DC4MS

FAQ re: Member Update of August 21, 2006

Does the announced rationalization of destination offerings represent a change from Tanner & Haley’s recent promise to meet “substantially all travel commitments”?

No. We were and are committed to providing our Members with a broad range of destinations, residences and services, and to meeting our travel commitments to our Members to the greatest extent possible. At the same time, our ability to successfully navigate the financial reorganization process requires us to manage our business during that process in a way that makes economic and operational sense.

With that in mind, after thoroughly reviewing Member demand patterns, the costs associated with particular destinations and residences, and other factors, we have developed and implemented some modifications to our destination offerings that we think will best accommodate our Members’ travel preferences while allowing us to serve Members in a financially sustainable manner.

We will do our very best to accommodate any Members whose scheduled vacations are affected by this destination rationalization and to provide them with satisfactory alternatives.

Does the company stand by its commitment to provide a wide range of destinations?

Yes. After the rationalization process is fully implemented later this year, we expect to be operating in about 23 destinations, with a total of about 132 residences in those destinations. We are currently operating in 28 destinations with an active inventory of 192 owned and managed homes.

Is this the first time you have rationalized your destinations?

No. From time to time over the past eight years, the company has added or eliminated destinations, or has trimmed the number of properties in some destinations and increased the number of properties in other destinations, based upon Member demand patterns, to enhance the efficiency of its operations.

Will you be using a lottery approach every holiday season?

Not necessarily. The lottery approach we’ve developed for this year’s holiday season has been designed to best serve our Members during the reorganization process. Whether such an approach will be needed after the completion of that process has not yet been determined.

What if I cannot get the specific property that I want?

Now, as always, it may be necessary for Members to be somewhat flexible in the accommodations they are willing to accept.

When will the new daily fee structure take effect?

It will take effect beginning with travel dates on or after September 1, 2006. Please note that in order to travel with your Club you must have current billing information on file with the company.

If I don’t like this new program, can I cancel my pending reservations?

Yes, you may do so, as long as you notify your MSA in writing by September 8, 2006. After that date, normal Club policies regarding cancellation will apply.

Is “Members First” no longer an official company mantra?

To the extent that “Members First” means doing whatever it takes to keep a Member happy even if we lose money in doing so, it is not. Nevertheless, we remain committed to continuing to provide our Members with a wide choice of destinations and residences as well as outstanding service.

Has the company taken other steps to reduce its operating costs?

Yes. Since late 2005, the company has taken a much more cost-conscious approach to running its business, and in a first round of non-Member-related cost cuts earlier this year it reduced its operational overhead by 40 percent. Since then the company has looked for ways to further reduce its operating costs—including ways of operating its destinations and residences based on a highest-quality-with-lowest-cost approach.

Could my Club shut down? Will I lose more money if I pay dues and fees now?

Our plan is designed to keep our Clubs viable during the Chapter 11 process, protect and preserve vacation usage throughout the holidays, and reorganize and exit Chapter 11 as soon as possible. We also have Court authority to borrow the funds we need to operate and pay for restructuring costs. While we will continue to look for ways to cut costs while still providing first-class service, our vitality depends almost entirely on continued Club usage by Members and their acceptance of the associated rates and fees. If Members do not support their Club and help it generate cash flow based on the interim approach we have adopted, we could find it necessary to cut back further or, in a worst-case scenario, even shut down. But even under that extreme scenario, if we fail to provide you with the nights you confirm and pay for under this interim program during the reorganization process, you would be entitled to a full refund as an administrative expense priority in the company’s bankruptcy case—ahead of other Member/creditor claims for moneys paid prior to the company’s Chapter 11 filing. (You would not, however, be entitled to other damages or claims relating to the cancelled vacation, just to the return of your post-bankruptcy money.)

When can we expect a new comprehensive business plan?

We will be developing a Plan of Reorganization in consultation with the Unsecured Creditors Committee in the months ahead. The Plan will include details on our revised business model, as well as the revised Membership Agreements that Members will be asked to approve.