CRYSTAL MOUNTAIN INC, DEFR14A, 1997-03-11

CRYSTAL MOUNTAIN INC
DEFR14A, 1997-03-11
MISCELLANEOUS AMUSEMENT & RECREATION

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CRYSTAL MOUNTAIN, INC.
ONE CRYSTAL MOUNTAIN BLVD.
CRYSTAL MOUNTAIN, WASHINGTON 98022

March 10, 1997

Dear Shareholder:

You are cordially invited to attend the Annual Meeting of shareholders (the
"Annual Meeting") of Crystal Mountain, Inc. (the "Company") at the Seattle
Marriott Hotel near SeaTac Airport, 3201 South 176th Street, Seattle, Washington
98188, at 7:30 p.m., on Tuesday, March 27, 1997.

At the Annual Meeting, you will be asked to consider and vote upon a
proposal to reorganize the Company and then to merge the Company with a
subsidiary ("Newco") of Boyne USA, Inc. ("Boyne"), resulting in Boyne acquiring
100% ownership of the Company. If the shareholders approve the Reorganization
Agreement and Agreement and Plan of Merger dated as of December 6, 1996, then:

- - the Company will make a distribution to the holders of shares of Class A
common stock ("Class A Shares") of, at the election of each holder of
Class A Shares, either cash or lift privileges in the form of membership
units in the newly established Crystal Mountain Founders' Club (the
"Club"), or a combination of cash and lift privileges in the form of Club
membership units, at the following rates:

a) one membership unit in the Club per Class A Share
OR
b) $154.48 in cash per Class A Share;

- - shareholders who fail timely to elect to receive Club memberships will be
deemed to have elected to receive only cash;

- - Club members will have perpetual lift privileges similar to those currently
associated with the Class A Shares; and

- - the Company's articles of incorporation will be amended to delete the lift
privileges associated with the Class A Shares ( together the
"Reorganization").

The day following the Reorganization, Newco will merge into the Company,
each Class A Share and each share of Class B common stock ("Class B Share")
will be converted into $65.52 in cash, payable to the shareholder, and each
share of Newco will be converted into a share of the Company (the "Merger"). As
a result of the Merger, the Company will immediately become a wholly-owned
subsidiary of Boyne. Neither holders of Class A Shares nor holders of Class B
Shares will be subject to any liability of the Company prior to or after the
Merger Time. Boyne will invest a minimum amount, which will be between $10
million and approximately $12.5 million, in ski area improvements over the next
ten years, at least $6 million of which must be invested by December 31, 2001.
The actual minimum amount to be invested will be determined by subtracting
certain costs, described in the accompanying Proxy Statement, from $15 million.

The details of the Reorganization and the Merger are described in the
attached Notice of Annual Meeting of Shareholders and Proxy Statement. As the
proposed transaction allows the holders of Class A Shares to choose (i) to
receive a membership interest in a Club whose members will enjoy lift privileges
similar to those associated

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with the Class A Shares, as well as cash, or (ii) to receive only cash, the
accompanying Notice and Proxy Statement should be carefully read in their
entirety and each shareholder should take care to review and complete the
attached proxy and distribution election materials. TO RECEIVE LIFT PRIVILEGES
IN THE FORM OF CLUB MEMBERSHIP UNITS, A HOLDER OF CLASS A SHARES MUST MAKE HIS
OR HER ELECTION PRIOR TO THE VOTE AT THE ANNUAL MEETING AND THE PROPOSED
TRANSACTIONS MUST BE APPROVED BY THE REQUIRED SHAREHOLDER VOTE. Directors to
replace those directors whose terms are ending will also be elected.

The Board of Directors of the Company believes the transaction described in
the attached notice and proxy statement is fair to the shareholders of the
Company and unanimously recommends that the shareholders of the Company vote (i)
for the proposal to approve the Reorganization Agreement and Agreement and Plan
of Merger and the Merger described therein and to amend the Company's articles
of incorporation; and (ii) for the proposed directors.

The Board does not take a position as to the fairness of the transaction to
Class A Share holders who do not elect to receive Club memberships in the
Reorganization. See "Shareholders Electing All Cash" at Page 17 of the enclosed
proxy statement.

Whether or not you attend the Annual Meeting, please complete, sign and
date the enclosed proxy card and distribution election form and return them
promptly in the enclosed postage-prepaid envelope. Your stock will be voted in
accordance with the instructions you have given in your proxy. If you attend
the Annual Meeting, you may vote in person if you wish, even though you
previously returned your proxy card. Your prompt cooperation will be greatly
appreciated.

We are planning informal shareholder discussions in advance of the formal
meeting of shareholders. The schedule is as follows:

March 15-16, 3-4 p.m. Crystal Conference Center (former Crystal Inn)
March 22-23, 3-4 p.m. Crystal Conference Center (former Crystal Inn)

March 18, 7:00 p.m. Ramada Inn, Tacoma
March 19, 7:00 p.m. Washington Athletic Club, Noble Auditorium, Seattle
March 20, 7 p.m. WestCoast Hotel, Bellevue

Sincerely,

/s/ Thomas F. Leonard /s/ Robert E. Carlson

Thomas F. Leonard Robert E. Carlson
President Chairman of the Board

PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD
AND THE ENCLOSED DISTRIBUTION ELECTION FORM.

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CRYSTAL MOUNTAIN, INC.
ONE CRYSTAL MOUNTAIN BLVD.
CRYSTAL MOUNTAIN, WASHINGTON 98022
MARCH 10, 1997
_____________________________

PROXY STATEMENT
TIME, DATE AND PLACE

This Proxy Statement is being furnished to shareholders of Crystal
Mountain, Inc., a Washington corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company (the "Board" or
"Director(s)") from holders of the Company's Class A common shares, $50 per
share par value (the "Class A Shares"), and Class B common shares, $20 per share
par value (the "Class B Shares"), for use at the Annual Meeting of Shareholders
of the Company scheduled to be held on Tuesday, March 27, 1997 at 7:30 p.m.,
Pacific Standard Time, at the Seattle Marriott Hotel near SeaTac Airport,
3201 South 176th Street, Seattle, Washington 98188 (the "Annual Meeting"). This
Proxy Statement will first be mailed to shareholders of the Company on or about
March 10, 1997.

MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING

At the Annual Meeting, the shareholders of the Company will consider and
vote upon a proposal to approve the Reorganization Agreement and Agreement and
Plan of Merger dated as of December 6, 1996 and the amendment of the Company's
articles of incorporation and the merger described therein, whereby: (i) the
Company will distribute to the holders of Class A Shares, at the election of
such holders, either cash in the amount of $154.48 per Class A Share or lift
privileges in the form of one membership unit in the Crystal Mountain Founders'
Club (the "Club") per Class A Share, or a combination of cash and lift
privileges in the form of Club membership units, (ii) the articles of
incorporation of the Company will be amended to remove the lift privileges from
the Class A Shares, (iii) CM Acquisition Corporation, a Washington corporation
("Newco") and a wholly-owned subsidiary of Boyne, will be merged with and into
the Company (the "Merger"), pursuant to which the Company will become a
wholly-owned subsidiary of Boyne USA, Inc. ("Boyne"), and each outstanding
Class A Share and Class B Share will be converted into the right to receive
$65.52 in cash and (iv) Boyne will make Qualified Expenditures (as defined
herein) of $15 million.

The shareholders will also elect Directors to replace those Directors whose
terms are expiring and transact such other business as may properly come before
the meeting or any adjournments thereof.

EFFECT OF THE PROPOSED TRANSACTION ON SHAREHOLDERS

If the proposed transactions are approved and consummated:

- - The Company will become a wholly-owned subsidiary of Boyne.

- - Each holder of Class A Shares who elects to receive lift privileges in the
form of at least 20 Club membership units PRIOR TO THE VOTE AT THE ANNUAL
MEETING will hold a Club membership entitling him or her to lift privileges
similar to those currently enjoyed by Class A shareholders, plus $65.52 per
share in cash. Alternatively, each holder of Class A Shares will receive
$220 per share in cash and will have no further lift privileges. Holders
may also make a combined election, receiving lift privileges in the form of
Club membership units with respect to some of their Class A Shares and cash
with respect to the remainder of their Class A Shares. Holders making a
mixed election will have lift privileges if they elect at least 20 Club
membership units.

- - Each holder of Class B Shares will receive $65.52 per share in cash.

NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
WITH RESPECT TO THE MATTERS DESCRIBED IN THIS PROXY STATEMENT OTHER THAN THOSE
CONTAINED HEREIN OR IN THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN. ANY
INFORMATION OR REPRESENTATIONS WITH RESPECT TO SUCH MATTERS NOT CONTAINED HEREIN
OR THEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.

_________________________________________
THE DATE OF THIS PROXY STATEMENT IS MARCH 10, 1997

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TABLE OF CONTENTS
Page
----

PROXY STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .i
TIME, DATE AND PLACE . . . . . . . . . . . . . . . . . . . . . . . . . . .i
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING . . . . . . . . . . . . . .i
EFFECT OF THE PROPOSED TRANSACTION ON SHAREHOLDERS . . . . . . . . . . . .i

TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

SUMMARY OF PROPOSAL I. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
THE REORGANIZATION AND MERGER. . . . . . . . . . . . . . . . . . . . . . .1
THE REORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . .1
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
BOARD RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . . . .2
BOARD PLANS SHOULD THE MERGER NOT BE CONSUMMATED . . . . . . . . . . . . .2
THE CLUB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
LIFT TICKETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
TRANSFER OF CLUB MEMBERSHIPS . . . . . . . . . . . . . . . . . . . . .3
MATERIAL DIFFERENCES BETWEEN CLASS A SHARES AND CLUB MEMBERSHIP UNITS.4
FORMATION STATUS OF THE CRYSTAL MOUNTAIN FOUNDERS' CLUB. . . . . . . .4
BOYNE'S QUALIFIED EXPENDITURE COVENANT . . . . . . . . . . . . . . . . . .4
EFFECT OF THE PROPOSED TRANSACTION ON SHAREHOLDERS . . . . . . . . . . . .5
DISSENTER'S RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
POST RECORD DATE TRANSACTIONS IN SHARES. . . . . . . . . . . . . . . . . .6

SUMMARY OF PROPOSAL II . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

BOARD RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . . . .7
THE CLASSIFICATION SYSTEM. . . . . . . . . . . . . . . . . . . . . . . . .7
THE NOMINEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

KEY DEFINED TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
RECORD DATE; SHARES ENTITLED TO VOTE: VOTE REQUIRED. . . . . . . . . . . .8
PROXIES; PROXY SOLICITATION. . . . . . . . . . . . . . . . . . . . . . . .9
RETURN OF PROXIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
DISSENT AND APPRAISAL RIGHTS . . . . . . . . . . . . . . . . . . . . . . 10

PROPOSAL I: THE REORGANIZATION AND THE MERGER . . . . . . . . . . . . . . . 11

APPROVAL OF THE MERGER AGREEMENT, THE MERGER AND THE AMENDMENT OF THE
ARTICLES OF INCORPORATION. . . . . . . . . . . . . . . . . . . . . . . . 11
BACKGROUND AND REASONS FOR THE PROPOSED MERGER AGREEMENT . . . . . . . . 12
RECOMMENDATION OF THE BOARD OF DIRECTORS . . . . . . . . . . . . . . . . 16
FACTORS CONSIDERED BY THE BOARD OF DIRECTORS . . . . . . . . . . . . 16
SHAREHOLDERS ELECTING ALL CASH . . . . . . . . . . . . . . . . . . . 17
RECOMMENDATION OF THE BOARD OF DIRECTORS . . . . . . . . . . . . . . 18
SHAREHOLDER REJECTION OF THE MERGER AGREEMENT. . . . . . . . . . . . 18
FAIRNESS OPINION OF THE COMPANY'S FINANCIAL ADVISOR. . . . . . . . . . . 19
GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ASSUMPTIONS AND LIMITING CONDITIONS. . . . . . . . . . . . . . . . . 20
ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

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CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
NOTIFICATION IN THE EVENT THE FAIRNESS OPINION IS WITHDRAWN. . . . . 22
INTERESTED PERSONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
KEY EMPLOYEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
FORMER AND CURRENT DIRECTORS OF THE COMPANY. . . . . . . . . . . . . 22
STAATZ TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . 22
REGULATORY MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

THE REORGANIZATION AGREEMENT AND AGREEMENT AND PLAN OF MERGER. . . . . . . . 23

THE REORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
CONDITIONS TO CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . 24
REPRESENTATIONS, WARRANTIES AND COVENANTS. . . . . . . . . . . . . . . . 25
TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
FEES AND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
PROCEEDS TO SHAREHOLDERS FROM THE REORGANIZATION AND THE MERGER. . . . . 26

THE CLUB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

ESTABLISHMENT OF THE CRYSTAL MOUNTAIN FOUNDERS' CLUB . . . . . . . . . . 26
CRYSTAL MOUNTAIN FOUNDERS' CLUB MEMBERSHIP RIGHTS. . . . . . . . . . . . 26
COMPARISON OF CRYSTAL MOUNTAIN FOUNDERS' CLUB MEMBERSHIP UNITS TO
CURRENT CLASS A SHARES . . . . . . . . . . . . . . . . . . . . . . . . . 27
TRANSFERABILITY OF CRYSTAL MOUNTAIN FOUNDERS' CLUB MEMBERSHIP UNITS. . . 28

TAX AND ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

ACCOUNTING TREATMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 28
FEDERAL INCOME TAX CONSEQUENCES: OPINION OF LESOURD & PATTEN, P.S. . . .29
CONSEQUENCES TO THE SHAREHOLDERS . . . . . . . . . . . . . . . . . . 29
CONSEQUENCES TO THE COMPANY. . . . . . . . . . . . . . . . . . . . . 33
CONSEQUENCES TO THE CLUB . . . . . . . . . . . . . . . . . . . . . . 34
FORMATION STATUS OF THE CRYSTAL MOUNTAIN FOUNDERS' CLUB. . . . . . . . . 35

BOYNE'S QUALIFIED EXPENDITURE COVENANT . . . . . . . . . . . . . . . . . . . 35

CAPITAL PROJECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
LIFTS AND TRAILS . . . . . . . . . . . . . . . . . . . . . . . . . . 35
LODGES AND BASE FACILITIES . . . . . . . . . . . . . . . . . . . . . 36
OTHER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
IN THE FIRST YEAR AND A HALF:. . . . . . . . . . . . . . . . . . . . 37
IN THE FOLLOWING YEAR: . . . . . . . . . . . . . . . . . . . . . . . 37
FEDERAL INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . 37
REMEDIES OF THE CLUB . . . . . . . . . . . . . . . . . . . . . . . . . . 37

DESCRIPTION OF BOYNE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

IDENTITY AND BACKGROUND OF MANAGEMENT OF BOYNE . . . . . . . . . . . . . 38
OTHER RESORTS OPERATED BY BOYNE. . . . . . . . . . . . . . . . . . . . . 39
BOYNE FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . 39

DESCRIPTION OF BUSINESS OF CRYSTAL MOUNTAIN, INC.. . . . . . . . . . . . . . 40

FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
EMPLOYEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
COMPETITION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
REGULATORY MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
PROPERTIES; LEASES; PERMITS. . . . . . . . . . . . . . . . . . . . . . . 41
LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

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IDENTITY AND BACKGROUND OF MANAGEMENT OF CRYSTAL MOUNTAIN, INC.. . . . . 41
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . 43
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . . . . . . 44
UPDATE OF PROJECTED RESULTS THROUGH SEPTEMBER 30, 1996 . . . . . . . . . 44

MARKET PRICE OF THE COMMON SHARES AND RELATED SHAREHOLDER MATTERS. . . . . . 44

MARKET INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
HOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
BENEFICIAL OWNERSHIP AND MANAGEMENT OWNERSHIP. . . . . . . . . . . . . . 44
DIVIDENDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

PROPOSAL II: ELECTION OF DIRECTORS. . . . . . . . . . . . . . . . . . . . . 45

NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS FOR TERMS TO EXPIRE
IN 1999. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE WHOSE TERMS
EXPIRE IN 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE WHOSE TERMS
EXPIRE IN 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
RECOMMENDATION OF THE BOARD OF DIRECTORS . . . . . . . . . . . . . . . . 47

OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

ACCOUNTANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SHAREHOLDER PROPOSALS FOR NEXT MEETING . . . . . . . . . . . . . . . . . 47
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . 47
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. . . . . . . . . . . . . 48

Appendix A -- Reorganization Agreement and Agreement and Plan of Merger
among Crystal Mountain, Inc., Boyne USA, Inc. and CM Acquisition
Corporation dated as of December 6, 1996, including:
- Exhibit A, form of Ski Club Operating Agreement between Crystal
Mountain, Inc. and the Crystal Mountain Founders' Club;
- Exhibit B, form of Qualified Expenditure Agreement between Boyne
USA, Inc. and the Crystal Mountain Founders' Club; and
- Exhibit C, form of Pledge Agreement by Boyne USA, Inc. in favor
of the Crystal Mountain Founders' Club.
Appendix B -- Sections 23B.13.010 to 23B.13.310 of the Revised Code of
Washington.
Appendix C -- Fairness Opinion Of The Company's Financial Advisor,
Houlihan Valuation Advisors dated February 12, 1997.

<PAGE>
SUMMARY OF PROPOSAL I

CERTAIN SIGNIFICANT MATTERS DISCUSSED IN THIS PROXY STATEMENT REGARDING PROPOSAL
I ARE SUMMARIZED BELOW. THIS SUMMARY (AND THE SUMMARY ABOVE) IS NOT INTENDED TO
BE COMPLETE AND IS QUALIFIED IN ALL RESPECTS BY REFERENCE TO THE MORE DETAILED
INFORMATION APPEARING IN OR INCORPORATED BY REFERENCE INTO THIS PROXY STATEMENT
(INCLUDING THE APPENDICES HERETO).

PARTIES

The Company has entered into a Reorganization Agreement and Agreement and
Plan of Merger dated as of December 6, 1996 (the "Merger Agreement") among:

"Company" Crystal Mountain, Inc.

"Boyne" Boyne USA, Inc., a Michigan corporation

"Newco" CM Acquisition Corporation, a Washington corporation,
and a wholly-owned subsidiary of Boyne

Pursuant to the Merger Agreement, the Company will form:

The "Club" Crystal Mountain Founders' Club, a Washington nonprofit
corporation

The Merger Agreement would affect the holders of:

"Class A Shares" Shares of the Class A common stock of the Company, par
value $50 per share, 26,609 shares issued and
outstanding ("Class A Shares")

"Class B Shares" Shares of the Class B common stock of the Company, par
value $20 per share, 710 shares issued and outstanding
("Class B Shares")

THE REORGANIZATION AND MERGER

If the shareholders approve the Merger Agreement, the merger contemplated
therein and the amendment of the Company's articles of incorporation, then:

THE REORGANIZATION

- - The Company will make a distribution to the holders of the Class A Shares
of, at the election of each holder of Class A Shares, either cash or lift
privileges in the form of one or more membership units in the Club (or a
combination), at the following rates:

- one membership unit in the Club per Class A Share

- $154.48 in cash per Class A Share.

SHAREHOLDERS WHO DO NOT ELECT TO RECEIVE CLUB MEMBERSHIPS BY
SUBMITTING THEIR PROPERLY COMPLETED DISTRIBUTION ELECTION FORM
PRIOR TO THE VOTE AT THE ANNUAL MEETING WILL BE DEEMED TO HAVE
ELECTED TO RECEIVE CASH. THE RECORD DATE FOR THE DISTRIBUTION
WILL BE MARCH 6, 1997.

- - Club members will have perpetual lift privileges similar to those
currently associated with the Class A Shares.

- - The lift privileges now associated with the Class A Shares will be
terminated and Class A Share holders will receive the above mentioned
Club memberships, or cash, at each Class A Share holder's election.
THIS ELECTION MUST BE MADE PRIOR TO THE VOTE AT THE ANNUAL MEETING.
The Company will continue to honor existing lift privileges for the
1996-1997 ski season.

-1-
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THE MERGER

Immediately after the Reorganization:

- - Newco will merge into the Company, each Class A Share and each Class B
Share will be converted into $65.52 in cash, payable to the shareholder,
and each share of Newco will be converted into a share of the Company (the
"Merger").

- - As a result of the Merger, the Company will become a wholly-owned
subsidiary of Boyne. Neither holders of Class A Shares nor holders of
Class B Shares will be subject to any liability of the Company prior to or
after the Merger Time.

- - Shareholders of the Company will cease to have an ownership interest in the
Company upon the occurrence of the Merger.

CONDITIONS

- - The Reorganization will not occur unless the Company's shareholders approve
the Merger Agreement, the Merger and the proposed amendment to the
Company's articles of incorporation.

- - The Merger will not occur unless the Reorganization occurs.

The Reorganization and Merger, and the conditions thereto, are more fully
described under "Reorganization and Merger" below.

BOARD RECOMMENDATION

The board of directors of Crystal Mountain, Inc. (the "Company") believes
the transaction described herein is fair to the shareholders of the Company, and
unanimously recommends that the shareholders of the Company vote for the
proposal to approve the Merger Agreement and the merger contemplated therein and
to amend the Company's articles of incorporation.

BOARD PLANS SHOULD THE MERGER NOT BE CONSUMMATED

The long term viability of the Company requires outside financing or a
series of profitable ski seasons to fund capital improvements. Improvements
are necessary for the Crystal Mountain ski resort (the "Resort") to remain
competitive and some are required for the Company to remain in compliance with
its Forest Service Permit. The Board has investigated the possibility of
obtaining additional equity or debt financing and has determined that none is
available on terms acceptable to the Company. This investigation is described
under "Background and Reasons for the Proposed Merger." Based on Company
performance over the last decade, it would be difficult, if not impossible, for
the Company to pay for the necessary improvements solely from operating income
within a ten year time frame.

Given the Company's present financial condition and the inherent
unpredictability of profit of the Resort due to its dependence on weather, the
Board has determined that it is in the best interests of the shareholders to
engage in a transaction now. The present condition of the Company is such that
the Board successfully negotiated a transaction preserving the Class A Share
holders lift ticket privileges. An unprofitable 1997-1998 ski season may put
the Company in violation of a loan covenant that requires it not to exceed a
specified ratio of debt to equity, which would permit the Company's bank to cut
off further lending and to accelerate outstanding loans so they

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become immediately due and payable. The financial consequences to the Company
of a failure to consummate the Merger are discussed in detail under
"Recommendation of the Board of Directors - Shareholder Rejection of the Merger
Agreement."

THE CLUB

The Club will be a nonprofit membership organization whose members will
have varying numbers of membership units initially corresponding to the number
of Class A shares held as of March 6, 1997 for which the shareholders elect to
receive lift privileges in the form of Club membership units. Club memberships
are not expected to experience any significant appreciation in value and will
not be freely transferable. Shareholders who elect to receive lift privileges in
the form of Club membership units should do so solely for the current and future
benefits of Club activities and resources, including the annual distribution of
lift tickets. Shareholders should not acquire Club memberships for investment
purposes or with any expectation of future profit.

The Club will not be subject to the reporting requirements of the
Securities and Exchange Act of 1934 (the "Exchange Act") and hence will not
provide periodic reports to Club members pursuant to the requirements of the
Exchange Act.

LIFT TICKETS

On timely payment of annual dues, each fall the Club will issue to each
Club member who holds at least 20 membership units one transferable weekend lift
ticket per membership unit held. Each member may elect to receive a
non-transferable season's pass, or some other combination of passes and
transferable lift tickets, so long as the total retail price does not exceed the
retail price of a weekend lift ticket times the number of membership units held.
The Company will be bound in perpetuity to accept lift tickets and season's
passes issued annually by the Club pursuant to the Club Operating Agreement
between the Club and the Company.

Annual dues per membership unit will be set by the board of trustees of the
Club, and will be 5% to 10% of the retail price of an adult weekend lift ticket.
The current retail price of an adult weekend lift ticket is $35. Based on this
price, Club dues would be between $1.75 and $3.50 per Club membership unit per
year. Annual dues may increase if lift ticket prices increase. Five percent of
the retail price of an adult weekend lift ticket is a minimum dues amount per
membership unit established in the Club Operating Agreement; a vote of Club
members is required for dues to exceed 10%. The price of an adult weekend
lift ticket was increased by 6% last year and has increased by 25%, from $28 to
$35, since 1990. Prices for the last seven years are as listed herein under
"The Club - Establishment of the Crystal Mountain Founders Club."

A member who fails to pay dues by October 31 will remain a member, but will
receive no lift tickets for the coming ski season. There will be no
initiation fee for persons acquiring their Club membership units in the
Reorganization. The initiation fee from the Reorganization Date until July 31,
2000, will be $154.48 per membership unit. After July 31, 2000, the board of
trustees may change the initiation fee.

Club members holding less than 20 Club membership units will not be
eligible to receive lift tickets and will not be entitled to vote.

Engaging in the business of commercial resale of lift tickets issued by the
Club is prohibited. In addition, any transfer by a Club member of tickets to a
person or entity that he or she knows is engaged in the business of commercial
resale of lift tickets is prohibited. Any tickets so transferred would be null
and void. Any Club member who engages in the business of commercial resale of
tickets or knowingly transfers tickets to a person or entity engaged in such
business will forfeit his or her lift ticket privileges for that year. The
board of trustees of the Club will determine what constitutes the business of
commercial resale of lift tickets.

TRANSFER OF CLUB MEMBERSHIPS

Membership units will not be transferable and may be sold or transferred
only back to the Club, except for specific transfers pursuant to family gifts,
death or divorce. If a member wishes to resign his or her membership, or to
reduce the number of membership units he or she holds, he or she would be
entitled to receive from the Club a cash payment of 100% of the then-current
initiation fee (based on the number of membership units he or she holds).

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The initiation fee will be set by the Club's board of trustees (which will be
elected by the Club's members) from time to time after July 31, 2001. See "The
Club - Transferability of Crystal Mountain Founders' Club Membership Units"
below for a more complete description.

The total number of membership units in the Club will be fixed, and may not
be increased.

The Club is more fully described under "The Club" below.

MATERIAL DIFFERENCES BETWEEN CLASS A SHARES AND CLUB MEMBERSHIP UNITS

Upon consummation of the Reorganization, the shareholders of the Company
who elected to receive lift privileges in the form of Club membership units will
become members of the Club, and their rights will be governed by the Club's
articles and bylaws, as well as Title 24 of the Revised Code of Washington (the
"RCW") governing nonprofit corporations, which differ in certain material
respects from the Company articles, bylaws, and Title 23B of the RCW governing
for profit business corporations. For example, while a Class A Share holder
holding less than 20 Class A Shares may vote those shares, a Club member holding
fewer than 20 Club membership units will not be able to vote his or her Club
membership units. These differences are more fully described under "The
Club - Comparison of Crystal Mountain Founder's Club Membership Units to Current
Class A Shares" below.

As regards the annual cost and timing of the lift ticket privileges, the
Club membership units do not differ materially from the Class A Shares. Both the
Class A Shares and the Club membership units require payment of a fee of between
5% and 10% of the value of a weekend adult lift ticket per Class A Share or Club
membership unit to receive a distribution of lift tickets. For the Class A
Share holders, this payment is an activation fee. For Club members, this
payment will be the annual Club dues. Class A Share holders are not, and Club
members will not be, required to pay the activation fee or dues unless they want
to receive lift tickets.

Differences in the tax treatment of Club membership units and Company Class
A Shares from the holder's point of view is discussed herein under "Tax and
Accounting - Federal Income Tax Consequences -- Consequences to the
Shareholders."

FORMATION STATUS OF THE CRYSTAL MOUNTAIN FOUNDERS' CLUB

Application for Internal Revenue Service recognition of qualification as a
federally tax-exempt organization under Internal Revenue Code Section 501(c)(7)
will be made promptly following the distribution of lift privileges in the form
of membership units in the Reorganization. There is no assurance that the Club
will qualify for federally tax exempt status under Internal Revenue Code Section
501(c)(7). Should the IRS reject the Club's application, then the Company
expects that the board of trustees, would, if possible (i) make all changes
required for the Club to be recognized as federally tax exempt under Internal
Revenue Code Section 501(c)(7) or, alternatively, (ii) take other steps to avoid
the negative ramifications of the failure to be recognized. Changes to the
Club could include an increase in membership dues, an increase in social
activities or a restriction of the transferability of lift tickets issued by the
Club. The tax ramification of the Club's failure to qualify under Internal
Revenue Code Section 501(c)(7) are discussed below under "Tax and Accounting
Treatment - Federal Income Tax Consequences -- Consequences to the Club."

BOYNE'S QUALIFIED EXPENDITURE COVENANT

Boyne and the Club will be parties to the Qualified Expenditure Agreement,
pursuant to which:

- - Boyne has agreed with the Club that, if the Merger occurs, Boyne will make
Qualified Expenditures of not less than $15 million by December 31, 2006.
Not less than $8 million of that $15 million will be made by December 31,
2001.

- - Only expenditures designated as "Qualified" in the Qualified Expenditure
Agreement will count toward the $15 million which is required. The
expenditures so designated are limited to the cost of certain capital
projects to improve the Resort, which are listed in the Qualified
Expenditure Agreement, and specific expenses associated with the
Reorganization and Merger. The Qualified Expenditures associated with the
Reorganization and Merger are limited in amount, and include the federal
income taxes, withholding taxes, interest and penalties incurred by the
Company in completing the Reorganization and Merger (as described in the
Qualified

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Expenditure Agreement) and the amount of $65.52 per share in cash
paid to the Company's shareholders pursuant to the Merger. Assuming there
are no dissenting shareholders, approximately $1.8 million of the $15
million will be used to pay the amount payable to the Company's
shareholders pursuant to the Merger.

- - The non-capital expenditure component of the Qualified Expenditures will be
limited to $5 million of the $15 million to be spent by December 31, 2006
including $2 million of the $8 million to be spent by December 31, 2001.
Based on certain assumptions described under "Tax and Accounting: Federal
Income Taxes" below, it is expected that the total non-capital expenditure
component will be approximately $2.5 million.

- - Boyne's obligations under the Qualified Expenditure Agreement will be
secured by a pledge in favor of the Club of all of the issued and
outstanding shares of the Company. If Boyne fails to make the Qualified
Expenditures in the amount required by the Qualified Expenditure Agreement,
the security pledged in favor of the Club will not provide additional
capital to the Company.

Boyne's Qualified Expenditure Covenant is more fully described under "Boyne's
Qualified Expenditure Covenant" below. Boyne is more fully described under
"Description of Boyne" below, which includes certain financial information
regarding Boyne.

EFFECT OF THE PROPOSED TRANSACTION ON SHAREHOLDERS

If the Reorganization and Merger occur:

- - Each holder of Class A Shares will, if he or she so elects PRIOR TO THE
VOTE AT THE ANNUAL MEETING, receive lift privileges in the form of one Club
membership unit per Class A Share. A Club member with at least 20 Club
membership units will be entitled to lift privileges similar to those
currently enjoyed, plus $65.52 per share in cash. Alternatively, each
holder of Class A Shares will receive $220 per share in cash and will have
no further lift privileges. Holders may also make a combined election,
receiving Club membership units for some Class A Shares and cash for the
remainder.

- - Each holder of Class B Shares will receive $65.52 per share in cash.

- - Shareholders will likely incur federal income taxes as a result of the
proposed transaction. The amount of such taxes will depend on a number of
factors, including whether a shareholder elects to take cash or Club
memberships, or a combination of the two, and that shareholder's "basis" in
his or her Class A Shares ("basis" is generally equal to the amount that a
shareholder paid for the shares).

- - The Company intends to prepare and file its own tax returns using an
estimated fair market value for the Club membership units of $154.48 per
unit. Based on that value, and the other assumptions described under "Tax
and Accounting: Federal Income Taxes" below, a Class A Share holder in the
highest marginal tax bracket whose basis per Class A Share is $50 should
incur a tax of $65.52 per Class A Share held. A shareholder with a higher
basis or who is in a lower tax bracket should incur a lower tax.
Shareholders should be aware that there is no assurance that the Internal
Revenue Service will not take the position that the value of the Club
membership units is significantly higher than $154.48 per unit. If the
IRS takes this position, the effect could be to increase materially the tax
payable by shareholders as a result of the Reorganization and Merger. The
Company has not obtained an independent valuation of the Club membership
units.

- - The holders of Class B Shares will not incur federal income taxation on the
Class B Shares in the Reorganization, but may incur federal income taxation
on the Class B Shares in the Merger. If the $65.52 per share Merger
payment made for each Class B Share is greater than the shareholder's basis
in his or her shares, he or she will have a taxable capital gain to the
extent that the sale price exceeds basis. If the sale price is less than
the shareholder's basis, he or she will have a capital loss for federal
income tax purposes.

- - Currently, holders of Class A Shares are generally required annually to pay
federal income tax on the value of the lift privileges received in excess
of the activation fee paid. If the Club is and remains properly qualified
as a federally tax-exempt organization under Internal Revenue Code Section
501(c)(7), there is a reasonable basis for Club members to take the
position that the lift tickets they receive from the Club are not taxable
as income, but rather are a non-taxable benefit enjoyed due to membership
in a nonprofit corporation. Any sales by a Club member

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of tickets received from the Club would be taxable to the extent the sale
proceeds exceed the Club member's basis, if any, in the tickets sold.
However, it must be noted that the position that the Club members' mere
receipt of tickets from the Club is not taxable is not free from doubt.
There is no assurance that the Club will qualify for federally tax-exempt
status or that the Internal Revenue Service will not take the position that
the Club members' mere receipt of the lift tickets from the Club is taxable.
NEITHER THE COMPANY NOR THE CLUB HAS SOUGHT, OR INTENDS TO SEEK, A RULING
FROM THE INTERNAL REVENUE SERVICE CONCERNING THE FEDERAL INCOME TAX
CONSEQUENCES OF THE DISTRIBUTION OF LIFT TICKETS TO THE CLUB MEMBERS.

The reasoning and analysis upon which LeSourd & Patten, P.S. has based its
opinion as to the tax consequences of the transaction, and the consequences
themselves, are described under "Tax and Accounting: Federal Income Tax
Consequences" below. Each shareholder is strongly encouraged to read that
portion of this Proxy Statement in its entirety, and to consult with his or her
own tax advisor.

DISSENTER'S RIGHTS

Under Washington law, shareholders who do not vote to approve the Merger
Agreement and Merger may dissent and elect to have the fair value of their
shares immediately prior to the effective date of the Merger (excluding any
appreciation or depreciation in anticipation of the Merger) judicially appraised
and paid to them in cash. Any shareholder wishing so to dissent must give
written notice of his or her intent to demand payment before the Annual Meeting
and comply with the other requirements of Sections 23B.13.010 to 23B.13.310 of
the Revised Code of Washington, the full text of which is attached to this Proxy
Statement as Appendix B.

Any deviation from such requirements may result in a termination of
dissenter's appraisal rights and subject such shares to all of the terms of the
Merger. The negative vote of a shareholder will NOT be deemed to constitute the
required written demand. A condition to the obligations of Boyne and Newco
under the Merger Agreement is that the number of Class A Shares and Class B
Shares (in the aggregate) held by stockholders (other than stockholders who hold
more than 200 Class A Shares of record as of July 31, 1996) who are Dissenting
Shareholders shall be less than 1,000 shares.

POST RECORD DATE TRANSACTIONS IN SHARES

The record date for determining shareholders eligible to receive the
distribution in the Reorganization, to receive notice of the Annual Meeting and
to vote at the Annual Meeting is March 6, 1997. A shareholder who acquires
shares AFTER March 6, 1997 may not submit a distribution election form and will
not be entitled to receive Club membership units or cash in the Reorganization.
However, such new shareholder will receive cash in the Merger. A shareholder
who has acquired his or her shares after March 6, 1997 will not be entitled to
notice of the Annual Meeting.

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SUMMARY OF PROPOSAL II

CERTAIN SIGNIFICANT MATTERS DISCUSSED IN THIS PROXY STATEMENT REGARDING PROPOSAL
II ARE SUMMARIZED BELOW. THIS SUMMARY (AND THE SUMMARY ABOVE) IS NOT INTENDED
TO BE COMPLETE AND IS QUALIFIED IN ALL RESPECTS BY REFERENCE TO THE MORE
DETAILED INFORMATION APPEARING OR INCORPORATED BY REFERENCE TO THIS PROXY
STATEMENT (INCLUDING THE APPENDICES HERETO).

BOARD RECOMMENDATION

The board of directors of Crystal Mountain, Inc. (the "Company")
UNANIMOUSLY RECOMMENDS that the shareholders of the Company vote FOR the
proposed directors.

THE CLASSIFICATION SYSTEM

The Company has a system of classification of Directors under which
Directors serve three-year terms and their terms of office are staggered. Each
year the shareholders establish the size of the Board for the coming year. It
is the recommendation of the current Board that the shareholders set the size of
the Board at twelve for the coming year, resulting in three equal units of four
directors each.

THE NOMINEES

The Nominees are Robert E. Carlson, Nancy K. Dees, Lawrence E. Hard and
Thomas F. Leonard. The Board of Directors has no reason to believe that any
person named below will be unable or will decline to serve. All four nominees
are current Directors of the Company, serving terms which expire at the Annual
meeting. Messrs. Carlson, Hard and Leonard have been directors since 1987.
Ms. Dees has been a director since 1990. On the following pages, identifying
information is provided for each person nominated for election to the Board of
Directors, including their principal occupation during the last five years.
Also shown is similar information for the Directors whose terms of office will
continue after the Annual Meeting.

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GENERAL INFORMATION
KEY DEFINED TERMS

The following is a summary of key defined terms used in this Proxy
Statement. The reader may find it helpful to refer to this list of key terms in
reading the Proxy Statement.

"Boyne" Boyne USA, Inc., a Michigan corporation

"Class A Share" One share of Class A common stock, par value $50 per
share, of the Company

"Class B Share" One share of Class B common stock, par value $20 per
share, of the Company

"Club" The Crystal Mountain Founders' Club, a Washington
nonprofit corporation

"Club Operating The Ski Club Operating Agreement between the Company
Agreement" and the Club, in substantially the form attached to the
Merger Agreement as Exhibit A

"Company" or "Crystal" Crystal Mountain, Inc., a Washington corporation

"Drop Dead Date" April 15, 1997 or such later date to which the Company
and Boyne may reasonably agree

"Exchange Act" The Securities Exchange Act of 1934, as amended

"Houlihan" Houlihan Valuation Advisors

"Merger" The merger of Newco into the Company and the exchange of
Class A Shares and Class B Shares for $65.52 in cash per
share, all as described in the Merger Agreement

"Merger Agreement" The Reorganization Agreement and Agreement and Plan of
Merger among Boyne, Crystal Mountain, Inc. and Newco,
as amended

"Merger Time" The time at which the articles of merger are filed with
the Secretary of State of the State of Washington

"Newco" CM Acquisition Corporation, a Washington corporation
which is a wholly owned subsidiary of Boyne

"Qualified Qualified expenditures made pursuant to the Qualified
Expenditures" Expenditure Agreement

"Qualified Expenditure The Qualified Expenditure Agreement between Boyne and
Agreement" the Club, in substantially the form attached to the
Merger Agreement as Exhibit B

"Qualified Expenditure Boyne's obligation to make certain Qualified
Covenant" Expenditures pursuant to the Qualified Expenditure
Agreement

"Reorganization" The amendment to the Company's articles of incorporation
and bylaws, the distribution to holders of the Company's
Class A Shares, and the entry of the Company and the
Club into the Ski Club Operating Agreement, all as
described in the Merger Agreement

"Reorganization Date" The earliest practicable date after December 31, 1996
on which the conditions to the occurrence of the
Reorganization Date set forth in Article 4 of the Merger
Agreement are satisfied or waived, or (if the
Reorganization Date has not previously occurred) the
Drop-Dead Date

"Resort" The Crystal Mountain ski resort

RECORD DATE; SHARES ENTITLED TO VOTE: VOTE REQUIRED

The outstanding voting securities of the Company consist of 26,609 Class A
Shares and 710 Class B Shares, all of which will be entitled to vote at the
Annual Meeting on March 27, 1997.

RECORD DATE. Only shareholders of record as of the close of business on
March 6, 1997 are entitled to receive the distribution in the Reorganization and
to notice of and to vote at the Annual Meeting or at any

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adjournment thereof. At such date, there were 26,609 Class A Shares held by 979
holders of record and 710 Class B Shares outstanding held by 2 holders of
record. A shareholder who acquires shares AFTER March 6, 1997 may not submit
a distribution election form and will not be entitled to receive Club membership
units or cash in the Reorganization. However, such new shareholder will receive
cash in the Merger. A shareholder who has acquired his or her shares after
March 6, 1997 will not be entitled to notice of the Annual Meeting.

Shareholders of record on the record date are entitled to one vote per
share on any matter which may properly come before the Annual Meeting.

QUORUM. A majority of each class of shares and the combined number of
outstanding Class A Shares and Class B Shares must be represented, either in
person or by proxy, at the Annual Meeting to obtain the quorum required by the
bylaws of the Company to conduct business at the Annual Meeting.

REQUIRED VOTE FOR APPROVAL OF THE MERGER AGREEMENT AND THE AMENDMENT TO THE
ARTICLES OF INCORPORATION. The affirmative vote of the holders of two-thirds of
the outstanding Class A Shares, Class B Shares and both combined is required to
approve the Merger Agreement and the Merger and to approve the amendment to the
articles of incorporation.

REQUIRED VOTE FOR ELECTION OF DIRECTORS. The Directors elected are the
four receiving the largest numbers of votes cast.

ADJOURNMENT. It is currently expected that, on the Annual Meeting date of
March 27, 1997, votes will be taken and the polls closed on Proposal I (approval
of the Merger Agreement, the Merger, and the amendment to the Company's articles
of incorporation) and Proposal II (election of directors) contained in this
proxy statement. It is possible, however, that the management of the Company
may propose one or more adjournments of the Annual Meeting, either to allow the
inspectors of election to count and report on the votes cast, without closing
the polls, in order to permit further solicitation of proxies with respect to
Proposal I, or for other reasons. Proxies solicited by the Company will be
voted at the Annual Meeting in favor of any adjournment proposed by management,
but will not be considered a direction to vote for any adjournment proposed by
others. If any adjournment is properly proposed at the Annual Meeting on behalf
of any person other than management, the persons named as proxies, acting in
such capacities, will have discretion to vote on such adjournment in accordance
with their best judgment.

Should the Board desire to adjourn the Annual Meeting to continue to
solicit votes to approve the proposed transaction, proxies voted against
Proposal I may not be used by management to vote for an adjournment pursuant to
the discretionary authority of the persons named as proxies.

DIRECTOR/OFFICER CONTROL. The Directors and executive officers of the
Company collectively own less than one and a half percent of the outstanding
Class A Shares and Class B Shares. See "Beneficial Ownership and Management
Ownership".

ABSTENTIONS AND BROKER NON-VOTES. Abstentions from voting and broker
non-votes will have the same effect as votes against the proposed transaction.

PROXIES; PROXY SOLICITATION

Unless such proxies have been previously revoked, Class A Shares and
Class B Shares represented by properly executed proxies will be voted in
accordance with the instruction indicated on such proxies. IF NO INSTRUCTIONS
ARE INDICATED, PROXIES WILL BE VOTED "FOR" THE PROPOSAL TO APPROVE THE MERGER
AGREEMENT, THE MERGER, AND THE AMENDMENT TO THE ARTICLES OF INCORPORATION.
Although the Company is not aware of any matters to be voted upon at the Annual
Meeting other than as stated herein and in the accompanying Notice of Annual
Meeting of Shareholders, if any other matters are properly brought before the
Annual Meeting, the enclosed proxy gives discretionary authority to the persons
named in such proxy to vote the shares with respect to any such matters. Any
shareholder who has given a proxy may revoke it at any time before it is voted
by filing with the Secretary of the Company, Lawrence E. Hard, at LeSourd &
Patten, P.S., 2400 Columbia Center, 701 Fifth Avenue, Seattle, Washington
98104-7095, written notice of revocation or a duly executed proxy bearing a
later date, or by attending the Annual Meeting and voting in person (although
attendance at the Annual Meeting will not in and of itself

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constitute revocation of a proxy). The execution and return of the enclosed
proxy will not in any way affect a shareholder's right to attend the Annual
Meeting in person.

The cost of preparing, printing and mailing this Proxy Statement and the
enclosed proxy and distribution election form, as well as the cost of soliciting
proxies relating to the Annual Meeting, will be borne by Boyne. Such
solicitation will be made by mail, but also may be made by telephone or in
person by the Directors, officers or employees of the Company. Such Directors,
officers and employees will not be additionally compensated for such
solicitation, but may be reimbursed for out-of-pocket expenses incurred in
connection therewith. In addition, the Company has engaged Allen Nelson & Co. to
provide proxy solicitation services on behalf of the Company for an estimated
fee of $6,750. Boyne will bear the cost of these proxy solicitation services.
The Company will reimburse banks, brokerage houses and other custodians,
nominees and fiduciaries for their reasonable expenses in forwarding any proxy
soliciting materials to their principals. The approximate mailing date of these
proxy materials is expected to be March 6, 1997.

RETURN OF PROXIES

If the accompanying proxy is properly executed and delivered to the
Company's Secretary, Lawrence E. Hard, at LeSourd & Patten, P.S., 2400 Columbia
Center, 701 Fifth Avenue, Seattle, Washington 98104-7095 prior to 4:00 p.m.
(PST), on Tuesday, March 27, 1997, or to him at the place of the Annual Meeting
prior to the opening of the Meeting, it will be voted in accordance with the
instructions indicated.

All shareholders are requested to act promptly and send in the accompanying
proxy whether or not they plan to be present at the meeting. If you do attend,
your proxy may be returned to you at the door, if you wish, before you enter the
Meeting. If you plan to attend the Meeting but are unable to send in your proxy
in advance, please contact the Company's Secretary, Lawrence E. Hard, by
telephone at (206) 624-1040 or by telefax at (206) 223-1099, and advise him of
that fact.

WHILE YOU HAVE THE MATTER IN MIND, PLEASE COMPLETE, SIGN AND
RETURN THE ENCLOSED PROXY CARD AND DISTRIBUTION ELECTION FORM.

DISSENT AND APPRAISAL RIGHTS

Under the Washington Business Corporation Act ("WBCA"), Company
shareholders who do not vote in favor of the Merger may dissent and elect to
have the fair value of their shares immediately before the effective date of the
Merger judicially appraised and paid to them in cash. The fair value of the
shares immediately before the effective date of the Merger would be the fair
value of the shares after the Reorganization, meaning that the Class A Shares
appraised would not possess lift ticket distribution rights. The appraisal
value of the shares would exclude any appreciation or depreciation in
anticipation of the proposed Merger.

Any shareholder who wishes to dissent (a "Dissenting Shareholder"):
(i) must file with the Company a written objection to the Merger prior to the
taking of the vote on the Merger; (ii) must not vote in favor of the Merger; and
(iii) must comply with the other requirements of WBCA Sections 23B.13.010 to
23B.13.310, the full text of which is attached to this Proxy Statement as
Appendix B.

Any deviation from such requirements may result in a termination of
dissenter's appraisal rights and subject such shares to all of the terms of the
Merger. The negative vote of a shareholder will NOT be deemed to constitute the
required written demand. Failure to make a demand upon the Company within the
required statutory period will result in the shareholder being bound by the
terms of the Merger Agreement.

A condition to the obligation of Boyne to consummate the Merger is that the
number of Class A Shares and Class B Shares (in the aggregate) held by
stockholders (other than stockholders who hold more than 200 Class A Shares of
record as of July 31, 1996) who are Dissenting Shareholders shall be less than
1,000 shares.

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PROPOSAL I: THE REORGANIZATION AND THE MERGER
APPROVAL OF THE MERGER AGREEMENT, THE MERGER AND THE AMENDMENT OF THE ARTICLES
OF INCORPORATION

At the Annual Meeting, the Company's shareholders will be asked, among
other things, to approve the amendment to the articles of incorporation, as well
as the Merger, pursuant to the Merger Agreement. A copy of the Merger Agreement
is attached as Appendix A. The Reorganization, including the distribution of
Club membership units, will not occur unless the Company shareholders approve
the Merger Agreement and the amendment to the articles of incorporation.

The Company will incorporate a nonprofit Washington corporation, the Club,
whose articles and bylaws will contain the provisions described below under "The
Club" at page 26. The Company will simultaneously complete the following
Reorganization, making:

(i) an amendment of its articles of incorporation and bylaws to
eliminate the lift privileges associated with its Class A Shares
and to allow the distribution described in subparagraph (ii)
below; and

(ii) a distribution to each holder of its Class A Shares of
one or a combination of:

(a) a number of Club membership units equal to the number of Class A
Shares held by such shareholder, if such shareholder elects PRIOR
TO THE VOTE AT THE ANNUAL MEETING to receive lift privileges in
the form of membership in the Club;

(b) $154.48 in cash times the number of Class A Shares held by such
shareholder, payable between 121 days and 150 days after the
Reorganization Date, if such shareholder does not elect to receive
lift privileges in the form of membership in the Club.

Upon the approval of the Merger Agreement and the amendment to the articles
of incorporation, the Company and the Club will enter into a perpetual contract,
the Club Operating Agreement, pursuant to which:

(i) the Company will agree forever to accept a specific quantity
of lift tickets and season's passes issued by the Club to its
members;

(ii) the Company will agree to perform certain administrative
functions for the Club including providing a mechanism for
honoring the Club members' lift privileges; and

(iii) the Club will agree to pay the Company, as compensation
for performing such administrative functions, an annual fee equal
to 4% of the retail price of the lift tickets issued by the Club;
in addition, the Club will reimburse the Company for the Forest
Service fee attributable to the lift tickets and season's passes
issued by the Club.

After the Reorganization, Boyne will acquire 100% ownership of the Company
pursuant to the Merger. The Merger will be accomplished by completion of the
following transactions:

(i) a subsidiary of Boyne, Newco, will merge with and into the
Company;

(ii) the surviving corporation will be the Company (Crystal
Mountain, Inc.);

(iii) each share of Newco stock will be converted into one
share of common stock of the Company; and

(iv) each Class A Share and Class B Share of the Company
outstanding immediately prior to the Merger will be converted
into the right of the shareholder to receive $65.52.

The Company will honor existing lift privileges for the period ending
September 30, 1997. In addition, the Company will continue to be obligated for
payment of all of the Company's liabilities and indebtedness, both fixed and
contingent, including but not limited to the Company's indebtedness to
Seattle-First National Bank, insurance deductibles, potential environmental
cleanup costs and lease obligations. Current shareholders were not personally

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liable for Company liabilities prior to the Merger and will not be personally
liable for Company liabilities after the Merger.

Boyne is required under the Qualified Expenditure Agreement to make
Qualified Expenditures (described below under "Boyne's Qualified Expenditure
Covenant") of not less than $15 million by December 31, 2006, of which not less
than $8 million are to be made by December 31, 2001. Should Boyne fail to make
the required Qualified Expenditures within the required time, subject to force
majeure and permit requirements, the Club will be entitled to specific
performance and may demand that Boyne deposit 107% of the shortfall in Qualified
Expenditures into an escrow account. Boyne's obligations under the Qualified
Expenditure Agreement will be secured by a pledge in favor of the Club of all
of the issued and outstanding shares of the Company.

BACKGROUND AND REASONS FOR THE PROPOSED MERGER AGREEMENT

The ski resort business is a capital intensive industry. The need to fund
new technology, such as high speed quad lifts, to remain competitive has led to
the acquisition of smaller operators by larger operators, and the consolidation
of multiple resorts under the ownership of relatively few large operators. This
trend has increased competitive pressure on independent mid-sized resorts such
as the Company, and the trend is accelerating. The Company's management and
Board have discussed strategic alliances and have received expressions of
interest in such an alliance or acquisition in the past. In general, these
expressions of interest have stated that if the Company ever became interested
in being acquired, in whole or in part, it could contact the interested parties
to begin negotiations.

Because the Company operates a single location resort, the Company is
susceptible to adverse weather conditions in the Pacific Northwest. Adverse
weather conditions have resulted in the Company suffering annual losses in the
last three consecutive years. As a result, the Company has not generated
sufficient funds from operations to make necessary capital improvements and may
not be able to do so in the future. Without an investment of significant
capital, the Company would run the risk of reducing or terminating operations
due to inadequate funds to complete the capital improvements required to remain
competitive in the face of increased competition from the other major regional
ski resorts (one of which, Snoqualmie Pass, was sold in December of 1996 to
another major operator who has announced its intention to make major capital
improvements in the ski area).

The Board has considered the possibility of increasing funds available by
issuing additional shares or obtaining additional debt financing, and has
determined that such financing would not be available on terms acceptable to the
Company, if at all. The Board held discussions with four national investment
banking firms in 1994 for financial and transactional advice. The Board
considered several alternatives.

The Board felt that several million dollars must be raised to design and
construct the capital improvements required to remain competitive. Debt options
considered were (i) obtaining additional financing from Seafirst, the Company's
lender, (ii) obtaining financing from a bank other than Seafirst and (iii)
privately or publicly placing debt. The Company discussed the matter with its
banker and determined that there was a significant risk that the Company could
not service any significant additional debt, even on the terms of its existing
debt. If the Company failed to service this debt, there would be a significant
risk of loss of Class A Shareholder lift privileges.

An additional public or private offering of Class A Shares was considered.
Based on the Company's experience with the 1987 offering, in which only
approximately 4,600 shares were placed, the Board determined that the amount of
cash raised would not justify the burden of honoring additional perpetual lift
ticket privileges (particularly if most of the new shareholders were current
full price lift ticket purchasers at the Resort). In order to raise $8 million
at a price per share of $220, for example, 36,364 shares would need to be sold,
more than doubling the number of outstanding shares. The Board also concluded
that the existence of new lift privilege holders would adversely affect the
preservation of the existing shareholder lift privileges should the Company
later be sold.

Based on the Board's experience from its negotiations with potential
investors, as well as its familiarity with business transactions generally, the
Board believed that any investor willing to make the equity investment that
would be required would demand control of the Company.

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<PAGE>

The Board believes that due to the present financial condition of the
Company and the amount of capital required to make necessary improvements to the
Resort, the only viable alternative available is to sell the Company or its
assets. The Board also understands that the holders of Class A Shares are very
concerned about maintaining their lift privileges. Although holders of Class A
Shares have voting rights and an economic interest in profits, the Company has
never paid a cash dividend and no shareholder holds a significant voting
interest due to the wide dispersal of share ownership (the average Class A
shareholder owns 27.5 Class A Shares). Consequently, the Company believes that
the main benefit associated with the Class A Shares is the lift privileges.
The desire to preserve the shareholder lift privileges dictates that, if the
Company is to be sold, the buyer should be an experienced ski resort operator
capable of managing the Company's business and the transaction should be
negotiated while the Company is still sufficiently strong to negotiate a
continuation of the lift privileges. The Company believes that it may not be
sufficiently strong in the future. The Board has evaluated all potential
investors for the 1994 - 1996 period with the above factors in mind.

In 1994, the Company was contacted by an operator of ski resorts. In
addition to its ski resort operations, this investor had a land development
business. The potential investor met the Board's criteria for a possible
acquiror. These criteria were: willingness to consider preservation of existing
shareholder lift ticket privileges, willingness and ability to pay for and
construct major capital improvements at the Resort and experience and reputation
in the ski industry. Serious discussions between the Company and the investor
began in the fall of 1994 with a series of meetings following the investor's
initial expression of interest. Representatives from the Company and the
investor spent a substantial amount of time trying to reach an agreement. The
discussion period extended throughout 1995. During this time, there were no
discussions with other possible investors. The terms of a possible transaction
with this investor were complex, but the key points were that new non-voting
Class C common shares would be created bearing only lift privileges with some
new restrictions on the lift privileges; the Class A shares would be exchanged
for the new Class C shares, leaving the investor holding all of the Class A
shares; the Company would amend its articles to eliminate the lift ticket
privileges from the Class A shares; and the investor would invest a minimum of
$10 million in the Resort.

In the spring of 1996, this investor announced its acquisition of another
ski resort. At this point, the investor informed the Company that it needed
to focus on integrating the new acquisition. The investor also expressed
concerns that all of their resorts were full destination resorts and the
Resort did not fit that profile. In addition they expressed reservations
about the Resort's location in the Northwest maritime climate area, because
they already had one ski resort in the same climatic area and they wanted to
spread the risk of unfavorable weather to operations outside of the Pacific
Northwest. In the mid-spring of 1996, the Board received final communication
from the investor that it was no longer actively interested in acquiring the
Resort.

The Board knew that the Company faced an increasingly serious financial
situation due to the unprofitable 1995-1996 ski season following losses of the
previous two years. The deterioration in the Company's financial situation has
been reported in its SEC filings over the last two years. The seriousness of
the problem became more generally known in December of 1995, when the Company
announced at its annual meeting of shareholders that it would not be open for
the 1996 summer season as a cost cutting measure. Although the decision to
close during the summer was later reversed following meetings with the
community, the initial decision not to operate for the summer indicated to the
public that the Company was facing more serious financial problems.

The Company entered into negotiations with its lender regarding certain
terms of its credit facility. Even though these credit facility negotiations
were ultimately successful, the Company still did not have significant
additional borrowing capacity. The result of the negotiations increased the
Company's borrowing capacity by $1,158,000, to $7,000,000. Due to poor weather
conditions of prior ski seasons, the Company was faced with the potential of
having insufficient funds to finance the Company if there were a late opening
for winter operations or adverse weather conditions over a peak revenue period
such as the Christmas and New Year's holidays. As a result, the Board became
deeply concerned regarding the Company's financial well-being if the 1996-1997
ski season resulted in continued losses because of (for example) a late start or
bad weather for the season or over a major holiday period.

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<PAGE>

The Board decided to broaden the shareholders' understanding of these
financial and other strategic issues facing the Company by assembling a
select group of shareholders. The criteria for selection included: past
service as a director of the Company, professional expertise, demonstrated
interest in the Company and community leadership. The shareholder group,
which consisted of 24 members (including nine Board members) who attended the
initial meeting, was assembled on May 11, 1996. Fifteen members of this
group were shareholders, but were not directors, officers or other management
of the Company. Following the May 11 meeting, participants in this
shareholder advisory group informally created three small study groups,
focusing on financial alternatives, service levels and shareholder
communications. Each of these study groups met at least once with
representatives from the Company to develop ideas for strengthening Company
operations in the particular area of focus of each group. There was only one
further meeting of the entire shareholder group, which was held in August of
1996. The group did not otherwise meet with members of the Board.

In April of 1996, the Board received an expression of interest from a
group of individual, local investors. These investors understood that the
Company needed new capital and they were interested in discussing a strategic
opportunity with the Company. The Executive Committee of the Board met with
a representative who presented a preliminary proposal to invest $2 million in
cash as working capital in exchange for control of the Company. There was no
additional commitment for capital expansion.

The Board was in the process of evaluating these investors when another
expression of interest came from another potential investor, the owner of a
major Northwest ski area. The major terms of this expression of interest
provided that this investor would create a limited liability company to
acquire the authorized but unissued shares of Class B stock of the Company.
In exchange for these shares, the limited liability company would make
$1,000,000 worth of capital improvements at the Resort in the summer of 1997,
commit to an additional $4,000,000 of such improvements during the years 1998
through 2004, and be bound to make an additional $6,000,000 in major capital
improvements later, provided there would be a sufficient internal rate of
return to the investor to justify this additional investment.

Boyne, whose initial contact with the Company was in 1983, also
re-contacted the Company and met with the Company's representatives on June
24, 1996. Although Boyne had on occasion throughout the past 13 years
expressed an interest in discussing a possible acquisition with the Company,
Boyne does not hold, nor has it ever held, any shares of the Company. Boyne
has nearly 50 years experience in developing and operating ski resorts.
Boyne has significant financial resources and has indicated to the Company
that it is primarily interested in improving the skiing facility, rather than
focusing on potential land development opportunities.

From June when it became clear that Boyne was serious and was willing to
pursue an aggressive development plan for the Resort while preserving the
Class A Share holder lift privileges, the Board focused much of its attention
on developing an agreement with Boyne while simultaneously considering the
other expressions of interest as well. The Board did not, however, attempt
to solicit expressions of interest from new parties. Each interested
potential investor was informed of the key criteria (preservation of existing
shareholder lift ticket privileges, willingness and ability to pay for and
construct major capital improvements at the Resort and experience and
reputation in the ski industry) the Board was using for evaluations, many of
which mirrored the concepts developed in negotiations with the first
potential investor.

Management and members of the Board's Capital Strategies Committee
discussed with each of the above described parties their concepts for
investing in the Company in preparation for a full Board meeting to be held
on July 31, 1996, at which time direction would be established with respect
to these opportunities. Finally, just before the July Board meeting to
evaluate and compare the various expressions of interest, another investor
group involved in another major Northwest ski area expressed interest as
well. The terms of this expression of interest were set forth as general
concepts, involving one or more unidentified parties retiring existing
Company debt and making "improvements" in 1997 in the range of $6 million to
$8 million, together with an indication of willingness to spend an additional
$12 million to $14 million through the year 2000 on "efforts" to improve the
Company's operations. A preliminary investigation by the Board into the
financial resources of this investor did not reveal a readily apparent
financial strength to support the proposed investment. In addition, the
investor refused to disclose the identity of the other parties involved. A
final weakness was that the investor did not appear to have meaningful
experience operating a major ski area.

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<PAGE>

While each of the parties had their strengths, the Board, in a meeting on
July 31, 1996, selected the Boyne proposal, which was stronger than the
proposals of the other investors and best fit the objectives established by
the Board. The particular advantages of the Boyne proposal over the
proposals of the other investors were: dealing with a well-known and
well-respected ski resort operator with regional diversity, which would help
limit the risk of unfavorable ski conditions in the Puget Sound area;
commitment to make significant capital improvements within a reasonable
period of time; financial strength to fulfill those commitments; and
preservation of the principal ski lift ticket rights currently enjoyed by the
Company's shareholders. Boyne's size and the diverse character and location
of its resorts would provide less financial vulnerability to adverse
Northwest weather conditions than would an investor whose other resorts were
all day-ski (as opposed to destination) resorts located in the Pacific
Northwest. This would allow for a more constant source of funds to make
capital improvements in the Resort, which would affect the use and enjoyment
of the lift tickets to be received by Club members from their Club
memberships after the Merger.

The dates, participants, issues discussed and conclusions for all
substantive meetings among and between representatives of the Company and
Boyne are described below.

The meeting on June 24, 1996 at the Company's offices was the first
personal meeting of John Kircher and other Boyne management with Tom Leonard,
William Jeude and Robert Carlson. The key topics of this meeting were
Boyne's interest in the Company, the possibilities for expansion and
improvement of the Resort if capital were available, the nature of the
Company's shareholder lift privileges and the Board's goal of preserving
these privileges, and Boyne's growth, goals and interests in the Puget Sound
market. The parties met again on July 10, 1996. Present were John Kircher
and counsel for Boyne, and William Jeude and Tom Leonard. The main topics of
this meeting were the restrictions which Boyne's status as an S corporation
placed on the structuring of the acquisition, options for preserving the
shareholder lift privileges, options for handling the Class B Shares, capital
commitment levels from Boyne and broad development plans. This meeting
resulted in the basic agreement set forth in the letter of intent signed on
July 30, 1996. From August 7 - 11, 1996 a number of meetings and tours took
place involving Tom Leonard and Ian McRae for the Company, and John Kircher,
Ken Sheppard (from Boyne's finance department) and counsel to Boyne. The
Boyne representatives evaluated Company financial information, contracts and
legal matters. In addition, there was a tour of the Resort and a discussion
of planning and development options. On August 9, 1996, there was a meeting
of counsel to Boyne, counsel to the Company, Robert Diercks and others to
discuss and organize the transaction. These meetings and tours resulted in
satisfaction of certain due diligence requirements of Boyne as well as more
definite development plans which would constitute part of Boyne's Qualified
Expenditure Commitment.

From August 16 - 18, 1996, certain Company Directors and management
(Robert Carlson, David Schodde, Nancy Dees, David Gossard and Tom Leonard)
conducted a due diligence trip to Brighton, Utah and Big Sky, Montana. The
main reasons for this trip were to confirm Boyne's development philosophy and
history at these two resorts, Boyne's relationships with regulators,
communities, employees and customers, as well as to conduct general business
discussions to familiarize the Board members with the quality of Boyne's
organization. Another series of meetings took place the week of September
16 - 20, 1996 in the Puget Sound area. On September 16, Tom Leonard
introduced John Kircher and other Boyne staff to the United States Forest
Service staff at the Mt. Baker Snoqualmie National Forest. The discussions
at this meeting centered around the Forest Service permit, National
Environmental Protection Act processes and the Forest Service position on
development and improvements at the Resort. On September 17, 18 and 19, Tom
Leonard, Peter Gillis and William Steel of the Company met with John Kircher
and Scott Bowen of Boyne to discuss master plan alternatives. In addition, on
the evening of September 18, John Kircher and Scott Bowen joined the
Company's Board of Directors for its regular September meeting to discuss the
progress of negotiations. This series of meetings ended with a breakfast
meeting for Tom Leonard to introduce John Kircher and Scott Bowen to the
Company's bankers, who expressed their interest in continuing to serve the
Company in the accelerated development mode which Boyne plans for the Resort.

On September 25, 1996 there was a meeting of counsel to Boyne, counsel to
the Company and officers and directors of the Company including Larry Hard,
Robert Carlson, Peter DeLaunay, William Jeude, Robert Diercks (by telephone)
and Tom Leonard to discuss alternative structures for the deal, in particular
an asset purchase versus a stock acquisition, and the tax and legal issues
associated with these alternatives. This meeting solidified the

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<PAGE>

parties' agreement on a stock acquisition by merger involving creation of the
Club. On October 2, 1996 counsel to Boyne met with counsel to the Company
and officers and directors of the Company including Tom Leonard, William
Jeude and Larry Hard regarding the structure of the acquisition. It was
agreed to prepare a revised letter of intent. An amended and restated
letter of intent agreeing upon substantially the transaction described in
this proxy statement was signed on October 15, 1996.

On October 24, Tom Leonard and Julie Meslow (marketing director for the
Company) met with John Kircher and Scott Bowen to discuss general business
matters, marketing, ticketing, pricing and master plan ideas. This meeting
was followed by an October 30, 1996 meeting of counsel to Boyne and counsel
to the Company to discuss Company counsel's comments on drafts of definitive
merger documents and a November 7, 1996 meeting of counsel to Boyne and
counsel to the Company to review the draft documents and agree upon
modifications. The resulting drafts were distributed to the working group.
The Company's Board met on November 12, 1996 to review and discuss the
proposed definitive Merger Agreement in detail. The Board proposed certain
changes to the draft agreement, which were communicated to counsel to Boyne.
The final terms of the Merger Agreement and related agreements were worked
out in late November and early December, and the Merger Agreement was signed
on December 6, 1996.

On November 22, 1996, Tom Leonard and various Company staff led John
Kircher and Scott Bowen on a ski tour of the Resort. On December 11 and 12,
1996, a two day mountain facilities planning session was held involving Tom
Leonard, Peter Gillis and William Steel (for the Company) and John Kircher,
Scott Bowen and Beatt Van Alman (an independent mountain planner engaged by
Boyne) to address the master plan, lift and preliminary restaurant design
plans. This meeting was followed by two meetings on December 16 involving Tom
Leonard, John Kircher and counsel to Boyne, the first with the Company
bankers to address the financing of Boyne's capital and operating plans for
the Company; the second with Hansen, Hansen & Johnson, Architects and
Contractors, regarding the goals in development of the restaurant and
construction budgets as well as design concepts, schedules, and design/build
approaches.

Tom Leonard, Peter Gillis, Jeff Schweter, William Steel and George
Schmidt, for the Company, and John Kircher and Scott Bowen for Boyne met
again on February 7, 1997 to discuss the master plan schedule, summer
operation alternatives, summer 1997 construction plans, and general business
approaches once the shareholder approval is complete.

RECOMMENDATION OF THE BOARD OF DIRECTORS

FACTORS CONSIDERED BY THE BOARD OF DIRECTORS

In reaching its decision to approve the Merger Agreement, and the
transactions contemplated thereby, the Board considered the factors listed
below. The factors listed below are all of the material factors that were
considered by the Board. All of these factors supported the Board's conclusion
to recommend approval of the proposed transaction:

(i) desire to continue the lift privilege benefits to holders of
Class A Shares, as said lift privileges are the principal benefit
associated with the Class A Shares;

(ii) present financial condition and operating history which
the Board believes make it unlikely that the Company could
continue as a going concern should the Company experience further
losses in the near future;

(iii) the inability of the Company to obtain additional
capital by issuing shares or incurring new debt, as the Board has
determined that such financing would not be available on terms
acceptable to the Company, if at all;

(iv) various other alternatives available to the Company,
which include reducing shareholder lift privileges, capital
restructuring, finding another purchaser, and/or scaling back
capital investment, which would reduce the value of the Class A
Shares and adversely affect the quality of the Resort;

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(v) the amount of capital investment to be made in the Resort
under the Qualified Expenditure Agreement, which was significant
in light of the relationship of the Resort facilities to the
enjoyment of the Club membership units;

(vi) Boyne's financial and operating resources and history as
a developer and operator of ski resorts in the United States,
which demonstrates Boyne's interest and ability to develop high
quality ski resorts, which is significant to the value of the
Club membership units; and

(vii) the opinion of Houlihan Valuation Advisors that the
consideration to be received by the shareholders under the Merger
Agreement is fair to the shareholders of the Company from a
financial point of view.

The Board also evaluated the new restrictions on transferability.
Whereas the Class A Shares are freely transferable, the Club membership units
are not transferable, with the exception of specific family, death and
divorce-related transfers, and surrender to the Club at the members' request.
Surrender to the Club is discussed herein under "The Club - Transferability
of Crystal Mountain Founders' Club Membership Units." The Board evaluated
the possibility of having unrestricted transferability of membership units.
The Board concluded, however, that the absence of restrictions on
transferability may cause Club membership units to be deemed to be
"securities" within the meaning of the federal securities laws, which would
have imposed regulatory requirements which might have increased the Club's
expenses to such a degree that the Club would not be financially viable. As
a result, the Board decided that Club memberships could not be sold or
otherwise transferred by members except back to the Club, with the exception
of specific family, death and divorce related transfers. The Board evaluated
the significance of restrictions on transferability from the point of view of
a shareholder, considering the average number of shares per holder, the
average time period that a holder holds Class A Shares and the average number
of transfers per year. Based on the relatively few shares held per
shareholder, and the low number of trades per year, the Board determined that
the restrictions on transferability of Club membership units were acceptable.

The Board considered each of the factors to be important, and did not
attempt to give special weight or emphasis to any particular factors, with
the exception of the preservation of the lift privileges and the ability to
make capital improvements, both of which were of critical importance to the
shareholders as shareholders and as lift privilege holders. The proposed
Reorganization and Merger is complex, with one factor, the preservation of
lift privileges, unique to the structure of the Company. The Board believes
that the right to receive lift tickets is the single, dominant factor
determining the value of the Class A Shares to the Class A Share holders as
said lift privileges are the primary benefit associated with ownership of the
Class A Shares.

In negotiating a total value of $220 per Class A Share for the Company's
stock in the Reorganization and the Merger, the Board focused on the
maintenance of an on-going lift ticket privilege. The shareholders who elect
to receive at least 20 Club membership units will retain what the Board
believes to be the major value associated with the Class A Shares -- the lift
privileges. All Class A Share holders currently enjoying lift ticket
privileges have the right to elect to receive at least 20 Club membership
units. For these shareholders, the Reorganization and Merger result in their
retaining the principal benefit which they gained from being a Class A Share
holder, while also receiving the other benefits of Club membership and $65.52
in cash in the Merger. Given that Class A Share holders may retain the lift
privileges, the Board did not believe that it was necessary or appropriate to
obtain an independent valuation of the Club membership units apart from the
Houlihan Valuation Advisors Fairness Opinion.

SHAREHOLDERS ELECTING ALL CASH

For Class A Share holders who elect to receive the $154.48 in cash in lieu
of Club membership units for some or all of their Class A Shares, the analysis
was more complicated. The Board believes that the recent trading price for
Class A Shares may not accurately reflect the value of the Class A Shares.
Trades in the Class A Shares are relatively infrequent and such trades, when
they occur, generally involve a very small number of shares (between 20 and 40
Class A Shares). Given that the market for the Class A Shares is very thin (a
small number of trades per year), the Company believes that the recent trading
price (listed herein under "Market Price of the Common Shares and Related
Shareholder Matters - Market Information") does not accurately reflect the true
value of the Company's Class A Shares. Based on the foregoing, the Board
believes that the price of the Company's 1987

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public offering of the Class A Shares, for $220 per Class A Share, is the
most reliable approximation of fair market value for the Class A Shares.

The Board did not, however, ask Houlihan to determine that the price of
$220 per share payable to shareholders who elect not to receive Club
memberships would be fair to those shareholders, nor did the Board undertake
any analysis, seek any advice or take any other steps to make such a
determination. The Board did not believe that such a determination was
necessary, in light of the fact that all Class A shareholders have the
opportunity to elect to receive lift privileges in the form of Club
memberships.

As for the Class B Shares, which bear no lift ticket rights, the Board
determined that there was no real market for these shares. No Class B Shares
have ever been traded.

In addition to relying on its own determination, in concluding that the
transaction was financially fair to the Company shareholders, the Board
relied on the fairness opinion of Houlihan Valuation Advisors.

RECOMMENDATION OF THE BOARD OF DIRECTORS

The Board of Directors of the Company believes the transaction described
herein is fair to the shareholders of the Company, and unanimously recommends
that the shareholders of the Company vote for the proposal to approve the
Merger Agreement and the Merger and to amend the Company's articles of
incorporation.

The Board does not take a position as to the fairness of the transaction
to Class A Share holders who do not elect to receive Club memberships in the
Reorganization

SHAREHOLDER REJECTION OF THE MERGER AGREEMENT

Consideration of the consequences of shareholder rejection of the Merger
Agreement requires consideration of the Company's current and likely future
financial position. The Company has been structured to serve 350,000 to
450,000 skiers per year. Recent weather variability and regional competition
has dropped the Resort's total visits to a 250,000 to 300,000 per year range
resulting in lower revenues to support a cost structure aimed at full service
for more skiers. This has resulted in losses for the last three years even
with budget revisions and cost reduction measures undertaken by management.
Continued losses will jeopardize the Company's ability to maintain its
current good relationship with its lenders and may force some sort of capital
restructuring. Inevitable bad weather years will limit the Company's ability
to make the capital improvements required to maintain the Company as one of
the premier ski resorts in the region.

Customer driven demands for improved facilities require large capital
investment, which the Company is not able to make given its financial
condition. Customer demands are influenced by destination resorts such as
Whistler/Blackcomb, Sun Valley and Mt. Bachelor. Although recent
restructuring has improved the Company's ability to deal with bad weather
years, the Company's existing credit facility may be insufficient to fund
necessary capital improvements to maintain the Resort and remain competitive.
The credit estimated to be available for capital expenditures under the
current credit facility as of December 19, 1996, is $465,398. Another
unsuccessful year will put the Company in violation of loan covenants,
particularly the requirement that the Company not exceed a specified ratio of
debt to equity. Violation of loan covenants could permit the bank to cut off
further lending and to accelerate outstanding loans so they become
immediately due and payable. These loans are secured by substantially all of
the Company's assets, including the Company's interest and rights under its
Forest Service Special Use Permit. Even if the 1996-1997 season were
relatively good, a lack of liquidity and access to capital would remain a
major obstacle to the development of the Resort facilities.

Another major concern is the Company's need to make significant capital
investments in order to implement a new master plan. In addition to being
necessary for the Resort to remain competitive, some improvements are
required for the Company to remain in compliance with its Forest Service
Permit. The Board has investigated the possibility of obtaining additional
equity or debt financing and has determined that none is available on terms
as acceptable to the Company as the Boyne offer. Based on Company performance
over the last decade, it would be difficult, if not impossible, for the
Company to fund this amount of capital investment solely from operating
income within a ten year time frame.

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The Company believes that continuation of losses would force the Company to
forego capital improvements, reduce its service level and restrict development.
Steps to preserve financial viability at lower revenue levels could include:
reducing (by increasing the activation fee) or removing the lift privileges
associated with the Class A Shares, eliminating summer operations, closing for
those periods during the ski season which are generally not profitable, reducing
trail and other non-essential maintenance work, limiting some food and beverage
service, not modernizing equipment, and/or reducing avalanche control services
(resulting in closure of certain areas within the Resort).

If the Merger is not consummated, the Company will evaluate its options
following completion of the current ski season, which is expected to end in
mid-April. Alternatives could include: (i) making no significant change from
current operations, (ii) taking measures described above to reduce operating
expenditures so that funds will be available for necessary capital improvements
or (iii) attempting to structure another sale transaction, which might not
preserve the lift ticket privileges. The option followed will depend on the
financial condition of the Company and the Board's evaluation of the best
interests of the shareholders. IF THE SHAREHOLDERS REJECT THE PROPOSAL, THE
COMPANY'S FINANCIAL CONDITION MAY TEMPORARILY OR PERMANENTLY RESULT IN THE LOSS
OR REDUCTION OF THE LIFT PRIVILEGES ASSOCIATED WITH THE CLASS A SHARES BECAUSE
THE COMPANY'S CREDITORS MAY ACCELERATE THE OUTSTANDING DEBTS WHICH ARE SECURED
BY SUBSTANTIALLY ALL OF THE COMPANY'S ASSETS.

Given the Company's current financial condition and the inherent
unpredictability of the Resort's results of operations due to its dependence on
weather, the Board has determined that it is in the best interests of the
shareholders to engage in the proposed transaction. The present condition of
the Company is such that the Board successfully negotiated a transaction
preserving the Class A Share holders lift ticket privileges.

If the Merger Agreement and the Merger and amendments to the articles of
incorporation contemplated therein are approved, the current shareholders of the
Company will no longer have a financial stake in the Company's operations, and
hence will no longer share in the future economic success of the Company. If
the Merger is consummated, the improvements to the Resort will benefit
shareholders only tangentially through the lift privileges they receive as
members of the Club.

FAIRNESS OPINION OF THE COMPANY'S FINANCIAL ADVISOR

GENERAL

The Company has retained Houlihan Valuation Advisors ("HVA"), which
rendered to the Board of Directors of the Company an opinion as to the fairness,
from a financial point of view, of the Merger Agreement to the shareholders of
the Company. A copy of HVA's written opinion dated December 2, 1996 is attached
as Appendix C to this Proxy Statement and is incorporated herein by reference.
The summary of the opinion of HVA set forth in this proxy statement, while
containing all material elements of such opinion, is qualified in its entirety
by reference to the full text of such opinion.

In arriving at its opinion, HVA made such reviews, analyses and inquiries
as it deemed necessary and appropriate under the circumstances. In conducting
its analysis and forming its opinion, HVA's analysis included: (a) audited
financial statements for the Company and unaudited financial statements for
Boyne for the fiscal years ended 1992-1996, (b) the Forest Service Permit, (c)
certain documents related to the transaction, (d) the credit facility and
amendments thereto with Seafirst Bank, (e) the Form 10-KSB for the Company for
the seven month period ended April 30, 1996 and the fiscal year ended September
30, 1995, (f) the Form 10-QSB for the Company for the quarters ended December
31, 1995, March 31, 1996 and July 31, 1996, (g) certain publicly available
information regarding Boyne and the Company, (h) an analysis of the price and
volume information for the Company's publicly traded common stock, (i) certain
other publicly available information, including data on recent transactions
involving other publicly traded ski resort companies, and (j) due diligence
discussions regarding matters pertinent to their analysis with senior
operational management of the Company and Boyne including (1) the operations,
financial condition, future prospects and projected operations and performance
of the Company, (2) awareness of any events or conditions which might cause any
of the assumptions set forth the fairness opinion to be incorrect, and (3)
whether management was aware of any material change in their respective
company's assets, financial condition or business outlook since the date of the
financial statements reviewed.

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ASSUMPTIONS AND LIMITING CONDITIONS

With the approval of the Directors of the Company, HVA relied upon and
assumed the completeness, accuracy and fair presentation of all of the financial
and other information, data, advice, opinions, and representations obtained by
it from public sources, contained in the letter of intent between the Company
and Boyne, or provided to it by the Company or Boyne or their respective
affiliates or advisors. HVA assumed that the business plans, financial
estimates and projections provided to it by the Company and Boyne represented
their best estimates of the most probable results for their respective companies
for the periods covered. HVA did not attempt to verify independently the
accuracy or completeness of any such information, data, advice, opinions,
representations, business plans, forecasts and projections and hence has made no
representations or warranties and expresses no opinion regarding the accuracy or
reasonableness of same.

ANALYSIS

The following is a brief summary of the material analysis performed by HVA.

In rendering its fairness opinion to the Board of Directors of the Company,
HVA reviewed, considered and performed a variety of financial and comparative
analyses. The preparation of a fairness opinion involves various determinations
as to the most appropriate and relevant assumptions and methods of financial
analysis and the application of these methods to the particular circumstances;
therefore, such an opinion is not necessarily susceptible to partial analysis or
summary description. No specific weightings were given to any of the various
methodologies employed, rather, qualitative judgments were made based on HVA's
experience in rendering such opinions and on circumstances then prevailing as to
the significance and relevance of each analysis and factor. Any attempt to
select portions of its analysis or of the factors considered without considering
all factors and analyses employed would create an incomplete and misleading view
of the process underlying HVA's opinion.

In arriving at its opinion as to fairness, from a financial point of view,
of the proposed transaction to the Company's shareholders, HVA conducted
analyses of many factors including, but not limited to, the historical financial
operating characteristics of the Company, the industry in which the Company
operates, the regional economic and competitive characteristics of the market in
which the Company operates, financial operating projections for the Company, the
projected capital needs of the Company, selected comparable transactions,
discounted cash flow, immediate benefits that are to accrue to the Company
shareholders resulting from the proposed transaction, future benefits that are
to accrue to the Company's shareholders associated with lift ticket privileges,
as well as other factors.

HVA's analyses included, but was not limited to, a capitalization of income
approach relative to the historical net free cash flow and earnings of the
Company, discounted cash flow approaches relative to projected net free cash
flow of the Company and projected future benefits to accrue to the Company's
shareholders from retained lift ticket privileges, and selected comparable
transactions analysis.

HVA analyzed publicly available information on selected recent transactions
it deemed comparable to the proposed transaction. While this approach can at
times provide a useful barometer of current ski resort market conditions,
numerous limitations to this approach exist such as significant differences in
size of resorts, assets owned by various resorts (i.e., real estate holdings,
etc.), status of development, condition of equipment, markets served by specific
resorts, weather patterns, availability of water and installed snowmaking, and
other similar factors. Given the inherent limitations of this approach, HVA
made certain qualitative judgments which are reflected in reaching its
conclusion as to the fairness of the proposed transaction to the Company
shareholders from a financial point of view. For purposes of its analysis, HVA
did not prepare nor was it requested to prepare, a formal valuation of either
the Company or Boyne.

HVA's analyses included, but were not limited to, a capitalization of
income approach relative to the historical net free cash flow and earnings of
the Company and discounted cash flow approaches relative to projected net free
cash flow of the Company. In addition, an analysis of selected comparable
transactions was made as well as an analysis of the projected future benefits to
accrue to the Company shareholders from retained lift ticket privileges and an
analysis of recent transactions in the Company's stock.

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Capitalization of Income Analysis: The historical operating results of the
Company were reviewed, analyzed, and adjustments made to eliminate non-recurring
income and expense items to provide a basis to analyze historical income, the
current financial condition of the Company, and the future prospects for the
Company.

Discounted Cash Flow Analysis: With respect to the discounted cash flow
analysis, HVA relied upon the cash flow projections prepared by the Company
management. It reviewed the methodologies and assumptions used in the
construction of these cash flows for their reasonableness. In addition,
sensitivity analyses were performed using cash flow assumptions deemed by HVA to
be appropriate. The analysis included a reviews of the projected capital
expenditures required to generate the Company's projected income. The
projections assumed that the Company shareholder life ticket privileges would
remain in existence in perpetuity.

Selected Comparable Transactions Analysis: HVA analyzed publicly available
information on selected recent transactions it deemed comparable to the proposed
transaction. While this approach can at times provide a useful barometer of
current ski resort market conditions, numerous limitations to this approach
exist, such as significant differences in size of resorts, assets owned by
various resorts (real estate holdings, etc.), status of development, condition
of equipment, markets served by specific resorts, weather patterns, availability
of water and installed snowmaking, and other similar factors. Given the
inherent limitations of this approach, HVA made certain qualitative judgments
which are reflected in reaching its conclusion as to the fairness of the
proposed transaction to the Company shareholders from a financial point of view.

Capitalization of Shareholders Lift Ticket Privileges Analysis: As the
transaction is structured, a significant portion of the benefits to accrue to
the Company shareholders will be in the form of future lift ticket privileges.
In conducting its analysis of the value of such future benefits, HVA considered
the financial and operational strength of Boyne, trends in the ski resort
industry, the ability of Boyne to meet its capital investment obligations under
the terms of the Qualified Expenditure Agreement, and other factors that
pertained to the future prospects of the Company.

Recent Transactions in Class A Shares: HVA reviewed recent and historical
transactions in the Company's Class A common stock. Over the years, several
transactions have occurred, mostly on a private basis. The overall percentage
of outstanding shares traded in a twelve month period has been small and is not
deemed by HVA to be representative of an active public market for the Company's
stock. Indicated multiples of earnings before interest and taxes and earnings
before interest, taxes, depreciation and amortization were analyzed and compared
to public market comparables. The multiples indicated by the limited
transactions in the Company's Class A Shares are significantly above those
indicated for comparable companies whose stock is actively traded on public
exchanges. Considering the above factors and the existing financial condition
of the Company, HVA deemed that the limited recent arm's length transactions in
the Company's Class A Shares were not necessarily indicative of the fair market
value of the Company.

Several other approaches were considered but not utilized in HVA's
analysis. A market trading analysis was not utilized as there are no publicly
traded companies with operations comparable to the Company. Asset value
approaches were also not utilized as they were not deemed to provide useful
results.

Other Considerations: In reaching its conclusions, HVA reviewed and
considered other qualitative factors that would be relevant to the Company's
shareholders, including, but not limited to, market presence, liquidity,
financing leverage, financial strength, and management depth. It was concluded
that of the various aspects of the proposed transaction, none were deemed to be
of detriment to shareholders in a material respect

CONCLUSION

As noted above, HVA was not requested to determine that the price of $220
per share payable to shareholders who elect not the receive Club memberships
would be fair to those shareholders. Based on the foregoing and in reliance
thereon, it is the opinion of HVA that the proposed transaction, assuming it is
consummated as proposed, is fair from a financial point of view to the
shareholders of the Company whose shares are being acquired in the proposed
transaction in exchange for $65.52 in cash and the Club membership units. HVA

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provides its opinion as of March 7, 1997 and disclaims any undertaking or
obligation to advise any person of any change in any fact or matter affecting
the opinion which may come or be brought to HVA's attention after the date
hereof. Without limiting the preceding, in the event that there is any material
change in any fact or matter affecting the opinion after March 7, 1997, HVA
reserves the right to change, modify or withdraw its opinion.

It is HVA's understanding that Company's Board of Directors and
shareholders either have had or will have the opportunity to make their own
independent investigation of the proposed transaction, and their decision to
participate in the proposed transaction should be based primarily on such
investigation. Delivery of HVA's opinion to the Company's Board is subject to
the conditions, limitations and assumptions set forth therein.

HVA's opinion is furnished solely for the benefit of the shareholders and
Directors of the Company and may not be relied upon by any other person without
HVA's express, prior written consent.

The fairness opinion will be updated effective at the Merger Time.

NOTIFICATION IN THE EVENT THE FAIRNESS OPINION IS WITHDRAWN

If HVA exercises its right to withdraw the fairness opinion, shareholders
will be notified immediately by mail. If such a withdrawal occurs within four
days before the Annual Meeting, making it likely that notice by mail would not
reach the shareholders before the meeting, all shareholders who have submitted
proxies will be notified by telephone of the withdrawal and given the option to
revoke their proxies. In any event, such a withdrawal will also be announced
at the opening of the Annual Meeting.

INTERESTED PERSONS

KEY EMPLOYEES.

The Company has entered into employment agreements with the following
executive officers: Tom Leonard, President (also a member of the Board of
Directors); Peter Gillis, Vice President of Mountain Operations; and George
Schmidt, Director of Finance and Systems. The Company's existing employment
agreements with Messrs. Leonard, Gillis, and Schmidt will remain in effect after
the Merger.

Mr. Leonard's employment agreement provides that in the event the Merger
(or another similar transaction) results in his termination, other than for
cause as defined therein, he will continue to receive, as severance pay, his
then current salary (but not any bonus) monthly through April 1999, together
with agreed-upon insurance benefits. In the absence of the Merger (or another
similar transaction), Mr. Leonard would receive similar benefits, but only for a
period of six months. Mr. Leonard's current annual salary is $102,000. In
addition, Mr. Leonard is entitled to a $45,000 "salary continuation payment" if
his employment is terminated for any reason (with or without cause, and whether
or not the Merger occurs), including disability or death.

Mr. Gillis' employment agreement includes a similar provision, but does not
call for a "salary continuation payment." Mr. Gillis' current annual salary is
$69,000.

Mr. Schmidt's rights on termination of his employment would not be affected
by the Merger.

FORMER AND CURRENT DIRECTORS OF THE COMPANY.

Before the Merger, the Company will enter into an agreement to issue
forever during their lifetime, annually and without charge, to all former and
current members of the Company's Board, determined as of July 31, 1996, two
season's passes (or the equivalent dollar value of day lift ticket credits) for
use at the Resort during each ski season. These privileges for Board members
would not be transferable except to family member designees. This commitment by
the Company is a continuation and formalization of existing policy.

STAATZ TRANSACTION.

Wallace Staatz owns 700 of the 710 Class B Shares and 245 of the Class A
Shares. Mr. Staatz has granted Boyne an irrevocable proxy to vote all of his
shares in favor of approval of the Merger Agreement and the Merger and the
amendment of the Company's articles of incorporation. Mr. Staatz has also
irrevocably elected to take cash in lieu of Club membership units in the
Reorganization. In addition, Mr. Staatz has entered into a consulting
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agreement that will be effective only if the Merger is consummated, pursuant
to which he would perform consulting services over a three-year period and
would receive a lump-sum payment of $248,256.

REGULATORY MATTERS

The Company is not aware of any material governmental approvals that are
required for the consummation of the Reorganization or the Merger, or the
establishment and operation of the Club. The Company's United States Forest
Service permit requires it to notify the Forest Service of the change in control
effected by the Merger after it occurs. The consent of the United States Forest
Service is not required for the Reorganization or the Merger.

As of the date of this Proxy Statement, the Club has not yet requested
Internal Revenue Service recognition of its status as a federally tax exempt
organization under Internal Revenue Code Section 501(c)(7). The Club will do so
promptly after the Reorganization is consummated.

THE REORGANIZATION AGREEMENT AND AGREEMENT AND PLAN OF MERGER

The following description of all material terms and conditions of the
Merger Agreement and the Reorganization and Merger contemplated therein is
qualified in its entirety by reference to the Merger Agreement. The terms of
the Merger Agreement are the result of arms' length negotiations between
representatives of the Company and Boyne.

THE REORGANIZATION

Each Class A Share holder will receive a distribution from the Company. If
the shareholder so elects on the enclosed Distribution Election Form PRIOR TO
THE VOTE AT THE ANNUAL MEETING, he or she (and his or her designees) will
receive one Club membership unit for each Class A Share held by such
shareholder. Alternatively, a Class A Share holder may elect to receive $154.48
in cash for each Class A Share held by such shareholder. Club membership units
will be distributed on the Reorganization Date, which is currently scheduled to
be March 28, 1997. Club members who pay annual dues will receive lift tickets
beginning in October, 1997 (the Company will honor existing shareholder lift
privileges before that time). Payment of the $154.48 will be made between 121
and 150 days after the Reorganization Date. ANY HOLDER OF CLASS A SHARES WHO
FAILS TO MAKE A TIMELY ELECTION WILL RECEIVE ONLY CASH AND WILL NOT POSSESS ANY
LIFT PRIVILEGES BECAUSE SUCH A HOLDER OF CLASS A SHARES WILL NOT RECEIVE ANY
CLUB MEMBERSHIP UNITS IN THE REORGANIZATION. SHAREHOLDERS RECEIVING ONLY CASH
IN THE REORGANIZATION WILL NOT POSSESS ANY LIFT PRIVILEGES AFTER THE
REORGANIZATION BECAUSE SUCH HOLDERS WILL NOT POSSESS ANY CLUB MEMBERSHIP UNITS.

The Company will amend its articles of incorporation and bylaws to
eliminate the lift privileges associated with the Class A Shares by deleting all
language granting the lift privileges. The Company will also amend its articles
of incorporation and bylaws to allow for the distribution of Club membership
units or $154.48 in cash per Class A Share. The Company will file the articles
of amendment effectuating said amendments with the Secretary of State of the
State of Washington on the Reorganization Date.

The Company has not obtained an independent valuation of the Club
membership units.

THE MERGER

Newco, a Washington corporation 100% owned by Boyne, will merge with and
into the Company. The separate existence of Newco will cease and the Company
will be the surviving corporation possessing all of the rights, privileges,
powers and franchises and subject to all of the restrictions, disabilities and
duties of the Company and of Newco.

All Class A Shares and Class B Shares in the Company held by the Company as
treasury stock or owned by Boyne or any Boyne subsidiary immediately prior to
the Merger will be canceled. Each share of Newco common stock outstanding
immediately prior to the Merger will be converted into and become one share of
common stock of the surviving Company and will constitute the only outstanding
shares of capital stock of the surviving Company. All Class A Shares and
Class B Shares of the Company outstanding immediately prior to the Merger will
be converted into the right to receive $65.52.

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Boyne will appoint a payment agent for the purpose of distributing the cash
payable in the Merger. Each holder of Class A Shares or Class B Shares that
have been converted into a right to receive the $65.52 from the Merger will
receive said cash upon surrender to the payment agent of the certificate(s)
representing such shares, together with a properly completed letter of
transmittal covering such shares. The payment agent will be available to accept
the surrendered certificates and pay the Merger consideration as of the Merger
Time, which is currently planned to be March 31, 1997. Forms of letter of
transmittal will be distributed shortly after the Merger, if it is approved.
Each stock certificate will, after consummation of the Merger, represent for all
purposes only the right to receive the $65.52 per share cash payable in the
Merger. If, after the Merger, a Dissenting Shareholder fails to perfect or
withdraws or loses his or her right to payment as a Dissenting Shareholder, such
shares will be treated as if they had been converted at the time of the Merger
into a right to receive $65.52 in cash.

CLOSING

The Merger Agreement provides that the Reorganization will be consummated
on the earliest practicable date after December 31, 1996 on which the conditions
set forth in Article 4 of the Merger Agreement are satisfied or waived.
Articles of amendment to effect the amendment to the Company's articles of
incorporation will be filed with the Secretary of State of the State of
Washington on that same day. The Company will file articles of merger to effect
the Merger with the Secretary of State of the State of Washington on the
following business day. The Company expects, if the Merger Agreement, the
Merger and the proposed amendment to the Company's articles of incorporation are
approved by the shareholders at the Annual Meeting, that the Reorganization
would be consummated on March 28, 1996 and the Merger would be consummated on
March 31, 1996.

CONDITIONS TO CLOSING

The obligations of both the Company and Boyne to consummate the
Reorganization and the Merger are conditioned upon the satisfaction or waiver of
certain conditions including: (i) Company shareholder approval of the amendment
to the articles of incorporation of the Company, the Merger and the Merger
Agreement; (ii) that no provision of applicable law, regulation or court order
prohibits the consummation of the transactions; and (iii) that no proceeding has
been filed seeking to prohibit the transactions contemplated by the Merger
Agreement. Each of these conditions may be waived by a joint written waiver by
the Company, Boyne and Newco. However, the Reorganization and Merger cannot be
consummated if either of the first two conditions is not satisfied. In
addition, the Company does not anticipate that the third condition would be
waived if not satisfied.

The obligation of Boyne to consummate the Reorganization and the Merger is
subject to additional conditions, including: (i) the performance in all
material respects of all of the covenants and agreements of the Company
contained in the Merger Agreement; (ii) the representations and warranties of
the Company being true in all material respects; (iii) that no court, arbitrator
or other governmental office has issued any order, and there is no statute or
other rule, restraining the effective operation of the business of the Company
after the Merger; (iv) the aggregate number of Class A Shares and Class B Shares
held by Dissenting Shareholders being less than 1,000, excluding shareholders
who hold more than 200 Class A Shares of record as of July 31, 1996 (Wallace
Staatz, the only person known to hold more than 200 Class A Shares as of
July 31, 1996, has agreed not to dissent); (v) receipt of a certificate of the
Chairman of the Board and the President of the Company as to the satisfaction of
certain conditions; (vi) receipt of a legal opinion from LeSourd & Patten P.S.;
and (vii) receipt by Boyne of all documents reasonably requested relating to the
existence of the Company and the Club and authority of persons executing
agreements on their behalf. Each of these conditions may be waived by Boyne,
but the Company does not anticipate that Boyne would waive any of these
conditions if not satisfied.

The obligation of the Company to consummate the Reorganization and the
Merger is also subject to various additional conditions, including (i) the
performance in all material respects of all of the covenants and agreements of
Boyne and Newco contained in the Merger Agreement; (ii) the representations and
warranties of Boyne being true in all material respects; (iii) receipt of a
certificate of an officer of Boyne as to the satisfaction of certain conditions;
(iv) receipt of legal opinions addressed to the Club from Bogle & Gates P.L.L.C.
and from John S. Clark, Michigan counsel for Boyne; and (v) receipt by the
Company of all documents reasonably requested relating to the existence of Boyne
and Newco and authority of persons executing agreements on their behalf. Each
of these conditions may be waived by the Company, but the Company does not
intend to waive any of these conditions if not satisfied.
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The obligations of both the Company and Boyne to consummate the Merger are
subject to the condition precedent that the Reorganization has occurred.

REPRESENTATIONS, WARRANTIES AND COVENANTS

The Merger Agreement contains a number of representations, warranties and
covenants made by the Company and Boyne.

The Company has made representations and warranties to Boyne regarding:
(1) its corporate existence and power; (2) the Company's authorization of the
transactions; (3) governmental authorizations and third-party consents; (4)
non-contravention of corporate documents, law and contracts; (5) the Company's
capitalization; (6) the accuracy of SEC filings; (7) the accuracy of the
Company's financial statements; (8) the absence of certain changes since
April 30, 1996; (9) the absence of undisclosed material liabilities;
(10) current stockholder lift privileges; (11) pending and threatened
litigation; (12) insurance coverage; (13) compliance with laws, including laws
applicable to operating the Company's lifts; (14) environmental matters;
(15) compliance with building laws; (16) the status of (and the effect of the
transactions on) the Company's Forest Service permits; (17) other licenses and
permits; (18) the existence and condition of the Company's properties;
(19) material contracts; (20) intellectual property; (21) the Company's
employees; (22) employee benefits; (23) filing of returns and payment of taxes;
(24) the absence of any former or present affiliates of the Company, for whose
tax or employee benefit obligation the Company could be liable; (25) Company
investments and the absence of Company subsidiaries; (26) the absence of any
brokers' or finders' fees in connection with the transactions; (27) the accuracy
of information regarding the Company provided to Boyne; (28) the accuracy of
this Proxy Statement and other disclosure documents, and compliance of the same
with applicable law; and (29) the status of the Club, including its corporate
power and existence, authorization by it of the transactions, governmental
authorizations, absence of prior activities and certain provisions of the Club's
bylaws.

In addition, the Company has covenanted with Boyne that it will:
(1) conduct its business in the ordinary course consistent with past practice
pending the Merger; (2) allow Boyne access to information regarding the Company;
(3) not solicit or entertain any other acquisition proposals; (4) notify Boyne
of certain relevant events; and (5) form the Club.

Boyne has made representations and warranties to the Company regarding:
(1) its corporate existence and power; (2) Boyne's authorization of the
transactions; (3) governmental authorizations and third-party consents; (4)
non-contravention of corporate documents, law and contracts; (5) the absence of
any brokers' or finders' fees in connection with the transactions; (6) the
accuracy of information regarding Boyne provided to the Company; and (7) the
accuracy of information regarding Boyne furnished by Boyne to the Company for
use in this Proxy Statement and other disclosure documents.

In addition, Boyne has covenanted with the Company that it will:
(1) maintain the confidentiality of certain information; (2) cause Newco to
perform its obligations; and (3) indemnify officers and directors of the Company
for five years after the Merger Time, and maintain related liability insurance.

TERMINATION

The Merger Agreement is terminable (i) by the mutual written consent of the
Company and Boyne at any time prior to consummation of the Reorganization;
(ii) by the Company, at any time after the Drop-Dead Date, if the Reorganization
has not been consummated even though all conditions precedent to the obligations
of Boyne and Newco to consummate the Reorganization have been satisfied or
waived by Boyne; (iii) by Boyne, at any time after the Drop-Dead Date, if the
Reorganization has not been consummated even though all conditions precedent to
the obligations of the Company to consummate the Reorganization have been
satisfied or waived by the Company; (iv) by either the Company or Boyne, if the
shareholders fail to approve the Merger Agreement, the Merger and the proposed
amendment to the articles of incorporation; (v) by either the Company or Boyne,
at any time after the Drop-Dead Date, if the Reorganization has not been
consummated and there is a law, regulation or legal order prohibiting the
consummation of the Reorganization or the Merger or a legal, administrative, or
arbitration proceeding has been instituted by someone other than the parties to
the Merger Agreement seeking to prohibit the transaction; or (vi) by Boyne, if,
prior to the Merger, any person, entity or group other than Boyne or Newco
acquires beneficial ownership of 50% or more of the outstanding Class A Shares.

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FEES AND EXPENSES

All costs and expenses incurred by the Company or by Boyne in connection
with the Merger Agreement will be paid by the party incurring such expense,
except in the event of termination under Section 9.2 of the Merger Agreement.
Among other things, Section 9.2 provides that if the Merger Agreement is
terminated in certain circumstances, Boyne will pay certain transaction expenses
incurred by the Company.

PROCEEDS TO SHAREHOLDERS FROM THE REORGANIZATION AND THE MERGER

All Company Class A Share holders will receive consideration per share
consisting of:

(i) $65.52 in the Merger upon presentation of their share certificates to the
payment agent; and

(ii) at the timely election of each Class A Share holder, either one Club
membership unit per share OR $154.48 in cash per share in the
Reorganization, or some combination of Club membership units and cash.

Class B Share holders will receive $65.52 in the Merger upon presentation
of their share certificates to the payment agent.

THE CLUB

ESTABLISHMENT OF THE CRYSTAL MOUNTAIN FOUNDERS' CLUB

The Club will be a nonprofit membership organization whose members hold
varying numbers of Club membership units. The total number of authorized
membership units will be limited to the number distributed by the Company on
the Reorganization Date. Annual dues per membership unit will be set by the
Club's board of trustees from time to time and will not be less than 5%, nor
more than 10%, of the then-current retail price of a weekend lift ticket (unless
a higher dues level is approved by the Club members). Adult weekend lift ticket
prices for the last seven years are as follows:

YEAR ADULT WEEKEND LIFT TICKET PRICE
--------- --------------------------------

1996-1997 $35
1995-1996 $33
1994-1995 $32
1993-1994 $31
1992-1993 $28
1991-1992 $28
1990-1991 $28

The Club dues will be payable by October 31 each year, beginning October 31,
1997. A Club member who fails to pay dues by October 31 will remain a member of
the Club, but will have no lift privileges for that year.

Members acquiring their membership units in the Reorganization will not be
subject to any sponsorship or approval requirements to join the Club. Except
for transfers by a gift to family member, inheritance, or pursuant to divorce or
separation, all subsequent applicants for membership must be sponsored by two
active members and must be approved by the board of trustees before membership
may be granted.

The initial trustees of the Club will be: Robert E. Carlson, W. David
Schodde, Jr., William W. Jeude, Nancy K. Dees, Peter F. DeLaunay, David W.
Gossard and James C. Martinson. All of the initial trustees are current
Directors of the Company. Information about the initial trustees is set forth
at pages 43-45 below. The Club will hold an annual meeting for the election of
a new board of trustees in September of 1997.

CRYSTAL MOUNTAIN FOUNDERS' CLUB MEMBERSHIP RIGHTS

Under the Club Operating Agreement, each year, in perpetuity, the Company
must recognize a specified number of lift tickets issued by the Club (subject to
the same conditions and restrictions as are applicable to the same class of lift
ticket offered by the Company for sale to the public generally). On payment of
annual dues, the Club will issue to each member who holds at least 20 membership
units, the equivalent of one transferable all-day

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weekend adult lift ticket per membership unit held, for use at the Resort during
the following ski season; or each member may elect to receive a non-transferable
season's pass, or some combination of passes and transferable lift tickets,
so long as the total retail price does not exceed the retail price of an all-day
weekend adult lift ticket times the number of membership units held. In
addition, the Club may also issue not more than 14 season's passes each season
to trustees of the Club and their designees. The Club will pay to the Company
an annual administrative fee of 4% of the retail price of lift tickets and
season's passes issued by the Club plus reimbursement for the Forest Service
Permit fee, if any, attributable to the lift tickets and season's passes
issued by the Club.

The following are examples of activities that would be considered
commercial resales:

- A tour operator sells lift tickets issued by the Club in a package
with transportation, lodging and ski equipment rentals.
- A ski shop sells lift tickets issued by the Club.
- A Club member places an ad in the newspaper offering all of his or her
lift tickets issued by the Club for sale.

COMPARISON OF CRYSTAL MOUNTAIN FOUNDERS' CLUB MEMBERSHIP UNITS TO CURRENT
CLASS A SHARES

Upon consummation of the Merger, the shareholders of the Company who
elected to receive Club membership units will become members of the Club, and
their rights will be governed by the Club articles and bylaws, as well as Title
24 of the RCW governing nonprofit corporations, which differ in certain material
respects from the Company articles, bylaws, and Title 23B of the RCW governing
for profit business corporations.

Special meetings of the Club members may be called by the president, the
board of trustees or members representing 5% of the votes entitled to be cast at
such meeting. Special meetings of Company shareholders may be called by the
Board of Directors or by holders of at least 10% of all votes entitled to be
cast on any issued proposed to be considered at the special meeting.

Voting rights of Club members are set out in the Club's articles of
incorporation and bylaws. Each Club member who owns at least 20 membership units
will have one vote, irrespective of how many units in excess of 20 that he or
she owns. Club members who own less than 20 membership units will have no
voting rights. Club members will elect all members of the Club's board of
trustees each year. In addition, approval of a majority of the voting members
will be required for the Club: (i) to set annual dues per membership unit at an
amount greater than ten percent (10%) of the retail price at which the Company
intends to sell an adult all-day weekend lift ticket to the public during the
ski season beginning in the last three months of the calendar year in which the
annual dues are due; (ii) to amend the Club articles of incorporation, (iii) to
impose assessments for any amount, in any fiscal year, in excess of annual dues,
(iv) to voluntarily dissolve the Club or (v) to alter the transferability of
lift tickets issued by the Club. Votes of Club members will not govern or
otherwise bind the Company or Boyne. In contrast, Company shareholders have one
vote per share. A shareholder vote is required to elect directors (who serve
staggered terms), to amend the articles of incorporation, to voluntarily
liquidate the Company, to approve a distribution by the Company and to approve
certain other material Company actions.

There is no material difference between the Club lift ticket privileges and
the Class A lift ticket privileges in terms of timing, quantity and annual cost
to the recipient of acquiring lift tickets. Compared to a Class A Share holder
owning 20 Class A Shares, a Club member holding 20 Club membership units will be
eligible to receive the

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<PAGE>

same number of lift tickets distributed at the same time for approximately the
same annual fee. Both the Class A Shares and the Club membership units require
payment of a fee between 5% and 10% of the value of an adult weekend lift ticket
per Class A Share or Club membership unit to receive a distribution of lift
tickets. For the Class A Share holders, this payment is an activation fee. For
Club members, this payment is the annual Club dues. Class A Share holders are
not required to pay the activation fee unless they want to receive a
distribution of lift tickets. Club members will not be required to pay dues if
they do not want to receive lift tickets.

TRANSFERABILITY OF CRYSTAL MOUNTAIN FOUNDERS' CLUB MEMBERSHIP UNITS

Neither any membership in the Club, nor any membership units, will be
transferable to any person (including without limitation to another member of
the Club), except (A) as a BONA FIDE gift, without consideration, to a family
member of the transferor, (B) on the death of a member, to such member's
personal representative by operation of law, and from such personal
representative to the person entitled thereto under the decedent's will or
pursuant to applicable law or (C) to the transferor's spouse pursuant to a
marriage dissolution or legal separation proceeding. The Club will not register
or recognize any transfer that is not permitted by clause (i), and may require a
certificate and other reasonable assurances from the transferee and the
transferor to confirm that a transfer is permitted by clause (i).

The board of trustees of the Club will from time to time set a
per-membership unit initiation fee (the "Initiation Fee") for membership in the
Club. Such Initiation Fee will be $154.48 until changed by action of the board
of trustees of the Club, PROVIDED that the board of trustees will not change the
Initiation Fee before August 1, 2000.

The board of trustees of the Club may admit new members or increase
existing members' membership units, in accordance with application and admission
rules and procedures established from time to time by the board of trustees, and
upon payment of the Initiation Fee, PROVIDED that the total number of membership
units may not be increased above the number of membership units issued in the
Reorganization.

Each member of the Club may resign at any time, or may reduce the number of
membership units held by him or her, by notice to the Club in accordance with
rules and procedures established from time to time by the board of trustees of
the Club. Whenever a member's resignation, or reduction in membership units,
becomes effective in accordance with such rules and procedures, such member will
become entitled to receive from the Club, without interest, an amount in cash
equal to the then-current Initiation Fee times the number of membership units
held by such member (in the case of a resignation) or the reduction in the
number of membership units held by such member (in the case of a mere reduction
in membership units). The Club will pay such amount to the member entitled
thereto within 30 days of the effective time of the resignation or reduction,
or, if the Club lacks sufficient cash to make such payment within such time, at
a later time when the board of trustees determines that the Club has sufficient
funds to make such payment, in any event without interest.

TAX AND ACCOUNTING
ACCOUNTING TREATMENT

For financial reporting purposes, it is expected that the distribution by
the Company of Club membership units and cash in the Reorganization will be
accounted for as a distribution. The Merger will be accounted for by the
purchase method of accounting.

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FEDERAL INCOME TAX CONSEQUENCES: OPINION OF LESOURD & PATTEN, P.S.

In the opinion of LeSourd & Patten, P.S., the following discussion is a
general summary of all material United States federal income tax consequences
("U.S. Tax Consequences") of the Reorganization and Merger under current law
with respect to (i) an individual who is a U.S. resident who holds shares in the
Company as capital assets for investment purposes, (ii) the Company and (iii)
the Club. This summary does not address all non-material United States federal
income tax matters potentially relevant to the Reorganization and Merger, does
not take into account or anticipate any state, local or foreign tax
considerations, and is not intended as tax advice. In addition, this summary
does not address consequences peculiar to persons subject to special provisions
of federal income tax law.

The following summary is based upon the sections of the Internal Revenue
Code of 1986, as amended (the "Code"), Treasury Regulations, published Internal
Revenue Service ("IRS") rulings, published administrative positions of the IRS
and court decisions that are currently applicable, any or all of which could be
materially and adversely changed, possibly on a retroactive basis, at any time.
This summary does not consider the potential effects, both adverse and
beneficial, of any proposed legislation which, if enacted, could be applied,
possibly on a retroactive basis, at any time. Tax laws are frequently changed,
and no assurances can be given that the federal income tax treatment described
herein will continue to apply unchanged at the time of the completion of the
Reorganization and Merger.

CONSEQUENCES TO THE SHAREHOLDERS

GENERAL EXPLANATION. The distribution of cash and Club membership units in
the Reorganization and the Merger will be taxable events to the shareholders of
the Company. The amount of federal income tax that each shareholder will incur
will depend on a number of factors, including without limitation (i) whether
that shareholder elects to take cash or Club membership units in the
Reorganization, (ii) whether OTHER shareholders elect to take cash or Club
membership units, (iii) the amount of taxable income earned by the Company
between April 30, 1996 (the end of its last fiscal year) and consummation of the
Merger, (iv) the rate at which that shareholder's income is taxed, (v) that
shareholder's "basis" in its shares of Company stock and (vi) the value of a
Club membership unit.

The federal income tax consequences of the distribution of cash or Club
membership units in the Reorganization depend on the Company's earnings and
profits and each shareholder's "basis" in his or her shares. In the
Reorganization all or a portion of the distribution will be taxable as ordinary
income to each shareholder to the extent that the distribution is supported by
earnings and profits of the Company. The remainder of the distribution will not
result in tax to the extent that the remainder is a return of capital, and will
be taxable as capital gain to the extent, if any, that the remainder exceeds the
basis of each shareholder. The determination of how much of the distribution
will be taxable as ordinary income and how much as a capital gain is discussed
under "THE REORGANIZATION" below. The taxation of ordinary income is discussed
under "TAXATION OF ORDINARY INCOME" below.

The payment of cash in exchange for Company shares in the Merger will be
treated as a sale of the Company shares for federal income tax purposes. The
tax result of this transaction to each shareholder will depend on that
shareholder's "basis" in his or her Company shares. The determination of a
shareholder's basis is discussed under "DETERMINATION OF BASIS" below.
Depending on each shareholder's basis in his or her shares, that shareholder
will either recognize a capital gain or a capital loss as a result of the
Merger. The calculation of that gain or loss, and its taxation, is discussed
under "TAXATION OF CAPITAL GAINS AND LOSSES" below.

THE REORGANIZATION. For federal income tax purposes, when a corporation
makes a distribution to shareholders, it is taxed to the shareholders as
ordinary income up to the amount of "earnings and profits" of the corporation
(looking both at earnings and profits earned during the corporation's current
year and accumulated in previous years). If the distribution is larger than the
corporation's earnings and profits, then a part of the distribution equal to the
corporation's earnings and profits will be treated as ordinary taxable income to
the shareholders, after which the remaining part of the distribution will be
treated as a non-taxable return of capital up to the shareholder's basis, with
the remainder constituting taxable capital gain.

The Company estimates that it had accumulated earnings and profits at
April 30, 1996 (the end of its most recent fiscal year) of $1,696,699. The
Company estimates that it had losses of approximately $1,431,000 from May 1,
1996 through December 29, 1996. If the proposed transactions are approved by
the Company's

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<PAGE>

shareholders on March 27, 1997, the Merger would be consummated on or about
March 31, 1997. The Company's income up to that time is, of course, unknown.
However, the Company estimates that it will have earnings and profits from
December 30, 1996 through March 31, 1997 that fall between an approximate low
of $1,200,000 and an approximate high of $1,900,000. Accordingly, the Company
estimates that its accumulated earnings and profits at the Merger Time
(without taking into account the Reorganization) will likely fall between
$1,465,699 and $2,165,699. This amount, which is unknown at present, is
referred to below as the Company's "pre-transaction earnings and profits."

As discussed below under "Consequences to the Company," Section 311 of the
Code provides that the Company will recognize income at the time of the
Reorganization in an amount equal to the value of the Club membership units (but
not the cash) distributed by the Company in the Reorganization. This income,
sometimes referred to as the Company's "Section 311 income," will be included in
the Company's "earnings and profits" for the purpose of determining how much of
the distribution to shareholders will be taxable as ordinary income. As a
result, the Company's earnings and profits, and thus the portion of the
distribution to each shareholder to be treated as ordinary income, will depend
on the number of shareholders that elect to receive cash in the Reorganization.

The amount of the distribution to shareholders in the Reorganization will
be equal to the value of Club membership units distributed plus the amount of
cash distributed. The Company's earnings and profits through the Merger will
be equal to the value of Club membership units distributed plus the Company's
pre-transaction earnings and profits. Therefore, if the amount of cash
distributed is less than or equal to the Company's pre-transaction earnings
and profits, all of the distribution to shareholders in the Reorganization
will be taxable to the shareholders as ordinary income. However, if more
shareholders elect to receive cash in the Reorganization and, as a result,
the amount of cash distributed is GREATER than the Company's pre-transaction
earnings and profits, then a portion of the distribution to shareholders in
the Reorganization would be taxable as ordinary income, with the remaining
portion being treated as a non-taxable return of capital to each shareholder
up to that shareholder's basis in his or her shares, with any excess
constituting taxable capital gain.

The fraction of the distribution that is treated as ordinary income will
be the same for all shareholders, whether or not they elect to receive cash
or Club membership units in the Reorganization. Thus, each shareholder's
election to take cash or Club membership units in the Reorganization may
affect the portion of the distribution that will be treated as ordinary
income to ALL the shareholders. A shareholder's election will not, however,
affect the classification (as ordinary income, return of capital or capital
gains) of the distribution to him or her, except to the extent it affects ALL
shareholders similarly.

TAXATION OF ORDINARY INCOME. The part of the distribution to each
shareholder in the Reorganization that is taxable as ordinary income should
be included on that shareholder's federal income tax return as dividend
income, and will increase that shareholder's adjusted gross income. The
federal income tax rate applicable to this additional income will depend on
the shareholder's other income, deductions and credits, and other matters.
Currently, the highest marginal tax rate applicable to the ordinary income of
individual taxpayers (applicable to individuals filing joint returns with
taxable income over approximately $250,000) is 39.6%.

TAXATION OF CAPITAL GAINS AND LOSSES. Return of capital reduces basis.
Thus, if part of the distribution to each shareholder in the Reorganization
is treated as a return of capital, it will reduce that shareholder's "basis"
in his or her Company stock. If any amount of the distribution is not
supported by earnings and profits, and if it is greater than that
shareholder's basis, the excess will be treated for federal income tax
purposes as a capital gain.

Boyne's payment of cash in exchange for Company shares in the Merger will
be treated, for federal income tax purposes, as a sale of the Company shares.
If the $65.52 per share Merger payment is greater than a shareholder's basis
in his or her stock, he or she will have a taxable capital gain to the extent
that the sale price exceeded basis. If the sale price is less than the
shareholder's basis, he or she will have a capital loss for federal income
tax purposes.

As a result, looking at the distribution in the Reorganization and the
payment in the Merger as a whole, for federal income tax purposes each
shareholder will (in addition to receiving ordinary income as described
above) either have a capital gain or loss, depending on the relative amount
of:

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<PAGE>

(i) the sum of (x) the part (if any) of the distribution in the
Reorganization that is not supported by earnings and profits plus
(y) the cash paid in the Merger ($65.52 per share); as compared to

(ii) that shareholder's basis in his or her Company stock.

If the amount described in (i) exceeds the amount described in (ii), that
shareholder will have a capital gain equal to the excess. If (ii) exceeds
(i), that shareholder will have a capital loss.

If a shareholder who is an individual has a capital gain, that gain
should be included on that shareholder's federal income tax return as a long-
or short-term capital gain. The federal income tax rate applicable to this
gain will depend on how long that shareholder has held his or her shares of
Company stock, the shareholder's other income, deductions and credits, and
other matters. If the gain qualifies as a long-term capital gain, which will
generally be the case if the shareholder has held his or her shares for more
than one year, the gain will be subject to a 28% federal income tax. If the
gain does not qualify, it will be taxed as if it were ordinary income.

If a shareholder has a capital loss, that loss may be netted against
capital gains from other transactions in accordance with special rules.
Deductions for net capital losses are subject to significant limitations.
For shareholders who are individuals, any capital loss that is not netted to
reduce that shareholder's capital gain in a particular year may be carried
over and used in later tax years. Shareholders who expect to have a capital
loss as a result of the Reorganization and Merger should consult with a tax
adviser before assuming that that loss will allow them to reduce their
federal taxable income.

DETERMINATION OF BASIS. A shareholder's "basis" in his or her shares,
for federal income tax purposes, is generally equal to the amount he or she
paid to purchase those shares. Special rules apply to the determination of
basis for shareholders who acquired their shares by gift or inheritance.

VALUE OF CLUB MEMBERSHIP UNITS. The amount of taxable ordinary income
and capital gain received by each shareholder will be based on the sum of the
cash received by that shareholder in the Reorganization and Merger plus the
fair market value of the Club membership units received by that shareholder.
The Company intends to prepare and file its own tax returns using an
estimated fair market value for the Club membership units of $154.48 per
unit. SHAREHOLDERS SHOULD BE AWARE THAT THERE IS NO ASSURANCE THAT THE
INTERNAL REVENUE SERVICE WILL NOT TAKE THE POSITION THAT THE VALUE OF THE
CLUB MEMBERSHIP UNITS IS SIGNIFICANTLY HIGHER THAN $154.48 PER UNIT. THE
COMPANY HAS NOT OBTAINED AN INDEPENDENT VALUATION OF THE CLUB MEMBERSHIP
UNITS. IF A SHAREHOLDER ELECTS TO RECEIVE CLUB MEMBERSHIP UNITS IN THE
REORGANIZATION, AND IF THE INTERNAL REVENUE SERVICE TAKES THE POSITION THAT
THE FAIR MARKET VALUE OF A CLUB MEMBERSHIP UNIT IS GREATER THAN $154.48, THE
EFFECT COULD BE TO INCREASE MATERIALLY THE TAX PAYABLE BY THAT SHAREHOLDER AS
A RESULT OF THE REORGANIZATION AND MERGER.

ONGOING TAX CONSEQUENCES, COMPARED TO CURRENT TAX CONSEQUENCES.
Currently, each shareholder is treated, for federal income tax purposes, as
receiving a distribution each year equal to the fair market value of the lift
privileges distributed to him or her. The Company estimated, and reported to
the Internal Revenue Service, that the fair market value of the lift
privileges distributed in 1995 was $14.85 per share activated. This
distribution has been taxable as ordinary income to each shareholder who
activated his or her lift privileges, and would continue to be so treated (if
the Reorganization and Merger DO NOT occur) so long as the Company has
accumulated or current earnings and profits.

If the Club is and remains properly qualified as a federally tax-exempt
organization under Code Section 501(c)(7), there is a reasonable basis for
Club members to take the position that the lift tickets they receive from the
Club are not taxable as income, but rather are a non-taxable benefit enjoyed
due to membership in a nonprofit corporation. However, it must be noted that
the position that the Club members' mere receipt of tickets from the Club is
not taxable is not free from doubt. There is no assurance that the Internal
Revenue Service will not take the position that the receipt of the lift
tickets constitutes taxable income to the Club members. If such a contrary
position were sustained, each Club member who received lift tickets would
incur income to the extent of the difference between the fair market value of
the lift tickets received and the basis in the lift tickets. The member's
basis in the lift tickets would likely be deemed to be zero. So long as
neither the Club nor its members

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<PAGE>

are shareholders of the Company, the Company shall not recognize any income
when lift tickets are issued by the Club or by any successor or assignee
thereof.

Neither the Company nor the Club has sought, or intends to seek, a ruling
from the IRS concerning the federal income tax consequences of the
distribution of lift tickets to the Club members.

Any sales by a Club member of tickets received from the Club will be
taxable to the full extent of the difference between the sales proceeds
received and the Club member's basis in the tickets being sold. If receipt
of the lift tickets from the Club is nontaxable to the Club member, then the
Club member would have a zero basis in the tickets. If the Club member
incurred income on receipt of those lift tickets from the Club, then the
amount of such income incurred would be the Club member's basis in those
tickets.

Currently, whenever a shareholder sells his or her Company stock, he or
she may be treated as receiving a taxable capital gain equal to the excess of
the consideration received over that shareholder's "basis" in his or her
stock. After the Reorganization and Merger occur (if they are approved by the
Company's shareholders), whenever a member of the Club surrenders all or some
of his or her Club membership units, he or she may be treated as realizing a
taxable capital gain equal to the excess of the amount received from the Club
as a result of such surrender over that member's basis in his or her Club
memberships. It should be noted that surrender of Club membership units to
the Club is the only transfer allowed, other than the limited transfers (bona
fide gifts to family members, transfers upon death or transfers upon divorce
or separation) discussed above under "Transferability of Crystal Mountain
Founders' Club Membership Units". Basis would generally be the fair market
value of the Club membership units at distribution. It should be noted that
any surrender for less than the member's basis would likely not result in a
deductible loss, due to the Club membership units being treated as personal,
not investment, assets.

The foregoing discussion does not apply to any shares acquired by
shareholders who are not citizens or residents of the United States or to
other categories of shareholders subject to special treatment under federal
income tax laws, such as dealers in securities, banks, insurance companies
and tax-exempt entities. The foregoing discussion assumes that each
shareholder holds his or her shares in the Company as capital assets for
investment purposes.

EXAMPLES OF TAX CONSEQUENCES TO SHAREHOLDERS. The tables below show the
estimated tax consequences to a shareholder of the Reorganization and Merger,
based on varying assumptions as to the fair market value of the Club
membership units and the shareholder's basis in his or her shares of Company
stock. The following tables are based on the assumptions set forth above,
including without limitation that the Company had tax losses of $1,431,000
from May 1, 1996 through December 29, 1996. The following table is based on
the further assumptions that (i) the shareholder elects to take Club
membership units, rather than cash, in the Reorganization, (ii) the holders
of 5,000 shares of Company stock elect to take cash instead of Club
membership units in the Reorganization, (iii) the Company earns $1,550,000 of
taxable income between December 30, 1996 and consummation of the Merger
(anticipated to be March 31, 1997) and (iv) all ordinary income is taxed to
the shareholder at 39.6%. The following table does not take into account the
fact that the shareholder may use capital losses to offset capital gains.

TAX PER SHARE

Shareholder with a 39.6% tax rate for ordinary income, ignoring capital loss

HYPOTHETICAL
VALUE OF ONE CLUB SHAREHOLDER'S BASIS
MEMBERSHIP UNIT 50.00 100.00 150.00 200.00 250.00 300.00
----- ------ ------ ------ ------ ------
154.48 65.52 61.17 61.17 61.17 61.17 61.17
200.00 83.55 79.20 79.20 79.20 79.20 79.20

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<PAGE>

The following table is based on the same assumptions as the table above,
except that it is assumed that all ordinary income is taxed to the
shareholder at 28% and that the shareholder may use capital losses to offset
capital gains.

TAX PER SHARE

Shareholder with a 28% tax rate for ordinary income, treating capital loss
as a benefit

HYPOTHETICAL
VALUE OF ONE CLUB
MEMBERSHIP UNIT SHAREHOLDER'S BASIS
50.00 100.00 150.00 200.00 250.00 300.00
----- ------ ------ ------ ------ ------

154.48 47.60 33.60 19.60 5.60 (8.40) (22.40)
200.00 60.35 46.35 32.35 18.35 4.35 (9.65)

(NEGATIVE NUMBERS INDICATE THAT THE SHAREHOLDER RECEIVES A TAX BENEFIT IN THE
TRANSACTION)

There is no assurance that the Internal Revenue Service will not take the
position that the value of the Club membership unit is significantly higher
than $154.48 per unit. In the event that the IRS successfully made such an
assertion, then the tax liability to the recipient Club membership unit
holder would increase.

FOREIGN INVESTOR IN REAL PROPERTY ISSUES. The amount received by a
foreign person upon the disposition of a U.S. real property interest is
subject to withholding tax. To avoid withholding, each shareholder must
present to Boyne a certificate declaring that said shareholder is not a
foreign person. Such a certificate will be included in the form of letter of
transmittal that will be distributed to shareholders after the Merger, if it
occurs. Failure to provide a certificate will result in the withholding of
tax at a rate of 10% on the $65.52 per share paid in the Merger.

THE TAX DISCUSSION SET FORTH HEREIN IS INCLUDED FOR GENERAL INFORMATION
ONLY AND IT IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL
OR TAX ADVICE TO ANY HOLDER OR PROSPECTIVE HOLDER OF COMPANY COMMON SHARES.
IN VIEW OF THE INDIVIDUAL NATURE OF TAX CONSEQUENCES, EACH SHAREHOLDER
SHOULD CONSULT HIS OR HER OWN TAX ADVISOR AS TO THE PARTICULAR TAX
CONSEQUENCES OF THE REORGANIZATION AND MERGER TO HIM OR HER, INCLUDING THE
EFFECT AND APPLICABILITY OF FEDERAL, STATE, LOCAL OR OTHER TAX LAWS.

CONSEQUENCES TO THE COMPANY

The distribution of Club membership units in the Reorganization will be a
taxable event to the Company upon which it will recognize ordinary income.
In contrast, the distribution of cash in the Reorganization will not be a
taxable event to the Company. The Merger will not be a taxable event to the
Company.

The Club memberships distributed will constitute appreciated property
subject to Code Section 311(b). The distribution of Club membership units
should result in ordinary income to the Company under Code Section 311 in an
amount equal to the total value of the Club membership units distributed, and
this income should be offset to the extent that there are existing net
operating losses. The amount of federal income taxes that will be incurred
by the Company in the Reorganization thus depends, among other things, on the
number of Club membership units distributed in the Reorganization (which is
affected by the number of Company stockholders who elect to receive cash
instead of membership units), the value of each Club membership unit and the
amount of the Company's net operating losses at the time of the
Reorganization.

For example, if (i) the holders of 5,000 Class A Shares elect to take cash
instead of Club membership units in the Reorganization, (ii) Club membership
units are valued at $154.48 per unit and (iii) the Company has tax losses of
$1,431,000 from May 1, 1996 through December 29, 1996, and taxable income of
$1,550,000 from December 30, 1996 through consummation of the Reorganization on
March 28, 1997, then the Company expects that it would incur federal income
taxes of approximately $664,299 in the Reorganization, which would be counted as
a "Qualified Expenditure."

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CONSEQUENCES TO THE CLUB

Neither the Reorganization nor the Merger should be a taxable event to
the Club. Assuming that the Club is and remains a qualified federally tax
exempt club described in Code Section 501(c)(7), it should not incur any
federal income tax on its dues income, or as a result of the issuance of lift
tickets to its members. The Club, if a qualified federally tax exempt club
described in Code Section 501(c)(7), will not incur unrelated business
taxable income as defined in Code Section 512(a)(3) on Club dues or on the
issuance of lift tickets to its members; thus, a ruling will not be sought on
this issue.

While Code Section 501(c)(7) describes social and recreation non-profit
clubs which are exempt from federal income taxation under Code Section
501(a), such tax exempt status requires an established membership of
individuals, personal contacts and fellowship. A commingling of the members
must play a material part in the life of the tax exempt organization. To
qualify as a federally tax exempt organization described in Code Section
501(c)(7), Club members must actually share interests or goals. While Club
members will presumably share a common interest in skiing and the development
of the Resort, there is no assurance, that the Club will qualify for
federally tax-exempt status under Code Section 501(c)(7). If it does not so
qualify, then the Club would be subject to federal taxes on its net income,
including not only dues income net of Club expenses but also income equal to
the fair market value of the lift tickets distributed to the Club members
under Code Section 311(b).

If the Club is not federally tax-exempt and must pay taxes on Code
Section 311(b) income on the distribution of lift tickets and income from the
receipt of membership dues then, even at a 10% dues level, the Club's cash
flow would likely be insufficient to pay such taxes. To fund the tax
liability through Club dues, dues might have to be raised to approximately
60% of the value of an adult all day weekend lift ticket. Alternatively,
the Club could investigate a reduction in the number of lift tickets
distributed. Presumably, if the Club were not to qualify for federally
tax-exempt status, then the members' annual dues would be deemed to be a mere
annual activation fee comparable to the fee currently paid by shareholders,
and therefore deductible by the members in arriving at their taxable income
on the receipt of the lift tickets.

If alterations to the Club's structure and actions would allow the Club
to qualify for federally tax-exempt status under Code Section 501(c)(7), or
to avoid the negative ramifications of the failure to so qualify, such
alterations, if possible, would likely be made by the board of trustees. For
a description of possible alterations, see the discussion below under
"Formation Status of the Crystal Mountain Founders' Club."

LeSourd & Patten, P.S. has not opined on whether the Club will qualify
for federally tax-exempt status under Code Section 501(c)(7) and no IRS
determination as to such qualification has been received. The Club will
apply for recognition of federal tax exempt status promptly following the
Reorganization.

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FORMATION STATUS OF THE CRYSTAL MOUNTAIN FOUNDERS' CLUB

Application for Internal Revenue Service recognition of qualification as a
federally tax-exempt organization under Code Section 501(c)(7) should be made
after the Club has members. Such application will be made by the Club shortly
after the distribution of membership units in the Reorganization. As such
application has not yet been made, there is no assurance that the Club will
qualify for federally tax exempt status under Code Section 501(c)(7). The tax
ramification of the Club's qualification under Code Section 501(c)(7), as well
as its failure to so qualify, are discussed above under "Tax and Accounting
Treatment - Federal Income Tax Consequences -- Consequences to the Club."

Should the IRS reject the Club's application, then the Company expects that
the board of trustees would, if possible, either make changes required for the
Club to be recognized as federally tax exempt under Internal Revenue Code
Section 501(c)(7) or take other steps to avoid the negative ramifications of the
failure so to qualify. Such changes could include an increase in membership
dues, an increase in social activities or a restriction of the transferability
of lift tickets issued by the Club. A restriction on transferability of lift
tickets could, for example, allow tickets only to be transferred to family
members and forbid the sale of tickets for valuable consideration. Increasing
membership dues or restricting transferability of lift tickets will be done only
after obtaining the requisite vote of the Club members.

BOYNE'S QUALIFIED EXPENDITURE COVENANT

Boyne and the Club will be parties to the Qualified Expenditure Agreement,
pursuant to which:

- - Boyne has agreed with the Club that, if the Merger occurs, Boyne will make
qualified expenditures of not less than $15,000,000 by December 31, 2006.
Not less than $8,000,000 of that $15,000,000 will be made by December 31,
2001.

- - Qualified expenditures are capital expenditures on certain projects to
improve the Resort, together with a certain amount of non-capital
expenditures including the federal income taxes, withholding taxes,
interest and/or penalties, if any, incurred by the Company in completing
the Reorganization and Merger (as described in Section 5 of the Qualified
Expenditure Agreement), and the $65.52 per share in cash paid to the
Company's shareholders in the Merger.

- - The non-capital expenditure component of the qualified expenditures will be
limited to a maximum of $5 million of the $15 million to be spent prior to
December 31, 2006, including $2 million of the $8 million to be spent prior
to December 31, 2001. Based on certain assumptions described under "Tax
and Accounting: Federal Income Taxes" above, the total non-capital
expenditure component would be approximately $2.5 million.

Boyne's financial condition is described under "Boyne Financial Information"
below. Boyne's obligations under the Qualified Expenditure Agreement will be
secured by a pledge in favor of the Club of Boyne's shares in the Company.

CAPITAL PROJECTS

Boyne and the Club have agreed that capital expenditures on the following
projects will be counted as Qualified Expenditures. Boyne is not obligated to
complete all of the projects listed below, whose total cost is estimated at over
$36,000,000. Such projects that are completed may not be completed in the order
listed.

LIFTS AND TRAILS

(i) Construction of new lifts, and associated slope, trail and road work:

- new high speed detachable from Green Valley (Chair 3) base area to
Northway Peak, servicing the entire north backcountry

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<PAGE>

- new high speed detachable chairlift in Paradise Bowl, opening the
north backcountry with improved return trails
- new high-speed detachable lift to Platinum Peak on the east side of
the valley above Silver Skis opening all new terrain above the east
side of the resort
- new lift linking parking lot areas with the base area village

(ii) Realignment and extension of Chair 4 to reach new terrain in lower Silver
Basin, as well as slope work.

(iii) Conversion of the following to high speed detachable chairs:

- Chair 3 (Green Valley)
- Chair 4 (Quicksilver)
- Chair 9 (Rendezvous)
- Chair 11 (Midway Shuttle)

(iv) Relocation of old Chair 9 to run from Silver Basin to Silver King.

(v) Construction of a new double reversible tram from the base area to the
Summit House. An 80 passenger, all weather tram is proposed.

(vi) Improvement of the summit traverse trail system.

(vii) Snowmaking improvements, so that the lower part of the mountain will
be capable of initial season base snowmaking and after thaw re-surfacing.

LODGES AND BASE FACILITIES

(i) Construction of a new 450-seat Rendezvous Restaurant near the top of
Chairs 5 and 9, in Campbell Basin.

(ii) Expansion of the Summit House to a 500-seat food and beverage facility,
and improvement of summit drainfields.

(iii) Construction of an all new base lodge skier service facility, with 800
additional seats for food and beverage service.

(iv) Expansion of parking lots and associated access, relocating parking closer
to the base area.

OTHER

(i) Light Chair 9 for night skiing.

(ii) Approximately $1,500,000 of other improvements to the Resort.

(iii) Preparation of a revised master plan, with environmental impact
statement.

The above deadlines (December 31, 2001 and December 31, 2006) may be
extended as a result of certain FORCE MAJEURE events, such as failure to obtain
Forest Service approval or other permits (notwithstanding Boyne's reasonable
diligence in seeking them), acts of God and labor troubles. The Club will
appoint an advisory committee, which will provide non-binding advice and
recommendations to Boyne as to capital projects.

The Qualified Expenditure Agreement requires Boyne to make Qualified
Expenditures in the amounts described above by the deadlines described above and
specifies the list of projects whose costs would count as Qualified
Expenditures. Boyne has not agreed to undertake projects in any particular
order. Boyne has, however, advised the Company that, if the Merger is
consummated, Boyne's preliminary plan is to complete the projects described
below in the first two and a half years following the Merger. This is Boyne's
preliminary plan only, and there is no assurance that Boyne will complete these
projects in the periods referred to below.

-36-
<PAGE>

IN THE FIRST YEAR AND A HALF:

(i) Conversion of Chair 9 (Rendezvous) to a 6-place, high-speed detachable
chair lift and associated trail pod work, including night lighting.

(ii) Improvements to the summit traverse trail system.
(iii) Design work for the new Rendezvous Restaurant, drainfields and site
work.

IN THE FOLLOWING YEAR:

(i) Realignment of Chair 4 (Quicksilver) and conversion to a high-speed
detachable chair lift, and related slope and trail work.

(ii) Conversion of Chair 3 (Green Valley) to a high-speed detachable chair
lift, and related slope and trail work.

(iii) Other improvements or additions to the lifts.

(iv) Construction of the new Rendezvous Restaurant (subject to permitting and
other clearances).

FEDERAL INCOME TAXES

Qualified expenditures include a certain amount of non-capital expenditures
including the federal income taxes, withholding taxes, interest and/or
penalties, if any, incurred by the Company in completing the Reorganization and
Merger (as described in Section 5 of the Qualified Expenditure Agreement). The
amount of federal income taxes that will be incurred by the Company in the
Reorganization depends, among other things, on the number of Club membership
units distributed in the Reorganization (which is affected by the number of
Company stockholders who elect to receive cash instead of Club membership
units), the value of each Club membership unit and the amount of the Company's
net operating losses at the time of the Reorganization. The federal income tax
consequences of the Reorganization and Merger to the Company and others is more
fully discussed above under "Tax and Accounting: Federal Income Tax
Consequence" at page 29. Shareholders are urged to read that discussion, and
the above summary is qualified by that more detailed discussion.

REMEDIES OF THE CLUB

The parties have agreed that if Boyne fails to perform its obligations
under the Qualified Expenditure Agreement, the Club will be entitled to specific
performance. In particular, the parties have agreed that if Qualified
Expenditures fall short, the Club may require Boyne to pay the shortfall PLUS
seven percent into an escrow account. If that occurs, the Club could itself
cause capital projects to be undertaken, and withdraw funds from the escrow
account to pay for such projects. If Boyne fails to make the Qualified
Expenditures in the amount required by the Qualified Expenditure Agreement, the
security pledged in favor of the Club will not provide additional capital to the
Company.

Boyne will pledge to the Club 100% of the Company shares held by Boyne as
security for Boyne's performance of its obligations under the Qualified
Expenditure Agreement. The form of Pledge Agreement is attached to the Merger
Agreement as Exhibit C. If Boyne fails to make Qualified Expenditures in the
amount required by the Qualified Expenditure Agreement the Club could, at its
option, exercise certain remedies against the Company shares, which might
include: (i) proposing to retain the Company shares in satisfaction of Boyne's
obligations (a "strict foreclosure") or (ii) selling or otherwise disposing of
the Company shares in a commercially reasonable manner. If the Club were to
propose a strict foreclosure, Boyne could object and require the Club to
exercise other remedies.

If the Club were to complete a strict foreclosure, the Club would own all
of the outstanding shares of stock of the operator of the Resort, but neither
Boyne nor any other person would have any obligation to make the remaining
Qualified Expenditures.

If the Club were to sell the Company shares, the proceeds of such sale
(after expenses) would be applied to pay amounts payable by Boyne to the Club
and to make the payment into the escrow account referred to above.

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<PAGE>

Any proceeds remaining after that would be returned to Boyne or another party
or parties entitled thereto (such as other creditors of Boyne). The Club would
generally be required to sell the Company shares to the party offering the most
for them, without taking into account other factors, such as the buyer's plans
for operating the Resort. Requirements of federal and state securities laws
would significantly restrict the Club's ability to sell or otherwise dispose of
the Company shares.

If the Club were to sell the Company shares, the Club might "bid in" the
obligations of Boyne. If, for example, Boyne's Qualified Expenditures fell
short by $1,000,000, Boyne would be required to deposit $1,070,000 into the
escrow account. The Club might bid as much as $1,070,000 for the Company
shares, to be "paid" by forgiving Boyne's obligation, after which the Company
would be in substantially the same position as after a strict foreclosure.

If Boyne were the subject of a bankruptcy proceeding, the Club would be
stayed from pursuing remedies against the Company shares. Also, applicable law
and the provisions of the Pledge Agreement contain additional procedural and
other restrictions on the Club's ability to exercise remedies against the
Company shares.

Disputes regarding Boyne's performance under the Qualified Expenditure
Agreement may be submitted to arbitration. The party against whom a dispute is
resolved may be required to bear the entire cost of the arbitration. If the
disputed amount of Qualified Expenditures determined by the arbitrators is less
than 90% of Boyne's Final Proposal (as defined in the Qualified Expenditure
Agreement) and less than 110% of the Club's Final Proposal, then Boyne will pay
to the Club all of the Club's reasonable costs and expenses incurred in
connection with the arbitration. If the disputed amount determined by the
arbitrators is more than 90% of Boyne's Final Proposal (as defined in the
Qualified Expenditure Agreement) and more than 110% of the Club's Final
Proposal, then the Club will pay to Boyne all of the Boyne's reasonable costs
and expenses incurred in connection with the arbitration. If neither of the two
preceding sentences applies, then each party will bear its own costs of
arbitration and bear 50% of the arbitrators' fees and expenses. If the Club
were required to pay the cost of arbitration it would be necessary for it to pay
such cost out of member dues and/or special assessments.

DESCRIPTION OF BOYNE

IDENTITY AND BACKGROUND OF MANAGEMENT OF BOYNE

Boyne is a Michigan corporation in the business of owning and operating ski
areas, including the Boyne Mountain and Boyne Highlands ski areas located in
Michigan, Big Sky Ski Area in Montana and Brighton Mountain Ski Area in Utah.
Everett Kircher ("Kircher"), age 80, is the founder and President of Boyne,
which has been a family held business since its establishment in 1947. Boyne is
qualified as a subchapter S corporation for federal income tax purposes. Boyne
ski management includes two of the four Kircher children: John, age 38, manager
of the Big Ski resort in Montana and the Brighton Resort in Utah; and Stephen,
age 32, general manager of Michigan operations. In addition to the family,
senior management positions at Boyne are held by Arthur Tebo, Chief Operating
Officer, and Edward Dembek, Comptroller.

Before starting Boyne Mountain, Boyne purchased a used chairlift from Sun
Valley -- the first chairlift ever built -- had it transported to Michigan and
installed it, later converting the single to a double chairlift. Sections are
still in use today on the Hemlock run. Since that time, Boyne has had many
firsts, including the world's first triple chair, installed in 1964 at Boyne
Highlands, and the world's first four-place chair, installed in 1969 at Boyne
Mountain. In 1990 Boyne installed Michigan's first high-speed detachable quad
chairlift at Boyne Highlands and, in 1992, Boyne Mountain unveiled America's
first 6-seat high-speed chairlift.

Kircher is the co-inventor of the Boyne Snowmaker, the first efficient
snowmaker widely accepted as the standard for marginal temperature snowmaking.
It combines small amounts of air and electricity with large quantities of water
to provide a high efficiency snowmaking system with energy saving operation and
minimum noise level. The Boyne Mountain and Boyne Highlands resorts are
equipped with complete snowmaking equipment on all runs. Kircher also pioneered
the design of much of the snow grooming equipment and techniques in use today.

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<PAGE>

OTHER RESORTS OPERATED BY BOYNE

Boyne resorts include Michigan's two premier summer and winter resorts,
Boyne Highlands and Boyne Mountain; Big Sky, the year-round resort in Montana
founded by the late Chet Huntley in 1970; Brighton Ski Resort in Big
Cottonwood Canyon near Salt Lake City; Boyne South, a golf course in Naples,
Florida and a scenic chairlift in Gatlinburg, Tennessee, near the Great
Smokey Mountains National Park.

Boyne's ski resorts continue to generate recognition through skier
surveys conducted by many national ski publications. SNOW COUNTRY magazine
readers have rated Boyne Mountain and Boyne Highlands as the #1 ski resorts
in the Midwest. SKI magazine named Boyne Mountain America's best snowmaker,
with the Highlands rated fourth in the nation. SKI magazine readers also
rated Boyne Mountain the top Midwest weekend destination resort, as well as
their favorite day-trip ski area.

Big Sky Resort was rated the best mountain experience in SNOW COUNTRY
magazine, and has consistently been recognized in national ski magazines for
short or non-existent lift lines. Big Sky offers over 1,000 hotel rooms and
condominium units. The ski area encompasses 75 named runs making for 80 miles
of skiing on 3,500 skiable acres and two mountains. Since 1988, 11 lifts have
been constructed or improved, including the recent addition of a high speed
detachable quad lift and the Lone Peak Tram. Gondola facilities have been
upgraded to move skiers rapidly out of the base area, with total area lift
capacity of 17,180 skiers per hour. Boyne has made $35 million in capital
expenditures in Big Sky since 1988.

Boyne's other western resort, Brighton, was founded in 1936, making it
one of America's oldest alpine skiing areas. A small, but high quality resort
just outside of Salt Lake City, Brighton consists of 64 runs on two
mountains, with day and night skiing. Purchased by Boyne in the mid-1980s,
Brighton lift facilities include two detachable high speed quad lifts, three
double chairs, and two triple chair lifts, moving 8,300 skiers per hour.
Boyne has made $18 million in capital expenditures at Brighton since 1987.

BOYNE FINANCIAL INFORMATION

Boyne's financial statements are prepared on a tax basis and are not
prepared in accordance with generally accepted accounting principles. As a
family-held S corporation, Boyne does not produce the audited annual
financial statements which are required for public companies under the
Exchange Act. Given (i) the Board's conclusions from its due diligence
investigation of Boyne's financial resources and history as a developer of
ski resorts and (ii) the fact that Boyne's obligation under the Qualified
Expenditure Agreement is secured by Boyne's pledge of its shares in the
Company, the Board made its own determination that Boyne's ability to make
the Qualified Expenditures was satisfactory.

SELECTED BALANCE SHEET DATA
(UNAUDITED)

AS OF MAY 31,
1996 1995 1994
------------ ------------- --------------
ASSETS
Current Assets $16,062,246 $16,649,844 $11,614,745

Property & Equipment
(net of depreciation) 48,036,251 42,695,338 38,632,739
Other assets 6,112,543 5,788,836 5,801,951
----------- ------------ -----------
Total Assets 70,211,040 65,134,017 56,049,436
----------- ------------ -----------
----------- ------------ -----------

LIABILITIES
Current Liabilities 612,025 153,285 896,600
Long-Term Debt 20,859,863 22,343,742 12,977,119
----------- ------------ -----------
Total Liabilities 21,471,888 22,190,457 13,873,719
----------- ------------ -----------
----------- ------------ -----------
STOCKHOLDERS' EQUITY 48,739,153 42,043,560 42,175,717
----------- ------------ -----------
----------- ------------ -----------

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<PAGE>

SELECTED INCOME STATEMENT DATA
(UNAUDITED)

YEAR ENDED MAY 31,
1996 1995 1994
----------- ------------- -----------
Revenues $69,021,909 $ 62,679,678 $63,264,981
Income From Operations* 11,598,075 7,032,605 5,487,979
Net Income 5,504,485 1,075,471 367,592

*Income from operations excludes depreciation, amortization and interest
expenses.

DESCRIPTION OF BUSINESS OF CRYSTAL MOUNTAIN, INC.

The Company owns and operates the Resort, a mountain resort facility on
federally-owned land in the Cascade Mountains of Washington State. The Resort
is located at the headwaters of Silver Creek in the Mt. Baker-Snoqualmie
National Forest, adjacent to Mt. Rainier National Park and near the Greater
Seattle Metropolitan Area. It serves the Puget Sound region and attracts
vacationers from throughout the Northwestern United States and Canada.

The Company occupies over 4,300 acres, which are used under a special
permit from the United States Forest Service. The village elevation at the
Resort is 4,400 feet and the summit is 7,002 feet. The Northway run drops below
the ski village to 3,900 feet, providing a 3,102 foot vertical drop. The
terrain offers skiing for individuals of all ages and levels of experience. The
resort has ten chair lifts consisting of a high speed quadruple lift, a regular
speed quadruple lift, three triple-chair lifts and five double-chair lifts plus
one beginner handle-tow.

FACILITIES

The Resort primarily serves day visitors but is one of the few resorts in
Washington State with both hotel and condominium facilities within walking
distance of the base lift facilities. The Company owns and operates a 20 room
hotel, a main lodge with two restaurants and an entertainment bar, the Summit
House Restaurant, a business conference center, a ski rental and repair
facility, and numerous support facilities. Concessionaires own and operate two
hotels, and a restaurant with a bar and delicatessen. Another concessionaire
also operates a ski shop which is in a facility owned by the Company. In
addition, 96 privately owned condominium units have been built at the Resort of
which, pursuant to Forest Service requirements, 20% must be available for rental
to the public.

During late spring, summer and early fall, the Resort offers scenic rides
to the summit on two chairlifts, fine dining at the Summit House Restaurant, and
mountain biking, hiking, swimming, tennis, and disc golf. There are RV hookups,
a base area restaurant, and both hotel and condominium accommodations offering
meeting rooms serving both tourists and groups.

EMPLOYEES

The Company employs approximately 650 people during peak operations of
which 34 are full time, year-round employees.

COMPETITION

The Resort competes primarily with eight local ski areas, including the
four Snoqualmie Pass areas, Stevens Pass, White Pass, Mission Ridge and
Mt. Baker. Additional competition comes from the regional destination resorts
at Mt. Bachelor, Mt. Hood, Sun Valley and Whistler/Blackcomb.

REGULATORY MATTERS

The federally-owned land occupied by the Company is regulated by a 40-year
Ski Area Term Special Use Permit issued in 1992. In addition, the Company has
two separate 30-year term Special Use Permits covering the condominium
facilities. The continued use of these permit areas is subject to certain
regulations common to all ski areas developed on United States Forest Service
lands.

These include restrictions on land use, environmental compliance, and water
and sewer regulations among others. Advance approval must be obtained from the
United States Forest Service for all construction, land

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<PAGE>

alterations, and significant repairs. In granting permission, the Forest
Service considers the protection of the natural esthetics of the land. The
permits may be canceled at any time with equitable consideration for
improvements made to the area.

PROPERTIES; LEASES; PERMITS

USE PERMIT. The Company operates under a Term Special Use Permit issued by
the United States Department of Agriculture Forest Service. The permit was
renewed as of April 1, 1992 for forty years, ending April 1, 2032. According to
the permit, the Company is required to pay a graduated fee to the Forest Service
based on net revenue and gross fixed assets used. Fees paid to the Forest
Service in 1996 and 1995 amounted to approximately 2% of revenue after sales
tax.

LEASES. The Company leases equipment and an office facility under
operating lease agreements which expire in 1999. For the period from May 1,
1996 until December 29, 1996, lease expense amounted to $59,000. Future minimum
payments under the leases are:

FISCAL YEAR PROJECTED LEASE
ENDING APRIL 30, EXPENSE
--------------- ---------------
1997 $159,000
1998 164,000
1999 110,000
--------
$433,000
--------
--------
LEGAL PROCEEDINGS

Injury claims are filed against the Company in the normal course of
business. The Company has insurance coverage subject to a $50,000 deductible
per occurrence, with a maximum of $150,000 to be incurred by the Company
annually. Accordingly, the Company believes the ultimate outcome of these
matters will not have a material adverse effect on the Company's financial
condition. The total expense for deductibles associated with claims was $63,000
for the period from May 1, 1996 until December 29, 1996. Litigation currently
pending may increase this figure.

IDENTITY AND BACKGROUND OF MANAGEMENT OF CRYSTAL MOUNTAIN, INC.

The following chart shows pertinent information concerning all of the
Company's executive officers:

YEARS OF
SERVICE
OFFICER'S NAME, TITLE AND PRINCIPAL OCCUPATION AGE AS OFFICER
- ---------------------------------------------- --- ----------
Robert E. Carlson(1) 56 6
Chairman of the Board
(Manager, Western Washington Fair Association)

Thomas F. Leonard(2) 53 12
President

Peter G. Gillis 41 5
Vice President, Mountain Operations

Lawrence E. Hard(4) 52 14
Secretary
(Shareholder, LeSourd & Patten, P.S., Attorney
at Law)

William W. Jeude(5) 49 1
Treasurer
(President, Univest group of companies)

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<PAGE>

YEARS OF
SERVICE
OFFICER'S NAME, TITLE AND PRINCIPAL OCCUPATION AGE AS OFFICER
- ---------------------------------------------- --- ----------
W. David Schodde, Jr.(6) 54 2
Vice Chairman of the Board
(President, Enumclaw Landscape Maintenance,
Owner, Enumclaw Nursery)

- --------------------
(1) Mr. Carlson is a nominee for Director whose term will expire in 1999.
(2) Mr. Leonard is a nominee for Director whose term will expire in 1999.
(3) Mr. Hard is a nominee for Director whose term will expire in 1999.
(4) Mr. Jeude also serves as a Director whose term will expire in 1998.
(5) Mr. Schodde also serves as a Director whose term will expire in 1998.

ROBERT E. CARLSON: Mr. Carlson, has been a director since 1987 and has
served as Chairman of the Board since June 1994. He is the Manager of the
Western Washington Fair Association in Puyallup. He is the Chairman of the
Executive Committee and, as Chairman of the Board, Mr. Carlson serves on all
standing committees.

THOMAS F. LEONARD: Mr. Leonard, has been a Director since 1987 and has
served as President of the Company for the last twelve years. Prior to joining
the Company, he was Vice President, Corporate Administration for Vail, Beaver
Creek. He has served on the board of the National Ski Areas Association and
Washington State Ski Industries and is immediate past Chairman of the Pacific
Northwest Ski Areas Association. Mr. Leonard is a member of the Executive
Committee.

PETER G. GILLIS: Mr. Gillis: Mr. Gillis has been employed by the Company
since July, 1990 after having worked as Assistant General Manager at Bretton
Woods Resort in New Hampshire. Since 1992, he has served as Vice President in
charge of Mountain Operations.

LAWRENCE E. HARD: Mr. Hard, has been a Director since 1987 and has served
as Secretary of the Company since 1982. He is an attorney and shareholder of
the law firm of LeSourd & Patten, P.S. Mr. Hard is a member of the Executive
Committee.

WILLIAM W. JEUDE: Mr. Jeude, has served as a Director since 1992 and has
served as Treasurer of the Company since 1995. He is the owner and President of
the Univest group of companies involved in investment banking and brokerage,
mergers and acquisitions, and real estate brokerage, investment and development.
Mr. Jeude has been a licensed general securities principal and broker since
1982, affiliated with Craig and Associates, Inc., a securities brokerage firm,
as a registered representative since 1991. Mr. Jeude is a CPA and also holds a
real estate designated broker license. He is chair of the Budget/Finance/Audit
Committee and the Capital Strategies Committee and is a member of the Nominating
Committee and the Executive Committee.

W. DAVID SCHODDE, JR.: Mr. Schodde, has been a Director since 1983. He
has served as Vice Chairman of the Board since June 1994. He has been the
President of Enumclaw Landscape Maintenance, Inc., for the past twenty-four
years, and the owner of the Enumclaw Nursery for ten years. He is Vice Chairman
of the Green River Community College Board of Trustees. Mr. Schodde is the
Chairman of the Compensation Committee and a member of the Executive and the
Budget/Finance/Audit Committees.

The business experience of those Directors who are not officers is
discussed herein under "Election of the Board of Directors"

COMMITTEES

The Board has established an Executive Committee, a Compensation Committee,
a Nominating Committee, a Budget/Finance/Audit Committee, a Marketing and Public
Relations Committee, and a Capital Strategies Committee. The members of the
Executive Committee are

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<PAGE>

William W. Jeude, W. David Schodde, Jr., Lawrence E. Hard, Thomas F. Leonard,
and Robert E. Carlson. The Compensation Committee members are William S.
Coghill, Robert E. Carlson, Nancy K. Dees and Robert J. Diercks. The Nominating
Committee members are William W. Jeude, Robert E. Carlson and Robert J. Diercks.
The Budget/Finance/Audit Committee members are William W. Jeude, Delight S.
Mahalko, W. David Schodde, Jr. and Robert E. Carlson. The Marketing and Public
Relations Committee members are James C. Martinson, William S. Coghill, Peter F.
DeLaunay and Robert E. Carlson. The Capital Strategies Committee members are
William W. Jeude, Tom Leonard, Larry Hard, Robert Diercks and Robert E. Carlson.

During the past year, all Directors have attended 75% or more of the
aggregate number of meetings of the Board and of committee meetings of which
said Director is a member.

EXECUTIVE COMPENSATION

The Summary Compensation Table shows certain information for the Company's
Chairman of the Board who performs the duties of the Chief Executive Officer and
the other executive officer whose annual salary and bonus exceeds $100,000 for
services rendered in all capacities during the fiscal year from October 1, 1995
to April 30, 1996, as well as the fiscal years ended September 30, 1995, 1994,
and 1993. The information includes the dollar value of base salaries, bonuses,
the Company's contribution to the 401(k) retirement plan and certain other
compensation, if any, whether paid or deferred.

<TABLE>
<CAPTION>
All Other
Compensation
401(k) (including
Name and Principal Retirement deferred
Position Fiscal Year Salary Bonus Plan compensation)
- ---------------------- ---------------------- ------- ----- ---------- -------------
<S> <C> <C> <C> <C> <C>
Robert E. Carlson From May 1, 1996 until 5,400 -0- -0- -0-
Chairman of the Board October 31, 1996
(since 1994) (partial year)
------------------------------------------------------------------
From October 1, 7,000 -0- -0- -0-
1995 to April 30,
1996
------------------------------------------------------------------
1995 12,000 -0- -0- -0-
(October 1, 1994 -
September 30, 1995)
------------------------------------------------------------------
1994 3,000 -0- -0- -0-
(June 1, 1994 -
September 30, 1994)
------------------------------------------------------------------
Thomas F. Leonard From May 1, 1996 49,500 -0- -0- 7,700
President until October 31,
1996 (partial year)
------------------------------------------------------------------
From October 1, 64,000 -0- -0- 50,000(1)
1995 to April 30, 1996
------------------------------------------------------------------
1995 110,000 -0- 4,700 4,400(2)
(October 1, 1994 -
September 30, 1995)
------------------------------------------------------------------
1994
(October 1, 1993 - 89,700 -0- 2,027 4,400
September 30, 1994)
------------------------------------------------------------------
1993 89,700 -0- 3,140 12,105
(October 1, 1992 -
September 30, 1993)
------------------------------------------------------------------
</TABLE>
- ----------------
(1) Includes $30,000 deferred compensation for past years of service, and
$11,000 deferred compensation for the 1994-1995 fiscal year.

-43-

<PAGE>

(2) The President receives the use of a car and rent-free use of living
quarters located at the Resort, the combined value of which is estimated
to be as listed. The Board of Directors feels that it is essential that
the President live at Crystal Mountain and provides a residence because
no adequate private housing is otherwise available.

The President, Thomas F. Leonard, the Vice President for Mountain
Operations, Peter Gillis, and Robert E. Carlson, the Chairman of the Board,
received cash compensation. All other executive officers and directors of the
Company receive the equivalent of two season passes. The value of each season
pass is $695 based on the full 1995-1996 season pass price. The passes were
issued to 12 executive officers and directors for the 1995-1996 ski season.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the period from May 1, 1996 to December 29, 1996, the Company paid
approximately $113,827 for legal services and costs to LeSourd & Patten, P.S.
Lawrence E. Hard, a Director and officer of the Company, is a member of that
firm. For the same period, the Company paid approximately $16,123 for public
relations services to DeLaunay Communications, Inc. Peter F. DeLaunay, a
Director of the Company, is the President of that firm.

UPDATE OF PROJECTED RESULTS THROUGH SEPTEMBER 30, 1996

The projected results, stated in footnote 2 of the April 30, 1996 Annual
Report, for the 12 months ended September 30, 1996 was a loss of $790,000. The
unaudited actual loss was $750,000. There were no material risks or
uncertainties which accounted for the difference between the projected loss and
the actual loss.

MARKET PRICE OF THE COMMON SHARES AND RELATED SHAREHOLDER MATTERS

MARKET INFORMATION

The Company has outstanding voting securities consisting of 26,609 shares
of Class A Shares ($50 per share par value) and 710 shares of Class B Shares
($20 per share par value). The Company is aware several brokerage firms are
making a market in the Class A Shares. Transfers in the stock occur through
private transactions. The following table sets forth the range of prices at
which the Company's stock was sold in the public market by quarter as well as
the number of shares traded:
NUMBER OF SHARES
HIGH LOW TRANSFERRED OF RECORD
---- ---- ---------------------
December 1994 $310 $310 121
March 1995 $320 $310 70
June 1995 $325 $310 20
September 1995 $325 $325 97
December 1995 $335 $322 144
March 1996 $335 $310 86
June 1996 $335 $320 287
September 1996 $345 $320 408
December 1996 $340 $320 638

HOLDERS

As of March 6, 1997 there were 979 holders of record of the Company's
Class A Shares, and two holders of record of the Company's Class B Shares.

BENEFICIAL OWNERSHIP AND MANAGEMENT OWNERSHIP

As of March 6, 1997, there were no beneficial owners of more than five
percent (5%) of the outstanding Class A Shares of the Company. Beneficial
owners of more than five percent (5%) of the Class B Shares as of March 6, 1997
are as follows:

NAME & ADDRESS OF BENEFICIAL OWNER CLASS NUMBER PERCENTAGE
---------------------------------- ----- ------ ----------
Wallace T. Staatz B 700 98.6%
PO Box 490
Orting, WA 98360

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<PAGE>

Directors, nominees for Director and Officers of the Company beneficially
owned the following voting securities of the Company as of March 6, 1997:

Owner Class Number Percentage
----- ----- ------ ----------
Robert E. Carlson A 20 .08%
William S. Coghill A 21 .08%
Nancy K. Dees A 30 .11%
(Ms. Dees' 30 shares are owned jointly with
Paul Dees)
Peter F. DeLaunay A 20 .08%
Robert J. Diercks A 20 .08%
David W. Gossard A 62 .23%
Lawrence E. Hard A 60 .23%
William W. Jeude A 44 .16%
Thomas F. Leonard A 1 .00%
Delight S. Mahalko A 20 .08%
(Ms. Mahalko's 20 shares are owned jointly
with Harvey Mahalko)
James C. Martinson A 5 .01%
W. David Schodde, Jr. A 50 .19%
(Of 50 shares shown for Mr. Schodde, 29
shares are owned jointly by Mr. Schodde
and his wife, Gretchen Allen Schodde, and
21 shares are owned of record by his wife.) ---- ----- ------
All directors and officers as group A 355 1.32%

DIVIDENDS

The Company has never paid a cash dividend but does anticipate paying a
dividend on its Class A Shares in the near future as part of the Reorganization,
pursuant to which the shareholders may receive $154.48 per share in cash or one
Club membership unit per share. The Company has annually distributed lift
privileges to each holder of at least 20 Class A Shares, as required by its
articles of incorporation, by providing these shareholders the right to purchase
lift tickets and season's passes at a discount.

PROPOSAL II: ELECTION OF DIRECTORS

Unless otherwise specified in the proxy, the Proxy Committee intends to
vote the proxies given to it in favor of the election as Directors of the
Company of the persons listed below, to hold office for terms of three years
from the day of the Annual Meeting and until their successors are elected and
qualified. If a person or persons other than the nominees named below is or are
nominated for election as a Director, the Proxy Committee may, with
discretionary authority, vote cumulatively the shares given it for less than all
of such nominees and/or may select from such nominees those for whom the proxies
will be so voted. In case any of the nominees are unable or decline to serve,
the proxy may be voted for another person in his or her stead. The Board of
Directors has no reason to believe that any person named below will be unable or
will decline to serve.

All four nominees are current Directors of the Company, serving terms which
expire at the Annual meeting. Messrs. Carlson, Hard and Leonard have been
directors since 1987. Ms. Dees has been a director since 1990. On the
following pages, identifying information is provided for each person nominated
for election to the Board of Directors, including their principal occupation
during the last five years. Also shown is similar information for the Directors
whose terms of office will continue after the Annual Meeting.

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<PAGE>

NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS FOR TERMS TO EXPIRE IN 1999

ROBERT E. CARLSON: Mr. Carlson, 56, has been a director since 1987 and has
served as Chairman of the Board since June 1994. He is the Manager of the
Western Washington Fair Association in Puyallup. He is the Chairman of the
Executive Committee and, as Chairman of the Board, Mr. Carlson serves on all
standing committees.

NANCY K. DEES: Ms. Dees, 57, has been a Director since 1990. She holds a
Bachelor of Science in Nursing and is a member of the Board of Directors of
Northwest Regional Education Laboratory. Ms. Dees is also a member of the Board
of Directors of Pierce County Medical Bureau and serves on the General Advisory
Council of Bates Technical College in Tacoma. She is a member of the Puyallup
School District Board of Directors. Ms. Dees is a member of the Compensation
Committee.

LAWRENCE E. HARD: Mr. Hard, 52, has been a Director since 1987 and has
served as Secretary of the Company since 1982. He is an attorney and
shareholder of the law firm of LeSourd & Patten, P.S. Mr. Hard is a member of
the Executive Committee.

THOMAS F. LEONARD: Mr. Leonard, 53 has been a Director since 1987 and has
served as President of the Company for the last twelve years. Prior to joining
the Company, he was Vice President, Corporate Administration for Vail, Beaver
Creek. He has served on the board of the National Ski Areas Association and
Washington State Ski Industries and is immediate past Chairman of the Pacific
Northwest Ski Areas Association. Mr. Leonard is a member of the Executive
Committee.

Members of the Board of Directors Continuing in Office Whose Terms Expire
in 1998 are William W. Jeude, Delight S. Mahalko, James C. Martinson and W.
David Schodde. Members of the Board of Directors Continuing in Office Whose
Terms Expire in 1997 are William S. Coghill, Peter F. DeLaunay, Robert J.
Diercks and David W. Gossard. Their business experience is described below.

MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE WHOSE TERMS EXPIRE IN
1998

WILLIAM W. JEUDE: Mr. Jeude, 49, has served as a Director since 1992 and
has served as Treasurer of the Company since 1995. He is the owner and
President of the Univest group of companies involved in investment banking and
brokerage, mergers and acquisitions, and real estate brokerage, investment and
development. Mr. Jeude has been a licensed general securities principal and
broker since 1982, affiliated with Craig and Associates, Inc., a securities
brokerage firm, as a registered representative since 1991. Mr. Jeude is a CPA
and also holds a real estate designated broker license. He is chair of the
Budget/Finance/Audit Committee and the Capital Strategies Committee and is a
member of the Nominating Committee and the Executive Committee.

DELIGHT S. MAHALKO: Ms. Mahalko, 61, has been a Director since 1983.
Since April of 1991, she has been an Executive Secretary for the Pacific
Northwest Ski Areas Association. She has also served as Secretary for the
Washington State Ski Industries. Ms. Mahalko worked as an Administrative
Assistant for Mel Borgersen Consultants, International Ski Resort Consultants
from January 1968 to April 1991. She is currently a member of the
Budget/Finance/Audit Committee.

JAMES C. MARTINSON: Mr. Martinson, 50, has been a Director since 1992.
From 1981 through 1992, he owned and operated Magic in Motion which manufactures
sporting equipment for the disabled. In 1992, he merged his corporation with
Sunrise Medical and now acts as manager of marketing for the Shadow Products
division. Mr. Martinson is also an Olympic Gold Medalist for the U.S. Disabled
Ski Team. He is a member of the Marketing and Public Relations Committee.

W. DAVID SCHODDE, JR.: Mr. Schodde, 54, has been a Director since 1983.
He has served as Vice Chairman of the Board since June 1994. He has been the
President of Enumclaw Landscape Maintenance, Inc., for the past twenty-four
years, and the owner of the Enumclaw Nursery for ten years. He is Vice Chairman
of the Green River Community College Board of Trustees. Mr. Schodde is the
Chairman of the Compensation Committee and a member of the Executive and the
Budget/Finance/Audit Committees.

MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE WHOSE TERMS EXPIRE IN
1997

WILLIAM S. COGHILL: Mr. Coghill, 68, has been a Director since 1985. In
1991, he became General Manager of Emco Wood Products, Inc., in Stanwood,
Washington, after establishing the forest products industry consulting firm,

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<PAGE>

Coghill & Associates. In 1989, he concluded 25 years in wood products
production management and technology implementation with Weyerhaeuser company
where his last position was Technology Marketing Manager. In September 1995, he
accepted the business and operations improvement responsibilities for Tom
Torrens Sculpture & Design, Inc., in Gig Harbor, Washington. Mr. Coghill is
currently a member of the Compensation, Marketing and Public Relations
Committees.

PETER F. DELAUNAY: Mr. DeLaunay, 46, has served as a Director since 1992.
He is a marketing professional who has worked with the Company and the Sun
Valley resort, and Helly-Hansen ski wear. Mr. DeLaunay is the President of
DeLaunay Communications, Inc. He was formerly SVP/Director of Client Services
for Hill and Knowlton, Inc. and EVP/Client Services Director for Elgin Syferd,
Inc. Mr. DeLaunay serves on the Marketing and Public Relations Committee.

ROBERT J. DIERCKS: Mr. Diercks, 55, has been a Director since 1985. He is
an attorney and a partner in the law firm of Foster Pepper & Shefelman.
Mr. Diercks is currently Chairman of the Nominating Committee and a member of
the Compensation Committee.

DAVID W. GOSSARD: Mr. Gossard, 67 has served as a Director since October,
1994. He is an attorney who is currently a sole practitioner whose practice
includes advising various business clients. Mr. Gossard is an experienced skier
and has been a shareholder of the Company since 1963.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS OF
THE COMPANY VOTE FOR THE PROPOSED DIRECTORS.

OTHER INFORMATION
ACCOUNTANTS

The Company employed Moss Adams, LLP as its independent public accountants
during the past fiscal year. During the two most recent fiscal years, there
were no disagreements on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope of procedure. The
accountant's report on the financial statements has never contained an adverse
opinion or a disclaimer of opinion, or been modified as to uncertainty, audit
scope, or accounting principles.

Representatives of Moss Adams, LLP are expected to be present at the Annual
Meeting, with the opportunity given to them to make a statement if they so
desire, and to respond to appropriate questions.

OTHER MATTERS

The Board of Directors does not intend to bring any matters before the
Annual Meeting other than those specified herein, and the Board of Directors
does not have any information that other matters will be introduced at the
Annual Meeting. If other matters are introduced, it is the intention of the
Proxy Committee to vote the proxies in accordance with its judgment.

SHAREHOLDER PROPOSALS FOR NEXT MEETING

Shareholder proposals intended for inclusion in next year's proxy statement
(should the Merger not be approved) should be sent to Lawrence E. Hard,
Secretary, Crystal Mountain, Inc., One Crystal Mountain Blvd., Crystal Mountain,
Washington 98022, and must be received by July 14, 1997.

AVAILABLE INFORMATION

The Company is subject to information and reporting requirements of the
Securities Exchange Act of 1934, as amended, and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington
D.C. 20549, and at certain regional offices of the Commission located at
Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661,
and at 7 World Trade Center, 13th Floor, New York, New

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<PAGE>

York 10048. Copies of such information can also be obtained at prescribed
rates from the Public Reference Section of the Commission at the above address
in Washington, D.C. A copy of the Company's most recent 10-KSB is delivered
with this Proxy Statement.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

This Proxy Statement is accompanied by the Company's annual report on Form
10-KSB for the fiscal year ended April 30, 1996 (the "Annual Report") and the
quarterly reports on form 10-QSB for the quarters ended July 31, 1996, October
31, 1996 and January 31, 1997 (the "Quarterly Reports").

The Company's Annual Report and the Quarterly Reports (File Number
000-02374) previously filed with the Commission pursuant to the Securities and
Exchange Act of 1934 (the "Exchange Act") are incorporated herein by reference.
The information relating to the Company contained in this Proxy Statement does
not purport to be comprehensive and should be read together with the information
in the documents incorporated by reference.

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document which also is incorporated by reference
herein) modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed to constitute a part hereof except as so modified
or superseded. All information appearing in this Proxy Statement is qualified
in its entirety by the information and financial statements (including notes
thereto) appearing in the documents incorporated herein by reference, except to
the extent set forth in the immediately preceding statement.

March 10, 1997 BY ORDER OF THE BOARD OF DIRECTORS

/s/ Lawrence E. Hard

Lawrence E. Hard
SECRETARY
Crystal Mountain, Inc.

APPENDICES
Appendix A -- Reorganization Agreement and Agreement and Plan of Merger
among Crystal Mountain, Inc., Boyne USA, Inc. and CM Acquisition
Corporation dated as of December 6, 1996, including:
- Exhibit A, form of Ski Club Operating Agreement between Crystal
Mountain, Inc. and the Crystal Mountain Founders' Club;
- Exhibit B, form of Qualified Expenditure Agreement between
Boyne USA, Inc. and the Crystal Mountain Founders' Club; and
- Exhibit C, form of Pledge Agreement by Boyne USA, Inc. in favor
of the Crystal Mountain Founders' Club.
Appendix B -- Sections 23B.13.010 to 23B.13.310 of the Revised Code of
Washington
Appendix C -- Fairness Opinion Of The Company's Financial Advisor,
Houlihan Valuation Advisors, dated February 12, 1997.

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<PAGE>

Composite Agreement
Composite Conformed Copy
As Amended

REORGANIZATION AGREEMENT AND

AGREEMENT AND PLAN OF MERGER

DATED AS OF

DECEMBER 6, 1996

AMONG

CRYSTAL MOUNTAIN, INC.

BOYNE USA, INC.

AND

CM ACQUISITION CORPORATION

<PAGE>

TABLE OF CONTENTS

ARTICLE 1
DEFINITIONS

1.1 Terms Defined Elsewhere . . . . . . . . . . . . . . . . . . . . 1
1.2 Definitions Related to the Time of Various Events . . . . . . . 2
1.3 General Definitions . . . . . . . . . . . . . . . . . . . . . . 2

ARTICLE 2
TAXABLE REORGANIZATION OF CMI

2.1 Amendment of Articles and Bylaws. . . . . . . . . . . . . . . . 5
2.2 Distribution of Club Memberships and Cash . . . . . . . . . . . 5
(a) DECLARATION OF DIVIDEND
(b) RECORD DATE; DIVIDEND ELECTION FORMS
(c) DIVIDEND IN MEMBERSHIPS
(d) DIVIDEND IN CASH
2.3 Club Operating Agreement; Current Season. . . . . . . . . . . . 6

ARTICLE 3
THE MERGER

3.1 The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Conversion of Shares. . . . . . . . . . . . . . . . . . . . . . 7
3.3 Surrender and Payment . . . . . . . . . . . . . . . . . . . . . 7
3.4 Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . 8
3.5 The Surviving Corporation . . . . . . . . . . . . . . . . . . . 9

ARTICLE 4
CLOSING; CONDITIONS PRECEDENT

4.1 Consummation of Transactions. . . . . . . . . . . . . . . . . . 9
(a) PROXY STATEMENT AND OTHER DISCLOSURE DOCUMENTS
(b) STOCKHOLDER MEETING
(c) THIRD-PARTY ACTIONS
(d) PUBLIC ANNOUNCEMENTS
(e) REORGANIZATION
(f) MERGER
(g) QUALIFIED EXPENDITURE AGREEMENT
(h) FURTHER ASSURANCES
4.2 Conditions to the Obligations of Each Party . . . . . . . . . . 10
4.3 Conditions to the Obligations of CMI. . . . . . . . . . . . . . 10
4.4 Conditions to the Obligations of Boyne and Newco. . . . . . . . 11
4.5 Condition to the Merger . . . . . . . . . . . . . . . . . . . . 11

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<PAGE>

ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF CMI
<TABLE>
<S> <C> <C>
5.1 Corporate Existence and Power . . . . . . . . . . . . . . . . . 12
5.2 Corporate Authorization . . . . . . . . . . . . . . . . . . . . 12
5.3 Governmental Authorization; Consents. . . . . . . . . . . . . . 12
5.4 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . 12
5.5 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . 12
5.6 SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.7 Financial Statements. . . . . . . . . . . . . . . . . . . . . . 13
5.8 Absence of Certain Changes. . . . . . . . . . . . . . . . . . . 13
5.9 No Undisclosed Material Liabilities . . . . . . . . . . . . . . 14
5.10 Stockholder Lift Privileges . . . . . . . . . . . . . . . . . . 14
5.11 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.12 Insurance Coverage. . . . . . . . . . . . . . . . . . . . . . . 15
5.13 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . 15
5.14 Environmental Matters . . . . . . . . . . . . . . . . . . . . . 16
5.15 Building Laws . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.16 Forest Service Permits. . . . . . . . . . . . . . . . . . . . . 17
5.17 Other Licenses and Permits. . . . . . . . . . . . . . . . . . . 18
5.18 Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.19 Material Contracts. . . . . . . . . . . . . . . . . . . . . . . 18
5.20 Intellectual Property . . . . . . . . . . . . . . . . . . . . . 19
5.21 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.22 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . 19
5.23 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.24 Not a Member of a Tax or ERISA Group. . . . . . . . . . . . . . 20
5.25 No Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 20
5.26 Finders' Fees . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.27 Other Information . . . . . . . . . . . . . . . . . . . . . . . 21
5.28 Disclosure Documents. . . . . . . . . . . . . . . . . . . . . . 21
5.29 The Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(a) CORPORATE EXISTENCE AND POWER
(b) CORPORATE AUTHORIZATION
(c) GOVERNMENTAL AUTHORIZATIONS
(d) NO ACTIVITIES
(e) BYLAWS
5.30 Reorganization Date Representation. . . . . . . . . . . . . . . 22

ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BOYNE

6.1 Corporate Existence and Power . . . . . . . . . . . . . . . . . 22
6.2 Corporate Authorization . . . . . . . . . . . . . . . . . . . . 22
6.3 Governmental Authorization; Consents. . . . . . . . . . . . . . 22
6.4 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . 23
6.5 Finders' Fees . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.6 Other Information . . . . . . . . . . . . . . . . . . . . . . . 23
6.7 Disclosure Documents. . . . . . . . . . . . . . . . . . . . . . 23

</TABLE>

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<PAGE>
ARTICLE 7
COVENANTS OF CMI
<TABLE>
<S> <C> <C>
7.1 Conduct of CMI. . . . . . . . . . . . . . . . . . . . . . . . . 23
7.2 Access to Information . . . . . . . . . . . . . . . . . . . . . 24
7.3 Other Offers. . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.4 Notices of Certain Events . . . . . . . . . . . . . . . . . . . 24
7.5 Formation of the Club . . . . . . . . . . . . . . . . . . . . . 24

ARTICLE 8
COVENANTS OF BOYNE

8.1 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . 25
8.2 Obligations of Newco. . . . . . . . . . . . . . . . . . . . . . 25
8.3 Director and Officer Liability. . . . . . . . . . . . . . . . . 25

ARTICLE 9
TERMINATION
9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . 26

ARTICLE 10
MISCELLANEOUS

10.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.2 Survival of Representations and Warranties. . . . . . . . . . . 27
10.3 Amendments; No Waivers. . . . . . . . . . . . . . . . . . . . . 27
10.4 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.5 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . 28
10.6 Governing Law; Submission to Jurisdiction . . . . . . . . . . . 28
10.7 Headings and Captions . . . . . . . . . . . . . . . . . . . . . 28
10.8 Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . 28
</TABLE>
Schedule 5.11 Litigation
5.12 Insurance Coverage
5.14 Environmental Matters
5.15 Building Laws
5.16 Forest Service Permits
5.17 License and Permits
5.18 Liens
5.19 Material Contracts
5.20 Intellectual Property
5.21 Employees
5.22 Employee Benefit Arrangements
5.23 Personal Property Tax Accruals
5.25 No Subsidiaries

Exhibit A Club Operating Agreement
B Qualified Expenditure Agreement
C Pledge Agreement
D Dividend Election Form
E Opinion of Bogle & Gates P.L.L.C.
F Opinion of John S. Clark
G Opinion of LeSourd & Patten, P.S.

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<PAGE>

REORGANIZATION AGREEMENT AND
AGREEMENT AND PLAN OF MERGER

AGREEMENT dated as of December 6, 1996 among Crystal
Mountain, Inc., a Washington corporation ("CMI"), Boyne USA, Inc., a Michigan
corporation ("Boyne"), and, after such party executes and delivers a
counterpart of this Agreement as contemplated by Section 8.2, CM Acquisition
Corporation, a Washington corporation ("Newco").

WHEREAS, CMI owns and operates Crystal Mountain, a
ski resort on federally-owned land in Washington State;

WHEREAS, the holders of CMI's Class A common stock
are entitled, pursuant to CMI's articles of incorporation and bylaws, to
receive each year lift tickets and season's passes for use at the Crystal
Mountain ski resort, on the terms and subject to the conditions set forth in
CMI's articles and bylaws;

WHEREAS, Boyne wishes to acquire the stock of CMI
from the holders thereof, but does not necessarily wish to acquire the lift
privileges of the Class A stockholders described in the preceding recital; and

WHEREAS, CMI wishes to allow its Class A stockholders
the option to retain their lift privileges by distributing to them, before
Boyne acquires the stock of CMI, memberships in Crystal Mountain Founders'
Club, a Washington nonprofit corporation (the "Club");

NOW, THEREFORE, in consideration of the foregoing and
the representations, warranties, covenants and agreements herein contained,
the parties hereto agree as follows:

ARTICLE 1
DEFINITIONS

1.1 TERMS DEFINED ELSEWHERE. Each of the following
terms, when capitalized, is used herein with the meaning set forth in the
Section or other part of this Agreement identified opposite such term below:

Account Holder 5.10
Acquisition Proposal 7.3
Benefit Arrangement 5.22
Boyne Preamble
Boyne Payment Agent 3.3
Building Laws 5.15
CERCLA 5.14
Club Fourth recital
CMI Preamble
CMI Payment Agent 2.2.(d)
Condominium Permit 5.16
Current Lift Privilege Record Date 5.10
Disclosure Document 4.1
Dividend Election Form 2.2.(b)
Environmental Laws 5.14
401(k) Plan 5.22
Hazardous Substance 5.14
Intellectual Property Right 5.20
Lift Privilege Account 5.10
Merger Consideration 3.2

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<PAGE>

Newco Preamble
Proxy Statement 4.1
Release 5.14
Retail Price Exhibit A
Ski Area Permit 5.16
Special Permit Regulations 5.16
Surviving Corporation 3.1

1.2 DEFINITIONS RELATED TO THE TIME OF VARIOUS
EVENTS. Each of the following terms, when capitalized, is used herein with
the meanings set forth below:

"Record Date" means the day before the Proxy
Statement is first distributed to CMI's stockholders, or another date that
CMI and Boyne may reasonably agree upon as the Record Date.

"Dividend Election Deadline" means the date of the
meeting of CMI's stockholders for the purpose of voting on the approval of
the amendment to CMI's articles of incorporation described in Section 2.1 and
on the approval of the Merger, as set forth in CMI's call of such meeting
(without regard to any delay or adjournment of such meeting), or a later date
(not later than 119 days after the date of such meeting) designated by Boyne
by notice to CMI.

"Reorganization Date" means the earliest practicable
date after December 31, 1996 on which the conditions to the occurrence of the
Reorganization Date set forth in Article 4 are satisfied or waived, or (if
the Reorganization Date has not previously occurred) the Drop-Dead Date.

"Merger Time" means the time at which articles of
merger with respect to the Merger are duly filed with the Secretary of State
of the State of Washington as described in Section 3.1.

"Drop-Dead Date" means April 15, 1997, or such later
date that CMI and Boyne may reasonably agree upon as the Drop-Dead Date.

1.3 GENERAL DEFINITIONS. Each of the following
terms, when capitalized, is used herein with the meanings set forth below:

"Affiliate" of any Person (the "Reference Person")
means (i) any Person directly or indirectly controlling, controlled by or
under common control with the Reference Person or an Affiliate of the
Reference Person, (ii) if the Reference Person is a corporation or similar
entity, each member of the Reference Person's board of directors or similar
body, (iii) if the Reference Person is a limited liability company or similar
entity, each manager of the Reference Person (or holder of a similar office)
and (if the Reference Person is member-managed) each member of the Reference
Person, (iv) if the Reference Person is a general or limited partnership,
each general partner of the Reference Person, (v) if the Reference Person is
an estate or trust, each fiduciary of the Reference Person and each
beneficiary of the Reference Person, (vi) if the Reference Person is a
natural person, each relative of the Reference Person and any corporation or
similar entity of whose board of directors or similar body the Reference
Person is a member, (vii) each general or limited partnership of which the
Reference Person is a general partner,(viii) each trust or estate of which
the Reference Person is a fiduciary or beneficiary and (ix) each Affiliate of
an Affiliate of the Reference Person. For the purpose of this definition,
"control" means possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

"Balance Sheet" means the audited balance sheet of
CMI as of April 30, 1996 included in CMI's annual report on Form 10-KSB for
the seven months ended April 30, 1996.

"Class A Share" means one share of Class A common
stock, par value $50.00 per share, of CMI.

"Class B Share" means one share of Class B common
stock, par value $20.00 per share, of CMI.

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"Club Operating Agreement" means an agreement between
CMI and the Club in substantially the form of Exhibit A.

"Debt" of any Person means all obligations for
borrowed money, all obligations evidenced by bonds, debentures, notes or
other similar instruments, all obligations to pay the deferred purchase price
of property or services (except trade accounts payable, payroll liabilities
and deferred revenues arising in the ordinary course of business consistent
with past practice), all obligations as lessee which are capitalized in
accordance with GAAP, all obligations of others secured by a Lien on any
asset of such Person, whether or not such obligations are assumed by such
Person, and all obligations of others guaranteed by such Person.

"ERISA" means the Employee Retirement Income Security
Act of 1974 and the rules and regulations promulgated thereunder, as amended
from time to time.

"Financial Statements" means the financial statements
(including the notes thereto) included in CMI's Form 10-KSB for the seven
months ended April 30, 1996, as delivered to Boyne before the date hereof.

"Forest Service" means the United States Forest
Service, an agency of the United States Department of Agriculture, and any
agency that succeeds to the functions of such agency.

"GAAP" means generally accepted accounting principles
applied on a basis consistent with that used to prepare the Financial
Statements.

"Houlihan" means Houlihan Valuation Advisors.

"Improvements" means the lodges, restaurants, hotels,
shops, maintenance facilities, buildings, structures, parking lots, pads,
improvements and fixtures now or hereafter owned or operated by CMI that are
in the general vicinity within which CMI currently owns or operates
improvements and fixtures or are reachable by skiers from any Lift, including
at any relevant time such improvements and fixtures now existing that
continue to exist at such time, as well as any replacement or additional
improvements and fixtures.

"Internal Revenue Code" means the Internal Revenue
Code of 1986 and the rules and regulations promulgated thereunder, as amended
from time to time.

"Lien" means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind
in respect of such asset. For the purposes of this Agreement, any Person will
be deemed to own subject to a Lien any asset which 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 relating to such
asset.

"Lifts" means the ski lifts, ski tows and conveyances
for conducting individuals uphill (including without limitation chair lifts,
rope tows and other lifts) now or hereafter owned or operated by CMI that are
in the general vicinity within which CMI currently operates ski lifts or are
reachable by skiers from another Lift, including at any relevant time such of
the ski lifts now operated that continue to operate at such time, as well as
any replacement or additional ski lifts.

"Material Adverse Effect" means a material adverse
effect on the business, assets, condition (financial or otherwise), result of
operations or prospects of CMI or on the Relevant Current Property or any
Lift or Improvement.

"Membership Unit" means one membership unit in the
Club, as described in the articles of incorporation and bylaws of the Club,
as adopted and amended from time to time.

"Merger" means the merger of Newco with and into CMI
described in Article 3.

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<PAGE>

"1934 Act" means the Securities Exchange Act of 1934
and the rules and regulations promulgated thereunder, as amended from time to
time.

"Person" means an individual, a corporation, a
partnership, a limited liability company, an association, a trust or other
entity or organization, including a government or political subdivision or an
agency or instrumentality thereof.

"Pledge Agreement" means an agreement of Boyne for
the benefit of the Club in substantially the form of Exhibit C.

"Qualified Expenditure Agreement" means an agreement
between Boyne and the Club in substantially the form of Exhibit B.

"RCW" means the Revised Code of Washington, as
amended from time to time.

"Recreation Commission" means the Washington State
Parks and Recreation Commission, and any agency that succeeds to the
functions of such agency.

"Relevant Current Property" means any property now or
hereafter covered by CMI's Forest Service Permit or now or hereafter owned,
leased or used by CMI.

"Relevant Property" means any property previously,
now or hereafter covered by CMI's Forest Service Permit or previously, now or
hereafter owned, leased or used by CMI.

"Reorganization" means the amendment to CMI's
articles of incorporation described in Section 2.1, the distribution of the
dividend to holders of CMI's Class A Shares described in Section 2.2 and the
entry by CMI and the Club into the Club Operating Agreement as described in
Section 2.3.

"Resort" means the ski area and base facilities
commonly referred to as "Crystal Mountain," as in existence at the date
hereof and as improved, modified and added to after the date hereof and after
the Merger Time, including without limitation the Lifts, the Improvements and
the equipment used in connection with the Lifts and Improvements (such as,
without limitation, snow-making equipment, snow grooming equipment, vehicles,
lighting and food-service equipment).

"SEC" means the Securities and Exchange Commission.

"SeaFirst" means Bank of America NW (sometimes known
as Seattle-First National Bank).

"Season" means the twelve months beginning on October
1 of each year and ending on September 30 of the following year.

"SeaFirst Facility" means the Second Amended and
Restated Loan Agreement dated September 14, 1995 between CMI and SeaFirst, as
provided by CMI to Boyne before the date hereof and as amended and modified
by amendments provided by CMI to Boyne before the date hereof.

"Share" means one share of common stock of CMI,
either a Class A Share or a Class B Share.

"Tax" payable by any Person means any tax or
governmental charge or assessment imposed on such Person, including without
limitation any tax or governmental charge or assessment measured by such
Person's net income, gross income, gross receipts or sales; any use, ad
valorem, value added, franchise, profits, license, payroll, employment,
excise, severance, stamp, occupation, premium, property, environmental,
windfall profit, alternative or add-on minimum tax or governmental charge or
assessment; any withholding of amounts paid to or by such Person on account
of any such tax, governmental charge or assessment; and any interest or any
penalty, addition to tax or additional amount imposed by any governmental
authority responsible for the imposition of any Tax.

"Transaction Costs" means costs incurred by CMI in
connection with the completion of the transactions contemplated hereby,
including without limitation (a) fees and expenses of legal advisors, public
relations firms and other consultants, (b) costs incurred in preparing and
negotiating this Agreement and related documents, (c) the cost of printing
and mailing the Proxy Statement and (d) costs incurred in

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<PAGE>

incorporating and organizing the Club, and in making the initial arrangements
for organization of the business of the Club.

"WAC" means the Washington Administrative Code, as
amended from time to time.

"Washington BCA" means the Washington Business
Corporation Act, RCW title 23B, as amended from time to time.

ARTICLE 2
TAXABLE REORGANIZATION OF CMI

2.1 AMENDMENT OF ARTICLES AND BYLAWS. Subject to
the conditions to the Reorganization set forth in Article 4:

(a) CMI will amend its articles of incorporation and
bylaws to eliminate the lift privileges associated with the Class A Shares,
as follows:

(i) the third paragraph of Article
V of CMI's articles of incorporation will be amended to
delete the last three words thereof, so that such paragraph
reads: "Each share of common stock, whether it be Class A
or Class B, shall enjoy equally all other rights,
preferences and restrictions.";

(ii) the fourth and fifth paragraphs of Article V of
CMI's articles of incorporation will be deleted in their
entirety;

(iii) the seventh paragraph of Article V of CMI's
articles of incorporation will be deleted in its entirety;
and

(iv) Sections 1 and 2 of Article IV of CMI's bylaws
will be deleted in their entirety; and

(b) On the Reorganization Date CMI will file with
the Secretary of State of the State of Washington articles of amendment to
its articles of incorporation complying with RCW 23B.10.060 and make all
other filings and take all other actions required by the Washington BCA in
connection with the Reorganization.

2.2 DISTRIBUTION OF CLUB MEMBERSHIPS AND CASH. (a)
DECLARATION OF DIVIDEND. CMI will declare a dividend to holders of Class A
Shares of, at the election of each holder of Class A Shares, either cash or
one or more memberships in the Club, at the following rates:

(i) one Membership Unit in the Club per Class A Share or

(ii) $154.48 in cash per Class A Share,

such dividend to be distributed in the manner, at the times and subject to
the conditions set forth in this Agreement, including without limitation the
provisions of this Section and the conditions to the Reorganization set forth
in Article 4. Upon satisfaction or waiver of such conditions, CMI will
distribute such dividend. Boyne will take all action necessary so that such
dividend complies with RCW 23B.06.400(2) at the time of payment of the cash
portion thereof.

(b) RECORD DATE; DIVIDEND ELECTION FORMS. The
record date for the dividend described in this Section will be the Record
Date. Each reference in this Section to the "holder" of any Class A Shares,
to the number of Class A Shares "held" by any Person, and each similar
reference, refers to the Persons and number of shares shown on CMI's stock
transfer records at the close of business on the Record Date. CMI will mail
to each holder of Class A Shares, at the time directed by Boyne by written
notice to CMI, a distribution election form in substantially the form
attached hereto as Exhibit D (each, a "Dividend Election Form"), instructing
each such holder that such form should be completed and returned to CMI not
later than 5:00 pm, Seattle time, on the Dividend Election Deadline.

(c) DIVIDEND IN MEMBERSHIPS. On the Reorganization
Date, subject to the conditions to the Reorganization set forth in Article 4,
CMI agrees that the Club will admit as a member of the Club each

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Person listed as a proposed member on a Dividend Election Form that is
properly completed and effective (as described in the next sentence), with
the number of Membership Units shown opposite such Person's name on such
Dividend Election Form. A Dividend Election Form will be properly completed
and effective if: (i) the Person submitting such Dividend Election Form is a
holder of Class A Shares, (ii) such Dividend Election Form appears to be
signed by the Person submitting such Dividend Election Form, (iii) the total
number of Membership Units on such Dividend Election Form is equal to or less
than the total number of Class A Shares held by the Person submitting such
Dividend Election Form, (iv)such Dividend Election Form is in substantially
the form mailed by CMI without material alteration or addition (other than
completion of the information to be supplied by the Person submitting such
form) and (v) such Dividend Election Form is received by CMI at the address
set forth therein not later than 5:00 pm, Seattle time, on the Dividend
Election Deadline. If CMI receives a Dividend Election Form that is, or
appears to be, ineffective, CMI may at its option (but will not be obligated
to) contact the Person that submitted such Dividend Election Form and assist
such Person, or an appropriate other Person, to submit an effective Dividend
Election Form. A holder of Class A Shares may submit more than one Dividend
Election Form, PROVIDED that the aggregate number of shares covered by all
such forms is equal to or less than the total number of shares held by such
holder. If any holder of Class A Shares submits two or more effective
Dividend Election Forms covering an aggregate number of Class A Shares that
is greater than the total number of Class A Shares held by such holder, CMI
may treat later-submitted forms as effective and disregard one or more
earlier-submitted forms, or may treat all such Dividend Election Forms as
ineffective, at CMI's option. The Club's membership records will reflect
that each Person admitted as a member of the Club as provided above was so
admitted on the Reorganization Date. The Club will notify each Person
admitted as a member of the Club as provided above as promptly as practicable
after the Reorganization Date and each such Person will be entitled to all of
the privileges and benefits of membership in the Club, subject to the
limitations thereof, from and after the Reorganization Date.

(d) DIVIDEND IN CASH. Each holder of Class A Shares
who fails to submit an effective Dividend Election Form (including without
limitation each such holder who submits a Dividend Election Form that is not
effective) will be conclusively deemed to have elected to receive cash in
respect of all Class A Shares held by it. Subject to the conditions to the
Reorganization set forth in Article 4, on the Reorganization Date each holder
of Class A Shares will become entitled to receive (without interest) $154.48
times the excess (if any) of the number of Class A Shares held by it over the
total number of Membership Units set forth on any effective Dividend Election
Form submitted by such holder. Not later than the Reorganization Date, CMI
will appoint an agent (the "CMI Payment Agent"), for the purpose of paying
the cash portion of the dividend described in this Section. The CMI Payment
Agent will pay to each holder of Class A Shares the amount of cash to which
it is entitled pursuant to this Section (without interest), such payments to
be made as soon as practicable on or after the 121st day after the
Reorganization Date, but in any event not later than the 150th day after the
Reorganization Date. CMI will make available to the CMI Payment Agent, as
needed, the cash to be distributed to the holders of Class A Shares.

2.3 CLUB OPERATING AGREEMENT; CURRENT SEASON. (a)
Subject to the conditions to the Reorganization set forth in Article 4, on
the Reorganization Date CMI will execute and deliver (and will cause the Club
to execute and deliver) the Club Operating Agreement, in substantially the
form of Exhibit A. CMI will not amend or modify the Club Operating Agreement
in any manner until after the Merger Time.

(b) During the Season that begins in 1996 (including
the portion thereof after the Reorganization Date):

(i) CMI will continue to set up
Lift Privilege Accounts, and credit amounts thereto, as
described in Section 5.10 and in accordance with CMI's past
practice, at the direction of Persons who held Class A
Shares of record on the Current Lift Privilege Record Date
and

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<PAGE>

(ii) CMI will issue daily lift
tickets and season's passes (for use during that Season
only) to each Account Holder referred to in Section 5.10
(and its designees) in accordance with CMI's past practice,
PROVIDED that the Retail Price of the daily lift tickets
and season's passes so issued to such Account Holder and
its designees does not exceed the sum of (A) the amount
credited to such Account Holder's Lift Privilege Account as
described in Section 5.10 plus (B) cash received in partial
payment for such daily lift tickets and season's passes.

ARTICLE 3
THE MERGER

3.1 THE MERGER. (a) At the Merger Time, Newco will
be merged with and into CMI in accordance with the Washington BCA, whereupon
the separate existence of Newco will cease, and CMI will be the surviving
corporation.

(b) On the business day after articles of amendment
to the CMI Articles are filed with the Secretary of State of the State of
Washington as described in Section 2.1, CMI and Newco will file with the
Secretary of State of the State of Washington articles of merger complying
with RCW 23B.11.050 and make all other filings and take all other actions
required by the Washington BCA in connection with the Merger. The Merger
will become effective at the Merger Time, which is the time at which such
articles of merger are duly filed with the Secretary of State of the State of
Washington.

(c) From and after the Merger Time, CMI, as the
surviving corporation in the Merger (the "Surviving Corporation"), will
possess all the rights, privileges, powers and franchises and be subject to
all of the restrictions, disabilities and duties of CMI and Newco, all as
provided by the Washington BCA.

3.2 CONVERSION OF SHARES. At the Merger Time:

(a) each Class A Share and each
Class B Share held by CMI as treasury stock or owned by
Boyne or any subsidiary of Boyne immediately prior to the
Merger Time will be cancelled, and no payment will be made
with respect thereof;

(b) each share of common stock of
Newco outstanding immediately prior to the Merger Time will
be converted into and become one share of common stock of
the Surviving Corporation and will constitute the only
outstanding shares of capital stock of the Surviving
Corporation; and

(c) each Class A Share and each
Class B Share outstanding immediately prior to the Merger
Time will, except as otherwise provided in Section 3.2.(a)
or as provided in Section 3.4 with respect to Shares whose
holder is entitled to payment as a dissenter pursuant to
RCW Chapter 23B.13, be converted into the right to receive
$65.52 in cash, without interest (the "Merger
Consideration").

3.3 SURRENDER AND PAYMENT. (a) Boyne will appoint
an agent, which may be the same person that is appointed CMI Payment Agent
(the "Boyne Payment Agent"), for the purpose of exchanging certificates
representing Shares for the Merger Consideration. Boyne will make available
to the Boyne Payment Agent, as needed, the Merger Consideration to be paid in
respect of the Shares. For purposes of determining the Merger Consideration
to be made available, Boyne will assume that no holder of Shares will become
entitled to payment as a dissenter pursuant to RCW Chapter 23B.13. Promptly
after the Merger Time, Boyne will send, or will cause the Boyne Payment Agent
to send, to each holder of Shares at the Merger Time a letter of transmittal
for use in such exchange (which will specify that the delivery will be
effected, and risk of loss and title will pass, only upon proper delivery of
the certificates representing Shares to the Boyne Payment Agent, except as
described in Section 3.3.(d)). Such letter of transmittal will include a
certificate as to such information as is necessary for CMI to determine
whether it is required by the Internal Revenue Code to withhold tax from the
payment to be made to the holder of the shares transmitted.

(b) Each holder of Shares that have been converted
into a right to receive the Merger Consideration, upon surrender to the Boyne
Payment Agent of a certificate or certificates representing

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such Shares (or compliance with Section 3.3.(d)), together with a properly
completed letter of transmittal covering such Shares, will be entitled to
receive the Merger Consideration payable in respect of such Shares, PROVIDED
that CMI may withhold taxes from such payment as required by the Internal
Revenue Code. Until so surrendered, each such certificate will, after the
Merger Time, represent for all purposes only the right to receive the Merger
Consideration.

(c) If any portion of the Merger Consideration is to
be paid to a Person other than the record holder, at the Merger Time, of the
Shares represented by the certificate or certificates surrendered in exchange
therefor, it will be a condition to such payment that the certificate or
certificates so surrendered shall be properly endorsed or otherwise be in
proper form for transfer and that the Person requesting such payment shall
pay to the Boyne Payment Agent any transfer or other Tax required as a result
of such payment to a Person other than the record holder of such Shares or
establish to the satisfaction of the Boyne Payment Agent that such Tax has
been paid or is not payable.

(d) If any certificate representing Shares has been
lost or destroyed, the record holder thereof may make written application to
the board of directors of CMI for payment of the Merger Consideration to such
record holder without presentation of such certificate. The board of
directors of CMI will, upon execution and delivery to CMI of a good and
sufficient bond or other security deemed satisfactory by the board of
directors, and receipt of a properly completed letter of transmittal,
authorize the payment of the Merger Consideration to such record holder
without presentation of such certificate. If such certificate is later
presented to CMI, no further payment will be made on account of the shares
represented thereby, except as required by applicable law.

(e) After the Merger Time, there will be no further
registration of transfers of Shares. If, after the Merger Time, certificates
representing Shares are presented to CMI, they will be cancelled and
exchanged for the consideration provided for, and in accordance with the
procedures set forth, in this Article 3.

(f) Boyne or the Boyne Transfer Agent will send a
written reminder notice to each record holder of any Shares who has neither
exercised the dissenter's rights referred to in Section 3.4 nor transmitted
its Shares to CMI within four months after the Merger Time. Any portion of
the Merger Consideration made available to the Boyne Payment Agent pursuant
to Section 3.3.(a) that remains unclaimed by the holders of Shares six months
after the Merger Time will be returned to Boyne, upon demand, and any such
holder who has not exchanged his Shares for the Merger Consideration in
accordance with this Section prior to that time will thereafter look only to
Boyne for payment of the Merger Consideration in respect of his Shares.
Notwithstanding the foregoing, Boyne will not be liable to any holder of
Shares for any amount paid to a public official pursuant to applicable
abandoned property laws. Any amounts remaining unclaimed by holders of
Shares two years after the Merger Time will, to the extent permitted by
applicable law, become the property of Boyne free and clear of any claims or
interest of any Person previously entitled thereto.

(g) Any portion of the Merger Consideration made
available to the Boyne Payment Agent pursuant to Section 3.3.(a) to pay for
Shares for which the right to payment as a dissenter has been perfected as
described in RCW 23B.13.230(1) will be returned to Boyne, upon demand.

3.4 DISSENTING SHARES. (a) Notwithstanding Section
3.2, Shares outstanding immediately prior to the Merger Time and held by a
holder who (i) delivers to CMI, before the vote of the stockholders of CMI is
taken to approve the Merger, written notice of such holder's intent to demand
payment for such holder's Shares if the Merger is effected and (ii) does not
vote its Shares in favor of the Merger, will not be converted into a right to
receive the Merger Consideration, unless such holder fails to perfect or
withdraws or otherwise loses its right to payment under RCW Chapter 23B.13.
If after the Merger Time such holder fails to perfect or withdraws or loses
its right to payment under RCW Chapter 23B.13, such Shares will be treated as
if they had been converted as of the Merger Time into a right to receive the
Merger Consideration.

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<PAGE>

(b) CMI will give Boyne prompt notice of any notices
received by CMI of intent to demand payment for Shares under RCW Chapter
23B.13, and Boyne will have the right to participate in all negotiations and
proceedings with respect to such notices. CMI will send a dissenters' notice
within ten days after the Merger Time if, and as, required by RCW 23B.13.220.
CMI will not, except with the prior written consent of Boyne, make any
payment with respect to, or settle or offer to settle, any such demands.

3.5 THE SURVIVING CORPORATION. (a) The articles of
incorporation of the Surviving Corporation will be amended so they are
substantially the same as the articles of incorporation of Newco in effect at
the Merger Time, except that the name of the Surviving Corporation will
remain "Crystal Mountain, Inc."

(b) The bylaws of the Surviving Corporation will be
amended so they are substantially the same as the bylaws of Newco in effect
at the Merger Time, except that the name of the Surviving Corporation will
remain "Crystal Mountain, Inc."

(c) From and after the Merger Time, until successors
are duly elected or appointed and qualified in accordance with applicable
law, the directors of Newco at the Merger Time will be the directors of the
Surviving Corporation.

ARTICLE 4
CLOSING; CONDITIONS PRECEDENT

4.1 CONSUMMATION OF TRANSACTIONS. (a) PROXY
STATEMENT AND OTHER DISCLOSURE DOCUMENTS. The parties will cooperate and use
their best efforts in preparing and filing with the SEC, (i) as promptly as
practicable, a proxy statement of CMI complying with the 1934 Act, describing
the Reorganization and Merger, soliciting proxies from the stockholders of
CMI to approve the amendment to CMI's articles of incorporation described in
Section 2.1 and to approve the Merger, and soliciting Dividend Election Forms
(the "Proxy Statement") and (ii) in as expeditious a manner as practicable,
amendments and supplements to the Proxy Statement and other documents, forms
and filings that are required by the 1934 Act, requested by the SEC or
otherwise necessary or reasonably advisable (each, and the Proxy Statement, a
"Disclosure Document"). CMI will obtain and include in the Proxy Statement
an opinion of LeSourd & Patten P.S. as to the federal income tax effect of
the transaction on CMI's stockholders and the other Tax matters described or
required to be described therein. No information regarding Boyne will be
included in the Proxy Statement without Boyne's consent (which will not be
unreasonably withheld), and no information regarding CMI or the Club will be
included in the Proxy Statement without CMI's consent (which will not be
unreasonably withheld). Each party hereto will use its best efforts to cause
the Proxy Statement to be cleared by the SEC. As promptly as practicable
after the Proxy Statement is cleared by the SEC, CMI will mail the Proxy
Statement to its stockholders, together with a form of proxy to be returned
by such stockholders and a Dividend Election Form. CMI will mail or
otherwise distribute other Disclosure Documents as necessary or reasonably
advisable.

(b) STOCKHOLDER MEETING. CMI will cause a meeting
of its stockholders to be duly called and held on or about January 28, 1997,
or as soon thereafter as practicable, for the purpose of voting on the
approval of the amendment to CMI's articles of incorporation described in
Section 2.1 and on the approval of the Merger and will set the Record Date as
the record date for determining the stockholders entitled to vote at such
meeting. Each party hereto will use its best efforts to obtain the
affirmative vote of CMI's stockholders to approve such matters at such
meeting.

(c) THIRD-PARTY ACTIONS. The parties will cooperate
and use their best efforts to determine whether (i) any action by or in
respect of, or filing with, the Forest Service or any other government body,
agency or official, authority or (ii) any action, consent, approval or waiver
of SeaFirst or any other party to a material contract, is necessary or
reasonably advisable in connection with the Reorganization or Merger. Each
party will use its best efforts to obtain such actions, consents, approvals
and waivers, and to make such filings, in a timely manner.

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(d) PUBLIC ANNOUNCEMENTS. Boyne and CMI will
consult with each other before issuing any press release or making any public
statement with respect to this Agreement, the Reorganization or the Merger
and, except as may be required by applicable law, will not issue any such
press release or make any such public statement prior to such consultation.

(e) REORGANIZATION. On the terms and subject to the
conditions set forth in this Agreement, the Reorganization will occur on the
Reorganization Date.

(f) MERGER. On the terms and subject to the
conditions set forth in this Agreement, the Merger will occur on the business
day after the Reorganization Date.

(g) QUALIFIED EXPENDITURE AGREEMENT. Boyne will
execute and deliver to the Club on or before the Reorganization Date the
Qualified Expenditure Agreement, in substantially the form of Exhibit B, and
the Pledge Agreement, in substantially the form of Exhibit C.

(h) FURTHER ASSURANCES. Subject to the terms and
conditions of this Agreement, each party will use its best efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate the Reorganization and Merger. At and after the Merger Time, the
officers and directors of CMI will be authorized to execute and deliver, in
the name and on behalf of CMI or Newco, any deeds, bills of sale, assignments
or assurances and to take and do, in the name and on behalf of CMI or Newco,
any other actions and things to vest, perfect or confirm of record or
otherwise in CMI any and all right, title and interest in, to and under any
of the rights, properties or assets of CMI.

4.2 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY.
The obligations of CMI, Boyne and Newco to consummate the Reorganization and
Merger are subject to the satisfaction (or joint written waiver by CMI, Boyne
and Newco) of the following conditions precedent on the Reorganization Date:

(a) the amendment to the articles
of incorporation of CMI described in Section 2.1, this
Agreement and the Merger shall have been approved by the
stockholders of CMI in accordance with the Washington BCA;

(b) no provision of any applicable
law or regulation and no judgment, injunction, order or
decree shall prohibit the consummation of the
Reorganization or the Merger; and

(c) no proceeding seeking to
prohibit the Reorganization or the Merger shall have been
instituted by any Person other than a party hereto before
any court, arbitrator or governmental body, agency or
official and be pending.

4.3 CONDITIONS TO THE OBLIGATIONS OF CMI. The
obligation of CMI to consummate the Reorganization and Merger are subject to
the satisfaction (or written waiver by CMI) of the following further
conditions precedent on the Reorganization Date:

(a) Boyne and Newco shall have
performed in all material respects all of their respective
obligations hereunder and under the Pledge Agreement
required to be performed at or prior to the Reorganization
Date;

(b) the representations and
warranties of Boyne contained in this Agreement, in the
Pledge Agreement and in any certificate or other writing
delivered by Boyne pursuant hereto shall be true in all
material respects;

(c) receipt by CMI of a
certificate of an officer of Boyne as to the satisfaction
of the conditions set forth in clauses (a) and (b) above;

(d) receipt by CMI of an opinion,
addressed to the Club, of Bogle & Gates P.L.L.C., special
counsel for Boyne, in substantially the form of Exhibit E,
and receipt by CMI of an opinion, addressed to the Club, of
John S. Clark of Petoskey, Michigan, as counsel for Boyne,
in substantially the form of Exhibit F; and

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(e) receipt by CMI of all
documents it may reasonably request relating to the
existence of Boyne and Newco and the authority of the
Persons executing this Agreement on behalf of Boyne and
Newco and the Qualified Expenditure Agreement and Pledge
Agreement on behalf of Boyne, all in form and substance
reasonably satisfactory to CMI.

The individual signing the certificate referred to in Section 4.3.(c) will
not thereby become personally liable for any misstatement therein, and such
certificate may so state.

4.4 CONDITIONS TO THE OBLIGATIONS OF BOYNE AND
NEWCO. The obligations of Boyne and Newco to consummate the Reorganization
and Merger are subject to the satisfaction (or written waiver by Boyne) of
the following further conditions precedent on the Reorganization Date:

(a) CMI shall have performed in all
material respects all of its obligations hereunder required
to be performed at or prior to the Reorganization Date;

(b) the Club shall have executed
and delivered to CMI a counterpart of the Club Operating
Agreement and executed and delivered to Boyne a counterpart
of the Qualified Expenditure Agreement;

(c) the representations and
warranties of CMI contained in this Agreement and in any
certificate or other writing delivered by CMI pursuant
hereto shall be true in all material respects;

(d) no court, arbitrator or
governmental body, agency or official shall have issued any
order, and there shall not be any statute, rule or
regulation, restraining the effective operation of the
business of CMI after the Merger Time;

(e) the number of Class A Shares and
Class B Shares (in the aggregate) held by stockholders
(other than stockholders who hold more than 200 Class A
Shares of record as of July 31, 1996) who have delivered
notices of intent to demand payment for their Shares under
RCW Chapter 23B.13 shall be less than 1,000 Shares;

(f) receipt by Boyne of a
certificate of the Chairman of the Board and the President
of CMI as to the satisfaction of the conditions set forth in
clauses (a) through (d) above;

(g) receipt by Boyne of an opinion
of LeSourd & Patten, P.S., counsel for CMI, in substantially
the form of Exhibit G; and

(h) receipt by Boyne of all
documents it may reasonably request relating to the
existence of CMI and the Club and the authority of the
Persons executing this Agreement, the Club Operating
Agreement and the Qualified Expenditure Agreement on behalf
of CMI or the Club, all in form and substance reasonably
satisfactory to Boyne.

The individuals signing the certificate referred to in Section 4.4.(f) will
not thereby become personally liable for any misstatement therein, and such
certificate may so state.

4.5 CONDITION TO THE MERGER. The obligations of
CMI, Boyne and Newco to consummate the Merger and to file articles of Merger
are subject only to the condition precedent that the Reorganization Date has
occurred, the conditions to the Reorganization set forth above have been
satisfied (or waived) on the Reorganization Date and the Reorganization has
been consummated by filing articles of amendment to CMI's articles of
incorporation as described in Section 2.1.

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<PAGE>

ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF CMI

CMI represents and warrants to Boyne, (a) on the date
hereof, as set forth in Sections 5.1 through 5.27, (b) on the date each
Disclosure Document is filed with the SEC and on the date each Disclosure
Document is first mailed to stockholders of CMI, as set forth in Sections
5.6, 5.27 and 5.28, and (c) on the Reorganization Date, as set forth in
Sections 5.1 through 5.30.

5.1 CORPORATE EXISTENCE AND POWER. CMI is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Washington, and has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted. CMI has heretofore delivered to
Boyne true and complete copies of CMI's articles of incorporation and bylaws
as currently in effect.

5.2 CORPORATE AUTHORIZATION. The execution,
delivery and performance by CMI of this Agreement and the consummation by CMI
of the Reorganization and the Merger are within CMI's corporate powers and,
except for any required approval by CMI's stockholders of the amendment to
CMI's articles of incorporation described in Section 2.1 and of the Merger,
have been duly authorized by all necessary corporate action on the part of
CMI. CMI's board of directors has:(i) proposed and recommended to CMI's
stockholders the amendment to CMI's articles of incorporation described in
Section 2.1, (ii) approved the amendment to CMI's bylaws described in such
Section, (iii) declared the dividend described in Section 2.2 and (iv)
adopted, approved and unanimously recommended to CMI's stockholders this
Agreement and the Merger. This Agreement constitutes a valid and binding
agreement of CMI.

5.3 GOVERNMENTAL AUTHORIZATION; CONSENTS. (a) The
execution, delivery and performance by CMI of this Agreement and the
consummation by CMI of the Reorganization and the Merger require no action by
or in respect of, or filing with, any governmental body, agency, official or
authority other than (i) the filing of articles of amendment in accordance
with Section 2.1; (ii) the filing of articles of merger in accordance with
Section 3.1; (iii) compliance with any applicable requirements of the 1934
Act in accordance with Sections 4.1; (iv) actions or filings necessary in
connection with licenses, franchises, permits and other similar
authorizations that might be terminated or become terminable, as indicated in
Schedule 5.17 and (v) compliance with the notice requirement of Section XI(H)
of the Ski Area Permit and any similar requirement of the Condominium Permits
or any other license, franchise, permit or other similar authorization listed
in Schedule 5.17.

(b) No consent, approval, waiver or other action by
any Person under any contract, agreement, indenture, lease, instrument or
other document to which CMI is a party or by which it or any Lift,
Improvement or other asset or property of CMI is bound is required or
necessary for the execution, delivery and performance of this Agreement by
CMI or the consummation of the Reorganization and Merger, other than the
consent by SeaFirst to the Reorganization and Merger.

5.4 NON-CONTRAVENTION. The execution, delivery and
performance by CMI of this Agreement and the consummation by CMI of the
Reorganization and Merger do not and will not, assuming compliance with the
matters referred to in Section 5.3, (i) contravene or conflict with the
articles of incorporation or bylaws of CMI; (ii) contravene or conflict with
or constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to CMI; (iii)
contravene or conflict with, constitute a violation of or a default under,
give rise to a right of termination, cancellation or acceleration of any
right or obligation of CMI or to a loss of any benefit to which CMI is
entitled under, any provision of any agreement, contract or other instrument
binding upon CMI or any license, franchise, permit or other similar
authorization held by CMI; or (iv) result in the creation or imposition of
any Lien on any asset of CMI.

5.5 CAPITALIZATION. The authorized capital stock of
CMI consists of 90,000 shares of Class A common stock and 25,000 shares of
Class B common stock. No shares of preferred stock are authorized

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or have been designated. There are outstanding 26,609 Class A Shares and 710
Class B Shares. Other than those Class A Shares and Class B Shares, there
are no outstanding (i) shares of capital stock or other voting securities of
CMI, (ii) securities of CMI convertible into or exchangeable for shares of
capital stock or voting securities of CMI, or (iii) options or other rights
to acquire from CMI, or obligations of CMI to issue, deliver, repurchase,
redeem or otherwise acquire any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of CMI (other than preemptive rights in favor of CMI's
stockholders as described in CMI's articles of incorporation).

5.6 SEC FILINGS. (a) CMI has delivered to Boyne (i)
its annual reports on Form 10-KSB for the seven months ended April 30, 1996
and for CMI's fiscal years ended September 30, 1995, September 30, 1994 and
September 30, 1993, (ii) its quarterly report on Form 10-QSB for its fiscal
quarter ended July 31, 1996, (iii) its proxy or information statements
relating to meetings of, or actions taken without a meeting by, the
stockholders of CMI held since January 1, 1993, and (iv) all of its other
reports, statements, schedules and registration statements filed with the SEC
since January 1, 1993.

(b) As of its filing date, none of such reports or
statements filed pursuant to the 1934 Act contained any untrue statement of a
material fact or omitted to state any material fact necessary in order to
make the statements made therein, in the light of the circumstances under
which made, not misleading.

5.7 FINANCIAL STATEMENTS. The audited financial
statements and unaudited interim financial statements of CMI included in its
annual reports on Form 10-KSB and the quarterly report on Form 10-QSB
referred to in Section 5.6 fairly present, in accordance with GAAP, the
financial position of CMI as of the dates thereof and its results of
operations and cash flows for the periods then ended (subject to normal
year-end adjustments in the case of any unaudited interim financial
statements).

5.8 ABSENCE OF CERTAIN CHANGES. Since April 30,
1996, CMI has conducted its business in the ordinary course consistent with
past practice and there has not been:

(a) any expenditure by CMI of funds
materially in excess of that contemplated in the interim
operations plan agreed upon by CMI and Boyne before the date
hereof, unless the same was made with Boyne's prior written
approval (or was made after a written request for Boyne's
approval to which Boyne failed to respond within 5 business
days);

(b) any event, occurrence or
development of a state of circumstances or facts which has had
or reasonably could be expected to have a Material Adverse
Effect;

(c) any declaration, setting aside or
payment of any dividend or other distribution with respect to
any shares of capital stock of CMI (other than as described in
Section 5.10 and as required by Section 2.2), or any
repurchase, redemption, retirement or acquisition by CMI of
any of its capital stock, options, warrants or rights to
acquire its capital stock, or other securities of, or other
ownership interests in, CMI;

(d) any amendment of any term of any
outstanding security of CMI, except as required by this
Agreement;

(e) any incurrence, assumption or
guarantee by CMI of any Debt other than (i) Debt under the
SeaFirst Facility and (ii) as otherwise approved by Boyne in
writing;

(f) any creation or assumption by CMI
of any Lien other than Liens arising in the ordinary course of
business consistent with past practice that (i) do not secure
Debt,(ii) do not secure any obligation in an amount exceeding
$25,000 in the aggregate and (iii) do not in the aggregate
materially detract from the value of CMI's assets or
materially impair the use thereof in the operation of its
business;

(g) any making or acquisition by CMI
of any investment in any Person, whether by means of share
purchase, capital contribution, loan, time deposit or
otherwise, other than (i) demand deposits and short-term cash
investments made in the ordinary course of business consistent
with

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<PAGE>

past practice and (ii) investment of funds held by CMI in
a deferred compensation arrangement described in Schedule 5.22;

(h) any prepayment by CMI of any
expense, including without limitation any rent under any lease
or any insurance premium, except in the ordinary course of
business consistent with past practice, and except for a
prepayment or purchase of liability insurance coverage
disclosed to Boyne and not reasonably objected to by Boyne;

(i) any damage, destruction or other
casualty loss (whether or not covered by insurance) affecting
the business or assets of CMI which, individually or in the
aggregate, has had or would reasonably be expected to have a
Material Adverse Effect;

(j) any transaction or commitment
made, or any contract or agreement entered into, by CMI
relating to its assets or business (including the acquisition
or disposition of any assets) or any relinquishment by CMI of
any contract or other right, in either case material to CMI,
other than: (i) transactions and commitments in the ordinary
course of business consistent with past practice, (ii)
transactions required by this Agreement and (iii) an
irrevocable agreement by CMI each Season to issue, without
charge, to each individual who was, on July 31, 1996, a living
former or serving member of CMI's board of directors, so long
as such individual shall live, two season's passes (or, at
such individual's option, lift tickets having a Retail Price
not in excess of the Retail Price of two season's passes), for
use by such individual or a member of such individual's family
designated by him or her, on the Lifts during such Season, so
long as such agreement provides that the rights of the
beneficiaries thereof are not transferable except to family
member designees;

(k) any change in any method of
accounting or accounting practice by CMI, other than the
change of CMI's fiscal year to a year ending April 30;

(l) any (i) grant of any severance or
termination pay to any director, officer or employee of CMI,
(ii) entering into of any employment, deferred compensation or
other similar agreement (or any amendment to any such existing
agreement) with any director, officer or employee of CMI,
(iii) increase in benefits payable under any existing
severance or termination pay policy or employment agreement or
(iv) increase in compensation, bonus or other benefits payable
to directors, officers or employees of CMI, whether or not in
the ordinary course of business or consistent with past
practice (except with the written approval of Boyne or as
described in clause (iii) of Section 5.8.(j) above); or

(m) any labor dispute, other than
routine, immaterial individual grievances, or any activity or
proceeding by a labor union or representative thereof to
organize any employees of CMI, or any lockouts, strikes,
slowdowns, work stoppages or threats thereof by or with
respect to such employees.

5.9 NO UNDISCLOSED MATERIAL LIABILITIES. There are
no liabilities of CMI of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, and there is no existing
condition, situation or set of circumstances that could reasonably be
expected to result in such a liability, other than:

(a) liabilities disclosed or provided for on the
Balance Sheet;

(b) liabilities incurred in the
ordinary course of business and consistent with past practice
and in compliance with Section 5.8 since April 30, 1996, which
in the aggregate are not material to CMI; and

5.10 STOCKHOLDER LIFT PRIVILEGES. CMI is fulfilling
its obligations under its articles of incorporation and its bylaws to provide
annual lift privileges to holders of its Class A Shares for the Season
beginning in 1996 by making the following arrangements, which are consistent
with CMI's arrangements in previous years:

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<PAGE>

(a) CMI has announced to the record
holders of the Class A Shares that each record holder of 20 or
more Class A Shares (on a record date of October 1, 1996 (the
"Current Lift Privilege Record Date")) may set up one or more
charge accounts (each, a "Lift Privilege Account") for the
account of such holder or others designated by such holder,
and may cause CMI to credit to such Lift Privilege Accounts an
amount up to $35 times the number of shares held of record by
such holder on the Current Lift Privilege Record Date, upon
cash payment to CMI of 10% of the amount to be credited to
such Lift Privilege Accounts.

(b) On October 31, 1996, CMI had set
up Lift Privilege Accounts for 515 Persons (each, an "Account
Holder") and credited to such Lift Privilege Accounts an
aggregate dollar amount of $532,875 at the direction of the
record holders of 15,225 Class A Shares. CMI has received
payment of 10% of such aggregate dollar amount.

(c) CMI has and will continue to set
up Lift Privilege Accounts, and credit amounts thereto, as
described in subsection (a) and in accordance with CMI's past
practice, at the direction of Persons who held Class A Shares
of record on the Current Lift Privilege Record Date.

(d) CMI has reduced the amount
credited to each Account Holder's Lift Privilege Account by
the Retail Price of daily lift tickets and season's passes
issued to such Account Holder and its designees for use during
the Season beginning in 1996 (less cash received in partial
payment for such daily lift tickets and season's passes).

5.11 LITIGATION. Schedule 5.11 sets forth a list of
every action, suit, investigation or proceeding pending (or, to the knowledge
of CMI, threatened) against or affecting CMI, its business or any of its
properties or the Relevant Current Property before any court or arbitrator or
any governmental body, agency or official. Except as indicated in Schedule
5.11, none of the matters described therein, if determined or resolved
adversely in accordance with the plaintiff's demands, would reasonably be
expected to have a Material Adverse Effect or in any manner challenges or
seeks to prevent, enjoin, alter or materially delay the Reorganization, the
Merger or any of the other transactions contemplated hereby.

5.12 INSURANCE COVERAGE. (a) CMI has furnished to
Boyne a list of, and true and complete copies of, all insurance policies and
fidelity bonds covering the assets, properties, business, operations,
employees, officers and directors of CMI, a summary of which is set forth in
Schedule 5.12. There is no claim by CMI pending under any of such policies
or bonds as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or bonds. All premiums payable under all such
policies and bonds have been paid and CMI is otherwise in full compliance
with the terms and conditions of all such policies and bonds. Such policies
of insurance and bonds (or other policies and bonds providing substantially
similar coverage) have been in effect since before January 1, 1991 and remain
in full force and effect. Such policies of insurance and bonds are of the
type and in amounts customarily carried by Persons conducting businesses
similar to the business conducted by CMI.

(b) CMI does not know of any threatened
termination of any of such policy or bond, or any planned premium increase,
or any claim, loss, event, occurrence or situation which might reasonably be
expected to give rise before or after the Merger Time to any premium
increase, with respect to any such policy or bond.

5.13 COMPLIANCE WITH LAWS. (a) To the best of CMI's
knowledge, CMI is not in violation of, and has not since before January 1,
1991 violated, any law, statute, rule, ordinance or regulation, or judgment,
order or decree entered by any court, arbitrator or governmental authority,
domestic or foreign, applicable to CMI or its properties, except such
violations as have not had, and are not reasonably expected to have, in the
aggregate, a Material Adverse Effect. CMI has not been threatened to be
charged with or given notice of any such violation. To CMI's knowledge, CMI
is not under investigation with respect to any such violation.

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<PAGE>

(b) CMI has never received an order or notice of the
Recreation Commission pursuant to RCW 70.88.030 with respect to CMI, any Lift
or any ski lift previously owned or operated by CMI, there has never been any
hearing pursuant to such statute with respect to CMI, any Lift or any ski
lift previously owned or operated by CMI, and to CMI's knowledge, no such
hearing, order or notice is pending or threatened. CMI has not given notice,
or been required to give notice, to the Recreation Commission pursuant to WAC
352-44-100 of any incident or malfunction since March 24, 1996.

(c) Each Lift is in compliance with the current
American National Standards Safety Requirements for Aerial Passenger
Tramways. Each Lift has a current annual certificate, issued in accordance
with WAC 352-44-020, to operate until December 31, 1996. No such certificate
is conditional. CMI has no reason to anticipate that any such annual
certificate will not be renewed. Each Lift has been inspected since December
14, 1995 by a representative of the Washington State Inspector of
Recreational Devices as contemplated by RCW 70.88.060, WAC 352-44-050 and WAC
352-44-080. CMI has delivered to Boyne copies of all reports of each such
inspection completed since January 1, 1991. The cost to CMI of the most
recent such inspections was $2,707.75.

(d) CMI submitted plans and specification for each
Lift to the Recreation Commission before construction and received the
approval of the Recreation Commission for such construction, all in
accordance with RCW 70.88.020 and WAC 352-44-070.

5.14 ENVIRONMENTAL MATTERS.

"CERCLA" means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 and as otherwise amended from time
to time.

"Environmental Laws" means any and all federal,
state, local and foreign statutes, laws (including common or case law),
regulations, ordinances, rules, judgments, judicial decisions, orders,
decrees, codes, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and governmental restrictions, relating to the
environment, the protection of the environment or emissions, discharges or
releases of Hazardous Substances into the environment (including without
limitation into ambient air, surface water, ground water, or land) or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Substances
or the clean-up or other remediation thereof, including without limitation
CERCLA, the Hazardous Materials Transportation Act, the Resource Conservation
and Recovery Act, the Clean Air Act, the Clean Water Act, the Safe Drinking
Water Act, the Toxic Substances Control Act, the Federal Water Pollution
Control Act, the Washington State Environmental Policy Act of 1971, the
Washington State Hazardous Waste Management Act, the Washington State Waste
Cleanup -- Model Toxics Control Act, the Washington State Water Pollution
Control Act, the Washington State Clean Air Act and the Washington State
Industrial Safety and Health Act, in each case as amended from time to time.

"Hazardous Substance" mean any and all pollutants,
contaminants, asbestos, urea formaldehyde, polychlorinated biphenyls,
petroleum, petroleum products, natural gas, natural gas liquids, liquified
natural gas, synthetic gas, chemicals and industrial, toxic, radioactive or
hazardous substances, materials or wastes.

Except as set forth in Schedule 5.14, to CMI's
knowledge:

(a) No notice, notification, demand, request for
information, citation, summons, complaint or order has been issued or filed,
no penalty has been assessed and no investigation or review is pending or
threatened by any government or other entity (i) with respect to any alleged
violation by CMI of any Environmental Law or (ii) with respect to any alleged
failure of CMI to have any environmental permit, certificate, license,
approval, registration or authorization required in connection with the
conduct of its business or (iii) with respect to any generation, treatment,
storage, recycling, transportation, disposal or release (including a release
as defined in 42 USC Section 9601) ("Release") of any Hazardous Substance.

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(b) (i) No polychlorinated biphenyls or urea formaldehyde is or has
been present at the Relevant Property; (ii) no asbestos is or has been present
at the Relevant Property; (iii) there are no underground storage tanks, whether
active or abandoned, at the Relevant Property; (iv) there has been no Release of
a Hazardous Substance at, on or under the Relevant Property and (v) no Hazardous
Substance is present in a reportable or threshold planning quantity, where such
a quantity has been established by statute, ordinance, rule, regulation or
order, at, on or under the Relevant Property.

(c) CMI has not generated, transported, disposed of or arranged for
the transportation or disposal (directly or indirectly) of any Hazardous
Substance to any location which is listed or proposed for listing under CERCLA
or on any similar state list or which is the subject of any federal, state or
local enforcement action or other investigation which may lead to any claim for
clean-up costs, remedial work, damages to natural resources or for personal
injury claims, including, but not limited to, claims under CERCLA.

(d) No oral or written notification of a Release of a Hazardous
Substance has been filed by or on behalf of CMI and no part of the Relevant
Property is listed or proposed for listing, on the National Priorities List
promulgated pursuant to CERCLA or any similar state list of sites requiring
investigation or clean-up.

(e) There are no environmental Liens on any part of the Relevant
Current Property or any asset of CMI, and no government actions have been taken
or are in process which give raise to such a Lien.

(f) There have been no environmental investigations, studies, audits,
tests, reviews or other analyses conducted by or which are in the possession of
CMI in relation to the Relevant Property which have not been delivered to Boyne
prior to the date hereof.

5.15 BUILDING LAWS.

"Building Laws" means any and all federal, state, local and foreign
statutes, laws (including common or case law), regulations, ordinances, rules,
judgments, judicial decisions, orders, decrees, codes, plans, injunctions,
permits, concessions, grants, franchises, licenses, agreements and governmental
restrictions, relating to zoning, planning, subdivision, building, access,
preservation, fire safety and safety generally, including without limitation the
Americans with Disabilities Act of 1990, in each case as amended from time to
time.

Except as set forth in Schedule 5.15, to the knowledge of CMI, no
notice, notification, demand, request for information, citation, summons,
complaint or order has been issued or filed, no penalty has been assessed and no
investigation or review is pending or threatened by any government or other
entity (i) with respect to any alleged violation by CMI of any Building Law or
(ii) with respect to any alleged failure of CMI to have any building permit,
certificate, license, approval, registration or authorization required in
connection with the conduct of its business.

5.16 FOREST SERVICE PERMITS. CMI holds (i) a 40-year permit (the "Ski
Area Permit") issued in 1992 under the Ski Area Permit Act of 1986, as amended,
and Subpart B of Title 36, Part 251 of the Code of Federal Regulations, as
amended (the "Special Permit Regulations"), and (ii) two 30-year permits (each,
a "Condominium Permit") issued in 1992 under the Special Permit Regulations.
CMI has delivered to Boyne before the date hereof a true, correct and complete
copy of the Ski Area Permit and each Condominium Permit, as well as CMI's master
development plan submitted to the Forest Service, together in each case with all
amendments, modifications, supplements, agreements and instruments affecting the
terms thereof and all material correspondence between CMI and the Forest Service
with respect thereto. Except as set forth in Schedule 5.16, CMI has paid all
fees required to be paid under each such permit when due, has performed all
other obligations thereunder in a timely manner and is in compliance with each
such permit. CMI has operated the Resort and made improvements in accordance
with such master development plan. The Forest Service has not indicated to CMI
that it intends to adjust the fees payable under any such permit, except as set
forth in Schedule 5.16. No such permit will be terminated or impaired or become
terminable as a result of the Reorganization, the Merger and the other
transactions

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contemplated hereby. No event or condition that permits the Forest
Service to terminate the term of any such permit before its scheduled expiration
(nor any event or condition that, with notice or the passage of time or both,
would permit the Forest Service so to terminate any such permit) has occurred
and is continuing or is a reasonably foreseeable result of any present event or
condition.

5.17 OTHER LICENSES AND PERMITS. Schedule 5.17 correctly describes
each license, franchise, permit or other similar authorization (other than the
Ski Area Permit and the Condominium Permits referred to in Section 5.16)
affecting, or relating in any way to, CMI, together with the name of the
government agency or entity issuing such license or permit. Each such
authorization is valid and in full force and effect and, except as described in
Schedule 5.17, none of such authorizations will be terminated or impaired or
become terminable as a result of the Reorganization, the Merger and the other
transactions contemplated hereby.

5.18 PROPERTIES. (a) CMI does not own any real property (other than
Lifts and Improvements, to the extent the same may constitute real property).
CMI has and will have after the Merger Time good and marketable title to the
Lifts and Improvements, and good and marketable title to (or, in the case of
leased property, valid leasehold interests in) all other property and assets
(whether real or personal, tangible or intangible) reflected on the Balance
Sheet or acquired after April 30, 1996, except for (i) assets that are not
necessary to the operations of CMI and are in the aggregate not material and
(ii) inventory, in each case to the extent sold in the ordinary course of
business consistent with past practice. Except as set forth in Schedule 5.18,
none of the Lifts, Improvements or such other property or assets is subject to
any Liens, except Liens disclosed in the Financial Statements securing
obligations disclosed in such Financial Statements and Liens which could be
incurred after April 30, 1996 without causing the representation in
Section 5.8.(f) to be untrue.

(b) To CMI's knowledge, there is no circumstance existing and there
are no developments affecting the Relevant Current Property or any of the Lifts,
Improvements or other properties or assets of CMI pending or threatened which
would materially detract from the value thereof, materially interfere with any
present or intended use thereof or materially adversely affect the marketability
thereof.

(c) The Lifts, Improvements and other properties and assets of CMI
are in good operating condition and repair, have been reasonably maintained
consistent with standards generally followed in the industry (giving due account
to the age and length of use of same, ordinary wear and tear excepted), are
suitable for their present uses and are structurally sound.

(d) The Resort has access to Washington State Highway 410 by way of a
public road, which road (and such Highway) are in a permanent right-of-way
granted by the Forest Service that is not terminable by the Forest Service. The
Resort, and each Lift and Improvement included therein, has access to all public
utilities necessary for conduct of CMI's business as currently conducted
(including, as applicable, water supply, storm and sanitary sewers, telephone,
gas and electrical connections and fire protection) by way of private or public
easements granted by the Forest Service that are not terminable by the Forest
Service. To the knowledge of CMI, there is no circumstance existing and there
are no developments pending or threatened which would interfere with such access
and the availability of such public utilities.

5.19 MATERIAL CONTRACTS. (a) Except as listed in Schedule 5.19, CMI
is not a party to or subject to:

(i) any lease providing for annual rentals of $25,000 or more;

(ii) any contract for the purchase of materials, supplies, goods,
services, equipment or other assets providing for annual payments by CMI of
$25,000 or more;

(iii) any sales, distribution or other similar agreement providing
for the sale by CMI of materials, supplies, goods, services, equipment or
other assets;

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(iv) any partnership, joint venture or other similar contract,
arrangement or agreement;

(v) any contract relating to Debt of CMI, other than the SeaFirst
Facility;

(vi) any license agreement, franchise agreement or agreement in
respect of similar rights granted to or held by CMI;

(vii) any agency, dealer, sales representative or other similar
agreement;

(viii) any agreement, contract or commitment that currently does,
or after the Merger Time may, restrain or limit CMI from
competing with any Person, in any line of business or in any
area;

(ix) any agreement, contract or commitment which is or relates to an
agreement with or for the benefit of any Affiliate of CMI
(other than as described in the Disclosure Documents); or

(x) any other agreement, contract or commitment not made in the
ordinary course of business consistent with past practice which
is material to CMI.

(b) Each agreement, contract, plan, lease, arrangement and commitment
listed in any Schedule to this Agreement or required to be disclosed by this
Section is a valid and binding agreement of CMI and is in full force and effect;
neither CMI nor, to the knowledge of CMI, any other party thereto is in default
in any material respect under the terms of any such agreement, contract, plan,
lease, arrangement or commitment; and, to the knowledge of CMI, no event or
circumstance has occurred that, with notice or lapse of time or both, would
constitute any event of default thereunder.

5.20 INTELLECTUAL PROPERTY.

"Intellectual Property Right" means any trademark, service mark,
registration thereof or application for registration therefor, trade name,
invention, patent, patent application, trade secret, know-how, copyright,
copyright registration, application for copyright registration, or any other
similar type of proprietary intellectual property right, in each case which is
owned or licensed by CMI or any Affiliate of CMI and used or held for use in
connection with the Resort.

CMI has not since before January 1, 1991 been sued or charged in
writing with, or been a defendant in, any claim, suit, action or proceeding
relating to its business (other than matters that have been finally terminated
prior to the date hereof without liability to CMI) and that involves a claim of
infringement of any patent, trademark, service mark or copyright, and, except as
disclosed in Schedule 5.20, CMI has no knowledge of any claim or infringement by
CMI, and no knowledge of any continuing infringement by any other Person of any
Intellectual Property Right. No Intellectual Property Right is subject to any
outstanding order, judgment, decree, stipulation or agreement restricting the
use thereof by CMI or restricting the licensing thereof by CMI. CMI has not
entered into any agreement to indemnify any other Person against any charge of
infringement of any patent, trademark, service mark or copyright.

5.21 EMPLOYEES. (a) Schedule 5.21 sets forth a true and complete list
of (i) the names, titles, annual salaries and other compensation of all
employees of CMI whose annual base salary exceeds $25,000 and (ii) the wage
rates for non-salaried employees of CMI by classification. None of the
employees so listed, and no other key employee of CMI, has indicated to CMI that
he or she intends to resign or retire as a result of the transactions
contemplated by this Agreement.

(b) CMI is not a party to any written or unwritten employment
agreement with any Person other than Tom Leonard, Peter Gillis and George
Schmidt. CMI has delivered to Boyne complete copies of each such employment
agreement, together with all amendments thereto. CMI has never been a party to
any collective bargaining agreement.

5.22 EMPLOYEE BENEFITS. (a) CMI maintains a 401(k) Plan (the "401(k)
Plan") that is accurately described in the Financial Statements. CMI has
delivered to Boyne copies of the 401(k) Plan and related trust agreement,
together with all amendments thereto and written interpretations thereof and the
three most recent annual reports prepared in connection therewith. The 401(k)
Plan is qualified under
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Section 401(a) of the Internal Revenue Code and has been so qualified during
the period from its adoption to date, and the trust forming a part thereof is
exempt from tax pursuant to Section 501(a) of the Internal Revenue Code. The
401(k) Plan has been maintained in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations
(including but not limited to ERISA and the Internal Revenue Code) which are
applicable to the 401(k) Plan.

(b) Except for the 401(k) Plan and as disclosed in Schedule 5.22, CMI
has never maintained any employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Internal Revenue Code.

(c) Schedule 5.22 sets forth a summary description of each
arrangement, policy or plan (whether or not written) pursuant to which CMI
provides to any of its employees or their families any employee benefit,
including without limitation any vacation, sick or personal days; health, life,
disability or other insurance coverage; workers' compensation; disability
benefit; supplemental unemployment benefit; severance benefit; tuition
reimbursement or other educational or training benefit; deferred compensation;
retirement benefit; postretirement insurance, compensation or benefit; or
profit-sharing, bonus, stock option, stock appreciation right or other form of
incentive compensation (including without limitation each employee benefit plan
within the meaning of Section 3(3) of ERISA) (each, a "Benefit Arrangement").
Each Benefit Arrangement has been maintained in substantial compliance with its
terms and with the requirements prescribed by any and all applicable statutes,
orders, rules and regulations. Since July 1, 1994 there has been no amendment
or modification of, or any announcement (whether or not written) by CMI of any
future amendment or modification of any Benefit Arrangement, which would
increase the expense of maintaining such Benefit Arrangement.

5.23 TAXES. (a) CMI has filed all tax returns, statements, reports
and forms required to be filed by it with respect to any Tax when due in
accordance with all applicable laws (including without limitation federal income
tax returns for all periods through April 30, 1996), and has paid all Taxes
shown as due and payable pursuant to such returns, statements, reports and
forms, or pursuant to any assessment. CMI has delivered true and correct copies
of its federal income tax returns for the years ended September 30, 1993, 1994
and 1995 and the seven months ended April 30, 1996. The charges, accruals and
reserves on the books of CMI in respect of Taxes are adequate in accordance with
GAAP, except as described in Schedule 5.23. There is no government, state,
local jurisdiction or authority to which any Tax is or will be properly payable
by CMI, other than the United States, the State of Washington and Pierce County,
Washington.

(b) No federal income tax returns of CMI have been audited by the
Internal Revenue Service and CMI has not agreed with the Internal Revenue
Service to any extension of the statute of limitations with respect to its
federal income taxes for any period.

5.24 NOT A MEMBER OF A TAX OR ERISA GROUP. No Person other than CMI
has ever operated the Lifts or conducted CMI's business. CMI has never been a
member of an affiliated group of corporations (as defined in Section 1504(a) of
the Internal Revenue Code) or a combined, consolidated or unitary group (for
purposes of any applicable state or local Tax). CMI has never been a member of
a controlled group of corporations or of a group of trades or businesses
(whether or not incorporated) under common control that were treated as a single
employer under Section 414 of the Internal Revenue Code.

5.25 NO SUBSIDIARIES. There are no subsidiaries of CMI. Except as
set forth in Schedule 5.25, CMI does not hold any shares of capital stock of any
corporation, is not a general or limited partner of any partnership and is not a
member of any limited liability company.

5.26 FINDERS' FEES. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of CMI who might be entitled to any fee or commission from Boyne or any of its
Affiliates upon consummation of the transactions contemplated by this Agreement.

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5.27 OTHER INFORMATION. None of the documents or information
regarding CMI or the Club delivered to Boyne or Houlihan in connection with the
transactions contemplated by this Agreement, taken together with this Agreement,
the Schedules hereto and the Disclosure Documents, contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements contained therein not misleading.

5.28 DISCLOSURE DOCUMENTS. Each Disclosure Document, including
without limitation the Proxy Statement: (i) complies as to form in all material
respects with the applicable requirements of the 1934 Act and (ii)does not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which made, not misleading, PROVIDED that the representation
in clause (ii) does not apply to statements or omissions in the Disclosure
Documents based upon information regarding Boyne furnished to CMI by Boyne.

5.29 THE CLUB. (a) CORPORATE EXISTENCE AND POWER. The Club is a
nonprofit corporation duly incorporated, validly existing and in good standing
under the laws of the State of Washington, and has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as proposed to be conducted. CMI has delivered to Boyne true
and complete copies of the Club's articles of incorporation and bylaws.

(b) CORPORATE AUTHORIZATION. The execution, delivery and performance
by the Club of the Club Operating Agreement and the Qualified Expenditure
Agreement and the consummation by the Club of the transactions contemplated
hereby and thereby are within the Club's corporate powers and have been duly
authorized by all necessary corporate action on the part of the Club. The Club
Operating Agreement and the Qualified Expenditure Agreement each constitutes a
valid and binding agreement of the Club.

(c) GOVERNMENTAL AUTHORIZATIONS. The execution, delivery and
performance by the Club of the Club Operating Agreement and the Qualified
Expenditure Agreement, and the consummation by the Club of the transactions
contemplated hereby and thereby, require no action by or in respect of, or
filing with, any governmental body, agency, official or authority.

(d) NO ACTIVITIES. The Club has no assets or liabilities, is not a
party to any contract or agreement and has conducted no activities, other than,
in each case, the Club Operating Agreement and the Qualified Expenditure
Agreement, and as contemplated hereby and thereby.

(e) BYLAWS. The Club's bylaws contain provisions substantially to
the following effect, and neither the Club's bylaws nor its articles of
incorporation contain any provision inconsistent with the following:

(i) Neither any membership in the Club, nor any Membership Units,
will be transferrable to any Person (including without limitation to
another member of the Club), except (A) as a BONA FIDE gift, without
consideration, to a family member of the transferor, (B) on the death of a
member, to such member's personal representative by operation of law, and
from such personal representative to the person entitled thereto under the
decedent's will or pursuant to applicable law or (C) to the transferor's
spouse pursuant to a marriage dissolution or legal separation proceeding.

(ii) The Club will not register or recognize any transfer that is not
permitted by clause (i), and may require a certificate and other reasonable
assurances from the transferee and the transferor to confirm that a
transfer is permitted by clause (i).

(iii) The board of trustees of the Club will from time to time set
a per-Membership Unit initiation fee (the "Initiation Fee") for membership
in the Club. Such Initiation Fee will be $154.48 until changed by action
of the board of trustees of the Club, PROVIDED that the board of trustees
will not change the Initiation Fee before August 1, 2000.

(iv) The board of trustees of the Club may admit new members or
increase existing members' Membership Units, in accordance with application
and admission rules and procedures established

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from time to time by the board of trustees, and upon payment of the
Initiation Fee, PROVIDED that the total number of Membership Units may not
be increased above [a stated number, which will be equal to the number of
Membership Units issued in the Reorganization].

(v) Each member of the Club may resign at any time, or may reduce the
number of Membership Units held by it, by notice to the Club in accordance
with rules and procedures established from time to time by the board of
trustees of the Club. Whenever a member's resignation, or reduction in
Membership Units, becomes effective in accordance with such rules and
procedures, such member will become entitled to receive from the Club,
without interest, an amount in cash equal to the then-current Initiation
Fee times the number of Membership Units held by such member (in the case
of a resignation) or the reduction in the number of Membership Units held
by such member (in the case of a mere reduction in Membership Units). The
Club will pay such amount to the member entitled thereto within 30 days of
the effective time of the resignation or reduction, or, if the Club lacks
sufficient cash to make such payment within such time, at a later time when
the board determines that the Club has sufficient funds to make such
payment, in any event without interest.

5.30 REORGANIZATION DATE REPRESENTATION. Each Lift has a current
annual certificate, issued in accordance with WAC 352-44-020, to operate until
December 31, 1997. No such certificate is conditional.

ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BOYNE

Boyne represents and warrants to CMI, (a) on the date hereof, as set
forth in Sections 6.1 through 6.6 (excluding Section 6.2.(b)), (b) on the date
each Disclosure Document is filed with the SEC and on the date each Disclosure
Document is first mailed to stockholders of CMI, as set forth in Section 6.7,
(c) on the date Newco executes and delivers this Agreement, as set forth in
Section 6.2.(b), and (d) on the Reorganization Date, as set forth in Sections
6.1 through 6.7.

6.1 CORPORATE EXISTENCE AND POWER. Each of Boyne and Newco is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted. Since the date of its incorporation, Newco
has not engaged in any activities other than in connection with or as
contemplated by this Agreement.

6.2 CORPORATE AUTHORIZATION. (a) The execution, delivery and
performance by Boyne of this Agreement, the Qualified Expenditure Agreement and
the Pledge Agreement and the consummation by Boyne of the Merger are within the
corporate powers of Boyne and have been duly authorized by all necessary
corporate action on the part of Boyne. This Agreement constitutes a valid and
binding agreement of Boyne.

(b) The execution, delivery and performance by Newco of this Agreement
and the consummation by Newco of the Merger are within the corporate powers of
Newco and have been duly authorized by all necessary corporate action on the
part of Newco. This Agreement constitutes a valid and binding agreement of
Newco.

6.3 GOVERNMENTAL AUTHORIZATION; CONSENTS. (a) The execution,
delivery and performance by Boyne and Newco of this Agreement, the execution,
delivery and performance by Boyne of the Qualified Expenditure Agreement and the
Pledge Agreement and the consummation by Boyne and Newco of the Merger require
no action by or in respect of, or filing with, any governmental body, agency,
official or authority other than (i) the filing of articles of merger in
accordance with Section 3.1, (ii) compliance with any applicable requirements of
the 1934 Act in accordance with Section 4.1 and (iii) filing of a UCC-1
financing statement as required by the Pledge Agreement.

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(b) No consent, approval, waiver or other action by any Person under
any contract, agreement, indenture, lease, instrument or other document to which
Boyne or Newco is a party or by which it is bound is required or necessary for
the execution, delivery and performance of this Agreement by Boyne or Newco, the
execution, delivery and performance of the Qualified Expenditure Agreement and
the Pledge Agreement by Boyne or the consummation of the Merger.

6.4 NON-CONTRAVENTION. The execution, delivery and performance by
Boyne and Newco of this Agreement, the execution, delivery and performance by
Boyne of the Qualified Expenditure Agreement and the Pledge Agreement and the
consummation by Boyne and Newco of the Merger do not and will not (i) contravene
or conflict with the articles of incorporation or bylaws of Boyne or Newco;
(ii) assuming compliance with the matters referred to in Section 5.3.(a),
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment, injunction, order or decree binding upon or
applicable to Boyne or Newco, (iii) contravene or conflict with any obligation
of Boyne or Newco under any provision of any agreement, contract or other
instrument binding upon Boyne or Newco.

6.5 FINDERS' FEES. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Boyne or Newco who might be entitled to any fee or commission from CMI or any
of its Affiliates upon consummation of the transactions contemplated by this
Agreement.

6.6 OTHER INFORMATION. None of the documents or information regarding
Boyne delivered by Boyne to CMI or Houlihan in connection with the transactions
contemplated by this Agreement, taken together with this Agreement, the
Schedules hereto and the Disclosure Documents, contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements contained therein not misleading.

6.7 DISCLOSURE DOCUMENTS. The information in the Disclosure Documents
regarding Boyne furnished by Boyne to CMI for use in the Disclosure Documents
does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which made, not misleading.

ARTICLE 7
COVENANTS OF CMI

CMI agrees for the benefit of Boyne:

7.1 CONDUCT OF CMI. From the date hereof until the Merger Time, CMI
will conduct its business in the ordinary course consistent with past practice
and will use its best efforts to preserve intact its business organization and
relationships with third parties and to keep available the services of its
present officers and employees. Without limiting the generality of the
foregoing, from the date hereof until the Merger Time, CMI will not:

(a) adopt or propose any change in its articles of incorporation or
bylaws except as required by this Agreement;

(b) merge or consolidate with any other Person or acquire a material
amount of assets of any other Person;

(c) sell, lease, license or otherwise dispose of any assets or
property except (i) pursuant to existing contracts or commitments and
(ii) in the ordinary course consistent with past practice;

(d) incur Transaction Costs other than Transaction Costs reasonably
incurred (including without limitation Transaction Costs related to the
Club that are expected to be incurred after the Merger Time, which CMI may
provide for by paying not more than $25,000 to the Club before the Merger
Time);

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(e) agree or commit to do any of the foregoing; or

(f) take or agree or commit to take any action that would make any
representation and warranty of CMI hereunder inaccurate in any respect at,
or as of any time prior to, the Merger Time or omit or agree or commit to
omit to take any action necessary to prevent any such representation or
warranty from being inaccurate in any respect at any such time.

7.2 ACCESS TO INFORMATION. From the date hereof until the Merger Time,
CMI will give Boyne, its counsel, financial advisors, auditors and other
authorized representatives full access to the offices, properties, books and
records of CMI, will furnish to Boyne, its counsel, financial advisors, auditors
and other authorized representatives such financial and operating data and other
information as such Persons may reasonably request and will instruct CMI's
employees, counsel and financial advisors to cooperate with Boyne in its
investigation of the business of CMI, PROVIDED that no investigation pursuant to
this Section will affect any representation or warranty given by CMI to Boyne
hereunder, and PROVIDED further that any investigation pursuant to this
Section will be conducted in such manner as not to interfere unreasonably with
the conduct of the business of CMI.

7.3 OTHER OFFERS.

"Acquisition Proposal" means any offer or proposal for, or any
indication of interest in, a merger or other business combination involving CMI,
or the acquisition of any equity interest in, or a substantial portion of the
assets of, CMI, other than the transactions with Boyne and Newco contemplated by
this Agreement.

From the date hereof until the termination hereof, CMI and the
officers, directors, employees or other agents of CMI will not, directly or
indirectly, (i) take any action to solicit, initiate or encourage any
Acquisition Proposal or (ii) subject to the fiduciary duties of the board of
directors of CMI under applicable law, as advised by LeSourd & Patten, P.S.,
counsel to CMI, engage in negotiations with, or disclose any non-public
information relating to CMI or afford access to the properties, books or records
of CMI to, any Person that may be considering making, or has made, an
Acquisition Proposal. CMI will promptly notify Boyne after receipt of any
Acquisition Proposal or any indication that any Person is considering making an
Acquisition Proposal or any request for non-public information relating to CMI
or for access to the properties, books or records of CMI by any Person that may
be considering making, or has made, an Acquisition Proposal and will keep Boyne
fully informed of the status and details of any such Acquisition Proposal,
indication or request.

7.4 NOTICES OF CERTAIN EVENTS. From the date hereof to the Merger
Time, CMI will promptly notify Boyne of:

(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;

(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and

(c) any action, suit, claim, investigation or proceeding commenced
or, to the best of its knowledge threatened, against, relating to or
involving or otherwise affecting CMI which are required to be disclosed by
Section 5.11 or which relate to the consummation of the transactions
contemplated by this Agreement.

7.5 FORMATION OF THE CLUB. On or before the Reorganization Date: CMI
will cause the Club to be incorporated and organized, will cause the Club's
bylaws to include provisions substantially to the effect set forth in
Section 5.29.(e) and will cause the Club to execute and deliver the Club
Operating Agreement and the Qualified Expenditure Agreement.

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ARTICLE 8
COVENANTS OF BOYNE

Boyne agrees that:

8.1 CONFIDENTIALITY. Prior to the Merger Time and after any
termination of this Agreement, Boyne will hold, and will use its best efforts to
cause its officers, directors, employees, accountants, counsel, consultants,
advisors and agents to hold, in confidence, unless compelled to disclose by
judicial or administrative process or by other requirements of law, all
confidential documents and information concerning CMI furnished to Boyne in
connection with the transactions contemplated by this Agreement, except to the
extent that such information can be shown to have been (A) previously known on a
nonconfidential basis by Boyne, (B) in the public domain or (C) later lawfully
acquired by Boyne from sources other than CMI; PROVIDED that Boyne may disclose
such information to its officers, directors, employees, accountants, counsel,
consultants, advisors and agents in connection with the transactions
contemplated by this Agreement and to its lenders in connection with obtaining
the financing for the transactions contemplated by this Agreement, so long as
such Persons are informed by Boyne of the confidential nature of such
information and are directed by Boyne to treat such information confidentially.
Boyne's obligation to hold any such information in confidence will be satisfied
if it exercises the same care with respect to such information as it would take
to preserve the confidentiality of its own similar information. If this
Agreement is terminated, Boyne will, and will use its best efforts to cause its
officers, directors, employees, accountants, counsel, consultants, advisors and
agents to, destroy or deliver to CMI, upon request, all documents and other
materials, and all copies thereof, obtained by Boyne or on its behalf from CMI
in connection with this Agreement that are subject to such confidence.

8.2 OBLIGATIONS OF NEWCO. Boyne will cause Newco to execute and
deliver a counterpart of this Agreement to each of the other parties hereto as
promptly as practicable after December 31, 1996. Boyne will take all action
necessary to cause Newco to perform its obligations under this Agreement and to
consummate the Merger on the terms and conditions set forth in this Agreement.

8.3 DIRECTOR AND OFFICER LIABILITY. For five years after the Merger
Time, Boyne will cause CMI to continue to indemnify and to hold harmless the
present and former officers and directors of CMI in respect of acts or omissions
occurring prior to the Merger Time to the extent provided under CMI's articles
of incorporation and bylaws in effect on the date hereof; PROVIDED that such
indemnification will be subject to any limitation imposed from time to time
under applicable law. For five years after the Merger Time, Boyne will cause
CMI to use its best efforts to provide officers' and directors' liability
insurance in respect of acts or omissions occurring prior to the Merger Time
covering each such Person currently covered by CMI's officers' and directors'
liability insurance policy on terms with respect to coverage and amount no less
favorable than those of such policy in effect on the date hereof, PROVIDED that
in satisfying its obligation under this Section, Boyne will not be obligated to
cause CMI to pay premiums in excess of one and one-half times the amount per
annum CMI paid in its last full fiscal year, which amount has been disclosed to
Boyne.

ARTICLE 9
TERMINATION

9.1 TERMINATION. This Agreement may be terminated and the Merger may
be abandoned (notwithstanding any approval of this Agreement by the stockholders
of CMI):

(a) by mutual written consent of CMI and Boyne at any time prior to
the Reorganization Date;

(b) by CMI, at any time on or after the Drop-Dead Date, if the
Reorganization Date has not occurred before the Drop-Dead Date,
notwithstanding the fact that all of the conditions precedent set forth in
Sections 4.2 and 4.4 have been satisfied, or waived by Boyne;

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(c) by Boyne, at any time on or after the Drop-Dead Date, if the
Reorganization Date has not occurred before the Drop-Dead Date,
notwithstanding the fact that all of the conditions precedent set forth in
Sections 4.2 and 4.3 have been satisfied, or waived by CMI;

(d) by either CMI or Boyne, at any time after the meeting of CMI's
stockholders referred to in Section 4.1.(b) is finally adjourned, if the
condition precedent set forth in Section 4.2.(a) has not been satisfied;

(e) by either CMI or Boyne, at any time on or after the Drop-Dead
Date, if the Reorganization Date has not occurred before the Drop-Dead Date
and one or more of the conditions precedent set forth in Section 4.2 has
not been satisfied;

(f) by Boyne, if prior to the Merger any Person, entity or "group"
(as defined in Section 13(d)(3) of the 1934 Act) other than Boyne and Newco
acquires beneficial ownership of 50% or more of the outstanding Class A
Shares.

9.2 EFFECT OF TERMINATION. If this Agreement is terminated pursuant
to Section 9.1, this Agreement will become void and of no effect with no
liability on the part of any party hereto, PROVIDED that if such termination is
pursuant to clause (b) or (c) of Section 9.1, Boyne (if this Agreement is so
terminated by CMI) or CMI (if this Agreement is so terminated by Boyne) will be
fully liable for any breach of this Agreement by it and PROVIDED FURTHER that
the agreements contained in this Section and in Section 8.1 and Article 10 will
survive the termination of this Agreement. If this Agreement is terminated
pursuant to clause (a), (b), (d) or (e) of Section 9.1, Boyne will reimburse CMI
for the following Transaction Costs incurred in compliance with this Agreement
since July 31, 1996: (i) approximately $80,000 of consultants' fees incurred in
connection with CMI's master development plan, (ii) not more than $22,000 of
fees and expenses of Houlihan reasonably incurred in providing a fairness
opinion and other valuation advice, (iii) the cost of printing and mailing the
Proxy Statement, (iv) other Transaction Costs that Boyne has agreed in writing
to pay and (v) in addition, other Transaction Costs not referred to in clauses
(i) through (iv) above, reasonably incurred, that do not in the aggregate exceed
$125,000.

ARTICLE 10
MISCELLANEOUS

10.1 NOTICES. All notices, requests and other communications to any
party hereunder will be in writing (including facsimile transmission or similar
writing) and will be given,

IF TO BOYNE OR NEWCO, OR TO CMI AFTER THE MERGER TIME:
c/o Boyne USA, Inc.
Boyne Mountain Road
Boyne Falls, MI 49713
Attn: Ed Dembek
Telecopier: 616-549-6094

WITH A COPY TO:
Kirwan & Barrett
215 West Mendenhall
Bozeman, Montana 59771-1348
Attn: Stephen M. Barrett
Telecopier: 406-586-8971

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AND A COPY TO:
Bogle & Gates P.L.L.C.
Two Union Square
601 Union Street
Seattle, Washington 98122
Attn: Scot J. Johnston
Telecopier: 206-621-2660

IF TO CMI BEFORE THE MERGER TIME:
One Crystal Mountain Boulevard
Crystal Mountain, Washington 98022
Attn: Thomas F. Leonard
Telecopier: 360-825-6261

WITH A COPY TO:
LeSourd & Patten, P.S.
2400 Columbia Center
701 Fifth Avenue
Seattle, Washington 98104-7095]
Attn: Rodney J. Waldbaum
Telecopier: 206-223-1099

or such other address or telecopier number as such party may hereafter specify
for the purpose by notice to the others. Each such notice, request or other
communication will be effective (a) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (b) otherwise, when delivered at the address specified
in this Section. Failure to provide a copy of any notice to a person that is
not a party to this Agreement will not affect the effectiveness of the notice to
such party.

10.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties and agreements contained herein and in any certificate or other
writing delivered pursuant hereto will not survive the Merger Time, except for
the representations, warranties and agreements set forth in the Club Operating
Agreement, the Qualified Expenditure Agreement and the Pledge Agreement, and in
Sections 2.3.(b), 4.1.(h) and 8.3 and Article 10 of this Agreement, which will
survive the Merger Time.

10.3 AMENDMENTS; NO WAIVERS. (a) Any provision of this Agreement may
be amended or waived prior to the Merger Time if, and only if, such amendment or
waiver is in writing and signed, in the case of an amendment, by each party
hereto, or, in the case of a waiver, by the party against whom the waiver is to
be effective.

(b) Any provision of this Agreement may be amended or waived after the
Merger Time if, and only if, such amendment or waiver is in writing and signed,
in the case of an amendment, by the Club and Boyne or, in the case of a waiver,
by the party against whom the waiver is to be effective.

(c) No failure or delay by any party in exercising any right, power
or privilege hereunder will operate as a waiver thereof nor will any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided will be cumulative and not exclusive of any rights or remedies provided
by law. This Agreement, together with the exhibits and schedules hereto,
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements, understandings and
negotiations, both written and oral, among any of the parties with respect to
the subject matter of this Agreement.

10.4 EXPENSES. All costs and expenses incurred in connection with
this Agreement will be paid by the party incurring such cost or expense, except
as set forth in Section 9.2.

-27-
<PAGE>

10.5 SUCCESSORS AND ASSIGNS. This Agreement will inure to the benefit
of and be binding upon each of the parties hereto and their respective
successors, but no party hereto may assign, delegate or otherwise transfer any
of its obligations or rights under this Agreement.

10.6 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement will
be governed by and construed in accordance with the laws of the State of
Washington. The parties hereby submit to the nonexclusive jurisdiction of the
United States District Court for the Western District of Washington and of any
Washington state court sitting in King County for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each party irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.

10.7 HEADINGS AND CAPTIONS. The headings and captions in this
Agreement are included for convenience of reference only and will be ignored in
the construction or interpretation hereof.

10.8 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in any
number of counterparts, each of which will be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement will become effective between CMI and Boyne when both such parties
shall have received a counterpart hereof signed by the other. This Agreement
will become effective among those two parties and Newco when those two parties
have received a counterpart hereof signed by Newco.

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

CRYSTAL MOUNTAIN, INC.

By /S/ ROBERT CARLSON
-------------------------------
Title: Chairman

BOYNE USA, INC.

By /S/ ARTHUR TEBO
------------------------------
Title: Chief Operating Officer

CM ACQUISITION CORPORATION

By /S/ JOHN KIRCHER
------------------------------
Title:

-28-

<PAGE>

EXHIBIT A

SKI CLUB OPERATING AGREEMENT

AGREEMENT dated as of _______ __, 1997 between Crystal Mountain, Inc.,
a Washington corporation ("CMI"), and Crystal Mountain Founders' Club, a
Washington nonprofit corporation (the "Club").

1. DEFINITIONS. (a) Each of the following terms, when capitalized,
is used herein with the meaning set forth in the Section or other part of this
Agreement identified opposite such term below:
0
Annual Administrative Fee 3.(c)
CMI Preamble
Club Preamble
Ticket Recipient 3.(b)

(b) Each of the following terms, when capitalized, is used herein
with the meanings set forth below:

"Adult Weekend Lift Ticket" means a contractual license that permits
one particular individual to use all of the Lifts without restriction (other
than general safety and operating restrictions) during their entire hours of
operation on one day, which may be any day the Lifts are operating (or
another contractual license, as set forth in Section 2.(e)).

"Adult Unrestricted Season's Pass" means a contractual license that
permits one particular individual to use all of the Lifts without restriction
(other than general safety and operating restrictions) during their entire
hours of operation for one Season (or another contractual license, as set
forth in Section 2.(e)).

"Lift Ticket" means an Adult Weekend Lift Ticket, an Adult
Unrestricted Season's Pass or any other contractual license that permits one
particular individual to use the Lifts on terms offered by CMI to the general
public, which terms may include restrictions such as (without limitation) (i)
a provision that the individual holder who is permitted to use such license
must be under or over a certain age, (ii) a limitation on the Lifts the
holder is permitted to use, (iii) a limitation on the hours during which the
holder is permitted to use the Lifts, (iv) a limitation on the days on which
the holder is permitted to use the Lifts (such as only weekdays that are not
holidays), (v) a limitation on the number of rides on the Lifts the holder is
permitted or (vi) other similar or different restrictions. "Lift Ticket"
does not include licenses issued only to certain classes of individuals, such
as employees of CMI, students in ski schools owned by CMI or others, or
individuals who provide volunteer or paid services who are not employees of
CMI, including without limitation ski patrolmen, mountain hosts, ski shop
personnel, food service personnel, ski instructors and other ski school
employees.

"Lifts" means the ski lifts, ski tows and conveyances for conducting
individuals uphill (including without limitation chair lifts, rope tows and
other lifts) now or hereafter owned or operated by CMI that are in the
general vicinity within which CMI currently operates ski lifts or are
reachable by skiers from another Lift, including at any relevant time such of
the ski lifts now operated that continue to operate at such time, as well as
any replacement or additional ski lifts.

"Membership Unit" means one membership unit in the Club, as
described in the articles of incorporation and bylaws of the Club, as adopted
and amended from time to time.

"Retail Price" of any Lift Ticket (including without limitation a
Lift Ticket issued by the Club) means the full retail price at which CMI
offers to sell a Lift Ticket with the same rights and restrictions to the
public generally "through the window" at the Crystal Mountain ski area,
without regard to any discount that may be offered to holders of ski discount
cards, members of clubs, students in ski schools, holders of coupons or other
similar or different discounts.

-1- Club Operating Agreement

<PAGE>

"Season" means the twelve months beginning on October 1 of each year
and ending on September 30 of the following year.

2. CLUB-ISSUED LIFT TICKETS. (a) On the terms and subject to the
conditions in this Agreement, CMI agrees that, beginning with the Season that
begins in 1997, it will forever accept Lift Tickets issued by the Club and will
permit each individual holding such a Lift Ticket to ride the Lifts on the same
terms and subject to the same (but not greater) limitations, applicable to an
individual holding an equivalent Lift Ticket issued by CMI, PROVIDED that:

(i) the aggregate Retail Price of all Lift Tickets issued by the Club
for use during one Season (taking into account, in determining the Retail Price
of a Lift Ticket, the fact that the Retail Price of a Lift Ticket with
restrictions on the use thereof may have a lower Retail Price than an Adult
Weekend Lift Ticket, as referred to in the definition of "Lift Ticket" and
"Retail Price" above -- for example, a child's Lift Ticket, if such a Lift
Ticket is offered by CMI for sale to the general public at a Retail Price that
is less than that of an Adult Weekend Lift Ticket) will not exceed the sum of:

(A) the Retail Price of an Adult Weekend Lift Ticket times the number
or Membership Units held by members of the Club who (1) hold not less than
20 Membership Units and (2) have paid annual dues to the Club not later
than the October 31 falling shortly after the start of such Season,

PLUS

(B) 14 times the Retail Price of an Adult Unrestricted Season's Pass;

(ii) the total number of Membership Units is not greater than
___________;

(iii) annual Club dues, per Membership Unit, are not less than
5% of the Retail Price of an Adult Weekend Lift Ticket;

(iv) the Club has performed all of its obligations hereunder
that fall due on or before the November 15 falling in the Season in which
such Lift Tickets are to be used.

(b) Each Lift Ticket issued by the Club to a particular
individual will be transferable by such individual, PROVIDED that no such
Lift Ticket may be transferred after it is first used by the holder to ride
any of the Lifts. No Lift Ticket issued by the Club will have any cash
surrender value and no holder will have any right to cause CMI or any other
person or entity to redeem any such Lift Ticket for cash.

(c) CMI and the Club agree that the experience of skiing at
the Crystal Mountain resort is unique and that the value of that experience
is not susceptible of calculation or reduction to money damages.
Accordingly, it is the intention of the parties that the Club will be
entitled to specific performance of the covenant set forth in this Section,
and the Club is expressly and irrevocably authorized to demand and obtain
specific performance.

(d) The term of the agreement set forth in this Section 2 is
perpetual.

(e) If at any time CMI no longer offers to sell Adult Weekend
Lift Tickets or Adult Unrestricted Season's Passes, or it is otherwise not
possible to determine the Retail Price of an Adult Weekend Lift Ticket or an
Adult Unrestricted Season's Pass, then "Adult Weekend Lift Ticket" or "Adult
Unrestricted Season's Pass" (as the case may be), as used in this Agreement,
will mean some other Lift Ticket, or collection or combination of Lift
Tickets, that provides to the holder rights that are substantially equivalent
to the rights provided by an Adult Weekend Lift Ticket or Adult Unrestricted
Season's Pass (as the case may be), as defined in Section 1.

- -----------------------------
(1) Number to be filled in before execution with the number of
Membership Units issued in the Reorganization.

Club Operating Agreement -2-

<PAGE>

(f) The Club will reimburse CMI from time to time on reasonable
notice, for the amount (if any) by which the fees theretofore paid by CMI to the
United States Forest Service are increased as a result of the issuance of Lift
Tickets by the Club. CMI will use its reasonable best efforts to minimize the
amount by which such fees are so increased.

3. ADMINISTRATIVE SERVICES. (a) The Club hereby engages CMI to
perform, and appoints CMI as its agent to perform, and CMI hereby agrees to
perform, and accepts appointment as the Club's agent to perform, the
administrative functions described below.

(b) Not later than November 15 of each year, the Club will
deliver to CMI a list of each individual (each, a "Ticket Recipient") to whom
the Club wishes to issue Lift Tickets for use during the then-current Season,
and for each either (i) if the Club wishes to issue a specific type or types
of Lift Tickets to such Ticket Recipient, the type or types and number of
Lift Tickets to be so issued or (ii) if the Club wishes to issue Lift Tickets
having a certain aggregate Retail Price to such Ticket Recipient, such
aggregate Retail Price stated either as a dollar amount or as a multiple of
the Retail Price of an Adult Weekend Lift Ticket. Thereafter, CMI, as the
Club's agent, will: (A) issue Lift Tickets to each Ticket Recipient in
accordance with the Club's list (or to one or more other individuals, in
accordance with such Ticket Recipient's instructions) and (B) administer and
register transfers of Lift Tickets so issued. CMI may adopt reasonable
procedures, and impose reasonable restrictions, to administer the issuance
and transfer of such Lift Tickets.

(c) As compensation for performing such services, the Club
will pay CMI annually an amount (the "Annual Administrative Fee") equal to 4%
of the Retail Price of all Lift Tickets to be issued by the Club each Season.
The Annual Administrative Fee will be payable in advance no later than
November 15 of each year with respect to Lift Tickets to be issued during the
then-current Season. The Annual Administrative Fee will be deemed earned
when paid, and will not in any event be refunded in whole or in part for any
reason, PROVIDED that, if CMI fails to operate the Lifts for at least 20 days
during a Season, CMI will refund the entire Annual Administrative Fee
received by it for that Season. Without limiting the generality of the
foregoing, no portion of the Annual Administrative Fee will be refunded if
the number or aggregate Retail Price of Lift Tickets actually issued and used
is less than the number to be issued, except as set forth in the proviso to
the preceding sentence.

(d) The term of the agreement set forth in this Section 3 is
perpetual. The agreement set forth in this Section 3 is a "take-or-pay"
agreement: the Club will be obligated to pay the administrative fee set forth
in this Section whether or not it avails itself of the administrative
services described in this Section. CMI will, however, be liable for breach
of its agreement to provide the administrative services set forth in this
Section, PROVIDED that the Club's remedy for such breach of this Section (but
not Section 2) will be limited to money damages in an amount equal to the
cost to the Club of obtaining from another source the administrative services
CMI contracted to provide in this Section but failed to provide, after the
Club takes reasonable actions to mitigate such damages, (and the expenses, if
any, payable pursuant to Section 7.(c)) and CMI will not in any event be
liable for any incidental or consequential damages.

4. LIABILITY INSURANCE. CMI will cause each policy of liability
insurance covering liabilities arising out of occurrences at the Crystal
Mountain resort to name the Club as an additional insured, as its interests
may appear. The policies of insurance referred to in the preceding sentence
do not include, for example and without limitation, policies insuring CMI
against fire or other casualty to any property, or policies covering errors
or omissions of CMI's officers or directors. This Section is not intended to
impose any obligation on CMI to maintain any insurance beyond what CMI
determines necessary or appropriate.

5. NONCOMPETITION. The Club will not:

(a) for a period of five full years from the date hereof,
directly or indirectly, as a principal or for its own account or
solely or jointly with others, or as stockholder in any corporation
or joint stock association, own or operate any ski lift, ski area or
resort in the State of Washington, or engage within the State of
Washington in any business that competes with CMI's business; or

-3- Club Operating Agreement

<PAGE>

(b) for a period of five full years from the date hereof, employ
or solicit, or receive or accept the performance of any material
services by, any employee of CMI without CMI's consent.

If any of the provisions of this Section is held to extend over a geographic
area or period of time beyond what is permitted by applicable law, or is in
any way construed to be too broad or to any extent invalid, such provision
will be construed to cover the maximum enforceable geographic area or time
period and otherwise be construed to be enforceable to the maximum extent
possible. CMI and the Club agree that the harm that might be suffered by CMI
as a result of a breach of this Section is not susceptible of calculation or
reduction to money damages. Accordingly, it is the intention of the parties
that CMI will be entitled to specific performance of the covenant set forth
in this Section, and CMI is expressly and irrevocably authorized by to demand
and obtain specific performance.

6. AGENCY. (a) The duties and obligations of CMI will be determined
solely by the express provision of this Agreement and CMI will not have any
obligation except for the performance of such duties and obligations as are
specifically set forth in this Agreement.

(b) In the performance of its duties hereunder, CMI will be
entitled to rely upon any written or oral instructions believed by it in good
faith to be genuine and to have been given by an appropriate party, and will
not be required to investigate the truth or accuracy of any statement. CMI
may, prior to taking or refraining from taking any action hereunder, request
a certificate from the Club or another person as to any facts which CMI deems
relevant to the discharge of its responsibilities and will be held harmless
in relying upon such certificate in good faith.

(c) CMI will not be liable for any error or judgment, or any
action taken, suffered or omitted to be taken hereunder except in the case of
its gross negligence or willful misconduct, nor will it be liable for the
default or misconduct of any employee, agent or attorney appointed by it who
shall have been selected with reasonable care.

7. MISCELLANEOUS. (a) NOTICES. All notices, requests and other
communications to any party hereunder will be in writing (including facsimile
transmission or similar writing) and will be given,

IF TO CMI:
One Crystal Mountain Boulevard
Crystal Mountain, Washington 98022
Attn: Thomas F. Leonard
Telecopier: 360-825-6261

WITH A COPY (EXCEPT IN THE CASE OF ADMINISTRATIVE NOTICES, AS
DEFINED BELOW) TO:
Boyne USA, Inc.
Boyne Mountain Road
Boyne Falls, MI 49713
Attn: Ed Dembek
Telecopier: 616-549-6094

AND A COPY (EXCEPT IN THE CASE OF ADMINISTRATIVE NOTICES) TO:
Kirwan & Barrett
215 West Mendenhall
Bozeman, Montana 59771-1348
Attn: Stephen M. Barrett
Telecopier: 406-586-8971

Club Operating Agreement -4-

<PAGE>

IF TO THE CLUB:
701 Fifth Avenue
Suite 2400
Seattle, Washington 98104-7095
Attn: Lawrence E. Hard, Esq.
Telecopier: 206-223-1099

or such other address or telecopier number as such party may hereafter
specify for the purpose by notice to the others. Each such notice, request
or other communication will be effective (i) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (ii) otherwise, when delivered at the
address specified in this Section. Failure to provide a copy of any notice
to a person that is not a party to this Agreement will not affect the
effectiveness of the notice to such party.

"Administrative Notice" means each (A) delivery of a list of
Ticket Recipients pursuant to Section 3.(b), (B) delivery of instructions of
Ticket Recipients identifying individuals to whom Lift Tickets should be
issued pursuant to Section 3.(b) and (C) other similar notices of a merely
administrative nature relating the performance by CMI of administrative
services pursuant to Section 3.

(b) AMENDMENTS; NO WAIVERS. Any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by CMI and the Club or, in
the case of a waiver, by the party against whom the waiver is to be
effective. No failure or delay by any party in exercising any right, power
or privilege hereunder will operate as a waiver thereof nor will any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein provided will be cumulative and not exclusive of any rights or
remedies provided by law.

(c) LITIGATION EXPENSES. If either party hereto shall bring
any suit or legal action against the other to enforce the terms of this
Agreement, the prevailing party will have and recover against the other
party, in addition to all court costs and disbursements, its reasonable costs
and expenses incurred in connection with such suit or action, including
without limitation reasonable attorneys' fees and expenses.

(d) SUCCESSORS AND ASSIGNS. This Agreement will inure to the
benefit of and be binding upon each of the parties hereto and their
respective successors, but no party hereto may assign, delegate or otherwise
transfer any of its obligations or rights under this Agreement, except that
the Club may assign, delegate and transfer all of its obligations and rights
hereunder, as an entirety, to any entity that succeeds to substantially all
of the business, purposes and assets of the Club.

(e) NO THIRD-PARTY BENEFICIARIES. No person or entity is
intended to be a third-party beneficiary of any agreement contained herein or
otherwise to be benefitted hereby. This Agreement is enforceable only by the
Club and CMI, respectively. Without limiting the generality of the
foregoing, CMI does not owe any duty directly to any member of the Club and
no member of the Club is entitled to enforce this Agreement against CMI.

(f) GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of Washington. The
parties hereby submit to the nonexclusive jurisdiction of the United States
District Court for the Western District of Washington and of any Washington
state court sitting in King County for purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. Each party irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that any
such proceeding brought in such a court has been brought in an inconvenient
forum.

(g) HEADINGS AND CAPTIONS. The headings and captions in this
Agreement are included for convenience of reference only and will be ignored
in the construction or interpretation hereof.

-5- Club Operating Agreement

<PAGE>

(h) COUNTERPARTS. This Agreement may be signed in any number
of counterparts, each of which will be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument. This
Agreement will become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.

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

CRYSTAL MOUNTAIN, INC.

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

CRYSTAL MOUNTAIN FOUNDERS' CLUB

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

Club Operating Agreement -6-

<PAGE>

EXHIBIT B

QUALIFIED EXPENDITURE AGREEMENT

AGREEMENT dated as of _______ __, 1997 between Boyne USA, Inc., a
Michigan corporation ("Boyne"), and Crystal Mountain Founders' Club, a
Washington nonprofit corporation (the "Club").

WHEREAS, Boyne has entered into a Reorganization Agreement and
Agreement and Plan of Merger (as the same may be amended from time to time,
the "Reorganization and Merger Agreement") dated as of December 6, 1996 among
Boyne, Crystal Mountain, Inc., a Washington corporation ("CMI"), and CM
Acquisition Corporation, a Washington corporation;

WHEREAS, CMI is a publicly-held corporation that owns and operates
Crystal Mountain, a ski resort on federally-owned land in Washington State;

WHEREAS, on the terms and conditions set forth in the Reorganization
and Merger Agreement, CMI will become a wholly-owned subsidiary of Boyne; and

WHEREAS, the Club has been formed to provide its members, who initially
will be former shareholders of CMI, the opportunity to ski and enjoy other
recreational activities at the Crystal Mountain ski resort;

NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:

1. DEFINITIONS. (a) Each of the following terms, when capitalized, is
used herein with the meaning set forth in the Reorganization and Merger
Agreement:

Merger
Merger Time
Reorganization
Reorganization Date

(b) Each of the following terms, when capitalized, is used herein with
the meaning set forth in the Section or other part of this Agreement
identified opposite such term below:

Boyne Preamble
Boyne's Transaction Income 5.(a)
Club Preamble
CMI First recital
CMI's Closing NOL 5.(a)
CMI's Transaction Income 5.(a)
Default Escrow Account 7.(b)
Disputed Amount 8
Final Proposal 8
Final Threshold 3
Intermediate Threshold 3
Qualified Capital Expenditures 3
Qualified Expenditures 3
Qualified Tax Expenditures 3
Reorganization and Merger Agreement First recital

"Federal Income Tax" payable or incurred by any person or entity means
the tax imposed by Subtitle A of the Internal Revenue Code on such person or
entity, including without limitation corporate

-1- Qualified Expenditure Agt

<PAGE>

income tax, individual income tax, alternative minimum tax, capital gains tax,
and also any withholding of amounts paid to or by such person or entity on
account of any such tax and any interest or any penalty, addition to tax or
additional amount imposed by the United States Internal Revenue Service on
account of any such tax.

"Forest Service" means the United States Forest Service, an agency of
the United States Department of Agriculture, and any agency that succeeds to
the functions of such agency.

"Improvements" means the lodges, restaurants, hotels, shops, maintenance
facilities, buildings, structures, parking lots, pads, improvements and
fixtures now or hereafter owned or operated by CMI that are in the general
vicinity within which CMI currently owns or operates improvements and fixtures
or are reachable by skiers from any Lift, including at any relevant time such
improvements and fixtures now existing that continue to exist at such time, as
well as any replacement or additional improvements and fixtures.

"Internal Revenue Code" means the Internal Revenue Code of 1986 and the
rules and regulations promulgated thereunder, as amended from time to time.

"Lifts" means the ski lifts, ski tows and conveyances for conducting
individuals uphill (including without limitation chair lifts, rope tows and
other lifts) now or hereafter owned or operated by CMI that are in the general
vicinity within which CMI currently operates ski lifts or are reachable by
skiers from another Lift, including at any relevant time such of the ski lifts
now operated that continue to operate at such time, as well as any replacement
or additional ski lifts.

"Membership Unit" means one membership unit in the Club, as described in
the articles of incorporation and bylaws of the Club, as adopted and amended
from time to time.

"Qualified Expenditure Covenant" means the covenant of Boyne set forth
in Section 3, as more fully described in the other Sections of this Agreement.

"Resort" means the ski area and base facilities commonly referred to as
"Crystal Mountain," as in existence at the date hereof and as improved,
modified and added to after the date hereof and after the Merger Time,
including without limitation the Lifts, the Improvements and the equipment
used in connection with the Lifts and Improvements (such as, without
limitation, snow-making equipment, snow grooming equipment, vehicles, lighting
and food-service equipment).

2. CONDITION TO EFFECTIVENESS. This Agreement will become effective at
the Merger Time. If the Reorganization and Merger Agreement is terminated and
the Merger is abandoned, this Agreement will become void and of no effect with
no liability on the part of any party hereto.

3. BOYNE'S QUALIFIED EXPENDITURE COVENANT. Boyne agrees for the benefit
of the Club that, if the Merger occurs, Qualified Expenditures (as defined
below) will not be less than the Intermediate Threshold (as defined below) as
of December 31, 2001 and will not be less than the Final Threshold (as defined
below) as of December 31, 2006 (including in the Qualified Expenditures as of
December 31, 2006 the Qualified Expenditures as of December 31, 2001), subject
to FORCE MAJEURE as described in Section 4.(d).

"Qualified Expenditures" as of any date means the sum of the following,
calculated and determined as set forth in this Agreement:

(a) expenditures from the Merger Time through such date in making
capital improvements to the Resort, as described in Section 4 ("Qualified
Capital Expenditures"), PLUS

(b) Federal Income Taxes incurred by CMI, Boyne and the stockholders
of Boyne solely as a result of completing the Reorganization and Merger, as
described in Section 5 ("Qualified Tax Expenditures"), PLUS

(c) $1,789,940.88, being the aggregate amount of the consideration
agreed to be paid to the stockholders of CMI in the Merger, plus any amount
paid to a stockholder of CMI as a dissenter

-2-

<PAGE>

pursuant to Chapter 23B.13 of the Revised Code of Washington, to the extent the
same exceeds the consideration that would otherwise be payable to such
stockholder.

The "Intermediate Threshold" means the sum of $8,000,000 plus the excess
(if any) of (i) the aggregate amount of Qualified Expenditures referred to in
clauses (b) and (c) of the definition of "Qualified Expenditures" over (ii)
$2,000,000.

The "Final Threshold" means the sum of $15,000,000 plus the excess (if
any) of (i) the aggregate amount of Qualified Expenditures referred to in
clauses (b) and (c) of the definition of "Qualified Expenditures" over (ii)
$5,000,000.

4. QUALIFIED CAPITAL EXPENDITURES. (a) DEFINITION. Qualified Capital
Expenditures, for the purpose of determining "Qualified Expenditures" will
include all expenditures of CMI, Boyne and affiliates of CMI and Boyne on the
projects described in the attached Project List that are capitalized in
accordance with generally accepted accounting principles, including without
limitation costs sometimes referred to as "soft costs" (such as, without
limitation, design fees, construction period interest, costs incurred in
obtaining Forest Service consents and other permits, permit fees, legal
expenses, transaction costs, site preparation costs and the like), but
excluding internal charges. The Club may appoint an advisory committee of not
more than 15 individuals, which will provide non-binding advice and
recommendations to Boyne and CMI as to capital projects. CMI will consult
with such advisory committee from time to time in planning capital projects.
All expenses of such advisory committee will be borne by the Club.

(b) AGREED AMOUNTS. In an effort to minimize the accounting otherwise
necessary to determine and confirm the amount of Qualified Capital
Expenditures, there will be a rebuttable presumption that the Qualified
Capital Expenditures incurred in completing each of the respective projects
described in the attached Project List (excluding "other improvements to the
resort") will be equal to the estimated cost of such project set forth in the
attached Project List. Such presumption may be rebutted by either Boyne or
the Club producing evidence reasonably showing that the actual Qualified
Capital Expenditures incurred in completing any such project is either more or
less than the estimated cost set forth in the attached Project List.
Notwithstanding such presumption, Boyne will retain (and will cause CMI and
their affiliates to retain) their records substantiating such expenditures
until a final agreement is entered into as described in Section 6. Such
records will be available for inspection by the Club and its agents at
reasonable times during normal business hours, upon reasonable request.

(c) REPORTS. From time to time, no less frequently than annually,
Boyne will deliver to the Club a certificate setting forth the amount of
Qualified Capital Expenditures through a recent date. Each certificate
delivered pursuant to this subsection will be conclusive in establishing the
amount of Qualified Capital Expenditures through the date set forth therein,
unless the Club delivers a written objection to the matters set forth in such
certificate within 45 days after receipt. If the Club delivers such a written
objection and Boyne and the Club fail to agree on the amount of Qualified
Capital Expenditures within 30 days after receipt of such objection, Boyne and
the Club will submit such matter to arbitration as described in Section 8.

(d) FORCE MAJEURE. Boyne will not be responsible for any failure to
comply with the Qualified Expenditure Covenant by the respective deadlines set
forth in Section 3 (I.E. December 31, 2001 and December 31, 2006), to the
extent such failure is attributable solely to causes beyond Boyne's control,
including without limitation: failure to obtain Forest Service approval of any
proposed project or any other necessary permit or third-party consent
(notwithstanding Boyne's reasonable diligence in seeking such approval, permit
or consent), acts of God, war, armed hostilities, riots, fires, floods,
storms, earthquakes, serious accidents, expropriation, condemnation or
confiscation of property, governmental acts or failure to act (whether or not
under legal authority), strikes or labor troubles or failure or delay in
transportation. The deadlines set forth in Section 3 will be extended as
appropriate to give effect to this subsection.

5. QUALIFIED TAX EXPENDITURES. (a) DEFINITION. Qualified Tax
Expenditures, for the purpose of determining the amount of "Qualified
Expenditures" will be:

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<PAGE>

(i) in the case of CMI, all Federal Income Taxes paid after the Merger
Time in respect of periods and events up to and including the Merger
Time, including without limitation the product of 34% times the excess of
(A) the amount of taxable income recognized by CMI in completing the
Reorganization and Merger ("CMI's Transaction Income") over (B) the net
operating loss of CMI that is available to reduce CMI's taxable income,
as of the end of the day immediately before the Reorganization Date
("CMI's Closing NOL"); and

(ii) in the case of Boyne and Boyne's stockholders, the product of
highest marginal federal income tax rate for individual taxpayers times
the amount of taxable income recognized by Boyne or its stockholders
(without duplication, that is without treating any taxable income of
Boyne as taxable income of both Boyne and its stockholders) in completing
the Reorganization and Merger ("Boyne's Transaction Income"), without any
deduction or credit.

(b) AGREED AMOUNTS. The parties agree that it is their expectation
that: (i) CMI's Transaction Income will be equal to the fair market value of
the memberships in the Club distributed as a dividend in the Reorganization,
(ii) CMI's Closing NOL will be equal to $1,048,000 plus the net loss of CMI
for the period from May 1, 1996 to (but excluding) the Reorganization Date,
determined in accordance with principles used in calculating taxable income
for federal corporate income tax purposes, and (iii) Boyne's Transaction
Income will be zero. Both parties hereto will prepare and file all tax
returns (including without limitation Forms 1099-DIV to be prepared by CMI) in
accordance with the expectations set forth above, and will take positions
consistent with such expectations, and the assumption that the fair market
value of the Club memberships distributed in the Reorganization is $154.48 per
Membership Unit, in any tax audit, tax review or tax litigation.

(c) REPORTS. Promptly after CMI files its federal income tax return
for the year (or part thereof) that began May 1, 1996, Boyne will deliver to
the Club a certificate setting forth the amount of CMI's Closing NOL as
calculated by Boyne, and the amount of Qualified Tax Expenditures, calculated
as described in this Section. Whenever CMI, Boyne or any stockholder of Boyne
amends any return filed by it, enters into any closing agreement, settles any
tax audit, tax review or tax litigation, makes a payment of Federal Income Tax
calculated on a basis other than that set forth in its tax return, and
whenever any judgment is entered for or against it in any tax litigation, if
the same affects the amount of Qualified Tax Expenditures (including without
limitation, if the same makes, or is based on, any change in CMI's Transaction
Income, CMI's Closing NOL or Boyne's Transaction Income), Boyne will deliver
to the Club a certificate setting forth a revised calculation of the amount of
Qualified Tax Expenditures. Each certificate delivered pursuant to this
subsection will be conclusive in establishing (or adjusting, as the case may
be) the amount of Qualified Tax Expenditures included in Qualified
Expenditures for the purpose of determining Boyne's compliance with the
Qualified Expenditure Covenant, unless the Club deliveres a written objection
to the matters set forth in such certificate within 45 days after receipt. If
the Club delivers such a written objection and Boyne and the Club fails to
agree on the amount of Qualified Tax Expenditures within 30 days after
receipt of such obligation, Boyne and the Club will submit such matter to
arbitration as described in Section 8.

6. FINAL AGREEMENT. After December 31, 2006 (or after such later date
to which the deadline for meeting the Qualified Expenditure Covenant is
extended by Section 4.(d)), the Club will, within 45 days after receipt of a
request by CMI to enter into a written agreement to the effect that Boyne has
complied with the Qualified Expenditure Covenant, either enter into such an
agreement or respond with written objections describing how Boyne has failed
to comply with the Qualified Expenditure Covenant.

7. REMEDIES OF THE CLUB. (a) Boyne and the Club agree that the
experience of skiing at the Resort is unique and that the value of that
experience, and how that value might be affected by the failure of Boyne to
perform the Qualified Expenditure Covenant, are not susceptible of calculation
or reduction to money damages. Accordingly, it is the intention of the
parties that, if and to the extent the Qualified Expenditures are not made
within the required time, subject to FORCE MAJEURE, the Club will be

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<PAGE>

entitled to specific performance of the Qualified Expenditure Covenant, and the
Club is expressly and irrevocably authorized to demand and obtain specific
performance.

(b) Without limiting the generality of the preceding subsection, if,
after either deadline for making Qualified Expenditures (December 31, 2001 or
December 31, 2006, in each case as extended by Section 4.(d)), Qualified
Expenditures are less than $8,000,000 or $15,000,000 (as the case may be):

(i) The Club may establish an escrow account (the "Default Escrow
Account") with a bank or trust company designated by the Club, and
require Boyne to pay into the Escrow Account an amount equal to the
product of (A) the amount of Qualified Expenditures required to reach
$8,000,000 or $15,000,000 (as the case may be) times (B) 107%;

(ii) The Club may itself cause one or more capital projects to be
undertaken at the Resort, subject to obtaining all required Forest
Service approvals, other permits and consents of third parties and in
compliance with all applicable laws, such projects to be taken from such
of those listed on the attached Project List as have not previously been
completed, and the Club may enter on the property occupied and used by
CMI to cause such projects to be completed;

(iii) The Club may cause funds on deposit in the Default Escrow Account
(including all interest earned on such funds, which will be deposited in
the Default Escrow Account and remain therein until used as described in
this clause) to be used to pay Qualified Capital Expenditures and
reasonable costs and expenses incurred in supervising the Qualified
Capital Expenditures, funds to be drawn and disbursed in accordance with
procedures that are substantially as set forth in the attached
Disbursement Procedures; and

(iv) An "Event of Default" hereunder will have occurred and the Club
will have the rights and remedies set forth in the Pledge Agreement of
even date herewith.

Boyne agrees that the amount to be deposited in the Default Escrow Account
pursuant to Section 7.(b)(i) is a reasonable estimate calculated to take
account of anticipated increases in the cost of completing capital projects,
costs that would be incurred by the Club in causing capital projects to be
completed and the anticipated damage to members of the Club occasioned by a
delay in performing the Qualified Expenditure Covenant.

8. ARBITRATION. If Boyne and the Club fail to agree on the amount of
Qualified Capital Expenditures or Qualified Tax Expenditures as of a
particular date (such amount as of such date, the "Disputed Amount"), and such
matter is to be submitted to arbitration pursuant to this Agreement:

(a) If both parties so agree, resolution of such matter may be
deferred to a later time (such as, for example, until after the next deadline
referred to in Section 3), in which case each party will preserve all records
it reasonably anticipates will be relevant to the resolution of such matter.

(b) Before selecting arbitrators or beginning arbitration, each of
Boyne and the Club will present to the other in writing its "Final Proposal,"
which will be an amount that such party is willing to agree with the other is
equal to the Disputed Amount.

(c) Boyne will select one arbitrator and will notify the Club in
writing of the name and qualifications of the arbitrator so selected. Within
15 days thereafter, the Club may select a second arbitrator by written notice
to Boyne. If the Club determines not to name a second arbitrator or fails to
name a second arbitrator within such 15-day period, the arbitration will be
conducted by the one arbitrator selected by Boyne; otherwise, the arbitration
will be conducted by the two arbitrators so named and a third arbitrator
selected by such two arbitrators. Each arbitrator named by Boyne, the Club or
their arbitrators will be a certified public accountant or an attorney
admitted to practice in Washington State (in either case, independent of both
Boyne and the Club). If the first two arbitrators fail to select a third
arbitrator within 15 days after they are requested to do so, the third
arbitrator will be appointed by the King County Superior Court at the request
of Boyne or the Club.

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<PAGE>

(d) The arbitrator or arbitrators so selected will determine the
Disputed Amount by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, PROVIDED that the Disputed
Amount so determined will not be higher than the highest, nor lower than the
lowest, Final Proposal. Judgment upon any award rendered by the arbitrator or
arbitrators may be entered in any court having jurisdiction thereof.

(e) If the Disputed Amount determined by the arbitrators as set forth
above is less than 90% of Boyne's Final Proposal and less than 110% of the
Club's Final Proposal, Boyne will pay to the Club all of the Club's reasonable
costs and expenses incurred in connection with such arbitration, including
without limitation reasonable attorneys' fees and expenses. If the Disputed
Amount determined by the arbitrators as set forth above is more than 110% of
the Club's Final Proposal and more than 90% of Boyne's Final Proposal, the
Club will pay to Boyne all of Boyne's reasonable costs and expenses incurred
in connection with such arbitration, including without limitation reasonable
attorneys' fees and expenses. If neither of the preceding two sentences
applies, each party will bear its own costs and expenses incurred in such
arbitration and each will bear one-half of the arbitrators' fees and expenses.

9. REPRESENTATIONS AND COVENANT OF THE CLUB. (a) The Club represents
and warrants, on the date hereof and at the Merger Time, that the
representations and warranties set forth in Section 5.29 of the Reorganization
and Merger Agreement are true and correct.

(b) For three years after the Merger Time, the Club will cause its bylaws
at all times to continue to include provisions to substantially the effect set
forth in Section 5.29(e) of the Reorganization and Merger Agreement (it being
understood that the Club's bylaws contain provisions substantially to such
effect at the date hereof), will not permit its articles or bylaws to be
inconsistent with any such provision, and will itself comply and require its
members to comply with such provisions.

10. MISCELLANEOUS. (a) NOTICES. All notices, requests and other
communications to any party hereunder will be in writing (including facsimile
transmission or similar writing) and will be given,

IF TO BOYNE:
Boyne Mountain Road
Boyne Falls, MI 49713
Attn: Ed Dembek
Telecopier: 616-549-6094

WITH A COPY TO:
Kirwan & Barrett
215 West Mendenhall
Bozeman, Montana 59771-1348
Attn: Stephen M. Barrett
Telecopier: 406-586-8971

AND A COPY TO:
Bogle & Gates P.L.L.C.
Two Union Square
601 Union Street
Seattle, Washington 98122
Attn: Scot J. Johnston
Telecopier: 206-621-2660

IF TO THE CLUB:
701 Fifth Avenue
Suite 2400
Seattle, Washington 98104-7095
Attn: Lawrence E. Hard, Esq.
Telecopier: 206-223-1099

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<PAGE>

or such other address or telecopier number as such party may hereafter specify
for the purpose by notice to the others. Each such notice, request or other
communication will be effective (i) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (ii) otherwise, when delivered at the address
specified in this Section. Failure to provide a copy of any notice to a person
that is not a party to this Agreement will not affect the effectiveness of the
notice to such party.

(b) AMENDMENTS; NO WAIVERS. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Boyne and the Club or, in the case of
a waiver, by the party against whom the waiver is to be effective. No failure
or delay by any party in exercising any right, power or privilege hereunder
will operate as a waiver thereof nor will any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided will
be cumulative and not exclusive of any rights or remedies provided by law.

(c) LITIGATION EXPENSES. If either party hereto shall bring any suit
or legal action against the other to enforce the terms of this Agreement (not
including an arbitration described in Section 8), the prevailing party will
have and recover against the other party, in addition to all court costs and
disbursements and any other amounts payable, its reasonable costs and expenses
incurred in connection with such suit or action, including without limitation
reasonable attorneys' fees and expenses. Any amount required to be paid by
Boyne pursuant to this Section is in addition to the amount required to be
deposited by Boyne in the Default Escrow Account pursuant to Section 7.(b)(i).

(e) NO THIRD-PARTY BENEFICIARIES. No person or entity is intended to
be a third-party beneficiary of any agreement contained herein or otherwise to
be benefitted hereby. This Agreement is enforceable only by the Club and
Boyne, respectively. Without limiting the generality of the foregoing, Boyne
does not owe any duty directly to any member of the Club and no member of the
Club is entitled to enforce this Agreement against Boyne.

(f) GOVERNING LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of Washington. The parties hereby
submit to the nonexclusive jurisdiction of the United States District Court
for the Western District of Washington and of any Washington state court
sitting in King County for purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. Each
party irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

(g) HEADINGS AND CAPTIONS. The headings and captions in this
Agreement are included for convenience of reference only and will be ignored
in the construction or interpretation hereof.

(h) COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which will be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This
Agreement will become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.

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<PAGE>

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

BOYNE USA, INC.

By _________________________
Title:

CRYSTAL MOUNTAIN FOUNDERS' CLUB

By _________________________
Title:

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<PAGE>

PROJECT LIST

Master plan with E.I.S. $ 500,000
Initial snowmaking installation 800,000
Chair 4 realigned, extended and upgraded to
high speed detachable, plus slope work 2,900,000
Chair 9 upgraded to high speed detachable 2,700,000
Chair 11 conversion completed to high speed detachable 1,600,000
Lift linking lot areas 750,000
Snowmaking* 500,000
Summit drainfields 225,000
Summit traverse trail system 200,000
Rendezvous Restaurant (450 seats) 2,000,000
Snowmaking 250,000
Chair 3 (Green Valley) upgraded to high speed detachable 2,100,000
Move old Chair 9 to Silver King 750,000
Construct all new base lodge skier service facility
and food & beverage 4,000,000
Construct new high speed detachable from Chair
3 base area to Northway Peak (lift, power, roads, trails) 2,500,000
Construct new high speed detachable chairlift in
Paradise Bowl (lift, power, roads, trails) 2,500,000
Summit House expansion (500 seats) 1,250,000
Double reversible tram to Summit House 7,000,000
Expand parking lots and associated access 500,000
Detachable lift to east peak and trails 2,500,000
Chair 9 night skiing 400,000
Other improvements to the Resort 1,500,000
---------------
37,425,000

Boyne is not required to make improvements in the order listed.

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<PAGE>

Disbursement Procedures
for
Default Escrow Account

PROPOSED PROJECTS; APPROVAL COSTS

Whenever the Club determines that it will cause a capital project listed on
the above Project List to be undertaken at the Resort pursuant to Section
7.(b), the Club will deliver to the bank or trust company holding the Default
Escrow Account (the "Depository") and CMI a statement to that effect, a
description of such project and a reasonable proposed budget of Approval Costs
and Construction Costs (as defined below) for such project. If such project
is listed on the above Project List and the Approval Costs and Construction
Costs shown on the proposed budget do not exceed the funds on deposit in the
Default Escrow Account (plus any additional funds to be provided by the Club,
if the Club submits to the Depository and CMI reasonably satisfactory evidence
to establish that such funds are or will be available), such project will
thereupon become a "Proposed Project."

From time to time (no more frequently than monthly) the Club may submit to the
Depository (with a copy to CMI) a written itemized statement, signed by the
Club, itemizing the amount of the following costs that it has incurred in
connection with a Proposed Project ("Approval Costs") and that are unpaid, due
and payable, setting forth the names of the parties to whom the same are
payable:

design fees, costs incurred in obtaining Forest Service consents and other
permits, permit fees and legal expenses that are capitalized in accordance
with generally accepted accounting principles; and

reasonable costs and expenses incurred by the Club in supervising the
obtaining of such consents and permits.

The Depository will make payment from the Default Escrow Account of Approval
Costs so submitted directly to the parties to whom the same are payable,
subject to the conditions set forth below.

APPROVED PROJECTS; CONSTRUCTION COSTS

Whenever the Club determines that it will begin construction of a Proposed
Project, the Club will deliver to the Depository and CMI a statement to that
effect, evidence that it has obtained all required Forest Service approvals,
other permits and consents of third parties and in compliance with all
applicable laws, and a reasonable proposed budget of Construction Costs (as
defined below) for such Proposed Project. If the Construction Costs shown on
the proposed budget do not exceed the funds on deposit in the Default Escrow
Account (plus any additional funds to be provided by the Club, if the Club
submits to the Depository and CMI reasonably satisfactory evidence to
establish that such funds are or will be available), such Proposed Project
will thereupon become an "Approved Project."

From time to time (no more frequently than monthly) the Club may submit to the
Depository (with a copy to CMI) a written itemized statement, signed by the
Club, itemizing the amount of the following costs that it has incurred in
connection with an Approved Project ("Construction Costs") and that are
unpaid, due and payable, setting forth the names of the parties to whom the
same are payable:

expenditures that are capitalized in accordance with generally accepted
accounting principles, including without limitation costs sometimes
referred to as "soft costs" (such as, without limitation, design fees,
construction period interest); and

reasonable costs and expenses incurred by the Club in supervising the
construction of such Approved Project.

The Depository will make payment from the Default Escrow Account of
Construction Costs so submitted directly to the parties to whom the same are
payable, subject to the conditions set forth below. The Club will cause each
party who receives such a payment to acknowledge receipt of the same and (in
the case of

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<PAGE>

a payment to any contractor, subcontractor, materialman, supplier
or other person that might be entitled to a statutory lien) to return to the
Depository and CMI a customary form of lien release.

CONDITIONS TO PAYMENT

The Depository will make payments from the Default Escrow Account of Approval
Costs and Construction Costs only upon satisfaction of the following
conditions (or waiver of the same by CMI):

receipt by the Depository of bills, invoices, vouchers, statements,
payroll records, receipts or other documents evidencing the amount payable;

in the case of Construction Costs, receipt by the Depository of a receipt
and lien release for prior payments to the same party as described above;

in the case of Construction Costs paid before substantial completion of an
Approved Project, the Club has retained 10% (or another customary retainage)
of the amount payable on account of work done and supplies provided; and

in the case of payment of retainages, a certificate of substantial
completion from the contractor or architect (if any).

<PAGE>

EXHIBIT C

PLEDGE AGREEMENT

PLEDGE AGREEMENT dated as of _______ __, 1997 made by Boyne USA,
Inc., a Michigan corporation (the "Grantor"), for the benefit of Crystal
Mountain Founders' Club, a Washington nonprofit corporation (with its
successors and assigns, the "Secured Party").

WHEREAS, the Grantor has entered into a Reorganization Agreement and
Agreement and Plan of Merger (as the same may be amended from time to time,
the "Reorganization and Merger Agreement") dated as of December 6, 1996 among
Boyne, Crystal Mountain, Inc., a Washington corporation ("CMI"), and CM
Acquisition Corporation, a Washington corporation;

WHEREAS, on the terms and conditions set forth in the Reorganization
and Merger Agreement, CMI will become a wholly-owned subsidiary of Boyne at
the Merger Time (as defined therein); and

WHEREAS, pursuant to the Reorganization and Merger Agreement, the
Grantor and the Secured Party have entered into a Qualified Expenditure
Agreement dated as of _________ __, 1997 (the "Qualified Expenditure
Agreement") pursuant to which, among other things, the Grantor has agreed to
make "Qualified Expenditures" (as defined therein), and if an "Event of
Default" (as defined therein) occurs, the Secured Party would have certain
remedies against the Grantor, all as provided in the Qualified Expenditure
Agreement;

WHEREAS, pursuant to the Reorganization and Merger Agreement, the
Grantor has agreed to secure its obligations under the Qualified Expenditure
Agreement with a pledge of the shares of stock of CMI held by the Grantor;

NOW THEREFORE the parties hereto agree as follows:

1. DEFINITIONS. (a) Each of the following terms, when
capitalized, is used herein with the meaning set forth in the Qualified
Expenditure Agreement or Reorganization and Merger Agreement:

Default Escrow Account
Event of Default
Merger Time
Qualified Expenditure

(b) Each of the following terms, when capitalized, is used herein
with the meaning set forth in Section 2(a):

Collateral
Pledged Stock
Proceeds
Secured Obligations
Security Interest
UCC

2. THE PLEDGE AND SECURITY INTEREST. (a) In order to secure the
full and punctual payment of all amounts payable pursuant to, and the full
and punctual performance of all other obligations of the Grantor under, the
Qualified Expenditure Agreement and this Agreement (including without
limitation any obligation which accrues or arises after the commencement of
any case, proceeding or other action relating to the bankruptcy, insolvency
or reorganization of the Grantor) (the "Secured Obligations"), in accordance
with the terms thereof, effective at the Merger Time, the Grantor hereby
assigns and pledges to the Secured Party, and hereby grants to the Secured
Party a security interest (the "Security Interest") in, all of the Grantor's
right, title and interest in and to the following (the "Collateral"):

-1- Pledge Agreement

<PAGE>

(i) 100 shares of common stock of CMI, any other capital stock
required to be pledged to the Secured Party by Section 2.(b), and all of
the Grantor's rights and privileges with respect to such stock (the
"Pledged Stock"); and

(ii) all direct and indirect proceeds (as defined in the Uniform
Commercial Code as in effect in Washington State (the "UCC")) of the
Pledged Stock, and also all dividends and other payments and distributions
with respect thereto, all other profits, rentals and receipts with respect
thereto, and all payments, rights and property, in whatever form, arising
from the disposition in whole or in part of the Pledged Stock or any
option or other interest therein (the "Proceeds").

(b) If CMI at any time issues any additional or substitute shares of
capital stock of any class or series, the Grantor will immediately pledge and
deposit with the Secured Party certificates representing all such shares as
additional security for the Secured Obligations, as described in Section 3.(a).
All such shares constitute "Pledged Stock" and are subject to all provisions of
this Agreement.

(c) The Collateral is granted as security only, and the Secured Party
will not have any obligation or liability with respect to the Collateral by
reason of this Agreement, nor will the Secured Party be obligated to perform any
of the obligations or duties of the Grantor related to any of the Collateral.

3. REPRESENTATIONS AND WARRANTIES. The Grantor represents and
warrants to the Secured Party:

(a) The Grantor has delivered to the Secured Party a certificate or
certificates registered in the Grantor's name representing all of the Pledged
Stock, together with an endorsement in blank duly executed by the Grantor. The
Grantor has provided to the Secured Party a UCC financing statement naming the
Grantor as debtor and the Secured Party as secured party and identifying the
Collateral as collateral, in appropriate form for filing with the Department of
Licensing, UCC Division, of the State of Washington.

(b) At the Merger Time: (i) the Grantor will be the sole, true,
lawful and beneficial owner of the Pledged Stock, free and clear of any and all
claims, liens, charges, encumbrances and security interests (other than the
Security Interest in favor of the Secured Party) and with no restrictions on the
Grantor's rights of disposition pertaining thereto; (ii) the Pledged Stock will
be all of the issued and outstanding capital stock of CMI and (iii) all of the
Pledged Stock will be duly issued, fully paid and non-assessable.

(c) The Grantor has not performed any acts which might prevent the
Secured Party from enforcing any of the terms of this Agreement or which would
limit the Secured Party in any such enforcement.

(d) Upon the filing of the financing statement referred to in
subsection (a) with the office of the Department of Licensing, UCC Division, of
the State of Washington (or, if later, at the Merger Time), the Secured Party
will have a valid and perfected security interest in the Pledged Stock and the
Proceeds and will have "control" of the Pledged Stock within the meaning of
Section 8-106 of the UCC, subject to no prior claim, lien, charge, encumbrance
or security interest. No registration, recordation or filing with any
governmental body, agency or official is required in connection with the
execution or delivery of this Agreement or necessary for the validity or
enforceability hereof or for the perfection of the Security Interest, or (except
for compliance with federal and state securities laws) for the enforcement of
the Security Interest, except for filing of the financing statement referred to
in subsection (a) and filing of articles of merger in accordance with the
Reorganization and Merger Agreement.

4. FURTHER ASSURANCES; COVENANTS. (a) The Grantor agrees that it
will, at its expense and in such manner and form as the Secured Party may
require, execute, deliver, file and record any instrument and document, and take
any other action that may be necessary or desirable, or that the Secured Party
may request, in order to create, preserve, perfect or validate the Security
Interest, or to enable the Secured Party to exercise and enforce its rights
hereunder with respect to any of the Collateral. Without limiting the
generality of the foregoing, the Grantor will execute and file such financing or
continuation statements, or

Pledge Agreement -2-

<PAGE>

amendments thereto, and such other instruments or notices, as may be
reasonably necessary, or as the Secured Party may reasonably request.

(b) To the extent permitted by applicable law, the Grantor hereby
authorizes the Secured Party to execute and file, in the name of the Grantor
or otherwise, UCC financing statements and similar documents and instruments
(which may be carbon, photographic, photostatic or other reproductions of
this Agreement or of a financing statement relating to this Agreement) which
the Secured Party in its sole discretion may deem necessary or appropriate to
further perfect the Security Interest. The Grantor hereby waives the right
to receive copies of any documents or instruments so filed.

(c) The Grantor will furnish to the Secured Party from time to time
statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Secured Party
may request, all in reasonable detail, excluding any such information that
the Grantor is prohibited from furnishing to the Secured Party by applicable
law or contract.

(d) The Grantor will not change the location of its chief place of
business or name or establish any new place of business, unless it shall have
given the Secured Party 30 days' prior written notice.

(e) The Grantor will not sell, lease, exchange, assign or otherwise
dispose of, or grant any option with respect to, any Collateral.

5. RIGHT TO RECEIVE DISTRIBUTIONS ON, AND TO VOTE, COLLATERAL. (a)
So long as no Event of Default has occurred and is continuing, the Grantor
will have the right (i) to receive all dividends, interest and other payments
and distributions made upon or with respect to the Collateral and (ii) to
vote and to give consents, ratifications and waivers with respect to the
Pledged Stock.

(b) Upon the occurrence and during the continuance of an Event of
Default, the Secured Party will have the right (i) to receive and, during the
continuance of such Event of Default, to retain as Collateral hereunder all
dividends, interest and other payments and distributions made upon or with
respect to the Collateral and (ii) to vote and to give consents,
ratifications and waivers with respect to the Pledged Stock, and to cause the
Pledged Stock to be transferred of record to the Secured Party, and the
Grantor will take all such action as the Secured Party may deem necessary or
appropriate to give effect to such right.

6. GENERAL AUTHORITY. The Grantor hereby irrevocably appoints the
Secured Party its true and lawful attorney, with full power of substitution,
in the name of the Grantor, the Secured Party or otherwise, for the sole use
and benefit of the Secured Party, but at the expense of the Grantor, to the
extent permitted by law to exercise, at any time and from time to time while
an Event of Default has occurred and is continuing, all or any of the
following powers with respect to all or any of the Collateral:

(a) to ask, demand, sue for, collect, recover, receive and give
acquittance for any and all monies due or to become due upon or with
respect to any of the Collateral;

(b) to settle, compromise, compound, prosecute or defend any action
or proceeding with respect to any Collateral;

(c) to sell, transfer, assign or otherwise deal in or with the
Collateral or the proceeds or avails thereof, as fully and effectually as
if the Secured Party were the absolute owner thereof; and

(d) to take any action and to execute any instrument which the Secured
Party may deem necessary or advisable to accomplish the purposes of this
Agreement,

PROVIDED that the Secured Party will give the Grantor not less than ten days'
prior written notice of the time and place of any sale or other intended
disposition of any of the Collateral, except any Collateral which is perishable
or threatens to decline speedily in value or is of a type customarily sold on a
recognized market. The Secured Party and the Grantor agree that such notice
constitutes "reasonable notification" within the meaning of Section 9-504(3) of
the UCC.

7. REMEDIES UPON EVENT OF DEFAULT. If an Event of Default has
occurred and is continuing, the Secured Party may exercise all the rights of a
secured party under the UCC (whether or not in effect in the jurisdiction where
such rights are exercised) and, in addition, the Secured Party may, without
being

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<PAGE>

required to give any notice, except as herein provided or as may be required
by mandatory provisions of law, apply the cash, if any, then held by it as
Collateral as specified in Section 10 and sell the Collateral or any part
thereof at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery, and at
such price or prices as the Secured Party may deem satisfactory, and apply
the proceeds thereof as specified in Section 10. The Secured Party may be
the purchaser of any or all of the Collateral so sold at any public sale (or,
if the Collateral is of a type customarily sold in a recognized market or is
of a type which is the subject of widely distributed standard price
quotations, at any private sale). The Secured Party is authorized, in
connection with any such sale, if it deems it advisable to do so, (a) to
restrict the prospective bidders on or purchasers of any of the Pledged Stock
to a limited number of sophisticated investors who will represent and agree
that they are purchasing for their own account for investment and not with a
view to the distribution or sale of any of such Pledged Stock, (b) to cause
to be placed on certificates for any or all of the Pledged Stock or on any
other securities pledged hereunder a legend to the effect that such security
has not been registered under the Securities Act of 1933 and may not be
disposed of in violation of the provision of said Act, and (c) to impose such
other limitations or conditions in connection with any such sale as the
Secured Party deems necessary or advisable in order to comply with said Act
or any other law. The Grantor covenants and agrees that it will execute and
deliver such documents and take such other action as the Secured Party deems
necessary or advisable in order that any such sale may be made in compliance
with law. Upon any such sale the Secured Party will have the right to
deliver, assign and transfer to the purchaser thereof the Collateral so sold.
Each purchaser at any such sale will hold the Collateral so sold absolutely
and free from any claim or right of whatsoever kind, including any equity or
right of redemption of the Grantor which may be waived, and the Grantor, to
the extent permitted by law, hereby specifically waives all rights of
redemption, stay or appraisal which it has or may have under any law now
existing or hereafter adopted. The notice (if any) of such sale required by
Section 6 will (A) in case of a public sale, state the time and place fixed
for such sale, (B) in case of sale at a broker's board or on a securities
exchange, state the board or exchange at which such sale is to be made and
the day on which the Collateral, or the portion thereof so being sold, will
first be offered for sale at such board or exchange, and (C) in the case of a
private sale, state the day after which such sale may be consummated. Any
such public sale will be held at such time or times within ordinary business
hours and at such place or places as the Secured Party may fix in the notice
of such sale. At any such sale the Collateral may be sold in one lot as an
entirety or in separate parcels, as the Secured Party may determine. The
Secured Party will not be obligated to make any such sale pursuant to any
such notice. The Secured Party may, without notice or publication, adjourn
any public or private sale or cause the same to be adjourned from time to
time by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the same may be so adjourned. In
case of any sale of all or any part of the Collateral on credit or for future
delivery, the Collateral so sold may be retained by the Secured Party until
the selling price is paid by the purchaser thereof, but the Secured Party
will not incur any liability in case of the failure of such purchaser to take
up and pay for the Collateral so sold and, in case of any such failure, such
Collateral may again be sold upon like notice. The Secured Party, instead of
exercising the power of sale herein conferred upon it, may proceed by a suit
or suits at law or in equity to foreclose the Security Interest and sell the
Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction. Despite the consummation of any such sale
or foreclosure, the Grantor will remain liable for any deficiency with
respect to the Secured Obligations which remain outstanding following any
such sale.

For the purpose of enforcing any and all rights and remedies under
this Agreement the Secured Party may (i) require the Grantor to, and the
Grantor agrees that it will, at its expense and upon the request of the
Secured Party, forthwith assemble all or any part of the Collateral as
directed by the Secured Party and make it available at a place designated by
the Secured Party which is, in its opinion, reasonably convenient to the
Secured Party and the Grantor, whether at the premises of the Grantor or
otherwise, (ii) to the extent permitted by applicable law, enter, with or
without process of law and without breach of the peace, any premise where any
of the Collateral is or may be located, and without charge or liability to it
seize and remove such Collateral from such premises, (iii) have access to and
use the Grantor's books

Pledge Agreement -4-

<PAGE>

and records relating to the Collateral and (iv) prior to the disposition of
the Collateral, store or transfer it without charge in or by means of any
storage or transportation facility owned or leased by the Grantor, process,
repair or recondition it or otherwise prepare it for disposition in any
manner and to the extent the Secured Party deems appropriate and, in
connection with such preparation and disposition, use without charge any
trademark, trade name, copyright, patent or technical process used by the
Grantor.

8. EXPENSES. The Grantor agrees that it will forthwith upon
demand pay to the Secured Party:

(i) the amount of any taxes which the Secured Party may have been
required to pay by reason of the Security Interest;

(ii) the amount of any and all out-of-pocket expenses, including the
fees and disbursements of counsel and of any other experts, which the
Secured Party may incur in connection with (A) the administration or
enforcement of this Agreement, including such expenses as are incurred to
preserve the value of the Collateral and the validity, perfection, rank and
value of the Security Interest, (B) the collection, sale or other
disposition of any of the Collateral, (C) the exercise by the Secured Party
of any of the rights conferred upon it hereunder or (D) any Event of
Default or event that with notice, the passage of time or both would be an
Event of Default.

Any such amount not paid on demand will bear interest at 10% per annum.

9. LIMITATION ON DUTY OF SECURED PARTY IN RESPECT OF COLLATERAL.
The powers conferred on the Secured Party hereunder are solely to protect its
interest in the Collateral and will not impose any duty upon it to exercise
any such powers. Beyond the exercise of reasonable care in the custody
thereof, the Secured Party will have no duty as to any Collateral in its
possession or control or in the possession or control of any agent or bailee
or any income thereon or as to the preservation of rights against prior
parties or any other rights pertaining thereto. The Secured Party will be
deemed to have exercised reasonable care in the custody and preservation of
the Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which it accords its own property, and will not
be liable or responsible for any loss or damage to any of the Collateral, or
for any diminution in the value thereof, by reason of the act or omission of
any agent or bailee selected by the Secured Party in good faith.

10. APPLICATION OF PROCEEDS. Upon the occurrence and during the
continuance of an Event of Default, the proceeds of any sale of, or other
realization upon, all or any part of the Collateral and any cash held will be
applied by the Secured Party in the following order of priorities:

FIRST, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Secured
Party, and all expenses, liabilities and advances incurred or made by the
Secured Party in connection therewith;

SECOND, to payment of all Secured Obligations that constitute amounts
payable by the Grantor to the Secured Party (including without limitation
expenses of arbitration that may be payable by the Grantor to the Secured
Party pursuant to Section 8(d) of the Qualified Expenditure Agreement and
litigation expenses that may be payable by the Grantor to the Secured Party
pursuant to Section 10(c) of the Qualified Expenditure Agreement), until
all Secured Obligations that constitute amounts payable by the Grantor to
the Secured Party have been paid in full;

THIRD, to payment into the Default Escrow Account of the amount
required to be paid into the Default Escrow Account by the Grantor pursuant
to Section 7(b) of the Qualified Expenditure Agreement, such funds to be
held in the Default Escrow Account and disbursed as set forth in the
Qualified Expenditure Agreement; and

FINALLY, to payment to the Grantor or its successors or assigns, or as
a court of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.

11. TERMINATION. When the Grantor has performed all of its
obligations under the Qualified Expenditure Agreement, by making the full amount
of Qualified Expenditures required thereby and paying

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<PAGE>

all other amount payable thereunder, the Security Interest will terminate and
all rights to the Collateral will revert to the Grantor. Upon any such
termination of the Security Interest the Secured Party will execute and
deliver to the Grantor such documents as the Grantor may reasonably request
to evidence the termination of the Security Interest.

12. MISCELLANEOUS. (a) NOTICES. All notices, requests and other
communications to any party hereunder will be in writing (including facsimile
transmission or similar writing) and will be given, and will be effective, as
set forth in the Qualified Expenditure Agreement.

(b) AMENDMENTS; NO WAIVERS. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the Grantor and the Secured Party or, in
the case of a waiver, by the party against whom the waiver is to be effective.
No failure or delay by the Secured Party in exercising any right, power or
privilege hereunder will operate as a waiver thereof nor will any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
provided herein and in the Qualified Expenditure Agreement will be cumulative
and not exclusive of any rights or remedies provided by law.

(c) SUCCESSORS AND ASSIGNS. This Agreement will inure to the benefit
of and be binding upon each of the parties hereto and their respective
successors, but no party hereto may assign, delegate or otherwise transfer any
of its obligations or rights under this Agreement.

(d) NO THIRD-PARTY BENEFICIARIES. No person or entity is intended to
be a third-party beneficiary of any agreement contained herein or otherwise to
be benefitted hereby. This Agreement is enforceable only by the Secured Party.
Without limiting the generality of the foregoing, the Grantor does not owe any
duty directly to any member of the Secured Party and no member of the Secured
Party is entitled to enforce this Agreement against the Grantor.

(e) GOVERNING LAW. This Agreement will be construed in accordance
with and governed by the laws of the State of Washington, except as otherwise
required by mandatory provisions of law and except to the extent that remedies
provided by the laws of any jurisdiction other than Washington State are
governed by the laws of such jurisdiction.

(f) HEADINGS AND CAPTIONS. The headings and captions in this
Agreement are included for convenience of reference only and will be ignored in
the construction or interpretation hereof.

(g) SEVERABILITY. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof will remain in full force and effect in
such jurisdiction and will be liberally construed in favor of the Secured
Party in order to carry out the intentions of the parties hereto as nearly as
may be possible; and (ii) the invalidity or unenforceability of any provision
hereof in any jurisdiction will not affect the validity or enforceability of
such provision in any other jurisdiction.

IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly
executed as of the day and year first above written.

BOYNE USA, INC.

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

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<PAGE>

CHAPTER 23B.13
DISSENTERS' RIGHTS

SECTIONS

23B.13.010 Definitions.
23B.13.020 Right to dissent.
23B.13.030 Dissent by nominees and beneficial owners.
23B.13.200 Notice of dissenters' rights.
23B.13.210 Notice of intent to demand payment.
23B.13.220 Dissenters' notice.
23B.13.230 Duty to demand payment.
23B.13.240 Share restrictions.
23B.13.250 Payment.
23B.13.260 Failure to take action.
23B.13.270 After-acquired shares.
23B.13.280 Procedure if shareholder dissatisfied with payment or offer.
23B.13.300 Court action.
23B.13.310 Court costs and counsel fees.

23B.13.010 DEFINITIONS. As used in this chapter:

(1) "Corporation" means the issuer of the shares held by a dissenter before
the corporate action, or the surviving or acquiring corporation by merger or
share exchange of that issuer.

(2) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under RCW 23B.13.020 and who exercises that right when and in
the manner required by RCW 23B.13.200 through 23B.13.280.

(3) "Fair value," with respect to a dissenter's shares, means the value of
the shares immediately before the effective date of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable.

<PAGE>

DISSENTERS' RIGHTS 23B.13.010

(4) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair and
equitable under all the circumstances.

(5) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares to
the extent of the rights granted by a nominee certificate on file with a
corporation.

(6) "Beneficial shareholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record shareholder.

(7) "Shareholder" means the record shareholder or the beneficial
shareholder. [1989 c 165 Section 140.]

23B.13.020 RIGHT TO DISSENT. (1) A shareholder is entitled to dissent
from, and obtain payment of the fair value of the shareholder's shares in the
event of, any of the following corporate actions:

(a) Consummation of a plan of merger to which the corporation is a party
(i) if shareholder approval is required for the merger by RCW 23B.11.030,
23B.11.080, or the articles of incorporation and the shareholder is entitled to
vote on the merger, or (ii) if the corporation is a subsidiary that is merged
with its parent under RCW 23B.11.040;

(b) Consummation of a plan of share exchange to which the corporation is a
party as the corporation whose shares will be acquired, if the shareholder is
entitled to vote on the plan;

(c) Consummation of a sale or exchange of all, or substantially all, of the
property of the corporation other than in the usual and regular course of
business, if the shareholder is entitled to vote on the sale or exchange,
including a sale in dissolution, but not including a sale pursuant to court
order or a sale for cash pursuant to a plan by which all or substantially all of
the net proceeds of the sale will be distributed to the shareholders within one
year after the date of sale;

(d) An amendment of the articles of incorporation that materially reduces
the number of shares owned by the shareholder to a fraction of a share if the
fractional share so created is to be acquired for cash under RCW 23B.06.040; or

(e) Any corporate action taken pursuant to a shareholder vote to the extent
the articles of incorporation, bylaws, or a resolution of the board of directors
provides that voting or nonvoting shareholders are entitled to dissent and
obtain payment for their shares.

(2) A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this chapter may not challenge the corporate action
creating the shareholder's entitlement unless the action fails to comply with
the procedural requirements imposed by this title, RCW 25.10.900 through
25.10.955, the articles of incorporation, or the bylaws, or is fraudulent with
respect to the shareholder or the corporation.

(3) The right of a dissenting shareholder to obtain payment of the fair
value of the shareholder's shares shall terminate upon the occurrence of any one
of the following events:

(a) The proposed corporate action is abandoned or rescinded;

(b) A court having jurisdiction permanently enjoins or sets aside
the corporate action; or

(c) The shareholder's demand for payment is withdrawn with the written
consent of the corporation. [1991 c 269 Section 37; 1989 c 165 Section 141.]

23B.13.030 DISSENT BY NOMINEES AND BENEFICIAL OWNERS. (1) A record
shareholder may assert dissenters' rights as to fewer than all the shares
registered in the shareholder's name only if the shareholder dissents with
respect to all shares beneficially owned by any one person and notifies the
corporation in writing of the name and address of each person on whose behalf
the shareholder asserts dissenters' rights. The rights of a partial
dissenter under this subsection are determined as if the shares as to which
the dissenter dissents and the dissenter's other shares were registered in
the names of different shareholders.

(2) A beneficial shareholder may assert dissenters' rights as to shares
held on the beneficial shareholder's behalf only if:

(a) The beneficial shareholder submits to the corporation the record
shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and

(b) The beneficial shareholder does so with respect to all shares of which
such shareholder is the beneficial shareholder or over which such shareholder
has power to direct the vote. [1989 c 165 Section 142.]

23B.13.200 NOTICE OF DISSENTERS' RIGHTS. (1) If proposed corporate
action creating dissenters' rights under RCW 23B.13.020 is submitted to a
vote at a shareholders' meeting, the meeting notice must state that
shareholders are or may be entitled to assert dissenters' rights under this
chapter and be accompanied by a copy of this chapter.

(2) If corporate action creating dissenters' rights under RCW 23B.13.020
is taken without a vote of shareholders, the corporation, within ten days
after [the] effective date of such corporate action, shall notify in writing
all shareholders entitled to assert dissenters' rights that the action was
taken and send them the dissenters' notice described in RCW 23B.13.220.
[1989 c 165 Section 143.]

23B.13.210 NOTICE OF INTENT TO DEMAND PAYMENT. (1) If proposed corporate
action creating dissenters' rights under RCW 23B.13.020 is submitted to a
vote at a shareholders' meeting, a shareholder who wishes to assert
dissenters' rights must (a) deliver to the corporation before the vote is
taken written notice of the shareholder's intent to demand payment for the
shareholder's shares if the proposed action is effected, and (b) not vote
such shares in favor of the proposed action.

(2) A shareholder who does not satisfy the requirements of subsection (1)
of this section is not entitled to payment for the shareholder's shares under
this chapter. [1989 c 165 Section 144.]

23B.13.220 DISSENTERS' NOTICE. (1) If proposed corporate action creating
dissenters' rights under RCW

[Title 23B RCW--page 37]
<PAGE>

23B.13.020 is authorized at a shareholders' meeting, the corporation shall
deliver a written dissenters' notice to all shareholders who satisfied the
requirements of RCW 23B.13.210.

(2) The dissenters' notice must be sent within ten days after the effective
date of the corporate action, and must:

(a) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;

(b) Inform holders of uncertificated shares to what extent transfer of the
shares will be restricted after the payment demand is received;

(c) Supply a form for demanding payment that includes the date of the first
announcement to news media or to shareholders of the terms of the proposed
corporate action and requires that the person asserting dissenters' rights
certify whether or not the person acquired beneficial ownership of the shares
before that date;

(d) Set a date by which the corporation must receive the payment demand,
which date may not be fewer than thirty nor more than sixty days after the
date the notice in subsection (1) of this section is delivered; and

(e) Be accompanied by a copy of this chapter. [1989 c 165 Section 145.]

23B.13.230 DUTY TO DEMAND PAYMENT. (1) A shareholder sent a dissenters'
notice described in RCW 23B.13.220 must demand payment, certify whether the
shareholder acquired beneficial ownership of the shares before the date
required to be set forth in the dissenters' notice pursuant to RCW
23B.13.220(2)(c), and deposit the shareholder's certificates in accordance
with the terms of the notice.

(2) The shareholder who demands payment and deposits the shareholder's
share certificates under subsection (1) of this section retains all other rights
of a shareholder until the proposed corporate action is effected.

(3) A shareholder who does not demand payment or deposit the shareholder's
share certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for the shareholder's shares under this
chapter. [1989 c 165 Section 146.]

23B.13.240 SHARE RESTRICTIONS. (1) The corporation may restrict the
transfer of uncertificated shares from the date the demand for their payment
is received until the proposed corporate action is effected or the
restriction is released under RCW 23B.13.260.

(2) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until the
effective date of the proposed corporate action. [1989 c 165 Section 147.]

23B.13.250 PAYMENT. (1) Except as provided in RCW 23B.13.270, within
thirty days of the later of the effective date of the proposed corporate
action, or the date the payment demand is received, the corporation shall pay
each dissenter who complied with RCW 23B.13.230 the amount the corporation
estimates to be the fair value of the shareholder's shares, plus accrued
interest.

(2) The payment must be accompanied by:

(a) The corporation's balance sheet as of the end of a fiscal year ending
not more than sixteen months before the date of payment, an income statement for
that year, a statement of changes in shareholders' equity for that year, and the
latest available interim financial statements, if any;

(b) An explanation of how the corporation estimated the fair value of the
shares;

(d) A statement of the dissenter's right to demand payment under RCW
23B.13.280; and

(e) A copy of this chapter. [1989 c 165 Section 148.]

23B.13.260 FAILURE TO TAKE ACTION. (1) If the corporation does not effect
the proposed action within sixty days after the date set for demanding
payment and depositing share certificates, the corporation shall return the
deposited certificates and release any transfer restrictions imposed on
uncertificated shares.

(2) If after returning deposited certificates and releasing transfer
restrictions, the corporation wishes to undertake the proposed action, it must
send a new dissenters' notice under RCW 23B.13.220 and repeat the payment demand
procedure. [1989 c 165 Section 149.]

23B.13.270 AFTER-ACQUIRED SHARES. (1) A corporation may elect to
withhold payment required by RCW 23B.13.250 from a dissenter unless the
dissenter was the beneficial owner of the shares before the date set forth in
the dissenters' notice as the date of the first announcement to news media or
to shareholders of the terms of the proposed corporate action.

(2) To the extent the corporation elects to withhold payment under
subsection (1) of this section, after taking the proposed corporate action, it
shall estimate the fair value of the shares, plus accrued interest, and shall
pay this amount to each dissenter who agrees to accept it in full satisfaction
of the dissenter's demand. The corporation shall send with its offer an
explanation of how it estimated the fair value of the shares, an explanation of
how the interest was calculated, and a statement of the dissenter's right to
demand payment under RCW 23B.13.280. [1989 c 165 Section 150.]

23B.13.280 PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.
(1) A dissenter may notify the corporation in writing of the dissenter's own
estimate of the fair value of the dissenter's shares and amount of interest
due, and demand payment of the dissenter's estimate, less any payment under
RCW 23B.13.250, or reject the corporation's offer under RCW 23B.13.270 and
demand payment of the dissenter's estimate of the fair value of the
dissenter's shares and interest due, if:

(a) The dissenter believes that the amount paid under RCW 23B.13.250 or
offered under RCW 23B.13.270 is less than the fair value of the dissenter's
shares or that the interest due is incorrectly calculated;

(b) The corporation fails to make payment under RCW 23B.13.250 within sixty
days after the date set for demanding payment; or

[Title 23B RCW--page 38]

<PAGE>

DISSENTERS' RIGHTS 23B.13.280

transfer restrictions imposed on uncertificated shares within sixty days
after the date set for demanding payment.

(2) A dissenter waives the right to demand payment under this section
unless the dissenter notifies the corporation of the dissenter's demand in
writing under subsection (1) of this section within thirty days after the
corporation made or offered payment for the dissenter's shares.
[1989 c 165 Section 151.]

23B.13.300 COURT ACTION. (1) If a demand for payment under RCW
23B.13.280 remains unsettled, the corporation shall commence a proceeding
within sixty days after receiving the payment demand and petition the court
to determine the fair value of the shares and accrued interest. If the
corporation does not commence the proceeding within the sixty-day period, it
shall pay each dissenter whose demand remains unsettled the amount demanded.

(2) The corporation shall commence the proceeding in the superior court of
the county where a corporation's principal office, or, if none in this state,
its registered office, is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence the proceeding in
the county in this state where the registered office of the domestic corporation
merged with or whose shares were acquired by the foreign corporation was
located.

(3) The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled, parties to the proceeding as in an
action against their shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.

(4) The corporation may join as a party to the proceeding any shareholder
who claims to be a dissenter but who has not, in the opinion of the corporation,
complied with the provisions of this chapter. If the court determines that such
shareholder has not complied with the provisions of this chapter, the
shareholder shall be dismissed as a party.

(5) The jurisdiction of the court in which the proceeding is commenced
under subsection (2) of this section is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the powers
described in the order appointing them, or in any amendment to it. The
dissenters are entitled to the same discovery rights as parties in other civil
proceedings.

(6) Each dissenter made a party to the proceeding is entitled to judgment
(a) for the amount, if any, by which the court finds the fair value of the
dissenter's shares, plus interest, exceeds the amount paid by the corporation,
or (b) for the fair value, plus accrued interest, of the dissenter's
after-acquired shares for which the corporation elected to withhold payment
under RCW 23B.13.270. [1989 c 165 Section 152.]

23B.13.310 COURT COSTS AND COUNSEL FEES. (1) The court in a proceeding
commenced under RCW 23B.13.300 shall determine all costs of the proceeding,
including the reasonable compensation and expenses of appraisers appointed by
the court. The court shall assess the costs against the corporation, except
that the court may assess the costs against all or some of the dissenters, in
amounts the court finds equitable, to the extent the court finds the
dissenters acted arbitrarily, vexatiously, or not in good faith in demanding
payment under RCW 23B.13.280.

(2) The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:

(a) Against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the requirements
of RCW 23B.13.200 through 23B.13.280; or

(b) Against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses are
assessed acted arbitrarily, vexatiously, or not in good faith with respect to
the rights provided by chapter 23B.13 RCW.

(3) If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to these counsel reasonable fees to be paid out of the amounts awarded the
dissenters who were benefited. [1989 c 165 Section 153.]

<PAGE>

APPENDIX C

[LETTERHEAD]

March 7, 1997

To The Board of Directors of Crystal Mountain, Inc.
c/o Mr. Lawrence Hard, Secretary
LeSourd & Patten, P.S.
2400 Columbia Center
701 Fifth Avenue
Seattle, Washington 98104-7095

RE: FAIRNESS OPINION - ACQUISITION OF CRYSTAL MOUNTAIN, INC.
BY BOYNE USA, INC.

Ladies and Gentlemen:

In conjunction with the proposed acquisition of the Crystal Mountain, Inc.
("Crystal" or "the Company") by Boyne USA, Inc. ("Boyne"), you have requested
Houlihan Valuation Advisors ("HVA") to express an opinion (the "Opinion")
relative to the fairness to the public shareholders of the Company from a
financial point of view. We understand that a transaction is contemplated (the
"Transaction") whereby Boyne will effectively acquire all of the issued and
outstanding Class A and Class B common stock of Crystal under the conditions and
for the consideration described in the Amended and Restated Letter of Intent of
October 11, 1996 between Crystal and Boyne and the Reorganization Agreement and
Agreement and Plan of Merger dated as of December 6, 1996 among Crystal
Mountain, Inc., Boyne USA, Inc. and CM Acquisition Corporation.

ENGAGEMENT OF HVA
The Board of Directors of Crystal contacted HVA regarding the Transaction in
October 1996 to provide an Opinion as to whether the terms of the Transaction
are fair, from a financial point of view, to Crystal shareholders.

Under the terms of the engagement, HVA will receive a fee for the preparation of
the Opinion. Additionally, Crystal agreed to reimburse HVA for its reasonable
out-of-pocket expenses related to this engagement. The fees payable to HVA are
not contingent in whole or in part upon the approval or implementation of the
Transaction or dependent upon the conclusion reached by HVA in the Opinion. HVA
has not been engaged to prepare a formal valuation of either Crystal or Boyne or
any of their material assets.

QUALIFICATIONS OF HVA
HVA is a national business valuation and financial consulting firm. HVA and its
predecessor firm have been appraising closely held companies for a variety of
reasons throughout the United States since 1975. The principals and associates
of HVA are highly qualified financial professionals who have strong credentials,
including a Ph.D. in Finance; Certified Public Accountants; Chartered Financial
Analysts; Masters Degree holders in Economics, Business Administration, and

_______________________________________________________________________________
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<PAGE>

Mathematics; and Accredited Senior Appraisers. In addition, Frederic Jones,
the undersigned, has extensive experience in financing, developing, operating
and valuing ski resort businesses throughout the United States. He served in
executive level positions at four major ski resorts over an eighteen year
period and has been a principal in HVA, providing valuation and financial
consulting services to the ski resort industry, for over nine years.

HVA has conducted thousands of valuations of companies in a number of
industries for a wide variety of purposes. In addition, HVA has issued
numerous fairness opinions for a broad spectrum of transactions.

DESCRIPTION OF THE TRANSACTION
On July 31, 1996, the Company signed a letter of intent to sell its net
assets to Boyne, a privately held Michigan-based ski area and resort operator
(subsequently changed to an acquisition by Boyne of all of the outstanding
common stock of Crystal in the Amended and Restated Letter of Intent of
October 11, 1996). Prior to the Transaction, Crystal will declare a
distribution to holders of Class A Shares of, at the election of each holder
of Class A Shares, either cash or one or more memberships in the Crystal
Mountain Founders' Club ("the Club"), a Washington nonprofit corporation, at
the following rates:
(i) one Membership Unit in the Club per Class A share or
(ii) $154.48 in cash per Class A share

Membership in the Club will entitle those Class A shareholders electing to
receive the distribution payment in the form of Club Memberships to continue
to receive lift ticket privileges in perpetuity on a similar basis to
Crystal's past practice of establishing lift ticket accounts for Class A
stockholders.

Subsequent to the payment of the distribution by Crystal to current Class A
shareholders, Boyne will purchase all of the issued and outstanding shares of
Class A (absent the lift ticket privileges) and Class B common stock for
$65.52 per share. As an additional inducement for selling the common stock,
Boyne agrees to expend not less than $10 million for specific on-mountain
capital improvements over a ten-year period, not less than $6 million of
which is to be expended in the first five years following the close of the
transaction.

Prior to the Transaction, the Company had 26,609 shares of Class A common stock
issued and outstanding and 710 of Class B common stock issued and outstanding.

DESCRIPTION OF CRYSTAL
Crystal owns and operates a year-round mountain resort facility in the Cascade
Mountains of Washington State. The Company's facilities are located on land
owned by the U.S. Government and operations are carried out under a U.S. Forest
Service Special Use Permit. The resort has two distinct seasons with skiing and
other winter activities generally occurring from November through April and
summer operations occurring from June through September. The Company's operating
results are highly dependent upon weather conditions. Poor weather conditions
during the past three ski seasons have been the primary cause of recurring
operating losses. The losses have significantly reduced resources available to
fund capital improvements. The ability of the Company to continue to upgrade its
facilities and remain competitive is essential to the financial viability of the
Company.

_______________________________________________________________________________
PAGE 2

<PAGE>

DESCRIPTION OF BOYNE
Boyne is a privately held company based in Michigan. It has owned and operated
ski areas since 1948 and is currently the owner of four ski areas (Brighton,
Utah; Big Sky, Montana; Boyne Mt., Michigan; and Boyne Highlands, Michigan). In
addition, Boyne operates a scenic chair lift in Gattlenburg, Tenn. and eight
championship golf courses.

ANALYSIS LEADING TO CONCLUSIONS
In connection with this Opinion, we have made such reviews, analyses and
inquiries as we have deemed necessary and appropriate under the circumstances.
In conducting our analysis and forming our Opinion, we have reviewed a number of
documents, including but not limited to:

1. Audited financial statements for Crystal Mountain, Inc. for the fiscal
years ended 1992-1996

2. Unaudited financial statements for Boyne USA, Inc. for the fiscal years
ended 1992-1996

3. United States Forest Service permit for the operation of Crystal
Mountain, Inc. on USFS lands

4. Certain documentation related to the Transaction, including the Letter
of Intent between Crystal and Boyne dated July 31, 1996 and the Amended
and Restated Letter of Intent between Crystal and Boyne dated October
11, 1996, and the Reorganization Agreement and Agreement and Plan of
Merger dated as of December 6, 1996 among Crystal Mountain, Inc.,
Boyne USA, Inc. and CM Acquisition Corporation (collectively referred
to as the "Letter of Intent")

5. Analysis of Crystal Stockholder lift ticket privilege prepared by
LeSourd & Patten, P.S., dated February 21, 1995

6. Agreement between Bank of America NW, NA (doing business as Seafirst
Bank) and Crystal Mountain, Inc. dated June 5, 1996, modifying the loan
agreement between the parties dated September 14, 1995

7. Loan agreement (Second Amended and Restated Loan Agreement) between
Crystal Mountain, Inc. and Bank of America NW, NA dated September 14,
1995

8. Form 10-KSB for Crystal Mountain, Inc. for the seven month period
ended April 30, 1996 and the fiscal years ended September 30, 1995.

9. Form 10QSB for Crystal Mountain, Inc. for the quarters ended December
31, 1995, March 31, 1996 and July 31, 1996

10. Dun & Bradstreet report on Boyne USA, Inc. dated August 28, 1996

11. Correspondence from Stephen Barrett, Attorney for Boyne, to Lawrence
Hard, Attorney for Crystal, responding to questions regarding
ownership, litigation, corporate good standing and financial data
relative to Boyne

12. Consent and Agreement for Stockholders of Boyne USA, Inc. dated May 27,
1990

13. Summary of issued and outstanding common stock of Boyne, which was
prepared and provided by Boyne

14. Crystal 1996-97 Budget Scenarios, which were prepared and provided by
Crystal

_______________________________________________________________________________
PAGE 3

<PAGE>

15. Price and volume information for the Company's publicly traded common
stock, as provided by Mr. Martin Nelson, market maker for Crystal
common stock.

16. Certain other publicly available data, including data on recent
transaction involving other publicly traded ski resort companies.

In addition to a review of the above described documents, the following
analytical procedures were conducted in arriving at our Opinion:

1. Met with representatives of the Company at the Company's administrative
offices in Enumclaw, Washington and conducted due diligence
discussions regarding matters pertinent to our analysis. Inquiries
were made with certain officers of the Company who have senior
responsibility for operating matters regarding: (i) the operations,
financial condition, future prospects and projected operations and
performance of the Company; (ii) whether management is aware of any
events or conditions which might cause any of the assumptions set
forth in this Opinion to be incorrect: and (iii) whether management is
aware of any material change in the Company's assets, financial
condition or business outlook since April 30, 1996, the date of the
Company's most recent audited financial statements, or September 30,
1996, the date of the Company's most recent internally generated
financial statements.

2. Met (via telephone) with senior management representatives of Boyne and
conducted due diligence discussions regarding matters pertinent to our
analysis. Inquiries were made of certain Boyne officers who have
senior responsibility for operating matters regarding: (i) the
operations, financial condition, future prospects and projected
operations and performance of Boyne; (ii) whether management is aware
of any events or conditions which might cause any of the assumptions
set forth in this Opinion to be incorrect: (iii) whether management is
aware of any material change in Boyne's assets, financial condition or
business outlook since May 31, 1996, the date of the Company's most
recent unaudited financial statements, (iv) plans for the management
and operation of Crystal following the acquisition, (v) status of the
updating of the U.S. Forest Service Master Plan and associated
Environmental Impact Statement, (vi) plans for the upgrading and
expansion of skiing and support facilities at Crystal; (vii) Boyne's
financial ability to meet its capital commitment per the Agreement,
(viii) opportunities at Crystal to expand business; (ix) synergies
between Boyne and Crystal, and (x) other matters regarding Boyne's
plans for Crystal Mountain and Boyne's ability to carry out those
plans.

3. Discussion with Mr. Martin Nelson, a broker/dealer in the Company's
Class A common stock, regarding recent transactions in the public
market of the stock

4. Discussed with Mr. Larry Donovan, Winter Sports Specialist, Supervisors
Office of the Mt. Baker/Snoqualmie National Forest the current status
of the Crystal Master Plan filed with the Forest Service, the
procedure of updating the Master Plan with the Forest Service,
improvements and expansion to existing mountain facilities and
construction of additional facilities envisioned and allowed under the
current Master Plan filed with the Forest Service, and any outstanding
issues of significance between Crystal and the Forest Service.

5. Certain financial forecasts and accompanying assumptions prepared by
Company management for the fiscal years ending April 30, 1997 through
2001 were reviewed, and the

_______________________________________________________________________________
PAGE 4

<PAGE>

assumptions underlying such forecasts were discussed with an officer of
the Company who has responsibility for preparing such forecasts.

6. Generally recognized financial analysis and valuation procedures were
undertaken to ascertain the financial condition of the Company as well
as to estimate its fair value.

7. Conducted such other studies, analyses and inquiries as we have deemed
appropriate.

ASSUMPTIONS AND LIMITING CONDITIONS
Pursuant to our engagement, and, with the approval of the Crystal Directors,
HVA has relied upon and has assumed the completeness, accuracy and fair
presentation of all the financial and other information, data, advice,
opinions, and representations obtained by it from public sources, contained
in the Letter of Intent, or provided to it by Crystal and Boyne or their
respective subsidiaries, affiliates and advisors, or otherwise pursuant to
our engagement. HVA has assumed that the business plans, financial estimates
and projections provided to it by the managements of Crystal and Boyne
represent their best estimates of the most probable results for their
respective companies for the periods presented therein. Subject to the
exercise of professional judgment and except as expressly described herein,
HVA has not attempted to verify independently the accuracy or completeness of
any such information, data, advice, opinions, representations, business
plans, forecasts and projections and accordingly, we make no representations
or warranties nor do we express any opinion regarding the accuracy or
reasonableness of such.

Crystal and Boyne have each represented to HVA, in certificates dated as at
the date hereof, amongst other things, that the information, data and other
material provided to HVA were at the date provided, complete, true and
correct in all material respects and did not contain any untrue statement of
material fact or omit to state any material fact necessary to make the
statement therein not misleading in light of the circumstances in which such
statements were made. Each of Crystal and Boyne has represented to HVA that
since the date that any information, data or other material were provided to
HVA, except as disclosed in writing to us, to the best of their knowledge,
information and belief after reasonable inquiry there has been no material
change, financial or otherwise in the business, operations or prospects of
either Boyne or Crystal which would reasonably be expected to have a material
effect on the Opinion. Further, it was represented to HVA, with respect to
any portions of the information that constitute forecasts, projections or
estimates, such forecasts, projections or estimates were prepared using the
assumptions which in the reasonable belief of Crystal and Boyne are
reasonable in the circumstances, and are not misleading in any material
respect.

In our analysis and in connection with the preparation of the Opinion, HVA
reviewed the long-range financial projections provided by Crystal, Boyne and
their advisors, which reflect numerous assumptions regarding the impact of
general economic and industry conditions on the future financial results of
each of these companies. While HVA believes the assumptions used are
appropriate in the circumstances, many are beyond the control of any party
involved in the Transaction. The Opinion is not intended to be and does not
constitute a recommendation to any shareholder of Crystal as to whether or
not such shareholder should vote in favor of the Transaction.

_______________________________________________________________________________
PAGE 5

<PAGE>

Neither HVA nor its principals have any present or intended interest in
Crystal, Boyne or CM Acquisition Company. HVA's fees for the Opinion are
based on professional time and a charge for the Opinion, and are in no way
contingent upon the final conclusions derived.

The Opinion is intended only for the specific use and purpose stated herein.
It is intended for no other uses and is not to be copied or given to
unauthorized persons without the direct written consent of HVA. The Opinion
and information contained herein are valid only for the stated purpose and
date of the study, and should in no way be construed to be investment advice.

It is beyond the scope of the Opinion to render any opinion relative to the
solvency or insolvency of the Company or Boyne either prior to or following
the Transaction. HVA has not been requested to render such an opinion, and
nothing in the Opinion should be construed as such.

This engagement is limited to the production of the Opinion and the
conclusions and opinions contained herein. HVA has no obligation to provide
future services (e.g., expert testimony in court or before governmental
agencies) related to the contents of the Opinion unless prior arrangements
for such services have been made.

The Opinion is necessarily based on economic and market conditions as they
exist as of the date of the Opinion.

We have not been requested to, and did not, solicit third party indications
of interest in acquiring all or any part of the Company. Furthermore, at your
request, we have not negotiated the Transaction or advised you with respect
to alternatives to it.

FAIRNESS METHODOLOGY
In rendering our fairness opinion to the Board of Directors of Crystal, HVA
reviewed, considered and performed a variety of financial and comparative
analyses. The preparation of a fairness opinion involves various determinations
as to the most appropriate and relevant assumptions and methods of financial
analysis and the application of these methods to the particular circumstances;
therefore, such an opinion is not necessarily susceptible to partial analysis or
summary description. No specific weightings were given to any of the various
methodologies employed, rather, qualitative judgments were made based on our
experience in rendering such opinions and on circumstances then prevailing as to
the significance and relevance of each analysis and factor. Any attempt to
select portions of our analysis or of the factors considered without considering
all factors and analyses employed would create an incomplete and misleading view
of the process underlying the Opinion.

In arriving at its opinion as to fairness, from a financial point of view, of
the Transaction to the Crystal shareholders, HVA conducted analyses of many
factors including, but not limited to, the historical financial operating
characteristics of Crystal, the industry in which Crystal operates, the
regional economic and competitive characteristics of the market in which
Crystal operates, financial operating projections for Crystal, the projected
capital needs of Crystal, selected comparable transactions, discounted cash
flow, immediate benefits that are to accrue to Crystal shareholders resulting
from the Transaction, future benefits that are to accrue to Crystal
shareholders associated with lift ticket privileges, as well as other
factors. For purposes of our analysis, HVA did not prepare nor were we
requested to prepare, a formal valuation of either Crystal or Boyne.

_______________________________________________________________________________
PAGE 6

<PAGE>

HVA's analyses included, but were not limited to, a capitalization of income
approach relative to the historical net free cash flow and earnings of the
Company and discounted cash flow approaches relative to projected net free
cash flow of the Company. In addition, an analysis of selected comparable
transactions was made as well as an analysis of the projected future benefits
to accrue to Crystal shareholders from retained lift ticket privileges and an
analysis of recent transactions in the Company's stock.

CAPITALIZATION OF INCOME ANALYSIS: The historical operating results of the
Company were reviewed, analyzed, and adjustments made to eliminate
non-recurring income and expense items to provide a basis to analyze
historical income, the current financial condition of the Company, and the
future prospects for the Company.

DISCOUNTED CASH FLOW ANALYSIS: With respect to the discounted cash flow
analysis, HVA relied upon the cash flow projections prepared by Crystal
management. We reviewed the methodologies and assumptions used in the
construction of these cash flows for their reasonableness. In addition,
sensitivity analyses were performed using cash flow assumptions deemed by HVA
to be appropriate. The analysis included a review of the projected capital
expenditures required to generate the Company's projected income. The
projections assumed that the Crystal shareholder lift ticket privileges would
remain in existence in perpetuity.

SELECTED COMPARABLE TRANSACTIONS ANALYSIS: HVA analyzed publicly available
information on selected recent transactions it deemed comparable to this
Transaction. While this approach can at times provide a useful barometer of
current ski resort market conditions, numerous limitations to this approach
exist such as significant differences in size of resorts, assets owned by
various resorts (i.e., real estate holdings, etc.), status of development,
condition of equipment, markets served by specific resorts, weather patterns,
availability of water and installed snowmaking, and other similar factors.
Given the inherent limitations of this approach, HVA made certain qualitative
judgments which are reflected in reaching our conclusion as to the fairness
of the Transaction to Crystal shareholders from a financial point of view.

CAPITALIZATION OF SHAREHOLDERS LIFT TICKET PRIVILEGES ANALYSIS: As the
transaction is structured, a significant portion of the benefits to accrue to
the Crystal shareholders will be in the form of future lift ticket
privileges. In conducting its analysis of the value of such future benefits,
HVA considered the financial and operational strength of Boyne, trends in the
ski resort industry, the ability of Boyne to meet its capital investment
obligations under the terms of the Agreement, and other factors that
pertained to the future prospects of Crystal.

RECENT TRANSACTIONS IN THE COMPANY'S CLASS A COMMON STOCK: HVA reviewed
recent transactions in the Company's Class A common stock. Over the years,
several transactions have occurred, many on a private basis. The overall
percentage of outstanding shares traded in a twelve month period on an
arm's-length has been small and is not deemed by HVA to be representative of
an active public market for the Company's stock. Indicated multiples of
earnings before interest and taxes and earnings before interest, taxes,
depreciation and amortization were analyzed and compared to public market
comparables. The multiples indicated by the limited transactions in Crystal's
Class A common stock are significantly above those indicated for comparable
companies whose stock is

_______________________________________________________________________________
PAGE 7

<PAGE>

actively traded on public exchanges. Considering the above factors and the
existing financial condition of Crystal, HVA deemed that the limited recent
arm's-length transactions in the Company's Class A common stock were not
necessarily indicative of the fair market value of the Company.

Several other approaches were considered but not utilized in HVA's analysis.
A market trading analysis was not utilized as there are no publicly traded
companies with operations comparable to Crystal. Asset value approaches were
also not utilized as they were not deemed to provide useful results.

OTHER CONSIDERATIONS: In reaching our conclusions in this Opinion, HVA
reviewed and considered other qualitative factors that would be relevant to
Crystal shareholders, including, but not limited to, market presence,
liquidity, financing leverage, financial strength, and management depth. It
was concluded that of the various aspects of the Transaction, none were
deemed to be of detriment to Crystal shareholders in a material respect.

CONCLUSIONS
Based upon the foregoing and in reliance thereon, it is our
opinion that the Transaction, assuming it is consummated as proposed, is fair
from a financial point of view to the shareholders of Crystal whose shares
are being acquired in the Transaction as of the date hereof.

HVA is providing the Opinion as of the date hereof and disclaims any
undertaking or obligation to advise any person of any change in any fact or
matter affecting its Opinion which may come or be brought to HVA's attention
after the date hereof. Without limiting the foregoing, in the event that
there is any material change in any fact or matter affecting the Opinion
after the date hereof, HVA reserves the right to change, modify or withdraw
its opinion.

It is our understanding that Crystal's Board of Directors either have had or
will have the opportunity to make their own independent investigation of the
Transaction, and their decision to participate in the Transaction should be
based primarily on such investigation. Delivery of the Opinion to Crystal's
Board of Directors is subject to the conditions, scope of engagement,
limitations and understandings set forth in the Opinion and the engagement
letter between HVA and Crystal dated October 16, 1996.

This Opinion is furnished solely for the benefit of the Shareholders and
Directors of Crystal and may not be relied upon by any other person without
our express, prior written consent. We understand, however, that this
Opinion may be referred to in and attached to the Proxy Statement to be filed
by the Company in connection with this Transaction.

HOULIHAN VALUATION ADVISORS

/s/ FREDERIC L. JONES
- ---------------------------
Frederic L. Jones, ASA

_______________________________________________________________________________
PAGE 8

<PAGE>

CRYSTAL MOUNTAIN, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF SHAREHOLDERS, MARCH 25, 1997

The undersigned hereby appoints William W. Jeude and Lawrence E. Hard, and
each of them, attorneys and proxies, with power of substitution in each of them,
to vote for and on behalf of the undersigned at the Annual Meeting of
Shareholder of Crystal Mountain, Inc. (the "Company") to be held on March 25,
1997 and at any adjournment thereof, upon matters properly coming before the
meeting, as set forth in the related Notice of Meeting and Proxy Statement, both
of which have been received by the undersigned. Without otherwise limiting the
general authorization given hereby, said attorneys and proxies are instructed to
vote as follows:

1. Election of Directors:

a) Thomas F. Leonard c) Lawrence E. Hard

b) Robert E. Carlson d) Nancy K. Dees

/ / FOR all four nominees listed above (except as marked to the
contrary).

/ / WITHHOLD AUTHORITY to vote for all the nominees listed.

(INSTRUCTION: To withhold authority to vote for any individual nominees,
write that nominee's name on the space provided below.)

2. Approve the Reorganization Agreement and Agreement and Plan of Merger dated
as of December 6, 1996 among the Company, Boyne USA, Inc. and CM
Acquisition Corporation, the merger contemplated thereby and the
amendment of the Company's articles of incorporation contemplated thereby.

/ / FOR / / AGAINST / / ABSTAIN

3. To take action upon any other business as may properly come before the
meeting.

UNLESS OTHERWISE SPECIFIED IN THE SQUARE OR SPACE PROVIDED IN THIS PROXY,
THIS PROXY WILL BE VOTED FOR THE BOARD NOMINEES AND THE PROPOSED MERGER.

DO YOU INTEND TO ATTEND THE MEETING? YES / / NO / /

Dated: March ___, 1997 Signed:_____________________________________

PLEASE SIGN THIS PROXY AND RETURN IT PROMPTLY WHETHER OR NOT YOU EXPECT TO
ATTEND THE MEETING. YOU MAY NEVERTHELESS VOTE IN PERSON IF YOU ATTEND. PLEASE
SIGN EXACTLY AS YOUR NAME APPEARS HEREIN. Give full title if an Attorney,
Executor, Administrator, Trustee, Guardian, etc. For an account in the name of
two or more persons, each should sign, or if one signs, he should attach
evidence of his authority.

[NAME LABEL]
<PAGE>

CRYSTAL MOUNTAIN, INC.

DISTRIBUTION ELECTION FORM

Name of shareholder submitting this form:_______________________________________

Number of shares covered by this form:__________________________________________

The person named above (the "Shareholder") represents and warrants that he, she
or it was the record owner, at the close of business on March 6, 1997, of a
number of shares of Class A common stock of Crystal Mountain, Inc., a Washington
corporation (the "Company"), not less than the number set forth above. The
Shareholder understands that the board of directors of the Company has declared
a distribution to holders of the Company's Class A common stock (the "Class A
Shares") of, at the election of each holder of Class A Shares, either cash or
one or more memberships in the Crystal Mountain Founders' Club, a Washington
nonprofit corporation (the "Club"), at the following rates:

(i) one membership unit in the Club per Class A Share OR

(ii) $154.48 in cash per Class A Share,

such dividend to be distributed in the manner, at the times and subject to the
conditions set forth in a Reorganization Agreement and Agreement and Plan of
Merger dated as of December 6, 1996 among the Company, Boyne USA, Inc. and CM
Acquisition Corporation, as amended (the "Merger Agreement").

The Shareholder elects to have the person(s) named below (which may be the
Shareholder alone, the Shareholder and one or more other persons or only persons
other than the Shareholder) become member(s) of the Club, with the number of
membership units set forth below:

NUMBER OF
NAME OF PROPOSED MEMBER MEMBERSHIP UNITS

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

Additional names shown on attached sheet(s)
---------------------------
TOTAL MEMBERSHIP UNITS (1)
---------------------------

The Shareholder elects to receive cash in (2)
respect of of the Shareholder's Class ---------------------------
A Shares.

(1)If this number is not equal to the sum of the number of membership units
shown opposite the name(s) of proposed members above and on any attached
sheets, the specific numbers shown opposite the names will control, and this
number will be disregarded.

(2)If this number is not equal to the excess (if any) of the total number of
Class A Shares covered by this form over the total number of membership units
set forth above, the Shareholder will be deemed to have elected to receive
cash in respect of a number of the Shareholder's Class A Shares equal to such
excess, and this number will be disregarded.

<PAGE>

The Shareholder represents and warrants that he, she or it is familiar with the
terms of the Club and understands the benefits, privileges and limitations of
membership therein, including without limitation (a) that members with fewer
than 20 membership units are not entitled to receive the lift tickets for use at
Crystal Mountain to which other members may be entitled and (b) that transfer of
memberships is restricted. The undersigned agrees to be bound by the articles of
incorporation, bylaws and rules of the Club as provided to the undersigned and
as amended from time to time in accordance with their terms.

The Shareholder understands that if he, she or it does not complete and return
this form, and if the conditions to the dividend referred to above are
satisfied, the undersigned would be entitled to receive $154.48 times the number
of Class A Shares owned of record by the Shareholder, AND THAT THE AMOUNT THE
SHAREHOLDER WOULD BE SO ENTITLED TO RECEIVE WILL BE REDUCED BY $154.48 TIMES THE
TOTAL NUMBER MEMBERSHIP UNITS THE SHAREHOLDER HAS FILLED IN ABOVE.

In order to be effective, this form, signed by a record holder of Class A
Shares, must be actually received at the following address before 4:00 pm (PST)
on MARCH 27, 1997:

Crystal Mountain, Inc.
c/o LeSourd & Patten, P.S.
2400 Columbia Center
701 Fifth Avenue
Seattle, Washington 98104-7095

or delivered to Lawrence E. Hard, Secretary of the Company, at the Company's
annual meeting on March 27, 1997, prior to the vote to approve the Merger
Agreement.

The name of the record holder that signed this form must be printed or typed
below, EXACTLY as it appears on the stock transfer records of the Company. The
number of shares covered by this form (together with all similar forms submitted
by the Shareholder) must be less than or equal to the Shareholder's Class A
Shares as shown on the Company's stock transfer records. If this form does not
comply with this paragraph, it may not be effective.

If any record holder of the Class A Shares fails to return this form, or returns
a form that is ineffective, such record holder will be deemed to have elected to
receive cash in respect of all Class A Shares held by it of record.

Dated:
--------------- ---------------------------------------------
Name:
(print or type)