Document:

Exhibit 10.2

    
      

    

    Exhibit
      10.2

    

    LIMITED
      WAIVER, RELEASE, AND THIRD
      AMENDMENT TO

    FOURTH
      AMENDED AND
      RESTATED CREDIT AGREEMENT

    

    THIS
      LIMITED WAIVER, RELEASE, AND THIRD AMENDMENT TO FOURTH AMENDED AND RESTATED
      CREDIT AGREEMENT (this “Limited
      Waiver, Release, and Amendment”)
      is
      dated as of March 13, 2007, but effective as of the Effective Date (hereinafter
      defined), among THE
      VAIL CORPORATION,
      a
      Colorado corporation doing business as “Vail Associates, Inc.” (the
“Company”),
      the
      Lenders (as defined in the Credit Agreement referenced below) party hereto,
      and
BANK
      OF AMERICA, N.A.,
      as
      Administrative Agent (hereinafter defined).

    

    R
      E C I T A L S

    

    A. The
      Company has entered into that certain Fourth Amended and Restated Credit
      Agreement dated as of January 28, 2005, with Bank of America, N.A., as
      Administrative Agent (in such capacity, the “Administrative
      Agent”),
      and
      certain other agents and lenders party thereto, as amended by that certain
      First
      Amendment to Fourth Amended and Restated Credit Agreement dated as of June
      29,
      2005, and that certain Second Amendment to Fourth Amended and Restated Credit
      Agreement dated as of February 17, 2006 (as amended, the “Credit
      Agreement”),
      providing for revolving credit loans, letters of credit, and swing line loans
      in
      the aggregate principal amount of up to $400,000,000. Unless otherwise indicated
      herein, all capitalized terms used herein shall have the meanings set forth
      in
      the Credit Agreement, and all Section references herein shall be references
      to
      sections in the Credit Agreement.

    

    B. The
      Company has notified the Administrative Agent of the formation of the following
      new Unrestricted Subsidiaries: Colter Bay Convenience Store, LLC, a
      Wyoming
      limited liability company, Colter
      Bay General Store, LLC, a Wyoming limited liability company, Colter Bay Marina,
      LLC, a Wyoming limited liability company, Colter Bay Cafe Court, LLC, a Wyoming
      limited liability company, Jenny Lake Store, LLC, a Wyoming limited liability
      company, Jackson Hole Golf & Tennis Club Snack Bar, LLC, a Wyoming limited
      liability company, Stampede Canteen, LLC, a Wyoming limited liability company,
      Crystal Peak Lodge of Breckenridge, Inc., a Colorado corporation, and Hunkidori
      Land Company, LLC, a Colorado limited liability company (collectively, the
      “New
      Unrestricted Subsidiaries”).
      The
      Company did not deliver to the Administrative Agent an updated Schedule
      8.2
      to the
      Credit Agreement within thirty (30) days after the formation of the New
      Unrestricted Subsidiaries, as required by Section
      9.10
      of the
      Credit Agreement, and has requested that the Lenders waive any Default or
      Potential Default resulting from such failure.

    

    C. The
      Company has also notified the Administrative Agent that the Company intends
      to
      transfer 100% of the capital stock (the “Pledged
      CTI Securities”)
      of
      Complete Telecommunications, Inc. (“CTI”)
      as
      part of the Company’s disposition of its equity interest in RTP, LLC, an
      Unrestricted Subsidiary. In connection therewith, the Company has requested
      that
      the Administrative Agent, for the benefit of the Lenders, release its liens
      on
      the Pledged CTI Securities and release CTI from its obligations under the
      Guaranty executed by CTI. 

    

    D. The
      Company has also requested that the Lenders amend the Credit Agreement to,
      among
      other things, decrease the Total Commitment to $300,000,000, modify the interest
      rates, and extend the Termination Date to February 1, 2012. 

    

    E. The
      Lenders have agreed to the waiver, release, and amendments to the Credit
      Agreement as set forth herein.

    

    In
      consideration of the foregoing and the mutual covenants contained herein, the
      Company, the Lenders, the Guarantors (by execution of the attached Guarantors’
Consent and Agreement), and the Administrative Agent agree as
      follows:

    

    1. Limited
      Waiver. The
      Lenders hereby waive any Default or Potential Default resulting from the
      Company’s failure to deliver an updated Schedule
      8.2
      to the
      Administrative Agent within thirty (30) days after the formation of the New
      Unrestricted Subsidiaries in accordance with Section
      9.10
      of the
      Credit Agreement. Nothing herein shall, or shall be deemed to, waive any other
      provision of the Credit Agreement, except as set forth herein.

     

    2. Releases.

    

    (a) The
      Lenders hereby (i) discharge CTI as a “Guarantor”
under
      the Credit Agreement and release CTI from any liability under the Credit
      Agreement and its Guaranty, including, but not limited to, payment or
      performance of the Guaranteed Debt (as defined in such Guaranty), and (ii)
      release the Liens on and security interests in the Pledged CTI Securities,
      and
      accordingly release the Company from its pledge of the Pledged CTI Securities
      pursuant to its Pledge Agreement, but only to the extent of its interests in
      the
      Pledged CTI Securities.

    

    (b) The
      Administrative Agent agrees to execute and deliver UCC financing statement
      terminations and all further documents reasonably requested by the Company
      in
      order to effectuate the releases contemplated hereby.

    

    (c) It
      is
      expressly agreed and understood that, except as set forth herein, this Limited
      Waiver, Release, and Amendment shall in no manner release, affect or impair
      the
      Administrative Agent’s and the Lenders’ rights, titles, interests, and Liens
      against the Restricted Companies’ interests, properties or assets.

    

    3. Amendments. 

    (a) New
      Definitions.
      Section
      1.1
      (Definitions) is amended by inserting the following new definitions
      alphabetically to read as follows:

    (i) “Net
      Funded Debt
      means,
      on any date of determination, an amount equal to (a) Funded Debt minus
      (b) the
      amount of Unrestricted Cash in excess of $10,000,000.”

    

    (ii)  “Temporary
      Cash Investments
      means
      investments of the Restricted Companies permitted under clauses
      (b) through
      (g),
      (p),
      and
(q)
      of
      Section
      10.8 hereof.”
      

    

    (iii)  “Unrestricted
      Cash means,
      on
      any date of determination, the aggregate amount of all cash and Temporary Cash
      Investments of the Restricted Companies not subject to any Lien or restriction
      (except for Liens of depository institutions securing payment of customary
      service charges, transfer fees, account maintenance fees, and charges for
      returned or dishonored items).

    

    (b) Modifications
      of Existing Definitions.
      Section
      1.1
      (Definitions) is further amended by modifying the following existing definitions
      as follows:

    

    (i) The
      definition of “Adjusted
      EBITDA”
is
      amended in its entirety to read as follows:

    

    “Adjusted
      EBITDA means,
      without duplication, on any date of determination, the sum
      of (a)
      EBITDA of the Restricted Companies (excluding non-recurring gains or losses),
      plus
      (b) a
      percentage of the EBITDA of SSI (with such percentage being the weighted average
      membership interest held directly or indirectly by Borrower in SSI (expressed
      as
      a percentage) during the applicable period of calculation), plus
      (c)
      insurance proceeds (up to a maximum of $10,000,000 in the aggregate in any
      fiscal year) received by the Restricted Companies under policies of business
      interruption insurance (or under policies of insurance which cover losses or
      claims of the same character or type).”

    

    (ii) The
      definition of “Applicable
      Margin”
is
      amended to cause the Applicable Margin to be calculated by reference to the
      ratio of Net Funded Debt to Adjusted EBITDA and to modify the pricing grid,
      as
      set forth on Annex
      A attached
      hereto.

    

    (iii) The
      definition of “Applicable
      Percentage”
is
      amended to cause the Applicable Percentage to be calculated by reference to
      the
      ratio of Net Funded Debt to Adjusted EBITDA and to modify the commitment fee
      grid, as set forth on Annex
      B attached
      hereto. 

    

    (iv) The
      definitions of “Funded
      Debt”
and
      “Net
      Income”
are
      amended by replacing the phrase “held
      by Borrower”
in
      each
      definition with the phrase “held
      directly or indirectly by Borrower”. 

    

    (v) The
      definitions of “Required
      Capital Expenditures”
and
      “Resort
      EBITDA”
are
      deleted.

    

    (vi) The
      definition of “SSI”
is
      amended by removing the words “of
      Borrower”
at
      the
      end thereof.

    

    (vii) The
      definition of “Termination
      Date”
is
      amended to extend such date by replacing the reference to “January
      28, 2010”
therein
      with “February
      1, 2012”.

    

    (c) Modification
      of Accordion Provision.
      Section
      2.5 (Increase
      in Total Commitment) is amended to modify the maximum Total Commitment to which
      the facility may be increased by replacing the reference to “$500,000,000”
therein
      with “$400,000,000”.

    

    (d) Modification
      of Permitted Investments.
      Section
      10.8 (Loans,
      Advances and Investments) is amended by replacing the period at the end of
      clause
      (o) with
      a
      semi-colon and inserting the following thereafter:

    

    “(p) short-term
      repurchase agreements with major banks and authorized dealers, fully
      collateralized to at least 100% of market value by marketable obligations issued
      or unconditionally guaranteed by the U.S. or issued by any of its agencies
      and
      backed by the full faith and credit of the U.S.; and

    

    (q) short-term
      variable rate demand notes that invest in tax-free municipal bonds of domestic
      issuers rated “A-2”
or
      better by Moody’s or “A”
or
      better by S&P that are supported by irrevocable letters of credit issued by
      commercial banks organized under the laws of the U.S. or any of its states
      having combined capital, surplus, and undivided profits of not less than
      $100,000,000.”

    

    (e) Modification
      of Limits on Acquisitions.
      The
      qualifiers to clause
      (c) of
      Section
      10.11 (Acquisitions,
      Mergers, and Dissolutions) are amended as follows: 

    

    (i) Clause
      (i)
      is
      amended in its entirety to read as follows:

    “(i) the
      Purchase Price for such transaction, when aggregated with the Purchase Price
      of
      all other acquisitions or mergers consummated by the Restricted Subsidiaries
      after March 13, 2007, does not exceed an amount equal to the sum of (A)
      $400,000,000, plus
      (B) the
      lesser of (1) the aggregate consideration paid by Borrower to purchase the
      minority membership interest in SSI, and (2) $40,000,000.”

    

    (ii) Clause
      (iv)
      is
      amended to modify the threshold for delivery of documentation related to
      permitted acquisitions by replacing the reference to “$25,000,000”
therein
      with “50,000,000”.
      

    

    (f) Modifications
      of Financial Covenants.
      Section
      11
      (Financial Covenants) is amended as follows:

    

    (i) Section
      11.1
      (Maximum
      Leverage Ratios) is amended in its entirety to read as follows:

    “11.1 Maximum
      Leverage Ratio.
      As
      calculated as of the last day of each fiscal quarter of the Restricted
      Companies, the Restricted Companies shall not permit the ratio of (a) the unpaid
      principal amount of Net Funded Debt existing as of such last day to (b) Adjusted
      EBITDA for the four fiscal quarters ending on such last day to exceed 4.50
      to
      1.00.”  

     

    (ii) Section
      11.2
      (Minimum
      Fixed Charge Coverage Ratio) is deleted in its entirety and substituted therefor
      is the following reference: 

    

    “11.2 [Reserved]”.

    

    (g) Modification
      of Commitments.
      The
      Commitments of the Lenders are revised so that the Total Commitment equals
      $300,000,000 as of the Effective Date. 

    

    (h) Modification
      of Schedule
      1.
      Schedule
      1 (Parties,
      Addresses, Committed Sums and Wiring Information) is revised to (i) update
      contact information for the Borrower, the Administrative Agent, L/C Issuer
      and
      Swing Line Lender, as applicable, and (ii) reflect the Lenders’ revised
      Commitments and Commitment Percentages, as set forth on Annex
      C attached
      hereto.

    

    (i) Modification
      of Schedule
      7.1.
      Items
      1
      and
2
      of
Schedule
      7.1 (Post-Closing
      Items and Conditions) are revised to reflect that, following approval by the
      United States Department of the Interior, National Park Service, the Company
      will transfer its equity interests in Grand Teton Lodge Company (“Grand
      Teton”)
      to
      National Park Hospitality Company, a Colorado corporation (“NPHC”),
      and
      NPHC shall pledge such interests to the Administrative Agent, for the benefit
      of
      the Lenders, as set forth on Annex
      D attached
      hereto.

    

    (j) Modification
      of Schedule
      8.2.
      Schedule
      8.2 (Corporate
      Organization and Structure) is revised as set forth on Annex
      E attached
      hereto.

    

    (k) Modification
      of Compliance Certificate.
      Annex
      A to
      the
      Compliance Certificate is replaced with Annex
      F attached
      hereto.

     

    4. Representations
      and Warranties.
      As a
      material inducement to the Lenders and the Administrative Agent to execute
      and
      deliver this Limited Waiver, Release, and Amendment, the Company represents
      and
      warrants to the Lenders and the Administrative Agent (with the knowledge and
      intent that Lenders are relying upon the same in entering into this Limited
      Waiver, Release, and Amendment) that: (a) the Company
      and the Guarantors have all requisite authority and power to execute, deliver,
      and perform their respective obligations under this Limited Waiver, Release,
      and
      Amendment and the Guarantors’ Consent and Agreement, as the case may be, which
      execution, delivery, and performance have been duly authorized by all necessary
      action, require
      no Governmental Approvals, and do not violate the respective certificates of
      incorporation or organization, bylaws, or operating agreement, or other
      organizational or formation documents of such Companies; (b) upon
      execution and delivery by the Company, the Guarantors, the Administrative Agent,
      and the Lenders, this Limited Waiver, Release, and Amendment will constitute
      the
      legal and binding obligation of the Company and each Guarantor, enforceable
      against such entities in accordance with the terms of this Limited Waiver,
      Release, and Amendment, except
      as that
      enforceability may be limited by general principles of equity or by bankruptcy
      or insolvency laws or similar laws affecting creditors’ rights generally; (c)
      all representations and warranties in the Loan Papers are true and correct
      in
      all material respects as though made on the date hereof, except
      to the
      extent that any of them speak to a specific date or the facts on which any
      of
      them are based have been changed by transactions contemplated or permitted
      by
      the Credit Agreement; and (d) no Default or Potential Default has occurred
      and
      is continuing.

    

    5. Conditions
      Precedent to Effectiveness.
      This
      Limited Waiver, Release, and Amendment shall be effective on the date (the
      “Effective
      Date”)
      upon
      which the Administrative Agent receives each of the following items
      (other
      than
      the
      items listed on Schedule
      7.1,
      as
      revised hereby, which items or conditions are hereby permitted to be delivered
      or satisfied after the Effective Date, but not later than the respective dates
      for delivery or satisfaction specified on Schedule
      7.1):

    

    (a) counterparts
      of this Limited Waiver, Release, and Amendment executed by the Company, the
      Administrative Agent, and Lenders;

    

    (b) the
      Guarantors’ Consent and Agreement executed by each Guarantor;

    

    (c) a
      Revolver Note for each Lender requesting a Note, payable to the order of such
      requesting Lender, reflecting such Lender’s revised Commitment;

    

    (d) legal
      opinions of Martha D. Rehm, General Counsel of Vail Resorts, Inc., and Cahill
      Gordon & Reindel LLP, special New York counsel to the Company and the other
      Restricted Subsidiaries, each in form and substance satisfactory to the
      Administrative Agent;

    

    (e) an
      Officers’ Certificate for the Restricted Companies (i) attaching resolutions
      authorizing the transactions contemplated hereby, (ii) certifying that no
      changes have been made to the Restricted Companies’ respective articles of
      incorporation or organization, bylaws, or operating agreements since the date
      such documents were previously provided to the Administrative Agent, as
      applicable, (iii) listing the names and titles of the Responsible Officers,
      and
      (iv) providing specimen signatures for such Responsible Officers;

    

    (f) a
      certificate signed by a Responsible Officer certifying that (i) all of the
      representations and warranties of the Companies in the Loan Papers are true
      and
      correct in all material respects (unless they speak to a specific date or are
      based on facts which have changed by transactions contemplated or permitted
      by
      the Credit Agreement); (ii) no Default or Potential Default exists under the
      Credit Agreement or would result from the execution and delivery of this Limited
      Waiver, Release, and Amendment; (iii) there has been no event or circumstance
      since July 31, 2006 that has had or could be reasonably expected to result
      in,
      either individually or in the aggregate, a Material Adverse Event; and (iv)
      except as set forth on Schedule
      8.7
      of the
      Credit Agreement, there is no action, suit, investigation, or proceeding pending
      or, to the knowledge of Borrower, threatened, in any court or before any
      arbitrator or Governmental Authority that could reasonably be expected to (A)
      materially and adversely affect the Companies, or (B) adversely affect any
      transaction contemplated by the Credit Agreement, the rights and remedies of
      the
      Administrative Agent, Lenders, and the L/C Issuers under the Credit Agreement,
      or the ability of the Companies or any other obligor under any Guaranty to
      perform their respective obligations under the Credit Agreement; 

    

    (g) evidence
      (in form and substance satisfactory to the Administrative Agent) that the
      Commitment Usage does not exceed the Total Commitment (as reduced
      hereby);

    

    (h) such
      organizational documents, Guaranties, Pledge Agreements, financing statements,
      and other documents as the Administrative Agent may deem reasonably necessary
      to
      reflect the changes to Schedule
      8.2
      (including, without limitation, the addition of NPHC as a Restricted
      Subsidiary); and

    

    (i) payment
      of an extension fee for the benefit of the Lenders equal to the product of
      (a)
      five basis points (0.05%) times
      (b)
      the
      Total Commitment as of the Effective Date (after giving effect to the reduction
      in the Total Commitment contemplated by this Limited Waiver, Release, and
      Amendment).

    

    6. Expenses.
      The
      Company shall pay all reasonable out-of-pocket fees and expenses paid or
      incurred by the Administrative Agent incident to this Limited Waiver, Release,
      and Amendment, including, without limitation, the reasonable fees and expenses
      of the Administrative Agent’s counsel in connection with the negotiation,
      preparation, delivery, and execution of this Limited Waiver, Release, and
      Amendment and any related documents.

    

    7. Miscellaneous.
      Unless
      stated otherwise herein, (a) the singular number includes the plural, and
vice
      versa,
      and
      words of any gender include each other gender, in each case, as appropriate,
      (b)
      headings and captions shall not be construed in interpreting provisions of
      this
      Limited Waiver, Release, and Amendment, (c) this Limited Waiver, Release, and
      Amendment shall be governed by and construed in accordance with the laws of
      the
      State of New York, (d) if any part of this Limited Waiver, Release, and
      Amendment is for any reason found to be unenforceable, all other portions of
      it
      shall nevertheless remain enforceable, (e) this Limited Waiver, Release, and
      Amendment may be executed in any number of counterparts with the same effect
      as
      if all signatories had signed the same document, and all of those counterparts
      shall be construed together to constitute the same document, (f) this Limited
      Waiver, Release, and Amendment is a “Loan
      Paper”
      referred to in the Credit Agreement, and the provisions relating to Loan Papers
      in Section
      14
      of the
      Credit Agreement are incorporated herein by reference, (g) this Limited Waiver,
      Release, and Amendment, the Credit Agreement, as amended by this Limited Waiver,
      Release, and Amendment, and the other Loan Papers constitute
      the entire agreement and understanding among the parties hereto and supercede
      any and all prior agreements and understandings, oral or written, relating
      to
      the subject matter hereof, and (h) except as provided in this Limited Waiver,
      Release, and Amendment, the Credit Agreement, the Notes, and the other Loan
      Papers are unchanged and are ratified and confirmed.

    

    8. Parties.
      This
      Limited Waiver, Release, and Amendment binds and inures to the benefit of the
      Company, the Guarantors, the Administrative Agent, the Lenders, and their
      respective successors and assigns.

    

    The
      parties hereto have executed this Limited Waiver, Release, and Amendment in
      multiple counterparts as of the date first above written.

    Remainder
      of Page Intentionally Blank.

    Signature
      Pages to Follow.

    

    

    
      
        
           

          -16-

        

        
        

      

      
        
        

        
        

      

      
        
        

        
        

      

    

    

    THE
      VAIL CORPORATION (D/B/A “VAIL ASSOCIATES, INC.”), as
      the
      Company

    

    

    By: /s/
      Jeffrey W. Jones

    Name: Jeffrey
      W. Jones

    Title: Senior
      Executive Vice President & Chief Financial Officer

    

    

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    BANK
      OF AMERICA, N.A.,
      as
      Administrative Agent 

    

    

    By: Illegible

    Name: Illegible

    Title: Illegible

    

    

    BANK
      OF AMERICA, N.A.,
      

    as
      an L/C
      Issuer, a Swing Line Lender, and a Lender

    

    

    By: /s/
      David
      McCautey

    Name: David
      McCautey

    Title: Principal

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    U.S.
      BANK NATIONAL ASSOCIATION,
      

    as
      Co-Syndication Agent, a Swing Line Lender, and a Lender

    

    

    By: /s/
      Greg
      Blanchard

    Name: Greg
      Blanchard

    Title: Vice
      President

    

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    

    WELLS
      FARGO BANK, NATIONAL ASSOCIATION,
      as
      Co-Syndication Agent, an L/C Issuer, and a Lender

    

    

    By: /s/
      Debbie A. Wright

    Name: Debbie
      A.
      Wright

    Title: Vice
      President

    

    

    

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    DEUTSCHE
      BANK TRUST COMPANY AMERICAS,
      as
      Co-Documentation Agent and a Lender

    

    

    By: /s/
      Steven P. Lapham

    Name: Steven
      P.
      Lapham

    Title: Managing
      Director

    

    By: /s/
      James
      Rolison

    Name: James
      Rolison

    Title: Director

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    LASALLE
      BANK NATIONAL ASSOCIATION,
      

    as
      Co-Documentation Agent and a Lender

    

    

    By: /s/
      Darren Lemkaw

    Name: Darren
      Lemkaw

    Title: SVP

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    JPMORGAN
      CHASE BANK, NA,

    as
      a
      Lender

    

    

    By: /s/
      David
      L. Ericson

    Name: David
      L.
      Ericson

    Title: Senior
      Vice President

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    COLORADO
      STATE BANK & TRUST,

    as
      a
      Lender

    

    

    By: /s/
      Kent
      M. Mustari

    Name: Kent
      M.
      Mustari

    Title: Senior
      Vice President

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    COMPASS
      BANK,

    as
      a
      Lender

    

    

    By: /s/
      Eric
      R. Long

    Name: Eric
      R.
      Long

    Title: Senior
      Vice President

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    COMERICA
      WEST INCORPORATED,

    as
      a
      Lender

    

    

    By: /s/
      Fatima Arshad

    Name: Fatima
      Arshad

    Title: Corporate
      Banking Officer

    GUARANTORS’
      CONSENT AND AGREEMENT

     

    As
      an
      inducement to Administrative Agent and Lenders to execute, and in consideration
      of Administrative Agent’s and Lenders’ execution of the foregoing Limited
      Waiver, Release, and Third Amendment to Fourth Amended and Restated Credit
      Agreement, the undersigned hereby consent thereto and agree that the same shall
      in no way release, diminish, impair, reduce or otherwise adversely affect the
      respective obligations and liabilities of each of the undersigned under each
      Guaranty described in the Credit Agreement, or any agreements, documents or
      instruments executed by any of the undersigned to create liens, security
      interests or charges to secure any of the indebtedness under the Loan Papers,
      all of which obligations and liabilities are, and shall continue to be, in
      full
      force and effect. This consent and agreement shall be binding upon the
      undersigned, and the respective successors and assigns of each, and shall inure
      to the benefit of Administrative Agent and Lenders, and the respective
      successors and assigns of each.

     

    

    Vail
      Resorts, Inc.

    Vail
      Holdings, Inc.

    Beaver
      Creek Associates, Inc. 

    Beaver
      Creek Consultants, Inc.

    Beaver
      Creek Food Services, Inc.

    Breckenridge
      Resort Properties, Inc.

    Complete
      Telecommunications, Inc.

    Gillett
      Broadcasting, Inc.

    Grand
      Canyon Lodge Company North Rim

    Grand
      Teton Lodge Company

    Heavenly
      Valley, Limited Partnership

    Jackson
      Hole Golf and Tennis Club, Inc.

    JHL&S
      LLC

    Keystone
      Conference Services, Inc.

    Keystone
      Development Sales, Inc.

    Keystone
      Food and Beverage Company

    Keystone
      Resort Property Management Company

    Larkspur
      Restaurant & Bar, LLC

    Lodge
      Properties, Inc.

    Lodge
      Realty, Inc.

    Mountain
      Thunder, Inc.

    National
      Park Hospitality Company

    Property
      Management Acquisition Corp., Inc.

    Rockresorts
      Arrabelle, LLC

    Rockresorts
      International, LLC

    Rockresorts
      LLC

    Rockresorts
      Cheeca, LLC

    Rockresorts
      Eleven Biscayne, LLC

    Rockresorts
      Equinox, Inc.

    Rockresorts
      LaPosada, LLC

    Rockresorts
      Wyoming, LLC

    Rockresorts
      Casa Madrona, LLC

    Rockresorts
      Cordillera Lodge Company, LLC

    Rockresorts
      Rosario, LLC

    SOHO
      Development, LLC

    SSV
      Holdings, Inc.

    Teton
      Hospitality Services, Inc.

    The
      Village at Breckenridge Acquisition Corp., Inc.

    Timber
      Trail, Inc.

    VA
      Rancho
      Mirage I, Inc.

    VA
      Rancho
      Mirage II, Inc.

    VA
      Rancho
      Mirage Resort, L.P.

    Vail/Arrowhead,
      Inc.

    Vail
      Hotel Management Company, LLC

    Vail
      Associates Holdings, Ltd.

    Vail
      Associates Investments, Inc.

    Vail
      Associates Real Estate, Inc.

    Vail/Beaver
      Creek Resort Properties, Inc.

    Vail
      Food
      Services, Inc.

    Vail
      Resorts Development Company

    Vail
      RR,
      Inc.

    Vail
      Summit Resorts, Inc.

    Vail
      Trademarks, Inc.

    VAMHC,
      Inc.

    VR
      Heavenly I, Inc.

    VR
      Heavenly II, Inc.

    VR
      Holdings, Inc.

    

    

    By:
      /s/
      Jeffrey W. Jones

    Name:
      Jeffrey W. Jones

    Title:
      Executive Vice President & Chief Financial Officer

    

    

    

    

    ANNEX
      A

    

    Applicable
      Margin means,
      for any day, the margin of interest over the Base Rate or LIBOR, as the case
      may
      be, that is applicable when any interest rate is determined under this
      Agreement. The Applicable Margin is subject to adjustment (upwards or downwards,
      as appropriate) based on the ratio of Net Funded Debt to Adjusted EBITDA, as
      follows:

    

    
      	 	
              Ratio
                of Net Funded Debt to Adjusted EBITDA

            	
              Applicable
                Margin for

              LIBOR
                Loans 

            	
              Applicable
                Margin 

              Base
                Rate Loans

            
	
              I

            	
              Less
                than 1.50 to 1.00

            	
              0.50%

            	
              0.00%

            
	
              II

            	
              Greater
                than or equal to 1.50 to 1.00, but less than 2.00 to 1.00

            	
              0.75%

            	
              0.00%

            
	
              III

            	
              Greater
                than or equal to 2.00 to 1.00, but less than 2.50 to 1.00

            	
              1.00%

            	
              0.00%

            
	
              IV

            	
              Greater
                than or equal to 2.50 to 1.00, but less than 3.00 to 1.00 

            	
              1.25%

            	
              0.00%

            
	
              V

            	
              Greater
                than or equal to 3.00 to 1.00, but less than 3.50 to 1.00

            	
              1.50%

            	
              0.25%

            
	
              VI

            	
              Greater
                than or equal to 3.50 to 1.00, but less than 4.00 to 1.00

            	
              1.75%

            	
              0.50%

            
	
              VII

            	
              Greater
                than or equal to 4.00 to 1.00

            	
              2.00%

            	
              1.00%

            

    

    

    Prior
      to
      Administrative Agent’s receipt of the Companies’ consolidated Financial
      Statements for the Companies’ fiscal quarter ended January 31, 2007, the ratio
      of Net Funded Debt to Adjusted EBITDA shall be fixed at Level III. Thereafter,
      the ratio of Net Funded Debt to Adjusted EBITDA shall be calculated on a
      consolidated basis for the Companies in accordance with GAAP for the most
      recently completed fiscal quarter of the Companies for which results are
      available. The ratio shall be determined from the Current Financials and any
      related Compliance Certificate and any change in the Applicable Margin resulting
      from a change in such ratio shall be effective as of the date of delivery of
      such Compliance Certificate. However, if Borrower fails to furnish to
      Administrative Agent the Current Financials and any related Compliance
      Certificate when required pursuant to Section
      9.1,
      then
      the ratio shall be deemed to be at Level VII until Borrower furnishes the
      required Current Financials and any related Compliance Certificate to
      Administrative Agent. Furthermore, if the Companies’ audited Financial
      Statements delivered to Administrative Agent for any fiscal year pursuant to
      Section 9.1(a)
      result
      in a different ratio, such revised ratio (whether higher or lower) shall govern
      effective as of the date of such delivery. For purposes of determining such
      ratio, Adjusted EBITDA for any fiscal quarter shall include on a pro
      forma
      basis
      all EBITDA of the Restricted Companies for such period relating to assets
      acquired in accordance with this Agreement (including, without limitation,
      Restricted Subsidiaries formed or acquired in accordance with Section
      9.10 hereof,
      and Unrestricted Subsidiaries re-designated as Restricted Subsidiaries in
      accordance with Section
      9.11(b)
      hereof)
      during such period, but shall exclude on a pro
      forma
      basis
      all EBITDA of the Restricted Companies for such period relating to any such
      assets disposed of in accordance with this Agreement during such period
      (including, without limitation, Restricted Subsidiaries re-designated as
      Unrestricted Subsidiaries in accordance with Section
      9.11(a)
      hereof).

     

    ANNEX
      B

    

    Applicable
      Percentage means,
      for any day, the commitment fee percentage applicable under Section
      5.4
      when
      commitment fees are determined under this Agreement. The Applicable Percentage
      is subject to adjustment (upwards or downwards, as appropriate) based on the
      ratio of Net Funded Debt to Adjusted EBITDA, as follows:

     

    
      	 	
              Ratio
                of Net Funded Debt to Adjusted EBITDA

            	
              Applicable
                Percentage 

            
	
              I

            	
              Less
                than 1.50 to 1.00

            	
              0.100%

            
	
              II

            	
              Greater
                than or equal to 1.50 to 1.00, but less than 2.00 to 1.00

            	
              0.125%

            
	
              III

            	
              Greater
                than or equal to 2.00 to 1.00, but less than 2.50 to 1.00

            	
              0.150%

            
	
              IV

            	
              Greater
                than or equal to 2.50 to 1.00, but less than 3.00 to 1.00 

            	
              0.200%

            
	
              V

            	
              Greater
                than or equal to 3.00 to 1.00, but less than 3.50 to 1.00

            	
              0.250%

            
	
              VI

            	
              Greater
                than or equal to 3.50 to 1.00, but less than 4.00 to 1.00

            	
              0.250%

            
	
              VII

            	
              Greater
                than or equal to 4.00 to 1.00

            	
              0.375%

            

    

    

     

    Prior
      to
      Administrative Agent’s receipt of the Companies’ consolidated Financial
      Statements for the Companies’ fiscal quarter ended January 31, 2007, the ratio
      of Net Funded Debt to Adjusted EBITDA (which shall be determined as described
      in
      the definition of “Applicable
      Margin”)
      shall
      be fixed at Level III. 

     

    

     

    

    ANNEX
      C

    

    Schedule
      1

    

    Borrower
      and all other Companies

    

    The
      Vail
      Corporation

    390
      Interlocken Crescent, Suite 1000

    Broomfield,
      CO 80021

    

    Contact: 

    Jeffrey
      P. Jones

    Senior
      Executive Vice President and Chief Financial Officer

    Phone:
      303/404-1802

    FAX:
      303/404/6403

    

    Wire
      Instructions:

    Location
      of account: U.S. Bank National Association

    ABA
      No.:

    City/State:
      Denver, Colorado

    Account
      No.: 

    

    Copy
      to:

    Fiona
      E.
      Arnold

    Deputy
      General Counsel

    Phone:
      303/404-1892

    FAX:
      303/648-4787

    

    Administrative
      Agent,
      L/C
      Issuer, and Swing Line Lender

    

    Bank
      of
      America, N.A.

    Mail
      Code: TX1-492-64-01

    901
      Main
      Street, 64th Floor

    Dallas,
      Texas 75202

    

    

    Credit
      Contact:

    David
      L.
      McCauley

    Mail
      Code: TX1-492-64-01

    901
      Main
      Street, 64th Floor

    Dallas,
      Texas 75202

    Phone:
      214/209-0940

    FAX:
      214/209-0905

    

    Agency
      Contact:

    Rosanne
      Parsill

    231
      S.
      LaSalle Street,

    Chicago,
      IL 60697 

    Phone:
      312/923-1639

    
      	 	
              FAX:
                877/206-8429

            

    

    

    
      
        
          Annex
            C to

          Limited
            Waiver, Release, and Third Amendment

        

        
        

      

      
        
        

        
        

      

      
        
        

        
        

      

    

    Swing
      Line Contact:

    Arlene
      Minor

    Mail
      Code: TX1-492-14-12

    901
      Main
      Street, 14th Floor

    Dallas,
      Texas 75202

    Phone:
      214/209-9177

    
      	 	
              FAX:
                214/290-9412

            

    

    

    Operations
      Contact:

    Arlene
      Minor

    Mail
      Code: TX1-492-14-12

    901
      Main
      Street, 14th Floor

    Dallas,
      Texas 75202

    Phone:
      214/209-9177

    FAX:
      214/290-9412

    

    L/C
      Contact:

    
      	 	
              Stella
                Rosales

            

    

    Mail
      Code: CA9-703-19-23

    333
      S.
      Beaudry Avenue

    Los
      Angeles, California 90017-1466 

    Phone:
      213/345-0141

    Fax:
      213/345-6684

    

    Wire
      Instructions:

    Bank
      of
      America, N.A.

    ABA
      No.:

    City/State:
      Dallas, Texas

    Account
      No.: 

    Attn:
      Credit Services

    Ref:
      The
      Vail Corp

    

    Copy
      to:

    Haynes
      and Boone, LLP.

    901
      Main
      Street, Suite 3100

    Dallas,
      Texas 75202-3789

    Attn:
      Karen S. Nelson

    Phone:
      214/651-5648

    FAX::
      214/200-0673

    

    Swing
      Line Lender

    

    U.S.
      Bank
      National Association

    918
      17th
      Street, 4th Floor

    Denver,
      Co 80202

    

    Credit
      Contact:

    Jennifer
      Kaufman

    950
      17th
      Street, 8th Floor

    Denver,
      Colorado 80202

    Phone:
      303/585-4202 

    Fax:
      303/585-6949

    

    Swing
      Line Contact:

    
      	 	
              Hanny
                Nawawi

            

    

    555
      SW
      Oak

    Portland,
      Oregon 97204

    Phone:
      503/275-7894

    Fax:
      503/275-8181   

    

    Wire
      Instructions:

    U.S.
      Bank
      National Association

    ABA
      No.:

    BNF:
      Commercial Loan Services - West

    Account
      No.: 

    Attn:
      Hanny Nawawi

    Ref:
      The
      Vail Corporation

    

    L/C
      Issuer

    

    Wells
      Fargo Bank, National Association

    

    Credit
      Contact:

    Debbie
      Wright/Susan Petri

    1740
      Broadway

    Denver,
      Colorado 80274

    Phone:
      303/863-4829

    Fax:
      303/863-6670

    

    L/C
      Contact:

    Debbie
      Wright/Susan Petri

    1740
      Broadway

    Denver,
      Colorado 80274

    Phone:
      303/863-4829

    Fax:
      303/863-6670

    

    Wire
      Instructions:

    Wells
      Fargo Bank, National Association

    ABA
      No.:

    City/State:
      Denver, Colorado

    Account
      No.: 

    Attn:
      WLS
      Denver

    Ref:
      Vail
      Corporation

    

    

    Lenders
      and Commitments

    

    
      	
              LENDER

            	
              COMMITMENT

            	
               

              COMMITMENT

              PERCENTAGE

            
	
               

              Bank
                of America, N.A.

            	
               

              $55,000,000

            	
               

              18.3%

            
	
               

              U.S.
                Bank National Association

            	
               

              $50,000,000

            	
               

              16.7%

            
	
              Wells
                Fargo Bank,

              National
                Association

            	
              $50,000,000

            	
              16.7%

            
	
              Deutsche
                Bank Trust

              Company
                Americas

            	
              $40,000,000

            	
              13.3%

            
	
              LaSalle
                Bank

              National
                Association 

            	
              $40,000,000

            	
              13.3%

            
	
              JPMorgan
                Chase Bank, NA 

            	
              $20,000,000

            	
              6.7%

            
	
              Colorado
                State Bank & Trust

            	
              $15,000,000

            	
              5.0%

            
	
              Compass
                Bank

            	
              $15,000,000

            	
              5.0%

            
	
              Comerica
                West Incorporated

            	
              $15,000,000

            	
              5.0%

            
	
               

              Totals

            	
               

              $300,000,000

            	
               

              100.0000000%

            

    

    

    

    ANNEX
      D

    

    Schedule
      7.1

    

    
      	
              ITEM

               

            	 	
              DATE
                FOR COMPLIANCE

               

            
	
              1. Borrower
                shall seek written consent from the United States Department of the
                Interior, National Park Service (“Park
                Service”)
                to the pledge by National Park Hospitality Company (“NPHC”)
                to the Administrative Agent (for the benefit of the Lenders) of the
                capital stock of Grand Teton Lodge Company, a Wyoming corporation
                (“Grand
                Teton”),
                issued to NPHC (the “Park
                Service Consent”).

               

            	 	
              Not
                later than 30 days after the date upon which the Park Service consents
                to
                the transfer of ownership of Grand Teton from Borrower to
                NPHC.

               

            
	
              2. NPHC
                shall execute and deliver to Administrative Agent a Pledge Agreement
                pledging the capital stock issued by Grand Teton to NPHC, accompanied
                by a
                certificate (or other instrument evidencing the capital stock) and
                a stock
                power or similar instrument of transfer or assignment duly executed
                in
                blank, each in form and substance satisfactory to Administrative
                Agent

               

            	 	
              On
                or before the thirtieth (30th) day after the date NPHC receives the
                Park
                Service Consent

               

            

    

    

    ANNEX
      E

    

    Schedule
      8.2

    

    (Attached)

    ANNEX
      F

    

    Annex
      A to Exhibit D

    

    CREDIT
      FACILITY COVENANTS CALCULATIONS

    

    Subject
      Period: ___________________, 200_

    

    
      	 	
              Months

              Ended
                - -

            
	
              10.8(m) 
                INVESTMENTS IN PERSONS 

            	 
	
              (i) Investments
                during Subject Period in Unrestricted Subsidiaries, Housing Districts
                and
                Metro Districts not otherwise permitted under Section
                10.8(j)(ii),
                and other Persons (other than Restricted Subsidiaries) involved in
                Similar
                Businesses:

            	
               

               

               

              $

            
	
              (ii) Investments
                during prior Subject Periods in Unrestricted Subsidiaries, Housing
                Districts and Metro Districts not otherwise permitted under Section
                10.8(j)(ii),
                and other Persons (other than Restricted Subsidiaries) involved in
                Similar
                Businesses:

            	
               

               

               

              $

            
	
              (iii)
                Investments set forth on part
                (b)
                of
                Schedule
                10.8:

            	
              $

            
	
              (iv) (10.8(m)(i)
                plus 10.8(m)(ii) plus 10.8(m)(iii)):

            	
              $

            
	 	 
	
              (v)
                $75,000,000:

            	
              $75,000,000

            
	
              (vi) Book
                value of Total Assets:

            	
              $

            
	 	 
	
              (vii)
                10% of 10.8(m)(vi):

            	
              $

            
	
              (viii) Investment
                Limit (10.8(m)(v) plus 10.8(m)(vii)):

            	
              $

            
	
              (ix)
                Net reductions in investments permitted under Section
                10.8(m)
                in
                an aggregate amount not to exceed 10.8(m)(viii):

            	
               

              $

            
	
              (x) Maximum
                permitted investments in Unrestricted Subsidiaries, Housing Districts
                and
                Metro Districts not otherwise permitted under Section
                10.8(j)(ii),
                and other Persons (other than Restricted Subsidiaries) involved in
                Similar
                Businesses permitted after the Closing Date, and investments set
                forth on
                part
                (b) of
                Schedule
                10.8
                (10.8(m)(viii) plus 10.8(m)(ix)):

            	
               

               

               

               

               

              $

            
	
              (xi)
                Fair market value of all assets owned by Restricted Subsidiaries
                on the
                Closing Date which have been contributed to Unrestricted
                Subsidiaries:

            	
               

               

              $  

            
	
              (xii)
                Is 10.8(m)(xi)
                less than $75,000,000?

            	
              Yes/No

            
	 	 
	
              (xiii) Are
                investments in Unrestricted Subsidiaries, Housing Districts and Metro
                Districts not otherwise permitted under Section
                10.8(j)(ii),
                and other Persons (other than Restricted Subsidiaries) involved in
                Similar
                Businesses, and investments set forth on part
                (b)
                of
                Schedule
                10.8
                (10.8(m)(iv)), less
                than or equal to the maximum amount permitted (10.8(m)(x))?

            	
               

               

               

               

               

              Yes/No

            
	
              10.9(d) DISTRIBUTIONS,
                LOANS, ADVANCES, AND INVESTMENTS

            	 
	
              (i) Distributions
                under Section
                10.9(d),
                and loans, advances, and investments made, which are not otherwise
                permitted under Section
                10.8 during
                Subject Period:

            	
               

               

              $

            
	
              (ii) Distributions
                under Section
                10.9(d),
                and loans, advances, and investments made, which are not otherwise
                permitted under Section
                10.8 during
                prior Subject Periods:

            	
               

               

              $

            
	
              (iii) Aggregate
                Distributions under Section
                10.9(d),
                and loans, advances, and investments made, which are not otherwise
                permitted under Section
                10.8
                (the sum of 10.9(d)(i) plus 10.9(d)(ii)):

            	
               

               

              $

            
	
              (iv) Aggregate
                amount of Restricted Payments (as defined in the VRI Indenture) that
                VRI
                and its Restricted Subsidiaries are permitted to make under, and
                in
                accordance with, Section
                4.10 of
                the VRI Indenture, as set forth in detail on Schedule
                I attached
                hereto:

            	
               

               

               

              $

            
	
              (v)
                Are aggregate Distributions under Section
                10.9(d),
                and loans, advances, and investments made, which are not otherwise
                permitted under Section
                10.8
                (10.9(d)(iii))
                less than the maximum amount of Restricted Payments permitted
                (10.9(d)(iv))?

            	
               

               

               

              Yes/No

            
	
              11.1 RATIO
                OF NET FUNDED DEBT TO ADJUSTED EBITDA:

            	 
	
              (i) All
                obligations of the Companies for borrowed money:

            	
              $

            
	
              (ii) Minus
                all obligations of the Unrestricted Subsidiaries for borrowed money
                (the
                sum of items
                11.1(ii)(A)
                through 11.1(ii)(W)
                below):

            	
               

               

              ($_____________)

            
	
              (A) SSI
                Venture LLC (weighted average of the membership interest not held
                by a
                Company) (if SSI is not a Restricted Subsidiary)

            	
               

               

              ($_____________)

            
	
              (B) Eagle
                Park Reservoir Company

            	
              ($_____________)

            
	
              (C) Boulder/Beaver,
                LLC

            	
              ($_____________)

            
	
              (D) Colter
                Bay Corporation

            	
              ($_____________)

            
	
              (E) Gros
                Ventre Utility Company

            	
              ($_____________)

            
	
              (F) Jackson
                Lake Lodge Corporation

            	
              ($_____________)

            
	
              (G) Jenny
                Lake Lodge, Inc.

            	
              ($_____________)

            
	
              (H) Forest
                Ridge Holdings, Inc.

            	
              ($_____________)

            
	
              (I) Resort
                Technology Partners, LLC

            	
              ($_____________)

            
	
              (J) RT
                Partners, Inc.

            	
              ($_____________)

            
	
              (K) Arrabelle
                at Vail Square, LLC

            	
              ($_____________)

            
	
              (L) Gore
                Creek Place, LLC

            	
              ($_____________)

            
	
              (M) The
                Chalets at the Lodge at Vail, LLC

            	
              ($_____________)

            
	
              (N) RCR
                Vail, LLC

            	
              ($_____________)

            
	
              (O)  Colter
                Bay Convenience Store, LLC

            	
              ($_____________)

            
	
              (P)  Colter
                Bay General Store, LLC

            	
              ($_____________)

            
	
              (Q)  Colter
                Bay Marina, LLC

            	
              ($_____________)

            
	
              (R)  Colter
                Bay Cafe Court, LLC

            	
              ($_____________)

            
	
              (S)  Jenny
                Lake Store, LLC

            	
              ($_____________)

            
	
              (T)  Jackson
                Hole Golf & Tennis Club Snack Bar, LLC

            	
              ($_____________)

            
	
              (U)  Stampede
                Canteen, LLC

            	
              ($_____________)

            
	
              (V)  Crystal
                Peak Lodge of Breckenridge, Inc.

            	
              ($_____________)

            
	
              (W)  Hunkidori
                Land Company, LLC

            	
              ($_____________)

            
	
              (iii) Plus
                the principal portion of all Capital Lease obligations of the
                Companies:

            	
               

              $_____________

            
	
               

              (iv) Minus
                the principal portion of the Capital Lease obligations for the following
                Unrestricted Subsidiaries (the sum of items 11.1(iv)(A)
                through 11.1(iv)(W)
                below):

            	
               

               

               

              ($____________)

            
	
              (A) SSI
                Venture LLC (weighted average of the membership interest not held
                by a
                Company) (if SSI is not a Restricted Subsidiary)

            	
               

               

              ($_____________)

            
	
              (B) Eagle
                Park Reservoir Company

            	
              ($_____________)

            
	
              (C) Boulder/Beaver,
                LLC

            	
              ($_____________)

            
	
              (D) Colter
                Bay Corporation

            	
              ($_____________)

            
	
              (E) Gros
                Ventre Utility Company

            	
              ($_____________)

            
	
              (F) Jackson
                Lake Lodge Corporation

            	
              ($_____________)

            
	
              (G) Jenny
                Lake Lodge, Inc.

            	
              ($_____________)

            
	
              (H) Forest
                Ridge Holdings, Inc.

            	
              ($_____________)

            
	
              (I) Resort
                Technology Partners, LLC

            	
              ($_____________)

            
	
              (J) RT
                Partners, Inc.

            	
              ($_____________)

            
	
              (K) Arrabelle
                at Vail Square, LLC

            	
              ($_____________)

            
	
              (L) Gore
                Creek Place, LLC

            	
              ($_____________)

            
	
              (M) The
                Chalets at the Lodge at Vail, LLC

            	
              ($_____________)

            
	
              (N) RCR
                Vail, LLC

            	
              ($_____________)

            
	
              (O)  Colter
                Bay Convenience Store, LLC

            	
              ($_____________)

            
	
              (P)  Colter
                Bay General Store, LLC

            	
              ($_____________)

            
	
              (Q)  Colter
                Bay Marina, LLC

            	
              ($_____________)

            
	
              (R)  Colter
                Bay Cafe Court, LLC

            	
              ($_____________)

            
	
              (S)  Jenny
                Lake Store, LLC

            	
              ($_____________)

            
	
              (T)  Jackson
                Hole Golf & Tennis Club Snack Bar, LLC

            	
              ($_____________)

            
	
              (U)  Stampede
                Canteen, LLC

            	
              ($_____________)

            
	
              (V)  Crystal
                Peak Lodge of Breckenridge, Inc.

            	
              ($_____________)

            
	
              (W)  Hunkidori
                Land Company, LLC

            	
              ($_____________)

            
	
              (v)
                Plus
                reimbursement obligations and undrawn amounts under Bond 

              L/Cs
                supporting Bonds (other than Existing Housing Bonds) issued 

              by
                Unrestricted Subsidiaries: 

            	
               

               

              $

            
	
              (vi) Minus
                Debt under Existing Housing Bonds:

            	
              $

            
	 	 
	
              (vii) Funded
                Debt of the Restricted Companies (11.1(i) minus 11.1(ii) plus 11.1(iii) minus 11.1(iv)
                plus 11.1(v) minus 11.1(vi)):

            	
               

              $

            
	
              (viii)  Cash
                of the Companies:

            	
              $

            
	
              (ix)  Minus
                cash of the Unrestricted Subsidiaries (the sum of items
                11.1(ix)(A)
                through 11.1(ix)(W)
                below):

            	
              ($_____________)

            
	 	 
	
              (A) SSI
                Venture LLC (weighted average of the membership interest not held
                by a
                Company) (if SSI is not a Restricted Subsidiary)

            	
               

               

              ($_____________)

            
	
              (B) Eagle
                Park Reservoir Company

            	
              ($_____________)

            
	
              (C) Boulder/Beaver,
                LLC

            	
              ($_____________)

            
	
              (D) Colter
                Bay Corporation

            	
              ($_____________)

            
	
              (E) Gros
                Ventre Utility Company

            	
              ($_____________)

            
	
              (F) Jackson
                Lake Lodge Corporation

            	
              ($_____________)

            
	
              (G) Jenny
                Lake Lodge, Inc.

            	
              ($_____________)

            
	
              (H) Forest
                Ridge Holdings, Inc.

            	
              ($_____________)

            
	
              (I) Resort
                Technology Partners, LLC

            	
              ($_____________)

            
	
              (J) RT
                Partners, Inc.

            	
              ($_____________)

            
	
              (K) Arrabelle
                at Vail Square, LLC

            	
              ($_____________)

            
	
              (L) Gore
                Creek Place, LLC

            	
              ($_____________)

            
	
              (M) The
                Chalets at the Lodge at Vail, LLC

            	
              ($_____________)

            
	
              (N) RCR
                Vail, LLC

            	
              ($_____________)

            
	
              (O)  Colter
                Bay Convenience Store, LLC

            	
              ($_____________)

            
	
              (P)  Colter
                Bay General Store, LLC

            	
              ($_____________)

            
	
              (Q)  Colter
                Bay Marina, LLC

            	
              ($_____________)

            
	
              (R)  Colter
                Bay Cafe Court, LLC

            	
              ($_____________)

            
	
              (S)  Jenny
                Lake Store, LLC

            	
              ($_____________)

            
	
              (T)  Jackson
                Hole Golf & Tennis Club Snack Bar, LLC

            	
              ($_____________)

            
	
              (U)  Stampede
                Canteen, LLC

            	
              ($_____________)

            
	
              (V)  Crystal
                Peak Lodge of Breckenridge, Inc.

            	
              ($_____________)

            
	
              (W)  Hunkidori
                Land Company, LLC

            	
              ($_____________)

            
	
              (x)  Investments
                of the Companies in marketable obligations issued or unconditionally
                guaranteed by the U.S. or issued by any of its agencies and backed
                by the
                full faith and credit of the U.S., in each case maturing within one
                year
                from the date of acquisition:

               

            	
               

               

               

              $

            
	
              (xi)  Investments
                of the Companies in short-term
                investment grade domestic and eurodollar certificates of deposit
                or time
                deposits that are fully insured by the Federal Deposit Insurance
                Corporation or are issued by commercial banks organized under the
                Laws of
                the U.S. or any of its states having combined capital, surplus, and
                undivided profits of not less than $100,000,000 (as shown on its
                most
                recently published statement of condition):

            	
               

               

               

              $

            
	
              (xii)  Investments
                of the Companies in commercial paper and similar obligations rated
                “P-1”
                by
                Moody’s or “A-1”
                by
                S&P:

            	
               

               

              $

            
	
              (xiii) Investments
                of the Companies in readily marketable Tax-free municipal bonds of
                a
                domestic issuer rated “A-2”
                or
                better by Moody’s or “A”
                or
                better by S&P, and maturing within one year from the date of
                issuance:

            	
               

               

               

              $

            
	
              (xiv)  Investments
                of the Companies in mutual funds or money market  accounts
                investing primarily in items described in items
                11.1(x)  through
                (xiii)
                above:

            	
               

              $

            
	
              (xv)
                 Investments
                of the Companies in demand deposit accounts maintained in the ordinary
                course of business: 

            	
               

              $

            
	
              (xvi)
                 Investments
                of the Companies in short-term repurchase agreements with major banks and
                authorized dealers, fully collateralized to at least 100% of market
                value
                by marketable obligations issued or unconditionally guaranteed by
                the U.S.
                or issued by any of its agencies and backed by the full faith and
                credit
                of the U.S.: 

            	
               

               

               

               

              $

            
	
              (xvii)
                 Investments
                of the Companies in short-term variable rate demand notes that invest
                in
                tax-free municipal bonds of domestic issuers rated “A-2”
                or better by Moody’s or “A”
                or better by S&P that are supported by irrevocable letters of credit
                issued by commercial banks organized under the laws of the U.S. or
                any of
                its states having combined capital, surplus, and undivided profits
                of not
                less than $100,000,000:

            	
               

               

               

               

               

               

              $

            
	
              (xviii) Temporary
                Cash Investments of the Companies (11.1(x)
                plus 11.1(xi)
                plus 11.1(xii) plus 11.1(xiii)
                plus 11.1(xiv)
                plus 11.1(xv)
                plus 11.1(xvi) plus 11.1(xvii)):

            	
               

               

              $

            
	
              (xix) Minus
                Temporary Cash Investments of the Unrestricted  Subsidiaries
                (the sum of items
                11.1(xix)(A)
                through 11.1(xix)(W)  below):

            	
               

               

              ($_____________)

            
	
              (A) SSI
                Venture LLC (weighted average of the membership interest not held
                by a
                Company) (if SSI is not a Restricted Subsidiary)

            	
               

               

              ($_____________)

            
	
              (B) Eagle
                Park Reservoir Company

            	
              ($_____________)

            
	
              (C) Boulder/Beaver,
                LLC

            	
              ($_____________)

            
	
              (D) Colter
                Bay Corporation

            	
              ($_____________)

            
	
              (E) Gros
                Ventre Utility Company

            	
              ($_____________)

            
	
              (F) Jackson
                Lake Lodge Corporation

            	
              ($_____________)

            
	
              (G) Jenny
                Lake Lodge, Inc.

            	
              ($_____________)

            
	
              (H) Forest
                Ridge Holdings, Inc.

            	
              ($_____________)

            
	
              (I) Resort
                Technology Partners, LLC

            	
              ($_____________)

            
	
              (J) RT
                Partners, Inc.

            	
              ($_____________)

            
	
              (K) Arrabelle
                at Vail Square, LLC

            	
              ($_____________)

            
	
              (L) Gore
                Creek Place, LLC

            	
              ($_____________)

            
	
              (M) The
                Chalets at the Lodge at Vail, LLC

            	
              ($_____________)

            
	
              (N) RCR
                Vail, LLC

            	
              ($_____________)

            
	
              (O)  Colter
                Bay Convenience Store, LLC

            	
              ($_____________)

            
	
              (P)  Colter
                Bay General Store, LLC

            	
              ($_____________)

            
	
              (Q)  Colter
                Bay Marina, LLC

            	
              ($_____________)

            
	
              (R)  Colter
                Bay Cafe Court, LLC

            	
              ($_____________)

            
	
              (S)  Jenny
                Lake Store, LLC

            	
              ($_____________)

            
	
              (T)  Jackson
                Hole Golf & Tennis Club Snack Bar, LLC

            	
              ($_____________)

            
	
              (U)  Stampede
                Canteen, LLC

            	
              ($_____________)

            
	
              (V)  Crystal
                Peak Lodge of Breckenridge, Inc.

            	
              ($_____________)

            
	
              (W)  Hunkidori
                Land Company, LLC

            	
              ($_____________)

            
	
              (xx) Unrestricted
                Cash of the Restricted Companies (11.1(viii)
                minus    11.1(ix) plus 11.1(xviii)
                minus 11.1(xix)):

            	
               

              $

            
	
              (xxi) Unrestricted
                Cash of the Restricted Companies in excess of  $10,000,000:

            	
               

              $

            
	
              (xxii) Net
                Funded Debt (11.1(vii) minus
                11.1(xxi)):

            	
              $

            
	
              (xxiii) EBITDA
                of the Companies for the last four fiscal quarters:

            	
              $

            
	
              (xxiv) Plus
                insurance proceeds (up to a maximum of $10,000,000 in the aggregate
                for
                any fiscal year) received by the Restricted Companies under policies
                of
                business interruption insurance (or under policies of insurance which
                cover losses or claims of the same character or type):

            	
               

               

               

               

              $

            
	
               

              (xxv) Plus pro
                forma
                EBITDA for assets acquired during such period:

            	
               

              $

            
	
               

              (xxvi) Minus pro
                forma EBITDA
                for assets disposed of during such period:

            	
               

               

              ($_____________)

            
	
               

              (xxvii) Minus
                EBITDA for such period attributable to the following Unrestricted
                Subsidiaries (sum of items 11.1(xxvii)(A)
                through 11.1(xxvii)(W)
                below):

            	
               

               

               

              ($_____________)

            
	
              (A) SSI
                Venture LLC (weighted average of the membership interest not held
                by a
                Company) (if SSI is not a Restricted Subsidiary)

            	
               

               

              ($_____________)

            
	
              (B) Eagle
                Park Reservoir Company

            	
              ($_____________)

            
	
              (C) Boulder/Beaver,
                LLC

            	
              ($_____________)

            
	
              (D) Colter
                Bay Corporation

            	
              ($_____________)

            
	
              (E) Gros
                Ventre Utility Company

            	
              ($_____________)

            
	
              (F) Jackson
                Lake Lodge Corporation

            	
              ($_____________)

            
	
              (G) Jenny
                Lake Lodge, Inc.

            	
              ($_____________)

            
	
              (H) Forest
                Ridge Holdings, Inc.

            	
              ($_____________)

            
	
              (I) Resort
                Technology Partners, LLC

            	
              ($_____________)

            
	
              (J) RT
                Partners Inc.

            	
              ($_____________)

            
	
              (K) Arrabelle
                at Vail Square, LLC

            	
              ($_____________)

            
	
              (L) Gore
                Creek Place, LLC

            	
              ($_____________)

            
	
              (M) The
                Chalets at the Lodge at Vail, LLC

            	
              ($_____________)

            
	
              (N) RCR
                Vail, LLC

            	
              ($_____________)

            
	
              (O)  Colter
                Bay Convenience Store, LLC

            	
              ($_____________)

            
	
              (P)  Colter
                Bay General Store, LLC

            	
              ($_____________)

            
	
              (Q)  Colter
                Bay Marina, LLC

            	
              ($_____________)

            
	
              (R)  Colter
                Bay Cafe Court, LLC

            	
              ($_____________)

            
	
              (S)  Jenny
                Lake Store, LLC

            	
              ($_____________)

            
	
              (T)  Jackson
                Hole Golf & Tennis Club Snack Bar, LLC

            	
              ($_____________)

            
	
              (U)  Stampede
                Canteen, LLC

            	
              ($_____________)

            
	
              (V)  Crystal
                Peak Lodge of Breckenridge, Inc.

            	
              ($_____________)

            
	
              (W)  Hunkidori
                Land Company, LLC

            	
              ($_____________)

            
	
              (xxviii) Adjusted
                EBITDA (11.1(xxiii) plus 11.1(xxiv)
                plus
                11.1(xxv) minus 11.1(xxvi)
                minus 11.1(xxvii)):

            	
               

              $

            
	
              (xxix) Ratio
                of Net Funded Debt to Adjusted EBITDA 

              (Ratio
                of 11.1(xxii)
                to
                11.1(xxviii)):

            	 
	
               

              (xxx) Maximum
                ratio of Net Funded Debt to Adjusted EBITDA permitted: 

            	
               

              4.50
                : 1.00

            
	
              (xxxi) Is
                the ratio of Net Funded Debt to Adjusted EBITDA less than the maximum
                ratio permitted?

            	
               

              Yes/No

            
	
               

              11.2 [RESERVED]

            	 
	 	 
	
              11.3 MINIMUM
                NET WORTH:

            	 
	
              (a) Shareholders’
                Equity determined in accordance with GAAP:

            	
              $

            
	
              (b) $414,505,800:

            	
              $414,505,800

            
	
              (c) Restricted
                Companies’ Net Income, if positive, for each fiscal year completed after
                October 31, 2004:

            	
               

              $

            
	
              (d) 75%
                of the total from 11.3(c):

            	
              $

            
	
              (e) Net
                Proceeds received by any Restricted Company (other than from another
                Company) from the offering, issuance, or sale of equity securities
                of a
                Restricted Company after  October
                31, 2004:

            	
               

               

              $

            
	
              (f) Minimum
                shareholders’ equity permitted

              (11.3(b) plus 11.3(d) plus 11.3(e)):

            	
               

              $

            
	
              (g) Does
                Shareholders’ Equity exceed the minimum permitted?

            	
              Yes/No

            
	
               

              11.4 INTEREST
                COVERAGE RATIO

            	 
	
              (a) Adjusted
                EBITDA for the last four fiscal quarters (11.1(xxviii)):

            	
              $

            
	
               

              (b) Interest
                on Funded Debt for the last four fiscal quarters:

            	
               

              $

            
	
              (c)
                Amortization of deferred financing costs and original issue
                discounts:

            	
               

              $

            
	
               

              (d)
                11.4(b) minus 11.4(c):

            	
               

              $

            
	
               

              (e) Interest
                Coverage Ratio (Ratio of 11.4(a)
                to
                11.4(d)):

            	 
	
               

              (f) Minimum
                Interest Coverage Ratio permitted:

            	
               

              2.50
                : 1.00

            
	
               

              (g) Does
                the Interest Coverage Ratio exceed the minimum ratio
                permitted?

            	
               

               

              Yes/No

            
	
               

              11.5 CAPITAL
                EXPENDITURES

            	 
	
               

              (a) Aggregate
                capital expenditures of the Restricted Companies in the ordinary
                course of
                the business (excluding (i) normal replacements and maintenance which
                are
                properly charged to current operations, and (ii) such expenditures
                relating to real estate held for resale) during each fiscal
                year:

            	
               

               

               

               

               

              $

            
	
               

              (b) Total
                Assets of the Restricted Companies as of the last day of the fiscal
                year:

            	
               

               

              $

            
	
               

              (c) Maximum
                capital expenditures permitted (10% of Total Assets of the Restricted
                Companies set forth in 11.5(b)):

            	
               

               

              $

            
	
              (d) Are
                aggregate capital expenditures less than the maximum amount
                permitted?

            	
               

              Yes/No

            
	 	 
	
              LETTERS
                OF CREDIT

            	 
	 	 
	
              Set
                forth on Schedule
                1
                attached hereto is a list of all issued and outstanding letters of
                credit
                issued for the account of any of the Companies, and the drawn and
                undrawn
                amounts thereunderExhibit 10.3

    
      

    

    Exhibit
      10.3

    

    NOTE:
      THIS DOCUMENT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST PURSUANT TO
      RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. PORTIONS
      OF
      THIS DOCUMENT FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED HAVE BEEN
      REDACTED AND ARE MARKED HEREIN BY “[***]”. SUCH REDACTED INFORMATION HAS
      BEEN FILED SEPARATELY WITH THE COMMISSION PURSUANT TO THE CONFIDENTIAL TREATMENT
      REQUEST.

     

     

     

    CONSTRUCTION
      LOAN AGREEMENT

     

    dated
      as of 

     

    March
      19, 2007

     

    among

     

    THE
      CHALETS AT THE LODGE AT VAIL, LLC,

     

    The
      LENDERS Party hereto,

     

    and

     

    WELLS
      FARGO BANK, NATIONAL ASSOCIATION,

     

    as
      Administrative Agent and Book Manager

     

    _______________________________

     

    $123,000,000

    _______________________________

     

    

     

    WELLS
      FARGO BANK, NATIONAL ASSOCIATION and 

     

    U.S.
      BANK NATIONAL ASSOCIATION

     

    Joint
      Lead Arrangers

     

    

     

    U.S.
      BANK NATIONAL ASSOCIATION

     

    Syndication
      Agent

     

     

    

    
      
        
          

        

        
        

      

      
        
        

        
        

      

      
        
        

        
        

      

    

    TABLE
      OF CONTENTS

    

    Page

    ARTICLE
      I
      DEFINITIONS AND ACCOUNTING MATTERS    1

    1.1 Certain
      Defined Terms        1

    1.2 Accounting
      Terms and Determinations      27

    1.3 Terms
      Generally         27

    1.4 Additional
      Defined Terms        27

    ARTICLE
      II THE LOAN FACILITY       29

    2.1 Loans.           29

    2.2 Borrowings;
      Certain Notices.        29

    2.3 Changes
      to Commitments.        34

    2.4 Lending
      Offices         35

    2.5 Several
      Obligations; Remedies Independent      35

    2.6 Notes           35

    2.7 Conversion
      and Continuations of Loans.      35

    ARTICLE
      III PAYMENTS OF INTEREST AND PRINCIPAL    36

    3.1 Interest.          36

    3.2 Repayment
      of Loans         36

    3.3 Late
      Charge          37

    3.4 Optional
      Prepayments         37

    3.5 Mandatory
      Prepayments.        37

    3.6 Interest
      and Other Charges on Prepayment      40

    3.7 Lender's
      Records as to Sums Owing       40

    3.8 Application
      of Payments Received       40

    3.9 Sharing
      of Payments, Etc.        40

    ARTICLE
      IV EXTENSION OF THE MATURITY DATE     41

    4.1 Extension
      of Scheduled Maturity Date      41

    ARTICLE
      V
      INCREASED COSTS, LIBOR AVAILABILITY, ILLEGALITY, ETC. 42

    5.1 Costs
      of
      Making or Maintaining LIBOR Rate Loans     42

    5.2 Limitation
      on LIBOR Rate Loans; LIBOR Not Available    43

    5.3 Illegality          43

    5.4 Treatment
      of Affected Loans        43

    5.5 Compensation          44

    5.6 Additional
      Waivers         45

    5.7 Taxes.           45

    ARTICLE
      VI CONDITIONS PRECEDENT       46

    6.1 Conditions
      Precedent to Closing and the Effectiveness of Commitments  46

    6.2 Conditions
      Precedent to the Making of any Loans     48

    6.3 Conditions
      Precedent to the Final Loans      49

    ARTICLE
      VII DISBURSEMENT OF THE LOANS; LOAN BALANCING  50

    7.1 General
      Conditions.         50

    7.2 Loan
      Balancing.         51

    7.3 Project
      Budget Line-Items; Loans to be Used for Specific Line-Items.  52

    7.4 Project
      Budget Contingencies.       53

    7.5 Interest;
      Fees; and Expenses.        54

    7.6 Retainage.          54

    7.7 Unsatisfactory
      Work         55

    7.8 No
      Waiver
      or Approval by Reason of Loan Advances    55

    7.9 Construction
      Consultant        56

    7.10 Authorization
      to Make Loan Advances to Cure Borrower's Defaults  56

    7.11 Administrative
      Agent's Right to Make Loan Advances in Compliance with the Completion Guaranty
      and Development Agreement Guaranty    56

    7.12 No
      Third-Party Benefit        57

    7.13 Payments
      for Spa Project        57

    ARTICLE
      VIII REPRESENTATIONS AND WARRANTIES    57

    8.1 Organization;
      Powers         57

    8.2 Authorization;
      Enforceability        57

    8.3 Government
      Approvals; No Conflicts      58

    8.4 Financial
      Condition         58

    8.5 Litigation          58

    8.6 ERISA           58

    8.7 Taxes           58

    8.8 Investment
      and Holding Company Status      59

    8.9 Environmental
      Matters        59

    8.10 Organizational
      Structure.        60

    8.11 Title.           60

    8.12 No
      Bankruptcy Filing         61

    8.13 Executive
      Offices; Places of Organization      61

    8.14 Compliance;
      Government Approvals       61

    8.15 Condemnation;
      Casualty        62

    8.16 Utilities
      and Public Access; No Shared Facilities     62

    8.17 Solvency          62

    8.18 Governmental
      Regulations        62

    8.19 No
      Joint
      Assessment; Separate Lots       62

    8.20 Security
      Documents and Liens       62

    8.21 Project
      Documents         63

    8.22 Material
      Agreements         63

    8.23 Project
      Budget          63

    8.24 Insurance          63

    8.25 Flood
      Zone          63

    8.26 Boundaries          63

    8.27 Illegal
      Activity         64

    8.28 Permitted
      Liens         64

    8.29 Anti-Terrorism
      Laws.         64

    8.30 Defaults          64

    8.31 Design
      Professionals' Certificates       64

    8.32 Other
      Representations         65

    8.33 Loan
      In
      Balance         65

    8.34 Employee
      Benefit Plans        65

    8.35 No
      Construction         65

    8.36 Appraisal          65

    8.37 Labor
      Controversies         65

    8.38 Insider           65

    8.39 True
      and
      Complete Disclosure       65

    8.40 Survival
      of Representations        66

    ARTICLE
      IX AFFIRMATIVE COVENANTS OF BORROWER    66

    9.1 Information          66

    9.2 Notices
      of Material Events        67

    9.3 Existence,
      Etc.          67

    9.4 Compliance
      with Laws; Adverse Regulatory Changes.    68

    9.5 Insurance.          68

    9.6 Real
      Estate Taxes and Other Charges.      69

    9.7 Further
      Assurances         70

    9.8 Performance
      of Project Documents, Material Agreements, and Easements.  70

    9.9 Performance
      of the Loan Documents       71

    9.10 Books
      and
      Records; Inspection Rights      71

    9.11 Environmental
      Compliance.        71

    9.12 Reserves          72

    9.13 Accessibility
      Laws.         73

    9.14 Use
      of
      Proceeds; Margin Regulations.      73

    9.15 Inspection          74

    9.16 Project
      Construction.         74

    9.17 Proceedings
      to Enjoin or Prevent Construction     75

    9.18 Administrative
      Agent's, Lenders' and Construction Consultant's Actions for their Own Protection
      Only          76

    9.19 Sign
      and
      Publicity         76

    9.20 On-Site
      and Off-Site Materials       76

    9.21 Minimum
      Loan Coverage Ratio       77

    9.22 Loan
      to
      Value and Loan to Cost       77

    9.23 Leasing.          78

    9.24 Club
      Memberships         78

    ARTICLE
      X
      NEGATIVE COVENANTS OF BORROWER    78

    10.1 Fundamental
      Change.         79

    10.2 Limitation
      on Liens         79

    10.3 Transfer;
      Pledge.         79

    10.4 Indebtedness          80

    10.5 Investments          81

    10.6 Restricted
      Payments         81

    10.7 Change
      of
      Organization Structure; Location of Principal Office   81

    10.8 Transactions
      with Affiliates        81

    10.9 No
      Joint
      Assessment; Separate Lots       81

    10.10 Zoning           81

    10.11 ERISA           82

    10.12 Amendment
      of Contracts and Government Approvals    82

    10.13 Change
      Orders; Purchaser Upgrades.       82

    10.14 Special
      Districts/Sales Tax Increment Financing     83

    10.15 Anti-Terrorism
      Law         84

    ARTICLE
      XI INSURANCE OR CONDEMNATION AWARDS    84

    11.1 Casualties
      and Condemnations.       84

    11.2 Insurance
      Proceeds and Condemnation Awards.     84

    11.3 Application
      of Insurance Proceeds and Condemnation Awards.   86

    ARTICLE
      XII EVENTS OF DEFAULT       87

    12.1 Events
      of
      Default         87

    12.2 Remedies          91

    ARTICLE
      XIII ADMINISTRATIVE AGENT      93

    13.1 Appointment,
      Powers and Immunities      93

    13.2 Reliance
      by Administrative Agent       94

    13.3 Borrower
      Defaults.         95

    13.4 Rights
      as
      a Lender         97

    13.5 Indemnification         97

    13.6 Non-Reliance
      on Administrative Agent and Other Lenders    97

    13.7 Failure
      to Act          98

    13.8 Resignation
      and Removal of Administrative Agent.     98

    13.9 Consents
      and Certain Actions under, and Modifications of, Loan Documents. 99

    13.10 Authorization          101

    13.11 Defaulting
      Lenders.         102

    13.12 Amendments
      Concerning Agency Functions      105

    13.13 Liability
      of Administrative Agent       105

    13.14 Transfer
      of Agency Function        105

    13.15 Sharing
      of Payments, Etc.        105

    13.16 Bankruptcy
      of Borrower        106

    13.17 Termination          106

    ARTICLE
      XIV MISCELLANEOUS        106

    14.1 Non-Waiver;
      Remedies Cumulative       106

    14.2 Notices.              107

    14.3 Expenses,
      Etc.             108

    14.4 Indemnification         108

    14.5 Amendments,
      Etc.         109

    14.6 Successors
      and Assigns        109

    14.7 Assignments
      and Participations.       109

    14.8 Survival          110

    14.9 Multiple
      Copies         110

    14.10 Right
      of
      Set-off.         110

    14.11 Brokers          111

    14.12 Estoppel
      Certificates.         111

    14.13 Preferences          112

    14.14 Certain
      Waivers         112

    14.15 Entire
      Agreement         112

    14.16 Severability          112

    14.17 Captions          113

    14.18 Counterparts          113

    14.19 GOVERNING
      LAW         113

    14.20 SUBMISSION
      TO JURISDICTION       113

    14.21 WAIVER
      OF
      JURY TRIAL; COUNTERCLAIM     113

    14.22 Confidentiality         114

    14.23 Usury
      Savings Clause         115

    14.24 Controlled
      Accounts         115

    14.25 Financing
      Statements         116

    14.26 Unavoidable
      Delay         116

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    EXHIBITS
      AND SCHEDULES

    

    

    

    Exhibits

    

    Exhibit
      A: Legal
      Description

    Exhibit
      B: Project
      Budget

    Exhibit
      C: Commitment
      Amounts and Percentage

    Exhibit
      D: Qualified
      Purchase Contracts

    Exhibit
      E: Plans
      and
      Specifications

    Exhibit
      F: Loan
      Par
      Value

    Exhibit
      G: Request
      for Continuation or Conversion

    Exhibit
      H: Request
      for Loan Advance

    Exhibit
      I: Form
      of
      Deposit Letter of Credit

    Exhibit
      J: Transfer
      Authorizer Designation

    Exhibit
      K: Anticipated
      Encumbrances

    

    

    Schedules

    

    Schedule
      6.1:  Closing
      Conditions

    Schedule
      6.2:  Conditions
      to Loans

    Schedule
      6.3:  Conditions
      to Final Loans

    Schedule
      8.5:  Pending
      Litigation

    Schedule
      8.10:  Organization
      Chart

    Schedule
      8.14:  Government
      Approvals

    Schedule
      9.5:  Insurance
      Requirements

    

    

    

    CONSTRUCTION
      LOAN AGREEMENT

     

     

    This
      CONSTRUCTION LOAN AGREEMENT is dated as of March 19, 2007, by and among THE
      CHALETS AT THE LODGE AT VAIL, LLC, a Colorado limited liability company (the
      "Borrower");
      each
      of the lenders that is a signatory hereto identified under the caption "LENDERS"
      on the signature pages hereto (individually, a "Lender"
      and,
      collectively, the "Lenders");
      and
      WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association
      ("Wells
      Fargo"),
      as
      contractual representative of the Lenders to the extent and in the manner
      provided in Article
      XIII
      hereof
      (in such capacity, the "Administrative
      Agent").

     

    RECITALS

     

    1. Borrower
      is the fee owner of that certain real property located in the County of Eagle,
      State of Colorado and being more fully described in Exhibit
      A
      attached
      hereto (the "Land").

     

    2. Borrower
      proposes to construct the Improvements (as hereinafter defined) on the Land
      and,
      in connection therewith has requested and applied to the Lenders for a loan
      in
      the amount of One Hundred Twenty-Three Million and No/100 Dollars
      ($123,000,000.00) or such other amount as may be permitted by the terms hereof
      for the purposes of paying certain costs pertaining thereto. The Lenders have
      agreed to make such loans on and subject to the terms and conditions hereinafter
      set forth.

     

    NOW,
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which is hereby acknowledged, the parties hereto agree as follows:

     

    ARTICLE
      I  

     

    

     

    DEFINITIONS
      AND ACCOUNTING MATTERS

     

    1.1  Certain
      Defined Terms

     

    .
      As used
      herein, the following terms shall have the following meanings (all terms defined
      in this Section 1.1
      or in
      other provisions of this Agreement in the singular shall have the same meanings
      when used in the plural and vice versa):

     

    "Accessibility
      Laws"
      shall
      mean the Americans with Disabilities Act of 1990, as amended from time to time,
      and any similar state or local laws, rules or regulations relating to the
      accessibility of buildings or facilities.

     

    "Administrative
      Agent"
      shall
      have the meaning assigned to such term in the preamble.

     

    "Administrative
      Agent's Account"
      shall
      mean the account maintained by Administrative Agent with such bank as may from
      time to time be specified by Administrative Agent.

     

    "Affiliate"
      shall
      mean, with respect to any Person, another Person that directly or indirectly
      controls, or is under common control with, or is controlled by, such Person
      and,
      if such Person is an individual, any member of the immediate family (including
      parents, spouse, children and siblings) of such individual and any trust whose
      principal beneficiary is such individual or one or more members of such
      immediate family and any Person who is controlled by any such member or trust.
      In no event shall the Administrative Agent or any Lender be deemed to be an
      Affiliate of Borrower.

     

    "Agency
      Fee"
      shall
      mean any agency fees agreed to by Borrower and Administrative
      Agent.

     

    "Agreement"
      shall
      mean this Construction Loan Agreement, as the same may be Modified from time
      to
      time.

     

    "Anticipated
      Encumbrances"
      shall
      mean those encumbrances, easements and agreements first appearing after the
      date
      hereof that Borrower reasonably anticipates will be required to obtain final
      Government Approval of the Project or for the sale or operation of the Project.
      No encumbrance, easement or agreement materially adversely affecting the Project
      may be an "Anticipated Encumbrance." Anticipated Encumbrances may include,
      without limitations, the Condominium Declaration, Condominium Map and other
      matters contemplated by the Subdivision Agreement, certain easements required
      for access and other encumbrances contemplated by the Development Agreement
      with
      the Town of Vail. The list of certain of the Anticipated Encumbrances is set
      forth in Exhibit
      K
      attached
      hereto.

     

    "Anti-Terrorism
      Laws"
      shall
      mean any Applicable Laws relating to terrorism or money laundering, including,
      but not limited to, the Anti-Terrorism Order and the Uniting and Strengthening
      America by Providing Appropriate Tools Required to Intercept and Obstruct
      Terrorism Act of 2001, Public Law 107-56.

     

    "Anti-Terrorism
      Order"
      shall
      mean Executive Order No. 13,224, 66 Fed. Reg. 49,079 (2001), issued by the
      President of the United States of America (Executive Order Blocking Property
      and
      Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
      Terrorism).

     

    "Applicable
      Law"
      shall
      mean any statute, law, regulation, ordinance, rule, judgment, rule of common
      law, order, decree, Government Approval, approval, concession, grant, franchise,
      license, agreement, directive, guideline, policy, requirement, or other
      governmental restriction or any similar form of decision of, or determination
      by, or any interpretation or administration of any of the foregoing by, any
      Governmental Authority, whether now or hereinafter in effect and, in each case,
      as amended (including any thereof pertaining to land use, zoning and building
      ordinances and codes).

     

    "Applicable
      Interest Rate"
      shall
      mean, subject to Section 14.23
      below,
      with respect to any Loan, (a) the LIBOR-Based Rate, (b) the Base Rate, or (c)
      during the existence of any Event of Default, the Default Rate.

     

    "Applicable
      Lending Office"
      shall
      mean, for each Lender, the "Lending Office" of such Lender (or of an Affiliate
      of such Lender) designated by such Lender from time to time in writing to
      Administrative Agent.

     

    "Applicable
      Margin"
      shall
      mean 145 basis points; provided, however, that upon the receipt, review and
      approval by Administrative Agent of Qualified Purchase Contracts for all
      thirteen (13) Units comprising the Residential Component, the Applicable Margin
      shall mean 135 basis points.

     

    "Appraisal"
      shall
      mean the appraisal report of the Project from the Appraiser dated February
      4,
      2007, and any future appraisal of the Project ordered by Administrative Agent
      and prepared by an Appraiser, which Appraisal must comply in all respects with
      the standards for real estate appraisal established pursuant to Title XI of
      the
      Financial Institutions Reform, Recovery, and Enforcement Act of 1989, and
      otherwise in form and substance satisfactory to Administrative
      Agent.

     

    "Appraised
      Land Value"
      shall
      mean the "as-is" appraised value of the Land only as determined by the Appraisal
      dated February 4, 2007, which amount is Twenty-Four Million Dollars
      ($24,000,000.00). 

     

    "Appraised
      Value"
      shall
      mean the sum of the values of the Residential and Commercial Components as
      determined by the Appraisal. With respect to the Residential Component, the
      Appraised Value is the bulk discounted value to a single user "upon completion"
      of the Project, which amount, based upon the Appraisal, is One Hundred
      Forty-Four Million Seven Hundred Thousand Dollars ($144,700,000.00), and with
      respect to the Commercial Component, the Appraised Value is the value "upon
      completion" of construction, which amount is Seventy-Two Million Dollars
      ($72,000,000.00), as determined pursuant to the Appraisal.

     

    "Appraiser"
      shall
      mean National Valuation Consultants, Inc., or any other "state certified general
      appraiser" as such term is defined and construed under applicable regulations
      and guidelines issued pursuant to Title XI of the Financial Institutions Reform,
      Recovery, and Enforcement Act of 1989, which appraiser must have been licensed
      and certified by the applicable Governmental Authority having jurisdiction
      in
      the state where the Project is located, and which appraiser shall have been
      selected by Administrative Agent.

     

    "Architecture
      Agreement"
      shall
      mean that certain agreement entitled Architectural Work Release Agreement dated
      May 1, 2003, between 42|40
      Architecture Inc., and The Vail Corporation, as assigned to Borrower on November
      1, 2006.

     

    "Assignment
      and Assumption"
      shall
      mean an Assignment and Assumption, duly executed by the parties thereto and
      consented to by Borrower and Administrative Agent in accordance with Section
      14.7(b).

     

    "Assignment
      of Architectural Agreements"
      shall
      mean that certain Assignment of Architectural Agreements and Plans and
      Specifications of even date herewith, and the "Architect's Consent" of even
      date
      herewith executed by Borrower, and the Borrower's Architect, in favor of
      Administrative Agent, for the benefit of the Lenders, as the same may be
      Modified.

     

    "Assignment
      of Borrower's Rights in Purchase Contracts"
      shall
      mean that certain Assignment of Borrower's Rights in Purchase Contracts of
      even
      date herewith, executed by the Borrower in favor of the Administrative Agent,
      for the benefit of the Lenders, as the same may be Modified.

     

    "Assignment
      of Construction Agreements"
      shall
      mean that certain Assignment of Construction Agreements, and the "Contractor's
      Consent" attached thereto, of even date herewith executed by Borrower, and
      the
      General Contractor, in favor of Administrative Agent, for the benefit of the
      Lenders, as the same may be Modified.

     

    "Authorized
      Officer"
      shall
      mean, (a) with respect to any Person, any authorized officer of such Person
      whose name appears on a certificate of incumbency delivered concurrently with
      the execution of this Agreement, as such certificate of incumbency may be
      amended from time to time to identify the names of the individuals then holding
      such offices, and (b) with respect to Borrower, its Managing Member.

     

    "Available
      Contingency Amount"
      shall
      mean an amount equal to the applicable percentage of the Contingency Fund
      available to Borrower for reallocation as set forth in Section 7.3(b)
      during
      each phase of Project Completion as follows: (a) 0% - 25% complete 25% shall
      be
      available, (b) 26 - 50% complete 50% shall be available, (c) 51% - 75% complete
      75% shall be available, and (d) 76% - 100% complete 100% shall be available.
      The
      percentage of Completion shall be as determined by Administrative Agent and
      the
      Construction Consultant in their reasonable discretion.

     

    "Bankruptcy
      Action"
      shall
      mean, as to any Person, (a) an involuntary proceeding shall be commenced or
      an
      involuntary petition shall be filed, seeking (i) liquidation, reorganization
      or
      other relief in respect of such Person or its debts, or of a substantial part
      of
      its assets, under any Federal, state or foreign bankruptcy, insolvency,
      receivership or similar law now or hereafter in effect or (ii) the appointment
      of a receiver, trustee, custodian, sequestrator, conservator or similar official
      for such Person or for a substantial part of its assets, and, in any such case,
      such proceeding or petition shall continue undismissed for a period of sixty
      (60) days or an order or decree approving or ordering any of the foregoing
      shall
      be entered; or (b) any Person shall (i) voluntarily commence any proceeding
      or
      file any petition seeking liquidation, reorganization or other relief under
      any
      Federal, state or foreign bankruptcy, insolvency, receivership or similar law
      now or hereafter in effect, (ii) consent to the institution of, or fail to
      contest in a timely and appropriate manner, any proceeding or petition described
      in clause (a) above, (iii) apply for or consent to the appointment of a
      receiver, trustee, custodian, sequestrator, conservator or similar official
      of
      such Person or for a substantial part of any of their assets, (iv) file an
      answer admitting the allegations of a petition filed against it in any such
      proceeding, (v) make a general assignment for the benefit of creditors or (vi)
      take any action for the purpose of effecting any of the foregoing.

     

    "Bankruptcy
      Code"
      shall
      mean the Federal Bankruptcy Code of 1978, as amended from time to
      time.

     

    "Base
      Building Work"
      shall
      mean all of that certain work to be performed by Borrower and/or its contractors
      constituting construction of the Improvements as more particularly described
      in
      the Plans and Specifications (except for (i) minor Punch List Items that do
      not
      adversely affect the use, occupancy or operation of the Project and (ii) tenant
      improvements to rentable space in the Commercial Component that is not yet
      occupied.)

     

    "Base
      Rate"
      shall
      mean, for any day, a rate per annum equal to the greater of the (a) Prime Rate
      for such day, and (b) the Federal Funds Rate in effect on that day as announced
      by the Federal Reserve Bank of New York, plus 0.5%. Each change in any interest
      rate provided for herein based upon the Base Rate resulting from a change in
      the
      Base Rate shall take effect at the time of such change in the Base
      Rate.

     

    "Base
      Rate Loans"
      shall
      mean the portions of the Outstanding Principal Amount that bear interest at
      the
      Base Rate.

     

    "Borrower"
      shall
      have the meaning assigned to such term in the preamble. 

     

    "Borrower
      Party"
      shall
      mean each of Borrower and Guarantor.

     

    "Borrower's
      Account"
      shall
      mean an account maintained by Borrower with Wells Fargo Bank, National
      Association as may from time to time be specified by or approved by
      Administrative Agent to accept the deposit of loan advances in accordance with
      this Agreement.

     

    "Borrower's
      Architect"
      shall
      mean 42|40
      Architecture Inc., or any replacement thereof approved by Administrative
      Agent.

     

    "Business
      Day"
      shall
      mean any day that is not a Saturday, Sunday or other day on which commercial
      banks in Colorado and California are authorized or required by law to remain
      closed; provided
      that,
      when used in connection with a borrowing, or Continuation of, or Conversion
      into, a payment or prepayment of principal of or interest on, or an Interest
      Period for, a LIBOR Rate Loan, or a notice by Borrower with respect to any
      such
      borrowing, Continuation, Conversion, payment, prepayment or Interest Period,
      the
      term "Business Day" shall also exclude any day on which banks are not open
      for
      dealings in dollar deposits in the London interbank market. Unless specifically
      referenced in this Agreement as a Business Day, all references to "days" shall
      be to calendar days.

     

    "Casualty"
      shall
      mean any loss of or damage to, any portion of the Project by fire or other
      casualty.

     

    "CCR
      Agreement"
      shall
      mean any agreement regarding conditions, covenants and restrictions which may
      be
      entered into by Borrower which are related to all or any portion of the
      Project.

     

    "Change
      of Control"
      shall
      mean any transaction that results in, directly or indirectly, (a) any Person
      other than Vail Resorts, Inc. or the Vail Corporation or a wholly-owned
      subsidiary thereof, whether directly or indirectly, owning 51% or more of the
      Equity Interests in Borrower, (b) any Person other than Vail Resorts, Inc.
      or
      The Vail Corporation or a wholly-owned subsidiary thereof having the
      responsibility for managing and administering the day-to-day business and
      affairs of Borrower, (c) in any other respects, any Person other than Vail
      Resorts, Inc. or The Vail Corporation directly or indirectly controlling
      Borrower, or (d) a "Change of Control Transaction" under the Principal Bank
      Credit Facility.

     

    "Change
      Order"
      shall
      mean any Modification to (a) the Plans and Specifications, (b) the Project
      Budget, (c) the Construction Schedule, or (d) the General Contract, a Major
      Subcontract or any subcontract, which increases the cost of Construction Work
      above the budgeted cost therefor previously approved by Administrative Agent
      but
      specifically excluding any Purchaser Upgrades.

     

    "Closing
      Date"
      shall
      mean the date of this Agreement.

     

    "Club"
      shall
      mean the private membership club known as “The Vail Mountain Club” comprised of
      members who have purchased Club Memberships for the privilege of access to
      and
      use of the Club Component, which includes approximately 14,813 square feet
      of
      social facilities, and parking facilities in the Shared Parking Garage
      Component.

     

    "Club
      Component"
      shall
      mean the Club portion of the Improvements to be available for use to third
      party
      purchasers of Club Memberships.

     

    "Club
      Component Personal Property"
      shall
      mean all furniture, furnishings, and personal property located at or used or
      to
      be used in connection with the Club Component.

     

    "Club
      Membership Deposit Account"
      shall
      mean an account with Administrative Agent pledged as Collateral in which
      Borrower shall deposit the Club Membership Deposits and from which such Club
      Membership Deposits may be withdrawn to be applied to the Facility Amount as
      set
      forth herein or otherwise disbursed by Administrative Agent or returned to
      the
      buyer, subject to the terms of the application for Club
      Memberships.

     

    "Club
      Membership Deposits"
      shall
      mean: (a) the initial application deposit fee of not less than One Hundred
      Thousand Dollars ($100,000.00) for a Full Membership and Fifty Thousand Dollars
      ($50,000.00) for a Social Membership (provided, however, up to ten (10) Social
      Memberships shall be sold for $80,000.00), paid to Borrower for each of the
      Club
      Memberships upon execution of the application for membership, and (b) the
      balance of the purchase price of the respective Club Memberships when paid
      to
      Borrower for each of the Club Memberships. The Club Membership Deposits shall
      be
      held in the Club Membership Deposit Account to be released and applied to the
      Facility Amount as set forth herein up to the amount of the Release Price for
      the Club Component, or otherwise disbursed by Administrative Agent or returned
      to the buyer, subject to the terms of the application for Club Memberships.
      

     

    "Club
      Memberships"
      shall
      mean not less than 450 memberships (consisting of not less than 150 Full
      Memberships and 300 Social Memberships) to be sold by Borrower pursuant to
      membership agreements. For purposes of these definitions, a "Full Membership"
      shall be a membership that includes access to both social facilities and the
      Shared Parking Garage Component. The membership fee for a Full Membership shall
      be at least $250,000. A "Social Membership" shall be a membership that includes
      access to only social facilities. The membership fee for a Social Membership
      shall be at least $100,000 (other than with respect to up to ten (10) Social
      Memberships sold for $80,000.00).

     

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

     

    "Collateral"
      shall
      mean, collectively, (a) all construction materials and equipment and all
      furniture, furnishings, fixtures, machinery, equipment, inventory and any other
      item of personal property in which Borrower now or hereafter owns or acquires
      any interest or right, including any of the foregoing that are leased, which
      are
      used or useful in the construction, operation, use, sale or occupancy of the
      Project (or any portion thereof); (b) all of Borrower's accounts receivable
      in
      connection with the Project (or any portion thereof); (c) all of Borrower's
      documents, instruments, contract rights (including any rights under any
      development agreement) and general intangibles relating to the present or future
      construction, use, sale, operation or occupancy of the Project (or any portion
      thereof), including the right to use the name "The Lodge at Vail Chalets",
      "Vail
      Mountain Club", or any such name given the Project or any component thereof,
      but
      excluding any rights to the Vail Resorts name and any tradenames or trademarks
      associated therewith; (d) all insurance proceeds from any policies of insurance
      covering any of the aforesaid; and (e) such other collateral as may be described
      in the Security Documents.

     

    "Commercial
      Component"
      shall
      mean, collectively, the Club Component and the Retail/Resort Services
      Component.

     

    "Commitment"
      shall
      mean, as to each Lender, the obligation of such Lender to make Loans in an
      aggregate amount up to but not exceeding the amount set opposite the name of
      such Lender on Exhibit
      C
      attached
      hereto under the caption "Commitment" or, in the case of a Person that becomes
      a
      Lender pursuant to an assignment permitted under Section 14.7(b),
      as
      specified in the respective Assignment and Assumption (consented to by Borrower
      and Administrative Agent in accordance with Section 14.7(b))
      pursuant to which such assignment is effected, as such amount may be modified
      by
      any Assignment and Assumption or as determined by Administrative
      Agent.

     

    "Completion"
      as
      applicable to the Construction Work, Project or Improvements shall mean the
      satisfaction of all of the following conditions: (a) the Construction Work
      (except for (i) minor Punch List Items that do not adversely affect the use,
      occupancy or operation thereof and (ii) tenant improvements to rentable space
      in
      the Commercial Component that is not yet occupied) or Base Building Work, as
      appropriate, shall be completed substantially in accordance with the Plans
      and
      Specifications; (b) the Construction Consultant or Design Professional, at
      Administrative Agent's discretion, shall have issued to Administrative Agent
      a
      report confirming the satisfaction of the condition set forth in clause (a)
      above; (c) valid certificates of occupancy for all components of the Project
      (except the incomplete portions thereof referred to in clause (a) above)
      shall have been issued by the appropriate Governmental Authority (which
      certificates of occupancy may be temporary certificates of occupancy), and
      (d)
      the statutory lien period or periods within which contractors, subcontractors,
      mechanics, materialmen and others providing labor and/or materials must file
      mechanic's and other liens shall have expired or appropriate waivers of such
      liens or bonds sufficient to cover the amount of such liens reasonably
      acceptable to Administrative Agent shall have been obtained from such parties
      or
      the Borrower, as appropriate.

     

    "Completion
      Date"
      shall
      mean, subject to Section 14.26,
      (a)
      with respect to the Residential Component, the first to occur of (i) the date
      that is fifteen (15) days in advance of the date required for delivery of a
      Unit
      pursuant to the terms of a Qualified Purchase Contract, or (ii) the date that
      is
      twenty-four (24) months after the Closing Date, and (b) with respect to the
      Project (other than the Residential Component), the date that is twenty-four
      (24) months after the Closing Date..

     

    "Completion
      Guaranty"
      shall
      mean that certain Guaranty of Completion executed by Guarantor in favor of
      Administrative Agent substantially concurrently herewith, as the same may be
      Modified from time to time.

     

    "Condemnation"
      shall
      mean a taking or voluntary conveyance during the term hereof of all or part
      of
      the Project, or any interest therein or right accruing thereto or use thereof,
      as the result of, or in settlement of, any condemnation or other eminent domain
      proceeding (including but not limited to any transfer made in lieu of or in
      anticipation of the exercise of such taking) by any Governmental Authority
      affecting the Project or any portion thereof whether or not the same shall
      have
      actually been commenced.

     

    "Condemnation
      Awards"
      shall
      mean all compensation, awards, damages, rights of action and proceeds awarded
      to
      Borrower by reason of a Condemnation.

     

    "Consents"
      shall
      mean the written consents of the Borrower's Architect and the General Contractor
      attached to the Assignment of Architecture Agreement and the Assignment of
      Construction Agreements, respectively.

     

    "Construction
      Consultant"
      shall
      mean RE Tech + and/or such other consultant as Administrative Agent may engage
      on behalf of the Lenders in connection herewith.

     

    "Construction
      Schedule"
      shall
      mean the schedule prepared and certified by Borrower and verified by the
      Construction Consultant establishing a timetable for commencement and Completion
      of the Construction Work, showing, on a monthly basis, the anticipated progress
      of the Construction Work and showing that all of the Construction Work will
      be
      completed on or before the Completion Date, as the same may from time to time
      hereafter be Modified in accordance with the terms of this
      Agreement.

     

    "Construction
      Work"
      shall
      mean all work and materials (including all labor, equipment and fixtures with
      respect thereto) necessary to construct the Improvements, all of which shall
      be
      performed and completed substantially in accordance with and as contemplated
      by
      the Plans and Specifications and all Applicable Laws.

     

    "Consumer
      Price Index"
      shall
      mean the consumer price index for the Denver area for all Urban Consumers-All
      Items, published monthly by the Bureau of Labor Statistics of the United States
      Department of Labor.

     

    "Continue",
      "Continuation"
      and
      "Continued"
      shall
      refer to the continuation pursuant to Section 2.7
      of (a) a
      LIBOR Rate Loan from one Interest Period to the next Interest Period or
      (b) a Base Rate Loan at the Base Rate.

     

    "Controlled
      Account"
      shall
      mean one or more deposit accounts established by Administrative Agent (for
      the
      benefit of the Lenders) at a depository bank or financial institution that
      is
      acceptable to Administrative Agent, and which is established and maintained
      in
      accordance with Section 14.24
      herewith.

     

    "Convert",
      "Conversion"
      and
      "Converted"
      shall
      refer to a conversion pursuant to Section 2.7
      of one
      Type of Loans into another Type of Loans.

     

    "Cost
      and Plan Review"
      shall
      mean a report of the Construction Consultant in form and substance reasonably
      satisfactory to Administrative Agent, as to the Project Budget, the Plans and
      Specifications, the Construction Schedule, a pro forma draw schedule, equipment
      selection, expected performance, operating costs and as to such other matters
      as
      Administrative Agent may reasonably request, including, without limitation,
      a
      detailed plan and cost review.

     

    "Date
      Down Endorsement"
      shall
      mean any date down endorsements (Form 122 or otherwise) to the Title Policy
      or
      other evidence of date down of title acceptable to Administrative Agent in
      its
      reasonable discretion covering disbursements of loan proceeds made or to be
      made
      subsequent to the date of the Title Insurance Policy.

     

    "Default"
      shall
      mean an event that with notice, lapse of time, or both would become an Event
      of
      Default.

     

    "Default
      Rate"
      shall
      mean, as applicable, a rate per annum equal to the greater of (a) the
      LIBOR-Based Rate plus three and one-half percent (3.5%) or (b) the Base Rate
      as
      in effect from time to time plus three and one-half percent (3.5%); provided,
      however,
      that in
      no event shall the Default Rate exceed the Maximum Rate.

     

    "Deposit
      Letter of Credit"
      shall
      mean an unconditional, irrevocable standby letter of credit that may be
      delivered to Administrative Agent by Borrower in lieu of Framing Deposits and/or
      Club Membership Deposits, in accordance with Section 6.1(j)
      hereof,
      in substantially the same form as attached hereto as Exhibit
      I
      and
      subject to the following:

     

    
      	 	
              (a)

            	
              The
                issuing financial institution must be located in Denver, Colorado
                (or
                otherwise provide the presentment may be made in Denver, Colorado)
                and
                must be acceptable and approved by all
                Lenders;

            

    

     

    
      	 	
              (b)

            	
              The
                amount of the Deposit Letter of Credit shall be equal to the amount
                of the
                Framing Deposits and/or Club Membership Deposits that it replaces;
                provided, that it does not have to replace all of such required Framing
                Deposits and/or Club Membership Deposits, but shall be in the full
                amount
                of the Framing Deposit for each Unit that it replaces, and shall
                be in
                incremental amounts equal to Club Membership
                Deposits;

            

    

     

    
      	 	
              (c)

            	
              The
                Deposit Letter of Credit must provide for partial drawings, to the
                extent
                that amounts are required to be drawn to refund Framing Deposits
                and/or
                Club Membership Deposits, or to apply the same to the Facility Amount
                as
                set forth herein, unless Borrower provides other funds for such refund
                or
                application;

            

    

     

    
      	 	
              (d)

            	
              The
                Deposit Letter of Credit shall be deemed Collateral for the Facility
                Amount and may be drawn upon by Administrative Agent in the Event
                of
                Default hereunder; and

            

    

     

    
      	 	
              (e)

            	
              The
                term of the Deposit Letter of Credit shall be coterminous with the
                Maturity Date, unless it provides that it will be renewed or replaced
                prior to its expiration. It shall not be canceled unless the corresponding
                amount of deposits that it represents is deposited in the appropriate
                Controlled Account; provided, however, that in connection with the
                release
                of the Club Component, the Deposit Letter of Credit shall be reduced
                by an
                amount equal to all Club Membership Deposits that were replaced by
                such
                Deposit Letter of Credit and upon the release of any Residential
                Unit, the
                Deposit Letter of Credit shall be reduced by the amount of the Framing
                Deposit attributable to such released Residential Unit and the Deposit
                Letter of Credit may reduce by its own terms to reflect the foregoing
                or
                the Borrower shall have a right to provide a replacement Deposit
                Letter of
                Credit in such reduced amount.

            

    

     

    "Depository
      Bank"
      shall
      mean any bank or financial institution in which a Controlled Account is
      established in accordance with Section 14.24
      hereof.

     

    "Design
      Professional"
      shall
      mean, collectively, Borrower's Architect, structural engineer, mechanical
      engineer and other design professionals relating to the Construction Work,
      as
      approved by Administrative Agent, and any reference in this Agreement to a
      certification or other document to be executed by the applicable Design
      Professional shall mean one or more of such Design Professionals designated
      by
      Administrative Agent as the Design Professionals to execute such certification
      or document, depending on the areas of expertise covered by such certification
      or document.

     

    "Development
      Agreement"
      shall
      mean individually or collectively, (a) that certain Front Door Development
      Agreement dated effective July 18, 2006, by and between the Town of Vail, and
      The Vail Corporation, d/b/a Vail Associates, Inc., as assigned to Borrower
      pursuant to an Assignment of Development Agreement dated as of March ___, 2007;
      (b) that certain Development and Use Agreement dated ___________, 2006, by
      and
      among Lodge Apartment Condominium Association, Inc., Lodge Properties, Inc.,
      and
      Borrower; (c) that certain Development and Use Agreement dated October 6, 2006,
      by and among One Vail Place Condominium Association, Riva Ridge 45/05, LLC,
      Luanne Wells, Jared M. Drescher and Irene M. Drescher, and Borrower; and (d)
      that certain Development and Use Agreement dated August 13, 2002, as amended,
      by
      and between The Lodge South Condominium Association, Inc., and Vail Resorts
      Development Company, as assigned to Borrower pursuant to an Assignment of
      Development Agreement dated as of March ___, 2007.

     

    "Development
      Agreement Guaranty"
      shall
      mean that certain Development Agreement Guaranty executed by Guarantor in favor
      of Administrative Agent substantially concurrently herewith, as the same may
      be
      Modified from time to time.

     

    "Discretionary
      Approvals"
      shall
      mean all discretionary governmental approvals, authorizations, permits and
      entitlements which have been or will be issued with respect to the Improvements,
      including, without limitation, all applicable building, land use and zoning
      approvals, annexation agreements, plot plan approvals, subdivision approvals
      (including the approval and recordation of any required subdivision map),
      environmental approvals (including a negative declaration or an environmental
      impact report if required under applicable law), and sewer and water
      permits.

     

    "Distribution"
      shall
      mean a payment of cash, assets, or proceeds of any kind by a Person (the
      "Distributor")
      to any
      other Person (a "Distributee")
      that
      owns a direct or indirect Equity Interest in such Distributor, including,
      without limitation, repayment of any loans made by such Distributee to such
      Distributor, or a return of any capital contribution made by such Distributee,
      distributions upon termination, liquidation or dissolution of such
      Distributor.

     

    "Dollars"
      and
      "$"
      shall
      mean lawful money of the United States of America.

     

    "Earnest
      Money Deposits"
      shall
      mean those non-refundable cash deposits made by purchasers under any Qualified
      Purchase Contract in the amount of fifteen percent (15%) of the sales price
      of
      any Residential Component Unit and referred to therein as "Earnest Money",
      but
      not a Framing Deposit. Earnest Money Deposits to be deposited by Borrower into
      the Earnest Money Deposit Account shall serve as pledged collateral and, at
      Administrative Agent’s determination, may be used in connection with
      construction of Improvements or applied to the Facility Amount or otherwise
      disbursed by Administrative Agent or returned to the buyer, subject to the
      terms
      of the Qualified Purchase Contract; provided, however, to the extent that
      Earnest Money is paid to Borrower under a Qualified Purchase Contract for the
      replacement of a Unit in the Residential Component for which an Earnest Money
      Deposit was already paid at the time of initial sale, deposited in the Earnest
      Money Deposit Account, and determined by Administrative Agent to be
      unconditionally forfeited by the former purchaser, then such Earnest Money
      shall
      be released to Borrower provided no Event of Default has occurred and is
      continuing hereunder.

     

    "Earnest
      Money Deposit Account"
      shall
      mean an account with Administrative Agent pledged as Collateral in which
      Borrower shall deposit the Earnest Money Deposits and from which such Earnest
      Money Deposits may be withdrawn for use in connection with the construction
      of
      the Improvements or applied to the Facility Amount or otherwise disbursed by
      Administrative Agent or returned to the buyer, subject to the terms of this
      Agreement or the Qualified Purchase Contract.

     

    "Eligible
      Assignee"
      shall
      mean any Person that is: (a) an existing Lender; (b) a commercial bank, trust
      company, savings and loan association, savings bank, insurance company,
      investment bank or pension fund organized under the laws of the United States
      of
      America, any state thereof or the District of Columbia, and having total assets
      in excess of $5,000,000,000; or (c) a commercial bank organized under the laws
      of any other country which is a member of the Organization for Economic
      Co-operation and Development, or a political subdivision of any such country,
      and having total assets in excess of $10,000,000,000, provided that such bank
      is
      acting through a branch or agency located in the United States of America.
      If
      such entity is not currently a Lender, such entity's (or in the case of a bank
      which is a subsidiary, such bank's parent's) senior unsecured long term
      indebtedness must be rated BBB or higher by S&P, Baa2 or higher by Moody's
      Investor Service or the equivalent or higher of either such rating by another
      rating agency accepted to the Administrative Agent.

     

    "Environmental
      Claim"
      shall
      mean, with respect to any Person, any written request for information by a
      Governmental Authority, or any written notice, notification, claim,
      administrative, regulatory or judicial action, suit, judgment, demand or other
      written communication by any Person or Governmental Authority alleging or
      asserting liability with respect to Borrower or the Project, whether for
      damages, contribution, indemnification, cost recovery, compensation, injunctive
      relief, investigatory, response, Remediation, damages to natural resources,
      personal injuries, fines or penalties arising out of, based on or resulting
      from
      (a) the presence, use or Release into the environment of any Hazardous Substance
      originating at or from, or otherwise affecting, the Project, (b) any fact,
      circumstance, condition or occurrence forming the basis of any violation, or
      alleged violation, of any Environmental Law by Borrower or otherwise affecting
      the health, safety or environmental condition of the Project or (c) any alleged
      injury or threat of injury to health, safety or the environment by Borrower
      or
      otherwise affecting the Project.

     

    "Environmental
      Indemnity"
      shall
      mean that certain Environmental Indemnity Agreement by executed by Borrower
      and
      Guarantor substantially concurrently herewith, in favor of Administrative Agent,
      as the same may be Modified from time to time.

     

    "Environmental
      Laws"
      shall
      mean any and all present and future federal, state and local laws, rules or
      regulations, and any orders or decrees, in each case as now or hereafter in
      effect, relating to the regulation or protection of health, safety or the
      environment or the Release or threatened Release of Hazardous Substances into
      the indoor or outdoor environment, including ambient air, soil, surface water,
      ground water, wetlands, land or subsurface strata, or otherwise relating to
      the
      use of Hazardous Substances.

     

    "Environmental
      Losses"
      shall
      mean any losses, damages, costs, fees, expenses, claims, suits, judgments,
      awards, liabilities (including but not limited to strict liabilities),
      obligations, debts, diminutions in value, fines, penalties, charges, costs
      of
      Remediation (whether or not performed voluntarily), amounts paid in settlement,
      foreseeable and unforeseeable consequential damages, litigation costs,
      reasonable attorneys' fees and expenses, engineers' fees, environmental
      consultants' fees, and investigation costs (including, but not limited to,
      costs
      for sampling, testing and analysis of soil, water, air, building materials,
      and
      other materials and substances whether solid, liquid or gas), of whatever kind
      or nature, and whether or not incurred in connection with any judicial or
      administrative proceedings, actions, claims, suits, judgments or awards relating
      to Hazardous Substances, Environmental Claims, Environmental Liens and violation
      of Environmental Laws.

     

    "Environmental
      Reports"
      shall
      mean, collectively, (a) the Environmental Site Assessment (Phase I) prepared
      on
      February 21, 2007, by Environmental Resources Management, and (b) any
      environmental surveys and assessments Administrative Agent in its reasonable
      discretion may require.

     

    "Equity
      Interests"
      shall
      mean shares of capital stock, partnership interests, membership interests in
      a
      limited liability company, beneficial interests in a trust or other equity
      ownership interests in a Person, and any warrants, options or other rights
      entitling the holder thereof to purchase or acquire any such equity
      interest.

     

    "Equity
      Rights"
      shall
      mean, with respect to any Person, any subscriptions, options, warrants,
      commitments, preemptive rights or agreements of any kind (including any
      'shareholders' or voting trust agreements) for the issuance, sale, registration
      or voting of, or securities convertible into, any additional shares of capital
      stock of any class, or partnership, membership or other ownership interests
      of
      any type in, such Person.

     

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

     

    "ERISA
      Affiliate"
      shall
      mean any trade or business (whether or not incorporated) that, together with
      any
      Borrower Party, is treated as a single employer under Section 414(b) or (c)
      of
      the Code, or, solely for purposes of Section 302 of ERISA and Section 412 of
      the
      Code, is treated as a single employer under Section 414 of the
      Code.

     

    "ERISA
      Event"
      shall
      mean (a) any "reportable event", as defined in Section 4043 of ERISA or the
      regulations issued thereunder with respect to a Plan (other than an event for
      which the 30-day notice period is waived); (b) the existence with respect to
      any
      Plan of an "accumulated funding deficiency" (as defined in Section 412 of the
      Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant
      to
      Section 412(d) of the Code or Section 303(d) of ERISA of an application for
      a
      waiver of the minimum funding standard with respect to any Plan; (d) the
      incurrence by a Borrower Party or any of its ERISA Affiliates of any liability
      under Title IV of ERISA with respect to the termination of any Plan; (e) the
      receipt by any Borrower Party or any ERISA Affiliate from the PBGC or a plan
      administrator of any notice relating to an intention to terminate any Plan
      or
      Plans or to appoint a trustee to administer any Plan; (f) the incurrence by
      a
      Borrower Party or any of its ERISA Affiliates of any liability with respect
      to
      the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or
      (g)
      the receipt by a Borrower Party or any ERISA Affiliate of any notice, or the
      receipt by any Multiemployer Plan from a Borrower Party or any ERISA Affiliate
      of any notice, concerning the imposition of Withdrawal Liability or a
      determination that a Multiemployer Plan is, or is expected to be, insolvent
      or
      in reorganization, within the meaning of Title IV of ERISA.

     

    "Excluded
      Taxes"
      shall
      mean, with respect to Administrative Agent, any Lender, or any other recipient
      of any payment to be made by or on account of any obligation of Borrower
      hereunder, (a) income or franchise taxes imposed on (or measured by) its net
      income by the United States of America, or by the jurisdiction under the laws
      of
      which such recipient is organized or in which its principal office is located
      or, in the case of any Lender, in which its Applicable Lending Office is
      located, or (b) any branch profits taxes imposed by the United States of America
      or any similar tax imposed by any other jurisdiction in which Borrower is
      located.

     

    "Facility
      Amount"
      shall
      mean One Hundred Twenty-Three Million and No/100 Dollars ($123,000,000.00)
      as
      such amount may be reduced pursuant to Sections 3.4
      and
3.5
      hereof.

     

    "Federal
      Funds Rate"
      means,
      for any day, the weighted average of the rates on overnight Federal funds
      transactions with members of the Federal Reserve System arranged by Federal
      funds brokers, as published on the next succeeding Business Day by the Federal
      Reserve Bank of New York, or, if such rate is not so published for any day
      that
      is a Business Day, the average of the quotations for such day for such
      transactions received by the Administrative Agent from three Federal funds
      brokers of recognized standing selected by it.

     

    "Framing
      Deposit Account"
      shall
      mean an account with Administrative Agent pledged as Collateral in which
      Borrower shall deposit the Framing Deposits and from which such Framing Deposits
      may be withdrawn to be applied to the Facility Amount or otherwise disbursed
      by
      Administrative Agent or returned to the buyer, subject to the terms of this
      Agreement and the Qualified Purchase Contract.

     

    "Framing
      Deposits"
      shall
      mean those cash deposits to be made by purchasers under a Qualified Purchase
      Contract in the amount of at least ten percent (10%) of the sales price of
      the
      Residential Component Unit, to be deposited by Borrower into the Framing Deposit
      Account and to be pledged as collateral until disbursed by Administrative Agent
      upon the sale of the Unit and applied to the Facility Amount or otherwise
      disbursed by Administrative Agent or returned to the buyer, subject to the
      terms
      of the Qualified Purchase Contract. 

     

    "Funding
      Date"
      shall
      mean any Business Day on which proceeds of the Commitment are advanced to or
      for
      the benefit of Borrower in accordance with and subject to the terms and
      conditions of this Agreement.

     

    "GAAP"
      shall
      mean generally accepted accounting principles in the United States applied
      on a
      consistent basis, in accordance with Section 1.2.

     

    "General
      Assignment"
      shall
      mean that certain Assignment of Contracts, Licenses, Approvals and Rights
      executed by Borrower for the benefit of Administrative Agent substantially
      concurrently herewith, as the same may be Modified from time to
      time.

     

    "General
      Contract"
      shall
      mean that certain Construction Contract dated as of May 1, 2006, as amended
      by
      Change Orders, between Borrower and the General Contractor, as the same may
      be
      Modified from time to time in accordance with the terms of this
      Agreement.

     

    "General
      Contractor"
      shall
      mean Hyder Construction, Inc.

     

    "General
      Contractor Fee"
      shall
      mean the general contractor fees agreed to by Borrower and General Contractor
      as
      provided in the General Contract.

     

    "Government
      Approval"
      shall
      mean any action, authorization, consent, approval, license, lease, ruling,
      permit, tariff, rate, certification, exemption, filing or registration by or
      with any Governmental Authority, including all licenses, permits, allocations,
      authorizations, approvals and certificates obtained by or in the name of, or
      assigned to, Borrower and used in connection with the ownership, construction,
      operation, use or occupancy of the Project, including building permits, zoning
      and planning approvals, business licenses, licenses to conduct business,
      certificates of occupancy and all such other permits, licenses and
      rights.

     

    "Governmental
      Authority"
      shall
      mean any governmental department, commission, board, bureau, agency, regulatory
      authority, instrumentality, judicial or administrative body, federal, state,
      local, or foreign having jurisdiction over the matter or matters in
      question.

     

    "Guarantor
      Documents"
      shall
      mean the Completion Guaranty and the Development Agreement
      Guaranty.

     

    "Guarantor"
      shall
      mean each of Vail Resorts, Inc., a Delaware corporation, and The Vail
      Corporation, a Colorado corporation, and sometimes referred to collectively
      herein as "Guarantor."

     

    "Hard
      Costs"
      shall
      mean the aggregate costs of all labor, materials, equipment and fixtures
      necessary for completion of construction of the Improvements, as more
      particularly set forth in the Project Budget.

     

    "Hazardous
      Substance"
      shall
      mean, collectively, (a) any petroleum or petroleum products, flammable
      materials, explosives, radioactive materials, asbestos, urea formaldehyde foam
      insulation, and transformers or other equipment that contain polychlorinated
      biphenyls ("PCB"),
      (b)
      any chemicals or other materials or substances that are now or hereafter become
      defined as or included in the definition of "hazardous substances," "hazardous
      wastes," "hazardous materials," "extremely hazardous wastes," "restricted
      hazardous wastes," "toxic substances," "toxic pollutants," "contaminants,"
      "pollutants" or words of similar import under any Environmental Law and (c)
      any
      other chemical or other material or substance, exposure to which is now or
      hereafter prohibited, limited or regulated under any Environmental
      Law.

     

    "Improvements"
      shall
      mean a mixed-use development consisting of approximately 215,548 square feet,
      comprised of the Residential Component, Commercial Component, the Shared Parking
      Garage Component, and all of the other improvements to be constructed on the
      Land by and for the benefit of the Borrower, as more particularly described
      in
      the Plans and Specifications.

     

    "Indebtedness"
      shall
      mean, for any Person: (a) obligations created, issued or incurred by such Person
      for borrowed money (whether by loan, the issuance and sale of debt securities
      or
      the sale of Property to another Person subject to an understanding or agreement,
      contingent or otherwise, to repurchase such Property from such Person), other
      than trade accounts payable (other than for borrowed money) arising, and accrued
      expenses incurred, in the ordinary course of business so long as such trade
      accounts payable are payable within ninety (90) days of the date the respective
      goods are delivered or the respective services are rendered; (b) obligations
      of
      such Person to pay the deferred purchase or acquisition price of Property or
      services; (c) Indebtedness of others secured by a Lien on the Property of such
      Person, whether or not the respective indebtedness so secured has been assumed
      by such Person; (d) obligations of such Person in respect of letters of credit
      or similar instruments issued or accepted by banks and other financial
      institutions for account of such Person; and (e) Indebtedness of others
      Guaranteed by such Person. Indebtedness shall not include obligations to return
      Earnest Money Deposits, Club Membership Deposits, Purchaser Upgrade Deposits,
      or
      Framing Deposits to Purchasers of Units pursuant to a Qualified Purchase
      Contract or Club Membership.

     

    "Indemnified
      Parties"
      shall
      mean Administrative Agent, the Affiliates of Administrative Agent, each Lender,
      and each of the foregoing parties' respective directors, officers, employees,
      attorneys, agents, successors and assigns.

     

    "Indemnified
      Taxes"
      shall
      mean Taxes other than Excluded Taxes.

     

    "Initial
      Equity Contribution"
      shall
      mean an equity contribution by Borrower in a minimum amount equal to Forty-Seven
      Million Nine Hundred Forty-Three Thousand Seven Hundred Fifty and No/100 Dollars
      ($47,943,750.00) which shall be comprised of the Land at its Appraised Land
      Value of Twenty-Four Million and No/100 Dollars ($24,000,000.00) and all Earnest
      Money Deposits in an amount not less than Twenty-Three Million Nine Hundred
      Forty-Three Thousand Seven Hundred Fifty and No/100 Dollars
      ($23,943,750.00).

     

    "Insurance
      Proceeds"
      shall
      mean all insurance proceeds, damages, claims and rights of action and the right
      thereto under any insurance policies relating to the Project.

     

    "Interest
      Period"
      shall
      mean each period commencing on the date such LIBOR Rate Loan is made or
      Converted from a Base Rate Loan or (in the event of a Continuation) the last
      day
      of the immediately preceding Interest Period for such Loan and ending on the
      numerically corresponding day in the first, second, third or sixth calendar
      month thereafter, as Borrower may select (subject to the terms and conditions
      hereof).

     

    "Knowledge"
      shall
      mean, with respect to a Person, (a) the actual knowledge of such Person (and
      if
      such Person is an entity, the actual knowledge of the individuals with
      responsibility for the management, control, and day to day operations of such
      entity), including, without limitation, with respect to Borrower and its
      Affiliates, in connection with the acquisition, development and construction
      of
      the Improvements, and (b) the knowledge such Person would have after having
      undertaken and completed such commercially reasonable diligence and
      investigation that a similarly-situated commercial property owner or developer
      would have undertaken with respect to the matter about which the applicable
      representation is made.

     

    "Land"
      shall
      have the meaning assigned to such term in the Recitals. 

     

    "Lender"
      shall
      have the meaning assigned to such term in the preamble.

     

    "LIBOR"
      shall
      mean, as of the applicable date and time for determination provided herein,
      a
      per annum rate of interest (rounded upward, if necessary, to the nearest 1/100th
      of 1%) equal to the rate which appears on the Telerate Page 3750 (or any
      successor or substitute thereto selected by Administrative Agent in its sole
      discretion) as of 11:00 a.m., London time, two (2) Banking Days prior to the
      first day of the applicable Interest Period selected by Borrower, for United
      States dollar deposits having a term coinciding with the Interest Period
      selected by Borrower, adjusted for any reserve requirements and any subsequent
      costs arising from a change in government regulation; provided that if such
      rate
      does not appear on such page as of the date of determination, or if such page
      shall cease to be publicly available at such time, or if the information
      contained on such page, in the sole judgment of Administrative Agent shall
      cease
      accurately to reflect the rate offered by leading banks in the London interbank
      market, LIBOR shall be based on the rate that appears as of 11:00 a.m. London
      time on such date of determination on the LIBOR Page of Reuters Screen for
      Dollar deposits having a term comparable to such Interest Period and in an
      amount comparable to the amount of the applicable LIBOR Rate Loan; and provided
      further if both of such pages shall cease to be publicly available as of the
      time of determination, or if the information contained on such page, in the
      sole
      judgment of Administrative Agent shall cease accurately to reflect the rate
      offered by leading banks in the London interbank market, LIBOR shall be based
      on
      the rate reported by any publicly available source of similar market data
      selected by Administrative Agent that, in its sole judgment, accurately reflects
      such rate offered by leading banks in the London interbank market.

     

    "LIBOR-Based
      Rate"
      shall
      mean the sum of (a) LIBOR, plus
      (b) the
      Applicable Margin.

     

    "LIBOR
      Rate Loans"
      shall
      mean the portions of the Outstanding Principal Amount that bear interest at
      LIBOR-Based Rate.

     

    "Lien"
      shall
      mean, with respect to any Property (including the Project), any mortgage, deed
      of trust, lien, pledge, charge, security interest or encumbrance of any kind
      in
      respect of such Property. For purposes of this Agreement and the other Loan
      Documents, a Person shall be deemed to own subject to a Lien any Property that
      it has acquired or holds subject to the interest of a vendor or lessor under
      any
      conditional sale agreement, capital lease or other title retention agreement
      (other than an operating lease) relating to such Property.

     

    "Lien
      Law"
      shall
      mean the mechanics' lien laws of the State of Colorado, as amended from time
      to
      time.

     

    "Limiting
      Regulation"
      shall
      mean any law or regulation of any jurisdiction, or any interpretation, directive
      or request under any such law or regulation (whether or not having the force
      of
      law and whether or not failure to comply therewith would be unlawful) by any
      court or Governmental Authority charged with the interpretation or
      administration thereof, or any internal bank policy resulting therefrom
      (applicable to loans made in the United States of America) which would or could
      in any way require a Lender to have the approval right contained in Section
      10.3(d).

     

    "Loan
      Documents"
      shall
      mean, collectively, this Agreement, the Notes, the Security Documents, the
      Guarantor Documents, the Representation Agreement, and each other agreement,
      instrument or document required to be executed and delivered in connection
      with,
      or evidencing, securing, or supporting, the Loans, together with any
      Modifications thereof.

     

    "Loan
      Par Value"
      shall
      mean the portion of the Facility Amount allocated to each Unit as set forth
      on
Exhibit F.

     

    "Loan
      to Cost Ratio"
      shall
      mean the ratio, expressed as a percentage that (a) the Facility Amount bears
      to
      (b) the Project Budget.

     

    "Loan
      to Value Ratio"
      shall
      mean the ratio, expressed as a percentage, that (a) the Facility Amount bears
      to
      (b) the Appraised Value as determined on the basis of the most recent Appraisal
      obtained by Administrative Agent, any such Appraisal to be conclusive absent
      demonstrable error.

     

    "Major
      Subcontract"
      shall
      mean any subcontract, trade contract, material agreement or supply contract
      relating to the construction of the Improvements or a component thereof in
      the
      amount of One Million and No/100 Dollars ($1,000,000.00) or more.

     

    "Major
      Subcontractor"
      shall
      mean any subcontractor or trade contractor or supplier, other than a Design
      Professional, who is a party to a Major Subcontract.

     

    "Managing
      Member"
      shall
      mean Vail Resorts Development Company, a Colorado corporation, as managing
      member under the Organizational Documents of Borrower, and its successors
      thereunder as managing member of Borrower as permitted under the Loan
      Documents.

     

    "Material
      Adverse Effect"
      shall
      mean (a) as to Borrower, the likely inability or reasonably anticipated
      inability of Borrower to pay and perform its respective obligations under and
      in
      full compliance with the terms of the Loan Documents (including, without
      limitation, Completion of the Base Building Work on or before the Completion
      Date) as a result of (i) a material and adverse effect on the condition
      (financial or otherwise), assets or business of Borrower (other than a change
      solely as a result of a change in the financial markets), (ii) a material and
      adverse effect on the value of the Project (other than a change solely as a
      result of a change in the financial markets), or (iii) a material and adverse
      effect on the status of the liens in favor of Administrative Agent on the
      Collateral; (b) as to Guarantor Vail Resorts, Inc., the acceleration of that
      certain Indenture dated as of January 29, 2004, by Vail Resorts, Inc. as Issuer
      and The Bank of New York, as Trustee, as a result of any material default
      thereunder after giving effect to all applicable notice, cure and grace periods
      and all consents, waivers or modifications entered into or permitted therein,
      and (c) as to Guarantor The Vail Corporation, the acceleration of The Vail
      Corporation's Principal Bank Credit Facility as the result of any material
      default thereunder after giving effect to all applicable notice, cure and grace
      periods and all consents, waivers or modifications which have been entered
      into
      by the requisite lenders under the terms of the such facility. In the event
      that
      the Principal Bank Credit Facility or its successor is terminated without
      replacement or that such agreement or its successor is Modified on terms and
      conditions that are not substantially similar, "Principal
      Bank Credit Facility"
      as to
      The Vail Corporation shall mean The Vail Corporation's principal bank revolving
      credit agreement as in effect as of the date immediately before its termination
      or substantial Modification and the covenants contained therein. In which case,
      "Material Adverse Effect" shall mean a material default of any such
      covenants.

     

    "Material
      Agreement"
      shall
      mean, individually and collectively, the General Contract, Architecture
      Agreement, each Qualified Purchase Contract, any CCR Agreement, any Development
      Agreement, and Borrower's Organizational Documents.

     

    "Maturity
      Date"
      shall
      mean the earliest to occur of (a) the Scheduled Maturity Date in the event
      Borrower does not properly exercise the Extension Option pursuant to
Article IV
      below;
      (b) the Extended Maturity Date in the event Borrower has properly exercised
      the
      Extension Option pursuant to Article
      IV;
      (c) the
      occurrence of any Transfer prohibited by the Loan Documents; and (d) the date
      on
      which the Outstanding Principal Balance is accelerated pursuant to the terms
      of
      this Agreement.

     

    "Member(s)"
      shall
      mean, collectively, the Managing Member and such other Person or Persons as
      may
      be a member of Borrower from time to time in accordance with the terms of the
      Loan Documents.

     

    "Minimum
      Loan Coverage Ratio"
      shall
      mean the ratio that (a) Net Sales Proceeds derived from sales pursuant to
      Qualified Purchase Contracts bears to (b) the Facility Amount, which ratio
      shall
      not be less than 0.75:1.0; provided, however, upon the release of the Club
      Component and the payment of the applicable Release Price for such release,
      the
      Minimum Loan Coverage Ratio shall not be less than 1.0:1.0.

     

    "Ministerial
      Matter"
      shall
      mean matters of an administrative or ministerial nature with respect to the
      Borrower, the Improvements, or the Loan, including, without limitation, matters
      involving: (a) construction budgets, schedules, plans and specifications, and
      any changes made (or requested by Borrower to be made) with respect thereto,
      (b)
      construction contracts, architecture contracts, bonds, and other documents
      related to the Project, and any changes made (or requested by Borrower to be
      made) thereto, (c) forms of documents and Collateral required to be executed
      and/or delivered by Borrower or any other Person in connection with the Loan,
      including documents relating to Anticipated Encumbrances, (d) approval of
      Anticipated Encumbrances and Subordination of the Security Documents thereto,
      and (e) the satisfaction of conditions precedent to disbursements of the Loan
      to
      Borrower; provided,
      however,
      that
      Ministerial Matters shall not be deemed to include any of the matters described
      in Section 13.9(b)
      below.

     

    "Modifications"
      shall
      mean any amendments, supplements, modifications, renewals, replacements,
      consolidations, severances, substitutions and extensions thereof from time
      to
      time; "Modify," "Modified," or related words shall have meanings correlative
      thereto.

     

    "Multiemployer
      Plan"
      shall
      mean a multiemployer plan as defined in Section 4001(a)(3) of
      ERISA.

     

    "Net
      Sales Proceeds"
      shall
      mean the actual sales price of Unit subject to a Qualified Purchase Contract,
      less commissions and closing costs paid by Borrower to third parties; provided,
      however, in no event shall such commissions and closing costs exceed seven
      percent (7%) of the actual Unit sales price, and, with respect to the
      calculation of the Minimum Loan Coverage Ratio, the projected aggregate amount
      of the actual sales prices less commissions, closing costs, and the Earnest
      Money Deposit, for Units subject to Qualified Purchase Contracts.
      

     

    "Non-Discretionary
      Approvals"
      shall
      mean all non-discretionary governmental approvals, authorizations, permits
      and
      entitlements where issuing of the same is based solely on a determination of
      compliance or non-compliance with applicable laws and previously issued
      Discretionary Approvals, including, without limitation, all grading, shoring,
      excavating, and building permits.

     

    "Notes"
      shall
      mean those certain Promissory Notes, each of even date herewith, executed and
      delivered by Borrower to the order of the Lender named therein, in the aggregate
      original principal amount of the Facility Amount, to evidence the Loans, as
      the
      same may be Modified from time to time, and including any Replacement
      Notes.

     

    "Obligations"
      shall
      mean all obligations, liabilities and indebtedness of every nature of Borrower,
      from time to time owing to Administrative Agent or any Lender under or in
      connection with this Agreement, the Notes or any other Loan Document to which
      it
      is a party, including principal, interest, fees (including fees of counsel),
      and
      expenses whether now or hereafter existing under the Loan
      Documents.

     

    "Official
      Records"
      shall
      mean the official records of the office of the Clerk and Recorder of Eagle
      County, State of Colorado.

     

    "Organizational
      Documents"
      shall
      mean (a) for any corporation, the certificate or articles of incorporation,
      the
      bylaws, any certificate of determination or instrument relating to the rights
      of
      preferred shareholders of such corporation, any shareholder rights agreement,
      and any amendments thereto, (b) for any limited liability company, the articles
      of organization and any certificate relating thereto and the limited liability
      company (or operating) agreement of such limited liability company, and any
      amendments thereto, and (c) for any partnership (general or limited), the
      certificate of limited partnership or other certificate pertaining to such
      partnership and the partnership agreement of such partnership (which must be
      a
      written agreement), and any amendments thereto.

     

    "Other
      Charges"
      shall
      mean all maintenance charges, impositions other than Real Estate Taxes, and
      any
      other charges, including license fees for the use of areas adjoining the
      Project, now or hereafter levied or assessed or imposed against the Project
      or
      any part thereof. 

     

    "Other
      Taxes"
      shall
      mean any and all present or future stamp or documentary taxes or any other
      excise or property taxes, charges or similar levies arising from any payment
      made under any Loan Document or from the execution, delivery or enforcement
      of,
      or otherwise with respect to, any Loan Document.

     

    "Outstanding
      Principal Amount"
      shall
      mean the aggregate outstanding principal amount of the Loans at any point in
      time.

     

    "Payment
      Date"
      shall
      mean the first Business Day of each calendar month. The first Payment Date
      shall
      be the first Business Day of the first calendar month following the making
      of
      the first Loan pursuant to this Agreement.

     

    "PBGC"
      shall
      mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA
      and any successor entity performing similar functions.

     

    "Permitted
      Liens"
      shall
      mean (a) any Lien created by the Loan Documents, (b) those matters listed as
      exception on Schedule B to the Title Policy, (c) Liens for Real Estate Taxes
      and
      Other Charges imposed by any Governmental Authority not yet due or delinquent,
      (d) the Anticipated Encumbrances approved by Administrative Agent, (e) the
      Development Agreements, and (f) any Lien created by the recordation of documents
      required for the establishment of a homeowners association, and such other
      title
      and survey exceptions as Administrative Agent may approve.

     

    "Person"
      shall
      mean any individual, corporation, company, voluntary association, partnership,
      limited liability company, joint venture, trust, unincorporated organization
      or
      government (or any agency, instrumentality or political subdivision
      thereof).

     

    "Plan"
      shall
      mean any employee pension benefit plan (other than a Multiemployer Plan) subject
      to the provisions of Title IV of ERISA or Section 412 of the Code or Section
      302
      of ERISA, and in respect of which any of their ERISA Affiliates is (or, if
      such
      plan were terminated, would under Section 4069 of ERISA be deemed to be) an
      "employer" as defined in Section 3(5) of ERISA.

     

    "Plans
      and Specifications"
      shall
      mean the plans and specifications for the construction of the Improvements
      delivered by Borrower to Administrative Agent, prepared by Borrower's Design
      Professionals and approved by Administrative Agent, the Construction Consultant
      and, to the extent then required, by any applicable Governmental Authority
      and
      such other parties whose approval or consent may be required under any law,
      regulation, prior agreement, this Agreement and all Modifications thereof made
      by Change Orders permitted pursuant to the terms of this Agreement. A list
      of
      the presently existing Plans and Specifications is attached hereto as
Exhibit E.

     

    "Prime
      Rate"
      shall
      mean, at any time, the rate of interest most-recently announced within Wells
      Fargo Bank, National Association, at its principal office in San Francisco,
      California, from time to time as its prime rate, notwithstanding the fact that
      Administrative Agent and the Lenders may lend funds to their customers at rates
      that are at, above or below said prime rate, it being understood that such
      prime
      commercial rate is a reference rate and does not necessarily represent the
      lowest or best rate being charged by Wells Fargo Bank, National Association,
      to
      any customer. Changes in the Prime Rate shall become effective on the same
      day
      as the date of any change in said prime rate.

     

    "Principal
      Bank Credit Facility"
      means
      that certain Fourth Amended and Restated Credit Agreement, dated as of January
      28, 2005, as amended, among The Vail Corporation (d/b/a Vail Associates, Inc.),
      Bank of America, N.A., as Administrative Agent and the other financial
      institutions identified therein, as amended, modified, extended or replaced
      from
      time to time on substantially similar terms and conditions.

     

    "Principal
      Office"
      shall
      mean the office of Administrative Agent, located on the date hereof at c/o
      Real
      Estate Group, MAC C7331-140, 4643 S. Ulster Street, Denver, Colorado 80237,
      or
      such other office as Administrative Agent shall designate upon ten (10) days'
      prior notice to Borrower and the Lenders.

     

    "Project"
      shall
      mean, collectively, (a) the Land, together with any air rights and other rights,
      privileges, easements, hereditaments and appurtenances thereunto relating or
      appertaining to the Land owned by and for the benefit of Borrower, (b) the
      Improvements, together with all fixtures and equipment owned by and for the
      benefit of Borrower required for the operation of the Improvements, (c) all
      building materials and personal property owned by and for the benefit of
      Borrower related to the foregoing, and (d) all other items described as
      "Property" in the Security Instrument.

     

    "Project
      Budget"
      shall
      mean the budget attached as Exhibit
      B
      hereto
      as the same may be Modified from time to time in accordance with the provisions
      of this Agreement.

     

    "Project
      Costs"
      shall
      mean, collectively, the Appraised Land Value, Hard Costs and Soft
      Costs.

     

    "Project
      Documents"
      shall
      mean, collectively, (a) the General Contract, (b) the Architecture Agreement,
      (c) the Plans and Specifications, (d) all Major Subcontracts, (e) the Government
      Approvals, (f) the Construction Schedule, (g) Consents, (h) the Design
      Professionals' Certificates, and (i) the Development Agreement, as the same
      may
      be Modified from time to time as permitted under the Loan
      Documents.

     

    "Property"
      shall
      mean any right or interest in or to property of any kind whatsoever, whether
      real, personal or mixed and whether tangible or intangible.

     

    "Proportionate
      Share"
      shall
      mean, with respect to each Lender, the percentage set forth opposite such
      Lender's name on Exhibit
      C
      attached
      hereto under the caption "Proportionate Share," as such percentage may change
      from time to time as permitted herein.

     

    "Protective
      Advance"
      shall
      mean all necessary costs and expenses (including attorneys' fees and
      disbursements) incurred by Administrative Agent (a) in order to remedy an Event
      of Default under the Loan Documents, which Event of Default, by its nature,
      may
      impair any portion of the Collateral for the Loans or the value of such
      Collateral, interfere with the enforceability or enforcement of the Loan
      Documents, or otherwise materially impair the payment of the Loan (including,
      without limitation, the costs of unpaid insurance premiums, foreclosure costs,
      costs of collection, costs incurred in bankruptcy proceedings and other costs
      incurred in enforcing any of the Loan Documents); or (b) in respect of the
      operation of the Project following a foreclosure under the Security
      Instrument.

     

    "Punch
      List Items"
      shall
      mean minor construction items to be completed or constructed with respect to
      the
      Base Building Work or Construction Work which do not materially interfere either
      with the use of the Improvements or the acceptance and occupancy of the space
      to
      a buyer.

     

    "Purchaser
      Upgrade(s)"
      shall
      mean a Modification(s) or upgrade(s) to the Plans and Specifications for a
      Unit
      requested by the purchaser of such Unit and required to be paid for by such
      purchaser.

     

    "Purchase
      Upgrade Deposits"
      shall
      mean those cash deposits made by purchasers under a Qualified Purchase Contract
      for Purchase Upgrades, to be deposited by Borrower into the Purchase Upgrade
      Deposit Account and to be pledged collateral until applied to the Facility
      Amount or otherwise disbursed by Administrative Agent or refunded to the buyer,
      subject to the terms of the Qualified Purchase Contract.

     

    "Purchaser
      Upgrade Deposit Account"
      shall
      mean one or more deposit accounts established by Borrower with Administrative
      Agent, and which is established and into which Purchaser Upgrade Deposits shall
      be held for disbursement in accordance with Section 2.2(c).

     

    "Qualified
      Purchase Contract"
      shall
      mean with respect to Units in the Residential Component (a) each of the
      contracts listed on Exhibit
      D,
      provided no defaults exist thereunder and the same is in full force and effect
      for the purchase of a Unit or (b) such other or substitute contract for the
      purchase of a Unit which is in full force and effect and meets the following
      criteria: (i) is in substantially the form previously submitted to and accepted
      by Administrative Agent; (ii) is with an unaffiliated third-party purchaser
      purchasing no more than two (2) Units (except as described herein); (iii)
      pursuant to which the purchaser of such Unit, in accordance with the provisions
      of such contract, has placed into escrow or delivered to Borrower or Guarantor
      an Earnest Money Deposit and requiring a Framing Deposit; (iv) contains no
      major
      contingencies (other than construction of the Improvements and customary
      inspection, and title); and (v) the Administrative Agent has received a fully
      executed copy of the contract. The Administrative Agent acknowledges that all
      of
      the contracts currently listed on Exhibit
      D
      constitute "Qualified Purchase Contracts."

     

    "Real
      Estate Taxes"
      shall
      mean all real estate taxes and all general and special assessments, levies,
      permits, inspection and license fees, all water and sewer rents and charges,
      all
      charges for utilities and all other public charges whether of a like kind or
      different nature, imposed upon or assessed against Borrower or the Project
      or
      any part thereof or upon the revenues, rents, issues, income and profits of
      the
      Project or arising in respect of the occupancy, use or possession
      thereof.

     

    "Regulations
      A, D, T, U and X"
      shall
      mean, respectively, Regulations A, D, T, U and X of the Board of Governors
      of
      the Federal Reserve System (or any successor), as the same may be Modified
      and
      in effect from time to time.

     

    "Regulatory
      Change"
      shall
      mean, with respect to any Lender, any change after the Closing Date in federal,
      state or foreign law or regulations (including Regulation D) or the adoption
      or
      making after such date of any interpretation, directive or request applying
      to a
      class of banks including such Lender of or under any federal, state or foreign
      law or regulations (whether or not having the force of law and whether or not
      failure to comply therewith would be unlawful) by any Governmental Authority
      or
      monetary authority charged with the interpretation or administration
      thereof.

     

    "Release"
      shall
      mean any release, spill, emission, leaking, pumping, injection, deposit,
      disposal, discharge, dispersal, leaching or migration into the indoor or outdoor
      environment, including the movement of Hazardous Substances through ambient
      air,
      soil, surface water, ground water, wetlands, land or subsurface
      strata.

     

    "Release
      Price"
      shall
      mean the amount paid by Borrower to Administrative Agent to obtain a release
      or
      partial release of the Security Instrument. With respect to the Residential
      Component, the Release Price for each Unit (together with the Unit Specific
      Personal Property) shall be equal to the greater of: (a) Net Sales Proceeds
      for
      each Unit, and (b) Loan Par Value; provided, that the Release Price for each
      Residential Component Unit shall be reduced by the Earnest Money Deposit applied
      to the costs of construction and the Framing Deposit applied to the Facility
      Amount for said Unit. With respect to the Club Component (together with the
      Club
      Component Personal Property and the Shared Parking Garage Component, all to
      be
      released contemporaneously), the Release Price shall be equal to the greater
      of:
      (a) sixty percent (60%) of Club Membership sales proceeds received by Borrower
      from the sale of Club Memberships as of the time of the release of the Club
      Component, and (b) Forty Million Dollars ($40,000,000.00); provided, that the
      Release Price for the Club Component shall be reduced by Club Membership
      Deposits applied to the Facility Amount.

     

    "Remediation"
      shall
      mean, without limitation, any investigation, site monitoring, response,
      remedial, removal, or corrective action, any activity to cleanup, detoxify,
      decontaminate, contain or otherwise remediate any Hazardous Substance, any
      actions to prevent, cure or mitigate any Release of any Hazardous Substance,
      any
      action to comply with any Environmental Laws or with any permits issued pursuant
      thereto, any inspection, investigation, study, monitoring, assessment, audit,
      sampling and testing, laboratory or other analysis, or evaluation relating
      to
      any Hazardous Substances.

     

    "Replacement
      Note(s)"
      shall
      mean any Note executed by Borrower to the order of a Lender upon the assignment
      by such Lender of all or any portion of such Lender's interest in the Loan
      and
      the Loan Documents.

     

    "Representation
      Agreement"
      shall
      mean that certain Representation Agreement of even date herewith executed by
      Guarantor in favor of Administrative Agent and Lenders.

     

    "Request
      for Continuation or Conversion"
      shall
      mean the notice to be given by Borrower to Administrative Agent in respect
      of
      each Loan, in the form of Exhibit
      G
      hereto.

     

    "Request
      for Loan Advance"
      shall
      mean the notice to be given by Borrower to Administrative Agent in respect
      of
      each Loan, in the form of Exhibit H
      hereto.

     

    "Required
      Lenders"
      shall
      mean Lenders holding an aggregate Proportionate Share of at least 66.67% of
      the
      Facility Amount, or, if the Commitments have been terminated, then Lenders
      holding an aggregate Proportionate Share of the Outstanding Principal Balance
      of
      at least 66.67%; provided, however, in connection with any waiver, modification,
      or otherwise any change relating to Sections 9.21
      and
9.22
      herein,
      "Required Lenders" shall mean Lenders holding an aggregate Proportionate Share
      of at least 75% of the Facility Amount.

     

    "Residential
      Component"
      shall
      mean, collectively, the thirteen (13) residential chalet condominium Units,
      including the associated twenty-six (26) underground parking spaces, comprising
      a portion of the Improvements.

     

    "Retail/Resort
      Services Component"
      shall
      mean the approximately 27,765 square foot Unit comprising a portion of the
      Improvements designated for use for retail, skier services, mountain operations
      offices, and associated parking rights in the Shared Parking Garage Component,
      if any.

     

    "Scheduled
      Maturity Date"
      shall
      mean September 1, 2009, as such date may be extended by the Extension
      Period.

     

    "Security
      Documents"
      shall
      mean, collectively, the Security Instrument, the General Assignment, the
      Assignment of Architecture Agreements, the Assignment of Construction
      Agreements, any Controlled Account Agreement, the Assignment of Accounts, any
      other agreements executed by any Borrower Party granting a Lien on any Property
      or rights as security for the Loans, and all Uniform Commercial Code financing
      statements required by this Agreement (provided in no event shall the Guarantor
      Documents or the Environmental Indemnity be deemed Security
      Documents).

     

    "Security
      Instrument"
      shall
      mean the Deed of Trust, Assignment of Leases and Rents, Security Agreement
      and
      Fixture Filing executed by Borrower for the benefit of Administrative Agent
      concurrently herewith, as the same may be Modified from time to
      time.

     

    "Shared
      Parking Garage Component"
      shall
      mean that portion of the Improvements to be constructed by Borrower consisting
      of an underground parking garage of approximately 199 parking spaces, that
      shall
      primarily service the Club Component, the South Lodge Tower, The Lodge at Vail,
      the Retail/Resort Component, employees of Guarantor and their subsidiaries,
      as
      well as other uses, as determined by Borrower and reasonably approved by
      Administrative Agent. 

     

    "Solvent"
      shall
      mean, when used with respect to any Person, that at the time of determination:
      (a) the fair saleable value of its assets is in excess of the total amount
      of
      its liabilities (including contingent liabilities); (b) the present fair
      saleable value of its assets is greater than its probable liability on its
      existing debts as such debts become absolute and matured; (c) it is then able
      and expects to be able to pay its debts (including contingent debts and other
      commitments) as they mature; and (d) it has capital sufficient to carry on
      its
      business as conducted and as proposed to be conducted.

     

    "Soft
      Costs"
      shall
      mean those Project Costs associated with the development, construction,
      marketing, leasing, operation and maintenance of the Improvements which are
      not
      Hard Costs or Appraised Land Value, including, without limitation, the sales
      and
      leasing commissions, architectural and engineering fees, consultant fees,
      professional fees, marketing fees and expenses, real estate taxes, insurance
      and
      bonding costs, financing fees, interest payable on the principal amount of
      the
      Loans and any other items identified as "Soft Costs" on the Project
      Budget.

     

    "Spa
      Project"
      shall
      mean the spa facility to be constructed on the Land and on land adjacent to
      the
      Land, by Borrower for the benefit of Lodge Properties Inc., and upon completion,
      to be made a part of The Lodge at Vail adjacent to the Improvements, pursuant
      to
      the terms of the Subdivision Agreement, together with any associated parking
      rights in the Shared Parking Garage Component, if any.

     

    "S&P"
      shall
      mean Standard & Poor's Ratings Services, a division of The McGraw-Hill
      Companies, Inc., or any successor thereto.

     

    "Subdivision
      Agreement"
      shall
      mean that certain Subdivision, Conveyance and Construction Agreement dated
      _____________, 2007, by and between Borrower and Lodge Properties,
      Inc.

     

    "Subsidiary"
      shall
      mean, with respect to any Person, any corporation, limited liability company,
      partnership or other entity of which at least a majority of the securities
      or
      other ownership interests having by the terms thereof ordinary voting power
      to
      elect a majority of the board of directors or other persons performing similar
      functions of such corporation, limited liability company, partnership or other
      entity (irrespective of whether or not at the time securities or other ownership
      interests of any other class or classes of such corporation, limited liability
      company, partnership or other entity shall have or might have voting power
      by
      reason of the happening of any contingency) is at the time directly or
      indirectly owned or controlled by such Person or one or more Subsidiaries of
      such Person or by such Person and one or more Subsidiaries of such
      Person.

     

    "Survey"
      shall
      mean an ALTA survey of the Project reasonably satisfactory to Administrative
      Agent in form and content and made by a registered land surveyor reasonably
      satisfactory to Administrative Agent.

     

    "Taxes"
      shall
      mean any and all present or future taxes, levies, imposts, duties, deductions,
      charges or withholdings imposed by any Governmental Authority.

     

    "Title
      Company"
      shall
      mean Land Title Guaranty Co. and any one or more co-insurers or reinsurers
      acceptable to Administrative Agent.

     

    "Title
      Policy"
      shall
      mean an ALTA policy or policies of title insurance satisfactory to
      Administrative Agent, together with evidence of the payment of all premiums
      due
      thereon, issued by the Title Company (a) insuring Administrative Agent for
      the
      benefit of the Lenders in an amount equal to the Facility Amount that Borrower
      is lawfully seized and possessed of a valid and subsisting fee simple interest
      in the Project and that the Security Instrument constitutes a valid fee simple
      deed of trust lien on the Project, subject to no Liens other than Permitted
      Liens and (b) providing (i) affirmative insurance or endorsements for coverage
      against all mechanics' and materialmen's liens, and (ii) such other affirmative
      insurance and endorsements as Administrative Agent may require (including,
      without limitation, 100 or its equivalent (comprehensive endorsement, modified
      for a lender), 116.1 (same land as shown on survey), 116.4 (contiguity
      endorsement), 103.4 or equivalent (street access endorsement), 100.30 (mineral
      protection) and ALTA 8.1 (environmental).

     

    "Trading
      with the Enemy Act"
      shall
      mean 50 U.S.C. App. 1 et seq.

     

    "Transactions"
      shall
      mean, collectively, (a) the execution, delivery and performance by Borrower
      of
      this Agreement and the other Loan Documents, the borrowing of the Loans, the
      use
      of the proceeds thereof and (b) the execution, delivery and performance by
      the
      other Borrower Parties of the other Loan Documents to which they are a party
      and
      the performance of their obligations thereunder.

     

    "Transfer"
      shall
      mean any transfer, sale, lease, assignment, mortgage, encumbrance (other than
      an
      Anticipated Encumbrance or as contemplated by the Subdivision Agreement), pledge
      or conveyance (other than an Anticipated Encumbrance) of all or a portion of
      any
      of (a) the Project, (b) the direct or indirect Equity Interests in Borrower
      (other than Transfers of interest in Vail Resorts, Inc.), or (c) the direct
      or
      indirect right or power to direct the operations, decisions and affairs of
      Borrower, whether through the ability to exercise voting power, by contract
      or
      otherwise (other than rights in connection with the ownership of interest in
      Vail Resorts, Inc.).

     

    "Types
      of Loans"
      refers
      to whether such Loan is a Base Rate Loan or a LIBOR Rate Loan, each of which
      constitutes a "Type". Loans hereunder are distinguished by "Type."

     

    "Unavoidable
      Delay"
      shall
      mean any delay due to strikes, acts of God, fire, earthquake, floods, explosion,
      actions of the elements, other accidents or casualty, declared or undeclared
      war, terrorist acts, riots, mob violence, inability to procure or a general
      shortage of labor, equipment, facilities, energy, materials or supplies in
      the
      open market, failure of transportation, lockouts, actions of labor unions,
      condemnation, court orders, laws, rules, regulations or orders of Governmental
      Authorities, or other cause beyond the reasonable control of Borrower;
provided,
      however,
      "Unavoidable Delays" shall not include delays caused by Borrower's lack of
      or
      inability to procure monies to fulfill Borrower's commitments and obligations
      under this Agreement or the other Loan Documents.

     

    "Uniform
      Commercial Code"
      shall
      mean the Uniform Commercial Code of the State of Colorado and the state of
      formation/organization of Borrower, as applicable.

     

    "Unit"
      shall
      mean each and any of the (i) 13 residential condominium units comprising the
      Residential Component, including Purchaser Upgrades and Unit Specific Personal
      Property, (ii) the Club Component, (iii) the Retail/Resort Services Component;
      and (iv) the Shared Parking Garage Component.

     

    "Unit
      Specific Personal Property"
      shall
      mean furnishings and other personal property sold or conveyed in connection
      with
      the sale of a Unit pursuant to a Qualified Purchase Contract.

     

    "Unsatisfactory
      Work"
      shall
      mean any Construction Work which Administrative Agent and/or the Construction
      Consultant has reasonably determined has not been completed in a good and
      workmanlike manner, and, to the extent any Construction Work is not specifically
      addressed in the construction drawings and specifications, in a manner
      consistent with sound design principles and/or sound construction practices,
      or
      in substantial conformity with the Plans and Specifications, or in accordance
      with all Applicable Law.

     

    "Withdrawal
      Liability"
      shall
      mean liability to a Multiemployer Plan as a result of a complete or partial
      withdrawal from such Multiemployer Plan, as such terms are defined in Part
      I of
      Subtitle E of Title IV of ERISA.

     

    1.2  Accounting
      Terms and Determinations

    .
      Except
      as otherwise expressly provided herein, all terms of an accounting or financial
      nature shall be construed in accordance with GAAP, as in effect from time to
      time. 

     

    1.3  Terms
      Generally

    .
      The
      definitions of terms herein shall apply equally to the singular and plural
      forms
      of the terms defined. Whenever the context may require, any pronoun shall
      include the corresponding masculine, feminine and neuter forms. The words
      "include," "includes" and "including" shall be deemed to be followed by the
      phrase "without limitation." The word "will" shall be construed to have the
      same
      meaning and effect as the word "shall." Unless the context requires otherwise
      (a) any definition of or reference to any agreement, instrument or other
      document herein shall be construed as referring to such agreement, instrument
      or
      other document as from time to time Modified (subject to any restrictions on
      such Modifications set forth herein), (b) any reference herein to any Person
      shall be construed to include such Person's successors and assigns, (c) the
      words "herein," "hereof" and "hereunder," and words of similar import, shall
      be
      construed to refer to this Agreement in its entirety and not to any particular
      provision hereof, (d) all references herein to Articles, Sections, Exhibits
      and
      Exhibits shall be construed to refer to Articles and Sections of, and Exhibits
      and Exhibits to, this Agreement, (e) the words "asset" and "property" shall
      be
      construed to have the same meaning and effect and to refer to any and all
      tangible and intangible assets and properties, including cash, securities,
      accounts and contract rights, (f) whenever this Agreement provides that any
      consent or approval will not be "unreasonably withheld" or words of like import,
      the same shall be deemed to include within its meaning that such consent or
      approval will not be unreasonably delayed, and (g) all references to a time
      of
      day shall mean Mountain Time, unless otherwise provided.

     

    1.4  Additional
      Defined Terms

    .
      The
      following terms are defined in the following Sections:

     

    "Additional
      Costs" Section
      5.1

    "Advance
      Date" Section
      2.2(h)

    "Advanced
      Amount" Section
      13.11(b)

    "Base
      Building Substantial Completion Conditions" Section
      6.3

    "Bond
      Financing" Section
      10.14

    "Breakage
      Costs" Section
      5.5

    "Condemnation
      Threshold Amount" Section
      11.2(a)

    "Contingency
      Fund" Section
      7.4(a)

    "Controlled
      Account Agreement" Section
      14.24(a)(i)

    "Controlled
      Account Collateral" Section
      14.24(c)

    "Default
      Cure Period" Section
      13.11(f)

    "Defaulting
      Lender" Section
      13.11(a)

    "Deficiency
      Deposit" Section
      7.2(b)

    "Environmental
      Liens" Section
      9.11(a)

    "Event
      of
      Default" Article
      XII

    "Extended
      Maturity Date" Section
      4.1

    "Extension
      Fee" Section
      4.1(f)

    "Extension
      Notice" Section
      4.1(a)

    "Extension
      Option" Section
      4.1

    "Extension
      Period" Section
      4.1 

    "In
      Balance" Section
      7.2(a)

    "Information"
      Section
      14.22

    "Insurance
      Premiums" Section
      9.5(d)

    "Insurance
      Threshold Amount" Section
      11.2(a)

    "Interest
      Reserve" Section
      7.5(a)

    "Late
      Charge" Section
      3.3

    "Lay-Down
      Yard" Section
      9.20

    "Loan"
      and "Loans" Section
      2.1(a)

    "Loan
      Transactions" Section
      2.2(k)

    "Losses"
      Section
      14.4

    "Maximum
      Rate" Section
      14.23

    "Non-Defaulting
      Lender" Section
      13.11(a)

    "Off-Site
      Stored Furnishings" Section
      9.20

    "Off-Site
      Stored Materials" Section
      9.20

    "On-Site
      Stored Materials" Section
      9.20

    "Payee"
      Section
      2.2(h)

    "Policy"
      and "Policies" Section
      9.5(b)

    "Payor"
      Section
      2.2(h)

    "Project
      Budget Line-Item" Section
      7.3(a)

    "Rejected
      Lender" Section
      10.3(d)

    "Replacement
      Lender" Section
      13.11(g)

    "Required
      Payment" Section
      2.2(h)

    "Restoration"
      Section
      11.1(a)

    "Retainage"
      Section
      7.6(a)

    "Significant
      Casualty" Section
      11.2(b)

    "Significant
      Condemnation Event" Section
      11.2(b)

    "Special
      Advance Lender" Section
      13.11(a)

    "Syndication"
      Section
      14.7(c)

    "Unpaid
      Amount" Section
      13.11(b)

     

    ARTICLE
      II  

     

    

     

    THE
      LOAN FACILITY

     

    2.1  Loans.

     

    (a)  Each
      Lender severally agrees, on the terms and conditions of this Agreement, to
      make
      loans (each advance of such a loan being a "Loan"
      and
      collectively, the "Loans")
      on a
      non-revolving basis to Borrower in Dollars from time to time in amounts equal
      to
      its Proportionate Share of the aggregate amount of Loans to be made at such
      time; provided,
      however,
      that
      (i) in no event shall the aggregate principal amount advanced by each Lender
      exceed the applicable Lender's Commitment, subject to the provisions of Section
      13.11;
      (ii) no
      more than five (5) LIBOR Rate Loans may be in effect at any one time provided
      that all LIBOR Rate Loans with the same Interest Period (commencing and ending
      on the same day) shall be considered one LIBOR Rate Loan for the purposes of
      this Section 2.1(a);
      and
      (iii) the Loans shall be advanced for the payment of Project Costs in accordance
      with the Project Budget.

     

    (b)  Subject
      to the terms of this Agreement, Borrower may borrow the Loans by Type, which
      shall mean as Base Rate Loans and/or LIBOR Rate Loans, and such Loans may be
      Converted or Continued pursuant to Section 2.7.

     

    2.2  Borrowings;
      Certain Notices. 

     

    (a)  Notices
      by the Borrower to Administrative Agent regarding (i) requests for Loans; (ii)
      the Continuations or Conversions of Loans, (iii) optional prepayments of the
      Loans, and (iv) requests for disbursements from the Purchaser Upgrade Deposit
      Account, shall be irrevocable and shall be effective only if received by
      Administrative Agent not later than 1:00 p.m. Mountain time, on the number
      of
      Business Days prior to the date of the requested actions as specified
      below:

    

    
      	
              Notice

            	
              Number
                of Business Days Prior

            
	
               

              Request
                For Loan Advance

            	
               

              7

            
	
               

              Designation
                of Applicable Interest Period

            	
               

              2
                prior to last day of 

               

              applicable
                LIBOR Period 

               

              (or,
                for initial advance, 

               

              3
                days prior to initial advance)

            
	
               

              Requests
                for disbursements from the Purchaser Upgrade Deposit Account or Optional
                Prepayment

            	
               

              3

            

    

    

    Each
      Request for Loan Advance or Request for Continuation or Conversion shall (1)
      be
      duly completed and signed by an Authorized Officer of Borrower, (2) be
      accompanied by all of the applicable documents and materials, required pursuant
      to Article
      VI
      and
Article
      VII,
      (3)
      specify the amount (subject to Section 2.2(k)),
      of
      such proposed Loan Transaction, and the date (which shall be a Business Day)
      of
      such proposed Loan Transaction, as applicable, and (4) in the case of a Request
      for Loan Advance, be accompanied by all documentation required by this Agreement
      as a condition precedent to the applicable Loans. Two (2) business days prior
      to
      the date of the proposed Loan Transaction, Borrower shall specify the Interest
      Period and shall specify the Loans to which such requested Interest Period
      is to
      relate. If Borrower fails to select the duration of any Interest Period for
      any
      LIBOR Rate Loan within the time period (i.e., three (3) Business Days prior
      to
      the first day of the next applicable Interest Period) and otherwise as provided
      in this Section 2.2(a),
      such
      Loan (if outstanding as a LIBOR Rate Loan) will be automatically Continued
      as a
      LIBOR Rate Loan with an Interest Period of one (1) month on the last day of
      the
      current Interest Period for such Loan (based on LIBOR determined two (2)
      Business Days prior to the first day of the next Interest Period). Requests
      for
      disbursements from the Purchaser Upgrade Deposit Account shall be delivered
      in
      writing as set forth above and shall contain such information and documentation
      as Administrative Agent deems reasonably necessary, which shall in no event
      be
      greater than the information and document requirement for a Loan
      Advance.

     

    (b)  Funds
      for Borrowing.
      Not
      less than six (6) Business Days prior to any Funding Date, Administrative Agent
      shall notify the Lenders in writing of its receipt of a Request for Loan Advance
      (and shall, within a reasonable time after being requested by a Lender, deliver
      or cause to be delivered to such Lender a copy of the Request for Loan Advance
      and supporting documentation). Not less than two (2) Business Days prior to
      any
      Funding Date, Administrative Agent shall notify Lender in writing of (i) its
      determination that all conditions to the advance of Loan proceeds requested
      pursuant thereto have been satisfied by Borrower or, subject to Article XIII
      below,
      waived by Administrative Agent; and (ii) the Funding Date on which each Lender's
      Loan in respect thereof is required to be made. Not later than 10:00 a.m.
      Mountain time on the Funding Date specified by Administrative Agent, each Lender
      shall make available to Administrative Agent at the Administrative Agent's
      Account, in immediately available funds, such Lender's Proportionate Share
      of
      the portion of the Loan to be made pursuant to such Request for Loan
      Advance.

     

    (c)  Disbursement
      to Borrower.
      Prior
      to 2:00 p.m. Mountain time on the applicable Funding Date, Administrative Agent
      shall, subject to the determination by Administrative Agent that all conditions
      to the advance of Loan proceeds or for a disbursement from the Purchaser Upgrade
      Deposit Account requested pursuant to the applicable Request for Loan Advance
      or
      Request for Purchaser Upgrade Deposit Account disbursement have been satisfied
      by Borrower or, waived by Administrative Agent, disburse the amounts made
      available to Administrative Agent by the Lenders pursuant to Section
2.2(b)
      above
      (and such funds made available to Administrative Agent pursuant to Section
      13.11
      below)
      in like funds, or funds from the Purchaser Upgrade Deposit Account, as
      applicable, at Borrower's direction as set forth in the Request for Loan Advance
      or Request for Purchaser Upgrade Deposit Account disbursement, or, during the
      continuance of an Event of Default, at the election of Administrative Agent,
      (i)
      to the Borrower for disbursement in accordance with the Request for Loan Advance
      and application in accordance with the requirements of the Loan Documents,
      (ii)
      directly to General Contractor or other party any costs payable to such party,
      or (iii) at the Borrower's expense, to the Title Company, with instructions
      to
      such Person to pay said monies to the parties as so instructed by Administrative
      Agent. The execution of this Agreement by Borrower shall, and hereby does,
      constitute an irrevocable authorization to Administrative Agent to make direct
      advances provided for in this Section 2.2(c)
      and no
      further authorization from the Borrower shall be necessary to warrant such
      direct advances, and all such direct advances shall be secured by the Security
      Instrument as fully as if made directly to Borrower, regardless of the
      disposition thereof by any party so paid. At Administrative Agent's request,
      any
      advance of Loan proceeds made by and through the Title Company may be made
      pursuant to the provisions of a construction escrow agreement in the form then
      in use by such company with such Modifications thereto as are reasonably
      required by Administrative Agent. Borrower agrees to join as a party to such
      escrow agreement and to comply with the requirements set forth therein (which
      shall be in addition to and not in substitution for the requirements contained
      in this Agreement) and to pay the fees and expenses of the Title Company charged
      in connection with the performance of its duties under such construction escrow
      agreement.

     

    (d)  Funds
      Transfer Disbursements.
      Notwithstanding anything to the contrary contained herein, Borrower hereby
      authorizes Administrative Agent to disburse the proceeds of any Loan(s) made
      by
      Lenders hereunder as requested by an authorized representative of the Borrower
      to any of the accounts designated in that certain Transfer Authorizer
      Designation attached hereto as Exhibit
      J.
      Borrower agrees to be bound by any transfer request: (i) authorized or
      transmitted by Borrower; or, (ii) made in Borrower's name and accepted by
      Administrative Agent in good faith and in compliance with these transfer
      instructions, even if not properly authorized by Borrower. Borrower further
      agrees and acknowledges that Administrative Agent may rely solely on any bank
      routing number or identifying bank account number or name provided by Borrower
      to effect a wire or funds transfer even if the information provided by Borrower
      identifies a different bank or account holder than named by the Borrower.
      Administrative Agent is not obligated or required in any way to take any actions
      to detect errors in information provided by Borrower. If Administrative Agent
      takes any actions in an attempt to detect errors in the transmission or content
      of transfer or requests or takes any actions in an attempt to detect
      unauthorized funds transfer requests, Borrower agrees that no matter how many
      times Administrative Agent takes these actions, Administrative Agent will not
      in
      any situation be liable for failing to take or correctly perform these actions
      in the future and such actions shall not become any part of the transfer
      disbursement procedures authorized under this provision, the Loan Documents,
      or
      any agreement between Administrative Agent and Borrower. Borrower agrees to
      notify Administrative Agent of any errors in the transfer of any funds or of
      any
      unauthorized or improperly authorized transfer requests within 14 days after
      Administrative Agent's confirmation to Borrower of such transfer. Administrative
      Agent will, in its sole discretion, determine the funds transfer system and
      the
      means by which each transfer will be made. Administrative Agent may delay or
      refuse to accept a funds transfer request if the transfer would: (i) violate
      the
      terms of this authorization (ii) require use of a bank unacceptable to
      Administrative Agent or prohibited by government authority; (iii) cause
      Administrative Agent to violate any Federal Reserve or other regulatory risk
      control program or guideline, or (iv) otherwise cause Administrative Agent
      to
      violate any applicable law or regulation. Administrative Agent shall not be
      liable to Borrower or any other parties for (i) errors, acts or failures to
      act
      of others, including other entities, banks, communications carriers or
      clearinghouses, through which Borrower's transfers may be made or information
      received or transmitted, and no such entity shall be deemed an agent of the
      Administrative Agent, (ii) any loss, liability or delay caused by fires,
      earthquakes, wars, civil disturbances, power surges or failures, acts of
      government, labor disputes, failures in communications networks, legal
      constraints or other events beyond Administrative Agent's control, or (iii)
      any
      special, consequential, indirect or punitive damages, whether or not (a) any
      claim for these damages is based on tort or contract or (b) Administrative
      Agent
      or Borrower knew or should have known the likelihood of these damages in any
      situation. Administrative Agent makes no representations or warranties other
      than those expressly made in this Agreement.

     

    (e)  Payments
      by Borrower.
      Except
      to the extent otherwise provided herein, all payments of principal, interest
      and
      other amounts to be made by the Borrower under this Agreement, the Notes, and
      any other Loan Document, shall be made in U.S. Dollars, in immediately available
      funds, without deduction, set-off or counterclaim, to Administrative Agent
      (for
      the benefit of the Lenders) at Administrative Agent's Account, not later than
      12:00 noon Mountain time, on the date on which such payment shall be due (each
      such payment made after such time on such due date to be deemed to have been
      made on the next succeeding Business Day).

     

    (f)  Application
      of Payments.
      Provided no Event of Default then exists, Borrower shall, at the time of making
      each payment under this Agreement, any Note or any other Loan Document for
      the
      account of any Lender, be entitled to specify to Administrative Agent (which
      shall so notify the intended recipient(s) thereof) the Loans or other amounts
      to
      which such payment is to be applied (and if Borrower fails to so specify, or
      if
      an Event of Default exists, Administrative Agent may distribute such payment
      to
      the Lenders for application in such manner as it, subject to
      Section 2.2(i),
      may
      determine to be appropriate).

     

    (g)  Payments
      to Lenders.
      Provided Administrative Agent has received such payment by 12:00 noon Mountain
      time, each payment received by Administrative Agent under this Agreement, the
      Notes or any other Loan Document for account of the Lenders shall, to the extent
      reasonably possible, be paid by Administrative Agent to such Lender by 3:00
      p.m.
      Mountain time on the Business Day on which Administrative Agent received such
      payment, in immediately available funds, at the account designated in writing
      by
      such Lender from time to time. If Administrative Agent has not received such
      payment by 12:00 noon Mountain time, such payment shall, to the extent
      reasonably possible, be paid by Administrative Agent to such Lender by 10:00
      a.m. Mountain time on the next Business Day following the Business Day on which
      Administrative Agent received such payment, in immediately available funds,
      at
      the account designated in writing by such Lender from time to time. In the
      event
      Administrative Agent fails to make payments to Lenders as set forth in this
      Section 2.2(g),
      the
      amount of such payments shall accrue interest at the Federal Funds Rate until
      paid.

     

    (h)  Non-Receipt
      of Funds by Administrative Agent.
      Without
      limiting the provisions of Section 13.11
      below as
      to the Lenders, and Section 12.1
      below as
      to Borrower, unless Administrative Agent shall have been notified by a Lender
      or
      Borrower, as the case may be (for the purposes of this Section 2.2(h),
      each a
      "Payor")
      prior
      to the date on which such Payor is required to make payment to Administrative
      Agent of (in the case of a Lender pursuant to Section 2.2(b)
      above)
      the proceeds of a Loan to be made by such Payor hereunder, or (in the case
      of
      the Borrower pursuant to Section 2.2(d)
      above) a
      payment to Administrative Agent for the account of one or more of the Lenders
      hereunder (such payment being herein called a "Required
      Payment"),
      which
      notice shall be effective upon receipt, that such Payor does not intend to
      make
      such Required Payment to Administrative Agent, Administrative Agent may assume
      that such Required Payment has been made and may, in reliance upon such
      assumption (but shall not be required to), make the amount thereof available
      to
      the intended recipient(s) of such Required Payment (a "Payee")
      on
      such date. If such Payor has not in fact made the Required Payment to
      Administrative Agent, the Payee of such payment from Administrative Agent shall,
      within one (1) Business Day after Administrative Agent's demand therefor, repay
      to Administrative Agent the amount so paid together with interest thereon in
      respect of each day during the period commencing on the date (the "Advance
      Date")
      such
      amount was so paid by Administrative Agent until the date Administrative Agent
      recovers such amount at a rate per annum equal to (i) the Federal Funds Rate
      for
      such day in the case of payments required to be returned to Administrative
      Agent
      by any of the Lenders, or (ii) the Applicable Interest Rate due hereunder with
      respect to payments returned by the Borrower to Administrative Agent, and,
      if
      such Payee(s) shall fail to promptly make such payment, Administrative Agent
      shall be entitled to recover such amount, on demand, from the applicable Payor,
      together with interest at the aforesaid rates; provided,
      however,
      that if
      neither the Payee(s) nor applicable Payor shall return the Required Payment
      to
      Administrative Agent within three (3) Business Days of the Advance Date, then,
      retroactively to the Advance Date, such Payor and the Payee(s) shall each be
      obligated to pay interest on the Required Payment as follows:

     

    (i)  if
      the
      Required Payment shall represent a payment to be made by Borrower to the
      Lenders, Borrower and the Payee(s) shall each be obligated to pay interest
      retroactively to the Advance Date in respect of the Required Payment at the
      Default Rate (without duplication of the obligation of Borrower under Section
      3.1
      to pay
      interest on the Required Payment at the Default Rate), it being understood
      that
      the return by the recipient(s) of the Required Payment to Administrative Agent
      shall not limit such obligation of Borrower under Section 3.1
      to pay
      interest at the Default Rate in respect of the Required Payment,
      and

     

    (ii)  if
      the
      Required Payment shall represent proceeds of a Loan to be made by the Lenders
      to
      Borrower, such Payor and Borrower shall each be obligated to pay interest
      retroactively to the Advance Date in respect of the Required Payment pursuant
      to
      whichever of the rates specified in Section 3.1
      is
      applicable to the Type of such Loan (without duplication of Borrower's
      obligation to pay interest pursuant to Section 3.1
      on the
      Required Payment), it being understood that the return by Borrower of the
      Required Payment to Administrative Agent shall not limit any claim that Borrower
      may have against such Payor in respect of such Required Payment and shall not
      relieve such Payor of any obligation it may have hereunder or under any other
      Loan Documents to Borrower and no advance by Administrative Agent to Borrower
      under this Section 2.2
      shall
      release any Lender of its obligation to fund such Loan except as set forth
      in
      the following sentence. If any such Lender shall thereafter advance any such
      Required Payment to Administrative Agent, such Required Payment shall be deemed
      such Lender's applicable Loan to Borrower.

     

    (i)  Pro
      Rata Treatment.
      Except
      to the extent otherwise provided herein: (i) each borrowing from the Lenders
      shall be made by the Lenders pro rata in accordance with the amounts of their
      respective Commitments; (ii) except as otherwise provided in Section
5.4,
      LIBOR
      Rate Loans having the same Interest Period shall be allocated pro rata among
      the
      Lenders according to the amounts of their respective Commitments (in the case
      of
      the making of Loans) or their respective Loans (in the case of Conversions
      and
      Continuations of Loans); (iv) each payment or prepayment of principal of Loans
      by Borrower shall be made for account of the Lenders pro rata in accordance
      with
      the respective unpaid principal amounts of the Loans held by them; and (iv)
      each
      payment of interest on Loans by Borrower shall be made for the account of the
      Lenders pro rata in accordance with the amounts of interest on such Loans then
      due and payable to the respective Lenders.

     

    (j)  Computations.
      Interest on all LIBOR Rate Loans and Base Rate Loans shall be computed on the
      basis of a year of three hundred sixty (360) days and actual days elapsed
      (including the first day but excluding the last day) occurring in the period
      for
      which payable.

     

    (k)  Minimum
      Amounts.
      Except
      for (i) mandatory prepayments made pursuant to Section 3.5,
      (ii)
      Conversions or prepayments made pursuant to Section 5.4,
      (iii)
      prepayments made pursuant to Section 10.3(d),
      and
      (iv) advances pursuant to Sections 2.2(c),
      7.4,
      7.5
      and
7.10,
      each
      borrowing, Conversion, Continuation and optional partial prepayment of principal
      (collectively, "Loan
      Transactions")
      of
      Loans shall be in an aggregate amount at least equal to One Hundred Thousand
      and
      No/100 Dollars ($100,000.00). Loan Transactions of or into Loans of different
      Types or Interest Periods at the same time hereunder shall be deemed separate
      Loan Transactions for purposes of the foregoing, one for each Type or Interest
      Period; provided that (1) if any Loans or borrowings would otherwise be in
      a
      lesser principal amount for any period, such Loans shall be Base Rate Loans
      during such period, (2) Loans for the payment of interest due under the Notes
      may be in a lesser principal amount, and (3) if any Loans are LIBOR Rate Loans,
      additional increments shall be in a minimum amount at least equal to One Hundred
      Thousand and No/100 Dollars ($100,000.00). Notwithstanding the foregoing, the
      minimum amount of One Hundred Thousand and No/100 Dollars ($100,000.00) shall
      not apply to Conversions of lesser amounts into a Type or Interest Period that
      has (or will have upon such Conversion) an aggregate principal amount exceeding
      such minimum amount and one Interest Period.

     

    (l)  Extension
      to Next Business Day.
      If the
      due date of any payment under this Agreement or any Note would otherwise fall
      on
      a day that is not a Business Day, such date shall be extended to the next
      succeeding Business Day, and interest shall be payable for any principal so
      extended for the period of such extension; provided, however, that if such
      event
      relates to the Maturity Date, payments due on the Maturity Date shall be payable
      on the immediately preceding Business Day.

     

    2.3  Changes
      to Commitments.

     

    (a)  The
      respective Commitments shall reduce pro rata automatically by reason of any
      prepayment of the Loans applicable thereto in the amount of any such
      prepayment.

     

    (b)  If
      the
      Scheduled Maturity Date is extended in accordance with Section 4.1,
      Borrower may elect to reduce the amount of the unused Commitments which shall
      be
      available during the Extension Period by notifying Administrative Agent of
      such
      reduced Commitment amounts in its Extension Notice.

     

    (c)  The
      Commitments, once terminated or reduced, may not be reinstated. Each termination
      or reduction of the Commitments shall be made ratably among the Lenders in
      accordance with their respective Commitments.

     

    2.4  Lending
      Offices

    .
      The
      Loans of each Type made by each Lender shall be made and maintained at such
      Lender's Applicable Lending Office for Loans of such Type.

     

    2.5  Several
      Obligations; Remedies Independent

    .
      The
      failure of any Lender to make any Loan to be made by it on the date specified
      therefor shall not relieve any other Lender of its obligation to make its Loan
      on such date, but no Lender nor Administrative Agent shall be responsible for
      the failure of any other Lender to make a Loan required to be made by such
      other
      Lender. The amounts payable by Borrower at any time hereunder and under the
      Note
      to each Lender shall be a separate and independent debt.

     

    2.6  Notes

    .
      The
      Loans made by each Lender shall be evidenced by its Note. No Lender shall be
      entitled to have its Note substituted or exchanged for any reason, or subdivided
      for promissory notes of lesser denominations. In the event of the loss, theft
      or
      destruction of any Note, upon Borrower's receipt of a reasonably satisfactory
      indemnification agreement executed in favor of Borrower by the holder of such
      Note, or in the event of the mutilation of any Note, upon the surrender of
      such
      mutilated Note by the holder thereof to Borrower, Borrower shall execute and
      deliver to such holder a replacement Note in lieu of the lost, stolen, destroyed
      or mutilated Note. The Notes shall not be necessary to establish the
      indebtedness of the Borrower to the Lenders on account of advances made under
      this Agreement.

     

    2.7  Conversion
      and Continuations of Loans.

     

    (a)  Subject
      to Section 2.2(j),
      Borrower shall have the right to Convert Loans of one Type into Loans of another
      Type or Continue Loans of one Type as Loans of the same Type at any time or
      from
      time to time until one (1) month preceding the Maturity Date; provided that:
      (i)
      Borrower shall give Administrative Agent notice of each such Conversion or
      Continuation as provided in Section 2.2(a)
      above,
      (ii) LIBOR Rate Loans may be prepaid or Converted only on the last day of an
      Interest Period for such Loans unless Borrower complies with the terms of
      Section 5.5,
      (iii)
      subject to Sections 5.1
      and
5.3,
      any
      Conversion or Continuation of Loans shall be pro rata among the Lenders, (iv)
      each Interest Period that commences on the last Business Day of a calendar
      month
      (or on any day for which there is no numerically corresponding day in the
      appropriate subsequent calendar month) shall end on the last Business Day of
      the
      appropriate subsequent calendar month; (v) each Interest Period that would
      otherwise end on a day that is not a Business Day shall end on the next
      succeeding Business Day (or, if such next succeeding Business Day falls in
      the
      next succeeding calendar month, on the immediately preceding Business Day);
      (vi)
      no Interest Period shall have a duration of less than one (1) month; (vii)
      in no
      event shall any Interest Period extend beyond the Maturity Date; and (viii)
      there may be no more than 5 separate Interest Periods in respect of LIBOR Rate
      Loans outstanding from each Lender at any one time. Notwithstanding the
      foregoing, and without limiting the rights and remedies of Administrative Agent
      and the Lenders under Article
      XII,
      in the
      event that any Event of Default exists, Administrative Agent may (and at the
      request of the Required Lenders shall) suspend the right of Borrower to Convert
      any Loan into a LIBOR Rate Loan or Continue any Loan as a LIBOR Rate Loan for
      so
      long as such Event of Default remains outstanding, in which event all Loans
      shall be converted (on the last day(s) of the respective Interest Periods
      therefor) or Continued, as the case may be, as Base Rate Loans.

     

    (b)  Notwithstanding
      Section 2.7(a)
      above,
      (i) Borrower shall not be entitled to select a LIBOR Period that does not end
      on
      or before the Maturity Date; (ii) on each date for determination of LIBOR,
      the
      Administrative Agent shall determine the applicable LIBOR-Based Rate (which
      determination shall be conclusive in the absence of manifest error) and shall
      promptly give notice of the same to Borrower and Lender by telephone, telecopier
      or electronic mail; and (iii) during the existence of an Event of Default,
      Borrower may not elect a LIBOR-Based Rate. Lender shall be deemed to have funded
      its Loans that bear interest at the LIBOR-Based Rate from LIBOR deposits
      obtained by Lender, regardless of whether Lender has funded such LIBOR-Based
      Loan from another source.

     

    

     

    ARTICLE
      III  

     

    

     

    PAYMENTS
      OF INTEREST AND PRINCIPAL

     

    3.1  Interest.

     

    (a)  Borrower
      hereby promises to pay to Administrative Agent for account of each Lender
      interest on the unpaid principal amount of each Loan made by such Lender for
      the
      period from and including the date of such Loan to but excluding the date such
      Loan shall be paid in full, at the Applicable Interest Rate.

     

    (b)  Accrued
      interest on each Loan shall be payable, in arrears, monthly on each Payment
      Date
      subject to Section 7.5(b);
      provided that (i) in the case of payment or prepayment of all or a portion
      of a
      Loan, interest accrued thereon shall be payable at the time of such payment
      or
      prepayment and (ii) interest payable at the Default Rate shall be payable from
      time to time on demand. Subject to the provisions of Article
      VI
      and
Article
      VII,
      such
      accrued interest shall be payable from the Interest Reserves established
      pursuant to the Project Budget; provided,
      however,
      that
      the allocation of Loan funds to the Interest Reserve shall not limit Borrower's
      obligation to pay such accrued interest.

     

    (c)  Notwithstanding
      anything to the contrary contained herein, after the Maturity Date and during
      any period when an Event of Default exists, Borrower shall pay to Administrative
      Agent for the account of each Lender interest at the Default Rate on (i) the
      outstanding principal amount of any Loan made by such Lender, (ii) any interest
      payments thereon not paid when due, and (iii) on any other amount payable by
      Borrower hereunder, under the Notes and any other Loan Documents.

     

    (d)  Promptly
      after the determination of any interest rate provided for herein or any change
      therein, Administrative Agent shall give notice thereof to the Lenders to which
      such interest is payable and to Borrower, but the failure of Administrative
      Agent to provide such notice shall not affect Borrower's obligation for the
      payment of interest on the Loans.

     

    3.2  Repayment
      of Loans

    .
      Borrower hereby promises to pay to Administrative Agent for the account of
      each
      Lender the principal of such Lender's outstanding Loans, together with accrued
      and unpaid interest, fees and all other amounts due under the Loan Documents,
      on
      the Maturity Date.

     

    3.3  Late
      Charge

    .
      In
      addition to any sums due under Section 3.1(c),
      if
      Borrower fails to pay any installment of interest as provided in Sections
3.1
      and
3.2
      above,
      except the payment of principal due on the Maturity Date, within ten (10) days
      after the date on which the same is due, Borrower shall pay to Administrative
      Agent a late charge on such past-due amount, as liquidated damages and not
      as a
      penalty, equal to five percent (5.0%) of such amount (a "Late Charge"). In
      connection therewith, Borrower agrees as follows: (a) because of such late
      payment, Administrative Agent and Lender will incur certain costs and expenses
      including, without limitation, administrative costs, collection costs, loss
      of
      interest, and other direct and indirect costs in an uncertain amount; (b) it
      would be impractical or extremely difficult to fix the exact amount of such
      costs in such event; and (c) the Default Rate and the late charge are reasonable
      and good faith estimates of such costs. The application of the Default Rate
      or
      the assessment of a late charge to any such late payment as described in this
      Section 3.3
      will not
      be interpreted or deemed to extend the period for payment or otherwise limit
      any
      of Administrative Agent's or Lender's remedies hereunder or under the other
      Loan
      Documents.

     

    3.4  Optional
      Prepayments

    .
      Subject
      to the provisions of Sections 3.6
      and
5.5,
      Borrower shall have the right to prepay Loans in whole or in part, without
      premium or penalty; provided that: (a) Borrower shall give Administrative Agent
      notice of each such prepayment as provided in Section 2.2(a)
      (and,
      upon the date specified in any such notice of prepayment, the amount to be
      prepaid shall become due and payable hereunder) and (b) except as otherwise
      set
      forth in Section 2.2(k),
      partial
      prepayments shall be in the minimum aggregate principal amount of One Hundred
      Thousand and No/100 Dollars ($100,000.00), and in whole multiples of One Hundred
      Thousand and No/100 Dollars ($100,000.00) above such amount. Loans that are
      prepaid cannot be reborrowed.

     

    3.5  Mandatory
      Prepayments.

     

    (a)  Casualties;
      Condemnations.
      If a
      Casualty or Condemnation shall occur with respect to the Project, Borrower,
      upon
      Borrower's or Administrative Agent's receipt of the applicable Insurance
      Proceeds or Condemnation Award, shall prepay the Loan, if required by the
      provisions of Article
      XI,
      on the
      dates and in the amounts specified therein without premium (but subject to
      the
      provisions of Section 5.5).
      Nothing in this Section 3.5(a)
      shall be
      deemed to limit any obligation of Borrower under the Security Instrument or
      any
      other Security Document, including any obligation to remit to a collateral
      or
      similar account maintained by Administrative Agent pursuant to the Security
      Instrument or any of the other Security Documents the proceeds of insurance,
      condemnation award or other compensation received in respect of any Casualty
      or
      Condemnation.

     

    (b)  Partial
      Release or Release of Security Instrument.
      Provided no Event of Default has occurred and is continuing, Borrower shall
      have
      the right from time to time to obtain releases of: (1) individual Units and
      Unit
      Specific Personal Property with respect to the Residential Component, (2) the
      Club Component, the Club Component Personal Property, and the Shared Parking
      Garage Component, and (3) the Spa Project (provided, however, if the Spa Project
      is a separate legal parcel as contemplated by the Subdivision Agreement, the
      Spa
      Project may be released subject to the following conditions even if an Event
      of
      Default exists), from the lien of the Security Instrument following prepayment
      of the Loan as follows:

     

    (i)  Borrower
      shall provide written notice to Administrative Agent of the date such prepayment
      and/or release is intended to be made at least ten (10) days in advance thereof
      provided that such notice shall be revocable and the date of such prepayment
      and/or release shall be subject to adjustment upon such notice to Administrative
      Agent as shall be reasonably possible;

     

    (ii)  the
      subdivision plat, including the subdivision plat contemplated by the Subdivision
      Agreement, condominium map, owners' association and related documents for the
      Project shall have been approved by all applicable Governmental Authorities,
      Administrative Agent (to the extent required at the time of release) and the
      title insurance company that agrees to issue owner's title insurance policies
      to
      purchasers of the Units and all such referenced documents, where appropriate,
      shall be recorded in the Official Records;

     

    (iii)  Borrower
      (1) shall have delivered a notice to Administrative Agent specifying (A) the
      legal description of the Unit or portion of the Project to be released, and
      (B)
      the Release Price, if applicable, and each notice shall be accompanied by a
      proper instrument of release, (2) shall execute and deliver to Administrative
      Agent any other documents or instruments reasonably required by Administrative
      Agent, including, without limitation, an amendment to the Security Instrument
      with respect to a revised legal description for the Project, and (3) prior
      to
      the closing of the Unit, if applicable, shall have delivered to Administrative
      Agent and Administrative Agent shall have approved a settlement statement for
      such Unit;

     

    (iv)  Borrower
      shall have paid to Administrative Agent the Release Price for the Unit being
      released; provided, however, there is no applicable Release Price for the Spa
      Project and no amount is required to be paid to release the Spa
      Project;

     

    (v)  Administrative
      Agent shall have received such endorsements to the Title Policy as it deems
      appropriate and has confirmed that the Title Policy remains in full force and
      effect with respect to that portion of the Project not released;

     

    (vi)  after
      any
      release, the portion of the Project and the personal property Collateral not
      released shall continue to be subject to the Security Instrument;

     

    (vii)  Borrower
      shall pay Administrative Agent's reasonable fees and expenses incurred in
      connection with each such release including, but not limited to, any Breakage
      Fees required pursuant to Section 5.5;

     

    (viii)  Borrower
      shall have provided evidence to Administrative Agent that any bond assessment
      that constitutes a lien against the property has been properly allocated between
      the Unit(s) to be released and the portion of the Project not released;
      provided, however, an allocation shall be deemed proper if the allocation is
      in
      accordance with the assessed value;

     

    Furthermore,
      with respect to a request for a release of the Club Component and Shared Parking
      Garage Component (it being intended that the Shared Parking Garage shall be
      released contemporaneously with the Club Component), and for a release of the
      Spa Project, in addition to the requirements in Sections 3.5(b)(i)
      though
3.5(b)(viii)
      above,
      Borrower shall:

     

    (ix)  Provide
      evidence satisfactory to the Administrative Agent that:

     

    (1)  The
      portion of the Project to be released and the portion of the Project that would
      remain encumbered by the Deed of Trust are each legal parcels lawfully created
      and are in compliance with all subdivision laws and ordinances; and

     

    (2)  The
      remaining portions of the Project after the proposed release have the benefit
      of
      all utilities, easements, public or private streets, covenants, conditions
      or
      restrictions as may be necessary for the continued use and operation thereof
      for
      their respective intended purposes, including without limitation all ingress
      and
      egress rights and parking rights that may be necessary or intended in the Shared
      Parking Garage Component upon its release, and if, but only if the Spa Project
      has been completed, but not otherwise, all necessary or intended use rights
      pursuant to a license agreement between Borrower and Lodge Properties, Inc.,
      in
      the Spa Project upon its release.

     

    (c)  Unit
      Sales Exception.
      Notwithstanding Section 3.5(b)
      above,
      Administrative Agent shall, to accommodate the sale of Units and the release
      of
      individual Units from the Lien of the Security Instrument, upon Borrower's
      request, deliver to the Title Company executed copies of the release documents
      necessary for the separate release of the Lien of the Security Document as
      to
      each Unit, with such release documents to be held in escrow, pursuant to an
      escrow agreement in form and substance satisfactory to Administrative Agent
      and
      Borrower, pending the sale of such Units and the receipt by the Title Company
      of
      the Release Price for such Unit, provided that Borrower has delivered to
      Administrative Agent the notices required by Section 3.5(b)
      and
      Administrative Agent has not delivered any objection to the release of such
      Unit
      to the Title Company prior to the earliest date set forth for the release of
      such Unit in the notice of prepayment delivered by Borrower.

     

    (d)  Club
      Membership Deposits.
      Promptly upon receipt of a Club Membership Deposit, Borrower shall deposit
      the
      Club Membership Deposit into the Club Membership Deposit Account or provide
      a
      Deposit Letter of Credit in lieu thereof. Upon release of the Club Component,
      all Club Membership Deposits on deposit in the Club Membership Deposit Account
      shall be released and applied by the Administrative Agent to the outstanding
      balance of the Facility Amount. The Release Price paid for the release of the
      Club Component shall be reduced by the Club Membership Deposits applied to
      the
      Facility Amount. At any time that Administrative Agent receives a Deposit Letter
      of Credit complying with all of the terms set forth in the definition thereof,
      the Club Membership Deposits replaced by such Deposit Letter of Credit shall
      be
      released to Borrower for use by Borrower in the manner determined by
      Borrower.

     

    (e)  Framing
      Deposits.
      Promptly upon receipt of a Framing Deposit, Borrower shall deposit the Framing
      Deposit into the Framing Deposit Account or provide a Deposit Letter of Credit
      in lieu thereof. Upon release of a Unit in the Residential Component, the
      applicable Framing Deposit on deposit in the Framing Deposit Account shall
      be
      released and applied by the Administrative Agent to the outstanding balance
      of
      the Facility Amount. The Release Price paid for the release of the Unit in
      the
      Residential Component shall be reduced by the Framing Deposit applied to the
      Facility Amount. At any time that Administrative Agent receives a Deposit Letter
      of Credit complying with all of the terms set forth in the definition thereof,
      the Framing Deposits replaced by such Deposit Letter of Credit shall be released
      to Borrower for use by Borrower in the manner determined by
      Borrower.

     

    (f)  Covenant
      Compliance.
      If
      Borrower is not in compliance with the provisions of Section 7.2(a)(i)
      and
      (ii) or Section 9.21,
      Borrower shall prepay the Loan by such amount necessary for compliance with
      such
      provisions, as appropriate.

     

    (g)  Application.
      Prepayments pursuant to Section 3.5(a)
      above
      shall be applied to the Loans then outstanding pro rata in the order set forth
      in Section 3.8.

     

    3.6  Interest
      and Other Charges on Prepayment

    .
      If the
      Loans are prepaid, in whole or in part, pursuant to Sections 3.4
      or
3.5,
      each
      such prepayment shall be made on the prepayment date specified in the notice
      to
      Administrative Agent pursuant to Section 2.2(a)
      or as
      otherwise permitted pursuant to Section 3.5,
      and (in
      every case) together with (a) the accrued and unpaid interest on the principal
      amount prepaid, and (b) any amounts payable to the Lender pursuant to
      Section 5.5
      as a
      result of such prepayment.

     

    3.7  Lender's
      Records as to Sums Owing

    .
      Absent
      manifest error, Administrative Agent's records as to the amounts of principal,
      interest and other sums owing hereunder shall be conclusive and
      binding.

     

    3.8  Application
      of Payments Received

    .
      All
      payments received by Administrative Agent hereunder shall be applied: first,
      to
      the payment of all fees, expenses and other amounts due Administrative Agent
      or
      the Lenders hereunder (excluding principal and interest); second, to accrued
      interest; and third, the balance to outstanding principal. As to sums applied
      to
      accrued interest under clause "second" above, such prepayment shall be applied
      first to LIBOR Rate Loans of the shortest maturity so as to minimize breakage
      costs. Notwithstanding anything to the contrary set forth in this Section
3.8
      or in
      any of the Loan Documents, if an Event of Default exists, Administrative Agent
      may distribute payments to the Lenders for application in such manner as it,
      subject to Section 2.2(i),
      may
      determine to be appropriate. 

     

    3.9  Sharing
      of Payments, Etc.

     

    (a)  Sharing.
      If any
      Lender obtains from Borrower payment of any principal of or interest on any
      Loan
      owing to it or payment of any other amount under this Agreement or any other
      Loan Document through the exercise of any right of set-off, banker's lien or
      counterclaim or similar right or otherwise (other than from Administrative
      Agent
      as provided herein), and, as a result of such payment, such Lender shall have
      received a greater percentage of the principal of or interest on the Loans
      or
      such other amounts then due hereunder or thereunder by Borrower to such Lender
      than the percentage received by any other Lender, it shall promptly purchase
      from such other Lenders participations in (or, if and to the extent specified
      by
      such Lender, direct interests in) the Loans or such other amounts, respectively,
      owing to such other Lenders (or in interest due thereon, as the case may be)
      in
      such amounts, and make such other adjustments from time to time as shall be
      equitable, to the end that all the Lenders shall share the benefit of such
      excess payment (net of any expenses that may be incurred by such Lender in
      obtaining or preserving such excess payment) pro rata in accordance with the
      unpaid principal of and/or interest on the Loans or such other amounts,
      respectively, owing to each of the Lenders. To such end, all the Lenders shall
      make appropriate adjustments among themselves (by the resale of participations
      sold or otherwise) if such payment is rescinded or must otherwise be restored.
      Each Lender agrees that it shall turn over to Administrative Agent (for
      distribution by Administrative Agent to the other Lenders in accordance with
      the
      terms of this Agreement) any payment (whether voluntary or involuntary, through
      the exercise of any right of setoff or otherwise) on account of the Loans held
      by it in excess of its ratable portion of payments on account of the Loans
      obtained by all the Lenders.

     

    (b)  Rights
      of Lenders; Bankruptcy.
      Nothing
      contained herein shall require any Lender to exercise any such right or shall
      affect the right of any Lender to exercise, and retain the benefits of
      exercising, any such right with respect to any other indebtedness or obligation
      of Borrower. If, under any applicable bankruptcy, insolvency or other similar
      law, any Lender receives a secured claim in lieu of a set-off to which Section
      14.10
      applies,
      then such Lender shall, to the extent practicable, exercise its rights in
      respect of such secured claim in a manner consistent with the rights of the
      Lenders entitled under Section 14.10
      to share
      in the benefits of any recovery on such secured claim.

     

    ARTICLE
      IV  

     

    

     

    EXTENSION
      OF THE MATURITY DATE

     

    4.1  Extension
      of Scheduled Maturity Date

    .
      Borrower may, at its option, extend the Scheduled Maturity Date for a period
      (the "Extension
      Period")
      of six
      (6) months (and the end of such period, the "Extended
      Maturity Date"),
      subject to the satisfaction of the following conditions (the "Extension
      Option"):

     

    (a)  Borrower
      shall notify (the "Extension
      Notice")
      Administrative Agent of Borrower's exercise of such option at least ninety
      (90)
      days, but not more than one hundred eighty (180) days prior to the Scheduled
      Maturity Date;

     

    (b)  As
      of the
      date of the Extension Notice and as of the Scheduled Maturity Date, (i) no
      Event
      of Default then exists, (ii) no Default then exists or would result from the
      extension of the maturity of the Loans for the Extension Period; (iii) the
      Loans
      are In Balance; (iv) Completion of the construction of the Improvements shall
      have occurred; (v) no liens shall exist against the Project; (vi) the Minimum
      Loan Coverage Ratio requirement shall be met; and (vii) Borrower shall have
      sold
      all thirteen (13) Units of the Residential Component and closed on the sale
      of
      at least seven (7) Units from the Residential Component of the Project pursuant
      to the terms of Qualified Purchase Contracts, but at sales prices of no less
      than the amount set forth in Exhibit
      D.

     

    (c)  Borrower
      and each Guarantor shall have executed and delivered to Administrative Agent
      such Modifications to and reaffirmations of the Loan Documents as Administrative
      Agent may reasonably require in connection with the foregoing.

     

    (d)  Whether
      or not the extension becomes effective, Borrower shall pay all reasonable and
      actual out-of-pocket costs and expenses incurred by Administrative Agent in
      connection with the proposed extension (pre- and post-closing), including
      appraisal fees and legal fees; all such costs and expenses shall be due and
      payable upon demand, and any failure to pay such amounts shall constitute a
      Default under this Agreement and the Loan Documents;

     

    (e)  Not
      later
      than the initial Scheduled Maturity Date, (i) the extension shall have been
      documented to the Lenders' reasonable satisfaction unless the failure to so
      document the extension is not the fault of Borrower and consented to by
      Borrower, Administrative Agent and all the Lenders, and (ii) Administrative
      Agent shall have been provided with an updated title report and judgment and
      lien searches, and appropriate title insurance endorsements shall have been
      issued as required by Administrative Agent;

     

    (f)  On
      the
      Scheduled Maturity Date, Borrower shall pay to Administrative Agent (for payment
      to the Lenders in accordance with their respective Proportionate Shares) an
      extension fee in the amount of one-eighth of one percent (0.125%) of the total
      Commitments of all Lenders (whether disbursed or undisbursed), which Commitments
      may have been reduced by prepayments by Borrower of principal on the Loans
      as
      permitted by the terms of this Agreement and may be reduced as part of the
      exercise of the Extension Option as set forth in Section 2.3(b)
      (the
      "Extension
      Fee").

     

    Any
      such
      extension shall be otherwise subject to all of the other terms and provisions
      of
      this Agreement and the other Loan Documents.

     

    ARTICLE
      V  

     

    

     

    INCREASED
      COSTS, LIBOR AVAILABILITY, ILLEGALITY, ETC.

     

    5.1  Costs
      of Making or Maintaining LIBOR Rate Loans

    .
      Borrower shall pay to Administrative Agent (for the benefit of the applicable
      Lender) from time to time such amounts as any Lender may determine to be
      necessary to compensate such Lender for any costs that such Lender determines
      are attributable to its making or maintaining of any LIBOR Rate Loans or its
      obligation to make any LIBOR Rate Loans hereunder (in each case, as opposed
      to
      Base Rate Loans), or, subject to the following provisions of this Article
      V,
      any
      reduction in any amount receivable by such Lender hereunder in respect of any
      of
      such LIBOR Rate Loans or such obligation (such increases in costs and reductions
      in amounts receivable being herein called "Additional
      Costs"),
      provided such Additional Costs result from any Regulatory Change
      that:

     

    (a)  shall
      subject any Lender (or its Applicable Lending Office for any of such LIBOR
      Rate
      Loans) to any tax, duty or other charge in respect of such LIBOR Rate Loans
      or
      its Note or changes the basis of taxation of any amounts payable to such Lender
      under this Agreement or its Note in respect of any of such LIBOR Rate Loans
      (other than Excluded Taxes); or

     

    (b)  imposes
      or Modifies any reserve, special deposit or similar requirements (other than
      the
      Reserve Requirement utilized in the determination of the Adjusted LIBOR for
      such
      LIBOR Rate Loan) relating to any extensions of credit or other assets of, or
      any
      deposits with or other liabilities of, such Lender (including any of such LIBOR
      Rate Loans or any deposits referred to in the definition of "LIBOR" in Section
      1.1),
      or any
      commitment of such Lender (including the Commitment of such Lender hereunder);
      or

     

    (c)  imposes
      any other condition affecting this Agreement or its Note (or any of such
      extensions of credit or liabilities) or its Commitment.

     

    If
      any
      Lender requests compensation from Borrower under this Section 5.1,
      Borrower may, by notice to such Lender (with a copy to Administrative Agent),
      suspend the obligation of such Lender thereafter to make or Continue LIBOR
      Rate
      Loans, or Convert Base Rate Loans into LIBOR Rate Loans, until the Regulatory
      Change giving rise to such request ceases to be in effect or until Borrower
      notifies such Lender that Borrower is lifting such suspension (in which case
      the
      provisions of Section 5.4
      shall be
      applicable); provided that such suspension shall not affect the right of such
      Lender to receive the compensation so requested for so long as any LIBOR Rate
      Loan remains in effect.

     

    5.2  Limitation
      on LIBOR Rate Loans; LIBOR Not Available

    .
      Anything herein to the contrary notwithstanding, if, on or prior to the
      determination of any LIBOR for any Interest Period for any LIBOR Rate
      Loan:

     

    (a)  Administrative
      Agent determines, which determination shall be conclusive absent manifest error,
      that quotations of interest rates for the relevant deposits referred to in
      the
      definition of "LIBOR" are not being provided in the relevant amounts or for
      the
      relevant maturities for purposes of determining rates of interest for LIBOR
      Rate
      Loans as provided herein; or

     

    (b)  the
      Required Lenders determine, which determination shall be conclusive absent
      manifest error, and notify Administrative Agent that the relevant rates of
      interest referred to in the definition of "LIBOR" upon the basis of which the
      rate of interest for LIBOR Rate Loans for such Interest Period is to be
      determined are not likely adequate to cover the cost to such Lenders of making
      or maintaining LIBOR Rate Loans for such Interest Period;

     

    then
      Administrative Agent shall give Borrower and each Lender prompt notice thereof
      and, so long as such condition remains in effect, the Lenders shall be under
      no
      obligation to make additional LIBOR Rate Loans, or to Continue LIBOR Rate Loans
      or to Convert Base Rate Loans into LIBOR Rate Loans, and Borrower shall, on
      the
      last day(s) of the then current Interest Period(s) for the outstanding LIBOR
      Rate Loans, either prepay such LIBOR Rate Loans or, in accordance with Section
      2.7,
      Convert
      such LIBOR Rate Loans into Base Rate Loans or other LIBOR Rate Loans in amounts
      and maturities which are still being provided. Notwithstanding the foregoing,
      (i) if the applicable conditions under Sections 5.2(a)
      or
5.2(a)
      above
      affect only a portion of LIBOR Rate Loans, the balance of LIBOR Rate Loans
      may
      continue as LIBOR Rate Loans and (ii) if the applicable conditions under
      Sections 5.2(a)
      and
5.2(b)
      only
      affect certain Interest Periods, Borrower, subject to the terms and conditions
      of this Agreement, may elect to have LIBOR Rate Loans with such other Interest
      Periods.

     

    5.3  Illegality

    .
      Notwithstanding any other provision of this Agreement, if it becomes unlawful
      for any Lender or its Applicable Lending Office to honor its obligation to
      make
      or maintain LIBOR Rate Loans hereunder, then such Lender shall promptly notify
      Administrative Agent thereof (who shall notify Borrower), and such Lender's
      obligation to make or Continue, or to Convert Loans of any other Type into
      LIBOR
      Rate Loans, shall be suspended until such time as such Lender may again make
      and
      maintain LIBOR Rate Loans (in which case the provisions of Section 5.4
      shall be
      applicable).

     

    5.4  Treatment
      of Affected Loans

    .
      If the
      obligation of any Lender to make LIBOR Rate Loans or to Continue or to Convert
      Base Rate Loans into LIBOR Rate Loans shall be suspended pursuant to Sections
      5.1
      or
5.3,
      then
      such Lender's LIBOR Rate Loans shall be automatically Converted into Base Rate
      Loans on the last day(s) of the then current Interest Period(s) for LIBOR Rate
      Loans (or, in the case of a Conversion resulting from a circumstance described
      in Section 5.3,
      on such
      earlier date as such Lender may specify to Borrower with a copy to
      Administrative Agent) and, unless and until either (i) such Lender gives notice
      as provided below that the circumstances specified in Sections 5.1
      or
5.3
      that
      gave rise to such conversion no longer exist or (ii) Borrower, in the case
      of
      Section 5.1,
      ends
      any suspension by Borrower:

     

    (a)  to
      the
      extent that such Lender's LIBOR Rate Loans have been so Converted, all payments
      and prepayments of principal that would otherwise be applied to such Lender's
      LIBOR Rate Loans shall be applied instead to its Base Rate Loans;
      and

     

    (b)  all
      Loans
      that would otherwise be made or Continued by such Lender as LIBOR Rate Loans
      shall be made or Continued instead as Base Rate Loans, and all Base Rate Loans
      of such Lender that would otherwise be Converted into LIBOR Rate Loans shall
      remain as Base Rate Loans.

     

    If
      such
      Lender gives notice to Borrower with a copy to Administrative Agent that the
      circumstances specified in Sections 5.1
      or
5.3
      that
      gave rise to the Conversion of such Lender's LIBOR Rate Loans pursuant to this
      Section 5.4
      no
      longer exist (which notice such Lender agrees to give promptly upon such
      circumstances ceasing to exist) or Borrower terminates its applicable suspension
      at a time when LIBOR Rate Loans made by other Lenders are outstanding, such
      Lender's Base Rate Loans shall be automatically Converted, on the first day(s)
      of the next succeeding Interest Period(s) for such outstanding LIBOR Rate Loans,
      to the extent necessary so that, after giving effect thereto, all Base Rate
      and
      LIBOR Rate Loans are allocated among the Lenders ratably (as to principal
      amounts, Types and Interest Periods) in accordance with their respective
      Commitments.

     

    5.5  Compensation

    .
      Borrower shall pay to Administrative Agent for account of each Lender, upon
      the
      request of such Lender through Administrative Agent, such amount or amounts
      as
      shall be sufficient to compensate it for any loss, cost or expense (including,
      without limitation, any loss or expense sustained or incurred in obtaining,
      liquidating or employing deposits or other funds acquired to effect, fund or
      maintain any LIBOR Rate Loan) (collectively, "Breakage
      Costs")
      that
      such Lender determines is attributable to:

     

    (a)  any
      failure by Borrower for any reason (including the failure of any of the
      conditions precedent specified in Article
      VI
      or
Article
      VII
      to be
      satisfied) to (i) borrow a LIBOR Rate Loan from such Lender (other than the
      default of such Lender) on the date for such borrowing specified in the relevant
      Request for Loan Advance, or (ii) Continue or Convert a Loan on a date specified
      therefor in a notice thereof;

     

    (b)  except
      as
      provided in Section 3.5(a),
      any
      payment, mandatory or optional prepayment or Conversion of a LIBOR Rate Loan
      made by such Lender for any reason (including the acceleration of the Loans
      pursuant to Article
      XII)
      on a
      date other than the last day of the applicable Interest Period;

     

    (c)  any
      failure by Borrower for any reason to prepay a LIBOR Rate Loan pursuant to
      a
      notice of prepayment given in accordance with Section 3.4;
      or

     

    (d)  the
      occurrence of any Event of Default, including, but not limited to, any loss
      or
      expense sustained or incurred or to be sustained or incurred in liquidating
      or
      employing deposits from third parties acquired to effect or maintain a LIBOR
      Rate Loan.

     

    Without
      limiting the effect of the preceding sentence, such compensation shall include,
      without limitation, an amount equal to the excess, if any, of (a) the amount
      of
      interest that otherwise would have accrued on the principal amount so paid,
      prepaid, Converted or not borrowed for the period from the date of such payment,
      prepayment, Conversion or failure to borrow to the last day of the then current
      Interest Period for such Loan (or, in the case of a failure to borrow, the
      Interest Period for such Loan that would have commenced on the date specified
      for such borrowing) at the applicable Adjusted LIBOR for such Loan provided
      for
      herein over (b) the amount of interest that such Lender would earn on such
      principal amount for such period if such Lender would have bid in the London
      interbank market for Dollar deposits of leading banks in amounts comparable
      to
      such principal amount and with maturities comparable to such period (as
      reasonably determined by such Lender), or if such Lender shall not, or shall
      cease to, make such bids, the equivalent rate, as reasonably determined by
      such
      Lender, derived from Telerate Page 3750 or other publicly available source
      as
      described in the definition of "LIBOR").
      A
      certificate of any Lender setting forth any amount or amounts that such Lender
      is entitled to receive pursuant to this Section 5.5
      shall be
      delivered to Borrower and shall be conclusive absent manifest error. Borrower
      shall pay such Lender the amount shown as due on any such certificate within
      ten
      (10) days after receipt thereof. Any payment due to any of the Lenders pursuant
      to this Section 5.5
      shall be
      deemed additional interest under such Lender's Note.

     

    5.6  Additional
      Waivers

    .
      Borrower acknowledges that, during any period in which Borrower has elected
      the
      LIBOR-Based Rate as the Applicable Interest Rate, payment or prepayment of
      any
      portion of the Loan on a date other than the last day of an applicable LIBOR
      Period shall result in Lender's incurring additional costs, expenses and/or
      liabilities and that it is extremely difficult and impractical to ascertain
      the
      extent of such costs, expenses and/or liabilities, and, to the extent specified
      herein, any such payment or prepayment therefore must include the Breakage
      Costs
      and other sums set forth above. Borrower hereby expressly (a) waives any rights
      it may have under Applicable Law to prepay any portion of the Loan without
      penalty or charge, upon acceleration of the maturity of this Note, and (b)
      agrees that if a prepayment of any portion of the Loans is made, following
      any
      acceleration of the maturity of the Notes by the holders thereof on account
      of
      any transfer or disposition as prohibited or restricted by the Loan Agreement
      or
      by the Security Instrument, then Borrower shall be obligated to pay,
      concurrently therewith, as a prepayment premium, the applicable Breakage Costs
      and other sums specified above.

     

    5.7  Taxes.

     

    (a)  Payments
      Free of Taxes.
      Any and
      all payments by or on account of any obligation of Borrower hereunder or under
      any other Loan Document shall be made free and clear of and without deduction
      for any Indemnified Taxes or Other Taxes; provided that if Borrower shall be
      required to deduct any Indemnified Taxes or Other Taxes from such payments,
      then
      (i) the sum payable shall be increased as necessary so that after making all
      required deductions (including deductions applicable to additional sums payable
      under this Section 5.7)
      Administrative Agent or the Lender (as the case may be) receives an amount
      equal
      to the sum it would have received had no such deductions been made, (ii)
      Borrower shall make such deductions and (iii) Borrower shall pay the full amount
      deducted to the relevant Governmental Authority in accordance with applicable
      law.

     

    (b)  Payment
      of Other Taxes by Borrower.
      In
      addition, Borrower shall pay any Other Taxes to the relevant Governmental
      Authority in accordance with applicable law.

     

    (c)  Indemnification
      by Borrower.
      Borrower shall indemnify Administrative Agent and each Lender, within ten (10)
      days after written demand therefor, for the full amount of any Indemnified
      Taxes
      or Other Taxes paid by Administrative Agent or such Lender, as the case may
      be,
      on or with respect to any payment by or on account of any obligation of Borrower
      hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on
      or
      attributable to amounts payable under this Section 5.7)
      and any
      penalties, interest and reasonable expenses arising therefrom or with respect
      thereto, whether or not such Indemnified Taxes or Other Taxes were correctly
      or
      legally imposed or asserted by the relevant Governmental Authority. A
      certificate as to the amount of such payment or liability delivered to Borrower
      by a Lender or by Administrative Agent on its own behalf or on behalf of a
      Lender or the Issuing Lender, shall be conclusive absent manifest
      error.

     

    (d)  Evidence
      of Payments.
      As soon
      as practicable after any payment of Indemnified Taxes or Other Taxes by Borrower
      to a Governmental Authority, Borrower shall deliver to Administrative Agent
      the
      original or a certified copy of a receipt issued by such Governmental Authority
      evidencing such payment, a copy of the return reporting such payment or other
      evidence of such payment reasonably satisfactory to Administrative
      Agent.

     

    (e)  Refunds.
      If
      Administrative Agent or a Lender determines that it has received a refund of
      any
      Taxes or Other Taxes as to which it has been indemnified by Borrower or with
      respect to which Borrower has paid additional amounts pursuant to this Section
      5.7,
      it
      shall pay over such refund to Borrower (but only to the extent of indemnity
      payments made, or additional amounts paid, by Borrower under this Section
5.7
      with
      respect to the Taxes or Other Taxes giving rise to such refund), net of all
      out-of-pocket expenses of Administrative Agent or such Lender and without
      interest (other than any interest paid by the relevant Governmental Authority
      with respect to such refund).

     

    ARTICLE
      VI  

     

    

     

    CONDITIONS
      PRECEDENT

     

    6.1  Conditions
      Precedent to Closing and the Effectiveness of Commitments

    .
      The
      Closing shall not be deemed to have occurred and, regardless as to whether
      Administrative Agent or any Lender has executed this Agreement, neither
      Administrative Agent nor any Lender shall have any obligation hereunder or
      under
      any of the other Loan Documents, unless and until the conditions and
      requirements set forth in this Section 6.1
      have
      been completed and fulfilled to the satisfaction of Administrative Agent, in
      Administrative Agent's sole and absolute discretion, and at Borrower's sole
      cost
      and expense:

     

    (a)  Loan
      Documents.
      Borrower and all other Borrower Parties shall have executed and delivered (or
      cause to be executed and delivered) to Administrative Agent the Loan Documents
      and such other documents as Administrative Agent may require, in form and
      substance acceptable to Administrative Agent. Administrative Agent may designate
      which of the Loan Documents are to be placed of record, the order of recording
      thereof, and the offices in which the same are to be recorded.

     

    (b)  Recordation
      of Security Interest and Perfection of all Security Interests.
      The
      Security Instrument shall have been recorded in the Official Records in full
      compliance with the letter of closing instructions from Administrative Agent
      to
      the Title Company, Administrative Agent shall, subject to the Permitted Liens,
      have a valid, perfected, first-priority lien on all Collateral covered by the
      Security Documents, and Borrower shall have paid all documentary, intangible,
      recording and/or registration taxes and/or fees due upon the Note, the Security
      Instrument, any Financing Statement and/or the other Loan
      Documents.

     

    (c)  No
      Defaults.
      No
      Default or Event of Default shall then exist.

     

    (d)  Representations
      and Warranties.
      All of
      the representations and warranties of Borrower and other Borrower Parties are
      true and correct in all material respects.

     

    (e)  Fees
      and Expenses.
      Borrower shall have paid any and all fees and charges due to Administrative
      Agent or the Lenders.

     

    (f)  Discretionary
      Approvals.
      All
      Discretionary Approvals necessary as of such date shall have been granted and/or
      issued, as applicable, by the applicable Governmental Authority, the same shall
      be in full force and effect without any pending legal or regulatory challenge
      thereto, and to the extent requested by Administrative Agent, Administrative
      Agent shall have received copies of the foregoing certified by an Authorized
      Officer of Borrower to be true and correct.

     

    (g)  Project
      Budget.
      The
      Project Budget shall have been approved by Administrative Agent, and shall
      include all Hard Costs and Soft Costs, including line-item cost breakdown,
      and
      shall be sufficient for Completion of the Improvements based on Borrower's
      final
      Plans and Specifications.

     

    (h)  Third-Party
      Reports.
      Administrative Agent shall have received and approved (i) the Cost and Plan
      Review; (ii) the Environmental Reports; and (iii) the Appraisal.

     

    (i)  Pre-Sale
      Requirement.
      Qualified Purchase Contracts providing not less than the Minimum Loan Coverage
      Ratio.

     

    (j)  Controlled
      Accounts; Deposit Letter of Credit.
      Borrower shall have established and funded, to the extent applicable, the
      Borrower's Account, the Earnest Money Deposit Account, the Framing Deposit
      Account, the Club Membership Deposit Account, the Purchaser Upgrade Deposit
      Account, and any other account required by Administrative Agent; provided,
      however, in lieu of maintaining Framing Deposits and/or Club Membership
      Deposits, Borrower may provide to Administrative Agent, prior to closing or
      at
      any time during the term of the Loan, the Deposit Letter of Credit in an amount
      equal to the amount of Framing Deposits and/or Club Membership Deposits being
      replaced by the Deposit Letter of Credit. 

     

    (k)  Agreement
      for License.
      Borrower shall have delivered to Administrative Agent that certain Agreement
      dated of even date herewith between Borrower and Lodge Properties, Inc.,
      concerning the grant of a license in the future for the use of the Spa
      Project.

     

    (l)  Subdivision
      Agreement.
      The
      Subdivision Agreement shall have been executed and recorded in the Official
      Records, prior to the recording of the Security Documents.

     

    (m)  Other
      Documents and Deliveries.
      Administrative Agent shall have received and approved all documents and other
      items described on Schedule
      6.1.

     

    (n)  In
      the
      event Administrative Agent, subject to Section 13.9(b)(ii),
      authorizes the recording of the Security Instrument or the making of any Loan
      at
      a time when all conditions described in this Section 6.1
      have not
      been satisfied (including, without limitation, that all documents and other
      items described on Schedule 6.1
      have not
      been approved by and/or delivered to Administrative Agent), such condition
      must
      be satisfied before any additional Loan shall be made.

     

    6.2  Conditions
      Precedent to the Making of any Loans

    .
      Neither
      Administrative Agent nor any of the Lenders shall be required to make any Loans
      hereunder until the conditions and requirements set forth in this Section
6.2
      have
      been completed and fulfilled to the satisfaction of Administrative Agent, in
      Administrative Agent's sole discretion, at Borrower's sole cost and expense.
      It
      is agreed, however, that Administrative Agent (on behalf of the Lenders) may,
      subject to Section 13.9(b)(ii),
      in its
      discretion, make advances prior to completion and fulfillment of any or all
      of
      the conditions and requirements set forth below, without waiving its right
      to
      require such completion and fulfillment before any additional advances are
      made.
      If all such conditions set forth below are not satisfied as of the date of
      each
      proposed Loan set forth in each Request for Loan Advance, neither Administrative
      Agent nor any of the Lenders shall have any further obligation to make any
      advances of Loan proceeds hereunder.

     

    (a)  Closing
      Conditions.
      All
      conditions set forth in Section 6.1
      above
      shall be satisfied.

     

    (b)  No
      Default.
      No
      Default or Event of Default shall have occurred and be continuing.

     

    (c)  Representations
      and Warranties.
      The
      representations and warranties, both immediately prior to the making of such
      Loan and also after giving effect thereto, made by (i) Borrower in Article
      VIII
      and in
      each of the other Loan Documents to which it is a party and (ii) each Guarantor
      in the Loan Documents to which it is a party, shall be true and complete in
      all
      material respects on and as of the date of the making of such Loan with the
      same
      force and effect as if made on and as of such date (or, if any such
      representation or warranty is expressly stated to have been made as of a
      specific date, as of such specific date).

     

    (d)  Plans
      and Specifications.
      The
      Construction Work (or such part thereof as may have been constructed at the
      time
      of any borrowing) shall have been substantially completed in accordance with
      the
      Plans and Specifications (as the same may have been Modified in accordance
      with
      this Agreement) and Government Approvals; and there shall exist no material
      defects in the Improvements.

     

    (e)  Construction
      Consultant.
      Administrative Agent shall have received advice from the Construction Consultant
      to the effect that the Construction Consultant has reviewed and approved the
      disbursement requested in the Request for Loan Advance for Hard
      Costs.

     

    (f)  Request
      for Loan Advance.
      A
      Request for Loan Advance as provided in Section 2.2(a)
      duly
      executed by an Authorized Officer of Borrower, together with the required
      attachments thereto;

     

    (g)  Casualty
      and Condemnation.
      The
      Project shall not have been subject to (i) a material injury from fire or other
      casualty or (ii) a Condemnation, which, in either case, would, following the
      allocation of Insurance Proceeds or Condemnation Awards to the Project Budget,
      cause a failure of the Loans to be In Balance.

     

    (h)  Fees
      and Expenses.
      Borrower shall have paid (i) all installments of the fees and expenses that
      are
      then due and payable to Administrative Agent or the Lenders, and (ii) any
      unreimbursed costs and expenses due to Administrative Agent, and/or any of
      the
      Lenders pursuant to Section 14.3.

     

    (i)  Prior
      Loans.
      To the
      extent not previously delivered to Administrative Agent, Borrower shall provide
      evidence of the payment of all costs, expenses and other charges for which
      advances of Loans shall have been previously provided.

     

    (j)  Non-Discretionary
      Approvals.
      All
      Non-Discretionary Approvals required as of such date shall have been granted
      and/or issued, as applicable, shall be in full force and effect without any
      pending legal or regulatory challenge thereto, and Administrative Agent shall
      have received evidence of the foregoing.

     

    (k)  Access.
      Borrower shall have provided the Construction Consultant, Administrative Agent
      and the Lenders, or their representatives, prompt and reasonable access to
      the
      Project, and copies of all such documents, bills, construction records, lien
      waivers, Change Orders, drawings, plans and specifications as the Construction
      Consultant shall reasonably require, to enable the Construction Consultant
      to
      review each Request for Loan Advance.

     

    (l)  Other
      Conditions.
      All of
      the requirements of Article
      VII
      shall
      have been complied with.

     

    (m)  Other
      Documents and Deliveries.
      Administrative Agent shall have received and approved of all documents and
      other
      items described on Schedule
      6.2.

     

    6.3  Conditions
      Precedent to the Final Loans

    .
      The
      obligation of the Lenders to make the final Loans to Borrower for Base Building
      Work is subject to the further condition precedent that all of the following
      requirements (collectively, the "Base Building Substantial Completion
      Conditions") shall have been completed to the satisfaction of Administrative
      Agent:

     

    (a)  Loan
      Conditions.
      All
      conditions set forth in Section 6.2
      above
      shall be satisfied.

     

    (b)  Construction
      Consultant.
      Administrative Agent shall have received written advice from the Construction
      Consultant that the Completion of the Base Building Work has been satisfactorily
      accomplished in accordance with the Plans and Specifications, subject to
      completion of Punch List Items (which if incomplete on the date of the final
      disbursement of a Loan for Base Building Work, Administrative Agent may, in
      its
      sole discretion, hold back an amount equal to (i) 150% of the estimated cost
      of
      completing such Punch List Items from the final disbursement minus
      (ii) any
      Retainage that Administrative Agent is still holding with respect to the
      applicable Punch List Items, such amount to be advanced to Borrower on
      completion of such Punch List Items and the satisfaction of the requirements
      of
      Section 7.6(b)
      with
      respect to Retainage, which Borrower shall diligently complete).

     

    (c)  Other
      Documents and Deliveries.
      Administrative Agent and the Construction Consultant shall have received and
      approved of all documents and other items described on Schedule
      6.3.

     

    ARTICLE
      VII  

     

    

     

    DISBURSEMENT
      OF THE LOANS; LOAN BALANCING

     

    7.1  General
      Conditions.

     

    (a)  Subject
      to (i) Borrower's satisfaction of the conditions precedent set forth in
Article
      VI
      and (ii)
      Borrower's compliance with the applicable provisions of this Article
      VII,
      Administrative Agent shall disburse the proceeds of each Loan within seven
      (7)
      Business Days after Administrative Agent's receipt all of the documents and
      items to be delivered or received pursuant to Article
      VI
      and
Article
      VII.
      Notwithstanding the foregoing, at no time shall Administrative Agent or the
      Lenders be obligated to: (1) advance to Borrower more than the amount that
      Borrower has funded from its own monies or is then required to fund to the
      party
      seeking payment or, in the case of reimbursement, to the party seeking
      reimbursement (subject to Retainage, if applicable), (2) make an advance if
      the
      Loans are not In Balance in accordance with Section 7.2,
      (3)
      subject to possible reallocation in accordance with Section 7.3,
      advance
      proceeds of a Loan in an amount in excess of the Project Budget Line-Items
      set
      forth in the Project Budget, as the same may be adjusted in accordance with
      the
      terms of this Agreement, (4) except as provided in Section 7.6
      hereof,
      advance any portion of the Retainage, (5) except as provided in Section
9.2
      hereof,
      make any Loans with respect to materials not yet incorporated into the
      Improvements, (6) make an advance in connection with any Change Order for which
      Administrative Agent's approval is required under Section 10.13
      which
      has not been approved by Administrative Agent in accordance with Section
10.13,
      (7)
      make any Loans for payments to any subcontractor until: (A) in the case of
      a
      Major Subcontractor, such Major Subcontractor has been approved by
      Administrative Agent, (B) in the case of a Major Subcontractor, duly executed
      and delivered to Administrative Agent the applicable consent and attornment
      agreement in substantially the form attached to the Assignment of Construction
      Agreements, and (C) in the case of a Major Subcontractor, at the request of
      Administrative Agent, such Major Subcontractor has delivered to Administrative
      Agent a payment and performance bond in form and substance acceptable to
      Administrative Agent, or (8) make any Loans with respect to any sums due a
      Design Professional until such Design Professional if the total amount of the
      projected costs payable to such Design Professional are in excess of Two Hundred
      Fifty Thousand and No/100 Dollars ($250,000.00) has (A) entered into a duly
      executed and delivered contract with Borrower, a copy (certified by an
      Authorized Officer of Borrower) of which contract has been delivered to
      Administrative Agent, and (B) duly executed and delivered to Administrative
      Agent the applicable consent and attornment agreement in substantially the
      form
      attached to the Assignment of Architecture Agreement, or (C) make any Loans
      with
      respect to the General Contractor Fee except for General Contractor Fees
      advanced based upon percentage of completion with payment to be complete upon
      the issuance of all certificates of occupancy, release of all liens by
      contractors, materialmen and suppliers, and the Loans being In
      Balance.

     

    (b)  Notwithstanding
      anything to the contrary contained in this Agreement, the Lenders shall have
      no
      obligation to advance any Loan unless Administrative Agent is, at all times,
      satisfied that the Improvements can be constructed Lien free, substantially
      in
      accordance with the Plans and Specifications for the sums set forth in the
      Project Budget as adjusted pursuant to this Agreement and subject to
Article
      XI
      (or, if
      more, Borrower has furnished the difference in cash or cash equivalents, subject
      to the provisions of Sections 7.2,
      7.3
      and
7.4),
      by the
      Completion Date subject to Unavoidable Delay. Administrative Agent will endeavor
      to give notice to Borrower of its intention not to disburse any Loan proceeds
      based on the foregoing, but neither the Lenders nor Administrative Agent shall
      have any liability hereunder should Administrative Agent fail to do so, and
      no
      failure by Administrative Agent to give such notice shall affect Administrative
      Agent's or any Lender's rights under this Section 7.1(b).

     

    (c)  Disbursements
      shall be made no more frequently than once in each calendar month.

     

    (d)  Upon
      the
      Closing Date, Borrower shall submit a Request for Loan Advance relating to
      all
      expenses incurred as of such date by Borrower in connection with Project Costs
      and Borrower shall be entitled to draw from the Earnest Money Deposits in
      payment of such amounts and, to the extent such Earnest Money Deposits are
      not
      sufficient for the payment of such amounts, Borrower shall be entitled, subject
      to the provisions of this Agreement, to a Loan advance in reimbursement of
      such
      excess costs.

     

    (e)  Notwithstanding
      anything to the contrary contained herein, with respect to Advances for budgeted
      tenant improvements and leasing commissions relating to a lease or leases in
      the
      Retail/Resort Component, no Advances shall be made for tenant improvements
      and
      leasing commissions until Administrative Agent has received from Borrower and
      has approved an executed lease or leases under which such tenant improvements
      and leasing commissions are to be paid. 

     

    7.2  Loan
      Balancing.

     

    (a)  Definition
      of "In Balance" Loans.
      Borrower represents that the Project Budget sets forth all anticipated costs
      to
      be incurred by Borrower in connection with the ownership, development,
      construction, financing, and marketing of the Project from time to time through
      the Scheduled Maturity Date. Borrower acknowledges and agrees that the Loans
      shall be deemed not "In
      Balance"
      if, at
      any time, (i) the Loan to Value Ratio is greater than 75%; (ii) the Loan
      coverage is less than the Minimum Loan Coverage Ratio; (iii) the projected
      cost
      of any category of costs included in any individual Project Budget Line-Item
      (including, without limitation, the Interest Reserve and the Contingency Fund
      line items) exceeds the amount set forth in the Project Budget for such
      individual Project Budget Line-Item by more than fifteen percent (15%) (as
      the
      same may be adjusted in accordance with Section 7.4
      and any
      other terms of this Agreement), or (iv) the projected cost to achieve Completion
      of the Project exceeds the Project Budget as determined by Administrative Agent
      and the Construction Consultant in their reasonable discretion. So long as
      the
      foregoing events do not exist, the Loans shall be deemed "In
      Balance."

     

    (b)  Deficiency
      Deposits.
      If at
      any time the Loans are deemed not "In Balance," with respect to Section
7.2(a)(iii)
      and
      (iv) above then Borrower shall, provided sufficient funds do not remain in
      the
      Contingency Fund to cover such deficiency, within ten (10) Business Days after
      written notice from Administrative Agent deposit with Administrative Agent
      an
      amount sufficient to cover such deficiency (a "Deficiency
      Deposit"),
      which
      Deficiency Deposit shall be deposited into a Controlled Account. Administrative
      Agent and the Lenders shall not be required to make any disbursement of any
      Loans before receiving payment of any such Deficiency Deposit and the prior
      application of any such Deficiency Deposit to the payment of any budgeted costs
      to bring the Loans In Balance. If an Event of Default shall occur and be
      continuing, Administrative Agent may (subject to the provisions of Section
      13.3),
      at its
      option, (i) exercise any or all of its rights under the Loan Documents, (ii)
      apply any unexpended Deficiency Deposit to the costs of Completion of the
      Improvements, and/or (iii) apply any unexpended Deficiency Deposit to the
      immediate reduction of any amounts due under the Notes and the other Loan
      Documents. Notwithstanding anything in this Section 7.2(b)
      or
      elsewhere in this Agreement to the contrary, nothing in this Section
7.2(b)
      or
      elsewhere in this Agreement or the Loan Documents (other than the Development
      Agreement Guaranty) shall obligate the holders of any Equity Interests for
      the
      payment of any amounts due from Borrower to Lender hereunder.

     

    (c)  Additional
      Appraisals.
      At any
      time and from time to time Administrative Agent may obtain a new Appraisal
      of
      the Project, provided, however, unless an Event of Default has occurred and
      is
      continuing, Borrower shall not be obligated to pay or reimburse Administrative
      Agent for an Appraisal more that once during a twelve-month period.

     

    7.3  Project
      Budget Line-Items; Loans to be Used for Specific Line-Items.

     

    (a)  The
      Project Budget includes as line items (collectively, "Project
      Budget Line-Items")
      the
      cost of all labor, materials, equipment, fixtures and furnishings needed for
      the
      Completion of all Construction Work, and all other costs, fees and expenses
      relating in any way whatsoever thereto. Borrower agrees that all Loans shall
      be
      used only for the Project Budget Line-Items for which such Loans are made as
      reallocated from time to time in accordance with the terms of this Agreement.
      Administrative Agent shall not be obligated to advance any amount for any
      category of costs set forth as a Project Budget Line-Item which is greater
      than
      115% of the amount set forth for such category in the applicable Project Budget
      Line-Item as adjusted pursuant to this Agreement.

     

    (b)  Reallocation
      of Contingency Fund and Line-Items Based on Costs Savings.
      Borrower may apply the Available Contingency Amount and/or savings from one
      Project Budget Line-Item to cost overruns in another Project Budget Line-Item,
      to any other unbudgeted Project Cost or to bring the Loans in Balance provided:
      (i) no Event of Default then exists, and (ii) as to reallocations from a Project
      Budget Line Item (1) all costs to be paid out of the Project Budget Line-Item
      from which funds are being reallocated have been paid or sufficient sums remain
      in said line item to pay such costs when the same become due, (2) said savings
      are actual savings and are documented to the reasonable satisfaction of
      Administrative Agent and the Construction Consultant in their reasonable
      discretion, (3) such reallocation will not violate the provisions of the Lien
      Law or affect the priority of the Security Instrument on the Project, and (4)
      no
      Interest Reserve funds are reallocated. Notwithstanding anything to the contrary
      contained herein, in the event Administrative Agent's approval of an adjustment
      to a Project Budget Line Item is required, Administrative Agent, in its
      reasonable discretion, may condition any such approval on obtaining, at
      Borrower's sole cost and expense, an endorsement to the Title Policy insuring
      against any statutory lien for services, labor or materials furnished or
      contracted for which at such time has gained (or may thereafter gain) priority
      over the lien of the Security Instrument as a result of such
      reallocation.

     

    7.4  Project
      Budget Contingencies.

     

    (a)  Contingency
      Fund Line-Item.
      The
      Project Budget shall initially contain a line item equal to $12,061,016 for
      Hard
      Costs contingency and $2,566,591.00 for Soft Costs contingency (the
      "Contingency
      Fund")
      designated for contingency which represent amounts necessary to provide
      reasonable assurances to Administrative Agent and the Lenders that additional
      funds are available to be used if additional costs, expenses and/or delays
      are
      incurred or additional interest accrues on the Loans, or unanticipated events
      or
      problems occur. The Contingency Fund shall be subject to reduction upon
      reallocation, disbursement, or otherwise as provided herein. Administrative
      Agent may, in its sole discretion, reallocate the required amount of the
      Contingency Fund to other Project Budget Line-Items from time to
      time.

     

    (b)  Use
      of
      Contingency Fund.
      In
      addition to Borrower's right to reallocate the Available Contingency Amount
      as
      set forth in Section 7.2(b),
      upon
      request of Borrower, Administrative Agent may (but shall not be obligated to
      do
      so), from time to time in its sole discretion, disburse the Contingency Fund
      or
      portions thereof to Borrower (thereby reducing the amount of the same) for
      use
      under the Project Budget Line-Items for which they are reallocated. Borrower
      agrees that except as set forth in Section7.2(b),
      the
      decision with respect to utilizing any portion of the Contingency Fund in order
      to keep the Loans In Balance shall be made by Administrative Agent in its sole
      discretion and that Borrower may be required to make a Deficiency Deposit even
      if funds remain in the Contingency Fund. Notwithstanding anything to the
      contrary contained herein, Administrative Agent may condition any such
      reallocation under this Section 7.4(b),
      on
      obtaining, at Borrower's sole cost and expense, an endorsement to the Title
      Policy insuring against any statutory lien for services, labor or materials
      furnished or contracted for which at such time has gained (or may thereafter
      gain) priority over the lien of the Security Instrument as a result of the
      reallocation of the Contingency Fund.

     

    7.5  Interest;
      Fees; and Expenses.

     

    (a)  Included
      in the Project Budget are projected amounts for (i) interest on the Loans (the
      "Interest
      Reserve"),
      (ii)
      the fees payable to Administrative Agent and the Lenders, (iii) the fees and
      expenses of the Construction Consultant, Administrative Agent's counsel and
      the
      Title Company, and (iv) the fees and expenses related to the recording of the
      Security Instrument.

     

    (b)  Borrower
      hereby authorizes and directs, and no further request shall be necessary from
      Borrower for, Administrative Agent to disburse the proceeds of any Loan as
      and
      when needed to pay (i) interest accrued on the Notes, (ii) the fees payable
      to
      Administrative Agent and the Lenders, (iii) the fees and expenses of the
      Construction Consultant, Administrative Agent's counsel and the Title Company,
      (iv) any expenses payable in accordance with Section 14.3
      and (v)
      any Date Down Endorsements, notwithstanding that Borrower may not have requested
      a disbursement of such amounts. Administrative Agent shall give Borrower prompt
      written notice of any such disbursements.

     

    (c)  Subject
      to the provisions of Section 13.3,
      Administrative Agent in its sole discretion may (but shall not be obligated
      to
      do so) make such disbursements authorized under this Section 7.5
      notwithstanding that the Loans are not In Balance or that a Default or Event
      of
      Default exists under the terms of this Agreement or any other Loan Document.
      Such disbursements shall constitute a Loan and be added to the principal balance
      of the Notes, and the Lenders shall make the applicable Loans to fund any such
      disbursements. The authorization hereby granted is irrevocable, and no further
      direction or authorization from Borrower is necessary for Administrative Agent
      to make such disbursements.

     

    7.6  Retainage.

     

    (a)  Disbursement
      of the available proceeds of each Loan with respect only to Hard Costs shall
      be
      limited to ninety percent (90%) of the value of the Hard Costs set forth in
      the
      applicable Request for Loan Advance; provided,
      however,
      that in
      no event shall such percentage be less than the retainage percentage set forth
      in any contract or subcontract for such portion of the Improvements (the amounts
      retained by Administrative Agent pursuant to this Section 7.6(a)
      being,
      collectively, the "Retainage").
      No
      Retainage will apply to (i) any Soft Costs or (ii) the General Contractor Fees
      and general conditions performed by the General Contractor pursuant to the
      General Contract.

     

    (b)  Administrative
      Agent shall advance proceeds of Loans pursuant to a Request for Loan Advance
      to
      pay portions of the Retainage with respect to each contract (including a Major
      Subcontract) prior to the Completion of all Base Building Work, within fifteen
      (15) days after Borrower's compliance with the following conditions to the
      satisfaction of Administrative Agent with respect to such
      contracts:

     

    (i)  except
      with respect to the payment of interim retainage prior to the completion of
      all
      of the work in accordance with the terms of the applicable contract, all of
      the
      work under such contract is finally completed in accordance with the terms
      of
      such contract and the applicable Plans and Specifications, and Administrative
      Agent receives a certification to that effect from an Authorized Officer of
      Borrower and Borrower's Architect and such work has been approved by the
      Construction Consultant;

     

    (ii)  the
      work
      performed by such contractor has been approved, to the extent such approval
      is
      required, by the Governmental Authorities having jurisdiction over the same
      and
      the applicable permits with respect to such work, if any, have been
      issued;

     

    (iii)  the
      contract provides for such early release of the applicable
      Retainage;

     

    (iv)  the
      applicable contractor (including the General Contractor), subcontractor,
      materialman or other supplier with respect to which the Retainage is being
      released delivers to Administrative Agent a final and complete unconditional
      release of Lien;

     

    (v)  if
      and as
      required by Administrative Agent, Administrative Agent shall have received
      copies of any warranties, guaranties or "as built" drawings relating to the
      work
      performed by each such contractor, subcontractor, materialman or other supplier
      in connection with the Base Building Work; and

     

    (vi)  all
      other
      applicable requirements and conditions with respect to such advance of Loan
      proceeds have been satisfied or previously waived in writing by Administrative
      Agent.

     

    7.7  Unsatisfactory
      Work

    .
      If the
      Construction Consultant or Administrative Agent shall determine that a portion
      of the Construction Work for which Loans are sought is Unsatisfactory Work,
      Administrative Agent shall be entitled to (a) withhold from such Loans such
      amounts the proceeds of which are intended to pay for the Unsatisfactory Work
      and (b) to the extent the Construction Consultant reasonably determines that
      the
      failure to remedy such Unsatisfactory Work prior to proceeding with Construction
      Work would have a material adverse impact on the value of the Project or the
      ability to complete other work pursuant to the Plans and Specifications, require
      the affected portion of the Construction Work to be stopped until such time
      as
      Administrative Agent and the Construction Consultant are satisfied that the
      Unsatisfactory Work is corrected, and no such action by Administrative Agent
      shall be deemed to affect Borrower's Completion obligation with respect to
      the
      Improvements on or before the Completion Date or right to proceed with and
      receive Loans in connection with Construction Work that is not affected by
      the
      Unsatisfactory Work, and the Lenders shall, subject to compliance by Borrower
      with all other applicable requirements of this Agreement, be required to make
      Loans with respect to such Unsatisfactory Work only after the Construction
      Consultant and Administrative Agent shall have determined that the work which
      had been identified as Unsatisfactory Work has been corrected to the
      satisfaction of the Construction Consultant and Administrative
      Agent.

     

    7.8  No
      Waiver or Approval by Reason of Loan Advances

    .
      The
      making of any Loans by the Lenders shall not be deemed an acceptance or approval
      by Administrative Agent or the Lenders (for the benefit of Borrower or any
      third
      party) of the completed Construction Work or other work theretofore done or
      constructed or to the Lenders' obligations to make further Loans, nor, in the
      event Borrower is unable to satisfy any condition, shall any such failure to
      insist upon strict compliance have the effect of precluding Administrative
      Agent
      or the Lenders from thereafter declaring such inability to be an Event of
      Default as herein provided. Administrative Agent's and/or the Lenders' waiver
      of, or failure to enforce, any conditions to or requirements associated with
      any
      Loans in any one or more circumstances shall not constitute or imply a waiver
      of
      such conditions or requirements in any other circumstances.

     

    7.9  Construction
      Consultant

    .
      Administrative Agent reserves the right to employ the Construction Consultant
      and any other consultants necessary, in Administrative Agent's reasonable
      judgment, to review Requests for Loan Advance, inspect all construction and
      the
      periodic progress of the same, the reasonable cost therefor to be borne by
      Borrower as a loan expense. Borrower shall make available to Administrative
      Agent and the Construction Consultant on reasonable notice during business
      hours, all documents and other information (including, without limitation,
      receipts, invoices, lien waivers and other supporting documentation to
      substantiate the costs to be paid with the proceeds of any Request for Loan
      Advance) which any contractor or other Person entitled to payment for
      Construction Work is required to deliver to Borrower and shall use commercially
      reasonable efforts to obtain any further documents or information reasonably
      requested by Administrative Agent or the Construction Consultant in connection
      with any Loan or the administration of this Agreement. Borrower acknowledges
      and
      agrees that the Construction Consultant shall have no responsibilities or duties
      to Borrower, and shall be employed solely for the benefit of Administrative
      Agent and the Lenders. No default of Borrower will be waived by an inspection
      by
      Administrative Agent or the Construction Consultant. In no event will any
      inspection by Administrative Agent or the Construction Consultant be a
      representation that there has been or will be compliance with the Plans and
      Specifications or that the Construction Work is free from defective materials
      or
      workmanship. Any and all provisions of this Agreement in respect of the
      Construction Consultant shall be enforceable solely by, and at the option of,
      Administrative Agent, and Borrower shall not be a third-party beneficiary
      thereof. Any and all reports, advice or other information provided by the
      Construction Consultant to Administrative Agent and/or the Lenders or otherwise
      produced by or in the possession of the Construction Consultant shall be
      confidential and Borrower shall have no right to obtain or review
      same.

     

    7.10  Authorization
      to Make Loan Advances to Cure Borrower's Defaults

    .
      If an
      Event of Default shall occur and be continuing, Administrative Agent (subject
      to
      the provisions of Section 13.3)
      may
      (but shall not be required to) perform any of such covenants and agreements
      with
      respect to which Borrower is in Default and of which Administrative Agent has
      notified Borrower. Any amounts expended by Administrative Agent in so doing
      and
      any amounts expended by Administrative Agent in connection therewith shall
      constitute a Loan and be added to the Outstanding Principal Amount, and the
      Lenders shall make the applicable Loans to fund any such disbursements. The
      authorization hereby granted is irrevocable, and no prior notice to or further
      direction or authorization from Borrower is necessary for Administrative Agent
      to make such disbursements.

    

    7.11  Administrative
      Agent's Right to Make Loan Advances in Compliance with the Completion Guaranty
      and Development Agreement Guaranty

    .
      Any
      Loan proceeds disbursed by Administrative Agent as contemplated by Section
      2 of
      the Completion Guaranty and Development Agreement Guaranty (whether the
      applicable work is being performed by the Guarantor or Administrative Agent)
      shall constitute a Loan and be added to the Outstanding Principal Amount, and
      the Lenders shall make the applicable Loans to fund any such disbursements.
      The
      authorization hereby granted is irrevocable and no prior notice to or further
      direction or authorization from Borrower is necessary for Administrative Agent
      to make such disbursements.

     

    7.12  No
      Third-Party Benefit

    .
      This
      Agreement is solely for the benefit of the Lenders, Administrative Agent and
      Borrower. All conditions of the obligations of the Lenders to make advances
      hereunder are imposed solely and exclusively for the benefit of the Lenders
      and
      may be freely waived or Modified in whole or in part by the Lenders at any
      time
      if in their sole discretion they deem it advisable to do so, and no Person
      other
      than Borrower (provided, however, that all conditions have been satisfied)
      shall
      have standing to require the Lenders to make any Loan advances or shall be
      a
      beneficiary of this Agreement or any advances to be made hereunder.

    

     

    7.13  Payments
      for Spa Project

    .
      As
      acknowledged by Borrower and Lodge Properties Inc. in the Subdivision Agreement,
      the Improvements to be constructed with Advances hereunder and the Spa Project
      are interrelated from a construction standpoint and in fact, are governed by
      the
      terms of the single General Contract. It is in the interest of all parties
      involved that the construction of the Improvements and the Spa Project remains
      on schedule and that payments for the construction are made on a timely basis
      and in a manner to maintain a lien-free Project. In that regard, upon the
      request of Administrative Agent, Borrower agrees to request Lodge Properties
      Inc. to fund into Borrower's Account the monthly payments necessary to pay
      that
      portion of the General Contractor's monthly draw requests attributable to the
      Spa Project. Thereafter, upon Borrower's receipt of a Loan Advance hereunder
      after a Request for Loan Advance pursuant to the terms hereof, Borrower shall
      use such funds deposited by Lodge Properties, Inc., to pay the General
      Contractor's draw request in full, subject to any Retainage requirements.
      Administrative Agent reserves the right but not the obligation to review the
      payment request for the Spa Project and to request its Construction Consultant
      to review the payment request and inspect the Spa Project to determine the
      applicability and appropriateness of the payment relating to the Construction
      Work performed. 

    

     

    ARTICLE
      VIII  

     

    

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Borrower
      represents and warrants to Administrative Agent and the Lenders
      that:

     

    8.1  Organization;
      Powers

    .
      Each of
      Borrower Parties is duly organized, validly existing and in good standing under
      the laws of the jurisdiction of its organization, has all requisite power and
      authority to carry on its business as now conducted and, is qualified to do
      business in, and is in good standing in, every jurisdiction where such
      qualification is required. Each of Borrower and the Guarantor is organized
      or
      qualified to do business and in good standing in the State of
      Colorado.

     

    8.2  Authorization;
      Enforceability

    .
      The
      Transactions are within each of Borrower Party's organizational powers and
      have
      been duly authorized by all necessary organizational action under their
      respective Organizational Documents. This Agreement and the other Loan Documents
      have been duly executed and delivered by Borrower Parties party thereto and
      each
      of the Loan Documents to which a Borrower Party is a party when delivered will
      constitute, a legal, valid and binding obligation of the applicable Borrower
      Party, enforceable in accordance with its terms, subject to applicable
      bankruptcy, insolvency, reorganization, moratorium or other laws of affecting
      creditors' rights generally and subject to general principles of equity
      (regardless of whether such enforceability is considered in a proceeding in
      equity or at law).

     

    8.3  Government
      Approvals; No Conflicts

    .
      The
      Transactions (a) do not require any Government Approvals of, registration or
      filing with, or any other action by, any Governmental Authority, except for
      (i)
      such as have been obtained or made and are in full force and effect (ii) filings
      and recordings in respect of the Liens created pursuant to the Security
      Documents and (iii) the Discretionary and Non-Discretionary Approvals required
      in connection with the Construction Work, (b) will not violate any Applicable
      Law or the Organizational Documents of any of Borrower Parties, (c) will not
      violate or result in a default under any indenture, agreement or other
      instrument binding upon any of Borrower Parties, or give rise to a right
      thereunder to require any payment to be made by any of Borrower Parties, and
      (d)
      except for Permitted Liens and the Liens created pursuant to the Security
      Documents, will not result in the creation or imposition of any Lien on any
      asset of any of Borrower Parties. 

     

    8.4  Financial
      Condition

    .
      Borrower has heretofore furnished to each of the Lenders certain financial
      statements of Borrower and Guarantor Vail Resorts, Inc. All such financial
      statements are complete and correct in all material respects and fairly present
      the financial condition of Borrower and Guarantor Vail Resorts, Inc. as of
      the
      dates of such financial statements, all in accordance with GAAP. Neither
      Borrower or Guarantor Vail Resorts, Inc. has on the date hereof any
      Indebtedness, material contingent liabilities, liabilities for taxes, unusual
      forward or long-term commitments or unrealized or anticipated losses from any
      unfavorable commitments of a type required to be disclosed in said financial
      statements in accordance with GAAP, except as referred to or reflected or
      provided for in said balance sheets as at said dates. Since the applicable
      dates
      of such financial statements, there has been no event that would have a Material
      Adverse Effect.

     

    8.5  Litigation

    .
      Except
      as disclosed in Schedule
      8.5
      hereto,
      (a) there are no legal or arbitral proceedings, or any proceedings by or before
      any Governmental Authority or agency, now pending or (to the Knowledge of
      Borrower) threatened against Borrower or the Project which could reasonably
      be
      expected to have a Material Adverse Effect.

     

    8.6  ERISA

    .
      Borrower has not established any Plan which would cause Borrower to be subject
      to ERISA and none of Borrower's assets constitutes or will constitute "plan
      assets" of one or more Plans. No ERISA Event has occurred or is reasonably
      expected to occur that, when taken together with all other such ERISA Events
      for
      which liability is reasonably expected to occur, could reasonably be expected
      to
      result in a Material Adverse Effect. Each Plan, and, to the Knowledge of
      Borrower Parties, each, Multiemployer Plan, is in compliance with, the
      applicable provisions of ERISA, the Code and any other Applicable Law.

     

    8.7  Taxes

    .
      Each of
      Borrower Parties has timely filed or timely caused to be filed all Tax returns
      and reports required to have been filed and has paid or caused to be paid all
      Taxes required to have been paid by it, except (a) Taxes that are being
      contested in good faith by appropriate proceedings and for which such Borrower
      Party has set aside on its books adequate reserves in accordance with GAAP
      or
      (b) to the extent that the failure to do so could not reasonably be expected
      to
      result in a Material Adverse Effect.

     

    8.8  Investment
      and Holding Company Status

    .
      None of
      Borrower Parties is (a) an "investment company" as defined in, or subject to
      regulation under, the Investment Company Act of 1940 or (b) a "holding company,"
      or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding
      company," as defined in, or subject to regulation under, the Public Utility
      Holding Company Act of 1935.

     

    8.9  Environmental
      Matters

    .
      Except
      for matters set forth in the Environmental Reports: 

     

    (a)  To
      Borrower's Knowledge, Borrower and the Project are in compliance with all
      applicable Environmental Laws except where the failure to comply with such
      laws
      is not reasonably likely to result in a Material Adverse Environmental Effect
      and there are no underground storage tanks at the Project. The term "Material
      Adverse Environmental Effect" is defined herein as (i) any violation of
      Environmental Laws, (ii) any Environmental Claim or penalty arising under
      Environmental Laws, or (iii) any Release of Hazardous Substances; resulting
      in
      Environmental Losses of Five Hundred Thousand and No/100 Dollars ($500,000.00)
      or more.

     

    (b)  To
      Borrower's Knowledge, there is no Environmental Claim pending or Environmental
      Claim threatened, and no penalties arising under Environmental Laws have been
      assessed, against Borrower, the Project or against any Person whose liability
      for any Environmental Claim Borrower has or may have retained or assumed either
      contractually or by operation of law, and no investigation or review is pending
      or, to the Knowledge of Borrower, threatened by any Governmental Authority,
      with
      respect to any alleged failure by Borrower or the Project to have any
      environmental, health or safety permit, license or other authorization required
      under, or to otherwise comply with, any Environmental Law, except where the
      failure to have any such permit or comply with such Environmental Law is not
      reasonably likely to result in a Material Adverse Environmental
      Effect.

     

    (c)  To
      Borrower's Knowledge, there have been no past, and there are no present,
      Releases of any Hazardous Substance that are reasonably likely to form the
      basis
      of any Environmental Claim against Borrower, the Project or against any Person
      whose liability for any Environmental Claim Borrower has or may have retained
      or
      assumed either contractually or by operation of law, which Environmental Claim
      is reasonably likely to result in a Material Adverse Environmental
      Effect.

     

    (d)  To
      Borrower's Knowledge, there is no threat of a Release of Hazardous Substances
      migrating to the Project which is reasonably likely to result in a Material
      Adverse Environmental Effect.

     

    (e)  To
      Borrower's Knowledge, without limiting the generality of the foregoing, there
      is
      not present at, on, in or under the Project, PCB-containing equipment, asbestos
      or asbestos containing materials, underground storage tanks or surface
      impoundments for Hazardous Substances, lead in drinking water (except in
      concentrations that comply with all Environmental Laws), or lead-based
      paint.

     

    (f)  No
      Liens
      are presently recorded with the appropriate land records under or pursuant
      to
      any Environmental Law with respect to the Project and no Governmental Authority
      has been taking or is in the process of taking any action that could reasonably
      be expected to subject the Project to Liens under any Environmental
      Law.

     

    (g)  
      There
      have been no environmental investigations, studies, audits, reviews or other
      analyses conducted by or that are in the possession of Borrower in relation
      to
      the Project which have not been made available to the Lenders.

     

    8.10  Organizational
      Structure.

     

    (a)  Borrower
      has heretofore delivered to Administrative Agent a true and complete copy of
      the
      Organizational Documents of each Borrower Party. The only members of Borrower
      on
      the date hereof are the Members. The Managing Member is the sole managing member
      of the Borrower. As of the date hereof, there are no outstanding Equity Rights
      with respect to Borrower or the Managing Member.

     

    (b)  The
      sole
      Managing Member of Borrower on the date hereof is Vail Resorts Development
      Company, a Colorado corporation.

     

    (c)  Schedule
      8.10
      contains
      a true and accurate chart reflecting the ownership of all of the direct and
      indirect Equity Interests in Borrower, including the percentage of ownership
      interest of the Persons shown thereon.

     

    (d)  Borrower
      has no Subsidiaries.

     

    8.11  Title.

     

    (a)  Borrower
      owns and has on the date hereof good, marketable and insurable fee simple title
      to the Project free and clear of all Liens, other than Permitted Liens. Borrower
      owns and has on the date hereof good and marketable title to all other portions
      of the Project. There are no outstanding options to purchase or rights of first
      refusal affecting the Project.

     

    (b)  Borrower
      owns, or is licensed to use, all trademarks, tradenames, copyrights, patents
      and
      other intellectual property material to its business, and the use thereof by
      Borrower does not infringe upon the rights of any other Person, except for
      any
      such infringements that, individually or in the aggregate, could not reasonably
      be expected to result in a Material Adverse Effect.

     

    (c)  Subject
      to Section 10.2,
      Borrower is now and shall continue to be the sole owner of the Collateral free
      from any lien, security interest or adverse claim of any kind whatsoever, except
      for the Permitted Liens, liens or security interests in favor of Administrative
      Agent, the interest of a lessor pursuant to a lease of personal property
      approved by Administrative Agent, in Administrative Agent's sole good faith
      discretion, or liens or security interests otherwise approved by Administrative
      Agent in Administrative Agent's sole good faith discretion.

     

    8.12  No
      Bankruptcy Filing

    .
      Borrower is not contemplating either the filing of a petition by it under any
      state or federal bankruptcy or insolvency laws or the liquidation of all or
      a
      major portion of Borrower's assets or property, and Borrower has no Knowledge
      of
      any Person contemplating the filing of any such petition against it. 

     

    8.13  Executive
      Offices; Places of Organization

    .
      The
      location of Borrower's and the Managing Member's principal place of business
      and
      chief executive office is the address set forth in Section 14.2
      of this
      Agreement, except to the extent changed in accordance with Section 10.7.
      Borrower and the Managing Member were organized, or incorporated, as applicable,
      in the State of Colorado. 

     

    8.14  Compliance;
      Government Approvals

    .
      Borrower, the Project and Borrower's use thereof and operations thereat comply,
      and upon Completion of construction of the Improvements will comply, in all
      material respects with all Applicable Laws. All Government Approvals necessary
      in connection with the construction and operation of the Project as contemplated
      by the Loan Documents and the Project Documents and the Material Agreements,
      to
      be obtained by Borrower and any other Person on behalf of Borrower (to the
      Knowledge of Borrower) are set forth in Schedule
      8.14
      hereto
      and, except for those Government Approvals set forth in Part B of Schedule
      8.14
      hereto,
      have been duly obtained, were validly issued, are in full force and effect,
      are
      not subject to appeal, are held in the name of Borrower and are free from
      conditions or requirements, including conditions and requirements related to
      employee housing, the compliance with which could reasonably be expected to
      have
      a Material Adverse Effect or which Borrower does not reasonably expect to be
      able to satisfy. There is no proceeding pending or, to the Knowledge of
      Borrower, threatened that seeks, or may reasonably be expected, to rescind,
      terminate, Modify or suspend any such Government Approval. The information
      set
      forth in each application and other written material submitted by Borrower
      to
      the applicable Governmental Authority in connection with each such Government
      Approval is accurate and complete in all material respects. The Government
      Approvals set forth in Part B of Schedule
      8.14
      hereto
      are required solely in connection with later stages of construction and
      operation of the Improvements and are not customarily obtained until a later
      stage of construction or after residential occupancy has commenced. Borrower
      has
      no reason to believe that any Government Approval that has not been obtained
      by
      Borrower, but which will be required in the future, will not be granted to
      it in
      due course, on or prior to the date when required and free from any condition
      or
      requirement compliance with which could reasonably be expected to have a
      Material Adverse Effect or which Borrower does not reasonably expect to be
      able
      to satisfy. The Project, if constructed in accordance with the Plans and
      Specifications, the Project Documents and the Material Agreements, will conform
      to and comply in all material respects with all covenants, conditions,
      restrictions and reservations in the Government Approvals and the Project
      Documents and the Material Agreements applicable thereto and all Applicable
      Laws. Borrower has no reason to believe that Administrative Agent, acting for
      the benefit of the Lenders, will not be entitled, without undue expense or
      delay, to the benefit of each Government Approval set forth on Schedule
      8.14
      hereto
      upon the exercise of remedies under the Security Documents. Administrative
      Agent
      has received a true and complete copy of each Government Approval heretofore
      obtained or made by Borrower.

     

    8.15  Condemnation;
      Casualty

    .
      No
      Condemnation has been commenced or, to Borrower's Knowledge, is contemplated
      with respect to all or any portion of the Project or for the relocation of
      roadways providing access to the Project. No Casualty has occurred with respect
      to the Project. 

     

    8.16  Utilities
      and Public Access; No Shared Facilities

    .
      The
      Project has adequate rights of access to public ways and is or will be served
      by
      adequate electric, gas, water, sewer, sanitary sewer and storm drain facilities
      during both the construction and operation of the Improvements. All public
      utilities necessary to the use and enjoyment of the Project as intended to
      be
      used and enjoyed are or will be located as set forth in the Plans and
      Specifications. Telephone and communications services are, or will be, available
      to the boundaries of the Land, adequate to serve the Project and not subject
      to
      any conditions (other than normal charges to the utility supplier) which would
      limit the use of such utilities. All streets and easements necessary for
      construction and operation of the Project are available to the boundaries of
      the
      Land. Except for public infrastructure improvements, or as otherwise shown
      in
      the Plans and Specifications or in the Development Agreement with the Town
      of
      Vail, there are no amenities, services or facilities (including those for
      access, parking, recreational activities and otherwise) not located or to be
      constructed upon the Project which are necessary to the use or enjoyment of,
      or
      intended to benefit the owner or occupants of, the Improvements.

     

    8.17  Solvency

    .
      On the
      Closing Date and after and giving effect to the Loans occurring on the Closing
      Date, and the disbursement of the proceeds of such Loans pursuant to Borrower's
      instructions, each Borrower Party is and will be Solvent.

     

    8.18  Governmental
      Regulations

    .
      Borrower is not a "foreign person" within the meaning of Section 1445(f)(3)
      of
      the Internal Revenue Code of 1986, as amended from time to time. No part of
      the
      proceeds of the Loan made hereunder will be used for "purchasing" or "carrying"
      "margin stock" as so defined or for any purpose which violates, or which would
      be inconsistent with, the provisions of the Regulations of the Board of
      Governors of the Federal Reserve System. The Loan is an exempt transaction
      under
      the Truth-in-Lending Act (15 U.S.C.A. Sections 1601, et seq.).

     

    8.19  No
      Joint Assessment; Separate Lots

    .
      Borrower has not suffered, permitted or initiated the joint assessment of the
      Project with any other real property constituting a separate tax
      lot.

     

    8.20  Security
      Documents and Liens

    .
      The
      Security Documents upon recording with the County Recorder of Eagle County,
      will
      create, as security for the Obligations, valid and enforceable, exclusive,
      perfected first priority security interests in and Liens on all of the
      respective collateral intended to be covered thereunder, in favor of
      Administrative Agent as administrative agent for the ratable benefit of the
      Lenders, subject to no Liens other than the Permitted Liens, except as
      enforceability may be limited by applicable insolvency, bankruptcy or other
      laws
      affecting creditors rights generally, or general principles of equity, whether
      such enforceability is considered in a proceeding in equity or at law. Such
      security interests in and Liens on such collateral shall be superior to and
      prior to the rights of all third parties in such collateral except as set forth
      in the Permitted Liens, and, other than in connection with any future change
      in
      Borrower's name or the location in which Borrower is organized or registered,
      no
      further recordings or filings are or will be required in connection with the
      creation, perfection or enforcement of such security interests and Liens, other
      than the filing of continuation statements in accordance with applicable law.
      Upon filing with the Secretary of State of Colorado and recording with the
      County Recorder of Eagle County of a Uniform Commercial Code financing statement
      describing the Collateral covered by any Security Document that is governed
      by
      the Uniform Commercial Code (or irrevocably delivered to a title agent for
      such
      filing), such filing will perfect a valid first priority security interest
      with
      respect to the rights and property that are the subject of such Security
      Document to the extent a security interest in such Collateral can be perfected
      by filing a financing statement and subject to the Permitted Liens. Any
      agreement, executed with respect to the Project or any part thereof are and
      shall be subject and subordinate to the Security Instrument except as set forth
      in the Permitted Liens. 

     

    8.21  Project
      Documents

    .
      Borrower has heretofore delivered to Administrative Agent a true and complete
      copy of each Project Document and, subject to the terms of Section 10.12,
      none of
      the Project Documents has been further amended, modified or terminated. The
      Project Documents are in full force and effect and Borrower is not in default
      under or with respect to any material provisions of any Project Document. To
      the
      Borrower's Knowledge, no other party to a Project Document is in default under
      any material covenant or obligation set forth therein.

     

    8.22  Material
      Agreements

    .
      Borrower has heretofore delivered to Administrative Agent a true, correct and
      complete copy of each Material Agreement, and the Material Agreements, together
      with matters appearing in the Official Records and other agreements delivered
      to
      Administrative Agent prior to the date hereof, constitute all of the agreements
      to which Borrower (or any predecessor-in-interest to Borrower) is a party that
      materially affects or relates to the ownership or operation of the Project.
      Subject to the terms of Section 10.12,
      none of
      the Material Agreement has been further Modified. The Material Agreements are
      in
      full force and effect and Borrower is not in default beyond any applicable
      notice or cure periods under or with respect to any material provisions of
      any
      Material Agreement. To Borrower's Knowledge, as of the date hereof, except
      as
      set forth herein, no other party to a Material Agreement is in default under
      any
      material covenant or obligation set forth therein.

     

    8.23  Project
      Budget

    .
      The
      amounts and allocations set forth in the Project Budget (including the Hard
      Costs and Soft Costs), as each may be amended in accordance with the terms
      of
      this Agreement, present a full, complete and good faith representation of all
      costs, expenses and fees required to acquire and develop the Project and for
      Completion of the Construction Work. Borrower is unaware of any other such
      costs, expenses or fees which are material and are not covered by the Project
      Budget.

     

    8.24  Insurance

    .
      Borrower has in force, and has paid the Insurance Premiums in respect of, all
      of
      the insurance required by Section 9.5.

     

    8.25  Flood
      Zone

    .
      Except
      as shown on the Survey, no portion of the Improvements is located in a flood
      hazard area as designated by the Federal Emergency Management Agency or, if
      in
      the flood zone, flood insurance is maintained therefor in full compliance with
      the provisions of Section 9.5.

     

    8.26  Boundaries

    .
      Except
      as may be disclosed on the Survey and in the Title Policy or as set forth in
      the
      Plans and Specifications (with respect to which easements are in effect), none
      of the Improvements are outside the boundaries of the Project (or building
      restriction or setback lines applicable thereto) and no improvements on
      adjoining properties encroach upon the Land and no easements or other
      encumbrances upon the Land encroach upon any of the Improvements so as to
      adversely effect the value or marketability of the Project.

     

    8.27  Illegal
      Activity

    .
      No
      portion of the Project has been purchased with proceeds of any illegal activity
      and no part of the proceeds of the Loans will be used in connection with any
      illegal activity.

     

    8.28  Permitted
      Liens

    .
      None of
      the Permitted Liens individually or in the aggregate, materially interferes
      with
      the benefits of the security intended to be provided by the Loan Documents,
      materially and adversely affects the value of the Project, impairs the use
      or
      the operation of the Project or impairs Borrower's ability to pay its
      obligations in a timely manner.

     

    8.29  Anti-Terrorism
      Laws.

     

    (a)  None
      of
      Borrower or, to Borrower's Knowledge, its Affiliates is in violation of any
      Anti-Terrorism Laws.

     

    (b)  None
      of
      Borrower or, to Borrower's Knowledge, any of its Affiliates, or any of its
      brokers or other agents acting or benefiting in any capacity in connection
      with
      the Loan is any of the following: (i) a person or entity that is listed in
      the
      Annex to, or is otherwise subject to the provisions of, the Anti-Terrorism
      Order; (ii) a person or entity owned or controlled by, or acting for or on
      behalf of, any person or entity that is listed in the Annex to, or is otherwise
      subject to the provisions of, the Anti-Terrorism Order; (iii) a person or entity
      with whom any Lender is prohibited from dealing or otherwise engaging in any
      transaction by any Anti-Terrorism Law; (iv) a person or entity who commits,
      threatens or conspires to commit or supports "terrorism" as defined in the
      Anti-Terrorism Order; or (v) a person or entity that is named as a "specially
      designated national and blocked person" on the most current list published
      by
      the U.S. Treasury Department Office of Foreign Asset Control at its official
      website or any replacement website or other replacement official publication
      of
      such list.

     

    (c)  None
      of
      Borrower or, to Borrower's Knowledge, any of its Affiliates or any of its
      brokers or other agents acting in any capacity in connection with the Loan
      (i)
      conducts any business or engages in making or receiving any contribution of
      funds, goods or services to or for the benefit of any Person described in
      Section 8.29(b)
      above,
      (ii) deals in, or otherwise engages in any transaction relating to, any property
      or interests in property blocked pursuant to the Anti-Terrorism Order, or (iii)
      engages in or conspires to engage in any transaction that evades or avoids,
      or
      has the purpose of evading or avoiding, or attempts to violate, any of the
      prohibitions set forth in any Anti-Terrorism Law.

     

    8.30  Defaults

    .
      No
      Event of Default exists under any of the Loan Documents.

     

    8.31  Design
      Professionals' Certificates

    .
      To
      Borrower's Knowledge, the certifications set forth in the certificates of the
      Design Professionals which Borrower has furnished to Administrative Agent in
      connection herewith are true and correct in all material respects.

     

    8.32  Other
      Representations

    .
      All of
      the representations in the other Loan Documents by Borrower and its Affiliates
      are true and correct in all material respects as of the date
      hereof.

     

    8.33  Loan
      In Balance

    .
      The
      Loan is In Balance.

     

    8.34  Employee
      Benefit Plans

    .
      Borrower maintains no pension, retirement or profit sharing employee benefit
      plan that is subject to any provision of ERISA. Borrower has no
      employees.

     

    8.35  No
      Construction

    .
      No
      construction, other than site development work and construction previously
      disclosed to Administrative Agent, has commenced on the Land.

     

    8.36  Appraisal

    .
      Borrower is not aware of any facts or circumstances of any nature which make,
      or
      are likely in the future to make, the Appraisal of the Project inaccurate in
      any
      material respect.

     

    8.37  Labor
      Controversies

    .
      To
      Borrower's knowledge there are no labor controversies pending or threatened
      against Borrower with respect to the Project or any construction contractor
      involved in the construction of the Improvements which have not been disclosed
      in writing to the Administrative Agent or the Lenders and would not reasonably
      be expected to constitute or result in a Material Adverse Effect.

     

    8.38  Insider

    .
      Neither
      Borrower nor any Affiliate of Borrower (which shall not include any member
      of
      Borrower which is not deemed to have "control" of Borrower respectively, as
      the
      term "control" is defined in 12 U.S.C. §375b(9)(B) or in regulations promulgated
      pursuant thereto) nor any other Person having "control" (as so defined) of
      Borrower is, or is a "related interest" of, an "executive officer," "director,"
      or Person who "directly or indirectly, or acting through or in concert with
      one
      or more persons, owns, controls, or has the power to vote more than 10 percent
      of any class of voting securities" or other "insider" (as those terms are
      defined in 12 U.S.C. §375b or in regulations promulgated pursuant thereto) of
      any Lender, of a bank holding company of which any Lender is a subsidiary,
      or of
      any subsidiary of a bank holding company of which any Lender is a subsidiary,
      or
      of any bank at which any Lender maintains a correspondent account, or of any
      bank which maintains a correspondent account with any Lender. 

     

    8.39  True
      and Complete Disclosure

    .
      To
      Borrower's Knowledge, the information, reports, financial statements, exhibits
      and schedules furnished in writing by or on behalf of Borrower Parties to
      Administrative Agent or any Lender in connection with the negotiation,
      preparation or delivery of this Agreement and the other Loan Documents or
      included herein or therein, when taken as a whole do not contain any untrue
      statement of material fact or omit to state any material fact necessary to
      make
      the statements herein or therein under the circumstances made, not misleading.
      All written information furnished after the date hereof by any Borrower Party
      to
      Administrative Agent and the Lenders in connection with this Agreement and
      the
      other Loan Documents and the Transactions will be true, complete and accurate
      in
      every material respect, or (in the case of projections) based on reasonable
      estimates, on the date as of which such information is stated or
      certified.

     

    8.40  Survival
      of Representations

    .
      Each
      Request for Loan Advance shall constitute an affirmation that the
      representations and warranties of Article
      VIII
      remain
      true and correct in all material respects as of the date of such Request for
      Loan Advance and will be so on the date of disbursement of the requested Loan,
      except with respect to (a) matters which have been disclosed in writing to
      and
      approved by Administrative Agent (subject, however, to the terms of this
      Agreement) or (b) liens of mechanics and materialmen and matters addressed
      in
      Section 8.5,
      would
      not, if adversely decided, be reasonably expected to have a Material Adverse
      Effect.

     

    ARTICLE
      IX  

     

    

     

    AFFIRMATIVE
      COVENANTS OF BORROWER

     

    Borrower
      covenants and agrees with the Lenders and Administrative Agent that, so long
      as
      any Commitment or Loan is outstanding and until payment in full of all amounts
      payable (other than contingent indemnification obligations) by Borrower
      hereunder:

     

    9.1  Information

    .
      Borrower shall deliver to Administrative Agent:

     

    (a)  within
      one hundred twenty (120) days after the close of each fiscal year of Borrower,
      Borrower prepared annual financial statements, in form reasonably satisfactory
      to Administrative Agent and certified by Borrower as being true and correct
      in
      all material respects, including a balance sheet, a statement of cash flows
      and
      a statement of profit and loss setting forth in comparative form figures for
      the
      preceding fiscal year, prepared in accordance with GAAP;

     

    (b)  not
      later
      than ten (10) days after the close of any month during which a Qualified
      Purchase Contract has been modified, amended, replaced or terminated, a sales
      report detailing the sales of Units in the Residential Component and including
      gross and net sales proceeds to date, Units under contract and expected closing
      dates and remaining Unit inventory for the Project for the most recent
      month;

     

    (c)  not
      later
      than ten (10) days after the close of any month, commencing with the first
      month
      following the close of the Loan, a monthly Club Membership sales report
      indicating the number and dollar value of Full Memberships and Social
      Memberships sold and the number of and dollar value of the remaining Club
      Memberships to be sold. In addition, said report will track Full Membership
      deposits and Social Membership deposits received;

     

    (d)  commencing
      with the first month following Completion and initial occupancy of each of
      the
      Club Component and Retail/Resort Services Component, monthly operating
      statement, and rent rolls, as appropriate, not later than 10 days following
      the
      end of each month;

     

    (e)  at
      the
      time of the delivery of each of the financial statements provided for in
      Sections 9.1(a),
      9.1(b),
      and
9.1(c),
      a
      certificate of an Authorized Officer of Borrower or its Managing Member, as
      applicable, certifying that (i) such respective financial statements and reports
      as being true, correct, and accurate and (ii) that such officer has no knowledge
      (after due inquiry), except as specifically stated, of any Default or if a
      Default has occurred, specifying the nature thereof in reasonable detail and
      the
      action which Borrower is taking or proposes to take with respect
      thereto;

     

    (f)  within
      one hundred twenty (120) days after the close of each fiscal year of Guarantor
      Vail Resorts, Inc., audited annual financial statements of Vail Resorts, Inc.,
      including a balance sheet, a statement of cash flows, and a statement of profit
      and loss setting forth, in comparative form, figures for the preceding fiscal
      year, prepared in accordance with GAAP;

     

    (g)  within
      forty-five (45) days after the close of each fiscal quarter of Vail Resorts,
      Inc., quarterly financial statements of Guarantor Vail Resorts, Inc., in a
      form
      consistent with the financial statements previously provided to Administrative
      Agent by Vail Resorts, Inc., certified as true and correct by an authorized
      officer of Vail Resorts, Inc., and containing a balance sheet, statement of
      cash
      flows and a statement of profit and loss;

     

    (h)  within
      five (5) days after furnishing to the Lenders under The Vail Corporation's
      Principal Bank Credit Facility, a copy of the compliance certificate required
      thereunder; and

     

    (i)  from
      time
      to time such other information regarding the financial condition, operations,
      business or prospects of Borrower, the Project and/or the other Borrower Parties
      as Administrative Agent may reasonably request.

     

    9.2  Notices
      of Material Events

    .
      Borrower shall give to Administrative Agent prompt written notice of the
      following:

     

    (a)  the
      occurrence of any Default or Event of Default, including a description of the
      same in reasonable detail;

     

    (b)  the
      commencement (or threatened commencement) of any legal or arbitral proceedings,
      and of all proceedings, other than any proceeding in connection with Anticipated
      Encumbrances, by or before any Governmental Authority, and any material
      development in respect of such legal or other proceedings, affecting any of
      Borrower, the Project, or any Material Agreement;

     

    (c)  promptly
      after Borrower knows or has reason to believe that any material default by
      any
      other party has occurred under any Project Document or any Material Agreement
      (other than a Qualified Purchase Contract), a notice of such
      default;

     

    (d)  notice
      of
      any threatened Condemnation, or the occurrence of any Casualty; and

     

    (e)  any
      other
      development that results in, or could reasonably be expected to result in,
      a
      Material Adverse Effect.

     

    9.3  Existence,
      Etc.

    Borrower
      will, and will cause each other Borrower Party to, preserve and maintain its
      legal existence and all material rights, privileges, licenses and franchises
      necessary for the maintenance of its existence and the conduct of its
      affairs.

     

    9.4  Compliance
      with Laws; Adverse Regulatory Changes.

     

    (a)  Borrower
      shall comply in all material respects (subject to such more stringent
      requirements as may be set forth elsewhere herein) with all Applicable Laws.
      Borrower shall maintain in full force and effect all Government Approvals and
      shall from time to time obtain all Government Approvals as shall now or
      hereafter be necessary under Applicable Law in connection with the construction,
      operation or maintenance of the Project or the execution, delivery and
      performance by Borrower of any of the Project Documents to which it is a party
      and shall comply with all such Government Approvals and keep them in full force
      and effect. Borrower shall promptly furnish a true and complete copy of each
      such Government Approval obtained after the date hereof to Construction
      Consultant.

     

    (b)  After
      prior notice to Administrative Agent, Borrower, at its own expense, may contest
      by appropriate legal proceedings promptly initiated and conducted in good faith
      and with due diligence, the validity or application of any Applicable Law;
      provided that: (i) no Event of Default or monetary Default of which
      Administrative Agent has given Borrower notice exists; (ii) Borrower shall
      pay
      any outstanding fines, penalties or other payments under protest unless such
      proceeding shall suspend the collection of such items; (iii) such proceeding
      shall be permitted under and be conducted in accordance with the provisions
      of
      any other instrument to which Borrower or the Project is subject and shall
      not
      constitute a default thereunder; (iv) no part of or interest in the Project
      will
      be in imminent danger of being sold, forfeited, terminated, canceled or lost
      during the pendency of the proceeding; (v) such proceeding shall not subject
      Borrower, Administrative Agent or any Lender to criminal or civil liability
      (other than civil liability as to which adequate security has been provided
      pursuant to clause (vi) below); (vi) unless paid under protest, Borrower shall
      have furnished such security as may be required in the proceeding, or as may
      be
      reasonably requested by Administrative Agent, to insure the payment of any
      such
      items, together with all interest and penalties thereon, which shall not be
      less
      than 110% of the maximum liability of Borrower as reasonably determined by
      Administrative Agent, which security shall be deposited in a Controlled Account;
      and (vii) Borrower shall promptly upon final determination thereof pay the
      amount of such items, together with all costs, interest and
      penalties.

     

    9.5  Insurance.

     

    (a)  Borrower
      shall at all applicable times obtain and maintain, at Borrower's expense, for
      the benefit of Borrower, Administrative Agent and the Lenders, the insurance
      listed on Schedule 9.5.

     

    (b)  Such
      insurance shall be obtained under valid and enforceable policies (individually,
      a "Policy"
      and,
      collectively, the "Policies")
      written by financially responsible companies (i) authorized to issue such
      insurance in the State of Colorado, (ii) having a Best's Rating of not less
      than
      A-IX and (iii) otherwise satisfactory to Administrative Agent.

     

    (c)  If
      any
      such Insurance Proceeds required to be paid to Administrative Agent are instead
      made payable to Borrower, Borrower hereby appoints Administrative Agent as
      its
      attorney-in-fact, irrevocably and coupled with an interest, to endorse and/or
      transfer any such payment to Administrative Agent (on behalf of the
      Lenders).

     

    (d)  Borrower
      shall deliver to Administrative Agent on or before the Closing Date valid
      evidence (i.e., Policies and/or certificates of insurance) acceptable to
      Administrative Agent of the Policies required by this Agreement or any other
      Loan Document establishing (i) the issuance of such policies, (ii) that the
      payment of all premiums (collectively, the "Insurance
      Premiums")
      payable for the period are current and (iii) coverage which meets all of the
      insurance requirements set forth in this Agreement.

     

    (e)  Not
      less
      than thirty (30) days prior to the expiration, termination or cancellation
      of
      any Policy which Borrower is required to maintain hereunder, Borrower shall
      obtain a replacement or renewal Policy or Policies (or a binding commitment
      for
      such replacement or renewal Policy or Policies) meeting the requirements of
      this
      Agreement, which shall be effective no later than the date of the expiration,
      termination or cancellation of the previous Policy, and shall deliver to
      Administrative Agent (i) a valid binder in respect of such Policy or Policies
      in
      the same form and containing the same information as the expiring Policy or
      Policies required to be delivered by Borrower and (ii) evidence that the payment
      of all Insurance Premiums then due to the applicable insurer are
      current.

     

    (f)  Without
      limiting the obligations of Borrower under the foregoing provisions of this
      Section 9.5,
      if
      Borrower shall fail to maintain in full force and effect insurance as required
      by the foregoing provisions of this Section 9.5,
      then
      Administrative Agent may, but shall have no obligation so to do, procure
      insurance covering the interests of the Lenders and Administrative Agent in
      such
      amounts and against such risks as Administrative Agent (or the Required Lenders)
      shall deem reasonably appropriate and in accordance with the requirements
      hereof, and Borrower shall reimburse Administrative Agent in respect of any
      Insurance Premiums paid by Administrative Agent in respect thereof.

     

    (g)  In
      the
      event of foreclosure of the Security Instrument or other transfer of title
      or
      assignment of the Project in extinguishment, in whole or in part, of the Loans,
      all right, title and interest of Borrower in and to all Policies of insurance
      required hereunder except the right to proceeds of such policies relating to
      events occurring prior to such transfer of title, shall inure to the benefit
      of
      and pass to the successor in interest to Administrative Agent and the Lenders
      or
      the purchaser or grantee of the Project.

     

    (h)  Notwithstanding
      the foregoing, Administrative Agent may require Borrower to obtain additional
      insurance coverages and amounts, provided that such additional insurance is
      then
      customarily required by other lenders for properties similar to the Project,
      as
      reasonably determined by Administrative Agent.

     

    9.6  Real
      Estate Taxes and Other Charges.

     

    (a)  Subject
      to the provisions of Section 9.6(b)
      of this
      Section 9.6
      and
      Section 9.12,
      Borrower shall pay all Real Estate Taxes and Other Charges now or hereafter
      levied or assessed or imposed against the Project or any part thereof before
      fine, penalty, interest or cost attaches thereto. Subject to the provisions
      of
      Section 9.6(b)
      of this
      Section 9.6,
      Borrower shall furnish to Administrative Agent receipts for the payment of
      Real
      Estate Taxes and Other Charges prior to the date the same shall become
      delinquent; provided,
      however,
      that
      Borrower is not required to furnish such receipts for payment of Real Estate
      Taxes if Administrative Agent is paying the same pursuant to the reserves
      established under Section 9.12.

     

    (b)  After
      prior written notice to Administrative Agent, Borrower, at its own expense,
      may
      contest by appropriate legal proceeding, promptly initiated and conducted in
      good faith and with due diligence, the amount or validity or application in
      whole or in part of any Real Estate Taxes and Other Charges, provided that:
      (i)
      no Default and no Event of Default exists; (ii) Borrower shall pay the Real
      Estate Taxes and Other Charges under protest unless such proceeding shall
      suspend the collection of the Real Estate Taxes and Other Charges; (iii) such
      proceeding shall be permitted under and be conducted in accordance with the
      provisions of any other instrument to which Borrower or the Project is subject
      and shall not constitute a default thereunder; (iv) such proceeding shall be
      conducted in accordance with all applicable statutes, laws and ordinances;
      (v)
      neither the Project nor any part thereof or interest therein will, in the
      reasonable opinion of Administrative Agent, be in danger of being sold,
      forfeited, terminated, cancelled or lost during the pendency of the proceeding;
      (vi) Borrower shall have furnished such security as may be required in the
      proceeding, or as may be reasonably requested by Administrative Agent (but
      in no
      event less than 110% of the Real Estate Taxes or Other Charges being contested),
      to insure the payment of any such Real Estate Taxes and Other Charges, together
      with all interest and penalties thereon; and (vii) Borrower shall promptly
      upon
      final determination thereof pay the amount of such Real Estate Taxes or Other
      Charges, together with all costs, interest and penalties.

     

    9.7  Further
      Assurances

    .
      Borrower will, and will cause each of the other Borrower Parties to promptly,
      upon request by Administrative Agent, execute any and all further documents,
      agreements and instruments, and take all such further actions which may be
      required under any applicable law, or which Administrative Agent may reasonably
      request, to effectuate the Transactions, all at the expense of Borrower.
      Borrower, at its sole cost and expense, shall take or cause to be taken all
      action reasonably required or requested by Administrative Agent to maintain
      and
      preserve the Liens of the Security Documents and the priority thereof Borrower
      shall from time to time execute or cause to be executed any and all further
      instruments (including financing statements, continuation statements and similar
      statements with respect to any of the Security Documents), and register and
      record such instruments in all public and other offices, and shall take all
      such
      further actions, as may be necessary or requested by Administrative Agent for
      such purposes, including timely filing or refiling all continuations and any
      assignments of any such financing statements, as appropriate, in the appropriate
      filing offices.

     

    9.8  Performance
      of Project Documents, Material Agreements, and Easements.

     

    (a)  Borrower
      shall (i) perform and observe in all material respects all of its covenants
      and
      agreements contained in any of the Project Documents and Material Agreements
      to
      which it is a party, including the application (to the extent required under
      this Agreement) of any funds to Project Costs received by Borrower from any
      party pursuant to any such Material Agreement, (ii) take all reasonable and
      necessary action to prevent the termination of any such Project Document or
      Material Agreement (other than a Qualified Purchase Contract) in accordance
      with
      the terms thereof or otherwise, (iii) enforce each material covenant or
      obligation of each such Project Document and Material Agreement in accordance
      with its terms, (iv) promptly give Administrative Agent copies of any default
      or
      other material notices given by or on behalf of Borrower received by or on
      behalf of Borrower from any other Person under the Project Documents or the
      Material Agreements, and (v) take all such action to achieve the purposes
      described in clauses (i), (ii) and (iii) of this Section 9.8
      as may
      from time to time be reasonably requested by Administrative Agent; provided,
      however,
      that
      Borrower shall be permitted, upon Administrative Agent's reasonable approval,
      to
      contest the validity or applicability of any requirement under the Project
      Documents or any Material Agreement. 

     

    (b)  Borrower
      will comply with all restrictive covenants and easements affecting the Project
      (unless the Title Company has insured against the enforcement of same in the
      Title Policy). All covenants, easements, cross easements or operating agreements
      which may hereafter be acquired, entered into or amended by Borrower affecting
      the Project (it being understood that Borrower will use commercially reasonable
      efforts to procure such of the foregoing items as Administrative Agent may
      reasonably deem appropriate) shall be submitted to Administrative Agent for
      Administrative Agent's approval, which shall not be unreasonably withheld or
      delayed, prior to the execution thereof by Borrower, accompanied by a drawing
      or
      survey showing the location thereof.

     

    9.9  Performance
      of the Loan Documents

    .
      Borrower shall observe, perform and satisfy all the terms, provisions, covenants
      and conditions required to be observed, performed or satisfied by it under
      the
      Loan Documents, and shall pay when due all costs, fees and expenses required
      to
      be paid by it under the Loan Documents.

     

    9.10  Books
      and Records; Inspection Rights

    .
      Borrower will, and will cause each of the other Borrower Parties to, keep proper
      books of record and account in which full, true, complete and correct entries
      are made of all dealings and transactions in relation to its business and
      activities. Borrower will, and will cause each of the other Borrower Parties
      to,
      permit any representatives designated by Administrative Agent or any Lender,
      upon reasonable prior notice, to visit and inspect its properties, to examine
      and make extracts from its books and records relating to the Project and the
      overall financial condition of such parties, and to discuss its affairs,
      finances and condition with its officers and independent accountants, all at
      such reasonable times and as often as reasonably requested.

     

    9.11  Environmental
      Compliance.

     

    (a)  Environmental
      Covenants.
      Borrower covenants and agrees that: (i) all uses and operations on or off the
      Project by Borrower shall be in compliance with all Environmental Laws and
      permits issued pursuant thereto (and that Borrower will use commercially
      reasonable efforts to cause any other Person who uses the Project to do so
      in
      compliance with all Environmental Laws and permits issued pursuant thereto),
      except where the failure to comply with such laws and permits is not reasonably
      likely to result in a Material Adverse Environmental Effect; (ii) Borrower
      shall
      not permit a Release of Hazardous Substances in, on, under or from the Project,
      which release results in a Material Adverse Environmental Effect; (iii) Borrower
      shall not permit Hazardous Substances in, on, or under the Project, except
      those
      that are in compliance with all Environmental Laws (i.e., materials used in
      cleaning and other building operations) and matters disclosed in the
      Environmental Reports; (iv) Borrower shall keep the Project free and clear
      of
      all liens and other encumbrances imposed pursuant to any Environmental Law,
      whether due to any act or omission of Borrower or any other Person
      (collectively, "Environmental
      Liens");
      (v)
      notwithstanding clause (iii) above, Borrower shall not, or permit any other
      Person to, install any asbestos or asbestos containing materials on the Project;
      (vi) Borrower shall cause the Remediation of such Hazardous Substances present
      on, under or emanating from the Project, or migrating onto or into the Project,
      in accordance with and to the extent required by this Agreement and
      Environmental Laws; (vii) Borrower shall provide Administrative Agent, the
      Lenders and their representatives with access at reasonable times to all or
      any
      portion of the Project for purposes of inspection, provided that such
      inspections shall not unreasonably interfere with the operation of the Project
      or occupants thereof, and shall cooperate with Administrative Agent, the Lenders
      and their representatives in connection with such inspections, including but
      not
      limited to providing all relevant information and making knowledgeable persons
      available for interviews; and (viii) promptly deliver to Administrative Agent
      copies of all required Government Approvals relating to the proper removal
      of
      any asbestos, any aboveground storage tank, any underground storage tank
      currently existing at the Project relating to Remediation of any Release of
      Hazardous Substances or evidencing compliance with violations addressed in
      the
      Shaw Discharge Report.

     

    (b)  Environmental
      Notices.
      Borrower shall promptly provide notice to Administrative Agent of: (i) all
      Environmental Claims asserted and material Environmental Claims threatened
      against Borrower or the Project and any material Environmental Claims asserted
      or threatened against any other party occupying the Project or any portion
      thereof which become known to Borrower; (ii) the discovery by Borrower of any
      occurrence or condition on the Project or on any real property adjoining or
      in
      the vicinity of the Project which could reasonably be expected to lead to an
      Environmental Claim against Borrower, Administrative Agent or any of the
      Lenders; (iii) the commencement or completion of any Remediation at the Project;
      and (iv) any Environmental Lien. In connection therewith, Borrower shall
      transmit to Administrative Agent copies of any citations, orders, notices or
      other written communications received from any Person and any notices, reports
      or other written communications submitted to any Governmental Authority with
      respect to the matters described above.

     

    9.12  Reserves

    .
      Administrative Agent may, following and during the continuance of an Event
      of
      Default, at any time and from time to time, at its option (or at the direction
      of the Required Lenders), to be exercised by written notice to Borrower, require
      the deposit by Borrower into a Controlled Account, at the time of each payment
      of an installment of interest or principal under the Notes, of additional
      amounts sufficient to discharge the obligations of Borrower under Sections
      9.5
      and
9.6
      (if
      applicable, and excluding all income, franchise, single business or other taxes
      imposed on Borrower unless the same is in lieu of real estate taxes) when they
      become due. Simultaneously with the initial deposit under this Section
9.12,
      Borrower shall deposit with Administrative Agent an amount determined by
      Administrative Agent to be necessary to ensure that there will be on deposit
      with Administrative Agent an amount which, when added to the monthly payments
      subsequently required to be deposited with Administrative Agent hereunder on
      account of Real Estate Taxes and Insurance Premiums, will result in there being
      on deposit with Administrative Agent an amount sufficient to pay the next due
      periodic installment of Real Estate Taxes and Insurance Premiums at least one
      (1) month prior to the delinquency date thereof and the next periodic payments
      of insurance premiums and ground rent at least one (1) month prior to the due
      date thereof. Commencing on the first Business Day of the first calendar month
      after the occurrence of an Event of Default and continuing thereafter on the
      first Business Day of each month thereafter, Borrower shall pay to
      Administrative Agent deposits in an amount equal to one-twelfth (1/12) of the
      yearly amount of Real Estate Taxes and Insurance Premiums that will next become
      due and payable on the Project. The determination of the amount to be deposited
      with Administrative Agent with each installment shall be made by Administrative
      Agent in its sole discretion. Such amounts shall be held by Administrative
      Agent
      in a Controlled Account and applied (together with any interest earned thereon)
      to the payment of the obligations in respect to which such amounts were
      deposited or, at the option of Administrative Agent, to the payment of said
      obligations in such order or priority as Administrative Agent shall determine,
      on or before the respective dates on which the same or any of them would become
      delinquent. If one (1) month prior to the due date of any of the aforementioned
      obligations the amounts then on deposit therefor shall be insufficient for
      the
      payment of such obligations in full, Borrower, within five (5) Business Days
      after demand, shall deposit the amount of the deficiency Administrative Agent
      into the Controlled Account. Nothing herein contained shall be deemed to affect
      any right or remedy of Administrative Agent and/or the Lenders under the
      provisions of this Agreement or the other Loans Documents or of any statute
      or
      rule of law to pay any such amount and to add the amount so paid together with
      interest at the Default Rate to the indebtedness secured by the Security
      Instrument. Borrower hereby pledges to and grants to Administrative Agent a
      security interest in any and all monies now or hereafter deposited in such
      Controlled Account as additional security for the payment of the Loans and
      agrees to enter into an agreement with Administrative Agent and the bank where
      such account is established substantially in the form in order to perfect
      Administrative Agent's security interest therein. In making any payment from
      such Controlled Account, Administrative Agent may do so according to any bill,
      statement or estimate or procured from the appropriate public office (with
      respect to Real Estate Taxes), insurer or agent (with respect to Insurance
      Premiums), without inquiry into the accuracy of such bill, statement or estimate
      or into the validity of any such charge.

     

    9.13  Accessibility
      Laws.

     

    (a)  Compliance.
      Borrower will perform and comply promptly with, and cause the Project, including
      any future alterations to the Project constructed by Borrower to be constructed,
      maintained, used and operated in accordance with all applicable Accessibility
      Laws and will maintain accurate records of all expenditures made in connection
      with any alterations with respect to Accessibility Laws to the Project. Upon
      the
      request of Administrative Agent, and if (i) any Governmental Authority having
      jurisdiction over the Project or Borrower shall issue a violation or a notice
      of
      violation with respect to any Accessibility Laws, (ii) required by any
      applicable Accessibility Laws or (iii) Administrative Agent reasonably believes
      an Accessibility Laws violation may exist at or affect the Project, Borrower
      shall conduct such surveys of the Project as Administrative Agent shall
      reasonably require to ascertain that the Project is in compliance with all
      Accessibility Laws.

     

    (b)  Notices.
      If
      Borrower receives any notice that Borrower or the Project is in default under
      or
      is not in compliance with any Accessibility Law, or notice of any proceeding
      initiated under or with respect thereto, Borrower will promptly furnish a copy
      of such notice to Administrative Agent.

     

    9.14  Use
      of
      Proceeds; Margin Regulations.

     

    (a)  Borrower
      will use (i) the proceeds of the Loans in accordance with the Project Budget
      and
      (ii) the disbursements from any Deficiency Deposit for the Project
      Costs.

     

    (b)  No
      part
      of the proceeds of the Loans will be used for the purpose of purchasing or
      acquiring any "margin stock" within the meaning of Regulation U of the Board
      of
      Governors of the Federal Reserve System or for any other purpose which would
      be
      inconsistent with Regulation T, U, X or any other Regulations of such Board
      of
      Governors, or for any purposes prohibited by Legal Requirements.

     

    9.15  Inspection

    .
      Borrower shall permit representatives of Administrative Agent, the Construction
      Consultant and the Lenders, at reasonable times and on reasonable advance
      notice, to examine its books of record and account, to make copies and abstracts
      therefrom, and to discuss its affairs, finances and accounts with its principal
      officers, engineers and independent accountants (and by this provision Borrower
      authorizes said accountants to discuss with such Persons such affairs, finances
      and accounts, but after prior notice to Borrower of such discussions). Without
      limiting the foregoing, representatives of the Construction Consultant,
      Administrative Agent and the Lenders shall have the right at reasonable times
      and on reasonable advance notice to (a) inspect the Project and all materials
      to
      be used in connection with the construction of the Improvements from time to
      time and to witness the construction thereof, (b) to examine all detailed plans
      and shop drawings in connection with the construction of the Improvements and
      (c) meet with the representatives of the Design Professionals, the General
      Contractor and the Major Subcontractors to discuss the status and issues
      relating to the construction of the Improvements (and by this provision Borrower
      authorizes Borrower's Architect, the General Contractor and the Major
      Subcontractors to cooperate and discuss with such Persons such construction
      matters, but after reasonable prior notice to Borrower of such discussions).
      Borrower shall at all times cause a complete set of the original plans (and
      all
      supplements thereto) relating to the construction of the Project to be
      maintained at the Project or construction office and available for inspection
      by
      such representatives.

     

    9.16  Project
      Construction.

     

    (a)  Borrower
      will prosecute or cause to be prosecuted the Construction Work in accordance
      with generally accepted engineering and construction practice, the Plans and
      Specifications, the Construction Schedule and Applicable Laws. Borrower will
      timely commence (but in no event later than sixty (60) days after the date
      hereof) the Construction Work. Borrower shall cause Completion of such
      Construction Work to be accomplished by the Completion Date (other than Punch
      List items that do not adversely affect the use, occupancy or operation of
      the
      Project and tenant improvements to rentable space in the Commercial Component
      that is not yet occupied) subject to Section 14.26.
      Once
      begun, Borrower shall use its commercially reasonable efforts to cause the
      Construction Work to be prosecuted with diligence in accordance with the
      Construction Schedule so as (i) to achieve Completion of the Base Building
      Work
      (including the satisfaction of the Base Building Substantial Completion
      Conditions) and obtain a temporary certificate of occupancy or such other
      permits or approvals as may be applicable to the Base Building Work on or before
      the Completion Date, free and clear of Liens or claims for Liens for materials
      supplied and for labor or services performed in connection with the Base
      Building Work and (ii) to achieve Completion of each portion of the Construction
      Work prior to the date required pursuant to each Qualified Purchase Contract.
      Borrower shall not commence the Construction Work, or any particular component
      or phase thereof, until Borrower has obtained all permits, licenses and
      approvals required under any Applicable Law for the commencement of the
      Construction Work or such component or phase thereof, as the case may be. In
      no
      event will Borrower permit or suffer any party, including subcontractors, to
      commence proceedings to enforce any Lien unless and to the extent that said
      Lien
      is fully bonded; provided that such bonding effects the removal of any such
      Liens or claims.

     

    (b)  Borrower
      will deliver to Administrative Agent, on demand, copies of all contracts, bills
      of sale, statements, receipted vouchers and agreements under which Borrower
      claims title to any materials, fixtures or articles incorporated in the
      Improvements, or subject to the lien of the Security Instrument.

     

    (c)  Borrower
      will, upon demand of Administrative Agent based upon the advice of the
      Construction Consultant, correct any Unsatisfactory Work pursuant to Section
      7.7;
      and the
      advance of any proceeds of any Loan shall not constitute a waiver of
      Administrative Agent's right to require compliance with this covenant with
      respect to any such defects or departures from the Plans and Specifications
      not
      theretofore discovered by or called to the attention of the Construction
      Consultant. Notwithstanding the above, none of Administrative Agent, the Lenders
      or the Construction Consultant shall have any affirmative duty to Borrower
      or
      any third party to inspect for said defects or to call them to the attention
      of
      Borrower or anyone else.

     

    (d)  Borrower
      shall deliver to Administrative Agent and the Construction Consultant copies
      of
      all Major Subcontracts for Administrative Agent's approval and shall deliver
      to
      Construction Consultant all other subcontracts for informational purposes
      entered into for the construction of the Improvements.

     

    (e)  Subject
      to the provisions of Section 10.12,
      Borrower shall from time to time promptly deliver to Administrative Agent and
      the Construction Consultant all Change Orders, pending or executed, along with
      evidence that all Government Approvals then required have been obtained,
      together with any documents related thereto and a written explanation of the
      reasons therefor.

     

    (f)  Administrative
      Agent may (and if requested by the Required Lenders, shall) commission an
      Appraisal (i) upon the satisfaction of the Base Building Substantial Completion
      Conditions, (ii) at any other time if required by Applicable Law or (iii) as
      may
      be required to determine compliance with Section 9.22.
      Such
      Appraisals shall be completed at Borrower's expense and shall be prepared by
      an
      appraiser satisfactory to Administrative Agent, provided however, if no Event
      of
      Default has occurred, Borrower shall not be required to pay for any such
      Appraisal more than once in any twelve (12) month period.

     

    9.17  Proceedings
      to Enjoin or Prevent Construction

    .
      If any
      proceedings are filed seeking to enjoin or otherwise prevent or declare invalid
      or unlawful all or any part of the Construction Work, Borrower, at its sole
      cost
      and expense, will use commercially reasonable efforts to cause such proceedings
      to be vigorously contested in good faith, and in the event of an adverse ruling
      or decision, use commercially reasonable efforts to prosecute all allowable
      appeals therefrom, and will, without limiting the generality of the foregoing,
      use commercially reasonable efforts to resist the entry or seek the stay of
      any
      temporary or permanent injunction that may be entered, and use its best efforts
      to bring about a favorable and speedy disposition of all such
      proceedings.

    

    9.18  Administrative
      Agent's, Lenders' and Construction Consultant's Actions for their Own Protection
      Only

    .
      The
      authority herein conferred upon Administrative Agent, the Lenders and/or the
      Construction Consultant and any action taken by Administrative Agent, the
      Lenders and/or the Construction Consultant in making inspections, procuring
      sworn statements and waivers of lien, approving contracts and subcontracts
      and
      approving Plans and Specifications will be taken by Administrative Agent, the
      Lenders and the Construction Consultant for their own protection only, and
      none
      of Administrative Agent, the Lenders or the Construction Consultant shall be
      deemed to have assumed any responsibility to Borrower or any other party with
      respect to any such action herein authorized or taken by Administrative Agent,
      the Lenders or the Construction Consultant or with respect to the Construction
      Work, performance of contracts or subcontracts by any contractors or
      subcontractors, or prevention of claims for mechanics' liens. Any review,
      investigation or inspection conducted by Administrative Agent, the Lenders,
      the
      Construction Consultant or any other architectural or engineering consultants
      retained by Administrative Agent in order to verify independently Borrower's
      satisfaction of any conditions precedent to advances under this Agreement,
      Borrower's performance of any of the covenants, agreements and obligations
      of
      Borrower under this Agreement, or the validity of any representations and
      warranties made by Borrower hereunder (regardless of whether or not the party
      conducting such review, investigation or inspection should have discovered
      that
      any of such conditions precedent were not satisfied or that any such covenants,
      agreements or obligations were not performed or that any such representations
      or
      warranties were not true), shall not affect (or constitute a waiver by
      Administrative Agent or the Lenders of) (a) any of Borrower's representations,
      warranties or obligations under this Agreement or Administrative Agent's and
      the
      Lenders' reliance thereon or right to require the performance thereof or (b)
      Administrative Agent's or the Lenders' reliance upon any certifications of
      Borrower or the Design Professionals required under this Agreement or any other
      facts, information or reports furnished to Administrative Agent and/or the
      Lenders by Borrower hereunder.

     

    9.19  Sign
      and Publicity

    .
      If
      Administrative Agent requests, Borrower shall, to the extent permitted by
      Applicable Law, erect a sign approved by Administrative Agent and Borrower
      on
      the Project in a conspicuous location indicating that the financing for the
      Project has been provided by the Lenders. The cost of any such sign shall be
      paid by Administrative Agent. In addition, Administrative Agent and the Lenders
      shall have the right to publicize the making of the Loans notwithstanding the
      provisions of Section 14.22.

     

    9.20  On-Site
      and Off-Site Materials

    .
      Borrower shall cause all materials supplied for or intended to be utilized
      in,
      the construction of the Project, but not affixed to or incorporated into the
      Project, to be stored on the Project site or at such other location as may
      be
      approved by Administrative Agent in writing, with adequate safeguards, as
      required by Administrative Agent, to prevent loss, theft, damage or commingling
      with other materials or projects, such safeguards shall include: (a) prior
      to
      making disbursements for materials which are stored on the Project or on
      property owned by an Affiliate of Borrower in the immediate vicinity of the
      Project (the "Lay-Down
      Yard")
      and
      intended to be incorporated into the Improvements pursuant to the Plans
      (collectively, "On-Site
      Stored Materials"),
      Administrative Agent shall have received (i) invoices, bills of sale and other
      documentation evidencing the amount owed for such materials, Borrower's
      ownership thereof, and evidence of the release of any right, title or lien
      in
      respect thereof by any vendor, conditioned only upon disbursement to such vendor
      of the disbursement amount requested, (ii) evidence that such materials are
      covered by the insurance policies required by this Construction Loan Agreement
      and are identified and protected against loss, theft and damage in a manner
      acceptable to Administrative Agent and the Construction Consultant, and (iii)
      evidence that advances made by the Lenders for any stored materials, whether
      or
      not such stored materials are stored on the Project or the Lay-Down Yard, do
      not, without the prior approval of the Administrative Agent, at any one time
      exceed in the aggregate Ten Million and No/100 Dollars ($10,000,000.00)
      inclusive of the amount requested; (b) with respect to advances for the purchase
      of certain major building materials which are ready for delivery to the Property
      but are temporarily stored at off-site locations other than the Project or
      property adjacent to the Project (collectively, "Off-Site
      Stored Materials"),
      approved by the Administrative Agent and the Construction Consultant prior
      to
      the delivery to the Project or incorporation into the Improvements of such
      Off-Site Stored Materials; provided, however, that in the case of each such
      advance, the Administrative Agent shall have received (i) invoices, bills of
      sale and other documentation evidencing the amount owed for such materials,
      Borrower's ownership thereof, and evidence of the release of any right, title
      or
      lien in respect thereof by any vendor, conditioned only upon disbursement to
      such vendor of the disbursement amount requested, (ii) evidence that such
      materials are covered by the insurance policies required by this Construction
      Loan Agreement and are identified and protected against loss, theft and damage
      in a manner acceptable to Administrative Agent and the Construction Consultant,
      (iii) a written statement from the manufacturer or storer of such Off-Site
      Stored Materials (or a provision in the purchase order therefor to such effect)
      that Administrative Agent, the Construction Consultant and either of their
      agents may fully inspect such Off-Site Stored Materials at all reasonable times,
      and (iv) evidence that advances to be made by the Lenders for all Off-Site
      Stored Materials do not, without the prior approval of the Administrative Agent,
      exceed, at any one time Two Million and No/100 Dollars ($2,000,000.00),
      inclusive of the amount requested; and (c) with respect to advances for the
      purchase of certain finally assembled, fully fabricated furniture, fixtures
      and
      equipment, which are ready for delivery to the Project but are temporarily
      stored at off-site locations other than the Project (collectively, "Off-Site
      Stored Furnishings"),
      approved by Administrative Agent and the Construction Consultant prior to
      delivery to the Project; provided, however, that in the case of each such Loan,
      the conditions contained herein have been satisfied with respect to the Off-Site
      Stored Furnishings and Administrative Agent shall have received a written
      statement from the manufacturer or storer of such Off-Site Stored Furnishings
      (or a provision in the purchase order therefor to such effect) that
      Administrative Agent, the Construction Consultant and either of their agents
      may
      fully inspect such Off-Site Stored Furnishings at all reasonable
      times.

     

    9.21  Minimum
      Loan Coverage Ratio

    .
      At all
      times during the term of this Agreement, Borrower shall maintain the Minimum
      Loan Coverage Ratio. If at any time Borrower shall fail to maintain the Minimum
      Loan Coverage Ratio, Borrower shall, within thirty (30) days after receipt
      of
      notice from Administrative Agent, (a) repay the Loan in an amount sufficient
      to
      comply with the Minimum Loan Coverage Ratio, or (b) provide evidence
      satisfactory to Administrative Agent in its sole discretion, that Qualified
      Purchase Contracts are in place to provide Net Sales Proceeds sufficient to
      meet
      the Minimum Loan Coverage Ratio.

     

    9.22  Loan
      to Value and Loan to Cost

    .
      At all
      times during the term of this Agreement, Borrower shall maintain a Loan to
      Value
      Ratio of not greater than 75% and a Loan to Cost Ratio percent not greater
      than
      80%. If at any time Administrative Agent shall determine, based upon an
      Appraisal obtained pursuant to Section 9.16(f),
      that
      the Loan to Value Ratio is greater than 75%, or the Loan to Cost Ratio is
      greater than 80%, Borrower shall, within thirty (30) days after receipt of
      Notice from Administrative Agent, repay the Loan in an amount sufficient to
      comply with this Section 9.22.

     

    9.23  Leasing.

     

    (a)  The
      Administrative Agent shall be given an opportunity to review leases for rentable
      space in the Commercial Component; provided, however, that Administrative
      Agent's approval of such leases will not be required if such lease provides
      for
      rents that are at commercially reasonable rates and contain commercially
      reasonable terms and conditions and are with third-party tenants unrelated
      to
      Borrower, or such lease is for rental of less than 2,500 square feet. In no
      event may any lease contain an option to purchase. In all other cases,
      Administrative Agent shall use reasonable efforts to approve or disapprove
      any
      proposed lease within seven (7) Business Days of receipt by Administrative
      Agent
      of the lease and all other information reasonably deemed necessary by
      Administrative Agent in connection with approval of the lease. Failure of the
      Administrative Agent to disapprove any such lease within such seven (7) Business
      Day period shall be deemed to be approval of such lease. Administrative Agent
      shall not unreasonably withhold its approval of any proposed lease. Without
      limiting the foregoing, Administrative Agent may condition approval of any
      such
      proposed lease on the execution and delivery by the tenant of a subordination,
      non-disturbance and attornment agreement in a form that is reasonably acceptable
      to Administrative Agent.

     

    (b)  Borrower
      shall use commercially reasonable efforts to deliver to Administrative Agent
      within fifteen (15) Business Days following a request therefore, a
      subordination, non-disturbance and attornment agreement and/or an estoppel
      certificate, for the benefit of Lenders, each in form and substance reasonably
      satisfactory to Administrative Agent, from such tenant or tenants as
      Administrative Agent shall specify.

     

    (c)  Within
      ten (10) days after the execution thereof, Borrower shall deliver to
      Administrative Agent copies of all leases.

     

    (d)  Borrower
      shall not amend or modify any lease requiring approval by Administrative Agent
      in any material respect, or waive or release any of the material provisions
      thereof.

     

    (e)  Borrower
      shall at all times comply with all of the terms and conditions of the leases
      and
      shall not permit any violation of the terms thereof or default
      thereunder.

     

    9.24  Club
      Memberships

    .
      Monthly, within ten (10) days after end of each month, Borrower shall deliver
      to
      Administrative Agent copies of all membership agreements in connection with
      the
      sale of Club Memberships. 

     

    ARTICLE
      X  

     

    NEGATIVE
      COVENANTS OF BORROWER

     

    Borrower
      covenants and agrees that, until the payment in full of the Obligations (other
      than contingent indemnification obligations), it will not do or permit, directly
      or indirectly, any of the following:

     

    10.1  Fundamental
      Change.

     

    (a)  Mergers;
      Consolidations; Disposal of Assets.
      Borrower will not merge into or consolidate with any other Person, or permit
      any
      other Person to merge into or consolidate with it, or sell, transfer, lease
      or
      otherwise dispose of (in one transaction or in a series of transactions) any
      substantial part of its properties and assets whether now owned or hereafter
      acquired (but excluding any sale or disposition of obsolete or excess furniture,
      fixture and equipment in the ordinary course of business if same is replaced
      with new furniture, fixtures and equipment of equal or greater utility or as
      contemplated by the Subdivision Agreement), or wind up, liquidate or dissolve,
      or enter into any agreement to do any of the foregoing.

     

    (b)  Organizational
      Documents.
      Without
      the prior written consent of Administrative Agent, Borrower will not make any
      Modification of the terms or provisions in any such Person's Organizational
      Documents.

     

    10.2  Limitation
      on Liens

    .
      Borrower will not create, incur, assume or suffer to exist any Lien upon any
      of
      the Project or its interest therein, whether now owned or hereafter acquired,
      except for the Permitted Liens. Borrower shall not be in Default under this
      Section 10.2
      if (a) a
      Lien for the performance of work or the supply of materials is filed against
      the
      Project unless Borrower fails to discharge such Lien by payment or bonding
      on or
      prior to the date that is the earlier of (i) forty-five (45) days after the
      date
      of filing of such lien and (ii) the date on which the Project is subject to
      a
      levy, execution, attachment or sequestration, or (b) so long as Borrower
      contests in good faith the validity or amount of any asserted lien and
      diligently prosecutes or defends an action appropriate to obtain a binding
      determination of the disputed matter, and in connection with such contest
      provides Administrative Agent with such security as it may require in its sole
      discretion to protect Administrative Agent against all loss, damage, and
      expense, including reasonable attorneys' fees, which Administrative Agent might
      incur if the asserted lien is determined to be valid.

     

    10.3  Transfer;
      Pledge.

     

    (a)  Except
      as
      expressly permitted by or pursuant to this Agreement, Borrower shall not allow
      any Transfer to occur or permit any owner of the Equity Interests in Borrower
      to
      pledge or otherwise encumber such Equity Interests, or any of the economic
      or
      other benefits therefrom.

     

    (b)  Notwithstanding
      anything herein to the contrary, direct and indirect Equity Interests in
      Borrower shall be permitted to be transferred to Persons that are wholly-owned,
      direct or indirect, subsidiaries of Vail Resorts, Inc.

     

    (c)  Borrower
      acknowledges that Administrative Agent is making one or more advances under
      this
      Agreement in reliance on the expertise, skill and experience of Borrower; thus
      the Obligations secured by the Security Documents include material elements
      similar in nature to a personal service contract. In consideration of
      Administrative Agent's reliance, Borrower agrees that Borrower shall not make
      any Transfer if such Transfer is prohibited by this Agreement unless the
      Transfer is preceded by Administrative Agent's express written consent to the
      particular transaction and transferee. If any prohibited Transfer occurs,
      Administrative Agent in its sole discretion may declare the Obligations to
      be
      immediately due and payable, and Administrative Agent may invoke any rights
      and
      remedies provided under Section 12.2
      hereof.
      Borrower acknowledges the materiality of the provisions of this Section
10.3(c)
      as a
      covenant of Borrower, and that such covenant was given individual weight and
      consideration by Administrative Agent in entering into the Obligations secured
      by the Security Documents, and that any Transfer in violation of the prohibited
      transfer provisions herein set forth shall result in a material impairment
      of
      Administrative Agent's interest in the Obligations and be deemed a breach of
      the
      foregoing covenant.

     

    (d)  Notwithstanding
      anything to the contrary in this Section 10.3,
      except
      as set forth in Section 10.3(b),
      any
      Change of Control or Transfer which would result in a Change of Control (in
      addition to any other consents or approvals required hereunder) shall be further
      subject to (i) Borrower providing prior written notice to Administrative Agent
      of any such transfer, (ii) no Default or Event of Default then existing, (iii)
      the proposed transferee being a corporation, partnership, joint venture,
      joint-stock company, trust or individual approved in writing by each Lender
      subject to a Limiting Regulation in its discretion, and (iv) payment to
      Administrative Agent on behalf of the Lenders of all costs and expenses incurred
      by Administrative Agent or any of the Lenders in connection with such transfer.
      Each Lender at the time subject to a Limiting Regulation shall, within ten
      (10)
      Business Days after receiving Borrower's notice of a proposed Change of Control
      or Transfer subject to this Section 10.3(b),
      furnish
      to Borrower a certificate (which shall be conclusive absent manifest error)
      stating that it is subject to a Limiting Regulation, whereupon such Lender
      shall
      have the approval right contained in clause (iii) above. Each Lender which
      fails
      to furnish such a certificate to Borrower during such ten (10) Business Day
      period shall be automatically and conclusively deemed not to be subject to
      a
      Limiting Regulation. If any Lender subject to a Limiting Regulation fails to
      approve a proposed transferee under clause (iii) above (any such Lender being
      herein called a "Rejecting
      Lender"),
      Borrower, upon three (3) Business Days notice, may (1) notwithstanding Section
      2.2(i),
      prepay
      such Rejecting Lender's outstanding Loans in accordance with the provisions
      for
      prepayment set forth in Section 3.4,
      or (2)
      require that such Rejecting Lender transfer all of its right, title and interest
      under this Agreement and such Rejecting Lender's Note to an Eligible Assignee
      designated by Borrower that is approved by Administrative Agent provided that
      such Eligible Assignee assumes all of the obligations of such Rejecting Lender
      hereunder, and purchases all of such Rejecting Lender's Loans hereunder for
      consideration equal to the aggregate outstanding principal amount of such
      Rejecting Lender's Loans, together with interest thereon to the date of such
      purchase (to the extent not paid by Borrower), and satisfactory arrangements
      are
      made for payment to such Rejecting Lender of all other amounts accrued and
      payable hereunder to such Rejecting Lender as of the date of such transfer
      (including any fees accrued hereunder and any amounts that would be payable
      under Section 2.2(i)
      as if
      all such Rejecting Lender's Loans were prepaid in full on such date). Subject
      to
      the provisions of Section 14.7(b),
      such
      Eligible Assignee shall be a "Lender" for all purposes hereunder. Without
      prejudice to the survival of any other agreement of Borrower hereunder, the
      agreements of Borrower contained in Sections 5.1,
      5.7,
      and
14.3
      shall
      survive for the benefit of such Rejecting Lender with respect to the time period
      prior to such replacement. 

     

    10.4  Indebtedness

    .
      Borrower shall not create, incur or suffer to exist, or otherwise become or
      remain directly or indirectly liable with respect to, any Indebtedness except
      the following:

     

    (a)  Indebtedness
      Under the Loan Documents.
      Indebtedness of Borrower in favor of Administrative Agent and the Lenders
      pursuant to this Agreement and the other Loan Documents;

     

    (b)  Trade
      Payables.
      Indebtedness of Borrower with respect to trade payables and accrued expenses
      incurred in the ordinary course of the business of operating and constructing
      the Project, provided the same are not evidenced by a promissory note, are
      paid
      when due (subject to good faith disputes), and do not exceed in the aggregate
      at
      any one time outstanding One Million and No/100 Dollars ($1,000,000.00) or
      such
      greater amounts shown on the Project Budget.

     

    10.5  Investments

    .
      Borrower will not make or permit to remain outstanding any Investments except
      operating deposit accounts with banks.

     

    10.6  Restricted
      Payments

    .
      Borrower shall make no Distributions until the Notes have been paid in full;
      provided, however, Distributions for repayment of sums advanced for payment
      of
      Project Costs shall be permitted so long as the sums advanced are in addition
      to
      Borrower's Initial Equity Contribution.

     

    10.7  Change
      of Organization Structure; Location of Principal Office

    .
      Borrower shall not change its name or change the location of its chief executive
      office, state of formation or organizational structure unless, in each instance,
      Borrower shall have (a) given Administrative Agent at least thirty (30) days'
      prior notice thereof, (b) made all filings or recordings, and taken all other
      action, necessary or desirable under Applicable Law to protect and continue
      the
      priority of the Liens created by the Security Documents, (c) if reasonably
      requested by Administrative Agent, delivered to Administrative Agent an opinion
      of counsel reasonably satisfactory to Administrative Agent covering the matters
      referred to in clause (b) above, and (d) if reasonably requested by
      Administrative Agent, caused the Title Company to issue an endorsement to the
      Title Policy reflecting such change and indicating that there has been no change
      in the state of title to the Project as a result of such change.

     

    10.8  Transactions
      with Affiliates

    .
      Except
      for transactions with Slifer, Smith and Frampton, payments of project management
      fees or reimbursable expenses to Vail Resorts Development Company as provided
      in
      the Project Budget, and construction of the Spa Project for Lodge Properties
      Inc., or as expressly permitted by this Agreement, Borrower shall not enter
      into, or be a party to, any transaction with an Affiliate of Borrower, except
      in
      the ordinary course of business and on terms which are fully disclosed to
      Administrative Agent, and are no less favorable to Borrower than would be
      obtained in a comparable arm's length transaction with an unrelated third
      party.

     

    10.9  No
      Joint Assessment; Separate Lots

    .
      Borrower shall not suffer, permit or initiate the joint assessment of the
      Project with any other real property constituting a separate tax
      lot.

     

    10.10  Zoning

    .
      Borrower shall not, without Administrative Agent's reasonably prior written
      consent, seek, make, suffer, consent to or acquiesce in any change or variance
      in any zoning or land use laws or other conditions of use of the Project or
      any
      portion thereof. Borrower shall not use or permit the use of any portion of
      the
      Project in any manner that could reasonably be expected to result in such use
      becoming a non-conforming use under any zoning or land use law or any other
      applicable law or Modify any agreements relating to zoning or land use matters
      or with the joinder or merger of lots for zoning, land use or other purposes,
      without the prior written consent of Administrative Agent. Without limiting
      the
      foregoing, in no event shall Borrower take any action that would reduce or
      impair either (a) the number of parking spaces at the Improvements required
      by
      Applicable Law or (b) access to the Project from adjacent public
      roads.

     

    10.11  ERISA

    .
      Borrower shall not shall not take any action, or omit to take any action, which
      would (a) cause Borrower's assets to constitute "plan assets" for purposes
      of
      ERISA or the Code or (b) cause the Transactions to be a nonexempt prohibited
      transaction (as such term is defined in Section 4975 of the Code or Section
      406
      of ERISA) that could subject Administrative Agent and/or the Lenders, on account
      of any Loan or execution of the Loan Documents hereunder, to any tax or penalty
      on prohibited transactions imposed under Section 4975 of the Code or Section
      502(i) of ERISA.

     

    10.12  Amendment
      of Contracts and Government Approvals

    .
      Borrower shall not, without Administrative Agent's prior consent (which shall
      not be unreasonably withheld or delayed, except with respect to clause (b)
      below
      and to the extent otherwise provided in this Section 10.12),
      (a)
      take any action to cancel or terminate any Project Document, any Material
      Agreement other than a Qualified Purchase Contract, or any Government Approval
      to which it is a party; (b) sell, assign, pledge, transfer, mortgage,
      hypothecate or otherwise dispose of (by operation of law or otherwise) or
      encumber any part of its interest in such Project Documents, Material Agreements
      or Government Approvals; (c) waive any material default under or breach of
      any
      material provisions of any such Project Document, Material Agreement or
      Government Approval or waive, fail to enforce, forgive or release any material
      right, interest or entitlement, howsoever arising, under or in respect of any
      material provisions of any such Project Document, Material Agreement or
      Government Approval or vary or agree to the variation in any material way of
      any
      material provisions of any such Project Document, Material Agreement or
      Government Approval or of the performance of any other Person under any such
      Project Document, Material Agreement or Government Approval; (d) Modify any
      material provision of, or give any material consent under, any such Project
      Document (including, without limitation, the Plans and Specifications, the
      Construction Schedule, the General Contract and any Major Subcontract), Material
      Agreement or Government Approval, including, without limitation, any
      Modification which, subject to Purchaser Upgrades and Borrower's right to make
      Change Orders pursuant to the provisions of Section 10.13
      below,
      would materially increase the Project Budget (including, without limitation,
      any
      Project Budget Line-Item); (e) petition, request or take any other legal or
      administrative action that seeks, or may reasonably be expected, to rescind,
      terminate or suspend any such Project Document, Material Agreement or Government
      Approval or amend or modify all or any material part thereof; or (f) enter
      into,
      or permit the General Contractor to enter into any new Major
      Subcontract.

     

    10.13  Change
      Orders; Purchaser Upgrades.

     

    (a)  Borrower
      shall not agree to or request any Change Order without Administrative Agent's
      and Construction Consultant's reasonable prior written consent except as
      specifically set forth in this Section 10.13.
      Each
      request for a Change Order shall be accompanied by appropriate supporting
      documents and shall be processed by the Administrative Agent within eight (8)
      Business Days of receipt of such a request except as otherwise provided in
      Section 10.13(d)
      and
      Section 13.9(b)(ii)(5).

     

    (b)  In
      addition to the rights under Section 10.12
      to make
      non-material changes, Borrower may make changes to the Plans and Specifications
      without obtaining Administrative Agent's or Construction Consultant's consent
      pursuant to a Purchaser Upgrade or a Change Order if (i) Borrower obtains the
      approval of all parties whose approval is required, including, without
      limitation, any consent or approval required from the General Contractor,
      subcontractors, sureties and Governmental Authorities; (ii) the structural
      integrity of the Improvements is not impaired; (iii) no substantial change
      in
      architectural appearance is effected and the salable and rentable square footage
      is not materially reduced; (iv) the performance of the mechanical, electrical
      and life safety systems of the Improvements is not materially adversely affected
      and are in conformance with Applicable Laws; (v) the Government Approvals will
      not be revoked, rescinded or otherwise invalidated as a result of any such
      change or an aggregate of such changes; and (vi) in the case of Change Orders,
      (1) no Event of Default has occurred and is continuing, (2) Borrower notifies
      Administrative Agent and the Construction Consultant in writing of such change
      within three (3) Business Days thereafter, and (3) the cost of or reduction
      resulting from any one such change does not exceed Five Hundred Thousand and
      No/100 Dollars ($500,000.00) and the aggregate change in cost of all such Change
      Orders does not exceed Two Million Five Hundred Thousand and No/100 Dollars
      ($2,500,000.00);

     

    (c)  Any
      Change Order or Purchaser Upgrade permitted pursuant to this Section
10.13
      or
      otherwise approved by Administrative Agent shall have the effect of Modifying
      the Plans and Specifications and the Project Budget consistent with such Change
      Order or Purchaser Upgrade.

     

    (d)  The
      provisions of Section 2.2
      and
      Section 10.13
      notwithstanding, Borrower may elect, not more than three (3) times during the
      term of the Loan, to request an expedited response to a request for consent
      to
      changes to the Plans and Specifications or request a Change Order (to the extent
      either such consent is required under the terms of this Construction Loan
      Agreement). Such request shall specifically state that "BORROWER REQUESTS
      EXPEDITED CONSENT PURSUANT TO SECTION 10.13(d)
      THE
      CONSTRUCTION LOAN AGREEMENT." If such request pursuant to this paragraph (e)
      requires approval of the Required Lenders under Section 13.9(b)(ii),
      then
      Administrative Agent shall request such approval within five (5) Business Days
      of receipt of the request, and the Lender reply period under
      Section 13.9(c),
      solely
      for purposes of the provisions of this paragraph (e), shall be reduced to five
      (5) Business Days; in such event, unless a Lender shall give written notice
      to
      Administrative Agent within such five (5) Business Day period that such Lender
      objects to the Plans and Specifications or changes therein submitted with the
      request (together with a written explanation of the reasons behind the
      objection), such Lender shall be deemed to have approved the request. If a
      request under this paragraph (e) does not require approval of the Required
      Lenders, the Administrative Agent shall be required to respond to such request
      within five (5) Business Days of receipt of the request.

     

    10.14  Special
      Districts/Sales Tax Increment Financing

    .
      Borrower shall not cause the formation of any special districts, nor enter
      into
      or approve of any sales tax increment financing agreement or other financing
      agreement with any Governmental Authority relating in any way to the
      Project.

     

    10.15  Anti-Terrorism
      Law

    .
      Borrower shall not (a) conduct any business or engage in making or receiving
      any
      contribution of funds, goods or services to or for the benefit of any Person
      described in Section 8.29
      above,
      (b) deal in, or otherwise engage in any transaction relating to, any property
      or
      interests in property blocked pursuant to the Anti-Terrorism Order or any other
      Anti-Terrorism Law, or (c) engage in or conspire to engage in any transaction
      that evades or avoids, or has the purpose of evading or avoiding, or attempts
      to
      violate, any of the prohibitions set forth in any Anti-Terrorism Law (and
      Borrower shall deliver to the Lenders any certification or other evidence
      requested from time to time by any Lender in its reasonable discretion,
      confirming Borrower's compliance with this Section 10.15
      and
      Section 8.29).

     

    ARTICLE
      XI  

     

    

     

    INSURANCE
      OR CONDEMNATION AWARDS

     

    11.1  Casualties
      and Condemnations.

     

    (a)  If
      a
      Casualty shall occur, Borrower shall give prompt notice of such damage to
      Administrative Agent and shall promptly commence and diligently prosecute the
      completion of the repair and restoration of the Project in accordance with
      Applicable Law and the Material Agreements to, as nearly as reasonably possible,
      the condition the Project was in immediately prior to such Casualty, with such
      alterations as may be reasonably approved by Administrative Agent and, to the
      extent required under any Material Agreement, any party thereto (a "Restoration").
      Borrower shall pay all costs of such Restoration regardless of whether such
      costs are covered by Insurance Proceeds (and regardless of whether Borrower
      is
      entitled to any disbursement of Insurance Proceeds pursuant to Section
11.3
      below).
      Administrative Agent may, but shall not be obligated to make proof of loss
      if
      not made promptly by Borrower.

     

    (b)  Borrower
      shall promptly give Administrative Agent notice of the commencement of (or
      of
      any threatened) Condemnation proceedings and shall deliver to Administrative
      Agent copies of any and all papers served in connection with such actual or
      threatened Condemnation. Administrative Agent may participate in any
      Condemnation proceedings, and Borrower shall from time to time deliver to
      Administrative Agent all instruments requested by it to permit such
      participation. Borrower shall, at its expense, diligently prosecute any such
      proceedings, and shall consult with Administrative Agent, its attorneys and
      experts, and cooperate with them in the carrying on or defense of any such
      proceedings.

     

    11.2  Insurance
      Proceeds and Condemnation Awards.

     

    (a)  If
      (i)
      Restoration of the Project following a Casualty is reasonably expected to cost
      less than One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00)
      (the "Insurance
      Threshold Amount"),
      or
      (ii) the Condemnation Award is reasonably expected to be less than One Million
      Five Hundred Thousand and No/100 Dollars ($1,500,000.00) (the "Condemnation
      Threshold Amount"),
      provided no Default or Event of Default then exists, Borrower may, upon written
      notice to Administrative Agent but without the need to obtain the prior written
      consent of Administrative Agent, settle and adjust any claim with respect to
      a
      Casualty and settle or agree to any Condemnation Award, and Borrower is hereby
      authorized to collect such Insurance Proceeds or Condemnation Awards with
      respect thereto.

     

    (b)  If
      Restoration of the Project is reasonably expected to cost an amount equal to
      or
      in excess of the Insurance Threshold Amount (a "Significant
      Casualty",
      or the
      Condemnation Award is reasonably expected to be an amount equal to or in excess
      of the Condemnation Threshold Amount (a "Significant
      Condemnation Event"),
      then
      (i) Borrower shall not, without the reasonable prior written consent of
      Administrative Agent, settle or adjust any claim of Borrower or agree with
      any
      insurer(s) on the amount to be paid in connection with such Significant
      Casualty, or settle or agree to the amount of any such Condemnation Award,
      and
      (ii) all Insurance Proceeds and Condemnation Awards shall be due and payable
      solely to Administrative Agent and held in a Controlled Account in accordance
      with Section 11.3.

     

    (c)  If
      an
      Event of Default exists, with respect to any Casualty or Condemnation, (i)
      Administrative Agent, in its sole discretion, may settle and adjust any claim
      or
      award without the consent of Borrower, (ii) all Insurance Proceeds and
      Condemnation Awards shall be due and payable solely to and held by
      Administrative Agent in a Controlled Account and applied in accordance with
      Section 11.3,
      and
      (iii) without Administrative Agent's prior consent, other than as required
      by
      any applicable insurance policy or Applicable Law Borrower shall not take any
      action or fail to take any action which would cause the amount of the Insurance
      Proceeds or Condemnation Awards to be affected or determined. Administrative
      Agent shall be under no obligation to question the amount of any Insurance
      Proceeds or Condemnation Award and may accept the same in the amount in which
      the same shall be paid.

     

    (d)  If
      Borrower is a payee on any check representing Insurance Proceeds with respect
      to
      a Significant Casualty, Borrower shall immediately endorse, such check payable
      to the order of Administrative Agent. Borrower hereby irrevocably appoints
      Administrative Agent as its attorney-in-fact, coupled with an interest, to
      endorse such check payable to the order of Administrative Agent. All
      out-of-pocket expenses incurred by Administrative Agent in the settlement,
      adjustment and collection of the Insurance shall become part of the Obligations
      and shall be reimbursed by Borrower to Administrative Agent upon
      demand.

     

    (e)  Notwithstanding
      the occurrence of any Casualty or Condemnation, (i) Borrower shall continue
      to
      pay the Obligations at the time and in the manner provided for its payment
      in
      this Agreement and the Obligations shall not be reduced until any Insurance
      Proceeds or Condemnation Awards shall have been actually received and applied
      by
      Administrative Agent, after the deduction of expenses of collection, to the
      reduction or discharge of the Obligations, and (ii) subject to all other
      provisions of this Agreement, Administrative Agent shall continue to make Loan
      Advances to Borrower notwithstanding the existence of such Casualty or
      Condemnation.

     

    (f)  With
      respect to any Condemnation, (i) the Lenders shall not be limited to the
      interest paid on the Condemnation Award by the condemning authority but shall
      be
      entitled to receive out of the Condemnation Award interest at the rate or rates
      provided herein or in the Notes and this Agreement, (ii) if the Project or
      any
      portion thereof is subject to a Condemnation, provided that any Condemnation
      Awards are made available to Borrower for such purpose by Administrative Agent,
      Borrower shall promptly commence and diligently prosecute the Restoration of
      the
      Project and otherwise comply with the provisions of Section 11.3,
      (iii)
      if the Project is sold, through foreclosure or otherwise, prior to the receipt
      by Administrative Agent of the Condemnation Award, Administrative Agent and
      the
      Lenders shall have the right, whether or not a deficiency judgment on the Notes
      shall have been sought, recovered or denied, to receive the Condemnation Award,
      or a portion thereof sufficient to pay the Obligations. The failure by Borrower
      to apply Condemnation Awards in accordance with this Article
      XI
      (not
      cured within any applicable cure period) shall be an Event of
      Default.

     

    11.3  Application
      of Insurance Proceeds and Condemnation Awards.

     

    (a)  If
      either
      the Insurance Proceeds or the Condemnation Award are equal to or greater than
      the Insurance Threshold Amount or the Condemnation Threshold Amount, as
      applicable, Administrative Agent shall adjust the Project Budget to reflect
      any
      such Insurance Proceeds or Condemnation Award and shall make the Insurance
      Proceeds or Condemnation Award available to Borrower for Restoration so long
      as
      each of the following conditions are met (provided that, if at the time of
      any
      request for disbursement of Insurance Proceeds or Condemnation Awards Borrower
      shall fail to satisfy such conditions, Borrower shall be entitled, except as
      to
      Section 11.3(a)(i),
      to cure
      such failure within ten (10) days after Administrative Agent's refusal to make
      such disbursement and resubmit such request for disbursement):

     

    (i)  no
      Event
      of Default has occurred and then exists (including at any time required for
      any
      disbursements of such Insurance Proceeds or Condemnation Awards);

     

    (ii)  such
      Insurance Proceeds or Condemnation Awards, together with such additional funds
      deposited by Borrower with Administrative Agent and/or allocated by Borrower
      from the Contingency Fund are sufficient to pay for all of the costs and
      expenses associated with the repair or restoration of the Improvements in the
      manner required by Sections 11.1(a)
      or
11.2(f),
      as
      applicable;

     

    (iii)  if
      (1)
      such Casualty or Condemnation occurs prior to the initial Completion of the
      Improvements, the Improvements can be repaired, restored and completed prior
      to
      the Completion Date, or such later date as shall be approved by the Required
      Lenders and (2) such Casualty or Condemnation occurs after the initial
      Completion of the Improvements, the Improvements can be repaired or restored
      to
      substantially the condition in which they existed prior to such Casualty or
      Condemnation prior to the Extended Maturity Date;

     

    (iv)  Administrative
      Agent (in the exercise of its reasonable discretion) and all applicable
      Governmental Authorities have approved the final plans and specifications for
      reconstruction or restoration of the damaged portion of the
      Improvements;

     

    (v)  Administrative
      Agent has approved (in the exercise of its reasonable discretion) all budgets,
      schedules, and architecture and construction contracts in connection with such
      repair or restoration;

     

    (vi)  with
      respect to a Casualty, Administrative Agent has determined (in the exercise
      of
      its reasonable discretion) that during the reconstruction or restoration work
      and after the reconstruction or restoration work is completed, the Loans will
      be
      In Balance;

     

    (vii)  with
      respect to a partial Condemnation, Administrative Agent has determined (in
      the
      exercise of its reasonable discretion) that the remaining Improvements are
      sufficient to cause the Loans to be In Balance;

     

    (viii)  Borrower
      shall commence (which shall include commencing "soft" costs activities, i.e.,
      obtaining development approval from the applicable Governmental Authorities,
      soliciting bid proposals, restoration planning, etc.) the Restoration as soon
      as
      reasonably practicable (but in no event later than ninety (90) days after such
      Casualty or Condemnation, as the case may be, occurs) and shall in any event
      have undertaken reasonable actions within ninety (90) days to obtain all
      necessary permits and shall within such ninety (90) days, have entered into
      a
      construction contract reasonably acceptable to Administrative Agent, and shall
      diligently pursue the same to Completion to the reasonable satisfaction of
      Administrative Agent;

     

    (ix)  Administrative
      Agent shall have received a guaranty of Completion with respect to all
      Restoration in substantially the same form as the Completion Guaranty and
      otherwise reasonably satisfactory to Administrative Agent from
      Guarantor;

     

    (x)  the
      Project and the use thereof after the Restoration will be in substantial
      compliance with and permitted under all Applicable Laws;

     

    (xi)  such
      Casualty or Condemnation, as the case may be, does not result in the permanent
      loss of access to the Project or the Improvements;

     

    (b)  Pending
      disbursement to Borrower, the Insurance Proceeds or Condemnation Awards shall
      be
      held by Administrative Agent in a Controlled Account. If the entire amount
      of
      Insurance Proceeds or a Condemnation Award are not required (i) to be made
      available for the Restoration or (ii) the conditions for Insurance Proceeds
      or
      Condemnation Awards to be made available to Borrower set forth in Section
11.3(a)
      above
      are not satisfied and Borrower's right to cure such matters has expired, the
      Insurance Proceeds or Condemnation Award may (1) be retained and applied by
      Administrative Agent toward the payment of the Obligations not later than the
      end of the next Interest Period that is at least five (5) days after Borrower
      shall have failed to satisfy the funding conditions (subject to Borrower's
      cure
      rights), whether or not then due and payable, in such order, priority and
      proportions as Administrative Agent in its sole discretion shall deem proper,
      or
      (2) at the sole discretion of Administrative Agent, the same may be paid, either
      in whole or in part, to Borrower for such purposes and upon such conditions
      as
      Administrative Agent shall designate.

     

    ARTICLE
      XII  

     

    

     

    EVENTS
      OF DEFAULT

     

    12.1  Events
      of Default

    .
      Any one
      or more of the following events shall constitute an "Event of
      Default":

     

    (a)  Monetary
      Defaults.
      Borrower shall: (i) fail to pay any principal of or interest on) any Loan when
      due (including, without limitation, on the Maturity Date or any other date
      on
      which the same is due); or (ii) fail to pay any other monetary sum (other than
      an amount referred to in clause (i) above) payable by it under this
      Agreement or under any other Loan Document, when and as the same shall become
      due and payable, and, in the case of this clause (ii) such default shall
      continue for a period of five (5) days after Administrative Agent shall have
      delivered notice of such default to Borrower (provided such 5-day grace period
      shall not apply to any sums due on the Maturity Date); or

     

    (b)  Negative
      Covenants.
      Borrower shall default in the performance of any of its obligations under any
      of
      Sections 9.14(b),
      9.21,
      9.22,
      10.1(a),
      10.2,
      10.3,
      10.7,
      or
10.15.

     

    (c)  Representations
      and Warranties.
      Any
      representation, warranty or certification made or deemed made herein or in
      any
      other Loan Document (or in any Modification hereto or thereto) by Borrower
      or
      any request, notice or certificate furnished by or on behalf of any Borrower
      Party pursuant to the provisions hereof or thereof, shall prove to have been
      false or misleading as of the time made or furnished in any material respect
      and
      if the same is capable of being cured, is not cured within ten (10) days after
      written notice from the Administrative Agent unless another cure period is
      specified; or

     

    (d)  Borrower
      Insolvency.
      (i)
      Borrower shall admit in writing its inability to, or be generally unable to,
      pay
      its debts as such debts become due; or (ii) an involuntary proceeding shall
      be
      commenced or an involuntary petition shall be filed, seeking (1) liquidation,
      reorganization or other relief in respect of any Borrower or its debts, or
      of a
      substantial part of its assets, under any Federal, state or foreign bankruptcy,
      insolvency, receivership or similar law now or hereafter in effect or (2) the
      appointment of a receiver, trustee, custodian, sequestrator, conservator or
      similar official for any of Borrower Parties or for a substantial part of its
      assets, and, in any such case, such proceeding or petition shall continue
      undismissed for a period of sixty (60) days or an order or decree approving
      or
      ordering any of the foregoing shall be entered; or (iii) Borrower shall (1)
      voluntarily commence any proceeding or file any petition seeking liquidation,
      reorganization or other relief under any Federal, state or foreign bankruptcy,
      insolvency, receivership or similar law now or hereafter in effect, (2) consent
      to the institution of, or fail to contest in a timely and appropriate manner,
      any proceeding or petition described in clause (ii) above, (3) apply for or
      consent to the appointment of a receiver, trustee, custodian, sequestrator,
      conservator or similar official for Borrower or for a substantial part of any
      of
      its assets, (4) file an answer admitting the material allegations .of a petition
      filed against it in any such proceeding, (5) make a general assignment for
      the
      benefit of creditors or (6) take any action for the purpose of effecting any
      of
      the foregoing; or

     

    (e)  Default
      on other Indebtedness.
      Borrower defaults (after the passage of any grace or cure periods) on any other
      Indebtedness where any Lender is acting as lender; or

     

    (f)  Dissolution.
      Borrower or Guarantor shall be terminated, dissolved or liquidated (as a matter
      of law or otherwise) or proceedings shall be commenced by any Person (including
      any Borrower Party) seeking the termination, dissolution or liquidation of
      Borrower or Guarantor; or

     

    (g)  Judgments
      Against Borrower.
      One or
      more (i) final, non-appealable judgments (or, regardless as to whether the
      same
      is final and non-appealable, a judgment shall be recorded as a lien against
      the
      Project) for the payment of money (exclusive of judgment amounts covered by
      insurance where the insurer has admitted liability in respect of such judgment)
      aggregating in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00)
      shall be rendered against Borrower, unless the same is paid, bonded over to
      the
      reasonable satisfaction of Administrative Agent, or additional cash collateral
      in an amount satisfactory to Administrative Agent is deposited into a Controlled
      Account, in each case within thirty (30) consecutive days of such judgment;
      or
      (ii) final, non-appealable non-monetary judgments, orders or decrees shall
      be
      entered against Borrower which does or would reasonably be expected to have
      a
      Material Adverse Effect, and, in either case, the same shall remain undischarged
      for a period of thirty (30) consecutive days during which execution shall not
      be
      effectively stayed, or any action shall be legally taken by a judgment creditor
      to attach or levy upon any assets of Borrower to enforce any such judgment;
      or

     

    (h)  Judgments
      Against Guarantor.
      One or
      more (i) final, non-appealable judgments for the payment of money (exclusive
      of
      judgment amounts covered by insurance where the insurer has admitted liability
      in respect of such judgment) aggregating in excess of One Million Five Hundred
      Thousand and No/100 Dollars ($1,500,000.00) shall be rendered against Guarantor,
      unless the same is paid, bonded over to the reasonable satisfaction of
      Administrative Agent, or additional cash collateral in an amount satisfactory
      to
      Administrative Agent is deposited into a Controlled Account, in each case within
      thirty (30) consecutive days of such judgment; or (ii) final, non-appealable
      non-monetary judgments, orders or decrees shall be entered against Guarantor
      which does or would reasonably be expected to have a Material Adverse Effect,
      and, in either case, the same shall remain undischarged for a period of thirty
      (30) consecutive days during which execution shall not be effectively stayed,
      or
      any action shall be legally taken by a judgment creditor to attach or levy
      upon
      any assets of such Guarantor to enforce any such judgment; or

     

    (i)  ERISA.
      An
      ERISA Event shall have occurred that, in the opinion of Administrative Agent,
      when taken together with all other ERISA Events that have occurred, could
      reasonably be expected to result in a Material Adverse Effect; or

     

    (j)  Loan
      Document Liens.
      The
      Liens created by the Security Documents shall at any time not constitute a
      valid
      and perfected first priority Lien (subject to the Permitted Liens) on the
      collateral intended to be covered thereby in favor of Administrative Agent,
      free
      and clear of all other Liens (other than the Permitted Liens), or, except for
      expiration in accordance with its terms, any of the Security Documents shall
      for
      whatever reason be terminated or cease to be in full force and effect, or the
      enforceability thereof shall be contested by any Borrower Party or any of their
      Affiliates and Borrower does not cause such matter to be cured within ten (10)
      Business Days following written notice from Administrative Agent;
      or

     

    (k)  Guarantor
      Default.
      Any
      Event of Default shall occur under, or Guarantor shall revoke or attempt to
      revoke, contest or commence any action against or seeking to nullify or void
      its
      obligations under, any of the Guarantor Documents; or

     

    (l)  Material
      Adverse Effect.
      An
      event shall occur that results in a Material Adverse Effect and such Material
      Adverse Effect shall be continuing; or 

     

    (m)  Access
      to Project.
      If (i)
      Administrative Agent or any of the Lenders, or its representatives or the
      Construction Consultant is not permitted, at all reasonable times, following
      prior notice to Borrower, to enter upon the Project, inspect the Improvements
      and the construction thereof and all materials, fixtures and articles used
      or to
      be used in connection therewith, and to examine all detailed plans, shop
      drawings and specifications which relate to the Improvements, or (ii) Borrower,
      the General Contractor or a Major Subcontractor shall fail to furnish to
      Administrative Agent, the Construction Consultant or their authorized
      representatives, within a reasonable period of time after requested, copies
      of
      such plans, drawings and specifications, or copies of any invoices,
      subcontracts, or bills of sale relating to the construction or equipping of
      the
      Improvements, and, in any of the foregoing cases such default remains uncured
      for a period of five (5) Business Days after notice thereof from Administrative
      Agent to Borrower; provided,
      however,
      that if
      such default is caused as a result of the General Contractor or a Major
      Subcontractor, such five (5) Business Day period shall be extended so long
      as
      Borrower is diligently pursuing its rights and remedies to cause compliance
      by
      the General Contractor or such Major Subcontractor; or

     

    (n)  Deficiency
      Deposits.
      Borrower shall fail to make (or cause to be made) a Deficiency Deposit within
      the time and in the manner provided in Section 7.2;
      or

     

    (o)  Material
      Agreements.
      Borrower shall default under any of the Material Agreements after the expiration
      any applicable notice or cure periods thereunder, or any Material Agreement
      other than a Qualified Purchase Contract is materially Modified or terminated
      without Administrative Agent's prior written approval if such approval is
      required pursuant to Section 10.12,
      and the
      benefits provided for in such Material Agreement are not promptly (but in no
      event later than thirty (30) days after any such termination) replaced to the
      reasonable satisfaction of Administrative Agent; or 

     

    (p)  Unsatisfactory
      Work.
      Borrower shall fail to cause any Unsatisfactory Work to be corrected to the
      reasonable satisfaction of Administrative Agent and the Construction Consultant
      within twenty (20) Business Days after notice of such disapproval; provided,
      however,
      that if
      such Unsatisfactory Work cannot reasonably be corrected within such twenty
      (20)
      day period, then so long as Borrower shall have commenced to cause the
      correction of such Unsatisfactory Work within such twenty (20) Business Day
      period and thereafter diligently and expeditiously proceeds to cause the
      correction of the same, such twenty (20) Business Day period shall be extended
      for such time as is reasonably necessary for Borrower in the exercise of due
      diligence to cause the correction of such Unsatisfactory Work, but in no event
      beyond the date which is sixty (60) days after the applicable notice of
      disapproval or such later date as may be approved in Administrative Agent's
      sole
      discretion; or 

     

    (q)  Contractor
      Bankruptcy.
      The
      bankruptcy or insolvency of the General Contractor and failure of Borrower
      to
      procure a contract with a new general contractor or guarantor (such contract,
      general contractor, guaranty and guarantor, as the case may be, to be approved
      by Administrative Agent) within sixty (60) days after the occurrence of such
      bankruptcy or insolvency (such approval not to be unreasonably withheld); or
      

     

    (r)  Completion
      Date.
      Completion of the Project is not achieved (subject to Section 14.26)
      on or
      before the Completion Date; or 

     

    (s)  Cessation
      of Construction.
      If the
      Construction Work shall, at any time, be discontinued (subject to Section
14.26)
      or
      abandoned for more than ten (10) Business Days, or a delay in the Construction
      Work shall occur so that the same cannot, in Administrative Agent's sole but
      reasonable judgment, be Completed on or before the Completion Date;
      or

     

    (t)  Change
      in Control.
      The
      occurrence of any Change of Control not permitted by this Agreement;
      or

     

    (u)  General.
      If
      Borrower or Guarantor shall default as set forth in Sections 12.1(c),
      or
12.1(l)
      or under
      any of the other non-monetary terms, covenants or conditions of this Agreement
      or any other Loan Document not set forth above in this Section 12.1
      and such
      default shall continue for thirty (30) days after notice from Administrative
      Agent to Borrower; provided,
      however
      , that
      if (i) such default is susceptible of cure but Administrative Agent reasonably
      determines that such non-monetary default cannot be reasonably cured within
      such
      thirty (30) day period and (ii) Administrative Agent determines, in its sole
      discretion, that such default does not create a material risk of sale or
      forfeiture of, or substantial impairment in value to, any material portion
      of
      the Project, then, so long as the Borrower or Guarantor, as appropriate, shall
      have commenced to cure such default within such thirty (30) day period and
      thereafter diligently and expeditiously proceeds to cure the same, such thirty
      (30) day period shall be extended for such time as is reasonably necessary
      for
      the Borrower or Guarantor, as appropriate, in the exercise of due diligence
      to
      cure such default, but in no event shall such period exceed ninety (90) days
      after the original notice from Administrative Agent or extend beyond the
      Maturity Date; or

     

    (v)  Other
      Loan Documents.
      Any
      "Event of Default" shall occur under and is defined by the provisions of any
      of
      the other Loan Documents.

     

    12.2  Remedies

    .
      Upon
      the occurrence of an Event of Default and at any time thereafter during the
      continuance of such event, Administrative Agent may (subject to, and in
      accordance with, the provisions of Section 13.3)
      and,
      upon request of the Required Lenders shall, by written notice to Borrower,
      pursue any one or more of the following remedies, concurrently or successively,
      it being the intent hereof that none of such remedies shall be to the exclusion
      of any other:

     

    (a)  In
      the
      case of an Event of Default other than one referred to in Sections 12.1(d)
      or
12.1(f)
      with
      respect to Borrower, terminate the Commitments and/or declare the Outstanding
      Principal Amount, and the accrued interest on the Loans and all other amounts
      payable by Borrower hereunder (including any amounts payable under
      Section 5.5)
      and
      under the Notes and the other Loan Documents to be forthwith due and payable
      whereupon such amounts shall be immediately due and payable without presentment,
      demand, protest or other formalities of any kind, all of which are hereby
      expressly waived by Borrower; provided,
      however,
      that in
      the case of the occurrence of an Event of Default referred to in
      Sections 12.1(d)
      or
12.1(f)
      with
      respect to a Borrower Party, the Commitments shall automatically be terminated
      and the Outstanding Principal Amount, and the accrued interest on, the Loans
      and
      all other amounts payable by Borrower hereunder (including any amounts payable
      under Section 5.5),
      under
      the Notes and the other Loan Documents shall automatically become immediately
      due and payable without presentment, demand, protest or other formalities of
      any
      kind, all of which are hereby expressly waived by Borrower;

     

    (b)  In
      the
      case of any Event of Default resulting from Borrower's failure, refusal or
      neglect to make any payment or perform any act required by the Loan Documents,
      then, while any Event of Default exists and without notice to or demand upon
      Borrower and without waiving or releasing any other right, remedy or recourse
      Administrative Agent and the Lenders may have because of such Event of Default,
      Administrative Agent may (but shall not be obligated to) make such payment
      or
      perform such act for the account of and at the expense of Borrower, and shall
      have the right to enter upon the Project for such purpose and to take all such
      action thereon and with respect to the Project as it may deem necessary or
      appropriate. If Administrative Agent shall elect to pay any sum due with respect
      to the Project, Administrative Agent may do so in reliance on any bill,
      statement or assessment procured from the appropriate Governmental Authority
      or
      other issuer thereof without inquiring into the accuracy or validity thereof.
      Similarly, in making any payments to protect the security intended to be created
      by the Loan Documents, Administrative Agent shall not be bound to inquire into
      the validity of any apparent or threatened adverse title, Lien, encumbrance,
      claim or charge before making an advance for the purpose of preventing or
      removing the same. Additionally, after the occurrence of an Event of Default,
      if
      any Hazardous Substance affects or threatens to affect the Project,
      Administrative Agent may (but shall not be obligated to) give such notices
      and
      take such actions as it deems necessary or advisable in order to abate the
      discharge of or remove any Hazardous Substance;

     

    (c)  Take
      possession of the Project and cause Completion of the Improvements and do
      anything in its sole judgment to fulfill the obligations of Borrower hereunder,
      including either the right to avail itself of and procure performance of
      existing contracts or let any contracts with the same contractors or others
      and
      to employ watchmen to protect the Project from injury. Without restricting
      the
      generality of the foregoing and for the purposes aforesaid, Borrower hereby
      appoints and constitutes Administrative Agent its lawful attorney-in-fact with
      full power of substitution in the Project to cause Completion of the
      Improvements in the name of Borrower; to use unadvanced funds remaining under
      the Commitments or which may be reserved, or escrowed or set aside for any
      purposes hereunder at any time, or to advance funds in excess of the face amount
      of the Notes (and all such amounts shall be payable by Borrower together with
      interest at the Default Rate), to cause Completion the Improvements; to make
      changes in the Plans and Specifications which shall be necessary or desirable
      for Completion of the Improvements in substantially the manner contemplated
      by
      the Plans and Specifications; to retain or employ new general contractors,
      subcontractors, architects, engineers and inspectors as shall be required for
      said purposes; to pay, settle, or compromise all existing bills and claims,
      which may be liens or security interests, or to avoid such bills and claims
      becoming liens against the Project or security interest against fixtures or
      equipment, or as may be necessary or desirable for the Completion of the
      Improvements or for the clearance of title; to execute all applications and
      certificates in the name of Borrower which may be required by any of the
      contract documents; to do any and every act which Borrower might do in its
      own
      behalf; and to prosecute and defend all actions or proceedings in connection
      with the Project or fixtures or equipment; to take action and require such
      performance as it deems necessary under any bonds furnished in connection with
      the construction of the Improvements and to make settlements and compromises
      with surety or sureties thereunder, and in connection therewith, to execute
      instruments of release and satisfaction; it being understood and agreed that
      this power of attorney shall be a power coupled with an interest and cannot
      be
      revoked;

     

    (d)  Exercise
      the Lenders' rights under the Completion Guaranty and Development Agreement
      Guaranty to require any Guarantor to perform thereunder, in which case Borrower
      hereby (i) authorizes Administrative Agent and the Lenders to make advances
      of
      the Loans directly to such Guarantor in accordance with the terms of the
      Completion Guaranty and Development Agreement Guaranty and this Agreement and
      (ii) agrees that Borrower shall be liable to the Lenders for all such advances
      to such Guarantor and such advances shall be deemed Loans under this Agreement
      and be evidenced by the Notes and secured by the Security Instrument and the
      other Security Documents; and

     

    (e)  Exercise
      or pursue any other remedy or cause of action permitted under this Agreement,
      any or all of the Security Documents, or any other Loan Document, or conferred
      upon Administrative Agent and the Lenders by operation of law.

     

    WHETHER
      OR NOT ADMINISTRATIVE AGENT OR THE LENDERS ELECT TO EMPLOY ANY OR ALL OF THE
      REMEDIES AVAILABLE UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, NEITHER
      ADMINISTRATIVE AGENT NOR ANY OF THE LENDERS SHALL BE LIABLE FOR THE CONSTRUCTION
      OF OR FAILURE TO CONSTRUCT, COMPLETE OR PROTECT THE IMPROVEMENTS OR FOR PAYMENT
      OF ANY EXPENSES INCURRED IN CONNECTION WITH THE EXERCISE OF ANY REMEDY AVAILABLE
      TO ADMINISTRATIVE AGENT OR THE LENDERS OR FOR THE PERFORMANCE OR NON-PERFORMANCE
      OF ANY OTHER OBLIGATION OF BORROWER.

     

    ARTICLE
      XIII  

     

    

     

    ADMINISTRATIVE
      AGENT

     

    13.1  Appointment,
      Powers and Immunities

    .
      Each
      Lender hereby irrevocably appoints and authorizes Administrative Agent to act
      as
      its agent hereunder and under the other Loan Documents with such powers as
      are
      specifically delegated to Administrative Agent by the terms of this Agreement
      and of the other Loan Documents, together with such other powers as are
      reasonably incidental thereto. Administrative Agent shall be a party to each
      of
      the Loan Documents (other than the Notes) as secured party, beneficiary,
      indemnitee, and such other applicable capacities, on behalf of and for the
      benefit of Lenders (and each Lender hereby ratifies and reaffirms the Loan
      Documents so executed and agrees to be bound by the terms thereof) and hold
      all
      Collateral covered thereby for the benefit of the Lenders, and receive all
      payments or proceeds received in connection therewith for the undivided benefit
      and protection of the Lenders in accordance with the terms and conditions of
      this Agreement. As soon as practicable after each such receipt of proceeds
      by
      Administrative Agent, Administrative Agent shall determine the respective
      amounts to be distributed and promptly thereafter shall credit to itself the
      amount to which it is entitled (as Administrative Agent, Lender or otherwise)
      and wire the amounts to which the other Lenders are entitled in accordance
      with
      such written instruction as each Lender from time to time may deliver to
      Administrative Agent. Each Lender shall hold its own Note and shall receive
      a
      copy of each Loan Document. Administrative Agent (which term as used in this
      Section 13.1
      shall
      include reference to its Affiliates and its own and its Affiliates' officers,
      directors, employees and agents) shall not:

     

    (a)  have
      any
      duties or responsibilities except those expressly set forth in this Agreement
      and in the other Loan Documents, and shall not by reason of this Agreement
      or
      any other Loan Document be a fiduciary or trustee for any Lender except to
      the
      extent that Administrative Agent acts as an agent with respect to the receipt
      or
      payment of funds, nor shall Administrative Agent have any fiduciary duty to
      the
      Borrower nor shall any Lender have any fiduciary duty to the Borrower or any
      other Lender;

     

    (b)  be
      responsible to the Lenders for any recitals, statements, representations or
      warranties contained in this Agreement or in any other Loan Document, or in
      any
      certificate or other document referred to or provided for in, or received by
      any
      of them under, this Agreement or any other Loan Document, or for the value,
      validity, effectiveness, genuineness, enforceability or sufficiency of this
      Agreement, any Note or any other Loan Document or any other document referred
      to
      or provided for herein or therein or for any failure by the Borrower or any
      other Person to perform any of its Obligations hereunder or
      thereunder;

     

    (c)  be
      responsible for any action taken or omitted to be taken by it hereunder or
      under
      any other Loan Document or under any other document or instrument referred
      to or
      provided for herein or therein or in connection herewith or therewith, except
      for its own gross negligence or willful misconduct;

     

    (d)  except
      to
      the extent expressly instructed in writing by the Required Lenders with respect
      to collateral security under the Loan Documents, be required to initiate or
      conduct any litigation or collection proceedings hereunder or under any other
      Loan Document; and

     

    (e)  be
      required to take any action which is contrary to this Agreement or any other
      Loan Document or Governmental Requirement.

     

    The
      relationship between and among Administrative Agent and each Lender is a
      contractual relationship only, and nothing herein shall be deemed to impose
      on
      Administrative Agent any obligations other than those for which express
      provision is made herein or in the other Loan Documents. Administrative Agent
      may employ agents and attorneys-in-fact and shall not be responsible for the
      negligence or misconduct of any such agents or attorneys-in-fact selected by
      it
      in good faith. Administrative Agent may deem and treat the payee of a Note
      as
      the holder thereof for all purposes hereof unless and until a notice of the
      assignment or transfer thereof shall have been filed with Administrative Agent
      pursuant to Section 14.7.
      Except
      to the extent expressly provided in Sections 13.8,
      13.10,
      and
13.11(g),
      the
      provisions of this Article XIII
      are
      solely for the benefit of Administrative Agent and the Lenders, and the Borrower
      shall not have any rights as a third-party beneficiary of any of the provisions
      hereof and the Administrative Agent and Lenders may, pursuant to a written
      agreement executed by all such Persons, Modify or waive such provisions of
      this
Article XIII
      in their
      sole and absolute discretion.

     

    13.2  Reliance
      by Administrative Agent

    .
      Administrative Agent shall be entitled to rely upon any certification, notice,
      document or other communication (including any thereof by telephone, telecopy,
      telegram or cable) reasonably believed by it to be genuine and correct and
      to
      have been signed or sent by or on behalf of the proper Person or Persons, and
      upon advice and statements of legal counsel, independent accountants and other
      experts selected by Administrative Agent. As to any matters not expressly
      provided for by this Agreement or any other Loan Document, Administrative Agent
      shall in all cases be fully protected in acting, or in refraining from acting,
      hereunder or thereunder in accordance with instructions given by the Required
      Lenders, and such instructions of the Required Lenders and any action taken
      or
      failure to act pursuant thereto shall be binding on all of the
      Lenders.

     

    13.3  Borrower
      Defaults.

     

    (a)  Administrative
      Agent shall give the Lenders notice of any material Default of which
      Administrative Agent has knowledge or notice. Except with respect to (i) the
      nonpayment of principal, interest or any fees that are due and payable under
      any
      of the Loan Documents, (ii) Defaults with respect to which Administrative Agent
      has actually sent written notice of to the Borrower and (iii) Defaults with
      respect to which Administrative Agent has entered into discussions with the
      Borrower, Administrative Agent shall be deemed to not have knowledge or notice
      of the occurrence of a Default unless Administrative Agent has received notice
      from a Lender or the Borrower specifying such Default and stating that such
      notice is a "Notice of Default." If Administrative Agent has such knowledge
      or
      receives such a notice from the Borrower or a Lender in accordance with the
      immediately preceding sentence with respect to the occurrence of a material
      Default, Administrative Agent shall give prompt notice thereof to the Lenders.
      Within ten (10) days of delivery of such notice of Default from Administrative
      Agent to the Lenders (or such shorter period of time as Administrative Agent
      determines is necessary), Administrative Agent and the Lenders shall consult
      with each other to determine a proposed course of action. Administrative Agent
      shall (subject to Section 13.7)
      take
      such action with respect to such Default as shall be directed by the Required
      Lenders; provided that (i) unless and until Administrative Agent shall have
      received such directions, Administrative Agent may (but shall not be obligated
      to) take such action, or refrain from taking such action (including decisions
      (1) to make Protective Advances that Administrative Agent determines are
      necessary to protect or maintain the Project and (2) to foreclose on the Project
      or exercise any other remedy), with respect to such Default as it shall deem
      advisable in the interest of the Lenders except to the extent that this
      Agreement expressly requires that such action be taken, or not be taken, only
      with the consent or upon the authorization of all of the Lenders and (ii) no
      actions approved by the Required Lenders shall violate the Loan Documents or
      Governmental Requirement.

     

    (b)  Each
      of
      the Lenders acknowledges and agrees that no individual Lender may separately
      enforce or exercise any of the provisions of any of the Loan Documents
      (including, without limitation, the Notes) other than through Administrative
      Agent. Administrative Agent shall advise the Lenders of all material actions
      which Administrative Agent takes in accordance with the provisions of this
      Section 13.3.
      Notwithstanding the foregoing, if the Required Lenders shall at any time direct
      that a different or additional remedial action be taken from that already
      undertaken by Administrative Agent, including the commencement of foreclosure
      proceedings, such different or additional remedial action shall be taken in
      lieu
      of or in addition to, the prosecution of such action taken by Administrative
      Agent; provided that all actions already taken by Administrative Agent pursuant
      to Section 13.3(a)
      shall be
      valid and binding on each Lender.

     

    (c)  All
      money
      (other than money subject to the provisions of Section 13.3(g))
      received from any enforcement actions, including the proceeds of a foreclosure
      sale of the Project, shall be applied: First, to the payment or reimbursement
      of
      Administrative Agent for expenses incurred in accordance with the provisions
      of
      Sections 13.3(d),
      13.3(e),
      and
13.3(f)
      and
13.5
      and to
      the payment of any fees and charges then due agent to the extent not paid by
      the
      Borrower; Second, to the Lenders for expenses incurred in accordance with the
      provisions of Section 13.3(d),
      13.3(e),
      and
13.3(f)
      and
13.5;
      Third,
      to the payment or reimbursement of the Lenders for any advances made pursuant
      to
      Section 13.3(d);
      and
      Fourth, pari passu to the Lenders in accordance with their respective
      Proportionate Shares, unless an Unpaid Amount is owed pursuant to
      Section 13.11,
      in
      which event such Unpaid Amount shall be deducted from the portion of such
      proceeds of the Defaulting Lender and be applied to payment of such Unpaid
      Amount to the Special Advance Lender.

     

    (d)  All
      losses with respect to interest (including interest at the Default Rate) and
      other sums payable pursuant to the Notes or incurred in connection with the
      Loans, the enforcement thereof or the realization of the security therefor,
      shall be borne by the Lenders in accordance with their respective Proportionate
      Shares. The Lenders shall promptly, upon request, remit to Administrative Agent
      their respective Proportionate Shares of (i) any expenses incurred by
      Administrative Agent in connection with any Default to the extent any expenses
      have not been paid by the Borrower, (ii) any advances made to pay taxes or
      insurance or otherwise to preserve the lien of the Loan Documents or to preserve
      and protect the Project or made to effect the Completion of the Improvements
      to
      be constructed pursuant to this Agreement whether or not the amount necessary
      to
      be advanced for such purposes exceeds the amount of the respective Commitments
      of the Lenders, (iii) any other expenses incurred in connection with the
      enforcement of the Security Instrument or other Loan Documents, and (iv) any
      expenses incurred in connection with the consummation of the Loans not paid
      or
      provided for by the Borrower. To the extent any such advances are recovered
      in
      connection with the enforcement of the Security Instrument or the other Loan
      Documents, each Lender shall be paid its Proportionate Share of such recovery
      after deduction of the expenses of Administrative Agent.

     

    (e)  If
      any
      action is brought to collect on the Notes, foreclose under the Security
      Instrument, or enforce any of the Loan Documents, such action shall (to the
      extent permitted under applicable law and the decisions of the court in which
      such action is brought) be an action brought by Administrative Agent and the
      Lenders, collectively, to collect on all or a portion of the Notes or enforce
      the Loan Documents, and counsel selected by Administrative Agent shall prosecute
      any such action on behalf of Administrative Agent and the Lenders, and
      Administrative Agent and the Lenders shall consult and cooperate with each
      other
      in the prosecution thereof. The costs and expenses of foreclosure, to the extent
      not paid by Borrower within ten (10) days after Administrative Agent's demand
      therefor, will be borne by the Lenders in accordance with their respective
      Proportionate Shares. 

     

    (f)  If
      title
      is acquired to the Project after a foreclosure sale, nonjudicial foreclosure
      or
      by a deed in lieu of foreclosure, title shall be held by Administrative Agent
      in
      its own name in trust for the Lenders or, at Administrative Agent's election,
      in
      the name of a wholly owned subsidiary of Administrative Agent on behalf of
      the
      Lenders. 

     

    (g)  If
      Administrative Agent (or its subsidiary) acquires title to the Project or is
      entitled to possession of the Project during or after the foreclosure, all
      material decisions with respect to the possession, ownership, development,
      construction, control, operation, leasing, management and sale of the Project
      shall be made by Administrative Agent. All income or other money received after
      so acquiring title to or taking possession of the Project with respect to the
      Project, including income from the operation and management of the Project
      and
      the proceeds of a sale of the Project, shall be applied: First, to the payment
      or reimbursement of Administrative Agent for expenses incurred in accordance
      with the provisions of this Article
      XIII
      and to
      the payment of any fees and charges then due agent to the extent not paid by
      the
      Borrower; Second, to the payment of operating expenses with respect to the
      Project; Third, to the establishment of reasonable reserves for the operation
      of
      the Project; Fourth, to the payment or reimbursement of the Lenders for any
      advances made pursuant to Section 13.3(d);
      Fifth
      to fund any capital improvement, leasing and other reserves established at
      the
      discretion of Administrative Agent; and Sixth, pari passu to the Lenders in
      accordance with their respective Proportionate Shares, unless an Unpaid Amount
      is owed pursuant to Section 13.11,
      in
      which event such Unpaid Amount shall be deducted from the portion of such
      proceeds of the Defaulting Lender and be applied to payment of such Unpaid
      Amount to the Special Advance Lender.

     

    13.4  Rights
      as a Lender

    .
      With
      respect to its Loan Commitment and the Loans made by it, Wells Fargo (and any
      successor acting as "Administrative Agent" hereunder) in its capacity as a
      Lender hereunder shall have the same rights and powers hereunder as any other
      Lender and may exercise the same as though it were not acting as Administrative
      Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
      indicates, include Administrative Agent in its individual capacity as Lender.
      Wells Fargo (and any successor acting as "Administrative Agent" hereunder)
      and
      any of its Affiliates may (without having to account therefor to any other
      Lender) accept deposits from, lend money to, make investments in and generally
      engage in any kind of banking, investment banking, trust or other business
      with
      the Borrower (and any of its Affiliates) as if it were not acting as
      Administrative Agent, and Wells Fargo (and any such successor) and any of its
      Affiliates may accept fees and other consideration from the Borrower for
      services in connection with this Agreement or otherwise without having to
      account for the same to the Lenders. 

     

    13.5  Indemnification

    .
      Each
      Lender agrees to indemnify Administrative Agent (to the extent not reimbursed
      by
      the Borrower, but without limiting the Obligations of the Borrower hereunder)
      ratably in accordance with their Proportionate Shares, for any and all
      liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
      costs, expenses or disbursements of any kind and nature whatsoever that may
      be
      imposed on, incurred by or asserted against Administrative Agent in its capacity
      as Administrative Agent (including by any Lender) arising out of or by reason
      of
      any investigation in or in any way relating to or arising out of this Agreement
      or any other Loan Document or any other documents contemplated by or referred
      to
      herein or therein (including the costs and expenses that the Borrower is
      obligated to pay hereunder) or the enforcement of any of the terms hereof or
      thereof; provided that no Lender shall be liable for any of the foregoing to
      the
      extent they arise from the gross negligence or willful misconduct of
      Administrative Agent.

     

    13.6  Non-Reliance
      on Administrative Agent and Other Lenders

    .
      Each
      Lender agrees that it has, independently and without reliance on Administrative
      Agent or any other Lender, and based on such documents and information as it
      has
      deemed appropriate, made its own credit analysis of the Borrower and the
      Guarantor and its decision to enter into this Agreement and that it will,
      independently and without reliance upon Administrative Agent or any other
      Lender, and based on such documents and information as it shall deem appropriate
      at the time, continue to make its own analysis and decisions in taking or not
      taking action under this Agreement or under any other Loan Document. Subject
      to
      the provisions of Section 13.5
      above,
      Administrative Agent shall not be required to keep itself informed as to the
      performance or observance by the Borrower or the Guarantor of this Agreement
      or
      any of the other Loan Documents or any other document referred to or provided
      for herein or therein or to inspect the properties or books of the Borrower
      or
      the Guarantor. Except for notices, reports and other documents and information
      expressly required to be furnished to the Lenders by Administrative Agent
      hereunder, Administrative Agent shall not have any duty or responsibility to
      provide any Lender with any credit or other information concerning the affairs,
      financial condition or business of the Borrower or the Guarantor (or any of
      their Affiliates) that may come into the possession of Administrative Agent
      or
      any of its Affiliates. Without limiting the foregoing, Administrative Agent
      shall not be responsible in any manner to any Lender (or any permitted successor
      or assign of any Lender), and each Lender represents and warrants that it has
      not relied upon Administrative Agent for or in respect of, (a) the
      creditworthiness of Borrower and the risks involved to such Lender, (b) the
      effectiveness, enforceability, genuineness, validity, or the due execution
      of
      any Loan Document, (c) any representation, warranty, document, certificate,
      report, or statement made therein or furnished thereunder or in connection
      therewith, (d) the existence, priority, or perfection of any Lien granted or
      purported to be granted under any Loan Document, or (e) the observation of
      or
      compliance with any of the terms, covenants, or conditions of any Loan Document
      on the part of Borrower. 

     

    13.7  Failure
      to Act

    .
      Except
      for action expressly required of Administrative Agent hereunder and under the
      other Loan Documents, Administrative Agent shall in all cases be fully justified
      in failing or refusing to act hereunder and thereunder unless it shall receive
      further assurances to its satisfaction from the Lenders of their indemnification
      obligations under Section 13.5
      against
      any and all liability and expense that may be incurred by it by reason of taking
      or continuing to take any such action. 

     

    13.8  Resignation
      and Removal of Administrative Agent.

     

    (a)  It
      is
      agreed by the Lenders that Administrative Agent shall remain Administrative
      Agent under this Agreement and the other Loan Documents throughout the term
      of
      the Loan; provided, however, Administrative Agent may resign at any time by
      giving at least thirty (30) days prior notice thereof to the Lenders and the
      Borrower. Upon any such resignation, the Required Lenders shall have the right
      to appoint a successor Administrative Agent that shall be a Person
      that:

     

    (i)  meets
      the
      qualifications of an Eligible Assignee; and

     

    (ii)  has
      substantial experience in construction loan administration, and if such
      successor Administrative Agent is not a Lender, as long as no Event of Default
      exists, the Borrower shall have the right to approve such successor
      Administrative Agent, which approval shall not be unreasonably withheld,
      conditioned or delayed.

     

    If
      no
      successor Administrative Agent shall have been so appointed by the Required
      Lenders and shall have accepted such appointment within thirty (30) days after
      the retiring Administrative Agent's giving of notice of resignation of the
      retiring Administrative Agent, then the retiring Administrative Agent may,
      on
      behalf of the Lenders, appoint a successor Administrative Agent, that shall
      be a
      Person that meets the requirements of clauses (i) and (ii) above, and if such
      successor Administrative Agent is not a Lender, the Borrower, as long as no
      Event of Default exists, shall have the right to approve such successor
      Administrative Agent, which approval shall not be unreasonably withheld,
      conditioned or delayed. Upon the acceptance of any appointment as Administrative
      Agent hereunder by a successor Administrative Agent, such successor
      Administrative Agent shall thereupon succeed to and become vested with all
      the
      rights, powers, privileges and duties of the retiring Administrative Agent,
      and
      the retiring Administrative Agent shall be discharged from its duties and
      obligations hereunder; provided,
      however,
      that
      the retiring Administrative Agent shall not be discharged from any liabilities
      which existed prior to the effective date of such resignation. After any
      retiring Administrative Agent's resignation hereunder as Administrative Agent,
      the provisions of this Article
      XIII
      shall
      continue in effect for its benefit in respect of any actions taken or omitted
      to
      be taken by it while it was acting as Administrative Agent.

     

    (b)  Administrative
      Agent may be removed by the Required Lenders if:

     

    (i)  Administrative
      Agent shall have failed to pay to Lenders any amount due to any Lender pursuant
      to this Agreement (and not reasonably disputed by Administrative Agent) within
      seven (7) Business Days of the date Administrative Agent is notified of a
      default in a payment due from Administrative Agent to such Lenders;

     

    (ii)  Administrative
      Agent shall have failed to perform any of its obligations under this Agreement
      in any material respect and such failure shall not have been cured within thirty
      (30) calendar days after written notice from Lenders to Administrative Agent
      of
      such failure, or if such failure cannot reasonably be cured within such thirty
      (30) day period, within such longer period of time as may be necessary to
      complete such cure so long as Administrative Agent commences such cure within
      such thirty (30) day period and thereafter diligently pursues such cure to
      completion; or

     

    (iii)  Administrative
      Agent is a Defaulting Lender.

     

    13.9  Consents
      and Certain Actions under, and Modifications of, Loan Documents.

     

    (a)  Administrative
      Agent may, except as provided below in Section 13.9(b)
      below,
      (i) grant or refuse to grant any consent or approval required or requested
      of it
      hereunder or under any of the other Loan Documents in its sole and absolute
      discretion (except where another standard of discretion is expressly required
      of
      Administrative Agent pursuant to the applicable Loan Document), and (ii) consent
      or refuse to consent to any Modification, supplement or waiver under any of
      the
      Loan Documents. Without limiting the foregoing, such authority shall include
      the
      power to grant approvals consents and make all decisions with respect to all
      Ministerial Matters. Notwithstanding anything to the contrary contained herein,
      the Administrative Agent, shall be authorized on behalf of all the Lenders,
      without the necessity of any notice to, or further consent from, any Lender,
      to
      waive the imposition of the Late Charge provided in Section 3.3,
      up to a
      maximum of 3 times per calendar year.

     

    (b)  Notwithstanding
      any other provision of this Agreement or the other Loan Documents to the
      contrary, Administrative Agent shall not, without the approval of the Required
      Lenders or all of the Lenders, as specified below, have the right or power
      (and
      Borrower acknowledges and agrees that Administrative Agent shall not have the
      right or power) to grant any consent or approval required or requested of it
      hereunder or under any of the other Loan Documents, consent to any Modification,
      supplement or waiver under any of the Loan Documents, or take any action, if
      the
      effect of such consent, approval, Modification, supplement, waiver or action
      would result in:

     

    (i)  Without
      the consent of all Lenders:

     

    (1)  a
      waiver
      of any provision regarding the scheduled payment of principal of or interest
      on
      the Loan;

     

    (2)  the
      postponement the Maturity Date;

     

    (3)  the
      reduction or forgiveness of the principal amount of the Loan;

     

    (4)  a
      decrease in the Applicable Interest Rate under the Loan or the waiver of any
      interest (including interest at the Default Rate) thereon, except to the extent
      permitted in the Loan Documents;

     

    (5)  a
      release
      of Borrower from its Obligations under the Loan Documents, or a release of
      any
      of the Guarantors under the Guaranties from their obligations with respect
      to
      the Loan (except upon payment in full of the Loan and all other sums due under
      the Loan Documents);

     

    (6)  a
      release
      of any material portion of the Collateral from the lien of the applicable Loan
      Documents, except to the extent permitted in the Loan Documents;

     

    (7)  a
      waiver
      of interest at the Default Rate, or any Extension Fee;

     

    (8)  a
      consent
      to any waiver of the prohibitions on Transfer or encumbrances, other than an
      Anticipated Encumbrance, of the Project or Equity Interests in
      Borrower;

     

    (9)  a
      Modification of the definition of "Required Lenders" or the provisions of
Article XIII,
      or
      alters the several nature of the Lenders' obligations under the Loan
      Documents;

     

    (ii)  Without
      the consent of the Required Lenders:

     

    (1)  a
      decision to foreclose on, or exercise remedies in order to realize upon, any
      Collateral after a Default or an Event of Default, as the case may be or bring
      any action to enforce any of the Guaranties or other Loan Documents
      (provided,
      however,
      all
      decisions concerning the conduct of any receivership, the manner (i.e.,
      judicial, non-judicial, acceptance of deed-in-lieu of foreclosure) and conduct
      of any foreclosure action or trustee's sale, the collection of any judgment,
      the
      settlement of such action, any bid on behalf of Administrative Agent and the
      Lenders at a foreclosure sale, the manner of taking and holding title to the
      Project, and the commencement and conduct of any deficiency judgment proceeding
      shall be made by Administrative Agent);

     

    (2)  a
      decision made with respect to the sale or disposition of the Project or any
      Collateral after Administrative Agent has obtained possession
      thereof;

     

    (3)  a
      decision on the use of application of proceeds from any insurance maintain
      by
      Borrower or any awards from a taking or condemnation of the
      Project;

     

    (4)  a
      Protective Advance that exceeds Two Hundred Fifty Thousand and No/100 Dollars
      ($250,000.00) or Protective Advances that exceed, in the aggregate, Five Hundred
      Thousand and No/100 Dollars ($500,000.00) in any calendar year; and

     

    (5)  a
      single
      Change Order in excess of One Million and No/100 Dollars ($1,000,000.00) and
      all
      Change Orders at such time as the aggregate amount of Change Orders exceeds
      Five
      Million and No/100 Dollars ($5,000,000.00).

     

    (6)  a
      waiver
      of the conditions precedent to the making of Loans set forth in Section
6.2.

     

    (iii)  Without
      the consent of the affected Lender, change such Lender's Proportionate Share
      (provided,
      however,
      that
      this clause shall not apply to reductions in or a deemed reduction in any
      Lender's Proportionate Share pursuant to Section 13.11
      hereof,
      nor shall it be construed to prevent a Lender from assigning its interest in
      the
      Loan pursuant to Section 14.7).

     

    (c)  If
      Administrative Agent solicits any consents or approvals from the Lenders under
      any of the Loan Documents, each Lender shall within ten (10) Business Days
      of
      receiving such request, give Administrative Agent written notice of its consent
      or approval or denial thereof (or such shorter time as may be required under
      the
      applicable Loan Document for Administrative Agent to respond, in which case
      Lenders shall have the same time period minus one (1) Business Day); provided
      that if any Lender does not respond within such ten (10) Business Days, such
      Lender shall be deemed to have authorized Administrative Agent to vote such
      Lender's interest with respect to the matter which was the subject of
      Administrative Agent's solicitation as Administrative Agent elects. Any such
      solicitation by Administrative Agent for a consent or approval shall be in
      writing and shall include a description of the matter or thing as to which
      such
      consent or approval is requested and shall include Administrative Agent's
      recommended course of action or determination in respect thereof. 

     

    13.10  Authorization

    .
      Administrative Agent is hereby authorized by the Lenders to execute, deliver
      and
      perform in accordance with the terms of each of the Loan Documents to which
      Administrative Agent is or is intended to be a party and each Lender agrees
      to
      be bound by all of the agreements of Administrative Agent contained in such
      Loan
      Documents. The Borrower shall be entitled to rely on all written agreements,
      approvals and consents received from Administrative Agent as being that also
      of
      the Lenders, without obtaining separate acknowledgment or proof of authorization
      of same.

     

    13.11  Defaulting
      Lenders. 

     

    (a)  If
      any
      Lender (a "Defaulting
      Lender";
      and,
      for purposes hereof, any Lenders that is not a Defaulting Lender, a
      "Non-Defaulting
      Lender")
      shall
      for any reason fail to (i) make any respective Loan required pursuant to the
      terms of this Agreement or (ii) pay its Proportionate Share of an advance or
      disbursement to protect the Project or the lien of the Loan Documents,
      Administrative Agent and any of the Non-Defaulting Lenders may, but shall not
      be
      obligated to, make all or a portion of the Defaulting Lender's Proportionate
      Share of such advance; provided,
      however,
      that
      Administrative Agent or such Non-Defaulting Lender gives the Defaulting Lender
      and Administrative Agent three (3) Business Days prior notice of its intention
      to do so. The right to make such advances in respect of the Defaulting Lender
      shall be exercisable first by Administrative Agent, and then by the
      Non-Defaulting Lender holding the greatest Proportionate Share, and thereafter
      to each of the Non-Defaulting Lenders in descending order of their respective
      Proportionate Shares or in such other manner as the Required Lenders (excluding
      the Defaulting Lender) may agree on. Any Lender making all or any portion of
      a
      Defaulting Lender's Proportionate Share of the applicable Loan advance in
      accordance with the foregoing terms and conditions shall be referred to as
      a
      "Special
      Advance Lender."
      Subject to a Defaulting Lender's right to cure as provided in
      Section 13.11(f),
      but
      notwithstanding anything else to the contrary contained in this Agreement,
      the
      Defaulting Lender's interest in, and any amounts due to a Defaulting Lender
      under, the Loan Documents (including, without limitation, all principal,
      interest, fees and expenses) shall be subordinate in lien priority and to the

      repayment of all amounts (including, without limitation, interest) then or
      thereafter due or to become due to the other Lenders under the Loan Documents,
      and the Defaulting Lender thereafter shall have no right to participate in
      any
      discussions among and/or decisions by the Lenders hereunder and/or under the
      other Loan Documents. Further, subject to Section 13.11(f)
      below,
      any Defaulting Lender shall be bound by any amendment to, or waiver of, any
      provision of, or any action taken or omitted to be taken by Administrative
      Agent
      and/or the other Lenders under, any Loan Document which is made subsequent
      to
      the Defaulting Lender becoming a Defaulting Lender and, during such period,
      the
      Loan Commitment of and outstanding principal amount held by such Defaulting
      Lender shall be disregarded in any determination requiring the approval of
      the
      Lenders or the Required Lenders hereunder.

     

    (b)  In
      any
      case where a Non-Defaulting Lender becomes a Special Advance Lender (i) the
      Special Advance Lender shall, at the election of such Special Advance Lender,
      be
      deemed to have purchased, and the Defaulting Lender shall be deemed to have
      sold, a senior participation in the Defaulting Lender's respective Loans to
      the
      extent of the amount so advanced or disbursed (the "Advanced
      Amount")
      bearing interest at the Applicable Interest Rate (including interest at the
      Default Rate, if applicable) and (ii) the Defaulting Lender shall have no voting
      rights under this Agreement or any other Loan Documents (and its Proportionate
      Share shall be disregarded in determining whether any act or decision requiring
      the approval of the Required Lenders shall have been approved) so long as it
      is
      a Defaulting Lender. It is expressly understood and agreed that each of the
      respective obligations of the Lenders under this Agreement and the other Loan
      Documents, including to advance Loans, to share losses incurred in connection
      with the Loan, including costs and expenses of enforcement of the Loans, to
      make
      advances to preserve the lien of the Security Instrument or to preserve and
      protect the Project or to effect Completion of the Improvements to be
      constructed pursuant to the Loan Documents, shall be without regard to any
      adjustment in the Proportionate Shares occasioned by the acts of a Defaulting
      Lender. The Special Advance Lender shall be entitled to an amount (the
      "Unpaid
      Amount")
      equal
      to the applicable Advanced Amount, plus any unpaid interest due and owing with
      respect thereto, less any repayments thereof made by the Defaulting Lender
      immediately upon demand. The Defaulting Lender shall have the right to
      repurchase the senior participation in its Loans from the Special Advance Lender
      pursuant to Section 13.11(f)
      below by
      the payment of the Unpaid Amount.

     

    (c)  A
      Special
      Advance Lender shall (i) give notice to the Defaulting Lender, Administrative
      Agent and each of the other Lenders (provided that failure to deliver said
      notice to any party other than the Defaulting Lender shall not constitute a
      default under this Agreement) of the Advance Amount and the percentage of the
      Special Advance Lender's senior participation in the Defaulting Lender's Loans
      and (ii) in the event of the repayment of any of the Unpaid Amount by the
      Defaulting Lender, give notice to the Defaulting Lender, Administrative Agent
      and each of the other Lenders of the fact that the Unpaid Amount has been repaid
      (in whole or in part), the amount of such repayment and, if applicable, the
      revised percentage of the Special Advance Lender's senior participation.
      Provided that Administrative Agent has received notice of such participation,
      Administrative Agent shall have the same obligations to distribute interest,
      principal and other sums received by Administrative Agent with respect to a
      Special Advance Lender's senior participation as Administrative Agent has with
      respect to the distribution of interest, principal and other sums under this
      Agreement; and at the time of making any distributions to the Lenders, shall
      make payments to the Special Advance Lender with respect to a Special Advance
      Lender's senior participation in the Defaulting Lender's Loans out of the
      Defaulting Lender's share of any such distributions. 

     

    (d)  A
      Defaulting Lender shall immediately pay to a Special Advance Lender all sums
      of
      any kind paid to or received by the Defaulting Lender from the Borrower, whether
      pursuant to the terms of this Agreement or the other Loan Documents or in
      connection with the realization of the security therefor until the Unpaid Amount
      is fully repaid. Notwithstanding the fact that the Defaulting Lender may
      temporarily hold such sums, the Defaulting Lender shall be deemed to hold same
      as a trustee for the benefit of the Special Advance Lender, it being the express
      intention of the Lenders that the Special Advance Lender shall have an ownership
      interest in such sums to the extent of the Unpaid Amount.

     

    (e)  Nothing
      contained in Section 13.11(a),
      13.11(f)
      or
13.11(h)
      shall
      release or in any way limit a Defaulting Lender's obligations as a Lender
      hereunder and/or under any other of the Loan Documents or impair the Borrower's
      right to exercise its remedies against such Defaulting Lender which remedies
      shall include, without limitation, the recovery of any losses, costs and
      expenses incurred as a result thereof Each Defaulting Lender shall indemnify,
      defend and hold Administrative Agent and each of the other Lenders harmless
      from
      and against any and all losses, damages, liabilities or expenses (including
      reasonable attorneys' fees and expenses and interest at the Default Rate) which
      they may sustain or incur by reason of the Defaulting Lender's failure or
      refusal to abide by its obligations under this Agreement or the other Loan
      Documents, except to the extent a Defaulting Lender became a Defaulting Lender
      due to the gross negligence or willful misconduct of Administrative Agent and/or
      any Lender. Administrative Agent shall, after payment of any amounts due to
      any
      Special Advance Lender pursuant to the terms of Section 13.11(c)
      above,
      set-off against any payments due to such Defaulting Lender for the claims of
      Administrative Agent and the other Non-Defaulting Lenders pursuant to this
      indemnity.

     

    (f)  A
      Defaulting Lender may cure a default arising out its failure to fund its
      Proportionate Share of an advance or to make any respective Loan required
      pursuant to this Agreement, and subject to the following, upon such cure shall
      no longer be deemed to be a Defaulting Lender, if, within five (5) days (the
      "Default
      Cure Period")
      of
      such default, it pays the full amount of the Unpaid Amount, together with
      interest thereon in respect of each day during the period commencing on the
      date
      such Advanced Amount was so paid by the Special Advance Lender until the date
      the Special Advance Lender recovers such amount at a rate per annum equal to
      the
      Federal Funds Rate in the event such cure is made within three (3) Business
      Days
      of such default; provided,
      however,
      if such
      Defaulting Lender fails to cure such default within such three (3) Business
      Days, the Special Advance Lender shall be entitled to recover, and such
      Defaulting Lender shall pay, such amount, on demand from Administrative Agent,
      together with interest thereon in respect of each day during the period
      commencing on such third (3rd) Business Day until the date the Special Advance
      Lender recovers such amount at a rate per annum equal to the Default Rate for
      each such day. If a Defaulting Lender pays the Unpaid Amount and interest due
      thereon within the Default Cure Period (or thereafter with the consent of
      Administrative Agent), such Defaulting Lender nonetheless shall be bound by
      any
      amendment to or waiver of any provision of, or any action taken or omitted
      to be
      taken by Administrative Agent and/or the other Lenders under, any Loan Document
      which is made subsequent to the Lender's becoming a Defaulting Lender and prior
      to its curing the default as provided in this Section 13.11(f);
      provided that such amendment or waiver of action was taken in accordance with
      the provisions of this Agreement. A Defaulting Lender shall have absolutely
      no
      right to cure any default after the expiration of the Default Cure Period unless
      Administrative Agent, in its sole discretion, elects to permit such
      cure. 

     

    (g)  If
      any
      Lender becomes a Defaulting Lender and none of the other Lenders becomes a
      Special Advance Lender pursuant to Section 13.11(a),
      the
      Borrower shall have the right, provided there exists no Default or Event of
      Default that has not arisen as a result of the Defaulting Lender's failure
      to
      fund, to cause another financial institution acceptable to Administrative Agent
      to assume the Defaulting Lender's obligations with respect to the Advance Amount
      on the then-existing terms and conditions of the Loan Documents (such
      replacement institution, a "Replacement
      Lender").
      It
      shall be a condition to such assumption that the Replacement Lender concurrently
      assumes the obligations of the Defaulting Lender with respect to the unfunded
      portion of the Commitments of such Defaulting Lender. Such assumption shall
      be
      pursuant to a written instrument reasonably satisfactory to Administrative
      Agent. Upon such assumption, the Replacement Lender shall become a "Lender"
      for
      all purposes hereunder, with a Loan Commitment in an amount equal to the Advance
      Amount, and the Defaulting Lender's Loan Commitment shall automatically be
      reduced by the Advance Amount. In connection with the foregoing, the Borrower
      shall execute and deliver to the Replacement Lender and the Defaulting Lender
      Replacement Notes. Such Replacement Notes shall be in amounts equal to, in
      the
      case of the Replacement Lender's note, the Advance Amount and, in the case
      of
      the Defaulting Lender's note, its Commitment, as reduced as aforesaid. Such
      replacement notes shall constitute "Notes" and the obligations evidenced thereby
      shall be secured by the Security Instrument. In connection with the Borrower's
      execution of replacement notes as aforesaid, the Borrower shall deliver to
      Administrative Agent such evidence of the due authorization, execution and
      delivery of the replacement notes and any related documents as Administrative
      Agent may reasonably request. The execution and delivery of replacement notes
      as
      required above shall be a condition precedent to any further advances of Loan
      proceeds. Upon receipt of its replacement note, the Defaulting Lender will
      return to the Borrower its note(s) that was replaced; provided that the delivery
      of a replacement note to the Defaulting Lender pursuant to this
      Section 13.11(g)
      shall
      operate to void and replace the note(s) previously held by the Defaulting Lender
      regardless of whether or not the Defaulting Lender returns same as required
      hereby.

     

    (h)  In
      addition to the foregoing, in the event the Defaulting Lender has not cured
      such
      default within the Default Cure Period, Administrative Agent (unless the Lender
      serving in the capacity of Administrative Agent is the Defaulting Lender) and
      the Non-Defaulting Lenders, shall, in accordance with the priority established
      pursuant to Section 13.11(a)
      above,
      be entitled to purchase such Defaulting Lender's entire Loan Commitment,
      excluding accrued and unpaid interest thereon, for a purchase price equal to
      the
      outstanding principal balance of all Loans which have been funded by such
      Defaulting Lender as of the date of such purchase.

     

    (i)  The
      Borrower, Administrative Agent and Lenders shall, at the Borrower's expense
      solely with respect to Administrative Agent's reasonable costs and expenses
      in
      connection therewith, execute such modifications to the Loan Documents as shall,
      in the reasonable judgment of Administrative Agent, be necessary in order to
      effect the substitution of Lenders in accordance with the foregoing provisions
      of this Section 13.11(i).
      The
      Lenders shall reasonably cooperate with the Borrower's attempts to obtain a
      Replacement Lender, but they shall not be obligated to modify the Loan Documents
      in connection therewith, other than modifications pursuant to the immediately
      preceding paragraph.

     

    13.12  Amendments
      Concerning Agency Functions

    .
      Notwithstanding anything to the contrary contained in this Agreement,
      Administrative Agent shall not be bound by any Modification of this Agreement
      or
      any other Loan Document which affects its duties, rights, and/or functions
      hereunder or thereunder unless it shall have given its prior written consent
      thereto.

     

    13.13  Liability
      of Administrative Agent

    .
      Administrative Agent shall not have any liabilities or responsibilities to
      the
      Borrower on account of the failure of any Lender (other than Administrative
      Agent in its capacity as a Lender) to perform its obligations hereunder or
      to
      any Lender on account of the failure of the Borrower to perform its obligations
      hereunder or under any other Loan Document.

     

    13.14  Transfer
      of Agency Function

    .
      Without
      the consent of the Borrower or any Lender, Administrative Agent may at any
      time
      or from time to time transfer its functions as Administrative Agent hereunder
      to
      any of its offices wherever located in the United States; provided that
      Administrative Agent shall promptly notify the Borrower and the Lenders
      thereof.

     

    13.15  Sharing
      of Payments, Etc.

    If
      any
      Lender shall obtain from the Borrower payment of any principal of or interest
      on
      any Loan owing to it or payment of any other amount under this Agreement or
      any
      other Loan Document through the exercise of any right of set-off, banker's
      lien
      or counterclaim or similar right or otherwise (other than from Administrative
      Agent as provided herein), and, as a result of such payment, such Lender shall
      have received a greater percentage of the principal of or interest on the Loans
      or such other amounts then due hereunder or thereunder by the Borrower to such
      Lender than the percentage received by any other Lender, it shall promptly
      purchase from such other Lenders participations in (or, if and to the extent
      specified by such Lender, direct interests in) the Loans or such other amounts,
      respectively, owing to such other Lenders (or in interest due thereon, as the
      case may be) in such amounts, and make such other adjustments from time to
      time
      as shall be equitable, to the end that all the Lenders shall share the benefit
      of such excess payment (net of any expenses that may be incurred by such Lender
      in obtaining or preserving such excess payment) pro rata in accordance with
      the
      unpaid principal of and/or interest on the Loans or such other amounts,
      respectively, owing to each of the Lenders. To such end, all the Lenders shall
      make appropriate adjustments among themselves (by the resale of participations
      sold or otherwise) if such payment is rescinded or must otherwise be restored.
      Each Lender agrees that it shall turn over to Administrative Agent (for
      distribution by Administrative Agent to the other Lenders in accordance with
      the
      terms of this Agreement) any payment (whether voluntary or involuntary, through
      the exercise of any right of setoff or otherwise) on account of the Loans held
      by it in excess of its ratable portion of payments on account of the Loans
      obtained by all the Lenders. Nothing contained herein shall require any Lender
      to exercise any such right or shall affect the right of any Lender to exercise,
      and retain the benefits of exercising, any such right with respect to any other
      indebtedness or Obligation of the Borrower. If, under any applicable bankruptcy,
      insolvency or other similar law, any Lender receives a secured claim in lieu
      of
      a set-off to which Section 14.10
      applies,
      then such Lender shall, to the extent practicable, exercise its rights in
      respect of such secured claim in a manner consistent with the rights of the
      Lenders entitled under Section 14.10
      to share
      in the benefits of any recovery on such secured claim.

     

    13.16  Bankruptcy
      of Borrower

    .
      In the
      event a bankruptcy or other insolvency proceeding is commenced by or against
      the
      Borrower or any Guarantor, Administrative Agent shall have the sole and
      exclusive right to file and pursue a joint proof of claim on behalf of the
      Lenders. Each Lender irrevocably waives its right to file or pursue a separate
      proof of claim in any such proceedings.

     

    13.17  Termination

    .
      The
      rights and obligations of Administrative Agent and the Lenders shall terminate
      when the Obligations of Borrower hereunder have been paid and finally discharged
      in full and the obligations of the Lenders to advance funds to the Borrower
      under this Agreement are terminated or, if the Administrative Agent or
      Administrative Agent's nominee takes title to the Project by foreclosure or
      conveyance in lieu of foreclosure, when the Project is thereafter sold to a
      third-party purchaser. All indemnification provisions in favor of Administrative
      Agent herein and in the other Loan Documents shall survive the termination
      hereof.

     

    ARTICLE
      XIV  

     

    

     

    MISCELLANEOUS

     

    14.1  Non-Waiver;
      Remedies Cumulative

    .
      No
      failure on the part of Administrative Agent, any Lender or Borrower to exercise
      and no delay in exercising, and no course of dealing with respect to, any right,
      power or privilege under this Agreement or any other Loan Documents shall
      operate as a waiver thereof, nor shall any single or partial exercise of any
      right, power or privilege under this Agreement or any other Loan Documents
      preclude any other or further exercise thereof or the exercise of any other
      right, power or privilege. The remedies provided herein and the other Loan
      Documents are cumulative and not exclusive of any remedies provided by
      law.

     

    14.2  Notices.

     

    (a)  All
      notices, requests, demands, statements, authorizations, approvals, directions,
      consents and other communications provided for herein and under the Loan
      Documents (to which Borrower is a party) shall be given or made in writing
      and
      shall be deemed sufficiently given or served for all purposes as of the date
      (i)
      when hand delivered (provided that delivery shall be evidenced by a receipt
      executed by or on behalf of the addressee), (ii) one (1) Business Day after
      being sent by reputable overnight courier service (with delivery evidenced
      by
      written receipt) for next Business Day delivery, or (iii) with a simultaneous
      delivery by one of the methods in clause (i) or (ii) above, by facsimile, when
      sent, with confirmation and a copy sent by first class mail, in each case
      addressed to the intended recipient at the address specified below; or, as
      to
      any party, at such other address as shall be designated by such party in a
      notice to each other party hereto. Unless otherwise expressly provided in the
      Loan Documents, Borrower shall only be required to send notices, requests,
      demands, statements, authorizations, approvals, directions, consents and other
      communications to Administrative Agent on behalf of all of the
      Lenders.

    

    If
      to
      Borrower: The
      Chalets at the Lodge at Vail, LLC

    c/o
      Vail
      Resorts Development Co.

    390
      Interlocken Crescent, Suite 1000

    Broomfield,
      CO 80021

    Attention:  Jeffrey
      W. Jones

    Facsimile:  303-404-6404

     

    With
      a
      copy to: Holme
      Roberts & Owen LLP

    1700
      Lincoln Street, Suite 4100

    Denver,
      CO 80203

    Attention:  Robert
      H. Bach, Esq.

    Facsimile:  303-866-0200

     

    If
      to
      Beneficiary: Wells
      Fargo Bank, National Association

    Denver
      Real Estate Group

    4643
      S.
      Ulster, Suite 1400

    Denver,
      CO 80237

    Attention:  Mr.
      John W. McKinny

    Facsimile:  303-741-0867

     

    With
      a
      copy to:  Ryley
      Carlock & Applewhite

    1999
      Broadway, Suite 1800

    Denver,
      CO 80202

    Attention:
      Andrew A. Folkerth, Esq.

    Facsimile:
      303-595-3159

     

    (b)  Notices
      and other communications to the Lenders hereunder may be delivered or furnished
      by electronic communications pursuant to procedures approved by Administrative
      Agent; provided that the foregoing shall not apply to notices pursuant to
Article II
      unless
      otherwise agreed by Administrative Agent and the applicable Lender.
      Administrative Agent or Borrower may, in its discretion, agree to accept notices
      and other communications to it hereunder by electronic communications pursuant
      to procedures approved by it; provided that approval of such procedures may
      be
      limited to particular notices or communications.

     

    14.3  Expenses,
      Etc.

    Borrower
      agrees to pay on demand or reimburse on demand to the applicable party: (a)
      all
      out-of-pocket costs and expenses of Administrative Agent (including, but not
      limited to, the reasonable legal fees and expenses of its counsel, (ii) due
      diligence expenses, including title insurance reports and policies, surveys,
      title and lien searches, appraisals (including the Appraisal and any additional
      Appraisals ordered as a result of Borrower's election to extend the Scheduled
      Maturity Date pursuant to Section 4.1),
      the
      Environmental Report, the Construction Consultant's Construction, Cost and
      Plan
      Review, (iii) accounting firms, (iv) insurance consultants and (v) the
      Construction Consultant) in connection with (1) the negotiation, preparation,
      execution and delivery of this Agreement and the other Loan Documents and the
      syndication, making and administration of the Loans hereunder, (2) the creation,
      perfection or protection of the Liens to be created by the Security Documents,
      (3) the negotiation or preparation of any Modification or waiver of any of
      the
      terms of this Agreement or any of the other Loan Documents (whether or not
      consummated) and the construction of the Improvements and (4) Administrative
      Agent's duties under this Agreement and the other Loan Documents; (b) all
      reasonable out-of-pocket costs and expenses of the Lenders and Administrative
      Agent (including the reasonable fees and expenses of legal counsel in connection
      with (i) any Default and any enforcement or collection proceedings resulting
      therefrom, including all manner of participation in or other involvement with
      (1) bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation
      proceedings, (2) judicial or regulatory proceedings and (3) workout,
      restructuring or other negotiations or proceedings (whether or not the workout,
      restructuring or transaction contemplated thereby is consummated) and (ii)
      the
      enforcement of this Section 14.3;
      and (c)
      all transfer, stamp, documentary or other similar taxes, assessments or charges
      levied by any governmental or revenue authority in respect of this Agreement
      or
      any of the other Loan Documents or any other document referred to herein or
      therein and all costs, expenses, taxes, assessments and other charges incurred
      in connection with any filing, registration, recording or perfection of any
      security interest contemplated by any Security Document or any other document
      referred to therein.

     

    14.4  Indemnification

    .
      Borrower hereby agrees to (a) indemnify the Indemnified Parties from, and hold
      each of them harmless, from and against all damages, losses, claims, actions,
      liabilities (or actions, investigations or other proceedings commenced or
      threatened in respect thereof) penalties, fines, costs and expenses including
      reasonable attorneys' fees and expenses (collectively and severally,
      "Losses")
      which
      may be imposed upon, asserted against or incurred or paid by any of them
      resulting from the claims of any third party relating to or arising out of
      (i)
      the Project, (ii) any of the Loan Documents or the Transactions, (iii) any
      ERISA
      Events, (iv) any Environmental Losses, (v) any defective workmanship or
      materials occurring in the construction of the Improvements or any Restoration
      and (vi) any act performed or permitted to be performed by any Indemnified
      Party
      under any of the Loan Documents, except for Losses to the extent determined
      by a
      court of competent jurisdiction to be caused by the gross negligence or willful
      misconduct of an Indemnified Party (but the effect of this exception only
      eliminates the liability of Borrower with respect to the Indemnified Party
      (and
      if such Indemnified Party is not a Lender, the Lender on whose behalf such
      Indemnified Party was acting) to the extent such Indemnified Party has been
      adjudged to have so acted and not with respect to any other Indemnified Party),
      and (b) reimburse each Indemnified Party on demand for any expenses (including
      attorneys' fees and disbursements) reasonably incurred in connection with the
      investigation of, preparation for or defense of any actual or threatened claim,
      action or proceeding arising therefrom (excluding any action or proceeding
      where
      the Indemnified Party is not a party to such action or proceeding out of which
      any such expenses arise unless such Indemnified Party is required to participate
      or respond in connection with such action or proceeding (e.g., by way of
      deposition, discovery requests, testimony, subpoena or similar reason)). The
      Obligations shall not be considered to have been paid in full unless all
      obligations of Borrower under this Section 14.4
      shall
      have been fully performed (except for contingent indemnification obligations
      for
      which no claim has actually been made pursuant to this Agreement). This
      Section 14.4
      shall
      survive repayment in full of the Loans and the assignment, sale or other
      transfer of Administrative Agent's or any Lender's interest
      hereunder.

     

    14.5  Amendments,
      Etc.

    Except
      as
      otherwise expressly provided in this Agreement or the other Loan Documents,
      and
      subject to the provisions of Sections 13.9
      and 13.11(a),
      this
      Agreement and the other Loan Documents may be Modified only by an instrument
      in
      writing signed by Borrower and the Required Lenders, or by Borrower and
      Administrative Agent acting with the consent of the Required Lenders.
      Notwithstanding anything to the contrary contained in this Agreement or the
      other Loan Documents, Administrative Agent is hereby authorized to enter into
      Modifications to the Loan Documents which are ministerial in nature, including
      the preparation and execution of Uniform Commercial Code forms, and Assignments
      and Acceptances.

     

    14.6  Successors
      and Assigns

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

     

    14.7  Assignments
      and Participations.

     

    (a)  Consent
      Required for Assignments by Borrower.
      Borrower may not assign any of its rights or obligations hereunder or under
      the
      Loan Documents without the prior consent of all of the Lenders and
      Administrative Agent.

     

    (b)  Assignments
      to Operation of Law or Pledges.
      Notwithstanding anything to the contrary herein, each Lender shall have the
      right at any time and from time to time, to (i) assign or participate an
      undivided interest in the Loan, in minimum amounts of Ten Million and No/100
      Dollars ($10,000,000.00), and upon payment to Administrative Agent of an
      assignment or participation fee of Three Thousand Five Hundred and No/100
      Dollars ($3,500.00) for each such assignment or participation to any Affiliate
      of such Lender or to a successor entity by reason of any merger affecting
      Lender, or to an Eligible Assignee (ii) pledge or assign the same to any Federal
      Reserve Bank in accordance with applicable law as collateral security pursuant
      to Regulation A of the Board of Governors of the Federal Reserve System and
      any
      operating circular issued by such Federal Reserve Bank; provided that (1) no
      Lender shall, as between Borrower and such Lender, be relieved of any of its
      obligations hereunder as a result of any such assignment and pledge and (2)
      in
      no event shall such Federal Reserve Bank be considered to be a "Lender" or
      be
      entitled to require the assigning Lender to take or omit to take any action
      hereunder.

     

    (c)  Cooperation
      with Syndication Efforts.
      Borrower acknowledges that a portion of the Loan Commitments will be syndicated
      to one or more Lenders (the "Syndication")
      and in
      connection therewith, the Borrower will take all actions as Administrative
      Agent
      and the Lenders may request to assist in the Syndication effort, including
      the
      execution by Borrower of Replacement Notes.

     

    (d)  Provision
      of Information to Assignees and Participants.
      A
      Lender may furnish any information concerning Borrower, the Project, the Loans
      and any Guarantor in the possession of such Lender from time to time to
      assignees, pledgees and participants (including prospective assignees, pledgees
      and participants), subject, however, to the party receiving such information
      confirming in writing that such party and such information is subject to the
      provisions of Section 14.22.

     

    14.8  Survival

    .
      The
      obligations of Borrower under Sections 5.1,
      5.5,
      5.7,
      14.3,
      14.4,
      and
14.11,
      and the
      obligations of the Lenders under Sections 13.5
      and
13.11(e),
      shall
      survive the repayment of the Obligations and the termination of the Commitments
      and, in the case of any Lender that may assign any interest under the Loan
      Documents in accordance with the terms thereof including any Lender's interest
      in its Commitment or Loans hereunder, shall survive the making of such
      assignment, notwithstanding that such assigning Lender may cease to be a
      "Lender" hereunder. In addition, each representation and warranty made, or
      deemed to be made by a Request for Loan Advance, herein or pursuant hereto
      by
      Borrower shall survive the making of such representation and warranty, and
      no
      Lender shall be deemed to have waived, by reason of making any Loan, any Default
      that may arise by reason of such representation or warranty proving to have
      been
      false or misleading, notwithstanding that such Lender or Administrative Agent
      may have had notice or knowledge or reason to believe that such representation
      or warranty was false or misleading at the time such Loan was made.

     

    14.9  Multiple
      Copies

    .
      Each
      document to be delivered to Administrative Agent hereunder or under any other
      Loan Document shall be delivered in duplicate.

     

    14.10  Right
      of Set-off.

     

    (a)  Upon
      the
      occurrence and during the continuance of any Event of Default, each of the
      Lenders is, subject (as between the Lenders) to the provisions of
      Section 14.10(c)
      of this
      Section 14.10,
      hereby
      authorized at any time and from time to time, without notice to Borrower (any
      such notice being expressly waived by Borrower) and to the fullest extent
      permitted by law, to set-off and apply any and all deposits (general or special,
      time or demand, provisional or final) at any time held, and other indebtedness
      at any time owing, by such Lender in any of its offices, in Dollars or in any
      other currency, to or for the credit or the account of Borrower against any
      and
      all of the respective obligations of Borrower now or hereafter existing under
      the Loan Documents, irrespective of whether or not such Lender or any other
      Lender shall have made any demand hereunder and although such obligations may
      be
      contingent or unmatured and such deposits or indebtedness may be unmatured.
      Each
      Lender hereby acknowledges that the exercise by any Lender of offset, set-off,
      banker's lien, or similar rights against any deposit or other indebtedness
      of
      Borrower whether or not located in Colorado or any other state with certain
      laws
      restricting lenders from pursuing multiple collection methods, could result
      under such laws in significant impairment of the ability of all the Lenders
      to
      recover any further amounts in respect of the Loan. Therefore, each Lender
      agrees that no Lender shall exercise any such right of set-off, banker's lien,
      or otherwise, against any assets of Borrower (including all general or special,
      time or demand, provisional or other deposits and other indebtedness owing
      by
      such Lender to or for the credit or the account of Borrower) without the prior
      written consent of Administrative Agent and the Required Lenders.

     

    (b)  Each
      Lender shall promptly notify Borrower and Administrative Agent after any such
      set-off and application; provided that the failure to give such notice shall
      not
      affect the validity of such set-off and application. The rights of the Lenders
      under this Section 14.10
      are in
      addition to other rights and remedies (including other rights of set-off) which
      the Lenders may have.

     

    (c)  If
      an
      Event of Default has resulted in the Loans becoming due and payable prior to
      the
      stated maturity thereof, each Lender agrees that it shall turn over to
      Administrative Agent any payment (whether voluntary or involuntary, through
      the
      exercise of any right of setoff or otherwise) on account of the Loans held
      by it
      in excess of its ratable portion of payments on account of the Loans obtained
      by
      all the Lenders.

     

    14.11  Brokers

    .
      Borrower hereby represents to Administrative Agent and each Lender that it
      has
      not dealt with any broker, underwriters, placement agent, or finder in
      connection with the Transactions. Borrower hereby agrees to indemnify and hold
      Administrative Agent and each Lender harmless from and against any and all
      claims, liabilities, costs and expenses of any kind in any way relating to
      or
      arising from a claim by any Person that such Person acted on behalf of Borrower
      in connection with the Transactions.

     

    14.12  Estoppel
      Certificates.

     

    (a)  Borrower,
      within ten (10) Business Days after Administrative Agent's request, shall
      furnish to Administrative Agent a written statement, duly acknowledged,
      certifying to Administrative Agent and each Lender and/or, subject to the terms
      of Section 14.7,
      any
      proposed assignee of any portion of the interests hereunder: (i) the amount
      of
      the Outstanding Principal Amount then owing under this Agreement and each of
      the
      Notes, (ii) the terms of payment and Scheduled Maturity Date of the Loans (or
      if
      earlier, the Maturity Date), (iii) the date to which interest has been paid
      under each of the Notes, (iv) whether any offsets or defenses exist against
      the
      repayment of the Loans and, if any are alleged to exist, a detailed description
      thereof, (v) the extent to which the Loan Documents have been Modified and
      (vi)
      such other information as Administrative Agent shall reasonably
      request.

     

    (b)  Administrative
      Agent, within ten (10) Business Days after Borrower's reasonable request
      therefor, shall furnish to Borrower a written statement, duly acknowledged,
      certifying to any prospective permitted purchaser of an interest in Borrower
      or
      any prospective permitted lender to Borrower: (i) the amount of the Outstanding
      Principal Amount, (ii) the terms of payment and Scheduled Maturity Date of
      the
      Loans (or if earlier, the Maturity Date), (iii) the date to which interest
      has
      been paid under each of the Notes, (iv) whether, to the actual knowledge of
      the
      Person signing on behalf of Administrative Agent, there are any Defaults on
      the
      part of Borrower hereunder or under any of the other Loan Documents, and, if
      any
      are alleged to exist, a detailed description thereof, (v) the extent to which
      the Loan Documents have been Modified, and (vi) such other information as
      Borrower shall reasonably request.

     

    14.13  Preferences

    .
      To the
      extent that Borrower makes a payment or payments to Administrative Agent and/or
      any Lender, which payment or proceeds or any part thereof are subsequently
      invalidated, declared to be fraudulent or preferential, set aside or required
      to
      be repaid to a trustee, receiver or any other party under any bankruptcy law,
      state or federal law, common law or equitable cause, then, to the extent of
      such
      payment or proceeds received, the obligations hereunder or part thereof intended
      to be satisfied shall be revived and continue in full force and effect, as
      if
      such payment or proceeds had not been received by Administrative Agent or a
      Lender, as the case may be.

     

    14.14  Certain
      Waivers

    .
      Borrower hereby irrevocably and unconditionally waives (a) notice of any actions
      taken by Administrative Agent or any Lender hereunder or under any other Loan
      Document or any other agreement or instrument relating thereto except to the
      extent (i) otherwise expressly provided herein or therein or (ii) Borrower
      is
      not, pursuant to Applicable Law, permitted to waive the giving of notice, (b)
      all other notices, demands and protests, and all other formalities of every
      kind
      in connection with the enforcement of Borrower's obligations hereunder and
      under
      the other Loan Documents, the omission of or delay in which, but for the
      provisions of this Section 14.14,
      might
      constitute grounds for relieving Borrower of any of its obligations hereunder
      or
      under the other Loan Documents, except to the extent that Borrower is not,
      pursuant to Applicable Law, permitted to waive the giving of notice, (c) any
      requirement that Administrative Agent or any Lender protect, secure, perfect
      or
      insure any lien on any collateral for the Loans or exhaust any right or take
      any
      action against Borrower or any other Person or against any collateral for the
      Loans, (d) any right or claim of right to cause a marshalling of Borrower's
      assets and (e) all rights of subrogation or contribution, whether arising by
      contract or operation of law or otherwise by reason of payment by Borrower
      pursuant hereto or to the other Loan Documents.

     

    14.15  Entire
      Agreement

    .
      This
      Agreement, the Notes and the other Loan Documents constitute the entire
      agreement between Borrower, Administrative Agent and the Lenders with respect
      to
      the subject matter hereof and all understandings, oral representations and
      agreements heretofore or simultaneously had among the parties are merged in,
      and
      are contained in, such documents and instruments.

     

    14.16  Severability

    .
      If any
      provision of this Agreement shall be held by any court of competent jurisdiction
      to be unlawful, void or unenforceable for any reason as to any Person or
      circumstance, such provision or provisions shall be deemed severable from and
      shall in no way affect the enforceability and validity of the remaining
      provisions of this Agreement.

     

    14.17  Captions

    .
      The
      table of contents and captions and section headings appearing herein are
      included solely for convenience of reference and are not intended to affect
      the
      interpretation of any provision of this Agreement.

     

    14.18  Counterparts

    .
      This
      Agreement may be executed in any number of counterparts, all of which taken
      together shall constitute one and the same instrument and any of the parties
      hereto may execute this Agreement by signing any such counterpart.

     

    14.19  GOVERNING
      LAW

    .
      THIS
      AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND
      CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF COLORADO, EXCEPT TO THE
      EXTENT OTHERWISE SPECIFIED IN ANY OF THE LOAN DOCUMENTS.

     

    14.20  SUBMISSION
      TO JURISDICTION

    .
      BORROWER, ADMINISTRATIVE AGENT AND EACH OF THE LENDERS HEREBY IRREVOCABLY (A)
      AGREE THAT ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATING
      TO THIS AGREEMENT, THE NOTES, THE GUARANTY, ANY SECURITY DOCUMENT, OR ANY OTHER
      LOAN DOCUMENT MAY BE BROUGHT IN A COURT OF RECORD IN THE STATE OF COLORADO,
      CITY
      AND COUNTY OF DENVER OR IN THE COURTS OF THE UNITED STATES OF AMERICA LOCATED
      IN
      SUCH STATE AND COUNTY, (B) CONSENT TO THE JURISDICTION OF EACH SUCH COURT IN
      ANY
      SUCH SUIT, ACTION OR PROCEEDING, (C) WAIVE ANY OBJECTION WHICH IT MAY HAVE
      TO
      THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY OF SUCH COURTS
      AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN
      AN
      INCONVENIENT FORUM AND (D) AGREE AND CONSENT THAT ALL SERVICE OF PROCESS IN
      ANY
      SUCH SUIT, ACTION OR PROCEEDING IN COLORADO STATE OR FEDERAL COURT SITTING
      IN
      DENVER, MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,
      DIRECTED TO BORROWER, ADMINISTRATIVE AGENT OR A LENDER, AS APPLICABLE, AT THE
      ADDRESS FOR NOTICES PURSUANT TO SECTION 14.2
      HEREOF,
      AND SERVICE SO MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE
      BEEN SO MAILED. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ADMINISTRATIVE
      AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
      LAW
      OR AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR ANY LENDER TO BRING ANY SUIT,
      ACTION OR PROCEEDING AGAINST BORROWER OR THE PROPERTY OF BORROWER IN THE COURTS
      OF ANY OTHER JURISDICTIONS.

     

    14.21  WAIVER
      OF JURY TRIAL; COUNTERCLAIM

    .
      EACH OF
      BORROWER, ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO
      THE
      FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
      IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES,
      THE GUARANTY, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS. BORROWER FURTHER
      HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, IN CONNECTION WITH ANY LEGAL
      PROCEEDING BROUGHT BY OR ON BEHALF OF ADMINISTRATIVE AGENT OR THE LENDERS WITH
      RESPECT TO THIS AGREEMENT, THE NOTES, THE OTHER LOAN DOCUMENTS OR OTHERWISE
      IN
      RESPECT OF THE LOANS, ANY AND EVERY RIGHT BORROWER MAY HAVE TO (A) INTERPOSE
      ANY
      COUNTERCLAIM THEREIN, OTHER THAN A COMPULSORY COUNTERCLAIM, AND (B) HAVE THE
      SAME CONSOLIDATED WITH ANY OTHER OR SEPARATE SUIT, ACTION OR PROCEEDING. NOTHING
      CONTAINED IN THE IMMEDIATELY PRECEDING SENTENCE SHALL PREVENT OR PROHIBIT
      BORROWER FROM INSTITUTING OR MAINTAINING A SEPARATE ACTION AGAINST
      ADMINISTRATIVE AGENT OR THE LENDERS WITH RESPECT TO ANY ASSERTED
      CLAIM.

     

    14.22  Confidentiality

    .
      Each of
      Administrative Agent and the Lenders agrees to maintain the confidentiality
      of
      the Information (as defined below), except that Information that may be
      disclosed (a) to its Subsidiaries and Affiliates' directors, officers, employees
      and agents, including accountants, legal counsel and other advisors (it being
      understood that the Persons to whom such disclosure is made will be informed
      of
      the confidential nature of such Information and instructed to keep such
      Information confidential), (b) to the extent requested by any regulatory
      authority, (c) to the extent required by applicable laws or regulations or
      by
      any subpoena or similar legal process, (d) to any other party to this Agreement,
      (e) in connection with the exercise of any remedies hereunder or under any
      other
      Loan Document or any suit, action or proceeding relating to this Agreement
      or
      any other Loan Document or the enforcement of rights hereunder or thereunder,
      (f) subject to an agreement containing provisions substantially the same as
      those of this Section 14.22,
      to (i)
      any assignee or pledgee of or Participant in, or any prospective assignee or
      pledgee of or Participant in, any of its rights or obligations under this
      Agreement or (ii) any actual or prospective counterparty (or its advisors)
      to
      any swap or derivative transaction relating to Borrower and its obligations,
      (g)
      with the consent of Borrower or (h) to the extent such Information (i) becomes
      publicly available other than as a result of a breach of this
      Section 14.22
      or (ii)
      becomes available to Administrative Agent or any Lender on a nonconfidential
      basis from a source other than Borrower. For the purposes of this
      Section 14.22,
      "Information"
      shall
      mean all information received from or on behalf of Borrower relating to
      Borrower, its Subsidiaries or Affiliates or their respective businesses, other
      than any such information that is available to Administrative Agent or any
      Lender on a nonconfidential basis prior to disclosure by Borrower; provided
      that
      in the case of information received from Borrower after the date hereof, such
      information is clearly identified at the time of delivery as confidential.
      Any
      Person required to maintain the confidentiality of Information as provided
      in
      this Section 14.22
      shall be
      considered to have complied with its obligation to do so if such Person has
      exercised the same degree of care to maintain the confidentiality of such
      Information as such Person would accord to its own confidential information.
      Notwithstanding anything herein to the contrary, the information subject to
      this
      Section 14.22
      shall
      not include, and Administrative Agent and each Lender may disclose without
      limitation of any kind, any information with respect to the "tax treatment"
      and
      "tax structure" (in each case, within the meaning of Treasury Regulation
      Section 1.6011-4) of the transactions contemplated hereby and all materials
      of any kind (including opinions or other tax analyses) that are provided to
      Administrative Agent or such Lender relating to such tax treatment and tax
      structure; provided that with respect to any document or similar item that
      in
      either case contains information concerning the tax treatment or tax structure
      of the transactions as well as other information, this sentence shall only
      apply
      to such portions of the document or similar item that relate to the tax
      treatment or tax structure of the Loans and transactions contemplated
      hereby.

     

    14.23  Usury
      Savings Clause

    .
      It is
      the intention of Borrower, Administrative Agent and the Lenders to conform
      strictly to the usury and similar laws relating to interest payable on loans
      from time to time in force, and all Loan Documents between Borrower,
      Administrative Agent and the Lenders, whether now existing or hereafter arising
      and whether oral or written, are hereby expressly limited so that in no
      contingency or event whatsoever, whether by acceleration of maturity hereof
      or
      otherwise, shall the amount paid or agreed to be paid in the aggregate to the
      Lenders as interest (whether or not designated as interest, and including any
      amount otherwise designated by or deemed to constitute interest by a court
      of
      competent jurisdiction) hereunder or under the other Loan Documents or in any
      other agreement given to secure the Loans, or in any other document evidencing,
      securing or pertaining to the Loans, exceed the maximum amount (the "Maximum
      Rate") permissible under Applicable Laws. If under any circumstances whatsoever
      fulfillment of any provision hereof, of this Agreement or of the other Loan
      Documents, at the time performance of such provisions shall be due, shall
      involve exceeding the Maximum Rate, then, ipso facto, the obligation to be
      fulfilled shall be reduced to the Maximum Rate. For purposes of calculating
      the
      actual amount of interest paid and/or payable hereunder in respect of laws
      pertaining to usury or such other laws, all sums paid or agreed to be paid
      to
      the Lenders for the use, forbearance or detention of the Loans evidenced hereby,
      outstanding from time to time shall, to the extent permitted by Applicable
      Law,
      be amortized, pro-rated, allocated and spread from the date of disbursement
      of
      the proceeds of the Notes until payment in full of all of such indebtedness,
      so
      that the actual rate of interest on account of such Loans is uniform through
      the
      term hereof. If under any circumstances any Lender shall ever receive an amount
      which would exceed the Maximum Rate, such amount shall be deemed a payment
      in
      reduction of the principal amount of the applicable Loans and shall be treated
      as a voluntary prepayment under this Agreement and shall be so applied in
      accordance with the provisions of this Agreement, or if such excessive interest
      exceeds the outstanding amount of the applicable Loans and any other
      Obligations, the excess shall be deemed to have been a payment made by mistake
      and shall be refunded to Borrower.

     

    14.24  Controlled
      Accounts

    .
      Borrower hereby agrees with Administrative Agent, as to any Controlled Account
      into which this Agreement requires Borrower to deposit funds, as
      follows:

     

    (a)  Establishment
      and Maintenance of the Controlled Account.

     

    (i)  Each
      Controlled Account (1) shall be a separate and identifiable account from all
      other funds held by the Depository Bank and (2) shall contain only funds
      required to be deposited pursuant to this Agreement. Any interest which may
      accrue on the amounts on deposit in a Controlled Account shall be added to
      and
      shall become part of the balance of such Controlled Account. Borrower,
      Administrative Agent and the applicable Depository Bank shall enter into an
      agreement (the "Controlled
      Account Agreement"),
      in
      form and content acceptable to Administrative Agent which shall govern the
      Controlled Account and the rights, duties and obligations of each party to
      the
      Controlled Account Agreement.

     

    (ii)  The
      Controlled Account Agreement shall provide that (1) the Controlled Account
      shall
      be established in the name of Administrative Agent (on behalf of the Lenders),
      (2) the Controlled Account shall be subject to the sole dominion, control and
      discretion of Administrative Agent, and (3) neither Borrower nor any other
      Person, including, without limitation, any Person claiming on behalf of or
      through Borrower, shall have any right or authority, whether express or implied,
      to make use of or withdraw, or cause the use or withdrawal of, any proceeds
      from
      the Controlled Account or any of the other proceeds deposited in the Controlled
      Account, except as expressly provided in this Agreement or in the Controlled
      Account Agreement.

     

    (b)  Deposits
      to and Disbursements from the Controlled Account.
      All
      deposits to and disbursements of all or any portion of the deposits to the
      Controlled Account shall be in accordance with this Agreement and the Controlled
      Account Agreement. Any disbursement of funds held in any Controlled Account
      shall be subject to the satisfaction of all applicable conditions precedent
      to
      the making of a Loan advance by the Lenders hereunder (including, without
      limitation, that no Event of Default then exists, and that Borrower shall have
      submitted a written request for such amount in accordance with the procedures
      generally applicable to advances of the Loan). Borrower hereby agrees to pay
      any
      and all fees charged by Depository Bank in connection with the maintenance
      of
      the Controlled Account and the performance of its duties. Under no circumstances
      shall Administrative Agent or the Lenders be obligated to make advances of
      the
      Loan while funds are available in a Controlled Account to pay for costs of
      the
      Construction Work.

     

    (c)  Security
      Interest.
      Borrower hereby grants a first priority security interest in favor of
      Administrative Agent for the ratable benefit of the Lenders in each Controlled
      Account and all financial assets and other property and sums at any time held,
      deposited or invested therein, and all security entitlements and investment
      property relating thereto, together with any interest or other earnings thereon,
      and all proceeds thereof, whether accounts, general intangibles, chattel paper,
      deposit accounts, instruments, documents or securities (collectively,
      "Controlled
      Account Collateral"),
      together with all rights of a secured party with respect thereto (even if no
      further documentation is requested by Administrative Agent or the Lenders or
      executed by Borrower with respect thereto).

     

    14.25  Financing
      Statements

    .
      Borrower authorizes Administrative Agent to file such financing statements
      (and
      any continuations statements with respect thereto) under the Uniform Commercial
      Code as Administrative Agent may deem necessary in order to perfect or maintain
      the perfection of any security interest granted or to be granted to
      Administrative Agent pursuant to any of the Loan Documents, in such
      jurisdictions as Administrative Agent may elect.

     

    14.26  Unavoidable
      Delay

    .
      If the
      work of construction is directly affected and delayed by an Unavoidable Delay,
      Borrower must notify Administrative Agent in writing within ten (10) Business
      Days after the occurrence of any such Unavoidable Delay. So long as no Event
      of
      Default has occurred and is continuing and such notice has been given in a
      timely manner, and provided further that in each case, (a) the cause of the
      Unavoidable Delay is not within the control of Borrower, (b) after giving effect
      to the consequences of each such delay, the Loans shall remain In Balance,
      (c)
      after giving effect to the consequences of each such delay, the Qualified
      Purchase Contracts remain in full force and effect, (d) Borrower shall use
      all
      commercially reasonable efforts to mitigate the delay caused by such event
      of
      Unavoidable Delay, and (e) Administrative Agent reasonably acknowledges that
      such delay is due to one of the foregoing causes (which acknowledgment shall
      not
      be unreasonably withheld or delayed), then Administrative Agent shall extend
      the
      Completion Date and the time for performance of any other construction
      obligations hereunder by a period of time equal to the period of such
      Unavoidable Delay. No such extension shall affect the time for performance
      of,
      or otherwise modify, any of Borrower's other Obligations under the Loan
      Documents or the maturity of the Notes. Neither Administrative Agent nor any
      Lender shall be liable in any way for Administrative Agent's or such Lender's
      failure to perform or delay in performing under the Loan Documents, and
      Administrative Agent may suspend or terminate all or any portion of its and
      the
      Lenders' obligations under the Loan Documents if such delay or failure to
      perform results directly or indirectly from, or is based upon, an Unavoidable
      Delay.

     

    [Signature
      Pages Follow]

     

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed and delivered as of the day and year first above written.

    

    BORROWER:

     

    THE
      CHALETS AT THE LODGE AT VAIL, LLC, a Colorado limited liability
      company

     

    
      	 	
              By:

            	
              Vail
                Resorts Development Company, 

            

    

     

    a
      Colorado corporation, its Managing Member

    

    

    By:
      /s/
      Jeffrey W. Jones

    Jeffrey
      W. Jones,

    Senior
      Executive Vice President

     

    [Signatures
      continued on next page.]

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    ADMINISTRATIVE
      AGENT:

     

    WELLS
      FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
      Administrative Agent for the Lenders 

    

    

    By:
      /s/
      John W. McKinny

    John
      W.
      McKinny,

    Senior
      Vice President 

     

    

     

    [Signatures
      continued on next page.]

     

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    LENDER:

     

    WELLS
      FARGO BANK, NATIONAL ASSOCIATION, a national banking association 

    

    

    By:
      /s/
      John W. McKinny

    John
      W.
      McKinny,

    Senior
      Vice President 

     

    

     

    [Signatures
      continued on next page.]

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    LENDER:

    

    U.S.
      BANK
      NATIONAL ASSOCIATION,

    a
      national banking association 

    

    

    By:
      /s/
      Matthew W. Carrothers

    Matthew
      W. Carrothers,

    Vice
      President 

     

    

     

    [Signatures
      continued on next page.]

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    LENDER:

    

    JPMORGAN
      CHASE BANK, N.A.,

    a
      national banking association 

    

    

    By:
      /s/
      Amber Coffey

    Name:
      Amber Coffey

    Title:
      Vice President

    

     

    

     

    

     

    [Signatures
      continued on next page.]

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    LENDER:

    

    BANK
      OF
      AMERICA, N.A.,

    a
      national banking association 

    

    

    By:
      /s/
      Ryan Hillard

    Ryan
      Hillard

    Assistant
      Vice President

    

     

    [Signatures
      continued on next page.]

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    LENDER:

    

    COMPASS
      BANK,

    a
      national banking association 

    

    

    By:
      /s/
      John C. Lozano

    John
      C.
      Lozano

    Vice
      President

    

     

    [Signatures
      continued on next page.]

    

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    LENDER:

    

    COMERICA
      WEST INCORPORATED

    

    

    By:
      /s/
      Kevin T. Urban

    Kevin
      T.
      Urban

    Assistant
      Vice President

    

     

    [End
      of signatures.]

    

    

     

    

    
      
        
           

          

        

        
        

      

      
        
        

        
        

      

      
        
        

        
        

      

    

     

    

    

    Exhibit
      A

     

    Description
      of Land

    

    

    LOTS
      1
      AND 2, MILL CREEK SUBDIVISION, ACCORDING TO THE PLAT RECORDED NOVEMBER 6, 2000,
      UNDER RECEPTION NO. 743366, COUNTY OF EAGLE, STATE OF COLORADO. 

    

    TOGETHER
      WITH: 

    

    LOTS
      1
      AND 4, SECTION 8, TOWNSHIP 5 SOUTH, RANGE 80 WEST OF THE 6TH PRINCIPAL MERIDIAN,
      COUNTY OF EAGLE, STATE OF COLORADO; 

    

    ALTERNATIVELY
      DESCRIBED AS FOLLOWS: 

    

    LOTS
      1
      AND 4, SECTION 8, TOWNSHIP 5 SOUTH, RANGE 80 WEST, OF THE SIXTH PRINCIPAL
      MERIDIAN, COUNTY OF EAGLE, STATE OF COLORADO, AS ESTABLISHED BY THE DEPENDENT
      RESURVEYS AND SURVEYS COMPLETED BY THE UNITED STATES DEPARTMENT OF THE INTERIOR,
      BUREAU OF LAND MANAGEMENT DATED FEBRUARY 3, 2005 (LOT 4), AND DECEMBER 30,
      1988
      (LOT 1), AND ALSO BEING DESCRIBED ALTERNATIVELY AS FOLLOWS: 

    

    BEGINNING
      AT THE NORTHWEST 1/16 CORNER OF SECTION 8, TOWNSHIP 5 SOUTH, RANGE 80 WEST,
      OF
      THE SIXTH PRINCIPAL MERIDIAN, COUNTY OF EAGLE, STATE OF COLORADO; WHENCE THE
      NORTH 1/16 CORNER OF SECTION 7 AND SECTION 8 BEARS N89 DEGREES 43 MINUTES 59
      SECONDS W A DISTANCE OF 1323.26 FEET, SAID LINE BEING THE BASIS OF BEARING
      FOR
      THIS DESCRIPTION. 

    

    THENCE
      ALONG THE EAST LINE OF THE SOUTHWEST QUARTER OF THE NORTH WEST QUARTER OF SAID
      SECTION 8 (ALSO BEING CO-EXTENSIVE WITH THE BOUNDARY OF THE FORMER VAIL VILLAGE,
      FIRST FILING, ACCORDING TO THE PLAT THEREOF RECORDED AUGUST 6, 1962 AT
      RECEPTION NUMBER 96382) THE FOLLOWING TWO COURSES: 

    1)
      S00
      DEGREES 21 MINUTES 52 SECONDS W 165.00 FEET 

    2)
      S00
      DEGREES 21 MINUTES 52 SECONDS W 277.76 FEET 

    

    THENCE
      ALONG SAID EAST LINE OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF
      SECTION 8 (ALSO BEING CO-EXTENSIVE WITH THE BOUNDARY OF PARCEL 1, GOLDEN PEAK
      SKI BASE AND RECREATION DISTRICT (RECEPTION NUMBER 352168)), S00 DEGREES 21
      MINUTES 52 SECONDS W 57.22 FEET; THENCE N89 DEGREES 45 MINUTES 07 SECONDS W
      248.01 FEET: THENCE N33 DEGREES 20 MINUTES 55 SECONDS W 282.22 FEET;
      THENCE
      N89 DEGREES 45 MINUTES 45 SECONDS W 488.32 FEET; THENCE N00 DEGREES 14 MINUTES
      21 SECONDS E 265.29 FEET TO A POINT ON THE NORTH LINE OF SAID SOUTHWEST QUARTER
      OF THE NORTHWEST QUARTER OF SECTION 8; THENCE ALONG SAID NORTH LINE (AGAIN
      ALSO
      BEING CO-EXTENSIVE WITH SAID BOUNDARY OF THE FORMER VAIL VILLAGE, FIRST FILING
      ACCORDING TO THE PLAT THEREOF RECORDED AUGUST 6, 1962 AT RECEPTION NUMBER 96382)
      S89 DEGREES 43 MINUTES 59 SECONDS E 99.99 FEET TO THE NORTHWEST CORNER OF MILL
      CREEK SUBDIVISION, ACCORDING TO THE PLAT THEREOF RECORDED NOVEMBER 6, 2000
      AT
      RECEPTION NUMBER 743366; THENCE ALONG THE WESTERLY BOUNDARY OF SAID MILL CREEK
      SUBDIVISION S00 DEGREES 15 MINUTES 18 SECONDS W 165.37 FEET TO THE SOUTHWEST
      CORNER OF SAID MILL CREEK SUBDIVISION; THENCE ALONG THE SOUTHERLY BOUNDARY
      OF
      SAID MILL CREEK SUBDIVISION S89 DEGREES 45 MINUTES 57 SECONDS E 131.89 FEET;
      THENCE CONTINUING ALONG THE SOUTHERLY BOUNDARY OF SAID MILL CREEK SUBDIVISION
      S89 DEGREES 46 MINUTES 28 SECONDS E 413.26 FEET TO THE SOUTHEAST CORNER OF
      SAID
      MILL CREEK SUBDIVISION: THENCE ALONG THE EASTERLY BOUNDARY OF SAID MILL CREEK
      SUBDIVISION N00 DEGREES 21 MINUTES 19 SECONDS E 165.00 FEET TO A POINT ON THE
      NORTH LINE OF SAID SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 8,
      SAID
      POINT ALSO BEING THE NORTHEAST CORNER OF SAID MILL CREEK SUBDIVISION; THENCE
      ALONG SAID NORTH LINE (AGAIN ALSO BEING CO-EXTENSIVE WITH THE BOUNDARY OF THE
      FORMER VAIL VILLAGE, FIRST FILING, RECEPTION NUMBER 96382) S89 DEGREES 43
      MINUTES 59 SECONDS E 248.12 FEET TO THE TRUE POINT OF BEGINNING, COUNTY OF
      EAGLE, STATE OF COLORADO. 

    

    NOTE:
      THE
      LAND ON WHICH THE CHALETS AT THE LODGE AT VAIL WILL BE LOCATED AS DEPICTED
      ON
      THE SITE PLAN PREPARED BY 42/40 ARCHITECTURE, IS ENCOMPASSED WITHIN THE PROPERTY
      SHOWN ON THE PLAT DESCRIBED ABOVE. 

    

    TOGETHER
      WITH THE EASEMENTS GRANTED IN THE SUBDIVISION. CONVEYANCE AND CONSTRUCTION
      AGREEMENT RECORDED ___________________ RECEPTION NO.
      __________________

    

    

    

    
      
        
           

          

        

        
        

      

      
        
        

        
        

      

      
        
        

        
        

      

    

    Exhibit
      B

    

    Project
      Budget

    

    [***]

    

    

    

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

        
        

      

    

    Exhibit
      C

     

    List
      of Commitments and Proportionate Shares

    

    
      	
              Lender

            	
              Amount
                of Commitment

            	
              Proportionate
                Share

            
	
               

              Wells
                Fargo Bank National Association

            	
               

              $34,000,000

            	
               

              28%

            
	
               

              U.S.
                Bank National Association

            	
               

              $34,000,000

            	
               

              28%

            
	
               

              Bank
                of America, N.A.

            	
               

              $15,000,000

            	
               

              12%

            
	
               

              Compass
                Bank

            	
               

              $15,000,000

            	
               

              12%

            
	
               

              JPMorgan
                Chase Bank, N.A.

            	
               

              $15,000,000

            	
               

              12%

            
	
               

              Comerica
                West Incorporated 

            	
               

              $10,000,000

            	
               

              8%

            
	 	 	 
	
               

              Total:

            	
               

              $123,000,000.00

            	
               

              100%

            

    

    

    

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

        
        

      

    

    Exhibit
      D

     

    Summary
      Qualified Purchase Contracts

    

    

    CHALETS
      AT THE LODGE AT VAIL

    

    
      	
              UNIT
                

            	
              PURCHASE
                PRICE 

            	
              PROJECTED
                CLOSING COSTS 

            	
              EARNEST
                MONEY 

            	
              FRAMING
                DEPOSIT 

            	
              BALANCE
                DUE 

            
	
              1
                

            	
              $
                9,750,000.00 

            	
              $
                682,500.00

            	
              $
                1,462,500.00 

            	
              $
                975,000,00 

            	
              $
                7,312,500.00 

            
	
              2
                

            	
              $
                9,975,000.00 

            	
              $
                698,250.00

            	
              $
                1496,250.00 

            	
              $
                997,500,00 

            	
              $
                7,481,250.00 

            
	
              3
                

            	
              $
                12,150,000.00 

            	
              $
                850,500.00

            	
              $
                1,822,500,00 

            	
              $
                1,215,000.00 

            	
              $
                9,112,500.00 

            
	
              4
                

            	
              $
                14,350.000.00 

            	
              $
                1,004,500.00

            	
              $
                2,152,500.00 

            	
              $
                1.435,000.00 

            	
              $
                10,762,500.00 

            
	
              5
                

            	
              $
                12,950,000.00 

            	
              $
                906,500.00

            	
              $
                1,942,500.00 

            	
              $
                1,295,000.00 

            	
              $
                9,712,500.00 

            
	
              6
                

            	
              $
                12,450,000.00 

            	
              $
                871,500.00

            	
              $
                1,867,500.00 

            	
              $
                1,245,000.00 

            	
              $
                9,337,500.00 

            
	
              7
                

            	
              $
                11,125,000.00 

            	
              $
                778,750.00

            	
              $
                1,668,750.00 

            	
              $
                1,112,500.00 

            	
              $
                8,343,750,00 

            
	
              8
                

            	
              $
                13,125,000.00 

            	
              $
                918,750.00

            	
              $
                1,968,750.00 

            	
              $
                1,312,500.00 

            	
              $
                9,843,750.00 

            
	
              9
                

            	
              $
                10,975,000.00 

            	
              $
                768,250.00

            	
              $
                1,646,250,00 

            	
              $
                1,097,500,00 

            	
              $
                8,231,250.00 

            
	
              10
                

            	
              $
                10,850,000.00 

            	
              $
                759,500.00

            	
              $
                1,627,500.00 

            	
              $
                1,085,000.00 

            	
              $
                8,137,500.00

            
	
              11

            	
              $
                13,225,000,00 

            	
              $
                925,750.00

            	
              $
                1,983,750.00 

            	
              $
                1,322,500.00 

            	
              $
                9,918,750.00 

            
	
              12
                

            	
              $
                12,750,000,00 

            	
              $
                892, 500.00

            	
              $
                1,912,500.00 

            	
              $
                1,275,000,00 

            	
              $
                9,562,500.00 

            
	
              13
                

            	
              $
                15,950.000.00 

            	
              $
                1,116,500.00

            	
              $
                2,392,500,00 

            	
              $
                1,595,000,00 

            	
              $
                11,962500.00 

            
	 	
              $159,625,000.00

            	
              $11,173,750.00

            	
              $23,943,750,00

            	
              $15,962,500.00

            	
              $1l9,718,750.00

            

    

    

    

    

    

    Exhibit
      E

     

    List
      of Plans and Specifications

     

    Plans
      and
      Specifications prepared by 42/40 Architecture, last revised May 15,
      2006.

     

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

        
        

      

    

    Exhibit
      F

    

    
      	 
	
              Loan
                Par Value 

            
	
              (Prior
                To Club Component Release)

            

    

    

    
      	
              Chalet
                Unit 

            	 	
              List
                Price 

            	 	
              Loan
                Par Value

            
	
              Unit
                1 

            	 	
              $
                9,750,000 

            	 	
              $
                7,512,921 

            
	
              Unit
                2 

            	 	
              $
                9,975,000 

            	 	
              $
                7,686,296

            
	
              Unit
                3 

            	 	
              $12,150,000
                

            	 	
              $
                9,362,255 

            
	
              Unit
                4 

            	 	
              $14,350,000
                

            	 	
              $
                11,057,478 

            
	
              Unit
                5 

            	 	
              $12,950,000
                

            	 	
              $
                9,978,700 

            
	
              Unit
                6 

            	 	
              $12,450,000
                

            	 	
              $
                9,593,422 

            
	
              Unit
                7 

            	 	
              $11,125,000
                

            	 	
              $
                8,572,435 

            
	
              Unit
                8 

            	 	
              $13,125,000
                

            	 	
              $
                10,113,547 

            
	
              Unit
                9 

            	 	
              $10,975,000
                

            	 	
              $
                8,456,852 

            
	
              Unit
                10 

            	 	
              $10,850,000
                

            	 	
              $
                8,360,532 

            
	
              Unit
                11 

            	 	
              $13,225,000
                

            	 	
              $
                10,190,603 

            
	
              Unit
                12 

            	 	
              $12,750,000
                

            	 	
              $
                9,824,589 

            
	
              Unit
                13 

            	 	
              $15,950,000
                

            	 	
              $
                12,290,368 

            
	
              Chalet
                Total 

            	 	
              $159,625,000
                

            	 	
              $123,000,000
                

            
	 
	
              Loan
                Par Value

            
	
              (Following
                Club Component Release)

            
	
              Chalet
                Unit 

            	 	
              List
                Price

            	 	
              Loan
                Par
                Value

            
	
              Unit
                1 

            	 	
              $9,750,000
                

            	 	
              $5,069,695
                

            
	
              Unit
                2 

            	 	
              $9,975,000
                

            	 	
              $5,186,688
                

            
	
              Unit
                3 

            	 	
              $12,150,000
                

            	 	
              $6,317,619
                

            
	
              Unit
                4 

            	 	
              $14,350,000
                

            	 	
              $7,461,551
                

            
	
              Unit
                5 

            	 	
              $12,950,000
                

            	 	
              $6,733,594
                

            
	
              Unit
                6 

            	 	
              $12,450,000
                

            	 	
              $6,473,610
                

            
	
              Unit
                7 

            	 	
              $11,125,000
                

            	 	
              $5,784,652
                

            
	
              Unit
                8 

            	 	
              $13,125,000
                

            	 	
              $6,824,589
                

            
	
              Unit
                9 

            	 	
              $10,975,000
                

            	 	
              $5,706,656
                

            
	
              Unit
                10 

            	 	
              $10,850,000
                

            	 	
              $5,641,660
                

            
	
              Unit
                11 

            	 	
              $13,225,000
                

            	 	
              $6,876,586
                

            
	
              Unit
                12 

            	 	
              $12,750,000
                

            	 	
              $6,629,601
                

            
	
              Unit
                13 

            	 	
              $15,950,000
                

            	 	
              $8,293,500
                

            
	
              Chalet
                Total 

            	 	
              $159,625,000

            	
               

            	
              $83,000,000

            

    

    

    

    

    

    

    Exhibit
      G

     

    Request
      for Continuation or Conversion

    

    

     

    REQUEST
      FOR CONTINUATION OR CONVERSION

     

    Pursuant
      to Section 2.2(a)
      of that
      certain Construction Loan Agreement among The Chalets at the Lodge at Vail,
      LLC
      ("Borrower"),
      the
      Lenders party thereto, and Wells Fargo Bank, National Association, as
      Administrative Agent for the Lenders ("Administrative
      Agent"),
      this
      represents Borrower’s irrevocable notice to the Administrative Agent of
      Borrower’s intention to:

     

    
      	 	
              (a)

            	
              [_____]
                continue the Loan with the Base Rate as the Applicable Interest
                Rate;

            

    

     

    
      	 	
              (b)

            	
              [_____]
                continue the Loan with a LIBOR-Based Rate as the Applicable Interest
                Rate
                for a [_____] one (1) / [_____] two (2) / [_____] three (3) / [_____]
                six
                (6) month LIBOR Period;

            

    

     

    
      	 	
              (c)

            	
              [_____]
                convert the Loan to a Based Rate Loan as the Applicable Interest
                Rate;

            

    

     

    
      	 	
              (d)

            	
              [_____]
                convert the Loan to a LIBOR-Based Rate as the Applicable Interest
                Rate for
                a [_____] one (1) / [_____] two (2) / [_____] three (3) / [_____]
                six (6)
                month LIBOR Period.

            

    

     

    Borrower
      certifies that:

     

    
      	 	
              (1)

            	
              after
                giving effect to any continuation or conversion of the Loan, all
                the
                requirements contained in the Notes and the Loan Agreement applicable
                thereto are satisfied;

            

    

     

    
      	 	
              (2)

            	
              the
                representations and warranties contained in the Loan Agreement and
                the
                other Loan Documents are true and correct in all material respects
                on and
                as of the date hereof to the same extent as though made on and as
                of the
                date hereof, except to the extent such representations and warranties
                specifically relate to an earlier date, in which case such representations
                and warranties were true and correct in all material respects on
                and as of
                such earlier date; and

            

    

     

    
      	 	
              (3)

            	
              no
                event has occurred and is continuing or would result from the consummation
                of the continuation or conversion contemplated hereby that would
                constitute an Event of Default.

            

    

    

    

    

    [Signature
      Page Follows]

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    DATED:
      ________________

    BORROWER:

    

    THE
      CHALETS AT THE LODGE AT VAIL, LLC, a Colorado limited liability company

    

    

    
      	 	
              By:

            	
              Vail
                Resorts Development Company, a Colorado corporation, its Managing
                Member

            

    

    

    

    By: 

    Name: 

    Its:     

    Exhibit
      H

     

    Request
      for Loan Advance

    

    

     

    REQUEST
      FOR LOAN ADVANCE

     

    Re: WELLS
      FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Loans in the
      aggregate amount of $[__________] to [__________]

     

    Project: The
      Chalets at the Lodge at Vail, LLC 

     

    Ladies
      and Gentlemen:

     

    Reference
      is made to that certain Construction Loan Agreement dated March __, 2007 among
      WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, certain lenders
      party thereto and the undersigned (the "Construction
      Loan Agreement").
      Terms
      not defined in this Request for Loan Advance shall have the same meaning as
      in
      the Construction Loan Agreement.

     

    This
      Request for Loan Advance (a) is request No. _______ under the Construction
      Loan
      Agreement, (b) constitutes Borrower’s request to borrow Loans in the amounts and
      in the manner set forth below and (c) is otherwise subject to the terms of
      the
      Construction Loan Agreement. The information relating to the proposed Loans
      is
      as follows:

     

    
      	 	
              1.

            	
              The
                date of the proposed Loans is _________ __,
                _____.

            

    

     

    
      	 	
              2.

            	
              The
                aggregate amount of the proposed Loans (after deducting an aggregate
                Retainage of $__________) is
                $_________.

            

    

     

    
      	 	
              3.

            	
              The
                aggregate amount of the proposed Loans which are to bear interest
                as LIBOR
                Rate Loans is $__________. 

            

    

     

    
      	 	
              4.

            	
              The
                aggregate amount of the proposed Loans which are to bear interest
                at Base
                Rate Loans is $__________.

            

    

     

    
      	 	
              5.

            	
              The
                aggregate amount of Loans requested hereunder, when added to prior
                (if
                any) Loans funded under the Construction Loan Agreement, will result
                in
                total Loans outstanding under the Construction Loan Agreement of
                $__________.

            

    

     

    
      	 	
              6.

            	
              Funds
                undrawn under the aggregate Commitments after giving effect to the
                Loans
                requested hereunder will then be
                $__________.

            

    

     

    Attached
      to this Request for Loan Advance are the following items:

     

    
      	 	
              A.

            	
              To
                the extent not previously delivered to Administrative Agent, for
                funds due
                under the General Contract, copies of the General Contractor’s invoices
                relating to payments requested under this Request for Loan Advance,
                together with paid invoices evidencing payment of funds previously
                advanced to the General Contractor pursuant to Loans, provided, however,
                presentation of invoices shall not be required when the amount of
                the
                payment requested from the proceeds of the Advance is less than $250,000;
                in those circumstances, presentation of general ledger entries evidencing
                the amount due shall be sufficient;

            

    

     

    
      	 	
              B.

            	
              To
                the extent not previously delivered to Administrative Agent, for
                funds
                paid directly by Borrower, copies of all invoices relating to payments
                requested under this Request for Loan Advance, together with paid
                invoices
                evidencing payment of funds previously advanced to Borrower pursuant
                to
                Loans, provided,
                however,
                presentation of invoices shall not be required when the amount of
                the
                payment requested from the proceeds of the Advance is less than $250,000;
                in those circumstances, presentation of general ledger entries evidencing
                the amount due shall be sufficient;

            

    

     

    
      	 	
              C.

            	
              Copy
                of the Project Budget attached as Exhibit 1
                hereto, showing the portion of each budget line item comprising the
                aggregate Loans subject to this request and any Retainage with respect
                thereto, and the total of all Loans to date, inclusive of the Loans
                subject to this request;

            

    

     

    
      	 	
              D.

            	
              Copies
                of sworn unconditional lien wavers from each trade contractor,
                subcontractor, materialman, supplier and vendor (each a “Subcontractor”)
                who is to be paid from the proceeds of this Advance, to the extent
                not
                previously delivered to Administrative Agent releasing any right
                to a lien
                through a date not more than 30 days prior to the date hereof. Lien
                waivers shall not be required from any Subcontractor when the amount
                to be
                paid to such Subcontractor from the proceeds of the Advance is less
                than
                $25,000 and the aggregate amount paid to such Subcontractor is less
                than
                $100,000;

            

    

     

    
      	 	
              E.

            	
              Borrower’s
                Architect’s Certificate for Payment in accordance with AIA Document
                G-702;

            

    

     

    
      	 	
              F.

            	
              Requisition
                form duly executed by the General Contractor;
                and

            

    

     

    
      	 	
              G.

            	
              Copies
                of all other documents required pursuant to Article
                VI
                and Article
                VII
                of
                the Construction Loan Agreement.

            

    

     

    In
      connection with this advance, Borrower hereby certifies that the following
      are
      true and correct:

     

    
      	 	
              (a)

            	
              The
                facts set forth in the General Contractor’s invoices and in Exhibit
                1;

            

    

     

    
      	 	
              (b)

            	
              Except
                for contractors, subcontractors, materialmen, suppliers or vendors
                who are
                to be paid from proceeds of the Loans requested hereunder, there
                is no
                outstanding Indebtedness of the undersigned for labor, wages or materials
                in connection with the construction of the Improvements which is
                currently
                due and which could become the basis of a Lien on the
                Project;

            

    

     

    
      	 	
              (c)

            	
              All
                sums previously requisitioned have been applied to the payment of
                the Hard
                Costs and the Soft Costs heretofore incurred;

            

    

     

    
      	 	
              (d)

            	
              All
                Change Orders have been submitted to Administrative Agent and the
                Construction Consultant and all Change Orders for which a Loan is
                requested hereby have been approved by Administrative Agent and the
                Construction Consultant to the extent required by the Construction
                Loan
                Agreement;

            

    

     

    
      	 	
              (e)

            	
              In
                the judgment of Borrower, the Improvements are _____%
                complete;

            

    

     

    
      	 	
              (f)

            	
              Borrower
                is not in Default under any of the terms and conditions of the Loan
                Documents;

            

    

     

    
      	 	
              (g)

            	
              After
                giving effect to this advance, the Loans will remain In Balance in
                accordance with Section 7.2
                of
                the Construction Loan Agreement, and all conditions to this advance
                have
                been satisfied in accordance with Section 7.1
                of
                the Construction Loan Agreement;

            

    

     

    
      	 	
              (h)

            	
              Each
                representation and warranty of Article
                VIII
                of
                the Construction Loan Agreement remains true and correct in all material
                respects as of the date of this Request for Loan Advance and will
                be so on
                the date of disbursement of the requested Loan, except with respect
                to (i)
                matters which have been disclosed in writing to and approved by
                Administrative Agent (subject, however, to the terms of the Construction
                Loan Agreement) or (ii) liens of mechanics and materialmen and matters
                addressed in Section 8.5
                of
                the Construction Loan Agreement, which would not, if adversely decided,
                have a Material Adverse Effect;

            

    

     

    
      	 	
              (i)

            	
              No
                litigation or arbitral proceedings are pending or, to the best of
                Borrower’s knowledge, threatened against Borrower, any Guarantor or the
                Manager, which could or might (i) affect the validity or priority
                of the
                liens of the Security Instrument or (ii) or, if adversely decided,
                would
                reasonably be expected have a Material Adverse Effect;
                and

            

    

     

    
      	 	
              (j)

            	
              All
                Government Approvals, to the extent then required for the Construction
                Work, have been obtained and that all Applicable Laws relating to
                the
                construction and operation of the Project have been and will continue
                to
                be complied with.

            

    

     

    
      	 	
              (k)

            	
              Borrower
                has contributed the required Initial Equity
                Contribution.

            

    

     

    The
      undersigned requests that the requested Loans be advanced by depositing the
      same
      into Borrower’s Account No. __________. The person signing this Request for Loan
      Advance on behalf of Borrower represents and warrants to you that such person
      is
      authorized to execute this letter on behalf of Borrower.

     

    BORROWER:

     

    THE
      CHALETS AT THE LODGE AT VAIL, LLC, a Colorado limited liability company

     

    
      	 	
              By:

            	
              Vail
                Resorts Development Company, a Colorado corporation, its Managing
                Member

            

    

    

    

    By: 

    Name: 

    Its: 

    

    

    ACKNOWLEDEGMENT

     

    Each
      representation and warranty contained in the Representation Agreement remains
      true and correct in all material respects as of the date of this Request for
      Loan Advance.

     

    GUARANTOR:

     

    VAIL
      RESORTS, INC., a Delaware corporation

    

    

    By: 

    Its: 

    

    

    THE
      VAIL
      CORPORATION, a Colorado corporation

    

    

    By: 

    Its: 

    

    Exhibit
      I

     

    Form
      of Deposit Letter of Credit

    IRREVOCABLE
      LETTER OF CREDIT

    

    

    [Address]

    

    

    BENEFICIARY:

    

    Wells
      Fargo Bank, National Association, Letter
      of Credit No.    

    as
      Administrative Agent

    4643
      S.
      Ulster, Suite 1400    Date:     

    Denver,
      CO 80237

    Attention:  Mr.
      John W. McKinny

     

    Issued
      at the Request of 

    The
      Chalets at the Lodge at Vail, LLC

    c/o
      Vail
      Resorts Development Co.

    390
      Interlocken Crescent, Suite 1000

    Broomfield,
      CO 80021

     

     

    

    Ladies
      and Gentlemen:  

    

    For
      the
      account of The Chalets at the Lodge at Vail, LLC, a Colorado limited liability
      limited partnership (the "Borrower") we hereby establish our Irrevocable Letter
      of Credit in your favor in the amount of ______________
      and NO/100 United States Dollars (US$_______)
      available with us at our above office by payment of your draft drawn on us
      at
      sight.

    

    Partial
      drafts may be drawn and presented under this Letter of Credit. 

    

    The
      draft
      must be marked "Drawn under Letter of Credit No. ________." 

    

    The
      draft
      must also be accompanied by (1) the original of this Letter of Credit for our
      endorsement on this Letter of Credit of our payment of such draft and (2) a
      certification from the Beneficiary that an Event of Default under the Loan
      Agreement dated as of March ___, 2007, between the Borrower and Beneficiary
      (the
      "Loan Agreement"), has occurred and is continuing, and that Beneficiary is
      entitled to draw on this Letter of Credit.

    

    This
      Letter of Credit is transferable, without charge, one or more times, but in
      each
      instance to a single transferee and only in the full amount available to be
      drawn under this Letter of Credit at the time of such transfer. Any such
      transfer may be effected only through ourselves and upon presentation to us
      at
      our above-specified office of a duly executed instrument of transfer in the
      form
      attached to this Letter of Credit as Exhibit A. Any transfer of this Letter
      of
      Credit may not change the place of expiration of this Letter of Credit from
      our
      above-specified office. Each transfer shall be evidenced by our endorsement
      on
      the reverse of the original of this Letter of Credit, and we shall deliver
      the
      original of this Letter of Credit so endorsed to the transferee. 

    

    This
      Letter of Credit expires at our above-specified office on __________, 2008,
      but
      shall be automatically extended,
      without
      written amendment, for a one or more one year period unless on or before
      _________, 2008 or each one year anniversary thereafter we have sent written
      notice to you at your address above by registered mail or express courier that
      we elect not to renew this Letter of Credit beyond each one year anniversary.
      In
      no event will this letter of credit extend beyond October 1, 2009.

     

    Upon
      your
      receipt of such notice, you may draw hereunder, the then credit amount
      available, by presentation to us of your sight draft drawn on us bearing the
      clause: "Drawn under Letter of Credit No. _________."

    

    This
      credit sets forth in full terms of our obligation to you, and such undertaking
      shall not in any way be modified or amplified by any agreement in which this
      credit is referred to or to which the credit relates, and any such reference
      shall not be deemed to incorporate herein by reference any
      agreement.

    

    We
      engage
      with you that your draft drawn under and in compliance with the terms of the
      credit will be duly honored. 

    

    This
      letter of credit is subject to the Uniform Customs and Practice for Documentary
      Credits (1993 Revision) International Chamber of Commerce, Publication No.
      500
      ("UCP") and engages us in accordance with the terms thereof; provided, however,
      that notwithstanding the provisions of Article 17 of the UCP, if this Letter
      of
      Credit expires during an interruption of business (as described in Article
      17 of
      the UCP), we agree to effect payment under this Letter of Credit if a drawing
      which strictly conforms to the terms and conditions of this Letter of Credit
      is
      made within 15 days after the resumption of business.

    

    

    Very
      truly yours,

    

     

    

    

    

    By:_____________________  

    (Authorized
      Signature)

     

    

    

    

    

    

    

    

    

    

    Exhibit
      A
      to 

    Irrevocable
      Letter of Credit

     

    

     

    Date:
      _______________

     

    [Bank
      Address]

    

    Subject:
      Your Letter of Credit No. _________

    

    Ladies
      and Gentlemen:

    

    For
      value
      received, we hereby irrevocably assign and transfer all our rights under the
      above-captioned Letter of Credit, as heretofore and hereafter amended, extended
      or increased, to:

    

    _________________________

    [insert
      name of transferee]

    

    _________________________

    

    _________________________

    [insert
      address]

    

    By
      this
      transfer, all of our rights in the Letter of Credit are transferred to the
      transferee, and the transferee shall have sole rights as beneficiary under
      the
      Letter of Credit, including sole rights relating to any amendments, whether
      increases or extensions or other amendments, and whether now existing or
      hereafter made. You are hereby irrevocably instructed to advise future
      amendment(s) of the Letter of Credit to the transferee without our consent
      or
      notice to us.

    

    Enclosed
      are the original Letter of Credit and the original of all amendments to this
      date. Please notify the transferee of this transfer and of the terms and
      conditions of the Letter of Credit as transferred. This transfer will not become
      effective until the transferee is so notified.

    

    Very
      truly yours,

    

    [insert
      name of transferor]

    

    By:
      ___________________________

    Name:
      _________________________

    Title:
      __________________________

    

    Signature
      of Transferor Guaranteed

    [insert
      name of bank]

    By:
      ______________________________

    Name:
      __________________________

    Title:
      __________________________ 

    

    

    Exhibit
      J

     

    Transfer
      Authorizer Designation

     

    

    TRANSFER
      AUTHORIZER DESIGNATION

    (For
      Disbursement of Loan Proceeds by Funds Transfer)

    

    

    o NEW
       o REPLACE
      PREVIOUS DESIGNATION o ADD
       o CHANGE 

    o DELETE
      LINE NUMBER
      _____

    

    The
      following representatives of THE CHALETS AT THE LODGE AT VAIL, LLC
      ("Borrower")
      are
      authorized to request the disbursement of Loan Proceeds and initiate funds
      transfers for Loan Number _______ dated March ___, 2007, between Wells Fargo
      Bank, National Association ("Bank")
      and
      Borrower. Bank is authorized to rely on this Transfer Authorizer Designation
      until it has received a new Transfer Authorizer Designation signed by Borrower,
      even in the event that any or all of the foregoing information may have
      changed.

    

    
      	 	
               

              Name

            	
               

              Title
                

            	
              Maximum
                Wire 

              Amount1 

            
	
               

              1.

               

            	 	 	 
	
               

              2.

               

            	 	 	 
	
               

              3.

               

            	 	 	 
	
               

              4.

               

            	 	 	 
	
               

              5.

               

            	 	 	 

    

    
      Beneficiary
        Bank and Account Holder Information

    

     

    

    

    1.
      

    
      	
              Transfer
                Funds to (Receiving Party Account Name):

            
	
              Receiving
                Party Account Number: 

            
	
              Receiving
                Bank Name, City and State: 

               

            	
              Receiving
                Bank Routing (ABA) Number 

            
	
              Maximum
                Transfer Amount: 

            	 
	
              Further
                Credit Information/Instructions: 

               

            

    

    

    2.

    
      	
              Transfer
                Funds to (Receiving Party Account Name):

            
	
              Receiving
                Party Account Number: 

            
	
              Receiving
                Bank Name, City and State: 

               

            	
              Receiving
                Bank Routing (ABA) Number 

            
	
              Maximum
                Transfer Amount: 

            	 
	
              Further
                Credit Information/Instructions: 

               

            

    

    3.

    
      	
              Transfer
                Funds to (Receiving Party Account Name):

            
	
              Receiving
                Party Account Number: 

            
	
              Receiving
                Bank Name, City and State: 

               

            	
              Receiving
                Bank Routing (ABA) Number 

            
	
              Maximum
                Transfer Amount: 

            	 
	
              Further
                Credit Information/Instructions: 

               

            

    

    

        1
      Maximum Wire Amount may not exceed the Loan Amount.

    

    

    Date:
      March _____, 2007    BORROWER:

     

    THE
      CHALETS AT THE LODGE AT VAIL, LLC, a Colorado limited liability company

     

    
      	 	
              By:

            	
              Vail
                Resorts Development Company, a Colorado corporation, its Managing
                Member

            

    

    

    

    By: 

    Name: 

    Its: 

    

     

    

    

      

    

     

    Exhibit
      K

     

    Anticipated
      Encumbrances 

     

    

    
      	(i)  	
              Additional
                replatting(s) pursuant to the Subdivision, Conveyance and Construction
                Agreement, and as necessary or appropriate to establish separate
                legal
                descriptions for the Residential Component, Club Component, Retail/Resort
                Services Component, and Shared Parking Garage
                Component.

            

    

     

    
      	(ii)  	
              Loading/Delivery
                Easement Agreement between Borrower and the Town of Vail affecting
                the
                Shared Parking Access Component, to be made pursuant to the requirements
                of the Development Agreement with the Town of
                Vail.

            

    

     

    
      	(iii)  	
              Utility
                easements made with utility providers and similar instruments made
                in the
                ordinary course of the development of the
                Project.

            

    

     

    
      	(iv)  	
              Implementation
                of ownership structure for the Residential
                Component.

            

    

     

    
      	(a)  	
              Condominium
                Declaration, and supplements
                thereto.

            

    

     

    
      	(b)  	
              Condominium
                Map, and supplements thereto.

            

    

     

    
      	(c)  	
              Access
                and Support Easement Agreement, which, among other things, gives
                the
                Residential Component access easement rights over the Project surface
                road.

            

    

     

    
      	(v)  	
              Licenses
                for Spa access:

            

    

     

    
      	(a)  	
              in
                favor of the Residential Component.

            

    

     

    
      	(b)  	
              in
                favor of the Club Component.

            

    

     

    
      	(vi)  	
              License
                in favor of Residential Component for Club
                access.

            

    

     

     

    Compliance
      with the requirements of and carrying out the transactions contemplated by
      the
      Development Agreements.

    

    

    

    Schedule
      6.1

     

    Closing
      Conditions

     

    (a) Title
      Insurance.
      An
      unconditional and irrevocable commitment from the Title Company to issue the
      Title Policy. The Title Policy and all endorsements thereto shall be approved
      by
      Administrative Agent in its reasonable discretion. In addition, Borrower shall
      have paid to the Title Company all expenses and premiums of the Title Company
      in
      connection with the issuance of such policies as and when required by the Title
      Company and all recording, mortgage taxes and filing fees payable in connection
      with recording the Security Instrument and the filing of the Uniform Commercial
      Code financing statements related thereto in the appropriate
      offices.

     

    (b) Opinion
      of Borrower’s and Each Borrower Party’s Attorneys.
      A
      current written opinion from outside counsel for Borrower covering matters
      in
      scope, form and substance acceptable to Administrative Agent.

     

    (c) Qualified
      Purchase Contracts.
      Copies
      of all Qualified Purchase Contracts in effect with respect to the Residential
      Component.

     

    (d) Survey.
      An ALTA
      survey of the Land certified to Administrative Agent, Title Company and their
      successors and assigns, acceptable to Administrative Agent in its reasonable
      discretion, made by a registered land surveyor satisfactory to Administrative
      Agent, showing, through the use of course bearings and distances, (i) all
      foundations of the Improvements and driveways, if any, in place; (ii) all
      easements and roads or rights of way and setback lines, if any, affecting the
      Improvements and that the same are unobstructed; (iii) except as set forth
      in
      the Plans and Specifications, all foundations and other structures, if any,
      so
      placed that the Improvements are within the lot lines or applicable easements
      and in compliance with any restrictions of record or ordinances relating to
      the
      location thereof; (iv) the dimensions of all existing buildings and distance
      of
      all material Improvements from the lot lines; (v) any encroachments by
      improvements located on adjoining property; (vi) access to a public road; and
      (vii) such additional information which may be required by Administrative Agent.
      Said survey shall be dated a date required by Administrative Agent, bear a
      certificate in an acceptable form, and include the legal description of the
      Land.

     

    (e) Organizational
      Documents; Resolutions.
      Copies
      of all Organizational Documents for each Borrower Party and appropriate
      resolutions authorizing such parties to enter into and perform under the
      applicable Loan Documents, each certified to be true and correct by an
      Authorized Officer of such Borrower Party and each in form and content
      reasonably acceptable to Administrative Agent, and evidence of the good standing
      of each Borrower Party issued by the applicable Governmental Authority where
      such Borrower Party is organized.

     

    (f) Project
      Documents.
      A
      schedule of the Project Documents. A certificate of Borrower executed by an
      Authorized Officer certifying that (i) each of the Project Documents has been
      duly executed and delivered by each Person that is a party thereto and is in
      full force and effect; (ii) neither Borrower nor, to the best of Borrower’s
      knowledge, any other Person which is party to any of the Project Documents,
      is
      in default thereunder beyond any applicable cure and notice periods; (iii)
      no
      term or condition thereof shall have been Modified or waived without the prior
      consent of Administrative Agent; and (iv) a true and correct copy of each such
      Project Document.

     

    (g) Violations.
      Municipal searches showing no violations of Applicable Law with respect to
      any
      portion of the Project; and if violations are shown, then Administrative Agent
      must have received (in Administrative Agent’s sole discretion) either
      satisfactory evidence of the curing of the same or such undertakings,
      indemnities, escrow deposits or affidavits relating thereto as Administrative
      Agent shall require.

     

    (h) Insurance.
      A
      certified copy of the insurance policies required by Section 9.5
      or
      certificates of insurance with respect thereto, such policies or certificates,
      as the case may be, to be in form and substance, and issued by companies
      reasonably acceptable to Administrative Agent and otherwise in compliance with
      the terms of Section 9.5,
      together with evidence of the payment of all premiums therefore.

     

    (i) Lien
      Waivers.
      Sworn
      partial waivers of liens from Major Subcontractors covering all work and
      materials performed or supplied prior to the Closing Date (if any).

     

    (j) Plans
      and Specifications.
      The
      final Plans and Specifications, together with any required Governmental
      Approvals related thereto and sealed by the applicable Design
      Professionals.

     

    (k) Construction
      Schedule.
      The
      Construction Schedule, including evidence reasonably satisfactory to
      Administrative Agent that the Construction Work is proceeding on time and on
      budget.

     

    (l) Construction
      Status.
      The
      most recent General Contractor’s progress payment request approved by the
      Developer showing the percentage of completion, the amount funded and Change
      Order status.

     

    (m) Design
      Professionals’ Certificates.
      Certificates of Borrower’s Architect, or other appropriate Design Professional,
      in favor of Administrative Agent (on behalf of the Lenders) (the "Architect
      Certificates"),
      or
      other evidence satisfactory to Administrative Agent, that to the best of the
      Design Professional’s knowledge (i) the Plans and Specifications are in full
      compliance with all applicable building code and environmental, health and
      safety laws, statutes, regulations and requirements; (ii) the Plans and
      Specifications are full and complete in all respects and contain all details
      necessary for the Base Building Work; (iii) all Government Approvals to the
      extent presently necessary for the Base Building Work have been issued; (iv)
      the
      gross square footage as shown on a Schedule attached to the certificate of
      the
      applicable Design Professional accurately reflects the gross square footage
      relating to the Plans and Specifications; (v) there exists or will exist
      adequate water, storm and sanitary sewerage facilities and other required public
      utilities, together with a means of ingress and egress to and from the Project
      over public streets; (vi) no building or parking structure to be constructed
      on
      the Project will exceed the height of any building permitted on the Project
      as
      of the Closing Date; and (vii) the Construction Schedule and the Project Budget
      are realistic and can be adhered to in completing the Base Building Work in
      accordance with the Plans and Specifications. 

     

    (n) Initial
      Equity.
      A
      certificate of an Authorized Officer of Borrower certifying that Borrower shall
      have provided the Initial Equity and itemizing the uses of the Initial Equity,
      such certificate to be accompanied by backup materials evidencing such Initial
      Equity and the use of same.

     

    (o) UCC
      Searches.
      Uniform
      Commercial Code searches with respect to Borrower and each Borrower Party,
      the
      Managing Member and each Guarantor as required by Administrative
      Agent.

     

    (p) Non-Foreign
      Status.
      A
      certificate by an Authorized Officer of Borrower certifying Borrower’s tax
      identification number and the fact that it is not a foreign person under the
      Code.

     

    (q) Standard
      Forms.
      Standard forms of agreements and/or leases with respect to the Commercial
      Component.

     

    (r) Contractor’s
      Agreement.
      A copy
      of the fully executed GMP Agreement with Shaw Construction.

     

    (s) Architect’s
      Agreement.
      A copy
      of the fully executed Architect’s Agreement.

     

    (t) Other
      Documents.
      Such
      other documents as Administrative Agent may reasonably request.

    

    

    Schedule
      6.2

    

     

    Conditions
      to Loans

     

    (a) Title
      Continuation.
      Administrative Agent shall have received a notice of title continuation or
      a
      Date Down Endorsement to the Title Policy indicating that since the last
      preceding Loan, there has been no change in the state of title and no new
      adverse survey exceptions have been raised by the Title Company not theretofore
      approved by Administrative Agent, which Date Down Endorsement shall have the
      effect of increasing the coverage of the Title Policy (including full coverage
      against mechanic’s liens) by an amount equal to the advance then made if the
      Title Policy does not by its own terms provide for such an increase. If any
      mechanics’ liens are filed against the Project, Borrower shall use commercially
      reasonable efforts to cause such liens to be discharged by payment or other
      shall mean; provided,
      however,
      that if
      such mechanics’ liens are less than $250,000 in the aggregate, Borrower may
      elect to cause the Title Company to provide affirmative coverage over such
      liens
      insuring against “any statutory lien for services, labor or materials furnished
      or contracted for prior to the date hereof [i.e., the date of such endorsement]
      (or any statutory lien for services, labor or materials furnished after the
      date
      hereof, the priority of which lien relates back to services, labor or materials
      furnished or contracted for prior to the date hereof), and which has now gained
      or which may hereafter gain priority over the estate or interest of the insured
      as shown in Exhibit A
      of this
      policy”; and provided further, however, that, Borrower shall obtain a bond
      reasonably acceptable to Administrative Agent to cover all mechanics’ liens that
      exceed $1,000,000 in the aggregate of all such liens;

     

    (b) Lien
      Waivers.
      Unconditional waivers of lien from Major Subcontractors covering all work for
      which funds have been advanced pursuant to a prior disbursement and, at
      Administrative Agent’s election, conditional waivers of lien from Major
      Subcontractors covering all work of such Persons for which funds are being
      advanced pursuant to the then current Request for Loan Advance, all in
      compliance with the Lien Law together with such invoices, contracts, or other
      supporting data as Administrative Agent may reasonably require to evidence
      that
      all Project Costs for which disbursement is sought have been
      incurred;

     

    (c) Change
      Orders.
      Copies
      of any material Change Orders which have not been previously furnished to
      Administrative Agent and the Construction Consultant;

     

    (d) Contracts.
      Copies
      of all Major Subcontracts which have been executed or Modified since the last
      Loan, together with (i) a certificate by an Authorized Officer of Borrower
      certifying that the delivered items are true, accurate and complete copies
      and
      (ii) Consents and Agreements in the applicable form attached to the General
      Assignment from any Major Subcontractors who have executed a Major Subcontract
      not previously delivered;

     

    (e) Stored
      Materials.
      Inventory of materials and equipment stored on the Project; 

     

    (f) Testing
      Reports.
      Testing
      reports for materials-in-place as applicable;

     

    (g) Governmental
      Approvals.
      Copies,
      certified by an Authorized Officer of Borrower, of all required Governmental
      Approvals (to the extent required as of such date) not previously delivered
      to
      Administrative Agent;

     

    (h) Contract
      Disputes.
      If any
      material dispute arises between or among Borrower, the General Contractor or
      any
      Major Subcontractor, a written summary of the nature of such
      dispute;

     

    (i) Project
      Budget Amendments.
      If the
      Project Budget shall have been Modified, copies of all such Modifications,
      all
      of which shall be subject to Administrative Agent’s review and approval in
      accordance with this Agreement Administrative Agent Borrower;

     

    (j) Updated
      Survey and Title Endorsement.
      Promptly after the completion of the construction of the foundation of the
      Base
      Building Work, Borrower shall provide to Administrative Agent a current survey
      of the Project showing all Improvements located thereon and complying with
      the
      requirements set forth in Schedule
      6.1(d)
      and
      shall obtain a foundation endorsement to the Title Policy in form satisfactory
      to Administrative Agent insuring that, except as set forth on the Plans and
      Specifications, all foundations are located within applicable property and
      setback lines and do not encroach upon any easements or rights of way;
      and

     

    (k) Insurance.
      To the
      extent not previously delivered to Administrative Agent, evidence showing
      compliance with the provisions of Section 9.5.

     

    (l) Additional
      Project Documents and Plans and Plans and Specifications.
      To the
      extent not previously received and approved by Administrative Agent,
      Administrative Agent shall have received and approved all Project Documents
      and
      all Plans and specifications relating to the aspect of the Improvements for
      which such Loan is being requested.

     

    (m) Other
      Documents.
      Such
      other documents and items as Administrative Agent may reasonably
      request.

     

    

     

    

     

    

     

    Schedule
      6.3

     

    Conditions
      to Final Loans

     

    (a) Approval
      by Governmental Authority.
      Evidence of the approval by the applicable Governmental Authorities of the
      Base
      Building Work in its entirety for operation to the extent any such approval
      is a
      condition of the lawful use of the Base Building Work, including, without
      limitation, valid certificates of occupancy (or other evidence) to the extent
      required for the Base Building Work, which core and shell certificates of
      occupancy (or other evidence) may be temporary core and shell certificates
      of
      occupancy;

     

    (b) Survey.
      A final
      as-built survey covering the completed Base Building Work and any paving,
      driveways and exterior improvements and otherwise in compliance with
Schedule 6.1(d),
      together with an endorsement to the Title Policy amending any survey exception
      to reflect such final survey;

     

    (c) Plans
      and Specifications.
      To the
      extent available, a full and complete certified set of “as built” Plans and
      Specifications for the Base Building Work; 

     

    (d) Lien
      Waivers.
      Conditional waivers of lien and sworn statements from all (i) contractors and
      subcontractors and (ii) any materialmen, suppliers and vendors with respect
      to
      the Base Building Work, and Borrower shall deliver final waivers of lien and
      sworn statements from all such parties to Administrative Agent within sixty
      (60)
      days thereafter;

     

    (e) Design
      Professionals’ Certificates.
      Certificates from the Architect stating that, to the best of Architect’s
      knowledge, (i) the Base Building Work (1) has been substantially completed
      in
      accordance with the Plans and Specifications, (2) the Improvements are
      structurally sound (the certification as to structural soundness to be made
      by
      the structural engineer only) and (3) except for tenant improvements to rentable
      space in the Commercial Component that is not yet occupied is available for
      occupancy (subject to completion of Punch List Items), and (ii) the Improvements
      as so completed comply with all applicable building codes;

     

    (f) Testing
      Engineer Statement.
      Statement from the testing engineer performing construction materials testing
      indicating that all Base Building Work was performed according to the Plans
      and
      Specifications;

     

    (g) Violation
      Searches.
      If
      available and requested by Administrative Agent, violation searches with
      Governmental Authorities indicating no notices of violation have been issued
      with respect to the Project;

     

    (h) UCC
      Searches.
      Current
      searches of all Uniform Commercial Code financing statements filed with the
      Secretary of State of the State of Colorado and of the state of
      formation/organization of Borrower, showing that no Uniform Commercial Code
      financing statements are filed or recorded against Borrower in which the
      collateral is personal property or fixtures located on the Project or used
      in
      connection with the Project other than financing statements with respect to
      the
      Loans;

     

    (i) Borrower’s
      Certificate.
      A
      certificate of an Authorized Officer of Borrower certifying that:

     

    (i) no
      condemnation of any portion of the Project or any action which could result
      in a
      relocation of any roadways abutting the Project or the denial of access, which,
      in Administrative Agent’s sole judgment, adversely affects the Lenders’ security
      or the operation of the Project, has commenced or, to the Borrower’s Knowledge,
      is contemplated by any Governmental Authority;

     

    (ii) all
      fixtures, attachments and equipment necessary for the operation of the Base
      Building Work have been installed or incorporated into the Project and are
      operational; all Guaranties and warranties have been transferred/assigned to
      Borrower; and, that Borrower is the absolute fee owner of all of said property
      free and clear of all chattel mortgages, conditional vendor’s liens and other
      liens, encumbrances and security interests, and that all of said property is
      in
      good working order, free from defects; and

     

    (iii) all
      Project Costs relating to the Construction Work have been paid in full except
      (1) to the extent covered by the final Loans then being requested and (2)
      amounts for Hard Costs which Borrower is disputing in good faith and with due
      diligence; provided that Administrative Agent may, in its sole discretion,
      hold
      back an amount equal to (x) 150% of the disputed amount minus (y) any Retainage
      that Administrative Agent is still holding with respect to the applicable Hard
      Costs and (3) amounts held by Administrative Agent with respect to Punch List
      Items with respect to the applicable Hard Costs.

     

    (j) Engineering
      Report.
      At
      Borrower’s expense, a report from the Construction Consultant, satisfactory in
      form and content to Administrative Agent, which shall verify that the Base
      Building Work has been completed in accordance with the Plans and
      Specifications, approved by the appropriate Governmental Authorities and that
      the Project, and the Improvements constructed thereon, satisfy all Applicable
      Law.

    

    

     

    

    

     

    Schedule
      8.5

     

    

     

    Pending
      Litigation

     

    

     

    None

    

    

     

    Schedule
      8.10

    

    Organizational
      Chart

    

    

     

    Schedule
      8.14

     

    

     

    Government
      Approvals

     

    Part
      A
      - Existing Approvals Obtained

     

    
      	(vii)  	
              Annexation
                to Town of Vail of the exchange parcel within the Property acquired
                from
                United States Forest Service

            

    

     

    
      	(viii)  	
              Town
                of Vail re-zonings to Ski Base Recreation 2 (SBR 2) Zone
                District

            

    

     

    
      	(ix)  	
              Town
                of Vail approval of the Development Plan under applicable
                zoning

            

    

     

    
      	(x)  	
              Town
                of Vail approval of and entry into its Development
                Agreement

            

    

     

    
      	(xi)  	
              Town
                of Vail Design Review Board (DRB) approvals in relation to existing
                Plans
                and Specifications

            

    

     

    
      	(xii)  	
              Town
                of Vail grading and building permits for existing Plans and
                Specifications

            

    

     

    
      	(xiii)  	
              HUD
                registration approval for Residential
                Component

            

    

     

    Part
      B
      - Approvals to be Obtained at a Later Date

     

    
      	(xiv)  	
              Town
                of Vail DRB approvals for any Modifications to Plans and
                Specifications

            

    

     

    
      	(xv)  	
              Town
                of Vail building permit(s) for any Modifications to Plans and
                Specifications

            

    

     

    
      	(xvi)  	
              Town
                of Vail Temporary Certificates of
                Occupancy

            

    

     

    
      	(xvii)  	
              Town
                of Vail Certificates of Occupancy

            

    

     

    
      	(xviii)  	
              Town
                of Vail approvals of
                resubdivision(s)

            

    

     

    
      	(xix)  	
              Town
                of Vail approvals of condominium documents for Residential Component
                (Condominium Map and Declaration, and any amendments and supplements
                thereto)

            

    

     

     

    

     

    

     

    Schedule
      9.5

     

    Insurance
      Requirements

     

    Borrower
      shall, while any obligation of Borrower under any Loan Document remains
      outstanding, maintain at Borrower’s sole expense, with licensed insurers
      approved by Administrative Agent, the following policies of insurance in form
      and substance satisfactory to Administrative Agent. Capitalized terms used
      in
      this Article shall have the same meaning as such terms are commonly and
      presently defined in the insurance industry.

    

    TITLE
      INSURANCE. 

    A
      Title
      Policy, together with any endorsements which Administrative Agent may require,
      insuring Administrative Agent, for the benefit of Lenders, in the principal
      amount of the Loan, of the validity and the priority of the lien of the Deed
      of
      Trust upon the Property and Improvements, subject only to matters approved
      by
      Administrative Agent in writing. During the term of the Loan, Borrower shall
      deliver to Administrative Agent, within ten (10) days of Administrative Agent’s
      written request, such other endorsements to the Title Policy as Administrative
      Agent may reasonably require with respect to the Property.

    

    PROPERTY
      INSURANCE. 

    A
      Builders All Risk/Special Form Completed Value (Non-Reporting Form) Hazard
      Insurance policy, including without limitation, theft coverage and such other
      coverages and endorsements as Administrative Agent may require, insuring
      Administrative Agent, for the benefit of Lenders against damage to the Property
      and Improvements in an amount not less than 100% of the full replacement cost
      at
      the time of completion of the Improvements. Such coverage should adequately
      insure any and all Loan collateral, whether such collateral is onsite, stored
      offsite or otherwise. Administrative Agent, for the benefit of Lenders, shall
      be
      named on the policy as Mortgagee and named under a Lender’s Loss Payable
      Endorsement (form
      #438BFU or equivalent).

    

    FLOOD
      HAZARD INSURANCE. 

    A
      policy
      of flood insurance, as required by applicable governmental regulations, or
      as
      deemed necessary by Administrative Agent, in an amount required by
      Administrative Agent, but in no event less than the amount sufficient to meet
      the requirements of applicable law and governmental regulation.

    

    LIABILITY
      INSURANCE. 

    A
      policy
      of Commercial General Liability insurance on an occurrence basis, with coverages
      and limits as required by Administrative Agent, insuring against liability
      for
      injury and/or death to any person and/or damage to any property occurring on
      the
      Property and/or in the Improvements. During the period of any construction,
      Borrower may cause its contractors and/or subcontractors to maintain in full
      force and effect any or all of the liability insurance required hereunder.
      Administrative Agent may require that Borrower be named as an additional insured
      on any such policy. Whether Borrower employs a general contractor or performs
      as
      owner-builder, Administrative Agent may require that coverage include statutory
      workers’ compensation insurance.

    

    OTHER
      COVERAGE. 

    Borrower
      shall provide to Administrative Agent evidence of such other reasonable
      insurance in such reasonable amounts as Administrative Agent may from time
      to
      time request against such other insurable hazards which at the time are commonly
      insured against for property similar to the subject Property located in or
      around the region in which the subject Property is located. Such coverage
      requirements may include but are not limited to coverage for earthquake, acts
      of
      terrorism, business income, delayed business income, rental loss, sink hole,
      soft costs, tenant improvement or environmental.

    

    GENERAL.
      

    Borrower
      shall provide to Administrative Agent insurance certificates or other evidence
      of coverage in form acceptable to Administrative Agent, with coverage amounts,
      deductibles, limits and retentions as required by Administrative Agent. All
      insurance policies shall provide that the coverage shall not be cancelable
      or
      materially changed without 10 days prior written notice to Administrative Agent
      of any cancellation for nonpayment of premiums, and not less than 30 days prior
      written notice to Administrative Agent of any other cancellation or any
      modification (including a reduction in coverage). Administrative Agent, for
      the
      benefit of Lenders shall be named under a Lender’s Loss Payable
      Endorsement (form
      #438BFU or equivalent) on all insurance policies which Borrower actually
      maintains with respect to the Property and Improvements. All insurance policies
      shall be issued and maintained by insurers approved to do business in the state
      in which the Property is located and must have an A.M. Best Company financial
      rating and policyholder surplus acceptable to Administrative Agent.

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