AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of March 28, 1995
and
Amended and Restated as of July 31, 1996
among
FAIRFIELD CAPITAL CORPORATION
FAIRFIELD ACCEPTANCE CORPORATION
FAIRFIELD COMMUNITIES, INC.
TRIPLE-A ONE FUNDING CORPORATION
THE FIRST NATIONAL BANK OF BOSTON
as L/C Bank
and
CAPITAL MARKETS ASSURANCE CORPORATION
as Administrative Agent and Collateral Agent
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS . ..... . . . . . . . . . . . . . . . . 2
SECTION 1.01 Certain Definitions . . . . . . . . . 2
-------------------
SECTION 1.02. Accounting Terms . . . . . . . . . . 3
----------------
SECTION 1.03. Other Terms . . . . . . . . . . . . . 3
-----------
SECTION 1.04. Computation of Time Periods . . . . . 3
---------------------------
ARTICLE II
THE TRIPLE-A LOANS ...... . . . . . . . . . . . . . 3
------------------
SECTION 2.01. The Triple-A Loans . . . . . . . . . 3
------------------
SECTION 2.02. Note. . . . . . . . . . . . . . . . . 4
----
SECTION 2.03. Making the Triple-A Loans . . . . . . 5
-------------------------
SECTION 2.04. Reduction of Facility Limit. . . . . 6
---------------------------
SECTION 2.05. Repayments; Manner of Payment and
---------------------------------
Prepayment . . . . . . . . . . . . . . . . . . 6
----------
SECTION 2.06. Interest on Triple-A Loans; Default
-----------------------------------
Interest . . . . . . . . . . . . . . . . . . . 7
--------
SECTION 2.07. Voluntary and Mandatory Prepayment of
-------------------------------------
Triple-A Loans . . . . . . . . . . . . . . . . 8
--------------
SECTION 2.08. Compensation . . . . . . . . . . . . 9
------------
SECTION 2.09. Increased Costs, Capital Adequacy . . 10
---------------------------------
SECTION 2.10. Taxes . . . . . . . . . . . . . . . . 12
-----
SECTION 2.11. Fees . . . . . . . . . . . . . . . . 13
----
ARTICLE III
CONDITIONS OF LENDING; ISSUANCE, AMENDMENT,
------------------------------------------
EXTENSIONAND RENEWAL OF LETTER OF CREDIT . . . . . . 15
---------------------------------------
SECTION 3.01. Conditions Precedent to the Amendment
-------------------------------------
and Restatement and to the Corresponding
----------------------------------------
Borrowing. . . . . . . . . . . . . . . . . . 15
---------
SECTION 3.02. Conditions Precedent to Each Borrowing.16
--------------------------------------
SECTION 3.03. Letter of Credit. . . . . . . . . . . 21
----------------
ARTICLE IV
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . 23
------------------------------
SECTION 4.01. Representations and Warranties of the
-------------------------------------
Borrower . . . . . . . . . . . . . . . . . . . 23
--------
SECTION 4.02. Representations and Warranties Regarding
----------------------------------------
Each Pledged Contract in the Contract Pool . . 31
------------------------------------------
SECTION 4.03. Representations and Warranties Regarding
----------------------------------------
the 1995 Contract Pool . . . . . . . . . . . . 40
----------------------
SECTION 4.04. Representations and Warranties Regarding
----------------------------------------
the Contract Files. . . . . . . . . . . . . . . 40
------------------
ARTICLE V
GENERAL COVENANTS . . . . . . . . . . . . . . . . . 41
-----------------
SECTION 5.01. Affirmative Covenants of the Borrower 41
-------------------------------------
SECTION 5.02. Negative Covenants of the Borrower. . 51
----------------------------------
ARTICLE VI
REPORTING REQUIREMENTS . . . . . . . . . . . . . . 56
----------------------
SECTION 6.01. Reporting Requirements of the Servicer 56
--------------------------------------
SECTION 6.02. Additional Reporting Requirements; FAC
--------------------------------------
and FCI; SEC Filings . . . . . . . . . . . . . 59
--------------------
SECTION 6.03. Miscellaneous Borrower and Servicer
-----------------------------------
Reporting Requirements . . . . . . . . . . . . 62
----------------------
ARTICLE VII
SECURITY INTEREST . . . . . . . . . . . . . . 63
------------------
SECTION 7.01. Grant of . . . . . . . . . . . . . . 63
--------
SECTION 7.02. Continuing Liability of the Borrower 65
------------------------------------
SECTION 7.03. Filings; Further Assurances . . . . . 66
----------------------------
SECTION 7.04. Place of Business; Change of Name. . 68
---------------------------------
SECTION 7.05. Lock-Box Accounts; Collection Account.68
-------------------------------------
SECTION 7.06. Collection Account. . . . . . . . . . 69
------------------
SECTION 7.07. Spread Account. . . . . . . . . . . . 75
--------------
SECTION 7.08. Accounts, Generally. . . . . . . . . 77
-------------------
SECTION 7.09. Rights of Obligors and Release of
---------------------------------
Contract Files . . . . . . . . . . . . . . . . 77
--------------
SECTION 7.10. Recordation of Assignments . . . . . 78
--------------------------
SECTION 7.11. Releases . . . . . . . . . . . . . . 79
--------
SECTION 7.12. Remarketing Obligations . . . . . . . 82
-----------------------
ARTICLE VIII
THE LETTER OF CREDIT FACILITY. . . . . . . . . . . . 83
-----------------------------
SECTION 8.01. Issuance of the Letter of Credit and
------------------------------------
Amendments. . . . . . . . . . . . . . . . . . . 83
----------
SECTION 8.02. L/C Reimbursement Obligations. . . . 86
-----------------------------
SECTION 8.03. Letter of Credit Fees. . . . . . . . 87
---------------------
SECTION 8.04. Acceptance and Payment. . . . . . . . 88
----------------------
SECTION 8.05. Modification and Extension. . . . . . 89
--------------------------
SECTION 8.06. Governing Rules. . . . . . . . . . . 89
---------------
SECTION 8.07. Grant of L/C Bank Lien. . . . . . . . 89
----------------------
SECTION 8.08. Subordination of L/C Bank Lien and L/C
--------------------------------------
Bank Obligations. . . . . . . . . . . . . . . . 90
----------------
SECTION 8.09. Preservation of Rights in Collateral. 92
------------------------------------
SECTION 8.10. Rights Not Exclusive. . . . . . . . . 92
--------------------
SECTION 8.11. No Waiver. . . . . . . . . . . . . . 93
---------
SECTION 8.13. The L/C Cash Collateral Account. . . 93
-------------------------------
ARTICLE IX
SERVICING OF CONTRACT POOL . . . . . . . . . . . . . 96
--------------------------
SECTION 9.01. Responsibility for Contract
---------------------------
Administration . . . . . . . . . . . . . . . . 96
--------------
SECTION 9.02. Standard of Care . . . . . . . . . . 97
----------------
SECTION 9.03 Records . . . . . . . . . . . . . . . 97
-------
SECTION 9.04. Inspection . . . . . . . . . . . . . 97
----------
SECTION 9.05. Enforcement . . . . . . . . . . . . . 98
-----------
SECTION 9.06. Collateral Agent to Cooperate . . . 100
-----------------------------
SECTION 9.07.Other Matters Relating to the Servicer 100
--------------------------------------
SECTION 9.08. Servicer Insurance Coverage . . . . 100
---------------------------
SECTION 9.09. Servicing Compensation . . . . . . 101
-----------------------
SECTION 9.10. Costs and Expenses . . . . . . . . 101
------------------
SECTION 9.11.Servicer Representations and Warranties101
---------------------------------------
SECTION 9.12. Additional Covenants of the Servicer 103
------------------------------------
SECTION 9.13. Advances by Servicer . . . . . . . 107
--------------------
SECTION 9.14. FCI and the Servicer . . . . . . . 107
--------------------
SECTION 9.15. The Servicer not to Resign . . . . 112
--------------------------
SECTION 9.16. Merger or Consolidation of, or
------------------------------
Assumption of the Obligations of Servicer . . 112
-----------------------------------------
SECTION 9.17. Examination of Records . . . . . . 113
----------------------
ARTICLE X
EVENTS OF DEFAULT; REMEDIES . . . . . . . . . . . 113
---------------------------
SECTION 10.01. Events of Default . . . . . . . . 113
------------------
SECTION 10.02. Remedies . . . . . . . . . . . . . 118
--------
SECTION 10.03. Optional Preservation of Collateral 119
-----------------------------------
SECTION 10.04. Restoration of Rights and Remedies 120
----------------------------------
SECTION 10.05. Waiver of Stay or Extension Laws . 120
--------------------------------
SECTION 10.06. Sale of Collateral . . . . . . . . 120
------------------
SECTION 10.07. Recovery of Judgment . . . . . . . 121
--------------------
ARTICLE XI
SERVICER DEFAULTS . . . . . . . . . . . . . . 121
-----------------
SECTION 11.01. Servicer Defaults . . . . . . . . 121
-----------------
SECTION 11.02. Appointment of Successor . . . . . 125
------------------------
SECTION 11.03. Certain Matters Affecting the Successor
---------------------------------------
Servicer . . . . . . . . . . . . . . . . . . 126
--------
ARTICLE XII
INDEMNITIES . . . . . . . . . . . . . . . . 127
-----------
SECTION 12.01. Liabilities to Obligors . . . . . 127
-----------------------
SECTION 12.02. Tax Indemnification . . . . . . . 127
-------------------
SECTION 12.03. Servicer's Indemnities . . . . . . 127
----------------------
SECTION 12.04. FAC's Indemnities . . . . . . . . 128
-----------------
SECTION 12.05. Borrower's Indemnities . . . . . . 128
----------------------
SECTION 12.06. Operation of Indemnities . . . . . 130
------------------------
ARTICLE XIII
THE COLLATERAL AGENT . . . . . . . . . . . 130
--------------------
SECTION 13.01. Authorization and Action. . . . . 130
------------------------
SECTION 13.02. Delegation of Duties . . . . . . . 131
--------------------
SECTION 13.03. Exculpatory Provisions . . . . . . 131
----------------------
SECTION 13.04. Reliance by Collateral Agent. . . 132
----------------------------
SECTION 13.05. Notice of Termination Events; Etc. 132
---------------------------------
SECTION 13.06. Non-Reliance on Collateral Agent and
------------------------------------
Other Secured Creditors . . . . . . . . . . . 133
-----------------------
SECTION 13.07. Reimbursement and Indemnification. 133
---------------------------------
SECTION 13.08. Collateral Agent in Its Individual
----------------------------------
Capacity . . . . . . . . . . . . . . . . . . 134
--------
SECTION 13.09. Successor Collateral Agents. . . . 134
---------------------------
SECTION 13.10. UCC Filings and Title Certificates 135
----------------------------------
ARTICLE XIV
MISCELLANEOUS . . . . . . . . . . . . . . . 135
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SECTION 14.01. Amendments, Etc. . . . . . . . . . 135
----------------
SECTION 14.02. Notices, Etc. . . . . . . . . . . 135
-------------
SECTION 14.03. No Waiver; Remedies . . . . . . . 136
-------------------
SECTION 14.04. Binding Effect; Assignability;
------------------------------
Termination . . . . . . . . . . . . . . . . . 136
-----------
SECTION 14.05. Release of Collateral . . . . . . 137
----------------------
SECTION 14.06. GOVERNING LAW; WAIVER OF JURY TRIAL 137
-----------------------------------
SECTION 14.07. Costs, Expenses and Taxes . . . . 138
--------------------------
SECTION 14.08. Limitations on Payments . . . . . 139
-----------------------
SECTION 14.09. Execution in Counterparts; Severability
---------------------------------------
. . . . . . . . . . . . . . . . . . . . . . 140
SECTION 14.10. No Bankruptcy Petition Against Triple-A
---------------------------------------
. . . . . . . . . . . . . . . . . . . . . . 140
SECTION 14.11. Further Assurances . . . . . . . . 140
------------------
iii
APPENDICES
----------
APPENDIX A Definitions List
APPENDIX B Form of Letter of Credit
EXHIBITS
--------
EXHIBIT A Form of Triple-A Note
EXHIBIT B Notice of Borrowing
EXHIBIT C List of Closing Documents
EXHIBIT D Pro Forma Contract Grant Date Closing List
EXHIBIT E List of Required Approvals
EXHIBIT F List of Lock-Box Banks and Lock-Box Accounts
EXHIBIT G Forms of Contracts
EXHIBIT H Form of Lock-Box Agreement
EXHIBIT I Servicing Officer's Certificate
EXHIBIT J Certificate Requesting Release of Deed
EXHIBIT K Form of Power of Attorney
EXHIBIT L Form of Request for Issuance of Letter of
Credit
EXHIBIT M Form of Request for Increase of Letter of
Credit
EXHIBIT N Form of Request for Decrease of Letter of
Credit
EXHIBIT O Copy of 1994 Interest Rate Hedge Assignment
EXHIBIT P Form of 1996 Interest Rate Hedge Assignment
EXHIBIT Q Form of Borrowing Base Certificate
EXHIBIT R Form of Assignment
EXHIBIT S Form of Collateral Assignment
EXHIBIT T Form of Assignment of Mortgage
EXHIBIT U Form of Collateral Assignment of Mortgage
EXHIBIT V Form of Release and Consent Agreement
EXHIBIT W Form of Assignment of Credit Life Insurance
EXHIBIT X Credit Standards and Collections Policies
EXHIBIT Y Form of Eligible Hedge Agreement
EXHIBIT Z Form of Remarketing Agreement
EXHIBIT AA Form of Settlement Report
EXHIBIT BB Form of Tax Sharing Agreement
SCHEDULES
---------
SCHEDULE 4.02(u) Environmental Disclosures
SCHEDULE 1 Contract Schedule
SCHEDULE 2 List of Developments
SCHEDULE 3 List of VOI Regimes
v
AMENDED AND RESTATED
CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
March 28, 1995, and amended and restated as of July 31, 1996
(the "Credit Agreement"), among FAIRFIELD CAPITAL
----------------
CORPORATION, a Delaware corporation (the "Borrower"),
--------
TRIPLE-A ONE FUNDING CORPORATION, a Delaware corporation
("Triple-A"), FAIRFIELD ACCEPTANCE CORPORATION, a Delaware
--------
corporation ("FAC"), in its capacity as Servicer hereunder
---
(in such capacity, the "Servicer"), FAIRFIELD COMMUNITIES,
-------
INC., a Delaware corporation ("FCI"), CAPITAL MARKETS
---
ASSURANCE CORPORATION, a New York stock insurance company,
individually ("CapMAC"), and as Collateral Agent and as
------
Administrative Agent (in such respective capacities, the
"Collateral Agent" and the "Administrative Agent"), and THE
---------------- -------------------
FIRST NATIONAL BANK OF BOSTON ("FNBB"), as L/C Bank (in such
----
capacity, the "L/C Bank").
--------
W I T N E S S E T H:
WHEREAS, pursuant to the Receivables Purchase
Agreement, the Borrower has purchased and otherwise
acquired, and may from time to time in the future purchase
and otherwise acquire, Contracts, related collateral
therefor and other related property from FAC; and
WHEREAS, the Borrower has requested that Triple-A
make the Triple-A Loans to the Borrower, the proceeds of
which shall be used to purchase such Contracts, related
collateral and other related property from the Seller in
accordance with the terms of the Receivables Purchase
Agreement; and
WHEREAS, Triple-A will fund such loans by (i) the
issuance of Transaction Commercial Paper Notes or (ii) if
Triple-A is unable for any reason to issue Commercial Paper
Notes, by borrowing under the Liquidity Agreement, dated as
of the date hereof, among Triple-A, the Liquidity Banks and
the Liquidity Agent; and
WHEREAS, as a condition precedent to the foregoing
Triple-A Loans, the Borrower has agreed to grant a security
interest in favor of the Collateral Agent, for the benefit
of each of the Collateral Agent, the Administrative Agent,
Triple-A, and the Surety, in all of its right, title and
interest in, to and under the Collateral as described
herein, in order to secure the Obligations as described
herein; and
WHEREAS, as a further condition precedent to the
foregoing Triple-A Loans, the L/C Bank has agreed to issue
the Letter of Credit for the account of the Borrower,
pursuant to a committed letter of credit facility in favor
of the Collateral Agent, for the benefit of itself, the
Administrative Agent, Triple-A and the Surety; and
WHEREAS, as a condition precedent to the issuance
of the Letter of Credit, the Borrower has agreed to grant a
subordinated security interest in favor of the Collateral
Agent, for the benefit of the L/C Bank, in all of its right,
title and interest in, to and under the Collateral as
described herein, in order to secure the L/C Bank
Obligations as described herein; and
WHEREAS, as a further condition precedent to the
making of Triple-A Loans, pursuant to the terms of the
Insurance Agreement among the Surety, the Liquidity Agent,
the Borrower and Triple-A, the Surety has agreed to issue
the Surety Bonds to guarantee repayment of the Triple-A
Loans and advances to Triple-A made by the Liquidity Banks
under the Liquidity Agreement; and
WHEREAS, subject to the terms and conditions set
forth herein, Triple-A is willing to make the Triple-A Loans
to the Borrower, the L/C Bank is willing to issue the Letter
of Credit (and to amend the Letter of Credit from time to
time hereafter, as provided herein), the Surety has agreed
to issue the Surety Bonds, FAC has agreed to act as Servicer
of the Pledged Contracts and FCI has agreed to guarantee the
servicing obligations of FAC hereunder;
WHEREAS, the parties hereto (other than the L/C
Bank) previously entered into that certain Credit Agreement
dated as of March 28, 1995 (the "Original Credit Agreement")
-------------------------
pursuant to which a Triple-A Loan was made by Triple-A to
the Borrower and a security interest was granted by the
Borrower to the Collateral Agent in and to the 1995 Contract
Pool and related Collateral;
WHEREAS, the parties hereto wish to enter into
this Credit Agreement in order to amend and restate the
Original Credit Agreement, and to evidence the terms and
conditions on which, from and after the Effective
Restatement Date, Triple-A will make Triple-A Loans on
Borrowing Dates, the Borrower will make additional Grants of
Contracts on Contract Grant Dates, and the L/C Bank will
issue the Letter of Credit, and amend the Letter of Credit
from time to time hereafter;
NOW, THEREFORE, the parties hereto agree as
follows:
2
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Definitions. As used in
-------------------
this Credit Agreement, the Triple-A Note or any certificate
or other document made or delivered pursuant hereto or
thereto, the capitalized terms used herein and therein
shall, unless otherwise defined herein or therein, have the
meanings assigned to them in the Definitions List attached
hereto as Appendix A, the terms of which are incorporated
----------
herein by reference (the "Definitions List").
----------------
SECTION 1.02. Accounting Terms. As used herein,
----------------
in the Triple-A Note and in any certificate or other
document made or delivered pursuant hereto and thereto,
accounting terms not otherwise defined herein and accounting
terms partly defined herein to the extent not defined, shall
have the respective meanings given to them under GAAP.
SECTION 1.03. Other Terms. (a) All other
-----------
undefined terms contained in this Credit Agreement shall,
unless the context indicates otherwise, have the meanings
provided for by the UCC to the extent the same are used or
defined therein.
(b) The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Credit
Agreement shall refer to this Credit Agreement as a whole,
as amended, restated, supplemented or otherwise modified
from time to time after the date hereof, and not to any
particular provision of this Credit Agreement, and Section,
subsection, Schedule and Exhibit references are to this
Credit Agreement unless otherwise specified.
(c) Capitalized terms used herein and in the
Triple-A Note shall be equally applicable to both the
singular and plural forms of such terms.
SECTION 1.04. Computation of Time Periods. In
---------------------------
this Credit Agreement, in the computation of periods of time
from a specified date to a later specified date, the word
"from" shall mean "from and including" and the words "to"
and "until" shall each mean "to but excluding."
ARTICLE II
THE TRIPLE-A LOANS
------------------
SECTION 2.01. The Triple-A Loans. (a) Subject to
------------------
the terms and conditions hereof, Triple-A agrees to make
loans ("Triple-A Loans") on Contract Grant Dates, on not
--------------
more than three occasions during the period from the
Effective Restatement Date to the Termination Date (and, in
the event that the Scheduled Termination Date is extended
for one or more additional 12-month periods, on not more
than three occasions during each such 12-month extension
period), in an aggregate outstanding principal amount not to
exceed at any time the lowest of (i) the Facility Limit in
effect at such time, (ii) the Borrowing Base in effect at
such time, (iii) the Eligible Contract Pool Principal
Balance in effect at such time less the Minimum O/C Amount,
or
3
(iv) the aggregate principal amount of advances and
unused commitments of the Liquidity Banks under the
Liquidity Agreement; provided, however, that the first
-------- -------
Borrowing to take place hereunder shall occur on the
Effective Restatement Date and the third Borrowing to take
place hereunder after the Effective Restatement Date may not
occur prior to the end of the ninth month after the
Effective Restatement Date (and in the event that the
Scheduled Termination Date is extended for one or more
additional 12-month periods, the third borrowing in any such
12-month extension period may not occur prior to the end of
the ninth month from the beginning of such 12-month
extension period). The Triple-A Loan made on the Effective
Restatement Date shall be made in a principal amount of
greater than or equal to $24,000,000, the next succeeding
Triple-A Loan shall be made in a principal amount of greater
than or equal to $25,000,000, and the third Triple-A Loan to
be made hereunder shall be made in a principal amount of
greater than or equal to $20,000,000 (and in the event that
the Scheduled Termination Date is extended for one or more
additional 12-month periods, each of the first and second
Triple-A Loans to be made in any such 12-month extension
period shall be in principal amounts of greater than or
equal to $25,000,000, and the third Triple-A Loan to be made
in any such 12-month extension period shall be in a
principal amount of greater than or equal to $20,000,000).
Notwithstanding anything in the foregoing to the contrary,
under no circumstances shall Triple-A make any Triple-A Loan
if, after giving effect thereto, either an O/C Shortfall or
a Borrowing Base Shortfall would exist.
(b) The Borrowing Base in effect on any date shall
be determined by reference to the most recent Settlement
Report delivered by the Servicer to Triple-A in accordance
with Section 6.01(b) hereof, as adjusted (i) on the most
---------------
recent Contract Grant Date (if any), to reflect additional
Eligible Contracts sold to the Borrower by FAC and Granted
to the Collateral Agent since the delivery of such
Settlement Report (if any), (ii) on any Settlement Date, to
reflect Collections received and applied pursuant to the
terms hereof on or prior to the next preceding Determination
Date, and (iii) on any Settlement Date, to eliminate from
the Eligible Contract Pool Principal Balance the outstanding
Principal Balance of any Pledged Contracts which are either
Defaulted Contracts or Defective Contracts, or which are
otherwise not Eligible Contracts, as of the next preceding
Determination Date.
(c) All of the Triple-A Loans shall mature, and
become due and payable, on the Maturity Date.
SECTION 2.02. Note. All of the Triple-A Loans
------------ ----
shall be evidenced by the amended and restated promissory
note in the form attached hereto as Exhibit A (the "Triple-A
--------- --------
Note") appropriately completed, duly executed and delivered
----
on behalf of the Borrower and payable to the order of
Triple-A. The Borrowing
5
Date and principal amount of each
Triple-A Loan, the interest rate and Interest Period
applicable thereto and each repayment or prepayment of
principal thereof shall be recorded in Triple-A's internal
records and, prior to any transfer of the Triple-A Note, on
the grid schedule annexed thereto, and the Borrower hereby
authorizes Triple-A to make such recordation; provided,
--------
however, that the failure of Triple-A to set forth any or
------
all of such information on such schedule or any error in
such schedule shall not in any manner affect the obligation
of the Borrower to repay the Triple-A Loans in accordance
with the terms hereof and of the Triple-A Note. Such
updated grid schedules, or other proper records maintained
by Triple-A (or by the Administrative Agent on behalf of
Triple-A) in lieu thereof, shall be presumptively correct
evidence of the Triple-A Loans made by Triple-A to the
Borrower. The aggregate outstanding principal amount of the
Triple-A Loans at any time shall be the aggregate principal
amount owing on the Triple-A Note at such time.
SECTION 2.03. Making the Triple-A Loans.
-------------------------
(a) Notice of Borrowing. Whenever the Borrower
-------------------
wishes to make a Borrowing hereunder of Triple-A Loans, it
shall deliver to Triple-A a notice ("Notice of Borrowing")
-------------------
in substantially the form of Exhibit B hereto no later than
---------
11:00 A.M. (New York City time) on the Business Day
immediately prior to the proposed Borrowing Date; provided
--------
that, if the Borrower requests that the Borrowing be funded
with the proceeds of Eurodollar Rate Advances, such notice
shall be given not later than 11:00 A.M. (New York City
time) at least three (3) Business Days prior to the proposed
Borrowing Date. Each Notice of Borrowing shall be by
telephone or facsimile transmission (in the case of any such
notice by telephone, confirmed immediately in writing) and
shall specify therein the proposed (1) Borrowing Date of
such Borrowing, which shall be a Contract Grant Date,
(2) aggregate amount of such Borrowing requested (which
amount shall be greater than or equal to $25,000,000 for the
Triple-A Loan made on the Effective Restatement Date and the
next succeeding Triple-A Loan, and greater than or equal to
$20,000,000 in the case of the third Triple-A Loan to be
made hereunder) and (3) proposed Interest Period relating
thereto and the proposed principal amount of each Triple-A
Loan to be allocated to each Interest Period. Each Notice
of Borrowing shall be irrevocable and binding on the
Borrower.
(b) Selection of Interest Periods. Promptly upon
-----------------------------
receiving each Notice of Borrowing, the Administrative Agent
shall, following its review of the Borrower's proposal,
select (in the exercise of its sole discretion) the Interest
Periods for the Triple-A Loan thereby requested. At least
one Business Day prior to the last day of each Interest
Period for any Triple-A Loan, the Borrower shall request new
Interest Periods for all Triple-A Loans, or any portions
thereof, the Interest Periods of which are then ending and
which are not to be prepaid as provided
in Section 2.07 below; provided that, in the case of any Interest Period for
------------
a Triple-A Loan for which interest is requested to be
determined by reference to the Eurodollar Rate, such request
shall be given not later than 11:00 A.M. (New York City
time) at least three (3) Business Days prior to the last day
of the relevant Interest Period; and provided further that
----------------
(x) the portion of any Triple-A Loan assigned to an Interest
Period for which interest is requested to be determined by
reference to the Eurodollar Rate shall not be less than
$1,000,000, and (y) any other portion of a Triple-A Loan
assigned to an Interest Period shall not be less than
$200,000. The Administrative Agent shall, on the date of
any Borrowing hereunder and, so long as such Triple-A Loan
is outstanding, on the first day of each successive Interest
Period for such Triple-A Loan, notify the Collateral Agent
and the Borrower of the duration of the relevant Interest
Period and the interest rate which will be applicable to the
Triple-A Loans during such Interest Period as described in
Section 2.06 below. Any Interest Period that commences
------------
before the Termination Date and would otherwise end on a
date occurring after the Termination Date shall end on the
Termination Date and the duration of any Interest Period
that commences on or after the Termination Date shall be of
such duration as shall be selected by the Administrative
Agent. In addition, if a CP Disruption shall have occurred
and be continuing, Triple-A, or the Administrative Agent on
its behalf, may, upon notice to the Borrower, terminate any
Interest Period then in effect if Triple-A has funded the
Triple-A Loan allocated to such Interest Period by issuing
Transaction Commercial Paper Notes. All outstanding Triple-
A Loans (and all outstanding portions thereof) shall be
assigned an Interest Period at all times, which Interest
Periods will be limited as set forth in the definition
thereof.
(c) Funding. Triple-A shall on the proposed
-------
Borrowing Date of each Borrowing, subject to satisfaction of
the applicable conditions set forth in Article III and the
-----------
limitations set forth in Section 2.01, make available to the
------------
Borrower a wire transfer of such funds to the Borrower in
accordance with the Borrower's written wire transfer
instructions.
SECTION 2.04. Reduction of Facility Limit. The
---------------------------
Borrower shall have the right, at any time upon at least
three (3) Business Days' notice to Triple-A, to terminate in
whole or reduce in part the unused portion of the Facility
Limit in a minimum amount of $1,000,000 and increments of
$1,000,000 in excess thereof; provided, that in no event
--------
shall the Facility Limit be reduced to less than the
aggregate principal amount of the Triple-A Loans then
outstanding. Any such termination shall be without premium
or penalty of any kind, except for any indemnification which
may be owed in connection with such termination pursuant to
Section 2.08.
------------
SECTION 2.05. Repayments; Manner of Payment and
---------------------------------
Prepayment. Each of the Triple-A Loans shall be payable in full
-----------
on the Maturity Date. Each payment hereunder or
prepayment of principal of and interest on the Triple-A Note
and each payment of fees, premiums, indemnities and all
other amounts payable by the Borrower hereunder shall be
made by the Borrower in immediately available funds to the
Person to which such payment is owed not later than 11:30
A.M. (New York City time) on the date on which payable.
Payments received by a required recipient hereunder after
such time shall be deemed to have been received on the next
Business Day. All payments by the Borrower under this
Credit Agreement and the Triple-A Note shall be made without
setoff, deduction or counterclaim and the Borrower agrees to
pay on demand any present or future stamp or documentary
taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder
or under the Triple-A Note or from the execution, delivery
or registration of, or otherwise with respect to, this
Credit Agreement or the Triple-A Note. Whenever any payment
to be made hereunder or under the Triple-A Note shall be
stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next applicable
Business Day and interest shall be payable at the applicable
rate during such extension; provided, that if such extension
would cause payment of interest on or principal of any
Eurodollar Loan to be made in the next following month, such
payment shall be made on the next preceding Business Day.
SECTION 2.06. Interest on Triple-A Loans; Default
-----------------------------------
Interest.
--------
(a) The Borrower shall pay to Triple-A, as
interest on the Triple-A Loans outstanding, the following
amounts on the following dates:
(i) on any Interest Payment Date for Triple-A
Loans being funded or maintained through the
issuance of Transaction Commercial Paper Notes,
interest on such Triple-A Loans in an amount equal
to the imputed interest on such maturing
Transaction Commercial Paper Notes plus the CP
Dealer Fee on any such maturing Transaction
Commercial Paper Notes;
(ii) on any Interest Payment Date for Triple-
A Loans funded or maintained through the making of
Base Rate Advances under the Liquidity Agreement,
accrued and unpaid interest on such Triple-A Loans
at a per annum rate equal to the Base Rate,
computed on the basis of the actual number of days
elapsed over a year of 360 days; and
(iii) on any Interest Payment Date for Triple-A
Loans funded or maintained through the making of
Eurodollar Rate Advances under the Liquidity Agreement,
accrued and unpaid interest on such Triple-A Loans at a
rate per annum equal at
all times during each applicable Interest Period for
each such Triple-A Loan to the Eurodollar Rate for such
Interest Period, plus
----
(1) 0.50% for the first 24 months that the
underlying Eurodollar Rate Advance remains
outstanding,
(2) 0.75% from the 25th month to the 49th
month that the underlying Eurodollar Rate Advance
remains outstanding,
(3) 1.0% from the 49th month and for as long
thereafter as the underlying Eurodollar Rate
Advance remains outstanding,
each computed on the basis of the actual number of days
elapsed over a year of 360 days.
(b) Following the occurrence and during the con-
tinuance of an Event of Default, and from and after the due
date of any Triple-A Loan until such Triple-A Loan is paid
in full, the Borrower shall pay interest to Triple-A,
payable on demand, on the outstanding principal amount of
each Triple-A Loan for each day until paid in full at a per
annum rate equal to two percent (2%) plus the otherwise
----
applicable rate for such Triple-A Loan for such day.
SECTION 2.07. Voluntary and Mandatory Prepayment
---------------------------------
of Triple-A Loans. (a) The Borrower shall have the right
-----------------
on any Business Day and from time to time to prepay any
Triple-A Loans, in whole or in part, upon at least three
Business Days' written notice to the Administrative Agent,
which notice shall specify the proposed prepayment date and
the amount of such prepayment, provided that (i) any partial
--------
prepayment shall be equal to an integral multiple of
$1,000,000; (ii) the Borrower shall, in connection with any
such prepayment, indemnify Triple-A and hold Triple-A
harmless from any funding loss pursuant to the terms of
Section 2.08, and (iii) any such voluntary prepayment, to
------------
the extent made with funds on deposit in the Collection
Account, shall be made subject to the provisions of Section
-------
7.06. If any such notice is given, the amount specified in
----
such notice shall be presumed correct absent manifest error
and shall be due and payable on the date specified therein.
Each notice of prepayment shall be irrevocable and binding
on the Borrower.
(b) On each Settlement Date prior to the
Liquidation Trigger Date, the Borrower shall be obligated to
make principal repayments of the Triple-A Loans in an amount
equal to the greatest of:
(i) an amount equal to the product of (a) the
Triple-A Loan Percentage on such date and (b) the
aggregate amount of all principal payments received on
the Pledged Contracts
during the next preceding Settlement Period whether
scheduled or unscheduled, and
whether by virtue of Obligor payments, liquidation
proceeds, Insurance Proceeds or other sources
(excluding, however, all amounts received by the
--------- -------
Borrower under the Receivables Purchase Agreement in
respect of payments of amounts of Repurchase Price);
(ii) the Borrowing Base Shortfall then in effect;
and
(iii) the O/C Shortfall then in effect.
To the extent any such repayments are made with
funds on deposit in the Collection Account, such repayments
shall be subject to the provisions of Section 7.06(b).
--------------
(c) On each Business Day from and after the
Liquidation Trigger Date, the Borrower shall be obligated to
make principal repayments of the Triple-A Loans in an amount
equal to the lesser of (i) the aggregate amount of funds
remaining on deposit in the Collection Account on such day
(other than any funds retained in the Collection Account in
respect of Carrying Costs then accrued and unpaid to the
extent required under Section 7.06(d)) after giving effect
---------------
to the required applications of such funds pursuant to
clauses (i) through (viii) of Section 7.06(d), and (ii) the
--------------
then outstanding principal balance of the Triple-A Loans.
(d) In the event of any prepayment or repayment of
a Triple-A Loan or any portion thereof on any date other
than the last day of the Interest Period applicable thereto,
the Borrower shall indemnify Triple-A and hold Triple-A
harmless from any funding loss (in an amount equal to the
amount of interest Triple-A would have received but for such
prepayment through the last day of the relevant Interest
Period less the interest earned on investing such funds) and
expense which Triple-A may sustain or incur as consequence
of such prepayment in accordance with Section 2.08.
------------
SECTION 2.08. Compensation. The Borrower shall
------------
compensate Triple-A, upon its written request, for all
losses, expenses and liabilities, including, without
limitation, any indemnification payments owed by Triple-A
pursuant to the Liquidity Agreement, on account of any
liquidation or reemployment of deposits or other funds
acquired by such party to make, fund or maintain a Triple-A
Loan hereunder, (i) if for any reason the funding of any
Triple-A Loan does not occur on a date specified therefor in
the Notice of Borrowing; (ii) if for any reason any payment,
prepayment or conversion of principal of any Triple-A Loan
occurs on a date which is not the last day of the Interest
Period for such Triple-A Loan or (iii) as a consequence of
any required prepayment of any Triple-A Loan or required
conversion of any Eurodollar Rate Advance prior to the last
day of the Interest Period for the relevant Triple-A Loan. Any
request for compensation under this Section 2.08 shall
be accompanied by a copy of a statement from Triple-A or the
Administrative Agent on its behalf setting forth in
reasonable detail the basis for requesting compensation and
the determination of the amount thereof in such statement
shall be conclusive and binding for all purposes, absent
manifest error.
SECTION 2.09. Increased Costs, Capital Adequacy.
---------------------------------
(a) If, after the date hereof due to either
(i) the introduction of or any change in or to the
interpretation of any law or regulation by the governmental
authority that promulgated or administers compliance with
such law or regulation (other than laws or regulations with
respect to income taxes or any change by way of imposition
or increase of reserve requirements included in the
Eurodollar Reserve Percentage) or (ii) the compliance with
any guideline or request from any central bank or other
fiscal, monetary or governmental authority, rating agency or
similar agency (whether or not having the force of law), and
taking into account the obligations of the Liquidity Banks
under the Liquidity Agreement, the obligations of CapMAC
under the Surety Bonds and/or the Insurance Agreement, and
the obligations of the L/C Bank under this Credit Agreement,
the Letter of Credit and otherwise in connection with
Triple-A's asset-supported financing business, any reserve
or deposit or similar requirement shall be imposed, modified
or deemed applicable or, any basis of taxation shall be
changed or any other condition shall be imposed, and there
shall be any increase in the cost to Triple-A (either
directly or indirectly through any increase in the costs to
the Liquidity Banks, CapMAC, or the L/C Bank) of making,
funding, or maintaining Triple-A Loans or in the cost to
Triple-A of agreeing to make, fund, or maintain Triple-A
Loans (including the reduction of any sum received or amount
of principal or interest receivable under the Pledged
Contracts), or in the cost to CapMAC or the L/C Bank of
issuing, amending, renewing or extending, or making, funding
or maintaining any payments under, the Surety Bonds, the
Insurance Agreement or the Letter of Credit, or in agreeing
to issue, amend, renew, or extend, or make, fund or maintain
payments under, the Surety Bonds, the Insurance Agreement or
the Letter of Credit, then the Borrower shall from time to
time, upon demand by Triple-A, CapMAC or the L/C Bank (as
the case may be), by the submission of the certificate
described below, pay to Triple-A, CapMAC or the L/C Bank (as
the case may be), additional amounts sufficient to
compensate Triple-A, CapMAC or the L/C Bank (as the case may
be), for such increased cost; provided, however, that in the
-------- -------
case of any such increased cost incurred solely as a result
of compliance with any guideline or request of any rating
agency, the Borrower's obligation to pay any additional
amounts identified on the certificate described below by way
of compensation shall neither accrue, nor become due and
payable, prior to the 90th day following the Borrower's
receipt of such certificate (it being understood that the
Borrower shall have no obligation to pay any such additional
amount incurred solely as a result of a guideline or request
of a rating agency if all outstanding Triple-A Loans and any
other amounts outstanding hereunder are repaid in full and
in cash, and the Borrower shall have terminated the
obligations of the other parties hereto, prior to such 90th
day following the Borrower's receipt of such certificate).
A certificate setting forth in reasonable detail the amount
of such increased cost submitted to the Borrower by Triple-
A, CapMAC or the L/C Bank (as the case may be), or the
Administrative Agent on behalf of Triple-A shall be
conclusive and binding for all purposes, absent manifest
error.
(b) If any of Triple-A, CapMAC, the L/C Bank or
any Liquidity Bank determines that compliance with any law
or regulation or any guideline or request or any written
interpretation from any central bank or other fiscal,
monetary or governmental authority, rating agency or similar
agency (whether or not having the force of law) which is
introduced, implemented or received by Triple-A, CapMAC, the
L/C Bank or such Liquidity Bank after the Closing Date,
affects or would affect capital adequacy or the amount of
capital required or expected to be maintained by Triple-A,
CapMAC, the L/C Bank or such Liquidity Bank or any
corporation controlling Triple-A, CapMAC, the L/C Bank or
such Liquidity Bank and that the amount of such capital is
increased by or based upon the Triple-A Loans or the
existence of this Credit Agreement, the Surety Bonds, the
Letter of Credit or the Insurance Agreement, or upon the
"Advances" of a Liquidity Bank, or such Liquidity Bank's
commitment to lend under the Liquidity Agreement, or the L/C
Bank's commitment to issue, amend, renew or extend the
Letter of Credit, and other commitments of that type, or has
or would have the effect of reducing such Person's rate of
return on capital, then, upon demand by Triple-A, the
Administrative Agent on its behalf, CapMAC or the L/C Bank
(as the case may be), by the submission of the certificate
described below, the Borrower shall pay to Triple-A, CapMAC
or the L/C Bank (as the case may be), from time to time as
specified by Triple-A, CapMAC or the L/C Bank (as the case
may be), additional amounts sufficient to compensate Triple-
A, the relevant Liquidity Bank, CapMAC or the L/C Bank (as
the case may be), in the light of such circumstances, to the
extent that Triple-A, CapMAC or the L/C Bank (as the case
may be) reasonably determines such increase in capital to be
allocable to the Triple-A Loans or the existence of this
Credit Agreement, the Surety Bonds, the Letter of Credit or
the Insurance Agreement, or upon the "Advances" of a
Liquidity Bank or such Liquidity Bank's commitment to lend
under the Liquidity Agreement, or the L/C Bank's commitment
to issue, amend, renew or extend the Letter of Credit, and
other commitments of that type, or to the extent that
Triple-A owes compensation to CapMAC or to a Liquidity Bank
in respect of or on account of such events; provided,
--------
however, that in the case of any such increase in capital
-------
required solely as a result of compliance with any
guideline, request or written interpretation of any rating
agency, the Borrower's obligation to pay any additional
amounts identified on the certificate
described below by way
of compensation shall neither accrue, nor become due and
payable, prior to the 90th day following the Borrower's
receipt of such certificate (it being understood that the
Borrower shall have no obligation to pay any such additional
amount incurred solely as a result of a guideline or request
of a rating agency if all outstanding Triple-A Loans and any
other amounts outstanding hereunder are repaid in full and
in cash, and the Borrower shall have terminated the
obligations of the other parties hereto, prior to such 90th
day following the Borrower's receipt of such certificate).
A certificate setting forth in reasonable detail such
amounts submitted to the Borrower by Triple-A or the
Administrative Agent on its behalf, CapMAC or the L/C Bank
(as the case may be), shall be conclusive and binding for
all purposes, absent manifest error.
SECTION 2.10. Taxes. (a) All payments made by
-----
the Borrower, FCI or the Servicer (if the Servicer is FAC or
an Affiliate of FAC) under this Credit Agreement, the
Insurance Agreement and the Triple-A Note shall be made free
and clear of, and without deduction or withholding for or on
account of, any present or future taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed
by any governmental authority having taxing authority,
excluding net income taxes and franchise taxes (imposed in
lieu of income taxes) imposed on Triple-A, CapMAC, or the
L/C Bank as a result of any present or former connection
between the jurisdiction of the government or taxing
authority imposing such tax or any political subdivision or
taxing authority thereof or therein and Triple-A, CapMAC, or
the L/C Bank (excluding a connection arising solely from
Triple-A, CapMAC, or the L/C Bank having executed, delivered
or performed its obligations or received a payment under, or
enforced, this Credit Agreement, the Triple-A Note or any
other Facility Document to which Triple-A, CapMAC, or the
L/C Bank is a party) (all such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions and withholdings
being hereinafter called "Taxes"). If any Taxes are
-----
required to be withheld from any amounts payable to or under
the Triple-A Note, the Credit Agreement or the Insurance
Agreement, (i) the sum payable shall be increased as may be
necessary so that, after making all required deductions
(including deductions applicable to additional sums payable
under this Section 2.10), Triple-A, CapMAC or the L/C Bank
------------
receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower, FCI or
the Servicer (if the Servicer is FAC or an Affiliate of
FAC), as the case may be, shall make such deductions, and
(iii) the Borrower, FCI or the Servicer (if the Servicer is
FAC or an Affiliate of FAC), as the case may be, shall pay
the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise
or property taxes, charges, or similar levies that
arise from any payment made hereunder or from the execution,
delivery, issuance or registration of, or otherwise with
respect to, this Credit Agreement, the Insurance Agreement,
the Triple-A Note or the Letter of Credit (hereinafter
"Other Taxes").
-----------
(c) The Borrower will indemnify Triple-A, CapMAC,
and the L/C Bank for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this
Section 2.10) paid by Triple-A, CapMAC or the L/C Bank and
------------
any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. Whenever any
Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to each of Triple-A,
CapMAC and the L/C Bank a certified copy of an original
official receipt received by the Borrower showing payment
thereof. If the Borrower or the Servicer fails to pay any
Taxes when due to the appropriate taxing authority or fails
to remit to Triple-A, CapMAC or the L/C Bank the required
receipts or other required documentary evidence, the
Borrower shall indemnify each of Triple-A, CapMAC, and the
L/C Bank for any incremental Taxes, interest or penalties
that Triple-A, CapMAC, and/or the L/C Bank is legally
required to pay as a result of any such failure. The
agreements in this subsection shall survive the termination
of this Credit Agreement, the Insurance Agreement and the
payment of the Triple-A Note.
(d) Within 30 days after the date of any payment
of Taxes or Other Taxes, the Borrower will furnish to the
Collateral Agent, at its address referred to in Section
-------
14.02, the original or a certified copy of a receipt
-----
evidencing payment thereof.
(e) If, in connection with an agreement or other
document providing liquidity support, credit enhancement or
other similar support in connection with this Credit
Agreement or the funding or maintenance of any Triple-A
Loans hereunder, Triple-A is required to compensate a
Liquidity Bank or CapMAC in respect of taxes under
circumstances similar to those described in this Section
-------
2.10, then within ten days after demand by Triple-A, the
----
Borrower shall pay to Triple-A such additional amount or
amounts as may be necessary to pay such Liquidity Bank or
CapMAC the amounts due or to otherwise reimburse Triple-A
for any amounts paid by it.
(f) Without prejudice to the survival of any
other agreement of the Borrower or the Servicer hereunder,
the agreements and obligations of the Borrower and the
Servicer (if the Servicer is FAC or an Affiliate of FAC)
contained in this Section 2.10 shall survive the termination
------------
of this Agreement.
SECTION 2.11. Fees. In further consideration of
----
the Triple-A Loans to be made to the Borrower hereunder and
the Letter of Credit to be issued hereunder for the account of the
Borrower, the Borrower agrees to pay (x) to CapMAC
and Triple-A, all fees specified in the Fee Letter, which
fees will be due and payable at the times and in the manner
set forth in the Fee Letter, and (y) to the L/C Bank, all
fees specified in the L/C Fee Letter, which fees will be due
and payable at the times in the manner set forth in Article
-------
VIII and in the L/C Fee Letter.
----
ARTICLE III
CONDITIONS OF LENDING; ISSUANCE, AMENDMENT, EXTENSION
------------------------------------------------------
AND RENEWAL OF LETTER OF CREDIT
-------------------------------
SECTION 3.01. Conditions Precedent to the
--------------------------
Amendment and Restatement and to the Corresponding
--------------------------------------------------
Borrowing. The effectiveness of the amendment and
---------
restatement of the Original Credit Agreement pursuant to the
terms hereof, the making of any Triple-A Loan on any
Contract Grant Date, and the obligation of the L/C Bank to
issue the Letter of Credit is subject to satisfaction of
each of the following conditions precedent:
(a) Each of the Administrative Agent, the
Collateral Agent, Triple-A and the L/C Bank shall have
received all of the documents, covenants, authorizations,
agreements and instruments described on the List of Closing
Documents attached as Exhibit C hereto (including, without
---------
limitation, the Contract Schedule, giving effect to the
Grant of Contracts contemplated to correspond with the
Effective Restatement Date, the 1996 Interest Rate Hedge,
and the 1996 Interest Rate Hedge Assignment), each in form
and substance satisfactory to the Administrative Agent and
the L/C Bank, and in each case where applicable (x) duly
executed by each of the parties thereto, (y) to the extent
required in Exhibit C, duly filed with the appropriate
---------
filing officer or other governmental authority of the listed
jurisdiction, as evidenced by an appropriate acknowledgment
evidencing that such filing is of record, and (z) dated
and/or certified (as applicable) as of a date reasonably
acceptable to the Administrative Agent and the L/C Bank;
(b) All fees and expenses due and owing under the
Facility Documents (including, without limitation, all fees
and expenses payable under the Fee Letter and the L/C Fee
Letter entered into in connection with this Credit
Agreement) shall have been paid;
(c) Each of the Collateral Agent, the
Administrative Agent, Triple-A, the L/C Bank and the Surety
shall have received such other approvals, documents or
opinions as it may reasonably request;
(d) In connection with the Triple-A Loan and the
Grant of Contracts contemplated to correspond with the
Effective Restatement Date, and the issuance (if any) of the
Letter of Credit on the Effective Restatement Date, each of
the conditions precedent set forth in Section 3.02 have been
------------
satisfied;
(e) The Certificate of Incorporation of the
Borrower shall have been amended pursuant to an amendment in
form and substance acceptable to the Collateral Agent and
the L/C Bank;
(f) Each of S&P and ▇▇▇▇▇'▇ shall have confirmed
to the Administrative Agent that the Triple-A Loans
constitute an "investment grade" risk, without giving effect
to the Surety Bonds;
(g) CapMAC's Underwriting Committee shall have
approved the transactions contemplated by the Facility
Documents; and
(h) FNBB's Credit Committee shall have approved
the transactions contemplated by the Facility Documents.
SECTION 3.02. Conditions Precedent to Each
----------------------------
Borrowing. The making of a Triple-A Loan on any Contract
---------
Grant Date (including, without limitation, the Triple-A Loan
contemplated to correspond with the Effective Restatement
Date hereunder) shall be subject to satisfaction of each of
the following conditions precedent:
(a) Each of the Administrative Agent, the
Collateral Agent, Triple-A and the L/C Bank shall have
received, on or before the relevant Borrowing Date (and
corresponding Contract Grant Date), all of the documents,
consents, authorizations, agreements, instruments and legal
opinions described on the Pro Forma Contract Grant Date
Closing List attached as Exhibit D hereto each in form and
---------
substance satisfactory to the Administrative Agent and the
L/C Bank, and in each case when applicable (x) duly executed
by each of the parties thereto, (y) to the extent required
in Exhibit D or otherwise required by the Collateral Agent,
---------
duly filed with the appropriate filing offices or other
governmental authority of the listed jurisdictions, as
evidenced by an appropriate acknowledgment evidencing that
such filing is of record, and (z) dated and/or certified (as
applicable as of a date reasonably acceptable to the
Administrative Agent and the L/C Bank);
(b) (i) Each of the Administrative Agent, the
Collateral Agent, Triple-A and the L/C Bank shall have
received (A) a Settlement Report dated as of the applicable
Cut-Off Date, (B) a notice from the Custodian in
substantially the form of Exhibit C to the Receivables
Purchase Agreement, confirming that the Custodian has
received the Contract Files required to be delivered to it
pursuant to Section 4.04(a) in respect of each of the
--------------
Contracts contemplated to be Granted on such Contract Grant
Date, (C) a timely Notice of Borrowing, appropriately
filled-out by the Borrower, (D) a Borrowing Base
Certificate, appropriately filled-out by the Servicer as of
such Contract Grant Date (after giving effect to the
Borrowing comprised of such Triple-A Loans, the application
of the proceeds therefrom, the Grant of Contracts
contemplated to take place on such date, and the issuance
of, or any amendment to, the Letter of Credit, which
issuance or amendment has occurred and become effective on
or prior to such Contract Grant Date) and (E) such other
approvals or documents as the Administrative Agent may
reasonably request in connection with the contemplated
Borrowing and Grant, and (ii) on the Borrowing Date of such
Borrowing, before and after giving effect to such Borrowing,
to the contemplated Grant of Contracts and to the
application of the proceeds from such Borrowing, the
following statements shall be true (and each of the giving
of the applicable Notice of Borrowing and the acceptance by
the Borrower of the proceeds of such Borrowing shall
constitute a representation and warranty by the Borrower
that on the Borrowing Date of such Borrowing, before and
after giving effect thereto and to the application of the
proceeds therefrom, such statements are true):
(1) the representations and warranties contained
in Article IV and all representations and warranties of
----------
the Seller in the Receivables Purchase Agreement are
true and accurate as of such Borrowing Date in all
material respects with the same force and effect as
though such representations and warranties had been
made as of such date;
(2) no event has occurred and is continuing,
or would result from such Borrowing, which
constitutes an Event of Default, Unmatured Event
of Default, Servicer Default or Unmatured Servicer
Default, and there is no Termination Date
currently in effect;
(3) there exists no Borrowing Base Shortfall
or O/C Shortfall;
(4) [Reserved]; and
(5) (A) the proceeds of such Triple-A Loan shall
be used (I) to fund a Purchase under the Receivables
Purchase Agreement to occur simultaneously with such
Borrowing, or (II) to otherwise fund costs and expenses
to be paid under the terms of the Facility Documents in
connection with the transactions contemplated to take
place on such Contract Grant Date, and (B) all
conditions to such Purchase under the Receivables
Purchase Agreement on such date have been satisfied;
(c) The Borrower shall have filed or recorded or
caused to be filed or recorded, each financing statement or
other item required to be so filed or recorded on or prior
to such Contract Grant Date pursuant to Section 7.03(a) or
--------------
Section 7.03(b) (as the case may be) to be so filed or
--------------
recorded;
(d) Any existing Liens on or otherwise
encumbering the Contracts contemplated to be Granted on such
Contract Grant Date shall have been released;
(e) The Collateral Agent shall have received
confirmation from the Spread Account Bank, in form and
substance satisfactory to the Collateral Agent, that the
initial balance of the Spread Account required to be funded
on the relevant Borrowing Date, pursuant to Section 7.07(b)
--------------
(prior to giving effect to the transactions which are
contemplated to take place on the relevant Borrowing Date)
has been funded;
(f) The Collateral Agent shall have received
confirmation from the Collection Account Bank, in form and
substance satisfactory to the Collateral Agent, that all
changes reasonably necessary to ensure the deposit in the
Collection Account of all funds received by the Collection
Account Bank, from the Lock Box Banks or directly from
Obligors with respect to the Pledged Contracts from and
after the Cut-Off Date to the Contract Grant Date have been
made;
(g) The Collateral Agent shall have received an
Officer's Certificate of (i) each of FAC and FCI stating
that (x) each Pledged Contract to be sold or Granted by it
on such Contract Grant Date has been properly identified as
an asset of the Borrower in its Records, and (y) that all
conditions precedent to the Purchase of Contracts and
related assets under the Receivables Purchase Agreement have
been satisfied on and as of such Contract Grant Date, and
(ii) of the Servicer stating that each related Contract File
is complete in all material respects and (iii) of the
Borrower, stating that all conditions precedent to the
making of such Triple-A Loan have been satisfied on and as
of such Contract Grant Date;
(h) Not later than 12:00 noon, New York City
time, on the day which is two Business Days prior to such
Contract Grant Date, the Borrower or the Servicer shall have
(i) transmitted to the Collateral Agent data with respect to
the Contracts to be Granted to the Collateral Agent to
enable it to perform its duties hereunder and (ii) delivered
or caused to be delivered (A) an amendment to the Contract
Schedule that reflects the Contracts contemplated to be
Granted to the Collateral Agent and (B) the Contract Files
and the original execution copies of such Contracts to the
Custodian;
(i) [Reserved]
(j) After giving effect to any releases and/or
other changes to the financing arrangements of FCI and its
Subsidiaries to be effected in connection with the
contemplated Borrowing and related Grant, FCI and its
Subsidiaries shall have remaining committed financing
facilities (other than the financing facilities described in
the Facility Documents) substantially equivalent in form and
substance to the FNBB/FAC Agreement and the FNBB/FCI
Agreement, having (1) an aggregate liquidity commitment to
either or both of FCI and FAC of no less than $35,000,000,
of which at least $5,000,000 is unused and (2) a scheduled
expiration date occurring after the Scheduled Termination
Date then in effect;
(k) Aggregate Liquidity Commitments for all
Liquidity Banks under the Liquidity Agreement, which
pursuant to the terms of the Liquidity Agreement, are
required to remain outstanding for all periods prior to and
including the Scheduled Termination Date, exceed the
contemplated outstanding principal balance of all Triple-A
Loans (after giving effect to the contemplated Borrowing);
(l) [Reserved];
(m) The Borrower shall have
(i) delivered to the Collateral Agent an Interest
Rate Hedge Assignment, pursuant to which the Borrower
assigns an Interest Rate Hedge entered into between the
Borrower and an Eligible Hedge Provider, which Interest
Rate Hedge:
(A) provides for the benefit of the Borrower
an interest rate cap for a notional amount equal
to the principal amount of the requested Triple-A
Loan, which amount shall amortize on a monthly
basis for a term equal to 84 months, assuming a
schedule of payments and prepayments mutually
determined by the Borrower and the Collateral
Agent on or before such Contract Grant Date (which
schedule shall be based upon the historical
amortization experience of Contracts owned or
serviced by FCI and/or its Affiliates, as well as
the relationship of the amortization schedules of
any existing Interest Rate ▇▇▇▇▇▇ with the actual
amortization experience of the Contracts Granted
to the Collateral Agent hereunder at or about the
time at which such existing Interest Rate ▇▇▇▇▇▇
were entered into),
(B) becomes effective immediately upon the
relevant Contract Grant Date,
(C) provides for payments by the Eligible
Hedge Provider to the Collection Account on the
Business Day next preceding each Settlement Date
based on the then effective notional amount, in
the event that the unweighted average for each day
in the Calculation Period preceding such
Settlement Date of the rate set forth in the
Federal Reserve statistical release H.15(519)
under the caption "Commercial Paper" raised to a
money market yield basis settled monthly exceeds a
per annum rate of interest chosen by the Borrower
with the consent of the Collateral Agent (the "Cap
Rate"), which Cap Rate, when applied to the then
effective notional amount of such Interest Rate
Hedge shall cause the weighted average of the
Contract Rates for all of the Pledged Contracts
(based on aggregate Principal Balances
outstanding) to exceed the weighted average of the
Cap Rates for all Interest Rate ▇▇▇▇▇▇ then in
effect (based on aggregate notional amounts
outstanding) by a per annum rate of no less than
5%; and
(ii) paid the premium, in full and in cash,
required to render such Interest Rate Hedge effective
for the duration of its scheduled term, provided,
--------
however, that such premium shall not be paid for with
-------
the proceeds of a transfer from the Collection Account;
(n) The Grant contemplated to take place on such
Contract Grant Date shall have become effective;
(o) All fees and expenses due and owing as of
such Contract Grant Date under the Facility Documents,
(including, without limitation, the Fee Letter and the L/C
Fee Letter) shall have been paid in full and in cash;
(p) The Borrower shall have delivered, or shall
have caused FCI to deliver, to the Collateral Agent one or
more loss payable endorsements or similar acknowledgments,
satisfactory in form and substance to the Collateral Agent,
in each case duly executed and delivered by the relevant
insurers providing, in the aggregate, all of the master
group credit life policies (or similar master policies)
relating to each Pledged Contract in respect of which Credit
Life Insurance is maintained by or on behalf of the relevant
Obligor, which loss payable endorsement or similar
acknowledgment shall contain an acknowledgment by each
insurer of the respective interests of the Collateral Agent
for the benefit of itself, the Administrative Agent, Triple-
A and the Surety, and the Collateral Agent for the benefit
of the L/C Bank, in the relevant policy of Credit Life
Insurance, as such interests may appear from time to time;
(q) The Collateral Agent shall have received
Certified copies of Requests for Information or Copies (Form
UCC-11) (or a similar search report certified by a party
acceptable to the Collateral Agent), dated a date reasonably
near to such Contract Grant Date, listing all effective
financing statements which name the Seller, the Originator,
or any Affiliate of the Originator identified by either of
the Collateral Agent or the L/C Bank purporting to assign an
interest in Contracts to the Originator (in each case, under
its respective present name and any previous name) as
debtor, and which are filed in such jurisdictions as the
Collateral Agent and/or the L/C Bank shall reasonably
require such searches to have been made, together with
copies of such financing statements where reasonably
required by the Collateral Agent and/or the L/C Bank (none
of which shall cover any Contracts or other Collateral other
than those financing statements to be released in connection
with such Contract Grant Date pursuant to subsection (d)
-------------
above);
------
(r) On or prior to such Contract Grant Date:
(i) either (A) the Collateral Agent, at the sole
expense of the Borrower, shall have conducted an audit
with respect to all Contracts contemplated to be
Granted to the Collateral Agent on such date, the
results of which shall be set forth in an audit report,
or (B) the Borrower shall have delivered, or caused to
be delivered, at its expense, an audit report with
respect to all Contracts contemplated to be Granted to
the Collateral Agent on such date, prepared by a "Big
Six" firm of independent public accountants acceptable
to the Collateral Agent (provided, however, that in the
-------- -------
case of the first two Contract Grant Dates next
succeeding the Effective Restatement Date, the maximum
amount of fees and expenses that the Borrower shall be
required to pay in connection with the conduct of any
such individual audit and the delivery of a related
audit report shall not exceed $10,000; and in each case
such audit report shall be in form, substance, scope
and detail acceptable to the Collateral Agent and the
L/C Bank in the exercise of their respective sole
discretion; and
(ii) all such Contracts contemplated to be
Granted to the Collateral Agent on such date shall have
been included in the computer tape or other computer
record format containing the Servicer's master file for
the Pledged Contracts, updated as of the close of
business as of the Business Day next preceding such
Contract Grant Date; and
SECTION 3.03. Letter of Credit. The obligation
----------------
of the L/C Bank to issue, amend, extend or renew the Letter
of Credit on any date, and the deemed consent of each of the
Collateral Agent, Triple-A, the Surety and the
Administrative Agent under Section 8.01(c) to any requested
--------------
decrease in the L/C Face Amount or Cancellation of the
Letter of Credit on any date, shall be subject to the
satisfaction of each of the following conditions precedent:
(a) Each of the conditions precedent set forth in
Sections 3.01 and 3.02 (other than the condition precedent
------------ ----
referenced in Section 3.02(b)(2)(i), which shall be governed
--------------------
by the clause (c) below) to the making of a Triple-A Loan on
any Contract Grant Date prior to the date upon which the
Letter of Credit is to be issued, amended, extended or
renewed shall have been satisfied and shall continue to be
satisfied on the date of the issuance, amendment, extension
or renewal of the Letter of Credit (as such satisfaction
shall be confirmed by the Borrower's delivery of an
officer's certificate to such effect to the L/C Bank on the
requested date of such issuance, amendment, extension or
renewal);
(b) The L/C Bank shall have received a timely
request to issue or amend the Letter of Credit pursuant to
Section 8.01 appropriately filled out by the Borrower;
(c) On the date of any such proposed issuance,
amendment, extension or renewal of the Letter of Credit,
both before and after giving effect to such issuance,
amendment, extension or renewal, the representations and
warranties contained in Article IV and all representations
----------
and warranties of the Seller in the Receivables Purchase
Agreement are true and accurate as of such date in all
material respects with the same force and effect as though
such representations and warranties had been made as of such
date (provided, however, that with respect to any issuance,
-------- -------
amendment, extension or renewal made on a date other than a
Contract Grant Date, the conditions precedent of this clause
(c) need only be satisfied with respect to Sections 4.01 and
-------------
4.04;
----
(d) No event has occurred and is continuing, or
would result from the issuance, amendment, extension or
renewal of the Letter of Credit, which constitutes an Event
of Default, Unmatured Event of Default, Servicer Default or
Unmatured Servicer Default, and there is no Termination Date
currently in effect;
(e) [Reserved]
(f) All fees and expenses due and owing as of
such date under the Facility Documents (including, without
limitation, the Fee Letter and the L/C Fee Letter) shall
have been paid in full and in cash;
(g) No unpaid draws under the Letter of Credit
shall be outstanding;
(h) No change shall have occurred in any law or
regulation thereunder or interpretation thereof that in the
reasonable opinion of the L/C Bank would make it illegal for
the L/C Bank to issue, amend, extend or renew the Letter of
Credit; and
(i) The L/C Bank shall have received a
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
SECTION 4.01. Representations and Warranties of
---------------------------------
the Borrower. The Borrower represents and warrants to each
-----------
of Triple-A, the Collateral Agent, the Administrative Agent,
the L/C Bank and the Surety that:
(a) Due Incorporation and Good Standing. The
-----------------------------------
Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the state of
Delaware, and has full corporate power, authority and legal
right to own its properties and conduct its business as such
properties are presently owned and such business is
presently conducted, and to execute, deliver and perform its
obligations under each of the Facility Documents to which it
is a party. The Borrower is duly qualified to do business
and is in good standing as a foreign corporation, and has
obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such
licenses and approvals would render any Pledged Contract
unenforceable by the Borrower or would otherwise have a
Material Adverse Effect.
(b) Due Authorization and No Conflict. The
---------------------------------
execution, delivery and performance by the Borrower of each
of the Facility Documents to which it is a party, and the
consummation of each of the transactions contemplated hereby
and thereby, including the acquisition of the Pledged
Contracts under the Receivables Purchase Agreement, and the
making of the Borrowings and the Grants contemplated
hereunder, have in all cases been duly authorized by the
Borrower by all necessary corporate action, do not
contravene (i) the Borrower's charter or by-laws, (ii) any
law, rule or regulation applicable to the Borrower,
(iii) any contractual restriction contained in any inden-
ture, loan or credit agreement, lease, mortgage, deed of
trust, security agreement, bond, note, or other agreement or
instrument binding on or affecting the Borrower or its
property or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting the Borrower or
its property (except where such contravention would not have
a Material Adverse Effect), and do not result in or require
the creation of any Lien upon or with respect to any of its
properties; and no transaction contemplated hereby requires
compliance with any bulk sales act or similar law. Each of
the other Facility Documents to which the Borrower is a
party have been duly executed and delivered on behalf of the
Borrower.
(c) Governmental and Other Consents. All
-------------------------------
approvals, authorizations, consents, orders or other actions
of, and all registration, qualification, designation,
declaration, notice to or filing with, any Person or of any
governmental body or official required in connection with
the execution and delivery of any of the Facility Documents
to which the Borrower is a party, the consummation of the
transactions contemplated hereby or thereby, the performance
of and the compliance with the terms hereof or thereof, have
been obtained, except where the failure so to do would not
have a Material Adverse Effect, and each such required
approval, authorization, consent, order, registration,
qualification, designation, declaration, notice or filing is
listed on Exhibit E hereto (or in the case of any Borrowing
on a Contract Grant Date hereunder, as set forth in any
addendum to such Exhibit E hereto prepared by the Borrower
---------
and accepted by the Collateral Agent, in the exercise of its
sole discretion).
(d) Enforceability of Facility Documents. Each
------------------------------------
of the Facility Documents to which the Borrower is a party
have been duly and validly executed and delivered by the
Borrower and constitute the legal, valid and binding
obligation of the Borrower, enforceable in accordance with
their respective terms, except as enforceability may be
subject to or limited by Debtor Relief Laws or by general
principles of equity (whether considered in a suit at law or
in equity).
(e) No Litigation. Except as otherwise disclosed
-------------
on FCI's report on Form10-K for the year ended December 31,
1995 and Form 10-Q's for the quarters ended March 31, 1996
and June 30, 1996 (collectively the "Base Report"), which
Base Report shall have been delivered to each of the
Collateral Agent and the L/C Bank prior to the Effective
Restatement Date, or as otherwise identified in writing to,
and approved by, the Collateral Agent and the L/C Bank,
there are no proceedings or investigations pending or, to
the best knowledge of the Borrower, threatened against the
Borrower before any court, regulatory body, administrative
agency, or other tribunal or governmental instrumentality
(i) asserting the invalidity of this Credit Agreement or any
of the other Facility Documents, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this
Credit Agreement or any of the other Facility Documents,
(iii) seeking any determination or ruling that would
adversely affect the performance by the Borrower of its
obligations under this Credit Agreement or any of the other
Facility Documents, (iv) seeking any determination or ruling
that would adversely affect the validity or enforceability
of this Credit Agreement or any of the other Facility
Documents, or (v) seeking any determination or ruling that
would, if adversely determined, be reasonably likely to have
a Material Adverse Effect; provided, however, that in the
-------- -------
event the Collateral Agent and the L/C Bank shall receive a
report dated subsequent to the date of the Base Report,
which report shall disclose the existence of, and accurately
describe, one or more proceedings or investigations which
are not disclosed in the Base Report, and neither the L/C
Bank nor the Collateral Agent shall identify in writing to
the Borrower, within 90 days of the receipt of such report,
one or more of the proceedings or investigations described
in such report as constituting a proceeding or investigation
of a type described in one or more of clauses (i) through
(v) above, the existence of each such proceeding or
investigation not so identified to the Borrower shall be a
breach of the representation and warranty of this subsection
(e).
(f) Use of Proceeds. All proceeds of any Triple-
---------------
A Loan shall be used by the Borrower exclusively to fund a
Purchase from the Seller under the Receivables Purchase
Agreement, or to otherwise fund costs and expenses permitted
to be paid under the terms of the Facility Documents in
connection with the transactions contemplated to take place
hereunder on or about the Effective Restatement Date or on
any Contract Grant Date occurring thereafter.
(g) Perfection of Security Interests in
-----------------------------------
Collateral.
----------
(i) Payment of the Obligations and the prompt
observance and performance by the Borrower of all
of the terms and provisions of this Credit
Agreement in favor of Triple-A, the Collateral
Agent, the Administrative Agent and CapMAC are
secured by the Collateral as more fully set forth
in Article VII hereof. Upon the making of each
-----------
Triple-A Loan, the Collateral Agent has a legal,
valid, perfected and enforceable Lien upon and
first priority security interest in the
Collateral, as security for the repayment of the
Obligations, which Lien upon and security interest
in the Collateral is free and clear of all Liens
(other than the L/C Bank Lien and any Permitted
Encumbrances);
(ii) Payment of the L/C Bank Obligations and
the prompt observance and performance by the
Borrower of all of the terms and provisions of
this Credit Agreement in favor of the L/C Bank are
secured by the Collateral as more fully set forth
in Section 8.07 hereof. Upon the making of each
------------
Triple-A Loan, the Collateral Agent has a legal,
valid, perfected and enforceable Lien upon and
second priority security interest in the
Collateral (subject only to the Primary Lien), as
security for the repayment of the L/C Bank
Obligations, which Lien upon and security interest
in the Collateral is free and clear of all Liens
(other than the Primary Lien and any Permitted
Encumbrances);
(iii) Upon the making of each Triple-A Loan,
the Borrower has a legal, valid and perfected
ownership interest in, and good title to, the
Collateral (including, without limitation, all
Contracts contemplated to be Granted hereunder on
the Contract Grant Date corresponding to the
making of the relevant Triple-A Loan), which
interest in and title to the Collateral is free
and clear of all Liens (other than the Primary
Lien, the L/C Bank Lien and any Permitted
Encumbrances).
(h) Accuracy of Information. All certificates,
-----------------------
reports, financial statements and any other written
information furnished by or on behalf of the Borrower to
Triple-A, the L/C Bank, the Collateral Agent, or the
Administrative Agent at any time pursuant to any requirement
of, or in response to any request of any such party under
this Credit Agreement or any other Facility Document or any
transaction contemplated hereby or thereby, have been, and
all such certificates, reports, financial statements and any
other written information hereafter furnished by the
Borrower to such parties will be, true and accurate in every
respect material to the transactions contemplated hereby on
the date as of which any such certificate, report, financial
statement or similar writing was or will be delivered, and
shall not omit to state any material facts or any facts
necessary to make the statements contained therein not
materially misleading.
(i) Governmental Regulations. The Borrower is
------------------------
not (1) an "investment company" or a company controlled by
an "investment company" registered or required to be
registered under or the Investment Company Act of 1940, as
amended, (2) a "public utility company" or a "holding
company," a "subsidiary company" or an "affiliate" of any
public utility company within the meaning of Section
2(a)(5), 2(a)(7), 2(a)(8) or 2(a)(11) of the Public Utility
Holding Company Act of 1935, as amended, or (3) otherwise
subject to any other federal or state statute or regulation
limiting its ability to incur or pay indebtedness.
(j) Margin Regulations. The Borrower is not
------------------
engaged, principally or as one of its important activities,
in the business of extending credit for the purpose of
"purchasing" or "carrying" any "margin stock" (as each of
the quoted terms is defined or used in any of Regulations G,
T, U or X of the Board of Governors of the Federal Reserve
System, as in effect from time to time). No part of the
proceeds of any of the Triple-A Loans has been used, and no
portion of the Letter of Credit has been obtained, for so
purchasing or carrying margin stock or for any purpose which
violates, or which would be inconsistent with, the
provisions of any of Regulations G, T, U or X of the Board
of Governors of the Federal Reserve System, as in effect
from time to time.
(k) Location of Chief Executive Office and
--------------------------------------
Records. The principal place of business and chief execu-
-------
tive office of the Borrower, and the office where the
Borrower maintains all of its Records, is located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the Borrower
does not operate its business or maintain the Records at any
other location (provided that, at any time after the Closing
--------
Date, upon 30 days' prior written notice to the Collateral
Agent, the Borrower may relocate its principal place of
business and chief executive office, and/or the office where
the Borrower maintains all of its Records, to such other
locations within the United States where all action required
by Section 7.04 shall have been taken and completed).
------------
(l) Lock-Box Accounts. Except in the case of any
-----------------
Lock-Box Account pursuant to which only Collections subject
to a PAC are deposited, the Borrower has filed or has caused
FAC or FCI to file a standing delivery order with the United
States Postal Service authorizing each Lock-Box Bank to
receive mail delivered to the related Post Office Box. The
account numbers of all Lock-Box Accounts, together with the
names, addresses, ABA numbers and names of contact persons
of all the Lock-Box Banks maintaining such Lock-Box Accounts
and the related Post Office Boxes, are specified in Exhibit
-------
F. From and after the Closing Date, none of FCI, the Seller
-
or the Borrower have any right, title and/or interest in or
to any of the Lock-Box Accounts or the Post-Office Boxes and
maintain no lock-box accounts in their own names for the
collection of Payments in respect of Pledged Contracts. The
Borrower has no other lock-box accounts for the collection
of Payments in respect of Pledged Contracts except for the
Lock-Box Accounts.
(m) No Trade Names. The Borrower has no trade
--------------
names, fictitious names, assumed names or "doing business
as" names.
(n) Separate Identity. The Borrower is operated
-----------------
as an entity separate from each of FAC, FCI and their
respective other Affiliates and (i) has its own board of
directors, (ii) has at least two independent directors, one
of which is (A) reasonably acceptable to Triple-A, (B) not a
direct, indirect or beneficial stockholder, officer,
director, employee, affiliate, associate, customer or
supplier of any of FAC, FCI or any of their respective
Affiliates (other than, in the case of the Borrower,
directors thereof) or relatives of any thereof, nor trustees
in bankruptcy for any thereof and (C) an individual with at
least three years' prior experience in transactions
involving the securitization of financial assets, including
prior experience as an independent director for a
corporation (other than the Borrower) whose charter
documents require the unanimous consent of all independent
directors before such corporation could file a bankruptcy
proceeding or consent to the institution of bankruptcy
proceedings against it, (iii) maintains its assets in a
manner which facilitates their identification and
segregation from those of its Affiliates, and has a separate
telephone number from that of each of FAC, FCI and any of
their respective Affiliates, (iv) has all office furniture,
fixtures and equipment necessary to operate its business and
such furniture, fixtures and equipment are either owned by
the Borrower or leased pursuant to written leases,
(v) conducts all intercompany transactions with each of FAC,
FCI and their respective Affiliates (other than the
Borrower) on terms which the Borrower reasonably believes to
be on an arm's-length basis, (vi) has not guaranteed any
obligation of any of FCI, FAC or any of their respective
Affiliates, nor has it had any of its obligations guaranteed
by any such entities and has not held itself out as
responsible for debts of any such entity or for the
decisions or actions with respect to the business and
affairs of any such entity, (vii) has not permitted the
commingling or pooling of its funds or other assets with the
assets of any of FCI, FAC or any of their respective
Affiliates (other than in respect of items of payment which
are not material in the aggregate and which have been
mistakenly forwarded by an Obligor directly to any of FCI,
FAC or any of their respective Affiliates, or deposited into
a lock-box account maintained for the benefit of FNBB under
its various credit arrangements with FCI and/or FAC), (viii)
has separate deposit and other bank accounts to which none
of FCI, FAC or any of their respective Affiliates has any
access and does not at any time pool any of its funds with
those of FCI, FAC or any of their respective Affiliates,
(ix) maintains financial records which are separate from
those of FCI, FAC or any of their respective Affiliates,
(x) compensates all employees, consultants and agents, or
reimburses each of FCI or FAC, as the case may be, from the
Borrower's own funds, for services provided to the Borrower
by such employees, consultants and agents other than the
services covered under the terms of the Administrative
Services, Lease and Operating Agreement, (xi) has agreed
with each of FCI and FAC pursuant to the terms of the
Administrative Services, Lease and Operating Agreement to
allocate among themselves shared corporate operating
services and expenses which are not reflected in the
Servicing Fee (including, without limitation, the services
of shared employees, consultants and agents, and reasonable
legal and auditing expenses) on the basis of actual use or
the value of services rendered, and otherwise on a basis
reasonably related to actual use or the value of services
rendered, (xii) pays for its own account any incidental
administrative costs and expenses not covered under the
terms of the Administrative Services, Lease and Operating
Agreement, (xiii) conducts all of its business (whether in
writing or orally) solely in its own name, (xiv) is not,
directly or indirectly, named as a direct or contingent
beneficiary or loss payee on any insurance policy covering
the property of any of FCI, FAC, or any of their respective
Affiliates and has entered into no agreement to be named as
such a beneficiary or payee, (xv) acknowledges that Triple-
A, the Administrative Agent, the Collateral Agent, the
Surety, the L/C Bank and the Liquidity Banks are entering
into the transactions contemplated by this Credit Agreement
and the other Facility Documents in reliance on the
Borrower's identity as a separate legal entity from each of
FCI, FAC and each of their respective Affiliates, and (xvi)
practices and adheres to corporate formalities such as
complying with its By-laws and corporate resolutions and the
holding of regularly scheduled board of directors meetings.
(o) Subsidiaries. The Borrower has no Sub-
------------
sidiaries and does not own or hold, directly or indirectly,
any capital stock or equity security of, or any equity
interest in, any Person.
(p) Facility Documents. The Receivables Purchase
------------------
Agreement is the only agreement pursuant to which the
Borrower purchases Contracts, other Transferred Assets or
any other assets of a similar nature. The Borrower has
furnished to each of the Collateral Agent, Triple-A and the
L/C Bank, true, correct and complete copies of each Facility
Document to which the Borrower is a party, each of which is
in full force and effect. Neither the Borrower nor any
Affiliate thereof is in default of any of its obligations
thereunder in any material respect. Upon each Purchase
pursuant to the Receivables Purchase Agreement, the Borrower
shall be the lawful owner of, and have good title to, each
Pledged Contract and all of the Collateral relating thereto,
free and clear of any Liens (other than the Primary Lien,
the L/C Bank Lien and any Permitted Encumbrances). All such
Pledged Contracts and other Collateral are purchased without
recourse to the Seller except as described in the
Receivables Purchase Agreement. The Purchases by the
Borrower under the Receivables Purchase Agreement constitute
valid and true sales and transfers for consideration (and
not merely a pledge of assets for security purposes),
enforceable against creditors of each of FCI and FAC and no
Pledged Contracts or related Collateral shall constitute
property of the Seller.
(q) Business. Since its incorporation, the
--------
Borrower has conducted no business other than the execution,
delivery and performance of the Facility Documents
contemplated hereby, the purchase of Eligible Contracts
thereunder, and such other activities as are incidental to
the foregoing. The Borrower has incurred no Debt except
that expressly incurred hereunder and under the other
Facility Documents.
(r) Ownership of the Borrower. One hundred
------------------------
percent (100%) of the outstanding capital stock of the
Borrower is directly owned (both beneficially and of record)
by FAC. Such stock is validly issued, fully paid and
nonassessable and there are no options, warrants or other
rights to acquire capital stock from the Borrower.
(s) Taxes. The Borrower has filed or caused to
-----
be filed all Federal, state and local tax returns which are
required to be filed by it, and has paid or caused to be
paid all taxes shown to be due and payable on such returns
or on any assessments received by it, other than any taxes
or assessments, the validity of which are being contested in
good faith by appropriate proceedings and with respect to
which the Borrower has set aside adequate reserves on its
books in accordance with GAAP and which proceedings have not
given rise to any Lien.
(t) Solvency. The Borrower, both prior to and
--------
after giving effect to each Purchase, (including, without
limitation, the Purchase contemplated to take place in
connection with the Effective Restatement Date) (i) is not
"insolvent" (as such term is defined in Sec. 101(32)(A) of the
Bankruptcy Code); (ii) is able to pay its debts as they
become due; and (iii) does not have unreasonably small
capital for the business in which it is engaged or for any
business or transaction in which it is about to engage.
(u) Reporting and Accounting Treatment. For
----------------------------------
reporting and accounting purposes, and in its books of
account and records, the Borrower will treat the Purchase of
each Pledged Contract pursuant to the Receivables Purchase
Agreement as a purchase of, or absolute assignment of, the
Seller's full right, title and ownership interest in each
such Pledged Contract, and the Borrower has not in any other
manner accounted for or treated the transactions.
(v) Restatement Balance. The Aggregate Principal
-------------------
Balance of all Pledged Contracts (other than 1995 contracts)
which are Eligible Contracts to be granted to the Collateral
Agent on the Effective Restatement Date (determined as of
July 31, 1996) is not less than $36,014,695.95, and the
aggregate Principal Balance of all 1995 Contracts which are
Eligible Contracts (determined as of September 15, 1996) is
not less than $10,385,832.74.
(w) ERISA. There has been no (i) occurrence or
-----
expected occurrence of any Reportable Event with respect to
any Plan of the Borrower or any ERISA Affiliate, or any
withdrawal from, or the termination, Reorganization or Plan
Insolvency of any Multiemployer Plan, or (ii) institution of
proceedings or the taking of any other action by PBGC or the
Borrower or any ERISA Affiliates or any such Multiemployer
Plan with respect to the withdrawal from, or the
termination, Reorganization or Plan Insolvency of, any such
Plan.
(y) No Adverse Selection. No selection
--------------------
procedures adverse to any of Triple-A, the Collateral Agent,
the Surety, the Administrative Agent or the L/C Bank have
been employed by any of the Originator, the Seller or the
Borrower in selecting (i) the Contracts for inclusion in the
Contract Pool on any Contract Grant Date, (ii) the Contracts
intended to be released from the Primary Lien and the L/C
Bank Lien under Section 7.11(c), or (iii) the Contracts to
--------------
be granted to the Collateral Agent pursuant to Section 7.12
------------
as "Remarketed Contracts".
(z) FairShare Program.
-----------------
(i) On any date of determination, for each VOI
Regime for which the constituent VOIs are
comprised primarily of UDIs, the ratio of (a)
the total number of Points actually allocated
to a VOI Regime pursuant to the Fair Share
Plus Program at such time for the next
succeeding twelve month period, divided by
----------
(b) the total number of Points which are
allocable to available occupiable space in
such VOI regime over such twelve month period
does not exceed a ratio of 1.0 to 1.0.
(ii) On any date of determination, for each owner
of a UDI who is a member of the FairShare
Plus Program, the ratio of (a) the number of
Points allocated to such owner in a VOI
Regime in return for assigning his VOI to the
FairShare Plus Program trust divided by (b)
----------
the total number of Points assigned to all
UDI owners in such VOI Regime does not exceed
the percentage of such owner's undivided
interest in such VOI Regime as described in
such owner's Contract (and related deed).
(aa) No Material Adverse Effect. No event or
--------------------------
circumstance having a Material Adverse Effect has occurred
since the Balance Sheet Date.
The representations and warranties of the Borrower
set forth in this Section 4.01 shall be deemed to be remade,
------------
without further act by any Person, on and as of the Closing
Date, the Effective Restatement Date and each Contract Grant
Date, on and as of the date of any issuance, amendment,
extension or renewal of the Letter of Credit, and (other
than in the case of the representation and warranty set
forth in subsection (aa) above) on and as of the
commencement of each Interest Period occurring hereunder.
The representations and warranties set forth in this Section
-------
4.01 shall survive the Grant of the Pledged Contracts by the
----
Borrower to the Collateral Agent.
SECTION 4.02. Representations and Warranties
------------------------------
Regarding Each Pledged Contract in the Contract Pool. The
----------------------------------------------------
Borrower represents and warrants to each of Triple-A, the
Collateral Agent, the Administrative Agent, the Surety and
the L/C Bank, as to each Pledged Contract, that:
(a) Eligibility. Such Contract is an Eligible
-----------
Contract.
(b) Contract Schedule. The information set forth
-----------------
in the Contract Schedule is true and correct with respect to
such Contract.
(c) No Waivers. The terms of such Contract have
----------
not been waived, altered, modified, or extended in any
respect, without the prior written consent of the Collateral
Agent, other than (i) extensions which are Permitted
Deferrals,
(ii) modifications entered into in accordance with Customary
Practices and Credit Standards and Collections Policies,
which do not reduce the amount or extend the maturity of
required Payments, (iii) reductions in the amount of
required principal Payments under such Contract which do not
alter the aggregate amount of Collections anticipated to be
received in the Collection Account in respect of such
Contract (as a result of any release of prepaid premiums for
Credit Life Insurance), and (iv) modifications in the
applicability of a PAC (which modification will, among other
things, result in a change in the relevant Contract Rate).
(d) Binding Obligation. Such Contract is the
------------------
legal, valid and binding obligation of the Obligor
thereunder and is enforceable against the Obligor in
accordance with its terms, except as such enforceability may
be limited by Debtor Relief Laws, or by general principles
of equity (whether considered in a suit at law or in
equity).
(e) No Defenses. Such Contract is not subject to
-----------
any right of rescission, setoff, counterclaim or defense,
including the defense of usury, the operations of any of the
terms of such Contract or the exercise of any right
thereunder will not render such Contract unenforceable in
whole or in a manner materially affecting the value or
collectibility of such Contract, o or defense has been
asserted with respect thereto.
(f) Origination. Such Contract was originated by
-----------
FCI (or FMB) in the ordinary course of its business, and was
purchased (i) by FCI from FMB (if applicable), (ii) by FAC
from FCI, and (iii) by the Borrower from FAC (pursuant to
the terms of the Receivables Purchase Agreement), in each
case in the ordinary course of their respective businesses
and in a transaction constituting a "true sale".
(g) Lawful Assignment. Such Contract was not
-----------------
originated in and is not subject to the laws of any
jurisdiction the laws of which would make the transfer of
the Contract under the Receivables Purchase Agreement or the
Grant of such Contract under this Credit Agreement unlawful.
(h) Compliance with Law. The requirements of any
--------------------
federal, state or local law (including, without limitation,
usury, truth in lending and equal credit opportunity laws)
applicable to such Contract have been complied with. The
VOI Regime related to such Contract is in compliance with
any and all applicable zoning and building laws and
regulations and any other laws and regulations relating to
the use and occupancy of such VOI Regime. None of the
Borrower, FAC or FCI has received notice of any material
violation of any legal requirements applicable to such VOI
Regime. The VOI Regime related to such Contract complies
with all applicable state statutes including, without
limitation, condominium statutes, time share statutes, HUD
filings relating to interstate land sales (if applicable),
and the requirements of any governmental authority or local
authority having jurisdiction and constitutes a valid and
conforming condominium and time share regime under the laws
of the State where the related Development is located,
except where such noncompliance would not have a Material
Adverse Effect.
(i) Contract in Force. Such Contract is in full
-----------------
force and effect and has not n whole or in part.
(k) Capacity of Parties. All parties to such
-------------------
Contract had capacity to execute the Contract.
(l) Good Title. The Borrower has good and
----------
marketable title to such Contract free and clear of any Lien
(other than the Primary Lien or the L/C Bank Lien). The
Borrower has not sold, assigned or pledged such Contract to
any Person other than the Collateral Agent. As to the
related VOI or Lot, either, (i) a generally accepted form of
title insurance policy, insuring the fee estate ownership of
the Lot or the real property subject to the VOI Regime by
the Persons owning the respective interests therein, and
their successors and assigns was effective at the time the
Originator (or a Subsidiary thereof) acquired the Lot or at
the time of registration of the VOI Regime, is valid and
remains in full force and effect, and was issued by a title
insurer qualified to do business in the applicable
jurisdiction; or (ii) at the time the Originator (or a
Subsidiary thereof) acquired the Lot or at the time of
registration of the VOI Regime, such fee estate ownership
had been verified by an attorney's opinion of title, the
form and substance of which is of a type acceptable for
purposes of registration of sales of VOI or Lots, and which
may be relied upon by Persons subsequently owning the
respective interests therein, and their successors and
assigns. The Borrower has not sold, assigned or pledged its
interest in the related VOI or Lot to any Person other than
the Collateral Agent, and the Borrower's right, title and
interest therein is free of any Liens other than any of the
Primary Lien, the L/C Bank Lien or any Permitted
Encumbrances.
(m) No Defaults. As of the relevant Cut-Off
-----------
Date, there is no default, breach, violation or event
permitting acceleration existing under the Contract and no
event which, with the giving of notice or the expiration of
any grace or cure period or both, would constitute such a
default, breach, violation or event permitting acceleration
under such Contract (after giving effect to any Permitted
Deferrals). None of the Borrower, FAC or FCI has waived any
such default, breach, violation or event permitting
acceleration without obtaining the prior written consent of
the Collateral Agent.
(n) Equal Installments. Such Contract has a
------------------
fixed rate of interest (or, in the case of any 1995
contract, a fixed or a floating rate of interest) and
provides for payments which fully amortize the loan over its
term. Interest accrues on such Contract on an actuarial
(i.e., pre-computed) basis.
(o) Original Contracts. All original executed
------------------
copies of such Contract are in the custody of the Custodian,
except to the extent otherwise permitted pursuant to Section
-------
4.02(x) hereof.
------
(p) Minimum Downpayment. Such Contract had a
-------------------
minimum Equity Percentage of 10% at origination (including
in such total any cash down payments and Payments made on
any other Contract which has been "traded in" in connection
with the origination of such Contract).
(q) Contract Form/Governing Law. Such Contract
---------------------------
was executed in substantially the form of one of the forms
of Contract attached hereto as Exhibit G (as such Exhibit G
--------- ---------
may be amended from time to time with the consent of the
Collateral Agent in the exercise of its reasonable
discretion in connection with the Grant of Contracts
originated at a Development with respect to which Contracts
have not previously been Granted to the Collateral Agent
hereunder), except for changes required by applicable law
and certain other modifications which do not, individually
or in the aggregate, affect the enforceability or
collectibility of such Contract. In addition, such Contract
was originated in and is governed by the laws of the State
in which the related Development is located, and each such
State is a jurisdiction as to the law of which the Borrower
shall have, on or before the relevant Contract Grant Date,
delivered to the Collateral Agent and the L/C Bank an
Opinion of Counsel regarding the enforceability of the form
or forms of Contract used in such jurisdiction and such
other matters as either such recipient shall reasonably
request, and such Contract is substantially in the form of
one of the forms of Contract attached as an exhibit to such
opinion.
(r) No Event of Default. No Event of Default or
-------------------
Unmatured Event of Default will occur as a result of the
Grant of such Contract by the Borrower to the Cact is an
interest in real property consisting of either (a) a fixed
week or undivided interest in fee simple in a lodging unit
or group of lodging units at a Development, (b) an undivided
leasehold interest in any lodging unit located at the
Harbortown Marina Resort Hotel in Ventura County, California
or the Pagosa Mountain ▇▇▇▇▇▇▇ VOI Regime at the Pagosa
Development in ▇▇▇▇▇▇▇▇▇ County, Colorado, or (c) if a Lot,
a fee simple interest in real property; and in each case
such VOI or Lot has been deeded to the Nominee pursuant to
the terms of one of the Title Clearing Agreements, or has
been deeded to the relevant Obligor in accordance with the
requirements of the applicable Contract or applicable law.
(u) Environmental Compliance. Each VOI Regime
------------------------
related to a Pledged Contract is now, and at all times
during FCI's (or any Affiliate of FCI's) ownership thereof
has been free of contamination from any substance, material
or waste identified as toxic or hazardous according to any
federal, state or local law, rule, regulation or order
governing, imposing standards of conduct with respect to, or
regulating in any way the discharge, generation, removal,
transportation, storage or handling of toxic or hazardous
substances, materials or waste (hereinafter referred to as
"Environmental Laws"), including, without limitation, any
PCB, radioactive substance, methane, asbestos, volatile
hydrocarbons, petroleum products or wastes, industrial
solvents or any other material or substance which now or
hereafter may cause or constitute a health, safety or other
environmental hazard to any person or property (any such
substance together with any substance, material or waste
identified as toxic or hazardous under any Environmental Law
now in effect or hereinafter enacted shall be referred to
herein as "Contaminants"). Neither FCI nor any Affiliate of
FCI has caused or suffered to occur any discharge, spill,
uncontrolled loss or seepage of any Contaminant onto any
property neither FCI nor any Affiliate of FCI nor any
Obligor or occupant of all or part of any of the VOI Regimes
is now or has been involved in operations at any VOI Regime
which could lead to liability for FCI, the Borrower, any
other Affiliate of FCI or any other owner of any VOI Regime
or the imposition of a lien on such VOI Regime under any
Environmental Law.
Except as set forth on Schedule 4.02(u), all
property owned, managed or controlled by FCI (or any
Affiliate of FCI) and located within a Development is now,
and has at all times during FCI's (or any Affiliate of
FCI's) ownership, management or control thereof been free of
contamination from any Contaminant. Except as set forth on
Schedule 4.02(u), neither FCI nor any Affiliate of FCI has
caused or suffered to occur any discharge, spill,
uncontrolled loss or seepage of any Contaminant onto any
property comprising or adjoining any of the Developments,
and neither FCI nor any Affiliate of FCI nor any Obligor or
occupant of all or part of any Development is now or has
been involved in operations at any Development which could
lead to liability for FCI, the Borrower, any other Affiliate
of FCI or any other owner of any Development or the
imposition of a lien on such Development under any
Environmental Law. None of the matters set forth on
Schedule 4.02(u) will have a Material Adverse Effect, a
material adverse effect on the interests of the Triple-A,
the L/C Bank, the Surety or the Collateral Agent in the
Collateral or an adverse effect on Triple-A, the L/C Bank,
the Surety or the Collateral Agent.
(v) Tax Liens. All taxes (including, without
---------
limitation, mortgage and transfer taxes) applicable to such
Contract and the related VOI or Lot have been paid. There
are no delinquent tax liens in respect of the VOI or Lot
underlying such Contract.
(w) Credit Life Insurance. If such Contract also
---------------------
financed a policy of Credit Life Insurance: (i) the
Collateral Agent has been assigned a valid and perfected
security interest in and to the rights of the beneficiary
thereunder; (ii) FCI had the power and authority to assign
its interest as the beneficiary of such policy, and it has
so assigned its interest to the Borrower pursuant to the
Receivables Purchase Agreement, (iii) the Borrower has the
power and authority to pledge its interest as the
beneficiary of such policy, and it has so pledged its
interest to the Collateral Agent pursuant to this Agreement;
and (iv) the Collateral Agent has the sole power and
authority to cancel such policy in the event of nonpayment
of such Contract and the sole right to receive any unearned
premium in the event of cancellation of such policy.
(x) Contract Files. The related Contract File
--------------
contains:
(i) other than in the case of Contracts described
in clause (ii) below, at least one original of each
Pledged Contract (other than (A) in the case of an
original Contract which has been removed from the
Contract File for the performance of collection
services and other routine servicing requirements in
accordance with Section 5.01(n), or (B) an original
--------------
Contract which has been identified as a missing
original contract and included on Exhibit B to the
Custodian's Certificate Acknowledging Receipt of
Contracts delivered pursuant to the Receivables
Purchase Agreement in connection with the sale of
Contracts to the Borrower on a Contract Grant Date, and
which is either (x) a 1995 Contract, or (y) a Pledged
Contract with respect to which each of the Collateral
Agent and the L/C Bank shall have waived the
application of this clause (i) in writing), and
(ii) in the case of any Contracts relating to VOIs
or Lots located in Developments in North Carolina or
South Carolina, at least two originals of each Pledged
Contract (other than (A) in the case of an original
Contract which has been removed from the Contract File
for the performance of collection services and other
routine servicing requirements in accordance with
Section 5.01(n), (B) in the case of an original
--------------
Contract which has been removed from the Contract File
for the purpose of recording such Contract in the
relevant local real property recording office (provided
that such Contract shall not have been removed for such
purposes for more than (x) 145 days from the Effective
Restatement Date, in the case of Contracts to be
purchased by the Borrower on or about the Effective
Restatement Date or (y) 145 days from the date of
origination, in the case of Contracts to be purchased
by the Borrower in connection with any Contract Grant
Date other than the Effective Restatement Date), or (C)
an original Contract which has been identified as a
missing original contract and included on Exhibit B to
the Custodian's Certificate Acknowledging Receipt of
Contracts delivered pursuant to the Receivables
Purchase Agreement in connection with the sale of
Contracts to the Borrower on a Contract Grant Date and
which is either (x) a 1995 Contract, or (y) a Pledged
Contract with respect to which each of the Collateral
Agent and the L/C Bank shall have waived the
application of this clause (ii) in writing), and
(iii) in the case of any Contracts in respect of
which the related VOI or Lot has been deeded out to the
relevant Obligor:
(A) a copy of the deed for the related VOI or
Lot, and
(B) a purchase money Mortgage
(other than in the case of any Contract with respect to
which the relevant purchase money Mortgage is outside
the Contract File for purposes of recording such
Mortgage in the relevant local real property recording
office, but only to the extent that: (x) such purchase
money Mortgage and copy of deed shall not have been
outside of the relevant Contract File for such purposes
for more than (1) 145 days from the relevant Contract
Grant Date (in the case of Contracts relating to VOIs
located in the Cypress Palms Development), and (2) 145
days from the date on which the related VOI or Lot is
required to be deeded to an Obligor (in the case of
Contracts relating to VOIs or Lots located in any other
Development), and (y) unless and to the extent waived
by the Collateral Agent and the L/C Bank in writing,
the Collateral Agent shall have received certificates
of appropriate local real property recording officers,
in form and substance satisfactory to the Collateral
Agent, to the effect that the Mortgage in question has
been received for purposes of recordation and is in the
custody of such recording officer (in the case of
Contracts relating to VOIs located in the Cypress Palms
Development)).
(y) Lock-Box Accounts. The Obligor of such
-----------------
Contract either
(1) shall have been instructed, pursuant to the
Servicer's routine distribution of a periodic statement
to such Obligor next succeeding
(A) the Closing Date, the Effective
Restatement Date or any Contract Grant Date (as
applicable), or
(B) the day on which a PAC ceased to apply to
such Contract, in the case of a Pledged Contract
formerly subject to a PAC,
but in no event later than the then next succeeding due
date for Payment under the related Pledged Contract, to
remit Payments thereunder to a Post Office Box for
credit to a Lock-Box Account, or directly to a Lock-Box
Account, in each case maintained at a Lock-Box Bank
pursuant to the terms of a Lock-Box Agreement
substantially in the form of Exhibit H hereto, or
---------
(2) has entered into a PAC, pursuant to which a
deposit account of such Obligor is made subject to a
pre-authorized debit in respect of Payments as they
become due and payable, and the Borrower has, and has
caused each of the Servicer, a Lock-Box Bank and/or the
Collection Account Bank, to take all necessary and
appropriate action to ensure that each such pre-
authorized debit is credited directly to a Lock-Box
Account.
(z) Ground Leases. In the case of any Pledged
-------------
Contract relating to a VOI or Lot located in either of
Harbortown Marina Resort Hotel in Ventura County, California
or the Pagosa Mountain ▇▇▇▇▇▇▇ VOI Regime at the Pagosa
Development in ▇▇▇▇▇▇▇▇▇ County, Colorado, (i) the ground
lease to which the relevant Development is subject has a
fixed term which terminates after the maturity of such
Contract, and (ii) all rent due and payable for the term of
the relevant ground lease has been fully paid through the
date on which this representation is made (or remade, as the
case may be);
(aa) Perfection of Security Interest. On and
-------------------------------
after the relevant Contract Grant Date:
(i) The Borrower shall have a legal, valid
and perfected ownership interest in, and good and
marketable title to, the Contract, which interest
in and title to the Contract is free and clear of
all Liens (other than the Primary Lien or the L/C
Bank Lien); and
(ii) The Collateral Agent shall have a legal,
valid, perfected and enforceable Lien upon and first
priority and second priority security interest in, to
and under such Contract, which Lien upon and security
interest in, to and under such Contract is free and
clear of all Liens other than the Primary Lien and the
L/C Bank Lien.
All of the representations and warranties of the
Borrower set forth in this Section 4.02 shall be deemed to
------------
be made, without further act by any Person, on and as of the
applicable Cut-Off Date with respect to each Contract Grant
Date (including, without limitation, the Contract Grant Date
expected to correspond to the Effective Restatement Date),
with respect to each Contract Granted by the Borrower on and
as of each such date. In addition, each of the
representations and warranties of the Borrower set forth in
the following subsections of this Section 4.02 shall be
------------
deemed to be remade, without further act by any Person, on
and as of each Business Day hereunder occurring prior to the
Collection Date: subsections (a) (but only with respect to
the eligibility criteria set forth in the definition of
"Eligible Contract" in the Definitions List at clauses (a),
(b), (c), (d), (h), (k), (l), (m), (o), (q), (r), (t), (u),
(v) and (w) thereof), (c), (d), (e), (h), (i), (j), (l),
(n), (o), (u), (v), (w), (x), (y), (z), and (aa). All of
the representations and warranties set forth in this Section
4.02 shall survive the Grant of the respective Contracts by
the Borrower to the Collateral Agent.
For the avoidance of doubt, the parties hereto
acknowledge that the Borrower makes the representation and
warranty in subsection (a) of this Section 4.02 relating to
------------
the eligibility criterion set forth in the definition of
"Eligible Contract" in the Definitions List at clause (u)(1)
thereof, without actual knowledge of the satisfaction of
such requirement in the case of any particular Obligor, and
without a requirement of related inquiry or investigation as
to the satisfaction of such requirement on the part of the
Borrower.
Notwithstanding anything in the foregoing to the
contrary, a representation of the Borrower set forth in this
Section 4.02 shall be deemed not to have been breached with
------------
respect to a Pledged Contract Granted to the Collateral
Agent on any Contract Grant Date to extent that all of the
following statements are true:
(i) such Pledged Contract is a 1995 Contract;
(ii) the existence of the condition giving
rise to such breach of a representation set forth
in this Section 4.02 shall have been identified in
------------
any of Exhibits B [Summary by Age of Contract], E
[Summary of Geographical Distribution of
Obligors], G [Summary by Equity Percentage], K
[Summary by Year of Origination], L [Summary of
Original Terms], and M [Summary of Months to
Maturity] to the E&Y Audit Report; and
(iii) the extent to which all Pledged
Contracts in the Contract Pool, taken as a whole,
were subject to such condition was accurately
calculated and described in the E&Y Audit Report
as of the E&Y Audit Date.
SECTION 4.03. Representations and Warranties
------------------------------
Regarding the 1995 Contract Pool. The Borrower represents
--------------------------------
and warrants to each of Triple-A, the Collateral Agent, the
Administrative Agent, the Surety and the L/C Bank that:
(i) E&Y Audit Report. The information set forth
----------------
in the E&Y Audit Report was true and correct in all material
respects as of the E&Y Audit Date; and
(ii) Seasoning of Contract Pool. As of the E&Y
--------------------------
Audit Date, the aggregate Principal Balance of all Contracts
in the 1995 Contract Pool at such time with respect to which
at least 60 months had elapsed from the date on which such
Contract was entered into, constituted greater than 95% of
the 1995 Contract Pool Principal Balance at such time;
(iii) Ownership Percentage. As of the E&Y Audit
--------------------
Date, the aggregate Principal Balance of all Contracts in
the 1995 Contract Pool at such time with respect to which
the Ownership Percentage of such Contract was greater than
or equal to 40%, constituted greater than 95% of the 1995
Contract Pool Principal Balance at such time; and
(iv) Fixed Week Percentage. As of March 31,
---------------------
1995, the aggregate Principal Balance of all Contracts in
the 1995 Contract Pool with respect to which the underlying
ownership interest consisted of a Fixed Week (whether or not
such VOI was then subject to the FairShare Plus Program) or
Lot constituted greater than 90% of the 1995 Contract Pool
Principal Balance at such time.
A breach of a representation and warranty set
forth in this Section 4.03 shall be deemed to be a breach of
------------
such representation and warranty with respect to each 1995
Contract. The representations and warranties made in this
Section 4.03 shall survive the Grant of the respective 1995
------------
Contracts by the Borrower to the Collateral Agent.
SECTION 4.04. Representations and Warranties
------------------------------
Regarding the Contract Files. The Borrower represents and
----------------------------
warrants to each of Triple-A, the Collateral Agent, the
Administrative Agent, the Surety and the L/C Bank, as to
each Pledged Contract, that:
(a) Possession. On or immediately prior to each
----------
Contract Grant Date, the Custodian has possession of each
original Pledged Contract and the related Contract File, and
has acknowledged such receipt, and its undertaking to act as
bailee for purposes of perfection of the Collateral Agent's
interests in such original Pledged Contract and the related
Contract File (provided, however, that the fact that any of
-------- -------
the Contracts not required to be in its respective Contract
File pursuant to Section 4.02(x) hereof is not in the
--------------
possession of the Custodian in its respective Contract File
does not constitute a breach of this representation).
(b) Marking Records. On or before each Contract
---------------
Grant Date, both the Borrower and FAC shall have caused the
portions of the computer files relating to the Pledged
Contracts Granted on such date to the Collateral Agent to be
clearly and unambiguously marked to indicate that such
Pledged Contracts constitute part of the Collateral Granted
by the Borrower in accordance with the terms of this Credit
Agreement. In addition, prior to each such Grant, each such
Pledged Contract shall have been clearly and unambiguously
stamped or marked as follows:
"This Contract is part of the
Collateral under an Amended and Restated
Credit Agreement dated as of July 31,
1996. A first priority security interest
herein is held by Capital Markets
Assurance Corporation ("CapMAC") as
collateral agent for itself and for
Triple-A One Funding Corporation and
their respective assignees, and a second
priority security interest herein is
held by CapMAC as collateral agent for
The First National Bank of Boston and
its assignees."
The representations and warranties of the Borrower
set forth in this Section 4.04 shall be deemed to be remade,
------------
without further act by any Person, on and as of the Closing
Date, the Effective Restatement Date and each Contract Grant
Date with respect to each Contract Granted by the Borrower
either before, or on and as of, each such date, and on and
as of each date on which the Letter of Credit is issued,
amended, renewed, or extended. The representations and
warranties set forth in this Section 4.04 shall survive any
------------
Grant of the respective Contracts by the Borrower.
ARTICLE V
GENERAL COVENANTS
-----------------
SECTION 5.01. Affirmative Covenants of the
----------------------------
Borrower. From the Closing Date until the later of the
--------
Termination Date or the Collection Date, the Borrower shall,
unless the Collateral Agent and the L/C Bank shall otherwise
consent in writing:
(a) Compliance with Laws, Etc. Comply in all
-------------------------
material respects, and cause each of the Servicer and any
subservicer to comply in all material respects, with all
applicable laws, rules, regulations and orders with respect
to it, its business and properties, and all Contracts and
Facility Documents to which it is a party (including,
without limitation, the laws, rules and regulations of each
state governing the sale of time share contracts).
(b) Preservation of Corporate Existence.
-----------------------------------
Preserve and maintain its corporate existence, rights,
franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified in good
standing as a foreign corporation, and maintain all
necessary licenses and approvals, in each jurisdiction,
except where the failure to preserve and maintain such
existence, rights, franchises, privileges, qualifications,
licenses and approvals would not have a Material Adverse
Effect.
(c) Audits. At any time and from time to time
------
during regular business hours, permit the Collateral Agent
or the L/C Bank, or their respective agents or
representatives, access
(i) to the offices and properties of the Borrower
(including, without limitation, any repository used by
the Borrower, or the Servicer on the Borrower's behalf,
to store the computer tapes or other computer records
constituting the Servicer's Daily Report), in order to
examine and make copies of and abstracts from all
books, correspondence and Records of the Borrower as
appropriate to verify the Borrower's compliance with
this Credit Agreement, the Receivables Purchase
Agreement, any other Facility Documents to which it is
a party and any other agreement contemplated hereby or
thereby, and the Collateral Agent, the L/C Bank and/or
their respective agents and representatives may examine
and audit the same, and make photocopies and computer
tape or other computer replicas thereof (as
appropriate), and Borrower agrees to render to the
Collateral Agent, the L/C Bank and/or their respective
agents and representatives, at Borrower's cost and
expense, such clerical and other assistance as may be
reasonably requested with regard thereto; and
(ii) to the officers or employees of the Borrower
in order to discuss matters relating to the Contracts
or the Borrower's performance hereunder with any of the
officers or employees of the Borrower having knowledge
of such matters.
The number and frequency of any such audits shall be limited
to such number and frequency as shall be reasonable in the
exercise of the Collateral Agent's and the L/C Bank's
respective reasonable commercial judgment. Each such audit
shall be at the sole expense of the Borrower (subject to the
Borrower's right under the Receivables Purchase Agreement to
recover such expenses from the Seller). Each of the
Collateral Agent, the L/C Bank, and their respective agents
and representatives shall also have the right to discuss the
Borrower's affairs with the officers and employees of the
Borrower and Borrower's independent accountants and to
verify under appropriate procedures the validity, amount,
quality, quantity, value and condition of, or any other
matter relating to, the Collateral.
(d) Keeping of Records and Books of Account.
----------------------------------------
Maintain and implement administrative and operating proce-
dures (including, without limitation, an ability to recreate
records evidencing the Pledged Contracts in the event of the
destruction or loss of the originals thereof) and keep and
maintain, all documents, books, records and other
information reasonably necessary or advisable for the
collection of all Pledged Contracts (including, without
limitation, records adequate to permit the daily identi-
fication of all Collections with respect to, and adjustments
of amounts payable under, each Pledged Contract).
(e) Performance and Compliance with Receivables
-------------------------------------------
and Contracts. At its expense, timely and fully perform and
-------------
comply, and cause the Seller and/or FCI to comply, in all
material respects, with all provisions, covenants and other
promises required to be observed by it or the Seller under
the Pledged Contracts.
(f) Credit Standards and Collection Policies.
----------------------------------------
Comply in all material respects with the Credit Standards
and Collections Policies and Servicer's Customary Practices
in regard to each Pledged Contract and the related
Collateral.
(g) Collections. (1) Instruct all Obligors to
-----------
either
(A) send all Collections directly to a
Post Office Box or Lock-Box Account, or
(B) in the alternative, make Payments by
way of pre-authorized debits from a deposit
account of such Obligor pursuant to a PAC, which
Payments shall be electronically transferred
directly to a Lock-Box Account immediately upon
each such debit
(provided that, for the avoidance of doubt, each
--------
Obligor may at any time cease to deposit its
Collections directly to a Post Office Box or a Lock-Box
Account, or pursuant to a PAC, so long as such Borrower
promptly instructs such Obligor to commence one of the
two alternative methods of funds transfer provided for
in either of subclauses (A) or (B) of this clause (1)).
------------- --- ----------
(2) In the case of funds transfers pursuant
to a PAC, take, or cause each of the Servicer, a Lock-
Box Bank and/or the Collection Account Bank to take,
all necessary and appropriate action to ensure that
each such pre-authorized debit is credited directly to
a Lock-Box Account.
(3) If the Borrower shall receive any
Collections, the Borrower shall hold such Collections
in trust for the benefit of the Collateral Agent and
deposit such Collections into a Lock-Box Account or the
Collection Account within one Business Day following
Borrower's receipt thereof.
(4) If either of FCI or FAC receives any
Collections, the Borrower shall cause FCI or FAC, as
the case may be, to hold such Collections in trust for
the benefit of the Collateral Agent and deposit such
Collections into a Lock-Box Account or the Collection
Account within one Business Day following such Person's
receipt thereof.
(h) Compliance with ERISA. Comply in all
---------------------
material respects with the provisions of ERISA, the IRC, and
all other applicable laws, and the regulations and
interpretations thereunder.
(i) Perfected Security Interest. Take such
---------------------------
action with respect to each Pledged Contract as is necessary
to ensure that the Borrower maintains, either a first
priority perfected security interest in, or a legal and
valid ownership interest in, any Collateral relating
thereto, in each case free and clear of any Liens (other
than the Primary Lien, the L/C Bank Lien and in the case of
any VOIs or Lots, any Permitted Encumbrance).
(j) Legal Opinion. On or before March 31 in
-------------
each calendar year commencing with 1997, the Borrower shall
furnish to the Collateral Agent an Opinion of Counsel
stating that, in the opinion of such counsel, such action
has been taken with respect to the recording, filing,
re-recording and refiling of this Credit Agreement and any
other requisite documents (including, without limitation,
the Receivables Purchase Agreement), and with respect to the
execution and filing of any financing statements and
continuation statements as is necessary to maintain the
Primary Lien and the L/C Bank Lien in the Pledged Contracts
and other Collateral created by this Credit Agreement and
reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to
maintain such Liens. Such Opinion of Counsel shall also
describe the recording, filing, rerecording and refiling of
this Credit Agreement and any other requisite documents and
the execution and filing of any financing statements and
continuation statements that will, in the opinion of such
counsel, be required to maintain the liens and security
interests Granted hereunder until March 31 in the following
calendar year.
(k) Instruments. The Borrower shall not
-----------
remove any portion of the Collateral that consists of money
or is evidenced by an instrument, certificate or other
writing (including any Contract) from the jurisdiction in
which it was held at the date the most recent Opinion of
Counsel was delivered pursuant to this Section 5.01(k) (or
--------------
from the jurisdiction in which it was held as described in
the Opinion of Counsel delivered at the Effective
Restatement Date if no Opinion of Counsel has yet been
delivered pursuant to this Section 5.01(k)) unless the
--------------
Collateral Agent shall have first received an Opinion of
Counsel to the effect that the Liens created by this Credit
Agreement with respect to such property will continue to be
maintained after giving effect to such action or actions;
provided, however, that each of the Collateral Agent and the
-------- -------
Servicer may remove Pledged Contracts from such jurisdiction
to the extent necessary to satisfy any requirement of law or
court order, in all cases in accordance with the provisions
of the Custodial Agreement and Section 5.01(n).
(l) No Release. The Borrower shall not take any
----------
action and shall use its best efforts not to permit any
action to be taken by others that would release any Person
from any of such Person's covenants or obligations under any
document, instrument or agreement included in the
Collateral, or which would result in the amendment,
hypothecation, subordination, termination or discharge of,
or impair the validity or effectiveness of, any such
document, instrument or agreement, except as expressly
provided in this Credit Agreement or such other instrument
or document.
(m) Insurance and Condemnation.
--------------------------
(i) The Borrower shall, and shall cause FCI
(1) to use its best efforts, in the case of
Developments where FCI or any Subsidiary of FCI
maintains primary or substantial responsibility for
management, administration or other services of a
similar nature, and (2) to do or cause to be done all
things which it may accomplish with a reasonable amount
of cost or effort, in the case of Developments where
FCI or any Subsidiary of FCI does not maintain primary
or substantial responsibility for management,
administration or other services of a similar nature,
to cause each of the POAs for each Development, to (A)
maintain one or more policies of "all-risk" property
and general liability insurance with financially sound
and reputable insurers, providing coverage in scope and
amount which (x) satisfies the requirements of the
Declarations (or any similar charter document)
governing the POA for the maintenance of such insurance
policies, and (y) is at least consistent with the scope
and amount of such insurance coverage obtained by
prudent POAs and/or management of other similar
developments in the same jurisdiction; and (B) apply
the proceeds of any such insurance policies in the
manner specified in the relevant Declarations (or any
similar charter document) governing the POA and/or any
similar charter documents of such POA (which efforts
shall include, in any case, voting as a member of the
POA or as a proxy or attorney-in-fact for the Nominee).
For the avoidance of doubt, the parties hereto
acknowledge that the ultimate discretion and control
relating to the maintenance of any such insurance
policies is vested in the POAs in accordance with the
respective Declaration (or any similar charter
document) relating to each VOI Regime.
(ii) The Borrower shall remit, and shall
cause each of FAC and FCI to remit, to the Collection
Account, the portion of any proceeds received pursuant
to a condemnation of property in any Development
relating to any of the VOIs or Lots.
(iii) The Borrower shall, and shall cause
FCI, to maintain each of (A) the Master Group Credit
Life Policy originally issued by American United Life
Insurance Company of Indiana to FCI, as beneficiary,
and (B) the Master Group Credit Life Policy originally
issued by American Bankers Life Assurance Company of
Florida to FCI, as beneficiary, in each case in full
force and effect, having a scope and amounts of
coverage (on a per Obligor basis) at least equal to the
scope and amounts of coverage in effect on and as of
[March 28, 1995] [the date hereof].
(iv) The Borrower shall, and shall cause FCI,
to maintain each master group policy of Credit Life
Insurance originally issued to FCI, as beneficiary, and
in respect of which a loss payable endorsement or
similar acknowledgment shall have been executed and
delivered to the Collateral Agent by the relevant
insurer pursuant to the terms of Section 3.02(p) hereof
--------------
(as a condition precedent to a Grant of Contracts on a
Contract Grant Date hereunder), in each case in full
force and effect, having a scope and amounts of
coverage (on a per Obligor basis) at least equal to the
scope and amounts of coverage in effect on and as of
the Contract Date relating thereto.
(n) Custodian.
---------
(i) On or before each Contract Grant Date,
and thereafter promptly upon the generation of any
documents, instruments and agreements evidencing or
otherwise relating to the Pledged Contracts or related
Collateral received by any of the Borrower, FAC or FCI,
the Borrower shall deliver or cause to be delivered
directly to the Custodian for the benefit of the
Collateral Agent pursuant to the Custodial Agreement
all such documents, instruments and agreements of the
Borrower, including without limitation, all Pledged
Contracts, installment promissory notes, mortgages, and
all ancillary and collateral documentation executed in
connection therewith (collectively, the "Primary
Custodial Documents"). The Custodian shall hold,
maintain and keep custody of all such Primary Custodial
Documents for the benefit of the Collateral Agent in
the secure location at the storage facility described
in the Custodial Agreement as in effect on the
Effective Restatement Date; provided, however, that as
-------- -------
soon as practicable after the Effective Restatement
Date, but in no event later than six months after the
Effective Restatement Date, the Borrower shall cause
the Custodian to move all such Primary Custodial
Documents and related documents to a secure, fire
retardant location at an office of the Custodian, which
location shall be reasonably acceptable to each of the
Collateral Agent and the L/C Bank. In addition, the
Servicer shall obtain a copy of the each of the Primary
Custodial Documents described above on microfiche, CD-
Rom or other format reasonably acceptable to the
Collateral Agent, which copy shall in each case be
maintained in a fireproof vault at a repository located
outside of the offices of the Servicer or the Borrower
(which repository initially shall be Central Records
Services, Inc. in North Little Rock, and which
repository shall in all cases provide an acknowledgment
in form and substance satisfactory to the Collateral
Agent to the effect that such repository maintains an
account in the name of the Collateral Agent).
(ii) The Custodian shall at all times
maintain control of the Primary Custodial Documents for
the benefit of the Collateral Agent on behalf of
itself, the Administrative Agent, Triple-A and the
Surety, and for the benefit of the Collateral Agent on
behalf of the L/C Bank, in each case pursuant to the
Custodial Agreement. Each of FAC, FCI and the Borrower
may access the Primary Custodial Documents at the
Custodian's storage facility only for the purposes and
upon the terms and conditions set forth herein and in
the Custodial Agreement. Each of the Borrower and the
Servicer may only remove Primary Custodial Documents
for collection services and other routine servicing
requirements from such facility so long as the Primary
Custodial Documents for no more than 100 Pledged
Contracts remain outstanding from the facility at any
one time, all as set forth and pursuant to the
"Bailment Agreement" (as defined in, and attached as
Exhibit "B" to, the Custodial Agreement).
(iii) The Borrower shall at all times comply, and
shall cause each of FCI and FAC to comply, with the
terms of, and their respective obligations under, the
Custodial Agreement, and shall not enter into any
modification, amendment or supplement of or to, and
shall not terminate, any of the Custodial Agreements,
without the Collateral Agent's and the L/C Bank's prior
written consent.
(o) Separate Identity. Take all actions required
to maintain the Borrower's status as a separate legal
entity. Without limiting the foregoing, the Borrower shall:
(i) conduct all of its business, and make all
communications to third parties (including all invoices
(if any), letters, checks and other instruments) solely
in its own name (and not as a division of any other
Person), and require that its employees, if any, when
conducting its business identify themselves as such and
not as employees of any other Affiliate of the Borrower
(including, without limitation, by means of providing
appropriate employees with business or identification
cards identifying such employees as the Borrower's
employees);
(ii) compensate all employees, consultants and
agents directly or indirectly through reimbursement of
the Seller, from the Borrower's bank accounts, for
services provided to the Borrower by such employees,
consultants and agents and, to the extent any employee,
consultant or agent of the Borrower is also an
employee, consultant or agent of any Affiliate of the
Borrower, allocate the compensation of such employee,
consultant or agent between the Borrower and such
Affiliate on a basis which reflects the respective
services rendered to the Borrower and such Affiliate
(provided that any fees and expenses payable to the
--------
Custodian under the Custodial Agreement shall be the
responsibility of the Servicer to be paid out of its
Servicing Fee) other than with respect to the services
covered under the terms of the Administrative Services,
Lease and Operating Agreement;
(iii) (A) pay its own incidental administrative
costs and expenses not covered under the terms of the
Administrative Services, Lease and Operating Agreement,
from its own funds, (B) allocate all other shared
overhead expenses (including, without limitation,
telephone and other utility charges, the services of
shared employees, consultants and agents, and
reasonable legal and auditing expenses) which are not
reflected in the Servicing Fee, and other items of cost
and expense shared between the Borrower and any
Affiliate, pursuant to the terms of the Administrative
Services, Lease and Operating Agreement, on the basis
of actual use to the extent practicable and, to the
extent such allocation is not practicable, on a basis
reasonably related to actual use or the value of
services rendered, and (C) allocate taxes on the basis
set forth in the Tax Sharing Agreement;
(iv) at all times have at least two "Independent
Directors", one of which satisfies the requirements set
forth in Section 4.01(n) hereof and under the
--------------
Borrower's Certificate of Incorporation, and have at
least one officer responsible for managing its day-to-
day business and manage such business by or under the
direction of its board of directors;
(v) maintain its books and records separate from
those of any Affiliate;
(vi) prepare its financial statements separately
from those of its Affiliates and ensure that any
consolidated financial statements of each of FAC and
FCI have notes to the effect that the Borrower is a
separate corporate entity whose creditors have a claim
on its assets prior to those assets becoming available
to its equity holders and therefore to any creditors of
FAC or FCI, as the case may be;
(vii) not commingle its funds or other assets
with those of any of its Affiliates (other than in
respect of items of payment which are not material in
the aggregate and which have been mistakenly forwarded
by an Obligor directly to any of FCI, FAC or any of
their respective Affiliates), and not to hold its
assets in any manner that would create an appearance
that such assets belong to any such Affiliate, not
maintain bank accounts or other depository accounts to
which any such Affiliate is an account party, into
which any such Affiliate makes deposits or from which
any such Affiliate has the power to make withdrawals,
and not act as an agent or representative of any of its
Affiliates in any capacity;
(viii) not permit any of its Affiliates to pay
the Borrower's operating expenses (except pursuant to
allocation arrangements that comply with the
requirements of subsection (ii) or (iii) of this
-------------- -----
Section 5.01(o) or pursuant to the terms of the
--------------
Receivables Purchase Agreement);
(ix) not guarantee any obligation of any of its
Affiliates nor have any of its obligations guaranteed
by any such Affiliate, (either directly or by seeking
credit based on the assets of such Affiliate) or
otherwise hold itself out as responsible for the debts
of any Affiliate;
(x) maintain at all times stationery and a
telephone number separate from that of any Affiliate
and which telephone number will be answered in its own
name, and have all its officers and employees conduct
all of its business solely in its own name;
(xi) hold regular meetings of its board of
directors in accordance with the provisions of its
Certificate of Incorporation and otherwise take such
actions as are necessary on its part to ensure that all
corporate procedures required by its Certificate of
Incorporation and by-laws are duly and validly taken;
(xii) maintain a separate office from the offices
of any of its Affiliates and identify such office by a
sign in its own name;
(xiii) not advance funds or other assets to, or
commit to advance funds or other assets to (other than
by way of payments in respect of a Purchase on any
Contract Grant Date under the Receivables Purchase
Agreement), or accept funds from (other than by way of
contributions to capital) FAC or any of its Affiliates
for any purpose or transaction (other than in
compliance with the provisions of Section 5.02(k) with
respect to transactions with Affiliates), or permit FAC
or any of its Affiliates to be involved in the
management of the Borrower;
(xiv) respond to any inquiries with respect to
ownership of a Pledged Contract by stating that it is
the owner of such Pledged Contract, and that such
Pledged Contract is Granted to the Collateral Agent for
the benefit of itself, the Administrative Agent,
Triple-A, the Surety, and to the Collateral Agent for
the benefit of the L/C Bank;
(xv) on or before March 31 of each year,
beginning in 1997, the Borrower shall deliver to the
Collateral Agent an Officer's Certificate stating that
Borrower has, during the preceding year, observed all
of the requisite corporate formalities and conducted
its business and operations in such a manner as
required for the Borrower to maintain its separate
corporate existence from any other entity; and
(xvi) take such other actions as are necessary on
its part to ensure that the facts and assumptions set
forth in the non-consolidation opinion described in
Section F.1.b. of the List of Closing Documents
attached at Exhibit C remain true and correct at all
times.
(p) Computer Files. ▇▇▇▇ or cause to be marked
--------------
each Pledged Contract in its computer files as described in
Section 4.04(b) hereof.
--------------
(q) Taxes. File or cause to be filed, and cause
-----
each of its Affiliates with whom it shares consolidated tax
liability to file, all federal, state and local tax returns
which are required to be filed by it, except where the
failure to file such returns could not reasonably be
expected to have a Material Adverse Effect, or which could
otherwise be reasonably expected to expose the Borrower to a
material liability. The Borrower shall pay or cause to be
paid all taxes shown to be due and payable on such returns
or on any assessments received by it, other than any taxes
or assessments, the validity of which are being contested in
good faith by appropriate proceedings and with respect to
which the Borrower or the applicable Affiliate shall have
set aside adequate reserves on its books in accordance with
GAAP, and which proceedings could not reasonably be expected
to have a Material Adverse Effect, or which could otherwise
be reasonably expected to expose the Borrower to a material
liability.
(r) Facility Documents. Comply in all material
------------------
respects with the terms of, employ the procedures outlined
in and enforce the obligations of the Seller and/or FCI (as
the case may be) under the Receivables Purchase Agreement,
and all of the other Facility Documents to which such Person
is a party, and take all such action to such end as may be
from time to time reasonably requested by the Collateral
Agent, maintain all such Facility Documents in full force
and effect and make to the Seller or FCI such reasonable
demands and requests for information and reports or for
action as the Borrower is entitled to make thereunder and as
may be from time to time reasonably requested by the
Collateral Agent.
(s) Contract Schedule. Promptly amend the
-----------------
Contract Schedule to reflect terms or discrepancies that
become known after the Contract Grant Date, and promptly
notify the Collateral Agent of any such amendments.
(t) Segregation of Collections. Prevent the
--------------------------
deposit into any of the Lock-Box Accounts, the Collection
Account or the Spread Account of any funds other than
Collections in respect of the Pledged Contracts (except, in
the case of the Spread Account, for the initial deposit
therein) (provided that this covenant shall not have been
--------
breached to the extent that items other than Collections,
which are not material in the aggregate, have been
mistakenly forwarded by an Obligor directly to any of the
Lock-Box Accounts, the Collection Account or the Spread
Account and, to the extent that any such funds are
nevertheless deposited into any of such Lock-Box Accounts,
the Collection Account or the Spread Account, promptly
identify any such funds to the Servicer for segregation and
remittance to the owner thereof.
SECTION 5.02. Negative Covenants of the Borrower.
---------------------------------
From the Closing Date until the later of the Termination
Date or the Collection Date, the Borrower shall not, without
the prior written consent of the Collateral Agent and the
L/C Bank:
(a) Sales, Liens, Etc. Against Receivables and
------------------------------------------
Related Security. Except for the releases contemplated
----------------
under Section 7.11 and 7.12, sell, assign (by operation of
------------ -----
law or otherwise) or otherwise dispose of, or create or
suffer to exist, any Lien (other than the Primary Lien, the
L/C Bank Lien or, with respect to VOIs and Lots relating to
Pledged Contracts, any Permitted Encumbrances thereon) upon
or with respect to, any Pledged Contract or any other
Collateral, or any interests in either thereof, or upon or
with respect to any Post Office Box, the Collection Account,
the Spread Account, any Lock-Box Account or the L/C Cash
Collateral Account, or assign any right to receive income in
respect thereof. The Borrower shall immediately notify the
Collateral Agent of the existence of any Lien on any Pledged
Contract or any other Collateral, and the Borrower shall
defend the right, title and interest of each of the Borrower
and the Collateral Agent in, to and under the Pledged
Contracts and all other Collateral, against all claims of
third parties.
(b) Extension or Amendment of Contract Terms.
----------------------------------------
Extend, amend, waive or otherwise modify the terms of any
Pledged Contract, or permit the rescission or cancellation
of any Pledged Contract, whether for any reason relating to
a negative change in the related Obligor's creditworthiness
or inability to make any payment under the Pledged Contract
or otherwise; provided, however, that the following
-------- -------
modifications may be made to a Pledged Contract from time to
time: (i) extensions which are Permitted Deferrals, (ii)
amendments entered into in accordance with Customary
Practices and Credit Standards and Collections Policies,
which do not reduce the amount or extend the maturity of
required Payments, (iii) reductions in the amount of
required principal Payments under such Contract which do not
alter the aggregate amount of Collections anticipated to be
received in the Collection Account in respect of such
Contract (as a result of any release of prepaid premiums for
Credit Life Insurance), and (iv) modifications in the
applicability of a PAC (which will, among other things,
result in a change in the relevant Contract Rate).
(c) Change in Business or Credit and Collection
-------------------------------------------
Policy. (i) Make any change in the character of its
------
business, or, (ii) make any change in the Credit Standards
and Collection Policies, or deviate from the exercise of
Customary Practices, which change or deviation described in
this clause (ii) would, in either case, materially impair
the value or collectibility of any Pledged Contract.
(d) Change in Payment Instructions to Obligors.
------------------------------------------
Add or terminate any bank as a Lock-Box Bank from those
listed in Exhibit F or make any change in its instructions
---------
to Obligors regarding payments to be made to any Lock-Box
Account at a Lock-Box Bank, unless the Collateral Agent
shall have received (i) 30 days' prior notice of such
addition, termination or change; (ii) written confirmation
from the Borrower that after the effectiveness of any such
termination, there shall be at least one (1) Lock Box
Account in existence; and (iii) prior to the effective date
of such addition, termination or change, (x) executed copies
of Lock-Box Agreements executed by each new Lock-Box Bank,
the Borrower, and the Collateral Agent (and, at the option
of the Collateral Agent, the Servicer) and (y) copies of all
agreements and documents signed by either the Borrower or
the respective Lock-Box Bank with respect to any new Lock-
Box Account.
(e) Stock, Merger, Consolidation, Etc. Sell any
---------------------------------
shares of any class of its capital stock to any Person
(other than FAC) or consolidate with or merge into or with
any other corporation, or purchase or otherwise acquire all
or substantially all of the assets or capital stock, or
other ownership interest of, any Person or sell, transfer,
lease or otherwise dispose of all or substantially all of
its assets to any Person, except for the granting of the
Primary Lien and the L/C Bank Lien as expressly permitted
under the terms of this Credit Agreement.
(f) Change in Corporate Name, etc. Make any
-----------------------------
change to its corporate name, or use any trade names,
fictitious names, assumed names or "doing business as"
names.
(g) ERISA Matters. (i) Engage or permit any
-------------
ERISA Affiliate to engage in any prohibited transaction for
which an exemption is not available or has not previously
been obtained from the DOL; (ii) permit to exist any
accumulated funding deficiency, as defined in Section 302(a)
of ERISA and Section 412(a) of the IRC, or funding
deficiency with respect to any Benefit Plan other than a
Multiemployer Plan; (iii) fail to make any payments to any
Multiemployer Plan that the Borrower or any ERISA Affiliate
may be required to make under the agreement relating to such
Multiemployer Plan or any law pertaining thereto;
(iv) terminate any Benefit Plan so as to result in any
liability; or (v) permit to exist any occurrence of any
reportable event described in Title IV of ERISA which
represents a material risk of a liability of the Borrower or
any ERISA Affiliate under ERISA or the IRC; provided,
--------
however, the Borrower's ERISA Affiliates may take or allow
-------
such prohibited transactions, accumulated funding
deficiencies, payments, terminations and reportable events
described in clauses (i) through (iv) above so long as such
events occurring within any fiscal year of the Borrower, in
the aggregate, involve a payment of money by or an
incurrence of liability of any such ERISA Affiliate
(collectively, "ERISA Liabilities") in an amount which does
-----------------
not exceed $500,000.
(h) Terminate or Reject Contracts. Without
-----------------------------
limiting anything in Section 5.02(b), terminate or reject
---------------
any Pledged Contract prior to the end of the term of such
Contract, whether such rejection or early termination is
made pursuant to an equitable cause, statute, regulation,
judicial proceeding or other applicable law (including,
without limitation, Section 365 of the Bankruptcy Code),
unless prior to such termination or rejection, such Pledged
Contract and any related Collateral have been released from
both of the Primary Lien and the L/C Bank Lien pursuant to
Section 7.11.
------------
(i) Debt. Create, incur, assume or suffer to
----
exist any Debt except for Debt to Triple-A, the
Administrative Agent, the Collateral Agent, the Surety or
the L/C Bank expressly contemplated hereunder, (ii) Debt to
the Surety under the Insurance Agreement, and (iii) Debt
incurred in accordance with the terms of the Receivables
Purchase Agreement in connection with the funding of a
Purchase thereunder, which is evidenced by the Subordinated
Note (as defined therein, and subject to the subordination
provisions thereof).
(j) Guarantees. Guarantee, endorse or otherwise
----------
be or become contingently liable (including by agreement to
maintain balance sheet tests) in connection with the
obligations of any other Person, except endorsements of
negotiable instruments for collection in the ordinary course
of business and reimbursement or indemnification obligations
in favor of Triple-A, the Collateral Agent, the Surety or
the L/C Bank or any Liquidity Bank as provided for under
this Credit Agreement.
(k) Limitation on Transactions with Affiliates.
------------------------------------------
Enter into, or be a party to any transaction with any
Affiliate, except for:
(i) the transactions contemplated hereby and
by the Receivables Purchase Agreement;
(ii) transactions related to the allocation of
shared overhead expenses or taxes as described in
clause (iii) of Section 5.01(o); and
---------------
(iii) to the extent not otherwise prohibited
under this Credit Agreement, other transactions in
the nature of employment contracts and directors'
fees, upon fair and reasonable terms materially no
less favorable to the Borrower than would be
obtained in a comparable arm's-length transaction
with a Person not an Affiliate.
(l) Facility Documents. Except as otherwise
------------------
permitted under Section 14.01, without the prior consent of
-------------
the Collateral Agent and the L/C Bank (a) terminate, amend
or otherwise modify any Facility Document to which it is a
party, or grant any waiver or consent thereunder, (b)
exercise any discretionary rights granted to the Borrower
under the Receivables Purchase Agreement pursuant to
provisions thereof providing for certain actions to be taken
"with the consent of the Company", "acceptable to the
Company" as "specified by the Company", "in the reasonable
judgment of the Company" or similar provisions (it being
understood that inaction by the Borrower shall not be
considered to be an exercise of such discretionary rights),
or (c) terminate, amend or otherwise modify the FairShare
Plus Agreement; provided, however, (A) the Title Clearing
-------- -------
Agreements may be amended for the purposes of (1) making
additional properties subject thereto, (2) making an
Affiliate of FCI a party thereto having the same rights and
obligations thereunder as FCI or (3) identifying a separate
pool of Contracts (which shall not include the Pledged
Contracts) to be sold or pledged to secure debt under a
pooling or pledge arrangement similar to that evidenced by
this Credit Agreement, and (B) the FairShare Plus Agreement
may be amended from time to time (1) to substitute or add
additional parties thereto, (2) to comply with state and
federal laws or regulations, or (3) for any other purpose,
provided that with respect to this clause (3), the Borrower
furnishes to the Collateral Agent an Opinion of Counsel in
form and substance acceptable to the Collateral Agent to the
effect that such amendment or modification will not
adversely affect in any material respect the respective
interests of Triple-A, the Collateral Agent, the
Administrative Agent, the L/C Bank or the Surety.
(m) Charter and By-Laws. Amend or otherwise
-------------------
modify its Certificate of Incorporation or By-laws in any
manner which requires the consent of an "Independent
Director" (as defined in the Borrower's Certificate of
Incorporation), other than as specifically required by
CapMAC and the L/C Bank in connection with the Effective
Restatement Date in accordance with Section 3.01(e) hereof.
--------------
(n) Lines of Business. Conduct any business
-----------------
other than that described in Section 4.01(q), or enter into
--------------
any transaction with any Person which is not contemplated by
or incidental to the performance of its obligations under
the Facility Documents to which it is a party.
(o) Accounting Treatment. Prepare any financial
--------------------
statements or other statements (including any tax filings
which are not consolidated with those of the FCI or FAC)
which shall account for the transactions contemplated by the
Receivables Purchase Agreement in any manner other than as
the sale of, or a capital contribution of, the Pledged
Contracts by the Seller to the Borrower.
(p) Limitation on Investments. Make or suffer to
-------------------------
exist any loans or advances to, or extend any credit to, or
make any investments (by way of transfer of property,
contributions to capital, purchase of stock or securities or
evidences of indebtedness, acquisition of the business or
assets, or otherwise) in, any Affiliate or any other Person
except for (i) Permitted Investments, (ii) the purchase of
Contracts pursuant to the terms of the Receivables Purchase
Agreement and (iii) the acceptance of investments in
exchange for Defaulted Contracts, in an effort to maximize
the recoveries thereon (in each such case, with the prior
written consent of the Collateral Agent).
(q) Insolvency Proceedings. Institute Insolvency
----------------------
Proceedings with respect to the Borrower, FAC, FCI, or any
Affiliate thereof or consent to the institution of
Insolvency Proceedings against the Borrower, FAC, FCI, or
any affiliate thereof or take any corporate action in
furtherance of any such action, or seek dissolution or
liquidation in whole or in part of the Borrower, FAC, FCI,
or any Affiliate thereof.
(r) Prohibited Payments.
-------------------
(i) Pay or declare any dividend or other
distribution with respect to its capital stock, or make any
payment on account of the purchase, redemption or other
acquisition or retirement of its capital stock or any
warrant, option or other right to acquire any such capital
stock, either directly or indirectly (any such distribution
or payment being a "Dividend") if, (x) prior to giving
effect to such declaration, payment or distribution of a
Dividend, any amount of unpaid principal or interest remains
outstanding under the Subordinated Note, or (y) after giving
effect to such declaration, payment or distribution of a
Dividend the Borrower (A) would be "insolvent" (as such term
is defined in Sec. 101(32)(A) of the Bankruptcy Code), (B) would
be unable to pay its debts as they become due, or (C) would
have unreasonably small capital for the business in which it
is engaged or for any business or transaction in which it is
about to engage (provided that nothing in this clause (i)
--------
shall prohibit the Borrower from effecting any Dividends
consisting of property constituting VOIs or Lots for which
the applicable requirements for release of the related
Contract from each of the Primary Lien and the L/C Bank Lien
under Section 7.11 have been satisfied);
------------
(ii) On or after the occurrence of the earliest
to occur of any Borrowing Base Shortfall, O/C Shortfall,
Spread Account Shortfall or Event of Default, pay,
distribute or declare any Dividend; or
(iii) make, or agree to make or schedule to be
made, any payments of principal or accrued interest in
respect of any subordinated Debt of Borrower (including,
without limitation, the Subordinated Note), except for
payments of principal and interest owing under the
Subordinated Note as permitted on any Settlement Date in
accordance with the provisions of Section 7.06(b)(x).
-----------------
ARTICLE VI
REPORTING REQUIREMENTS
----------------------
SECTION 6.01. Reporting Requirements of the
-----------------------------
Servicer. From the Closing Date until the later of the
--------
Termination Date or the Collection Date, the Servicer shall,
unless the Collateral Agent shall otherwise consent in
writing, furnish to the Collateral Agent and, unless the L/C
Bank shall otherwise consent in writing, furnish to the L/C
Bank (or a designated agent or repository for the Collateral
Agent and the L/C Bank as identified hereinbelow), or as
otherwise notified by the Collateral Agent or the L/C Bank
(as the case may be) to the Servicer:
(a) Daily Reports. By not later than 3:00 p.m.,
-------------
Little Rock, Arkansas time on each Business Day,
(x) a report on computer tape (or other
computer record format reasonably acceptable to the
Collateral Agent) containing the master file for each
Pledged Contract, updated through the close of business
on the prior Business Day and appropriately filled-out
(which master file shall contain, among other things,
(i) the Contract Pool Principal Balance of each Pledged
Contract as of the close of business on the preceding
Business Day, (ii) the interest rate payable under each
Pledged Contract, and (iii) an identifying notation for
each Pledged Contract to which a PAC is applicable),
which tape shall be delivered to a repository which may
be designated by the Collateral Agent from time to time
(which repository initially shall be Central Records
Services, Inc. in North Little Rock, and which
repository shall in all cases provide an acknowledgment
in form and substance satisfactory to the Collateral
Agent to the effect that such repository maintains an
account in the name of the Collateral Agent); and
(y) a report, by telecopy, containing such
information with respect to daily Collections and other
performance criteria concerning the Contract Pool, and
in such format, as the Collateral Agent and/or the L/C
Bank may reasonably request from time to time (each
such report described in clause (x) or this clause (y)
being referred to herein as a "Servicer's Daily
----------------
Report").
------
Any transmission or other delivery of each such report to
the Collateral Agent and/or the L/C Bank, or a repository
therefor, as the case may be, shall be deemed to be a
representation and warranty by the Servicer to the
Collateral Agent and/or the L/C Bank that the information
contained therein is true and correct in all material
respects.
(b) Settlement Reports. By not later than 3:00
------------------
p.m., Little Rock, Arkansas time, on the second Business Day
preceding each Settlement Date, a Settlement Report,
appropriately filled-out, containing current information
with respect to the then most recently concluded Calculation
Period, in each case dated as of the next preceding
Determination Date. Any transmission of such report to the
Collateral Agent or the L/C Bank shall be deemed to be a
representation and warranty by the Servicer to the
Collateral Agent and the L/C Bank that the information
contained therein is true and correct in all material
respects.
(c) Certificate of Servicing Officer.
--------------------------------
Simultaneously with the delivery of the Settlement Report, a
certificate of a Servicing Officer substantially in the form
of Exhibit I, certifying the accuracy of such report and
---------
that no Event of Default or Unmatured Event of Default has
occurred, or if such event has occurred and is continuing,
specifying the event and its status. Such certificate shall
also identify which, if any, Pledged Contracts have become
Defective Contracts or Defaulted Contracts, and which are to
be released on such Settlement Date pursuant to Section
-------
7.11.
----
(d) Other Data. At the request of the Collateral
----------
Agent or the L/C Bank, such underlying data in respect of
the Pledged Contracts, in addition to the data described in
Sections 6.01(a), (b) and (c) above, as can be generated by
---------------- -- ---
the Servicer's existing data processing system without undue
modification or expense.
(e) Annual Servicer's Certificate. On or before
-----------------------------
March 31 of each calendar year, beginning in 1997, an
Officer's Certificate stating that (a) a review of the
activities of the Servicer during the preceding calendar
year (or, in the case of the first such Officer's
Certificate, the period since the [Closing Date]) and of its
performance under this Credit Agreement was made under the
supervision of the officer signing such certificate and (b)
to the best of such Servicing Officer's knowledge, based on
such review, the Servicer has fully performed all of its
obligations under this Credit Agreement throughout such
year, or, if there has been a default in the performance of
any such obligation, specifying each such default known to
such officer and the nature and status thereof.
(f) Annual Report of Accountants. On or before
-----------------------------
March 31 of each calendar year, beginning in 1997, a
statement prepared and delivered by a firm of nationally
recognized independent "Big 6" public accountants (who may
also render other services to the Servicer, the Borrower or
FCI), to the effect that such firm, in connection with its
annual examination of the Servicer, has (A) made a study and
evaluation of the Servicer's internal accounting controls
and computer systems relative to the servicing of the
Pledged Contracts and that, on the basis of such
examination, such firm is of the opinion that (assuming the
accuracy of reports by the Servicer and third party agents)
the system of internal accounting controls in effect on the
date of such statement relating to servicing procedures in
connection with the Pledged Contracts performed by the
Servicer, taken as a whole, was sufficient for the
prevention and detection of material errors and material
irregularities; and (B) compared the mathematical
calculations of each amount set forth in the Servicer's
Settlement Reports for each Calculation Period in the
preceding twelve-month period with the computer records of
the Servicer, and that such firm is of the opinion that such
amounts are in agreement; except in either case for such
exceptions as they believe to be immaterial and such other
exceptions as shall be set forth in such statement.
(g) Servicer Default. Within one Business Day
----------------
after a Servicing Officer becomes aware of the occurrence of
a Servicer Default, and each Unmatured Servicer Default,
notification of such occurrence, as soon as possible and in
any event (A) within three Business Days after a Servicing
Officer becomes aware of the occurrence of a Servicer
Default or Unmatured Servicer Default, the statement of the
chief financial officer or chief accounting officer or other
Servicing Officer setting forth details of such Servicer
Default or Unmatured Servicer Default, and the action which
the Servicer has taken and proposes to take with respect
thereto, and (B) within three Business Days after a
Servicing Officer becomes aware of the occurrence thereof,
notice of any other event, development or information which
is reasonably likely to materially and adversely affect the
ability of the Servicer to perform its obligations under
this Credit Agreement.
In the event that FAC is no longer acting as
Servicer, any Successor Servicer appointed and acting
pursuant to Section 11.02 shall deliver or make available to
-------------
the Borrower and FAC each certificate and report required to
be prepared, forwarded or delivered thereafter pursuant to
the provisions of this Section 6.01(g).
--------------
SECTION 6.02. Additional Reporting Requirements;
---------------------------------
FAC and FCI; SEC Filings. From the Closing Date until the
------------------------
later of the Termination Date or the Collection Date, the
Servicer shall, for so long as the Servicer is an Affiliate
of the Borrower (and thereafter, the Borrower shall), unless
the Collateral Agent shall otherwise consent in writing,
furnish to the Collateral Agent and, unless the L/C Bank
shall otherwise consent in writing, furnish to the L/C Bank:
(a) as soon as available, and in any event not
later than the later of 50 days following the end of each
quarterly accounting period or 10 days following the filing
of a Form 10-Q, if any, with the Securities and Exchange
Commission, unaudited consolidated statements of income and
cash flows for each of FCI and FAC for the period from the
beginning of the current fiscal year to the end of such
quarterly period, and an unaudited consolidated balance
sheet of each of FCI and FAC as at the end of such quarterly
period, setting forth in each case figures from the income
statement and statement of cash flows for the corresponding
quarterly period of the next preceding annual accounting
period, and from the year-end balance sheet for the next
preceding annual accounting period, all in reasonable detail
and certified by the authorized financial officer of each of
FCI and FAC, as applicable, subject to changes resulting
from normal year-end adjustments;
(b) as soon as practicable, and in any event not
later than the later of 95 days following the end of each
annual accounting period or within 10 days following the
filing of a Form 10-K, if any, with the Securities and
Exchange Commission, audited consolidated statements of
income and cash flows for each of FCI and FAC for such
annual period, and a consolidated balance sheet of each of
FCI and FAC as at the end of such annual accounting period,
setting forth in each case figures from the financial
statements for the next preceding annual accounting period,
and the end of the next preceding annual accounting period,
all in reasonable detail and certified by a firm of "Big 6"
independent accountants;
(c) as soon as practicable, and in any event not
later than the Settlement Date next succeeding each
Determination Date, a written report setting forth the
following information (which written report may be included
in the Settlement Report with respect to the Calculation
Period ending on such Determination Date):
(i) for each Development, the total number and
aggregate dollar value of all Fixed Weeks, and the
total number of Points and aggregate dollar value of
all UDIs, in each case sold by FCI or any of its
Affiliates to a Person other than FCI or any of its
Affiliates during the Calculation Period ending on such
Determination Date,
(ii) for each Development, the total number and
aggregate dollar value of all Fixed Weeks, and the
total number of Points and aggregate dollar value of
all UDIs, in each case beneficially owned by FCI or any
of its Affiliates as of such Determination Date, and
(iii) with respect to all VOI units relating to
improvements located within a Development, the
construction of which was completed during the
Calculation Period ending on such Determination Date,
(A) the total number and aggregate dollar value of all
Fixed Weeks, and the total number of Points and
aggregate dollar value of all UDIs, in each case which
have been sold by FCI or any of its Affiliates to a
Person other than FCI or any of its Affiliates on or
prior to such Determination Date, and (B) the total
number and aggregate dollar value of all Fixed Weeks,
and the total number of Points and aggregate dollar
value of all UDIs, in each case beneficially owned by
FCI or any of its Affiliates as of such Determination
Date;
(provided, however, that unless FCI or any Affiliate of FCI
-------- --------
is the property manager of a VOI Regime at the time of any
determination hereunder, the Servicer's obligation to
deliver the information described in each of clauses (iv)
and (v) of this Section 6.02(c) with respect to such VOI
Regime shall be limited to the extent of the Servicer's
reasonable efforts);
(d) with respect to each VOI Regime (i) within
120 days after the Effective Restatement Date, a copy of all
policies of all-risk property and liability insurance, in
each case maintained by the relevant POA with financially
sound and reputable insurers, as required under in Section
-------
5.01(m)(i), and (ii) no later than one month prior to the
---------
expiration of said policy or policies, a copy of the
relevant replacement policy or policies (provided, however,
-------- -------
that unless FCI or any Affiliate of FCI is the property
manager of the relevant VOI Regime at the time of any
determination hereunder, the Servicer's obligation to
deliver the information described in this Section 6.02(d)
--------------
shall be limited to the extent of the Servicer's reasonable
efforts);
(e) as soon as practicable and in any event not
later than 120 days following the end of each annual
accounting period, for each POA at each VOI Regime: (i) the
annual audited financial statements for such accounting
period, and (ii) the annual budgets for the next succeeding
annual accounting period (provided, however, that (x) unless
FCI or any Affiliate of FCI is the property manager of the
relevant VOI Regime at the time of any determination
hereunder, the Servicer's obligation to deliver the
information described in this Section 6.02(e) shall be
limited to the extent of the Servicer's reasonable efforts
to request such information from the relevant Persons, and
(y) the financial statements required to be delivered under
clause (i) above shall be audited financial statements only
to the extent that audited annual financial statements for
such annual period are prepared for the relevant POA);
(f) to the extent not covered in subsections (a)
through (e) above, inclusive, as soon as practicable and in
any event within ten (10) days after such filing, any
financial reports filed by either or both of FCI and FAC
with the Securities and Exchange Commission; and
(g) as soon as practicable, and in any event no
later than 120 days following the end of each calendar year,
the following:
(i) an income statement for such year and a
balance sheet as of the end of such year for the
FairShare Vacation Plan Use Management Trust,
setting forth in each case corresponding figures
from the next preceding calendar year's annual
financial statements, all in reasonable detail and
audited by a firm of "Big 6" independent
accountants, and
(ii) a statement of key exchange operation
statistics for the FairShare Plus Program for such
year, setting forth corresponding figures from the
next preceding calendar year's annual financial
statements, all in reasonable detail and audited
by a firm of "Big 6" independent accountants and
in no less detail and scope than such statement
audited by Ernst & Young LLP for calendar year
1995.
SECTION 6.03. Miscellaneous Borrower and Servicer
-----------------------------------
Reporting Requirements. From the Closing Date until the
----------------------
later of the Termination Date or the Collection Date, the
Servicer shall, for so long as the Servicer is an Affiliate
of the Borrower (and thereafter, the Borrower shall), unless
the Collateral Agent shall otherwise consent in writing,
furnish to the Collateral Agent, and unless the L/C Bank
shall otherwise consent in writing, furnish to the L/C Bank:
(a) as soon as available, and in any event not
later than 50 days following the end of each quarterly
accounting period, unaudited consolidated statements of
income and cash flows for the Borrower for the period from
the beginning of the current fiscal year to the end of such
quarterly period, and an unaudited consolidated balance
sheet of the Borrower as at the end of such quarterly
period, setting forth in each case figures for the
corresponding period in the preceding fiscal year (if any),
all in reasonable detail and certified by the chief
financial officer of the Borrower, subject to changes
resulting from normal year-end adjustments;
(b) as soon as practicable, and in any event not
later than 95 days following the end of each annual
accounting period, audited consolidated statements of income
and cash flows for the Borrower for such year, and a
consolidated balance sheet of the Borrower and its
subsidiaries as at the end of such year, setting forth in
each case corresponding figures from the preceding annual
financial statements (if any), all in reasonable detail and
certified by a firm of "Big 6" independent accountants;
(c) to the extent not already delivered to the
Collateral Agent pursuant to the terms of this Agreement,
promptly upon receipt thereof, copies of (i) all financial
statements delivered to the Borrower by the Seller pursuant
to the Receivables Purchase Agreement, and (ii) all other
reports and other written information not specified above
which are required to be delivered by the Seller
(individually, or as Servicer) to the Borrower pursuant to
the terms of the Receivables Purchase Agreement;
(d) as soon as possible and in any event within
five Business Days after the occurrence of each Event of
Default or Unmatured Event of Default, the statement of the
chief financial officer of the Borrower setting forth
details of such Event of Default or Unmatured Event of
Default and the action which the Borrower proposes to take
with respect thereto;
(e) promptly after the filing or receiving
thereof, copies of all reports and notices with respect to
any Reportable Event defined in Article IV of ERISA which
the Borrower or any Affiliate files under ERISA with the IRS
or the PBGC or the DOL or which the Borrower receives from
the PBGC;
(f) as soon as possible and in any event within
two Business Days after the occurrence of any proposed
change in Credit Standards and Collections Policies, the
statement of the chief financial officer of the Borrower
setting forth details of such change in Credit Standards and
Collections Policies;
(g) promptly after the filing or receiving
thereof, copies of all reports and notices with respect to
any Reportable Event defined in Article IV of ERISA which
the Borrower or any Affiliate files under ERISA with the IRS
or the PBGC or the DOL or which the Borrower receives from
the PBGC;
ARTICLE VII
SECURITY INTEREST
-----------------
SECTION 7.01. Grant of Primary Lien. To secure
---------------------
the prompt and complete payment when due of the Obligations
and the timely performance by the Borrower of all of the
covenants and obligations to be performed by it pursuant to
this Credit Agreement in favor of any of the Collateral
Agent, the Administrative Agent, Triple-A and/or the Surety
(but not including any covenant or obligation to be
performed in favor of the Collateral Agent for the sole
benefit of the L/C Bank), the Borrower hereby assigns and
pledges to the Collateral Agent and grants to the Collateral
Agent, on behalf of the Collateral Agent, the Administrative
Agent, Triple-A, and the Surety, but not on behalf of the
L/C Bank, a security interest (the "Primary Lien") in all of
------------
the Borrower's right, title and interest in, to and under
all property and all interests in property of the Borrower
of any kind or nature, whether tangible or intangible,
whether real or personal, and whether now owned or existing
or hereafter arising or acquired and wheresoever located
(collectively, the "Collateral"), including, without
----------
limitation, the following property and interests in
property:
(a) all Pledged Contracts, together with all
other Transferred Assets;
(b) the Receivables Purchase Agreement, the
Administrative Services, Lease and Operating
Agreement and the Remarketing Agreement,
including, without limitation, all monies due and
to become due to the Borrower from the Seller or
FCI under or in connection therewith (including,
without limitation, all interest and finance
charges for late payments accrued thereon and
proceeds of any liquidation or sale of Pledged
Contracts or resale of VOIs or Lots and all other
Collections on the Pledged Contracts);
(c) all computer software, tapes, disks and other
electronic media, books, records and documents relating
to the Pledged Contracts; including, without
limitation, any such software, electronic media, books,
records and documents used
(i) to account for and service the
Transferred Assets,
(ii) in the management of any VOI Regimes,
and the VOIs and Lots located within
such VOI Regimes,
(iii) in the monitoring of accounts
receivables and third party contracts
relating to the management of properties
located within any VOI Regime, and
(iv) in managing and operating the FairShare
Plus Program,
and all relevant licenses, sublicenses, contracts
(including, without limitation, service and maintenance
contracts), warranties and guaranties relating to any
such software, electronic media, books, records and
documents, as the case may be (including, without
limitation, all such rights arising under such
software, electronic media, books, records and
documents, and any related licenses, sublicenses,
contracts, warranties and guaranties transferred by FAC
to the Borrower pursuant to the Receivables Purchase
Agreement);
(d) the 1994 Interest Rate Hedge, the 1994
Interest Rate Hedge Assignment, the 1996 Interest Rate
Hedge, any other Interest Rate Hedge entered into from
time to time hereafter, any replacement agreement for
any thereof, and any other contract, instrument or
agreement in which the Borrower has any interest or
rights, pursuant to which the Borrower (or its assignor
or predecessor in interest) has hedged against
movements in interest rates, including, without
limitation, all monies due and to become due to the
Borrower (or its assignor or predecessor in interest)
thereunder or in connection therewith;
(e) the Collection Account, the Spread
Account, the L/C Cash Collateral Account and all
other bank and similar accounts established, in
whole or in part, for the benefit of any of the
Borrower, the Collateral Agent, the Administrative
Agent, Triple-A, the Surety and/or the L/C Bank,
all funds held therein or in such other accounts,
all financial assets, investment property and
other investments from time to time on deposit, or
made with proceeds, in any such accounts, and all
income arising from such funds held in any such
accounts or from such financial assets, investment
property and other investments;
(f) all Post Office Boxes, Lock-Box
Accounts, and all other bank and similar accounts
into which Collections in respect of the Pledged
Contracts are or are intended to be deposited, and
all funds held therein or in such other accounts;
(g) all certificates and instruments if any, from
time to time representing or evidencing any of the
foregoing property described in clauses (a) through (f)
above;
(h) any accounts, inventory, machinery,
equipment, fixtures, general intangibles, chattel
paper, contract rights, investment property, financial
assets, instruments and documents, to the extent not
described in any of clauses (a) through (g) above;
(i) all proceeds of the foregoing property
described in clauses (a) through (h) above, any
security therefor, and all interest, dividends,
cash, instruments, financial assets, investment
property and other property from time to time
received, receivable or otherwise distributed in
respect of, or in exchange for or on account of
the sale, condemnation or other disposition of,
any or all of the then existing Collateral, and
including all payments under Insurance Policies
(whether or not any of Triple-A, the Surety, the
L/C Bank or the Collateral Agent is the loss payee
thereof) or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or
otherwise with respect to any of the Collateral;
and
(j) all other monies or property of the
Borrower coming into the actual possession,
custody or control of the Collateral Agent, the
Administrative Agent, the Surety, Triple-A or the
L/C Bank (whether for safekeeping, deposit,
custody, pledge, transmission, collection or
otherwise).
The Primary Lien shall constitute a lien which is
separate and distinct from the L/C Bank Lien.
SECTION 7.02. Continuing Liability of the
---------------------------
Borrower. The security interests described above in Section
-------- -------
7.01 and in Section 8.07 are granted as security only and
---- ------------
shall not subject any of the Collateral Agent, the
Administrative Agent, Triple-A, the Surety or the L/C Bank,
or any of their respective assigns to, or transfer or in any
way affect or modify, any obligation or liability of the
Borrower with respect to, any of the Collateral or any
transaction in connection therewith. None of the Collateral
Agent, the Administrative Agent, Triple-A, the Surety or the
L/C Bank, or their respective assigns, shall be required or
obligated in any manner to make any inquiry as to the nature
or sufficiency of any payment received by it or the
sufficiency of any performance by any party under any such
obligation, or to make any payment or present or file any
claim, or to take any action to collect or enforce any
performance or the payment of any amount thereunder to which
any such Person may be entitled at any time.
SECTION 7.03. Filings; Further Assurances.
---------------------------
(a) (1) On or prior to the Contract Grant Date
corresponding with the Effective Restatement Date, the
Borrower shall have caused, at its sole expense, the UCC-1
financing statements, assignments thereof and other items
referred to in the Closing Lists set forth in Exhibit C
---------
hereto as items which are required to be filed or recorded
on or prior to such Contract Grant Date, to be so filed or
recorded in the appropriate offices, and (2) within five
Business Days after such Contract Grant Date, the Borrower
shall cause each of the other UCC-1 financing statements,
UCC-2 and UCC-3 amendment and/or termination statements, and
other similar items referred to in the Closing List set
forth in Exhibit C hereto to be filed or recorded within
---------
five Business Days after such Contract Grant Date, and in
each such case shall thereafter promptly cause evidence of
such filings to be delivered to the Collateral Agent and the
L/C Bank.
(b) (1) On or prior to each Contract Grant Date,
the Borrower shall cause, at its sole expense, the UCC-1
financing statements, assignments thereof and any other
items which are required by the Collateral Agent (in the
exercise of its sole discretion) to be filed or recorded on
or prior to such Contract Grant Date, and which are
identified by the Collateral Agent to the Borrower in
writing (including, without limitation, by way of inclusion
on Exhibit D hereto) prior to such Contract Grant Date, to
---------
be so filed or recorded in the appropriate offices, and (2)
within five Business Days after such Contract Grant Date,
the Borrower shall cause each of the other UCC-1 financing
statements, assignments thereof, UCC-2 and UCC-3 termination
statements, and any other similar items which are required
by the Collateral Agent (in the exercise of its sole
discretion) to be filed or recorded in connection with the
related Grant, to be so filed or recorded in the appropriate
offices, and in each such case shall thereafter promptly
cause evidence of such filings to be delivered to the
Collateral Agent and the L/C Bank. In each such case, such
required filings and recordings shall include financing
statements in favor of the Collateral Agent, as secured
party, for the benefit of itself, the Administrative Agent,
Triple-A and the Surety, as well as financing statements in
favor of the Collateral Agent, as secured party for the
benefit of the L/C Bank.
(c) The Borrower shall, at its sole expense, from
time to time prepare, execute and deliver, or cause to be
prepared, executed and delivered, all such financing
statements, continuation statements, instruments of further
assurance and other instruments, in such forms, and shall
take such other actions, as shall be required by the
Collateral Agent or as the Collateral Agent otherwise deems
necessary or advisable to perfect the Primary Lien and the
L/C Bank Lien in the Collateral. The Servicer agrees, at
its sole expense, to cooperate with and assist the Borrower
in taking any such action (whether at the request of the
Borrower or the Collateral Agent). Without limiting the
foregoing, the Borrower shall from time to time, at its sole
expense, execute, file, deliver and record all such
supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further
assurance, or other statements, specific assignments or
other instruments or documents and take any other action
that either of the Servicer or the Collateral Agent deems
necessary or advisable to: (i) Grant more effectively all or
any portion of the Collateral; (ii) maintain or preserve the
Primary Lien and the L/C Bank Lien Granted hereunder (and
the priority thereof) or carry out more effectively the
purposes hereof; (iii) perfect, publish notice of, or
protect the validity of any Grant made or to be made
pursuant to this Credit Agreement; (iv) enforce any of the
Pledged Contracts or any of the other Collateral (including,
without limitation, by cooperating with the Collateral
Agent, at the expense of the Borrower, in filing and
recording such UCC financing statements against such
Obligors as the Collateral Agent shall deem necessary or
advisable from time to time); (v) preserve and defend title
to any Pledged Contracts on all or any other part of the
Collateral, and the rights of the Collateral Agent in such
Pledged Contracts or other Collateral, against the claims of
all Persons and parties; or (vi) pay any and all taxes
levied or assessed upon all or any part of the Collateral.
The Borrower hereby designates the Servicer its agent and
attorney-in-fact to execute, upon the Borrower's failure to
do so, any financing statement, continuation statement or
other instrument required pursuant to this Section 7.03 or
------------
required, as indicated in any Opinion of Counsel delivered
pursuant to Section F.1.a. or Section F.4. of the Closing
List set forth at Exhibit C hereto, or pursuant to Section
---------
F.1 or F.3 of the Closing List set forth in Exhibit D
---------
hereto, to maintain the Primary Lien and the L/C Bank Lien
and security interests granted hereunder with respect to the
Collateral.
(d) The Borrower shall, on or prior to the date
of Grant of any Contracts hereunder, deliver all original
copies of the Contract (other than in the case of any
Contracts not required to be in the relevant Contract File
pursuant to Section 4.02(x)), together with related Contract
---------------
File, to the Custodian, in suitable form for transfer by
delivery, or accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent. In the event that the
Borrower receives any other instrument or any writing which,
in either event, evidences a Pledged Contract or other
Collateral, the Borrower shall deliver such instrument or
writing to the Custodian on behalf of the Collateral Agent,
the Administrative Agent, Triple-A, the Surety and/or the
L/C Bank within one Business Day after the Borrower's
receipt thereof, in suitable form for transfer by delivery,
or accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory
to the Collateral Agent.
(e) The Borrower hereby authorizes the Collateral
Agent, and gives the Collateral Agent its irrevocable power
of attorney (which authorization is coupled with an interest
and is irrevocable), in the name of the Borrower or
otherwise, to execute, deliver, file and record any
financing statement, continuation statement, specific
assignment or other writing or paper and to take any other
action that Triple-A or the L/C Bank, in its sole
discretion, may deem necessary or appropriate to further
perfect the Primary Lien and/or L/C Bank Lien created
hereby. The Borrower agrees that a carbon, photographic,
photostatic, or other reproduction of this Credit Agreement
or of a financing statement is sufficient as a financing
statement where permitted by applicable law. Any expenses
incurred by the Collateral Agent pursuant to the exercise of
its rights under this Section 7.03(e) shall be for the sole
--------------
account and responsibility of the Borrower, and shall
constitute "Carrying Costs" payable by the Borrower
hereunder.
SECTION 7.04. Place of Business; Change of Name.
---------------------------------
As of the date hereof, the chief executive office of the
Borrower and principal place of business and the location
where the Borrower maintains all Records relating to the
Pledged Contract and the other Collateral is listed at
Section 4.01(k). The Borrower will not (x) change its
--------------
principal place of business or chief executive office from
the location listed in such Section 4.01(k), (y) change its
---------------
name, identity or corporate structure or (z) change the
location of its Records relating to the Collateral from the
location listed in such Section 4.01(k), unless in any such
--------------
event the Borrower shall have given the Collateral Agent at
least thirty (30) days' prior written notice thereof and
shall have taken all action necessary or reasonably
requested by the Collateral Agent to amend its existing
financing statements and continuation statements so that
they are not misleading and to file additional financing
statements in all applicable jurisdictions to perfect the
Primary Lien of the Collateral Agent on behalf of itself,
the Administrative Agent, Triple-A, and the Surety in all of
the Collateral and the L/C Bank Lien of the Collateral Agent
on behalf of the L/C Bank in all of the Collateral.
SECTION 7.05. Lock-Box Accounts; Collection
-----------------------------
Account. The Borrower has established and shall maintain a
-------
system of operations, accounts and instructions with respect
to the Obligors and Lock-Box Accounts at the Lock-Box Banks
as described in Sections 4.01(l), 5.01(g), 5.01(t) and
---------------- ------ ------
5.02(d), and shall establish and maintain the Collection
------
Account as provided in Section 7.06. Pursuant to the Lock-
------------
Box Agreement to which it is party, each Lock-Box Bank shall
be irrevocably instructed to initiate an electronic transfer
of all funds on deposit in the relevant Lock-Box Account to
the Collection Account on the Business Day on which such
funds become available. None of FCI, FAC or the Borrower,
nor any Person claiming by, through or under FCI, FAC or the
Borrower, shall have any control over the use of, or any
right to withdraw any item or amount from, any Lock-Box
Account or the Collection Account, except in the case of FAC
acting in its capacity as the Servicer, to the extent
expressly provided in the Lock-Box Agreements or the
Collection Account Agreement, respectively. The Collateral
Agent on behalf of Triple-A, the Surety and the L/C Bank is
hereby irrevocably authorized and empowered, as the
Borrower's attorney-in-fact, to endorse any item deposited
in a Post Office Box, or presented for deposit in any Lock-
Box Account or the Collection Account, requiring the
endorsement of the Borrower, which authorization is coupled
with an interest and is irrevocable.
SECTION 7.06. Collection Account. (a) On or
------------------
prior to the Closing Date, the Borrower shall establish and
maintain, or cause to be established and maintained, for the
sole and exclusive benefit of the Collateral Agent on behalf
of the Collateral Agent, the Administrative Agent, Triple-A,
the L/C Bank and the Surety, and their respective assigns, a
cash collateral account (the "Collection Account"). The
------------------
Collection Account shall be a special purpose segregated
account, designated as the "Capital Markets Assurance
Corporation Collateral Agent Collection Account", maintained
either (i) with FNBB, for so long as FNBB maintains a short-
term unsecured indebtedness rating of no less than A-2 by
S&P and P-1 by ▇▇▇▇▇'▇, or a Depository Institution which is
an Eligible Depository Institution, or (ii) in a segregated
trust account in the trust department of a Depository
Institution, and shall be under the sole dominion and
control of, and in the name of, the Collateral Agent, acting
on behalf of itself, the Administrative Agent, Triple-A, the
Surety and the L/C Bank. In the event that the Collection
Account Bank ceases to satisfy the requirements set forth in
clause (i) above, and such funds therein are not immediately
thereafter transferred to a segregated trust account as
provided in clause (ii) above, the Collateral Agent shall be
entitled to terminate the Collection Account and the related
Collection Account Agreement, and transfer all funds and
investments held therein to a new Collection Account at an
Eligible Depository Institution, subject to a new Collection
Account Agreement in form and substance satisfactory to the
Collateral Agent.
All funds held in the Collection Account,
including investment earnings thereon, may be invested in
Permitted Investments at the direction of the Servicer;
provided, however, that the Collateral Agent shall have the
sole right, upon written notice to the Collection Account
Bank, to restrict the maturities of any Permitted
Investments held in the Collection Account and to direct the
withdrawal or liquidation of any such Permitted Investments,
to be used solely for the purposes and in the order of
priority set forth at Section 7.06(d).
---------------
The taxpayer identification number associated with
the Collection Account shall be that of the Borrower and the
Borrower will report for federal, state and local income tax
purposes the income, if any, earned on funds in the
Collection Account.
The Collateral Agent shall have the sole and
exclusive right to withdraw or order a transfer of funds
from the Collection Account, in all events in accordance
with the terms and provisions of this Section 7.06 and the
------------
information most recently delivered to the Collateral Agent
pursuant to Section 6.01; provided, however, that the
------------ -------- -------
Collateral Agent shall, pursuant to the terms of the
Collection Account Agreement, and absent further
instructions to the Collection Account Bank to the contrary
from the Collateral Agent (which instructions the Collateral
Agent may give at any time), permit the Servicer to make
withdrawals or order transfers of funds from the Collection
Account, in all events in accordance with the provisions of
this Section 7.06 and the information most recently
------------
delivered pursuant to Section 6.01. In addition,
------------
notwithstanding anything in the foregoing to the contrary,
the Servicer shall be entitled on a daily basis (absent
further instructions to the Collection Account Bank to the
contrary from the Collateral Agent (which instructions the
Collateral Agent may give at any time)) to direct the
Collection Account Bank to make withdrawals or order
transfers of funds from the Collection Account, to the
extent such funds either (i) have been mistakenly deposited
into the Collection Account (including, without limitation,
funds representing Assessments or dues payable by Obligors
to property owners' associations or other entities), or (ii)
relate to items subsequently returned for insufficient funds
or as a result of stop payments. In the case of any
withdrawal or transfer pursuant to the foregoing sentence,
the Servicer shall provide the Collateral Agent with notice
of such withdrawal or transfer, together with reasonable
supporting details, on the next Settlement Report to be
delivered by the Servicer following the date of such
withdrawal or transfer (or in such earlier written notice as
may be requested by the Collateral Agent from the Servicer
from time to time). Notwithstanding anything herein to the
contrary, the Collateral Agent shall be entitled on a daily
basis to direct the Collection Account Bank to make
withdrawals or order transfers of funds from the Collection
Account, in the amount of all reasonable and appropriate
out-of-pocket costs and expenses incurred by the Collateral
Agent in connection with any misdirected funds described in
clause (i) of the second foregoing sentence, which costs and
expenses shall constitute Obligations hereunder.
(b) All funds in the Collection Account shall be
held in trust for the benefit of the Collateral Agent, the
Administrative Agent, Triple-A, the Surety and the L/C Bank
and, except as otherwise provided in Section 7.06(d) below
--------------
with respect to all periods from and after the Liquidation
Trigger Date, shall be used on each day solely for the
following purposes and in the following order of priority:
(i) If such day is a Settlement Date,
provided that no Servicer Default shall have occurred
and be continuing, to repay to the Servicer the amount
of any unpaid Servicer Advances with respect to
formerly Delinquent Contracts to the extent identified
by the Servicer in the relevant Settlement Report as
having been recovered from the relevant Obligor during
the most recently concluded Calculation Period and paid
into the Collection Account;
(ii) To pay any Carrying Costs which are then
due and payable;
(iii) To be retained in the Collection Account
to the extent of any accrued and unpaid Carrying Costs
which are not then due and payable;
(iv) If such day is a Settlement Date, to
remit to the Surety to the extent of any Reimbursement
Obligations then outstanding and unpaid;
(v) If such day is a Settlement Date (or in
the discretion of the Borrower, on the Business Day
immediately preceding such Settlement Date), to make
any mandatory repayments of the Triple-A Loans as
required in Section 2.07(b);
--------------
(vi) If such day is a Settlement Date, to
remit to the Spread Account to the extent of any Spread
Account Shortfall then in effect;
(vii) If such day is a Settlement Date, to pay
any other Obligations which may be due and payable at
such time;
(viii) If such day is a Settlement Date, to pay
any other L/C Bank Obligations which may be due and
payable at such time;
(ix) To make any voluntary prepayments of the
Triple-A Loans as provided in Section 2.07(a), upon the
---------------
direction of the Borrower;
(x) If such day is a Settlement Date, upon
instructions of the Servicer, to be remitted to the
Borrower for any purposes not otherwise prohibited by
this Credit Agreement, including, without limitation,
(1) the payment of outstanding amounts of accrued
interest and principal then due and payable under the
Subordinated Note (or the prepayment of outstanding
amounts of principal then outstanding under the
Subordinated Note), (2) the payment of any Dividend to
the extent permitted pursuant to the terms of Section
-------
5.02(r) hereof, (3) the payment of any and all tax
-------
obligations (and imputed tax obligations) then due and
payable by the Borrower, and (4) interest on Pledged
Contracts which was accrued and unpaid on the Contract
Grant Date relating thereto, but subsequently deposited
into the Collection Account; and
(xi) To be retained in the Collection
Account.
Each of the Borrower and the Servicer, in making any request
for funds to be withdrawn from the Collection Account (or,
in the case of the Servicer, in directing the withdrawal of
funds from the Collection Account pursuant to Section
-------
7.06(a) and in accordance with the terms of the Collection
------
Account Agreement), shall certify to each of the Collateral
Agent and the Collection Account Bank that the funds will be
used for one of the purposes described above in this Section
-------
7.06(b).
------
If, on any Business Day prior to the Liquidation
Trigger Date, the funds on deposit in the Collection Account
and available for withdrawal under clause (ii) above are
----------
less than the amount of the obligations described in such
clause, such available funds shall be allocated in the
priority set forth in Section 7.06(c) below; if, on any such
--------------
Business Day, the funds on deposit in the Collection Account
and available for withdrawal under clause (vii) above are
-----------
less than the amount of the obligations described in such
clause, such available funds shall be allocated to the
Persons to whom such obligations are owed ratably according
to the respective amounts owed.
(c) On each Business Day prior to the Liquidation
Trigger Date, to the extent that the funds on deposit in the
Collection Account and available under clause (ii) of
----------
Section 7.06(b) are insufficient to pay all Carrying Costs
--------------
which are then due and payable, such funds shall be applied
to the Carrying Costs in the following order of priority:
(i) To pay any accrued and unpaid interest
on the Triple-A Loans (including in any such amount,
the accrued and unpaid CP Dealer Fee then outstanding)
then due and payable and to be retained in the
Collection Account to the extent such amount is accrued
but not then due and payable;
(ii) To pay any accrued and unpaid fees owing
under the Fee Letter then due and payable and to be
retained in the Collection Account to the extent such
amount is accrued but not then due and payable;
(iii) To pay any accrued and unpaid expenses
of the Collateral Agent then due and payable and to be
retained in the Collection Account to the extent such
amount is accrued but not then due and payable;
(iv) To pay any accrued and unpaid fees owing
under the L/C Fee Letter then due and payable and to be
retained in the Collection Account to the extent such
amount is accrued but not then due and payable;
(v) To pay any accrued and unpaid Servicing
Fee then due and payable and to be retained in the
Collection Account to the extent such amount is accrued
but not then due and payable;
(vi) To pay all other Carrying Costs then due
and payable (if any), other than the ordinary course
expenses of the Borrower and to be retained in the
Collection Account to the extent such amount is accrued
but not then due and payable; and
(vii) To pay ordinary course expenses of the
Borrower to the extent the same are due or past due.
If, on any such Business Day, the funds on deposit in the
Collection Account and available for withdrawal under any of
clauses (ii), (vi) or (vii) above are less than the amount
------- ---- --- ---
of the due and unpaid obligations described in such clause,
such available funds shall be allocated to the Persons to
whom such obligations are owed ratably according to the
respective amounts owed.
(d) On each Business Day from and after the
Liquidation Trigger Date, notwithstanding anything herein or
elsewhere to the contrary, funds shall be withdrawn on any
day from the Collection Account solely upon direction of the
Collateral Agent to be used solely for the following
purposes and in the following order of priority:
(i) To pay any accrued and unpaid Servicing
Fee then due and payable (together with any accrued and
unpaid additional compensation then due and payable to
a Successor Servicer as agreed to between the
Collateral Agent and the Successor Servicer in
accordance with Section 11.02(c)), and to be retained
---------------
in the Collection Account to the extent such fee (or
such additional compensation) is accrued but not then
due and payable (if the Servicer is a Person other than
any of FCI, FAC or the Borrower, or any Affiliate of
any thereof);
(ii) To pay any accrued and unpaid fee owing
to the Custodian then due and payable, and to be
retained in the Collection Account to the extent such
fee is accrued but not then due and payable;
(iii) To pay any accrued and unpaid expenses
of the Collateral Agent then due and payable, and to be
retained in the Collection Account to the extent such
amount is accrued but not then due and payable;
(iv) To pay any accrued and unpaid interest
on the Triple-A Loans (including in any such amount,
the accrued and unpaid CP Dealer Fee then outstanding)
then due and payable, and to be retained in the
Collection Account to the extent such amount is accrued
but not then due and payable;
(v) To pay any accrued and unpaid fees owing
under the Fee Letter then due and payable, and to be
retained in the Collection Account to the extent such
amount is accrued but not then due and payable;
(vi) To pay any other accrued and unpaid
Obligations in respect of Carrying Costs then due and
payable, and to be retained in the Collection Account
to the extent such amount is accrued but not then due
and payable;
(vii) To pay any other accrued and unpaid
Obligations which have not been paid pursuant to
clauses (i) through (vi) above (except in respect of
---------- ----
Obligations described in clauses (viii), (ix)
------------- ----
(excluding any portion of Reimbursement Obligations in
respect of accrued and unpaid interest, which shall be
paid pursuant to this clause (vii)) and (xii) below);
------------ -----
(viii) To repay to the Surety the amount of any
Reimbursement Obligations then outstanding;
(ix) To repay the aggregate outstanding
principal amount of any Triple-A Loans then
outstanding;
(x) To pay any outstanding L/C
Reimbursement Obligations, or any fees owing to
the L/C Bank under the L/C Fee Letter;
(xi) To pay any other accrued and unpaid
L/C Bank Obligations owing to the L/C Bank under
the Credit Agreement;
(xii) To pay any other accrued and unpaid
Carrying Costs which are due and payable but have not
been paid pursuant to clauses (i) through (xi) above
---------- ----
(except with respect to the Carrying Costs described in
clause (xiii) below), and to be retained in the
------------
Collection Account to the extent such amounts are
accrued but not then due and payable;
(xiii) To pay any accrued and unpaid Servicing
Fee owed to any of FCI, FAC or the Borrower, or any
Affiliate of any thereof; and
(xiv) To repay any unpaid Servicer Advances
owing to FCI or any of its Affiliates as Servicer; and
(xv) To be retained in the Collection Account
and not subject to withdrawal, transfer or remittance
instructions of the Servicer; provided, however any
-------- -------
funds remaining on deposit in the Collection Account
after the later of the Termination Date and the final
payment, in full and in cash, of all of the foregoing
Obligations, L/C Bank Obligations, and other
obligations, fees and expenses, shall, at the direction
of the Collateral Agent, be remitted to the Borrower or
as otherwise required by law.
If, on any such Business Day, the funds on deposit in the
Collection Account and available for withdrawal under any of
clauses (v), (vi), (vii), or (xii) above are less than the
---------- --- ---- ----
amount of the due and payable obligations described in such
clause, such available funds shall be allocated to the
Persons to whom such obligations are owed ratably according
to the respective amounts owed.
SECTION 7.07. Spread Account. (a) On or prior
--------------
to the Closing Date, the Borrower shall establish and
maintain, or cause to be established and maintained, for the
sole and exclusive benefit of the Collateral Agent for the
benefit of itself, the Administrative Agent, Triple-A, the
Surety, the L/C Bank and their respective assigns, a cash
collateral account (the "Spread Account"). The Spread
--------------
Account shall be a special purpose segregated account,
designated as the "Capital Markets Assurance Corporation
Collateral Agent Spread Account", maintained either (i) with
FNBB, for so long as FNBB maintains a short-term unsecured
indebtedness rating of no less than A-2 by S&P and P-1 by
▇▇▇▇▇'▇, or a Depository Institution which is an Eligible
Depository Institution, or (ii) in a segregated trust
account in the trust department of a Depository Institution,
and shall be under the sole dominion and control of, and in
the name of, the Collateral Agent. In the event that the
Spread Account Bank ceases to satisfy the requirements set
forth in clause (i) above, and such funds therein are not
immediately thereafter transferred to a segregated trust
account as provided in clause (ii) above, the Collateral
Agent shall be entitled to terminate the Spread Account and
the Spread Account Agreement, and transfer all funds and
investments held therein to a new Spread Account at an
Eligible Depository Institution, subject to a new Spread
Account Agreement in form and substance satisfactory to the
Collateral Agent.
All funds held in the Spread Account, including
investment earnings thereon, may be invested in Permitted
Investments at the direction of the Servicer; provided,
--------
however, that (x) upon written notice from the Collateral
-------
Agent to the Spread Account Bank, the Collateral Agent shall
have the sole right to restrict the maturities of any
Permitted Investments held in the Spread Account, and (y)
from and after the date after the Termination Date on which
there are no remaining available funds on deposit in the
Collection Account, the Collateral Agent shall have the sole
right to direct the withdrawal or liquidation of any such
Permitted Investments to be used solely for the purposes and
in the applicable order of priority set forth at Section
-------
7.06 hereof.
----
(b) The Borrower shall cause the Spread Account
to be funded, at any time, in the amount of the Spread
Account Requirement then in effect.
(c) The Collateral Agent shall have the sole and
exclusive right to withdraw or order a transfer of funds
from the Spread Account, in all events in accordance with
the terms and provisions of Section 7.06 and this Section
------------ ------
7.07, and the information most recently delivered to the
---
Collateral Agent pursuant to Section 6.01; provided, however, that prior to
----------- -------- -------
the occurrence of the Termination Date, on each Business Day
next succeeding a Settlement Date, the Servicer shall
instruct the Spread Account Bank to transfer from the Spread
Account to the Servicer (or otherwise in accordance with the
instructions of the Servicer) an amount of funds held in the
Spread Account which shall in no event be greater than the
excess (if any) on such Business Day (the "Spread Account
--------------
Excess") of the then outstanding balance of available funds
------
held in the Spread Account over the Spread Account
Requirement in effect as of the opening of Business on such
Business Day (after giving effect to all transactions and
fund transfers required to take place hereunder pursuant on
the next preceding Settlement Date). Any amount so
transferred shall constitute an additional Servicing Fee
paid to the Servicer, and shall not decrease the amount of
any Servicing Fee otherwise payable to the Servicer in
accordance with Section 9.09. The Servicer, in making any
------------
such instructions for the transfer of funds from the Spread
Account, shall simultaneously provide each of the Collateral
Agent and the Spread Account Bank with a certificate of a
Servicing Officer as to the existence and size of any Spread
Account Excess.
(d) On each Business Day from and after the
occurrence, and during the continuance, of an Event of
Default, the Collateral Agent shall have the sole right to
direct the Spread Account Bank to withdraw all or any
portion of the funds on deposit the Spread Account for
transfer to the Collection Account, to be used solely for
the purposes and in the applicable order of priority set
forth at Section 7.06(d) hereof.
--------------
(e) Any funds remaining in the Spread Account
after the later of the Termination Date and the final
payment, in full and in cash, of all of the Obligations and
L/C Bank Obligations outstanding hereunder shall, at the
direction of the Collateral Agent, be remitted to the
Borrower or as otherwise required by law.
(f) The taxpayer identification number associated
with the Spread Account shall be that of the Borrower and
the Borrower will report for federal, state and local income
tax purposes the income, if any, earned on funds in the
Spread Account.
SECTION 7.08. Accounts, Generally. Any deposit
-------------------
made into any of the Lock-Box Accounts, the Collection
Account, the L/C Cash Collateral Account or the Spread
Account hereunder shall be irrevocable, and shall be held in
such account in trust by the Collateral Agent hereunder,
together with all interest thereon, and applied solely as
provided herein.
SECTION 7.09. Rights of Obligors and Release of
---------------------------------
Contract Files.
--------------
(a) Notwithstanding any other provision
contained in this Credit Agreement, including the Collateral
Agent's remedies pursuant hereto, the rights of any Obligor
to any Lot or VOI subject to a Pledged Contract shall, so
long as such Obligor is not in default thereunder, be
superior to those of the Collateral Agent and the holder of
the Triple-A Note hereunder, and the Collateral Agent and
the holder of the Triple-A Note shall not, so long as such
Obligor is not in default thereunder, interfere with such
Obligor's use and enjoyment of the Lot or VOI subject
thereto.
(b) If pursuant to the terms of this Credit
Agreement, the Collateral Agent shall acquire through
foreclosure the Borrower's interest in any portion of the
Lot or VOI subject to a Pledged Contract, the Collateral
Agent hereby specifically agrees to release or cause to be
released any Lot or VOI from any Lien of the Collateral
Agent, the Administrative Agent, the Surety, the Triple-A or
L/C Bank upon the request of the Obligor (including such
Obligor's heirs, successors and assigns) to the Pledged
Contract, upon completion of all payments and the
performance of all the terms and conditions required to be
made and performed by such Obligor under such Pledged
Contract, and each of the Collateral Agent, the
Administrative Agent, the Surety, Triple-A or the L/C Bank
hereby consents to any such release by, or at the direction
of, the Collateral Agent.
(c) At such time as an Obligor has paid in full
the purchase price or the requisite percentage of the
purchase price for deeding pursuant to a Pledged Contract
and has otherwise fully discharged all of such Obligor's
obligations and responsibilities required to be discharged
as a condition to deeding, the Servicer shall notify the
Collateral Agent by a certificate substantially in the form
attached hereto as Exhibit J (which certificate shall
include a statement to the effect that all amounts received
in connection with such payment have been deposited in the
Collection Account) of a Servicing Officer and shall request
delivery to it of the related Contract Files. Upon receipt
of such certificate and request or at such earlier time as
is required by applicable law, the Collateral Agent (a)
shall promptly direct the Custodian to release the Contract
Files to the Servicer (in all cases in accordance with the
provisions of Section 5.01(n)), (b) shall approve the
--------------
release by the Nominee of the related deed of title, and any
documents and records maintained in connection therewith, to
the Obligor as provided in the Title Clearing Agreement,
provided that title to the VOI or Lot has not already been
deeded to the Obligor, and/or (c) shall execute such
documents and instruments of transfer and assignment and
take such other action as is necessary to release its
interest in the VOI or Lot subject to deeding (in the case
of any Pledged Contract which has been paid in full). If a
deed has been delivered to an Obligor and such Obligor's
obligations and responsibilities are not fully discharged,
the Servicer shall cause such Obligor to execute a Mortgage
in favor of FCI encumbering the related VOI or Lot, each of
FCI, FAC and the Borrower shall cause such Mortgage to be
promptly collaterally assigned to the Collateral Agent
pursuant to one or more Assignments of Mortgage (each such
Mortgage constituting additional Collateral granted by the
Borrower hereunder), and the Servicer shall, promptly
followi such Assignment of Mortgage relating to VOIs or Lots
located in Developments in the States of Arkansas, Colorado
or Georgia (or in any other State with respect to which an
Opinion of Counsel required to be delivered in connection
with any Grant hereunder states, or the Collateral Agent
otherwise directs, that recordation is necessary or
advisable to perfect or protect the interest of the
Collateral Agent in such Mortgages in such State), cause
each such Assignment of Mortgage to be recorded in all
proper offices. The Servicer shall cause each Contract File
or any document therein so released which relates to a
Pledged Contract for which the Obligor's obligations have
not been fully discharged to be returned to the Custodian
for the sole benefit of the Collateral Agent when the need
therefor by the Servicer no longer exists.
SECTION 7.10. Recordation of Assignments. The
--------------------------
Servicer shall, promptly following each Contract Grant Date,
cause to be recorded in the proper offices all Assignments
of Mortgages constituting Contract Conveyance Documents
relating to Mortgages Granted to the Collateral Agent on
such date, to the extent that the related VOIs or Lots are
located in Developments in the States of Arizona, Arkansas,
Colorado or Georgia or in any State with respect to which an
Opinion of Counsel required to be delivered in connection
with such Grant states that recordation is necessary or
advisable to perfect or protect the interest of the
Collateral Agent in such Mortgages in such State.
SECTION 7.11. Releases.
--------
(a) Subject to Section 7.11(d), the Borrower
--------------
shall, prior to the occurrence of a Liquidation Trigger Date
(i) cause the release of any Pledged Contract
from each of the Primary Lien and the L/C Bank Lien of
this Credit Agreement by making all of the payments and
allocations required to be made under Section 7.06(b)
--------------
on the first Settlement Date (the "Notice Settlement
-----------------
Date") occurring after the Borrower or the Servicer has
-----
become aware, or has received written notice from the
Collateral Agent, of any uncured breach with respect to
such Pledged Contract of a representation or warranty
of the Borrower in any of Sections 4.01(y), 4.02, 4.03
--------------- ---- ----
or 4.04 (each such Pledged Contract, a "Defective
---- ---------
Contract" and each such date on which a release occurs,
-------
a "Defective Contract Release Date"); and
-------------------------------
(ii) cause either of FAC or FCI to satisfy
its corresponding repurchase obligations under the
Receivables Purchase Agreement in respect of such
Defective Contract;
provided, that all of the payments and allocations
--------
required to be made under Section 7.06(b) on a Notice
---------------
Settlement Date shall be made on the basis of a
Borrowing Base calculation which gives effect to the
status of all Pledged Contracts which became "Defective
Contracts" prior to such Notice Settlement Date;
provided, however, that with respect to any Pledged
-------- -------
Contract incorrectly described on the Contract Schedule
only with respect to its Principal Balance as of the
initial Cut-Off Date, which the Borrower would
otherwise be required to effect the release of pursuant
to this Section 7.11(a), the Borrower may, in lieu of
--------------
effecting the release of such Pledged Contract, deposit
in the Collection Account on the Business Day next
preceding the relevant Notice Settlement Date, cash in
an amount sufficient to cure such deficiency or
discrepancy. The following defects with respect to
documents in any Contract File, to the extent they do
not impair the validity or enforceability of the
subject document under applicable law, shall not be
deemed to constitute a breach of the representations
and warranties contained in Section 4.02: misspellings
-----------
of or omissions of initials in names; name changes from
divorce or marriage; discrepancies as to payment dates
in a Contract of no more than 30 days; discrepancies as
to Payments of no more than $5.00; discrepancies as to
origination dates of not more than 30 days; inclusion
of additional parties other than the primary Obligor
not listed in the Servicer's records or in the Contract
Schedule and non-substantive typographical errors and
other non-substantive minor errors of a clerical or
administrative nature.
(b) Subject to Section 7.11(d), in the event that
--------------
any Pledged Contract becomes a Defaulted Contract at any
time after the Contract Grant Date for such Contract, the
Borrower shall, prior to the occurrence of the Liquidation
Trigger Date, on the first Settlement Date on which such
Pledged Contract constitutes a Defaulted Contract, cause
such Defaulted Contract to be released from each of the
Primary Lien and the L/C Bank Lien of this Credit Agreement
by making all of the payments and allocations required to be
made under Section 7.06(b) on such Settlement Date (a
--------------
"Defaulted Contract Release Date"); provided, that all of
-------------------------------
the payments and allocations required to be made under
Section 7.06(b) on such Settlement Date shall be made on
--------------
the basis of a Borrowing Base calculation which gives effect
to the status of all Pledged Contracts which became
"Defaulted Contracts" prior to such Settlement Date.
(c) Subject to Section 7.11(d), in the event
--------------
that, as of any Determination Date, the Pool Limit Excess is
greater than zero, prior to the occurrence of the
Liquidation Trigger Date, the Borrower shall (i) prior to
the next succeeding Settlement Date, identify (by reference
to the Contract Schedule) or cause the Servicer to identify
to the Collateral Agent, in writing, Pledged Contracts of a
type or types the inclusion of which in the Contract Pool
has given rise to the existence of such Pool Limit Excess
(which Contracts shall consist of (i) all Overlapping
Contracts and (ii) other Pledged Contracts which are
identified by the Borrower on a basis which is not adverse
to any of Triple-A, the Collateral Agent, the Administrative
Agent or the L/C Bank), and in an aggregate Principal
Balance approximately equal to (but not greater than) the
amount of such Pool Limit Excess (collectively, the
"Overconcentration Contracts"), and (ii) cause such
---------------------------
Overconcentration Contracts to be released from each of the
Primary Lien and the L/C Bank Lien of this Credit Agreement
by making all of the payments and allocations required to be
made under Section 7.06(b) on such Settlement Date (an
"Overconcentration Contract Release Date"); provided, that
--------------------------------------- --------
all of the payments and allocations required to be made
under Section 7.06(b) on such Settlement Date shall be made
--------------
on the basis of a Borrowing Base calculation which gives
effect to the subtraction of the Pool Limit Excess from the
Borrowing Base on the Settlement Date.
(d) Promptly after the occurrence of a Settlement
Date constituting a Defective Contract Release Date, a
Defaulted Contract Release Date or an Overconcentration
Contract Release Date, the Servicer shall delete the
relevant Defective Contracts, Defaulted Contracts or
Overconcentration Contracts from the Contract Schedule and
shall notify the Collateral Agent to do the same with
respect to the records and any computer files maintained by
it; provided, however that in all events it shall be a
-------- -------
condition precedent to the effectiveness of the release of
any Pledged Contract pursuant to Section 7.11(a), (b) or (c)
-------------- -- --
that the Borrower shall have delivered or caused the
Servicer to have delivered to the Collateral Agent, on the
Business Day next succeeding such Settlement Date a
certificate to the effect that (i) all of the payments and
allocations required to be made under Section 7.06 on such
------------
Settlement Date from funds on deposit in the Collection
Account shall have been made to the appropriate Persons, in
full and in cash; and (ii) after giving effect to all of the
payments and allocations required to be made under Section
-------
7.06 on such Settlement Date, there is no Borrowing Base
----
Shortfall, O/C Shortfall or Spread Account Shortfall in
existence. In connection with the release of a Defective
Contract, Defaulted Contract or an Overconcentration
Contract and the related Collateral hereunder, the
Collateral Agent hereby appoints the Servicer as its agent
and attorney-in-fact (which appointment shall be evidenced
by a recorded power of attorney in the form attached hereto
as Exhibit K, which pursuant to its terms is revocable at
---------
the option of the Collateral Agent upon written notice to
the Servicer) to execute all documents necessary to evidence
such release.
(e) In connection with each release pursuant to
Section 7.11(a), (b), or (c), and upon the satisfaction of
-------------- --- ---
the conditions precedent set forth in Section 7.11(d), the
--------------
Collateral Agent shall automatically and without further
action be deemed to transfer, assign, set over and otherwise
convey to the Borrower, without recourse, representation or
warranty, all the right, title and interest of Collateral
Agent in and to any Defective Contract, Defaulted Contract,
Overconcentration Contract or any other Collateral released
pursuant to the terms thereof, and all monies thereafter due
or to become due with respect thereto, and all proceeds
thereof. The Collateral Agent shall execute such documents
and instruments of transfer or assignment and take such
other actions as shall reasonably be requested by the
Borrower to effect the conveyance of such released
Collateral pursuant to this subsection.
(f) The obligation of the Borrower to effect the
release of any Defective Contract shall constitute the sole
remedy hereunder respecting any breach of the
representations and warranties set forth in Sections
--------
4.01(y), 4.02, 4.03, or 4.04 available hereunder to the
------ ---- ---- ----
Collateral Agent on behalf of itself, the Administrative
Agent, Triple-A, the Surety, and the L/C Bank; provided,
however, that this provision shall not limit in any way any
rights of any of the Collateral Agent, the Administrative
Agent, Triple-A, the Surety or the L/C Bank (i) arising
under Article XI, (ii) against any Person other than the
Borrower, or (iii) in respect of any decrease in the
Borrowing Base as a result of a Pledged Contract becoming a
Defective Contract.
SECTION 7.12. Remarketing Obligations.
(a) FCI's Obligations. In the event that either
(i) the Borrower fails to effect, within one Business Day
after a Settlement Date prior to which the Borrower or the
Servicer has become aware (or otherwise received written
notice) that any Pledged Contract has become a Defective
Contract or a Defaulted Contract, the release of such
Pledged Contract from each of the Primary Lien and the L/C
Bank Lien of this Credit Agreement pursuant to the terms of
any of Sections 7.01(a), (b), and (c), and Section 7.01(d),
or (ii) a Contract becomes a Defaulted Contract, a Defective
Contract or an Overconcentration Contract at any time after
the earlier of (A) the Liquidation Trigger Date, or (B) the
Termination Date if either a Borrowing Base Shortfall, an
O/C Shortfall or a Spread Account Shortfall is in existence
(based upon the Settlement Report prepared for the most
recently ended Calculation Period),
(x) the Servicer shall, to the extent permitted by
the terms of the applicable Contract, at the sole cost
and expense of the Servicer, enforce the Borrower's
rights and remedies against, and realize upon and
obtain on behalf of the Borrower, subject in all events
to the Primary Lien and the L/C Bank Lien, all of the
relevant Obligor's right, title and interest in, to and
under the related VOI or Lot (including, without
limitation, such Obligor's right to possess the related
VOI or Lot) without any legal or judicial process
(except to the extent otherwise required by applicable
law or pursuant to the terms of such Contract), and
(y) FCI shall exercise its best efforts, at its
sole cost and expense, to (1) assist the Servicer in
the performance of its obligations described under
clause (x) above, and (2) remarket the VOI or Lot
relating to such Defective Contract or Defaulted
Contract pursuant to the terms and conditions of the
Remarketing Agreement, and
(z) the Collateral Agent hereby agrees to submit
such VOI or Lot to the remarketing procedures described
in the Remarketing Agreement, and, at the sole cost and
expense of FCI, to take any and all other reasonable
actions as may be reasonably requested by FCI under the
terms of the Remarketing Agreement in order to
facilitate the remarketing of such VOI or Lot.
(b) Effect on Other Provisions of this Agreement.
Each Remarketed Contract transferred pursuant to the
Remarketing Agreement by FCI and FAC to the Borrower, and
Granted pursuant to the Remarketing Agreement by the
Borrower to the Collateral Agent for the benefit of itself,
the Administrative Agent, Triple-A and the Surety, and to
the Collateral Agent for the benefit of the L/C Bank, shall
be a "Pledged Contract", and shall therefore constitute part
of the "Contract Pool" for purposes of this Credit Agreement
and the other Facility Documents and each reference to
Pledged Contracts transferred "under the Receivables
Purchase Agreement" or Granted hereunder (or words of
similar effect) shall include Remarketed Contracts so
transferred or Granted pursuant to the Remarketing
Agreement; provided that the effect of the foregoing clause
is specifically qualified to the extent specifically set
forth below:
(i) The Eligible Contract Pool Principal
Balance shall be determined without giving effect to
the existence of Remarketed Contracts. For purposes of
determining whether or not a Remarketed Contract
constitutes an "Eligible Contract" for any other
purposes of this Credit Agreement (including, by way of
example and not limitation, in order to determine
whether or not the representation set forth in Section
4.02(a) has been breached with respect to a Remarketed
Contract), the definition of Eligible Contract shall be
deemed not to include clauses (f) or (x) thereof.
(ii) For the purposes of this Credit
Agreement, the applicable "Cut-Off Date" of a
Remarketed Contract shall be the date of such
Contract's origination by FCI.
In addition, promptly after the Grant of any Remarketed
Contract to the Collateral Agent pursuant to the terms of
the Remarketing Agreement, the Servicer shall add such
Remarketed Contract to the Contract Schedule and shall
notify the Collateral Agent to do the same with respect to
the records and any computer file maintained by it.
ARTICLE VIII
THE LETTER OF CREDIT FACILITY
SECTION 8.01. Issuance of the Letter of Credit
and Amendments.
(a) Subject to the terms and conditions hereof at
all times prior to the Termination Date, but on or after the
Effective Restatement Date, the L/C Bank, in reliance upon
the representations and warranties of the Borrower and the
Servicer contained herein, hereby agrees to issue, for the
account of the Borrower, the Letter of Credit to the
Collateral Agent promptly upon the written request of the
Borrower therefor in substantially the form of Exhibit L
hereto, which request shall set forth the initial L/C Face
Amount and the proposed issuance date of the Letter of
Credit (which shall be the Business Day next preceding the
Settlement Date next succeeding the date of such request,
except in the case of an issuance requested to occur on the
Effective Restatement Date, in which case the proposed
issuance date may be the same day as the delivery of such
request); provided, however, that
(x) at the time of such issuance and after giving
effect thereto, the L/C Face Amount shall not exceed
the L/C Commitment Amount in effect at such time; and
(y) other than in connection with an issuance
requested to occur on the Effective Restatement Date,
any such issuance shall only be requested by the
Borrower during the period commencing on the first
Business Day next succeeding a Determination Date, and
ending on the third Business Day next preceding the
related Settlement Date.
(b) Subject to the terms and conditions hereof,
at all times prior to the Termination Date, the L/C Bank
hereby agrees to amend the Letter of Credit in order to
increase the L/C Face Amount promptly upon the written
request of the Borrower therefor in substantially the form
of Exhibit M hereto, which request shall set forth the
amount of the requested increase in the L/C Face Amount and
the proposed effective date of such amendment (which shall
be the Business Day next preceding the Settlement Date next
succeeding the date of such request); provided, however,
that
(i) at the time of any such amendment, and after
giving effect thereto, the L/C Face Amount shall not
exceed the L/C Commitment Amount in effect at such
time, and
(ii) any such amendment shall only be requested by
the Borrower during the period commencing on the first
Business Day next succeeding a Determination Date, and
ending on the third Business Day next preceding the
related Settlement Date.
(c) Subject to the terms and conditions hereof,
so long as no Event of Default or Unmatured Event of Default
has occurred and is continuing, the Borrower may request the
L/C Bank to decrease the L/C Face Amount or cancel the
Letter of Credit promptly upon the written request of the
Borrower therefor in substantially the form of Exhibit N
hereto, which request shall (x) set forth the amount of the
requested decrease in the L/C Face Amount (if applicable)
and the proposed effective date of such amendment or
cancellation (which shall be a Business Day occurring no
less than two Business Days and no more than three Business
Days after the delivery of such request), and (y) shall be
accompanied by a Borrowing Base Certificate delivered by the
Servicer to each of the L/C Bank and the Collateral Agent,
dated as of the date of such request, giving effect to such
requested amendment or cancellation and the payments made
under Section 7.06 on the next preceding Settlement Date
hereunder; and each of the Collateral Agent, the
Administrative Agent, the Surety and Triple-A shall be
deemed to have consented to such requested amendment or
cancellation; provided, however, that:
(i) the deemed consent of each of the
Collateral Agent, the Administrative Agent, the
Surety and Triple-A to any such requested
amendment or cancellation shall be null and void
and of no force or effect if, at the time of any
such requested amendment or cancellation, and
after giving effect thereto, (A) any Borrowing
Base Shortfall, O/C Shortfall or Spread Account
Shortfall shall be in existence,(B) any Event of
Default, Unmatured Event of Default, Servicer
Default or Unmatured Servicer Default shall be in
existence, or (C) any of the conditions precedent
described in Section 3.03 shall not have been
satisfied (and to the extent that any such
amendment or cancellation has been effected by the
L/C Bank notwithstanding such lack of deemed
consent of the beneficiary, the L/C Bank shall
immediately re-issue or amend the Letter of
Credit, as the case may be, in such a manner so as
to reverse the effect of such amendment or
cancellation (any such re-issuance or amendment,
an "L/C Restoration"), the Borrower shall be
deemed to have consented to such L/C Restoration,
and any such Letter of Credit, as so re-issued or
amended, shall be the "Letter of Credit"
hereunder, subject to all of the provisions of
this Credit Agreement applicable to the Letter of
Credit; provided, however, that the L/C Bank shall
have no obligation to effect such L/C Restoration
unless the Collateral Agent shall have given the
L/C Bank a written direction to effect such L/C
Restoration within 90 days after the effective
date of the relevant amendment or cancellation of
the Letter of Credit requested by the Borrower
pursuant to this Section 8.01(c));
(ii) absent the specific written consent of
each of the Collateral Agent, the Administrative
Agent, the Surety, and Triple-A and the L/C Bank,
any such request for an amendment or cancellation
shall only be made by the Borrower during the
period commencing on the Business Day next
succeeding a Settlement Date, and ending on the
second Business Day to occur thereafter; and
(iii) absent the specific written consent of
each of the Collateral Agent, the Administrative
Agent, the Surety and Triple-A, if the Borrower
shall request any such amendment to occur on or
after the occurrence of the Termination Date, the
Borrowing Base used for the purpose of clause
(i)(A) above shall be calculated on the basis of
Advance Rates which, in the case of each Pledged
Contract having an Ownership Percentage of greater
than or equal to 40% as of the Termination Date,
shall be the Advance Rate applicable to such
Contract on the Termination Date.
(d) No more than one amendment or cancellation to
the Letter of Credit shall be made under either of
subsections (b) or (c) above during each Settlement Period.
Each issuance, amendment, extension, cancellation or other
modification of the Letter of Credit made under this Section
8.01, to the extent properly requested and otherwise
permitted to be made in accordance with applicable law and
the terms of this Credit Agreement, shall be made effective
by the L/C Bank on the Business Day next preceding the
Settlement Date next succeeding the date of the applicable
request therefor in accordance with subsection (b) or (c)
above (as appropriate).
(e) Other than as specifically described in
subsections (b) and (c) above, the Letter of Credit shall
not be amended, restated, modified, cancelled or replaced,
absent the prior written consent of each of the Borrower,
the Collateral Agent, the Administrative Agent, Triple-A and
the L/C Bank.
SECTION 8.02. L/C Reimbursement Obligations. (a)
In order to induce the L/C Bank to issue, extend, amend and
renew the Letter of Credit, the Borrower hereby agrees to
reimburse or pay to the L/C Bank with respect the Letter of
Credit, subject in all events to the provisions of Section
7.06 hereof:
(i) except as otherwise expressly provided in
clause (ii) below in connection with a Downgrade Draw,
on the Settlement Date next succeeding each date that
any draft presented under the Letter of Credit is
honored by the L/C Bank, or the L/C Bank otherwise
makes a payment with respect thereto, (A) the amount
paid by the L/C Bank under or with respect to the
Letter of Credit, and (B) the amount of any taxes,
fees, charges or other costs and expenses whatsoever
incurred by the L/C Bank in connection with any payment
made by the L/C Bank under, or with respect to, the
Letter of Credit; and
(ii) in the case of a Downgrade Draw,
(A) on the Settlement Date next succeeding
the date on which the draft presented under the
Letter of Credit is honored by the L/C Bank, or
the L/C Bank otherwise makes a payment with
respect thereto, the amount of any taxes, fees,
charges or other costs and expenses whatsoever
incurred by the L/C Bank in connection with the
payment made by the L/C Bank under, or with
respect to, the Letter of Credit, as set forth in
the L/C Fee Letter, and
(B) on each Settlement Date next succeeding
the date on which a transfer is made by the L/C
Cash Collateral Bank at the direction of the
Collateral Agent from the L/C Cash Collateral
Account to the Collection Account under Section
8.13(e), the aggregate of all amounts so
transferred from the L/C Cash Collateral Account
to the Collection Account which, at any time of
determination hereunder, have not been reimbursed
to the L/C Bank under this clause (B), and
(C) on the Settlement Date next succeeding
the Primary Collection Date, any remaining amounts
paid by the L/C Bank under or with respect to the
Letter of Credit which, on such date, have not
been reimbursed to the L/C Bank under clause (B)
above.
(b) Interest at the L/C Reimbursement Rate shall
accrue on the aggregate of all amounts drawn under the
Letter of Credit (including, without limitation, any amounts
drawn pursuant to a Downgrade Draw), to the extent not
already reimbursed pursuant to this Section 8.02, from the
date on which any such draw takes place, until the date on
which the aggregate amount of all such draws has been
reimbursed in full and in cash (whether pursuant to this
Section 8.02 or Section 8.13(f) in connection with the
release of amounts on deposit in the L/C Cash Collateral
Account to the L/C Bank, and whether before or after
judgment). Interest shall accrue on the aggregate of all
other amounts due to the L/C Bank under this Section 8.02 or
pursuant to the L/C Fee Letter from the date on which such
amounts become due and payable (whether as stated in this
Section 8.02, by acceleration or otherwise) until payment in
full (whether before or after judgment). All amounts of
interest payable under this subsection (b) shall accrue at
the L/C Reimbursement Rate and shall be due and payable on
each Settlement Date following the commencement of the
accrual thereof.
(c) Each payment required to be made by the
Borrower under this Section 8.02 shall be made to the L/C
Bank at its head office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or at such other office as shall be
notified in writing by the L/C Bank to the Borrower and the
Collateral Agent from time to time hereafter), in
immediately available funds.
SECTION 8.03. Letter of Credit Fees. The
Borrower shall pay the L/C Bank, (i) the L/C Fee and the L/C
Commitment Fee on each Settlement Date for the most recently
concluded Calculation Period, and (ii) the L/C Additional
Fee on the relevant date of issuance, amendment, extension
or renewal of the Letter of Credit. All computations of the
L/C Fee and the L/C Commitment Fee shall be based on a 360-
day year and paid for the actual number of days elapsed.
SECTION 8.04. Acceptance and Payment. (a) The
L/C Bank shall accept or pay any Draft presented to it,
regardless of when drawn and whether or not negotiated, if
such Draft is dated and presented to the L/C Bank for
payment on a date which occurs during the Potential Draw
Period and otherwise prior to the expiration of the Letter
of Credit in accordance with its terms. Moreover, the L/C
Bank shall honor, as complying with the terms of this Credit
Agreement and the Letter of Credit, any Drafts appearing
otherwise in order purportedly and signed or issued by an
Authorized Officer of the Collateral Agent, or any trustee
in bankruptcy, debtor in possession, assignee for benefit of
creditors, liquidator, receiver or other legal
representative of the Collateral Agent.
(b) Subject in all events to the terms of
Sections 14.08 and 7.06, the Borrower's obligations under
this Article VIII shall be absolute and unconditional under
any and all circumstances and irrespective of the occurrence
of any Unmatured Event of Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim
or defense to payment which the Borrower may have or have
had against the L/C Bank or any beneficiary of the Letter of
Credit. The Borrower further agrees with the L/C Bank that
the L/C Bank shall not be responsible for, and the L/C
Reimbursement Obligations under Section 8.02 shall not be
affected by, among other things, the validity or genuineness
of documents or of any endorsements thereon, even if such
documents should in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or
among the Borrower, the beneficiary of the Letter of Credit
or any financing institution or other party to which the
Letter of Credit may be transferred or any claims or
defenses whatsoever of the Borrower against the beneficiary
of the Letter of Credit or any such transferee. The L/C
Bank shall not be liable for any error, omission,
interruption or delay in transver transmitted, in connection
with the Letter of Credit. The Borrower agrees that any
action taken or omitted by the L/C Bank under or in
connection with the Letter of Credit and the related drafts
and documents, if done in good faith, shall be binding upon
the Borrower and shall not result in any liability on the
part of the L/C Bank to the Borrower.
(c) To the extent not inconsistent with Section
8.04(b), the L/C Bank shall be entitled to rely, and shall
be fully protected in relying upon, the Letter of Credit,
draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document
believed by it to be genuine and correct and to have been
signed, sent or made by the proper person, persons or entity
and upon advice and statements of legal counsel, independent
accountants and other experts selected by the L/C Bank.
SECTION 8.05. Modification and Extension. If the
--------------------------
Borrower, either in writing or orally, (i) requests or
consents to any modification or extension of the Letter of
Credit, (ii) waives the failure of any Draft to comply with
the terms of the Letter of Credit or (iii) consents to any
other departure from the terms of the Letter of Credit, this
Credit Agreement shall be binding upon the Borrower with
respect to the Letter of Credit as so modified or extended,
and with respect to any action taken or omitted by the L/C
Bank or any of its correspondents pursuant to any such
consent, authorization or waiver. Notwithstanding anything
in the foregoing sentence or elsewhere to the contrary,
nothing in this Section 8.05 shall be construed to permit
the Borrower to make or agree to make, any modification or
extension of the Letter of Credit otherwise prohibited by
the terms hereof or of any other Facility Documents.
SECTION 8.06. Governing Rules. The Uniform
Customs and Practice shall be binding on the Borrower and
the L/C Bank except to the extent it is otherwise expressly
agreed by each of the Collateral Agent, the Borrower and the
L/C Bank. It is also agreed that: (a) user(s) of the
Letter of Credit shall not be deemed agents of the L/C Bank;
(b) none of the L/C Bank, the Collateral Agent or any of the
correspondents of the L/C Bank shall be responsible for:
(i) the validity or sufficiency of any endorsements,
(ii) delay in giving or failure to give notice of arrival or
any other notice, or (iii) failure of any instrument to bear
any reference or adequate reference to the Letter of Credit
or to surrender or take up the Letter of Credit or to
forward documents (other than a Draft) in the manner
required by the Letter of Credit; and (c) the occurrence of
any one or more of the contingencies referred to in the
Uniform Customs and Practice or in the preceding clauses of
this paragraph shall not affect, impair or prevent the
vesting of any of the Collateral Agent's or the L/C Bank's
rights or powers hereunder or the Borrower's L/C Bank
Obligations. Any action, inaction or omission on the part
of the L/C Bank or any of its correspondents, under or in
connection with the Letter of Credit or any related
instruments, documents or property, if in good faith and in
conformity with such laws, regulations or customs as the L/C
Bank or any of its correspondents may deem to be applicable,
shall be binding upon the Borrower and shall not place the
L/C Bank or any of its correspondents under any liability to
the Borrower.
SECTION 8.07. Grant of L/C Bank Lien. To secure
the prompt and complete payment when due of all of the L/C
Bank Obligations and timely performance by the Borrower of
all of the covenants and obligations to be performed by it
pursuant to the Credit Agreement in favor of the L/C Bank,
the Borrower hereby assigns and pledges to the Collateral
Agent, on behalf of the L/C Bank, and grants to the
Collateral Agent on behalf of the L/C Bank, a security
interest in all of the Borrower's right, title and interest
in, to and under the Collateral (the "L/C Bank Lien"). The
L/C Bank Lien shall constitute a Lien which is separate and
distinct from the Primary Lien; provided, however, that the
L/C Bank Lien shall be entitled to all of the benefits of
all provisons applicable to Article VII applicable to the
Primary Lien.
SECTION 8.08. Subordination of L/C Bank Lien and
L/C Bank Obligations. The L/C Bank Lien and L/C Bank
Obligations shall be subordinated to the Primary Lien and
the Obligations, respectively, as follows:
(a) The interest of the Collateral Agent, on behalf of
itself, the Administrative Agent, Triple-A and the
Surety, in the Collection Account and the Spread
Account, including all funds and investments
maintained therein, and any interest or other
income payable thereon (collectively, the
"Collection Account Assets"), including, without
limitation, any interest, premium, fees and other
income accruing after the commencement of an
Insolvency Proceeding (in each case whether or not
allowed as a claim in such Insolvency Proceeding)
shall be deemed to be senior in priority to the
interest of the L/C Bank or Collateral Agent on
behalf of the L/C Bank in the Collection Account
Assets. Such priority shall be irrespective of
the time, order or method of attachment or
perfection of such interests, or the time or order
of the filing of any financing statements.
Notwithstanding anything in the foregoing two
sentences to the contrary, the priority of
distributions of Collection Account Assets is set
forth in, and governed by, Sections 7.06 and 7.07
hereof, and the L/C Bank (and under certain
circumstances, the Borrower) may from time to time
receive distributions of Collection Account Assets
pursuant to, and in accordance with, the payment
priorities set forth under Sections 7.06 and 7.07
hereof, both before and after the occurrence of
the Primary Collection Date.
(b) The interest of the Collateral Agent, on behalf of
itself, the Administrative Agent, Triple-A and the
Surety, in the L/C Cash Collateral Account,
including all funds and investments maintained
therein, and any interest or other income payable
thereon (collectively, the "L/C Cash Collateral
Account Assets"), including, without limitation,
any interest, premium, fees and other income
accruing after the commencement of an Insolvency
Proceeding (in each case whether or not allowed as
a claim in such Insolvency Proceeding) shall be
deemed to be senior in priority to the interest of
the L/C Bank or the Collateral Agent on behalf of
the L/C Bank in the L/C Cash Collateral Account
Assets. Such priority shall be irrespective of
the time, order or method of attachment or
perfection of such interests, or the time or order
of the filing of any financing statements.
Notwithstanding anything in the foregoing two
sentences to the contrary, limitations on
distributions of L/C Cash Collateral Account
Assets are set forth in, and governed by, Section
8.13 hereof, and the L/C Bank may from time to
time receive distributions of L/C Cash Collateral
Account Assets pursuant to, and in accordance
with, the limitations set forth under Section
8.13, both before and after the occurrence of the
Primary Collection Date.
(c) The interest of the Collateral Agent, on behalf of
itself, the Administrative Agent, Triple-A and the
Surety, in all assets and properties of the
Borrower other than the Collection Account Assets
and the L/C Cash Collateral Account Assets
(collectively, the "Remaining Assets"), including,
without limitation, any interest, premium, fees
and other income accruing after the commencement
of an Insolvency Proceeding (in each case whether
or not allowed as a claim in such Insolvency
Proceeding) shall be deemed to be senior in
priority to the interest of the L/C Bank or the
Collateral Agent on behalf of the L/C Bank in the
Remaining Assets. Such priority shall be
irrespective of the time, order or method of
attachment or perfection of such respective
interests, or the time or order of the filing of
financing statements. Until the occurrence of the
Primary Collection Date, neither the L/C Bank nor
the Collateral Agent on behalf of the L/C Bank,
shall be entitled to receive any distributions
whatsoever constituting Remaining Assets, any
proceeds or products arising therefrom or any
other amounts otherwise payable with respect
thereto.
(d) In furtherance of the foregoing subsections (a),
(b), and (c) until the occurrence of the Primary
Collection Date, the L/C Bank agrees, for the
benefit of the holders of the Obligations, that it
shall not (i) commence or continue any default,
foreclosure or liquidation proceedings or remedies
in respect of the Borrower, or the Collateral or
any other assets or properties owned or
purportedly owned by the Borrower, (ii) otherwise
exercise any enforcement rights that it may have
against the Borrower or such properties,
(iii) solicit or direct the Collateral Agent to
take any of the actions described in clauses (i)
and (ii) above, or (iv) exercise or otherwise
assert any rights which the L/C Bank may acquire
by way of subrogation hereunder or under the
Letter of Credit, and the Collateral Agent hereby
agrees not to take any such action on behalf of
the L/C Bank or otherwise in respect of the L/C
Bank Lien until the occurrence of the Primary
Collection Date.
(e) If any payment or other distribution of any kind
shall be made to the L/C Bank at any time in
contravention of any of the provisions of the
foregoing subsections (a) through (d) (including,
without limitation, on account of any subrogation
rights) each and every amount so paid or
distributed will be held in trust in favor of the
Collateral Agent, for the benefit of itself, the
Administrative Agent, Triple-A and/or the Surety
(as appropriate) and forthwith be paid to the
Collateral Agent to be credited and applied to the
Obligations to the extent then unsatisfied, in
accordance with the terms of this Credit Agreement
or any other relevant Facility Document (as
appropriate).
SECTION 8.09. Preservation of Rights in
Collateral. Except as herein otherwise expressly provided,
neither the Collateral Agent nor the L/C Bank shall be
obligated to take any steps necessary to preserve any rights
in any of the Collateral or to preserve any rights therein
against prior parties, and the Borrower agrees to take such
steps. In any case, both the Collateral Agent and the L/C
Bank shall be deemed to have exercised reasonable care if it
shall have taken such steps for the care and preservation of
the Collateral as the Borrower may have reasonably requested
either of the Collateral Agent or the L/C Bank to take, and
the omission of the Collateral Agent or the L/C Bank to take
any action not requested by the Borrower shall not be deemed
a failure to exercise reasonable care. No segregation or
specific allocation by either of the Collateral Agent or the
L/C Bank of specified items of Collateral against any
liability of the Borrower shall waive or affect any security
interest in or lien against other items of Collateral or any
of the Collateral Agent's or the L/C Bank's options, powers
or rights under this Credit Agreement or otherwise arising.
SECTION 8.10. Rights Not Exclusive. The
Collateral Agent's and the L/C Bank's respective rights,
powers, privileges and immunities specified in or arising
under this Credit Agreement are in addition to any
heretofore or at any time hereafter otherwise created or
arising, whether by statute or rule of law or contract.
Each of the Collateral Agent and the L/C Bank is expressly
given the right and power, in furtherance of any right,
power or privilege herein specified or which the Collateral
Agent or the L/C Bank may otherwise have, to execute and
file or record endorsements, assignments and other
instruments of conveyance or transfer, as well as financing
statements, in the name of the Borrower with respect to
documents, property and interests relating to the Letter of
Credit or covering or relating to any property of the
Borrower in which the Collateral Agent has a security
interest or standing in the name of the Borrower or
belonging to the Borrower which may at any time come into
the possession or control of the Collateral Agent or the L/C
Bank under the Letter of Credit or by virtue of this Credit
Agreement. Each of the Collateral Agent and the L/C Bank is
also authorized to file any financing statement without the
Borrower's signature.
SECTION 8.11. No Waiver. Failure or delay on the
part of either of the Collateral Agent or the L/C Bank to
exercise or enforce any of its rights, powers or privileges
hereunder, or to require strict compliance with the terms
hereof in one or more instances, shall not constitute a
waiver or relinquishment thereof. None of such rights,
powers, privileges and immunities shall be deemed waived
unless each of the L/C Bank and the Collateral Agent shall
have signed a waiver thereof and, unless expressly stated
therein, no such waiver shall be effective as to any
transaction which occurs after the date of such waiver nor
as to the continuance of any breach of the terms hereof
after such date.
SECTION 8.12. Letter of Credit Draw.
Notwithstanding anything herein to the contrary, at any time
during the Potential Draw Period, and upon the occurrence of
a Draw Trigger, the Collateral Agent shall be entitled to
make a draw under the Letter of Credit in an amount equal to
the Draw Amount on the date of such drawing. The Collateral
Agent shall cause such Draw Amount to be deposited in the
Collection Account, to be applied in accordance with the
applicable priority of payments set forth in Section 7.06.
SECTION 8.13. The L/C Cash Collateral Account.
(a) Establishment. Notwithstanding anything
herein to the contrary, upon the occurrence of an Early Draw
Event pursuant to the terms of the Letter of Credit, the
Collateral Agent shall be entitled to make a draw under the
Letter of Credit in an amount equal to the full amount of
the L/C Face Amount in effect at such time. If the
Collateral Agent makes such a draw under the Letter of
Credit upon the occurrence of an Early Draw Event, the
Collateral Agent shall establish and maintain, for the sole
and exclusive benefit of itself, the Administrative Agent,
Triple-A, the Surety and the L/C Bank, and their respective
assigns a cash collateral account (the "L/C Cash Collateral
Account") in the name and under the sole dominion and
control of the Collateral Agent with either (i) FNBB, for so
long as FNBB maintains a short-term unsecured indebtedness
rating of no less than A-2 by S&P and P-1 by ▇▇▇▇▇'▇, or a
Depository Institution which is an Eligible Depository
Institution (in such case, the choice of L/C Cash Collateral
Bank to be at the sole discretion of the Collateral Agent)
or (ii) in a segregated trust account in the trust
department of a Depository Institution. Upon receipt of the
proceeds of any draw described in the foregoing sentence,
the Collateral Agent shall deposit such proceeds into the
L/C Cash Collateral Account.
(b) Taxation. The taxpayer identification number
associated with the L/C Cash Collateral Account shall be
that of the Borrower and the Borrower will report for
federal, state and local income tax purposes the income, if
any, earned on funds in the L/C Cash Collateral Account.
(c) Investments. All funds held in the L/C Cash
Collateral Account, including investment earnings thereon,
may be invested in Permitted Investments at the direction of
the Servicer; provided, however, that (x) upon written
notice from the Collateral Agent to the L/C Cash Collateral
Account Bank, the Collateral Agent shall have the sole right
to restrict the maturities of any Permitted Investments held
in the L/C Cash Collateral Account, and (y) from and after
the date after the Termination Date on which there are no
remaining available funds on deposit in the L/C Cash
Collateral Account, the Collateral Agent shall have the sole
right to direct the liquidation of any such investments, the
proceeds of which shall be deposited in the L/C Cash
Collateral Account, to be used solely for the purposes set
forth in this Section 8.13.
(d) Statements for L/C Cash Collateral Account.
On a monthly basis, the Servicer shall cause the L/C Cash
Collateral Bank to provide the Collateral Agent with a
written statement with respect to the preceding calendar
month regarding the L/C Cash Collateral Account in a form
customary for statements provided by the L/C Cash Collateral
Bank for other accounts held by it, which statement shall
include, at a minimum, the amount of funds on deposit in the
L/C Cash Collateral Account, the identity of all Permitted
Investments held in the L/C Cash Collateral Account, and the
dates and amounts of all deposits, withdrawals and
investment earnings with respect to the L/C Cash Collateral
Account.
(e) Payments from the L/C Cash Collateral Account.
At any time during the Potential Draw Period, the the L/C
Cash Collateral Account to the Collection Account, an amount
not exceeding the L/C Cash Collateral Draw Amount in effect
at such time, to be applied in accordance with the
applicable priority of payments set forth in Section 7.06.
(f) Release of L/C Cash Collateral Account. (i)
After the occurrence of the Primary Collection Date, all
available funds then remaining on deposit in the L/C Cash
Collateral Account, and any Permitted Investments maintained
therein, shall be released by the L/C Cash Collateral Bank
(pursuant to an instruction to such effect delivered by the
Collateral Agent):
(x) to the extent of any unpaid L/C Bank
Obligations then outstanding, to an account
designated by the L/C Bank for such purpose; and
(y) to the extent of any remaining funds in
the L/C Cash Collateral Account after giving
effect to the release described in clause (x)
above, to an account designated by the Borrower
for such purpose.
(ii) From time to time after the
Termination Date and so long as no Event of Default or
Unmatured Event of Default has occurred and is continuing,
pursuant to the written request of the Servicer to the
Collateral Agent, the Collateral Agent shall direct the L/C
Cash Collateral Bank to release all or a portion of the
available funds on deposit in the L/C Cash Collateral
Account to an account designated by the L/C Bank for such
purpose, which request shall (x) set forth the amount of the
requested release and the proposed effective date of such
release (which shall be a Business Day occurring no less
than two Business Days and no more than three Business Days
after the delivery of such request) and (y) shall be
accompanied by a Borrowing Base Certificate delivered by the
Servicer to each of the L/C Bank and the Collateral Agent,
dated as of the date of such request, giving effect to such
requested release and the payments made under Section 7.06
on the next preceding Settlement Date hereunder); provided,
however, that absent the consent of each of the Collateral
Agent, the Administrative Agent, the Surety and Triple-A:
(A) any such request shall be null and void
and of no force or effect if, at the time of any
such requested release, after giving effect
thereto, (1) any Borrowing Base Shortfall, O/C
Shortfall or Spread Account Shortfall shall be in
existence, or (2) any Event of Default, Unmatured
Event of Default, Servicer Default or Unmatured
Servicer Default shall be in existence (and to the
extent that any such release of funds to the L/C
Bank occurs notwithstanding the fact that such
request is null and void as a result of this
clause (A), the L/C Bank shall immediately remit
to the L/C Cash Collateral Bank, for deposit into
the L/C Cash Collateral Account, all amounts so
released);
(B) any such release shall only be requested
by the Borrower during the period commencing on
the Business Day next succeeding a Settlement
Date, and ending on the second Business Day to
occur thereafter; and
(C) the Borrowing Base used for the purpose
of clause (A)(1) above shall be calculated on the
basis of Advance Rates which, in the case of each
Pledged Contract having an Ownership Percentage of
greater than or equal to 40% as of the Termination
Date, shall be the Advance Rate applicable to such
Contract on the Termination Date.
(g) Replacement of L/C Cash Collateral Account
Bank. In the event the L/C Cash Collateral Account Bank
ceases to satisfy the requirement set forth in clause (i) of
subsection (a) above, and the funds and investments therein
are not immediately thereafter transferred to a segregated
trust account as provided in clause (ii) of subsection (a)
above, the Collateral Agent shall be entitled to terminate
the L/C Cash Collateral Account and transfer all funds and
investments therein to a new L/C Cash Collateral Account at
an Eligible Depository Institution, which new L/C Cash
Collateral Account shall be subject in all respect to the
terms of this Credit Agreement.
ARTICLE IX
SERVICING OF CONTRACT POOL
SECTION 9.01. Responsibility for Contract
Administration. The Servicer shall manage, administer,
service and make collections on the Pledged Contracts and
perform or cause to be performed all contractual and
customary undertakings of the holder of the Contracts to the
Obligors, on behalf of Triple-A, the Administrative Agent,
the Collateral Agent, the Surety, the L/C Bank and the
Borrower (provided that nothing herein or in any of the
other Facility Documents shall constitute, or be deemed to
constitute, an acceptance or assumption on the part of any
of Triple-A, the Administrative Agent, the Collateral Agent,
the Surety, or the L/C Bank of any obligations arising under
the Contracts whatsoever, whether in favor of the Obligor
thereof or any other Person). Without limiting the
generality of the foregoing, but subject to all other
provisions hereof, the Servicer may request a power of
attorney from each of Triple-A, the Administrative Agent,
the Surety, the L/C Bank and the Collateral Agent, and each
of Triple-A, the Administrative Agent, the Surety, the L/C
Bank and the Collateral Agent shall grant to the Servicer a
limited power of attorney in the form of that given FCI by
the Nominee under the Title Clearing Agreements (and
revocable at any time at the option of the Collateral Agent
by telephonic notice to the Servicer), executed and
delivered by the Collateral Agent to the Servicer, to
execute and deliver and be authorized and empowered by the
Collateral Agent to execute and deliver, on behalf of
itself, and each of Triple-A, the Surety, the L/C Bank and
the Administrative Agent, or any of them, any and all
instruments of satisfaction or cancellation or of partial or
full release or discharge and all other comparable
instruments with respect to the Contracts, any Mortgages and
the VOIs and Lots, but only to the extent deemed useful or
necessary by the Servicer.
The Collateral Agent, at the request of a
Servicing Officer, shall furnish the Servicer with any
reasonable documents or take any action reasonably
requested, which is necessary or appropriate to enable the
Servicer to carry out its servicing and administrative
duties hereunder. FAC is hereby appointed the Servicer
until such time as any Servicer Transfer shall be effected
under Article XI.
SECTION 9.02. Standard of Care. In managing,
administering, servicing and making collections on the
Contracts pursuant to this Agreement, the Servicer will
exercise that degree of skill and care consistent with
Customary Practices and the Credit Standards and Collection
Policies.
SECTION 9.03 Records. The Servicer shall,
during the period it is Servicer hereunder, maintain such
books of account, computer data files and other Records as
will enable the Collateral Agent to determine the status of
each Pledged Contract and will enable each Pledged Contract
to be serviced, in accordance with the terms of this
Agreement, by a Successor Servicer following a Service
Transfer.
SECTION 9.04. Inspection.
(a) Inspection of Servicer. Each of the
Borrower, Triple-A, the Administrative Agent, the Collateral
Agent and the L/C Bank, and their respective representatives
shall at all times upon reasonable prior notice have full
and reasonable access during regular business hours to all
offices and Records of the Servicer, and in the event that
the Servicer is FAC, of FCI (wheresoever located, including,
without limitation, any repository used by the Servicer on
the Borrower's behalf, to store the computer tapes
constituting the Servicer's Daily Report), as appropriate to
verify the Servicer's (and FCI's) compliance with this
Agreement, and each of the Borrower, Triple-A, the
Administrative Agent, the Collateral Agent, the Surety and
the L/C Bank and their representatives may examine and audit
the same, and make photocopies and computer tape replicas
thereof, and each of the Servicer and FCI agrees to render
to the Borrower, Triple-A, the Administrative Agent, the
Collateral Agent, the Surety and the L/C Bank and their
representatives, at the Servicer's or FCI's sole cost and
expense, respectively, such clerical and other assistance as
may be reasonably requested with regard thereto. The
Borrower, Triple-A, the Administrative Agent, the Collateral
Agent, the Surety and the L/C Bank and their respective
representatives shall also have the right to discuss the
Servicer's and FCI's affairs with the officers of the
Servicer and FCI and the Servicer's and FCI's independent
accountants and to verify under appropriate procedures the
validity, amount, quality, quantity, value and condition of,
or any other matter relating to, the Collateral. The number
and frequency of any such audits shall be limited to such
number and frequency as shall be reasonable in the exercise
of the Collateral Agent's reasonable commercial judgment.
Each such audit shall be at the sole expense of the Borrower
(subject to the Borrower's right under the Receivables
Purchase Agreement to recover such expenses from the Seller
and FCI).
(b) Confidential Information. Each of the
parties hereto agrees that, to the extent that any
information obtained by any of Triple-A, the Surety, the
Administrative Agent, the Collateral Agent and the L/C Bank
or any of their respective representatives pursuant to
Section 8.04(a) shall be Confidential Information, such
Person may only disclose such Confidential Information to
(i) such Person's and its Affiliates' directors, officers,
employees, agents, trustees and professional consultants,
(ii) any assignee or participant, or proposed assignee or
participant with respect to all or any part of such Person's
interests with respect to all or any part of the
transactions contemplated hereby and by the other Facility
Documents, (iv) any governmental or quasi-governmental
authority having jurisdiction over such Person, (v) any
rating agency, (vi) any credit enhancer, provider of
reinsurance, provider of a letter of credit or provider of
liquidity, or prospective credit enhancer, provider of
reinsurance, provider of a letter of credit or provider of
liquidity with respect to all or any part of the
transactions contemplated hereby and by the other Facility
Documents, (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (1) in compliance
with any law, rule, regulation or order applicable to such
Person (2) in response to any subpoena or other legal
process, (3) in connection with any litigation to which such
Person is or may become a party, (4) in order to protect
such Person's rights, title and interest in and to the
Collateral and in the transactions contemplated hereby and
by the other Facility Documents, or (5) as required by law
or regulation in connection with the sale of securities of
any such Person.
(c) Contract Schedule. At all times during the
term hereof, promptly upon the request of the Administrative
Agent or the Collateral Agent, deliver an updated copy of
the Contract Schedule to the Administrative Agent or the
Collateral Agent, as the case may be.
SECTION 9.05. Enforcement.
(a) The Servicer will, consistent with Section
9.02, act with respect to the Pledged Contracts in such
manner as will maximize the receipt of Collections in
respect of such Pledge Contracts.
(b) The Servicer may ▇▇▇ to enforce or collect
upon Pledged Contracts, in its own name, if possible, or as
agent for the Borrower. If the Servicer elects to commence
a legal proceeding to enforce a Pledged Contract, the act of
commencement shall be deemed to be an automatic assignment
of the Pledged Contract to the Servicer for purposes of
collection only. If, however, in any enforcement suit or
legal proceeding it is held that the Servicer may not
enforce a Pledged Contract on the grounds that it is not a
real party in interest or a holder entitled to enforce the
Pledged Contract, the Collateral Agent (or its designee) on
behalf of the Borrower shall, at the Servicer's expense,
take such steps as the Servicer and the Collateral Agent may
mutually agree are necessary to enforce the Pledged
Contract, including bringing suit in its name or the name of
the Borrower. The Servicer shall provide to the Collateral
Agent reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred thereby.
(c) The Servicer, upon obtaining the prior
written consent of the Collateral Agent, may grant to the
Obligor on any Pledged Contract any rebate, refund or
adjustment out of the Collection Account that the Servicer
in good faith believes is required as a matter of law;
provided that, on any Business Day on which such rebate,
refund or adjustment is to be paid hereunder, such rebate,
refund or adjustment shall only be paid to the extent of
funds otherwise available for distribution from the
Collection Account pursuant to Section 7.06(b)(xi) or the
proviso of Section 7.06(d)(xv), as applicable.
(d) The Servicer will not permit any
modification, amendment, waiver, rescission or cancellation
of any Pledged Contract by the Obligor, whether for any
reason relating to a negative change in the related
Obligor's creditworthiness or inability to make any payment
under the Pledged Contrathe following modifications may be
made to a Pledged Contract from time to time: (i)
extensions which are Permitted Deferrals, (ii) amendments,
entered into in accordance with Customary Practices and
Credit Standards and Collections Policies, which do not
reduce the amount or extend the maturity of required
Payments, (iii) reductions in the amount of required
principal Payments under such Contract which do not alter
the aggregate amount of Collections anticipated to be
received in the Collection Account in respect of such
Contract (as a result of any release of prepaid premiums for
Credit Life Insurance), and (iv) modifications in the
applicability of a PAC (which modification will, among other
things, result in a change in the relevant Contract Rate).
(e) Upon the death of an Obligor, the Servicer
shall, on behalf of the Collateral Agent, timely file a
claim with respect to any policy of Credit Life Insurance
with respect to the related Pledged Contract. The
Collateral Agent agrees to cooperate in the prosecution of
each such claim.
(f) The Servicer shall, on behalf of the
Collateral Agent, promptly take all such actions as shall be
required to cancel any policy of Credit Life Insurance
relating to any Pledged Contract which becomes a Defaulted
Contract or Defective Contract the release of which has not
been effected on or prior to the date required therefor
under Section 7.11(b), and, whether or not such release has
been effected, to recover any unearned premium in respect of
such policy for the benefit of the Collateral Agent, for
payment or deposit into the Collection Account. The
Collateral Agent agrees to cooperate in the prosecution of
each such claim.
SECTION 9.06. Collateral Agent to Cooperate.
Upon request of a Servicing Officer, but subject to all
other provisions hereof, the Collateral Agent shall perform
such other acts as are reasonably requested by the Servicer
(including, without limitation, the execution of documents)
and otherwise cooperate with the Servicer upon the
reasonable request of the Servicer in enforcement of rights
and remedies of each of Triple-A, the L/C Bank, the Surety,
the Collateral Agent and the Administrative Agent with
respect to Pledged Contracts.
SECTION 9.07. Other Matters Relating to the
Servicer. The Servicer is hereby authorized and empowered
(i) to make withdrawals from time to time from the
Collection Account when specifically permitted pursuant to
the terms of Section 7.06 and the Collection Account
Agreement, but only to the extent that the Collateral Agent
has not otherwise instructed the Collection Account Bank in
accordance with the terms hereof and of the Collection
Account Agreement, (ii) to advise the Collateral Agent in
connection with the amount of permitted withdrawals from the
Collection Account and the Spread Account in accordance with
the provisions hereof, (iii) to the extent permitted
pursuant to the other terms and conditions of this
Agreement, to execute and deliver, on behalf of the
Borrower, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge,
and all other comparable instruments, with respect to the
Pledged Contracts and, after the delinquency of any Pledged
Contract and to the extent permitted under and in compliance
with applicable law and regulations, to commence enforcement
proceedings with respect to such Pledged Contract including,
without limitation, the exercise of rights under any power-
of-attorney granted in any Pledged Contract and (iv) to make
any filings, reports, notices, applications, registrations
with, and to seek any authorization from the Securities and
Exchange Commission and any state securities authority on
behalf of the Borrower as may be necessary or advisable to
comply with any federal or state securities or reporting
requirements laws.
SECTION 9.08. Servicer Insurance Coverage. The
Servicer shall maintain, and shall cause FCI to maintain,
separate errors and omissions coverage insuring the
Collateral Agent's, the Administrative Agent's, Triple-A's,
the Surety's and the L/C Bank's respective risks against
loss through errors of the Servicer's, the Borrower's or
FCI's officers and employees involved in the servicing of
Contracts covering such actions and in an amount no less
than $2,000,000 per occurrence and naming the Collateral
Agent for the benefit of itself, the Administrative Agent,
Triple-A, the Surety and the L/C Bank, as a loss payee. The
Servicer shall also maintain, and shall cause FCI to
maintain, a separate fidelity bond coverage insuring the
Collateral Agent's, the Administrative Agent's, Triple-A's,
the L/C Bank's and the Surety's respective risks against
losses through wrongdoing of the Servicer's or FCI's
officers and employees involved in the servicing of
Contracts covering such actions and in an amount no less
than $2,000,000 per occurrence and naming the Collateral
Agent, for the benefit of itself, the Administrative Agent,
Triple-A, the Surety and the L/C Bank, as an additional loss
payee. Each such insurance policy required pursuant to this
Section 9.08 shall provide for written notice to the
Collateral Agent by the insurer at least 30 days prior to
the cancellation of such insurance. Evidence reasonably
satisfactory to the Collateral Agent of all renewals or
replacements necessary to maintain such insurance from time
to time in force shall be delivered by the Servicer to the
Collateral Agent prior to the expiration date of the then
current insurance policy.
SECTION 9.09. Servicing Compensation. As
compensation for its servicing activities hereunder, the
Servicer shall be entitled to receive, on the Settlement
Date next succeeding the end of each Calculation Period (the
"Servicing Fee Payment Date"), the servicing fee (the
"Servicing Fee") which shall be equal to one twelfth the
product of 0.375% times the Contract Pool Principal Balance
determined as of the end of such Calculation Period.
SECTION 9.10. Costs and Expenses. (a) The costs
and expenses incurred by the Servicer in carrying out its
duties hereunder, including without limitation the fees and
expenses incurred in connection with the enforcement of
Pledged Contracts, shall be paid by the Servicer and the
Servicer shall not be entitled to reimbursement hereunder.
(b) The Servicer agrees to pay all reasonable
costs and disbursements in connection with the perfection
and maintenance of perfection, as against all third parties,
of all of the right, title and interest of each of the
Collateral Agent, the Administrative Agent, Triple-A, the
Surety and the L/C Bank, in and to the Collateral to the
extent that such payments and disbursements are not made by
the Borrower in accordance with Section 7.03.
SECTION 9.11. Servicer Representations and
Warranties. FAC, as initial Servicer, hereby makes, and
each Successor Servicer by acceptance of its appointment
hereunder shall make, the following representations and
warranties, (1) in the case of the initial Servicer, as of
the Closing Date and the Effective Restatement Date, (2) in
the case of any Successor Servicer, the date of such
appointment, and (3) in any case, (x) as of each Contract
Grant Date, (y) as of each date of issuance, amendment,
extension or renewal of the Letter of Credit, and (z) (other
than in the case of the representation set forth in
subsection (h) below) on and as of the commencement of each
Interest Period occurring hereunder, to each of Triple-A,
the Collateral Agent, the Administrative Agent, the Surety
and the L/C Bank:
(a) Due Incorporation and Good Standing. The
Servicer is a corporation, state banking corporation or
national banking association duly organized, validly
existing and in good standing under the applicable laws of
its jurisdiction of organization or incorporation and has,
in all material respects, full corporate power and authority
and legal right to own its properties and conduct its
business (including the servicing of Contracts) as such
properties are presently owned and such business is
presently conducted, and to execute, deliver and perform its
obligations under each of the Facility Documents to which it
is a party. The Borrower is duly qualified to do business
and is in good standing as a foreign corporation, and has
obtained all necessary licenses and approvals in each
jurisdiction in which the servicing of the Pledged Contracts
in accordance with the terms of this Credit Agreement
requires such qualification, except where failure to qualify
or to obtain such licenses and approvals would not have a
Material Adverse Effect.
(b) Due Authorization and No Conflict. The
execution, delivery and performance by the Servicer of each
of the Facility Documents to which it is a party, and the
consummation of each of the transactions contemplated hereby
and thereby, have in all cases been duly authorized by the
Servicer by all necessary corporate action, and do not
contravene (i) the Servicer's charter or by-laws, (ii) any
law, rule or regulation applicable to the Servicer,
(iii) any contractual restriction contained in any inden-
ture, loan or credit agreement, lease, mortgage, security
agreement, bond, note, or other agreement or instrument
binding on or affecting the Servicer or its property or
(iv) any order, writ, judgment, award, injunction or decree
binding on or affecting the Servicer or its property. Each
of the Facility Documents to which the Servicer is a party
have been duly executed and delivered on behalf of the
Servicer.
(c) Governmental and Other Consents. All
approvals, authorizations, consents, orders or other actions
of, and all registration, qualification, designation,
declaration, notice to or filing with, any Person or of any
governmental body or official required in connection with
the execution and delivery by the Servicer of any of the
Facility Documents to which it is a party, the consummation
of the transactions contemplated hereby or thereby, the
performance of and the compliance with the terms hereof or
thereof, have been obtained, except where the failure so to
do would not have a Material Adverse Effect.
(d) Enforceability of Facility Documents. Each
of the Facility Documents to which the Servicer is a party
have been duly and validly executed and delivered by the
Servicer and constitute the legal, valid and binding
obligation of the Servicer enforceable in accordance with
their respective terms, except as enforceability may be
subject to or limited by Debtor Relief Laws or by general
principles of equity (whether considered in a suit at law or
in equity).
(e) No Litigation. There are no proceedings or
investigations pending or, to the best knowledge of the
Servicer, threatened against the Servicer before any court,
regulatory body, administrative agency, or other tribunal or
governmental instrumentality (i) asserting the invalidity of
this Credit Agreement or any of the other Facility
Documents, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Credit Agreement or
any of the other Facility Documents, (iii) seeking any
determination or ruling that would adversely affect the
performance by the Servicer of its obligations under this
Credit Agreement or any of the other Facility Documents,
(iv) seeking any determination or ruling that would
adversely affect the validity or enforceability of this
Credit Agreement or any of the other Facility Documents, or
(v) seeking any determination or ruling that would, if
adversely determined, be reasonably likely to have a
Material Adversely Effect.
(f) Daily Reports and Borrowing Certificates.
Each Daily Report, Settlement Report, Borrowing Base
Certificate and any other report or certificate delivered by
the Servicer pursuant to this Credit Agreement shall be true
and correct in all material respects as of the date such
report or certificate is delivered.
(g) Servicer Default. No Servicer Default has
occurred and is continuing.
(h) No Material Adverse Effect. No event or
circumstance having a Material Adverse Effect has occurred
since the Balance Sheet Date.
The representations and warranties set forth in
this Section 9.11 shall survive the Grant of Pledged
Contracts to the Collateral Agent. Upon a discovery by the
Borrower, the Servicer or the Collateral Agent of a material
breach of any of the foregoing representations and
warranties, the party discovering such breach shall give
prompt written notice to the other such parties.
SECTION 9.12. Additional Covenants of the
Servicer. From the Closing Date until the later of the
Termination Date or the Collection Date, unless the
Collateral Agent shall otherwise consent in writing:
(a) Change in Payment Instructions to Obligors.
The Servicer shall not add or terminate any bank as a Lock-
Box Bank from those listed in Exhibit F or make any change
in its instructions to Obligors regarding payments to be
made to any Lock-Box Bank, unless the Collateral Agent shall
have received (i) 30 Business Days' prior notice of such
addition, termination or change and (ii) prior to the
effective date of such addition, termination or change,
(x) executed copies of Lock-Box Agreements executed by each
new Lock-Box Bank, the Borrower and the Collateral Agent
(and, at the option of the Collateral Agent, the Servicer)
and (y) copies of all agreements and documents signed by
either the Borrower or the respective Lock-Box Bank with
respect to any new Lock-Box Account.
(b) Collections. If the Servicer shall receive
any Collections, the Servicer shall hold such Collections in
trust for the benefit of the Collateral Agent and deposit
such Collections into a Lock-Box Account or the Collection
Account within one Business Day following Borrower's receipt
thereof, and (ii) if any of FAC, FCI or the Borrower
receives any Collections, the Servicer shall cause FAC, FCI
or the Borrower, as the case may be, to hold such
Collections in trust for the benefit of the Collateral Agent
and deposit such Collections into a Lock-Box Account or the
Collection Account within one Business Day following such
Person's receipt thereof.
(c) Compliance with Requirements of Law. The
Servicer shall maintain in effect all qualifications
required under all relevant laws, rules, regulations and
orders in order to service each Pledged Contract and shall
comply in all material respects with all applicable laws,
rules, regulations and orders with respect to it, its
business and properties, and the servicing of the Pledged
Contracts (including, without limitation, the laws, rules
and regulations of each state governing the sale of time
share contracts).
(d) Protection of Rights. The Servicer shall
take no action which would impair in any material respect
the rights of any of the Collateral Agent, the
Administrative Agent, Triple-A, the Surety or the L/C Bank,
in the Collateral.
(e) Credit Standards and Collection Policies.
The Servicer shall comply in all material respects with the
Credit Standards and Collection Policies and Customary
Practices in regard to each Pledged Contract.
(f) Notice to Obligors. The Servicer shall
ensure that the Obligor of each Contract either
(1) shall have been instructed, pursuant to the
Servicer's routine distribution of a periodic statement
to such Obligor next succeeding
(A) any Contract Grant Date, or
(B) the day on which a PAC ceased to apply to
such Contract, in the case of a Pledged Contract
formerly subject to a PAC,
but in no event later than the then next succeeding due
date for Payment under the related Pledged Contract, to
remit Payments thereunder to a Post Office Box for
credit to a Lock-Box Account, or directly to a Lock-Box
Account, in each case maintained at a Lock-Box Bank
pursuant to the terms of a Lock-Box Agreement
substantially in the form of Exhibit H hereto, or
(2) has entered into a PAC, pursuant to which a
deposit account of such Obligor is made subject to a
pre-authorized debit in respect of Payments as they
become due and payable, and the Borrower has, and has
caused each of the Servicer, a Lock-Box Bank and/or the
Collection Account Bank, to take all necessary and
appropriate action to ensure that each such pre-
authorized debit is credited directly to a Lock-Box
Account.
(g) Relocation of Servicer. The Servicer shall
give the Collateral Agent at least 30 days prior written
notice of any relocation of any office from which it
services Contracts or keeps records concerning the Pledged
Contracts or of its principal place of business and chief
executive office and whether, as a result of such
relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing
statement and shall file such financing statement or
amendments as may be necessary to continue the perfection of
the Collateral Agent's security interests in the Pledged
Contracts, and Related Collateral and the proceeds thereof.
The Servicer shall at all times maintain each office from
which it services Contracts and its principal place of
business and chief executive office within the United States
of America.
(h) Instruments. The Servicer shall not remove
any portion of the Collateral that consists of money or is
evidenced by an instrument, certificate or other writing
(including any Contract) from the jurisdiction in which it
was held at the date the most recent Opinion of Counsel was
delivered pursuant to Section 5.01(m) (or from the
jurisdiction in which it was held as described in the
Opinion of Counsel delivered at the Effective Restatement
Date if no Opinion of Counsel has yet been delivered
pursuant to Section 5.01(m)) unless the Collateral Agent
shall have first received an Opinion of Counsel to the
effect that the Primary Lien and L/C Bank Lien created by
this Credit Agreement with respect to such property will
continue to be maintained after giving effect to such action
or actions; provided, however, that each of the Collateral
Agent and the Servicer may remove Pledged Contracts from
such jurisdiction to the extent necessary to satisfy any
requirement of law or court order, in all cases in
accordance with the provisions of the Custodial Agreement
and Section 5.01(n).
(i) Contract Schedule. The Servicer shall
promptly amend the Contract Schedule to reflect terms or
discrepancies that become known to the Servicer after the
Closing Date.
(j) Segregation of Collections. The Servicer
shall prevent the deposit into any of the Lock-Box Accounts,
the Collection Account, the L/C Cash Collateral Account or
the Spread Account of any funds other than Collections in
respect of the Pledged Contracts,(provided that this
covenant shall not be breached to the extent that items of
payment, which are not material in the aggregate, have been
mistakenly forwarded by an Obligor directly to any of FCI,
FAC or any of their respective Affiliates, or deposited into
a lock-box account maintained for the benefit of FNBB under
its credit arrangements with FCI and FAC) and, to the extent
that any such funds are nevertheless deposited into any of
such Lock-Box Accounts, the Collection Account, the L/C Cash
Collateral Account or the Spread Account, promptly segregate
such funds and provide for the remittance of such funds to
the owner thereof.
(k) Terminate or Reject Contracts. Without
limiting anything in Section 5.02(b), the Servicer shall not
terminate or reject any Pledged Contract prior to the end of
the term of such Contract, whether such rejection or early
termination is made pursuant to an equitable cause, statute,
regulation, judicial proceeding or other applicable law
(including, without limitation, Section 365 of the
Bankruptcy Code), unless prior to such termination or
rejection, such Pledged Contract and any related Collateral
have been released from both of the Primary Lien and the L/C
Bank Lien (x) pursuant to Section 7.11, or (y) pursuant to
Section 7.12 in connection with the satisfaction of the
remarketing obligations described therein.
(l) Change in Business or Credit and Collection
Policy. The Servicer shall not make any change in the
Credit Standards and Collection Policies, or deviate from
the exercise of Customary Practices, which change or
deviation would materially impair the value or
collectibility of any Pledged Contract.
(m) Keeping of Records and Books of Account. The
Servicer shall maintain and implement administrative and
operating procedures (including, without limitation, an
ability to recreate records evidencing the Pledged Contracts
in the event of the destruction or loss of the originals
thereof) and keep and maintain, all documents, books,
records and other information reasonably necessary or
advisable for the collection of all Pledged Contracts
(including, without limitation, records adequate to permit
the daily identification of all Collections with respect to,
and adjustments of amounts payable under, each Pledged
Contract).
SECTION 9.13. Advances by Servicer. On or before
the close of business on the Business Day prior to each
Settlement Date and each Interest Payment Date, the Servicer
shall deposit in the Collection Account an amount equal to
Servicer Advances then due; provided, however, such a
Servicer Advance will only be required to be deposited by
the Servicer if there are insufficient funds in the
Collection Account to pay amounts then owing to the
Collateral Agent, the Administrative Agent, Triple-A, the
Surety or the L/C Bank, upon application of such funds in
accordance with payment priorities contained in Sections
7.06(b), (c) and (d) of this Credit Agreement; and provided
further, the Servicer shall only be required to make such a
Servicer Advance if the Servicer in good faith believes that
such Servicer Advance, if made, would not be a
Nonrecoverable Advance. Servicer Advances, if any, will be
for specific Delinquent Contracts which the Servicer
identifies.
SECTION 9.14. FCI and the Servicer.
(a) Agent for the Servicer. The Servicer (to the
extent that the Servicer is FAC) may, and is hereby
authorized to, perform any of its servicing responsibilities
through FCI, in its capacity as agent for the Servicer, and
FCI shall have all the rights and powers of the Servicer
with respect to the Pledged Contracts under this Credit
Agreement, but the Servicer shall not thereby be released
from any of its obligations under this Credit Agreement.
Notwithstanding the performance of any of its obligations
hereunder by FCI, the Servicer shall remain obligated and
liable to each of Triple-A, the Collateral Agent, the
Administrative Agent, the Surety and the L/C Bank, for the
servicing of the Pledged Contracts in accordance with the
provisions of this Credit Agreement, without any diminution
of such obligation or liability by virtue of such
performance by FCI. The fees and expenses of FCI in its
capacity as agent for the Servicer shall be as agreed
between the Servicer and FCI from time to time and none of
Triple-A, the Collateral Agent or the Administrative Agent,
the Surety or the L/C Bank, shall have any responsibility
therefor.
(b) Guaranty of Servicer Obligations. (i) FCI
hereby irrevocably and unconditionally guarantees to each of
the Collateral Agent, the Administrative Agent, Triple-A,
the Surety and the L/C Bank, the due and punctual
performance by FAC of all of its obligations in its capacity
as Servicer hereunder (collectively, the "FAC Servicer
Obligations").
(ii) It shall not be a condition to the accrual
of the obligations of FCI hereunder that the Collateral
Agent or any other Person shall have first made any request
of or demand upon or given any notice to FAC or have
initiated any action or proceeding against FAC in respect
thereof. The Collateral Agent may proceed to enforce the
obligations of FCI under the foregoing paragraph without
first pursuing or exhausting any right or remedy which any
of the Collateral Agent, the Administrative Agent, Triple-A,
the Surety or the L/C Bank, may have against FAC or any
other Person, the Collateral or any other property.
(iii) FCI hereby agrees that its obligations
under this Section 9.14(b) shall be unconditional,
irrespective of (A) the validity, enforceability, avoidance,
subordination, discharge, or disaffirmance by any Person
(including a trustee in bankruptcy) of the FAC Servicer
Obligations, any Pledged Contract or any of the other
Collateral, (B) the absence of any attempt to collect any
Payments from the Obligor related thereto or any guarantor,
or to collect the FAC Servicer Obligations from FAC or any
other Person, (C) the waiver, consent, extension,
forbearance or granting of any indulgence by any of the
Collateral Agent, the Administrative Agent, Triple-A, the
Surety or the L/C Bank, with respect to any provision of any
instrument evidencing the FAC Servicer Obligations or any
Pledged Contract, (D) any change of the time, manner or
place of performance of, or in any other term of any of the
FAC Servicer Obligations or any Pledged Contract, including
without limitation, any amendment to or modification of any
of the Facility Documents, (E) any law, regulation or order
of any jurisdiction affecting any term of any of the FAC
Servicer Obligations, any Pledged Contract, or rights of any
of the Collateral Agent, the Administrative Agent, Triple-A,
the Surety or the L/C Bank, (F) the failure by any of the
Collateral Agent, the Administrative Agent, Triple-A, the
Surety or the L/C Bank to take any steps to perfect and
maintain perfected its respective interest in any
Collateral, (G) any exchange or release of any Collateral or
other property in which an interest was acquired pursuant to
the Facility Documents, (H) any failure to obtain any
authorization or approval from, or to notify or file with,
any governmental authority or regulatory body, which
authorization, approval, notification or filing was required
in connection with the performance of the obligations of FAC
or FCI hereunder or (I) any impossibility or
impracticability of performance, illegality, force majeure,
any act of government, or other circumstances which might
constitute a defense available to, or a discharge of, the
FAC Servicer Obligations or any of FCI's obligations
hereunder, or any other circumstance, event or happening
whatsoever whether foreseen or unforeseen and whether
similar to or dissimilar to anything referred to above, or
(J) any termination of FAC as Servicer, and appointment of a
Successor Servicer.
(iv) FCI hereby waives promptness, diligence,
notice of default by FAC, notice of the incurrence of any
FAC Servicer Obligations and any other notice with respect
to any of the FAC Servicer Obligations and the Facility
Documents and any other document related thereto. FCI
hereby warrants that its has adequate means to obtain from
FAC on a continuing basis, all information concerning the
financial condition of FAC and the Collateral, and that it
is not relying any of the Collateral Agent, the
Administrative Agent, Triple-A, the Surety or the L/C Bank
to provide such information either now or in the future.
(v) FCI further agrees that:
(A) its obligations under this Section
9.14(b) shall not be limited by any valuation,
estimation or disallowance made in connection with any
proceedings involving FAC filed under the Bankruptcy
Code (whether pursuant to Section 502 thereof or any
other section thereof); and
(B) the Collateral Agent shall not be under
any obligation to ▇▇▇▇▇▇▇▇ any assets in favor of or
against or in payment of any or all of the FAC Servicer
Obligations.
(vi) FCI hereby waives all set-offs and
counterclaims and all presentments, demands for performance,
notices of nonperformance, protests, notices of protest,
notices of dishonor and notices of acceptance of or reliance
upon this Credit Agreement. FCI's obligations under this
Section 9.14(b) shall not be limited if any of the
Collateral Agent, the Administrative Agent, Triple-A, the
Surety or the L/C Bank, is precluded for any reason
(including without limitation, the application of the
automatic stay under Section 362 of the Bankruptcy Code)
from enforcing or exercising any right or remedy with
respect to the FAC Servicer Obligations.
(vii) FCI hereby agrees not to exercise or assert
any rights which it may acquire by way of subrogation under
this Section 9.14(b), if any, unless and until all of the
FAC Servicer Obligations shall have been paid and/or
performed in full and in cash. If any payment shall be made
to FCI on account of any subrogation rights at any time
prior to the occurrence of the events described in the
preceding sentence, each and every amount so paid will be
held in trust for the benefit of the Collateral Agent, the
Administrative Agent, Triple-A, the Surety and the L/C Bank
and forthwith be paid to the Collateral Agent to be credited
and applied to the FAC Servicer Obligations to the extent
then unsatisfied, in accordance with the terms of this
letter of undertaking or any document delivered in
connection therewith.
(viii) The agreements of FCI in this Section
9.14(b) shall remain in full force and effect until all of
the FAC Servicer Obligations shall have been performed in
full; provided that to the extent that FAC makes a payment,
transfer or deposit to any of the Borrower, the Collateral
Agent, the Administrative Agent, Triple-A, the Surety or the
L/C Bank, which payment, transfer or deposit (or any part
thereof) is subsequently invalidated, declared to be
fraudulent or preferential or set aside and required to be
repaid to FAC, its estate, trustee or receiver or any other
Person, under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such
repayment, the agreements of FCI hereunder in respect of
such FAC Servicer Obligations or part thereof which had been
so repaid, shall be reinstated and continued in full force
and effect as of the date such initial payment, transfer or
deposit occurred.
(ix) FCI acknowledges that (i) performance of all
of the terms contained in this Section 9.14(b) is necessary,
and (ii) substantial performance shall not be deemed
sufficient performance. In addition, FCI consents to an
award of specific performance if sought by the Collateral
Agent in the event a court of competent jurisdiction
determines a breach of any of its obligations hereunder to
have occurred.
(x) In the event that, notwithstanding anything
in this Section 9.14(b) to the contrary, FCI has the right
under applicable law to revoke its obligations hereunder,
this Credit Agreement shall continue in full force and
effect until a written revocation executed by FCI,
specifically referring to this Section 9.14(b), is received
by the Collateral Agent at its address for notice set forth
herein. Any such revocation shall not affect the rights of
any of the Collateral Agent, the Administrative Agent,
Triple-A, the Surety or the L/C Bank hereunder with respect
to any of the FAC Servicer Obligations (including without
limitation any FAC Servicer Obligations which are contingent
or unmatured) which arose on or prior to the date on which
the above-referenced revocation was received by the
Collateral Agent.
(c) Management of Developments. FCI hereby
covenants and agrees that from the Closing Date until the
later of the Termination Date or the Collection Date, it
shall
(i) with respect to Developments where FCI or any
Subsidiary of FCI maintains primary or substantial
responsibility for management, administration or other
services of a similar nature, whether by way of
contract or pursuant to any relevant VOI Regime, do or
cause to be done all things necessary to maintain each
such Development (including, without limitation, all
grounds, waters and improvements thereon) in at least
as good condition, repair and working order as would be
customary for prudent managers of similar time share
properties; and
(ii) with respect to Developments where FCI or any
Subsidiary of FCI does not maintain primary or
substantial responsibility for management,
administration or other services of a similar nature,
do or cause to be done all things which it may
accomplish with a reasonable amount of cost or effort,
consistent with its relationship (whether contractual
or otherwise) with the Person having such primary or
substantial responsibility for management,
administration or other services), in order to maintain
each such Development (including, without limitation,
all grounds, waters and improvements thereon) in at
least as good condition, repair and working order as
would be customary for prudent managers of similar time
share properties.
(d) Management of FairShare Plus Program. FCI
hereby covenants that from the Closing Date until the later
of the Termination Date or the Collection Date, it shall
perform all of its duties and responsibilities related to
the operation and management of the FairShare Plus Program,
as described more fully in the FairShare Plus Agreement.
(e) Future Transactions. FCI hereby agrees that,
at all times prior to the earlier to occur of (x) the
occurrence of the Scheduled Termination Date, and (y) the
first date upon which the aggregate principal balance of
Triple-A Loans equals or exceeds the Facility Limit;
(i) CapMAC has the exclusive right to
provide or arrange for the provision of financing
(whether or not by Triple-A pursuant to the Credit
Agreement) for all Contracts owned by FCI or FAC
which, if included in the Contract Pool, would
constitute Eligible Contracts and would not give
rise to the existence of, or any increase in any
existing balance of (as the case may be), a Pool
Limit Excess (collectively, "Included Contracts");
and
(ii) Each of FCI and FAC shall be required to
offer to CapMAC, in writing, the first right to
provide or arrange for the provision of financing
(whether or not by Triple-A pursuant to the Credit
Agreement) for all Contracts other than Included
Contracts ("Excluded Contracts") or any portion of
such Excluded Contracts for which financing is
sought by FCI or FAC (provided, however, that in
the event that CapMAC refuses, or otherwise fails
within [thirty (30) days] of its receipt of such
written offer to so provide or arrange for the
provision of financing for all or a portion of the
Excluded Contracts so offered for financing (or to
commit to so provide or arrange for the provision
of financing, as the case may be) neither FCI nor
FAC shall be deemed to have any further obligation
under this clause (ii) to offer any additional
opportunity to CapMAC to provide or arrange for
the provision of financing for (A) the portion of
such Excluded Contracts so declined by CapMAC; or
(B) any other Excluded Contracts of the same
class).
By way of example, and not limitation, for
purposes of the foregoing sentence, Excluded Contracts in
respect of VOIs or Lots located at a single Development (as
described in clause (v) of the defintion of "Pool Limit
Excess") shall be deemed to be Excluded Contracts of the
same "class", and likewise, Contracts having an Equity
Percentage of less than 10% (as described in clause (z) of
the definition of "Eligible Contract") shall be deemed to be
Excluded Contracts of the same "class"; provided, however,
that nothing in this Section 9.14(e) shall preclude FCI or
FAC from making borrowings under the FNBB/FCI Agreement or
the FNBB/FAC Agreement secured by Contracts and related
property, or under any other committed financing facility
provided or arranged by FNBB which is substantially
equivalent in form and substance to the FNBB/FAC Agreement
and FNBB/FCI Agreement.
Notwithstanding the existence of the exclusive
rights described above, CapMAC shall have no obligation
whatsoever to provide or arrange for any such financing of
Contracts (other than in connection with the making of
Triple-A Loans on a Contract Grant Date, to the extent that
Triple-A is committed to make such Triple-A Loans
hereunder), and for the avoidance of doubt the parties
hereto acknowledge that CapMAC may not provide or arrange
for any such financing for any reason, including, without
limitation, CapMAC's inability, within a reasonable period
of time after FCI's or FAC's request for such financing, to
arrange (x) a financing which would constitute an
"investment grade" risk to the Person providing such
financing, without giving effect to any financial guaranty
surety policy issued by CapMAC, and/or (y) adequate
committed liquidity for such financing (to the extent that
such liquidity is deemed necessary as a result of the manner
of execution of the proposed facility).
SECTION 9.15. The Servicer not to Resign. The
Servicer shall not resign from the obligations and duties
hereby imposed on it hereunder except upon determination
that (i) the performance of its duties hereunder is no
longer permissible under applicable law and (ii) there is no
reasonable action which can be taken to make the performance
of its duties hereunder permissible under applicable law.
Any such determination permitting the resignation of the
Servicer pursuant to clause (i) hereof shall be evidenced by
an Opinion of Counsel to such effect delivered to the
Collateral Agent. No such resignation shall be effective
until a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in
accordance with Section 11.02 hereof.
SECTION 9.16. Merger or Consolidation of, or
Assumption of the Obligations of Servicer.
The Servicer shall not consolidate with or merge
into any other corporation or convey or transfer its
properties and assets substantially as an entirety to any
Person, unless:
(i) the corporation formed by such
consolidation or into which the Servicer is merged
or the Person which acquires by conveyance or
transfer the properties and assets of the Servicer
substantially as an entirety shall be a
corporation organized and existing under the laws
of the United States of America or any state or
the District of Columbia and, if the Servicer is
not the surviving entity, shall expressly assume
by an agreement supplemental hereto, executed and
delivered to the Collateral Agent in form
satisfactory to the Collateral Agent, the
performance of every covenant and obligation of
the Servicer hereunder;
(ii) the Servicer has delivered to the
Collateral Agent an Officer's Certificate and an
Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and
such supplemental agreement comply with this
Section 9.16, and all conditions precedent
provided for herein relating to such transaction
have been satisfied;
(iii) each of CapMAC and the L/C Bank has
expressly approved such merger, consolidation,
conveyance or transfer; and
(iv) immediately prior to and after the
consummation of such merger, consolidation,
conveyance or transfer, no event which, with
notice or passage of time or both, would become a
Servicer Event of Default under the terms of this
Agreement shall have occurred and be continuing.
SECTION 9.17. Examination of Records. Each of
the Borrower and the Servicer shall clearly and
unambiguously identify each Pledged Contract in its
respective computer or other records to reflect that such
Pledged Contract has been Granted to the Collateral Agent
pursuant to this Agreement. Each of the Borrower and the
Servicer shall, prior to the sale or transfer to a third
party of any Contract similar to the Pledged Contracts held
in its custody, examine its computer and other records to
determine that such Contract is not a Pledged Contract.
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
SECTION 10.01. Events of Default. Each of the
following events shall constitute a "Event of Default"
within the meaning of this Credit Agreement:
(a) The occurrence of a Servicer Default; or
(b) The Borrower, the Servicer (if the Servicer
is FAC or any Affiliate thereof) or FCI shall fail to make
any payment or deposit to be made by it when due hereunder,
and, solely in the case of any such payments, or deposits,
which do not constitute payments or deposits of principal or
interest on the Triple-A Loans, such failure shall remain
unremedied for three Business Days after written notice from
the Collateral Agent; or
(c) The Borrower shall fail to perform or observe
any other term, covenant or agreement contained in Sections
5.01 or 5.02, which failure described in this subsection (c)
shall remain unremedied for five Business Days after written
notice from the Collateral Agent; or
(d) Any representation or warranty made or deemed
to be made by the Borrower, or any of its officers or
employees, under or in connection with this Credit
Agreement, any other Facility Document, any Settlement
Report or other information or report delivered pursuant
hereto, other than any representation or warranty set forth
in any of Sections 4.02, 4.03 and 4.04 of this Credit
Agreement, shall prove to have been false or incorrect in
any material respect when made or deemed to be made; or
(e) The Borrower shall fail to perform or observe
any other term, covenant or agreement contained in this
Credit Agreement or in any other Facility Document on its
part to be performed or observed and any such failure shall
remain unremedied for ten Business Days after written notice
from the Collateral Agent; or
(f) (1) The Primary Lien shall for any reason,
except in the case of the releases contemplated pursuant to
Section 7.11 and 7.12, cease or otherwise fail to be a valid
and perfected first priority security interest in the
Collateral in favor of the Collateral Agent; or (2) The L/C
Bank Lien shall for any reason, except in the case of the
releases contemplated pursuant to Section 7.11 or 7.12,
cease or otherwise fail to be a valid and perfected senior
security interest in the Collateral, subordinated only to
the Primary Lien;
(g) (i) An Insolvency Event shall occur with
respect to the Borrower; or (ii) the Borrower shall take any
corporate action to authorize the filing of any such
Insolvency Proceeding; or
(h) As of the close of business on any Settlement
Date, there shall exist any (1) Borrowing Base Shortfall,
(2) O/C Shortfall or (3) Spread Account Shortfall; or
(i) The Seller shall cease to own 100% of the
issued and outstanding stock of the Borrower, or FCI shall
cease to own 100% of the issued and outstanding stock of the
Seller; or
(j) There shall have occurred, since the
Effective Restatement Date, a material adverse change in the
financial condition of the Borrower or there shall have
occurred any event which materially and adversely affects
the collectibility of the Pledged Contracts generally or the
ability of the Borrower to perform hereunder; or
(k) Borrower shall become (1) an "investment
company" within the meaning of the Investment Company Act of
1940, as amended, or under the control of such an
"investment company", (2) a "public utility company" or a
"holding company," a "subsidiary company" or an "affiliate"
of any public utility company within the meaning of Section
2(a)(5), 2(a)(7), 2(a)(8) or 2(a)(11) of the Public Utility
Holding Company Act of 1935, or (3) otherwise subject to any
other federal or state statute or regulation limiting its
ability to incur or pay indebtedness; or
(l) The Seller shall fail duly to observe and
perform any covenant or agreement set forth in the
Receivables Purchase Agreement, which failure continues
unremedied for a period of 30 days after the earlier of (i)
the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Seller
by the Borrower, the Servicer or the Collateral Agent, as
the case may be, or (ii) the date on which the Seller has
actual knowledge thereof; or
(m) Either of Triple-A or the Surety shall
determine that continuation of this Credit Agreement without
exercise of remedies under Section 9.02 will impose a
material adverse regulatory impact on Triple-A or the
Surety, as the case may be; or
(n) [Reserved]
(o) There shall have occurred a draw on the
Letter of Credit (other than a draw solely as a result of
the occurrence of an Early Draw Event) or a transfer from
available funds in the L/C Cash Collateral Account to the
Collection Account pursuant to Section 8.13(e); or
(p) [Reserved]
(q) [Reserved]
(r) Either (i) the fraction (stated as a
percentage) of (A) the sum of the Delinquency Percentages
for the three most recently concluded Calculation Periods,
divided by (B) three, or (ii) the fraction (stated as a
percentage) of (A) the sum of the Delinquency Percentages
for the twelve most recently concluded Calculation Periods
divided by (B) twelve is, at any time, greater than 1.5%; or
(s) With respect to a Contract Sub-Pool, either
(i) the product of four times the sum of the Default
Percentages for the three most recently concluded
Calculation Periods, or (ii) the sum of the Default
Percentages for the twelve most recently concluded
Calculation Periods, is, at any time, for a cumulative (but
not necessarily consecutive) period of more than four
Calculation Periods occurring in any 12-month period,
greater than the percentage set forth opposite the relevant
Calculation Period set forth below:
123
Calculation Period Relevant
Percentage
Ending on and after the Contract 6.5%;
Grant Date for such Contract
Sub-Pool, but before the first
anniversary of such Contract
Grant Date
Ending on and after the first 5.5%;
anniversary of such Contract Grant
Date but before the second anniversary
of such Contract Grant Date
Ending on and after the second 4.5%;
anniversary of such Contract
Grant Date but before the third
anniversary of such Contract
Grant Date
Ending on and after the third 4.0%;
anniversary of such Contract
Grant Date but before the fourth
anniversary of such Contract
Grant Date
Ending at any time thereafter 3.0%; or
(t) The fraction (stated as a percentage) of (i)
the aggregate outstanding Principal Balance of all Contracts
of a single Contract Sub-Pool (other than 1995 Contracts)
which became Trigger Contracts on or before the last day of
the most recently concluded Calculation Period (in each case
determined as of the date on which such Contract became a
Trigger Contract), divided by (ii) the original Principal
Balance of each Special Contract (other than a 1995
Contract) in such Contract Sub-Pool (in each case determined
as of the relevant Contract Grant Date), is at any time, for
a cumulative (but not necessarily consecutive) period of
more than four Calculation Periods occurring in any 12-month
period, greater than the percentage set forth opposite the
relevant Calculation Period set forth below:
Calculation Period Relevant Percentage
Ending on and after such 6.0%;
Contract Grant Date, but
before the first anniversary
of such Contract Grant Date
Ending on and after the first 8.0%
anniversary of such Contract
Grant Date, but before the
second anniversary of such
Contract Grant Date
Ending on and after the second 9.5%
anniversary of such Contract
Grant Date, but before the third
anniversary of such Contract
Grant Date
Ending on and after the third 11.0%;
anniversary of such Contract
Grant Date, but before the
fourth anniversary of such
Contract Grant Date
Ending on and after the fourth 12.5%;
anniversary of such Contract
Grant Date, but before the
fifth anniversary of such
Contract Grant Date
Ending on and after the fifth 13.5%;
anniversary of such Contract
Grant Date, but before the
sixth anniversary of such
Contract Grant Date
Ending at any time thereafter 14.5%; or
(u) Either (i) the product of (x) four (4)
multiplied by (y) the fraction (stated as a percentage) of
(A) the sum of the excess (if any) of the Contract Yield
over the Contract Expenses for each of the three most
recently concluded Calculation Periods, divided by (B) the
average daily Eligible Contract Pool Principal Balance
outstanding during such period, or (ii) the fraction (stated
as a percentage) of (A) the sum of the excess (if any) of
the Contract Yield over the Contract Expenses for each of
the twelve most recently concluded Calculation Periods,
divided by (B) the average daily Eligible Contract Pool
Principal Balance outstanding during such period, is less
than or equa SECTION 10.02. Remedies. During the
existence of an Event of Default, the Collateral Agent on
behalf of itself, Triple-A, the Administrative Agent, the
Surety and the L/C Bank may, by written notice to the
Borrower, take any or all of the following actions, at the
same or different times: (i) declare the Termination Date
to have occurred; (ii) declare the Obligations and/or the
L/C Bank Obligations then accrued and unpaid to be
immediately due and payable (in the case of the L/C Bank
Obligations, the Collateral Agent shall make such
declaration solely at the written direction of the L/C
Bank); (iii) pursue any other legal or equitable remedy
available under this Credit Agreement or any of the other
Facility Documents (including, without limitation, the
institution of any equitable proceedings for specific
performance of any of the obligations of the Borrower, the
Servicer or FCI hereunder or thereunder); (iv) exercise any
rights and remedies of a secured party under Article 9 of
the UCC or under any other applicable laws, rules or
regulations, which rights and remedies shall be cumulative
to those provided for under this Credit Agreement and the
other Facility Documents; (v) obtain from the Custodian such
original copies of the Pledged Contracts as it may
reasonably request for the purpose of undertaking
enforcement against an Obligor; and (vi) record, or cause to
be recorded in each relevant jurisdiction any and all
Contract Conveyance Documents prepared, executed and
delivered in accordance with a Contract Grant Date in
recordable form; provided, however, that in the case of any
event described in Section 10.01(g) above, then,
automatically upon the occurrence of such event without
presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower,
anything contained herein or in the Triple-A Note to the
contrary notwithstanding, the Obligations and the L/C Bank
Obligations then accrued and unpaid shall be immediately due
and payable and the Termination Date shall be deemed to have
occurred automatically.
The rights and remedies of a secured party which
may be exercised by the Collateral Agent pursuant to clause
(iv) of this Section 10.02 shall include, without
limitation, the right to (x) identify and engage a Successor
Servicer to act as servicer for the Pledged Contracts in the
event of a Servicer Default in accordance with the
provisions of Section 11.02, and (y) without notice except
as specified below solicit and accept bids for and sell the
Collateral or any part thereof in one or more parcels at a
public or private sale, at any exchange, broker's board or
at any of the Collateral Agent's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other
terms as the Collateral Agent may deem commercially
reasonable. Each of the Borrower and the Servicer agrees
that, to the extent notice of sale shall be required by law,
five Business Days' notice to the Borrower of the time and
place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification
and that it shall be commercially reasonable for the
Collateral Agent to sell the Collateral on an as-is where-is
basis, without representation or warranty of any kind. The
Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given
and may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time
and place to which it was so adjourned.
SECTION 10.03. Optional Preservation of
Collateral. If the Obligations and/or the L/C Bank
Obligations then accrued and unpaid have been accelerated
following an Event of Default, to the extent permitted by
law, the Collateral Agent may elect to retain the Collateral
intact for the benefit of itself, the Administrative Agent,
Triple-A, the Surety and the L/C Bank and in such event it
shall deposit all funds received with respect to the
Collateral in the Collection Account and apply such funds in
accordance with the payment priorities set forth in Section
7.06, as if there had not been such an acceleration.
Until the Collateral Agent has elected, or has
determined not to elect, to retain the Collateral pursuant
to this Section 10.03, the Collateral Agent shall continue
to apply all distributions received on such Collateral in
accordance with Section 7.06. If the Collateral Agent
determines to retain the Collateral as provided in this
Section 10.03, such determination shall be deemed to be a
rescission and annulment (but not a waiver) of the
aforementioned Event of Default and its consequences
pursuant to Section 10.02, but no such rescission and
annulment shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.
SECTION 10.04. Restoration of Rights and
Remedies. If any of the Collateral Agent, the
Administrative Agent, Triple-A, the Surety or the L/C Bank
has instituted any proceeding to enforce any right or remedy
under this Credit Agreement and such proceeding has been
discontinued or abandoned for any reason, or has been
determined adversely to such Person, then and in every such
case the Borrower, the Servicer, FCI, the Collateral Agent,
the Administrative Agent, Triple-A, the Surety and the L/C
Bank shall, subject to any determination in such proceeding,
be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies
of each of the Collateral Agent, the Administrative Agent,
Triple-A, the Surety or the L/C Bank shall continue as
though no such proceeding had been instituted.
SECTION 10.05. Waiver of Stay or Extension Laws.
Each of FCI, the Borrower and the Servicer hereby covenants
(to the extent that it may lawfully do so) that it will not
at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any
stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the
performance of this Credit Agreement or any of the other
Facility Documents to which it is a party; and each of FCI,
the Borrower and the Servicer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not,
on the basis of any such law, hinder, delay or impede the
execution of any power herein granted to the Collateral
Agent, but will suffer and permit the execution of every
such power as though no such law had been enacted.
SECTION 10.06. Sale of Collateral.
(a) The power to effect any sale (a "Sale") of
any portion of the Collateral pursuant to Section 10.02
hereof shall not be exhausted by any one or more Sales as to
any portion of such Collateral remaining unsold, but shall
continue unimpaired until the entire Collateral shall have
been sold or all amounts payable on the Obligations, the L/C
Bank Obligations and otherwise under this Agreement with
respect thereto shall have been paid, whichever occurs
later. The Collateral Agent may from time to time postpone
any Sale by public announcement made at the time and place
of such Sale.
(b) The Collateral Agent shall execute and
deliver an appropriate instrument of conveyance transferring
its interest in any portion of the Collateral in connection
with a Sale thereof. In addition, the Collateral Agent is
hereby irrevocably appointed the agent and attorney-in-fact
of each of the Borrower and the Servicer to transfer and
convey the Borrower's interest in any portion of the
Collateral in connection with a Sale thereof, and to take
all action necessary to effect such Sale. No purchaser or
transferee at such Sale shall be bound to ascertain the
Collateral Agent's authority, inquire into the satisfaction
of any conditions precedent or see to the application of any
monies.
SECTION 10.07. Recovery of Judgment. The
Collateral Agent's right to seek and recover judgment on the
Obligations and/or the L/C Bank Obligations or otherwise
under this Credit Agreement or any of the other Facility
Documents shall not be affected by the seeking, obtaining or
application of any other relief under or with respect to
this Credit Agreement. None of the rights or remedies of
any of the Collateral Agent, the Administrative Agent,
Triple-A, the Surety or the L/C Bank hereunder or under any
of the other Facility Documents shall be impaired by the
recovery of any judgment by any of the Collateral Agent, the
Administrative Agent, Triple-A, the Surety or the L/C Bank
against the Borrower or by the levy of any execution under
such judgment upon any portion of the Collateral or upon any
of the assets of the Borrower.
ARTICLE XI
SERVICER DEFAULTS
SECTION 11.01. Servicer Defaults. If any one of
the following events (a "Servicer Default") shall occur and
be continuing:
(a) any failure by the Servicer to deliver to the
Collateral Agent any information or reports required
pursuant to Section 6.01(a), (d), (e) or (f), which
continues unremedied for a period of five Business Days
after such report is due; provided, however, the Servicer
shall not be entitled to cure any future failure to deliver
any Servicer's Daily Report pursuant to Section 6.01(a)
after the Servicer shall have received written notice from
to the Collateral Agent to the effect that, in its
reasonable good faith judgment and based on information it
believes to be reliable, it has determined that the Servicer
is no longer able (or, in the future may no longer be able)
to discharge its duties effectively under this Credit
Agreement or under any of the other Facility Documents to
which it is a party; or
(b) any failure (i) by the Servicer to deliver
any other information to the Collateral Agent required
pursuant to Section 6.01 (including, without limitation, the
failure to deliver any Settlement Report) on or before the
date such information or Settlement Report is required to be
given or made under the terms of this Credit Agreement, (ii)
by the Servicer or FCI to make any payment, transfer or
deposit on or before the date such payment, transfer or
deposit is required to be made under the terms of this
Credit Agreement or any of the other Facility Documents to
which it is a party, and, solely in the case of any such
payments which do not constitute payments of principal or
interest on the Triple-A Loans, such failure shall remain
unremedied for three Business Days after written notice from
the Collateral Agent or (iii) by the Servicer to give
instructions or notice to the Collateral Agent pursuant to
Article IX on or before the date such instruction or notice
is required to be made or given under the terms of this
Credit Agreement, and such failure shall remain unremedied
for five Business Days; or
(c) any failure on the part of (i) the Servicer
or FCI duly to observe or perform any other covenants or
agreements of the Servicer or FCI set forth in this Credit
Agreement or any of the other Facility Documents to which it
is a party, or (ii) if the Servicer is FAC, enforce and
otherwise pursue any of its rights against FCI under any of
the Facility Documents at the direction of the Collateral
Agent from time to time, which failure continues unremedied
for a period of ten days after the date on which written
notice thereof, requiring the same to be remedied, shall
have been given to the Servicer by the Collateral Agent, or
to the Servicer and the Collateral Agent by any of the
Administrative Agent, the Surety, or Triple-A, or after the
occurrence of the Primary Collection Date, by the L/C Bank;
or the Servicer or FCI shall assign its duties under this
Credit Agreement or under any of the other Facility
Documents to which it is a party, except as permitted in
accordance with the terms of Sections 11.02 and 14.04; or
(d) any representation, warranty or certification
made by the Servicer or FCI in this Agreement or any other
Facility Document to which it is a party or in any
certificate delivered pursuant to this Credit Agreement or
any other Facility Document to which it is a party shall
prove to have been incorrect in any material respect when
made or deemed to be made; or
(e) (i) An Insolvency Event shall occur with
respect to any of the Servicer, the Seller, FAC or FCI, or
any other Significant Subsidiary of FCI; or (ii) any of the
Servicer, the Seller, FAC or FCI, or any other Affiliate of
FCI, shall take any corporate action to authorize the filing
of any such Insolvency Proceeding;
(f) there shall remain in force, undischarged,
unsatisfied, unbonded (or not otherwise fully insured) and
unstayed, for more than thirty days, whether or not
consecutive, any final judgment rendered against FAC (if FAC
or any Affiliate of FAC is the Servicer), or against FCI,
which, together with any other outstanding final judgments
against such Persons which have remained in force,
undischarged, unsatisfied, unbonded (or not otherwise fully
insured) and unstayed, for more than thirty days, exceed, in
aggregate, an amount equal to $1,000,000; or
(g) [Reserved]; or
(h) (1) other than in the cases described in
clauses (2) and (3) below, the Servicer shall fail to pay
any principal of or premium or interest on any Debt, if the
aggregate principal amount of such Debt is $1,000,000 or
more, when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after
the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other
default under any agreement or instrument relating to any
such Debt or any other event, shall occur and shall continue
after the applicable grace period, if any, specified in such
agreement or instrument if the effect of such default or
event is to accelerate, or to permit the acceleration of,
the maturity of such Debt; or any such Debt shall be
declared to be due and payable or required to be prepaid
(other than by a regularly scheduled required prepayment)
prior to the stated maturity thereof; or (2) if the Servicer
is FCI or an Affiliate of FCI, thirty (30) days shall have
elapsed after the occurrence of an "Event of Default" under
the FNBB/FAC Agreement or the FNBB/FCI Agreement, and such
"Event of Default" shall not have been cured or waived
during such thirty-day period, or FNBB (or its agent) shall
have otherwise taken any action to accelerate its
indebtedness under either such agreement or pursued any
other remedy against the borrower or its assets thereunder;
or (3) if the Servicer is FCI or an Affiliate of FCI, the
occurrence of an "Event of Default" or an event which with
the giving of notice or lapse of time or both would
constitute an "Event of Default" under the Pledge and
Servicing Agreement for the Interval Ownership and Lot
Contract Pay-Through Notes (7.58%) Series 1993-A, issued by
Fairfield Funding Corporation; or
(i) if the Servicer is FAC or an Affiliate of
FAC, FCI, or the Borrower, the occurrence of any Event of
Default; or
(j) any of the Collateral Agent, the
Administrative Agent, Triple-A, the Surety or, after the
occurrence of the Primary Collection Date, the L/C Bank (A)
shall receive notice from the Servicer that the Servicer is
no longer able to discharge its duties under this Agreement
or (B) shall determine, in their respective reasonable
judgment and based upon published reports (including wire
services), which they reasonably believe in good faith to be
reliable, that the Servicer or, for as long as FAC is the
Servicer, FCI has ceased to conduct its business in the
ordinary course; or
(k) the Servicer shall fail to materially comply
with the Credit Standards and Collection Policies in the
performance of its duties hereunder;
THEN, so long as such Servicer Default shall not have been
remedied, the Collateral Agent by notice given in writing to
the Servicer (a "Servicer Termination Notice"), (A) prior to
the occurrence of the Primary Collection Date, may at the
request and shall at the direction of Triple-A or the
Surety, and (B) on and after the occurrence of the Primary
Collection Date, may at the request and shall at the
direction of the L/C Bank, terminate all of the rights and
obligations of the Servicer as Servicer under this Agreement
(such termination being herein called a "Servicer
Transfer"). After receipt by the Servicer of such
Termination Notice, all authority and power of the Servicer
under this Agreement shall pass to and be vested Successor
Servicer appointed pursuant to Section 11.02; and, without
limitation, the Collateral Agent is hereby authorized and
empowered (upon the failure of the Servicer to cooperate) to
execute and deliver, on behalf of the Servicer, as attorney-
in-fact or otherwise, all documents and other instruments
upon the failure of the Servicer to execute or deliver such
documents or instruments, and to do and accomplish all other
acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights.
The Servicer agrees to cooperate with the
Collateral Agent and such Successor Servicer in effecting
the termination of the responsibilities and rights of the
Servicer to conduct servicing hereunder, including, without
limitation, the transfer to such Successor Servicer of all
authority of the Servicer to service the Pledged Contracts
provided for under this Agreement, including, without
limitation, all authority over any Collections which shall
on the date of transfer be held by the Servicer for deposit
or withdrawal in a Lock-Box Account or the Collection
Account or which shall thereafter be received by the
Servicer with respect to the Pledged Contracts, and in
assisting the Successor Servicer in enforcing all rights
under this Agreement including, without limitation, allowing
the Successor Servicer's personnel access to the Servicer's
premises for the purpose of collecting payments on the
Pledged Contracts made at such premises. The Servicer shall
promptly transfer its electronic records relating to the
Pledged Contracts to the Successor Servicer in such
electronic form as the Successor Servicer may reasonably
request and shall promptly transfer to the Successor
Servicer all other records, correspondence and documents
necessary for the continued servicing of the Pledged
Contracts in the manner and at such times as the Successor
Servicer shall reasonably request. The Servicer shall allow
the Successor Servicer access to the Servicer's officers and
employees. To the extent that compliance with this Section
11.01 shall require the Servicer to disclose to the
Successor Servicer information of any kind which the
Servicer reasonably deems to be confidential, the Successor
Servicer shall be required to enter into such customary
licensing and confidentiality agreements as the Servicer
shall deem necessary to protect its interest and as shall be
satisfactory in form and substance to the Successor
Servicer. The Servicer hereby consents to the entry against
it of an order for preliminary, temporary or permanent
injunctive relief by any court of competent jurisdiction, to
ensure compliance by the Servicer with the provisions of
this paragraph.
SECTION 11.02. Appointment of Successor.
(a) Appointment. On and after the receipt by the
Servicer of a Servicer Termination Notice pursuant to
Section 11.01, or any permitted resignation of the Servicer
pursuant to Section 9.15, the Servicer shall continue to
perform all servicing functions under this Agreement until
the date specified in the Servicer Termination Notice or
otherwise specified by the Collateral Agent in writing or,
if no such date is specified in such Servicer Termination
Notice, or otherwise specified by the Collateral Agent,
until a date mutually agreed upon by the Servicer and the
Collateral Agent. The Collateral Agent shall as promptly as
possible after the giving of a Termination Notice appoint a
successor Servicer (in any case, the "Successor Servicer")
and such Successor Servicer shall accept its appointment by
a written assumption in a form acceptable to the Collateral
Agent. Notwithstanding the foregoing, the Collateral Agent
shall, if it is unwilling or legally unable so to act,
petition a court of competent jurisdiction to appoint any
established financial institution having a net worth of not
less than $100,000,000 and whose regular business includes
the servicing of receivables similar to the Pledged
Contracts or if no such institution is available, other
consumer finance receivables, as the Successor Servicer
hereunder.
(b) Duties and Obligations of Successor Servicer.
Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to
servicing functions under this Credit Agreement and shall be
subject to all the responsibilities and duties relating
thereto placed on the Servicer by the terms and provisions
hereof, and all references in this Credit Agreement to the
Servicer shall be deemed to refer to the Successor Servicer.
(c) Compensation of Successor Servicer. In
connection with such appointment and assumption, the
Collateral Agent may make such arrangements for the
compensation of the Successor Servicer out of Collections as
it and such Successor Servicer shall agree.
(d) Termination of Servicer's Authority. All
authority and power granted to any Successor Servicer under
this Agreement shall automatically cease and terminate upon
termination of this Agreement pursuant to Section 14.04, and
shall pass to and be vested in the Borrower and, without
limitation, the Borrower is hereby authorized and empowered
to execute and deliver, on behalf of the Successor Servicer,
as attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or
things necessary or appropriate to effect the purposes of
such transfer of servicing rights upon termination of this
Agreement. The Successor Servicer shall cooperate with the
Borrower in effecting the termination of the
responsibilities and rights of the Successor Servicer to
conduct servicing on the Pledged Contracts. The Successor
Servicer shall transfer its electronic records relating to
the Pledged Contracts to the Borrower in such electronic
form as the Borrower may reasonably request and shall
transfer all other records, correspondence and documents
relating to the Pledged Contracts to the Borrower in the
manner and at such times as the Borrower shall reasonably
request. To the extent that compliance with this Section
11.02 shall require the Successor Servicer to disclose the
information of any kind which the Successor Servicer deems
to be confidential, the Borrower shall be required to enter
into such customary licensing and confidentiality agreements
as the Successor Servicer shall deem necessary to protect
its interests and as shall be reasonably satisfactory in
form and substance to the Borrower.
SECTION 11.03. Certain Matters Affecting the
Successor Servicer. The Successor Servicer hereunder shall
be entitled to the following rights, remedies, and
protections in carrying out its duties as Servicer
hereunder: (i) the Successor Servicer shall not be liable
for any act or omission in carrying out its duties, in the
absence of its gross negligence, bad faith or willful
misconduct; (ii) the Successor Servicer may rely on and be
fully protected in acting or refraining from acting in
accordance with any resolution, certificate, letter,
statement, instrument, opinion, report, notice, request,
consent order, appraisal, bond, or other document received
by it which it has reason to believe is genuine and signed
or presented to it by a proper party; (iii) the Successor
Servicer may consult with counsel, and any opinion from such
counsel (so long as such counsel is not an employee of the
Successor Servicer or an Affiliate of the Successor
Servicer) shall be full and complete authorization and
protection in respect of any action taken, suffered or
omitted by the Successor Servicer in good faith in
accordance with such opinion; and (iv) the Successor
Servicer shall not be required to expend or risk its own
funds for extraordinary expenses or otherwise incur
extraordinary financial liability in the performance of its
duties hereunder if it reasonably believes that the
repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it (which
assurance shall be deemed to have been given by an unsecured
indemnity agreement from an institutional investor having a
long term unsecured indebtedness rating of at least A or its
equivalent from either of S&P or ▇▇▇▇▇'▇). The reference to
extraordinary expenses and liabilities in clause (iv) of the
preceding sentence refers to the out-of-pocket costs and
expenses, including any attorneys' fees and expenses,
incurred in connection with suits against Obligors for the
enforcement of Pledged Contracts pursuant hereto, together
with the risk of any liabilities or counterclaims which
could be incurred in connection therewith.
ARTICLE XII
INDEMNITIES
SECTION 12.01. Liabilities to Obligors. No
obligation or liability to any Obligor under any of the
Pledged Contracts is intended to be assumed by any of the
Collateral Agent, the Administrative Agent, Triple-A, the
Surety or the L/C Bank under or as a result of this Credit
Agreement, any of the other Facility Documents and the
transactions contemplated hereby and thereby, and, to the
maximum extent permitted by law, each of the Collateral
Agent, the Administrative Agent, Triple-A, the Surety and
the L/C Bank expressly disclaim any such obligation and
liability.
SECTION 12.02. Tax Indemnification. The Borrower
agrees to pay, and to indemnify, defend and hold harmless
each of the Collateral Agent, the Administrative Agent,
Triple-A, the Surety and the L/C Bank from any taxes which
may at any time be asserted with respect to the Purchase of
the Pledged Contracts and the other Transferred Assets by
the Borrower, or any Grant of the Collateral to the
Collateral Agent, including, without limitation, any sales,
transfer, mortgage, gross receipts, general corporation,
personal property, privilege or license taxes (but not
including any federal, state or other income taxes arising
out of distributions in respect of the Triple-A Loans, other
than any such income taxes imposed by a jurisdiction in
which the indemnified person is not otherwise subject to tax
on its income) and costs, expenses and reasonable counsel
fees in defending against the same.
SECTION 12.03. Servicer's Indemnities. The
Servicer shall defend and indemnify each of the Collateral
Agent, the Administrative Agent, Triple-A, the Surety, the
L/C Bank and FAC (if it is no longer the Servicer) and any
of their respective successors and permitted assigns,
against any and all costs, expenses, losses, damages, claims
and liabilities, including reasonable fees and expenses of
counsel and expenses of litigation, in respect of any action
taken, or failure to take any action by the Servicer (but
not by any predecessor Servicer) with respect to this Credit
Agreement, any Pledged Contract or any other Facility
Document; provided, however, that if a Successor Servicer is
acting as Servicer, such indemnity shall apply only in
respect of any grossly negligent action taken, or grossly
negligent failure to take any action, or reckless disregard
of duties hereunder, or bad faith or willful misconduct by
such Successor Servicer. This indemnity shall survive any
Servicer Transfer (but a Servicer's obligations under this
Section 12.03 shall not relate to any actions of any
Successor Servicer after a Servicer Transfer) and any
payment of the amount owing under, or any purchased release
by the Borrower of any such Pledged Contract.
SECTION 12.04. FAC's Indemnities. FAC shall
defend and indemnify each of the Borrower, the Collateral
Agent, the Administrative Agent, Triple-A, the Surety, the
L/C Bank and the Servicer (if FAC is no longer the Servicer)
against any and all costs, expenses, losses, damages, claims
and liabilities, including reasonable fees and expenses of
counsel and expenses of litigation, in respect of (i) the
breach of any representation, warranty or covenant of FAC
made hereunder or any representation, warranty or covenant
of FAC made under the Receivables Purchase Agreement
(including, without limitation, any indemnification
obligation of FAC thereunder) and (ii) any action taken, or
any failure to take action, by FAC at any time whatsoever
with respect to this Credit Agreement, any of the other
Facility Documents to which it is a party, or any Pledged
Contract.
SECTION 12.05. Borrower's Indemnities. Without
limiting any other rights which any of the Collateral Agent,
the Administrative Agent, Triple-A, the Surety or the L/C
Bank or any of their respective successors and assigns
(each, an "Indemnified Party") may have hereunder or under
applicable law, the Borrower hereby agrees to defend and
indemnify each Indemnified Party from and against any and
all costs, expenses, losses, damages, claims and liabilities
(including reasonable attorneys' fees) (all of the foregoing
being collectively referred to as "Indemnified Amounts")
arising out of or resulting from this Credit Agreement, any
Pledged Contract or any other Facility Document, or any
transaction contemplated hereby or thereby, or from any
action taken, or failure to take any action by the Borrower
with respect to this Credit Agreement, any Pledged Contract
or any other Facility Document, including, but not limited
to, any and all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of
counsel and expenses of litigation, arising as a result of
or otherwise in connection with:
(i) the failure of the Custodian to maintain in
the portion of its files dedicated to Pledged
Contracts, all original copies of each such Pledged
Contract (other than in the case of any Contracts not
required to be in Contract Files pursuant to Section
4.02(x));
(ii) any breach by the Borrower of any of its
representations, warranties, covenants or other
obligations under this Credit Agreement or any other
Facility Document;
(iii) the failure to vest in the Borrower a first
priority perfected ownership interest in the
Collateral, free and clear of any Lien (other than the
Primary Lien, the L/C Bank Lien and, with respect to
Collateral other than Pledged Contracts, Permitted
Encumbrances), or the failure to vest in the Collateral
Agent a first priority perfected security interest in
the Collateral for the benefit of itself, the
Administrative Agent, Triple-A and the Surety, and a
second priority perfected security interest in the
Collateral for the benefit of the L/C Bank, in each
case free and clear of any Lien (other than the Primary
Lien, the L/C Bank Lien and, with respect to Collateral
other than Pledged Contracts, Permitted Encumbrances);
(iv) the failure to have filed, or any delay in
filing, financing statements or other similar instru-
ments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to
perfection of interests in any Collateral, whether at
the time of any Contract Grant Date or at any
subsequent time;
(v) any dispute, claim, offset or defense (other
than discharge in bankruptcy of the Obligor) of the
Obligor to the payment of any Pledged Contract
(including, without limitation, a defense based on such
Pledged Contract, this Credit Agreement or any other
Facility Document not being a legal, valid and binding
obligation of the obligor thereof, enforceable against
it in accordance with its terms), or any other claim
resulting from the sale or Grant of a Pledged Contract,
this Credit Agreement or any other Facility Document;
(vii) any products liability, consumer liability,
claim by any third party, or other claim arising out of
or in connection with any Lot or VOI which is the
subject of any Pledged Contract, this Credit Agreement
or any other Facility Document;
(viii) the commingling of Collections at any time
with any other funds;
(ix) the Borrower's failure to maintain any
Insurance Policy required under this Credit Agreement
or any other Facility Document;
(x) any failure of the Originator, the Seller or
the Borrower to perform its duties or obligations in
accordance with applicable law;
(xi) any action or omission by the Originator, the
Seller or the Borrower, reducing or impairing the
rights of the Collateral Agent with respect to any
Pledged Contract, or the value of any Pledged Contract
(including, without limitation, any cancellation or
modification of any Pledged Contract by the Originator,
the Seller or the Owner, other than a Permitted
Deferral); or
(xii) any investigation, litigation or proceeding
related to this Credit Agreement or the use of proceeds
of the Triple-A Loans or the issuance of the Letter of
Credit or in respect of any Pledged Contract;
excluding, however, (a) Indemnified Amounts to the extent
resulting from willful misconduct, bad faith or gross
negligence on the part of such Indemnified Party, (b) re-
course for uncollectible Contracts or (c) any income or
franchise taxes (or any interest, penalties or additions to
tax with respect thereto) incurred by such Indemnified Party
arising out of or as a result of this Credit Agreement or
the interest Granted hereunder in Pledged Contracts.
SECTION 12.06. Operation of Indemnities. Any
indemnification under this Article XII shall include,
without limitation, reasonable fees and expenses of counsel
and expenses of litigation. If the Servicer has made any
indemnity payments to any of the Borrower, the Collateral
Agent, the Administrative Agent, Triple-A, the Surety or the
L/C Bank pursuant to this Article XII and if any such
Indemnified Party thereafter collects any of such amount
from others, each such Indemnified Party shall promptly
repay such amounts collected to the Servicer without
interest.
ARTICLE XIII
THE COLLATERAL AGENT
SECTION 13.01. Authorization and Action. Each of
CapMAC, the Administrative Agent, Triple-A, the Surety and
the L/C Bank (collectively with their respective successors
and assigns, the "Secured Creditors") hereby designates and
appoints CapMAC as "Collateral Agent" under this Credit
Agreement and each of the other Facility Documents, and
authorizes the Collateral Agent to take such actions as
agent on its behalf and to exercise such powers as are
delegated to the Collateral Agent by the terms of the
Facility Documents, together with such powers as are
reasonably incidental thereto. The Collateral Agent shall
not have any duties or responsibilities, except those
expressly set forth in the Facility Documents. In addition,
the Collateral Agent shall not have any fiduciary
relationship with any Person, and no implied covenants,
functions, responsibilities, duties, obligations or
liabilities on the part of the Collateral Agent shall be
read into the Facility Documents or otherwise exist for the
Collateral Agent. The provisions of this Article XIII
govern the relationship between the Collateral Agent and the
Secured Creditors and are solely for the benefit of the
Collateral Agent and the Secured Creditors, and none of the
Borrower, the Servicer, FAC or FCI (collectively, the "Other
Parties") shall have any rights as a third-party beneficiary
or otherwise under any of the provisions of this Article
XIII. In performing its functions and duties under the
Facility Documents, the Collateral Agent shall act solely as
agent for the Secured Creditors and does not assume nor
shall be deemed to have assumed any obligation or
relationship of trust or agency with or for any of the Other
Parties or any of their respective successors or assigns.
The Collateral Agent shall not be required to take any
action which exposes the Collateral Agent to personal
liability or which is contrary to the terms of any of the
Facility Documents or applicable law. The appointment and
authority of the Collateral Agent under the Facility
Documents shall terminate on the Collection Date.
SECTION 13.02. Delegation of Duties. The
Collateral Agent may execute any of its duties under the
Facility Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Collateral Agent
shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with
reasonable care.
SECTION 13.03. Exculpatory Provisions. Neither
the Collateral Agent nor any of its directors, officers,
agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them or any
Person described in Section 13.02 under or in connection
with the Facility Documents (except for its, their or such
Person's own gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Secured
Creditors for any recitals, statements, representations or
warranties made by any of the Other Parties contained in any
of the Facility Documents or in any certificate, report,
statement or other document referred to or provided for in,
or received under or in connection with, any of the Facility
Documents or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of the Facility
Documents or any other document furnished in connection
therewith, or for any failure of any of the Other Parties to
perform its respective obligations thereunder, or for any
failure of any Obligor to perform its obligations under any
Pledged Contract, or for the satisfaction of any conditions
specified in Article III of this Credit Agreement. The
Collateral Agent shall not be under any obligation to any
Secured Creditor to ascertain or to inquire as to the
observance or performance of any of the agreements or
covenants contained in, or conditions of, the Facility
Documents, or to inspect the properties, books or records of
any of the Other Parties. This Section 13.03 is intended
solely to govern the relationship between the Collateral
Agent, on the one hand, and the Secured Creditors, on the
other.
SECTION 13.04. Reliance by Collateral Agent. The
Collateral Agent shall in all cases be entitled to rely, and
shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed
by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without
limitation, counsel to any of the Other Parties),
independent accountants and other experts selected by the
Collateral Agent. The Collateral Agent shall in all cases
be fully justified in failing or refusing to take any action
under any of the Facility Documents or any other document
furnished in connection therewith unless it shall first
receive such advice or concurrence of the Secured Creditors
or all of them, as applicable, as it deems appropriate or it
shall first be indemnified to its satisfaction by the
Secured Creditors against any and all liability, cost and
expense which may be incurred by it by reason of taking or
continuing to take any such action. The Collateral Agent
shall in all cases be fully protected in acting, or in
refraining from acting, under the Facility Documents, in
accordance with a request of Triple-A made pursuant to the
Facility Documents.
SECTION 13.05. Notice of Termination Events; Etc.
The Collateral Agent shall not be deemed to have knowledge
or notice of the occurrence of any Event of Default,
Servicer Default, Unmatured Event of Default or Unmatured
Servicer Default unless the Collateral Agent has received
notice from a Secured Creditor or one of the Other Parties
referring to this Credit Agreement, stating that any Event
of Default, Servicer Default, Unmatured Event of Default or
Unmatured Servicer Default, has occurred hereunder and
describing such Event of Default, Servicer Default,
Unmatured Event of Default or Unmatured Servicer Default.
The Collateral Agent shall take such action with respect to
such Event of Default, Servicer Default, Unmatured Event of
Default or Unmatured Servicer Default as shall be directed
by all of the Secured Creditors other than the L/C Bank
(unless such action (x) is to be taken after occurrence of
the Primary Collection Date, or (y) such action is limited
to a declaration to the effect that all L/C Bank Obligations
then accrued and unpaid are immediately due and payable in
accordance with the terms of Section 10.02 after the
occurrence of an Event of Default, in which case, the
Collateral Agent shall take such action as shall be directed
by the L/C Bank); provided that unless and until the
Collateral Agent shall have received such directions, the
Collateral Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with
respect to such Event of Default, Servicer Default,
Unmatured Event of Default or Unmatured Servicer Default as
the Collateral Agent shall deem advisable and in the best
interests of the Secured Creditors.
SECTION 13.06. Non-Reliance on Collateral Agent
and Other Secured Creditors. Each Secured Creditor
expressly acknowledges that neither the Collateral Agent,
nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by the Collateral Agent
hereafter taken, including, without limitation, any review
of the affairs of any of the Other Parties, shall be deemed
to constitute any representation or warranty by the
Collateral Agent. Each Secured Creditor represents and
warrants to the Collateral Agent that it has, independently
and without reliance upon the Collateral Agent or any other
Secured Creditor and based on such documents and information
as it has deemed appropriate, made its own appraisal of and
investigation into the Contracts, Developments, and the
business, operations, property, prospects, financial and
other conditions and creditworthiness of the Other Parties,
and made its own decision to enter into this Credit
Agreement and any of the other Facility Documents to which
it is a party. Each Secured Creditor also represents that
it will, independently and without reliance upon the
Collateral Agent or any other Secured Creditor, and based on
such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action
under this Credit Agreement and any of the other Facility
Documents, and to make such investigation as it deems
necessary to inform itself as to the Contracts and the
Developments, and the business, operations, property,
prospects, financial and other condition and
creditworthiness of each of the Other Parties. The
Collateral Agent shall not have any duty or responsibility
to provide any Secured Creditor with any credit or other
information concerning the Contracts or the Developments,
the business, operations, property, prospects, financial and
other condition or creditworthiness of the Other Parties
which may come into the possession of the Collateral Agent
or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates, provided, however, that
with reasonable promptness following the reasonable request
of a Secured Creditor, made in writing, the Collateral Agent
shall make available to such Secured Creditor information
concerning the Contracts or the Developments, the business,
operations, property, prospects, financial and other
condition or creditworthiness of the Other Parties which
information (1) is actually in the possession of the
Collateral Agent at the time of such request, (2) has been
provided to the Collateral Agent by or on behalf of the
Borrower or one of its Affiliates, and (3) is described in
such request with reasonable specificity.
SECTION 13.07. Reimbursement and Indemnification.
Each of the Secured Creditors agrees to reimburse and
indemnify the Collateral Agent and its officers, directors,
employees, representatives and agents ratably according to
their pro rata shares of outstanding Obligations and L/C
Bank Obligations, to the extent not paid or reimbursed by
the Other Parties (i) for any amounts for which the
Collateral Agent, acting in its capacity as Collateral Agent
hereunder, is entitled to reimbursement by the Other Parties
hereunder and (ii) for any other expenses incurred by the
Collateral Agent, in its capacity as Collateral Agent and
acting on behalf of the Secured Creditors, in connection
with the administration and enforcement of the Facility
Documents, the Contracts, the VOIs and Lots, and any of the
other Collateral.
SECTION 13.08. Collateral Agent in Its Individual
Capacity. Each of the Collateral Agent, the Surety, Triple-
A and the L/C Bank and each of its respective Affiliates may
make loans to, accept deposits from and generally engage in
any kind of business with the Other Parties or any Affiliate
of the Other Parties as though the Collateral Agent, the
Surety, Triple-A or the L/C Bank were not the Collateral
Agent, the Surety, Triple-A or the L/C Bank hereunder,
respectively. With respect to the transactions contemplated
pursuant to the Facility Documents, CapMAC as the Collateral
Agent shall have the same rights and powers under the
Facility Documents as any other Secured Creditor and may
exercise the same as though it were not the Collateral
Agent, and the terms "Secured Creditor," and "Secured
Creditors" shall include CapMAC as the Collateral Agent in
its individual capacity.
SECTION 13.09. Successor Collateral Agents. The
Collateral Agent may, upon thirty (30) days' notice to the
Borrower and each of the Secured Creditors, and the
Collateral Agent shall, upon the direction of all of the
Secured Creditors resign as Collateral Agent. If the
Collateral Agent shall resign as Collateral Agent under the
Facility Documents, then the Secured Creditors during such
thirty (30) day period shall appoint a successor agent,
which successor agent shall be approved by the Borrower,
which approval shall not be unreasonably withheld or
delayed, whereupon such successor agent shall succeed to the
rights, powers and duties of the Collateral Agent and the
term "Collateral Agent" shall mean such successor agent,
effective upon its appointment, and the former Collateral
Agent's rights, powers and duties as Collateral Agent shall
be terminated, without any other or further act or deed on
the part of such former Collateral Agent or any of the
parties to this Credit Agreement. If for any reason no
successor Collateral Agent is appointed by the Secured
Creditors during such thirty (30) day period, then effective
upon the termination of such thirty (30) day period, the
Secured Creditors shall perform all of the duties of the
Collateral Agent under the Facility Documents and the
Borrower shall make all payments in respect of the
Obligations and the L/C Bank Obligations directly to the
applicable Secured Creditor and for all purposes shall deal
directly with the Secured Creditors. After any retiring
Collateral Agent's resignation hereunder as Collateral
Agent, the provisions of this Article XIII shall inure to
its benefit as to any actions taken or omitted to be taken
by it while it was Collateral Agent under the Facility
Documents.
SECTION 13.10. UCC Filings and Title
Certificates. The Secured Creditors and the Other Parties
expressly recognize and agree that the Collateral Agent may
be listed as (x) the secured party of record on the various
Uniform Commercial Code filings required to be made under
this Credit Agreement in order to perfect the collateral
assignments from the Borrower to the L/C Bank and to the
other Secured Creditors of security interests in the
Collateral, and (y) the secured party of record on the
various other assignments with respect to the Collateral as
described more fully in Exhibit C or Exhibit D, that such
listings shall be for administrative convenience only in
creating a record or nominee secured party to take certain
actions under the Facility Documents on behalf of one or
more of the Secured Creditors and that such listing will not
affect in any way the respective status of the Secured
Creditors as the beneficial owners of their respective
security interests in the Collateral. In addition, such
listings shall impose no duties on the Collateral Agent
other than those expressly and specifically undertaken in
accordance with the provisions of this Article XIII.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Amendments, Etc. No amendment to
or waiver of any provision of this Credit Agreement nor
consent to any departure by the Borrower or the Servicer,
shall in any event be effective unless the same shall be in
writing and signed by (i) the Collateral Agent, the
Administrative Agent, Triple-A, the Surety and the L/C Bank,
the Borrower, FCI and the Servicer (with respect to an
amendment) or (ii) the Collateral Agent, the Administrative
Agent, Triple-A, the Surety and the L/C Bank, (with respect
to a waiver or consent by any of them), the Borrower (with
respect to a waiver or consent by it), FCI (with respect to
a waiver or consent by it), or the Servicer (with respect to
a waiver or consent by it), as the case may be, and then
such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which
given. This Credit Agreement contains a final and complete
integration of all prior expressions by the parties hereto
with respect to the subject matter hereof and shall con-
stitute the entire agreement (together with the exhibits
hereto) among the parties hereto with respect to the subject
matter hereof, superseding all prior oral or written under-
standings (except such understandings as are set forth in
the Fee Letter or the L/C Fee Letter.
SECTION 14.02. Notices, Etc. All notices and
other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including telex com-
munication and communication by facsimile copy) and mailed,
telexed, transmitted or delivered, as to each party hereto,
at its address set forth under its name on the signature
pages hereof or at such other address as shall be designated
by such party in a written notice to the other parties
hereto. All such notices and communications shall be
effective, upon receipt, or in the case of delivery by mail,
five days after being deposited in the mails, or, in the
case of notice by telex, when telexed against receipt of
answer back, or in the case of notice by facsimile copy,
when verbal communication of receipt is obtained, in each
case addressed as aforesaid, except that notices and
communications pursuant to Article II shall not be effective
until received.
SECTION 14.03. No Waiver; Remedies. No failure
on the part of any of the Collateral Agent, the
Administrative Agent, Triple-A, the Surety or the L/C Bank
to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 14.04. Binding Effect; Assignability;
Termination. This Credit Agreement shall be binding upon
the Borrower, the Servicer, FCI, FAC, Triple-A, the
Collateral Agent, the Administrative Agent, the Surety, the
L/C Bank and their respective successors and permitted
assigns (which successors of the Borrower shall include a
trustee in bankruptcy), and shall inure to the benefit of
each such Person, and each of their respective successors
and permitted assigns. None of the Borrower, the Servicer
or FCI may assign any of its rights or obligations hereunder
or any interest herein without the prior written consent of
Triple-A, the Collateral Agent and the L/C Bank. The L/C
Bank may not assign any of its rights and obligations
hereunder, under the Letter of Credit or any interest herein
without the prior written consent of Triple-A, the Surety
and the Collateral Agent. Each of Triple-A, the Collateral
Agent, the Administrative Agent, the L/C Bank and the Surety
may assign at any time its rights and obligations hereunder
and interests herein to any other Person without the consent
of the Borrower or the Servicer. Without limiting the
foregoing, the Borrower hereby acknowledges that Triple-A
has agreed pursuant to the Liquidity Agreement, the
Liquidity Security Agreement and certain related agreements
that, subject to the restrictions set forth therein, and
under certain circumstances as described therein, certain
parties providing credit enhancement and/or liquidity for
Triple-A in connection with the Credit Agreement (including,
without limitation, the "Liquidity Collateral Agent" under
the Liquidity Security Agreement), shall be entitled to
exercise Triple-A's rights under this Credit Agreement and
in addition, shall constitute third-party beneficiaries of
this Credit Agreement. The Borrower hereby consents to the
foregoing and agrees to cooperate with any such Person
electing to exercise Triple-A's rights under this Credit
Agreement.
This Credit Agreement shall create and constitute
the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force
and effect until such time, after the Termination Date, as
the Collection Date shall occur; provided, however, that the
rights and remedies with respect to any breach of any repre-
sentations, warranties or covenants made by any of the
Borrower, the Servicer, FAC or FCI (including, without
limitation, the covenants of each of the Borrower, the
Servicer and FAC under Sections 12.02, 12.03, 12.04, and
12.05), shall be continuing and shall survive any termina-
tion of this Credit Agreement; provided further, however,
that to the extent that a payment, transfer or deposit is
made by or on behalf of any of the Borrower, the Servicer,
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FAC or FCI, to any of the Collateral Agent, the
Administrative Agent, Triple-A, the Surety or the L/C Bank,
which payment, transfer or deposit (or any part thereof) is
subsequently invalidated, declared to be fraudulent or
preferential or set aside and required to be repaid to any
of the Borrower, the Servicer FAC or FCI, or its respective
estate, trustee or receiver or any other Person, under any
bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such repayment, the
agreements hereunder in respect of such Obligations or L/C
Bank Obligations or part thereof which had been so repaid,
shall be reinstated and continued in full force and effect
as of the date such initial payment, transfer or deposit
occurred.
SECTION 14.05. Release of Collateral. Upon the
termination of this Credit Agreement pursuant to Section
14.04, the Collateral Agent shall release all liens and
assign to the Borrower (without recourse, representation or
warranty) all right, title and interest of the Collateral
Agent in and to the Collateral, and all proceeds thereof.
The Collateral Agent shall execute and deliver such
instruments of assignment, in each case without recourse, as
shall be reasonably requested by Borrower to release the
security interests of the Collateral Agent in the
Collateral.
SECTION 14.06. GOVERNING LAW; WAIVER OF JURY
TRIAL. THIS CREDIT AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION
OF THE INTERESTS OF THE COLLATERAL AGENT IN THE COLLATERAL
OR REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF NEW YORK. EACH OF THE BORROWER, THE SERVICER, FAC AND
FCI HEREBY AGREES TO THE JURISDICTION OF ANY FEDERAL COURT
LOCATED WITHIN THE STATE OF NEW YORK, AND WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED
TO THE BORROWER AT THE ADDRESS SET FORTH ON THE SIGNATURE
PAGE HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN
DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID, OR, AT THE
OPTION OF EITHER TRIPLE-A, THE COLLATERAL AGENT OR THE L/C
BANK, BY SERVICE UPON CT CORPORATION SYSTEM, ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, WHICH EACH OF THE BORROWER, THE
SERVICER, FAC AND FCI HEREBY IRREVOCABLY APPOINTS AS ITS
AGENT FOR THE PURPOSE OF ACCEPTING SERVICE OF PROCESS. EACH
OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE BETWEEN OR AMONG THE PARTIES
HERETO, OR ANY OF THEM, ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM
146
IN CONNECTION WITH THIS CREDIT AGREEMENT. INSTEAD, ANY
DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL
WITHOUT A JURY. WITH RESPECT TO THE FOREGOING CONSENT TO
JURISDICTION, EACH OF THE BORROWER, FAC AND FCI HEREBY
WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS
SECTION 14.06 SHALL AFFECT THE RIGHT OF TRIPLE-A, THE
COLLATERAL AGENT OR THE L/C BANK TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT
OF TRIPLE-A, THE COLLATERAL AGENT OR THE L/C BANK TO BRING
ANY ACTION OR PROCEEDING AGAINST ANY OF THE BORROWER, FAC OR
FCI OR ITS RESPECTIVE PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
SECTION 14.07. Costs, Expenses and Taxes.
(a) In addition to the rights of indemnification granted
under Article XII hereof, the Borrower agrees to pay on
demand
(x) all reasonable costs and expenses in
connection with the preparation, execution, delivery
and administration (including periodic auditing fees as
provided for in Section 5.01(c), and any requested
amendments, waivers or consents) of this Credit
Agreement and the other documents to be delivered
hereunder, including, without limitation, the reason-
able fees and out-of-pocket expenses of counsel for
Triple-A, the Collateral Agent, the Administrative
Agent, the Surety and the L/C Bank with respect thereto
and with respect to advising Triple-A, the Collateral
Agent, the Administrative Agent, the Surety and the L/C
Bank as to its rights and remedies under this Credit
Agreement, the other Facility Documents, and the other
agreements to be delivered hereunder and thereunder,
and
(y) all reasonable costs and expenses, if any
(including reasonable counsel fees and expenses), in
connection with the enforcement or preservation of the
rights and remedies of each of Triple-A, the Collateral
Agent, the Administrative Agent, the Surety and the L/C
Bank under this Credit Agreement, the other Facility
Documents and the other agreements and documents to be
delivered hereunder and thereunder.
(b) The Borrower agrees to pay, indemnify and
hold each of Triple-A, the Collateral Agent, the
Administrative Agent, the Surety and the L/C Bank harmless
from and against any and all stamp, sales, excise and other
taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and
147
recording of this Credit Agreement, the other Facility
Documents and the other agreements, instruments and
documents to be delivered hereunder and thereunder, and
agrees to indemnify each of Triple-A, the Collateral Agent,
the Administrative Agent, the Surety and the L/C Bank and
their respective assignees against any liabilities with
respect to or resulting from any delay in paying or omission
to pay such taxes and fees.
(c) The Borrower agrees to pay, indemnify and
hold each of Triple-A, the Collateral Agent, the
Administrative Agent, the Surety, the L/C Bank and each of
their respective affiliates, control persons, officers,
directors, shareholders, employees, and agents (all the
foregoing, collectively, the "indemnified parties") harmless
from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery,
enforcement, performance, administration and management of
this Credit Agreement, the other Facility Documents and the
other agreements and documents to be delivered hereunder and
thereunder (all the foregoing, collectively, the
"indemnified amounts"), provided that none of the Borrower,
FAC or FCI shall have any obligation hereunder to any
indemnified party with respect to indemnified amounts
arising from the gross negligence or willful misconduct of
such indemnified party.
(d) If, in connection with an agreement or other
document providing liquidity support, credit enhancement or
other similar support to Triple-A in connection with this
Agreement or the funding or maintenance of Triple-A Loans
hereunder, Triple-A is required to compensate (i) CapMAC (or
any other indemnified party under the Insurance Agreement)
in respect of fees and expenses under circumstances similar
to those described in Section 14.07(a)(x) or (y), or (ii)
the Liquidity Agent or any Liquidity Bank (or any other
indemnified party under the Liquidity Agreement) in respect
of fees and expenses under circumstances similar to those
described in Section 14.07(a)(y), then within ten days after
demand by Triple-A accompanied by a certificate setting
forth the amounts of compensation so required and the
calculations thereof in reasonable detail, the Seller shall
pay to Triple-A such additional amount or amounts as may be
necessary to pay the applicable Liquidity Bank the amounts
due or to otherwise reimburse Triple-A for any amounts paid
by it.
SECTION 14.08. Limitations on Payments.
Notwithstanding anything herein or elsewhere to the
contrary, the Borrower's obligations to make payments
hereunder, or under any of the other Facility Documents
148
(including, without limitation, any Reimbursement Obligation
or L/C Reimbursement Obligation), to the extent that a
source of any such payment is the Collection Account and/or
the funds or investments maintained therein, shall be
subject in all events to the limitations on permitted
payment dates and the designation of payment priorities set
forth in Section 7.06.
SECTION 14.09. Execution in Counterparts;
Severability. This Credit Agreement may be executed in any
number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken
together shall constitute one and the same agreement. In
case any provision in or obligation under this Credit
Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not
in any way be affected or impaired thereby.
SECTION 14.10. No Bankruptcy Petition Against
Triple-A. Each of the Borrower, FAC, and FCI and the L/C
Bank covenants and agrees that it will not institute against
Triple-A, or join any other Person in instituting against
Triple-A, any Insolvency Proceeding under bankruptcy law or
under any similar federal or state law.
SECTION 14.11. Further Assurances. Each of the
Borrower, FAC and FCI covenants and agrees to do and
perform, from time to time, any and all acts and to execute
any and all further instruments required or reasonably
requested by the Collateral Agent more fully to effect the
purposes of this Credit Agreement, including, without
limitation, the execution of any financing statements or
continuation statements relating to the Pledged Contracts
for filing under the provisions of the UCC of any applicable
jurisdiction.
SECTION 14.12. Effect on Original Credit
Agreement. Each of the parties hereto ratifies the
Advances, Grants, Triple-A Loans; Borrowings, payments,
representations, warranties, covenants and indemnities made
by, to, in favor of, or otherwise on behalf of, such party
under the Original Credit Agreement and agrees that such
agreement is, as of the date hereof and until the Effective
Restatement Date has occurred, in full force and effect.
From and after the Effective Restatement Date, (i) the terms
and provisions of this Credit Agreement shall amend and
supersede the terms and provisions of the Original Credit
Agreement in their entirety and the continuing rights,
remedies and obligations of the parties with respect to any
such Advances, Grants, Triple-A Loans, Borrowings, payments,
149
representations, warranties, covenants and indemnities under
the Original Credit Agreement shall be governed by the terms
and provisions of this Credit Agreement to the same extent
as if such Advances, Grants, Triple-A Loans, Borrowings,
payments, representations, warranties, covenants and
indemnities had been made under this Credit Agreement, and
(ii) all references in any other Facility Documents to the
Original Credit Agreement or Appendix A thereto shall mean
and be a reference to the Original Credit Agreement and such
Appendix A as each of the same have been amended hereby, and
(iii) each "Advance", "Grant", "Triple-A Loan", "Borrowing"
and "Triple-A Note" referred to in the Original Credit
Agreement or Appendix A thereto, or in any other Facility
Document, shall mean and be a reference to an Advance,
Grant, Triple-A Loan, Borrowing and Triple-A Note hereunder
or under Appendix A hereto. It is expressly understood and
agreed that the execution and delivery of this Credit
Agreement is not intended to be, and shall not be construed
as, a novation of the Original Credit Agreement, any of the
other Facility Documents, or any of the transactions
evidenced thereby.
SECTION 14.13. Confidentiality. Except to the
extent otherwise required by applicable law or as may be
necessary to enforce any rights in respect of this Credit
Agreement, or any related document, instrument or agreement,
each of CapMAC, Triple-A and the L/C Bank shall, unless the
provider thereof shall otherwise consent in writing (i)
maintain the confidentiality of information obtained as a
result of being a party hereto or to related documents from
FCI, FMB, FAC, FCC, or a POA with respect to the operation,
management, or financial condition of any POA ("Confidential
Information") and (ii) not disclose, deliver or otherwise
make available to any third party any part of any such
Confidential Information; provided, however, that CapMAC,
Triple-A and the L/C Bank may disclose any Confidential
Information (w) to its legal counsel, auditors and
accountants, (x) as may be required or requested by any
central bank or governmental authority, regulatory body or
rating agency, (y) subject to a written confidentiality
agreement having terms substantially similar to this Section
14.13, to any reinsurer, bank, financial institution or
other party that extends or is considering the extension of
liquidity or of debt or equity financing to CapMAC, Triple-
A, or the L/C Bank, or is reinsuring or considering the
reinsurance of the obligations of CapMAC, Triple-A, or the
L/C Bank, or (z) as may be required or appropriate in
response to a court order or in connection with any
litigation; provided further, however, that none of CapMAC,
Triple-A, and the L/C Bank shall have any obligation of
confidentiality whatsoever in respect of any information
which may be generally available to the public or becomes
150
available to the public through no fault of CapMAC, Triple-A
or the L/C Bank, respectively.
151
IN WITNESS WHEREOF, the parties below have caused
this Credit Agreement to be duly executed by their duly
authorized officers and delivered as of the day and year
first above written.
FAIRFIELD CAPITAL CORPORATION
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________________
Title: President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ (Ext.581)
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
FAIRFIELD ACCEPTANCE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________________
Title: President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
FAIRFIELD COMMUNITIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________________
Title: Senior Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
152
TRIPLE-A ONE FUNDING CORPORATION
By: Capital Markets Assurance
Corporation, its Attorney-in-
Fact
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
____________________________________
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Head of Exposure Management
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
CAPITAL MARKETS ASSURANCE CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
____________________________________
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Head of Exposure
Management
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________________
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
CRE51.WPD October 21, 1996 (10:49am)
153
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