Preferred Status Exchange (PSE) Resorts

INTRODUCTION; CONFLICT; DEFINED TERMS.

These terms and conditions ("Terms and Conditions") for the Preferred Status® Exchange ("PSE") program set forth the legally binding contract between Fairfield Resort Management Services, Inc. ("Exchange Agent" or "we") and each person who participates in and/or uses PSE pursuant to their resort's Affiliation Agreement, as hereinafter defined. These Terms and Conditions are intended to supplement that certain Affiliation Agreement between an Affiliated Resort (as defined below) and the Exchange Agent (each an "Affiliation Agreement"). In the event of a conflict between these Terms and Conditions and an Affiliation Agreement, these Terms and Conditions shall govern and control unless otherwise expressly stated in the Affiliation Agreement. Any capitalized terms not otherwise defined in these Terms and Conditions shall have the meanings ascribed to them in the applicable Affiliation Agreement.

THE AFFILIATION AGREEMENT.
1. Affiliation Agreements are generally for an initial term of between 1-3 years, with provisions for automatic renewals and containing provisions which permit termination by either party.
2. The terms of the Affiliation Agreements can be changed by the concurrence of both the Affiliated Resort and the Exchange Agent.
3. You may ask for a copy of the Affiliation Agreement for the Affiliated Resort at which you own for a complete explanation of all of its terms.
4. If an Affiliated Resort fails to maintain the quality, fiscal soundness and/or other requirements for its affiliation, the Exchange Agent may suspend or terminate the Affiliated Resort's affiliation with the PSE Program.
5. If the Affiliation Agreement for your home resort is terminated for any reason, you will no longer be a PSE Member (as defined below) and your resort will no longer be an Affiliated Resort.
THE PSE PROGRAM.

Exchange Agent will allow all PSE Members (as defined below) who comply with these Terms and Conditions to participate in the PSE program ("PSE Program"). Exchange Agent may from time to time send communications and related materials, including a PSE DIRECTORY OF RESORTS, to all PSE Members. Exchange Agent is only responsible for the written representations that it makes concerning Exchange Agent and the PSE Program, and is not responsible for any representations made by any other person or entity. The obligations of Exchange Agent under these Terms and Conditions can be performed only by Exchange Agent, its authorized representative(s) or its designated licensee(s).

PSE MEMBERSHIP.
1. Each person who has the legal right to own, occupy or use accommodations ("Use Time") at a resort or association that has entered into an Affiliation Agreement (an "Affiliated Resort") is automatically eligible to participate in the PSE Program for as long as the respective Affiliation Agreement remains in effect. Any person eligible to participate in the PSE Program that has not opted-out shall be known as a PSE Member ("PSE Member" or "you").
2. You membership in PSE is voluntary.
3. Your agreement with Exchange Agent hereunder is separate and distinct from your contract to purchase a timeshare interest, unless Exchange Agent and the developer or an affiliate of developer are one and the same.
4. PSE Members may opt-out of the PSE Program by providing the Exchange Agent with notice of their intent to opt-out. Any PSE Member who opts-out of the PSE Program will no longer be able to make reservations at any participating Affiliated Resort, except for their home resort, and they shall have no additional rights to utilize the other PSE Program features or benefits.
5. Any person who has previously opted-out of the PSE Program, or otherwise has the legal right to Use Time at an Affiliated Resort but is not a PSE Member, may opt-in to the PSE Program and become a PSE Member at any time by contacting the Exchange Agent and executing an application and disclosure form.
6. PSE Membership must be in the name of the individual(s) who owns the Use Time. If Use Time is owned by a corporation, partnership, trust or other entity, that entity must identify an individual as the PSE Member, and Exchange Agent shall be entitled to treat such individual as the PSE Member for all purposes.
7. All the deeded owners of a single increment of Use Time may apply for a single PSE Membership. Exchange Agent may honor instructions from any person listed as a co-owner of Use Time, or their designees, listed on a PSE Membership and, in the event of conflicting instructions, Exchange Agent may refuse to honor the later instruction received.
TRANSFERRING A PSE MEMBERSHIP.

If you sell or otherwise transfer your Use Time, the purchaser or transferee of your Use Time may become a PSE Member by contacting Exchange Agent and executing an application and disclosure form, as well as any other documentation and fees as Exchange Agent may then require. Exchange Agent will not recognize a purchaser or transferee as a PSE Member until the required documents and fees have been received and processed. Exchange Agent reserves the right, in its sole discretion, to refuse to accept any PSE Membership transfer application and fee.

RELATIONSHIP BETWEEN EXCHANGE AGENT AND THE AFFILLIATED RESORT.
1. Each Affiliated Resort is a party to an Affiliation Agreement with the Exchange Agent, which Affiliation Agreement enables the owners at each Affiliated Resort to access the PSE Program. These Terms and Conditions are separate and distinct from Exchange Agent's agreement with the Affiliated Resort.
2. The Exchange Agent, Affiliated Resort, developer, marketer, and/or sellers of Use Time are all separate and distinct entities, and the PSE Program is separate and distinct from the products or services that are sold by or on behalf of the Affiliated Resort, including but not limited to Use Time. These Terms and Conditions are separate and distinct from any agreement you may have with the Affiliated Resort, developer, marketer or seller of Use Time, including without limitation your purchase contract, your promissory note, the governing documents for your home resort and/or your membership, if any, with any exchange company.
3. If an Affiliated Resort fails to perform the obligations in its Affiliation Agreement with Exchange Agent, or upon the termination or earlier expiration of the Affiliation Agreement, such Affiliated Resort shall lose its 'Affiliated Resort' status and Exchange Agent will suspend or terminate the rights of the PSE Members who own Use Time at that resort.
4. Your decision to purchase Use Time should be based primarily upon the benefits to be gained from the ownership, use and enjoyment of your Use Time at the Affiliated Resort and not upon the anticipated benefits of the PSE Program. The Affiliated Resort at which you purchase your Use Time is solely responsible for its financial viability and the quality of accommodations, facilities, amenities, management and services and compliance with all laws, rules and regulations.
5. Information about Affiliated Resorts provided by Exchange Agent is based on information obtained from Affiliated Resorts, and Exchange Agent takes commercially reasonable efforts to ensure that the information on the Affiliated Resorts provided by Exchange Agent is accurate and complete as of the date such information is published by Exchange Agent. However, Exchange Agent expressly disclaims any liability for inaccurate, incomplete or misleading Affiliated Resort information.
DEPOSITING USE TIME AND REQUESTING AN EXCHANGE.
1. To participate in the PSE Program, you must be a PSE Member who owns Use Time at an Affiliated Resort, and you must be in full compliance with these Terms and Conditions.
2. By depositing Use Time into the PSE Program, you represent and warrant to Exchange Agent that: (1) you have or will have the legal right to use or assign the use of the deposited Use Time and all other resort amenities to which you have access; (2) the deposited Use Time has not been and will not be assigned, offered or made available to any third party; (3) the physical accommodations in which you own Use Time are in good and usable condition; (4) all maintenance fee assessments, taxes and other similar charges applicable to that Use Time have been paid or will be paid when due, according to the guidelines established by your association.
3. By depositing Use Time into the PSE Program, you relinquish all rights to use that Use Time and agree that such deposited Use Time may be used by Exchange Agent to conduct exchanges, inspection visits, promotions and for other purposes at Exchange Agent's discretion, whether or not you have requested or received an exchange. You may withdraw that Use Time only if that Use Time has not been assigned and a confirmation has not been sent.
4. Options available to PSE Members for the exchange of Use Time, and the procedures and conditions governing such options, are set out in this Directory, as well as the various publications and other materials Exchange Agent may from time to time provide. Such procedures and conditions are incorporated herein in their entirety. Use Time deposits and exchange requests are accepted subject to your compliance with these procedures and conditions.
5. Our ability to confirm an exchange request is dependent upon the availability of Use Time within the PSE Program or as provided by the Affiliated Resorts. We cannot, therefore, guarantee the availability of specific resort choices, dates of travel, or types or sizes of accommodations. All reservations are confirmed on a space-available basis.
6. PSE exchange reservations are valid only if issued by Exchange Agent or a party authorized by Exchange Agent. Upon receipt of a PSE reservation confirmation, please check all the details and notify us immediately if anything is incorrect.
7. Exchange Agent will enforce any reasonable restrictions on exchanges that may be required by Affiliated Resorts. These restrictions may include, but are not limited to, minimum age requirements.
8. You must use your current year Use Time in the PSE Program by December 31 of the current year or you will lose all credit for it. However, you may extend your travel deadline from December 31 of the current year to December 31 of the following year through the Freedom Plus program. To utilize Freedom Plus, you must notify Exchange Agent by June 30 of the current year that you wish to carry over your current year Use Time to the following year. You must confirm a PSE exchange reservation for the carried over Use Time by June 30 of that following year and you must travel by December 31 of that following year. Use Time may be carried over for one year only through Freedom Plus.
9. Not all PSE Program options are available at all Affiliate Resorts. Please check with the Exchange Agent regarding the availability of special exchange options and program features at each resort.
10. By making a reservation through the PSE Program, you understand and agree that (i) the reservation, if made through the PSE Program, constitutes a "voluntary exchange" of your current use rights at your home resort, (ii) by making the reservation, your current year's use rights have been automatically assigned to the Exchange Agent, and (iii) your participation in the PSE Program is voluntary and remains subject to the terms and conditions of the PSE Program and the continued affiliation of your home resort.
RESERVATIONS FOR PSE MEMBERS AT CHARTER RESORTS.

All reservations for PSE Members whose home resort is a Charter Resort are made through the PSE reservation system, including reservations made for such PSE Member's home resort. Reservation costs are assessed pursuant to the Charter Resort's management agreement, and accordingly, PSE Members at Charter Resorts are not required to pay an additional per transaction exchange fee unless they exchange into a Non-Charter Resort or utilize certain special exchange options available under the PSE Program.

RESERVATIONS FOR PSE MEMBERS AT NON-CHARTER RESORTS.

For each exchange requested by a PSE Member whose home resort is a Non-Charter Resort, an exchange fee will be required by Exchange Agent to process and confirm each exchange request, whether at a Charter Resort or Non-Charter Resort.

USE OF ACCOMMODATIONS.
1. You acknowledge that accommodations at an Affiliated Resort into which you exchange may differ in unit size, design, furnishings, amenities and facilities from the accommodations of your home resort. Exchange Agent makes no guarantee with regard to any of the foregoing.
2. The total number of people occupying the exchange accommodations must not exceed the maximum occupancy of the unit, as set by the applicable Affiliate Resort’s rules and regulations. You agree that you will comply with such rules and regulations and such other applicable governing documents of the in-bound Affiliate Resort, including but not limited to the in-bound Affiliate Resort’s covenants, conditions and restrictions or other documents or instruments of record of a similar type or nature.
3. You are responsible for payment of any applicable taxes, port charges, all-inclusive fees, gratuities, personal expenses, utility charges, housekeeping charges, security deposits and other fees or charges levied by an Affiliated Resort for the use of amenities and facilities.
4. You and your guests must occupy and use any accommodations into which you or your guests have exchanged in a responsible, careful and secure manner. You are responsible for any damage, theft or loss caused by you and/or your guests.
5. If the accommodations for which a PSE exchange reservation has been confirmed become unavailable due to a natural disaster, an act of God, civil unrest or any other reason beyond Exchange Agent’s control, you hereby waive any and all claims against Exchange Agent.
6. Any complaints about the accommodations or services provided at an Affiliated Resort should be made at the earliest opportunity to a person in authority at the Affiliated Resort. If this does not produce a satisfactory result, you should write to Exchange Agent, Attention: Member Services Department, 8427 SouthPark Circle, Suite 500, Orlando, Florida, 32819. Please provide full details of the complaint within thirty (30) days from your travel date.
MEMBERS AND GUESTS.
1. PSE exchange reservation confirmation may not be used for any commercial purpose, including rental or sale of the time period/unit that is represented by such confirmation. A confirmed PSE exchange reservation may only be used by the PSE Member who receives it from the Exchange Agent, unless that Member gives the confirmed PSE exchange reservation to a friend or family member. PSE exchange reservations may not be used by persons under the age of twenty-one (21). Reservations for Preferred Time and Family & Friends Time may be restricted depending upon the rules and regulations of the applicable Affiliated Resort.
2. You are responsible for all acts and omissions of your guests and for any damages caused or expenses incurred by your guests.
BULK OWNERS.

No bulk owner shall have the right to reserve Use Time or Preferred Time without written approval from the Exchange Agent, which approval may be withheld or conditioned in the sole discretion of Exchange Agent. For the purpose of this provision, bulk owner shall mean any owner, whether an individual, club, corporation, licensee, agent or other entity in which owners have the right to reserve more than ten (10) intervals (weeks) within the PSE Program.

CANCELLATION.
1. We reserve the right (without refund or credit) to cancel a confirmed PSE exchange reservation, cancel an exchange request or otherwise deny the exchange privileges of any PSE Member whose payment is rejected by the PSE Member’s bank, debit card, or credit card company or who has not paid maintenance fee assessments or similar charges with respect to the PSE Member’s Use Time (as established by the PSE Member’s home resort), or who fails to abide by these Terms and Conditions.
2. You may cancel a PSE exchange reservation by notifying Exchange Agent by telephone or in writing so that the cancellation is received up to and including forty-eight (48) hours prior to an arrival date. All cancellations are subject to a cancellation fee.
3. After cancellation, exchanged Use Time will remain available to the PSE Member for use towards another exchange until the end of the applicable Use Year.
4. In the event that an Affiliated Resort becomes uninhabitable due to a natural disaster, an act of God, civil unrest or any other reason beyond Exchange Agent’s control ("Force Majeure"), Exchange Agent is not liable for the resulting cancellations. If applicable, additional exchange fees may be assessed when making alternative exchange requests.
5. The above guidelines may not apply to special programs offered by or through Exchange Agent.
GENERAL.
1. Telephone conversations to and from Exchange Agent representatives may be tape recorded and/or monitored for training and quality control purposes.
2. Exchange Agent or our representatives may on occasion offer products and services through telephone, e-mail, or mail solicitations. We will continue to contact you with these offers unless you instruct us otherwise and/or as permitted by law.
3. Exchange Agent shall have no liability for any loss, injury or damage occurring as a result of any third parties. Exchange Agent’s liability for any loss, injury or damage, incurred as a result of Exchange Agent’s action or failure to act, will be limited to the exchange fee or other consideration paid for the exchange or other service or accommodation provided by Exchange Agent in which such loss or damage occurred, and in no event will Exchange Agent be liable for special, consequential or punitive damages. This limitation of liability shall also apply to all affiliated companies, servants and agents of Exchange Agent.
4. If Exchange Agent should be prevented, hindered or delayed in the performance of any obligation hereunder, including but not limited to providing lodging accommodations, due to an event of Force Majeure beyond its reasonable control, and which cannot be circumvented by Exchange Agent through the use of alternate sources or other means, then Exchange Agent shall be excused from further performance upon written notice to the affected PSE Member stating the reason for such nonperformance.
5. These Terms and Conditions and the PSE Program, including, but not limited to fees, benefits, seasonal designations, classification grouping and other priorities and procedures for requesting and effecting exchanges, may be changed from time to time by Exchange Agent. PSE Members will be notified of changes in these Terms and Conditions via updates mailed not less frequently than annually to each PSE Member at the last known mailing address (as set forth in the PSE account records). Alternatively, notice of amendments or changes may be made by newsletter, publication, confirmations or annual mailings. An amendment to any of the PSE documents will be effective on publication or mailing.
6. Exchange Agent may create different classes of PSE Members with access to different benefits and/or the ability to make a PSE exchange reservation at different Affiliated Resorts. Exchange Agent may also charge different membership and enrollment fees to the different classes of PSE Members. The rights and benefits of a particular type of PSE Member will be set forth in the publications and other materials provided by Exchange Agent.
7. Exchange or non-exchange related programs and services offered through Exchange Agent or by third parties with the permission of Exchange Agent shall, where applicable, be governed by these Terms and Conditions but may be subject to additional and/or separate terms and conditions and may be changed or eliminated without prior notice to you. Unless specifically stated to the contrary, or where the context requires otherwise or where otherwise prohibited, in the event of a conflict between these Terms and C onditions and any additional and/or separate terms, these Terms and Conditions shall govern and control. Exchange Agent accepts no responsibility for the acts or omissions of any third parties providing such programs or services directly to you.
8. If you or your guests fail to comply with these Terms and Conditions or fail to pay any sums owed to Exchange Agent, any Affiliated Resort, or any other entity affiliated with Exchange Agent, your confirmed exchange may be revoked, your PSE Membership may be suspended or terminated, or access may be denied to any of the products or services offered by Exchange Agent without further obligation. In addition, Exchange Agent may cancel a PSE Membership if required to do so by any local, state or federal governmental entity (or its equivalent if a foreign country) and any laws, rules or regulations that may apply. In the event of a suspension based upon non-payment, your exchange privileges will remain suspended until all sums that are owed are paid in full.
9. These Terms and Conditions and the PSE Program shall be governed exclusively by the laws of the State of California. Any action at law or in equity by a PSE Member or guest, who is either vacationing with the PSE Member or who is traveling in lieu of the PSE Member, to seek any remedy against Exchange Agent or its associated entities must be submitted exclusively to the jurisdiction of the courts of Orange County, California (USA). In the event that an action at law or in equity is initiated by a PSE Member or guest and Exchange Agent prevails, that PSE Member or guest shall pay all costs incurred by Exchange Agent in defending such action, including reasonable attorney fees and costs.

Dated: June, 2005.