company or any Person who shall at
the time be the holder of this Note.

<PAGE>

     1.10  "INDEBTEDNESS"  of any Person  shall mean and include the  aggregate
amount of, without duplication:  (a) all obligations for borrowed money of such
Person,  (b) all  obligations  of such Person  evidenced by bonds,  debentures,
notes or other similar  instruments,  (c) all obligations of such Person to pay
the deferred purchase price of property or services,  other than trade payables
incurred in the ordinary course of business consistent with past practices, (d)
all obligations of such Person with respect to capital leases, (e) all guaranty
obligations of such Person,  (f) all  obligations  created or arising under any
conditional  sale or other title  retention  agreement with respect to property
acquired  by  such  Person,   and  (g)  all  reimbursement  and  other  payment
obligations of such Person,  contingent or otherwise,  in respect of letters of
credit.

     1.11  "LIEN"  shall  mean,  with  respect to any  property,  any  security
interest, mortgage, pledge, lien, claim, charge or other encumbrance in, of, or
on such property or the income therefrom,  including,  without limitation,  the
interest of a vendor or lessor  under a  conditional  sale  agreement,  capital
lease or other title retention  agreement (but excluding any  precautionary UCC
filing with respect to an operating  lease), or any agreement to provide any of
the foregoing and the filing of any financing  statement or similar  instrument
under the Uniform Commercial Code or comparable law of any jurisdiction.

     1.12 "MATERIAL  ADVERSE  EFFECT" shall mean a material  adverse effect on:
(a) the business,  assets,  operations,  or financial condition of the Borrower
and its  Subsidiaries,  taken as a whole, or (b) the rights and remedies of the
Holder under this Note or any of the other Transaction Documents.

     1.13 "MATURITY DATE" shall mean September   , 2005.
                                              ---

     1.14  "OBLIGATIONS"  of the  Borrower  shall mean and  include  all loans,
advances,  debts,  liabilities and obligations,  howsoever arising, owed by the
Borrower to the Holder of every kind and description  (whether or not evidenced
by any note or  instrument  and whether or not for the  payment of money),  now
existing or hereafter  arising  under or pursuant to the terms of this Note and
the  other  Transaction  Documents,  including  all  interest,  fees,  charges,
expenses,  attorneys' fees and costs and accountants' fees and costs chargeable
to and payable by the Borrower hereunder and thereunder,  in each case, whether
direct or indirect,  absolute or contingent,  due or to become due, and whether
or not arising  after the  commencement  of a proceeding  under Title 11 of the
United  States Code (11 U.S.C.  Section 101 et seq.),  as amended  from time to
time (including post-petition interest) and whether or not allowed or allowable
as a claim in any such proceeding.

     1.15  "PERSON"  shall mean and include an  individual,  a  partnership,  a
corporation  (including a business  trust),  a joint stock  company,  a limited
liability  company,  an  unincorporated  association,  a joint venture or other
entity, or a governmental authority.

     1.16 "PLEDGE  AGREEMENT" shall mean the Pledge  Agreement  executed by the
Borrower in favor of the Holder, dated of even date herewith.

     1.17 "SENIOR SECURED NOTE PURCHASE AGREEMENT" shall mean the Note Purchase
Agreement,  dated July 29, 1999  between the  Borrower  and John  Hancock  Life
<PAGE>

insurance  Company,  as the  same has  been or may be  supplemented,  modified,
amended or restated from time to time.

     1.18  "SUBSIDIARY"  of any Person shall mean: (a) any corporation of which
more than 50% of the issued and outstanding  Equity  Securities having ordinary
voting power to elect a majority of the Board of Directors of such  corporation
is at the time directly or indirectly  owned or controlled by such Person,  (b)
any partnership,  joint venture, or other association of which more than 50% of
the equity interest having the power to vote,  direct or control the management
of such partnership, joint venture or other association is at the time directly
or  indirectly  owned and  controlled  by such  Person,  (c) any  other  entity
included in the financial statements of such Person on a consolidated basis.

     1.19  "TRANSACTION  DOCUMENTS" shall mean (a) this Note and any other note
issued by the Borrower to the Holder in replacement  or partial  replacement of
this  Note,  (b) the  Pledge  Agreement,  (c)  all  amendments,  exhibits,  and
schedules to the foregoing,  and (d) all other documents or agreements executed
in connection herewith or any other Transaction Document.

     Any other capitalized term used herein but not otherwise defined herein or
in Section 5 shall have the meaning  ascribed to it in the Senior  Secured Note
Purchase Agreement.

2. PROVISIONS CONCERNING CAPITALIZED INTEREST.

     2.1 OPTION OF THE BORROWER TO  CAPITALIZE  INTEREST.  The Borrower may, at
its option  (upon notice as provided in Section  2.2),  in lieu of paying cash,
pay all (but not less than all) of the  interest  which is due and  payable  on
this Note on any regularly  scheduled  interest payment date (the interest that
is not so paid in cash on any regularly  scheduled  interest payment date being
hereinafter  referred  to as the  "Capitalized  Interest")  by  increasing  the
principal amount of this Note, as of such regularly  scheduled interest payment
date  (any  such  date on and as of  which  the  principal  amount  shall be so
increased being hereinafter  referred to as an "Adjustment Date"), by an amount
equal  to  the  Capitalized  Interest,   provided  that  (a)  for  purposes  of
calculating  the amount of the  Capitalized  Interest,  the applicable  rate of
interest  of this  Note  shall  be  twelve  (12%)  per  annum,  and (b) on such
regularly  scheduled interest payment date, the Borrower either pays in cash in
full all of the interest which is due and payable on such date on the Note then
outstanding or capitalizes all of the interest which is due and payable on such
date on the Note then  outstanding.  If the Borrower  shall, in accordance with
the terms of this Section 2,  exercise such option,  then,  from and after each
Adjustment  Date, the  outstanding  principal  amount of the Note shall without
further  action,  be increased by an amount equal to the  Capitalized  Interest
added thereto as of such Adjustment Date.

     2.2 NOTICE FROM THE  BORROWER.  To exercise its option under  Section 2.1,
the Borrower  shall deliver to the Holder of this Note not less than 10 or more
than 30 days prior to an Adjustment Date, an Officers'  Certificate which shall
specify:

          (a) the applicable Adjustment Date;

          (b) the aggregate  amount of  Capitalized  Interest to be added as of
such Adjustment Date to the principal  amount of this Note then outstanding and
<PAGE>

the amount of Capitalized  Interest to be added as of such  Adjustment  Date to
the principal amount of this Note then held by the Holder;

          (c) the aggregate  principal amount of this Note then outstanding and
the  principal  amount of this Note then held by the Holder,  in each case both
before  and  after  giving  effect  to the  adjustments  to be  made as of such
Adjustment Date;

          (d) the aggregate  amount of each interest  payment to be made on and
after such Adjustment Date on this Note then  outstanding (if paid in cash) and
the amount of each such interest  payment on this Note then held by the Holder;
and

          (e) in reasonable detail, all computations made in determining the
foregoing.

In the absence of manifest error,  the computations set forth in such Officers'
Certificate shall be deemed final, binding and conclusive upon the Borrower and
the Holder of this  Note,  unless,  in any case,  the Holder of this Note shall
notify the Borrower in writing of its objection (in  reasonable  detail) to any
portion  of such  Officers'  Certificate  within 30 days of the date upon which
such  Officers'  Certificate  was furnished to the Holder of this Note. In such
event, the Borrower shall, at its expense, within 15 days following its receipt
of any such notice from the Holder of this Note,  deliver to the Holder of this
Note a certificate signed by a firm of independent certified public accountants
of  recognized  national  standing  (which may be the  regular  auditors of the
Borrower),  setting forth in reasonable  detail any  adjustments  which, in the
opinion of such  accountants,  should be made to the  amounts set forth in such
Officers'  Certificate  in order for such amounts to be correct and  consistent
with the terms hereof and of the other Transaction Documents and, in reasonable
detail,  all  computations  made  in  determining  any  such  adjustments.  The
certificate of any such firm of accountants shall be conclusive evidence of the
correctness of such amounts under this Section 2.2.

     2.3  LIMITATIONS  ON THE OPTION OF THE  BORROWER TO  CAPITALIZE  INTEREST.
Notwithstanding  anything  to the  contrary  contained  in this  Section 2, the
Borrower may not  capitalize  any interest  pursuant to the  provisions of this
Section  2 on any  Adjustment  Date if on such  Adjustment  Date  any  Event of
Default shall have occurred and be continuing.

3. PLACE OF PAYMENT.

     All amounts payable  hereunder shall be payable at the address  designated
by the Holder.

4. PREPAYMENT.

     The  Borrower  shall not have a right to  prepay  this Note in whole or in
part at any time, without the prior written consent of the Holder, which may be
granted or withheld its sole and absolute discretion;  provided,  however, that
following the payment in full of the Senior Secured Note, all Distributions and
all  payments  of the Booth  Creek  Return  (as such  terms are  defined in the
Operating  Agreement of Northstar  Mountain  Properties,  LLC)  received by the
Borrower  shall be  applied to the  prepayment  of this Note until such time as
this Note is paid in full.

<PAGE>

5. SUBORDINATION.

     5.1  SUBORDINATION - GENERAL.  To the extent  specified in this Section 5,
all  payments  of  this  Note  and  all  rights  of the  Holder  hereunder  are
subordinate  to the prior  payment  in full of the  Superior  Indebtedness  (as
defined below) and to the rights of the holder of the Superior Indebtedness.

     5.2 CERTAIN DEFINITIONS. As used in this Section 5, the following terms
have the following meanings:

               "BANKRUPTCY CODE" shall mean 11 U.S.C.ss.  101 et seq., as from
          time to time hereafter amended, and any successor or similar statute.

               "INTERCREDITOR   AGREEMENT"   shall   mean   the   Intercreditor
          Agreement,   dated  September  ,  2000,  between  John  Hancock  Life
          Insurance Company and Trimont Land Company.

               "SENIOR SECURED NOTE" shall mean the Senior Secured Note,  dated
          July 29, 1999, in the original principal amount of $8,500,000 made by
          the  Borrower  in  favor  of John  Hancock  Life  Insurance  Company,
          together  with any notes issued in exchange  therefor or  replacement
          thereof, including, without limitation, upon any refinancing thereof,
          all as amended, modified or supplemented from time to time.

               "SUBORDINATED  INDEBTEDNESS"  shall mean the principal amount of
          the  indebtedness  evidenced  hereby,  together  with  any  interest,
          premium  and any other  amount  (including  any fee or  expense)  due
          thereon or payable with respect  thereto or in connection  therewith,
          including any such amounts payable by any guarantor of the same.

               "SUPERIOR  INDEBTEDNESS"  shall mean the principal amount of the
          indebtedness   evidenced   by  the  Senior   Secured  Note  (and  any
          indebtedness incurred to refinance the Senior Secured Note), together
          with  any  interest   (including  any  interest  accruing  after  the
          commencement of any action or proceeding under the federal bankruptcy
          laws,  as now or  hereafter  constituted,  or  any  other  applicable
          domestic or foreign federal or state bankruptcy,  insolvency or other
          similar law, and any other  interest  that would have accrued but for
          the commencement of such proceeding, whether or not any such interest
          is allowed as an enforceable claim in such  proceeding),  premium and
          any other  amount  (including  any fee or  expense)  due  thereon  or
          payable with respect  thereto or in connection  therewith,  including
          any such amounts  payable by any guarantor of the Senior Secured Note
          (and any indebtedness incurred to refinance the Senior Secured Note);
          provided, however, that the principal amount of Superior Indebtedness
          shall not exceed Fifteen  Million Dollars  ($15,000,000)  without the
          prior   written   consent  of  the   holders   of  the   Subordinated
          Indebtedness.

<PAGE>

     5.3 SUBORDINATED  INDEBTEDNESS  SUBORDINATED TO SUPERIOR INDEBTEDNESS;  NO
AMENDEMENTS.

          (a) The Borrower,  for itself and its  successors and assigns and for
its Subsidiaries and the successors and assigns of such Subsidiaries, covenants
and agrees, and each holder of any Subordinated Indebtedness, by its acceptance
thereof,  shall be  deemed  to have  agreed,  notwithstanding  anything  to the
contrary  herein or any  other  agreement,  document  or  instrument,  that the
payment of the Subordinated  Indebtedness shall be subordinated,  to the extent
and in the manner set forth in this Section 5, to the prior  payment in full in
cash  of all  Superior  Indebtedness  and  that  each  holder  of the  Superior
Indebtedness,  whether now outstanding or hereafter created,  incurred, assumed
or guaranteed,  shall be deemed to have acquired such Superior  Indebtedness in
reliance upon the provisions  contained in this Section 5. No present or future
holder of the Superior Indebtedness shall be prejudiced in the right to enforce
the  subordination of the Subordinated  Indebtedness  effected pursuant to this
Section 5 by any act or  failure to act on the part of the  Borrower  or any of
its Subsidiaries or affiliates.

          (b) Neither this  Section 5 nor any of the terms of the  Subordinated
Indebtedness relating to the timing or amount of any payment (or prepayment) of
the  principal  of  or  premium,  if  any,  or  interest  on  the  Subordinated
Indebtedness,  or any other amount  (including any fee or expense) due thereon,
nor any other material  covenant in respect of the  Subordinated  Indebtedness,
shall be amended  without the  written  consent of the holder or holders of not
less than 66 2/3% in aggregate principal amount of the Superior Indebtedness at
the time outstanding.

          (c) Unless and until the Superior  Indebtedness has been indefeasibly
paid in full in cash,  the Borrower  shall not, and shall not permit any of its
Subsidiaries to, (i) pay or prepay any of the Subordinated Indebtedness, except
that the Borrower may pay interest on the Subordinated Indebtedness as and when
due until such time as the holders of the Subordinated  Indebtedness shall have
received notice from any holder of the Superior  Indebtedness  that an event of
default has  occurred  under the  Superior  Indebtedness,  or (ii) grant to the
holder of the Subordinated  Indebtedness any Lien in or on any of the assets of
the  Borrower  or  any  of  its   Subsidiaries   to  secure  the   Subordinated
Indebtedness,  other than as  provided  in the Pledge  Agreement,  without  the
written consent of all of the holders of the Superior  Indebtedness at the time
outstanding.

          (d) Unless and until the Superior  Indebtedness has been indefeasibly
paid in full in cash, and except as explicitly  provided in this Section 5, (i)
no  holder  of any of the  Subordinated  Indebtedness  shall  have any right to
declare the Subordinated  Indebtedness (or any portion thereof) due and payable
before  its  stated  maturity,  and (ii) no holder  of any of the  Subordinated
Indebtedness  shall have any  claim,  remedy or right to  proceed  against  the
Borrower  for the  payment  of any sum  owing on  account  of the  Subordinated
Indebtedness.  Each  holder of  Subordinated  Indebtedness,  by its  acceptance
thereof, waives any claim, remedy or right to proceed against any holder of any
Superior Indebtedness (or any agent of any such holder),  whether arising under
<PAGE>

any law (including any constitution), statute, rule or regulation or otherwise,
to  challenge  the  propriety  of any  action or  inaction  taken or omitted in
respect of any of the Superior Indebtedness.

     5.4  DISSOLUTION,  LIQUIDATION,  REORGANIZATION,  ETC. Upon any payment or
distribution of the assets of the Borrower (or any of its  Subsidiaries) of any
kind or character,  whether in cash, property or securities,  to creditors upon
any  dissolution,  winding-up,  total or partial  liquidation,  reorganization,
composition, arrangement, adjustment or readjustment of the Borrower (or any of
its  Subsidiaries)  or  its  (or  their)   securities,   whether  voluntary  or
involuntary,  or in  bankruptcy,  insolvency,  reorganization,  liquidation  or
receivership  proceedings,  or upon a general  assignment  for the  benefit  of
creditors,  of any other  marshalling  of the  assets  and  liabilities  of the
Borrower (or any of its Subsidiaries), or otherwise (hereinafter a "Liquidation
Payment"), then and in any such event:

          (a) the  holders of the  Superior  Indebtedness  shall be entitled to
receive  payment in full in cash of all  amounts  due or to become due on or in
respect of all Superior Indebtedness,  before any Liquidation Payment,  whether
in cash,  property  or  securities,  is made on  account  of or  applied to the
Subordinated Indebtedness;

          (b) the  Subordinated  Indebtedness  shall  forthwith  become due and
payable, and any Liquidation Payment,  whether in cash, property or securities,
to which the holders of the Subordinated  Indebtedness would be entitled except
for the provisions of this Section 5, shall be paid or delivered by any debtor,
custodian,  liquidating trustee,  agent or other Person making such Liquidation
Payment,  directly  to the  holders  of the  Superior  Indebtedness,  or  their
representative or  representatives,  ratably according to the aggregate amounts
remaining unpaid on account of such Superior  Indebtedness,  for application to
the  payment  thereof,  to the  extent  necessary  to  pay  all  such  Superior
Indebtedness  in full in cash after giving effect to any concurrent  payment or
distribution,   or  provision  therefor,   to  the  holders  of  such  Superior
Indebtedness;

          (c)  each  holder  of  the  Subordinated  Indebtedness  at  the  time
outstanding  hereby  irrevocably  authorizes  and  empowers  the holders of the
Superior  Indebtedness (or such holders'  representative or representatives) to
file claims in any applicable proceeding for and to prove and vote such claims,
and to collect  and receive and give  receipt for such  holder's  share of, any
Liquidation Payment; and

          (d) the holders of the  Subordinated  Indebtedness  shall execute and
deliver to the holders of the Superior  Indebtedness or their representative or
representatives all such further instruments confirming the above authorization
and all such  powers of  attorney,  proofs of claim,  assignments  of claim and
other  instruments,  and shall take all such other action, as may be reasonably
requested by the holders of the Superior Indebtedness or such representative or
representatives,  to enable such  claims and to carry out the  purposes of this
Section 5.

     5.5 NO PAYMENTS WITH RESPECT TO SUBORDINATED INDEBTEDNESS.

          (a) Except as permitted in Section  5.3(c),  the Borrower  shall not,
and shall not permit any of its Subsidiaries  to, directly or indirectly,  make
or agree to make, and the holders of the  Subordinated  Indebtedness  shall not
demand,  accept or receive,  any payment or distribution (in cash,  property or
<PAGE>

securities,  by set-off or otherwise),  direct or indirect, of or on account of
all  or any  portion  of  the  Subordinated  Indebtedness  until  the  Superior
Indebtedness has been indefeasibly paid in full in cash.

          (b) If, in  compliance  with the  provisions  of this  Section 5, the
Borrower  shall  fail  to  make a  payment  otherwise  due on the  Subordinated
Indebtedness  or shall fail to comply  with any other term of the  Subordinated
Indebtedness or any agreement,  document or instrument  related  thereto,  such
failure  shall not  constitute  a default or breach by the  Borrower  under the
Subordinated  Indebtedness and shall not give rise to any right or claim on the
part of any holder of any of the Subordinated Indebtedness.

     5.6 PAYMENTS AND DISTRIBUTIONS RECEIVED. If any payment or distribution of
any kind or  character,  whether  in cash,  property  or  securities,  shall be
received by any holder of the  Subordinated  Indebtedness in  contravention  of
this  Section 5, such  payment or  distribution  shall be held in trust for the
benefit of, and shall be paid over or delivered and transferred to, the holders
of the  Superior  Indebtedness,  or their  representative  or  representatives,
ratably  according to the  aggregate  amount unpaid on account of such Superior
Indebtedness,  for application to the payment thereof,  to the extent necessary
to pay all such Superior  Indebtedness in full in cash,  after giving effect to
any concurrent payment or distribution,  or provision therefor,  to the holders
of such Superior Indebtedness. In the event of the failure of any holder of any
of the  Subordinated  Indebtedness  to endorse  or assign  any such  payment or
distribution,  any  holder  of  the  Superior  Indebtedness  or  such  holder's
representative is hereby irrevocably authorized to endorse or assign the same.

     5.7  SUBROGATION.  Subject  to the  indefeasible  payment  in  full of all
Superior  Indebtedness  in cash,  in the event  cash,  property  or  securities
otherwise   payable  or  deliverable   to  the  holders  of  the   Subordinated
Indebtedness  shall have been applied pursuant to this Section 5 to the payment
of the Superior  Indebtedness,  then and in each such case,  the holders of the
Subordinated  Indebtedness  shall be subrogated to the rights of each holder of
Superior Indebtedness to receive any further payment or distribution in respect
of or  applicable to the Superior  Indebtedness;  and, for the purposes of such
subrogation,  no  payment  or  distribution  to the  holders  of  the  Superior
Indebtedness  of any  cash,  property  or  securities  to which  any  holder of
Subordinated  Indebtedness  would be entitled except for the provisions of this
Section 5 shall, and no payment over pursuant to the provisions of this Section
5 to the holders of Superior  Indebtedness  by any holders of the  Subordinated
Indebtedness  shall,  as between the  Borrower,  its  creditors  other than the
holders of Superior Indebtedness and the holders of Subordinated  Indebtedness,
be  deemed  to be a  payment  by the  Borrower  to or on  account  of  Superior
Indebtedness.

     5.8 NO  TRANSFERS.  In no  event  may  any  Subordinated  Indebtedness  be
transferred  without  the prior  written  consent of all of the  holders of the
Superior  Indebtedness.  The Borrower shall cause each permitted  transferee of
Subordinated Indebtedness to acknowledge and agree to the terms of this Section
5 pursuant to a writing in form and substance  reasonably  satisfactory  to the
holders of the Superior Indebtedness.

     5.9  SUBORDINATION  NOT  AFFECTED,  ETC.  The terms of this Section 5, the
subordination  effected  hereby and the rights created hereby of the holders of
the Superior Indebtedness shall not be affected by (a) any amendment or
<PAGE>

modification  of or  supplement to the Superior  Indebtedness  (or any renewal,
extension,  refinancing  or refunding  thereof) or any  agreement,  document or
instrument  relating  thereto,  including,   without  limitation,  any  of  the
foregoing  which results in any increase in the principal of, and/or  interest,
premium and other amount due on, any Superior Indebtedness, (b) any exercise or
non-exercise of any right,  power or remedy under or in respect of any Superior
Indebtedness  (or any  security  or  collateral  therefor)  or  pursuant to any
agreement,  document or instrument relating thereto or (c) any waiver, consent,
release, indulgence, delay or other action, inaction or omission, in respect of
any Superior  Indebtedness (or any security or collateral therefor) or pursuant
to any agreement,  document or instrument relating thereto,  whether or not any
holder of any Subordinated  Indebtedness  shall have had notice or knowledge of
any of the foregoing.

     5.10 OBLIGATIONS  UNIMPAIRED.  The provisions of this Section 5 are solely
for the  purpose of  defining  the  relative  rights of the holders of Superior
Indebtedness  on the one hand and the holders of  Subordinated  Indebtedness on
the other hand, and (a) subject to the rights,  if any, under this Section 5 of
the  holders of  Superior  Indebtedness,  nothing  in this  Section 5 shall (i)
impair as between the Borrower and the holder of any Subordinated  Indebtedness
the obligation of the Borrower,  which is unconditional and absolute, to pay to
the holder thereof all amounts due thereon in accordance with the terms thereof
or (ii) except as otherwise provided in Section 5.12, prevent the holder of any
Subordinated  Indebtedness  from  exercising  all  remedies  available  to such
holder,  whether arising herein,  in any other related  agreement,  document or
instrument,  pursuant  to  applicable  law or  otherwise,  and (b) no Person is
entitled  to any third  party  beneficiary  rights or other  similar  rights on
account of or under  this  Section 5 other  than the  holders  of the  Superior
Indebtedness.

     5.11 REINSTATEMENT OF TERMS OF SUBORDINATION.  Notwithstanding anything to
the contrary  contained herein, the provisions of this Section 5 shall continue
to be  effective  or be  reinstated,  as the  case  may be,  if at any time any
payment on any Superior  Indebtedness is rescinded,  annulled or must otherwise
be  returned  by any  holder of  Superior  Indebtedness,  upon the  insolvency,
bankruptcy,  dissolution,  liquidation or reorganization of the Borrower or any
of its  Subsidiaries  or  otherwise,  all as thought  such payment had not been
made.

     5.12  LIMITATION  ON  RIGHT OF  ACTION.  Notwithstanding  anything  to the
contrary contained herein or in any related agreement,  document or instrument,
each holder of Subordinated  Indebtedness  agrees that, so long as any Superior
Indebtedness is outstanding, such holder of Subordinated Indebtedness shall not
exercise any right or remedy  available  to it in respect of such  Subordinated
Indebtedness,  unless  and until the first to occur of (a) the  holders  of the
Superior  Indebtedness  shall  have  commenced  enforcement  action in  respect
thereof,  and,  in such  event,  the  rights  of such  holder  of  Subordinated
Indebtedness and the rights of the holders of the Superior  Indebtedness  shall
also be governed by the Intercreditor Agreement; and (b) a proceeding under the
Bankruptcy  Code  or any  similar  state  statute  or law  (including  any  law
providing for the  appointment of a receiver or other similar  official)  shall
have been  commenced by the  Borrower or against the Borrower by Persons  other
than the holder of the  Subordinated  Indebtedness;  provided  that in no event
shall any holder of the Subordinated  Indebtedness seek to attach or obtain any
Lien on any of the assets of the  Borrower  or any of its  Subsidiaries  (other
than those assets which are encumbered by the Lien of the Pledge  Agreement) or
to foreclose  upon or sell any such other assets.  The Borrower shall place the
following legend  conspicuously on each instrument  evidencing the Subordinated
Indebtedness:

<PAGE>

                  "Payment of this Note and the rights of the holder hereof are
                  subordinated   to  the  prior   payment  of   certain   other
                  indebtedness  of  Trimont  Land  Holdings,  Inc.,  and to the
                  rights  of the  holder  thereof,  pursuant  to the  terms  of
                  subordination set forth below."

6. SECURITY.

     The full amount of this Note is secured by the  collateral  identified  in
the Pledge Agreement.  The Borrower shall not,  directly or indirectly  create,
permit or suffer to exist,  and shall defend such  collateral  against and take
such other action as is necessary to remove, any Lien on or in such collateral,
or in any portion thereof, except as permitted in the Pledge Agreement.

7. EVENTS OF DEFAULT.

     The  occurrence  of any of the  following  shall  constitute  an "Event of
Default"  under  this  Note  and the  other  Transaction  Documents;  provided,
however,   that  if  the  holders  of  the  Superior   Indebtedness  waive  any
corresponding   event  of  default  under  the  Senior  Secured  Note  Purchase
Agreement,  then such Event of Default shall be deemed waived by the Holder for
so long as such waiver by the holders of the Superior  Indebtedness  remains in
effect:

     7.1  FAILURE  TO PAY.  The  Borrower  shall  fail to pay  when due (a) any
principal payment hereunder or (b) any interest or other payment required under
the terms of this Note or any other Transaction Document; or

     7.2 BREACHES OF CERTAIN  COVENANTS.  The Borrower shall fail to observe or
perform any other  covenant,  obligation,  condition or agreement  set forth in
this Note; or

     7.3 BREACHES OF OTHER  COVENANTS.  The  Borrower  shall fail to observe or
perform any other covenant, obligation, condition or agreement contained in any
other Transaction Document; or

     7.4   REPRESENTATIONS  AND  WARRANTIES.   Any  representation,   warranty,
certificate,  or other statement  (financial or otherwise) made or furnished by
or on behalf of the Borrower to the Holder in writing in  connection  with this
Note or any of the other  Transaction  Documents,  or as an  inducement  to the
Holder to enter into this Note and the other  Transaction  Documents,  shall be
false, incorrect, incomplete or misleading in any material respect when made or
furnished; or

     7.5 TRANSACTION  DOCUMENTS.  Any Transaction Document or any material term
thereof  shall cease to be, or be asserted by the  Borrower not to be, a legal,
valid and binding obligation of the Borrower enforceable in accordance with its
terms; or

     7.6 NEW BUSINESS ACTIVITIES. The Borrower or any of its Subsidiaries shall
acquire any  material  assets other than those held by it on the date hereof or
as  contemplated  in the East-West  Joint Venture or the Borrower or any of its
Subsidiaries  shall conduct any business  activities other than those conducted
by it on the date hereof or as contemplated in the East-West Joint Venture.

<PAGE>

     7.7 CHANGE OF  CONTROL;  FUNDAMENTAL  CHANGE.  The  Borrower or any of its
Subsidiaries shall suffer a Change of Control or a Fundamental Change.

     7.8 OTHER  OBLIGATIONS.  The  Borrower  or any of its  Subsidiaries  shall
(a)(i)  fail to make  any  payment  when  due  under  the  terms  of any  bond,
debenture,  note or other evidence of  Indebtedness  to be paid by it, and such
failure shall continue beyond any grace period  provided with respect  thereto,
or (ii) default in the  observance or  performance  of any  agreement,  term or
condition  contained  in any such bond,  debenture,  note or other  evidence of
Indebtedness,  or any other  contract or agreement;  and (b) the effect of such
failure  or default is to cause,  or permit the other  party  thereof to cause,
Indebtedness in an aggregate amount of Fifty Thousand Dollars ($50,000) or more
to become due prior to its stated date of maturity or cause or permit the other
party thereof to terminate said contract; or

     7.9  JUDGMENTS.  A final  judgment  or order for the  payment  of money in
excess of Two  Hundred  Fifty  Thousand  Dollars  ($250,000)  shall be rendered
against  the  Borrower  or any of its  Subsidiaries  and the same shall  remain
unpaid for a period of thirty (30) days  during  which  execution  shall not be
effectively stayed, or any judgment,  writ, assessment,  warrant of attachment,
or execution or similar process shall be issued or levied against a substantial
part of the  property  of the  Borrower  or any of its  Subsidiaries  and  such
judgment,  writ, or similar process shall not be released,  stayed,  vacated or
otherwise dismissed within thirty (30) days after issue or levy; or

     7.10 VOLUNTARY BANKRUPTCY OR INSOLVENCY  PROCEEDINGS.  The Borrower or any
of its  Subsidiaries  shall (a) apply for or  consent to the  appointment  of a
receiver, trustee, liquidator or custodian of itself or of all or a substantial
part of its property, (b) be unable, or admit in writing its inability,  to pay
its debts  generally  as they  mature,  (c) make a general  assignment  for the
benefit of its or any of its creditors,  (d) be dissolved or liquidated in full
or in part,  (e) become  insolvent (as such term may be defined or  interpreted
under  any  applicable  statute),  (f)  commence  a  voluntary  case  or  other
proceeding seeking liquidation,  reorganization or other relief with respect to
itself or its debts under any  bankruptcy,  insolvency or other similar law now
or hereafter in effect or consent to any such relief or to the  appointment  of
or taking  possession of its property by any official in an involuntary case or
other proceeding  commenced  against it, or (g) take any action for the purpose
of effecting any of the foregoing; or

     7.11 INVOLUNTARY BANKRUPTCY OR INSOLVENCY PROCEEDINGS. Proceedings for the
appointment of a receiver,  trustee, liquidator or custodian of the Borrower or
any  of  its  Subsidiaries  or of all or a  substantial  part  of the  property
thereof,  or an  involuntary  case or other  proceedings  seeking  liquidation,
reorganization  or other  relief  with  respect to the  Borrower  or any of its
Subsidiaries  or the debts  thereof under any  bankruptcy,  insolvency or other
similar law now or  hereafter  in effect  shall be  commenced  and an order for
relief entered or such proceeding  shall not be dismissed or discharged  within
thirty (30) days of commencement; or

     7.12 MATERIAL ADVERSE EFFECT.  One or more conditions exist or events have
occurred which may result in a Material Adverse Effect.

8. RIGHTS OF HOLDER UPON DEFAULT.
<PAGE>

     Subject  to the  provisions  of  Section  5, (a) upon  the  occurrence  or
existence of any Event of Default  (other than an Event of Default  referred to
in  Sections  7.10 and 7.11) and at any time  thereafter,  the Holder  may,  by
written notice to the Borrower,  declare all outstanding Obligations payable by
the Borrower  hereunder to be immediately due and payable without  presentment,
demand,  protest  or any  other  notice of any  kind,  all of which are  hereby
expressly  waived,  anything  contained  herein  or in  the  other  Transaction
Documents to the contrary notwithstanding; (b) upon the occurrence or existence
of any Event of Default  described in Sections 7.10 and 7.11,  immediately  and
without notice, all outstanding  Obligations  payable by the Borrower hereunder
shall automatically  become immediately due and payable,  without  presentment,
demand,  protest  or any  other  notice of any  kind,  all of which are  hereby
expressly  waived,  anything  contained  herein  or in  the  other  Transaction
Documents to the contrary notwithstanding; and (c) in addition to the foregoing
remedies,  upon the occurrence or existence of any Event of Default, the Holder
may exercise any other right,  power or remedy granted to it by the Transaction
Documents or otherwise  permitted to it by law,  either by suit in equity or by
action at law, or both.

9. CONVERSION.

     9.1 CONVERSION BY HOLDER.  At any time on or before the Maturity Date, the
Holder shall have the right, at such Holder's option,  to convert the principal
amount of this Note  (excluding  any  capitalized  interest which may then have
been converted into principal  pursuant to Section 2), in whole but in no event
in part,  into 15% of the ownership  interest held by the Borrower in Northstar
LLC at the time of the conversion, subject to adjustment as provided in Section
10 below,  (the "Converted  Ownership  Interest"),  which  conversion  shall be
effected by the Borrower transferring the Converted Ownership Interest directly
to the  Holder.  That  portion,  if any,  of the  principal  hereof  which then
represents Capitalized Interest shall remain outstanding and due and payable on
the Maturity Date, together with all interest thereon pursuant to Section 2.

     9.2 CONVERSION PROCEDURE.

     (a)  CONVERSION  PURSUANT  TO SECTION  9.1.  Before  the  Holder  shall be
entitled to convert this Note into the Converted Ownership  Interest,  it shall
surrender  this Note,  duly  endorsed,  at the office of the Borrower and shall
give  written  notice,  postage  prepaid,  to the  Borrower  at  its  principal
corporate  office, of the election to convert the same pursuant to Section 9.1.
The Borrower shall, as soon as practicable  thereafter (but in any event within
ten (10) days thereafter), transfer and assign the Converted Ownership Interest
to the Holder by executing  and  delivering to the Holder such  instruments  of
assignment,  duly  executed  by the  Borrower,  as the  Holder  may  reasonably
request.  The conversion shall be deemed to have been made immediately prior to
the close of business on the date of the surrender of this Note, and the Person
or Persons  entitled  to receive  the  Converted  Ownership  Interest  shall be
treated for all purposes as the record holder or holders of Converted Ownership
Interest as of such date.

10. CONVERTED OWNERSHIP INTEREST ADJUSTMENTS.

     10.1 ADJUSTMENT FOR MANDATORY PREPAYMENTS.  Upon each mandatory prepayment
of any portion of this Note pursuant to Section 4, the percentage of the
<PAGE>

Borrower's  ownership  interest  in  Northstar  LLC into which this Note may be
converted shall be reduced to the end that the resulting  percentage  bears the
same  proportion  to 15% as the  outstanding  principal  balance  of this  Note
(excluding  Capitalized  Interest)  immediately  after such prepayment bears to
$3,150,000.

11. NOTICES OF RECORD DATE, ETC.

     11.1 NOTICES. In the event of

          (a) any  taking by the  Borrower  of a record of the  holders  of any
class of securities of the Borrower for the purpose of determining  the holders
thereof who are  entitled to receive any dividend  (other than a cash  dividend
payable  out of earned  surplus  at the same rate as that of the last such cash
dividend  theretofore  paid) or other  distribution,  or any right to subscribe
for,  purchase  or  otherwise  acquire  any shares of stock of any class or any
other securities or property, or to receive any other right; or

          (b) any  reclassification or recapitalization of the capital stock of
the Borrower or any Change of Control or Fundamental Change of the Borrower

the  Borrower  will mail to the Holder of this Note at least  thirty  (30) days
prior to the date of such event, a notice  specifying,  as applicable,  (i) the
date on which any such record is to be taken for the purpose of such  dividend,
distribution  or  right,  and  the  amount  and  character  of  such  dividend,
distribution  or  right;   (ii)  the  date  on  which  such   reclassification,
recapitalization, Change of Control or Fundamental Change is expected to become
effective and the record date for determining stockholders, if any, entitled to
vote thereon.

     11.2 RESERVATION OF STOCK ISSUABLE UPON CONVERSION.  The Borrower shall at
all times reserve and keep available out of its authorized but unissued  shares
of Common Stock  sufficient  shares to effect the  conversion of this Note into
the Conversion  Shares and if at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the conversion of this
Note in full,  then,  without  limitation  of such other  remedies  as shall be
available to the Holder of this Note,  the Borrower  shall take such  corporate
action as may,  in the  opinion  of  counsel,  be  necessary  to  increase  its
authorized  but  unissued  shares of Common  Stock to such  number of shares as
shall be sufficient for such purposes.

12. REPRESENTATIONS AND WARRANTIES.

     The Borrower represents and warrants that:

     12.1   ORGANIZATION,   STANDING,   ETC.  The  Borrower  and  each  of  its
Subsidiaries  is a corporation  duly  organized,  validly  existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
<PAGE>

requisite  corporate  power  and  authority  to  own,  lease  and  operate  its
properties,  to carry on its business as now conducted,  and now proposed to be
conducted,  to execute,  deliver and perform each of the Transaction  Documents
and to consummate the transactions  contemplated thereby and no approval of the
stockholders  of the  Borrower or any class  thereof is required in  connection
therewith which has not been obtained.

     12.2 NAMES;  JURISDICTION OF INCORPORATION,  SUBSIDIARIES ETC. Exhibit 5.2
to the Senior  Secured Note Purchase  Agreement  correctly  specifies as to the
Borrower (a) its legal name, (b) the  jurisdiction  of its  incorporation,  (c)
each jurisdiction (other than its jurisdiction of incorporation) in which it is
qualified to do business,  and (d) each  jurisdiction  in which it conducts any
business. The Borrower does not have any Subsidiary.

     12.3  QUALIFICATION.  Each of the  Borrower and its  Subsidiaries  is duly
qualified  or licensed to do business as a foreign  corporation  and is in good
standing in each jurisdiction in which the character of the properties owned or
leased or the nature of the activities  conducted makes such  qualification  or
licensing necessary,  except for those jurisdictions in which the failure to be
so  qualified  or licensed or to be in good  standing  has not resulted in, and
could not reasonably be expected to result in, a Material Adverse Change.

     12.4 BUSINESS,  ETC.  Following the closing of the East West  Transaction,
the Borrower  will be engaged in the business (the  "Business")  of (i) owning,
managing and selling the Acquired  Properties,  and the Phase II Properties and
(ii) owning and  managing an equity  interest in  Northstar  LLC.  Except for a
prior  transaction  in  connection  with which the  Borrower  incurred  certain
transaction  costs (all of which costs have been  reimbursed to the  Borrower),
prior to the closing of the East West Transaction, the Borrower had no material
assets or liabilities  and had not engaged in any  activities  other than those
incidental  to its  organization  and  the  consummation  of  the  transactions
contemplated by the Acquisition Documents,  the Phase II Acquisition Agreement,
the Phase II Seller Note and the East West Transaction Documents.

     12.5 CAPITAL STOCK.

          (a) Exhibit  5.5(a) to the Senior  Secured  Note  Purchase  Agreement
correctly and fully  specifies as to the Borrower and each of its  Subsidiaries
(i) its authorized and outstanding  Shares and (ii) the name of each record and
beneficial  owner of such Shares,  together with the number (and class, if any)
of such  Shares  held by each  such  Person  and the per  share  and  aggregate
consideration paid by such Person for such Shares (which consideration,  unless
otherwise  noted on such  exhibit,  was paid in cash in full on or prior to the
Closing Date).  All of the  outstanding  Shares of the Borrower and each of its
Subsidiaries are duly authorized, validly issued, fully paid and non-assessable
and are not subject to any preemptive right,  right of first refusal or similar
right on the part of the Borrower or any other Person.  All of such Shares have
been (or will  have  been)  offered,  issued  and sold in  accordance  with all
applicable  laws. The owners of the Shares indicated on such Exhibit 5.5(a) own
the Shares indicated on such exhibit free of any Lien, proxy, voting agreement,
voting trust, stockholders agreement or similar agreement or restriction.

          (b)  After  giving  effect  to the  transactions  consummated  at the
closing  of the East West  Transaction,  (i) there are no  outstanding  rights,
options,  warrants or agreements for the purchase from, or sale or issuance by,
<PAGE>

the Borrower or any of its  Subsidiaries of any of their  respective  Shares or
any securities  convertible into or exercisable or exchangeable for such Shares
other than the Development  Land Seller Notes;  (ii) there are no agreements on
the  part  of the  Borrower  or  any of its  Subsidiaries  to  issue,  sell  or
distribute any of their  respective  Shares,  other  securities or assets other
than the Development  Land Seller Notes;  (iii) neither the Borrower nor any of
its  Subsidiaries  has any  obligation  (contingent  or otherwise) to purchase,
redeem or otherwise acquire any of its Shares or any interest therein or to pay
any dividend or make any distribution in respect thereof; and (iv) no Person is
entitled to any rights with  respect to the  registration  of any Shares of the
Borrower or any of its Subsidiaries under the Securities Act (or the securities
laws of any other jurisdiction).

          (c) Neither the  Organizational  Documents  nor any other  agreement,
document or instrument  binding on or  applicable to the Borrower  contains any
provision  requiring a higher voting  requirement  with respect to action taken
(and/or to be taken) by the board of  directors or the holders of Shares of the
Borrower than that which would apply in the absence of such provision.

     12.6 CHANGES; SOLVENCY, ETC. Since the Borrower's incorporation: (a) there
has  been  no  change  in any of  the  Acquired  Properties  or  other  assets,
liabilities or financial  condition of the Borrower or any of its  Subsidiaries
other than changes which have not been, either in any case or in the aggregate,
materially  adverse  and (b) no  condition  or event  has  occurred  which  has
resulted in, or could  reasonably be expected to result in, a Material  Adverse
Change. Each of the Borrower and its Subsidiaries is Solvent.

     12.7 TAX RETURNS AND PAYMENTS.  Each of the Borrower and its  Subsidiaries
has filed all tax  returns  required  by law to be filed and has paid all taxes
and  assessments  shown to be due and  payable  on such  returns  and all other
governmental  charges  levied  upon  any of  its  properties,  assets,  income,
franchises or sales other than those not yet  delinquent.  Neither the Borrower
nor any of its  Subsidiaries has executed any waiver or waivers that would have
the effect of extending the  applicable  statute of  limitations  in respect of
income tax  liabilities.  The charges,  accruals and reserves in the  financial
statements  of the  Borrower  in respect of taxes for all  fiscal  periods  are
adequate,  and there are no known unpaid  assessments for additional  taxes for
any fiscal period or of any basis therefor.

     12.8  FUNDED  DEBT,  CURRENT  DEBT LIENS  INVESTMENTS,  TRANSACTIONS  WITH
AFFILIATES,  LEASES  AND  DERIVATIVE  TRANSACTIONS.  Exhibit  5.9 to the Senior
Secured Note Purchase Agreement  correctly describes as to the Borrower and its
Subsidiaries  (after  giving  effect  to the  transactions  consummated  at the
Closing):

          (a) all Funded Debt and Current  Debt to be  outstanding  immediately
after the date hereof (other than that  evidenced by the Senior  Secured Notes,
this Note and the  Acquisition  Subordinated  Seller  Note) and all  agreements
pursuant to which the Borrower and/or any of its  Subsidiaries has the right to
incur the same, including a general description of any collateral which secures
(or will secure) the same;

          (b) all Liens to which any of their respective  properties and assets
will be subject immediately  following the date hereof (other than those of the
character  described in section  14.9(b) of the Senior  Secured  Note  Purchase
Agreement); <PAGE>

          (c) all  Investments to be owned or held  immediately  after the date
hereof  (other  than  Investments  of the  character  described  in clauses (b)
through (f), inclusive, of the definition of Permitted Investments);

          (d) of  their  respective  Affiliates  (after  giving  effect  to the
transactions  consummated at the Closing),  all material  agreements with their
respective  Affiliates and all  transactions  with such  Affiliates  which were
consummated  during the 12-month  period ended on the Closing Date or which the
Borrower  or  any of  its  Subsidiaries  is now  obligated  or now  intends  to
consummate at any time in the future; and

          (e) each lease with  respect to which more than  $100,000  is payable
during any period of 12  consecutive  months and under  which it is a lessee or
sublessee  and, the name of the lessor or  sublessor,  the lessee or sublessee,
the property leased, the annual Rental  Obligations  payable thereunder and the
term thereof.

     Neither the Borrower nor any of its  Subsidiaries is liable  (contingently
or otherwise) in respect of any Derivative Transactions.

     12.9 TITLE TO  PROPERTIES;  LIENS;  LEASES.  The  Borrower and each of its
Subsidiaries has and, upon consummation of the transactions contemplated by the
Transaction  Documents,  will have,  good and marketable  title to all of their
respective properties and assets, including,  without limitation,  the Acquired
Properties,  free and clear of all Liens  (other  than  Liens  permitted  under
section 14.9 of the Senior Secured Note Purchase  Agreement).  The Borrower and
each of its Subsidiaries  enjoys peaceful and undisturbed  possession under all
leases  under which it operates,  and all of such leases are valid,  subsisting
and in full force and effect and are on "arm's length" terms.

     12.10  LITIGATION,  ETC. There is no action,  proceeding or  investigation
pending or, to the best of the  Borrower's  knowledge,  threatened,  including,
without  limitation,  any of the same referred to on Exhibit 5.11 to the Senior
Secured Note Purchase  Agreement,  or any basis therefor known to the Borrower,
which (a)  questions  the validity of any of the  Transaction  Documents or any
action taken or to be taken  pursuant  thereto or (b) which has resulted in, or
could reasonably be expected to result in, a Material Adverse Change.  There is
no  outstanding  judgment,  decree  or order  which has  resulted  in, or could
reasonably be expected to result in, a Material Adverse Change. Exhibit 5.11 to
the Senior  Secured Note Purchase  Agreement  sets forth a complete list of all
pending  and  threatened  actions,  proceedings  and  investigations,  and  all
judgments,  decrees and orders,  involving or affecting  the Borrower or any of
its Subsidiaries.

     12.11 VALID AND BINDING  OBLIGATIONS,  COMPLIANCE WITH OTHER  INSTRUMENTS;
ABSENCE OF RESTRICTIONS, ETC.

          (a) This Agreement has been duly  authorized,  executed and delivered
by the Borrower and constitutes the valid and legally binding obligation of the
Borrower  enforceable against it in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization,  moratorium and similar laws
affecting creditors' rights generally.  Each of the other Transaction Documents
to which the Borrower or any of its  Subsidiaries  is (or is to be) a party has
<PAGE>

been duly  authorized by the Borrower or such  Subsidiary,  as the case may be,
and, when executed and delivered, will constitute the valid and legally binding
obligation of the Borrower or such Subsidiary,  as the case may be, enforceable
against  it in  accordance  with  its  terms,  except  as  may  be  limited  by
bankruptcy, insolvency,  reorganization,  moratorium and similar laws affecting
creditors' rights generally.

          (b) Neither the Borrower nor any of its  Subsidiaries is in violation
of or in  default  under  any term of its  Organizational  Documents  or of any
agreement, document, instrument, judgment, decree, order, law, statute, rule or
regulation  applicable to it or any of its  properties  and assets,  in any way
which has resulted in, or could reasonably be expected to result in, a Material
Adverse Change.  Without limiting the generality of the foregoing,  each of the
Borrower and its  Subsidiaries is in compliance with (and neither it nor any of
its predecessors in interest has received any notice to the contrary) and there
is no reasonable  possibility  of any  liability of or any judgment,  decree or
order  binding  upon or  applicable  to such Person or any of their  respective
properties  or assets  under or on account of any  Environmental  Laws,  except
where the same has not  resulted  in, and could not  reasonably  be expected to
result in, a Material Adverse Change.

          (c) The execution,  delivery and performance of and the  consummation
of the transactions  contemplated by the Transaction Documents will not violate
or constitute a default under, or permit any Person to accelerate or to require
the prepayment of any  Indebtedness of the Borrower or any of its  Subsidiaries
or to terminate  any material  lease or agreement of the Borrower or any of its
Subsidiaries pursuant to, or result in the creation of any Lien upon any of the
properties  or assets of the Borrower or any of its  Subsidiaries  pursuant to,
any  term  of  the  Organizational  Documents  of  the  Borrower  or any of its
Subsidiaries  or of any  agreement,  document,  instrument,  judgment,  decree,
order,  law, statute,  rule or regulation  applicable to the Borrower or any of
its Subsidiaries or any of their respective properties and assets.

          (d) Neither the Borrower nor any of its Subsidiaries is a party to or
bound by or subject to any Organizational Document, or any agreement, document,
instrument, judgment, decree, order, law, statute, rule or regulation (i) which
restricts  its right or  ability  to incur  Indebtedness  (including  by way of
guarantee),  to issue securities or to consummate the transactions contemplated
hereby;  (ii) under the terms of or pursuant to which its obligation to pay all
amounts due from it and/or to perform all  obligations  imposed on it and/or to
comply with the terms  applicable to it under any of the Transaction  Documents
is in any way  restricted or (iii) which  restricts its right or ability to pay
dividends  and/or to make any other  distributions  in respect  of its  capital
stock,  to  mortgage or dispose of any of its  properties,  to  consummate  any
merger,   consolidation   or  acquisition,   to  make  Investments  or  capital
expenditures,  to enter into and perform leases, to pay executive  compensation
and/or  to  conduct  its  business  as now  conducted  and now  proposed  to be
conducted.

     12.12 ERISA

          (a)  The  Borrower  and  each  ERISA   Affiliate   has  operated  and
administered  each Plan in compliance  with all applicable laws except for such
instances of noncompliance which have not resulted in, and could not reasonably
be expected to result in, a Material  Adverse Change.  Neither the Borrower nor
any ERISA  Affiliate  has incurred any  liability  pursuant to Title I or IV of
<PAGE>

ERISA or the penalty or excise tax  provisions of the Code relating to employee
benefit plans (as defined in section 3 of ERISA), and no event,  transaction or
condition has occurred or exists that could reasonably be expected to result in
the incurrence of any such liability by the Borrower or any ERISA Affiliate, or
in the imposition of any Lien on any of the rights, properties or assets of the
Borrower or any ERISA  Affiliate,  in either case  pursuant to Title I or IV of
ERISA or to such penalty or excise tax  provisions or to section  401(a)(29) or
412 of the Code, other than such liabilities or Liens as would not individually
or in the aggregate result in a Material Adverse Change.

          (b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial  assumptions
specified for funding purposes in such Plan's most recent  actuarial  valuation
report,  did not exceed the aggregate  current value of the assets of such Plan
allocable to such benefit liabilities.  The term "benefit  liabilities" has the
meaning  specified in section 4001 of ERISA and the terms  "current  value" and
"present value" have the meaning specified in section 3 of ERISA.

          (c)  The  Borrower  and  its  ERISA   Affiliates  have  not  incurred
withdrawal   liabilities   (and  are  not  subject  to  contingent   withdrawal
liabilities)  under  section 4201 or 4204 of ERISA in respect of  Multiemployer
Plans that  individually or in the aggregate could result in a Material Adverse
Change.   The  Borrower  and  its  ERISA  Affiliates  have  made  all  required
contributions  to  Multiemployer  Plans.  Neither  the  Borrower  nor any ERISA
Affiliate has incurred,  nor would  reasonably  expect to incur, any Withdrawal
Liability upon a complete or partial  withdrawal  from any  Multiemployer  Plan
that  individually  or in the  aggregate  could  result in a  Material  Adverse
Change. To the best of the Borrower's  knowledge,  no Multiemployer Plan is, or
is reasonably expected to be, insolvent, in reorganization or terminated within
the meaning of Title IV of ERISA.

          (d)  The  Borrower  and  its  Subsidiaries   have  no  expected  post
retirement  benefit   obligation   (determined  in  accordance  with  Financial
Accounting  Standards  Board  Statement No. 106,  without regard to liabilities
attributable to continuation coverage mandated by section 4980B of the Code).

          (e)  The  consummation  of  the  transactions   contemplated  by  the
Transaction  Documents will not involve any transaction  that is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.

     12.13  CONSENTS,  ETC.  No  consent,  approval  or  authorization  of,  or
declaration  or filing with,  or other action by, any Person is required on the
part of the Borrower or any of its Subsidiaries as a condition precedent to the
valid  execution,  delivery  and  performance  of and the  consummation  of the
transactions  contemplated by the Transaction  Documents and/or the exercise by
Holder of any of its rights in respect  thereof,  other than those specified on
Exhibit 5.14 to the Senior Secured Note Purchase  Agreement,  all of which have
been obtained, are unconditional and are in full force and effect.

     12.14  PROPRIETARY  RIGHTS;   LICENSES.  The  Borrower  and  each  of  its
Subsidiaries has all Proprietary Rights and Licenses as are adequate for the
<PAGE>

conduct of their respective  businesses as now conducted and now proposed to be
conducted,  without  any known  conflict  with the rights of others.  Each such
Proprietary  Right and  License  is in full  force  and  effect,  all  material
obligations with respect thereto have been fulfilled and performed and there is
no infringement  thereon by any other Person.  No default in the performance or
observance  by  the  Borrower  or  any of its  Subsidiaries  (or  any of  their
predecessors  in interest) of their  obligations  thereunder has occurred which
permits,  or after notice of lapse of time or both would permit, the revocation
or termination of any Proprietary Right or License or which has resulted in, or
could reasonably be expected to result in, a Material Adverse Change.

     12.15 OFFER OF NOTES;  INVESTMENT  BANKERS.  Neither the  Borrower nor any
Person acting on its behalf (a) has directly or indirectly offered this Note or
any part thereof or any similar  securities  for issue or sale to, or solicited
any offer to buy any of the same  from,  anyone  other  than the Holder and not
more  than one  other  institutional  investor,  (b) has taken or will take any
action  which would bring the  issuance,  exchange and sale of this Note within
the  provisions  of  Section 5 of the  Securities  Act or the  registration  or
qualification  provisions of any applicable blue sky or other  securities laws,
(c) has dealt with any broker, finder, commission agent or other similar Person
in  connection  with  the  sale  of  this  Note  and  the  other   transactions
contemplated by the Transaction Documents or (d) is under any obligation to pay
any  broker's  fee,   finder's  fee  or  commission  in  connection  with  such
transactions.

     12.16  GOVERNMENT  REGULATION.   Neither  the  Borrower  nor  any  of  its
Subsidiaries is subject to regulation  under the Public Utility Borrower Act of
1935,  the Federal Power Act or the  Investment  Borrower Act of 1940,  each as
amended.

     12.17 YEAR 2000  MATTERS.  The  software  operated by the Borrower and its
Subsidiaries  is Year 2000  Compliant  (as  defined  below),  except  where the
failure to be Year 2000 Compliant has not resulted in, and could not reasonably
be expected to result in, a Material Adverse Change.

     12.18  VALID  AND  BINDING  EFFECT  OF EAST  WEST  TRANSACTION  DOCUMENTS;
COMPLIANCE WITH OTHER INSTRUMENTS; ABSENCE OF RESTRICTIONS, ETC.

          (a) The East West Transaction  Documents have been duly authorized by
the Borrower,  and, when executed and delivered,  will constitute the valid and
legally  binding  obligations  of  the  Borrower   enforceable  against  it  in
accordance  with  their  terms,   except  as  may  be  limited  by  bankruptcy,
insolvency,  reorganization,  moratorium and similar laws affecting  creditors'
rights generally.

          (b) The execution,  delivery and performance of and the  consummation
of the transactions  contemplated by the East West  Transaction  Documents will
not violate or constitute a default  under (or result in the Borrower  being in
violation of or in default  under),  or permit any Person to  accelerate  or to
require  the  prepayment  of any  Indebtedness  of the  Borrower  or any of its
Subsidiaries or to terminate any material lease or agreement of the Borrower or
any of its Subsidiaries pursuant to, or result in the creation of any Lien upon
any of the  properties  or assets of the  Borrower  or any of its  Subsidiaries
pursuant to, any term of the Organizational Documents of the Borrower or any of
its Subsidiaries or of any agreement, document,  instrument,  judgment, decree,
<PAGE>

order,  law, statute,  rule or regulation  applicable to the Borrower or any of
its Subsidiaries or any of their respective properties and assets.

          (c) Neither the Borrower nor any of its Subsidiaries is a party to or
bound by or subject to any Organizational Document, or any agreement, document,
instrument, judgment, decree, order, law, statute, rule or regulation (i) which
restricts  its right or  ability  to incur  Indebtedness  (including  by way of
guarantee),  to issue securities or to consummate the transactions contemplated
by the East West Transaction Documents;  or (ii) under the terms of or pursuant
to which it is restricted from  performing its obligations  under the East West
Transaction Documents or any related agreements."

     12.19  DISCLOSURE.  Neither  this Note,  nor any of the other  Transaction
Documents,  nor any other document,  certificate or written statement furnished
to  the  Holder  by or on  behalf  of  the  Borrower  in  connection  with  the
transactions  contemplated  by the Transaction  Documents,  contains any untrue
statement  of a material  fact or omits to state a material  fact  necessary in
order to make the statements contained herein and therein not misleading in the
light of the  circumstances  under which such statements were made. There is no
fact known to the Borrower (other than information  concerning general economic
conditions  known to the public and  affecting  business  generally)  which has
resulted in, or could  reasonably be expected to result in, a Material  Adverse
Change,  which  has not been set  forth in this  Note,  the  other  Transaction
Documents and the Senior Secured Note Purchase Agreement.

13. COVENANTS OF THE BORROWER.

     From and after the date  hereof  and  thereafter  so long as any amount of
principal,  interest,  costs,  expenses or other sums  payable  under this Note
shall  remain  outstanding,  the  Borrower  will,  and will  cause  each of its
Subsidiaries  to, duly  perform and observe each and all of the  covenants  and
agreements hereinafter set forth:

     13.1 BOOKS OF RECORD AND ACCOUNT;  RESERVES.  The Borrower  will, and will
cause each of its  Subsidiaries to (a) at all times keep proper books of record
and  account  in which  full,  true and  correct  entries  shall be made of its
transactions  in  accordance  with GAAP and (b) set aside on its books from its
earnings for each fiscal year all such proper  reserves as shall be required in
accordance with GAAP in connection with its business.

     13.2 PAYMENT OF TAXES;  CORPORATE  EXISTENCE;  MAINTENANCE  OF PROPERTIES;
COMPLIANCE WITH LAWS; LINES OF BUSINESS; PROPRIETARY RIGHTS. The Borrower will,
and will cause each of its Subsidiaries to:

          (a) pay and  discharge  promptly  as they  become due and payable all
taxes,  assessments and other governmental charges or levies imposed upon it or
its  income  or upon any of its  property,  as well as all  claims  of any kind
(including claims for labor, materials and supplies) which, if unpaid, might by
law become a Lien upon its  property;  provided  that no such  Person  shall be
required to pay any such tax, assessment,  charge, levy or claim if the amount,
applicability or validity thereof shall currently be contested in good faith by
appropriate  proceedings  promptly initiated and diligently conducted and if it
shall have set aside on its books such reserves,  if any, with respect  thereto
as are required by GAAP;  provided,  further,  that the Borrower will, and will
<PAGE>

cause each of its Subsidiaries to, pay any such tax,  assessment,  charge, levy
or claim prior to the  commencement  of any  proceeding  to foreclose  any Lien
securing the same;

          (b) do or cause to be done all things  necessary to preserve and keep
in full force and effect its corporate existence and all material Licenses;

          (c)  maintain  and keep its  material  properties  necessary  for the
conduct of its business in good repair, working order and condition (reasonable
wear  and  tear  excepted),  so that  the  business  carried  on in  connection
therewith may be properly and advantageously conducted at all times;

          (d)  comply  in all  material  respects  with  all  applicable  laws,
statutes,  rules,  regulations  and orders of, and all applicable  restrictions
imposed  by, all  governmental  authorities  in  respect of the  conduct of its
business and the ownership of its property (including,  without limitation, all
Environmental  Laws);  provided that no such Person shall be required by reason
of this  section  14.2(d)  to comply  therewith  at any time  while it shall be
contesting  its  obligation to do so in good faith by  appropriate  proceedings
promptly initiated and diligently conducted,  and if it shall have set aside on
its books such reserves, if any, with respect thereto as are required by GAAP;

          (e) engage only in the Business and conduct all its business and keep
all of its assets in the United States of America; and

          (f) own or have a valid license for all material  Proprietary  Rights
used by it in the conduct of its business.

     13.3 INSURANCE. The Borrower will, and will cause each of its Subsidiaries
to,  maintain with  financially  sound and reputable  insurers,  insurance with
respect to their properties and businesses  against loss or damage of the kinds
customarily insured against by Persons of established reputation engaged in the
same or a similar business and similarly situated,  in such amounts and by such
methods as shall be customary for such Persons and reasonably  deemed  adequate
by the Borrower.

     13.4 LIMITATION ON DISCOUNT OR SALE OF RECEIVABLES. The Borrower will not,
and will  not  permit  any of its  Subsidiaries  to,  directly  or  indirectly,
discount or sell any of their accounts receivable,  except that any such Person
may settle doubtful accounts in the ordinary course of business.

     13.5  LIMITATION ON FUNDED DEBT AND CURRENT  DEBT.  The Borrower will not,
and will not permit any of its  Subsidiaries  to, be liable or create,  assume,
incur, guarantee, or in any manner become liable, contingently or otherwise, in
respect of any Funded Debt or Current Debt other than:

          (a) Funded Debt evidenced by the Senior Secured Notes;

          (b) Funded Debt evidenced by the Phase II Seller Note; and
<PAGE>

          (c) Funded Debt evidenced by this Note.

     13.6  LIMITATION ON RESTRICTED  PAYMENTS.  The Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly make or commit to
make any Restricted  Payment except (i) payments of cash required to be made at
the closings  under the Sale  Agreement by Northstar LLC to the  Borrower,  the
proceeds of which may be paid by the  Borrower to Trimont  Land  Company,  (ii)
payments of cash made in July,  1999 at the closing  referred to in section 4.3
of the Senior Secured Note Purchase Agreement,  (iii) payments of cash required
to be made at the  closing  under  the  Phase  II  Acquisition  Agreement  (iv)
payments  to  Trimont  of the  Net  Proceeds  from  the  sale of the  Phase  II
Properties to the extent  permitted  under section 9.1(a) of the Senior Secured
Note Purchase Agreement and (v) so long as no Default or Event of Default shall
have occurred and be  continuing,  to the extent that Net Proceeds of the sales
of the  Phase  II  Properties  exceed  the sum of (a)  $6,000,000  plus (b) any
accrued but unpaid  interest on the Senior Secured Notes and all interest which
may theretofore have been  capitalized on the Senior Secured Notes,  payment to
Trimont of such  excess in  respect of the  principal  of and any  accrued  and
unpaid interest on the Phase II Seller Note.

     13.7  LIMITATIONS ON DERIVATIVE  TRANSACTIONS.  The Borrower will not, and
will not permit any of its Subsidiaries  to, be or become liable  (contingently
or otherwise) in respect of any Derivative Transactions.

     13.8 LIMITATION ON TAX CONSOLIDATION.  The Borrower will not, and will not
permit any of its Subsidiaries to, become a party to a consolidated or combined
income tax return with any Person other than the Borrower and its Subsidiaries.

     13.9  LIMITATION ON LIENS.  The Borrower will not, and will not permit any
of its  Subsidiaries  to,  create or suffer to exist any Lien in respect of any
property of any character of the Borrower or any of its  Subsidiaries  (whether
owned on the date hereof or hereafter  acquired);  provided that there shall be
excluded from the operation of this section 14.9:

          (a) Liens securing the Senior Secured Notes and this Note;

          (b) Liens (other than any Lien created by any Environmental Law or by
Section 4068 of ERISA),  charges and encumbrances which (i) are incurred in the
ordinary  course of  business  and which are  incidental  to the conduct of the
business of the  Borrower  and its  Subsidiaries  and the  ownership of its and
their property, (ii) are not incurred in connection with the borrowing of money
or the  obtaining  of  advances  or  credit,  (iii)  do  not  in the  aggregate
materially  detract  from the  value of the  property  of the  Borrower  or its
Subsidiaries  or  materially  impair the use thereof in the operation of its or
their  business  and (iv) do not (and  could not  reasonably  be  expected  to)
materially adversely affect the rights of the holders of the Notes; and

          (c) any Lien existing on the date hereof.

     13.10 LIMITATION ON TRANSACTIONS  WITH AFFILIATES.  The Borrower will not,
and will not  permit  any of its  Subsidiaries  to,  engage in any  transaction
(including,   without  limitation,  the  purchase,  sale  or  exchange  of  any
properties and assets or the rendering of any services) with an Affiliate of
<PAGE>

the  Borrower  or of any of its  Subsidiaries  on terms less  favorable  to the
Borrower  or any  such  Subsidiary  in  any  material  respect  than  would  be
obtainable  at the time in  comparable  transactions  with a Person not such an
Affiliate.

     13.11  LIMITATIONS  ON  INVESTMENTS.  The Borrower  will not, and will not
permit any of its  Subsidiaries  to, directly or indirectly,  make or commit to
make any Investments other than (i) Permitted Investments, and (ii) Investments
made by the Borrower required pursuant to the East West Transaction Documents.

     13.12 LIMITATION ON ISSUANCE OF SHARES OF SUBSIDIARIES.  The Borrower will
not permit any of its Subsidiaries to (a) issue,  sell or otherwise  dispose of
any Shares (or any securities  convertible  into or exercisable or exchangeable
for Shares) of such  Subsidiary  except to the  Borrower  or to a  Wholly-Owned
Subsidiary  of the Borrower or (b) sell,  transfer or otherwise  dispose of any
Shares (or any securities  convertible  into or exercisable or exchangeable for
Shares) of any other  Subsidiary of the Borrower except to the Borrower or to a
Wholly-Owned  Subsidiary of the Borrower.  The Borrower will not, in any event,
permit any Subsidiary of the Borrower to have outstanding any Preferred Shares.

     13.13  LIMITATION ON SUBSIDIARY'S  CONSOLIDATION  OR MERGER.  The Borrower
will  not  permit  any  of  its   Subsidiaries  to  consummate  any  merger  or
consolidation with any other Person.

     13.14  LIMITATION ON THE  BORROWER'S  CONSOLIDATION,  MERGER AND SALE. The
Borrower will not  consolidate  with or merge into any other Person or transfer
all or substantially  all of its property in a single  transaction or series of
transactions to any Person.

     13.15  LIMITATION ON DISPOSITION  OF PROPERTY.  The Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly, sell, lease
or otherwise  dispose of any of their respective  properties and assets (or any
right, title or interest therein), whether real, personal or mixed, tangible or
intangible,  including, without limitation, shares of capital stock, securities
or Indebtedness of any Subsidiaries of the Borrower, provided that the Borrower
may (i) sell the Phase II Properties at a price not less than their fair market
value,  as long as the Net Proceeds of any such sale are applied in  accordance
with the terms of section 9.1 of the Senior  Secured Note  Purchase  Agreement,
and (ii) sell the Development Land promptly  following the acquisition  thereof
pursuant to the  Development  Land  Acquisition  Agreement to Northstar  LLC in
accordance with the East West Transaction Documents.

     13.16 LIMITATION ON LEASEBACKS. The Borrower will not, and will not permit
any of its Subsidiaries to, directly or indirectly,  sell or otherwise  dispose
of any of  their  respective  properties  and  assets  if,  as part of the same
transaction  or series of  related  transactions,  the  Borrower  or any of its
Subsidiaries  shall then or  thereafter  rent or lease as lessee,  or similarly
acquire the right to  possession  or use of, such  properties  and assets (or a
major portion thereof),  or other properties and assets which it intends to use
for substantially the same purpose or purposes,  under any lease,  agreement or
other  arrangement  which obligates the Borrower or any of its  Subsidiaries to
pay rent as lessee or make any other payments for such possession or use.

     13.17  MODIFICATION  OF CERTAIN  DOCUMENTS,  AGREEMENTS  AND  INSTRUMENTS;
FISCAL YEAR.
<PAGE>

          (a)  The  Borrower   will  not,  and  will  not  permit  any  of  its
Subsidiaries  to,  amend,  supplement,  modify  or waive  any term of any other
agreement,  document  or  instrument  referred  to in section 4.3 of the Senior
Secured Note Purchase Agreement or of its Organizational Documents.

          (b)  The  Borrower   will  not,  and  will  not  permit  any  of  its
Subsidiaries  to, have a fiscal year which ends on any date other than December
31 in each year.

     13.18 FURTHER ASSURANCES.  From time to time hereafter,  the Borrower will
execute  and  deliver,  or  will  cause  to be  executed  and  delivered,  such
additional  agreements,  documents and instruments and will take all such other
actions as any holder or holders of this Note may  reasonably  request  for the
purpose of  implementing  or  effectuating  the  provisions of this Note or the
Pledge Agreement.

     13.19 ADDITIONAL  SUBSIDIARIES.  Notwithstanding  anything to the contrary
set forth herein, without the prior written consent of the Holder, the Borrower
shall not, and shall not permit any of its Subsidiaries to, organize or acquire
any Subsidiary.

     13.20  LIMITATION ON AMENDMENTS  TO THE EAST WEST  TRANSACTION  DOCUMENTS;
CERTAIN  NOTICES.  The  Borrower  shall not enter  into any  amendments  to, or
modifications of, the East West Transaction Documents without the prior written
approval of the Required  Holders of the Senior Secured  Notes,  which approval
will not be unreasonably  withheld. The Borrower will send to the Holder copies
of all notices and other  documents  given or received by it pursuant to any of
the East West Transaction Documents.

14. SUCCESSORS AND ASSIGNS.

     Neither  this  Note  nor  any  of the  rights,  interests  or  obligations
hereunder  may be assigned,  by operation of law or  otherwise,  in whole or in
part, by the Borrower without the prior written consent of the Holder.  Subject
to the  foregoing,  the rights and  obligations  of the Borrower and the Holder
shall be binding upon and benefit the successors and assigns of the parties.

15. WAIVER AND AMENDMENT.

     Any  provision  of this Note may be amended,  waived or modified  upon the
written consent of the Borrower and the Holder.

16. NOTICES.

     Any notice, request or other communication required or permitted hereunder
shall be in writing  and shall be deemed to have been duly given if  personally
delivered or mailed by registered or certified mail,  postage prepaid,  or by a
recognized  overnight  courier or personal  delivery,  addressed  (a) if to the
Holder, at 1000 South Frontage Road West, Suite 200, Vail,  Colorado,  81657 or
at such other  address as such  Holder  shall have  furnished  the  Borrower in
writing,  or (b) if to the Borrower,  at 1000 South  Frontage Road West,  Suite
200, Vail, Colorado, 81657, or at such other address as the Borrower shall have
furnished  to the Holder in  writing.  Any party  hereto may by notice so given
<PAGE>

change its address for future notice  hereunder.  Notice shall  conclusively be
deemed to have been given when received.

17. PAYMENT.

     Payment shall be made in lawful tender of the United States.

18. DEFAULT RATE.

     During  any  period  in  which an Event of  Default  has  occurred  and is
continuing,  whether or not this Note has been accelerated,  the Borrower shall
pay interest on the unpaid principal  balance hereof and any accrued but unpaid
interest  at a rate  per  annum  equal  to two  (2%) in  excess  of the rate of
interest  then in effect,  computed  on the basis of the actual  number of days
elapsed and a year of 360 days.

19. USURY.

     Anything in this Note to the contrary notwithstanding,  the Borrower shall
never be  required  to pay  interest  on this  Note at a rate in  excess of the
Highest  Lawful Rate (as  hereinafter  defined),  and if the effective  rate of
interest  which would  otherwise  be payable  under this Note would  exceed the
Highest Lawful Rate,  then (a) the amount of interest which would  otherwise be
payable  under this Note shall be reduced to the maximum  amount  allowed under
applicable  law,  and (b) any  interest  paid by the  Borrower in excess of the
Highest  Lawful  Rate shall be credited to the  principal  of this Note.  It is
further agreed that, without  limitation of the foregoing,  all calculations of
the rate of interest  contracted for, charged,  or received by the Holder under
this  Note  that are made for the  purpose  of  determining  whether  such rate
exceeds the  Highest  Lawful  Rate,  shall be made to the extent  permitted  by
applicable usury laws (now or hereafter enacted), by amortizing, prorating, and
spreading in equal parts during the period of the full stated term of this Note
all interest at any time contracted  for,  charged or received by the Holder in
connection  herewith.  The "Highest Lawful Rate" shall mean the maximum rate of
interest  which the Holder is  permitted  by  applicable  law to contract  for,
charge, or receive.

20. EXPENSES.

     The  Borrower  shall  pay on  demand  all  reasonable  fees and  expenses,
including  reasonable  attorneys' fees and expenses,  incurred by the Holder in
drafting,  negotiating  and  executing  this  Note  and the  other  Transaction
Documents and with respect to the  enforcement or attempted  enforcement of any
of the  obligations of any of the Borrower to the Holder under the  Transaction
Documents or in preserving any of the Holder's rights and remedies  (including,
without limitation,  all such fees and expenses incurred in connection with any
"workout"  or  restructuring   affecting  the  Transaction   Documents  or  the
obligations  thereunder or any bankruptcy or similar  proceeding  involving the
Borrower or any of its Subsidiaries).

21. REPLACEMENT NOTE.

     Upon receipt by the Borrower of evidence reasonably  satisfactory to it of
the ownership of and the loss,  theft,  destruction  or mutilation of this Note
and (a) in the case of loss,  theft or  destruction,  of  indemnity  reasonably
satisfactory  to it or (b) in the case of mutilation,  upon surrender  thereof,
<PAGE>

the Borrower,  at its expense,  will execute and deliver in lieu of this Note a
new note executed in the same manner as this Note.

22. GOVERNING LAW; INTERPRETATION.

     This Note and all actions  arising out of or in connection  with this Note
shall be governed by and construed in accordance  with the laws of the State of
California,  without  regard to the conflicts of law provisions of the State of
California  or of any other state.  If any provision of this Note is held to be
invalid  or  unenforceable  by a court of  competent  jurisdiction,  the  other
provisions  of this Note  shall  remain in full force and effect and the Holder
may at any  time  thereafter  require  payment  in  full  of  all  amounts  due
hereunder.

23. WAIVER, REPRESENTATION.

     Presentment for payment,  demand, notice of dishonor,  protest,  notice of
protest,  stay of execution  and all other  defenses to payment  generally  and
notices in connection with the delivery,  acceptance,  performance,  default or
enforcement  of the payment of this Note are hereby  waived by the Borrower and
its permitted successors and assigns.  Neither extension nor indulgence granted
from time to time shall be  construed as a novation of this Note or as a waiver
of the rights of the Holder  herein.  The  liability of the  Borrower  shall be
unconditional,  without  regard to the liability of any other party,  and shall
not be in any manner  affected by any  forbearance,  partial action or delay on
the part of the Holder in regard to the exercise of any right,  power or remedy
under this Note .

24. SECTION HEADINGS.

     The headings of Sections  shall not be taken into account in  interpreting
the terms of this Note.

        [remainder of page intentionally left blank, signature follows]

<PAGE>

      IN WITNESS WHEREOF,  the Borrower has caused this Note to be issued as of
the date first written above.

                                    TRIMONT LAND HOLDINGS, INC.

                                    a Delaware corporation

                                      By:

                                       ----------------------------------------
                                       Elizabeth J. Cole, Executive Vice
                                       President

<PAGE>

                                   EXHIBIT G

                          Trademark License Agreement

                          ---------------------------

                          TRADEMARK LICENSE AGREEMENT

         THIS TRADEMARK LICENSE AGREEMENT (the "Agreement"), is entered into as
of this day of September, 2000, by and among Trimont Land Company, a California
corporation   ("Licensor"),   and  Trimont  Land  Holdings,  Inc.,  a  Delaware
corporation ("Licensee").

                                    RECITALS

     Licensor  is the owner of the Marks (as  defined  herein),  including  the
trade  names  "Northstar"  and  "Northstar  at  Tahoe"  and the  service  marks
"Northstar" and "Northstar at Tahoe",  used in connection with the acquisition,
ownership, construction,  development and operation by Licensor of a ski resort
in the North Lake Tahoe, California region (the "Ski Resort");

     Concurrently  herewith,  Licensor  is selling  to  Licensee  certain  real
property  (the  "Property")  heretofore  owned  and  used  by  Licensor  in the
operation of the Ski Resort, and in connection with such sale, Licensee desires
to acquire a non-exclusive  license to use and sublicense the Marks (as defined
herein),  and  Licensor  desires  to license  the use of the Marks (as  defined
herein) to Licensee,  all on the terms and subject to the  conditions set forth
below;

     Also, concurrently herewith, (i) Licensee and East West Resort Development
V, L.L.L.P.,  a Delaware limited  liability limited  partnership,  are entering
into an Operating Agreement of Northstar Mountain Properties,  LLC of even date
herewith  (the  "Operating  Agreement")  thereby  forming a  limited  liability
limited  company to be known as  Northstar  Mountain  Properties  LLC, and (ii)
Licensee is  reselling  the  Property to  Northstar  Mountain  Properties,  LLC
("Sublicensee")  and desires to sublicense  the use of the Marks to Sublicensee
(the "Sublicense");

     Capitalized  terms used herein but not otherwise defined herein shall have
the meanings ascribed to them in the Operating Agreement; and

     Pursuant to the Operating  Agreement,  Sublicensee  intends to own,  hold,
develop, construct,  operate, sell or otherwise dispose of the Property and the
Option Property, if any, in phases or segments, with each such phase or segment
to be  categorized as a separate  project (a  "Project"),  as determined in the
Master  Development  Plan and the Annual Plans as amended from time to time and
to engage in such other business  activities  related to such properties as are
more fully described therein.  The geographic  location of the Property and the
Option Property is referred to herein as the  "Territory."  Upon the occurrence
of certain events, the Sublicense may terminate and Sublicensee's right to own,
hold,  develop,  construct,  operate,  sell,  or  otherwise  dispose of certain
Projects may become vested in Licensee.

                                   AGREEMENT

     NOW,  THEREFORE,  in  consideration  of the  premises  and promises of the
parties,  and for  other  good and  valuable  consideration,  the  receipt  and
sufficiency of which are hereby acknowledged, the parties agree as follows:

<PAGE>

     1. Marks.  "Marks" as used herein,  shall mean the trade names "Northstar"
and  "Northstar at Tahoe" and the service marks  "Northstar"  and "Northstar at
Tahoe"  (such  trade names and service  marks  being  evidenced  by the federal
registration  numbers listed below),  used in connection with the  acquisition,
ownership,  construction,  development  and  operation  by  Licensor of the Ski
Resort:

                  Trademark                     Registration No.
                  ---------                     ----------------
                  NORTHSTAR                     1,242,314
                  NORTHSTAR AT TAHOE            1,263,168

Such term shall  specifically  exclude  all logos and designs  related  thereto
including,  without limitation,  the "saw blade" design and its related service
mark (Registration No. 1,242,315).

     2.  Non-Exclusive  License  Grant.  Subject to the terms and conditions of
this   Agreement,   Licensor   hereby  grants  to  Licensee  a   non-exclusive,
royalty-free  license (the "License") to use the Marks in the Territory  during
the Term of this  Agreement for the purposes set forth in Section 3 below,  and
to sublicense such rights.

     3.  License  Scope.  The License  shall be limited to the use of the Marks
solely (a) as part of Licensee's  trade name during the Term of this Agreement;
(b) as part of any Project's name and on signage  associated  with any Project;
and (c) on literature,  advertising or promotional  materials (whether in print
or electronic media) or Promotional  Products (such as T-shirts,  baseball caps
or similar products),  published and/or distributed by Licensee during the Term
of this  Agreement  for the  purpose  of  promoting  the  sale of  Units in the
Projects. "Promotional Products" as used herein shall mean products distributed
free for promotional purposes.  Promotional Products may bear the Marks only in
association with Project names.

     4. No  Restrictions  on Licensor.  Notwithstanding  any  provision in this
Agreement to the  contrary,  Licensor or any other  licensee or  transferee  of
Licensor shall not be in any way restricted from any use of the Marks. Licensee
acknowledges  and agrees that  Licensor may freely  utilize for its own account
and for any purposes  whatsoever and transfer or license the Marks to any other
person or entity for any purposes whatsoever.

     5.  Licensed  Use.  Licensee  agrees  to use the  Marks in a  commercially
reasonable manner and style and to take commercially reasonable steps to ensure
that no act or omission  of  Licensee  or use by  Licensee  shall in any manner
reflect adversely upon the goodwill, prestige, image or reputation of the Marks
or Licensor.

     6. Quality Control Standards.

          a. The  parties  acknowledge  and agree that great value is placed on
the Marks and the goodwill associated therewith,  that the consuming public and
the industry now associate the Marks with products and services of consistently
high quality, and that the terms and conditions of this Agreement are necessary
and  reasonable to assure the consuming  public and the industry that all goods
and services of Licensee  which are to be associated  with the Marks  hereunder
are of the same consistently  high quality as the goods and services  currently
provided by Licensor in association with the Marks.

<PAGE>

          b.  Licensee  shall use the Marks  only in  connection  with goods or
services  of at least  equivalent  quality to the goods or  services  currently
provided by Licensor.

          c. Upon  Licensor's  reasonable  request,  Licensee  shall furnish to
Licensor,  at no expense to Licensor,  samples of all promotional materials and
products  on which  the  Marks  are used,  as well as  samples  of all  related
packaging,  labels, stickers and displays, and any other materials on which the
Marks are used.

          d. Licensee  shall use the Marks on and in connection  with the goods
and services licensed hereunder,  and the packaging,  advertising and promotion
thereof, only in a manner consistent with proper Mark usage.

          e. Whenever  Licensee uses the Marks it shall clearly and prominently
indicate  Licensor's  ownership of the Marks in all materials  disseminated  by
Licensee in the following form or such other form designated by Licensor:

               i)  in  the  case  of  Northstar:  "Northstar  is  a  registered
trademark  under the laws of the United States of America owned by Trimont Land
Company.  Trimont Land  Company  disclaims  any and all  liability to any third
party  relating to or arising from any goods or services  offered by Licensee;"
or

               ii) in the case of Northstar at Tahoe:  "Northstar at Tahoe is a
registered  trademark  under the laws of the United  States of America owned by
Trimont Land Company.  Trimont Land Company  disclaims any and all liability to
any third party  relating to or arising  from any goods or services  offered by
Licensee."

except that with respect to any  buildings,  goods or services  with respect to
which Licensee is unable to clearly and prominently display the designation set
forth above by reason of limited space or similar impediments, Licensee may use
the  designation  (R) with the Marks.  Notwithstanding  anything  herein to the
contrary,  Licensee shall at the request of Licensor include in any literature,
advertising   or   promotional   materials   language  in  form  and  substance
satisfactory  to  Licensor  indicating  that  Licensor  disclaims  any  and all
liability to any third party  relating to or arising from any goods or services
offered by Licensee.

     7. Protection of Marks.

          a.  Apart from  actions  for  fraud,  misrepresentation  or the like,
Licensee shall not,  during the term of this  Agreement or thereafter,  contest
the validity of Licensor's rights to the Marks, nor willingly become an adverse
party to litigation in which such rights are contested.

          b.  Licensee  shall not (i) during the term of this  Agreement,  say,
write or do  anything  with the intent to  diminish  the  goodwill  of Licensor
associated  with the Marks;  and (ii) in any manner  represent  that it has any
ownership rights in the Marks or registrations thereof.

          c. Licensor  represents  and warrants to Licensee that as of the date
of this Agreement,  to its Knowledge (as defined below): (i) it has full power,
title to assets  and  authority  to enter into this  Agreement  and to grant to
Licensee the rights in the Marks as set forth herein;  (ii) Licensee's exercise
<PAGE>

of the rights  granted in this  Agreement  does not and will not violate in any
material respect the intellectual property rights of any third party; and (iii)
other  than as  listed  in  Section  1 of this  Agreement,  there  are no other
existing or pending federal trademark registrations respecting the Marks and no
other licenses from third parties  granting  rights to Licensor with respect to
Licensor's use or exploitation  of the Marks.  "Knowledge" as used herein means
the actual present  knowledge of  Christopher  P. Ryman,  Elizabeth J. Cole and
Timothy  Silva,  and does not  include  any  matter not  within  their  present
recollection,  any  knowledge  of any other  past,  present or future  officer,
director,  shareholder,   employee,  agent  or  attorney  of  Licensor  or  any
constructive or imputed notice of any matter or any item of information.

          d. Licensor shall,  at Licensor's  sole cost and expense,  defend and
indemnify Licensee, and all of its subsidiaries and sublicensees,  and each and
all of their present and future representatives,  agents, officers,  directors,
employees  and  owners,  of and from any claim made by a third  party  alleging
facts,  which, if true, would constitute a violation of any  representation  or
warranty set forth in Section 7(c).

          e. Each party  hereto  agrees to give  prompt  written  notice to the
other party upon learning of any asserted or threatened claim made by any third
party in relation to alleged  acts of  infringement  or unfair  competition  or
similar  actions  arising as a result of Licensor's  or  Licensee's  use of the
Marks. Furthermore, each of Licensor and Licensee shall have standing to pursue
any alleged infringer of that party's own use of the Marks except that Licensee
may not pursue any  alleged  infringer:  (i) until  such time as  Licensor  has
elected not to pursue such alleged  infringer  and has promptly  given  written
notice to Licensee  to such  effect or (ii) if Licensor  declines to serve such
notice upon  Licensee  pursuant to the preceding  item (i),  within thirty (30)
days following  Licensor's  receipt of written notice from Licensee  concerning
such alleged  infringer.  If the parties  proceed  jointly  against any alleged
infringer, the expenses and recoveries, if any, shall be shared equally, and if
they do not proceed jointly, either party shall, subject to the above, have the
right to prosecute such action, such party shall bear all expenses thereof, and
all recoveries shall belong to such party.

          f.  During  the  Term  of this  Agreement,  Licensor  agrees  to take
reasonable  steps to  maintain  in full  force and  effect  Licensor's  federal
trademark  registrations  with  respect  to the Marks  including  the filing of
affidavits,  the  payment  of  application  renewal  fees and other  reasonable
actions as required to maintain such federal  trademark  registrations  in full
force and effect.

     8. Ownership of Developed  Marks.  Licensor  acknowledges  and agrees that
Licensee  shall own that  portion of any and all  trademarks  and  servicemarks
utilized  by  Licensee  in  conjunction  with the  Marks  except  for the Marks
themselves (or any variation  thereof) that are developed,  authored,  created,
invented or  otherwise  originated  by Licensee or any  successor  or assign of
Licensee of this Agreement permitted  hereunder.  For example,  should Licensee
name a Project The Meadows at Northstar,  Licensor  shall not own the trademark
The Meadows.  Licensee shall have the right to apply for valid registrations in
the name of Licensee with respect to such developed trademark (exclusive of the
Marks). For example, Licensee may apply to register The Meadows but in no event
shall Licensee apply to register Northstar,  Northstar at Tahoe, The Meadows at
Northstar or The Meadows at Northstar at Tahoe. All authorized use of the Marks
pursuant to this License and the related goodwill shall inure to the benefit of
Licensor.

<PAGE>

     9.  Consideration.  The mutual covenants and considerations of the parties
contained in this Agreement and the Operating  Agreement are the  consideration
for the License granted hereunder.

     10. Term.  Unless  earlier  terminated  pursuant to the provisions of this
Agreement,  this  Agreement  shall  continue  in effect  during the period that
Licensee or  Sublicensee  is actively  engaged in the  acquisition,  ownership,
construction, development, operation or sale of the Projects, commencing on the
date written above (the "Term").

     11.  Termination.  This  Agreement may be terminated by Licensor for cause
immediately upon the occurrence of any of the following  events:

          a.  If  Licensee   breaches  in  any  material  respect  any  of  its
obligations  under this  Agreement  and fails to cure such breach  within sixty
(60) days after receipt of written notice describing the breach;

          b. If Licensee seeks protection  under any bankruptcy,  receivership,
creditors arrangement or other comparable proceeding, or if any such proceeding
is instituted  against  Licensee (and not dismissed  within one hundred  twenty
(120) days); or

          c. If Licensee  ceases to conduct its business in the ordinary course
for any reason,  including,  without  limitation,  by reason of  dissolution or
liquidation.

     12.  Obligations  of Licensee Upon  Termination  or  Expiration.  Upon the
expiration or termination of this Agreement,  all rights of Licensee  hereunder
shall immediately  terminate,  Licensee shall immediately cease and desist from
all use of the  Marks,  change  its name and shall not adopt any other  name or
mark incorporating the Marks,  either alone or in conjunction with other words,
or any other mark or  designation  confusingly  similar to the Marks.  Licensee
further  agrees to provide any and all  assistance,  and to execute any and all
documents,  necessary or appropriate to confirm Licensor's  exclusive ownership
of the Marks.  Licensee agrees not to enter into any contract involving its use
of the Marks that would extend  beyond the term of this  Agreement  without the
written consent of Licensor.

     As part of the sale of any  Project  to a  Purchaser,  Licensor  agrees to
enter  into a  license  with the  Purchaser  containing  terms  and  conditions
substantially  similar to those contained herein,  except that the term of such
license  shall  be  limited  to the term in which  Licensor  uses the  Marks in
connection with the Ski Resort. "Purchaser" shall mean a purchaser of a Project
or  substantially  all of  Licensee's  or  Sublicensee's  interest in a Project
(including  a  homeowners  association,   condominium  association,   timeshare
interest, or development group).

     13. Miscellaneous.

          a.  Indemnification.  Licensee  agrees to indemnify,  defend and hold
harmless Licensor, its principals, shareholders, officers, directors, employees
and agents from any and all liabilities,  claims,  losses, damages and expenses
(including  counsel  fees)  relating to or arising from  Licensee's  use of the
Marks,  activities under this Agreement,  and failure to observe or perform any
of its obligations set forth herein or relating hereto,  including the acts and
omissions  of  Licensee's  agents,  officers  and  employees.
<PAGE>

          b. Third Party Beneficiary.  The parties herein agree and acknowledge
that Northstar  Mountain  Properties,  LLC, in its capacity as a sublicensee of
the Marks, is an intended third party  beneficiary of this Agreement.  Licensor
expressly  acknowledges  and agrees to Section 7(f) of that  certain  Trademark
Sublicense  Agreement dated as of September , 2000, by and between Licensee and
Northstar Mountain Properties, LLC.

          c.  Inurement;  Assignment.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective  successors and
assigns,  provided that, Licensee shall not transfer,  sublicense or assign any
of its rights or  privileges  hereunder  without the prior  written  consent of
Licensor; provided, however, that Licensor hereby consents to the Sublicense.

          d.  Independence  of Parties.  The status of the  parties  under this
Agreement  shall be that of independent  contractors and neither party shall be
deemed or construed to be an employee,  agent,  partner or legal representative
of the other party for any  purpose  whatsoever.  Neither  party shall have the
right  or  authority  to  assume  or  otherwise   create  any   obligation   or
responsibility,  express or  implied,  on behalf of or in the name of the other
party or to bind the other party in any manner whatsoever.

          e. Notices. Any notice required by this Agreement shall be in writing
and sent via guaranteed overnight carrier,  courier delivery or certified mail,
return receipt requested, and addressed as shown below. Any such notice will be
effective on the date delivered.

            Licensor:

            Trimont Land Company
            1000 South Frontage Road, Suite 100
            Vail, Colorado  81657
            Attention:  Elizabeth J. Cole and Christopher P. Ryman

            Copy to:

            Michael D. Beck, Esq.
            Loeb & Loeb LLP
            345 Park Avenue
            New York, New York 10154

            Licensee:

            Trimont Land Holdings, Inc.
            1000 South Frontage Road, Suite 100
            Vail, Colorado  81657
            Attention:  Elizabeth J. Cole and Christopher P. Ryman
<PAGE>

            Copy to:

            Michael D. Beck, Esq.
            Loeb & Loeb LLP
            345 Park Avenue
            New York, New York 10154

          f.  Severability.  Should any part or provision of this  Agreement be
held  unenforceable  or in  conflict  with  the  law of any  jurisdiction,  the
validity of the  remaining  parts or  provisions  shall not be affected by such
holding, unless such unenforceability  substantially impairs the benefit of the
remaining  portion  of this  Agreement.  In  addition,  the  parties  agree  to
negotiate in good faith to substitute enforceable provisions which most clearly
affect the parties' intent in entering into this Agreement.

          g. Governing  Law. This Agreement  shall be governed and construed in
accordance with the laws of the State of California.

          h.   Integration.   This  Agreement,   together  with  the  Operating
Agreement,  embody the entire understanding of the parties as it relates to the
subject matter contained herein and as such,  supersedes any prior agreement or
understandings   between  the  parties  relating   thereto.   No  amendment  or
modification  of this  Agreement  shall be valid or  binding  upon the  parties
unless signed by their respective, duly authorized officers.

          i.  Waiver.  No failure  or delay on the part of either  party in the
exercise of any right or privilege hereunder shall operate as a waiver thereof,
nor shall  any  single  or  partial  exercise  of any such  right or  privilege
preclude other or further  exercise thereof or of any other right or privilege.
No waiver shall be binding unless executed, in writing, by the party making the
waiver.

          j. Headings.  The headings used in this Agreement are for convenience
only and are not to be used in  interpreting  the  obligations  of the  parties
under this Agreement.

      [remainder of this page intentionally left blank, signatures follow]

<PAGE>

IN  WITNESS  WHEREOF,  the  parties  hereto  attest  that  they  have been duly
authorized to execute this  Agreement and have so executed this  Agreement made
effective as of the date first above written.

                              LICENSOR:
                              --------

                              TRIMONT LAND COMPANY, a California corporation

                              By:  /s/ Elizabeth J. Cole
                                 ----------------------------------------------
                                 Elizabeth J. Cole, Executive Vice President

                              LICENSEE:
                              --------

                              TRIMONT LAND HOLDINGS, INC.,
                              a Delaware corporation

                              By:  /s/ Elizabeth J. Cole
                                 ----------------------------------------------
                                 Elizabeth J. Cole, Executive Vice President

<PAGE>

                                   EXHIBIT H

                                   Net Lease

                                   ---------

                              NET LEASE AGREEMENT

          THIS NET LEASE (as the same may be amended or otherwise modified from
time to time, this "Lease") dated as of the 22nd day of September,  2000 by and
between TRIMONT LAND HOLDINGS, INC., a Delaware corporation,  having an address
at c/o Booth Creek Ski Holdings,  Inc., 1000 S. Frontage Road West,  Suite 100,
Vail,  Colorado  81657  (hereinafter  referred to as "Lessor") and TRIMONT LAND
COMPANY,  a  California  corporation,  having an address at c/o Booth Creek Ski
Holdings,  Inc.,  1000 S. Frontage Road West,  Suite 100, Vail,  Colorado 81657
(hereinafter referred to as "Lessee").

          WHEREAS  Lessor is the owner of those  certain  tracts or  parcels of
land situated in Placer County,  California,  which is more fully  described in
Exhibit "A" attached hereto (hereinafter referred to as the "Land"),  excluding
all Improvements (as hereinafter  defined) erected thereon and all water rights
derived therefrom, and

          WHEREAS Lessor agreed prior to the delivery to Lessor of the Deed and
as a condition  of  Lessee's  delivery of the Deed to Lessor to enter into this
Lease and a memorandum of this lease.

          NOW THEREFORE,  the parties hereto,  in consideration of the premises
and intending to be legally bound, agree as follows:

          1. Leased Premises. Lessor hereby leases to Lessee, and Lessee hereby
hires from Lessor the  portion of the Land  described  on Exhibit "B"  attached
hereto (the "Leased Premises") and all improvements owned by Lessor thereon.

          2. Term.  The term of this Lease (the  "Term")  shall be  ninety-nine
(99)  years  commencing  on the date  first  above  written,  and  expiring  on
midnight,  on the day preceding the ninety-ninth  anniversary of the date first
above written or such earlier date as this Lease, or portions  thereof,  may be
terminated as expressly set forth herein.

          3. Rent  During  Term.  Lessee  agrees to pay to Lessor an annual net
minimum  rent  ("Minimum  Rent")  equal to One Dollar  ($1.00)  per annum.  The
Minimum Rent has been paid by Lessee to Lessor in advance in a lump sum payment
of Ninety-Nine  Dollars  ($99.00),  receipt of which is hereby  acknowledged by
Lessor.

          4. Real Estate Taxes and Assessments.

               (a)  Throughout the Term hereof,  Lessor shall pay,  before they
become delinquent,  all real estate taxes,  assessments,  water and sewer rents
and charges,  liens,  and all other  governmental  charges,  whether general or
special,   ordinary  or   extraordinary,   which  are  imposed  upon  the  Land
(hereinafter referred to as "Tax" or collectively as "Taxes").  Lessee will pay
an equitable  share of such total tax allocable to the Leased  Premises  within
<PAGE>

ten (10) days  following  Lessee's  receipt of proof of payment and a bill from
Lessor for Lessee's allocable share. Lessee will reimburse Lessor with interest
at four percent (4%) above the Prime Rate (as hereinafter  defined) for any Tax
payable by Lessee  which is not paid when due from  Lessee.  Lessee may pay any
tax  payable  by Lessor  which is not paid when due and Lessor  will  reimburse
Lessee with interest at four percent (4%) above the Prime Rate (as  hereinafter
defined).

               (b) Any Taxes  assessed  during  the Term  which are  payable in
installments may be paid in such  installments  over the longest period of time
permissible by law.

               (c) The  Lessor,  or the  Lessee,  in the  name of  Lessor,  may
contest or appeal any Tax,  provided that such  contesting  party complies with
the  requirements  of any Tax and of any  Leasehold  Mortgage  (as  hereinafter
defined).  If the contesting party shall receive any benefit of such contest or
appeal,  after  reimbursement to the contesting party of the expenses  thereof,
the balance shall be allocated  between  Lessor and Lessee on the same basis as
payment of such Tax is allocated between them pursuant to paragraph (a) above.

               (d) At any time  following the earlier to occur of (i) the fifth
anniversary of the date of this Agreement or (ii) a material  default by Lessor
under Paragraph 4(a) above,  Lessor and Lessee shall promptly make arrangements
with the  appropriate  taxing  authorities  to cause the Leased  Premises to be
taxed as one or more separate tax lots from Land.

               (e) Nothing in this Lease  shall be  construed  as placing  upon
Lessee any obligation to pay any income tax,  franchise tax or corporate  stock
tax of Lessor.

          5. Net Lease.  The Lessor and Lessee agree that this is a "net lease"
and that Lessor shall not,  during the Term of this Lease,  be responsible  for
any costs,  charges or expenses  required to be paid to maintain  and carry the
Leased  Premises or to continue the  ownership of Lessor,  other than  payments
under any deed of trust or other  obligations now existing or hereafter created
by Lessor or those  expressly  provided for herein or in that certain  easement
agreement  of even date  herewith  encumbering  the  Leased  Premises  (as such
easement  agreement may be amended or restated from time to time, the "Easement
Agreement").

          6. Lessor's Title;  Quiet Enjoyment.  Lessor represents and covenants
that it has fee  simple  title to the  Leased  Premises  with  full  right  and
authority to make this Lease.  Lessee shall have quiet and peaceful  possession
and enjoyment of the Leased Premises during the Term.

          7. Use. Lessee may use the Leased Premises for any lawful purpose.

          8. Possession. Lessor shall deliver possession of the Leased Premises
to Lessee on the date of this Lease.

          9. Compliance with Laws.  Throughout the Term Lessee shall indemnify,
defend and hold Lessor  harmless from any fines,  penalties,  claims or damages
arising by reason of the violation by Lessee of any laws,  ordinances,  orders,
requirements  or  regulations  of  any  Federal,  State,  County  or  Municipal
<PAGE>

authorities  having  jurisdiction over the Leased Premises.  Lessee may contest
the validity of any such law,  order,  ordinance,  requirement  or  regulation.
Lessee need not comply with any such requirements  which are the obligations of
the Lessor under the terms of the Easement Agreement.

          10. Improvements Upon Leased Premises.

               (a)  Lessee  may,  at any time after  commencement  of the Term,
destroy,  remove,  alter or make any  Improvements  upon the  Leased  Premises.
Neither  Lessor  nor  Lessee  shall be under any  obligation  to  construct  or
maintain any Improvements upon the Leased Premises;  and any monies received by
Lessor  as  compensation  for  damage  or loss to  Improvements  on the  Leased
Premises shall be paid to Lessee and are hereby assigned to Lessee.

          11. Ownership of Improvements.

               (a) Title to any buildings,  improvements  and/or fixtures which
are now or shall be hereafter during the Term of the Lease placed in or upon or
affixed  to the Leased  Premises  ("Improvements")  shall  remain in Lessee and
Lessee  alone  shall be  entitled to claim  depreciation  therefor;  and Lessor
agrees to subordinate all rights,  if any, which Lessor may have in any of such
Improvements  to the rights of Lessee and any Leasehold  Mortgagee.  Lessee may
remove  the  Improvements  at any  time  before  or upon  vacating  the  Leased
Premises.

               (b) Notwithstanding any existing or future statute,  law or rule
of law to the contrary, Lessor hereby waives, releases and relinquishes any and
all rights of  distraint,  levy,  attachment  or recourse  to the  Improvements
belonging  to Lessee or any of the  sublessees  of Lessee or any other  person,
firm or  corporation,  or any rent  payable by any  sublessee.  Provided  that,
although  the   foregoing   waiver,   release  and   relinquishment   shall  be
self-operative  without the necessity  for any further  instrument or document,
Lessor  hereby  agrees,  without  limiting the  effectiveness  of the foregoing
waiver, release and relinquishment herein contained,  to furnish Lessee (and/or
Lessee's  sublessees or any vendor or other supplier under a conditional  sale,
chattel mortgage or other security  arrangement,  any consignor,  any holder of
reserved title or any holder of a security interest), upon written request from
time to time,  waivers of Lessor's  rights of  distraint,  levy,  attachment or
recourse on any such Improvements and exempting the same from distraint,  levy,
attachment or recourse.

          12.  Utilities.  Lessee  shall pay all charges  for utility  services
furnished to the Leased Premises.

          13.  Indemnification.  Lessee  shall save  Lessor  harmless  from any
liability  or expense of any nature  arising from injury to persons or property
on or about the Leased  Premises,  or in connection with Lessee's  occupancy of
the Leased  Premises,  excepting  any such  liability or expense  caused by the
negligence or willful conduct of Lessor. Any liability insurance  maintained by
Lessee shall name both Lessor and Lessee as the insured parties.
<PAGE>

          14. Casualty.

               (a) The respective obligations of Lessor and Lessee shall not be
affected by fire or other  casualty.  Lessor  agrees that Lessor  shall make no
claim against Lessee, and Lessee's  employees,  servants,  agents or tenants in
connection  with any  casualty  damaging  the Leased  Premises,  whether or not
caused by the negligence of Lessee,  Lessee's  employees,  servants,  agents or
tenants.

               (b) Lessor  acknowledges  and agrees  that it shall not have any
claim  against any insurance  proceeds  payable to Lessee and that in the event
the first Leasehold  Mortgagee  requires insurance proceeds to be used to repay
the  indebtedness  secured by the Leasehold  Mortgage,  such proceeds may be so
utilized (as hereinafter defined). Otherwise the insurance proceeds may be used
for restoration or as otherwise  permitted by the Leasehold Mortgagee or if the
indebtedness  has been paid in full, such proceeds may be used as determined by
Lessee.

          15. Eminent Domain.

               (a) If all or any portion of the Leased Premises is taken by any
right of eminent  domain,  Lessor agrees to give  immediate  notice  thereof to
Lessee.

               (b) If all or any  portion  of the Leased  Premises  shall be so
taken, Lessee may, subject to the provisions of Section 16(b) hereof, terminate
this Lease with respect to all or any portion of the Leased  Premises by giving
written  notice to Lessor  within  three (3) months of receipt  from  Lessor of
notice of such taking. Upon any such termination both parties shall be released
from any further  liability  under this Lease with respect to such  portions of
the Leased Premises affected by such termination.

               (c) Whether or not this Lease is terminated as herein  provided,
each  party  may make  claim  for its own  award as its  interest  may  appear;
however,  in any event (i) Lessor  hereby  assigns  to Lessee any  condemnation
award made for damage to or taking of  Improvements  on the Leased Premises and
for the  value of  Lessee's  leasehold  interest  and (ii)  the  holder  of any
Leasehold Mortgage shall be paid all of any award set forth in clause (i) above
to the extent of the unpaid principal sum of interest and all other amounts due
under such mortgage at the time of the taking, with such payments being made in
the order of priority of each such Leasehold Mortgage,  prior to the payment of
any portion of such award to Lessor or Lessee.

          16. Leasehold  Mortgages.  Lessee,  and every successor and assign of
Lessee, is hereby given the right  (exercisable at any time from time to time),
without Lessor's prior written consent, to mortgage its interest in this Lease,
under  one or more  leasehold  mortgage(s)  ("Leasehold  Mortgage(s)"),  and to
assign this Lease as security.  Any such Leasehold  Mortgage may encumber other
property or  properties  of Lessee in  addition  to  Lessee's  interest in this
Lease.  If Lessee and/or  Lessee's  successors  or assigns shall  mortgage this
leasehold,  and if the holder ("Leasehold Mortgagee") of the Leasehold Mortgage
shall  send to  Lessor  a true  copy  thereof,  together  with  written  notice
<PAGE>

specifying  the holder's  name and address,  Lessor  agrees that the  following
provisions  shall apply to each such  Leasehold  Mortgage and to any successive
holders thereof,  and shall supersede any inconsistent  provisions contained in
any other  Paragraph of this Lease,  as long as the  Leasehold  Mortgage  shall
remain  unsatisfied of record or until written notice of  satisfaction is given
by the holder thereof to Lessor.

               (a)  Without  the  prior  written   consent  of  each  Leasehold
Mortgagee,  Lessor shall not accept any voluntary  surrender of this Lease, nor
shall Lessor and Lessee  enter into any  agreement  modifying or amending  this
Lease or any term or  condition of this Lease,  nor shall  Lessee  exercise any
right or option to cancel or terminate  this Lease.  No voluntary  surrender of
this Lease,  or amendment or  modification of this Lease, or exercise by Lessee
of any such  right or  option  to  cancel  or  terminate  this  Lease  shall be
effective   until  Lessor  receives  the  written  consent  of  each  Leasehold
Mortgagee.

               (b) So long as any Leasehold  Mortgage is in  existence,  unless
all Leasehold  Mortgagees shall otherwise expressly consent in writing, the fee
title to the Premises and the leasehold  estate of Lessee created by this Lease
shall not merge,  but shall remain separate and distinct,  notwithstanding  the
acquisition of both fee title to the Leased  Premises and the leasehold  estate
by Lessor, or by Lessee, or by any Leasehold Mortgagee, or by any other party.

               (c) Lessor shall not exercise any rights or remedies pursuant to
this Lease, including,  but not limited to, any rights to re-enter,  re-possess
or re-let the Leased Premises, without first having terminated this Lease.

               (d)  Lessor  shall,  upon  providing  Lessee  with any notice of
default or notice of  termination  or other notice  provided for in this Lease,
simultaneously provide a copy of such notice to each Leasehold Mortgagee and no
such  notice to Lessee  shall be  effective  until a copy of such  notice is so
provided to each Leasehold Mortgagee.  Each Leasehold Mortgagee shall thereupon
have the same right as Lessee, but not the obligation, to remedy or to cause to
be remedied or to commence to remedy the defaults  which are the subject matter
of such  notice,  in addition  to the other  rights  granted to each  Leasehold
Mortgage in this  Paragraph 16. Lessor shall accept such  performance  by or at
the instigation of such Leasehold Mortgagee as if the performance had been done
by Lessee.  Lessee authorizes each Leasehold  Mortgagee to take any such action
at such Leasehold  Mortgagee's  option and each  Leasehold  Mortgagee is hereby
authorized to enter on the Leased Premises for such purpose.

               (e)   Anything   contained   in  this  Lease  to  the   contrary
notwithstanding,  if any  default  shall occur  which  constitutes  an Event of
Default (as hereinafter defined) pursuant to Paragraph 22 of this Lease, Lessor
shall have no right to terminate  this Lease by reason of such Event of Default
unless,  following the expiration of any applicable period of time given Lessee
to cure such default,  Lessor shall first submit to each Leasehold  Mortgagee a
notice of default (the  "Mortgagee  Notice of Default"),  which shall contain a
statement of all existing  Events of Default  under the Lease.  If within sixty
<PAGE>

(60) days after  receipt  of such  Mortgagee  Notice of  Default,  a  Leasehold
Mortgagee  shall have cured any stated  monetary  Event of Default and/or shall
have cured or  commenced to cure any stated  non-monetary  Event of Default and
shall  thereafter  prosecute the same to completion with reasonable  diligence,
then in such event,  Lessor shall not be entitled to  terminate  this Lease and
both the notice of default given to Lessee and the Mortgagee  Notice of Default
given to each Leasehold  Mortgagee shall be null and void and of no effect.  In
the event  that a  Leasehold  Mortgagee  shall fail  either to comply  with the
provisions  of this  subparagraph  (e) or to  notify  Lessor  of its  intent to
proceed under subparagraph (f) below, then at the expiration of such sixty (60)
day period Lessor may, at its option,  submit a Notice of Termination  pursuant
to subparagraph (g) below and,  subject to the provisions of subparagraphs  (f)
and  (g)  below,  terminate  this  Lease  pursuant  to the  provisions  of this
Paragraph and Paragraph 24 of the Lease by reason of such Event of Default.

               (f)  In  addition,  notwithstanding  anything  to  the  contrary
contained in this Lease, if any default shall occur which  constitutes an Event
of Default  pursuant to  Paragraph  22 of this Lease and Lessor  shall elect to
terminate this Lease by reason of such Event of Default, a Leasehold  Mortgagee
shall not only have the right to  nullify  the  notice of default to Lessee and
the  Mortgagee  Notice of Default as set forth in  subparagraph  (e), but shall
also  have the  right  to  postpone  Lessor's  right to  terminate  this  Lease
following  the  expiration  of  the  sixty  (60)  day  period  referred  to  in
subparagraph (e), provided:

                    (i) that  Leasehold  Mortgagee  shall notify  Lessor within
such  sixty  (60) day period or within  thirty  (30) days after its  receipt of
Lessor's Notice of Termination referred to in subparagraph (e) above, whichever
is later, that it has elected to proceed under this subparagraph (f); and

                    (ii) that Leasehold Mortgagee shall:

                         (A)  cure or cause to be  cured  any  stated  monetary
Event of Default; and

                         (B)  pay  or  cause  to be  paid  any  other  monetary
obligations  of Lessee under this Lease as such becomes due and attempt in good
faith to perform all of Lessee's other obligations under this Lease,  excepting
any  non-monetary  obligations  of  Lessee  under  this  Lease  which  are  not
reasonably  susceptible  of being  complied  with or  performed  by a Leasehold
Mortgagee without having gained  possession of the Premises;  and take steps to
acquire or sell Lessee's interest in this Lease by foreclosure or otherwise and
prosecute the same to completion with reasonable diligence,  except if enjoined
or stayed and to the extent enjoined or stayed.

          If at the end of the  six-month  period  following the sixty (60) day
period referred to in subparagraph (e),  Leasehold  Mortgagee is complying with
this  subparagraph  (f), the  postponement  of Lessor's right to terminate this
Lease shall continue, and the time for completion by Leasehold Mortgagee of the
acquisition or sale of Lessee's interest in this Lease shall continue,  so long
as  Leasehold  Mortgagee  is  enjoined  or stayed  or, in the  absence of being
enjoined or stayed,  for so long as Leasehold  Mortgagee proceeds to acquire or
sell  Lessee's  interest  in  this  Lease  by  foreclosure  or  otherwise  with
<PAGE>

reasonable  diligence and continuity.  If Leasehold Mortgagee is complying with
the provisions of this subparagraph (f), then upon Leasehold Mortgagee's having
caused  this Lease to be  transferred  by  foreclosure,  assignment  in lieu of
foreclosure  or otherwise,  this Lease shall continue in full force and effect,
as if there were no default hereunder,  as a lease between Lessor and Leasehold
Mortgagee,  or its designee,  or the  purchaser of the leasehold  estate in any
foreclosure proceedings,  or the assignee or transferee of the leasehold estate
under any  assignment  or  transfer  in lieu of  foreclosure.  Nothing  in this
subparagraph (f),  however,  shall be construed to extend this Lease beyond the
original  term  hereof or to  require  Leasehold  Mortgagee  to  continue  such
foreclosure or other steps after the stated Event of Default has been cured. If
the  stated  Event of  Default  shall be cured and  Leasehold  Mortgagee  shall
discontinue such foreclosure or other steps,  this Lease shall continue in full
force and effect as if Lessee had not defaulted  under this Lease. In the event
all  Leasehold  Mortgagees  either  have  not  elected  to  proceed  under  the
provisions  of this  subparagraph  (f) or if any have elected to proceed  under
this  subparagraph  (f) and thereafter all have failed to comply with the terms
and conditions hereof,  Lessor may, at its option, give a Notice of Termination
pursuant  to  subparagraph   (g)  below  and,  subject  to  the  provisions  of
subparagraph (g) below, terminate this Lease pursuant to the provisions of this
Paragraph and Paragraph 24 of this Lease.

               (g) Lessor agrees that, in order to terminate  this Lease (which
for purposes of this  subparagraph  (g) shall also include any succeeding lease
made pursuant to this  subparagraph  or like  provisions of any such succeeding
lease) by reason of the  default  of  Lessee,  Lessor  shall,  in  addition  to
providing any notice of default to Lessee  required under  Paragraph 23 of this
Lease  (with  a copy of  such  notice  to  each  Leasehold  Mortgagee)  and the
Mortgagee  Notice of Default  required under  subparagraph  (e) above,  provide
Lessee and each Leasehold  Mortgagee with written notice of Lessor's  intent to
terminate this Lease (the "Notice of  Termination"),  together with a statement
of the proposed  effective  date of such  termination  (the  "Statement"),  the
existing  Events of Default and all other  defaults under this Lease then known
to Lessor,  at least sixty (60) days in advance of the proposed  effective date
of the  termination.  Lessor  agrees to enter  into a new  lease of the  Leased
Premises with Leasehold  Mortgagee,  or its designee,  for the remainder of the
term of this Lease, effective as of the date of such termination,  at the rent,
and upon the terms,  covenants and conditions (including any options to extend)
of this Lease provided:

                    (i)  Leasehold  Mortgagee,  or  its  designee,  shall  make
written  request upon Lessor for such new lease within sixty (60) days after it
has received the foregoing Notice of Termination and Statement; and

                    (ii) at the time of the  execution and delivery of such new
lease,  Leasehold Mortgagee,  or its designee,  (A) shall pay to Lessor any and
all monetary amounts due under this Lease at the time of such termination, less
the income collected by Lessor from the Leased Premises  subsequent to the date
of Lessee's default under this Lease and prior to the execution and delivery of
the new lease and (B) shall cure or  commence  to cure any stated  defaults  or
Events of Default which are reasonably  susceptible of being cured by Leasehold
Mortgagee and shall thereafter prosecute the same to completion with reasonable
diligence.
<PAGE>

          If the holders of more than one Leasehold Mortgage shall make written
request upon Lessor for a new lease in accordance  with the  provisions of this
subparagraph  (g), the new lease shall be entered into  pursuant to the request
of the holder whose Leasehold  Mortgage shall be prior in lien, and the written
request for a new lease of each holder of a Leasehold  Mortgage  junior in lien
shall be and shall be deemed to be void and of no force or effect.

          This Lease shall be and shall be deemed to  constitute  the new lease
in favor of the first lien Leasehold  Mortgagee unless the first lien Leasehold
Mortgagee  or its  designee  shall elect by notice  given to Lessor  within the
sixty (60) day period after receipt of the Notice of Termination  and Statement
to terminate the new lease. Upon request of the first lien Leasehold Mortgagee,
Lessor will enter into a new lease in  confirmation of the new lease granted to
the first lien  Leasehold  Mortgagee,  provided that failure to do so shall not
affect the validity or effectiveness of the new lease.

          Any new lease pursuant to this  subparagraph  (g) shall have the same
priority as this Lease with respect to any fee  mortgage  ("Fee  Mortgage")  or
other lien, charge or encumbrance on the land and/or the Lessor's  reversionary
interest in the Leased  Premises,  and the lessee under such new lease shall be
liable  thereunder  only during such period after the effective date of the new
lease as it owns the leasehold  estate.  Any Fee Mortgage or other lien, charge
or  encumbrance  on the Land and/or the Lessor's  reversionary  interest in the
Premises  which is subject  to the terms of this Lease  shall be subject to the
terms of the new lease  without any further act or agreement  such that any fee
mortgagee ("Fee  Mortgagee")  and/or any judgment creditor or lienor shall have
no greater  rights  with  respect  to the new lease  than with  respect to this
Lease;  each Fee  Mortgagee  by  accepting  a fee  mortgage  and each  judgment
creditor  or lienor by  entering  a  judgment  or lien  shall be deemed to have
agreed  (i) that such Fee  Mortgage,  judgment  or lien shall be subject in all
respects  to the terms and  conditions  of the new lease and (ii) that such Fee
Mortgagee or judgment creditor shall have no greater rights with respect to the
Leased Premises than those of Lessor under the new lease, and shall,  from time
to time upon  written  request and without  charge,  execute,  acknowledge  and
deliver such  instruments  reasonably  requested by any Leasehold  Mortgagee to
evidence the foregoing agreement. Lessor shall assign to Leasehold Mortgagee or
its designee  under the new lease any subleases  that may have been assigned to
Lessor or entered into by Lessor,  and all of Lessor's rights  thereunder.  Any
such new lease shall  expressly  provide that the  liability  of the  Leasehold
Mortgagee  or its nominee  shall be limited to its  interest  in the  leasehold
estate.

               (h)  Nothing   contained  herein  shall  require  any  Leasehold
Mortgagee or its designee,  as a condition to its exercise of any of its rights
under this Paragraph 16:

                    (i)  to  cure  any   default  of  Lessee   not   reasonably
susceptible of being cured by any person or entity other than Lessee; or

                    (ii) to cure or  commence  to cure  any  Event  of  Default
consisting  of Lessee's  failure to satisfy or  discharge  any lien,  charge or
encumbrance  against  Lessee's  interest  in this Lease or the Leased  Premises
<PAGE>

which is junior in priority to the lien of the Leasehold  Mortgage held by such
Leasehold  Mortgagee  (provided  that such junior lien is not a lien on the fee
estate in the premises).

          Any  such  default  referred  to in  clauses  (i)  and  (ii)  of this
subparagraph  (h)  which is not  cured by  Leasehold  Mortgagee,  its  nominee,
designee or purchaser  upon  foreclosure,  assignment in lieu of foreclosure or
other  enforcement  of the Leasehold  Mortgage shall be deemed waived by Lessor
upon completion of such foreclosure, assignment in lieu of foreclosure or other
enforcement of the Leasehold Mortgage or upon the effectiveness of a new lease.

               (i) For purposes of this Lease,  a transfer of this Lease by way
of foreclosure or in lieu of foreclosure  shall not constitute an assignment of
this Lease  requiring  Lessor's  consent  nor shall it  constitute  an Event of
Default hereunder. A Leasehold Mortgagee, as such, shall not be deemed to be an
assignee  or  transferee  of this  Lease or of the  leasehold  estate  so as to
require such Leasehold Mortgagee to assume the performance of any of the terms,
covenants and conditions on the part of Lessee to be performed  hereunder.  The
liability of any Leasehold  Mortgagee,  its  successors  and assigns,  shall be
limited in all respects to its interest in this Lease and the leasehold  estate
created hereby. Neither the Leasehold Mortgagee, its successors or assigns, nor
any agents, partners, officers, trustees, directors, shareholders or principals
(disclosed or  undisclosed)  of such  Leasehold  Mortgagee,  its  successors or
assigns,  shall have any personal liability hereunder and no judgment or decree
that shall be enforceable  beyond the interest of the Leasehold  Mortgagee,  or
its  successors or assigns,  in the leasehold  estate  created under this Lease
shall be sought or entered in any action or proceeding brought on account of or
in connection with any default in the keeping, observance or performance of any
covenant, agreement, term or-condition of this Lease. The purchaser at any sale
of this Lease and of the leasehold estate in any proceedings for foreclosure of
any Leasehold Mortgage,  or the assignee or transferee of this Lease and of the
leasehold  estate under any instrument of assignment or transfer in lieu of the
foreclosure  of any  Leasehold  Mortgage  shall be deemed to be an  assignee or
transferee within the meaning of Paragraph 18 of this Lease and shall be deemed
to have (i) agreed to perform all of the terms, covenants and conditions on the
part of Lessee to be performed  hereunder  which arise or accrue from and after
the date of such purchase or transfer;  and (ii) to cure all existing  defaults
of Lessee under this Lease,  other than those defaults which are not reasonably
susceptible  of being cured by any person or entity other than Lessee;  but the
liability of any such purchaser or transferee  shall be limited in all respects
to its interest in this Lease and the  leasehold  estate  created  hereby,  and
neither such  purchaser  or  transferee,  its  successors  or assigns,  nor any
agents, partners, officers, directors, shareholders or principals (disclosed or
undisclosed)  of such purchaser or transferee,  its successors or assigns shall
have any personal  liability  hereunder and no judgment or decree that shall be
enforceable  beyond  the  interest  of  such  purchaser  or  transferee  in the
leasehold  estate  created  under this Lease  shall be sought or entered in any
action  or  proceeding  brought  on  account  of any  default  in the  keeping,
observance  or  performance  of any  covenant,  agreement,  term,  provision or
condition of this Lease.

               (j) Lessor shall, upon request, execute, acknowledge and deliver
to each Leasehold Mortgagee an agreement, prepared at the sole cost and expense
of Lessee and in form satisfactory to such Leasehold  Mortgagee,  among Lessor,
Lessee and the  Leasehold  Mortgagee,  confirming  and  agreeing  to all of the
provisions of this  Paragraph 16. The  provisions of this Paragraph 16 shall be
<PAGE>

for the  benefit of and  enforceable  by any  Leasehold  Mortgagee  without the
necessity for and regardless of whether any such  confirmation  agreement shall
be requested or executed.

               (k) If Lessee shall fail to timely  exercise any option provided
to Lessee under this Lease,  Leasehold  Mortgagee shall  nevertheless  have the
right to  exercise  such option for Lessee  provided  that it does so not later
than thirty (30) days after  written  notice from Lessor that Lessee has failed
to timely exercise such option.

               (l) No payment  made to Lessor by a  Leasehold  Mortgagee  shall
constitute  agreement  that such payment  was, in fact,  due under the terms of
this  Lease;  and any  Leasehold  Mortgagee  having  made any payment to Lessor
pursuant to Lessor's  wrongful,  improper or mistaken notice or demand shall be
entitled to the return of any such payment.

               (m) Notices from Lessor to any Leasehold  Mortgagee  shall be in
writing and mailed to such Leasehold Mortgagee by registered or certified mail,
postage  prepaid,  return receipt  requested,  or hand delivered at the address
furnished by such Leasehold  Mortgagee pursuant to this Paragraph 16, and those
from any Leasehold  Mortgagee to Lessor shall be in writing and hand  delivered
or mailed to Lessor by registered or certified mail,  postage  prepaid,  return
receipt requested,  at the address designated in the preamble of this Lease; or
in either case to such other  address as the party to receive the notice  shall
have  specified by notice  given  pursuant  hereto.  Notices from Lessor to any
Leasehold  Mortgagee shall not be deemed given or effective until the date they
have been received.

               (n)  Neither  Lessee  nor  Lessor  shall be deemed to be a third
party beneficiary of the rights granted  hereunder to Leasehold  Mortgagees and
no Leasehold  Mortgagee shall have any obligation to either Lessee or Lessor to
account for any decision it may make as to whether or not it elects to exercise
its rights  hereunder  or any duty to either  Lessee or Lessor to exercise  its
rights  hereunder  in any  particular  manner or order,  other  than that which
Leasehold Mortgagee, in its sole discretion,  shall deem appropriate and in its
own best interests.

          17.  Lessor's  Joinder.  Lessor will upon request  from  Lessee,  and
without  any cost or  expense to  Lessor,  (a) join with  Lessee in any and all
applications and consents for permits, licenses, zoning changes,  annexation of
the Leased  Premises  to any  governmental  unit,  or any other  authorizations
required by any governmental or other body claiming  jurisdiction in connection
with any work on or pertaining  to the Leased  Premises or the enjoyment of any
of Lessee's  rights and privileges  hereunder;  and (b) join with Lessee in any
grants for easements or dedications or conveyances for electricity,  telephone,
gas,  water,  sewer  and  other  public  utilities  and  facilities  and in any
dedications  of  streets,  as  Lessee  may  require  for the use of the  Leased
Premises.  Lessor  agrees to  execute  such  applications,  consents  and other
documents as may be required in order to effectuate any of the foregoing.
<PAGE>

          18. Assignment and Subletting.

               (a) Lessee may assign  this Lease or  sublease  the whole or any
part of the Leased  Premises  from time to time  without  the prior  consent of
Lessor.

               (b) In each such case of an assignment,  the assignee  shall, in
the instrument of assignment or in a duly executed and acknowledged  collateral
instrument,  assume  the  performance  of  all  of  the  terms,  covenants  and
conditions on the part of Lessee to be performed  hereunder  from and after the
date of such assignment.  Lessee agrees to deliver to Lessor promptly following
any assignment of this Lease a duplicate original counterpart of the instrument
of assignment,  in recordable  form,  and of any  collateral  instrument of the
character  described  above.  Upon any  such  assignment  as in this  Paragraph
permitted and delivery to Lessor of such duplicate original  counterpart of the
instrument of assignment and of any such collateral instrument, Lessee shall be
released from the performance of all of the terms,  covenants and conditions of
this Lease  thereafter to be performed by Lessee,  but nothing herein contained
shall release Lessee from the  performance  of any of the terms,  covenants and
conditions  required to be  performed  by Lessee  prior to the time of any such
assignment.

               (c)  Notwithstanding  anything  to  the  contrary  contained  in
subparagraph 18(b), for the purpose of this Paragraph the making of a Leasehold
Mortgage  shall not be deemed to  constitute  an assignment of this Lease or of
the  leasehold  estate  hereby  created,  shall not require the  delivery of an
assignment  and assumption  agreement,  nor shall any Leasehold  Mortgagee,  as
such,  be deemed an assignee of this Lease or of the  leasehold  estate  hereby
created so as to  require  such  Leasehold  Mortgagee,  as such,  to assume the
performance of any of the terms,  covenants or conditions on the part of Lessee
to be performed  hereunder  but the  purchaser at any sale of this Lease and of
the leasehold  estate hereby created in any  proceedings for the foreclosure of
any  Leasehold  Mortgage,  or the  assignee of this Lease and of the  leasehold
estate  hereby  created  under  any  instrument  of  assignment  in lieu of the
foreclosure of any Leasehold Mortgage, shall be deemed to be an assignee within
the  meaning  of this  Paragraph  and  shall  be  deemed  to have  assumed  the
performance of all of the terms, covenants and conditions on the part of Lessee
to be  performed  hereunder  from  and  after  the  date of such  purchase  and
assignment.

          19. Estoppel Certificate.  Upon not less than fifteen (15) days prior
written request by Lessee or Lessee to Lessor or Lessee,  respectively,  Lessor
or Lessee, as the case may be, shall execute, acknowledge and deliver to Lessee
or Lessor,  as the case may be, and/or to any mortgagee,  purchaser,  lessee or
sublessee  of Lessee or  Lessor,  as the case may be (or  prospective  mortgage
lender,  purchaser,  lessee or sublessee), a statement in writing certifying to
the best of the certifying party's knowledge, that this Lease is unmodified and
in full force and effect  (or if there have been  modifications,  that the same
are in full force and effect as modified, and setting forth the modifications),
setting  forth the dates to which the rent and  charges  payable  by Lessee and
Lessor  hereunder  have been  paid and  whether  or not  there is any  existing
default by Lessee or Lessor or notice of default  served by Lessor upon Lessee,
or Lessee upon Lessor,  and stating the nature of any such  defaults,  it being
intended that any such  statement  delivered  pursuant to this Paragraph may be
<PAGE>

relied upon by any  existing or  prospective  assignee,  lessee,  sublessee  or
mortgagee of Lessee or Lessor, as the case may be.

          20. Notice.  All notices required or permitted to be served hereunder
or by law,  between  Lessor and Lessee  shall be in  writing  by  certified  or
registered  mail,  return  receipt  requested,  addressed to the parties at the
addresses  specified  on page one of this Lease or such  other  address as each
party may notify the other  party of in  writing.  In  addition,  copies of all
notices sent by Lessor to Lessee shall be sent to Michael D. Beck, Esq., Loeb &
Loeb LLP, 345 Park Avenue,  New York,  New York 10154 and copies of all notices
sent by Lessee to Lessor shall be sent to James F. Wood, Esq.  Sherman & Howard
L.L.C., 633 Seventeenth Street, Suite 3000, Denver, Colorado 80202 and James R.
Wear,  Esq., Wear Travers & Davis PC, 1000 S. Frontage Rd. W., Suite 200, Vail,
Colorado 81657.

          21.  Attornment.  In the event of the  termination  of this  Lease or
Lessee's rights and privileges  hereunder prior to its expiration date,  Lessor
covenants  that  (a)  Lessee's  sublessees  shall  not be  disturbed  in  their
possession in  accordance  with the terms and  conditions  of their  respective
subleases, except for such cause as would entitle Lessee hereunder to terminate
any such sublessee's  sublease,  (b) each such sublease,  if then in existence,
shall  continue with the same force and effect as if Lessor and the  sublessee,
as lessee,  had entered into a lease  containing the same terms,  covenants and
conditions as those contained in the sublease,  and (c) Lessor shall accept the
attornment of any such sublessees as lessee to Lessor.  Lessor agrees,  without
limiting the  effectiveness  of the  foregoing  covenants  and  agreements,  on
request by Lessee or any  sublessee  from time to time,  promptly  to  execute,
acknowledge  and deliver all such  instruments or documents as may be requested
by Lessee or any sublessees in  confirmation  of the foregoing,  and in default
thereof,  Lessee  hereunder is hereby  authorized  as Lessor's  duly  appointed
attorney-in-fact  to execute such  instruments or documents in and on behalf of
Lessor.

          22.  Events of  Default.  Subject to the notice and grace  provisions
provided  below, it shall be an event of default ("Event of Default") if Lessee
violates or fails to keep,  perform or comply with any of the  material  terms,
provisions  and covenants to be kept,  complied  with and performed  under this
Lease by Lessee.

          23.  Notice and Grace.  It is agreed  that no Event of Default on the
part of Lessee shall be deemed to have occurred  unless Lessor shall have given
Lessee notice of the alleged default and

               (a) with respect to an alleged  monetary  default,  Lessee shall
have not remedied such alleged  default within sixty (60) days after receipt of
such notice, and

               (b) with respect to any other alleged default,  Lessee shall not
have  within one  hundred  and twenty  (120) days after  receipt of such notice
commenced  action to remedy such default and diligently  prosecuted such action
thereafter.

          24.  Remedies.  Upon the occurrence of an Event of Default by Lessee,
Lessor shall be entitled to exercise the remedies set forth below:
<PAGE>

               (a) Lessor, subject to the rights of Leasehold Mortgagees herein
set forth, shall have the right to terminate this Lease by giving Lessee notice
of  termination,  and upon the date  specified  in the  notice  of  termination
Lessee's right of occupancy,  together with all other right, title and interest
of Lessee under this Lease shall cease as if that date were the expiration date
of the term of this Lease,  without the  necessity of re-entry or any other act
on Lessor's part. If this Lease is terminated as aforesaid  Lessor may re-enter
the Leased  Premises by summary  proceeding,  ejectment or  otherwise,  and may
dispossess Lessee.

               (b)  Lessor  shall  have  the  right to  obtain  from a court of
competent jurisdiction  injunctive relief,  specific performance and such other
equitable remedies as may be permitted by law.

               (c) If the Event of Default is the failure of Lessee to make any
payment required to be made by Lessee to third parties  hereunder,  Lessor may,
but shall not be obligated to, make such payments on behalf of Lessee, provided
Lessor  shall have given  Lessee  notice of its  intention to do so, and Lessee
shall have failed to make the payment or perform the  obligations,  or commence
performance,  within thirty (30) days after receipt of the notice.  All sums so
expended by Lessor,  together with interest thereon at the Prime Rate plus four
percent (4%) per annum,  shall be repaid by Lessee to Lessor on demand.  "Prime
Rate" shall mean the publicly  announced  prime rate of Chase Manhattan Bank or
its  successor  or the  survivor in the event of bank merger or in the event of
liquidation  of any such bank, the Prime Rate of another bank chosen by Lessor.
No such payment or  expenditure  by Lessor shall be deemed a waiver of Lessee's
Event of Default  until  repayment  has been made nor shall it affect any other
remedy of Lessor by reason of such Event of Default.

          25. Option to Purchase. At any time after twenty-five (25) years from
the date hereof,  Lessee shall have the option to purchase the entire remaining
portion of the Leased Premises for $100.00. Lessor covenants and agrees that as
of the  completion of such  closing,  the property to be conveyed to Lessee and
the property to be retained by Lessor will be in compliance with the zoning and
subdivision laws of Placer County, California. Lessee may exercise the right to
purchase  by  delivery of ten (10) days prior  written  notice to Lessor.  This
Lease shall  constitute  an  agreement  of sale  between  the parties  upon the
exercise  by Lessee of  Lessee's  option to  purchase.  Upon such  exercise  of
Lessee's  option to purchase,  Lessor shall sell and Lessee shall  purchase the
Leased Premises upon the following terms and conditions:

               (a) Closing for the  purchase  of the Leased  Premises  shall be
held at such place and at such hour as shall be  designated  in the notice from
Lessee to Lessor of the exercise of the option to purchase.

               (b) Purchase price for the Leased  Premises shall be One Hundred
Dollars ($100.00).

               (c) Lessee shall pay any realty  transfer  taxes imposed upon or
in  connection  with  the  conveyance  and  all  title  insurance  premiums  in
connection with the conveyance.
<PAGE>

               (d)  Lessor  shall  convey to Lessee a good and  marketable  fee
simple title to the Leased Premises, free and clear of all liens, encumbrances,
easements,  restrictions and other title objections,  except those consented to
or created by Lessee and each  Leasehold  Mortgagee by deed in the same form as
the Deed by which  title  was  conveyed  to  Lessor.  Lessee's  title  shall be
insurable as  aforesaid  at ordinary  rates by any  reputable  title  insurance
company.

               (e) Lessee may not  exercise  the option to  purchase  set forth
herein without the consent of the first Leasehold Mortgagee, if any.

          26. Partial Surrenders and Terminations.

               (a)  Within  thirty  (30)  days  after  (i)  Section  9.1 of the
Agreement for Purchase and Sale of Real Property (the "East West Contract"), of
even date herewith, between Lessor and East West Partners, Inc. (as assigned to
Northstar  Mountain  Properties,  LLC, a  Delaware  limited  liability  company
("Northstar"))  has been fully complied with, as such section has been modified
pursuant to Exhibit U of the Operating  Agreement of Northstar,  ("Exhibit "U")
and (ii)  Northstar  has  complied  in all  material  respects  with all of the
applicable provisions of Exhibit U concerning the demolition and replacement of
certain  improvements  on the Leased  Premises,  Lessee shall  surrender for no
consideration  the portion of the Leased  Premises that comprise Phase 1 of the
Village  Core and the  applicable  portions of Phase 2 of the Village  Core (as
such terms are defined in the Operating Agreement), as such portions of Phase 2
are developed in  accordance  with the  provisions of the Operating  Agreement,
provided  that  such  portions  of  the  Leased  Premises  constitute  distinct
subdivided lots that,  upon such release,  contain no portion of the balance of
the Leased Premises.

               (b) Within  thirty  (30) days after  Lessor  legally  subdivides
portions of AEG Parcel 16 for development  thereof,  Lessee shall surrender and
terminate  portions of this Lease  applicable  to any such  legally  subdivided
parcels  provided  that such  parcels to be  released  do not  contain  parking
facilities  or contain means of ingress and egress to the balance of AEG Parcel
16 not to be released  and  provided  further that Section 9.1 of the East West
Contract (as assigned to Northstar) has been fully complied with,  with respect
to such parcels to be released.

          27. Short Form.  Concurrently  with the execution of this Lease,  the
parties hereto shall execute a short form or memorandum of lease for recording;
or either party may record this Lease.  Any recording,  transfer,  documentary,
stamp or other tax imposed upon the execution or recording of the short form or
this Lease shall be borne one-half by Lessor and one-half by Lessee.

          28. Curing  Lessor's  Defaults.  If Lessor shall be in default in the
performance of any of its obligations  hereunder,  Lessee may (but shall not be
obligated to do so) following the failure of Lessor to cure such default within
fifteen  (15) days,  cure such  default and Lessor will  reimburse  Lessee upon
demand for any sums paid or costs  incurred  by Lessee  with  interest  at four
percent (4%) above the Prime Rate.
<PAGE>

          29. Binding Effect. All terms,  covenants,  conditions and agreements
contained in this Lease shall extend to and be binding upon the parties  hereto
and their respective heirs, executors, administrators,  successors and assigns.
Neither  Lessee nor any  partners  or  shareholders  of Lessee,  shall have any
personal  liability with respect to this Lease or the Leased  Premises,  and if
Lessee is in  breach  or  default  with  respect  to  Lessee's  obligations  or
otherwise under this Lease, Lessor shall look solely to the Leased Premises and
the rents,  issues and profits to be received  therefrom,  and the building and
other Improvements and personal property located thereon.

          30.  Definition  of  "Lessor".  The word  "Lessor"  is used herein to
include the Lessor named above as well as its successors  and assigns,  and any
other subsequent owner of the Leased Premises,  as well as the heirs,  personal
representatives or successors and assigns of any such subsequent owner, each of
whom shall have the same rights, remedies,  powers,  authorities and privileges
as he would have had had he  originally  signed  this Lease as Lessor,  but any
such person,  whether or not named  herein,  shall have no liability  hereunder
after he ceases to hold title to the Leased  Premises,  except for  obligations
which may have  theretofore  accrued.  Notwithstanding  anything  herein to the
contrary,  in the event any monetary judgment or lien shall be obtained against
Lessor by reason of a default  under this Lease,  such  judgment or lien may be
enforced only against Lessor's interest in the Leased Premises.

          31.  Definition  of  "Lessee".  The word  "Lessee"  is used herein to
include the Lessee named above as well as its successors  and assigns,  each of
which shall be under the same  obligations,  liabilities and  disabilities  and
have only such rights,  privileges and powers as it would have possessed had it
originally signed this Lease as Lessee.  Notwithstanding anything herein to the
contrary,  in the event any monetary judgment or lien shall be obtained against
Lessee by reason of default  under this  Lease,  such  judgment  or lien may be
enforced  only  against  Lessee's  interest  in the Leased  Premises.  Any such
judgment  or lien shall not be subject  to  execution  on, or be a lien on, any
assets of Lessee  except to the extent of its interest in the Leased  Premises.
Lessee's  liability  under the terms,  covenants,  conditions,  warranties  and
obligations of this Lease shall not exceed the loss of Lessee's interest in the
Leased Premises.

          32. Partial  Invalidity.  If any term,  covenant or condition of this
Lease shall be invalid or unenforceable,  the remainder of this Lease shall not
be affected thereby,  and each term, covenant and condition of this Lease shall
be valid and shall be enforced to the extent permitted by law.

          33.  Captions.  It is agreed that the  captions of this Lease are for
convenience  only and are not a part of this  Lease and do not in any way limit
or amplify the terms and provisions of this Lease.

          34.  Governing  Law. This lease shall be governed by and construed in
accordance with the laws of the State of California, regardless of the law that
might  otherwise  govern  under  applicable  principles  of  conflicts  of laws
thereof.
<PAGE>

          35.  Entire  Agreement.  This Lease  contains  the  entire  agreement
between  Lessor  and  Lessee,  and  there  are  no  other  terms,  obligations,
covenants, representations, statements or conditions, oral or otherwise, of any
kind whatsoever  concerning this Lease.  Any changes or additions to this Lease
must be made in writing and executed by the parties hereto.
<PAGE>

            IN WITNESS WHEREOF,  the parties have executed this Lease as of the
date first above written.

                                    LESSOR:

                                    TRIMONT LAND HOLDINGS, INC.

                                    By:  /s/ Elizabeth J. Cole
                                       ----------------------------------------
                                          Elizabeth J. Cole
                                          Executive Vice President

                                    LESSEE:

                                    TRIMONT LAND COMPANY

                                    By:  /s/ Elizabeth J. Cole
                                       ----------------------------------------
                                          Elizabeth J. Cole
                                          Executive Vice President

<PAGE>

                                   EXHIBIT A

<PAGE>
                                   EXHIBIT B

<PAGE>

                                   EXHIBIT I

                               Easement Agreement

                               ------------------
<PAGE>

                              EASEMENT AGREEMENT

                                    between

                          TRIMONT LAND HOLDINGS, INC.,
                                  as Grantor,

                                      and

                             TRIMONT LAND COMPANY,
                                   as Grantee

                         Dated as of September 22, 2000

<PAGE>

          EASEMENT AGREEMENT made as of the 22nd day of September, 2000 (as the
same may be amended or otherwise modified from time to time, the "Agreement"),
between TRIMONT LAND HOLDINGS, INC., a Delaware corporation, having an address
at c/o Booth Creek Ski Holdings, Inc., 1000 S. Frontage Road West, Suite 100,
Vail, Colorado 81657 (hereinafter referred to as "Grantor"), and TRIMONT LAND
COMPANY, a California corporation, having an address at c/o Booth Creek Ski
Holdings, Inc., 1000 S. Frontage Road West, Suite 100, Vail, Colorado 81657
(hereinafter referred to as "Grantee").
          For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Grantee and Grantor agree as follows with respect
to the Grantor Property (more particularly described in Exhibit A) and the
Grantee Property (more particularly described in Exhibit B):

     1. Definitions. The following capitalized terms shall have the following
meanings whenever used herein.

     (a) "Construction Development Agreement" means that certain Declaration of
Construction Covenants, Conditions and Restrictions of even date herewith made
by Trimont Land Holdings, Inc., as the same may be amended or otherwise
modified from time to time.

     (b) "Development" means the construction of approximately 1,800
multifamily units, to be constructed on the Grantor Development Property, as
more particularly described in the Master Development Plan.

     (c) "Development Activity" shall mean the undertaking by Grantor or its
nominee or designee, upon or in respect of the whole or any portion of the
<PAGE>

Grantor Development Property, of any construction activities in accordance with
the Master Development Plan, the Operating Agreement, if then in effect, and
the Construction Development Agreement.

     (d) "East West Purchase Agreement" means that certain Agreement for
Purchase and Sale of Real Property of even date herewith between Grantor, as
Seller, and East West Partners, Inc., as Buyer, as assigned to and assumed by
Northstar Mountain Properties, LLC and as the same may be amended or otherwise
modified from time to time.

     (e) "Essential Ski Property" shall have the meaning assigned to such term
in the Operating Agreement.

     (f) "Grantee Easements" means the easements granted in Paragraph 4 hereof.

     (g) "Grantee Lease" shall mean that certain Lease Agreement of even date
herewith between Grantor, as lessor, and Grantee, as lessee, as the same may be
amended or otherwise modified from time to time.

     (h) "Grantee Property" means the land consisting of approximately 8,500
acres of land, together with the improvements now or at any time located
thereon and water rights appurtenant thereto, owned by Grantee, as more
particularly described in Exhibit B hereto. The Grantee Property shall include
any property now or hereafter acquired by Grantee or its affiliates and which
Grantee from time to time determines should have the benefit of this Agreement
(i.e., as if such property was originally part of the Grantee Property). From
time to time Grantee (and Grantee's affiliates, if appropriate) may record one
or more declarations modifying the definition of Grantee Property, and, if
requested, Grantor agrees to join in such declarations, although such joinder
shall not be necessary to make such declaration effective. Grantor hereby
<PAGE>

consents to the recording of any such declaration against the Grantor Property.
No such declaration shall adversely affect the priority of this Agreement.

     (i) "Grantor Development Property" shall mean those portions of the
Grantor Property more particularly described on Exhibit C hereto and on which
Grantor is allowed to develop pursuant to the Master Development Plan.

     (j) "Grantor Property" means the land of Grantor located within a ski and
resort area development known as Northstar-at-Tahoe, together with, to the
extent of Grantor's right, title and interest therein, the improvements thereon
and the Water Rights, as more particularly described in Exhibit B hereto. Any
Grantor Property which is released from this Agreement shall cease to be
Grantor Property.

     (k) "Improvements" shall mean all improvements and fixtures now or
hereafter located on the Grantor Property.

     (l) "Leasehold Estate" shall mean, at any time, the leasehold estate of
the tenant under the Grantee Lease.

     (m) "Master Development Plan" shall have the meaning assigned to such term
in the Operating Agreement.

     (n) "Operating Agreement" means that certain Operating Agreement of
Northstar Mountain Properties, LLC, a Delaware limited liability company, of
even date herewith between Grantor and East West Resort Development V, L.P.,
L.L.L.P., a Delaware limited liability limited partnership, as the same may be
amended or otherwise modified from time to time.
<PAGE>

     (o) "Person" shall mean and include an individual, a partnership, a
limited liability company, a corporation, a trust, an unincorporated
association, a joint venture or any other entity or a government or any agency
or political subdivision thereof.

     (p) "Prime Rate" shall mean the "Prime Rate" reported by The Wall Street
Journal (Eastern Edition) from time to time; provided, however, if at any time
more than one Prime Rate is reported by The Wall Street Journal, the Prime Rate
shall mean the rate which Citibank, N.A. (or its successor) announces from time
to time as its prime lending rate, in effect from time to time. The Prime Rate
(as defined herein) shall change as of the date of each change in such
announced Prime Rate. If The Wall Street Journal no long publishes a "Prime
Rate", the Prime Rate shall mean the rate which Citibank, N.A. (or its
successor) announces from time to time as its prime lending rate, in effect
from time to time.

     (q) "Resort" means the ski and resort area known as "Northstar-at-Tahoe"
located on the Grantee Property and the Grantor Property.

     (r) "Resort Activities" shall mean any recreational activities at any time
engaged in by patrons of the Resort. Resort Activities may include skiing (of
any type), mountain biking, hiking, tubing, snowmobiling, dog sledding, snowcat
tours, horseback riding, and other similar activities from time to time
available at similarly situated resorts.

     (s) "Trimont Purchase Agreement" means that certain Agreement for Purchase
and Sale of Real Property of even date herewith between Trimont Land Company,
as Seller, and Trimont Land Holdings, Inc., as Buyer, as the same may be
amended or otherwise modified from time to time.
<PAGE>

     (t) "Water Rights" shall mean any and all water and water rights, ditches
and ditch rights, reservoir and reservoir rights, wells and well rights,
springs and spring rights, in each case whether surface or subsurface,
tributary or non-tributary, adjudicated or unadjudicated, used on or in
connection with or appurtenant to the Grantor Property.

     2. Index of Definitions; Exhibits.

     (a) The following is a listing of defined terms used in this Agreement but
not defined in Paragraph 1, together with an index of where such terms are
defined.

            Agreement................................Recital

            Grantee..................................Recital

            Grantor..................................Recital

            Non-performing Owner..................Section 17

            Ski Lift Land.......................Section 4(b)

            Ski Lifts...........................Section 4(b)

            Ski Trails..........................Section 4(a)

     (b)The following is a listing of the Exhibits to this Agreement:

            Grantee Property                          Exhibit B

            Grantor Property                          Exhibit A

            Grantor Development Property              Exhibit C

     3. Title to Improvements. As more particularly described in the Trimont
Purchase Agreement, fee title to the Improvements (including parking, but
excluding other roadways) and Water Rights now on or appurtenant to the Grantor
Property have been retained by Grantee, and any improvements (including the
<PAGE>

Improvements) now or hereafter made to the Grantor Property by Grantee shall be
the sole property of Grantee. Nothing herein shall be construed as a conveyance
by Grantee to Grantor of any interest in any improvements (including the
Improvements) now or hereafter owned by Grantee and/or of any of the Water
Rights, and Grantee and Grantor agree that all incidents of ownership of the
Improvements and of the Water Rights shall be and remain vested in Grantee.

     4. Grant of Easements by Grantor. Subject to Paragraph 5, Grantor hereby
grants to Grantee, in perpetuity and for the benefit of and as an easement
appurtenant to each of (i) the Grantee Property, (ii) the improvements
(including the Improvements) of Grantee now or hereafter located on the Grantor
Property and (iii) the Leasehold Estate, the following nonrevocable easements
on, over, under and through (at any time, twenty-four hours a day, seven days a
week) the Grantor Property:

     (a) An exclusive easement, together with all incidents of ownership
thereto, (i) for the use and occupancy for any lawful purpose and for the
relocation and reconfiguration of the ski lifts, ski trails and ski runs
located on the Grantor Property, whether now or hereafter in existence
(collectively, the "Ski Trails"), and (ii) for the use and occupancy for
parking purposes, of all parking now or hereafter located on the Grantor
Property, together with, in each case, a non-exclusive easement for ingress and
egress on, over, under and through the balance of the Grantor Property for the
use, operation and maintenance, of the Ski Trails and such parking. The
location of existing and proposed additional Ski Trails and parking are shown
on the Master Development Plan. Without limiting the foregoing, the easements
provided for in this Paragraph shall allow Grantee to install, use and maintain
such snow making equipment as Grantee shall reasonably require to support the
Ski Trails. Grantor acknowledges and agrees that notwithstanding the location
<PAGE>

and configuration of the existing and proposed Ski Trails shown on the Master
Development Plan, Grantee shall have the unrestricted right to raze, relocate
and reconfigure the Ski Trails, construct additional ski lifts, ski trails and
ski runs and make alterations thereto in any manner which Grantee shall
determine in its sole discretion to be appropriate, and the easement herein
granted shall presently extend to any Ski Trails existing at any time on the
Grantor Property; provided, however, that, with respect to the Grantor
Development Property, in taking any of the actions permitted by this sentence,
Grantee may take only such actions as are consistent with the Master
Development Plan.

     (b) (i) An exclusive easement, together with all incidents of ownership
thereto, for the use and occupancy of those portions of the Grantor Property
(the "Ski Lift Land") upon which (at any time) are situated all ski lifts,
gondolas, including footings and transfer stations, pedestrian and vehicle
roadways, and all other methods of transporting skiers and other Resort users
to and from the Ski Trails, whether now or hereafter in existence
(collectively, the "Ski Lifts"), including the right to load and unload users
of the Ski Lifts, together with (ii) a non-exclusive easement for ingress and
egress on, over, under and through the Grantor Property for the installation,
construction, use, operation, maintenance, repair, replacement, relocation,
removal and reconfiguration of the Ski Lifts. Without limiting the foregoing,
the location of the existing and proposed additional Ski Lifts is shown on the
Master Development Plan. Grantor acknowledges and agrees that notwithstanding
the location and configuration of the existing and proposed Ski Lifts shown on
the Master Development Plan, Grantee shall have the unrestricted right to raze,
relocate and reconfigure the Ski Lifts, construct additional Ski Lifts and make
alterations in any manner which Grantee shall determine in its sole discretion
to be appropriate, and the easement herein granted shall presently extend to
any land upon which Ski Lifts exist at any time on the Grantor Property as if
such land were originally included in the Ski Lift Land; provided, however,
<PAGE>

that, with respect to the Grantor Development Property, in taking any of the
actions permitted by this sentence, Grantee may take only such actions as are
consistent with the Master Development Plan.

     (c) A non-exclusive easement to enter on the Grantor Property for the
purpose of access to and performance of all Resort Activities on the Grantor
Property, together with an easement of ingress and egress on, over, under and
through the Grantor Property for the installation, use, operation, maintenance,
repair, replacement, relocation and removal of all equipment and facilities
related thereto, including, without limitation, activities related to operation
of Grantee's snowmaking systems.

     (d) To the extent reasonably necessary to allow Grantee to realize upon
its ownership interest in the Water Rights as described in the Trimont Purchase
Agreement, a non-exclusive easement on, over, under and through the Grantor
Property for the purpose of access to and performance of all activities related
to the Water Rights, logging and timber cutting, collection of minerals and
surface run off water on the Grantor Property, and a non-exclusive easement of
ingress and egress on, over, under and through the Grantor Property for the
installation, use, operation, maintenance, repair, replacement, relocation and
removal of all equipment, facilities, ditches, reservoirs, wells and springs
related thereto, whether surface or subsurface, tributary or non-tributary,
adjudicated or unadjudicated, reasonably related to Grantee realizing upon such
ownership interests.

     (e) A non-exclusive easement to enter onto the Grantor Property for the
purpose of access to and utilization of Grantor's utility cuts and roadways for
placement by Grantee of utility lines therein, together with an additional
<PAGE>

non-exclusive easement on, over, under and through the Grantor Property for the
installation, use, operation, maintenance, repair, replacement and removal of
any of the following in, on, over and through Grantor's utility cuts and
roadways on the Grantor Property to service the Grantee Property: storm
drainage facilities and sanitary sewer systems, water systems, gas systems,
electric power, cables and systems, telephone cables and systems, cable
television systems, signal systems and all other utility systems and facilities
now or at any time hereafter reasonably necessary (in Grantee's reasonable
opinion) for the use or service of any Resort facility and any improvement of
Grantee (and its affiliates) now or at any time hereafter situated on the
Grantee Property or the Grantor Property. Grantor and Grantee shall make
reasonable efforts to prevent undue interference with the other's utility
systems.

     (f) A non-exclusive easement to enter onto the Grantor Property for the
purpose of access to and installation, maintenance, repair and replacement of
lights and light poles now or at any time hereafter located on the Grantor
Property for the purpose of illuminating the Resort facilities, including,
without limitation, lights designed for night skiing, and such electrical
conduit, wiring and connections as are necessary (in Grantee's reasonable
discretion) to permit the operation of such lights.

     (g) A non-exclusive easement to enter onto the Grantor Property for the
purpose of access to and use of all roadways, walkways and other access routes
now or hereafter located on the Grantor Property for ingress and egress and
travel on, through and across the Grantor Property for the purpose of providing
access to the Resort and/or Grantee Property or to facilitate any of the
purposes of the easements created by this Agreement.
<PAGE>

     (h) A non-exclusive easement to enter onto the Grantor Property for the
purpose of complying with any laws, rules and/or regulations now or hereafter
applicable, including, without limitation, conducting those activities
necessary to satisfy any compliance requirements under permits now or hereafter
issued to Grantee in connection with the operation of the Resort.

     (i) A non-exclusive easement to enter onto the Grantor Property for the
purpose of maintaining, repairing or reconstructing any of the facilities of
Grantee located on or in such proximity to the Grantor Property that it is
desirable, in Grantee's sole discretion, to so maintain, repair or reconstruct
such facilities from the adjacent portions of the Grantor Property.

     5. Limitation on Grantee Easements. Notwithstanding anything in Paragraph
4 to the contrary, any right of Grantee to relocate, reconfigure or create new
Ski Trails or Ski Lifts or make other improvements to the Grantor Development
Property shall be subject to the limitations of applicable law and the
requirement that any such improvements be consistent with the Master
Development Plan.

     6. Charges; Perpetual and Temporary Easements. Grantee shall not be
charged for any use of the Grantee Easements. Pursuant to the Trimont Purchase
Agreement, Grantor has the obligation to subdivide the Grantor Property and
reconvey the Essential Ski Property to Grantee. Upon such reconveyance, any
easement or portion thereof granted pursuant to this Agreement which is located
on the Essential Ski Property or any portion thereof which is reconveyed to
Grantee shall automatically terminate as of the date of such reconveyance. All
other easements granted pursuant to this Agreement shall be perpetual.

     7. Grantee Easements Affecting Grantor Development Property and Releases
Thereof; Delineation of Certain Grantee Easements. (a) The Grantee Easements
<PAGE>

affect, among other property, the Grantor Development Property. Grantee will
release the whole or any portion, as applicable, of the Grantor Development
Property from this Agreement if:

            (i)   there is no material default, no material event of default
                  and no "Event of Default" (as such term may be defined
                  under any deed of trust then encumbering the property to be
                  released) then continuing under any deed of trust then
                  encumbering the property to be released;

            (ii)  the obligor in respect of the "Buyer's" obligations under
                  Sections 9.2 and 10.13(f) of the Trimont Purchase Agreement
                  and under Sections 9.3 and 10.19 of the East West Purchase
                  Agreement is not in material default in the performance of
                  the obligations of the "Buyer" described in any of such
                  Sections;

            (iii) the portion of the Grantor Development Property to be
                  released is properly subdivided and contains no Excess
                  Property (as such term is defined in the East West Purchase
                  Agreement) or this Agreement has been modified (in which
                  case there shall be no release of the easements applicable
                  to the Excess Property), if necessary, to the reasonable
                  satisfaction of Grantee, to provide Grantee with such
                  incidents of ownership in and to such Excess Property as
                  Grantee may reasonably request; and, if the area to be
                  released is not a separate tax lot, Grantor and Grantee
                  shall have entered into a tax sharing agreement which shall
                  provide for an equitable allocation of real estate tax
                  costs based on the relative value of the interests owned by
                  Grantor and Grantee and which is, in any event, reasonably
                  acceptable to Grantor and Grantee; and

<PAGE>

            (iv)  the portion of the Grantor Development Property to be
                  released is, concurrently with such release, being
                  subjected to one or more construction loan deeds of trust
                  permitted by the Operating Agreement.

     (b) Whenever Grantor seeks a release pursuant to this Paragraph, it shall
submit a survey (which shall be currently dated if the area to be released has
been reconfigured since the date hereof) with a metes and bounds description of
the area which is the subject of the proposed release and a proposed site plan
for such area. Such survey and site plan must be approved by Grantee (such
approval not to be unreasonably withheld) prior to such release, but Grantee's
approval of the site plan and survey pursuant to this Agreement shall be
limited to verifying (i) that the matters shown on the proposed site plan and
survey are (A) consistent with the Master Development Plan or, if then in
effect, the Operating Agreement and (B) if not set forth on the Master
Development Plan or provided for in the Operating Agreement, not materially
adverse to Grantee and (ii) that the area to be released does not include any
Essential Ski Property. If Grantor and Grantee cannot agree upon the scope of
any such release of Grantee Easements, such matter shall be settled by
arbitration pursuant to Paragraph 18 of this Agreement. Whenever Grantor seeks
a release pursuant to this Paragraph, Grantor shall give Grantee at least
fourteen (14) days prior written notice of the requested release and such
request must be accompanied by documentation supporting the requested release.

     (c) If, in connection with Grantor's development of any Grantor
Development Parcel, Grantor requests that the Grantee Easements affecting such
Grantor Development Parcel be restated based on metes and bounds descriptions,
Grantee agrees that it will reasonably cooperate in implementing such
restatement.
<PAGE>

     8. Exclusive Possession. With respect to the exclusive Grantee Easements
provided for in Paragraphs 4(a) and 4(b)(i), Grantor shall not grant any other
Person any access, possessory or other rights to the property affected by such
exclusive easement and Grantee shall be free to exclude all Persons from such
areas.

     9. Development Restrictions. Grantor shall not make any improvements to
the Grantor Property or allow any third persons to use the same, except that
Grantor may make such lawful improvements to the Grantor Development Property
contemplated by the Master Development Plan and fully and freely utilize the
Grantor Development Property as contemplated by the Master Development Plan as
it elects so long as such improvements and utilization do not unreasonably
interfere with Grantee's use and enjoyment of the Grantee Easements.

     10. Maintenance. Grantor shall, at its sole cost and expense, clean,
maintain, repair and provide adequate security for paved and unpaved roads now
or hereafter located on the Grantor Property.

     11. Grantor and Grantee Responsibility. Grantee agrees that it will use
reasonable care in the exercise of the rights granted to it under this
Agreement. Grantor and Grantee agree that they will take reasonable measures to
coordinate construction and other activities on the Grantor Development
Property with Grantee's exercise of its rights under this Agreement. Grantor
will not damage or injure the improvements, structures, equipment and Resort
facilities of Grantee.

     12. Demolition, Fire and Other Casualty. If all or part of improvements of
Grantee located on the Grantor Property shall be damaged or destroyed by fire
<PAGE>

or other casualty, then, Grantor shall give prompt written notice thereof to
Grantee. At Grantee's option and upon notice to Grantor, Grantee may elect to
replace, repair and restore any of such improvements, and the Grantee Easements
shall include such easements on, over, under and through the Grantor Property
as Grantee may reasonably require to replace, repair and restore such
improvements.

     13. Grantor's Insurance; Waiver of Subrogation.

     (a) With respect to the Grantor Property, Grantor shall maintain insurance
complying with the following:

            (i) All insurance policies must be underwritten by insurers with a
Best's rating of A+ or better;

            (ii) Grantor shall maintain a Commercial General Liability
insurance policy, including broad form coverages or their equivalents, with ten
million dollars ($10,000,000) combined single limit coverage for bodily injury
and property damage;

            (iii) Grantor shall maintain all risk coverage (including
earthquake insurance) in the amount of the full replacement cost of the
improvements (to the extent owned by Grantor);

            (iv) Such policies shall contain a waiver of co-insurance
endorsement or agreed value endorsement (relative to casualty);

            (v) Such policies shall contain a standard mortgage clause (438BFU
      or CP12-18) with Grantee's mortgagee named as loss payee in the
      declarations with respect to Grantee's interests under this Agreement;
      and
<PAGE>

            (vi)  With respect to Grantor's improvements,  such policies shall
      (for the benefit of Grantee) contain a waiver of subrogation clause.

     (b) To the extent of its interest in the policies maintained by Grantor
pursuant hereto, all insurance policies shall name Grantee (and its mortgagee)
as additional insured and loss payee (as its interest may appear), and such
policies shall provide that they cannot be terminated as to Grantee except upon
thirty (30) days prior written notice. Grantor shall deliver to Grantee
certificates of insurance, together with receipts reasonably satisfactory to
Grantee, evidencing payment of the premiums therefor for a period of not less
than one year. Should Grantor fail to insure or fail to pay the premiums on any
required insurance or fail to deliver the renewals of them at least thirty (30)
days prior to the scheduled expiration of the same, Grantee may (but is not
obligated to) have the insurance issued or renewed (and pay the premiums on it
for the account of Grantor) in amounts and with companies and at premiums as
Grantee deems appropriate. If Grantee elects to have insurance issued or
renewed to insure Grantee's interest, Grantee shall have no obligation to also
insure Grantor's interest or to notify Grantor of Grantee's actions. All sums
advanced by Grantee to pay premiums on insurance policies which Grantor is
required to maintain hereunder shall be due and payable by Grantor to Grantee
upon demand and, failing prompt reimbursement, shall earn interest at the Prime
Rate plus four (4%) percent per annum until paid in full.

     (c) Grantee shall not, by reason of accepting, rejecting, approving or
obtaining insurance, incur any liability for (i) the existence, nonexistence,
form or legal sufficiency thereof, (ii) the solvency or insolvency of any
insurer, or (iii) the payment of losses.

     14. Grantee's Insurance; Waiver of Subrogation.
<PAGE>

     (a) With respect to the Grantor Property and the property of Grantee now
or hereafter located thereon, Grantee shall maintain insurance complying with
the following:

            (i) All insurance policies must be underwritten by insurers with a
Best's rating of A+ or better;

            (ii) Grantee shall maintain a Commercial General Liability
insurance policy, including broad form coverages or their equivalents, with ten
million dollars ($10,000,000) combined single limit coverage for bodily injury
and property damage;

            (iii) Grantee shall maintain all risk coverage (including
earthquake insurance) in the amount of the full replacement cost of the
improvements (to the extent owned by Grantee);

            (iv) Such policies shall contain a waiver of co-insurance
endorsement or agreed value endorsement (relative to casualty); and

            (v) With respect to Grantee's improvements, such policies shall
(for the benefit of Grantor) contain a waiver of subrogation clause.

     (b) The liability policies maintained by Grantee pursuant hereto shall
name Grantor (and its lender) as an additional insured and such policies shall
provide that they cannot be terminated as to Grantor except upon thirty (30)
days prior written notice. Grantee shall deliver to Grantor certificates of
insurance, together with receipts reasonably satisfactory to Grantor,
evidencing payment of the premiums therefor for a period of not less than one
year. Should Grantee fail to maintain such liability insurance or fail to pay
the premiums thereon or fail to deliver the renewals of them at least thirty
<PAGE>

(30) days prior to the scheduled expiration of the same, Grantor may (but is
not obligated) to have the liability insurance issued or renewed (and pay the
premiums on it for the account of Grantee) in amounts and with companies and at
premiums as Grantor deems appropriate. If Grantor elects to have liability
insurance or renewed to insure Grantor's interest, Grantor shall have no
obligation to also insure Grantee's interest or to notify Grantee of Grantor's
actions. All sums advanced by Grantor to pay premiums on liability insurance
policies which Grantee is required to maintain hereunder shall be due and
payable by Grantee to Grantor upon demand and, failing prompt reimbursement,
shall earn interest at the Prime Rate plus four (4%) percent per annum until
paid in full.

     (c) Grantor shall not, by reason of accepting, rejecting, approving or
obtaining insurance, incur any liability for (i) the existence, nonexistence,
form or legal sufficiency thereof, (ii) the solvency or insolvency of any
insurer, or (iii) the payment of losses.

     15. Condemnation Proceeds. In the event of any condemnation of the Grantor
Development Property or any interest therein, each party shall be free to seek
an award to the extent of its interest in the property so taken

     16. Estoppel Certificates. Each party shall at any time and from time to
time during the term of this Agreement, within fifteen (15) days after written
request by the other party hereto, execute, acknowledge and deliver to such
other party or to any prospective purchaser, mortgagee or other person
reasonably requested by such other party, a certificate stating: (a) that this
Agreement is unmodified and in force and effect (or if there have been
modifications, that this Agreement is in force and effect as modified, and
identifying the modification agreements); (b) whether or not there is any
existing default by either party hereto with respect to which a notice of
<PAGE>

default has been served or which is (to the best of its knowledge) known by the
party executing such certificate, and, if there is any such default, specifying
the nature and extent thereof; (c) whether or not there are, to the best of the
knowledge of the party delivering the certificate, any setoffs, defenses or
counterclaims against enforcement of the obligations to be performed hereunder
existing in favor of the party executing such certificate; and (d) providing
such other information with regard to this Agreement or the respective rights
and obligations of the parties hereto as shall be reasonably requested by the
party requesting such certificate.

     17. Force Majeure. Either party hereto (hereafter in this Paragraph
referred to as the "Non-performing Owner") shall not be deemed to be in default
in the performance of any obligation on the Non-performing Owner's part to be
performed under this Agreement, other than an obligation requiring the payment
of a sum of money, if and so long as and only to the extent non-performance of
such obligation shall be directly caused by fire or other unavoidable casualty,
national emergency, laws, governmental or municipal restrictions, enemy action,
civil commotion, strikes, lockouts, inability to obtain labor or materials, war
or national defense pre-emptions, acts of God or other similar causes beyond
the Non-performing Owner's control; provided, however, that within fifteen (15)
days after the giving of any written notice by the other party upon the
Non-performing Owner referring to non-performance by the Non-performing Owner
of any such obligation, the Non-performing Owner shall notify the other party
in writing of the existence and nature of any such cause for non-performance
which is beyond the Non-performing Owner's control, and the steps, if any,
which the Non-performing Owner shall have taken to eliminate such cause for
<PAGE>

non-performance. Thereafter, the Non-performing Owner shall from time to time
on written request of the other party keep the other party fully informed, in
writing, of all further developments concerning such cause for non-performance,
and the efforts, if any, being made by the Non-performing Owner to end such
cause for non-performance. A non-performing Owner shall use reasonable efforts
to prevent its non-performance by reason of events of force majeure. If a party
hereto, by reason of the events described in this paragraph, anticipates or
foresees that it is to become a Non-performing Owner, it shall promptly notify
the other party thereof.

     18. Arbitration. Disputes under this Agreement shall be arbitrated in
accordance with the procedures of the Construction Development Agreement.

     19. Provisions Run with the Land. This Agreement shall run with the real
property benefited and burdened hereby, and shall bind and inure to the benefit
of the parties hereto, and their respective successors and assigns in title.
Any easement or right of entry granted hereunder shall be for the benefit not
only of Grantee but also for the benefit of any tenants, licensees, invitees,
occupants, employees, agents and contractors of Grantee whom Grantee shall
permit to use such easement or right of entry.

     20. Notices. (a) Any notice required or permitted to be given under this
Agreement shall be in writing and (i) personally delivered, (ii) sent by United
States mail, registered or certified mail, postage prepaid, return receipt
requested, (iii) sent by Federal Express or similar nationally recognized
overnight courier service, or (iv) transmitted by facsimile, and in all cases
addressed as follows, and such notice shall be deemed to have been given upon
the date of actual receipt or delivery (or refusal to accept delivery) at the
address specified below (or such other addresses as may be specified by notice
in the foregoing manner) as indicated on the return receipt or air bill or, in
the case of facsimile transmission upon confirmation of transmission as
indicated by the sender's facsimile machine:

            To Grantee:    c/o Booth Creek Ski Holdings, Inc.
                           1000 S. Frontage Road West
                           Suite 100
<PAGE>

                           Vail, Colorado  81657
                           Attention:     Christopher P. Ryman
                                          and
                                          Elizabeth J. Cole
                           Telephone:     (970) 476-3190
                           Facsimile:     (970) 479-0291

            To Grantor:    c/o Booth Creek Ski Holdings, Inc.
                           1000 S. Frontage Road West
                           Suite 100
                           Vail, Colorado  81657
                           Attention:     Christopher P. Ryman
                                          and
                                          Elizabeth J. Cole
                           Telephone:     (970) 476-3190
                           Facsimile:     (970) 479-0291

     (b) Either party hereto may, by a notice given in the manner required by
Paragraph 19(a), from time to time notify the other of the name and address of
its lender and request that copies of notices to such party be sent to its
lender. Thereafter, when notice is sent to a party hereto, copies shall be sent
to those lenders to such party who have been designated in a notice referred to
in the preceding sentence.

     21. Self-Help. If at any time Grantee or Grantor shall fail or neglect to
carry out with reasonable diligence any obligations required of it under this
Agreement, then either party may give the other written notice of such failure
or neglect and if such failure or neglect continues for twenty (20) days after
such notice (or if such default cannot with reasonable due diligence be
remedied within such twenty (20) days, then if the defaulting party does not
promptly commence to cure such default and at all times thereafter proceed
diligently and continuously to cure such default), then either party, in
addition to any other remedy it may have in equity or at law, may enter the
Grantor Property or the Grantee Property, as the case may be, provide labor
and/or materials, cause the performance of any contract and/or do such other
acts or things as the appropriate party may reasonably deem advisable to
perform such obligation. All costs and expenses incurred by either party in
<PAGE>

carrying out such performance shall be borne by the other party and shall be
payable by the other party not later than fifteen (15) days after written
demand therefor, which demand (i) shall contain a reasonable itemization of
such costs and expenses and reasonable evidence thereof and (ii) may be made by
either party from time to time as such costs and expenses are incurred, and
shall be in addition to any and all damages to which either party may otherwise
be entitled.

     22. Real Estate Taxes. Except to the extent of the obligation of Grantee
to pay real estate taxes with respect to portions of the Grantor Property as
provided in the Grantee Lease and except to the extent Grantor, without
subjecting the Grantor Property or any part thereof to forfeiture, is
diligently and continuously contesting such taxes in good faith, Grantor shall
pay, on or before the due date thereof, all real estate taxes and assessments
due and payable in respect of the Grantor Property, including the areas subject
to the Grantee Easements. In the event that Grantor shall be delinquent in the
payment of such taxes and/or assessments, Grantee shall have the right, upon
and after the expiration of fifteen (15) days prior notice to Grantor, to cure
any default of Grantor with respect to its obligations to pay real estate taxes
and assessments and any penalties and interest thereon; and in the event of any
such payment(s) by Grantee, then Grantee shall have the right of reimbursement
upon demand, with interest at the Prime Rate plus four percent (4%) per annum
from the applicable payment dates, from Grantor, and, without limitation,
Grantee shall have the right to offset the same against any and all amount of
any nature which may be due from Grantee to Grantor (whether arising under this
Agreement or otherwise), and Grantee shall have a lien upon the Grantor
Property in the amount so paid by Grantee, with such interest at the Prime Rate
plus four percent (4%) per annum and Grantee's reasonable attorneys' fees, for
<PAGE>

all amounts not promptly reimbursed or offset. Grantor shall provide to Grantee
promptly upon receipt thereof from the taxing authority, copies of any notice
of default in payment of any tax or assessment with respect to the Grantor
Property. The lien allowed to Grantee under this Paragraph shall have priority
over all liens (other than a lien in favor of a governmental authority entitled
to priority) then or thereafter placed upon the Grantor Property, including,
without limitation, any lien of a deed of trust.

     23. No Oral Changes. This Agreement may not be changed, modified or
terminated orally, but only by an agreement in writing signed by the parties
hereto.

     24. Titles of No Effect. The titles set forth in this Agreement are
intended for ease of reference only and shall have no force or effect in the
interpretation of this Agreement.

     25. Dedications. Grantor shall not hereafter dedicate any part of the
Grantee Easements for public purposes without the prior written consent of
Grantee, which consent Grantee may grant or withhold in its sole and absolute
discretion.

     26. Agreement for Exclusive Benefit of the Parties. Except as provided in
the definition of Grantee Property, neither party hereto intends to confer any
benefit upon or to receive any benefits for or on behalf of the general public
or any person or entity other than Grantee or Grantor and their respective
successors, assigns, nominees and designees, and the provisions of this
Agreement are for the exclusive benefit of the parties hereto, and not for the
benefit of any third Person, and no provisions of this Agreement are intended
to create or constitute any Person a third party beneficiary hereof. Except as
provided in the definition of Grantee Property, this Agreement shall not be
deemed to have conferred any rights upon any third Person, and no Person other
than a party hereto and their respective successors and assigns shall be
<PAGE>

entitled to make any claim against a party hereto or its property under or by
virtue of this Agreement or any provisions hereof.

     27. Governing Law. The Agreement, which sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof,
shall be governed by, and construed in accordance with, the laws of the State
of California, regardless of the law that might otherwise govern under
applicable principles of conflict of laws thereof.

     28. Miscellaneous. No abandonment of an easement granted herein by a party
hereto shall terminate any other easement granted hereunder. No default under
this Agreement shall entitle any party to cancel or otherwise rescind this
Agreement or any easement granted hereunder; provided, however, that this
limitation shall not affect any other rights or remedies that any party may
have by reason of such default. With respect to any action, suit or proceeding
arising under this Agreement, the parties waive trial by jury and the party
substantially prevailing in any such action, suit or proceeding (including any
arbitration) shall be entitled to recover its reasonable legal fees and costs
from the other party.
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.

TRIMONT LAND COMPANY

By:  /s/ Elizabeth J. Cole
   --------------------------------
     Elizabeth J. Cole
     Executive Vice President

TRIMONT LAND HOLDINGS, INC.

By:  /s/ Elizabeth J. Cole
   --------------------------------
     Elizabeth J. Cole
     Executive Vice President
<PAGE>

STATE OF NEW YORK    )
                       ) SS.:
COUNTY OF NEW YORK)

          On the 14th day of September, 2000 before me, the undersigned,
personally appeared Elizabeth J. Cole, personally known to me or proved to me
on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her capacity, and that by his/her signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

-----------------------------------
Notary Public

STATE OF NEW YORK    )
                       ) SS.:
COUNTY OF NEW YORK)

          On the 14th day of September, 2000 before me, the undersigned,
personally appeared Elizabeth J. Cole, personally known to me or proved to me
on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her capacity, and that by his/her signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

-----------------------------------
Notary Public
<PAGE>

                                   EXHIBIT J

       Declaration of Construction Covenants, Conditions and Restrictions
       ------------------------------------------------------------------
<PAGE>
                    DECLARATION OF CONSTRUCTION COVENANTS,
                       CONDITIONS AND RESTRICTIONS FOR
                              NORTHSTAR-AT-TAHOE
                          PLACER COUNTY, CALIFORNIA
<PAGE>

ARTICLE I   DECLARATION-PURPOSES............................................1
      1.1.  General Purposes................................................1
      1.2.  Declaration.....................................................1

ARTICLE II  CERTAIN DEFINITIONS.............................................2
      2.1.  Company:  ......................................................2
      2.2.  Declarant.......................................................2
      2.3.  Declaration.....................................................2
      2.4.  Owner...........................................................2
      2.5.  Person..........................................................2
      2.6.  Grantor Property................................................2
      2.7.  Unit............................................................2

ARTICLE III RESTRICTIONS APPLICABLE TO GRANTOR PROPERTY AND THE UNITS.......2
      3.1.  "Construction" Defined..........................................2
      3.2.  Construction to Proceed in Reasonable Manner;
            Coordination of Construction: Hourly and Period
            Restrictions, Blackout Periods:.................................3
      3.3.  Construction Barricades.........................................4
      3.4.  Initial Construction; Storage Sites and Time Schedules:.........4
      3.5.  Safety Matters; Indemnification.................................5
      3.6.  Evidence of Compliance with Construction Requirements...........5
      3.7.  Liens...........................................................5
      3.8.  Workmanship; Compliance with Laws and Insurance
            Requirements:...................................................6
      3.9.  Cooperation.....................................................6
      3.10. Declarant's Liability Insurance.................................6
      3.11. Adjustment of Minimum Liability Insurance:......................7
      3.12. Blanket Insurance and Certificates:.............................7
      3.13. Mutual Release; Waiver of Subrogation...........................7
      3.14. Maintenance of Grantor Property and the Units...................8
      3.15. Master Development Plan; Approval of Construction
            Activities......................................................8
      3.16. Blasting; Etc...................................................9
      3.17. Use of Grantor Property and the Units During Construction.......9
      3.18. No Hazardous Activities........................................10
      3.19. No Unsightliness...............................................10
      3.20. Lights, Sounds and Odors.......................................10
      3.21. Compliance with Law............................................10

ARTICLE IV  ENFORCEMENT AND REMEDIES.......................................11
      4.1.  Enforcement....................................................11
      4.2.  Remedies.......................................................11
<PAGE>

ARTICLE V   MISCELLANEOUS..................................................11
      5.1.  Duration of Declaration........................................11
      5.2.  Effect of Provisions of Declaration............................12
      5.3.  Attorneys' Fees................................................12
      5.4.  Successors and Assigns.........................................12
      5.5.  Severability...................................................12
      5.6.  Captions.......................................................12
      5.7.  Construction...................................................12
      5.8.  No Waiver......................................................12
      5.9.  Excuses For Non-Performance:  .................................13
      5.10. Arbitration:...................................................13
      5.11. Exhibits:......................................................13
      5.12. Locative Adverbs; Term "Including":............................13
      5.13. Payment on Default; Deduction..................................13
      5.14. Governing Laws:................................................14
      5.15. Rights, Privileges and Easements with Respect to Liens:........14
      5.16. Time of Essence:...............................................14
      5.17. Hazardous Materials:  .........................................14
      5.18. No Third Party Beneficiaries...................................15
      5.19. Estoppel Certificate:..........................................15

<PAGE>

       DECLARATION OF CONSTRUCTION COVENANTS, CONDITIONS AND RESTRICTIONS
                                      FOR
                               NORTHSTAR-AT-TAHOE
                           PLACER COUNTY, CALIFORNIA

          This Declaration of Covenants, Conditions and Restrictions for
Northstar -At-Tahoe, Placer County, California ("Declaration") is made as of
this 22nd day of September, 2000, by Trimont Land Holdings, Inc., a Delaware
corporation (the "Declarant").

                                   ARTICLE I
                              DECLARATION-PURPOSES

          1.1. GENERAL PURPOSES: (a) Pursuant to a certain Agreement of
Purchase and Sale of even date herewith between Trimont Land Company (defined
below as the "Company"), as seller, and the Declarant, as purchaser (the
"Purchase Contract"), Declarant has purchased and is the owner of the real
property hereinafter described on Exhibit A (the "Grantor Property"). The
Grantor Property is adjacent and contiguous to approximately 6,000 acres of
unimproved and improved land legally or beneficially owned by the Company (the
"Grantee Property") consisting in part of a ski and resort area generally known
as Northstar-At-Tahoe (the "Resort"). The Grantor Property is also burdened by,
and subject to certain easements granted in favor of, the Grantee Property, as
more fully set forth in the Easement Agreement of even date herewith between
Trimont Land Company and the Declarant (the "Easement Agreement").

          (b) Declarant intends to develop the Grantor Property by constructing
approximately 1,800 multifamily units, together with the development of certain
commercial units at the Grantor Property (each multifamily unit or commercial
unit hereinafter sometimes referred to as a "Unit" and collectively, the
"Units"), all in accordance with the "Master Development Plan" (as defined
below), and subject to the terms and provisions contained in the "Operating
Agreement" of Northstar Mountain Properties, LLC of even date herewith, as the
same may be hereafter modified and amended (the "Operating Agreement"), and the
terms and conditions of this Declaration.

          (c) As a material inducement to Trimont Land Company to have entered
into the Purchase Contract and sell the Grantor Property to Declarant,
Declarant has agreed to subject the Grantor Property to certain covenants,
conditions, restrictions and regulations for the benefit of the Grantee
Property, its owners, and its successors and assigns, and Declarant hereby
intends to establish certain covenants, conditions, restrictions and
regulations governing the development, construction and maintenance of the
Units and other improvements on the Grantor Property.

          1.2. DECLARATION: To further the general purposes herein expressed,
Declarant, for itself, its successors and assigns, hereby declares that the
Grantor Property, including the Units to be constructed thereon, shall, at all
times, be subject to the provisions of this Declaration and to the covenants,
conditions, restrictions and reservations herein contained, which shall run
<PAGE>

with the Grantor Property and the Units and burden Declarant, all other parties
having any right, title or interest in the Grantor Property and the Units, or
any portion thereof, and their respective successors, assigns, heirs, devisees
and personal representatives.

                                  ARTICLE II
                              CERTAIN DEFINITIONS

          2.1. COMPANY: Company means Trimont Land Company, a California
corporation, and its successors and assigns including, but not limited to, any
future fee or leasehold owner of any portion of the Grantee Property.

          2.2. DECLARANT: Declarant means, collectively, Trimont Land Holdings,
Inc. a Delaware corporation, and its successors and assigns.

          2.3. DECLARATION: Declaration means this instrument and all
amendments or supplements hereto hereafter recorded in the real property
records of Placer County, California.

          2.4. OWNER: Owner means the record holder of legal title to the fee
simple interest in any portion of the Grantor Property and/or the Units or
interest therein, including contract sellers, but excluding (i) contract
purchasers, and (ii) those having such interest merely as security for the
performance of an obligation. The term Owner shall include Declarant to the
extent it is the record owner of fee simple title to any portion of the Grantor
Property and/or the Units.

          2.5. PERSON: Person means any natural person, corporation,
partnership, limited liability company, Company, trustee or any other entity
recognized as being capable of owning real property under the laws of the State
of California.

          2.6. GRANTOR PROPERTY: Grantor Property means any and all real
property subject to this Declaration from time to time.

          2.7. UNIT: Unit means any of the Units and other improvements to be
constructed at the Grantor Property, whether constructed or used for
multifamily or commercial purposes, or any other legal purpose.

                                  ARTICLE III

           RESTRICTIONS APPLICABLE TO GRANTOR PROPERTY AND THE UNITS

          3.1. "CONSTRUCTION" DEFINED: As used in this Article, the word
"construction" includes initial construction under this Declaration and, except
where otherwise specified, subsequent construction, alterations, maintenance,
repair, restoration, rebuilding, demolition and razing carried on at the
Grantor Property and the Units. It is anticipated that the Units will be built
in phases on a project by project basis (and on a building by building basis).
Therefore, it is the express intent of Declarant that this Declaration shall be
<PAGE>

applicable to and bind Declarant in the performance of the initial construction
of the Units during each such construction phase or project and the scope of
this Declaration shall be interpreted so as to bind all initial construction at
the Grantor Property.

          3.2. CONSTRUCTION TO PROCEED IN A REASONABLE MANNER; COORDINATION OF
CONSTRUCTION: HOURLY AND PERIOD RESTRICTIONS, BLACKOUT PERIODS: The initial
construction intended to be performed by Declarant at the Grantor Property,
subject to and in accordance with this Declaration, shall include demolition
and razing of certain existing improvements and substantial construction and
renovation of other improvements on a project by project basis. Such
construction is expected to generate activities, noise and debris similar to
construction projects of comparable scope and size and otherwise create certain
disruptions to the normal ongoing activities at the Grantee Property.
Nevertheless, Declarant shall perform its construction so as not to:

          (a) cause any unreasonable increase in the cost of construction on
the Grantee Property or any part thereof;

          (b) cause any building or other improvements located on any portion
of the Grantee Property to be in violation of (i) any applicable building and
zoning laws and all other laws, ordinances, orders, codes, rules, regulations
and requirements of all federal, state, municipal, public and governmental
agencies and governments, or (ii) orders, rules and regulations of the National
Board of Fire Underwriters or any other body now or hereafter constituted
performing similar functions in Placer County, California;

          (c) unreasonably interfere with any other construction being
performed on any part of the Grantee Property;

          (d) unreasonably interfere with the Company's operations and rights
under the Easement Agreement or violate the Operating Agreement;

          (e) unreasonably impair the use, occupancy, operation or enjoyment of
the Grantee Property and other areas comprising the Resort; or

          (f) unreasonably interfere with the existing parking facilities at
the Grantee Property (except to the extent expressly permitted by Section 9.1
of the Agreement for Purchase and Sale dated as of the date of this
Declaration, between Trimont Land Holdings, Inc. and East West Partners, Inc.).
In no event shall Declarant or any architects, consultants, engineers,
materialmen, contractors or subcontractors involved with the construction be
permitted to use any of the parking facilities at the Grantee Property for any
purpose.

          Declarant shall use all reasonable efforts to cause its architects,
engineers and contractors to cooperate and coordinate its construction with the
architects, engineers, contractors and construction work being conducted at any
part of the Grantee Property to the extent reasonably practicable, to achieve
the objectives set forth in this Section, and so as not to violate the
applicable provisions of this Declaration.

          All construction activities at the Grantor Property with respect only
to the areas known and defined in the Operating Agreement as the "Village Core"
shall only be conducted (a) during the "Restricted Periods" (as defined
<PAGE>

herein), between the hours of 7:00 A.M. to 6:00 P.M., Monday through Friday and
9:00 A.M. to 6:00 P.M. on Saturday, Sunday and holidays, and (b) during any
period other than the Restricted Periods, at any time subject to the
requirements of applicable law and regulation and any homeowners' (or similar)
association rules then in effect. For purposes of this Declaration, the
Restricted Periods shall mean the following: (i) the day of the official
opening of the ski season at the Resort until the official closing of the ski
season at the Resort, and (ii) Memorial Day until and Labor Day.
Notwithstanding the foregoing or any contrary provision contained in this
Declaration, any construction activities desired to be performed to the Village
Core during (1) hours other than those permitted above, or (2) at any time
during the holiday period of December 24 to January 1, or the holiday periods
coinciding with (x) the three (3) day President's Day weekend holiday and (y)
the three (3) day Martin Luther King, Jr. weekend holiday, as then generally
observed at the Resort (such hours or periods hereinafter referred to as the
"Blackout Periods"), shall first require the prior written consent of the
Company. The Company agrees not to unreasonably withhold or delay its consent
to the performance of such activities during the Blackout Periods provided the
Company determines, in its good faith commercially reasonable judgment, that
such construction activities will not interfere with the use and enjoyment of
the Resort including any existing Units then constructed, or will not violate
any of the provisions set forth in this Section 3.2 (a) through (f) inclusive.

          Notwithstanding anything to the contrary contained in this Section
3.2, the performance of decorative, finishing, or other minor non-structural
work at the Grantor Property (whether within or outside of the Village Core and
whether or not during the Restricted Periods) performed entirely within the
interior of any Unit (e.g., painting, wallpapering, installation of hardware)
shall be permitted at any time without the need to comply with the foregoing
hourly or period restrictions provided that the other provisions of this
Section 3.2 and the other applicable provisions of this Declaration are not
violated thereby.

          3.3. Construction Barricades: With respect to any work to be
performed to or within the Village Core, Declarant shall erect adequate,
sightly construction barricades at least eight (8) feet in height (or any lower
height permitted by applicable law) substantially enclosing the area of its
construction, and shall maintain these construction barricades in place (to the
extent reasonably necessary to remove the hazardous construction conditions, if
any).

          This Section applies only to construction that can reasonably be
deemed to constitute a hazardous condition; however, Declarant may erect
construction barricades, as hereinabove specified, at the time of any
construction and maintain the same until the building surrounded is secure from
unauthorized intrusion.

          3.4. Initial Construction; Storage Sites and Time Schedules:

          (a) Before Declarant begins any initial construction with respect to
Units, Declarant and the Company shall agree upon the location of material and
equipment storage sites, construction shacks and other temporary improvements
and workmen's parking areas and access ways and roads to be used for such
construction (such areas are collectively called "staging areas"). The Company
agrees not to unreasonably withhold its consent to any areas designated by
Declarant as staging areas provided the location and use of such staging areas
does not violate the provisions of Section 3.2 (a) through(f) inclusive.; and
<PAGE>

          (b) Declarant shall submit to the Company, for the Company's
reasonable approval, a time schedule indicating the approximate dates when
construction is expected to be commenced and completed to each portion of the
Grantor Property and the Units. Declarant shall exercise reasonable efforts to
adhere to such schedule and shall promptly notify the Company whenever it is
anticipated that there may be a material departure from such schedule.

          3.5. SAFETY MATTERS; INDEMNIFICATION: Declarant shall:

          (a) take all safety measures reasonably required to protect the
Company and the Grantee Property free from injury or damage caused by or
resulting from the performance of construction by or on behalf of Declarant;

          (b) indemnify the Company from all claims, losses, costs, expenses
and liabilities including, but not limited to, reasonable attorneys' fees and
disbursements, arising from the death of or accident, injury, loss or damage
whatsoever caused to any natural person or to the property of any Person
arising out of, or in connection with, or as a result of construction by or
performed at the request of the Declarant; and

          (c) indemnify the Company and its property from and against all
mechanics', materialmen's and laborers' liens arising from construction by or
performed at the request of the Declarant and all claims, costs, expenses and
liabilities including, but not limited to, reasonable attorneys' fees and
disbursements, arising out of such liens.

          3.6. EVIDENCE OF COMPLIANCE WITH CONSTRUCTION REQUIREMENTS: After
Declarant has completed any construction, it shall, upon request of the
Company, deliver evidence that the construction has been completed in
compliance with (and not in violation of) all applicable laws, ordinances,
rules and regulations. A Certificate of Occupancy (or the equivalent thereof)
issued by the governmental body having jurisdiction thereof shall be deemed
satisfactory evidence of compliance with such laws, ordinances, rules and
regulations.

          3.7. LIENS: Declarant agrees that in the event any mechanic's lien or
other statutory lien is filed during the term of this Declaration by reason of
work, labor, services, or materials supplied to or at the request of Declarant
pursuant to any construction of the Units, or supplied to or at the request of
Declarant or an Owner pursuant to any construction by said Declarant or Owner,
it shall pay and discharge, or cause to be paid and discharged, the same of
record within 30 days after the filing thereof, subject also to the provisions
of the following sentence. Declarant or Owner shall have the right to contest
the validity, amount or applicability of any such respective liens by
appropriate legal proceedings, and so long as it shall furnish a bond or
indemnify as hereinafter provided, and be prosecuting such contest in good
faith, the requirements that it pay and discharge or cause to be paid and
discharged, such liens within said 30 day period shall not be applicable;
PROVIDED, HOWEVER, that in all events Declarant shall within 30 days after the
filing thereof bond or indemnify against such liens in amount, form and manner
satisfactory to induce, and, at its expense shall cause, the title insurance
company which insured title to the Grantee Property or other property of the
Company (and such Company's easements) to insure over such liens or to reissue
or update its existing policy, binder or commitment without showing any title
exception by reason of such liens and shall indemnify the Company hereto from
all claims resulting from the assertion of any such liens.
<PAGE>

          The foregoing provisions for indemnification, security and
affirmative title insurance shall not be permitted in lieu of bonding if any of
the following is applicable: (a) the amount in question, together with all
prior liens indemnified and insured against hereunder and outstanding at any
one time, exceeds ONE HUNDRED THOUSAND DOLLARS ($100,000) in the aggregate; (b)
the indemnification, security and/or title insurance arrangements are not
acceptable, in the exercise of their reasonable discretion, to the Company's
present or prospective lenders, mortgagees, title companies, buyers or other
third parties in the exercise of their reasonable discretion, holding or
intending to acquire an interest in the Grantee Company or other property of
the Company or any portion thereof; or (c) the existence of such lien affects
marketability of title in any contemplated transaction involving the Grantee
Company or other property of the Company, or any portion thereof, and such
effect is not eliminated by such indemnification.

          In the event such legal proceedings shall be finally concluded (so
that no further appeal may be had as of right) adversely to Declarant,
Declarant shall within five (5) days thereafter cause the lien(s) (including
any resulting judgment lien) to be discharged of record, and in all events such
lien shall be discharged prior to foreclosure of such lien.

          3.8. WORKMANSHIP; COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS:
Declarant agrees to perform such work and to construct the Units, and any other
buildings and improvements constructed by it, in a diligent, good and
workmanlike manner with the use of first class materials and in material
compliance with (i) all applicable building and zoning laws and all other laws,
ordinances, orders, codes, rules, regulations and requirements of all federal,
state, municipal, public and governmental agencies and governments, and (ii)
orders, rules and regulations of the National Board of Fire Underwriters or any
other body now or hereafter constituted performing similar functions in Placer
County, California. Declarant shall not be deemed to have failed to fulfill its
obligations hereunder by reason of non-compliance caused by an Owner or other
third party, so long as Declarant uses reasonable efforts to cause such Owner
or third party to cure its non-compliance.

          3.9. COOPERATION: Declarant and the Company agree to cooperate with
the other (without expense to the cooperating party) to the extent such party
may reasonably request or require such cooperation to obtain any permits,
licenses, certificates, authorizations, consents, special exceptions, or other
approvals of any local, county, state, federal or other governmental body
having jurisdiction over the Grantor Property and the Units and shall so
reasonably cooperate in all other respects to the end that each party's
building(s) and improvement(s) shall be constructed as efficiently and
expeditiously as possible. Nothing herein shall be construed as a modification
of the consent or approval rights of the Company contained in any other
document.

          3.10. DECLARANT'S LIABILITY INSURANCE: Declarant shall, during the
term of this Declaration, maintain, or cause to be maintained, in full force
and effect under a combined single limit policy, comprehensive general
liability insurance or commercial general liability insurance written on an
occurrence basis, with an insurance company or companies rated at least A-X in
the then most recently published Best Key Rating Guide, including coverage for
any accident or incident occurring on the Grantor Property, resulting in
<PAGE>

property damage, bodily or personal injury to or death of any person, and
consequential damages arising therefrom, with a combined single limit in the
amount of TEN MILLION DOLLARS ($10,000,000) per occurrence and annual
aggregate, for bodily or personal injury or property damage, including
contractual liability insurance within such single limit (which limit shall be
subject to increase pursuant to Section 3.11). Declarant shall furnish to the
Company, on or before the effective date of any such policy, evidence that the
insurance referred to in this Section is in force and effect. Such insurance
shall name the Company (and if requested by the Company, its mortgagees) as an
additional insured thereunder, but only with respect to claims for which
Declarant is required to indemnify the Company hereunder, shall contain a
severability of interests endorsement and shall provide that the insurance may
not be canceled, reduced or materially amended without at least 30 days prior
written notice being given by the insurer to the Company.

          3.11. ADJUSTMENT OF MINIMUM LIABILITY INSURANCE: The amounts of the
minimum liability insurance coverage amounts set forth in Section 3.10 shall be
adjusted upward, but never downward, on each anniversary of the date of this
Declaration which is divisible by five (i.e., the fifth anniversary, the tenth
anniversary, etc.) to be that amount which is the product derived by
multiplying each such amount as first stated herein by a fraction, the
numerator of which is the Consumer Price Index (as hereinafter defined) for the
month which is two calendar months prior to such anniversary date and the
denominator of which shall be the Consumer Price Index for the month which is
two calendar months before the date of this Declaration. The "Consumer Price
Index" shall mean the Consumer Price Index for All Urban Consumers (CPI-U) --
U.S. City Average, All Items (1982-84 equals 100) published by the Bureau of
Labor Statistics of the U.S. Department of Labor. If such index is no longer
published or is no longer available, the "Index" shall mean the Index of prices
in the United States reasonably determined by the Parties to be most closely
comparable to the discontinued Index.

          3.12. BLANKET INSURANCE AND CERTIFICATES: Any insurance required to
be carried pursuant to this Declaration may be carried in whole or in part
under a policy or policies covering other liabilities and locations of
Declarant, provided that if such blanket policy contains a general policy
aggregate, it shall (i) apply on a per location basis, (ii) allocate to the
properties required to be insured an amount not less than the amount of
insurance required to be carried by such Party with respect thereto, pursuant
to the above, and (iii) contain, or otherwise unconditionally authorize, the
waiver granted in Section 3.13. Declarant shall furnish to the Company evidence
that the insurance required by this Declaration is in full force and effect.
All policies of insurance carried by Declarant, or endorsements issued under
any blanket policy or policies covering those risks required to be insured
against, shall provide that the same may not be canceled or reduced in scope or
below the amount required hereunder, or materially modified, without at least
30 days prior written notice being given by the insurer to the Company.

          3.13. MUTUAL RELEASE; WAIVER OF SUBROGATION: Declarant hereby
releases the Company and its officers, directors, agents, partners, servants
and employees from any liability and, if it has insurance, waives on behalf of
its insurer, any claim for any loss or damage to any or all of its property,
including any resulting loss of rents or profits, which loss or damage is of a
type (regardless of amount) required to be covered by the insurance described
in this Article, regardless of any negligence on the part of the released
Persons which may have contributed to or caused such loss or damage. Declarant
covenants that to the extent it is not already unconditionally authorized to
waive the subrogation rights of its insurer, it will obtain for the benefit of
the Company an express waiver of any right of subrogation which the insurer of
<PAGE>

Declarant may acquire against the Company by virtue of the payment of any such
loss covered by such insurance to the extent such waiver is available in the
commercial insurance marketplace without the payment of additional premiums
(unless the Company agrees in writing to pay such additional premiums).

          3.14. MAINTENANCE OF GRANTOR PROPERTY AND THE UNITS: All Grantor
Property and the Units, except for any portion of the Grantor Property and the
Units then undergoing major construction, including all improvements on such
Grantor Property and the Units, shall be kept and maintained by the Owner
thereof in a reasonably clean, safe, attractive and sightly condition and in
good repair, and no trash, litter, junk, boxes, containers, bottles, cans,
implements, machinery, lumber or other building materials shall be permitted to
remain exposed upon any Unit so that they are visible from, or are a nuisance
in any way to, any neighboring Unit, any road, any ski run or ski way or access
path on the Grantor Property or the Grantee Property. With respect to unpaved
roads on the Grantor Property, Declarant shall, promptly following a written
demand, reimburse the Company for Declarant's fair share of the cost of
maintaining and repairing such roads, with such fair share to be based upon the
relative use of such unpaved roads by Declarant and the Company and the costs
incurred by reason of such use.

          3.15. MASTER DEVELOPMENT PLAN; APPROVAL OF CONSTRUCTION ACTIVITIES:
Construction of the Units or any other improvements permitted by this
Declaration shall be made subject to, and only in accordance with (a) the
terms, provisions and conditions of the Master Development Plan (attached to
the Operating Agreement as Exhibit F) and annexed to this Declaration as
Exhibit B and by this reference made a part hereof, and (b) in compliance with
the architectural plans and renderings (the "Plans") for the Units annexed to
this Declaration as Exhibit C and by this reference made a part hereof. After
such initial construction is completed in accordance with the Master
Development Plan and in compliance with this Declaration, each Owner shall have
the right to alter, modify or renovate any existing improvements on its Unit
provided that in each instance, such alteration, modification or renovation is
permitted by, and made pursuant to, the terms, provisions and conditions of the
Master Development Plan and in compliance with the Plans. Any initial
construction of the Units or such other improvements, or any such alteration,
modification or renovation which is not permitted by the Master Development
Plan or in compliance with the Plans, may be made only by first obtaining the
prior written consent of the Company in each instance, which consent may be
granted or withheld by the Company as follows: (1) consent to any such
construction, or any such alteration or other change that affects in any
respect (x) within the "Village Core" (as defined in the Operating Agreement),
the exterior design, building locations, common areas and public amenities, or
(y) regardless of location on the Grantor Property, mix, Unit size, number of
Units, lift access, trail location and skier parking, may be granted or
withheld by the Company in its sole and absolute discretion; and (2) consent to
any such construction, or any such alteration or other change that affects in
any respect outside the "Village Core", the exterior design, building
locations, and non-skier parking, may not be unreasonably withheld, conditioned
or delayed.

          Supplementing and subject to the foregoing, the following
restrictions shall apply to any improvements to be constructed (except in each
instance to the extent provided for and approved in accordance with the terms
of the Master Development Plan or in compliance with the Plans): (i) no
building or other improvements, including without limitation, any fence, wall,
<PAGE>

driveway, paving, walk, deck, patio, canopy, awning, roof, signage, exterior
lighting facility or landscaping, shall be constructed, erected, placed or
installed upon any Unit, (ii) no material change or alteration of the materials
or appearance (including color) of the exterior of a building or other
structure shall be made, (iii) no material change in the final grade of any
Unit shall be performed, and (iv) no other substantive construction activity
shall be initiated on any Unit until all approvals as may be required hereunder
and by any governmental or quasi-governmental entity having jurisdiction over
the Grantor Property and the Units have been obtained by such Owner.

          Notwithstanding the foregoing provisions of this Section 3.15, if and
for so long as Northstar Mountain Properties, LLC is not in default beyond
applicable notice and grace periods under the Operating Agreement and the
Operating Agreement is in full force and effect, the foregoing provisions of
this Section 3.15 shall not apply, and any construction of the Units shall only
be made in compliance with the terms of the Operating Agreement. Upon
completion of the initial construction of any Units in compliance with the
Master Development Plan and this Declaration without default under either
document thereunder, and delivery to the Company of evidence thereof pursuant
to Section 3.6 above, the Company agrees to execute and deliver in recordable
form, at no cost to the Company, a release of those Units from this
Declaration.

          3.16. BLASTING; ETC.: If any blasting, demolition, pile driving,
excavation, shoring or other similar activities is to occur, the Company will
be informed far enough in advance to allow it to make such investigation as
they deem reasonably necessary to confirm that appropriate protective measures
have been taken prior thereto. Notwithstanding the foregoing, no approval of
any blasting or other such activities by the Company will in any way release
the person conducting same from any and all liability in connection therewith,
nor will any such approval in any way be deemed to make the Company liable for
damages which may occur therefrom, and the person doing the activity and the
Owner of whose Unit such activity occurs at will defend and hold harmless and
hereby indemnifies the Company from any and all claims, losses, costs, expenses
and liabilities including, but not limited to, reasonable attorneys' fees and
disbursements, arising out of such activities. The Company may impose any
reasonable conditions and restrictions, including time and date restrictions
and insurance requirements, on all such activities.

          3.17. USE OF GRANTOR PROPERTY AND THE UNITS DURING CONSTRUCTION: It
shall be expressly permissible and proper for Declarant and any Owner and their
employees, agents, independent contractors, successors and assigns involved in
the construction of improvements on, or the providing of utility service to,
the Grantor Property and the Units, acting with the prior written consent, not
to be unreasonably withheld, of the Company, to perform such activities and to
maintain upon portions of the Grantor Property and the Units as it deems
necessary such facilities as may be reasonably required, convenient, necessary
or incidental to such construction and development of the Grantor Property and
the Units. This permission specifically includes, without limiting the
generality of the foregoing, maintaining storage yards, construction yards,
portable toilets, equipment and signs. However, no activity by an Owner will be
performed and no facility will be maintained by an Owner on any portion of the
Grantor Property and the Units in such a way as to unreasonably interfere with
the use or access of any other Owner, or violate the terms of the Easement
Agreement or this Declaration, or unreasonably interfere with the use or access
of the Grantee Property. If any Owner's use under this provision is deemed
<PAGE>

objectionable by the Company, then the Company, in its sole discretion, may
withdraw this permission.

          3.18. NO HAZARDOUS ACTIVITIES: No activities shall be conducted on
any portion of the Grantor Property and the Units, and no improvements
constructed on any Grantor Property and the Units, which are or might be unsafe
or hazardous to any person or property.

          3.19. NO UNSIGHTLINESS: With respect to the initial construction of
the Units, no unsightliness shall be permitted on any portion of the Grantor
Property and the Units which is in excess of or is materially different from
the condition of similar construction sites involved in the construction of
residential/commercial properties in the general area where the Grantor
Property is located. Without limiting the generality of the foregoing:

          (a) All unsightly structures, facilities, equipment, objects and
conditions shall be kept within an enclosed structure at all times;

          (b) Pipes for water, gas, sewer, drainage or other purposes, wires,
cables, poles, antennas and other facilities for the transmission or reception
of audio or visual signals or electricity, utility meters or other utility
facilities, gas, oil, water or other tanks, and sewage disposal systems or
devices shall be kept and maintained within an enclosed structure or below the
surface of the ground, and no satellite dishes shall be permitted; and

          (c) No lumber, grass, shrub or tree clippings or plant waste,
compost, metals, bulk materials or scrap or refuse or trash or unused items of
any kind shall be kept, stored or allowed to accumulate on any Grantor Property
and the Units.

          3.20. LIGHTS, SOUNDS AND ODORS: All exterior lighting of improvements
and grounds on the Grantor Property and the Units during the construction will
be subject to regulation by the owner of the Grantee Property. No light shall
be emitted from any portion of the Grantor Property and the Units which is
unreasonably bright or causes unreasonable glare or shines directly onto an
adjacent Unit; no sound shall be emitted from the construction of improvements
on any portion of the Grantor Property and the Units which is unreasonably loud
or annoying (although normal and reasonable amounts of construction noise will
not be prohibited during normal hours of construction); and no odor shall be
emitted from any portion of the Grantor Property and the Units which is noxious
or offensive to others. Reasonableness with respect to the determination of
lights, sounds and odors on or emanating from the Grantor Property pursuant to
this Section shall be governed by the levels of lights, sounds and odors
commonly found at similar construction sites involved in the construction of
residential/commercial properties in the general area where the Grantor
Property is located.

          3.21. COMPLIANCE WITH LAW: No portion of the Grantor Property and the
Units shall be used, occupied, altered, changed, improved or repaired except in
compliance with all present and future laws, rules, requirements, orders,
directions, ordinances and regulations of the United States of America, State
of California, County of Placer and all other municipal, governmental or lawful
authority whatsoever and of all their departments, bureaus and officials.
Furthermore, no Owner shall release, discharge or emit from the Grantor
<PAGE>

Property and the Units or dispose of, or allow any person under such Owner's
control or direction to release, discharge or emit from the Grantor Property
and the Units or dispose of, any material on, above or under the Grantor
Property and the Units that is designated as a pollutant or contaminant under
any federal, state or local law, regulation or ordinance.

                                  ARTICLE IV

                            ENFORCEMENT AND REMEDIES

          4.1. ENFORCEMENT: Each provision of this Declaration enforceable
against Declarant or an Owner or member of the general public or Unit shall be
enforceable by the Company by a proceeding for a prohibitive or mandatory
injunction or by suit or action to recover damages.

          4.2. REMEDIES: In addition, if the Declarant or an Owner or member of
the general public fails to perform or observe any covenant or condition to be
performed or observed under this Declaration or the Easement Agreement, the
Company shall have the following rights and remedies:

          (a) it may, but is not obligated to, cure such failure to comply at
the defaulting party's sole cost and expense. If the Company cures any such
failure to comply, (i) such Owner shall pay to the Company the amount of all
costs incurred by the Company in connection therewith within 30 days after the
Owner receives a written invoice therefor from the Company or (ii) such member
of the general public shall pay to the Company the amount of all costs incurred
in connection therewith within 30 days after such party receives notice
therefor;

          (b) In addition to the fines provided for therein, the Company may
fine Declarant or any Owner an amount not to exceed $2,000 for each violation
caused by the responsible party. The Company may, in its sole and exclusive
discretion, annually adjust for inflation the maximum amount of such fine. Each
day any violation continues or is permitted to continue shall constitute a
separate offense for purposes of levying such fine. Declarant or the Owner
shall pay any such fine within 30 days after it receives written notice
thereof;

          (c) The Company shall have all other rights and remedies available to
it under the Easement Agreement, or at law or in equity. All rights and
remedies of the Company shall be cumulative, and the exercise of one right or
remedy shall not preclude the exercise of any other right or remedy.

                                   ARTICLE V

                                 MISCELLANEOUS

          5.1. DURATION OF DECLARATION: The covenants, conditions,
restrictions, reservations, easements, charges and liens set forth in this
Declaration shall run with and bind the Grantor Property and the Units in
perpetuity from the date of recordation of this Declaration, unless and until
this Declaration is terminated by a recorded termination agreement that has
been authorized and executed pursuant to applicable law.
<PAGE>

          5.2. EFFECT OF PROVISIONS OF DECLARATION: Each provision of this
Declaration, and any agreement, promise, covenant and undertaking to comply
with each provision of this Declaration, and any necessary exception or
reservation or grant of title, estate, right or interest to effectuate any
provision of this Declaration: (a) shall be deemed incorporated in each deed or
other instrument by which any right, title or interest in any portion of the
Grantor Property, including a Unit, is granted, devised or conveyed, whether or
not set forth or referred to in such deed or other instrument; (b) shall, by
virtue of acceptance of any right, title or interest in any portion of the
Grantor Property including a Unit, be deemed accepted, ratified, adopted and
declared as a personal covenant of such Owner and, as a personal covenant,
shall be binding on such Owner and such Owner's respective heirs, personal
representatives, successors and assigns and, as a personal covenant of an
Owner, shall be deemed a personal covenant to, with and for the benefit of the
Company but not to, with or for the benefit of any other Owner, (c) shall be
deemed a real covenant by Declarant, for itself, its successors and assigns,
and also an equitable servitude, running, in each case, as a burden with and
upon the Grantor Property including the title to a Unit and, as a real covenant
and also as an equitable servitude, shall be deemed a covenant and servitude
for the benefit of the Grantee Property including any and all other real
property within the Resort; and (d) shall be deemed a covenant, obligation and
restriction secured by a lien, binding, burdening and encumbering the Grantor
Property and title to each Unit.

          5.3. ATTORNEYS' FEES: In the event of any dispute under or with
respect to this Declaration, the prevailing party shall be entitled to recover
from the non-prevailing party all of its costs and expenses in connection
therewith, including, but not limited to, reasonable attorneys' fees and
disbursements.

          5.4. SUCCESSORS AND ASSIGNS: Except as otherwise expressly provided
herein, this Declaration shall be binding upon Declarant and each Owner, and
their respective heirs, personal representatives, successors and assigns.

          5.5. SEVERABILITY: Invalidity or unenforceability of any provision of
this Declaration, in whole or in part, shall not affect the validity or
enforceability of any other provision or any valid and enforceable part of a
provision of this Declaration.

          5.6. CAPTIONS: The captions and headings in this instrument are for
convenience only and shall not be considered in construing any provisions of
this Declaration.

          5.7. CONSTRUCTION: When necessary for proper construction, the
masculine of any word used in this Declaration shall include the feminine or
neuter gender, and the singular the plural, and vice versa.

          5.8. NO WAIVER: The rights and remedies given to the Company by this
Declaration shall be deemed to be cumulative and no one of such rights and
remedies shall be exclusive of any of the others, or of any other right or
remedy at law or in equity which the Company might otherwise have under this
Declaration, and the exercise of one such right or remedy by the Company shall
not impair the Company's standing to exercise any other right or remedy.
Failure to enforce any provisions of this Declaration shall not operate as a
waiver of any such provision or of any other provision of this Declaration.
<PAGE>

          5.9. EXCUSES FOR NON-PERFORMANCE: Notwithstanding anything contained
in this Declaration, Declarant shall be excused from performing any obligation
under this Declaration, and any delay in the performance of any obligation
under this Declaration shall be excused, if, but only while and so long as, the
performance of the obligation is prevented or delayed by acts of God, fire,
earthquake, floods, explosion, actions of the elements, war, riots, mob
violence, inability to procure or a general shortage of labor, equipment,
facilities, materials or supplies in the open market, failure of
transportation, strikes, lockouts, actions of labor unions, condemnation, court
orders, laws or orders of governmental or military authorities or any other
cause, whether similar or dissimilar to the foregoing, not within the
reasonable control of Declarant (other than lack of or inability to procure
monies to fulfill its commitments and obligations under this Declaration).
Declarant shall within 30 days after the occurrence of any such delay give
written notice to the Company of the occurrence of any such delay and an
explanation thereof and, upon the termination thereof, the termination of such
delay.

          5.10. ARBITRATION: Without affecting the rights and remedies of the
Company set forth in Article IV, all disputes arising out of or in connection
with this Declaration shall be submitted to arbitration in the manner set forth
in that certain Arbitration Agreement (which is attached to the Operating
Agreement as Exhibit "E") between Northstar Mountain Properties, LLC and the
other parties thereto.

          5.11. EXHIBITS: Each reference herein to an Exhibit refers to the
applicable Exhibit that is attached to this Declaration All such Exhibits
constitute a part of this Declaration and by this Section are expressly made a
part hereof. In the event of any conflict or inconsistency between the
provisions hereof and any Exhibit(s), the provisions of the Exhibit(s) shall
control.

          5.12. LOCATIVE ADVERBS; TERM "INCLUDING": The locative adverbs
"herein", "hereof", "hereunder", "hereto", "hereby", "hereinafter",
"hereinabove", and like words wherever the same appear in this Declaration,
mean and refer to this Declaration in its entirety and not to any specific
Article, Section or subsection or subparagraph of this Declaration unless
otherwise specifically indicated. When used herein, the term "including" shall
mean "including without limitation" unless otherwise specifically provided.

          5.13. PAYMENT ON DEFAULT; DEDUCTION: If under this Declaration the
Company is compelled or elects to pay any sum of money or do any acts that
require the payment of money by reason of Declarant's failure or inability to
perform any of the provisions of this Declaration, Declarant shall promptly,
upon demand, reimburse the Company for such sums, and all such sums shall bear
interest at the rate of one percent (1%) per annum over the "Prime Rate" as
defined in the Easement Agreement (but in no event exceeding any applicable
maximum rate per annum permitted to be contracted for between the parties under
California law) from the date of expenditure until the date of such
reimbursement.

          If reimbursement or payment shall not be made within ten (10) days
after such demand is made, the Company shall have the right to deduct the
amount thereof, together with interest as aforesaid, without liability or
forfeiture, from any sums then due or thereafter becoming due from the Company
to the Declarant.
<PAGE>

          Any deduction made by the Company pursuant to the provisions of this
Section from any sums due or payable by it hereunder shall not constitute a
default in the payment thereof unless the Company fails to pay the amount of
such deduction (with interest thereon at the rate provided above from the
respective dates of deduction) within thirty (30) days after final adjudication
that such amount is owing. The option given in this Section is for the sole
protection of the Company and its existence shall not release Declarant from
the obligation to perform the terms, provisions, covenants and conditions
herein provided to be performed thereby or deprive Company of any other legal
or equitable rights which it may have by reason of any such default.

          5.14. GOVERNING LAWS: This Declaration shall be construed and
governed in accordance with the laws of the State of California.

          5.15. RIGHTS, PRIVILEGES AND EASEMENTS WITH RESPECT TO LIENS: This
Declaration, and the rights, privileges and easements of the Company, shall in
all events be superior and senior to the rights, interests and estates of all
Persons and to any lien or other encumbrance placed upon any portion of the
Grantor Property including a Unit affected hereby, including the lien of any
mortgage; any amendments or modification hereof, whenever made, shall be deemed
superior and senior to any rights, interests and estates and to all liens,
including the lien of any mortgage, the same as if such amendments or
modification had been executed concurrently herewith.

          5.16. TIME OF ESSENCE: Time is of the essence with respect to the
performance of each of the terms, provisions, covenants and conditions
contained in this Declaration.

          5.17. HAZARDOUS MATERIALS: For purposes hereof, the following terms
shall have the following meanings:

          "Environmental Laws" shall mean all statutes, ordinances, orders,
rules and regulations of all federal, state or local governmental agencies
relating to the use, generation, manufacture, installation, release, discharge,
handling, storage or disposal of Hazardous Materials.

          "Hazardous Materials" shall mean and include, but shall not be
limited to, any (i) "hazardous substance", "pollutant" or "contaminant" (as
defined in the Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA"), as codified at 42 U.S.C. Sections 9601, et seq., as amended, or
the regulations promulgated pursuant to CERCLA, including any element,
compound, mixture, solution, or substance which is or may be so designated a
hazardous substance pursuant to CERCLA; (ii) all substances which are or may be
designated as hazardous substances pursuant to the Federal Water Pollution
Control Act ("FWPCA"), as codified at 33 U.S.C. Sections 1251, et seq., as
amended; (iii) any hazardous waste having the characteristics which are
identified under or listed pursuant to the Resource Conservation and Recovery
Act ("RCRA"), as codified at 42 U.S.C. Sections 6901, et seq., as amended or as
having such characteristics which shall subsequently be considered under RCRA
to constitute a hazardous waste; (iv) any substance containing petroleum, as
that term is defined in RCRA, or 40 C.F.R. Part 280 including without
limitation waste oil; (v) any toxic pollutant which is or may be listed as such
pursuant to the FWPCA; (vi) any hazardous air pollutant which is or may be
listed as such under the Clean Air Act, as codified at 42 U.S.C. Sections 7401,
<PAGE>

et seq., as amended; (vii) any imminently hazardous chemical substance or
mixture with respect to which action has been or may be taken pursuant to the
Toxic Substances Control Act, as codified at 15 U.S.C. Sections 2601, et seq.,
as amended; (ix) any asbestos, asbestos containing material or urea
formaldehyde or material which contains it; and (x) all other toxic materials,
pollutants, contaminants and hazardous substances and wastes regulated by any
federal or applicable state or local environmental law.

          Declarant agrees that Declarant, and its agents, employees and
contractors, shall use, handle, generate, transport, dispose and store any
Hazardous Materials used, handled, generated, transported, disposed or stored
at the Grantor Property and the Units by it or them, only in accordance with
all applicable requirements of Environmental Laws. In the event of any release
by Declarant, and its agents, employees or contractors, in, about, under or on
the Grantor Property and the Units, or any portion thereof, of any Hazardous
Materials, Declarant shall promptly take such remedial actions as may be
reasonably necessary to clean up the same in accordance with the requirements
of Environmental Laws. If any such release poses a risk of contaminating the
Grantor Property including a Unit or will materially interfere with the use of
the Grantor Property including a Unit, and Declarant fails to promptly take
such remedial actions as are required by the preceding sentence, the Company
shall have the right to enter upon the Grantor Property including a Unit in
order to perform such necessary clean up and remedial actions at the expense of
Declarant or the Owner, as applicable.

          5.18. NO THIRD PARTY BENEFICIARIES: The rights in favor of the
Company set forth in this Declaration shall be for the exclusive benefit of the
Company and any owner of the Grantee Property, it being the express intention
of Declarant that in no event shall such rights be conferred upon or for the
benefit of any party owning any legal or beneficial interest in any land other
than the Grantee Property.

          5.19. ESTOPPEL CERTIFICATE: Declarant hereby covenants that, upon
written request of the Company, it will issue within fifteen (15) business days
after such request is received an estoppel certificate stating: (i) whether to
its actual knowledge there is any default under the Declaration, specifying the
nature thereof; (ii) whether the Declaration has been assigned, modified or
amended in any way (and if it has, then stating the nature thereof); (iii) that
the Declaration as of that date is in full force and effect; and (iv) any other
information reasonably requested by the Company.
<PAGE>

            IN WITNESS WHEREOF, Declarant has executed this Declaration on
the day and year first above written.
                                         DECLARANT

                                         TRIMONT LAND HOLDINGS, INC.

                                         By:  /s/ Christopher P. Ryman
                                            -----------------------------------
                                             Christopher P. Ryman
                                             President

STATE OF NEW YORK                )
                                 )SS.:
COUNTY OF                        )

          On the day of September  , 2000 before me, the undersigned, personally
appeared Christopher P. Ryman, personally known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in
his/her capacity, and that by his/her signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.

                              -----------------------------------------------
                                                Notary Public

<PAGE>

                                   EXHIBIT K

                                 Deed of Trust
                                 -------------

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO

Name     Loeb & Loeb LLP
Street   345 Park Avenue
Address
City     New York
State    New York
Zip      10154
         Attention: Micheal Beck, Esp.
-------------------------------------------------------------------------------
                                       SPACE ABOVE THIS LINE FOR RECORDER'S USE

            ESSENTIAL SKI PROPERTY DEED OF TRUST, SECURITY AGREEMENT
                               AND FIXTURE FILING

                     (WITH ASSIGNMENT OF RENTS AND LEASES)

     This Essential Ski Property Deed of Trust, Security Agreement and Fixture
Filing (With Assignment of Rents and Leases) is made as of this 22nd day of
September, 2000, by TRIMONT LAND HOLDINGS, INC., a Delaware corporation
(hereinafter called "Trustor"), whose address is 1000 South Frontage Road West,
Suite 100, Vail, Colorado 81657 to PLACER TITLE COMPANY, a California
corporation, whose address is 555 Menlo Drive, Suite A, Rocklin, California
95765 (hereinafter called "Trustee"), for the benefit of TRIMONT LAND COMPANY,
a California corporation (hereinafter called "Beneficiary"), whose address is
1000 South Frontage Road West, Suite 100, Vail, Colorado 81657.

     WITNESSETH: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to
Trustee, its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH
RIGHT OF ENTRY AND POSSESSION all of Trustor's right, title and interest in and
to the following property (the "Trust Estate" or the "Real Property"):

     (a) all that certain real property now or hereafter acquired in Placer
County in the State of California, together with any fixtures now or hereafter
located thereon (the "Land"), which Land is more particularly hereinafter
described on Exhibit "A" annexed hereto;

     (b) all tenements, hereditaments, appurtenances, privileges, franchises
and other rights and interests now or in the future benefitting or otherwise
relating to the Land, including easements, rights-of-way, development rights,
mineral rights, water and water rights, pumps and pumping plants and all shares
of stock evidencing the same;

     (c) subject to the assignment to Beneficiary set forth in Paragraph 11
below, all rents, issues, income, revenues, royalties and profits now or in the
future payable with respect to or otherwise derived from the Trust Estate or
the ownership, use, management, operation, leasing or occupancy of the Trust
Estate, including those past due and unpaid (the "Rents"); and

     (d) all present and future right, title and interest of Trustor in and to
all claims, demands, awards, settlements and other payments arising or
resulting from or otherwise relating to any insurance (whether or not
<PAGE>

Beneficiary is named as a loss payee of such insurance) or any loss or
destruction of, injury or damage to, trespass on or taking, condemnation (or
conveyance in lieu of condemnation) or public use of any of the Real Property
(the "Intangibles").

     Trustor  further  grants  to  Trustee  and  Beneficiary,  pursuant  to the
California Uniform Commercial Code (as amended, the "UCC"), a security interest
in all present and future  right,  title and  interest of Trustor in and to all
Intangibles  and all of the Trust Estates  described  above in which a security
interest may be created under the UCC (collectively,  the "Personal Property").
This Deed of Trust constitutes a security  agreement under the UCC, conveying a
security interest in the Personal Property to Trustee and Beneficiary.  Trustee
and  Beneficiary  shall have,  in addition to all rights and remedies  provided
herein,  all the rights and  remedies  of a "secured  party"  under the UCC and
other applicable California law. Trustor covenants and agrees that this Deed of
Trust constitutes a fixture filing under the UCC.

     FOR THE PURPOSE OF SECURING the obligation of Trustor (A) to subdivide and
reconvey to Beneficiary or its nominee or designee the Essential Ski Property
(as hereinafter defined) pursuant to Section 9.2 of the Trimont Purchase
Agreement (as hereinafter defined) free and clear of all liens, deeds of trust,
judgments and encumbrances of any nature other than the Permitted Liens, and to
timely and fully perform all obligations under the Trimont Purchase Agreement
and all instruments and documents which relate to such obligation of Trustor to
so reconvey the Essential Ski Property (such obligation, the "ESP Reconveyance
Obligation") and (B) to subdivide and reconvey to Beneficiary or its nominee or
designee the Unit 7A Property (as defined in the Trimont Purchase Agreement)
pursuant to Section 10.13 of the Trimont Purchase Agreement free and clear of
all liens, deeds of trust, judgments and encumbrances of any nature other than
the Permitted Liens, and to timely and fully perform all obligations under the
Trimont Purchase Agreement and all instruments and documents which relate to
such obligation of Trustor to so reconvey the Unit 7A Property (such
obligation, the "Unit 7A Reconveyance Obligation").

     In the event that Trustor shall default in the performance of the ESP
Reconveyance Obligation and such default shall continue for thirty (30) days
after notice of such default or Trustor rejects such obligation, in bankruptcy
or otherwise, Trustor shall be obligated to pay, and Trustor hereby obligates
itself to pay, the total sum of Five Million Dollars ($5,000,000) ("ESP
Liquidated Damages") to Beneficiary as liquidated damages and not as a penalty,
and Trustor hereby agrees that this Deed of Trust does hereby also secure such
monetary obligation. TRUSTOR AND BENEFICIARY HEREBY ACKNOWLEDGE AND AGREE THAT
BENEFICIARY'S DAMAGES WOULD BE DIFFICULT OR IMPOSSIBLE TO DETERMINE OR
ESTIMATE, AND THE AMOUNT OF ESP LIQUIDATED DAMAGES IS (i) THE PARTIES BEST AND
MOST ACCURATE PRE-ESTIMATE OF THE DAMAGES BENEFICIARY WOULD SUFFER IN THE EVENT
TRUSTOR BREACHES THE ESP RECONVEYANCE OBLIGATION, AND (ii) IS REASONABLE UNDER
THE CIRCUMSTANCES EXISTING AS OF THE DATE OF THIS DEED OF TRUST.

     In the event that Trustor shall default in the performance of the Unit 7A
Reconveyance Obligation and such default shall continue for thirty (30) days
after notice of such default or Trustor rejects such obligation, in bankruptcy
or otherwise, Trustor shall be obligated to pay, and Trustor hereby obligates
itself to pay, the total sum of Ten Million Dollars ($10,000,000) ("Unit 7A
Liquidated Damages") to Beneficiary as liquidated damages and not as a penalty,
<PAGE>

and Trustor hereby agrees that this Deed of Trust does hereby also secure such
monetary obligation. TRUSTOR AND BENEFICIARY HEREBY ACKNOWLEDGE AND AGREE THAT
BENEFICIARY'S DAMAGES WOULD BE DIFFICULT OR IMPOSSIBLE TO DETERMINE OR
ESTIMATE, AND THE AMOUNT OF UNIT 7A LIQUIDATED DAMAGES IS (i) THE PARTIES BEST
AND MOST ACCURATE PRE-ESTIMATE OF THE DAMAGES BENEFICIARY WOULD SUFFER IN THE
EVENT TRUSTOR BREACHES THE UNIT 7A RECONVEYANCE OBLIGATION, AND (ii) IS
REASONABLE UNDER THE CIRCUMSTANCES EXISTING AS OF THE DATE OF THIS DEED OF
TRUST.

     ESP LIQUIDATED DAMAGES AND UNIT 7A LIQUIDATED DAMAGES ARE SEPARATE AND
CUMULATIVE REMEDIES. IF AN EVENT OF DEFAULT SHALL EXIST, OTHER THAN BY REASON
OF TRUSTOR'S BREACH OF THE ESP RECONVEYANCE OBLIGATION OR THE UNIT 7A
RECONVEYANCE OBLIGATION, THEN TRUSTOR SHALL BE DEEMED TO HAVE BREACHED, BEYOND
ANY APPLICABLE NOTICE AND CURE PERIODS, THE ESP RECONVEYANCE OBLIGATION AND THE
UNIT 7A RECONVEYANCE OBLIGATION.

     "Essential Ski Property" shall have the meaning given to such term in the
Operating Agreement.

     "Permitted Liens" shall mean the following: (i) the lien for local real
estate taxes and assessments not yet due or payable; (ii) the Conditions of
Title (as such term is defined in the Trimont Purchase Agreement); and (iii)
other liens (other than deeds of trust and mortgages, which deeds of trust and
mortgages Trustor agrees will be discharged by it at the time Trustor performs
the ESP Reconveyance Obligation or the Unit 7A Reconveyance Obligation, as the
case may be), if the Title Company insures Beneficiary or its nominee or
designee against the collection of same from the Real Property.

     "Trimont Purchase Agreement" shall mean the Agreement for Purchase and
Sale of Real Property dated as of the date hereof between Trimont Land Company,
as Seller, and Trimont Land Holdings, Inc., as Buyer, as the same may be
amended or otherwise modified from time to time.

     Each  person or entity  hereafter  holding a deed of trust  upon the Trust
Estate encumbered hereby, by its acceptance of such deed of trust, acknowledges
that Trustor has the ESP  Reconveyance  Obligation and the Unit 7A Reconveyance
Obligation and agrees that upon Trustor's  performance of the ESP  Reconveyance
Obligation  or the Unit 7A  Reconveyance  Obligation,  as the case may be,  the
portion of the Trust  Estate so  reconveyed  to  Beneficiary  or its nominee or
designee shall be deemed released from the deed of trust held by such person or
entity,  and within ten (10) days after  request,  such person or entity  shall
deliver such instruments  confirming the foregoing as Trustor or Beneficiary or
its nominee or designee shall reasonably request.

     TO PROTECT AND MAINTAIN THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
AGREES:
<PAGE>

     (1) To pay, perform, observe and discharge each and every condition,
obligation, covenant and agreement for which this Deed of Trust has been given
as security as provided above.

     (2) To the extent required by the Operating Agreement (as hereinafter
defined and consistent with the plans for development set forth in the
Operating Agreement), to keep the Trust Estate in good condition and repair; to
complete in good and workmanlike manner any improvement which may be
constructed thereon and to pay when due all claims for labor performed and
materials furnished therefor; to comply with all laws affecting the Trust
Estate or requiring any improvements to be made thereon; not to commit or
permit waste thereof; not to commit, suffer or permit any act upon the Trust
Estate in violation of law; and to do all acts which from the character or use
of the Real Property may be reasonably necessary, the specific enumerations
herein not excluding the general. "Operating Agreement" shall mean the
Operating Agreement of Northstar Mountain Properties, LLC, a Delaware limited
liability company, of even date herewith between Trimont Land Holdings, Inc., a
Delaware limited liability company, and East West Resort Development V, L.P.,
L.L.L.P., a Delaware limited liability limited partnership, as the same may be
amended or otherwise modified from time to time.

     (3) Trustor shall carry such public liability insurance as Beneficiary may
reasonably require. Trustor shall maintain all required insurance with
companies and in amounts, coverages, deductibles, and forms reasonably
satisfactory to Beneficiary. Neither Beneficiary nor Trustee, by reason of
accepting, rejecting, approving or obtaining insurance, shall incur any
liability for (i) the existence, nonexistence, form or legal sufficiency
thereof, (ii) the solvency or insolvency of any insurer, or (iii) the payment
of losses. All liability insurance policies shall name Beneficiary as an
additional insured, and shall provide that they cannot be terminated as to
Beneficiary except upon thirty (30) days' prior written notice to Beneficiary.
Trustor shall deliver to Beneficiary certificates, together with receipts
satisfactory to Beneficiary, evidencing payment of the premiums therefor.
Should Trustor fail to insure or fail to pay the premiums on any required
insurance, or fail to deliver the policies or renewals of them as provided
above, Beneficiary may (but is not obligated to) have the insurance issued or
renewed (and pay the premiums on it for the account of Trustor) in amounts and
with companies and at premiums as Beneficiary deems appropriate. If Beneficiary
elects to have insurance issued or renewed to insure Beneficiary's interest,
Beneficiary shall have no obligation to also insure Trustor's interest or to
notify Trustor of Beneficiary's actions. All sums advanced by Beneficiary to
pay premiums on insurance policies which Trustor is required to maintain
hereunder shall be due and payable by Trustor to Beneficiary upon demand, and
failing prompt reimbursement, shall be added to the indebtedness secured by
this Deed of Trust and earn interest at the Involuntary Rate until paid in
full. "Involuntary Rate" shall mean the Prime Lending Rate plus four (4%)
percent, but in no event in excess of the highest rate allowed by law. "Prime
Lending Rate" shall mean the floating rate of interest per annum published in
the Wall Street Journal, Eastern Edition (or in any similar financial
periodical as Beneficiary may choose in the event that the Wall Street Journal
ceases to publish a "Prime Rate") from time to time as being the "Prime Rate"
of interest. Any change in the interest rate resulting from a change in the
Prime Lending Rate shall become effective as of the date on which such Prime
Lending Rate changes.
<PAGE>

     (4) To appear in and defend any action or proceeding purporting to affect
the security hereof or the rights or powers of Beneficiary or Trustee; and to
pay all costs and expenses, including cost of evidence of title and attorneys'
fees in a reasonable sum, in any such action or proceeding in which Beneficiary
or Trustee may appear, and in any suit brought by Beneficiary to foreclose this
Deed of Trust.

     (5) To pay and discharge, at least ten days prior to delinquency, all
taxes of every kind and nature, including real and personal property taxes and
income, franchise, withholding, profits and gross receipts taxes, all general
and special assessments, including assessments on appurtenant water stock,
levies, permits, inspection and license fees, all water and sewer rents and
charges, and all other public charges whether of a like or different nature,
imposed upon or assessed against Trustor or the Trust Estate or any part
thereof, or upon the revenues, rents, issues, income and profits thereof or
upon this Deed of Trust or the indebtedness now or hereafter secured hereby;
when due, all encumbrances, charges and liens, with interest, on the Trust
Estate or any part thereof, which are prior or superior hereto or subject or
subordinate hereto; all costs, fees and expenses of this Trust.

     To promptly and completely  observe,  perform and discharge each and every
condition,  obligation,  covenant and  agreement  affecting  the Trust  Estate,
whether  the same is prior and  superior  or subject  and  subordinate  hereto,
including,  without  limitation,  all obligations of Trustor under the Easement
Agreement.  "Easement  Agreement" shall mean that certain Easement Agreement of
even date  herewith by and between  Trimont  Land  Holdings,  Inc.,  a Delaware
corporation, as grantor, and Trimont Land Company, a California corporation, as
grantee, as the same may be amended or otherwise modified from time to time.

     Should  Trustor  fail  to make  any  payment  or to do any  act as  herein
provided,  then Beneficiary and/or Trustee, but without obligation so to do and
after  reasonable  notice to and demand  upon  Trustor  and  without  releasing
Trustor from any obligation hereof, may: make or do the same in such manner and
to such extent as either may reasonably  deem necessary to protect the security
hereof,  Beneficiary  and/or  Trustee  being  authorized to enter upon the Real
Property  for such  purposes;  appear in and defend  any  action or  proceeding
purporting to affect the security hereof or the rights or powers of Beneficiary
or Trustee;  pay,  purchase,  contest or compromise any encumbrance,  charge or
lien which in the  judgment of either  appears to be prior or superior  hereto;
and, in exercising any such powers, pay necessary expenses,  employ counsel and
pay reasonable attorneys' fees and costs in connection therewith.

     (6) To pay immediately and without demand all sums so expended by
Beneficiary or Trustee, with interest from date of expenditure until paid in
full by Trustor at the Involuntary Rate, which sums shall be secured by this
Deed of Trust to the same extent and with the same priority as the obligations
hereby secured, and such sums shall be deemed mandatory advances required for
the preservation and protection of the lien of this Deed of Trust and Trustee's
and Beneficiary's rights hereunder.

     (7) Subject to the Easement Agreement, that any award of damages in
connection with any condemnation for public use of or injury to the Real
Property or any part thereof is hereby assigned and shall be paid to
Beneficiary who may apply or release such moneys received by it in the same
<PAGE>

manner and with the same effect as above provided for disposition of proceeds
of fire or other insurance. Notwithstanding the fact that the security given
hereby may not be impaired by a partial condemnation, Beneficiary, in its sole
and absolute discretion, shall have the right, subject to the Easement
Agreement, to apply all compensation, award or other payments or relief
therefor made on account thereof to the obligations secured hereby or
reimbursement of Trustor for expenses incurred by it in the restoration of the
Real Property, and in respect thereto, Trustor hereby waives the benefit of any
statute or rule of law which may be contrary thereto.

     (8) That by accepting the payment, performance or observance of any
condition, obligation, covenant or agreement contained herein after the date to
be paid, performed or observed as provided hereunder, Beneficiary does not
waive its right either to require prompt payment, performance or observance
when due of all other conditions, obligations, covenants or agreements
contained herein or to declare a default for failure so to do.

     (9) That at any time or from time to time, without liability therefor and
without notice, upon written request of Beneficiary and presentation of this
Deed of Trust, and without affecting the personal liability of any person for
payment of the indebtedness secured hereby, Trustee may: reconvey any part of
the Trust Estate to Trustor; consent to the making of any map or plat thereof
by Trustor; join in granting any easement thereon; join in the execution of or
subordination of the lien or charge hereof to any covenants, conditions or
restrictions affecting said property; or join in any extension agreement or any
agreement subordinating the lien or charge hereof.

     (10) That upon written request of Beneficiary stating that all sums and
obligations secured hereby have been paid and performed, and upon surrender of
this Deed of Trust to Trustee for cancellation and retention, and upon payment
by Trustor of its fees, Trustee shall reconvey, without warranty, the Trust
Estate then held hereunder. The recitals in such reconveyance of any matters or
facts shall be conclusive proof of the truthfulness thereof. The grantee in
such reconveyance may be described as "the person or persons legally entitled
thereto."

     (11) That Trustor absolutely and unconditionally hereby assigns,
transfers, conveys and sets over to Beneficiary all leases and the Rents;
provided, however, prior to the earlier of any default hereunder which
continues beyond any applicable notice and cure periods, Trustor shall have the
right, as the agent and fiduciary representative of Beneficiary for collection
and distribution purposes only, to collect and receive the Rents as they become
due and payable to be applied by Trustor to the payment of all sums then due
and payable under this Deed of Trust and other expenses of owning and operating
the Real Property and, thereafter, so long as no default (which has continued
beyond any applicable notice and cure periods) as aforesaid has occurred, the
balance may be distributed to the account of Trustor. Upon any such default
(which has continued beyond any applicable notice and cure periods),
Beneficiary may at any time without notice, either in person, by agent or by a
receiver to be appointed by a court, and without regard to the adequacy of any
security for the indebtedness hereby secured, enter upon and take possession of
the Real Property or any part thereof, in its own name or in the name of
<PAGE>

Trustor, sue for or otherwise collect the Rents, including those past due and
unpaid, and apply the same, less costs and expenses of operation and
collection, including reasonable attorneys' fees and expenses, to the payment
of all sums payable under this Deed of Trust and other expenses of owning and
operating the Real Property and in such order as Beneficiary may determine. The
entering upon and taking possession of the Real Property, the collection of the
Rents and the application thereof as aforesaid shall not cure or waive any
default or notice of default hereunder or invalidate any act done pursuant to
such notice.

     Except  as may  expressly  be  permitted  under the  Operating  Agreement,
Trustor  agrees that it will not (a) execute any further  assignment  of any of
its right,  title and  interest  in the Rents;  (b) accept  prepayments  of any
installments  of Rents to become due under any leases or rental  agreements  in
excess of one (1) month except prepayments in the nature of security;  (c) with
respect  to any  lease or  rental  agreement  having a term of two (2) years or
more,  Trustor  will not  terminate,  amend or modify  any such lease or rental
agreement without the prior written consent of Beneficiary, which consent shall
not be  unreasonably  withheld;  or (d) accept a surrender of any such lease or
rental agreement.

     (12) Trustor hereby represents, warrants and covenants that:

          Except as may be customary and incidental to the maintenance of the
Real Property and then only to the extent lawful, the Real Property which is
the subject of this Deed of Trust will not in the future be used by Trustor in
connection with the disposal of or to refine, generate, manufacture, produce,
store, handle, treat, transfer, release, process or transport flammable
explosives, radioactive materials, asbestos, PCB, hazardous wastes, toxic
substances or related materials, including, without limitation, any substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," or "toxic substances" under any Hazardous
Materials Laws (defined below) (collectively, "Hazardous Materials"), and
Trustor will not at any time use the Real Property for the disposal, refining,
generating, manufacturing, producing, storing, handling, treating,
transferring, releasing, processing or transporting of any Hazardous Materials.

     Trustor shall, and shall cause all tenants, employees, agents, contractors
and subcontractors of Trustor and any other persons present on or occupying the
Real Property to, comply, in all material respects, with Hazardous Materials
Laws (as such term is hereinafter defined).

     Trustor shall  promptly  advise  Beneficiary  in writing of: (a) a notice,
summons, citation,  directive,  letter or other communication,  written or oral
(collectively,  "Notice")  (whether  such Notices are received  from the United
States  Environmental  Protection Agency ("EPA"),  the Occupational  Safety and
Health  Agency,  the  Department  of Health  Services,  the State Water Quality
Control Board, the Department of Sanitation,  the Department of Public Works or
any  other  federal,  state or local  governmental  agency or  regional  office
thereof) of violation or potential  violation  which are received by Trustor of
any applicable federal, state or local laws, ordinances or regulations relating
to any  Hazardous  Materials,  including but not limited to CERCLA,  RCRA,  the
Hazardous Materials  Transportation Act, the Hazardous  Substances Account Act,
the  Hazardous  Substances  Act,  the  Occupational  Health and Safety Act, the
Porter-Cologne  Water Quality  Control Act, the Solid Waste  Management  Act of
1980,  the Toxic Pit Cleanup Act,  the  Underground  Tank Act of 1984,  and the
California Water Quality  Improvement Act (collectively,  "Hazardous  Materials
Laws"); (b) any and all enforcement,  cleanup, removal or other governmental or
regulatory  actions  instituted,   completed  or  threatened  pursuant  to  any
Hazardous Materials Laws; (c) all claims made or threatened
<PAGE>

by any third  party  against  Trustor or the Trust  Estate  relating to damage,
contribution,  cost recovery  compensation,  loss or injury  resulting from any
Hazardous  Materials  (the  matters set forth in clauses (a), (b) and (c) above
are collectively  referred to herein as "Hazardous Materials Claims");  and (d)
Trustor's  discovery  of any  occurrence  or  condition  on any  real  property
adjoining  or in the vicinity of the Real  Property  that could  reasonably  be
expected to cause the Real  Property or any part  thereof to be  classified  as
"border-zone  property"  under the  provisions of California  Health and Safety
Code,  Sections  25220  et  seq.,  or  any  regulation  adopted  in  accordance
therewith,  or to be otherwise  subject to any  restrictions  on the ownership,
occupancy,  transferability  or use of the Real  Property  under any  Hazardous
Materials Laws. "CERCLA" shall mean the Comprehensive  Environmental  Response,
Compensation and Liability Act of 1980, as amended, set forth at 42 U.S.C. 9601
et seq. ("RCRA") shall mean the Resource Conservation and Recovery Act of 1986,
as amended, set forth at 42 U.S.C. 6901 et seq.

     Beneficiary  shall have the  right,  but not the  obligation,  to join and
participate  in as a party if it so elects,  any legal  proceedings  or actions
initiated in  connection  with any Hazardous  Materials  Claims and to have its
reasonable  attorneys' and  consultants'  fees in connection  therewith paid by
Trustor upon demand.

     Trustor  shall be solely  responsible  for, and shall  indemnify  and hold
harmless Beneficiary,  its directors,  officers,  employees, agents, successors
and  assigns,  from and against any loss,  damage,  cost,  expense or liability
directly or indirectly  arising out of or attributable to the use,  generation,
storage,  release,  threatened  release,  discharge,  disposal  or  presence of
Hazardous Materials on, under or about the Real Property (but in each case only
to the extent the Hazardous  Materials were  unlawfully  introduced to the Real
Property or unlawfully handled by Trustor or any employees,  agents, contractor
or subcontractors of Trustor,  or any third persons (other than Beneficiary) at
any time  hereafter  occupying  or  present on the Real  Property),  including,
without limitation: (a) all foreseeable and unforeseeable consequential damages
including  third  party  claims;  (b) the costs of any  required  or  necessary
repair, cleanup or detoxification of the Real Property,  including the soil and
groundwater  thereof,  and the preparation and  implementation  of any closure,
remedial  or other  required  plans;  (c)  unauthorized  damage to any  natural
resources; and (d) all reasonable costs and expenses incurred by Beneficiary in
connection  with  clauses  (a),  (b) and (c),  including,  but not  limited to,
reasonable attorneys' and consultants' fees.

     Any  costs or  expenses  incurred  by  Beneficiary  for which  Trustor  is
responsible or for which Trustor has indemnified  Beneficiary  shall be paid to
Beneficiary on demand, and failing prompt reimbursement,  shall be added to the
indebtedness secured by this Deed of Trust and earn interest at the Involuntary
Rate until paid in full.

     Trustor shall not undertake any cleanup, containment, restoration, removal
or other  remedial  work  (collectively,  "Remedial  Work") in  response to the
presence  of any  Hazardous  Materials  on,  under or about  the Real  Property
without prior  written  notice to  Beneficiary  of the scope and nature of such
Remedial  Work;  provided,  however,  that prior  written  notice  shall not be
necessary in the event that the presence of  Hazardous  Materials  on, under or
about the Real Property either poses an immediate threat to the health,  safety
or welfare of any individual or is of such a nature that an immediate  remedial
response  is  necessary  and it is not  possible to notify  Beneficiary  before
taking such action. In such event,  Trustor shall notify Beneficiary as soon as
practicable of any action so taken.  Trustor shall not,  without  Beneficiary's
<PAGE>

prior written consent, which shall not be unreasonably withheld, enter into any
settlement  agreement,  consent  decree or other  compromise  in respect to any
Hazardous Material Claims.

     In the event any  investigation  or  monitoring  of conditions on the Real
Property  or any  Remedial  Work is  required  under any  applicable  Hazardous
Materials Laws, by any judicial order, by any governmental  entity, or in order
to comply with any  agreements  affecting  the Real  Property  because of or in
connection with any Hazardous  Material Claims,  Trustor shall perform or cause
to be performed the Remedial Work in compliance  with such  Hazardous  Material
Laws  or  agreement.  All  Remedial  Work  shall  be  performed  by one or more
contractors,  selected  by  Trustor  and  approved  in  advance  in  writing by
Beneficiary,  and under the supervision of a consulting  engineer,  selected by
Trustor  and  approved  in  writing by  Beneficiary,  such  approval  not to be
unreasonably  withheld.  All costs and expenses of such  Remedial Work shall be
paid by Trustor, including, without limitation, the charges of such contractors
and/or the consulting engineer,  and Beneficiary's  reasonable  attorneys' fees
and costs  incurred in connection  with  monitoring or reviewing  such Remedial
Work.  In the  event  Trustor  shall  fail to  timely  commence  or cause to be
commenced,  or fail to diligently prosecute to completion,  such Remedial Work,
Beneficiary  may, but shall not be required to, cause such  Remedial Work to be
performed,  and all costs and  expenses  thereof  shall be due and payable upon
demand therefor by Trustor.

     If Beneficiary  has reasonable  cause to believe that Hazardous  Materials
have  migrated  onto the Real  Property  or have  otherwise  come onto the Real
Property in violation  of the terms of this Deed of Trust and without  fault by
Beneficiary  or there has been a default by Trustor  hereunder  with respect to
Hazardous Materials,  then, at Beneficiary's request,  Trustor shall retain, at
Trustor's sole cost and expense, a licensed geologist,  industrial hygienist or
an  environmental  consultant (a  "Consultant")  acceptable to  Beneficiary  to
conduct an environmental  site assessment of the Real Property for the presence
of Hazardous Materials  ("Environmental  Audit"). The Environmental Audit shall
be  performed  in a manner  reasonably  calculated  to discover the presence of
Hazardous Materials  contamination.  The Consultant shall concurrently  deliver
the results of its investigation in writing directly to Trustor and Beneficiary
without prior  consultation  with either party unless conducted in the presence
of the other party.

     If Trustor fails to pay for or obtain an  Environmental  Audit as provided
for  herein,  Beneficiary  may,  but  shall not be  obligated  to,  obtain  the
Environmental  Audit, and either demand  reimbursement  from Trustor or add the
cost thereof to the  indebtedness  secured by this Deed of Trust, in which case
interest shall accrue on such sum at the Involuntary Rate. Furthermore, Trustor
hereby grants Beneficiary,  its employees and agents the right,  exercisable at
any time and at  Beneficiary's  sole cost and  expense,  to enter upon the Real
Property for the purpose of conducting an  inspection,  sampling and testing to
determine whether there have been any violations of the covenants  contained in
this  Paragraph  12,  and,  with  respect  to any such  entry  by  Beneficiary,
Beneficiary  shall have liability  insurance in place in the amount of not less
than $5,000,000 and Trustor shall be named as an additional insured thereon and
Trustor's  casualty  policy(ies) shall contain a waiver of subrogation in favor
of Beneficiary.

     (13) Trustor agrees to indemnify, defend and hold harmless Trustee and
Beneficiary from and against any and all losses, liabilities, suits,
<PAGE>

obligations, fines, damages, judgments, penalties, claims, charges, costs and
expenses (including reasonable attorneys' fees and disbursements) which may be
imposed on, incurred or paid by or asserted against Trustee and/or Beneficiary
by reason or on account of, or in connection with (a) any willful misconduct of
Trustor or any default or event of default by Trustor hereunder; (b) Trustee's
and/or Beneficiary's good faith and commercially reasonable exercise of any of
their rights and remedies, or the performance of any of their duties hereunder
; (c) Trustor's failure to perform or comply with any of the covenants set
forth in Paragraph 12 above; (d) the construction, reconstruction or alteration
of the Real Property; (e) any negligence of Trustor, or any negligence or
willful misconduct of any lessee of the Real Property or any portion thereof,
or any of their respective agents, contractors, employees, licensees or
invitees; or (f) any accidents, injury, death or damage to any person or
property occurring in, on or about the Real Property or any street, drive,
sidewalk, curb or passageway adjacent thereto; except to the extent of the
willful misconduct or gross negligence of Beneficiary or Trustee. Upon demand
by Trustee and/or Beneficiary, Trustor shall defend any action or proceeding
brought against Trustee and/or Beneficiary arising out of or alleging any claim
or cause of action covered by this indemnity, all at Trustor's own cost and by
counsel to be approved by Beneficiary in the exercise of its reasonable
judgment. The provisions of this Paragraph 13 shall survive the foreclosure or
the delivery of a deed in lieu of foreclosure of this Deed of Trust or the
payment in full of the indebtedness secured hereby and the termination and
reconveyance of this Deed of Trust, as the case may be.

     Any amount  payable to Trustee or Beneficiary  under  Paragraph 12 or this
Paragraph 13 shall be due and payable  immediately  after  demand  therefor and
receipt by Trustor of a statement setting forth in reasonable detail the amount
claimed and the basis  therefor,  and such amounts  shall bear  interest at the
Involuntary  Rate beginning ten (10) days after the date of demand,  until paid
in full by Trustor.

     (14) That upon default by Trustor in payment of any indebtedness secured
hereby or upon default in performance, beyond any applicable notice and cure
period, of any agreement hereunder, Beneficiary may, if such default is
continuing, take any of the following actions or pursue any right or remedy
permitted under applicable law (without limiting, impairing or otherwise
affecting its other rights and remedies): declare all sums secured hereby
immediately due and payable by delivery to Trustee of a written declaration of
default and demand for sale and of written notice of default and of election to
cause to be sold the Real Property, which notice Trustee shall cause to be
filed for record. Beneficiary also shall deposit with Trustee this Deed of
Trust and all documents evidencing expenditures secured hereby.

     If any event of default shall be continuing, then, after the lapse of such
time as may then be required by law following the recordation of said notice of
default,  and notice of the sale  having  been given as then  required  by law,
Trustee,  without  demand on Trustor,  shall sell the Real Property at the time
and place fixed by it in said notice of sale,  either as a whole or in separate
parcels,  and in such  order as it may  determine,  at  public  auction  to the
highest bidder for cash in lawful money of the United  States,  payable at time
of sale.  Trustee may postpone sale of all or any portion of said Real Property
by public  announcement  at such time and place of sale,  and from time to time
thereafter may postpone such sale by public  announcement  at the time fixed by
the preceding  postponement.  Trustee shall deliver to such  purchaser its deed
conveying  the Real  Property so sold,  but without any  covenant or  warranty,
express or implied.  The recitals in such deed of any matters or facts shall be
<PAGE>

conclusive proof of the truthfulness  thereof.  Any person,  including Trustor,
Trustee or Beneficiary, may purchase at such sale.

     After deducting all costs, fees and expenses of Trustee and of this Trust,
including  cost of evidence of title in  connection  with sale,  Trustee  shall
apply the  proceeds  of sale to payment of: all sums  expended  under the terms
hereof,  not then repaid,  with accrued  interest at the Involuntary  Rate; all
other sums then secured hereby (whether or not then due); and the remainder, if
any, to the person or persons legally entitled thereto.

     (15) Following recordation of a notice of default, Beneficiary and
prospective bidders at any foreclosure sale shall have the right to enter and
inspect said Real Property at reasonable times and upon reasonable notice to
Trustor. Trustor shall, promptly following the recordation of a notice of
default, but in any event prior to the date of sale set in the notice of sale,
disclose to Beneficiary in writing all material facts regarding said Real
Property.

     Trustor  hereby waives any claims against  Beneficiary or Trustee  arising
out of or in connection with any disclosures regarding said Real Property which
may be made by Beneficiary or Trustee to prospective bidders at or prior to the
foreclosure  sale.  All costs,  fees and expenses  incurred by  Beneficiary  or
Trustee in connection with such inspections and disclosures shall be payable by
Trustor  upon demand  therefor,  and such  amounts  shall bear  interest at the
Involuntary  Rate  from  the date  paid by  Beneficiary  until  paid in full by
Trustor, and if not so paid shall be added to the amount secured hereby.

     (16) That if the Trustor, or any subsequent owner of the Real Property
covered hereby, shall occupy said property, or any part thereof, after any
default in payment of any amount secured by this Deed of Trust, Trustor, or
such owner, shall pay to Beneficiary in advance on the first day of each month
a reasonable rental for the premises so occupied, and upon failure to pay such
reasonable rental, Trustor, or such owner, may be removed from said premises by
summary dispossess proceedings or by any other appropriate action or
proceeding.

     (17) Trustor hereby represents and warrants: (a) that it is and will be
the lawful owner of all of the Trust Estate free of all claims, liens or
encumbrances whatsoever, other than the security interests granted pursuant
hereto, the Easement Agreement and such other matters as are allowed under the
Operating Agreement or as may be approved in writing by Beneficiary in
Beneficiary's sole and absolute discretion; (b) all information, including, but
not limited to, financial statements furnished by Trustor to Beneficiary
heretofore or hereafter, whether oral or written, is and will be correct and
true in all material respects as of the date given; and (c) if Trustor is a
business entity, the execution, delivery and performance hereof are within its
powers and have been duly authorized.

     Trustor shall execute such financing statements and other documents and do
such other acts and things, all as Beneficiary may from time to time reasonably
require,  to establish and maintain the security  interest created by this Deed
of Trust.

     (18) Beneficiary, acting alone, may from time to time, by instrument in
writing, substitute a successor or successors to any Trustee named herein or
acting hereunder, which instrument, executed and acknowledged by each and
<PAGE>

recorded in the office of the recorder of the county or counties where said
property is situated, shall be conclusive proof of proper substitution of such
successor Trustee or Trustees, who shall, without conveyance from the Trustee
predecessor, succeed to all its title, estate, rights, powers and duties. Said
instrument must contain the name of the original Trustor, Trustee and
Beneficiary hereunder, the book and page or document number where this Deed of
Trust is recorded, and the name and address of the new Trustee. If notice of
default shall have been recorded, this power of substitution cannot be
exercised until after the costs, fees and expenses of the then acting Trustee
shall have been paid to such Trustee, who shall endorse receipt thereof upon
such instrument of substitution.

     (19) If requested, Trustor shall furnish to Beneficiary and/or Trustee the
reports and other financial information required to be provided by the
Operating Agreement, subject to Beneficiary and/or Trustee, as the case may be,
executing and delivering to Trustor a confidentiality agreement reasonably
acceptable to Trustor; provided, however, that this provision shall not limit
or be applicable to Beneficiary's right, if any, to receive such information
pursuant to the Operating Agreement.

     (20) That the pleading of any statute of limitations as a defense to any
and all obligations secured by this Deed of Trust is hereby waived to the full
extent permissible by law.

     (21) That this Deed of Trust applies to, inures to the benefit of, and
binds all parties hereto, their heirs, legatees, devisees, administrators,
executors, successors and assigns. The term Beneficiary shall mean the owner
and holder, including pledgees, of the obligations secured hereby, whether or
not named as Beneficiary herein. In this Deed of Trust, whenever the context so
requires, the masculine gender includes the feminine and neuter, and the
singular number includes the plural.

     (22) Subject to the proposed recipient's delivery of a confidentiality
agreement reasonably acceptable to Trustor, Trustor agrees that Beneficiary may
provide to Beneficiary's parent, affiliate, subsidiary, participants, lenders,
members or service providers or others, without further notice to Trustor, any
financial or other information, data or material in Beneficiary's possession
relating to Trustor, this Deed of Trust, or the Real Property.

     (23) That Trustee accepts this Trust when this Deed of Trust, duly
executed and acknowledged, is made a public record as provided by law. Trustee
is not obligated to notify any party hereto of pending sale under any other
deed of trust or of any action or proceeding in which Trustor, Beneficiary or
Trustee shall be a party unless brought by Trustee.

     (24) [Intentionally Deleted]

     (25) Except in connection with a release pursuant to Paragraph 33 hereof
or any other Permitted Transfer (as hereinafter defined) that should Trustor
sell, convey, transfer, dispose of or further encumber the Trust Estate or any
part thereof or any interest therein, or enter into a lease covering all or any
portion thereof or an undivided interest therein, either voluntarily,
involuntarily or otherwise, without the prior written consent of Beneficiary
being first had and obtained, then Beneficiary may, at its option, declare all
sums secured hereby immediately due and payable. Consent to one such
transaction shall not be deemed to be a waiver of the right to require such
consent to future or successive transactions. "Permitted Transfer" shall mean
<PAGE>

creation of any lease or the granting of any easement which (a) is commercially
reasonable, (b) has been entered into or granted in the ordinary course of
Trustor's business and (c) is subject and subordinate to this Deed of Trust.

     (26) Should any of the following occur (each, an "Event of Default"), then
Beneficiary may, at its option, declare all sums secured hereby immediately due
and payable unless Beneficiary shall have given its prior written consent
thereto:

          (a) failure of Trustor to pay for a period of ninety (90) days after
written notice to Trustor, any payment required hereunder or under any
instrument or document related hereto; or

          (b) if any of Trustor's representations or warranties contained
herein or in any instrument or document related hereto shall be untrue or
incorrect in any material respect at the time made, or if any such warranty or
representation intended to be a continuing one shall become untrue or incorrect
in any material respect and, in either case, Trustor shall fail to remedy such
situation within thirty (30) days after notice from Beneficiary (or immediately
upon notice in case of emergency); or

          (c) if Trustor shall commence a voluntary case concerning itself
under Title 11 of the United States Code entitled "Bankruptcy" as now or
hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or an
involuntary case is commenced against Trustor and the petition is not dismissed
within ninety (90) days after commencement of the case; or a custodian (as
defined in the Bankruptcy Code) is appointed for, or takes charge of, all or
any substantial part of the property of Trustor; or Trustor commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Trustor or there is
commenced against Trustor any such proceeding which remains undismissed for a
period of ninety (90) days; or Trustor is adjudicated insolvent or bankrupt; or
any order of relief or other order approving any such case or proceeding is
entered; or Trustor suffers any appointment of any custodian or the like for it
or any substantial part of its property to continue undischarged or unstayed
for a period of ninety (90) days; or Trustor makes a general assignment for the
benefit of creditors; or Trustor shall fail to pay, or shall state that it is
unable to pay, or shall be unable to pay, its debts generally as they become
due; or Trustor shall call a meeting of its creditors with a view to arranging
a composition or adjustment of its debts; or

          (d) if any execution, warrant, attachment, garnishment or other
similar processes shall be levied or filed against the Trust Estate or any part
thereof, or against Trustor which involve claims aggregating more than $100,000
and such processes shall not be stayed, vacated or discharged, such as by
bonding, within ninety (90) days after the same shall have been levied or
filed; or

          (e) if Trustor shall fail to perform or observe, or cause to be
performed or observed, the ESP Reconveyance Obligation, the Unit 7A
Reconveyance Obligation or any term, obligation, covenant, condition or
agreement contained in this Deed of Trust or any instrument or document related
thereto, or in any assignment of leases and rents or in any other instrument
executed concurrently herewith by Trustor or supplemental hereto, pertaining to
<PAGE>

the debt secured hereby or the security therefor, or under any supplement,
modification or extension of any of the foregoing, on its part to be performed,
and such failure shall have continued for a period of thirty (30) days after
notice thereof; provided, however, if such default shall not have been
occasioned by any willful act of Trustor, and if such default cannot with due
diligence be cured within such thirty (30) day period, the time within which to
cure the same shall be extended for such period as may be necessary to cure the
same with due diligence if Trustor commences within such thirty (30) days and
proceeds diligently to cure the same; or

          (f) if there should occur a default which is not cured within the
applicable grace period, if any, under any other deed of trust or other
mortgage of all or part of the Trust Estate (including a deed of trust or other
mortgage held by Beneficiary), regardless of whether such deed of trust or
other mortgage is superior, subordinate or collateral to this Deed of Trust, it
being further agreed by Trustor that this provision shall not be construed as
Beneficiary's consent to any such deed of trust or other mortgage; or

          (g) if there should occur a "Material Manager Breach" (as such term
is defined in the Operating Agreement) which remains uncured for a period of
thirty (30) days.

     (27) That in the event of the passage after the date hereof of any law
deducting from the value of real property, for taxation purposes, any lien
thereon or changing in any way the laws now in force for the taxation of deeds
of trust or debts whether or not secured thereby for federal, state or local
purposes or the manner of the collection of any such taxes so as to affect this
Deed of Trust or the obligations hereby secured, Trustor agrees to pay any
thereof, and, if Trustor fails to so do or if it would be illegal for Trustor
so to do, then the whole of the sum secured by this Deed of Trust, together
with accrued interest thereon shall, at the option of Beneficiary, without
demand or notice, immediately become due and payable.

     (28) To the fullest extent permitted by law, Trustor hereby waives the
provisions of Section 431.70 of the California Code of Civil Procedure and all
amendments thereto.

     (29) That no remedy herein conferred upon or reserved to Trustee or
Beneficiary is intended to be exclusive of any other remedy herein or by law
provided, but each shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute. No delay or omission of Trustee or Beneficiary in the exercising of
any right or power accruing upon any event of default hereunder shall impair
such right or power or any other right or power nor shall the same be construed
to be a waiver of any default or any acquiescence therein; and every power and
remedy given by this Deed of Trust to Trustee or Beneficiary may be exercised
from time to time as often as may be deemed expedient by Trustee or
Beneficiary. If there exists additional security for the obligations secured
hereby, Beneficiary, at its sole option, and without limiting or affecting any
of the rights or remedies hereunder, may exercise any of the rights or remedies
to which it may be entitled hereunder either concurrently with whatever rights
it may have in connection with such other security or in such order and in such
manner as Beneficiary may deem fit without waiving any rights with respect to
any other security. The granting of consent by Beneficiary to any transaction
as required by the terms hereunder shall not be deemed a waiver of the right to
secure the consent of Beneficiary to future or successive transactions.
<PAGE>

     (30) That in the event any one or more of the provisions contained in this
Deed of Trust shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Deed of Trust, but this Deed of
Trust shall be construed as if such invalid, illegal or unenforceable provision
had never been contained herein or therein.

     (31) TRUSTOR ACKNOWLEDGE(S) AND AGREE(S) THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS DEED OF TRUST OR THE RELATIONSHIP ESTABLISHED HEREBY WOULD BE
BASED UPON DIFFICULT AND COMPLEX ISSUES, AND THEREFORE, TRUSTOR HEREBY WAIVE(S)
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING ACTIONS
SOUNDING IN TORT) TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS DEED OF TRUST OR
ARISING FROM THE TRANSACTION CONTEMPLATED HEREUNDER OR THE RELATIONSHIP
ESTABLISHED HEREBY, AND AGREE(S) THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE AND NOT BY A JURY.

     (32) This Deed of Trust is to be construed and enforced according to and
governed by the laws of the State of California.

     (33) Beneficiary shall be obligated to deliver a satisfaction or partial
release of this Deed of Trust only in the following circumstances:

          (a) Beneficiary shall deliver a satisfaction of this Deed of Trust if
(x) either the ESP Reconveyance Obligation has been satisfied or the ESP
Liquidated Damages have been paid and (y) either the Unit 7A Reconveyance
Obligation has been satisfied or the Unit 7A Liquidated Damages have been paid;

          (b) Beneficiary shall deliver a partial release of the whole or any
portion of the applicable Grantor Development Property (as such term is defined
in the Easement Agreement) if:

               (i) there is no material default and no Event of Default then
               continuing under this Deed of Trust;

               (ii) (x) the obligor in respect of the "Buyer's" obligations
               under Sections 9.2 and 10.13(f) of the Trimont Purchase
               Agreement and under Sections 9.3 and 10.19 of the East West
               Purchase Agreement is not in material default in the performance
               of the obligations of the "Buyer" described in such Sections and
               (y) if the property to be released includes Excess Property (as
               such term is defined in the East West Purchase Agreement), the
               obligor has fully completed performance of its obligations under
               such Sections;

               (iii) the portion of the Grantor Development Property to be
               released is properly subdivided and contains no Excess Property
               (as such term is defined in the East West Purchase Agreement) or
               the Easement Agreement has been modified, if necessary, to the
<PAGE>

               reasonable satisfaction of Beneficiary, to provide Beneficiary
               with such incidents of ownership in and to such Excess Property
               as Beneficiary may reasonably request and, if the area to be
               released is not a separate tax lot, Trustor and Beneficiary
               shall have entered into a tax sharing agreement which shall
               provide for an equitable allocation of real estate tax costs
               based on the relative value of the interests owned by Trustor
               and Beneficiary and which is, in any event, reasonably
               acceptable to Trustor and Beneficiary;

               (iv) the portion of the Grantor Development Property to be
               released contains no part of the Unit 7 Property (as such term
               is defined in the East West Purchase Agreement) and no part of
               the Unit 7A Property (as such term is defined in the Trimont
               Purchase Agreement); and

               (v) the portion of the Grantor Development Property to be
               released is, concurrently with such release, being subjected to
               one or more construction loan deeds of trust permitted by the
               Operating Agreement.

          (c) Beneficiary shall deliver a partial release of the applicable
Excess Property if, pursuant to Section 9.3 of the East West Purchase
Agreement, such Excess Property is being reconveyed to or at the direction of
Trimont Land Holdings, Inc.

          (d) Beneficiary shall deliver a partial release of the Unit 7
Property and/or the Unit 7A Property if the same is being reconveyed to or at
the direction of Trimont Land Holdings, Inc.

          (e) Beneficiary shall deliver a partial release of the Village Core
(as such term is defined in the Operating Agreement) upon the conveyance of the
Village Core pursuant to the exercise of the Break-Up Remedy (as such term is
defined in the Operating Agreement).

"East West Purchase Agreement" shall mean that certain Agreement for Purchase
and Sale of Real Property of even date herewith by and between Trimont Land
Holdings, Inc., as Seller, and East West Partners, Inc., as Buyer, as assigned
to and assumed by Northstar Mountain Properties, LLC and as the same may be
amended or otherwise modified from time to time.

          (34) This Deed of Trust is subject and subordinate to the Easement
Agreement. Accordingly, if the "Grantee" under the Easement Agreement shall
undertake an action which is prohibited by this Deed of Trust, such action
shall not be deemed to be a breach of this Deed of Trust.

          (35) This Deed of Trust is subject and subordinate to the Lease
Agreement. Accordingly, if the "Lessee" under the Lease Agreement shall
undertake an action which is prohibited by this Deed of Trust, such action
shall not be deemed to be a breach of this Deed of Trust. "Lease Agreement"
shall mean that certain Lease Agreement of even date herewith by and between
Trimont Land Holdings, Inc., as Lessor, and Trimont Land Company, as Lessee, as
the same may be amended or otherwise modified from time to time.

          (36) This Deed of Trust is subject and subordinate to the Trimont
Purchase Agreement, a memorandum or a copy of which has been recorded
<PAGE>

immediately prior to the recording of this Deed of Trust. The Beneficiary
hereby subjects and subordinates this Deed of Trust to the East West Purchase
Agreement, a memorandum or a copy of which is to be recorded immediately after
the recording of this Deed of Trust. The priorities described in this Paragraph
shall apply regardless of the actual order of recording.

          (37) The interests of each party under this Deed of Trust shall not
merge, by operation of law or otherwise, with any other interests of such party
in the Trust Estate, except as may otherwise be specifically agreed by such
party.

          The undersigned Trustor requests that a copy of any notice of default
and of any notice of sale hereunder be mailed to it at its address hereinbefore
set forth.
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed and delivered
the Deed of Trust as of the date and year first set forth above.

TRUSTOR:

TRIMONT LAND HOLDINGS, INC.

By:  /s/ Elizabeth J. Cole
   -------------------------------------------
   Elizabeth J. Cole, Executive Vice President

TRUSTEE:

PLACER TITLE COMPANY

By:   ----------------------------------------

Its:  ----------------------------------------

BENEFICIARY:

TRIMONT LAND COMPANY

By:  /s/ Elizabeth J. Cole
   -------------------------------------------
   Elizabeth J. Cole, Executive Vice President

<PAGE>

                                   EXHIBIT L

                  [Add diagram of 27A and 27B, as subdivided]

Note: Following the subdivision of parcel 27, TLC will convey to TLH all of the
original parcel 27A, as subsequently subdivided,  but following the subdivision
of Parcel 27B, TLC will only convey to TLH the cross-hatched  Section of Parcel
27B.

<PAGE>

                                   EXHIBIT M

                       Addition of Parcel P to Net Lease

<PAGE><PAGE>

                                                                     EXHIBIT 4.1

          Manufactured Housing Contract Senior/Subordinate Pass-Through
                           Certificates, Series 2000-5

                         POOLING AND SERVICING AGREEMENT

                                      among

                      CONSECO FINANCE SECURITIZATIONS CORP.
                                    as Seller

                              CONSECO FINANCE CORP.
                       as Originator and Initial Servicer

                                       and

                         U.S. BANK NATIONAL ASSOCIATION
              not in its individual capacity but solely as Trustee

                           Dated as of October 1, 2000
<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S>                                                                                          <C>
ARTICLE I DEFINITIONS........................................................................1-1

   SECTION 1.01.  General....................................................................1-1
   SECTION 1.02.  Specific Terms.............................................................1-1
   SECTION 1.03.  Calculations..............................................................1-33

ARTICLE II ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS.....................................2-1

   SECTION 2.01.  Closing....................................................................2-1
   SECTION 2.02.  Conditions to the Closing..................................................2-2
   SECTION 2.03.  Conveyance of the Subsequent Contracts.....................................2-4
   SECTION 2.04.  Acceptance by Trustee......................................................2-5
   SECTION 2.05.  REMIC Provisions...........................................................2-6

ARTICLE III REPRESENTATIONS AND WARRANTIES...................................................3-1

   SECTION 3.01.  Representations and Warranties Regarding the Seller........................3-1
   SECTION 3.02.  Representations and Warranties Regarding Each Contract.....................3-2
   SECTION 3.03.  Additional Representations and Warranties..................................3-6
   SECTION 3.04.  Representations and Warranties Regarding the Contracts
                  in the Aggregate...........................................................3-6
   SECTION 3.05.  Representations and Warranties Regarding the Contract Files................3-8
   SECTION 3.06.  Repurchase of Contracts or Substitution of Contracts for Breach of
                  Representations and Warranties.............................................3-9
   SECTION 3.07.  No Repurchase or Substitution Under Certain Circumstances.................3-12
   SECTION 3.08.  Staged-Funding Contract Reserve Account...................................3-13

ARTICLE IV PERFECTION OF TRANSFER AND PROTECTION OF
            SECURITY INTERESTS...............................................................4-1

   SECTION 4.01.  Custody of Contracts.......................................................4-1
   SECTION 4.02.  Filings....................................................................4-2
   SECTION 4.03.  Name Change or Relocation..................................................4-2
   SECTION 4.04.  Chief Executive Office.....................................................4-2
   SECTION 4.05.  Costs and Expenses.........................................................4-2

ARTICLE V SERVICING OF CONTRACTS.............................................................5-1

   SECTION 5.01.  Responsibility for Contract Administration.................................5-1
   SECTION 5.02.  Standard of Care...........................................................5-1
   SECTION 5.03.  Records....................................................................5-1
   SECTION 5.04.  Inspection; Computer Tape..................................................5-1
   SECTION 5.05.  Certificate Account........................................................5-2
   SECTION 5.06.  Enforcement................................................................5-4
   SECTION 5.07.  Trustee to Cooperate.......................................................5-5
   SECTION 5.08.  Costs and Expenses.........................................................5-6
   SECTION 5.09.  Maintenance of Insurance...................................................5-6
</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                          <C>
   SECTION 5.10.  Repossession...............................................................5-8
   SECTION 5.11.  Commingling of Funds.......................................................5-8
   SECTION 5.12.  Retitling; Security Interests..............................................5-8
   SECTION 5.13.  Covenants, Representations and Warranties of Servicer......................5-9

ARTICLE VI REPORTS AND TAX MATTERS...........................................................6-1

   SECTION 6.01.  Monthly Reports............................................................6-1
   SECTION 6.02.  Certificate of Servicing Officer...........................................6-1
   SECTION 6.03.  Other Data.................................................................6-1
   SECTION 6.04.  Annual Report of Accountants...............................................6-1
   SECTION 6.05.  Statements to Certificateholders...........................................6-2
   SECTION 6.06.  Payment of Taxes...........................................................6-7

ARTICLE VII SERVICE TRANSFER.................................................................7-1

   SECTION 7.01.  Event of Termination.......................................................7-1
   SECTION 7.02.  Transfer...................................................................7-1
   SECTION 7.03.  Trustee to Act; Appointment of Successor...................................7-2
   SECTION 7.04.  Notification to Certificateholders.........................................7-3
   SECTION 7.05.  Effect of Transfer.........................................................7-3
   SECTION 7.06.  Transfer of Certificate Account............................................7-3

ARTICLE VIII PAYMENTS .......................................................................8-1

   SECTION 8.01.  Monthly Payments...........................................................8-1
   SECTION 8.02.  Permitted Withdrawals from the Certificate Account.........................8-2
   SECTION 8.03.  Payments...................................................................8-2
   SECTION 8.04.  [Reserved].................................................................8-8
   SECTION 8.05.  Class C Subsidiary Certificateholder's Purchase Option; Auction Sale;
                  Additional Principal Distribution Amount...................................8-8
   SECTION 8.06.  Capitalized Interest Account..............................................8-10
   SECTION 8.07.  Pre-Funding Account.......................................................8-11

ARTICLE IX THE CERTIFICATES AND UNCERTIFICATED SUBSIDIARY
            INTERESTS........................................................................9-1

   SECTION 9.01.  The Certificates...........................................................9-1
   SECTION 9.02.  Registration of Transfer and Exchange of Certificates......................9-2
   SECTION 9.03.  No Charge; Disposition of Void Certificates................................9-5
   SECTION 9.04.  Mutilated, Destroyed, Lost or Stolen Certificates..........................9-5
   SECTION 9.05.  Persons Deemed Owners......................................................9-6
   SECTION 9.06.  Access to List of Certificateholders' Names and Addresses..................9-6
   SECTION 9.07.  Authenticating Agents......................................................9-6

ARTICLE X INDEMNITIES ......................................................................10-1

   SECTION 10.01.  Seller's and Originator's Indemnities....................................10-1
   SECTION 10.02.  Liabilities to Obligors..................................................10-1
</TABLE>

                                       ii
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                          <C>
   SECTION 10.03.  Tax Indemnification......................................................10-1
   SECTION 10.04.  Servicer's Indemnities...................................................10-1
   SECTION 10.05.  Operation of Indemnities.................................................10-2
   SECTION 10.06.  REMIC Tax Matters........................................................10-2

ARTICLE XI THE TRUSTEE......................................................................11-1

   SECTION 11.01.  Duties of Trustee........................................................11-1
   SECTION 11.02.  Certain Matters Affecting the Trustee....................................11-2
   SECTION 11.03.  Trustee Not Liable for Certificates or Contracts.........................11-3
   SECTION 11.04.  Rights of Certificateholders to Direct Trustee and to Waive Event of
                   Termination..............................................................11-3
   SECTION 11.05.  The Servicer to Pay Trustee's Fees and Expenses..........................11-4
   SECTION 11.06.  Eligibility Requirements for Trustee.....................................11-4
   SECTION 11.07.  Resignation or Removal of Trustee........................................11-5
   SECTION 11.08.  Successor Trustee........................................................11-5
   SECTION 11.09.  Merger or Consolidation of Trustee.......................................11-6
   SECTION 11.10.  Tax Returns..............................................................11-6
   SECTION 11.11.  Obligor Claims...........................................................11-6
   SECTION 11.12.  Appointment of Co-Trustee or Separate Trustee............................11-7
   SECTION 11.13.  Agents of Trustee........................................................11-8

ARTICLE XII MISCELLANEOUS...................................................................12-1

   SECTION 12.01.  Servicer Not to Assign Duties or Resign; Delegation of Servicing
                   Functions................................................................12-1
   SECTION 12.02.  Maintenance of Office or Agency..........................................12-1
   SECTION 12.03.  Termination..............................................................12-2
   SECTION 12.04.  Acts of Certificateholders...............................................12-3
   SECTION 12.05.  Calculations.............................................................12-4
   SECTION 12.06.  Assignment or Delegation by Originator...................................12-4
   SECTION 12.07.  Amendment................................................................12-5
   SECTION 12.08.  Notices..................................................................12-6
   SECTION 12.09.  Merger and Integration...................................................12-8
   SECTION 12.10.  Headings.................................................................12-8
   SECTION 12.11.  Governing Law............................................................12-8

EXHIBIT A - Form of Class A Certificate......................................................A-1

EXHIBIT B - Form of Class M-[1][2] Certificate...............................................B-1

EXHIBIT C-1 - Form of Class B-[1][2] Certificate.............................................C-1

EXHIBIT C-2 - Form of Class B-3I Certificate...............................................C-2-1

EXHIBIT D - Form of Assignment...............................................................D-1

EXHIBIT E - Form of Certificate of Officer...................................................E-1

EXHIBIT F - Form of Opinion of Counsel.......................................................F-1
</TABLE>

                                      iii
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                          <C>
EXHIBIT G - Form of Trustee's Acknowledgement................................................G-1

EXHIBIT H - Form of Custodian's Acknowledgement..............................................H-1

EXHIBIT I - Form of Certificate of Servicing Officer.........................................I-1

EXHIBIT J - Form of Class C Subsidiary Certificate...........................................J-1

EXHIBIT K - Form of Class C Master Certificate...............................................K-1

EXHIBIT L-1 - Form of Certificate Regarding Repurchased
              Contracts......................................................................L-1

EXHIBIT L-2 - Form of Certificate Regarding Substituted
              Contracts....................................................................L-2-1

EXHIBIT M - Form of Representation Letter....................................................M-1

EXHIBIT N - Form of Monthly Report...........................................................N-1

EXHIBIT O - Form of Addition Notice..........................................................O-1

EXHIBIT P - Form of Subsequent Transfer Instrument...........................................P-1

EXHIBIT Q - Form of Officer's Certificate (Subsequent
            Transfer)........................................................................Q-1
</TABLE>

                                       iv
<PAGE>

         AGREEMENT, dated as of October 1, 2000, among Conseco Finance
Securitizations Corp., a corporation organized and existing under the laws of
the State of Minnesota, as Seller (the "Seller"), Conseco Finance Corp., a
corporation organized and existing under the laws of the State of Delaware, as
originator of the manufactured housing installment sales contracts and
installment loan agreements described herein (the "Originator"), and as the
initial servicer (the "Servicer") and U.S. Bank National Association, a national
banking association, not in its individual capacity but solely as Trustee (the
"Trustee").

         WHEREAS, in the regular course of its business, Conseco Finance Corp.
originates, purchases and services manufactured housing installment sales
contracts and installment loan agreements, which contracts provide for
installment payments by or on behalf of the owner of the manufactured home and
grant security interests in the related manufactured home (or, in certain cases,
mortgages or deeds of trust on the real estate to which such manufactured home
is deemed permanently affixed);

         WHEREAS, the Seller, the Originator, the Servicer, and the Trustee wish
to set forth the terms and conditions pursuant to which the "Trust," as
hereinafter defined, will acquire the "Contracts," as hereinafter defined, and
the Servicer will manage and service the Contracts;

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as provided herein:
<PAGE>

                                    ARTICLE I

                                   DEFINITIONS
                                   -----------

         SECTION 1.01. General.
                       -------

         For the purpose of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, the terms defined in this
Article include the plural as well as the singular, the words "herein," "hereof"
and "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or other subdivision, and
Section references refer to Sections of the Agreement.

         SECTION 1.02. Specific Terms.
                       --------------

         "Addition Notice" means, with respect to each transfer of Subsequent
Contracts to the Trust pursuant to Section 2.03 of this Agreement, a notice,
substantially in the form of Exhibit O, which shall be given not less than five
Business Days prior to the related Subsequent Transfer Date, of the Seller's
designation of Subsequent Contracts to be sold to the Trust and the aggregate
Cut-off Date Principal Balances of such Subsequent Contracts.

         "Additional Contract" means a Contract identified in the List of
Contracts delivered pursuant to Section 2.02(a) that is not an Initial Contract.

         "Additional Monthly Servicing Fee" means, as of any Remittance Date, a
maximum of one-twelfth of the product of 0.50% and the Pool Scheduled Principal
Balance for the immediately preceding Remittance Date (or, with respect to the
first Remittance Date, the Cut-off Date Pool Principal Balance as of the Closing
Date).

         "Additional Principal Distribution Amount" means, as to any Remittance
Date, the Amount Available remaining after payment of the amounts described in
clauses (1) through (11) of Section 8.03(a), subject to the limitations and
conditions specified in Section 8.03(a)(12).

         "Adjusted Amount Available" means, as to any Remittance Date, the sum
of the Amount Available and any amount withdrawn from the Capitalized Interest
Account, Pre-Funding Account or Staged-Funding Contract Reserve Account and
deposited in the Certificate Account on such Remittance Date.

         "Adjusted Certificate Principal Balance" means, as of any Remittance
Date, the sum of the Class A Principal Balance, the Class M-1 Adjusted Principal
Balance, the Class M-2 Adjusted Principal Balance, the Class B-1 Adjusted
Principal Balance and the Class B-2 Principal Balance as of that Distribution
Date.

         "Advance Payment" means any payment by an Obligor in advance of the
related Due Period in which it would be due under such Contract and which
payment is not a Principal Prepayment.

         "Affiliate" of any specified Person means any other Person controlling
or controlled by or under common control with such specified Person. For the
purposes of this definition, "control"

                                      1-1
<PAGE>

when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" or "controlled" have meanings correlative to the foregoing.

         "Agreement" means this Pooling and Servicing Agreement, as the same may
be amended or supplemented from time to time.

         "Amount Available" means, as to any Remittance Date, an amount equal to

         (a)      the sum of

                  (i)      the amount on deposit in the Certificate Account as
                           of the close of business on the last day of the
                           related Due Period,

                  (ii)     any amounts required to be deposited in the
                           Certificate Account on the Business Day immediately
                           preceding such Remittance Date pursuant to Section
                           5.09(b), and

                  (iii)    all collections in respect of principal on the
                           Contracts received after the last day of the related
                           Due Period up to and including the third Business Day
                           prior to such Remittance Date (but in no event later
                           than the 25th day of the month prior to such
                           Remittance Date), minus

         (b)      the sum as of the close of business on the Business Day
                  preceding such Remittance Date of

                  (i)      the Amount Held for Future Distribution,

                  (ii)     amounts permitted to be withdrawn by the Trustee from
                           the Certificate Account pursuant to clauses (b) -
                           (e), inclusive, of Section 8.02, and

                  (iii)    with respect to all Remittance Dates other than the
                           Remittance Date in November 2000, all collections in
                           respect of principal on the Contracts received on or
                           after the first day of the related Due Period up to
                           and including the third Business Day prior to the
                           preceding Remittance Date (but in no event later than
                           the 25th day of the month prior to the preceding
                           Remittance Date).

         "Amount Held for Future Distribution" means, as to any Remittance Date,
the total of the amounts held in the Certificate Account on the last day of the
related Due Period on account of Advance Payments in respect of such related Due
Period (not including any portion of Advance Payments received during such
related Due Period that was distributed on the prior Remittance Date pursuant to
clause (vi) of the definition of "Formula Principal Distribution Amount").

         "Applicants" has the meaning assigned in Section 9.06.

                                      1-2
<PAGE>

         "Appraised Value" means, with respect to any Manufactured Home, the
value of such Manufactured Home as determined by a professional appraiser (who
may be an employee of the Originator).

         "Assumption Fee" means any assumption or other similar fee paid by the
Obligor on a Contract.

         "Auction Date" has the meaning assigned in Section 8.05(e).

         "Authenticating Agent" means any authenticating agent appointed
pursuant to Section 9.07.

         "Average Sixty-Day Delinquency Ratio" means the arithmetic average of
the Sixty-Day Delinquency Ratios for such Remittance Date and for the two
immediately preceding Remittance Dates.

         "Book-Entry Certificate" means any Certificate registered in the name
of the Depository or its nominee ownership of which is reflected on the books of
the Depository or on the books of a person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).

         "Business Day" means any day other than (a) a Saturday or a Sunday, or
(b) another day on which banking institutions in the city in which a Person is
taking action hereunder are authorized or obligated by law, executive order or
governmental decree to be closed.

         "Capitalized Interest Account" means the account established and
maintained pursuant to Section 8.06.

         "Certificates" means the Class A, Class M, Class B, Class B-3I, and
Class C Certificates, collectively.

         "Certificate Account" means the account established and maintained
pursuant to Section 5.05.

         "Certificate Owner" means the person who is the beneficial owner of a
Book-Entry Certificate.

         "Certificate Register" means the register maintained pursuant to
Section 9.02.

         "Certificate Registrar" or "Registrar" means the registrar appointed
pursuant to Section 9.02.

         "Certificateholder" or "Holder" means the person in whose name a
Certificate is registered on the Certificate Register, except that, solely for
the purposes of giving any consent, waiver, request or demand pursuant to this
Agreement, any Regular Certificate registered in the name of the Originator or
the Seller or any of their Affiliates shall be deemed not to be outstanding and
the Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite Percentage Interest necessary to effect any
such consent,

                                      1-3
<PAGE>

request, waiver or demand has been obtained; provided, however, that, solely for
the purpose of determining whether the Trustee is entitled to rely upon any such
consent, waiver, request or demand, only Regular Certificates which the Trustee
knows to be so owned shall be so disregarded.

         "Class," "Class A," "Class M," "Class B," "Class B-3I" or "Class C"
means pertaining to each Class of Class A Certificates, Class M Certificates,
Class B Certificates, Class B-3I Certificates and/or Class C Certificates, as
the case may be.

         "Class A Certificate" means any one of the Class A-1, Class A-2, Class
A-3, Class A-4, Class A-5, Class A-6 and Class A-7 Certificates executed and
delivered by the Trustee substantially in the form set forth in Exhibit A and
evidencing an interest designated as a "regular interest" in the Master REMIC
for purposes of the REMIC Provisions.

         "Class A-7 Cross-Over Date" means the Remittance Date on which the
Class A-7 Principal Balance (after giving effect to the distributions of
principal on the Class A-7 Certificates on such Remittance Date) is reduced to
zero.

         "Class A Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Adjusted Amount Available for such Remittance Date (less any
amounts paid to the Servicer pursuant to Section 8.03(a)(1)) and (b) the Class A
Formula Distribution Amount for such Remittance Date; provided that after the
A-7 Cross-Over Date the Class A Distribution Amount shall be zero.

         "Class A Formula Distribution Amount" means, as to any Remittance Date,
an amount equal to the sum of (a) interest (calculated in the manner specified
in Section 1.03) at (i) the Class A-1 Remittance Rate on the Class A-1 Principal
Balance, (ii) the Class A-2 Remittance Rate on the Class A-2 Principal Balance,
(iii) the Class A-3 Remittance Rate on the Class A-3 Principal Balance, (iv) the
Class A-4 Remittance Rate on the Class A-4 Principal Balance, (v) the Class A-5
Remittance Rate on the Class A-5 Principal Balance, (vi) the Class A-6
Remittance Rate on the Class A-6 Principal Balance and (vii) the Class A-7
Remittance Rate on the Class A-7 Principal Balance, in each case calculated
immediately prior to such Remittance Date, (b) the aggregate Unpaid Class A
Interest Shortfall, if any, (c) the Class A Percentage of the Formula Principal
Distribution Amount, (d) any Unpaid Class A Principal Shortfall and (e) any
Additional Principal Distribution Amount to be distributed to the Class A
Certificates pursuant to Section 8.03(a)(12); provided, however, that the
aggregate of all amounts distributed for all Remittance Dates pursuant to
clauses (c), (d) and (e) shall not exceed the sum of the Original Class A-l
Principal Balance, the Original Class A-2 Principal Balance, the Original Class
A-3 Principal Balance, the Original Class A-4 Principal Balance, the Original
Class A-5 Principal Balance, and the Original Class A-6 Principal Balance and
the Original Class A-7 Principal Balance.

         "Class A Interest Distribution Amount" means, as to each Class of Class
A Certificates and any Remittance Date, the sum of the amounts specified in
clause (a)(i), (a)(ii), (a)(iii), (a)(iv), (a)(v), (a)(vi) and (a)(vii) as
applicable, of the definition of the term "Class A Formula Distribution Amount"
plus the Unpaid Class A Interest Shortfall, if any, with respect to such Class.

                                      1-4
<PAGE>

         "Class A Interest Shortfall" means, as to any Remittance Date and with
respect to each Class of Class A Certificates, the amount, if any, by which the
amount distributed to Holders of such Class of Class A Certificates on such
Remittance Date pursuant to Section 8.03(a)(2) is less than the Class A Interest
Distribution Amount for such Class.

         "Class A Percentage" means, as to any Remittance Date, a fraction,
expressed as a percentage, the numerator of which is the Class A Principal
Balance and the denominator of which is the sum of (a) the Class A Principal
Balance, (b) if the Class M-1 Distribution Test is satisfied, the Class M-1
Principal Balance, otherwise zero, (c) if the Class M-2 Distribution Test is
satisfied, the Class M-2 Principal Balance, otherwise zero, and (d) if the Class
B Distribution Test is satisfied, the sum of the Class B Principal Balance and
the Overcollateralization Amount, otherwise zero.

         "Class A Principal Balance" means, as to any Remittance Date, the sum
of the Class Principal Balances of the Class A Certificates.

         "Class A Principal Deficiency Amount" means, as to any Remittance Date,
the amount, if any, by which the Pool Scheduled Principal Balance plus any
Pre-Funded Amount is less than the Class A Principal Balance.

         "Class A Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class A
Certificates on such Remittance Date pursuant to Section 8.03(a)(6)(i) or (iii)
is less than the Class A Percentage of the Formula Principal Distribution Amount
for such Remittance Date. In no event, however, shall the Class A Principal
Shortfall exceed the Class A Principal Balance.

         "Class A-1 Remittance Rate" means 6.98% per annum.

         "Class A-2 Remittance Rate" means 7.06% per annum.

         "Class A-3 Remittance Rate" means 7.21% per annum.

         "Class A-4 Remittance Rate" means 7.47% per annum.

         "Class A-5 Remittance Rate" means 7.70% per annum.

         "Class A-6 Remittance Rate" means 7.96% per annum.

         "Class A-7 Remittance Rate" means 8.20% per annum.

         "Class A-1-S1 Interest" means a regular interest in the Subsidiary
REMIC which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).

         "Class A-S2 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).

                                      1-5
<PAGE>

         "Class A-S3 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).

         "Class A-S4 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).

         "Class A-S5 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).

         "Class A-S6 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).

         "Class A-S7 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).

         "Class B-1 Adjusted Principal Balance" means, as of any Remittance
Date, the Class B-1 Principal Balance as of that Remittance Date minus the Class
B-1 Liquidation Loss Amount (if any) as of the prior Remittance Date.

         "Class B Certificate" means any one of the Class B-1 or Class B-2
Certificates.

         "Class B-1 Certificate" means any one of the Class B-1 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit C-1 hereto and evidencing an interest designated as a "regular interest"
in the Master REMIC for purposes of the REMIC Provisions.

         "Class B-2 Certificate" means any one of the Class B-2 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit C-1 hereto and evidencing an interest designated as a "regular interest"
in the Master REMIC for purposes of the REMIC Provisions.

         "Class B-1 Cross-Over Date" means the Remittance Date on which the
Class B-1 Principal Balance (after giving effect to the distributions of
principal on the Class B-1 Certificates on such Remittance Date) is reduced to
zero.

         "Class B-1 Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Adjusted Amount Available less the sum of (i) any amounts paid
to the Servicer pursuant to Section 8.03(a)(1), (ii) the Class A Distribution
Amount, (iii) the Class M-1 Distribution Amount, and (iv) the Class M-2
Distribution Amount and (b) the Class B-1 Formula Distribution Amount for such
Remittance Date; provided that after the Class B-1 Cross-Over Date the Class B-1
Distribution Amount shall be zero.

                                      1-6
<PAGE>

         "Class B-2 Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Remaining Amount Available and (b) the Class B-2 Formula
Distribution Amount for such Remittance Date.

         "Class B Distribution Test" means, to be considered "satisfied" for any
Remittance Date, that (i) such Remittance Date occurs in or after November 2004;
(ii) the Average Sixty-Day Delinquency Ratio for such Remittance Date is less
than or equal to 5.00%; (iii) the Cumulative Realized Losses Test for such
Remittance Date is satisfied; (iv) the Current Realized Loss Ratio for such
Remittance Date is less than or equal to 2.75%; (v) the fraction, expressed as a
percentage, the numerator of which is the sum of the Class B Principal Balance
and the Overcollateralization Amount as of such Remittance Date and the
denominator of which is the Pool Scheduled Principal Balance as of the
immediately preceding Remittance Date, is equal to or greater than 12.75%; and
(vi) the Class B Principal Balance as of such Remittance Date is greater than or
equal to $15,000,000.

         "Class B-1 Formula Distribution Amount" means, as to any Remittance
Date, an amount equal to the sum of (a) interest (calculated in the manner
specified in Section 1.03) at the Class B-1 Remittance Rate on the Class B-1
Adjusted Principal Balance as of such Remittance Date, (b) any Unpaid Class B-1
Interest Shortfall, (c) the Class B Percentage of the Formula Principal
Distribution Amount, (d) any Unpaid Class B-1 Principal Shortfall, (e) any
Additional Principal Distribution Amount to be distributed to the Class B-1
Certificates pursuant to Section 8.03(a)(12), (f) any Class B-1 Liquidation Loss
Interest Amount, and (g) any Unpaid Class B-1 Liquidation Loss Interest
Shortfall; provided, however, that on the Class M-2 Cross-Over Date, the balance
of any amounts that would have been distributable on such date pursuant to
clauses (c), (d) and (e) of the term "Class M-2 Formula Distribution Amount"
(assuming a sufficient Amount Available) but for the operation of the second
proviso to such term shall instead be included in clause (c) or (e) of this
definition, as applicable; provided, further, that the aggregate of all amounts
distributed pursuant to clauses (c), (d) and (e) of this definition shall not
exceed the Original Class B-1 Principal Balance.

         "Class B-2 Formula Distribution Amount" means, as to any Remittance
Date, an amount equal to the sum of (a) interest (calculated in the manner
specified in Section 1.03) at the Class B-2 Remittance Rate on the Class B-2
Principal Balance as calculated immediately prior to such Remittance Date, (b)
any Unpaid Class B-2 Interest Shortfall, (c) (i) if such Remittance Date is
prior to or on the Class B-1 Cross-Over Date, zero or (ii) if such Remittance
Date is after the Class B-1 Cross-Over Date, the Class B Percentage of the
Formula Principal Distribution Amount, (d) any Unpaid Class B-2 Principal
Shortfall, and (e) any Additional Principal Distribution Amount to be
distributed to the Class B-2 Certificates pursuant to Section 8.03(a)(12);
provided, however, that on the Class B-1 Cross-Over Date, the balance of any
amounts that would have been distributable on such date pursuant to clauses (c),
(d) and (e) of the term "Class B-1 Formula Distribution Amount" (assuming a
sufficient Remaining Amount Available) but for the operation of the second
proviso to such term shall instead be included in clause (c) or (e) of this
definition, as applicable; provided, further, that the aggregate of all amounts
distributed pursuant to clauses (c), (d) and (e) of this definition shall not
exceed the Original Class B-2 Principal Balance.

                                       1-7
<PAGE>

         "Class B-1 Interest Deficiency Amount" means, as to the Class B-1
Certificates and any Remittance Date, the difference, if any, between (i) the
sum of the amounts described in clauses (a), (b), (f) and (g) of the definition
of the term "Class B-1 Formula Distribution Amount" and (ii) the amount
available for distribution to the Class B-1 Certificateholders pursuant to
Section 8.03(a)(5)(i) and (ii) and Section 8.03(a)(9)(iii) and (iv) on such
Remittance Date.

         "Class B-1 Interest Distribution Amount" means, as to any Remittance
Date, the amount specified in clause (a) of the definition of "Class B-1 Formula
Distribution Amount" plus the Unpaid Class B-1 Interest Shortfall, if any.

         "Class B-1 Interest Shortfall" means, as to any Remittance Date, the
difference, if any, between (A) the sum of (i) the amount distributed to Holders
of the Class B-1 Certificates on such Remittance Date pursuant to Sections
8.03(a)(5)(i) and (ii), and (ii) any amount distributed to the Holders of the
Class B-1 Certificates pursuant to Section 8.03(c) on such Remittance Date, and
(B) the Class B-1 Interest Distribution Amount for such Remittance Date.

         "Class B-2 Interest Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class B-2
Certificates on such Remittance Date pursuant to Sections 8.03(a)(10)(i) and
(ii) is less than the sum of the amounts specified in clauses (a) and (b) of the
definition of the term "Class B-2 Formula Distribution Amount."

         "Class B-1 Liquidation Loss Amount" means, as of any Remittance Date,
the lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance, the Class M-1 Principal Balance, the Class M-2 Principal Balance and
the Class B-1 Principal Balance for such Remittance Date exceeds the sum of the
Pre-Funded Amount plus the Pool Scheduled Principal Balance for such Remittance
Date (after giving effect to all distributions of principal on the Class A,
Class M-1, Class M-2 and Class B-1 Certificates on such Remittance Date) and (y)
the Class B-1 Principal Balance (after giving effect to all distributions of
principal on the Class B-1 Certificates on such Remittance Date).

         "Class B-2 Liquidation Loss Amount" means, as to any Remittance Date,
the lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance, the Class M-1 Principal Balance, the Class M-2 Principal Balance, the
Class B-1 Principal Balance and the Class B-2 Principal Balance for such
Remittance Date exceeds the sum of the Pre-Funded Amount plus the Pool Scheduled
Principal Balance for such Remittance Date (after giving effect to all
distributions of principal on the Class A, Class M-1, Class M-2, Class B-1 and
Class B-2 Certificates on such Remittance Date) and (y) the Class B-2 Principal
Balance (after giving effect to all distributions of principal on the Class B-2
Certificates on such Remittance Date).

         "Class B-1 Liquidation Loss Interest Amount" means, as to any
Remittance Date, an amount equal to interest (calculated in the manner specified
in Section 1.03) at the Class B-1 Remittance Rate on the Class B-1 Liquidation
Loss Amount (if any) for the immediately preceding Remittance Date.

         "Class B-1 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the amount, if any, by which the amount distributed to Holders
of the Class B-1 Certificates on such

                                       1-8
<PAGE>

Remittance Date pursuant to Section 8.03(a)(9)(iii) is less than the Class B-1
Liquidation Loss Interest Amount for such Remittance Date.

         "Class B Percentage" means:

         (i)      as to any Remittance Date on which the Class B Distribution
                  Test is not satisfied and the Class A Principal Balance, the
                  Class M-1 Principal Balance and the Class M-2 Principal
                  Balance have not been reduced to zero, 0%, and

         (ii)     as to any other Remittance Date, a fraction, expressed as a
                  percentage, the numerator of which is the sum of the Class B
                  Principal Balance and the Overcollateralization Amount and the
                  denominator of which is the sum of (a) the Class A Principal
                  Balance, (b) the Class M-1 Principal Balance, (c) the Class
                  M-2 Principal Balance and (d) the sum of the Class B Principal
                  Balance and the Overcollateralization Amount.

         "Class B Principal Balance" means, as to any Remittance Date, the sum
of the Class B-1 Principal Balance and the Class B-2 Principal Balance.

         "Class B-1 Principal Balance" means, as to any Remittance Date, the
Original Class B-1 Principal Balance less all amounts previously distributed to
Holders of Class B-1 Certificates on account of principal.

         "Class B-2 Principal Balance" means, as to any Remittance Date, the
Original Class B-2 Principal Balance less all amounts previously distributed to
Holders of Class B-2 Certificates on account of principal.

         "Class B-1 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class B-1
Certificates on such Remittance Date pursuant to Section 8.03(a)(9)(ii) is less
than the Class B Percentage of the Formula Principal Distribution Amount for
such Remittance Date. In no event, however, shall the Class B-1 Principal
Shortfall exceed the Class B-1 Principal Balance.

         "Class B-2 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class B-2
Certificates on such Remittance Date pursuant to Section 8.03(a)(10)(iv) is less
than the amount described in Section 8.03(a)(10)(iv) for such Remittance Date.
In no event, however, shall the Class B-2 Principal Shortfall exceed the Class
B-2 Principal Balance.

         "Class B-1 Remittance Rate" means a floating rate (determined each Due
Period as of each Remittance Date) equal to the Weighted Average Contract Rate,
but in no event greater than 10.21% per annum.

         "Class B-2 Remittance Rate" means a floating rate (determined each Due
Period as of each Remittance Date) equal to the Weighted Average Contract Rate,
but in no event greater than 9.80% per annum.

                                       1-9
<PAGE>

         "Class B-3I Certificate" means any one of the Class B-3I Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit C-2 hereto and evidencing an interest designated as a "regular interest"
in the Master REMIC for purposes of the REMIC Provisions.

         "Class B-3I Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Amount Available less all amounts distributed pursuant to
Sections 8.03(a)(1)-(12), and (b) the Class B-3I Formula Distribution Amount for
such Remittance Date.

         "Class B-3I Formula Distribution Amount" means, as to any Remittance
Date, an amount equal to the sum of (a) the Excess Interest for such Remittance
Date, and (b) any Unpaid Class B-3I Shortfall as of such Remittance Date.

         "Class B-3I Shortfall" means, as to any Remittance Date, the amount, if
any, by which (a) the Class B-3I Formula Distribution Amount for such Remittance
Date exceeds (b) the Class B-3I Distribution Amount for such Remittance Date.

         "Class B-S1 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).

         "Class B-S2 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).

         "Class C Certificate" means any one of the Class C Subsidiary
Certificate or Class C Master Certificate.

         "Class C Certificateholder" means the person in whose name a Class C
Certificate is registered on the Certificate Register.

         "Class C Master Certificate" means a Class C Master Certificate
executed and delivered by the Trustee substantially in the form of Exhibit K,
and evidencing an interest designated as the "residual interest" in the Master
REMIC for purposes of the REMIC Provisions.

         "Class C Master Distribution Amount" means, as to any Remittance Date,
the amount, if any, distributable pursuant to Section 8.03(a)(15).

         "Class C Subsidiary Certificate" means a Class C Subsidiary Certificate
executed and delivered by the Trustee substantially in the form of Exhibit J,
and evidencing an interest designated as the "residual interest" in the
Subsidiary REMIC for purposes of the REMIC Provisions.

         "Class C Subsidiary Distribution Amount" means, as to any Remittance
Date, the amounts, if any, distributable pursuant to Section 8.03(b)(6).

         "Class M Certificate" means any one of the Class M-1 or M-2
Certificates executed and delivered by the Trustee.

                                      1-10
<PAGE>

         "Class M-1 Adjusted Principal Balance" means, as to any Remittance
Date, the Class M-1 Principal Balance as of that Remittance Date minus the Class
M-1 Liquidation Loss Amount (if any) as of the prior Remittance Date.

         "Class M-2 Adjusted Principal Balance" means, as to any Remittance
Date, the Class M-2 Principal Balance as of that Remittance Date minus the Class
M-2 Liquidation Loss Amount (if any) as of the prior Remittance Date.

         "Class M-1 Certificate" means any one of the Class M-1 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit B and evidencing an interest designated as a "regular interest" in the
Trust for the purposes of the REMIC Provisions.

         "Class M-2 Certificate" means any one of the Class M-2 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit B and evidencing an interest designated as a "regular interest" in the
Trust for the purposes of the REMIC Provisions.

         "Class M-1 Cross-Over Date" means the Remittance Date on which the
Class M-1 Principal Balance (after giving effect to the distributions of
principal on the Class M-1 Certificates on such Remittance Date) is reduced to
zero.

         "Class M-2 Cross-Over Date" means the Remittance Date on which the
Class M-2 Principal Balance (after giving effect to the distributions of
principal on the Class M-2 Certificates on such Remittance Date) is reduced to
zero.

         "Class M-1 Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Adjusted Amount Available less the sum of (i) any amounts paid
to the Servicer pursuant to Section 8.03(a)(1) and (ii) the Class A Distribution
Amount and (b) the Class M-1 Formula Distribution Amount for such Remittance
Date; provided that after the Class M-1 Cross-Over Date the Class M-1
Distribution Amount shall be zero.

         "Class M-2 Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Adjusted Amount Available less the sum of (i) any amounts paid
to the Servicer pursuant to Section 8.03(a)(1), (ii) the Class A Distribution
Amount, and (iii) the Class M-1 Distribution Amount and (b) the Class M-2
Formula Distribution Amount for such Remittance Date; provided that after the
Class M-2 Cross-Over Date the Class M-2 Distribution Amount shall be zero.

         "Class M-1 Distribution Test" means, to be considered "satisfied" for
any Remittance Date, that (i) such Remittance Date occurs in or after November
2004; (ii) the Average Sixty-Day Delinquency Ratio for such Remittance Date is
less than or equal to 5.00%; (iii) the Cumulative Realized Losses Test for such
Remittance Date is satisfied; (iv) the Current Realized Loss Ratio for such
Remittance Date is less than or equal to 2.75%; and (v) the fraction, expressed
as a percentage, the numerator of which is the sum of the Class M-1 Principal
Balance, the Class M-2 Principal Balance, the Class B Principal Balance and the
Overcollateralization Amount as of such Remittance Date and the denominator of
which is the Pool Scheduled Principal Balance as of the immediately preceding
Remittance Date, is equal to or greater than 26.25%.

                                      1-11
<PAGE>

         "Class M-2 Distribution Test" means, to be considered "satisfied" for
any Remittance Date, that (i) such Remittance Date occurs in or after November
2004; (ii) the Average Sixty-Day Delinquency Ratio for such Remittance Date is
less than or equal to 5.00%; (iii) the Cumulative Realized Losses Test for such
Remittance Date is satisfied; (iv) the Current Realized Loss Ratio for such
Remittance Date is less than or equal to 2.75%; and (v) the fraction, expressed
as a percentage, the numerator of which is the sum of the Class M-2 Principal
Balance, the Class B Principal Balance and the Overcollateralization Amount as
of such Remittance Date and the denominator of which is the Pool Scheduled
Principal Balance as of the immediately preceding Remittance Date, is equal to
or greater than 18.75%.

         "Class M-1 Formula Distribution Amount" means, as to any Remittance
Date, an amount equal to the sum of (a) interest (calculated in the manner
specified in Section 1.03) at the Class M-1 Remittance Rate on the Class M-1
Adjusted Principal Balance as of such Remittance Date, (b) the aggregate Unpaid
Class M-1 Interest Shortfall, if any, (c) the Class M-1 Percentage of the
Formula Principal Distribution Amount, (d) any Unpaid Class M-1 Principal
Shortfall, (e) any Additional Principal Distribution Amount to be distributed to
the Class M-1 Certificates pursuant to Section 8.03(a)(12), (f) any Class M-1
Liquidation Loss Interest Amount, and (g) any Unpaid Class M-1 Liquidation Loss
Interest Shortfall; provided, however, that on the Class A-7 Cross-Over Date,
the balance of any amounts that would have been distributable on such date
pursuant to clauses (c), (d) and (e) of the term "Class A Formula Distribution
Amount" (assuming a sufficient Amount Available) but for the operation of the
proviso to such term shall instead be included in clause (c) or (e) of this
definition, as applicable; provided, further, that the aggregate of all amounts
distributed for all Remittance Dates pursuant to clauses (c), (d) and (e) shall
not exceed the Original Class M-1 Principal Balance.

         "Class M-2 Formula Distribution Amount" means, as to any Remittance
Date, an amount equal to the sum of (a) interest (calculated in the manner
specified in Section 1.03) at the Class M-2 Remittance Rate on the Class M-2
Adjusted Principal Balance as of such Remittance Date, (b) the aggregate Unpaid
Class M-2 Interest Shortfall, if any, (c) the Class M-2 Percentage of the
Formula Principal Distribution Amount, (d) any Unpaid Class M-2 Principal
Shortfall, (e) any Additional Principal Distribution Amount to be distributed to
the Class M-2 Certificates pursuant to Section 8.03(a)(12), (f) any Class M-2
Liquidation Loss Interest Amount, and (g) any Unpaid Class M-2 Liquidation Loss
Interest Shortfall; provided, however, that on the Class M-1 Cross-Over Date,
the balance of any amounts that would have been distributable on such date
pursuant to clauses (c), (d) and (e) of the term "Class M-1 Formula Distribution
Amount" (assuming a sufficient Amount Available) but for the operation of the
proviso to such term shall instead be included in clause (c) or (e) of this
definition, as applicable; provided, further, that the aggregate of all amounts
distributed for all Remittance Dates pursuant to clauses (c), (d) and (e) shall
not exceed the Original Class M-2 Principal Balance.

         "Class M-1 Interest Deficiency Amount" means, as to the Class M-1
Certificates and any Remittance Date, the difference, if any, between (i) the
sum of the amounts described in clauses (a), (b), (f) and (g) of the definition
of the term "Class M-1 Formula Distribution Amount" and (ii) the amount
available for distribution to the Class M-1 Certificateholders pursuant to
Section 8.03(a)(3)(i) and (ii) and Section 8.03(a)(7)(iii) and (iv) on such
Remittance Date.

                                      1-12
<PAGE>

         "Class M-2 Interest Deficiency Amount" means, as to the Class M-2
Certificates and any Remittance Date, the difference, if any, between (i) the
sum of the amounts described in clauses (a), (b), (f) and (g) of the definition
of the term "Class M-2 Formula Distribution Amount" and (ii) the amount
available for distribution to the Class M-2 Certificateholders pursuant to
Section 8.03(a)(4)(i) and (ii) and Section 8.03(a)(8)(iii) and (iv) on such
Remittance Date.

         "Class M-1 Interest Distribution Amount" means, as to any Remittance
Date, the amount specified in clause (a) of the definition of the term "Class
M-1 Formula Distribution Amount" plus the Unpaid Class M-1 Interest Shortfall,
if any.

         "Class M-2 Interest Distribution Amount" means, as to any Remittance
Date, the amount specified in clause (a) of the definition of the term "Class
M-2 Formula Distribution Amount" plus the Unpaid Class M-2 Interest Shortfall,
if any.

         "Class M-1 Interest Shortfall" means, as to any Remittance Date, the
difference, if any, between (A) the sum of (i) the amount distributed to Holders
of the Class M-1 Certificates on such Remittance Date pursuant to Section
8.03(a)(3)(i) and (ii), and (ii) any amount distributed to the Holders of the
Class M-1 Certificates pursuant to Section 8.03(c) on such Remittance Date, and
(B) the Class M-1 Interest Distribution Amount for such Remittance Date.

         "Class M-2 Interest Shortfall" means, as to any Remittance Date, the
difference, if any, between (A) the sum of (i) the amount distributed to Holders
of the Class M-2 Certificates on such Remittance Date pursuant to Section
8.03(a)(4)(i) and (ii), and (ii) any amount distributed to the Holders of the
Class M-2 Certificates pursuant to Section 8.03(c) on such Remittance Date, and
(B) the Class M-2 Interest Distribution Amount for such Remittance Date.

         "Class M-1 Liquidation Loss Amount" means, as to any Remittance Date,
the lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance and the Class M-1 Principal Balance for such Remittance Date exceeds the
sum of the Pre-Funded Amount plus the Pool Scheduled Principal Balance for such
Remittance Date (after giving effect to all distributions of principal on the
Class A and Class M-1 Certificates on such Remittance Date) and (y) the Class
M-1 Principal Balance (after giving effect to all distributions of principal on
the Class M-1 Certificates on such Remittance Date).

         "Class M-2 Liquidation Loss Amount" means, as to any Remittance Date,
the lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance, the Class M-1 Principal Balance and the Class M-2 Principal Balance for
such Remittance Date exceeds the sum of the Pre-Funded Amount plus the Pool
Scheduled Principal Balance for such Remittance Date (after giving effect to all
distributions of principal on the Class A, Class M-1 and Class M-2 Certificates
on such Remittance Date) and (y) the Class M-2 Principal Balance (after giving
effect to all distributions of principal on the Class M-2 Certificates on such
Remittance Date).

         "Class M-1 Liquidation Loss Interest Amount" means, as to any
Remittance Date, an amount equal to interest (calculated in the manner specified
in Section 1.03) at the Class M-1 Remittance Rate on the Class M-1 Liquidation
Loss Amount (if any) for the immediately preceding Remittance Date.

                                      1-13
<PAGE>

         "Class M-2 Liquidation Loss Interest Amount" means, as to any
Remittance Date, an amount equal to interest (calculated in the manner specified
in Section 1.03) at the Class M-2 Remittance Rate on the Class M-2 Liquidation
Loss Amount (if any) for the immediately preceding Remittance Date.

         "Class M-1 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the amount, if any, by which the amount distributed to Holders
of the Class M-1 Certificates on such Remittance Date pursuant to Section
8.03(a)(7)(iii) is less than the Class M-1 Liquidation Loss Interest Amount for
such Remittance Date.

         "Class M-2 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the amount, if any, by which the amount distributed to Holders
of the Class M-2 Certificates on such Remittance Date pursuant to Section
8.03(a)(8)(iii) is less than the Class M-2 Liquidation Loss Interest Amount for
such Remittance Date.

         "Class M-1 Percentage" means:

         (i)      as to any Remittance Date prior to the Class A-7 Cross-Over
                  Date and on which the Class M-1 Distribution Test is not
                  satisfied, 0%, and

         (ii)     as to any Remittance Date after the Class A-7 Cross-Over Date
                  or on which the Class M-1 Distribution Test is satisfied, a
                  fraction, expressed as a percentage, the numerator of which is
                  the Class M-1 Principal Balance and the denominator of which
                  is the sum of (a) the Class A Principal Balance, (b) the Class
                  M-1 Principal Balance, (c) if the Class M-2 Distribution Test
                  is satisfied, the Class M-2 Principal Balance, otherwise zero,
                  and (d) if the Class B Distribution Test is satisfied, the sum
                  of the Class B Principal Balance and the Overcollateralization
                  Amount, otherwise zero.

         "Class M-2 Percentage" means:

         (i)      as to any Remittance Date prior to the Class M-1 Cross-Over
                  Date and on which the Class M-2 Distribution Test is not
                  satisfied, 0%, and

         (ii)     as to any Remittance Date after the Class M-1 Cross-Over Date
                  or on which the Class M-2 Distribution Test is satisfied, a
                  fraction, expressed as a percentage, the numerator of which is
                  the Class M-2 Principal Balance and the denominator of which
                  is the sum of (a) the Class A Principal Balance, (b) the Class
                  M-1 Principal Balance, (c) the Class M-2 Principal Balance,
                  and (d) if the Class B Distribution Test is satisfied, the sum
                  of the Class B Principal Balance and the Overcollateralization
                  Amount, otherwise zero.

         "Class M-1 Principal Balance" means, as to any Remittance Date, the
Original Class M-1 Principal Balance less all amounts previously distributed to
Holders of Class M-1 Certificates on account of principal.

                                      1-14
<PAGE>

         "Class M-2 Principal Balance" means, as to any Remittance Date, the
Original Class M-2 Principal Balance less all amounts previously distributed to
Holders of Class M-2 Certificates on account of principal.

         "Class M-1 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class M-1
Certificates on such Remittance Date pursuant to Section 8.03(a)(7)(ii) is less
than the Class M-1 Percentage of the Formula Principal Distribution Amount for
such Remittance Date. In no event, however, shall the Class M-1 Principal
Shortfall exceed the Class M-1 Principal Balance.

         "Class M-2 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class M-2
Certificates on such Remittance Date pursuant to Section 8.03(a)(8)(ii) is less
than the Class M-2 Percentage of the Formula Principal Distribution Amount for
such Remittance Date. In no event, however, shall the Class M-2 Principal
Shortfall exceed the Class M-2 Principal Balance.

         "Class M-1 Remittance Rate" means a floating rate (determined each Due
Period as of each Remittance Date) equal to the Weighted Average Contract Rate,
but in no event greater than 8.40% per annum.

         "Class M-2 Remittance Rate" means a floating rate (determined each Due
Period as of each Remittance Date) equal to the Weighted Average Contract Rate,
but in no event greater than 9.03% per annum.

         "Class M-S1 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).

         "Class M-S2 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).

         "Class Principal Balance" means, as to any Remittance Date and each
Class of Certificates, the Original Principal Balance of such Class less all
amounts previously distributed to Holders of such Class of Certificates on
account of principal.

         "Closing Date" means October 5, 2000.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Collateral Security" means, with respect to any Contract, (i) the
security interests granted by or on behalf of the related Obligor with respect
thereto, including a first priority perfected security interest in the related
Manufactured Home, (ii) all other security interests or liens and property
subject thereto from time to time purporting to secure payment of such Contract,
whether pursuant to the agreement giving rise to such Contract or otherwise,
together with all financing statements signed by the Obligor describing any
collateral securing such Contract, (iii) all guarantees, insurance and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such Contract whether pursuant to

                                      1-15
<PAGE>

the agreement giving rise to such Contract or otherwise, and (iv) all records in
respect of such Contract.

         "Computer Tape" means the computer tape generated by the Originator
which provides information relating to the Contracts and which was used by the
Originator in selecting the Contracts, and includes the master file and the
history file.

         "Contracts" means the manufactured housing installment sales contracts
and installment loan agreements, including any Land-and-Home Contracts,
described in the List of Contracts and constituting part of the corpus of the
Trust, which Contracts are to be assigned and conveyed by the Seller to the
Trust, and includes, without limitation, all related security interests and any
and all rights to receive payments which are due pursuant thereto after the
applicable Cut-off Date, but excluding any rights to receive payments which are
due pursuant thereto on or before the applicable Cut-off Date.

         "Contract File" means, as to each Contract, other than a Land-and-Home
Contract, (a) the original copy of the Contract, (b) either (i) the original
title document for the related Manufactured Home or a duplicate certified by the
appropriate governmental authority which issued the original thereof or the
application for such title document or (ii) if the laws of the jurisdiction in
which the related Manufactured Home is located do not provide for the issuance
of title documents for manufactured housing, other evidence of ownership of the
related Manufactured Home which is customarily relied upon in such jurisdiction
as evidence of title to a manufactured housing unit, (c) evidence of one or more
of the following types of perfection of the security interest in the related
Manufactured Home granted by such Contract, as appropriate: (i) notation of such
security interest on the title document, (ii) a financing statement meeting the
requirements of the UCC, with evidence of recording indicated thereon, or (iii)
such other evidence of perfection of a security interest in a manufactured
housing unit as is customarily relied upon in the jurisdiction in which the
related Manufactured Home is located, (d) the assignment of the Contract from
the originator (if other than Conseco Finance Corp.) to the Originator, (e)
evidence of any other Collateral Security, including with respect to a
Land-in-Lieu Contract, the mortgage or deed of trust, and (f) any extension,
modification or waiver agreement(s).

         "Contract Rate" means, with respect to any particular Contract, the
rate of interest specified in that Contract and computed on a precomputed basis
with an actuarial rebate of unearned interest upon prepayment, provided that the
rebate upon prepayment of Contracts originated in California or Oklahoma may be
computed on the simple interest method if so required by applicable law or
regulations.

         "Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of the execution of this Agreement is
located at the address set forth in Section 12.08.

         "Corresponding Certificate Class" means, with respect to each Class of
Uncertificated Subsidiary Interests, as follows:

                                      1-16
<PAGE>

  Uncertificated Subsidiary Interest           Corresponding Certificate Class
--------------------------------------       -----------------------------------
             Class A-S1                                  Class A-1
             Class A-S2                                  Class A-2
             Class A-S3                                  Class A-3
             Class A-S4                                  Class A-4
             Class A-S5                                  Class A-5
             Class A-S6                                  Class A-6
             Class A-S7                                  Class A-7
             Class M-S1                                  Class M-1
             Class M-S2                                  Class M-2
             Class B-S1                                  Class B-1
             Class B-S2                                  Class B-2

         "Counsel for the Originator and Seller" means Briggs and Morgan, P.A.,
or other legal counsel for the Originator and the Seller.

         "Cumulative Realized Losses" means, as to any Remittance Date, the sum
of the Realized Losses for that Remittance Date and each preceding Remittance
Date since the Cut-off Date.

         "Cumulative Realized Losses Test" means, to be considered "satisfied"
for any Remittance Date:

         (i)      if such Remittance Date occurs between November 1, 2004 and
                  October 31, 2005 (inclusive), that the Cumulative Realized
                  Losses as of such Remittance Date are less than or equal to
                  5.5% of the Cut-off Date Pool Principal Balance;

         (ii)     if such Remittance Date occurs between November 1, 2005 and
                  October 31, 2006 (inclusive), that the Cumulative Realized
                  Losses as of such Remittance Date are less than or equal to
                  7.0% of the Cut-off Date Pool Principal Balance;

         (iii)    if such Remittance Date occurs between November 1, 2006 and
                  October 31, 2007 (inclusive), that the Cumulative Realized
                  Losses as of such Remittance Date are less than or equal to
                  9.0% of the Cut-off Date Pool Principal Balance; and

         (iv)     if such Remittance Date occurs on or after November 1, 2007,
                  that the Cumulative Realized Losses as of such Remittance Date
                  are less than or equal to 10.5% of the Cut-off Date Pool
                  Principal Balance.

         "Current Realized Loss Ratio" means, as to any Remittance Date, a
fraction, expressed as a percentage, the numerator of which is the aggregate
Realized Losses for such Remittance Date and each of the two immediately
preceding Remittance Dates, multiplied by four, and the denominator of which is
the arithmetic average of the Pool Scheduled Principal Balance as of the third
preceding Remittance Date and the Pool Scheduled Principal Balance as of such
Remittance Date.

         "Custodian" means at any time the Trustee or a financial institution
organized under the laws of the United States or any State, which is subject to
supervision and examination by

                                      1-17
<PAGE>

Federal or State authorities and which is not the Originator or an Affiliate of
the Originator, that is acting at such time as Custodian of the Land-and-Home
Contract Files pursuant to Section 4.01.

         "Cut-off Date" means, with respect to the Initial Contracts, August 31,
2000 or the date of origination if later; the Additional Contracts, September
30, 2000; and the Subsequent Contracts, the applicable Subsequent Cut-off Date.

         "Cut-off Date Pool Principal Balance" means the aggregate of the
Cut-off Date Principal Balances of the Contracts. With respect to any
Staged-Funding Contract, the Cut-off Date Principal Balance means the principal
amount stated on such Contract.

         "Cut-off Date Principal Balance" means, as to any Contract, the unpaid
principal balance thereof at the applicable Cut-off Date, after giving effect to
all installments of principal due on or prior thereto. With respect to any
Staged-Funding Contract, the Cut-off Date Principal Balance means the principal
amount stated on such Contract.

         "Defaulted Contract" means a Contract with respect to which the
Servicer commenced repossession or foreclosure procedures, made a sale of such
Contract to a third party for repossession, foreclosure or other enforcement, or
as to which there was a payment delinquent 180 or more days (excluding any
Contract deemed delinquent solely because the Obligor's required monthly payment
was reduced as a result of bankruptcy or similar proceedings).

         "Delinquent Contract" means a Contract that is 60 or more days
delinquent as of the applicable Cut-off Date.

         "Depository" means the initial Depository, The Depository Trust
Company, the nominee of which is CEDE & CO., as the registered Holder of:

         (i)      one Certificate evidencing $130,000,000 in initial aggregate
                  principal balance of the Class A-1 Certificates,

         (ii)     one Certificate evidencing $67,000,000 in initial aggregate
                  principal balance of the Class A-2 Certificates,

         (iii)    one Certificate evidencing $67,000,000 in initial aggregate
                  principal balance of the Class A-3 Certificates,

         (iv)     one Certificate evidencing $101,000,000 in initial aggregate
                  principal balance of the Class A-4 Certificates,

         (v)      one Certificate evidencing $40,000,000 in initial aggregate
                  principal balance of the Class A-5 Certificates,

         (vi)     one Certificate evidencing $117,000,000 in initial aggregate
                  principal balance of the Class A-6 Certificates.

                                      1-18
<PAGE>

         (vii)    one Certificate evidencing $104,250,000 in initial aggregate
                  principal balance of the Class A-7 Certificates.

         (viii)   one Certificate evidencing $37,500,000 in initial aggregate
                  principal balance of the Class M-1 Certificates,

         (ix)     one Certificate evidencing $30,000,000 in initial aggregate
                  principal balance of the Class M-2 Certificates,

         (x)      one Certificate evidencing $22,500,000 in initial aggregate
                  principal balance of the Class B-1 Certificates, and

         (xi)     one Certificate evidencing $26,250,000 in initial aggregate
                  principal balance of the Class B-2 Certificates,

and any permitted successor depository. The Depository shall at all times be a
"clearing corporation" as defined in the Uniform Commercial Code of the State of
New York.

         "Depository Participant" means a broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.

         "Determination Date" means the third Business Day preceding each
Remittance Date during the term of this Agreement.

         "Disqualified Organization" has the meaning assigned in Section
9.02(b)(3).

         "Due Date" means, as to any Contract, the date of the month on which
the scheduled monthly payment for such Contract is due.

         "Due Period" means with respect to any Remittance Date other than the
Remittance Date in November 2000, the period from and including the 16th day of
the second month preceding such Remittance Date, to and including the 15th day
of the month immediately preceding such Remittance Date, and with respect to the
Remittance Date in November 2000, the period from and including the Cut-off Date
for the related Contract to and including October 15, 2000.

         "Electronic Ledger" means the electronic master record of installment
sale contracts of the Originator.

         "Eligible Account" means, at any time, an account which is any of the
following: (i) an account maintained with an Eligible Institution; (ii) a trust
account (which shall be a "segregated trust account") maintained with the
corporate trust department of a federal or state chartered depository
institution or trust company with trust powers and acting in its fiduciary
capacity for the benefit of the Trustee hereunder, which depository institution
or trust company shall have capital and surplus (or, if such depository
institution or trust company is a subsidiary of a bank holding company system,
the bank holding company shall have capital and surplus) of not less than
$50,000,000 and the securities of such depository institution or trust company
(or, if such depository institution or trust company is a subsidiary of a bank
holding company system and

                                      1-19
<PAGE>

such depository institution's or trust company's securities are not rated, the
securities of the bank holding company) shall have a credit rating from each of
Moody's (if rated by Moody's), Standard & Poor's (if rated by Standard & Poor's)
and Fitch (if rated by Fitch) in one of its generic credit rating categories
which signifies investment grade; or (iii) an account that will not cause
Standard & Poor's, Moody's or Fitch to downgrade or withdraw their then-current
ratings assigned to the Certificates, as confirmed in writing by Standard &
Poor's, Moody's and Fitch.

         "Eligible Institution" means any depository institution (which may be
the Trustee or an Affiliate of the Trustee) organized under the laws of the
United States or any State, the deposits of which are insured to the full extent
permitted by law by the Bank Insurance Fund (currently administered by the
Federal Deposit Insurance Corporation), which is subject to supervision and
examination by federal or state authorities and whose short-term deposits have
been rated P-1 by Moody's (if rated by Moody's), A-1+ by Standard & Poor's (if
rated by Standard & Poor's) and F-1+ by Fitch (if rated by Fitch), or whose
unsecured long-term debt has been rated in one of the two highest rating
categories by Moody's, Standard & Poor's (not lower than AA) and Fitch (if rated
by Fitch) in the case of unsecured long-term debt.

         "Eligible Investments" has the meaning assigned in Section 5.05(b).

         "Eligible Servicer" means the Originator or any Person qualified to act
as Servicer of the Contracts under applicable federal and state laws and
regulations, which Person services not less than an aggregate of $100,000,000 in
outstanding principal amount of manufactured housing conditional sales contracts
and installment loan agreements and, so long as any FHA/VA Contract is
outstanding, which Person is qualified under FHA/VA Regulations to act as a
servicer of all such FHA/VA Contracts.

         "Eligible Substitute Contract" means, as to any Replaced Contract for
which such Eligible Substitute Contract is being substituted pursuant to Section
3.06(b), a Contract that (a) as of the date of its substitution, satisfies all
of the representations and warranties (which, except when expressly stated to be
as of origination, shall be deemed to be determined as of the date of its
substitution rather than as of the Cut-off Date or the Closing Date) in Sections
3.02 and 3.03 and does not cause any of the representations and warranties in
Section 3.04, after giving effect to such substitution, to be incorrect, (b)
after giving effect to the scheduled payment due in the month of such
substitution, has a Scheduled Principal Balance that is not greater than the
Scheduled Principal Balance of such Replaced Contract, (c) has a Contract Rate
that is at least equal to the Contract Rate of such Replaced Contract, (d) has a
remaining term to scheduled maturity that is not greater than the remaining term
to scheduled maturity of the Replaced Contract, and (e) is a Land-and-Home
Contract if the Replaced Contract is a Land-and-Home Contract and is otherwise
secured by a Manufactured Home that is similar in type and value to the
collateral serving the Replaced Contract. If more than one Contract is being
substituted pursuant to Section 3.06(b) for more than one Replaced Contract on a
particular date, then the conditions specified above shall be applied to the
Contracts being substituted, in the aggregate, and the Replaced Contracts, in
the aggregate.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

                                      1-20
<PAGE>

         "Errors and Omissions Protection Policy" means the employee errors and
omissions policy maintained by the Servicer or any similar replacement policy
covering errors and omissions by the Servicer's employees, and meeting the
requirements of Section 5.09, all as such policy relates to Contracts comprising
a portion of the corpus of the Trust.

         "Event of Termination" has the meaning assigned in Section 7.01.

         "Excess Interest" means, as to any Remittance Date, the sum of (a)
interest accrued on the Class A-S1 Subsidiary Interest Principal Balance as of
such Remittance Date at a rate per annum equal to the difference between the
Weighted Average Contract Rate as of such Remittance Date and the Class A-1
Remittance Rate, (b) interest accrued on the Class A-S2 Subsidiary Interest
Principal Balance at a rate per annum equal to the difference between the
Weighted Average Contract Rate as of such Remittance Date and the Class A-2
Remittance Rate, (c) interest accrued on the Class A-S3 Subsidiary Interest
Principal Balance at a rate per annum equal to the difference between the
Weighted Average Contract Rate as of such Remittance Date and the Class A-3
Remittance Rate, (d) interest accrued on the Class A-S4 Subsidiary Interest
Principal Balance at a rate per annum equal to the difference between the
Weighted Average Contract Rate as of such Remittance Date and the Class A-4
Remittance Rate, (e) interest accrued on the Class A-S5 Subsidiary Interest
Principal Balance at a rate per annum equal to the difference between the
Weighted Average Contract Rate as of such Remittance Date and the Class A-5
Remittance Rate, (f) interest accrued on the Class A-S6 Subsidiary Interest
Principal at a rate per annum equal to the difference between the Weighted
Average Contract Rate as of such Remittance Date and the Class A-6 Remittance
Rate, (g) interest accrued on the Class A-S7 Subsidiary Interest Principal at a
rate per annum equal to the difference between the Weighted Average Contract
Rate as of such Remittance Date and the Class A-7 Remittance Rate, (h) interest
accrued on the Class M-S1 Subsidiary Interest Principal Balance at a rate per
annum equal to the difference between the Weighted Average Contract Rate as of
such Remittance Date and the Class M-1 Remittance Rate, (i) interest accrued on
the Class M-S2 Subsidiary Interest Principal Balance at a rate per annum equal
to the difference between the Weighted Average Contract Rate as of such
Remittance Date and the Class M-2 Remittance Rate, (j) interest accrued on the
Class B-S1 Subsidiary Interest Principal Balance at a rate per annum equal to
the difference between the Weighted Average Contract Rate as of such Remittance
Date and the Class B-1 Remittance Rate, and (k) interest accrued on the Class
B-S2 Subsidiary Interest Principal Balance at a rate per annum equal to the
difference between the Weighted Average Contract Rate as of such Remittance Date
and the Class B-2 Remittance Rate.

         "FHA/VA Contract" means a Contract that, at its origination, was
insured by the Federal Housing Administration or partially guaranteed by the
Veterans Administration.

         "FHA/VA Regulations" means, as to any FHA/VA Contract, the contractual
agreements and regulations of the Federal Housing Administration or the Veterans
Administration, as the case may be, providing or governing the terms of the
insurance for such Contract by the Federal Housing Administration or the partial
guarantee for such Contract by the Veterans Administration, as the case may be.

                                      1-21
<PAGE>

         "Fidelity Bond" means the fidelity bond maintained by the Servicer or
any similar replacement bond, meeting the requirements of Section 5.09, as such
bond relates to Contracts comprising a portion of the corpus of the Trust.

         "Final Remittance Date" means the Remittance Date on which the final
distribution in respect of the Certificates will be made pursuant to Section
12.03.

         "Fitch" means Fitch IBCA, Inc., or any successor thereto; provided that
if Fitch does not then have a rating outstanding on any of the Class A, Class
M-1, Class M-2 or Class B Certificates, then references herein to "Fitch" shall
be deemed to refer to the NRSRO then rating any Class of the Certificates (or,
if more than one such NRSRO is then rating any Class of the Certificates, to
such NRSRO as may be designated by the Servicer), and references herein to
ratings by or requirements of Fitch shall be deemed to have the equivalent
meanings with respect to ratings by or requirements of such NRSRO.

         "Formula Principal Distribution Amount" means, as of any Remittance
Date, the sum of:

         (i)      all scheduled payments of principal due on each outstanding
                  Contract during the related Due Period as specified in the
                  amortization schedule at the time applicable thereto (after
                  adjustments for previous Partial Principal Prepayments and any
                  adjustment to such amortization schedule by reason of any
                  bankruptcy of an Obligor or similar proceeding or any
                  moratorium or similar waiver or grace period, or by reason of
                  any other waiver modification or extension granted by the
                  Servicer in accordance with Section 5.06); plus

         (ii)     all Partial Principal Prepayments applied and all Principal
                  Prepayments in Full received during the related Due Period;
                  plus

         (iii)    the aggregate Scheduled Principal Balance of all Contracts
                  that became Liquidated Contracts during the related Due Period
                  plus the amount of any reduction in principal balance of any
                  Contract during the related Due Period pursuant to bankruptcy
                  proceedings involving the related Obligor; plus

         (iv)     the aggregate Scheduled Principal Balance of all Contracts
                  repurchased during the related Due Period pursuant to Section
                  3.06; plus

         (v)      with respect to the Remittance Date in December 2000 the
                  Unfunded Contract Shortfall, if any; plus

         (vi)     without duplication of the foregoing, all collections in
                  respect of principal on the Contracts received after the last
                  day of the related Due Period up to and including the third
                  Business Day prior to such Remittance Date (but in no event
                  later than the 25th day of the month preceding the Remittance
                  Date); minus

         (vii)    with respect to all Remittance Dates other than the Remittance
                  Date in November 2000, the amount, if any, included in the
                  Formula Principal Distribution Amount for the preceding
                  Remittance Date by virtue of clause (vi) of the definition of
                  Formula Principal Distribution Amount; plus

                                      1-22
<PAGE>

         (viii)   on the Post Funding Remittance Date, the Pre-Funded Amount.

         "Funding Termination Date" means the Business Day immediately preceding
the Remittance Date occurring in the calendar month that is the third calendar
month following the calendar month of the Closing Date, or December 31, 2000.

         "Hazard Insurance Policy" means, with respect to each Contract, the
policy of fire and extended coverage insurance (and federal flood insurance, if
the Manufactured Home is secured by an FHA/VA Contract and such Manufactured
Home is located in a federally designated special flood area) required to be
maintained for the related Manufactured Home, as provided in Section 5.09, and
which, as provided in said Section 5.09, may be a blanket mortgage impairment
policy maintained by the Servicer in accordance with the terms and conditions of
said Section 5.09.

         "Independent" means, when used with respect to any specified Person,
Briggs and Morgan, P.A. or any Person who (i) is in fact independent of the
Originator and the Servicer, (ii) does not have any direct financial interest or
any material indirect financial interest in the Originator or the Servicer or in
an Affiliate of either and (iii) is not connected with the Originator or the
Servicer as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions. Whenever it is provided herein
that any Independent Person's opinion or certificate shall be furnished to the
Trustee, such opinion or certificate shall state that the signatory has read
this definition and is Independent within the meaning set forth herein.

         "Initial Contracts" means certain Contracts identified in the List of
Contracts delivered pursuant to Section 2.02(a), all of which were originated on
or before September 7, 2000, and which have an aggregate principal balance as of
the Cut-off Date of approximately $363,950,052.05.

         "Insurance Proceeds" means proceeds paid by any insurer pursuant to any
insurance policy or contract or any FHA/VA Contract.

         "Land-and-Home Contract" means a Contract that is secured by a Mortgage
on real estate on which the related Manufactured Home is situated, and which
Manufactured Home is considered or classified as part of the real estate under
the laws of the jurisdiction in which it is located.

         "Land-and-Home Contract File" means, as to each Land-and-Home Contract,
(a) the original executed copy of the Land-and-Home Contract; (b) the original
related Mortgage with evidence of recording thereon (or, if the original
Mortgage has not yet been returned by the applicable recording office, a copy
thereof, certified by such recording office, which will be replaced by the
original Mortgage when it is so returned) and any title document for the related
Manufactured Home; (c) the assignment of the Land-and-Home Contract and the
related Mortgage from the originator (if other than Conseco Finance Corp.) to
the Originator; (d) an endorsement of such Land-and-Home Contract by the Seller
to the Trustee or in blank; (e) an assignment of the related Mortgage to the
Trustee or in blank; and (f) any extension, modification or waiver agreement(s).

                                      1-23
<PAGE>

         "Land-in-Lieu Contract" means a Contract that is secured by (i) a
security interest in a Manufactured Home and (ii) a mortgage or deed of trust on
real estate on which such Manufactured Home is situated, but such Manufactured
Home is not considered or classified as part of the real estate under the laws
of the jurisdiction in which it is located.

         "Liquidated Contract" means any defaulted Contract as to which the
Servicer has determined that all amounts which it expects to recover from or on
account of such Contract have been recovered; provided that any defaulted
Contract in respect of which the related Manufactured Home and, in the case of
Land-and-Home Contracts, Mortgaged Property, have been realized upon and
disposed of and the proceeds of such disposition have been received shall be
deemed to be a Liquidated Contract.

         "Liquidation Expenses" means out-of-pocket expenses (exclusive of any
overhead expenses) which are incurred by the Servicer in connection with the
liquidation of any defaulted Contract, on or prior to the date on which the
related Manufactured Home and, in the case of Land-and-Home Contracts, Mortgaged
Property, are disposed of, including, without limitation, legal fees and
expenses, and any related and unreimbursed expenditures for property taxes,
property preservation or restoration of the property to marketable condition.

         "Liquidation Proceeds" means cash (including Insurance Proceeds)
received in connection with the liquidation of defaulted Contracts, whether
through repossession, foreclosure sale or otherwise, including any rental income
realized from the repossessed Manufactured Home.

         "List of Contracts" means the lists identifying each Contract
constituting part of the corpus of the Trust, and which lists are either
delivered pursuant to Section 2.02(a) of this Agreement or attached to a
Subsequent Transfer Instrument as Exhibit A, as such lists may be amended from
time to time pursuant to Section 3.06(b) to add Eligible Substitute Contracts
and delete Replaced Contracts. Each List of Contracts shall set forth as to each
Contract identified on it (i) the Cut-off Date Principal Balance, (ii) the
amount of monthly payments due from the Obligor, (iii) the Contract Rate and
(iv) the maturity date.

         "Loan-to-Value Ratio" means, (a) with respect to any Contract other
than a Land-in-Lieu Contract, one minus a fraction, the numerator of which is
the total amount down (which may include both cash (plus, in certain cases, fees
and insurance premiums financed, but not buydown points) and, for certain
Contracts, the amount of any equity in land on which a lien has been granted)
and the denominator of which is the sum of the original principal amount and
such amount down, and (b) with respect to Land-in-Lieu Contracts, one minus a
fraction, the numerator of which is the appraised value of land and the
denominator of which is the original principal amount.

         "Manufactured Home" means a unit of manufactured housing, including all
accessions thereto, securing the indebtedness of the Obligor under the related
Contract.

         "Master Certificates" means all of the Certificates other than the
Class C Subsidiary Certificate.

                                      1-24
<PAGE>

         "Master REMIC" means one of the two separate REMICs comprising the
corpus of the Trust created by this Agreement, the assets of which shall consist
of the Uncertificated Subsidiary Interests.

         "Maturity Date" means, as to any Certificate, other than a Class C
Certificate, and as to any Uncertificated Subsidiary Interest, the latest
possible maturity date for purposes of complying with the REMIC Provisions
governing "regular interests." The Maturity Dates for such Certificates and
Uncertificated Subsidiary Interests are set forth in Sections 2.05 (b) and (c).

         "Monthly Report" has the meaning assigned in Section 6.01.

         "Monthly Servicing Fee" means, as of any Remittance Date, one-twelfth
of the product of 0.50% and the Pool Scheduled Principal Balance for the
immediately preceding Remittance Date (or, with respect to the first Remittance
Date, the Cut-off Date Pool Principal Balance as of the Closing Date).

         "Moody's" means Moody's Investors Service, Inc., or any successor
thereto; provided that, if Moody's provided a rating on any of the Certificates,
as required by Section 2.02, and does not as of any subsequent date have a
rating outstanding on any of the Class A, Class M-1, Class M-2 or Class B
Certificates, then references herein to "Moody's" shall be deemed to refer to
the NRSRO then rating any Class of the Certificates (or, if more than one such
NRSRO is then rating any Class of the Certificates, to such NRSRO as may be
designated by the Servicer), and references herein to ratings by or requirements
of Moody's shall be deemed to have the equivalent meanings with respect to
ratings by or requirements of such NRSRO.

         "Mortgage" means the mortgage, deed of trust, security deed or similar
evidence of lien, creating a first lien on an estate in fee simple in the real
property securing a Land-and-Home Contract.

         "Mortgaged Property" means the property subject to the lien of a
Mortgage.

         "Net Liquidation Loss" means, as to a Liquidated Contract, the amount,
if any, by which (a) the outstanding principal balance of such Liquidated
Contract plus accrued and unpaid interest thereon to the date on which such
Liquidated Contract became a Liquidated Contract exceeds (b) the Net Liquidation
Proceeds for such Liquidated Contract.

         "Net Liquidation Proceeds" means, as to a Liquidated Contract, all
Liquidation Proceeds received on or prior to the last day of the month in which
such Contract became a Liquidated Contract, net of Liquidation Expenses.

         "NRSRO" means any nationally recognized statistical rating
organization.

         "Obligor" means each Person who is indebted under a Contract.

         "Officer's Certificate" means a certificate signed by the Chairman of
the Board, President or any Vice President of the Originator or the Seller and
delivered to the Trustee.

                                      1-25
<PAGE>

         "Opinion of Counsel" means a written opinion of counsel, who may,
except as expressly provided herein, be salaried counsel for the Originator or
the Seller, acceptable to the Trustee and the Originator or the Seller, provided
that any opinion of counsel relating to the qualification of the Subsidiary
REMIC or the Master REMIC as a REMIC or compliance with the REMIC Provisions
must be an opinion of Independent counsel.

         "Original Class A Principal Balance" means the Original Principal
Balance of the Class A Certificates.

         "Original Principal Balance" means as to each Class of Master
Certificates, the amount set forth with respect to such Class in Section
2.05(b).

         "Overcollateralization Amount" means, as of the Closing Date and the
first Remittance Date, $7,500,000 and as of any other Remittance Date, the
amount by which the aggregate Class Principal Balance of the Certificates as of
such Remittance Date is less than the sum of the Pool Scheduled Principal
Balance and the Pre-Funded Amount as of the immediately preceding Remittance
Date.

         "Partial Principal Prepayment" means (a) any Principal Prepayment other
than a Principal Prepayment in Full and (b) any cash amount deposited in the
Certificate Account pursuant to the provision in Section 3.06(a) or pursuant to
Section 3.06(b).

         "Paying Agent" has the meaning assigned in Section 8.01(c).

         "Percentage Interest" means, as to any Certificate, the percentage
interest evidenced thereby in distributions made on the related Class, such
percentage interest being equal to, in the case of the Class A, Class M and
Class B Certificates, the percentage (carried to eight places) obtained from
dividing the denomination of such Certificate by the Original Principal Balance
of the related Class; and in the case of the Class B-3I and Class C
Certificates, the percentage specified on the face of such Certificate. The
aggregate Percentage Interests for each Class of Certificates shall equal 100%,
respectively.

         "Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.

         "Plan" has the meaning assigned in Section 9.02(b)(2).

         "Pool Factor" means, at any time, the percentage derived from a
fraction, the numerator of which is the aggregate Principal Balance of each
Class of Certificates at such time and the denominator of which is the Cut-off
Date Pool Principal Balance.

         "Pool Scheduled Principal Balance" means, as of any Remittance Date,
the aggregate Scheduled Principal Balance of all Contracts that were outstanding
during the related Due Period.

         "Post-Funding Remittance Date" means the first Remittance Date after
the last day of the Pre-Funding Period.

                                      1-26
<PAGE>

         "Pre-Funded Amount" means with respect to any date of determination,
the amount then on deposit in the Pre-Funding Account, after giving effect to
any sale of Subsequent Contracts to the Trust on such date, excluding any
investment earnings.

         "Pre-Funding Account" means the account so designated, established and
maintained pursuant to Section 8.07.

         "Pre-Funding Period" means the period beginning on the Closing Date and
ending on the earliest of (a) the date on which the amount on deposit in the
Pre-Funding Account is less than $10,000, (b) the Funding Termination Date or
(c) the date on which an Event of Termination occurs.

         "Pre-Funding Subaccount" means the subaccount, if any, so designated,
established and maintained pursuant to Section 8.07.

         "Principal Prepayment" means a payment or other recovery of principal
on a Contract (exclusive of Liquidation Proceeds) which is received in advance
of its scheduled due date and applied upon receipt (or, in the case of a Partial
Principal Prepayment, upon the next scheduled payment date on such Contract) to
reduce the outstanding principal amount due on such Contract prior to the date
or dates on which such principal amount is due.

         "Principal Prepayment in Full" means any Principal Prepayment of the
entire principal balance of a Contract.

         "Rating Agencies" means Standard & Poor's, Moody's and Fitch.

         "Realized Losses" means, as to any Remittance Date, the aggregate Net
Liquidation Losses of all Contracts that became Liquidated Contracts during the
immediately preceding month.

         "Record Date" means the Business Day immediately preceding the related
Remittance Date.

         "Regular Certificate" means a Class A, Class M, Class B or Class B-3I
Certificate.

         "REMIC" means a "real estate mortgage investment conduit" as defined in
Section 860D of the Code.

         "REMIC Provisions" means the provisions of the federal income tax law
relating to REMICs, which appear at Sections 860A through 860G of the Code, and
related provisions and any temporary, proposed or final regulations promulgated
thereunder, as the foregoing may be in effect from time to time.

         "Remittance Date" means the first day of each month during the term of
this Agreement, or if such day is not a Business Day, the next succeeding
Business Day, commencing on November 1, 2000.

                                      1-27
<PAGE>

         "Remittance Rate" means with respect to each Class of Certificates, the
rate set forth for such Class in Section 2.05(b).

         "Replaced Contract" has the meaning assigned in Section 3.06(b).

         "Repurchase Price" means, with respect to a Contract to be repurchased
pursuant to Section 3.06, an amount equal to (a) the remaining principal amount
outstanding on such Contract (or, with respect to an Unfunded Contract being
repurchased pursuant to Section 3.06(c), the Cut-off Date Principal Balance of
such Unfunded Contract), plus (b) interest at the Contract Rate on such Contract
from the end of the Due Period with respect to which the Obligor last made a
payment through the end of the immediately preceding Due Period.

         "Responsible Officer" means, with respect to the Trustee, the chairman
and any vice chairman of the board of directors, the president, the chairman and
vice chairman of any executive committee of the board of directors, every vice
president, assistant vice president, the secretary, every assistant secretary,
cashier or any assistant cashier, controller or assistant controller, the
treasurer, every assistant treasurer, every trust officer, assistant trust
officer and every other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by persons who at the time shall
be such officers, respectively, or to whom a corporate trust matter is referred
because of knowledge of, familiarity with, and authority to act with respect to
a particular matter.

         "Scheduled Principal Balance" means, as to any Contract and any
Remittance Date or the applicable Cut-off Date, the principal balance of such
Contract as of the Due Date in the related Due Period or as of the Due Date
immediately preceding the Cut-off Date, as applicable, as the case may be, as
specified in the amortization schedule at the time relating thereto (after any
adjustment to such amortization schedule by reason of any bankruptcy of an
Obligor or similar proceeding or any moratorium or similar waiver or grace
period) after giving effect to any previous Partial Principal Prepayments and to
the payment of principal due on such Due Date and irrespective of any
delinquency in payment by, or extension granted to, the related Obligor.

         "Servicer" means the Originator until any Service Transfer hereunder
and thereafter means the new servicer appointed pursuant to Article VII.

         "Service Transfer" has the meaning assigned in Section 7.02.

         "Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Contracts whose name
appears on a list of servicing officers appearing in an Officer's Certificate
furnished to the Trustee by the Originator, as the same may be amended from time
to time.

         "Sixty-Day Delinquency Ratio" means, as to any Remittance Date, a
fraction, expressed as a percentage, the numerator of which is the aggregate of
the outstanding balances of all Contracts that were delinquent 60 days or more
as of the end of the related Due Period (including Contracts in respect of which
the related Manufactured Homes have been repossessed but are still in
inventory), and the denominator of which is the Pool Scheduled Principal Balance
as of such Remittance Date.

                                      1-28
<PAGE>

         "Staged-Funding Contract" means an Initial or Additional Contract with
respect to which the Originator has agreed to make multiple disbursements (up to
the related Cut-off Date Principal Balance) with respect to the purchase of the
related Manufactured Home and improvement of the related real estate, but not
all such disbursements have been made as of the Closing Date.

         "Staged-Funding Contract Reserve Account" means the account established
and maintained pursuant to Section 3.08.

         "Standard & Poor's" means Standard & Poor's Rating Services, a division
of The McGraw-Hill Companies, Inc., or any successor thereto; provided that if
Standard & Poor's does not then have a rating outstanding on any of the Class A,
Class M, or Class B Certificates, then references herein to "Standard & Poor's"
shall be deemed to refer to the NRSRO then rating any Class of the Certificates
(or, if more than one NRSRO is then rating any Class of the Certificates, to
such NRSRO as may be designated by the Servicer), and references herein to
ratings by or requirements of Standard & Poor's shall be deemed to have the
equivalent meanings with respect to ratings by or requirements of such NRSRO.

         "Step-up Rate Contract" means any Contract bearing interest during an
initial period or periods at a fixed rate or fixed rates that are lower than the
fixed rate borne thereafter.

         "Subsequent Contract" means a Contract sold by the Company to the Trust
pursuant to Section 2.03, such Contract being identified on Exhibit A attached
to a Subsequent Transfer Instrument.

         "Subsequent Cut-off Date" means, with respect to a Subsequent Contract,
either the last day of the calendar month in which the related Subsequent
Transfer Date occurs or the last day of the preceding calendar month, as
specified by the Seller in the related Addition Notice.

         "Subsequent Transfer Date" means, with respect to each Subsequent
Transfer Instrument, the date on which the related Subsequent Contracts are sold
to the Trust.

         "Subsequent Transfer Instrument" means each Subsequent Transfer
Instrument dated as of a Subsequent Transfer Date executed by the Seller
substantially in the form of Exhibit P, by which the Seller sells Subsequent
Contracts to the Trust.

         "Subsidiary Interest Principal Balance" means, with respect to each
Class of Uncertificated Subsidiary Interests, the Principal Balance of the
Corresponding Certificate Class.

         "Subsidiary Interest Shortfall" means, with respect to each Class of
Uncertificated Subsidiary Interests and any Remittance Date, the amount, if any,
by which the amount distributed on such Class on such Remittance Date pursuant
to Section 8.03(b)(5) is less than the amount specified in Section 8.03(b)(5).

         "Subsidiary REMIC" means one of the two separate REMICs comprising the
corpus of the Trust created by this Agreement, the assets of which shall consist
of (a) all the rights, benefits, and obligations arising from and in connection
with each Contract and any related Mortgage, (b) all rights under any Hazard
Insurance Policy relating to a Manufactured Home

                                      1-29
<PAGE>

securing a Contract for the benefit of the owner of such Contract and proceeds
from the Errors and Omissions Protection Policy and any blanket hazard policy to
the extent such proceeds relate to any Manufactured Home, (c) all rights under
any FHA/VA Regulation pertaining to any FHA/VA Contract, (d) all remittances,
deposits and payments made into the Certificate Account and amounts in the
Certificate Account (other than payments on the Subsidiary Interests), (e) all
proceeds in any way derived from any of the foregoing items, and (f) all
documents contained in the Contract Files or the Land-and-Home Contract Files.

         "Transfer Agreement" means that certain Transfer Agreement between
Conseco Finance Securitizations Corp., as Purchaser, and Conseco Finance Corp.,
as Seller, dated as of even date herewith.

         "Trust" means the trust created by this Agreement, known as
Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate Trust
2000-5, the corpus of which consists of (a) all the rights, benefits, and
obligations arising from and in connection with each Contract and any related
Mortgage, (b) all rights under any Hazard Insurance Policy relating to a
Manufactured Home securing a Contract for the benefit of the owner of such
Contract and proceeds from the Errors and Omissions Protection Policy and any
blanket hazard policy to the extent such proceeds relate to any Manufactured
Home, (c) all rights under any FHA/VA Regulation pertaining to any FHA/VA
Contract, (d) all rights of the Seller under the Transfer Agreement, (e) all
remittances, deposits and payments made into the Certificate Account and amounts
in the Certificate Account, (f) all proceeds in any way derived from any of the
foregoing items, (g) all documents contained in the Contract Files or the
Land-and-Home Contract Files, (h) the obligations and related demand note of the
Company delivered pursuant to Section 3.06(c) and the related Staged-Funding
Contract Reserve Account, if any, (i) the Capitalized Interest Account and (j)
the Pre-Funding Account.

         "Uncertificated Subsidiary Interests" means the Class A-S1, A-S2, A-S3,
A-S4, A-S5, A-S6, A-S7, M-S1, M-S2, B-S1 and B-S2 Interests, collectively.

         "Undelivered Contract" means as of any date of determination an Initial
or Additional Contract identified, on the exception report attached to the
Acknowledgement delivered by the Trustee under Section 2.04, as a Land-and-Home
Contract as to which the Trustee did not receive the related Land-and-Home
Contract File as of the Closing Date and has not received the related
Land-and-Home Contract File and remitted payment to the Seller pursuant to
Section 8.07(c).

         "Undelivered Contract Subaccount" means the subaccount so designated
and established and maintained pursuant to Section 8.07.

         "Underwriters" means Lehman Brothers, Inc., Credit Suisse First Boston
Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Banc of
America Securities, LLC.

         "Underwriting Agreement" means the Underwriting Agreement and related
Terms Agreement, each dated as of September 28, 2000, among the Originator, the
Seller and the Underwriters.

         "Unfunded Contract" has the meaning specified in Section 3.06(c).

                                      1-30
<PAGE>

         "Unfunded Contract Shortfall" has the meaning specified in Section
3.06(c).

         "Unpaid Class A Interest Shortfall" means, as to each Class of Class A
Certificates and any Remittance Date, the amount, if any, of the Class A
Interest Shortfall applicable to such Class for the prior Remittance Date, plus
accrued interest (to the extent payment thereof is legally permissible) at the
related Remittance Rate on the amount thereof from such prior Remittance Date to
such current Remittance Date (calculated in the manner specified in Section
1.03).
         "Unpaid Class A Principal Shortfall" means, as to each Class of Class A
Certificates and any Remittance Date, the amount, if any, by which the aggregate
of the Class A Principal Shortfalls for prior Remittance Dates is in excess of
the amounts distributed on prior Remittance Dates to Holders of Class A
Certificates pursuant to Section 8.03(a)(6)(ii).

         "Unpaid Class B-1 Interest Shortfall" means, as to any Remittance Date,
the amount, if any, of the Class B-1 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class B-1 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).

         "Unpaid Class B-2 Interest Shortfall" means, as to any Remittance Date,
the amount, if any, of the Class B-2 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class B-2 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).

         "Unpaid Class B-1 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the sum of (i) the amount, if any, of the remainder of (x) the
Class B-1 Liquidation Loss Interest Amount, if any, for the immediately prior
Remittance Date, plus (y) the Unpaid Class B-1 Liquidation Loss Interest
Shortfall determined as of such immediately prior Remittance Date, minus (z) all
amounts distributed to the Holders of the Class B-1 Certificates on account of
any Unpaid Class B-1 Liquidation Loss Interest Shortfall pursuant to Section
8.03(a)(9)(iv) on such immediately prior Remittance Date, plus (ii) accrued
interest (to the extent payment thereof is legally permissible) at the Class B-1
Remittance Rate on the amount specified in clause (i) from such prior Remittance
Date to such current Remittance Date (calculated in the manner specified in
Section 1.03).

         "Unpaid Class B-1 Principal Shortfall" means, as to any Remittance
Date, the amount, if any, by which the aggregate of the Class B-1 Principal
Shortfalls for prior Remittance Dates is in excess of the amounts distributed on
prior Remittance Dates to Holders of Class B-1 Certificates pursuant to Section
8.03(a)(9)(i).

         "Unpaid Class B-2 Principal Shortfall" means, as to any Remittance
Date, the amount, if any, by which the aggregate of the Class B-2 Principal
Shortfalls for prior Remittance Dates is in excess of the amounts distributed on
prior Remittance Dates to Holders of Class B-2 Certificates pursuant to Section
8.03(a)(10)(iii).

                                      1-31
<PAGE>

         "Unpaid Class B-3I Shortfall" means, as to any Remittance Date, the
amount, if any, by which the aggregate of the Class B-3I Shortfalls for prior
Remittance Dates is in excess of the amounts distributed on prior Remittance
Dates to Holders of Class B-3I Certificates pursuant to Section 8.03(a)(13) in
respect of any Unpaid Class B-3I Shortfall.

         "Unpaid Class M-1 Interest Shortfall" means, as to any Remittance Date,
the amount, if any, of the Class M-1 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class M-1 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).

         "Unpaid Class M-2 Interest Shortfall" means, as to any Remittance Date,
the amount, if any, of the Class M-2 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class M-2 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).

         "Unpaid Class M-1 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the sum of (i) the amount, if any, of the remainder of (x) the
Class M-1 Liquidation Loss Interest Amount, if any, for the immediately prior
Remittance Date, plus (y) the Unpaid Class M-1 Liquidation Loss Interest
Shortfall determined as of such immediately prior Remittance Date, minus (z) all
amounts distributed to the Holders of the Class M-1 Certificates on account of
any Unpaid Class M-1 Liquidation Loss Interest Shortfall pursuant to Section
8.03(a)(7)(iv) on such immediately prior Remittance Date, plus (ii) accrued
interest (to the extent payment thereof is legally permissible) at the Class M-1
Remittance Rate on the amount specified in clause (i) from such prior Remittance
Date to such current Remittance Date (calculated in the manner specified in
Section 1.03).

         "Unpaid Class M-2 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the sum of (i) the amount, if any, of the remainder of (x) the
Class M-2 Liquidation Loss Interest Amount, if any, for the immediately prior
Remittance Date, plus (y) the Unpaid Class M-2 Liquidation Loss Interest
Shortfall determined as of such immediately prior Remittance Date, minus (z) all
amounts distributed to the Holders of the Class M-2 Certificates on account of
any Unpaid Class M-2 Liquidation Loss Interest Shortfall pursuant to Section
8.03(a)(8)(iv) on such immediately prior Remittance Date, plus (ii) accrued
interest (to the extent payment thereof is legally permissible) at the Class M-2
Remittance Rate on the amount specified in clause (i) from such prior Remittance
Date to such current Remittance Date (calculated in the manner specified in
Section 1.03).

         "Unpaid Class M-1 Principal Shortfall" means, as to any Remittance
Date, the amount, if any, by which the aggregate of the Class M-1 Principal
Shortfalls for prior Remittance Dates is in excess of the amounts distributed on
prior Remittance Dates to Holders of Class M-1 Certificates pursuant to Section
8.03(a)(7)(i).

         "Unpaid Class M-2 Principal Shortfall" means, as to any Remittance
Date, the amount, if any, by which the aggregate of the Class M-2 Principal
Shortfalls for prior Remittance Dates is

                                      1-32
<PAGE>

in excess of the amounts distributed on prior Remittance Dates to Holders of
Class M-2 Certificates pursuant to Section 8.03(a)(8)(i).

         "Unpaid Subsidiary Interest Shortfall" means, as to any Remittance Date
and any Class of Uncertificated Subsidiary Interests, the amount, if any, of the
Subsidiary Interest Shortfall for the prior Remittance Date with respect to such
Class, plus accrued interest (to the extent payment thereof is legally
permissible) at 1/12th of the Weighted Average Contract Rate on the amount
thereof from such prior Remittance Date to such current Remittance Date.

         "Weighted Average Contract Rate" means, as to any Remittance Date, the
weighted average (determined by Scheduled Principal Balance) of the Contract
Rates of all Contracts that were outstanding during the prior related Due
Period.

         SECTION 1.03. Calculations.
                       ------------

         All calculations of the amount of interest accrued on the Certificates
with respect to any Remittance Date shall be calculated on the basis of a
360-day year of twelve 30-day months.

                                      1-33
<PAGE>

                                   ARTICLE II

                  ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS
                  ---------------------------------------------

         SECTION 2.01. Closing.
                       -------

         a.       There is hereby created, by the Seller as settlor, a separate
trust which shall be known as Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificate Trust 2000-5. By the execution and delivery of this
Agreement, the Seller has agreed that it will elect or will cause an election to
be made to treat the pool of assets comprising each of the Subsidiary REMIC and
the Master REMIC, excluding the Staged-Funding Contract Reserve Account, the
obligation and related demand note of the Originator pursuant to Section
3.06(c), the Capitalized Interest Account and the Pre-Funding Account, as a
REMIC. The Trust shall be administered pursuant to the provisions of this
Agreement for the benefit of the Certificateholders.

         b.       The Seller hereby transfers, assigns, delivers, sells, sets
over and otherwise conveys to the Trustee on behalf of the Trust, by execution
of an assignment substantially in the form of Exhibit D hereto, (1) all the
right, title and interest of the Seller in and to the Contracts, including,
without limitation, all right, title and interest in and to the Collateral
Security, all rights to receive payments on or with respect to the Contracts
(other than the principal and interest due on the Contracts on or before the
applicable Cut-off Date) and all rights of the Seller under the Transfer
Agreement, (2) all rights under every Hazard Insurance Policy relating to a
Manufactured Home securing a Contract for the benefit of the owner of such
Contract, (3) all rights under all FHA/VA Regulations pertaining to any Contract
that is an FHA/VA Contract, (4) the proceeds from the Errors and Omissions
Protection Policy and all rights under any blanket hazard insurance policy to
the extent they relate to the Manufactured Homes, (5) all documents contained in
the Contract Files and the Land-and-Home Contract Files, (6) $20,504,357.70 paid
by the Underwriters of the Certificates to the Trustee by order of the Seller
out of the proceeds of the sale of the Certificates (which such Underwriters
shall, by order of the Trust, remit directly to the Staged-Funding Contract
Reserve Amount), (7) amounts on deposit in the Capitalized Interest Account, (8)
amounts on deposit in the Pre-Funding Account and (9) all proceeds and products
in any way derived from any of the foregoing.

         c.       The Seller agrees that it will use its best efforts
(consistent with prudent lending practices) to cause each Staged-Funding
Contract to be fully disbursed on or before the Funding Termination Date. The
additional payment obligations of any Obligor attributable to any further
disbursements on any Staged-Funding Contract made on or before the Funding
Termination Date shall automatically become the property of the Trust, without
further action by the Seller or the Trust. The payment to the Seller by the
Trust and the transfer of additional obligations to the Trust pursuant to this
Section 2.01(c) and Section 3.06(c)(ii) shall be a purchase by the Trust of
qualified mortgages pursuant to a fixed price contract within the meaning of
Section 860G(a)(3) of the Code.

         d.       Although the parties intend that the conveyance of the
Seller's right, title and interest in and to the Contracts and the Collateral
Security pursuant to this Agreement and each Subsequent Transfer Instrument
shall constitute a purchase and sale and not a pledge of security for loans from
the Certificateholders, it is the intent of this Agreement that if such
conveyances

                                       2-1
<PAGE>

are deemed to be a pledge of security for loans from the Certificateholders or
any other Persons (the "Secured Obligations"), the parties intend that the
rights and obligations of the parties to the Secured Obligations shall be
established pursuant to the terms of this Agreement. The parties also intend and
agree that the Seller shall be deemed to have granted to the Trustee, and the
Seller does hereby grant to the Trustee, a perfected first-priority security
interest in the items designated in Section 2.01(b)(1) through 2.01(b)(9) above
and in each Subsequent Transfer Instrument, and all proceeds thereof, to secure
the Secured Obligations, and that this Agreement shall constitute a security
agreement under applicable law. If the trust created by this Agreement
terminates prior to the satisfaction of the claims of any Person under any
Certificates or the Secured Obligations, the security interest created hereby
shall continue in full force and effect and the Trustee shall be deemed to be
the collateral agent for the benefit of such Person.

         SECTION 2.02. Conditions to the Closing.
                       -------------------------

         On or before the Closing Date, the Seller shall deliver or cause to be
delivered the following documents to the Trustee:

         a.       The List of Contracts identifying all Initial and Additional
Contracts, certified by the Chairman of the Board, President or any Vice
President of the Seller.

         b.       A certificate of an officer of each of the Originator and
Seller substantially in the form of Exhibit E hereto.

         c.       An Opinion of Counsel for each of the Originator and Seller
substantially in the form of Exhibit F hereto.

         d.       The Trustee's acknowledgment in the form of Exhibit G hereto.

         e.       A letter acceptable to the Underwriters from
PricewaterhouseCoopers LLP or another nationally recognized accounting firm,
stating that such firm has reviewed the Initial Contracts on a statistical
sampling basis and setting forth the results of such review.

         f.       Copies of resolutions of the board of directors of the Seller
or of the executive committee of the board of directors of the Seller approving
the execution, delivery and performance of this Agreement, the creation of the
Trust and the transactions contemplated hereunder, certified in each case by the
secretary or an assistant secretary of the Seller.

         g.       Officially certified recent evidence of due incorporation and
good standing of the Seller under the laws of the State of Minnesota.

         h.       Evidence of filing with the Secretary of State of Minnesota of
UCC-1 financing statements, (i) executed by the Originator as debtor, naming the
Seller as secured party and listing the Contracts as collateral, and (ii)
executed by the Seller as debtor, naming the Trustee as secured party and
listing the Contracts as collateral.

         i.       The Land-and-Home Contract File for each Initial and
Additional Contract that is a Land-and-Home Contract.

                                       2-2
<PAGE>

         j.       An executed copy of the Assignment of the Seller substantially
in the form of Exhibit D hereto.

         k.       An Officer's Certificate listing the Servicer's Servicing
Officers.

         l.       Evidence of continued coverage of the Servicer under the
Errors and Omissions Protection Policy.

         m.       Evidence of deposit in the Certificate Account of all funds
received with respect to the Initial and Additional Contracts after the Cut-off
Date to the Closing Date, other than amounts due on or before the Cut-off Date,
together with an Officer's Certificate to the effect that such amount is
correct.

         n.       An Officer's Certificate confirming that the Originator's
internal audit department has reviewed the original or a copy of each Initial
and Additional Contract and each related Contract File or Land-and-Home Contract
File, as applicable, that each Initial and Additional Contract and related
Contract File or Land-and-Home Contract File, as applicable, conforms in all
material respects with the List of Contracts and that each such Contract File or
Land-and-Home Contract File, as applicable, is complete in all material respects
and that each Manufactured Home securing a Contract is covered by a Hazard
Insurance Policy as required by Section 3.02(f).

         o.       A letter from Moody's confirming that it has assigned the
Class A Certificates a rating of Aaa, the Class M-1 Certificates a rating of
"Aa2", the Class M-2 Certificates a rating of "A2," and the Class B-1
Certificates a rating of "Baa2."

         p.       A letter from Fitch confirming that it has assigned the Class
A Certificates a rating of "AAA," the Class M-1 Certificates a rating of "AA,"
the Class M-2 Certificates a rating of "A", and the Class B-1 Certificates a
rating of "BBB."

         q.       A letter from Standard & Poor's confirming that it has
assigned the Class A Certificates a rating of AAA, the Class M-1 Certificates a
rating of AA, the Class M-2 Certificates a rating of A, and the Class B-1
Certificates a rating of BBB.

         r.       The demand note described in Section 3.06(c)(v).

         s.       An executed copy of the Transfer Agreement.

         t.       Evidence of the deposit of $20,504,357.70 in the
Staged-Funding Contract Reserve Account.

         u.       Evidence of the deposit of $500,000 in the Capitalized
Interest Account.

         v.       Evidence of the deposit of $74,267,854.13 in the Pre-Funding
Account.

         w.       Evidence of the deposit in the Undelivered Contract Subaccount
of an amount equal to the difference between the aggregate Cut-off Date
Principal Balances of the Initial and

                                       2-3
<PAGE>

Additional Contracts and the aggregate Cut-off Date Principal Balances of the
Undelivered Contracts.

         x.       Any other documents or certificates that the Trustee may
reasonably request.

         SECTION 2.03. Conveyance of the Subsequent Contracts.
                       --------------------------------------

         a.       Subject to the conditions set forth in paragraph (b) below, in
consideration of the Trustee's delivery on the related Subsequent Transfer Dates
to or upon the order of the Seller of all or a portion of the balance of funds
in the Pre-Funding Account, the Seller shall on any Subsequent Transfer Date
sell, transfer, assign, set over and convey to the Trust by execution and
delivery of a Subsequent Transfer Instrument, all the right, title and interest
of the Seller in and to the Subsequent Contracts identified on the List of
Contracts attached to the Subsequent Transfer Instrument, including all rights
to receive payments on or with respect to the Subsequent Contracts due after the
applicable Cut-off Date, and all items with respect to such Subsequent Contracts
in the related Contract Files and Land-and-Home Contract Files. The transfer to
the Trustee by the Seller of the Subsequent Contracts shall be absolute and is
intended by the Seller, the Trustee and the Certificateholders to constitute and
to be treated as a sale of the Subsequent Contracts by the Seller to the Trust.

         The purchase price paid by the Trustee shall be one hundred percent
(100%) of the aggregate Cut-off Date Principal Balances of such Subsequent
Contracts. The purchase price of Subsequent Contracts shall be paid solely with
amounts in the Pre-Funding Account. This Agreement shall constitute a fixed
price contract in accordance with Section 860G(a)(3)(A)(ii) of the Code.

         b.       The Seller shall transfer the Subsequent Contracts to the
Trustee, and the Trustee shall release funds from the Pre-Funding Account, only
upon the satisfaction of each of the following conditions on or prior to the
related Subsequent Transfer Date:

                  (i)      the Seller shall have provided the Trustee with an
         Addition Notice at least five Business Days prior to the Subsequent
         Transfer Date and shall have provided any information reasonably
         requested by the Trustee with respect to the Subsequent Contracts;

                  (ii)     the Seller shall have delivered the related
         Land-and-Home Contract File for each Subsequent Land-and-Home Contract
         to the Custodian at least two Business Days prior to the Subsequent
         Transfer Date;

                  (iii)    the Seller shall have delivered to the Trustee a duly
         executed Subsequent Transfer Instrument substantially in the form of
         Exhibit P, which shall include a List of Contracts identifying the
         related Subsequent Contracts;

                  (iv)     as of each Subsequent Transfer Date, the Seller shall
         not be insolvent nor shall it have been made insolvent by such transfer
         nor shall it be aware of any pending insolvency, as certified in an
         Officer's Certificate substantially in the form attached hereto as
         Exhibit Q;

                                       2-4
<PAGE>

                  (v)      such sale and transfer shall not result in a material
         adverse tax consequence to the Trust (including the Master REMIC and
         the Subsidiary REMIC) or the Certificateholders;

                  (vi)     the Pre-Funding Period shall not have ended;

                  (vii)    the Seller shall have delivered to the Trustee an
         Officer's Certificate, substantially in the form attached hereto as
         Exhibit Q, confirming the satisfaction of each condition precedent and
         the representations specified in this Section 2.03 and in Sections 3.01
         and 3.03; and

                  (viii)   the Seller and the Originator shall have delivered to
         the Trustee Opinions of Counsel addressed to the Rating Agencies and
         the Trustee with respect to the transfer of the Subsequent Contracts
         substantially in the form of the Opinions of Counsel delivered to the
         Trustee on the Closing Date regarding certain bankruptcy, corporate and
         tax matters.

                  (ix)     the Seller shall have delivered to the Trustee a copy
         of the executed Subsequent Transfer Agreement between the Originator
         and the Seller, substantially in the form of Exhibit A to the Transfer
         Agreement and dated as of the Subsequent Transfer Date.

         c.       Before the last day of the Pre-Funding Period, the Seller
shall deliver to the Trustee:

                  (i)      A letter from PricewaterhouseCoopers LLP or another
         nationally recognized accounting firm retained by the Seller (with
         copies provided to the Rating Agencies, the Underwriters and the
         Trustee) that is in form, substance and methodology the same as that
         delivered under Section 2.02(e) of this Agreement, except that it shall
         address the Subsequent Contracts and their conformity in all material
         respects to the characteristics described in Section 3.04(c) of this
         Agreement.

                  (ii)     Evidence that as a result of the purchase by the
         Trust of the Subsequent Contracts, the Class A Certificates shall not
         receive from any of the Rating Agencies a lower credit rating than the
         rating assigned to such Certificates as of the Closing Date.

                  (iii)    Evidence that the aggregate Cut-off Date Principal
         Balance of the Subsequent Contracts, not specifically identified as
         Subsequent Contracts as of the Closing Date, does not exceed 25% of the
         Original Principal Balance.

         SECTION 2.04. Acceptance by Trustee.
                       ---------------------

         a.       On the Closing Date and each Subsequent Transfer Date, if the
conditions set forth in Section 2.02 and 2.03, respectively, have been
satisfied, the Trustee shall deliver a certificate to the Seller substantially
in the form of Exhibit G hereto acknowledging conveyance of the Contracts,
identified on the applicable List of Contracts and the related Contract Files
and Land-and-Home Contract Files to the Trustee and declaring that the Trustee,
directly or through a custodian, will hold all Contracts that have been
delivered in trust, upon the terms herein set

                                       2-5
<PAGE>

forth, for the use and benefit of all Certificateholders and on the Closing Date
the Trustee shall issue to or upon the order of the Seller Certificates
representing ownership of a beneficial interest in 100% of the Trust.

         b.       If, in its review of the Land-and-Home Contract Files as
described in Exhibit G, the Trustee or its Custodian discovers a breach of the
representations or warranties set forth in Sections 2.02(n), 3.02, 3.03, 3.04 or
3.05, the Seller and the Originator shall cure such breach or repurchase or
replace such Contract pursuant to Section 3.06.

         SECTION 2.05. REMIC Provisions.
                       ----------------

         a.       The Originator, as Servicer, and the Class C Subsidiary
Certificateholder and the Class C Master Certificateholder, by acceptance
thereof, each agrees that, in accordance with the requirements of Section
860D(b)(1) of the Code, the federal tax return of each of the Subsidiary REMIC
and the Master REMIC for its first taxable year shall provide that the
Subsidiary REMIC or the Master REMIC, as the case may be (excluding the
Capitalized Interest Account, the obligation and related demand note of the
Originator pursuant to Section 3.06(c), the Staged-Funding Contract Reserve
Account and the Pre-Funding Account) elects to be treated as a REMIC for such
taxable year and all subsequent taxable years. In furtherance of the foregoing,
the Trustee (at the direction of the Originator, the Seller or the Servicer) and
the Originator, the Seller and the Servicer shall take, or refrain from taking,
all such action as is necessary to maintain the status of each of the Subsidiary
REMIC or the Master REMIC as a REMIC under the REMIC provisions of the Code,
including, but not limited to, the taking of such action as is necessary to cure
any inadvertent termination of REMIC status.

         b.       The Regular Certificates are being issued in twelve classes
and are hereby designated by the Originator as constituting the "regular
interests" in the Master REMIC for the purposes of Section 860G(a)(1) of the
Code. The following terms of the Regular Certificates are irrevocably
established as of the Closing Date:

                                       2-6
<PAGE>

                         Pass-Through     Original Class
    Class               Rate Per Annum   Principal Balance       Maturity Date
---------------------   --------------   -----------------    ------------------
Class A-1                     6.98%        $130,000,000        February 1, 2032
Class A-2                     7.06%        $ 67,000,000        February 1, 2032
Class A-3                     7.21%        $ 67,000,000        February 1, 2032
Class A-4                     7.47%        $101,000,000        February 1, 2032
Class A-5                     7.70%        $ 40,000,000        February 1, 2032
Class A-6                     7.96%        $117,000,000        February 1, 2032
Class A-7                    *8.20%        $104,250,000        February 1, 2032
Class M-1                    *8.40%        $ 37,500,000        February 1, 2032
Class M-2                    *9.03%        $ 30,000,000        February 1, 2032
Class B-1                   *10.21%        $ 22,500,000        February 1, 2032
Class B-2                    *9.80%        $ 26,250,000        February 1, 2032
Class B-3I                                      **

--------------
*    A floating rate (determined monthly on each Remittance Date) equal to the
     Weighted Average Contract Rate, but in no event greater than the related
     Remittance Rate specified above.

**   The Class B-3I Certificates are interest-only Certificates entitled to the
     payment of Excess Interest.

The Seller does not represent that any Class of Regular Certificates will, in
fact, mature on any given date. The Class C Master Certificate is being issued
in a single Class and is hereby designated by the Seller as constituting the
sole class of "residual interests" in the Master REMIC for purposes of Section
860G(a)(2) of the Code.

         c.       The Uncertificated Subsidiary Interests are being issued in
eleven classes and are hereby designated by the Seller as constituting the
"regular interests" in the Subsidiary REMIC for the purposes of Section
860G(a)(1) of the Code. The following terms of the Uncertificated Subsidiary
Interests are irrevocably established as of the Closing Date:

                                      2-7
<PAGE>

<TABLE>
<CAPTION>
                                            Original Subsidiary
                        Pass-Through        Interest Principal
      Class            Rate Per Annum             Balance             Maturity Date
-------------------   ----------------      -------------------    ------------------
<S>                         <C>                     <C>                    <C>

Class A-S1            Weighted Average          $130,000,000          February 1, 2032
                      Contract Rate

Class A-S2            Weighted Average          $ 67,000,000          February 1, 2032
                      Contract Rate

Class A-S3            Weighted Average          $ 67,000,000          February 1, 2032
                      Contract Rate

Class A-S4            Weighted Average          $101,000,000          February 1, 2032
                      Contract Rate

Class A-S5            Weighted Average          $ 40,000,000          February 1, 2032
                      Contract Rate

Class A-S6            Weighted Average          $117,000,000          February 1, 2032
                      Contract Rate

Class A-S7            Weighted Average          $104,250,000          February 1, 2032
                      Contract Rate

Class M-S1            Weighted Average          $ 37,500,000          February 1, 2032
                      Contract Rate

Class M-S2            Weighted Average          $ 30,000,000          February 1, 2032
                      Contract Rate

Class B-S1            Weighted Average          $ 22,500,000          February 1, 2032
                      Contract Rate

Class B-S2            Weighted Average          $ 26,250,000          February 1, 2032
                      Contract Rate
</TABLE>

The Seller does not represent that any Class of Uncertificated Subsidiary
Interests will, in fact, mature on any given date. The Class C Subsidiary
Certificate is being issued in a single Class and is hereby designated by the
Seller as constituting the sole class of "residual interests" in the Subsidiary
REMIC for purposes of Section 860G(a)(2) of the Code.

         d.       The Closing Date, which is the day on which each of the
Subsidiary REMIC and the Master REMIC will issue all of its regular and residual
interests, is hereby designated as the "startup day" of both the Subsidiary
REMIC and the Master REMIC within the meaning of Section 860G(a)(9) of the Code.

         e.       After the Closing Date, neither the Trustee, the Originator,
the Seller nor any Servicer shall (i) accept any contribution of assets to the
Subsidiary REMIC or the Master REMIC, (ii) dispose of any portion of the
Subsidiary REMIC or the Master REMIC, other than as provided in Sections 3.06,
3.07 and 8.05, (iii) engage in any "prohibited transaction," as

                                      2-8
<PAGE>

defined in Sections 860F(a)(2) and (5) of the Code, except as may be
contemplated by Section 3.06(c), (iv) accept any contribution after the Closing
Date that is subject to the tax imposed by Section 860G(d) of the Code or (v)
engage in any activity or enter into any agreement that would result in the
receipt by the Subsidiary REMIC or the Master REMIC of any "net income from
foreclosure property" as defined in Section 860G(c)(2) of the Code, unless,
prior to any such action set forth in clauses (i), (ii), (iii), (iv) or (v) the
Trustee shall have received an unqualified Opinion of Counsel, which opinion
shall not be an expense of the Trust, stating that such action will not,
directly or indirectly, (A) adversely affect the status of the Subsidiary REMIC
or the Master REMIC as a REMIC or the status of the Uncertificated Subsidiary
Interests as "regular interests" in the Subsidiary REMIC, the status of the
Class C Subsidiary Certificates as the sole class of "residual interests" in the
Subsidiary REMIC, the status of the Regular Certificates as "regular interests"
in the Master REMIC, or the status of the Class C Master Certificates as the
sole class of "residual interests" in the Master REMIC, (B) affect the
distributions payable hereunder to the Certificateholders or (C) result in the
imposition of any lien, charge or encumbrance upon the Subsidiary REMIC or the
Master REMIC.

         f.       Upon the acquisition of any real property (including interests
in real property), or any personal property incident thereto, in connection with
the default of a Contract, the Servicer and the Trustee (at the direction of the
Servicer) shall take, or cause to be taken, such action as is necessary to sell
or otherwise dispose of such property within such period as is then required by
the Code in order for such property to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code, unless the Servicer and the
Trustee receive an Opinion of Counsel to the effect that the holding by the
Subsidiary REMIC or the Master REMIC of such property subsequent to the period
then permitted by the Code will not result in the imposition of any taxes on
"prohibited transactions" of the Subsidiary REMIC or the Master REMIC, as
defined in Section 860F of the Code, or cause the Subsidiary REMIC or the Master
REMIC to fail to qualify as a REMIC at any time that the Uncertificated
Subsidiary Interests, Class C Subsidiary Certificates, Regular Certificates or
Class C Master Certificates are outstanding. The Servicer shall manage,
conserve, protect and operate such real property, or any personal property
incident thereto, so that such property will not fail to qualify as "foreclosure
property," as defined in Section 860G(a)(8) of the Code, and that the
management, conservation, protection and operation of such property will not
result in the receipt by the Subsidiary REMIC or the Master REMIC of any "income
from nonpermitted assets," within the meaning of Section 860F(a)(2)(B) of the
Code.

                                       2-9
<PAGE>

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

         Each of the Seller and Originator makes the following representations
and warranties on which the Trustee will rely in accepting the Contracts in
trust and issuing the Certificates on behalf of the Trust. The repurchase or
substitution obligation of the Originator set forth in Section 3.06 constitutes
the sole remedy available to the Trust or the Certificateholders for a breach of
a representation or warranty of the Originator set forth in Section 2.02(n),
3.02, 3.03, 3.04 or 3.05 of this Agreement.

         SECTION 3.01. Representations and Warranties Regarding the Seller.
                       ---------------------------------------------------

         The Seller represents and warrants to the Trustee and the
Certificateholders, effective on the Closing Date and each Subsequent Transfer
Date, that:

         a.       Organization and Good Standing. The Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its assets
and to transact the business in which it is currently engaged. The Seller is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Seller.

         b.       Authorization; Binding Obligations. The Seller has the power
and authority to make, execute, deliver and perform this Agreement and all of
the transactions contemplated under this Agreement, and to create the Trust and
cause it to make, execute, deliver and perform its obligations under this
Agreement and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and to cause the Trust to
be created. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Seller enforceable in accordance with
its terms, except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and by the availability of equitable remedies.

         c.       No Consent Required. The Seller is not required to obtain the
consent of any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement.

         d.       No Violations. The execution, delivery and performance of this
Agreement by the Seller will not violate any provision of any existing law or
regulation or any order or decree of any court or the Articles of Incorporation
or Bylaws of the Seller, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Seller or Originator is a
party or by which the Seller may be bound.

         e.       Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to the
knowledge of the Seller threatened,

                                       3-1
<PAGE>

against the Seller or any of its properties or with respect to this Agreement or
the Certificates which, if adversely determined, would in the opinion of the
Seller have a material adverse effect on the transactions contemplated by this
Agreement.

         f.       Licensing. The Seller is duly registered as a finance company
in each state in which Contracts were originated, to the extent such
registration is required by applicable law.

         SECTION 3.02. Representations and Warranties Regarding Each Contract.
                       ------------------------------------------------------

         The Originator has made the following representations and warranties to
the Seller in the Transfer Agreement, which representations and warranties the
Seller has assigned to the Trustee for the benefit of the Certificateholders, as
of the Closing Date with respect to each Initial and Additional Contract, and as
of the applicable Subsequent Transfer Date with respect to each Subsequent
Contract identified on the List of Contracts attached to the related Subsequent
Transfer Agreement:

         a.       List of Contracts. The information set forth in the applicable
List of Contracts is true and correct as of its date.

         b.       Payments. As of the Cut-off Date, the most recent scheduled
payment was made by or on behalf of the Obligor (without any advance from the
Originator or any Person acting at the request of the Originator) or was not
past due for more than 59 days (in the case of an Initial or Additional
Contract) or 30 days (in the case of a Subsequent Contract).

         c.       No Waivers. The terms of the Contract have not been waived,
altered or modified in any respect, except by instruments or documents
identified in the Contract File or Land-and-Home Contract File, as applicable.

         d.       Binding Obligation. The Contract is the legal, valid and
binding obligation of the Obligor thereunder and is enforceable in accordance
with its terms, except as such enforceability may be limited by laws affecting
the enforcement of creditors' rights generally.

         e.       No Defenses. The Contract is not subject to any right of
rescission, setoff, counterclaim or defense, including the defense of usury, and
the operation of any of the terms of the Contract or the exercise of any right
thereunder will not render the Contract unenforceable in whole or in part or
subject to any right of rescission, setoff, counterclaim or defense, including
the defense of usury, and no such right of rescission, setoff, counterclaim or
defense has been asserted with respect thereto.

         f.       Insurance Coverage. The Manufactured Home securing the
Contract is covered by a Hazard Insurance Policy in the amount required by
Section 5.09. Each Manufactured Home secured by an FHA/VA Contract which was, at
the time of origination of the related Contract, located within a federally
designated special flood hazard area is covered by insurance coverage at least
equal to that required by Section 5.09 or such lesser coverage as may be
available under the federal flood insurance program. With respect to any other
Contract that is not an FHA/VA Contract, the Originator has obtained: (a) a
statement from the Obligor's insurance agent that the Manufactured Home was, at
the time of origination of the Contract, not in a federally designated special
flood hazard area; or (b) evidence that, at the time of origination, flood
insurance was in

                                       3-2
<PAGE>

effect, which coverage is at least equal to that required by Section 5.09 or
such lesser coverage as may be available under the federal flood insurance
program. All premiums due as of the Closing Date on such insurance have been
paid in full.

         g.       Origination. The Contract was originated by a manufactured
housing dealer and purchased by the Originator, or originated by the Originator
directly, in the regular course of its business.

         h.       Lawful Assignment. The Contract was not originated in and is
not subject to the laws of any jurisdiction whose laws would make the transfer
of the Contract pursuant to this Agreement or pursuant to transfers of
Certificates, or the ownership of the Contract by the Trust, unlawful or render
the Contract unenforceable.

         i.       Compliance with Law. At the date of origination of the
Contract, all requirements of any federal and state laws, rules and regulations
applicable to the Contract, including, without limitation, usury, truth in
lending and equal credit opportunity laws, have been complied with, and the
Originator shall for at least the period of this Agreement, maintain in its
possession, available for the Trustee's inspection, and shall deliver to the
Trustee upon demand, evidence of compliance with all such requirements. Such
compliance is not affected by the Trust's ownership of the Contract.

         j.       Contract in Force. The Contract has not been satisfied or
subordinated in whole or in part or rescinded, and the Manufactured Home
securing the Contract has not been released from the lien of the Contract in
whole or in part.

         k.       Valid Security Interest. Each Contract (other than the
Land-and-Home Contracts) creates a valid and enforceable perfected first
priority security interest in favor of the Originator in the Manufactured Home
covered thereby as security for payment of the Cut-off Date Principal Balance of
such Contract. The Originator has assigned all of its right, title and interest
in such Contract, including the security interest in the Manufactured Home
covered thereby, to the Seller, and the Seller has assigned all of its right,
title and interest in such Contract, including the security interest in the
Manufactured Home covered thereby, to the Trustee. The Trustee has and will have
a valid and perfected and enforceable first priority security interest in such
Contract and Manufactured Home.

         Each Mortgage is a valid first lien in favor of the Seller on real
property securing the amount owed by the Obligor under the related Land-and-Home
Contract subject only to (a) the lien of current real property taxes and
assessments, (b) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to mortgage
lending institutions generally in the area wherein the property subject to the
Mortgage is located or specifically reflected in the appraisal obtained in
connection with the origination of the related Land-and-Home Contract obtained
by the Seller and (c) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the security
intended to be provided by such Mortgage. Each Land-and-Home Contract is covered
by an American Land Title Association, or equivalent form, lender's title
insurance policy. The Seller has assigned all of its right, title and interest
in such Land-and-Home Contract and related Mortgage,

                                       3-3
<PAGE>

including the security interest in the Manufactured Home covered thereby, to the
Trustee. The Trustee has and will have a valid and perfected and enforceable
first priority security interest in such Land-and-Home Contract.

         l.       Capacity of Parties. The signature(s) of the Obligor(s) on the
Contract are genuine and all parties to the Contract had full legal capacity to
execute the Contract.

         m.       Good Title. In the case of a Contract purchased from a
manufactured housing dealer, the Originator purchased the Contract for fair
value and took possession thereof in the ordinary course of its business,
without knowledge that the Contract was subject to a security interest. The
Originator has not sold, assigned or pledged the Contract to any person and
prior to the transfer of the Contract by the Originator to the Seller under the
terms of the Transfer Agreement, the Originator had good and marketable title
thereto free and clear of any encumbrance, equity, loan, pledge, charge, claim
or security interest and was the sole owner thereof with full right to transfer
the Contract to the Seller. With respect to any Contract bearing a stamp
indicating that such Contract has been sold to another party, such other party's
interest in such Contract has been released.

         n.       No Defaults. As of the applicable Cut-off Date, there was no
default, breach, violation or event permitting acceleration existing under the
Contract and no event which, with notice and the expiration of any grace or cure
period, would constitute such a default, breach, violation or event permitting
acceleration under such Contract (except payment delinquencies permitted by
clause (b) above). The Originator has not waived any such default, breach,
violation or event permitting acceleration except payment delinquencies
permitted by clause (b) above. As of the Closing Date or the Subsequent Transfer
Date, as applicable, the related Manufactured Home is, to the best of the
Originator's knowledge, free of damage and in good repair. To the best of the
Originator's knowledge, no Manufactured Home has suffered damage that is not
covered by a Hazard Insurance Policy, including, but not limited to, hurricanes,
earthquakes, floods, tornadoes, hailstorms, straight-line winds, sinkholes,
mudslides, volcanic eruptions, meteorites and other natural disasters.

         o.       No Liens. As of the Closing Date or the Subsequent Transfer
Date, as applicable, there are, to the best of the Originator's knowledge, no
liens or claims which have been filed for work, labor or materials affecting the
Manufactured Home or any related Mortgaged Property securing the Contract which
are or may be liens prior to, or equal or coordinate with, the lien of the
Contract.

         p.       Equal Installments. Except for 149 Step-up Rate Contracts
included among the Initial Contracts and 127 Step-up Rate Contracts included
among the Additional Contracts, each Contract has a fixed Contract Rate and
provides for level monthly payments which fully amortize the loan over its term.
Of the Step-up Rate Contracts which are still bearing interest at their initial
Contract Rates, 264 provide for two rate increases and the remainder provide for
a single rate increase.

         q.       Enforceability. The Contract contains customary and
enforceable provisions so as to render the rights and remedies of the holder
thereof adequate for the realization against the collateral of the benefits of
the security provided thereby.

                                       3-4
<PAGE>

         r.       One Original. There is only one original executed Contract
(other than the original executed copy retained by the Obligor), which Contract
has been delivered to the Trustee or its custodian on or before the Closing Date
or the Subsequent Transfer Date, as applicable. Each Contract (other than the
Land-and-Home Contracts) has been stamped to reflect the assignment of such
Contract to the Trustee.

         s.       Loan-to-Value Ratio. At the time of their origination all of
the Contracts had Loan-to-Value Ratios not greater than 100%; if the related
Manufactured Home was new at the time such Contract was originated, the original
principal balance of such Contract did not exceed 130% of the manufacturer's
invoice price, plus 100% of the taxes and license fees, 130% of the freight
charges, 100% of the dealer's cost of additional dealer-installed equipment (not
to exceed 25% of the original principal balance of such Contract in all states
except California; not to exceed 70% of the manufacturer's invoice price in
California if required to meet park requirements) and up to $1,500 of set-up
costs per module.

         t.       Primary Resident. At the time of origination of the Contract
the Obligor was the primary resident of the related Manufactured Home.

         u.       Not Real Estate. With respect to each Contract other than a
Land-and-Home Contract, the related Manufactured Home is not considered or
classified as part of the real estate on which it is located under the laws of
the jurisdiction in which it is located.

         v.       Notation of Security Interest. With respect to each Contract
other than a Land-and-Home Contract, if the related Manufactured Home is located
in a state in which notation of a security interest on the title document is
required or permitted to perfect such security interest, the title document
shows, or if a new or replacement title document with respect to such
Manufactured Home is being applied for such title document will be issued within
180 days and will show, the Originator or its assignee as the holder of a first
priority security interest in such Manufactured Home; if the related
Manufactured Home is located in a state in which the filing of a financing
statement under the UCC is required to perfect a security interest in
manufactured housing, such filings or recordings have been duly made and show
the Originator or its assignee as secured party. If the related Manufactured
Home secures a Land-and-Home Contract, such Manufactured Home is subject to a
Mortgage properly filed in the appropriate public recording office or such
Mortgage will be properly filed in the appropriate public recording office
within 180 days, naming the Seller as mortgagee. In either case, the Trustee has
the same rights as the secured party of record would have (if such secured party
were still the owner of the Contract) against all Persons (including the Seller
and the Originator and any trustee in bankruptcy of the Seller or the
Originator) claiming an interest in such Manufactured Home.

         w.       Secondary Mortgage Market Enhancement Act. The related
Manufactured Home is a "manufactured home" within the meaning of 42 United
States Code, Section 5402(6). Each manufactured housing dealer from whom the
Originator purchased such Contract, if any, was then approved by the Originator
in accordance with the requirements of the Secretary of Housing and Urban
Development set forth in 24 CFR ss. 201.27. At the origination of each Contract,
the Originator was approved for insurance by the Secretary of Housing and Urban
Development pursuant to Section 2 of the National Housing Act.

                                       3-5
<PAGE>

         x.       Qualified Mortgage. The Contract represents a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code. The Originator
represents and warrants that, either as of the date of origination or the
Closing Date, the fair market value of the property securing each Contract was
not less than 80% of the "adjusted issue price" (within the meaning of the REMIC
Provisions) of such Contract.

         SECTION 3.03. Additional Representations and Warranties. The Seller
hereby represents and warrants to the Trustee for the benefit of the
Certificateholders, as of the Closing Date with respect to each Initial and
Additional Contract and as of each Subsequent Transfer Date with respect to each
Subsequent Contract identified on the List of Contracts attached to the related
Subsequent Transfer Instrument:

         a.       Lawful Assignment. The Contract was not originated in and is
not subject to the laws of any jurisdiction whose laws would make the transfer
of the Contract under this Agreement or pursuant to transfers of the
Certificates unlawful or render the Contract unenforceable. The Seller has duly
executed a valid blanket assignment of the Contracts transferred to the Trust,
and has transferred all its right, title and interest in such Contracts. The
blanket assignment, any and all documents executed and delivered by the Seller
pursuant to Sections 2.01(b) and 2.03(b), and this Agreement each constitutes
the legal, valid and binding obligation of the Seller enforceable in accordance
with its respective terms.

         b.       Good Title. The Seller is the sole owner of the Contract and
has the authority to sell, transfer and assign such Contract to the Trust under
the terms of this Agreement. There has been no assignment, sale or hypothecation
of the Contract by the Seller, which does not terminate upon sale of the
Contract to the Trust. The Seller has good and marketable title to the Contract,
free and clear of any encumbrance, equity, loan, pledge, charge, claim, lien or
encumbrance of any type and has full right to transfer the Contract to the
Trust.

         SECTION 3.04. Representations and Warranties Regarding the Contracts in
                       ---------------------------------------------------------
                       the Aggregate.
                       -------------

         The Originator has represented and warranted to the Seller in the
Transfer Agreement, which representations and warranties the Seller has assigned
to the Trustee for the benefit of the Certificateholders, as of the Closing Date
with respect to the Initial and Additional Contracts, and as of each Subsequent
Transfer Date with respect to the related Subsequent Contracts, that:

         a.       Amounts. The aggregate principal amounts payable by Obligors
under the Contracts (assuming all Staged-Funding Contracts were fully disbursed)
as of the Cut-off Date equal the Cut-off Date Pool Principal Balance. The
aggregate principal amounts payable by Obligors under the Initial Contracts
(assuming all Staged-Funding Contracts included among the Initial Contracts were
fully disbursed) as of the Cut-off Date equal $363,950,052.05. The aggregate
principal amounts payable by Obligors under the Initial and Additional Contracts
(assuming all Staged-Funding Contracts included among the Additional Contracts
were fully disbursed) as of the Cut-off Date equal $675,732,145.87.

         b.       Characteristics of Initial and Additional Contracts. The
Initial and Additional Contracts have the following characteristics as of the
Cut-off Date:

                                       3-6
<PAGE>

                  (i)      of the Initial Contracts, the Obligors on not more
         than 13% (by Cut-off Date Pool Principal Balance) are located in any
         one state; of the Initial and Additional Contracts, the Obligors on not
         more than 12% are located in any one state, the Obligors on not more
         than 5% are located in an area with the same zip code and the Obligors
         on not more than 1% are located in California in an area with the same
         zip code;

                  (ii)     no Initial or Additional Contract has a remaining
         maturity of fewer than 4 months or more than 360 months;

                  (iii)    the final scheduled payment date on the Initial or
         Additional Contract with the latest maturity is in December 2030;

                  (iv)     of the Initial Contracts, approximately 73% (by
         Cut-off Date Pool Principal Balance) is attributable to loans to
         purchase new Manufactured Homes and approximately 27% to used
         Manufactured Homes; of the Initial and Additional Contracts,
         approximately 76% is attributable to loans to purchase new Manufactured
         Homes and approximately 24% to used Manufactured Homes;

                  (v)      no less than 38% of the Initial and Additional
         Contracts (by Cut-off Date Pool Principal Balance) is attributable to
         Land-and-Home Contracts;

                  (vi)     the Weighted Average Contract Rate of the Initial and
         Additional Contracts as of the Cut-off Date is at least 11.86% per
         annum;

                  (vii)    at least 73% of the Initial and Additional Contracts
         (by Cut-off Date Pool Principal Balance) is attributable to loans for
         the purchase of multi-section Manufactured Homes;

                  (viii)   the weighted average (by Cut-off Date Pool Principal
         Balance) loan to value ratio of the Initial and Additional Contracts is
         not more than 88%;

                  (ix)     no Initial Contract was originated before October 28,
         1988 and no Additional Contract was originated before January 1, 1985;
         and

                  (x)      not more than 27% of the Initial and Additional
         Contracts (by Cut-off Date Pool Principal Balance) are secured by
         Manufactured Homes located in a mobile home park.

         c.       Characteristics of All Contracts. The Contracts have the
following characteristics as of the end of the Pre-Funding Period:

                  (i)      the Weighted Average Contract Rate is not less than
         11.80%, and not more than 55.00% of the Cut-off Date Pool Principal
         Balance is attributable to Contracts with a Contract Rate of less than
         11.80%;

                  (ii)     the weighted average (by Cut-off Date Pool Principal
         Balance) Loan-to-Value Ratio of the Contracts is not more than 89%;

                                       3-7
<PAGE>

                  (iii)    not less than 72% of the Cut-off Date Pool Principal
         Balance is attributable to loans for the purchase of new Manufactured
         Homes;

                  (iv)     not more than 30% of the Cut-off Date Pool Principal
         Balance is attributable to loans for the purchase of single-section
         Manufactured Homes, and not less than 70% of the Cut-off Date Pool
         Principal Balance is attributable to loans for the purchase of
         double-section Manufactured Homes;

                  (v)      not less than 30% of the Cut-off Date Pool Principal
         Balance is attributable to Land-and-Home Contracts;

                  (vi)     not more than 30% of the Cut-off Date Pool Principal
         Balance is attributable to loans secured by Manufactured Homes located
         in parks; and

                  (vii)    the final scheduled payment date on the Contract with
         the latest maturity is not later than December 2030.

                  (viii)   the weighted average (by Scheduled Principal Balance)
         credit score (using the Originator's credit scoring system) of the
         Contracts as of the Post-Funding Remittance Date will not be less than
         223, and the percentage (by Scheduled Principal Balance) of the
         Contracts as of the Post-Funding Remittance Date with a credit score
         (using the Originator's credit scoring system) of less than 185 will
         not be greater than 10%; and

                  (ix)     not more than 9% of the Cut-off Date Pool Principal
         Balance is attributable to loans for the purchase of Manufactured Homes
         that had been repossessed.

         d.       Staged-Funding Contracts. Approximately $100,376,593.07 of the
Initial and Additional Contracts, by Cut-off Date Principal Balance, are
Staged-Funding Contracts that had not been fully disbursed by the Cut-off Date.
Approximately $79,872,235.37 of such amount has been disbursed by the Closing
Date, and approximately $20,504,357.70 remains to be disbursed on or before the
Funding Termination Date.

         e.       Computer Tape. The Computer Tape made available by the
Originator was complete and accurate as of its date and includes a description
of the same Contracts that are described in the List of Contracts.

         f.       Marking Records. By the Closing Date or Subsequent Transfer
Date, as applicable, the Originator has caused the portions of the Electronic
Ledger relating to the Contracts to be clearly and unambiguously marked to
indicate that such Contracts constitute part of the Trust and are owned by the
Trust in accordance with the terms of the trust created hereunder.

         g.       No Adverse Selection. Except for the effect of the
representations and warranties made in Sections 3.02 and 3.03 hereof, no adverse
selection procedures have been employed in selecting the Contracts.

                                       3-8
<PAGE>

         SECTION 3.05. Representations and Warranties Regarding the Contract
                       -----------------------------------------------------
                       Files.
                       -----

         The Originator has represented and warranted to the Seller in the
Transfer Agreement, which representations and warranties the Seller has assigned
to the Trustee for the benefit of the Certificateholders, as of the Closing Date
with respect to the Initial and Additional Contracts, and as of each Subsequent
Transfer Date with respect to the related Subsequent Contracts, that:

         a.       Possession. Immediately prior to the Closing Date or the
Subsequent Transfer Date, as applicable, the Originator will have possession of
each original Contract and the related Contract File or Land-and-Home Contract
File and there are and there will be no custodial agreements in effect
materially and adversely affecting the rights of the Originator to make, or
cause to be made, any delivery required hereunder.

         b.       Bulk Transfer Laws. The transfer, assignment and conveyance of
the Contracts and the Contract Files and Land-and-Home Contract Files by the
Originator pursuant to the Transfer Agreement is not subject to the bulk
transfer or any similar statutory provisions in effect in any applicable
jurisdiction.

         SECTION 3.06. Repurchase of Contracts or Substitution of Contracts for
                       --------------------------------------------------------
                       Breach of Representations and Warranties.
                       ----------------------------------------

         a.       The Originator shall repurchase a Contract, at its Repurchase
Price, not later than the first Determination Date that is 90 or more days after
the day on which the Originator, the Servicer, the Seller or the Trustee first
discovers or should have discovered a breach of a representation or warranty of
the Originator set forth in Sections 2.02(n), 3.02, 3.03 or 3.05 of this
Agreement that materially adversely affects the Trust's or the
Certificateholders' interest in such Contract and which breach has not been
cured; provided, however, that (i) in the event that a party other than the
Originator first becomes aware of such breach, such discovering party shall
notify the Originator in writing within five Business Days of the date of such
discovery and (ii) with respect to any Contract incorrectly described on the
List of Contracts with respect to unpaid principal balance, which the Originator
would otherwise be required to repurchase pursuant to this Section, the
Originator may, in lieu of repurchasing such Contract, deliver to the Seller for
deposit in the Certificate Account no later than the first Determination Date
that is 90 or more days from the date of such discovery cash in an amount
sufficient to cure such deficiency or discrepancy. Any such cash so deposited
shall be distributed to Certificateholders on the immediately following
Remittance Date as a collection of principal or interest on such Contract,
according to the nature of the deficiency or discrepancy. Notwithstanding any
other provision of this Agreement, the obligation of the Originator under this
Section shall not terminate upon a Service Transfer pursuant to Article VII.
Notwithstanding the foregoing, the Originator shall repurchase any Land-and-Home
Contract, at such Contract's Repurchase Price, or substitute for it an Eligible
Substitute Contract as described in Section 3.06(b), if the Seller has failed to
deliver the related Land-and-Home Contract File to the Trustee within 30 days of
the Closing Date.

         b.       On or prior to the date that is the second anniversary of the
Closing Date, the Originator, at its election, may substitute one or more
Eligible Substitute Contracts for any

                                      3-9
<PAGE>

Contracts that it is obligated to repurchase pursuant to Section 3.06(a) (such
Contracts being referred to as the "Replaced Contracts") upon satisfaction of
the following conditions:

                  (i)      the Originator shall have conveyed to the Seller the
         Contracts to be substituted for the Replaced Contracts and the Contract
         Files related to such Contracts and the Originator shall have marked
         the Electronic Ledger indicating that such Contracts constitute part of
         the Trust;

                  (ii)     the Contracts to be substituted for the Replaced
         Contracts are Eligible Substitute Contracts and the Originator delivers
         an Officers' Certificate, substantially in the form of Exhibit L-2
         hereto, to the Trustee certifying that such Contracts are Eligible
         Substitute Contracts;

                  (iii)    the Originator shall have delivered to the Seller
         evidence of filing of a UCC-1 financing statement executed by the
         Originator as debtor, naming the Seller as secured party and the Seller
         shall have delivered to the Trustee evidence of filing of a UCC-1
         financing statement executed by the Seller as debtor, naming the
         Trustee as secured party and filed in Minnesota, listing such Contracts
         as collateral, or shall have delivered to the Seller or the Trustee, as
         the case may be, an amended List of Contracts;

                  (iv)     in respect of Eligible Substitute Contracts that are
         Land-and-Home Contracts:

                  (x)      the Originator shall have delivered to the Seller, or
         its Custodian, the related Land-and-Home Contract Files; and

                  (y)      if the sum of the aggregate principal balances of all
         Land-and-Home Contracts then held by the Trustee (but excluding those
         Land-and-Home Contracts, if any, that are to become Replaced Contracts
         as a consequence of the substitution) and the aggregate principal
         balances of all Land-and-Home Contracts that are included in the
         Eligible Substitute Contracts equals or exceeds 10% of the Pool
         Scheduled Principal Balance as of the Remittance Date immediately
         preceding the substitution, the Originator shall have delivered to the
         Trustee an opinion of counsel satisfactory to the Trustee to the effect
         that the Trustee holds a perfected first priority lien in the real
         estate securing such Eligible Substitute Contracts, or evidence of
         recordation of the assignment to the Trustee on behalf of the Trust of
         (A) each Mortgage securing such Eligible Contracts or, if less (B) of
         the number of Mortgages securing such Eligible Substitute Contracts
         needed to reduce the aggregate principal balances of all Land-and-Home
         Contracts with respect to which such assignments are not so recorded to
         less than 10% of the Pool Scheduled Principal Balance as of the
         Remittance Date immediately preceding the substitution;

                  (v)      the Originator shall have delivered to the Trustee an
         Opinion of Counsel (a) to the effect that the substitution of such
         Contracts for such Replaced Contracts will not cause the Trust to fail
         to qualify as a REMIC at any time under then applicable

                                      3-10
<PAGE>

         REMIC Provisions or cause any "prohibited transaction" that will result
         in the imposition of a tax under such REMIC Provisions and (b) to the
         effect of paragraph 9 of Exhibit F hereto; and

                  (vi)     if the aggregate Scheduled Principal Balance of such
         Replaced Contracts is greater than the aggregate Scheduled Principal
         Balance of the Contracts being substituted, the Originator shall have
         delivered to the Seller for deposit in the Certificate Account the
         amount of such excess and shall have included in the Officers'
         Certificate required by clause (ii) above a certification that such
         deposit has been made.

         Upon satisfaction of such conditions, the Trustee shall add such
Contracts to, and delete such Replaced Contracts from, the List of Contracts.
Such substitution shall be effected prior to the first Determination Date that
occurs 90 or more days after the Originator becomes aware, or should have become
aware, or receives written notice from the Trustee, of the breach referred to in
Section 3.06(a). Promptly after any substitution of a Contract, the Originator
shall give written notice of such substitution to the Rating Agencies.

         c.       (i)      On or before the Funding Termination Date, the
         Originator or the Seller shall deliver an Officer's Certificate to the
         Trustee, stating that each Staged-Funding Contract was fully disbursed
         in accordance with the terms of such Contract on or before the Funding
         Termination Date, or specifying any Staged-Funding Contracts which were
         not fully disbursed by the Funding Termination Date (each
         Staged-Funding Contract that was not so fully disbursed being
         hereinafter referred to as an "Unfunded Contract"), and the Cut-off
         Date Principal Balance of each Unfunded Contract.

                  (ii)     On or before the Funding Termination Date, the
         Originator shall either repurchase any Unfunded Contract in accordance
         with Section 3.06(a) (or the unfunded portion thereof, by depositing in
         the Certificate Account any undisbursed amount with respect to such
         Unfunded Contract), or shall substitute an Eligible Substitute Contract
         for such Unfunded Contract in accordance with Section 3.06(b). With
         respect to the repurchase of an Unfunded Contract pursuant to this
         Section 3.06(c), an amount of the Repurchase Price equal to the
         Unfunded Contract Shortfall attributable to such Unfunded Contract
         shall be treated as a refund to the Trust of the purchase price paid by
         the Trust for additional obligations of the Obligor on such Contract
         under Section 2.01(c), and the remainder of the Repurchase Price shall
         be treated as paid to the Trust for such Unfunded Contract.

                  (iii)    If the Originator shall have failed to repurchase an
         Unfunded Contract (or the unfunded portion thereof, by depositing in
         the Certificate Account any undisbursed amount with respect to such
         Unfunded Contract) or to substitute an Eligible Substitute Contract
         therefor in accordance with subsection (ii) above, then the disbursed
         principal balance of such Unfunded Contract as owned by the Trust shall
         not be increased after the Funding Termination Date, notwithstanding
         any further disbursements that may be made to the related Obligor by
         the Originator after the Funding Termination Date. The Servicer shall
         thereafter allocate principal and interest collected on the Contract
         between the Trust and the Originator on a pro rata basis in accordance
         with the disbursed principal balance as of the Funding Termination
         Date, with the result that payments of interest and

                                      3-11
<PAGE>

         principal collected with respect to such disbursed principal balance as
         of the Funding Termination Date shall be deemed collected by the Trust.
         The aggregate differential between the Cut-off Date Principal Balance
         of all such Unfunded Contracts as specified in the List of Contracts
         and the disbursed principal balance of such Unfunded Contracts as of
         the Funding Termination Date (the "Unfunded Contract Shortfall") shall
         be added to the Formula Principal Distribution Amount with respect to
         the Remittance Date in January 2001.

                  (iv)     On the Business Day prior to each Remittance Date
         until and including the Remittance Date immediately following the
         Funding Termination Date, the Originator shall pay any Class A Interest
         Shortfall, Class M-1 Interest Shortfall, Class M-2 Interest Shortfall
         or Class B-1 Interest Shortfall occurring on such Remittance Date, if
         and to the extent such shortfall is caused by the difference between
         (A) the interest that would have been payable on all Staged-Funding
         Contracts in the related month had such Contracts been fully disbursed
         on the Closing Date and (B) the interest actually payable on such
         Contracts in the related month according to the terms of such
         Contracts.

                  (v)      To further evidence its obligation to repurchase
         Unfunded Contracts pursuant to subsection (ii) above and to deposit any
         Class A Interest Shortfall, Class M-1 Interest Shortfall, Class M-2
         Interest Shortfall and Class B-1 Interest Shortfall pursuant to
         subsection (iv) above, the Originator shall deliver to the Trustee, on
         the Closing Date, a demand note in an amount no less than the aggregate
         Cut-off Date Principal Balances of the Staged-Funding Contracts. After
         the Funding Termination Date or such earlier date on which the
         Originator either has fully disbursed or repurchased each
         Staged-Funding Contract as required herein, the Trustee shall return
         such demand note to the Originator for cancellation and/or destruction.

         d.       Upon receipt by the Trust by deposit in the Certificate
Account of the Repurchase Price under subsection (a) or (c) above, or the
delivery of an Eligible Substitute Contract pursuant to subsection (b) or (c)
above, and upon receipt of a certificate of a Servicing Officer in the form
attached hereto as Exhibit L-1 or L-2, the Trustee shall convey and assign to
the Originator all of the Trust's right, title and interest in the repurchased
Contract or Replaced Contract without recourse, representation or warranty,
except as to the absence of liens, charges or encumbrances created by or arising
as a result of actions of the Trustee.

         e.       The Originator shall defend and indemnify the Trustee and the
Certificateholders against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, arising out of
any claims which may be asserted against or incurred by any of them as a result
of any third-party action arising out of any breach of any such representation
and warranty.

         SECTION 3.07. No Repurchase or Substitution Under Certain
                       -------------------------------------------
                       Circumstances.
                       -------------

         Notwithstanding any provision of this Agreement to the contrary, no
repurchase or substitution pursuant to Section 3.06 (other than a repurchase or
substitution pursuant to Section 3.06(c)) shall be made unless the Originator
obtains for the Trustee an Opinion of Counsel addressed to the Trustee that any
such repurchase or substitution would not, under the REMIC

                                      3-12
<PAGE>

Provisions, (i) cause the Subsidiary REMIC or the Master REMIC to fail to
qualify as a REMIC while any regular interest in the Subsidiary REMIC or the
Master REMIC, respectively, is outstanding, (ii) result in a tax on prohibited
transactions within the meaning of Section 860F(a)(2) of the Code or (iii)
constitute a contribution after the startup day subject to tax under Section
860G(d) of the Code. The Servicer shall attempt to obtain such Opinion of
Counsel. In the case of a repurchase or deposit pursuant to Section 3.06(a) or
3.06(c), the Originator shall, notwithstanding the absence of such opinion as to
the imposition of any tax as the result of such purchase or deposit, repurchase
such Contract or make such deposit and shall guarantee the payment of such tax
by paying to the Trustee the amount of such tax not later than five Business
Days before such tax shall be due and payable to the extent that amounts
previously paid over to and then held by the Trustee pursuant to Section 6.06
hereof are insufficient to pay such tax and all other taxes chargeable under
Section 6.06. Pursuant to Section 6.06, the Servicer is hereby directed to
withhold, and shall withhold and pay over to the Trustee, an amount sufficient
to pay such tax and any other taxes imposed on "prohibited transactions" under
Section 860F(a)(1) of the Code or imposed on "contributions after start up date"
under Section 860G(d) of the Code from amounts otherwise distributable to Class
C Subsidiary Certificateholders. The Servicer shall give notice to the Trustee
at the time of such repurchase of the amounts due from the Originator pursuant
to the guarantee of the Originator described above and notice as to who should
receive such payment.

         The Trustee shall have no obligation to pay any such amounts pursuant
to this Section other than from moneys provided to it by the Originator or from
moneys held in the funds and accounts created under this Agreement. The Trustee
shall be deemed conclusively to have complied with this Section if it follows
the directions of the Originator.

         In the event any tax that is guaranteed by the Originator pursuant to
this Section 3.07 is refunded to the Trust or otherwise is determined not to be
payable, the Originator shall be repaid the amount of such refund or that
portion of any guarantee payment made by the Originator that is not applied to
the payment of such tax.

         SECTION 3.08. Staged-Funding Contract Reserve Account.
                       ---------------------------------------

         a.       The Trustee shall establish the Staged-Funding Contract
Reserve Account on behalf of the Trust, which must be an Eligible Account, and
shall deposit therein the amount specified in Section 2.02(t). The Account shall
be entitled "U.S. Bank National Association, as Trustee for the benefit of
holders of Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2000-5."

         b.       Upon receipt by the Trustee of an Officer's Certificate
pursuant to Section 3.06(c)(i) to the effect that one or more Staged-Funding
Contracts have been fully disbursed in accordance with the terms of such
Contract, on or before the Funding Termination Date, the Trustee shall release
to the Seller that portion of the funds held in the Staged-Funding Contract
Reserve Account attributable to those Staged-Funding Contracts (as specified in
such Officer's Certificate).

         c.       If the Originator fails to satisfy its obligations under
Section 3.06(c)(ii) hereof the Trustee shall withdraw from the Staged-Funding
Contract Reserve Account that amount

                                      3-13
<PAGE>

necessary to satisfy the Originator's obligations under Section 3.06(c)(ii), and
shall apply said funds in the fashion provided in the second sentence in Section
3.06(c)(ii). Any amount so applied shall be deposited in the Certificate Account
and treated for all purposes under this Agreement as an amount paid by the
Originator to repurchase Contracts under Section 3.06(c).

         d.       The Staged-Funding Contract Reserve Account shall be part of
the Trust but not part of the Subsidiary REMIC or Master REMIC. The Trustee on
behalf of the Trust shall be the legal owner of the Staged-Funding Contract
Reserve Account. The Originator shall be the beneficial owner of the
Staged-Funding Contract Reserve Account, subject to the foregoing power of the
Trustee to apply amounts in the Staged-Funding Contract Reserve Account to
satisfy the obligations of the Originator under Section 3.06(c)(ii). Funds in
the Staged-Funding Contract Reserve Account shall, at the direction of the
Originator, be invested in Eligible Investments that mature no later than the
Funding Termination Date. All net income and gain from such investments shall be
distributed to the Originator on the Funding Termination Date. Any losses on
such investments shall be deposited in the Staged-Funding Contract Reserve
Account by the Originator out of its own funds immediately as realized. All
amounts earned on amounts on deposit in the Staged-Funding Contract Reserve
Account shall be taxable to the Originator.

         e.       Any funds remaining in the Staged-Funding Contract Reserve
Account after the Funding Termination Date shall be distributed to the
Originator.

                                      3-14
<PAGE>

                                   ARTICLE IV

           PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
           -----------------------------------------------------------

         SECTION 4.01. Custody of Contracts.
                       --------------------

         a.       Subject to the terms and conditions of this Section the
Trustee appoints the Servicer to maintain custody of the Contract Files for the
benefit of the Certificateholders and the Trustee. The Custodian shall maintain
custody of the Land-and-Home Contract Files. In the event that the Trustee is no
longer acting as Custodian of the Land-and-Home Contract Files, upon execution
and delivery of an agreement between the Trustee and the Person assuming the
duties of the Trustee hereunder as Custodian with respect to the Land-and-Home
Contract Files, the replacement Custodian shall concurrently execute an
acknowledgment of receipt of the Land-and-Home Contract Files substantially in
the form of Exhibit H hereto.

         b.       The Servicer agrees to maintain the related Contract Files at
its office where they are currently maintained, or at such other offices of the
Servicer in the State of Minnesota as shall from time to time be identified to
the Trustee by written notice. The Servicer may temporarily move individual
Contract Files or any portion thereof without notice as necessary to conduct
collection and other servicing activities in accordance with its customary
practices and procedures.

         c.       As custodian, the Servicer shall have and perform the
following powers and duties:

                  (i)      hold the Contract Files on behalf of the
         Certificateholders and the Trustee, maintain accurate records
         pertaining to each Contract to enable it to comply with the terms and
         conditions of this Agreement, maintain a current inventory thereof,
         conduct annual physical inspections of Contract Files held by it under
         this Agreement and certify to the Trustee annually that it continues to
         maintain possession of such Contract Files;

                  (ii)     implement policies and procedures, in writing and
         signed by a Servicing Officer, with respect to persons authorized to
         have access to the Contract Files on the Servicer's premises and the
         receipting for Contract Files taken from their storage area by an
         employee of the Servicer for purposes of servicing or any other
         purposes; and

                  (iii)    attend to all details in connection with maintaining
         custody of the Contract Files on behalf of the Certificateholders and
         the Trustee.

         d.       In performing its duties under this Section, the Servicer
agrees to act with reasonable care, using that degree of skill and care that it
exercises with respect to similar contracts owned and/or serviced by it. The
Servicer shall promptly report to the Trustee any failure by it to hold the
Contract Files as herein provided and shall promptly take appropriate action to
remedy any such failure. In acting as custodian of the Contract Files, the
Servicer agrees further not to assert any beneficial ownership interests in the
Contracts or the Contract Files. The Servicer agrees to indemnify the
Certificateholders and the Trustee for any and all liabilities, obligations,
losses, damages, payments, costs or expenses of any kind whatsoever which may be
imposed on, incurred or asserted against the Certificateholders and the Trustee
as

                                       4-1
<PAGE>

the result of any act or omission by the Servicer relating to the maintenance
and custody of the Contract Files; provided, however, that the Servicer will not
be liable for any portion of any such amount resulting from the negligence or
willful misconduct of any Certificateholder or the Trustee.

         SECTION 4.02. Filings.
                       -------

         On or prior to the Closing Date, the Originator shall cause the UCC-1
financing statement referred to in Section 2.02(h) to be filed. Trustee shall
cause to be filed all necessary continuation statements of the UCC-1 financing
statement. From time to time the Servicer shall take and cause to be taken such
actions and execute such documents as are necessary to perfect and protect the
Certificateholders' interest in the Contracts and their proceeds and the
Manufactured Homes against all other persons, including, without limitation, the
filing of financing statements, amendments thereto and continuation statements,
the execution of transfer instruments and the making of notations on or taking
possession of all records or documents of title. The Servicer will maintain the
Trustee's first priority perfected security interest in each Manufactured Home
and a first lien on each Mortgaged Property so long as the related Contract is
property of the Trust.

         SECTION 4.03. Name Change or Relocation.
                       -------------------------

         a.       During the term of this Agreement, the Originator shall not
change its name, identity or structure or relocate its chief executive office
without first giving notice thereof to the Seller, the Trustee and the Servicer.
In addition, following any such change in the name, identity, structure or
location of the chief executive office of the Originator, the Originator shall
give written notice of any such change to Standard & Poor's, Moody's and Fitch.

         b.       If any change in the Originator's name, identity or structure
or the relocation of its chief executive office would make any financing or
continuation statement or notice of lien filed under this Agreement seriously
misleading within the meaning of applicable provisions of the UCC or any title
statute or would cause any such financing or continuation statement or notice of
lien to become unperfected (whether immediately or with lapse of time), the
Originator, no later than five days after the effective date of such change,
shall file, or cause to be filed, such amendments or financing statements as may
be required to preserve, perfect and protect the Certificateholders' interest in
the Contracts and proceeds thereof and in the Manufactured Homes.

         SECTION 4.04. Chief Executive Office.
                       ----------------------

         During the term of this Agreement, the Originator will maintain its
chief executive office in one of the States of the United States, except
Tennessee.

         SECTION 4.05. Costs and Expenses.
                       ------------------

         The Servicer agrees to pay all reasonable costs and disbursements in
connection with the perfection and the maintenance of perfection, as against all
third parties, of the Certificateholders' right, title and interest in and to
the Contracts (including, without limitation, the security interests in the
Manufactured Homes granted thereby).

                                       4-2
<PAGE>

                                    ARTICLE V

                             SERVICING OF CONTRACTS
                             ----------------------

         SECTION 5.01. Responsibility for Contract Administration.
                       ------------------------------------------

         The Servicer will have the sole obligation to manage, administer,
service and make collections on the Contracts and perform or cause to be
performed all contractual and customary undertakings of the holder of the
Contracts to the Obligor. Conseco Finance Corp., if it is the Servicer, may
delegate some or all of its servicing duties to a wholly owned subsidiary of
Conseco Finance Corp., for so long as such subsidiary remains, directly or
indirectly, a wholly owned subsidiary of Conseco Finance Corp. Notwithstanding
any such delegation Conseco Finance Corp. shall retain all of the rights and
obligations of the Servicer hereunder. The Trustee, at the request of a
Servicing Officer, shall furnish the Servicer with any powers of attorney or
other documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. Conseco Finance Corp. is hereby
appointed the Servicer until such time as any Service Transfer shall be effected
under Article VII.

         SECTION 5.02. Standard of Care.
                       ----------------

         In managing, administering, servicing and making collections on the
Contracts pursuant to this Agreement, the Servicer will exercise that degree of
skill and care consistent with the highest degree of skill and care that the
Servicer exercises with respect to similar contracts serviced by the Servicer;
provided, however, that (i) such degree of skill and care shall be at least as
favorable as the degree of skill and care generally applied by servicers of
manufactured housing installment sales contracts for institutional investors and
(ii) notwithstanding the foregoing, the Servicer shall not release or waive the
right to collect the unpaid balance on any Contract. The Servicer shall comply
with FHA/VA Regulations in servicing any FHA/VA Contracts (and will pay any
required premiums) so that the related insurance of the Federal Housing
Administration or partial guarantee of the Veterans Administration remains in
full force and effect, except for good faith disputes relating to FHA/VA
Regulations that will not cause the termination or reduction of such insurance
or guarantee.

         SECTION 5.03. Records.
                       -------

         The Servicer shall, during the period it is servicer hereunder,
maintain such books of account and other records as will enable the Trustee to
determine the status of each Contract.

         SECTION 5.04. Inspection; Computer Tape.
                       -------------------------

         a.       At all times during the term hereof, the Servicer shall afford
the Trustee and its authorized agents reasonable access during normal business
hours to the Servicer's records, which have not previously been provided to the
Trust, relating to the Contracts and will cause its personnel to assist in any
examination of such records by the Trustee or its authorized agents. The
examination referred to in this Section will be conducted in a manner which does
not unreasonably interfere with the Servicer's normal operations or customer or
employee relations. Without otherwise limiting the scope of the examination the
Trustee may make, the Trustee may, using generally accepted audit procedures,
verify the status of each Contract and review the

                                       5-1
<PAGE>

Electronic Ledger and records relating thereto for conformity to Monthly Reports
prepared pursuant to Article VI and compliance with the standards represented to
exist as to each Contract in this Agreement.

         b.       At all times during the term hereof, the Servicer shall keep
available a copy of the List of Contracts at its principal executive office for
inspection by Certificateholders.

         c.       On or before the ninth Business Day of each related Due
Period, the Servicer will provide to the Trustee a Computer Tape setting forth a
list of all the outstanding Contracts and the outstanding principal balance of
each such Contract as of the end of the next related Due Period.

         SECTION 5.05. Certificate Account.
                       -------------------

         a.       On or before the Closing Date, the Servicer shall establish
the Certificate Account on behalf of the Trust, which must be an Eligible
Account. The Certificate Account shall be entitled "U.S. Bank National
Association as Trustee for the benefit of holders of Manufactured Housing
Contract Pass-Through Certificates, Series 2000-5 (Conseco Finance Corp.,
Servicer)." The Servicer shall pay into the Certificate Account as promptly as
practicable (not later than the next Business Day) following receipt thereof all
payments from Obligors and Net Liquidation Proceeds, other than late payment
penalty fees, extension fees and assumption fees, which shall be retained by the
Servicer as additional compensation for servicing the Contracts. All amounts
paid into the Certificate Account under this Agreement shall be held in trust
for the Trustee and the Certificateholders until payment of any such amounts is
authorized under this Agreement. Only the Trustee may withdraw funds from the
Certificate Account.

         b.       If the Servicer so directs, the institution maintaining the
Certificate Account shall, in the name of the Trustee in its capacity as such,
invest the amounts in the Certificate Account in Eligible Investments that
mature not later than one Business Day prior to the next succeeding Remittance
Date. Once such funds are invested, such institution shall not change the
investment of such funds. All income and gain from such investments shall be
added to the Certificate Account and distributed on such Remittance Date
pursuant to Section 8.03(a). An amount equal to any net loss on such investments
shall be deposited in the Certificate Account by the Class C Subsidiary
Certificateholder out of its own funds immediately as realized. The Servicer and
the Trustee shall in no way be liable for losses on amounts invested in
accordance with the provisions hereof. Funds in the Certificate Account not so
invested must be insured to the extent permitted by law by the Federal Deposit
Insurance Corporation. "Eligible Investments" are any of the following:

                  (i)      direct obligations of, and obligations fully
         guaranteed by, the United States of America, the Federal Home Loan
         Mortgage Corporation, the Federal National Mortgage Association, or any
         agency or instrumentality of the United States of America the
         obligations of which are backed by the full faith and credit of the
         United States of America and which are noncallable;

                  (ii)     (A) demand and time deposits in, certificates of
         deposit of, bankers' acceptances issued by, or federal funds sold by
         any depository institution or trust

                                       5-2
<PAGE>

         company (including the Trustee or any Affiliate of the Trustee, acting
         in its commercial capacity) incorporated under the laws of the United
         States of America or any State thereof and subject to supervision and
         examination by federal and/or state authorities, so long as, at the
         time of such investment or contractual commitment providing for such
         investment, the commercial paper or other short-term deposits of such
         depository institution or trust company (or, in the case of a
         depository institution which is the principal subsidiary of a holding
         company, the commercial paper or other short-term debt obligations of
         such holding company) are rated at least P-1 by Moody's, at least A-1
         by Standard & Poor's and at least F-1 by Fitch (if rated by Fitch) and
         (B) any other demand or time deposit or certificate of deposit which is
         fully insured by the Federal Deposit Insurance Corporation;

                  (iii)    shares of an investment company registered under the
         Investment Company Act of 1940, whose shares are registered under the
         Securities Act of 1933 and have the highest credit rating then
         available from Moody's and Fitch (if rated by Fitch) and are rated AAAm
         or AAAm-G by Standard & Poor's and whose only investments are in
         securities described in clauses (i), (ii) above and (iv) below;

                  (iv)     repurchase obligations with respect to (A) any
         security described in clause (i) above or (B) any other security issued
         or guaranteed by an agency or instrumentality of the United States of
         America, in either case entered into with a depository institution or
         trust company (acting as principal) described in clause (ii)(A) above;

                  (v)      securities bearing interest or sold at a discount
         issued by any corporation incorporated under the laws of the United
         States of America or any State thereof which have a credit rating of at
         least Aa2 from Moody's, at least AAA by Standard & Poor's and in one of
         the two highest rating categories from Fitch (if rated by Fitch) at the
         time of such investment; provided, however, that securities issued by
         any particular corporation will not be Eligible Investments to the
         extent that investment therein will cause the then outstanding
         principal amount of securities issued by such corporation and held as
         part of the corpus of the Trust to exceed 10% of amounts held in the
         Certificate Account;

                  (vi)     commercial paper having a rating of at least A-1+
         from Standard & Poor's and at least P-1 from Moody's (if rated by
         Moody's) at the time of such investment or pledge as a security; and

                  (vii)    other obligations or securities that are acceptable
         to the Rating Agencies as an Eligible Investment hereunder and will not
         reduce the rating assigned to any Class of Certificates by any of the
         Rating Agencies below the lower of the then-current rating or the
         rating assigned to such Certificates as of the Closing Date by such
         Rating Agency, as evidenced in writing;

provided that any such investment must constitute a "cash flow investment"
within the meaning of the REMIC Provisions.

                                       5-3
<PAGE>

Notwithstanding the foregoing, securities that represent the right to receive
payments only of interest due on underlying obligations shall not be included as
Eligible Investments, whether or not such securities otherwise fall within (i)
through (vii) above.

The Trustee may trade with itself or an Affiliate in the purchase or sale of
such Eligible Investments.

The Originator, the Servicer and the Seller acknowledge that to the extent
regulations of the Comptroller of the Currency or other applicable regulatory
agency grant the Originator, Seller or Servicer the right to receive brokerage
confirmations of security transactions as they occur, the Originator, the Seller
and the Servicer specifically waive receipt of such confirmations.

         c.       If at any time the Trustee receives notice (from Standard &
Poor's, Moody's, Fitch or the Servicer or otherwise) that the Certificate
Account has ceased to be an Eligible Account, the Trustee must, as soon as
practicable but in no event later than 5 Business Days of the Trustee's receipt
of such notice, transfer the Certificate Account and all funds and Eligible
Investments therein to an Eligible Account. Following any such transfer, the
Trustee must notify each of the Rating Agencies and the Servicer of the location
of the Certificate Account.

         SECTION 5.06. Enforcement.
                       -----------

         a.       The Servicer shall, consistent with customary servicing
procedures and the terms of this Agreement, act with respect to the Contracts in
such manner as will maximize the receipt of principal and interest on such
Contracts and Liquidation Proceeds with respect to Liquidated Contracts.

         b.       The Servicer may sue to enforce or collect upon Contracts, in
its own name, if possible, or as agent for the Trust. If the Servicer elects to
commence a legal proceeding to enforce a Contract, the act of commencement shall
be deemed to be an automatic assignment of the Contract to the Servicer for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that the Servicer may not enforce a Contract on the ground
that it is not a real party in interest or a holder entitled to enforce the
Contract, the Trustee on behalf of the Trust shall, at the Servicer's expense,
take such steps as the Servicer deems necessary to enforce the Contract,
including bringing suit in its name or the names of the Certificateholders.

         c.       The Servicer shall exercise any rights of recourse against
third persons that exist with respect to any Contract in accordance with the
Servicer's usual practice. In exercising recourse rights, the Servicer is
authorized on the Trustee's behalf to reassign the Contract or to resell the
related Manufactured Home to the person against whom recourse exists at the
price set forth in the document creating the recourse.

         d.       So long as Conseco Finance Corp. is the Servicer, the Servicer
may grant to the Obligor on any Contract any rebate, refund or adjustment out of
the Certificate Account that the Servicer in good faith believes is required
because of prepayment in full of the Contract. The Servicer will not permit any
rescission or cancellation of any Contract.

         e.       So long as Conseco Finance Corp. is the Servicer, the Servicer
may, consistent with its customary servicing procedures and consistent with
Section 5.02, grant to the Obligor on

                                       5-4
<PAGE>

any Contract an extension of payments due under such Contract, provided that
Obligors may not be solicited for extensions, no such extension may extend
beyond the final scheduled payment date of the Contract with the latest
maturity, as specified in Section 3.04(c), and no more than one extension of
payments under a Contract may be granted in any twelve-month period.

         f.       The Servicer may enforce any due-on-sale clause in a Contract
if such enforcement is called for under its then current servicing policies for
obligations similar to the Contracts, provided that such enforcement is
permitted by applicable law and will not adversely affect any applicable
insurance policy. If an assumption of a Contract is permitted by the Servicer
upon conveyance of the related Manufactured Home, the Servicer shall use its
best efforts to obtain an assumption agreement in connection therewith and add
such assumption agreement to the related Contract File or Land-and-Home Contract
File.

         g.       Any provision of this Agreement to the contrary
notwithstanding, the Servicer shall not agree to the modification or waiver of
any provision of a Contract if such modification or waiver would be treated as a
taxable exchange under the REMIC Provisions.

         h.       In the event that any Contract that was 60 or more days
delinquent as of the Closing Date (each, a "Delinquent Contract") goes into
foreclosure, if acquiring title to the related Mortgaged Property or
Manufactured Home would cause the adjusted basis, for federal income tax
purposes, of Delinquent Contracts that are currently in foreclosure or
repossession, along with any other assets owned by the Subsidiary REMIC other
than "qualified mortgages", qualified "foreclosure property" and "permitted
investments" within the meaning of Section 860G of the Code, to exceed 0.75% of
the Pool Scheduled Principal Balance, the Servicer shall not acquire title to
that Mortgaged Property or Manufactured Home on behalf of the Subsidiary REMIC.
Instead, the Servicer shall dispose of the Mortgaged Property or Manufactured
Home for cash in a foreclosure sale. In addition, if the Servicer determines
that the adjusted basis of Delinquent Contracts that are currently in
foreclosure or repossession on any Remittance Date, along with any other assets
owned by the Subsidiary REMIC, other than "qualified mortgages", "foreclosure
property" and "permitted investments" with the meaning of Section 860G of the
Internal Revenue Code, exceeds 1.0% of the Pool Scheduled Principal Balance
after giving effect to prepayments on the Contracts, then prior to such
Remittance Date, the Servicer shall dispose of sufficient Mortgaged Properties
and Manufactured Homes securing Delinquent Contracts and acquired upon
foreclosure repossession, for cash, so that the adjusted basis of Delinquent
Contracts that are currently in foreclosure or repossession, along with any
other assets owned by the Subsidiary REMIC, other than "qualified mortgages",
"foreclosure property" and "permitted investments" within the meaning of Section
860G of the Code, will be less than 1.0% of the Pool Scheduled Principal
Balance. In either event, the Servicer may acquire, for its own account and not
on behalf of the Subsidiary REMIC, the Mortgaged Property or Manufactured Home
at the foreclosure sale for an amount not less than the greater of: (i) the
highest amount bid by any other person at the foreclosure sale, or (ii) the
estimated fair value of the Mortgaged Property or Manufactured Home, as
determined by the Servicer in good faith.

         SECTION 5.07. Trustee to Cooperate.
                       --------------------

         a.       Upon payment in full on any Contract, the Servicer will notify
the Trustee and Conseco Finance Corp. (if Conseco Finance Corp. is not the
Servicer) on the next succeeding

                                       5-5
<PAGE>

Remittance Date by certification of a Servicing Officer (which certification
shall include a statement to the effect that all amounts received in connection
with such payments which are required to be deposited in the Certificate Account
pursuant to Section 5.05 have been so deposited). The Servicer is authorized to
execute an instrument in satisfaction of such Contract and to do such other acts
and execute such other documents as the Servicer deems necessary to discharge
the Obligor thereunder and eliminate the lien on the related real estate. The
Servicer shall determine when a Contract has been paid in full; to the extent
that insufficient payments are received on a Contract credited by the Servicer
as prepaid or paid in full and satisfied, the shortfall shall be paid by the
Servicer out of its own funds.

         b.       From time to time as appropriate for servicing and foreclosure
in connection with any Land-and-Home Contract, the Trustee shall, upon written
request of a Servicing Officer and delivery to the Trustee of a receipt signed
by such Servicing Officer, cause the original Land-and-Home Contract and the
related Land-and-Home Contract File to be released to the Servicer and shall
execute such documents as the Servicer shall deem necessary to the prosecution
of any such proceedings. The Trustee shall stamp the face of each such
Land-and-Home Contract to be released to the Servicer with a notation that the
Land-and-Home Contract has been assigned to the Trustee. Upon request of a
Servicing Officer, the Trustee shall perform such other acts as reasonably
requested by the Servicer and otherwise cooperate with the Servicer in
enforcement of the Certificateholders' and Class C Certificateholders' rights
and remedies with respect to Contracts.

         c.       The Servicer's receipt of a Land-and-Home Contract and/or
Land-and-Home Contract File shall obligate the Servicer to return the original
Land-and-Home Contract and the related Land-and-Home Contract File to the
Trustee when its need by the Servicer has ceased unless the Contract shall be
liquidated or repurchased or replaced as described in Section 3.06.

         SECTION 5.08. Costs and Expenses.
                       ------------------

         All costs and expenses incurred by the Servicer in carrying out its
duties hereunder, including all fees and expenses incurred in connection with
the enforcement of Contracts (including enforcement of defaulted Contracts and
repossessions of Manufactured Homes securing such Contracts) shall be paid by
the Servicer and the Servicer shall not be entitled to reimbursement hereunder,
except that the Servicer shall be reimbursed out of the Liquidation Proceeds of
a Liquidated Contract for Liquidation Expenses incurred by it. The Servicer
shall not incur such Liquidation Expenses unless it determines in its good faith
business judgment that incurring such expenses will increase the Net Liquidation
Proceeds on the related Contract.

         SECTION 5.09. Maintenance of Insurance.
                       ------------------------

         a.       Except as otherwise provided in subsection (b) of this Section
5.09, the Servicer shall cause to be maintained with respect to each Contract
one or more Hazard Insurance Policies which provide, at a minimum, the same
coverage as a standard form fire and extended coverage insurance policy that is
customary for manufactured housing, issued by a company authorized to issue such
policies in the state in which the related Manufactured Home is located and in
an amount which is not less than the maximum insurable value of such
Manufactured Home or the principal balance due from the Obligor on the related
Contract, whichever is less; provided,

                                       5-6
<PAGE>

however, that the amount of coverage provided by each Hazard Insurance Policy
shall be sufficient to avoid the application of any co-insurance clause
contained therein; and provided, further, that such Hazard Insurance Policies
may provide for customary deductible amounts. With respect to: (a) a
Manufactured Home securing an FHA/VA Contract, if such Manufactured Home's
location was, at the time of origination of the related FHA/VA Contract, within
a federally designated special flood hazard area, the Servicer shall also cause
such flood insurance to be maintained, which coverage shall be at least equal to
the minimum amount specified in the preceding sentence or such lesser amount as
may be available under the federal flood insurance program; and (b) any Contract
that is not an FHA/VA Contract, the Originator shall obtain (i) a statement from
the Obligor's insurance agent that the Manufactured Home was, at the time of
origination of the Contract, not in a federally designated special flood hazard
area, or (ii) evidence that, at the time of origination, flood insurance was in
effect, which coverage was at least equal to the minimum amount specified in the
preceding sentence or such lesser amount as may be available under the federal
flood insurance program. Each Hazard Insurance Policy caused to be maintained by
the Servicer shall contain a standard loss payee clause in favor of the Servicer
and its successors and assigns. If any Obligor is in default in the payment of
premiums on its Hazard Insurance Policy or Policies, the Servicer shall pay such
premiums out of its own funds and may separately add such premium to the
Obligor's obligation as provided by the Contract, but shall not add such premium
to the remaining principal balance of the Contract.

         b.       The Servicer may, in lieu of causing individual Hazard
Insurance Policies to be maintained with respect to each Manufactured Home
pursuant to subsection (a) of this Section 5.09, and shall, to the extent that
the related Contract does not require the Obligor to maintain a Hazard Insurance
Policy with respect to the related Manufactured Home, maintain one or more
blanket insurance policies covering losses on the creditor's interest in the
Contracts resulting from the absence or insufficiency of individual Hazard
Insurance Policies. Any such blanket policy shall be substantially in the form
and in the amount carried by the Servicer as of the date of this Agreement. The
Servicer shall pay the premium for such policy on the basis described therein
and shall deposit into the Certificate Account from its own funds any deductible
amount with respect to claims under such blanket insurance policy relating to
the Contracts. The Servicer shall not, however, be required to deposit any
deductible amount with respect to claims under individual Hazard Insurance
Policies maintained pursuant to subsection (a) of this Section. If the insurer
under such blanket insurance policy shall cease to be acceptable to the
Servicer, the Servicer shall exercise its best reasonable efforts to obtain from
another insurer a replacement policy comparable to such policy.

         c.       With respect to each Manufactured Home that has been
repossessed in connection with a defaulted Contract, the Servicer shall either
(i) maintain one or more Hazard Insurance Policies thereon or (ii) self-insure
such Manufactured Homes and deposit into the Certificate Account from its own
funds any losses caused by damage to such Manufactured Home that would have been
covered by a Hazard Insurance Policy.

         d.       The Servicer shall keep in force throughout the term of this
Agreement (i) a policy or policies of insurance covering errors and omissions
for failure to maintain insurance as required by this Agreement and (ii) a
fidelity bond. Such policy or policies and such fidelity bond shall be in such
form and amount as is generally customary among Persons which service a
portfolio of manufactured housing installment sales contracts and installment
loan agreements

                                       5-7
<PAGE>

having an aggregate principal amount of $100,000,000 or more and which are
generally regarded as servicers acceptable to institutional investors.

         SECTION 5.10. Repossession.
                       ------------

         Notwithstanding the standard of care specified in Section 5.02, the
Servicer shall commence procedures for the repossession of any Manufactured Home
or the foreclosure upon any Mortgaged Property or take such other steps that in
the Servicer's reasonable judgment will maximize the receipt of principal and
interest or Net Liquidation Proceeds with respect to the Contract secured by
such Manufactured Home or Mortgaged Property (which may include retitling or
filing a recorded assignment of the Mortgage) subject to the requirements of the
applicable state and federal law, no later than five Business Days after the
time when such Contract becomes a Defaulted Contract; provided that if the
Servicer has actual knowledge that a Mortgaged Property is affected by hazardous
waste, then the Servicer shall not cause the Trust to acquire title to such
Mortgaged Property in a foreclosure or similar proceeding. For purposes of the
proviso in the preceding sentence, the Servicer shall not be deemed to have
actual knowledge that a Mortgaged Property is affected by hazardous waste unless
it shall have received written notice that hazardous waste is present on such
property and such written notice has been made a part of the Land-and-Home
Contract File with respect to the related Contract. In connection with such
foreclosure or other conversion, the Servicer shall follow such practices and
procedures as it shall deem necessary or advisable and as shall be consistent
with Section 5.02. In the event that title to any Mortgaged Property is acquired
in foreclosure or by deed in lieu of foreclosure, the deed or certificate of
sale shall be issued to the Trustee, as Trustee, or, at its election, to its
nominee on behalf of the Trustee, as Trustee.

         SECTION 5.11. Commingling of Funds.
                       --------------------

         So long as Conseco Finance Corp. is the Servicer, any collections in
respect of Contracts collected by Conseco Finance Corp. shall, prior to the
deposit thereof in the Certificate Account, be held in bank accounts entitled
substantially as follows: "[name of depository], as agent for U.S. Bank National
Association as Trustee, other trustees, and Conseco Finance Corp., as their
interests may appear."

         SECTION 5.12. Retitling; Security Interests.
                       -----------------------------

         a.       If, at any time, a Service Transfer has occurred and Conseco
Finance Corp. is no longer the Servicer and the new Servicer is unable to
foreclose upon a Manufactured Home because the title document for such
Manufactured Home does not show such Servicer or the Trustee as the holder of
the first priority security interest in the Manufactured Home, such Servicer
shall take all necessary steps to apply for a replacement title document showing
it or the Trustee as the secured party.

         b.       In order to facilitate the Servicer's actions, as described in
subsection (a) of this section, Conseco Finance Corp. will provide the Servicer
with any necessary power of attorney permitting it to retitle the Manufactured
Home.

         c.       If the Servicer is still unable to retitle the Manufactured
Home, Conseco Finance Corp. will take all actions necessary to act with the
Servicer to foreclose upon the Manufactured

                                       5-8
<PAGE>

Home, including, as appropriate, the filing of any UCC-1 or UCC-2 financing
statements necessary to perfect the security interest in any Manufactured Home
that constitutes a fixture under the laws of the jurisdiction in which it is
located and all actions necessary to perfect the security interest in any
Manufactured Home that is considered or classified as part of the real estate on
which it is located under the laws of the jurisdiction in which it is located.

         d.       The Originator shall (i) deliver to the Trustee an Opinion of
Counsel to the effect that assignment and recordation of the Mortgages, securing
Land-and-Home Contracts relating to real estate located in any state other than
those states specified in such Opinion of Counsel (the "recordation states"), is
not necessary to effect the assignment to the Trustee of the Originator's lien
on the real property securing such Land-and-Home Contracts, and (ii) file in the
appropriate recording offices within 60 days after the Closing Date (or within
30 days after receipt of the recorded Mortgage, if later) the assignments to the
Trustee on behalf of the Trust of the Mortgages securing all Land-and-Home
Contracts secured by Mortgages relating to real estate located in the
recordation states.

         If at any time during the term of this Agreement, the Trustee receives
written notice from the Originator or the Servicer that the Originator does not
have a long-term senior debt rating from Moody's of Baa3 or higher, from Fitch
of BBB- or higher and from Standard & Poor's of BBB- or higher, or if the
Trustee otherwise becomes aware of the same, the Trustee, at the Originator's
expense, shall file promptly in the appropriate recording offices the
assignments to the Trustee on behalf of the Trust of each Mortgage securing a
Land-and-Home Contract, unless the Originator obtains confirmation from Standard
& Poor's, Moody's and Fitch that failure to file such assignments will not
result in Standard & Poor's, Moody's or Fitch (as applicable) lowering,
withdrawing or qualifying its rating of any Class of Certificates.

         SECTION 5.13. Covenants, Representations and Warranties of Servicer. By
its execution and delivery of this Agreement, the Servicer makes the following
representations, warranties and covenants on which the Trust relies in accepting
the Contracts and issuing the Certificates.

         a.       Organization and Good Standing. The Servicer is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its assets
and to transact the business in which it is currently engaged. The Servicer is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Servicer, or its
ability to carry out its obligations hereunder.

         b.       Authorization; Binding Obligations. The Servicer has the power
and authority to make, execute, deliver and perform this Agreement and all of
the transactions contemplated under this Agreement and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Servicer enforceable in accordance
with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or

                                       5-9
<PAGE>

similar laws affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies.

         c.       No Consent Required. The Servicer is not required to obtain
the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement, except for such
consents, licenses, approvals and authorizations as have been obtained.

         d.       No Violations. The execution, delivery and performance by the
Servicer of this Agreement and the fulfillment of its terms will not violate any
provision of any existing law or regulation or any order or decree of any court
or the related Certificate of Incorporation or Bylaws of the Servicer, or
constitute a material breach of any mortgage, indenture, contract or other
agreement to which the Servicer is a party or by which the Servicer may be
bound.

         e.       Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to the
knowledge of the Servicer threatened, against the Servicer or any of its
properties or with respect to this Agreement or the Certificates which, if
adversely determined, would in the opinion of the Servicer have a material
adverse effect on the transactions contemplated by this Agreement.

         f.       Chief Executive Office. The chief executive office of the
Servicer is at 1100 Landmark Towers, 345 St. Peter Street, St. Paul, Minnesota
55102-1639.

         g.       No Default. The Servicer is not in default with respect to any
order or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default would materially and
adversely affect its condition (financial or other) or operations or its
properties or the consequences of which would materially and adversely affect
its performance hereunder. The Servicer is not in default under any agreement
involving financial obligations or on any outstanding obligation which would
materially adversely impact its financial condition or operations or legal
documents associated with the transaction contemplated by this Agreement.

         h.       No Impairment. The Servicer shall do nothing to impair the
rights of the Trust, or the Certificateholders in the Certificates.

         i.       No Amendments. The Servicer shall not extend or otherwise
amend the terms of any Contract, except in accordance with Section 5.06.

                                      5-10
<PAGE>

                                   ARTICLE VI

                             REPORTS AND TAX MATTERS
                             -----------------------

         SECTION 6.01. Monthly Reports.
                       ---------------

         a.       No later than 1:00 p.m. on each Determination Date, the
Servicer shall deliver to the Trustee, the Paying Agent, the Originator (if the
Originator is not the Servicer) and the Rating Agencies a "Monthly Report,"
substantially in the form of Exhibit N hereto.

         b.       If the applicable Monthly Report indicates that there is a
Class M-1 Interest Deficiency Amount, a Class M-2 Interest Deficiency Amount
and/or a Class B-1 Interest Deficiency Amount, the Servicer shall promptly
notify the Trustee, by telephone, of the aggregate amount of such Class M-1
Interest Deficiency Amount, Class M-2 Interest Deficiency Amount and Class B-1
Interest Deficiency Amount. On the day one Business Day prior to the related
Remittance Date, the Trustee shall determine the total amount of funds in the
Certificate Account available to pay such deficiency in accordance with Section
8.03(b) and shall promptly notify the Servicer of such amount. If the total
amount of funds in the Certificate Account is not sufficient to pay the
deficiency, the Trustee shall promptly notify the Servicer, and shall reflect
such deficiency in the reports delivered to Certificateholders pursuant to
Section 6.05.

         SECTION 6.02. Certificate of Servicing Officer.
                       --------------------------------

         Each Monthly Report pursuant to Section 6.01 shall be accompanied by a
certificate of a Servicing Officer substantially in the form of Exhibit I,
certifying the accuracy of the Monthly Report and that no Event of Termination
or event that with notice or lapse of time or both would become an Event of
Termination has occurred, or if such event has occurred and is continuing,
specifying the event and its status.

         SECTION 6.03. Other Data.
                       ----------

         In addition, the Originator and (if different from the Originator) the
Servicer shall, on request of the Trustee, Standard & Poor's, Moody's, Fitch or
a Certificateholder, furnish the Trustee and/or Standard & Poor's, Moody's,
Fitch or a Certificateholder such underlying data as may be reasonably
requested.

         SECTION 6.04. Annual Report of Accountants.
                       ----------------------------

         On or before May 1 of each year, commencing May 1, 2001, the Servicer
at its expense shall cause a firm of independent public accountants which is a
member of the American Institute of Certified Public Accountants to issue to the
Servicer a report that such firm has examined selected documents, records and
management's assertions relating to loans serviced by the Servicer and stating
that, on the basis of such examination, such servicing has been conducted in
compliance with the minimum servicing standards identified in the Mortgage
Bankers Association of America's Uniform Single Attestation Program for Mortgage
Bankers, or any successor uniform program, except for such significant
exceptions or errors in records that, in the opinion of such firm, generally
accepted attestation standards requires it to report.

                                       6-1
<PAGE>

         SECTION 6.05. Statements to Certificateholders.
                       --------------------------------

         a.       The Servicer shall prepare and furnish to the Trustee the
statements specified below relating to the Class A Certificates, Class M-1
Certificates, Class M-2 Certificates, Class B-1 Certificates, Class B-2
Certificates and Class B-3I Certificates on or before the third Business Day
next preceding each Remittance Date. The Trustee and the Servicer shall inform
any Certificateholder or any Underwriter inquiring by telephone of the
information contained in the most recent Monthly Report.

         b.       Concurrently with each distribution charged to the Certificate
Account the Trustee, so long as it has received the Monthly Report from the
Servicer, shall forward or cause to be forwarded by mail to each Holder of a
Class A Certificate and (if the Originator is not the Servicer) the Originator a
statement setting forth the following:

         (i)      the amount of such distribution to Holders of each Class of
                  Class A Certificates allocable to interest, separately
                  identifying any Unpaid Class A Interest Shortfall included in
                  such distribution and any remaining Unpaid Class A Interest
                  Shortfall after giving effect to such distribution;

         (ii)     the amount of such distribution to Holders of each Class of
                  Class A Certificates allocable to principal, separately
                  identifying the aggregate amount of any Principal Prepayments
                  included therein, and any remaining Unpaid Class A Principal
                  Shortfall after giving effect to such distribution;

         (iii)    the Class Principal Balance for each Class of Class A
                  Certificates, after giving effect to the distribution of
                  principal on such Remittance Date;

         (iv)     the Class A Percentage for such Remittance Date and the
                  following Remittance Date;

         (v)      the Pool Scheduled Principal Balance of the Contracts for such
                  Remittance Date;

         (vi)     the Pool Factor;

         (vii)    the number and aggregate principal balances of Contracts
                  delinquent (a) 30-59 days and (b) 60 or more days;

         (viii)   the number of Manufactured Homes that were repossessed during
                  the month ending immediately prior to such Remittance Date,
                  the number of repossessed Manufactured Homes that remain in
                  inventory as of the last day of the related Due Period and
                  repossessed Manufactured Homes purchased by the Originator or
                  a subsidiary of the Originator from the Trust (during the
                  related Due Period and cumulatively) by number of Contracts,
                  aggregate Scheduled Principal Balance of such Contracts and
                  aggregate purchase price;

         (ix)     number of Contracts and aggregate Scheduled Principal Balance
                  of Contracts extended or otherwise amended during the Due
                  Period preceding current Remittance Date.

                                       6-2
<PAGE>

         (x)      the Class M-1 Distribution Test (as set forth in Exhibit N
                  hereto);

         (xi)     the Class M-2 Distribution Test (as set forth in Exhibit N
                  hereto);

         (xii)    the Class B Distribution Test (as set forth in Exhibit N
                  hereto);

         (xiii)   the Weighted Average Contract Rate of all outstanding
                  Contracts;

         (xiv)    the Class M-1 Interest Deficiency Amount, if any, for such
                  Remittance Date;

         (xv)     the Class M-2 Interest Deficiency Amount, if any, for such
                  Remittance Date;

         (xvi)    the Class B-1 Interest Deficiency Amount, if any, for such
                  Remittance Date;

         (xvii)   the Overcollateralization Amount, if any, for such Remittance
                  Date; and

         (xviii)  the Additional Principal Distribution Amount, if any, to be
                  distributed on such Remittance Date pursuant to Section
                  8.03(a)(12)..

         In the case of information furnished pursuant to clauses (i) through
(iii) above, the amounts shall be expressed as a dollar amount per Class A
Certificate with a $1,000 denomination.

         Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Class A Certificate a
statement containing the information with respect to interest accrued and
principal paid on its Certificates during such calendar year. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time in force.

         c.       On each Remittance Date, the Trustee shall forward or cause to
be forwarded by mail to each Holder of a Class M-1 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A Certificates on such
Remittance Date. The Servicer shall also furnish to the Trustee, which shall
forward such report to the Class M-1 Certificateholders as part of the Monthly
Report, the following information:

         (i)      the amount of such distribution to Holders of Class M-1
                  Certificates allocable to interest, separately identifying any
                  Unpaid Class M-1 Interest Shortfall included in such
                  distribution, any remaining Unpaid Class M-1 Interest
                  Shortfall after giving effect to such distribution, any Class
                  M-1 Liquidation Loss Interest Amount included in such
                  distribution and any remaining unpaid Class M-1 Liquidation
                  Loss Interest Shortfall after giving effect to such
                  distribution;

         (ii)     the amount of such distribution to Holders of Class M-1
                  Certificates allocable to principal, separately identifying
                  the aggregate amount of any Principal Prepayments included
                  therein and any remaining Unpaid Class M-1 Principal Shortfall
                  after giving effect to such distribution;

                                       6-3
<PAGE>

         (iii)    the Class M-1 Principal Balance and the Class M-1 Adjusted
                  Principal Balance (if different) after giving effect to the
                  distribution of principal on such Remittance Date;

         (iv)     the Class M-1 Percentage for such Remittance Date and the
                  following Remittance Date; and

         (v)      the information described above in Section 6.05(b)(v) through
                  (xviii).

         In the case of the information in clauses (i) through (iii) above, the
amounts shall be expressed as a dollar amount per Class M-1 Certificate with a
$1,000 denomination.

         Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Class M-1 Certificate a
statement containing the applicable distribution information provided pursuant
to this Section aggregated for such calendar year or applicable portion thereof
during which such Person was the Holder of a Class M-1 Certificate. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Code as from time to time enforced.

         d.       On each Remittance Date, the Trustee shall forward or cause to
be forwarded by mail to each Holder of a Class M-2 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A Certificates and Class M-1
Certificates on such Remittance Date. The Servicer shall also furnish to the
Trustee, which shall forward such report to the Class M-2 Certificateholders as
part of the Monthly Report, the following information:

         (i)      the amount of such distribution to Holders of Class M-2
                  Certificates allocable to interest, separately identifying any
                  Unpaid Class M-2 Interest Shortfall included in such
                  distribution, any remaining Unpaid Class M-2 Interest
                  Shortfall after giving effect to such distribution, any Class
                  M-2 Liquidation Loss Interest Amount included in such
                  distribution and any remaining unpaid Class M-2 Liquidation
                  Loss Interest Shortfall after giving effect to such
                  distribution;

         (ii)     the amount of such distribution to Holders of Class M-2
                  Certificates allocable to principal, separately identifying
                  the aggregate amount of any Principal Prepayments included
                  therein and any remaining Unpaid Class M-2 Principal Shortfall
                  after giving effect to such distribution;

         (iii)    the Class M-2 Principal Balance and the Class M-2 Adjusted
                  Principal Balance (if different) after giving effect to the
                  distribution of principal on such Remittance Date;

         (iv)     the Class M-2 Percentage for such Remittance Date and the
                  following Remittance Date; and

         (v)      the information described above in Section 6.05(b)(v) through
                  (xviii).

                                       6-4
<PAGE>

         In the case of the information in clauses (i) through (iii) above, the
amounts shall be expressed as a dollar amount per Class M-2 Certificate with a
$1,000 denomination.

         Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Class M-2 Certificate a
statement containing the applicable distribution information provided pursuant
to this Section aggregated for such calendar year or applicable portion thereof
during which such Person was the Holder of a Class M-2 Certificate. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Code as from time to time enforced.

         e.       On each Remittance Date, the Trustee shall forward or cause to
be forwarded by mail to each Holder of a Class B-1 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1 and Class M-2
Certificates on such Remittance Date. The Servicer shall also furnish to the
Trustee, which shall forward such report to the Class B-1 Certificateholders as
part of the Monthly Report, the following information:

         (i)      the amount of such distribution to Holders of Class B-1
                  Certificates allocable to interest, separately identifying any
                  Unpaid Class B-1 Interest Shortfall included in such
                  distribution, any remaining Unpaid Class B-1 Interest
                  Shortfall after giving effect to such distribution, any Class
                  B-1 Liquidation Loss Interest Amount included in such
                  distribution and any remaining Unpaid Class B-1 Liquidation
                  Loss Interest Shortfall after giving effect to such
                  distribution;

         (ii)     the amount of such distribution to Holders of Class B-1
                  Certificates allocable to principal, separately identifying
                  the aggregate amount of any Principal Prepayments included
                  therein, and any remaining Unpaid Class B-1 Principal
                  Shortfall after giving effect to such distribution;

         (iii)    the Class B-1 Principal Balance and the Class B-1 Adjusted
                  Principal Balance (if different) after giving effect to the
                  distribution of principal on such Remittance Date;

         (iv)     the Class B Percentage for such Remittance Date and the
                  following Remittance Date; and

         (v)      the information described above in Section 6.05(b)(v) through
                  (xviii).

         In the case of the information in clauses (i) through (iii) above, the
amounts shall be expressed as a dollar amount per Class B-1 Certificate with a
$1,000 denomination.

         Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Class B-1 Certificate a
statement containing the applicable distribution information provided pursuant
to this Section aggregated for such calendar year or applicable portion thereof
during which such Person was the Holder of a Class B-1 Certificate. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable

                                       6-5
<PAGE>

information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time enforced.

         f.       On each Remittance Date, the Trustee shall forward or cause to
be forwarded by mail to each Holder of a Class B-2 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1, Class M-2 and
Class B-1 Certificates on such Remittance Date. The Servicer shall also furnish
to the Trustee, which shall forward such report to the Class B-2
Certificateholders as part of the Monthly Report, the following information:

         (i)      the amount of such distribution to Holders of Class B-2
                  Certificates allocable to interest, separately identifying any
                  Unpaid Class B-2 Interest Shortfall included in such
                  distribution and any remaining Unpaid Class B-2 Interest
                  Shortfall after giving effect to such distribution;

         (ii)     the amount of such distribution to Holders of Class B-2
                  Certificates allocable to principal, separately identifying
                  the aggregate amount of any Principal Prepayments included
                  therein, and any Unpaid Class B-2 Principal Shortfall after
                  giving effect to such distribution;

         (iii)    the amount, if any, by which the Class B-2 Formula
                  Distribution Amount for such Remittance Date exceeds the
                  Remaining Amount Available for such Remittance Date;

         (iv)     the Class B-2 Principal Balance and Class B-2 Adjusted
                  Principal Balance, if different, after giving effect to the
                  distribution of principal on such Remittance Date;

         (v)      the Class B Percentage for such Remittance Date and the
                  following Remittance Date;

         (vi)     the information described above in Section 6.05(b)(v) through
                  (xviii);

         (vii)    the Class B-2 Liquidation Loss Amount, if any, for such
                  Remittance Date; and

         (viii)   the Weighted Average Contract Rate of all outstanding
                  Contracts.

         In the case of the information in clauses (i) through (iv) above, the
amounts shall be expressed as a dollar amount per Class B-2 Certificate with a
$1,000 denomination.

         Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Class B-2 Certificate a
statement containing the applicable distribution information provided pursuant
to this Section aggregated for such calendar year or applicable portion thereof
during which such Person was the Holder of a Class B-2 Certificate. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Code as from time to time enforced.

                                       6-6
<PAGE>

         g.       On each Remittance Date, the Trustee shall forward or cause to
be forwarded by mail to each Holder of a Class B-3I Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1, Class M-2, Class
B-1 and Class B-2 Certificates on such Remittance Date. The Servicer shall also
furnish to the Trustee, which shall forward such report to the Class B-3I
Certificateholders as part of the Monthly Report, the following information:

         (i)      the Class B-3I Formula Distribution Amount for such Remittance
                  Date, including any Unpaid Class B-3I Shortfall immediately
                  prior to such Remittance Date;

         (ii)     the Class B-3I Distribution Amount for such Remittance Date;
                  and

         (iii)    the Unpaid Class B-3I Shortfall immediately following such
                  Distribution Date.

         h.       Copies of all reports provided to the Trustee for the
Certificateholders shall also be provided to Standard & Poor's, Moody's and
Fitch and to the Class C Certificateholders. In addition, Certificate Owners may
receive copies of any reports provided to the Trustee for the
Certificateholders, upon written request together with a certification that they
are Certificate Owners and payment of reproduction and postage expenses
associated with the distribution of such reports, from the Trustee at the
Corporate Trust Office.

         SECTION 6.06. Payment of Taxes.
                       ----------------

         The Servicer shall be responsible for and agrees to prepare, make and
file all federal, state, local or other tax returns, information statements and
other returns and documents of every kind and nature whatsoever required to be
made or filed by or on behalf of the Subsidiary REMIC or Master REMIC pursuant
to the Code and other applicable tax laws and regulations. Each such return,
statement and document shall, to the extent required by the Code or other
applicable law and at the request of the Servicer, be signed on behalf of the
Subsidiary REMIC or Master REMIC by the Trustee. The Trustee shall have no
responsibility whatsoever for the accuracy or completeness of any such return,
statement or document. The Servicer agrees to indemnify the Trustee and hold it
harmless for, from, against and in respect to any and all liability, loss,
damage and expense which may be incurred by the Trustee based upon or as a
result of the Trustee's execution of any and all such tax returns, statements
and documents. The Servicer, if and for so long as it is a Class C
Certificateholder, shall be designated the "tax matters person" on behalf of the
Subsidiary REMIC and the Master REMIC, respectively, in the same manner as a
partnership may designate a "tax matters partner," as such term is defined in
Section 6231(a)(7) of the Code. To the extent permitted by the REMIC Provisions,
any subsequent holder of a Class C Certificate, by acceptance thereof,
irrevocably designates and appoints the Servicer as its agent to perform the
responsibilities of the "tax matters person" on behalf of the Subsidiary REMIC
and the Master REMIC, respectively, if, and during such time as, the Servicer is
not the holder of a Class C Certificate. The Servicer may, at its expense,
retain such outside assistance as it deems necessary in the performance of its
obligations under this paragraph.

         Each of the Holders of the Certificates, by acceptance thereof, agrees
to file tax returns consistent with and in accordance with any elections,
decisions or other reports made or filed with regard to federal, state or local
taxes on behalf of the Subsidiary REMIC or the Master

                                       6-7
<PAGE>

REMIC. The Originator, as agent for the tax matters person, shall represent the
Subsidiary REMIC or the Master REMIC in connection with all examinations of the
Subsidiary REMIC's or the Master REMIC's affairs by tax authorities, including
resulting administrative and judicial proceedings. Each of the holders of the
Certificates, by acceptance thereof, agrees to cooperate with the Originator in
such matters and to do or refrain from doing any or all things reasonably
required by the Originator to conduct such proceedings, provided that no such
action shall be required by the Originator of any Certificateholder that would
entail unnecessary or unreasonable expenses for such Certificateholder in the
performance of such action.

         The Class C Subsidiary Certificateholders and the Class C Master
Certificateholders shall pay, on behalf of the Subsidiary REMIC or the Master
REMIC, respectively, any foreign, federal, state or local income, property,
excise, sales, receipts or any other similar or related taxes or charges which
may be imposed upon the Subsidiary REMIC or the Master REMIC as a REMIC or
otherwise and shall, to the extent provided in Section 10.06, be entitled to be
reimbursed out of the Certificate Account or, if such tax or charge results from
a failure by the Trustee, the Originator or any Servicer to comply with the
provisions of Section 2.04 or 3.07, the Trustee, the Originator or such
Servicer, as the case may be, shall indemnify the Class C Certificateholders for
the payment of any such tax or charge. The Trustee shall be entitled to withhold
from amounts otherwise distributable to the Class C Certificateholders any taxes
or charges payable by the Class C Certificateholders hereunder.

         In the event a Class C Certificate is transferred to a "disqualified
organization," within the meaning of Section 860E(e)(5) of the Code, pursuant to
Section 860D(a)(6)(B) of the Code the Seller shall provide to the Internal
Revenue Service and the persons specified in Sections 860E(e)(3) and (6) of the
Code all information necessary for the application of Section 860E(e) and any
other applicable provision of the Code with respect to the transfer of such
Class C Certificate to such a disqualified organization including, without
limitation, a computation showing the present value of the total anticipated
excess inclusions with respect to such Class C Certificate for periods after the
transfer as defined in the REMIC Provisions. In addition, to the extent required
by the REMIC Provisions, the Seller shall, upon the written request of persons
designated in Section 860E(e)(3) of the Code, furnish to such requesting party
and the Internal Revenue Service information sufficient to compute the present
value of anticipated excess inclusions within 60 days of the receipt of such
written request.

                                       6-8
<PAGE>

                                   ARTICLE VII

                                SERVICE TRANSFER
                                ----------------

         SECTION 7.01. Event of Termination.
                       --------------------

         "Event of Termination" means the occurrence of any of the following:

         a.       Any failure by the Servicer to make any deposit into an
account required to be made hereunder and the continuance of such failure for a
period of five Business Days after the Servicer has become aware, or should have
become aware, that such deposit was required;

         b.       Failure on the Servicer's part to observe or perform in any
material respect any covenant or agreement in this Agreement (other than a
covenant or agreement which is elsewhere in this Section specifically dealt
with) which continues unremedied for 30 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Servicer by the Trustee or to the Servicer and the Trustee by Holders of
Class A Certificates, Class M-1 Certificates, Class M-2 Certificates and Class B
Certificates evidencing, as to any such Class, Percentage Interests aggregating
not less than 25%;

         c.       Any assignment by the Servicer of its duties hereunder except
as specifically permitted hereunder, or any attempt to make such an assignment;

         d.       A court or other governmental authority having jurisdiction in
the premises shall have entered a decree or order for relief in respect of the
Servicer in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Servicer, as the case may be, or for any substantial liquidation of its
affairs, and such order remains undischarged and unstayed for at least 60 days;

         e.       The Servicer shall have commenced a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall have consented to the entry of an order for relief in an
involuntary case under any such law, or shall have consented to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee, custodian
or sequestrator (or other similar official) of the Servicer or for any
substantial part of its property, or shall have made any general assignment for
the benefit of its creditors, or shall have failed to, or admitted in writing
its inability to, pay its debts as they become due, or shall have taken any
corporate action in furtherance of the foregoing; or

         f.       The failure of the Servicer to be an Eligible Servicer.

         SECTION 7.02. Transfer.
                       --------

         If an Event of Termination has occurred and is continuing, either the
Trustee or Certificateholders with aggregate Percentage Interests representing
25% or more of the Trust, by notice in writing to the Servicer (and to the
Trustee if given by the Certificateholders) may terminate all (but not less than
all) of the Servicer's management, administrative, servicing and collection
functions (such termination being herein called a "Service Transfer"). On
receipt of

                                       7-1
<PAGE>

such notice (or, if later, on a date designated therein), or upon resignation of
the Servicer in accordance with Section 12.01, all authority and power of the
Servicer under this Agreement, whether with respect to the Contracts, the
Contract Files, the Land-and-Home Contract Files or otherwise (except with
respect to the Certificate Account, the transfer of which shall be governed by
Section 7.06), shall pass to and be vested in the Trustee pursuant to and under
this Section 7.02; and, without limitation, the Trustee is authorized and
empowered to execute and deliver on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments (including, without
limitation, documents required to make the Trustee or a successor servicer the
sole lienholder or legal title holder of record of each Manufactured Home) and
to do any and all acts or things necessary or appropriate to effect the purposes
of such notice of termination. Each of the Originator and the Servicer agrees to
cooperate with the Trustee in effecting the termination of the responsibilities
and rights of the Servicer hereunder, including, without limitation, the
transfer to the Trustee for administration by it of all cash amounts which shall
at the time be held by the Servicer for deposit, or have been deposited by the
Servicer, in the Certificate Account, or for its own account in connection with
its services hereafter or thereafter received with respect to the Contracts and
the execution of any documents required to make the Trustee or a successor
servicer the sole lienholder or legal title holder of record in respect of each
Manufactured Home. The Servicer shall be entitled to receive any other amounts
which are payable to the Servicer under the Agreement, at the time of the
termination of its activities as Servicer. The Servicer shall transfer to the
new servicer (i) the Servicer's records relating to the Contracts in such
electronic form as the new servicer may reasonably request and (ii) any
Contracts, Contract Files and Land-and-Home Contract Files in the Servicer's
possession.

         SECTION 7.03. Trustee to Act; Appointment of Successor.
                       ----------------------------------------

         On and after the time the Servicer receives a notice of termination
pursuant to Section 7.02 or the resignation of the Servicer in accordance with
Section 12.01, the Trustee shall be the successor in all respects to the
Servicer in its capacity as servicer under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof and the Servicer shall be relieved of such
responsibilities, duties and liabilities arising after such Service Transfer;
provided, however, that (i) the Trustee will not assume any obligations of the
Originator pursuant to Section 3.06 and (ii) the Trustee shall not be liable for
any acts or omissions of the Servicer occurring prior to such Service Transfer
or for any breach by the Servicer of any of its obligations contained herein or
in any related document or agreement. As compensation therefor, the Trustee
shall be entitled to receive reasonable compensation out of the Monthly
Servicing Fee and the Additional Monthly Servicing Fee. Notwithstanding the
above, the Trustee may, if it shall be unwilling so to act, or shall, if it is
legally unable so to act, appoint, or petition a court of competent jurisdiction
to appoint, an Eligible Servicer as the successor to the Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder. Pending appointment of a successor to the Servicer
hereunder, unless the Trustee is prohibited by law from so acting, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Contracts as it and such
successor shall agree; provided, however, that no such monthly compensation
shall, without the written consent of 100% of the Certificateholders,

                                       7-2
<PAGE>

exceed the Monthly Servicing Fee and the Additional Monthly Servicing Fee. The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.

         SECTION 7.04. Notification to Certificateholders.
                       ----------------------------------

         a.       Promptly following the occurrence of any Event of Termination,
the Servicer shall give written notice thereof to the Trustee, the Rating
Agencies and the Certificateholders at their respective addresses appearing on
the Certificate Register.

         b.       Within ten days following any termination or appointment of a
successor to the Servicer pursuant to this Article VII, the Trustee shall give
written notice thereof to the Rating Agencies and the Certificateholders at
their respective addresses appearing on the Certificate Register.

         c.       The Trustee shall give written notice to the Rating Agencies
at least 30 days prior to the date upon which any Eligible Servicer (other than
the Trustee) is to assume the responsibilities of Servicer pursuant to Section
7.03, naming such successor Servicer.

         SECTION 7.05. Effect of Transfer.
                       ------------------

         a.       After the Service Transfer, the Trustee or new Servicer may
notify Obligors to make payments directly to the new Servicer that are due under
the Contracts after the effective date of the Service Transfer.

         b.       After the Service Transfer, the replaced Servicer shall have
no further obligations with respect to the management, administration, servicing
or collection of the Contracts and the new Servicer shall have all of such
obligations, except that the replaced Servicer will transmit or cause to be
transmitted directly to the new Servicer for its own account, promptly on
receipt and in the same form in which received, any amounts (properly endorsed
where required for the new Servicer to collect them) received as payments upon
or otherwise in connection with the Contracts.

         c.       A Service Transfer shall not affect the rights and duties of
the parties hereunder (including but not limited to the indemnities of the
Servicer and the Originator pursuant to Article X and Sections 3.06, 11.06 and
11.11(f)) other than those relating to the management, administration, servicing
or collection of the Contracts.

         SECTION 7.06. Transfer of Certificate Account.
                       -------------------------------

         Notwithstanding the provisions of Section 7.02, if the Certificate
Account shall be maintained with the Servicer and an Event of Termination shall
occur and be continuing, the Servicer shall, after five days' written notice
from the Trustee, or in any event within ten days after the occurrence of the
Event of Termination, establish an Eligible Account with an institution other
than the Servicer and promptly transfer all funds in the Certificate Account to
such new account, which shall thereafter be deemed the Certificate Account for
the purposes hereof.

                                       7-3
<PAGE>

                                  ARTICLE VIII

                                    PAYMENTS
                                    --------

         SECTION 8.01. Monthly Payments.
                       ----------------

         a.       Subject to the terms of this Article VIII, each Holder of a
Certificate as of a Record Date shall be paid on the next succeeding Remittance
Date by check mailed on such Remittance Date to such Certificateholder at the
address for such Certificateholder appearing on the Certificate Register (or, if
such Certificateholder holds a Class of Class A Certificates, Class M
Certificates, or Class B Certificates with an aggregate Percentage Interest of
at least 5% or a Class B-3I, Class C Subsidiary or Class C Master
Certificateholder holds Class B-3I, Class C Subsidiary or Class C Master
Certificates with an aggregate Percentage Interest of at least 20% and so
requests, by wire transfer pursuant to instructions delivered to the Trustee at
least ten days prior to such Remittance Date), the sum equal to such
Certificateholder's Percentage Interest of all amounts distributed on the
applicable Class of Certificates. Final payment of any Certificate shall be made
only upon presentation of such Certificate at the office or agency of the Paying
Agent.

         b.       Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, which shall credit the amount of such
distribution to the accounts of its Depository Participants in accordance with
its normal procedures. Each Depository Participant shall be responsible for
disbursing such distribution to the Certificate Owners that it represents and to
each indirect participating brokerage firm (a "brokerage firm" or "indirect
participating firm") for which it acts as agent. Each brokerage firm shall be
responsible for disbursing funds to the Certificate Owners that it represents.
All such credits and disbursements with respect to a Book-Entry Certificate are
to be made by the Depository and the Depository Participants in accordance with
the provisions of the Book Entry Certificates. Neither the Trustee, the
Certificate Registrar, the Originator, the Seller nor the Servicer shall have
any responsibility therefor except as otherwise provided by applicable law. To
the extent applicable and not contrary to the rules of the Depository, the
Trustee shall comply with the provisions of the forms of the Class A, Class M,
and Class B Certificates as set forth in Exhibits A, B and C hereto.

         c.       The Trustee shall either act as the paying agent or shall
appoint an institution meeting the eligibility requirements set forth in Section
11.06 to be the paying agent (in either case, the "Paying Agent") and cause it
to make the payments to the Certificateholders required hereunder. The Trustee's
Corporate Trust Office at 180 East Fifth Street, St. Paul, Minnesota 55101,
Attention: Tamara Schultz-Fugh, shall initially act as Paying Agent. The Trustee
shall require the Paying Agent (if other than the Trustee) to agree in writing
that all amounts held by the Paying Agent for payment hereunder will be held in
trust for the benefit of the Certificateholders and that it will notify the
Trustee of any failure by the Servicer to make funds available to the Paying
Agent for the payment of amounts due on the Certificates.

                                      8-1
<PAGE>

         SECTION 8.02. Permitted Withdrawals from the Certificate Account.
                       --------------------------------------------------

         The Trustee may, from time to time as provided herein, make withdrawals
from the Certificate Account of amounts deposited in said account pursuant to
Section 5.05 that are attributable to the Contracts for the following purposes:

         a.       to make payments in the amounts and in the manner provided for
in Section 8.03;

         b.       to pay to the Originator with respect to each Contract or
property acquired in respect thereof that has been repurchased or replaced
pursuant to Section 3.06, all amounts received thereon and not required to be
distributed to Certificateholders as of the date on which the related Scheduled
Principal Balance or Repurchase Price is determined;

         c.       to reimburse the Servicer out of Liquidation Proceeds for
Liquidation Expenses incurred by it, to the extent such reimbursement is
permitted pursuant to Section 5.08;

         d.       to withdraw any amount deposited in the Certificate Account
that was not required to be deposited therein; or

         e.       to make any rebates or adjustments deemed necessary by the
Servicer pursuant to Section 5.06(d).

         Since, in connection with withdrawals pursuant to clause (b), the
Servicer's entitlement thereto is limited to collections or other recoveries on
the related Contract, the Servicer shall keep and maintain separate accounting,
on a Contract by Contract basis, for the purpose of justifying any withdrawal
from the Certificate Account pursuant to such clause.

         SECTION 8.03. Payments.
                       --------

         a.       On each Remittance Date the Trustee shall withdraw from the
Certificate Account the Amount Available (as determined on the immediately
preceding Determination Date), plus (x) on the Post-Funding Remittance Date any
Pre-Funded Amount, (y) on the Funding Termination Date any amount withdrawn from
the Staged-Funding Contract Reserve Account and deposited in the Certificate
Account as described in Section 3.08(c), and (z) on the Remittance Dates in
November 2000 and December 2000 any amount withdrawn from the Capitalized
Interest Account and deposited in the Certificate Account, and apply such funds
to make payment in the following order of priority, subject to Section 8.03(d):

                  1.       if neither Conseco Finance Corp. nor a wholly owned
         subsidiary of Conseco Finance Corp. is the Servicer, to pay the Monthly
         Servicing Fee and any other compensation owed to the Servicer pursuant
         to Section 7.03, except the Additional Monthly Servicing Fee;

                  2.       after payment of the amount specified in clause (1)
         above, to the Class A Certificateholders as follows:

                  (i)      the amount in clause (a)(i) of the definition of
                           Class A Formula Distribution Amount to the Class A-1
                           Certificateholders; the amount in

                                       8-2
<PAGE>

                           clause (a)(ii) to the Class A-2 Certificateholders;
                           the amount in clause (a)(iii) to the Class A-3
                           Certificateholders; the amount in clause (a)(iv) to
                           the Class A-4 Certificateholders; the amount in
                           clause (a)(v) to the Class A-5 Certificateholders;
                           the amount in clause (a)(vi) to the Class A-6
                           Certificateholders; the amount in clause (a)(vii) to
                           the Class A-7 Certificateholders, or, if the
                           available amount is less than the sum of the amounts
                           specified in this clause (i), pro rata to each Class
                           of Class A Certificates based on the amount of
                           interest payable pursuant to this clause;

                  (ii)     the aggregate Unpaid Class A Interest Shortfall pro
                           rata to each Class of Class A Certificates based on
                           the Unpaid Class A Interest Shortfall of each such
                           Class;

                  3.       after payment of the amounts specified in clauses (1)
         - (2) above, to the Class M-1 Certificateholders as follows:

                  (i)      the amount in clause (a) of the definition of Class
                           M-1 Formula Distribution Amount;

                  (ii)     any Unpaid Class M-1 Interest Shortfall;

                  4.       after payment of the amounts specified in clauses (1)
         - (3) above, to the Class M-2 Certificateholders as follows:

                  (i)      the amount in clause (a) of the definition of Class
                           M-2 Formula Distribution Amount;

                  (ii)     any Unpaid Class M-2 Interest Shortfall;

                  5.       after payment of the amounts specified in clauses (1)
         - (4) above, to the Class B-1 Certificateholders as follows:

                  (i)      the amount in clause (a) of the definition of Class
                           B-1 Formula Distribution Amount;

                  (ii)     any Unpaid Class B-1 Interest Shortfall;

                  6.       after payment of the amounts specified in clauses (1)
         - (5) above, to the Class A Certificateholders as follows:

                  (i)      if there is a Class A Principal Deficiency Amount as
                           of such Remittance Date, the remaining Amount
                           Available, pro rata to each Class of Class A
                           Certificates based on the related Class Principal
                           Balance (but in no event shall such amount exceed the
                           related Class Principal Balance);

                  (ii)     the Unpaid Class A Principal Shortfall to the Class
                           A-1, Class A-2, Class A-3, Class A-4, Class A-5,
                           Class A-6 and Class A-7 Certificateholders in

                                       8-3
<PAGE>

                           the order of priority set forth in clause (iii)
                           below, but to each Class of Class A Certificates no
                           more than the Unpaid Class A Principal Shortfall
                           attributable to such Class;

                  (iii)    if such Remittance Date is on or prior to the Class
                           A-7 Cross-Over Date, the Class A Percentage of the
                           Formula Principal Distribution Amount to the Class A
                           Certificateholders as follows:

                           (a)      to the Class A-1 Certificateholders, but in
                                    no event more than the Class A-1 Principal
                                    Balance;

                           (b)      to the Class A-2 Certificateholders, but in
                                    no event more than the Class A-2 Principal
                                    Balance;

                           (c)      to the Class A-3 Certificateholders, but in
                                    no event more than the Class A-3 Principal
                                    Balance;

                           (d)      to the Class A-4 Certificateholders, but in
                                    no event more than the Class A-4 Principal
                                    Balance;

                           (e)      to the Class A-5 Certificateholders, but in
                                    no event more than the Class A-5 Principal
                                    Balance;

                           (f)      to the Class A-6 Certificateholders, but in
                                    no event more than the Class A-6 Principal
                                    Balance;

                           (g)      to the Class A-7 Certificateholders, but in
                                    no event more than the Class A-7 Principal
                                    Balance;

                  7.       after payment of the amounts specified in clauses (1)
         - (6) above, to the Class M-1 Certificateholders as follows:

                  (i)      any Unpaid Class M-1 Principal Shortfall;

                  (ii)     the Class M-1 Percentage of the Formula Principal
                           Distribution Amount (plus, if such Remittance Date is
                           on the Class A-7 Cross-Over Date, the amount by which
                           the Class A Percentage of the Formula Principal
                           Distribution Amount exceeds the Class A Principal
                           Balance on such date), but in no event more than the
                           Class M-1 Principal Balance;

                  (iii)    any Class M-1 Liquidation Loss Interest Amount;

                  (iv)     any Unpaid Class M-1 Liquidation Loss Interest
                           Shortfall;

                  8.       after payment of the amounts specified in clauses (1)
         - (7) above, to the Class M-2 Certificateholders as follows:

                  (i)      any Unpaid Class M-2 Principal Shortfall;

                                       8-4
<PAGE>

                  (ii)     the Class M-2 Percentage of the Formula Principal
                           Distribution Amount (plus, if such Remittance Date is
                           on the Class M-1 Cross-Over Date, the amount, if any,
                           by which the sum of the Class A Percentage and the
                           Class M-1 Percentage of the Formula Principal
                           Distribution Amount exceeds the sum of the Class A
                           and Class M-1 Principal Balances on such date), but
                           in no event more than the Class M-2 Principal
                           Balance;

                  (iii)    any Class M-2 Liquidation Loss Interest Amount;

                  (iv)     any Unpaid Class M-2 Liquidation Loss Interest
                           Shortfall;

                  9.       after payment of the amounts specified in clauses (1)
         - (8) above, to the Class B-1 Certificateholders as follows:

                  (i)      any Unpaid Class B-1 Principal Shortfall;

                  (ii)     the Class B Percentage of the Formula Principal
                           Distribution Amount (plus, if such Remittance Date is
                           on the Class M-2 Cross-Over Date, the amount, if any,
                           by which the sum of the Class A, Class M-1 and Class
                           M-2 Percentages of the Formula Principal Distribution
                           Amount exceeds the sum of the Class A, Class M-1 and
                           Class M-2 Principal Balances on such date), but in no
                           event more than the Class B-1 Principal Balance;

                  (iii)    any Class B-1 Liquidation Loss Interest Amount;

                  (iv)     any Unpaid Class B-1 Liquidation Loss Interest
                           Shortfall;

                  10.      after payment of the amounts specified in clauses (1)
         - (9) above, to the Class B-2 Certificateholders as follows:

                  (i)      the amount in clause (a) of the definition of Class
                           B-2 Formula Distribution Amount;

                  (ii)     any Unpaid Class B-2 Interest Shortfall;

                  (iii)    any Unpaid Class B-2 Principal Shortfall;

                  (iv)     if such Remittance Date is on or after the Class B-1
                           Cross-Over Date, the Class B Percentage of the
                           Formula Principal Distribution Amount (minus, if such
                           Remittance Date is on the Class B-1 Cross-Over Date,
                           the amount of the Class B Percentage of the Formula
                           Principal Distribution Amount actually distributed to
                           the Class B-1 Certificateholders on such date, and
                           plus, if such Remittance Date is on the Class B-1
                           Cross-Over Date, the amount, if any, by which the
                           Formula Principal Distribution Amount exceeds the sum
                           of the Class A Principal Balance, the Class M-1
                           Principal Balance, the Class M-2 Principal Balance
                           and the Class B-1 Principal Balance on such date);

                                       8-5
<PAGE>

                  11.      if Conseco Finance Corp. or a wholly owned subsidiary
         of the Company is the Servicer, after payment of the amounts specified
         in clauses (1) - (10) above, to pay the Monthly Servicing Fee and any
         other compensation owed to the Servicer pursuant to Section 7.02, and
         if Conseco Finance Corp. or a wholly owned subsidiary of Conseco
         Finance is not the Servicer, to pay the Additional Monthly Servicing
         Fee to the Servicer;

                  12.      after payment of the amounts specified in clauses (1)
         - (11) above, to the Certificateholders any Additional Principal
         Distribution Amount, as follows and in no case more than the Class
         Principal Balance of any Class:

                  (i)      to the Class A Certificateholders (sequentially,
                           beginning with Class A-1), the amount, if any, by
                           which the aggregate Additional Principal Distribution
                           Amount distributed on prior Remittance Dates pursuant
                           to this clause (i) is less than $7,500,000; and

                  (ii)     on each Additional Principal Payment Date (as defined
                           in Section 8.05(f)), to the Class M-1, Class M-2,
                           Class B-1 and Class B-2 Certificateholders pro rata
                           based upon the Class Principal Balance of each Class;

                  13.      after payment of the amounts specified in clauses (1)
         - (12) above, the Class B-3I Distribution Amount to the Class B-3I
         Certificateholders;

                  14.      after payment of the amounts specified in clauses (1)
         - (13) above, to reimburse the Class C Certificateholders for expenses
         incurred by and reimbursable to them pursuant to Section 10.06; and

                  15.      after payment of the amounts specified in clauses (1)
         - (14) above, any remaining funds to the Class C Master
         Certificateholders.

         b.       On each Remittance Date, the Uncertificated Subsidiary
Interests shall receive distributions, to the extent of the Adjusted Amount
Available, in the following order of priority:

                  1.       Each Class of Class A Uncertificated Subsidiary
         Interests shall receive a distribution of principal in an amount equal
         to the amount of principal distributed to its respective Corresponding
         Certificate Class pursuant to Section 8.03(a)(6);

                  2.       The Class M-S1 Interest shall receive a distribution
         of principal in an amount equal to the amount of principal distributed
         to the Class M-1 Certificates pursuant to Section 8.03(a)(7);

                  3.       The Class M-S2 Interest shall receive a distribution
         of principal in an amount equal to the amount of principal distributed
         to the Class M-2 Certificates pursuant to Section 8.03(a)(8);

                  4.       The Class B-S1 and Class B-S2 Interests shall receive
         distributions of principal in an amount equal to the amount of
         principal distributed to its respective Corresponding Certificate Class
         pursuant to Section 8.03(a)(9)-(10);

                                       8-6
<PAGE>

                  5.       Each Class of Uncertificated Subsidiary Interests
         shall receive distributions of interest, pro rata in an amount equal to
         (i) 1/12th of the Weighted Average Contract Rate times the outstanding
         Subsidiary Interest Principal Balance of such Class of Uncertificated
         Subsidiary Interests, plus (ii) any Unpaid Subsidiary Interest
         Shortfall with respect to such Class; and

                  6.       Any remaining Amount Available shall be distributed
         to the Class C Subsidiary Certificateholders.

         c.       If the applicable Monthly Report indicates a Class M-1
Interest Deficiency Amount, a Class M-2 Interest Deficiency Amount and/or a
Class B-1 Interest Deficiency Amount for such Remittance Date, the Trustee shall
withdraw from the Certificate Account (to the extent of funds on deposit therein
one Business Day prior to such Remittance Date, after distribution of the Amount
Available pursuant to Section 8.03(a)) an amount equal to the Class M-1 Interest
Deficiency Amount, the Class M-2 Interest Deficiency Amount and the Class B-1
Interest Deficiency Amount (or the amount of such funds in the Certificate
Account, if less) and distribute such amount, first to the Class M-1
Certificateholders up to the amount of the Class M-1 Interest Deficiency Amount
(or pro rata, if such funds are less than the Class M-1 Interest Deficiency
Amount), if any, then to the Class M-2 Certificateholders up to the amount of
the Class M-2 Interest Deficiency Amount (or pro rata, if such funds are less
than the Class M-2 Interest Deficiency Amount), if any, and then to the Class
B-1 Certificateholders up to the amount of the Class B-1 Interest Deficiency
Amount (or pro rata, if such remaining funds are less than the Class B-1
Interest Deficiency Amount); provided, however, that (i) no such withdrawal
shall be made with respect to the Class M-1 Interest Deficiency Amount if the
Cumulative Realized Losses as of such Remittance Date are greater than
$157,500,000; (ii) no such withdrawal shall be made with respect to the Class
M-2 Interest Deficiency Amount if the Cumulative Realized Losses as of such
Remittance Date are greater than $131,250,000; (iii) no withdrawal with respect
to Class B-1 Interest Deficiency Amount shall be made if the Cumulative Realized
Losses as of such Remittance Date are greater than $105,000,000; (iv) no
withdrawal with respect to a Class M-1 Interest Deficiency Amount shall be made
if the aggregate withdrawals with respect to all prior Class M-1 Interest
Deficiency Amounts equal $2,362,500; (v) no withdrawal with respect to a Class
M-2 Interest Deficiency Amount shall be made if the aggregate withdrawals with
respect to all prior Class M-2 Interest Deficiency Amounts equal $2,031,750; and
(vi) no withdrawal with respect to a Class B-1 Interest Deficiency Amount shall
be made if the aggregate withdrawals with respect to all prior Class B-1
Interest Deficiency Amounts equal $1,722,938.

         d.       Notwithstanding the priorities set forth above, any Pre-Funded
Amount deposited in the Certificate Account shall be applied solely to pay
principal of the Class A Certificates sequentially, beginning with Class A-1,
and any amount withdrawn from the Capitalized Interest Account and deposited in
the Certificate Account shall be applied solely as described in Section 8.06.

         e.       If the Trustee shall not have received the applicable Monthly
Report by any Remittance Date, the Trustee shall distribute all funds then in
the Certificate Account to Certificateholders in accordance with Section
8.03(a), to the extent of such funds, on such Remittance Date.

                                       8-7
<PAGE>

         SECTION 8.04. [Reserved].
                        --------

         SECTION 8.05. Class C Subsidiary Certificateholder's Purchase Option;
                       -------------------------------------------------------
                       Auction Sale; Additional Principal Distribution Amount.
                       ------------------------------------------------------

         a.       Subject to the conditions in subsection (b) below, the Class C
Subsidiary Certificateholder shall have the option to purchase all of the
Contracts and all property acquired in respect of any Contract remaining in the
Trust at a price (such price being referred to as the "Minimum Purchase Price")
equal to the greater of:

         A.       the sum of (x) 100% of the principal balance of each Contract
                  (other than any Contract as to which title to the underlying
                  property has been acquired and whose fair market value is
                  included pursuant to clause (y) below), plus (y) the fair
                  market value of such acquired property (as determined by the
                  Originator as of the close of business on the third Business
                  Day next preceding the date upon which notice of any such
                  termination is furnished to Certificateholders pursuant to
                  Section 12.04) or

         B.       the aggregate fair market value (as determined by the
                  Originator as of the close of business on such third Business
                  Day) of all of the assets of the Trust,

plus, in either case, any Unpaid Class A Interest Shortfall, any Unpaid Class
M-1 Interest Shortfall, any Unpaid Class M-1 Liquidation Loss Interest
Shortfall, any Unpaid Class M-2 Interest Shortfall, any Unpaid Class M-2
Liquidation Loss Interest Shortfall, any Unpaid Class B-1 Interest Shortfall,
any Unpaid Class B-1 Liquidation Loss Interest Shortfall and any Unpaid Class
B-2 Interest Shortfall as well as one month's interest at the applicable
Contract Rate on the Scheduled Principal Balance of each Contract (including any
Contract as to which the related Manufactured Home has been repossessed).

         b.       The purchase by the Class C Subsidiary Certificateholder of
all of the Contracts pursuant to Section 8.05(a) above shall be at the option of
the Class C Subsidiary Certificateholder, but shall be conditioned upon (1) the
Pool Scheduled Principal Balance, at the time of any such purchase, aggregating
not more than 20% of the Cut-off Date Pool Principal Balance, (2) such purchase
being made pursuant to a plan of complete liquidation of each of the Subsidiary
REMIC and the Master REMIC in accordance with Section 860F of the Code, as
provided in Section 12.03, (3) the Class C Subsidiary Certificateholder having
provided the Trustee and the Depository (if any) with at least 30 days' written
notice and (4) the Originator or the Servicer (as applicable) shall have
delivered to the Trustee an unqualified Opinion of Counsel stating that payment
of the purchase price to the Certificateholders will not constitute a voidable
preference or fraudulent transfer under the United States Bankruptcy Code. If
such option is exercised, the Class C Subsidiary Certificateholder, as
applicable, shall provide to the Trustee the certification required by Section
12.03, which certificate shall constitute a plan of complete liquidation of each
of the Subsidiary REMIC and the Master REMIC within the meaning of Section 860F
of the Code, and the Trustee shall promptly sign such certification and

                                       8-8
<PAGE>

release to the Class C Subsidiary Certificateholder, the Contract Files and
Land-and-Home Contract Files pertaining to the Contracts being repurchased.

         c.       The Class C Subsidiary Certificateholder may assign its rights
under this Section 8.05, separately from its other rights as Holder of the Class
C Subsidiary Certificates, by giving written notice of such assignment to the
Trustee. Following the Trustee's receipt of such notice of assignment, the
Trustee shall recognize only such assignee (or its assignee in turn) as the
Person entitled to exercise the purchase option set forth in Section 8.05(a).

         d.       The Servicer shall notify the Trustee and the Class C
Subsidiary Certificateholder (whether or not the Class C Subsidiary
Certificateholder has then assigned its rights under this Section 8.05 pursuant
to subsection (c)) no later than two Business Days after the Determination Date
relating to the first Due Period which includes the date on which the Pool
Scheduled Principal Balance first becomes less than or equal to 20% of the
Cut-off Date Pool Principal Balance, to the effect that the Pool Scheduled
Principal Balance is then less than or equal to 20% of the Cut-off Date Pool
Principal Balance.

         e.       If the Class C Subsidiary Certificateholder (or its assignee)
has not delivered to the Trustee the notice of exercise of its purchase option
described in subsection (b) by the Remittance Date occurring in the month
following the Determination Date specified in subsection (d), then promptly
after the following Remittance Date the Trustee shall begin a process for
soliciting bids in connection with an auction for the Contracts. The Trustee
shall provide the Class C Subsidiary Certificateholder (or its assignee) written
notice of such auction at least 10 Business Days prior to the date bids must be
received in such auction (the "Auction Date").

         If at least two bids are received, the Trustee shall solicit and
resolicit new bids from all participating bidders until only one bid remains or
the remaining bidders decline to resubmit bids. The Trustee shall accept the
highest of such remaining bids if it is equal to or in excess of the greater of
(i) the Minimum Purchase Price and (ii) the fair market value of the Contracts
and related property (such amount being referred to as the "Minimum Auction
Price"). If less than two bids are received or the highest bid after the
resolicitation process is completed is not equal to or in excess of the Minimum
Auction Price, the Trustee shall not consummate such sale. If a bid meeting the
Minimum Purchase Price is received, then the Trustee may, and if so requested by
the Class C Subsidiary Certificateholder shall, consult with a financial
advisor, which may be an underwriter of the Certificates, to determine if the
fair market value of the Contracts and related property has been offered.

         If the first auction conducted by the Trustee does not produce any bid
at least equal to the Minimum Auction Price, then the Trustee shall, beginning
on the Remittance Date occurring approximately three months after the Auction
Date for the failed first auction, commence another auction in accordance with
the requirement of this subsection (e). If such second auction does not produce
any bid at least equal to the Minimum Auction Price, then the Trustee shall,
beginning on the Remittance Date occurring approximately three months after the
Auction Date for the failed second auction, commence another auction in
accordance with the requirements of this subsection (e), and shall continue to
conduct similar auctions approximately every three months thereafter until the
earliest of (i) delivery by the Class C Subsidiary Certificateholder or

                                       8-9
<PAGE>

its assignee of notice of exercise of its purchase option under subsection (a),
(ii) receipt by the Trustee of a bid meeting the conditions specified in the
preceding paragraph, or (iii) the Remittance Date on which the principal balance
of all the Contracts is reduced to zero.

         If the Trustee receives a bid meeting the conditions specified in this
subsection (e), then the Trustee's written acceptance of such bid shall
constitute a plan of complete liquidation within the meaning of Section 860F of
the Code, and the Trustee shall release to the winning bidder, upon payment of
the bid purchase price, the Contract Files pertaining to the Contracts being
purchased.

         f.       If the Class C Subsidiary Certificateholder (or its assignee)
has not delivered to the Trustee the notice of exercise of its purchase option
described in subsection (b) by the Remittance Date occurring in the month
following the Determination Date specified in subsection (d), then on the
following Remittance Date and each Remittance Date thereafter (each, an
"Additional Principal Payment Date") the Class M-1, Class M-2, Class B-1 and
Class B-2 Certificates shall be entitled to receive the Additional Principal
Distribution Amount, allocated among such classes pro rata based upon the
outstanding Principal Balance of each such Class on each such Remittance Date.

         SECTION 8.06. Capitalized Interest Account.
                       ----------------------------

         a.       On or before the Closing Date, the Trustee shall establish the
Capitalized Interest Account on behalf of the Trust, which must be an Eligible
Account, and shall deposit therein $500,000 received from the Seller pursuant to
Section 2.02(u). The Capitalized Interest Account shall be entitled "U.S. Bank
National Association as Trustee for the benefit of holders of Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificates Series 2000-5." On
the Remittance Dates occurring in November 2000 and December 2000, if the
Monthly Report for such Remittance Date indicates that the Amount Available
(after payment of the amount specified in clause (1) of Section 8.03(a) and
including in the Amount Available only payments in respect of interest on the
Contracts) is not sufficient to pay the Class A Interest Distribution Amount,
plus the Class M-1 Interest Distribution Amount, plus the Class M-2 Interest
Distribution Amount, plus the Class B-1 Interest Distribution Amount, the
Trustee shall withdraw the amount of such deficiency, or the amount of funds in
the Capitalized Interest Account (net of any investment earnings thereon), if
less, and shall deposit such funds in the Certificate Account for distribution
on such Remittance Date in order first to pay any deficiency in the Amount
Available to pay the Class A Interest Distribution Amount, second to pay any
deficiency in the Amount Available to pay the Class M-1 Interest Distribution
Amount, third to pay any deficiency in the Amount Available to pay the Class M-2
Interest Distribution Amount, and fourth to pay any deficiency in the Amount
Available to pay the Class B-1 Interest Distribution Amount.

         b.       The Capitalized Interest Account shall be part of the Trust
but not part of the Subsidiary REMIC or the Master REMIC. The Trustee on behalf
of the Trust shall be the legal owner of the Capitalized Interest Account. Green
Tree Finance Corp.-Two shall be the beneficial owner of the Capitalized Interest
Account, subject to the foregoing power of the Trustee to transfer amounts in
the Capitalized Interest Account to the Certificate Account. Funds in the
Capitalized Interest Account shall, at the direction of Green Tree Finance
Corp.-Two, be

                                      8-10
<PAGE>

invested in Eligible Investments that mature no later than the Business Day
prior to the next succeeding Remittance Date. All net income and gain from such
investments shall be distributed to Green Tree Finance Corp.-Two on such
Remittance Date. All amounts earned on amounts on deposit in the Capitalized
Interest Account shall be taxable to Green Tree Finance Corp.-Two. Any losses on
such investments shall be deposited in the Capitalized Interest Account by Green
Tree Finance Corp.-Two out of its own funds immediately as realized.

         c.       Any funds remaining in the Capitalized Interest Account after
the Remittance Date in December 2000 shall be distributed to Green Tree Finance
Corp.-Two on such Remittance Date. After such date no further amounts shall be
deposited in or withdrawn from the Capitalized Interest Account.

         SECTION 8.07. Pre-Funding Account.
                       -------------------

         a.       On or before the Closing Date, the Trustee shall establish the
Pre-Funding Account on behalf of the Trust, which must be an Eligible Account.
The Pre-Funding Account shall be entitled "Pre-Funding Account, U.S. Bank
National Association as Trustee for the benefit of holders of Certificates,
Series 2000-5." The Trustee shall maintain within the Pre-Funding Account two
subaccounts, the Pre-Funding Subaccount and the Undelivered Contract Subaccount.
The Undelivered Contract Subaccount pertains to those Land-and-Home Contracts
transferred to the Trust on the Closing Date that are Undelivered Contracts.
Funds deposited in the Pre-Funding Account shall be held in trust by the Trustee
for the Holders of the Certificates for the uses and purposes set forth herein.

         b.       The Trustee shall deposit in the Pre-Funding Subaccount the
amount received from the Seller pursuant to Section 2.02(v). Amounts on deposit
in the Pre-Funding Subaccount shall be withdrawn by the Trustee as follows:

                  (i)      On any Subsequent Transfer Date, the Trustee shall
         withdraw an amount equal to 100% of the Cut-off Date Principal Balance
         of each Subsequent Contract transferred and assigned to the Trustee on
         such Subsequent Transfer Date and pay such amount to or upon the order
         of the Seller upon satisfaction of the conditions set forth in Section
         2.03(b) with respect to such transfer and assignment.

                  (ii)     On the Business Day immediately preceding the
         Post-Funding Remittance Date, the Trustee shall deposit into the
         Certificate Account any amounts remaining in the Pre-Funding
         Subaccount, net of investment earnings.

         c.       The Trustee shall deposit in the Undelivered Contract
Subaccount the amount received from the Seller pursuant to Section 2.02(w).
Amounts on deposit in the Undelivered Contract Subaccount shall be withdrawn by
the Trustee as follows:

                  (i)      If the Seller delivers the related Land-and-Home
         Contract File for an Undelivered Contract to the Trustee at least two
         Business Days before the last day of the Pre-Funding Period, the
         Trustee shall withdraw an amount equal to 100% of the Cut-off Date
         Principal Balance of such Contract and pay such amount to or upon the
         order of the Seller.

                                      8-11
<PAGE>

                  (ii)     [Reserved]

                  (iii)    The Seller shall give the Trustee telephonic notice
         of its intended delivery of Land-and-Home Contract Files. The Trustee
         will use reasonable efforts to process the Land-and-Home Contract Files
         and remit any amount payable for them to the Seller in a timely manner.

                  (iv)     On the Business Day immediately preceding the
         Post-Funding Remittance Date, the Trustee shall deposit into the
         Certificate Account any amounts remaining in the Undelivered Contract
         Subaccount, net of investment earnings.

         d.       The Pre-Funding Account shall be part of the Trust but not
part of the Master REMIC or Subsidiary REMIC. The Trustee on behalf of the Trust
shall be the legal owner of the Pre-Funding Account. The Seller shall be the
beneficial owner of the Pre-Funding Account, subject to the foregoing power of
the Trustee to transfer amounts in the Pre-Funding Account to the Certificate
Account. Funds in the Pre-Funding Account shall, at the direction of the
Servicer, be invested in Eligible Investments of the kind described in clauses
(i) and (ii)(A) of the definition of "Eligible Investment" and that mature no
later than the Business Day prior to the next succeeding Remittance Date. All
amounts earned on deposits in the Pre-Funding Account shall be taxable to the
Seller. Any losses on such investments shall be deposited in the Pre-Funding
Account by the Seller immediately as realized. The Trustee shall release to the
Seller all investment earnings in the Pre-Funding Account on the Post-Funding
Remittance Date.

                                      8-12
<PAGE>

                                   ARTICLE IX

            THE CERTIFICATES AND UNCERTIFICATED SUBSIDIARY INTERESTS
            --------------------------------------------------------

         SECTION 9.01. The Certificates.
                       ----------------

         a.       The Uncertificated Subsidiary Interests shall be issued as
nontransferable (except to a successor Trustee) uncertificated interests
evidencing, as to each such Class, 100% of the interest in distributions
required to made to such Class, and having the original Subsidiary Interest
Principal Balance specified with respect to such Class of Uncertificated
Subsidiary Interests. The Class C Subsidiary Certificate shall be substantially
in the form set forth in Exhibit J hereto, and shall, on original issue, be
executed by the Trustee on behalf of the Trust upon order of the Originator. The
Class C Subsidiary Certificate shall be issuable in Percentage Interests, and
shall be evidenced by a single Class C Subsidiary Certificate issued on the
Closing Date to Green Tree Finance Corp.-Two.

         b.       The Class A, the Class M, the Class B, the Class B-3I and the
Class C Master Certificates shall be substantially in the forms set forth in
Exhibits A, B, C-1, C-2, J and K, respectively, and shall, on original issue, be
executed by the Trustee on behalf of the Trust to or upon the order of the
Originator. The Class A, the Class M, and the Class B Certificates shall be
evidenced by (i) one or more Class A-1 Certificates representing $130,000,000
initial aggregate principal balance, (ii) one or more Class A-2 Certificates
representing $67,000,000 initial aggregate principal balance, (iii) one or more
Class A-3 Certificates representing $67,000,000 initial aggregate principal
balance, (iv) one or more Class A-4 Certificates representing $101,000,000
initial aggregate principal balance, (v) one or more Class A-5 Certificates
representing $40,000,000 initial aggregate principal balance, (vi) one or more
Class A-6 Certificates representing $117,000,000 initial principal balance,
(vii) two or more A-7 Certificates representing $104,250,000 initial principal
balance, (viii) one or more Class M-1 Certificates representing $37,500,000
initial aggregate principal balance, (ix) one or more Class M-2 Certificates
representing $30,000,000 initial aggregate principal balance, (x) one or more
Class B-1 Certificates representing $22,500,000 initial aggregate principal
balance, (xi) one or more Class B-2 Certificates representing $26,250,000
initial aggregate principal balance, beneficial ownership of such Classes of
Certificates to be held through Book-Entry Certificates in minimum dollar
denominations of $1,000 and integral dollar multiples of $1,000 in excess
thereof. The Class B-3I, Class C Master, and Class C Subsidiary Certificates
shall be issuable in Percentage Interests and shall each be evidenced by a
single certificate issued on the Closing Date to Green Tree Finance Corp.-Two.

         c.       The Certificates shall be executed by manual signature on
behalf of the Trustee by a duly authorized Responsible Officer or authorized
signatory. Certificates bearing the signatures of individuals who were at any
time the proper officers of the Trustee shall bind the Trustee, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to
the execution and delivery of such Certificate or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless such Certificate has
been executed by manual signature in accordance with this Section, and such
signature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered

                                       9-1
<PAGE>

hereunder. All Certificates shall be dated the date of their execution, except
for those Certificates executed on the Closing Date, which shall be dated the
Closing Date.

         SECTION 9.02. Registration of Transfer and Exchange of Certificates.
                       -----------------------------------------------------

         a.       The Trustee shall keep at the office or agency to be
maintained in accordance with Section 12.02 a "Certificate Register" in which
the Trustee shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided. The Trustee initially appoints
itself to be the "Certificate Registrar" and transfer agent for the purpose of
registering Certificates and transfers and exchanges of Certificates as provided
herein. The Trustee will give prompt written notice to Certificateholders and
the Servicer of any change in the Certificate Registrar.

         b.       (1)      Subject to clauses (2) and (3) below, no transfer of
a Class B-2 Certificate, Class B-3I Certificate, Class C Subsidiary Certificate
or Class C Master Certificate shall be made by the Originator or any other
Person unless such transfer is exempt from the registration requirements of the
Act, as amended, and any applicable state securities laws or is made in
accordance with the Act and laws. In the event that any such transfer is to be
made, (A) the Originator may require a written Opinion of Counsel acceptable to
and in form and substance satisfactory to the Originator that such transfer may
be made pursuant to an exemption, describing the applicable exemption and the
basis therefor, from the Act and laws or is being made pursuant to the Act and
laws, which Opinion of Counsel shall not be an expense of the Trustee or the
Originator, and (B) the Trustee shall require the transferee to execute an
investment letter substantially in the form of Exhibit M attached hereto, which
investment letter shall not be an expense of the Trustee or the Originator. Any
Class B-3I Certificateholder, Class C Subsidiary Certificateholder or Class C
Master Certificateholder desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee, the Originator and the Certificate Registrar
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.

                  (2)      No transfer of a Class M-1 Certificate, Class M-2
Certificate, a Class B Certificate, a Class B3I Certificate, a Class C
Subsidiary Certificate or a Class C Master Certificate or any interest therein,
shall be made to any employee benefit plan, trust or account that is subject to
ERISA, or that is described in Section 4975(e)(1) of the Code (each, a "Plan"),
unless the prospective transferee of a Certificate or interest therein provides
the Servicer and the Trustee with a certification of facts and, at its own
expense, an Opinion of Counsel which establish to the satisfaction of the
Servicer and the Trustee that such transfer will not result in a violation of
Section 406 of ERISA or Section 4975 of the Code or cause the Servicer, the
Originator or the Trustee to be deemed a fiduciary of such Plan or result in the
imposition of an excise tax under Section 4975 of the Code.

                  (3)      Notwithstanding anything to the contrary contained
herein, (A) neither the Class C Subsidiary Certificate nor the Class C Master
Certificate, nor any interest therein, shall be transferred, sold or otherwise
disposed of to a "disqualified organization," within the meaning of Section
860E(e)(5) of the Code (a "Disqualified Organization"), including, but not
limited to, (i) the United States, a state or political subdivision thereof, a
foreign government, an international organization or an agency or
instrumentality of any of the foregoing, (ii) an

                                       9-2
<PAGE>

organization (other than a cooperative described in Section 521 of the Code)
which is exempt from the taxes imposed by Chapter 1 of the Code and not subject
to the tax imposed on unrelated business income by Section 511 of the Code, or
(iii) a cooperative described in Section 1381(a)(2)(C) of the Code, and (B)
prior to any registration of any transfer, sale or other disposition of the
Class C Subsidiary Certificate or Class C Master Certificate, the proposed
transferee shall deliver to the Trustee, under penalties of perjury, an
affidavit that such transferee is not a Disqualified Organization, with respect
to which the Trustee shall have no actual knowledge that such affidavit is
false, and the transferor and the proposed transferee shall each deliver for the
Trustee an affidavit with respect to any other information reasonably required
by the Trustee pursuant to the REMIC Provisions, including, without limitation,
information regarding the transfer of noneconomic residual interests and
transfers of any residual interest to or by a foreign person; provided, however,
that, upon the delivery to the Trustee of an Opinion of Counsel, in form and
substance satisfactory to the Trustee and rendered by Independent counsel, to
the effect that the beneficial ownership of the Class C Subsidiary Certificate
or the Class C Master Certificate, as the case may be, by any Disqualified
Organization will not result in the imposition of federal income tax upon the
Subsidiary REMIC or the Master REMIC or any Certificateholder or any other
person or otherwise adversely affect the status of the Subsidiary REMIC or the
Master REMIC as a REMIC, the foregoing prohibition on transfers, sales and other
dispositions, as well as the foregoing requirement to deliver a certificate
prior to any registration thereof, shall, with respect to such Disqualified
Organization, terminate. Notwithstanding any transfer, sale or other disposition
of the Class C Subsidiary Certificate or Class C Master Certificate, or any
interest therein, to a Disqualified Organization or the registration thereof in
the Certificate Register, such transfer, sale or other disposition and any
registration thereof, unless accompanied by the Opinion of Counsel described in
the preceding sentence, shall be deemed to be void and of no legal force or
effect whatsoever and such Disqualified Organization shall be deemed to not be
the Class C Subsidiary or Class C Master Certificateholder, as the case may be,
for any purpose hereunder, including, but not limited to, the receipt of
distributions on the Class C Subsidiary Certificate or Class C Master
Certificate, and shall be deemed to have no interest whatsoever in the Class C
Subsidiary Certificate or Class C Master Certificate. Each Class C Subsidiary or
Class C Master Certificateholder, by his acceptance thereof, shall be deemed for
all purposes to have consented to the provisions of this Section 9.02(b)(3).

                  (4)      Any transfer, sale or other disposition not in
compliance with the provisions of this Section 9.02(b) shall be deemed to be
void and of no legal force or effect whatsoever and such transferee shall be
deemed to not be the Certificateholder for any purpose hereunder, including, but
not limited to, the receipt of distributions on such Certificate, and shall be
deemed to have no interest whatsoever in such Certificate.

                  (5)      The Trustee shall give notice to Standard & Poor's,
Moody's and Fitch promptly following any transfer, sale or other disposition of
a Class B-3I, Class C Subsidiary or Class C Master Certificate.

         c.       At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of authorized denominations of a like aggregate
original denomination, upon surrender of such Certificates to be exchanged at
such office. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute and deliver the Certificates which the

                                       9-3
<PAGE>

Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall be duly endorsed by, or
shall be accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder thereof or
his or her attorney duly authorized in writing.

         d.       Except as provided in paragraph (e) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of the Class A, Class M-1,
Class M-2 and Class B Certificates may not be transferred by the Trustee except
to another Depository; (ii) the Depository shall maintain book-entry records
with respect to the Certificate Owners and with respect to ownership and
transfers of such Class A, Class M-1, Class M-2 and Class B Certificates; (iii)
ownership and transfers of registration of the Class A, Class M-1, Class M-2 and
Class B Certificates on the books of the Depository shall be governed by
applicable rules established by the Depository; (iv) the Depository may collect
its usual and customary fees, charges and expenses from its Depository
Participants; (v) the Trustee shall deal with the Depository, Depository
Participants and indirect participating firms as representatives of the
Certificate Owners of the Class A, Class M and Class B Certificates for purposes
of exercising the rights of Holders under this Agreement, and requests and
directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.

         All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.

         e.       If (x) the Seller or the Depository advises the Trustee in
writing that the Depository is no longer willing or able properly to discharge
its responsibilities as Depository and (y) the Trustee or the Originator is
unable to locate a qualified successor or (z) the Originator at its sole option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee shall notify all Certificate Owners, through
the Depository, of the occurrence of any such event and of the availability of
definitive, fully registered Class A Certificates, Class M Certificates and
Class B Certificates (the "Definitive Certificates") to Certificate Owners
requesting the same. Upon surrender to the Trustee of the Class A Certificates,
Class M-1 Certificates, Class M-2 Certificates and Class B Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. Neither the
Originator nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates all references
herein to obligations imposed upon or to be performed by the Depository shall be
deemed to be imposed upon and performed by the Trustee, to the extent applicable
with respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder.

                                       9-4
<PAGE>

         f.       On or prior to the Closing Date, there shall be delivered to
the Depository one Class A-1 Certificate, one Class A-2 Certificate, one Class
A-3 Certificate, one A-4 Class Certificate, one Class A-5 Certificate, one Class
A-6 Certificate, one Class A-7 Certificate, one Class M-1 Certificate, one Class
M-2 Certificate, one Class B-1 Certificate and one Class B-2 Certificate, each
in registered form registered in the name of the Depository's nominee, Cede &
Co., the total face amount of which represents 100% of the related Original
Principal Balance, respectively. If, however, the aggregate principal amount of
a Class of Class A Certificates, Class M Certificates or Class B Certificates
exceeds $400,000,000, one such Class A Certificate, Class M Certificate and/or
Class B Certificate will be issued with respect to each $400,000,000 of
principal amount and an additional Certificate of such Class or Classes will be
issued with respect to any remaining principal amount. Each such Class A, Class
M and Class B Certificate registered in the name of the Depository's nominee
shall bear the following legend:

         "Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein."

         SECTION 9.03. No Charge; Disposition of Void Certificates.
                       -------------------------------------------

         No service charge shall be made to a Certificateholder for any transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates. All
Certificates surrendered for transfer and exchange shall be disposed of in a
manner approved by the Trustee.

         SECTION 9.04. Mutilated, Destroyed, Lost or Stolen Certificates.
                       -------------------------------------------------

         If (a) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and (b) there is delivered to
the Certificate Registrar and the Trustee such security or indemnity as may be
required by each to save it harmless, then in the absence of notice to the
Certificate Registrar or the Trustee that such Certificate has been acquired by
a bona fide purchaser, the Trustee shall execute and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and original denomination. Upon the issuance of any
new Certificate under this Section 9.04, the Trustee may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses connected therewith. Any
duplicate Certificate issued pursuant to this Section 9.04 shall constitute
complete and indefeasible evidence of ownership of the Percentage Interest, as
if originally issued, whether or not the mutilated, destroyed, lost or stolen
Certificate shall be found at any time.

                                       9-5
<PAGE>

         SECTION 9.05. Persons Deemed Owners.
                       ---------------------

         Prior to due presentation of a Certificate for registration of
transfer, the Servicer, the Seller, the Trustee, the Paying Agent and the
Certificate Registrar may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
remittances pursuant to Section 8.01 and for all other purposes whatsoever, and
none of the Servicer, the Seller, the Trustee, the Certificate Registrar, the
Paying Agent or any agent of the Servicer, the Seller, the Trustee, the Paying
Agent or the Certificate Registrar shall be affected by notice to the contrary.

         SECTION 9.06. Access to List of Certificateholders' Names and
                       -----------------------------------------------
                       Addresses.
                       ---------

         The Certificate Registrar will furnish to the Trustee and the Servicer,
within five days after receipt by the Certificate Registrar of a request
therefor from the Trustee in writing, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Certificateholders as of
the most recent Record Date. If Holders of Certificates evidencing, as to any
Class, Percentage Interests representing 25% or more (hereinafter referred to as
"Applicants") apply in writing to the Trustee, and such application states that
the Applicants desire to communicate with other Certificateholders with respect
to their rights under this Agreement or under the Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such Applicants access during normal business hours to
the most recent list of Certificateholders held by the Trustee. If such list is
as of a date more than 90 days prior to the date of receipt of such Applicants'
request, the Trustee shall promptly request from the Certificate Registrar a
current list as provided above, and shall afford such Applicants access to such
list promptly upon receipt. Every Certificateholder, by receiving and holding a
Certificate, agrees with the Certificate Registrar and the Trustee that none of
the Originator, the Certificate Registrar or the Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders hereunder, regardless of the source from
which such information was derived.

         SECTION 9.07. Authenticating Agents.
                       ---------------------

         The Trustee may appoint one or more Authenticating Agents with power to
act on its behalf and subject to its direction in the execution and delivery of
the Certificates. For all purposes of this Agreement, the execution and delivery
of Certificates by the Authenticating Agent pursuant to this Section shall be
deemed to be the execution and delivery of Certificates "by the Trustee."

                                       9-6
<PAGE>

                                    ARTICLE X

                                   INDEMNITIES
                                   -----------

         SECTION 10.01. Seller's and Originator's Indemnities.
                        -------------------------------------

         The Seller and Originator will jointly and severally defend and
indemnify the Trust, the Trustee (including the Custodian, the Paying Agent and
any other agents of the Trustee) and the Certificateholders against any and all
costs, expenses, losses, damages, claims and liabilities, including reasonable
fees and expenses of counsel and expenses of litigation of any third-party
claims (i) arising out of or resulting from the origination of any Contract
(including but not limited to truth in lending requirements) or the servicing of
such Contract prior to its transfer to the Trust (but only to the extent such
cost, expense, loss, damage, claim or liability is not provided for by the
Originator's repurchase of such Contract pursuant to Section 3.06) or (ii)
arising out of or resulting from the use or ownership of any Manufactured Homes
by the Originator or the Servicer or any Affiliate of either. Notwithstanding
any other provision of this Agreement, the obligation of the Originator under
this Section shall not terminate upon a Service Transfer pursuant to Article
VII, except that the obligation of the Originator under this Section shall not
relate to the actions of any subsequent Servicer after a Service Transfer.

         SECTION 10.02. Liabilities to Obligors.
                        -----------------------

         No obligation or liability to any Obligor under any of the Contracts is
intended to be assumed by the Trust or the Certificateholders under or as a
result of this Agreement and the transactions contemplated hereby and, to the
maximum extent permitted and valid under mandatory provisions of law, the Trust
and the Certificateholders expressly disclaim such assumption.

         SECTION 10.03. Tax Indemnification.
                        -------------------

         The Originator agrees to pay, and to indemnify, defend and hold
harmless the Trust, the Trustee (including the Custodian, the Paying Agent and
any other agents of the Trustee) and the Certificateholders from, any taxes
which may at any time be asserted with respect to, and as of the date of, the
transfer of the Contracts to the Trust, including, without limitation, any
sales, gross receipts, general corporation, personal property, privilege or
license taxes (but not including any federal, state or other taxes arising out
of the creation of the Trust and the issuance of the Certificates), any tax
imposed on the Trust as a result of the Originator's repurchase of any Contract
pursuant to Section 3.06(c), and costs, expenses and reasonable counsel fees in
defending against the same, whether arising by reason of the acts to be
performed by the Originator, the Seller, the Servicer or the Trustee under this
Agreement or imposed against the Trust, a Certificateholder or otherwise.

         SECTION 10.04. Servicer's Indemnities.
                        ----------------------

         The Servicer shall defend and indemnify the Trust, the Trustee
(including the Custodian, the Paying Agent and any other agents of the Trustee)
and the Certificateholders against any and all costs, expenses, losses, damages,
claims and liabilities, including reasonable fees and expenses of counsel and
expenses of litigation, in respect of any action taken or omitted to be

                                      10-1
<PAGE>

taken by the Servicer with respect to any Contract. This indemnity shall survive
any Service Transfer (but the original Servicer's obligations under this Section
10.04 shall not relate to any actions of any subsequent Servicer after a Service
Transfer) and any payment of the amount owing under, or any repurchase by the
Originator of, any such Contract.

         SECTION 10.05. Operation of Indemnities.
                        ------------------------

         Indemnification under this Article shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Originator or the Servicer has made any indemnity payments to the Trustee
pursuant to this Article and the Trustee thereafter collects any of such amounts
from others, the Trust will repay such amounts collected to the Originator or
the Servicer, as the case may be, without interest.

         SECTION 10.06. REMIC Tax Matters.
                        -----------------

         If Class C Subsidiary Certificateholders or Class C Master
Certificateholders, pursuant to Section 6.06, pay any taxes or charges imposed
upon the Subsidiary REMIC or the Master REMIC, as the case may be, as a REMIC or
otherwise, such taxes or charges, except to the extent set forth in the
following proviso, shall be expenses and costs of the Trust and the Class C
Subsidiary Certificateholders or Class C Master Certificateholders shall be
entitled to be reimbursed therefor out of the Certificate Account as provided in
Section 8.03; provided, however, that any such taxes or charges shall not be
expenses or costs of the Trust, nor will the Class C Subsidiary
Certificateholders or Class C Master Certificateholders be entitled to
reimbursement therefor out of the Certificate Account, if and to the extent that
such taxes or charges resulted from a failure by the Originator, the Trustee or
any Servicer to comply with the provisions of Section 2.04.

                                      10-2
<PAGE>

                                   ARTICLE XI

                                   THE TRUSTEE
                                   -----------

         SECTION 11.01. Duties of Trustee.
                        -----------------

         The Trustee, prior to the occurrence of an Event of Termination and
after the curing of all Events of Termination which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. If an Event of Termination has occurred (which has not
been cured), the Trustee shall exercise such of the rights and powers vested in
it by this Agreement, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.

         The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform as to form to the requirements of this Agreement.

         Subject to Section 11.03, no provision of this Agreement shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act or its own misconduct; provided, however, that:

         a.       Prior to the occurrence of an Event of Termination, and after
the curing of all such Events of Termination which may have occurred, the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this Agreement;

         b.       The Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer of the Trustee, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;

         c.       The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the Certificateholders with aggregate Percentage Interests
representing 25% or more of the Trust relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Agreement; and

         d.       The Trustee shall not be charged with knowledge of any event
referred to in Section 7.01 unless a Responsible Officer of the Trustee at the
Corporate Trust Office obtains actual knowledge of such event or the Trustee
receives written notice of such event from the Servicer or the Holders of
Certificates evidencing, as to any Class, Percentage Interests representing 25%
or more.

                                      11-1
<PAGE>

         None of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Originator, the Seller or the Servicer under
this Agreement, except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement. The Trustee shall
not be required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.

         SECTION 11.02. Certain Matters Affecting the Trustee.
                        -------------------------------------

         Except as otherwise provided in Section 11.01:

         a.       The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate, certificate
of a Servicing Officer, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;

         b.       The Trustee may consult with counsel and any opinion of any
counsel for the Originator, the Seller or the Servicer shall be full and
complete authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel;

         c.       The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation hereunder or in relation hereto, at the request, order or
direction of any of the Certificateholders, pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; provided, however, that nothing
contained herein shall relieve the Trustee of the obligations, upon the
occurrence of an Event of Termination (which has not been cured), to exercise
such of the rights and powers vested in it by this Agreement, and to use the
same degree of care and skill in their exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs;

         d.       Prior to the occurrence of an Event of Termination and after
the curing of all Events of Termination which may have occurred, the Trustee
shall not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing, as to any
Class, Percentage Interests representing 25% or more; provided, however, that if
the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability as a condition to
so proceeding. The

                                      11-2
<PAGE>

reasonable expense of every such examination shall be paid by the Servicer or,
if paid by the Trustee, shall be reimbursed by the Servicer upon demand; and

         e.       The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or a custodian and shall not be liable for any acts or omissions of
such agents, attorneys or custodians if appointed by it with due care hereunder.

         SECTION 11.03. Trustee Not Liable for Certificates or Contracts.
                        ------------------------------------------------

         The Trustee assumes no responsibility for the correctness of the
recitals contained herein or in the Certificates (other than the Trustee's
execution thereof). The Trustee makes no representations as to the validity or
sufficiency of this Agreement, of the Certificates (other than its execution
thereof) or of any Contract, Contract File, Land-and-Home Contract File or
related document. The Trustee shall not be accountable for the use or
application by the Servicer, the Originator or the Seller of funds paid to the
Originator or the Seller, as applicable, in consideration of conveyance of the
Contracts to the Trust by the Originator and the Seller or deposited into or
withdrawn from the Certificate Account by the Servicer.

         SECTION 11.04. Rights of Certificateholders to Direct Trustee and to
                        -----------------------------------------------------
Waive Event of Termination.
--------------------------

         Holders of Class A Certificates, Holders of Class M Certificates and
Holders of Class B Certificates evidencing, as to each such Class, Percentage
Interests representing 25% or more shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; provided,
however, that, subject to Section 11.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee being advised by counsel
determines that the action so directed may not lawfully be taken, or if the
Trustee in good faith shall, by a Responsible Officer or Officers of the
Trustee, determine that the proceedings so directed would be illegal or involve
it in personal liability or be unduly prejudicial to the rights of
Certificateholders not parties to such direction; and provided further that
nothing in this Agreement shall impair the right of the Trustee to take any
action deemed proper by the Trustee and which is not inconsistent with such
direction by the Certificateholders; and provided further that the Trustee shall
instead follow the directions of Holders of Class A Certificates, Holders of
Class M Certificates and Holders of Class B Certificates evidencing, as to each
such Class, Percentage Interests aggregating 51% or more whenever it receives
conflicting directions from Class A Certificateholders, Class M
Certificateholders and Class B Certificateholders. Holders of Class A
Certificates, Holders of Class M Certificates and Holders of Class B
Certificates evidencing, as to each such Class, Percentage Interests
representing 51% or more may on behalf of Certificateholders waive any past
Event of Termination hereunder and its consequences, except a default in respect
of a covenant or provision hereof which under Section 12.07 cannot be modified
or amended without the consent of all Certificateholders, and upon any such
waiver, such Event of Termination shall cease to exist and shall be deemed to
have been cured for every purpose of this Agreement; but no such waiver shall
extend to any subsequent or other Event of Termination or impair any right
consequent thereon. Following the Class M-2 Cross-Over Date, if all
distributions payable to the Class A Certificateholders and the Class M
Certificateholders have either been made or provided

                                      11-3
<PAGE>

for in accordance with this Agreement, then the Holders of Class B-1
Certificates may exercise the rights given to the Class A Certificateholders,
the Class M Certificateholders and Class B-1 Certificateholders under this
Section. Following the Class B-1 Cross-Over Date, if all distributions payable
to the Class A Certificateholders and the Class M Certificateholders have either
been made or provided for in accordance with this Agreement, then the Holders of
Class B-2 Certificates may exercise the rights given to the Class A
Certificateholders, the Class M Certificateholders and Class B-1
Certificateholders under this Section.

         SECTION 11.05. The Servicer to Pay Trustee's Fees and Expenses.
                        -----------------------------------------------

         The Servicer agrees:

         a.       to pay to the Trustee reasonable compensation for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
including the services provided in connection with any auctions pursuant to
Section 8.05(e);

         b.       except as otherwise expressly provided herein, to reimburse
the Trustee, to the extent requested by the Trustee, for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and counsel, and
reasonable compensation expenses and disbursements in connection with any
auctions pursuant to Section 8.05(e)), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and

         c.       to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
this trust and its duties hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.

         All such payments by the Servicer shall be made from its own funds. The
covenants in this Section 11.05 shall be for the benefit of the Trustee in its
capacities as Trustee, Paying Agent and Certificate Registrar hereunder, and
shall survive the termination of this Agreement.

         SECTION 11.06. Eligibility Requirements for Trustee.
                        ------------------------------------

         The Trustee hereunder shall at all times be a financial institution
organized and doing business under the laws of the United States of America or
any State, authorized under such laws to exercise corporate trust powers and a
Title I approved lender pursuant to FHA Regulations, shall not be an Affiliate
of the Originator, and shall have a combined capital and surplus of at least
$50,000,000 or shall be a member of a bank holding system the aggregate combined
capital and surplus of which is $50,000,000, provided that the Trustee's
separate capital and surplus shall at all times be at least the amount required
by Section 310(a)(2) of the Trust Indenture Act of 1939, as amended. If such
Person publishes reports of condition at least annually, pursuant to law or to
the requirements of a supervising or examining authority, then for the purposes
of this Section 11.06, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In

                                      11-4
<PAGE>

addition, the Trustee shall at all times have a long-term deposit rating (or, if
the Trustee is a wholly owned subsidiary of a bank holding company system and
not rated, the bank holding company shall have a long-term senior unsecured debt
rating) from Standard & Poor's of at least BBB, or as shall be otherwise
acceptable to Standard & Poor's, and a rating from Moody's (if rated by Moody's)
of at least Baa3, or as shall be otherwise acceptable to Moody's and Fitch. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 11.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 11.07.

         SECTION 11.07. Resignation or Removal of Trustee.
                        ---------------------------------

         The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Servicer and the
Originator. A copy of any such notice shall be sent to Standard & Poor's,
Moody's and Fitch. Upon receiving such notice of resignation, the Originator
shall promptly appoint a successor Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to each of the Servicer and the
Originator and one copy to the successor Trustee. If no successor Trustee shall
have been so appointed and shall have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.

         If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 11.06 and shall fail to resign after written
request therefor by the Originator, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Originator may remove the Trustee. If the Originator shall have removed the
Trustee under the authority of the immediately preceding sentence, the
Originator shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor Trustee.

         Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 11.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 11.08.

         SECTION 11.08. Successor Trustee.
                        -----------------

         Any successor Trustee appointed as provided in Section 11.07 shall
execute, acknowledge and deliver to the Servicer, the Originator and to its
predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee. The predecessor Trustee shall deliver or cause to be delivered
to the successor Trustee the Contracts, Contract Files and Land-and-Home
Contract Files and any related documents and statements held by it hereunder;
and, if the Land-and-Home Contract Files are then held by a custodian

                                      11-5
<PAGE>

pursuant to a custodial agreement, the predecessor Trustee and the custodian
shall amend such custodial agreement to make the successor Trustee the successor
to the predecessor Trustee thereunder; and the Servicer, the Originator and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties and
obligations.

         No successor Trustee shall accept appointment as provided in this
Section 11.08 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 11.06.

         Upon acceptance of appointment by a successor Trustee as provided in
this Section 11.08, the Servicer shall cause notice of the succession of such
Trustee hereunder to be mailed to each Certificateholder at their addresses as
shown in the Certificate Register. If the Servicer fails to mail such notice
within ten days after acceptance of appointment by the successor Trustee, the
successor Trustee shall cause such notice to be mailed at the expense of the
Servicer.

         SECTION 11.09. Merger or Consolidation of Trustee.
                        ----------------------------------

         Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such Person shall be eligible under
the provisions of Section 11.06, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Trustee shall promptly notify Standard & Poor's,
Moody's and Fitch in the event it is a party to any merger, conversion or
consolidation.

         SECTION 11.10. Tax Returns.
                        -----------

         Upon the Servicer's request, the Trustee will furnish the Servicer with
all such information as the Servicer may reasonably require in connection with
preparing all tax returns of the Subsidiary REMIC and the Master REMIC and the
Trustee shall execute such returns.

         SECTION 11.11. Obligor Claims.
                        --------------

         In connection with any offset defenses, or affirmative claims for
recovery, asserted in legal actions brought by Obligors under one or more
Contracts based upon provisions therein complying with, or upon other rights or
remedies arising from, any legal requirements applicable to the Contracts,
including, without limitation, the Federal Trade Commission's Trade Regulation
Rule Concerning Preservation of Consumers' Claims and Defenses (16 C.F.R. ss.
433) as amended from time to time:

         a.       The Trustee is not, and shall not be deemed to be, either in
any individual capacity, as trustee hereunder or otherwise, a creditor, or a
joint venturer with or an Affiliate of, or acting in concert or cooperation
with, any seller of home improvements, in the arrangement, origination or making
of Contracts. The Trustee is the holder of the Contracts only as trustee on
behalf of the Certificateholders, and not as a principal or in any individual or
personal capacity;

                                      11-6
<PAGE>

         b.       The Trustee shall not be personally liable for or obligated to
pay Obligors any affirmative claims asserted thereby, or responsible to
Certificateholders for any offset defense amounts applied against Contract
payments, pursuant to such legal actions;

         c.       The Trustee will pay, solely from available Trust monies,
affirmative claims for recovery by Obligors only pursuant to final judicial
orders or judgments, or judicially approved settlement agreements, resulting
from such legal actions;

         d.       The Trustee will comply with judicial orders and judgments
which require its actions or cooperation in connection with Obligors' legal
actions to recover affirmative claims against Certificateholders.

         e.       The Trustee will cooperate with and assist Certificateholders
in their defense of legal actions by Obligors to recover affirmative claims if
such cooperation and assistance is not contrary to the interests of the Trustee
as a party to such legal actions and if the Trustee is satisfactorily
indemnified for all liability, costs and expenses arising therefrom; and

         f.       The Originator hereby agrees to indemnify, hold harmless and
defend the Trustee, Certificateholders from and against any and all liability,
loss, costs and expenses of the Trustee, Certificateholders resulting from any
affirmative claims for recovery asserted or collected by Obligors under the
Contracts. Notwithstanding any other provision of this Agreement, the obligation
of the Originator under this Section 11.11(f) shall not terminate upon a Service
Transfer pursuant to Article VII.

         SECTION 11.12. Appointment of Co-Trustee or Separate Trustee.
                        ---------------------------------------------

         The Servicer shall have the power from time to time to appoint one or
more persons or corporations to act either as co-trustees jointly with the
Trustee, or as separate trustees, or as custodians, for the purpose of
conforming to any legal requirement, restriction or condition (i) with respect
to the holding of the Contracts, the Contract Files and the Land-and-Home
Contract Files or (ii) with respect to the enforcement of a Contract in any
state in which a Manufactured Home is located or in any state in which any
portion of the Trust is located. The separate trustees, co-trustees, or
custodians so appointed shall be trustees or custodians for the benefit of all
Certificateholders and shall, subject to the provisions of the following
paragraph, have such powers, rights and remedies as shall be specified in the
instrument of appointment; provided, however, that no such appointment shall, or
shall be deemed to, constitute the appointee an agent of the Trustee.

         Every separate trustee, co-trustee and custodian shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:

                  (A)      all powers, duties, obligations and rights conferred
         upon the Trustee in respect of the receipt, custody and payment of
         monies shall be exercised solely by the Trustee;

                  (B)      all other rights, powers, duties and obligations
         conferred or imposed upon the Trustee, to the extent also imposed upon
         such separate trustees, co-trustees or custodians, shall be conferred
         or imposed upon and exercised or performed by the

                                      11-7
<PAGE>

         Trustee and such separate trustee, co-trustee, or custodian jointly,
         except to the extent that under any law of any jurisdiction in which
         any particular act or acts are to be performed, the Trustee shall be
         incompetent or unqualified to perform such act or acts, in which event
         such rights, powers, duties and obligations (including holding of the
         Trust or any portion thereof in any such jurisdiction) shall be
         exercised and performed by such separate trustee, co-trustee, or
         custodian;

                  (C)      no separate trustee, co-trustee or custodian
         hereunder shall be personally liable by reason of any act or omission
         of any other separate trustee, co-trustee or custodian hereunder; and

                  (D)      the Servicer may at any time accept the resignation
         of or remove any separate trustee, co-trustee or custodian, so
         appointed by it.

         If any separate trustee, co-trustee or custodian shall die, become
incapable of acting, resign or be removed, all of its estates, properties,
rights, remedies and trusts shall vest in and be exercised by the Trustee, to
the extent permitted by law, without the appointment of a new or successor
trustee or custodian. The reasonable fees and expenses of any such separate
trustee, co-trustee or custodian shall be treated as additional fees and
expenses of the Trustee subject to Section 11.05 and payable by the Servicer if
and only to the extent the Servicer shall have consented in writing to his or
its appointment, which consent shall not be unreasonably withheld.

         SECTION 11.13. Agents of Trustee.
                        -----------------

         To the extent not prohibited by law and not inconsistent with the terms
of this Agreement (including, without limitation, Section 11.12), the Trustee
may, with the prior consent of the Servicer, appoint one or more agents to carry
out ministerial matters on behalf of the Trustee under this Agreement.

                                      11-8
<PAGE>

                                   ARTICLE XII

                                  MISCELLANEOUS
                                  -------------

         SECTION 12.01. Servicer Not to Assign Duties or Resign; Delegation of
                        ------------------------------------------------------
Servicing Functions.
-------------------

         The Servicer may not sell or assign its rights and duties as Servicer
hereunder, except as expressly provided for herein, provided that the Servicer
may pledge or assign the right to receive all or any portion of the Monthly
Servicing Fee payable to it. The Servicer shall not resign from the obligations
and duties hereby imposed on it except upon determination that the performance
of its duties hereunder is no longer permissible under applicable law or is in
material conflict by reason of applicable law with any other activities carried
on by it. Any such determination permitting the resignation of the Servicer
shall be evidenced by an Opinion of Counsel for the Servicer to such effect
addressed and delivered to the Trustee. No such resignation shall become
effective until the Trustee or a successor servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Sections
7.02 and 7.03.

         Notwithstanding the foregoing:

         a.       Any Person into which the Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any Person succeeding
to the business of the Servicer, shall be the successor of the Servicer
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Servicer shall satisfy the criteria set forth in the definition of an
Eligible Servicer. The Servicer shall promptly notify Standard & Poor's, Moody's
and Fitch of any such merger to which it is a party.

         b.       Any Person acquiring all or substantially all of the
manufactured housing division of Conseco Finance Corp., who assumes all of the
obligations of the Servicer hereunder and who satisfies the criteria set forth
in the definition of "Eligible Servicer," shall become the Servicer hereunder.
The Servicer shall promptly notify Standard & Poor's, Moody's and Fitch of any
such acquisition.

         c.       Conseco Finance Corp., if it is the Servicer, may delegate
some or all of its servicing duties to a wholly owned subsidiary of Conseco
Finance Corp., for so long as said subsidiary remains, directly or indirectly, a
wholly owned subsidiary of Conseco Finance Corp. Notwithstanding any such
delegation Conseco Finance Corp. shall retain all of the rights and obligations
of the Servicer hereunder.

         SECTION 12.02. Maintenance of Office or Agency.
                        -------------------------------

         The Trustee will maintain in St. Paul, Minnesota, an office or agency
where Certificates may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Trustee in respect of the
Certificates and this Agreement may be served. On the date hereof the Trustee's
office for such purposes is located at 180 East Fifth Street, St. Paul,
Minnesota 55101 Attention: Tamara Schultz-Fugh. The Trustee will give prompt
written notice

                                      12-1
<PAGE>

to Certificateholders of any change in the location of the Certificate Register
or any such office or agency.

         SECTION 12.03. Termination.
                        -----------

         a.       This Agreement shall terminate (after distribution of all
amounts due to Certificateholders pursuant to Sections 8.01 and 8.03) on the
earlier of (a) the Remittance Date on which the Pool Scheduled Principal Balance
is reduced to zero and all amounts payable to Certificateholders on such
Remittance Date have been distributed to Certificateholders or (b) the
Remittance Date on which the Class C Subsidiary Certificateholder purchases the
Contracts pursuant to Section 8.05; provided, that in no event shall the trust
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late Ambassador of
the United States to the Court of St. James, living on the date hereof; and
provided further, that the Servicer's and the Originator's representations and
warranties and indemnities by the Originator and the Servicer shall survive
termination.

         b.       Notice of any termination, specifying the Final Remittance
Date (which shall be a date that would otherwise be a Remittance Date) upon
which all Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee (upon direction by the Originator ten days prior to the date such
notice is to be mailed) by letter to Standard & Poor's, Fitch, Moody's and the
Certificateholders mailed no later than the fifth Business Day of the month of
the Final Remittance Date specifying (1) the Final Remittance Date upon which
final payment on the Certificates will be made upon presentation and surrender
of Certificates at the office or agency of the Trustee therein designated; (2)
the amount of any such final payment; and (3) that the Record Date otherwise
applicable to such Remittance Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office or agency of
the Trustee therein specified. Any notice of purchase of Contracts by the
Originator or the Servicer pursuant to Section 8.05 shall constitute the
adoption by the Trustee on behalf of the Certificateholders of a plan of
complete liquidation of the Subsidiary REMIC and the Master REMIC within the
meaning of Section 860F of the Code on the date such notice is given when signed
by the Trustee. Each such notice shall, to the extent required by the REMIC
Provisions or other applicable law, be signed on behalf of the Subsidiary REMIC
and the Master REMIC by the Trustee. The Trustee shall give such notice to the
Certificate Registrar at the time such notice is given to the
Certificateholders. In the event such notice is given in connection with the
sale of the Contracts pursuant to Section 8.05, the Class C Subsidiary
Certificateholder or the Trustee, as applicable, shall deposit in the
Certificate Account on the Final Remittance Date in immediately available funds
an amount equal to the above-described purchase price and upon such deposit
Certificateholders will be entitled to the amount of such purchase price but not
amounts in excess thereof, all as provided herein. Upon certification to the
Trustee by a Servicing Officer, following such final deposit the Trustee shall
promptly release to the purchaser of the Contracts pursuant to Section 8.05 the
Contract Files for the remaining Contracts, and the Trustee shall execute all
assignments, endorsements and other instruments necessary to effectuate such
transfer.

         c.       Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed from the Certificate Account, in the
following order of priority, to Certificateholders

                                      12-2
<PAGE>

on the Final Remittance Date in proportion to their respective Percentage
Interests an amount equal to (i) as to Class A Certificates, the Class A
Principal Balance, together with any Unpaid Class A Interest Shortfall and one
month's interest at the related Remittance Rate on the related Class,
respectively (calculated in the manner specified in Section 1.03), (ii) as to
Class M-1 Certificates, the Class M-1 Principal Balance together with any Unpaid
Class M-1 Interest Shortfall, any Unpaid Class M-1 Liquidation Loss Interest
Shortfall and one month's interest at the Class M-1 Remittance Rate on the Class
M-1 Principal Balance, (iii) as to Class M-2 Certificates, the Class M-2
Principal Balance together with any Unpaid Class M-2 Interest Shortfall, any
Unpaid Class M-2 Liquidation Loss Interest Shortfall and one month's interest at
the Class M-2 Remittance Rate on the Class M-2 Principal Balance, (iv) as to
Class B-1 Certificates, the Class B-1 Principal Balance together with any Unpaid
Class B-1 Interest Shortfall, any Unpaid Class B-1 Liquidation Loss Interest
Shortfall and one month's interest at the Class B-1 Remittance Rate on the Class
B-1 Principal Balance, (v) as to Class B-2 Certificates, the Class B-2 Principal
Balance together with any Unpaid Class B-2 Interest Shortfall and one month's
interest at the Class B-2 Remittance Rate on the Class B-2 Principal Balance,
(vi) as to Class B-3I Certificates, any Unpaid Class B-3I Shortfall, and (vii)
as to Class C Master Certificates, the amount which remains on deposit in the
Certificate Account (other than amounts retained to meet claims) after
application pursuant to clauses (i)-(vi) above. The distribution on the Final
Remittance Date shall be in lieu of the distribution otherwise required to be
made on such Remittance Date in respect of each Class of Certificates.

         d.       In the event that all of the Certificateholders do not
surrender their Certificates for cancellation within three months after the time
specified in the above-mentioned written notice, the Originator shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within three months after the second notice all the Certificates
shall not have been surrendered for cancellation, the Originator shall transfer
to itself all amounts remaining on deposit in the Certificate Account, to hold
in trust for Certificateholders who have not surrendered their Certificates for
cancellation, together with the final record list of Certificateholders, and the
Originator shall take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain in trust hereunder.

         e.       Each Certificateholder hereby irrevocably approves and
appoints the Trustee as its attorney-in-fact for the purposes of adoption of the
plan of complete liquidation.

         SECTION 12.04. Acts of Certificateholders.
                        --------------------------

         a.       Except as otherwise specifically provided herein, whenever
Certificateholder approval, authorization, direction, notice, consent, waiver or
other action is required hereunder, such approval, authorization, direction,
notice, consent, waiver or other action shall be deemed to have been given or
taken on behalf of, and shall be binding upon, all Certificateholders if agreed
to by Holders of Certificates of the specified Class or Classes evidencing, as
to each such Class, Percentage Interests aggregating 51% or more.

         b.       Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Certificateholders may be embodied

                                      12-3
<PAGE>

in and evidenced by one or more instruments of substantially similar tenor
signed by such Certificateholders in person or by agent duly appointed in
writing; and except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where required, to the Servicer. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and (subject to Section 11.01) conclusive in favor of
the Trustee, the Servicer and the Originator if made in the manner provided in
this Section.

         c.       The fact and date of the execution by any Certificateholder of
any such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.

         d.       The ownership of Certificates shall be proved by the
Certificate Register.

         e.       Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder shall bind every holder of
every Certificate issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, or omitted to
be done by the Trustee, the Servicer or the Originator in reliance thereon,
whether or not notation of such action is made upon such Security.

         f.       The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.

         SECTION 12.05. Calculations.
                        ------------

         Except as otherwise provided in this Agreement, all interest rate and
basis point calculations under this Agreement will be made on the basis of a
360-day year and twelve 30-day months and will be carried out to at least three
decimal places.

         SECTION 12.06. Assignment or Delegation by Originator.
                        --------------------------------------

         Except as specifically authorized hereunder, and except for its
obligations as Servicer which are dealt with under Article V and Article VII,
the Originator may not convey and assign or delegate any of its rights or
obligations hereunder absent the prior written consent of Holders of
Certificates of each Class evidencing, as to each such Class, Percentage
Interests aggregating 66 2/3% or more, and any attempt to do so without such
consent shall be void. It is understood that the foregoing does not prohibit the
pledge or assignment by the Originator of any right to payment pursuant to
Article VIII.

         Notwithstanding the foregoing, any person into which the Originator may
be merged or consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Originator shall be a party, or any
Person succeeding to the business of the Originator, shall be the successor of
the Originator hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Originator shall promptly notify Standard &
Poor's, Moody's and Fitch of any such merger to which it is a party.

                                      12-4
<PAGE>

         SECTION 12.07. Amendment.
                        ---------

         a.       This Agreement may be amended from time to time by the
Originator, the Servicer and the Trustee, without the consent of any of the
Certificateholders, to correct manifest error, to cure any ambiguity, to correct
or supplement any provisions herein which may be inconsistent with any other
provisions herein, as the case may be, to make such changes as are necessary to
maintain the status of each of the Subsidiary REMIC and the Master REMIC as a
"real estate mortgage investment conduit" under the REMIC Provisions of the Code
or to otherwise effectuate the benefits of such status to the Subsidiary REMIC,
the Master REMIC and the Certificateholders, including, without limitation, to
implement any provision permitted by law that would enable a REMIC to avoid the
imposition of any tax, to add or amend any provision as required by Standard &
Poor's, Moody's, Fitch or any other nationally recognized statistical rating
organization in order to improve or maintain the rating of any Class of Class A
Certificates, Class M Certificates or Class B Certificates, or to make any other
provisions with respect to matters or questions arising under this Agreement
that shall not be inconsistent with the provisions of this Agreement; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel for
the Originator, adversely affect in any material respect the interests of any
Certificateholder.

         b.       This Agreement may also be amended from time to time by the
Servicer, the Originator and the Trustee, with the consent of Holders of
Certificates of each Class affected thereby evidencing, as to each such Class,
Percentage Interests aggregating 51% or more, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall (a) reduce
in any manner the amount of, or delay the timing of, collections of payments on
the Contracts or distributions which are required to be made on any Certificate,
(b) reduce the aforesaid percentage required to consent to any such amendment,
without the consent of the holders of all Certificates then outstanding, (c)
result in the disqualification of either the Subsidiary REMIC or the Master
REMIC as a REMIC under the Code, (d) adversely affect the status of either the
Subsidiary REMIC or the Master REMIC as a REMIC or the status of the Regular
Certificates as "regular interests" in the Master REMIC or (e) cause any tax
(other than any tax imposed on "net income from foreclosure property" under
Section 860G(c)(1) of the Code that would be imposed without regard to such
amendment) to be imposed on the Trust, including, without limitation, any tax
imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code.
This Agreement may not be amended without the consent of all Class C
Certificateholders, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement which would
modify in any manner the rights of the Class C Certificateholders.

         c.       This Agreement shall not be amended under this Section without
the consent of 100% of Certificateholders if such amendment would result in the
disqualification of either Subsidiary REMIC or the Master REMIC as a REMIC under
the Code.

         d.       Concurrently with the solicitation of any consent pursuant to
this Section 12.07, the Trustee shall furnish written notification to Standard &
Poor's, Moody's and Fitch of such solicitation. Promptly after the execution of
any amendment pursuant to this Section 12.07, the

                                      12-5
<PAGE>

Trustee shall furnish written notification of the substance of such amendment to
Fitch, Moody's and each Certificateholder.

         e.       It shall not be necessary for the consent of
Certificateholders under this Section 12.07 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.

         f.       The Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Trustee's own rights, duties or immunities
under this Agreement or otherwise.

         g.       In connection with any amendment pursuant to this Section, the
Trustee shall be entitled to receive an unqualified Opinion of Counsel to the
Servicer to the effect that such amendment is authorized or permitted by the
Agreement.

         h.       In the absence of the consent described in subsection (c) of
this Section, in connection with any amendment pursuant to this Section, the
Trustee shall have received an unqualified Opinion of Counsel, the expense of
which shall not be an expense of the Trust, stating that any such amendment (i)
will not adversely affect the status of the Subsidiary REMIC or the Master REMIC
as a REMIC or the status of the Regular Certificates as "regular interests" in
the Master REMIC, and (ii) will not cause any tax (other than any tax imposed on
"net income from foreclosure property" under Section 860G(c)(1) of the Code that
would be imposed without regard to such amendment) to be imposed on the Trust,
including, without limitation, any tax imposed on "prohibited transactions"
under Section 860F(a)(1) of the Code or on "contributions after the startup
date" under Section 860G(d)(1) of the Code.

         i.       Upon the execution of any amendment or consent pursuant to
this Section 12.07, this Agreement shall be modified in accordance therewith,
and such amendment or consent shall form a part of this Agreement for all
purposes, and every Certificateholder hereunder shall be bound thereby.

         SECTION 12.08. Notices.
                        -------

         All communications and notices pursuant hereto to the Servicer, the
Originator and the Trustee shall be in writing and delivered or mailed to it at
the appropriate following address:

         If to the Seller:

                  Conseco Finance Securitizations Corp.
                  300 Landmark Towers
                  345 St. Peter Street
                  St. Paul, Minnesota 55102-1639
                  Attention: Chief Financial Officer
                  Telecopier Number: (651) 293-5746

                                      12-6
<PAGE>

         If to the Originator or Servicer:

                  Conseco Finance Corp.
                  1100 Landmark Towers
                  345 St. Peter Street
                  St. Paul, Minnesota 55102-1639
                  Attention: Chief Financial Officer
                  Telecopier Number: (651) 293-5746

         If to the Trustee:

                  U.S. Bank National Association
                  180 East Fifth Street
                  St. Paul, Minnesota 55101
                  Attention: Tamara Schultz-Fugh
                  Telecopier Number: (651) 244-0089

         If to Standard & Poor's:

                  Standard & Poor's Rating Services,
                    a division of The McGraw-Hill Companies, Inc.
                  55 Water Street, 40th Floor
                  New York, New York 10041
                  Attention: Asset Backed Securities
                             Surveillance Group
                  Telecopier Number: (212) 208-1582

         If to Fitch:

                  Fitch IBCA, Inc.
                  One State Street Plaza, 31st Floor
                  New York, New York 10004
                  Telecopier Number: (212) 635-0474

         If to Moody's:

                  Moody's Investors Service, Inc.
                  99 Church Street
                  New York, New York 10004
                  Attention: Structured Financing, Manufactured Housing
                             Surveillance Group
                  Telecopier Number: (212) 553-4948

or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.

                                      12-7
<PAGE>

         All communications and notices pursuant hereto to a Certificateholder
shall be in writing and delivered or mailed at the address shown in the
Certificate Register.

         SECTION 12.09. Merger and Integration.
                        ----------------------

         Except as specifically stated otherwise herein, this Agreement sets
forth the entire understanding of the parties relating to the subject matter
hereof, and all prior understandings, written or oral, are superseded by this
Agreement. This Agreement may not be modified, amended, waived or supplemented
except as provided herein.

         SECTION 12.10. Headings.
                        --------

         The headings herein are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.

         SECTION 12.11. Governing Law.
                        -------------

         This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Minnesota.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized this 5th
day of October, 2000.

                                           CONSECO FINANCE CORP.

                                           By
                                             -----------------------------------
                                             Phyllis A. Knight
                                             Senior Vice President and Treasurer

                                           CONSECO FINANCE SECURITIZATIONS CORP.

                                           By
                                             -----------------------------------
                                             Phyllis A. Knight
                                             Senior Vice President and Treasurer

                                           U.S. BANK NATIONAL ASSOCIATION
                                           not in its individual capacity but
                                            solely as Trustee

                                           By
                                             -----------------------------------
                                             Tamara Schultz-Fugh
                                             Assistant Vice President

                                      12-8
<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                           FORM OF CLASS A CERTIFICATE
                           ---------------------------

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.

Class A-[1][2][3][4][5][6][7]              No.
(Senior)

Cut-off Date:  as defined in the           Remittance Rate:  ____%
Pooling and Servicing Agreement            [Floating Rate equal to the Weighted
dated as of October 1, 2000                Average Contract Rate (subject to a
                                           maximum of ___%)]
First Remittance Date:                     Denomination:  $___________
November 1, 2000
                                           Aggregate Denomination of
                                           All Class A-[1][2][3][4][5][6][7]
Servicer:                                  Certificates:  $___________
Conseco Finance Corp.
                                           Maturity Date: February 1, 2032
                                           (or if such day is not a
                                           Business Day, then the next
                                           succeeding Business Day)

                                           CUSIP:  _____

                          MANUFACTURED HOUSING CONTRACT
                          -----------------------------
                  SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES,
                  ---------------------------------------------
              SERIES 2000-5, CLASS A-[1][2][3][4][5][6][7](SENIOR)
              ----------------------------------------------------

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.

         This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate
Trust 2000-5 (the "Trust"), which includes among its assets a pool of
manufactured housing installment sale contracts and installment loan agreements
(including, without limitation, all related security interests and any and all
rights to

                                      A-1
<PAGE>

receive payments which are due pursuant thereto after the applicable Cut-off
Date. The Trust has been created pursuant to a Pooling and Servicing Agreement
(the "Agreement"), dated as of October 1, 2000, among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller"), and U.S. Bank National Association, as Trustee
of the Trust (the "Trustee"). This Certificate is one of the Certificates
described in the Agreement and is issued pursuant and subject to the Agreement.
By acceptance of this Certificate the holder assents to and becomes bound by the
Agreement. To the extent not defined herein, all capitalized terms have the
meanings assigned to such terms in the Agreement.

         The Agreement contemplates, subject to its terms, payment on the first
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Remittance Date") of each month commencing in November, 2000, so long as
the Agreement has not been terminated, by check (or, if such Certificateholder
holds a Class of Class A Certificates with an aggregate Percentage Interest of
at least 5% and so desires, by wire transfer pursuant to instructions delivered
to the Trustee at least 10 days prior to such Remittance Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Remittance Date, in an amount equal to
the Certificateholder's Percentage Interest of the portion of the Class A
Distribution Amount to be distributed to such Class of Class A Certificates. The
Maturity Date of this Certificate is February 1, 2032 or the next succeeding
Business Day if such February 1 is not a Business Day.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.

         As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. Paul, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.

         [Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of

                                       A-2
<PAGE>

transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]

         The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.

                                       A-3
<PAGE>

         IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust 2000-5 has caused this Certificate to be duly
executed by the manual signature of a duly authorized officer of the Trustee.

Dated:                                     MANUFACTURED HOUSING CONTRACT
                                           SENIOR/SUBORDINATE
                                           PASS-THROUGH CERTIFICATE
                                           TRUST 2000-5

                                           By  U.S. BANK NATIONAL ASSOCIATION

                                           By
                                             -----------------------------------
                                             Authorized Signatory

                                       A-4
<PAGE>

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint ______________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.

Date:                                      By
                                             -----------------------------------
                                             Signature

                                       A-5
<PAGE>

                                                                       EXHIBIT B
                                                                       ---------

                       FORM OF CLASS M-[1][2] CERTIFICATE
                       ----------------------------------

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.

         THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES [AND THE CLASS M-1 CERTIFICATES] AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE MAY NOT BE RESOLD OR TRANSFERRED EXCEPT IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.

Class M-[1][2]                             No.
(Subordinate)

Cut-off Date: as defined in the            Remittance Rate: Floating Rate equal
Pooling and Servicing Agreement            to the Weighted Average Contract Rate
dated as of October 1, 2000                (subject to a maximum of ______%)

                                           Denomination:  $_____________

                                           Aggregate Denomination of All Class
First Remittance Date:                     M-[1][2] Certificates: $_____________
November 1, 2000

                                           Maturity Date:
Servicer:                                  February 1, 2032
Conseco Finance Corp.                      (or if such  day is not a  Business
                                           Day, then the next succeeding
                                           Business Day)

                                           CUSIP:  _____

                          MANUFACTURED HOUSING CONTRACT
                          -----------------------------
                  SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES,
                  ---------------------------------------------
                   SERIES 2000-5, CLASS M-[1][2] (SUBORDINATE)
                   -------------------------------------------

                                      B-1
<PAGE>

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.

         This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate
Trust 2000-5 (the "Trust"), which includes among its assets a pool of
manufactured housing installment sale contracts and installment loan agreements
(including, without limitation, all related security interests and any and all
rights to receive payments which are due pursuant thereto after the applicable
Cut-off Date). The Trust has been created pursuant to a Pooling and Servicing
Agreement (the "Agreement"), dated as of October 1, 2000 among Conseco Finance
Corp., as Originator and Servicer (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller"), and U.S. Bank National
Association, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.

         The Agreement contemplates, subject to its terms, payment on the first
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Remittance Date") of each month commencing in November 2000, so long as
the Agreement has not been terminated, by check (or, if such Certificateholder
holds a Class M-[1][2] Certificate with an aggregate Percentage Interest of at
least 5% and so desires, by wire transfer pursuant to instructions delivered to
the Trustee at least 10 days prior to such Remittance Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Remittance Date, in an amount equal to
the Certificateholder's Percentage Interest of the Class [M-1/M-2] Distribution
Amount for such Remittance Date. The Maturity Date of this Certificate is
February 1, 2032 or the next succeeding Business Day if such February 1 is not a
Business Day.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.

         As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon

                                       B-2
<PAGE>

surrender of this Certificate for registration of transfer at the office or
agency maintained by the Trustee in St. Paul, Minnesota, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder thereof or his or her attorney
duly authorized in writing, and thereupon one or more new Certificates
evidencing the same aggregate Percentage Interest will be issued to the
designated transferee or transferees.

         [Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]

         The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.

                                       B-3
<PAGE>

         IN WITNESS WHEREOF, Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificate Trust 2000-5 has caused this Certificate to be duly
executed by the manual signature of a duly authorized officer of the Trustee.

Dated:                                     MANUFACTURED HOUSING CONTRACT
                                           SENIOR/SUBORDINATE PASS-THROUGH
                                           CERTIFICATE TRUST 2000-5

                                           By  U.S. BANK NATIONAL ASSOCIATION

                                           By
                                             -----------------------------------
                                             Authorized Signatory

                                       B-4
<PAGE>

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _____________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint _____________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.

Dated:                                     By
                                             -----------------------------------
                                             Authorized Signatory

                                       B-5
<PAGE>

                                                                     EXHIBIT C-1
                                                                     -----------

                       FORM OF CLASS B-[1][2] CERTIFICATE
                       ----------------------------------

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.

         THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE Class A
CERTIFICATES, THE CLASS M-1 CERTIFICATES [,] [AND] THE CLASS M-2 CERTIFICATES
[AND THE CLASS B-1 CERTIFICATES] AS DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE MAY NOT BE RESOLD OR TRANSFERRED EXCEPT IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.

Class B-[1][2]                             No.
(Subordinate)

Cut-off Date: as defined in the            Remittance Rate: Floating Rate
Pooling and Servicing Agreement            equal to the Weighted Average
dated as of October 1, 2000                Contract Rate (subject to a
                                           maximum of ____%) Denomination:
                                           $___________
First Remittance Date:
November 1, 2000                           Aggregate Denomination of All
                                           Class B-[1][2] Certificates:
Servicer:                                  $___________
Conseco Finance Corp.
                                           Maturity Date: February 1, 2032
                                           (or if such day is not a
                                           Business Day, then the next
                                           succeeding Business Day)

                                           CUSIP:  _____

                MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
                ------------------------------------------------
     PASS-THROUGH CERTIFICATES, SERIES 2000-5, CLASS B-[1][2] (SUBORDINATE)
     ----------------------------------------------------------------------

                                      C-1
<PAGE>

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.

         This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate
Trust 2000-5 (the "Trust"), which includes among its assets a pool of
manufactured housing installment sale contracts and installment loan agreements
(including, without limitation, all related security interests and any and all
rights to receive payments which are due pursuant thereto after the applicable
Cut-off Date). The Trust has been created pursuant to a Pooling and Servicing
Agreement (the "Agreement"), dated as of October 1, 2000, among Conseco Finance
Corp., as Originator and Servicer (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller"), and U.S. Bank National
Association, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.

         The Agreement contemplates, subject to its terms, payment on the first
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Remittance Date") of each month commencing in November, 2000 so long as
the Agreement has not been terminated, by check (or, if such Certificateholder
holds a Class of Class B Certificates with an aggregate Percentage Interest of
at least 5% and so desires, by wire transfer pursuant to instructions delivered
to the Trustee at least 10 days prior to such Remittance Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Remittance Date, in an amount equal to
the Certificateholder's Percentage Interest of the Class [B-1/B-2] Distribution
Amount for such Remittance Date. The Maturity Date of this Certificate is
February 1, 2032, or the next succeeding Business Day if such February 1 is not
a Business Day.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.

         As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon

                                       C-2
<PAGE>

surrender of this Certificate for registration of transfer at the office or
agency maintained by the Trustee in St. Paul, Minnesota, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder thereof or his or her attorney
duly authorized in writing, and thereupon one or more new Certificates
evidencing the same aggregate Percentage Interest will be issued to the
designated transferee or transferees.

         [Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]

         The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.

                                       C-3
<PAGE>

         IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust 2000-5 has caused this Certificate to be duly
executed by the manual signature of a duly authorized officer of the Trustee.

Dated:                                     MANUFACTURED HOUSING CONTRACT
                                           SENIOR/SUBORDINATE
                                           PASS-THROUGH CERTIFICATE
                                           TRUST 2000-5

                                           By  U.S. BANK NATIONAL ASSOCIATION

                                           By
                                             -----------------------------------
                                             Authorized Officer

                                      C-4
<PAGE>

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint ______________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.

Dated:                                     By
                                             -----------------------------------
                                             Signature

                                      C-5
<PAGE>

                                                                     EXHIBIT C-2
                                                                     -----------

                         FORM OF CLASS B-3I CERTIFICATE
                         ------------------------------

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.

         THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M CERTIFICATES AND THE CLASS B CERTIFICATES AS DESCRIBED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.

Class B-3I                                 No._____
(Subordinate)

Cut-off Date: as defined in the            Percentage Interest: _____%
Pooling and Servicing Agreement
dated as of October 1, 2000

First Remittance Date:                     Maturity Date:
November 1, 2000                           February 1, 2032
                                           (or if such day is not a
                                           Business Day, then the next
                                           succeeding Business Day)

Servicer:
Conseco Finance Corp.

                MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
                ------------------------------------------------
       PASS-THROUGH CERTIFICATES, SERIES 2000-5, CLASS B-3I (SUBORDINATE)
       ------------------------------------------------------------------

                                     C-2-1
<PAGE>

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.

         This certifies that Green Tree Finance Corp.-Two is the registered
owner of the undivided Percentage Interest set forth above in Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificate Trust 2000-5 (the
"Trust"), which includes among its assets a pool of manufactured housing
installment sale contracts and installment loan agreements (including, without
limitation, all related security interests and any and all rights to receive
payments which are due pursuant thereto after the applicable Cut-off Date). The
Trust has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of October 1, 2000, among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller"), and U.S. Bank National Association, as Trustee
of the Trust (the "Trustee"). This Certificate is one of the Certificates
described in the Agreement and is issued pursuant and subject to the Agreement.
By acceptance of this Certificate the holder assents to and becomes bound by the
Agreement. To the extent not defined herein, all capitalized terms have the
meanings assigned to such terms in the Agreement.

         The Agreement contemplates, subject to its terms, payment on the first
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Remittance Date") of each related Due Period commencing in November 2000
so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class B-3I Certificates with an aggregate Percentage
Interest of at least 5% and so desires, by wire transfer pursuant to
instructions delivered to the Trustee at least 10 days prior to such Remittance
Date) to the registered Certificateholder at the address appearing on the
Certificate Register as of the Business Day immediately preceding such
Remittance Date, in an amount equal to the Certificateholder's Percentage
Interest of the Class B-3I Distribution Amount for such Remittance Date. The
Maturity Date of this Certificate is February 1, 2032 or the next succeeding
Business Day if such February 1 is not a Business Day.

         THIS CERTIFICATE IS AN INTEREST ONLY CERTIFICATE. THE HOLDER OF THIS
CERTIFICATE SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL WITH RESPECT
TO THE CONTRACTS.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the

                                      C-2-2
<PAGE>

Agreement and all amendments thereto will be provided to any Certificateholder
free of charge upon a written request to the Trustee.

         As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. Paul, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.

         The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.

                                      C-2-3
<PAGE>

         IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust 2000-5 has caused this Certificate to be duly
executed by the manual signature of a duly authorized officer of the Trustee.

Dated:                                     MANUFACTURED HOUSING CONTRACT
                                           SENIOR/SUBORDINATE PASS-THROUGH
                                           CERTIFICATE TRUST 2000-5

                                           By  U.S. BANK NATIONAL ASSOCIATION

                                           By
                                             -----------------------------------
                                              Authorized Officer

                                      C-2-4
<PAGE>

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint ______________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.

Dated:                                     By
                                             -----------------------------------
                                             Signature

                                      C-2-5
<PAGE>

                                                                       EXHIBIT D
                                                                       ---------

                               FORM OF ASSIGNMENT
                               ------------------

         In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of October 1, 2000 among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller") and U.S. Bank National Association, as Trustee
(the "Trustee"), the Seller does hereby transfer, assign, set over and otherwise
convey to the Trustee (i) all the right, title and interest of the Seller in and
to the Contracts, including, without limitation, all right, title and interest
in and to the Collateral Security and all rights to receive payments on or with
respect to the Contracts (other than principal and interest due on the Contracts
on or before the applicable Cut-off Date), (ii) all rights under every Hazard
Insurance Policy relating to a Manufactured Home securing a Contract for the
benefit of the owner of such Contract, (iii) all rights under all FHA/VA
Regulations pertaining to any Contract that is an FHA/VA Contract, (iv) all
rights of the Seller under the Transfer Agreement, (v) the proceeds from the
Errors and Omissions Protection Policy and all rights under any blanket hazard
insurance policy to the extent they relate to the Manufactured Homes, (vi) all
documents contained in the Contract Files and the Land-and-Home Contract Files,
(vii) amounts on deposit in the Capitalized Interest Account, the Pre-Funding
Account and the Staged-Funding Reserve Account, and (viii) all proceeds and
products in any way derived from any of the foregoing. Capitalized terms used
herein but not defined herein have the meanings assigned to them in the
Agreement.

         This Assignment is made pursuant to and upon the representation and
warranties on the part of the undersigned contained in Article III of the
Agreement and no others.

         IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this ___ day of October, 2000.

                                           CONSECO FINANCES SECURITIZATIONS
                                           CORP.

                                           By
                                             -----------------------------------
                                             [Name]
                                             [Title]

                                      D-1
<PAGE>

                                                                       EXHIBIT E
                                                                       ---------

                         FORM OF CERTIFICATE OF OFFICER
                         ------------------------------

                             [CONSECO FINANCE CORP.]
                     [CONSECO FINANCE SECURITIZATIONS CORP.]

                              OFFICER'S CERTIFICATE

         We, ______________ and ______________, hereby certify that we are the
duly elected _________________ and ______________, respectively, of [Conseco
Finance Corp. ("Conseco Finance")] [Conseco Finance Securitizations Corp.
("Conseco Securitizations")], and that as such we are duly authorized to execute
and deliver this Certificate on behalf of [Conseco Finance] [Conseco
Securitizations] in connection with the Pooling and Servicing Agreement, dated
as of October 1, 2000 (the "Pooling and Servicing Agreement") among Conseco
Finance Corp., Conseco Finance Securitizations Corp. and U.S. Bank National
Association, as Trustee, and the Underwriting Agreement relating to the Class A,
Class M-1, Class M-2 and Class B Certificates, dated September 28, 2000, (the
"Underwriting Agreement"), among Conseco Finance Corp., Conseco Finance
Securitizations Corp. and Lehman Brothers Inc., Credit Suisse First Boston
Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Banc of
America Securities, LLC (the "Underwriters") (all capitalized terms used herein
without definition having the respective meanings specified in the Pooling and
Servicing Agreement and the Underwriting Agreement) and further certify as
follows:

         1.       Attached hereto as Exhibits I and II, respectively, are true
and correct copies of the [Certificate] [Articles] of Incorporation and
[Restated] Bylaws of [Conseco Finance] [Conseco Securitizations], together with
all amendments thereto, both of which are in full force and effect on the date
hereof.

         2.       No proceedings looking toward merger, liquidation, dissolution
or bankruptcy of [Conseco Finance] [Conseco Securitizations] are pending or
contemplated.

         3.       There is no litigation pending, or to our knowledge,
threatened, which, if determined adversely to [Conseco Finance] [Conseco
Securitizations], would affect adversely the sale of the Contracts, the
execution, delivery or enforceability of the Pooling and Servicing Agreement,
the Transfer Agreement and the Underwriting Agreement (the "Transaction
Documents")[, or the ability of Conseco Finance to service and administer the
Contracts in accordance with the terms of the Pooling and Servicing Agreement].

         4.       Each person who, as an officer or representative of [Conseco
Finance] [Conseco Securitizations], signed the Transaction Documents, or any
other document delivered prior hereto or on the date hereof in connection with
the sale and servicing of the Contracts in accordance with the Transaction
Documents, was at the time of such signing and is as of the date hereof duly
elected or appointed, qualified and acting as such officer or representative,
and the signatures of such persons appearing on such documents are their genuine
signatures.

                                      E-1
<PAGE>

         5.       Neither the execution and delivery by [Conseco Finance]
[Conseco Securitizations] of the Transaction Documents, nor its compliance with
the terms and provisions thereof, will conflict with, or result in a breach of,
any of the terms of, or constitute a default under, any judgment, order,
injunction or decree of any domestic court or governmental authority to which
[Conseco Finance] [Conseco Securitizations] is subject or any indenture,
agreement, contract or commitment to which [Conseco Finance] [Conseco
Securitizations] is a party or by which it is bound, which conflict, breach or
default presents a reasonable possibility of having a materially adverse effect
on the business or operations of [Conseco Finance] [Conseco Securitizations]. No
UCC-1 financing statements or statements of assignment listing [Conseco Finance]
[Conseco Securitizations] as debtor and describing any of the Contracts as
collateral other than the UCC-1 financing statement in favor of the Trustee,
have been signed on behalf of [Conseco Finance] [Conseco Securitizations] and
filed by any person after and prior to the date hereof.

         6.       Attached hereto as Exhibit IV is a certified true copy of the
resolutions of the Board of Directors of [Conseco Finance] [Conseco
Securitizations] (the "Resolutions") adopted with respect to the authorization
of [Conseco Finance] [Conseco Securitizations] to take such actions and enter
into such agreements as are necessary to sell and service the Contracts in
accordance with the Transaction Documents; said resolutions have not been
amended, modified, annulled or revoked and are in full force and effect on the
date hereof.

         [7.      The Registration Statement and the Prospectus, at the time the
Registration Statement became effective did comply, and as of the date hereof
comply, in all material respects with the requirements of the Securities Act of
1933, as amended (the "1933 Act") and the Regulations. The Registration
Statement, at the time it became effective did not, and as of the date hereof
does not, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus as of the date thereof did not, and as of
the date hereof does not, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this subsection
shall not apply to statements in, or omissions from, the Registration Statement
or Prospectus made in reliance upon and in conformity with information furnished
to [Conseco Finance] [Conseco Securitizations] in writing by the Underwriters
expressly for use in the Registration Statement or Prospectus. The conditions to
the use by [Conseco Finance] [Conseco Securitizations] of registration statement
on Form S-3 under the 1933 Act, as set forth in the General Instructions to Form
S-3, have been satisfied with respect to the Registration Statement and the
Prospectus. There are no contracts or documents of [Conseco Finance] [Conseco
Securitizations] which are required to be filed as exhibits to the Registration
Statement pursuant to the 1933 Act or the Regulations which have not been so
filed.]

         8.       Each of the representations and warranties contained in
[Sections 3.01 and 3.03 of the Pooling and Servicing Agreement] [Section 3.1
(other than Section 3.1(a)) of the Transfer Agreement] and Section 1 of the
Underwriting Agreement is true and correct on and as of the date hereof. [To the
best of our knowledge, the representations and warranties of Conseco Finance
contained in Section 3.1(a) of the Transfer Agreement are true and correct on
the date hereof.]

                                       E-2
<PAGE>

         9.       [Conseco Finance] [Conseco Securitizations] has complied with
all the agreements by which it is bound in connection with the transactions
contemplated by the Transaction Documents, and has satisfied all the conditions
on its part to be performed or satisfied prior to the Closing Date in connection
with the transactions contemplated by the Transaction Documents.

         10.      The Transaction Documents have been duly executed by [Conseco
Finance] [Conseco Securitizations] pursuant to and in compliance with the
Resolutions.

         11.      No event with respect to [Conseco Finance] [Conseco
Securitizations] has occurred or is continuing which would constitute an Event
of Termination or an event that with notice or lapse of time or both would
become an Event of Termination under the Pooling and Servicing Agreement.

         IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day
of October, 2000.

                                           [CONSECO FINANCE CORP.]

                                           By
                                             -----------------------------------
                                             [Name]
                                             [Title]

                                           [CONSECO FINANCE SECURITIZATIONS
                                           CORP.]

                                           By
                                             -----------------------------------
                                             [Name]
                                             [Title]

                                       E-3
<PAGE>

                                                                       EXHIBIT F
                                                                       ---------

                           FORM OF OPINION OF COUNSEL
                           --------------------------

         The opinion of Briggs and Morgan, Professional Association shall be to
the effect that undefined capitalized terms have the meanings set forth in the
Pooling and Servicing Agreement):

         1.       The Originator is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, with
corporate power to execute, deliver and perform its obligations under the
Pooling and Servicing Agreement, the Transfer Agreement and the Underwriting
Agreement (collectively, the "Transaction Documents") (including the Limited
Guaranty contained in the Pooling and Servicing Agreement). The Seller is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Minnesota, with corporate power to execute, deliver and
perform in its obligations under the Transaction Documents.

         2.       The Transaction Documents (including the Limited Guaranty
contained in the Pooling and Servicing Agreement) have been duly authorized by
all requisite corporate action, duly executed and delivered by the Originator
and the Seller, and constitute the valid and binding obligations of the
Originator and the Seller enforceable in accordance with their terms. The
Certificates have been duly authorized by all requisite corporate action and,
when duly and validly executed by the Trustee in accordance with the Pooling and
Servicing Agreement, will be validly issued and outstanding and entitled to the
benefits of the Pooling and Servicing Agreement.

         3.       No consent, approval, authorization or order of any state or
federal court or governmental agency or body is required to be obtained by the
Originator or the Seller for the consummation of the transactions contemplated
by the Transaction Documents, except such as may be required under blue sky laws
under any jurisdiction in connection with the offering of the Certificates by
the Underwriters pursuant to the Underwriting Agreement.

         4.       The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as now in effect, and the Trust
is not required to be registered as an investment company under the Investment
Company Act of 1940.

         5.       Neither the transfer of the Contracts by the Originator to the
Seller, nor the assignment of the Originator's security interest on the related
Manufactured Homes, nor the issuance or sale of the Certificates, nor the
execution and delivery of the Transaction Documents, nor the consummation of any
other of the transactions contemplated in the Transaction Documents nor the
fulfillment of the terms of the Certificates or the Transaction Documents by the
Originator, will conflict with, or result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the Certificate of
Incorporation or Bylaws of the Originator or of any indenture or other agreement
or instrument known to us to which the Originator is a party or by which it is
bound, or result in a violation of, or contravene the terms of

                                      F-1
<PAGE>

any statute, order or regulation, applicable to the Originator, of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it.

         6.       Neither the transfer of the Contracts by the Seller to the
Trustee acting on behalf of the Trust, nor the assignment of the Seller's
security interest on the related Manufactured Homes, nor the issuance or sale of
the Certificates, nor the execution and delivery of the Transaction Documents,
nor the consummation of any other of the transactions contemplated in the
Transaction Documents, nor the fulfillment of the terms of the Certificates or
the Transaction Documents by the Seller, will conflict with, or result in a
breach, violation or acceleration of, or constitute a default under, any term or
provision of the Articles of Incorporation or Bylaws of the Seller or of any
indenture or other agreement or instrument known to us to which the Seller is a
party or by which it is bound, or result in a violation of, or contravene the
terms of any statute, order or regulation, applicable to the Seller, of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it.

         7.       There are no actions or proceedings pending, nor to the best
of our knowledge, are there any investigations pending or overtly threatened
against the Originator or the Seller before any court, administrative agency or
other tribunal (A) asserting the invalidity of the Transaction Documents, the
Certificates, the hazard or flood insurance policies applicable to any Contracts
or the Errors and Omissions Protection Policy, (B) seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by the Transaction Documents, (C) which is likely materially and
adversely to affect the performance by the Originator or the Seller of its
obligations under, or the validity or enforceability of, the Transaction
Documents or the Certificates, or (D) seeking adversely to affect the federal
income tax attributes of the Certificates described in the Prospectus and the
Prospectus Supplement under the heading "Federal Income Tax Consequences."

         8.       The transfer of the Initial and Additional Contracts to the
Trust in accordance with Section 2.01 of the Pooling and Servicing Agreement
would not be avoidable as a preferential transfer under Section 547 of the
United States Bankruptcy Code (11 U.S.C. ss. 547), as in effect on the date
hereof, in the event that the Originator became a debtor under the United States
Bankruptcy Code.

         9.       Pursuant to the Transfer Agreement the Originator has
transferred to the Seller all of the Originator's right, title and interest in
the Contracts, free and clear of any and all other assignments, encumbrances,
options, rights, claims, liens or security interests (except tax or possessory
liens) that may affect the right of the Seller in and to such Contracts, and has
delivered the Land-and-Home contract Files to the Trustee (as the Seller's
designee) or its custodian. No filing or other action, other than the filing of
a financing statement on Form UCC-1 with the Secretary of State of the State of
Minnesota identifying the Contracts as collateral and naming the Originator as
debtor and the Seller as secured party, and the filing of continuation
statements as required by the Transfer Agreement, is necessary to perfect as
against third parties the assignment of the Contracts by the Originator to the
Seller. We have separately provided you with our opinion concerning whether such
assignment could be recharacterized as a pledge rather than a sale in the event
the Originator became a debtor under the United States Bankruptcy Code. However,
in the event such assignment were recharacterized as a pledge securing a loan
from the Seller to the Originator, it is our opinion that the Seller would be
deemed to have a valid and

                                       F-2
<PAGE>

perfected security interest in the Initial and Additional Contracts and the
proceeds thereof, which security interest would be prior to any other security
interest that may be perfected under the Uniform Commercial Code as in effect in
the State of Minnesota and over any "lien creditor" (as defined in Minn. Stat.
ss.336.9-301(3)) who becomes such after the Closing Date, except that a
subsequent purchaser of any Contract who gives new value and takes possession
thereof in the ordinary course of his business would have priority over the
Seller's security interest in such Contracts, if such purchaser acts without
knowledge that such Contract was subject to a security interest. We have assumed
for the purposes of this opinion that during the term of the Pooling and
Servicing Agreement the Trustee, or its custodian, shall maintain possession of
the Land-and-Home Contract Files for the purpose of perfecting the assignment to
the Seller of the Contracts. We express no opinion with respect to the
enforceability of any individual Contract or the existence of any claims, rights
or other matters in favor of any Obligor.

         10.      Pursuant to the Pooling and Servicing Agreement the Seller has
transferred to the Trustee acting on behalf of the Trust all of the Seller's
right, title and interest in the Contracts, free and clear of any and all other
assignments, encumbrances, options, rights, claims, liens or security interests
(except tax or possessory liens) that may affect the right of the Trustee in and
to such Contracts, and has delivered the Land-and-Home Contract Files to the
Trustee or its custodian. No filing or other action, other than the filing of a
financing statement on Form UCC-1 with the Secretary of State of the State of
Minnesota identifying the Contracts as collateral and naming the Seller as
debtor and the Trustee as secured party, and the filing of continuation
statements as required by the Pooling and Servicing Agreement, is necessary to
perfect as against third parties the assignment of the Contracts by the Seller
to the Trustee. We have separately provided you with our opinion concerning
whether such assignment could be recharacterized as a pledge rather than a sale
in the event the Seller became a debtor under the United States Bankruptcy Code.
However, in the event such assignment were recharacterized as a pledge securing
a loan from the Certificateholders to the Seller, it is our opinion that the
Trustee would be deemed to have a valid and perfected security interest in the
Contracts and the proceeds thereof, which security interest would be prior to
any other security interest that may be perfected under the Uniform Commercial
Code as in effect in the State of Minnesota and over any "lien creditor" (as
defined in Minn. Stat. ss.336.9-301(3)) who becomes such after the Closing Date,
except that a subsequent purchaser of any Contract, who gives new value and
takes possession thereof in the ordinary course of his business would have
priority over the Trustee's security interest in such Contract, if such
purchaser acts without knowledge that such Loan was subject to a security
interest. We have assumed for the purposes of this opinion that during the term
of the Pooling and Servicing Agreement the Trustee, or its custodian, shall
maintain possession of the Land-and-Home Contract Files for the purpose of
perfecting the assignment to the Trustee of the Contracts. We express no opinion
with respect to the enforceability of any individual Contract or the existence
of any claims, rights or other matters in favor of any Obligor.

         11.      In reliance upon certain representations and warranties set
forth in the Pooling and Servicing Agreement and assuming that the Originator
and the Trustee comply with the requirements of the Pooling and Servicing
Agreement, including the filing on behalf of each of the Master REMIC and
Subsidiary REMIC of a proper election to be taxed as a REMIC, as of the date
hereof the Master REMIC and Subsidiary REMIC created pursuant to the Pooling and
Servicing Agreement will each qualify as a REMIC. Further, the Regular
Certificates will evidence ownership of the "regular interests" in the Master
REMIC and the Class C Master Certificates and Class C Subsidiary Certificates
will

                                       F-3
<PAGE>

evidence ownership of the single class of "residual interest" in the Master
REMIC and Subsidiary REMIC respectively. For Minnesota income and franchise tax
purposes, and subject to the foregoing assumptions, and the provisions of
Minnesota law as of the date hereof, the Trust (excluding the Capitalized
Interest Account and the Pre-Funding Account) will not be subject to tax and the
income of the Trust will be taxable to the holders of interests therein, all in
accordance with the provisions of the Code concerning REMICs. Moreover,
ownership of Certificates will not be a factor in determining whether such owner
is subject to Minnesota income and franchise taxes. Therefore, if the owner of
Certificates is not otherwise subject to Minnesota income or franchise taxes in
the State of Minnesota, such owner will not become subject to such Minnesota
taxes solely by virtue of owning Certificates.

         12.      The transfer of the Initial and Additional Contracts and the
proceeds thereof by the Originator to the Seller on the date hereof pursuant to
the Transfer Agreement would not be avoidable as a fraudulent transfer under the
Uniform Fraudulent Transfer Act as in effect in Minnesota on the date hereof
(Minn. Stat. ss.ss. 513.41 through 513.51), nor, should the Originator become a
debtor under the United States Bankruptcy Code, as a fraudulent transfer under
Section 548 of the United States Bankruptcy Code (11 U.S.C. ss. 548) as in
effect on the date hereof.

         13.      The transfer of the Initial and Additional Contracts and the
proceeds thereof by the Seller to the Trustee on the date hereof pursuant to the
Pooling and Servicing Agreement would not be avoidable as a fraudulent transfer
under the Uniform Fraudulent Transfer Act as in effect in Minnesota on the date
hereof (Minn. Stat. ss.ss. 513.41 through 513.51), nor, should the Seller become
a debtor under the United States Bankruptcy Code, as a fraudulent transfer under
Section 548 of the United States Bankruptcy Code (11 U.S.C. ss. 548) as in
effect on the date hereof.

                                       F-4
<PAGE>

                                                                       EXHIBIT G
                                                                       ---------

                        FORM OF TRUSTEE'S ACKNOWLEDGEMENT
                        ---------------------------------

         U.S. Bank National Association, a national banking association, acting
as trustee (the "Trustee") of the trust created pursuant to the Pooling and
Servicing Agreement, dated as of October 1, 2000, among Conseco Finance Corp.
(the "Originator"), Conseco Finance Securitizations Corp. (the "Seller") and the
Trustee (the "Pooling and Servicing Agreement") (all capitalized terms used
herein without definition having the respective meanings specified in the
Pooling and Servicing Agreement), acknowledges, pursuant to Section 2.03 of the
Pooling and Servicing Agreement, that the Trustee has received and holds in
trust thereunder the following (i) all right, title and interest in and to the
manufactured housing contracts identified on the List of Contracts [delivered
pursuant to Section 2.02(a) of the Pooling and Servicing Agreement] [delivered
with the Subsequent Transfer Instrument of even date herewith] (the
"Contracts"), including, without limitation, all right, title and interest in
and to the Collateral Security and all rights to receive payments on or with
respect to the Contracts (other than the principal and interest due on the
Contracts on or before the applicable Cut-off Date), (ii) all rights under every
Hazard Insurance Policy relating to a Manufactured Home securing a Contract for
the benefit of the creditor of such Contract, (iii) all rights under all FHA/VA
Regulations pertaining to any FHA/VA Contract, (iv) the proceeds from the Errors
and Omissions Protection Policy and all rights under any blanket hazard
insurance policy to the extent they relate to the Manufactured Homes, (v) all
rights of the Seller under the Transfer Agreement, (vi) all documents contained
in the Contract Files and the Land-and-Home Contract Files, (vii) amounts on
deposit in the Capitalized Interest Account, the Pre-Funding Account and the
Staged-Funding Reserve Account and (viii) all proceeds and products in any way
derived from any of the foregoing.

         The Trustee further acknowledges that the Trustee, directly or through
a custodian, will hold said rights, interests and proceeds in trust for the use
and benefit of all Certificateholders.

                                      G-1
<PAGE>

         IN WITNESS WHEREOF, U.S. Bank National Association, as Trustee, has
caused this acknowledgment to be executed by its duly authorized officer as of
the ___ day of October, 2000

                                           U.S. BANK NATIONAL ASSOCIATION,
                                           as Trustee

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

                                      G-2
<PAGE>

                                                                       EXHIBIT H
                                                                       ---------

                       FORM OF CUSTODIAN'S ACKNOWLEDGEMENT
                       -----------------------------------

         U.S. Bank Trust National Association, a national banking association
(the "Custodian") acting as Custodian under a Custodial Agreement (the
"Custodial Agreement") dated as of October 1, 2000, between the Custodian and
U.S. Bank National Association, as Trustee (the "Trustee") under the Pooling and
Servicing Agreement dated as of October 1, 2000 among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller"), and the Trustee, pursuant to which the
Custodian holds on behalf of the Trustee certain "Land-and-Home Contract Files,"
as described in the Pooling and Servicing Agreement, hereby acknowledges receipt
of such Land-and-Home Contract Files, except as noted on the exception list
attached hereto. The Custodian further acknowledges that it will, within 90 days
of the date of the Custodial Agreement, conduct a review of the Land-and-Home
Contract Files and confirm to the Trustee and the Originator that each
Land-and-Home Contract File includes (a) an original executed copy of the
Land-and-Home Contract, (b) an original or a copy of the related Mortgage, (c)
an assignment of the Land-and-Home Contract and the related Mortgage from the
originator (if other than the Originator) to the Originator, (d) an endorsement
of the Land-and-Home Contract by the Originator to the Trustee or in blank, (e)
an assignment of the related Mortgage to the Trustee or in blank, and (f) any
extension, modification or waiver agreement(s), except as noted on the document
exception listing to be attached to such confirmation. The Custodian will not
otherwise review the Land-and-Home Contracts and Land-and-Home Contract Files
for compliance with the terms of the Pooling and Servicing Agreement.

         IN WITNESS WHEREOF, U.S. Bank Trust National Association has caused
this acknowledgment to be executed by its duly authorized officer as of the ___
day of October, 2000.

                                           U.S. BANK TRUST NATIONAL ASSOCIATION,
                                           as Custodian

                                           By
                                             -----------------------------------

                                           Its
                                              ----------------------------------

                                      H-1
<PAGE>

                                                                       EXHIBIT I
                                                                       ---------

                    FORM OF CERTIFICATE OF SERVICING OFFICER
                    ----------------------------------------

                              CONSECO FINANCE CORP.

         The undersigned certifies that he is a [title] of Conseco Finance
Corp., a Delaware corporation (the "Company"), and that as such he is duly
authorized to execute and deliver this certificate on behalf of the Company
pursuant to Section 6.02 of the Pooling and Servicing Agreement (the
"Agreement") dated as of October 1, 2000 among the Company, Conseco Finance
Securitizations Corp. and U.S. Bank National Association, as Trustee (all
capitalized terms used herein without definition having the respective meanings
specified in the Agreement), and further certifies that:

         1.       The Monthly Report for the period from ______________ to
________________ attached to this certificate is complete and accurate in
accordance with the requirements of Sections 6.01 and 6.02 of the Agreement; and

         2.       As of the date hereof, no Event of Termination or event that
with notice or lapse of time or both would become an Event of Termination has
occurred.

         IN WITNESS WHEREOF, I have affixed hereunto my signature the ___ day of
_________, ____.

                                           CONSECO FINANCE CORP.

                                           By
                                             -----------------------------------
                                             [Name]
                                             [Title]

                                      I-1
<PAGE>

                                                                       EXHIBIT J
                                                                       ---------

                     FORM OF CLASS C SUBSIDIARY CERTIFICATE
                     --------------------------------------

         THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
UNCERTIFICATED SUBSIDIARY INTERESTS AS DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE MAY NOT BE RESOLD OR TRANSFERRED EXCEPT IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE. THIS CERTIFICATE MAY ONLY BE TRANSFERRED TO A PERMITTED TRANSFEREE
(AS DEFINED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN); ANY SUCH
TRANSFER MUST ALSO SATISFY THE OTHER REQUIREMENTS OF SECTION 9.02 OF SUCH
POOLING AND SERVICING AGREEMENT.

Class C Subsidiary                         No.
(Subordinate)

Cut-off Date: as defined in the            Percentage Interest: 100%
Pooling and Servicing Agreement
dated as of October 1, 2000

First Remittance Date:
November 1, 2000

                                      J-1
<PAGE>

                MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
                ------------------------------------------------
          PASS-THROUGH CERTIFICATES, SERIES 2000-5, CLASS C SUBSIDIARY
          ------------------------------------------------------------
                               (RESIDUAL INTEREST)
                               -------------------

                Cut-off Date Pool Principal Balance: $742,500,000

         This certifies that Green Tree Finance Corp.-Two is the registered
owner of the Residual Interest represented by this Certificate, and entitled to
certain distributions out of Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificate Trust 2000-5 (the "Trust"), which includes among its
assets a pool of manufactured housing installment sale contracts and installment
loan agreements (including, without limitation, all related security interests
and any and all rights to receive payments which are due pursuant thereto after
the applicable Cut-off Date) (the "Contracts"). The Trust has been created
pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated as of
October 1, 2000, among Conseco Finance Corp., as Originator and Servicer (the
"Originator"), Conseco Finance Securitizations Corp., as Seller (the "Seller"),
and U.S. Bank National Association, as Trustee of the Trust (the "Trustee").
This Class C Subsidiary Certificate is one of the Class C Subsidiary
Certificates described in the Agreement and is issued pursuant and subject to
the Agreement. By acceptance of this Class C Subsidiary Certificate the holder
assents to and becomes bound by the Agreement. To the extent not defined herein,
all capitalized terms have the meanings assigned to such terms in the Agreement.

         The Agreement contemplates, subject to its terms, payment on the first
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Remittance Date") of each month commencing in November 2000, so long as
the Agreement has not been terminated, by check (or, if such Class C Subsidiary
Certificateholder holds Class C Subsidiary Certificates with an aggregate
Percentage Interest of at least 20% and so desires, by wire transfer pursuant to
instructions delivered to the Trustee at least ten days prior to such Remittance
Date) to the registered Class C Subsidiary Certificateholder at the address
appearing on the Certificate Register as of the Business Day immediately
preceding such Remittance Date, in an amount equal to the Class C Subsidiary
Distribution Amount.

         The Class C Subsidiary Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds in the Certificate
Account to the extent available for distribution to the Class C Subsidiary
Certificateholder as provided in the Agreement for payment hereunder and that
the Trustee in its individual capacity is not personally liable to the Class C
Subsidiary Certificateholder for any amounts payable under this Certificate or
the Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement. By acceptance of this Certificate, the
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.

         This Class C Subsidiary Certificate does not purport to summarize the
Agreement and reference is made to the Agreement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and immunities of the Trustee. Copies of the
Agreement and all amendments thereto will be provided to any Class C
Certificateholder free of charge upon a written request to the Trustee.

                                      J-2
<PAGE>

         As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class C Subsidiary Certificate is registrable in
the Certificate Register of the Certificate Registrar upon surrender of this
Class C Subsidiary Certificate for registration of transfer at the office or
agency maintained by the Trustee in St. Paul, Minnesota, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder thereof or his or her attorney
duly authorized in writing, and thereupon one or more new Class C Subsidiary
Certificates evidencing the same aggregate amount of Class C Subsidiary
Certificates will be issued to the designated transferee or transferees.

         As provided in the Agreement and subject to certain limitations therein
set forth, this Class C Subsidiary Certificate is exchangeable for new Class C
Subsidiary Certificates of authorized denominations evidencing the same
aggregate Percentage Interest as requested by the holder surrendering the same.

         The Originator, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Originator, the Servicer, the
Trustee, the Paying Agent or the Certificate Registrar may treat the person in
whose name this Class C Subsidiary Certificate is registered as the owner hereof
for all purposes, and neither the Originator, the Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.

         The holder of this Class C Subsidiary Certificate, by acceptance
hereof, agrees that, in accordance with the requirements of Section 860D(b)(1)
of the Code, the federal tax return of the Trust for its first taxable year
shall provide that the Subsidiary REMIC elects to be treated as a "real estate
mortgage investment conduit" (a "REMIC") under the Code for such taxable year
and all subsequent taxable years. The Uncertificated Subsidiary Interests shall
be "regular interests" in the Subsidiary REMIC and the Class C Subsidiary
Certificates shall be the "residual interest" in the Subsidiary REMIC. In
addition, the holder of this Class C Subsidiary Certificate, by acceptance
hereof, (i) agrees to file tax returns consistent with and in accordance with
any elections, decisions or other reports made or filed with regard to federal,
state or local taxes on behalf of the Subsidiary REMIC, and (ii) agrees to
cooperate with the Originator in connection with examinations of the Subsidiary
REMIC's affairs by tax authorities, including administrative and judicial
proceedings, and (iii) makes the additional agreements, designations and
appointments, and undertakes the responsibilities, set forth in Section 6.06 of
the Agreement.

                                       J-3
<PAGE>

         IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust 2000-5 has caused this Certificate to be duly
executed by the manual signature of a duly authorized officer of the Trustee.

Dated:                                     MANUFACTURED HOUSING CONTRACT
                                           SENIOR/SUBORDINATE
                                           PASS-THROUGH CERTIFICATE
                                           TRUST 2000-5

                                           By U.S. BANK NATIONAL ASSOCIATION

                                           By
                                             -----------------------------------
                                             Authorized Officer

                                       J-4
<PAGE>

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the within Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificate, and does hereby irrevocably constitute and appoint Attorney to
transfer the said certificate on the Certificate Register maintained by the
Trustee, with full power of substitution in the premises.

Dated:                                     By
                                             -----------------------------------
                                             Signature

                                       J-5
<PAGE>

                                                                       EXHIBIT K
                                                                       ---------

                       FORM OF CLASS C MASTER CERTIFICATE
                       ----------------------------------

         THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE CLASS
B-2 CERTIFICATES AND THE CLASS B-3I CERTIFICATES AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE MAY NOT BE RESOLD OR TRANSFERRED EXCEPT IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE. THIS CERTIFICATE MAY ONLY BE TRANSFERRED TO A PERMITTED TRANSFEREE
(AS DEFINED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN); ANY SUCH
TRANSFER MUST ALSO SATISFY THE OTHER REQUIREMENTS OF SECTION 9.02 OF SUCH
POOLING AND SERVICING AGREEMENT.

Class C Master                             No.
(Subordinate)

Cut-off Date: as defined in the            Percentage Interest: 100%
Pooling and Servicing Agreement
dated as of October 1, 2000

First Remittance Date:
November 1, 2000

                                      K-1
<PAGE>

                MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
                ------------------------------------------------
            PASS-THROUGH CERTIFICATES, SERIES 2000-5, CLASS C MASTER
            --------------------------------------------------------
                               (RESIDUAL INTEREST)
                               -------------------

                Cut-off Date Pool Principal Balance: $742,500,000

         This certifies that Green Tree Finance Corp.-Two is the registered
owner of the Residual Interest represented by this Certificate, and entitled to
certain distributions out of Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificate Trust 2000-5 (the "Trust"), which includes among its
assets a pool of manufactured housing installment sale contracts and installment
loan agreements (including, without limitation, all related security interests
and any and all rights to receive payments which are due pursuant thereto after
the applicable Cut-off Date) (the "Contracts"). The Trust has been created
pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated as of
October 1, 2000, among Conseco Finance Corp., as Originator and Servicer (the
"Originator"), Conseco Finance Securitizations Corp., as Seller (the "Seller"),
and U.S. Bank National Association, as Trustee of the Trust (the "Trustee").
This Class C Master Certificate is one of the Class C Master Certificates
described in the Agreement and is issued pursuant and subject to the Agreement.
By acceptance of this Class C Master Certificate the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.

         The Agreement contemplates, subject to its terms, payment on the first
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Remittance Date") of each month commencing in November 2000, so long as
the Agreement has not been terminated, by check (or, if such Class C Master
Certificateholder holds Class C Master Certificates with an aggregate Percentage
Interest of at least 20% and so desires, by wire transfer pursuant to
instructions delivered to the Trustee at least ten days prior to such Remittance
Date) to the registered Class C Master Certificateholder at the address
appearing on the Certificate Register as of the Business Day immediately
preceding such Remittance Date, in an amount equal to the Class C Master
Distribution Amount.

         The Class C Master Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds in the Certificate
Account to the extent available for distribution to the Class C Master
Certificateholder as provided in the Agreement for payment hereunder and that
the Trustee in its individual capacity is not personally liable to the Class C
Master Certificateholder for any amounts payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement. By acceptance of this Certificate, the
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.

         This Class C Master Certificate does not purport to summarize the
Agreement and reference is made to the Agreement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and immunities of the Trustee. Copies of the
Agreement and all amendments thereto will be provided to any Class C Master
Certificateholder free of charge upon a written request to the Trustee.

                                      K-2
<PAGE>

         As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class C Master Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this Class C
Master Certificate for registration of transfer at the office or agency
maintained by the Trustee in St. Paul, Minnesota, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder thereof or his or her attorney duly
authorized in writing, and thereupon one or more new Class C Master Certificates
evidencing the same aggregate amount of Class C Master Certificates will be
issued to the designated transferee or transferees.

         As provided in the Agreement and subject to certain limitations therein
set forth, this Class C Master Certificate is exchangeable for new Class C
Master Certificates of authorized denominations evidencing the same aggregate
Percentage Interest as requested by the holder surrendering the same.

         The Originator, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Originator, the Servicer, the
Trustee, the Paying Agent or the Certificate Registrar may treat the person in
whose name this Class C Master Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Servicer, the Trustee, the Paying
Agent, the Certificate Registrar nor any such agent shall be affected by any
notice to the contrary.

         The holder of this Class C Master Certificate, by acceptance hereof,
agrees that, in accordance with the requirements of Section 860D(b)(1) of the
Code, the federal tax return of the Trust for its first taxable year shall
provide that the Master REMIC elects to be treated as a "real estate mortgage
investment conduit" (a "REMIC") under the Code for such taxable year and all
subsequent taxable years. The Regular Certificates shall be "regular interests"
in the Master REMIC and the Class C Master Certificates shall be the "residual
interest" in the Master REMIC. In addition, the holder of this Class C Master
Certificate, by acceptance hereof, (i) agrees to file tax returns consistent
with and in accordance with any elections, decisions or other reports made or
filed with regard to federal, state or local taxes on behalf of the Master
REMIC, and (ii) agrees to cooperate with the Originator in connection with
examinations of the Master REMIC's affairs by tax authorities, including
administrative and judicial proceedings, and (iii) makes the additional
agreements, designations and appointments, and undertakes the responsibilities,
set forth in Section 6.06 of the Agreement.

                                      K-3
<PAGE>

         IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust 2000-5 has caused this Certificate to be duly
executed by the manual signature of a duly authorized officer of the Trustee.

Dated:                                     MANUFACTURED HOUSING CONTRACT
                                           SENIOR/SUBORDINATE PASS-THROUGH
                                           CERTIFICATE TRUST 2000-5

                                           By U.S. BANK NATIONAL ASSOCIATION

                                           By
                                             -----------------------------------
                                             Authorized Officer

                                      K-4
<PAGE>

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate, and does hereby irrevocably
constitute and appoint ________________ Attorney to transfer the said
certificate on the Certificate Register maintained by the Trustee, with full
power of substitution in the premises.

Date:                                      By
                                             -----------------------------------
                                             Signature

                                      K-5
<PAGE>

                                                                     EXHIBIT L-1
                                                                     -----------

               FORM OF CERTIFICATE REGARDING REPURCHASED CONTRACTS
               ---------------------------------------------------

                              CONSECO FINANCE CORP.

                   CERTIFICATE REGARDING REPURCHASED CONTRACTS

         The undersigned certifies that he is a [title] of Conseco Finance
Corp., a Delaware corporation (the "Company"), and that as such he is duly
authorized to execute and deliver this certificate on behalf of the Company
pursuant to Section 3.06 of the Pooling and Servicing Agreement (the
"Agreement"), dated as of October 1, 2000 among the Company, Conseco Finance
Securitizations Corp. and U.S. Bank National Association, as Trustee (all
capitalized terms used herein without definition having the respective meanings
specified in the Agreement), and further certifies that:

         1.       The Contracts on the attached schedule are to be repurchased
by the Company on the date hereof pursuant to Section 3.06 of the Agreement.

         2.       Upon deposit of the Repurchase Price for such Contracts, such
Contracts may, pursuant to Section 3.06 of the Agreement, be assigned by the
Trustee to the Company.

         IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day
of _______, ____.

                                           CONSECO FINANCE CORP.

                                           By
                                             -----------------------------------
                                             [Name]
                                             [Title]

                                     L-1-1
<PAGE>

                                                                     EXHIBIT L-2
                                                                     -----------

               FORM OF CERTIFICATE REGARDING SUBSTITUTED CONTRACTS
               ---------------------------------------------------

                              CONSECO FINANCE CORP.

                   CERTIFICATE REGARDING SUBSTITUTED CONTRACTS

         The undersigned certify that they are [title] and [title], respectively
of Conseco Finance Corp., a corporation organized under the laws of Delaware
("the Company"), and that as such they are duly authorized to execute and
deliver this certificate on behalf of the Company pursuant to Section 3.06(b) of
the Pooling and Servicing Agreement (the "Agreement"), dated as of October 1,
2000 among the Company, Conseco Finance Securitizations Corp. and U.S. Bank
National Association, as Trustee (all capitalized terms used herein without
definition having the respective meanings specified in the Agreement), and
further certify that:

         1.       The Contract and Contract File [or Land-and-Home Contract
File, as applicable] for each such Eligible Substitute Contract [are being held
by the Company, as Servicer] have been delivered to [the Trustee or its
Custodian] [_________, the successor Servicer].

         2.       The Contracts on the attached schedule are to be substituted
on the date hereof pursuant to Section 3.06(b) of the Agreement and each such
Contract is an Eligible Substitute Contract [description how the Contracts
satisfy the definition of "Eligible Substitute Contract"].

         3.       The UCC-1 financing statements in respect of the Contracts to
be substituted, in the form required by Section 3.06 (b)(iii) of the Agreement,
have been filed with the appropriate offices.

         4.       (x)      the Company shall have delivered to the Trustee, or
its Custodian, the related Land-and-Home Contract Files; and

                  (y)      the Company has delivered to the Trustee an opinion
of counsel satisfactory to the Trustee to the effect that the Trustee holds a
perfected first priority lien in the real estate securing such Eligible
Substitute Contracts, or evidence of recordation of the assignment to the
Trustee on behalf of the Trust of each Mortgage securing such Eligible
Contracts.

         5.       There has been deposited in the Certificate Account the
amounts listed on the schedule attached hereto as the amount by which the
Scheduled Principal Balance of each Replaced Contract exceeds the Scheduled
Principal Balance of each Contract being substituted therefor.

                                     L-2-1
<PAGE>

         IN WITNESS WHEREOF, we have affixed hereunto our signatures this ___
day of _______ ____.

                                           CONSECO FINANCE CORP.

                                           By
                                             -----------------------------------
                                             [Name]
                                             [Title]

                                     L-2-2
<PAGE>

                                                                       EXHIBIT M
                                                                       ---------

                          FORM OF REPRESENTATION LETTER
                          -----------------------------

U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota  55101

Conseco Finance Securitizations Corp.
300 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota  55102-1639

         RE:      Manufactured Housing Contract Senior/Subordinate Pass-Through
                  Certificates, Series 2000-5, Class [B-3I/C Subsidiary/C
                  Master]

         [The undersigned purchaser (the "Purchaser") understands that the
purchase of the above-referenced certificates (the "Certificates") may be made
only by institutions which are "Accredited Investors" under Regulation D, as
promulgated under the Securities Act of 1933, as amended (the "1933 Act"), which
includes banks, savings and loan associations, registered brokers and dealers,
insurance companies, investment companies, and organizations described in
Section 501(c)(3) of the Internal Revenue Code, corporations, business trusts
and partnerships, not formed for the specific purpose of acquiring the
Certificates offered, with total assets in excess of $5,000,000. The undersigned
represents on behalf of the Purchaser that the Purchaser is an "Accredited
Investor" within the meaning of such definition. The Purchaser is urged to
review carefully the responses, representations and warranties it is making
herein.]

Representations and Warranties
------------------------------

         The Purchaser makes the following representations and warranties in
order to permit the Trustee, Conseco Finance Securitizations Corp., and
[underwriter of the Class B-3I/Class C Subsidiary/Class C Master Certificates]
to determine its suitability as a purchaser of Certificates and to determine
that the exemption from registration relied upon by Conseco Finance
Securitizations Corp. under Section 4(2) of the 1933 Act is available to it.

         1.       The Purchaser understands that the Certificates have not been
and will not be registered under the 1933 Act and may be resold (which resale is
not currently contemplated) only if registered pursuant to the provisions of the
1933 Act or if an exemption from registration is available, that Conseco Finance
Securitizations Corp. is not required to register the Certificates and that any
transfer must comply with Section 9.02 of the Pooling and Servicing Agreement
relating to the Certificates.

         2.       The Purchaser will comply with all applicable federal and
state securities laws in connection with any subsequent resale of the
Certificates.

         3.       [The Purchaser is a sophisticated institutional investor and
has knowledge and experience in financial and business matters and is capable of
evaluating the merits and risks of

                                      M-1
<PAGE>

its investment in the Certificates and is able to bear the economic risk of such
investment. The Purchaser has reviewed the Prospectus dated September 28, 2000
and related Prospectus Supplement dated September 28, 2000, with respect to the
Certificates, and has been given such information concerning the Certificates,
the underlying installment sale contracts and Conseco Finance Securitizations
Corp. as it has requested.]

         4.       The Purchaser is acquiring the Certificates as principal for
its own account (or for the account of one or more other institutional investors
for which it is acting as duly authorized fiduciary or agent) for the purpose of
investment and not with a view to or for sale in connection with any
distribution thereof, subject nevertheless to any requirement of law that the
disposition of the Purchaser's property shall at all times be and remain within
its control.

         5.       The Purchaser does not qualify as (i) an employee benefit plan
(a "Plan") as defined in section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), whether or not it is subject to the
provisions of Title I of ERISA, (ii) a plan described in section 4975(e)(1) of
the Internal Revenue Code of 1986 (also a "Plan"), or (iii) an entity whose
underlying assets are deemed to be assets of a Plan by reason of such Plan's
investment in the entity (as determined under Department of Labor Regulations,
29 C.F.R. ss.2510.3-101 (1990)).

         6.       The Purchaser understands that such Certificate will bear a
legend substantially as set forth in the form of Certificate included in the
Pooling and Servicing Agreement.

         7.       The Purchaser, as holder of the Class B-3I/C Subsidiary/C
Master Certificate, acknowledges (i) it may incur tax liabilities in excess of
any cash flows generated by the interest and (ii) it intends to pay the taxes
associated with holding the Class B-3I/C Subsidiary/C Master Certificate as they
become due.

         8.       The Purchaser agrees that it will obtain from any purchaser of
the Certificates from it the same representations, warranties and agreements
contained in the foregoing paragraphs 1 through 7 and in this paragraph 8.

         The representations and warranties contained herein shall be binding
upon the heirs, executors, administrators and other successors of the
undersigned. If there is more than one signatory hereto, the obligations,
representations, warranties and agreements of the undersigned are made jointly
and severally.

                                      M-2
<PAGE>

         Executed at ______________________, ________________, this _____ day of
_________________.

                                           Purchaser's Name (Print)

                                           By
                                             -----------------------------------
                                             Signature

                                           Its

                                           Address of Purchaser
                                                               -----------------

                                           -------------------------------------

                                           Purchaser's Taxpayer Identification
                                           Number

                                           -------------------------------------

                                           -------------------------------------

                                      M-3
<PAGE>

                                                                       EXHIBIT N
                                                                       ---------

                             FORM OF MONTHLY REPORT
                             ----------------------

                MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
                    PASS-THROUGH CERTIFICATES, SERIES 2000-5

<TABLE>
<CAPTION>
<S>                                                                             <C>
                                                                                Distribution Date: ______

Class A-1 Certificates
----------------------

1        (a)      Amount Available (including Monthly
                  Servicing Fee)                                                                   ______

         (b)      Class M-1 Interest Deficiency Amount (if any), Class M-2
                  Interest Deficiency Amount (if any) and Class B-1 Interest
                  Deficiency Amount (if any) withdrawn for prior
                  Remittance Date                                                                  ______

         (c)      Amount Available after giving effect to
                  withdrawal of Class M-1 Interest
                  Deficiency Amount, Class M-2 Interest
                  Deficiency Amount and Class B-1
                  Interest Deficiency Amount for prior
                  Remittance Date                                                                  ______

         (d)      Amount withdrawn from [Capitalized Interest]
                  [Pre-Funding] [Staged-Funding Contract Reserve] Account                          ______

Interest
--------

Class A Certificates
--------------------

2.       Aggregate Class A-1 interest

         (a)      Interest accrued at Class A-1 Remittance Rate (6.98%)                            ______
         (b)      Class A-1 Interest paid                                                          ______
         (c)      Interest accrued at Class A-2 Remittance Rate (7.06%)                            ______
         (d)      Class A-2 Interest paid                                                          ______
         (e)      Interest accrued at Class A-3 Remittance Rate (7.21%)                            ______
         (f)      Class A-3 Interest paid                                                          ______
         (g)      Interest accrued at Class A-4 Remittance Rate (7.47%)                            ______
         (h)      Class A-4 Interest paid                                                          ______
         (i)      Interest accrued at Class A-5 Remittance Rate (7.70%)                            ______
         (j)      Class A-5 Interest paid                                                          ______
         (k)      Interest accrued at Class A-6 Remittance Rate (7.96%)                            ______
         (l)      Class A-6 Interest paid                                                          ______
</TABLE>

                                      N-1
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                             <C>
         (m)      Interest accrued at Class A-7 Remittance Rate (8.20% unless the                  ______
                  Weighted Average Contract Rate is less than 8.20%)
         (n)      Class A-7 Interest paid                                                          ______
         (o)      Class A Interest Shortfall                                                       ______

3.       Amount applied to Unpaid Class A Interest Shortfall                                       ______

         (a)      Class A-1                                                                        ______
         (b)      Class A-2                                                                        ______
         (c)      Class A-3                                                                        ______
         (d)      Class A-4                                                                        ______
         (e)      Class A-5                                                                        ______
         (f)      Class A-6                                                                        ______
         (g)      Class A-7                                                                        ______

4.       Remaining Unpaid Class A Interest Shortfall                                               ______

Class M-1 Certificates
----------------------

5.       Class M-1 Interest on Class M-1 Adjusted
         Principal Balance                                                                         ______

         (a)      Class M-1 Adjusted Principal Balance                                             ______
         (b)      Interest accrued at Class M-1 Remittance Rate (8.40%,
                  unless the Weighted Average Contract Rate
                  is less than 8.40%)                                                              ______
         (c)      Interest paid on Class M-1 Adjusted
                  Principal Balance                                                                ______
         (d)      Class M-1 Interest Shortfall                                                     ______

6.       Amount applied to Unpaid Class M-1
         Interest Shortfall                                                                        ______

7.       Remaining Unpaid Class M-1
         Interest Shortfall                                                                        ______

Class M-2 Certificates
----------------------

8.       Class M-2 Interest on Class M-2 Adjusted
         Principal Balance                                                                         ______

         (a)      Class M-2 Adjusted Principal Balance                                             ______

         (b)      Interest accrued at Class M-2 Remittance Rate (9.03%,
                  unless the Weighted Average Contract Rate
                  is less than 9.03%)                                                              ______
</TABLE>

                                      N-2
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                             <C>
         (c)      Interest paid on Class M-2 Adjusted
                  Principal Balance                                                                ______

         (d)      Class M-2 Interest Shortfall                                                     ______

9.       Amount applied to Unpaid Class M-2
         Interest Shortfall                                                                        ______

10.      Remaining Unpaid Class M-2
         Interest Shortfall                                                                        ______

Class B-1 Certificates
----------------------

11.      Class B-1 interest on Class B-1 Adjusted
         Principal Balance

         (a)      Class B-1 Adjusted Principal Balance                                             ______

         (b)      Interest accrued at Class B-1 Remittance Rate
                  (10.21%, unless the Weighted Average Contract
                  Rate is less than 10.21%)                                                        ______

         (c)      Interest paid on Class B-1 Adjusted
                  Principal Balance                                                                ______

         (d)      Class B-1 Interest Shortfall                                                     ______

12.      Amount applied to Unpaid
         Class B-1 Interest Shortfall                                                              ______

13.      Remaining Unpaid Class B-1
         Interest Shortfall                                                                        ______

Principal
---------

14.      Formula Principal Distribution Amount:                                                    ______

         (a)      Scheduled principal                                                              ______
         (b)      Principal Prepayments                                                            ______
         (c)      Liquidated Contracts                                                             ______
         (d)      Repurchases                                                                      ______
         (e)      Plus principal received during the
                  first 10 days of the next Due Period                                             ______
         (f)      Minus principal received during the
                  first 10 days of the prior Due Period                                            ______
         [(g)     Pre-Funded Amount/Unfunded Contract Shortfall]                                   ______
</TABLE>

                                      N-3
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                             <C>
15.      Pool Scheduled Principal Balance                                                          ______

16.      Overcollateralization Amount (before principal distributions)                             ______

17.      Additional Principal Distribution Amount                                                  ______

Class A Certificates
--------------------

18.      Unpaid Class A Principal Shortfall
         (if any) following prior Remittance Date

         (a)      Class A-1                                                                        ______
         (b)      Class A-2                                                                        ______
         (c)      Class A-3                                                                        ______
         (d)      Class A-4                                                                        ______
         (e)      Class A-5                                                                        ______
         (f)      Class A-6                                                                        ______
         (g)      Class A-7                                                                        ______

19.      Class A Percentage for such
         Remittance Date                                                                           ______

20.      Class A Percentage for the following
         Remittance Date                                                                           ______

21.      Class A principal distribution (including Class A Percentage of
         Formula Principal Distribution Amount, Unpaid Class A Principal
         Shortfall and any Additional Principal Distribution Amount paid)                          ______

         (a)      Class A-1                                                                        ______
         (b)      Class A-2                                                                        ______
         (c)      Class A-3                                                                        ______
         (d)      Class A-4                                                                        ______
         (e)      Class A-5                                                                        ______
         (f)      Class A-6                                                                        ______
         (g)      Class A-7                                                                        ______

22.      (a)      Class A-1 Principal Balance                                                      ______
         (b)      Class A-2 Principal Balance                                                      ______
         (c)      Class A-3 Principal Balance                                                      ______
         (d)      Class A-4 Principal Balance                                                      ______
         (e)      Class A-5 Principal Balance                                                      ______
         (f)      Class A-6 Principal Balance                                                      ______
         (g)      Class A-7 Principal Balance                                                      ______
</TABLE>

                                      N-4
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                             <C>
23.      Unpaid Class A Principal Shortfall
         (if any) following current
         Remittance Date

         (a)      Class A-1                                                                        ______
         (b)      Class A-2                                                                        ______
         (c)      Class A-3                                                                        ______
         (d)      Class A-4                                                                        ______
         (e)      Class A-5                                                                        ______
         (f)      Class A-6                                                                        ______
         (g)      Class A-7                                                                        ______

Class M-1 Distribution Test, Class M-2 Distribution Test
--------------------------------------------------------
and Class B-1 Distribution Test
-------------------------------
(calculations applicable on and after the Remittance Date occurring in November 2004)

24.      Average Sixty-Day Delinquency Ratio Test

         (a)      Sixty-Day Delinquency Ratio for current Remittance Date                          ______

         (b)      Average Sixty-Day Delinquency Ratio
                  (arithmetic average of ratios for this
                  month and two preceding months;
                  may not exceed 5.0%)                                                             ______

25.      Cumulative Realized Losses Test

         Cumulative Realized Losses for current Remittance Date (as a percentage
         of Cut-off Date Pool Principal Balance; may not exceed 5.5% from
         November 1, 2004 to October 31, 2005; 7.0% from November 1, 2005 to
         October, 2006; 9.0% from November 1, 2006 to
         October 31, 2007; and 10.5% thereafter)                                                   ______

26.      Current Realized Losses Test

         (a)      Current Realized Losses
                  for current Remittance Date                                                      ______

         (b)      Current Realized Loss Ratio (total Realized Losses for most
                  recent three months, multiplied by 4, divided by arithmetic
                  average of Pool Scheduled Principal Balances
</TABLE>

                                      N-5
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                             <C>
                  for third preceding Remittance Date and for current Remittance
                  Date; may not exceed 2.75%)                                                      ______

27.      Class M-1 Principal Balance Test

         Sum of Class M-1 Principal Balance, Class M-2 Principal Balance, Class
         B Principal Balance and the Overcollateralization Amount before
         distributions on current Remittance Date) divided by Pool Scheduled
         Principal Balance as of preceding Remittance
         Date is equal to or greater than 26.25%.                                                  ______

28.      Class M-2 Principal Balance Test

         Sum of Class M-2 Principal Balance, Class B Principal Balance and the
         Overcollateralization Amount (before distributions on current
         Remittance Date) divided by Pool Scheduled Principal Balance as of
         preceding Remittance Date is equal to or
         greater than 18.75%.                                                                      ______

29.      Class B Principal Balance Test

         (a)      The Class B Principal Balance
                  (before any distributions on current
                  Remittance Date) as of such Remittance
                  Date is greater than $15,000,000                                                 ______

         (b)      Sum of Class B Principal Balance and the Overcollateralization
                  Amount (before distributions on current Remittance Date)
                  divided by Pool Scheduled Principal Balance as of preceding
                  Remittance Date is equal to or greater
                  than 12.75%.                                                                     ______

Class M-1 Certificates
----------------------

30.      Class M-1 Percentage for such
         Remittance Date                                                                           ______

31.      Class M-1 Percentage for the following
         Remittance Date                                                                           ______
</TABLE>

                                      N-6
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                             <C>
32.      Class M-1 principal distribution:

         (a)      Current (Class M-1 Percentage of Formula Principal
                  Distribution Amount)                                                             ______

         (b)      Unpaid Class M-1 Principal Shortfall                                             ______

         (c)      Additional Principal Distribution Amount                                         ______

33.      Unpaid Class M-1 Principal Shortfall
         (if any) following current
         Remittance Date                                                                           ______

34.      Class M-1 Liquidation Loss Interest

         (a)      Class M-1 Liquidation Loss Amount                                                ______

         (b)      Amount applied to Class M-1
                  Liquidation Loss Interest Amount                                                 ______

         (c)      Remaining Class M-1 Liquidation Loss
                  Interest Amount                                                                  ______

         (d)      Amount applied to Unpaid Class M-1
                  Loss Interest Shortfall                                                          ______

         (e)      Remaining Unpaid Class M-1
                  Liquidation Loss Interest Shortfalls                                             ______

Class M-2 Certificates
----------------------

35.      Class M-2 Percentage for such
         Remittance Date                                                                           ______

36.      Class M-2 Percentage for the following
         Remittance Date                                                                           ______

37.      Class M-2 principal distribution

         (a)      Current (Class M-2 Percentage of Formula Principal
                  Distribution Amount)                                                             ______

         (b)      Unpaid Class M-2 Principal Shortfall                                             ______

         (c)      Additional Principal Distribution Amount                                         ______
</TABLE>

                                      N-7
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                             <C>
38.      Unpaid Class M-2 Principal Shortfall
         (if any) following current
         Remittance Date                                                                           ______

39.      Class M-2 Liquidation Loss Interest

         (a)      Class M-2 Liquidation Loss Amount                                                ______

         (b)      Amount applied to Class M-2
                  Liquidation Loss Interest Amount                                                 ______

         (c)      Remaining Class M-2 Liquidation Loss
                  Interest Amount                                                                  ______
         (d)      Amount applied to Unpaid Class M-2
                  Loss Interest Shortfall                                                          ______

         (e)      Remaining Unpaid Class M-2
                  Liquidation Loss Interest Shortfalls                                             ______

Class B Certificates
--------------------

40.      (a)      Class B Percentage for such
                  Remittance Date                                                                  ______

         (b)      Class B Percentage for the following
                  Remittance Date                                                                  ______

41.      Class B-1 principal distribution

         (a)      Current (Class B Percentage of
                  Formula Principal Distribution Amount)                                           ______

         (b)      Unpaid Class B-1 Principal Shortfall                                             ______

         (c)      Additional Principal Distribution Amount                                         ______

42.      Unpaid Class B-1 Principal Shortfall                                                      ______

43.      Class B-1 Principal Balance                                                               ______

44.      Class B-1 Liquidation Loss Interest

         (a)      Class B-1 Liquidation Loss Amount                                                ______
</TABLE>

                                      N-8
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                             <C>
         (b)      Amount applied to Class B-1
                  Liquidation Loss Interest Amount                                                 ______

         (c)      Remaining Class B-1 Liquidation Loss
                  Interest Amount                                                                  ______

         (d)      Amount applied to Unpaid Class B-1
                  Liquidation Loss Interest Shortfall                                              ______

         (e)      Remaining Unpaid Class B-1 Liquidation
                  Loss Interest Shortfall                                                          ______

Class B-2 Certificates
----------------------

45.      Remaining Amount Available                                                                ______

Interest
--------

46.      Interest accrued at Class B-2 Remittance Rate (9.80%,
         unless the Weighted Average Contract Rate
         is less than 9.80%)                                                                       ______

47.      Class B-2 Interest paid                                                                   ______

48.      Current interest                                                                          ______

49.      Amount applied to Unpaid Class
         B-2 Interest Shortfall                                                                    ______

50.      Remaining Unpaid Class B-2
         Interest Shortfall                                                                        ______

Principal
---------

51.      Unpaid Class B-2 Principal Shortfall
         (if any) following prior Remittance Date                                                  ______

52.      Class B-2 Liquidation Loss
         Amount                                                                                    ______

53.      Current principal (zero until Class B-1
         paid down; thereafter, Class B Percentage
         of Formula Principal Distribution Amount)                                                 ______

54.      Additional Principal Distribution Amount                                                  ______
</TABLE>

                                      N-9
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                             <C>
55.      Class B-2 Principal Balance                                                               ______

Class B-3I Certificates
-----------------------

56.      Excess Interest                                                                           ______

57.      Class B-3I Formula Distribution Amount
         (Excess Interest plus Unpaid Class B-3I Shortfall)                                        ______

58.      Class B-3I Distribution Amount (lesser of remaining
         Amount Available and line 57)                                                             ______

59.      Class B-3I Shortfall (line 57 minus line 58)                                              ______

60.      Unpaid Class B-3I Shortfall                                                               ______

Class A, Class M and Class B Certificates
-----------------------------------------

61.      Aggregate Scheduled Principal Balance of delinquent Contracts
         as of Determination Date

         (a)      30 - 59 days                                                                     ______

         (b)      60 days or more                                                                  ______

62.      Manufactured Homes repossessed                                                            ______

63.      Manufactured Homes repossessed
         but remaining in inventory                                                                ______

64.      Repossessed Manufactured Homes purchased by Originator
         or Subsidiary

         (a)      number of Contracts
                           current month                                                           ______
                           cumulative                                                              ______

         (b)      Scheduled Principal Balance
                           current month                                                           ______
                           cumulative                                                              ______

         (c)      Purchase Price
                           current month                                                           ______
                           cumulative                                                              ______
</TABLE>

                                      N-10
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                             <C>
65.      Weighted Average Contract Rate
         of all outstanding Contracts                                                              ______

Class M and Class B Certificates
--------------------------------

66.      Class M-1 Interest Deficiency Amount on
         such Remittance Date                                                                      ______

67.      Class M-2 Interest Deficiency Amount on
         such Remittance Date                                                                      ______

68.      Class B-1 Interest Deficiency Amount on
         such Remittance Date                                                                      ______
</TABLE>

Please contact Bondholder Services Department of U.S. Bank National Association,
1-800-934-6802 with any questions regarding this Statement or your Distribution.

                                      N-11
<PAGE>

                                                                       EXHIBIT O
                                                                       ---------

                             FORM OF ADDITION NOTICE
                             -----------------------

                                                            ______________, 2000

U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota  55101

         Re:      Pooling and Servicing Agreement (the "Agreement"), dated as of
                  October 1, 2000, among Conseco Finance Corp. (the "Company"),
                  Conseco Finance Securitizations Corp. (the "Seller") and U.S.
                  Bank National Association as Trustee (the "Trustee") relating
                  to Manufactured Housing Contract Senior/Subordinate
                  Pass-Through Certificates, Series 2000-5

Ladies and Gentlemen:

         Capitalized terms not otherwise defined in this Notice have the
meanings given them in the Agreement. The Seller hereby notifies the Trustee of
an assignment to the Trust of Subsequent Contracts on the date and in the
amounts set forth below:

         Subsequent Transfer Date:  _________________

         Cut-off Date Principal Balance of Subsequent Contracts to be assigned
         to Trust on Subsequent Transfer Date: $_____________

         Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.

                                           Very truly yours,

                                           CONSECO FINANCE SECURITIZATIONS CORP.

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

ACKNOWLEDGED AND AGREED:

U.S. BANK NATIONAL ASSOCIATION

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

                                      O-1
<PAGE>

                                                                       EXHIBIT P
                                                                       ---------

                     FORM OF SUBSEQUENT TRANSFER INSTRUMENT
                     --------------------------------------

         In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of October 1, 2000, among Conseco Finance Corp. (the
"Originator"), Conseco Finance Securitizations Corp. (the "Seller") and U.S.
Bank National Association as Trustee (the "Trustee"), the Seller does hereby
transfer, assign, set over and otherwise convey, without recourse, to
Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate Trust
2000-5, created by the Agreement, to be held in trust as provided in the
Agreement, (i) all the right, title and interest of the Seller in and to the
Subsequent Contracts identified on the list attached hereto as Exhibit A (the
"Subsequent Contracts"), including, without limitation, all right, title and
interest in and to the Collateral Security and all rights to receive payments on
or with respect to the Subsequent Contracts (other than the principal and
interest due on the Subsequent Contracts on or before the applicable Cut-off
Date), (ii) all rights under every Hazard Insurance Policy relating to a
Manufactured Home securing a Subsequent Contract for the benefit of the owner of
such Subsequent Contract, (iii) all rights under all FHA/VA Regulations
pertaining to any Subsequent Contract that is an FHA/VA Contract, (iv) the
proceeds from the Errors and Omissions Protection Policy and all rights under
any blanket hazard insurance policy to the extent they relate to the
Manufactured Homes, (v) all documents contained in the Contract Files and the
Land-and-Home Contract Files relating to the Subsequent Contracts, (vi) all
rights of the Seller under the Subsequent Transfer Agreement of even date
herewith between the Originator and the Seller and (vii) all proceeds and
products of the foregoing.

         This Assignment is made pursuant to and upon the representation and
warranties on the part of the undersigned contained in Section 2.03 and Article
III of the Agreement and no others. All undefined capitalized terms used in this
Assignment have the meanings given them in the Agreement.

         IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this __ day of ________, 2000.

                                           CONSECO FINANCE SECURITIZATIONS CORP.

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

                                      P-1
<PAGE>

                                                                       EXHIBIT Q
                                                                       ---------

               FORM OF OFFICER'S CERTIFICATE (SUBSEQUENT TRANSFER)
               ---------------------------------------------------

         The undersigned certifies that [s]he is a [title] of Conseco Finance
Securitizations Corp., a Minnesota corporation (the "Company"), and that as such
[s]he is duly authorized to execute and deliver this certificate on behalf of
the Company in connection with the Pooling and Servicing Agreement dated as of
October 1, 2000 (the "Agreement") among the Company, Conseco Finance Corp. and
U.S. Bank National Association as Trustee. All capitalized terms used herein
without definition have the respective meanings specified in the Agreement. The
undersigned further certifies that:

         1.       This Certificate is delivered in connection with the sale to
the Trust on __________________ (the "Subsequent Transfer Date") of Contracts
(the "Subsequent Contracts") identified in the List of Contracts attached to the
Subsequent Transfer Instrument of even date herewith.

         2.       As of the Subsequent Transfer Date, all representations and
warranties in Section 3.01 of the Agreement are true and correct and all
representations and warranties in Section 3.03 of the Agreement with respect to
the Subsequent Contracts are true to the best of [her][his] knowledge.

         3.       All conditions precedent to the sale of the Subsequent
Contracts to the Trust under Section 2.03 of the Agreement have been satisfied.

         4.       As of the Subsequent Transfer Date, the Company is not
insolvent and will not be made insolvent by the transfer of the Subsequent
Contracts, and the undersigned is not aware of any pending insolvency of the
Company.

         IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day
of _________, 2000.

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

                                      Q-1

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