<PAGE>

                                                                     EXHIBIT 2.2

                            STOCK OPTION AGREEMENT


     STOCK OPTION AGREEMENT (this "Agreement"), dated November 1, 2000, between
Fairfield Communities, Inc., a Delaware corporation (the "Company"), and Cendant
Corporation, a Delaware corporation ("Cendant").

     WHEREAS, the Company, Cendant and Grand Slam Acquisition Corp., a Delaware
corporation and a subsidiary of the Company ("Merger Sub"), are entering into a
Merger Agreement of even date herewith (the "Merger Agreement", terms defined
therein and not otherwise defined herein having the same meanings when used
herein), which provides, among other things, that upon the terms and subject to
the conditions contained therein, Merger Sub  will be merged (the "Merger") with
and into the Company; and

     WHEREAS, the Company has agreed, in order to induce Cendant to enter into
the Merger Agreement, to grant the Option (as hereinafter defined).

     NOW THEREFORE, in consideration of the premises and the representations,
warranties, mutual covenants and agreements set forth herein and in the Merger
Agreement,  and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:

1.   Grant of Option.  The Company hereby grants Cendant an irrevocable option
     ---------------
(the "Option") to purchase, subject to the terms and conditions set forth
herein, up to 8,448,027 shares (the "Company Shares") of common stock of the
Company, par value $0.01 per share (the "Company Common Stock"), together with
the rights (the "Rights") associated with such shares issued pursuant to the
Rights Agreement, dated as of September 1, 1992, as amended, between the Company
and The First National Bank of Boston (as successor of Society National Bank),
as Rights Agent (the "Rights Agreement"), in the manner set forth below at a
price equal to the value, based on the Average Trading Price, of the Merger
Consideration per share (the "Exercise Price"); provided, however, that if the
                                                --------  -------
Company Stockholders Meeting shall not have occurred, the Exercise Price shall
be calculated using an Average Trading Price equal to the arithmetic average of
the 4:00 p.m. Eastern Time closing sales prices of Parent Common Stock reported
on the NYSE Composite Tape for the 20 consecutive Trading Days ending on (and
including) the Trading Day immediately prior to the date of the Exercise Notice
(as defined herein); provided, further, that in no event shall the number of
                     --------  -------
shares of the Company Common Stock for which the Option is exercisable exceed
19.9% of the Company's issued and outstanding shares of the Company Common
Stock.  References herein to the Company Shares shall also be deemed to include
the associated Rights.

2.   Exercise of Option.  The Option may be exercised by Cendant, in whole or in
     ------------------
part, at any time or from time to time.  In the event Cendant wishes to exercise
the Option, Cendant shall deliver to the Company a written notice (an "Exercise
Notice") specifying the total number of the Company Shares it wishes to purchase
and a date and time for the closing of such purchase (a "Closing"), which date
shall not be less than two nor more than thirty days after the later of (x) the
date such
<PAGE>

Exercise Notice is given and (y) the expiration or termination of any applicable
waiting period under the HSR Act. The Option shall terminate upon the earliest
of: (i) the Effective Time; (ii) the termination of the Merger Agreement
pursuant to Section 7.1 thereof (other than a termination in connection with
which Cendant is or may be entitled to the payment specified in Section 5.8
thereof); and (iii) 5:00 p.m., New York City time, on the date that is the one
year anniversary of the termination of the Merger Agreement in connection with
which Cendant is or may be entitled to the payment specified in Section 5.8
thereof or if, at the expiration of such one year period, the Option cannot be
exercised by reason of any applicable judgment, decree, order, law or
regulation, ten business days after such impediment to exercise shall have been
removed or shall have become final and not subject to appeal.

3.   Conditions to Closing.  The obligation of the Company to issue the Company
     ---------------------
Shares to Cendant hereunder is subject to the conditions that (i) all waiting
periods, if any, under the HSR Act applicable to the issuance of the Company
Shares hereunder shall have expired or have been terminated and (ii) no statute,
rule or regulation shall be in effect, and no order, decree or injunction
entered by any court of competent jurisdiction or governmental entity in the
United States shall be in effect, that prohibits or restrains the exercise of
the Option pursuant to the terms of this Agreement.

4.   Closing.  At any Closing, (a) upon receipt of the payment provided for by
     -------
this Section 4, the Company will deliver to Cendant a single certificate in
definitive form representing the number of the Company Shares designated by
Cendant in its Exercise Notice, such certificate to be registered in the name of
Cendant and to bear the legend set forth in Section 12 of this Agreement, and
(b) Cendant will deliver to the Company the aggregate price for the Company
Shares so designated in an amount equal to the product obtained by multiplying
the Exercise Price by the number of Company Shares to be purchased by wire
transfer of immediately available funds payable to the Company pursuant to the
Company's instructions.  At any Closing at which Cendant is exercising the
Option in part, Cendant shall present and surrender this Agreement to the
Company, and the Company shall deliver to Cendant an executed new agreement with
the same terms as this Agreement evidencing the right to purchase the balance of
the shares of the Company Common Stock purchasable hereunder.

5.   Representations and Warranties of the Company.  The Company represents and
     ---------------------------------------------
warrants to Cendant that (a) the Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and has the corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder, (b) the execution and delivery of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or any of the transactions
contemplated hereby, (c) this Agreement has been duly executed and delivered by
the Company, constitutes a valid and binding obligation of the Company and,
assuming this Agreement constitutes a valid and binding obligation of Cendant,
is enforceable against the Company in accordance with its terms, except as
enforcement may be limited by

                                       2
<PAGE>

bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, the availability of
injunctive relief and other equitable remedies, and limitations imposed by law
on indemnification for liability under securities laws, (d) the Company has
taken all necessary corporate action to authorize and reserve for issuance and
to permit it to issue, upon exercise of the Option, and at all times from the
date hereof through the expiration of the Option will have reserved, 8,448,027
unissued Company Shares and such other shares of the Company Common Stock or
other securities which may be issued pursuant to Section 10 of this Agreement,
all of which, upon their issuance, payment and delivery in accordance with the
terms of this Agreement, will be validly issued, fully paid and nonassessable,
and free and clear of all claims, liens, charges, encumbrances and security
interests of any nature whatsoever (other than those (i) created by or through
Cendant, or any of its affiliates, (ii) which arise under this Agreement, or
(iii) which arise under the Securities Act of 1933, as amended (the "Securities
Act") or any applicable state securities laws), (e) the execution and delivery
of this Agreement by the Company does not, and the performance of this Agreement
by the Company will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or the
loss of a material benefit under, or the creation of a lien, pledge, security
interest or other encumbrance on assets pursuant to (any such conflict,
violation, default, right of termination, cancellation or acceleration, loss or
creation, a "Violation"), (A) any provision of the Certificate of Incorporation
or By-laws of the Company, (B) any provisions of any loan or credit agreement,
note, mortgage, indenture, lease, benefit plan or other agreement, obligation,
instrument, permit, concession, franchise, license of or applicable to the
Company, or (C) any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company or its properties or assets, which
Violation, in the case of each of clauses (B) and (C), individually or in the
aggregate would prevent or materially delay the exercise by Cendant of the
Option or any other right of Cendant under this Agreement, or (f) the execution
and delivery of this Agreement by the Company does not, and the performance of
this Agreement by the Company will not result in a "Triggering Event" under the
Rights Agreement, and (g) except as described in Section 3.1(d) of the Merger
Agreement or this Agreement, and other than the HSR Act and, with respect to
Section 9 hereof, compliance with the provisions of the Securities Act and any
applicable state securities laws, the execution and delivery of this Agreement
by the Company does not, and the performance of this Agreement by the Company
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority.

6.   Representations and Warranties of Cendant.  Cendant represents and warrants
     -----------------------------------------
to the Company that (a) Cendant is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
the corporate power and authority to enter into this Agreement and to carry out
its obligations hereunder, (b) the execution and delivery of this Agreement by
Cendant and the consummation by Cendant of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Cendant and no other corporate proceedings on the part of Cendant are necessary
to authorize this Agreement or any of the transactions contemplated hereby, (c)
this Agreement has been duly executed and delivered by Cendant and constitutes a
valid and binding obligation of Cendant, and, assuming this Agreement

                                       3
<PAGE>

constitutes a valid and binding obligation of the Company, is enforceable
against Cendant in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and the
availability of injunctive relief and other equitable remedies and limitations
imposed by law on indemnification for liability under applicable securities
laws, (d) the execution and delivery of this Agreement by Cendant does not, and
the performance of this Agreement by Cendant will not, result in any Violation
pursuant to (A) any provision of the charter documents of Cendant, (B) any
provisions of any loan or credit agreement, note, mortgage, indenture, lease, or
other agreement, obligation, instrument, permit, concession, franchise, license
of or applicable to it or (C) any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Cendant or its properties or assets,
which Violation, in the case of each of clauses (B) and (C), would, individually
or in the aggregate have a material adverse effect on Cendant's ability to
consummate the transactions contemplated by this Agreement, (e) except as
described in Section 3.2(c) of the Merger Agreement, and other than the HSR Act
and, with respect to Section 9 hereof, compliance with the provisions of the
Securities Act and any applicable state securities laws, the execution and
delivery of this Agreement by Cendant does not, and the performance of this
Agreement by Cendant will not, require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental or regulatory
authority and (f) any Company Shares acquired upon exercise of the Option will
not be, and the Option is not being, acquired by Cendant with a view to public
distribution or resale in any manner which would be in violation of federal or
state securities laws.

7.   Put Right.
     ---------

     (a)  Exercise of Put.  At any time during which the Option is exercisable
pursuant to Section 2 or would be exercisable but for the circumstances referred
to in Section 2(iii) of this Agreement (the "Repurchase Period"), upon demand by
Cendant, Cendant shall have the right to sell to the Company (or any successor
entity thereof) and the Company (or such successor entity) shall be obligated to
repurchase from Cendant (the "Put"), all or any portion of the Option, at the
price set forth in clause (i) below, or all or any portion of the Company Shares
purchased by Cendant pursuant hereto, at a price set forth in clause (ii) below:

          (i)  the product of multiplying (A) the difference between the
          "Market/Offer Price" for shares of the Company Common Stock as of the
          date (the "Notice Date") the notice of exercise of the Put is given to
          the Company (defined as the higher of (x) the highest price per share
          offered as of the Notice Date pursuant to any tender or exchange offer
          or other Company Takeover Proposal which was made prior to the Notice
          Date and not terminated or withdrawn as of the Notice Date (the "Offer
          Price") and (y) the average of the closing prices of shares of the
          Company Common Stock on the New York Stock Exchange for the five
          trading days immediately preceding the Notice Date (the "Market
          Price")), and the Exercise Price, by (B) the number of Company Shares
          purchasable pursuant to the Option (or portion thereof with respect to
          which Cendant is exercising its rights under this Section 7). In
          determining the Market/Offer Price, the value of consideration other
          than cash or

                                       4
<PAGE>

          stock as provided above shall be determined by a nationally recognized
          investment banking firm selected by Cendant and reasonably acceptable
          to the Company.

          (ii) the product of multiplying (A) the Exercise Price paid by Cendant
          for the Company Shares acquired pursuant to the Option plus, assuming
          the Market/Offer Price is greater than the Exercise Price, the
          difference between the Market/Offer Price and the Exercise Price, by
          (B) the number of Company Shares so purchased.

     (b)  Payment and Redelivery of Option or Shares.  In the event Cendant
exercises its rights under this Section 7, the Company shall, within two
business days of the Notice Date, pay the required amount to Cendant by wire
transfer in immediately available funds to an account specified by Cendant two
business days prior to the date that payment is due and Cendant shall surrender
to the Company the Option or the certificates evidencing the Company Shares
purchased by Cendant pursuant hereto, and Cendant shall warrant that it owns
such shares and that such shares are then free and clear of all liens, claims,
charges and encumbrances of any kind or nature whatsoever.

8.   Restrictions on Certain Actions.  Until the termination of the option
     -------------------------------
pursuant to Section 2, the Company shall not adopt any Rights Agreement or
shareholder rights plan or any amendment thereto in any manner which would cause
Cendant, if Cendant has complied with its obligations under this Agreement and
the Merger Agreement, to become an "Acquiring Person" under such Rights
Agreement or shareholder rights plan solely by reason of the beneficial
ownership of the Company Shares acquired pursuant to this Agreement.

9.   Registration Rights.
     -------------------

(a)  Demand. The Company will, if requested in writing (a "Registration Notice")
by Cendant at any time and from time to time within two years of the exercise of
the Option, as expeditiously as possible prepare and file registration
statements under the Securities Act if such registration or the obtaining of a
receipt for a prospectus is necessary in order to permit the sale or other
disposition of any or all shares or other securities that have been acquired by
or are issuable to Cendant upon exercise of the Option ("Registrable
Securities") in accordance with the intended method of sale or other disposition
stated by Cendant. Any such Registration Notice must relate to a number of
Registrable Securities equal to at least twenty percent (20%) of Company Shares,
unless the remaining number of Registrable Securities is less than such amount,
in which case Cendant shall be entitled to exercise its rights hereunder but
only for all of the remaining Registrable Securities (a "Permitted Offering").
Cendant's rights hereunder shall terminate at such time as Cendant shall be
entitled to sell all of the remaining Registrable Securities pursuant to Rule
144(k) under the Act. The Company will use its reasonable best efforts to
qualify such shares or other securities under any applicable state securities
laws; provided, however, that the Company shall not be required to qualify to do
      --------  -------
business, consent to general service of process or submit to taxation in any
jurisdiction by reason of this provision. The Company will use reasonable
efforts to cause each such registration statement to become effective and to
obtain a (final) receipt for each such prospectus, to obtain all consents or
waivers of other parties which are required therefor, and to keep such
registration

                                       5
<PAGE>

statement or prospectus effective for such period not in excess of 120 calendar
days from the day such registration statement first becomes effective or the
date of the (final) receipt for such prospectus as may be reasonably necessary
to effect such sale or other disposition. The obligations of the Company
hereunder to file a registration statement or prospectus and to maintain its
effectiveness may be suspended for up to 90 calendar days in the aggregate
during any 12-month period if the board of directors of the Company shall have
determined that the filing of such registration statement or prospectus or the
maintenance of its effectiveness would require premature disclosure of nonpublic
information that would materially and adversely affect the Company or otherwise
interfere with or adversely affect any pending or proposed offering of
securities of the Company or any other material transaction involving the
Company, or the Company would be required under the Securities Act to include
audited financial statements for any period in such registration statement or
prospectus and such financial statements are not yet available for inclusion in
such registration statement or prospectus. Subject to applicable law, the
expenses associated with the preparation and filing any registration statement
or prospectus prepared and filed under this Section 9, and any sale covered
thereby ("Registration Expenses"), will be paid by the Company except for
underwriting discounts or commissions, brokers' fees and the reasonable fees and
disbursements of one law firm acting as Cendant's counsel related thereto. In
connection with any registration statement or prospectus pursuant to this
Section 9, Cendant shall furnish, or cause any holder of the Option or Company
Shares (a "Holder") to furnish, the Company with such information concerning
itself and the proposed sale or distribution as shall reasonably be required in
order to ensure compliance with the requirements of the Securities Act and to
provide representations and warranties customary for selling stockholders who
are unaffiliated with the Company. In addition, Cendant shall, and Cendant shall
cause each Holder to contractually agree to, indemnify and hold the Company, its
underwriters and each of their respective affiliates harmless against any and
all losses, claims, damages, liabilities and expenses (including, without
limitation, investigation expenses and fees and disbursement of counsel and
accountants), joint or several, to which the Company, its underwriters and each
of their respective affiliates may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in written information
furnished by any Holder to the Company expressly for use in such registration
statement.

(b)  Piggyback. If, during the time periods referred to in the first sentence of
subsection (a), the Company effects a registration under the Securities Act of
the Company Common Stock for its own account or for any other stockholders of
the Company pursuant to a firm commitment underwriting (other than on Form S-4
or Form S-8, or any successor form), it will allow Cendant the right to
participate in such registration or qualification as long as Cendant
participates in such underwriting on terms reasonably satisfactory to the
managing underwriters of such offering, and such participation will not affect
the obligation of the Company to effect demand registration statements or
prospectuses for Cendant under this Section 9; provided, that, if the managing
                                               --------
underwriters of such offering advise the Company in writing that in their
opinion the number of shares of the Company Common Stock requested to be
included in such registration or qualification exceeds the number that it would
be in the best interests of the Company to sell in such offering, the Company

                                       6
<PAGE>

will, after fully including therein all shares of Company Common Stock to be
sold by the Company, include the shares of Company Common Stock requested to be
included therein by Cendant pro rata (based on the number of shares of Company
Common Stock requested to be included therein) with the shares of Company Common
Stock requested to be included therein by persons other than the Company and
persons to whom the Company owes a contractual obligation (other than any
director, officer or employee of the Company to the extent any such person is
not currently owed such contractual obligation).

(c)  In connection with any registration or qualification pursuant to this
Section 9, the Company and Cendant will provide each other and any underwriter
of the offering with customary representations, warranties, covenants,
indemnification, and contribution in connection with such registration or
qualification. The Company shall provide to any underwriters such documentation
(including certificates, opinions of counsel and "comfort" letters from
auditors) as are customary in connection with underwritten public offerings as
such underwriters may reasonably require.

(d)  If the Company's securities of the same type as the Company Common Stock
beneficially owned by Cendant are then authorized for quotation or trading or
listing on The New York Stock Exchange (the "NYSE") or any other securities
exchange or automated quotations system, the Company, upon the request of
Cendant, shall promptly file an application, if required, to authorize for
quotation, trading or listing such shares of the Company Common Stock on such
exchange or system and will use its reasonable efforts to obtain approval, if
required, of such quotation, trading or listing as soon as practicable.

10.  Adjustment Upon Changes in Capitalization.
     -----------------------------------------

(a) In the event of any change in the Company Common Stock by reason of stock
dividends, split-ups, mergers, recapitalizations, combinations, exchange of
shares or the like, the type and number of shares or securities subject to the
Option, and the purchase price per share provided in Section 1 of this
Agreement, shall be adjusted appropriately, and proper provision shall be made
in the agreements governing such transaction so that Cendant shall receive, upon
exercise of the Option, the number and class of shares or other securities or
property that Cendant would have received in respect of the Company Common Stock
if the Option had been exercised immediately prior to such event or the record
date therefor, as applicable. In the event that any additional shares of Company
Common Stock otherwise become outstanding after the date of this Agreement
(other than pursuant hereto), the number of shares of Company Common Stock
subject to the Option shall be increased to equal 19.9% of the number of shares
of Company Common Stock then issued and outstanding.

(b) In the event that the Company shall enter in an agreement: (i) to
consolidate with or merge into any person, other than Cendant or another direct
or indirect wholly-owned subsidiary of Cendant, and shall not be the continuing
or surviving corporation of such consolidation or merger; (ii) to permit any
person, other than Cendant or another direct or indirect wholly-owned subsidiary
of Cendant, to merge into the Company and the Company shall be the continuing or
surviving

                                       7
<PAGE>

corporation, but, in connection with such merger, the then-outstanding shares of
Company Common Stock shall be changed into or exchanged for stock or other
securities of the Company or any other person or cash or any other property or
the outstanding shares of Company Common Stock immediately prior to such merger
shall after such merger represent less than 50% of the outstanding shares and
share equivalents of the merged company; or (iii) to sell or otherwise transfer
all or substantially all of its assets to any person, other than Cendant or
another direct or indirect wholly-owned subsidiary of Cendant, then, and in each
such case, the Company shall immediately so notify Cendant, and the agreement
governing such transaction shall make proper provisions so that upon the
consummation of any such transaction and upon the terms and conditions set forth
herein. Cendant shall, upon exercise of the Option, receive for each Company
Share with respect to which the Option has not been exercised an amount of
consideration in the form of and equal to the per share amount of consideration
that would be received by the holder of one share of Company Common Stock less
the Exercise Price (and, in the event of an election or similar arrangement with
respect to the type of consideration to be received by the holders of Company
Common Stock, subject to the foregoing, proper provision shall be made so that
the holder of the Option would have the same election or similar rights as would
the holder of the number of shares of Company Common Stock for which the Option
is then exercisable).

11.  Profit Limitation.
     -----------------

(a)  Notwithstanding any other provision of this Agreement, in no event shall
the Total Payment (as hereinafter defined) received by Cendant and its
affiliates exceed $32,000,000 and, if it otherwise would exceed such amount,
Cendant, at its sole election, shall either (i) reduce the number of shares of
Company Common Stock subject to the Option, (ii) deliver to the Company for
cancellation Company Shares previously purchased by Cendant (valued, for the
purposes of this Section 11(a) at the average closing sales price per share of
Company Common Stock (or if there is no sale on such date then the average
between the closing bid and ask prices on any such date) as reported by the NYSE
for the twenty consecutive trading days preceding the day on which the Total
Payment exceeds $32,000,000, (iii) pay cash to the Company, or (iv) any
combination thereof, so that the actually realized Total Payment shall not
exceed $32,000,000 after taking into account the foregoing actions.

(b)  As used herein, the term "Total Payment" shall mean the sum (before taxes)
of the following: (i) any amount received by Cendant pursuant to Section 7
hereof, (ii) (x) the net cash amounts received by Cendant pursuant to the sale,
within twelve months following exercise of the Option, of Company Shares (or any
other securities into which such Company Shares shall be converted or exchanged)
to any unaffiliated party, less (y) the aggregate Exercise Price for such
shares, (iii) any amounts received by Cendant upon transfer of the Option (or
any portion thereof) to any unaffiliated party, and (iv) the amount actually
received by Cendant pursuant to Section 5.8 of the Merger Agreement.

(c)  Notwithstanding any other provision of this Agreement, nothing in this
Agreement shall affect the ability of Cendant to receive or relieve the
Company's obligation to pay a fee pursuant to

                                       8
<PAGE>

Section 5.8 of the Merger Agreement.

12.  Restrictive Legends.  Each certificate representing shares of the Company
     -------------------
Common Stock issued to Cendant hereunder shall include a legend in substantially
the following form:

          "THE TRANSFER OF THE SHARES REPRESENTED BY THIS
          CERTIFICATE IS SUBJECT TO CERTAIN PROVISIONS OF AN
          AGREEMENT BETWEEN THE REGISTERED HOLDER HEREOF
          AND THE COMPANY AND TO RESALE RESTRICTIONS ARISING
          UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  A COPY
          OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE
          OF THE COMPANY AND WILL BE PROVIDED TO THE HOLDER
          HEREOF WITHOUT CHARGE UPON RECEIPT BY THE COMPANY
          OF A WRITTEN REQUEST THEREFOR."

The Company shall, upon written request of the holder thereof, issue such holder
a new certificate evidencing such Company Shares without such legend in the
event (i) the sale of such Company Shares has been registered pursuant to the
Securities Act, or (ii) such holder shall have delivered to the Company an
opinion of counsel to the effect that subsequent transfers of such Company
Shares may be effected without registration under the Securities Act.

13.  Listing and HSR Filing.  The Company, upon request of Cendant, shall as
     ----------------------
promptly as practicable file an application to list Company Shares to be
acquired upon exercise of the Option for listing or quotation on the NYSE and
shall use its reasonable efforts to obtain approval for such quotation as
promptly as practicable.  Promptly after the date hereof, each of the parties
hereto shall promptly file all required pre-merger notification and report forms
and other documents and exhibits required to be filed under the HSR Act to
permit the acquisition of the Cendant Shares subject to the Option at the
earliest practicable date.

14.  Binding Effect;  No Assignment.  This Agreement shall be binding upon and
     ------------------------------
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.  Except as expressly provided for in this Agreement and
except for any assignment by Cendant, in whole or in part, to a wholly-owned,
direct or indirect, subsidiary of Cendant (provided that any such subsidiary
agrees in writing to be bound by and liable for all of the terms, conditions and
provisions contained herein that would otherwise be applicable to Cendant and
provided further that Cendant shall remain liable for all of its duties and
obligations hereunder in the event such subsidiary shall fail to perform
hereunder), neither this Agreement nor the rights or the obligations of either
party hereto are assignable in whole or in part (whether by operation of law or
otherwise), without the written consent of the other party and any attempt to do
so in contravention of this Section 14 will be void. Nothing contained in this
Agreement, express or implied, is intended to confer upon any person other than
the parties hereto and their respective permitted assigns any rights or remedies
of any nature whatsoever by reason of this Agreement.

                                       9
<PAGE>

15.  Specific Performance.  The parties recognize and agree that if for any
     --------------------
reason any of the provisions of this Agreement are not performed in accordance
with their specific terms or are otherwise breached, immediate and irreparable
harm or injury would be caused for which money damages would not be an adequate
remedy.  Accordingly, each party agrees that, in addition to other remedies, the
other party shall be entitled to an injunction or injunctions restraining any
violation or threatened violation of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in the Courts of the State
of Delaware located in the County of New Castle (or, if such court lacks subject
matter jurisdiction, any appropriate federal court in the State of Delaware
(collectively, the "Courts") any of the appeals courts thereof.  In the event
that any action should be brought in equity to enforce the provisions of this
Agreement, neither party will allege, and each party hereby waives the defense
that there is adequate remedy at law.

16.  Entire Agreement.  This Agreement and the Merger Agreement (including the
     ----------------
Exhibits and Schedules thereto) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all other prior
discussions, representations and warranties, agreements and understandings, both
written and oral, among the parties or any of them with respect to the subject
matter hereof.  No prior drafts of this Agreement and no words or phrases from
any such prior drafts shall be admissible into evidence in any action, suit or
other proceeding involving this Agreement.

17.  Further Assurances.  Subject to the terms and conditions hereof, if Cendant
     ------------------
exercises the Option, or any portion thereof, in accordance with the terms of
this Agreement, each party will execute and deliver all such further documents
and instruments and take all such further action including obtaining necessary
regulatory approvals and making necessary filings (including, without
limitation, filings under the HSR Act and filings with the NYSE) as may be
necessary in order to consummate the transactions contemplated hereby (including
the issuance, registration and listing of the Company Shares).  To the extent
that the Option becomes exercisable, the Company will not take any actions which
would frustrate the exercise of the Option.

18.  Interpretation.  When a  reference is made in this Agreement to Sections,
     --------------
such reference shall be to a Section of to this Agreement unless otherwise
indicated.  Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."  The words "hereof," "herein" and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement.  All terms
defined in this Agreement shall have the defined meaning contained herein when
used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.  The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the gender and neuter genders of such term.  Any
agreement or instrument defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement or instrument as from
time to time amended, modified or supplemented and attachments thereto and
instruments incorporated therein.  References to a person are also to its
permitted successors and assigns.  The parties have participated jointly in the
negotiation and drafting of this Agreement.  In

                                       10
<PAGE>

the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement. Any
reference to any federal, state, local or foreign statute or law shall be deemed
to also to refer to any amendments thereto and all rules and regulations
promulgated thereunder, unless the context requires otherwise.

19.  Severability.  The invalidity or unenforceability of any provision of this
     ------------
Agreement shall not affect the validity or enforceability of the other
provisions of this Agreement, which shall remain in full force and effect.  In
the event any court or other competent authority holds any provision of this
Agreement to be null, void or unenforceable, under any present or future law,
public policy or order, and if the rights or obligations of any party hereto
under this Agreement or the Merger Agreement, and the economic or legal
substance of the transactions contemplated hereby and thereby, will not be
materially and adversely affected thereby, (i) such provision will be fully
severable and (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof.
Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
the execution and delivery of an amendment to this Agreement in order to the
maximum extent possible to effectuate, to the extent permitted by law, the
intent of the parties hereto with respect to such provision.  Each party agrees
that, should any court or other competent authority hold any provision of this
Agreement or part hereof to be null, void or unenforceable, or order any party
to take any action inconsistent herewith, or not take any action required
herein, the other party shall not be entitled to specific performance of such
provision or part hereof or to any other remedy, including but not limited to
money damages, for breach hereof or of any other provision of this Agreement or
part hereof as the result of such holding or order.

20.  Notices.  Any notice, request, claim, demand or communication required or
     -------
permitted hereunder shall be in writing and either delivered personally,
telegraphed or telecopied or sent by certified or registered mail, postage
prepaid, and shall be deemed to be given, dated and received (a) on the date of
delivery if delivered personally, including by courier, (b) upon receipt if
delivered by registered or certified mail, return receipt requested, postage
prepaid or (c) upon receipt if sent by facsimile transmission, provided that any
notice received by telecopy or otherwise at the addressee's location on any
business day after 5:00 p.m. (addressee's local time) shall be deemed to have
been received at 9:00 a.m. (addressee's local time) on the next business day.
Any party to this Agreement may notify any other party of any changes to the
address or any of the other details specified in this paragraph, provided that
such notification shall only be effective on the date specified in such notice
or five business days after the notice is given, whichever is later.  Rejection
or other refusal to accept or the inability to deliver because of changed
address of which no notice was given shall be deemed to be receipt of the notice
as of the date of such rejection, refusal or inability to deliver.  All notices
hereunder shall be delivered to the parties to the addresses or facsimile
numbers set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:

                                       11
<PAGE>

     If to the Company to:

     Fairfield Communities, Inc.
     8669 Commodity Circle
     #200
     Orlando, Florida 32819
     Facsimile No.: (407) 370-5222
     Attention: General Counsel

     with a copy to (which shall not constitute notice):

     Jones, Day, Reavis & Pogue
     2727 North Harwood Street
     Dallas, Texas 75201
     Facsimile No.: (214) 969-5100
     Attention: Mark V. Minton

     If to Cendant:

     Cendant Corporation
     Six Sylvan Way
     Parsippany, NJ  07054
     Facsimile No.: (973) 496-5335
     Attention: General Counsel

     with a copy to (which shall not constitute notice):

     Skadden, Arps, Slate, Meagher & Flom LLP
     Four Times Square
     New York, NY 10036-6522
     Facsimile No.: (212) 735-2000
     Attention:   David Fox

21.  Governing Law.  This Agreement shall be governed by and construed in
     -------------
accordance with the laws of the State of Delaware applicable to contracts
executed and to be performed fully within such State, without giving effect to
the principles of conflicts or choice of law thereof or any other jurisdiction.

22.  Headings.  The headings contained in this Agreement are for reference
     --------
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

23.  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

                                       12
<PAGE>

counterparts have been signed by each of the parties and delivered to the other
parties. A facsimile copy of a signature page shall be deemed to be an original
signature page.

24.  Expenses.  Except as otherwise expressly provided herein or in the Merger
     --------
Agreement, all costs and expenses incurred by a party in connection with the
transactions contemplated by this Agreement, including fees and expenses of its
own financial consultants, investment bankers, accountants and counsel, shall be
paid by the party incurring such expenses.

25.  Amendments; Waiver.  This Agreement may be amended by the parties hereto
     ------------------
and the terms and conditions hereof may be waived only by an instrument in
writing signed on behalf of each of the parties hereto, or, in the case of a
waiver, by an instrument in writing signed on behalf of the party waiving
compliance.

26.  Consent to Jurisdiction.  Each of the parties hereto irrevocably agrees
     -----------------------
that any action, suit, claim or other legal proceeding with respect to this
Agreement or in respect of the transactions contemplated hereby brought by any
other party hereto or its successors or assigns shall be brought and determined
in any state or federal court located in the State of Delaware or any appeals
courts thereof (the "Delaware Courts"), and each of the parties hereto
irrevocably submits with regard to any such proceeding for itself and in respect
to its property, generally and unconditionally, to the exclusive jurisdiction of
the Delaware Courts.  Each of the parties hereto irrevocably waives, and agrees
not to assert, by way of motion, as a defense, counterclaim or otherwise, in any
action or proceeding with respect to this Agreement, (a) any claim that it is
not personally subject to the jurisdiction of the Delaware Courts for any
reason, (b) that it or its property is exempt or immune from jurisdiction of any
Delaware Court or from any legal process commenced in any Delaware Court
(whether through service of notice, attachment before judgment, attachment in
aid of execution of judgment, execution of judgment or otherwise) and (c) to the
fullest extent permitted by applicable law, that (i) the proceeding in any
Delaware Court is brought in an inconvenient forum, (ii) the venue of such
proceeding is improper or (iii) this Agreement, or the subject matter hereof,
may not be enforced in or by a Delaware Court.  Notwithstanding the foregoing,
each of the parties hereto agrees that the other party shall have the right to
bring any action or proceeding for enforcement of a judgment entered by the
Delaware Courts in any other court or jurisdiction.

27.  Remedies Cumulative.  Except as otherwise herein provided, the rights and
     -------------------
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by applicable law.

28.  Entire Agreement; No Third Party Beneficiaries.  This Agreement constitutes
     ----------------------------------------------
the entire agreement, and supersedes all prior agreements and understandings,
both written and oral, between the parties with respect to the subject matter of
this Agreement.  The terms and provisions of this Agreement are intended solely
for the benefit of each party hereto and their respective successors or
permitted assigns, and except as otherwise expressly provided for herein, it is
not the intention of the parties to confer third-party beneficiary rights upon
any other person.

29.  Limitations on Warranties.
     -------------------------

                                       13
<PAGE>

(a)  Except for the representations and warranties contained in this Agreement
and the Merger Agreement, the Company makes no other express or implied
representation or warranty to Cendant. Cendant acknowledges that, in entering
into this Agreement, it has not relied on any representations or warranties of
the Company or any other person other than the representations and warranties of
the Company set forth in this Agreement or the Merger Agreement.

(b)  Except for the representations and warranties contained in this Agreement
and the Merger Agreement, Cendant makes no other express or implied
representation or warranty to the Company. The Company acknowledges that, in
entering into this Agreement, it has not relied on any representations or
warranties of Cendant or any other person other than the representations and
warranties of Cendant set forth in this Agreement and the Merger Agreement.

30.  Date for Any Action.  In the event that any date on which any action is
     -------------------
required to be taken hereunder by any of the parties hereto is not a business
day, such action shall be required to be taken on the next succeeding day which
is a business day.

                                       14
<PAGE>

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

                               FAIRFIELD COMMUNITIES, INC.

                              By:  /s/ James G. Berk
                                 ---------------------------------
                              Name:  James G. Berk
                              Title: President and CEO

                              CENDANT CORPORATION

                              By:   /s/ James E. Buckman
                                 ---------------------------------
                              Name:  James E. Buckman
                              Title: Vice Chairman, General Counsel and
                                     Assistant Secretary


                                       15