LOAN AND SECURITY AGREEMENT

      This LOAN AND SECURITY AGREEMENT is entered into for good and valuable
consideration, by and between FINOVA CAPITAL CORPORATION, a Delaware
corporation, and the individual or business organization signing below as
"Borrower."

1. DEFINITIONS.

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

      1.1 "Acquisition Refinancing Advance": an advance of the Acquisition
Refinancing Component in accordance with the terms and conditions of the
Agreement.

      1.2 "Acquisition Refinancing Component": that portion of the Loan, not to
exceed the Maximum Acquisition Refinancing Component Amount, allocated to the
Approved Acquisition Refinancing Component Uses.

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

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

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

      1.6 "Applicable Usury Law": the usury law chosen by the parties pursuant
to the terms of paragraph 9.10 or such other usury law which is applicable if
such usury law is not.

      1.7 "Approved Acquisition Refinancing Component Uses": the uses identified
in the Schedule as Approved Refinancing Component Uses and such other uses as
may be approved by Lender in writing.

      1.8 "Architect/Engineer": an architect, design professional or engineer
employed by Borrower to perform architectural, design or engineering services in
connection with the Construction Improvements to be constructed as part of the
Construction Work.

      1.9 "Architect/Engineer Agreement": a contract (written or oral, now or
hereafter in effect) between Borrower and an Architect/Engineer for the
performance of architectural, design or engineering services relating in any way
to the Construction Work, as approved by Lender in writing and modified from
time to time in accordance with the terms of the Documents.

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

      1.11 "Basic Interest": the meaning given to it in paragraph 2.4.

      1.12 "Basic Interest Rate": the per annum rate of interest described in
the Schedule as the Basic Interest Rate.

      1.13 "Borrower": the individual or business organization signing below as
"Borrower"; and, subject to the restrictions on assignment and transfer
contained in this Agreement, its successors and assigns.

      1.14 "Borrower's Assignments": collectively, a written assignment or
assignments, as they may be from time to time renewed, amended, restated or
replaced, each of which may be separate from and/or included within the
Borrower's Mortgage, executed or to be executed and delivered to Lender by
Borrower, and creating in favor of Lender to facilitate Performance of the
Obligations, subject only to the Permitted Encumbrances a perfected, direct,
first and exclusive assignment of the following: all leases, sales contracts,
rents and sales and other proceeds pertaining
<PAGE>

to or arising from the Real Property or any business of Borrower conducted
thereon; the Architect/Engineer Agreement(s), the Plans and Specifications, the
Construction Work Contract(s) and the other Principal Construction Work-Related
Items; all management, operating and service contracts pertaining to the Real
Property; all marketing contracts for the sale of Time-Share Interests, to the
extent assignable; the Real Property Developer's Rights, and, to the maximum
extent any such right or privilege is assignable under applicable law, any and
all other special rights and privileges of Borrower under the Time-Share Program
Governing Documents; and all other Contracts, Licenses, Permits and Other
Intangibles.

      1.15 "Borrower's Mortgage": a mortgage/deed of trust/deed to secure debt
to be executed and delivered by Borrower to Lender and under the terms of which
Borrower has conveyed or granted in favor of Lender, as security for the
Performance of the Obligations, subject only to the Permitted Encumbrances, a
perfected, direct, first and exclusive lien upon the Real Property, as it may be
from time to time renewed, amended, restated or replaced.

      1.16 "Borrower's Security Agreements": collectively, a written security
agreement or security agreements which may be separate from and/or included
within the Borrower's Mortgage or this Agreement, to be executed and delivered
to Lender by Borrower and creating in favor of Lender, as security for the
Performance of the Obligations, subject only to the Permitted Encumbrances, a
perfected, direct, first and exclusive security interest in the Personal
Property, as they may be from time to time renewed, amended, restated or
replaced.

      1.17 "Borrower's Security Documents": the Borrower's Mortgage, the
Borrower's Assignments, the Borrower's Security Agreements, the Time-Share
Program Governing Documents Assignments, the Time-Share Program Management
Agreement Assignments (if applicable), this Agreement and all other documents
now or hereafter executed by Borrower and securing the Obligations, as they may
be from time to time renewed, amended, restated or replaced.

      1.18 " Borrowing Term": the period commencing on the date of this
Agreement and ending on the close of Lender's normal business hours on the date
(or if not a Business Day, the first Business Day thereafter) identified in the
Schedule as the Borrowing Term Expiration Date.

      1.19 "Borrower's Vacation Club Rights": any and all special rights and
privileges of Borrower under the Time-Share Program Governing Documents.

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

      1.21 "Collateral": the Real Property, the Personal Property, the Insurance
Policies, the Real Property Developer's Rights, the Vacation Club Developer's
Rights and any and all other property now or hereafter serving as security for
the Performance of the Obligations, and all products and proceeds thereof.

      1.22 "Completion": with respect to a Construction Work Phase, the
occurrence, after Substantial Completion of such Construction Work Phase, of the
following:

            (a) final completion of such Construction Work Phase (including
"punch-list" items), in accordance with the applicable Plans and Specifications,
the applicable Construction Work Contract(s), the Documents, all applicable
Legal Requirements, sound construction, engineering and architectural principles
and commonly accepted safety-standards, free of liens and free of defective
materials and workmanship; and

            (b) receipt by Lender of the following in form and substance
satisfactory to it: (i) a certificate of completion from the
Architect(s)/Engineer(s) for such Construction Work Phase to the extent required
by Lender, and, if Lender elects, from Lender's Inspector to the effect that
such Construction Work Phase has been completed to the extent described in item
(a) and final payment is due under all applicable Construction Work Contracts
between Borrower and Construction Work Contractors; (ii) final lien waivers for
such Construction Work Phase; and (iii) the title policy endorsements required
pursuant to paragraph 6.1(o) after final completion of such Construction Work
Phase; and

            (c) expiration of the statutory period in which mechanics' liens and
similar liens can be filed on account of such Construction Work Phase.

      1.23 "Construction Budget": with respect to a Construction Work Phase, the
detailed budget cost itemization prepared by Borrower and approved in writing by
Lender and modified from time to time in accordance with the terms of the
Documents, which specifies by item the cost and source of payment of: (a)


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all labor, materials and services necessary for Completion of the Construction
Work Phase in Accordance with the applicable Plans and Specifications, the
applicable Construction Work Contract(s), the Documents, all Legal Requirements,
sound construction, engineering and architectural principles, and commonly
accepted safety standards; (b) interest on the portion of the Construction
Component allocated to such Construction Work Phase and on any portion of the
Acquisition Refinancing Component that Lender reasonably requires be allocated
to such Construction Work Phase; and (c) all other expenses incidental to
Completion of the Construction Work Phase. Each Construction Budget shall
include within the costs of the applicable Construction Work Phase to be paid
from the Construction Component an interest reserve and a contingency reserve
determined to be adequate by Lender. Without limiting Lender's discretion in
approving a Construction Budget, Lender shall be satisfied that any
"construction overhead" contained therein does not constitute a developer fee of
any kind.

      1.24 "Construction Component" that portion of the Loan, not to exceed the
Maximum Construction Component Amount, allocated to payment of the cost of the
Construction Work, excluding interest on the Loan.

      1.25 "Construction Improvements": the improvements to be constructed upon
or made to the Real Property as part of the Construction Work, consisting of
improvements specifically identified in the Schedule as the Construction
Improvements, necessary on-site and off-site improvements, and furniture,
furnishings, fixtures and/or equipment necessary for the Improvements; and all
as set forth in the Plans and Specifications and the Construction Contract(s)
for the Construction Work and as described in the Construction Budgets for the
Construction Work.

      1.26 "Construction Work": the construction or making of the Construction
Improvements and the acquisition and installation of any and all furniture,
fixtures and/or equipment which are part of the Construction Improvements or
required by the terms of this Agreement or shown on or described in the Plans
and Specifications or the Construction Work Contract(s) or shown as costs in the
Construction Budget(s).

      1.27 "Construction Work Contract": a contract (written or oral, now or
hereafter in effect) between Borrower and a Construction Work Contractor or
between a Construction Work Contractor and any other person or entity relating
in any way to the construction of the Construction Improvements, including the
performing of labor and the furnishing of equipment, materials or services
(other than architectural, design or engineering services), as approved by
Lender in writing and modified from time to time.

      1.28 "Construction Work Contractor" a contractor employed by Borrower to
provide labor and/or to furnish equipment, materials or services (other than
architectural, design or engineering services) for any portion of the
Construction Work.

      1.29 "Construction Work Phase": a phase of the Construction Work which
consists of (a) some (but not less than those which are necessary to the use of
the time-share buildings being constructed as part of the same Construction Work
Phase or are required to be constructed as part of such Construction Work Phase)
of the Construction Improvements (including, without limitation, amenities and
ancillary buildings) and (b) the acquisition and installation of any and all
furniture, furnishings, fixtures and/or equipment which are part of the
improvements being constructed or made in such Construction Work Phase or
required by terms of this Agreement or shown on or described in the applicable
Plans and Specifications or the applicable Construction Work Contract(s) or as
costs in the applicable Construction Budget.

      1.30 "Construction Work Phase Progress Schedule": with respect to a
Construction Work Phase, the schedule for the Completion of the Construction
Work Phase and parts thereof, as approved by Lender in writing.

      1.31 "Construction Work-Related Advance": an Advance of the Construction
Component made for the purpose of paying or reimbursing Borrower for costs of
the Construction Work, excluding interest on the Loan.

      1.32 "Construction Work-Related Advance Request": the written application
of Borrower specifying by name and amount all parties to whom Borrower is
obligated for labor, materials, equipment or services supplied for the
performance of the Construction Work and all other expenses incidental to the
Loan, and requesting an Advance for payment of such items, accompanied, to the
extent required by Exhibit G-1, by an Affidavit of Borrower, certificates of the
applicable Architect/Engineer and the applicable Construction Work Contractor
and such schedules, affidavits, certificates, releases, waivers, statements,
invoices, bills and other documents as Lender may reasonably request.


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<PAGE>

      1.33 "Contracts, Licenses, Permits and Other Intangibles": all contracts,
licenses, permits and other intangibles in which Borrower now or hereafter has
rights and are now or hereafter used in connection with the ownership,
development, construction, improvement, use, sale or lease of the Real Property,
other than leases under which Borrower is lessor, sales contracts under which
Borrower is seller of the Real Property Developer's Rights.

      1.34 "Default Rate": with respect to any indebtedness, the per annum rate
of interest identified in the Schedule as the Default Rate.

      1.35 "Discount Rate": the per annum rate identified in the Schedule as the
Discount Rate.

      1.36 "Documents": this Agreement, the Note, any and all Guaranties, any
and all Subordination Agreements, the Environmental Certificate, the Borrower's
Security Documents, and all other documents now or hereafter executed in
connection with the Loans, as they may be from time to time renewed, amended,
restated or replaced.

      1.37 "Environmental Certificate": an environmental certificate to be
executed and delivered to Lender by Borrower and such other persons as Lender
may require and containing representations, warranties and covenants regarding
the environmental condition of the Real Property and the Component Sites, as it
may be from time to time renewed, amended, restated or replaced.

      1.38 "Event of Default": the meaning set forth in paragraph 7.1.

      1.39 "Force Majeure Event": an "act of God," a fire, a strike, a
governmental order and/or injunction which is issued by a court of competent
jurisdiction for reasons other than for Borrower's acts or omissions which would
constitute a default under this Agreement, or a similar event beyond Borrower's
reasonable control.

      1.40 "Guarantor": at any time, a person or entity then required under the
terms of this Agreement to guarantee all or any part of the Obligations.

      1.41 "Guaranty": a guaranty and subordination agreement made by a
Guarantor with respect to all or any part of the Obligations, as it may be from
time to time renewed, amended, restated or replaced.

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

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

      1.44 "Incomplete Improvements": with respect to a Time-Share Interest,
Construction Improvements which are being constructed as a part of the
Construction Work Phase from which such Time-Share Interest has resulted or will
result or which have been promised to the Purchaser of the Time-Share Interest
and as to which Substantial Completion has not occurred.

      1.45 "Insurance Policies": the insurance policies that Borrower is
required to maintain and deliver pursuant to paragraph 6.1(c).

      1.46 "Interest Reserve Advance": an Loan Advance (or portion thereof) made
to pay accrued and unpaid interest on any portion of the Loan.

      1.47 "Interest Reserve Fund": that portion of the Loan which is allocated
within all Construction Budgets to an interest reserve for the monthly payment
of interest accrued on the Loan.

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

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


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<PAGE>

      1.50 "Lender's Inspector": with respect to a Construction Work Phase, the
meaning given to it in Exhibit A.

      1.51 "Loan": the loan made pursuant to paragraph 2.1(b).

      1.52 " Loan Fee": the amount identified in the Schedule as the Loan Fee.

      1.53 "Maturity Date": the date identified in the Schedule as the Maturity
Date.

      1.54 "Maximum Acquisition Refinancing Component Amount": the amount
identified in the Schedule as the Maximum Acquisition Refinancing Component
Amount.

      1.55 "Maximum Loan Amount": the amount identified in the Schedule as the
Maximum Loan Amount.

      1.56 "Minimum Opinion Matters": due organization and good standing of
Borrower and those Guarantors and (if any) other sureties for the Performance of
the Obligations who are not natural persons; due authorization, execution and
delivery of the Documents; enforceability of the Documents (including choice of
law provisions); compliance of the Loans with applicable usury laws; the absence
of conflict between the Documents and Articles of Organization of Borrower and
those Required Guarantors and (if any) other sureties for the Performance of the
Obligations who are not natural persons; non-contravention of the Documents and
performance thereunder by Borrower, Required Guarantors and (if any) other
sureties for the Performance of the Obligation with applicable judgements,
awards or agreements by which they or their respective properties are bound;
non-materiality of pending and threatened litigation of Borrower, Required
Guarantors and (if any) other sureties for the Performance of the Obligations;
compliance by Borrower with applicable laws; zoning for the Real Property and
Component Sites; compliance of Borrower with applicable laws; compliance with
applicable zoning laws; compliance of the Time-Share Program, the Time-Share
Program Governing Documents and Time-Share Program Consumer Documents with
applicable laws; and proper perfection of the required liens and security
interests.

      1.57 "Minimum Required Time-Share Approvals": with respect to the
Time-Share Program, all approvals required from governmental agencies in order
to sell Time-Share Interests and offer them for sale at the Component Sites.

      1.58 "Non-Real Property Time-Share Interest": a Time-Share Interest which
is not a Real Property Time-Share Interest.

      1.59 "Note": the promissory note to be made and delivered by Borrower to
Lender pursuant to paragraph 4.1(a) to evidence the Loan, as it may be from time
to time renewed, amended, restated or replaced.

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

      1.61 "Opening Prepayment Date": the date identified in the Schedule as the
Loan Opening Prepayment Date.

      1.62 "Partial Release Fee": the amount identified in the Schedule as the
Partial Release Fee.

      1.63 "Performance" or "Perform": full, timely and faithful performance.

      1.64 "Permitted Debt": the meaning given to it in paragraph 6.2(b).

      1.65 "Permitted Encumbrances": the rights, restrictions, reservations,
encumbrances, easements and liens of record which Lender has agreed to accept as
set forth in Exhibit B.

      1.66 "Personal Property": with respect to any portion of the Real
Property, all fixtures and tangible and intangible personal property in which
Borrower now or hereafter has an interest and which now or hereafter either are
(a) located on such portion of the Real Property or (b) intended or necessary
for, arise from or pertain to the ownership, development, construction,
improvement, repair, use, operation, sale or lease of such portion of the Real
Property.

      1.67 "Phase I": the portion of the Real Property identified in the
Schedule as Phase I.

      1.68 "Phase II": the portion of the Real Property identified in the
Schedule as Phase II.

      1.69 "Plans and Specifications": the architectural, structural,
mechanical, electrical and other plans and specifications for the construction
of the Construction Improvements and the completion of


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the rest of the Construction Work prepared by Architect(s)/Engineer(s), as
approved by Lender as modified from time to time with Lender's prior written
consent.

      1.70 "Prepayment Premiums": Loan Prepayment Premium.

      1.71 "Principal Construction Work-Related Items": the Plans and
Specifications and all agreements between Borrower and third parties pertaining
to the Construction Work, including, without limitation, the Construction Work
Contract(s) and the Architect/Engineer Agreement(s), as approved by Lender in
writing and modified from time to time in accordance with the terms of the
Documents.

      1.72 "Property": the Real Property and the related Personal Property.

      1.73 "Purchase Contract": a purchase contract pursuant to which Borrower
has agreed to sell and a third party has agreed to purchase a Time-Share
Interest.

      1.74 "Purchase Contracts Escrow": with respect to Purchase Contracts not
yet closed, the escrow established with Purchase Contracts Escrow Agent pursuant
to paragraph 3.3.

      1.75 "Purchase Contracts Escrow Agent": at any time with respect to the
Purchase Contracts Escrow, the person then acting as escrow agent under the
Purchase Contracts Escrow.

      1.76 "Quiet Enjoyment Rights": the meaning given to it in paragraph
4.1(b).

      1.77 "Real Property": the real property described in Exhibit C.

      1.78 "Real Property Developer's Rights": all rights and privileges of
Borrower under all development agreements, declarations, restrictive covenants
and other documents applicable to the Real Property or, if compliance therewith
would otherwise be in conflict with any of the Documents, become applicable to
the Real Property, with Lender's prior written consent.

      1.79 "Real Property Time-Share Interest": a Time-Share Interest which
includes or is coupled with a real property interest in any of the Component
Sites.

      1.80 "Reference Rate": the interest rate identified in the Schedule as the
Reference Rate.

      1.81 "Required Closing Date": the date identified in the Schedule as the
Required Closing Date.

      1.82 "Required Completion Assurance Deposit ("Construction"): the meaning
given to it in paragraph 6.1(m), with respect to any Construction Work Phase.

      1.83 "Required Completion Date": with respect to a Construction Work
Phase, the date identified in the Schedule as the Required Completion Date for
such Construction Work Phase.

      1.84 "Required Guarantor(s)": with respect to a Loan, the individual(s)
identified in the Schedule as the Required Guarantor(s) for such Loan.

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

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

      1.87 "Subordination Agreement": a subordination agreement made by a
Subordinator subordinating indebtedness owed to it by Borrower to all or a part
of the Loans, as it may be from time to time renewed, amended, restated or
replaced.

      1.88 "Subordinator": at any time, a person or entity then required under
the terms of this Agreement to subordinate indebtedness owed to it by Borrower
to all or any part of the Obligations.

      1.89 "Substantial Completion": with respect to a Construction Work Phase:

            (a) substantial completion (as defined in AIA Document A201, most
current version) of such Construction Work Phase, in accordance with the
applicable Plans and Specifications, the applicable Construction Work
Contract(s), the Documents, all applicable Legal Requirements, sound
construction, engineering and architectural principles and commonly accepted
safety-standards, free of liens and free of defective materials and workmanship;


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<PAGE>

            (b) receipt by Lender of the following in form and substance
satisfactory to it: (i) a certificate of substantial completion from Borrower
and the applicable Architect(s)/Engineer(s) and, if Lender elects, from Lender's
Inspector to the effect that such Construction Work Phase has been so completed,
all utilities necessary to serve the portions of the Real Property improved as a
part of such Construction Work Phase have been connected and are operating, the
Construction Improvements being constructed in such Construction Work Phase are
fully furnished and ready for occupancy for the intended time-share purposes,
and final payment is due under all applicable Construction Work Contracts
between Borrower and all applicable Construction Work Contractors (subject only
to retention for "punch-list" items); (ii) a certificate of occupancy (or its
equivalent) from the appropriate governmental authority having jurisdiction over
such Construction Work Phase which has the effect of allowing the use of the
applicable Construction Improvements for time-share or other intended purposes;
(iii) if applicable Legal Requirements provide that the recording of a notice of
completion will cause the expiration upon a date certain of the statutory period
within which mechanics' and similar liens can be filed, verification of the
recording of such notice in the manner prescribed by such laws; (iv) final lien
waivers, other than lien waivers for any portion of the Construction Work Phase
remaining to be performed prior to Completion of such Construction Work Phase
and for which Lender is still holding Basic Retainage for such Construction Work
Phase or Additional Retainage for such Construction Work Phase sufficient to
cover such portion of such Construction Work Phase remaining to be performed;
(v) the as-built survey required pursuant to paragraph 6.1(m) after substantial
completion of such Construction Work Phase; (vi) the title policy endorsements
required pursuant to paragraph 6.1(m) after substantial completion of such
Construction Work Phase; and (vii) if any portion of the Construction
Improvements in such Construction Work Phase is required to be dedicated to a
governmental authority, evidence that such dedication has occurred and that the
governmental authority has accepted such Construction Improvements, subject only
to customary warranty obligations on the part of Borrower.

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

      1.91 "Third Party Consents": those consents which Lender requires Borrower
to obtain, or which Borrower is contractually or legally obligated to obtain,
from others in connection with the transaction contemplated by the Documents.

      1.92 "Time-Share Association": the association established or to be
established in accordance with the applicable Time-Share Declaration to manage
the applicable Time-Share Program and in which at least all owners of Real
Property Time-Share Interests will be members.

      1.93 "Time-Share Associations": whether one or more, all Time-Share
Associations.

      1.94 "Time-Share Declaration": that declaration or declaration of
covenants, conditions and restrictions which have been or will be executed by
Borrower, have been or will be recorded in the real estate records of the county
where the Real Property is located, and have or will establish the applicable
Time-Share Program.

      1.95 "Time-Share Declarations": whether one or more, all Time-Share
Declarations.

      1.96 "Time-Share Interest": one of the types of time-share interests
identified in the Schedule as the Time-Share Interests.

      1.97 "Time-Share Program": collectively, all Time-Share Programs.

      1.98 " Time-Share Program": the program created or to be created under the
applicable Time-Share Declaration by which persons may own Real Property
Time-Share Interests in the Real Property, enjoy their respective Real Property
Time-Share Interests on a recurring basis, and share the expenses associated
with the operation and management of such program.

      1.99 "Time-Share Program Consumer Documents": Time-Share Program Consumer
Documents.

      1.100 "Time-Share Program Governing Documents": all Time-Share Program
Governing Documents.

      1.101 "Time-Share Program Governing Documents Assignments": whether one or
more, Time-Share Governing Documents.


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

      1.103 "Time-Share Program Governing Documents Assignment": a written
assignment to be executed and delivered to Lender by Borrower, and creating in
favor of Lender in order to facilitate Performance of the Obligations, subject
only to the Permitted Encumbrances, a perfected, direct, first and exclusive
assignment of Borrower's rights in, to and under the Time-Share Program
Governing Documents, and as it may be from time to time renewed, amended,
restated or replaced.

      1.104 "Time-Share Program Management Agreement Assignments": whether one
or more, all Time-Share Program Management Agreement Assignments.

      1.105 "Time-Share Program Management Agreements": whether one or more, all
Time-Share Program Management Agreements.

      1.106 "Time-Share Program Managers": whether one or more, Time-Share
Program Managers.

      1.107 "Time-Share Program Management Agreement": the management agreement
from time to time entered into between the Time-Share Association and the
Time-Share Program Manager regarding the management of the Time-Share Program.

      1.108 "Time-Share Program Management Agreement Assignment": a written
assignment to be executed and delivered to Lender (and thereafter re-delivered
as appropriate) by Borrower or any Affiliate of Borrower if any of them is the
Time-Share Program Manager and granting to Lender in order to facilitate
Performance of the Obligations, subject only to the Permitted Encumbrances, a
perfected, direct, first and exclusive assignment of the applicable Time-Share
Management Agreement, as it may be from time to time renewed, amended, replaced
or restated.

      1.109 " Time-Share Program Manager": the person from time to time employed
by the Time-Share Association to manage the Time-Share Program.

      1.110 "Time-Share Program Consumer Documents": the Purchase Contract,
Instrument, Purchaser Security Document, deed of conveyance, credit application,
credit disclosures, rescission right notices, final subdivision public reports/
prospectuses/public offering statements, receipt for public report, exchange
affiliation agreement and other documents used or to be used by Borrower in
connection with the sale of Real Property Time-Share Interests.

      1.111 Title Insurer (Borrower's Mortgage)": a title company which is
acceptable to Lender and issues the Title Policy (Borrower's Mortgage).

      1.112 "Title Policy (Borrower's Mortgage)": whether one or more, an ALTA
lender's policy of title insurance in an amount not less than the sum of the
Maximum Amount and any deferred portion of the Loan Fee, insuring Lender's
interest in the Borrower's Mortgage as a perfected, direct, first and exclusive
lien on the Time-Share Interest(s) encumbered thereby, subject only to the
Permitted Encumbrances, issued by Title Insurer (Borrower's Mortgage) and in
form and substance acceptable to Lender.

      1.113 "Uncovered Cost of the Construction Work Phase": with respect to a
Construction Work Phase, the amount equal to the excess (if any) of (a) the
remaining unpaid cost of Completion of the Construction Work Phase over (b) the
undisbursed portion of the Loan committed with respect to such Construction Work
Phase and the remaining balance of any Required Completion Assurance Deposits
(Construction) held by Lender with respect to such Construction Work Phase.

      1.114 "Uncovered Cost of the Construction Work": at any time, the sum of
the Uncovered Cost of the Construction Work for all committed Construction Work
Phases.

      1.115 "Unit": a dwelling unit at the Real Property.

      1.116 "VOP": the meaning given to it in the Time-Share Program Governing
Documents approved by Lender.

2. LOAN COMMITMENT; USE OF PROCEEDS

      2.1 (a) Loan Commitment; Determination of Advance Amounts. Lender hereby
agrees, if Borrower


                                      -8-
<PAGE>

has Performed all of the Obligations then due, to make Loan Advances to Borrower
in accordance with the terms and conditions of this Agreement for the purposes
specified in paragraph 2.1(a). The Acquisition Refinancing Component Advance
shall be in an amount not to exceed the Maximum Acquisition Refinancing
Component Amount. Subject to the provisions of paragraph 4.8, the amount of each
Interest Reserve Advance shall be in the amount of interest then accrued and
unpaid on the portion of the Loan for which payment of interest is allocated
within the applicable Construction Budget. The amount of each Construction
Work-Related Advance shall be equal to the costs of the work covered by the
applicable Construction Work-Related Advance Request and allocated within the
applicable Construction Budget for payment out of the Loan less an amount equal
to the sum of (a) an amount ("Basic Retainage") equal to the percentage
identified in the Schedule as the Basic Retainage Percentage times the hard
costs of such work and (b) any additional retainage in excess of the amount of
the Basic Retainage required under the applicable Construction Work Contract(s);
provided, however, that Construction Work-Related Advances shall not be made for
stored or ordered materials not yet incorporated into the Construction
Improvements unless such materials are: (1) owned by the Borrower; (2) kept in a
secured, insured and covered facility; and (3) certified as to the foregoing by
Lender's Inspector. The Basic Retainage for a Construction Work Phase shall be
disbursed at the time of Substantial Completion of the Construction Work Phase
to the extent Construction Work Contractor(s) are then entitled to it under the
applicable Construction Work Contract(s) between Borrower and such Construction
Work Contractor(s), subject to Lender's right to keep such portion of such Basic
Retainage as it may reasonably determine to be necessary to ensure Completion of
the Construction Work Phase. Lender shall have no obligation to make any
Construction Work-Related Advance with respect to a Construction Work Phase if,
after giving effect to such Advance, the cost of Completion of the Construction
Work Phase exceeds the sum of (i) remaining undisbursed balance of the
Construction Component allocated to the Construction Work Phase and (ii) all
Required Completion Assurance Deposits (Construction) held with respect to such
Construction Work Phase. Lender shall have no obligation to make any Loan
Advance if, after giving effect to such Advance, the sum of (i) the unpaid
principal balance of the Loan, (ii) the committed and undisbursed balance of the
Loan, and (C) the Uncovered Cost of the Construction Work exceeds the Maximum
Loan Amount. Construction Work-Related Advances shall include an Advance to
reimburse Borrower, upon satisfaction of all conditions precedent hereunder, for
construction expenses already incurred on the Real Property, but in an amount
both consistent with the Construction Budget, as approved, and as otherwise
approved by the Lender's Inspector.

            (b) General Commitment. Lender shall have no obligation to make an
Advance if, after giving effect to such Advance, the sum of (i) aggregate unpaid
principal balances of the Loans, (ii) the committed and undisbursed portion of
the Loan and (iii) the Uncovered Cost of the Construction Work would exceed the
Maximum Loan Amount.

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

      2.3 Advances. Borrower will use the Acquisition Refinancing Advance only
for the Approved Acquisition Refinancing Component Uses. Borrower will use
Construction Work-Related Advances only to pay or reimburse Borrower for the
line-item expenses shown in the applicable Construction Budgets as being paid
out of the Loan. If the amount needed by Borrower for any line-item expense set
forth in the Construction Budget for a Construction Work Phase is less than the
amount of the line-item expense budgeted to be paid out of the Loan, such excess
may be re-allocated to other line items in such Construction Budget or, at
Lender's option, to the contingency line-item in such Construction Budget as
approved by Lender in writing, such approval not to be unreasonably withheld so
long as at the time of such requested re-allocation, (i) no Event of Default
exists, (ii) Borrower has executed such modifications to the Documents as Lender
may require in connection therewith, and (iii) the line-item has been fully bid,
the savings in such line-item is supported by bid, Lender's Inspector has
concurred that savings in the line-item exists and such Construction Budget is
amended accordingly.

      2.4 Interest. Except as otherwise provided in the Notes or this Agreement,
interest ("Basic Interest") shall accrue on the unpaid principal balance of a
Loan from time to time outstanding at the applicable Basic Interest Rate. Basic
Interest shall be calculated on the basis of the actual number of days elapsed
during the period for which interest is being charged predicated on a year
consisting of three hundred sixty (360) days. Payments of principal, Basic
Interest and any other amounts due and payable under the Documents shall


                                      -9-
<PAGE>

earn interest after they are due at the Default Rate. At the option of Lender,
while an Event of Default exists, Basic Interest shall accrue at the Default
Rate.

      2.5 Minimum Required Payments.

            (a) Interest Payments. Commencing on the last Business Day of the
calendar month in which the initial Advance is made or on the last Business Day
of each succeeding month thereafter until the Maturity Date or the date on which
the Loan is paid in full, whichever is earlier, Borrower will pay to Lender in
arrears accrued and unpaid interest on the Loan.

            (b) Scheduled Minimum Principal Payments. On the first through
fourth anniversaries of the initial Advance, Borrower will make a principal
payment on the Loan which when aggregated with all principal payments previously
made is not less than an amount determined in accordance with the schedule
identified in the Schedule as the Minimum Principal Payments Schedule.

            (c) Maturity Date Payment. Borrower will pay to Lender on the Loan
Maturity Date the then unpaid principal balance of the Loan, together with all
accrued and unpaid interest on and other sums remaining owing in connection with
the Loan.

      2.6 Prepayment.

      (a) Prohibition of Prepayment of Receivables Loan; Receivables Loan
Prepayment Premium. Without the prior written consent of Lender, Borrower shall
not be entitled to prepay the Loan except in accordance with the terms of this
Agreement. Commencing on the Opening Prepayment Date, Borrower shall have the
option to prepay the Loan in full but not in part on any Loan Installment Date,
upon sixty (60) days prior written notice and the simultaneous payment of the
applicable Prepayment Premium.

      (b) Exceptions to Prepayment Prohibitions. Notwithstanding anything in
paragraph 2.9(a) to the contrary, principal payments scheduled under the Note
and Partial Release Fees shall not be prepayments prohibited pursuant to such
paragraph or require the payment of a Prepayment Premium:

      2.7 Application of Partial Releases; General Provisions Pertaining to
Application of Payments. Partial Release Fees shall be applied first to the
principal balance of the Loan, next to accrued and unpaid interest on the Loan,
and then to all other sums owing in connection with the Loan in such order or
manner as Lender may determine. Notwithstanding anything in the Documents to the
contrary other than the preceding provisions of this paragraph regarding the
application of the Partial Release Fees, the amount of all payments or amounts
received by Lender with respect to the Loan shall be applied to the extent
applicable under the Documents: (a) first, to any past due payments of interest
on the Loan and to accrued and unpaid interest on the Loan through the date of
such payment, including any default interest; (b) then, to any interest on
delinquent interest, late fees, overdue risk assessments, examination fees and
expenses, collection fees and expenses and any other fees and expenses due to
Lender under the Documents in connection with the Loan; and (c) last, the
remaining balance, if any, to the unpaid principal balance of the Loan;
provided, however, while an Event of Default or Incipient Default exists, each
payment received with respect to the Loan shall be applied to such amounts owed
to Lender by Borrower as Lender in its discretion may determine. In calculating
interest and applying payments to a Loan as set forth above: (a) interest on the
Loan shall be calculated and collected through the date payment is actually
received by Lender; (b) interest on the outstanding balance of the Loan shall be
charged during any grace period permitted under the Documents; (c) on each
annual anniversary of the initial Advance of the Loan, all past due interest and
other past due charges provided for under the Documents with respect to the Loan
shall be added to the principal balance of the Loan; and (d) to the extent that
Borrower makes a payment or Lender receives any payment or proceeds of the
Collateral for Borrower's benefit that is subsequently invalidated, set aside or
required to be repaid to any other person or entity, then, to such extent, the
Obligations in connection with the Loan intended to be satisfied therefrom shall
be revived and continue as if such payment or proceeds had not been received by
Lender and Lender may adjust the Loan balance as Lender, in its discretion,
deems appropriate under the circumstances. The provisions of this paragraph are
also subject to the parties rights and obligations under the Documents as to the
application of proceeds of the Collateral following an Event of Default.

      2.8 Loan Fee. The Loan Fee is earned and shall be payable upon execution
of this Agreement; provided, the Loan Fee shall be deducted by Lender out of the
first Advance to the Borrower.

3. SECURITY.

      3.1 Maintenance of Security. Borrower will deliver or cause to be
delivered to Lender and will


                                      -10-
<PAGE>

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

      3.2 Liability of Guarantors. The payment and Performance of the
Obligations shall be jointly, severally, primarily and unconditionally
guaranteed by the Required Guarantors, except as limited (if at all) by the
terms of the Schedule or the Guaranties executed by them.

      3.3 Sale and Partial Release of Time-Share Interests. Notwithstanding
anything in any of the Documents to the contrary, Borrower may enter into
Purchase Contracts with Purchasers for the sale and purchase of Time-Share
Interests only upon the terms and conditions set forth in this paragraph. The
sale shall be made in the ordinary course of Borrower's business in a bona fide
transaction when no Event of Default exists; the sale shall comply with all
applicable Legal Requirements; the sale price for the Time-Share Interest shall
be at least equal to the amount set forth in a written schedule of minimum sales
prices for Time-Share Interests prepared by Borrower and approved by Lender,
such approval not to be unreasonably withheld; and the Purchase Contract shall
close through the Purchase Contracts Escrow and result in the payment of the
applicable Partial Release Fee. Borrower shall be entitled to close a Purchase
Contract for the sale and purchase of a Time-Share Interest and have such
Time-Share Interest covered by such Purchase Contract released from the
Borrower's Mortgage only upon satisfaction of the following conditions: (a) the
sale satisfies the criteria set forth in the preceding sentence; (b) the
Time-Share Interest has been legally created and Borrower has obtained all
Minimum Required Time-Share Approvals with respect to its sale; (c) Borrower has
paid all recording and escrow fees incurred in connection with the partial
releases; (d) Lender has received at least five (5) Business Days prior to the
requested release (i) a written request from Borrower certifying to Lender that
the sale and partial release satisfy the criteria set forth in this paragraph at
least five (5) Business Days prior to the date of the requested release, and
(ii) a completed partial release document in recordable form and otherwise
satisfactory to Lender; and Lender has received the following amounts: (i) the
applicable Partial Release Fee, (ii) all its out-of-pocket expenses incurred in
connection with the partial release, (iii) if required by Lender, a payment of
accrued and unpaid Basic Interest on a principal portion of the Loan in the
amount of the Partial Release Fee, and (iv) if an Event of Default exists, any
remaining proceeds from the sale of the Time-Share Interest. If a partial
release of a Time-Share Interest is executed by Lender and recorded in the real
estate records where the Borrower's Mortgage is recorded and Lender receives the
payment of any applicable Partial Release Fee, there shall ipso facto be
released from the other Borrower's Security Documents: (a) so long as no Event
of Default then exists, any Purchase Contract for the sale of such Time-Share
Interest, any and all instruments, chattel paper and general intangibles
evidencing or representing purchase money indebtedness owing to Borrower in
connection with the sale of such Time-Share Interest, and any and all proceeds
paid or payable thereunder; (b) any tangible Personal Property appurtenant to
such Time-Share Interest; and (c) any other property expressly described in the
recorded partial release.

      3.4 Other Developmental Matters Affecting Security. If Borrower desires
Lender to give its consent to or take any other action concerning a matter
affecting the zoning, platting, development or sale of or title to any of the
Real Property, it shall comply with the procedures set forth in Exhibit D. The
provisions of the preceding sentence shall not apply to Borrower's desire to
obtain partial releases or to obtain Advances, the procedures for which are set
forth elsewhere in this Agreement.

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

      4.1 Delivery of Documents and Due Diligence Items Prior to Initial Advance
Under Agreement. Lender's obligation to make the initial Advance under this
Agreement shall be subject to and conditioned upon the terms and conditions set
forth in the following subparagraphs and elsewhere in this Agreement having been
satisfied in Lender's judgment:

            (a) Documents. Borrower shall have delivered to Lender the following
Documents, duly executed, delivered and in form and substance satisfactory to
Lender, not later than the Required Closing Date:

                  (i) this Agreement;

                  (ii) the Note in form and substance identical to Exhibit D;


                                      -11-
<PAGE>

                  (iii) Guaranties from the Required Guarantors in form and
substance identical to Exhibit E;

                  (iv) the Subordination Agreements from the persons required to
subordinate indebtedness owed to them by Borrower to this Agreement pursuant to
paragraph 6.1(e);

                  (v) the Environmental Certificate;

                  (vi) the Borrower's Mortgage;

                  (vii) the Borrower's Assignments;

                  (viii) the Borrower's Security Agreements;

                  (ix) the Borrower's Security Documents not listed above;

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

                  (xi) a Certificate of Borrower Regarding Consumer and Project
Documents in form and substance identical to Exhibit F;

                  (xii) the Title Policy (Borrower's Mortgage);

                  (xiii) a favorable opinion or opinions from independent
counsel for Borrower, which counsel shall be satisfactory to Lender and which
opinion shall cover such matters as Lender may require, including, without
limitation, the Minimum Opinion Matters pertaining to Borrower and the
Time-Share Program;

                  (xiv) a favorable opinion or opinions from independent counsel
for the Required Guarantors and (if any) other sureties for the Performance of
the Obligations, which counsel shall be satisfactory to Lender and which opinion
shall cover such matters as Lender may require, including, without limitation,
the Minimum Opinion Matters pertaining to such persons;

                  (xv) the Third Party Consents; and

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

            (b) Organizational, Time-Share Program and Other Due Diligence
Documents. Borrower shall have delivered to Lender the following items, in form
and substance satisfactory to Lender, at least ten (10) Business Days (unless a
longer period is expressly specified) prior to the earlier of (a) the date of
the initial Advance or (b) the Required Closing Date:

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

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

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

                  (iv) at least fifteen (15) Business Days prior to the date of
the Advance, a Phase I environmental assessment of and hazardous materials
report for the Real Property;

                  (v) evidence that all taxes and assessments on the Real
Property have been paid;

                  (vi) such evidence as Lender may reasonably require that
Borrower has good and marketable title to the Real Property and that there is no
condition of title which would interfere with the time-share and other intended
uses of the Real Property, together with a commitment or preliminary title
report for the issuance of the Title Policy (Borrower's Mortgage) and copies of
all documents referred to therein, and a closing protection letter issued to
Lender with respect to the issuing title agent by the Title Insurer (Borrower's
Mortgage);


                                      -12-
<PAGE>

                  (vii) 1992 ALTA/ ACSM survey maps of the Real Property
prepared by a licensed land surveyor acceptable to Lender, certified to Lender
in writing and showing the Real Property, evidence of access to the Real
Property, all easements necessary for the operation and use of the Real Property
for time-share and other intended purposes, and such other details as Lender may
reasonably require; a condominium map for the Real Property;

                  (viii) all licenses and certificates (exclusive of the Minimum
Required Time-Share Approvals and licenses and certificates which are dependent
upon the construction or making of any Construction Improvements), for the
time-share and other intended uses of the Real Property, including environmental
permits;

                  (ix) evidence the Real Property are zoned for time-share and
other intended uses and that all approvals under applicable Legal Requirements,
exclusive of approvals which are dependent upon the construction or making of
any Construction Improvements, have been obtained for such uses;

                  (x) the Minimum Required Time-Share Approvals or evidence that
Borrower will be able to obtain them by the date identified in the Schedule as
the Minimum Required Time-Share Approvals Delivery Date;

                  (xi) a copy of the Time-Share Program Consumer Documents and
the Time-Share Program Governing Documents;

                  (xii) the Insurance Policies;

                  (xiii) evidence that the Real Property is not located within a
flood prone area or, if within a flood zone, evidence that flood insurance has
been obtained;

                  (xiv) evidence of the current and assumed continued
availability of utilities necessary to serve the Real Property for time-share
and other intended uses;

                  (xv) evidence of legal access to and parking for the Real
Property adequate for time-share and other intended uses;

                  (xvi) to the extent such agreements have been entered into, a
copy of all marketing contracts, management contracts, service contracts,
operating agreements, equipment leases, space leases and other agreements
pertaining to the Real Property, or which are necessary for the operation and
time-share and other intended uses of the Real Property and the sale of
Time-Share Interests and are not otherwise required pursuant to another item in
this paragraph;

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

                  (xviii) the actual or pro-forma operating budgets for the
Time-Share Association;

                  (xix) the financial statements identified in the Schedule as
the Financial Statements Required For Closing;

                  (xx) a fully executed tax service contract;

                  (xxi) at least fifteen (15) Business Days prior to such
Advance, a completed Year 2000 questionnaire in the form submitted by Lender to
Borrower;

                  (xxii) all grading permits, foundation permits, building
permits, environmental permits, and other permits, licenses, approvals and
certificates for the construction of the Construction Improvements and the use
and operation (exclusive of the Minimum Required Time-Share Approvals or
certificates of occupancy or other licenses and certificates dependent upon
completion of construction of the Construction Improvements) of the Construction
Improvements and Real Property, for time-share and other intended uses,
including any necessary architectural committee approvals;

                  (xxiii) a soils test report with respect to the suitability of
the soils on the Real Property for purposes of constructing the Construction
Improvements;


                                      -13-
<PAGE>

                  (xxiv) if required by Lender in writing, a flood and drainage
study with respect to the Real Property and the Construction Improvements;

                  (xxv) such certificates as Lender may require from the
Architect/Engineer regarding the adequacy of the Plans and Specifications
(including, without limitation, their compliance with the Americans With
Disabilities Act and all other Legal Requirements) and the Construction Budget
for the Construction Work and such other matters as Lender may deem pertinent;

                  (xxvi) a detailed draw schedule for all Advances;

                  (xxvii) the Work Progress Schedule for the Construction Work
complete in all respects (subject only to Lender's Approval);

                  (xxviii) a guaranteed maximum price Construction Contract
necessary for Completion of the Construction Work between Borrower and all
Contractors; and such certificates as Lender may request from the Contractors
regarding the adequacy of the Construction and such other matters as Lender may
reasonably deem appropriate; all information as Lender may reasonably require
regarding the Contractor, (which, among other things, shall consist of financial
statements for the last two years, federal employer tax identification numbers,
a Dun & Bradstreet report, verification with the applicable State Registrar of
Contractors or equivalent regulatory body and independent verification that each
such Contractor has successfully and regularly completed Work of the scope,
quality and dimension as stated in the applicable Construction Contract);
completion and performance bonds or, if approved by Lender, completion
guarantees, in all events acceptable to Lender in style and content;

                  (xxix) the report of Lender's Inspector with respect to the
Construction Budgets, Plans and Specifications, Contracts, Work Progress
Schedules , and other construction-related items; and (xxx) such other items as
Lender requests which are reasonably necessary to evaluate the request for the
Advance and the satisfaction of the conditions precedent to the Advance.

            (c) Credit Reports; Search Reports; Site Inspections. Lender shall
have received, in form and substance satisfactory to Lender, the results of UCC
searches with respect to Borrower, the Required Guarantors and the Time-Share
Associations and such additional persons as Lender may reasonably require, and
lien, litigation, judgment and bankruptcy searches for Borrower, the Required
Guarantors, the Time-Share Associations and such additional persons as Lender
may reasonably require, conducted in such jurisdictions as Lender deems
appropriate and having a currency meeting Lender's requirements.

      4.2 Additional Conditions Precedent for Work-Related Advances. For each
Work-Related Advance, other than an Interest Reserve Advance, Lender's
obligation to make such Advance shall be subject to the terms and conditions set
forth in Exhibit A.

      4.3 General Conditions Precedent to All Advances. Lender's obligation to
fund any Advance is subject to and conditioned upon the additional terms and
conditions set forth in the following subparagraphs being satisfied at the time
of such Advance:

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

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

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

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

            (e) Borrower shall have paid to Lender all fees, if any, which are
required to be paid at or prior to the time of the Advance.

      4.4 Conditions Satisfied at Borrower's Expense. The conditions to Advances
shall be satisfied by Borrower at its expense.

      4.5 Minimum Amount and Maximum Frequency of Advances. Advances shall be
made in


                                      -14-
<PAGE>

amounts not less than the amounts identified in the Schedule as the Minimum
Advance Amount. Advances shall be made no more frequently in any calendar month
than the frequency identified in the Schedule as the Maximum Advance Frequency
(Loan).

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

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

      4.8 Interest Reserve Advances. If neither an Event of Default nor an
Incipient Default exists during the Borrowing Term and, in Lender's discretion,
after expiration of the Borrowing Term to the extent that the Interest Reserve
Fund has not been exhausted, Lender will charge the Interest Reserve Fund until
it has been exhausted for monthly interest billings on the Loan. If the Interest
Reserve Fund is exhausted or is otherwise not available for such use, Borrower
will pay to Lender the monthly installments of interest on the Note in
accordance with the terms of such Note.

5.    BORROWER'S REPRESENTATIONS AND WARRANTIES

      Except as may be expressly otherwise provided in the Schedule, Borrower
makes to Lender the representations and warranties set forth in this Article 5:

      5.1 Good Standing. Borrower is and duly organized, validly existing and in
good standing as a business organization of the type identified in the Schedule
as Borrower's Type of Business Organization under the laws of the state
identified in the Schedule as Borrowers's State of Organization and is in good
standing and authorized to do business in each jurisdiction where the location
or nature of its properties (including, without limitation, the Collateral) or
its business makes such good standing and qualification necessary. Borrower has
full power and authority to carry on its business and own its property.

      5.2 Power and Authority; Enforceability. Borrower has full power and
authority to execute and deliver the Documents and to Perform the Obligations.
All action necessary and required by Borrower's Articles of Organization and all
other Legal Requirements for Borrower to obtain the Receivables Loan, to execute
and deliver the Documents which have been or will be executed and delivered in
connection with the Documents and to Perform the Obligations has been duly and
effectively taken. The Documents are and, to Borrower's knowledge, shall be,
legal, valid, binding and enforceable against Borrower; and neither the
Documents nor Borrower's Performance under the Documents violate or will violate
the Applicable Usury Law or constitute or will constitute a default or result in
the imposition of a lien under the terms or provisions of any agreement to which
Borrower is a party. Except for the Third Party Consents delivered pursuant to
Article 4 and the consents evidenced by the Resolutions delivered pursuant to
Article 4, no consent of any governmental agency or any other person not a party
to this Agreement is or will be required as a condition to the execution,
delivery or enforceability of the Documents.

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

      5.4 No Litigation. There is no action, litigation or other proceeding
pending or, to Borrower's knowledge, threatened before any arbitration tribunal,
court, governmental agency or administrative body against Borrower, which might
materially adversely affect the Time-Share Program, the Real Property, the
Collateral, the business or financial condition of Borrower, or the ability of
Borrower to Perform the Obligations. Borrower will promptly notify Lender if any
such action, litigation or proceeding is commenced or threatened.


                                      -15-
<PAGE>

      5.5 Compliance with Legal Requirements. Borrower has complied with all
Legal Requirements in all material respects, including, without limitation, all
Legal Requirements of the state in which the Real Property is located and all
other governmental jurisdictions in which Time-Share Interests have been sold or
offered for sale.

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

      5.7 No Default for Third Party Obligations. Borrower is not in default
under any other agreement evidencing, guaranteeing or securing borrowed money or
a receivables purchase financing or in violation of or in default under any
material term in any other material agreement, instrument, order, decree or
judgment of any court, arbitration or governmental authority to which it is a
party or by which it is bound.

      5.8 Payment of Taxes and Other Impositions. Borrower has filed all tax
returns and, subject to the provisions of paragraph 9.20, has paid all
Impositions, if any, required to be filed by it or paid by it, including real
estate taxes and assessments relating to the Collateral.

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

      5.10 Time-Share Interest Not a Security. Borrower has not sold or offered
for sale any Time-Share Interest as an investment. Neither the sale nor the
offering for sale of any Time-Share Interest will constitute the sale or the
offering for sale of a security under any applicable law.

      5.11 Zoning Compliance. Neither time-share use nor other transient use and
occupancy of the Real Property for time-share and other intended uses violates
or constitutes or will violate or constitute a non-conforming use or require a
variance under any private covenant or restriction or any zoning, use or similar
law, ordinance or regulation affecting the use or occupancy of the Real
Property.

      5.12 Association; Assessments and Reserves. When a Purchaser closes the
purchase of a Time-Share Interest, such Purchaser automatically becomes a member
of the Time-Share Association. The Purchaser will thereafter remain a member of
such Time-Share Association(s) and be entitled to vote on the affairs thereof,
subject only to retaining ownership of a Time-Share Interest in the Real
Property Interest. Borrower warrants that, from and after the date of this
Agreement:

            (a) The applicable Time-Share Association will have authority to
levy annual assessments to cover the costs of maintaining and operating the
Time-Share Program for the Real Property;

            (b) the Time-Share Association will be solvent;

            (c) levied assessments will be adequate to cover the then current
costs of maintaining and operating the Real Property and to establish and
maintain a reasonable reserve for capital improvements; and

            (d) there will be no events which could give rise to a material
increase in such costs, except for additions of subsequent phases of the Real
Property that will not materially increase assessments.

      5.13 Title to and Maintenance of Common Areas and Amenities. Except as
otherwise permitted and disclosed by the Time-Share Program Governing Documents,
from and after the Association and Assessment Compliance Date for the Real
Property: (a) the Time-Share Association or the owners of Real Property
Time-Share Interests in common will at all times own the furnishings in the
Units and all the common areas in the Real Property and other amenities which
have been promised or represented as being available to Purchasers, free and
clear of liens and security interests except for the Permitted Encumbrances; (b)
no part of the Real Property is or will be subject to partition by the owners of
Time-Share Interests; and (c) all access roads and utilities and off-site
improvements necessary to the use of the Real Property will have been dedicated
to and/or accepted by the responsible governmental authority or utility company
or are owned by an association of owners of property in a larger planned
development or developments of which the Real Property is a part.


                                      -16-
<PAGE>

      5.14 Survival and Additional Representations and Warranties. The
representations and warranties and contained in this Article 5 are in addition
to, and not in derogation of, the representations and warranties contained
elsewhere in the Documents and shall be deemed to be made and reaffirmed prior
to the making of each Advance.

      5.15 Construction Representations and Warranties. The following
representations and warranties are made with respect to each Construction Work
Phase for which Borrower has requested a Construction Work-Related Advance:

            (a) Adequacy of Principal Work-Related Items. The Principal
Work-Related Items which have been delivered to Lender for a Construction Work
Phase are adequate (or will be adequate at the time required to be delivered to
Lender pursuant to this Agreement) and will continue at all times to be adequate
for Completion of the Construction Work Phase. All Principal Work-Related Items
for a Construction Work Phase delivered to Lender are in full force and effect;
no third party bound thereby is in default of its obligations thereunder or has
threatened to terminate Borrower's rights thereunder; Borrower has paid all sums
and performed all other obligations it has under them; and no third party bound
thereby has any defense to the enforcement of Borrower's rights thereunder.
Except as disclosed to Lender in writing, no moratorium or other legal
impediment exists or, to the knowledge of Borrower, is threatened with respect
to the issuance of any permit or approval necessary to use the Construction
Improvements for time-share and other intended purposes upon Completion of the
Construction Work.

            (b) Adequacy of Construction Budget. Borrower will cause the
Construction Budget for the Construction Work and the Construction Budget for
each Construction Work Phase to accurately and completely set forth the types
and estimated maximum amounts of all costs which must be incurred for Completion
of the Construction Work or Completion of the Work Phase, as the case may be, to
occur.

            (c) Adequacy of Streets and Utilities. All streets, easements, and
utilities (including potable water, storm and sanitary sewer, gas, electric,
telephone and cable television facilities and garbage removal) necessary for the
Completion of the Construction Work and use of the Real Property for time-share
purposes have been completed, paid for in full and are available at the
boundaries of the Real Property. All water and sewer treatment plants and power
generation facilities intended to serve the Construction Improvements have been
constructed and are operational; and upon Completion of the Construction Work,
will have adequate capacity and size to serve the time-share and other intended
uses of the Construction Improvements.

            (d) Status of Work; Break in Priority. No work, equipment, materials
or services of any kind that may give rise to any mechanics or similar statutory
lien (whether for work performed prior to or after recordation of the Borrower's
Mortgage) which will have priority over the lien of the Borrower's Mortgage,
including, without limitation, the destruction or removal of existing related
Improvements, site work, cleaning, curbing, draining or fencing of the Real
Property, has been or will be performed or commenced on the Real Property prior
to recordation of the Borrower's Mortgage unless Lender has waived such
condition in its discretion. As a condition precedent to any such waiver, such
work, equipment, materials, services or work of any kind has been performed or
provided with respect to the Real Property that may give rise to any mechanics
or similar statutory lien which will have priority to the lien of the Borrower's
Mortgage (including, without limitation, the destruction or removal of existing
Improvements, site work, clearing, grubbing, draining or fencing of the Real
Property); such work, equipment, materials and services must be fully disclosed
in writing to Lender and Title Insurer (Borrower's Mortgage) prior to
recordation of the Borrower's Mortgage, such work, equipment, materials and
services must be satisfactory to Lender and Lender's Inspector; and Title
Insurer (Borrower's Mortgage) must insure the priority of the Borrower's
Mortgage over all such liens.

6. BORROWER'S COVENANTS

      6.1 Borrower's Affirmative Covenants.

      Except as may be expressly otherwise provided in the Schedule, Borrower
gives to Lender the covenants and agreements set forth below in this paragraphs
6.1:

            (a) Good Standing. Borrower will maintain in good standing its
existence as a business organization of the type identified in the Schedule as
Borrower's Type of Business Organization under the laws of the state identified
in the Schedule as Borrower's State of Organization and remain in good standing
and authorized to do business in the jurisdiction where the Real Property and
Component Sites are located and in each jurisdictions where Borrower is then
selling Time-Share Interests or where


                                      -17-
<PAGE>

at any time the location or nature of its properties or its business then makes
such good standing and qualification necessary. Borrower will maintain full
authority to Perform the Obligations and to carry on its business and own its
property.

            (b) Compliance with Legal Requirements. Borrower will comply with
all Legal Requirements in all material respects, including, without limitation,
all Legal Requirements of the jurisdictions in which the Real Property and
Component Sites are located and all other jurisdictions in which Time-Share
Interests will be sold or offered for sale.

            (c) Insurance. Borrower will pay the cost of and will maintain and
deliver to Lender evidence of insurance policies required by Lender which cover
such risks, are written by insurers and are in amounts and on forms satisfactory
to Lender. Borrower will exercise all voting and approval rights under the
Time-Share Program Governing Documents regarding the use of casualty and
condemnation proceeds and the repair and restoration of the Component Sites as
directed by Lender in writing.

            (d) Reports.

                  (i) Financial Information. Borrower will furnish or cause to
be furnished to Lender, within one hundred twenty (120) days after the end of
each fiscal year of the subject, a copy of the financial statements for such
fiscal year of Borrower, each Guarantor and, subject to the best efforts of
Borrower, the Time-Share Associations; and will furnish or cause to be furnished
to Lender within forty-five (45) days after the end of each quarterly fiscal
period of the subject, a copy of the current financial statements of Borrower
and Guarantor, subject to the best efforts of Borrower, the Time-Share
Associations, for the period beginning on the first day of the fiscal year and
concluding on such quarter end. Such financial statements shall contain a
balance sheet as of the end of the relevant fiscal period and statements of
income and of cash flow for such fiscal period (together, in each case, with the
comparable figures for the corresponding period of the previous fiscal year),
all in reasonable detail. All financial statements shall be prepared in
accordance with generally accepted accounting principles, consistently applied.
All financial statements of Borrower, any Guarantor which is not a natural
person, and the Time-Share Associations shall be certified by the chief
financial officer of such entity. Annual statements of Borrower and the
Guarantor shall be audited, certified by a recognized firm of certified public
accountants reasonably satisfactory to Lender, and accompanied by the auditor's
work papers. Annual statements of Guarantors who are natural persons shall be
certified by such person. Together with such financial statements, Borrower will
deliver to Lender a certificate signed by Borrower's chief operating officer and
chief financial officer stating that there exists no Event of Default or
Incipient Default or, if any such Event of Default or Incipient Default exists,
specifying the nature and period of its existence and what action Borrower
proposes to take with respect to it and will cause the Guarantor to deliver a
certificate, as required below. Such certificate shall state specifically that
Borrower is in compliance with paragraphs 2.7(b) (with respect to sales of
Time-Share Interests closed during the period covered by the financial
statements required to accompany the certificate), 6.1(c), 6.1(e), 6.2(b) and
6.2(c) and such other paragraphs as may be specified in the Schedule or
elsewhere in this Agreement. The certificate of the Guarantor must certify as to
the Net Worth stated in paragraph S.5(a) of the Schedule. For purposes of this
paragraph, in the case of a partnership or limited liability company, "chief
operating officer" of an entity shall mean the general partner, member or
manager having primary responsibility for the operations of such entity; and
"chief financial officer" of such an entity shall mean the general partner,
member or manager having primary responsibility for the finances of such entity.

                  (ii) Litigation. Borrower will promptly notify Lender if any
action, litigation or other proceeding becomes pending or, to Borrower's
knowledge, threatened before any arbitration tribunal, court, governmental
agency or administrative body against Borrower, which might materially adversely
affect the Time-Share Program, the Real Property, the Collateral, the business
or financial condition of Borrower, or the ability of Borrower to Perform the
Obligations.

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

                  (iv) Sales Information and Proposed Changes to Time-Share
Program Consumer Documents and Time-Share Program Governing Documents. Borrower
will deliver current price lists for Time-Share Interests to Lender from to time
to time within ten (10) Business Days after receipt of a written request from
Lender to do so. Borrower


                                      -18-
<PAGE>

will deliver to Lender from time to time, as available and promptly upon
amendment or effective date, sales literature, registrations/consents to sell,
and final subdivision public reports/public offering statements/prospectuses.
Borrower will deliver to Lender any changes which Borrower proposes or any other
person having the power to do so proposes be made to the Time-Share Program
Consumer Documents and/or the Time-Share Program Governing Documents last
delivered to Lender, together with a description and explanation of the changes;
and other items requested by Lender which relate to the Time-Share Interests.

                  (v) Right to Inspect. Borrower will at its expense permit
Lender and its representatives at all reasonable times and upon not less than
one (1) Business Day's notice to inspect the Collateral and to inspect, audit
and copy Borrower's books and records.

                  (vi) Time-Share Association Budgets. Borrower will submit to
Lender within ten (10) days after each is available, proposed annual maintenance
and operating budgets of the Time-Share Associations, certified to be adequate
by the respective Time-Share Program Managers (or if there is not a Time-Share
Program Manager for a Time Share Association, by an authorized officer of such
Time-Share Association) and a statement of the annual assessment to be levied
upon the owners of Time-Share Interests; and will use its best efforts to cause
to be made available to Lender, upon Lender's request, for inspection, auditing
and copying, as appropriate, the Real Property and the books and records of the
Time-Share Associations.

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

                  (viii) Time-Share Program VOP Audits. Borrower will deliver to
Lender within forty-five (45) days after the end of each calendar quarter an
audit verifying the total VOP in the Vacation Club, balancing the VOP sold
against the VOP available in the Vacation Club and reconciling the Partial
Release Fees paid during such quarter against VOP sold during such quarter,
certified by a recognized firm of certified public accountants reasonably
satisfactory to Lender, and Borrower will use its best efforts to provide the
auditor's work papers to Lender. Lender or its designee may, at Borrower's
expense, audit the system of Vacation Club Association, Vacation Club Trustee,
and Borrower utilized in tracking the cumulative number of VOP values
represented by the Vacation Club Units and the cumulative number of VOP
represented by Purchase Contracts which have not expired or been terminated.

            (e) Subordination of Indebtedness Owing to Affiliates. Borrower will
cause any and all indebtedness owing by it to its shareholders, directors,
officers, partners, members or managers, as the case may be, to Guarantors, or
to the relatives or Affiliates of Borrower or any of the foregoing, and all
liens, security interests and other charges on the assets of Borrower to be
fully subordinated in all aspects to the Loan Obligations pursuant to written
agreements satisfactory to Lender; provided, however, that if neither an Event
of Default nor an Incipient Default then exists or will exist after giving
effect to such payment, such subordination shall not extend to (i) reasonable
salaries and fees at normal and customary rates for services actually rendered
so long as the payment of such salaries and fees is not prohibited or otherwise
limited pursuant to any provision set forth in the Schedule and (ii) payments
expressly permitted pursuant to the terms of this Agreement.

            (f) Payment of Taxes and Other Impositions on Collateral. Subject to
the provisions of paragraph 9.20, Borrower will file all tax returns and will
pay all Impositions, if any, required to be filed by it or paid by it, including
real estate taxes and assessments relating to the Collateral and the Borrower
will use best efforts to cause all Time-Share Associations to file all tax
returns and to pay all Impositions, if any, required to be filed or paid by them
with respect to their respective properties and the Real Property. Not more than
thirty (30) days after Impositions required to be paid pursuant to the preceding
sentence become delinquent, Borrower will provide to Lender evidence that all
such Impositions on the Collateral and the Real Property have been paid in full.

            (g) Payment of Impositions Imposed on Lender. Borrower will promptly
pay upon demand all Impositions imposed upon Lender by any state of the United
States or political subdivision thereof or the United States by reason of the
Documents, the Collateral and/or any sale, rental, use, delivery or transfer of
title to the Collateral, other than any tax measured by net income payable by
Borrower


                                      -19-
<PAGE>

to any state of the United States or political subdivision thereof or to the
United States of America under Section 11 or 1201 of the Internal Revenue Code,
as amended, in consequence of the receipt of payments provided for in the
Documents. If it is unlawful for Borrower to pay such Impositions, Borrower
shall not be required to pay such Impositions; but Lender may demand payment of
such additional amount as is necessary to maintain Lender's yields on the Loans
subject to the Impositions in either a single payment or at Lender's option, in
installment payments, and Borrower will pay such amount upon demand. If it is
unlawful to pay such additional amount, Borrower shall not be required to pay
it; but Lender may demand immediate payment of the Obligations subject to the
Impositions in full (together with the applicable Prepayment Premiums), and
Borrower will pay such Obligations in full within sixty (60) days after such
demand. If Lender has not received evidence satisfactory to it from Borrower
that such Impositions have been paid by Borrower within five (5) days after
demand was made upon Borrower to make such payment, Lender may, at its option,
pay the same, and Borrower shall immediately reimburse Lender for the sums so
expended, together with interest at the Default Rate.

            (h) Further Assurance. Borrower will execute or cause to be executed
all documents and do or cause to be done all acts necessary for Lender to
perfect or evidence and to continue the perfection of the liens and security
interests of Lender in the Collateral or otherwise to effect the intent and
purposes of the Documents.

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

            (j) Material Increases to Assessments. Borrower (i) will use its
best efforts to cause the Time-Share Associations to (A) discharge their
respective obligations under the Time-Share Program Governing Documents and (B)
maintain a reasonable reserve for capital improvements to the Component Sites
for which they have been formed; and (ii) so long as Borrower controls a
Time-Share Association, will pay to such association not less often than once
every twelve (12) months, the difference between (A) the cumulative total amount
of the maintenance and operating expenses incurred by such Time-Share
Association, together with a reasonable reserve for capital improvements and the
amount of any installment of real property taxes currently due and payable with
respect to the Real Property and related amenities, through the end of the
calendar month preceding the month in which such payment is made and (B) the
cumulative total amount of assessments payable to such Time-Share Association by
owners (other than Borrower) of Time-Share Interests who are members of such
Time-Share Association through the end of the calendar month preceding the month
in which such payment is made.

            (k) Maintenance of Real Property and Other Property. Borrower will
maintain or cause to be maintained in good condition and repair all common areas
in the Real Property and other on-site amenities which have been promised or
represented as being available to Purchasers and which are not the
responsibility of the Time-Share Associations to maintain and repair and, to the
extent owned by Borrower or an Affiliate of Borrower, all portions of
improvements in which Units are located and which are not part of the Real
Property. Borrower will maintain or cause a third party to maintain a reasonable
reserve to assure compliance with the terms of the foregoing sentence.

            (l) Maintenance of Larger Tract. To the extent any of the Real
Property is part of a larger common ownership regime or planned development or
parts of buildings in which Units are located are not part of the Real Property,
Borrower will pay its commercially reasonable share of common expenses to be
allocated between the Real Property and other property owned by Borrower.
Borrower will cause all such property which is not part of the Real Property to
be professionally managed in a first class manner.

            (m) Work-Related Affirmative Covenants. Borrower will in connection
with each Construction Work Phase:

                  (i) cause the progress of the work in each Construction Work
Place to occur in substantial compliance with the applicable Construction Work
Progress Schedule, subject to Force Majeure Events, all in accordance with the
applicable Plans and Specifications, the applicable Construction Work
Contract(s), the Documents, applicable Legal Requirements, sound construction
engineering and architectural principles and commonly accepted safety standards,
lien free and free from defective materials and workmanship; and cause
Completion of the


                                      -20-
<PAGE>

Construction Work Phase to occur on or before the applicable Required Completion
Date.

                  (ii) (A) pay when due all costs, expenses and claims
pertaining to the Construction Work Phase; (B) deliver to Lender during the
course of the Construction Work Phase in order to monitor and/or provide
assurance that the Construction Work Phase is proceeding lien free in accordance
with the applicable Plans and Specifications, the applicable Construction Work
Contract(s), the Documents, Legal Requirements, sound construction, engineering
and architectural principles and commonly accepted safety standards: bills of
sale, conveyances and paid invoices pertaining to the Construction Work Phase;
all waivers and releases of lien or claims on the Real Property and/or the
applicable Construction Improvements which Lender may determine to be necessary
or may otherwise reasonably request for its protection; from persons acceptable
to Lender, additional engineering or architectural studies and reports as Lender
or Lender's Inspector may reasonably require in connection with the Construction
Work Phase; and (C) record all notices of commencement/completion and similar
notices permitted by Legal Requirements which have the effect of shortening
periods within which mechanics and similar liens may be filed;

                  (iii) allow Lender, Lender's Inspector and/or its agents and
employees to inspect the Real Property and the Construction Work at all
reasonable times, with the costs of such inspections to be borne by Borrower;

                  (iv) deliver all applicable Principal Construction
Work-Related Items to Lender promptly after obtaining them (or at such earlier
time as may be required pursuant to Article 4);

                  (v) perform all its obligations and preserve its rights under
the applicable Principal Construction Work-Related Items and secure the
performance of the other parties to the applicable Principal Construction
Work-Related Items;

                  (vi) deliver to Lender: promptly after the pouring of a
street, material curbstone or material slab in close proximity to the property
lines of adjacent real property or the completion of construction of a
foundation for any building forming part of the applicable Construction
Improvements, a survey certified to Lender, Title Insurer (Borrower's Mortgage)
for Phase I (or Phase II, as applicable) by a licensed surveyor or engineer
acceptable to Lender (A) showing the applicable Construction Improvements and
that the location thereof is entirely within the property lines of the Real
Property and does not encroach upon, breach, or violate any set back line
easement or similar restriction and (B) meeting ALTA standards and other
reasonable requirements of Lender, Title Insurer (Borrower's Mortgage) Phase I
and Phase II, as applicable; promptly after substantial completion of the
applicable Construction Improvements, a survey certified to Lender, Title
Insurer (Borrower's Mortgage) for Phase I and Phase II, as applicable, by a
licensed surveyor or engineer acceptable to Lender, showing such Construction
Improvements "as built" and otherwise meeting the criteria of items (i)(A) and
(i)(B) of this paragraph;

                  (vii) deliver to Lender: prior to each applicable Construction
Work-Related Advance, at Lender's option, an endorsement ("date down
endorsement") issued by the Title Insurer (Borrower's Mortgage) insuring Lender
against any loss by reason of defects in, mechanic's or similar statutory liens
upon or unmarketability of the title to the Real Property, as well as insuring
that the Borrower's Mortgage, at the time of each applicable Construction
Work-Related Advance, constitutes a valid first lien upon the Real Property,
subject only to the Permitted Encumbrances; promptly after the construction of
the foundation for any building forming part of the related Improvements, an
endorsement insuring that such foundation is located on the Real Property within
all side and set-back lines and does not encroach upon any easements,
rights-of-way (public or private) or upon any adjoining landowner's property;
and promptly after substantial completion of the applicable Construction
Improvements has occurred, an endorsement insuring that the related Improvements
are located upon the Real Property within all side and set-back lines and do not
encroach upon any easements, rights-of-way (public or private) or upon any
adjoining landowner's property; and upon Completion of the Work for such
Construction Work Phase, a date down endorsement;

                  (viii) after obtaining knowledge or receiving notice thereof,
correct or cause to be corrected (A) any material defect in the work performed
in the Construction Work Phase, (B) any material departure in the completion of
the Construction Work Phase from the applicable Plans and Specifications, the
applicable Construction Work Contract(s), the Documents, any applicable Legal
Requirements, sound, construction, engineering or architectural principles or
commonly accepted safety standards or (C) any encroachment of any part of the
applicable Construction Improvements on any building


                                      -21-
<PAGE>

line, easement line or restricted area, or any adjacent landowner's property;

                  (ix) promptly deliver to Lender any and all notices received
by Borrower that it is not complying with the applicable Legal Requirements
pertaining to the Construction Work Phase or that the Construction Work Phase is
not being completed in accordance with the applicable Plans and Specifications,
the applicable Construction Work Contract(s), sound construction, engineering
and architectural principles and commonly accepted safety standards;

                  (x) if at any time there exists or appears likely to exist any
Uncovered Cost of the Construction Work Phase, Borrower will notify Lender
within fifteen (15) Business Days (and in any event prior to the next Advance)
after obtaining knowledge thereof; within the earlier of such fifteen (15)
Business Day period or fifteen (15) Business Days after Lender's demand that it
do so, Borrower will deliver to Lender a cash deposit ["Required Completion
Assurance Deposit (Construction)"] equal to the Uncovered Cost of the
Construction Work Phase; in the event of any dispute, the necessity for and
amount of the Required Completion Assurance Deposit shall be determined by
Lender; the Required Completion Assurance Deposit (Construction) may be
deposited in a non-interest-bearing account and need not be segregated from any
of Lender's other funds, provided that Lender will disburse the Required
Completion Assurance Deposit to pay and/or reimburse Borrower for the costs of
the Construction Work Phase prior to any further disbursement of the Loan for
such purpose, but subject to the terms and conditions of this Agreement
pertaining to the disbursement of the Loan; and Lender is hereby granted a
security interest in all Required Completion Assurance Deposits, together with
interest accruing thereon, from time to time held by Lender;

                  (xi) cause all materials supplied for or intended to be
utilized in the Completion of the Construction Work Phase, but previously not
affixed to or incorporated into the Construction Improvements, to be stored on
the Real Property with adequate safeguards, as reasonably required by Lender, to
prevent loss, theft, damage or commingling with other materials;

                  (xii) promptly after receipt by Borrower (but in no event
later than the applicable Required Completion Date), deliver to Lender copies of
all marketing contracts, management contracts, service contracts, operating
agreements, equipment leases and any and all other contracts, agreements,
licenses and permits (including, without limitation, certificates of acceptance
and occupancy related to the Work) as are necessary or desirable for the sale,
operation and intended time-share and other uses of the Real Property.

      6.2 Borrower's Negative Covenants.

      Except as may be expressly otherwise provided in the Schedule, Borrower
gives to Lender the covenants and agreements contained below in this paragraph
6.2:

            (a) Change in Borrower's Name or Principal Place of Business.
Borrower will not change its name or move its principal place of business or
chief executive office except upon not less than sixty (60) days prior written
notice to Lender.

            (b) Restrictions on Additional Indebtedness. Subject to the
additional restrictions set forth in paragraph 6.2(c), Borrower will not incur
any additional indebtedness, including, without limitation, any liability under
any capitalized lease or any liability as a guarantor or other contingent
liability, except for the following ("Permitted Debt"): (a) short term accounts
payable incurred in connection with the operation of the Real Property and (b)
any indebtedness identified in the Schedule as Other Permitted Debt. Without
limiting the generality of the foregoing, as a condition to approval of any
third party loan or financing which is not Permitted Debt, Lender may require
that Borrower deliver to Lender copies of the financing documents and such other
information as Lender may reasonably request with respect to such third party
loan and/or financing and estoppel certificates, agreements providing notice and
cure rights, and subordination agreements executed by the person providing the
financing.

            (c) Restrictions on Liens or Transfers. Unless expressly permitted
in this Agreement or in any other Document (including, without limitation, the
conveyance of Time-Share Interests in the ordinary course of business),
Borrower, without the prior written consent of Lender, will not: (i) sell,
convey, lease, pledge, hypothecate, encumber or otherwise transfer any security
for the Performance of the Obligations; (ii) permit or suffer to exist any lien,
security interest or other encumbrance on the Collateral, except for the
Permitted Encumbrances and liens and security interests expressly granted to
Lender; (iii) sell, convey, lease, transfer or dispose of all or substantially
all of its assets to another entity; or (iv) if Borrower is an organization,
permit or suffer to exist


                                      -22-
<PAGE>

any change in the legal or beneficial ownership of Borrower or any person
controlling Borrower (whether directly or indirectly, through one or more
intermediaries) or any change in the power to control it or any person
controlling Borrower (whether directly or indirectly, through one or more
intermediaries). Without limiting Lender's right to withhold its approval for
other reasons, as a condition to approval of any lien, security interest or
other charge upon any of the Collateral, Lender may require that the third party
execute a subordination agreement satisfactory to Lender and provide Quiet
Enjoyment Rights to owners of Time-Share Interests.

            (d) No Sales Activities Prior to Approval. Borrower will not sell
any Time-Share Interest or offer any Time-Share Interest for sale in any
jurisdiction, unless: (i) Borrower has delivered to Lender true and complete
copies of the Minimum Required Time-Share Approvals required in such
jurisdiction for its proposed conduct and all other evidence required by Lender
that Borrower has complied with all applicable Legal Requirements of such
jurisdiction governing its proposed conduct; and (ii) Borrower has delivered to
Lender the Time-Share Program Consumer Documents and the Time-Share Program
Governing Documents which Borrower will be using in connection with the
Time-Share Program and the sale or offering for sale of the Time-Share Interest
in such jurisdiction and such documents have been approved by Lender, which
approval shall not be unreasonably withheld.

            (e) No Modification of Time-Share Documents. Borrower will not
cancel or materially modify, or consent to or suffer to exist any cancellation
or material modification of, without the prior written consent of Lender, any
Time-Share Program Consumer Document or any Time-Share Program Governing
Document, except for changes which (a) are required by law or (b) do not
adversely affect the Collateral, are not prohibited by the terms of any of the
other Documents and are made in the ordinary course of business. Borrower will
promptly notify Lender of changes made pursuant to items (a) or (b) of the
preceding sentence.

            (f) Maintenance of Larger Tract. To the extent the Real Property is
part of a larger common ownership regime or planned development or parts of
buildings in which Units are located are not part of the Real Property, Borrower
will not permit common expenses to be allocated to the Real Property in an
unreasonably disproportionate manner.

            (g) Work-Related Negative Covenants. Borrower will not:

                  (i) amend any of the Principal Construction Work-Related Items
except for change orders which (i) do not change the cost of Completion of the
Work by more than Twenty-Five Thousand Dollars ($25,000) in the aggregate beyond
that shown in the Construction Budgets as originally approved by Lender, and
(ii) do not affect the design, structural integrity or quality of the
Construction Improvements; or

                  (ii) not enter into any new Architect/Engineer Agreement or
Construction Work Contract except upon terms and with such parties as Lender may
approve in writing, such approval not to be unreasonably withheld and/or
delayed.

      6.3 Survival of Covenants. The covenants contained in this Article 6 are
in addition to, and not in derogation of, the covenants contained elsewhere in
the Documents and shall be deemed to be made and reaffirmed prior to the making
of each Advance.

7.    DEFAULT

      7.1 Events of Default. Except as may be expressly otherwise provided in
the Schedule, the occurrence of any of the following events or conditions shall
constitute an Event of Default by Borrower under the Documents:

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

            (b) any representation or warranty which is made by a person other
than Lender and is contained in the Documents or in any certificate furnished to
Lender under the Documents by or on behalf of Borrower proves to be, in any
material adverse respect, false or misleading as of the date deemed made;

            (c) a default in the Performance of the Obligations set forth in
paragraphs 6.1(c), 6.1(e), 6.2(a), 6.2(b), 6.2(c)(i), 6.2(c)(iii) or 6.2(c)(iv);

            (d) a default in the Performance of the Obligations or a violation
of any term, covenant


                                      -23-
<PAGE>

or provision of the Documents (other than a default or violation referred to
elsewhere in this paragraph 7.1) which continues unremedied (i) for a period of
five (5) Business Days after notice of such default or violation to Borrower in
the case of a default under or violation of paragraph 6.2(c)(ii) or any other
default or violation which can be cured by the payment of money alone or (ii)
for a period of twenty (20) Business Days after notice to Borrower in the case
of any other default or violation;

            (e) an "Event of Default," as defined elsewhere in this Agreement or
in any of the other Documents, or under any other Loan from Lender pursuant to
that letter dated May 3, 2000, to Equivest Finance, Inc.;

            (f) any default by Borrower under any other agreement evidencing,
guaranteeing or securing borrowed money involving an obligation in excess of the
amount described in the Schedule as the Cross-Default Threshold Amount to make a
payment of principal or interest; or any other material default by Borrower
permitting the acceleration of any of the payment of Borrower which, if
accelerated, will be in excess of the amount described in the Schedule as the
Cross-Default Threshold Amount in the aggregate;

            (g) any final, non-appealable judgment or decree for money damages
or for a fine or penalty against Borrower which is not paid and discharged or
stayed within thirty (30) days thereafter and when aggregated with all other
judgment(s) or decree(s) that have remained unpaid and undischarged or stayed
for such period is in excess of the amount described in the Schedule as the
Judgment Threshold Amount;

            (h) any party holding a lien on or security interest in any
Collateral [other than a lien created by a Purchaser solely with respect to the
Time-Share Interest(s) owned by it] commences foreclosure or similar sale
thereof;

            (i) a material adverse change in the Real Property, the Collateral
or the business or financial condition of Borrower, which change is not
enumerated in this paragraph 7.1, as the result of which Lender in good faith
deems the prospect of Performance of the Obligations impaired or the Collateral
imperiled;

            (j) Borrower shall (i) generally not be paying its debts as they
become due, (ii) file, or consent by answer or otherwise to the filing against
it of, a petition for relief or reorganization, arrangement or liquidation or
any other petition in bankruptcy or insolvency under the laws of any
jurisdiction, (iii) make an assignment for the benefit of its creditors, (iv)
consent to the appointment of a custodian, receiver, trustee or other officer
with similar powers for itself or any substantial part of its property, (v) be
adjudicated insolvent, (vi) dissolve or commence to wind-up its affairs or (vii)
take any action for purposes of the foregoing; or a petition for relief or
reorganization, arrangement or liquidation or any other petition in bankruptcy
or insolvency or the appointment of a custodian under the laws of any
jurisdiction is filed against Borrower or a custodian is appointed for Borrower,
the Collateral or any material part of Borrower's property and such proceeding
is not dismissed and appointment vacated within ninety (90) days thereafter;

            (k) any of the events enumerated in paragraphs 7.1(b), (d) (f), (g),
(h), (i) or (j) occurs with respect to any Time-Share Association, any general
partner or manager of Borrower (if Borrower is a partnership or limited
liability company, Guarantor or other surety for the Performance of the
Obligation, other than a person who may be deemed a surety solely because such
person has subordinated to the Obligations indebtedness owed to it by Borrower;
or

            (l) failure of Lender to receive from Borrower, within twenty (20)
days of the date Borrower knows of such event, notice of any event which renders
any representation or warranty in any Document false in any material, adverse
respect were it made after the occurrence of such condition; and

            (m) at any time prior to Completion of a Construction Work Phase,
Borrower (i) abandons such Construction Work Phase or (ii) delays construction
or suffers construction to be delayed for any period of time, for any reason
whatsoever not covered by item (i) of this paragraph 7.1(m) so that Completion
of such Construction Work Phase cannot be accomplished in the ordinary course of
construction, in the reasonable judgment of Lender, on or before the Required
Completion Date for such Construction Work Phase.

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


                                      -24-
<PAGE>

            (a) cease to make further Advances;

            (b) declare the Note, together with any applicable Prepayment
Premium and any and all other sums owing by Borrower to Lender in connection
with the Loan, including, without limitation, the unpaid balance of the Loan
Fee, immediately due and payable without notice, presentment, demand or protest,
which are hereby waived by Borrower;

            (c) apply the then balance of the Required Completion Assurance
Deposits (Construction) to the satisfaction of the Obligations in such order and
manner as Lender may determine;

            (d) with respect to any Construction Work Phase for which Lender has
made a Loan Advance, to the extent Completion of such Construction Work Phase
has not occurred: (i) continue and/or cause Completion of the Construction Work
Phase; (ii) take exclusive possession of the Property or any part thereof; (iii)
expend such funds as Lender may deem appropriate, including the Required
Completion Assurance Deposit(s) (Construction) (if any), any other funds of
Borrower held by Lender and any sums which may remain unadvanced hereunder, to
continue and/or cause Completion of the Construction Work Phase; (iv) demand and
receive performances due under the applicable Principal Construction
Work-Related Items and the other applicable Contracts, Licenses, Permits and
Other Intangibles; (v) make such changes to the scope of the Construction Work
Phase and to the applicable Principal Construction Work-Related Items and other
applicable Contracts, Licenses, Permits and Other Intangibles as may be
necessary or desirable in Lender's judgment; (vi) file claims, institute
enforcement actions and otherwise prosecute and defend all actions or
proceedings relating to the Construction Work Phase, the applicable Principal
Construction Work-Related Items and the other applicable Contracts, Licenses,
Permits and Other Intangibles as Lender may determine to be necessary or
desirable in Lender's judgment; (vii) pay, settle or compromise all existing
bills and claims which are or may be liens against any of the Property or as
Lender may deem to be necessary or desirable in Lender's judgment for the
continuance or Completion of the Construction Work Phase related thereto or the
clearance of title, all without notice to Borrower; (viii) execute in Borrower's
name all applications, certificates, notices and other instruments and give all
instructions and communications which may be required or permitted by the
applicable Principal Construction Work-Related Items and other applicable
Contracts, Licenses, Permits and Other Intangibles as determined by Lender; (ix)
cancel or surrender any of the applicable Principal Construction Work-Related
Items and the other applicable Contracts, Licenses, Permits and Other
Intangibles and enter into new contracts for the Completion of the Construction
Work Phase and any changes to the scope of the Construction Work Phase; (x) do
any and every act with respect to the Completion of the Construction Work Phase,
the applicable Principal Construction Work-Related Items and the other
applicable Contracts, Licenses, Permits and Other Intangibles which Borrower may
do in its behalf; (xi) employ such Construction Work Contractors,
sub-contractors, suppliers, agents, attorneys, architects, accountants,
appraisers, security guards and inspectors as Lender may in its judgment deem
necessary or desirable to accomplish any of the above purposes; and (xii)
receive, collect, open and read all mail of Borrower for the purpose of
obtaining all items pertaining to the Construction Work Phase, the applicable
Principal Construction Work-Related Items and the other applicable Contracts,
Licenses, Permits and Other Intangibles;

            (e) proceed to protect and enforce its rights and remedies under the
Documents and to foreclose or otherwise realize upon the Collateral, or to
exercise any other rights and remedies available to it at law, in equity or by
statute; and

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

      7.3 Application of Proceeds During an Event of Default. Notwithstanding
anything in the Documents to the contrary, while an Event of Default exists, any
Required Completion Assurance Deposits (Construction) and cash received and
retained by Lender in connection with any Collateral may be applied to payment
of the Obligations in the manner provided in paragraph 7.5.

      7.4 Uniform Commercial Remedies; Sale.

            (a) UCC Remedies. Lender shall have all of the rights and remedies
of a secured party under the Uniform Commercial Code of the State of Arizona and
all other rights and remedies accorded to a Secured Party at equity or law. Any
notice of sale or other disposition of the Collateral given not less than ten
(10) days prior to such proposed action in connection with the exercise of
Lender's rights and remedies shall constitute reasonable and fair notice of such
action. Lender may postpone or adjourn any such


                                      -25-
<PAGE>

sale from time to time by announcement at the time and place of sale stated on
the notice of sale or by announcement of any adjourned sale, without being
required to give a further notice of sale. Any such sale may be for cash or,
unless prohibited by applicable law, upon such credit or installment as Lender
may determine. Borrower shall be credited with the net proceeds of such sale
only when such proceeds are actually received by Lender in good current funds.
Despite the consummation of any such sale, Borrower shall remain liable for any
deficiency on the Obligations which remains outstanding following such sale. All
net proceeds recovered pursuant to a sale shall be applied in accordance with
the provisions of paragraph 7.5.

            (b) Obligation to Assemble Collateral. Upon request of Lender when
an Event of Default exists, Borrower shall assemble the Collateral and make it
available to Lender at a time and place designated by Lender, if it is not
already in Lender's possession.

      7.5 Application of Proceeds. The proceeds of any sale of all or any part
of the Collateral made in connection with the exercise of Lender's rights and
remedies shall be applied in the following order of priorities; first, to the
payment of all costs and expenses of such sale, including without limitation,
reasonable compensation to Lender and its agents, attorneys' fees, and all other
expenses, liabilities and advances incurred or made by Lender, its agents and
attorneys, in connection with such sale, and any other unreimbursed expenses for
which Lender may be reimbursed pursuant to the Documents; second, to the payment
of all late charges required by the Documents to be paid by Borrower, in such
order and manner as Lender shall in its discretion determine; third, to the
payment of the Notes, in such order and manner as Lender shall in its discretion
determine, with no amounts applied to payment of principal until all interest
has been paid; fourth, to the other Obligations in such order and manner as
Lender may determine; and last, to the payment to Borrower, its successors or
assigns, or to whosoever may be lawfully entitled to receive the same, or as a
court of competent jurisdiction may direct, of any surplus then remaining from
such proceeds.

      7.6 Lender's Right to Perform. Lender may, at its option, and without any
obligation to do so, pay, perform and discharge any and all obligations
[including, without limitation, the Obligations under paragraph 6.1(c)] agreed
to be paid or Performed in the Documents by Borrower or any surety for the
Performance of the Obligations if (a) such person fails to do so and (b) (i) an
Event of Default exists and at least five (5) Business Day's notice has been
given to such person of Lender's intention to take such action, (ii) the action
taken by Lender involves obtaining insurance which such person has failed to
maintain in accordance with the Documents or to deliver evidence thereof, or
(iii) in the opinion of Lender, such action must be taken because an emergency
exists or to preserve any of the Collateral or its value. For such purposes
Lender may use the proceeds of the Collateral. All amounts expended by Lender in
so doing or in exercising its remedies under the Documents following an Event of
Default shall become part of the Obligations, shall be immediately due and
payable by Borrower to Lender upon demand, and shall bear interest at the
Default Rate from the dates of such expenditures until paid.

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

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

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

8.    COSTS AND EXPENSES; INDEMNIFICATION

      8.1 Costs and Expenses. Borrower will pay on demand any and all costs and
expenses incurred by Lender (exclusive of Lender's employees' expenses other
than travel expenses) in connection with the initiation, documentation and
closing of the Loans, the making of Advances, the protection of the Collateral,


                                      -26-
<PAGE>

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

      8.2 Indemnification. Borrower will INDEMNIFY, PROTECT, HOLD HARMLESS, and
defend Lender, its successors, assigns and shareholders (including corporate
shareholders), and the directors, officers, employees, servants and agents of
the foregoing, for, from and against: (a) any and all liability, damage,
penalties, or fines, loss, costs or expenses (including, without limitation,
court costs and attorneys' fees), claims, demands, suits, proceedings (whether
civil or criminal), orders, judgments, penalties, fines and other sanctions
whatsoever asserted against it and arising from or brought in connection with
the Time-Share Program, the Vacation Club, the Real Property, the Collateral,
Lender's status by virtue of the Documents, creation of liens and security
interests, the terms of the Documents or the transactions related thereto, or
any act or omission of Borrower or an Agent, or their respective employees or
agents, whether actual or alleged, unless such act or omission is caused by
Lender's gross negligence or willful misconduct; and (b) any and all brokers'
commissions or finders' fees or other costs of similar type by any party in
connection with the Loans. On written request by a person or other entity
covered by the above agreement of indemnity, Borrower will undertake, at its own
cost and expense, on behalf of such indemnitee, using counsel satisfactory to
the indemnitee, the defense of any legal action or proceeding to which such
person or entity shall be a party. At Lender's option, Lender may at Borrower's
expense prosecute or defend any action involving the priority, validity or
enforceability of the Collateral.

9.    CONSTRUCTION AND GENERAL TERMS

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

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

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

      9.4 Counterparts. Any Document may be executed in counterpart, and any
number of copies of such Document which have been executed by Lender and
Borrower shall constitute one original.

      9.5 Notices. All notices, requests or demands required or permitted to be
given under the Documents shall be in writing, and shall be deemed effective (a)
upon hand delivery, if hand delivered; (b) one (1) Business Day after such are
deposited for delivery via Federal Express or other nationally recognized
overnight courier service; or (c) three (3) Business Days after such are
deposited in the United States mails, certified or registered mail, all with
delivery charges and/or postage prepaid, addressed to the address specified
below, or to such other address as the party


                                      -27-
<PAGE>

being notified may have designated in a notice given to the other party. Written
notice may be given by telecopy to the telecopier number specified below or to
such other telecopier number as the party being notified may have designated in
a notice given to the other party, which notice shall be effective on the day of
receipt if received during the recipient's normal business hours on the day of
receipt or otherwise on the next Business Day; provided that such notice shall
not be deemed effective unless not later than the next Business Day, a copy of
such notice is hand delivered or deposited for delivery via courier or in the
United States mails in accordance with the requirements set forth above. The
notice addresses and telecopy numbers for Borrower and Lender on the date hereof
are set forth at the end of this Agreement following their respective
signatures.

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

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

      9.8 Time of Essence. Time is of the essence in the Performance of the
Obligations.

      9.9 Miscellaneous. All headings are inserted for convenience only and
shall not affect any construction or interpretation of the Documents. Unless
otherwise indicated, all references in a Document to paragraphs, clauses and
other subdivisions refer to the corresponding paragraphs, clauses and other
subdivisions of the Document; the words "herein," "hereof," "hereto," hereunder"
and words of similar import refer to the Document as a whole and not to any
particular paragraph, clause or other subdivision; and reference to a numbered
or lettered subdivision of an Article or paragraph of a Document shall include
relevant matter within the Article or paragraph which is applicable to but not
within such numbered or lettered subdivision. All Schedules and Exhibits
referred to in a Document are incorporated in such Document by reference.

      9.10 CHOICE OF LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED THEREIN, THE
DOCUMENTS AND THE RIGHTS, DUTIES AND OBLIGATIONS OF THE PARTIES THERETO SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
ARIZONA AND TO THE EXTENT THEY PREEMPT THE LAWS OF SUCH STATE, THE LAWS OF THE
UNITED STATES.

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

      9.12 WAIVER OF JURY TRIAL. LENDER AND BORROWER ACKNOWLEDGE AND AGREE THAT
ANY CONTROVERSY WHICH MAY ARISE UNDER ANY DOCUMENT WOULD BE BASED UPON DIFFICULT
AND


                                      -28-
<PAGE>

COMPLEX ISSUES; AND THEREFORE, THEY AGREE THAT ANY LAWSUIT ARISING OUT OF ANY
SUCH CONTROVERSY SHALL BE TRIED BY A JUDGE SITTING WITHOUT A JURY, AND KNOWINGLY
AND VOLUNTARILY WAIVE TRIAL BY JURY IN ANY SUCH PROCEEDING.

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

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

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

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

      9.16 Standards Applied to Lender's Actions. Unless otherwise specifically
stipulated elsewhere in the Documents, if a matter is left in the Documents to
the decision, requirement, request, determination, judgment, opinion, approval,
consent, satisfaction, acceptance, agreement, option or discretion of Lender,
its employees, Lender's counsel or any agent for or independent contractor of
Lender, such action shall be deemed to be exercisable by Lender or such other
person in its sole and absolute discretion and according to standards
established in its sole and absolute discretion. Without limiting the generality
of the foregoing, "option" and "discretion" shall be implied by use of the words
"if" or "may."

      9.17 Meaning of Subordination. Any subordination required to be given
under the Documents to Lender shall include the subordination of and the
deferral of the right to receive payments on the subordinated obligations except
to the extent expressly permitted in this Agreement; the remittances to Lender
of all prohibited payments received by the third party; the subordination of all
liens, security interests, assignments and other encumbrances and claims held by
the subordinating party on or against any property of Borrower, any Guarantor
and/or any other surety for the Performance of the Obligations to Lender's
interest (whenever acquired) in such property; and an agreement on the part of
the third party not to exercise any remedies against Borrower so long as all
obligations under the Documents have not been fully satisfied.

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

      9.19 Publicity. Lender routinely advertises the transactions to which it
is a party in newspapers, industry periodicals, and other miscellaneous print
and electronic literature. Borrower consents to such advertising and authorizes
Lender to use Borrower's name, logo, insignia, descriptive art work, trade name,
trademark, or other similar material, whether or not protected by copyright (or
otherwise), in any such advertisement.

      9.20 Permitted Contests. Notwithstanding anything in the Documents to the
contrary, after prior written notice to Lender, Borrower at its expense may
contest, by appropriate legal or other proceedings conducted in good faith and
with due diligence, the amount or validity of any tax, Imposition, Legal
Requirement or any monetary lien on the Collateral, so long as: (a) in the case
of an unpaid Imposition or lien, such proceedings suspend the collection thereof
from Borrower and the Collateral, and shall not interfere with the payment of
any monies due under the


                                      -29-
<PAGE>

Collateral in accordance with the terms of the Borrower's Security Documents;
(b) none of the Collateral is, in the judgment of Lender, in any imminent danger
of being sold, forfeited or lost; (c) in the case of a Legal Requirement,
neither Borrower nor Lender is in any danger of any civil or criminal liability
for failure to comply therewith; and (d) Borrower has furnished such security,
if any, as may be required in the proceedings or as Lender reasonably requests
up to one hundred fifty percent (150%) of the amount in controversy.

      9.21 Reliance. Lender's examination, inspection, or receipt of information
pertaining to Borrower, any Guarantor, the Collateral , the Real Property or the
Time-Share Program shall not in any way be deemed to reduce the full scope and
protection of the warranties, representations and Obligations contained in the
Documents.

      9.22 Telecopied Signature. Unless otherwise required by Lender, the
telecopied signature of a person shall be deemed the original signature of that
person and shall be binding for all purposes; provided, however, that at the
request of Lender, any person whose signature has been telecopied will execute
and deliver to Lender a copy of this instrument originally executed by it.

                            [SIGNATURE PAGES FOLLOW]


                                      -30-
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their respective name, personally or by their duly authorized
representatives as of June ___, 2000.

BORROWER                          EASTERN RESORTS COMPANY, LLC,
                                  a Rhode Island limited liability company,
                                  by its Managing Member

                                  BY: Eastern Resorts Corporation, a Delaware
                                      corporation


                                  By:_________________________________________
                                  Type/Print Name: R. Perry Harris
                                  Title: President

                                  Borrower's Notice Address and Telecopy Number:

                                  Eastern Resorts Company, LLC
                                  115 Long Wharf
                                  Newport, Rhode Island 02840
                                  Attn: Richard Winkler, Esq.
                                  Telecopy No.: (401) 846-3888


                                      -31-
<PAGE>

LENDER                           FINOVA CAPITAL CORPORATION, a Delaware
                                 corporation


                                 By:_________________________________________
                                 Type/Print Name:____________________________
                                 Title:______________________________________

                                 Lender's Notice Address and Telecopy Number:

                                 FINOVA Capital Corporation
                                 4800 North Scottsdale Road
                                 Scottsdale, Arizona  85251
                                 Attn: Vice President-Resort Finance
                                 Telecopy No.: (480) 636-6443

                                 with a copy to:

                                 FINOVA Capital Corporation
                                 4800 North Scottsdale Road
                                 Scottsdale, Arizona  85251
                                 Attn: Vice President-Associate General Counsel
                                 Telecopy No.: (480) 636-6444


                                      -32-
<PAGE>

                          SCHEDULE OF ADDITIONAL TERMS

S.1   This Schedule has been incorporated by reference into and forms a part of
      that Loan and Security Agreement ("the Agreement") dated as of June ____,
      2000, between FINOVA Capital Corporation and Eastern Resorts Company, LLC.

S.2   To the extent of any inconsistency between this Schedule, as it may be
      from time to time amended, and the other provisions of the Agreement, the
      provisions of this Schedule shall prevail. Certain capitalized terms not
      defined in the Agreement have the meaning given to them in paragraph S.6
      below.

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

      (a) P.1.7      Approved Acquisition Refinance Component Uses. Repayment of
                     the purchase money financing and refinancing, payment or
                     reimbursement of other expenses incurred in connection with
                     Borrower's acquisition and development of the Real
                     Property, payment of the Loan Fee due upon the making of
                     the initial Advance, and payment of attorneys' fees and
                     other expenses incurred in connection with the preparation
                     and negotiation of the Documents and the closing of the
                     initial Advance, provided expenses shall only be reimbursed
                     after, among other things, Borrower's production of
                     receipts relative to expenses for which reimbursement is
                     sought.

      (b) P.1.12     Basic Interest Rate. With respect to a Loan, the Reference
                     Rate on the initial Advance of such Loan plus fifty (50)
                     basis points, which rate shall be adjusted once each month
                     on each Interest Rate Change Date (as hereinafter defined)
                     based upon the Reference Rate in effect on such Interest
                     Rate Change Date. With respect to a Loan, the term
                     "Interest Rate Change Date" means the first business day of
                     the publisher of the Reference Rate during each calendar
                     month following the date of the initial Advance of such
                     Loan.

      (c) P.1.18     Loan Borrowing Term Expiration Date. The date which is the
                     second annual anniversary after the initial Loan Advance.

      (d) P.1.25     Construction Improvements. Completion of construction of 27
                     Units and amenities approved by Lender (Phase III) and 21
                     Units (Phase IV), all in accordance with a Construction
                     Budget and Plans and Specifications approved by Lender.

      (e) P.1.34     Default Rate: (a) the greater of (i) two percent (2.0%)
                     above the highest Basic Interest Rate then in effect or
                     (ii) eighteen percent (18%) per annum or (b) the maximum
                     contract rate permitted under the applicable usury law,
                     whichever of (a) or (b) is lesser.

      (f) P.1.47     Loan Interest Reserve Fund. Four Hundred Thirty-Seven
                     Thousand Dollars ($437,000), to be used as described in
                     Paragraph 1.48.

      (g) P.1.51     Loan Amount: Nine Million Two Hundred Thousand Dollars
                     ($9,200,000).

      (h) P.1.52     Loan Fee. An amount equal to the greater of: (1) one half
                     of one percent (0.5%) of the Original Loan Amount; or (2)
                     Forty-Six Thousand Dollars ($46,000).

      (i) P.1.54     Maximum Acquisition Refinancing Component Amount. An amount
                     not to exceed One Hundred Seventy-One Thousand Dollars
                     ($171,000).

      (j) P.1.53     Loan Maturity Date. The date (or if not a Business Day, the
                     first Business Day thereafter) which is the fourth annual
                     anniversary after the initial Advance.


                                       -i-
<PAGE>

      (k) P.1.61     Opening Prepayment Date. The first annual anniversary of
                     the initial Advance hereunder.

      (l) P.1.62     Partial Release Fee. An amount equal to $4,100 per Time
                     Share Interest being released.

      (m) P.1.70     Prepayment Premium: The Prepayment Premium at any time
                     shall be equal to an amount which is the sum of the
                     products of the unpaid principal balance of the Loan times
                     a percentage which is based upon the year after the Loan
                     Opening Prepayment Date in which the prepayment occurs and
                     is determined in accordance with the following schedule:

                     Years After Applicable              Applicable Prepayment
                     Opening Prepayment Date               Premium Percentage
                     -----------------------             ---------------------

                                1                                   2%
                                2                                   1%
                                2-4                                 0%

                     Year 1 after any Opening Prepayment Date shall be the
                     period of time commencing on such Opening Prepayment Date
                     and expiring twelve months thereafter. Each Year beginning
                     with Year 2 commences upon the expiration of the previous
                     year and shall be for a period of twelve months. Without
                     implying a right on the part of Borrower to make a
                     voluntary prepayment when prepayment is closed, if a
                     prepayment occurs during a period when prepayment is
                     closed, the applicable Prepayment Premium percentage shall
                     be five percent (5%). The Loan may not be prepaid until the
                     Opening Prepayment Date.

      (n) P.1.80     Reference Rate: The term "Reference Rate" means the per
                     annum rate of interest publicly announced, from time to
                     time, by Citibank, N.A., New York, New York ("Citibank"),
                     as the base (or equivalent) rate of interest charged by
                     Citibank to its largest and most creditworthy commercial
                     borrowers notwithstanding the fact that some borrowers of
                     Citibank may borrow from Citibank at rates less than the
                     announced base rate, or if Citibank ceases to publish its
                     base rate, then such other published rate as Lender shall
                     deem comparable.

      (o) P.1.81     Required Closing Date. August 1, 2000.

      (p) P.1.83     Required Completion Date. With respect to a Construction
                     Work Phase, the date specified in the Construction Work
                     Progress Schedule for such Construction Work Phase.

      (q) P.1.84     Required Guarantor(s). With respect to the Loan and certain
                     other Obligations, Equivest Finance, Inc., a Delaware
                     corporation.

      (r) P.1.96     Time-Share Interest. An Interval Interest as defined in the
                     Time-Share Program Governing Documents.

      (s) P.2.1(a)   Basic Retainage Percentage. As to Advances, for any
                     applicable Construction Work Phase, ten percent (10%),
                     provided, upon completion, as certified by Lender's
                     Inspector, of 50% or more of the Construction Work for a
                     Construction Work Phase, the Basic Retainage applicable to
                     such Construction Work Phase shall decrease to five percent
                     (5%).

      (t) P.2.1(a)   Minimum Required Time-Share Approvals Delivery Date. Not
                     Applicable.

      (u) P. 2.5(b)  Minimum Scheduled Payments. On each of the first through
                     fourth anniversary dates of the first anniversary of the
                     Loan Borrowing Term Expiration Date, Borrower will pay to
                     Lender principal payments on the Loan in an amount equal to
                     the positive remainder, if any, obtained by subtracting the
                     aggregate amount of principal payments previously made on
                     the Loan prior to such anniversary date from


                                      -ii-
<PAGE>

                     the minimum required principal payment required to be made
                     on such anniversary date determined according to the
                     schedule set forth below, but in no event to exceed the
                     unpaid principal balance of the Loan:

         Anniversary Date of
Loan Borrowing Term Expiration Date                 Aggregate Principal Payments
-----------------------------------                 ----------------------------

                1                                           $1,000,000
                2                                           $2,750,000
                3                                           $5,500,000
                4                                           $9,200,000

      (v) P.4.1(b)   Financial Statements and Other Matters Required For
                     Closing. (1) Financial statements for the Borrower and the
                     required Guarantor(s) dated no earlier than ninety (90)
                     days prior to the date of receipt by Lender or "statements
                     of no change" dated no earlier than ninety (90) days prior
                     to the date of receipt stated by Lender with respect to
                     financial statements dated earlier than the "statement of
                     no change"; (2) Confirmation of costs on construction
                     incurred by Borrower which are to be reimbursed with the
                     initial Advance; (3) Any unsold Time-Share Interests
                     subsisting as the Real Property are to be encumbered by the
                     Borrower's Mortgage, and at Lender's discretion and
                     request, the amount of the Partial Release Fee shall be
                     recalculated to account for such additional Time-Share
                     Interests; (4) Lender shall have received information
                     satisfactory to it as to the matters identified in
                     Paragraph 4.1(b)(xviii), including, without limitation,
                     that upon a partial release of the Borrower's Mortgage, a
                     deed to the applicable Time-Share Interest will convey
                     title to the Time-Share Association; (5) Lender shall have
                     been provided evidence satisfactory to it as to the status
                     of any other debt or contingent debt of Borrower and the
                     Required Guarantors, including, without limitation, the
                     collateral required for such debt or contingent debt; and
                     (6) Any modifications to an existing credit facility
                     wherein Lender is Lender and Great Smokies Hotel Associates
                     is Borrower, if and as required by Lender because of the
                     acquisition of Peppertree Resorts by Required Guarantor(s),
                     shall have been completed to the satisfaction of the
                     Lender.

      (w) P.4.6      Maximum Advance Frequency: Once per calendar month plus the
                     Acquisition Refinancing Component Advance, if any, and the
                     Interest Reserve Advance, if any, made during such month.
                     There will only be a single Acquisition Refinancing
                     Component Advance.

      (x) P.4.6      Minimum Advance Amount. Except for the last Advance of the
                     Loan or an Interest Reserve Advance, each of which may be
                     in a lesser amount, One Hundred Thousand Dollars
                     ($100,000).

      (y) P.4.7      Wire Transfer Fee. Twenty-Five Dollars ($25.00).

      (z) P.5.1(a)   Borrower's Type of Business Organization. A limited
                     liability company.

      (aa)P.5.1(a)   Borrower's State of Organization. Delaware.

      (bb)P.5.2(a)   Borrower's Principal Place of Business. 115 Long Wharf,
                     Newport, Rhode Island 02840.

      (cc)P.5.2(a)   Borrower's Chief Executive Office. 115 Long Wharf, Newport,
                     Rhode Island 02840.

       (dd)P.6.1(e)  Other Payments Permitted on Subordinated Indebtedness.
                     Distributions permitted pursuant to paragraph S.5(b) of
                     this Schedule.

       (ee)P.7.1(f)  Cross-Default Threshold Amount. Fifty Thousand Dollars
                     ($50,000).

       (ff)P.7.1(g)  Judgment Threshold Amount. Fifty Thousand Dollars
                     ($50,000).


                                      -iii-
<PAGE>

S.4   The representations, warranties, covenants and agreements of Borrower and
      the other terms and conditions set forth in the Agreement are modified as
      follows:

                                 Not Applicable.

S.5   In addition to the other representations, warranties, covenants and
      agreements of Borrower set forth in the Agreement, Borrower represents,
      warrants and covenants as follows:

      (a)   Net Worth Maintenance. Guarantor will maintain on a minimum tangible
            net worth, determined in accordance with generally accepted
            accounting principles in an amount not less than Sixty-Eight Million
            Dollars ($68,000,000).

      (b)   Limitations on Distributions and Loans. Borrower will not make any
            distributions or loans, except as may occur both with Lender's
            permission and in the ordinary course of business; provided,
            Borrower may pay Affiliates for goods and services, but not in
            amounts exceeding normal and customary amounts for such goods and
            services.

      (c)   Limitation on Marketing and G&A Expenses. Borrower will not incur
            combined marketing expenses and general and administrative expenses
            that exceed a percentage of net sales of Time-Share Interests,
            determined according to the following table and calculated as of the
            end of each fiscal quarter of Borrower on a twelve (12) month
            rolling basis commencing with the fiscal quarter ended September 30,
            2000:

                                          Maximum Marketing and G&A Expense
                  Quarter Ending                    Percentage
                  --------------          ---------------------------------

                     9/30/2000                         65%

            For purposes of this Agreement: (a)"marketing expenses" means the
            aggregate of all costs and expenses for commissions and sales
            relating to time-share interests, including, without limitation,
            advertising, mailing, consumer premiums, sales referrals and
            generation of sales leads; and "net sales" shall mean the gross
            sales prices of time-share interests sold less the gross sales
            prices for time-share interests the sales of which are canceled
            before close of escrow or are rescinded; and (b) "general and
            administrative expenses" means for any period all of Borrower's
            operating expenses (excluding resort operations, repurchases and
            project owners' association subsidies) during such period less all
            Borrower's marketing expenses during such period.


                                      -iv-
<PAGE>

                                    EXHIBIT A

                      FINOVA CAPITAL CORPORATION ("LENDER")
                           STANDARD CONSTRUCTION LOAN
                            ADMINISTRATIVE PROCEDURES

A.    With each Work-Related Advance Request a Borrower must complete, execute
      and deliver to Lender:

      1.    An Application and Certificate for Payment (AIA Document G702,
            current edition) and Continuation Sheet(s) (AIA Document G703
            current for all direct costs (Exhibit G-1A hereof).

      2.    Request for Advance - Indirect Costs (Exhibit G-1B hereof).

      3.    Borrower's Affidavit for Advance (Exhibit G-1C hereof).

      4.    Check Sheet Form (Exhibit G-1D hereof).

      5.    Waiver of Liens (Exhibit G-1E hereof, if any, or such form as is
            required by law or Title Insurer) for previous application payments,
            if required by Lender.

      6.    Lender shall have approved, in its sole discretion, the Construction
            Budget.

      7.    Any Construction Work on the Real Property that is completed and
            paid for from sources other than the Loan must meet the approval of
            Lender's Inspector.

      8.    Change Order Approval Request (AIA Document G714) when applicable
            (Exhibit G-1F hereof).

      9.    Invoices (together with true copies of the checks showing payment
            thereof) supporting amounts shown in columns E and F of AIA Document
            G702 and G703.

      10.   Any surveys required pursuant to paragraph 6.4(h).

      11.   Such other items as Lender requests which are reasonably necessary
            to evaluate the request for the Work-Related Advance and the
            satisfaction of the conditions precedent thereto.

B.    The following events must take place prior to each Work-Related Advance:

      1.    Contractor requests site inspection from Lender's Inspector.

      2.    Contractor provides Lender's Inspector with a copy of AIA Documents
            G702 and G703.

      3.    Lender's Inspector will perform a physical inspection to review the
            Work in place, including, without limitation, Work which has been
            financed from sources other than a Work-Related Advance, and make a
            certification and recommendation to Lender. Lender's Inspector
            forwards his report, certification and recommendation to Lender.

      4.    At Lender's option, Lender will request Title Insurer (Borrower's
            Mortgage) to review public records, advise Lender of same, and
            forward to Lender endorsement(s) as required pursuant to paragraph
            6.4(i) of the Loan Agreement.


                                       -i-
<PAGE>

      5.    Lender will review the Work-Related Advance Request, input of
            Lender's Inspector and the title company's input. The Work-Related
            Advance Request must be appropriate, complete and in proper order.
            The order of the Work-Related Advance Request package will determine
            the processing time needed.

      6.    All other conditions of the Documents are satisfied.

C.    Lender shall have the right to approve all major subcontractors before any
      Advance after the initial Advance.

D.    As of the closing of the Loan, Borrower must supply Lender with Payment
      and Performance Bonds satisfactory to Lender in the amount of the
      Construction Contract for the Construction Work Phase as to which the
      initial Advance is sought. Before the initial Advance for any other
      Construction Work Phase, Borrower must provide the information acquired
      under paragraphs 4.1(b) (xii), -(xiv), -(xxii) to and including -(xxix),
      of the main text of this Agreement, together with Payments and Performance
      Bonds for the Construction Work for such Construction Work Phase, which
      shall be satisfactory to Lender in all respects.


                                      -ii-
<PAGE>

                                    EXHIBIT B

                             PERMITTED ENCUMBRANCES

When used with respect to the Real Property and related Personal Property:______
<PAGE>

                                    EXHIBIT C

                                  REAL PROPERTY
<PAGE>

                                    EXHIBIT D

                                 PROMISSORY NOTE
<PAGE>

                                    EXHIBIT E

                           GUARANTY AND SUBORDINATION
<PAGE>

                                    EXHIBIT F

                  BORROWER'S CERTIFICATE AND CONSUMER DOCUMENTS