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                                                                        EX-10.23


                       [GRAPHIC OMITTED][GRAPHIC OMITTED]

                                 MASTER LOAN AND
                               SECURITY AGREEMENT

                                PRIMARY BORROWER:

                              SUNTERRA CORPORATION
                                   95-4582157
                       FEDERAL EMPLOYEE IDENTIFICATION NO.

                             1781 PARK CENTER DRIVE
                             ORLANDO, FLORIDA 32835

                                   $50,000,000

                               SEPTEMBER 30, 1999

                                 RESORT FINANCE
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                                 TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----

1. DEFINITIONS.................................................................1

2. LOAN COMMITMENT; USE OF PROCEEDS............................................5
   2.1   Inventory Loan Commitment; Determination of Advance Amounts...........5
   2.2   Inventory Loan Revolver...............................................5
   2.3   Continuation of Obligations Throughout Term...........................6
   2.4   Use of Advances.......................................................6
   2.5   Repayment of Inventory Loan...........................................6
   2.6   Interest..............................................................6
   2.7   Inventory Loan Minimum Required Payments..............................6
   2.8   Prepayment............................................................7
   2.9   Loan Fee; Custodial Fee; Availability Fee.............................7
   2.10  Application of Proceeds of Collateral and Payments....................7
   2.11  Borrower's Unconditional Obligation to Make Payments..................7

3. SECURITY....................................................................8
   3.1   Grant of Security Interest in Collateral..............................8
   3.2   Ineligible Inventory..................................................8
   3.3   Borrowing Base Reporting..............................................8
   3.4   Maintenance of Security...............................................8

4. CONDITIONS PRECEDENT TO ADVANCES; MINIMUM AMOUNT AND MAXIMUM FREQUENCY OF
   ADVANCES; METHOD OF DISBURSEMENT............................................9
   4.1   Delivery of Loan Documents and Due Diligence Items Prior to Initial
         Advance...............................................................9
   4.2   Additional Conditions Precedent for Subsequent Advances..............11
   4.3   General Conditions Precedent to All Advances.........................11
   4.4   Conditions Satisfied at Borrower's Expense...........................11
   4.5   Minimum Amount and Maximum Frequency of Advances.....................11
   4.6   Disbursement of Advances.............................................11
   4.7   No Waiver............................................................11

5. BORROWER'S REPRESENTATIONS AND WARRANTIES..................................11
   5.1   Good Standing........................................................11
   5.2   Power and Authority; Enforceability..................................12
   5.3   Borrower's Principal Place of Business...............................12
   5.4   No Litigation........................................................12
   5.5   Compliance with Legal Requirements...................................12
   5.6   No Misrepresentations................................................12
   5.7   No Default for Third Party Obligations...............................12
   5.8   Payment of Taxes and Other Impositions...............................12
   5.9   Sales Activities.....................................................12
   5.10  Time-Share Interest Not a Security...................................12
   5.11  Zoning Compliance....................................................12
   5.12  Eligible Inventory...................................................12
   5.13  Association; Assessments and Reserves................................13
   5.14  Title to and Maintenance of Common Areas and Amenities...............13
   5.15  Year 2000............................................................13
   5.16  Survival and Additional Representations and Warranties...............13


6. BORROWER'S COVENANTS.......................................................13
   6.1   Borrower's Affirmative Covenants.....................................13
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   6.2   Borrower's Negative Covenants........................................17
   6.3   Survival of Covenants................................................18

7. DEFAULT....................................................................18
   7.1   Events of Default....................................................18
   7.2   Remedies.............................................................19
   7.3   Application of Proceeds During an Event of Default...................19
   7.4   Uniform Commercial Remedies; Sale; Assembly of Collateral............19
   7.5   Application of Proceeds..............................................19
   7.6   Lender's Right to Perform............................................20
   7.7   Non-Exclusive Remedies...............................................20
   7.8   Waiver of Marshalling................................................20
   7.9   Attorney-in-Fact.....................................................20

8. COSTS AND EXPENSES; INDEMNIFICATION........................................20
   8.1   Costs and Expenses...................................................20
   8.2   Indemnification......................................................20

9. CONSTRUCTION AND GENERAL TERMS.............................................21
   9.1   Payment Location.....................................................21
   9.2   Entire Agreement.....................................................21
   9.3   Powers Coupled with an Interest......................................21
   9.4   Counterparts.........................................................21
   9.5   Notices..............................................................21
   9.6   Successors and Assigns...............................................21
   9.7   Severability.........................................................21
   9.8   Time of Essence......................................................21
   9.9   Miscellaneous........................................................21
   9.10  CHOICE OF LAW........................................................22
   9.11  CHOICE OF JURISDICTION; WAIVER OF VENUE..............................22
   9.12  WAIVER OF JURY TRIAL.................................................22
   9.13  INDUCEMENT TO LENDER.................................................22
   9.14  Compliance With Applicable Usury Law.................................22
   9.15  NO RELATIONSHIP WITH PURCHASERS......................................22
   9.16  NO JOINT VENTURE.....................................................22
   9.17  Standards Applied to Lender's Actions................................22
   9.18  Meaning of Subordination.............................................23
   9.19  Scope of Reimbursable Attorney's Fees................................23
   9.20  Publicity............................................................23
   9.21  Permitted Contests...................................................23
   9.22  Reliance.............................................................23

      Schedule of Additional Terms............................................25
         Exhibit A - Conditions of Eligible Inventory.........................27
         Exhibit B - Permitted Encumbrances...................................29
         Exhibit C - Borrower's Certificate...................................30
         Exhibit D - (NOT USED) ..............................................
         Exhibit E - Additional Conditions to Inventory Loan Advances.........31
         Exhibit E-1 - Request for Inventory Loan Advance and Certification...32
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            This LOAN AND SECURITY AGREEMENT is entered into for good and
valuable consideration, by and between FINOVA CAPITAL CORPORATION, a Delaware
corporation, and SUNTERRA CORPORATION, a Maryland corporation (referred to
herein as the "PRIMARY BORROWER"), together with those business organizations
which are affiliated with Primary Borrower and which either join in the
execution of this Agreement below as a "Borrower" or subsequently join in this
Agreement as a "Borrower" hereunder pursuant to an Assumption Agreement in form
and substance satisfactory to Lender (all such persons being collectively
referred to herein as "BORROWERS").

1.    DEFINITIONS

      As used in this Agreement and the other Loan Documents unless otherwise
expressly indicated in this Agreement or the other Loan Documents, the following
terms shall have the following meanings (such meanings to be applicable equally
both to the singular and plural terms defined)

      "ACCESS AGREEMENT": that certain Agreement Regarding Access to Club
Sunterra dated as of September 30, 1999 by and among Primary Borrower, Lender,
and Club Sunterra, Inc., a Florida corporation and wholly owned subsidiary of
Primary Borrower.

      "ADVANCE": an advance of the proceeds of the Inventory Loan by Lender to,
or on behalf of, Borrower in accordance with the terms and conditions of this
Agreement.

      "AFFILIATE": with respect to any individual or entity, any other
individual or entity that directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such individual or entity.

      "AGREEMENT": this Loan and Security Agreement, as it may be from time to
time renewed, amended, restated or replaced.

      "APPLICABLE USURY LAW": the usury law chosen by the parties pursuant to
the terms of PARAGRAPH 9.10 or such other usury law which is applicable if such
usury law is not.

      "APPROVED ALTERNATIVE INTEREST": any ownership right to a dwelling space
in a parcel of real property owned by Primary Borrower or any Subsidiary
Borrower which rights have yet to be included within an established Time-Share
Program pursuant to a Time-Share Declaration, but which Lender has approved as
Eligible Inventory for inclusion as part of the Borrowing Base hereunder. As of
the Closing Date, Lender has agreed that the seventy-five (75) Units located in
the Villas de Santa Fe Time-Share Project, Santa Fe, New Mexico, which is owned
by Primary Borrower, but which Units have not yet been converted into Time-Share
Interests, shall constitute Approved Alternative Interests.

      "ARTICLES OF ORGANIZATION": the charter, articles, operating agreement,
joint venture agreement, partnership agreement, by-laws and any other written
documents evidencing the formation, organization, governance and continuing
existence of an entity.

      "BASIC INTEREST": the meaning given to it in PARAGRAPH 2.6.

      "BORROWER OR BORROWERS": means Primary Borrower, together with each
Subsidiary Borrower, as the same exist from time to time, and subject to the
restrictions on assignment and transfer contained in this Agreement, the
successors and assigns of each such Person.

      "BORROWING BASE": an amount equal to twenty-five percent (25%) of the
Retail Value of the Eligible Inventory.

      "BORROWING BASE REPORT":  the same meaning given to it in PARAGRAPH 3.3.

      "BORROWING BASE SHORTFALL": at any time, the amount by which the unpaid
principal balance of the Inventory Loan exceeds the aggregate Borrowing Base of
all Eligible Inventory.

      "BORROWING TERM": the period commencing on the date of this Agreement and
ending on the close of the Business Day (or if not a Business Day, the first
Business Day thereafter) on the date identified in the Schedule as the Original
Borrowing Term Expiration Date (in the event Primary Borrower does not exercise
the Extension Option) or the Extended Borrowing Term Expiration Date (in the
event Primary Borrower does exercise the Extension Option).

      "BUSINESS DAY": any day other than a Saturday, a Sunday, a national
holiday or a day on which banks in Phoenix, Arizona are required to be closed.

      "CILP ASSIGNMENT": a written assignment to be executed and delivered to
Lender by Borrower and creating in favor of Lender a perfected, direct
collateral assignment of the Contracts, Intangibles, Licenses and Permits in
order to facilitate Performance of the Obligations, as it may be from time to
time renewed, amended, restated or replaced.

      "COLLATERAL": collectively, (a) the Inventory; (b) the Insurance Policies;
(c) all Borrower's rights under all escrow agreements and accounts pertaining to
any of the foregoing; (d) the furniture, fixtures and equipment located in the
Units to which the Inventory relates, to the extent that any Borrower has rights
in such furniture, fixtures or equipment; and (e) any and all other property now
or hereafter serving as security for the Performance of the Obligations, and all
products and proceeds thereof.

      "CONTRACTS, INTANGIBLES, LICENSES, PERMITS": all contracts, licenses,
permits, plans and other intangibles in which Borrower now or hereafter has
rights (but only to
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the extent Borrower has rights in any such items and to the extent such items
primarily pertain to one or more of the Time-Share Projects) and are now or
hereafter used in connection with the marketing and sale of Inventory and the
management and/or operation of the Time-Share Projects in which the Inventory is
situated.

      "DEFAULT RATE": the per annum rate of interest identified in the Schedule
as the Default Rate.

      "ELIGIBLE INVENTORY": all Inventory which conforms to the standards set
forth in EXHIBIT A. Unsold Inventory that has qualified as Eligible Inventory
shall cease to be Eligible Inventory upon the date such Inventory fails to
continue to conform to the standards set forth in EXHIBIT A.

      "ENVIRONMENTAL CERTIFICATE": an environmental certificate executed and
delivered to Lender by Borrower and such other persons as Lender may require, as
it may be from time to time renewed, amended, restated or replaced.

      "EVENT OF DEFAULT": the meaning set forth in PARAGRAPH 7.1.

      "EXTENSION OPTION": the meaning set forth in PARAGRAPH 2.3.

      "GAAP": means generally accepted accounting principles in the United
States of America as in effect from time to time as set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Boards which are applicable to the circumstances
as of the date of determination consistently applied, except that, for the
financial covenants set forth in this Agreement, GAAP shall be determined on the
basis of such principles in effect on the date hereof and consistent with those
used in the preparation of the audited financial statements delivered to FINOVA
prior to the date hereof. In the event that changes in GAAP shall be mandated by
the Financial Accounting Standards Board and/or the American Institute of
Certified Public Accountants or any similar accounting body of comparable
standing, or shall be recommended by Borrower's certified public accountants, to
the extent that such changes would modify such accounting terms or the
interpretation or computation thereof as contemplated by this Agreement at the
time of execution hereof, then in such event such changes shall be followed in
defining such accounting terms, and Borrower and Lender shall use reasonable
good faith efforts to agree upon an appropriate amendment to this Agreement to
reflect the original intent of such terms in light of such changes, whereupon
such new accounting terms shall apply.

      "IMPOSITIONS": all real estate, personal property, excise, privilege,
transaction, documentary stamp and other taxes, charges, assessments and levies
(including non-governmental assessments and levies such as maintenance charges,
association dues and assessments under private covenants, conditions and
restrictions) and any interest, costs, fines or penalties with respect thereto,
general and special, ordinary and extraordinary, foreseen and unforeseen, of any
kind and nature whatsoever which at any time prior to or after the execution
hereof may be assessed, levied or imposed.

      "INCIPIENT DEFAULT": an event which after notice and/or lapse of time
would constitute an Event of Default.

      "INSTALLMENT DATE": the meaning given to it in PARAGRAPH 2.7.

      "INSURANCE POLICIES": the insurance policies that Borrower is required to
maintain and deliver pursuant to PARAGRAPH 6.1(c).

      "INTEREST PERIOD": shall mean a thirty (30) day period commencing on each
Interest Rate Determination Date.

      "INTEREST RATE DETERMINATION DATE": shall mean the first Business Day of
each calendar month.

      "INVENTORY": collectively, all unsold Time-Share Interests, together with
any unsold Approved Alternative Interests which may then exist, but as to either
unsold Time-Share Interests or unsold Approved Alternative Interest, solely to
the extent that such interests have been encumbered by Lender pursuant to a
Mortgage.

      "INVENTORY LOAN": the revolving line of credit loan made pursuant to
ARTICLE 2.

      "LEGAL REQUIREMENTS": (a) all present and future judicial decisions,
statutes, regulations, permits or certificates of any governmental authority in
any way applicable to Borrower or its property; and (b) all material contracts
or agreements (written or oral) by which Borrower or its property is bound or,
if compliance therewith would otherwise be in conflict with any of the Loan
Documents, by which Borrower or its property becomes bound with Lender's prior
written consent.

      "LENDER": FINOVA Capital Corporation, a Delaware corporation, and its
successors and assigns.

      "LIBO ADJUSTED RATE": shall mean the rate per annum determined by Lender
by dividing (the resulting quotient to be rounded upward to the nearest 1/100 of
one percent) (i) the per annum rate of interest at which deposits in U.S.
Dollars in an amount substantially equal to the outstanding balance of the
Inventory Loan and having a maturity comparable to the Interest Period are
offered by Citibank, N.A. or its affiliates in the London interbank market at
approximately 11:00 a.m. (London time) on the applicable Interest Rate
Determination Date, by (ii) a number equal to 1.0 minus the aggregate (but
without duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the applicable Interest Rate Determination Date
(including, without limitation, basic supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of the

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Federal reserve system or other governmental authority having jurisdiction with
respect thereto, as now and from time to time in effect) for eurocurrency
funding (currently referred to as "Eurocurrency liabilities" in Regulation D of
such board) which are required to be maintained by Lender.

      "LIBO RATE": shall mean the per annum rate of interest which is ordinarily
reported on page 3750 of the Telerate Matrix (in U.S. Dollars) that will be paid
for a deposit, in immediately available funds, of a principal amount
substantially equal to the outstanding balance of the Inventory Loan and having
a maturity comparable to the Interest Period; provided, however, if, for
whatever reason, Lender shall be unable to ascertain the LIBO Rate pursuant to
the preceding provisions, the LIBO Rate in such circumstances shall, for the
Interest Period in question, be the LIBO Adjusted Rate.

      "LOAN DOCUMENTS": this Agreement, the Note, the Subsidiary Notes, the
Environmental Certificate, the Access Agreement, the Security Documents, and all
other documents now or hereafter executed in connection with the Inventory Loan,
as they may be from time to time renewed, amended, restated or replaced.

      "LOAN FEE": the amount identified in the Schedule as the Loan Fee.

      "MATERIAL ADVERSE EFFECT": shall mean a material adverse effect on (a) the
business, financial condition, or operations of (i) Primary Borrower
individually or (ii) all Subsidiary Borrowers collectively, (b) the ability of
(i) Primary Borrower individually or (ii) all Subsidiary Borrowers collectively,
to Perform their Obligations to Lender, (c) one or more Time-Share Projects
which, in the aggregate, have contributed at least fifteen percent (15%) of the
total Eligible Inventory constituting the Borrowing Base, or (d) the Collateral.
In determining whether any individual event would result in a Material Adverse
Effect, notwithstanding the fact that such event does not OF ITSELF have such
effect, a Material Adverse Effect shall be deemed to have occurred if the
cumulative effect of such event and all other then existing events would result
in a Material Adverse Effect.

      "MATURITY DATE": the date (or if not a Business Day, the first Business
Day hereafter) which is identified in the Schedule as the Maturity Date.

      "MAXIMUM INVENTORY LOAN AMOUNT": the amount identified in the Schedule as
he Maximum Inventory Loan Amount.

      "MEASURING DATE": means the first Business Day of each calendar month
during he Term.

      "MINIMUM OPINION MATTERS": due organization and good standing of Borrower
and (if any) other sureties for the Performance of the Obligations who are not
natural persons; due authorization, execution and delivery of the Loan
Documents; enforceability of the Loan Documents (including choice of law
provisions); compliance of the Inventory Loan with usury laws; the absence of
conflict between the Loan Documents and its Articles of Organization and Legal
Requirements; compliance by Borrower with applicable laws (other than with
respect to instances of noncompliance which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect); compliance
of the Time-Share Program Governing Documents and Time-Share Program Consumer
Documents with applicable laws; and proper perfection of the required liens and
security interests.

      "MINIMUM REQUIRED TIME-SHARE APPROVALS": all registrations/consents to
sell and all final subdivision public reports/public offering
statements/prospectus, as applicable.

      "MORTGAGE": a mortgage/deed of trust/deed to secure debt recorded against
the Inventory in a given Time-Share Project (or other form of development), as
it may be from time to time renewed, amended, restated or replaced.

      "NOTE": the Master Promissory Note to be made and delivered by Primary
Borrower to Lender pursuant to PARAGRAPH 4.1, having a face amount equal to the
Maximum Inventory Loan Amount, dated as of even date herewith, and made payable
to Lender to evidence the Inventory Loan, as it may be from time to time
renewed, amended, restated or replaced, together with any Allonges thereto or
any Subsidiary Notes executed by the Primary Borrower and one or more Subsidiary
Borrowers in order to evidence a portion of the indebtedness evidenced by the
Note.

      "OBLIGATIONS": all obligations, agreements, duties, covenants and
conditions of Borrower to Lender which Borrower is now or hereafter required to
Perform under the Loan Documents.

      "OPENING PREPAYMENT DATE": the date identified in the Schedule as the
Opening Prepayment Date.

      "PERFORMANCE" OR "PERFORM": full, timely and faithful performance.

      "PERMITTED DEBT": the meaning given to it in PARAGRAPH 6.2(B).

      "PERMITTED ENCUMBRANCES": the rights, restrictions, reservations,
encumbrances, easements and liens of record which Lender has agreed to accept,
as set forth in an exhibit which shall be attached to each Mortgage prior to the
time such Mortgage is recorded.

      "PRIMARY BORROWER" Sunterra Corporation, a Maryland corporation.

      "PURCHASE CONTRACTS": a purchase contract pursuant to which any Borrower
sold a Time-Share Interest to a Purchaser.

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<PAGE>

      "PURCHASER": shall mean each owner of one or more Time-Share Interests in
those Time-Share Projects with respect to which unsold Time-Share Interests
constitute a portion of the Eligible Inventory.

      "PURCHASERS": shall mean all Purchasers with respect to a particular
Time-Share Project, taken as a whole (with the result that representations,
warranties or covenants with respect to any Borrower's fulfillment of its
obligations to "Purchasers" shall not be breached as a result of the failure of
Borrower to have performed any obligations as to one or more individual
Purchasers unless such failure arises to the level of a material failure as to
all Purchasers considered collectively).

      "QUIET ENJOYMENT RIGHTS": the meaning given to it in PARAGRAPH 4.1(B).

      "RELEASE FEE": shall have the meaning set forth in PARAGRAPH 3.2.

      "RENEWAL FEE": the meaning given to it in PARAGRAPH 2.9(B).

      "REQUIRED CLOSING DATE": the date identified in the Schedule as the
Required Closing Date.

      "RESOLUTION": a resolution of a corporation certified as true and correct
by an authorized officer of such corporation, a certificate signed by the
manager of a limited liability company and such members whose approval is
required, or a partnership certificate signed by all of the general partners of
such partnership and such other partners whose approval is required.

      "RETAIL VALUE": shall mean (i) with respect to any Time-Share Project that
has had a period of at least twelve consecutive months in which Time-Share
Interests have been sold, the actual average sales price of such Time-Share
Interests achieved during the most recent twelve-month period preceding a given
Measuring Date, and (ii) with respect to any Time-Share Project that has not had
a period of at least twelve consecutive months of sales of Time-Share Interests,
the average retail value of all unsold Time-Share Interests as determined by
Lender in its discretion; provided, that at such time as an individual
Time-Share Project has generated sales of Time-Share Interests for a minimum of
twelve consecutive months, Retail Value shall be established pursuant to clause
(i) of this definition. The Retail Value applicable to Eligible Inventory shall
be established at the time such Eligible Inventory is contributed to the
Borrowing Base, and shall thereafter only be adjusted pursuant to the
revaluation process set forth in PARAGRAPH 2.7(C).

      "SANTA FE RESERVE": shall be a reserve against borrowing availability
hereunder, in the amount of $750,000, with respect to that part of the Eligible
Inventory which consists of Approved Alternative Interests located in the Villas
de Santa Fe Time-Share Project owned by Primary Borrower.

      "SCHEDULE": the Schedule of Additional Terms which follows the signature
pages of the parties.

      "SECURITY DOCUMENTS": the CILP Assignment, the Mortgage, this Agreement
and all other documents now or hereafter securing the Obligations, as they may
be from time to time renewed, amended, restated or replaced.

      "SUBSIDIARY BORROWER": means each Affiliate of Primary Borrower which has
contributed Inventory to the Borrowing Base from time to time throughout the
Term; provided, that references to one or more Subsidiary Borrowers shall only
include entities which own unsold Inventory then constituting a portion of the
Borrowing Base, with the result that any entity which may previously have
contributed Eligible Inventory to the Collateral, but which Eligible Inventory
has now all been sold or otherwise released from the Borrowing Base, shall no
longer be considered a Subsidiary Borrower hereunder (unless such entity
thereafter contributes additional Inventory to the Borrowing Base).

      "SUBSIDIARY NOTES": shall mean those promissory notes made and delivered
by Primary Borrower and individual Subsidiary Borrowers to Lender from time to
time, having a face amount equal to the original Borrowing Base attributable to
the Eligible Inventory contributed by the applicable Subsidiary Borrower, as any
such note may from time to time be renewed, amended, restated or replaced. Each
Subsidiary Note shall indicate that the indebtedness evidenced thereby
constitutes a segregated portion of, and is not in addition to, the indebtedness
evidenced by the Note. Each Subsidiary Borrower shall be liable only with
respect to those Subsidiary Notes as to which such Subsidiary Borrower is a
maker.

      "TERM": the duration of this Agreement, commencing on the date as of which
this Agreement is entered into and ending when all of the Obligations have been
Performed and Lender has no further obligation to extend credit in connection
with the Inventory Loan.

      "THIRD PARTY CONSENTS": those consents which Lender requires Borrower to
obtain, or which Borrower is contractually or legally obligated to obtain, from
others in connection with the transaction contemplated by the Loan Documents.

      "TIME-SHARE ASSOCIATION": the association established in accordance with
each Time-Share Declaration to manage the applicable Time-Share Program and in
which all owners of Time-Share Interests are or will be members.

      "TIME-SHARE DECLARATION": with respect to each Time-Share Project, that
declaration of covenants, conditions and restrictions which has been executed by
Borrower, is recorded in the real estate records of the county where the
Time-Share Project is located, and establishes the Time-Share Program.

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<PAGE>

      "TIME-SHARE INTEREST": an undivided fractional fee simple interest as
tenant-in-common (or an estate for years with a remainder over in fractional fee
simple as tenant-in-common) either (a) in a Unit (coupled with an undivided
fractional fee simple interest as tenant-in-common in the common areas of the
Time-Share Project) or (b) in the entire Time-Share Project, together with the
right to occupy assigned Units for use periods which have been properly reserved
pursuant to the rules and regulations of the Time-Share Program, and the
non-exclusive right to use such common elements during the same occupancy
period.

      "TIME-SHARE MANAGEMENT AGREEMENT": the management agreement from time to
time entered into between the Time-Share Association and the Time-Share Manager
for the management of the Time-Share Program.

      "TIME-SHARE MANAGER": the person from time to time employed by the
Time-Share Association to manage the Time-Share Program.

      "TIME-SHARE PROGRAM": the program created under each Time-Share
Declaration by which purchasers may own Time-Share Interests, enjoy their
respective Time-Share Interests on a recurring basis, and share the expenses
associated with the operation and management of such program.

      "TIME-SHARE PROGRAM CONSUMER DOCUMENTS": the Purchase Contract, notes,
security documents, deed of conveyance, credit application, credit disclosures,
rescission right notices, final subdivision public reports/prospectuses/public
offering statements, receipt for public report, exchange affiliation agreement
and other documents used or to be used by Borrower in connection with the sale
of Time-Share Interests.

      "TIME-SHARE PROGRAM GOVERNING DOCUMENTS": the Time-Share Declaration, the
Articles of Organization for the Time-Share Association, any and all rules and
regulations from time to time adopted by the Time-Share Association, the
Time-Share Management Agreement and any subsidy agreement by which Borrower is
obligated to subsidize shortfalls in the budget of the Time-Share Program in
lieu of paying assessments.

      "TIME-SHARE PROJECT": each Time-Share Project identified in the Schedule
as a Time-Share Project. References herein to one or more Time-Share Projects
shall only include such projects in which Inventory then constituting a portion
of the Borrowing Base is situated, with the result that any project which may
previously have contributed Inventory to the Collateral, but as to which all
such Inventory has now been sold or otherwise released from the Borrowing Base,
shall no longer be considered a Time-Share Project hereunder (unless the owner
of such project thereafter contributes additional Inventory situated in such
project to the Borrowing Base).

      "TITLE INSURER": a title company which is acceptable to Lender and issues
a Title Policy.

      "TITLE POLICY": in connection with each Mortgage which encumbers a part of
the Collateral, an ALTA lender's policy of title insurance in an amount not less
than the Borrowing Base of the Inventory secured by the Mortgage, insuring
Lender's interest in the Mortgage as a perfected, direct, first and exclusive
lien on the Inventory encumbered thereby, subject only to the Permitted
Encumbrances, issued by Title Insurer and in form and substance acceptable to
Lender.

      "UNIT": a dwelling unit in the Time-Share Project.

2.    LOAN COMMITMENT; USE OF PROCEEDS

      2.1 INVENTORY LOAN COMMITMENT; DETERMINATION OF ADVANCE AMOUNTS. Lender
hereby agrees, if Borrower has Performed all of the Obligations then due, to
make Advances to Borrower in accordance with the terms and conditions of this
Agreement for the purposes specified in PARAGRAPH 2.4. The maximum amount of an
Advance shall be equal to (a) the aggregate Borrowing Base for all Eligible
Inventory less (b) the then unpaid principal balance of the Inventory Loan;
provided, however, at no time shall the unpaid principal balance of the
Inventory Loan exceed the Maximum Inventory Loan Amount; and provided further,
that with respect to the first Advance made on the basis of Inventory which has
not previously constituted a portion of the Borrowing Base, the maximum amount
of such Advance shall not exceed the Borrowing Base directly attributable to
such new Inventory. The foregoing notwithstanding, Primary Borrower shall not be
entitled to borrow the amount contained in the Santa Fe Reserve until such time
as (i) those improvements which have been disclosed to Lender prior to the
Closing Date with respect to the Units situated in the Villas de Santa Fe
project have been completed for certain of such Units, and (ii) Primary Borrower
has provided to Lender evidence that all amounts required to complete such
improvements for such Units have been expended. Upon completion of the foregoing
items, Primary Borrower shall be permitted to borrow that percentage of the
Santa Fe Reserve as is equal to the percentage of Approved Alternative Interests
which remain as unsold Time-Share Interests following such conversion (with the
result that Primary Borrower shall not be permitted to borrow such portion of
the Santa Fe Reserve as arose with respect to Approved Alternative Interests
which were sold or otherwise disposed of prior to the time such interests were
converted into Time-Share Interests).

      2.2 INVENTORY LOAN REVOLVER. The Inventory Loan is a revolving line of
credit; however, all Advances shall be viewed as a single loan. Borrower shall
not be entitled to obtain Advances after the expiration of the Borrowing Term
unless Lender, in its discretion, agrees in writing with Borrower to make
Advances thereafter on terms and conditions satisfactory to Lender.

                                       5
<PAGE>

      2.3 CONTINUATION OF OBLIGATIONS THROUGHOUT TERM; RIGHT TO EXTEND. Whether
or not Borrower's right to obtain Advances has terminated, this Agreement and
Borrower's liability for Performance of the Obligations shall continue until the
end of the Term. Borrower shall have the right, exercisable not earlier than one
hundred and twenty (120) days, nor later than sixty (60) days, prior to the
Original Borrowing Term Expiration Date to extend the Borrowing Term (herein,
the "EXTENSION OPTION") through the Extended Borrowing Term Expiration Date;
provided, however, that the Extension Option shall expire and be of no further
force or effect upon the occurrence of an Event of Default at any time prior to
the Original Borrowing Term Expiration Date (regardless of whether or not any
notice from Primary Borrower of its election to exercise the Extension Option
has then been delivered to Lender). In the event Primary Borrower elects to
exercise the Extension Option, Primary Borrower shall pay the Renewal Fee
described in PARAGRAPH 2.9(B) hereof.

      2.4 USE OF ADVANCES. Borrower will use the proceeds of the Inventory Loan
only for working capital and other business purposes.

      2.5 REPAYMENT OF INVENTORY LOAN. The Inventory Loan shall be evidenced by
the Note and shall be repaid in immediately available funds according to the
terms of the Note and this Agreement.

      2.6 INTEREST. Except as otherwise provided in this Note or this Agreement,
interest ("BASIC INTEREST") shall accrue on the unpaid principal balance of the
Inventory Loan from time to time outstanding at the Basic Interest Rate. Basic
Interest shall be calculated on the basis of the actual number of days elapsed
during the period for which interest is being charged predicated on a year
consisting of three hundred sixty (360) days. Installments of principal, Basic
Interest and any other amounts due and payable under the Loan Documents shall
earn interest after they are due at the Default Rate. At the option of Lender,
while an Event of Default exists, interest shall accrue at the Default Rate.

      2.7 INVENTORY LOAN REQUIRED PAYMENTS.

            (a) MONTHLY PAYMENTS; MATURITY. Commencing on the last Business Day
      of the calendar month in which the initial Advance is made and on the last
      Business Day of each succeeding month thereafter during the Borrowing Term
      (each, an "INSTALLMENT DATE"), Borrower will pay to Lender an installment
      payment equal to accrued interest on the then outstanding balance of the
      Inventory Loan. Following expiration of the Borrowing Term, accrued
      interest on the outstanding principal balance of the Inventory Loan shall
      be payable monthly, on the last Business Day of each month, and the
      outstanding principal balance of the Inventory Loan shall be payable
      through the payment of Release Fees concurrently with the sale or other
      disposition of individual items of Inventory until the Maturity Date, at
      which time all outstanding amounts shall be due and payable. Lender shall
      provide to Primary Borrower, on or before the seventh day prior to the end
      of each calendar month, a statement of accrued interest for such month
      (which statement shall assume that the unpaid principal balance of the
      Inventory Loan remains the same from the date of such statement through
      the end of the applicable month). Lender shall deliver such statement of
      accrued interest either via facsimile or e-mail, whichever method of
      delivery is selected by Primary Borrower. In the event actual accrued
      interest for a calendar month is different from the accrued interest set
      forth on any monthly statement as a result of a change in the outstanding
      principal balance of the Inventory Loan, an appropriate adjustment shall
      be calculated by Lender and reflected in the next monthly accrued interest
      statement.

            (b) BORROWING BASE MAINTENANCE. If there exists a Borrowing Base
      Shortfall and Borrower knows of the occurrence of such condition or should
      have known of its occurrence by virtue of reports required to be delivered
      to Lender, Borrower, without notice or demand, will immediately (a) make
      to Lender a principal payment in an amount equal to the Borrowing Base
      Shortfall plus accrued and unpaid interest on such principal payment or
      (b) deliver to Lender additional Eligible Inventory having an aggregate
      Borrowing Base not less than the Borrowing Base Shortfall. Simultaneously
      with the delivery of additional Eligible Inventory to correct a Borrowing
      Base Shortfall, Borrower will deliver to Lender all of the items (except
      for a "REQUEST FOR ADVANCE AND CERTIFICATION") required to be delivered by
      Borrower to Lender pursuant to PARAGRAPH 4.2, together with a "BORROWER'S
      CERTIFICATE" in form and substance identical to EXHIBIT C.

            (c) REVALUATION OF RETAIL VALUE. Each party shall have the right to
      request a revaluation of the Retail Value applicable to all then existing
      Eligible Inventory semi-annually, each such revaluation to occur on a
      mid-year or annual anniversary of the Closing Date. In the event either
      Lender or Borrower requests a revaluation of Retail Value, each Borrower
      owning Eligible Inventory as to which a revaluation has been requested
      shall provide to Lender a summary of the actual sales prices attained
      during the preceding twelve (12) months with respect to the particular
      Eligible Inventory involved, and the average actual sales price realized
      upon sales of Eligible Inventory shall

                                       6
<PAGE>

      become the new Retail Value with respect to the particular Time-Share
      Project in which such Eligible Inventory was sold. The foregoing
      notwithstanding, no revaluation shall take place with respect to any
      Eligible Inventory which has constituted a part of the Collateral for less
      than six (6) months. In the event that such recalculated Retail Value is
      less than the Retail Value originally established when Eligible Inventory
      from such Time-Share Project was contributed to the Borrowing Base, and as
      a result thereof a Borrowing Base Shortfall is created, Borrower shall
      comply with the Borrowing Base maintenance requirements of PARAGRAPH
      2.7(b) above.

      2.8 PREPAYMENT. Without the prior written consent of Lender, Borrower
shall not be entitled to prepay the Inventory Loan except in accordance with the
terms of this Agreement. Commencing on the Opening Prepayment Date applicable to
a given Advance, Borrower shall have the option to prepay such Advance in full
but not in part on any Installment Date, upon thirty (30) days prior written
notice. The foregoing to the contrary notwithstanding, any principal payments
required pursuant to PARAGRAPHS 2.7 OR 3.2 hereof shall not be considered
prepayments which are prohibited hereby, nor shall any prepayment resulting from
the application of (i) insurance proceeds following an insured casualty or (ii)
condemnation proceeds in the event any Units of Inventory are condemned, be
considered prepayments which are prohibited hereby.

      2.9 LOAN FEE; RENEWAL FEE; ADMINISTRATIVE FEE.

            (a) LOAN FEE. Borrower will pay to Lender the Loan Fee in accordance
      with the requirements set forth in the Schedule. The Loan Fee shall be
      earned by Lender upon approval of the Inventory Loan on substantially the
      terms contained in this Agreement, and shall be non-refundable.

            (b) RENEWAL FEE. In the event Primary Borrower elects to exercise
      the Extension Option, Primary Borrower shall pay to Lender on the Original
      Borrowing Term Expiration Date a fee ("RENEWAL FEE") equal to one percent
      (1.0%) of the difference between the Maximum Inventory Loan Amount and the
      outstanding principal balance of the Inventory Loan as of the date ten
      (10) days prior to the Original Borrowing Term Expiration Date.

            (c) ADMINISTRATIVE FEE. In the event Borrower requests more than one
      Advance in any given calendar month, Borrower shall pay to Lender a fee
      ("ADMINISTRATIVE FEE"), equal to $500 for each such additional Advance.

      2.10 APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS. Notwithstanding
anything in the Loan Documents to the contrary, the amount of all payments or
amounts received by Lender with respect to the Inventory Loan shall be applied
to the extent applicable under the Loan Documents: (a) first, to any past due
payments of interest on the Inventory Loan and to accrued interest on the
Inventory Loan through the date of such payment, including any default interest;
(b) then, to any late fees, overdue risk assessments, collection fees and
expenses and any other fees and expenses due to Lender under the Loan Documents
in connection with the Inventory Loan; and (c) last, the remaining balance, if
any, to the unpaid principal balance of the Inventory Loan; provided, however,
while an Event of Default or Incipient Default exists, each payment received
with respect to the Inventory Loan shall be applied to such amounts owed to
Lender by Borrower as Lender in its discretion may determine. In calculating
interest and applying payments as set forth above: (i) interest on the Inventory
Loan shall be calculated and collected through the date payment is actually
received by Lender; (ii) interest on the outstanding balance of the Inventory
Loan shall be charged during any grace period permitted under the Loan
Documents; (iii) at the end of each month, all past due interest and other past
due charges provided for under the Loan Documents with respect to the Inventory
Loan shall be added to the principal balance of the Inventory Loan; and (iv) to
the extent that Borrower makes a payment or Lender receives any payment or
proceeds of the Collateral for Borrower's benefit that is subsequently
invalidated, set aside or required to be repaid to any other person or entity,
then, to such extent, the Obligations in connection with the Inventory Loan
intended to be satisfied shall be revived and continue as if such payment or
proceeds had not been received by Lender, and Lender may adjust the Inventory
Loan balance in order to take into account such repayment, by restoring the
amount of the repayment to the outstanding balance of the Obligations (with the
particular Obligations deemed to have been revived to be such Obligations as
Lender, in its discretion, deems appropriate under the circumstances), giving
retroactive effect to the restoration of such particular Obligations as if the
payment required to be repaid had never been received by Lender. The provisions
of this PARAGRAPH 2.10 are also subject to the parties rights and obligations
under the Loan Documents as to the application of proceeds of the Collateral
following an Event of Default.

      2.11 BORROWER'S UNCONDITIONAL OBLIGATION TO MAKE PAYMENTS. Whether or not
the proceeds from the Collateral shall be sufficient for that purpose, Borrower
will pay when due all payments required to be made pursuant to any of the Loan
Documents, Borrower's obligation to make such payments being absolute and
unconditional.



                                       7
<PAGE>

3.    SECURITY

      3.1 GRANT OF SECURITY INTEREST IN COLLATERAL. To secure the Performance of
all of the Obligations, Borrower hereby grants to Lender a security interest in
and collaterally assigns to Lender the Collateral. Such security interest shall
be absolute, continuing, perfected, direct, first, exclusive and applicable to
all existing and future Advances and to all of the Obligations. In addition,
each Borrower acknowledges and agrees that, for purposes of administrative
convenience to Borrowers collectively, Borrowers have requested, and Lender has
agreed, to permit the Borrowing Base to be calculated on a consolidated basis,
with the further result that the determination of any Borrowing Base Shortfall
which would obligate Borrower to make the payments required by PARAGRAPH 2.7(b)
herein shall only occur if a Borrowing Base Shortfall exists on a consolidated
basis. The foregoing approach results in significant administrative conveniences
to each Borrower, in that each Borrower may benefit from over-collateralization
existing on a consolidated basis by virtue of the fact that such an approach
permits the streamlined release procedure described in first sentence of
PARAGRAPH 3.2 hereof. Accordingly, each Borrower hereby acknowledges that it has
received benefit from the consolidated Borrowing Base Reporting procedure
implemented by this Agreement, and each Borrower acknowledges that the security
interest granted in favor of Lender pursuant to this Agreement, and pursuant to
each of the Mortgages, shall secure, up to the full amount of the Borrowing Base
contributed by each such Borrower, the payment and performance of all
Obligations of each Borrower to Lender. Borrower further warrants and guarantees
the enforceability of Lender's security interest in the Collateral. Lender is
hereby appointed Borrower's attorney-in-fact to take any and all actions in
Borrower's name and/or on Borrower's behalf deemed necessary or appropriate by
Lender with respect to the collection and remittance of payments (including the
endorsement of payment items) received on account of the Collateral; provided,
however, that Lender shall not take any action which is described in PARAGRAPH
7.2(C) unless an Event of Default exists.

      3.2 RELEASE OF COLLATERAL. Borrower shall be entitled to sell or otherwise
dispose of those unsold Time-Share Interests constituting a portion of the
Collateral, and to obtain a partial release of such Time-Share Interests from
the Mortgage in favor of Lender without payment of a release fee, IF at the time
such release is requested: (i) no Event of Default or Incipient Default exists;
(ii) after giving effect to the proposed release of such Inventory, no Borrowing
Base Shortfall will exist or be created; and (iii) Borrower has requested Lender
in writing to release such items of Inventory. In the event that a proposed sale
or other disposition of Inventory will result in a Borrowing Base Shortfall,
then Lender shall only be obligated to release the Inventory being sold upon
satisfaction of the following conditions: (a) no Event of Default or Incipient
Default exists; (b) Borrower has paid a fee ("RELEASE FEE") in an amount equal
to twenty-five percent (25%) of the Retail Value which was allocated to such
item of Inventory at the time such item of Inventory was designated as Eligible
Inventory hereunder and contributed to the Borrowing Base; and (c) Borrower has
requested Lender in writing to release such Inventory. Borrower will prepare all
release documents which shall be in form and substance satisfactory to Lender,
and will deliver them to Lender for execution. Lender will send Borrower the
release documents within a reasonable time after satisfaction of the conditions
precedent specified in the foregoing sentence.

      3.3 BORROWING BASE REPORTING. At least two (2) Business Days prior to the
date any Advance is requested hereunder, or prior to the date upon which
Borrower is requesting a partial release of Time-Share Interests pursuant to
PARAGRAPH 3.2 hereof, Borrower shall provide to Lender a report (herein, the
"BORROWING BASE REPORT") with respect to each Time-Share Project in which unsold
Time-Share Interests make up a part of the Eligible Inventory upon which such
request for an Advance is based, or in which Time-Share Interests proposed to be
released are situated. A form of the Borrowing Base Report is attached hereto as
Exhibit B. Each Borrowing Base Report shall be prepared and presented on both a
consolidated and consolidating basis (i.e., each Borrowing Base Report shall
have a section describing, for all Borrowers, the aggregate of the Eligible
Inventory contributed by such Persons, with separate sections identifying
Eligible Inventory contributed by each individual Time-Share Project or other
form of development). Borrower will also deliver to Lender, promptly after
receipt of a written request for them, such other reports with respect to
Inventory constituting part of the Collateral as Lender may from time to time
reasonably require, provided that the information requested by Lender is readily
available on Borrower's record keeping systems, or can be developed from
information which is readily available. In the event that the information
requested by Lender is neither readily available on Borrower's record keeping
systems nor can it be developed from such readily available information, then
Borrower and Lender shall confer and attempt to identify alternate information
which is readily available to Borrower to be substituted for the information
requested.

      3.4 MAINTENANCE OF SECURITY. Borrower will deliver or cause to be
delivered to Lender and will maintain or cause to be maintained in full force
and effect throughout the Term (except as otherwise expressly provided in such
Loan Document), as security for the Performance of the Obligations, the Security
Documents and all other security required to be given to Lender pursuant to the
terms of this Agreement.


                                       8
<PAGE>

      4. CONDITIONS PRECEDENT TO ADVANCES; MINIMUM AMOUNT AND MAXIMUM FREQUENCY
OF ADVANCES; METHOD OF DISBURSEMENT

      4.1 DELIVERY OF LOAN DOCUMENTS AND DUE DILIGENCE ITEMS PRIOR TO INITIAL
ADVANCE. Lender's obligation to make the initial Advance shall be subject to and
conditioned upon the terms and conditions set forth in the following
subparagraphs and elsewhere in this Agreement, and Lender's obligation to make
each subsequent Advance hereunder shall be subject to satisfaction of the
following terms and conditions, to the extent applicable to any Subsidiary
Borrower not previously a party to this Agreement, or any Time-Share Project and
Eligible Inventory not previously contributed to the Borrowing Base:

            (a) LOAN DOCUMENTS. Borrower shall have delivered to Lender or
      caused to be delivered to Lender the following duly executed, delivered
      (where appropriate) and in form and substance satisfactory to Lender, not
      later than the Required Closing Date:

                  (i)   the Loan Documents;

                  (ii) UCC financing statements for filing and/or recording, as
      appropriate, where necessary to perfect the security interests in the
      Collateral;

                  (iii) the Mortgage applicable to each Time-Share Project in
      which unsold Time-Share Interests have been contributed as Collateral
      hereunder;

                  (iv)  the Title Policy applicable to each Mortgage;

                  (v) a favorable opinion or opinions from independent counsel
      for Borrower, which counsel shall be satisfactory to Lender and which
      opinion shall cover such matters as Lender may require, including, without
      limitation, the Minimum Opinion Matters pertaining to Borrower and the
      Time-Share Project (the foregoing notwithstanding, in the event Lender
      funds an Advance under the Inventory Loan upon the basis of an opinion
      delivered to Lender as to which Lender has not specifically reserved the
      right to require additional opinions or to have such opinion otherwise be
      supplemented, then such opinion shall be deemed acceptable regardless of
      whether each item included within the description of Minimum Opinion
      Matters has been addressed therein);

                  (vi)  the Third Party Consents, if any;

                  (vii) a request for the first Inventory Loan Advance in form
      and substance identical to EXHIBIT E-1; and

                  (viii)such other documents as Lender may reasonably  require
      to effect the intent and purposes of this Agreement.

            (b) ORGANIZATIONAL, TIME-SHARE PROJECT AND OTHER DUE DILIGENCE
      DOCUMENTS. Borrower shall have delivered to Lender (I) with respect to the
      initial Advance hereunder, prior to the earlier of (a) the date of the
      initial Advance or (b) the Required Closing Date; or (II) with respect to
      each subsequent Advance hereunder, at least ten (10) Business Days (unless
      a longer period is expressly specified) prior to the date such Advance is
      requested to be funded, the following items (in applying the following
      provisions, references to Borrower, a Time-Share Project, Title Policies,
      etc., shall be deemed to apply only to those Borrowers which have
      contributed a portion of the Collateral supporting the requested Advance
      and only to the Time-Share Projects from which such contributed Collateral
      is derived):

                  (i) the Articles of Organization of Borrower and (if any)
      other sureties for the Obligations and, if applicable, their respective
      managers, members and partners, to the extent any such entity is not a
      natural person;

                  (ii) the Resolutions of Borrower and (if any) other sureties
      for the Obligations and, if applicable, their respective managers, members
      and partners, to the extent any such entity is not a natural person,
      authorizing the execution and delivery of the Loan Documents, the
      transactions contemplated thereby and such other matters as Lender may
      reasonably require;

                  (iii) a certificate of good standing for Borrower and (if any)
      other sureties for the Performance of the Obligations and, if applicable,
      their respective managers, members and partners, to the extent any such
      entity is not a natural person, from the state of its organization;

                  (iv) at least fifteen (15) Business Days prior to the date of
      the Advance, a Phase I environmental assessment of the Time-Share Project;

                  (v)  evidence that all taxes and assessments on the Time-Share
      Project have been paid;

                  (vi) a title commitment or preliminary title report for the
      issuance of the Title Policy insuring the Mortgage together with copies of
      all documents referred to therein and, in the event responsibility for
      recordation of the Mortgage and such other matters as are involved in the
      escrow with respect thereto are to be handled by a title agent rather than
      by the Title Insurer through a direct operation, a closing

                                       9
<PAGE>

      protection letter issued to Lender with respect to the issuing title agent
      by the Title Insurer;

                  (vii) unless waived in writing by Lender, a 1997 ALTA/ACSM
      survey map of the Time-Share Project prepared by a licensed land surveyor
      acceptable to Lender, certified to Lender in writing and showing the
      Time-Share Project, evidence of access to the Time-Share Project, all
      easements necessary for the operation and use of the Time-Share Project,
      and such other details as Lender may reasonably require; and/or at
      Lender's option, a condominium map if any part of the Time-Share Project
      has been dedicated to a condominium regime;

                  (viii) all permits, licenses, approvals and certificates for
      the occupancy, use and operation of the Time-Share Project for time-share
      and other intended uses, including any necessary architectural committee
      approvals (and, with respect to any newly-completed construction,
      including specifically the certificate of occupancy or other applicable
      form of final governmental approval evidencing that such construction has
      been satisfactorily completed), but excluding the Minimum Required
      Time-Share Approvals;

                  (ix) evidence that the Time-Share Project is zoned for
      time-share and other intended uses and that all approvals required for
      such uses under any covenants, conditions and restrictions have been
      obtained, which evidence shall be deemed satisfied by Borrower providing
      to Lender a copy of the certificate of occupancy (or other applicable form
      of final governmental approval) for the individual Time-Share Project, in
      the absence of any direct evidence indicating non-compliance with
      applicable zoning, the absence of any necessary approval, or a violation
      of any existing covenant, condition or restriction;

                  (x)   at least  fifteen (15)  Business Days prior to such
      Advance, the Minimum Required Time-Share Approvals;

                  (xi) at least fifteen (15) Business Days prior to such
      Advance, a copy of the Time-Share Program Governing Documents;

                  (xii) the Insurance Policies;

                  (xiii) at least fifteen (15) Business Days prior to such
      Advance, evidence that the Time-Share Project is not located within a
      flood prone area or, if within a flood zone, evidence that flood insurance
      has been obtained;

                  (xiv) if requested by Lender, at least fifteen (15) Business
      Days prior to such Advance, evidence of the current and continued
      availability of utilities necessary to serve the Time-Share Project for
      time-share and other intended uses;

                  (xv) if requested by Lender, at least fifteen (15) Business
      Days prior to such Advance, evidence of access to and parking for the
      Time-Share Project adequate for time-share and hotel uses;

                  (xvi) if requested by Lender, a copy of all marketing
      contracts, management contracts, service contracts, operating agreements,
      equipment leases, space leases and other agreements pertaining primarily
      to the Time-Share Project and which are necessary for the sale, operation
      and intended time-share use of the Time-Share Project and are not
      otherwise required pursuant to another item in this paragraph;

                  (xvii) evidence that each owner of a Time-Share Interest will
      have available to it the quiet and peaceful enjoyment of the Time-Share
      Interest (including promised amenities and necessary easements) owned by
      it which cannot be disturbed so long as such owner is not in default of
      its obligations to pay the purchase price of its Time-Share Interest, to
      pay assessments to the Time-Share Association, and to comply with
      reasonable rules and regulations pertaining to the use of the Time-Share
      Interest ("QUIET ENJOYMENT RIGHTS");

                  (xviii)     the items required pursuant to EXHIBIT E; and

                  (xix) such other items as Lender requests which are reasonably
      necessary to evaluate the request for the Advance and the satisfaction of
      the conditions precedent to the Advance.

            (c) CREDIT REPORTS; SEARCH REPORTS; SITE INSPECTIONS. Lender shall
      have received, in form and substance satisfactory to Lender, the results
      of UCC searches with respect to Borrower and the Time-Share Association
      and lien, litigation, judgment and bankruptcy searches for Borrower and
      (if existing) the Time-Share Association conducted in such jurisdictions
      as Lender deems appropriate and having a currency meeting Lender's
      requirements. In addition, a member of Lender's credit department shall
      have visited the Time-Share Project and shall be satisfied with the
      results of such inspection.

            (d) STRUCTURAL AND MECHANICAL. If requested in writing by Lender,
      Borrower shall

                                       10
<PAGE>

      provide to Lender, at Borrower's sole cost and expense, a structural
      inspection report and mechanical inspection report covering the Time-Share
      Project prepared by a construction consultant or engineer acceptable to
      Lender. The results of such structural and mechanical inspection must be
      satisfactory to Lender. In the event the structural and mechanical
      inspection report reveals that repairs must be made to the Time-Share
      Project, Borrower's budget shall include the cost of such repairs.

            (e) YEAR 2000 COMPLIANCE. Evidence satisfactory to Lender that
      Primary Borrower and each Subsidiary Borrower have taken all necessary
      actions to cause each such Person's computer-based systems to be year 2000
      compatible in all material respects (as such concept is more fully
      described in PARAGRAPH 5.15 hereof).

      4.2 ADDITIONAL CONDITIONS PRECEDENT FOR SUBSEQUENT ADVANCES. For each
Advance, Lender's obligation to make such Advance shall be subject to the terms
and conditions set forth in EXHIBIT E, including delivery of the items called
for therein at least five (5) Business Days prior to the date of such Advance.

      4.3 GENERAL CONDITIONS PRECEDENT TO ALL ADVANCES. Lender's obligation to
fund any Advance is subject to and conditioned upon the additional terms and
conditions set forth in the following subparagraphs being satisfied at the time
of such Advance:

            (a) No material adverse change shall have occurred in the Time-Share
      Project, the Collateral, the business or financial condition of Borrower
      (since the date of the latest financial and operating statements given to
      Lender by or on behalf of Borrower), or the ability of Borrower to Perform
      the Obligations.

            (b) There shall have been no material, adverse change in the
      warranties and representations made in the Loan Documents by Borrower
      and/or any surety for the Performance of the Obligations.

            (c) Neither an Event of Default nor Incipient Default shall have
      occurred and be continuing.

            (d) The interest rate applicable to the Advance (before giving
      effect to any savings clause) will not exceed the maximum rate permitted
      by the Applicable Usury Law.

            (e) Borrower shall have paid to Lender the Loan Fee and any other
      applicable fees which are required to be paid at the time of the Advance.

            (f) To the extent that one or more of the Borrowers have requested
      that they be permitted to make payments directly to the applicable Title
      Insurers amounts which include, but are not necessarily limited to the
      premium payable with respect to the issuance of the Title Policies in
      connection with any prior disbursement of an Advance, Lender shall not be
      obligated to fund a subsequent Advance until Borrower has made such
      payment and Lender has received all Title Policies required hereunder. In
      the event that Borrower for any reason fails to make such payment to the
      Title Insurer, Lender shall be entitled to make such payment directly in
      order to cause the Title Policy to be issued, and the amount of any such
      payment shall constitute an Obligation hereunder.

      4.4 CONDITIONS SATISFIED AT BORROWER'S EXPENSE. The conditions to Advances
shall be satisfied by Borrower at its expense.

      4.5 MINIMUM AMOUNT AND MAXIMUM FREQUENCY OF ADVANCES. Advances shall be
made in amounts not less than the amounts identified in the Schedule as the
Minimum Advance Amount. Advances shall be made no more frequently in any
calendar month than the frequency identified in the Schedule as the Maximum
Advance Frequency.

      4.6 DISBURSEMENT OF ADVANCES. Advances may be payable to Borrower; or if
requested by Borrower and approved in writing by Lender, to others, either
severally or jointly with Borrower, for the credit or benefit of Borrower.
Advances shall be disbursed by wire transfer or, at Borrower's option exercised
by written request to Lender, by check or drafts. Borrower will pay Lender's
reasonable charge in connection with any wire transfer, and Lender's current
charge is identified in the Schedule as the Wire Transfer Fee. Lender may, at
its option, withhold from any Advance any sum (including costs and expenses)
then due to it under the terms of the Loan Documents or which Borrower would be
obligated to reimburse Lender pursuant to the Loan Documents if first paid
directly by Lender.

      4.7 NO WAIVER. Although Lender shall have no obligation to make an Advance
unless and until all of the conditions precedent to the Advance have been
satisfied, Lender may, at its discretion, make Advances prior to that time
without waiving or releasing any of the Obligations.

5.    BORROWER'S REPRESENTATIONS AND WARRANTIES

      Borrower hereby represents and warrants to Lender that:

      5.1 GOOD STANDING. Borrower is and duly organized, validly existing and in
good standing as a business organization of the type identified in the Schedule

                                       11
<PAGE>

as Borrower's Type of Business Organization under the laws of the state
identified in the Schedule as Borrower's State of Organization and is in good
standing and authorized to do business in the jurisdiction where the Time-Share
Project is located and in each jurisdiction where Borrower is at any time
selling Time-Share Interests or where at any time the location or nature of its
properties or its business makes such good standing and qualification necessary.
Borrower has full power and authority to carry on its business and own its
property.

      5.2 POWER AND AUTHORITY; ENFORCEABILITY. Borrower has full power and
authority to execute and deliver the Loan Documents and to Perform the
Obligations. All action necessary and required by Borrower's Articles of
Organization and all other Legal Requirements for Borrower to obtain the
Inventory Loan, to execute and deliver the Loan Documents which have been or
will be executed and delivered in connection with the Loan Documents and to
Perform the Obligations has been duly and effectively taken. The Loan Documents
are, and to Borrower's knowledge shall be, legal, valid, binding and enforceable
against Borrower; and do not violate the Applicable Usury Law or constitute a
default or result in the imposition of a lien under the terms or provisions of
any agreement to which Borrower is a party. Except for the Third Party Consents
delivered pursuant to PARAGRAPH 4.1(A) and the consents evidenced by the
Resolutions delivered pursuant to PARAGRAPH 4.1(B), no consent of any
governmental agency or any other person not a party to this Agreement is or will
be required as a condition to the execution, delivery or enforceability of the
Loan Documents.

      5.3 BORROWER'S PRINCIPAL PLACE OF BUSINESS. Borrower's principal place of
business and chief executive office are located at the addresses identified in
the Schedule as Borrower's Principal Place of Business and Borrower's Chief
Executive Office.

      5.4 NO LITIGATION. There is no action, litigation or other proceeding
pending or, to Borrower's knowledge, threatened before any arbitration tribunal,
court, governmental agency or administrative body against Borrower which could
reasonably be expected to result in a Material Adverse Effect, other than with
respect to actions or proceedings involving or relating to the operation of an
individual Time-Share Project only (e.g., personal injury lawsuits) which are
adequately covered by insurance with respect to which the applicable insurance
carrier has neither denied coverage nor delivered to the applicable Borrower a
letter reserving its rights with respect to the claims asserted. Borrower will
promptly notify Lender if any such action, litigation or proceeding is commenced
or threatened, and the foregoing representation and warranty shall be deemed to
be true and accurate at any given time after giving effect to all disclosures of
any hereafter-arising matters of which Borrower has provided notice to Lender
after the date of this Agreement.

      5.5 COMPLIANCE WITH LEGAL REQUIREMENTS. Borrower has complied with all
Legal Requirements, including, without limitation all Legal Requirements of (a)
the state in which the Time-Share Project is located and (b) all other
governmental jurisdictions in which either (i) the Time-Share Project is located
or (ii) Time-Share Interests will be sold or offered for sale, except to the
extent that the failure of Borrower to have complied with any such Legal
Requirements would not reasonably be expected to have a Material Adverse Effect.

      5.6 NO MISREPRESENTATIONS. The Loan Documents and all certificates,
financial statements and written materials furnished to Lender by or on behalf
of Borrower in connection with the Inventory Loan do not contain as of the date
furnished to Lender any untrue statement of a material fact or omit to state a
fact which materially adversely affects or in the future may materially
adversely affect the Time-Share Project, the Collateral, the business or
financial condition of Borrower, or the ability of Borrower to Perform the
Obligations.

      5.7 NO DEFAULT FOR THIRD PARTY OBLIGATIONS. Borrower is not in default
under any other agreement evidencing, guaranteeing or securing borrowed money or
a receivables purchase financing or in violation of or in default under any
material term in any other material agreement, Inventory, order, decree or
judgment of any court, arbitration or governmental authority to which it is a
party or by which it is bound.

      5.8 PAYMENT OF TAXES AND OTHER IMPOSITIONS. Borrower has filed all tax
returns and, subject to the provisions of PARAGRAPH 9.21, has paid all
Impositions, if any, required to be filed by it or paid by it, including real
estate taxes and assessments relating to the Time-Share Project or the
Collateral.

      5.9 SALES ACTIVITIES. Prior to the date of this Agreement, Borrower has
sold Time-Share Interests and offered Time-Share Interests for sale only in the
jurisdictions identified in the Schedule as the Jurisdictions Where Sales And/or
Offers to Sell Have Occurred.

      5.10 TIME-SHARE INTEREST NOT A SECURITY. Borrower has not sold or offered
for sale any Time-Share Interest as an investment. Neither the sale nor the
offering for sale of any Time-Share Interest will constitute the sale or the
offering for sale of a security under any applicable law.

      5.11 ZONING COMPLIANCE. Neither time-share use nor other transient use and
occupancy of the Time-Share Project violates or constitutes or will violate or
constitute a non-conforming use or require a variance under any private covenant
or restriction or any zoning, use or similar law, ordinance or regulation
affecting the use or occupancy of the Time-Share Project.

      5.12 ELIGIBLE INVENTORY. Each unsold Time-Share Interest which is
encumbered in favor of Lender pursuant to this Agreement and against which an
Advance

                                       12
<PAGE>

is requested, or which is encumbered in favor of Lender pursuant to Borrowers'
obligations under PARAGRAPH 2.7 shall constitute Eligible Inventory at the time
such Advance is made. Borrower has Performed in all material respects all of its
obligations to Purchasers, to the extent that Borrower was obligated to have
performed such obligations as of the date hereof, and with respect to any
obligations to Purchasers as to which performance by Borrower is to occur in the
future, Borrower is not aware of any fact or circumstance which causes it to
believe that it will be unable to timely perform those obligations.

      5.13 ASSOCIATION; ASSESSMENTS AND RESERVES. Each Purchaser, upon the
closing of the purchase by such Person of a Time-Share Interest, automatically
became a member of the applicable Time-Share Association, and is thereafter
entitled to remain a member of the Time-Share Association and be entitled to
vote on the affairs thereof, subject only to retaining ownership of a Time-Share
Interest. At all times throughout the Term: (a) the Time-Share Association will
have authority to levy annual assessments to cover the costs of maintaining and
operating the Time-Share Project; (b) to Borrower's knowledge, the Time-Share
Association will be solvent; (c) to Borrower's knowledge, levied assessments
will be adequate to cover the current costs of maintaining and operating the
Time-Share Project and to establish and maintain a reasonable reserve for
capital improvements; and (d) to Borrower's knowledge, there will be no events
which could give rise to a material increase in such costs, except for additions
of subsequent phases of the Time-Share Project that will not materially increase
assessments.

      5.14 TITLE TO AND MAINTENANCE OF COMMON AREAS AND AMENITIES. Except as
otherwise permitted and disclosed by the Time-Share Program Governing Documents:
(a) the Time-Share Association or the owners of Time-Share Interests in common
will at all times own the furnishings in the Units and all the common areas in
the Time-Share Project and other amenities which have been promised or
represented as being available to Purchasers (except to the extent of those
amenities which are available to the Purchasers pursuant to a lease or form of
access other than ownership, which alternate form of access was disclosed to the
Purchasers in the Time-Share Program governing documents), free and clear of
liens and security interests except for the Permitted Encumbrances; (b) no part
of the Time-Share Project is or will be subject to partition by the owners of
Time-Share Interests (provided, however, that individual owners of Time-Share
Interests have the right to partition those Time-Share Interests, which
partition does not affect the Time-Share Project taken as a whole); and (c) all
access roads and utilities and off-site improvements necessary to the use of the
Time-Share Project will have been dedicated to and/or accepted by the
responsible governmental authority or utility company or are owned by an
association of owners of property in a larger planned development or
developments of which the Time-Share Project is a part.

      5.15 YEAR 2000. Borrower has taken all action reasonably believed to be
sufficient to assure that there will be no material adverse change to Borrower's
business by reason of the advent of the year 2000, including without limitation
that all computer-based systems, embedded microchips and other processing
capabilities effectively recognize and process dates after April 1, 1999.

      5.16 SURVIVAL AND ADDITIONAL REPRESENTATIONS AND WARRANTIES. The
representations and warranties and contained in this ARTICLE 5 are in addition
to, and not in derogation of, the representations and warranties contained
elsewhere in the Loan Documents and shall be deemed to be made and reaffirmed
prior to the making of each Advance.

6.    BORROWER'S COVENANTS

      6.1   BORROWER'S AFFIRMATIVE COVENANTS.

            (a) GOOD STANDING. Borrower will maintain its existence as a
      business organization of the type described below when it has signed this
      Agreement, duly organized, validly existing and in good standing as the
      type of organization identified in the Schedule as Borrower's Type of
      Business Organization under the laws of the state identified in the
      Schedule as State of Organization and remain in good standing and
      authorized to do business in the jurisdiction where the Time-Share Project
      is located and in each jurisdiction where Borrower is then selling
      Time-Share Interests or where at any time the location or nature of its
      properties or its business then makes such good standing and qualification
      necessary. Borrower will maintain full authority to Perform the
      Obligations and to carry on its business and own its property.

            (b) COMPLIANCE WITH LEGAL REQUIREMENTS. Borrower will comply with
      all Legal Requirements in all material respects, including, without
      limitation, all Legal Requirements of the state in which the Time-Share
      Project is located and all other governmental jurisdictions in which the
      Time-Share Project is located or in which Time-Share Interests will be
      sold or offered for sale.

            (c) INSURANCE. Borrower will pay the cost of and will maintain and
      deliver to Lender evidence of insurance policies required by Lender which
      cover such risks, are written by insurers and are in amounts and on forms
      satisfactory to Lender. The foregoing notwithstanding, to the extent that
      it is the responsibility of any Time-Share Association to

                                       13
<PAGE>

      maintain insurance which is required by Lender, Borrower shall be
      permitted to perform its obligations pursuant to this PARAGRAPH 6.1(c) by
      delivering evidence to Lender confirming that the necessary insurance is
      being maintained by such Time-Share Association; provided, however, that
      with respect to any Time-Share Association as to which one or more
      Borrower has the power to direct and control its activities, such Borrower
      shall be responsible for providing satisfactory insurance in the event
      such Time-Share Association has failed to do so.

            (d)   REPORTS.

                  (i) FINANCIAL INFORMATION. Commencing with the period ending
      December 31, 1999, Borrower will furnish or cause to be furnished to
      Lender within one hundred twenty (120) days after each fiscal year of the
      subject, a copy of the current annual financial statements of Borrower and
      of each Time-Share Association; and will furnish or cause to be furnished
      to Lender within forty-five (45) days after each interim quarterly fiscal
      period of the subject, a copy of the current financial statements of
      Borrower for the period commencing with the first day of the fiscal year
      and concluding with such quarter end. Such financial statements shall
      contain a balance sheet as of the end of the relevant fiscal period and
      statements of income and of cash flow for such fiscal period (together, in
      each case, with the comparable figures for the corresponding period of the
      previous fiscal year), all in reasonable detail. All financial statements
      shall be prepared in accordance with generally accepted accounting
      principles, consistently applied. All financial statements of Borrower and
      of each Time-Share Association shall be certified by the chief financial
      officer of such entity. Annual statements of Borrower and of each
      Time-Share Association shall be audited, certified by a recognized firm of
      certified public accountants reasonably satisfactory to Lender. Anything
      in this PARAGRAPH 6.1(D)(I) to the contrary notwithstanding, the following
      two conventions shall be applied to Borrower's reporting obligations
      hereunder. With respect to Borrower's required financial information
      hereunder, Borrower shall be permitted to satisfy its reporting
      obligations by providing a copy of Primary Borrower's consolidated
      financial statements as filed with the U.S. Securities and Exchange
      Commission (the "SEC"), as long as those reports are in compliance with
      then existing SEC reporting requirements for publicly traded companies.
      With respect to the financial information required to be provided for the
      various Time-Share Associations, in the event that no Borrower is in
      control of a given Time-Share Association, then Borrower's obligation to
      provide the foregoing financial information shall only require Borrower to
      use its reasonable good faith efforts to obtain and deliver to Lender the
      information requested. In the event that Primary Borrower shall ever cease
      to be a reporting company with the SEC, with the result that the financial
      statements provided by Primary Borrower hereunder shall no longer be
      Primary Borrower's consolidated financial statements as filed with the
      SEC, then upon such occurrence Primary Borrower shall be obligated to
      deliver to Lender, together with such financial statements as Primary
      Borrower does deliver to Lender, a certificate signed by Borrower's chief
      executive officer and chief financial officer stating that, to the best of
      such person's knowledge, there exists no Event of Default or Incipient
      Default or, if any such Event of Default or Incipient Default exists,
      specifying the nature and period of its existence and what action Borrower
      proposes to take with respect to it. Such certificate shall state
      specifically that Borrower is in compliance with PARAGRAPHS 6.1(C), 6.2(B)
      and 6.2(C), along with any required financial covenants. For purposes of
      this paragraph, in the case of a partnership or limited liability company,
      "CHIEF EXECUTIVE OFFICER" of an entity shall mean the general partner,
      member or manager having primary responsibility for the operations of such
      entity; and "CHIEF FINANCIAL OFFICER" of such an entity shall mean the
      general partner, member or manager having primary responsibility for the
      finances of such entity.

                  (ii) LITIGATION. Borrower will promptly notify Lender if any
      action, litigation or other proceeding becomes pending or, to Borrower's
      knowledge, threatened before any arbitration tribunal, court, governmental
      agency or administrative body against Borrower, which could reasonably be
      expected to result in a Material Adverse Effect (exclusive of those items
      which are related to an individual Time-Share Project and with respect to
      which adequate insurance coverage [which has not been denied or reserved
      against] exist, in the manner described in PARAGRAPH 5.4 hereof).

                  (iii) SALES REPORTS. On or before the fifteenth (15th) day
      after the end of each month, Borrower will cause to be furnished to
      Lender, if requested by Lender in writing, a sales report showing the
      number of sales and closings of Time-Share Interests and the aggregate
      dollar amount thereof, including down payments, during such month.

                                       14
<PAGE>

                  (iv) TIME-SHARE PROJECT AND SALES INFORMATION. Borrower will
      deliver current price lists for Time-Share Interests to Lender from to
      time to time within ten (10) Business Days after receipt of a written
      request from Lender to do so. Borrower will deliver to Lender from time to
      time, as available and promptly upon amendment or effective date, upon
      written request from Lender for such information, sales literature,
      registrations/ consents to sell, and final public reports/public offering
      statements/ prospectuses. Borrower will deliver to Lender, upon written
      request from Lender for such information, any changes which Borrower
      proposes or any other person having the power to do so proposes be made to
      the Time-Share Program Governing Documents last delivered to Lender,
      together with a description and explanation of the changes; and other
      items requested by Lender which relate to the Time-Share Interests.

                  (v) RIGHT TO INSPECT. Borrower will at its expense permit
      Lender and its representatives at all reasonable times to inspect the
      Time-Share Project and to inspect, audit and copy Borrower's books and
      records.

                  (vi) TIME-SHARE ASSOCIATION BUDGETS. Borrower will submit to
      Lender (if the same had been requested by Lender in writing) within ten
      (10) days after each is available, proposed annual maintenance and
      operating budgets of the Time-Share Association, certified to be adequate
      by the Time-Share Manager (or if there is not a Time-Share Manager, by an
      authorized officer of the Time-Share Association) and a statement of the
      annual assessment to be levied upon the owners of Time-Share Interests;
      and will use reasonable good faith efforts to cause to be made available
      to Lender for inspection, auditing and copying, upon Lender's request, the
      books and records of the Time-Share Association.

                  (vii) MATERIAL INCREASES TO ASSESSMENTS. If Borrower has
      knowledge or has reason to believe that an event (other than general
      changes in the economy) has occurred or could occur which could give rise
      to a material increase in assessments to cover the then current costs of
      operating the Time-Share Project and to establish and maintain a
      reasonable reserve for capital improvements to the Time-Share Project, it
      will notify Lender of the occurrence of such event.

                  (viii) ADDITIONAL INFORMATION. Borrower will deliver to Lender
      the reports and other information required pursuant to PARAGRAPH 3.3, and
      Borrower will make available such further information as Lender may from
      time to time reasonably request.

            (e)   [INTENTIONALLY NOT USED.]

            (f) PAYMENT OF TAXES AND OTHER IMPOSITIONS. Subject to the
      provisions of PARAGRAPH 9.21, Borrower will file all tax returns and will
      pay all Impositions, if any, required to be filed by it or paid by it,
      including real estate taxes and assessments relating to the Time-Share
      Project or the Collateral. Borrower will provide to Lender (if Lender has
      requested in writing that Borrower provide such information) not more than
      thirty (30) days after such Impositions required to be paid pursuant to
      the preceding sentence become delinquent evidence that all Impositions
      required to be paid pursuant to the preceding sentence on the Units and
      Time-Share Project common areas and related amenities have been paid in
      full.

            (g) PAYMENT OF IMPOSITIONS. Borrower will promptly pay upon demand
      all Impositions imposed upon Lender by any state of the United States or
      political subdivision thereof or the United States by reason of the Loan
      Documents, the Collateral and/or any sale, rental, use, delivery or
      transfer of title to the Collateral, other than any tax measured by net
      income payable by Lender to any State of the United States or political
      subdivision thereof or to the United States of America under SECTION 11 OR
      1201 of the Internal Revenue Code, as amended, in consequence of the
      receipt of payments provided for in the Loan Documents. If it is unlawful
      for Borrower to pay such Impositions, Borrower shall not be required to
      pay such Impositions; but Lender may demand payment of such additional
      amount as is necessary to maintain Lender's yields on the Inventory Loan
      in either a single payment or at Lender's option, in installment payments,
      and Borrower will pay such amount upon demand. If it is unlawful to pay
      such additional amount, Borrower shall not be required to pay it; but
      Lender may demand immediate payment of the Obligations in full, and
      Borrower will pay the Obligations in full within sixty (60) days after
      such demand. If Lender has not received evidence satisfactory to it from
      Borrower that such Impositions have been paid by Borrower within five (5)
      Business Days after demand was made upon Borrower to make such payment,
      Lender may, at its option, pay the same, and Borrower shall immediately
      reimburse Lender for such sums so expended, together with interest at the
      Default Rate.

            (h) FURTHER ASSURANCE. Borrower will execute or cause to be executed
      all

                                       15
<PAGE>

      documents and do or cause to be done all acts reasonably necessary for
      Lender to perfect or evidence and to continue the perfection of the liens
      and security interest of Lender in the Collateral or otherwise to
      reasonably effectuate the intent and purposes of the Loan Documents.

            (i) FULFILLMENT OF OBLIGATIONS TO PURCHASERS. Borrower will fulfill,
      and will cause its Affiliates, agents and independent contractors at all
      times to fulfill, all their respective material obligations to Purchasers.
      Borrower will Perform all of its material obligations under the Time-Share
      Program Consumer Documents and the Time-Share Program Governing Documents.

            (j) MATERIAL INCREASES TO ASSESSMENTS. Borrower (i) will use
      reasonable good faith efforts to cause the Time-Share Association to (A)
      discharge its obligations under the Time-Share Program Governing Documents
      and (B) maintain a reasonable reserve for capital improvements to the
      Time-Share Project; and (ii) so long as Borrower controls the Time-Share
      Association, will cause each such Time-Share Association to maintain a
      budget requiring the payment of dues and assessments which are designed,
      on an annual basis, to make available sufficient funds to adequately
      provide for the maintenance and operating expenses incurred by the
      Time-Share Association, together with a reasonable reserve for capital
      improvements and the amount of any installment of real property taxes
      currently due and payable with respect to the Time-Share Project and
      related amenities, and in the event that, as a result of unexpected
      contingencies, the amount budgeted in any given year fails to adequately
      provide for the foregoing, Borrower shall cause such Time-Share
      Association to take reasonable steps, either in the form of a special
      assessment or through an increase in the annual assessment for upcoming
      years, in order to make-up for any budgetary shortfalls.

            (k) MAINTENANCE OF TIME-SHARE PROJECT AND OTHER PROPERTY. Borrower
      will maintain or cause to be maintained in good condition and repair all
      common areas in the Time-Share Project and other on-site amenities which
      have been promised or represented as being available to Purchasers and
      which are not the responsibility of the Time-Share Association to maintain
      and repair and, to the extent owned by Borrower or an Affiliate of
      Borrower, all portions of improvements in which Units are located and are
      not part of the Time-Share Project. Borrower will maintain or cause the
      Time-Share Association to maintain a reasonable reserve to assure
      compliance with the terms of the foregoing sentence, to the extent that
      Borrower is in control of the applicable Time-Share Association. In
      applying the foregoing provision, Borrower shall be permitted to implement
      the funding of necessary reserves on a staged basis, through increases in
      applicable Time-Share Association dues over a period of one or more years,
      as deemed appropriate by Borrower in its reasonable and prudent business
      judgment, to the extent that such increases would reasonably be expected
      to cause sufficient reserve amounts to be available on or before the date
      the expenditure of funds from such reserves was anticipated to occur. In
      the event Borrower is no longer in control of such Time-Share Association,
      Borrower shall use reasonable good faith efforts to cause such Time-Share
      Association to include within its budget a reasonable reserve to assure
      compliance with the terms of this PARAGRAPH 6.1(K).

            (l) MAINTENANCE OF LARGER TRACT. To the extent either the Time-Share
      Project is part of a larger common ownership regime or planned development
      or parts of buildings in which Units are located are not part of the
      Time-Share Project, Borrower will pay its share of such common expenses as
      has been allocated to the Inventory. Borrower will use commercially
      reasonable efforts to cause all such property which is not part of the
      Time-Share Project to be professionally managed in a first class manner.

            (m) YEAR 2000. Borrower shall take all action reasonably believed to
      be sufficient to assure that there will be no material adverse change to
      Borrower's business by reason of the advent of the year 2000, including
      without limitation that all computer-based systems, embedded microchips
      and other processing capabilities effectively recognize and process dates
      after April 1, 1999. At Lender's request, Borrower shall provide to Lender
      assurance reasonably acceptable to Lender that Borrower's computer-based
      systems, embedded microchips and other processing capabilities are year
      2000 compatible.

            (n) TANGIBLE NET WORTH. Primary Borrower shall maintain, on a
      consolidated basis, Tangible Net Worth (as hereafter defined) in an amount
      of not less than $170,000,000. "TANGIBLE NET WORTH" shall be defined as
      Primary Borrower's stockholders' equity, on a consolidated basis, LESS the
      amount of any intangible assets shown on Primary Borrower's consolidated
      balance sheet. The foregoing covenant shall be tested quarterly,
      commencing December 31, 1999, concurrently with the delivery of Primary
      Borrower's quarterly and

                                       16
<PAGE>

      annual financial information to the SEC, and on the basis of the financial
      information reported to the SEC.

            (o) LEVERAGE RATIO. Primary Borrower shall maintain, on a
      consolidated basis, a ratio of total liabilities to Tangible Net Worth of
      not greater than 6.0:1.0. The foregoing covenant shall be tested
      quarterly, commencing December 31, 1999, simultaneously with, and on the
      basis of, Primary Borrower's financial information as reported to the SEC.

            (p) NET PROFIT MARGIN. Primary Borrower shall maintain, on a
      consolidated basis, a "Net Profit Margin" (as hereafter defined) of at
      least five percent (5%). "NET PROFIT MARGIN" shall be defined, for any
      period of measurement, as Primary Borrower's consolidated net income
      during such period divided by Primary Borrower's consolidated gross
      revenue during the same period (with respect to the determination of both
      net income and gross revenues, excluding the effect of any extraordinary
      gains or losses and any other non-recurring items not in the ordinary
      course of business, as determined in accordance with GAAP). The foregoing
      covenant shall be tested quarterly, commencing December 31, 1999, on the
      basis of the trailing two fiscal quarters most recently completed as of
      each test date, on the basis of Primary Borrower's financial information
      as reported to the SEC.

      6.2   BORROWER'S NEGATIVE COVENANTS.

            (a) CHANGE IN BORROWER'S NAME OR PRINCIPAL PLACE OF BUSINESS.
      Borrower will not change its name or move its principal place of business
      or chief executive office except upon not less than sixty (60) days prior
      written notice to Lender.

            (b) RESTRICTIONS ON ADDITIONAL INDEBTEDNESS. Borrower will not incur
      any additional indebtedness which indebtedness is in any manner secured by
      a lien on all or any part of the Inventory.

            (c) RESTRICTIONS ON LIENS OR TRANSFERS. Borrower, without the prior
      written consent of Lender, will not: (i) sell, convey, lease, pledge,
      hypothecate, encumber or otherwise transfer any security for the
      Performance of the Obligations, except to the extent Borrower is permitted
      to sell unsold Inventory constituting a portion of the Collateral and to
      obtain releases from Lender with respect to such sales, in accordance with
      PARAGRAPH 3.2 hereof; (ii) permit or suffer to exist any liens, security
      interests or other encumbrances on the Inventory, except for the Permitted
      Encumbrances and liens and security interests expressly granted to Lender;
      (iii) sell, convey, lease, transfer or dispose of all or substantially all
      of its assets to another entity; or (iv) enter into any merger,
      consolidation, or other form of corporate reorganization, unless Borrower
      is the surviving corporation of such merger, consolidation or
      reorganization. The foregoing notwithstanding, nothing in this PARAGRAPH
      6.2(C) is intended to restrict or otherwise prohibit the ability of
      Primary Borrower to cause any Affiliate to be merged with or into Primary
      Borrower, as long as Primary Borrower is the surviving entity of such
      merger.

            (d) NO SALES ACTIVITIES PRIOR TO APPROVAL. Borrower will not sell
      any Time-Share Interest or offer any Time-Share Interest for sale in any
      jurisdiction, unless: (i) Borrower has delivered to Lender true and
      complete copies of the Minimum Required Time-Share Approvals required in
      such jurisdiction for its proposed conduct and all other evidence required
      by Lender that Borrower has complied in all material respects with the
      Legal Requirements of such jurisdiction governing its proposed conduct;
      and (ii) Borrower has delivered to Lender the Time-Share Program Consumer
      Documents AND the Time-Share Program Governing Documents which Borrower is
      using in connection with the Time-Share Project and the sale or offering
      for sale of Time-Share Interests in such jurisdiction and such documents
      have been approved by Lender, which approval shall not be unreasonably
      withheld.

            (e) NO MODIFICATION OF TIME-SHARE DOCUMENTS. Borrower will not
      cancel or materially modify, or consent to or suffer to exist any
      cancellation or material modification of any Time-Share Program Governing
      Document. The foregoing notwithstanding, the following events shall not be
      deemed a material modification to any Time-Share Program Governing
      Document requiring the consent of Lender hereunder: (1) the addition of
      Units to any Time-Share Program, to the extent such Units were
      contemplated to be added in stages as an individual Time-Share Project was
      developed, or (2) a conversion of all or a portion of the rights in a
      given Time-Share Project from a structure in which such ownership rights
      are characterized as Time-Share Interests which are identifiable to a
      specific Unit and/or period of time to a structure in which such ownership
      rights are characterized as "points" or other comparable form which may or
      may not be identifiable to a specific Unit and/or period of time, in the
      manner from time to time implemented by Borrower with respect to the

                                       17
<PAGE>

      program that Primary Borrower refers to as "Club Sunterra," provided that
      the resulting interests in each Time-Share Project constitute separately
      identifiable and legally described direct ownership interests in real
      property.

            (f) MAINTENANCE OF LARGER TRACT. To the extent either the Time-Share
      Project is part of a larger common ownership regime or planned development
      or parts of buildings in which Units are located are not part of the
      Time-Share Project, for the period during which Borrower is in control of
      the larger common ownership regime or planned development, Borrower will
      not permit common expenses to be allocated to the Time-Share Project in an
      unreasonably disproportionate manner.

      6.3 SURVIVAL OF COVENANTS. The covenants contained in this ARTICLE 6 are
in addition to, and not in derogation of, the covenants contained elsewhere in
the Loan Documents and shall be deemed to be made and reaffirmed prior to the
making of each Advance.

7.    DEFAULT

      7.1 EVENTS OF DEFAULT. The occurrence of any of the following events or
conditions shall constitute an Event of Default by Borrower under the Loan
Documents:

            (a) failure of Lender to receive from Borrower within five (5)
      Business Days of the date when due and payable (i) any amount payable
      under the Note or (ii) any other payment due under the Loan Documents,
      except for the payment due at the Maturity Date for which no grace period
      is allowed;

            (b) any representation or warranty which is made by a person other
      than Lender and is contained in the Loan Documents or in any certificate
      furnished to Lender under the Loan Documents by or on behalf of Borrower
      proves to be, in any material respect, false or misleading as of the date
      deemed made, and Borrower has failed to cause such representation or
      warranty to become true and correct, in all material respects, within
      thirty (30) days following notice from Lender;

            (c) a default in the Performance of the Obligations set forth in
      PARAGRAPH 6.1(n), 6.1(o), 6.1(p), 6.2(b), 6.2(c)(i), 6.2(c)(iii), OR
      6.2(c)(iv);

            (d) a default in the Performance of the Obligations or a violation
      of any term, covenant or provision of the Loan Documents (other than a
      default or violation referred to elsewhere in this PARAGRAPH 7.1) which
      continues unremedied (i) for a period of thirty (30) days after notice of
      such default or violation to Borrower in the case of a default under or
      violation of PARAGRAPH 6.2(c)(ii) or any default or violation which can be
      cured by the payment of money alone or (ii) for a period of thirty (30)
      days after notice to Borrower in the case of any other default or
      violation;

            (e) an "EVENT OF DEFAULT," as defined in any of the other Loan
      Documents;

            (f) any default by Borrower under any other agreement evidencing,
      guaranteeing or securing borrowed money or a receivables purchase
      financing involving an obligation in excess of One Million Dollars
      ($1,000,000) to make a payment of principal or interest or to repurchase
      receivables;

            (g) any final, non-appealable judgment or decree for money damages
      or for a fine or penalty against Borrower which is not paid and discharged
      or stayed within thirty (30) days thereafter and which, when aggregated
      with all other judgment(s) or decree(s) that have remained unpaid and
      undischarged or are not stayed for such period, are in excess of One
      Million Dollars ($1,000,000);

            (h) any party holding a lien on or security interest in any
      Collateral commences foreclosure or similar sale thereof, unless Borrower
      causes such proceeding to be stayed pending determination of the rights of
      the respective parties with respect to such Collateral, which stay
      continually prevents the party holding the lien or security interest from
      proceeding against the Collateral at issue;

            (i) a material adverse change in the Time-Share Project, the
      Collateral or the business or financial condition of Borrower, which
      change is not enumerated in this PARAGRAPH 7.1, as the result of which
      Lender in good faith deems the prospect of Performance of the Obligations
      materially impaired or the Collateral materially imperiled;

            (j) Borrower shall (i) generally not be paying its debts as they
      become due, (ii) file, or consent by answer or otherwise to the filing
      against it of, a petition for relief or reorganization, arrangement or
      liquidation or any other petition in bankruptcy or insolvency under the
      laws of any jurisdiction, (iii) make an assignment for the benefit of its
      creditors, (iv) consent to the appointment of a custodian, receiver,
      trustee or other officer with similar powers for itself or any substantial
      part of its property, (v) be adjudicated insolvent, (vi) dissolve or
      commence to wind-up its affairs or

                                       18
<PAGE>

      (vii) take any action for purposes of the foregoing; or a petition for
      relief or reorganization, arrangement or liquidation or any other petition
      in bankruptcy or insolvency or the appointment of a custodian under the
      laws of any jurisdiction is filed against Borrower or a custodian is
      appointed for Borrower, the Collateral or any material part of Borrower's
      property and such proceeding is not dismissed and appointment vacated
      within ninety (90) days thereafter;

            (k) any of the events enumerated in PARAGRAPHS 7.1(F), (G), (I) or
      (j) occurs with respect to any general partner or manager of Borrower, if
      Borrower is a partnership or limited liability company, or any surety for
      the Performance of the Obligations; or

            (l) failure of Lender to receive from Borrower, within thirty (30)
      days of the date Borrower knows of such event, notice of any event which
      renders any representation or warranty in any Loan Documents false in any
      material, adverse respect were it made after the occurrence of such
      condition.

      7.2 REMEDIES. At any time after an Event of Default has occurred and while
it is continuing, Lender may but without obligation, in addition to the rights
and powers granted elsewhere in the Loan Documents and not in limitation
thereof, do any one or more of the following:

            (a) cease to make further Advances;

            (b) declare the Note, together with all other sums owing by Borrower
      to Lender in connection with the Inventory Loan, immediately due and
      payable without notice, presentment, demand or protest, which are hereby
      waived by Borrower;

            (c) proceed to protect and enforce its rights and remedies under the
      Loan Documents and to foreclose or otherwise realize upon its security for
      the Performance of the Obligations, or to exercise any other rights and
      remedies available to it at law, in equity or by statute; and

            (d) without notice to Borrower, have a receiver appointed for
      Borrower and/or its property.

      7.3 APPLICATION OF PROCEEDS DURING AN EVENT OF DEFAULT. Notwithstanding
anything in the Loan Documents to the contrary, while an Event of Default
exists, any cash received and retained by Lender in connection with the
Collateral may be applied to payment of the Obligations in the manner provided
in PARAGRAPH 7.5.

      7.4   UNIFORM COMMERCIAL REMEDIES; SALE.

            (a) UCC REMEDIES; SALE OF COLLATERAL. Lender shall have all of the
      rights and remedies of a secured party under the Uniform Commercial Code
      of the State of Arizona and of the state in which the applicable
      Collateral is situated, and all other rights and remedies accorded to a
      Secured Party at equity or law with respect to that portion of the
      Collateral not consisting of an interest in real property. Any notice of
      sale or other disposition of such non-real property Collateral given not
      less than ten (10) days prior to such proposed action in connection with
      the exercise of Lender's rights and remedies shall constitute reasonable
      and fair notice of such action. Lender may postpone or adjourn any such
      sale from time to time by announcement at the time and place of sale
      stated on the notice of sale or by announcement of any adjourned sale,
      without being required to give a further notice of sale. Any such sale may
      be for cash or, unless prohibited by applicable law, upon such credit or
      installment as Lender may determine. Borrower shall be credited with the
      net proceeds of such sale only when such proceeds are actually received by
      Lender in good current funds. Despite the consummation of any such sale,
      Borrower shall remain liable for any deficiency on the Obligations which
      remains outstanding following such sale. All net proceeds recovered
      pursuant to a sale shall be applied in accordance with the provisions of
      PARAGRAPH 7.5.

            (b) LENDER'S RIGHT TO EXECUTE CONVEYANCES. Lender may, in the name
      of Borrower or in its own name, make and execute all conveyances,
      assignments and transfers of the Collateral sold in connection with the
      exercise of Lender's rights and remedies, and Lender is hereby appointed
      Borrower's attorney-in-fact for this purpose.

      7.5 APPLICATION OF PROCEEDS. The proceeds of any sale of all or any part
of the Collateral made in connection with the exercise of Lender's rights and
remedies shall be applied in the following order of priorities; first, to the
payment of all costs and expenses of such sale, including without limitation,
reasonable compensation to Lender and its agents, attorneys' fees, and all other
expenses, liabilities and advances incurred or made by Lender, its agents and
attorneys, in connection with such sale, and any other unreimbursed expenses for
which Lender may be reimbursed pursuant to the Loan Documents; second, to the
payment of all late charges required by the Loan Documents to be paid by
Borrower, in such order and manner as Lender shall in its discretion determine;
third, to the payment of the Obligations, in such order and manner as Lender
shall in its discretion determine, with no amounts applied to payment of

                                       19
<PAGE>

principal until all interest has been paid; fourth, to the other Obligations in
such order and manner as Lender may determine; and last, to the payment to
Borrower, its successors or assigns, or to whosoever may be lawfully entitled to
receive the same, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.

      7.6 LENDER'S RIGHT TO PERFORM. Lender may, at its option, and without any
obligation to do so, pay, perform and discharge any and all obligations agreed
to be paid or Performed in the Loan Documents by Borrower or any surety for the
Performance of the Obligations if (a) such person fails to do so and (b) (i) an
Event of Default exists and at least five (5) Business Day's notice has been
given to such person of Lender's intention to take such action, (ii) the action
taken by Lender involves obtaining insurance which such person has failed to
maintain in accordance with the Loan Documents or to deliver evidence thereof,
or (iii) in the opinion of Lender, such action must be taken because an
emergency exists or to preserve any of the Collateral or its value. For such
purposes Lender may use the proceeds of the Collateral. All amounts expended by
Lender in so doing or in exercising its remedies under the Loan Documents
following an Event of Default shall become part of the Obligations, shall be
immediately due and payable by Borrower to Lender upon demand, and shall bear
interest at the Default Rate from the dates of such expenditures until paid.

      7.7 NON-EXCLUSIVE REMEDIES. No remedy in any Loan Document conferred on or
reserved to Lender is intended to be exclusive of any other remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under any Loan Document or now or hereafter existing at
law or in equity. No delay or omission to exercise any right or power shall be
construed to be a waiver of or acquiescence to any default or a waiver of any
right or power; and every such right and power may be exercised from time to
time and as often as may be deemed expedient.

      7.8 WAIVER OF MARSHALLING. Borrower, for itself and for all who may claim
through or under it, hereby expressly waives and releases all right to have the
Collateral, or any part of the Collateral, marshalled on any foreclosure, sale
or other enforcement of Lender's rights and remedies.

      7.9 ATTORNEY-IN-FACT. For the purpose of exercising its rights and
remedies under PARAGRAPHS 7.2(c) and 7.6, Lender may do so in Borrower's name or
its name and is hereby appointed as Borrower's attorney-in-fact to take any and
all actions in Borrower's name and/or on Borrower's behalf as Lender may deem
necessary or appropriate in its discretion in the accomplishment of such
purposes.

8.    COSTS AND EXPENSES; INDEMNIFICATION

      8.1 COSTS AND EXPENSES. Borrower will pay on demand any and all costs and
expenses incurred by Lender (exclusive of Lender's employees' expenses other
than travel expenses) in connection with the initiation, documentation and
closing of the Inventory Loan, the making of Advances, the protection of the
Collateral, or the enforcement of the Obligations against Borrower, including,
without limitation, all attorneys', inspecting architect's/engineer's and other
professionals' fees (including, without limitation, reasonable out-of-pocket
expenses and reasonable and normal charges of such attorneys' and other
professionals for photocopy, telecopy and computer services, and clerical
overtime), consumer credit reports, and revenue, documentary stamp, transaction
and intangible taxes. Without limiting the generality of the foregoing, if a
bankruptcy proceeding is commenced by or against Borrower or otherwise involving
the Collateral, Lender shall, to the extent not already provided for herein, be
entitled to recover, and Borrower shall be obligated to pay, Lender's attorneys'
fees and costs incurred in connection with: any determination of the
applicability of the bankruptcy laws to the terms of the Loan Documents or
Lender's rights thereunder; any attempt by Lender to enforce or preserve its
rights under the bankruptcy laws or to prevent Borrower or any other person from
seeking to deny Lender its rights thereunder; any effort by Lender to protect,
preserve or enforce its rights against the Collateral, or seeking authority to
modify the automatic stay of 11 U.S.C. SECTION 362 or otherwise seeking to
engage in such protection, preservation or enforcement; or any proceeding(s)
arising under the bankruptcy laws, or arising in or related to a case under the
bankruptcy laws.

      8.2 INDEMNIFICATION. Borrower will INDEMNIFY, PROTECT, HOLD HARMLESS, and
defend Lender, its successors, assigns and shareholders (including corporate
shareholders), and the directors, officers, employees, servants and agents of
the foregoing, for, from and against: (a) any and all liability, damage,
penalties, or fines, loss, costs or expenses (including, without limitation,
court costs and attorneys' fees), claims, demands, suits, proceedings (whether
civil or criminal), orders, judgments, penalties, fines and other sanctions
whatsoever asserted against it and arising from or brought in connection with
the Time-Share Project, the Collateral, Lender's status by virtue of the Loan
Documents, creation of liens and security interests, the terms of the Loan
Documents or the transactions related thereto, or any act or omission of
Borrower or an Agent, or their respective employees or agents, whether actual or
alleged unless such act or omission is caused by Lender's gross negligence or
willful misconduct; and (b) any and all brokers' commissions or finders' fees or
other costs of similar type by any party in connection with the Inventory Loan.
Each Borrower and Lender hereby represents and warrants to

                                       20
<PAGE>

the other that neither such Person has engaged the services of a broker of any
other Person to act as an intermediary in connection with the Inventory Loan. On
written request by a person or other entity covered by the above agreement of
indemnity, Borrower will undertake, at its own cost and expense, on behalf of
such indemnitee, using counsel satisfactory to the indemnitee, the defense of
any legal action or proceeding to which such person or entity shall be a party.
At Lender's option, Lender may at Borrower's expense prosecute or defend any
action involving the priority, validity or enforceability of the Collateral.

9.    CONSTRUCTION AND GENERAL TERMS

      9.1 PAYMENT LOCATION. All monies payable under the Loan Documents shall be
paid to Lender at its address set forth following its signature in lawful monies
of the United States of America, unless otherwise designated in the Loan
Documents or by Lender by notice.

      9.2 ENTIRE AGREEMENT. The Loan Documents exclusively and completely state
the rights and obligations of Lender and Borrower with respect to the Inventory
Loan. No modification, variation, termination, discharge, abandonment or waiver
of any of the provisions or conditions of the Loan Documents shall be valid
unless in writing and signed by a duly authorized representative of the party
sought to be bound by such action. The Loan Documents supersede any and all
prior representations, warranties and/or inducements, written or oral,
heretofore made by Lender and Borrower concerning this transaction, including
any commitment for financing.

      9.3 POWERS COUPLED WITH AN INTEREST. The powers and agency hereby granted
by Borrower are coupled with an interest and are irrevocable until the
Obligations have been paid in full and are granted as cumulative to Lender's
other remedies for collection and enforcement of the Obligations.

      9.4 COUNTERPARTS; FACSIMILE SIGNATURES. Any Loan Document may be executed
in counterpart, and any number of copies of such Loan Document which have been
executed by all parties shall constitute one (1) original. Delivery of an
executed counterpart of any Loan Document by telefacsimile shall be equally as
effective as delivery of a manually executed counterpart of such Loan Document.
Any party delivering an executed counterpart of any Loan Document by
telefacsimile shall also deliver a manually executed counterpart of such Loan
Document, but the failure to deliver a manually executed counterpart shall not
affect the validity, enforceability, and binding effect of such Loan Document.

      9.5 NOTICES. All notices, requests or demands required or permitted to be
given under the Loan Documents shall be in writing, and shall be deemed
effective (a) upon hand delivery, if hand delivered; (b) one (1) Business Day
after such are deposited for delivery via Federal Express or other nationally
recognized overnight courier service; or (c) three (3) Business Days after such
are deposited in the United States mails, certified or registered mail, all with
delivery charges and/or postage prepaid, addressed as shown below, or to such
other address as the party being notified may have designated in a notice given
to the other party. Written notice may be given by telecopy to the telecopier
number shown below or to such other telecopier number as the party being
notified may have designated in a notice given to the other party, which notice
shall be effective on the day of receipt if received during the recipient's
normal business hours on the day of receipt or otherwise on the next Business
Day; provided that such notice shall not be deemed effective unless not later
than the next Business Day, a copy of such notice is hand delivered or deposited
for delivery via courier or in the United States mails in accordance with the
requirements set forth above. The notice addresses and telecopy numbers for
Primary Borrower and Lender are set forth at the end of this Agreement following
their respective signatures. All notices required to be given to any Borrower
may be given to such Borrower at the notice address for Primary Borrower set
forth herein, each Subsidiary Borrower at any time a party to this Agreement
acknowledging that such Subsidiary Borrower maintains executive offices and
functions sufficient for the receipt of notice at the offices of Primary
Borrower.

      9.6 SUCCESSORS AND ASSIGNS. All the covenants of Borrower and all the
rights and remedies of the Lender contained in the Loan Documents shall bind
Borrower, and, subject to the restrictions on merger, consolidation and
assignment contained in the Loan Documents, its successors and assigns, and
shall inure to the benefit of Lender, its successors and assigns, whether so
expressed or not. Borrower may not assign its rights in the Loan Documents in
whole or in part. Except as may be expressly provided in a Loan Document, no
person or other entity shall be deemed a third party beneficiary of any
provision of the Loan Documents.

      9.7 SEVERABILITY. If any provision of any Loan Document is held to be
invalid, illegal or unenforceable under present or future laws, the legality,
validity and enforceability of the remaining provisions of the Loan Documents
shall not in any way be affected or impaired thereby. In lieu of each such
illegal, invalid or unenforceable provision, there shall be added to the Loan
Document affected, a provision that is legal, valid and enforceable and as
similar in terms to such illegal, invalid and unenforceable provision as may be
possible.

      9.8 TIME OF ESSENCE. Time is of the essence in the Performance of the
Obligations.

      9.9 MISCELLANEOUS. All headings are inserted for convenience only and
shall not affect any construction or interpretation of the Loan Documents.
Unless otherwise indicated, all references in a Loan Document to clauses and
other subdivisions refer to the corresponding paragraphs, clauses and other
subdivisions of the Loan

                                       21
<PAGE>

Document; the words "HEREIN," "HEREOF," "HERETO," "HEREUNDER" and words of
similar import refer to the Loan Document as a whole and not to any particular
paragraph, clause or other subdivision; and reference to a numbered or lettered
subdivision of an Article or paragraph shall include relevant matter within the
Article or paragraph which is applicable to but not within such numbered or
lettered subdivision. All Schedules and Exhibits referred to in this Agreement
are incorporated in this Agreement by reference. Whenever the words "including",
"include", or "includes" are used in the Loan Documents, they shall be
interpreted in a non-exclusive manner as though the words, "without limitation,"
immediately followed the same.

      9.10 CHOICE OF LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED THEREIN, THE
LOAN DOCUMENTS AND THE RIGHTS, DUTIES AND OBLIGATIONS OF THE PARTIES THERETO
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF ARIZONA (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND TO THE
EXTENT THEY PREEMPT THE LAWS OF SUCH STATE, THE LAWS OF THE UNITED STATES.

      9.11 CHOICE OF JURISDICTION; WAIVER OF VENUE. EACH OF BORROWER AND LENDER:
(A) HEREBY IRREVOCABLY SUBMITS ITSELF TO THE PROCESS, JURISDICTION AND VENUE OF
THE COURTS OF THE STATE OF ARIZONA, MARICOPA COUNTY, AND TO THE PROCESS,
JURISDICTION, AND VENUE OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
ARIZONA, FOR THE PURPOSES OF SUIT, ACTION OR OTHER PROCEEDINGS ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENT OR THE SUBJECT MATTER THEREOF, OR, IF LENDER
INITIATES SUCH ACTION, ANY COURT IN WHICH LENDER SHALL INITIATE SUCH ACTION, AND
THE CHOICE OF SUCH VENUE SHALL IN ALL INSTANCES BE AT LENDER'S ELECTION; AND (B)
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, HEREBY WAIVES AND AGREES NOT
TO ASSERT BY WAY OF MOTION, DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR
PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF
THE ABOVE-NAMED COURTS, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER. EACH OF BORROWER AND LENDER HEREBY WAIVES THE RIGHT TO COLLATERALLY
ATTACK ANY JUDGMENT OR ACTION IN ANY OTHER FORUM.

      9.12 WAIVER OF JURY TRIAL. LENDER AND BORROWER ACKNOWLEDGE AND AGREE THAT
ANY CONTROVERSY WHICH MAY ARISE UNDER ANY LOAN DOCUMENT WOULD BE BASED UPON
DIFFICULT AND COMPLEX ISSUES; AND THEREFORE, THEY AGREE THAT ANY LAWSUIT ARISING
OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED BY A JUDGE SITTING WITHOUT A JURY,
AND KNOWINGLY AND VOLUNTARILY WAIVE TRIAL BY JURY IN ANY SUCH PROCEEDING.

      9.13 INDUCEMENT TO LENDER. ALL OF THE PROVISIONS SET FORTH IN THIS
PARAGRAPH ARE A MATERIAL INDUCEMENT FOR LENDER'S MAKING ADVANCES TO BORROWER.

                                     (BORROWER'S INITIALS RE: 9.10 - 9.13 _____)

      9.14 COMPLIANCE WITH APPLICABLE USURY LAW. It is the intent of the parties
hereto to comply with the Applicable Usury Law. Accordingly, notwithstanding any
provisions to the contrary in the Loan Documents, in no event shall the Loan
Documents require the payment or permit the collection of interest in excess of
the maximum contract rate permitted by the Applicable Usury Law.

      9.15 USE OF LENDER'S NAME. EXCEPT AS REQUIRED BY LAW AND FOR FILINGS MADE
WITH THE SECURITIES AND EXCHANGE COMMISSION, ANY STOCK EXCHANGE ON WHICH
BORROWER'S STOCK IS TRADED, ANY REGULATORY AGENCY HAVING JURISDICTION OVER
BORROWER OR ANY OF THE TIME-SHARE PROJECTS, OR WITH RESPECT TO FILINGS REQUIRED
TO BE MADE IN THE LAND RECORDS APPLICABLE TO ANY OF THE TIME-SHARE PROJECTS,
BORROWER WILL NOT, AT ANY TIME, USE THE NAME OF OR MAKE REFERENCE TO LENDER WITH
RESPECT TO THE TIME-SHARE PROJECT, THE SALE OF TIME-SHARE INTERESTS OR
OTHERWISE, WITHOUT THE EXPRESS WRITTEN CONSENT OF LENDER.

      9.16 NO JOINT VENTURE. THE RELATIONSHIP OF BORROWER AND LENDER IS THAT OF
DEBTOR AND CREDITOR, AND IT IS NOT THE INTENTION OF EITHER OF SUCH PARTIES BY
THIS OR ANY OTHER INVENTORY BEING EXECUTED IN CONNECTION WITH THE INVENTORY LOAN
TO ESTABLISH A PARTNERSHIP, AND THE PARTIES HERETO SHALL NOT UNDER ANY
CIRCUMSTANCES BE CONSTRUED TO BE PARTNERS OR JOINT VENTURERS.

      9.17 STANDARDS APPLIED TO LENDER'S ACTIONS. Unless otherwise specifically
stipulated elsewhere in the Loan Documents, if a matter is left in the Loan
Documents to the decision, requirement, request, determination, judgment,
opinion, approval, consent, satisfaction, acceptance, agreement, option or
discretion of Lender, its

                                       22
<PAGE>

employees, Lender's counsel or any agent for or contractor of Lender, such
action shall be deemed to be exercisable by Lender or such other person in its
sole and absolute discretion and according to standards established in its sole
and absolute discretion. Without limiting the generality of the foregoing,
"OPTION" and "DISCRETION" shall be implied by use of the words "IF" or "MAY."

      9.18 PARTICIPATIONS. Lender shall have the right without the consent of or
notice to the Borrower to grant participating interests in the Inventory Loan,
or to assign all or any portion of Lender's interest in and to the Inventory
Loan to any other Person acceptable to Lender, and may disclose to such other
Person all information relating to Borrower as Lender may deem appropriate in
connection with such sales or assignments, provided that Lender shall obtain
from the Person receiving any such information an agreement to be bound by and
abide with such confidentiality provisions as are then binding upon Lender. The
foregoing notwithstanding, in the event Lender sells participating interests in
the Inventory Loan to any other Persons, Lender shall continue to serve as the
lender with responsibility for administration of the Inventory Loan, shall
continue to be the notice party for purposes of the giving of notices by
Borrower, and shall be responsible for disseminating financial and other
information received from Borrower to each participating lender.

      9.19 SCOPE OF REIMBURSABLE ATTORNEY'S FEES. As used in the Loan Documents,
the term "ATTORNEYS' FEES" includes the reasonable fees of attorneys licensed to
practice law in any jurisdiction, law clerks, paralegals, investigators and
others not admitted to the bar but performing services under the supervision of
a licensed attorney, and the expenses (including, without limitation, normal and
customary charges for telecopy and photocopy services and clerical overtime)
incurred by them in the performance of their services. As used in the Loan
Documents, attorneys' fees incurred by Lender in the enforcement of any remedy
or covenant include, without limitation, attorneys' fees incurred in any
foreclosure of the Security Documents, in protecting or sustaining the lien or
priority of the Collateral, or in any proceeding arising from or connected with
any such matter, including any bankruptcy, receivership, injunction or other
similar proceeding, or any appeal from or petition for review of any such
matter, and with or without litigation.

      9.20 PUBLICITY. Lender is hereby authorized to cause a tombstone to be
published announcing the consummation of this transaction and the aggregate
amount thereof. Borrower consents to such advertising and authorizes Lender to
use Borrower's name, logo, insignia, descriptive art work, trade name,
trademark, or other similar material, whether or not protected by copyright (or
otherwise), in any such advertisement. The foregoing notwithstanding, Lender
shall not issue any press releases concerning this transaction without Primary
Borrower's prior written approval as to the content of such releases, which
approval shall not be unreasonably withheld or conditioned, or unduly delayed.

      9.21 PERMITTED CONTESTS. Notwithstanding anything in the Loan Documents to
the contrary, after prior written notice to Lender, Borrower at its expense may
contest, by appropriate legal or other proceedings conducted in good faith and
with due diligence, the amount or validity of any tax, Imposition, Legal
Requirement or any monetary lien on the Collateral, so long as: (a) in the case
of an unpaid Imposition or lien, such proceedings suspend the collection thereof
from Borrower and the Collateral, and shall not interfere with the payment of
any monies due under the Collateral in accordance with the terms of the Security
Documents; (b) none of the Collateral is, in the judgment of Lender, in any
imminent danger of being sold, forfeited or lost; (c) in the case of a Legal
Requirement, neither Borrower nor Lender is in any danger of any civil or
criminal liability for failure to comply therewith; and (d) Borrower has
furnished such security, if any, as may be required in the proceedings or as
Lender reasonably requests up to one hundred twenty-five percent (125%) of the
amount in controversy.

      9.22 RELIANCE. Lender's examination, inspection, or receipt of information
pertaining to Borrower, the Collateral or the Time-Share Project shall not in
any way be deemed to reduce the full scope and protection of the warranties,
representations and Obligations contained in the Loan Documents.

                              [SIGNATURE PAGE FOLLOWS]

                                      23

<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their respective name, personally or by their duly authorized
representatives as of September 30, 1999.

PRIMARY BORROWER                    SUNTERRA CORPORATION, a Maryland corporation


                                    By:  /s/ Carol W. Sullivan
                                       ------------------------------------
                                       Name: Carol W. Sullivan
                                       Title: Senior Vice President -
                                              Mortgage Portfolio

                                    Primary Borrower's Notice Address and
                                    Telecopy Number:
                                    _______________________________________
                                    _______________________________________
                                    Attention:    General Counsel
                                    Telecopy No.:  (407)   532-1075

                                    with a copy to:

                                    SUNTERRA CORPORATION
                                    9921 Covington Cross Drive, suite 105
                                    Las Vegas, Nevada  89134
                                    Attention:  Ms. Carol Sullivan

                                    with a further copy to:

                                    SCHREEDER, WHEELER & FLINT
                                    Candler Building, 16th Floor
                                    127 Peachtree Street, N.E.
                                    Atlanta, Georgia  30303-1845
                                    Attention:  Leo A. Rose III, Esq.

SUBSIDIARY BORROWERS                ALL SEASONS RESORTS, INC., an Arizona
                                    corporation

                                    By:  /s/ Carol W. Sullivan
                                       ------------------------------------
                                       Name: Carol W. Sullivan
                                       Title: Assistant Treasurer

                                    POWHATTAN ASSOCIATES, a Virginia joint
                                    venture


                                    By: PLANTATION RESORT GROUP, INC., a
                                        Virginia corporation, its Joint Venturer

                                    By:  /s/ Carol W. Sullivan
                                       ------------------------------------
                                       Name: Carol W. Sullivan
                                       Title: Assistant Treasurer

                                    WILLIAMSBURG VACATIONS, INC., a Virginia
                                    corporation, its Joint Venturer

                                    By:  /s/ Carol W. Sullivan
                                       ------------------------------------
                                       Name: Carol W. Sullivan
                                       Title: Assistant Treasurer

                                       24
<PAGE>

                                    GREENSPRINGS ASSOCIATES, a Virginia joint
                                    venture

                                    By: PLANTATION RESORT GROUP, INC., a
                                        Virginia corporation, its Joint Venturer

                                    By: /s/ Carol W. Sullivan
                                       -------------------------------
                                       Name: Carol W. Sullivan
                                       Title: Assistant Treasurer


                                    By: GREENSPRINGS PLANTATION RESORTS, INC., a
                                    Virginia Corporation, its Joint Venturer

                                    By: /s/ Carol W. Sullivan
                                       -------------------------------
                                       Name: Carol W. Sullivan
                                       Title: Assistant Treasurer

                                    Subsidiary Borrowers' Notice Address and
                                    Telecopy Number:

                                    c/o Sunterra Corporation
                                    1781 Park Center Drive
                                    Orlando, Florida 32835
                                    Attn.: General Counsel
                                    Telecopy: (407) 532-1141

LENDER                              FINOVA CAPITAL CORPORATION, a Delaware
                                    corporation

                                    By: Gayle R. McKenzie
                                       -------------------------------
                                       Name: Gayle R. McKenzie
                                       Title: Vice President

                                    Lender's Notice Address and Telecopy Number:

                                    FINOVA Capital Corporation
                                    7272 East Indian School Road, Suite 410
                                    Scottsdale,  Arizona  85251
                                    Attn.:  Vice President-Resort Finance
                                    Telecopy:  (602) 874-6444

                                    with a copy to:

                                    FINOVA Capital Corporation
                                    7272 East Indian School Road, Suite 410
                                    Scottsdale,  Arizona  85251
                                    Attn.:  Vice President-Group Counsel
                                    Telecopy:  (602) 874-6445


                                       25
<PAGE>

                          SCHEDULE OF ADDITIONAL TERMS

      S.1 This Schedule has been incorporated by reference into and form a part
of that Master Loan and Security Agreement dated as of September 30, 1999,
between FINOVA Capital Corporation as "Lender" and Sunterra Corporation as the
"Primary Borrower."

      S.2 To the extent of any inconsistency between this Schedule and the other
provisions of the provisions of the Loan and Security Agreement, the provisions
of this Schedule shall prevail.

      S.3 The provisions of the Loan and Security Agreement are supplemented as
follows (paragraph references are references to paragraphs of the Loan and
Security Agreement) which are intended to be supplemented by the following
provisions:

           (a) (P)1.      Basic Interest Rate: three and three-quarters percent
               (3.75%) per annum in excess of the LIBO Rate or the LIBO
               Adjusted Rate, as applicable, fluctuating monthly on the first
               Business Day of each calendar month based upon the LIBO Rate
               or the LIBO Adjusted Rate, as applicable, in effect on such
               date, provided, however, that in no event shall the Basic
               Interest Rate exceed the maximum contract rate of interest
               permitted by the Applicable Usury Law.

           (b) (P)1.      Default Rate: two percent (2%) above the Basic
               Interest Rate or the maximum contract rate permitted under the
               applicable usury law, whichever is less.

           (c) (P)1. [Intentionally not used.]

           (d) (P)1.      Maximum Inventory Loan Amount: Fifty Million Dollars
               ($50,000,000).

           (e) (P)1.      Extended Borrowing Term Expiration Date: September 30,
               2002.

           (f) (P)1.      Original Borrowing Term Expiration Date: September 30,
               2001.

           (g) (P)1.      Loan Fee: Two Hundred Fifty Thousand Dollars
               ($250,000).

           (h) (P)1.      Maturity Date: September 30, 2003 (if Extension Option
               not exercised) or September 30, 2004 (if Extension Option is
               exercised).

           (i) (P)1.      Opening Prepayment Date. The date 6 months from the
               date of the applicable Advance.

           (j) (P)1.      Required Closing Date. October 31, 1999.

           (k) (P)1.      Initial Time-Share Projects:  Powhattan Plantation,
               Williamsburg, Virginia; Greensprings Plantation, Williamsburg,
               Virginia; Scottsdale Villa Mirage, Scottsdale, Arizona; and
               Villas at Santa Fe, Santa Fe, New Mexico.

           (l) (P)2.9(a). Payment of Loan Fee: The Loan Fee shall be payable in
               the following installments: $75,000 on or before September 30,
               1999, and $425,000 on the Closing Date. Any portion of Borrower's
               $75,000 good faith deposit which was delivered to Lender in
               connection with Primary Borrower's acceptance of Lender's
               Proposal Letter dated August 27, 1999 with respect to the
               facility described by this Agreement that is remaining after the
               payment of Lender's costs and expenses shall be applied toward
               the installment of the Loan Fee which is due on the Closing Date.

                                       26
<PAGE>

           (m) (P)4.5. Minimum Advance Amount: Five Hundred Thousand Dollars
               ($500,000).

           (n) (P)4.5. Maximum Advance Frequency: twice per calendar month with
               a Five Hundred Dollar ($500) charge being imposed in connection
               with the second Advance in any one (1) calendar month. Lender
               shall have the right to withhold the amount of such charge from
               such Advance.

           (o) (P)4.6. Wire Transfer Fee: Twenty-Five Dollars ($25.00).

           (p) (P)5.1, 6.1.  Borrower's Type of Business Organization:
               Primary Borrower - corporation
                              All Seasons Resorts, Inc. - corporation
                              Powhattan Associates - a joint venture
                              Greensprings Associates - a joint venture.

           (q) (P)5.1, 6.1. Borrower's State of Organization:   Primary
               Borrower - Maryland
                              All Seasons Resorts, Inc.- Arizona Powhattan
                              Associates - Virginia Greensprings Associates -
                              Virginia.

           (r) (P)5.3. Borrower's Principal Place of Business: 1781 Park Center
               Drive, Orlando, Florida 32825.

           (s) (P)5.3. Borrower's Chief Executive Office: 1781 Park Center
               Drive, Orlando, Florida 32825

           (t) (P)5.9  Jurisdiction Where Sales and/or Offers to Sell Have
               Occurred:  See Exhibit 5.9 attached hererto.

      S.4 In addition to the other representations, warranties and covenants of
Borrower set forth in the Loan and Security Agreement, Borrower represents,
warrants and covenants that each Borrowing Base Report shall be signed by
Primary Borrower and the applicable Subsidiary Borrower (if any) and shall
contain a representation and warranty of each such Person that all of the
information contained therein (including, but not limited to, the sales of
Time-Share Interests reported therein, and the Retail Value with respect to the
Eligible Inventory located at the applicable Time-Share Project) are true,
complete and accurate in all material respects. Lender shall be entitled to
request copies of sales contracts to provide substantiation as to the actual
sales prices of those items of Inventory sold by Borrower and requested to be
released from the lien of Lender's Mortgage.

                                       27
<PAGE>

                                    EXHIBIT A

                        CONDITIONS OF ELIGIBLE INVENTORY

      (a) The applicable Time-Share Project in which such Inventory exists is
located in the United States.

      (b) The applicable Time-Share Project is owned one hundred percent (100%)
either by Primary Borrower or by an Affiliate of Primary Borrower which joins in
the Loan and Security Agreement as a Subsidiary Borrower thereunder.

      (c) The Time-Share Association established in connection with the
applicable Time-Share Project must be in stable financial condition, as
demonstrated to Lender's satisfaction. Prior to a given Time-Share Project being
approved for the contribution of Eligible Inventory to the Borrowing Base,
Borrower shall have provided to Lender, and Lender shall have reviewed and found
satisfactory, the following information relative to the applicable Time-Share
Association:

            (1)   Most recent audited financial statement;
            (2)   A current statement of the replacement fund balance maintained
                  by such Time-Share Association;
            (3)   A current statement of the operating fund balance maintained
                  by such Time-Share Association;
            (4)   A description of the extent to which such Time-Share
                  Association is entitled to any continuing subsidy from the
                  developer of the applicable Time-Share Project, together with
                  a statement of the extent to which such Time-Share Association
                  has utilized such subsidy during the past three (3) fiscal
                  years;
            (5)   A description of the annual dues paid by owners of Time-Share
                  Interests in such Time-Share Project, broken down to the type
                  of Unit involved; and
            (6)   An identification of the Time-Share Manager applicable to such
                  Time-Share Project, together with such additional information
                  concerning the Time-Share Manager as Lender may request
                  (including without limitation, if such Time-Share Manager is
                  not an Affiliate of Primary Borrower, financial statements for
                  such Time-Share Manager and a description of such Person's
                  experience and qualifications for management of the Time-Share
                  Association).

      (d) With respect to each Time-Share Project, evidence that the Unit(s) in
which the Time-Share Interest(s) are owned and the amenities that have been
promised to the Purchasers (and to prospective purchasers) have been completed
(taking into account the dates upon which any such amenities have been promised
to Purchasers, such that a Time-Share Project shall not be deemed ineligible
hereunder due to the fact that certain amenities have not yet been completed
unless the time by which those amenities were to have been completed, as
represented to the Purchasers, has passed), fully furnished and approved and
ready for occupancy and the furnishings in those Units are free of any lien
except for the Permitted Encumbrances; no Unit or other part of the common areas
of the Time-Share Project is subject to partition; and the time-share use of the
Units and amenities conform to all applicable restrictions and laws, necessary
approvals having been obtained.

      (e) With respect to each Time-Share Project, Borrower shall have provided
to Lender, and Lender shall have reviewed and found satisfactory, the following
information concerning such project and the unsold Time-Share Interests which
are proposed to become Eligible Inventory:

            (1)   Location of the project;
            (2)   Site plan for the project;
            (3)   Total number of Units planned for the project;
            (4)   Number of Units then completed;
            (5)   Number of Units presently under construction;
            (6)   A description of the total amenities which are planned to be
                  included in such project, together with a description of
                  whether such amenities have been constructed and, if such
                  amenities have not yet been constructed, a time-line
                  describing the periods remaining to completion; and
            (7)   A description of the complete amenity package which is to be
                  presented to prospective purchasers of the Time-Share
                  Interests.

                                       28
<PAGE>

      (f) With respect to each Time-Share Project, a description of the
following matters relative to such project's marketing and sales history:

            (1)   The month and year in which sales of Time-Share Interests
                  commenced;
            (2)   Location of the sales and marketing center for such Time-Share
                  Project;
            (3)   A table depicting, for each Time-Share Project, the various
                  sources of tours generated during the prior twelve months as a
                  percentage of total tours generated; and
            (4)   A table describing the annual sales since the sale of
                  Time-Share Interests commenced, broken down by the number of
                  Time-Share Interests sold per year and the average sales price
                  per year for such Time-Share Interests.

      (g) With respect to those specific unsold Time-Share Interests which are
to become Eligible Inventory, Borrower shall have provided to Lender, and Lender
shall have reviewed and found satisfactory, the following information:

            (1) Total number of Units in the applicable Time-Share Project; and
            (2) A report detailing the unsold number of Time-Share Interests,
                categorized by type of Unit involved, price for each Time-Share
                Interest, the total Retail Value of all such unsold Time-Share
                Interests, and the average price at which all unsold Time-Share
                Interests are offered for sale.

      (h) Lender shall have a valid, direct and perfected first lien/security
interest in the Inventory and the proceeds thereof.

      (i) In the event that any Time-Share Project which Borrowers propose to
qualify for the contribution of Eligible Inventory hereunder includes unsold
Time-Share Units which are valued and sold on a points basis (which program
Primary Borrower currently refers to as "Club Sunterra"), such points must
continue to qualify as "Time-Share Interests" as defined herein, and Lender must
be satisfied with the systems and procedures by which Borrowers (1) assure that
points sold are adequately supported by available and completed Units and unsold
Time-Share Interest and (2) calculate the number of points to be assigned to
each unsold Time-Share Interest contributed as Eligible Inventory hereunder. In
the event Borrowers' systems and procedures are not satisfactory to Lender,
Lender reserves the right, in its discretion, to require a quarterly third party
audit, to be conducted at Borrowers' expense, to assure that all points sold and
credited to purchasers are adequately supported by completed Units and unsold
Time-Share Interests therein; PROVIDED, HOWEVER, that for so long as no Event of
Default exists and is continuing, in no event shall the total expense of such
quarterly audits which Borrower is required to bear exceed $7,500 during any
calendar quarter.

                                       29
<PAGE>

                                     EXHIBIT B

                           FORM OF BORROWING BASE REPORT



                                       30
<PAGE>

                                    EXHIBIT C

                             BORROWER'S CERTIFICATE

      {Borrower Name}{Type of Borrower Entity}("BORROWER") hereby certifies to
FINOVA CAPITAL CORPORATION ("LENDER") that the Inventory described in SCHEDULE A
attached hereto and by this reference incorporated herein qualifies as Eligible
Inventory.

      Except as otherwise defined herein or the context otherwise requires, all
capitalized terms used herein have the meaning given to them in the Loan and
Security Agreement between Borrower and Lender dated as of {Month, Day,} {Year},
as it may be from time to time renewed, amended, replaced or restated.

            DATED:  ____________, ______.

            BORROWER:                   {Borrower Name}{Type of Borrower Entity}


                                        By:__________________________________
                                        Type/Print Name:_____________________
                                        Title:_______________________________


                                       31
<PAGE>

                                    EXHIBIT E

                              ADDITIONAL CONDITIONS
                           TO INVENTORY LOAN ADVANCES

      (a) a completed and executed "Request for Inventory Loan Advance and
Certification," in form and substance identical to EXHIBIT E-1.

      (b) a Mortgage in recordable form and otherwise in form and substance
satisfactory to Lender, properly completed, executed and acknowledged (with
respect to any Inventory not previously encumbered).

      (c) if not previously furnished, evidence satisfactory to Lender that: (i)
all Time-Share Interests which are the subject of the Inventory covered by item
(b) above have all necessary and promised on-site and off-site improvements
thereto (taking into account the dates upon which any such improvements have
been promised to Purchasers, such that this condition shall be deemed satisfied
unless the time by which those improvements were to have been completed, as
represented to the Purchasers, has passed) and necessary and promised utilities
are available; (ii) all Units and amenities which are to be available to
Purchasers obligated on the Inventory covered by item (b) above have been
completed in accordance with all applicable building codes and are fully
furnished, necessarily equipped and will be available for use by Purchasers
without disturbance or termination of their use rights so long as they are not
in default of their obligations owed to the applicable Time-Share Association,
or to any Borrower with respect to financing owed by such Purchaser to Borrower
incurred in connection with the purchase of such Purchaser's Time-Share
Interest; and (iii) all furnishings in the Units and amenities are owned either
by the Purchasers directly or by an owners' association or associations in which
the Purchasers are members, free of charges, liens and security interests other
than the Permitted Encumbrances.

      (d) a Title Policy with respect to each Mortgage covered by item (b)
above.

      (e) if requested by Lender following a material change of circumstances or
not more often than annually at Lender's discretion, an opinion from independent
counsel to Borrower satisfactory to Lender with respect to the continued
compliance of the Time-Share Project and such other matters as Lender shall
reasonably require.

      (f) if requested by Lender, such other items which are reasonably
necessary to evaluate the request for the Inventory Loan Advance and the
satisfaction of the conditions precedent thereto.

                                       32
<PAGE>

                                   EXHIBIT E-1

                       REQUEST FOR INVENTORY LOAN ADVANCE
                                AND CERTIFICATION

      The undersigned ("BORROWER") requests FINOVA CAPITAL CORPORATION
("LENDER") to make a Inventory Loan Advance in the sum of
_____________________________ ______________ UNITED STATES DOLLARS (U.S.
$_____________) upon receipt hereof, pursuant to the Loan and Security Agreement
between such parties dated as of {Month Day,}{Year} (with any amendments,
"Agreement").

      Borrower hereby certifies to Lender that (i) the Retail Value of all
Eligible Inventory pledged to Lender is not less than $_______________; (ii) the
Inventory against which the requested disbursement of the Inventory Loan is
sought constitutes Eligible Inventory; (iii) no material adverse change has
occurred in the financial condition or in the business and operations of
Borrower since _______________, _____, the date of the last financial statements
delivered to Lender; (iv) all representations and warranties contained in the
Agreement are true and correct as of the date hereof in all material respects;
(v) neither an Event of Default nor an Incipient Default exists; and (vi)
Borrower has Performed and complied with all agreements, covenants and
conditions required by the Agreement to be Performed and complied with prior to
or at the date of the requested disbursement of the Inventory Loan.

      Except as otherwise defined herein or the context otherwise requires, all
capitalized terms used herein have the meaning given to them in the Agreement.

            DATED:  ________________, ______.

            "BORROWER"               {Borrower Name}, {Type of Borrower Entity}



                                       By:______________________________________
                                          Type/Print Name:______________________
                                          Title:________________________________



                                       33