SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 1-8096
FAIRFIELD COMMUNITIES, INC.
(Exact name of registrant as specified in its Charter)
Delaware 71-0390438
(State of incorporation) (I.R.S. Employer Identification No.)
11001 Executive Center Drive, Little Rock, Arkansas 72211
(Formerly 2800 Cantrell Road, Little Rock, Arkansas 72202)
(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code: (501) 228-2700
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- -------------------
Common Stock, $.01 par value New York
Preferred Stock Purchase Rights New York
with respect to Common Stock,
$.01 par value
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [ ]
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court. Yes X No
----- ----
The number of shares of the registrant's Common Stock outstanding as
of January 31, 1997 totaled 11,052,903 and the aggregate market value
of the registrant's Common Stock held by non-affiliates totaled
approximately $299.3 million at January 31, 1997.
Documents Incorporated by Reference: Parts I, II and III of this
Form 10-K incorporate certain information by reference from the
registrant's Annual Report to Stockholders for the year ended
December 31, 1996 and the Proxy Statement to be issued in connection
with its 1997 Annual Meeting of Stockholders.<PAGE>
INDEX TO
ANNUAL REPORT ON FORM 10-K
Page
----
PART I
------
Items 1. and 2. Business and Properties..................... 3
Item 3. Legal Proceedings................................... 4
Item 4. Submission of Matters to a Vote of Security Holders.. 4
PART II
-------
Item 5. Market for Registrant's Common Stock and
Related Stockholder Matters....................... 5
Item 6. Selected Financial Data........................... 5
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations............. 5
Item 8. Financial Statements and Supplementary Data....... 5
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.......... 5
PART III
--------
Item 10. Directors and Executive Officers of the Registrant.. 5
Item 11. Executive Compensation.............................. 6
Item 12. Security Ownership of Certain Beneficial
Owners and Management........................... 6
Item 13. Certain Relationships and Related Transactions.... 6
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K............................. 6
-2-
PART I
-------
Items 1. and 2. BUSINESS AND PROPERTIES
- -------------- -----------------------
General
-------
Fairfield Communities, Inc. ("Fairfield" and together
with its subsidiaries, the "Company") is the largest
vacation ownership company in the United States in terms of
property owners and vacation units constructed. The
Company's 15 resorts are located in 11 states; five resorts
are in destination areas with popular vacation attractions
("Destination Resorts") and 10 regional resorts are in
scenic locations ("Regional Resorts").
The Company's primary business is selling vacation
ownership interests ("VOIs"), commonly known as timeshares,
primarily through its innovative points-based vacation
system, Fairshare Plus. The Company also offers financing
for VOI purchasers through its wholly owned subsidiary,
Fairfield Acceptance Corporation ("FAC"), which results in
the creation of high quality, medium-term contracts
receivable with attractive yields. FAC holds these
contracts in its portfolio and, in the recent past, has
begun to securitize its contracts receivable in an effort to
lower the costs of borrowed funds and maintain borrowing
availability under its credit facilities.
Since 1980, the Company has sold more than $1.1 billion
of VOIs. The Company's net revenue from sales of VOIs has
increased from $33.5 million in 1993 to $114.6 million in
1996. Interest income from the Company's financing
activities totaled $20.0 million in 1996 and at December 31,
1996, the Company had a portfolio of approximately 45,700
contracts receivable amounting to $154.9 million with
outstanding borrowings of $54.3 million secured by the
contracts receivable. At December 31, 1996, these contracts
receivable had a weighted average maturity of approximately
five years. For the year ended December 31, 1996, the
contracts receivable had a weighted average interest rate of
13.6%, as compared to a weighted average cost of associated
debt of 8.6%.
In 1992, the Company successfully reorganized under
Chapter 11 of the Bankruptcy Code. Before the Company's
reorganization, it focused its VOI business on the
development of Regional Resorts, which required construction
and development of large-scale amenities such as golf
courses and other recreational facilities to attract
vacationers to those resorts. Since the reorganization, the
Company has focused on its core business of marketing and
financing vacation ownership products and has sold over $121
million of non-core assets, the proceeds of which have been
used to reduce indebtedness and reinvest in VOI operations.
Fairfield has also changed the focus of its vacation
ownership business from developing Regional Resorts to
constructing units in Destination Resorts, thereby
eliminating the need for developing large-scale amenities to
attract vacationers, lowering development expense, reducing
development risk and increasing its access to a steady
source of potential customers.
Additional information required by Items 1. and 2. is
incorporated herein by reference to PLACES - Fairfield s
------ -----------
Property Portfolio included in the Registrant's Annual
- -------------------
Report to Stockholders for the year ended December 31, 1996.
Fairfield was incorporated in Delaware in 1969. The
Company's principal executive office is located at 11001
Executive Center Drive, Little Rock, Arkansas 72211, and its
telephone number is (501) 228-2700. At December 31, 1996,
the Company had approximately 1,200 full-time employees.
-3-
Development/Regulation
----------------------
In certain of its developments, the Company engages in
master planning of land, home and commercial construction
and management of resort and conference facilities. Many
state and local authorities have imposed restrictions and
additional regulations on developers of VOIs and lots.
Although these restrictions have generally increased the
cost of selling VOIs and lots, the Company has not
experienced material difficulties in complying with such
regulations or operating within such restrictions. The
Company provides certain purchasers with a "property report"
designed to comply with the disclosure requirements of
federal and state laws which contains, among other things,
detailed information about the particular community, the
development and the purchaser's rights and obligations as a
VOI or lot owner.
Item 3. LEGAL PROCEEDINGS
- ------ -----------------
The information required by Item 3 is
incorporated herein by reference to Note 14 -
-----------
Contingencies of "Notes to Consolidated Financial
-------------
Statements" included in the Registrant's Annual
Report to Stockholders for the year ended December
31, 1996.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------ ---------------------------------------------------
No matters were submitted to a vote of
stockholders during the fourth quarter of 1996.
Executive Officers of the Registrant
- ------------------------------------
The following is a listing of the executive officers of
the Company, none of whom has a family relationship with
directors or other executive officers:
John W. McConnell, age 55, has been with
Fairfield since 1986, serving as President and
Chief Executive Officer since 1991; President and
Chief Operating Officer from 1990 to 1991 and
Senior Vice President and Chief Financial Officer
prior thereto.
Marcel J. Dumeny, age 46, has been with
Fairfield since 1987, serving as Senior Vice
President and General Counsel since 1989 and
Senior Vice President/Law and Development prior
thereto.
Clay G. Gring, Sr., age 65, has been with
Fairfield since 1991, serving as Senior Vice
President/Chief Operating Officer since January
1996 and Senior Vice President/Leisure Products
Group prior thereto. Mr. Gring was self-employed
from 1984 to 1991, specializing in the development
and management of real estate properties,
including resort communities and hospitality
related properties.
Franz Hanning, age 43, has been with
Fairfield since 1982, serving as Senior Vice
President, Corporate Sales since January 23, 1997;
Regional Vice President from 1991 to January
23, 1997 and Vice President/Sales - Fairfield
Williamsburg from 1990 to 1991.
Robert W. Howeth, age 49, has been with
Fairfield since 1975, serving as Senior Vice
President and Chief Financial Officer since April
1996; Senior Vice President, Chief Financial
Officer and Treasurer from 1994 to April 1996;
Senior Vice President and Treasurer from 1993 to
1994 and Senior Vice President/Planning and
Administration from 1990 to 1993.
-4-
Mark Nuzzo, age 45, has been with Fairfield
since 1983, serving as Vice President of Property
Management since 1995 and as Vice President of
Resort Operations from 1991 to 1995.
William G. Sell, age 43, has been with
Fairfield since 1981, serving as Vice President,
Controller and Chief Accounting Officer since
1988.
PART II
-------
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
- ------ ------------------------------------------------
STOCKHOLDER MATTERS
-------------------
Information required by Item 5 is
incorporated herein by reference to Common Stock
------------
Prices included in the Registrant's Annual Report
------
to Stockholders for the year ended December 31,
1996.
Item 6. SELECTED FINANCIAL DATA
- ------ -----------------------
Information required by Item 6 is
incorporated herein by reference to Selected
--------
Financial and Other Data included in the
-----------------------------
Registrant's Annual Report to Stockholders for the
year ended December 31, 1996.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ------ -------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
Information required by Item 7 is
incorporated herein by reference to Management's
------------
Discussion and Analysis of Financial Condition and
--------------------------------------------------
Results of Operations included in the Registrant's
---------------------
Annual Report to Stockholders for the year ended
December 31, 1996.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ------ -------------------------------------------
Financial statements and supplementary data
required by Item 8 are set forth below in Item
14(a), Index to Financial Statements.
-----------------------------
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
- ------ -------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------
None
PART III
--------
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- ------- --------------------------------------------------
(a) Identification of Directors
---------------------------
This item is incorporated herein by reference
to Registrant's Proxy Statement for its 1997
Annual Meeting of Stockholders.
-5-
(b) Identification of Executive Officers
------------------------------------
In accordance with Regulation S-K Item
401(b), Instruction 3, the information required by
Item 10(b) concerning the Company's executive
officers is furnished in a separate item captioned
Executive Officers of the Registrant in Part I
--------------------------------------
above.
(c) Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------
This item is incorporated by reference to
Registrant's Proxy Statement for its 1997 Annual
Meeting of Stockholders.
Item 11. EXECUTIVE COMPENSATION
- ------- ----------------------
This item is incorporated by reference to
Registrant's Proxy Statement for its 1997 Annual
Meeting of Stockholders.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
- ------- -----------------------------------------------
AND MANAGEMENT
--------------
This item is incorporated by reference to
Registrant's Proxy Statement for its 1997 Annual
Meeting of Stockholders.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- ------- ---------------------------------------------
This item is incorporated by reference to
Registrant's Proxy Statement for its 1997 Annual
Meeting of Stockholders.
PART IV
--------
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
- ------- -------------------------------------------
REPORTS ON FORM 8-K
-------------------
(a)(1) Index to Financial Statements:
-----------------------------
The following consolidated financial
statements and Report of Ernst & Young LLP,
Independent Auditors, included in the Registrant's
Annual Report to Stockholders for the year ended
December 31, 1996 are incorporated herein by
reference:
Consolidated Balance Sheets - December 31,
1996 and 1995
Consolidated Statements of Earnings - Years
Ended December 31, 1996, 1995 and 1994
Consolidated Statements of Stockholders'
Equity - Years Ended December 31, 1996,
1995 and 1994
Consolidated Statements of Cash Flows - Years
Ended December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements -
December 31, 1996
-6-
(2) The following financial statement
schedule should be read in conjunction with
the consolidated financial statements
included in the Registrant's Annual Report to
Stockholders for the year ended December 31,
1996:
Schedule II - Valuation and Qualifying Accounts
Financial statement schedules not
included herein have been omitted because
they are not applicable or the required
information is shown in the consolidated
financial statements or notes thereto.
(3) Exhibits required by this item are
listed on the Exhibit Index attached to this
report and hereby incorporated by reference.
(b) Reports on Form 8-K Filed in the Fourth Quarter
----------------------------------------------
None
(c) Exhibits
--------
The Exhibit Index attached to this report is
hereby incorporated by reference.
(d) Financial Statement Schedules
-----------------------------
Following is the schedule as referenced in
the Index to Financial Statements included in Item
-----------------------------
14(a)(2) above.
-7-
SCHEDULE II
Fairfield Communities, Inc. and Subsidiaries
Valuation and Qualifying Accounts
(In thousands)
<TABLE>
Additions
----------------------
Balance at Charged Charged to Balance at
Beginning to Costs Other End of
Description of Period and Expenses Accounts Deductions Period
- -------------------------- --------- ------------ -------- ---------- ------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1996
Deducted from asset accounts:
Allowance for loan losses $14,200 $5,390 $ - $ (5,340)(a) $14,250
======= ====== ======= ======== =======
Valuation allowance for
deferred tax assets $20,415 $ - $ - $(20,415)(b) $ -
======= ====== ======= ======== =======
Year Ended December 31, 1995
Deducted from asset accounts:
Allowance for loan losses $11,322 $6,505 $ - $ (3,627)(c) $14,200
======= ====== ======= ======== =======
Valuation allowance for
deferred tax assets $26,131 $ - $ 547(d) $ (6,263)(e) $20,415
======= ====== ======= ======== =======
Year Ended December 31, 1994
Deducted from asset accounts:
Allowance for loan losses $10,992 $4,430 $ - $ (4,100)(c) $11,322
======= ====== ======= ======== =======
Valuation allowance for
deferred tax assets $33,649 $ - $ - $ (7,518)(e) $26,131
======= ====== ======= ======== ========
</TABLE>
(a) Includes uncollectible loans receivable written-off, net
of recoveries, and $1,200 credited to "Other income".
(b) Includes $19,108 utilization of pre-confirmation income
tax attributes credited to paid-in capital. Other
deductions represent the refinement of prior year
estimates of certain deferred tax assets.
(c) Uncollectible loans receivable written-off, net of recoveries.
(d) Represents the refinement of prior year estimates of
certain deferred tax assets.
(e) Utilization of pre-confirmation income tax attributes
credited to paid-in capital.
-8-
SIGNATURE PAGE
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the
undersigned duly authorized.
FAIRFIELD COMMUNITIES, INC.
Date: March 14, 1997 By /s/ J.W. McConnell
---------------------------------
J.W. McConnell, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following persons on behalf of the registrant in the
capacities on the dates indicated:
Date: March 14, 1997 By /s/ Les R. Baledge*
--------------------------------
Les R. Baledge, Director
Date: March 14, 1997 By /s/ Russell A. Belinsky*
--------------------------------
Russell A. Belinsky, Director
Date: March 14, 1997 By /s/ Ernest D. Bennett, III*
--------------------------------
Ernest D. Bennett, III, Director
Date: March 14, 1997 By /s/ Philip L. Herrington*
--------------------------------
Philip L. Herrington, Director
Date: March 14, 1997 By /s/ Bryan D. Langton*
--------------------------------
Bryan D. Langton, Director
Date: March 14, 1997 By /s/ Charles D. Morgan*
--------------------------------
Charles D. Morgan, Director
Date: March 14, 1997 By /s/ William C. Scott*
--------------------------------
William C. Scott, Director
Date: March 14, 1997 By /s/ J. W. McConnell
---------------------------------
J. W. McConnell, Director, President
and Chief Executive Officer
Date: March 14, 1997 By /s/ Robert W. Howeth
----------------------------------
Robert W. Howeth, Senior Vice President
and Chief Financial Officer
Date: March 14, 1997 By /s/ William G. Sell
----------------------------------
William G. Sell, Vice President/Controller
(Chief Accounting Officer)
Date: March 14, 1997 *By /s/ J. W. McConnell
----------------------------------
J. W. McConnell, Attorney-in-Fact
-9-
FAIRFIELD COMMUNITIES, INC.
EXHIBIT INDEX
-------------
Exhibit
Number
- ------
3(a) Second Amended and Restated Certificate
of Incorporation of the Registrant,
effective September 1, 1992 (previously
filed with the Registrant's Current
Report on Form 8-K dated September 1,
1992 and incorporated herein by
reference)
3(b) Fifth Amended and Restated Bylaws of the
Registrant, dated May 9, 1996
(previously filed with the Registrant's
Current Report on Form 8-K dated May 22,
1996 and incorporated herein by
reference)
4.1 Supplemented and Restated Indenture between
the Registrant, Fairfield River Ridge, Inc.,
Fairfield St. Croix, Inc. and IBJ Schroder
Bank & Trust Company, as Trustee, and
Houlihan Lokey Howard & Zukin, as Ombudsman,
dated September 1, 1992, related to the
Senior Subordinated Secured Notes (previously
filed with the Registrant's Current Report on
Form 8-K dated September 1, 1992 and
incorporated herein by reference)
4.2 First Supplemental Indenture to the
Supplemented and Restated Indenture
referenced in 4.1 above, dated September 1,
1992 (previously filed with the Registrant's
Current Report on Form 8-K dated September 1,
1992 and incorporated herein by reference)
4.3 Second Supplemental Indenture to the
Supplemented and Restated Indenture
referenced in 4.1 above, dated September 1,
1992 (previously filed with the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1992 and incorporated herein by
reference)
4.4 Third Supplemental Indenture to the
Supplemented and Restated Indenture
referenced in 4.1 above, dated March 18, 1993
(previously filed with the Registrant's
Quarterly Report on Form 10-Q for the quarter
ended March 31, 1993 and incorporated herein
by reference)
4.5 Certificate of Designation, Preferences, and
Rights of Series A Junior Participating<PAGE>
Preferred Stock, dated September 1, 1992
(previously filed with the Registrant's
Current Report on Form 8-K dated September 1,
1992 and incorporated herein by reference)
10.1 Amended and Restated Revolving Credit and
Term Loan Agreement, dated September 28,
1993, by and between the Registrant,
Fairfield Myrtle Beach, Inc., Suntree
Development Company, Fairfield Acceptance
Corporation ("FAC") and The First National
Bank of Boston ("FNBB") (previously filed
with the Registrant's Current Report on Form
8-K dated October 1, 1993 and incorporated
herein by reference)
10.2 First Amendment to Amended and Restated
Revolving Credit Agreement, referenced in
10.1 above, dated May 13, 1994 (previously
filed with the Registrant's Quarterly Report
on Form 10-Q for the quarter ended September
30, 1994 and incorporated herein by
reference)
10.3 Second Amendment to Amended and Restated
Revolving Credit Agreement, referenced in
10.1 above, dated December 9, 1994
(previously filed with the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1994 and incorporated herein by
reference)
-10-
Exhibit
Number
- ------
10.4 Third Amendment to Amended and Restated
Revolving Credit Agreement, referenced in
10.1 above, dated December 19, 1994
(previously filed with the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1994 and incorporated herein by
reference)
10.5 Fourth Amendment to Amended and Restated
Revolving Credit Agreement, referenced in
10.1 above, dated November 20, 1995
(previously filed with the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1995 and incorporated herein by
reference)
10.6 Fifth Amendment to Amended and Restated
Revolving Credit Agreement, referenced in
10.1 above, dated January 25, 1996
(previously filed with the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1995 and incorporated herein by<PAGE>
reference)
10.7 Sixth Amendment to Amended and Restated
Revolving Credit Agreement, referenced in
10.1 above, dated December 12, 1996
(attached)
10.8 Stock Purchase Agreement, dated April 5,
1994, between the Registrant and Security
Capital Bancorp (previously filed with the
Registrant's Current Report on Form 8-K dated
April 14, 1994 and incorporated herein by
reference)
10.9 Limited Partnership Agreement, dated March 3,
1981, between Harbour Ridge, Inc., Fairfield
River Ridge, Inc. and Harbour Ridge
Investments, Inc. forming the limited
partnership of Harbour Ridge, Ltd.
(previously filed with the Registrant's
Registration Statement on Form S-7 No. 2-
75301 effective February 11, 1982 and
incorporated herein by reference)
10.10 Sugar Island Associates, Ltd. Amended
Limited Partnership Agreement, dated
October 17, 1984 (previously filed with
the Registrant's current Report on Form
8-K dated October 25, 1984 and
incorporated herein by reference)
10.11 Rights Agreement, dated September 1,
1992, between Registrant and Society
National Bank, as Rights Agent
(previously filed with the Registrant's
Current Report on Form 8-K dated
September 1, 1992 and incorporated
herein by reference)
10.12 Amendment to Rights Agreement,
referenced in 10.11 above, dated
September 20, 1994 (previously filed
with the Registrant's Form 8-A/A dated
November 1, 1994 and incorporated herein
by reference)
10.13 Appointment and Acceptance Agreement,
dated March 3, 1994, between the
Registrant and FNBB appointing FNBB as
successor Rights Agent (previously filed
with the Registrant's Annual Report on
Form 10-K/A for the year ended December
31, 1993 and incorporated herein by
reference)
10.14 Sixth Amended and Restated Title
Clearing Agreement by and among the
Registrant, FAC, Lawyers Title Insurance<PAGE>
Corporation, FNBB, First Commercial
Trust Company, N.A., and Capital Markets
Assurance Corporation, dated July 31,
1996 (attached)
-11-
Exhibit
Number
- -----
10.15 Fourth Amended and Restated Title
Clearing Agreement by and among the
Registrant, FAC, Colorado Land Title
Company, FNBB, First Commercial Trust
Company, N.A. and Capital Markets
Assurance Corporation, dated July 31,
1996 (attached)
10.16 Westwinds Third Amended and Restated
Title Clearing Agreement by and among
the Registrant, Fairfield Myrtle
Beach, Inc., FAC, Lawyers Title
Insurance Corporation, FNBB, and Resort
Funding, Inc., dated November 15, 1992
(previously filed with the Registrant's
Annual Report on Form 10-K for the year
ended December 31, 1992 and incorporated
herein by reference)
10.17 First Amendment to Westwinds Third
Amended and Restated Title Clearing
Agreement, referenced in 10.16 above, by
and among the Registrant, Fairfield
Myrtle Beach, Inc., FAC, Lawyers Title
Insurance Corporation, FNBB, and First
Commercial Trust Company, N.A., dated
September 29, 1993 (attached)
10.18 Second Amendment to Westwinds Third
Amended and Restated Title Clearing
Agreement, referenced in 10.16 above, by
and among the Registrant, Fairfield
Myrtle Beach, Inc., FAC, Lawyers Title
Insurance Corporation, FNBB, and Capital Markets
Assurance Corporation, dated March 28,
1995 (attached)
10.19 Third Amendment to Westwinds Third
Amended and Restated Title Clearing
Agreement, referenced in 10.16 above, by
and among the Registrant, Fairfield
Myrtle Beach, Inc., FAC, Lawyers Title
Insurance Corporation, FNBB and Capital
Markets Assurance Corporation, dated
July 31, 1996 (attached)<PAGE>
10.20 Third Amended and Restated Revolving
Credit Agreement between FAC and FNBB,
dated September 28, 1993 (previously
filed with Registrant's Current Report
on Form 8-K dated October 1, 1993 and
incorporated herein by reference)
10.21 First Amendment to Third Amended and
Restated Revolving Credit Agreement,
referenced in 10.20 above, dated
December 9, 1994 (previously filed with
the Registrant's Annual Report on Form
10-K for the year ended December 31,
1994 and incorporated herein by
reference)
10.22 Second Amendment to Third Amended and
Restated Revolving Credit Agreement,
referenced in 10.20 above, dated
December 19, 1994 (previously filed with
the Registrant's Annual Report on Form
10-K for the year ended December 31,
1994 and incorporated herein by
reference)
10.23 Third Amendment to Third Amended and
Restated Revolving Credit Agreement,
referenced herein in 10.20 above, dated
December 12, 1996 (attached)
10.24 Pledge and Servicing Agreement between
Fairfield Funding Corporation ("FFC"),
FAC, First Commercial Trust Company,
N.A. and Texas Commerce Trust Company,
N.A., dated September 28, 1993
(previously filed with Registrant's
Current Report on Form 8-K filed October
1, 1993 and incorporated herein by
reference)
-12-
Exhibit
Number
- ------
10.25 Third Amended and Restated Operating
Agreement, dated December 9, 1994,
between the Registrant and FAC
(previously filed with the Registrant's
Annual Report on Form 10-K for the year
ended December 31, 1994 and incorporated<PAGE>
herein by reference)
10.26 Amended and Restated Credit Agreement,
with an effective restatement date of
October 2, 1996, among the Registrant,
Fairfield Capital Corporation ("FCC"),
FAC, Triple-A One Funding Corporation
and Capital Markets Assurance
Corporation as Administrative Agent and
Collateral Agent (previously filed with
the Registrant's Quarterly Report on
Form 10-Q for the quarter ended
September 30, 1996 and incorporated
herein by reference)
10.27 Amended and Restated Receivables
Purchase Agreement with an effective
restatement date of October 2, 1996,
among the Registrant, FAC, Fairfield
Myrtle Beach, Inc. and FCC (previously
filed with the Registrant's Quarterly
Report on Form 10-Q for the quarter
ended September 30, 1996 and
incorporated herein by reference)
10.28 Amended and Restated Nashville Title
Clearing Agreement by and among the
Registrant, FAC, Lawyers Title Insurance
Corporation, FNBB, and Capital Markets
Assurance Corporation, dated July 31,
1996 (attached)
10.29 Amended and Restated Seawatch Plantation Title
Clearing Agreement by and among the
Registrant, Fairfield Myrtle Beach, Inc.,
FAC, Lawyers Title Insurance
Corporation, FNBB, and Capital Markets
Assurance Corporation, dated July 31,
1996 (attached)
10.30 Third Amended and Restated Supplementary
Trust Agreement (Arizona) by and among
the Registrant, FAC, First American
Title Insurance Company, FNBB, and
Capital Markets Assurance Corporation,
dated March 28, 1995 (attached)
10.31 First Amendment to Third Amended and
Restated Supplementary Trust Agreement
(Arizona), referenced in 10.30 above, by
and among the Registrant, FAC, First
American Title Insurance Company, FNBB,
and Capital Markets Assurance
Corporation, dated July 31, 1996
(attached)
COMPENSATORY PLANS OR ARRANGEMENTS
10.32 Form of Warrant Agreement between the
Registrant and directors of the
Registrant (previously filed with the
Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30,
1993 and incorporated herein by
reference)
10.33 Registrant's Savings/Profit Sharing
Plan, effective July 1, 1994 (previously
filed with the Registrant's Annual
Report on Form 10-K for the year ended
December 31, 1994 and incorporated
herein by reference)
10.34 Amendment Number One to Registrant's
Savings/Profit Sharing Plan referenced
in 10.33 above, effective January 1,
1995 (attached)
10.35 Amendment Number Two to Registrant's
Savings/Profit Sharing Plan referenced
in 10.33 above, effective January 1,
1996 (previously filed with the
Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995 and
incorporated herein by reference)
-13-
Exhibit
Number
- ------
10.36 Amendment Number Three to Registrant's
Savings/Profit Sharing Plan referenced
in 10.33 above, effective September 20,
1996 (attached)
10.37 Employment Agreement, dated September
20, 1991, by and between the Registrant
and Mr. John W. McConnell (previously
filed with Registrant's Annual Report on
Form 10-K for the year ended December
31, 1991 and incorporated herein by
reference)
10.38 Employment Contract, effective January
1, 1994, by and between the Registrant
and Mr. Morris E. Meacham (previously
filed with Registrant's Annual Report on
Form 10-K/A for the year ended December
31, 1993 and incorporated herein by
reference)
10.39 Employment Agreement, dated September
20, 1991, by and between the Registrant
and Mr. Marcel J. Dumeny (previously
filed with Registrant's Annual Report on
Form 10-K for the year ended December<PAGE>
31, 1991 and incorporated herein by
reference)
10.40 Form of Amendment No. One to Employment
Agreements between Registrant and
certain officers (previously filed with
Registrant's Current Report on Form 8-K
dated September 1, 1992 and incorporated
herein by reference)
10.41 Form of Warrant Agreement between
Registrant and certain officers and
executives of the Registrant (previously
filed with Registrant's Quarterly Report
on Form 10-Q for the quarter ended
September 30, 1993 and incorporated
herein by reference)
10.42 Registrant's First Amended and Restated
1992 Warrant Plan (previously filed with
Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30,
1993 and incorporated herein by
reference)
10.43 Form of Indemnification Agreement
between the Registrant and certain
officers and directors of the Registrant
(previously filed with the Registrant's
Current Report on Form 8-K dated
September 1, 1992 and incorporated
herein by reference)
10.44 Form of Severance Agreement between the
Registrant and certain officers of the
Registrant (previously filed with
Registrant's Annual Report on Form 10-
K/A for the year ended December 31, 1993
and incorporated herein by reference)
10.45 Registrant's Excess Benefit Plan,
adopted February 1, 1994 (previously
filed with the Registrants Annual Report
on Form 10-K/A for the year ended
December 31, 1993 and incorporated
herein by reference)
10.46 First Amendment to Excess Benefit Plan,
adopted May 11, 1995 (previously filed
with the Registrant's Quarterly Report
on Form 10-Q for the quarter ended June
30, 1995 and incorporated herein by
reference)
10.47 Registrant's Key Employee Retirement
Plan, adopted January 1, 1994
(previously filed with Registrant's
Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994 and
incorporated herein by reference)
10.48 First Amendment to Key Employee
Retirement Plan, adopted May 11, 1995
(previously filed with Registrant's
Quarterly Report on Form 10-Q for the
quarter ended June 30, 1995 and
incorporated herein by reference)
-14-
Exhibit
Number
- ------
10.49 Restricted Stock Agreement between the
Registrant and John W. McConnell,
entered into on December 19, 1996
(attached)
11 Computation of earnings per share (attached)
13 Portions of Registrant's Annual Report to
Stockholders for the year ended December 31,
1996 which are incorporated herein by
reference: POINTS; PLACES; PROPERTY PORTFOLIO;
Common Stock Prices; Selected
Financial and Other Data; Management's
Discussion and Analysis of Financial
Condition and Results of Operations; Report
of Ernst & Young LLP, Independent Auditors;
Consolidated Balance Sheets; Consolidated
Statements of Earnings; Consolidated
Statements of Stockholders' Equity;
Consolidated Statements of Cash Flows and
Notes to Consolidated Financial Statements
(attached)
21 Subsidiaries of the Registrant (attached)
23 Consent of Ernst & Young LLP, Independent
Auditors (attached)
24 Powers of Attorney (attached)
27 Financial Data Schedule (attached)<PAGE>
SIXTH AMENDMENT TO AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT
among
FAIRFIELD COMMUNITIES, INC.
FAIRFIELD MYRTLE BEACH, INC.
and
THE FIRST NATIONAL BANK OF BOSTON,
INDIVIDUALLY AND AS AGENT
THIS AMENDMENT (this "Amendment") dated as of December
12, 1996, is made by and among FAIRFIELD COMMUNITIES, INC.,
a Delaware corporation (the "Company or "Fairfield"),
FAIRFIELD MYRTLE BEACH, INC., a Delaware corporation
("Myrtle Beach", and together with Fairfield, the
"Borrowers"), THE FIRST NATIONAL BANK OF BOSTON, a national
banking association ("FNBB") and THE FIRST NATIONAL BANK OF
BOSTON, as agent for itself and the Lenders (the "Agent"),
all parties to a certain Amended and Restated Revolving
Credit Agreement dated as of September 28, 1993, as amended
by a First Amendment to Amended and Restated Revolving
Credit Agreement dated as of May 13, 1994, as further
amended by a Consent, Waiver and Agreement dated as of
September 23, 1994, as further amended by a Second Amendment
to Amended and Restated Revolving Credit Agreement dated as
of December 9, 1994, as further amended by a Third Amendment
to Amended and Restated Revolving Credit Agreement dated as
of December 19, 1994, as further amended by a Fourth
Amendment to Amended and Restated Revolving Credit Agreement
dated as of November 20, 1995, and as further amended by a
Fifth Amendment to Amended and Restated Revolving Credit
Agreement dated as of January 25, 1996 (as so amended, the
"Credit Agreement"). This Amendment is joined in by
Fairfield Acceptance Corporation, a Delaware corporation
("FAC"), by reason of the Unconditional Guaranty of Payment
and Performance, dated as of September 28, 1993, from FAC in
favor of the Agent (the "Fairfield Guaranty"). All
capitalized terms used herein and not otherwise defined
shall have the same respective meanings herein as in the
Credit Agreement.
WHEREAS, FNBB, the Borrowers and the Agent have agreed
to extend the maturity date of the Revolving Credit Loans
and to amend the tangible net worth covenant appearing in
Section 10.5 of the Credit Agreement;
NOW, THEREFORE, in consideration of the premises, the
Borrowers, FAC, FNBB and the Agent hereby agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT. The Borrowers,
------------------------------
FNBB and the Agent hereby agree to amend the Credit
Agreement as follows:
1.1. The definition of "Maturity Date" appearing in
Section 1.1 of the Credit Agreement is hereby amended by
deleting said definition in its entirety and substituting
therefor the following new definition:
"Maturity Date. January 1, 1999, or if extended in
-------------
accordance with 3.4 hereof, such extended date."
1.2. Section 1.1 of the Credit Agreement is hereby
amended by adding the following new definition to said
Section immediately following the definition of
"Properties":
"Public Offering. The public offering of 900,000
---------------
shares of the Common Stock of the Company, par value
$0.01 per share, described in that certain Form S-3
Registration Statement under the Securities Act of 1933
(Registration No. 333-14875) filed by the Company with
the Securities and Exchange Commission on October
25,1996, and as amended by Amendment No. 1 filed by the
Company with the Securities and Exchange Commission on
November 19, 1996."
1.3. Section 10.5 of the Credit Agreement is hereby
amended by deleting said Section in its entirety and
substituting therefor the following new Section 10.5:
"10.5. Consolidated Tangible Net Worth. The
-----------------------------------
Borrowers will not permit Consolidated Tangible Net
Worth at any time to be less than the sum of (a)
$61,207,000, plus (b) on a cumulative basis, 50% of
positive Consolidated Net Income for each fiscal
quarter beginning with the fiscal quarter ended
December 31, 1994, plus (c) the net proceeds of the
Public Offering, after deducting (i) underwriting
discounts and offering expenses, and (ii) the amount of
such net proceeds applied to (A) the repayment of
principal of and accrued interest on that certain
promissory note of the Company in the original
principal amount of $6,396,108.71, dated June 30, 1994,
payable to VM Investors Partnership and (B) the
repayment of principal and accrued interest or
repurchase (including accrued interest) by the Company
of a portion of the Exchange Notes, plus (d) 100% of
the proceeds (after deducting underwriting discounts
and offering expenses) of any other sale by the Company
of (i) equity securities issued by the Company, or (ii)
warrants or subscription rights for equity securities
issued by the Company."
2. FAC CONSENT. FAC hereby consents to the amendment
-----------
to the Credit Agreement set forth in this Amendment and
confirms its obligations to the Agent and the Lenders under
the Fairfield Guaranty and the Fairfield Guaranty shall
extend to and include the obligations of the Borrowers under
the Credit Agreement as amended by this Amendment. FAC
agrees that all of its obligations to the Agent and the
Lenders evidenced by or otherwise arising under the
Fairfield Guaranty are in full force and effect and are
hereby ratified and confirmed in all respects.
3. OTHER AMENDMENTS. Except as expressly provided in
----------------
this Amendment, all of the terms and conditions of the
Credit Agreement and the other Loan Documents remain in full
force and effect. Each of the Borrowers and FAC confirm and
agree that the Obligations of the Borrowers to the Lenders
and the Agent under the Credit Agreement, as amended hereby,
and all of the other obligations of any of such parties
under the other Loan Documents, are secured by and entitled
to the benefits of the Security Documents.
4. EXECUTION IN COUNTERPARTS. This Amendment may be
-------------------------
executed in any number of counterparts and by each party on
a separate counterpart, each of which when so executed and
delivered shall be an original, but all of which together
shall constitute one instrument. In proving this Amendment,
it shall not be necessary to produce or account for more
than one such counterpart signed by the party against whom
enforcement is sought.
5. HEADINGS. The captions in this Amendment are for
--------
convenience of reference only and shall not define or limit
the provisions hereof.
IN WITNESS WHEREOF, the parties have executed this
Amendment as an instrument under seal to be governed by the
laws of the Commonwealth of Massachusetts, as of the date
first above written.
FAIRFIELD COMMUNITIES, INC.
By:/s/ Robert W. Howeth
-------------------------------
Name: Robert W. Howeth
-----------------------------
Title: Senior Vice President
-----------------------------
FAIRFIELD MYRTLE BEACH, INC.
By:/s/ Robert W. Howeth
-------------------------------
Name: Robert W. Howeth
-----------------------------
Title: Vice President
----------------------------
FAIRFIELD ACCEPTANCE
CORPORATION
By: /s/ Robert W. Howeth
---------------------------------
Name: Robert W. Howeth
-------------------------------
Title: President
------------------------------
THE FIRST NATIONAL BANK
OF BOSTON, Individually and as Agent
By:/s/ Linda J. Carter
-------------------------------
Name: Linda J. Carter
-----------------------------
Title: Vice President
-----------------------------
SIXTH
AMENDED AND RESTATED
TITLE CLEARING AGREEMENT
(LAWYERS)
This Agreement is made and entered into as of July 31,
1996, by and among Fairfield Communities, Inc., a Delaware
corporation (referred to herein as "FCI"); Fairfield
Acceptance Corporation, a Delaware corporation and
wholly-owned subsidiary of FCI (referred to herein as
"FAC"); Lawyers Title Insurance Corporation, a Virginia
corporation (referred to herein as "Nominee"); The First
National Bank of Boston, Boston, Massachusetts (hereinafter
defined as "FNBB"), as agent and lender to FCI pursuant to
the FCI Boston Loan Agreement (as hereinafter defined);
FNBB, as agent and lender to FAC pursuant to the FAC Boston
Loan Agreement (as hereinafter defined); First Commercial
Trust Company, N.A., Little Rock, Arkansas, as trustee
(referred to herein as "1993-A Trustee"), pursuant to the
1993-A Pledge Agreement (as hereinafter defined); and
Capital Markets Assurance Corporation, a New York stock
insurance company, as collateral agent (referred to
hereinafter as "Triple-A Collateral Agent"), pursuant to the
Triple-A Credit Agreement (as hereinafter defined). This
Agreement is made in lieu of and supersedes that certain
Fifth Amended and Restated Title Clearing Agreement dated as
of March 28, 1995, as amended, by and among certain of the
parties hereto, which agreement is hereby canceled.
W I T N E S S E T H:
WHEREAS, FCI is engaged in the development of certain
resort and recreational projects known as Fairfield Bay, Van
Buren and Cleburne Counties, Arkansas; Fairfield Glade,
Cumberland County, Tennessee; Fairfield Branson, Taney
County, Missouri; Fairfield Mountains, Rutherford County,
North Carolina; Fairfield Sapphire Valley, Jackson and
Transylvania Counties, North Carolina; Fairfield Harbour,
Craven County, North Carolina; Sands Atlantic Beach,
Carteret County, North Carolina; Fairfield Ocean Ridge,
Colleton County, South Carolina; Sands Myrtle Beach, Horry
County, South Carolina; Fairfield Plantation, Carroll
County, Georgia; Fairfield Williamsburg and Fairfield
Williamsburg at Kingsgate, York County, Virginia and certain
other properties not subject hereto; and has sold and
continues to sell subdivided Lots (as hereinafter defined),
Undivided Ownership Interests (as hereinafter defined), and
Intervals (as hereinafter defined) to purchasers by way of
contract agreements and installment notes ("Sales
Contracts") whereby the purchaser is permitted to finance
the purchase price for said Lots, Undivided Ownership
Interests and Intervals over a period of time; and
WHEREAS, FNBB is the primary lender responsible for
financing the development of FCI projects and in connection
therewith has obtained a security interest in certain Sales
Contracts as security for the repayment of the borrowings of
FCI under the FCI Boston Loan Agreement and of FAC under the
FAC Boston Loan Agreement, and FNBB has further taken
underlying encumbrances against certain of the Properties
(as hereinafter defined) and certain other properties not
subject to this Agreement at the various FCI projects as
security for repayment of the borrowings of FCI under the
FCI Boston Loan Agreement and of FAC under the FAC Boston
Loan Agreement, which underlying encumbrances on the
Properties have provisions for release for the protection of
the purchasers of Lots, Undivided Ownership Interests and
Intervals, said releases to be given under conditions as set
forth therein; and
WHEREAS, FCI and FAC have entered into arrangements for
the sale by FCI to FAC of certain Sales Contracts and other
receivables pursuant to a Third Amended and Restated
Operating Agreement dated as of December 9, 1994, as
amended; and
WHEREAS, FAC has sold certain Sales Contracts to
Fairfield Funding Corporation, a Delaware corporation
(referred to herein as "FFC"), which Sales Contracts have in
turn been pledged by FFC to the 1993-A Trustee pursuant to
the 1993-A Pledge Agreement; and
WHEREAS, FAC has sold certain Sales Contracts to
Fairfield Capital Corporation, a Delaware corporation
(referred to herein as "FCC"), pursuant to an Amended and
Restated Receivables Purchase Agreement, dated as of July
31, 1996 (the "Triple-A Purchase Agreement") which Sales
Contracts have in turn been pledged by FCC to the Triple-A
Collateral Agent for the benefit of itself, Triple-A One
Funding Corporation, a Delaware corporation (referred to
herein as "Triple-A") and The First National Bank of Boston,
as L/C Bank ("L/C Bank"), pursuant to the Triple-A Credit
Agreement; and
WHEREAS, FNBB (i) has released its lien upon and its
interest in the Sales Contracts and the underlying Lots,
Undivided Ownership Interests and Intervals pledged to the
1993-A Trustee and (ii) has released, or will have released
its lien upon and its interest in, the Sales Contracts and
the underlying Lots, Undivided Ownership Interests and
Intervals as a prior condition to their being pledged to the
Triple-A Collateral Agent; and
WHEREAS, the parties hereto are desirous of
establishing a title clearing mechanism for the purpose of
providing a convenient method of holding and conveying title
to the Properties, releasing encumbrances thereon and
protecting the interests of the various parties hereto as
their interests may appear;
NOW THEREFORE, in consideration of the mutual promises
and covenants set forth herein, the parties hereto agree as
follows:
1. Definitions. For the purposes of this Agreement
-----------
the following words and terms shall have the following
meanings unless the context clearly indicates otherwise:
Community Club means the Community Clubs of Fairfield
---------------
Bay, Arkansas and Fairfield Glade, Tennessee.
FAC means, as appropriate, Fairfield Acceptance
---
Corporation, individually or in its capacity as servicer
under the 1993-A Pledge Agreement or the Triple-A Credit
Agreement.
FAC Boston Loan Agreement means the Third Amended and
--------------------------
Restated Revolving Credit Agreement, dated as of September
28, 1993, between FAC and FNBB, as amended pursuant to the
First Amendment to Third Amended and Restated Revolving
Credit Agreement, dated as of December 9, 1994, between FAC
and FNBB, and as further amended by the Second Amendment to
Third Amended and Restated Revolving Credit Agreement, dated
as of December 19, 1994, between FAC and FNBB, as amended
and in effect from time to time.
FCC means Fairfield Capital Corporation, a Delaware
---
corporation.
FCI means Fairfield Communities, Inc., a Delaware
---
corporation.
FCI Boston Loan Agreement means the Amended and
----------------------------
Restated Revolving Credit Agreement, dated as of September
28, 1993, among FCI, Fairfield Myrtle Beach, Inc., Suntree
Development Company, St. Andrews Management, Inc., Fairfield
Suntree Realty, Inc., and FNBB, as amended pursuant to the
First Amendment to Amended and Restated Revolving Credit
Agreement, dated as of May 13, 1994, as further amended by
Consent Waiver and Agreement, dated as of September 23,
1994, as further amended by Second Amendment to Amended and
Restated Revolving Credit Agreement, dated as of December 9,
1994, as further amended by Third Amendment to Amended and
Restated Revolving Credit Agreement, dated as of December
19, 1994, as further amended by Fourth Amendment to Amended
and Restated Revolving Credit Agreement, dated as of
November 20, 1995, and as further amended by Fifth Amendment
to Amended and Restated Revolving Credit Agreement, dated as
of January 25, 1996, among FCI, Fairfield Myrtle Beach,
Inc., and FNBB, as amended and in effect from time to time.
FFC means Fairfield Funding Corporation, a Delaware
---
corporation.
FNBB means, as appropriate, The First National Bank of
----
Boston, as lender and agent for itself and such other lenders who
may hereinafter become parties to the FCI Boston Loan
Agreement, and The First National Bank of Boston, as lender
and agent for itself and such other lenders who may
hereinafter become parties to the FAC Boston Loan Agreement.
Intervals means those timeshare intervals created or to
---------
be created in the Properties conveyed to Nominee in
connection herewith, as more fully set forth in Schedule A
attached hereto and made a part hereof, as amended from time
to time, and all such Properties subsequently conveyed to
Nominee in the continuance of this Agreement. Intervals are
created in the Properties pursuant to the filing of regime
documents creating an underlying ownership interest which is
the subject of a Sales Contract, which ownership interest
consists of a fixed week or undivided interest in fee simple
in a lodging unit or group of lodging units at a Project.
L/C Bank means The First National Bank of Boston, as
--------
L/C Bank under the Triple-A Credit Agreement.
Loan Agreement means, as appropriate, (i) the FCI
---------------
Boston Loan Agreement, (ii) the FAC Boston Loan Agreement,
(iii) the 1993-A Pledge Agreement, or (iv) the Triple-A
Credit Agreement.
Lots means all the subdivided lots created or to be
----
created in the Properties conveyed to Nominee in connection
herewith, as more fully set forth in Schedule A attached
hereto and made a part hereof, as amended from time to time,
and all such Properties subsequently conveyed to Nominee in
the continuance of this Agreement.
Mortgage means a Deed of Trust, Deed to Secure Debt,
--------
Vendor's Lien, mortgage or any other instrument typically
considered to be a mortgage.
Operating Agreement means the Third Amended and
--------------------
Restated Operating Agreement dated as of December 9, 1994,
between FCI and FAC, as amended.
1993-A Pledge Agreement means that certain Pledge and
------------------------
Servicing Agreement dated as of September 28, 1993, by and
among FAC, as Servicer, FFC, as Issuer, 1993-A Trustee, as
Trustee, and Texas Commerce Trust Company, as Standby
Servicer, relating to the issuance by FFC of certain
Interval Ownership and Lot Contract Pay-Through Notes,
Series 1993-A.
POA means timeshare associations organized in
---
connection with the establishment of timesharing projects at
the various FCI projects and other property owners
associations which may have been organized in connection
with the platting or subdividing of vacant lots at the
various FCI projects.
Project means any of the various
-------
recreational/retirement communities developed by FCI.
Properties means those Lots, Undivided Ownership
----------
Interests and Intervals located on the property described in
the various deeds listed in Schedule A attached hereto, as
amended from time to time. The Mortgages on the Properties
in favor of FNBB are listed in Schedule B attached hereto,
as amended from time to time.
Purchasers means those individuals, partnerships,
----------
corporations or other entities who have entered into a Sales
Contract with FCI for the purchase of a Lot, Undivided
Ownership Interest or Interval at an FCI project.
Sales Contracts means those contract agreements and
----------------
installment notes, including promissory notes secured by
Mortgages, heretofore entered into and hereinafter to be
entered into between FCI and various Purchasers for the
purchase of a Lot, Undivided Ownership Interest or Interval
and for which the total purchase price has not been paid by
the Purchaser.
Secured Party means FNBB, the 1993-A Trustee or the
--------------
Triple-A Collateral Agent, as applicable.
Triple-A means Triple-A One Funding Corporation, a
--------
Delaware corporation.
Triple-A Collateral Agent means Capital Markets
-----------------------------
Assurance Corporation, a New York Stock insurance company,
as collateral agent for the benefit of itself, Triple-A and
L/C Bank, pursuant to the Triple-A Credit Agreement.
Triple-A Credit Agreement means that certain Amended
--------------------------
and Restated Credit Agreement dated as of July 31, 1996, by
and among FAC, as servicer, FCI, FCC, as borrower, Triple-A
Collateral Agent, Triple-A and L/C Bank, relating to loans
to be made by Triple-A to FCC.
Triple-A Intervals means those Intervals which give
------------------
rise to certain Sales Contracts pledged, assigned and
transferred to the Triple-A Collateral Agent pursuant to the
Triple-A Credit Agreement. The Triple-A Intervals are
listed on Schedule D attached to this Agreement and made a
part hereof, as amended from time to time.
Triple-A Lots means those Lots which give rise to
--------------
certain Sales Contracts pledged, assigned and transferred to
the Triple-A Collateral Agent pursuant to the Triple-A
Credit Agreement. The Triple-A Lots are listed on Schedule
D attached to this Agreement and made a part hereof, as
amended from time to time.
Triple-A Undivided Ownership Interests means those
-----------------------------------------
Undivided Ownership Interests which give rise to certain
Sales Contracts pledged, assigned and transferred to the
Triple-A Collateral Agent pursuant to the Triple-A Credit
Agreement. The Triple-A Undivided Ownership Interests are
listed on Schedule D attached to this Agreement and made a
part hereof, as amended from time to time.
1993-A Trustee means First Commercial Trust Company,
---------------
N.A., Little Rock, Arkansas, as trustee under the 1993-A
Pledge Agreement.
1993-A Trust Intervals means those Intervals which give
----------------------
rise to certain Sales Contracts pledged, assigned and
transferred to the 1993-A Trustee pursuant to the 1993-A
Pledge Agreement. The 1993-A Trust Intervals are listed on
Schedule C attached to this Agreement and made a part
hereof, as amended from time to time.
1993-A Trust Lots means those Lots which give rise to
-----------------
certain Sales Contracts pledged, assigned and transferred to
the 1993-A Trustee pursuant to the 1993-A Pledge Agreement.
The 1993-A Trust Lots are listed on Schedule C attached to
this Agreement and made a part hereof, as amended from time
to time.
1993-A Trust Undivided Ownership Interests means those
-------------------------------------------
Undivided Ownership Interests which give rise to certain
Sales Contracts pledged, assigned and transferred to the
1993-A Trustee pursuant to the 1993-A Pledge Agreement. The
1993-A Trust Undivided Ownership Interests are listed on
Schedule C attached to this Agreement and made a part
hereof, as amended from time to time.
Undivided Ownership Interests means those undivided
-------------------------------
ownership interests created or to be created in the
Properties conveyed to Nominee in connection herewith, as
more fully set forth in Schedule A attached hereto and made
a part hereof, as amended from time to time, and all such
Properties subsequently conveyed to Nominee in continuance
of this Agreement. An Undivided Ownership Interest is that
form of real property ownership in a unit or units committed
to undivided ownership consisting of an undivided interest
in fee simple absolute as a tenant in common with all other
owners of an undivided interest in such unit or units,
whereby an owner is entitled to occupy the same on a
reservation basis and where the owner's fractional interest
is shown on the owner's Sales Contract and deed.
2. Transfer of Properties to Nominee. FCI, by
-------------------------------------
various deeds executed from time to time, has transferred
fee simple title to the Properties identified on Schedule A
to Nominee, subject to those Mortgages identified on
Schedule B. Nominee agrees to acquire and hold legal title
to said Properties in accordance with the terms, provisions
and conditions of this Agreement and for the benefit of FCI,
FAC and the related Secured Party, as their interests may
appear. Except for those Properties for which the
beneficial interest has been transferred to FFC or FCC and
subsequently pledged to the 1993-A Trustee or the Triple-A
Collateral Agent, respectively, the beneficial interest in
all the Properties underlying Sales Contracts conveyed to
Nominee pursuant to this Agreement shall be in FCI, and at
such time as the Sales Contracts are transferred to FAC
pursuant to the Operating Agreement, the beneficial interest
in the Properties underlying those Sales Contracts
transferred to FAC shall pass to FAC with the transference
of said Sales Contracts. In the event FCI elects to
repurchase Sales Contracts previously transferred to FAC,
the beneficial interest in the Properties will be
re-transferred to FCI by FAC when those Sales Contracts are
transferred from FAC back to FCI, all in accordance with the
Operating Agreement. Although Nominee shall be advised of
the transference of the Sales Contracts and the beneficial
interest in the Properties underlying the Sales Contracts,
Nominee shall not be held liable by any party hereto for
acting in good faith on the written instructions of FCI or
FAC even though there may be a mistake as to the proper
owner of the beneficial interest underlying the Sales
Contracts.
Notwithstanding anything herein to the contrary, with
respect to those Properties which are subject to Sales
Contracts with Purchasers who are residents of the State of
New Jersey the following shall apply: Within 180 days of
receipt by FAC or FCI of the first installment payment under
such Sales Contract, FAC or FCI shall notify Nominee to hold
title to such Properties for the benefit of the respective
Purchaser. The beneficial interest in such Properties will
then be held by Nominee for the benefit of the respective
Purchaser until the time of deeding as provided for in the
Sales Contract.
3. Title Ownership and Responsibility of Nominee.
---------------------------------------------
(a) Nominee acknowledges that notwithstanding the fact
that it will be the record owner of the fee simple title to
the Properties, its ownership is subject in all respects to
the provisions of this Agreement, those Mortgages identified
on Schedule B hereto, and the terms and conditions of the
Loan Agreements. Nominee further acknowledges that it holds
fee simple title to the Properties for the benefit of the
other parties hereto and shall have no equitable rights in
the Properties nor any right to the income or profits to be
derived therefrom.
(b) Nominee's function and responsibility during the
existence of this Agreement will be to (i) hold record title
to the Properties for the benefit of the other parties
hereto, FFC and FCC, (ii) convey title as directed upon the
written request of FCI or FAC, as applicable, as the
beneficial owner at such time, and, if applicable, as
servicer under the 1993-A Pledge Agreement or the Triple-A
Credit Agreement, except as provided by Section 12 hereof;
(iii) contemporaneously with the conveyance of any of the
Properties that qualify for deeding in accordance with the
terms of the Sales Contracts, pursuant to authorization from
the related Secured Party as set forth herein, cause with
respect to such Properties such Secured Party's underlying
Mortgage, if any, to be released of record; (iv) where
requested by FCI or a Purchaser, as the case may be, cause
to be issued a title insurance policy to the Purchaser
(provided all title requirements are properly met and the
appropriate premium has been paid); and (v) execute such
instruments as required to be executed pursuant to Sections
11 and 13 hereof. Nominee may authorize any third party,
including any employee of FAC or FCI, by power of attorney,
to execute any instrument required by this Section 3(b).
(c) Except to the extent expressly permitted herein,
Nominee shall have no discretionary authority whatsoever to
exercise any control over the Properties.
(d) Except as set forth in Section 3(b), Nominee
agrees that it will do nothing which will in any way impair,
encumber or otherwise adversely affect in any manner the
title to the Properties.
(e) Nominee shall have no duties and responsibilities
other than those set forth herein, and it shall act only at
the direction of the parties hereto and solely in accordance
with the terms hereof. FCI, FAC and each Secured Party
hereby expressly do not delegate any discretionary duties or
responsibilities to Nominee as are often times associated
with a trustee acting pursuant to the terms and provisions
of a trust agreement.
4. Responsibility of FAC or FCI Relating to
--------------------------------------------------
Conveyances by Nominee.
- ----------------------
(a) FCI shall cause any construction or vendor's lien
or blanket encumbrance (other than FNBB's Mortgages) to be
released and shall be responsible for paying release prices
to the proper party as necessary to secure the release of
the Properties to be conveyed as provided herein.
(b) FCI or FAC, as the case may be, shall prepare all
such deeds, releases, assignments and other documents as may
be necessary to carry out the purpose of this Agreement and
to cause revenue or transfer tax stamps to be properly
affixed as necessary to satisfy recording requirements, and
shall cause all recording fees to be paid and all necessary
instruments to be recorded in the appropriate real estate
records. FCI and FAC agree that each will maintain all
records necessary to identify beneficial ownership of the
Properties.
(c) FCI or FAC, as the case may be, shall be
responsible for advising Nominee and the related Secured
Party of all assignments of the Sales Contracts and
underlying beneficial interests and all conveyances of the
Properties, by furnishing copies of all such assignments and
conveyances to Nominee and to such Secured Party. Such
assignments and conveyances shall take the form of a
"Document of Sale and Assignment of Beneficial Interest" or
a "Document of Pledge and Assignment of Beneficial
Interest," which shall identify those Sales Contracts and
the underlying Properties giving rise to such Sales
Contracts to be assigned or conveyed. Nominee shall be
entitled to rely upon such "Documents of Sale and Assignment
of Beneficial Interest" and "Documents of Pledge and
Assignment of Beneficial Interest" in determining beneficial
ownership of and security interests in the Properties.
(d) FFC has provided Nominee with a copy of an
assignment pledging and assigning all beneficial interest in
the 1993-A Trust Intervals, the 1993-A Trust Undivided
Ownership Interests, the 1993-A Trust Lots and the related
Sales Contracts (previously held by FAC and conveyed to FFC)
to the 1993-A Trustee. FAC, as servicer under the 1993-A
Pledge Agreement, or the 1993-A Trustee shall provide
Nominee with copies of any future assignments of beneficial
interest in the 1993-A Trust Intervals, the 1993-A Trust
Undivided Ownership Interests or the 1993-A Trust Lots,
which assignments shall be in the form of a certificate and
shall identify the 1993-A Trust Intervals, the 1993-A Trust
Undivided Ownership Interests and the 1993-A Trust Lots and
related Sales Contracts assigned thereby. Any such
assignment submitted to Nominee by FAC shall be accompanied
by an approval, in writing, of the 1993-A Trustee. Upon
receipt by the Nominee of any such certificates, (i)
Schedule C shall automatically be deemed to be updated to
exclude the 1993-A Trust Intervals, the 1993-A Trust
Undivided Ownership Interests and the 1993-A Trust Lots
covered by such certificates, (ii) Nominee shall be entitled
to rely upon such certificates in determining beneficial
ownership of the 1993-A Trust Intervals, the 1993-A Trust
Undivided Ownership Interests and the 1993-A Trust Lots
covered by such certificates and (iii) the beneficial
ownership of the 1993-A Trust Intervals, the 1993-A Trust
Undivided Ownership Interests and the 1993-A Trust Lots
covered by such certificates shall be presumed to be in FCI
or FAC, as applicable, and subject to the lien of FNBB under
the Mortgages on Schedule B.
(e) FCC has provided to Nominee on the Closing Date
and Effective Restatement Date (as such terms are defined in
the Triple-A Credit Agreement), and FCC will provide to
Nominee on Contract Grant Dates (as defined in the Triple-A
Credit Agreement), if any, occurring after the Effective
Restatement Date, copies of releases and assignments
evidencing (i) FNBB's release of its lien upon and its
interest in the Triple-A Intervals, the Triple-A Undivided
Ownership Interests, the Triple-A Lots and the related Sales
Contracts, (ii) the transfer of all beneficial interest in
the Triple-A Intervals, the Triple-A Undivided Ownership
Interests, the Triple-A Lots and the related Sales Contracts
from FAC to FCC pursuant to the Triple-A Purchase Agreement
and (iii) the pledge and assignment of the Triple-A
Intervals, the Triple-A Undivided Ownership Interests, the
Triple-A Lots and the related Sales Contracts from FCC to
the Triple-A Collateral Agent pursuant to the Triple-A
Credit Agreement. Upon receipt by the Nominee of any such
future releases and assignments, Schedule D shall
automatically be deemed to be updated to include the Triple-
A Intervals, the Triple-A Undivided Ownership Interests and
the Triple-A Lots covered by such releases and assignments,
and Nominee shall be entitled to rely upon such releases and
assignments in determining beneficial ownership of the
Triple-A Intervals, the Triple-A Undivided Ownership
Interests and the Triple-A Lots covered thereby.
FAC, as servicer under the Triple-A Credit Agreement,
or the Triple-A Collateral Agent, shall provide Nominee with
copies of any future assignments from Triple-A Collateral
Agent to FCC, FAC or FCI, as applicable, of beneficial
interest in the Triple-A Intervals, the Triple-A Undivided
Ownership Interests or the Triple-A Lots, which assignments
shall be in the form of a certificate and shall identify the
Triple-A Intervals, the Triple-A Undivided Ownership
Interests and the Triple-A Lots and related Sales Contracts
assigned thereby. To be effective, any such assignment
submitted to Nominee by FAC shall be accompanied by an
approval, in writing, of the Triple-A Collateral Agent.
Upon receipt by the Nominee of any such certificates, (i)
Schedule D shall automatically be deemed to be updated to
exclude the Triple-A Intervals, the Triple-A Undivided
Ownership Interests and the Triple-A Lots covered by such
certificates, (ii) Nominee shall be entitled to rely upon
such certificates in determining beneficial ownership of the
Triple-A Intervals, the Triple-A Undivided Ownership
Interests and the Triple-A Lots covered thereby and (iii)
the beneficial ownership of the Triple-A Intervals, the
Triple-A Undivided Ownership Interests and the Triple-A Lots
covered by such certificates shall be presumed to be in FCI
or FAC, as applicable, and subject to the lien of FNBB under
the Mortgages on Schedule B.
5. Conveyance and Release of Properties.
------------------------------------
(a) At such time as a Purchaser has paid in full the
purchase price or the requisite percentage of the purchase
price for deeding pursuant to a Sales Contract, and/or has
otherwise fully discharged all of such Purchaser's
obligations and responsibilities required to be discharged
as a condition to deeding, including the payment of all POA
and Community Club dues and assessments, FCI or FAC, as
applicable, as the beneficial owner of the security interest
in such property at such time or as servicer for a Secured
Party which is the beneficial owner of the security interest
in such property at such time, shall direct Nominee in
writing to immediately cause to be released the related
Secured Party's underlying Mortgage(s) with respect to such
Properties, unless otherwise directed in writing by the
related Secured Party(s) pursuant to Section 12 hereof, and
forthwith shall deliver and record a properly executed
Warranty Deed or Special Warranty Deed (with documentary
stamps and recording fees to be paid by FCI or FAC as the
case may be) conveying fee simple title to the Lot,
Undivided Ownership Interest or Interval covered by such
Sales Contract to the Purchaser. Within a reasonable time
following the delivery of the Warranty Deed or Special
Warranty Deed to Purchaser, a title insurance policy shall
also be delivered (provided the Purchaser has paid for such
in connection with his purchase of the Properties involved).
(b) Unless directed otherwise by a Secured Party
pursuant to Section 12 hereof (or otherwise), each Secured
Party hereby authorizes and appoints Nominee as its agent to
release such Secured Party's underlying Mortgages against
any Properties upon receipt by Nominee of a written request
for deeding by FCI or FAC, together with a certification by
an authorized officer of FCI or FAC stating that all of the
conditions to the release from the Mortgage or Mortgages
encumbering such Properties have been satisfied. Each
Secured Party further agrees to execute any additional
documents as may be necessary to be filed of record in order
to verify Nominee's authority to release such Secured
Party's Mortgages as provided herein.
(c) All payments made by Purchasers pursuant to the
terms of their Sales Contract shall be made directly to FCI,
FAC, FFC or FCC, as the case may be, for the benefit of the
relevant Secured Party, if any, pursuant to the terms of the
related Loan Agreement. No payments are to be received by
Nominee.
6. Default by Purchaser. Where a Purchaser has
---------------------
recorded his/her Sales Contract and Purchaser defaults and
otherwise refuses to reconvey legal or equitable title to
Nominee, Nominee shall assign the recorded Sales Contract to
FCI or FAC (as applicable, as the beneficial owner of such
recorded Sales Contract, or, if applicable, as servicer
under the 1993-A Pledge Agreement or the Triple-A Credit
Agreement), for foreclosure or other appropriate action.
Subject to the provisions of Section 12 hereof, Nominee may
rely on the written request of FCI or FAC, as applicable, in
regard to the assignment of said recorded Sales Contracts.
7. Community Club and POA Voting Rights. Voting
----------------------------------------
rights in a Community Club or POA which may inure to the
benefit of Nominee as legal titleholder shall be assigned by
Nominee to FCI or, at the option of FCI, FCI may require an
irrevocable proxy be delivered unto it by Nominee so that
FCI may continue to exercise all such voting rights.
8. Warranty as to Title. FCI represents and warrants
--------------------
unto Nominee that it has transferred fee simple title to the
Properties to Nominee, and that its deeds of conveyance to
Nominee convey to said Nominee title subject only to
(i) subdivision and condominium restrictions, covenants,
etc., including timeshare declarations, (ii) road rights of
way and easements, (iii) utility easements, (iv) the rights
of Purchasers who have entered into the Sales Contracts,
(v) those Mortgages set out on Schedule B attached hereto,
(vi) other such miscellaneous restrictions, covenants and
Mortgages as those enumerated above, and (vii) the terms of
this Agreement.
9. Additional Properties. From time to time FCI or
---------------------
FAC may convey to Nominee additional platted lots and
timeshare units or such acreage as FCI contemplates that it
will plat or subdivide, to be held by Nominee as Properties
subject to the terms and conditions of this Agreement, and
all parties recognize that this Agreement shall be binding
upon such additional Properties. Only platted lots and
timeshare units or acreage which FCI contemplates will be
platted or subdivided may be conveyed to Nominee, and such
conveyances shall exclude, except as noted above, raw
acreage and unplatted properties which may be owned from
time to time by FCI or FAC, as the case may be. Nominee
shall have the right to review all proposed conveyances to
assure compliance with the provisions of this section and
the terms of this Agreement; and in addition thereto,
Nominee shall have the right to refuse to accept any
conveyance of such additional platted lots and timeshare
units if they are located in jurisdictions which prohibit
Lawyers Title Insurance Corporation from acting as Nominee
under the terms and provisions of this Agreement.
10. Indemnification. FCI and FAC jointly and
---------------
severally agree to indemnify and hold harmless Nominee from
any and all claims, demands, actions or causes of action in
any way relating to or arising out of the record ownership
of the Properties or out of the good faith discharge by
Nominee of any of the terms and conditions of this
Agreement, including all costs and expenses of any nature
that Nominee may incur. Each Secured Party shall indemnify
and hold harmless Nominee from any and all claims, demands,
actions or causes of action, including all costs and
expenses of any nature that Nominee may incur in connection
therewith, which relate to or arise out of any act or
failure to act of Nominee, which action or inaction was in
good faith pursuant to and in reliance upon written
instructions from such Secured Party to Nominee. With
respect to actions related to particular Properties, the
parties hereto expressly acknowledge that Nominee shall be
entitled to rely upon the written instructions of FCI, FAC
or the Secured Party which has a first position lien on such
Properties as set forth herein and in the Schedules hereto,
and Nominee shall have no liability for any action taken in
good faith in such reliance. FCI or FAC, as the case may
be, shall reimburse Nominee for all costs, fees and expenses
incurred by it relating to its serving as Nominee under the
terms and provisions of this Agreement. It is the intent of
the parties to insure that Nominee shall incur no liability
whatsoever in connection with the good faith performance of
its functions under this Agreement, and in connection
therewith, all parties hereto release and waive any claims
they may have against Nominee which may result from the
performance in good faith by Nominee of its responsibilities
under this Agreement.
11. Mortgages, Platting and Reconveyance of the
--------------------------------------------------
Properties. Subject to the provisions of Section 12 hereof,
- ----------
upon written request of FCI, Nominee shall, except as to
such Properties as FCI may have previously assigned or
transferred beneficial interest, reconvey all or any portion
of the Properties to FCI, subject to the Mortgages listed in
Exhibit B, for the purpose of granting construction
Mortgages or for any other purpose for which FCI may require
legal title; and further, Nominee agrees to execute such
Mortgages covering such Properties, as requested in writing
by FCI, to any Secured Party or such third parties as FCI
may direct. Nominee further agrees to execute any and all
documents, including plats, covenants and restrictions, as
may be necessary to add and/or revise existing or new
subdivisions with respect to the Properties.
12. Default Under Loan Agreements. In the event of
------------------------------
default of FCI, FAC, FFC or FCC under any of the Loan
Agreements, the related Secured Party shall notify Nominee
in writing of such event at such time as notice of such
default is given to FCI, FAC, FFC or FCC, as the case may
be, which writing shall identify those Properties giving
rise to Sales Contracts relating to the defaulted Loan
Agreement and which may further instruct Nominee that, with
respect to those Properties, that Nominee shall act only
upon the written instructions of the related Secured Party
and any prior lienholder with respect to such Properties and
the related Sales Contracts, whereupon Nominee shall only
take action with respect to the Properties identified in the
notice, notwithstanding instructions of FCI, FAC, FFC or FCC
to the contrary, as directed by the related Secured Party
and any prior lienholder.
The receipt of any notice of default shall relate only
to the specific Loan Agreement identified therein. As to
all other Loan Agreements, Nominee shall continue to act
upon the written request of FCI, FAC, FNBB, the 1993-A
Trustee or the Triple-A Collateral Agent, as the case may
be, as to the Properties relating thereto.
Any notice of default given Nominee pursuant to this
Section 12 shall be mailed by first class mail, postage
prepaid, return receipt requested, to the following address:
Lawyers Title Insurance Corporation
600 North Pearl Street, Suite 700
Lock Box 185
Dallas, TX 75201
Attn: Michael E. Hastings
In no event shall Nominee have any responsibility for
preparation of documents referred to in Section 4(b) of this
Agreement. As to Properties relating to any defaulted Loan
Agreement, said documents shall be prepared by the related
Secured Party or its designee.
13. Provisions Related to Pooling/Pledge/Sale
--------------------------------------------------
Agreements. Notwithstanding anything herein to the contrary
- ----------
and specifically notwithstanding the provisions of
Section 3(a) hereof, the interest in Properties related to
the 1993-A Trust Lots, the 1993-A Trust Undivided Ownership
Interests and the 1993-A Trust Intervals granted the 1993-A
Trustee by this Agreement and the 1993-A Pledge Agreement
are hereby deemed superior and senior to any and all
interests granted pursuant to the Mortgages listed in
Schedule B hereto. The parties hereto acknowledge that
Nominee holds title to the 1993-A Trust Lots, the 1993-A
Trust Undivided Ownership Interests and the 1993-A Trust
Intervals for the benefit of the purchasers of the 1993-A
Trust Lots, the 1993-A Trust Undivided Ownership Interests
and the 1993-A Trust Intervals and the 1993-A Trustee,
subject only to the terms and conditions of the related
Sales Contracts and the 1993-A Pledge Agreement,
respectively. The Nominee shall not transfer, pledge or
assign the 1993-A Trust Lots, the 1993-A Trust Undivided
Ownership Interests or the 1993-A Trust Intervals except as
expressly provided herein.
Notwithstanding anything herein to the contrary and
specifically notwithstanding the provisions of Section 3(a)
hereof, the interest in Properties related to the Triple-A
Lots, the Triple-A Undivided Ownership Interests and the
Triple-A Intervals granted the Triple-A Collateral Agent by
this Agreement and the Triple-A Credit Agreement are hereby
deemed superior and senior to any and all interests granted
pursuant to the Mortgages listed in Schedule B hereto. The
parties hereto acknowledge that Nominee holds title to the
Triple-A Lots, the Triple-A Undivided Ownership Interests
and the Triple-A Intervals for the benefit of the purchasers
of the Triple-A Lots, the Triple-A Undivided Ownership
Interests and the Triple-A Intervals and the Triple-A
Collateral Agent, subject only to the terms and conditions
of the related Sales Contracts and the Triple-A Credit
Agreement, respectively. The Nominee shall not transfer,
pledge or assign the Triple-A Lots, the Triple-A Undivided
Ownership Interests or the Triple-A Intervals except as
expressly provided herein. The provisions of this
paragraph, however, shall not apply to any Triple-A Lots,
Triple-A Undivided Ownership Interests and Triple-A
Intervals that may be granted the Triple-A Collateral Agent
by this Agreement and the Triple-A Credit Agreement on
Contract Grant Dates (as defined in the Triple-A Credit
Agreement), if any, occurring after the Effective
Restatement Date (as defined in the Triple-A Credit
Agreement), until releases and assignments covering such
Property have been delivered to the Nominee in accordance
with the requirements of Section 4(e) hereof.
14. Miscellaneous.
-------------
(a) This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their successors
and assigns. This Agreement constitutes the entire
understanding and agreement between the parties with respect
to the subject matter hereof and may not be changed or
modified orally but only by instrument in writing signed by
the party against which enforcement of such change or
modification is sought.
(b) This Agreement may be amended from time to time
for the purpose of adding additional parties and revising
the terms herein, provided, however, that except as
specifically provided in paragraph 15 below, no such
amendment shall be effective until all parties hereto have
agreed in writing to such revisions.
(c) This instrument shall be construed in accordance
with and governed by the laws of the State of Arkansas. In
the event any clause or provision of this Agreement is
declared to be invalid, the invalidity of any such clause or
provision shall not affect the remaining clauses and
provisions of this Agreement which shall remain in full
force and effect.
(d) No party may make an assignment of its interest in
this Agreement without obtaining the written consent of the
other parties hereto; provided, however, that to the extent
permitted by the FCI Boston and FAC Boston Loan Agreements,
the 1993-A Pledge Agreement or the Triple-A Credit
Agreement, respectively, FNBB, the 1993-A Trustee and the
Triple-A Collateral Agent may be replaced or succeeded as
parties to this Agreement without the consent of the other
parties hereto. The parties further agree to execute
additional documents as may be necessary to carry out the
purposes of this Agreement and to protect the interests of
all parties hereto.
15. Amendment/Termination.
----------------------
(a) This Agreement may be amended solely for the
purpose of identifying and segregating a separate pool of
Sales Contracts, and the related Lots, Undivided Ownership
Interests and Intervals relating thereto, which are to be
sold or pledged pursuant to a pooling, sale or pledge
agreement, by an instrument in writing signed by FCI, FAC,
Nominee and FNBB. Any amendment undertaken pursuant to this
paragraph 15(a) shall not relate to or affect Lots,
Undivided Ownership Interests or Intervals listed on
Schedules C and D attached hereto, nor shall it in any way
impair or amend the rights of the 1993-A Trustee or the
Triple-A Collateral Agent under this Agreement. An executed
copy of any Amendment undertaken pursuant to this paragraph
15(a) shall be provided to all parties to this Agreement.
(b) This Agreement shall be terminable by any party
hereto by giving sixty (60) days written notice to all other
parties of its desire to so terminate. The election by any
party other than FNBB, FCI or FAC to terminate will not
terminate this Agreement with respect to the remaining
parties, provided the remaining parties shall cause to be
substituted a successor party in place of the terminating
party. Upon termination, title to the Properties shall be
conveyed by Nominee in accordance with the written
instructions of FCI, FAC, the 1993-A Trustee or the Triple-A
Collateral Agent, as the case may be, as the beneficial
owner or assignee of the beneficial ownership of such
Properties at such time; except, however, if Nominee has
been notified by any Secured Party in writing that a default
has occurred under a Loan Agreement, as described more fully
in Section 12 of this Agreement, Nominee shall convey title
to the Properties securing the defaulted Loan Agreement in
accordance with the written instructions of the related
Secured Party and first lienholder with respect thereto. In
any event, this Agreement shall terminate, if not sooner
terminated, on January 1, 2010.
16. Notice. Notice under this Agreement shall be
------
given to the parties at the following addresses, or at such
other address as shall be designated by a party in a written
notice to the other parties:
Lawyers Title Insurance Corporation
-----------------------------------
Counsel:
Michael E. Hastings Riker Purcell
Lawyers Title Insurance Lawyers Title Insurance
Corporation Corporation
600 North Pearl Street, Suite 700 6630 West Broad Street
Lock Box 185 Richmond, Virginia 23230
Dallas, Texas 75201 (804) 281-6876
(214) 720-7600 Telecopy: (804) 282-5453
Telecopy: (214) 658-92201
Fairfield Communities, Inc. and
Fairfield Acceptance Corporation
--------------------------------
Counsel:
Marcel Dumeny Gordon Wilbourn
Fairfield Communities, Inc. Rose Law Firm, a
2800 Cantrell Road Professional Association
Little Rock, Arkansas 72202 120 East Fourth Street
(501) 664-6000 Little Rock, Arkansas 72201
Telecopy: (501) 660-7196 (501) 377-0332
Telecopy: (501) 375-1309
The First National Bank of Boston
---------------------------------
Counsel:
Linda J. Carter Marcia Robinson
The First National Bank of Boston Bingham, Dana & Gould
115 Perimeter Center Place, N.E. 150 Federal Street
Suite 500 Boston, Massachusetts 02106
Atlanta, Georgia 30346 (617) 951-8535
(770)390-6500 Telecopy: (617) 951-8736
Telecopy: (770)390-8434
First Commercial Trust Company, N.A.
------------------------------------
Counsel:
Bonnie McKenzie Heartsill Ragon, III
First Commercial Trust Company, Gill Law Firm
National Association 425 West Capitol
Capitol and Broadway Streets Little Rock, Arkansas 72201
First Commercial Building, (501) 376-3800
7th Floor Telecopy: (501) 372-3359
Little Rock, Arkansas 72201
(501) 371-6744
Telecopy: (501) 371-8827
Capital Markets Assurance Corporation
-------------------------------------
885 Third Avenue, 14th Floor Counsel:
New York, NY 10022 Marc D. Wassermann, Esq.
Attn: Head of Exposure Sidley & Austin
Management 1722 Eye Street, NW
(212) 891-8806 Washington, D.C.
Telecopy: (212) 755-5462 (202)736-8000
Telecopy: (202) 736-8711
Notice to each of the aforementioned parties shall be
given by Nominee if either FCI or FAC should default in the
performance of any of their respective obligations under
this Agreement.
17. Execution. This Agreement may be executed in one
---------
or more counterparts, all of which shall constitute one and
the same instrument.
[THIS SPACE LEFT BLANK INTENTIONALLY]
DATED as of the date first above written.
FAIRFIELD COMMUNITIES, INC.
/s/ John Fletcher BY: /s/ Robert W. Howeth
- ------------------------- ------------------------------
Witness TITLE: Senior Vice President
FAIRFIELD ACCEPTANCE CORPORATION
/s/ John Fletcher BY: /s/Robert W. Howeth
- ------------------------- --------------------------------
Witness TITLE: President
LAWYERS TITLE INSURANCE CORPORATION
/s/ Sherry D. Adkison BY: /s/ Randall E. Cox
- ------------------------- -------------------------------
Witness TITLE: Senior Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender under the FCI
Boston Loan Agreement
/s/ Paula C. Anderson BY: /s/ Linda J. Carter
- ------------------------- -------------------------------
Witness TITLE: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender under the FAC
Boston Loan Agreement
/s/ Paula C. Anderson BY: /s/ Linda J. Carter
- ------------------------- -------------------------------
Witness TITLE: Vice President
FIRST COMMERCIAL TRUST COMPANY, N.A.,
as 1993-A Trustee
/s/ Paula C. Anderson BY: /s/ Bonnie McKenzie
- ------------------------- -------------------------------
Witness TITLE: Trust Operations Manager
CAPITAL MARKETS ASSURANCE
CORPORATION,
as Triple-A Collateral Agent
/s/ John Fletcher BY: /s/ Philip Theoharides
- ------------------------- -------------------------------
Witness TITLE: Vice President (CapMac)
LIST OF SCHEDULES
-----------------
Schedule A: Properties
Schedule B: Mortgages
Schedule C: 1993-A Trust Lots, Undivided Ownership
Interests and Intervals
Schedule D: Triple-A Lots, Undivided Ownership
Interests and Intervals
SCHEDULE A
PROPERTIES
FAIRFIELD BAY
-------------
The following Warranty Deeds were made by Fairfield
Communities, Inc. (Grantor) to Lawyers Title Insurance
Corporation (Grantee) and recorded in the Office of the
Circuit Clerk of Van Buren and Cleburne Counties, Arkansas:
WARRANTY DEED - dated February 16, 1983 and recorded
- -------------
February 22, 1983 in Record Book, Volume 159, Pages 277-350,
Van Buren County and was also recorded on February 22, 1983
in Record Book, Volume 243, Pages 707-780, Cleburne County,
Arkansas.
WARRANTY DEED - dated January 4, 1984 and recorded
- --------------
January 10, 1984 in Record Book, Volume 167, Page 577, Van
Buren County, Arkansas.
WARRANTY DEED - dated September 7, 1984 and recorded
- --------------
October 25, 1984 as Document No. 84-4757, Van Buren County,
Arkansas.
WARRANTY DEED - dated July 24, 1985 and recorded
- --------------
September 23, 1985 as Document No. 85-4800, Van Buren
County, Arkansas.
WARRANTY DEED - dated March 10, 1986 and recorded April 8,
- -------------
1986 as Document No. 86-1579, Van Buren County, Arkansas.
WARRANTY DEED - dated July 29, 1986 and recorded September
- -------------
3, 1986 as Document No. 86-4074, Van Buren County, Arkansas.
WARRANTY DEED - dated December 8, 1986 and recorded
- --------------
December 22, 1986 as Document No. 86-5746, Van Buren County,
Arkansas.
WARRANTY DEED - dated March 23, 1987 and recorded April
- -------------
27, 1987 as Document No. 87-1824, Van Buren County,
Arkansas.
WARRANTY DEED - dated February 23, 1988 and recorded March
- -------------
7, 1988 as Document No. 88-1009, Van Buren County, Arkansas,
and also recorded on March 17, 1988 in Book Volume 302,
Pages 47-51, Cleburne County, Arkansas.
WARRANTY DEED - dated April 25, 1988 and recorded May 23,
- -------------
1988 as Document No. 88-2289, Van Buren County, Arkansas.
WARRANTY DEED - dated May 20, 1988 and recorded June 10,
- -------------
1988 as Document No. 88-2706, Van Buren County, Arkansas.
WARRANTY DEED - dated December 8, 1988 and recorded
- -------------
December 22, 1988 as Document No. 88-5678, Van Buren County,
Arkansas.
WARRANTY DEED - dated March 28, 1989 and recorded April
- -------------
21, 1989 as Document No. 89-2097, Van Buren County,
Arkansas.
WARRANTY DEED - dated January 19, 1995 and recorded
- --------------
January 23, 1995 as Document No. 95-333, Van Buren County,
Arkansas.
---------------------------
FAIRFIELD GLADE
---------------
The following Quitclaim Deeds were made by Fairfield
Communities, Inc. (Grantor) to Lawyers Title Insurance
Corporation (Grantee) and recorded in the Office of the
Register of Deeds of Cumberland County, Tennessee:
QUITCLAIM DEED - dated February 16, 1983 and recorded
- ---------------
February 24, 1983 in Deed Book 264, Page 677, Cumberland
County, Tennessee.
QUITCLAIM DEED - dated January 4, 1984 and recorded
- ---------------
January 10, 1984 in Deed Book 278, Page 505, Cumberland
County, Tennessee.
QUITCLAIM DEED - dated September 7, 1984 and recorded
- ---------------
November 27, 1987, Cumberland County, Tennessee.
QUITCLAIM DEED - dated October 9, 1985 and recorded
- ---------------
December 12, 1985 in Deed Book 309, Page 417, Cumberland
County, Tennessee.
QUITCLAIM DEED - dated March 10, 1986 and recorded April
- --------------
15, 1986 in Deed Book 314, Page 417, Cumberland County,
Tennessee.
QUITCLAIM DEED - dated July 10, 1986 and recorded August
- --------------
4, 1986 in Deed Book 319, Page 783, Cumberland County,
Tennessee.
QUITCLAIM DEED - dated August 6, 1986 and recorded
- ---------------
September 5, 1986 in Deed Book 322, Page 26, Cumberland
County, Tennessee.
QUITCLAIM DEED - dated October 29, 1986 and recorded
- ---------------
November 10, 1986 in Deed Book 325, Page 793, Cumberland
County, Tennessee.
QUITCLAIM DEED - dated November 14, 1986 and recorded
- ---------------
December 24, 1986 in Deed Book 328, Page 461, Cumberland
County, Tennessee.
QUITCLAIM DEED - dated February 18, 1987 and recorded
- ---------------
April 1, 1987 in Deed Book 333, Page 587, Cumberland County,
Tennessee.
QUITCLAIM DEED - dated May 18, 1987 and recorded June 26,
- --------------
1987 in Deed Book 339, Page 88, Cumberland County,
Tennessee.
QUITCLAIM DEED - dated August 17, 1987 and recorded
- ---------------
September 25, 1987 in Deed Book 344, Page 209, Cumberland
County, Tennessee.
QUITCLAIM DEED - dated October 16, 1987 and recorded
- ---------------
November 21, 1987 in Deed Book 348, Page 77, Cumberland
County, Tennessee.
QUITCLAIM DEED - dated May 6, 1988 and recorded June 20,
- --------------
1988 in Deed Book 358, Page 530, Cumberland County,
Tennessee.
QUITCLAIM DEED - dated November 1, 1988 and recorded
- ---------------
December 1, 1988 in Deed Book 369, Page 589, Cumberland
County, Tennessee.
QUITCLAIM DEED - dated April 13, 1989 and recorded May 2,
- --------------
1989 in Deed Book 378, Page 798, Cumberland County,
Tennessee.
QUITCLAIM DEED - dated January 19, 1995 and recorded
- ---------------
January 23, 1995 in Deed Book 481, Page 438, Cumberland
County, Tennessee.
QUITCLAIM DEED - dated September 5, 1995 and recorded
- ---------------
September 15, 1995 in Deed Book 494, Page 476, Cumberland
County, Tennessee.
---------------------------
FAIRFIELD HARBOUR
-----------------
The following Warranty Deeds were made by Fairfield
Harbour, Inc. (Grantor) to Lawyers Title Insurance
Corporation (Grantee) and recorded in the Office of the
Register of Deeds of Craven County, North Carolina:
WARRANTY DEED - dated February 16, 1983 and recorded
- --------------
February 21, 1983 in Deed Book 1019, Page 964 and also in
Condominium Book III, Page 235, Craven County, North
Carolina.
WARRANTY DEED - dated January 4, 1984 and recorded
- --------------
January 9, 1984 in Condominium Book IV, Page 123, Craven
County, North Carolina.
WARRANTY DEED - dated September 7, 1984 and recorded
- --------------
November 26, 1984 in Condominium Book IV, Page 1009, and
also recorded December 27, 1984 in Book 1073, Page 209,
Craven County, North Carolina.
WARRANTY DEED - dated April 15, 1985 and recorded May 20,
- -------------
1985 in Deed Book 1085, Page 58 and also in Condominium Book
6, Page 86, Craven County, North Carolina.
WARRANTY DEED - dated September 6, 1985 and recorded
- --------------
October 10, 1985 in Condominium Book 6, Page 632, Craven
County, North Carolina.
WARRANTY DEED - dated January 8, 1987 and recorded
- --------------
February 20, 1987 in Deed Book 12, Page 610, Craven County,
North Carolina.
WARRANTY DEED - dated May 18, 1987 and recorded July 6,
- -------------
1987 in Deed Book 1160, Page 329, Craven County, North
Carolina.
WARRANTY DEED - dated June 19, 1987 and recorded July 24,
- -------------
1987 in Deed Book 14, Page 513, Craven County, North
Carolina.
WARRANTY DEED - dated November 1, 1988 and recorded
- --------------
November 30, 1988 in Condo Book 21, Page 892, Craven County,
North Carolina.
---------------------------
FAIRFIELD MOUNTAINS
-------------------
The following Warranty Deeds were made by Fairfield
Mountains, Inc. and/or Fairfield Communities, Inc., as
successor corporation (Grantor), to Lawyers Title Insurance
Corporation (Grantee) and recorded in the Office of the
Register of Deeds of Rutherford County, North Carolina:
WARRANTY DEED - dated February 16, 1983 and recorded
- --------------
February 21, 1983 in Deed Book 442, Page 427, Rutherford
County, North Carolina.
WARRANTY DEED - dated January 4, 1984 and recorded
- --------------
January 9, 1984 in Deed Book 453, Page 521, Rutherford
County, North Carolina.
WARRANTY DEED - dated May 10, 1984 and recorded May 15,
- --------------
1984 in Deed Book 457, Page 591, Rutherford County, North
Carolina.
WARRANTY DEED - dated April 15, 1985 and recorded May 17,
- -------------
1985 in Deed Book 470, Page 668, Rutherford County, North
Carolina.
WARRANTY DEED - dated September 6, 1985 and recorded
- --------------
September 27, 1985 in Deed Book 477, Page 443, Rutherford
County, North Carolina.
WARRANTY DEED - dated February 28, 1986 and recorded
- --------------
March 17, 1986 in Deed Book 483, Page 267, Rutherford
County, North Carolina.
WARRANTY DEED - dated May 1, 1986 and recorded June 17,
- -------------
1986 in Deed Book 487, Page 722, Rutherford County, North
Carolina.
WARRANTY DEED - dated December 16, 1986 and recorded
- --------------
January 27, 1987 in Deed Book 497, Page 649, Rutherford
County, North Carolina.
WARRANTY DEED - dated June 6, 1988 and recorded June 20,
- -------------
1988 in Deed Book 521, Page 709, Rutherford County, North
Carolina.
WARRANTY DEED - dated December 21, 1988 and recorded
- --------------
January 12, 1989 at Deed Book 533, Page 109, Rutherford
County, North Carolina.
WARRANTY DEED - dated March 28, 1989 and recorded
- --------------
April 21, 1989 at Deed Book 537, Page 722, Rutherford
County, North Carolina.
WARRANTY DEED - dated February 4, 1992 and recorded March
- --------------
3, 1992 at Deed Book 589, Page 768, Rutherford County, North
Carolina.
WARRANTY DEED - dated January 19, 1995 and recorded
- --------------
January 27, 1995 at Deed Book 644, Page 811, Rutherford
County, North Carolina.
---------------------------
FAIRFIELD PLANTATION
--------------------
The following Warranty Deeds were made by Fairfield
Plantation, Inc. (Grantor) to Lawyers Title Insurance
Corporation (Grantee) and recorded in the Office of the
Clerk of Superior Court of Carroll County, Georgia:
WARRANTY DEED - dated February 16, 1983 and recorded
- --------------
February 18, 1983 in Book 445, Page 833, Carroll County,
Georgia.
WARRANTY DEED - dated January 4, 1984 and recorded
- --------------
January 20, 1984 in Book 463, Page 619, Carroll County,
Georgia.
WARRANTY DEED - dated September 7, 1984 and recorded
- --------------
November 5, 1984 in Book 482, Page 125, Carroll County,
Georgia.
WARRANTY DEED - dated April 15, 1985 and recorded May 20,
- -------------
1985 in Book 496, Page 387, Carroll County, Georgia.
---------------------------
FAIRFIELD SAPPHIRE VALLEY
(JACKSON COUNTY)
----------------
The following Warranty Deeds were made by Fairfield
Sapphire Valley, Inc. and/or Fairfield Communities, Inc., as
successor corporation (Grantor), to Lawyers Title Insurance
Corporation (Nominee) and recorded in the Office of the
Register of Deeds of Jackson County, North Carolina:
WARRANTY DEED - dated February 16, 1983 and recorded
- --------------
February 25, 1983 in Book 554, Page 394, Jackson County,
North Carolina.
WARRANTY DEED - dated January 4, 1984 and recorded
- --------------
January 9, 1984 in Book 572, Page 578, Jackson County, North
Carolina.
WARRANTY DEED - dated September 14, 1984 and recorded
- --------------
October 26, 1984 in Book 587, Page 173, Jackson County,
North Carolina.
WARRANTY DEED - dated April 15, 1985 and recorded May 20,
- --------------
1985 in Book 598, Page 576, Jackson County, North Carolina.
WARRANTY DEED - dated October 3, 1985 and recorded
- --------------
December 13, 1985 in Book 617, Page 464, Jackson County,
North Carolina.
WARRANTY DEED - dated July 8, 1986 and recorded July 25,
- --------------
1986 in Book 639, Page 176, Jackson County, North Carolina.
WARRANTY DEED - dated April 14, 1987 and recorded May 28,
- -------------
1987 in Book 659, Page 451, Jackson County, North Carolina.
WARRANTY DEED - dated February 2, 1988 and recorded
- --------------
February 9, 1988 in Book 685, Page 665, Jackson County,
North Carolina.
WARRANTY DEED - dated April 25, 1988 and recorded May 23,
- -------------
1988 in Book 691, Page 605, Jackson County, North Carolina.
WARRANTY DEED - dated May 6, 1988 and recorded June 1,
- --------------
1988 in Book 692, Page 319, Jackson County, North Carolina.
WARRANTY DEED - dated July 20, 1988 and recorded July 27,
- -------------
1988 in Book 698, Page 295, Jackson County, North Carolina.
WARRANTY DEED - dated March 28, 1989 and recorded
- --------------
April 21, 1989 in Book 720, Page 515, Jackson County, North
Carolina.
---------------------------
FAIRFIELD SAPPHIRE VALLEY
(TRANSYLVANIA COUNTY)
---------------------
The following Warranty Deeds were made by Fairfield
Communities, Inc. (Grantor) to Lawyers Title Insurance
Corporation (Nominee) and recorded in the Office of the
Register of Deeds of Transylvania County, North Carolina:
WARRANTY DEED - dated April 14, 1987 and recorded May 28,
- -------------
1987 in Book 295, Page 28, Transylvania County, North
Carolina.
WARRANTY DEED - dated July 20, 1988 and recorded July 27,
- -------------
1988 in Book 307, Page 704, Transylvania County, North
Carolina.
---------------------------
FAIRFIELD WILLIAMSBURG
----------------------
The following Warranty Deeds were made by Fairfield
Williamsburg, Inc. (Grantor) to Lawyers Title Insurance
Corporation (Nominee) and recorded in the Office of the
Circuit Court Clerk of York County, Virginia:
WARRANTY DEED - dated June 5, 1985 and recorded June 5,
- -------------
1985 in Book 417, Page 628, York County, Virginia.
WARRANTY DEED - dated March 4, 1986 and recorded June 6,
- --------------
1986 in Book 443, Page 423, York County, Virginia.
WARRANTY DEED - dated March 4, 1986 and recorded June 6,
- -------------
1986 in Book 443, Page 474, York County, Virginia.
WARRANTY DEED - dated March 4, 1986 and recorded June 6,
- -------------
1986 in Book 443, Page 500, York County, Virginia.
WARRANTY DEED - dated August 27, 1986 and recorded
- --------------
September 12, 1986 in Book 453, Page 196, York County,
Virginia.
WARRANTY DEED - dated September 23, 1987 and recorded
- --------------
September 23, 1987 in Book 497, Page 532, York County,
Virginia.
WARRANTY DEED - dated August 9, 1988 and recorded
- --------------
September 9, 1988 in Book 529, Page 185, York County,
Virginia.
---------------------------
FAIRFIELD WILLIAMSBURG
(KINGSGATE)
-----------
The following Warranty Deed was made by Fairfield
Communities, Inc. (Grantor) to Lawyers Title Insurance
Corporation (Nominee) and recorded in the Office of the
Circuit Court Clerk of York County, Virginia:
WARRANTY DEED - dated February 4, 1992 and recorded March
- -------------
10, 1992 in Book 650, Page 752, York County, Virginia.
WARRANTY DEED - dated April 15, 1992 and recorded April 27,
- --------------
1992 in Book 658, Page 609, York County, Virginia.
WARRANTY DEED - dated August 18, 1994 and recorded October
- -------------
21, 1994 in Book 819, Page 572, York County, Virginia.
---------------------------
FAIRFIELD OCEAN RIDGE
---------------------
The following Titles to Real Estate were made by
Fairfield Ocean Ridge, Inc. (Grantor) to Lawyers Title
Insurance Corporation (Grantee) and recorded in the Office
of the Clerk of Court of Colleton County, South Carolina:
TITLE TO REAL ESTATE - dated July 15, 1983 and recorded
- ---------------------
August 8, 1983 in Book 272, Page 178, Colleton County, South
Carolina.
TITLE TO REAL ESTATE - dated January 11, 1984 and recorded
- --------------------
January 16, 1984 in Book 283, Page 716, Colleton County,
South Carolina.
TITLE TO REAL ESTATE - dated September 7, 1984 and
- -----------------------
recorded November 2, 1984 in Book 303, Page 337, Colleton
County, South Carolina.
TITLE TO REAL ESTATE - dated March 10, 1986 and recorded
- ---------------------
April 14, 1986 in Book 344, Page 254, Colleton County, South
Carolina.
TITLE TO REAL ESTATE - dated September 8, 1986 and
- ----------------------
recorded October 17, 1986 in Deed Book 361, Page 100,
Colleton County, South Carolina.
TITLE TO REAL ESTATE - dated May 22, 1987 and recorded
- ---------------------
July 9, 1987 in Deed Book 384, Page 162, Colleton County,
South Carolina.
TITLE TO REAL ESTATE - dated August 17, 1987 and recorded
- ---------------------
September 25, 1987 in Deed Book 392, Page 163, Colleton
County, South Carolina.
TITLE TO REAL ESTATE - dated April 25, 1988 and recorded
- ---------------------
May 23, 1988 in Deed Book 415, Page 143, Colleton County,
South Carolina.
TITLE TO REAL ESTATE - dated July 20, 1988 and recorded
- ---------------------
August 3, 1988 in Deed Book 423, Page 262, Colleton County,
South Carolina.
TITLE TO REAL ESTATE - dated November 1, 1988 and recorded
- --------------------
November 30, 1988 in Book 435, Page 205, Colleton County,
South Carolina.
TITLE TO REAL ESTATE - dated November 28, 1988 and
- ----------------------
recorded December 22, 1988 in Book 437, Page 247, Colleton
County, South Carolina.
TITLE TO REAL ESTATE - dated January 19, 1995 and recorded
- --------------------
February 2, 1995 in Book 654, Page 102, Colleton County,
South Carolina.
TITLE TO REAL ESTATE - dated January 19, 1995 and recorded
- --------------------
February 2, 1995 in Book 654, Page 116, Colleton County,
South Carolina.
---------------------------
FAIRFIELD BRANSON
-----------------
WARRANTY DEED - dated February 25, 1994, and recorded
- --------------
March 15, 1994 in the Office of the Circuit Clerk and
Recorder, Taney County, Missouri.
The Warranty Deed describes the property in Taney
County, Missouri on which there will be initially located
one, three-story building, containing six units, designated
as Building 1, Units 1101, 1102, 1201, 1202, 1301 and 1302,
which building is subject to that certain Declaration of
Condominium for Fairfield at the Falls Condominiums which
will be recorded with the Office of the Circuit Clerk and
Recorder for Taney County, Missouri at such time as the
final as-built plat has been recorded.
SCHEDULE B
FAIRFIELD COMMUNITIES, INC.
FAIRFIELD ACCEPTANCE CORPORATION
MORTGAGES/DEEDS OF TRUST
FAIRFIELD BAY
--------------
BANK OF BOSTON
--------------
FCI:
---
MORTGAGE - dated February 25, 1971 from
--------
Fairfield Communities Land Company, predecessor to
FCI (Mortgagor) to The First National Bank of
Boston (Mortgagee) recorded on February 26, 1971
in Mortgage Record Book 44, on Pages 395-405 in
the Office of the County Recorder of Van Buren
County, Arkansas and on the same date in the
Office of the County Recorder of Cleburne County,
Arkansas in Mortgage Book 33, Pages 589-600, as
amended from time to time.
The above referenced Mortgage has been
amended and restated pursuant to the following
amendment:
AMENDED and RESTATED MORTGAGE, ASSIGNMENT of
--------------------------------------------------
RENTS, LEASES and LEASEHOLD INTERESTS and SECURITY
--------------------------------------------------
AGREEMENT - dated August 25, 1992, effective as of
---------
September 1, 1992, and recorded September 4, 1992
as Document 92-4321 in Van Buren County, and on
September 4, 1992 in Book Volume 125, Pages 591-
637 in Cleburne County, Arkansas, as amended from
time to time.
---------------------------
FAC:
----
MORTGAGE - dated February 21, 1983 from
---------
Fairfield Acceptance Corporation (Grantor) and
Lawyers Title Insurance Corporation (Nominee) to
The First National Bank of Boston (Grantee)
recorded on February 25, 1983 in Book Volume 60,
Pages 407-492 in the Office of the Circuit Clerk
and Ex-Officio Recorder for Cleburne County,
Arkansas, and recorded on February 25, 1983 in
Record Book 90, Page 281 in the Office of the
Circuit Clerk and Ex-Officio Recorder for Van
Buren County, Arkansas, as amended from time to
time.
The above referenced Mortgage has been
amended and restated pursuant to the following
amendment:
AMENDED and RESTATED MORTGAGE, ASSIGNMENT of
--------------------------------------------------
RENTS, LEASES and LEASEHOLD INTERESTS and SECURITY
--------------------------------------------------
AGREEMENT - dated August 28, 1992, effective as of
---------
September 1, 1992 and recorded on September 28,
1992 in Book Volume 126, Page 463-505 in Cleburne
County, Arkansas and as Document No. 925275 in Van
Buren County, Arkansas, as amended from time to
time.
FAIRFIELD GLADE
---------------
BANK OF BOSTON
--------------
FCI:
---
DEED OF TRUST - dated February 25, 1971 between
--------------
Fairfield Communities Land Company, predecessor to
FCI (Mortgagor) and W. Ovid Collins, Jr. (Trustee)
Trustee for the benefit of The First National Bank
of Boston (Beneficiary) recorded on February 26,
1971 in Miscellaneous Book 88, Page 351 in the
Office of the Register of Deeds of Cumberland
County, Tennessee, as amended from time to time.
The above referenced Deed of Trust has been
amended and restated pursuant to the following
amendment:
AMENDED and RESTATED DEED of TRUST, ASSIGNMENT OF
--------------------------------------------------
RENTS, LEASES and LEASEHOLD INTERESTS and SECURITY
--------------------------------------------------
AGREEMENT - dated August 25, 1992, effective as of
---------
September 1, 1992 and recorded on September 2,
1992 in Miscellaneous Book 427, Page 227 in
Cumberland County, Tennessee, as amended from time
to time.
---------------------------
FAC:
----
DEED OF TRUST - dated February 21, 1983 from
-------------
Fairfield Acceptance Corporation (the Grantor) and
Lawyers Title Insurance Corporation (the Nominee)
to Gilbert O. Dempsey (the Trustee) and to The
First National Bank of Boston (the Beneficiary)
and recorded on February 24, 1983 in Miscellaneous
Book 251, Page 127 in the Office of the Register
of Deeds of Cumberland County, Tennessee, as
amended from time to time.
The above referenced Deed of Trust has been
amended and restated pursuant to the following
amendment:
AMENDED and RESTATED DEED of TRUST, ASSIGNMENT OF
--------------------------------------------------
RENTS, LEASES and LEASEHOLD INTERESTS and SECURITY
--------------------------------------------------
AGREEMENT - dated August 28, 1992, effective as of
---------
September 1, 1992 and recorded September 25, 1992
in Miscellaneous Book 429, Page 45 in Cumberland
County, Tennessee, as amended from time to time.
---------------------------
FAIRFIELD MOUNTAINS
-------------------
BANK OF BOSTON
--------------
FCI:
---
DEED OF TRUST - dated July 14, 1977 between
--------------
Fairfield Mountains, Inc., predecessor to FCI
(Mortgagor) and William E. Green (Trustee) as
Trustee for the benefit of The First National Bank
of Boston recorded on September 1, 1977 in
Book 245, Page 429 in the Office of the Register
of Deeds of Rutherford County, North Carolina, as
amended from time to time.
The above referenced Deed of Trust has been
amended and restated pursuant to the following
amendment:
AMENDED and RESTATED DEED of TRUST, ASSIGNMENT OF
--------------------------------------------------
RENTS, LEASES and LEASEHOLD INTERESTS and SECURITY
--------------------------------------------------
AGREEMENT - dated August 25, 1992, effective as of
---------
September 1, 1992 and recorded September 1, 1992
in Book 415, Page 19 in Rutherford County, North
Carolina, as amended from time to time.
---------------------------
FAC:
---
DEED OF TRUST - dated February 21, 1983 from
-------------
Fairfield Acceptance Corporation (Grantor) and
Lawyers Title Insurance Corporation (Nominee) to
Gilbert O. Dempsey (Trustee) and to The First
National Bank of Boston (Beneficiary) and recorded
on February 24, 1983 in Book 297, Page 93 in the
Office of the Register of Deeds of Rutherford
County, North Carolina, as amended from time to
time.
The above referenced Deed of Trust has been
amended and restated pursuant to the following
amendment:
AMENDED and RESTATED DEED of TRUST, ASSIGNMENT OF
--------------------------------------------------
RENTS, LEASES and LEASEHOLD INTERESTS and SECURITY
--------------------------------------------------
AGREEMENT - dated August 28, 1992, effective as of
---------
September 1, 1992, and recorded on October 8, 1992
in Book 417, Page 131 in Rutherford County, North
Carolina, as amended from time to time.
---------------------------
FAIRFIELD HARBOUR
-----------------
BANK OF BOSTON
--------------
FCI:
----
DEED OF TRUST - dated June 2, 1981 between
---------------
Fairfield Harbour, Inc., predecessor to FCI
(Grantor) and Gilbert O. Dempsey (Trustee) and to
The First National Bank of Boston (Beneficiary)
and recorded on June 4, 1981 in Condominium
Book I, Page 699 and re-recorded on September 1,
1981 in Book 986, Page 695, Craven County
Registry, Craven County, North Carolina, as
amended from time to time.
The above referenced Deed of Trust has been
amended and restated pursuant to the following
amendment:
SECOND DEED of TRUST, ASSIGNMENT OF RENTS, LEASES
--------------------------------------------------
and LEASEHOLD INTERESTS and SECURITY AGREEMENT -
------------------------------------------------
dated August 25, 1992, effective as of September
1, 1992 and recorded September 1, 1992 in
Condominium Book 37, Page 320 and further recorded
in Book 1333, Page 465 in Craven County, North
Carolina, as amended from time to time.
---------------------------
FAC:
---
DEED OF TRUST - dated February 21, 1983 from
-------------
Fairfield Acceptance Corporation (Grantor) and
Lawyers Title Insurance Corporation (Nominee) to
Gilbert O. Dempsey (Trustee) and to The First
National Bank of Boston (Beneficiary) and recorded
on February 25, 1983 in Condominium Book III, Page
247 in the Office of the Register of Deeds of
Craven County, North Carolina, as amended from
time to time.
The above referenced Deed of Trust has been
amended and restated pursuant to the following
amendment:
AMENDED and RESTATED DEED of TRUST, ASSIGNMENT OF
--------------------------------------------------
RENTS, LEASES and LEASEHOLD INTERESTS and SECURITY
--------------------------------------------------
AGREEMENT - dated August 28, 1992, effective as of
---------
September 1, 1992 and recorded on October 19, 1992
in Condominium Book 38, Page 258 and in Book 1339,
Page 795 in Craven County, North Carolina, as
amended from time to time.
---------------------------
FAIRFIELD SAPPHIRE VALLEY
(JACKSON COUNTY)
---------------
BANK OF BOSTON
--------------
FCI:
---
DEED OF TRUST - dated February 23, 1982 from
-------------
Fairfield Sapphire Valley, Inc., predecessor to
FCI (Grantor) to Gilbert O. Dempsey (Trustee) and
to The First National Bank of Boston (Beneficiary)
and recorded on March 17, 1982 in Book 535, Page
585 in the Office of the Register of Deeds of
Jackson County, North Carolina, as amended from
time to time.
The above referenced Deed of Trust has been
amended and restated pursuant to the following
amendment:
SECOND DEED of TRUST, ASSIGNMENT OF RENTS, LEASES
--------------------------------------------------
and LEASEHOLD INTERESTS and SECURITY AGREEMENT -
-----------------------------------------------
dated August 25, 1992, effective as of September
1, 1992 and recorded September 3, 1992 in Book
813, Page 780 in Jackson County, North Carolina,
as amended from time to time.
---------------------------
FAC:
---
DEED OF TRUST - dated February 21, 1983 from
-------------
Fairfield Acceptance Corporation (Grantor) and
Lawyers Title Insurance Corporation (Nominee) to
Gilbert O. Dempsey (Trustee) and to The First
National Bank of Boston (Beneficiary) and recorded
on February 25, 1983 in Book 551, Page 683 in the
Office of the Register of Deeds of Jackson County,
North Carolina, as amended from time to time.
The above referenced Deed of Trust has been
amended and restated pursuant to the following
amendment:
AMENDED and RESTATED DEED of TRUST, ASSIGNMENT OF
--------------------------------------------------
RENTS, LEASES and LEASEHOLD INTERESTS and SECURITY
--------------------------------------------------
AGREEMENT - dated August 28, 1992, effective as of
---------
September 1, 1992 and recorded on October 12, 1992
in Book 817, Page 283 in Jackson County, as
amended from time to time.
---------------------------
FAIRFIELD SAPPHIRE VALLEY
(TRANSYLVANIA COUNTY)
-------------------
BANK OF BOSTON
--------------
FCI:
---
DEED OF TRUST - dated October 20, 1988 from
--------------
Fairfield Communities, Inc. (Grantor) and Lawyers
Title Insurance Corporation (Nominee) to Paul A.
Lipsmeyer (Trustee) and to The First National Bank
of Boston (Beneficiary) and recorded on
November 4, 1988 in Book 168, Page 847 in
Transylvania County, North Carolina.
The above referenced Deed of Trust has been
amended and restated pursuant to the following
amendment:
SECOND DEED of TRUST, ASSIGNMENT OF RENTS, LEASES
--------------------------------------------------
and LEASEHOLD INTERESTS and SECURITY AGREEMENT -
------------------------------------------------
dated August 25, 1992, effective as of September
1, 1992 and recorded on September 3, 1992 in Book
199, Page 138, #004760 in Transylvania County,
North Carolina, as amended from time to time.
---------------------------
FAC:
----
DEED OF TRUST - dated September 30, 1988 from
--------------
Fairfield Acceptance Corporation (Grantor) and
Lawyers Title Insurance Corporation (Nominee) to
Paul A. Lipsmeyer (Trustee) and to The First
National Bank of Boston, as Agent (Beneficiary)
and recorded on November 4, 1988 in Book 168, Page
864 in Transylvania County, North Carolina.
The above referenced Deed of Trust has been
amended and restated pursuant to the following
amendment:
AMENDED and RESTATED DEED of TRUST, ASSIGNMENT OF
--------------------------------------------------
RENTS, LEASES and LEASEHOLD INTERESTS and SECURITY
--------------------------------------------------
AGREEMENT - dated August 28, 1992, effective as of
---------
September 1, 1992 and recorded on October 13, 1992
in Book 200, Page 490 in Transylvania County,
North Carolina, as amended from time to time.
---------------------------
FAIRFIELD PLANTATION
--------------------
BANK OF BOSTON
--------------
FCI:
---
DEED TO SECURE DEBT - dated May 26, 1980 from
--------------------
Fairfield Plantation, Inc., predecessor to FCI
(Grantor) and Lawyers Title Insurance Corporation
(Nominee) to The First National Bank of Boston
(Beneficiary) and recorded on June 23, 1981 in
Book 422, Page 692 in the Office of the Clerk of
Superior court and Carroll County, Georgia, as
amended from time to time.
The above referenced Deed to Secure Debt has
been amended and restated pursuant to the
following amendment:
AMENDED and RESTATED DEED to SECURE DEBT,
-------------------------------------------------
ASSIGNMENT OF RENTS, LEASES and LEASEHOLD
--------------------------------------------------
INTERESTS and SECURITY AGREEMENT - dated August
----------------------------------
25, 1992, effective as of September 1, 1992 and
recorded September 1, 1992 in Book 751, Page 263
in Carroll County, Georgia and further recorded on
September 11, 1992 in Book 777, Page 633 in
Douglas County, Georgia, as amended from time to
time.
---------------------------
FAC:
---
DEED TO SECURE DEBT - dated February 21, 1983
--------------------
between Fairfield Acceptance Corporation (Grantor)
and Lawyers Title Insurance Corporation (Nominee)
and The First National Bank of Boston
(Beneficiary) and recorded on February 25, 1983 in
Book 446, Page 202 in the Office of the Clerk of
Superior Court of Carroll County, Georgia, as
amended from time to time.
The Deed to Secure Debt has been amended and
restated pursuant to the following amendment:
AMENDED and RESTATED DEED to SECURE DEBT,
-------------------------------------------------
ASSIGNMENT OF RENTS, LEASES and LEASEHOLD
--------------------------------------------------
INTERESTS and SECURITY AGREEMENT - dated effective
--------------------------------
September 1, 1992, and recorded September 22, 1992
in Deed Book 753, Page 800 with the Clerk of the
Superior Court, Carroll County, Georgia and
further recorded on October 9, 1992 in Book 780,
Page 745 with the Clerk of the Superior Court of
Douglas County, Georgia.
---------------------------
FAIRFIELD WILLIAMSBURG
----------------------
BANK OF BOSTON
--------------
FCI:
---
CREDIT LINE DEED OF TRUST - dated June 5, 1985
--------------------------
between Fairfield Williamsburg, Inc., predecessor
to FCI (Grantor) and Vernon M. Geddy, Jr.
(Trustee) and The First National Bank of Boston
(Beneficiary) and recorded on June 5, 1985 in Deed
Book 417, Page 610 in the Office of the Circuit
Court Clerk of York County, Virginia, as amended
from time to time.
The above referenced Credit Line Deed of
Trust has been amended and restated pursuant to
the following amendment:
AMENDED and RESTATED CREDIT LINE DEED of TRUST,
-------------------------------------------------
ASSIGNMENT OF RENTS, LEASES and LEASEHOLD
---------------------------------------------------
INTERESTS and SECURITY AGREEMENT - dated August
----------------------------------
25, 1992, effective as of September 1, 1992 and
recorded on September 4, 1992 in Deed Book 680,
Page 524 in York County, Virginia, as amended from
time to time.
---------------------------
FAC:
----
CREDIT LINE DEED OF TRUST - dated June 3, 1985
--------------------------
from Fairfield Acceptance Corporation (Grantor)
and Lawyers Title Insurance Corporation (Nominee),
Vernon M. Geddy, Jr. (Trustee) and The First
National Bank of Boston (Beneficiary) and recorded
on June 5, 1985 in Deed Book 417, Page 633 in the
Office of the Circuit Court Clerk of York County,
Virginia.
CORRECTION CREDIT LINE DEED OF TRUST - dated
---------------------------------------
January 13, 1986 and recorded on June 6, 1986 in
Deed Book 443, Page 428 in York County.
The above referenced Credit Line Deed of
Trust has been amended and restated pursuant to
the following amendment:
AMENDED and RESTATED CREDIT LINE DEED of TRUST,
--------------------------------------------------
ASSIGNMENT OF RENTS, LEASES and LEASEHOLD
--------------------------------------------------
INTERESTS and SECURITY AGREEMENT - dated August
-----------------------------------
28, 1992, effective as of September 1, 1992 and
recorded September 24, 1992 in Deed Book 0684,
Page 0128 in York County, Virginia, as amended
from time to time.
---------------------------
FAIRFIELD WILLIAMSBURG
(KINGSGATE)
----------
BANK OF BOSTON
--------------
FCI:
---
CREDIT LINE DEED OF TRUST - dated May 15, 1990
---------------------------
between Fairfield Communities, Inc. (Grantor) and
Vernon M. Geddy, Jr. (Trustee) and The First
National Bank of Boston (Beneficiary) and recorded
on May 15, 1990 in Deed Book 582, Page 358 in the
Office of the Circuit Court Clerk of York County,
Virginia.
CREDIT LINE DEED of TRUST, ASSIGNMENT OF RENTS,
--------------------------------------------------
LEASES and LEASEHOLD INTERESTS and SECURITY
--------------------------------------------------
AGREEMENT - dated August 28, 1992, effective as of
---------
September 1, 1992 and recorded September 4, 1992
in Deed Book 680, Page 470, #9210463 in York
County, Virginia, as amended from time to time.
---------------------------
FAC:
---
CREDIT LINE DEED of TRUST, ASSIGNMENT OF RENTS,
--------------------------------------------------
LEASES and LEASEHOLD INTERESTS and SECURITY
--------------------------------------------------
AGREEMENT - dated August 28, 1992, effective
---------
September 1, 1992 and recorded on September 24,
1992, in Deed Book 0684, Page 0171 in York County,
Virginia, as amended from time to time.
---------------------------
FAIRFIELD OCEAN RIDGE
---------------------
BANK OF BOSTON
--------------
FCI:
----
MORTGAGE - dated July 14, 1983 from Fairfield
--------
Ocean Ridge, Inc., predecessor to FCI (Mortgagor)
to The First National Bank of Boston (Mortgagee)
recorded on August 8, 1983 in Book 235 at Page 160
in the Office of the Clerk of Court of Colleton
County, South Carolina, as amended from time to
time.
The above referenced Mortgage has been
amended and restated pursuant to the following
amendment:
AMENDED and RESTATED MORTGAGE - dated August 25,
------------------------------
1992, effective as of September 1, 1992 and
recorded on September 3, 1992 in M.R.E. Book 504,
Page 283 in Colleton County, as amended from time
to time.
---------------------------
FAC:
----
MORTGAGE - dated July 15, 1983 from Fairfield
--------
Acceptance Corporation, Inc. (Mortgagor) to The
First National Bank of Boston (Mortgagee) recorded
on August 8, 1983 in Book 235 at Page 184 in the
Office of the Clerk of Court of Colleton County,
South Carolina, as amended from time to time.
The above referenced Mortgage has been
amended and restated pursuant to the following
amendment:
AMENDED and RESTATED MORTGAGE - dated August 28,
------------------------------
1992 and recorded on September 25, 1992, in M.R.E.
Book 507, Page 105 in Colleton County, as amended
from time to time.
---------------------------
FAIRFIELD BRANSON
-----------------
BANK OF BOSTON
--------------
FCI:
---
DEED OF TRUST - dated April 9, 1993, from
--------------
Fairfield Communities, Inc. (Mortgagor) to Clay
Cantwell (Trustee) for the benefit of The First
National Bank of Boston (Mortgagee) and recorded
on April 15, 1993, in Book 319, Pages 5038-5081 in
the Office of the Recorder for taney County,
Missouri.
FAC:
---
None
SCHEDULE C
----------
1993-A TRUST LOTS, UNDIVIDED OWNERSHIP
INTERESTS AND INTERVALS
(Previously Provided)
[Information Omitted]
SCHEDULE D
----------
1995 LOTS, UNDIVIDED OWNERSHIP
INTERESTS AND INTERVALS
GRANTED ON CLOSING DATE
(April 10, 1995 - Previously Provided)
[Information Omitted]
ADDENDUM TO
-----------
SCHEDULE D
----------
1995 LOTS, UNDIVIDED OWNERSHIP
INTERESTS AND INTERVALS
GRANTED ON EFFECTIVE RESTATEMENT DATE
(SEPTEMBER 17, 1996)
[Information Omitted]
FOURTH
AMENDED AND RESTATED
TITLE CLEARING AGREEMENT
(COLORADO)
This Fourth Amended and Restated Title Clearing
Agreement is made and entered into as of July 31, 1996, by
and among Fairfield Communities, Inc., a Delaware
corporation (referred to herein as "FCI"); Fairfield
Acceptance Corporation, a Delaware corporation and
wholly-owned subsidiary of FCI (referred to herein as
"FAC"); Colorado Land Title Company, a Colorado corporation
(referred to herein as "Nominee"); The First National Bank
of Boston, Boston, Massachusetts (hereinafter defined as
"FNBB"), as agent and lender to FCI pursuant to the FCI
Boston Loan Agreement (as hereinafter defined); FNBB, as
agent and lender to FAC pursuant to the FAC Boston Loan
Agreement (as hereinafter defined); First Commercial Trust
Company, N.A., Little Rock, Arkansas, as trustee (referred
to herein as "1993-A Trustee"), pursuant to the 1993-A
Pledge Agreement (as hereinafter defined); and Capital
Markets Assurance Corporation, a New York Stock insurance
company, as collateral agent (referred to herein as "Triple-
A Collateral Agent") pursuant to the Triple-A Credit
Agreement (as hereinafter defined). This Agreement is made
in lieu of and supersedes that certain Third Amended and
Restated Title Clearing Agreement dated as of March 28,
1995, by and among certain of the parties hereto, which
agreement is hereby canceled.
W I T N E S S E T H:
WHEREAS, FCI is engaged in the development of a certain
resort and recreational project known as Fairfield Pagosa,
Archuleta County, Colorado, and certain other resorts and
recreational projects not subject hereto; and has sold and
continues to sell subdivided Lots (as hereinafter defined)
and Intervals (as hereinafter defined) to purchasers by way
of contract agreements and installment notes ("Sales
Contracts") whereby the purchaser is permitted to finance
the purchase price for said Lots and Intervals over a period
of time; and
WHEREAS, FNBB is the primary lender responsible for
financing the development of FCI projects and in connection
therewith has obtained a security interest in certain Sales
Contracts as security for the repayment of the borrowings of
FCI under the FCI Boston Loan Agreement and of FAC under the
FAC Boston Loan Agreement, and FNBB has further taken
underlying encumbrances against certain of the Properties
(as hereinafter defined) and certain other properties not
subject to this Agreement at the various FCI projects as
security for repayment of the borrowings of FCI under the
FCI Boston Loan Agreement and of FAC under the FAC Boston
Loan Agreement, which underlying encumbrances on the
Properties have provisions for release for the protection of
the purchasers of Lots and Intervals, said releases to be
given under conditions as set forth therein; and
WHEREAS, FCI and FAC have entered into arrangements for
the sale by FCI to FAC of certain Sales Contracts and other
receivables pursuant to a Third Amended and Restated
Operating Agreement dated as of December 8, 1994, as
amended; and
WHEREAS, FAC has sold certain Sales Contracts to
Fairfield Funding Corporation, a Delaware corporation
(referred to herein as "FFC"), which Sales Contracts have in
turn been pledged by FFC to the 1993-A Trustee pursuant to
the 1993-A Pledge Agreement; and
WHEREAS, FAC has sold certain Sales Contracts to
Fairfield Capital Corporation, a Delaware corporation
(referred to herein as "FCC"), pursuant to an Amended and
Restated Receivables Purchase Agreement, dated as of July
31, 1996 (the "Triple-A Purchase Agreement") which Sales
Contracts have in turn been pledged by FCC to the Triple-A
Collateral Agent for the benefit of itself, Triple-A One
Funding Corporation, a Delaware corporation (referred to
herein as "Triple-A") and The First National Bank of Boston,
as L/C Bank ("L/C Bank"), pursuant to the Triple-A Credit
Agreement; and
WHEREAS, FNBB (i) has released its lien upon and its
interest in the Sales Contracts and the underlying Lots and
Intervals pledged to the 1993-A Trustee and (ii) has
released, or will have released its lien upon and its
interest in, the Sales Contracts and the underlying Lots and
Intervals as a prior condition to their being pledged to the
Triple-A Collateral Agent; and
WHEREAS, the parties hereto are desirous of
establishing a title clearing mechanism for the purpose of
providing a convenient method of holding and conveying title
to the Properties, releasing encumbrances thereon and
protecting the interest of the various parties hereto as
their interest may appear;
NOW THEREFORE, in consideration of the mutual promises
and covenants set forth herein, the parties hereto agree as
follows:
1. Definitions. For the purposes of this Agreement,
----------
the following words and terms shall have the following
meanings unless the context clearly indicates otherwise:
FAC means, as appropriate, Fairfield Acceptance
---
Corporation, individually or in its capacity as servicer
under the 1993-A Pledge Agreement or the Triple-A Credit
Agreement.
FAC Boston Loan Agreement means the Third Amended and
--------------------------
Restated Revolving Credit Agreement, dated as of September
28, 1993, between FAC and FNBB, as amended pursuant to the
First Amendment to Third Amended and Restated Revolving
Credit Agreement, dated as of December 9, 1994, between FAC
and FNBB, and as further amended by the Second Amendment to
Third Amended and Restated Revolving Credit Agreement, dated
as of December 19, 1994, between FAC and FNBB, as amended
and in effect from time to time.
FCC means Fairfield Capital Corporation, a Delaware
---
corporation.
FCI means Fairfield Communities, Inc., a Delaware
---
corporation.
FCI Boston Loan Agreement means the Amended and
----------------------------
Restated Revolving Credit Agreement, dated as of September
28, 1993, among FCI, Fairfield Myrtle Beach, Inc., Suntree
Development Company, St. Andrews Management, Inc., Fairfield
Suntree Realty, Inc., and FNBB, as amended pursuant to the
First Amendment to Amended and Restated Revolving Credit
Agreement, dated as of May 13, 1994, as further amended by
Consent Waiver and Agreement, dated as of September 23,
1994, as further amended by Second Amendment to Amended and
Restated Revolving Credit Agreement, dated as of December 9,
1994, as further amended by Third Amendment to Amended and
Restated Revolving Credit Agreement, dated as of December
19, 1994, as further amended by Fourth Amendment to Amended
and Restated Revolving Credit Agreement, dated as of
November 20, 1995, and as further amended by Fifth Amendment
to Amended and Restated Revolving Credit Agreement, dated as
of January 25, 1996, among FCI, Fairfield Myrtle Beach,
Inc., and FNBB, as amended and in effect from time to time.
FFC means Fairfield Funding Corporation, a Delaware
---
corporation.
FNBB means, as appropriate, The First National Bank of Boston,
----
as lender and agent for itself and such other lenders who
may hereinafter become parties to the FCI Boston Loan
Agreement, and The First National Bank of Boston, as lender
and agent for itself and such other lenders who may
hereinafter become parties to the FAC Boston Loan Agreement.
Intervals means those timeshare intervals created or to
---------
be created in the Properties conveyed to Nominee in
connection herewith, as more fully set forth in Schedule A
attached hereto and made a part hereof, as amended from time
to time, and all such Properties subsequently conveyed to
Nominee in the continuance of this Agreement. Intervals are
created in the Properties pursuant to the filing of regime
documents creating an underlying ownership interest which is
the subject of a Sales Contract, which ownership interest
consists of either (a) a fixed week or undivided interest in
fee simple in a lodging unit or group of lodging units at
the Project, or (b) an undivided leasehold interest in any
lodging unit located at the Pagosa Mountain Meadows
timeshare regime at the Project.
L/C Bank means The First National Bank of Boston, as
--------
L/C Bank under the Triple-A Credit Agreement.
Loan Agreement means, as appropriate, (i) the FCI
---------------
Boston Loan Agreement, (ii) the FAC Boston Loan Agreement,
(iii) the 1993-A Pledge Agreement, or (iv) the Triple-A
Credit Agreement.
Lots means all the subdivided lots created or to be
----
created in the Properties conveyed to Nominee in connection
herewith, as more fully set forth in Schedule A attached
hereto and made a part hereof, as amended from time to time,
and all such Properties subsequently conveyed to Nominee in
the continuance of this Agreement.
Mortgage means a deed of trust, deed to secure debt,
--------
vendor's lien, mortgage or any other instrument typically
considered to be a mortgage.
Operating Agreement means the Third Amended and
--------------------
Restated Operating Agreement dated as of December 9, 1994,
between FCI and FAC, as amended.
1993-A Pledge Agreement means that certain Pledge and
------------------------
Servicing Agreement dated as of September 28, 1993, by and
among FAC, as Servicer, FFC, as Issuer, 1993-A Trustee, as
Trustee, and Texas Commerce Trust Company, as Standby
Servicer, relating to the issuance by FFC of certain
Interval Ownership and Lot Contract Pay-Through Notes,
Series 1993-A.
POA means timeshare associations organized in
---
connection with the establishment of timesharing projects at
the various FCI projects and other property owners
associations which may have been organized in connection
with the platting or subdividing of vacant lots at the
various FCI projects.
Project means the recreational/retirement community
-------
commonly referred to as Fairfield Pagosa being developed by
FCI and such other projects as the parties hereto may by
mutual agreement add to this Agreement.
Properties means those Lots and Intervals located on
----------
the property described in Schedule A attached hereto, as
amended from time to time. The Mortgages on the Properties
in favor of FNBB are listed in Schedule B attached hereto,
as amended from time to time.
Purchasers means those individuals, partnerships,
----------
corporations or other entities who have entered into a Sales
Contract with FCI for the purchase of a Lot or Interval at
the Project.
Sales Contracts means those contract agreements and
---------------
installment notes, including promissory notes secured by
Mortgages, heretofore entered into and hereinafter to be
entered into between FCI and various Purchasers for the
purchase of a Lot or Interval and for which the total
purchase price has not been paid by the Purchaser.
Secured Party means FNBB, the 1993-A Trustee or the
--------------
Triple-A Collateral Agent, as applicable.
Triple-A means Triple-A One Funding Corporation, a
--------
Delaware corporation.
Triple-A Collateral Agent means Capital Markets
-----------------------------
Assurance Corporation, a New York Stock insurance company,
as collateral agent for the benefit of itself, Triple-A and
L/C Bank pursuant to the Triple-A Credit Agreement.
Triple-A Credit Agreement means that certain Amended
--------------------------
and Restated Credit Agreement dated as of July 31, 1996, by
and among FAC, as servicer, FCI, FCC, as borrower, Triple-A
Collateral Agent, L/C Bank, and Triple-A, relating to loans
to be made by Triple-A to FCC.
Triple-A Intervals means those Intervals which give
------------------
rise to certain Sales Contracts pledged, assigned and
transferred to the Triple-A Collateral Agent pursuant to the
Triple-A Credit Agreement. The Triple-A Intervals are
listed on Schedule D attached to this Agreement and made a
part hereof, as amended from time to time.
Triple-A Lots means those Lots which give rise to
--------------
certain Sales Contracts pledged, assigned and transferred to
the Triple-A Collateral Agent pursuant to the Triple-A
Credit Agreement. The Triple-A Lots are listed on Schedule
D attached to this Agreement and made a part hereof, as
amended from time to time.
1993-A Trustee means First Commercial Trust Company,
---------------
N.A., Little Rock, Arkansas, as trustee under the 1993-A
Pledge Agreement.
1993-A Trust Intervals means those Intervals which give
----------------------
rise to certain Sales Contracts pledged, assigned and
transferred to the 1993-A Trustee pursuant to the 1993-A
Pledge Agreement. The 1993-A Trust Intervals are listed on
Schedule C attached to this Agreement and made a part
hereof, as amended from time to time.
1993-A Trust Lots means those Lots which give rise to
-----------------
certain Sales Contracts pledged, assigned and transferred to
the 1993-A Trustee pursuant to the 1993-A Pledge Agreement.
The 1993-A Trust Lots are listed on Schedule C attached to
this Agreement and made a part hereof, as amended from time
to time.
2. Transfer of Properties to Nominee. FCI, by
-------------------------------------
various deeds, has transferred fee simple title to the
Properties identified on Schedule A to Nominee, subject to
those Mortgages identified on Schedule B. Nominee agrees to
accept and hold legal title to said Properties in accordance
with the terms, provisions and conditions of this Agreement
and for the benefit of FCI, FAC and the related Secured
Party, as their interests may appear. Except for those
Properties for which the beneficial interest has been
transferred to FFC or FCC and subsequently pledged to the
1993-A Trustee or the Triple-A Collateral Agent,
respectively, the beneficial interest in all the Properties
underlying Sales Contracts conveyed to Nominee pursuant to
this Agreement shall be in FCI, and at such time as the
Sales Contracts are transferred to FAC pursuant to the
Operating Agreement, the beneficial interest in the
Properties underlying those Sales Contracts transferred to
FAC shall pass to FAC with the transference of said Sales
Contracts. In the event FCI elects to repurchase Sales
Contracts previously transferred to FAC, the beneficial
interest in the Properties will be re-transferred to FCI by
FAC when those Sales Contracts are transferred from FAC back
to FCI, all in accordance with the Operating Agreement.
Although Nominee shall be advised of the transference of
Sales Contracts and the beneficial interest in the
Properties underlying the Sales Contracts, Nominee shall not
be held liable by any party hereto for acting in good faith
on the written instructions of FCI or FAC even though there
may be a mistake as to the proper owner of the beneficial
interest underlying the Sales Contracts.
3. Title Ownership and Responsibility of Nominee.
----------------------------------------------
(a) Nominee acknowledges that notwithstanding the fact
that it will be the record owner of the fee simple title to
the Properties, its ownership is subject in all respects to
the provisions of this Agreement, those Mortgages identified
on Schedule B hereto, and the terms and conditions of the
Loan Agreements. Nominee further acknowledges that it holds
fee simple title to the Properties for the benefit of the
other parties hereto and shall have no equitable rights in
the Properties nor any right to the income or profits to be
derived therefrom.
(b) Nominee's function and responsibility during the
existence of this Agreement will be to (i) hold record title
to the Properties for the benefit of the other parties
hereto, FFC and FCC, (ii) convey title as directed upon the
written request of FCI or FAC, as applicable, as the
beneficial owner at such time, and, if applicable, as
servicer under the 1993-A Pledge Agreement or the Triple-A
Credit Agreement, except as provided by Section 12 hereof;
(iii) contemporaneously with the conveyance of any of the
Properties that qualify for deeding in accordance with the
terms of the Sales Contracts, pursuant to authorization from
the related Secured Party as set forth herein, cause with
respect to such Properties such Secured Party's underlying
Mortgage, if any, to be released of record; (iv) where
requested by FCI or a Purchaser, as the case may be, cause
to be issued a title insurance policy to the Purchaser
(provided all title requirements are properly met and the
appropriate premium has been paid); and (v) execute such
instruments as are required to be executed pursuant to
Sections 11 and 13 hereof. Nominee may authorize a third
party, including any employee of FCI or FAC, by power of
attorney, to execute any instrument required by this Section
3(b).
(c) Except to the extent expressly permitted herein,
Nominee shall have no discretionary authority whatsoever to
exercise any control over the Properties.
(d) Except as set forth in Section 3(b), Nominee
agrees that it will do nothing which will in any way impair,
encumber or otherwise adversely affect in any manner the
title to the Properties.
(e) Nominee shall have no duties and responsibilities
other than those set forth herein, and it shall act only at
the direction of the parties hereto solely in accordance
with the terms hereof. FCI, FAC, and each Secured Party
hereby expressly do not delegate any discretionary duties or
responsibilities to Nominee as are often times associated
with a trustee acting pursuant to the terms and provision of
a trust agreement.
4. Responsibility of FAC or FCI Relating to
--------------------------------------------------
Conveyances by Nominee.
- ----------------------
(a) FCI shall cause any construction or vendor's lien
or blanket encumbrance (other than FNBB's Mortgages) to be
released and shall be responsible for paying release prices
to the proper party as necessary to secure the release of
the Properties to be conveyed as provided herein.
(b) FCI or FAC, as the case may be, shall prepare all
such deeds, releases, assignments and other documents as
may be necessary to carry out the purpose of this Agreement
and to cause revenue or transfer tax stamps to be properly
affixed as necessary to satisfy recording requirements, and
shall cause all recording fees to be paid and all necessary
instruments to be recorded in the appropriate real estate
records. FCI and FAC agree that each will maintain all
records necessary to identify beneficial ownership of the
Properties.
(c) FCI or FAC, as the case may be, shall be
responsible for advising Nominee and the related Secured
Party of all assignments of the Sales Contracts and
underlying beneficial interests and all conveyances of the
Properties, by furnishing copies of all such assignments and
conveyances to Nominee and to such Secured Party. Such
assignments and conveyances shall take the form of a
"Document of Sale and Assignment of Beneficial Interest" or
a "Document of Pledge and Assignment of Beneficial
Interest," which shall identify those Sales Contracts and
the underlying Properties giving rise to such Sales
Contracts to be assigned or conveyed. Nominee shall be
entitled to rely upon such "Document of Sale and Assignment
of Beneficial Interest" and "Documents of Pledge and
Assignment of Beneficial Interest" in determining beneficial
ownership of and security interests in the Properties. It
shall not be the responsibility of the Nominee to ensure
that FCI and FAC comply with the provisions of this
subsection (c).
(d) FFC has provided Nominee with a copy of an
assignment pledging and assigning all beneficial interest in
the 1993-A Trust Intervals, the 1993-A Trust Lots and the
related Sales Contracts (previously held by FAC and conveyed
to FFC) to the 1993-A Trustee. FAC, as servicer under the
1993-A Pledge Agreement, or the 1993-A Trustee shall provide
Nominee with copies of any future assignments of beneficial
interest in the 1993-A Trust Intervals or the 1993-A Trust
Lots, which assignments shall be in the form of a
certificate and shall identify the 1993-A Trust Intervals,
the 1993-A Trust Lots and related Sales Contracts assigned
thereby. Any such assignment submitted to Nominee by FAC
shall be accompanied by an approval, in writing, of the
1993-A Trustee. Upon receipt by the Nominee of any such
certificates, (i) Schedule C shall automatically be deemed
to be updated to exclude the 1993-A Trust Intervals and the
1993-A Lots covered by such certificates, (ii) Nominee shall
be entitled to rely upon such certificates in determining
beneficial ownership of the 1993-A Trust Intervals and the
1993-A Trust Lots covered by such certificates and (iii) the
beneficial ownership of the 1993-A Trust Intervals and the
1993-A Trust Lots covered by such certificates shall be
presumed to be in FCI or FAC, as applicable, and subject to
the lien of FNBB under the Mortgages on Schedule B.
(e) FCC has provided to Nominee on the Closing Date and
Effective Restatement Date (as such terms are defined in the
Triple-A Credit Agreement), and FCC will provide to Nominee
on Contract Grant Dates (as defined in the Triple-A Credit
Agreement), if any, occurring after the Effective
Restatement Date, copies of releases and assignments
evidencing (i) FNBB's release of its lien upon and its
interest in the Triple-A Intervals, the Triple-A Lots and
the related Sales Contracts, (ii) the transfer of all
beneficial interest in the Triple-A Intervals, the Triple-A
Lots and the related Sales Contracts from FAC to FCC
pursuant to the Triple-A Purchase Agreement and (iii) the
pledge and assignment of the Triple-A Intervals, the Triple-
A Lots and the related Sales Contracts from FCC to the
Triple-A Collateral Agent pursuant to the Triple-A Credit
Agreement. Upon receipt by the Nominee of any such future
releases and assignments, Schedule D shall automatically be
deemed to be updated to include the Triple-A Intervals and
the Triple-A Lots covered by such releases and assignments,
and Nominee shall be entitled to rely upon such releases and
assignments in determining beneficial ownership of the
Triple-A Intervals and the Triple-A Lots covered thereby.
FAC, as servicer under the Triple-A Credit Agreement,
or the Triple-A Collateral Agent shall provide Nominee with
copies of any future assignments from Triple-A Collateral
Agent to FCC, FAC or FCI, as applicable, of beneficial
interest in the Triple-A Intervals or the Triple-A Lots,
which assignments shall be in the form of a certificate and
shall identify the Triple-A Intervals, the Triple-A Lots and
related Sales Contracts assigned thereby. To be effective,
any such assignment submitted to Nominee by FAC shall be
accompanied by an approval, in writing, of the Triple-A
Collateral Agent. Upon receipt by the Nominee of any such
certificates, (i) Schedule D shall automatically be deemed
to be updated to exclude the Triple-A Intervals and the
Triple-A Lots covered by such certificates, (ii) Nominee
shall be entitled to rely upon such certificates in
determining beneficial ownership of the Triple-A Intervals
and the Triple-A Lots and (iii) the beneficial ownership of
the Triple-A Intervals and the Triple-A Lots covered by such
certificates shall be presumed to be in FCI or FAC, as
applicable, and subject to the lien of FNBB under the
Mortgages on Schedule B.
5. Conveyance and Release of Properties.
------------------------------------
(a) At such time as a Purchaser has paid in full the
purchase price or the requisite percentage of the purchase
price for deeding pursuant to a Sales Contract, and/or has
otherwise fully discharged all of the Purchaser's
obligations and responsibilities required to be discharged
as a condition to deeding, including the payment of all POA
dues and assessments, FCI or FAC, as applicable, as the
beneficial owner of the security interest in such property
at such time or as servicer for a Secured Party which is the
beneficial owner of the security interest in such property
at such time, shall direct Nominee in writing to immediately
cause to be released the related Secured Party's underlying
Mortgage(s) with respect to such Properties, unless
otherwise directed in writing by the related Secured
Party(s) pursuant to Section 12 hereof, and forthwith shall
deliver and record a properly executed Warranty Deed or
Special Warranty Deed (with documentary stamps and recording
fees to be paid by FCI or FAC as the case may be) conveying
fee simple title to the Lot or Interval covered by such
Sales Contract to the Purchaser. Within a reasonable time
following the delivery of the Warranty Deed or Special
Warranty Deed to Purchaser, a title insurance policy shall
also be delivered (provided the Purchaser has paid for such
in connection with his purchaser of the Properties
involved).
(b) Unless directed otherwise by a Secured Party,
pursuant to Section 12 hereof (or otherwise), each Secured
Party hereby authorizes and appoints Nominee as its agent to
release such Secured Party's underlying Mortgages against
any Properties upon receipt by Nominee of a written request
for deeding by FCI or FAC, together with a certification by
an authorized officer of FCI or FAC stating that all the
conditions to the release from the Mortgage or Mortgages
encumbering such Properties have been satisfied. Each
Secured Party further agrees to execute any additional
documents as may be necessary to be filed of record in order
to verify Nominee's authority to release such Secured
Party's Mortgages as provided herein.
(c) All payments made by Purchasers pursuant to the
terms of their Sales Contract shall be made directly to FCI,
FAC, FFC or FCC, as the case may be, for the benefit of the
relevant Secured Party, if any, pursuant to the terms of the
related Loan Agreement. No payments are to be received by
Nominee.
6. Default by Purchaser. Where a Purchaser has
---------------------
recorded his/her Sales Contract and Purchaser defaults and
otherwise refuses to reconvey legal or equitable title to
Nominee, Nominee shall assign the recorded Sales Contract to
FCI or FAC (as applicable, as the beneficial owner of such
recorded Sales Contract, or, if applicable, as servicer
under the 1993-A Pledge Agreement or the Triple-A Credit
Agreement), for foreclosure or other appropriate action.
Subject to the provisions of Section 12 hereof, Nominee may
rely on the written request of FCI or FAC, as applicable, in
regard to the assignment of said recorded Sales Contracts.
7. POA Voting Rights. Voting rights in any POA which
-----------------
may inure to the benefit of the Nominee as legal titleholder
shall be assigned by Nominee to FCI or, at the option of
FCI, FCI may require an irrevocable proxy be delivered unto
it by Nominee so that FCI may continue to exercise all such
voting rights.
8. Warranty as to Title. FCI represents and warrants
--------------------
unto Nominee that it has transferred fee simple title to the
Properties to Nominee, and that its deeds of conveyance to
Nominee convey to said Nominee title subject only to
(i) subdivision and condominium restrictions, covenants,
etc., including timeshare declarations, (ii) road rights of
way and easements, (iii) utility easements, (iv) the rights
of Purchasers who have entered into the Sales Contracts,
(v) those Mortgages set out on Schedule B attached hereto,
(vi) other such miscellaneous restrictions, covenants and
Mortgages as those enumerated above, and (vii) the terms of
this Agreement.
9. Additional Properties. From time to time FCI or
---------------------
FAC may convey to Nominee additional platted lots and
timeshare units or such acreage as FCI contemplates that it
will plat or subdivide, to be held by Nominee as Properties
subject to the terms and conditions of this Agreement, and
all parties recognize that this Agreement shall be binding
upon such additional Properties. Only platted lots and
timeshare units or acreage which FCI contemplates will be
platted or subdivided may be conveyed to Nominee, and such
conveyances shall exclude, except as noted above, raw
acreage and unplatted properties which may be owned from
time to time by FCI or FAC, as the case may be. Nominee
shall have the right to review all proposed conveyances to
assure compliance with the provisions of this section and
the terms of this Agreement; and in addition thereto,
Nominee shall have the right to refuse to accept any
conveyance of such additional platted lots and timeshare
units if they are located in jurisdictions which prohibit
Colorado Land Title Company from acting as Nominee under the
terms and provisions of this Agreement.
10. Indemnification. FCI and FAC jointly and
---------------
severally agree to indemnify and hold harmless Nominee from
any and all claims, demands, actions or causes of action in
any way relating to or arising out of the record ownership
of the Properties or out of the good faith discharge by
Nominee of any of the terms and conditions of this
Agreement, including all costs and expenses of any nature
that Nominee may incur. Each Secured Party shall indemnify
and hold harmless Nominee from any and all claims, demands,
actions or causes of action, including all costs and
expenses of any nature that Nominee may incur in connection
therewith, which relate to or arise out of any act or
failure to act of the Nominee, which action or inaction was
in good faith pursuant to and in reliance upon written
instructions from such Secured Party to the Nominee. With
respect to actions related to particular Properties, the
parties hereto expressly acknowledge that Nominee shall be
entitled to rely upon the written instructions of FCI, FAC
or the Secured Party which has a first position lien on such
Properties as set forth herein and in the Schedules hereto,
and Nominee shall have no liability for any action taken in
good faith in such reliance. FCI or FAC, as the case may
be, shall reimburse Nominee for all costs, fees and expenses
incurred by it relating to its serving as Nominee under the
terms and provisions of this Agreement. It is the intent of
the parties to insure that the Nominee shall incur no
liability whatsoever in connection with the good faith
performance of its functions under this Agreement, and in
connection therewith, all parties hereto release and waive
any claims they may have against Nominee which may result
from the performance in good faith by Nominee of its
responsibilities under this Agreement.
11. Mortgages, Platting, and Reconveyance of the
-------------------------------------------------
Properties. Subject to the provisions of Section 12 hereof,
- ----------
upon written request of FCI, Nominee shall, except as to
such Properties as FCI may have previously assigned or
transferred beneficial interest, reconvey all or any portion
of the Properties to FCI, subject to the Mortgages listed in
Schedule B, for the purpose of granting construction
Mortgages or for any other purpose for which FCI may require
legal title; and further, Nominee agrees to execute such
Mortgages covering such Properties, as requested in writing
by FCI, to any Secured Party or such third parties as FCI
may direct. Nominee further agrees to execute any and all
documents, including plats, covenants and restrictions, as
may be necessary to add and/or revise existing or new
subdivisions with respect to the Properties.
12. Default Under Loan Agreements. In the event of
------------------------------
default of FCI, FAC, FFC or FCC under any of the Loan
Agreements, the related Secured Party shall notify Nominee
in writing of such event at such time as notice of such
default is given to FCI, FAC, FFC or FCC, as the case may
be, which writing shall identify those Properties giving
rise to Sales Contracts relating to the defaulted Loan
Agreement and may further instruct Nominee that, with
respect to those Properties, Nominee shall act only upon the
written instructions of the related Secured Party and any
prior lienholder with respect to such Properties and the
related Sales Contracts, whereupon Nominee shall only take
action with respect to the Properties identified in the
notice, notwithstanding instructions of FCI, FAC, FFC or FCC
to the contrary, as directed by the related Secured Party
and any prior lienholder.
The receipt of any notice of default shall relate only
to the specific Loan Agreement identified therein. As to
all other Loan Agreements, Nominee shall continue to act
upon the written request of FCI, FAC, FNBB, the 1993-A
Trustee or the Triple-A Collateral Agent, as the case may
be, as to the Properties relating thereto.
Any notice of default given Nominee pursuant to this
section shall be mailed by first class mail, postage
prepaid, return receipt requested, to the following address:
Colorado Land Title Company
970 1/2 Main Avenue, P. O. Box 197
Durango, Colorado 81301
Attn: Rob Ptolemy
In no event shall Nominee have any responsibility for
preparation of documents referred to in Section 4(b) of this
Agreement. As to Properties relating to any defaulted Loan
Agreement, said documents shall be prepared by the related
Secured Party or its designee.
13. Provisions Related to Pooling/Pledge/Sale
--------------------------------------------------
Agreements.
- ----------
Notwithstanding anything herein to the contrary and
specifically notwithstanding the provisions of Section 3(a)
hereof, the interest in Properties related to the 1993-A
Trust Lots and the 1993-A Trust Intervals granted the 1993-A
Trustee by this Agreement and the 1993-A Pledge Agreement
are hereby deemed superior and senior to any and all
interests granted pursuant to the Mortgages listed in
Schedule B hereto. The parties hereto acknowledge that
Nominee holds title to the 1993-A Trust Lots and the 1993-A
Trust Intervals for the benefit of the purchasers of the
1993-A Trust Lots and the 1993-A Trust Intervals and the
1993-A Trustee, subject only to the terms and conditions of
the related Sales Contracts and the 1993-A Pledge Agreement,
respectively. The Nominee shall not transfer, pledge or
assign the 1993-A Trust Lots or the 1993-A Trust Intervals
except as expressly provided herein.
Notwithstanding anything herein to the contrary and
specifically notwithstanding the provisions of Section 3(a)
hereof, the interest in Properties related to the Triple-A
Lots and the Triple-A Intervals granted the Triple-A
Collateral Agent by this Agreement and the Triple-A Credit
Agreement are hereby deemed superior and senior to any and
all interests granted pursuant to the Mortgages listed in
Schedule B hereto. The parties hereto acknowledge that
Nominee holds title to the Triple-A Lots and the Triple-A
Intervals for the benefit of the purchasers of the Triple-A
Lots and the Triple-A Intervals and the Triple-A Collateral
Agent, subject only to the terms and conditions of the
related Sales Contracts and the Triple-A Credit Agreement,
respectively. The Nominee shall not transfer, pledge or
assign the Triple-A Lots or the Triple-A Intervals except as
expressly provided herein. The provisions of this
paragraph, however, shall not apply to any Triple-A Lots and
Triple-A Intervals that may be granted the Triple-A
Collateral Agent by this Agreement and the Triple-A Credit
Agreement on Contract Grant Dates (as defined in the Triple-
A Credit Agreement), if any, occurring after the Effective
Restatement Date (as defined in the Triple-A Credit
Agreement), until releases and assignments covering such
Property have been delivered to the Nominee in accordance
with the requirements of Section 4(e) hereof.
14. Miscellaneous.
-------------
(a) This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their successors
and assigns. This Agreement constitutes the entire
understanding and agreement between the parties with respect
to the subject matter hereof and may not be changed or
modified orally but only by instrument in writing signed by
the party against which enforcement of such change or
modification is sought.
(b) This Agreement may be amended from time to time
for the purpose of adding additional parties and revising
the terms herein, provided, however, that except as
specifically provided in paragraph 15 below, no such
amendment shall be effective until all parties hereto have
agreed in writing to such revisions.
(c) This instrument shall be construed in accordance
with and governed by the laws of the State of Colorado. In
the event any clause or provision of this Agreement is
declared to be invalid, the invalidity of any such clause or
provision shall not affect the remaining clauses and
provisions of this Agreement which shall remain in full
force and effect.
(d) No party may make an assignment of its interest in
this Agreement without obtaining the written consent of the
other parties hereto; provided, however, that to the extent
permitted by the FCI Boston and FAC Boston Loan Agreements,
the 1993-A Pledge Agreement or the Triple-A Credit
Agreement, respectively, FNBB, the 1993-A Trustee and the
Triple-A Collateral Agent may be replaced or succeeded as
parties to this Agreement without the consent of the other
parties hereto. The parties further agree to execute
additional documents as may be necessary to carry out the
purposes of this Agreement and protect the interests of all
parties hereto.
15. Amendment/Termination.
---------------------
(a) This Agreement may be amended solely for the
purpose of identifying and segregating a separate pool of
Sales Contracts, and the Lots or Intervals relating thereto,
which are to be sold or pledged pursuant to a pooling, sale
or pledge agreement, by an instrument in writing signed by
FCI, FAC, Nominee and FNBB. Any amendment undertaken
pursuant to this paragraph 15(a) shall not relate to or
affect Lots or Intervals listed on Schedules C and D
attached hereto, nor shall it in any way impair or amend the
rights of the 1993-A Trustee or the Triple-A Collateral
Agent under this Agreement. An executed copy of any
Amendment undertaken pursuant to this paragraph 15(a) shall
be provided to all parties to this Agreement.
(b) This Agreement shall be terminable by any party
hereto by giving sixty (60) days written notice to all other
parties of its desire to so terminate. The election by any
party other than FNBB, FCI or FAC to terminate will not
terminate this Agreement with respect to the remaining
parties, provided the remaining parties shall cause to be
substituted a successor party in place of the terminating
party. Upon termination, title to the Properties shall be
conveyed by Nominee in accordance with the written
instructions of FCI, FAC, the 1993-A Trustee or the Triple-A
Collateral Agent, as the case may be, as the beneficial
owner or assignee of the beneficial ownership of such
Properties at such time; except, however, if Nominee has
been notified by any Secured Party in writing that a default
has occurred under a Loan Agreement, as described more fully
in Section 12 of this Agreement, Nominee shall convey title
to the Properties securing the defaulted Loan Agreement in
accordance with the written instructions of the
related Secured Party and first lienholder with respect
thereto. In any event, this Agreement shall terminate, if
not sooner terminated, on January 1, 2010.
16. Notice. Notice under this Agreement shall be
------
given to the parties at the following addresses, or at such
other address as shall be designated by a party in a written
notice to the other parties:
Colorado Land Title Company
---------------------------
Rob Ptolemy
Colorado Land Title Company
970 Main
Durango, Colorado 81301
(303) 247-5464
Fairfield Communities, Inc. and
Fairfield Acceptance Corporation
--------------------------------
Counsel:
Marcel Dumeny Gordon Wilbourn
Fairfield Communities, Inc. Rose Law Firm, a
2800 Cantrell Road Professional Association
Little Rock, Arkansas 72202 120 East Fourth Street
(501) 664-6000 Little Rock, Arkansas 72201
Telecopy: (501) 660-7196 (501) 377-0332
Telecopy: (501) 375-1309
The First National Bank of Boston
---------------------------------
Counsel:
Linda J. Carter Marcia Robinson
The First National Bank of Boston Bingham, Dana & Gould
115 Perimeter Center Place, N.E. 150 Federal Street
Suite 500 Boston, Massachusetts 02106
Atlanta, Georgia 30346 (617) 951-8535
(770) 390-6500 Telecopy: (617) 951-8736
Telecopy: (770) 390-8434
First Commercial Trust Company, N.A.
-----------------------------------
Counsel:
Bonnie McKenzie Heartsill Ragon, III
First Commercial Trust Company, Gill Law Firm
National Association 424 West Capitol
Capitol and Broadway Streets Little Rock, Arkansas 72201
First Commercial Building, (501) 376-3800
7th Floor Telecopy: (501) 372-3359
Little Rock, Arkansas 72201
(501) 371-6744
Telecopy: (501) 371-8827
Capital Markets Assurance Corporation
-------------------------------------
885 Third Avenue, 14th Floor Counsel:
New York, NY 10022 Marc D. Wassermann, Esq.
Attn: Head of Exposure Sidley & Austin
Management 1722 Eye Street, NW
(212) 891-8806 Washington, D.C. 20006
Telecopy: (212) 755-5462 (202)736-8000
Telecopy: (202)736-8711
Notice to each of the aforementioned parties shall be
given by the Nominee if either FCI or FAC should default in
the performance of any of their respective obligations under
this Agreement.
17. Execution. This Agreement may be executed in one
---------
or more counterparts, all of which shall constitute one and
the same instrument.
[THIS SPACE INTENTIONALLY LEFT BLANK]
DATED as of the date first above written.
FAIRFIELD COMMUNITIES, INC.
/s/ Dawn Peoples BY: /s/ Robert W. Howeth
- ------------------------- ------------------------------
Witness TITLE: Senior Vice President
FAIRFIELD ACCEPTANCE CORPORATION
/s/ Dawn Peoples BY: /s/ Robert W. Howeth
- ------------------------- -------------------------------
Witness TITLE: President
COLORADO LAND TITLE COMPANY
/s/ Margaret E. Poer BY:/s/ Robert W. Ptolemy
- ------------------------- -------------------------------
Witness TITLE: President
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender under the FCI
Boston Loan Agreement
/s/Paula C. Anderson BY: /s/ Linda J. Carter
- ------------------------- --------------------------------
Witness TITLE: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender under the FAC
Boston Loan Agreement
/s/Paula C. Anderson BY:/s/ Linda J. Carter
- ------------------------- --------------------------------
Witness TITLE: Vice President
FIRST COMMERCIAL TRUST COMPANY, N.A.,
as 1993-A Trustee
/s/Paula C. Anderson BY: Bonnie McKenzie
- ------------------------- --------------------------------
Witness TITLE: Trust Operations Manager
CAPITAL MARKETS ASSURANCE
CORPORATION,
as Triple-A Collateral Agent
/s/Dawn Peoples BY: /s/ Philip Theoharides
- ------------------------ -------------------------------
Witness TITLE: Vice President (CapMac)
LIST OF SCHEDULES
-----------------
Schedule A: Properties
Schedule B: Mortgages
Schedule C: 1993-A Trust Lots and Intervals
Schedule D: Triple-A Intervals and Lots
SCHEDULE A
[TO BE AMENDED]
RECORDED SUBDIVISIONS
The following lots, parcels and tracts are all recorded in
the Office of the County Clerk and Recorder in and for
Archuleta County, Colorado. Dates included with the
following legal descriptions represent the dates on which
specific plats were recorded.
Lake Pagosa Park
- ----------------
Lake Pagosa Park consisting of:
Lots 1 through 39, inclusive & Tracts A, B and C of Block 1
1 parcel consisting of Block 2
Lots 1 through 16, inclusive and Tract A of Block 3
Lots 1 through 6, inclusive of Block 4
Lots 1 through 41 of Block 5
Lots 1 through 23, inclusive of Block 6
Lots 1 through 24, inclusive of Block 7
Lots 1 through 25, inclusive of Block 8
Lots 1 through 29, inclusive of Block 9
Lots 1 through 9, inclusive of Block 10
Lots 1 through 46, inclusive of Block 11
Lots 1 through 71, inclusive of Block 12
Lots 1 through 76, inclusive of Block 13
Lots 1 through 48, inclusive of Block 14
Lots 1 through 43, inclusive of Block 15
Lots 1 through 21, inclusive and Tract A of Block 16
Lots 1 through 18, inclusive of Block 17
Lots 8 through 13, inclusive of Block 18
Lots 1 through 35, inclusive of Block 19
Lots 1 through 24, inclusive of Block 20
Lots 1 through 15, inclusive of Block 21
Plat recorded in Archuleta County, Colorado, March 13, 1970;
Reception No. 72998 thru 73013, Plat File #71-86. (Total of
614 Lots, 5 Tracts)
Pagosa In The Pines
- -------------------
Pagosa In the Pines consisting of:
Lots 1 through 10, inclusive and Tract A of Block 1
Lots 1 through 24, inclusive of Block 2
Lots 1 through 30, inclusive of Block 3
Lots 1 through 38, inclusive of Block 4
Lots 1 through 17, inclusive of Block 5
Lots 1 through 28, inclusive of Block 6
Lots 1 through 16, inclusive of Block 7
Lots 1 through 21, inclusive of Block 8
Lots 1 through 34, inclusive, and Tract A of Block 9
Lots 1 through 14, inclusive of Block 10
Lots 1 through 61, inclusive of Block 11
Lots 1 through 6, inclusive of Block 12
Lots 1 through 61, inclusive of Block 13
Lots 1 through 30, inclusive of Block 14
Lots 1 through 10, inclusive of Block 15
Lots 1 through 21, inclusive of Block 16
Plat recorded in Archuleta County, Colorado, March 13, 1970;
Reception No. 73014 thru 73027, Plat File #87-100. (Total
of 421 Lots, 2 Tracts)
Pagosa In The Pines Unit Two
- ----------------------------
Pagosa In the Pines Unit Two consisting of Lots 1 through
384, inclusive.
Plat recorded in Archuleta County, Colorado, February 4,
1972; Reception No. 75408, Plat File #138 A-E. (Total of
384 Lots)
Pagosa Vista
- ------------
Pagosa Vista consisting of Lots 1 through 658, inclusive.
Plat recorded in Archuleta County, Colorado, September 13,
1971; Reception No. 74884, Plat File #131 A-K. (Total of
658 Lots)
Pagosa Meadows
- --------------
Pagosa Meadows consisting of Lots 1 through 106, inclusive.
Plat recorded in Archuleta County, Colorado, June 1, 1970;
Reception No. 73220, Plat file #102. (Total of 106 Lots)
Pagosa Meadows - Unit Two
- -------------------------
Pagosa Meadows Unit Two consisting of Lots 1 through 116,
inclusive.
Plat recorded in Archuleta County, Colorado, September 13,
1971; Reception No. 74883, Plat file #130. (Total of 116
Lots)
Pagosa Meadows - Unit Three
- ---------------------------
Pagosa Meadows Unit Three consisting of Lots 1 through 122,
inclusive, and 4 Tracts.
Plat recorded in Archuleta County, Colorado, May 23, 1972;
Reception No. 75834, Plat File #141 A-D. (Total of 122 Lots
and 4 Tracts)
Pagosa Meadows - Unit Four
- --------------------------
Pagosa Meadows Unit Four consisting of Lots 1 through 329,
inclusive.
Plat recorded in Archuleta County, Colorado, June 4, 1973;
Reception No. 77867, Plat File #153 A-H. (Total of 329
Lots)
Replat 184 84139 10-9-75
Replat 188 85910 8-4-76
Chris Mountain Village
- ----------------------
Chris Mountain Village consisting of Lots 1 through 1747,
inclusive.
Plat recorded in Archuleta County, Colorado, June 6, 1972;
Reception No. 75934, Plat File #142 A-22. (Total of 1747
Lots)
Chris Mountain Village Unit Two
- -------------------------------
Chris Mountain Village Unit Two consisting of Lots 1 through
413, inclusive.
Plat recorded in Archuleta County, Colorado, June 4, 1973;
Reception No. 77868, Plat File #154 A-F. (Total of 413
Lots)
Pagosa Highlands Estates
- ------------------------
Pagosa Highlands Estates consisting of Lots 1 through 795,
inclusive.
Plat recorded in Archuleta County, Colorado, February 24,
1972; Reception No. 75409, Plat File #139 A-G. (Total of
795 Lots)
Lake Forest Estates
- -------------------
Lake Forest Estates consisting of Lots 1 through 612,
inclusive.
Plat recorded in Archuleta County, Colorado, June 4, 1973;
Reception No. 77869, Plat File #155 A-6. (Total of 612
Lots)
Pagosa Alpha
- ------------
Pagosa Alpha consisting of portions of Section 15, 21, 22
and 23, Township 35 North, Range 2 West.
22 parcels in Section 15
36 parcels in Section 21
62 parcels in Section 22
45 parcels in Section 23
Plat recorded in Archuleta County, Colorado, June 13, 1969;
Reception No. 72213, Plat File #63. (Total of 165 parcels)
And replat of Pagosa Alpha recorded July 17, 1978 under
Reception No. 91872 in the Clerk and Recorders Office of
Archuleta County, Colorado.
Pagosa Village Service Commercial
- ---------------------------------
Pagosa Village Service Commercial consisting of Lots 2
through 49, inclusive.
Plat recorded in Archuleta County, Colorado, August 7, 1975;
Reception No. 83662, Plat File #178. (Total of 48 Lots)
Pagosa In The Pines Annex
- -------------------------
Pagosa In The Pines Annex consisting of Lots 11 through 17,
inclusive.
Plat recorded in Archuleta County, Colorado, June 4, 1973;
Reception No. 77864, Plat File #151. (Total of 7 Lots)
Pagosa Meadows Annex
- --------------------
Pagosa Meadows Annex consisting of Lots 107, 108 and 109.
Plat recorded in Archuleta County, Colorado, June 4, 1973;
Reception No. 77866, Plat File #152. (Total of 3 Lots)
Pagosa Trails
- -------------
Pagosa Trails consisting of Lots 1 through 502, inclusive.
Plat recorded in Archuleta County, Colorado, September 13,
1971; Reception No. 74885, Plat File #13A-1. (Total of 502
Lots)
Replat 236 105244
Lake Hatcher Park
- -----------------
Lake Hatcher Park consisting of Lots 1 through 293,
inclusive and 5 Tracts.
Plat recorded in Archuleta County, Colorado, November 5,
1973; Reception No. 78738, Plat File #160 A-C. (Total of
293 Lots and 5 Tracts)
Twincreek Village
- -----------------
Twincreek Village consisting of Lots 431 through 825 and 854
through 1017, inclusive.
Plat recorded in Archuleta County, Colorado, November 5,
1973; Reception No. 78739, Plat File #161 A-Q. (Total of
559 Lots)
Martinez Mountain Estates
- -------------------------
Martinez Mountain Estates consisting of Lots 1 through 136,
inclusive.
Plat recorded in Archuleta County, Colorado, November 8,
1978; Reception No. 93208, Plat File #205 A-E. (Total of
136 Lots)
Lakewood Village
- ----------------
Lakewood Village consisting of Lots 1 through 325, inclusive
and 1 Tract.
Plat recorded in Archuleta County, Colorado, April 30, 1979;
Reception No. 94867, Plat File #209 A-F. (Total of 325 Lots
and 1 Tract)
Lakeview Estates
- ----------------
Lakeview Estates consisting of Lots 1 through 118, inclusive
and 1 Tract.
Plat recorded in Archuleta County, Colorado, April 30, 1979;
Reception No. 94868, Plat File #210 A-B. (Total of 118 Lots
and 1 Tract)
Martinez Mountain Estates Unit Two
- ----------------------------------
Martinez Mountain Estates Unit Two consisting of Lots 1
through 78, inclusive and 1 Tract.
Plat recorded in Archuleta County, Colorado, March 31, 1980;
Reception No. 99072, Plat File #218 A-D. (Total of 78 Lots
and 1 Tract)
The Ranch Community
- -------------------
The Ranch Community consisting of Lots 1 through 90,
inclusive.
Plat recorded in Archuleta County, Colorado, May 29, 1981;
Reception No. 104681, Plat File #234 A-D. (Total of 90
Lots) Replat recorded in Archuleta County, Colorado,
September 30, 1982; Reception No. 112863, Plat File #234 E.
(Replat of Lots 1 through 19 and 75 through 90)
North Village Lake
- ------------------
North Village Lake consisting of Lots 1 through 159,
inclusive.
Plat recorded in Archuleta County, Colorado, March 16, 1982;
Reception No. 109817, Plat File #248 A-D. (Total of 159
Lots). Correction plat recorded in Archuleta County,
Colorado, September 30, 1982, Reception No. 112864, Plat
File #248 A-1 - #248 C-1. Affidavit of Correction for North
Village Lake recorded April 4, 1983 in Book 197 at Page 366,
in the office of the Clerk and Recorder of Archuleta County,
Colorado.
Mallard Point Estates
- ---------------------
Mallard Point Estates consisting of Lots 5, 6, 7, 8, 11, 12,
13, 14, 16, 17, 18 and 21.
Plat recorded in Archuleta County, Colorado, November 27,
1985; Reception No. 135554. (Total of 12 Lots)]
PROVIDED HOWEVER, there is hereby excepted from and out of
the lots, parcels and tracts set forth in the preceding
Schedule "A" all lots, parcels and tracts which have been
deeded by Fairfield-Pagosa, Inc. or its predecessors unto
third party purchasers and duly recorded in the Office of
the Clerk and Recorder in and for Archuleta County,
Colorado.
RECORDED TIMESHARE REGIMES
The following timeshare regimes are all recorded in the
Office of the County Clerk and Recorder in and for Archuleta
County, Colorado. Dates included with the following legal
descriptions represent the dates on which specific plats
were recorded.
Eagle's Loft (Phase I)
- ----------------------
That property on which is located Phase I of Eagle's
Loft as recorded in Reception No. 117699 in the Office of
the County Clerk and Recorder in and for Archuleta County,
Colorado, and as further described in that Declaration of
Individual and/or Interval Ownership for Eagle's Loft
recorded on July 29, 1983, in Book 200, page 834, Reception
No. 117700, in the Office of the County Clerk and Recorder
in and for Archuleta County, Colorado.
The above described property has located upon it the
following numbered pedestal units (Buildings): Buildings 1
- - 7, inclusive.
The above described property is more particularly
described as follows:
A portion of Parcel 3A, of the "Second Replat of SOUTH
VILLAGE LAKE", recorded as reception # 111806, plat file
#238 H-L, as amended by Affidavit of Correction, recorded
January 18, 1983, at Reception No. 114579, of Archuleta
County Records in Archuleta County, Colorado and is more
particularly described as follow:
BEGINNING at the southerly most corner of said Parcel
3A; thence N 43 02'13" W, along the southwesterly line of
said Parcel 3A, a distance of 90.00 feet; thence N 2 27'47"
E, along the westerly line of said Parcel 3A, a distance of
450.00 feet; thence S 65 48'44" E, a distance of 264.27 feet
to a point on an easterly line of said Parcel 3A; thence
southerly along the following easterly and southerly lines
of said Parcel 3A;
S 10 30'32" W, a distance of 65.39 feet to the
P.C. of a curve in a southerly direction; thence
along said curve, concave to the east, having a
central angle of 23 04'56" and a radius of 413.32
feet, a distance of 166.51 feet; thence S
46 57'47", along a non-tangent line, a distance of
260.00 feet to the TRUE POINT OF BEGINNING.
Parcel contains 2.1420 acres more or less.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Eagle's Loft (Phase II)
- ----------------------
That property on which is located Eagle's Loft (Phase
II) as recorded under Reception No. 119118 in the Office of
the County Clerk and Recorder in and for Archuleta County,
Colorado, and shall be subject to that Declaration of
Individual and/or Interval Ownership for Eagle's Loft
recorded on July 29, 1983, in Book 200, page 834, Reception
No. 117700, and further subject to that First Supplemental
Declaration of Individual and/or Interval Ownership for
Eagle's Loft recorded on October 7, 1983, in Book 203, Page
564, Reception No. 119119, all in the Office of the County
Clerk and Recorder in and for Archuleta County, Colorado.
The above described property has located upon it the
following pedestal units (Buildings):
Buildings 8-14, inclusive.
The above described property is more particularly
described as follows:
A portion of Parcel 3A, of the "Second Replat of SOUTH
VILLAGE LAKE", recorded as reception # 111806, plat file
#238 H-L, as amended by Affidavit of Correction, recorded
January 18, 1983, at Reception No. 114579, of Archuleta
County Records in Archuleta County, Colorado and is more
particularly described as follow:
BEGINNING at the northerly most corner of said Parcel
3A; thence S 43 38'41" E, along a northerly line of said
Parcel 3A, a distance of 307.46 feet to a P.O.C. of the
curved Right-of-Way of Popoa Circle; thence along said curve
in a southerly direction, said curve being concave to the
east, having a central angle of 35 50'51", a radius of
205.00 feet and a Local Tangent Bearing of S 46 21'23" W, a
distance of 128.26 feet; thence N 65 48'44" W, a distance of
264.27 feet; thence N 18 32'13" W, along a westerly line of
said Parcel 3A, a distance of 185.00 feet; thence N
71 23'08" E, along a northerly line of said Parcel 3A, a
distance of 155.91 feet to the TRUE POINT OF BEGINNING.
Parcel contains 1.469 acres more or less.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Eagle's Loft (Phase III)
- -----------------------
That property on which is located Eagle's Loft (Phase
III) as recorded under Reception No. 130203 in the Office of
the County Clerk and Recorder in and for Archuleta County,
Colorado, and shall be subject to that Declaration of
Individual and/or Interval Ownership for Eagle's Loft
recorded on July 29, 1983, in Book 200, page 834, Reception
No. 117700, and further subject to that Second Supplemental
Declaration of Individual and/or Interval Ownership for
Eagle's Loft recorded on May 30, 1984, under Reception No.
123459, as amended by that First Amendment to Second
Supplemental Declaration of Individual and/or Interval
Ownership for Eagle's Loft recorded on July 13, 1984,
Reception No. 124494, all in the Office of the County Clerk
and Recorder in and for Archuleta County, Colorado.
The above described property has located upon it the
following pedestal units (Buildings):
Buildings 15-38, inclusive.
Said property formerly being described as Eagle's Loft
(Phase III), Buildings 15-36, as per plat recorded under
Reception No. 123458, in the Office of the County Clerk and
Recorder in and for Archuleta County, Colorado.
The above described property is more particularly
described as follows:
Parcel 2-A of the "SECOND REPLAT OF SOUTH VILLAGE
LAKE", recorded as Reception No. 111806, Plat File #238, H
through L, as amended by Affidavit of Correction, recorded
January 18, 1983, at Reception No. 114579, in the Clerk and
Recorder's Office of Archuleta County, Colorado and is more
particularly described as follows:
BEGINNING at the corner common to said Parcel 2-A,
Tract E, and the southerly Right-of-Way of Davis Cup Drive
of said plat; thence S 37 43'00" W, a distance of 241.29
feet, thence N 85 55'59F" W, a distance of 412.95 feet;
thence N 19 12'02" W, a distance of 200.00 feet; thence N
50 18'14" W, a distance of 153.78 feet; thence N 36 38'47"
W, a distance of 140.00 feet; thence N 62 21'13" E, a
distance of 266.96 feet; thence S 68 33'37" E, a distance of
503.92 feet to the P.O.C. of a curve in a southeasterly
direction; thence along said curve, concave to the
northeast, having a central angle of 111 43'25", a radius of
130.00 feet and a Local Tangent Bearing of S 21 26'21" W, a
distance of 253.50 feet to the TRUE POINT OF BEGINNING.
Parcel contains 6.116 acres more or less.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Eagle's Loft (Phase IV)
- ----------------------
That property on which is located Eagle's Loft (Phase
IV) as recorded under Reception No. 132402 in the Office of
the County Clerk and Recorder in and for Archuleta County,
Colorado, and shall be subject to that Declaration of
Individual and/or Interval Ownership for Eagle's Loft
recorded on July 29, 1983, in Book 200, page 834, Reception
No. 117700, and further subject to that Third Supplemental
Declaration of Individual and/or Interval Ownership for
Eagle's Loft recorded on July 10, 1985, under Reception No.
132403, all in the Office of the County Clerk and Recorder
in and for Archuleta County, Colorado.
The above described property has located upon it the
following pedestal units (Buildings):
Buildings 39-56, inclusive.
The above described property is more particularly
described as follows:
Parcel 3-B of the "SECOND REPLAT OF SOUTH VILLAGE
LAKE", recorded as Reception No. 111806, Plat File #238, H
through L, in the Clerk and Recorder's Office of Archuleta
County, Colorado, and is more particularly described as
follows:
BEGINNING at the southerly most corner of said Parcel
3-B, which is also the corner common to the Right of Way of
Papoa Circle and parcel 3-A of said plat; thence N 43 38'41"
W, a distance of 307.46 feet; thence S 71 23'08" W, a
distance of 155.91 feet; thence N 5 48'02" E, a distance of
190.33 feet; thence N 30 03'26" E, a distance of 240.00
feet; thence S 33 26'34" E, a distance of 145.00 feet,
thence S 73 26'34" E, a distance of 180.00 feet, thence S
38 26'34" E, a distance of 180.00 feet to the P. C. of a
curve in an easterly direction; thence along said curve
concave to the north, having a central angle of 116 29'55"
and a radius of 70.00 feet, a distance of 142.33 feet;
thence S 64 56'34" E, along a non-tangent line, a distance
of 120.00 feet, thence S 24 42'50" W, a distance of 186.82
feet to a P.O.C. of a curve in a westerly direction; thence
along said curve concave to the south, having a central
angle of 32 17'00", a radius of 255.00 feet, and a Local
Tangent Bearing of N 68 45'38" W, a distance of 143.68 feet
to the P.T. of the curve; thence S 78 57'22", a distance of
50.17 feet to the P.C. of a curve in a southwesterly
direction; thence along said curve concave to the southeast,
having a central angle of 32 36'00" and a radius of 205.00
feet, a distance of 116.64 feet to the TRUE POINT OF
BEGINNING.
Parcel contains 4.317 acres more or less.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Elk Run Townhouses, Parcels J and K of the Third Replat of
- -----------------------------------------------------------
South Village Lake
- ------------------
That property which is described as Elk Run Townhouses
as recorded in Plat File No. 317 under Reception No. 140480,
in the Office of the County Clerk and Recorder for Archuleta
County, Colorado, and subject to that Declaration of
Protective Covenants and Interval Ownership for Elk Run
Townhouses recorded June 26, 1986, under Reception No.
140481, in the Office of the County Clerk and Recorder for
Archuleta County, Colorado ("Declaration").
The above described property has located upon it four
(4) buildings, with each building containing four (4) units
and numbered as follows:
Building No. 1 - Units 7101-7104, inclusive
Building No. 2 - Units 7105-7108, inclusive
Building No. 3 - Units 7109-7112, inclusive
Building No. 4 - Units 7113-7116, inclusive
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Elk Run Townhouses, Parcels J and K of the Third Replat of
- -----------------------------------------------------------
South Village Lake
- ------------------
That property which is described as Elk Run Townhouses
as recorded in Plat File No. 323 under Reception No.
0151975, in the Office of the County Clerk and Recorder for
Archuleta County, Colorado, and subject to that Second
Amendment to Declaration of Protective Covenants and
Interval Ownership for Elk Run Townhouses recorded
December 1, 1987, under Reception No. 0151976, in the Office
of the County Clerk and Recorder for Archuleta County,
Colorado ("Declaration").
The above described property has located upon it one
(1) building, which contains two (2) units and numbered as
follows:
Building No. 5 - Units 7117-7118
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Masters Place Condominiums, Phase I, Building 2:
- -----------------------------------------------
That property on which will be located one, three-story
building described as Building 2 containing 12 units
designated, respectively, as Units 7309, 7310, 7311, 7312,
7313, 7314, 7315, 7316, 7317, 7318, 7319, and 7320 and
further subjected to that certain Declaration of Condominium
for Masters Place Condominiums which will be recorded with
the Office of the County Clerk and Recorder for Archuleta
County, Colorado, at such time as the final as-built plat
has been recorded. Said property being presently described
as follows:
A portion of Parcel C, Third Replat of South Village Lake,
Recorded as Reception No. 139304, Archuleta County,
Colorado, being more particularly described as follows, to-
wit:
Beginning at the most southerly corner of said Parcel C,
thence N.41 56'19"W., 221.00 feet distant, along the
southwesterly boundary of said Parcel C, to the true point
of beginning; thence N.41 56'19"W., 106.50 feet distant,
continuing along the southwesterly boundary of said Parcel
C; thence along a 560.41 feet radius curve to the left,
144.31 feet distant, the long chord of which bears
N.49 18'56" W., 143.91 feet distant; thence N.36 12'13"E.,
131.28 feet distant to a point on the northeasterly boundary
of said Parcel C; thence along a 681.47 feet radius curve to
the right, 171.45 feet distant, the long chord of which
bears S. 49 00' 55" E., 171.00 feet distant, along the
northeasterly boundary of said Parcel C; thence
S.41 48'28"E., 106.80 feet distant, continuing along the
northeasterly boundary of said Parcel C; thence
S.48 11'32"W., 130.83 feet distant to the true point of
beginning, containing 0.80 acres, more or less.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Master Place, Phase II
- ----------------------
A parcel of land being a portion of Parcel C, Third Replat
of South Village Lake, Section 17, Township 35 North, Range
2 West, Recorded as Reception No. 139304, Archuleta County,
Colorado, being more particularly described as follows, to-
wit:
Beginning at the most southerly corner of said Parcel C;
thence N. 41 56' 19" W., 221.00 feet distant, along the
southwesterly boundary of said Parcel C; thence N. 48 11'
32" E., 130.83 feet distant to a point on the northeasterly
boundary of said Parcel C; thence S. 41 48" 28" E., 85.40
feet distant, along the northeasterly boundary of said
Parcel C; thence S. 41 43' 53" E., 135.41 feet distant;
continuing along the northeasterly boundary of said Parcel
C; thence S. 48 06' 37" W., 130.14 feet distant, along the
southeasterly boundary of said Parcel C, to the point of
beginning, containing 0.66 acres, more or less.
The above property is described as Masters Place Phase II as
recorded in Plat File No. 339A-C under Reception No. 177633
in the Office of the County Clerk and Recorder for Archuleta
County, Colorado and is subject to that First Supplemental
to Declaration of Condominium and Interval Ownership for
Masters Place Condominiums Phase II recorded February 7,
1991, Reception No. 177634, Book 322, Page 73, in the Office
of the County Clerk and Recorder for Archuleta County,
Colorado.
The above described property has located upon it one
building described as Building 1, containing eight units
designated, respectively, as Units 7301, 7302, 7303, 7304,
7305, 7306, 7307 and 7308.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Mountain Meadows (Phase One)
- ----------------------------
That property on which is located Mountain Meadows -
Phase One as recorded in Plat File No. 307 under Reception
No. 137131, in the Office of the County Clerk and Recorder
for Archuleta County, Colorado, and shall be subject to that
Declaration of Interval Ownership for Mountain Meadows
recorded January 21, 1986, under Reception No. 137132, in
the Office of the County Clerk and Recorder for Archuleta
County, Colorado ("Declaration").
The above described property has located upon it one
(1) Building, described and defined in the Declaration as
"Building One"; which Building contains four (4) timeshared
Townhouse Units, defined in and subject to the Declaration,
identified, respectively as Unit 7609, 7610, 7611, and 7612.
The property upon which Building One and Units 7609,
7610, 7611 and 7612 are located is more particularly
described as follows:
A part of Parcel 4 of Second Replat of South Village
Lake, subdivision plat recorded on August 3, 1982,
Reception No. 111806, located in Sections 16, 17, 19,
and 20, Township 35 North, Range 2 West of the New
Mexico Principal Meridian, Archuleta County, Colorado,
and more particularly described as follows:
Commencing at the most southerly corner of said Parcel
4, said corner being a P.O.C. on the northerly Right of
Way of Lake Side Drive, thence along said Right of Way,
along a curve in a northwesterly direction, being
concave to the left, having a radius of 640 feet, and a
central angle of 6 07'38", a distance of 68.44 feet;
thence N 9 06'11" E along a non-tangent line, a
distance of 232.32 feet; thence N 40 15'00" W, a
distance of 76.00 feet; thence N 49 45'00" E, a
distance of 62.00 feet; thence N 11 30'00" W, a
distance of 33.00 feet to the TRUE POINT OF BEGINNING;
thence N 41 44'35" W a distance of 60.29 feet; thence N
30 00'00" W a distance of 150.00 feet; thence N
63 00'00" E a distance of 137.00 feet to a corner of
said parcel 4; thence S 72 00'00" E a distance of 90.00
feet; thence S 11 30'00" E a distance of 114.00 feet;
thence S 49 45'00" W a distance of 151.00 feet to the
TRUE POINT OF BEGINNING.
Parcel contains 0.7567 acres more or less.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Ptarmigan Townhouses, Parcel 3 of the Third Replat of South
- ------------------------------------------------------------
Village Lake
- ------------
That property which is described as Parcel "E" -
Ptarmigan Townhouses as recorded in Plat Sheet No. 324 &
324A under Reception No. 153256, in the Office of the County
Clerk and Recorder of Archuleta County, Colorado, and
subject to that Declaration of Protective Covenants and
Interval Ownership for Ptarmigan Townhouses ("Declaration")
recorded February 4, 1988, under Reception No. 153260, and
re-recorded on February 18, 1988, under Reception No.
153557, in the Office of the County Clerk and Recorder for
Archuleta County, Colorado.
The above described property has located upon it four
(4) buildings, with each building containing two (2) units
numbered as follows:
Building No. 1 - Units 7201 and 7202;
Building No. 2 - Units 7203 and 7204;
Building No. 3 - Units 7205 and 7206;
Building No. 4 - Units 7207 and 7208.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Ptarmigan Townhouses, Phase II, a Portion of Parcel E of the
- ------------------------------------------------------------
Third Replat of South Village Lake, Buildings 5, 6, 7 and 8
- -----------------------------------------------------------
That property on which will be located four (4) one-
story buildings containing two (2) one-level townhouse units
per building which are designated, respectively, as Building
No. 5, Units 7209 and 7210; Building No. 6, Units 7211 and
7212; Building No. 7, Units 7213 and 7214; and Building No.
8, Units 7215 and 7216 as per plat recorded on June 7, 1988,
in Plat Sheet No. 325 under Reception No. 156199, in the
Office of the County Clerk and Recorder for Archuleta
County, Colorado, and subject to that certain First
Supplemental Declaration to Supplemental Declaration of
Protective Covenants and Interval Ownership for Ptarmigan
Townhouses recorded on June 7, 1988, under Reception No.
156200, in the Office of the County Clerk and Recorder for
Archuleta County, Colorado.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Ptarmigan Townhouses, Phase III, a Portion of Parcel E of
- -----------------------------------------------------------
the Third Replat of South Village Lake, Buildings 9, 10 and
- ------------------------------------------------------------
11
- --
That property on which will be located three (3) one-
story buildings containing two (2) one-level townhouse units
per building which are designated, respectively, as Building
No. 9, Units 7217 and 7218; Building No. 10, Units 7219 and
7220; and Building No. 11, Units 7221 and 7222 as per plat
recorded on June 7, 1988, in Plat Sheet No. 326 under
Reception No. 156202, in the Office of the County Clerk and
Recorder for Archuleta County, Colorado, and subject to that
certain Second Supplemental Declaration to Supplemental
Declaration of Protective Covenants and Interval Ownership
for Ptarmigan Townhouses recorded on June 7, 1988, under
Reception No. 156203, in the Office of the County Clerk and
Recorder for Archuleta County, Colorado.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Ptarmigan Townhouses, Phase IV, a Portion of Parcel D of the
- ------------------------------------------------------------
Third Replat of South Village Lake, Buildings 12, 13 and 14
- -----------------------------------------------------------
That property on which will be located three (3) one-
story buildings containing two (2) one-level townhouse units
per building which are designated, respectively, as Building
No. 12, Units 7223 and 7224; Building No. 13, Units 7225 and
7226; and Building No. 14, Units 7227 and 7228 as per plat
recorded on November 3, 1988, in Plat Map No. 327 under
Reception No. 159241, in the Office of the County Clerk and
Recorder for Archuleta County, Colorado, and further subject
to that certain Third Supplemental Declaration to
Supplemental Declaration of Protective Covenants and
Interval Ownership for Ptarmigan Townhouses recorded on
November 2, 1988, under Reception No. 159242, in Record Book
233, Page 171 and rerecorded on November 21, 1988, under
Reception No. 0159517 in Record Book 234, Page 283, in the
Office of the County Clerk and Recorder for Archuleta
County, Colorado.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Ptarmigan Phase V
- ------------------
A parcel of land being a portion of Parcel D, Third
Replat of South Village Lake, recorded under Reception No.
139304, Plat File 314 A-C, in the Office of the County Clerk
and Recorder, Archuleta County, Colorado, said parcel being
more particularly described as follows, to-wit:
Beginning at the most southerly corner of said
Parcel D, whence the northeast section corner of
Section 17, T. 35 N., R. 2N., N.M.P.M., Archuleta
County, Colorado, bears N. 6 51' 27" E., 3951.44
feet;
Thence N. 68 17' 00" W., 280.00 feet to the TRUE
POINT OF BEGINNING;
Thence N. 68 17' 00" W., 29.55 feet along the
southwesterly boundary of said Parcel D, to a 1/2
inch diameter rebar with plastic cap set by Davis
Engineering Service, Inc.;
Thence continuing along the said southwesterly
boundary 155.01 feet along a curve to the right
having a radius of 645.00 feet, the long chord of
which bears N. 61 22' 47" W., 154.64 feet to a
1/2 inch diameter rebar with plastic cap set by
Davis Engineering Service, Inc.;
Thence N. 54 30' 27" W., 1.34 feet, continue
along the said southwesterly boundary;
Thence N. 62 52' 58" E., 236.55 feet to a point
on the northeasterly boundary of said Parcel D;
Thence S. 63 29' 49" E., 28.01 feet along the
said northeasterly boundary;
Thence S. 21 29' 51" W., 194.65 feet to the TRUE
POINT OF BEGINNING, containing 0.48 acres, more or
less.
The above property is described as Ptarmigan Phase V as
recorded in Plat File No. 341, under Reception No. 179510 in
the Office of the County Clerk and Recorder for Archuleta
County, Colorado and is subject to that Fourth Supplemental
Declaration to Declaration of Protective Covenants and
Interval Ownership for Ptarmigan Townhouses recorded May 22,
1991, Reception No. 179511, Book 331, Page 164 in the Office
of the County Clerk and Recorder for Archuleta County,
Colorado.
The above described property has located upon it one
building described as Building 15, containing two units
designated, respectively, as Units 7229 and 7230.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Village Pointe Condominiums, Phase 1, Buildings 1 and 2
- -------------------------------------------------------
That property on which will be located two (2) two-
story buildings containing four units per building, which
are designated, respectively, as Building 1, Units 7501,
7502, 7503 and 7504; and Building 2, Units 7505, 7506, 7507,
and 7508 and which are subject to that certain Declaration
of Condominium and Interval Ownership for Village Pointe
Condominiums which will be recorded with the Office of the
County Clerk and Recorder for Archuleta County, Colorado, at
such time as the final as-built plat has been recorded.
Said property is presently being described as follows:
A parcel of land being a portion of Parcel B,
Third Replat of South Village Lake, recorded as
Reception No. 130304, in the Office of the County
Clerk and Recorder, Archuleta County, Colorado,
said parcel being more particularly described as
follows, to-wit:
Beginning at the most northerly corner of said
Parcel B, whence the northeast section corner of
Section 1, T. 35 N., R. 2 W., N.M.P.M., Archuleta
County, Colorado, bears N. 30 21' 21" E., 3373.86
feet distant; thence S. 20 07' 58" E., 263.04
feet distant to the TRUE POINT OF BEGINNING;
thence S. 08 07' 30" E., 140.00 feet distant
along the easterly boundary of said Parcel B;
thence along the southerly boundary of said
Parcel B 137.11 feet distant, being a curve to the
left having a radius of 180.00 feet, the long
chord of which bears S. 60 03' 17" W., 133.81
feet distant; thence continuing along the
southerly boundary of said Parcel B, S. 38 14'
04" W., 188.00 feet distant; thence N. 66 09' 11"
W., 187.62 feet distant; thence N. 54 06' 39" E.,
100.00 feet distant; thence N. 17 14' 38" E.,
120.00 feet distant; thence N. 11 02' 27" W.,
65.83 feet distant; thence N. 82 00' 00" E.,
282.88 feet distant to the TRUE POINT OF
BEGINNING, containing 1.69 acres, more or less.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Village Pointe Condominiums, Future Development Property
- --------------------------------------------------------
Phase 2 of Village Pointe Condominiums
- --------------------------------------
A parcel of land being a portion of Parcel B, Third
Replat of South Village Lake, recorded as Reception No.
130304, in the Office of the County Clerk and Recorder,
Archuleta County, Colorado, said parcel being more
particularly described as follows, to-wit:
Beginning at the most northerly corner of said
Parcel B, whence the northeast section corner of
Section 17, T. 35 N., R. 2 W., N.M.P.M., Archuleta
County, Colorado bears N. 30 21' 21" E., 3373.86
feet distant; thence S. 54 29' 04" E., 75.62 feet
distant along the easterly boundary of said Parcel
B; thence continuing along the easterly boundary
of said Parcel B, S. 08 07' 30" E., 205.10 feet
distant; thence S. 82 00' 00" W., 282.88 feet
distant; thence N. 11 02' 27" W., 255.68 feet
distant; thence S. 88 28' 29" E., 167.28 feet
distant along the northerly boundary of said
Parcel B, 85.76 feet distant, being a curve to
left having a radius of 80.00 feet, the long chord
of which bears N. 60 48' 59" E., 81.71 feet
distant, to the point of beginning, containing
1.58 acres, more or less.
The above property is described as Village Pointe Phase
II recorded in Plat File No. 332-332A-E, under Reception No.
171189 in the Office of the County Clerk and Recorder for
Archuleta County, Colorado and is subject to the First
Supplemental Declaration to Declaration of Protective
Covenants and Interval Ownership for Village Pointe
Condominiums Phase II recorded May 3, 1990, Reception No.
171190, Book 242, in the Office of the County Clerk and
Recorder for Archuleta County, Colorado.
The above described property has located upon it two
buildings described as Building 3, containing four units
designated, respectively, as Units 7509, 7510, 7511 and
7512; and Building 4 containing four units designated,
respectively, as Units 7513, 7514, 7515, 7516.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
Phase 3 of Village Pointe Condominiums
- --------------------------------------
A parcel of land being a portion of Parcel B, Third
Replat of South Village Lake, recorded as Reception No.
130304, in the Office of the County Clerk and Recorder,
Archuleta County, Colorado, said parcel being more
particularly described as follows, to-wit:
Beginning at the most northerly corner of said
Parcel B, whence the northeast section corner of
Section 17, T. 35 N., R. 2 W., N.M.P.M., Archuleta
County, Colorado bears N. 30 21' 21" E., 3373.86
feet distant; thence S. 29 15' 07" W., 600.79
feet to the TRUE POINT OF BEGINNING; thence N.
20 59' 30" W., 162.82 feet distant along the
westerly boundary of said Parcel B N. 37 54' 01"
W., 208.72 feet distant; thence N. 54 32' 09" E.,
296.58 feet distant along the northerly boundary
of said Parcel B; thence S. 11 02' 27" E., 321.51
feet distant; thence S. 17 14' 38" W., 120.00
feet distant; thence S. 54 06' 39" W., 100.00
feet distant to the TRUE POINT OF BEGINNING,
containing 1.76 acres, more or less.
The above property is described as Village Pointe Phase
III as recorded in Plat File No. 238A-F under Reception No.
179324 in the Office of the County Clerk and Recorder for
Archuleta County, Colorado and is subject to that Second
Supplemental Declaration and Third Amendment to Declaration
of Protective Covenants and Interval Ownership for Village
Pointe Condominiums Phase III recorded November 21, 1990,
Reception No. 176323, Book 315, Page 350.
The above described property has located upon it two
buildings described as Building 5, containing eight units
designated, respectively, as Units 7517, 7518, 7519, 7520,
7521, 7522, 7523 and 7524; and Building 5 containing eight
units designated, respectively, as Units 7525, 7526, 7527,
7528, 7529, 7530, 7531 and 7532.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY SET
FORTH ABOVE ALL OF THOSE UNIT WEEKS WHICH HAVE BEEN DEEDED
BY FAIRFIELD PAGOSA, INC. OR FAIRFIELD COMMUNITIES, INC.,
ITS SUCCESSOR CORPORATION, UNTO THIRD PARTY PURCHASERS AND
DULY RECORDED IN THE OFFICE OF THE COUNTY CLERK AND RECORDER
IN AND FOR ARCHULETA COUNTY, COLORADO.
SCHEDULE B
All platted lots as set forth in Schedule A attached hereto,
excepting all lots as specified in Schedule A, are subject
to those encumbrances listed below:
PROPERTY SUBJECT
TYPE OF LIEN PARTY GRANTING LIEN HOLDER OF LIEN TO LIEN
- ------------ ------------------- ------------- ----------------
Deed of Trust Fairfield-Eaton, Inc. The First All property
dated March 2, (formerly Eaton National Bank described in
1983, recorded International of Boston Schedule "A",
March 4, 1983 Corporation) [except Mallard
in Book 196, Point Estates]
Page 441,
Reception
No. 15202 as
recorded in the
Archuleta County
Clerk and
Recorder's Office
First Amendment Fairfield-Eaton, Inc. The First All property
to Deed of Trust (formerly Eaton National Bank described in
dated June 10, International of Boston Schedule "A",
1983, recorded Corporation) [except Mallard
June 21, 1983 Point Estates]
in Book 199,
Page 833,
Reception
No. 117126 as
recorded in the
Archuleta County
Clerk and
Recorder's Office
Deed of Trust Fairfield Acceptance The First All property
dated June 21, Corporation National Bank described in
1983, recorded of Boston Schedule "A",
June 21, 1983 [except Mallard
in Book 199, Point Estates]
Page 853,
Reception
No. 117127 as
recorded in the
Archuleta County
Clerk and
Recorder's Office
Fairfield Communities, Inc.: First National Bank of Boston
- ---------------------------
AMENDED and RESTATED DEED OF TRUST, ASSIGNMENT of RENTS, LEASES and
LEASEHOLD INTERESTS and SECURITY AGREEMENT dated August 25, 1992 effective
as of September 1, 1992, as recorded September 4, 1992 in Book 382, Pages
257-311, Reception No. 0188775 in the Archuleta County Clerk and Recorder's
Office, as amended from time to time.
Fairfield Acceptance Corporation:
- --------------------------------
AMENDED and RESTATE DEED OF TRUST, ASSIGNMENT of RENTS, LEASES and
LEASEHOLD INTERESTS and SECURITY AGREEMENT dated November 18, 1992, but
effective as of September 1, 1992, as recorded December 30, 1992, Reception
No. 191405 as recorded in Archuleta County Clerk and Recorder's Office, as
amended from time to time.
SCHEDULE C
1993-A TRUST INTERVALS AND LOTS
(Previously Provided)
[Information Omitted]
SCHEDULE D
TRIPLE-A INTERVALS AND LOTS
GRANTED ON CLOSING DATE
(April 10, 1995 - Previously Provided)
[Information Omitted]
ADDENDUM TO
SCHEDULE D
TRIPLE-A INTERVALS AND LOTS
GRANTED ON EFFECTIVE RESTATEMENT DATE
(September 17, 1996)
None
FIRST AMENDMENT TO
WESTWINDS THIRD AMENDED AND RESTATED
TITLE CLEARING AGREEMENT
(LAWYERS)
This Amendment is made as of September 28, 1993, by and
among Fairfield Communities, Inc., a Delaware corporation
(referred to herein as "FCI"), Fairfield Myrtle Beach, Inc.,
a South Carolina corporation (referred to herein as "FMB"),
Fairfield Acceptance Corporation, a Delaware corporation and
wholly-owned subsidiary of FCI (referred to herein as
"FAC"), Lawyers Title Insurance Corporation, a Virginia
corporation (referred to herein as "Nominee"), The First
National Bank of Boston, Boston, Massachusetts, in an
individual capacity and not as trustee (collectively
referred to herein together with all past, present and
future participants as "Bank of Boston"), as lender to
Fairfield pursuant to the FCI Boston Loan Agreement, The
First National Bank of Boston, Boston, Massachusetts, as
agent for a group of lenders to FAC pursuant to the FAC
Boston Loan Agreement and not as trustee (referred to herein
as "Agent Bank"), and First Commercial Trust Company, N.A.,
Little Rock, Arkansas, as trustee under the 1993-A Pledge
Agreement hereinafter defined (referred to herein as the
"1993-A Trustee"). This Amendment amends that certain
Westwinds Third Amended and Restated Title Clearing
Agreement dated as of November 15, 1992 (the "Agreement").
Unless otherwise defined herein, all capitalized terms shall
have the meanings ascribed in the Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to Section 15(b) of the Agreement,
FCI, FMB, FAC, Nominee, Bank of Boston and Agent Bank can
amend the Agreement to identify and segregate a separate
pool of Sales Contracts and the Intervals relating thereto,
which are to be sold or pledged pursuant to a pooling, sale
or pledge agreement; and
WHEREAS, FAC has sold certain Sales Contracts to
Fairfield Funding Corporation, a Delaware corporation, which
Sales Contracts have in turn been pledged by Fairfield
Funding Corporation to First Commercial Trust Company, N.A.,
as trustee (referred to herein as the "1993-A Trustee"),
pursuant to a Pledge and Servicing Agreement dated as of
September 28, 1993 (the "1993-A Pledge Agreement"), relating
to the issuance by Fairfield Funding Corporation of certain
Interval Ownership and Lot Contract Pay-Through Notes,
Series 1993-A, and the parties hereto wish to amend the
Agreement to identify and segregate those Sales Contracts
and the Lots and Intervals related thereto;<PAGE>
NOW, THEREFORE, in consideration of the mutual promises
and covenants set forth herein, the parties hereto agree as
follows:
1. Section 1 of the Agreement is hereby amended by
adding thereto the following definitions (and by striking
any definitions which are supplanted by the definitions set
forth below):
Bank means, as appropriate, The First National Bank of
----
Boston, as lender pursuant to the FCI Boston Loan Agreement,
the Agent Bank, as lender pursuant to the FAC Boston Loan
Agreement, the 1992 purchaser or the 1993-A Trustee.
FAC means, as appropriate, Fairfield Acceptance
---
Corporation, individually or in its capacity as servicer
under the 1993-A Pledge Agreement.
Loan Agreement means, as appropriate, (i) the FCI
---------------
Boston Loan Agreement, (ii) the FAC Boston Loan Agreement,
(iii) the 1992 Sale Agreement or (iv) the 1993-A Pledge
Agreement. The use of the defined term "Loan Agreement"
herein to identify one of the various pooling agreements is
for convenience only and shall not be construed to
characterize the sale of the related Intervals and Sales
Contracts as loan transactions.
1993-A Pledge Agreement means that certain Pledge and
------------------------
Servicing Agreement dated as of September 28, 1993, by and
among FAC, as Servicer, Fairfield Funding Corporation, as
Issuer, the 1993-A Trustee, as Trustee, and First Commercial
Mortgage Company, as Standby Servicer, relating to the
issuance by Fairfield Funding Corporation of certain
Interval Ownership and Lot Contract Pay-Through Notes,
Series 1993-A.
1993-A Trust Intervals means those Intervals which give
----------------------
rise to certain Sales Contracts pledged, assigned and
transferred to the 1993-A Trustee pursuant to the 1993-A
Pledge Agreement. The 1993-A Trust Intervals are described
on Schedule D attached to this Agreement and made a part
hereof, as amended from time to time.
1993-A Trustee means First Commercial Trust Company,
---------------
N.A., Little Rock, Arkansas, as trustee under the 1993-A
Pledge Agreement.
2. Section 3(a) of the Agreement is hereby amended to
read as follows:
"(a) Nominee acknowledges that notwithstanding the fact
that it will be the record owner of the fee simple title to
the Properties, its ownership is subject in all respects to
the provisions of this Agreement, those Mortgages identified
on Schedule B, and the terms and conditions of the Loan
Agreements; and that Nominee holds fee simple title to the
Properties for the benefit of the parties hereto and shall
have no equitable rights in the Properties nor any right to
the income or profits to be derived therefrom."
3. Section 4 of the Agreement is hereby amended by
adding the following paragraph thereto:
"(e) Fairfield Funding Corporation has provided Nominee
with a copy of an assignment transferring all beneficial
interest in the 1993-A Trust Intervals previously held by
FAC (and the related Sales Contracts) to the 1993-A Trustee.
FAC, as servicer under the 1993-A Pledge Agreement, or the
1993-A Trustee shall provide Nominee with copies of any
future assignments of beneficial interest in the 1993-A
Trust Intervals, which assignments shall be in the form of a
certificate and shall identify the 1993-A Trust Intervals
and related Sales Contracts assigned thereby. Any
assignment submitted to Nominee by FAC shall be accompanied
by an approval, in writing, of the 1993-A Trustee. Nominee
shall be entitled to rely upon such certificates in
determining beneficial ownership of the 1993-A Trust
Intervals."
4. The first two paragraphs of Section 12 of the
Agreement are hereby amended to read as follows:
"12. Default Under Loan Agreements. In the event of
------------------------------
default of Fairfield or FAC under any of the Loan
Agreements, the related Bank shall notify the Nominee in
writing of such event at such time as notice of such default
is given to FCI or FAC, as the case may be, which writing
shall identify those Properties giving rise to Sales
Contracts relating to the defaulted Loan Agreement and may
further instruct Nominee that with respect to those
Properties that Nominee shall act only upon the written
instructions of the related Bank whereupon Nominee shall
only take action with respect to the related Properties
identified in the notice, notwithstanding instructions of
FCI or FAC to the contrary, as directed by the related Bank.
The receipt of any notice of default shall relate only
to the specific Loan Agreement, and as to all other Loan
Agreements, Nominee shall continue to act upon the written
request of Fairfield, FAC, Bank of Boston, Agent Bank, the
1992 Purchaser or the 1993-A Trustee, as the case may be, as
to the Properties relating thereto."
5. Section 13 of the Agreement is hereby amended by
adding the following paragraph thereto:
"Notwithstanding anything herein to the contrary and
specifically notwithstanding the provisions of Section 3(a)
hereof, the interest in the Properties related to the 1993-A
Trust Intervals granted to the 1993-A Trustee by this
Agreement and the 1993-A Pledge Agreement are hereby deemed
superior and senior to any and all interests granted
pursuant to the Mortgages listed in Schedule B hereto. The
parties hereto acknowledge that Nominee holds title to the
1993-A Trust Intervals for the benefit of the purchasers of
the 1993-A Trust Intervals and the 1993-A Trustee, subject
only to the terms and conditions of the related Sales
Contracts and the 1993-A Pledge Agreement, respectively."
4. Section 15(b) of the Agreement is hereby amended
to read as follows:
"(b) This Agreement may also be amended for the purpose
of identifying and segregating a separate pool of Sales
Contracts and the Intervals relating thereto, which are to
be sold or pledged pursuant to a pooling, sale or pledge
agreement, by an instrument in writing signed by FCI, FMB,
FAC, Nominee and The First National Bank of Boston, both
individually and as Agent Bank. Any amendment undertaken
pursuant to this paragraph 15(b) shall not relate to
Intervals listed on Schedule C or D attached hereto, nor
shall it in any way impair or amend the rights of the 1992
Purchaser or the 1993-A Trustee under this Agreement. An
executed copy of any Amendment undertaken pursuant to this
paragraph 15(b) shall be provided to all parties to this
Agreement."
5. Section 16 of the Agreement is hereby amended by
adding the following addresses thereto:
First Commercial Trust Company, N.A.
-----------------------------------
Holly McGaughy Counsel:
First Commercial Trust Company, Heartsill Ragon, III
National Association Gill, Fleming & Elrod
First Comm. Building, 7th Fl. 425 W. Capitol Avenue
Little Rock, Arkansas 72201 Little Rock, Arkansas 72201
(501) 371-6702 (501) 376-3800
Telecopy: (501) 371-6610 Telecopy: (501) 372-
3359
6. The Agreement is hereby amended to add as Schedule D
thereto those Sales Contracts described on Exhibit A to this
Amendment.
7. All provisions of the Agreement remain in full
force and effect.
8. An executed copy of this Amendment shall be
provided to all parties to the Agreement.
9. This Amendment shall be construed in accordance
with and governed by the laws of the State of Arkansas. In
the event that any clause or provision of this Amendment is
declared to be invalid, the invalidity of any such clause or
provision shall not affect the remaining clauses and
provisions of this Amendment which shall remain in full
force and effect.
9. This Amendment may be executed in one or more
counterparts, all of which shall constitute one and the same
instrument.
DATED as of the date first above written.
FAIRFIELD COMMUNITIES, INC.
/s/Kim Thompson By:/s/ Robert W. Howeth
- ------------------------- -------------------------------
Witness Title: Senior Vice President
----------------------------
FAIRFIELD MYRTLE BEACH, INC.
/s/Kim Thompson By:/s/ Robert W. Howeth
- ------------------------ -------------------------------
Witness Title: Vice President
----------------------------
FAIRFIELD ACCEPTANCE CORPORATION
/s/Kim Thompson By:/s/Robert W. Howeth
- ------------------------- --------------------------------
Witness Title: President
-----------------------------
LAWYERS TITLE INSURANCE CORPORATION
By:/s/ Michael E. Hastings
- ------------------------- -------------------------------
Witness Title:National Division Manager
----------------------------
THE FIRST NATIONAL BANK OF BOSTON
By:/s/ Robert I. Allen
- ------------------------- -------------------------------
Witness Title: Vice President
----------------------------
THE FIRST NATIONAL BANK OF BOSTON,
as agent for a group of lenders
By:/s/ Robert I. Allen
- ------------------------ ------------------------------
Witness Title: Vice President
---------------------------
FIRST COMMERCIAL TRUST COMPANY, N.A.,
AS 1993-A TRUSTEE
/s/Debbie DeHau By:/s/Bonnie McKenzie
- ------------------------ -----------------------------
Witness Title: Trust Operations Manager
--------------------------
EXHIBIT A
SCHEDULE D
----------
1993-A TRUST INTERVALS
[Information Omitted]
SECOND AMENDMENT TO
WESTWINDS THIRD AMENDED AND RESTATED
TITLE CLEARING AGREEMENT
(LAWYERS)
This Amendment is made and entered into as of March 28, 1995,
by and among Fairfield Communities, Inc., a Delaware corporation
(referred to herein as "FCI"); Fairfield Myrtle Beach, Inc., a South
Carolina corporation and wholly-owned subsidiary of FCI (referred to
herein as "FMB"); Fairfield Acceptance Corporation, a Delaware
corporation and wholly-owned subsidiary of FCI (referred to herein as
"FAC"); Lawyers Title Insurance Company, a Virginia corporation
(referred to herein as "Nominee"); The First National Bank of Boston,
Boston, Massachusetts (collectively referred to herein together with
all past, present and future participants as "Bank of Boston"), as
agent and lender to Fairfield pursuant to the FCI Boston Loan
Agreement (as hereinafter defined); The First National Bank of
Boston, Boston, Massachusetts, as agent and lender to FAC (referred
to herein as "Agent Bank") pursuant to the FAC Boston Loan Agreement
(as hereinafter defined); and Capital Markets Assurance Corporation,
a New York stock insurance company, as collateral agent (referred to
herein as "1995 Collateral Agent"), pursuant to the 1995 Credit
Agreement (as hereinafter defined). This Amendment amends that
certain Westwinds Third Amended and Restated Title Clearing Agreement
dated as of November 15, 1992, as previously amended (the
"Agreement"). Unless otherwise defined herein, all capitalized terms
shall have the meanings ascribed in the Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to Section 15(b) of the Agreement, FCI, FMB,
FAC, Nominee, Bank of Boston and Agent Bank can amend the Agreement
to identify and segregate a separate pool of Sales Contracts and the
Intervals relating thereto, which are to be sold or pledged pursuant
to a pooling, pledge or sale agreement; and
WHEREAS, FAC has sold certain Sales Contracts to Fairfield
Capital Corporation, a Delaware corporation (referred to herein as
"FCC") pursuant to a Receivables Purchase Agreement, dated as of
March 28, 1995 (the "1995 Purchase Agreement"), which Sales Contracts
have in turn been pledged by FCC to the 1995 Collateral Agent for the
benefit Triple-A One Funding Corporation, a Delaware corporation
(referred to herein as "Triple-A"), pursuant to the 1995 Credit
Agreement; and
WHEREAS, The First National Bank of Boston, both individually
and as Agent Bank, has released its lien upon and its interest in the
Sales Contracts and the underlying Intervals pledged to the 1995
Collateral Agent; and
WHEREAS, the parties hereto wish to amend the Agreement in
order to identify and segregate those Sales Contracts and the related
Intervals pledged to the 1995 Collateral Agent;
NOW THEREFORE, in consideration of the mutual promises and
covenants set forth herein, the parties hereto agree as follows:
1. Section 1 of the Agreement is hereby amended by adding
thereto the following definitions (and by striking any definitions
which are supplanted by the definitions set forth below):
Bank means, as appropriate, The First National Bank of Boston,
----
as lender pursuant to the FCI Boston Loan Agreement, the Agent Bank,
as lender pursuant to the FAC Boston Loan Agreement, the 1992
Purchaser, the 1993-A Trustee or the 1995 Collateral Agent, as
applicable.
1995 Collateral Agent means Capital Markets Assurance
------------------------
Corporation, a New York stock insurance company, as collateral agent
for the benefit of itself and Triple-A pursuant to the 1995 Credit
Agreement.
1995 Credit Agreement means that certain Credit Agreement dated
---------------------
as of March 28, 1995, by and among FAC, as servicer, FCI, FCC, as
borrower, the 1995 Collateral Agent, as collateral agent, and Triple-
A, relating to loans to be made by Triple-A to FCC.
FAC means, as appropriate, Fairfield Acceptance Corporation,
---
individually or in its capacity as servicer under the 1993-A Pledge
Agreement or the 1995 Credit Agreement.
FAC Boston Loan Agreement means the Third Amended and Restated
-------------------------
Revolving Credit Agreement dated September 28, 1993, as amended, by
and between FAC and Agent Bank.
FCC means Fairfield Capital Corporation, a Delaware
---
corporation.
FCI Boston Loan Agreement means the Amended and Restated
----------------------------
Revolving Credit Agreement dated September 28, 1993, as amended, by
and between FCI, FMB and The First National Bank of Boston and its
past, present and future participants.
1995 Intervals means those Intervals which give rise to certain
--------------
Sales Contracts pledged, assigned and transferred to the 1995
Collateral Agent pursuant to the 1995 Credit Agreement. The 1995
Intervals are listed on Schedule E attached to this Agreement and
made a part hereof, as amended from time to time.
Loan Agreement means, as appropriate, (i) the FCI Boston Loan
--------------
Agreement, (ii) the FAC Boston Loan Agreement, (iii) the 1992 Sale
Agreement, (iv) the 1993-A Pledge Agreement, or (v) the 1995 Credit
Agreement. The use of the defined term "Loan Agreement" herein to
identify one of the various pooling, pledge or sale agreements is for
convenience only and shall not be construed to characterize the
assignment or transfer of the related Intervals and Sales Contracts
as loan transactions.
Operating Agreement means the Third Amended and Restated
--------------------
Operating Agreement dated as of December 9, 1994, between FCI and
FAC, as amended.
Triple-A means Triple-A One Funding Corporation, a Delaware
--------
corporation.
2. The third sentence of Section 2 of the Agreement is
hereby amended to read as follows:
"Except for those Properties in which the beneficial
interest has been transferred or pledged to the 1992 Purchaser,
the 1993-A Trustee or the 1995 Collateral Agent, the beneficial
interest in all the Properties underlying the Sales Contracts
conveyed to Nominee pursuant to this Agreement shall originally
be in Fairfield, and at such time as the Sales Contracts are
transferred to FAC pursuant to the Operating Agreement, the
beneficial interest in the Properties underlying those Sales
Contracts transferred to FAC shall pass to FAC with the
transference of said Sales Contracts."
3. Subsection 3(b) of the Agreement is hereby amended to
read as follows:
"(b) Nominee's function and responsibility during the
existence of this Agreement will be to (i) hold record title to
the Properties for the benefit of the other parties hereto, FFC
and FCC, (ii) convey title as directed upon the written request
of Fairfield or FAC, as applicable, as the beneficial owner at
such time, and, if applicable, as servicer under the 1993-A
Pledge Agreement or the 1995 Credit Agreement, except as
provided by Section 12 hereof; (iii) contemporaneously with the
conveyance of any of the Properties that qualify for deeding in
accordance with the terms of the Sales Contracts, pursuant to
authorization from the related Bank as set forth herein, cause
with respect to such Properties such Bank's underlying
Mortgage, if any, to be released of record; (iv) where
requested by FCI or a Purchaser, as the case may be, cause to
be issued a title insurance policy to the Purchaser provided
all title requirements are properly met and the appropriate
premium has been paid; and (v) execute such instruments as
required to be executed pursuant to Section 11 hereof. Nominee
may authorize any third party, including any employee of FAC or
FCI, by power of attorney, to execute any instrument required
by this Section 3(b)."
4. The second sentence of Subsection 4(c) of the Agreement
is hereby amended to read as follows:
"Such assignments shall take the form of a 'Document of
Sale and Assignment of Beneficial Interest' or a 'Document of
Pledge and Assignment of Beneficial Interest,' which shall
identify those Sales Contracts and the underlying Properties
giving rise to such Sales Contracts. Nominee shall be entitled
to rely upon such "Documents of Sale and Assignment of
Beneficial Interest" and "Documents of Pledge and Assignment of
Beneficial Interest" in determining beneficial ownership of and
security interests in the Properties."
5. Section 4 of the Agreement is hereby amended by adding
the following paragraph thereto:
"(f) FCC has provided Nominee with copies of assignments
evidencing (i) the transfer of beneficial interest in the 1995
Intervals and the related Sales Contracts from FAC to FCC
pursuant to the 1995 Purchase Agreement and (ii) the pledge and
assignment of such assets and interests from FCC to the 1995
Collateral Agent pursuant to the 1995 Credit Agreement. FAC,
as servicer under the 1995 Credit Agreement, or the 1995
Collateral Agent shall provide Nominee with copies of any
future assignments of beneficial interest in the 1995
Intervals, which assignments shall be in the form of a
certificate and shall identify the 1995 Intervals and related
Sales Contracts assigned thereby. To be effective, any such
assignment submitted to Nominee by FAC shall be accompanied by
an approval, in writing, of the 1995 Collateral Agent. Nominee
shall be entitled to rely upon such certificates in determining
beneficial ownership of the 1995 Intervals."
6. Subsection 5(c) of the Agreement is hereby amended to
read as follows:
"(c) All payments made by Purchasers pursuant to the
terms of their Sales Contract shall be made directly to FCI,
FAC, the 1992 Purchaser or FCC, as the case may be, for the
benefit of the relevant Bank, if any, pursuant to the terms of
the related Loan Agreement. No payments are to be received by
Nominee."
7. Section 6 of the Agreement is hereby amended to read as
follows:
"6. Default by Purchaser. Where Purchaser has recorded
--------------------
his/her Sales Contract and Purchaser defaults and otherwise
refuses to reconvey legal or equitable title to Nominee,
Nominee shall assign the recorded Sales Contract to FCI or FAC
(as applicable, as the beneficial owners of such recorded Sales
Contract, or, if applicable, as servicer under the 1993-A
Pledge Agreement or the 1995 Credit Agreement) for foreclosure
or other appropriate action. Subject to the provisions of
Section 12 hereof, Nominee may rely on the written request of
FCI or FAC, as applicable, in regard to the assignment of said
recorded Sales Contracts."
8. The second sentence of Section 10 of the Agreement is
hereby amended to read as follows:
"Each Bank shall indemnify and hold harmless Nominee from
any and all claims, demands, actions or causes of action,
including all costs and expenses of any nature that Nominee may
incur in connection therewith, which relate to or arise out of
any action or failure to act of the Nominee, which action or
inaction was in good faith pursuant to and in reliance upon
written instructions from such Bank to the Nominee."
9. The first paragraph of Section 12 of the Agreement is
hereby amended to read as follows:
"In the event of default of Fairfield, FAC, FFC or FCC
under any of the Loan Agreements, the related Bank shall notify
Nominee in writing of such event at such time as notice of such
default is given to Fairfield, FAC, FFC or FCC, as the case may
be, which writing shall identify those Properties giving rise
to Sales Contracts related to the defaulted Loan Agreement and
may further instruct Nominee that, with respect to such
Properties, Nominee shall act only upon the written
instructions of the related Bank and any prior lienholder with
respect to such Properties and the related Sales Contracts,
whereupon Nominee shall only take action with respect to the
Properties identified in the notice, notwithstanding
instructions of FCI, FAC, FFC or FCC to the contrary, as
directed by the related Bank and any prior lienholder."
10. The second paragraph of Section 12 of the Agreement is
hereby amended to read as follows:
"The receipt of any notice of default shall relate only
to the specific Loan Agreement identified therein. As to all
other Loan Agreements, Nominee shall continue to act upon the
written request of Fairfield, FAC, Bank of Boston, Agent Bank,
the 1992 Purchaser, the 1993-A Trustee or the 1995 Collateral
Agent, as the case may be, as to the Properties relating
thereto."
11. Section 13 of the Agreement is hereby amended by adding
the following paragraph thereto:
"Notwithstanding anything herein to the contrary and
specifically notwithstanding the provisions of Section 3(a)
hereof, the interest in Properties related to the 1995
Intervals granted to the 1995 Collateral Agent by this
Agreement and the 1995 Credit Agreement are hereby deemed
superior and senior to any and all interests granted pursuant
to the Mortgages listed in Schedule B hereto. The parties
hereto acknowledge that Nominee holds title to the 1995
Intervals for the benefit of the purchasers of the 1995
Intervals and the 1995 Collateral Agent, subject only to the
terms and conditions of the related Sales Contracts and the
1995 Credit Agreement, respectively. The Nominee shall not
transfer, pledge or assign the 1995 Intervals except as
expressly provided herein."
12. Section 14(c) of the Agreement is hereby amended to read
as follows:
"(c) No party may make an assignment of its interest in
this Agreement without obtaining the written consent of the
other parties hereto; provided, however, that to the extent
permitted by the 1995 Credit Agreement, the 1995 Collateral
Agent may be replaced or succeeded as a party to this Agreement
without the consent of the other parties hereto. The parties
further agree to execute additional documents as may be
necessary to carry out the purposes of this Agreement and
protect the interests of all parties hereto."
13. Section 15(b) of the Agreement is hereby amended to read
as follows:
"(b) This Agreement may also be amended solely for the purpose
of identifying and segregating a separate pool of Sales Contracts,
and the Intervals relating thereto, which are to be sold or pledged
pursuant to a pooling, sale or pledge agreement, by an instrument in
writing signed by FCI, FMB, FAC, Nominee and The First National Bank
of Boston, both individually and as Agent Bank. Any amendment
undertaken pursuant to this paragraph 15(b) shall not relate to or
affect Intervals listed on Schedules C, D or E attached hereto, nor
shall it in any way impair or amend the rights of the 1992 Purchaser,
the 1993-A Trustee or the 1995 Collateral Agent under this Agreement.
An executed copy of any Amendment undertaken pursuant to this
paragraph 15(b) shall be provided to all parties to this Agreement."
14. The third sentence of Section 15(c) of the Agreement is
hereby amended to read as follows:
"Upon termination, title to the Properties shall be
conveyed by Nominee in accordance with the written instructions
of FCI, FAC, the 1993-A Trustee or the 1995 Collateral Agent,
as the case may be, as the beneficial owner or the assignee of
the beneficial ownership of such Properties at such time;
except, however, if Nominee has been notified by a Bank in
writing that a default has occurred under a Loan Agreement, as
described more fully in Section 12 of this Agreement, Nominee
shall convey title to the Properties underlying the defaulted
Loan Agreement in accordance with the written instructions of
the related Bank and first lienholder with respect thereto."
15. Section 16 of the Agreement is hereby amended by adding
thereto the following addresses (and by striking any addresses which
are supplanted by the addresses set forth below):
The First National Bank of Boston
---------------------------------
Counsel:
Linda J. Carter Marcia Robinson
The First National Bank of Boston Bingham, Dana & Gould
115 Perimeter Center Place, N.E. 150 Federal Street
Suite 500 Boston, Massachusetts 02106
Atlanta, Georgia 30346 (617) 951-8535
(404) 393-4676 Telecopy: (617) 951-8736
Telecopy: (404) 391-9811
First Commercial Trust Company, N.A.
------------------------------------
Counsel:
Bonnie McKenzie Heartsill Ragon, III
First Commercial Trust Company, Gill Law Firm
National Association 425 West Capitol
Capitol and Broadway Streets Little Rock, Arkansas 72201
First Commercial Building, (501) 376-3800
7th Floor Telecopy: (501) 372-3359
Little Rock, Arkansas 72201
(501) 371-6702
Telecopy: (501) 371-6610
Capital Markets Assurance Corporation
-------------------------------------
885 Third Avenue, 14th Floor Counsel:
New York, NY 10022 Skip Stern, Esq.
Attn: Head of Exposure Sidley & Austin
Management One First National Plaza
(212) 891-8806 45th Floor
Telecopy: (212) 755-5462 Chicago, IL 60603
(312) 853-7267
Telecopy: (312) 853-7036
16. The Agreement is hereby amended to add as Schedule E
thereto the 1995 Intervals described on Exhibit A to this Amendment.
17. All provisions of the Agreement remain in full force and
effect.
18. An executed copy of this Amendment shall be provided to
all parties to the Agreement.
19. This Amendment shall be construed in accordance with and
governed by the laws of the State of Arkansas. In the event that any
clause or provision of this Amendment is declared to be invalid, the
invalidity of any such clause or provision shall not affect the
remaining clauses and provisions of this Amendment which shall remain
in full force and effect.
20. This Amendment may be executed in one or more
counterparts, all of which shall constitute one and the same
instrument.
[THIS SPACE LEFT BLANK INTENTIONALLY]
DATED as of the date first above written.
FAIRFIELD COMMUNITIES, INC.;
FAIRFIELD MYRTLE BEACH, INC.
/s/ Kim Thompson BY: /s/Robert W. Howeth
-------------------------- -----------------------------
Witness TITLE: Senior Vice President
FAIRFIELD ACCEPTANCE CORPORATION
/s/ Les R. Baldege BY:/s/ Robert W. Howeth
-------------------------- -----------------------------
Witness TITLE: President
LAWYERS TITLE INSURANCE CORPORATION
/s/M.E. Hastings BY: /s/ Randall E. Cox
---------------------------- ---------------------------
Witness TITLE: Senior Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender under the FCI
Boston Loan Agreement
/s/John Fletcher BY: /s/Linda J. Carter
---------------------------- ----------------------------
Witness TITLE: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender under the FAC
Boston Loan Agreement
/s/John Fletcher BY: /s/ Linda J. Carter
---------------------------- -----------------------------
Witness TITLE:Vice President
CAPITAL MARKETS ASSURANCE CORPORATION
as 1995 Collateral Agent
/s/John Fletcher BY:/s/Eric Rosensweig
---------------------------- ------------------------------
Witness TITLE: Vice President
EXHIBIT A
SCHEDULE E
----------
1995 INTERVALS
[Information Omitted]
THIRD AMENDMENT TO
WESTWINDS THIRD AMENDED AND RESTATED
TITLE CLEARING AGREEMENT
(LAWYERS)
This Amendment is made and entered into as of July 31,
1996, by and among Fairfield Communities, Inc., a Delaware
corporation (referred to herein as "FCI"); Fairfield Myrtle
Beach, Inc., a South Carolina corporation and wholly-owned
subsidiary of FCI (referred to herein as "FMB"); Fairfield
Acceptance Corporation, a Delaware corporation and
wholly-owned subsidiary of FCI (referred to herein as
"FAC"); Lawyers Title Insurance Company, a Virginia
corporation (referred to herein as "Nominee"); The First
National Bank of Boston, Boston, Massachusetts (referred to
herein as "Bank of Boston"), as agent and lender to
Fairfield pursuant to the FCI Boston Loan Agreement (as
hereinafter defined); The First National Bank of Boston,
Boston, Massachusetts, as agent and lender to FAC (referred
to herein as "Agent Bank") pursuant to the FAC Boston Loan
Agreement (as hereinafter defined); and Capital Markets
Assurance Corporation, a New York stock insurance company,
as collateral agent (referred to herein as "Triple-A
Collateral Agent"), pursuant to the Triple-A Credit
Agreement (as hereinafter defined). This Amendment amends
that certain Westwinds Third Amended and Restated Title
Clearing Agreement dated as of November 15, 1992, as
previously amended (the "Agreement"). Unless otherwise
defined herein, all capitalized terms shall have the
meanings ascribed in the Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to Section 15(b) of the Agreement,
FCI, FMB, FAC, Nominee, Bank of Boston and the Agent Bank
can amend the Agreement to identify and segregate a separate
pool of Sales Contracts and the Intervals relating thereto,
which are to be sold or pledged pursuant to a pooling,
pledge or sale agreement; and
WHEREAS, FAC has sold certain Sales Contracts to
Fairfield Capital Corporation, a Delaware corporation
(referred to herein as "FCC") pursuant to an Amended and
Restated Receivables Purchase Agreement, dated as of July
31, 1996 (the "Triple-A Purchase Agreement"), which Sales
Contracts have in turn been pledged by FCC to the Triple-A
Collateral Agent for the benefit Triple-A One Funding
Corporation, a Delaware corporation (referred to herein as
"Triple-A"), pursuant to the Triple-A Credit Agreement; and
WHEREAS, Bank of Boston and the Agent Bank have
released or will have released their lien upon and its
interest in the Sales Contracts and the underlying Intervals
as a prior condition to their being pledged to the Triple-A
Collateral Agent; and
WHEREAS, the parties hereto wish to amend the Agreement
in order to identify and segregate those Sales Contracts and
the related Intervals pledged to the Triple-A Collateral
Agent;
NOW THEREFORE, in consideration of the mutual promises
and covenants set forth herein, the parties hereto agree as
follows:
1. Section 1 of the Agreement is hereby amended by
adding thereto the following definitions (and by striking
any definitions which are supplanted by the definitions set
forth below):
Bank means, as appropriate, Bank of Boston, the Agent
----
Bank, the 1992 Purchaser, the 1993-A Trustee or the Triple-A
Collateral Agent, as applicable.
FAC means, as appropriate, Fairfield Acceptance
---
Corporation, individually or in its capacity as servicer
under the 1993-A Pledge Agreement or the Triple-A Credit
Agreement.
FAC Boston Loan Agreement means the Third Amended and
--------------------------
Restated Revolving Credit Agreement, dated as of September
28, 1993, between FAC, Bank of Boston and the Agent Bank, as
amended pursuant to the First Amendment to Third Amended and
Restated Revolving Credit Agreement, dated as of December 9,
1994, between FAC and Agent Bank, and as further amended by
the Second Amendment to Third Amended and Restated Revolving
Credit Agreement, dated as of December 19, 1994, between
FAC, Bank of Boston and the Agent Bank, as amended and in
effect from time to time.
FCC means Fairfield Capital Corporation, a Delaware
---
corporation.
FCI Boston Loan Agreement means the Amended and
----------------------------
Restated Revolving Credit Agreement, dated as of September
28, 1993, among FCI, Fairfield Myrtle Beach, Inc., Suntree
Development Company, St. Andrews Management, Inc., Fairfield
Suntree Realty, Inc., and Bank of Boston, as amended
pursuant to the First Amendment to Amended and Restated
Revolving Credit Agreement, dated as of May 13, 1994, as
further amended by Consent Waiver and Agreement, dated as of
September 23, 1994, as further amended by Second Amendment
to Amended and Restated Revolving Credit Agreement, dated as
of December 9, 1994, as further amended by Third Amendment
to Amended and Restated Revolving Credit Agreement, dated as
of December 19, 1994, as further amended by Fourth Amendment
To Amended and Restated Revolving Credit Agreement, dated as
of November 20, 1995, and as further amended by Fifth
Amendment to Amended and Restated Revolving Credit
Agreement, dated as of January 25, 1996, among FCI,
Fairfield Myrtle Beach, Inc., and Bank of Boston, as amended
and in effect from time to time.
L/C Bank means The First National Bank of Boston, as
--------
L/C Bank under the Triple-A Credit Agreement.
Loan Agreement means, as appropriate, (i) the FCI
---------------
Boston Loan Agreement, (ii) the FAC Boston Loan Agreement,
(iii) the 1992 Sale Agreement, (iv) the 1993-A Pledge
Agreement, or (v) the Triple-A Credit Agreement. The use of
the defined term "Loan Agreement" herein to identify one of
the various pooling, pledge or sale agreements is for
convenience only and shall not be construed to characterize
the assignment or transfer of the related Intervals and
Sales Contracts as loan transactions.
Operating Agreement means the Third Amended and
--------------------
Restated Operating Agreement dated as of December 9, 1994,
between FCI and FAC, as amended.
Triple-A means Triple-A One Funding Corporation, a
--------
Delaware corporation.
Triple-A Collateral Agent means Capital Markets
-----------------------------
Assurance Corporation, a New York stock insurance company,
as collateral agent for the benefit of itself, Triple-A and
L/C Bank pursuant to the Triple-A Credit Agreement.
Triple-A Credit Agreement means that certain Amended
--------------------------
and Restated Credit Agreement dated as of July 31, 1996, by
and among FAC, as servicer, FCI, FCC, as borrower, the
Triple-A Collateral Agent, L/C Bank and Triple-A relating to
loans to be made by Triple-A to FCC.
Triple-A Intervals means those Intervals which give
-------------------
rise to certain Sales Contracts pledged, assigned and
transferred to the Triple-A Collateral Agent pursuant to the
Triple-A Credit Agreement. The Triple-A Intervals are
listed on Schedule E attached to this Agreement and made a
part hereof, as amended from time to time.
2. The third sentence of Section 2 of the Agreement
is hereby amended to read as follows:
"Except for those Properties for which the
beneficial interest has been transferred to the 1992
Purchase or transferred to FFC or FCC and subsequently
pledged to the 1993-A Trustee or the Triple-A
Collateral Agent, respectively, the beneficial interest
in all the Properties underlying the Sales Contracts
conveyed to Nominee pursuant to this Agreement shall
originally be in Fairfield, and at such time as the
Sales Contracts are transferred to FAC pursuant to the
Operating Agreement, the beneficial interest in the
Properties underlying those Sales Contracts transferred
to FAC shall pass to FAC with the transference of said
Sales Contracts."
3. Subsection 3(b) of the Agreement is hereby amended
to read as follows:
"(b) Nominee's function and responsibility during
the existence of this Agreement will be to (i) hold
record title to the Properties for the benefit of the
other parties hereto, FFC and FCC, (ii) convey title
as directed upon the written request of Fairfield or
FAC, as applicable, as the beneficial owner at such
time, and, if applicable, as servicer under the 1993-A
Pledge Agreement or the Triple-A Credit Agreement,
except as provided by Section 12 hereof; (iii)
contemporaneously with the conveyance of any of the
Properties that qualify for deeding in accordance with
the terms of the Sales Contracts, pursuant to
authorization from the related Bank as set forth
herein, cause with respect to such Properties such
Bank's underlying Mortgage, if any, to be released of
record; (iv) where requested by FCI or a Purchaser, as
the case may be, cause to be issued a title insurance
policy to the Purchaser provided all title requirements
are properly met and the appropriate premium has been
paid; and (v) execute such instruments as required to
be executed pursuant to Section 11 hereof. Nominee may
authorize any third party, including any employee of
FAC or FCI, by power of attorney, to execute any
instrument required by this Section 3(b)."
4. The second sentence of Subsection 4(c) of the
Agreement is hereby amended to read as follows:
"Such assignments shall take the form of a
'Document of Sale and Assignment of Beneficial
Interest' or a 'Document of Pledge and Assignment of
Beneficial Interest,' which shall identify those Sales
Contracts and the underlying Properties giving rise to
such Sales Contracts. Nominee shall be entitled to
rely upon such "Documents of Sale and Assignment of
Beneficial Interest" and "Documents of Pledge and
Assignment of Beneficial Interest" in determining
beneficial ownership of and security interests in the
Properties."
5. Section 4 of the Agreement is hereby amended by
adding the following paragraph thereto:
"(f) FCC has provided to Nominee on the Closing
Date and Effective Restatement Date (as such terms are
defined in the Triple-A Credit Agreement), and FCC will
provide to Nominee on Contract Grant Dates (as defined
in the Triple-A Credit Agreement), if any, occurring
after the Effective Restatement Date, copies of
releases and assignments evidencing (i) Bank of
Boston's and the Agent Bank's release of their lien
upon and their interest in the Triple-A Intervals and
the related Sales Contracts, (ii) the transfer of
beneficial interest in the Triple-A Intervals and the
related Sales Contracts from FAC to FCC pursuant to the
Triple-A Purchase Agreement and (iii) the pledge and
assignment of the Triple-A Intervals and related Sales
Contracts from FCC to the Triple-A Collateral Agent
pursuant to the Triple-A Credit Agreement. Upon
receipt by the Nominee of any such future releases and
assignments, Schedule E shall automatically be deemed
to be updated to include the Triple-A Intervals covered
by such releases and assignments, and Nominee shall be
entitled to rely upon such releases and assignments in
determining beneficial ownership of the Triple-A
Intervals covered thereby.
FAC, as servicer under the Triple-A Credit
Agreement, or the Triple-A Collateral Agent shall
provide Nominee with copies of any future
assignments from Triple-A Collateral Agent to FCC,
FAC or FCI, as applicable, of beneficial interest
in the Triple-A Intervals, which assignments shall
be in the form of a certificate and shall identify
the Triple-A Intervals and related Sales Contracts
assigned thereby. To be effective, any such
assignment submitted to Nominee by FAC shall be
accompanied by an approval, in writing, of the
Triple-A Collateral Agent. Upon receipt by the
Nominee of any such certificates, (i) Schedule E
shall automatically be deemed to be updated to
exclude the Triple-A Intervals covered by such
certificates, (ii) Nominee shall be entitled to
rely upon such certificates in determining
beneficial ownership of the Triple-A Intervals
covered by such certificates and (iii) the
beneficial ownership of the Triple-A Intervals
covered by such certificates shall be presumed to
be in FCI or FAC, as applicable, and subject to
the lien of Bank of Boston and the Agent Bank
under the Mortgages on Schedule B."
6. Subsection 5(c) of the Agreement is hereby amended
to read as follows:
"(c) All payments made by Purchasers pursuant to
the terms of their Sales Contract shall be made
directly to FCI, FAC, the 1992 Purchaser or FCC, as the
case may be, for the benefit of the relevant Bank, if
any, pursuant to the terms of the related Loan
Agreement. No payments are to be received by Nominee."
7. Section 6 of the Agreement is hereby amended to
read as follows:
"6. Default by Purchaser. Where Purchaser has
----------------------
recorded his/her Sales Contract and Purchaser defaults
and otherwise refuses to reconvey legal or equitable
title to Nominee, Nominee shall assign the recorded
Sales Contract to FCI or FAC (as applicable, as the
beneficial owners of such recorded Sales Contract, or,
if applicable, as servicer under the 1993-A Pledge
Agreement or the Triple-A Credit Agreement) for
foreclosure or other appropriate action. Subject to
the provisions of Section 12 hereof, Nominee may rely
on the written request of FCI or FAC, as applicable, in
regard to the assignment of said recorded Sales
Contracts."
8. The second sentence of Section 10 of the Agreement
is hereby amended to read as follows:
"Each Bank shall indemnify and hold harmless
Nominee from any and all claims, demands, actions or
causes of action, including all costs and expenses of
any nature that Nominee may incur in connection
therewith, which relate to or arise out of any action
or failure to act of the Nominee, which action or
inaction was in good faith pursuant to and in reliance
upon written instructions from such Bank to the
Nominee."
9. The first paragraph of Section 12 of the Agreement
is hereby amended to read as follows:
"In the event of default of Fairfield, FAC, FFC or
FCC under any of the Loan Agreements, the related Bank
shall notify Nominee in writing of such event at such
time as notice of such default is given to Fairfield,
FAC, FFC or FCC, as the case may be, which writing
shall identify those Properties giving rise to Sales
Contracts related to the defaulted Loan Agreement and
may further instruct Nominee that, with respect to such
Properties, Nominee shall act only upon the written
instructions of the related Bank and any prior
lienholder with respect to such Properties and the
related Sales Contracts, whereupon Nominee shall only
take action with respect to the Properties identified
in the notice, notwithstanding instructions of FCI,
FAC, FFC or FCC to the contrary, as directed by the
related Bank and any prior lienholder."
10. The second paragraph of Section 12 of the
Agreement is hereby amended to read as follows:
"The receipt of any notice of default shall relate
only to the specific Loan Agreement identified therein.
As to all other Loan Agreements, Nominee shall continue
to act upon the written request of Fairfield, FAC, Bank
of Boston, the Agent Bank, the 1992 Purchaser, the
1993-A Trustee or the Triple-A Collateral Agent, as the
case may be, as to the Properties relating thereto."
11. Section 13 of the Agreement is hereby amended by
adding the following paragraph thereto:
"Notwithstanding anything herein to the contrary
and specifically notwithstanding the provisions of
Section 3(a) hereof, the interest in Properties related
to the Triple-A Intervals granted to the Triple-A
Collateral Agent by this Agreement and the Triple-A
Credit Agreement are hereby deemed superior and senior
to any and all interests granted pursuant to the
Mortgages listed in Schedule B hereto. The parties
hereto acknowledge that Nominee holds title to the
Triple-A Intervals for the benefit of the purchasers of
the Triple-A Intervals and the Triple-A Collateral
Agent, subject only to the terms and conditions of the
related Sales Contracts and the Triple-A Credit
Agreement, respectively. The Nominee shall not
transfer, pledge or assign the Triple-A Intervals
except as expressly provided herein. The provisions of
this paragraph, however, shall not apply to any Triple-
A Intervals that may be granted the Triple-A Collateral
Agent by this Agreement and the Triple-A Credit
Agreement on Contract Grant Dates (as defined in the
Triple-A Credit Agreement), if any, occurring after the
Effective Restatement Date (as defined in the Triple-A
Credit Agreement), until releases and assignments
covering such Property have been delivered to the
Nominee in accordance with the requirements of Section
4(f) hereof."
12. Section 14(c) of the Agreement is hereby amended
to read as follows:
"(c) No party may make an assignment of its
interest in this Agreement without obtaining the
written consent of the other parties hereto; provided,
however, that to the extent permitted by the FCI Boston
and FAC Boston Loan Agreements and the Triple-A Credit
Agreement, respectively, Bank of Boston, the Agent
Bank, and the Triple-A Collateral Agent may be replaced
or succeeded as a party to this Agreement without the
consent of the other parties hereto. The parties
further agree to execute additional documents as may be
necessary to carry out the purposes of this Agreement
and protect the interests of all parties hereto."
13. Section 15(b) of the Agreement is hereby amended
to read as follows:
"(b) This Agreement may also be amended solely for the
purpose of identifying and segregating a separate pool of
Sales Contracts, and the Intervals relating thereto, which
are to be sold or pledged pursuant to a pooling, sale or
pledge agreement, by an instrument in writing signed by FCI,
FMB, FAC, Nominee, Bank of Boston and the Agent Bank. Any
amendment undertaken pursuant to this paragraph 15(b) shall
not relate to or affect Intervals listed on Schedules C, D
or E attached hereto, nor shall it in any way impair or
amend the rights of the 1992 Purchaser, the 1993-A Trustee
or the Triple-A Collateral Agent under this Agreement. An
executed copy of any Amendment undertaken pursuant to this
paragraph 15(b) shall be provided to all parties to this
Agreement."
14. The third sentence of Section 15(c) of the
Agreement is hereby amended to read as follows:
"Upon termination, title to the Properties shall
be conveyed by Nominee in accordance with the written
instructions of FCI, FAC, the 1993-A Trustee or the
Triple-A Collateral Agent, as the case may be, as the
beneficial owner or the assignee of the beneficial
ownership of such Properties at such time; except,
however, if Nominee has been notified by a Bank in
writing that a default has occurred under a Loan
Agreement, as described more fully in Section 12 of
this Agreement, Nominee shall convey title to the
Properties underlying the defaulted Loan Agreement in
accordance with the written instructions of the related
Bank and first lienholder with respect thereto."
15. Section 16 of the Agreement is hereby amended by
adding thereto the following addresses (and by striking any
addresses which are supplanted by the addresses set forth
below):
The First National Bank of Boston
---------------------------------
Counsel:
Linda J. Carter Marcia Robinson
The First National Bank of Boston Bingham, Dana & Gould
115 Perimeter Center Place, N.E. 150 Federal Street
Suite 500 Boston, Massachusetts 02106
Atlanta, Georgia 30346 (617) 951-8535
(770) 390-6500 Telecopy: (617) 951-8736
Telecopy: (770)390-8434
First Commercial Trust Company, N.A.
------------------------------------
Counsel:
Bonnie McKenzie Heartsill Ragon, III
First Commercial Trust Company, Gill Law Firm
National Association 425 West Capitol
Capitol and Broadway Streets Little Rock, Arkansas 72201
First Commercial Building, (501) 376-3800
7th Floor Telecopy: (501) 372-3359
Little Rock, Arkansas 72201
(501) 371-6702
Telecopy: (501) 371-6610
Capital Markets Assurance Corporation
-------------------------------------
885 Third Avenue, 14th Floor Counsel:
New York, NY 10022 Marc D. Wassermann, Esq.
Attn: Head of Exposure Sidley & Austin
Management 1722 Eye Street, NW
(212) 891-8806 Washington, D.C. 20006
Telecopy: (212) 755-5462 (202)736-8000
Telecopy: (202) 736-8711
16. The Agreement is hereby amended to replace the
Schedule E thereto with the Triple-A Intervals described on
Exhibit A to this Amendment.
17. Except as otherwise amended by this Amendment, all
provisions of the Agreement remain in full force and effect.
18. An executed copy of this Amendment shall be
provided to all parties to the Agreement.
19. This Amendment shall be construed in accordance
with and governed by the laws of the State of Arkansas. In
the event that any clause or provision of this Amendment is
declared to be invalid, the invalidity of any such clause or
provision shall not affect the remaining clauses and
provisions of this Amendment which shall remain in full
force and effect.
20. This Amendment may be executed in one or more
counterparts, all of which shall constitute one and the same
instrument.
[THIS SPACE LEFT BLANK INTENTIONALLY]
DATED as of the date first above written.
FAIRFIELD COMMUNITIES, INC.;
FAIRFIELD MYRTLE BEACH, INC.
/s/Dawn Peoples BY: /s/Robert W. Howeth
- ----------------------- -----------------------------
Witness TITLE: Senior Vice President
FAIRFIELD ACCEPTANCE CORPORATION
/s/Dawn Peoples BY: /s/Robert W. Howeth
- ------------------------ -----------------------------
Witness TITLE: President
LAWYERS TITLE INSURANCE CORPORATION
/s/Sherry D. Adkison BY:/s/Randall E. Cox
- ------------------------ ----------------------------
Witness TITLE: Senior Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender under the FCI
Boston Loan Agreement
/s/Paula C. Anderson BY: /s/Linda J. Carter
- ------------------------ ----------------------------
Witness TITLE: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender under the FAC
Boston Loan Agreement
/s/Paula C. Anderson BY:/s/Linda J. Carter
- ------------------------ ----------------------------
Witness TITLE:Vice President
CAPITAL MARKETS ASSURANCE CORPORATION
as Triple-A Collateral Agent
/s/Dawn Peoples BY: /s/Philip Theoharides
- ------------------------- ----------------------------
Witness TITLE: Vice President
EXHIBIT A
SCHEDULE E
----------
TRIPLE-A INTERVALS
GRANTED ON CLOSING DATE
(April 10, 1995 - Previously Provided)
[Information Omitted]
ADDENDUM TO
-----------
SCHEDULE E
----------
TRIPLE-A INTERVALS
GRANTED ON EFFECTIVE RESTATEMENT DATE
(September 17, 1996)
[Information Omitted]
THIRD AMENDMENT TO THIRD AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT
between
FAIRFIELD ACCEPTANCE CORPORATION
and
THE FIRST NATIONAL BANK OF BOSTON,
INDIVIDUALLY AND AS AGENT
THIS AMENDMENT (this "Amendment") dated as of December
12, 1996, is made by and among FAIRFIELD ACCEPTANCE
CORPORATION, a Delaware corporation (the "Borrower" or
"FAC"), THE FIRST NATIONAL BANK OF BOSTON, a national
banking association ("FNBB"), and THE FIRST NATIONAL BANK OF
BOSTON, as agent for itself and the Lenders (the "Agent"),
parties to a certain Third Amended and Restated Revolving
Credit Agreement dated as of September 28, 1993, as amended
by a Consent, Waiver and Agreement, dated as of September
23, 1994, as further amended by a First Amendment to Third
Amended and Restated Revolving Credit Agreement dated as of
December 9, 1994, and as further amended by a Second
Amendment to Third Amended and Restated Revolving Credit
Agreement dated as of December 19, 1994 (as so amended, the
"Credit Agreement"). This Amendment is joined in by
Fairfield Communities, Inc., a Delaware corporation
("Fairfield") and Fairfield Myrtle Beach, Inc. ("Myrtle",
Fairfield and Myrtle are hereinafter collectively referred
to as the "Guarantors") by reason of the Unconditional
Guaranty of Payment and Performance, dated as of September
28, 1993, from the Guarantors in favor of the Agent (the
"FAC Guaranty"). All capitalized terms used herein and not
otherwise defined shall have the same respective meanings
herein as in the Credit Agreement.
WHEREAS, FNBB, FAC and the Agent have agreed to extend
the maturity date of the Revolving Credit Loans;
NOW, THEREFORE, in consideration of the premises, FAC,
FNBB, the Guarantors and the Agent hereby agree as follows:
1. AMENDMENT TO CREDIT AGREEMENT. FAC, FNBB and the
-----------------------------
Agent hereby agree to amend the Credit Agreement as follows:
1.1. The definition "Maturity Date" appearing in
Section 1.1 of the Credit Agreement is hereby amended by
deleting said definition in its entirety and substituting
therefor the following new definition:
"Maturity Date. January 1, 1999, or if extended
-------------
in accordance with 3.4 hereof, such extended
date."
2. GUARANTORS CONSENT. The Guarantors hereby consent
------------------
to the amendment to the Credit Agreement set forth in this
Amendment and confirm their obligations to the Agent and the
Lenders under the FAC Guaranty and the FAC Guaranty shall
extend to and include the obligations of the Borrower under
the Credit Agreement as amended by this Amendment. Each of
the Guarantors agrees that all of its obligations to the
Agent and the Lenders evidenced by or otherwise arising
under the FAC Guaranty are in full force and effect and are
hereby ratified and confirmed in all respects.
3. OTHER AMENDMENTS. Except as expressly provided in
----------------
this Amendment, all of the terms and conditions of the
Credit Agreement and the other Loan Documents remain in full
force and effect. FAC confirms and agrees that the
Obligations of FAC to the Lenders and the Agent under the
Credit Agreement, as amended hereby, and all of the other
obligations of FAC under the other Loan Documents, are
secured by and entitled to the benefits of the Security
Documents.
4. EXECUTION IN COUNTERPARTS. This Amendment may be
-------------------------
executed in any number of counterparts and by each party on
a separate counterpart, each of which when so executed and
delivered shall be an original, but all of which together
shall constitute one instrument. In proving this Amendment,
it shall not be necessary to produce or account for more
than one such counterpart signed by the party against whom
enforcement is sought.
5. HEADINGS. The captions in this Amendment are for
--------
convenience of reference only and shall not define or limit
the provisions hereof.
IN WITNESS WHEREOF, the parties have executed this
Amendment as an instrument under seal to be governed by the
laws of the Commonwealth of Massachusetts, as of the date
first above written.
FAIRFIELD ACCEPTANCE
CORPORATION
By: /s/Robert W. Howeth
-------------------------------
Name: Robert W. Howeth
-----------------------------
Title: President
----------------------------
FAIRFIELD COMMUNITIES, INC.
By: /s/Robert W. Howeth
------------------------------
Name: Robert W. Howeth
----------------------------
Title: Senior Vice President
----------------------------
FAIRFIELD MYRTLE BEACH, INC.
By: /s/Robert W. Howeth
-------------------------------
Name: Robert W. Howeth
-----------------------------
Title: Vice President
----------------------------
THE FIRST NATIONAL BANK
OF BOSTON, Individually and as Agent
By:/s/ Linda J. Carter
---------------------------------
Name: Linda J. Carter
-------------------------------
Title: Vice President
------------------------------
AMENDED AND RESTATED
NASHVILLE TITLE CLEARING AGREEMENT
This Agreement is made and entered into as of July 31,
1996, by and among Fairfield Communities, Inc., a Delaware
corporation (referred to herein as "FCI"); Fairfield
Acceptance Corporation, a Delaware corporation and wholly-
owned subsidiary of FCI (referred to herein as "FAC");
Lawyers Title Insurance Corporation, a Virginia corporation
(referred to herein as "Nominee"); The First National Bank
of Boston, Boston, Massachusetts (hereinafter defined
as "FNBB"), as agent and lender to FCI pursuant to the FCI
Boston Loan Agreement (as hereinafter defined); The First
National Bank of Boston, Boston, Massachusetts, as agent and
lender to FAC pursuant to the FAC Boston Loan Agreement (as
hereinafter defined); and Capital Markets Assurance
Corporation, a New York stock insurance company, as
collateral agent (referred to herein as "Triple-A Collateral
Agent") pursuant to the Triple-A Credit Agreement (as
hereinafter defined). This Agreement is made in lieu of and
supersedes that certain Nashville Title Clearing Agreement,
dated as of September 11, 1995.
W-I-T-N-E-S-S-E-T-H:
WHEREAS, FCI is engaged in the development of a certain
resort and recreational project known as Fairfield Nashville
at Music City U.S.A., Davidson County, Tennessee, and
certain other properties not subject hereto; and will sell
Timeshare Intervals (as hereinafter defined) and Undivided
Ownership Interests (as hereinafter defined) therein to
purchasers by way of contract agreement and installment
notes (the "Sales Contracts") whereby the purchasers are
permitted to finance the purchase price for said Timeshare
Intervals and Undivided Ownership Interests over a period of
time; and
WHEREAS, FNBB is the primary lender responsible for
financing the development of FCI projects and in connection
therewith has obtained a security interest in certain Sales
Contracts as security for the repayment of the borrowings of
FCI under the FCI Boston Loan Agreement and of FAC under the
FAC Boston Loan Agreement, and FNBB has further taken
underlying encumbrances against the Property (as defined
herein) and certain other properties not subject to this
Agreement as security for the repayment of the borrowings of
FCI under the FCI Boston Loan Agreement and of FAC under the
FAC Boston Loan Agreement, which underlying encumbrances on
the Property have provisions for release for the protection
of the purchasers of Timeshare Intervals and Undivided
Ownership Interests, said releases to be given under certain
conditions as set forth therein; and
WHEREAS, FCI and FAC have entered into an arrangement
for the sale by FCI to FAC of certain Sales Contracts and
other receivables pursuant to a Third Amended and Restated
Operating Agreement dated as of December 9, 1994, as
amended; and
WHEREAS, FAC has sold certain Sales Contracts to
Fairfield Capital Corporation, a Delaware corporation
("FCC") pursuant to an Amended and Restated Receivables
Purchase Agreement, dated as of July 31, 1996 (the "Triple-A
Purchase Agreement"), which Sales Contracts have in turn
been pledged by FCC to the Triple-A Collateral Agent for the
benefit of itself, Triple-A One Funding Corporation, a
Delaware corporation ("Triple-A"), and The First National
Bank of Boston, as L/C Bank ("L/C Bank"), pursuant to the
Triple-A Credit Agreement (as hereinafter defined); and
WHEREAS, FNBB will have released its lien upon and its
interest in Sales Contracts and the underlying Timeshare
Intervals and Undivided Ownership Interests as a prior
condition to their being pledged to the Triple-A Collateral
Agent;
WHEREAS, the parties hereto are desirous of
establishing a title clearing mechanism for the purpose of
providing a convenient method of holding and conveying title
to the Property, releasing encumbrances thereon and
protecting the interests of the various parties hereto as
their interests may appear;
NOW THEREFORE, in consideration of the mutual promises
and covenants set forth herein, the parties hereto agree as
follows:
1. Definitions. For the purposes of this Agreement,
-----------
the following words and terms shall have the following
meanings unless the context clearly indicates otherwise:
FAC means Fairfield Acceptance Corporation, a
---
Delaware corporation and a wholly-owned subsidiary
of FCI, individually and in its capacity as
servicer under the Triple-A Credit Agreement.
FAC Boston Loan Agreement means the Third
---------------------------
Amended and Restated Revolving Credit Agreement,
dated as of September 28, 1993, between FAC and
FNBB, as amended pursuant to the First Amendment
to Third Amended and Restated Revolving Credit
Agreement, dated as of December 9, 1994, between
FAC and FNBB, and as further amended by the Second
Amendment to Third Amended and Restated Revolving
Credit Agreement, dated as of December 19, 1994,
between FAC and FNBB, as amended and in effect
from time to time.
FCI means Fairfield Communities, Inc., a
---
Delaware corporation.
FCI Boston Loan Agreement means the Amended
--------------------------
and Restated Revolving Credit Agreement, dated as
of September 28, 1993, among FCI, Fairfield Myrtle
Beach, Inc., Suntree Development Company, St.
Andrews Management, Inc., Fairfield Suntree
Realty, Inc., and FNBB, as amended pursuant to the
First Amendment to Amended and Restated Revolving
Credit Agreement, dated as of May 13, 1994, as
further amended by Consent Waiver and Agreement,
dated as of September 23, 1994, as further amended
by Second Amendment to Amended and Restated
Revolving Credit Agreement, dated as of December
9, 1994, as further amended by Third Amendment to
Amended and Restated Revolving Credit Agreement,
dated as of December 19, 1994, as further amended
by Fourth Amendment to Amended and Restated
Revolving Credit Agreement, dated as of November
20, 1995, and as further amended by Fifth
Amendment to Amended and Restated Revolving Credit
Agreement, dated as of January 25, 1996, among
FCI, Fairfield Myrtle Beach, Inc., and FNBB, as
amended and in effect from time to time.
FNBB means, as appropriate, The First
----
National Bank of Boston, as lender and agent for
itself and such other lenders who may hereinafter
become parties to the FCI Boston Loan Agreement,
and The First National Bank of Boston, as lender
and agent for itself and such other lenders who
may hereinafter become parties to the FAC Boston
Loan Agreement.
L/C Bank means The First National Bank of Boston,
--------
in its capacity as L/C Bank under the Triple-A Credit
Agreement.
Loan Agreement means, as appropriate, the FCI
--------------
Boston Loan Agreement, the FAC Boston Loan
Agreement or the Triple-A Credit Agreement.
Mortgage means a deed of trust, deed to
--------
secure debt, vendor's lien, mortgage or any other
instrument typically considered to be a mortgage.
Operating Agreement means the Third Amended
-------------------
and Restated Operating Agreement dated as of
December 9, 1994, between FCI and FAC, as amended.
POA means the timeshare association(s)
---
organized in connection with the establishment of
the Project.
Project means the Fairfield Nashville at
-------
Music City U.S.A. project and such other projects
as may be developed by FCI and added to this
Agreement. The Project, as it is presently
conceived, is described in Schedule C hereto.
Property means that portion of the real
--------
property described in Schedule A attached hereto,
as amended from time to time, which has been or
will be conveyed by FCI to Nominee. The Mortgages
on the Property in favor of FNBB are listed in
Schedule B attached hereto, as amended from time
to time.
Purchasers means those individuals,
----------
partnerships, corporations or other entities who
have entered into a Sales Contract with FCI for
the purchase of a Timeshare Interval or an
Undivided Ownership Interest at the Project.
Sales Contracts means those contract
-----------------
agreements and installment notes to be entered
into between FCI and various Purchasers for the
purchase of a Timeshare Interval or an Undivided
Ownership Interest and for which the total
purchase price has not been paid by the Purchaser.
Secured Party means FNBB or the Triple-A
--------------
Collateral Agent, as applicable.
Timeshare Intervals means those timeshare
--------------------
intervals (unit weeks) created or to be created in
the Property pursuant to regime documents filed or
to be filed creating an underlying ownership
interest which is the subject of a Sales Contract,
which ownership interest shall consist of a fixed
week or undivided interest in fee simple in a
lodging unit or group of lodging units at the
Project.
Triple-A Collateral Agent means Capital Markets
---------------------------
Assurance Corporation, a New York Stock insurance
company, as collateral agent for the benefit of itself,
Triple-A and L/C Bank pursuant to the Triple-A Credit
Agreement.
Triple-A Credit Agreement means that certain
---------------------------
Amended and Restated Credit Agreement, dated as of July
31, 1996, by and among FAC, as servicer, FCI, FCC, as
borrower, Triple-A Collateral Agent, L/C Bank and
Triple-A, relating to loans to be made by Triple-A to
FCC.
Triple-A Timeshare Intervals means those Timeshare
----------------------------
Intervals which give rise to certain Sales Contracts
pledged, assigned and transferred to the Triple-A
Collateral Agent pursuant to the Triple-A Credit
Agreement. The Triple-A Timeshare Intervals are listed
on Schedule D attached to this Agreement and made a
part hereof, as amended from time to time.
Triple-A Undivided Ownership Interests means those
--------------------------------------
Undivided Ownership Interests which give rise to
certain Sales Contracts pledged, assigned and
transferred to the Triple-A Collateral Agent pursuant
to the Triple-A Credit Agreement. The Triple-A
Undivided Ownership Interests are listed on Schedule D
attached to this Agreement and made a part hereof, as
amended from time to time.
Undivided Ownership Interests means those
-------------------------------
undivided ownership interests created or to be
created in the Property which are the subject of
Sales Contracts. An Undivided Ownership Interest
is that form of real property ownership in a unit
or units committed to undivided ownership
consisting of an undivided interest in fee simple
absolute as a tenant in common with all other
owners of an undivided interest in such unit or
units, whereby an owner is entitled to occupy the
same on a reservation basis and where the owner's
fractional interest is shown on the owner's Sales
Contract and deed.
2. Transfer of Property to Nominee. FCI, by deed or
--------------------------------
deeds from time to time, has transferred and may continue to
transfer fee simple title to Nominee to all or a portion of
the real property identified in Schedule A, subject to those
Mortgages identified in Schedule B. Nominee agrees to
acquire and hold legal title to the Property in accordance
with the terms, provisions and conditions of this Agreement
and for the benefit of FCI, FAC and the related Secured
Party, as their interests may appear. Nominee shall have
the right to review all proposed conveyances to it of the
real property identified in Schedule A to assure compliance
with the terms of this Agreement. It is presently
anticipated that Property will be conveyed to Nominee as it
is platted and prior to the time that sales of Timeshare
Intervals and Undivided Ownership Interests with respect
thereto are commenced. The Project as it is presently
conceived is described in Schedule C hereto. However, the
development plans for such Project may be revised by FCI
without notice to or the approval of any of the other
parties hereto.
Except for the Property for which the beneficial
interest has been transferred to FCC and subsequently
pledged to the Triple-A Collateral Agent, the beneficial
interest in all Property underlying Sales Contracts conveyed
to Nominee pursuant to this Agreement shall be in FCI, and
at such time as the Sales Contracts are transferred to FAC
pursuant to the Operating Agreement, the beneficial interest
in the Property underlying those Sales Contracts transferred
to FAC shall pass to FAC with the transference of said Sales
Contracts. In the event FCI elects to repurchase Sales
Contracts previously transferred to FAC, the beneficial
interest in the related Property will be re-transferred to
FCI by FAC when those Sales Contracts are transferred from
FAC back to FCI, all in accordance with the Operating
Agreement. Although Nominee shall be advised of the
transference of Sales Contracts and the beneficial interest
in the Property underlying such Sales Contracts, Nominee
shall not be held liable by any party hereto for acting in
good faith on the written instruction of FCI or FAC even
though there may be a mistake as to the proper owner of the
beneficial interest in the Property underlying the Sales
Contracts.
3. Title Ownership and Responsibility of Nominee.
---------------------------------------------
(a) Nominee acknowledges that notwithstanding the
fact that it will be the record owner of the fee simple
title to the Property, its ownership is subject in all
respects to the provisions of this Agreement, those
Mortgages identified on Schedule B hereto, and the terms and
conditions of the Loan Agreements. Nominee further
acknowledges that it holds fee simple title to the Property
for the benefit of the parties hereto and shall have no
equitable rights in the Property nor any right to the income
or profits to be derived therefrom.
(b) Nominee's function and responsibility during
the existence of this Agreement will be to (i) hold record
title to the Property for the benefit of the other parties
hereto; (ii) convey title as directed upon the written
request of FCI or FAC, as applicable, as the beneficial
owner at such time and, if applicable, as servicer under the
Triple-A Credit Agreement, except as provided by Section 12
hereof; (iii) contemporaneously with the conveyancing of any
of the Property that qualifies for deeding in accordance
with the terms of the Sales Contracts, pursuant to
authorization from the related Secured Party as set forth
herein, cause with respect to such Property the Secured
Party's underlying Mortgage, if any, to be released of
record; (iv) where requested by FCI or a Purchaser, as the
case may be, cause to be issued a title insurance policy to
the Purchaser provided all title requirements are properly
met and the appropriate premium has been paid; and
(v) execute such instruments as required to be executed
pursuant to Sections 11 and 13 hereof. Nominee may
authorize any third party, including any employee of FAC or
FCI, by power of attorney, to execute any instrument
required by this Section 3(b).
(c) Except to the extent expressly permitted
herein, Nominee shall have no discretionary authority
whatsoever to exercise any control over the Property.
(d) Except as set forth in Section 3(b), Nominee
agrees that it will do nothing which will in any way impair,
encumber or otherwise adversely affect in any manner the
title to the Property.
(e) Nominee shall have no duties and
responsibilities other than those set forth herein, and it
shall act only at the direction of the parties hereto solely
in accordance with the terms hereof. FCI, FAC and each
Secured Party hereby expressly do not delegate any
discretionary duties and responsibilities to Nominee as are
often times associated with a trustee acting pursuant to the
terms and provisions of a trust agreement.
4. Responsibility of FAC or FCI Relating to
--------------------------------------------------
Conveyances by Nominee.
- -----------------------
(a) FCI shall cause any construction or vendor's
lien or blanket encumbrance, if any (other than FNBB's
Mortgages) to be released and shall be responsible for
paying release prices to the proper party as necessary to
secure the release of the Property to be conveyed as
provided herein.
(b) FCI or FAC, as the case may be, shall prepare
all such deeds, releases, assignments and other documents as
may be necessary to carry out the purposes of this Agreement
and to cause revenue stamps or transfer tax stamps to be
properly affixed as necessary to satisfy recording
requirements, and shall cause all recording fees to be paid
and all necessary instruments to be recorded in the
appropriate real estate records. FCI and FAC agree that
each will maintain all records necessary to identify
beneficial ownership of the Property.
(c) FCI or FAC, as the case may be, shall be
responsible for advising Nominee and the related Secured
Party of all assignments of the Sales Contracts and
underlying beneficial interests and all conveyances of the
Property by furnishing copies of all such assignments and
conveyances to Nominee and to such Secured Party. Such
assignments shall take the form of a "Document of Sale and
Assignment of Beneficial Interest" or a "Document of Pledge
and Assignment of Beneficial Interest", which shall identify
those Sales Contracts and the underlying Property giving
rise to such Sales Contracts to be assigned or conveyed.
Nominee shall be entitled to rely upon such "Documents of
Sale and Assignment of Beneficial Interest" and "Documents
of Pledge and Assignment of Beneficial Interest" in
determining beneficial ownership of the Property.
(d) FCC has provided to Nominee on the Closing
Date and Effective Restatement Date (as such terms are
defined in the Triple-A Credit Agreement), and FCC will
provide to Nominee on Contract Grant Dates (as defined in
the Triple-A Credit Agreement), if any, occurring after the
Effective Restatement Date, copies of
releases and assignments evidencing (i) FNBB's release of
its lien upon and its interest in the Triple-A Timeshare
Intervals or the Triple-A Undivided Ownership Interests and
the related Sales Contracts, (ii) the transfer of all
beneficial interest in the Triple-A Timeshare Intervals or
the Triple-A Undivided Ownership Interests and the related
Sales Contracts from FAC to FCC pursuant to the Triple-A
Purchase Agreement and (iii) the pledge and assignment of
the Triple-A Timeshare Intervals or the Triple-A Undivided
Ownership Interests and the related Sales Contracts from FCC
to the Triple-A Collateral Agent pursuant to the Triple-A
Credit Agreement. Upon receipt by the Nominee of any such
future releases and assignments, Schedule D shall
automatically be deemed to be updated to include the Triple-
A Timeshare Intervals and the Triple-A Undivided Ownership
Interests covered by such releases and assignments, and
Nominee shall be entitled to rely upon such releases and
assignments in determining beneficial ownership of the
Triple-A Timeshare Intervals and the Triple-A Undivided
Ownership Interests covered thereby.
FAC, as servicer under the Triple-A Credit Agreement,
or the Triple-A Collateral Agent shall provide Nominee with
copies of any future assignments from Triple-A Collateral
Agent to FCC, FAC or FCI, as applicable, of beneficial
interest in the Triple-A Timeshare Intervals or Triple-A
Undivided Ownership Interests, which assignments shall be in
the form of a certificate and shall identify the Triple-A
Timeshare Intervals and the Triple-A Undivided Ownership
Interests and related Sales Contracts assigned thereby. To
be effective, any such assignment submitted to Nominee by
FAC shall be accompanied by an approval, in writing, of the
Triple-A Collateral Agent. Upon receipt by the Nominee of
any such certificates, (i) Schedule D shall automatically be
deemed to be updated to exclude the Triple-A Timeshare
Intervals and the Triple-A Undivided Ownership Interests
covered by such certificates, (ii) Nominee shall be entitled
to rely upon such certificates in determining beneficial
ownership of the Triple-A Timeshare Intervals and the
Triple-A Undivided Ownership Interests covered thereby and
(iii) the beneficial ownership of the Triple-A Timeshare
Intervals and the Triple-A Undivided Ownership Interests
covered by such certificates shall be presumed to be in FCI
or FAC, as applicable, and subject to the lien of FNBB under
the Mortgages on Schedule B.
5. Conveyance and Release of Property.
----------------------------------
(a) At such time as a Purchaser has paid in full
the purchase price or the requisite percentage of the
purchase price for deeding pursuant to a Sales Contract,
and/or has otherwise fully discharged all of the Purchaser's
obligations and responsibilities required to be discharged
as a condition to deeding, including the payment of all POA
dues and assessments, FCI or FAC, as applicable, as the
beneficial owner, or as servicer for a Secured Party which
is the beneficial owner, of the security interest in the
underlying Property with respect to such Sales Contract at
such time, shall notify the related Secured Party(s) and
shall direct Nominee in writing to immediately cause to be
released the related Secured Party(s)' underlying
Mortgage(s) with respect to such Property, unless otherwise
directed in writing by the related Secured Party(s) pursuant
to Section 12 hereof, and forthwith shall deliver and record
a properly executed Warranty Deed or Special Warranty Deed
(with documentary stamps and recording fees to be paid by
FCI or FAC, as the case may be) conveying fee simple title
to the Timeshare Interval or Undivided Ownership Interest
covered by such Sales Contract to the Purchaser. Within a
reasonable time following the delivery of the Warranty Deed
or Special Warranty Deed to Purchaser, a title insurance
policy shall also be delivered (provided the Purchaser has
paid for such in connection with his purchase of the
Property involved).
(b) Unless directed otherwise by a Secured Party
pursuant to Section 12 hereof (or otherwise), each Secured
Party hereby authorizes and appoints Nominee as its agent to
release such Secured Party's underlying Mortgage(s) against
any Property upon receipt by Nominee of a written request
for deeding by FCI or FAC, together with a certification by
an authorized officer of FCI or FAC stating that all the
conditions to the release from the Mortgage or Mortgages
encumbering such Property have been satisfied. Each Secured
Party further agrees to execute any additional documents as
may be necessary to be filed of record in order to verify
Nominee's authority to release such Secured Party's
Mortgage(s) as provided herein.
(c) All payments made by Purchasers pursuant to
the terms of their Sales Contract shall be made directly to
FCI or FAC, as the case may be, for the benefit of the
relevant Secured Party, if any, pursuant to the terms of the
related Loan Agreement. No payments are to be received by
Nominee.
6. Default by Purchaser. Where a Purchaser has
----------------------
recorded his/her Sales Contract and the Purchaser defaults
and otherwise refuses to reconvey legal or equitable title
to Nominee, Nominee shall assign the recorded Sales Contract
to FCI or FAC (as applicable, as the beneficial owners of
such recorded Sales Contract), or, if applicable, as
servicer for a Secured Party pursuant to the terms of the
related Loan Agreement, for foreclosure or other appropriate
action. Subject to the provisions of Section 12 hereof,
Nominee may rely on the written request of FCI or FAC, as
applicable, in regard to the assignment of said recorded
Sales Contract.
7. POA Voting Rights. Voting rights in the POA which
-----------------
may inure to the benefit of Nominee as legal title holder to
Property shall be assigned by Nominee to FCI or, at the
option of FCI, FCI may require an irrevocable proxy be
delivered unto it by Nominee so that FCI may continue to
exercise all such voting rights.
8. Warranty as to Title. FCI represents and warrants
--------------------
unto Nominee that it will transfer fee simple title to the
Property to Nominee, and that its deed(s) of conveyance to
Nominee will convey to said Nominee title subject only to
(i) condominium restrictions, covenants, etc., including
timeshare declarations, (ii) road rights of way and
easements, (iii) utility easements, (iv) the rights of
Purchasers who have previously entered into Sales Contracts,
(v) those Mortgages identified on Schedule B attached
hereto, (vi) such other miscellaneous restrictions,
covenants and Mortgages as those enumerated above, and
(vii) the terms of this Agreement.
9. [RESERVED]
10. Indemnification. FCI and FAC jointly and
---------------
severally agree to indemnify and hold harmless Nominee from
any and all claims, demands, actions or causes of action in
any way relating to or arising out of the record ownership
of the Property or out of the good faith discharge by
Nominee of any of the terms and conditions of this
Agreement, including all costs and expenses of any nature
that Nominee may incur. Each Secured Party shall indemnify
and hold harmless Nominee from any and all claims, demands,
actions or causes of action, including all costs and
expenses of any nature that Nominee may incur in connection
therewith, which relate to or arise out of any action or
failure to act of Nominee, which action or inaction was in
good faith pursuant to and in reliance upon written
instructions from such Secured Party to Nominee. With
respect to actions related to particular portions of the
Property, the parties hereto expressly acknowledge that
Nominee shall be entitled to rely upon the written
instructions of FCI, FAC or the Secured Party which has a
first position lien on such Property as set forth herein and
in the Schedules hereto, and Nominee shall have no liability
for any action taken in good faith in such reliance. FCI or
FAC, as the case may be, shall reimburse Nominee for all
costs, fees and expenses incurred by it relating to its
serving as Nominee under the terms and provisions of this
Agreement. It is the intent of the parties to insure that
Nominee shall incur no liability whatsoever in connection
with the good faith performance of its functions under this
Agreement, and in connection therewith, all parties hereto
release and waive any claims they may have against Nominee
which may result from the performance in good faith by
Nominee of its responsibility under this Agreement.
11. Mortgages, Platting and Reconveyance of the
--------------------------------------------------
Property. Subject to the provisions of Section 12 hereof,
- --------
upon written request of FCI, Nominee shall, except as to
such Property as FCI may have previously assigned or
transferred beneficial interest, reconvey all or any portion
of the Property to FCI, subject to the Mortgages listed in
Exhibit B, for the purpose of granting construction
Mortgages or for any other purpose for which FCI may require
legal title; and further, Nominee agrees to execute such
Mortgages covering such Property, as requested in writing by
FCI, to any Secured Party or such third parties as FCI may
direct. Nominee further agrees to execute any and all
documents, including plats, covenants and restrictions, as
may be necessary to add and/or revise existing or new
subdivisions.
12. Default Under Loan Agreements. In the event of
-------------------------------
default by FCI, FAC or FCC under any of the Loan Agreements,
the related Secured Party shall notify Nominee in writing of
such event at such time as notice of such default is given
to FCC, FAC or FCI, as the case may be, which writing shall
identify the Property or portion thereof covered by the
related Secured Party's Mortgage or giving rise to Sales
Contracts relating to the defaulted Loan Agreement, as
applicable, and may further instruct Nominee that, with
respect to such Property, Nominee shall act only upon the
written instructions of the related Secured Party, whereupon
Nominee shall only take action with respect to the related
Property identified in the notice, notwithstanding
instructions of FCI, FAC or FCC to the contrary, as directed
by the related Secured Party.
The receipt of any notice of default shall relate
only to the specific Loan Agreement identified therein. As
to all other Loan Agreements, Nominee shall continue to act
upon the written request of FCI, FAC, FNBB and the Triple-A
Collateral Agent, as the case may be, as to the Property
relating thereto.
Any notice of default given Nominee pursuant to
this Section 12 shall be mailed by first class mail, postage
prepaid, return receipt rested, to the following address:
Lawyers Title Insurance Corporation
One Commerce Square, Suite 1200
P. O. Box 432
Memphis, TN 38101-0432
Attn: Gary L. Gatten
In no event shall Nominee have any responsibility
for preparation of documents referred to in Section 4(b) of
this Agreement. As to Property relating to any defaulted
Loan Agreement, said documents shall be prepared by the
related Secured Party or its designee.
13. Provisions Related to Pooling/Pledge/Sale
----------------------------------------------
Agreements. Notwithstanding anything herein to the contrary
- ----------
and specifically notwithstanding the provisions of
Section 3(a) hereof, the interest in Properties related to
the Triple-A Undivided Ownership Interests and the Triple-A
Timeshare Intervals granted the Triple-A Collateral Agent by
this Agreement and the Triple-A Credit Agreement are hereby
deemed superior and senior to any and all interests granted
pursuant to the Mortgages listed in Schedule B hereto. The
parties hereto acknowledge that Nominee holds title to the
Triple-A Undivided Ownership Interests and the Triple-A
Timeshare Intervals for the benefit of the Triple-A
Collateral Agent and the purchasers of the Triple-A
Undivided Ownership Interests and the Triple-A Timeshare
Intervals, subject only to the terms and conditions of the
Triple-A Credit Agreement and the related Sales Contracts,
respectively. The Nominee shall not transfer, pledge or
assign the Triple-A Undivided Ownership Interests or the
Triple-A Timeshare Intervals except as expressly provided
herein. The provisions of this paragraph, however, shall
not apply to any Triple-A Undivided Ownership Interests and
Triple-A Timeshare Intervals that may be granted the Triple-
A Collateral Agent by this Agreement and the Triple-A Credit
Agreement on Contract Grant Dates (as defined in the Triple-
A Credit Agreement), if any, occurring after the Effective
Restatement Date (as defined in the Triple-A Credit
Agreement), until releases and assignments covering such
Property have been delivered to the Nominee in accordance
with the requirements of Section 4(d) hereof.
14. Miscellaneous.
-------------
(a) This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their
successors and assigns. This Agreement constitutes the
entire understanding and agreement between the parties with
respect to the subject matter hereof and may not be changed
or modified orally but only by instrument in writing signed
by the party against which enforcement of such change or
modification is sought.
(b) This instrument shall be construed in
accordance with and governed by the laws of the State of
Arkansas. In the event any clause or provision of this
Agreement is declared to be invalid, the invalidity of any
such clause or provision shall not affect the remaining
clauses and provisions of this Agreement which shall remain
in full force and effect.
(c) No party may make an assignment of its
interest in this Agreement without obtaining the written
consent of the other parties hereto; provided, however, that
to the extent permitted by the FCI Boston and FAC Boston
Loan Agreements and the Triple-A Credit Agreement,
respectively, FNBB and the Triple-A Collateral Agent may be
replaced or succeeded as parties to this Agreement without
the consent of the other parties hereto. The parties
further agree to execute additional documents as may be
necessary to carry out the purposes of this Agreement and
protect the interests of all parties hereto.
15. Amendment/Termination.
---------------------
(a) This Agreement may be amended from time to
time for the purpose of adding additional parties and
revising the terms herein; provided, however, no such
amendment shall be effective until all parties hereto have
agreed in writing to such revisions.
(b) This Agreement may also be amended for the
purpose of identifying and segregating a separate pool of
Sales Contracts, and the Timeshare Intervals and/or
Undivided Ownership Interests relating thereto, which are to
be sold or pledged pursuant to a pooling, sale or pledge
agreement, by an instrument in writing signed by FCI, FAC,
Nominee and FNBB. Any amendment undertaken pursuant to this
paragraph 15(b) shall not relate to or affect Undivided
Ownership Interests or Timeshare Intervals listed on
Schedule D attached hereto, nor shall it in any way impair
or amend the rights of the Triple-A Collateral Agent under
this Agreement. An executed copy of any Amendment
undertaken pursuant to this paragraph 15(b) shall be
provided to all parties to this Agreement.
(c) This Agreement shall be terminable by any
party hereto by giving sixty (60) days written notice to all
other parties of its desire to so terminate. The election
by any party other than FCI or FAC to terminate will not
terminate this Agreement with respect to the remaining
parties; provided the remaining parties shall cause to be
substituted a successor party in place of the terminating
party. Upon termination, title to the Property shall be
conveyed by Nominee in accordance with the written
instructions of FCI, FAC or the Triple-A Collateral Agent,
as the case may be; except if Nominee has been notified by a
Secured Party in writing that any of FCI, FAC or FCC are in
default under a Loan Agreement, as described more fully in
Section 12 of this Agreement, Nominee shall convey title to
the Property underlying the defaulted Loan Agreement in
accordance with the written instructions of the related
Secured Party and first lienholder with respect thereto. In
any event, this Agreement shall terminate, if not sooner
terminated, on January 1, 2010.
16. Notice. Notice under this Agreement shall be
------
given to the parties at the following addresses, or at such
other address as shall be designated by a party in a written
notice to the other parties:
Lawyers Title Insurance Corporation
-----------------------------------
Gary L. Gatten
Lawyers Title Insurance
Corporation
One Commerce Square, Suite 1200
P. O. Box 432
Memphis, TN 38101-0432
(901) 523-8121
Telecopy: (901) 527-3428
Fairfield Communities, Inc.,
and Fairfield Acceptance Corporation
------------------------------------
Marcel Dumeny Gordon Wilbourn
Fairfield Communities, Inc. Rose Law Firm,
2800 Cantrell Road a Professional Association
Little Rock, AR 72202 120 East Fourth Street
(501) 664-6000 Little Rock, AR 72201
Telecopy: (501) 660-7196 (501) 377-0332
Telecopy: (501) 375-1309
The First National Bank of Boston
---------------------------------
Linda J. Carter Marcia Robinson
The First National Bank Richard Toelke
of Boston Bingham, Dana & Gould
115 Perimeter Center Place, N.E. 150 Federal Street
Suite 500 Boston, MA 02110
Atlanta, GA 30346 (617) 951-8830
(770) 390-6500 Telecopy: (617) 951-8736
Telecopy: (770) 390-8434
Capital Markets Assurance Corporation
-------------------------------------
885 Third Avenue, 14th Floor Counsel:
New York, NY 10022 Marc D. Wassermann, Esq.
Attn: Head of Exposure Sidley & Austin
Management 1722 Eye Street
(212) 891-8806 Washington, D.C. 20006
Telecopy: (212) 755-5462 (202)736-8000
Telecopy: (202)736-8711
Notice to each of the aforementioned parties shall
be given by Nominee if either FCI or FAC should default in
the performance of any of their respective obligations under
this Agreement.
17. Execution. This Agreement may be executed in one
---------
or more counterparts, all of which shall constitute one and
the same instrument.
[THIS SPACE INTENTIONALLY LEFT BLANK]
DATED as of the date first above written.
FAIRFIELD COMMUNITIES, INC.
/s/Dawn Peoples By: /s/Robert W. Howeth
- ----------------------------- -----------------------------
Witness Title: Senior Vice President
---------------------------
FAIRFIELD ACCEPTANCE CORPORATION
/s/Dawn Peoples By: /s/Robert W. Howeth
- ----------------------------- -----------------------------
Witness Title: President
--------------------------
LAWYERS TITLE INSURANCE CORPORATION
/s/Linda B. Jeffrey By: /s/Gary Gatten
- ------------------------------ -----------------------------
Witness Title: Vice President
--------------------------
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender pursuant to the
FCI Boston Loan Agreement
/s/Paula C. Anderson By: /s/Linda J. Carter
- ----------------------------- -------------------------------
Witness Title: Vice President
----------------------------
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender pursuant to the
FAC Boston Loan Agreement
/s/Paula C. Anderson By: /s/Linda J. Carter
- --------------------------- -------------------------------
Witness Title: Vice President
----------------------------
CAPITAL MARKETS ASSURANCE
CORPORATION, as Triple-A Collateral
Agent
/s/Dawn Peoples By: /s/Philip Theoharides
- ---------------------------- -------------------------------
Witness Title: Vice President
----------------------------
LIST OF SCHEDULES
-----------------
Schedule A: Property That May Be Conveyed To Nominee
Schedule B: Mortgages
Schedule C: Project Description
Schedule D: Triple-A Timeshare Intervals and Triple-A
Undivided Ownership Interests
SCHEDULE A
----------
PROPERTY THAT MAY BE CONVEYED TO NOMINEE
Being a tract of land lying in Nashville, Davidson County, Tennessee
and being part of the Property of Jim B. Smith as of Record in Deed
Book 7777, Page 105, and bounded on the West by the Easterly right-of-
way line of Pennington Bend Road, on the North by the remainder of the
Jim B. Smith property, being Tract 2, on the East by Gleaves Farm
Limited property as of Record in Deed Book 6649, Page 546, and on the
South by the Northerly right-of-way line of McGavock Pike, and being
more particularly described as follows:
Beginning at an iron rod at the intersection of the North right-of-way
of McGavock Pike (60 foot right-of-way) and the East right-of-way of
Pennington Bend Road (50 foot right-of-way);
Thence with the East right-of-way of Pennington Bend Road North 14
46' 21" West, 549.88 feet to an iron rod;
Thence, with a curve to the right, the radius of which is 6237.14
feet, the central angle of which is 05 19' 40", the chord of which is
North 12 05' 31" West, 579.76 feet, along an arc length of 597.97
feet to an iron rod;
Thence North 09 26' 41" West, 172.50 feet to an iron rod;
Thence, leaving the East right-of-way of Pennington Bend Road and with
Tract 2, North 80 33' 19" East, 388.78 feet to an iron rod in the
Westerly line of Gleaves Farm Limited;
Thence, with Gleaves Farm Limited, South 10 15' 03" East, 553.42 feet
to an iron rod;
Thence, South 15 48' 12" East, 862.58 feet to an iron rod on the
Northerly right-of-way of McGavock Pike;
Thence, with the North right-of-way of McGavock Pike, North 84 22'
26" West, 428.84 feet to the point of beginning.
Containing 532,500 square feet (12.225 acres more or less).
SCHEDULE B
----------
MORTGAGES
FCI Mortgage:
- ------------
Deed of Trust, Assignment of Rents, Leases and Leasehold Interests and
Security Agreement, dated as of December 22, 1994, by and among
Fairfield Communities, Inc., as Trustor or Mortgagor, and C. Harold
Reeves, a resident of Tennessee, as Trustee and Grantee for the
benefit of The First National Bank of Boston, as agent, as filed on
January 5, 1995, in the Register's Office of Davidson County,
Tennessee in Book 9565, Page 276.
FAC Mortgage:
- ------------
Deed of Trust, Assignment of Rents, Leases and Leasehold Interests and
Security Agreement, dated as of December 22, 1994, by and among
Fairfield Acceptance Corporation, Inc., as Grantor, and C. Harold
Reeves, a resident of Tennessee, as Trustee and Grantee for the
benefit of The First National Bank of Boston, as agent, as filed on
January 5, 1995, in the Register's Office of Davidson County,
Tennessee in Book 9565, Page 325.
SCHEDULE C
----------
PROJECT DESCRIPTION
Phase I of the Fairfield Nashville at Music City U.S.A. project will
be constructed on approximately 5.32 acres within the property described on
Schedule A. Additional units may be added at FCI's option. If the
additional units are added, the units will be constructed within an area
designated as Future Development, consisting of approximately 4.74 acres.
Attached hereto as Schedule C-1 is a Site Layout Map depicting the Phase I
and Future Development Property.
It is expected that Phase I will consist of seventy-two (72) units
located in six (6) buildings which will be designated on the final "as-
built" plat as buildings 10, 11, 12, 13, 14 and 15.
Building 10 will contain fifteen (15) units numbering 1010, 1012,
1014, 1016, 1018, 1020, 1022, 1024, 1026, 1028, 1030, 1032, 1034, 1036 and
1038.
Building 11 will contain fifteen (15) units numbering 1110, 1112,
1114, 1116, 1118, 1120, 1122, 1124, 1126, 1128, 1130, 1132, 1134, 1136 and
1138.
Building 12 will contain twelve (12) units numbering 1210, 1212, 1214,
1216, 1220, 1222, 1224, 1226, 1230, 1232, 1234 and 1236.
Building 13 will contain nine (9) units numbering 1310, 1312, 1314,
1320, 1322, 1324, 1330, 1332 and 1334.
Building 14 will contain nine (9) units numbering 1410, 1412, 1414,
1420, 1422, 1424, 1430, 1432 and 1434.
Building 15 will contain twelve (12) units numbering 1510, 1512, 1514,
1516, 1520, 1522, 1524, 1526, 1530, 1532, 1534 and 1536.
SCHEDULE D
-----------
TRIPLE-A TIMESHARE INTERVALS AND
TRIPLE-A UNDIVIDED OWNERSHIP INTERESTS
[Information Omitted]
AMENDED AND RESTATED
SEAWATCH PLANTATION TITLE CLEARING AGREEMENT
This Agreement is made and entered into as of July 31,
1996, by and among Fairfield Communities, Inc., a Delaware
corporation (referred to herein as "FCI"); Fairfield Myrtle
Beach, Inc., a Delaware corporation and wholly-owned
subsidiary of FCI ("FMB"); Fairfield Acceptance Corporation,
a Delaware corporation and wholly-owned subsidiary of FCI
(referred to herein as "FAC"); Lawyers Title Insurance
Corporation, a Virginia corporation (referred to herein as
"Nominee"); The First National Bank of Boston, Boston,
Massachusetts (hereinafter defined
as "FNBB"), as agent and lender to FCI and FMB pursuant to
the FCI Boston Loan Agreement (as hereinafter defined); The
First National Bank of Boston, Boston, Massachusetts, as
agent and lender to FAC pursuant to the FAC Boston Loan
Agreement (as hereinafter defined); and Capital Markets
Assurance Corporation, a New York stock insurance company,
as collateral agent (referred to herein as "Triple-A
Collateral Agent") pursuant to the Triple-A Credit Agreement
(as hereinafter defined). This Agreement is made in lieu of
and supersedes that certain Seawatch Plantation Title
Agreement, dated as of September 11, 1995.
W-I-T-N-E-S-S-E-T-H:
WHEREAS, Fairfield is engaged in the development of a
certain resort and recreational project known as Fairfield
SeaWatch Plantation, Horry County, South Carolina, and
certain other properties not subject hereto; and will sell
Timeshare Intervals (as hereinafter defined) and Undivided
Ownership Interests (as hereinafter defined) therein to
purchasers by way of contract agreement and installment
notes (the "Sales Contracts") whereby the purchasers are
permitted to finance the purchase price for said Timeshare
Intervals and Undivided Ownership Interests over a period of
time; and
WHEREAS, FNBB is the primary lender responsible for
financing the development of Fairfield projects and in
connection therewith has obtained a security interest in
certain Sales Contracts as security for the repayment of the
borrowings of FCI and FMB under the FCI Boston Loan
Agreement and of FAC under the FAC Boston Loan Agreement,
and FNBB has further taken underlying encumbrances against
the Property (as defined herein) and certain other
properties not subject to this Agreement as security for the
repayment of the borrowings of FCI and FMB under the FCI
Boston Loan Agreement and of FAC under the FAC Boston Loan
Agreement, which underlying encumbrances on the Property
have provisions for release for the protection of the
purchasers of Timeshare Intervals and Undivided Ownership
Interests, said releases to be given under certain
conditions as set forth therein; and
WHEREAS, FCI and FAC have entered into an arrangement
for the sale by Fairfield to FAC of certain Sales Contracts
and other receivables pursuant to a Third Amended and
Restated Operating Agreement dated as of December 9, 1994,
as amended; and
WHEREAS, FAC may from time to time hereafter sell
certain Sales Contracts to Fairfield Capital Corporation, a
Delaware corporation ("FCC") pursuant to an Amended and
Restated Receivables Purchase Agreement, dated as of July
31, 1996 (the "Triple-A Purchase Agreement"), which Sales
Contracts will in turn be pledged by FCC to the Triple-A
Collateral Agent for the benefit of itself, Triple-A One
Funding Corporation, a Delaware corporation ("Triple-A"),
and The First National Bank of Boston, as L/C Bank ("L/C
Bank"), pursuant to the Triple-A Credit Agreement (as
hereinafter defined); and
WHEREAS, FNBB will have released its lien upon and its
interest in Sales Contracts and the underlying Timeshare
Intervals and Undivided Ownership Interests as a prior
condition to their being pledged to the Triple-A Collateral
Agent; and
WHEREAS, the parties hereto are desirous of
establishing a title clearing mechanism for the purpose of
providing a convenient method of holding and conveying title
to the Property, releasing encumbrances thereon and
protecting the interests of the various parties hereto as
their interests may appear;
NOW THEREFORE, in consideration of the mutual promises
and covenants set forth herein, the parties hereto agree as
follows:
1. Definitions. For the purposes of this Agreement,
-----------
the following words and terms shall have the following
meanings unless the context clearly indicates otherwise:
FAC means Fairfield Acceptance Corporation, a
---
Delaware corporation and a wholly-owned subsidiary
of FCI, individually and in its capacity as
services under the Triple-A Credit Agreement.
FAC Boston Loan Agreement means the Third
---------------------------
Amended and Restated Revolving Credit Agreement,
dated as of September 28, 1993, between FAC and
FNBB, as amended pursuant to the First Amendment
to Third Amended and Restated Revolving Credit
Agreement, dated as of December 9, 1994, between
FAC and FNBB, and as further amended by the Second
Amendment to Third Amended and Restated Revolving
Credit Agreement, dated as of December 19, 1994,
between FAC and FNBB, as amended and in effect
from time to time.
Fairfield means FCI and FMB and such other
---------
subsidiaries as may be added to this Agreement
from time to time. The term Fairfield does not
include FAC.
FCI means Fairfield Communities, Inc., a
---
Delaware corporation.
FCI Boston Loan Agreement means the Amended
--------------------------
and Restated Revolving Credit Agreement, dated as
of September 28, 1993, among FCI, FMB, Suntree
Development Company, St. Andrews Management, Inc.,
Fairfield Suntree Realty, Inc., and FNBB, as
amended pursuant to the First Amendment to Amended
and Restated Revolving Credit Agreement, dated as
of May 13, 1994, as further amended by Consent
Waiver and Agreement, dated as of September 23,
1994, as further amended by Second Amendment to
Amended and Restated Revolving Credit Agreement,
dated as of December 9, 1994, as further amended
by Third Amendment to Amended and Restated
Revolving Credit Agreement, dated as of December
19, 1994, as further amended by Fourth Amendment
to Amended and Restated Revolving Credit
Agreement, dated as of November 20, 1995, and as
further amended by Fifth Amendment to Amended and
Restated Revolving Credit Agreement, dated as of
January 25, 1996, among FCI, FMB, and FNBB, as
amended and in effect from time to time.
FMB means Fairfield Myrtle Beach, Inc., a
---
Delaware corporation and wholly-owned subsidiary
of FCI.
FNBB means, as appropriate, The First
----
National Bank of Boston, as lender and agent for
itself and such other lenders who may hereinafter
become parties to the FCI Boston Loan Agreement,
and The First National Bank of Boston, as lender
and agent for itself and such other lenders who
may hereinafter become parties to the FAC Boston
Loan Agreement.
L/C Bank means The First National Bank of Boston,
--------
in its capacity as L/C Bank under the Triple-A Credit
Agreement.
Loan Agreement means, as appropriate, the FCI
--------------
Boston Loan Agreement, the FAC Boston Loan
Agreement or the Triple-A Credit Agreement or the
Triple-A Credit Agreement.
Mortgage means a deed of trust, deed to
--------
secure debt, vendor's lien, mortgage or any other
instrument typically considered to be a mortgage.
Operating Agreement means the Third Amended
-------------------
and Restated Operating Agreement dated as of
December 9, 1994, between FCI and FAC, as amended.
POA means any timeshare association(s)
---
organized in connection with the establishment of
the Project.
Project means the Fairfield SeaWatch
-------
Plantation project and such other projects as may
be developed by Fairfield and added to this
Agreement. The Project, as it is presently
conceived, is described in Schedule C hereto.
Property means that portion of the real
--------
property described in Schedule A attached hereto,
as amended from time to time, which has been or
will be conveyed by Fairfield to Nominee. The
Mortgages on the Property in favor of FNBB are
listed in Schedule B attached hereto, as amended
from time to time.
Purchasers means those individuals,
----------
partnerships, corporations or other entities who
have entered into a Sales Contract with Fairfield
for the purchase of a Timeshare Interval or an
Undivided Ownership Interest at the Project.
Sales Contracts means those contract
-----------------
agreements and installment notes to be entered
into between Fairfield and various Purchasers for
the purchase of a Timeshare Interval or an
Undivided Ownership Interest and for which the
total purchase price has not been paid by the
Purchaser.
Secured Party means FNBB as agent and lender
-------------
pursuant to the FCI Boston Loan Agreement and the
FAC Boston Loan Agreement or the Triple-A
Collateral Agent, as applicable.
Timeshare Intervals means those timeshare
--------------------
intervals (unit weeks) created or to be created in
the Property pursuant to regime documents filed or
to be filed creating an underlying ownership
interest which is the subject of a Sales Contract,
which ownership interest shall consist of a fixed
week in fee simple in a lodging unit or group of
lodging units at the Project.
Triple-A Collateral Agent means Capital Markets
---------------------------
Assurance Corporation, a New York Stock insurance
company, as collateral agent for the benefit of itself,
Triple-A and L/C Bank pursuant to the Triple-A Credit
Agreement.
Triple-A Credit Agreement means that certain
---------------------------
Amended and Restated Credit Agreement, dated as of July
31, 1996, by and among FAC, as servicer, FCI, FCC, as
borrower, Triple-A Collateral Agent, L/C Bank and
Triple-A, relating to loans to be made by Triple-A to
FCC.
Triple-A Timeshare Intervals means those Timeshare
----------------------------
Intervals which give rise to certain Sales Contracts
pledged, assigned and transferred to the Triple-A
Collateral Agent pursuant to the Triple-A Credit
Agreement. The Triple-A Timeshare Intervals are listed
on Schedule D attached to this Agreement and made a
part hereof, as amended from time to time.
Triple-A Undivided Ownership Interests means those
--------------------------------------
Undivided Ownership Interests which give rise to
certain Sales Contracts pledged, assigned and
transferred to the Triple-A Collateral Agent pursuant
to the Triple-A Credit Agreement. The Triple-A
Undivided Ownership Interests are listed on Schedule D
attached to this Agreement and made a part hereof, as
amended from time to time.
Undivided Ownership Interests means those
-------------------------------
undivided ownership interests created or to be
created in the Property pursuant to regime
documents filed or to be filed creating an
underlying ownership interest which is the subject
of Sales Contracts. An Undivided Ownership
Interest is that form of real property ownership
in a unit or units committed to undivided
ownership consisting of an undivided interest in
fee simple absolute as a tenant in common with all
other owners of an undivided interest in such unit
or units, whereby an owner is entitled to occupy
the same on a reservation basis and where the
owner's fractional interest is shown on the
owner's Sales Contract and deed.
2. Transfer of Property to Nominee. Fairfield, by
----------------------------------
deed or deeds from time to time, has transferred and may
continue to transfer fee simple title to Nominee to all or a
portion of the real property identified in Schedule A,
subject to those Mortgages identified in Schedule B.
Nominee agrees to acquire and hold legal title to the
Property in accordance with the terms, provisions and
conditions of this Agreement and for the benefit of
Fairfield, FAC and the related Secured Party, as their
interests may appear. Nominee shall have the right to
review all proposed conveyances to it of the real property
identified in Schedule A to assure compliance with the terms
of this Agreement. It is presently anticipated that
Property will be conveyed to Nominee as it is platted and
prior to the time that sales of Timeshare Intervals and
Undivided Ownership Interests with respect thereto are
commenced. The Project as it is presently conceived is
described in Schedule C hereto. However, the development
plans for such Project may be revised by Fairfield without
notice to or the approval of any of the other parties
hereto.
Except for the Property for which the beneficial
interest has been transferred to FCC and subsequently
pledged to the Triple-A Collateral Agent, the beneficial
interest in all Property underlying Sales Contracts conveyed
to Nominee pursuant to this Agreement shall be in Fairfield,
and at such time as the Sales Contracts are transferred to
FAC pursuant to the Operating Agreement, the beneficial
interest in the Property underlying those Sales Contracts
transferred to FAC shall pass to FAC with the transference
of said Sales Contracts. In the event FCI elects to
repurchase Sales Contracts previously transferred to FAC,
the beneficial interest in the related Property will be re-
transferred to FCI by FAC when those Sales Contracts are
transferred from FAC back to FCI, all in accordance with the
Operating Agreement. Although Nominee shall be advised of
the transference of Sales Contracts and the beneficial
interest in the Property underlying such Sales Contracts,
Nominee shall not be held liable by any party hereto for
acting in good faith on the written instruction of FCI or
FAC even though there may be a mistake as to the proper
owner of the beneficial interest in the Property underlying
the Sales Contracts.
3. Title Ownership and Responsibility of Nominee.
---------------------------------------------
(a) Nominee acknowledges that notwithstanding the
fact that it will be the record owner of the fee simple
title to the Property, its ownership is subject in all
respects to the provisions of this Agreement, those
Mortgages identified on Schedule B hereto, and the terms and
conditions of the Loan Agreements. Nominee further
acknowledges that it holds fee simple title to the Property
for the benefit of the parties hereto and shall have no
equitable rights in the Property nor any right to the income
or profits to be derived therefrom.
(b) Nominee's function and responsibility during
the existence of this Agreement will be to (i) hold record
title to the Property for the benefit of the other parties
hereto; (ii) convey title as directed upon the written
request of Fairfield or FAC, as applicable, as the
beneficial owner at such time, and, if applicable, as
servicer under the Triple-A Credit Agreement, except as
provided by Section 12 hereof; (iii) contemporaneously with
the conveyancing of any of the Property that qualifies for
deeding in accordance with the terms of the Sales Contracts,
pursuant to authorization from the related Secured Party as
set forth herein, cause with respect to such Property the
Secured Party's underlying Mortgage, if any, to be released
of record; (iv) where requested by Fairfield or a Purchaser,
as the case may be, cause to be issued a title insurance
policy to the Purchaser provided all title requirements are
properly met and the appropriate premium has been paid; and
(v) execute such instruments as required to be executed
pursuant to Sections 11 and 13 hereof. Nominee may
authorize any third party, including any employee of
Fairfield or FAC, by power of attorney, to execute any
instrument required by this Section 3(b).
(c) Except to the extent expressly permitted
herein, Nominee shall have no discretionary authority
whatsoever to exercise any control over the Property.
(d) Except as set forth in Section 3(b), Nominee
agrees that it will do nothing which will in any way impair,
encumber or otherwise adversely affect in any manner the
title to the Property.
(e) Nominee shall have no duties and
responsibilities other than those set forth herein, and it
shall act only at the direction of the parties hereto solely
in accordance with the terms hereof. Fairfield, FAC and
each Secured Party hereby expressly do not delegate any
discretionary duties and responsibilities to Nominee as are
often times associated with a trustee acting pursuant to the
terms and provisions of a trust agreement.
4. Responsibility of Fairfield or FAC Relating to
--------------------------------------------------
Conveyances by Nominee.
- ----------------------
(a) Fairfield shall cause any construction or
vendor's lien or blanket encumbrance, if any (other than
FNBB's Mortgages) to be released and shall be responsible
for paying release prices to the proper party as necessary
to secure the release of the Property to be conveyed as
provided herein.
(b) Fairfield or FAC, as the case may be, shall
prepare all such deeds, releases, assignments and other
documents as may be necessary to carry out the purposes of
this Agreement and to cause revenue stamps or transfer tax
stamps to be properly affixed as necessary to satisfy
recording requirements, and shall cause all recording fees
to be paid and all necessary instruments to be recorded in
the appropriate real estate records. Fairfield and FAC
agree that each will maintain all records necessary to
identify beneficial ownership of the Property.
(c) Fairfield or FAC, as the case may be, shall
be responsible for advising Nominee and the related Secured
Party of all assignments of the Sales Contracts and
underlying beneficial interests and all conveyances of the
Property by furnishing copies of all such assignments and
conveyances to Nominee and to such Secured Party. Such
assignments shall take the form of a "Document of Sale and
Assignment of Beneficial Interest" or a "Document of Pledge
and Assignment of Beneficial Interest", which shall identify
those Sales Contracts and the underlying Property giving
rise to such Sales Contracts to be assigned or conveyed.
Nominee shall be entitled to rely upon such "Documents of
Sale and Assignment of Beneficial Interest" and "Documents
of Pledge and Assignment of Beneficial Interest" in
determining beneficial ownership of the Property.
(d) FCC will provide to Nominee on Contract Grant
Dates (as defined in the Triple-A Credit Agreement), if any,
occurring after the Effective Restatement Date (as defined
in the Triple-A Credit Agreement) copies of releases and
assignments evidencing (i) FNBB's release of its lien upon
and its interest in the Triple-A Timeshare Intervals or the
Triple-A Undivided Ownership Interests and the related Sales
Contracts, (ii) the transfer of all beneficial interest in
the Triple-A Timeshare Intervals or the Triple-A Undivided
Ownership Interests and the related Sales Contracts from FAC
to FCC pursuant to the Triple-A Purchase Agreement and (iii)
the pledge and assignment of the Triple-A Timeshare
Intervals or the Triple-A Undivided Ownership Interests and
the related Sales Contracts from FCC to the Triple-A
Collateral Agent pursuant to the Triple-A Credit Agreement.
Upon receipt by the Nominee of any such future releases and
assignments, Schedule D shall automatically be deemed to be
updated to include the Triple-A Timeshare Intervals and the
Triple-A Undivided Ownership Interests covered by such
releases and assignments, and Nominee shall be entitled to
rely upon such releases and assignments in determining
beneficial ownership of the Triple-A Timeshare Intervals and
the Triple-A Undivided Ownership Interests covered thereby.
FAC, as servicer under the Triple-A Credit Agreement,
or the Triple-A Collateral Agent shall provide Nominee with
copies of any future assignments from Triple-A Collateral
Agent to FCC, FAC or FCI, as applicable, of beneficial
interest in the Triple-A Timeshare Intervals or Triple-A
Undivided Ownership Interests, which assignments shall be in
the form of a certificate and shall identify the Triple-A
Timeshare Intervals and the Triple-A Undivided Ownership
Interests and related Sales Contracts assigned thereby. To
be effective, any such assignment submitted to Nominee by
FAC shall be accompanied by an approval, in writing, of the
Triple-A Collateral Agent. Upon receipt by the Nominee of
any such certificates, (i) Schedule D shall automatically be
deemed to be updated to exclude the Triple-A Timeshare
Intervals and the Triple-A Undivided Ownership Interests
covered by such certificates, (ii) Nominee shall be entitled
to rely upon such certificates in determining beneficial
ownership of the Triple-A Timeshare Intervals and the
Triple-A Undivided Ownership Interests covered thereby and
(iii) the beneficial ownership of the Triple-A Timeshare
Intervals and the Triple-A Undivided Ownership Interests
covered by such certificates shall be presumed to be in FCI
or FAC, as applicable, and subject to the lien of FNBB under
the Mortgages on Schedule B.
5. Conveyance and Release of Property.
----------------------------------
(a) At such time as a Purchaser has paid in full
the purchase price or the requisite percentage of the
purchase price for deeding pursuant to a Sales Contract,
and/or has otherwise fully discharged all of the Purchaser's
obligations and responsibilities required to be discharged
as a condition to deeding, including the payment of all POA
dues and assessments, Fairfield or FAC, as applicable, as
the beneficial owner, or as servicer for a Secured Party
which is the beneficial owner, of the security interest in
the underlying Property with respect to such Sales Contract
at such time, shall notify the related Secured Party(s) and
shall direct Nominee in writing to immediately cause to be
released the related Secured Party(s)' underlying
Mortgage(s) with respect to such Property, unless otherwise
directed in writing by the related Secured Party(s) pursuant
to Section 12 hereof, and forthwith shall deliver and record
a properly executed Warranty Deed or Special Warranty Deed
(with documentary stamps and recording fees to be paid by
Fairfield or FAC, as the case may be) conveying fee simple
title to the Timeshare Interval or Undivided Ownership
Interest covered by such Sales Contract to the Purchaser.
Within a reasonable time following the delivery of the
Warranty Deed or Special Warranty Deed to Purchaser, a title
insurance policy shall also be delivered (provided the
Purchaser has paid for such in connection with his purchase
of the Property involved).
(b) Unless directed otherwise by a Secured Party
pursuant to Section 12 hereof (or otherwise), each Secured
Party hereby authorizes and appoints Nominee as its agent to
release such Secured Party's underlying Mortgage(s) against
any Property upon receipt by Nominee of a written request
for deeding by Fairfield or FAC, together with a
certification by an authorized officer of FCI or FAC stating
that all the conditions to the release from the Mortgage or
Mortgages encumbering such Property have been satisfied.
Each Secured Party further agrees to execute any additional
documents as may be necessary to be filed of record in order
to verify Nominee's authority to release such Secured
Party's Mortgage(s) as provided herein.
(c) All payments made by Purchasers pursuant to
the terms of their Sales Contract shall be made directly to
Fairfield or FAC, as the case may be, for the benefit of the
relevant Secured Party, if any, pursuant to the terms of the
related Loan Agreement. No payments are to be received by
Nominee.
6. Default by Purchaser. Where a Purchaser has
----------------------
recorded his/her Sales Contract and the Purchaser defaults
and otherwise refuses to reconvey legal or equitable title
to Nominee, Nominee shall assign the recorded Sales Contract
to FCI or FAC (as applicable, as the beneficial owners of
such recorded Sales Contract), or, if applicable, as
servicer for a Secured Party pursuant to the terms of the
related Loan Agreement, for foreclosure or other appropriate
action. Subject to the provisions of Section 12 hereof,
Nominee may rely on the written request of FCI or FAC, as
applicable, in regard to the assignment of said recorded
Sales Contract.
7. POA Voting Rights. Voting rights in any POA which
-----------------
may inure to the benefit of Nominee as legal title holder to
Property shall be assigned by Nominee to FCI or, at the
option of FCI, FCI may require an irrevocable proxy be
delivered unto it by Nominee so that FCI may continue to
exercise all such voting rights.
8. Warranty as to Title. Fairfield represents and
----------------------
warrants unto Nominee that it will transfer fee simple title
to the Property to Nominee, and that its deed(s) of
conveyance to Nominee will convey to said Nominee title
subject only to (i) condominium restrictions, covenants,
etc., including timeshare declarations, (ii) road rights of
way and easements, (iii) utility easements, (iv) the rights
of Purchasers who have previously entered into Sales
Contracts, (v) those Mortgages identified on Schedule B
attached hereto, (vi) such other miscellaneous restrictions,
covenants and Mortgages as those enumerated above, and
(vii) the terms of this Agreement.
9. [RESERVED]
10. Indemnification. Fairfield and FAC jointly and
---------------
severally agree to indemnify and hold harmless Nominee from
any and all claims, demands, actions or causes of action in
any way relating to or arising out of the record ownership
of the Property or out of the good faith discharge by
Nominee of any of the terms and conditions of this
Agreement, including all costs and expenses of any nature
that Nominee may incur. Each Secured Party shall indemnify
and hold harmless Nominee from any and all claims, demands,
actions or causes of action, including all costs and
expenses of any nature that Nominee may incur in connection
therewith, which relate to or arise out of any action or
failure to act of Nominee, which action or inaction was in
good faith pursuant to and in reliance upon written
instructions from such Secured Party to Nominee. With
respect to actions related to particular portions of the
Property, the parties hereto expressly acknowledge that
Nominee shall be entitled to rely upon the written
instructions of Fairfield, FAC or the Secured Party which
has a first position lien on such Property as set forth
herein and in the Schedules hereto, and Nominee shall have
no liability for any action taken in good faith in such
reliance. Fairfield or FAC, as the case may be, shall
reimburse Nominee for all costs, fees and expenses incurred
by it relating to its serving as Nominee under the terms and
provisions of this Agreement. It is the intent of the
parties to insure that Nominee shall incur no liability
whatsoever in connection with the good faith performance of
its functions under this Agreement, and in connection
therewith, all parties hereto release and waive any claims
they may have against Nominee which may result from the
performance in good faith by Nominee of its responsibility
under this Agreement.
11. Mortgages, Platting and Reconveyance of the
--------------------------------------------------
Property. Subject to the provisions of Section 12 hereof,
- --------
upon written request of Fairfield, Nominee shall, except as
to such Property as Fairfield may have previously assigned
or transferred beneficial interest, reconvey all or any
portion of the Property to Fairfield, subject to the
Mortgages listed in Exhibit B, for the purpose of granting
construction Mortgages or for any other purpose for which
Fairfield may require legal title; and further, Nominee
agrees to execute such Mortgages covering such Property, as
requested in writing by Fairfield, to any Secured Party or
such third parties as Fairfield may direct. Nominee further
agrees to execute any and all documents, including plats,
covenants and restrictions, as may be necessary to add
and/or revise existing or new subdivisions.
12. Default Under Loan Agreements. In the event of
-------------------------------
default by Fairfield, FAC or FCC, under any of the Loan
Agreements, the related Secured Party shall notify Nominee
in writing of such event at such time as notice of such
default is given to Fairfield, FAC, or FCC, as the case may
be, which writing shall identify the Property or portion
thereof covered by the related Secured Party's Mortgage or
giving rise to Sales Contracts relating to the defaulted
Loan Agreement, as applicable, and may further instruct
Nominee that, with respect to such Property, Nominee shall
act only upon the written instructions of the related
Secured Party, whereupon Nominee shall only take action with
respect to the related Property identified in the notice,
notwithstanding instructions of Fairfield, FAC, or FCC, to
the contrary, as directed by the related Secured Party.
The receipt of any notice of default shall relate
only to the specific Loan Agreement identified therein. As
to all other Loan Agreements, Nominee shall continue to act
upon the written request of Fairfield, FAC, FNBB and the
Triple-A Collateral Agent, as the case may be, as to the
Property relating thereto.
Any notice of default given Nominee pursuant to
this Section 12 shall be mailed by first class mail, postage
prepaid, return receipt rested, to the following address:
Lawyers Title Insurance Corporation
600 North Pearl Street, Suite 700
Lockbox 185
Dallas, TX 75201
Attn: Michael E. Hastings
In no event shall Nominee have any responsibility
for preparation of documents referred to in Section 4(b) of
this Agreement. As to Property relating to any defaulted
Loan Agreement, said documents shall be prepared by the
related Secured Party or its designee.
13. Provisions Related to Pooling/Pledge/Sale
----------------------------------------------
Agreements. Notwithstanding anything herein to the contrary
- ----------
and specifically notwithstanding the provisions of
Section 3(a) hereof, the interest in Properties related to
the Triple-A Undivided Ownership Interests and the Triple-A
Timeshare Intervals granted the Triple-A Collateral Agent by
this Agreement and the Triple-A Credit Agreement are hereby
deemed superior and senior to any and all interests granted
pursuant to the Mortgages listed in Schedule B hereto. The
parties hereto acknowledge that Nominee holds title to the
Triple-A Undivided Ownership Interests and the Triple-A
Timeshare Intervals for the benefit of the Triple-A
Collateral Agent and the purchasers of the Triple-A
Undivided Ownership Interests and the Triple-A Timeshare
Intervals, subject only to the terms and conditions of the
Triple-A Credit Agreement and the related Sales Contracts,
respectively. The Nominee shall not transfer, pledge or
assign the Triple-A Undivided Ownership Interests or the
Triple-A Timeshare Intervals except as expressly provided
herein. The provisions of this paragraph, however, shall
not apply to any Triple-A Undivided Ownership Interests and
Triple-A Timeshare Intervals that may be granted the Triple-
A Collateral Agent by this Agreement and the Triple-A Credit
Agreement on Contract Grant Dates (as defined in the Triple-
A Credit Agreement), if any, occurring after the Effective
Restatement Date (as defined in the Triple-A Credit
Agreement), until releases and assignments covering such
Property have been delivered to the Nominee in accordance
with the requirements of Section 4(d) hereof.
14. Miscellaneous.
-------------
(a) This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their
successors and assigns. This Agreement constitutes the
entire understanding and agreement between the parties with
respect to the subject matter hereof and may not be changed
or modified orally but only by instrument in writing signed
by the party against which enforcement of such change or
modification is sought.
(b) This instrument shall be construed in
accordance with and governed by the laws of the State of
Arkansas. In the event any clause or provision of this
Agreement is declared to be invalid, the invalidity of any
such clause or provision shall not affect the remaining
clauses and provisions of this Agreement which shall remain
in full force and effect.
(c) No party may make an assignment of its
interest in this Agreement without obtaining the written
consent of the other parties hereto; provided, however, that
to the extent permitted by the FCI Boston and FAC Boston
Loan Agreements and the Triple-A Credit Agreement,
respectively, FNBB and the Triple-A Collateral Agent may be
replaced or succeeded as parties to this Agreement without
the consent of the other parties hereto. The parties
further agree to execute additional documents as may be
necessary to carry out the purposes of this Agreement and
protect the interests of all parties hereto.
15. Amendment/Termination.
---------------------
(a) This Agreement may be amended from time to
time for the purpose of adding additional parties and
revising the terms herein; provided, however, no such
amendment shall be effective until all parties hereto have
agreed in writing to such revisions.
(b) This Agreement may also be amended for the
purpose of identifying and segregating a separate pool of
Sales Contracts, and the Timeshare Intervals and/or
Undivided Ownership Interests relating thereto, which are to
be sold or pledged pursuant to a pooling, sale or pledge
agreement, by an instrument in writing signed by Fairfield,
FAC, Nominee and FNBB. Any amendment undertaken pursuant to
this paragraph 15(b) shall not relate to or affect Undivided
Ownership Interests or Timeshare Intervals listed on
Schedule D attached hereto, nor shall it in any way impair
or amend the rights of the Triple-A Collateral Agent under
this Agreement. An executed copy of any Amendment
undertaken pursuant to this paragraph 15(b) shall be
provided to all parties to this Agreement.
(c) This Agreement shall be terminable by any
party hereto by giving sixty (60) days written notice to all
other parties of its desire to so terminate. The election
by any party other than Fairfield or FAC to terminate will
not terminate this Agreement with respect to the remaining
parties; provided the remaining parties shall cause to be
substituted a successor party in place of the terminating
party. Upon termination, title to the Property shall be
conveyed by Nominee in accordance with the written
instructions of Fairfield, FAC, or the Triple-A Collateral
Agent, as the case may be; except if Nominee has been
notified by a Secured Party in writing that any of
Fairfield, FAC, or FCC are in default under a Loan
Agreement, as described more fully in Section 12 of this
Agreement, Nominee shall convey title to the Property
underlying the defaulted Loan Agreement in accordance with
the written instructions of the related Secured Party and
first lienholder with respect thereto. In any event, this
Agreement shall terminate, if not sooner terminated, on
January 1, 2010.
16. Notice. Notice under this Agreement shall be
------
given to the parties at the following addresses, or at such
other address as shall be designated by a party in a written
notice to the other parties:
Lawyers Title Insurance Corporation
-----------------------------------
Michael Hastings Riker Purcell
Lawyers Title Insurance Lawyers Title Insurance
Corporation Corporation
600 North Pearl Street, Suite 700 6630 West Broad Street
Lockbox 185 Richmond, VA 23230
Dallas, TX 75201 (804) 281-6876
(214) 720-7600 Fax: (804) 282-5453
Fax: (214) 658-9201
Fairfield Communities, Inc.,
Fairfield Myrtle Beach, Inc.,
and Fairfield Acceptance Corporation
------------------------------------
Marcel Dumeny Gordon Wilbourn
Fairfield Communities, Inc. Rose Law Firm,
2800 Cantrell Road a Professional Association
Little Rock, AR 72202 120 East Fourth Street
(501) 664-6000 Little Rock, AR 72201
Fax: (501) 660-7196 (501) 377-0332
Fax: (501) 375-1309
The First National Bank of Boston
----------------------------------
Linda J. Carter Marcia Robinson
The First National Bank Richard Toelke
of Boston Bingham, Dana & Gould
115 Perimeter Center Place, N.E. 150 Federal Street
Suite 500 Boston, MA 02110
Atlanta, GA 30346 (617) 951-8830
(770) 390-6500 Fax: (617) 951-8736
Fax: (770) 390-8434
Capital Markets Assurance Corporation
-------------------------------------
885 Third Avenue, 14th Floor Counsel:
New York, NY 10022 Marc D. Wassermann, Esq.
Attn: Head of Exposure Sidley & Austin
Management 1722 Eye Street
(212) 891-8806 Washington, D.C. 20006
Telecopy: (212) 755-5462 (202)736-8000
Telecopy: (202)736-8711
Notice to each of the aforementioned parties shall
be given by Nominee if either Fairfield or FAC should
default in the performance of any of their respective
obligations under this Agreement.
17. Execution. This Agreement may be executed in one
---------
or more counterparts, all of which shall constitute one and
the same instrument.
[THIS SPACE INTENTIONALLY LEFT BLANK]
DATED as of the date first above written.
FAIRFIELD COMMUNITIES, INC.;
/s/Dawn Peoples By: /s/Robert w. Howeth
- ----------------------------- -------------------------------
Witness Title: Senior Vice President
----------------------------
FAIRFIELD MYRTLE BEACH, INC.
/s/Dawn Peoples By: /s/Robert W. Howeth
- ----------------------------- -------------------------------
Witness Title: Vice President
----------------------------
FAIRFIELD ACCEPTANCE CORPORATION
/s/Dawn Peoples By: /s/Robert W. Howeth
- ----------------------------- -------------------------------
Witness Title: President
---------------------------
LAWYERS TITLE INSURANCE CORPORATION
/s/Sherry D. Adkison By: /s/Randall E. Cox
- ----------------------------- -------------------------------
Witness Title: Senior Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender pursuant to the
FCI Boston Loan Agreement
/s/Paula C. Anderson By: /s/Linda J. Carter
- ----------------------------- -----------------------------
Witness Title: Vice President
--------------------------
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender pursuant to the
FAC Boston Loan Agreement
/s/Paula C. Anderson By: /s/Linda J. Carter
- ---------------------------- ----------------------------
Witness Title: Vice President
-------------------------
CAPITAL MARKETS ASSURANCE
CORPORATION, as Triple-A Collateral
Agent
/s/John Fletcher By: /s/Philip Theoharides
- --------------------------- ----------------------------
Witness Title: Vice President
-------------------------
LIST OF SCHEDULES
-----------------
Schedule A: Property That May Be Conveyed To Nominee
Schedule B: Mortgages
Schedule C: Project Description
Schedule D: Triple-A Timeshare Intervals and Triple-A
Undivided Ownership Interests
SCHEDULE A
----------
PROPERTY THAT MAY BE CONVEYED TO NOMINEE
All that certain piece, parcel or tract of land situate, lying
and being in the County of Horry, State of South Carolina, and
more particularly described as a 10.06 tract known as Blocks D
and E, Arcadian Shores, North of Myrtle Beach, as shown on that
map prepared for Myrtle Beach Hotel Developers, Inc. by Robert L.
Bellamy & Associates, Inc., dated March 1, 1995 and revised March
23, 1995 and recorded in the office of the RMC for Horry County
in Plat Book 134, Page 74. For a more complete and particular
description of the property, reference is hereby made to the
above referred to plat and record thereof.
SCHEDULE B
----------
MORTGAGES
Fairfield Mortgage:
- ------------------
Mortgage, Mortgage Rider, Security Agreement and Financing Statement,
dated as of ________________, 1995, among FMB and FNBB and recorded on
__________________, 1995 in Mortgage Book _____, Page _____ in the office
of Mense Conveyances for Horry County, South Carolina.
FAC Mortgage:
- ------------
Mortgage, Mortgage Rider, Security Agreement and Financing Statement,
dated as of ________________, 1995, among FAC and FNBB and recorded on
__________________, 1995 in Mortgage Book _____, Page _____ in the office
of Mense Conveyances for Horry County, South Carolina.
SCHEDULE C
----------
PROJECT DESCRIPTION
A. Description of Property. The Property is located in Horry
------------------------
County, South Carolina, and is described in more detail under paragraph D
below.
B. Description of Buildings. The Project will consist initially of
-------------------------
one (1) Building, depicted and designated on the Phase IA Plat and Plans as
"Building 1". Said Building, as more fully shown on the Phase IA Plat and
Plans, shall be constructed on concrete columns.
C. Identification and Description of Units. Type A Units shall
-----------------------------------------
contain approximately 1,295 square feet of interior space, Type B Units
shall contain approximately 1,002 square feet of interior space and Type C
Units shall contain approximately 705 square feet of interior space, all as
more fully shown on the Phase IA Plat and Plans. For purposes of
identification, each Unit bears a different identifying number ("Unit
Number") and no Unit in the Project shall bear the same Unit Number. Each
Unit Number and Unit Type in Building 1 shall be designated as follows:
Unit Number Unit Type
201, 301, 401 C
202, 302, 402 B
203, 303, 403 B
204, 304, 404 B
205, 305, 405 B
206, 306, 406 C
207, 307, 407 A
D. Real Property Description. BEING a parcel of land situated in
--------------------------
Dogwood Neck Township, Horry County, South Carolina and more particularly
described as follows:
COMMENCING at a 1/2 inch iron pipe located at the southeast corner of the
intersection of Lake Shore Drive and Hilton Road in the Arcadian Shores
Section north of Myrtle Beach and said iron pipe being the northeast corner
of a 10.06 acre parcel of land shown on a map prepared by Powell Associates
of NMB, Inc. of the SeaWatch Plantation Horizontal Property Regime Boundary
Survey dated July 14, 1995 and also being the same 10.06 acre parcel shown
on a map prepared by Powell Associates of NMB, Inc. that is recorded in
Plat Book 135 at Page 77 in the office of the Register of Mense Conveyance
for Horry County; thence from said iron pipe along the southern right-of-
way line of Lake Shore Drive S.5401'40"W. 24.64 feet to a 1/2 inch iron
pipe at the beginning of a curve to the right, said curve has a radius of
931.42 feet and a chord that has a bearing of S.58 19'10"W. and a length of
143.51 feet; thence along the arc of said curve 143.65 feet to a 1/2 inch
iron rebar, the POINT OF BEGINNING; thence leaving the right-of-way of Lake
Shore Drive S.27 15'44"E. 27.79 feet to a 1/2 inch iron rebar; thence
S.34 44'19"E. 198.39 feet to a 1/2 inch iron rebar; thence S.35 51'22"E.
159.91 feet to a 1/2 inch iron rebar; thence S.21 02'11"W. 60.84 feet to a
1/2 inch iron rebar; thence S.68 10'48"W. 62.17 feet to a 1/2 inch iron
rebar; thence N.35 51'22"W. 172.01 feet to a 1/2 inch iron rebar; thence
N.41 35'22"W. 267.50 feet to a 1/2 inch iron rebar in a curve in the
southern right-of-way line of Lake Shore Drive, and said curve has a radius
of 931.42 feet and a chord that has a bearing of N.67 21'23"E. and a length
of 150.00 feet; thence along the arc of said right-of-way line 150.17 feet
to the POINT OF BEGINNING and containing 1.16 acres more or less. All
bearings quoted herein are based on South Carolina State Plane Grid (NAD
'83) and all distances quoted are horizontal ground distances, not grid
distances.
ACCESS AND MAINTENANCE EASEMENT
PHASE 1A
BEGINNING at a 1/2 inch iron rebar in the southern right-of-way line of
Lake Shore Drive and said rebar being the northeast corner and POINT OF
BEGINNING of Phase 1A described above; thence along the eastern line of
Phase 1A S.27 15'44"E. 27.79 feet to a 1/2 inch iron rebar; thence
S.34 44'19"E. 90.50 feet to a point; thence leaving the eastern line of
Phase 1A S.54 10'48"W. 36.38 feet to a point; thence N.35 49'12"W. 90.00
feet to a point; thence S.77 01'14"W. 21.55 feet to a point; thence
N.24 12'18"W. 30.39 feet to a point in a curve in the southern right-of-way
line of Lake Shore Drive and said curve has a radius of 931.42 feet and a
chord that has a bearing of N.64 29'15"E. and a length of 56.88 feet;
thence along the arc of said right-of-way line in a northeasterly direction
56.89 feet to the BEGINNING and containing 0.12 acres more or less and
being a portion of the 1.16 acres of Parcel 1A described above. All
bearings quoted herein are based on South Carolina State Plane Grid (NAD
'83) and all distances are horizontal ground distances, not grid distances.
Schedule D
----------
Triple-A Timeshare Intervals and
Triple-A Undivided Ownership Interests
None
THIRD AMENDED AND RESTATED
SUPPLEMENTARY TRUST AGREEMENT
(ARIZONA)
This Third Amended and Restated Supplementary Trust
Agreement is made and entered into as of March 28, 1995, by
and among Fairfield Communities, Inc., a Delaware
corporation (referred to herein as "FCI"); Fairfield
Acceptance Corporation, a Delaware corporation and
wholly-owned subsidiary of FCI (referred to herein as
"FAC"); First American Title Insurance Company, a California
corporation (referred to herein as "Trustee"); The First
National Bank of Boston, Boston, Massachusetts (hereinafter
defined as "FNBB"), as agent and lender to FCI pursuant to
the FCI Boston Loan Agreement (as hereinafter defined);
FNBB, as agent and lender to FAC pursuant to the FAC Boston
Loan Agreement (as hereinafter defined); First Commercial
Trust Company, N.A., Little Rock, Arkansas, as trustee
(referred to herein as "1993-A Trustee), pursuant to the
1993-A Pledge Agreement (as hereinafter defined); and
Capital Markets Assurance Corporation, a New York Stock
insurance company, as collateral agent (referred to herein
as "1995 Collateral Agent"), pursuant to the 1995 Credit
Agreement (as hereinafter defined). This Agreement is made
in lieu of and supersedes that certain Second Amended and
Restated Supplementary Trust Agreement dated as of September
1, 1992, as amended, by and among certain of the parties
hereto, which agreement is hereby canceled.
W I T N E S S E T H:
WHEREAS, FCI is engaged in the development of a certain
resort and recreational project known as Fairfield
Continental Country Club Estates, Coconino County, Arizona,
and certain other properties not subject hereto; and has
sold and continues to sell Intervals (as hereinafter
defined) to purchasers by way of contract agreement and
installment notes ("Sales Contracts") whereby the purchaser
is permitted to finance the purchase price for said
Intervals over a period of time; and
WHEREAS, FNBB, both individually and as agent pursuant
to the FCI Boston Loan Agreement and the FAC Boston Loan
Agreement, is the primary lender responsible for financing
the development of FCI projects and in connection therewith
has obtained a security interest in certain Sales Contracts
as security for the repayment of the borrowings of FCI under
the FCI Boston Loan Agreement and of FAC under the FAC
Boston Loan Agreement, and FNBB, both individually and as
agent, has further taken underlying encumbrances against
certain of the Properties (as hereinafter defined) and
certain other properties not subject to this Agreement at
the various FCI projects as security for repayment of the
borrowings of FCI under the FCI Boston Loan Agreement and of
FAC under the FAC Boston Loan Agreement, which underlying
encumbrances on the Properties have provisions for release
for the protection of the purchasers of Intervals, said
releases to be given under conditions as set forth therein;
and
WHEREAS, FCI and FAC have entered into arrangements for
the sale by FCI to FAC of certain Sales Contracts and other
receivables pursuant to a Third Amended and Restated
Operating Agreement dated as of December 9, 1994, as
amended; and
WHEREAS, FAC has sold certain Sales Contracts to
Fairfield Funding Corporation, a Delaware corporation
(referred to herein as "FFC"), which Sales Contracts have in
turn been pledged by FFC to the 1993-A Trustee pursuant to
the 1993-A Pledge Agreement; and
WHEREAS, FAC has sold certain Sales Contracts to
Fairfield Capital Corporation, a Delaware corporation
(referred to herein as "FCC"), pursuant to a Receivables
Purchase Agreement, dated as of March 28, 1995 (the "1995
Purchase Agreement") which Sales Contracts have in turn been
pledged by FCC to the 1995 Collateral Agent for the benefit
of itself and Triple-A One Funding Corporation, a Delaware
corporation (referred to herein as "Triple-A"), pursuant to
the 1995 Credit Agreement; and
WHEREAS, FNBB, both individually and as agent, has
released its lien upon and its interest in (i) the Sales
Contracts and the underlying Intervals pledged to the 1993-A
Trustee and (ii) the Sales Contracts and the underlying
Intervals pledged to the 1995 Collateral Agent; and
WHEREAS, the parties hereto are desirous of
establishing a title clearing mechanism for the purpose of
providing a convenient method of holding and conveying title
to the Properties, releasing encumbrances thereon and
protecting the interest of the various parties hereto as
their interest may appear;
NOW THEREFORE, in consideration of the mutual promises
and covenants set forth herein, the parties hereto agree as
follows:
1. Definitions. For the purposes of this Agreement
-----------
the following words and terms shall have the following
meanings unless the context clearly indicates otherwise:
1995 Collateral Agent means Capital Markets Assurance
----------------------
Corporation, a New York Stock insurance company, as
collateral agent for the benefit of itself and Triple-A
pursuant to the 1995 Credit Agreement.
1995 Credit Agreement means that certain Credit
-----------------------
Agreement dated as of March 28, 1995, by and among FAC, as
servicer, FCI, FCC, as borrower, 1995 Collateral Agent, as
collateral agent, and Triple-A, relating to loans to be made
by Triple-A to FCC.
FAC means, as appropriate, Fairfield Acceptance
---
Corporation, individually or in its capacity as servicer
under the 1993-A Pledge Agreement or the 1995 Credit
Agreement.
FAC Boston Loan Agreement means the Third Amended and
--------------------------
Restated Revolving Credit Agreement dated September 28,
1993, as amended, by and between FAC and FNBB, as agent and
lender.
FCC means Fairfield Capital Corporation, a Delaware
---
corporation.
FCI means Fairfield Communities, Inc., a Delaware
---
corporation.
FCI Boston Loan Agreement means the Amended and
-----------------------------
Restated Revolving Credit Agreement dated September 28,
1993, as amended, by and between FCI, Fairfield Myrtle
Beach, Inc., and FNBB and its past, present and future
participants.
FFC means Fairfield Funding Corporation, a Delaware
---
corporation.
FNBB means, as appropriate, The First National Bank of
----
Boston as lender and agent for itself and such other lenders
who may hereinafter become parties to the FCI Boston Loan
Agreement, and The First National Bank of Boston, as lender
and agent for itself and such other lenders who may
hereinafter become parties to the FAC Boston Loan Agreement.
Intervals means those timeshare intervals created or to
---------
be created in the Properties conveyed to Trustee in
connection herewith, as more fully set forth in Schedule A
attached hereto and made a part hereof, as amended from time
to time, and all such Properties subsequently conveyed to
Trustee in the continuance of this Agreement. Intervals are
created in the Properties pursuant to the filing of regime
documents creating an underlying ownership interest which is
the subject of a Sales Contract, which ownership interest
shall consist of a fixed week or undivided interest in fee
simple in a lodging unit or group of lodging units at a
Project.
1995 Intervals means those Intervals which give rise to
--------------
certain Sales Contracts pledged, assigned and transferred to
the 1995 Trustee pursuant to the 1995 Pledge Agreement. The
1995 Trust Intervals are listed on Schedule D attached to
this Agreement and made a part hereof, as amended from time
to time.
Loan Agreement means, as appropriate, (i) the FCI
---------------
Boston Loan Agreement, (ii) the FAC Boston Loan Agreement
(iii) the 1993-A Pledge Agreement, or (iv) the 1995 Credit
Agreement.
Mortgage means a deed of trust, deed to secure debt,
--------
vendor's lien, mortgage or any other instrument typically
considered to be a mortgage.
Operating Agreement means the Third Amended and
--------------------
Restated Operating Agreement dated as of December 9, 1992,
between FCI and FAC, as amended.
1993-A Pledge Agreement means that certain Pledge and
------------------------
Servicing Agreement dated as of September 28, 1993, by and
among FAC, as Servicer, FFC as Issuer, 1993-A Trustee, as
Trustee, and Texas Commerce Trust, as Standby Servicer,
relating to the issuance by FFC of certain Interval
Ownership and Lot Contract Pay-Through Notes, Series 1993-A.
POA means timeshare associations organized in
---
connection with the establishment of timesharing
developments at the Project and other property owners
associations, including but not limited to Continental
Country Club and Estates ("CCCE"), a non-profit Arizona
corporation, which may have been organized in connection
with the platting or subdividing of vacant lots at the
Project.
Project means the recreational/retirement community
-------
commonly referred to as Fairfield Continental Country Club
Estates, located in Flagstaff, Arizona, being developed by
Fairfield.
Properties means those Intervals located on the
----------
properties listed in Schedule A attached hereto, as amended
from time to time. The Mortgages on the Properties in favor
of FNBB, both individually and as agent pursuant to the FCI
Boston Loan Agreement and the FAC Boston Loan Agreement, are
listed in Schedule B attached hereto, as amended from time
to time.
Purchasers means those individuals, partnerships,
----------
corporations or other entities who have entered into a Sales
Contract with FCI for the purchase of an Interval at the
Project.
Sales Contracts means those contract agreements and
----------------
installment notes, including promissory notes secured by
Mortgages, heretofore entered into and hereinafter to be
entered into between FCI and various Purchasers for the
purchase of an Interval and for which the total purchase
price has not been paid by the Purchaser.
Secured Party means FNBB, as agent and lender under the
-------------
FCI Boston Loan Agreement and the FAC Boston Loan Agreement,
the 1993-A Trustee or the 1995 Collateral Agent, as
applicable.
Triple-A means Triple-A One Funding Corporation, a
--------
Delaware corporation.
1993-A Trustee means First Commercial Trust Company,
---------------
N.A., Little Rock, Arkansas, as trustee under the 1993-A
Pledge Agreement.
1993-A Trust Intervals means those Intervals which give
----------------------
rise to certain Sales Contracts pledged, assigned and
transferred to the 1993-A Trustee pursuant to the 1993-A
Pledge Agreement. The 1993-A Trust Intervals are listed on
Schedule C attached to this Agreement and made a part
hereof, as amended from time to time.
2. Transfer of Properties to Trustee. FCI, by deed
----------------------------------
or deeds, has transferred fee simple title to the Properties
identified on Schedule A to Trustee, subject to those
Mortgages identified on Schedule B and further subject to
existing executed and unrecorded Mortgages from Purchasers.
Trustee agrees to acquire and hold legal title to said
Properties in accordance with the terms, provisions and
conditions of this Agreement and for the benefit of FCI, FAC
and the related Secured Party, as their interests may
appear. Except for those Properties in which the beneficial
interest has been pledged to the 1993-A Trustee or the 1995
Collateral Agent, the beneficial interest in all the
Properties underlying Sales Contracts conveyed to Trustee
pursuant to this Agreement shall be in FCI, and at such
time as the Sales Contracts are transferred to FAC pursuant
to the Operating Agreement, the beneficial interest in the
Properties underlying those Sales Contracts transferred to
FAC shall pass to FAC with the transference of said Sales
Contracts. In the event FCI elects to repurchase Sales
Contracts previously transferred to FAC, the beneficial
interest in the Properties will be re-transferred to FCI by
FAC when those Sales Contracts are transferred from FAC back
to FCI, all in accordance with the Operating Agreement.
Although Trustee shall be advised of the transference of the
Sales Contracts and the beneficial interest in the
Properties underlying the Sales Contracts, Trustee shall not
be held liable by any party hereto for acting in good faith
on the written instructions of FCI or FAC even though there
may be a mistake as to the proper owner of the beneficial
interest underlying the Sales Contracts.
3. Title Ownership and Responsibility of Trustee.
---------------------------------------------
(a) Trustee acknowledges that notwithstanding the fact
that it will be the record owner of the fee simple title to
the Properties, its ownership is subject in all respects to
the provisions of this Agreement, those Mortgages identified
on Schedule B hereto, and the terms and conditions of the
Loan Agreements. Trustee further acknowledges that it holds
fee simple title to the Properties for the benefit of the
other parties hereto and shall have no equitable rights in
the Properties nor any right to the income or profits to be
derived therefrom.
(b) Trustee's function and responsibility during the
existence of this Agreement will be to (i) hold record title
to the Properties for the benefit of the other parties
hereto, FFC and FCC (ii) convey title as directed upon the
written request of FCI or FAC, as applicable, as the
beneficial owner at such time, and, if applicable, as
servicer under the 1993-A Pledge Agreement or the 1995
Credit Agreement, except as provided by Section 12 hereof;
(iii) contemporaneously with the conveyance of any of the
Properties that qualify for deeding in accordance with the
terms of the Sales Contracts, pursuant to authorization from
the related Secured Party as set forth herein, cause with
respect to such Properties such Secured Party's underlying
Mortgage, if any, to be released of record; (iv) where
requested by FCI or a Purchaser, as the case may be, cause
to be issued a title insurance policy to the Purchaser
(provided all title requirements are properly met and the
appropriate premium has been paid); (v) on all of the
Properties in which a purchase money Mortgage is retained,
cause to be executed and filed of record a release of such
Mortgage upon the written request of FCI or FAC, as the case
may be, pursuant to Section 5(b) hereof, except as provided
by Section 12 hereof; and (vi) execute such instruments as
required to be executed pursuant to Sections 11 and 13
hereof. Trustee may authorize any third party, including
any employee of FCI or FAC, by power of attorney, to execute
any instrument required by this Section 3(b).
(c) Except to the extent expressly permitted herein,
Trustee shall have no discretionary authority whatsoever to
exercise any control over the Properties.
(d) Except as set forth in Section 3(b) Trustee agrees
that it will do nothing which will in anyway impair,
encumber or otherwise adversely affect in any manner the
title to the Properties.
(e) Trustee shall have no duties and responsibilities
other than those set forth herein, and it shall act only at
the direction of the parties hereto and solely in accordance
with the terms hereof. FCI, FAC and each Secured Party
hereby expressly do not delegate any discretionary duties or
responsibilities to Trustee as are often times associated
with a trustee acting pursuant to the terms and provisions
of a trust agreement.
4. Responsibility of FAC or FCI Relating to
--------------------------------------------------
Conveyances by Trustee.
- ----------------------
(a) FCI shall cause any underlying Mortgage (other
than FNBB's Mortgages) to be released and shall be
responsible for paying release prices to the proper party as
necessary to secure the release of the Properties to be
conveyed as provided herein.
(b) FCI or FAC, as the case may be, shall prepare all
such deeds, releases, assignments and other documents as may
be necessary to carry out the purpose of this Agreement and
to cause revenue or transfer tax stamps to be properly
affixed as necessary to satisfy recording requirements, and
shall cause all recording fees to be paid and all necessary
instruments to be recorded in the appropriate real estate
records. FCI and FAC agree that each will maintain all
records necessary to identify beneficial ownership of the
Properties.
(c) FCI or FAC, as the case may be, shall be
responsible for advising Trustee and the related Secured
Party of all assignments of the Sales Contracts and
underlying beneficial interests and all conveyances of the
Properties, by furnishing copies of all such assignments and
conveyances to Trustee and to such Secured Party. Such
assignments shall take the form of a "Document of Sale and
Assignment of Beneficial Interest" or a "Document of Pledge
and Assignment of Beneficial Interest", which shall identify
those Sales Contracts and the underlying Properties giving
rise to such Sales Contracts to be assigned or conveyed.
Trustee shall be entitled to rely upon such "Documents of
Sale and Assignment of Beneficial Interest" and "Documents
of Pledge and Assignment of Beneficial Interest" in
determining beneficial ownership of and security interests
in the Properties.
(d) FFC has provided Trustee with a copy of an
assignment pledging and assigning all beneficial interest in
the 1993-A Trust Intervals and the related Sales Contracts
(previously held by FAC and conveyed to FFC) to the 1993-A
Trustee. FAC, as servicer under the 1993-A Pledge
Agreement, or the 1993-A Trustee shall provide Trustee with
copies of any future assignments of beneficial interest in
the 1993-A Trust Intervals, which assignments shall be in
the form of a certificate and shall identify the 1993-A
Trust Intervals and related Sales Contracts assigned
thereby. Any such assignment submitted to Trustee by FAC
shall be accompanied by an approval, in writing, of the
1993-A Trustee. Trustee shall be entitled to rely upon such
certificates in determining beneficial ownership of the
1993-A Trust Intervals.
(e) FCC has provided Trustee with copies of
assignments evidencing (i) the transfer of all beneficial
interest in the 1995 Intervals and the related Sales
Contracts from FAC to FCC pursuant to the 1995 Purchase
Agreement and (ii) the pledge and assignment of such assets
and interests from FCC to the 1995 Collateral Agent pursuant
to the 1995 Credit Agreement. FAC, as servicer under the
1995 Credit Agreement, or the 1995 Collateral Agent shall
provide Trustee with copies of any future assignments of
beneficial interest in the 1995 Intervals, which assignments
shall be in the form of a certificate and shall identify the
1995 Intervals and related Sales Contracts assigned thereby.
To be effective, any such assignment submitted to Trustee by
FAC shall be accompanied by an approval, in writing, of the
1995 Collateral Agent. Trustee shall be entitled to rely
upon such certificates in determining beneficial ownership
of the 1995 Intervals.
5. Conveyance and Release of Properties.
------------------------------------
(a) At such time as a Purchaser has paid in full the
purchase price or the requisite percentage of the purchase
price for deeding pursuant to a Sales Contract, and/or has
otherwise fully discharged all of such Purchaser's
obligations and responsibilities required to be discharged
as a condition to deeding, including the payment of all POA
dues and assessments, FCI or FAC, as applicable, as the
beneficial owner of the security interest in such property
at such time or as servicer for a Secured Party which is the
beneficial owner of the security interest in such property
at such time, shall direct Trustee in writing to immediately
cause to be released the related Secured Party's underlying
Mortgage(s) with respect to such Properties, unless
otherwise directed in writing by the related Secured
Party(s) pursuant to Section 12 hereof, and forthwith shall
deliver and record a properly executed Warranty Deed or
Special Warranty Deed (with documentary stamps and recording
fees to be paid by FCI or FAC, as the case may be) conveying
fee simple title to the Interval covered by such Sales
Contract to the Purchaser. In those instances in which the
Purchaser has granted to Trustee, FCI or the related Secured
Party a purchase money Mortgage to secure the remainder of
the purchase price owed, Trustee, subject to the provisions
of Section 12 hereof, shall release such Mortgage at such
time as the holder of the beneficial ownership thereof shall
direct in writing. Within a reasonable time following the
delivery of the Warranty Deed or Special Warranty Deed to
Purchaser, a title insurance policy shall also be delivered
(provided that Purchaser has paid for such in connection
with his purchase of the Properties involved). Said title
insurance policy shall, therefore, in some instances reflect
an exception for the purchase money Mortgage in favor of
Trustee, FCI or the related Secured Party, as the case may
be.
(b) Unless directed otherwise by a Secured Party
pursuant to Section 12 hereof (or otherwise), each Secured
Party hereby authorizes and appoints Trustee as its agent to
release such Secured Party's underlying Mortgages (including
purchase money Mortgages assigned to it) against any
Properties upon receipt by Trustee of a written request for
deeding by FCI or FAC, together with a certification by an
authorized officer of FCI or FAC stating that all the
conditions to the release from the Mortgage or Mortgages
encumbering such Properties have been satisfied. Each
Secured Party further agrees to execute any additional
documents as may be necessary to be filed of record in order
to verify Trustee's authority to release such Secured
Party's Mortgages as provided herein.
(c) All payments made by Purchasers pursuant to the
terms of their Sales Contract shall be made directly to FCI,
FAC, FFC or FCC, as the case may be, for the benefit of the
relevant Secured Party, if any, pursuant to the terms of the
related Loan Agreement. No payments are to be received by
the Trustee.
6. Default by Purchaser. Where legal title to
----------------------
Properties have been conveyed by Trustee with a purchase
money Mortgage retained or where Purchaser has recorded
his/her Sales Contract and Purchaser defaults and otherwise
refuses to reconvey legal or equitable title to Trustee,
Trustee shall assign the purchase money Mortgage or recorded
Sales Contract to FCI or FAC (as applicable, as the
beneficial owner of such purchase money Mortgage or recorded
Sales Contract, or, if applicable, as servicer under the
1993-A Pledge Agreement or the 1995 Credit Agreement), for
foreclosure or other appropriate action. Subject to the
provisions of Section 12 hereof, Trustee may rely on the
written request of FCI or FAC, as applicable, in regard to
the assignment of said purchase money Mortgages or recorded
Sales Contracts.
7. POA Voting Rights. Voting rights in any POA which
-----------------
may inure to the benefit of Trustee as legal titleholder
shall be assigned by Trustee to FCI or, at the option of
FCI, FCI may require an irrevocable proxy be delivered unto
it by Trustee so that FCI may continue to exercise all such
voting rights.
8. Applicability of Agreement of Trust. FCI and
--------------------------------------
Trustee have previously entered into an Agreement of Trust
dated June 22, 1981 which is known as Trust No. 6928. This
Third Amended and Restated Supplementary Trust Agreement is
intended to supplement Trust No. 6928, provided, however,
that to the extent that any of the provisions of Trust No.
6928 are inconsistent with any of the provisions contained
herein, the provisions of this Third Amended and Restated
Supplementary Trust Agreement shall control.
9. Additional Properties. From time to time FCI or
---------------------
FAC may convey to Trustee additional Properties to be held
by Trustee as Properties subject to the terms and conditions
of this Agreement, and all parties recognize that this
Agreement shall be binding upon such additional Properties.
Schedule "A" shall be amended from time to time as necessary
to reflect any additional Properties.
10. Indemnification. FCI and FAC jointly and
---------------
severally agree to indemnify and hold harmless Trustee from
any and all claims, demands, actions or causes of action in
any way relating to or arising out of the record ownership
of the Properties or out of the good faith discharge by
Trustee of any of the terms and conditions of this
Agreement, including all costs and expenses of any nature
that Trustee may incur. Each Secured Party shall indemnify
and hold harmless Trustee from any and all claims, demands,
actions or causes of action, including all costs and
expenses of any nature that Trustee may incur in connection
therewith, which relate to or arise out of any act or
failure to act of Trustee, which action or inaction was in
good faith pursuant to and in reliance upon written
instructions from such Secured Party to Trustee. With
respect to actions related to particular Properties, the
parties hereto expressly acknowledge that Trustee shall be
entitled to rely upon the written instructions of FCI, FAC
or the Secured Party which has a first position lien on such
Properties as set forth herein and in the Schedules hereto,
and Trustee shall have no liability for any action taken in
good faith in such reliance. FCI or FAC, as the case may
be, shall reimburse Trustee for all costs, fees and expenses
incurred by it relating to its serving as Trustee under the
terms and provisions of this Agreement. It is the intent of
the parties to insure that Trustee shall incur no liability
whatsoever in connection with the good faith performance of
its functions under this Agreement and in connection
therewith, all parties hereto release and waive any claims
they may have against Trustee which may result from the
performance in good faith by Trustee of its responsibilities
under this Agreement.
11. Mortgages, Platting, and Reconveyance of the
--------------------------------------------------
Properties. Subject to the provisions of Section 12 hereof,
- ----------
upon written request of FCI, Trustee shall, except as to
such Properties as FCI may have previously assigned or
transferred beneficial interest, reconvey all or any portion
of the Properties to FCI, subject to the Mortgages listed in
Exhibit B, for the purpose of granting construction
Mortgages or for any other purpose for which FCI may require
legal title; and further, Trustee agrees it will execute
such Mortgages covering such Properties, as requested in
writing by FCI, to any Secured Party or such third parties
as FCI may direct. Trustee further agrees to execute any
and all documents, including plats, covenants and
restrictions, as may be necessary to add and/or revise
existing or new subdivisions with respect to the Properties.
12. Default Under Loan Agreements. In the event of
------------------------------
default of FCI, FAC, FFC or FCC under any of the Loan
Agreements, the related Secured Party shall notify Trustee
in writing of such event at such time as notice of such
default is given to FCI, FAC, FFC, or FCC as the case may
be, which writing shall identify those Properties giving
rise to Sales Contracts relating to the defaulted Loan
Agreement and may further instruct Trustee that, with
respect to those Properties, Trustee shall act only upon the
written instructions of the related Secured Party and any
prior lienholder with respect to such Properties and the
related Sales Contracts, whereupon Trustee shall only take
action with respect to the Properties identified in the
notice, notwithstanding instructions of FCI, FAC, FFC or FCC
to the contrary, as directed by the related Secured Party
and any prior lienholder.
The receipt of any notice of default shall relate only
to the specific Loan Agreement identified therein. As to
all other Loan Agreements, Trustee shall continue to act
upon the written request of FCI, FAC, FNBB, individually and
as agent, the 1993-A Trustee and the 1995 Collateral Agent,
as the case may be, as to the Properties relating thereto.
Any notice of default given Trustee pursuant to this
section shall be mailed by first class mail, postage
prepaid, return receipt requested, to the following address:
First American Title Insurance Company,
a California corporation
403 N. Agassiz, P.O. Box 1910
Flagstaff, AZ 86002
Attn: Earl Briggs
In no event shall Trustee have any responsibility for
preparation of documents referred to in Section 4(b) of this
Agreement. As to Properties relating to any defaulted Loan
Agreement, said documents shall be prepared by the related
Bank or its designee.
13. Provisions Related to Pooling/Pledge/Sale
--------------------------------------------------
Agreements.
- ----------
Notwithstanding anything herein to the contrary and
specifically notwithstanding the provisions of Section 3(a)
hereof, the interest in Properties related to the 1993-A
Trust Intervals granted the 1993-A Trustee by this Agreement
and the 1993-A Pledge Agreement are hereby deemed superior
and senior to any and all interests granted pursuant to the
Mortgages listed in Schedule B hereto. The parties hereto
acknowledge that Trustee holds title to the 1993-A Trust
Intervals for the benefit of the purchasers of the 1993-A
Trust Intervals and the 1993-A Trustee, subject only to the
terms and conditions of the related Sales Contracts and the
1993-A Pledge Agreement, respectively. The Trustee shall
not transfer, pledge or assign the 1993-A Trust Intervals
except as expressly provided herein.
Notwithstanding anything herein to the contrary and
specifically notwithstanding the provisions of Section 3(a)
hereof, the interest in Properties related to the 1995
Intervals granted the 1995 Collateral Agent by this
Agreement and the 1995 Credit Agreement are hereby deemed
superior and senior to any and all interests granted
pursuant to the Mortgages listed in Schedule B hereto. The
parties hereto acknowledge that Trustee holds title to the
1995 Intervals for the benefit of the purchasers of the 1995
Intervals and the 1995 Collateral Agent, subject only to the
terms and conditions of the related Sales Contracts and the
1995 Credit Agreement, respectively. The Trustee shall not
transfer, pledge or assign the 1995 Intervals except as
expressly provided herein.
14. Miscellaneous.
-------------
(a) This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their successors
and assigns. This Agreement constitutes the entire
understanding and agreement between the parties with respect
to the subject matter hereof and may not be changed or
modified orally but only by instrument in writing signed by
the party against which enforcement of such change or
modification is sought.
(b) This Agreement may be amended from time to time
for the purpose of adding additional parties and revising
the terms herein, provided, however, that except as
specifically provided in paragraph 15 below, no such
amendment shall be effective until all parties hereto have
agreed in writing to such revisions.
(c) This instrument shall be construed in accordance
with and governed by the laws of the State of Arizona. In
the event any clause or provision of this Agreement is
declared to be invalid, the invalidity of any such clause or
provision shall not affect the remaining clauses and
provisions of this Agreement which shall remain in full
force and effect.
(d) No party may make an assignment of its interest in
this Agreement without obtaining the written consent of the
other parties hereto; provided, however, that to the extent
permitted by the 1993-A Pledge Agreement or the 1995 Credit
Agreement, respectively, the 1993-A Trustee and the 1995
Collateral Agent may be replaced or succeeded as parties to
this Agreement without the consent of the other parties
hereto. The parties further agree to execute additional
documents as may be necessary to carry out the purposes of
this Agreement and protect the interests of all parties
hereto.
15. Amendment/Termination.
---------------------
(a) This Agreement may be amended solely for the
purpose of identifying and segregating a separate pool of
Sales Contracts and the Intervals relating thereto, which
are to be sold or pledged pursuant to a pooling, sale, loan
or pledge agreement, by an instrument in writing signed by
FCI, FAC, Trustee and FNBB. Any amendment undertaken
pursuant to this paragraph 15(a) shall not relate to or
affect Intervals listed on Schedules C and D attached
hereto, nor shall it in any way impair or amend the rights
of the 1993-A Trustee or the 1995 Collateral Agent under
this Agreement. An executed copy of any Amendment
undertaken pursuant to this paragraph 15(a) shall be
provided to all parties to this Agreement.
(b) This Agreement shall be terminable by any party
hereto by giving sixty (60) days written notice to all other
parties of its desire to so terminate. The election by any
party other than FNBB, FCI or FAC to terminate will not
terminate this Agreement with respect to the remaining
parties, provided the remaining parties shall cause to be
substituted a successor party in place of the terminating
party. Upon termination, title to the Properties shall be
conveyed by Trustee in accordance with the written
instructions of FCI, FAC, the 1993-A Trustee or the 1995
Collateral Agent, as the case may be, as the beneficial
owner or assignee or pledgee of the beneficial ownership of
such Properties at such time; except, however, if Trustee
has been notified by any Secured Party in writing that a
default has occurred under a Loan Agreement, as described
more fully in Section 12 of this Agreement, Trustee shall
convey title to the Properties securing the defaulted Loan
Agreement in accordance with the written instructions of the
related Secured Party and first lienholder with respect
thereto. In any event, this Agreement shall terminate, if
not sooner terminated, on [January 1, 20 ].
16. Notice. Notice under this Agreement shall be
-------
given to the parties at the following addresses:
First American Title Insurance Company
---------------------------------------
Earl Briggs
First American Title Insurance Company, a California
corporation
403 N. Agassiz, P. O. Box 1910
Flagstaff, Arizona 86002
(602) 779-5171
Fairfield Communities, Inc. and
Fairfield Acceptance Corporation
--------------------------------
Counsel:
Marcel Dumeny Gordon Wilbourn
Fairfield Communities, Inc. Rose Law Firm, a
2800 Cantrell Road Professional Association
Little Rock, Arkansas 72202 120 East Fourth Street
(501) 664-6000 Little Rock, Arkansas 72201
Telecopy: (501) 660-7196 (501) 377-0332
Telecopy: (501) 375-1309
The First National Bank of Boston
---------------------------------
Counsel:
Linda J. Carter Marcia Robinson
The First National Bank of Boston Bingham, Dana & Gould
115 Perimeter Center Place, N.E. 150 Federal Street
Suite 500 Boston, Massachusetts
02106
Atlanta, Georgia 30346 (617) 951-8535
(404) 393-4676 Telecopy: (617) 951-8736
Telecopy: (404) 391-9811
First Commercial Trust Company, N.A.
------------------------------------
Counsel:
Bonnie McKenzie Heartsill Ragon, III
First Commercial Trust Company, Gill Law Firm
National Association 425 West Capitol
Capitol and Broadway Streets Little Rock, Arkansas 72201
First Commercial Building, (501) 376-3800
7th Floor Telecopy: (501) 372-3359
Little Rock, Arkansas 72201
(501) 371-6744
Telecopy: (501) 371-8827
Capital Markets Assurance Corporation
--------------------------------------
885 Third Avenue, 14th Floor Counsel:
New York, NY 10022 Skip Stern
Attn: Head of Exposure Sidley & Austin
Management One First National Plaza
(212) 891-8806 45th Floor
Telecopy: (212) 755-5462 Chicago, IL 60603
(312) 853-7267
Telecopy: (312) 853-7036
Notice to each of the aforementioned parties shall be
given by Trustee if either FCI or FAC should default in the
performance of any of their respective obligations under
this Agreement.
17. Execution. This Agreement may be executed in one
---------
or more counterparts, all of which shall constitute one and
the same instrument.
[THIS SPACE LEFT BLANK INTENTIONALLY]
DATED as of the date first above written.
FAIRFIELD COMMUNITIES, INC.
/s/Les R. Baledge BY: /s/Robert W. Howeth
_________________________ ____________________________
Witness TITLE: Senior Vice President
FAIRFIELD ACCEPTANCE CORPORATION
/s/Kim Thompson BY: /s/Robert W. Howeth
_________________________ ____________________________
Witness TITLE:President
FIRST AMERICAN TITLE INSURANCE,
A CALIFORNIA CORPORATION
/s/Ruth Clark BY: /s/Earl Briggs
_________________________ ____________________________
Witness TITLE: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender under the
FCI Boston Loan Agreement
/s/John Fletcher BY: /s/Linda J. Carter
_________________________ ____________________________
Witness TITLE: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender under the
FAC Boston Loan Agreement
/s/John Fletcher BY: /s/Linda J. Carter
_________________________ ____________________________
Witness TITLE: Vice President
FIRST COMMERCIAL TRUST COMPANY, N.A.,
as 1993-A Trustee
/s/John Fletcher BY: /s/Debi DeHau
_________________________ ____________________________
Witness TITLE: Corporate Trust Manager
CAPITAL MARKETS ASSURANCE
CORPORATION,
as 1995 Collateral Agent
/s/John Fletcher BY: /s/Eric Rosensweig
- -------------------------- ------------------------------
Witness TITLE: Vice President
LIST OF SCHEDULES
-----------------
Schedule A: Properties
Schedule B: Mortgages
Schedule C: 1993-A Trust Intervals
Schedule D: 1995 Intervals
SCHEDULE A
PROPERTIES
TIMESHARE REGIMES AT
FAIRFIELD CONTINENTAL COUNTRY CLUB ESTATES,
COCONINO COUNTY, ARIZONA
The property hereinafter described is hereby made
subject to the Second Amended and Restated Supplementary
Trust Agreement dated September 1, 1992.
NOTE: The following described property was conveyed by
Warranty Deed dated June 22, 1981 and recorded in Docket
837, Pages 952-970, from Fairfield Sunrise Village, Inc. to
First American Title Insurance Company of Arizona as Trustee
pursuant to a Trust Agreement No. 6928 dated June 22, 1981.
TANGLEWOOD TOWNHOUSES
---------------------
That property on which is located Tanglewood Townhouses
as described in a Declaration of Individual and/or Interval
Ownership recorded in Docket 862 at Page 312 and any
Amendments and Supplements thereto all filed of record in
the Office of the County Recorder of Coconino County,
Arizona.
The above described property has located upon it Units
1 through 41 of Tanglewood Townhouses as set forth on a Plat
of Record at Case 3 at Map 207 in the Office of the County
Recorder of Coconino County, Arizona.
There is hereby excepted from and out of the property
set forth above the following described Unit Weeks:
Unit 1 Unit 2 Unit 3
------ ------ ------
Week(s) 10, 21, 26 Week(s) 7, 22, 28, Week(s) 8, 14,
27, 38, 40 29, 30, 33, 34, 37, 29,30, 31, 32,
38, 47 37, 40, 44
Unit 4 Unit 5 Unit 6
------ ------ ------
Week(s) 23, 24, 25, Week(s) 27, 28, 29, Week(s) 4, 5, 9,
29, 30 30, 32, 33, 34 21, 25, 26, 37,
38, 39, 47
Unit 7 Unit 8 Unit 9
------ ------ ------
Week(s) 21, 26, 34, Week(s) 8, 9, 29, Week(s) 33, 40
36, 40, 47, 48 34, 52
Unit 10 Unit 11 Unit 12
------- ------- -------
Week(s) 5, 26, 27, Week(s) 5, 17, 28, Week(s) 25, 27,
30, 35, 36, 37, 38, 40, 41 37, 39, 41
39, 41
Unit 37 Unit 38 Unit 39
------- ------- --------
Week(s) 11, 24, 25, Week(s) 5, 19, 20 Week(s) 22, 23,
30, 37, 42 31, 33, 34, 35, 36, 26, 27, 29, 30,
43, 44 31, 37, 38, 52
Unit 40 Unit 41
------- -------
Week(s) 3, 10, 21, Week(s) 10, 21, 26,
23, 24, 25, 27, 29, 27, 31, 32, 33, 34,
30, 33, 41 38
TANGLEWOOD TOWNHOUSES II
------------------------
That property on which is located Tanglewood Townhouses
II as described in a First Supplemental Declaration of
Individual and/or Interval Ownership recorded in Docket 957
at Page 960-964 thereto all filed in the Office of the
County Recorder of Coconino County, Arizona.
The above described property has located upon it Units
42 through 111 of Tanglewood Townhouses II as set forth on a
Plat of Record at Case 3 at Map 250, 250A and 250B, in the
Office of the County Recorder of Coconino County, Arizona.
THERE IS HEREBY EXCEPTED FROM AND OUT OF THE PROPERTY
SET FORTH ABOVE THE FOLLOWING DESCRIBED UNITS WEEKS:
UNIT 43: Week 49
UNIT 47: Weeks 4, 15, 19 and 47
UNIT 48: Weeks 10, 19, 20, 34, 35, 36, 41, 42, 43, 49
and 50
UNIT 49: Weeks 9, 10, 18, 27, 43 and 49
UNIT 60: Weeks 29, 30, 36, and 37
RIDGEWOOD TOWNHOUSES
--------------------
That Property on which is located Ridgewood
Townhouses, according to the plat of record in the office of
the County Recorder of Coconino County, Arizona, recorded in
Case 4, Map 84-84A and Declaration of Covenants, Conditions
and Restrictions and Interval Ownership recorded May 19,
1986, in Docket 1088, Page 672, as amended.
RIDGEWOOD TOWNHOUSES PHASE II
-----------------------------
That property on which is located Ridgewood Townhouses
Phase II, according to the plat recorded on April 11, 1989
at Case 5, Maps 6 and 6A, in the Office of the County
Recorder of Coconino County, Arizona, and that certain First
Supplemental Declaration of Individual and/or Interval
Ownership recorded on April 11, 1989 in Docket 1272, Pages
469-474, in the Office of the County Recorder of Coconino
County, Arizona.
SCHEDULE B
MORTGAGES
PERMITTED ENCUMBRANCES
----------------------
TIMESHARE
---------
Timeshare Regime Encumbrance
---------------- -----------
Fairfield Continental Country
Club Estates, Coconino County,
Arizona
Tanglewood Townhouses, Deed of Trust in favor of
Phase I The First National Bank of
Except those unit weeks Boston, recorded in Docket
excepted in the preceding 878, Page 214, in the
Schedule A Public Record of Coconino
County, Arizona
Deed of Trust in favor of
The First National Bank of
Boston, recorded in
Docket 917, Page 395, in
the Public Record of
Coconino County, Arizona
Deed of Trust in favor of
The Arizona Bank,recorded
in Docket 1008, Page 649,
in the Public Record of
Coconino County, Arizona
Amended and Restated
Deed of Trust,
Assignment of Rents
and Security
Agreement in favor
of The First
National Bank of
Boston, recorded in
Docket 1502, Page
600, in the Public
Record of Coconino
County, Arizona.
Fairfield Acceptance
Corporation:
Amended and Restated
Deed of Trust,
Assignment of Rents
and Security
Agreement in favor
of The First
National Bank of
Boston, recorded in
Docket 1508, Page
529 in the Public
Record of Coconino,
Arizona.
Tanglewood Townhouses, Deed of Trust in favor of
Phase II The First National Bank of
Except those unit weeks Boston, recorded in Docket
excepted in the preceding 878, Page 214, in the
Schedule A Public Record of Coconino
County, Arizona
Deed of Trustin favor of
The Arizona Bank recorded
in Docket 837, Page 353,
in the Public Record of
Coconino County, Arizona
Deed of Trust in favor of
The First National Bank of
Boston, recorded in
Docket 917, Page 395, in
the Public Record of
Coconino County, Arizona
Deed of Trust in favor of
The First National Bank of
Boston, recorded in Docket
1008, Page 649, in the
Public ecord of Coconino
County, Arizona
Amended and Restated
Deed of Trust,
Assignment of Rents
and Security
Agreement in favor
of The First
National Bank of
Boston, recorded in
Docket 1502, Page
600, in the Public
Record of Coconino
County, Arizona.
Fairfield Acceptance
Corporation:
Amended and Restated
Deed of Trust,
Assignment of Rents
and Security
Agreement in favor
of The First
National Bank of
Boston, recorded in
Docket 1508, Page
529 in the Public
Record of Coconino,
Arizona.
Timeshare Regime Encumbrance
---------------- ------------
Ridgewood Townhouses Deed of Trust in favor of
The First National Bank of
Boston, recorded in Docket
878, Page 214, in the
Public Record of Coconino
County, Arizona
Deed of Trust in favor of
The Arizona Bank recorded
in Docket 837, Page 353,
in the Public Record of
Coconino County, Arizona
Deed of Trust in favor of
The First National Bank of
Boston, recorded in
Docket 917, Page 395, in
the Public Record of
Coconino County, Arizona
Deed of Trust in favor of
The First National Bank of
Boston, recorded in Docket
1008, Page 649, in the
Public Record of Coconino
County, Arizona
Amended and Restated
Deed of Trust,
Assignment of Rents
and Security
Agreement in favor
of The First
National Bank of
Boston, recorded in
Docket 1502, Page
600, in the Public
Record of Coconino
County, Arizona.
Fairfield Acceptance
Corporation:
Amended and Restated
Deed of Trust,
Assignment of Rents
and Security
Agreement in favor
of The First
National Bank of
Boston, recorded in
Docket 1508, Page
529 in the Public
Record of Coconino,
Arizona.
Ridgewood Townhouses Deed of Trust in favor of
Phase II The First National Bank of
Boston, recorded in Docket
878, Page 214, in the
Public Record of
Coconino County, Arizona
Deed of Trust in favor of
The Arizona Bank recorded
in Docket 837, Page 353,
in the Public Record of
Coconino County, Arizona
Deed of Trust in favor of
The First National Bank of
Boston, recorded in
Docket 917, Page 395, in
the Public Record of
Coconino County, Arizona
Deed of Trust in favor of
The First National Bank of
Boston, recorded in Docket
1008, Page 649, in the
Public Record of Coconino
County, Arizona
Amended and Restated
Deed of Trust,
Assignment of Rents
and Security
Agreement in favor
of The First
National Bank of
Boston, recorded in
Docket 1502, Page
600, in the Public
Record of Coconino
County, Arizona.
Fairfield Acceptance
Corporation:
Amended and Restated
Deed of Trust,
Assignment of Rents
and Security
Agreement in favor
of The First
National Bank of
Boston, recorded in
Docket 1508, Page
529 in the Public
Record of Coconino,
Arizona.
SCHEDULE C
TO THIRD AMENDED AND RESTATED SUPPLEMENTARY TRUST AGREEMENT
1993-A TRUST INTERVALS
[Information Omitted]
SCHEDULE D
TO THIRD AMENDED AND RESTATED SUPPLEMENTARY TRUST AGREEMENT
1995 TRUST INTERVALS
[Information Omitted]
FIRST AMENDMENT TO
THIRD AMENDED AND RESTATED
SUPPLEMENTARY TRUST AGREEMENT
(ARIZONA)
This First Amendment to Third Amended and Restated
Supplementary Trust Agreement is made and entered into as of
July 31, 1996, by and among Fairfield Communities, Inc., a
Delaware corporation (referred to herein as "FCI");
Fairfield Acceptance Corporation, a Delaware corporation and
wholly-owned subsidiary of FCI (referred to herein as
"FAC"); First American Title Insurance Company, a California
corporation (referred to herein as "Trustee"); The First
National Bank of Boston, Boston, Massachusetts (referred to
herein as "FNBB"), as agent and lender to FCI pursuant to
the FCI Boston Loan Agreement; FNBB, as agent and lender to
FAC pursuant to the FAC Boston Loan Agreement; and Capital
Markets Assurance Corporation, a New York Stock insurance
company, as collateral agent (referred to herein as "1995
Collateral Agent"), pursuant to the 1995 Credit Agreement
(as hereinafter defined). This Amendment amends that
certain Third Amended and Restated Supplementary Trust
Agreement, dated as of July 31, 1996 (the "Agreement").
Unless otherwise defined herein, all capitalized terms shall
have the meanings ascribed thereto in the Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to Section 15(a) of the Agreement,
FCI, FAC, Trustee and Bank of Boston can amend the Agreement
to identify and segregate a separate pool of Sales Contracts
and the Intervals relating thereto, which are to be sold or
pledged pursuant to a pooling, pledge or sale agreement;
WHEREAS, FAC has previously sold certain Sales
Contracts to Fairfield Capital Corporation, a Delaware
corporation (referred to herein as "FCC") pursuant to a
Receivables Purchase Agreement, dated as of March 28, 1995,
among FCI, as originator, FAC, as seller and FCC, as
purchaser, which Sales Contracts were in turn pledged by FCC
to the 1995 Collateral Agent for the benefit Triple-A One
Funding Corporation, a Delaware corporation (referred to
herein as "Triple-A"), pursuant to the 1995 Credit
Agreement;
WHEREAS, the parties hereto desire to enter into this
Amendment in order to amend certain definitions contained in
the Agreement to reflect that the 1995 Credit Agreement is
being amended and restated contemporaneously herewith; and
NOW THEREFORE, in consideration of the mutual promises
and covenants set forth herein, the parties hereto agree as
follows:
1. Section 1 of the Agreement is hereby amended by
adding thereto the following definitions (and by striking
any definitions which are supplanted by the definitions set
forth below):
1995 Credit Agreement means that certain Amended and
----------------------
Restated Credit Agreement dated as of July 31, 1996, by and
among FAC, as servicer, FCI, FCC, as borrower, L/C Bank,
Triple-A and the 1995 Collateral Agent, relating to loans to
be made by Triple-A to FCC, as the same may be amended,
supplemented, or otherwise modified from time to time in
accordance with the terms thereof.
1995 Collateral Agent means Capital Markets Assurance
----------------------
Corporation, a New York Stock insurance company, as
collateral agent for the benefit of itself, Triple-A and L/C
Bank pursuant to the 1995 Credit Agreement.
L/C Bank means The First National Bank of Boston, as
--------
L/C Bank under the 1995 Credit Agreement.
2. Section 16 of the Agreement is hereby amended by
adding thereto the following addresses (and by striking any
addresses which are supplanted by the addresses set forth
below):
First American Title Insurance Company
--------------------------------------
Earl Briggs or Jeff Anderson
First American Title Insurance Company, a California corporation
403 N. Agassiz, P. O. Box 1910
Flagstaff, Arizona 86002
(520) 779-5171
The First National Bank of Boston
---------------------------------
Counsel:
Linda J. Carter Marcia Robinson
The First National Bank of Boston Bingham, Dana & Gould
115 Perimeter Center Place, N.E. 150 Federal Street
Suite 500 Boston, Massachusetts 02106
Atlanta, Georgia 30346 (617) 951-8535
(770) 390-6500 Telecopy: (617) 951-8736
Telecopy: (770)390-8434
Capital Markets Assurance Corporation
-------------------------------------
885 Third Avenue, 14th Floor Counsel:
New York, NY 10022 Marc D. Wassermann, Esq.
Attn: Head of Exposure Sidley & Austin
Management 1722 Eye Street, NW
(212) 891-8806 Washington, D.C. 20006
Telecopy: (212) 755-5462 (202)736-8000
Telecopy: (202) 736-8711
3. Except as otherwise amended by this Amendment, all
provisions of the Agreement remain in full force and effect.
4. An executed copy of this Amendment shall be
provided to all parties to the Agreement.
5. This Amendment shall be construed in accordance
with and governed by the laws of the State of Arizona. In
the event that any clause or provision of this Amendment is
declared to be invalid, the invalidity of any such clause or
provision shall not affect the remaining clauses and
provisions of this Amendment which shall remain in full
force and effect.
6. This Amendment may be executed in one or more
counterparts, all of which shall constitute one and the same
instrument.
[THIS SPACE LEFT BLANK INTENTIONALLY]
DATED as of the date first above written.
FAIRFIELD COMMUNITIES, INC.
/s/Dawn Peoples BY:/s/Robert W. Howeth
_________________________ ____________________________
Witness TITLE: Senior Vice President
FAIRFIELD ACCEPTANCE CORPORATION
/s/Dawn Peoples BY:/s/Robert W. Howeth
_________________________ ____________________________
Witness TITLE: President
FIRST AMERICAN TITLE INSURANCE,
A CALIFORNIA CORPORATION
/s/Ruth Clark BY:/s/Jeff Anderson
_________________________ ____________________________
Witness TITLE: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender under the
FCI Boston Loan Agreement
/s/Paula C. Anderson BY: /s/Linda J. Carter
_________________________ ____________________________
Witness TITLE: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as agent and lender under the
FAC Boston Loan Agreement
/s/Paula C. Anderson BY: /s/Linda J. Carter
_________________________ ____________________________
Witness TITLE: Vice President
CAPITAL MARKETS ASSURANCE
CORPORATION,
as 1995 Collateral Agent
/s/Dawn Peopls BY: /s/Philip Theoharides
_________________________ ____________________________
Witness TITLE: Vice President
AMENDMENT NUMBER ONE
TO
FAIRFIELD COMMUNITIES, INC.
SAVINGS/PROFIT SHARING PLAN
---------------------------
(effective January 1, 1995)
THIS AMENDMENT to the Fairfield Communities, Inc. Savings/Profit
Sharing Plan (the "Plan"), which Plan was originally effective March 1,
1976, and was restated effective July 1, 1994, is hereby entered into
effective as of January 1, 1995.
WHEREAS, it is desirable to amend the "Fairfield Communities, Inc.
Savings/Profit Sharing Plan" restated effective July 1, 1994 (the "Plan")
to provide for a safe harbor definition of "Compensation" under the
Internal Revenue Code; and
WHEREAS, Fairfield Communities, Inc., by resolutions adopted at a duly
convened meeting of its Board of Directors held on November 18, 1994, in
accordance with the provisions of Section 11.3 of the Plan, adopted the
following amendments to the Plan, effective as of January 1, 1995;
NOW, THEREFORE, subsection 1.1(A)(7) of the Plan is hereby amended,
effective January 1, 1995, to provide as follows:
(7) "Compensation" shall mean the amounts payable to an
Employee by the Employer for services rendered as reported on
the Employee's Federal income tax withholding statement (Form
W-2) or its subsequent equivalent.
Any amounts that would have been includable in the
Employee's Compensation as described above if they had not
received special tax treatment because they were deferred by
the Employee through a salary reduction agreement shall be
added to the amount described above and included in the
Employee's "Compensation" for purposes of the Plan.
The annual Compensation of each Employee taken into
account under the Plan shall not exceed $200,000 or such other
amount as may be specified by the Secretary of the Treasury
pursuant to his duties under Section 401(a)(17) of the Code.
In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to
the contrary, for plan years beginning on or after January 1,
1994, the annual compensation of each Employee taken into
account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the
cost of living in accordance with Section 401(a)(17)(B) of the
Code. The cost-of-living adjustment in effect for a calendar
year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of
fewer than 12 months, the OBRA '93 annual compensation limit
will be multiplied by a fraction, the numerator of which is the
number of months in the determination period, and the
denominator of which is 12.
For plan years beginning on or after January 1, 1994, any
reference in this Plan to the limitations under Section 401(a)(17)
of the Code shall mean the OBRA '93 annual compensation limit set
forth in this provision.
If Compensation for any prior determination period is
taken into account in determining an Employee's benefits
accruing in the current plan year, the Compensation for that
prior determination period is subject to the OBRA '93 annual
compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning
before the first day of the first plan year beginning on or
after January 1, 1994, the OBRA '93 annual compensation limit
is $150,000.
For purposes of applying the above limit to a Highly
Compensated Employee who is a 5% Owner (as defined in
Section 416(i)(1) of the Code) or one of the ten most highly
paid Highly Compensated Employees, the Highly Compensated
Employee's family shall be treated as a single employee with
one Compensation and the limit shall be allocated among the
family members in proportion to each member's Compensation
(except for the purpose of determining Compensation below the
Plan's Integration Level). For purposes of this paragraph, a
Highly Compensated Employee's family shall include his or her
spouse and his or her lineal descendants who have not reached
the age of 19 before the end of the year.
IN WITNESS WHEREOF, Fairfield Communities, Inc. has caused this
Amendment to be executed by its duly authorized officer.
FAIRFIELD COMMUNITIES, INC.
By: /s/ Marcel J. Dumeny
-------------------------------
Marcel J. Dumeny
Secretary
AMENDMENT NUMBER THREE
TO
FAIRFIELD COMMUNITIES, INC.
SAVINGS/PROFIT SHARING PLAN
---------------------------
(effective September 20, 1996)
THIS AMENDMENT to the Fairfield Communities, Inc. Savings/Profit
Sharing Plan (the "Plan"), which Plan was originally effective March 1,
1976, and was restated effective July 1, 1994, and was amended effective
January 1, 1995, and was further amended effective as of January 1, 1996,
is hereby entered into effective September 20, 1996.
Section 7.2(E) of the Plan is hereby amended to provide as follows:
7.2(E) In the event that the Participant's annual
addition under the Defined Contribution Plans for any
Limitation Year is restricted as a result of the above
provisions of this section, that portion or all of the annual
addition allocable to the Participant under the Plan for such
Limitation Year which is required to reduce the amount of the
annual addition to the amount permitted under Section 7.2(B)
above shall be eliminated by:
(1) First, his Salary Deferral Contributions
and/or Participant's Contributions, including any
gains attributable thereto, to the extent that the
return would reduce the amount by which the annual
addition exceeds such limits, shall be returned to
the Participant; and
(2) Second, by holding unallocated in a
special account, called the "Unallocated Limitation
Account" to the extent necessary, that portion or
all of the Participant's allocable share of the
Employer's Matching and/or Profit Sharing
Contributions for the Plan Year, for subsequent
allocation with such Contributions for the next
succeeding Plan year (or, if necessary, Plan Years).
The Unallocated Limitation Account shall not be
adjusted for gains or losses as of any Valuation
Date.
Provided, however, that the provisions of this
subparagraph (E) shall apply only to the extent such annual
addition has not been reduced to the amount permitted under
Section 7.2(B) above by first applying any similar provisions
for reducing such excess annual additions under any other
Defined Contribution Plans of the Controlling Group Members in
which the Participant also is an active participant.
IN WITNESS WHEREOF, Fairfield Communities, Inc. has caused this
Amendment to be executed by its duly authorized officer.
FAIRFIELD COMMUNITIES, INC.
By: /s/ Marcel J. Dumeny
---------------------------
Marcel J. Dumeny
Secretary
RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement (the "Agreement") is entered into on
this 18th day of December, 1996 (the "Date of Grant"), by and between
Fairfield Communities, Inc., a Delaware corporation (the "Company"), and John
W. McConnell (the "Participant"). The Company and the Participant agree as
follows:
1. Restricted Stock Award. Pursuant to resolutions of the Board of
Directors of the Company (the "Board") duly adopted on October 10, 1996 and
the approval of the form of this Agreement by the Compensation Committee of
the Board by unanimous written action dated November 19, 1996, the Company
hereby grants to the Participant, upon the terms and conditions set forth
below, a total of 60,000 shares (the "Shares") of the Company's common stock,
par value $0.01 per share (the "Common Stock"), issued from treasury. The
Company represents and warrants that such Shares are duly authorized, validly
issued, fully paid and non-assessable.
2. Risk of Forfeiture. The Shares will be subject to forfeiture if
the Participant's employment with the Company is terminated (a) by the
Participant, other than as a result of a Constructive Discharge (as defined
in Section 7(c)), (b) by the Company for Cause (as defined in Section 7(a)),
(c) by reason of the Participant's death, or (d) by reason of the
Participant's Disability (as defined in Section 7(d)). Such risk of
forfeiture will lapse as to one-half of the Shares and such Shares will
become fully vested, without restriction, on 5:00 p.m., Little Rock, Arkansas
time, on each of the first and second anniversaries of the Date of Grant. If
any Shares are forfeited, the Participant will surrender such forfeited
Shares to the Company. The Participant will not be entitled to any payment
in respect of any Shares so forfeited. Subject to Section 9 hereof, but
notwithstanding any other provision of this Agreement to the contrary, the
risk of forfeiture will lapse and all Shares shall become immediately vested,
without restriction, in the event of a Change in Control (as defined in
Section 7(b)) without notice and without any other action required by any
party hereto.
3. Rights as Stockholder. Unless and until forfeited, the
Participant shall have, with respect to the shares of Common Stock underlying
the grant of the Shares, all of the rights of a stockholder of such Common
Stock (except as otherwise provided herein). Any stock dividends paid in
respect of unvested Shares will be treated as additional Shares and will be
subject to the same restrictions and other terms and conditions that apply to
the unvested Shares with respect to which such stock dividends are issued.
4. Share Certificates.
(a) The Participant will be issued one or more stock
certificates in respect of the Shares. Each Share certificate will be
registered in the name of the Participant, will be accompanied by a stock
power duly executed by the Participant and will bear, among any other
required legends, the following legend:
"THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF
STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND
CONDITIONS (INCLUDING, WITHOUT LIMITATION, THE FORFEITURE
EVENTS) CONTAINED IN THE RESTRICTED STOCK AGREEMENT ENTERED
INTO BETWEEN THE REGISTERED OWNER HEREOF AND FAIRFIELD
COMMUNITIES, INC. A COPY OF SUCH AGREEMENT IS ON FILE IN THE
OFFICE OF THE SECRETARY OF FAIRFIELD COMMUNITIES, INC. IN
LITTLE ROCK, ARKANSAS. FAIRFIELD COMMUNITIES, INC. WILL
FURNISH TO THE RECORDHOLDER OF THIS CERTIFICATE, WITHOUT
CHARGE AND UPON WRITTEN REQUEST AT ITS PRINCIPAL PLACE OF
BUSINESS, A COPY OF SUCH AGREEMENT. FAIRFIELD COMMUNITIES,
INC. RESERVES THE RIGHT TO REFUSE TO RECORD THE TRANSFER OF
THIS CERTIFICATE UNTIL ALL SUCH RESTRICTIONS ARE SATISFIED,
ALL SUCH TERMS ARE COMPLIED WITH AND ALL SUCH CONDITIONS ARE
SATISFIED."
All certificates evidencing grants of Shares will be deposited with and held
in custody by the Company until the date on which the risk of forfeiture
lapses and all of the conditions and restrictions on the Shares are
satisfied.
(b) New Certificates. Subject to the provisions of Section
4(a) above, after vesting and the satisfaction and/or lapse of the
restrictions, terms and conditions applicable to any Shares, a new
certificate representing such vested Shares, without the legend set forth
above in Section 4(a) or other restriction, will (in lieu, and upon
cancellation, of the certificate, or the portion thereof, previously
representing such Shares) be registered in the name of the Participant and
delivered to the Participant within five business days after vesting.
5. Withholding. The Participant shall, at the time of vesting and
as a condition precedent to the delivery of a certificate representing such
Shares, pay to the Company in cash an amount equal to any applicable
withholding taxes required to be withheld or collected under applicable
federal, state or local laws or regulations. Furthermore, the Company will
have the right to deduct and withhold any such applicable taxes from, or in
respect of, any dividends or other distributions paid on or in respect of the
Shares. All taxes, if any, in respect of any grants or payments to the
Participant hereunder will be the sole responsibility of and shall be paid by
the Participant. The Participant shall be entitled to elect to have his
withholding obligation at the time of vesting satisfied by surrendering to
the Company shares of Common Stock, including the Shares (provided that the
Shares are vested). The value of any such shares of Common Stock shall be
the closing price of the Common Stock on the New York Stock Exchange ("NYSE")
(or such other principal exchange on which the Common Stock is then listed
for trading) on the date of vesting of shares which gives rise to the taxable
event.
6. Restrictions on Transfer. The Shares, and any rights or interest
in this Agreement, shall not, prior to vesting, be assigned, transferred,
sold, exchanged or otherwise disposed of in any way at any time by the
Participant, other than by testamentary disposition by the Participant or the
laws of descent and distribution. Any such award, rights or interests will
not, prior to vesting, be pledged, encumbered or otherwise hypothecated in
any way at any time by the Participant. Any such award, rights or interests
will not, prior to vesting, be subject to execution, attachment or similar
legal process. Any attempt to sell, exchange, transfer, assign, pledge,
encumber or otherwise dispose of or hypothecate in any way any such awards,
rights or interests, or the levy of any execution, attachment or similar
legal process thereon, contrary to the terms of this Agreement will be null
and void and without legal force or effect. Upon the lapse of the
restrictions on transfer of the Shares, if the Shares have not been
registered under the Securities Act of 1933, as amended (the "Securities
Act"), the Participant shall not dispose of the Shares in violation of the
Securities Act.
7. Certain Defined Terms. (a) The term "Cause" means (i) an
intentional act or acts of fraud, embezzlement or theft constituting a felony
and resulting or intended to result directly or indirectly in gain or
personal enrichment for the Participant at the expense of the Company, or
(ii) the continued, repeated, intentional and willful refusal to perform the
duties associated with the Participant's position as President and Chief
Executive Officer of the Company which is not cured within 15 days following
written notice to the Participant. For purposes of this Agreement, no act or
failure to act on the part of the Participant shall be deemed "intentional"
if it was due primarily to an error in judgment or negligence, but shall be
deemed "intentional" only if done or omitted to be done by the Participant
not in good faith and without reasonable belief that his action or omission
was in the best interest of the Company. The Participant shall not be deemed
to have been terminated for "Cause" hereunder unless and until there shall
have been delivered to the Participant a copy of a resolution duly adopted by
the affirmative vote of not less than a majority of the Board of Directors of
the Company then in office at a meeting of the Board called and held for such
purpose, after reasonable notice to the Participant and an opportunity for
the Participant, together with his counsel (if the Participant chooses to
have counsel present at such meeting), to be heard before the Board, finding
that, in the good faith opinion of the Board, the Participant had committed
an act constituting "Cause" as herein defined and specifying the particulars
thereof in detail. Nothing herein will limit the right of the Participant or
his beneficiaries to contest the validity or propriety of any such
determination.
(b) The term "Change in Control" means the happening of any of the
following:
(i) During any period of 24 consecutive months, ending after
the date hereof:
(A) individuals who were directors of the Company at the
beginning of such 24-month period, and
(B) any new director whose election or nomination for
election by the Board was approved by a vote of the greater of (1)
at least two-thirds (2/3), or (2) four affirmative votes, in each
case, of the directors then still in office who were either
directors at the beginning of such 24-month period or whose
election or nomination for election was previously so approved
cease for any reason to constitute a majority of the Board;
(ii) Any person or entity (other than the Company or its
subsidiary employee benefit plan or plans or any trustee of or fiduciary with
respect to such plan or plans when acting in such capacity), or any group
acting in concert, shall beneficially own, directly or indirectly, thirty
percent (30%) or more of the total voting power represented by the then
outstanding securities of the Company entitled to vote generally in the
election of directors ("Voting Securities");
(iii) Upon a merger, combination, consolidation or reorganization
of the Company, other than a merger, combination, consolidation or
reorganization which would result in (A) the Voting Securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 60% of the voting power represented by the Voting
Securities of the Company or such surviving entity outstanding immediately
after such transaction and (B) at least such 60% of voting power continuing
to be held in the aggregate by the holders of the Voting Securities of the
Company immediately prior to such transaction (conditions (A) and (B) are
referred to as the "Continuance Conditions"); or
(iv) All or substantially all of the assets of the Company are
sold or otherwise disposed of, whether in one transaction or a series of
transactions, unless the Continuance Conditions shall have been satisfied
with respect to the purchaser of such assets and such purchaser assumes the
Company's obligations under this Agreement.
(c) The term "Constructive Discharge" means (i) any reduction in the
Participant's then-current annual base salary, (ii) a material reduction in
the Participant's job function, duties or responsibilities, or a similar
change in the Participant's reporting relationships, (iii) a required
relocation of the Participant of more than 35 miles from the Participant's
current job location, or (iv) any breach of any of the terms of this
Agreement or Participant's Employment Agreement or the Amendment Agreement -
1996 Incentive Compensation by the Company which is not cured within 15 days
following written notice thereof by the Participant to the Company; provided,
however, that the term "Constructive Discharge" shall not include a specific
event described in the preceding clause (i), (ii), (iii) or (iv) unless the
Participant actually terminates his employment with the Company within 60
days after the occurrence of such event. Breaches of this Agreement or the
Amendment Agreement - 1996 Incentive Compensation shall be deemed also to
constitute breaches of the Employment Agreement.
(d) The term "Disability" means an illness or accident which
prevents the Participant, for a continuous period lasting six months, from
performing the material job duties normally associated with his position.
8. Registration and Listing. The Company shall, at its sole cost
and expense, take all necessary action to register or qualify the Shares
under the Securities Act and the Securities Exchange Act of 1934, as amended,
and to list the Shares on the NYSE (or such other principal exchange on which
the Common Stock is then listed for trading), to permit the sale of the
Shares by the Participant in compliance with the Securities Act and any state
securities laws, not later than each of the respective vesting dates for the
Shares.
9. Parachute Payments. Notwithstanding anything to the contrary
contained in this Agreement, if the Participant is a "disqualified
individual" (as that term is defined in Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code") or any successor provision thereto) and
if the lapse of the risk of forfeiture with respect to any of the Shares
would constitute an "excess parachute payment" (as that term is defined in
Section 280G of the Code or any successor provision thereto), when taken
together with any other compensation payable to the Participant, but for the
application of this sentence, then the number of Shares with respect to which
the risk of forfeiture otherwise would have lapsed under this Agreement, when
taken together with all other such compensation payable to the Participant,
shall be reduced to the minimum extent necessary (but in no event to less
than zero) so that the lapse of the risk of forfeiture of Shares, as so
reduced, does not constitute an excess parachute payment (the Shares
remaining, after such calculation, subject to the risk of forfeiture and
other restrictions hereunder, are herein referred to as the "Remaining
Shares"). The Company shall bear responsibility for performing the necessary
calculations under this Section 9 and shall indemnify the Participant, on a
grossed-up, after tax (federal, state and local) basis, for any error or
omission on the part of the Company which results in additional tax liability
to the Participant, within five calendar days following determination of the
amount of indemnity owed to the Participant. For purposes of applying this
Section 9 in connection with any similar provision in any other agreement,
the lapse of the risk of forfeiture of Shares shall be treated as the last
payment to be reduced. If this Section is triggered prior to the first
anniversary of the Date of Grant, then the Remaining Shares shall become
fully vested, and the risk of forfeiture and other restrictions herein
provided shall lapse, under Section 2 hereof, as to one-half of the Remaining
Shares on 5:00 p.m., Little Rock, Arkansas time, on each of the first and
second anniversaries of the Date of Grant.
10. Notices. Each notice relating to this Agreement must be in
writing and delivered in person or by certified mail to the proper address.
Each notice will be deemed to have been given on the date it is received.
Each notice to the Company must be addressed to it at its principal office:
2800 Cantrell Road, Little Rock, Arkansas 72202; or after December 1, 1996,
11001 Executive Center Drive, Little Rock, Arkansas 72211, attention of the
Secretary. Each notice to the Participant must be addressed to the
Participant at the Participant's address specified below. Anyone to whom a
notice may be given under this Agreement may designate a new address by
notice to that effect.
11. Amendments. The Board may, without the consent of the
Participant, amend this Agreement, or otherwise take action, to accelerate
the time at which the risk of forfeiture of the Shares and the restriction on
transfer shall lapse. The Board may not otherwise amend this Agreement
without the consent of the Participant.
12. Governing Law. This Agreement is intended to be performed in the
State of Arkansas and will be construed and enforced in accordance with and
governed by the laws of such State.
IN WITNESS WHEREOF, the Company and the Participant have executed this
Agreement, effective on the date set forth above.
FAIRFIELD COMMUNITIES, INC.
By: /s/ Russell A. Belinsky
----------------------------------
Russell A. Belinsky
Chairman, Compensation Committee
PARTICIPANT:
/s/ J. W. McConnell
----------------------------------
John W. McConnell
Social Security Number:
___________________________
Address for Notice:
___________________________
___________________________
EXHIBIT 11
FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
Year Ended December 31,
-------------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Weighted average shares:
Shares outstanding 12,464,982 12,351,622 12,265,240
Estimated increase in
shares outstanding due
to allowed claims
exceeding $85 million (1) 691,367 707,693 823,035
Less treasury stock (2,392,795) (2,395,295) (2,395,295)
Net effect of dilutive
warrants based on the
treasury stock method 641,461 415,769 376,287
---------- ---------- ----------
Totaled weighted average
shares outstanding 11,405,015 11,079,789 11,069,267
========== ========== ==========
Net earnings $14,863,000 $8,029,000 $12,269,000
=========== ========== ===========
Net earnings per share $1.30 $.72 $1.11
===== ==== =====
(1) In accordance with the terms of the plans of
reorganization, the number of shares to be issued to
unsecured claim holders will increase if the amount of
the allowed unsecured claims exceeds $85 million. The
number of shares issued will be increased to a number
equal to 10,000,000 multiplied by the quotient of the
total amount of the allowed unsecured claims divided by
$85 million. For purposes of the earnings per share
computation, the estimated amount of remaining allowed
unsecured claims totaled $5.8 million as of December
31, 1996.<PAGE>
</TABLE>
POINTS
FAIRFIELD'S FAIRSHARE PLUS PROGRAM
Fairfield's FairShare Plus program is the primary
product offered and is a major differentiating feature for
the Company. FairShare Plus is a unique points-based system
that responds to changing lifestyles, customer wants and
needs and global industry changes. The program's open-ended
structure has the flexibility to expand into any number of
vacation and travel areas deemed appropriate by the Company,
giving Fairfield the flexibility to incorporate other forms
of vacation experiences translated into symbolic point
values. These vacation facilities may include lodging in
resort hotels, cruises or other vacation opportunities.
Fairfield customers benefit from the array of vacation
opportunities available to them and the freedom to spend
their points in any number of combinations, customizing each
vacation experience. The plan provides FairShare Plus
vacation owners the opportunity to choose any resort at any
time of the year, with any size room or condominium
available and any length of stay on a reservation basis.
HOW IT WORKS
FairShare Plus vacation owners receive a deeded undivided
interest in real estate for a timeshare unit or a group of
timeshare units with a corresponding annual allotment of
points. These points can be spent in exchange for vacation
options at varying point prices. Options include location,
time of year, length of stay and unit size and type. Points
required for each option are based on demand, and points may
be applied toward a single extended stay or several shorter
stay vacations at any of Fairfield's 15 resorts with any
unit type during any season, according to established
exchange rates. Also, Fairfield makes available, on a limited
basis, the use of points to obtain a cruise vacation, a stay
at an associate timeshare location or a stay in a luxury
hotel.
Fairfield introduced FairShare Plus in 1993 and has
experienced increased sales and enhanced marketing
efficiencies ever since. Fairfield has been able to broaden
the scope of its sales and marketing efforts by selling
undivided interests that are converted into points, which
then can be spent anywhere in the Company's vacation
network. Thus, the sales focus has become the entire
property portfolio, rather than one set week each year in a
single, set location. Prospective customers now are buying
into a network of resorts and vacation experiences.
[This page contains 2 pictures which are described clockwise as follows:
A rock formation near Fairfield Flagstaff, Flagstaff, Arizona;
a sailboat in water near Fairfield Harbour, New Bern, North
Carolina]
<PAGE>
This new approach to sales has afforded Fairfield the
ability to launch off-site sales offices in the urban areas
of Atlanta, GA; Charlotte, NC; and Greensboro, NC. All of
these off-site offices have contributed to sales despite the
fact that they are not located on or near the Company's
actual resorts. Sales efforts also are able to continue in
Fairfield's on-site sales offices at locations that are not
currently developing new inventory but still offer a
constant influx of vacationers and potential customers.
An additional impact of FairShare Plus to the Company's
sales offices, both on- and off-site, can be seen in the
sale of Discovery Vacations. The Discovery Vacations program
offers prospective buyers a one-year allotment of points to
be used as a trial membership. This program has been very
beneficial for Fairfield in providing an assured flow of
potential purchasers of the perennial product and lowers the
Company's marketing costs.
Finally, the points-based product introduces numerous
opportunities for affiliations with other resort developers.
Affiliations add new resorts to Fairfield's vacation network
and broaden the vacation experiences available to existing
customers. Each new resort added makes Fairfield's product
more attractive and translates into increased sales
opportunities for Fairfield. These affiliations also provide
additional fees to the Company, as well as the opportunity
to franchise the Fairfield name.
The success of FairShare Plus has not only contributed
tremendously to the growth of the Company, it also has had
industry-wide implications. The popularity of points-based
products such as FairShare Plus is evident in the fact that
Disney and Hilton offered similar products as they entered
the industry. The structure for development, distribution
and ownership of vacation timeshare obviously has been
influenced by the demand for flexibility and ease of use
offered by points-based programs like FairShare Plus. It is
clear that FairShare Plus has helped to solidify the
Company's position as an industry leader.
[This page contains 2 charts which are described clockwise as follows:
A bar chart of Vacation Ownership, Net for each of the quarters
for the years 1994, 1995 and 1996; a pie graph of 1996 Revenues]
<PAGE>
PLACES
FAIRFIELD'S PROPERTY PORTFOLIO
Fairfield's objective is to be the leading provider of
innovative, high-quality vacation experiences in the
timeshare industry to the broadest spectrum of households
throughout the United States. To capitalize on its
innovative FairShare Plus vacation system and to achieve
its objective, Fairfield has placed an emphasis on acquiring
and developing resort properties in destination locations.
These resorts are in areas with well-known attractions and
large tourist populations. The advantage of focusing on
sites in destination locations is the reduced need for
developing large-scale amenities to attract vacationers,
yielding lower developmental risks and expenses for
Fairfield. Furthermore, large populations of prospective
customers continually pass through these areas, marking them
as prime areas for Fairfield to operate on-site sales
offices which showcase the Company's property portfolio and
contribute significantly to increased sales.
Fairfield has opened five resorts in the destination cities
of Branson, MO; Myrtle Beach, SC; Nashville, TN; Orlando,
FL; and Williamsburg, VA. Eleven of Fairfield's properties,
including all five destination location resorts, have been
awarded the Gold Crown Resort designation, the highest level
of distinction from Resort Condomiums International (RCI),
the leading industry exchange
company. Furthermore, at year end, Fairfield owned
undeveloped property at its destination resorts on which the
present master plans for those resorts provide for
approximately 778 additional units, which if sold at current
prices would represent approximately $523 million in future
sales.
NEWER DEVELOPMENTS
FAIRFIELD MYRTLE BEACH
Fairfield's second Myrtle Beach resort, SeaWatch Plantation,
is a 10-acre oceanfront property, with 640 units consisting
of a mixture of condominiums and hotel units. The initial
phase includes 97 units as well as a pool, lagoon and beachwalk.
The first building of the resort was completed in
August 1996 and the entire first phase should be completed
in 1999. The Myrtle Beach area was rated the second most
popular drive destination in the United States by the
Automobile Association of America Travel Service and
averages more than 14 million visitors per year. Fairfield
Westwinds, Fairfield's original Myrtle Beach area
development, was built in 1989.
[This page contains 2 pictures which are described clockwise as follows:
A forest near Fairfield Pagosa, Pagosa Springs, Colorado; a boy
holding a fish he caught near Fairfield Pagosa, Pagosa Springs,
Colorado]
<PAGE>
FAIRFIELD NASHVILLE
Fairfield Nashville is located on 19 acres in the music
center of Nashville, TN, adjacent to Opryland. When
completed, the resort will offer approximately 254 units. At
year end, Fairfield Nashville had 15 units completed and 31
units under construction. Amenities at Fairfield Nashville
include indoor and outdoor swimming pools, a health club,
clubhouse, fully equipped picnic areas and playgrounds. As
an estimated 10 million people visit Nashville annually, the
location of this resort is consistent with Fairfield's
strategy to expand its vacation ownership network in popular
destination locations.
FAIRFIELD ORLANDO AT CYPRESS PALMS
Fairfield Orlando at Cypress Palms is located in close
proximity to this city's world-famous attractions such as
Walt Disney World (TRADEMARK) Resort, Epcot Center, MGM Studios,
Universal Studios and Sea World. When completed, the resort
will include 244 units and a pool and whirlpool spa.
Currently, Cypress Palms has 58 units completed and 12
units under construction. Orlando and the surrounding areas
also offer other major amusement parks, exhibits and
attractions drawing visitors throughout the year, many of
whom are repeat visitors.
OTHER FAVORITES - There's Something for everyone!
Fairfield's expansive array of resorts reaches coast to
coast and offers a vast array of vacation experiences to
meet the different lifestyles and vacation needs of its
customer base. Fairfield's resort sites vary in size from
several acres to over 18,000 acres. The locations offer many
on-site amenities ranging from swimming pools and tennis
courts, at most sites, to championship golf courses,
equestrian facilities and ski slopes at some of the larger
resorts. Adults value the abundance of fine shopping and
dining surrounding Fairfield's resorts, and children enjoy
Fairfield's numerous playgrounds, recreation centers and
miniature golf courses.
Fairfield's resort properties are rated among the highest
quality vacation resorts worldwide. The exceptional
amenities available to Fairfield customers equal those of
fine, world-class hotels. The Company's one- and two-bedroom,
custom-built vacation villas offer size, luxury and
convenience that surpass the offerings of hotels and
vacation resorts. Many of Fairfield's units offer full-size,
fully equipped kitchens, fireplaces, private whirlpool spas,
VCRs, washers and dryers and more.
Fairfield Pagosa in Pagosa Springs, Colorado, is a favorite
among vacationers with a zest for active outdoor vacations.
The resort has five lakes on the property and is bordered
by two-and-a-half million acres of national forests and
wilderness. For additional outdoor adventures, Fairfield
Sapphire Valley, in Sapphire, North Carolina, lies adjacent
to the Pisgah National Forest and the Great Smokey Mountains
National Park. Opportunities for family backpacking and
hiking are virtually unlimited.
For some of the finest horseback riding, Fairfield Glade in
Tennessee offers on-site riding stables, and Sapphire
Stables in Sapphire Valley provides horseback riders with
peaceful excursions through the picturesque countryside.
Fairfield's affiliation with JB Ranch in Ocala, Florida will
provide horseback riding and ranching set among a 700-unit,
country-western-theme resort.
[This pages includes 3 pictures which are described clockwise as follows:
A picture of VOI units at Fairfield Nashville, Nashville, Tennessee;
a picture of VOI units at Fairfield Orlando at Cypress Palms,
Kissimmee, Florida; a picture of VOI units at Fairfield Myrtle Beach
at SeaWatch Plantation, Myrtle Beach, South Carolina]
<PAGE>
For winter lovers, Fairfield's network of resorts offers
opportunities for great downhill and cross-country skiing.
Fairfield Pagosa is located just miles from Wolf Creek Ski
Area, known for receiving the most snow in Colorado.
Visitors of Fairfield Flagstaff enjoy the nearby Arizona
Snowbowl. Sapphire Valley, too, offers skiing in the winter
months and golf the rest of the year.
Golf enthusiasts marvel at the opportunity to spend time at
Fairfield Glade. Located in Tennessee, Fairfield Glade
boasts one 27-hole and three 18-hole golf courses. The
scenic banks of the broad Neuse River provide a beautiful
backdrop at Fairfield Harbour in New Bern, North Carolina,
where golf is one of the resort's main attractions.
Fairfield Mountains in Lake Lure, North Carolina, offers
golfing in some of the most beautiful settings in the
Southeast. The Bald Mountain and Apple Valley golf courses
are open year-round and are set against the majestic Blue
Ridge Mountains. Almost all of the Company s resort
locations offer world-class golfing, many without even
leaving the resorts' grounds.
For family attractions, nothing beats Fairfield's
destination resorts in Branson, Missouri, and Williamsburg,
Virginia. Branson is hailed as America's Country Music Show
Capital. The area draws the biggest names in country and
bluegrass music year-round to over 30 indoor theatres all on
a 10-mile stretch. Outdoor activities in Branson include
boating, fishing, swimming, waterskiing, sailing, scuba
diving and parasailing. Fairfield Williamsburg is located
just three miles from the world-famous Colonial Williamsburg
Historic Area, 10 miles from Jamestown, the first English-
speaking settlement, and 15 miles from Yorktown, where the
last battle of the American Revolution was fought.
Furthermore, just three miles from the resort are the more
contemporary sights and thrills of Busch Gardens' amusement
park.
Relaxation is an important aspect of a vacation, especially
after participating in all of the exciting activities
available to Fairfield members. Fairfield s property
portfolio offers some of the finest "getaway vacation" resorts
in the nation. Fairfield Ocean Ridge, in Edisto Island,
South Carolina, situated on one of the most beautiful and
least commercialized beach areas on the East Coast.
Fairfield Plantation, in Villa Rica, Georgia, is an entire
resort community focused on the great Southern tradition of
living a good life year-round. This resort features three
lakes, three outdoor swimming pools and its own private
beach, not to mention lighted tennis courts at the tennis
center and a convenient location just 45 miles west of
Atlanta, Georgia.
Each resort in Fairfield's property portfolio has its own
personality and is strategically located near popular U.S.
tourist destinations or popular getaway locations across
the country.
The quality of Fairfield's properties is matched only by the
service the Company provides its customers. Fairfield takes
a proactive approach in keeping customers happy, and
internal surveys show that Fairfield, in recent years, has
maintained customer satisfaction ratings in excess of 90%.
[This page contains a picture of a lady on a golf course at Fairfield
Bay, Fairfield Bay, Arkansas]
<PAGE>
PROPERTY PORTFOLIO
DESTINATION RESORTS
Fairfield Branson- Branson, MO
Fairfield Myrtle Beach- Myrtle Beach, SC
Fairfield Nashville- Nashville, TN
Fairfield Orlando at Cypress Palms- Kissimmee, FL
Fairfield Williamsburg- Williamsburg, VA
REGIONAL RESORTS
Fairfield Bay- Fairfield Bay, AR
Fairfield Flagstaf- Flagstaff, AZ
Fairfield Glade- Fairfield Glade, TN
Fairfield Harbour- New Bern, NC
Fairfield Mountains- Lake Lure, NC
Fairfield Ocean Ridge- Edisto Island, SC
Fairfield Pagosa- Pagosa Springs, CO
Fairfield Plantation- Villa Rica, GA
Fairfield Sapphire Valley- Sapphire, NC
Harbortown Point- Ventura, CA
[This page contains 1 picture and 3 charts which are described clockwise
as follows:
A picture of a waterfall; a bar chart of Net Interest Spread for the years
ended December 31, 1994, 1995 and 1996; a bar chart of Earnings Per Share
for the six months ended December 31, 1992 and the years ended December 31,
1993, 1994, 1995 and 1996; a bar chart of Stockholders' Equity at December
31, 1992, 1993, 1994, 1995 and 1996]
<PAGE>
COMMON STOCK PRICES
Effective December 20, 1995, Fairfield's Common Stock began
trading on the New York Stock Exchange under the symbol FFD. Prior to
that date, Fairfield's Common Stock traded on The Nasdaq Stock Market
under the symbol FFCI. The approximate number of recordholders of
Fairfield's Common Stock at January 31, 1997 was 2,600. The Company has
paid no dividends in the past two years.
High and low stock prices during 1996 and 1995 were as follows:
1996 1995
-------------- --------------
Quarter Ended High Low High Low
------------- ---- --- ---- ----
March 31 $ 9 1/4 $ 6 1/2 $6 1/8 $4 1/2
June 30 15 1/4 8 5/8 6 5 1/4
September 30 21 5/8 13 1/4 8 1/4 5 1/2
December 31 25 3/4 18 3/8 8 1/4 5 7/8
Certain of the Company's financing arrangements prohibit the
Company from paying cash dividends or making other distributions on its
Common Stock.
FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL AND OTHER DATA
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
<TABLE>
Six Months
Ended
Year Ended December 31, December 31,
----------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
OPERATING DATA
Revenues:
Vacation ownership,
net $114,592 $ 85,460 $ 53,085 $ 33,472 $15,255
Lots, net 8,735 7,817 7,981 7,399 1,704
Resort
management 14,644 13,178 10,206 9,779 5,043
Interest 19,994 19,111 20,366 24,089 14,670
Other 14,513 15,209 13,709 14,270 7,062
Gain on sale of
First Federal - - 5,200 - -
Savings and loan
operations - - - 18,762 10,099
-------- -------- -------- -------- -------
$172,478 $140,775 $110,547 $107,771 $53,833
======== ======== ======== ======== =======
Net earnings $14,863 $ 8,029 $12,269 $7,170 $1,249
======= ======== ======= ====== ======
Net earnings
per share $1.30 $.72 $1.11 $.65 $.11
===== ==== ===== ==== ====
Weighted average shares
outstanding 11,405,015 11,079,789 11,069,267 11,037,765 11,134,117
========== ========== ========== ========== ==========
OTHER DATA
Cash flows provided by (used in):
Operating
activities $ 36,716 $ 8,654 $12,927 $ 9,500 $ 6,842
Investing
activities $(21,562) $ 2,061 $(5,253) $ 12,661 $ 45,070
Financing
activities $(10,241) $(22,261) $ 1,492 $(78,607) $(34,577)
Number of resorts 15 15 15 13 12
Number of off-site
sales offices 3 2 2 1 1
BALANCE SHEET DATA (AT PERIOD END)
Loans receivable,
net $152,069 $139,674 $139,810 $167,465 $381,844
Total assets 253,799 215,518 224,726 245,073 586,700
Total financing
arrangements 58,110 86,982 111,943 112,581 180,812
Stockholders'
equity 134,299 81,227 66,935 47,148 36,962
Book value
per share $11.45 $7.64 $6.27 $4.39 $3.32
</TABLE>
Note: Effective June 30, 1992, the Company
implemented "Fresh Start Reporting" in
connection with confirmation of the plans of
reorganization. No dividends have been paid
during the previous five years. See Note 14
of "Notes to Consolidated Financial
Statements" for discussion of the Company's
contingencies.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Vacation Ownership
------------------
Gross revenues of vacation ownership interests
("VOIs") totaled $116.1 million, $86.2 million and $52.9
million for 1996, 1995 and 1994, respectively. During
1996, the Company experienced sales increases at several
of its developments, including its destination resorts
located in Orlando, Florida; Nashville, Tennessee;
Branson, Missouri and Myrtle Beach, South Carolina. Of
the increase in gross VOI revenues from 1994 to 1995,
$15.6 million (47%) was attributable to additional sales
volumes at the Company's newest destination resorts
located in Orlando, Florida and Nashville, Tennessee,
both of which began sales efforts in December 1994. The
Company's growth strategy includes the (i) acquisition
and development of properties in new destination
locations, (ii) further development at its existing
destination resorts and (iii) expansion of its sales and
marketing programs, including the establishment of
additional off-site sales offices. Future sales growth
should be realized as the Company continues to direct its
opportunities to destination locations which have a
higher and more consistent stream of potential customers
generated by the existing attractions.
Net VOI revenues increased to $114.6 million for the
year ended December 31, 1996 from $85.5 million in 1995
and $53.1 million in 1994. The increase in net VOI
revenues is attributable to the same factors as noted
above, which was partially offset, during 1996, by a net
deferral of VOI revenues totaling $1.5 million related to
the percentage of completion method of accounting. The
Company recognized a net deferral of $.7 million during
1995 as compared to net revenue recognized of $.2 million
during 1994. Under the percentage of completion method
of accounting, the portion of revenues attributable to
costs incurred, as compared to total estimated
construction and selling costs, is recognized in the
period of sale. The remaining revenue is deferred and
recognized as remaining costs are incurred.
Cost of VOI sales, as a percentage of related net
revenues, was 25.5%, 27.9% and 28.2% for 1996, 1995 and
1994, respectively. The decrease in 1996 resulted
primarily from increased sales of residual fixed week
inventory at the Company's more mature locations. Sales
of this limited fixed week inventory are not expected to
occur to this extent in the future, but will occur from
time to time. <PAGE>
Selling
-------
Selling expenses, including commissions, for both
VOI and lot sales, as a percentage of related revenues,
were 51.1%, 54.1% and 50.6%, for 1996, 1995 and 1994,
respectively. The decrease from 1995 to 1996 is
primarily attributable to efficiencies experienced at the
Company's destination resorts in Orlando, Florida and
Nashville, Tennessee. The increase in selling expenses
from 1994 to 1995, as a percentage of related revenues,
was primarily attributable to inefficiencies experienced
at these destination resorts which, as noted above, began
sales efforts in December 1994. New projects typically
experience lower operating margins in the "start-up"
phase of operations as the Company develops its property
owner base and establishes an efficient sales and
marketing program at each new location. Management
continues to work to improve sales efficiencies at its
newer resorts and future efficiencies are expected as
these projects mature and expand their bases of property
owners.
General and Administrative
--------------------------
Increases in general and administrative expenses
during 1996 and 1995 resulted primarily from the
additional expenses incurred resulting from the increased
VOI sales volumes as previously discussed, and increased
expenses related to the Company's employee incentive
compensation/benefit plans (see Note 12 of "Notes to
Consolidated Financial Statements"). As a percentage of
total revenues, general and administrative expenses
increased slightly to 8.8% in 1996 as compared to 8.4% in
1995. During 1994, general and administrative expenses,
as a percentage of total revenues, were 9.9%, exclusive
of the gain on sale of First Federal.
Gain on Sale of First Federal
-----------------------------
In 1994, Fairfield sold 100% of the capital stock of
First Federal Savings and Loan Association of Charlotte
("First Federal") for $41.0 million and recognized a net
gain on the sale of $5.2 million. The gain from the sale
of First Federal was not subject to federal income tax
due to a permanent tax basis difference in First
Federal's stock and underlying goodwill.
Included in "Restricted cash and escrow accounts" at
December 31, 1996 is $2.8 million representing certain
assets retained and/or pledged to the buyer to securitize
Fairfield's obligation to indemnify the buyer against
general indemnities and two remaining lawsuits/claims
which have been asserted against First Federal.
Approximately $1.5 million of this amount is scheduled to
be released in March 1997 unless the buyer asserts a
claim for indemnification. <PAGE>
Interest
--------
Interest income totaled $20.0 million, $19.1 million
and $20.4 million in 1996, 1995 and 1994, respectively.
The increase in interest income in 1996 from 1995 is
primarily attributable to a higher average balance of
outstanding contracts receivable, totaling $142.8 million
in 1996, as compared to $135.8 million for 1995.
Interest income decreased in 1995, as compared to 1994, due
to a higher average balance of contracts receivable
outstanding in 1994 totaling $146.2 million. The
weighted average stated interest rate of the Company's
contracts receivable was 13.6%, 13.2% and 12.6% at
December 31, 1996, 1995 and 1994, respectively. Interest
income is expected to increase in tandem with the net
increase in contracts receivable.
Interest expense totaled $6.8 million, $8.6 million
and $10.5 million in 1996, 1995 and 1994, respectively.
These decreases are primarily attributable to reductions
in the average outstanding balances of interest-bearing
debt. The average outstanding balance of interest-
bearing debt has decreased from $138.5 million in 1994 to
$97.4 million in 1995 and $75.8 million in 1996. The
weighted average interest rate for the Company's
financing arrangements collateralized by contracts
receivable, including certain fees and expenses, was
8.6%, 8.1% and 8.4% for the years ended December 31,
1996, 1995 and 1994, respectively.
Other
-----
Other revenues in 1996, 1995 and 1994 include home
sales totaling $8.8 million, $6.7 million and $5.9
million, respectively. Also included in other revenues
for 1996, 1995 and 1994 are cash distributions totaling
$.1 million, $1.6 million and $1.2 million, respectively,
related to the Company's 35% partnership interest in
Harbour Ridge, Ltd., a limited partnership engaged in the
development of a tract of land in St. Lucie, Florida. No
additional revenues from this partnership are anticipated
(see Note 11 of "Notes to Consolidated Financial Statements").
Other expenses for 1996, 1995 and 1994 include costs
of home sales, including selling expenses, totaling $8.2
million, $6.0 million and $5.4 million, respectively.
During the fourth quarter of 1996, the Company
recorded a valuation adjustment of $1.0 million based on
current information that indicated the carrying value of
the assets collateralizing the Senior Subordinated
Secured Notes (the "FCI Notes") was in excess of the fair
value. This valuation adjustment is included in "Other
expenses" in the 1996 Consolidated Statement of Earnings.
PROVISION FOR INCOME TAXES
The Company provides for income taxes in accordance
with Statement of Financial Accounting Standards ("SFAS")
No. 109, "Accounting for Income Taxes." Under SFAS No.
109, deferred tax assets or liabilities are determined
based on the difference between the financial reporting
and tax basis of assets and liabilities and enacted tax
rates that will be in effect for the year in which the
differences are expected to reverse. Additionally, under
SFAS No. 109, a valuation allowance must be established
for deferred tax assets if, based on available evidence,
it is "more likely than not" that all or a portion of the
deferred tax assets will not be realized.
At December 31, 1996, the Company had net operating
loss carryforwards totaling $72.6 million which reflect
the amount available to offset taxable income in future
periods. The Company's net operating loss carryforwards
increase primarily from the use of the installment sale
method of reporting income and are substantially offset by
an increase in deferred tax liabilities. Under
limitations imposed by Internal Revenue Code Section 382
("Section 382"), certain potential changes in ownership
of the Company, which may be outside the Company's
knowledge or control, may restrict future utilization of
these carryforwards. More specifically, changes in
ownership occurring within a rolling three-year period,
taking into consideration filings with the Securities and
Exchange Commission on Schedules 13D and 13G by holders
of 5% or more of Fairfield's Common Stock, whether
involving the acquisition or disposition of Fairfield's
Common Stock, may impose a material limitation on the
Company's use of these carryforwards. If an ownership
change triggers the Section 382 limitations, the annual
limitation imposed on the use of pre-change carryforwards
under present law is an amount equal to the value of the
Company immediately before the ownership change
multiplied by the federally prescribed long-term tax-
exempt rate for the period in which the change occurs.
Available carryovers, if not utilized, expire as follows:
2005 - $12.6 million; 2006 - $7.8 million; 2007 - $13.9
million; 2008 - $5.4 million; 2009 - $3.3 million; 2010 -
$16.1 million and 2011 - $13.5 million.
Fresh Start Reporting requires the Company to report
federal income tax expense on income before utilization
of pre-confirmation net operating loss carryforwards and
recognition of the benefit of pre-confirmation deductible
temporary differences. Benefits realized from the
utilization of pre-confirmation net operating loss
carryforwards and recognition of pre-confirmation
deductible temporary differences are recorded as
reductions of the valuation allowance and as additions to
paid-in capital. The Company recorded benefits from the
utilization of pre-confirmation tax attributes totaling
$19.1 million, $6.3 million and $7.5 million for 1996, <PAGE>
1995 and 1994, respectively. The Company has reported
operating earnings since the effective date of the plans
of reorganization and management believes that it is more
likely than not that future taxable earnings will be
sufficient to realize the tax benefits associated with
the future deductible temporary differences and net
operating loss carryforwards prior to their expiration;
therefore, the Company eliminated the remaining valuation
allowance in 1996.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents of the Company increased
$4.9 million from December 31, 1995 to December 31, 1996.
This increase is primarily attributable to $36.7 million
of cash provided by operating activities, which was
partially offset by (i) $21.6 million of cash used in
investing activities attributable primarily to
originations of loans receivable exceeding principal
collections and the construction of the Company's
corporate office at a cost of $5.9 million and (ii) $10.2
million of cash used in financing activities attributable
primarily to the net reduction of financing arrangements
totaling $28.9 million, which was partially offset by the
proceeds from the public stock offering.
The Company generates cash for operations primarily
from the sale and financing of VOIs which include (i)
cash sales, (ii) customer down payments, (iii) principal
collections on its contracts receivable and (iv)
borrowing availability generated by customer contracts
receivable in amounts which typically range from 65% to
75% of the outstanding balance of the contracts
receivable. The Company generates additional cash from
the financing of VOI sales equal to the difference
between the interest charged on the customer contracts
receivable (which averaged 13.6% for the year ended
December 31, 1996) and the interest paid on the related
borrowings (which averaged 8.6% for the year ended
December 31, 1996).
Historically, funds from operating cash flows,
borrowings and asset sales have been used to fund certain
costs which support the Company's sales efforts
(primarily development and marketing costs). In the
recent past, the Company has begun to securitize its
contracts receivable in an effort to lower the cost of
borrowed funds and maintain borrowing availability under
its credit facilities. The Company expects to finance
its short- and long-term cash needs from (i) contract
payments generated from its contracts receivable
portfolio, (ii) operating cash flows, (iii) borrowings
under its credit facilities as described below and (iv)
future financings, including additional securitizations <PAGE>
of contracts receivable.
In November 1996, the Company completed an
underwritten public offering of 900,000 shares of Common
Stock at a price of $21.63 per share (the "Offering").
The net proceeds from the Offering of $17.7 million were
used to repay certain indebtedness, totaling $9.1
million, including accrued interest of $2.7 million,
issued in connection with the Company's reorganization
and to temporarily pay down the outstanding indebtedness
under the Company's revolving credit agreements, with the
remaining balance of $3.8 million invested in short-term
investment grade securities (included in "Cash and cash
equivalents" in the Consolidated Balance Sheet at
December 31, 1996). In February 1997, the Company was
able to draw $7.9 million against its revolving credit
agreements to repay, in part, the outstanding indebtedness
under the FCI Notes (see Note 11 of "Notes to Consolidated
Financial Statements").
In October 1996, Fairfield Capital Corporation
("FCC"), a wholly owned subsidiary of FAC, amended its
Credit Agreement (the "FCC Agreement") which provides for
total borrowings of up to $90.0 million (the "FCC Notes")
for the purchase of contracts receivable from FAC
pursuant to the Amended and Restated Receivables Purchase
Agreement, among Fairfield as originator, FAC as seller
and FCC as purchaser. At December 31, 1996, borrowings
outstanding under the FCC Agreement totaled $29.9
million. The FCC Agreement provides for two additional
fundings of up to a total of $55.0 million prior to
October 1997.
At December 31, 1996, Fairfield Funding Corporation
("FFC"), a wholly owned subsidiary of FAC, had borrowings
outstanding totaling $24.4 million under a private
placement of 7.6% Notes (the "FFC Notes"). The FFC Notes
are secured by and payable from a pool of contracts
receivable purchased from FAC pursuant to the Receivables
Purchase Agreement among Fairfield as originator, FAC as
seller and FFC as purchaser. At December 31, 1996,
contracts receivable totaling $38.0 million
collateralized the FFC Notes.
At December 31, 1996, Fairfield had no borrowings
outstanding under its Amended and Restated Revolving
Credit Agreement (the "FCI Agreement"). The FCI
Agreement provides for revolving loans of up to $25.0
million, including up to $7.0 million for letters of
credit. The revolving loans mature on January 1, 1999,
if not extended in accordance with the terms of the FCI
Agreement. At December 31, 1996, Fairfield had borrowing
availability of $23.3 million, net of outstanding letters
of credit totaling $1.7 million.
At December 31, 1996, FAC had no borrowings <PAGE>
outstanding under its Third Amended and Restated
Revolving Credit Agreement (the "FAC Agreement"). The
FAC Agreement provides for revolving loans of up to $35.0
million, including up to $1.0 million for letters of
credit. The revolving loans mature on January 1, 1999,
if not extended in accordance with the terms of the FAC
Agreement, with Fairfield being a guarantor pursuant to
the FAC Agreement. At December 31, 1996, FAC had
borrowing availability of $19.1 million.
FINANCIAL CONDITION
Total consolidated assets of the Company increased
$38.3 million from December 31, 1995 to December 31,
1996. This increase is primarily attributable to (i) an
increase in net loans receivable of $12.4 million related
to originations of loans receivable exceeding principal
collections, (ii) an increase in net deferred tax assets
of $11.6 million attributable to the elimination of the
remaining valuation allowance related thereto (see Note 8
of "Notes to Consolidated Financial Statements") and
(iii) a $6.2 million increase in net property and
equipment related primarily to the construction of the
Company's corporate office. Total consolidated
liabilities of the Company decreased $14.8 million in
1996 due to a net reduction in the Company's financing
arrangements of $28.9 million which was partially offset
by (i) a $6.0 million increase in net liabilities of
assets held for sale and (ii) a $4.1 million increase in
accounts payable related to increased sales volumes.
Total stockholders' equity increased by $53.1
million from December 31, 1995 to December 31, 1996. In
addition to current year net earnings of $14.9 million,
the increase in stockholders equity is primarily
attributable to the utilization of pre-confirmation
income tax attributes totaling $19.1 million and the net
proceeds from the Offering totaling $17.7 million (see
Notes 8 and 9 of "Notes to Consolidated Financial
Statements").
SEASONALITY
The Company has historically experienced and expects
to continue to experience seasonal fluctuations in its
gross revenues and net earnings from the sale of VOIs,
which have been generally higher in the second and third
quarters. This seasonality may cause significant
fluctuations in the quarterly operating results of the
Company. In addition, additional material fluctuations
in operating results may occur due to the timing of
construction of future VOI inventory and the Company's
use of the percentage of completion method of accounting
for recognizing revenues and related expenses on <PAGE>
incomplete buildings.
IMPACT OF INFLATION
Inflation and changing prices have not had a
material impact on the Company's revenues and net
earnings during any of the Company's three most recent
years. Due to the current economic climate, the Company
does not expect that inflation and changing prices will
have a material impact on the Company's revenues or net
earnings. To the extent inflationary trends affect
short-term interest rates, a portion of the Company's
debt service costs may be affected as well as the rates
the Company charges on its contracts receivable. To the
extent permitted by competition, the Company passes
increased costs on to its customers through increased
sales prices. <PAGE>
FORWARD-LOOKING INFORMATION
This Management's Discussion and Analysis of Financial
Condition and Results of Operations, other future filings by the
Company with the Securities and Exchange Commission and other
oral and written statements by the Company and its management
may include certain forward-looking statements, including
(without limitation) statements with respect to anticipated
future operating and financial performance, growth opportunities
and growth rates, acquisition opportunities and other similar
forecasts and statements of expectation. Words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "estimates,"
and "should," and variations of these words and similar expressions,
are intended to identify these forward-looking statements.
Forward-looking statements made by the Company and its management
are based on estimates, projections, beliefs and assumptions of
management at the time of such statements and are not guarantees
of future performance. The Company disclaims any obligation to
update or revise any forward-looking statement based on the
occurence of future events, the receipt of new information,
or otherwise.
Actual future performance, outcomes and results may differ
materially from those expressed in forward-looking statements
made by the Company and its management as a result of a number
of risks, uncertainties and assumptions. Representative
examples of these factors include (without
limitation) general industry and economic conditions; interest
rate trends; cost of capital and capital requirements;
availability of real estate properties; competition from
national hospitality companies; shifts in customer demand;
changes in operating expenses, including employee wages,
benefits and training; governmental and public policy changes
and the continued availability of financing in the amounts,
at the terms and on the conditions necessary to support the
Company's future business.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Stockholders and Board of Directors
Fairfield Communities, Inc.
We have audited the accompanying consolidated
balance sheets of Fairfield Communities, Inc. and
subsidiaries as of December 31, 1996 and 1995, and the
related consolidated statements of earnings,
stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1996. These
financial statements are the responsibility of the
Company's management. Our responsibility is to express
an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free
of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also
includes assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the consolidated financial
statements referred to above present fairly, in all
material respects, the consolidated financial position of
Fairfield Communities, Inc. and subsidiaries at December
31, 1996 and 1995, and the consolidated results of their
operations and their cash flows for each of the three
years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Little Rock, Arkansas
January 29, 1997,
except for Note 11, as to which the date is
February 28, 1997 <PAGE>
FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PAR VALUE)
<TABLE>
December 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 7,008 $ 2,095
Loans receivable, net 152,069 139,674
Real estate inventories 42,284 40,552
Restricted cash and escrow accounts 7,777 8,194
Property and equipment, net 14,527 8,311
Deferred tax assets, net 16,576 5,006
Other assets 13,558 11,686
-------- --------
$253,799 $215,518
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Financing arrangements $ 58,110 $ 86,982
Deferred revenue 20,332 19,791
Accounts payable 7,171 3,074
Net liabilities of assets held for sale 8,293 2,267
Other liabilities 25,594 22,177
-------- --------
119,500 134,291
-------- --------
Stockholders' Equity:
Common stock, $.01 par value,
25,000,000 shares authorized,
13,384,741 shares issued in 1996
and 12,325,848 in 1995 134 124
Paid-in capital 91,879 52,386
Retained earnings 43,580 28,717
Unamortized value of restricted stock (1,294) -
Treasury stock, at cost, 2,335,295
shares in 1996 and 2,395,295
shares in 1995 - -
-------- --------
134,299 81,227
-------- --------
$253,799 $215,518
======== ========
</TABLE>
See notes to consolidated financial statements. <PAGE>
FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
Year Ended December 31,
----------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
REVENUES
Vacation ownership, net $114,592 $ 85,460 $ 53,085
Lots, net 8,735 7,817 7,981
Resort management 14,644 13,178 10,206
Interest 19,994 19,111 20,366
Other 14,513 15,209 13,709
Gain on sale of First Federal, net - - 5,200
-------- -------- --------
172,478 140,775 110,547
-------- -------- --------
EXPENSES
Cost of sales:
Vacation ownership 29,249 23,838 14,958
Lots 2,068 1,970 1,855
Provision for loan losses 5,390 6,505 4,430
Selling 63,243 50,738 31,176
Resort management 12,593 11,730 8,784
General and administrative 15,223 11,844 10,456
Interest 6,757 8,562 10,528
Other 13,461 12,550 13,213
-------- -------- --------
147,984 127,737 95,400
-------- -------- --------
Earnings before provision
for income taxes 24,494 13,038 15,147
Provision for income taxes 9,631 5,009 2,878
-------- -------- --------
Net earnings $ 14,863 $ 8,029 $ 12,269
======== ======== ========
NET EARNINGS PER SHARE $1.30 $.72 $1.11
===== ==== =====
WEIGHTED AVERAGE SHARES
OUTSTANDING 11,405,015 11,079,789 11,069,267
========== ========== ==========
</TABLE>
See notes to consolidated financial statements.
FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
Unamortized
value of
Common Paid-in Retained Restricted
Stock Capital Earnings Stock Total
----- ------- -------- ----- -----
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1994 $ 124 $38,605 $ 8,419 $ - $ 47,148
Net earnings - - 12,269 - 12,269
Utilization of pre-confirmation
income tax attributes - 7,518 - - 7,518
----- ------- ------- ------ --------
Balance, December 31, 1994 124 46,123 20,688 - 66,935
Net earnings - - 8,029 - 8,029
Utilization of pre-confirmation
income tax attributes - 6,263 - - 6,263
----- ------- ------- ------ --------
Balance, December 31, 1995 124 52,386 28,717 - 81,227
Net earnings - - 14,863 - 14,863
Utilization of pre-confirmation
income tax attributes - 19,108 - - 19,108
Net proceeds of stock offering 9 17,728 - - 17,737
Issuance of restricted stock - 1,380 - (1,380) -
Amortization of unearned
compensation - restricted stock - - - 86 86
Exercise of stock warrants 1 476 - - 477
Tax benefit from exercise
of stock warrants - 801 - - 801
----- ------- ------- ------- -------
Balance, December 31, 1996 $ 134 $91,879 $43,580 $(1,294)$134,299
===== ======= ======= ======= ========
</TABLE>
See notes to consolidated financial statements.
FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
Year Ended December 31,
-----------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net earnings $ 14,863 $ 8,029 $ 12,269
Adjustments to reconcile
net earnings to net cash provided
by operating activities:
Depreciation 2,164 1,435 923
Amortization 1,007 696 336
Provision for loan losses 5,390 6,505 4,430
Utilization of pre-confirmation
income tax attributes 19,108 6,263 7,518
Earnings from unconsolidated
affiliates (88) (1,588) (1,236)
Tax benefit from exercise
of stock warrants 801 - -
Gain on sale of First Federal - - (5,200)
Changes in operating assets and liabilities:
Real estate inventories (1,343) (8,645) 220
Other (5,186) (4,041) (6,333)
-------- ------- --------
Net cash provided by operating
activities 36,716 8,654 12,927
-------- ------- --------
INVESTING ACTIVITIES:
Purchases of property and
equipment, net (8,306) (3,384) (572)
Principal collections on
loans receivable 84,888 73,943 73,189
Originations of loans receivable (100,535) (79,461) (51,877)
Cash distributions from
unconsolidated affiliates 882 1,588 1,236
Net investment activities of net
liabilities of assets held for sale 1,509 9,375 (9,563)
Net cash used on sale of First Federal - - (17,666)
-------- -------- --------
Net cash (used in) provided
by investing activities (21,562) 2,061 (5,253)
-------- -------- --------
FINANCING ACTIVITIES:
Proceeds from financing
arrangements 294,012 226,870 219,744
Repayments of financing
arrangements (322,884) (251,831) (220,627)
Net proceeds of stock offering 17,737 - -
Exercise of stock warrants 477 - -
Net decrease in restricted
cash and escrow accounts 417 2,700 2,375
--------- --------- ---------
Net cash (used in) provided
by financing activities (10,241) (22,261) 1,492
--------- --------- ---------
Net increase (decrease) in cash
and cash equivalents 4,913 (11,546) 9,166
Cash and cash equivalents,
beginning of year 2,095 13,641 4,475
--------- --------- ---------
Cash and cash equivalents,
end of year $ 7,008 $ 2,095 $ 13,641
========= ========= =========
</TABLE>
See notes to consolidated financial statements.
FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ------ -----------------------------------------------------------
Organization
- -----------
Fairfield Communities, Inc. ("Fairfield" and together with its
subsidiaries, the "Company") is the largest vacation ownership company in the
United States in terms of property owners and vacation units constructed. The
Company's 15 resorts are located in 11 states; five resorts are in destination
areas with popular vacation attractions and 10 regional resorts are in scenic
locations.
The Company's primary business is selling vacation ownership interests
("VOIs"), commonly known as timeshares, primarily through its innovative
points-based vacation system, Fairshare Plus. The Company also offers
financing for VOI purchasers through its wholly owned subsidiary, Fairfield
Acceptance Corporation ("FAC"), which results in the creation of high-quality,
medium-term contracts receivable with attractive yields. FAC holds these
contracts in its portfolio and, in the recent past, has begun to securitize
its contracts receivable in an effort to lower the costs of borrowed funds and
maintain borrowing availability under its credit facilities.
Principles of Consolidation
- ---------------------------
The consolidated financial statements include the accounts of Fairfield
and its wholly owned subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation. Certain amounts in the
consolidated financial statements of prior years have been reclassified to
conform to the 1996 presentation.
Use of Estimates
- ----------------
The preparation of the consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the consolidated
financial statements and accompanying notes. Actual results could differ from
those estimates.
Cash and Cash Equivalents
- -------------------------
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
Property and Equipment
- ----------------------
Property and equipment are recorded at cost and depreciated primarily by
the straight-line method based on the estimated useful lives of the assets,
ranging generally from 10 to 25 years for buildings and from two to seven <PAGE>
years for machinery, fixtures and equipment. Additions and improvements are
capitalized while maintenance and repairs are expensed as incurred. Asset and
accumulated depreciation accounts are relieved for dispositions with resulting
gains or losses reflected in operations.
Real Estate Inventories
- -----------------------
Real estate inventories are valued at the lower of cost or estimated net
realizable value. Costs include land, land improvements, capitalized interest
and a portion of the costs of amenities constructed for the use and benefit of
property owners.
Land and improvement costs are allocated for the purpose of accumulating
costs to match with related sales revenues. The Company allocates acquisition
and carrying costs to these areas on the acreage or the value basis, as
appropriate. Improvement costs in each project are allocated to the
appropriate areas on a specific identification basis. Certain amenity costs
are allocated on an acreage or benefit basis, as appropriate.
Unexpended costs for committed improvements to areas from which lots
have been sold are calculated using the Company's projections of the timing
and cost of work to be completed, including an inflation factor. The
projections are reviewed and refined periodically based on work completed and
current plans for development. The effect of these revised cost estimates is
recognized prospectively.
Allowance for Loan Losses
- -------------------------
Contracts
---------
The Company's contracts receivable are regionally diversified.
Generally, VOIs and lots are sold under installment contracts requiring a 15%
down payment and monthly installments, including interest, for periods of up
to seven years. The Company provides for losses on contracts receivable by a
charge against earnings at the time of sale at a rate based upon historical
cancellation experience and management's estimate of future losses.
When a contract is cancelled in a year subsequent to the year in which
the underlying sale was recorded, the outstanding balance, less recoverable
costs, is charged to the allowance for loan losses. When a contract is
cancelled in the same year as the related sale, all entries applicable to the
sale are reversed and nonrecoverable selling expenses are charged to
operations. For financial statement purposes, contracts receivable are
considered delinquent and fully reserved if a payment remains unpaid under the
following conditions:
Percent of Contract Delinquency
Price Paid Period
------------------- -----------
Less than 25% 90 days
25% but less than 50% 120 days
50% and over 150 days
Mortgages
---------
The Company's mortgages receivable consist of a small number of non- <PAGE>
homogeneous loans collateralized primarily by real estate geographically
dispersed throughout the country. The allowance for mortgages receivable is
maintained at a level believed adequate by management based on a periodic
evaluation of each mortgage receivable. Management's evaluation of the
adequacy of this allowance is based on past loss experience, known inherent
risks in the portfolio, adverse situations that may affect the borrower's
ability to repay (including the timing of future payments), the estimated
value of any underlying collateral, composition of the mortgage receivable
portfolio, current economic conditions and other relevant factors. This
evaluation is inherently subjective as it requires material estimates
including the amounts and timing of future cash flows.
Revenue and Profit Recognition
- ------------------------------
Vacation Ownership Interests
---------------------------
VOIs consist of either undivided fee simple interests or specified fixed
week interval ownership in fully furnished vacation homes. VOI revenue is
recognized when a 10% minimum down payment (including interest) has been
received. Revenue relating to sales of VOIs in projects under construction is
recognized using the percentage of completion method. Under this method, the
portion of revenues applicable to costs incurred, as compared to total
estimated construction and selling costs, is recognized in the period of sale.
The remaining revenue is deferred and recognized as the remaining costs are
incurred.
Deposits and Deferred Selling Costs
-----------------------------------
Until a contract for sale qualifies for revenue recognition, all
payments received are accounted for as deposits. Commissions and other
selling costs, directly attributable to the sale, are deferred until the sale
is recorded. If a contract is cancelled before qualifying as a sale,
nonrecoverable selling expenses are charged to expense and deposits forfeited
are credited to income.
Earnings Per Share
- ------------------
Earnings per share is computed based on the estimated weighted average
number of common shares and common equivalent shares deemed to be outstanding.
Such shares include those shares issued as authorized by the Company's plans
of reorganization plus the additional shares estimated to be issued based on
the resolution of the remaining allowed claims (see Note 9). This aggregate
number of shares has been reduced by the shares held in treasury.
In prior years, the calculation of fully diluted earnings per share
included certain contingent shares associated with the FCI Notes (see Note
11). At December 31, 1996, management determined that it was more likely than
not that the contingent shares would not be issued and, therefore, such shares
were excluded from the fully diluted earnings per share calculation. After
restatement, the dilutive effect of common stock equivalents on the fully
diluted earnings per share calculations in both the current and prior years is
not significant and, therefore, fully diluted earnings per share are not
presented.
Income Taxes
- ------------
The Company provides for income taxes in accordance with Statement of <PAGE>
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income
Taxes." Under SFAS No. 109, deferred tax assets or liabilities are determined
based on the difference between the financial reporting and tax basis of
assets and liabilities and enacted tax rates that will be in effect for the
year in which the differences are expected to reverse. Additionally, under
SFAS No. 109, a valuation allowance must be established for deferred tax
assets if, based on available evidence, it is "more likely than not" that all
or a portion of the deferred tax assets will not be realized.
In connection with the Company's 1992 reorganization under Chapter 11 of
the Bankruptcy Code, the Company implemented, as of June 30, 1992, the
provisions of the American Institute of Certified Public Accountants'
Statement of Position 90-7, "Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code" ("Fresh Start Reporting"). Fresh Start Reporting
requires the Company to report federal income tax expense on income before
utilization of pre-confirmation net operating loss carryforwards and
recognition of the benefit of pre-confirmation deductible temporary
differences. Benefits realized from the utilization of pre-confirmation net
operating loss carryforwards and recognition of pre-confirmation deductible
temporary differences are recorded as reductions of the valuation allowance
and as additions to paid-in capital.
Stock-Based Compensation
- ------------------------
In accordance with the provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation," companies can elect to account for stock-based
compensation plans using a fair value based method or continue measuring
compensation expense using the intrinsic value method prescribed in Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees." The Company has elected to continue to account for stock-based
compensation using the intrinsic value method and, accordingly, the Company
will recognize no compensation expense for stock warrant grants (see Note 12).
NOTE 2 - LOANS RECEIVABLE
- ------ ----------------
Loans receivable consisted of the following (In thousands):
<TABLE>
December 31,
1996 1995
---- ----
<S> <C> <C>
Contracts $154,906 $140,810
Mortgages 11,413 13,064
-------- --------
166,319 153,874
Less allowance for loan losses (14,250) (14,200)
-------- --------
$152,069 $139,674
======== ========
</TABLE>
The weighted average stated interest rates on the Company's contracts
receivable were 13.6% and 13.2% at December 31, 1996 and 1995, respectively,
with interest rates on these receivables ranging generally from 11.75% to
16.0%. Contractual maturities of these receivables within the next five <PAGE>
years are as follows: 1997 - $33.8 million; 1998 - $26.2 million; 1999 -
$23.7 million, 2000 - $22.7 million and 2001 - $21.6 million. The Company's
contracts receivable were 98.7% and 99.0% current on a 60-day basis as of
December 31, 1996 and 1995, respectively. Amounts charged against the
allowance for loan losses, net of recoveries, totaled $4.1 million and $3.6
million during 1996 and 1995, respectively.
NOTE 3 - VACATION OWNERSHIP REVENUES
- ------ ---------------------------
Vacation ownership revenues are summarized as follows (In thousands):
<TABLE>
Year Ended December 31,
-----------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Vacation ownership revenues $116,101 $86,188 $52,904
Less: Deferred revenue on
current year sales, net (4,157) (2,648) (1,920)
Add: Revenue recognized on
prior year sales 2,648 1,920 2,101
-------- ------- -------
$114,592 $85,460 $53,085
======== ======= =======
</TABLE>
NOTE 4 - REAL ESTATE INVENTORIES
- ------ -----------------------
Real estate inventories are summarized as follows (In thousands):
<TABLE>
December 31,
1996 1995
---- ----
<S> <C> <C>
Land:
Under development $16,196 $17,377
Undeveloped 5,515 7,288
------- -------
21,711 24,665
------- -------
Residential housing:
Vacation ownership 16,765 13,247
Homes 3,808 2,640
------- -------
20,573 15,887
------- -------
$42,284 $40,552
======= =======
</TABLE>
NOTE 5 - PROPERTY AND EQUIPMENT
- ------ ----------------------
Property and equipment is summarized as follows (In thousands):
<TABLE>
December 31,
1996 1995
---- ----
<S> <C> <C>
Land, buildings and improvements:
Administration $14,087 $ 7,841
Lodging and other 4,201 4,345
Furniture, fixtures and equipment 6,231 5,220
------- -------
24,519 17,406
Accumulated depreciation (9,992) (9,095)
------- -------
$14,527 $ 8,311
======= =======
</TABLE>
The Company has operating leases which consist primarily of (i) buildings
and office space used at its sites for sales and administrative offices and
(ii) telephone and office equipment. Rental expense under operating leases
totaled $2.6 million, $2.1 million and $1.9 million for 1996, 1995 and 1994,
respectively. The future minimum lease commitments for non-cancelable
operating leases with initial or remaining terms in excess of one year are as
follows: 1997 - $1.7 million; 1998 - $1.3 million; 1999 - $1.2 million; 2000 -
$.7 million and 2001 - $.2 million.
NOTE 6 - FINANCING ARRANGEMENTS
- ------ ----------------------
Financing arrangements are summarized as follows (In thousands):
<TABLE>
December 31,
1996 1995
---- ----
<S> <C> <C>
Notes payable collateralized by
contracts receivable:
FCC Notes $29,944 $14,200
FFC Notes 24,370 47,026
Notes payable - other 3,796 12,919
Revolving credit agreements - 12,837
------- -------
$58,110 $86,982
======= =======
</TABLE>
Notes Payable Collateralized by Contracts Receivable
----------------------------------------------------
In October 1996, Fairfield Capital Corporation ("FCC"), a wholly
owned subsidiary of FAC, amended its Credit Agreement (the "FCC Agreement")
which provides for total borrowings of up to $90.0 million (the "FCC Notes")
for the purchase of contracts receivable from FAC pursuant to the Amended
and Restated Receivables Purchase Agreement, among Fairfield as originator,
FAC as seller and FCC as purchaser. At December 31, 1996, borrowings
outstanding under the FCC Agreement totaled $29.9 million. The FCC
Agreement provides for two additional fundings of up to a total of $55.0
million prior to October 1997. Borrowings under the FCC Agreement mature
principally within 84 months and bear interest at varying rates, based on
commercial paper rates, subject to an interest rate cap of 9.2%. As of
December 31, 1996, the weighted average interest rate on the FCC Notes was
6.0%, including fees totaling .375%. At December 31, 1996, contracts
receivable totaling $41.1 million collateralized the FCC Notes. <PAGE>
FCC is a wholly owned but separate corporate entity of FAC with its
own separate creditors. In the event of a liquidation of FCC, such
creditors would be entitled to satisfy their claims from FCC prior to any
distribution to FAC.
At December 31, 1996, Fairfield Funding Corporation ("FFC"), a wholly
owned subsidiary of FAC, had borrowings outstanding totaling $24.4 million
under a private placement of 7.6% Notes (the "FFC Notes"). The FFC Notes
are secured by and payable from a pool of contracts receivable purchased
from FAC pursuant to the Receivables Purchase Agreement among Fairfield as
originator, FAC as seller and FFC as purchaser. At December 31, 1996,
contracts receivable totaling $38.0 million collateralized the FFC Notes.
At December 31, 1996 and 1995, restricted cash accounts totaling $2.6
million and $3.0 million, respectively, were required to be maintained in
accordance with the terms of the FCC Notes and FFC Notes. Maturities of
notes payable collateralized by contracts receivable within the next five
years are as follows: 1997 - $14.3 million; 1998 - $11.3 million; 1999 -
$9.0 million; 2000 - $7.8 million and 2001 - $6.5 million.
Revolving Credit Agreements
---------------------------
At December 31, 1996, Fairfield had no borrowings outstanding under
its Amended and Restated Revolving Credit Agreement (the "FCI Agreement").
The FCI Agreement provides for revolving loans of up to $25.0 million,
including up to $7.0 million for letters of credit. Borrowings under the
FCI Agreement bear interest at the lender s base rate plus .875% (9.125% at
December 31, 1996) and are collateralized primarily by contracts receivable,
which had a book value of $44.1 million at December 31, 1996. The FCI
Agreement also provides for an annual facility fee of .625% of the total
commitment. The revolving loans mature on January 1, 1999, if not extended
in accordance with the terms of the FCI Agreement. At December 31, 1996,
Fairfield had borrowing availability of $23.3 million, net of outstanding
letters of credit totaling $1.7 million.
At December 31, 1996, FAC had no borrowings outstanding under its
Third Amended and Restated Revolving Credit Agreement (the "FAC Agreement").
The FAC Agreement provides for revolving loans of up to $35.0 million,
including up to $1.0 million for letters of credit. Borrowings under the
FAC Agreement bear interest at the lender's base rate plus .25% (8.5% at
December 31, 1996) and are collateralized primarily by contracts receivable,
which had a book value of $25.4 million at December 31, 1996. The FAC
Agreement also provides for an annual facility fee of .5% of the total
commitment. The revolving loans mature on January 1, 1999, if not extended
in accordance with the terms of the FAC Agreement, with Fairfield being a
guarantor pursuant to the FAC Agreement. At December 31, 1996, FAC had
borrowing availability of $19.1 million.
NOTE 7 - DEFERRED REVENUE - ESTIMATED COSTS TO DEVELOP LAND SOLD
- ------ -------------------------------------------------------
At December 31, 1996, estimated cost to complete development work in
subdivisions from which lots had been sold totaled $15.7 million. The
estimated costs to complete development work within the next five years are
as follows: 1997 - $.8 million; 1998 - $.5 million; 1999 - $.6 million;
2000 - $.4 million and 2001 - $.5 million. <PAGE>
NOTE 8 - INCOME TAXES
- ------ ------------
At December 31, 1996, the Company had net operating loss carryforwards
totaling $72.6 million which reflect the amount available to offset taxable
income in future periods. The Company s net operating loss carryforwards
increase primarily from the use of the installment sale method of reporting
income and are substantially offset by an increase in deferred tax
liabilities. Under limitations imposed by Internal Revenue Code Section 382
("Section 382"), certain potential changes in ownership of the Company,
which may be outside the Company's knowledge or control, may restrict future
utilization of these carryforwards. More specifically, changes in ownership
occurring within a rolling three-year period, taking into consideration
filings with the Securities and Exchange Commission on Schedules 13D and 13G
by holders of 5% or more of Fairfield's Common Stock, whether involving the
acquisition or disposition of Fairfield's Common Stock, may impose a
material limitation on the Company's use of these carryforwards. If an
ownership change triggers the Section 382 limitations, the annual limitation
imposed on the use of pre-change carryforwards under present law is an
amount equal to the value of the Company immediately before the ownership
change multiplied by the federally prescribed long-term tax-exempt rate for
the period in which the change occurs. Available carryovers, if not
utilized, expire as follows: 2005 - $12.6 million; 2006 - $7.8 million; 2007
- - $13.9 million; 2008 - $5.4 million; 2009 - $3.3 million; 2010 - $16.1
million and 2011 - $13.5 million.
Components of the provision for income taxes are as follows (In
thousands):
<TABLE>
Year Ended December 31,
-----------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Current:
Federal $ 254 $ 290 $ -
State 426 543 257
------- ------- ------
680 833 257
------- ------- ------
Deferred:
Federal 7,878 3,880 2,422
State 1,073 296 199
------ ------ ------
8,951 4,176 2,621
------ ------ ------
$9,631 $5,009 $2,878
====== ====== ======
Utilization of pre-confirmation
income tax attributes $19,108 $6,263 $7,518
======= ====== ======
</TABLE>
Components of the variance between taxes computed at the expected
federal statutory income tax rate and the provision for income taxes are as
follows (In thousands):
<TABLE>
Year Ended December 31,
------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Statutory tax provision $8,573 $4,563 $ 5,150
State income taxes, net of
federal benefit 974 545 301
Gain on sale of First Federal - - (2,277)
Other 84 (99) (296)
------ ------ ------
Provision for income taxes $9,631 $5,009 $ 2,878
====== ====== =======
</TABLE>
Significant components of the Company's deferred tax assets (deductible
temporary differences) and deferred tax liabilities (taxable temporary
differences) consisted of the following (In thousands):
<TABLE>
December 31,
1996 1995
---- ----
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards $29,146 $ 11,499
Loan and cancellation loss reserves 5,603 5,456
Tax over book basis in inventory
and fixed assets 3,369 3,267
Deferred revenue 2,655 2,428
Credit carryforwards 1,459 2,172
Other 3,190 1,806
------- --------
45,422 26,628
Valuation allowance - (20,415)
------- --------
45,422 6,213
------- --------
Deferred tax liabilities:
Installment sales 27,531 -
Other 1,315 1,207
------- --------
28,846 1,207
------- --------
Net deferred tax assets $16,576 $ 5,006
======= ========
</TABLE>
The Company has reported operating earnings since the effective date of
the plans of reorganization and management believes that it is more likely
than not that future taxable earnings will be sufficient to realize the tax
benefits associated with the future deductible temporary differences and net
operating loss carryforwards prior to their expiration; therefore, the Company
eliminated the remaining valuation allowance in 1996.
NOTE 9 - STOCKHOLDERS' EQUITY
- ------ --------------------
The Company is authorized to issue 25,000,000 shares of Common Stock,
par value $.01 per share. In November 1996, the Company completed an
underwritten public offering of 900,000 shares of Common Stock at a price of
$21.63 per share (the "Offering"). The net proceeds from the Offering of
$17.7 million were used to repay certain indebtedness, totaling $9.1 million,
issued in connection with the Company s reorganization and to temporarily pay
down the outstanding indebtedness under the Company's revolving credit
agreements, with the remaining balance of $3.8 million invested in short-term
investment grade securities (see also Note 11). If the Offering and the use <PAGE>
of the proceeds therefrom had taken place on January 1, 1996, net earnings per
share would have been $1.23 for the year ended December 31, 1996.
As of December 31, 1996, the Company has issued 13,384,741 shares of
Common Stock, of which 2,335,295 were held in treasury. In accordance with
the plans of reorganization, the Company will issue additional shares as
certain remaining unsecured claims are resolved. The ultimate amount of these
claims and the timing of the resolution of the claims is largely within the
control of the Bankruptcy Court. However, based upon available information,
Fairfield presently estimates that an additional 680,420 shares of Common
Stock will be issued to holders of unsecured resolved claims.
In December 1996, the Company issued, from treasury, 60,000 shares of
Common Stock to the Chief Executive Officer subject to restriction and risk of
forfeiture (the "Restricted Stock"). The Restricted Stock was issued at no
cost to the Chief Executive Officer, in substitution for certain other
compensation arrangements, and vests as to one-half of the shares on each of
the first and second anniversaries of the date of grant. At issuance of the
Restricted Stock, unearned compensation equivalent to the market value at the
date of grant was charged to stockholders equity and will be amortized over
the restricted period.
The Company is authorized to issue 5,000,000 shares of preferred stock
par value $.01 per share. One million shares of preferred stock, which have
been designated as the Series A Junior Participating Preferred Stock, have
been reserved for possible issuance in connection with Fairfield's Rights
Agreement as discussed below. The rights and preferences of the remaining
shares of authorized but unissued Preferred Stock are to be established by
Fairfield's Board of Directors at the time of issuance.
In 1992, Fairfield adopted a Rights Agreement which provides for the
issuance of one right for each outstanding share of Fairfield's Common Stock.
The rights, which entitle the holder to purchase from Fairfield one one-
hundredth of a share of Series A Junior Participating Preferred Stock at $25
per share, become exercisable (i) ten business days after a person becomes the
beneficial holder of 20% or more of Fairfield's Common Stock or (ii) ten
business days following the commencement of a tender or exchange offer for at
least 20% of Fairfield's Common Stock. Fairfield may redeem the rights at
$.01 per right under certain circumstances. The rights expire on September 1,
2002.
Certain of the Company's financing arrangements contain restrictive
covenants relating to the maintenance of certain financial ratios and other
financial requirements. Under the most restrictive covenants, the Company is
prohibited from paying dividends or making other distributions on its Common
Stock.
NOTE 10 - FAIRFIELD ACCEPTANCE CORPORATION
- ------- --------------------------------
Condensed consolidated financial information for FAC is summarized as
follows (In thousands):
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
December 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
Cash $ 462 $ 312
Loans receivable, net 96,760 101,359
Restricted cash 2,622 2,957
Due from parent - 3,187
Other assets 2,279 1,511
-------- --------
$102,123 $109,326
======== ========
LIABILITIES AND EQUITY
Financing arrangements $ 54,314 $ 70,073
Accrued interest and other liabilities 586 688
Due to parent 2,554 -
Equity 44,669 38,565
-------- --------
$102,123 $109,326
======== ========
</TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
Year Ended December 31,
------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Revenues $16,565 $15,009 $13,644
Expenses 6,649 8,103 8,382
------- ------- -------
Earnings before provision
for income taxes 9,916 6,906 5,262
Provision for income taxes 3,812 2,656 2,015
------- ------- -------
Net earnings $ 6,104 $ 4,250 $ 3,247
======= ======= =======
</TABLE>
In accordance with the terms of the Third Amended and Restated Operating
Agreement (the "Operating Agreement"), FAC is permitted to purchase eligible
receivables from Fairfield for a price equal to $.94 per $1.00 of such
receivables. Fairfield is required by the Operating Agreement to repurchase
defaulted receivables from FAC at a price equal to $.94 per $1.00 or
substitute an eligible receivable on the basis of $.85 per $1.00 of such
receivables. During 1996 and 1995, FAC purchased receivables from Fairfield
with outstanding principal balances of $42.6 million and $38.1 million,
respectively.
NOTE 11 - NET LIABILITIES OF ASSETS HELD FOR SALE
- ------- ---------------------------------------
At December 31, 1996, assets held for sale consisted of those assets
collateralizing the Senior Subordinated Secured Notes (the "FCI Notes").
These assets included (i) certain of the Company's real estate inventories
located at its Pointe Alexis development in Tarpon Springs, Florida, (ii) the
Company's 30% partnership interest in Sugar Island limited partnership in St.
Croix, U. S. Virgin Islands and (iii) the Company's 35% partnership interest
in Harbour Ridge limited partnership in Stuart, Florida (collectively, the
"Collateral" ). During the fourth quarter of 1996, the Company recorded a
valuation adjustment of $1.0 million based on current information that
indicated the carrying value of the Collateral was in excess of the fair <PAGE>
value. This valuation adjustment is included in "Other expenses" in the 1996
Consolidated Statement of Earnings.
In February 1997, the Company transferred cash of $7.9 million in cash
and, on the maturity date, further transferred the Collateral with an estimated
fair value of $7.2 million, in settlement of the FCI Notes. The Company has
been advised that certain holders of the FCI Notes and/or the indenture trustee
may contest the Company's method of satisfying this obligation, be either (a)
disputing the Company's right to transfer the Collateral, seeking instead a cash
payment of $7.2 million, plus interest, or (b) disputing the $7.9 million cash
transfer, seeking instead the issuance of 588,235 shares of the Company's Common
Stock, previously reserved for issuance if a deficiency resulted on the FCI
Notes at maturity. Under the indenture for the FCI Notes, the noteholders are
entitled to retain a premium of up to $2.0 million in the event that the
collateral securing the FCI notes transferred at maturity (including any Common
Stock of the Company) exceeds the amount of the FCI Notes.
Net liabilities of assets held for sale consisted of the following (In
thousands):
<TABLE>
December 31,
1996 1995
---- ----
<S> <C> <C>
Collateral for FCI Notes $ 6,493 $ 8,423
Other - 4,096
-------- --------
6,493 12,519
FCI Notes (14,786) (14,786)
-------- --------
$ (8,293) $ (2,267)
======== ========
</TABLE>
NOTE 12 - EMPLOYEE BENEFIT PLANS
- ------- ----------------------
Savings/Profit Sharing Plan
---------------------------
The Savings/Profit Sharing Plan (the "Plan") covers substantially all
employees with one year or more of credited service, and participants are
fully vested after seven years of credited service. The Plan includes a
profit sharing feature, with annual employer discretionary contributions, and
a 401(k) feature, which allows employee elected salary deferrals, with the
Company currently matching a portion of such deferrals. The amount charged to
expense related to the Plan totaled $1.2 million, $0.6 million and $0.7
million for 1996, 1995 and 1994, respectively.
Excess Benefit Plan
-------------------
The Excess Benefit Plan is a non-qualified, unfunded plan established to
provide qualifying employees with benefits to compensate for certain
limitations imposed by federal law on the amount of compensation which may be
considered in determining employer contributions to participants' accounts
under the Savings/Profit Sharing Plan. Participants' accounts under the
Excess Benefit Plan are credited with amounts that, except for the limits of
the Internal Revenue Code, would have been contributed to such participants'
accounts under the Savings/Profit Sharing Plan. Participants' accounts under
the Excess Benefit Plan vest in accordance with the vesting schedule for
profit sharing accounts under the Savings/Profit Sharing Plan. Interest is
credited to the participants' accounts annually. The expense associated with
the Excess Benefit Plan totaled $0.1 million for each of 1996, 1995 and 1994.
Retirement Plan
---------------
The Key Employee Retirement Plan (the "Retirement Plan") is a non-
qualified, unfunded plan established to provide certain senior executives of
the Company with retirement benefits. Under the Retirement Plan,
participants' accounts are credited on each January 1 by a percentage of each
participants' preceding year's total cash compensation. In general, the
benefit percentage can range from 0% to 20%, depending on the Company's three-
year moving average rate of return on stockholders' equity. Participants'
accounts are fully vested after seven years of service or upon the occurrence
of a change in control of the Company, death of the participant, termination
of employment due to total disability or retirement on or after the age 55, in
each case while employed by the Company. Interest is credited to
participants' accounts monthly. The expense associated with the Retirement
Plan totaled $0.3 million for each of 1996, 1995 and 1994.
Warrant Plan
------------
The Company's 1992 Warrant Plan, as amended, (the "1992 Plan") provides
for the grant of non-qualified stock warrants to purchase up to 1,000,000
shares of Common Stock at prices not less than the fair market value of such
shares at the date of grant. The stock warrants generally become exercisable
over one to five years from the date of grant and must be exercisable within
ten years from the grant date. The following table summarizes the activity
under the 1992 Plan:
<TABLE>
Weighted Average
Shares Price Per Share
------------------------ -------------------------
1996 1995 1994 1996 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning
of period 868,000 818,000 800,000 $3.24 $3.06 $3.00
nted 144,000 58,000 18,000 8.92 6.00 5.50
Exercised (153,000) - - 3.11 N/A N/A
Forfeited (33,000) (8,000) - 3.75 3.94 N/A
-------- ------- -------
Outstanding at end
of period 826,000 868,000 818,000 4.26 3.24 3.06
======== ======= =======
Exercisable at
end of period 490,000 543,000 352,500
======== ======= =======
Reserved for future
warrants 21,000 132,000 182,000
======== ======= =======
</TABLE>
The following table summarizes information concerning outstanding and
exercisable stock warrants as of December 31, 1996:
Options Outstanding Options Exercisable
- ----------------------------------------------------- -----------------------
Weighted
Average Weighted Weighted
Remaining Average Average
Range of Number Contractual Exercise Number Exercise
Exercise Prices Outstanding Life Price Exercisable Price
- -------------- ----------- ---- ----- ----------- -----
$ 3 - $10 805,000 6.9 years $ 3.77 490,000 $3.18
$20 - $30 21,000 9.9 years 22.00 - -
------- -------
826,000 490,000
======= =======
The Company has elected to account for the stock warrants as prescribed
by the provisions of APB No. 25. Accordingly, because the exercise price of
the Company s stock warrants equal the market price of the underlying stock at
date of grant, no compensation expense is recognized. Pro forma information
regarding net earnings and earnings per share as required by SFAS No. 123 is
not presented as the effect of applying the fair value method to the Company s
stock warrants results in net earnings and earnings per share that do not
differ materially from the amounts reported.
NOTE 13 - SUPPLEMENTAL INFORMATION
- ------- ------------------------
Other revenues in 1996, 1995 and 1994 include home sales totaling $8.8
million, $6.7 million and $5.9 million, respectively. Also included in other
revenues for 1996, 1995 and 1994 are cash distributions totaling $.1 million,
$1.6 million and $1.2 million, respectively, related to the Company's 35%
partnership interest in Harbour Ridge, Ltd., a limited partnership engaged in
the development of a tract of land in St. Lucie, Florida.
Other expenses for 1996, 1995 and 1994 include costs of home sales,
including selling expenses, totaling $8.2 million, $6.0 million and $5.4
million, respectively. Interest paid for 1996, 1995 and 1994 totaled $11.7
million, $9.3 million and $20.5 million, respectively. Of the amount for
1994, $9.0 million related to First Federal.
Included in other assets at December 31, 1996 and 1995 are (i) $2.9
million and $5.1 million, respectively related to the assets of the Company's
life insurance subsidiary and (ii) unamortized capitalized financing costs of
$2.3 million and $1.5 million, respectively. Included in other liabilities at
December 31, 1996 and 1995 are (i) accruals totaling $8.9 million and $4.6
million, respectively, related to the Company's employee benefit plans and
(ii) $1.5 million and $2.9 million, respectively, related to the liabilities
of the Company's life insurance subsidiary.
In 1994, the Company sold 100% of the capital stock of First Federal
Savings and Loan Association of Charlotte ("First Federal") for $41.0 million
and recognized a net gain on the sale of $5.2 million. The gain from the sale
of First Federal was not subject to federal income tax due to a permanent tax
basis difference in First Federal's stock and underlying goodwill. Included
in Restricted cash and escrow accounts" at December 31, 1996 and 1995 is $2.8
million and $2.9 million, respectively, representing certain assets retained
and/or pledged to the buyer to securitize the Company s obligation to
indemnify the buyer against general indemnities and two existing
lawsuits/claims which have been asserted against First Federal. Approximately
$1.5 million of this amount is scheduled to be released in March 1997 unless
the buyer asserts a claim for indemnification.
NOTE 14 - CONTINGENCIES
- ------- -------------
In June 1992, the Pagosa Lakes Property Owners Association ("PLPOA")
filed an adversary proceeding in the Bankruptcy Court for the Eastern District
of Arkansas, Western Division (the "Bankruptcy Court") asserting equitable
ownership or lien interests in certain recreational amenities, including golf
courses. In March 1994, the Bankruptcy Court issued its decision upholding
Fairfield s ownership of the Pagosa recreational amenities, subject to a
restrictive covenant allowing Pagosa property owners and their guests to use
the recreational amenities. The United States District Court, Eastern
District of Arkansas, Western Division ("District Court") affirmed the
Bankruptcy Court's order in its entirety, by order dated September 25, 1995.
The PLPOA appealed the District Court s decision to the United States Court of
Appeals for the Eighth Circuit, which on October 2, 1996, affirmed the
District Court's decision in its entirety and, on November 6, 1996, denied the
PLPOA's petition for rehearing. The period for the PLPOA to seek review by
the United States Supreme Court has expired making the Court of Appeal's
decision final.
In July 1993 and September 1993, two lawsuits (the "Recreation Fee
Litigation") were filed by 29 individuals and a company against Fairfield in
the District Court of Archuleta County, Colorado. The Recreation Fee
Litigation, which seeks certification as class actions, alleges that Fairfield
and its predecessors in interest wrongfully imposed an annual recreation fee
on owners of lots, condominiums, townhouses, VOIs and single family residences
in Fairfield's Pagosa, Colorado development. The amount of the recreation
fee, which was adopted in August 1983, is $180 per lot, condominium, townhouse
and single family residence subject to the fee and $360 per unit for VOIs.
The Recreation Fee Litigation in general seeks (a) a declaratory judgment that
the recreation fee is invalid; (b) the refund, with interest, of the
recreation fees which were allegedly improperly collected by Fairfield; (c)
damages arising from Fairfield's allegedly improper attempts to collect the
recreation fee (i) in an amount of not less than $1,000 per lot in one case
and (ii) in an unstated amount in the other case; (d) punitive damages; and
(e) recovery of costs and expenses, including attorneys' fees. The court has
not yet ruled on whether or not the Recreation Fee Litigation will be allowed
to proceed as class actions. Because of the nature of the litigation and
uncertainty concerning the time period covered by the suits' allegations,
Fairfield is unable to determine with any certainty the dollar amount sought
by plaintiffs, but believes it to be material.
In November 1993, Fairfield filed an adversary proceeding in the
Bankruptcy Court, alleging that the Recreation Fee Litigation violates the
discharge granted to Fairfield in its Chapter 11 bankruptcy reorganization and
the injunction issued by the Bankruptcy Court against prosecution of any
claims discharged in the bankruptcy proceedings. By orders and opinions dated
September 29, 1994, the Bankruptcy Court decided motions filed by the
plaintiffs in the Recreation Fee Litigation, in response to Fairfield's
adversary proceeding. The Bankruptcy Court retained jurisdiction over one of
the lawsuits (the Storm lawsuit) and determined that any purchaser of a lot
from Fairfield and its predecessors prior to August 14, 1992 would be limited
to a pre-confirmation cause of action. The Bankruptcy Court determined that
it did not have jurisdiction over the second lawsuit (the Daleske lawsuit),
involving eight individuals and one company, due to prior proceedings in the
case in Colorado federal district court, which ruled that the plaintiffs in
this lawsuit had post-confirmation causes of action, although all nine
plaintiffs are believed to have purchased their lots prior to August 14, 1992.
Fairfield has appealed the Bankruptcy Court's decision in the Daleske lawsuit,
and the plaintiffs in the Storm lawsuit have appealed the Bankruptcy Court's
decision in that case, to the District Court. The Colorado State Court stayed
further proceedings in the Recreation Fee Litigation pending the outcome of
the appeals to the District Court. Two additional related lawsuits have also
been filed in the Archuleta County District Court, raising similar issues and
demands as the Storm and Daleske cases. The Fiedler case, filed in October
1994, was filed individually, while the second of these new cases, the Lobdell
case, was filed in November 1994, as a proported class action. In February
1995, Fairfield filed an adversary proceeding in the Bankruptcy Court against
the Fiedler and the Lobdell plaintiffs, seeking relief similar to that
requested in the Storm and Daleske adversary proceeding. The Colorado
District Court has stayed proceedings in the Lobdell case. The Colorado
District Court entered summary judgment against Fairfield in the Fiedler case,
holding that the individual lot in question is not subject to the recreation
fee, based upon facts unique to the Fiedler case. Fairfield has appealed the
summary judgment decision in the Fiedler case. The Bankruptcy Court has
determined, by decision dated September 18, 1995, that it does not have
jurisdiction in the Fiedler case, but also determined that it does have
jurisdiction in the Lobdell case, based upon similar reasoning to the Storm
case. Both the Fiedler and the Lobdell cases have been appealed to the
District Court and oral argument was held on April 22, 1996. No decision has
been rendered by the District Court on these appeals.
Fairfield intends to defend vigorously the Recreation Fee Litigation,
and the two related cases, including any attempt to certify a class in any of
these cases. Fairfield has previously implemented recreation fee charges at
certain other of its resort sites which are not subject to the pending action.
In December 1993, Charlotte T. Curry, who, with her husband, purchased a
lot from Fairfield under an installment sale contract subsequently sold to
First Federal, filed suit against First Federal, currently pending in Superior
Court in Mecklenburg County, North Carolina, alleging breach of contract,
breach of fiduciary duty and unfair trade practices. In April 1994, the
complaint was amended, (a) adding Fairfield as a party, (b) adding an
additional count against both Fairfield and First Federal alleging violation
of the North Carolina's Racketeer Influenced and Corrupt Organizations
("RICO") Statute and (c) adding a count against Fairfield alleging fraud. The
litigation, which seeks class action certification, contests the method by
which Fairfield calculated refunds for lot purchasers whose installment sale
contracts were cancelled due to failure to complete payment of the deferred
sales price for the lot. Most installment lot sale contracts require
Fairfield to refund to a defaulting purchaser the amount paid in principal,
after deducting the greater of (a) 15% of the purchase price of the lot or (b)
Fairfield's actual damages. The plaintiff disputes Fairfield's method of
calculating damages, which has historically included certain sales, marketing
and other expenses. In the case of Ms. Curry's lot, the amount of refund
claimed as having been improperly retained is approximately $3,600. The Curry
lawsuit seeks damages, punitive damages, treble damages under North Carolina
law for unfair trade practices and RICO, prejudgment interest and attorney's
fees and costs. By order dated July 6, 1994, the court dismissed Ms. Curry's
claims for (a) breach of contract, due to the statute of limitations, (b)
breach of fiduciary duty, due to the lack of a fiduciary duty and the statute
of limitations, (c) fraud, due to the statute of limitations, and (d) RICO,
due to failure to state a claim. The court, by order dated August 16, 1994,
dismissed Ms. Curry's only remaining claim against Fairfield, for unfair trade
practices, subject to possible appeal rights. By order filed September 15,
1995, the court denied the plaintiff's motion for class certification. The
plaintiff appealed the denial of the motion for class certification to the
North Carolina Court of Appeals, which dismissed the appeal by order dated
January 8, 1997. Subsequently, the plaintiff requested that the Supreme
Court of North Carolina grant discretionary review of the decision denying
class certification.
Under the Stock Purchase Agreement for the sale of First Federal,
Fairfield agreed to indemnify the buyer against any liability in the Curry
litigation. While Fairfield is no longer a defendant in the litigation, it
intends to coordinate the defense of this lawsuit with the counsel who have
been representing First Federal, to defend the Curry litigation vigorously.
Fairfield also has cancelled defaulted lot installment sales contracts owned
by it and its subsidiaries (other than First Federal), using the same method <PAGE>
of calculating refunds as is at issue in the Curry litigation.
The Company is involved in various other lawsuits and litigation matters on
an ongoing basis as a result of its day-to-day operations. However, the Company
does not believe that any of these other or any threatened lawsuits and
litigation matters will have a materially adverse effect on the Company's
financial position or results of operations.
NOTE 15 - FAIR VALUE OF FINANCIAL INSTRUMENTS
- ------- -----------------------------------
The fair value estimates presented herein are based on relevant market
information. As these estimates are subjective in nature and involve
uncertainties and significant judgment, they are not necessarily indicative of
the amount that the Company could realize on a current market exchange. The
fair value disclosures for financial instruments are as follows:
Cash and cash equivalents: The carrying amounts reported in the
consolidated balance sheets approximate their fair values at
December 31, 1996 and 1995.
Restricted cash and escrow accounts: The estimated fair values of
restricted cash and escrow accounts approximate their carrying
amounts at December 31, 1996 and 1995.
Loans receivable: The carrying amounts of loans receivable are a
reasonable estimate of their fair values at December 31, 1996 and
1995 based on valuation models using risk adjusted interest rates
and historical prepayment experiences.
Financing arrangements: The carrying amounts of the Company's
borrowings with variable interest rates approximated their fair
values at December 31, 1996 and 1995. The carrying amounts of the
Company's borrowings with fixed interest rates totaled $25.7
million and $56.8 million at December 31, 1996 and 1995,
respectively. The fair values of these borrowings totaled $25.2
million and $56.4 million at December 31, 1996 and 1995,
respectively, and were estimated using discounted cash flow
analyses based on the Company's current borrowing rates for similar
types of borrowing arrangements. <PAGE>
NOTE 16 - UNAUDITED CONSOLIDATED QUARTERLY FINANCIAL DATA
- ------- -----------------------------------------------
Dollars in thousands, except per share data
<TABLE>
Year Ended December 31, 1996
----------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
<S> <C> <C> <C> <C>
Total revenues $29,767 $48,523 $49,201 $44,987
Total expenses 26,624 40,413 40,599 40,348
------- ------- ------- -------
Earnings before provision
for income taxes 3,143 8,110 8,602 4,639
Provision for income taxes 1,250 3,171 3,389 1,821
------- ------- ------- --------
Net earnings $ 1,893 $ 4,939 $ 5,213 $ 2,818
======= ======= ======= =======
Net earnings per share $.17 $.44 $.46 $.24
==== ==== ==== ====
</TABLE>
<TABLE>
Year Ended December 31, 1995
------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
<S> <C> <C> <C> <C>
Total revenues $24,254 $37,463 $42,618 $36,440
Total expenses 24,009 33,218 37,369 33,141
------- ------- ------- -------
Earnings before provision
for income taxes 245 4,245 5,249 3,299
Provision for income taxes 93 1,613 1,995 1,308
------- ------- ------- -------
Net earnings $ 152 $ 2,632 $ 3,254 $ 1,991
======= ======= ======= =======
Net earnings per share $.01 $.24 $.29 $.18
==== ==== ==== ====
</TABLE>
Certain amounts in the consolidated financial statements of prior quarters for
1996 and 1995 have been reclassified to conform to the 1996 fourth quarter <PAGE>
presentation. <PAGE>
SUBSIDIARIES OF THE REGISTRANT EXHIBIT 21
------------------------------ ----------
The following is a list of the subsidiaries of
Fairfield Communities, Inc. Each subsidiary, some of
which are inactive, is wholly owned by Fairfield or by a
wholly owned subsidiary of Fairfield, unless otherwise
indicated.
State of
Subsidiary Incorporation
---------- -------------
Fairfield Bay, Inc. Arkansas
Shirley Realty Company Arkansas
Fairfield Flagstaff Realty, Inc. Arizona
Fairfield Glade, Inc. Tennessee
Fairfield Mortgage Corporation Arkansas
Fairfield Mortgage Acceptance Corporation Delaware
Fairfield Mountains, Inc. North Carolina
Mountains Utility Company North Carolina
Fairfield Homes Construction Company Florida
Northeast Craven Utility Company North Carolina
Fairfield Sapphire Valley, Inc. North Carolina
Jackson Utility Company North Carolina
Intermont Properties, Inc. Delaware
Fairfield Properties, Inc. Arizona
Fairfield Equities, Inc. Delaware
Fairfield Acceptance Corporation Delaware
Fairfield Capital Corporation Delaware
Fairfield Funding Corporation Delaware
Fairfield Pagosa Realty, Inc. Colorado
Fairfield Fort George, Inc. Florida
Fort George Country Club, Inc. Florida
Caribbean Real Property Company, Inc. Florida
The Florida Companies Florida
Imperial Life Insurance Company Arkansas
Rock Island Land Corporation Florida
Fairfield Management Services, Inc. Florida
Suntree Development Company Florida
St. Andrews Club Management Corporation Florida
St. Andrews Realty, Inc. Florida
Commercial Land Equity Corporation Florida
TFC Realty of Indiana, Inc. Florida
Fairfield Virgin Islands, Inc. Delaware
Davis Beach Co.
(a limited partnership; 50% interest)
Fairfield Myrtle Beach, Inc. Delaware
Ventura Management, Inc. Delaware <PAGE>
Exhibit 23 - Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in this Annual
Report (Form 10-K) of Fairfield Communities, Inc. of our
report dated January 29, 1997, except for Note 11, as to
which the date is February 28, 1997, included in the 1996
Annual Report to Shareholders of Fairfield Communities, Inc.
Our audits also included the financial statement schedule of
Fairfield Communities, Inc. listed in Item 14(a). This
schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedule
referred to above, when considered in relation to the basic
financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.
We also consent to the incorporation by reference in the
Registration Statement (Form S-3, No. 333-19261) pertaining
to the December 19, 1996 Restricted Stock Agreement, in the
Registration Statement (Form S-8 No. 33-55841) pertaining to
the Fairfield Communities, Inc. First Amended and Restated
1992 Warrant Plan and in the Registration Statement (Form S-
8, No. 333-16605) pertaining to the Fairfield Communities,
Inc. Employee Stock Purchase Plan of our report dated
January 29, 1997, except for Note 11, as to which the date is
February 28, 1997, with respect to the consolidated financial
statements incorporated herein by reference and our report
included in the preceding paragraph with respect to the
financial statement schedule included in this Annual Report
(Form 10-K) of Fairfield Communities, Inc.
ERNST & YOUNG LLP
Little Rock, Arkansas
March 11, 1997<PAGE>
POWER OF ATTORNEY
------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
constitutes and appoints John W. McConnell and/or Robert
W. Howeth, severally, his true and lawful attorney in
fact and agent, with full powers of substitution and
resubstitution for him and his name, place and stead, in
any and all capacities, to sign an annual report on Form
10-K for the fiscal year of Fairfield Communities, Inc.,
a Delaware corporation, ended December 31, 1996, and any
or all amendments thereto, and to file same, with all
exhibits, and other documents in connection therewith,
with the Securities and Exchange Commission, granting
unto said attorney in fact and agent, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done in and about the
premises, as fully for all intents and purposes as
necessary to be done in and about the premises, as fully
for all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorney in fact and agent or his substitute(s), may
lawfully do or cause to be done by virtue hereof.
Dated: February 25, 1997 /s/Les R. Baledge
--------------------------
Les R. Baledge
POWER OF ATTORNEY
------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
constitutes and appoints John W. McConnell and/or Robert
W. Howeth, severally, his true and lawful attorney in
fact and agent, with full powers of substitution and
resubstitution for him and his name, place and stead, in
any and all capacities, to sign an annual report on Form
10-K for the fiscal year of Fairfield Communities, Inc.,
a Delaware corporation, ended December 31, 1996, and any
or all amendments thereto, and to file same, with all
exhibits, and other documents in connection therewith,
with the Securities and Exchange Commission, granting
unto said attorney in fact and agent, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done in and about the
premises, as fully for all intents and purposes as
necessary to be done in and about the premises, as fully
for all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorney in fact and agent or his substitute(s), may
lawfully do or cause to be done by virtue hereof.
Dated: February 25, 1997 /s/Russell A. Belinsky
-----------------------------
Russell A. Belinsky
POWER OF ATTORNEY
------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
constitutes and appoints John W. McConnell and/or Robert
W. Howeth, severally, his true and lawful attorney in
fact and agent, with full powers of substitution and
resubstitution for him and his name, place and stead, in
any and all capacities, to sign an annual report on Form
10-K for the fiscal year of Fairfield Communities, Inc.,
a Delaware corporation, ended December 31, 1996, and any
or all amendments thereto, and to file same, with all
exhibits, and other documents in connection therewith,
with the Securities and Exchange Commission, granting
unto said attorney in fact and agent, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done in and about the
premises, as fully for all intents and purposes as
necessary to be done in and about the premises, as fully
for all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorney in fact and agent or his substitute(s), may
lawfully do or cause to be done by virtue hereof.
Dated: February 25, 1997 /s/Ernest D. Bennett, III
------------------------------
Ernest D. Bennett, III
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
constitutes and appoints John W. McConnell and/or Robert
W. Howeth, severally, his true and lawful attorney in
fact and agent, with full powers of substitution and
resubstitution for him and his name, place and stead, in
any and all capacities, to sign an annual report on Form
10-K for the fiscal year of Fairfield Communities, Inc.,
a Delaware corporation, ended December 31, 1996, and any
or all amendments thereto, and to file same, with all
exhibits, and other documents in connection therewith,
with the Securities and Exchange Commission, granting
unto said attorney in fact and agent, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done in and about the
premises, as fully for all intents and purposes as
necessary to be done in and about the premises, as fully
for all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorney in fact and agent or his substitute(s), may
lawfully do or cause to be done by virtue hereof.
Dated: February 25, 1997 /s/Philip L. Herrington
---------------------------
Philip L. Herrington
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
constitutes and appoints John W. McConnell and/or Robert
W. Howeth, severally, his true and lawful attorney in
fact and agent, with full powers of substitution and
resubstitution for him and his name, place and stead, in
any and all capacities, to sign an annual report on Form
10-K for the fiscal year of Fairfield Communities, Inc.,
a Delaware corporation, ended December 31, 1996, and any
or all amendments thereto, and to file same, with all
exhibits, and other documents in connection therewith,
with the Securities and Exchange Commission, granting
unto said attorney in fact and agent, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done in and about the
premises, as fully for all intents and purposes as
necessary to be done in and about the premises, as fully
for all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorney in fact and agent or his substitute(s), may
lawfully do or cause to be done by virtue hereof.
Dated: February 25, 1997 /s/Bryan D. Langton
---------------------------
Bryan D. Langton
POWER OF ATTORNEY
------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
constitutes and appoints John W. McConnell and/or Robert
W. Howeth, severally, his true and lawful attorney in
fact and agent, with full powers of substitution and
resubstitution for him and his name, place and stead, in
any and all capacities, to sign an annual report on Form
10-K for the fiscal year of Fairfield Communities, Inc.,
a Delaware corporation, ended December 31, 1996, and any
or all amendments thereto, and to file same, with all
exhibits, and other documents in connection therewith,
with the Securities and Exchange Commission, granting
unto said attorney in fact and agent, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done in and about the
premises, as fully for all intents and purposes as
necessary to be done in and about the premises, as fully
for all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorney in fact and agent or his substitute(s), may
lawfully do or cause to be done by virtue hereof.
Dated: February 25, 1997 /s/Charles D. Morgan
--------------------------
Charles D. Morgan
POWER OF ATTORNEY
------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
constitutes and appoints John W. McConnell and/or Robert
W. Howeth, severally, his true and lawful attorney in
fact and agent, with full powers of substitution and
resubstitution for him and his name, place and stead, in
any and all capacities, to sign an annual report on Form
10-K for the fiscal year of Fairfield Communities, Inc.,
a Delaware corporation, ended December 31, 1996, and any
or all amendments thereto, and to file same, with all
exhibits, and other documents in connection therewith,
with the Securities and Exchange Commission, granting
unto said attorney in fact and agent, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done in and about the
premises, as fully for all intents and purposes as
necessary to be done in and about the premises, as fully
for all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorney in fact and agent or his substitute(s), may
lawfully do or cause to be done by virtue hereof.
Dated: February 25, 1997 /s/William C. Scott
--------------------------
William C. Scott
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
the Registrant's December 31, 1996 10-K and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 7008
<SECURITIES> 0
<RECEIVABLES> 166319
<ALLOWANCES> 14250
<INVENTORY> 42284
<CURRENT-ASSETS> 0
<PP&E> 24519
<DEPRECIATION> 9992
<TOTAL-ASSETS> 253799
<CURRENT-LIABILITIES> 0
<BONDS> 58110
0
0
<COMMON> 134
<OTHER-SE> 134165
<TOTAL-LIABILITY-AND-EQUITY> 253799
<SALES> 137971
<TOTAL-REVENUES> 152484
<CGS> 43910
<TOTAL-COSTS> 57371
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 5390
<INTEREST-EXPENSE> 6757
<INCOME-PRETAX> 24494
<INCOME-TAX> 9631
<INCOME-CONTINUING> 14863
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14863
<EPS-PRIMARY> 1.30
<EPS-DILUTED> 0
</TABLE>
