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Security Pacific (a local financial institution) agreed to provide
development financing, as well as a bridge loan, to refinance the
First American loan. Security Pacific conditioned its financing
agreement on WVI’s ability to reduce its outstanding debt.
Consequently, in order to obtain debt forgiveness and secure
additional guarantors, WVI proposed a joint venture with Bush and
Offsite.
Powhatan Associates
On November 19, 1986, WVI, Bush, and Offsite formed Powhatan
Associates. WVI contributed the development assets (which
consisted of the Powhatan Plantation time-share project, land,
unsold inventory, and contractual and other rights associated with
the project net of project liabilities) as well as its services and
expertise as a developer and administrator. Bush and Offsite each
agreed to forgive the debt owed them by WVI; they further agreed to
guarantee certain liabilities of WVI to repurchase defaulting time-
share contracts under several financial agreements. Offsite agreed
to continue to provide marketing services to the joint venture in
exchange for an allocation of the fees and expenses relating to its
marketing operations. Bush agreed to continue to provide
construction services to Powhatan Plantation so long as it was
allocated the profits and expenses associated with construction.
The parties agreed that WVI would receive all of its administration
costs (including reasonable salaries), plus 1-1/2 percent of the
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