AGREEMENT AND PLAN OF MERGER

                                      among

                          FAIRFIELD COMMUNITIES, INC.,

                                    FA, INC.,

                                 CARL FLEMISTER,

                            C. WENDELL FLEMISTER, JR.

                                       and

                              APEX MARKETING, INC.

                          Dated as of October 22, 1997












<PAGE>





                                TABLE OF CONTENTS

                                                                          PAGE

ARTICLE I
         THE MERGER.........................................................1
         1.1   The Merger...................................................1
         1.2   Closing......................................................2
         1.3   Effective Time...............................................2
         1.4   Effect of the Merger.........................................2
         1.5   Articles of Incorporation....................................2
         1.6   Bylaws.......................................................2
         1.7   Directors....................................................2
         1.8   Officers.....................................................2

ARTICLE II
         EFFECTS OF THE MERGER ON THE CAPITAL STOCK OF THE
         CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES.................3
         2.1   Effect on Capital Stock......................................3
         2.2   Surrender and Payment for Shares.............................4
         2.3   Transfer of Shares After the Effective Time..................4

ARTICLE III
         REPRESENTATIONS AND WARRANTIES.....................................4
         3.1   Representations and Warranties of Fairfield and Merger Sub...4
         3.2   Representations and Warranties of Shareholders and Apex......7
         3.3   Additional Representations of Shareholders..................15

ARTICLE IV
         COVENANTS RELATING TO CONDUCT OF BUSINESS.........................15
         4.1   No Solicitation.............................................15
         4.2   Conduct of Business Prior to Effective Time.................16
         4.3   Cooperation Between the Parties.............................17
         4.4   Covenants of Fairfield......................................17
         4.5   Adverse Changes in Condition................................18

ARTICLE V
         ADDITIONAL AGREEMENTS.............................................18
         5.1   Confidentiality.............................................18
         5.2   Indemnification of Shareholders.............................18
         5.3   Indemnification of Fairfield................................18
         5.4   Exclusivity Of Indemnification For Contractual Breaches.....21
         5.5   Arbitration.................................................21
         5.6   Reasonable Efforts..........................................21
         5.7   Expenses and Fees...........................................22
         5.8   Consents....................................................22
<PAGE>

         5.9   Pooling of Interests.........................................22
         5.10  Transfer Restrictions........................................22
         5.11  Tax Treatment................................................24
         5.12  Non-Competition and Non-Solicitation Covenants...............24
         5.13  Payment of Bonus.............................................25
         5.14  Registration Rights..........................................25

ARTICLE VI
         CONDITIONS PRECEDENT...............................................27
         6.1   Conditions to Each Party's Obligation to Effect the Merger...27
         6.2   Conditions to Obligations of Apex and Shareholders...........28
         6.3   Conditions to Obligations of Fairfield and Merger Sub........28
         6.4   Frustration of Closing Conditions............................29
         6.5   Closing Documents and Procedures.............................29

ARTICLE VII
         TERMINATION, AMENDMENT AND WAIVER..................................31
         7.1   Termination..................................................31
         7.2   Effect of Termination........................................32
         7.3   Amendment....................................................32
         7.4   Extension; Waiver............................................32

ARTICLE VIII
         GENERAL PROVISIONS.................................................32
         8.1   Survival of Representations and Warranties...................32
         8.2   Notices......................................................33
         8.3   Definitions..................................................34
         8.4   Interpretation...............................................35
         8.5   Counterparts.................................................35
         8.6   Entire Agreement; No Third-party Beneficiaries...............35
         8.7   Governing Law................................................35
         8.8   Assignment...................................................35
         8.9   Enforcement..................................................36



<PAGE>





         AGREEMENT  AND  PLAN OF  MERGER  dated as of  October  22,  1997  (this
"Agreement"),   among  FAIRFIELD  COMMUNITIES,   INC.,  a  Delaware  corporation
("Fairfield"),  FA, Inc., an Arkansas  corporation and a wholly owned subsidiary
of Fairfield ("Merger Sub"), CARL FLEMISTER, C. WENDELL FLEMISTER,  JR. and APEX
MARKETING, INC., an Arkansas corporation ("Apex").

         WHEREAS,  the respective  Boards of Directors of Fairfield,  Merger Sub
and  Apex  each  have  determined  that it is in the  best  interests  of  their
respective  stockholders  for  Merger  Sub to  merge  with and  into  Apex  (the
"Merger"),  upon the  terms  and  subject  to the  conditions  set forth in this
Agreement;

     WHEREAS, Carl Flemister and C. Wendell Flemister,  Jr.  (collectively,  the
"Shareholders"  and each a  "Shareholder")  hold all of the outstanding  capital
stock of Apex;

         WHEREAS,  the respective  Boards of Directors of Fairfield,  Merger Sub
and Apex  have  each  determined  that the  Merger  and the  other  transactions
contemplated  under this Agreement are consistent  with, and in furtherance  of,
their respective business strategies and goals;

         WHEREAS,  Fairfield,  Merger Sub,  Shareholders and Apex desire to make
certain representations, warranties, covenants and agreements in connection with
the  transactions  contemplated by this Agreement and also to prescribe  various
conditions to the Merger;

         WHEREAS,  for federal  income tax  purposes,  it is  intended  that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Code; and

         WHEREAS,  for financial  accounting  purposes,  it is intended that the
Merger will be accounted for as a pooling of interests transaction.

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


                                    ARTICLE I
                                   THE MERGER

         I.1 The Merger.  Upon the terms and subject to the conditions set forth
in this Agreement,  and in accordance with the Arkansas Business Corporation Act
of 1987 (the  "ABCA"),  Merger  Sub  shall be  merged  with and into Apex at the
Effective  Time (as  hereinafter  defined).  Following the Merger,  the separate
corporate  existence  of Merger  Sub will  cease and Apex will  continue  as the
surviving  corporation  (the  "Surviving  Corporation")  and will succeed to and
assume all the rights and obligations of Merger Sub in accordance with the ABCA.

         I.2 Closing.  The closing of the Merger (the "Closing") will take place
at 10:00 a.m. on the date that is two business days after the  expiration of the
Inspection  Period (the  "Closing  Date"),  at the offices of  Fairfield,  11001
Executive Center Drive,  Little Rock,  Arkansas 72211, unless another date, time
or place is agreed to in writing by all of the parties hereto.
<PAGE>

         I.3 Effective  Time.  Subject to the provisions of this  Agreement,  as
soon as  practicable  on or after the  Closing  Date the parties  shall  deliver
Articles of Merger (the  "Articles of Merger")  executed in accordance  with the
relevant provisions of the ABCA to the Arkansas Secretary of State for filing as
required under the ABCA and shall make all other filings or recordings  required
under the ABCA. The Merger shall become  effective at such time (the  "Effective
Time") as the  Articles of Merger have been  accepted for filing by the Arkansas
Secretary  of State (or such later time as stated in the  Articles of Merger and
permitted by the Arkansas Secretary of State), which will be the Closing Date or
as soon as practicable thereafter.

         I.4 Effect of the Merger.  The Merger  shall have the effects set forth
in Section 4-27-1106 of the ABCA.

         I.5 Articles of Incorporation.  Articles of incorporation of Apex shall
be amended to read in their  entirety as set forth in Exhibit A attached  hereto
and shall be the articles of  incorporation of the Surviving  Corporation  until
thereafter changed or amended as provided therein or by applicable law.

         I.6  Bylaws.  The  bylaws  of Apex  shall be  amended  to read in their
entirety  as set forth in  Exhibit B and  shall be the  bylaws of the  Surviving
Corporation following the Merger until thereafter changed or amended as provided
therein or by applicable law.

         I.7 Directors.  The directors of Merger Sub at the Effective Time shall
be the directors of the Surviving  Corporation  following the Merger,  until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.

         I.8 Officers. The officers of Merger Sub at the Effective Time shall be
the  officers of the  Surviving  Corporation  following  the  Merger,  until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.


                                   ARTICLE II
                EFFECTS OF THE MERGER ON THE CAPITAL STOCK OF THE
               CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES

         II.1 Effect on Capital  Stock.  As of the Effective  Time, by virtue of
the Merger and without any action on the part of the holder of any shares of the
capital stock of the constituent corporations:


<PAGE>

         (a)Exchanged Shares. All of the shares of Common Stock, par value
$.01 per  share,  of Apex (the  "Apex  Common  Stock")  issued  and  outstanding
immediately prior to the Effective Time (other than shares of Apex Common Stock,
if any, to be canceled under Section 2.1(c)),  shall be converted into the right
to receive the number (the "Exchanged Shares") of validly issued, fully paid and
nonassessable  shares of Common  Stock,  par value $.01 per share,  of Fairfield
(the "Fairfield Common Stock") as determined pursuant to the following sentence.
If on the second business day immediately preceding the Closing Date the closing
sale price per share of Fairfield  Common Stock  ("Closing  Price Per Share") as
reported in the New York Stock Exchange Composite Transaction Tape is:

                  (i) less than $24 per  share,  the  total  number of shares of
         Fairfield  Common Stock included in the Exchanged Shares shall be equal
         to $5,400,000 divided by the Closing Price Per Share;

                  (ii) at least $24 per  share but not more than $30 per  share,
         the total  number of shares of Fairfield  Common Stock  included in the
         Exchanged Shares shall be 225,000 shares of Fairfield Common Stock; or

                  (iii) more than $30 per share,  the total  number of shares of
         Fairfield  Common Stock included in the Exchanged Shares shall be equal
         to $6,750,000 divided by the Closing Price Per Share.

In each case,  the number of  Exchanged  Shares  shall be rounded to the nearest
whole share. If,  subsequent to the date hereof and prior to the Effective Time,
Fairfield  should split,  reclassify  or combine the shares of Fairfield  Common
Stock, or pay a stock dividend or other stock  distribution in Fairfield  Common
Stock, or otherwise  change or convert the Fairfield Common Stock into any other
securities,  or make any other dividend or distribution on the Fairfield  Common
Stock  (other than normal cash  dividends),  or if a record date with respect to
any of the  foregoing  shall have been set,  then the  Exchanged  Shares will be
appropriately  adjusted to reflect  such split,  reclassification,  combination,
dividend or other distribution or change.

         (b)Certificates.  All shares of Apex Common Stock to be converted
into the right to receive  shares of  Fairfield  Common  Stock  pursuant to this
Section 2.1 shall  cease to be  outstanding,  shall be canceled  and retired and
shall cease to exist,  and each holder of a  certificate  representing  any such
shares of Apex  Common  Stock  shall  thereafter  cease to have any rights  with
respect to such  shares of Apex  Common  Stock,  except the right to receive for
each of the shares of Apex Common Stock,  upon the surrender of such certificate
in  accordance  with Section 2.2,  the amount of Exchanged  Shares  specified in
Section 2.2.

         (c)Treasury  Shares. Shares of Apex Common Stock, if any, held by
Apex as treasury stock immediately prior to the Effective Time shall cease to be
outstanding,  shall be canceled and retired without payment of any consideration
therefor, and shall cease to exist.

         (d)Stock  of Merger Sub. Each share of common stock, par value of
$.01 per share,  of Merger Sub issued and outstanding  immediately  prior to the
Effective  Time shall be converted  into and exchanged  for one validly  issued,
fully paid and nonassessable share of common stock of the Surviving Corporation.
<PAGE>

         II.2 Surrender and Payment for Shares. Upon surrender to Fairfield of a
certificate or certificates representing the Shareholder's shares of Apex Common
Stock outstanding immediately prior to the Effective Time, each Shareholder will
be entitled  to receive the number of  Exchanged  Shares  equal to the  product,
rounded to the nearest whole number,  of (a) the Exchanged Shares  multiplied by
(b) a fraction, the numerator of which is the aggregate number of shares of Apex
Common Stock  represented by the  certificate or certificates so surrendered and
the denominator of which is the aggregate  number of shares of Apex Common Stock
issued and outstanding (the "Apex Stock Percentage"). Fairfield shall deliver to
such  holder  a  certificate  representing  90%  of the  number  of  shares  the
Shareholder  is entitled to receive  under this Section 2.2,  with the remaining
shares of Fairfield Common Stock due to that Shareholder (the "Holdback Shares")
to be held in escrow and delivered in accordance with Section 5.3 and the escrow
agreement  to be entered into upon terms  mutually  agreeable to the parties and
the escrow agent (the "Escrow Agreement").

         II.3  Transfer of Shares  After the  Effective  Time.  No  transfers of
shares of Apex Common  Stock shall be made on the stock  transfer  books of Apex
after the close of business on the day prior to the date of the Effective Time.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

         III.1  Representations  and  Warranties  of  Fairfield  and Merger Sub.
Fairfield  and Merger Sub  represent  and  warrant to Apex and  Shareholders  as
follows:

         (a)Organization.   Each  of   Fairfield   and  Merger  Sub  is  a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation  and has the requisite  corporate power and
authority to carry on its business as now being conducted. Each of Fairfield and
Merger Sub is duly  qualified or licensed to do business and is in good standing
in each  jurisdiction  in which the nature of its  business or the  ownership or
leasing of its properties makes such qualification or licensing necessary, other
than in such  jurisdictions  where the failure to be so qualified or licensed or
to be in good  standing  (individually  or in the  aggregate)  could  not have a
material adverse effect on Fairfield.

         (b)Binding  Agreement.  This Agreement has been duly executed and
delivered  by  Fairfield  and Merger Sub and  constitutes  the valid and binding
agreement of Fairfield and Merger Sub enforceable in accordance with its terms.

         (c)No  Breach.  Neither the  execution of this  Agreement nor the
consummation of the transactions  contemplated  hereby will result in the breach
of any term or  provision  of,  or  constitute  a  default  under,  any  charter
provision, bylaw, agreement, indenture,  instrument, order, law or regulation to
which Fairfield and/or Merger Sub is a party or which is otherwise applicable to
both or either of them which would have a material  adverse  effect on Fairfield
and  its  Subsidiaries  (as the  term  "subsidiary"  is  defined  in Rule  12b-2
promulgated  under the  Exchange  Act)  (including  Merger Sub) taken as a whole
other than the credit agreements described in Section 6.1(b).
<PAGE>

         (d)Merger  Sub.  Merger Sub is a newly formed direct wholly owned
subsidiary  of  Fairfield  formed  solely for the  purpose of  engaging  in this
transaction.  As of the Effective  Date,  Merger Sub will not have conducted any
business  nor  will  it  own  any  significant  assets  or owe  any  significant
liabilities.

         (e)Capitalization.  The  authorized  capital  stock of  Fairfield
consists of 25,000,000  shares of Fairfield Common Stock and 5,000,000 shares of
preferred stock, par value $.01 per share ("Fairfield  Preferred Stock"). At the
close of business on September  18,  1997,  (i)  16,689,192  shares of Fairfield
Common Stock were issued and  outstanding,  (ii)  2,305,640  shares of Fairfield
Common  Stock  were  held by  Fairfield  in its  treasury,  (iii) no  shares  of
Fairfield  Preferred  Stock  were  issued  and  outstanding,  (iv) no  shares of
Fairfield  Preferred  stock were held by  Fairfield  in its treasury and (v) not
more than 5,093,155  shares of Fairfield Common Stock were reserved for issuance
(A) upon  exercise  of  outstanding  employee  and  director  stock  options and
warrants to purchase  shares of Fairfield  Common Stock,  (B) under  Fairfield's
plan of reorganization and related agreements and settlements, and (C) under its
employee stock purchase plan.  Except as set forth above, as of the date of this
Agreement,  no shares of capital  stock or other voting  securities of Fairfield
were  issued,  reserved  for  issuance  or  outstanding.  As of the date of this
Agreement,  all  outstanding  shares of capital stock of Fairfield  are, and all
shares which may be issued  pursuant to this  Agreement  will be, when issued in
accordance with the terms hereof,  duly authorized,  validly issued,  fully paid
and nonassessable, and not subject to preemptive rights.

         (f)Compliance  With Laws.  Fairfield has obtained all, and is not
in default  under  any,  permits,  licenses,  certificates,  approvals,  orders,
franchises, registrations and other authorizations required for the operation of
its  business,  except where the failure to obtain a permit,  or a default under
such permits, would not, individually or in the aggregate,  adversely affect the
business or prospects of Fairfield.

         (g)SEC Documents;  Undisclosed  Liabilities.  Fairfield has filed
all required reports,  schedules, forms, statements and other documents with the
SEC  since  January  1,  1996  (the  "Fairfield  SEC  Documents").  As of  their
respective dates, the Fairfield SEC Documents  complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated  thereunder  applicable
to such  Fairfield SEC  Documents,  and none of the Fairfield SEC Documents when
filed  contained  any untrue  statement of a material fact or omitted to state a
material  fact  required to be stated  therein or necessary in order to make the
statements  therein,  in light of the circumstances  under which they were made,
not misleading. Except to the extent that information contained in any Fairfield
SEC Document has been revised or superseded  by a later  Fairfield SEC Document,
none of the Fairfield SEC Documents  contain any untrue  statement of a material
fact or omit to state  any  material  fact  required  to be  stated  therein  or
necessary in order to make the statements therein, in light of the circumstances
under  which  they were  made,  not  misleading.  The  financial  statements  of
Fairfield included in the Fairfield SEC Documents comply as to form, as of their
<PAGE>

respective  dates  of  filing  with  the  SEC,  in all  material  respects  with
applicable  accounting  requirements  and the published rules and regulations of
the SEC with respect  thereto,  have been prepared in accordance  with generally
accepted accounting principles (except, in the case of unaudited statements,  as
permitted  by Form 10-Q of the SEC)  applied on a  consistent  basis  during the
periods  involved  (except as may be indicated in the notes  thereto) and fairly
present  in  all  material  respects  the  consolidated  financial  position  of
Fairfield  and its  consolidated  Subsidiaries  as of the dates  thereof and the
consolidated  results of their  operations  and cash flows for the periods  then
ended  (subject,  in the  case of  unaudited  statements,  to  normal  recurring
year-end  audit  adjustments).   Except  (i)  as  reflected  in  such  financial
statements or in the notes thereto,  (ii) as contemplated  hereunder,  (iii) for
liabilities  incurred in  connection  with this  Agreement  or the  transactions
contemplated  hereby,  (iv)  for  liabilities  and  obligations  incurred  since
December  31,  1996 in the  ordinary  course of  business  consistent  with past
practice,  and (v) as set forth in Schedule 3.1(g), neither Fairfield nor any of
its  Subsidiaries  has any material  liabilities  or  obligations  of any nature
(whether  accrued,  absolute,  contingent or otherwise),  including  liabilities
arising  under any  environmental  laws or laws  relating to the  protection  of
health or safety  required by generally  accepted  accounting  principles  to be
reflected in a  consolidated  balance  sheet of Fairfield  and its  consolidated
Subsidiaries  and which,  individually or in the aggregate,  could reasonable be
expected to have a material adverse effect on Fairfield.

         (h)Absence of Certain Changes or Events.  Except (i) as disclosed
in the Fairfield SEC Documents,  (ii) for the transactions  provided for herein,
(iii) as set forth in  Schedule  3.1(g),  and (iv) for  liabilities  incurred in
connection  with or as a result  of this  Agreement,  since the date of the most
recent financial  statements included in the Fairfield SEC Documents,  Fairfield
has conducted its business only in the ordinary  course,  and there has not been
(1) any material adverse change in Fairfield, (2) any declaration, setting aside
or payment of any  dividend or other  distribution  (whether  in cash,  stock or
property) with respect to any of Fairfield's  capital stock other than the stock
dividend   effected  on  July  15,   1997,   (3)  any  split,   combination   or
reclassification  of any of  Fairfield's  capital  stock or any  issuance or the
authorization  of any issuance of any other securities in respect of, in lieu of
or in  substitution  for  shares of  Fairfield's  capital  stock  other than the
adjustment  of share  purchase  rights in  connection  with the  stock  dividend
effected on July 15, 1997, or (4) except  insofar as may have been  disclosed in
the  Fairfield  SEC  Documents  or  required by a change in  generally  accepted
accounting principles, any change in accounting methods, principles or practices
by Fairfield materially affecting its assets, liabilities or business.

         (i)Proceedings.   Except  as  set  forth  in  the  Fairfield  SEC
Documents,  there are  currently no pending,  and  Fairfield is not aware of any
threatened, lawsuits or administrative or other proceedings against Fairfield or
its assets that would adversely affect the business or prospects of Fairfield.

         (j)Tax  Matters.  Fairfield  has not  taken  any  action  that is
reasonably  likely to prevent the Merger  from  qualifying  as a  reorganization
within the meaning of Section 368(a) of the Code.

         III.2   Representations   and  Warranties  of  Shareholders  and  Apex.
Shareholders  and Apex hereby  represent and warrant to Fairfield and Merger Sub
as follows:
<PAGE>

         (a)Organization.  Apex is a corporation  duly organized,  validly
existing and in good standing under the laws of the State of Arkansas.  Apex has
full power to own its  properties and to carry on the business  currently  being
conducted by it, and does not conduct business in any state other than Arkansas,
Missouri and Texas.  Apex does not now own and has never owned any capital stock
any  or  equity  interest  in  any  corporation,   limited  liability   company,
partnership or other entity and has no Subsidiary.

         (b)Binding  Agreement. The execution,  delivery, and consummation
of this Agreement has been duly authorized by Shareholders and Apex and approved
by all necessary action.  This Agreement has been duly executed and delivered by
Apex and each  Shareholder and  constitutes  the valid and binding  agreement of
each of them enforceable in accordance with its terms.

         (c)No  Breach.  Neither the  execution of this  Agreement nor the
consummation of the transactions  contemplated  hereby will result in the breach
of any term or provision of, or constitute a default  under,  or be in violation
of any charter provision, bylaw, agreement, instrument, order, law or regulation
to  which  any  Shareholder  and/or  Apex  is a  party  or  which  is  otherwise
applicable.

         (d)Financial Statements.  Shareholders and Apex have furnished to
Fairfield  unaudited balance sheets of Apex as of April 30, 1997 and the related
unaudited  statements  of  operations  for the  fiscal  year then  ended and the
unaudited  balance sheet of Apex as of August 31, 1997 and the related unaudited
consolidated  statements  of  operations  for the four  months  then  ended (the
"Unaudited Financial Statements"). Those financial statements fairly present the
financial  position  of Apex at, and the results of  operations  for the periods
ending on, such dates, in a consistent  manner  throughout the periods indicated
and were prepared based on the books and records maintained for Apex's business.
Except as disclosed in the Unaudited  Financial  Statements  (which includes the
notes  thereto),  Apex  has  no  liabilities  (contingent,  accrued,  actual  or
otherwise) that were not provided or reserved for in the August 31, 1997 balance
sheet,  other than  liabilities  incurred  since the date of the August 31, 1997
balance sheet in the ordinary course of business;  and all reserves  established
by Apex and  reflected  in the August 31, 1997  balance  sheet were at the times
they were established,  adequate for the purposes indicated  therein.  Except as
disclosed in those  financial  statements  (which  includes the notes  thereto),
since  August 31,  1997,  Apex has not:  (i)  declared  or set aside or paid any
dividend or made any payment or distribution in respect of shares of its capital
stock;  (ii) made any loans or advances to any person;  (iii)  entered  into any
transaction with any affiliate of Apex or either Shareholder;  (iv) incurred any
indebtedness  for money  borrowed;  or (v) made or entered into any agreement or
understanding to do any of the foregoing.
<PAGE>

         (e)Accounts  Receivable. The accounts receivable reflected on the
balance sheet included in the Unaudited Financial  Statements,  and the accounts
receivable created after the date thereof,  are valid and genuine and arose from
bona fide  performance of services or other  transactions in the ordinary course
of the business of Apex.  The accounts  receivable  have been  collected in full
since those dates,  or are  collectible  at their full amounts as of the Closing
Date.

         (f)Assets.

                  (i) Schedule  3.2(f) is a complete  and  accurate  list of all
         owned or leased  real  property  (the "Real  Property"),  and a list of
         personal  property  (individual  items with a depreciated book value in
         excess of $3,000) (the "Personal  Property"),  which is owned or leased
         by Apex. Except as set forth on Schedule 3.2(f), Apex is not a party to
         any leases, subleases, rental agreements,  contracts of sale, tenancies
         or  licenses  (collectively,  "Leases")  of any  portion  of  the  Real
         Property  or the  Personal  Property.  Subject to the stated book value
         threshold,  the Real  Property  and the Personal  Property  include all
         property (whether real,  personal or mixed) which Apex purports to own,
         including,  without limitation, all the properties and assets reflected
         in the Unaudited  Financial  Statements  (except for such properties or
         assets disposed of since the date of the Unaudited Financial Statements
         in the ordinary course of business),  and all the properties and assets
         purchased by Apex since the date of the Unaudited Financial  Statements
         and all such properties are all the assets necessary for the conduct by
         Apex of its business as now conducted.

                  (ii)  Except as set forth on Schedule  3.2(f),  Apex has good,
         valid and  marketable  fee simple title to all Real  Property  owned by
         Apex, free and clear of all liens, mortgages,  pledges, deeds of trust,
         security interest, conditional sales agreements,  charges, encumbrances
         and other adverse claims or interests of any kind (together,  "Liens"),
         other than Liens for  property  taxes not yet due and payable and other
         interests  which do not  materially  affect the  usefulness of the Real
         Property  to the  present  conduct of  business  of Apex.  Apex has not
         granted any leases, subleases, tenancies or licenses of or entered into
         any rental agreement or contract of sale with respect to any portion of
         the Real Property.  Except as set forth on Schedule 3.2(f),  each Lease
         to which any of the Real  Property  is  subject is valid,  binding  and
         enforceable  in  accordance  with  its  material   terms,   subject  to
         bankruptcy,  insolvency,  reorganization,  moratorium  and similar laws
         affecting the enforcement of rights generally and to general principles
         of equity, neither Apex nor any other party thereto is in default under
         any Lease and no event or  circumstance  has  occurred  which,  without
         notice or lapse of time or both,  would  constitute a default under any
         material provision of such Lease.

                  (iii)  Except as set forth on Schedule  3.2(f),  all  Personal
         Property  is free  and  clear  of all  Liens,  and  Apex  has  good and
         marketable title thereto.

                  (iv)  Except as set forth on  Schedule  3.2(f),  each Lease to
         which  the  Personal   Property  is  subject  is  valid,   binding  and
         enforceable  in  accordance  with  its  material   terms,   subject  to
         bankruptcy,  insolvency,  reorganization,  moratorium  and similar laws
         affecting the enforcement of rights generally and to general principles
         of equity, neither Apex nor any other party thereto is in default under
         any Lease and no event or  circumstance  has  occurred  which,  without
         notice or lapse of time or both,  would  constitute a default under any
         material provision of such Lease.

                  (v)  Apex  has  not  received  notice  as of the  date of this
         Agreement  that the whole or any  portion of the Real  Property  or any
         other assets or property of Apex is subject to any governmental  decree
         or order to be sold or is being  condemned,  expropriated  or otherwise
         taken by any public authority.
<PAGE>

         (g)Proceedings.  There are currently no pending, and Shareholders
and Apex are not aware of any threatened,  lawsuits or  administrative  or other
proceedings  against  Apex or its  assets  other  than as set forth on  Schedule
3.2(g). Apex is not subject to any currently existing order, writ, injunction or
decree. Apex is not aware of any pending or proposed legislation,  ordinances or
laws that would affect adversely the business or prospects of Apex.

         (h)Compliance With Laws. The business conducted by Apex has been,
and currently is being,  conducted in material  compliance with all, and Apex is
not in  breach  of any,  applicable  laws,  rules  and  regulations  or  orders,
including  but  not  limited  to  those  relating  to  telemarketing,   of  each
jurisdiction  in which its business is carried on and all governing  instruments
applicable to Apex and to the conduct of its business,  except for noncompliance
or breach which, individually or in the aggregate, will not affect adversely the
business or prospects of its business or Apex. Apex has obtained all, and is not
in default  under  any,  permits,  licenses,  certificates,  approvals,  orders,
franchises, registrations and other authorizations required for the operation of
its  business,  except where the failure to obtain a permit,  or a default under
such permits, would not, individually or in the aggregate,  adversely affect the
business or prospects of Apex.  Schedule  3.2(h)  identifies each state in which
Apex conducts telemarketing activities and specifies whether Apex conducts those
activities  pursuant to all  required  licenses or permits  necessary to conduct
telemarketing activities in that state or whether Apex conducts those activities
pursuant to an exemption from the telemarketing laws of that state.

         (i)Employees. Schedule 3.2(i) contains a true and correct list of
all current key  employees of Apex,  including  the  commencement  date of their
employment  and their  current  compensation  including  all  accrued  benefits,
vacation  and  sick  leave.  Apex is not a party  to any  collective  bargaining
agreements.

         (j)Intellectual  Property.  Apex  does  not  possess  or use  any
patents,  copyrights,  trade names,  trademarks,  assumed name (fictitious name)
filings or service marks, other than as described in Schedule 3.2(j) hereto.

         (k)No Adverse Change. Subsequent to June 30, 1997, there have not
been any material changes in the business,  operations, assets or liabilities or
the condition,  financial or otherwise, or prospects of Apex, other than changes
in the  ordinary  course  of  business  none  of  which  individually  or in the
aggregate has been materially adverse, nor has there occurred any other event or
condition of any character which has materially and adversely  affected or which
could  materially  and adversely  affect the business,  operations,  properties,
assets or liabilities,  the condition,  financial or otherwise,  or prospects of
Apex or its business.

         (l)Contracts.  Schedule  3.2(l) contains a list of all contracts,
agreements or other arrangements  ("Contracts") to which Apex is party which are
reasonably expected to require the payment of more than $3,000 and which are not
terminable without penalty or termination fee upon no more than 30 days' written
notice,  copies of which have been provided to Fairfield.  Each of the Contracts
is in full force and effect and is a binding  obligation of each party  thereto,
and the Merger will not be a default under any of the  Contracts.  Apex has good
relations with each party to the Contracts and, no party has made or threatened,
any  claim  against  Apex or  either or both of  Shareholders  for  breach of or
failure to perform  under any  Contract  and no  disputes  exist  regarding  any
Contract.  No event has occurred that has caused, or with the passage of time or
giving of notice would cause, Apex to be in default under any Contract.
<PAGE>

         (m)Environmental  Matters.  The  assets  of Apex  have  not  been
associated  with any spill,  disposal,  discharge  or  release of any  hazardous
materials  (which includes any hazardous or toxic  substance,  material or waste
which is  regulated  by any  Governmental  Entity) into or upon or over any real
property or into or upon ground or surface water including without limitation in
either case the property  which is the subject of any Real  Property  that is or
has been leased by Apex.

         (n)Reserves.  Apex has adequately insured for or reserved against
all  liabilities  which can reasonably be determined to have arisen or may arise
as a result of the operation of its business.

         (o)Broker's Fee. Neither Apex nor either Shareholder has made any
agreement or taken any other action which might cause anyone to become  entitled
to a broker's fee or  commission  as a result of the  transactions  contemplated
under this Agreement.

         (p)Capitalization.  The authorized capital stock of Apex consists
of 1,000 shares of common stock, par value $.01 per share, of which 1,000 shares
of common stock are issued and  outstanding.  All  outstanding  shares of common
stock  have  been  duly  authorized  and  validly  issued,  are  fully  paid and
nonassessable,   and  are  owned  by   Shareholders.   No   options,   warrants,
subscriptions,  rights of conversion or exchange exist that may obligate Apex to
issue any additional capital stock. Neither Apex nor either Shareholder is party
to any shareholder,  voting or similar voting affecting or restricting the sale,
transfer,  disposition, voting or other rights of or relating to the Apex Common
Stock.

     (q) Pooling.  Neither Apex nor either Shareholder has taken any of the
         -------
actions set forth on Schedule 3.2(q).

         (r)Absence of Changes in Benefit Plans; Labor Relations.

                  (i) Schedule 3.2(r) sets forth a true and complete list of all
         the  following:  (x) each  "employee  benefit  plan,"  as such  term is
         defined in Section  3(3) of ERISA,  pursuant  to which Apex has (A) any
         liability in respect of current or former employees, agents, directors,
         or  independent   contractors   of  Apex  ("Apex   Employees")  or  any
         beneficiaries or dependents of any Apex Employees or (B) any obligation
         to issue capital stock of Apex (each, an "Apex Employee Plan"), and (y)
         each other plan, program, policy, contract or arrangement providing for
         bonuses,  pensions,  deferred  pay,  stock  or  stock  related  awards,
         severance   pay,    salary    continuation    or   similar    benefits,
         hospitalization, medical, dental or disability benefits, life insurance
         or  other  employee  benefits,  or  compensation  to or  for  any  Apex
         Employees or any  beneficiaries  or  dependents  of any Apex  Employees
         (other than directors' and officers'  liability  policies),  whether or
         not  insured or funded,  (A)  pursuant  to which Apex has any  material
<PAGE>

         liability or (B)  constituting an employment or severance  agreement or
         arrangement  with any officer or director of Apex or with any holder of
         shares of Apex Common Stock (each, an "Apex Benefit Arrangement"). Apex
         has provided to Fairfield  with respect to each Apex  Employee Plan and
         Apex Benefit  Arrangement:  (i) a true and complete copy of all written
         documents   comprising   such  Apex   Employee  Plan  or  Apex  Benefit
         Arrangement  and any related  trust  agreement,  insurance  contract or
         other funding vehicle (including  amendments and individual  agreements
         relating thereto, or, if there is no such written document, an accurate
         and complete  description  of such Apex  Employee  Plan or Apex Benefit
         Arrangement);   (ii)  the  most  recent  Form  5500  or  Form  5500-C/R
         (including all schedules thereto), if applicable; (iii) the most recent
         financial statements and actuarial reports or valuations,  if any; (iv)
         the  summary  plan  description  currently  in effect and all  material
         modifications thereof, if any; and (v) the most recent Internal Revenue
         Service determination letter, if any.

                  (ii) Each Apex Employee Plan and Apex Benefit  Arrangement has
         been  established,  operated and maintained in all material respects in
         accordance  with  its  terms  and  in  material   compliance  with  all
         applicable  laws and the rules and regulations  thereunder,  including,
         but not limited to, ERISA and the Code. None of Shareholders or Apex or
         any of  its  respective  current  or  former  directors,  officers,  or
         employees,  nor, to the best  knowledge of  Shareholders  and Apex, any
         other disqualified person or party-in-interest with respect to any Apex
         Employee Plan,  have engaged  directly or indirectly in any "prohibited
         transaction,"  as such term is defined  in Section  4975 of the Code or
         Section 406 of ERISA,  with respect to which Apex could  reasonably  be
         expected to have or has any material  liability.  All contributions and
         other  payments  required to be made for any period through the date to
         which this  representation  speaks to the Apex Employee  Plans and Apex
         Benefit  Arrangements  (or to any person pursuant to the terms thereof)
         have  been made or paid in a timely  fashion,  or,  to the  extent  not
         required  to be made  or  paid on or  before  the  date to  which  this
         representation  speaks,  have been reflected in the Unaudited Financial
         Statements.  Each Apex  Employee  Plan that is intended to be qualified
         under  Section  401(a) of the Code has been  determined by the Internal
         Revenue  Service  to be so  qualified  or an  application  for  such  a
         determination,  which was filed before the expiration of the applicable
         remedial  amendment period,  is pending,  and, to the best knowledge of
         Apex and  Shareholders,  no  circumstances  exist  that are  reasonably
         expected by Apex and  Shareholders  to result in the  revocation of any
         such determination.

                  (iii) With respect to each Apex  Employee Plan that is subject
         to Title IV of ERISA:  (i) as of the last applicable  annual  valuation
         date,  the present value of all benefits  under such Apex Employee Plan
         did not  exceed  the value of the  assets of such  Apex  Employee  Plan
         allocable to such benefits,  on a projected  benefits basis,  using the
         actuarial  methods,  factors and  assumptions  used for the most recent
         actuarial  report with  respect to such Apex  Employee  Plan;  and (ii)
         there  has been no  termination,  partial  termination  or  "reportable
         event" (as defined in Section  4043 of ERISA) with  respect to any such
         Apex  Employee  Plan.  No Apex Employee Plan that is subject to Section
<PAGE>

         412 of the Code has incurred any "accumulated  funding  deficiency" (as
         defined in Section 412 of the Code),  whether or not  waived.  No event
         has  occurred,  and, to the best  knowledge  of Apex and  Shareholders,
         there do not exist any circumstances, that could reasonably be expected
         to subject Apex to any material  liability  arising  under ERISA.  With
         respect  to the Apex  Employee  Plans  and Apex  Benefit  Arrangements,
         individually and in the aggregate,  no event has occurred,  and, to the
         best  knowledge  of Apex  and  Shareholders,  there  do not  exist  any
         circumstances, that could reasonably be expected to subject Apex to any
         material liability under the Code or other applicable law, or under any
         indemnity  agreement to which Apex is a party,  excluding liability for
         benefit claims, administrative expenses and funding obligations payable
         in the ordinary course.

                  (iv) No Apex Employee Plan is a  "multiemployer  plan" as that
         term is defined in Section 3(37) of ERISA or a "multiple employer plan"
         described  in  Section  4063(a)  of  ERISA,  nor has Apex or any  ERISA
         Affiliate of Apex at any time since January 1, 1992,  contributed to or
         been obligated to contribute to such a  multiemployer  plan or multiple
         employer plan.

                  (v) Except with respect to an Apex Employee Plan, neither Apex
         nor any ERISA Affiliate of Apex has any Controlled Group Liability, nor
         do any circumstances  exist that could result in any of them having any
         Controlled Group Liability.  "Controlled Group Liability" means any and
         all liabilities under (i) Title IV of ERISA, (ii) Section 302 of ERISA,
         (iii)  Sections  412 and 4971 of the  Code  and  (iv) the  continuation
         coverage requirements of Section 601 et seq. of ERISA and Section 4980B
         of the Code.

                  (vi) Neither the execution or delivery of this Agreement,  nor
         the consummation of the transactions  contemplated hereby (either alone
         or together with any additional or subsequent  events),  constitutes an
         event under any Apex Employee Plan, Apex Benefit Arrangement,  loan to,
         or  individual  agreement or contract  with,  an Apex Employee that may
         result  in  any  payment  (whether  of  severance  pay  or  otherwise),
         restriction or limitation  upon the assets of any Apex Employee Plan or
         Apex Benefit Arrangement,  acceleration of payment or vesting, increase
         in benefits or compensation,  or required funding,  with respect to any
         Apex Employee,  or the  forgiveness of any loan or other  commitment of
         any Apex Employees.

                  (vii) There are no actions,  suits,  arbitrations,  inquiries,
         investigations  or other  proceedings  (other than  routine  claims for
         benefits)  pending  or,  to the  knowledge  of  Apex  or  Shareholders,
         threatened,  with  respect to any Apex  Employee  Plan or Apex  Benefit
         Arrangement.

                  (viii) No Apex Employees and no beneficiaries or dependents of
         Apex Employees are or may become  entitled under any Apex Employee Plan
         or Apex  Benefit  Arrangement  to  post-employment  or retiree  welfare
         benefits of any kind,  including  without  limitation  death or medical
         benefits, other than coverage mandated by Part 6 of Title I of ERISA or
         Section 4980B of the Code or other applicable law.
<PAGE>

         (s)Taxes.

                  (i) Except as set forth in Schedule 3.2(s), Apex has filed all
         tax  returns and  reports  required to be filed by it, or requests  for
         extensions  to file such  returns or reports have been timely filed and
         granted  and have not  expired,  and all tax  returns  and  reports are
         complete and accurate in all  respects,  except to the extent that such
         failures  to file or be  complete  and  accurate  in all  respects,  as
         applicable, individually or in the aggregate, would not have a material
         adverse  effect on Apex.  Apex has paid or made provision for all taxes
         shown as due on such tax  returns and  reports.  No claim has been made
         since  September 1, 1992 by any authority in a jurisdiction  where Apex
         does not file tax  returns  that it is or may be subject to taxation by
         that jurisdiction.  The Unaudited Financial Statements reflect adequate
         reserves  for all taxes  payable by Apex for all  taxable  periods  and
         portions thereof accrued through the date of such financial statements,
         and no  deficiencies  for any taxes  have been  proposed,  asserted  or
         assessed against Apex that are not adequately  reserved for, except for
         inadequately reserved taxes and inadequately reserved deficiencies that
         would not,  individually or in the aggregate,  have a material  adverse
         effect on Apex.  There are no liens for taxes  (other  than for current
         taxes not yet due and  payable) on the assets of Apex.  No requests for
         waivers of the time to assess any taxes  against Apex have been granted
         or are  pending,  except for  requests  with respect to such taxes that
         have  been   adequately   reserved  for  in  the  Unaudited   Financial
         Statements,  or, to the extent not adequately reserved,  the assessment
         of which would not,  individually or in the aggregate,  have a material
         adverse  effect  on  Apex.  Apex  is not a  party  to or  bound  by any
         agreement  providing for the  allocation or sharing of taxes.  Apex has
         not filed a consent pursuant to or agreed to the application of Section
         341(f)  of the Code.  Apex has  disclosed  on its  federal  income  tax
         returns  all  positions  taken  therein  that  could  give  rise  to  a
         substantial  understatement of federal income tax within the meaning of
         Section  6662 of the Code.  All taxes that are  required by the laws of
         the United States, any state or political  subdivision  thereof, or any
         foreign  country to be  withheld  or  collected  by Apex have been duly
         withheld or collected  and, to the extent  required,  have been paid to
         the proper  Governmental  Entities or properly deposited as required by
         applicable  laws. Apex (i) has not been a member of an affiliated group
         filing a consolidated federal income tax return (other than a group the
         common parent of which was Apex),  or (ii) has no any liability for the
         taxes of any person (other than Apex) under Treasury Regulation Section
         1.1502-6 (or any similar provision of state, local, or foreign law), as
         a transferee  or successor,  by contract or otherwise.  For purposes of
         this Agreement, the term tax (including,  with correlative meaning, the
         terms "taxes" and "taxable") shall include all federal,  state,  local,
         and foreign income, profits, franchise, gross receipts, payroll, sales,
         employment,  use,  property,  withholding,  excise,  and  other  taxes,
         duties,  or  assessments  of any nature  whatsoever,  together with all
         interest,  penalties,  and  additions  imposed  with  respect  to  such
         amounts.

                  (ii)  Schedule  3.2(s) sets forth each state in which Apex has
         collected  or remitted  any sales  and/or use taxes since  September 1,
         1992.  To knowledge of Apex and  Shareholders,  Apex has not  conducted
         activities  in any other  state  that  would  require  such taxes to be
         collected or remitted.  No claim has ever been made since  September 1,
         1992 by any authority in a  jurisdiction  where Apex does not pay sales
         and/or use taxes that it is or may be subject to a requirement to remit
         such taxes in that jurisdiction.
<PAGE>

                  (iii) Apex has not taken any action that is reasonably  likely
         to prevent the Merger from  qualifying as a  reorganization  within the
         meaning of Section 368(a) of the Code.

         (t)Voting Requirements.  The affirmative vote of the Shareholders
(the "Apex Shareholder  Approval") to approve this Agreement is the only vote of
the holders of capital stock of Apex necessary to approve this Agreement and the
transactions contemplated by this Agreement.

         (u)No Excess Parachute Payments.  Except as described in Schedule
3.2(u),  no amount  that could be  received  (whether in cash or property or the
vesting of property) as a result of any of the transactions contemplated by this
Agreement by any employee,  officer or director of Apex or any of its Affiliates
who is a  "disqualified  individual" (as such term is defined in Section 280G(c)
of the  Code  or  proposed  Treasury  Regulation  Section  1.280G-1)  under  any
employment,  severance or termination agreement,  other compensation arrangement
or Apex  Employee  Plan or Benefit  Arrangement  currently in effect would be an
"excess  parachute  payment" (as such term is defined in Section  280G(b) (l) of
the Code).

         (v)Ownership  of Fairfield  Common Stock.  Except as set forth in
Schedule 3.2(v), neither Apex nor, to its or Shareholders' knowledge, any of its
affiliates  (including but not limited to  Shareholders),  (i) beneficially owns
(as such term is defined in Rule 13d-3  under the  Exchange  Act),  directly  or
indirectly,  or (ii) is a party to any agreement,  arrangement or  understanding
for the purpose of  acquiring,  holding,  voting or disposing  of, in each case,
shares of capital stock of Fairfield. For each beneficial owner, Schedule 3.2(v)
sets forth the name of the beneficial  owner, the number of shares owned and the
date such shares were acquired by the beneficial owner.

     III.3 Additional   Representations  of  Shareholders.  Each  Shareholder
represents  and warrants on behalf of such  Shareholder  to Fairfield and Merger
Sub as follows:

         (a)Exchanged Shares Not Registered.  Shareholder understands that
the Exchanged  Shares have not been registered  under the Securities Act and may
be transferred only if so registered or if an exemption  therefrom is available.
Shareholder  will not sell or dispose of any of the Exchanged Shares without (1)
the registration,  qualification,  approval and listing of the Exchanged Shares,
or (2) the delivery to Fairfield of an opinion of counsel, in form and substance
reasonably  satisfactory  to counsel for  Fairfield,  that such proposed sale or
disposition is exempt from the provisions of Section 5 of the Securities Act and
any applicable states securities laws.

         (b)Restrictions  on Transfer. Until such time as, and unless, the
registration,  qualification,  approval and listing of the  Exchanged  Shares is
effected, Shareholder understands that the certificates for the Exchanged Shares
received by him pursuant to the transactions set forth herein shall bear legends
and be subject to the restrictions set forth in Section 5.10.

         (c)Tax Advice. Each Shareholder has relied and will rely upon his
own tax  advisor(s) or tax  advisor(s)  for Apex,  for advice and  counseling in
regard  to the  structure,  accounting  or tax  treatment  and all  other tax or
accounting  issues  relating  to the  transactions  contemplated  by the parties
hereunder.  Neither Shareholder has relied, nor will either Shareholder rely, on
Fairfield or its tax advisors, for any tax advice or counseling in regard to the
transactions contemplated hereunder.


                                   ARTICLE IV
                    COVENANTS RELATING TO CONDUCT OF BUSINESS

         IV.1  No   Solicitation.   Prior  to  the  Effective   Time,  Apex  and
Shareholders will not (a) offer for sale any of the assets of or any interest in
Apex;  (b) solicit any offers to  purchase or make any  attempts by  preliminary
conversations  or  negotiations to dispose of any of the assets of or any equity
interest in Apex to any person, firm or entity,  other than to Fairfield,  or to
engage in any type of  business  combination  with any  person,  firm or entity,
other than  Fairfield;  or (c) provide  anyone with any written or oral offer to
sell,  invitation to purchase or any offering or sales  material with respect to
any of the assets of or the equity of Apex.

         IV.2 Conduct  of  Business  Prior to  Effective  Time.  Except  for
transactions specifically permitted by this Agreement or consented to in writing
by Fairfield,  prior to the Effective Time Apex shall (and the Shareholders will
cause Apex to):

                  (a) operate its  business  only in the  ordinary  course,  and
employ no additional persons or promote or otherwise expand the responsibilities
of any present officer of Apex;

                  (b) except as set forth on Schedule 4.2(b) or otherwise in the
ordinary course of its business and consistent with past practices,  make (i) no
increase  in the  current  rate of salary or other  compensation  payable to any
officer,  employee or agent;  (ii) no bonus payment to any officer,  employee or
agent; or (iii) no contract for any of the foregoing;

                  (c) except as set forth on Schedule 4.2(c),  neither make, nor
incur  any  obligation  to  make,  any  capital   expenditures   except  capital
expenditures  in the ordinary  course of  businesses  in an amount not to exceed
$3,000;

                  (d) act in a manner that will  preserve or attempt to preserve
the  goodwill of Apex,  and  suppliers,  customers  and others  having  business
relations with Apex;

                  (e) make no such sale or other  disposition of any asset owned
or used by Apex in its business  (whether or not capitalized or expensed for tax
or financial reporting purposes),  except (i) sales or other dispositions in the
ordinary course of business in an amount not to exceed $3,000; and (ii) sales or
other dispositions  pursuant to commitments existing on the date hereof that are
identified on Schedule 4.2(e) hereto;
<PAGE>

                  (f) not enter into, amend,  rescind or terminate any Contract,
arrangement or commitment except contracts,  arrangements or commitments made in
the ordinary course of its business consistent with its past practices;

                  (g) except as set forth on Schedule 4.2(g),  not declare,  set
aside or make  any  dividend,  distribution,  loan or other  advance  to  either
Shareholder or any other person;

                  (h) not amend its  Articles of  Incorporation  or Bylaws,  nor
issue any additional shares of capital stock, or any options,  warrants or other
securities  under  which any  additional  shares of its  capital  stock might be
directly or indirectly authorized or issued;

                  (i) not fail to comply in any material  respect with the laws,
regulations, ordinances or governmental actions or orders applicable to Apex;
         
                  (j) not enter into or materially modify or alter any  Employee
          Plan or Benefit Arrangement;

                 (k) not make any material tax elections or settle or compromise
          any material tax liability;

                 (l) not take any action that  would  prevent  the  Merger  from
          qualifying  (i) as a  reorganization  within  the  meaning  of Section
          368(a)  of the  Code or (ii)  for  "pooling  of  interest"  accounting
          treatment  under  Opinion 16 of the  Accounting  Principles  Board and
          applicable SEC rules and regulations,  and Apex and Shareholders  will
          use all reasonable efforts to achieve both such qualifications;

               (m) not take any action that would  materially  adversely  affect
          the ability of Apex or  Shareholders  to obtain the consents  required
          for Apex and Shareholders to consummate the transactions  contemplated
          hereby  or  materially   adversely  affect  the  ability  of  Apex  or
          Shareholders  to perform their  respective  covenants  and  agreements
          under this Agreement;

               (n) not change its method of accounting in effect April 30, 1997;
          and

               (o) not change its method of reporting  income and deductions for
          federal or state income taxes in effect April 30, 1997.

Notwithstanding the foregoing, Apex may, prior to Closing, distribute any or all
of the  property  set forth in  Schedule  4.2(g) to either or both  Shareholders
provided  that (i) Apex is released in writing from any  liability in connection
with  mortgages,  liens or  encumbrances  on such property and such liability is
assumed  by  Shareholders  and  (ii)  prior to any  such  distribution(s),  Apex
provides Fairfield with a written opinion of Apex's certified public accountants
that  such  distribution(s)  will  not  (x)  violate  the  requirements  for the
transactions  contemplated  under this  Agreement to be accounted  for under the
"pooling-of-interest"  method of  accounting  or (y)  prevent  the  Merger  from
qualifying as a reorganization within the meaning of Section 368(a) of the Code.
Apex and  Shareholders  represent  and warrant  that the  property  set forth in
Schedule 4.2(g) has an aggregate fair market value of not more than $300,000 and
is not integral or essential to the business of Apex.
<PAGE>

         IV.3 Cooperation  Between the  Parties.  During the period from the
date hereof  through the Closing,  Apex shall cause the  employees and agents of
Apex to cooperate with Fairfield and its agents for the purpose of effecting the
transactions  contemplated  by this  Agreement,  including  without  limitation,
providing all  information  and  materials  pertaining to Apex and access to all
premises of Apex reasonably requested by Fairfield or its agents.

         IV.4 Covenants of Fairfield.  Except for transactions  specifically
permitted  by this  Agreement  or  consented  in writing  by Apex,  prior to the
Effective Time,  Fairfield  shall (i) not take any action that would  materially
adversely  affect the ability of Fairfield  to obtain the consents  required for
Fairfield to  consummate  the  transactions  contemplated  hereby or  materially
adversely  affect  the  ability  of  Fairfield  to  perform  its  covenants  and
agreements  under this  Agreement or (ii) not take any action that would prevent
the Merger from qualifying (A) as a reorganization within the meaning of Section
368(a) of the Code or (B) for "pooling of interest"  accounting  treatment under
Opinion  16 of the  Accounting  Principles  Board and  applicable  SEC rules and
regulations,  and Fairfield will use all reasonable efforts to achieve both such
qualifications.

         IV.5 Adverse Changes in Condition. Each party hereto agrees to give
written notice promptly to the other party upon becoming aware of the occurrence
or impending  occurrence of any event or  circumstance  relating to it or any of
its Subsidiaries which (i) is reasonably likely to have,  individually or in the
aggregate,  a material  adverse effect on it or (ii) would cause or constitute a
material breach of any of its representations, warranties or covenants contained
herein,  and to use its reasonable  efforts to prevent or promptly to remedy the
same.


                                    ARTICLE V
                              ADDITIONAL AGREEMENTS

         V.1 Confidentiality.  The  terms  of this  Agreement  and  related
agreements,   the  terms  of  all  transactions  contemplated  hereby,  and  all
confidential and proprietary information furnished to any party pursuant to this
Agreement,  or  in  connection  with  the  transactions   contemplated  by  this
Agreement,  shall be treated as confidential,  and none of the parties shall use
or disclose such  information  except with consent of the other parties  hereto;
provided,  however,  Fairfield may disclose such  information to comply with any
legal requirement.

         V.2 Indemnification of Shareholders. Fairfield agrees to indemnify
and hold each of  Shareholders  harmless from and against all expenses,  losses,
costs,  deficiencies,  liabilities and damages  (including,  without limitation,
reasonable  attorneys'  fees and expenses)  incurred or suffered by Shareholders
(collectively,  "Shareholder  Indemnifiable Damages") from or arising out of (a)
any breach of a  representation  or warranty made by Fairfield in or pursuant to
this Agreement,  (b) any breach of the covenants or agreements made by Fairfield
in this  Agreement,  or (c)  any  inaccuracy  in any  certificate  delivered  by
Fairfield pursuant to this Agreement. Notwithstanding the foregoing, the maximum
amount for which Fairfield may be liable for indemnification hereunder shall not
exceed 10% of the value of the  Exchanged  Shares based on the Closing Price Per
Share.
<PAGE>

         V.3 Indemnification of Fairfield.

         (a) Indemnity.  Shareholders, severally (each in proportion to his
Apex Stock Percentage),  and not jointly,  agree to indemnify and hold Fairfield
harmless from and against all expenses, losses, costs, deficiencies, liabilities
and damages  (including,  without  limitation,  reasonable  attorneys'  fees and
expenses)  incurred  or  suffered  by  Fairfield,  Merger Sub or any  Subsidiary
(including  without  limitation  Apex) of  Fairfield  (collectively,  "Fairfield
Indemnifiable  Damages")  resulting  from or arising  out of (a) any breach of a
representation or warranty made by either Shareholder or both of them or Apex in
or pursuant to this  Agreement,  (b) any breach of the  covenants or  agreements
made by either Shareholder or both of them or Apex in this Agreement, or (c) any
inaccuracy in any certificate delivered by either Shareholder or both of them or
Apex pursuant to this Agreement.  If the Closing occurs,  the maximum amount for
which Shareholders may be liable for indemnification  hereunder shall not exceed
the aggregate amount of the value of the Holdback Shares at the Closing Date and
the maximum amount payable by each Shareholder shall not exceed the value of the
Holdback Shares deposited by that Shareholder.

         (b) Security  and  Procedures.  As security  for the  agreement by
Shareholders  to indemnify and hold  Fairfield  harmless as described in Section
5.3(a),  at the  Closing,  Shareholders  shall place in an escrow with an escrow
agent  designated  by  Fairfield  (the  "Escrow  Agent")  pursuant to the Escrow
Agreement, certificates representing the Holdback Shares issued pursuant to this
Agreement.  Further,  there shall also be deposited  with the Escrow Agent,  all
shares of Fairfield Common Stock issued to Shareholders as a result of any stock
split,  dividend or  reclassification  with respect to the Holdback Shares.  Any
shares of  Fairfield  Common  Stock  that are  applied by  Fairfield  to satisfy
indemnification claims hereunder shall be valued for this purpose at the Closing
Price Per Share  (subject to  appropriate  adjustment  in the event of any stock
split, dividend or reclassification).  All Holdback Shares shall be deemed to be
beneficially  owned by Shareholders,  and Shareholders shall be entitled to vote
the  Holdback  Shares,  and  subject  to the terms of the Escrow  Agreement,  to
receive promptly as paid by Fairfield all cash dividends or  distributions  paid
thereon in respect  thereof  until any such  shares are  actually  delivered  to
Fairfield as provided in the Escrow Agreement.  The procedures to be followed in
applying the Holdback Shares to satisfy Fairfield  Indemnifiable Claims shall be
as follows:

                  (i) Fairfield shall give written notice (the "Fairfield  Claim
         Notice") to Shareholders that Fairfield  believes that it has the right
         to  apply  the  Holdback  Shares  to  satisfy  a  claim  for  Fairfield
         Indemnifiable  Damages. The Fairfield Claim Notice shall include all of
         the information required by the Escrow Agreement.

                  (ii)  Shareholders   shall  have  the  right  to  contest  the
         Fairfield  Claim  Notice by written  notice (the  "Contest  Notice") to
         Fairfield given within the 45-day period (the "Notice Contest  Period")
         following the receipt by Shareholders of the Fairfield Claim Notice.
<PAGE>

                  (iii) If  Shareholders  contest the  Fairfield  Claim  Notice,
         Shareholders  and Fairfield  shall attempt in good faith to resolve any
         disputed  matter  within the 45-day  period  following  the date of the
         delivery of the Contest Notice to Fairfield (the "Resolution  Period").
         If  Shareholders  and Fairfield are unable to resolve the matter,  then
         the  parties  shall  settle  the  dispute  through  final  and  binding
         arbitration  in  Little  Rock,  Arkansas.   The  arbitration  shall  be
         conducted  by a  committee  of  three  arbitrators  (one  appointed  by
         Shareholders,  one  appointed by Fairfield and one appointed by the two
         arbitrators  so  appointed),  all of which  appointments  shall be made
         within thirty (30) days after the expiration of the Resolution  Period.
         If Shareholders do not appoint an arbitrator  within such period,  then
         the arbitrator  appointed by Fairfield shall arbitrate the dispute.  If
         Fairfield  does not  appoint an  arbitrator  within such  period,  then
         Fairfield shall be deemed to have  irrevocably  withdrawn its claim for
         indemnification  with respect to the matter  covered by the  applicable
         Fairfield Claim Notice. The arbitrators shall abide by the rules of the
         American  Arbitration  Association  and  their  decision  shall be made
         within 45 days following their appointment,  and the Escrow Agent shall
         act accordingly, as provided in the Escrow Agreement, and such decision
         shall be final  and  binding  on all  parties  and  enforceable  by the
         parties as a final judgment.

                  (iv)  Notwithstanding the foregoing provisions of this Section
         5.3(b), in the event that the Fairfield  Indemnifiable  Claim for which
         Fairfield  is seeking to apply the Holdback  Shares  relates to a claim
         for liquidated damages by a third-party  against Fairfield,  Merger Sub
         or any  Subsidiary of Fairfield  covered under this Section 5.3,  which
         has not been  satisfied or  discharged by  Shareholders,  Fairfield may
         cause the  Holdback  Shares to be released to it to satisfy  such claim
         upon written notice to the Shareholders,  provided that Fairfield shall
         thereafter apply the value of the Holdback Shares to satisfy the claim.

         (c) Application  of  Holdback  Shares.  If  Fairfield  applies any
Holdback Shares against Fairfield  Indemnifiable Damages, such application shall
be effected against Shareholders'  Holdback Shares in accordance with their Apex
Common Stock Percentages.

         (d) Beneficial  Ownership.  All Holdback Shares shall be deemed to
be owned by Shareholders, and Shareholders shall be entitled to vote such shares
and to receive promptly as paid by Fairfield all dividends or distributions paid
thereon or issued in respect thereof until any such shares are actually redeemed
by  Fairfield as provided in the Escrow  Agreement.  Further,  Shareholders  may
require  that  all or any  portion  of the  Holdback  Shares  be sold in  market
transactions  at any time  (provided that such sales shall be made in compliance
with state and  federal  securities  laws,  are made on a pro rata  basis  among
Shareholders  and not in violation of the  provisions  of this  Agreement),  and
Fairfield  shall  reasonably  act to cause the  Escrow  Agent to sell the shares
requested and deposit the net sales  proceeds into an escrow account which shall
be an interest bearing account  (invested as directed by Shareholders)  with the
interest payable to Shareholders as provided in the Escrow Agreement.
<PAGE>

         (e) Release  of  Holdback  Shares.  If no claim by  Fairfield  for
indemnification is outstanding on the one-year  anniversary of the Closing,  all
Holdback  Shares shall be released by the Escrow Agent as provided in the Escrow
Agreement.  In other  circumstances,  the  release of Holdback  Shares  shall be
determined in accordance with the terms of the Escrow Agreement.

         (f) Counsel;  Cooperation.  Fairfield  shall defend each Fairfield
Indemnifiable  Claim and shall retain legal counsel to assist it in such defense
("Counsel") who shall be reasonably satisfactory to the Shareholders.  Fairfield
shall have sole  authority to instruct  Counsel  with  respect to the  Fairfield
Indemnifiable  Claims and Counsel shall be entitled to rely on such instructions
without  verification or confirmation  from any other person or entity.  Each of
the  Shareholders  shall  cooperate  with and assist  Fairfield  and  Counsel in
Fairfield's defense of the Fairfield Indemnifiable Claims and prosecution of any
claims.

         V.4 Exclusivity  Of Indemnification For Contractual  Breaches.  No
party hereto is making any representation, warranty or covenant other than those
contained herein. Anything herein to the contrary notwithstanding, following the
Closing, the rights of the parties under the provisions of Sections 5.2, 5.3 and
5.5 shall be the sole and exclusive remedy available to the parties with respect
to  claims  or  damages  arising  out of  breaches  of the  representations  and
warranties  or other  contractual  obligations  of the parties set forth in this
Agreement.

         V.5 Arbitration.  The parties agree that the arbitrators appointed
to serve in the arbitration  proceeding  described in Section  5.3(b)(iii) shall
have the authority to consider all qualifying claims for Fairfield Indemnifiable
Damages ("Qualifying Claims") asserted by the parties under this Agreement.  All
awards  of the  arbitrators  shall be  final  and  binding  on all  parties  and
enforceable by the parties as a final judgment. In addition to the resolution of
Qualifying Claims under Section 5.3(b)(iii),  the parties agree to resolve other
claims for  indemnification  arising  under  this  Agreement  through  final and
binding  arbitration  in Little Rock,  Arkansas.  The  arbitration in such other
cases shall be arbitrated by a committee of three  arbitrators (one appointed by
Shareholders,   one  appointed  by  Fairfield  and  one  appointed  by  the  two
arbitrators so appointed), all of which appointments shall be made within thirty
(30) days  after  notice  has been  given by  Fairfield  to  Shareholders  or by
Shareholders  to Fairfield  that such party or parties desire to resolve a claim
for  indemnification  arising under this  Agreement  pursuant to an  arbitration
proceeding.  If  Shareholders  do not appoint an arbitrator  within such period,
then the  arbitrator  appointed by Fairfield  shall  arbitrate  the dispute.  If
Fairfield does not appoint an arbitrator within such period, then the arbitrator
appointed by  Shareholders  shall arbitrate the dispute.  The arbitrators  shall
abide by the rules of the American  Arbitration  Association  and their decision
shall be made within 45 days  following  their  appointment,  and such  decision
shall be final and binding on all parties  and  enforceable  by the parties as a
final judgment. The costs of any such arbitration and reasonable attorneys' fees
incurred in any such proceeding shall be paid by the  non-prevailing  party, and
the arbitrators shall have the right, in their discretion, to increase the award
made to the prevailing party by any or all of such costs.
<PAGE>

         V.6  Reasonable  Efforts.  Upon the terms and subject to the conditions
set forth in this Agreement, each of the parties will use all reasonable efforts
to take, or cause to be taken, all actions,  and to do, or cause to be done, and
to assist  and  cooperate  with the other  parties  in doing,  all other  things
necessary,  proper or advisable to consummate  and make  effective,  in the most
expeditious   manner   practicable,   the  Merger  and  the  other  transactions
contemplated  by this  Agreement,  including  (i)  the  obtaining  of all  other
necessary   actions  or  nonactions,   waivers,   consents  and  approvals  from
Governmental Entities and the making of all necessary  registrations and filings
(including  filings with  Governmental  Entities,  if any) and the taking of all
other reasonable steps as may be necessary to obtain an approval in waiver form,
or to avoid  an  action  or  proceeding  by any  Governmental  Entity,  (ii) the
obtaining of all necessary  consents,  approvals or waivers from third  parties,
(iii) the defending of any lawsuits or other legal proceedings, whether judicial
or  administrative,  challenging  this  Agreement  or  the  consummation  of the
transactions contemplated by this Agreement,  including seeking to have any stay
or temporary restraining order entered by any court or other Governmental Entity
vacated or  reversed  and (iv) the  execution  and  delivery  of any  additional
instruments  necessary to consummate the  transactions  contemplated  by, and to
fully carry out the purposes of, this Agreement.  In connection with and without
limiting  the  foregoing,  the parties and their  respective  Board of Directors
shall,  if any state  takeover  statute or similar  statute or  regulation is or
becomes  applicable  to the Merger,  this  Agreement  or the other  transactions
contemplated  by this Agreement,  use all reasonable  efforts to ensure that the
Merger  and  the  other  transactions  contemplated  by  this  Agreement  may be
consummated  as  promptly  as  practicable  on the  terms  contemplated  by this
Agreement  and otherwise to minimize the effect of such statute or regulation on
the Merger and the other transactions contemplated by this Agreement. In further
connection with and without limiting the foregoing,  Apex and Shareholders shall
make  employees,  contractors  and advisors of Apex  available to Fairfield  and
provide such  information  as may be requested by Fairfield  for the purposes of
conducting the Inspection set forth in Section 6.3(d).

         V.7 Expenses  and Fees.  Regardless of whether the Closing  occurs
and notwithstanding  any termination of this Agreement,  Fairfield shall pay all
of the costs and  expenses  incurred by Fairfield  and Merger Sub in  connection
with this Agreement or in consummating  the Merger  (including,  but not limited
to,  disbursements and expenses of their respective  attorneys,  accountants and
advisers) and Apex shall pay all of the  reasonable  costs and expenses up to an
aggregate of $40,000  incurred by Shareholders  and Apex in connection with this
Agreement  or in  consummating  the  Merger  (including,  but  not  limited  to,
disbursements  and  expenses  of their  respective  attorneys,  accountants  and
advisers) and any such costs and expenses of Shareholders  and/or Apex exceeding
an aggregate of $40,000 shall be paid by Shareholders.

         V.8 Consents.  Apex shall use its reasonable efforts to obtain the Apex
Consents (as hereinafter defined) before Closing.

         V.9 Pooling of Interests.  Each of the parties to this Agreement agrees
to use its  reasonable  efforts to qualify the Merger for  pooling of  interests
treatment under Opinion 16 of the Accounting Principles Board and applicable SEC
rules and regulations,  and such accounting  treatment to be accepted by each of
Fairfield's and Apex's independent auditors, respectively, and each of Fairfield
and Apex  agrees that it will  voluntarily  take no action that would cause such
accounting treatment not to be obtained.
<PAGE>

         V.10  Transfer Restrictions.

         (a) Rule 145 Affiliates. Each Shareholder acknowledges that he may
be  deemed an  "affiliate"  of Apex  within  the  meaning  of Rule 145 under the
Securities Act or for purposes of qualifying the Merger for pooling of interests
accounting  treatment  under Opinion 16 of the Accounting  Principles  Board and
applicable SEC rules and regulations  (in either case, a "Rule 145  Affiliate"),
although  nothing  contained in this Agreement  should be construed as admission
that the Shareholder is a Rule 145 Affiliate.

         (b) Restrictions  on  Sale.  Each  Shareholder  represents  to and
covenants with  Fairfield  that he will not sell,  assign or transfer any of the
shares of Fairfield  Common Stock received by him in connection  with the Merger
except (i) pursuant to an effective  registration statement under the Securities
Act, (ii) in  conformity  with the volume and other  limitations  of Rule 145 or
(iii) in a transaction which, in the opinion of the general counsel of Fairfield
or other  counsel  reasonably  satisfactory  to  Fairfield  or as described in a
"no-action" or interpretive letter from the Staff of the SEC specifically issued
with  respect to a  transaction  to be engaged  in by that  Shareholder,  is not
required to be registered under the Securities Act; provided,  however,  that in
any such case, such sale,  assignment or transfer shall be permitted only if, in
the opinion of counsel to Fairfield,  such transaction would not have,  directly
or  indirectly,  any adverse  consequences  for  Fairfield  with  respect to the
treatment of the Merger for tax purposes.

         (c) Results  of Operations  Published.  Each  Shareholder  further
represents to and covenants with  Fairfield  that he has not,  within 30 days of
the date of this  Agreement,  sold,  transferred  or  otherwise  disposed of any
shares of Apex Common  Stock and that he will not sell,  transfer  or  otherwise
dispose of any shares of Fairfield  Common Stock  received by him in  connection
with the Merger  until  after such time as results  covering at least 30 days of
combined  operations of Fairfield and Apex have been published by Fairfield,  in
the form of a quarterly  earnings report,  an effective  registration  statement
filed with the SEC, a report  filed with the SEC on Form 10-K,  10-Q or 8-K,  or
any other public filing or announcement  with includes such combined  results of
operations.

         (d) Evidence  of  Compliance.  In the  event  of a sale  or  other
disposition  by a Shareholder  of shares of Fairfield  Common Stock  pursuant to
Rule 145, the Shareholder will supply Fairfield with evidence of compliance with
such  Rule,  in the form of a letter  in the form of  Exhibit  C hereto  and the
opinion of counsel or  no-action  letter  referred  to above.  Each  Shareholder
acknowledges  that  Fairfield  may instruct  its transfer  agent to withhold the
transfer of any shares of Fairfield Common Stock disposed of by the Shareholder,
but that  (provided  such transfer is not  prohibited by any other  provision of
this  Agreement)  upon receipt of such evidence of compliance,  Fairfield  shall
cause the transfer  agent to effectuate  the transfer of the shares of Fairfield
Common Stock sold as indicated in such letter.
<PAGE>

         (e) Covenant  of Fairfield.  Fairfield covenants that it will take
all such  actions  as may be  reasonably  available  to it to permit the sale or
other  disposition of shares of Fairfield Common Stock by the Shareholder  under
Rule 145 in accordance with the terms thereof.

         (f) Legend.  A legend in substantially  the following form will be
placed upon the  certificates  representing  shares of  Fairfield  Common  Stock
issued to the  Shareholders  pursuant  to the  Merger,  which  legends  shall be
removed by delivery of  substitute  certificates  upon  receipt of an opinion in
form and substance reasonably  satisfactory to Fairfield to the effect that such
legends are no longer required for the purposes of the Securities Act:
                  "The  shares  represented  by  this  certificate  were  issued
         pursuant to a business  combination  which is being  accounted for as a
         pooling of interests,  in a transaction  to which Rule 145  promulgated
         under the  Securities  Act of 1933  applies.  The shares  have not been
         acquired  by the  holder  with a view to, or for  resale in  connection
         with, any distribution thereof within the meaning of the Securities Act
         of 1933. The shares may not be sold,  pledged or otherwise  transferred
         (i) until such time as Fairfield shall have published financial results
         covering at least 30 days of combined  operations  after the  effective
         time of the business  combination and (ii) except in accordance with an
         exemption from the  registration  requirements of the Securities Act of
         1933 or  pursuant to an  effective  registration  statement  under that
         act."

         V.11 Tax  Treatment.  Each of Fairfield  and Apex shall use  reasonable
efforts to cause the Merger to qualify as a reorganization  under the provisions
of Section 368(a) of the Code.

         V.12  Non-Competition and Non-Solicitation Covenants.

         (a) Condition  to Closing.  The parties recognize that Fairfield's
willingness to proceed with the transactions  contemplated  under this Agreement
is conditioned upon each Shareholder's  agreement that he will not engage in any
businesses  in  competition  with the business to be conducted by Apex after the
Closing or solicit any  employees  of Fairfield  or any of its  subsidiaries  or
affiliated entities all as set forth in this Section 5.12.

         (b) Non-Competition.   Each   Shareholder   shall  not  until  the
expiration  of a  period  of 3  years  from  the  Effective  Time,  directly  or
indirectly,  engage  in  or  have  any  interest  in  any  sole  proprietorship,
partnership,  corporation,  limited  liability  company,  firm,  association  or
business  or any other  person  or  entity  (whether  as an  employee,  officer,
director,  partner,  member,  agent,  security holder,  creditor,  consultant or
otherwise) that, directly or indirectly engages in sales of leads for marketing,
or sales of vacation packages relating to or associated with, vacation ownership
products  (the  "Business")  in the District of Columbia and States of Arkansas,
Arizona, Colorado, Florida, Georgia, Illinois, Maryland, Michigan, Missouri, New
Jersey, North Carolina, South Carolina, Tennessee, Texas and Virginia.

         (c) Non-Solicitation.  Each Shareholder shall not, for a period of
one year from the Effective Time, directly or indirectly, for himself or for any
sole proprietorship,  partnership, corporation, limited liability company, firm,
association  or  business  or any other  person or entity,  employ or attempt to
employ,  or enter into any  contractual  arrangement  with any  employee or sale
agent or  former  employee  or former  sales  agent of  Fairfield  or any of its
subsidiaries or affiliated entities  (collectively,  "Fairfield  Subsidiaries"),
unless such person has not been  employed or  otherwise  engaged by Fairfield or
any Fairfield Subsidiary for a period in excess of six months.
<PAGE>

         (d) Reasonableness.  Shareholders  agree and acknowledge that Apex
is currently  and has been engaged in the Business and in the  geographic  areas
described in Section 5.12(b) and that the restrictions set forth in this Section
5.12 are reasonable.

         V.13  Payment  of Bonus.  Fairfield  agrees that if prior to Closing
Apex pays less than the entire amount of the bonus payment or payments described
on Schedule 4.2(b), Fairfield shall cause Apex to pay any unpaid portion of such
bonus payment or payments on or prior to May 1, 1998.

         V.14 Registration Rights.

         (a) Registration.  Fairfield shall use its reasonable best efforts
to file as promptly as practicable  after the Effective  Time, but no later than
the close of  business  on the tenth  day  following  the  Effective  Time,  the
registration  on Form S-3 and/or  qualification  with,  or the  approval of, any
Governmental  Entity under any federal or state securities laws of the Exchanged
Shares issued as consideration hereunder.  Fairfield may, upon written notice to
Shareholders,  defer such registration for a reasonable period but not in excess
of 90 days if it has  made a good  faith  determination  that  the  filing  of a
registration  statement at such time would  require the  disclosure  of material
information  which Fairfield has a bona fide business interest for preserving as
confidential  or that Fairfield is unable to comply with Securities and Exchange
Commission  requirements.  Fairfield  shall be under no  obligation to effect an
underwritten offering of the Exchanged Shares.

         (b) Effectiveness. Fairfield shall use its reasonable best efforts
to keep  effective  and maintain any  registration,  qualification,  approval or
listing of the Exchanged Shares required pursuant to this Section 5.14, and from
time to time to amend or supplement the prospectus used in connection  therewith
to the extent  necessary  in order to comply with  applicable  federal and state
securities  laws,  until the  earlier of the date on which all of the  Exchanged
Shares covered by the  registration  statement have been sold by Shareholders or
the  first  anniversary  of the  Effective  Time.  Fairfield  shall  furnish  to
Shareholders  such number of copies of such prospectus,  as amended from time to
time, and supplements thereto, as Shareholders may reasonable request.

         (c) Expenses.   All  expenses   incident  to  the  obligations  of
Fairfield  under  Sections  5.14(a)  and  5.14(b)  hereof   (including   without
limitation,  registration fees, printing or document reproduction  expenses, and
fees and expenses of its counsel and  accountants)  shall be born by  Fairfield,
and all the other expenses  incident to the  disposition by a Shareholder of the
Exchanged  Shares  (including,  without  limitation,  fees and  expenses  of his
counsel  and all  underwriting  discounts,  if any,  brokerage  commissions  and
similar fees) shall be born by such Shareholder.
<PAGE>

         (d) Shareholder  Agreements. Each Shareholder shall (i) furnish to
Fairfield such information as Fairfield may from time to time reasonably request
in connection with the registration  statement and prospectus,  any amendment or
supplement thereto or any other filings required by this Section 5.14, (ii) from
and after the Effective Time and for so long as the registration, qualification,
approval  or listing  remains  effective,  promptly  after the sale or any other
disposition by him of Exchanged  Shares,  give Fairfield written notice of same,
(iii) promptly notify  Fairfield of any event which comes to his attention which
would  necessitate  an amendment or  supplement to the  registration  statement,
prospectus or any of the other filings  required by this Section 5.14,  and (iv)
suspend sales of Exchanged  Shares under such  registration  statement  promptly
upon receipt of notice from Fairfield that such sales may not be made until such
registration statement and prospectus are amended or supplemented as necessary.

         (e) Indemnification   of   Shareholders.   Fairfield   agrees   to
indemnify,  to the  extent  permitted  by law,  each  Shareholder  and  hold him
harmless  all times  after the date of this  Agreement  from and  against and in
respect of any and all liabilities,  losses, damages, settlements, claims, costs
or expenses, including, without limitation,  attorneys' fees (collectively,  the
"Liabilities"),  under the Securities Act, common law or otherwise,  arising out
of or due to (i) any untrue  statement or alleged untrue statement of a material
fact  contained  in any  registration  statement or  prospectus  relating to the
registration or qualification of the Exchanged  Shares,  or (ii) any omission or
alleged  omission  to state  in such  registration  statement  or  prospectus  a
material fact required to be stated  therein or necessary to make the statements
therein  in  light  of  the  circumstances  under  which  they  were  made,  not
misleading,  except insofar as such  Liabilities  arise out of or are due to any
untrue statement of a material fact contained in, or omission of a material fact
from,  information  furnished  in  writing  to  Fairfield  by  such  Shareholder
expressly for use in such registration statement or prospectus.

         (f) Indemnification  of  Fairfield.  Each  Shareholder  agrees  to
indemnify, to the extent permitted by law, Fairfield, its directors and officers
and each person, if any, who controls Fairfield within the meaning of Section 15
of the Securities Act and hold them harmless at all times after the date of this
Agreement from and against and in respect of any and all Liabilities arising out
of or due to (i) any untrue  statement or alleged untrue statement of a material
fact  contained  in any  registration  statement or  prospectus  relating to the
registration or qualification of the Exchanged  Shares,  or (ii) any omission or
alleged  omission  to state  in such  registration  statement  or  prospectus  a
material fact required to be stated  therein or necessary to make the statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading, but only to the extent that such Liabilities arise out of or are due
to any untrue statement of material fact contained in, or omission of a material
fact  from,  information  furnished  in  writing  to  Fairfield  by  Shareholder
expressly for use in such registration statement or prospectus.

         (g) Contribution.  In order  to  provide  for  just and  equitable
contribution in circumstances in which the indemnity  agreement  provided for in
this Section 5.14 is for any reason held to be unenforceable although applicable
in accordance with its terms,  Fairfield and Shareholders will contribute to the
aggregate  losses,  liabilities,  claims,  damages  and  expenses  of the nature
contemplated by such indemnity agreement incurred by Fairfield and Shareholders,
in such  proportion as is appropriate to reflect the relative fault of Fairfield
on the one  hand and each  Shareholder  on the  other,  in  connection  with the
<PAGE>

statements  or  omissions  which  resulted  in  such  losses,  claims,  damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative  fault of the  indemnifying  party and  indemnified  party shall be
determined by reference to, among other things,  whether the action in question,
including any untrue or alleged untrue  statement of a material fact or omission
or alleged  omission to state a material  fact,  has been made by, or relates to
information  supplied by, the indemnifying  party or the indemnified  party, and
the parties' relative intent,  knowledge,  access to information and opportunity
to correct or prevent such action. The parties hereto agree that it would not be
just or  equitable  if  contribution  pursuant  to  this  Section  5.14(g)  were
determined by pro rata  allocation  or by any other method of  allocation  which
does  not  take  account  of the  equitable  considerations  referred  to in the
immediately preceding paragraph.

         Notwithstanding   the   foregoing,   no  person  guilty  of  fraudulent
misrepresentation  (within the meaning of Section 11(f) of the  Securities  Act)
will be  entitled  to  contribution  from any  person who was not guilty of such
fraudulent  misrepresentation.  For  purposes  of  this  Section  5.14(g),  each
director of  Fairfield,  each  officer of  Fairfield  who signed the  applicable
registration  statement and each person,  if any, who controls  Fairfield within
the  meaning of Section 15 of the  Securities  Act will have the same  rights to
contribution as Fairfield.

         (h) No Other  Obligation  to Register.  Except as  otherwise  expressly
provided in this Section 5.14, Fairfield will have no obligation to register the
Exchanged Shares under the Securities Act.

         V.15 Exchange  Listing.  Fairfield shall use its reasonable  efforts to
list as soon as  practicable  after the  Effective  Time,  on the New York Stock
Exchange ("NYSE"),  subject to official notice of issuance, the Exchanged Shares
and Fairfield shall give all notices and make all filings with the NYSE required
in connection with the transactions contemplated herein.

         V.16  Schedules.  Except for Schedule  3.1(g),  Apex shall  deliver the
Schedules to this  Agreement to Fairfield  within 20 days after the date of this
Agreement.

         V.17 Delivery of  Information.  Two business days before the end of the
Inspection  Period,  Shareholders  shall  deliver  to  Fairfield  a  certificate
executed by each  Shareholder  certifying  that Apex has  delivered all relevant
information,  documents,  agreements, and other materials related to any written
request made by Fairfield during the Inspection Period.


                                   ARTICLE VI
                               CONDITIONS PRECEDENT; CLOSING

     VI.1  Conditions  to each  party's  obligation  to effect the  Merger.  The
respective  obligation  of each  party to effect  the  Merger is  subject to the
satisfaction  or  waiver  on or  prior  to the  Closing  Date  of the  following
conditions:
<PAGE>

         (a) Corporate Approval.  The approval of the transactions  hereunder by
Fairfield's board of directors or appropriate  committee thereof shall have been
received.

         (b) Consent of Fairfield's  Lender.  Fairfield  shall have obtained all
applicable  consents  required under  Fairfield's and its  subsidiaries'  credit
agreements.

         (c) Apex  Consents.  Apex shall have obtained all  applicable  consents
required from the parties identified on Schedule 6.1(c) (the "Apex Consents").

         (d) No Injunctions or Restraints.  No judgment, order, decree, statute,
law, ordinance,  rule, regulation,  temporary restraining order,  preliminary or
permanent injunction or other order enacted, entered,  promulgated,  enforced or
issued by any court of competent  jurisdiction or other  Governmental  Entity or
other legal restraint or prohibition (collectively, "Restraints") preventing the
consummation of the Merger shall be in effect;  provided,  however, that each of
the parties shall have used reasonable  efforts to prevent the entry of any such
Restraints and to appeal as promptly as possible any such Restraints that may be
entered.

         (e) No  Litigation.  There  shall not be  pending  any suit,  action or
proceeding,  in each case  brought  by any  Governmental  Entity  against  Apex,
Fairfield  or Merger  Sub with  respect to or that  would  adversely  affect the
Merger or the transactions contemplated under this Agreement.

          VI.2 Condition to obligation of Apex and Shareholders. The obligations
     of Apex and  Shareholders  to effect the Merger are further  subject to the
     following conditions:

         (a) Actions of Fairfield. Fairfield and Merger Sub shall have performed
and complied with all the covenants,  agreements and  obligations  and satisfied
all of the  conditions  required by this  Agreement  to be performed or complied
with or satisfied by them at or prior to the Effective Time.

         (b) Representations and Warranties.  The representations and warranties
of Fairfield and Merger Sub set forth in this Agreement that are qualified as to
materiality shall be true and correct, and the representations and warranties of
Fairfield and Merger Sub set forth in this  Agreement  that are not so qualified
shall be true and correct in all material respects,  in each case as of the date
of this Agreement and (except to the extent such  representations and warranties
speak as of an earlier date) as of the  Effective  Time as though made on and as
of the Effective Time, except as otherwise contemplated by this Agreement.

         (c) No  Material  Adverse  Change.  At any time on or after the date of
this  Agreement  there shall not have  occurred any material  adverse  change in
Fairfield.

          VI.3  Conditions  to  obligations  of  Fairfield  and Merger Sub.  The
     obligations  of  Fairfield  and Merger Sub to effect the Merger are further
     subject to the following conditions:

         (a) Actions of Shareholders and Apex.  Shareholders and Apex shall have
performed  and complied  with all  covenants,  agreements  and  obligations  and
satisfied  all the  conditions  required by this  Agreement  to be  performed or
complied with or satisfied by them at or prior to the Effective Time.
<PAGE>

         (b) Representations and Warranties.  The representations and warranties
of Apex and  Shareholders  set forth in this  Agreement that are qualified as to
materiality shall be true and correct, and the representations and warranties of
Apex and  Shareholders  set forth in this  Agreement  that are not so  qualified
shall be true and correct in all material respects,  in each case as of the date
of this Agreement and (except to the extent such  representations and warranties
speak as of an earlier date) as of the  Effective  Time as though made on and as
of the Effective Time, except as otherwise contemplated by this Agreement.

         (c) No  Material  Adverse  Change.  At any time on or after the date of
this  Agreement  there shall not have  occurred any material  adverse  change in
Apex.

         (d) Audit and  Inspection.  The  completion by Fairfield of an audit of
the books and records and inspection of the business of Apex (the  "Inspection")
and Fairfield's  satisfaction,  in its sole discretion,  with the results of the
Inspection.  Apex shall  cooperate  fully with  Fairfield  in the conduct of the
Inspection,  including  but not limited to allowing  Fairfield to have access to
the books and records of Apex,  which shall be completed by Fairfield  within 30
calendar days of its receipt of the Schedules to this Agreement (the "Inspection
Period").

         (e) Pooling Letter. Fairfield shall have received a letter from Ernst &
Young LLP dated as of the  Closing  Date,  addressed  to  Fairfield,  stating in
substance  that the Merger will  qualify as a pooling of  interests  transaction
under Opinion 16 of the Accounting Principles Board and applicable SEC rules and
regulations.

         (f) Tax  Certificates.  Fairfield shall have received from Shareholders
and Apex the representation  letters and certificates  substantially in the form
attached hereto as Exhibit D.

         (g) Employment Agreements. As soon as the final terms can be negotiated
after the Closing Date, each Shareholder will enter into an employment agreement
with  Apex upon the terms  and in the  substantial  form set forth in  Exhibit E
hereto (the "Employment Agreements").

         (h) Opinion of Apex Counsel.  Fairfield shall have received a favorable
opinion of counsel  for Apex with  respect to the  matters set forth on Schedule
6.3(h).

     VI.4 Frustration of Closing  Conditions.  Neither Fairfield,  Shareholders,
Merger  Sub nor Apex may  rely on the  failure  of any  condition  set  forth in
Section 6.1, 6.2 or 6.3, as the case may be, to be satisfied if such failure was
caused by such  party's  failure to use  reasonable  efforts to  consummate  the
Merger and the other transactions contemplated by this Agreement, as required by
and subject to Section 5.6.

     VI.5 Closing Documents and Procedures. In addition to the other obligations
and  procedures to be performed at the Closing,  the parties will  undertake the
following actions:
<PAGE>

          (a) Deliveries of  Shareholders.  At the Closing,  Shareholders  shall
     deliver to Fairfield:

                  (i) a certificate executed by each Shareholder certifying that
         the  representations  and  warranties set forth in Sections 3.2 and 3.3
         are true and  correct on and as of the  Effective  Time,  with the same
         force and effect as though such representations and warranties had been
         made  on,  as of and  with  reference  to the  Effective  Time and that
         Shareholders  have  performed  and  complied  with  all  covenants  and
         agreements and satisfied all  conditions  required by this Agreement to
         be performed  or complied  with or satisfied by them for the benefit of
         Fairfield at or prior to the Effective Time;

                  (ii) the Employment  Agreements  set forth in Section  6.3(g),
         each executed by the appropriate Shareholder; and

                  (iii) the Escrow Agreement, executed by Shareholders.

         (b)  Deliveries  of  Apex.  At  the  Closing,  Apex  shall  deliver  to
              Fairfield:

                  (i) a certificate  of an officer of Apex  certifying  that the
         representations  and  warranties  set forth in Section 3.2 are true and
         correct on and as of the Effective Time, with the same force and effect
         as though such  representations  and warranties had been made on, as of
         and with  reference to the  Effective  Time and that Apex has performed
         and complied  with all  covenants  and  agreements  and  satisfied  all
         conditions  required by this Agreement to be performed or complied with
         or  satisfied  by it for the  benefit of  Fairfield  at or prior to the
         Effective Time;

                  (ii)     the Escrow Agreement, executed by Apex;

                  (iii)  the   representation   letters  and   certificates   in
         substantially the form set forth in the form attached hereto as Exhibit
         D, executed by Shareholders and Apex;

                  (iv)  the  consent  of  each of the  lessors  under  the  Real
         Property,  if consent of such  lessor is  required  under the  relevant
         agreements  or  documents,  and  each  of the  other  persons,  if any,
         identified  on  Schedule  6.1(c)  to  the   transactions   contemplated
         hereunder;

          (v) certificates of good standing and corporate existence for Apex;

          (vi) the Employment  Agreements set forth in Section 6.3(g),  executed
               by Apex; and

          (vii) the opinion of counsel to Apex as set forth in Section 6.3(h) .

         (c) Fairfield's Deliveries. At the Closing,  Fairfield shall deliver to
             Apex:

                  (i)      the Exchanged Shares;
<PAGE>

                  (ii)     the Escrow Agreement, executed by Fairfield; and

                  (iii) a certificate of an officer of Fairfield certifying that
         the  representations  and  warranties set forth in Section 3.1 are true
         and correct on and as of the  Effective  Time,  with the same force and
         effect as though such  representations and warranties had been made on,
         as of and with  reference to the Effective  Time and that Fairfield has
         performed and complied with all covenants and  agreements and satisfied
         all  conditions  required by this Agreement to be performed or complied
         with or  satisfied  by it for the  benefit  of Apex at or  prior to the
         Effective Time.


                                   ARTICLE VII
                        TERMINATION, AMENDMENT AND WAIVER

         VII.1  Termination.  This Agreement may be  terminated,  and the Merger
contemplated hereby may be abandoned, at any time prior to the Effective Time:

         (a)      by mutual written consent of Fairfield, Merger Sub and Apex;

         (b)      by either Fairfield or Apex;

                  (i) if the Merger shall not have been consummated on or before
         December 1, 1997,  unless the failure to consummate  the Merger is the
         result of a breach of this  Agreement by the party seeking to terminate
         this  Agreement;  provided,  however,  that the  passage of such period
         shall be tolled for any part  thereof  during  which any party shall be
         subject  to a nonfinal  order,  decree,  ruling or action  restraining,
         enjoining or otherwise  prohibiting  the  consummation of the Merger or
         the calling or holding of the related shareholders meeting; or

                  (ii) if any  Governmental  Entity  of  competent  jurisdiction
         shall have issued a  Restraint  or taken any other  action  permanently
         enjoining,  restraining or otherwise  prohibiting  the Merger or any of
         the other actions  contemplated  under the Agreement and such Restraint
         shall have become final and nonappealable;

         (c) by  Fairfield  if Apex  does  not  deliver  the  Schedules  to this
Agreement pursuant to Section 5.16;

         (d) by  Fairfield,  if on the date that is two business days before the
Closing Date the Closing Price Per Share of Fairfield  Common Stock is less than
$20;

         (e) by  Fairfield,  at or prior  to the  expiration  of the  Inspection
Period,  without cause and for whatever reason and without liability on the part
of any party hereto,  by delivering to Apex at or prior to the expiration of the
Inspection  Period,  written  notice of  Fairfield's  election to terminate this
Agreement;
<PAGE>

         (f) by either  Fairfield  or Apex if the other shall fail to fulfill or
satisfy  any  condition  precedent  to  the  performance  of the  first  party's
obligations in accordance with the terms hereof; and

         (g) by  Apex,  if  prior  to the  close  of  business  on the  20th day
following  the date of this  Agreement,  Apex  delivers  to  Fairfield a copy of
written  notice from legal  counsel or tax  advisors of Apex  advising  that the
Merger  will not qualify as a  reorganization  under the  provisions  of Section
368(a) of the Code.

         VII.2  Effect  of  Termination.  In the  event of  termination  of this
Agreement by Apex or Fairfield as provided in Section 7.1, this Agreement  shall
terminate  and  there  shall  be no  liability  on the  part of  either  Apex or
Fairfield,  except for (a)  liabilities  arising from a breach of this Agreement
prior to such  termination if the  termination is made under Section  7.1(b)(i),
and (b) liabilities arising from a breach of a provision of this Agreement which
is to be performed regardless of any such termination.

         VII.3  Amendment.  This  Agreement  may  not be  amended  except  by an
instrument in writing signed on behalf of each of the parties hereto.

         VII.4 Extension;  Waiver.  At any time prior to the Effective Time, the
parties may (a) extend the time for the performance of any of the obligations or
other  acts  of  the  other  parties,   (b)  waive  any   inaccuracies   in  the
representations  and warranties  contained  herein or in any document  delivered
pursuant  hereto or (c) subject to the proviso of Section 7.3, waive  compliance
with any of the agreements or conditions  contained herein. Any agreement on the
part of a party to any such extension or waiver shall be valid only if set forth
in an instrument in writing  signed on behalf of such party.  The failure of any
party to this  Agreement  to assert any of its rights  under this  Agreement  or
otherwise shall not constitute a waiver of such rights.


                                  ARTICLE VIII
                               GENERAL PROVISIONS

         VIII.1  Survival of  Representations  and  Warranties.  The  respective
covenants,  representations and warranties and the indemnities set forth in this
Agreement  shall survive for a period of one year after the  Effective  Time and
shall  continue  in full force and effect  during such  period.  No claim may be
asserted  against any party hereto and no party hereto shall have any  liability
to the other party  hereto,  with respect to any  inaccuracy in or any breach of
any representation or warranty after the survival period, except that if a claim
shall be first  asserted  within the  applicable  period,  such claim  shall not
thereafter  be barred.  Notwithstanding  any  knowledge of facts  determined  or
determinable by any party by  investigation,  each party shall have the right to
fully rely on the representations,  warranties,  covenants and agreements of the
other parties  contained in this  Agreement or in any other  documents or papers
delivered in connection herewith.  Each representation,  warranty,  covenant and
agreement of the parties  contained in this  Agreement  is  independent  of each
other representation, warranty, covenant and agreement.
<PAGE>

         VIII.2  Notices.  All  notices,  requests,  claims,  demands  and other
communications  hereunder  shall be in  writing  and  shall be  deemed  given if
delivered  personally or sent by overnight courier (providing proof of delivery)
to the parties at the following  addresses (or at such other address for a party
as shall be specified by like notice):

                  (a)      if to Apex:

                           Apex Marketing, Inc.
                           3600 Cantrell Road
                           Little Rock, AR 72202
                           Attention:  President


                           with a copy to:

                           Garland Binns, Esq.
                           Horne, Hollingsworth & Parker
                           401 W. Capitol Ave., Suite 501
                           Little Rock, Arkansas  72201

                  (b)      if to Shareholders:

                           Carl Flemister
                           2920 Justin Matthews Drive
                           North Little Rock, AR 72116

                           C. Wendell Flemister, Jr.
                           27 Nimrod
                           Maumelle, AR 72113
<PAGE>

                           with a copy to:

                           Garland Binns, Esq.
                           Horne, Hollingsworth & Parker
                           401 W. Capitol Ave., Suite 501
                           Little Rock, Arkansas  72201

                  (c)      if to Fairfield or Merger Sub:

                           Fairfield Communities, Inc.
                           11001 Executive Center Drive
                           Little Rock, Arkansas  72211
                           Attention:  Mr. John W. McConnell

                           with a copy to:

                           Jones, Day, Reavis & Pogue
                           2001 Ross Avenue, Suite 2300
                           Dallas, Texas  75201
                           Attention:  Mark V. Minton, Esq.

         VIII.3  Definitions.  For purposes of this Agreement:

         (a) an  "affiliate" of any person means another person that directly or
indirectly,  through one or more intermediaries,  controls, is controlled by, or
is under common control with, such first person;

         (b) "Code" means the Internal Revenue Code of 1986, as amended, and all
regulations promulgated thereunder, as in effect from time to time;

         (c) an "environmental  law" means any law, statute,  regulation,  rule,
order, decree,  judgment,  consent decree,  settlement agreement or governmental
requirement,  which  relates to or otherwise  imposes  liability or standards of
conduct concerning mining or reclamation of mined land,  discharges,  emissions,
releases or threatened releases of noises, odors or any pollutants, contaminants
or hazardous or toxic  wastes,  substances  or  materials,  whether as matter or
energy,  into  ambient  air,  water,  or  land,  or  otherwise  relating  to the
manufacture,  processing,  generation,  distribution,  use, treatment,  storage,
disposal,  cleanup,  transport  or  handling  of  pollutants,  contaminants,  or
hazardous  wastes,  substances or materials,  including (but not limited to) the
Comprehensive  Environmental  Response,  Compensation and Liability Act of 1980,
the  Superfund  Amendments  and  Reauthorization  Act of 1986,  as amended,  the
Resource Conservation and Recovery Act of 1976, as amended, the Toxic Substances
Control  Act of 1976,  as  amended,  the  Federal  Water  Pollution  Control Act
Amendments  of 1972,  the Clean  Water Act of 1977,  as amended,  any  so-called
"Superlien" law, and any other similar Federal, state or local statutes;

         (d) "ERISA" means the Employee  Retirement Income Security Act of 1974,
as amended, and all regulations promulgated  thereunder,  as in effect from time
to time;

         (e)  "ERISA  Affiliate"  means any trade or  business,  whether  or not
incorporated,  that is now or has at any  time in the  past  been  treated  as a
single  employer  with  Apex  or  Fairfield  (as  applicable)  or any  of  their
respective  Subsidiaries  under Section 414(b),  (c), (m) or (o) of the Code and
the Treasury Regulations thereunder;

         (f)  "Exchange  Act"  means the  Securities  Exchange  Act of 1934,  as
amended, and all rules and regulations promulgated thereunder, as in effect from
time to time;

         (g) "Governmental  Entity" means any government or any court,  arbitral
tribunal,  administrative  agency or commission or other  governmental  or other
regulatory authority or agency, federal, state, local or foreign;
<PAGE>

         (h) "key  employee"  means  any  employee  whose  current  salary  and
     targeted bonus exceeds $40,000 per annum;

         (i)  "knowledge" of any person means actual  knowledge of the directors
and executive officers of such person;

         (j) "material  adverse change" or "material adverse effect" means, when
used in  connection  with  Apex or  Fairfield,  any  change  or  effect  that is
materially adverse to the business,  properties,  assets,  financial  condition,
prospects,  or results of operations of such party and its Subsidiaries taken as
a whole;

         (k)  "person"  means an  individual,  corporation,  partnership,  joint
venture, association, trust, unincorporated organization or other entity; and

         (l) "Securities Act" means the Securities Act of 1933, as amended,  and
all rules and  regulations  promulgated  thereunder,  as in effect  from time to
time.

         VIII.4 Interpretation.  When a reference is made in this Agreement to a
Section,  Exhibit or Schedule,  such  reference  shall be to a Section of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated.  The table of
contents and headings  contained in this  Agreement are for  reference  purposes
only and  shall not  affect in any way the  meaning  or  interpretation  of this
Agreement.  Whenever the words "include",  "includes" or "including" are used in
this  Agreement,  they  shall be deemed  to be  followed  by the words  "without
limitation".

         VIII.5  Counterparts.  This  Agreement  may be  executed in one or more
counterparts,  all of which shall be considered  one and the same  agreement and
shall become effective when one or more counterparts have been signet by each of
the parties and delivered to the other parties.

         VIII.6 Entire Agreement; No Third-party  Beneficiaries.  This Agreement
(a) constitutes the entire  agreement,  and supersedes all prior  agreements and
understandings,  both  written and oral,  among the parties  with respect to the
subject  matter of this  Agreement  and (b) are not  intended to confer upon any
person other than the parties any rights or remedies.

         VIII.7  Governing  Law.  This  Agreement  shall  be  governed  by,  and
construed in accordance  with, the laws of the State of Arkansas,  regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.

         VIII.8  Assignment.  Neither  this  Agreement  nor  any of the  rights,
interests or obligations  hereunder  shall be assigned,  in whole or in part, by
operation of law or otherwise  by any of the parties  without the prior  written
consent of the other  parties,  except that  Merger Sub may assign,  in its sole
discretion,  any of or all its  rights,  interests  and  obligations  under this
Agreement to Fairfield or to any direct  wholly owned  corporate  subsidiary  of
Fairfield.  Subject to the preceding  sentence,  this  Agreement will be binding
upon,  inure to the  benefit  of, and be  enforceable  by, the parties and their
respective successors and assigns.
<PAGE>

         VIII.9  Enforcement.  The parties agree that  irreparable  damage would
occur  in the  event  that  any of the  provisions  of this  Agreement  were not
performed in accordance with their specific terms or were otherwise breached. It
is  accordingly  agreed that the parties  shall be entitled to an  injunction or
injunctions to prevent  breaches of this  Agreement and to enforce  specifically
the terms and  provisions  of this  Agreement in any court of the United  States
located in the State of  Arkansas  or in  Arkansas  state  court,  this being in
addition to any other remedy to which they are entitled at law or in equity.  In
addition,  each of the  parties  hereto  (a)  consents  to submit  itself to the
personal  jurisdiction  of any federal court located in the State of Arkansas or
any Arkansas  state court in the event any dispute  arises out of this Agreement
or the transactions  contemplated by this Agreement, (b) agrees that it will not
attempt to deny or defeat such personal  jurisdiction by motion or other request
for leave from any such  court and (c) agrees  that it will not bring any action
relating to this Agreement or the transactions contemplated by this Agreement in
any court  other than a federal  court  sitting in the State of  Arkansas  or an
Arkansas state court.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


<PAGE>


         IN WITNESS  WHEREOF,  Fairfield,  Merger Sub and Apex have  caused this
Agreement to be signed by their  respective  officers  thereunto duly authorized
and  Shareholders  have signed this Agreement,  all as of the date first written
above.

                           FAIRFIELD COMMUNITIES, INC.


                           By:    /s/ Clayton G. Gring, Sr.
                              ------------------------------
                                  Clayton G. Gring, Sr.
                                  Senior Vice President

                           FA, INC.


                           By:   /s/ Clayton G. Gring, Sr.
                              ------------------------------
                                  Clayton G. Gring, Sr.
                                  President


                           APEX MARKETING, INC.


                            By:   /s/ C. Wendell Flemister, Jr.
                               ---------------------------------
                                  C. Wendell Flemister, Jr.
                                  President


                                  /s/ Carl Flemister
                               ---------------------------------
                                     Carl Flemister


                                 /s/ C. Wendell Flemister, Jr.
                               ---------------------------------  
                                 C. Wendell Flemister, Jr.


<PAGE>



                                    EXHIBIT A

                              SURVIVING CORPORATION
                            ARTICLES OF INCORPORATION




<PAGE>




                                    EXHIBIT B

                          SURVIVING CORPORATION BYLAWS


<PAGE>


                                    EXHIBIT C

                             FORM OF RULE 145 LETTER


<PAGE>


                                    EXHIBIT D

            RELATING TO TAX ISSUES CERTIFICATES OF APEX AND SHAREHOLDERS


<PAGE>
                                  EXHIBIT E

                         FORMS OF EMPLOYMENT AGREEMENTS



<PAGE>

                                 Schedule 3.1 (g)

                              FAIRFIELD LIABILITIES

The  liabilities  of  Fairfield  under an  Agreement  and Plan of  Merger  among
Fairfield, FCVB Corp. and Vacation Break USA, Inc. dated as of August 8, 1997


<PAGE>


                               Schedule 3.2(q)

                               POOLING CONDITIONS


No changes in the equity interest of the Apex Common Stock in  contemplation  of
effecting  the Merger for a period of two years  before the Merger is  initiated
and between initiation and the Closing (hereinafter  collectively referred to as
the "Prohibited Period").

No  reacquisitions  of  outstanding  Apex Common Stock unless for purposes other
than the Merger, and then not in an abnormal amount.

No  entering  into  other  financial   arrangements   for  the  benefit  of  any
Shareholder, such as guaranty of a loan.

No purchases of Fairfield  Common Stock prior to the Closing except as set forth
on Schedule 3.2(v).

No distributions to any Shareholder that are greater than normal dividends,  and
only if based on established dividend policy.

No changes in the voting  rights of  outstanding  Apex Common  Stock  during the
Prohibited Period.

No stock option plans during the Prohibited Period.

No  arrangements  to sell any  Shareholder's  interests to an independent  third
party.

No new  agreements  during the  Prohibited  Period to purchase  interests of any
Shareholder in Apex.

No dispositions of significant assets during the Prohibited Period.

No stock dividends prior to the Closing.

No  reacquisitions  of  outstanding  Apex Stock for  purposes of  effecting  the
Merger.

No new  employment  contracts  with any  Shareholder  other than the  employment
agreement described in Section 6.5(c).

No  agreements  to assist any  Shareholder  to sell his shares after the Merger,
which involve compensation or other financial inducements.

No purchases of Apex Common Stock by any Shareholder.

No  transfer  of Apex  Common  Stock from any  Shareholder  to any  employee  or
employees of Apex in contemplation of the Merger, unless in compensation of past
service.

No agreements which would restrict any  Shareholder's  individual  voting rights
after the Merger.

No sales of Exchanged  Shares  within thirty days prior to  consummation  of the
Merger.


<PAGE>

                                 Schedule 4.2(b)
                                SALARY AND BONUS

         Apex may, in its sole discretion,  pay at or before the Closing each of
Carl Flemister,  C. Wendell  Flemister,  Jr. and Wanda Flemister a bonus for the
months of May 1997 through  October 1997.  Such bonus shall be no more than 6/12
of the total  bonus  actually  paid to such  person  for the 1996  fiscal  year,
regardless of such person's 1997 sales or performance.



<PAGE>


                                Schedule 4.2(g)
                             PERMITTED DISTRIBUTIONS

1)       Emerald Point Condominium, Unit C-2, located in Hollister, Missouri
2)       1997 GMC Yukon
3)       Wattensaw Land Company
4)       Lot 39, Phase I, Diamond Pointe Addition, City of Maumelle, Arkansas


<PAGE>


                                 Schedule 6.3(h)
                           OPINION OF COUNSEL FOR APEX


1. Apex is a corporation  duly organized,  validly existing and in good standing
under the laws of the State of  Arkansas,  has full power to own its  properties
and to the  knowledge  of  counsel,  to carry on the  business  currently  being
conducted by it, and to the knowledge of counsel,  does not conduct  business in
any state other than Arkansas,  Missouri and Texas. To the knowledge of counsel,
Apex  does not now own and has  never  owned  any  capital  stock  any or equity
interest in any corporation,  limited  liability  company,  partnership or other
entity and has no Subsidiary.

2. The  execution,  delivery,  and  consummation  of the Agreement has been duly
authorized  and approved by all  necessary  action.  The Agreement has been duly
executed and delivered and constitutes  the valid and binding  agreement of Apex
enforceable in accordance with its terms.

3. To the  knowledge of counsel,  neither the execution of the Agreement nor the
consummation of the transactions  contemplated thereby will result in the breach
of any term or provision of, or constitute a default  under,  or be in violation
of any charter provision, bylaw, agreement, instrument, order, law or regulation
to which Apex is a party or which is otherwise applicable.

4. To the  knowledge  of  counsel,  there is not (i) any  pending or  threatened
lawsuits or administrative or other proceedings against Apex or its assets other
than as set forth on  Schedule  3.2(g) to the  Agreement  or (ii) any  currently
existing order, writ, injunction or decree to which Apex is subject.

5. To the knowledge of counsel (i) the business  conducted by Apex has been, and
currently is being,  conducted in material  compliance with all, and Apex is not
in breach of any,  applicable laws,  rules and regulations or orders,  including
but not limited to those  relating to  telemarketing,  of each  jurisdiction  in
which its business is carried on and all  governing  instruments  applicable  to
Apex and to the  conduct of its  business,  except for  noncompliance  or breach
which,  individually or in the aggregate, will not affect adversely the business
or prospects of its business or Apex, and (ii) Apex has obtained all, and is not
in default  under  any,  permits,  licenses,  certificates,  approvals,  orders,
franchises, registrations and other authorizations required for the operation of
its  business,  except where the failure to obtain a permit,  or a default under
such permits, would not, individually or in the aggregate,  adversely affect the
business or prospects of Apex.

6. Except as set forth in Schedule 3.2(v) to the Agreement,  to the knowledge of
counsel,  neither Apex nor any of its  affiliates  (including but not limited to
Shareholders),  (i)  beneficially  owns (as such term is  defined  in Rule 13d-3
under the  Exchange  Act),  directly  or  indirectly,  or (ii) is a party to any
agreement,  arrangement or understanding for the purpose of acquiring,  holding,
voting or disposing of, in each case, shares of capital stock of Fairfield.

7. To the  knowledge  of counsel,  there is no fact or  circumstance  that would
cause any representation or warranty,  in whole or in part, of Apex contained in
the Agreement not to be true.