FIRST AMENDMENT AGREEMENT
FIRST AMENDMENT AGREEMENT, dated as of January 31, 2000 (the "First
Amendment"), to the Receivables Loan and Security Agreement, dated as of January
31, 2000, among EFI Funding Company, Inc. (the "Borrower"), Resort Funding,
Inc., as Servicer (the "Servicer"), Autobahn Funding Company LLC, as Lender (the
"Lender"), DG Bank Deutsche Genossenschaftsbank AG, as agent (the "Agent"), U.S.
Bank Trust National Association and Sage Systems, Inc. (as the same may be
amended, supplemented, modified or restated in accordance with its terms, the
"RLSA"). Capitalized terms used herein and not otherwise defined herein shall
have the meanings attributed thereto in the RLSA.
WHEREAS, the parties hereto have agreed to amend the RLSA on the
terms and subject to the conditions herein set forth.
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and subject to the fulfillment of
the conditions set forth below, the parties hereto agree as follows:
SECTION 1. AMENDMENT TO THE RLSA
The RLSA is hereby amended by deleting in their entirety all of the
terms and provisions thereof and substituting in their place all of the terms
and provisions of the Receivables Loan and Security Agreement attached hereto as
Exhibit A.
SECTION 2. CONDITIONS TO EFFECTIVENESS
This First Amendment shall be effective upon the delivery to the
Agent of counterparts hereof executed by each of the parties hereto.
SECTION 3. MISCELLANEOUS
3.1 The Borrower and the Servicer each hereby certifies that the
representations and warranties set forth in Article IV of the RLSA (and any
other representations and warranties made by the Borrower or the Servicer in the
RLSA) are true and correct on the date hereof with the same force and effect as
if made on the date hereof, except to the extent that such representations and
warranties speak specifically to an earlier date in which case they shall have
been true and correct on such date. In addition, the Borrower and the Servicer
each represents and warrants (which representations and warranties shall survive
the execution and delivery hereof) that (a) no unwaived Early Amortization Event
or Event of Default (nor any event that but for notice or lapse of time or both
would constitute an unwaived Early Amortization Event or Event
1
of Default) shall have occurred and be continuing as of the date hereof nor
shall any unwaived Early Amortization Event or Event of Default (nor any event
that but for notice or lapse of time or both would constitute an unwaived Early
Amortization Event or Event of Default) occur due to this First Amendment
becoming effective, (b) the Borrower and the Servicer each has the corporate
power and authority to execute and deliver this First Amendment and has taken or
caused to be taken all necessary corporate actions to authorize the execution
and delivery of this First Amendment, and (c) no consent of any other person
(including, without limitation, shareholders or creditors of the Borrower or the
Servicer), and no action of, or filing with any governmental or public body or
authority is required to authorize, or is otherwise required in connection with
the execution and performance of this First Amendment other than such that have
been obtained.
3.2 The RLSA, as amended hereby, is hereby ratified and confirmed in
all respects and remains in full force and effect in accordance with its terms.
3.3 All references in the RLSA to "this Agreement" and "herein" and
all references to the RLSA in the documents executed in connection with the RLSA
shall mean the RLSA as amended hereby and as it may in the future be amended,
restated, supplemented or modified from time to time.
3.4 This First Amendment may be executed by the parties hereto
individually or in combination, in one or more counterparts, each of which shall
be an original and all of which shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this First Amendment
by facsimile shall be effective as delivery of a manually executed counterpart
of this First Amendment.
3.5 The Borrower hereby agrees to pay all costs and expenses
incurred by the Lender and the Agent in connection with this First Amendment
including, without limitation, the fees and expenses of ▇▇▇▇, Scholer, Fierman,
▇▇▇▇ & Handler, LLP, counsel to the Lender and the Agent.
3.6 THIS FIRST AMENDMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAW PRINCIPLES THEREOF
THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
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IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the date first above written.
THE BORROWER: EFI FUNDING COMPANY, INC.
By:
------------------------------------
Title:
THE SERVICER: RESORT FUNDING, INC.
By:
------------------------------------
Title:
THE AGENT: DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK AG
By:
------------------------------------
Title:
By:
------------------------------------
Title:
THE LENDER: AUTOBAHN FUNDING COMPANY LLC
By: DG BANK Deutsche Genossenschaftsbank
AG, its attorney-in-fact
By:
--------------------------------------
Title:
By:
--------------------------------------
Title:
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THE CUSTODIAN: U.S. BANK TRUST NATIONAL ASSOCIATION
By:
--------------------------------------
Title:
THE BACKUP SERVICER: SAGE SYSTEMS, INC.
By:
--------------------------------------
Title:
Exhibit A
Receivables Loan and Security Agreement
(See attached.)
[Execution Copy]
================================================================================
U.S. $150,000,000
RECEIVABLES LOAN AND SECURITY AGREEMENT
Dated as of January 31, 2000
Among
EFI FUNDING COMPANY, INC.,
as the Borrower
and
RESORT FUNDING, INC.,
as the Servicer
and
AUTOBAHN FUNDING COMPANY LLC,
as a Lender
and
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK AG,
as the Agent
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as the Custodian
and
SAGE SYSTEMS, INC.,
as the Backup Servicer
================================================================================
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS....................................................1
SECTION 1.01 Certain Defined Terms..........................1
SECTION 1.02 Other Terms...................................80
SECTION 1.03 Computation of Time Periods...................80
ARTICLE II. THE RECEIVABLES FACILITY......................................80
SECTION 2.01 Borrowings....................................80
SECTION 2.02 The Initial Borrowing and Subsequent
Borrowings....................................80
SECTION 2.03 Facility Maturity Date........................82
SECTION 2.04 Selection of Fixed Periods....................82
SECTION 2.05 Remittance Procedures.........................83
(a) Yield and Liquidation Fees................................83
(b) Fixed Period Loan Principal Repayment.....................83
(c) Remittance Date Transfers from Collection Account.........84
(d) Transfers from Collection Account Related to the
Sinking Fund Agreement....................................85
(e) [Intentionally omitted]...................................85
(f) Borrower Deficiency Payments..............................86
(g) Instructions to the Agent's Bank..........................86
SECTION 2.06 [Intentionally omitted].......................86
SECTION 2.07 [Intentionally omitted].......................86
SECTION 2.08 [Intentionally omitted].......................86
SECTION 2.09 [Intentionally omitted].......................86
SECTION 2.10 [Intentionally omitted].......................86
SECTION 2.11 Payments and Computations, Etc................86
SECTION 2.12 Fees..........................................87
SECTION 2.13 Increased Costs; Capital Adequacy.............87
SECTION 2.14 Collateral Assignment of Agreements; Rights of
Lender Regarding Pledged Consumer Note
Receivables...................................88
SECTION 2.15 Grant of a Security Interest..................90
SECTION 2.16 Evidence of Debt..............................91
SECTION 2.17 Survival of Representations and Warranties;
Repayment Obligations.........................91
SECTION 2.18 Release of Pledged Receivables................91
SECTION 2.19 Treatment of Amounts Paid by the Borrower.....92
SECTION 2.20 Termination...................................92
SECTION 2.21 Underlying Payments...........................92
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Page
----
ARTICLE III. CONDITIONS OF LOANS...........................................93
SECTION 3.01 Conditions Precedent to Initial Borrowing.....93
SECTION 3.02 Conditions Precedent to All Borrowings........94
SECTION 3.03 Advances Do Not Constitute a Waiver..........104
ARTICLE IV. REPRESENTATIONS AND WARRANTIES...............................105
SECTION 4.01 Representations and Warranties of the
Borrower and the Servicer....................105
ARTICLE V. GENERAL COVENANTS OF THE BORROWER AND THE
SERVICER.....................................................110
SECTION 5.01 General Covenants............................110
ARTICLE VI. ADMINISTRATION AND SERVICING; CERTAIN COVENANTS..............113
SECTION 6.01 Appointment and Designation of the Servicer..113
SECTION 6.02 Collection of Receivable Payments;
Modification and Amendment of Receivables....115
SECTION 6.03 Realization Upon Receivables.................116
SECTION 6.04 Insurance Regarding Intervals................116
SECTION 6.05 Maintenance of Security Interests in
Intervals....................................117
SECTION 6.06 Pledged Receivable Receipts..................118
SECTION 6.07 [Intentionally omitted]......................118
SECTION 6.08 Unidentified Payments; Lender's Right of
Presumption..................................118
SECTION 6.09 No Rights of Withdrawal......................118
SECTION 6.10 Permitted Investments........................118
SECTION 6.11 Servicing Compensation.......................119
SECTION 6.12 Reports to the Agent; Account Statements;
Servicing Information........................119
SECTION 6.13 Statements as to Compliance; Financial
Statements...................................120
SECTION 6.14 Access to Certain Documentation; Obligors....122
SECTION 6.15 Backup Servicer..............................123
SECTION 6.16 Additional Remedies of Agent Upon Event of
Default......................................126
SECTION 6.17 Waiver of Defaults...........................126
SECTION 6.18 Maintenance of Certain Insurance.............126
SECTION 6.19 Segregation of Collections...................126
SECTION 6.20 UCC Matters; Protection and Perfection of
Pledged Assets...............................126
SECTION 6.21 Servicer Advances............................127
SECTION 6.22 [Intentionally omitted]......................128
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Page
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SECTION 6.23 Repurchase of Receivables Upon Breach of
Covenant or Representation and Warranty by
Servicer.....................................128
SECTION 6.24 Compliance with Applicable Law...............128
SECTION 6.25 Receipt of Additional UCC Termination
Statements, etc..............................128
ARTICLE VII. EVENTS OF DEFAULT............................................129
SECTION 7.01 Events of Default............................129
SECTION 7.02 Additional Remedies of Agent and Lender......132
ARTICLE VIII. INDEMNIFICATION..............................................133
SECTION 8.01 Indemnities by the Borrower..................133
SECTION 8.02 Indemnities by the Servicer..................135
ARTICLE IX. MISCELLANEOUS................................................136
SECTION 9.01 Amendments and Waivers.......................136
SECTION 9.02 Notices, Etc.................................137
SECTION 9.03 No Waiver; Remedies..........................137
SECTION 9.04 Binding Effect; Assignability; Multiple
Lenders......................................137
SECTION 9.05 Term of This Agreement.......................138
SECTION 9.06 Governing Law; Jury Waiver...................138
SECTION 9.07 Costs, Expenses and Taxes....................138
SECTION 9.08 No Proceedings...............................140
SECTION 9.09 Recourse Against Certain Parties.............140
SECTION 9.10 Execution in Counterparts; Severability;
Integration..................................140
SECTION 9.11 Tax Characterization.........................141
SECTION 9.12 Consent Procedures...........................141
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
SCHEDULE I Condition Precedent Documents
SCHEDULE II Credit and Collection Policy
SCHEDULE III Prior Names, Tradenames, Fictitious Names and "Doing Business As"
Names
SCHEDULE IV Litigation
SCHEDULE V Applicable Underlying Borrowers and Applicable Underlying Sellers
which are Affiliates of the Servicer or the Borrower
EXHIBITS
EXHIBIT A Form of Borrowing Base Certificate
EXHIBIT B Form of Commercial Paper Remittance Report
EXHIBIT C Form of Monthly Remittance Report
EXHIBIT D Form of Underlying Opinions
EXHIBIT E [Reserved.]
EXHIBIT F-1 Forms of Consumer Allonge
EXHIBIT F-2 Forms of Developer Allonge
EXHIBIT G-1 Form of Pre-Closing Hypothecation Loan Agreement
EXHIBIT G-2 Form of Post-Closing Hypothecation Loan Agreement
EXHIBIT H-1 Form of Pre-Closing Eligible Developer Sale Agreement
EXHIBIT H-2 Form of Post-Closing Eligible Developer Sale Agreement
(Non-Equivest Affiliate)
EXHIBIT H-3 Form of Post-Closing Eligible Developer Sale Agreement (Equivest
Affiliate)
EXHIBIT I [Reserved.]
EXHIBIT J [Reserved.]
EXHIBIT K [Reserved.]
EXHIBIT L [Reserved.]
EXHIBIT M Existing Developer Note Receivables
EXHIBIT N [Reserved.]
EXHIBIT O Existing Eligible Developer Sale Agreements
EXHIBIT P Form of Backup Servicer Letter of Certification
EXHIBIT Q Existing Eligible Developers
EXHIBIT R Existing Eligible Developments
EXHIBIT S Eastern Resorts
EXHIBIT T Peppertree Resorts
EXHIBIT U Custodian's Fee
EXHIBIT V Consumer Receivables Requiring Post-Closing UCC Termination
Statements
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THIS RECEIVABLES LOAN AND SECURITY AGREEMENT is made as of January
31, 2000, among:
(1) EFI FUNDING COMPANY, INC., a Delaware corporation (the "Borrower");
(2) RESORT FUNDING, INC., a Delaware corporation ("RFI"), as the
Servicer (as defined herein);
(3) AUTOBAHN FUNDING COMPANY LLC ("Autobahn"), as a Lender (as defined
herein);
(4) DG BANK DEUTSCHE GENOSSENSCHAFTSBANK AG ("DG Bank"), as agent for
the Lender (the "Agent");
(5) U.S. BANK TRUST NATIONAL ASSOCIATION, as the Custodian (as such term
is defined herein); and
(6) SAGE SYSTEMS, INC., a Washington corporation ("Sage"), as the Backup
Servicer (as such term is defined herein).
IT IS AGREED as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01 Certain Defined Terms. (a) Certain capitalized terms
used throughout this Agreement are defined above or in this Section 1.01.
(b) As used in this Agreement and its exhibits, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Acceptable Environmental Report" means an environmental report or
reports (i) certified to RFI and assigned by RFI to the Borrower and by the
Borrower to the Agent (in the case of an environmental report related to an
Existing Pledged Consumer Note Receivable or an Existing Purchased Consumer Note
Receivable) or (ii) certified to the Borrower and RFI or EFI, as applicable, and
assigned by the Borrower to the Agent (in the case of an environmental report
related to a Pledged Consumer Note Receivable or a Pledged Purchased Consumer
Note Receivable other than an Existing Pledged Consumer Note Receivable or an
Existing Purchased Consumer Note Receivable), in each case, covering an
Applicable Development and confirming (to the extent relevant, in the Agent's
reasonable discretion): (i) the absence of Hazardous Materials on, under, or
affecting the Land or any other real property or personal property comprising
such Applicable Development, except for commercially reasonable amounts thereof
commonly found at residential and resort properties in the Applicable
Jurisdiction, (ii) that an engineering or environmental consulting firm has
obtained, reviewed, and included within its report a CERCLIS printout from the
EPA, statements from the EPA and other applicable state and local authorities,
and such other information as the Borrower or the Agent may reasonably require,
including, without limitation, a Phase I Environmental Inspection (if available,
in the case of an Applicable Development located outside of the United States),
all of which information shall confirm that there are no known or suspected
Hazardous Materials located at, used or stored on, or transported to or from the
Applicable Development or in such proximity thereto as to create a material risk
of contamination of any of the related Applicable Underlying Loan Collateral or
Applicable Underlying Purchased Note Collateral, except for commercially
reasonable amounts thereof commonly found at residential and resort properties
in the related Applicable Jurisdiction; and (iii) if such Applicable
Development, or any part thereof, was constructed prior to 1986, the absence of
friable asbestos within the Units, Common Elements, if any, or elsewhere at such
Applicable Development. If any such environmental report reflects the presence
of friable asbestos, regardless of when construction of the Applicable
Development was completed, such report shall be deemed not to be an Acceptable
Environmental Report. To the extent that an environmental report complying with
the requirements of this definition has been obtained with respect to an
Applicable Development, there shall be no requirement to obtain another
environmental report or an update of the prior environmental report, in each
case, with respect to such Applicable Development unless there shall have
occurred an event that could make such environmental report materially incorrect
or misleading.
"Accountants' Report" has the meaning assigned to that term in
Section 6.13(b).
"AD&C Mortgage" means, with respect to any Development, a mortgage
encumbering such Development or a portion thereof which (i) secures the debt of
the related Developer under an acquisition, development and/or construction loan
facility and (ii) provides for the release of any Interval related to a Unit
located at such Development from the lien created by such mortgage upon the sale
of such Interval to a Consumer.
"Additional Deposit" has the meaning assigned thereto in the Sinking
Fund Agreement.
"Adjusted Eurodollar Rate" means with respect to any Fixed Period
for any Loan allocated to such Fixed Period, an interest rate per annum equal to
the sum of (i) the Applicable Margin and (ii) the Eurodollar Rate for such Fixed
Period.
"Adverse Claim" means a lien, security interest, charge, encumbrance
or other right or claim of any Person other than, with respect to the Pledged
Assets, any lien, security interest, charge, encumbrance or other right or claim
in favor of the Lender (or the Agent on behalf of the Lender).
"Affected Party" has the meaning assigned to that term in Section
2.13.
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"Affiliate" when used with respect to a Person means any other
Person controlling, controlled by or under common control with such Person. For
the purposes of this definition, "control," when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent" has the meaning assigned to that term in the preamble
hereto.
"Agent's Bank" means Manufacturers and Traders Trust Company.
"Agreement" means this Receivables Loan and Security Agreement, as
the same may be amended, restated, supplemented and/or otherwise modified from
time to time hereafter.
"Applicable Declaration" means, with respect to an Applicable
Development, the declaration of condominium, declaration of covenants,
conditions, and restrictions, master deed, or similar document, together with
any amendments or restatements thereof, that establishes the underlying form of
ownership of such Applicable Development and, if required by Applicable Law, is
recorded in the appropriate public records of the Applicable Jurisdiction.
"Applicable Development" means an Eligible Development in connection
with which RFI has made a Qualified Loan to the related Eligible Developer or
RFI or EFI has purchased a Consumer Note Receivable from the related Eligible
Developer including, without limitation, in the case of a Pledged Consumer Note
Receivable or a Pledged Purchased Consumer Note Receivable related to a
Consumer's purchase of a Club Membership Right to Use Interval or a Club
Membership Fee Simple Interval, the Eligible Development serving as the related
Home Resort but not the other Developments with respect to which such Consumer
has rights.
"Applicable Jurisdiction" means, with respect to an Applicable
Development, the state, county, municipality, and/or other governmental
jurisdiction (including a foreign jurisdiction if applicable) in which such
Applicable Development is located.
"Applicable Laws" means, with respect to an Applicable Development,
any and all foreign, federal, state, and local statutes, ordinances, rules,
regulations, court orders and decrees, administrative orders and decrees, and
other legal requirements of any and every conceivable type to which RFI, EFI,
the Borrower, the Guarantor, such Applicable Development or any portion thereof,
or all or any portion of the Collateral or any Applicable Underlying Loan
Collateral or any Applicable Underlying Purchased Note Collateral is or becomes
subject to from time to time.
"Applicable Margin" means 1.35% per annum; provided, however, that
the Applicable Margin shall increase to 1.50% per annum beginning on the date
that either or both of
3
the Rating Agencies issues a rating with respect to the financing facility
contemplated hereunder which is lower than the Minimum Shadow Rating.
"Applicable Timeshare Documents" means all Applicable Declarations
and other documents and instruments relating to an Applicable Development and/or
the Units, Common Elements, if any, Common Furnishings, if any, and Intervals
thereat, including, but not limited to, the project documents, registrations and
other approvals, business licenses, Applicable Timeshare Owners' Association
agreements and corporate documents and other documents to the extent used in the
marketing, sale, and financing of such Intervals. Each Applicable Timeshare
Document shall be in form and content acceptable to the Agent, which such
acceptance shall not be unreasonably withheld, and provided that the Servicer
shall have no obligation to deliver or obtain the Agent's approval with respect
to any marketing materials comprising Applicable Timeshare Documents. Promptly
upon the request of the Agent, the Servicer shall deliver to the Agent true,
correct, and complete copies of all material Applicable Timeshare Documents
(other than any marketing materials) and any material amendments thereto. The
Agent's approval of such material Applicable Timeshare Documents and any
material amendments thereto shall be a condition precedent to any Loans
hereunder in respect of the Applicable Development to which such Applicable
Timeshare Documents pertain.
"Applicable Timeshare Owners' Association" means, with respect to
each Applicable Development, a not-for-profit corporation or other legal entity
organized under the laws of the Applicable Jurisdiction.
"Applicable Underlying Borrower" means an Eligible Developer that is
the maker of a Pledged Developer Note Receivable.
"Applicable Underlying Consumer" means a Consumer that is the maker
of a Pledged Purchased Consumer Note Receivable or a Pledged Consumer Note
Receivable.
"Applicable Underlying Guarantor" means any Person that has executed
and delivered an Underlying Guaranty in favor of RFI or EFI in connection with
an Applicable Underlying Loan or Applicable Underlying Purchase.
"Applicable Underlying Loan" means a Qualified Loan which has been
sold by RFI to the Borrower pursuant to the RFI/Borrower Receivables Purchase
Agreement and Pledged by the Borrower to the Agent, for the benefit of the
Lender, in order to secure a Loan hereunder.
"Applicable Underlying Loan Collateral" means any and all collateral
granted to RFI to secure the payment by an Applicable Underlying Borrower or the
Applicable Underlying Consumer of all principal, interest, and other amounts
owed to RFI by such Applicable Underlying Borrower in connection with an
Applicable Underlying Loan (all of which Applicable Underlying Loan Collateral
shall have been (i) assigned by RFI to the Borrower pursuant to the RFI/Borrower
Receivables Purchase Agreement and (ii) pledged by the Borrower to the Agent,
for the benefit of the Lender, pursuant to the terms hereof).
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"Applicable Underlying Loan Documents" mean all documents and
instruments that evidence or secure an Applicable Underlying Loan, including but
not limited to any Developer Note Receivables, Developer Mortgages, and
Underlying Guarantees executed and delivered to RFI in connection therewith. The
form and content of each Applicable Underlying Loan Document shall be
satisfactory to the Agent, in its reasonable discretion, and approved by the
Agent in writing prior to any Loan hereunder secured by the Applicable
Underlying Loan to which such Applicable Underlying Loan Document pertains. The
Agent, on behalf of the Lender, hereby approves as one of the Applicable
Underlying Loan Documents each of the forms of Hypothecation Loan Agreement
attached as Exhibit G-1 and Exhibit G-2 hereto. The Borrower agrees not to (and
agrees not to allow RFI to) amend, restate, or otherwise modify any Applicable
Underlying Loan Documents in a manner which materially affects the Agent's or
the Lender's interests in any related Applicable Underlying Loan Collateral
without the Agent's prior written consent, which consent may be granted or
withheld, in the Agent's reasonable discretion. Copies of any such amended,
restated, or otherwise modified Applicable Underlying Loan Document, as so
approved by the Agent and fully executed and delivered by RFI, shall be provided
to the Agent promptly following the effective date thereof.
"Applicable Underlying Purchase" means a Qualified Purchase of a
Consumer Note Receivable, which Consumer Note Receivable has been sold by RFI or
EFI, as the case may be, to the Borrower pursuant to the applicable Borrower
Receivables Purchase Agreement and Pledged by the Borrower to the Agent, for the
benefit of the Lender, in order to secure a Loan hereunder.
"Applicable Underlying Purchase Documents" means all documents and
instruments that evidence an Applicable Underlying Purchase executed and
delivered to RFI or EFI, as the case may be, in connection therewith. The form
and content of each Applicable Underlying Purchase Document shall be
satisfactory to the Agent, in its reasonable discretion, and approved by the
Agent in writing, prior to any Loan hereunder secured by the Pledged Purchased
Consumer Note Receivables to which such Applicable Underlying Purchase Document
pertains. The Agent, on behalf of the Lender, hereby approves, as one of the
Applicable Underlying Purchase Documents, each of the forms of Eligible
Developer Sale Agreement attached as Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, and Exhibit H-3
hereto. The Borrower agrees not to (and agrees not to allow RFI or EFI to)
amend, restate, or otherwise modify any Applicable Underlying Purchase Documents
in a manner which materially affects the Agent's or the Lender's interests in
any related Applicable Underlying Purchased Note Collateral without the Agent's
prior written consent, which consent may be granted or withheld, in the Agent's
reasonable discretion. Copies of any such amended, restated, or otherwise
modified Applicable Underlying Purchase Document, as so approved by the Agent
and fully executed and delivered by RFI or EFI, as the case may be, shall be
provided to the Agent promptly following the effective date thereof.
"Applicable Underlying Purchased Note Collateral" means any and all
collateral granted to an Applicable Underlying Seller by an Applicable
Underlying Consumer to secure the payment of all principal, interest, and other
amounts owed to such Applicable Underlying Seller
5
by such Applicable Underlying Consumer in connection with a Pledged Purchased
Consumer Note Receivable (all of which Applicable Underlying Purchased Note
Collateral shall have been (i) assigned by such Applicable Underlying Seller to
RFI or EFI, as the case may be, pursuant to an Eligible Developer Sale
Agreement, (ii) assigned by RFI or EFI, as the case may be, to the Borrower
pursuant to the applicable Borrower Receivables Purchase Agreement and (iii)
Pledged by the Borrower to the Agent, for the benefit of the Lender, pursuant to
the terms hereof).
"Applicable Underlying Seller" means an Eligible Developer that sold
a Consumer Note Receivable to RFI or EFI pursuant to an Eligible Developer Sale
Agreement.
"Assigned Documents" has the meaning assigned to that term in
Section 2.14.
"Assignment" has the meaning set forth in the applicable Borrower
Receivables Purchase Agreement.
"Assignment and Acceptance" has the meaning assigned to that term in
Section 9.04.
"Assignment Documents" means, with respect to each Receivable, each
of the following (each in form and substance acceptable to the Agent in its
reasonable discretion):
(a) An absolute and unconditional first collateral assignment or
assignments of (i) all of RFI's right, title, and interest in the
Developer Mortgage, if any, that secures such Receivable to the Borrower
and (ii) all of the Borrower's right, title, and interest in all Developer
Mortgages that secure any Receivable to the Agent, for the benefit of the
Lender;
(b) An absolute and unconditional first collateral assignment or
assignments of (i) all of RFI's or EFI's, as the case may be, right,
title, and interest in and to all Interval Mortgages that secure the
payment of Pledged Consumer Note Receivables or Pledged Purchased Consumer
Note Receivables to the Borrower and (ii) all of the Borrower's right,
title, and interest in and to all Interval Mortgages that secure the
payment of Pledged Consumer Note Receivables or Pledged Purchased Consumer
Note Receivables to the Agent, for the benefit of the Lender;
(c) An absolute and unconditional first collateral assignment or
assignments of all of (i) RFI's or EFI's, as the case may be, right,
title, and interest in and to the Encumbered Intervals, together with all
appurtenant rights and interests, including, without limitation,
appurtenant rights and interests in and to the Common Elements and Common
Furnishings, if any, and all easement, license, and use rights in and to
all Applicable Development facilities and amenities, all as described and
set forth in the Applicable Timeshare Documents to the Borrower and (ii)
all of the Borrower's right, title, and interest in and to the Encumbered
Intervals, together with all appurtenant rights and interests, including,
without limitation, appurtenant rights and interests in and to the
6
Common Elements and Common Furnishings, if any, and all easement, license,
and use rights in and to all Applicable Development facilities and
amenities, all as described and set forth in the Applicable Timeshare
Documents to the Agent, for the benefit of the Lender;
(d) An absolute and unconditional first collateral assignment and
pledge in and to all of (i) RFI's or EFI's, as the case may be, right,
title, and interest in all documents, instruments, accounts, chattel
paper, and general intangibles relating to the Pledged Consumer Note
Receivables, Pledged Purchased Consumer Note Receivables, Pledged
Developer Note Receivables, Developer Mortgages, if any, the Interval
Mortgages, if any, and the other Applicable Underlying Loan Collateral and
Applicable Underlying Purchased Note Collateral (including the cash and
non-cash proceeds thereof) to the Borrower and (ii) all of the Borrower's
right, title, and interest in all documents, instruments, accounts,
chattel paper, and general intangibles relating to the Pledged Consumer
Note Receivables, Pledged Purchased Consumer Note Receivables, Pledged
Developer Note Receivables, Developer Mortgages, if any, the Interval
Mortgages, if any, and the other Applicable Underlying Loan Collateral and
Applicable Underlying Purchased Note Collateral (including the cash and
non-cash proceeds thereof) to the Agent, for the benefit of the Lender;
(e) An absolute and unconditional first collateral assignment and
pledge in and to all of (i) RFI's or EFI's, as the case may be, right,
title, and interest in all furniture, furnishings, and fixtures of every
kind and description (and all improvements and accessions thereto,
including, without limitation, the Common Furnishings, if any,) located in
or on or used in connection with any Encumbered Interval to the Borrower
and (ii) all of the Borrower's right, title, and interest in all
furniture, furnishings, and fixtures of every kind and description (and
all improvements and accessions thereto, including, without limitation,
the Common Furnishings, if any,) located in or on or used in connection
with any Encumbered Interval to the Agent, for the benefit of the Lender;
(f) An absolute and unconditional first collateral assignment and
pledge in and to all of (i) RFI's or EFI's, as the case may be, right,
title, and interest in all other agreements to which any Applicable
Underlying Borrower or Applicable Underlying Seller is or becomes a party
or holds any interest and which in any way relate to the use, occupancy,
maintenance, or enjoyment of any Encumbered Intervals or Encumbered
Personal Property, including, but not limited to, utility contracts,
maintenance agreements, management agreements, service contracts, and any
agreement guaranteeing the performance of the obligations contained in any
of the foregoing agreements (to the extent that assignments thereof are
obtained by RFI or EFI, as the case may be, from the Applicable Underlying
Borrower or Applicable Underlying Seller) to the Borrower and (ii) all of
the Borrower's right, title, and interest in all other agreements to which
any Applicable Underlying Borrower or Applicable Underlying Seller is or
becomes a party or holds any interest and which in any way relate to the
use, occupancy, maintenance, or enjoyment of any Encumbered Intervals or
Encumbered Personal Property, including, but
7
not limited to, utility contracts, maintenance agreements, management
agreements, service contracts, and any agreement guaranteeing the
performance of the obligations contained in any of the foregoing
agreements (to the extent that assignments thereof are obtained by RFI or
EFI, as the case may be, from the Applicable Underlying Borrower or
Applicable Underlying Seller) to the Agent, for the benefit of the Lender;
(g) An absolute and unconditional first collateral assignment of all
of (i) RFI's or EFI's, as the case may be, right, title, and interest in
and to any and all easements, contracts, leasehold interests (whether as
lessor or lessee), permits, licenses, and approvals in respect of all or
any portion of an Applicable Development to the Borrower and (ii) all of
the Borrower's right, title, and interest in and to any and all easements,
contracts, leasehold interests (whether as lessor or lessee), permits,
licenses, and approvals in respect of all or any portion of an Applicable
Development to the Agent, for the benefit of the Lender;
(h) An absolute and unconditional first collateral assignment of all
of (i) RFI's or EFI's, as the case may be, right, title, and interest in
and to any rights inuring to an Applicable Underlying Borrower or an
Applicable Underlying Consumer related to easements, leasehold interests
(whether as lessor or lessee), franchises, permits, approvals, licenses,
facilities, and amenities on, affecting, or appurtenant to the Applicable
Developments and rights to occupy, use, and enjoy any such facilities or
amenities and any Encumbered Intervals to the Borrower and (ii) all of the
Borrower's right, title, and interest in and to any rights inuring to an
Applicable Underlying Borrower or an Applicable Underlying Consumer
related to easements, leasehold interests (whether as lessor or lessee),
franchises, permits, approvals, licenses, facilities, and amenities on,
affecting, or appurtenant to the Applicable Developments and rights to
occupy, use, and enjoy any such facilities or amenities and any Encumbered
Intervals to the Agent, for the benefit of the Lender;
(i) An absolute and unconditional first collateral assignment of all
of (i) RFI's or EFI's, as the case may be, right, title, and interest in,
to and under all Payment Authorization Agreements signed and delivered by
or on behalf of a Consumer that purchased an Encumbered Interval and all
accounts and proceeds relating thereto or deriving therefrom to the
Borrower and (ii) all of the Borrower's right, title, and interest in, to
and under all Payment Authorization Agreements signed and delivered by or
on behalf of a Consumer that purchased an Encumbered Interval and all
accounts and proceeds relating thereto or deriving therefrom to the Agent,
for the benefit of the Lender; and
(j) An absolute and unconditional first collateral assignment of all
of (i) RFI's or EFI's, as the case may be, right, title, and interest in
and to any rights inuring to an Applicable Underlying Borrower, Applicable
Underlying Seller, RFI, EFI or the Borrower, pursuant to any designation
of such Applicable Underlying Borrower, Applicable Underlying Seller, RFI,
EFI or the Borrower as an "institutional mortgagee,"
8
an "institutional lender," or a "mortgagee" in connection with any
Encumbered Interval as provided in the Applicable Underlying Timeshare
Documents to the Borrower and (ii) all of the Borrower's right, title, and
interest in and to any rights inuring to an Applicable Underlying
Borrower, Applicable Underlying Seller, RFI, EFI or the Borrower pursuant
to any designation of such Applicable Underlying Borrower, Applicable
Underlying Seller, RFI, EFI or the Borrower as an "institutional
mortgagee," an "institutional lender," or a "mortgagee" in connection with
any Encumbered Interval as provided in the Applicable Underlying Timeshare
Document to the Agent, for the benefit of the Lender.
"Autobahn" has the meaning assigned to that term in the preamble
hereto.
"Backup Servicer" means Sage or any substitute Backup Servicer
appointed by the Agent pursuant to Section 6.15.
"Backup Servicer Delivery Date" has the meaning assigned to that
term in Section 6.12(e).
"Backup Servicer's Fee" means, for any Remittance Period or portion
thereof after the occurrence of a Servicer Default and the appointment of the
Backup Servicer as Servicer hereunder, an amount, payable out of Collections on
the Pledged Receivables and amounts applied to the payment of, or treated as
payments on, the Pledged Receivables, equal to the applicable Backup Servicing
Fee Rate multiplied by the Net Eligible Receivables Balance as of the first day
of such Remittance Period.
"Backup Servicing Fee Rate" means the per annum rate of 1.00%.
"Bankruptcy Code" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, 11
U.S.C. ▇▇.▇▇. 101 et seq., as amended.
"Bankruptcy Event" shall be deemed to have occurred with respect to
a Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the
like for such Person or all or substantially all of its assets, or any
similar action with respect to such Person under any law relating to
bankruptcy, insolvency, reorganization, winding up or composition or
adjustment of debts, and such case or proceeding shall continue
undismissed, or unstayed and in effect, for a period of 60 consecutive
days or an order for relief in respect of such Person shall be entered in
an involuntary case under the federal bankruptcy laws or other similar
laws now or hereafter in effect; or
9
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect,
or shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) for such Person or for any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall
fail to, or admit in writing its inability to, pay its debts generally as
they become due, or, if a corporation or similar entity, its board of
directors shall vote to implement any of the foregoing.
"Base Rate" means, on any date, a fluctuating rate of interest per
annum equal to the arithmetic average of the rates of interest publicly
announced by The Chase Manhattan Bank and ▇▇▇▇▇▇ Guaranty Trust Company of New
York (or their respective successors) as their respective prime commercial
lending rates (or, as to any such bank that does not announce such a rate, such
bank's "base" or other rate determined by the Lender to be the equivalent rate
announced by such bank), except that, if any such bank shall, for any period,
cease to announce publicly its prime commercial lending (or equivalent) rate,
the Agent shall, during such period, determine the Base Rate based upon the
prime commercial lending (or equivalent) rates announced publicly by the other
such banks or, if each such bank ceases to announce publicly its prime
commercial lending (or equivalent) rate, based upon the prime commercial lending
(or equivalent) rate or rates announced publicly by one or more other banks
reasonably acceptable to the Borrower. The prime commercial lending (or
equivalent) rates used in computing the Base Rate are not intended to be the
lowest rates of interest charged by such banks in connection with extensions of
credit to debtors. The Base Rate shall change as and when such banks' prime
commercial lending (or equivalent) rates change.
"Borrower" has the meaning assigned to that term in the preamble
hereto.
"Borrower Receivables Purchase Agreement" means, either, the
EFI/Borrower Receivables Purchase Agreement or the RFI/Borrower Receivables
Purchase Agreement, or both, as the context dictates or requires.
"Borrowing" means a borrowing of Loans under this Agreement.
"Borrowing Base Certificate" means a report, in substantially the
form of Exhibit A, prepared by the Servicer for the benefit of Lender pursuant
to Section 6.12(c).
"Borrowing Base Deficiency" means, at any time that the Capital
Limit shall be less than the Facility Amount, an amount equal to the amount of
such deficiency.
"Borrowing Date" means, with respect to any Borrowing, the date on
which such Borrowing is funded, which date, other than in the case of the
initial Borrowing, shall be a Subsequent Borrowing Date.
10
"Borrowing Limit" means initially $100,000,000; provided, that the
Borrower may, if no Event of Default or Early Amortization Event shall have
occurred and be continuing, increase the Borrowing Limit to $150,000,000 upon
seven (7) Business Days' written notice to the Agent and provided, further, that
at all times, on or after the Early Amortization Commencement Date, the
Borrowing Limit shall mean the aggregate outstanding Loans.
"Business Day" means a day of the year other than a Saturday or a
Sunday or any other day on which banks are not authorized or required to close
in New York City; provided, that, if any determination of a Business Day shall
relate to a Loan bearing interest at the Adjusted Eurodollar Rate, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Capital Limit" means, at any time, an amount equal to:
NERB + CA
where: NERB = the Net Eligible Receivables Balance at such time; and
CA = the amount of Collections on deposit in the Collection
Account at such time to be applied in accordance with
Section 2.05 on the next Remittance Date.
"Change in Control" means that at any time (i) Equivest shall own
less than 100% of all classes of capital stock of the Borrower, (ii) Equivest
shall own less than 100% of all classes of capital stock of each of RFI and EFI,
(iii) any event or condition occurs which results in any Person or "group"
(within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended) other than a Person or group that owns the majority of the
capital stock of Equivest on the date of this Agreement: (A) having acquired
beneficial ownership of 50% or more of any outstanding class of capital stock of
Equivest having ordinary voting power in the election of directors of Equivest
or (B) obtaining the power (whether or not exercised) to elect a majority of
Equivest's directors, (iv) Equivest, RFI, EFI or the Borrower merge or
consolidate with any other Person (other than a merger or consolidation as to
which Equivest, RFI, EFI or the Borrower is the surviving entity) or (v) ▇▇▇▇▇▇
▇. ▇▇▇▇▇ is no longer employed as President of RFI or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ is no
longer employed as Chief Executive Officer of the Borrower, Equivest and EFI
and, in either case, a successor acceptable to the Agent is not appointed within
60 days of the termination of such employment.
"Chargeback Rate" means, as of any date of determination, an amount
(expressed as a percentage) equal to (i) the aggregate Outstanding Principal
Balances of all Pledged Purchased Consumer Note Receivables and all Pledged
Consumer Note Receivables which were, in each case, Consumer Level Eligible
Receivables at the time of their Pledge hereunder and which became Chargeback
Receivables during the immediately preceding Remittance Period, divided by (ii)
the aggregate Outstanding Principal Balances of all Pledged Purchased Consumer
Note Receivables and all Pledged Consumer Note Receivables which were, in each
case,
11
Consumer Level Eligible Receivables at the time of their Pledge hereunder and
which continued to be Consumer Level Eligible Receivables as of the last day of
the immediately preceding Remittance Period.
"Chargeback Receivable" means, as of any time of determination, any
Pledged Purchased Consumer Note Receivable or any Pledged Consumer Note
Receivable:
(i) which has been or should be written off as a result of the
occurrence of a Bankruptcy Event with respect to the Consumer obligated to
pay such Pledged Purchased Consumer Note Receivable or Pledged Consumer
Note Receivable or which has been or should otherwise be deemed
uncollectible by the Servicer in accordance with the Credit and Collection
Policy or pursuant to GAAP; or
(ii) with respect to which the Servicer has requested that the
relevant Developer repurchase or replace such Pledged Purchased Consumer
Note Receivable or make a payment to reduce the outstanding principal
amount of loans under the applicable Hypothecation Loan Agreement in the
amount of such Pledged Consumer Note Receivable (or replace such Pledged
Consumer Note Receivable), in each case, pursuant to the Developer
Repurchase Obligation of such Developer.
"Club Membership Right to Use Interval" means a membership interest,
which such membership interest is not evidenced by a deed, and all rights,
interests and privileges incident thereto, including but not limited to the
right to use a Unit or Units at the Developments of a Developer or an affiliate
of such Developer all of which are part of the same club.
"Club Membership Fee Simple Interval" means a membership interest,
and all rights, interests and privileges incident thereto, including but not
limited to the right to use a Unit or Units at the Developments of a Developer
or an affiliate of such Developer all of which are part of the same club, which
such membership interest is evidenced by a deed with respect to a fee simple
timeshare interest at a Development designated as a Home Resort.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means, collectively, the Pledged Purchased Consumer
Note Receivables, the Pledged Developer Note Receivables, the Pledged Consumer
Note Receivables and all Interval Mortgages, as applicable, and Developer
Mortgages, as applicable, related thereto, together with all accounts, chattel
paper, and general intangibles related thereto and the cash and non-cash
proceeds thereof, and all now owned or hereafter acquired right, title, and
interest of the Borrower in and to all Applicable Underlying Loan Collateral for
any and all of the Pledged Note Receivables, Interval Mortgages, Developer
Mortgages and all Applicable Underlying Purchased Note Collateral for any and
all of the Applicable Underlying Purchased Consumer Note Receivables, including
but not limited to:
(a) The Assignment Documents;
12
(b) First priority Liens in and to all of Borrower's right, title,
and interest in and to all books, records, reports, computer tapes,
computer disks, and software relating to all or any portion of the
Collateral; and
(c) Extensions, additions, improvements, betterments, renewals,
substitutions, and replacements of, for, or to any of the Collateral,
wherever located, together with the products, proceeds, issues, rents, and
profits thereof and any replacements, additions, or accessions thereto or
substitutions thereof, and all rights in or under insurance policies and
to the proceeds of any insurance policies covering any of the other
Collateral, all rights to unearned or refunded insurance premiums, and the
proceeds of any condemnation awards or any claims regarding any of the
other Collateral.
"Collateral Receipt" has the meaning assigned to that term in the
Custodial Agreement.
"Collection Account" means the special trust account (account number
▇▇▇-▇▇▇-▇▇▇ at the Agent's Bank) in the name of and under the sole dominion and
control of the Agent for the benefit of DG Bank and Autobahn; provided, that the
funds deposited in such account (including any interest and earnings thereon)
from time to time shall constitute the property and assets of the Borrower and
the Borrower shall be solely liable for any taxes payable with respect to the
Collection Account.
"Collection Account Securities Account Agreement" means that certain
Securities Account Agreement related to the Collection Account dated the date of
this Agreement among the Borrower, the Servicer, the Agent's Bank and the Agent,
as such agreement may from time to time be amended, supplemented or otherwise
modified in accordance with the terms thereof.
"Collection Date" means the date on which the aggregate outstanding
principal amount of the Loans have been repaid in full and all Yield and Fees
and all other Obligations have been paid in full and the Lender shall have no
further obligation to make any additional Loans.
"Collections" means, without duplication, with respect to any
Pledged Receivable (including, without limitation, each Pledged Developer Note
Receivable, Pledged Consumer Note Receivable and Pledged Purchased Consumer Note
Receivable), all cash receipts and proceeds in respect of such Pledged
Receivable, including, without limitation, all payments of any principal,
interest, fees, delinquent payments recovered in subsequent months which have
not been advanced by the Servicer, prepaid principal, Liquidation Proceeds or
any other proceeds from any disposition of any Collateral related to such
Pledged Receivable, late fees, redemption fees, other penalty fees and charges,
Servicer Advances, any payments under any insurance policies (including, without
limitation, any Title Policy) related to such Pledged Receivable or the related
Interval or Unit under which RFI, EFI, the Borrower, the Agent or the Lender are
named as loss payee or insured, as applicable, all cash proceeds of Related
Security with respect
13
to such Receivable or other amounts received by the Borrower or the Servicer
with respect to any Applicable Underlying Loan Documents or any Applicable
Underlying Purchase Documents, all cash proceeds of any other Pledged Assets
with respect to such Pledged Receivable, any amounts paid to the Borrower under
any Purchased Rate Cap, any interest earned on amounts on deposit in the
Collection Account, any income from the investment in Permitted Investments of
amounts deposited into the Collection Account and any amounts paid to the
Borrower (or the Agent or any Lender or assignees thereof) pursuant to the terms
of any Eligible Developer Sale Agreements (or other sale agreements with a
Developer) with respect to any Pledged Receivables.
"Commitment Percentage" has the meaning assigned to that term in
Section 9.04(b).
"Common Elements" means the common areas and facilities, as defined
or provided for in the Applicable Declaration and/or other Applicable Timeshare
Documents, including, without limitation, the Land and all improvements thereto
except for the Units that have been dedicated to the condominium or comparable
form of ownership, as well as any limited common elements, as those terms are
defined and used in the Applicable Declaration.
"Common Furnishings" means all furniture, furnishings, fixtures,
appliances, carpeting, and equipment located in a Unit or elsewhere within an
Applicable Development and available for use by Consumers in accordance with the
terms and conditions of the Applicable Timeshare Documents.
"Commercial Paper Remittance Report" means a report, in
substantially the form of Exhibit B, furnished by the Servicer to the Agent for
the Lender pursuant to Section 6.12(d).
"Computer Tape or Listing" means the computer tape or listing
(whether in electronic form or otherwise) generated by the Servicer on behalf of
the Borrower which provides information relating to the Receivables included in
the Net Eligible Receivables Balance.
"Consumer" means any Person (or if more than one Person, Consumer
shall mean, collectively, each such Person) who purchases one or more Intervals
and is the maker of a Consumer Note Receivable.
"Consumer Allonge" means an allonge or allonges, substantially in
one or more of the forms attached hereto as Exhibit F-1, (i) in the case of a
Pledged Consumer Note Receivable (other than an Existing Pledged Consumer Note
Receivable), endorsing such Consumer Note Receivable from the Applicable
Underlying Borrower to RFI, endorsing such Consumer Note Receivable from RFI to
the Borrower and endorsing such Consumer Note Receivable from the Borrower to
the Agent, for the benefit of the Lender, (ii) in the case of an Existing
Pledged Consumer Note Receivable, endorsing such Consumer Note Receivable from
Credit Suisse First Boston Mortgage Capital LLC to RFI, endorsing such Consumer
Note
14
Receivable from RFI to the Borrower and endorsing such Consumer Note Receivable
from the Borrower to the Agent, for the benefit of the Lender, (iii) in the case
of a Pledged Purchased Consumer Note Receivable (other than an Existing
Purchased Consumer Note Receivable except for those related to the Plantation
Cove Resort and Plantation Island Resort), endorsing such Consumer Note
Receivable from the Applicable Underlying Seller to RFI or EFI (as applicable)
unless such Consumer Note Receivable was already so endorsed on the back of the
Consumer Note Receivable itself, endorsing such Consumer Note Receivable from
RFI or EFI (as applicable) to the Borrower and endorsing such Consumer Note
Receivable from the Borrower to the Agent, for the benefit of the Lender or (iv)
in the case of an Existing Purchased Consumer Note Receivable related to the
Plantation Cove Resort or the Plantation Island Resort, endorsing such Consumer
Note Receivable from Credit Suisse First Boston Mortgage Capital LLC to EFI,
endorsing such Consumer Note Receivable from EFI to the Borrower and endorsing
such Consumer Note Receivable from the Borrower to the Agent, for the benefit of
the Lender.
"Consumer Level Eligible Receivable" means, at any time, an Eligible
Pledged Consumer Note Receivable, an Eligible Purchased Consumer Note Receivable
or an Eligible Presale Consumer Receivable.
"Consumer Note Receivable" means a promissory note, installment
sales contract, or other evidence of indebtedness made and executed by a
Consumer in favor of an Applicable Underlying Borrower or Applicable Underlying
Seller in connection with such Consumer's acquisition of an Interval, including
any Discounted Consumer Note Receivable and any Presale Consumer Note
Receivable.
"Contract" means, as the context requires, a Pledged Purchased
Consumer Note Receivable, a Pledged Consumer Note Receivable, a Hypothecation
Loan Agreement and/or an Eligible Developer Sale Agreement.
"Coupon Rate" means, with respect to any Receivable, the annual
percentage rate set forth in the Contract related to such Receivable.
"CP Disruption Event" means, at any time, the inability of the
Issuer to raise (whether as a result of a prohibition or any other event or
circumstance whatsoever) funds through the issuance of commercial paper notes in
the United States commercial paper market, including, without limitation, by
virtue of (i) any disruption in the commercial paper market, (ii) insufficient
availability under the liquidity or enhancement facility entered into by the
Issuer with respect to this Agreement or (iii) a downgrade of the rating of one
or more financial institutions extending credit to or for the account of the
Issuer or having a commitment to extend credit to the Lender under a liquidity
or enhancement facility which relates to this Agreement to a level lower than
that required by the Rating Agencies.
"CP Rate" means with respect to any Fixed Period for all Loans
allocated to such Fixed Period, (i) the per annum rate equivalent to the per
annum rate (or if more than one rate, the weighted average of the rates) at
which commercial paper notes of the Issuer having a term
15
equal to such Fixed Period and to be issued to fund, in whole or in part, the
applicable Loans (and, at the election of the Issuer, other loans by the Issuer)
by the Issuer may be sold by any placement agent or commercial paper dealer
selected by the Issuer, as agreed between each such agent or dealer and the
Issuer and notified by the Issuer to the Agent and the Servicer; provided,
however, if the rate (or rates) as agreed between any such agent or dealer and
the Issuer with respect to any Fixed Period for the applicable Loans is a
discount rate (or rates), the CP Rate for such Fixed Period shall be the rate
(or if more than one rate, the weighted average of the rates) resulting from
converting such discount rate (or rates) to an interest-bearing equivalent rate
per annum; provided, further, however, that such rate (or rates) shall reflect
and give effect to borrowings to fund small or odd dollar amounts that are not
easily accommodated in the commercial paper market to the extent that such
amounts are allocated, in whole or in part, to such Loans, plus (ii) the
Applicable Margin.
"CP Rollover Fixed Period" means any Fixed Period other than any
Fixed Period (i) applicable to the Loan arising as a result of the Borrowing on
the initial Borrowing Date, which shall have been requested in the Notice of
Borrowing delivered in connection with such Borrowing, (ii) applicable to any
new Loan arising as a result of a Borrowing on a Subsequent Borrowing Date which
shall have been requested in the Notice of Borrowing delivered in connection
with such Borrowing or (iii) applicable to any Loan accruing Yield at the Non-CP
Rate.
"Credit and Collection Policy" means the guidelines entitled "Resort
and Developer Underwriting" together with all exhibits thereto as annexed hereto
as Schedule II, as such policies may hereafter be amended, modified or
supplemented from time to time in compliance with this Agreement.
"Custodial Agreement" means that certain Custodial Agreement, dated
as of the date hereof, among the Borrower, the Agent and the Custodian, together
with all instruments, documents and agreements executed in connection therewith,
as such Custodial Agreement may from time to time be amended, restated,
supplemented and/or otherwise modified in accordance with the terms thereof.
"Custodian" means U.S. Bank Trust National Association or any
substitute Custodian appointed by the Agent pursuant to the Custodial Agreement.
"Custodian's Fee" means, for any Remittance Period, an amount,
payable out of Collections on the Pledged Receivables and amounts applied to the
payment of, or treated as payments on, the Pledged Receivables, equal to the
aggregate fees listed in Exhibit U hereto which relate to such Remittance
Period.
"Debt" of any Person means (i) indebtedness of such Person for
borrowed money, (ii) obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) obligations of such Person to pay the
deferred purchase price of property or services, (iv) obligations of such Person
as lessee under leases which shall have been or should
16
be, in accordance with GAAP, recorded as capital leases, (v) obligations secured
by an Adverse Claim upon property or assets owned by such Person, even though
such Person has not assumed or become liable for the payment of such obligations
and (vi) obligations of such Person under direct or indirect guaranties in
respect of, and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in clauses (i)
through (v) above.
"Defaulted Receivable" means, as of any time of determination, any
Pledged Purchased Consumer Note Receivable or any Pledged Consumer Note
Receivable:
(i) with respect to which more than 10% of any amount payable under
the terms thereof remains unpaid for ninety (90) or more days after the
due date therefor set forth therein;
(ii) which has been or should be written off as a result of the
occurrence of a Bankruptcy Event with respect to the Consumer obligated to
pay such Pledged Purchased Consumer Note Receivable or Pledged Consumer
Note Receivable or which has been or should otherwise be deemed
uncollectible by the Servicer in accordance with the Credit and Collection
Policy; or
(iii) with respect to which the Servicer has requested that the
relevant Developer repurchase or replace such Pledged Purchased Consumer
Note Receivable or make a payment to reduce the outstanding principal
amount of loans under the applicable Hypothecation Loan Agreement in the
amount of such Pledged Consumer Note Receivable (or replace such Pledged
Consumer Note Receivable), in each case, pursuant to the Developer
Repurchase Obligation of such Developer.
"Default Funding Rate" means (i) during the period commencing on the
date of the occurrence of an Event of Default and ending on the first
anniversary of such occurrence, an interest rate per annum equal to one and
eighty-five one hundredths of one percent (1.85%), plus the Eurodollar Rate,
(ii) during the period commencing on the day after the first anniversary of such
occurrence and ending on the date which is the second anniversary of such
occurrence, an interest rate per annum equal to two and thirty-five one
hundredths of one percent (2.35%), plus the Eurodollar Rate, (iii) during the
period commencing on the day after the second anniversary of the date of such
occurrence and ending on the third anniversary of such occurrence, an interest
rate per annum equal to two and eighty-five one hundredths of one percent
(2.85%), plus the Eurodollar Rate and (iv) during the period commencing on the
day after the third anniversary of the date of such occurrence and ending on the
Collection Date, an interest rate per annum equal to three and thirty-five one
hundredths of one percent (3.35%), plus the Eurodollar Rate.
"Delinquency Rate" means, as of any date of determination, an amount
(expressed as a percentage) equal to (i) the aggregate Outstanding Principal
Balances of all Pledged Purchased Consumer Note Receivables and all Pledged
Consumer Note Receivables which were, in each case, Consumer Level Eligible
Receivables at the time of their Pledge hereunder and
17
which were Delinquent Receivables as of the last day of the immediately
preceding Remittance Period, divided by (ii) the aggregate Outstanding Principal
Balances of all Pledged Purchased Consumer Note Receivables and all Pledged
Consumer Note Receivables which were, in each case, Consumer Level Eligible
Receivables at the time of their Pledge hereunder and continued to be Consumer
Level Eligible Receivables as of the last day of the immediately preceding
Remittance Period.
"Delinquent Receivable" means, as of any time of determination, any
Pledged Purchased Consumer Note Receivable or any Pledged Consumer Note
Receivable with respect to which more than 10% of any amount payable thereunder
remains unpaid for thirty (30) or more days after the due date therefor set
forth therein.
"Depository Institution" means a depository institution or trust
company, incorporated under the laws of the United States or any State thereof,
that is subject to supervision and examination by federal and/or State banking
authorities.
"Developer" means a Person which has developed a Development.
"Developer Allonge" means an allonge, in substantially the form of
Exhibit F-2 hereto, endorsing a Developer Note Receivable from Credit Suisse
First Boston Mortgage Capital LLC to RFI (in the case of an Existing Developer
Note Receivable), from RFI to the Borrower and from the Borrower to the Agent,
for the benefit of the Lender.
"Developer Mortgage" means a mortgage or deed of trust executed by
(i) an Applicable Underlying Borrower that secures the payment by an Applicable
Underlying Borrower of all principal, interest, and other amounts owed by such
Applicable Underlying Borrower in connection with an Applicable Underlying Loan
or (ii) an Applicable Underlying Seller that secures payment of all Pledged
Purchased Consumer Notes sold by such Applicable Underlying Seller to RFI or EFI
pursuant to the applicable Eligible Developer Sale Agreement.
"Developer Note Receivable" means a promissory note that is now or
hereafter made and executed by an Applicable Underlying Borrower to the order of
RFI, evidences an Applicable Underlying Loan, and may be secured in part by a
Developer Mortgage.
"Developer Repurchase Obligation" means, (i) with respect to any
Pledged Purchased Consumer Note Receivable, the unconditional obligation of the
related Applicable Underlying Seller to (a) repurchase such Pledged Purchased
Consumer Note Receivable pursuant to the terms of the applicable Eligible
Developer Sale Agreement if such Pledged Purchased Consumer Note Receivable
becomes a defaulted receivable under the terms of such Eligible Developer Sale
Agreement or (b) replace such Pledged Purchased Consumer Note Receivable with a
Consumer Level Eligible Receivable which has similar terms pursuant to the terms
of the applicable Eligible Developer Sale Agreement if such Pledged Purchased
Consumer Note Receivable becomes a defaulted receivable under the terms of such
Eligible Developer Sale Agreement or (ii) with respect to any Pledged Consumer
Note Receivable, the unconditional
18
obligation of the related Applicable Underlying Borrower to (a) make a payment
to reduce the outstanding principal amount of loans under the applicable
Hypothecation Loan Agreement in an amount equal to the outstanding principal
amount of any Pledged Consumer Note Receivable if such Pledged Consumer Note
Receivable becomes a defaulted receivable under the terms of the applicable
Hypothecation Loan Agreement or (b) replace such Pledged Consumer Note
Receivable with Consumer Level Eligible Receivables which have similar terms
(and an aggregate outstanding principal amount equal to at least the outstanding
principal amount of such Pledged Consumer Note Receivable) if such Pledged
Consumer Note Receivable becomes a defaulted receivable under the terms of the
applicable Hypothecation Loan Agreement.
"Developer's Interests" means all of an Applicable Underlying
Borrower's or Applicable Underlying Seller's right, title and interest in and to
a related Applicable Development.
"Developer Title Policy" has the meaning assigned to such term in
Section 3.02(k)(ii).
"Development" means an interval ownership, condominium, timeshare
project, and/or vacation ownership project consisting of, among other things,
certain Land, Units, Common Elements, if any, and Intervals, whether now
existing or hereafter added, in one or more buildings or phases, and all related
Common Furnishings, if any, easements, licenses, rights, interests, and other
appurtenances, as more fully described in the Applicable Declaration and the
other Applicable Timeshare Documents, as the same may be amended from time to
time.
"DG Bank" has the meaning assigned to that term in the preamble
hereto.
"Discount Amount" means at any time an amount equal to:
▇▇ - ▇▇
--
D
where: BL = the Borrowing Limit at such time.
D = 1.02.
"Discounted Consumer Note Receivable" means a promissory note,
installment sales contract, or other evidence of indebtedness made and executed
by a Consumer in favor of an Applicable Underlying Borrower or Applicable
Underlying Seller in connection with such Consumer's acquisition of an Interval,
which promissory note, installment sales contract, or other evidence of
indebtedness has, at the time of the origination thereof, an interest rate
requirement less than a market rate of interest for similar promissory notes,
installment sales contracts, or other evidence of indebtedness.
19
"Early Amortization Commencement Date" means the earlier of (i) the
date of the declaration or automatic occurrence of the Early Amortization
Commencement Date pursuant to Section 7.01 or (ii) at the option of the Lender
in its sole discretion, upon written notice to the Borrower, the occurrence of
an Early Amortization Event.
"Early Amortization Event" means the occurrence of any of the
following events:
(i) the rolling average of the Delinquency Rates in respect of any
three consecutive Remittance Periods exceeds 11.00%;
(ii) the rolling average of the Chargeback Rates in respect of any
three consecutive Remittance Periods exceeds 1.00%;
(iii) an Event of Default has occurred and is continuing;
(iv) a Change in Control has occurred and is continuing;
(v) a regulatory, tax or accounting body has ordered that the
activities of the Lender or any Affiliate of the Lender contemplated
hereby be terminated or, as a result of any other event or circumstance,
the activities of the Lender contemplated hereby may reasonably be
expected to cause the Lender, the Person, if any, then acting as the
administrator or the manager for the Lender, or any of their respective
Affiliates to suffer materially adverse regulatory, accounting or tax
consequences;
(vi) the Facility Maturity Date shall have occurred; or
(vii) a Servicer Default has occurred and is continuing at any time
that the Servicer is RFI or an Affiliate thereof.
"Early Amortization Funding Rate" means during the period commencing
on the date of the occurrence of an Early Amortization Event and ending on the
earlier of (i) the occurrence of an Event of Default or (ii) the Collection
Date, the Eurodollar Rate plus 1.85%.
"Eastern Receivable" means a Pledged Purchased Consumer Note
Receivable executed in connection with a Consumer's purchase of an Interval with
respect to a Unit located at one of the resorts listed on Exhibit S hereto.
"EFI" means EFI Development Funding, Inc., a Delaware corporation.
"EFI/Borrower Receivables Purchase Agreement" means that certain
Purchase Agreement dated as of the date hereof between EFI, as seller, and the
Borrower, as purchaser, together with all instruments, documents and agreements
executed in connection therewith, as such Purchase Agreement may from time to
time be amended, restated, supplemented and/or otherwise modified in accordance
with the terms hereof.
20
"Eligible Depository Institution" means a Depository Institution,
the short term unsecured senior indebtedness of which is rated at least Prime-1
by Moody's and F1 by Fitch, if rated by Fitch.
"Eligible Developer" means a Developer, (i) the creditworthiness for
a receivables/ hypothecation loan or receivables purchase/sale arrangement and
other qualifications of which are satisfactory to the Servicer, in its
reasonable discretion, based upon the Credit and Collection Policy, (ii) which
was underwritten by RFI based upon the Credit and Collection Policy and (iii)
which is not bankrupt or insolvent; it being understood by the parties hereto
that, subject to their continued compliance with each of the criteria included
in this definition, each of the Developers listed on Exhibit Q hereto shall be
Eligible Developers hereunder. Any of the foregoing eligibility criteria may be
waived by the Agent and the Lender in accordance with Section 9.01 of this
Agreement.
"Eligible Developer Note Receivable" means a Pledged Developer Note
Receivable that satisfies each of the following criteria:
(a) The Hypothecation Loan Agreement related to such Pledged
Developer Note Receivable provides for an advance rate of not greater than
90.00% against the aggregate Outstanding Principal Balance of Eligible
Pledged Consumer Note Receivables and/or Eligible Pledged Presale Consumer
Note Receivables securing the debt of the Applicable Underlying Borrower
thereunder and such advance rates have not been exceeded.
(b) Each Assignment Document exists with respect to such Pledged
Developer Note Receivable and is duly executed and enforceable in
accordance with its terms and has been delivered to the Custodian.
(c) [Intentionally Omitted].
(d) The Applicable Underlying Loan Documents related to such Pledged
Developer Note Receivable are in full force and effect.
(e) RFI was the original and sole payee thereof and a fully executed
Developer Allonge has been permanently affixed thereto.
(f) Neither the related Applicable Underlying Borrower nor the
related Applicable Underlying Guarantor, if any, is an Affiliate of RFI,
Equivest or the Borrower.
(g) Neither the Applicable Underlying Borrower nor the Applicable
Underlying Guarantor, if any, has any claim against RFI or the Borrower,
or any Affiliate thereof, and no defense, set-off, or counterclaim exists
with respect to such Pledged Developer Note Receivable.
21
(h) The original of such Pledged Developer Note Receivable and all
related documents and instruments, the terms of each of which shall comply
in all material respects with all Applicable Laws, have been endorsed by
RFI to the Borrower and from the Borrower to the Agent (for the benefit of
the Lender) in the manner prescribed by the Lender and have been delivered
to Custodian.
(i) Each such Pledged Developer Note Receivable is enforceable in
accordance with its terms and represents the genuine, legal, valid and
binding payment obligation of the Applicable Underlying Borrower related
thereto, and such Applicable Underlying Borrower had full legal capacity
to execute and deliver such Pledged Developer Note Receivable and any
other documents related thereto and to grant the security interest
purported to be granted under the related Hypothecation Loan Agreement;
and such Pledged Developer Note Receivable has not been prepaid or repaid
in full.
(j) Each such Pledged Developer Note Receivable was denominated in
United States Dollars and, at the time of origination and at all times
thereafter, materially conformed to all requirements of the Credit and
Collection Policy applicable to such Receivable and, in any case, no such
Receivable has been reserved against or would be required to be
written-off pursuant to the Credit and Collection Policy.
(k) All requirements of applicable federal, state and local laws,
and regulations thereunder (including, without limitation but only if and
to the extent applicable, usury laws, the Federal Truth-in-Lending Act,
the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair
Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal
Trade Commission Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal Reserve
Board's Regulations "B" and "Z", the Soldiers' and Sailors' Civil Relief
Act of 1940 and state adaptations of the National Consumer Act and of the
Uniform Consumer Credit Code, the Interstate Land Sales Full Disclosure
Act, the Real Estate Settlement Procedures Act and all other consumer
credit laws and equal credit opportunity and disclosure laws and any
regulations promulgated thereunder) in respect of each such Pledged
Developer Note Receivable, the sale of the Intervals related to the
Pledged Consumer Notes securing each such Pledged Developer Note
Receivable and the sale of credit life and credit accident and health
insurance and any extended service contracts in connection with the sale
of the Intervals related to the Pledged Consumer Notes securing each such
Pledged Developer Note Receivable, have been complied with in all material
respects.
(l) [Intentionally Omitted.]
(m) The Coupon Rate set forth in the Hypothecation Loan Agreement
related to such Pledged Developer Note Receivable shall be not less than
the Minimum APR
22
with respect to such Pledged Developer Note Receivable on the date on
which such Pledged Developer Note Receivable was Pledged hereunder.
(n) [Intentionally Omitted.]
(o) Each such Pledged Developer Note Receivable, as of the Borrowing
Date on which it was Pledged hereunder, (i) had not at any time during the
past 90 days been more than 30 days past due and was not, at the time of
its Pledge hereunder, more than 30 days past due and (ii) had no material
provision thereof waived, amended, altered or modified in any respect
since its origination in a manner which could be considered adverse to the
Lender's interest therein.
(p) Each such Pledged Developer Note Receivable (i) was originated
by RFI in the ordinary course of RFI's business and in accordance with the
Credit and Collection Policy and RFI had all necessary licenses and
permits to originate Pledged Developer Note Receivables in the
jurisdiction where the related Applicable Underlying Borrower and Eligible
Development were located, (ii) was sold by RFI to the Borrower under the
RFI/Borrower Receivables Purchase Agreement and the Borrower has all
necessary licenses and permits to own Pledged Developer Note Receivables
under all applicable law, (iii) contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for realization against the collateral security related thereto.
(q) Each such Pledged Developer Note Receivable was originated by
RFI without any fraud or material misrepresentation on the part of the
related Applicable Underlying Borrower or RFI. Each such Pledged Developer
Note Receivable was sold by RFI to the Borrower without any fraud or
material misrepresentation on the part of RFI.
(r) Each such Pledged Developer Note Receivable is payable by an
Applicable Underlying Borrower which (i) is not, nor was at any time
during the three (3) year period immediately preceding the applicable
Purchase Date, subject to any bankruptcy, insolvency, reorganization or
similar proceeding and (ii) has not had any real property owned by such
Applicable Underlying Borrower foreclosed or currently subject to
foreclosure.
(s) No such Pledged Developer Note Receivable is due from the United
States or any State or from any agency, department, subdivision or
instrumentality thereof.
(t) The information pertaining to each such Pledged Developer Note
Receivable set forth in the Schedule of Receivables (as defined in the
RFI/Borrower Receivables Purchase Agreement), the related Assignment and
each Borrowing Base Certificate, Commercial Paper Remittance Report and
Monthly Remittance Report is true and correct in all material respects.
23
(u) With respect to each Pledged Developer Note Receivable, by the
Borrowing Date on which such Pledged Developer Note Receivable is Pledged
hereunder and on each relevant date thereafter, RFI will have caused its
master computer records relating to such Pledged Developer Note Receivable
to be clearly and unambiguously marked to show that such Pledged Developer
Note Receivable has been sold or contributed to the Borrower and is
subject to a first priority security interest granted by the Borrower to
the Agent for the benefit of the Lender.
(v) The Computer Tape or Listing to be made available by RFI to the
Agent on the Borrowing Date on which such Pledged Developer Note
Receivable is Pledged hereunder is complete and accurate in all material
respects as of such Borrowing Date.
(w) Such Pledged Developer Note Receivable constitutes an instrument
within the meaning of the UCC of all jurisdictions which govern the
perfection of the Borrower's interest therein.
(x) The Borrower shall have taken all steps necessary under all
applicable law in order to cause a valid, subsisting and enforceable first
priority security interest to exist in its favor in the Applicable
Underlying Loan Collateral and all other Collateral related to each such
Pledged Developer Note Receivable (and the proceeds thereof) on or before
the Borrowing Date that such Pledged Developer Note Receivable is Pledged
hereunder and immediately prior to the Pledge of such Pledged Developer
Note Receivable by the Borrower to the Agent (for the benefit of the
Lender), there shall have existed in favor of the Borrower as secured
party, a valid, subsisting and enforceable first priority perfected lien
in the Applicable Underlying Loan Collateral, the Applicable Underlying
Purchased Note Collateral and all other such Collateral related to such
Receivable (and the proceeds thereof), and such security interest is and
shall be prior to all other liens upon and security interests in such the
Applicable Underlying Loan Collateral, the Applicable Underlying Purchased
Note Collateral and other such Collateral (and the proceeds thereof) that
now exist or may hereafter arise or be created; provided, that, any such
security interest in the Land, Units and/or Common Elements of an
Applicable Development, to the extent evidenced by a Developer Mortgage,
may be subordinate to an AD&C Mortgage.
(y) The Borrower shall have taken all steps necessary under all
applicable law in order to cause to exist in favor of the Agent, for the
benefit of the Lender, a valid, subsisting and enforceable first priority
perfected lien in (A) such Pledged Developer Note Receivable and (B) the
Borrower's first priority (subject to the proviso contained in
subparagraph (x) above) perfected security interest in the Applicable
Underlying Loan Collateral and all other Collateral related to each such
Pledged Developer Note Receivable (and the proceeds thereof) on or before
the Borrowing Date such Pledged Developer Note Receivable is Pledged
hereunder and upon the Pledge of such Pledged Developer Note Receivable by
the Borrower to the Agent (for the benefit of the Lender), there shall
exist in favor of the Agent (for the benefit of the Lender) as secured
party, a
24
valid, subsisting and enforceable first priority perfected security
interest in such Pledged Developer Note Receivable and the Borrower's
first priority (subject to the proviso contained in subparagraph (x)
above) perfected security interest in the Applicable Underlying Loan
Collateral and all other Collateral related to such Pledged Developer Note
Receivable (and the proceeds thereof) being Pledged hereunder on such
Borrowing Date and such security interest is and shall be prior to all
other liens upon and security interests therein that now exist or may
hereafter arise or be created.
(z) Subject to the following sentence, if such Pledged Developer
Note Receivable is secured by Pledged Consumer Note Receivables which are
in turn secured by liens on Fee Simple Intervals, Interval Mortgages
covering all such Fee Simple Intervals are in full force and effect and
such Interval Mortgages and collateral assignments thereof from the
Applicable Underlying Borrower to RFI, from RFI to the Borrower, and from
the Borrower to the Agent, for the benefit of the Lender shall each have
been duly recorded or registered in the Applicable Jurisdiction in
accordance with all Applicable Laws (and such Interval Mortgage has
evidence thereon of payment of all required documentary stamps and
intangible taxes, if any are required). If such Pledged Developer Note
Receivable is secured by Pledged Consumer Note Receivables which are in
turn secured by liens on Club Membership Fee Simple Intervals, Interval
Mortgages covering all such Club Membership Fee Simple Intervals at the
respective applicable Home Resorts are in full force and effect and such
Interval Mortgages and collateral assignments thereof from the Applicable
Underlying Borrower to RFI, from RFI to the Borrower, and from the
Borrower to the Agent, for the benefit of the Lender shall each have been
duly recorded or registered in the Applicable Jurisdiction in accordance
with all Applicable Laws (and such Interval Mortgage has evidence thereon
of payment of all required documentary stamps and intangible taxes, if any
are required).
(aa) (X) If such Pledged Developer Note Receivable is secured by
Pledged Consumer Note Receivables which are in turn secured by liens on
Right to Use Intervals other than Club Membership Right to Use Intervals
(except in the case of Existing Developer Note Receivables), (i) a
Developer Mortgage exists which covers the Applicable Development related
to such Pledged Developer Note Receivable and such Developer Mortgage and
assignments thereof from RFI to the Borrower, and from the Borrower to the
Agent, for the benefit of the Lender shall each have been duly recorded or
registered in the Applicable Jurisdiction in accordance with all
Applicable Laws (and such Developer Mortgage has evidence thereon of
payment of all required documentary stamps and intangible taxes, if any
are required), (ii) Non-Disturbance Arrangements are in effect with
respect to such Right to Use Intervals and an Opinion of Counsel has been
delivered to the Borrower and the Agent which shall contain an opinion
that such Non- Disturbance Arrangements shall remain in full force and
effect notwithstanding the occurrence of a Bankruptcy Event with respect
to the related Applicable Underlying Borrower or (iii) the related
Applicable Underlying Borrower has transferred all of its Developer's
Interests to a bankruptcy remote special purpose entity (any such entity,
an "SPE") under terms and conditions satisfactory to the Agent and an
Opinion of Counsel
25
has been delivered to the Borrower and the Agent which shall contain an
opinion that such transfer constitutes a true sale or absolute transfer of
such Developer's Interests from such Applicable Underlying Borrower to
such SPE rather than a loan secured by such interest such that (A) such
Developer's Interests would not constitute property of the estate of such
Applicable Underlying Borrower under Section 541(a)(1) of the Bankruptcy
Code and (B) Section 362(a) of the Bankruptcy Code would not apply to stay
payments of amounts collected with respect to such Developer's Interests.
(Y) If such Pledged Developer Note Receivable is secured by
Pledged Consumer Note Receivables which are in turn secured by liens on
Specific Club Membership Right to Use Intervals (except in the case of
Existing Developer Note Receivables), a Developer Mortgage exists which
covers the Home Resort related to such Pledged Developer Note Receivable
and such Developer Mortgage and assignments thereof from RFI to the
Borrower, and from the Borrower to the Agent, for the benefit of the
Lender shall each have been duly recorded or registered in the Applicable
Jurisdiction in accordance with all Applicable Laws (and such Developer
Mortgage has evidence thereon of payment of all required documentary
stamps and intangible taxes, if any are required).
(Z) If such Pledged Developer Note Receivable is secured by
Pledged Consumer Note Receivables which are in turn secured by liens on
Non-Specific Club Membership Right to Use Intervals, security interest
arrangements satisfactory to the Agent in its reasonable discretion, are
in full force and effect with respect to such Pledged Developer Note
Receivable, Pledged Consumer Note Receivables and Non-Specific Club
Membership Right to Use Intervals.
(bb) All filings (including, without limitation, UCC and real
property filings) required to be made by any Person and all other actions
required to be taken or performed by any Person in any jurisdiction to
give the Agent, for the benefit of the Lender, a first priority perfected
lien on such Pledged Developer Note Receivables and a first priority
perfected lien on all of the Borrower's rights, title and interest in all
Applicable Underlying Loan Collateral related thereto and the proceeds
thereof have been made, taken or performed.
(cc) With respect to each such Pledged Developer Note Receivable,
there exists a Pledged Developer Note Receivable File and a copy of such
Pledged Developer Note Receivable File is in the possession of the
Custodian.
(dd) No such Pledged Developer Note Receivable has been satisfied,
subordinated or rescinded, and the Applicable Underlying Loan Collateral
securing such Pledged Developer Note Receivable has not been released from
the lien of the Agent, for the benefit of the Lender, in whole or in part.
26
(ee) No such Pledged Developer Note Receivable was originated in, or
is subject to the laws of, any jurisdiction the laws of which would make
unlawful, void or voidable the sale, transfer and assignment of such
Pledged Developer Note Receivable under this Agreement and neither the
Applicable Underlying Borrower nor RFI has entered into any agreement with
any Person that prohibits, restricts or conditions the assignment of such
Pledged Developer Note Receivable.
(ff) RFI has not taken any action to convey any right to any Person
that would result in such Person having a right to payments due under such
Pledged Developer Note Receivable or payments received under the related
Title Policy, if any, or otherwise to impair the rights of the Borrower,
the Agent or the Lender in such Pledged Developer Note Receivable, the
Applicable Underlying Loan Collateral securing such Pledged Developer Note
Receivable or the proceeds thereof.
(gg) No such Pledged Developer Note Receivable is assumable by
another Person in a manner which would release the related Applicable
Underlying Borrower thereof from such Applicable Underlying Borrower's
obligations to RFI or the Borrower.
(hh) Each such Pledged Developer Note Receivable is in full force
and effect and constitutes the legal, valid and binding obligation of the
Applicable Underlying Borrower thereunder and is not subject to any right
of rescission, setoff, counterclaim or defense (except the potential
discharge in bankruptcy of such Applicable Underlying Borrower).
(ii) There has been no default, breach, violation or event
permitting acceleration under the terms of such Pledged Developer Note
Receivable, and no condition exists or event has occurred and is
continuing that with notice, the lapse of time or both would constitute a
default, breach, violation or event permitting acceleration under the
terms of such Pledged Developer Note Receivable, and there has been no
waiver of any of the foregoing.
(jj) If such Pledged Developer Note Receivable is secured in whole
or in part by Pledged Consumer Note Receivables which are in turn secured
by liens on Right to Use Intervals, either (i) a Developer Title Policy is
in effect which (a) covers the related Applicable Development and all
necessary steps have been taken in order to assign RFI's rights as the
insured under the aforementioned Developer Title Policy to the Borrower
(or to have an endorsement issued granting to the Borrower the rights of
an insured under such policy) and to collaterally assign such rights from
the Borrower to the Agent, for the benefit of the Lender, (b) is at all
times in an amount not less than the acquisition and construction costs
incurred by the Developer with respect to the related Applicable
Development and (c) was issued by a Title Insurance Company, or (ii) the
Borrower shall have been deemed to have made a representation and warranty
(the sole remedies for the breach of which shall be that such Pledged
Consumer Note Receivables shall no longer be deemed to be Eligible
Receivables and shall be excluded from the Net Eligible
27
Receivables Balance as of the date such breach becomes known by or should
have become known by the Borrower or the Servicer) that as of the date
such Pledged Developer Note Receivable is first Pledged hereunder, good
and marketable title to the related Applicable Development (except with
respect to Fee Simple Intervals previously sold to Consumers) was vested
in the related Developer and such Applicable Development is not subject to
any monetary liens (except in favor of the Agent, for the benefit of the
Lender, with respect to taxes and assessments which are not delinquent or,
if applicable, with respect to an AD&C Mortgage) or other encumbrances
which would interfere with the development or the intended use of such
Applicable Development.
(kk) If such Pledged Developer Note Receivable is secured in whole
or in part by Pledged Consumer Note Receivables which are in turn secured
by liens on Fee Simple Intervals, either (i) one or more Interval Title
Policies are in effect which (a) cover each such Fee Simple Interval with
respect to the related Applicable Development and all necessary steps have
been taken in order to assign RFI's rights as the insured party under the
aforementioned Interval Title Policies to the Borrower (or to have an
endorsement issued granting to the Borrower the rights of an insured under
such policies) and to collaterally assign such rights from the Borrower to
the Agent, for the benefit of the Lender, (b) are at all times in an
aggregate amount of not less than the outstanding principal amount of all
such Pledged Consumer Note Receivables and (c) were issued by a Title
Insurance Company or (ii) as of the date such Pledged Developer Note
Receivable is first Pledged hereunder, good and marketable title to such
Applicable Development (except with respect to Fee Simple Intervals
previously sold to Consumers) was vested in the applicable Developer
immediately prior to the sale of each related Fee Simple Interval to the
related Consumer and that, upon the consummation of such sale, good and
marketable title to such Fee Simple Interval is vested in such Consumer,
and such Development is not subject to any monetary liens (except in favor
of the Agent, for the benefit of the Lender, with respect to taxes and
assessments which are not delinquent or, if applicable, with respect to an
AD&C Mortgage) or other encumbrances which would interfere with the
development or the intended use of such Development.
(ll) No selection procedures adverse to the Borrower, the Agent or
the Lender have been utilized in selecting any such Pledged Developer Note
Receivable from all other similar receivables acquired by RFI.
(mm) An enforceable Developer Repurchase Obligation is in full force
and effect with respect to each Pledged Consumer Note Receivable securing
such Pledged Developer Note Receivable.
(nn) Such Pledged Developer Note Receivable shall not relate to an
Eligible Developer which is an Affiliate of Equivest.
28
(oo) Upon the Pledge of such Pledged Developer Note Receivable
hereunder, the Weighted Average APR of all Primary Level Eligible
Receivables shall be at least 12%.
Any of the foregoing eligibility criteria may be waived by the Agent and the
Lender in accordance with Section 9.01 of this Agreement.
"Eligible Developer Sale Agreement" means an agreement between RFI
or EFI and an Eligible Developer pursuant to which RFI or EFI, as the case may
be, purchases from such Developer one or more Consumer Note Receivables, (i) in
substantially the form of any agreement attached hereto as Exhibit H-1 with
respect to such agreements entered into prior to the date hereof, (ii) in
substantially the form of the agreement attached hereto as Exhibit H-2 or
Exhibit H-3 with respect to any such agreement entered into on or after the date
hereof or (iii) in substantially any other form approved in writing by the Agent
which such approval shall not be unreasonably withheld:
(i) entered into with an Eligible Developer which is not a
government or a governmental subdivision or agency;
(ii) payment obligations under which are denominated and payable
only in United States dollars in the United States;
(iii) the assignment of which (including, without limitation, the
sale of an undivided percentage interest therein and the assignment of any
related security thereunder) does not contravene or conflict with any
applicable laws, rules or regulations or any contractual or other
restriction, limitation or encumbrance;
(iv) which does not contravene in any material respect any laws,
rules or regulations applicable thereto and with respect to which no party
thereto is in violation of any such law, rule or regulation in any
material respect;
(v) with respect to which there has been no occurrence of any
default (other than an inconsequential default) under any of the terms
thereof;
(vi) which satisfies all applicable requirements of the Credit and
Collection Policy; and
(vii) with respect to which there exists an Eligible Developer Sale
Agreement File.
"Eligible Developer Sale Agreement File" means a file containing
each of the following items with respect to each Eligible Developer Sale
Agreement:
(a) the related original, fully executed Eligible Developer Sale
Agreement;
29
(b) if Pledged Purchased Consumer Note Receivables related to Right
to Use Intervals were sold thereunder, (i) within ninety (90) days of any
Pledged Purchased Consumer Note Receivable related thereto having been
Pledged hereunder, the related original, fully executed Developer
Mortgage, if applicable, and assignments thereof from RFI to the Borrower
and from the Borrower to the Agent or (ii) an original or a true and
complete photocopy of one of the Opinions of Counsel referred to in
subparagraph (n) of the definition of Eligible Purchased Consumer Note
Receivable (but only, in the case of an Existing Pledged Purchased
Consumer Note Receivable, if such Developer Mortgage or Opinions of
Counsel exists);
(c) if Pledged Purchased Consumer Notes related to Fee Simple
Intervals were sold thereunder, the related original, fully executed
Interval Mortgage or Interval Mortgages, if applicable, and assignments
thereof from RFI or EFI to the Borrower and from the Borrower to the Agent
(but only to the extent such items are not contained in the related
Pledged Consumer Note Receivable Files);
(d) if not contained in the related Pledged Purchased Consumer Note
Receivable Files; (i) within thirty (30) days of the receipt by the
Servicer of the Developer Mortgage referred to in paragraph (d) above or
the Interval Mortgages referred to in paragraph (e) above, an original or
a true and complete photocopy of the related, fully executed Title Policy
or Title Policies, if any, and (ii) at all times prior to the related,
fully executed Title Policy or Title Policies, if any, being included in
the Eligible Developer Sale Agreement File, a marked up title commitment,
a pro forma title policy or an endorsement of a title insurance commitment
deleting standard exceptions which, in each case, provides the same
coverage as shall be provided by such related, fully executed Title
Policy, if any and
(e) the related original Underlying Guaranty, if any.
"Eligible Development" means a Development which:
(i) is a property developed by an Eligible Developer and managed by
such Eligible Developer or managed by a manager approved by RFI or EFI;
(ii) is a Development which satisfies the Credit and Collection
Policy;
(iii) when added to all other Developments with respect to which
Pledged Receivables arose, does not cause the aggregate amount of such
Developments to have more than 15% of their Units located outside of the
United States;
(iv) is located in the United States or a recognized resort location
outside of the United States which has been approved in writing by the
Agent which such approval shall not be unreasonably withheld;
30
(v) is affiliated with Resort Condominiums International, Interval
International or another comparable timeshare exchange company approved by
the Agent;
(vi) is not bankrupt or insolvent;
(vii) has not been suspended by Resort Condominiums International,
Interval International or any other timeshare exchange company for more
than 60 days or, if so suspended by any such entity, such suspension has
been revoked and such Development is presently in good standing with such
entity;
(viii) is not currently uninhabitable due to fire, natural disaster
or other causes without other satisfactory accommodations having been put
into place; and
(ix) maintains hazard insurance that covers not less than the
replacement cost value of the buildings and related common areas and
amenities to the extent that such insurance is available under Applicable
Law;
it being understood by the parties hereto that, subject to their continued
compliance with each of the criteria listed above, each of the Developments
listed on Exhibit R hereto shall be Eligible Developments hereunder.
"Eligible Pledged Consumer Note Receivable" means a Pledged Consumer
Note Receivable that satisfies each of the following criteria:
(a) The related Applicable Underlying Borrower is the sole payee
thereof.
(b) Such Pledged Consumer Note Receivable arises from a bona fide
sale by an Applicable Underlying Borrower of one or more Intervals to a
Consumer.
(c) The Interval sale from which it arises has not been canceled by
the related Consumer, any statutory or other applicable cancellation or
rescission period has expired (or in the case of Interval sales with
respect to Presale Consumer Note Receivables and Developments located in
Florida or any other jurisdiction which by law entitles a Consumer to an
ongoing cancellation or rescission period, no such cancellation or
rescission has occurred), and the Interval sale otherwise complies fully
with the terms, provisions, and conditions of this Agreement, the other
Transaction Documents, the Applicable Underlying Loan Documents, and all
Applicable Laws.
(d) [Intentionally omitted.]
(e) A down payment and/or other payments have been received by the
related Applicable Underlying Borrower from the Consumer who is the maker
of the Pledged
31
Consumer Note Receivable in an amount equal to at least ten percent (10%)
of the original purchase price of the relevant Interval and such Consumer
has received no cash or other rebates of any kind with respect to the
purchase price of such Interval.
(f) No monthly installment or any other payment due with respect to
such Pledged Consumer Note Receivable is more than thirty (30) days
contractually past due at the time of an advance of a Loan hereunder in
respect of such Pledged Consumer Note Receivable (except as permitted
under subclause (ii) of paragraph (t) below) or more than ninety (90) days
contractually past due thereafter.
(g) If a monthly installment or any other payment due with respect
to such Pledged Consumer Note Receivable becomes more than ninety (90)
days contractually past due at any time after the date such Pledged
Consumer Note is initially Pledged hereunder, then no monthly installment
or any other payment due with respect to such Pledged Consumer Note
Receivable has been more than sixty (60) days contractually past due
during the six months immediately preceding the date such Pledged Consumer
Note is again Pledged hereunder.
(h) The interest rate on such Pledged Consumer Note Receivable at
the time it is Pledged hereunder is not less than the Facility Funding
Rate as of end of most recently ended Remittance Period plus 3%.
(i) The Consumer who owns the relevant Interval (or has obtained
similar rights with respect to the relevant Interval by means of a
contract for deed, installment sale contract or other arrangement) has
access to a Unit within the related Applicable Development during any use
period reserved by or assigned to such Consumer, all in accordance with
the Applicable Timeshare Documents.
(j) The Consumer who owns the relevant Interval (or has obtained
similar rights with respect to the relevant Interval by means of a
contract for deed, installment sale contract or other arrangement) (i) is
the maker of the related Pledged Consumer Note Receivable and (ii) is not
an Affiliate of, or related to, or employed by the Applicable Underlying
Borrower, RFI, Equivest, or the Borrower.
(k) The Consumer has no claim against the Applicable Underlying
Borrower, RFI, the Borrower, or any Affiliate thereof, or any defense,
set-off, or counterclaim with respect to the Pledged Consumer Note
Receivable.
(l) The maximum Outstanding Principal Balance of such Pledged
Consumer Note Receivable does not exceed $25,000 per one week/year
Interval (except that if such Pledged Consumer Note Receivable relates to
a Fractional Interval, the maximum Outstanding Principal Balance shall not
exceed $50,000) (or such greater amount as may be approved in writing in
advance by Lender).
32
(m) [Intentionally omitted.]
(n) The original of the Pledged Consumer Note Receivable and all
related documents have been endorsed by the Applicable Underlying Borrower
to RFI, endorsed by RFI to the Borrower and then endorsed by the Borrower
to Agent, for the benefit of the Lender, in the manner prescribed by the
Lender and delivered to the Custodian as provided in this Agreement
(provided that with respect to Pledged Consumer Note Receivables which are
Pledged on the date of the initial Borrowing, such endorsements shall be
completed within 30 days of the date of this Agreement, it being agreed by
the parties hereto that any failure to do so within such time period shall
constitute an Early Amortization Event hereunder), and the terms thereof
and all instruments related thereto shall comply in all respects with all
Applicable Laws.
(o) (i) Each Unit in the Applicable Development, which the relevant
Consumer has the right to occupy, pursuant to the Applicable Timeshare
Documents, has been completed and furnished in accordance with the terms
and provisions of such Consumer's purchase contract, the Applicable
Development's public offering statement, and the other Applicable
Timeshare Documents, (ii) a certificate of occupancy for each such Unit
(or the building in which the Unit is located) has been issued, and (iii)
such Unit is not subject to any Lien (other than the lien created by such
Interval Mortgage and the Permitted Liens and Encumbrances) that has not
previously been consented to in writing by the Lender.
(p) The forms of promissory note, mortgage, federal truth-in-lending
disclosure statement, purchase contract, and other documents and
instruments, in each case, if applicable, relating to the Interval
purchase transaction giving rise to such Pledged Consumer Note Receivable
have been approved in advance by Lender in writing, which such approval
shall not be unreasonably withheld.
(q) Each such Pledged Consumer Note Receivable was denominated in
United States Dollars and, at the time of origination and at all times
thereafter, materially conformed to all requirements of the Credit and
Collection Policy applicable thereto.
(r) All requirements of applicable federal, state and local laws,
and regulations thereunder (including, without limitation but only if and
to the extent applicable, usury laws, the Federal Truth-in-Lending Act,
the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair
Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal
Trade Commission Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal Reserve
Board's Regulations "B" and "Z", the Soldiers' and Sailors' Civil Relief
Act of 1940 and state adaptations of the National Consumer Act and of the
Uniform Consumer Credit Code, the Interstate Land Sales Full Disclosure
Act, the Real Estate Settlement Procedures Act and all other consumer
credit laws and equal credit opportunity and disclosure laws and any
regulations promulgated thereunder) in respect of each such Pledged
Consumer Note Receivable, the sale of the Intervals related thereto
33
and the sale of credit life and credit accident and health insurance and
any extended service contracts in connection with the sale of such
Intervals, have been complied with in all material respects.
(s) Such Pledged Consumer Note Receivable has an original term of
not more than 120 months.
(t) Each such Pledged Consumer Note Receivable, as of the Borrowing
Date on which it was Pledged hereunder, (i) had a remaining term of not
more than 120 months, (ii) was not at the time of its Pledge hereunder,
more than 30 days past due (or 90 days past due with respect to a Pledged
Consumer Note Receivable (x) the interest of the Borrower in which was
Pledged on the initial Borrowing Date hereunder and (y) that was being
lent against under the Prior Loan Facility immediately prior to the
initial Borrowing hereunder) and (iii) had no material provision thereof
waived, amended, altered or modified in any respect (including, without
limitation, as a result of the application of the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended) since its origination.
(u) Each such Pledged Consumer Note Receivable (i) was originated by
the Applicable Underlying Borrower in its ordinary course of business and
in accordance with its underwriting guidelines and such Applicable
Underlying Borrower had all necessary licenses and permits to originate
Pledged Consumer Note Receivables in the jurisdiction where the related
Eligible Development was located, (ii) was pledged to RFI by the
Applicable Underlying Borrower under the related Hypothecation Loan
Agreement and the Applicable Underlying Loan Documents and RFI has all
necessary licenses and permits to own Pledged Consumer Note Receivables
under all applicable law, (iii) was sold by RFI to the Borrower under the
RFI/Borrower Receivables Purchase Agreement and the Borrower has all
necessary licenses and permits to own Pledged Consumer Note Receivables
under all applicable law, (iv) contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for realization against the collateral security related thereto,
and (v) which provides for level monthly payments (provided, that the
payment in the first month and the final month of the life of the Pledged
Consumer Note Receivable may be different from the level payment) which,
if made when due, shall fully amortize the debt evidenced by such Pledged
Consumer Note Receivable over the original term of such Pledged Consumer
Note Receivable.
(v) Each such Pledged Consumer Note Receivable was originated by the
Applicable Underlying Borrower without any fraud or material
misrepresentation on the part of the related Applicable Underlying
Borrower or the related Consumer. Each such Pledged Consumer Note
Receivable was pledged to RFI by the Applicable Underlying Borrower under
the related Hypothecation Loan Agreement and the Applicable Underlying
Loan Documents without any fraud or material misrepresentation on the part
of Applicable Underlying Borrower.
34
(w) Each such Pledged Consumer Note Receivable is payable by one or
two Consumers, at least one of whom is a natural (and not a corporate)
Person, and if a Pledged Consumer Note Receivable is payable by more than
one Consumer, each such Consumer is jointly and severally obligated to pay
the full amount payable under such Pledged Consumer Note Receivable.
(x) Each such Pledged Consumer Note Receivable is payable by a
Consumer which (i) is not, nor was at any time during the three (3) year
period immediately preceding the applicable Purchase Date, subject to any
bankruptcy, insolvency, reorganization or similar proceeding (or if such
Consumer was at any time during the three (3) year period immediately
preceding the applicable Purchase Date, subject to any bankruptcy,
insolvency, reorganization or similar proceeding, such Consumer has made
at least the immediately preceding twelve monthly payments under such
Pledged Consumer Note Receivable without delinquency) and (ii) has not had
any real property owned by such Consumer foreclosed or subject to
foreclosure.
(y) No such Pledged Consumer Note Receivable is due from the United
States or any State or from any agency, department, subdivision or
instrumentality thereof.
(z) The information pertaining to each such Pledged Consumer Note
Receivable set forth in the Schedule of Receivables (as defined in the
RFI/Borrower Receivables Purchase Agreement), the related Assignment and
each Borrowing Base Certificate, Commercial Paper Remittance Report and
Monthly Remittance Report is true and correct.
(aa) [Intentionally omitted.]
(bb) Subject to the following sentence, if such Pledged Consumer
Note Receivable is secured by a lien on a Fee Simple Interval, an Interval
Mortgage related to such Fee Simple Interval is in full force and effect
and such Interval Mortgage and assignments thereof from the Applicable
Underlying Borrower to RFI, from RFI to the Borrower, and from the
Borrower to the Agent, for the benefit of the Lender shall each have been
duly recorded or registered in the Applicable Jurisdiction in accordance
with all Applicable Laws (and such Interval Mortgage has evidence thereon
of payment of all required documentary stamps and intangible taxes, if any
are required). If such Pledged Consumer Note Receivable is secured by a
lien on a Club Membership Fee Simple Interval, an Interval Mortgage
covering such Club Membership Fee Simple Interval at the respective
applicable Home Resort is in full force and effect and such Interval
Mortgage and assignments thereof from the Applicable Underlying Borrower
to RFI, from RFI to the Borrower, and from the Borrower to the Agent, for
the benefit of the Lender shall each have been duly recorded or registered
in the Applicable Jurisdiction in accordance with all Applicable Laws (and
such Interval Mortgage has evidence thereon of payment of all required
documentary stamps and intangible taxes, if any are required).
35
(cc) (X) If such Pledged Consumer Note Receivable was executed in
connection with the related Consumer's purchase of a Right to Use Interval
other than a Club Membership Right to Use Interval (except in the case of
an Existing Pledged Consumer Note Receivable), (i) a Developer Mortgage
exists which covers the Applicable Development related to such Pledged
Consumer Note Receivable and such Developer Mortgage and assignments
thereof from RFI to the Borrower, and from the Borrower to the Agent, for
the benefit of the Lender shall each have been duly recorded or registered
in the Applicable Jurisdiction in accordance with all Applicable Laws (and
such Developer Mortgage has evidence thereon of payment of all required
documentary stamps and intangible taxes, if any are required), (ii)
Non-Disturbance Arrangements are in effect with respect to such Right to
Use Interval and an Opinion of Counsel has been delivered to the Borrower
and the Agent which shall contain an opinion that such Non- Disturbance
Arrangements shall remain in full force and effect notwithstanding the
occurrence of a Bankruptcy Event with respect to the related Applicable
Underlying Borrower or (iii) the related Applicable Underlying Borrower
has transferred all of its Developer's Interests to an SPE under terms and
conditions satisfactory to the Agent and an Opinion of Counsel has been
delivered to the Borrower and the Agent which shall contain an opinion
that such transfer constitutes a true sale or absolute transfer of such
Developer's Interests from such Applicable Underlying Borrower to such SPE
rather than a loan secured by such interest such that (A) such Developer's
Interests would not consti tute property of the estate of such Applicable
Underlying Borrower under Sec tion 541(a)(1) of the Bankruptcy Code and
(B) Section 362(a) of the Bankruptcy Code would not apply to stay payments
of amounts collected with respect to such Developer's Interests.
(Y) If such Pledged Consumer Note Receivable is secured by a
lien on a Specific Club Membership Right to Use Interval (except in the
case of an Existing Pledged Consumer Note Receivable), (i) a Developer
Mortgage exists which covers the Home Resort related to such Pledged
Consumer Note Receivable and such Developer Mortgage and assignments
thereof from RFI to the Borrower, and from the Borrower to the Agent, for
the benefit of the Lender shall each have been duly recorded or registered
in the Applicable Jurisdiction in accordance with all Applicable Laws (and
such Developer Mortgage has evidence thereon of payment of all required
documentary stamps and intangible taxes, if any are required), (ii)
Non-Disturbance Arrangements are in effect with respect to the Home Resort
related to such Specific Club Membership Right to Use Interval and an
Opinion of Counsel has been delivered to the Borrower and the Agent which
shall contain an opinion that such Non-Disturbance Arrangements shall
remain in full force and effect notwithstanding the occurrence of a
Bankruptcy Event with respect to the related Applicable Underlying
Borrower or (iii) the related Applicable Underlying Borrower has
transferred all of its Developer's Interests with respect to such Home
Resort and all other Applicable Developments in the same club to an SPE
under terms and conditions satisfactory to the Agent and an Opinion of
Counsel has been delivered to the Borrower and the Agent which shall
contain an opinion that such transfer
36
constitutes a true sale or absolute transfer of such Developer's Interests
from such Applicable Underlying Borrower to such SPE rather than a loan
secured by such interest such that (A) such Developer's Interests would
not constitute property of the estate of such Applicable Underlying
Borrower under Section 541(a)(1) of the Bankruptcy Code and (B) Section
362(a) of the Bankruptcy Code would not apply to stay payments of amounts
collected with respect to such Developer's Interests.
(Z) If such Pledged Consumer Note Receivable is secured by a
lien on a Non-Specific Club Membership Right to Use Interval, security
interest arrangements satisfactory to the Agent in its reasonable
discretion, are in full force and effect with respect to such Pledged
Consumer Note Receivables and Non-Specific Club Membership Right to Use
Interval;
provided, however, that no UCC financing statements will be required to be filed
against any individual Consumer.
(dd) The Applicable Underlying Borrower owned the Pledged Consumer
Note Receivable free and clear of any Adverse Claim immediately prior to
its pledge of such Pledged Consumer Note Receivable to RFI.
(ee) All filings (including, without limitation, UCC and real
property filings) required to be made by any Person and all other actions
required to be taken or performed by any Person in any jurisdiction to
give the Agent, for the benefit of the Lender, a first priority perfected
lien on such Pledged Consumer Note Receivables and the proceeds thereof
have been made, taken or performed.
(ff) With respect to each such Pledged Consumer Note Receivable,
there exists a Pledged Consumer Note Receivable File and a copy of such
Pledged Consumer Note Receivable File is in the possession of the
Custodian.
(gg) No such Pledged Consumer Note Receivable has been satisfied,
subordinated or rescinded, and the Applicable Underlying Loan Collateral
securing such Pledged Consumer Note Receivable has not been released from
the lien of the Agent, for the benefit of the Lender, in whole or in part.
(hh) No such Pledged Consumer Note Receivable was originated in, or
is subject to the laws of, any jurisdiction the laws of which would make
unlawful, void or voidable the sale, transfer and assignment of such
Pledged Consumer Note Receivable and none of the Applicable Underlying
Borrower, the related Consumer, RFI or the Borrower has entered into any
agreement with any Person that prohibits, restricts or conditions the
assignment of such Pledged Consumer Note Receivable.
(ii) None of the Applicable Underlying Borrower, the related
Consumer, RFI or the Borrower have taken any action to convey any right to
any Person that would result
37
in such Person having a right to payments due under such Pledged Consumer
Note Receivable or payments received under the related Title Policy, if
any, or otherwise to impair the rights of the Borrower, the Agent or the
Lender in such Pledged Consumer Note Receivable or the proceeds thereof.
(jj) No such Pledged Consumer Note Receivable is assumable by
another Person in a manner which would release the related Consumer from
such Consumer's obligations to the Applicable Underlying Borrower, RFI,
the Borrower or the Lender.
(kk) Each such Pledged Consumer Note Receivable is in full force and
effect and constitutes the legal, valid and binding obligation of the
related Consumer and is not subject to any right of rescission (or in the
case of Interval sales with respect to Presale Consumer Note Receivables
and Developments located in Florida or any other jurisdiction which by law
entitles a Consumer to an ongoing rescission period, no such rescission
has occurred), setoff, counterclaim or defense (except the potential
discharge in bankruptcy of such Consumer).
(ll) There has been no default, breach, violation or event
permitting acceleration under the terms of such Pledged Consumer Note
Receivable, and no condition exists or event has occurred and is
continuing that with notice, the lapse of time or both would constitute a
default, breach, violation or event permitting acceleration under the
terms of such Pledged Consumer Note Receivable, and there has been no
waiver of any of the foregoing.
(mm) No selection procedures adverse to RFI, the Borrower, the Agent
or the Lender have been utilized in selecting any such Pledged Consumer
Note Receivable from all other similar receivables acquired by the
Applicable Underlying Borrower.
(nn) Each such Pledged Consumer Note Receivable has in place with
respect thereto an enforceable Developer Repurchase Obligation.
(oo) No such Pledged Consumer Note Receivable is a Presale Consumer
Note Receivable.
(pp) If such Pledged Consumer Note Receivable was executed in
connection with the related Consumer's purchase of a Right to Use
Interval, either (i) a Developer Title Policy is in effect which (a)
covers the related Applicable Development and all necessary steps have
been taken in order to assign RFI's rights as the insured under the
aforementioned Developer Title Policy to the Borrower (or to have an
endorsement issued granting to the Borrower the rights of an insured under
such policy) and to collaterally assign the rights of the Borrower under
such Developer Title Policy to the Agent, for the benefit of the Lender,
(b) is at all times in an amount not less than the acquisition and
construction costs incurred by the Developer with respect to the related
Applicable Development and (c) was issued by a Title Insurance Company or
(ii) the
38
Borrower shall have been deemed to have made a representation and warranty
(the sole remedies for the breach of which shall be that such Pledged
Consumer Note Receivable shall no longer be deemed to be an Eligible
Receivable and shall be excluded from the Net Eligible Receivables Balance
as of the date such breach becomes known by or should have become known by
the Borrower or the Servicer) that as of the date such Pledged Consumer
Note Receivable is first Pledged hereunder, good and marketable title to
the related Applicable Development (except with respect to Fee Simple
Intervals previously sold to Consumers) was vested in the related
Developer and such Applicable Development is not subject to any monetary
liens (except in favor of the Agent, for the benefit of the Lender, or
with respect to taxes or assessments which are not delinquent or, if
applicable, with respect to an AD&C Mortgage) or other encumbrances which
would interfere with the development or the intended use of such
Applicable Development.
(qq) If such Pledged Consumer Note Receivable was executed in
connection with the related Consumer's purchase of a Fee Simple Interval,
either (i) an Interval Title Policy is in effect which (a) covers such Fee
Simple Interval and all necessary steps have been taken in order to assign
RFI's rights as the insured under the aforementioned Interval Title Policy
to the Borrower (or to have an endorsement issued granting to the Borrower
the rights of an insured under such policy) and to collaterally assign
such rights from the Borrower to the Agent, for the benefit of the Lender,
(b) is at all times in an aggregate amount of not less than the
outstanding principal amount of such Pledged Consumer Note Receivable and
all other Consumer Note Receivables covered by such Interval Title Policy,
if any, and (c) was issued by a Title Insurance Company or (ii) the
Borrower shall have been deemed to have made a representation and warranty
(the sole remedies for the breach of which shall be that such Pledged
Consumer Note Receivable shall no longer be deemed to be an Eligible
Receivable and shall be excluded from the Net Eligible Receivables Balance
as of the date such breach becomes known by or should have become known by
the Borrower or the Servicer) that as of the date such Pledged Developer
Note Receivable is first Pledged hereunder, good and marketable title to
the related Applicable Development (except with respect to other Fee
Simple Intervals sold to Consumers) was vested in the related Developer
immediately prior to the sale of the Fee Simple Interval related to such
Pledged Consumer Note Receivable to the related Consumer and that, upon
the consummation of such sale, good and marketable title to such Fee
Simple Interval was vested in such Consumer, and such Fee Simple Interval
is not subject to any monetary liens (except in favor of the Agent, for
the benefit of the Lender, or with respect to taxes and assessments which
are not delinquent) or other encumbrances which would interfere with the
development or the intended use of such Fee Simple Interval.
(rr) Such Pledged Consumer Note Receivable secures an Eligible
Developer Note Receivable.
(ss) If such Pledged Consumer Note Receivable was executed in
connection with the related Consumer's purchase of a Fee Simple Interval,
such Consumer was
39
delivered a deed with respect to such Fee Simple Interval and such deed
was duly recorded or registered in the Applicable Jurisdiction in
accordance with all Applicable Laws.
(tt) If such Pledged Consumer Note Receivable was an Existing
Pledged Consumer Note Receivable or a new Pledged Consumer Note Receivable
securing a new advance under an Existing Developer Note Receivable (unless
such new Pledged Consumer Note Receivable relates to a New Phase at the
Development which is the subject of such Existing Developer Note
Receivable) either:
(X) an Acceptable Environmental Report covering the Applicable
Development related to such Pledged Consumer Note Receivable has been
obtained by RFI; or
(Y) The Borrower shall have been deemed to have made a
representation and warranty (the sole remedies for the breach of which
shall be that such Pledged Consumer Note Receivable shall no longer be
deemed to be an Eligible Receivable and shall be excluded from the Net
Eligible Receivables Balance as of the date such breach becomes known by
or should have become known by the Borrower or the Servicer) that as of
the date such Pledged Consumer Note Receivable is first Pledged hereunder
(i) there are no Hazardous Materials on, under, or affecting the Land or
any other real property or personal property comprising the Applicable
Development related to such Pledged Consumer Note Receivable, except for
commercially reasonable amounts thereof commonly found at residential and
resort properties in the Applicable Jurisdiction, (ii) there are no known
or suspected Hazardous Materials located at, used or stored on, or
transported to or from such Applicable Development or in such proximity
thereto as to create a material risk of contamination of any the
Applicable Underlying Loan Collateral except for commercially reasonable
amounts thereof commonly found at residential and resort properties in the
Applicable Jurisdiction; and (iii) there is no friable asbestos within the
Units, Common Elements, if any, or elsewhere at such Applicable
Development.
(uu) If such Pledged Consumer Note Receivable is (i) not an Existing
Pledged Consumer Note Receivable and (ii) not a new Pledged Consumer Note
Receivable securing a new advance under an Existing Developer Note
Receivable (unless such new Pledged Consumer Note Receivable relates to a
New Phase at the Development which is the subject of such Existing
Developer Note Receivable), an Acceptable Environmental Report shall have
been obtained by RFI covering the Applicable Development related to such
Pledged Consumer Note Receivable (and, if such Pledged Consumer Note
Receivable relates to a Club Membership Right to Use Interval or a Club
Membership Fee Simple Interval, with respect to each other Development
with respect to which the holder of such an Interval has rights, the
Borrower shall have been deemed to have made a representation and warranty
(the sole remedies for the breach of which shall be that such Pledged
Consumer Note Receivable shall no longer be deemed to be an Eligible
40
Receivable and shall be excluded from the Net Eligible Receivables Balance
as of the date such breach becomes known by or should have become known by
the Borrower or the Servicer) that as of the date such Pledged Consumer
Note Receivable is first Pledged hereunder (i) there are no Hazardous
Materials on, under, or affecting the Land or any other real property or
personal property comprising such Development, except for commercially
reasonable amounts thereof commonly found at residential and resort
properties in the Applicable Jurisdiction, (ii) there are no known or
suspected Hazardous Materials located at, used or stored on, or
transported to or from such Development or in such proximity thereto as to
create a material risk of contamination of any the Applicable Underlying
Loan Collateral except for commercially reasonable amounts thereof
commonly found at residential and resort properties in the Applicable
Jurisdiction; and (iii) there is no friable asbestos within the Units,
Common Elements, if any, or elsewhere at such Development).
(vv) The Borrower has received certified copies of all insurance
policies and endorsements thereto or other evidence of insurance
satisfactory to Borrower and Lender, in the reasonable discretion of each,
with respect to the Applicable Development relating to such Pledged
Consumer Note Receivable and such insurance policies and endorsements
thereto shall conform in all material respects with the Credit and
Collection Policy and customary practice in the timeshare industry. In
addition, the Applicable Underlying Borrower or the Applicable Underlying
Seller has obtained and is maintaining or has caused the Applicable
Timeshare Owners' Association to obtain and maintain all policies of
insurance required by and in accordance with the terms of the Credit and
Collection Policy and which are customary in the timeshare industry in the
Applicable Jurisdiction.
(ww) Each Assignment Document exists with respect to such Pledged
Consumer Note Receivable and is duly executed and enforceable in
accordance with its terms and has been delivered to the Custodian.
(xx) [Intentionally omitted.]
(yy) [Intentionally omitted.]
(zz) [Intentionally omitted.]
(aaa) [Intentionally omitted.]
(bbb) [Intentionally omitted.]
(ccc) The Borrower shall have taken all steps necessary under all
applicable law in order to cause a valid, subsisting and enforceable first
priority security interest to exist in its favor in such Pledged Consumer
Note Receivable and all other Collateral related to such Pledged Consumer
Note Receivable (and the proceeds thereof) on or before the Borrowing Date
that such Pledged Consumer Note Receivable is Pledged hereunder and
41
immediately prior to the Pledge of such Pledged Consumer Note Receivable
by the Borrower to the Agent (for the benefit of the Lender), there shall
have existed in favor of the Borrower as secured party, a valid,
subsisting and enforceable first priority perfected security interest in
all Collateral related to such Receivable (and the proceeds thereof), and
such security interest is and shall be prior to all other liens upon and
security interests in such Collateral (and the proceeds thereof) that now
exist or may hereafter arise or be created; provided, that, any such
security interest in the Land, Units and/or Common Elements of an
Applicable Development, to the extent evidenced by a Developer Mortgage,
may be subordinate to an AD&C Mortgage.
(ddd) The Borrower shall have taken all steps necessary under all
applicable law in order to cause to exist in favor of the Agent, for the
benefit of the Lender, a valid, subsisting and enforceable first priority
perfected security interest in such Pledged Consumer Note Receivable and
all Collateral related to such Pledged Consumer Note Receivable (and the
proceeds thereof) on or before the Borrowing Date such Pledged Consumer
Note Receivable is Pledged hereunder and upon the Pledge of such
Receivable by the Borrower to the Agent (for the benefit of the Lender),
there shall exist in favor of the Agent (for the benefit of the Lender) as
secured party, a valid, subsisting and enforceable first priority
perfected security interest in the Borrower's first priority (or, to the
extent such security interest is in the Land, Units and/or Common Elements
of an Applicable Development, evidenced by a Developer Mortgage and
subordinate to an AD&C Mortgage, second priority) perfected security
interest in the Collateral related to such Pledged Consumer Note
Receivable (and the proceeds thereof) being Pledged hereunder on such
Borrowing Date and such security interest is and shall be prior to all
other liens upon and security interests therein that now exist or may
hereafter arise or be created.
(eee) Such Pledged Consumer Note Receivable is not a Defaulted
Receivable and, on the date on which such Pledged Consumer Note Receivable
was Pledged hereunder, is not a Delinquent Receivable.
Any of the foregoing eligibility criteria may be waived by the Agent and the
Lender in accordance with Section 9.01 of this Agreement.
"Eligible Pledged Presale Consumer Note Receivable" means a Pledged
Consumer Note Receivable which constitutes a Presale Consumer Note Receivable
that satisfies each of the criteria for an Eligible Pledged Consumer Note
Receivable (other than the criteria of such definition set forth in paragraph
(i), subclauses (i) and (ii) of paragraph (o), paragraph (bb), paragraph (oo),
paragraph (qq), paragraph (ss) and, solely to the extent that the requirements
thereof would require the recordation of an Interval Mortgage, paragraphs (ccc)
and (ddd) thereof) and that additionally satisfies each of the following
criteria:
(a) (i) All sales and financing documents relating to such Presale
Consumer Note Receivable have been executed and delivered to RFI, (ii)
there are no conditions or
42
requirements for the escrow of Consumer deposits or payments required
under applicable law or contract relating to the sale which is the subject
of such Presale Consumer Note Receivable and (iii) all conditions and
requirements with respect to such sale have been completed other than the
issuance of the certificate of occupancy for the building in which the
Unit related to the applicable Interval is located.
(b) Such Presale Consumer Note Receivable will meet the criteria set
forth in paragraph (i), subclauses (i) and (ii) of paragraph (o),
paragraph (bb), paragraph (oo), paragraph (qq), paragraph (ss), paragraph
(ccc) and paragraph (ddd) in the defined term Eligible Pledged Consumer
Note Receivable at the closing of the Interval to which such Presale
Consumer Note Receivable relates, which closing shall take place in
accordance with the purchase contract for that Interval, but in any event
no later than two years from the date of the purchase contract.
(c) The related Applicable Underlying Borrower shall have posted and
shall maintain completion and performance bonds in amounts satisfactory to
complete the related Development and in form and substance satisfactory to
RFI and the Agent.
(d) The documentation related to such Presale Consumer Note
Receivable shall require the Consumer to make periodic payments of
principal and interest on such Presale Consumer Note Receivable prior to
the closing of the Interval to which such Presale Consumer Note Receivable
relates.
Any of the foregoing eligibility criteria may be waived by the Agent and the
Lender in accordance with Section 9.01 of this Agreement.
"Eligible Presale Consumer Receivable" means an Eligible Pledged
Presale Consumer Note Receivable or an Eligible Purchased Presale Consumer Note
Receivable.
"Eligible Purchased Consumer Note Receivable" means a Pledged
Purchased Consumer Note Receivable that satisfies each of the following
criteria:
(a) Each Assignment Document exists with respect thereto and is duly
executed and enforceable in accordance with its terms and has been
delivered to the Custodian.
(b) The Applicable Underlying Purchase Documents related to such
Pledged Purchased Consumer Note Receivable have been approved in writing
by the Agent in its reasonable discretion.
(c) [Intentionally Omitted].
(d) To the best of RFI's or EFI's knowledge, as applicable, (i)
neither the related Applicable Underlying Seller nor the related
Applicable Underlying Guarantor, if
43
any, has any claim against RFI, EFI or the Borrower, or any Affiliate
thereof, and no defense, set-off, or counterclaim exists with respect to
the Developer Repurchase Obligation or any other terms or provisions of
the related Eligible Developer Sale Agreement and (ii) the Consumer
obligated under such Pledged Purchased Consumer Note Receivable has no
claim against the Applicable Underlying Seller, the Applicable Underlying
Guarantor, if any, RFI, EFI or the Borrower, or any Affiliate thereof, and
no defense, set-off, or counterclaim exists with respect to such Pledged
Purchased Consumer Note Receivable.
(e) The original of such Pledged Purchased Consumer Note Receivable
and all related documents and instruments, the terms of each of which
shall comply in all material respects with all Applicable Laws, have been
endorsed by the Applicable Underlying Seller to RFI or EFI (whichever one
is the party with such Applicable Underlying Seller to the relevant
Eligible Developer Sale Agreement), by RFI or EFI, as the case may be, to
the Borrower and from the Borrower to the Agent (for the benefit of the
Lender) in any commercially reasonable manner prescribed by the Lender and
have been delivered to Custodian; provided, however, that with respect to
the Purchased Consumer Note Receivables which are Pledged on the date of
the initial Borrowing, only those Pledged Purchased Consumer Note
Receivables related to the Plantation Cove Resort and Plantation Island
Resort shall be so endorsed within 30 days of the date of such Borrowing
and the failure to complete such endorsement within such time period shall
constitute an Early Amortization Event hereunder.
(f) Each such Pledged Purchased Consumer Note Receivable represents
the genuine, legal, valid and binding payment obligation of the related
Consumer, enforceable in accordance with its terms and such Consumer had
full legal capacity to execute and deliver such Pledged Purchased Consumer
Note Receivable, the related Interval Mortgage, if applicable, and any
other documents related thereto; and such Pledged Purchased Consumer Note
Receivable has not been prepaid or repaid in full.
(g) Each such Pledged Purchased Consumer Note Receivable was
denominated in United States Dollars and, at the time of origination and
at all times thereafter, materially conformed to all requirements of the
Credit and Collection Policy applicable to such Pledged Purchased Consumer
Note Receivable and, in any case, no such Pledged Purchased Consumer Note
Receivable has been reserved against or would be required to be
written-off pursuant to the Credit and Collection Policy.
(h) All requirements of applicable federal, state and local laws,
and regulations thereunder (including, without limitation but only if and
to the extent applicable, usury laws, the Federal Truth-in-Lending Act,
the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair
Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal
Trade Commission Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal Reserve
Board's Regulations "B" and "Z", the Soldiers' and Sailors' Civil Relief
Act of 1940 and state adaptations of the National Consumer Act and of the
Uniform
44
Consumer Credit Code, the Interstate Land Sales Full Disclosure Act, the
Real Estate Settlement Procedures Act and all other consumer credit laws
and equal credit opportunity and disclosure laws and any regulations
promulgated thereunder) in respect of such Pledged Purchased Consumer Note
Receivable, the sale of the Intervals related to such Pledged Purchased
Consumer Note Receivable and the sale of credit life and credit accident
and health insurance and any extended service contracts in connection with
the sale of the Intervals related to such Pledged Purchased Consumer Note
Receivable, have been complied with in all material respects.
(i) Such Pledged Purchased Consumer Note Receivable is not a
Defaulted Receivable and, on the date on which such Pledged Purchased
Consumer Note Receivable was Pledged hereunder, is not a Delinquent
Receivable.
(j) The Coupon Rate set forth in such Pledged Purchased Consumer
Note Receivable shall be not less than the Minimum APR with respect to
such Pledged Purchased Consumer Note Receivable on the date on which it
was Pledged hereunder.
(k) Such Pledged Purchased Consumer Note Receivable arises from a
bona fide sale by an Applicable Underlying Seller of one or more Intervals
to a Consumer.
(l) The Interval sale from which it arises has not been canceled by
the related Consumer, any statutory or other applicable cancellation or
rescission period has expired (or in the case of Interval sales with
respect to Presale Consumer Note Receivables and Developments located in
Florida or any other jurisdiction which by law entitles a Consumer to an
ongoing cancellation or rescission period, no such cancellation or
rescission has occurred), and the Interval sale otherwise complies fully
with the terms, provisions, and conditions of this Agreement, the other
Transaction Documents, the Applicable Underlying Purchase Documents, and
all Applicable Laws.
(m) Subject to the following sentence, if such Pledged Purchased
Consumer Note Receivable is secured by a lien on a Fee Simple Interval, an
Interval Mortgage covering such Fee Simple Interval is in full force and
effect and such Interval Mortgage and assignments thereof from the
Applicable Underlying Seller to RFI, from RFI to the Borrower, and from
the Borrower to the Agent, for the benefit of the Lender shall each have
been duly recorded or registered in the Applicable Jurisdiction in
accordance with all Applicable Laws (and such Interval Mortgage has
evidence thereon of payment of all required documentary stamps and
intangible taxes, if any are required). If such Pledged Purchased Consumer
Note Receivable is secured by a lien on a Club Membership Fee Simple
Interval, an Interval Mortgage covering such Club Membership Fee Simple
Interval at the respective applicable Home Resort is in full force and
effect and such Interval Mortgage and assignments thereof from the
Applicable Underlying Borrower to RFI, from RFI to the Borrower, and from
the Borrower to the Agent, for the benefit of the Lender shall each have
been duly recorded or registered in the Applicable Jurisdiction in
45
accordance with all Applicable Laws (and such Interval Mortgage has
evidence thereon of payment of all required documentary stamps and
intangible taxes, if any are required).
(n) (X) If such Pledged Purchased Consumer Note Receivable was
executed in connection with the related Consumer's purchase of a Right to
Use Interval other than a Club Membership Right to Use Interval (except in
the case of an Existing Purchased Consumer Note Receivable), (i) a
Developer Mortgage exists which covers the Applicable Development related
to such Pledged Purchased Consumer Note Receivable and such Developer
Mortgage and assignments thereof from RFI to the Borrower, and from the
Borrower to the Agent, for the benefit of the Lender shall each have been
duly recorded or registered in the Applicable Jurisdiction in accordance
with all Applicable Laws (and such Developer Mortgage has evidence thereon
of payment of all required documentary stamps and intangible taxes, if any
are required), (ii) Non-Disturbance Arrangements are in effect with
respect to such Right to Use Interval and an Opinion of Counsel has been
delivered to the Borrower and the Agent which shall contain an opinion
that such Non-Disturbance Arrangements shall remain in full force and
effect notwithstanding the occurrence of a Bankruptcy Event with respect
to the related Applicable Underlying Seller or (iii) the related
Applicable Underlying Seller has transferred all of its Developer's
Interests to an SPE under terms and conditions satisfactory to the Agent
and an Opinion of Counsel has been delivered to the Borrower and the Agent
which shall contain an opinion that such transfer constitutes a true sale
or absolute transfer of such Developer's Interests from such Applicable
Underlying Seller to such SPE rather than a loan secured by such interest
such that (A) such Developer's Interests would not constitute property of
the estate of such Applicable Underlying Seller under Section 541(a)(1) of
the Bankruptcy Code and (B) Section 362(a) of the Bankruptcy Code would
not apply to stay payments of amounts collected with respect to such
Developer's Interests.
(Y) If such Pledged Purchased Consumer Note Receivable was
executed in connection with the related Consumer's purchase of a Specific
Club Membership Right to Use Interval (except in the case of an Existing
Purchased Consumer Note Receivable), (i) a Developer Mortgage exists which
covers the Home Resort related to such Pledged Purchased Consumer Note
Receivable and such Developer Mortgage and assignments thereof from RFI to
the Borrower, and from the Borrower to the Agent, for the benefit of the
Lender shall each have been duly recorded or registered in the Applicable
Jurisdiction in accordance with all Applicable Laws (and such Developer
Mortgage has evidence thereon of payment of all required documentary
stamps and intangible taxes, if any are required), (ii) Non-Disturbance
Arrangements are in effect with respect to the Home Resort related to such
Specific Club Membership Right to Use Interval and an Opinion of Counsel
has been delivered to the Seller and the Agent which shall contain an
opinion that such Non-Disturbance Arrangements shall remain in full force
and effect notwithstanding the occurrence of a Bankruptcy Event with
respect to the related Applicable Underlying Seller or (iii) the related
Applicable Underlying Seller has transferred all of its Developer's
Interests with respect to such Home Resort and all other
46
Applicable Developments in the same club to an SPE under terms and
conditions satisfactory to the Agent and an Opinion of Counsel has been
delivered to the Seller and the Agent which shall contain an opinion that
such transfer constitutes a true sale or absolute transfer of such
Developer's Interests from such Applicable Underlying Seller to such SPE
rather than a loan secured by such interest such that (A) such Developer's
Interests would not constitute property of the estate of such Applicable
Underlying Seller under Section 541(a)(1) of the Bankruptcy Code and (B)
Section 362(a) of the Bankruptcy Code would not apply to stay payments of
amounts collected with respect to such Developer's Interests.
(Z) If such Pledged Purchased Consumer Note Receivable was
executed in connection with the related Consumer's purchase of a
Non-Specific Club Membership Right to Use Interval, security interest
arrangements satisfactory to the Agent in its reasonable discretion, are
in full force and effect with respect to such Pledged Purchased Consumer
Note Receivable and Non-Specific Club Membership Right to Use Interval;
provided, however, that no UCC financing statements will be required to be
filed against any individual Consumer.
(o) A down payment and/or other payments have been received by the
related Applicable Underlying Seller from the Consumer who is the maker of
the Pledged Purchased Consumer Note Receivable in an amount equal to at
least ten percent (10%) of the original purchase price of the relevant
Interval and such Consumer has received no cash or other rebates of any
kind with respect to the purchase price of such Interval.
(p) No monthly installment or any other payment due with respect to
such Pledged Purchased Consumer Note Receivable is more than thirty (30)
days contractually past due at the time of an advance of a Loan hereunder
in respect of such Pledged Purchased Consumer Note Receivable (except as
permitted under subclause (ii) of para graph (cc) below) or more than
ninety (90) days contractually past due thereafter.
(q) If a monthly installment or any other payment due with respect
to such Pledged Purchased Consumer Note Receivable becomes more than
ninety (90) days contractually past due at any time after the date such
Pledged Purchased Consumer Note is initially Pledged hereunder, then no
monthly installment or any other payment due with respect to such Pledged
Purchased Consumer Note Receivable has been more than sixty (60) days
contractually past due during the six months immediately preceding the
date such Pledged Purchased Consumer Note is again Pledged hereunder.
(r) The interest rate on the Pledged Purchased Consumer Note
Receivable at the time of its Pledge hereunder is not less than the
Facility Funding Rate as of end of most recently ended Remittance Period
plus 3%.
(s) The Consumer who owns the relevant Interval (or has obtained
similar rights with respect to the relevant Interval by means of a
contract for deed, installment
47
sale contract or other arrangement) has access to a Unit within the
Applicable Development during any use period reserved by or assigned to
such Consumer, all in accordance with the Applicable Timeshare Documents.
(t) The Consumer who owns the relevant Interval (or has obtained
similar rights with respect to the relevant Interval by means of a
contract for deed, installment sale contract or other arrangement) (i) is
the maker of the related Pledged Purchased Consumer Note Receivable and
(ii) is not an Affiliate of, or related to, or employed by the Applicable
Underlying Seller, RFI, EFI, Equivest or the Borrower.
(u) The relevant Consumer has no claim against the Applicable
Underlying Seller, RFI, EFI, the Borrower, or any Affiliate thereof, or
any defense, set-off, or counterclaim with respect to the Pledged
Purchased Consumer Note Receivable.
(v) The maximum Outstanding Principal Balance of such Pledged
Purchased Consumer Note Receivable does not exceed $25,000 per one
week/year Interval (except that if such Pledged Purchased Consumer Note
Receivable relates to a Fractional Interval, the maximum Outstanding
Principal Balance shall not exceed $50,000) (or such greater amount as may
be approved in writing in advance by Lender).
(w) [Intentionally omitted.]
(x) [Intentionally Omitted.]
(y) (i) Each Unit in the Applicable Development, which the relevant
Consumer has the right to occupy, pursuant to the Applicable Timeshare
Documents, has been completed and furnished in accordance with the terms
and provisions of such Consumer's purchase contract, the Applicable
Development's public offering statement, and the other Applicable
Timeshare Documents, (ii) a certificate of occupancy for each such Unit
(or the building in which the Unit is located) has been issued, and (iii)
such Unit is not subject to any Lien (other than the lien created by such
Interval Mortgage and the Permitted Liens and Encumbrances) that has not
previously been consented to in writing by the Lender.
(z) The forms of promissory note, mortgage, if applicable, federal
truth-in-lending disclosure statement, if applicable, purchase contract,
and other documents and instruments relating to the Interval purchase
transaction giving rise to such Pledged Purchased Consumer Note Receivable
have been approved in advance by Lender in writing.
(aa) [Intentionally Omitted].
(bb) Such Pledged Purchased Consumer Note Receivable has an original
term of not more than 120 months.
48
(cc) Each such Pledged Purchased Consumer Note Receivable, as of the
Borrowing Date on which it was Pledged hereunder, (i) had a remaining term
of not more than 120 months, (ii) had not at any time during the past 90
days been more than 120 days past due and was not, at the time of its
Pledge hereunder, more than 30 days past due (or 90 days past due with
respect to a Pledged Purchased Consumer Note Receivable (x) the interest
of the Borrower in which was Pledged on the initial Borrowing Date
hereunder and (y) that was being lent against under the Prior Loan
Facility immediately prior to the initial Borrowing hereunder) and (iii)
had no material provision thereof waived, amended, altered or modified in
any respect (including, without limitation, as a result of the application
of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended) since
its origination.
(dd) Each such Pledged Purchased Consumer Note Receivable (i) was
originated by the Applicable Underlying Seller in its ordinary course of
business and in accordance with its underwriting guidelines (and such
Applicable Underlying Seller had all necessary licenses and permits to
originate Pledged Purchased Consumer Note Receivables in the jurisdiction
where the related Eligible Development was located), (ii) was sold to RFI
or EFI by the Applicable Underlying Seller under an Eligible Developer
Sale Agreement, which provides for a Developer Repurchase Obligation and
which remains in full force and effect, and the other Applicable
Underlying Purchase Documents, each of which remains in full force and
effect, (and RFI or EFI, as applicable, has all necessary licenses and
permits to own such Pledged Purchased Consumer Note Receivables under all
applicable law), (iii) was sold by RFI or EFI, as the case may be, to the
Borrower under the applicable Borrower Receivables Purchase Agreement (and
the Borrower has all necessary licenses and permits to own Pledged
Purchased Consumer Note Receivables under all applicable law), (iv)
contains customary and enforceable provisions such as to render the rights
and remedies of the holder thereof adequate for realization against the
collateral security related thereto, and (v) provides for level monthly
payments (provided, that the payment in the first month and the final
month of the life of the Pledged Purchased Consumer Note Receivable may be
different from the level payment) which, if made when due, shall fully
amortize the debt evidenced by such Pledged Purchased Consumer Note
Receivable over the original term of such Pledged Purchased Consumer Note
Receivable.
(ee) Each such Pledged Purchased Consumer Note Receivable was
originated by the Applicable Underlying Seller without any fraud or
material misrepresentation on the part of the related Applicable
Underlying Seller or the related Consumer. Each such Pledged Purchased
Consumer Note Receivable was sold to RFI or EFI, as the case may be, by
the Applicable Underlying Seller under the related Applicable Underlying
Purchase Documents without any fraud or material misrepresentation on the
part of Applicable Underlying Seller.
49
(ff) Each such Pledged Purchased Consumer Note Receivable is payable
by one or two Consumers, at least one of whom is a natural (and not a
corporate) Person, and if a Pledged Purchased Consumer Note Receivable is
payable by more than one Consumer, each such Consumer is jointly and
severally obligated to pay the full amount payable under such Pledged
Purchased Consumer Note Receivable.
(gg) Each such Pledged Purchased Consumer Note Receivable is payable
by a Consumer which is not, nor was at any time during the three (3) year
period immediately preceding the applicable Purchase Date, subject to any
bankruptcy, insolvency, reorganization or similar proceeding (or if such
Consumer was at any time during the three (3) year period immediately
preceding the applicable Purchase Date, subject to any bankruptcy,
insolvency, reorganization or similar proceeding, such Consumer has made
at least the immediately preceding twelve monthly payments under such
Pledged Purchased Consumer Note Receivable without delinquency) and (ii)
has not had any real property owned by such Consumer foreclosed or
currently subject to foreclosure.
(hh) No such Pledged Purchased Consumer Note Receivable is due from
the United States or any State or from any agency, department, subdivision
or instrumentality thereof.
(ii) The information pertaining to each such Pledged Purchased
Consumer Note Receivable set forth in the Schedule of Receivables (as
defined in the applicable Borrower Receivables Purchase Agreement), the
related Assignment and each Borrowing Base Certificate, Commercial Paper
Remittance Report and Monthly Remittance Report is true and correct.
(jj) [Intentionally Omitted.]
(kk) The Borrower shall have taken all steps necessary under all
applicable law in order to cause a valid, subsisting and enforceable first
priority ownership interest to exist in its favor in such Pledged
Purchased Consumer Note Receivable, the Applicable Underlying Purchased
Note Collateral and all other Collateral related to such Pledged Purchased
Consumer Note Receivable (and the proceeds thereof) on or before the
Borrowing Date that such Pledged Purchased Consumer Note Receivable is
Pledged hereunder and immediately prior to the Pledge of such Pledged
Purchased Consumer Note Receivable by the Borrower to the Agent (for the
benefit of the Lender), there shall have existed in favor of the Borrower
as secured party, a valid, subsisting and enforceable first priority
perfected security interest in the Applicable Underlying Purchased Note
Collateral and all other such Collateral related to such Receivable (and
the proceeds thereof), and such security interest is and shall be prior to
all other liens upon and security interests in such Applicable Underlying
Purchased Note Collateral and other such Collateral (and the proceeds
thereof) that now exist or may hereafter arise or be created; provided,
that, any such security interest in the Land, Units and/or Common Elements
of
50
an Applicable Development, to the extent evidenced by a Developer
Mortgage, may be subordinate to an AD&C Mortgage.
(ll) The Borrower shall have taken all steps necessary under all
applicable law in order to cause to exist in favor of the Agent, for the
benefit of the Lender, a valid, subsisting and enforceable first priority
perfected lien in such Pledged Purchased Consumer Note Receivable, the
Applicable Underlying Purchased Note Collateral and all other Collateral
related to each such Pledged Purchased Consumer Note Receivable (and the
proceeds thereof) on or before the Borrowing Date such Pledged Purchased
Consumer Note Receivable is Pledged hereunder and upon the Pledge of such
Receivable by the Borrower to the Agent (for the benefit of the Lender),
there shall exist in favor of the Agent (for the benefit of the Lender) as
secured party, a valid, subsisting and enforceable first priority
perfected security interest in such Pledged Purchased Consumer Note
Receivable and in the Borrower's first priority (or, to the extent such
security interest is in the Land, Units and/or Common Elements of an
Applicable Development, evidenced by a Developer Mortgage and subordinate
to an AD&C Mortgage, second priority) perfected security interest in the
Applicable Underlying Purchased Note Collateral and all other Collateral
related to such Pledged Purchased Consumer Note Receivable (and the
proceeds thereof) being Pledged hereunder on such Borrowing Date and such
security interest is and shall be prior to all other liens upon and
security interests therein that now exist or may hereafter arise or be
created.
(mm) [Intentionally omitted.]
(nn) The Applicable Underlying Seller owned the Pledged Purchased
Consumer Note Receivable free and clear of any Adverse Claim immediately
prior to its sale of such Pledged Purchased Consumer Note Receivable to
RFI or EFI, as the case may be, and has taken all steps necessary under
all applicable law in order to cause to exist in favor of the Agent, for
the benefit of the Lender, a valid, subsisting and enforceable first
priority perfected security interest in the Borrower's valid, subsisting
and enforceable first priority perfected security interest in such Pledged
Purchased Consumer Note Receivable (and the proceeds thereof).
(oo) All filings (including, without limitation, UCC and real
property filings) required to be made by any Person and all other actions
required to be taken or performed by any Person in any jurisdiction to
give the Agent, for the benefit of the Lender, a first priority perfected
lien on such Pledged Purchased Consumer Note Receivables and the proceeds
thereof have been made, taken or performed.
(pp) With respect to each such Pledged Purchased Consumer Note
Receivable, there exists a Pledged Purchased Consumer Note Receivable File
and a copy of such Pledged Purchased Consumer Note Receivable File is in
the possession of the Custodian.
51
(qq) No such Pledged Purchased Consumer Note Receivable has been
satisfied, subordinated or rescinded, and the Applicable Underlying
Purchased Note Collateral securing such Pledged Purchased Consumer Note
Receivable has not been released from the lien of the Agent, for the
benefit of the Lender, in whole or in part.
(rr) No such Pledged Purchased Consumer Note Receivable was
originated in, or is subject to the laws of, any jurisdiction the laws of
which would make unlawful, void or voidable the sale, transfer and
assignment of such Pledged Purchased Consumer Note Receivable and none of
the Applicable Underlying Seller, the related Consumer, RFI, EFI or the
Borrower has entered into any agreement with any Person that prohibits,
restricts or conditions the assignment of such Pledged Purchased Consumer
Note Receivable.
(ss) None of the Applicable Underlying Seller, the related Consumer,
RFI, EFI or the Borrower have taken any action to convey any right to any
Person that would result in such Person having a right to payments due
under such Pledged Purchased Consumer Note Receivable or payments received
under the related Title Policy, if applicable, or otherwise to impair the
rights of the Borrower, the Agent or the Lender in such Pledged Purchased
Consumer Note Receivable, the Applicable Underlying Purchased Note
Collateral securing such Pledged Purchased Consumer Note Receivable or the
proceeds thereof.
(tt) No such Pledged Purchased Consumer Note Receivable is assumable
by another Person in a manner which would release the related Consumer
from such Consumer's obligations to the Applicable Underlying Seller, RFI,
EFI, the Borrower or the Lender.
(uu) Each such Pledged Purchased Consumer Note Receivable is in full
force and effect and constitutes the legal, valid and binding obligation
of the related Consumer and is not subject to any right of rescission (or
in the case of a Pledged Purchased Consumer Note Receivable executed in
connection with an Interval sale with respect to a Development located in
Florida or any other jurisdiction which by law entitles a Consumer to an
ongoing rescission period, no such rescission has occurred), setoff,
counterclaim or defense (except the potential discharge in bankruptcy of
such Consumer).
(vv) There has been no default, breach, violation or event
permitting acceleration under the terms of such Pledged Purchased Consumer
Note Receivable, and no condition exists or event has occurred and is
continuing that with notice, the lapse of time or both would constitute a
default, breach, violation or event permitting acceleration under the
terms of such Pledged Purchased Consumer Note Receivable, and there has
been no waiver of any of the foregoing.
(ww) No selection procedures adverse to RFI, EFI, the Borrower, the
Agent or the Lender have been utilized in selecting any such Pledged
Purchased Consumer Note
52
Receivable from all other similar receivables acquired by the Applicable
Underlying Seller.
(xx) Each such Pledged Purchased Consumer Note Receivable has in
place with respect thereto an enforceable Developer Repurchase Obligation.
(yy) No such Pledged Purchased Consumer Note Receivable is a Presale
Consumer Note Receivable.
(zz) [Intentionally omitted.]
(aaa) [Intentionally omitted.]
(bbb) [Intentionally omitted.]
(ccc) Upon inclusion of such Pledged Purchased Consumer Note
Receivable in the Net Eligible Receivables Balance, the Weighted Average
APR of all Primary Level Eligible Receivables shall be at least 12%.
(ddd) If such Pledged Purchased Consumer Note Receivable was
executed in connection with the related Consumer's purchase of a Right to
Use Interval and was sold to EFI by a Developer which is an Affiliate of
Equivest (and such Pledged Purchased Consumer Note Receivable was not an
Existing Purchased Consumer Note Receivable or a new Pledged Purchased
Consumer Note Receivable sold under the terms of an Existing Eligible
Developer Sale Agreement unless such new Pledged Purchased Consumer Note
Receivable relates to a New Phase at the Development which is the subject
of such Existing Eligible Developer Sale Agreement), a Developer Title
Policy is in effect which (i) covers the related Applicable Development
and all necessary steps have been taken in order to assign RFI's or EFI's
rights as the insured party under the aforementioned Developer Title
Policy to the Borrower (or to have an endorsement issued granting to the
Borrower the rights of an insured under such policy) and to collaterally
assign such rights from the Borrower to the Agent, for the benefit of the
Lender, (ii) is at all times in an amount not less than the acquisition
and construction costs incurred by the Developer with respect to the
related Applicable Development and (iii) was issued by a Title Insurance
Company.
(eee) If such Pledged Purchased Consumer Note Receivable was
executed in connection with the related Consumer's purchase of a Fee
Simple Interval and was sold to EFI by a Developer which is an Affiliate
of Equivest (and such Pledged Purchased Consumer Note Receivable was not
an Existing Purchased Consumer Note Receivable or a new Pledged Purchased
Consumer Note Receivable sold under the terms of an Existing Eligible
Developer Sale Agreement unless such new Pledged Purchased Consumer Note
Receivable relates to a New Phase at the Development which is the subject
of such Existing Eligible Developer Sale Agreement), an Interval Title
Policy is in effect which
53
(i) covers such Fee Simple Interval and all necessary steps have been
taken in order to assign RFI's or EFI's rights as the insured party under
the aforementioned Interval Title Policy to the Borrower (or to have an
endorsement issued granting to the Borrower the rights of an insured under
such policy) and to collaterally assign such rights from the Borrower to
the Agent, for the benefit of the Lender, (ii) is at all times in an
amount of not less than the outstanding principal amount of such Pledged
Purchased Consumer Note Receivable and (iii) was issued by a Title
Insurance Company.
(fff) If such Pledged Purchased Consumer Note Receivable was
executed in connection with the related Consumer's purchase of a Right to
Use Interval and was sold to RFI or EFI by a Developer which is (X) not an
Affiliate of Equivest or (Y) an Affiliate of Equivest (and, in the case of
clause (Y), such Pledged Purchased Consumer Note Receivable was an
Existing Purchased Consumer Note Receivable or a new Pledged Purchased
Consumer Note Receivable sold under the terms of an Existing Eligible
Developer Sale Agreement unless such new Pledged Purchased Consumer Note
Receivable relates to a New Phase at the Development which is the subject
of such Existing Eligible Developer Sale Agreement), either (i) a
Developer Title Policy is in effect which (a) covers the related
Applicable Development and all necessary steps have been taken in order to
assign RFI's or EFI's rights as the insured party under the aforementioned
Developer Title Policy to the Borrower (or to have an endorsement issued
granting to the Borrower the rights of an insured under such policy) and
to collaterally assign such rights from the Borrower to the Agent, for the
benefit of the Lender, (b) is at all times in an amount not less than the
acquisition and construction costs incurred by the Developer with respect
to the related Applicable Development and (c) was issued by a Title
Insurance Company or (ii) the Borrower shall have been deemed to have made
a representation and warranty (the sole remedies for the breach of which
shall be that such Pledged Purchased Consumer Note Receivable shall no
longer be deemed to be an Eligible Receivable and shall be excluded from
the Net Eligible Receivables Balance as of the date such breach becomes
known by or should have become known by the Borrower or the Servicer) that
as of the date such Pledged Purchased Consumer Note Receivable is first
Pledged hereunder, good and marketable title to the related Applicable
Development was vested in the related Developer and such Applicable
Development is not subject to any monetary liens (except in favor of the
Agent, for the benefit of the Lender, or with respect to taxes and
assessments which are not delinquent or, if applicable, with respect to an
AD&C Mortgage) or other encumbrances which would interfere with the
development or the intended use of such Applicable Development.
(ggg) If such Pledged Purchased Consumer Note Receivable was
executed in connection with the related Consumer's purchase of a Fee
Simple Interval and was sold to RFI or EFI by a Developer which is (X) not
an Affiliate of Equivest or (Y) an Affiliate of Equivest (and, in the case
of clause (Y), such Pledged Purchased Consumer Note Receivable was an
Existing Purchased Consumer Note Receivable or a new Pledged Purchased
Consumer Note Receivable sold under the terms of an Existing Eligible
Developer Sale Agreement unless such new Pledged Purchased Consumer Note
54
Receivable relates to a New Phase at the Development which is the subject
of such Existing Eligible Developer Sale Agreement), either (i) an
Interval Title Policy is in effect which (a) covers such Fee Simple
Interval and all necessary steps have been taken in order to assign RFI's
or EFI's rights as the insured party under the aforementioned Interval
Title Policy to the Borrower (or to have an endorsement issued granting to
the Borrower the rights of an insured under such policy) and to
collaterally assign such rights from the Borrower to the Agent, for the
benefit of the Lender, (b) is at all times in an aggregate amount of not
less than the outstanding principal amount of such Pledged Purchased
Consumer Note Receivable and all other Consumer Note Receivables covered
by such Interval Title Policy, if any, and (c) was issued by a Title
Insurance Company or (ii) the Borrower shall have been deemed to have made
a representation and warranty (the sole remedies for the breach of which
shall be that such Pledged Purchased Consumer Note Receivable shall no
longer be deemed to be an Eligible Receivable and shall be excluded from
the Net Eligible Receivables Balance as of the date such breach becomes
known by or should have become known by the Borrower or the Servicer) that
as of the date such Pledged Purchased Consumer Note Receivable is first
Pledged hereunder, good and marketable title to the related Development
(except with respect to other Fee Simple Intervals sold to Consumers) was
vested in the related Developer immediately prior to the sale of the Fee
Simple Interval related to such Pledged Purchased Consumer Note Receivable
to the related Consumer and that, upon the consummation of such sale, good
and marketable title to such Fee Simple Interval was vested in such
Consumer, and such Fee Simple Interval is not subject to any monetary
liens (except in favor of the Agent, for the benefit of the Lender, or
with respect to taxes and assessments which are not delinquent) or other
encumbrances which would interfere with the development or the intended
use of such Fee Simple Interval.
(hhh) If such Pledged Purchased Consumer Note Receivable was
executed in connection with the related Consumer's purchase of a Fee
Simple Interval, such Consumer was delivered a deed with respect to such
Fee Simple Interval and such deed was duly recorded or registered in the
Applicable Jurisdiction in accordance with all Applicable Laws.
(iii) If such Pledged Purchased Consumer Note Receivable was an
Existing Purchased Consumer Note Receivable or a new Pledged Purchased
Consumer Note Receivable sold under the terms of an Existing Eligible
Developer Sale Agreement (unless such new Pledged Purchased Consumer Note
Receivable relates to a New Phase at the Development which is the subject
of such Existing Eligible Developer Sale Agreement) either:
(X) an Acceptable Environmental Report has been obtained by
RFI or EFI, as applicable, covering the Applicable Development
related to such Pledged Purchased Consumer Note Receivable; or
55
(Y) the Borrower shall have been deemed to have made a
representation and warranty (the sole remedies for the breach of
which shall be that such Pledged Purchased Consumer Note Receivable
shall no longer be deemed to be an Eligible Receivable and shall be
excluded from the Net Eligible Receivables Balance as of the date
such breach becomes known by or should have become known by the
Borrower or the Servicer) that as of the date such Pledged Purchased
Consumer Note Receivable is first Pledged hereunder (i) there shall
be no Hazardous Materials on, under, or affecting the Land or any
other real property or personal property comprising the Applicable
Development related to such Pledged Purchased Consumer Note
Receivable, except for commercially reasonable amounts thereof
commonly found at residential and resort properties in the
Applicable Jurisdiction, (ii) there are no known or suspected
Hazardous Materials located at, used or stored on, or transported to
or from such Applicable Development or in such proximity thereto as
to create a material risk of contamination of any Applicable
Underlying Purchased Note Collateral except for commercially
reasonable amounts thereof commonly found at residential and resort
properties in the Applicable Jurisdiction; and (iii) there is no
friable asbestos within the Units, Common Elements, if any, or
elsewhere at such Applicable Development or, if asbestos is found to
be present in any part of the Applicable Development, that such
presence is of a nature or magnitude that is able to be removed by a
licensed removal contractor for a guaranteed maximum sum reasonably
satisfactory to the Borrower and the Lender.
(jjj) If such Pledged Purchased Consumer Note Receivable is (i) not
an Existing Purchased Consumer Note Receivable or (ii) a new Pledged
Purchased Consumer Note Receivable sold under the terms of an Existing
Eligible Developer Sale Agreement (which such new Pledged Purchased
Consumer Note Receivable relates to a New Phase at the Development which
is the subject of such Existing Eligible Developer Sale Agreement), an
Acceptable Environmental Report has been obtained by RFI or EFI, as
applicable, covering the Applicable Development related to such Pledged
Purchased Consumer Note Receivable (and, if such Pledged Purchased
Consumer Note Receivable relates to a Club Membership Right to Use
Interval or a Club Membership Fee Simple Interval, with respect to each
other Development with respect to which the holder of such an Interval has
rights, the Borrower shall have been deemed to have made a representation
and warranty (the sole remedies for the breach of which shall be that such
Pledged Purchased Consumer Note Receivable shall no longer be deemed to be
an Eligible Receivable and shall be excluded from the Net Eligible
Receivables Balance as of the date such breach becomes known by or should
have become known by the Borrower or the Servicer) that as of the date
such Pledged Purchased Consumer Note Receivable is first Pledged hereunder
(i) there shall be no Hazardous Materials on, under, or affecting the Land
or any other real property or personal property comprising such
Development, except for commercially reasonable amounts thereof commonly
found at residential and resort properties in the Applicable Jurisdiction,
(ii) there are no known or suspected Hazardous Materials located at, used
or stored on, or transported to or from
56
such Development or in such proximity thereto as to create a material risk
of contamination of any Applicable Underlying Purchased Note Collateral
except for commercially reasonable amounts thereof commonly found at
residential and resort properties in the Applicable Jurisdiction; and
(iii) there is no friable asbestos within the Units, Common Elements, if
any, or elsewhere at such Development or, if asbestos is found to be
present in any part of such Development, that such presence is of a nature
or magnitude that is able to be removed by a licensed removal contractor
for a guaranteed maximum sum reasonably satisfactory to the Borrower and
the Lender).
(kkk) The Borrower has received certified copies of all insurance
policies and endorsements thereto or other evidence of insurance
satisfactory to Borrower and Lender, in the reasonable discretion of each,
with respect to the Applicable Development relating to such Pledged
Purchased Consumer Note Receivable and such insurance policies and
endorsements thereto shall conform in all material respects with the
Credit and Collection Policy and customary practice in the timeshare
industry in the Applicable Jurisdiction. In addition, the Applicable
Underlying Borrower or the Applicable Underlying Seller has obtained and
is maintaining or has caused the Applicable Timeshare Owners' Association
to obtain and maintain all policies of insurance required by and in
accordance with the terms of the Credit and Collection Policy and which
are customary in the timeshare industry in the Applicable Jurisdiction.
Any of the foregoing eligibility criteria may be waived by the Agent and the
Lender in accordance with Section 9.01 of this Agreement.
"Eligible Purchased Presale Consumer Note Receivable" means a
Purchased Consumer Note Receivable which constitutes a Presale Consumer Note
Receivable that satisfies each of the criteria for an Eligible Purchased
Consumer Note Receivable (other than the criteria of such definition set forth
in paragraph (m), paragraph (s), subclauses (i) and (ii) of paragraph (y),
paragraph (yy), paragraph (eee), paragraph (hhh) and, solely to the extent that
the requirements thereof would require the recordation of an Interval Mortgage,
paragraphs (kk), (ll) and (ggg) thereof) and that additionally satisfies each of
the following criteria:
(a) (i) All sales and financing documents relating to such Presale
Consumer Note Receivable have been executed and delivered to RFI or EFI,
(ii) there are no conditions or requirements for the escrow of Consumer
deposits or payments required under applicable law or contract relating to
the sale which is the subject of such Presale Consumer Note Receivable and
(iii) all conditions and requirements with respect to such sale have been
completed other than the issuance of the certificate of occupancy for the
building in which the Unit related to the applicable Interval is located.
(b) Such Presale Consumer Note Receivable will meet the criteria set
forth in paragraph (m), paragraph (s), subclauses (i) and (ii) of
paragraph (y), paragraph (yy), paragraph (eee), paragraph (hhh), paragraph
(kk), paragraph (ll) and paragraph (ggg) in the defined term Eligible
Purchased Consumer Note Receivable at the closing of the
57
Interval to which such Presale Consumer Note Receivable relates, which
closing shall take place in accordance with the purchase contract for that
Interval, but in any event no later than two years from the date of the
purchase contract.
(c) The related Applicable Underlying Seller shall have posted and
shall maintain completion and performance bonds in amounts satisfactory to
complete the related Development and in form and substance satisfactory to
RFI or EFI and the Agent.
(d) The documentation related to such Presale Consumer Note
Receivable shall require the Consumer to make periodic payments of
principal and interest on such Presale Consumer Note Receivable prior to
the closing of the Interval to which such Presale Consumer Note Receivable
relates.
Any of the foregoing eligibility criteria may be waived by the Agent and the
Lender in accordance with Section 9.01 of this Agreement.
"Eligible Receivable" means, at any time, an Eligible Developer Note
Receivable, an Eligible Pledged Consumer Note Receivable, an Eligible Purchased
Consumer Note Receivable, an Eligible Pledged Presale Consumer Note Receivable
or an Eligible Purchased Presale Consumer Note Receivable.
"Eligible Receivables Balance" means, at any time, the sum of the
Outstanding Principal Balances of all Consumer Level Eligible Receivables at
such time.
"Encumbered Interval" means any Interval that is encumbered by the
lien of an Interval Mortgage or which otherwise serves as collateral for the
payment of a Pledged Purchased Consumer Note Receivable or a Pledged Consumer
Note Receivable.
"Encumbered Personal Property" means, to the extent applicable, all
furniture, furnishings, fixtures, appliances, equipment, inventory, supplies,
accounts, chattel paper, and general intangibles at any time located at, arising
out of the use of, and/or used or useful in connection with the management or
operation of any Encumbered Interval, whether now owned or hereafter acquired by
the Borrower or an Applicable Underlying Borrower, together with all
improvements and accessions thereto and replacements thereof and the cash and
non-cash proceeds thereof, a lien against which constitutes Applicable
Underlying Loan Collateral or Applicable Underlying Purchased Note Collateral
for a Receivable.
"Environmental Laws" means, if and to the extent applicable, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time ("CERCLA"), the Resource Conservation and Recovery Act
of 1976, as amended from time to time ("RCRA"), the Superfund Amendments and
Reauthorization Act of 1986, as amended, the federal Clean Air Act, the federal
Clean Water Act, the federal Safe Drinking Water Act, the federal Toxic
Substances Control Act, the federal Hazardous Materials Transportation Act, the
federal Emergency Planning and Community Right to Know Act of 1986, the federal
58
Endangered Species Act, the federal Occupational Safety and Health Act of 1970,
the federal Water Pollution Control Act, and any and all comparable statutes or
ordinances enacted in an Applicable Jurisdiction (including any Applicable
Jurisdiction outside of the United States), as all of the foregoing laws may be
amended from time to time, and any rules or regulations promulgated pursuant to
the foregoing; together with any similar local, state or federal statutes,
ordinances, rules, or regulations, either in existence as of the date hereof or
enacted or promulgated after the date of this Agreement, that concern the
management, control, storage, discharge, treatment, containment, removal, and/or
transport of Hazardous Materials or other substances that are or may become a
threat to public health or the environment; together with any common law theory
involving Hazardous Materials or substances that are (or alleged to be)
hazardous to human health or the environment, based on nuisance, trespass,
negligence, strict liability, or other tortious conduct, or any other federal,
state, or local statute, ordinance, regulation, rule, policy, or determination
pertaining to health, hygiene, the environment, or environmental conditions.
"EPA" means the United States Environmental Protection Agency.
"Equivest" means Equivest Finance Inc., a Delaware corporation.
"ERISA" means the United States Employee Retirement Income Security
Act of 1974, as amended from time to time.
"Eurodollar Disruption Event" means any of the following: (i) a
determination by the Lender that it would be contrary to law or to the directive
of any central bank or other governmental authority (whether or not having the
force of law) to obtain United States dollars in the London interbank market to
make, fund or maintain any Loan, (ii) a determination by the Lender that the
rate at which deposits of United States dollars are being offered in the London
interbank market does not accurately reflect the cost to the Lender of making,
funding or maintaining any Loan or (iii) the inability of the Lender to obtain
United States dollars in the London interbank market to make, fund or maintain
any Loan.
"Eurodollar Rate" means with respect to any Fixed Period for any
Loan allocated to such Fixed Period, an interest rate per annum equal to the
average of the interest rates per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) reported during such Fixed Period on Telerate Access Service
Page 3750 (British Bankers Association Settlement Rate) as the London Interbank
Offered Rate for United States dollar deposits having a term of thirty (30) days
and in a principal amount of $1,000,000 or more (or, if such page shall cease to
be publicly available or, if the information contained on such page, in the
Lender's sole judgment, shall cease to accurately reflect such London Interbank
Offered Rate, such rate as reported by any publicly available recognized source
of similar market data selected by the Lender that, in the Lender's reasonable
judgment, accurately reflects such London Interbank Offered Rate).
"Event of Default" has the meaning assigned to that term in Section
7.01.
59
"Existing Advance" means an advance made under an Existing Developer
Note Receivable (which is an Eligible Developer Note Receivable) and the related
Hypothecation Loan Agreement; provided that such advance was made prior to the
initial Borrowing hereunder.
"Existing Developer Note Receivable" means (i) a Pledged Developer
Note Receivable Pledged on the initial Borrowing Date hereunder that was being
lent against under the Prior Loan Facility immediately prior to the initial
Borrowing hereunder and which is listed on Exhibit M hereto or (ii) any Pledged
Developer Note Receivable secured by Pledged Consumer Note Receivables executed
in connection with Consumers' purchases of Intervals with respect to Units
located at the Surrey Development.
"Existing Eligible Developer Sale Agreement" means (i) an Eligible
Developer Sale Agreement listed on Exhibit O hereto or (ii) an Eligible
Developer Sale Agreement related to Pledged Purchased Consumer Note Receivables
executed in connection with Consumers' purchases of an Intervals with respect to
Units located at the Surrey Development.
"Existing Pledged Consumer Note Receivable" means (i) a Pledged
Consumer Note Receivable the interest of the Borrower in which was Pledged on
the initial Borrowing Date hereunder that was being lent against under the Prior
Loan Facility immediately prior to the initial Borrowing hereunder or (ii) any
Pledged Consumer Note Receivable executed in connection with a Consumer's
purchase of an Interval with respect to a Unit located at the Surrey
Development.
"Existing Purchased Consumer Note Receivable" means (i) a Pledged
Purchased Consumer Note Receivable Pledged on the initial Borrowing Date
hereunder that was being lent against under the Prior Loan Facility immediately
prior to the initial Borrowing hereunder and the Eligible Developer Sale
Agreement with respect to which is an Existing Eligible Developer Sale
Agreement, (ii) any Pledged Purchased Consumer Note Receivable executed in
connection with a Consumer's purchase of an Interval with respect to a Unit
located at the Surrey Development, (iii) a Peppertree Receivable or (iv) an
Eastern Receivable.
"Facility Amount" means at any time, the sum of (i) the face amount
of outstanding commercial paper notes (net of the amount of all interest
scheduled to accrue thereon through their respective stated maturity if such
commercial paper notes are issued on a discount basis) of the Lender issued to
fund Loans hereunder, plus (ii) the aggregate Loans Outstanding hereunder
bearing interest at the Non-CP Rate, plus (iii) accrued Yield and Fees with
respect to the amounts described in the foregoing clauses (i) and (ii).
"Facility Funding Rate" means, as of the last day of any Remittance
Period, a rate per annum equal to a fraction (expressed as a percentage), the
numerator of which is equal to the aggregate amount of Yield and Fees accrued
during such Remittance Period and the denominator of which shall be equal to the
average Facility Amount during such Remittance Period.
60
"Facility Maturity Date" means the fifth anniversary of the date of
this Agreement.
"Fee Letter" has the meaning assigned to that term in Section
2.12(a).
"Fee Simple Interval" means an undivided fee simple timeshare
interest in a particular Unit or in an entire Applicable Development as a whole,
as a tenant in common with other owners of undivided interests in such Unit or
Applicable Development, together with all rights, benefits, privileges, and
interests appurtenant thereto, including but not limited to the right to use and
occupy a Unit within an Applicable Development and the Common Elements and
Common Furnishings, if any, appurtenant to such Unit and/or the Applicable
Development during a reserved or assigned use period, all as more specifically
described in the Applicable Declaration and/or other Applicable Timeshare
Documents. For purposes of this Agreement, (i) Undelivered Deed Intervals shall
be deemed to be Right to Use Intervals and not Fee Simple Intervals and (ii)
Club Membership Fee Simple Intervals shall be deemed to be Fee Simple Intervals.
"Fees" has the meaning assigned to that term in Section 2.12(a).
"Fitch" means Fitch IBCA, Inc. (or its successors in interest).
"Fixed Period" means for any outstanding Loans, (i) if Yield in
respect of all or any part thereof is computed by reference to the CP Rate, a
period of up to and including sixty (60) days as determined pursuant to Section
2.04, or (ii) if Yield in respect of all or any part thereof is computed by
reference to the Non-CP Rate, the applicable Remittance Period.
"Fractional Interval" means any Interval with respect to a use
period by a Consumer of longer than seven days.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States.
"Government Entity" means the United States, any State, any
political subdivision of a State and any agency or instrumentality of the United
States or any State or political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Hazardous Materials" means "hazardous substances," "hazardous
waste," "hazardous constituents," "toxic substances," or "solid waste," as
defined in the Environmental Laws, and any other contaminant or any material,
waste, or substance that is petroleum or petroleum based, asbestos,
polychlorinated biphenyls, flammable explosives, or radioactive materials.
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"Home Resort" means the Eligible Development designated as a "home
resort" with respect to a Club Membership Fee Simple Interval or a Club
Membership Right to Use Interval under the Applicable Timeshare Documents
related thereto.
"Hypothecation Loan Agreement" means, (i) with respect to all
"Hypothecation Loan Agreements" entered into by RFI prior to the date hereof, an
agreement substantially in the form of one of the three agreements attached as
Exhibit G-1 hereto and incorporated herein by this reference and (ii) with
respect to all "Hypothecation Loan Agreements" entered into by RFI on or after
the date hereof, an agreement substantially in the form of the agreement
attached as Exhibit G-2 hereto and incorporated herein by this reference.
"Indemnified Amounts" has the meaning assigned to that term in
Section 8.01.
"Independent Accountants" has the meaning assigned to that term in
Section 6.13(b).
"Initial Underlying Loan Advance" means, as to a particular
Applicable Underlying Loan, the first advance of a Loan by Lender hereunder
secured by the Developer Note Receivable and Applicable Underlying Loan
Collateral related to such Applicable Underlying Loan.
"Initial Underlying Purchase Advance" means, as to a particular
Eligible Developer Sale Agreement pursuant to which Applicable Underlying
Purchases are executed, the first advance of a Loan by the Lender hereunder
secured by a Purchased Consumer Note Receivable which was purchased by RFI or
EFI pursuant to such Eligible Developer Sale Agreement.
"Interval" means either a Fee Simple Interval or a Right to Use
Interval.
"Interval Mortgage" means a properly recorded or registered
mortgage, deed of trust, or other security instrument customary in the timeshare
industry in the Applicable Jurisdiction acceptable to the Lender, in its
reasonable discretion, that creates a valid and enforceable first priority Lien
against the Encumbered Interval identified therein in accordance with all
Applicable Laws (which Encumbered Interval relates to an Applicable Development)
and secures the payment of all principal, interest, and other amounts owed by a
Consumer to an Applicable Underlying Borrower or Applicable Underlying Seller,
pursuant to a Pledged Consumer Note Receivable or Pledged Purchased Consumer
Note Receivable.
"Interval Title Policy" has the meaning assigned to such term in
Section 3.02(k)(iii).
"Issuer" means, collectively, Autobahn and any presently existing or
future Person administered by DG Bank whose principal business consists of
issuing commercial paper
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or other securities to fund its acquisition and maintenance of receivables,
accounts, instruments, chattel paper, general intangibles and other similar
assets.
"Land" means the real property upon which any portion of an
Applicable Development is situated.
"Lien" means any mortgage, security interest, or other interest in
property securing an obligation owed to, or valid claim by, a Person other than
the owner of such property, whether such interest arises in equity or is based
on common law, statute, or contract.
"Lender" means, collectively, Autobahn and/or any other Person
(including, without limitation, any present or future Affiliate of DG Bank) that
agrees, pursuant to the pertinent Assignment and Acceptance, to make Loans
secured by Pledged Assets pursuant to Article II of this Agreement.
"Liquidation Fee" means, for Loans allocated to any Fixed Period
during which such Loans are repaid (in whole or in part) prior to the end of
such Fixed Period, the amount, if any, by which (i) Yield (calculated without
taking into account any Liquidation Fee) which would have accrued on the amount
of the payment of such Loans during such Fixed Period (as so computed) if such
payment had not been made, as the case may be, exceeds (ii) the sum of (A) Yield
actually received by the Lender in respect of such Loans for such Fixed Period
and, if applicable, (B) the income, if any, received by the Lender from the
Lender's investing the proceeds of such payments on such Loans.
"Liquidation Proceeds" means with respect to a Receivable with
respect to which the related Interval has been foreclosed upon by the Servicer,
all amounts realized with respect to such Receivable net of (i) reasonable
expenses of the Servicer incurred in connection with the collection,
repossession and disposition of the related Interval and (ii) amounts that are
required to be refunded to the Applicable Underlying Borrower or Applicable
Underlying Seller on such Receivable; provided, however, that the Liquidation
Proceeds with respect to any Receivable shall in no event be less than zero.
"Liquidity/Credit Enhancement Facility" means an Enhancement
Agreement, to be entered into on the date hereof among the Issuer, the financial
institutions party thereto and the Agent, and/or a Liquidity Agreement, to be
entered into on the date hereof among the Issuer, the financial institutions
party thereto and the Agent and/or a letter of credit or similar instrument or
agreement by the financial institution party thereto in favor of the Issuer,
together with any related agreements, in each case, to be entered into on the
date hereof.
"Loan" means a loan made by the Lender to the Borrower pursuant to
Article II.
"Loans Outstanding" means the sum of the principal amounts loaned to
the Borrower for the initial and any subsequent borrowings pursuant to Sections
2.01 and 2.02, reduced from time to time by Collections received and distributed
on account of such Loans
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outstanding pursuant to Section 2.05; provided, however, that such Loans
outstanding shall not be reduced by any distribution of any portion of
Collections if at any time such distribution is rescinded or must be returned
for any reason.
"Lockbox" means a post office box to which Collections are remitted
for retrieval by the Agent's Bank and for deposit by the Agent's Bank into the
Lockbox Account.
"Lockbox Account" means the deposit account (account number
889-019-8966 at the Agent's Bank) in the name of and under the sole dominion and
control of the Agent for the benefit of DG Bank and Autobahn; provided, that the
funds deposited in such account (including any interest and earnings thereon)
from time to time shall constitute the property and assets of the Borrower and
the Borrower shall be solely liable for any taxes payable with respect to the
Lockbox Account.
"Lockbox Agreement" means an agreement relating to lockbox services
in connection with each Lockbox which is reasonably satisfactory to the Agent in
form and substance and among the Borrower, the Agent and the Agent's Bank, as
such agreement may from time to time be amended, supplemented or otherwise
modified in accordance with the terms thereof.
"Material Adverse Effect" means a material adverse effect on (i) the
ability of the Borrower or RFI (in its capacity as Servicer or otherwise) to
conduct its business, (ii) the ability of the Borrower or RFI (in its capacity
as Servicer or otherwise) to perform its obligations under this Agreement or any
other Transaction Document to which it is a party, (iii) the validity or
enforceability of this Agreement or any other Transaction Document to which the
Borrower or RFI (in its capacity as Servicer or otherwise), as applicable, is a
party, (iv) the rights and remedies of the Lender or the Agent under this
Agreement or any of the Transaction Documents or (v) the validity,
enforceability or collectibility of all or any portion (other than an
inconsequential portion) of the Pledged Receivables.
"Minimum APR" means, with respect to any Receivable as of the
Borrowing Date on which such Receivable is Pledged hereunder, a per annum rate
equal to the sum of (i) the CP Rate or Non-CP Rate applicable to the Loan
advanced on such Borrowing Date plus (ii) 3.00% per annum.
"Minimum Shadow Rating" means a rating with respect to the financing
facility contemplated hereunder of not lower than "A3" from Moody's and "A-"
from Fitch.
"Monthly Remittance Report" means a report, in substantially the
form of Exhibit C, furnished by the Servicer to the Agent for the Lender
pursuant to Section 6.12(b).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. (or its successors
in interest).
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"Net Eligible Receivables Balance" means, at any time, (X) without
duplication, the sum of (a) 80% of the Outstanding Principal Balance of all
Eligible Purchased Consumer Note Receivables and Eligible Purchased Presale
Consumer Note Receivables at such time, plus (b) the lesser of (i) 80% of the
Outstanding Principal Balance of all Eligible Pledged Consumer Note Receivables
securing Eligible Developer Note Receivables and Eligible Pledged Presale
Consumer Note Receivables securing Eligible Developer Note Receivables at such
time or (ii) the sum of (A) 90% of the Outstanding Principal Balances of all
Eligible Developer Note Receivables (other than the Outstanding Principal
Balances of Eligible Developer Note Receivables which were related to Existing
Advances under Existing Developer Note Receivables) at such time plus (B) 100%
of the Outstanding Principal Balances of all Eligible Developer Note Receivables
which were related to Existing Advances under Existing Developer Note
Receivables at such time; provided, however, that any of the foregoing
percentages shall increase to the maximum such percentage (as determined by both
Rating Agencies) permitted in order for the financing facility contemplated
hereunder to receive the Minimum Shadow Rating minus (Y) the Overconcentration
Amount at such time.
"New Phase" means, with respect to an Applicable Development, any
phase of construction which has not been completed prior to the date hereof or
which shall commence after the date hereof.
"Non-CP Rate" means with respect to any Fixed Period for any Loan
allocated to such Fixed Period, an interest rate per annum equal to the Adjusted
Eurodollar Rate; provided, however, that if the Lender shall have notified the
Agent that a Eurodollar Disruption Event has occurred, the Non-CP Rate shall be
equal to the Base Rate until the Lender shall have notified the Agent that such
Eurodollar Disruption Event has ceased, at which time the Non-CP Rate shall
again be equal to the Adjusted Eurodollar Rate).
"Non-Disturbance Arrangements" means with respect to any Right to
Use Interval, that, by the recording of an appropriate declaration in the
appropriate public records of the Applicable Jurisdiction, by operation of
Applicable Law, or otherwise, all right, title and interest of the related
Consumer in, to and under such Right to Use Interval shall remain in full force
and effect notwithstanding the occurrence of a Bankruptcy Event with respect to
the Applicable Underlying Borrower or Applicable Underlying Seller related to
such Right to Use Interval.
"Non-Specific Club Membership Right to Use Interval" means a Club
Membership Right to Use Interval with respect to which no Home Resort is
designated under the Applicable Timeshare Documents related thereto.
"Non-Specific Club Membership Fee Simple Interval" means a Club
Membership Fee Simple Interval with respect to which no Home Resort is
designated under the Applicable Timeshare Documents related thereto.
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"Notice of Borrowing" has the meaning assigned to that term in
Section 2.02(b) hereof.
"Notice of Pledge" has the meaning assigned to that term in the
Custodial Agreement.
"Obligations" means all present and future indebtedness and other
liabilities and obligations (howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, or due or to become due) of the
Borrower to the Lender or the Agent arising under this Agreement and the other
Transaction Documents and shall include, without limitation, all Fees
(including, without limitation, any unpaid portion of the Structuring Fee) all
liability for principal of and interest on the Loans, indemnifications and other
amounts due or to become due under this Agreement and such other documents,
including, without limitation, interest, fees and other obligations that accrue
after the commencement of an insolvency proceeding (in each case whether or not
allowed as a claim in such insolvency proceeding).
"Obligor" means the Applicable Underlying Borrower or the related
Consumer obligated to make payments with respect to a Receivable.
"Officer's Certificate" means a certificate signed by the president,
the secretary, the chief financial officer or any vice president of any Person.
"Opinion of Counsel" means a written opinion of independent counsel
acceptable to the Agent in its reasonable discretion, which opinion, if such
opinion or a copy thereof is required by the provisions of this Agreement or a
Borrower Receivables Purchase Agreement to be delivered to the Borrower or the
Agent, is reasonably acceptable in form and substance to the Agent.
"Outstanding Principal Balance" means, as of any date, (i) with
respect to a Developer Note Receivable, the aggregate amount of credit actually
extended to the Applicable Underlying Borrower under the terms of such Developer
Note Receivable minus that portion of all amounts paid by the Applicable
Underlying Borrower with respect to such Developer Note Receivable on or prior
to such date which were allocable to principal in accordance with the terms of
such Developer Note Receivable and the related Applicable Underlying Loan
Documents, (ii) with respect to a Pledged Consumer Note Receivable (other than a
Discounted Consumer Note Receivable), the aggregate amount lent to the related
Consumer by the Applicable Underlying Borrower under the terms of such Pledged
Consumer Note Receivable minus that portion of all amounts paid by such Consumer
with respect to such Pledged Consumer Note Receivable on or prior to such date
which were allocable to principal in accordance with the terms of such Pledged
Consumer Note Receivable and any related loan documents, (iii) with respect to a
Pledged Purchased Consumer Note Receivable (other than a Discounted Consumer
Note Receivable), the aggregate amount lent to the related Consumer by the
Applicable Underlying Seller under the terms of such Pledged Purchased Consumer
Note Receivable minus that portion of all amounts paid by such Consumer with
respect to such
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Pledged Purchased Consumer Note Receivable on or prior to such date which were
allocable to principal in accordance with the terms of such Pledged Purchased
Consumer Note Receivable and any related loan documents and (iv) with respect to
a Discounted Consumer Note Receivable, the present value thereof, as determined
by the Servicer and confirmed by the Agent, taking into account the difference
between the (a) the Weighted Average APR as of the last day of the Remittance
Period immediately preceding the Remittance Period during which such Discounted
Consumer Note Receivable was Pledged hereunder and (b) the annual percentage
rate of such Discounted Consumer Note Receivable.
"Overconcentration Amount" means, at any time, without duplication,
the sum of:
(a) the amount by which the sum of the Outstanding Principal
Balances of all Consumer Level Eligible Receivables related to any one
Eligible Development at such time exceeds 10% of the Eligible Receivables
Balance at such time;
(b) the amount by which the sum of the Outstanding Principal
Balances of all Consumer Level Eligible Receivables related to
Developments in any one state at such time exceeds 20% (or 40%, in the
case of Florida) of the Eligible Receivables Balance at such time;
(c) the amount by which the sum of the Outstanding Principal
Balances of all Eligible Pledged Consumer Note Receivables and all
Eligible Pledged Presale Consumer Note Receivables exceeds 25% of the
Eligible Receivables Balance at such time;
(d) the amount by which the sum of the Outstanding Principal
Balances of all Consumer Level Eligible Receivables related to any one
Eligible Developer which is not a wholly-owned subsidiary of Equivest
exceeds 20% of the Eligible Receivables Balance at such time;
(e) the amount by which the sum of the Outstanding Principal
Balances of all Consumer Level Eligible Receivables owing by Consumers
that are not residents of the United States exceeds 2.5% of the Eligible
Receivables Balance at such time;
(f) [Intentionally omitted];
(g) the amount by which the sum of the aggregate Outstanding
Principal Balances of all Pledged Consumer Note Receivables referred to in
paragraph (g) of the definition of Eligible Pledged Consumer Note
Receivables which constitute Consumer Level Eligible Receivables at such
time plus the aggregate Outstanding Principal Balance of all Pledged
Purchased Consumer Note Receivables referred to in paragraph (q) of the
definition of Eligible Purchased Consumer Note Receivable which constitute
Consumer Level Eligible Receivables at such time exceeds 3.00% of the
Eligible Receivables Balance at such time;
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(h) the amount by which the sum of the aggregate Outstanding
Principal Balances of all Consumer Level Eligible Receivables relating to
Fractional Intervals exceeds an amount equal to 5.00% of the Eligible
Receivables Balance at such time;
(i) the amount by which the sum of the aggregate Outstanding
Principal Balances of all Eligible Pledged Presale Consumer Note
Receivables and Eligible Purchased Presale Consumer Note Receivables
relating to the Surrey Development, exceeds an amount equal to 8% of the
Eligible Receivables Balance (or such lesser percentage as is consistent
with a "BBB" rated timeshare securitization financing, as determined by
either or both Rating Agencies) at such time;
(j) the amount by which the sum of the aggregate Outstanding
Principal Balances of all Eligible Pledged Presale Consumer Note
Receivables and Eligible Purchased Presale Consumer Note Receivables not
relating to the Surrey Development, exceeds an amount equal to 2.5% of the
Eligible Receivables Balance at such time; and
(k) the amount by which the sum of the aggregate Outstanding
Principal Balances of all Eligible Pledged Presale Consumer Note
Receivables and Eligible Purchased Presale Consumer Note Receivables
relating to any one Development (other than the Surrey Development),
exceeds an amount equal to $500,000 at such time.
"Payment Authorization Agreement" means the pre-authorized
electronic debit agreement (or provision of a Consumer Note Receivable) by a
Consumer which provides for payment of a Consumer Note Receivable to the
Applicable Underlying Borrower.
"Peppertree Receivable" means a Pledged Purchased Consumer Note
Receivable executed in connection with a Consumer's purchase of an Interval with
respect to a Unit located at one of the resorts listed on Exhibit T hereto.
"Permitted Investments" means any one or more of the following:
(i) direct obligations of, or obligations fully guaranteed as to
principal and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by the full
faith and credit of the United States; and
(ii) repurchase obligations (the collateral for which is held by a
third party) with respect to any security described in clause (i) above,
provided that the long-term unsecured obligations of the party agreeing to
repurchase such obligations are at the time rated by ▇▇▇▇▇'▇ and S&P in
one of their two highest long-term rating categories and if rated by
Fitch, in one of its two highest long-term rating categories;
(iii) certificates of deposit, time deposits, demand deposits and
bankers' acceptances of any bank or trust company incorporated under the
laws of the United States or any State thereof or the District of
Columbia, provided that the short-term
68
commercial paper of such bank or trust company (or, in the case of the
principal depository institution in a depository institution holding
company, the long-term unsecured debt obligations of the depository
institution holding company) at the date of acquisition thereof has been
rated by ▇▇▇▇▇'▇ and S&P in their highest short-term rating category, and
if rated by Fitch, in its highest short-term rating category;
(iv) commercial paper (having original maturities of not more than
270 days) of any corporation incorporated under the laws of the United
States or any State thereof or the District of Columbia, having a rating,
on the date of acquisition thereof, of no less than A-1 by ▇▇▇▇▇'▇, P-1 by
S&P and F-1 if rated by Fitch; and
(v) money market mutual funds registered under the Investment Company
Act of 1940, as amended, having a rating, at the time of such investment,
of no less than Aaa by ▇▇▇▇▇'▇, AAA by S&P and AAA if rated by Fitch;
provided, that no such instrument shall be a Permitted Investment if such
instrument evidences the right to receive either (a) interest only payments with
respect to the obligations underlying such instrument or (b) both principal and
interest payments derived from obligations underlying such instrument where the
principal and interest payments with respect to such instrument provide a yield
to maturity exceeding 120% of the yield to maturity at par of such underlying
obligation. Each Permitted Investment may be purchased by the Agent's Bank or
through an Affiliate of the Agent's Bank.
"Permitted Liens and Encumbrances" means:
(a) Liens created under this Agreement;
(b) The lien of current real property taxes and assessments, personal
property taxes, water charges, sewer rents, and other municipal
charges which are not yet delinquent; and
(c) The exceptions (general and specific) set forth in any title
insurance policy, covenants, conditions and restrictions, rights of
way, easements and other title matters, none of which, individually
or in the aggregate, materially interferes with or adversely affects
(i) the development or intended use of any Applicable Development or
any phase of construction thereof, in each case, when taken as a
whole, (ii) the related documents governing any Applicable
Development, (iii) the security intended to be provided by any
mortgage, including any Interval Mortgage or (iv) any Applicable
Underlying Loan Collateral, Applicable Underlying Loan Documents,
Applicable Underlying Purchase Documents, Applicable Underlying
Purchased Note Collateral, or the value thereof.
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"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture, government (or any agency or
political subdivision thereof) or other entity.
"Phase I Environmental Inspection" means a Phase I environmental
assessment of an Applicable Development, including, without limitation, the
relevant Land and all improvements thereto which is acceptable to the Agent in
its reasonable discretion.
"Pledge" means the pledge of any Receivable pursuant to Article II.
"Pledged Assets" has the meaning assigned to that term in Section
2.15.
"Pledged Consumer Note Receivable" means a Consumer Note Receivable
(including, without limitation, a Presale Consumer Note Receivable) with respect
to which an Applicable Underlying Borrower has granted to RFI a first priority
perfected security interest pursuant to the Applicable Underlying Loan
Documents, which security interest has then been sold by RFI to the Borrower
pursuant to the RFI/Borrower Receivables Purchase Agreement and which security
interest has then been pledged and remains pledged by the Borrower to the Agent
for the benefit of the Lender pursuant to this Agreement.
"Pledged Consumer Note Receivable File" means a file containing each
of the following items with respect to each Pledged Consumer Note Receivable:
(a) the related original, fully executed Pledged Consumer Note
Receivable;
(b) an original or a true and complete photocopy of the related,
fully executed agreement pursuant to which the related Consumer acquired
the related Interval;
(c) that was generated in connection with a Consumer's purchase of a
Right to Use Interval, unless contained in the related Pledged Developer
Note Receivable File, (i) within ninety (90) days of such Pledged Consumer
Note Receivable being Pledged hereunder, the related original, fully
executed Developer Mortgage and assignments thereof from RFI to the
Borrower and from the Borrower to the Agent together, in each case, with
evidence of the recordation thereof in the appropriate public records of
the Applicable Jurisdiction in accordance with all Applicable Laws or (ii)
an original or a true and complete photocopy of one of the Opinions of
Counsel referred to in subparagraph (cc) of the definition of Eligible
Pledged Consumer Note Receivable (but only, in the case of an Existing
Pledged Consumer Note Receivable, if such Developer Mortgage or Opinions
of Counsel exists);
(d) that was generated in connection with a Consumer's purchase of a
Fee Simple Interval, within ninety (90) days of such Pledged Consumer Note
Receivable being Pledged hereunder (or, if such Pledged Consumer Note
Receivable is a Presale Consumer Note Receivable, within ninety (90) days
of the certificate of occupancy (or its
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equivalent in the Applicable Jurisdiction) having been obtained with
respect to the building containing the Unit related to such Interval) and
unless contained in the related Pledged Developer Note Receivable File,
the related original, fully executed Interval Mortgage and assignments
thereof from RFI to the Borrower and from the Borrower to the Agent
together, in each case, with evidence of the recordation thereof in the
appropriate public records of the Applicable Jurisdiction in accordance
with all Applicable Laws;
(e) unless contained in the related Pledged Developer Note
Receivable File, (i) within thirty (30) days of the receipt by the
Servicer of the Developer Mortgage referred to in paragraph (c) above or
the Interval Mortgage referred to in paragraph (d) above, an original or a
true and complete photocopy of the related, fully executed Title Policy,
if any, and (ii) at all times prior to the related, fully executed Title
Policy, if any, being included in the Pledged Consumer Note Receivable
File, a marked up title commitment, a pro forma title policy or an
endorsement of a title insurance commitment deleting standard exceptions
which, in each case, provides the same coverage as shall be provided by
such related, fully executed Title Policy, if any;
(f) an original or a true and complete photocopy of the related
truth-in-lending disclosure statements delivered to the related Consumer
(except with respect to Pledged Consumer Note Receivable related to
Developments not located in the United States);
(g) an original or a true and complete photocopy of, fully executed
credit/loan application delivered by the related Consumer; and
(h) the related original, fully executed Consumer Allonge.
"Pledged Developer Note Receivable" means a Developer Note
Receivable that has been and remains Pledged to the Agent, on behalf of the
Lender, by the Borrower, pursuant to the terms of this Agreement.
"Pledged Developer Note Receivable File" means a file containing
each of the following items with respect to each Pledged Developer Note
Receivable:
(a) the related original, fully executed Developer Note Receivable;
(b) the related original, fully executed Hypothecation Loan
Agreement;
(c) the related original, fully executed Developer Allonge;
(d) that was secured in whole or in part by Pledged Consumer Note
Receivables generated in connection with a Consumer's purchase of a Right
to Use Interval, (i) within ninety (90) days of such Pledged Developer
Note Receivable being
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Pledged hereunder, the related original, fully executed Developer Mortgage
and assignments thereof from RFI to the Borrower and from the Borrower to
the Agent together, in each case, with evidence of the recordation thereof
in the appropriate public records of the Applicable Jurisdiction in
accordance with all Applicable Laws or (ii) an original or a true and
complete photocopy of one of the Opinions of Counsel referred to in
subparagraph (aa) of the definition of Eligible Developer Note Receivable
(but only, in the case of an Existing Developer Note Receivable, if such
Developer Mortgage or Opinions of Counsel exists);
(e) that was secured in whole or in part by Pledged Consumer Note
Receivables generated in connection with a Consumer's purchase of a Fee
Simple Interval, the original, fully executed Interval Mortgage and
assignments thereof from RFI to the Borrower and from the Borrower to the
Agent (but only to the extent such items are not included in a related
Pledged Consumer Note Receivable File); provided, that, if such Pledged
Consumer Note Receivables are Presale Consumer Note Receivables, the
original, fully executed Interval Mortgage and assignments thereof from
RFI to the Borrower and from the Borrower to the Agent (but only to the
extent such items are not included in a related Pledged Consumer Note
Receivable File) shall be included in such file within ninety (90) days
after the certificate of occupancy (or its equivalent in the Applicable
Jurisdiction) having been obtained with respect to the building containing
the Unit related to such Interval);
(f) the related original Underlying Guaranty, if any;
(g) originals or true and complete photocopies of all other related
original Applicable Underlying Loan Documents; and
(h) (i) within thirty (30) days of the receipt by the Servicer of
the Developer Mortgage referred to in paragraph (d) above or any Interval
Mortgage referred to in paragraph (e) above, an original or a true and
complete photocopy of the related, fully executed Title Policy or Title
Policies and (ii) at all times prior to the related, fully executed Title
Policy or Title Policies, if any, being included in the Pledged Developer
Note Receivable File, a marked up title commitment, a pro forma title
policy or an endorsement of a title insurance commitment deleting standard
exceptions which, in each case, provides the same coverage as shall be
provided by such related, fully executed Title Policy, if any (but only to
the extent such items are not included in a related Pledged Consumer Note
Receivable File and to the extent applicable).
"Pledged Purchased Consumer Note Receivable" means a Purchased
Consumer Note Receivable which has been sold by RFI or EFI to the Borrower
pursuant to the applicable Borrower Receivables Purchase Agreement and which has
then been pledged and remains pledged by the Borrower to the Agent for the
benefit of the Lender pursuant to this Agreement.
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"Pledged Purchased Consumer Note Receivable File" means a file
containing each of the following items with respect to each Pledged Purchased
Consumer Note Receivable:
(a) the related original, fully executed Consumer Note Receivable;
(b) unless contained in the related Eligible Developer Sale
Agreement File, the related original, fully executed Eligible Developer
Sale Agreement;
(c) an original or a true and complete photocopy of the related,
fully executed agreement pursuant to which the related Consumer acquired
the related Interval;
(d) that was generated in connection with a Consumer's purchase of a
Right to Use Interval, within ninety (90) days of such Pledged Purchased
Consumer Note Receivable being Pledged hereunder and unless contained in
the related Eligible Developer Sale Agreement File, the related original,
fully executed Developer Mortgage and assignments thereof from RFI to the
Borrower and from the Borrower to the Agent together, in each case, with
evidence of the recordation thereof in the appropriate public records of
the Applicable Jurisdiction in accordance with all Applicable Laws or (ii)
an original or a true and complete photocopy of one of the Opinions of
Counsel referred to in subparagraph (n) of the definition of Eligible
Purchased Consumer Note Receivable (but only, in the case of an Existing
Pledged Purchased Consumer Note Receivable, if such Interval Mortgage or
Opinions of Counsel exists);
(e) that was generated in connection with a Consumer's purchase of a
Fee Simple Interval, within ninety (90) days of such Pledged Purchased
Consumer Note Receivable being Pledged hereunder (or, if such Pledged
Purchased Consumer Note Receivable is a Presale Consumer Note Receivable,
within ninety (90) days of the certificate of occupancy (or its equivalent
in the Applicable Jurisdiction) having been obtained with respect to the
building containing the Unit related to such Interval) and unless
contained in the related Eligible Developer Sale Agreement File, the
related original, fully executed Interval Mortgage and assignments thereof
from RFI or EFI to the Borrower and from the Borrower to the Agent
together, in each case, with evidence of the recordation thereof in the
appropriate public records of the Applicable Jurisdiction in accordance
with all Applicable Laws;
(f) unless contained in the related Eligible Developer Sale
Agreement File, (i) within thirty (30) days of the receipt by the Servicer
of the Developer Mortgage referred to in paragraph (d) above or the
Interval Mortgage referred to in paragraph (e) above, an original or a
true and complete photocopy of the related, fully executed Title Policy
and (ii) at all times prior to the related, fully executed Title Policy,
if any, being included in the Pledged Consumer Note Receivable File, a
marked up title commitment, a pro forma title policy or an endorsement of
a title insurance commitment deleting standard exceptions which, in each
case, provides the same coverage as shall be provided by such related,
fully executed Title Policy, if any;
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(g) an original or a true and complete photocopy of the related
truth-in-lending disclosure statements delivered to the related Consumer
(except with respect to Pledged Purchased Consumer Note Receivable related
to Developments not located in the United States);
(h) an original or a true and complete photocopy of the fully
executed credit/loan application delivered by the related Consumer;
(i) the related original, fully executed Consumer Allonge, if
applicable; and
(j) unless contained in the related Eligible Developer Sale
Agreement File, the related original Underlying Guaranty, if any.
"Pledged Receivables" has the meaning assigned to that term in
Section 2.15(a).
"Presale Consumer Note Receivable" means a Consumer Note Receivable
which is originated with respect to an Interval sold by an Eligible Developer to
a Consumer related to a Unit in a building with respect to which a certificate
of occupancy has not yet been issued.
"Primary Level Eligible Receivable" means, at any time, an Eligible
Developer Note Receivable or an Eligible Purchased Consumer Note Receivable
"Prior Loan Facility" means the Loan and Security Agreement, dated
as of February 11, 1998, by and among RFI, Equivest and Credit Suisse First
Boston Mortgage Capital LLC, as amended, and/or the Receivables Loan and
Security Agreement, dated as of May 25, 1995, by and among BFICP Corporation,
Bennet Funding International, Ltd. Holland Limited Securitization, Inc. and
Internationale Nederlanden (U.S.) Capital Markets, Inc. as assigned to Credit
Suisse First Boston Mortgage Capital LLC pursuant to the Resort Funding, Inc.
Receivables Financing Facility Assignment, Release and Custodial Agreement dated
as of November 24, 1997.
"Purchase Date" has the meaning set forth in the applicable Borrower
Receivables Purchase Agreement.
"Purchase Price" means the total purchase price of an Interval, as
set forth in a Consumer's purchase contract, pursuant to which such Consumer
agrees to purchase and the Applicable Underlying Borrower or the Applicable
Underlying Seller agrees to sell such Interval.
"Purchased Consumer Note Receivable" means a Consumer Note
Receivable (including, without limitation, a Presale Consumer Note Receivable)
that was sold to RFI or EFI by an Applicable Underlying Seller pursuant to an
Eligible Developer Sale Agreement.
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"Purchased Rate Cap" has the meaning assigned thereto in the Sinking
Fund Agreement.
"Qualified Loan" means a full recourse receivables/hypothecation
loan made by RFI to an Eligible Developer pursuant to a Hypothecation Loan
Agreement in connection with an Eligible Development which satisfies the Credit
and Collection Policy in all material respects.
"Qualified Purchase" means a full recourse purchase of Eligible
Purchased Consumer Note Receivables or an Eligible Purchased Presale Consumer
Note Receivable made by RFI or EFI from an Eligible Developer pursuant to an
Eligible Developer Sale Agreement in connection with an Eligible Development
which satisfies the Credit and Collection Policy in all material respects.
"Rating Agencies" mean ▇▇▇▇▇'▇ and Fitch, if and so long as they
have rated and are continuing to rate commercial paper notes of the Lender at
any time that the Lender is an Issuer, or such other nationally recognized
statistical rating organizations as may be designated by the Agent.
"Receivable" means at any time, a Developer Note Receivable or a
Consumer Note Receivable.
"Receivable File" means an Eligible Developer Sale Agreement File, a
Pledged Developer Note Receivable File, a Pledged Consumer Note Receivable File
or a Pledged Purchased Consumer Note Receivable File as the context may require.
"Receivables Schedule" has the meaning assigned to that term in the
Custodial Agreement.
"Records" means all documents, books, records and other information
(including, without limitation, computer programs, tapes, disks, punch cards,
data processing software and related property and rights) maintained with
respect to Receivables and the related Obligors which the Borrower has itself
generated, in which the Borrower has acquired an interest pursuant to the
applicable Borrower Receivables Purchase Agreement or in which the Borrower has
otherwise obtained an interest.
"Related Security" means with respect to any Receivable:
(i) any and all security interests or liens and property subject
thereto (including, without limitation, the related Interval) from time to
time purporting to secure payment of such Receivable;
(ii) all guarantees, indemnities, warranties, letters of credit,
insurance policies and proceeds and premium refunds thereof and other
agreements or arrangements of
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whatever character from time to time supporting or securing payment of
such Receivable; and
(iii) all proceeds of the foregoing.
"Release Price" means with respect to a Pledged Receivable to be
released hereunder, an amount equal to the Outstanding Principal Balance of such
Pledged Receivable plus all accrued but unpaid interest and fees thereon.
"Remittance Date" means the fifteenth day of each month or, if such
date is not a Business Day, the next succeeding Business Day; provided, that the
final Remittance Date shall occur on the Collection Date.
"Remittance Period" means, (i) as to the initial Remittance Date,
the period beginning on the date of this Agreement and ending on the last day of
the calendar month in which such date shall occur (or such other dates as the
Agent and the Borrower may agree) and (ii) as to any subsequent Remittance Date,
the period beginning on the first day of the most recently ended calendar month
and ending on the last day of the most recently ended calendar month; provided,
that the final Remittance Period shall begin on the first day of the most
recently ended calendar month and shall end on the Collection Date.
"RFI" has the meaning assigned to that term in the preamble hereto.
"RFI/Borrower Receivables Purchase Agreement" means that certain
Purchase Agreement dated as of the date hereof between RFI, as seller, and the
Borrower, as purchaser, together with all instruments, documents and agreements
executed in connection therewith, as such Purchase Agreement may from time to
time be amended, restated, supplemented and/or otherwise modified in accordance
with the terms hereof.
"Right to Use Interval" means a lease, license, or other form of
"right-to-use" timeshare interest, together with all rights, benefits,
privileges, and interests appurtenant thereto, including but not limited to the
right to use and occupy a Unit within an Applicable Development and the Common
Elements, if any, and Common Furnishings, if any, appurtenant to such Unit
and/or the Applicable Development during a reserved or assigned use period, all
as more specifically described in the Applicable Declaration and/or other
Applicable Timeshare Documents. For purposes of this Agreement, Undelivered Deed
Intervals and Club Membership Right to Use Intervals shall be deemed to be Right
to Use Intervals.
"Sage" has the meaning assigned to that term in the preamble hereto.
"S&P" means Standard & Poor's Ratings Group, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. (or its successors in interest).
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"Servicer" means at any time the Person then authorized, pursuant to
Section 6.01, to service, administer and collect Pledged Receivables.
"Servicer Advance" has the meaning assigned to such term in Section
6.21.
"Servicer Default" means the occurrence of any of the following
events:
(i) the failure of the Servicer to deliver any payments, collections
or proceeds which it is obligated to deliver under the terms hereof or of
any other Transaction Document at the times it is obligated to make such
deliveries under the terms hereof or of any other Transaction Document and
such failure remains unremedied for three (3) Business Days;
(ii) the inability or failure of the Servicer to satisfy any of its
reporting, certification, notification or documentation requirements under
the terms hereof or of any other Transaction Document and such inability
or failure remains unremedied for fifteen (15) days;
(iii) the failure of the Servicer to observe or perform any covenant
under the terms hereof or of any other Transaction Document other than as
set forth in clauses (i) or (ii) above and which could reasonably be
expected to cause a Material Adverse Effect if such failure remains
unremedied for thirty (30) days; provided, however that if the Agent
determines in its reasonable discretion that such inability or failure
could be remedied during the thirty (30) day period following such initial
thirty (30) day period, the Agent may extend the period during which such
failure may be remedied for up to an additional thirty (30) days;
(iv) any representation, warranty or statement of the Servicer made
herein or in any other Transaction Document shall prove to be incorrect in
any material respect and remains incorrect for five (5) Business Days;
(v) the occurrence of an Early Amortization Event described in
clause (i), (ii) or (iii) of the definition of Early Amortization Events;
or
(vi) the occurrence of any Bankruptcy Event in respect of the
Servicer.
"Servicing Fee" means, for any Remittance Period, an amount, payable
out of Collections on the Pledged Receivables and amounts applied to the payment
of, or treated as payments on, the Pledged Receivables, equal to (i) the
Servicing Fee Rate multiplied by (ii) the Net Eligible Receivables Balance as of
the first day of such Remittance Period.
"Servicing Fee Rate" means with respect to the Pledged Receivables,
the per annum rate of 1.0%.
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"Servicing Officer" means any officer of the Servicer involved in,
or responsible for, the administration and servicing of the Pledged Receivables,
whose name appears on a list of servicing officers furnished to the Agent by the
Servicer, as such list may from time to time be amended.
"Sinking Fund Account" has the meaning assigned thereto in the
Sinking Fund Agreement.
"Sinking Fund Account Securities Account Agreement" means that
certain Securities Account Agreement related to the Sinking Fund Account dated
the date of this Agreement among the Borrower, the Servicer, the Agent's Bank
and the Agent, as such agreement may from time to time be amended, supplemented
or otherwise modified in accordance with the terms thereof.
"Sinking Fund Agreement" means that certain Sinking Fund Agreement
dated the date of this Agreement among the Borrower, RFI, the Agent's Bank and
the Agent, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Sinking Fund Collateral" has the meaning assigned thereto in the
Sinking Fund Agreement.
"SPE" has the meaning assigned to such term in sub-paragraph (aa) of
the definition of Eligible Developer Note Receivable.
"Specific Club Membership Right to Use Interval" means a Club
Membership Right to Use Interval with respect to which a Home Resort is
designated under the Applicable Timeshare Documents related thereto.
"State" means one of the fifty states of the United States or the
District of Columbia.
"Structuring Fee" has the meaning ascribed thereto in the Fee
Letter.
"Subordinated Notes" means the Subordinated Notes dated the date of
this Agreement by the Borrower to the order of each of RFI and EFI evidencing
the respective unpaid deferred purchase price owing by the Borrower to RFI and
EFI with respect to purchases from time to time of Receivables by the Borrower
from RFI and EFI pursuant to the Borrower Receivables Purchase Agreements (such
Subordinated Notes to be in form and substance satisfactory to the Agent), as
such Subordinated Notes may from time to time be amended, restated, supplemented
and/or otherwise modified in accordance with the terms hereof.
"Subsequent Borrowing" means a Borrowing which occurs on a
Subsequent Borrowing Date.
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"Subsequent Borrowing Date" means each Business Day occurring after
the initial Borrowing Date on which the Borrower determines to request an
additional Borrowing from the Lender.
"Survey" means an as-built survey of an Applicable Development
prepared in accordance with the ALTA/ACSM 1988 Minimum Survey Requirements, the
ALTA/ACSM 1992 Minimum Survey Requirements or the current such requirements, by
a licensed surveyor and certified by the applicable surveyor to the Applicable
Underlying Borrower.
"Surrey Development" means the Development generally referred to as
Surrey Grand Crowne located in Branson, Missouri.
"Take-Out Securitization" means a financing transaction undertaken
by the Borrower involving the direct or indirect sale or other conveyance of
Receivables related thereto to a Person that shall privately or publicly sell
securities, notes or certificates backed by such Receivables.
"Tangible Net Worth" means with respect to any Person, the amount
calculated in accordance with GAAP as (i) the consolidated net worth of such
Person and its consolidated subsidiaries, plus (ii) to the extent not otherwise
included in such consolidated net worth, unsecured subordinated Debt of such
Person and its consolidated subsidiaries the terms and conditions of which are
reasonably satisfactory to the Agent, minus (iii) the consolidated intangibles
of such Person and its consolidated subsidiaries, including, without limitation,
goodwill, trademarks, tradenames, copyrights, patents, patent allocations,
licenses and rights in any of the foregoing and other items treated as
intangibles in accordance with GAAP.
"Title Insurance Company" has the meaning assigned to such term in
Section 3.02(k)(ii).
"Title Policy" means a Developer Title Policy or an Interval Title
Policy.
"Transaction Documents" means this Agreement, the Borrower
Receivables Purchase Agreements, the Lockbox Agreement, the Fee Letter, the
Custodial Agreement, the Subordinated Notes the Sinking Fund Account Securities
Account Agreement, the Collection Account Securities Account Agreement and the
Sinking Fund Agreement and each document and instrument related to any of the
foregoing.
"UCC" means the Uniform Commercial Code as from time to time in
effect in the specified jurisdiction.
"Undelivered Deed Interval" means an Interval with respect to which
deeds are not delivered to the related Consumer until such Consumer has made all
required payments under an installment sale contract, contract for deed or
similar arrangement.
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"Underlying Guaranty" means a document or instrument executed by an
Applicable Underlying Guarantor and delivered to the Borrower, pursuant to which
one (1) or more Persons guarantees (a) the absolute and unconditional payment
and performance of the Applicable Underlying Loan and all amounts secured by or
under the Applicable Underlying Loan Documents or (b) the absolute and
unconditional performance of the obligations of an Applicable Underlying Seller
under an Eligible Developer Sale Agreement.
"Unit" means an apartment, condominium unit, or other structure that
is affixed to real property at an Applicable Development and designed and
available, pursuant to applicable law, for use and occupancy as a vacation
residence by one (1) or more individuals, together with all related Common
Elements, if any, and Common Furnishings, if any, easements, and other
appurtenances thereto.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"Unmatured Event of Default" means any event that, if it continues
uncured, will, with lapse of time or notice or lapse of time and notice,
constitute an Event of Default.
"Weighted Average APR" means at any time an amount equal to the
weighted average (weighted solely based on the Outstanding Principal Balances of
the Eligible Purchased Consumer Note Receivables and the Eligible Developer Note
Receivables at such time) Coupon Rates set forth in the Pledged Purchased
Consumer Note Receivable or the Hypothecation Loan Agreement related to the
Eligible Purchased Consumer Note Receivables and the Eligible Developer Note
Receivables at such time.
"Year 2000 Compliant" has the meaning specified in Section 4.01(aa).
"Year 2000 Problem" has the meaning specified in Section 4.01(aa).
"Yield" means with respect to any Fixed Period for any Loan
allocated to such Fixed Period, the product of:
YR x L x ED
---
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where: YR = the Yield Rate for such Fixed Period;
L = the principal amount of Loans Outstanding allocated to
such Fixed Period; and
ED = the actual number of days elapsed during such Fixed
Period;
provided, however, that (i) no provision of this Agreement shall require the
payment or permit the collection of Yield in excess of the maximum permitted by
applicable law and (ii) Yield shall
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not be considered paid by any distribution if at any time such distribution is
required to be rescinded by the Lender to the Borrower or any other Person for
any reason including, without limitation, such distribution becoming void or
otherwise avoidable under any statutory provision or common law or equitable
action, including, without limitation, any provision of the Bankruptcy Code.
"Yield Rate" means with respect to any Fixed Period for any Loan
allocated to such Fixed Period:
(i) to the extent the Lender will be funding the applicable Loan on
the first day of such Fixed Period through the issuance of commercial
paper, a rate equal to the CP Rate for such Fixed Period; and
(ii) to the extent the Lender will not be funding the applicable Loan
through the issuance of commercial paper, (x) a rate equal to the Non-CP
Rate for such Fixed Period or (y) such other rate as the Agent and the
Borrower shall agree to in writing.
SECTION 1.02 Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. All terms used in
Article 9 of the UCC in the State of New York, and not specifically defined
herein, are used herein as defined in such Article 9.
SECTION 1.03 Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding."
ARTICLE II.
THE RECEIVABLES FACILITY
SECTION 2.01 Borrowings. On the terms and conditions hereinafter set
forth, the Lender shall make loans ("Loans") to the Borrower secured by Pledged
Assets from time to time during the period from the date hereof until the
earlier of the Early Amortization Commencement Date or the Facility Maturity
Date. Under no circumstances shall the Lender make any Loan if, after giving
effect to the Borrowing of such Loan, either (a) an Early Amortization Event or
an event that but for notice or lapse of time or both would constitute an Early
Amortization Event has occurred and is continuing or (b) the aggregate Facility
Amount hereunder would exceed the lesser of (i) the Borrowing Limit minus the
Discount Amount and (ii) the Capital Limit. Under no circumstances shall the
Lender make any Loan if, after giving effect to the Borrowing of such Loan, the
aggregate face amount of all commercial paper issued by the Lender to fund Loans
hereunder exceeds the Borrowing Limit.
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SECTION 2.02 The Initial Borrowing and Subsequent Borrowings. (a)
Until the occurrence of the earlier of the Early Amortization Commencement Date
and the Facility Maturity Date, the Lender will make Loans on any Business Day
(but not more than once on any Business Day) at the request of the Borrower,
subject to and in accordance with the terms and conditions of Sections 2.01 and
2.02 and subject to the provisions of Article III hereof. After the Collection
Date has occurred, the Lender and the Agent, in accordance with their respective
interests, shall re-assign and transfer to the Borrower, for no consideration
but at the sole expense of the Borrower, their respective remaining interests in
the Pledged Assets, free and clear of any Adverse Claim resulting solely from an
act by the Lender or the Agent, but without any other representation or
warranty, express or implied, by or recourse against the Lender or the Agent.
(b) (i) The initial Borrowing and each Subsequent Borrowing shall be
made on at least two Business Day's irrevocable written notice from the Borrower
to the Agent (any such written notice, a "Notice of Borrowing"), provided that
such Notice of Borrowing is received by the Agent no later than 1:00 P.M. (New
York City time) on the Business Day of receipt. Each such Notice of Borrowing
shall specify (A) the aggregate amount of such Borrowing, which shall be in an
amount equal to or greater than $500,000, (B) the date of such Borrowing, (C)
the requested Fixed Period(s) for such Borrowing and the allocations of Loans to
each such requested Fixed Period and (D) the Eligible Receivables to be Pledged
in connection with such Borrowing (and upon such Borrowing, such Receivables
shall be Pledged Receivables hereunder). The Agent shall notify the Borrower
whether the duration of the Fixed Period(s) described in such Notice of
Borrowing is acceptable or, if not acceptable, the Agent shall advise the
Borrower of such Fixed Period(s) as may be acceptable. On the date of each
Borrowing, the Lender shall, upon satisfaction of the applicable conditions set
forth in Article III, make available to the Borrower on the applicable Borrowing
Date no later than 4:00 P.M. (New York City time) in same day funds, the amount
of such Borrowing (net of amounts payable to or for the benefit of the Lender)
by payment into the account which the Borrower has designated in writing.
(ii) The Notice of Borrowing for each Borrowing delivered to
the Agent pursuant to this Section 2.02(b) shall be accompanied by a copy of the
Notice of Pledge (and the Receivables Schedule attached thereto) which was sent
to the Custodian pursuant to the terms of the Custodial Agreement in connection
with the pledge of Eligible Receivables to be made in connection therewith.
(c) The Loans shall bear interest at the Yield Rate.
(d) Subject to Section 2.20 and the other terms, conditions,
provisions and limitations set forth herein, the Borrower may borrow, repay or
prepay and reborrow Loans, on and after the date hereof and prior to the earlier
to occur of the Facility Maturity Date and the Early Amortization Commencement
Date.
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(e) Determinations by the Lender of the existence of any CP
Disruption Event, or of the effect of any CP Disruption Event on its making or
maintaining Loans at the CP Eurodollar Rate, shall be conclusive absent manifest
error.
(f) Determinations by the Lender of the existence of any Eurodollar
Disruption Event, or of the effect of any Eurodollar Disruption Event on its
making or maintaining Loans at the Adjusted Eurodollar Rate, shall be conclusive
absent manifest error.
(g) Only one Borrowing shall be permitted on any Business Day.
SECTION 2.03 Facility Maturity Date. Any Loans outstanding on the
Facility Maturity Date shall mature on such date. Notwithstanding any other
provision hereof, on the Facility Maturity Date, the outstanding principal of
all outstanding Loans, if any, and all Yield and all Fees accrued thereon and
all other Obligations shall be immediately due and payable (and the Borrower
shall pay all such amounts immediately).
SECTION 2.04 Selection of Fixed Periods. (a) At all times until the
earlier to occur of the Early Amortization Commencement Date and the Facility
Maturity Date, the Borrower shall, subject to the Agent's and the Lender's
approval and the limitations described below, request Fixed Periods and
allocations of a portion of the outstanding Loans to each selected Fixed Period,
so that all such outstanding Loans are at all times allocated to one or more
Fixed Periods. Subject to Section 2.04(c), the Yield Rate to apply to all Loans
outstanding shall be the CP Rate. The requested initial Fixed Period applicable
to any new Loan arising as a result of a Borrowing shall be requested in the
Notice of Borrowing which shall be delivered in connection with the applicable
Subsequent Borrowing. Subject to the next sentence of this Section 2.04, each CP
Rollover Fixed Period shall commence on the last day of the immediately
preceding Fixed Period, and the duration of such CP Rollover Fixed Period shall
be such as the Borrower shall request in a Commercial Paper Remittance Report
and the Agent shall approve; provided that such Commercial Paper Remittance
Report was received by the Agent not later than 12:30 P.M. (New York City time)
on a day at least one Business Day prior to such last day, except that if the
Agent shall not have received such report before 12:30 P.M. on such day or the
Agent and the Borrower shall not have so mutually agreed before 2:00 P.M. (New
York City time) on such day, such CP Rollover Fixed Period shall be one day and
the applicable Yield Rate shall be the CP Rate; provided that, notwithstanding
the foregoing, upon the occurrence of any Early Amortization Event, the
applicable Yield Rate for all Fixed Periods in effect at the time of such
occurrence shall convert to, and for all Fixed Periods that come into effect
thereafter (but prior to the occurrence of any Event of Default) shall be, the
Early Amortization Funding Rate and provided further that, notwithstanding the
foregoing, upon the occurrence and during the continuance of any Event of
Default, the Lender shall cease to issue commercial paper notes to fund and
maintain Loans hereunder and the applicable Yield Rate for all Fixed Periods in
effect at the time of such occurrence shall convert to, and for all Fixed
Periods that come into effect during the continuance of any Event of Default
shall be, the Default Funding Rate. Any Fixed Period (other than a Fixed Period
with respect to Loans which accrue Yield at the Non-CP Rate) which would
otherwise end on a day which is not a Business Day shall be extended to the next
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succeeding Business Day. Any Fixed Period which commences before the Early
Amortization Commencement Date and would otherwise end on a date occurring after
the Early Amortization Commencement Date shall end on the Early Amortization
Commencement Date. On and after the Early Amortization Commencement Date, the
Agent shall have the right to allocate outstanding Loans, if any, to Fixed
Periods of such duration as shall be selected by the Agent. The Lender shall, on
the first day of each Fixed Period with respect to Loans which accrue Yield at
the CP Rate, notify the Agent of the Yield Rate for such Loans.
(b) References herein to Loans which accrue Yield at the Non-CP Rate
being allocated to a Fixed Period shall mean all such Loans that are outstanding
during such Fixed Period or a portion thereof.
(c) So long as no Event of Default or Early Amortization Event or
event or circumstance which, with the giving of notice or the passage of time,
or both, would constitute an Event of Default or Early Amortization Event shall
have occurred and be continuing, each of the Lender and the Agent shall make
reasonable efforts to allow Loans to accrue Yield at the CP Rate; provided that
neither the Lender nor the Agent shall have any obligation to allow Loans to
accrue Yield at the CP Rate upon the occurrence of a CP Disruption Event.
SECTION 2.05 Remittance Procedures. The Servicer, as agent for the
Agent and the Lender, shall instruct the Agent's Bank, and the Agent may
instruct the Agent's Bank, to apply funds on deposit in the Collection Account
as described in this Section 2.05.
(a) Yield and Liquidation Fees. On each Business Day (including any
Remittance Date), the Servicer shall, and the Agent may, direct the Agent's Bank
to set aside in the Collection Account for transfer at the further direction of
the Lender or the Agent or any other duly authorized agent of the Lender
(whether on such day or on a subsequent day) collected funds in an amount equal
to Yield through such day on the Loans not so previously set aside and the
amount of any unpaid Liquidation Fees owed to the Lender on such day. On the
last day of each Fixed Period, the Agent shall notify the Servicer of, and
direct the Agent's Bank to pay, such collected funds set aside in respect of
Yield pursuant to this Section 2.05(a) to the Lender (or the designee of the
Lender) in respect of payment of accrued Yield for such Fixed Period; provided,
however, that (i) in the case of any Loan accruing Yield at the CP Rate, the
portion of such Yield attributable to the Applicable Margin, and (ii) in the
case of any Loan accruing Yield at the Non-CP Rate, all such Yield, shall remain
set aside in the Collection Account until the next Remittance Date and, at which
time, shall be disbursed pursuant to Section 2.05(c). On any Business Day on
which an amount is set aside in respect of Liquidation Fees pursuant to this
Section 2.05(a), the Agent shall direct the Agent's Bank to pay such funds to
the Lender in payment of such Liquidation Fees.
(b) Fixed Period Loan Principal Repayment. The Servicer shall, and
the Agent may, on the last day of each Fixed Period that is not a Remittance
Date, direct the Agent's Bank to transfer collected funds held by the Agent's
Bank in the Collection Account on such date, to pay the Agent for the account of
the Lender in payment of the outstanding principal
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amount of all Loans allocated to such Fixed Period, an amount equal to the
lesser of (i) the amount of such collected funds held in the Collection Account
or (ii) the aggregate outstanding principal amount of Loans allocated to such
Fixed Period or, if no Early Amortization Event shall have occurred and be
continuing, if lower, an amount equal to the excess, if any, of the aggregate
outstanding principal amount of Loans immediately prior to such distribution
over the Capital Limit (after giving effect to any Borrowing made on such date
and any distributions of amounts on deposit in the Collection Account made on
such date).
(c) Remittance Date Transfers from Collection Account. The Servicer
shall and the Agent may, on each Remittance Date, direct the Agent's Bank to
transfer collected funds held by the Agent's Bank in the Collection Account (in
excess of the aggregate amounts (except amounts described in clauses (B) and (C)
of sub-paragraph (i) below) set aside and/or paid on such Remittance Date
pursuant to Section 2.05(a)), in the following amounts and priority:
(i) to the Agent for the account of the Lender in an amount
equal to (and for the pro rata payment of) (A) the Fees which are due and
payable on such Remittance Date pursuant to the terms of the Fee Letter,
(B) any Yield on any Loan accruing Yield at the CP Rate which is
attributable to the Applicable Margin and which is accrued and unpaid as
of the last day of the preceding month and (C) any Yield on any Loan
accruing Yield at the Non-CP Rate which is accrued and unpaid as of the
last day of the preceding month;
(ii) at any time after the occurrence of a Servicer Default
and the appointment of the Backup Servicer as the Servicer hereunder, to
the Backup Servicer in an amount equal to the Backup Servicer's Fees which
are accrued and unpaid as of the last day of the preceding month;
(iii) to the Custodian in an amount equal to the Custodian's
Fees which are accrued and unpaid as of the last day of the preceding
month (and expenses of the Custodian which are reimbursable under the
terms of the Custodial Agreement and are unpaid as of the last day of the
preceding month);
(iv) to the Agent for the account of the Lender in an amount
equal to the aggregate amount of all other obligations of the Borrower
then due to the Lender, the Agent or any Affected Party hereunder (other
than those specified in clauses (v) and (x) below);
(v) to the Agent for the account of the Lender in an amount
equal to the Borrowing Base Deficiency (if any) as of such Remittance
Date;
(vi) to the Sinking Fund Account in the amount of any
Additional Deposit required pursuant to Section 2.1(d) of the Sinking Fund
Account Agreement;
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(vii) without limiting the obligation of the Borrower under
the Sinking Fund Agreement, to the Agent for the account of the Agent in
an amount equal to (and for repayment of) any funds expended by the Agent
to purchase any Purchased Rate Caps which the Borrower failed to purchase
in breach of its obligation to do so under the terms of the Sinking Fund
Agreement;
(viii) without limiting the obligation of the Borrower under
the Sinking Fund Agreement and at the election of the Agent, to the
applicable counterparty (as set forth in the Sinking Fund Agreement) in an
amount equal to (and for payment of) any Purchased Rate Caps which the
Borrower failed to purchase in breach of its obligation to do so under the
terms of the Sinking Fund Agreement;
(ix) to the Servicer (if the Servicer is RFI or any Affiliate
thereof) in an amount equal to the Servicing Fee which is accrued and
unpaid as the last day of the preceding month plus any Servicer Advances
not previously reimbursed to the Servicer;
(x) on or after the occurrence of the Early Amortization
Commencement Date, to the Agent for the account of the Lender for the
repayment of Loans outstanding in an amount equal to the lesser of (i) all
remaining funds in the Collection Account and (ii) an amount necessary to
repay the outstanding principal amount of all Loans in full; and
(xi) to the Borrower, any remaining amounts.
Upon its receipt of funds pursuant to clauses (i), (iv), (v) and (x), the Agent
shall apply such funds as directed by the Lender or as otherwise provided in
this Agreement.
(d) Transfers from Collection Account Related to the Sinking Fund
Agreement. The Servicer shall, and if the Servicer fails to do so the Agent may,
on any Borrowing Date, direct the Agent's Bank to transfer collected funds held
by the Agent's Bank in the Collection Account in the following amounts and
priority:
(i) to the Sinking Fund Account in the amount of any
Additional Deposit required pursuant to Section 2.1(d) of the Sinking Fund
Account Agreement;
(ii) without limiting the obligation of the Borrower under the
Sinking Fund Agreement, to the Agent for the account of the Agent in an
amount equal to (and for repayment of) any funds expended by the Agent to
purchase any Purchased Rate Caps which the Borrower failed to purchase
notwithstanding its obligation to do so under the terms of the Sinking
Fund Agreement; and
(iii) without limiting the obligation of the Borrower under
the Sinking Fund Agreement and at the election of the Agent, to the
applicable counterparty (as set forth in the Sinking Fund Agreement) in an
amount equal to (and for payment of) any
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Purchased Rate Caps which the Borrower failed to purchase notwithstanding
its obligation to do so under the terms of the Sinking Fund Agreement.
(e) [Intentionally omitted].
(f) Borrower Deficiency Payments. Notwithstanding anything to the
contrary contained in this Section 2.05 or in any other provision in this
Agreement, if, on any day prior to the Collection Date, the Facility Amount
shall exceed the lesser of (i) the Borrowing Limit minus the Discount Amount and
(ii) the Capital Limit, then the Borrower shall remit to the Agent, prior to any
Borrowing and in any event no later than the close of business of the Agent on
such day (or if such day is not a Business Day, no later than the close of
business of the Agent on the next succeeding Business Day), a payment (to be
applied by the Agent to either fund the Spread Account or repay Loans selected
by the Agent, in its sole discretion) in such amount as may be necessary to
reduce the Facility Amount to an amount less than or equal to the lesser of (x)
the Borrowing Limit minus the Discount Amount and (y) the Capital Limit.
(g) Instructions to the Agent's Bank. All instructions and
directions given to the Agent's Bank by the Servicer or the Agent pursuant to
this Section 2.05 shall be in writing (including instructions and directions
transmitted to the Agent's Bank by telecopy) and such written instructions and
directions shall be delivered with a written certification that such
instructions and directions are in compliance with the provisions of this
Section 2.05. A copy of all instructions and directions given to the Agent's
Bank by the Servicer pursuant to this Section 2.05, shall be immediately
transmitted to the Agent by telecopy. A copy of all instructions and directions
given to the Agent's Bank by the Agent pursuant to this Section 2.05, shall be
immediately transmitted to the Servicer and the Borrower by telecopy.
SECTION 2.06 [Intentionally omitted].
SECTION 2.07 [Intentionally omitted].
SECTION 2.08 [Intentionally omitted].
SECTION 2.09 [Intentionally omitted].
SECTION 2.10 [Intentionally omitted].
SECTION 2.11 Payments and Computations, Etc. (a) All amounts to be
paid or deposited by the Borrower or the Servicer hereunder shall be paid or
deposited in accordance with the terms hereof no later than 1:00 P.M. (New York
City time) on the day when due in lawful money of the United States in
immediately available funds to the Collection Account or such other account as
is designated by the Lender. The Borrower shall, to the extent permitted by law,
pay to the Agent interest on all amounts not paid or deposited when due
hereunder (whether owing by the Borrower or the Servicer) at the Non-CP Rate
plus 2.00%, payable on demand; provided, however, that such interest rate shall
not at any time exceed the
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maximum rate permitted by applicable law. Such interest shall be for the account
of, and distributed by the Agent to, the Lender. Any Obligation hereunder shall
not be reduced by any distribution of any portion of Collections if at any time
such distribution is rescinded or returned by the Lender to the Borrower or any
other Person for any reason. All computations of interest and all computations
of Yield, Liquidation Fee and other fees hereunder (including, without
limitation, the Fees, the Backup Servicer's Fee and the Servicing Fee) shall be
made on the basis of a year of 360 days for the actual number of days (including
the first but excluding the last day) elapsed.
(b) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of Yield, interest or any fee payable hereunder, as the
case may be.
(c) If any Borrowing requested by the Borrower and approved by the
Lender and the Agent pursuant to Section 2.02 or any selection of any Fixed
Period requested by the Borrower and approved by the Agent pursuant to Section
2.04 is not for any reason whatsoever, except as a result of the gross
negligence or wilful misconduct of the Lender and/or the Agent, made or
effectuated, as the case may be, on the date specified therefor, the Borrower
shall indemnify the Lender against any loss, cost or expense incurred by the
Lender (other than any such loss, cost or expense solely due to the gross
negligence or willful misconduct of the Lender or the Agent), including, without
limitation, any loss (including cost of funds and out-of-pocket expenses), cost
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by the Lender to fund Loans or maintain Loans during such
Fixed Period.
SECTION 2.12 Fees. (a) The Borrower shall pay the Lender (either
directly or through the Agent) certain fees (the "Fees") in the amounts and on
the dates set forth in a fee letter (the "Fee Letter"), dated the date hereof,
among RFI, the Borrower, the Agent, and the Lender.
(b) All of the Fees payable pursuant to this Section 2.12 shall be
payable solely from amounts available for application pursuant to, and subject
to the priority of payment set forth in, Section 2.05.
SECTION 2.13 Increased Costs; Capital Adequacy. (a) If, due to
either (i) the introduction of or any change (including, without limitation, any
change by way of imposition or increase of reserve requirements) in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to the Agent, the Lender, or any Affiliate, successor or assign thereof
(each of which shall be an "Affected Party") of agreeing to make or making,
funding or maintaining any Loan, as the case may be, the Borrower shall, from
time to time, upon written demand by such Affected Party (with a copy to the
Agent), immediately pay to such Affected Party (as a third party beneficiary,
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in the case of an Affected Party that is not also the Lender hereunder),
additional amounts sufficient to compensate such Affected Party for such
increased costs.
(b) If either (i) the introduction of or any change in or in the
interpretation of any law, guideline, rule or regulation, directive or request
or (ii) the compliance by any Affected Party with any law, guideline, rule,
regulation, directive or request from any central bank or other governmental
authority or agency (whether or not having the force of law), including, without
limitation, compliance by an Affected Party with any request or directive
regarding capital adequacy, has or would have the effect of reducing the rate of
return on the capital of any Affected Party as a consequence of its obligations
hereunder or arising in connection herewith to a level below that which any such
Affected Party could have achieved but for such introduction, change or
compliance (taking into consideration the policies of such Affected Party with
respect to capital adequacy) by an amount deemed by such Affected Party to be
material, then from time to time, within ten days after demand by such Affected
Party (which demand shall be accompanied by a statement setting forth the basis
of such demand), such Affected Party shall be paid (from Collections pursuant
to, and subject to the priority of payment set forth in, Section 2.05) such
additional amounts as will compensate such Affected Party for such reduction.
(c) In determining any amount provided for in this Section 2.13, the
Affected Party may use any reasonable averaging and attribution methods. Any
Affected Party making a claim under this Section 2.13 shall submit to the
Borrower a certificate setting forth in reasonable detail the computations of
such additional or increased costs, which certificate shall be conclusive absent
demonstrable error.
(d) If, as a result of any event or circumstance similar to those
described in Section 2.13(a) or 2.13(b), any Affected Party (that is an Issuer)
is required to compensate a bank or other financial institution providing
liquidity support, credit enhancement or other similar support to such Affected
Party in connection with this Agreement, then, upon demand by such Affected
Party, the Borrower shall pay to such Affected Party such additional amount or
amounts as may be necessary to reimburse such Affected Party for any amounts
paid by it.
(e) If, as a result of any event or circumstance described in this
Section 2.13, any Affected Party requests and receives compensation and the
Borrower's payment of such compensation increases the effective lending rate
hereunder to greater than fifty basis points per annum in excess of the lending
rate which otherwise would have been in effect hereunder, the Borrower may
terminate this Agreement upon five (5) Business Days notice to the Agent;
provided, that no such termination shall be effective until the Borrower shall
have repaid in full all Obligations.
SECTION 2.14 Collateral Assignment of Agreements; Rights of Lender
Regarding Pledged Consumer Note Receivables. (a) The Borrower hereby
collaterally assigns to the Agent, for the benefit of the Lender, all of the
Borrower's right, title and interest in, to and under the Borrower Receivables
Purchase Agreements and all Contracts, all Assignment
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Documents, all Applicable Underlying Loan Documents, all Applicable Underlying
Purchase Documents, all Pledged Purchased Consumer Note Receivables, all Pledged
Developer Note Receivables, all Pledged Consumer Note Receivables, all
Underlying Guaranties, all Interval Mortgages, all Developer Mortgages, all
Hypothecation Loan Agreements, all Eligible Developer Sale Agreements and all
Title Policies related to any Pledged Receivable, all other agreements,
documents and instruments comprising Collateral, Applicable Underlying Loan
Collateral or Applicable Underlying Purchased Note Collateral and all other
agreements, documents and instruments evidencing, securing or guarantying any
Pledged Receivable and all other agreements, documents and instruments related
to any of the foregoing (the "Assigned Documents"). The Borrower confirms and
agrees that the Agent (or any designee thereof) shall have, following an Event
of Default or an Early Amortization Event, the sole right to enforce the
Borrower's rights and remedies under each Assigned Document, but without any
obligation on the part of the Agent, the Lender or any of their respective
Affiliates to perform any of the obligations of the Borrower under any such
Assigned Document. In addition, each of the Servicer and the Borrower confirms
and agrees that the Servicer or the Borrower will send to the Agent a notice of
(i) any breach of any representation, warranty, agreement or covenant under any
such Assigned Document or (ii) any event or occurrence that, upon notice to RFI
or EFI, or upon the passage of time or both, would constitute such a breach. The
Borrower further confirms and agrees that such assignment to the Agent shall
terminate upon the Collection Date.
(b) The Lender shall have a continuing first priority Lien and
security interest in and to all of the Pledged Consumer Note Receivables
(including, without limitation, Eligible Pledged Presale Consumer Note
Receivables) (by virtue of the above collateral assignment to the Lender of all
of the Borrower's right, title, and interest thereto) as well as in the Eligible
Purchased Consumer Note Receivables, Eligible Purchased Presale Consumer Note
Receivables and Eligible Developer Note Receivables, and may collect and shall
receive (and the Servicer shall take all steps necessary to ensure that the
Lender shall receive) all payments made under or in respect of all Pledged
Consumer Note Receivables (including, without limitation, Eligible Pledged
Presale Consumer Note Receivables)(by virtue of the above collateral assignment
to Lender of all of Borrowers right, title, and interest thereto), the Eligible
Purchased Consumer Note Receivables, Eligible Purchased Presale Consumer Note
Receivables and Eligible Developer Note Receivables, including Eligible Pledged
Consumer Note Receivables, Eligible Purchased Consumer Note Receivables,
Eligible Purchased Presale Consumer Note Receivables and Eligible Developer Note
Receivables that may become ineligible, until any of the same are released by
the Lender, if at all, pursuant to the terms hereof.
(c) It is hereby acknowledged and agreed by the parties hereto that
the obligation to fund future loans to the related Applicable Underlying
Borrower under each Pledged Developer Note Receivables has been retained by RFI
and, as such, the Borrower's collateral assignment to the Agent, for the benefit
of the Lender, of all of the Borrower's right, title and interest in, to and
under any of its Pledged Developer Note Receivables, is a collateral assignment
of the Borrower's right, title and interest in, to and under such Pledged
Developer Note Receivable to the extent of loans funded and outstanding under
such Pledged Developer Note Receivable including, without limitation, all of the
Borrower's right, title and interest with
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respect to the related Applicable Underlying Borrower's obligation to make
payments of principal, interest and fees with respect to such funded loans and
all of the Borrower's right, title and interest in, to and under all related
Applicable Underlying Loan Documents and all related Applicable Underlying Loan
Collateral and any other rights related to such Pledged Developer Note
Receivable.
SECTION 2.15 Grant of a Security Interest. To secure the prompt and
complete payment when due of the Obligations and the performance by the Borrower
of all of the covenants and obligations to be performed by it pursuant to this
Agreement, the Borrower hereby collaterally assigns and pledges to the Agent, on
behalf of the Lender (and its successors and assigns) and grants to the Agent,
on behalf of the Lender (and its successors and assigns), a security interest in
all of the Borrower's right, title and interest in, to and under all of the
following property and interests in property (collectively, the "Pledged
Assets"), whether tangible or intangible and whether now owned or existing or
hereafter arising or acquired and wheresoever located:
(a) all Receivables purchased by (or purportedly purchased by) the
Borrower under either of the Borrower Receivables Purchase Agreements
(collectively, the "Pledged Receivables"), together with all Collateral
and all Related Security related to the Pledged Receivables, all
Collections and other monies due and to become due to the Borrower in
respect of any Pledged Receivable and any security therefor received on or
after the date such Pledged Receivables were purchased by (or purportedly
purchased by) the Borrower under either of the Borrower Receivables
Purchase Agreements;
(b) the Assigned Documents, including in each case, without
limitation, all monies due and to become due to the Borrower under or in
connection therewith, and all legal opinions delivered or rendered in
connection with any item included in clause (a) above or this clause (b)
or any transaction related to any of the foregoing;
(c) the Lockbox, the Lockbox Account, the Collection Account, the
Sinking Fund Account, and all other bank and similar accounts relating to
the collection of Pledged Receivables (whether now existing or hereafter
established) and all funds held therein or in such other accounts, and all
investments in and all income from the investment of such funds in the
Lockbox Account (if any), the Collection Account, the Sinking Fund
Account, and such other accounts;
(d) the Records relating to any Pledged Receivables;
(e) all UCC financing statements filed by the Borrower against RFI
or EFI under or in connection with either of the Borrower Receivables
Purchase Agreements;
(f) the Sinking Fund Agreement;
(g) all Purchased Rate Caps;
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(h) all Liquidation Proceeds relating to any Pledged Receivables;
(i) all Environmental Reports and similar environmental reports
certified or assigned to the Borrower which are related to Pledged
Receivables; and
(j) all proceeds of the foregoing property described in clauses (a)
through (i) above, including interest, dividends, cash, instruments 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 or
other disposition of any or all of the then existing Pledged Receivables.
SECTION 2.16 Evidence of Debt. The Lender shall maintain an account
or accounts evidencing the indebtedness of the Borrower to the Lender resulting
from each Loan owing to the Lender from time to time, including the amounts of
principal and interest payable and paid to the Lender from time to time
hereunder. The entries made in such account(s) of the Lender shall be conclusive
and binding for all purposes, absent manifest error.
SECTION 2.17 Survival of Representations and Warranties; Repayment
Obligations. (a) It is understood and agreed that the representations and
warranties set forth in Section 4.01 are made on the date of this Agreement, at
the time of the initial Borrowing, and on each Subsequent Borrowing Date and
Remittance Date thereafter. If, as a result of the breach of any of the
representations and warranties in Section 4.01 or for any other reason there
exists or would exist a Borrowing Base Deficiency, the Borrower shall promptly
(and, in any case, within one Business Day) prepay to the Agent, for the account
of the Lender, the portion of the Loans as is necessary to cure such Borrowing
Base Deficiency. The Borrower shall promptly reimburse the Agent and the Lender
for any reasonable out-of-pocket expenses incurred by the Agent and the Lender,
respectively, in respect of any such prepayment including, without limitation,
Liquidation Fees.
SECTION 2.18 Release of Pledged Receivables. (a) In connection with
the consummation of any Take-Out Securitization, any pay off by the related
Obligor or liquidation by the Servicer of any Receivable or Pledged Consumer
Note Receivable, or any required repurchase by REF or EFI of Pledged Receivables
or Pledged Consumer Note Receivables pursuant to either of the Borrower
Receivables Purchase Agreements, the Borrower shall be entitled to obtain the
release of any Pledged Receivable subject to any such transaction, pay off,
liquidation or repurchase at any time after the date hereof by depositing into
an account designated by the Agent the Release Price therefor on any Remittance
Date and upon such deposit the Agent shall execute and deliver, within a
reasonable period of time and at the sole expense of the Borrower, such
documents as the Borrower determines in its reasonable discretion to be
necessary to effect such release; provided, that the foregoing release shall
only be available if, after giving effect thereto and the application of the
proceeds thereof in accordance with the terms hereof, there shall not be a
Borrowing Base Deficiency or Early Amortization Event.
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(b) The Borrower shall notify the Agent of any Release Price to be
paid pursuant to this Section 2.18 on the Business Day on which such Release
Price shall be paid specifying the Pledged Receivables to be released and the
Release Price.
SECTION 2.19 Treatment of Amounts Paid by the Borrower. Amounts paid
by the Borrower pursuant to Section 2.18 on account of Pledged Receivables shall
be treated as payments on Pledged Receivables hereunder.
SECTION 2.20 Termination. The Borrower shall not terminate this
Agreement or any other Transaction Document or reduce the Borrowing Limit, in
each instance, prior to the Facility Maturity Date without the Agent's prior
written consent, which consent may be withheld in the Agent's sole discretion.
SECTION 2.21 Underlying Payments. (a) Upon the closing of each
Applicable Underlying Loan (or, if such closing took place prior to the date
hereof, on the date hereof), the Servicer shall direct or otherwise cause the
related Applicable Underlying Borrower: (i) to direct or otherwise cause all
present and future Consumers that are makers of all related Pledged Consumer
Note Receivables to mail payments of all monies due thereunder to a Lockbox,
(ii) to mail (and to cause the Applicable Underlying Guarantor, if any, to mail)
to a Lockbox or pay by wire transfer into the Collection Account all interest,
principal, prepayments (both voluntary and mandatory), and other amounts of any
and every description payable to RFI or the Borrower by or on behalf of such
Applicable Underlying Borrower or Applicable Underlying Guarantor, if any,
pursuant to the applicable Pledged Note Receivable or any other Applicable
Underlying Loan Documents and (iii) cause the Agent's Bank to (A) deposit all
payments of Collections received in the applicable Lockbox into the Lockbox
Account on each Business Day and (B) to remit all Collections deposited into the
Lockbox Account to the Collection Account within one (1) Business Day of the
deposit of such Collections into the Lockbox Account. Neither the Servicer nor
the Borrower shall (or allow the related Applicable Underlying Borrower to)
change any payment directions referred to in the previous sentence without the
prior written consent of the Agent, which such consent shall not be unreasonably
withheld.
(b) Upon the closing of each Applicable Underlying Purchase (or, if
such closing took place prior to the date hereof, on the date hereof), the
Servicer shall direct or otherwise cause the related Applicable Underlying
Seller (i) to direct or otherwise cause all present and future Consumers that
are makers of all Pledged Purchased Consumer Note Receivables sold by such
Applicable Underlying Seller to mail payments of all monies due thereunder to a
Lockbox, (ii) to mail (and to cause the Applicable Underlying Guarantor, if any,
to mail) to a Lockbox or pay by wire transfer into the Collection Account all
interest, principal, prepayments (both voluntary and mandatory), and other
amounts of any and every description payable to RFI or the Borrower by or on
behalf of such Applicable Underlying Seller or Applicable Underlying Guarantor,
if any, pursuant to the applicable Eligible Developer Sale Agreement or any
other Applicable Underlying Purchase Documents and (iii) cause the Agent's Bank
to (A) deposit all payments of Collections received in the applicable Lockbox
into the
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Lockbox Account on each Business Day and (B) to remit all Collections deposited
into the Lockbox Account to the Collection Account within one (1) Business Day
of the deposit of such Collections into the Lockbox Account. Neither the
Servicer nor the Borrower shall (or allow the related Applicable Underlying
Seller to) change any payment directions referred to in the previous sentence
without the prior written consent of the Agent, which such consent shall not be
unreasonably withheld.
(c) Following any advance by RFI under any Applicable Underlying
Loan Documents to an Applicable Underlying Borrower from which any amounts due
RFI from the Applicable Underlying Borrower under the Applicable Underlying Loan
Documents have been subtracted, RFI shall pay all such subtracted amounts,
together with any additional amounts paid to or otherwise received from time to
time by RFI or the Borrower in connection with an Applicable Underlying Loan,
including but not limited to any amounts received by the Servicer, upon its
realization upon any Applicable Underlying Loan Collateral, directly to the
Collection Account on the date as of which any such amount was subtracted from
an advance to the Applicable Underlying Borrower or was otherwise paid to or
received by RFI or the Borrower.
(d) Following the payment of any purchase price by RFI or EFI under
any Applicable Underlying Purchase Documents to an Applicable Underlying Seller
from which any amounts due RFI or EFI from the Applicable Underlying Seller
under the Applicable Underlying Purchase Documents have been subtracted, RFI or
EFI shall pay all such subtracted amounts, together with any additional amounts
paid to or otherwise received from time to time by RFI, EFI or the Borrower in
connection with an Applicable Underlying Purchase, including but not limited to
any amounts received by the Servicer, upon its realization upon any Applicable
Underlying Purchase Collateral, directly to the Collection Account on the date
as of which any such amount was subtracted from any purchase price paid to the
Applicable Underlying Seller or was otherwise paid to or received by RFI or the
Seller.
ARTICLE III.
CONDITIONS OF LOANS
SECTION 3.01 Conditions Precedent to Initial Borrowing. The initial
Borrowing hereunder is subject to the conditions precedent that:
(a) all acts and conditions (including, without limitation, the
obtaining of any necessary regulatory approvals and the making of any
required filings, recordings or registrations) required to be done and
performed and to have happened prior to the execution, delivery and
performance of this Agreement and all related documents and to constitute
the same legal, valid and binding obligations, enforceable in accordance
with their respective terms, shall have been done and performed and shall
have happened in due and strict compliance with all applicable laws;
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(b) the Agent shall have received on or before the date of such
Borrowing the items listed in Schedule I, each in form and substance
satisfactory to the Agent and the Lender; and
(c) the Sinking Fund Account Agreement shall have been duly executed
by each of the parties thereto.
SECTION 3.02 Conditions Precedent to All Borrowings. Except as
otherwise expressly provided below, each Borrowing (including the initial
Borrowing) by the Borrower from the Lender shall be subject to the further
conditions precedent that:
(a) With respect to any such Borrowing (other than the initial
Borrowing), on or prior to the date of such Borrowing, the Servicer shall
have delivered to the Agent, in form and substance satisfactory to the
Agent, the most recent Monthly Remittance Report required by the terms of
Section 6.12(b);
(b) With respect to such Borrowing, at least one Business Day prior
to the date of such Borrowing, the Servicer shall have delivered to the
Agent, in form and substance satisfactory to the Agent, a certificate
signed by an officer of the Borrower having responsibility for financial
matters of the Borrower which shall demonstrate that, after giving effect
to such Borrowing requested by the Borrower, the Facility Amount will not
exceed the lesser of the (i) Borrowing Limit minus the Discount Amount and
(ii) the Capital Limit;
(c) On the Borrowing Date of such Borrowing, the following
statements shall be true, and the Borrower by accepting the amount of such
Borrowing shall be deemed to have certified that:
(i) the representations and warranties contained in Section
4.01 are true and correct in all material respects, before and after
giving effect to the Borrowing to take place on such Borrowing Date and to
the application of proceeds therefrom, on and as of such day as though
made on and as of such date;
(ii) no event has occurred and is continuing, or would result
from such Borrowing, which constitutes an Early Amortization Event
hereunder, or an event that but for notice or lapse of time or both would
constitute an Early Amortization Event;
(iii) on and as of such day, after giving effect to such
Borrowing, the Facility Amount does not exceed the lesser of (x) the
Borrowing Limit minus the Discount Amount and (y) the Capital Limit;
(iv) (A) the Borrower has delivered to the Agent a timely copy
of the Notice of Borrowing and the Notice of Pledge (together with the
attached Receivables Schedule) pursuant to Section 2.02, each
appropriately completed and executed by the
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Borrower, (B) (1) the Borrower has delivered or caused to have been
delivered to the Custodian the Notice of Pledge (together with the
attached Receivables Schedule) related to the Receivables being Pledged
hereunder on such Borrowing Date and (i) the Pledged Developer Note
Receivable File with respect to the Pledged Developer Note Receivables
being Pledged hereunder on such Borrowing Date, (ii) the Pledged Consumer
Note Receivable File with respect to each Pledged Consumer Note Receivable
being Pledged hereunder on such Borrowing Date, (iii) the Pledged
Purchased Consumer Note Receivable File with respect to each Pledged
Purchased Consumer Note Receivable being Pledged hereunder on such
Borrowing Date and (iv) the Eligible Developer Sale Agreement File with
respect to each Eligible Developer Sale Agreement pursuant to which
Pledged Purchased Consumer Note Receivables being Pledged hereunder on
such Borrowing Date were sold to RFI or EFI, (2) the Pledged Developer
Note Receivables, Pledged Consumer Note Receivables and/or Pledged
Purchased Consumer Note Receivables being Pledged hereunder on such
Borrowing Date are duly endorsed (except in the case of Existing Developer
Note Receivables, Existing Pledged Consumer Note Receivables and/or
Existing Pledged Consumer Note Receivables, in which case such items have
bee endorsed to the extent required to be deemed Consumer Level Eligible
Receivables or Primary Level Eligible Receivables hereunder) and duly
assigned by RFI to the Borrower and duly endorsed and duly assigned by the
Borrower to the Agent and (3) the Developer Mortgages, if applicable, and
Interval Mortgages, if applicable, related to each Receivable being
Pledged hereunder on such Borrowing Date, assignments thereof by the
Applicable Underlying Borrower or Applicable Underlying Seller to RFI,
assignments thereof by RFI to the Borrower and assignments thereof by the
Borrower to the Agent have all been duly recorded in the appropriate
recording offices, and (C) the Custodian has delivered to the Agent by
11:30 A.M. (New York City time) on such Borrowing Date, a Collateral
Receipt from the Custodian confirming that, inter alia, the Receivable
Files received on such Borrowing Date conform with the Receivables
Schedule delivered to the Custodian and the Agent on such Borrowing Date;
(v) all terms and conditions of the applicable Borrower
Receivables Purchase Agreement required to be satisfied in connection with
the transfer and sale of each Receivable being Pledged hereunder on such
Borrowing Date, including, without limitation, the perfection of the
Borrower's interests therein shall have been satisfied in full, and all
filings (including, without limitation, real property and UCC filings)
required to be made by any Person and all actions required to be taken or
performed by any Person in any jurisdiction to give the Agent, for the
benefit of the Lender, a first priority perfected security interest in
such Receivables and the proceeds thereof shall have been made, taken or
performed; provided, that, no UCC financing statements will be required to
be filed against any individual Consumer;
(vi) the Borrower shall have taken all steps necessary under
all applicable law in order to cause a valid, subsisting and enforceable
first priority security interest to exist in its favor in the Applicable
Underlying Loan Collateral, the Applicable Underlying Purchased Note
Collateral and all other Collateral related to each Receivable
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(and the proceeds thereof) being Pledged hereunder on such Borrowing Date
and immediately prior to the Pledge of such Receivable by the Borrower to
the Agent (for the benefit of the Lender), there shall have existed in
favor of the Borrower as secured party, a valid, subsisting and
enforceable first priority perfected lien in the Applicable Underlying
Loan Collateral, the Applicable Underlying Purchased Note Collateral and
all other such Collateral related to such Receivable (and the proceeds
thereof), and such security interest is and shall be prior to all other
liens (other than Permitted Liens and Encumbrances) upon and security
interests in such the Applicable Underlying Loan Collateral, the
Applicable Underlying Purchased Note Collateral and other such Collateral
(and the proceeds thereof) that now exist or may hereafter arise or be
created; provided, that, any such security interest in the Land, Units
and/or Common Elements of an Applicable Development, to the extent
evidenced by a Developer Mortgage, may be subordinate to an AD&C Mortgage;
(vii) the Borrower shall have taken all steps necessary under
all applicable law in order to cause a valid, subsisting and enforceable
first priority ownership interest to exist in its favor in the Pledged
Purchased Consumer Note Receivable (and the proceeds thereof) related to
any Receivable being Pledged hereunder on such Borrowing Date and
immediately prior to the Pledge of such Receivable by the Borrower to the
Agent (for the benefit of the Lender), there shall have existed in favor
of the Borrower as secured party, a valid, subsisting and enforceable
first priority ownership interest in the Pledged Purchased Consumer Note
Receivable (and the proceeds thereof) related to any such Receivable which
is and free of all liens and security interests; and
(viii) the Borrower shall have taken all steps necessary under
all applicable law in order to cause to exist in favor of the Agent, for
the benefit of the Lender, a valid, subsisting and enforceable first
priority perfected lien in (A) the Borrower's perfected security interest
in the Applicable Underlying Loan Collateral, the Applicable Underlying
Purchased Note Collateral and all other Collateral (other than the Pledged
Purchased Consumer Note Receivables) related to each Receivable (and the
proceeds thereof) being Pledged hereunder on such Borrowing Date and (B)
the Pledged Purchased Consumer Note Receivables, the Pledged Developer
Note Receivables and any other Pledged Assets related to each Receivable
(and the proceeds thereof) being Pledged hereunder on such Borrowing Date,
and upon the Pledge of such Receivable by the Borrower to the Agent (for
the benefit of the Lender), there shall exist in favor of the Agent (for
the benefit of the Lender) as secured party, a valid, subsisting and
enforceable first priority perfected security interest in (A) the
Borrower's perfected security interest in the Applicable Underlying Loan
Collateral, the Applicable Underlying Purchased Note Collateral and all
other Collateral (other than the Pledged Purchased Consumer Note
Receivables) related to each Receivable (and the proceeds thereof) being
Pledged hereunder on such Borrowing Date and (B) the Pledged Purchased
Consumer Note Receivables, the Pledged Developer Note Receivables and any
other Pledged Assets related to each Receivable (and the proceeds thereof)
being Pledged hereunder on such Borrowing Date, and such security interest
is and shall be prior to all other liens upon and
97
security interests therein that now exist or may hereafter arise or be
created (other than Permitted Liens and Encumbrances);
(d) [Intentionally Omitted];
(e) All Interval Mortgages related to each Receivable being Pledged
hereunder on such Borrowing Date and collateral assignments thereof from
the Applicable Underlying Borrower or the Applicable Underlying Seller to
RFI or EFI, as the case may be, from RFI or EFI, as the case may be, to
the Borrower, and from the Borrower to the Agent, for the benefit of the
Lender shall each have been duly recorded or registered in the Applicable
Jurisdiction in accordance with all Applicable Laws. All Developer
Mortgages related to each Receivable being Pledged hereunder on such
Borrowing Date and collateral assignments thereof from RFI or EFI, as the
case may be, to the Borrower, and from the Borrower to the Agent, for the
benefit of the Lender shall each have been duly recorded or registered in
the Applicable Jurisdiction in accordance with all Applicable Laws. All
such Interval Mortgages, if applicable, and Developer Mortgages, if
applicable, must have evidence thereon of payment of all required
documentary stamps and intangible taxes, if any are required;
(f) The Borrower has delivered or caused to have been delivered to
the Custodian the Notice of Pledge (together with the attached Receivables
Schedule) related to the Receivables being Pledged hereunder on the
related Borrowing Date and (i) the Pledged Developer Note Receivable Files
with respect to each Pledged Developer Note Receivable being Pledged
hereunder on such Borrowing Date, (ii) the Pledged Consumer Note
Receivable File with respect to each Pledged Consumer Note Receivable
being Pledged hereunder on such Borrowing Date, (iii) the Pledged
Purchased Consumer Note Receivable File with respect to each Pledged
Purchased Consumer Note Receivable being Pledged hereunder on such
Borrowing Date and (iv) the Eligible Developer Sale Agreement File with
respect to each Eligible Developer Sale Agreement pursuant to which
Pledged Purchased Consumer Note Receivables are being Pledged hereunder on
such Borrowing Date;
(g) [Intentionally Omitted];
(h) No law or regulation shall prohibit, and no order, judgment or
decree of any federal, state or local court or governmental body, agency
or instrumentality shall prohibit or enjoin, the making of such Loans by
the Lender in accordance with the provisions hereof;
(i) After giving effect to such Borrowing, the Sinking Fund Account
shall be funded in the amount required under the Sinking Fund Account
Agreement;
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(j) As to each Applicable Underlying Loan or Applicable Underlying
Purchase in respect of which the requested Loan is sought, the following
statements shall be true:
(i) The Borrower has received no notice of any asserted or
threatened defense, offset, counterclaim, discount, or allowance in
respect of any Pledged Developer Note Receivables and all related Pledged
Consumer Note Receivables and/or the Pledged Purchased Consumer Note
Receivables being Pledged hereunder on such Borrowing Date; and
(ii) The Borrower has received such additional items as the
Agent shall reasonably require, including, without limitation, an aging
report and delinquency reports of any Pledged Developer Note Receivables
and all related Pledged Consumer Note Receivables and/or the Pledged
Purchased Consumer Note Receivables being Pledged hereunder on such
Borrowing Date; and
(k) On the date of each Borrowing that is an Initial Underlying Loan
Advance or Initial Underlying Purchase Advance, the following conditions
shall have been satisfied:
(i) Applicable Underlying Documents. In the case of an Initial
Underlying Loan Advance, the Applicable Underlying Borrower and, if any,
the Applicable Underlying Guarantor have executed and delivered to the
Borrower the Applicable Underlying Loan Documents. In the case of an
Initial Underlying Purchase Advance, the Applicable Underlying Seller and,
if any, the Applicable Underlying Guarantor have executed and delivered to
Borrower the Applicable Underlying Purchase Documents.
(ii) Developer Title Policies, Etc. If applicable, in the case
of an Initial Underlying Loan Advance with respect to an Applicable
Underlying Loan secured in whole or in part by Consumer Note Receivables
related to Right to Use Intervals or in the case of an Initial Underlying
Purchase Advance with respect to an Applicable Underlying Purchase of
Consumer Note Receivables related in whole or in part to Right to Use
Intervals, the Applicable Underlying Borrower or Applicable Underlying
Seller has delivered to the Servicer an ALTA extended coverage lender's
policy of title insurance insuring in favor of the Applicable Underlying
Borrower or Applicable Underlying Seller, and RFI or EFI, as applicable,
together with their successors and assigns, including but not limited to
the Borrower and the Lender, that good and marketable title in and to the
related Applicable Development is vested in the Applicable Underlying
Borrower or Applicable Underlying Seller, without exception for filed or
unfiled mechanics' liens or claims or (if a Survey with respect to the
related Applicable Development was required pursuant to the terms of this
Agreement or if such Survey was conducted for any other reason) for
matters that an accurate Survey would disclose, subject only to Permitted
Liens and Encumbrances (the "Developer Title Policy") and
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such Developer Title Policy shall be issued by a title insurance company
reasonably satisfactory to the Borrower and the Lender in all respects
(the "Title Insurance Company"). It is understood by the parties hereto
that if a Developer Title Policy can not be obtained with respect to a
Development located in a jurisdiction outside of the United States, a
similar title policy, if available, may be obtained in lieu thereof.
Each Developer Title Policy shall contain such affirmative coverage
as RFI or EFI, as applicable, deems reasonably necessary, including but
not limited to an affirmative statement that the Developer Title Policy
insures the Applicable Underlying Borrower or Applicable Underlying Seller
and RFI or EFI, as applicable, together with their successors and assigns,
including but not limited to the Borrower and the Lender, against all
mechanics' and materialmen's liens arising from or out of construction of
the Applicable Development, and shall contain endorsements in form and
content acceptable to RFI or EFI, as applicable: (A) insuring against
matters that would be disclosed on an accurate Survey of the Land if a
Survey with respect to the related Applicable Development was required
pursuant to the terms of this Agreement or if such Survey was conducted
for any other reason; (B) insuring that no building restriction or similar
exception to title disclosed on the Developer Title Policy has been
violated and that any violation thereof would not create or result in any
reversion, reverter or forfeiture of title; (C) if available, with respect
to zoning in the form typically issued in the Applicable Jurisdiction; and
(D) if available, insuring over any environmental superlien or similar
lien upon all or any portion of the Applicable Development. Such Developer
Title Policy shall provide that RFI, or EFI, as applicable, shall receive
an endorsement to the Developer Title Policy on the date of each advance
of the Applicable Underlying Loan or on the date of each Applicable
Underlying Purchase: (A) indicating that since the date of the immediately
preceding advance or purchase, there has been no change in the state of
title and no mechanics' or materialmen's lien, claim, or lien or similar
notice has been filed against the Development covered by such Developer
Title Policy; (B) updating the Developer Title Policy to the date of such
advance; and (C) increasing the coverage of the Developer Title Policy by
an amount equal to the amount of such advance or the purchase price with
respect to such purchase if the Developer Title Policy does not by its own
terms provide for such an increase; provided, that, the amount of coverage
of the Developer Title Policy need not be increased in excess of the
aggregate acquisition and construction costs incurred by the related
Applicable Underlying Borrower or Applicable Underlying Seller with
respect to the related Applicable Development. The condition of title to
all Applicable Underlying Loan Collateral or Applicable Underlying
Purchased Note Collateral, as applicable, must be satisfactory to the
Agent in all respects, in its reasonable discretion, as a condition
precedent to the Lender's obligation to make any Loans hereunder in
respect of the Applicable Underlying Loan that is secured by Borrower's
lien in and to such Applicable Underlying Loan Collateral or the related
Pledged Purchased Consumer Note Receivable, as applicable.
(iii) Interval Title Policies. If applicable, in the case of
an Initial Underlying Loan Advance with respect to an Applicable
Underlying Loan secured in
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whole or in part by Fee Simple Intervals or in the case of an Initial
Underlying Purchase Advance with respect to an Applicable Underlying
Purchase of Consumer Note Receivables related in whole or in part to Fee
Simple Intervals, the Applicable Underlying Borrower or Applicable
Underlying Seller has delivered to the Servicer one or more ALTA extended
coverage lender's policies of title insurance insuring in favor of the
Applicable Underlying Borrower or Applicable Underlying Seller and RFI or
EFI, as applicable, together with their successors and assigns including,
but not limited to, the Borrower and the Lender, the first priority of the
lien of each related Interval Mortgage in and to each such Fee Simple
Interval, without exception for filed or unfiled mechanics' liens or (if a
Survey with respect to the related Applicable Development was required
pursuant to the terms of this Agreement or if such Survey was conducted
for any other reason) claims or for matters that an accurate Survey would
disclose, subject only to Permitted Liens and Encumbrances (each such
policy, an "Interval Title Policy"). Such Interval Title Policy shall be
issued by a Title Insurance Company. It is understood by the parties
hereto that if an Interval Title Policy can not be obtained with respect
to Intervals related to Development located in a jurisdiction outside of
the United States, a similar title policy, if available, may be obtained
in lieu thereof.
Each such Interval Title Policy shall contain such affirmative
coverage as EFI or RFI, as applicable, deems reasonably necessary,
including but not limited to an affirmative statement that the Interval
Title Policy insures the Applicable Underlying Borrower or Applicable
Underlying Seller and RFI or EFI, as applicable, together with their
successors and assigns, including but not limited to the Borrower and the
Lender, to the extent of their respective interests in the Intervals
covered by such Interval Title Policy, against all mechanics' and
materialmen's liens arising from or out of construction of the Applicable
Development, and shall contain endorsements in form and content acceptable
to RFI or EFI, as applicable: (A) insuring against matters that would be
disclosed on an accurate Survey of the Land if a Survey with respect to
the related Applicable Development was required pursuant to the terms of
this Agreement or if such Survey was conducted for any other reason; (B)
insuring that no building restriction or similar exception to title
disclosed on the Interval Title Policy has been violated and that any
violation thereof would not create or result in any reversion, reverter or
forfeiture of title; (C) if available, with respect to zoning in the form
typically issued in the Applicable Jurisdiction; and (D) if available,
insuring over any environmental superlien or similar lien upon all or any
portion of the Applicable Development. Such Interval Title Policy shall
provide that RFI, or EFI, as applicable, shall receive an endorsement to
the Interval Title Policy on the date of each new advance of the
Applicable Underlying Loan or on the date of each new purchase of a
Consumer Note Receivable under the applicable Eligible Developer Sale
Agreement: (A) indicating that since the date of the immediately preceding
advance or purchase, there has been no change in the state of title and no
mechanics' or materialmen's lien, claim, or lien or similar notice has
been filed against any Interval that is covered by such Interval Title
Policy; (B) updating the Interval Title Policy to the date of such new
advance or new purchase; (C) increasing the coverage of the Interval Title
Policy (X) to include the Interval or Intervals which secure such new
101
advance or are the subject of such new purchase and (Y) by an amount equal
to the amount of such new advance or the purchase price with respect to
such new purchase if the Interval Title Policy does not by its own terms
provide for such an increase. The condition of title to all Applicable
Underlying Loan Collateral or Applicable Underlying Purchased Note
Collateral, as applicable, must be satisfactory to the Agent in all
respects, in its reasonable discretion, as a condition precedent to the
Lender's obligation to make any Loans hereunder in respect of the
Applicable Underlying Loan that is secured by Borrower's lien in and to
such Applicable Underlying Loan Collateral or the related Pledged
Purchased Consumer Note Receivable, as applicable.
(iv) Opinions of Applicable Underlying Borrower's Counsel. The
Borrower has received from counsel for the Applicable Underlying Borrower,
the Applicable Underlying Guarantor, if any, or the Applicable Underlying
Seller, as applicable, licensed in the Applicable Jurisdiction and
reasonably acceptable to the Borrower and the Agent, legal opinions in
substantially the applicable form attached hereto as Exhibit D (it being
agreed that legal opinions substantially in such form are acceptable to
the Agent) or otherwise in form and substance reasonably satisfactory to
the Borrower and the Agent, dated as of the date of closing of the
Applicable Underlying Loan, or the Applicable Underlying Purchase, as
applicable, covering such items as may be reasonably required by the
Borrower and the Agent, including, without limitation, that the Applicable
Underlying Loan Documents or the Applicable Underlying Purchase Documents,
as applicable, are valid, binding, and enforceable in accordance with
their terms and that they do not violate any applicable usury or other
Applicable Laws. The Borrower shall use its best efforts to cause that
each such legal opinion to also be addressed to RFI or EFI and its
successors and assigns and expressly state that it may be relied upon by
such successors and assigns.
(v) Applicable Underlying Borrower's Background Documents. The
Applicable Underlying Borrower, or the Applicable Underlying Seller, as
applicable, has delivered to the Servicer and the Servicer has approved
each of the following:
(A) Applicable Underlying Borrower's or Applicable
Underlying Seller's Organizational Documents. Copies of the
Applicable Underlying Borrower's organizational documents,
including but not limited to its articles of incorporation,
bylaws, partnership agreement, limited liability company
agreement and other relevant documents, as applicable,
together with any amendments thereto, certified to be true and
complete by the Applicable Underlying Borrower's Secretary or
other authorized representative.
(B) Good Standing Certificates. After the date hereof,
current good standing certificates issued by the appropriate
secretaries of state (or similar officials with respect to
foreign jurisdictions) for the Applicable Underlying Borrower
and the Applicable Underlying Guarantor, or the
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Applicable Underlying Seller, as applicable and to the extent
available in the case of foreign jurisdictions.
(C) Resolutions. Certified resolutions of the Applicable
Underlying Borrower's and Applicable Underlying Guarantor's,
or Applicable Underlying Seller's, as applicable, boards of
directors or general partners, as applicable, or such other
evidence of authority as is appropriate for the Applicable
Underlying Borrower's and Applicable Underlying Guarantor's,
or Applicable Underlying Seller's, as applicable, form of
business organization, authorizing the execution of all
Applicable Underlying Loan Documents, or Applicable Underlying
Purchase Documents, as applicable, and the performance of all
obligations of the Applicable Underlying Borrower and
Applicable Underlying Guarantor thereunder, or Applicable
Underlying Seller, as applicable.
(D) Survey. In each case of any Consumer Note Receivable
which is the subject of a Developer Mortgage, an as-built
Survey (except, in the case of Presale Consumer Note
Receivables, in which case the Survey shall only have been
conducted as to the applicable Land) satisfactory to the
Borrower and (except in the case of Surveys delivered prior to
the date hereof) the Lender and prepared by a licensed
surveyor satisfactory to the Borrower, the Lender, the Agent
and the Title Insurance Company in accordance with Borrower's
requirements, of the Applicable Development's Land, showing
the location and dimensions of all Units, Common Elements, if
any, and other improvements thereto and indicating the routes
of ingress and egress for public access to the Applicable
Development, all utility lines, walks, drives, recorded or
visible easements and rights-of-way on such Land, and showing
that there are no encroachments, improvements, projections, or
easements (recorded or unrecorded) on the property lines which
would prevent the development or intended use of the
Applicable Development. The Survey shall certify the acreage
of the Land and shall indicate whether the Land is located
within any flood hazard area. The Survey must be prepared in
accordance with the standards set forth by ALTA/ACSM and those
of any and all surveyors' bureaus or associations of the
Applicable Jurisdiction as well as any and all Applicable Laws
and must be certified to Borrower, Lender, and the Title
Insurance Company. The surveyor's certificate placed on the
Survey shall include a statement that said Survey notes or
locates any and all such items set forth as exceptions in the
applicable Title Policy as Borrower may require, and otherwise
satisfy all of Borrower's the Agent's and the Lender's Survey
requirements, and shall include any other information required
by the Agent, the Lender, the Borrower and the Title Insurance
Company. A Survey shall not be required if such Survey (or its
reasonable equivalent) is not available in the case of foreign
jurisdictions.
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(E) Environmental Report. If applicable, an Acceptable
Environmental Report covering the related Applicable
Development, including all mortgaged real property which
constitutes part of such Applicable Development.
(vi) Evidence of Insurance. The Borrower has received
certified copies of all insurance policies and endorsements thereto or
other evidence of insurance satisfactory to Borrower and Lender, in the
reasonable discretion of each, relating to the Applicable Development,
including but not limited to the Encumbered Intervals and such insurance
policies and endorsements thereto shall conform with the Credit and
Collection Policy in all material respects and customary practice in the
timeshare industry in the Applicable Jurisdiction. In addition, Borrower
has received written evidence that the Applicable Underlying Borrower or
the Applicable Underlying Seller has obtained and is maintaining or has
caused the Applicable Timeshare Owners' Association to obtain and maintain
all policies of insurance required by and in accordance with the terms of
the Credit and Collection Policy and hereof and which are customary in the
timeshare industry in the Applicable Jurisdiction, including but not
limited to copies of the most current paid insurance premium invoices for
such policies.
(vii) Applicable Laws. Borrower has received evidence
satisfactory to Borrower that all Encumbered Intervals at the Applicable
Development are and will be in compliance with all applicable zoning,
building, and other Applicable Laws in connection with the construction,
development, establishment, and operation of the Applicable Development
and the sale, use, marketing, and occupancy of Units and Intervals
thereat.
(viii) Litigation. Borrower has received evidence satisfactory
to Borrower and Lender that there exists no pending bankruptcy,
foreclosure, or other material litigation or judgments outstanding against
or with respect to the Applicable Development, the Applicable Underlying
Borrower, the Applicable Underlying Guarantor, if any, or the Applicable
Underlying Seller (each a "Material Party"). The term "other material
litigation" as used herein shall not include matters in which (i) a
Material Party is a plaintiff and no counterclaim is pending; or (ii)
Borrower and Agent determine, in their reasonable discretion, that such
litigation is immaterial due to settlement, insurance coverage, frivolity,
or amount or nature of claim. Borrower shall have obtained an independent
search, at Borrower's or the Applicable Underlying Borrower's or
Applicable Underlying Seller's expense, confirming that no such
bankruptcy, foreclosure action, or other material litigation or judgment
exists.
(ix) Code/Other Searches. Borrower has obtained such searches
of the applicable public records as it deems necessary under all
Applicable Laws to verify that it has a first and prior perfected lien and
security interest covering all of the Applicable Underlying Loan
Collateral or the Applicable Underlying Purchased Note Collateral;
provided, that no UCC searches will be conducted with respect to Consumers
and provided, further, that, any such security interest in the Land, Units
and/or Common
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Elements of an Applicable Development, to the extent evidenced by a
Developer Mortgage, may be subordinate to an AD&C Mortgage.
(x) Taxes and Assessments. Borrower has received copies of the
most current tax bills related to the Applicable Development (other than
an Applicable Development related to a Non-Specific Club Membership Right
to Use Interval or a Non- Specific Club Membership Fee Simple Interval),
together with evidence satisfactory to it that all real estate and
personal property taxes and assessments owed by or for which the
Applicable Underlying Borrower, the Applicable Underlying Seller or the
Applicable Timeshare Owners' Association is responsible for collection
have been paid except for such taxes as are being disputed in good faith
and with respect to which adequate reserves have been established.
(xi) Financial Statements. Borrower has received the financial
statements required by the Applicable Underlying Loan Documents or the
Applicable Underlying Purchase Documents to be delivered to Borrower, or
otherwise required by Borrower, for the Applicable Underlying Borrower,
the Applicable Underlying Guarantor and the Applicable Underlying Seller,
all in form and substance satisfactory to Borrower and Lender in their
reasonable discretion.
(xii) Interval Sales. To the extent applicable, Borrower has
received a written statement from the Applicable Underlying Borrower or
the Applicable Underlying Seller, as applicable, to the effect that the
Applicable Underlying Borrower or the Applicable Underlying Seller, as
applicable, has complied in all material respects with all Applicable Laws
relating to the marketing and sale of Intervals, including but not limited
to any Encumbered Intervals, at the Applicable Development, including but
not limited to timeshare registration statutes, rules, and regulations.
(xiii) Management and Property Contract. Borrower has received
a copy of the management contract, if any, for the Applicable Development
(the "Management Contract") and Borrower and Lender have determined to
their mutual satisfaction that the Applicable Development is being managed
by a professional management company reasonably acceptable to Borrower and
Lender.
(xiv) Miscellaneous. Such other matters as Lender shall
reasonably require.
True copies or, to the extent required hereby, originals of all of
the above- referenced documents, instruments, forms, opinions, and other
materials shall be delivered to the Servicer, either prior to or
contemporaneously with Borrower's execution and delivery to the Lender of
the Notice of Borrowing with respect to a proposed Loan secured by the
Receivables related thereto. The delivery by the Borrower of any Notice of
Borrowing shall be deemed to be the Borrower's and the Servicer's written
representation and acknowledgment of receipt and approval of each item
referred to in the previous
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sentence which are related to the Receivables being Pledged to secure the
Loan being requested pursuant to such Notice of Borrowing.
SECTION 3.03 Advances Do Not Constitute a Waiver. No advance of a
Loan hereunder shall constitute a waiver of any condition to the Lender's
obligation to make such an advance unless such waiver is in writing and executed
by the Lender.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Borrower and the
Servicer. Each of the Servicer and the Borrower hereby represents and warrants,
as of the date hereof, on each Borrowing Date, on each Remittance Date and on
the first day of each CP Rollover Fixed Period, as follows:
(a) Each Pledged Receivable designated as an Eligible Receivable on
any Borrowing Base Certificate, Monthly Remittance Report or Commercial
Paper Remittance Report is an Eligible Receivable.
(b) The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation and has the power and all licenses necessary to own its
assets and to transact the business in which it is presently engaged, and
is duly qualified and in good standing under the laws of each jurisdiction
where its ownership of the Pledged Receivables requires such qualification
except where failure to obtain such licenses or to be so qualified would
not cause a Material Adverse Effect.
(c) The Servicer is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation and has the power and all licenses necessary to own its
assets and to transact the business in which it is presently engaged
(which includes servicing Receivables on behalf of third parties and
itself), and is duly qualified and in good standing under the laws of each
jurisdiction where its servicing of the Pledged Receivables requires such
qualification except where failure to obtain such licenses or to be so
qualified would not cause a Material Adverse Effect.
(d) Each of the Servicer and the Borrower has the power, authority
and legal right to make, deliver and perform this Agreement and each of
the Transaction Docu ments to which it is a party and all of the
transactions contemplated hereby and thereby, and has taken all necessary
action to authorize the execution, delivery and performance of this
Agreement and each of the Transaction Documents to which it is a party,
and, in the case of the Borrower, to grant to the Agent, for the benefit
of the Lender, a first priority perfected security interest in the Pledged
Assets on the terms and conditions of this
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Agreement; provided, that, any such security interest in the Land, Units
and/or Common Elements of an Applicable Development, to the extent
evidenced by a Developer Mortgage, may be subordinate to an AD&C Mortgage.
This Agreement and each of the Transaction Documents to which the Servicer
or the Borrower is a party constitutes the legal, valid and binding
obligation of the Servicer and the Borrower, as applicable, enforceable
against them in accordance with their respective terms except as the
enforceability hereof and thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization and other similar laws of general
application affecting creditors' rights generally and by general
principles of equity (whether such enforceability is considered in a
proceeding in equity or at law). No consent of any other party and no
consent, license, approval or authorization of, or registration or
declaration with, any governmental authority, bureau or agency is required
in connection with the execution, delivery or performance by the Borrower
or the Servicer of this Agreement or any Transaction Document to which it
is a party, or the validity or enforceability of this Agreement or any
such Transaction Document or the Pledged Receivables, other than such as
have been met or obtained or such that if not met or obtained would not
reasonably be expected to have a Material Adverse Effect.
(e) The execution, delivery and performance of this Agreement, the
other Transaction Documents and all other agreements and instruments
executed and delivered or to be executed and delivered pursuant hereto or
thereto will not (i) create any Adverse Claim on the Pledged Assets other
than as contemplated herein or (ii) violate any provision of any existing
law or regulation or any order or decree of any court, regulatory body or
administrative agency or the certificate of incorporation or by-laws of
the Servicer or the Borrower or any mortgage, indenture, contract or other
agreement to which the Servicer or the Borrower is a party or by which the
Servicer or the Borrower or any property or assets of the Servicer or the
Borrower may be bound, other than, in the case of the Servicer, any such
mortgage, indenture, contract or other agreement the violation of which
would not reasonably be expected to have a Material Adverse Effect.
(f) Except as set forth on Schedule IV hereto, no litigation or
administrative proceeding of or before any court, tribunal or governmental
body is presently pending or, to the knowledge of the Servicer and the
Borrower, threatened against the Servicer or the Borrower or any
properties of the Servicer or the Borrower or with respect to this
Agreement (x) which, if adversely determined, could reasonably be expected
to have a Material Adverse Effect or (y) which purports to affect the
legality, validity or enforceability of this Agreement, any Transaction
Document to which the Borrower or Servicer is a party, or any of the other
applicable documents forming part of the Pledged Assets.
(g) In selecting the Receivables to be Pledged pursuant to this
Agreement, no selection procedures were employed which are intended to be
adverse to the interests of the Lender.
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(h) The grant of the security interest in the Pledged Assets by the
Borrower to the Agent for the benefit of the Lender pursuant to this
Agreement is in the ordinary course of business for the Borrower and is
not subject to the bulk transfer or any similar statutory provisions in
effect in any applicable jurisdiction. No such Pledged Assets have been
sold, transferred, assigned or pledged by the Borrower to any Person other
than the Pledge of such Assets to the Agent, for the benefit of the
Lender, pursuant to the terms of this Agreement.
(i) The Borrower has no Debt or other indebtedness, other than Debt
incurred under (or contemplated by) the terms of this Agreement and the
Borrower Receivables Purchase Agreements.
(j) The Borrower has been formed solely for the purpose of engaging
in transactions of the types contemplated by this Agreement and the
Borrower Receivables Purchase Agreements.
(k) No injunction, writ, restraining order or other order of any
nature adversely affects the Servicer's or the Borrower's performance of
their respective obligations under this Agreement or any Transaction
Document to which the Servicer or the Borrower is a party.
(l) Each of the Servicer and the Borrower has filed (on a
consolidated basis or otherwise) on a timely basis all federal, state and
other material tax returns required to be filed, is not liable for taxes
payable by any other Person and has paid or made adequate provisions for
the payment of all taxes, assessments and other governmental charges due
from the Servicer or the Borrower, as applicable. No tax lien or similar
adverse claim has been filed, and, to the best of the Servicer's and the
Borrower's knowledge, no claim is being asserted, with respect to any such
tax, assessment or other governmental charge. Any taxes, fees and other
governmental charges payable by the Servicer or the Borrower, as
applicable in connection with the execution and delivery of this Agreement
and the other Transaction Documents and the transactions contemplated
hereby or thereby have been paid, if due, or shall have been paid prior to
delinquency.
(m) The chief executive office of the Servicer (and the location of
the Servicer's records regarding the Pledged Receivables) is located at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The chief executive office
of the Borrower (and the location of the Borrower's records regarding the
Pledged Receivables) is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇.
(n) Each of the Servicer's and the Borrower's legal names is as set
forth in this Agreement; other than as disclosed on Schedule III hereto
(as such schedule may be updated from time to by the Agent upon receipt of
a notice delivered to the Agent pursuant to Section 6.20), each of the
Servicer and the Borrower has not changed its name since its
incorporation; each of the Servicer and the Borrower does not have
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tradenames, fictitious names, assumed names or "doing business as" names
other than as disclosed on Schedule III hereto (as such schedule may be
updated from time to by the Agent upon receipt of a notice delivered to
the Agent pursuant to Section 6.20).
(o) Each of the Servicer and the Borrower is solvent and will not
become insolvent after giving effect to the transactions contemplated
hereby; each of the Servicer and the Borrower is paying its debts as they
become due; and each of the Servicer and the Borrower, after giving effect
to the transactions contemplated hereby, will have adequate capital to
conduct its business.
(p) The Borrower has no subsidiaries.
(q) The Borrower has given fair consideration and reasonably
equivalent value in exchange for the sale of the Pledged Receivables by
RFI and EFI under the Borrower Receivables Purchase Agreements.
(r) No Monthly Remittance Report, Borrowing Base Certificate or
Commercial Paper Remittance Report (each if prepared by the Borrower or
the Servicer, or to the extent that information contained therein is
supplied by the Borrower or the Servicer), information, exhibit, financial
statement, document, book, record or report furnished or to be furnished
by the Borrower or the Servicer to the Agent or the Lender in connection
with this Agreement is or will be inaccurate in any material respect as of
the date it is or shall be dated or (except as otherwise disclosed in
writing to the Agent or the Lender, as the case may be, at such time) as
of the date so furnished, and no such document contains or will contain
any material misstatement of fact or omits or shall omit to state a
material fact or any fact necessary to make the statements contained
therein not misleading.
(s) No proceeds of any Loans will be used by the Borrower to acquire
any security in any transaction which is subject to Section 13 or 14 of
the Securities Exchange Act of 1934, as amended.
(t) There are no agreements in effect adversely affecting the rights
of the Borrower to make, or cause to be made, the grant of the security
interest in the Pledged Assets contemplated by Section 2.14.
(u) The Borrower is not an "investment company" or an "affiliated
person" of or "promoter" or "principal underwriter" for an "investment
company" as such terms are defined in the Investment Company Act of 1940,
as amended, nor is the Borrower otherwise subject to regulation
thereunder.
(v) No Event of Default or Unmatured Event of Default has occurred
and is continuing.
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(w) Each of the Pledged Receivables was underwritten and is being
serviced in conformance with RFI's, the Servicer's and the Borrower's
standard underwriting, credit, collection, operating and reporting
procedures and systems (including, without limitation, the Credit and
Collection Policy).
(x) [Intentionally Omitted.]
(y) Each of the Servicer and the Borrower is in compliance in all
material respects with ERISA and has not incurred and does not expect to
incur any material liabilities (except for premium payments arising in the
ordinary course of business) to the Pension Benefit Guaranty Corporation
(or any successor thereto) under ERISA.
(z) There is not now, nor will there be at any time in the future,
any agreement or understanding between the Servicer and the Borrower
(other than as expressly set forth herein) providing for the allocation or
sharing of obligations to make payments or otherwise in respect of any
taxes, fees, assessments or other governmental charges.
(aa) Each of the Servicer and the Borrower has (i) completed a
review and assessment of all areas within its business and operations
(including those affected by material suppliers and vendors) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that
computer applications used by the Servicer or the Borrower (or any of
their material suppliers and vendors) may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to
and any date after December 31, 1999), (ii) developed a plan and timeline
for addressing the Year 2000 Problem on a timely basis, and (iii)
implemented that plan in accordance with that timetable. Each of the
Servicer and the Borrower reasonably believes that all computer
applications (including those of any of their material suppliers and
vendors) that are material to its business and operations will on a timely
basis be able to perform properly date-sensitive functions for all dates
before and after January 1, 2000 (that is, be "Year 2000 Compliant").
(bb) (i) All filings (including, without limitation, UCC and real
property filings) required to be made by any Person and all other actions
required to be taken or performed by any Person in any jurisdiction to
give the Borrower a first priority perfected lien on all Applicable
Underlying Purchased Note Collateral and all other collateral security for
all Pledged Purchased Consumer Note Receivables and the proceeds thereof
have been made, taken or performed; (ii) all filings (including, without
limitation, UCC and real property filings) required to be made by any
Person and all other actions required to be taken or performed by any
Person in any jurisdiction to give the Borrower a first priority perfected
ownership interest in all Pledged Purchased Consumer Note Receivables and
the proceeds thereof have been made, taken or performed; (iii) all filings
(including, without limitation, UCC and real property filings) required to
be made by any Person and all other actions required to be taken or
performed by any Person in any jurisdiction to give the applicable
Developer a first priority perfected lien on all collateral
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security for all Pledged Consumer Note Receivables and the proceeds
thereof have been made, taken or performed; (iv) all filings (including,
without limitation, UCC and real property filings) required to be made by
any Person and all other actions required to be taken or performed by any
Person in any jurisdiction to give RFI a first priority perfected lien on
all Applicable Underlying Loan Collateral and other collateral security
for all Pledged Developer Note Receivables and the proceeds thereof have
been made, taken or performed; (v) all filings (including, without
limitation, UCC and real property filings) required to be made by any
Person and all other actions required to be taken or performed by any
Person in any jurisdiction to transfer to the Borrower from RFI a first
priority perfected lien on all Applicable Underlying Loan Collateral and
other collateral security for all Pledged Developer Note Receivables and
the proceeds thereof have been made, taken or performed; and (vi) all
filings (including, without limitation, UCC and real property filings)
required to be made by any Person and all other actions required to be
taken or performed by any Person in any jurisdiction to give the Agent,
for the benefit of the Lender, a first priority perfected lien on all
Pledged Assets have been made, taken or performed; provided, that, (X) any
such security interest in the Land, Units and/or Common Elements of an
Applicable Development, to the extent evidenced by a Developer Mortgage,
may be subordinate to an AD&C Mortgage, (Y) no UCC financing statements
will be required to be filed against any individual Consumer and (Z) such
security interests in and liens on Applicable Underlying Loan Collateral
and Applicable Underlying Purchased Note Collateral may be subject to
Permitted Liens and Encumbrances.
(cc) Each Applicable Underlying Borrower and Applicable Underlying
Seller which is an Affiliate of the Servicer or the Borrower is set forth
in Schedule V hereto (and the Servicer and the Borrower agree to deliver
to the Agent an updated Schedule V hereto promptly upon any change in the
information contained therein).
ARTICLE V.
GENERAL COVENANTS OF THE BORROWER AND THE SERVICER
SECTION 5.01 General Covenants. (a) The Borrower will observe all
corporate procedures required by its Certificate of Incorporation, Bylaws and
the laws of its jurisdiction of incorporation. The Borrower will maintain its
corporate existence in good standing under the laws of its jurisdiction of
incorporation and will promptly obtain and thereafter maintain qualifications to
do business as a foreign corporation in any other state in which it does
business and in which it is required to so qualify in accordance with applicable
law.
(b) The Borrower will at all times ensure that (i) its directors act
independently and in its interests, (ii) it shall at all times maintain at least
one independent director (x) who is not currently and has not been during the
five years preceding the date of this Agreement an officer, director or employee
of the Borrower or an Affiliate thereof (other than a
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limited purpose corporation, business trust, partnership or other entity
organized for the purpose of acquiring, financing or otherwise investing,
directly or indirectly, in assets or receivables originated, owned or serviced
by RFI or an Affiliate thereof), (y) who is not a current or former officer or
employee of the Borrower and (z) who is not a stockholder of the Borrower or an
Affiliate thereof, (iii) its assets are not commingled with those of RFI or any
other Affiliate of the Borrower, (iv) its board of directors duly authorizes all
of its corporate actions, (v) it maintains separate and accurate records and
books of account and such books and records are kept separate from those of RFI
and any other Affiliate of the Borrower, and (vi) it maintains minutes of the
meetings and other proceedings of the stockholders and the board of directors.
Where necessary, the Borrower will obtain proper authorization from its
shareholders for corporate action.
(c) The Borrower will pay its operating expenses and liabilities
from its own assets; provided, however, that the Borrower's organizational
expenses and the expenses incurred in connection with the negotiation and
execution of this Agreement and the other Transaction Documents may be paid by
RFI.
(d) The Borrower will not have any of its indebtedness guaranteed by
RFI or any Affiliate of RFI. Furthermore, the Borrower will not hold itself out,
or permit itself to be held out, as having agreed to pay or as being liable for
the debts of RFI or any Affiliate of RFI and the Borrower will not engage in
business transactions with RFI or any Affiliate of RFI, except on an
arm's-length basis. The Borrower will not hold RFI or any Affiliate of RFI out
to third parties as other than an entity with assets and liabilities distinct
from the Borrower. The Borrower will cause any financial statements consolidated
with those of RFI or any Affiliate of RFI to state that the Borrower is a
separate corporate entity with its own separate creditors who, in any
liquidation of the Borrower, will be entitled to be satisfied out of the
Borrower's assets prior to any value in the Borrower becoming available to the
Borrower's equity holders. The Borrower will not act in any other matter that
could foreseeably mislead others with respect to the Borrower's separate
identity.
(e) In its capacity as Servicer, RFI will, to the extent necessary,
maintain separate records on behalf of and for the benefit of the Agent and the
Lender, will act in accordance with instructions and directions, delivered in
accordance with the terms hereof, from the Borrower, the Agent and/or the Lender
in connection with its servicing of the Pledged Receivables hereunder, and will
ensure that, at all times when it is dealing with or in connection with the
Pledged Receivables in its capacity as Servicer, it holds itself out as
Servicer, and not in any other capacity.
(f) The Servicer shall, to the extent required by applicable law,
disclose all material transactions associated with this transaction in
appropriate regulatory filings and public announcements. The annual financial
statements of RFI and EFI (including any consolidated financial statements)
shall disclose the effects of the transactions contemplated by the Borrower
Receivables Purchase Agreements as a sale of Receivables and the annual
financial statements of the Borrower shall disclose the effects of the
transactions contemplated by this Agreement as a loan to the extent required by
and in accordance with GAAP, it being understood that the Loans
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to the Borrower under this Agreement will be treated as debt on the consolidated
financial statements of Equivest.
(g) The Borrower shall take all other actions necessary to maintain
the accuracy of the factual assumptions set forth in the legal opinion of ▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇ LLP, special counsel to RFI, EFI and the Borrower, issued in
connection with the Borrower Receivables Purchase Agreements and relating to the
issues of substantive consolidation and true sale of the Pledged Receivables.
(h) Except as otherwise provided herein or in any other Transaction
Document, neither the Borrower nor the Servicer shall (i) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Adverse Claim (other than Permitted Liens and Encumbrances) upon or
with respect to, any Pledged Receivable, any Collections related thereto or any
other Pledged Assets related thereto, or upon or with respect to any account to
which any Collections of any Receivable are sent, or assign any right to receive
income in respect thereof or (ii) create or suffer to exist any Adverse Claim
(other than Permitted Liens and Encumbrances) upon or with respect to any of the
Borrower's assets.
(i) The Borrower will not merge or consolidate with, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions), all or substantially all of its assets (whether now
owned or hereafter acquired) other than, with respect to asset dispositions in
connection with a Take-Out Securitization, or acquire all or substantially all
of the assets or capital stock or other ownership interest of any Person.
(j) The Borrower will not account for or treat (whether in financial
statements or otherwise) the transactions contemplated by the Borrower
Receivables Purchase Agreements in any manner other than the sale of Receivables
by RFI or EFI, as the case may be, to the Borrower, it being understood that the
Loans to the Borrower under this Agreement will be treated as debt on the
consolidated financial statements of Equivest.
(k) The Borrower will not amend, modify, waive or terminate any
terms or conditions of either of the Borrower Receivables Purchase Agreements
(including, without limitation, any eligibility criteria thereunder) or any
Subordinated Note without the written consent of the Agent (which consent shall
not be unreasonably withheld in the case of an amendment curing an ambiguity or
correcting any inconsistent provisions of a Borrower Receivables Purchase
Agreement), and shall perform its obligations thereunder.
(l) The Borrower will not amend, modify or otherwise make any change
to its Certificate of Incorporation without the reasonable consent of the Agent.
(m) Neither the Borrower nor the Servicer will make or allow to be
made any amendment to the Credit and Collection Policy without the prior written
consent of the Agent which such consent shall not be unreasonably withheld;
provided that, without the prior written
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consent of the Agent, the Borrower or the Servicer may make or allow to be made
any inconsequential amendment to any of the foregoing policy or guidelines.
(n) If the Borrower or the Servicer receive any Collections, the
Borrower or the Servicer, as applicable, will remit such Collections to the
Collection Account within two (2) Business Days of the Borrower's or the
Servicer's receipt thereof.
(o) [Intentionally omitted].
(p) [Intentionally omitted].
(q) [Intentionally omitted].
(r) The Borrower shall deliver or cause to be delivered to the
Custodian on or before each Borrowing Date (i) the Pledged Developer Note
Receivable File with respect to the Pledged Developer Note Receivables being
Pledged hereunder on such Borrowing Date, (ii) the Pledged Consumer Note
Receivable File with respect to each Pledged Consumer Note Receivable being
Pledged hereunder on such Borrowing Date and (iii) the Pledged Purchased
Consumer Note Receivable File with respect to each Pledged Purchased Consumer
Note Receivable being Pledged hereunder on such Borrowing Date.
(s) The Borrower shall deliver to the Agent on each Purchase Date a
copy of the Assignment delivered to it on such Purchase Date.
(t) Each of the Servicer and the Borrower shall promptly notify the
Agent in the event that it discovers or determines that any computer application
(including those of its suppliers and vendors) that is material to its business
and operations is not Year 2000 Compliant.
(u) Each of the Servicer and the Borrower shall, at their expense,
cooperate and take all actions reasonably requested by the Agent in connection
with obtaining a shadow rating with respect to the financing facility provided
for hereunder, including, without limitation providing to each of the Rating
Agencies all information requested by such Rating Agencies.
ARTICLE VI.
ADMINISTRATION AND SERVICING; CERTAIN COVENANTS
SECTION 6.01 Appointment and Designation of the Servicer. (a) The
Borrower, the Lender and the Agent hereby appoint the Person designated by the
Agent from time to time (with the approval of the Lender) pursuant to this
Section 6.01 (the "Servicer"), as their agent to service, administer and collect
the Pledged Receivables and otherwise to enforce their respective rights and
interests in and under the Pledged Receivables and the other Pledged
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Assets. The Servicer shall collect such Pledged Receivables under the conditions
referred to above by means of the collection procedures as set forth in the
Credit and Collection Policy, to the extent consistent with the provisions of
this Article VI. The Servicer's authorization under this Agreement shall
terminate on the Collection Date. Until the Agent gives notice to the Borrower
of a designation of a new Servicer upon the occurrence and during the
continuance of any Servicer Default, or consents to the appointment by the
Borrower of a new Servicer, RFI is hereby designated as, and hereby agrees to
perform the duties and obligations of, the Servicer pursuant to the terms hereof
at all times until the earlier of the Agent's designation of a new Servicer upon
the occurrence and during the continuance of any Servicer Default, the delivery
by the Agent of its consent to the appointment by the Borrower of a new Servicer
or the Collection Date. Upon the occurrence and during the continuance of any
Servicer Default, the Agent may at any time (with the approval of the Lender)
designate as Servicer any Person to succeed RFI or any successor Servicer, on
the condition in each case that any such Person so designated shall agree to
perform the duties and obligations of the Servicer pursuant to the terms hereof.
Each of the Borrower and RFI hereby grants to any successor Servicer an
irrevocable power of attorney and license to take any and all steps in the
Borrower's, RFI's or the Servicer's name, as applicable, and on behalf of the
Borrower or RFI, necessary or desirable, in the determination of such successor
Servicer, to service, administer or collect any and all Pledged Receivables.
(b) The Servicer is hereby authorized to act for the Borrower and
the Agent and in such capacity shall manage, service, administer and make
collections on the Pledged Receivables, and perform the other actions required
by the Servicer under this Agreement for the benefit of the Agent and the
Lender. The Servicer agrees that its servicing of the Pledged Receivables shall
be carried out in accordance with customary and usual procedures of institutions
which service comparable receivables and, to the extent more exacting, the
degree of skill and attention that the Servicer exercises from time to time with
respect to all comparable receivables that it services for itself or others in
accordance with the Credit and Collection Policy and, to the extent more
exacting, the requirements of this Article VI. The Servicer's duties shall
include, without limitation, collection and posting of all payments, responding
to inquiries of Obligors on the Pledged Receivables, investigating
delinquencies, sending payment statements or payment books to Obligors,
reporting any required tax information to Obligors, policing the collateral,
complying with the terms of the Lockbox Agreement, accounting for collections,
furnishing monthly and annual statements to the Agent with respect to
distributions and performing the other duties specified herein.
(c) To the extent consistent with the standards, policies and
procedures otherwise required hereby, the Servicer shall have full power and
authority, acting alone, to do any and all things in connection with such
managing, servicing, administration and collection that it may deem necessary or
desirable. The Servicer is authorized to release Liens on Intervals in order to
collect insurance and condemnation proceeds with respect thereto and to
liquidate such Intervals in accordance with its customary standards, policies
and procedures; provided, however, that notwithstanding the foregoing, the
Servicer shall not, (i) except pursuant to an order from a court of competent
jurisdiction, release an Obligor from payment of any unpaid amount under any
Pledged Receivable or (ii) waive the right to collect the unpaid balance of any
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Pledged Receivable from such Obligor, except that, subject to Section 6.02(a),
the Servicer may forego collection efforts if the amount which the Servicer, in
its reasonable judgment, expects to realize in connection with such collection
efforts is determined by the Servicer in its reasonable judgment to be less than
the reasonably expected costs of pursuing such collection efforts, and if the
Servicer would forego such collection efforts in accordance with its customary
procedures. The Servicer is hereby authorized to commence, in its own name or in
the name of the Borrower, the Agent or the Lender (provided that if the Servicer
is acting in the name of the Borrower, the Agent or the Lender, the Servicer
shall have obtained the Borrower's, the Agent's or the Lender's consent, as the
case may be, which consent shall not be unreasonably withheld), a legal
proceeding to enforce a Pledged Receivable or to commence or participate in any
other legal proceeding (including, without limitation, a bankruptcy proceeding)
relating to or involving a Pledged Receivable, an Obligor or a Interval. If the
Servicer commences or participates in such a legal proceeding in its own name,
the Borrower, the Agent or the Lender, as the case may be, shall thereupon be
deemed to have automatically assigned such Pledged Receivable to the Servicer
solely for purposes of commencing or participating in any such proceeding as a
party or claimant, and the Servicer is authorized and empowered by the Borrower,
the Agent or the Lender, as the case may be, to execute and deliver in the
Servicer's name any notices, demands, claims, complaints, responses, affidavits
or other documents or instruments in connection with any such proceeding. The
Borrower, the Agent or the Lender, as the case may be, shall furnish the
Servicer with any powers of attorney and other documents which the Servicer may
reasonably request in writing and which the Servicer deems necessary or
appropriate and take any other steps which the Servicer may deem necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties under this Agreement.
(d) 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)
of the previous sentence hereof shall be evidenced by an Opinion of Counsel to
such effect delivered to the Agent. Unless otherwise required by applicable law,
no such resignation shall be effective until a successor Servicer designated by
the Agent and the Lender shall have assumed the responsibilities and obligations
of the Servicer hereunder.
SECTION 6.02 Collection of Receivable Payments; Modification and
Amendment of Receivables. (a) Consistent with the standards, policies and
procedures required by this Agreement, the Servicer shall make reasonable
efforts to collect all payments called for under the terms and provisions of the
Pledged Receivables as and when the same shall become due, and shall follow such
collection procedures as it follows with respect to all comparable receivables
that it services for itself or others (or that it formerly serviced for itself
or others) and otherwise act with respect to the Pledged Receivables and the
applicable Title Policy in such manner as will, in the reasonable judgment of
the Servicer, maximize the amount to be received by the Borrower and the Lender
with respect thereto.
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(b) The Servicer may at any time agree to a modification or
amendment of a Pledged Receivable in order to re-amortize the scheduled payments
on the Pledged Receivable following a partial prepayment of principal but the
Servicer may not grant payment extensions on a Pledged Receivable or permit any
other modifications or amendments to a Pledged Receivable.
(c) The Servicer shall remit all payments by or on behalf of the
Obligors received directly by the Servicer to the Collection Account, without
deposit into any intervening account as soon as practicable, but in no event
later than two (2) Business Days after receipt thereof.
SECTION 6.03 Realization Upon Receivables. Consistent with the
standards, policies and procedures required by this Agreement, the Servicer
shall use its best efforts to foreclose upon (or otherwise comparably convert
the ownership of) and liquidate any Interval or other Collateral securing a
Pledged Receivable (to the extent it has the right to do so under the Applicable
Underlying Loan Documents or the Applicable Underlying Purchase Documents) with
respect to which the Servicer has determined that payments thereunder have
ceased and are not likely to be resumed, as soon as is practicable after default
on such Pledged Receivable but in no event later than thirty (30) days after
such determination or an earlier date that would be customary under the
circumstances involved and, in any case, in a manner as will, in the reasonable
judgment of the Servicer, maximize the amount to be received by the Borrower and
the Lender with respect thereto. The Servicer is authorized to follow such
customary practices and procedures as it shall deem necessary or advisable,
consistent with the standard of care required by Section 6.01, which practices
and procedures may include reasonable efforts to realize upon any recourse to
Developers, selling the related Interval or other Collateral at public or
private sale, the submission of claims under a Title Policy, if applicable, and
other actions by the Servicer in order to realize upon such Pledged Receivable.
The foregoing is subject to the provision that, in any case in which the related
Unit shall have suffered damage, the Servicer shall not expend funds in
connection with any repair or towards the foreclosure of such Interval unless it
shall determine in its discretion that such repair and/or foreclosure shall
increase the proceeds of liquidation of the related Pledged Receivable by an
amount greater than the amount of such expenses. All Liquidation Proceeds shall
be remitted directly by the Servicer to the Collection Account without deposit
into any intervening account as soon as practicable, but in no event later than
two (2) Business Days after receipt thereof. The Servicer shall pay on behalf of
the Borrower any personal property taxes assessed on foreclosed Intervals, and
the Servicer shall be entitled to reimbursement of any such tax as a Servicer
Advance.
SECTION 6.04 Insurance Regarding Intervals. (a) Without limiting the
effect of any other provision hereof, the Servicer shall monitor the status of
the Title Policies related to the Pledged Receivables in accordance with the
Hypothecation Loan Agreement or Eligible Developer Sale Agreement related to the
Pledged Receivables, the Credit and Collection Policy and its customary
servicing procedures. If the Servicer shall determine that an Applicable
Underlying Borrower or Applicable Underlying Seller has failed to obtain or
maintain an Interval Title Policy or Interval Title Policies covering all
related Interval Mortgages or a Developer Title Policy covering all Right to Use
Intervals with respect to the related Applicable Development, in
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each case, if any is required hereunder, the Servicer shall enforce all rights
under the related Hypothecation Loan Agreement or Eligible Developer Sale
Agreement to ensure that such Applicable Underlying Borrower or Applicable
Underlying Seller obtains such Title Policy.
(b) The Servicer may and, upon the request of the Agent, shall ▇▇▇
to enforce or collect upon the Title Policies, in its own name, if possible, or
as agent of the Borrower, the Agent and the Lender. If the Servicer elects to
commence a legal proceeding to enforce a Title Policy, the act of commencement
shall be deemed to be an automatic assignment of the rights of the Borrower, the
Agent and the Lender under such Title Policy 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 Title Policy on the grounds that it is
not a real party in interest or a holder entitled to enforce the Title Policy,
the Borrower shall take such steps as the Servicer deems necessary to enforce
such Title Policy, including bringing suit in its name.
SECTION 6.05 Maintenance of Security Interests in Intervals. (a) If
the Borrower has failed to, the Servicer shall take all steps necessary under
all applicable law in order to cause a valid, subsisting and enforceable first
priority security interest to exist in the Borrower's favor in the Applicable
Underlying Loan Collateral, the Applicable Underlying Purchased Note Collateral
and all other Collateral (other than the Pledged Purchased Consumer Note
Receivables and the Pledged Developer Note Receivables) related to each
Receivable (and the proceeds thereof) being Pledged hereunder on any Borrowing
Date and immediately prior to the Pledge of such Receivable by the Borrower to
the Agent (for the benefit of the Lender), there shall have existed in favor of
the Borrower as secured party, a valid, subsisting and enforceable first
priority perfected lien in the Applicable Underlying Loan Collateral, the
Applicable Underlying Purchased Note Collateral and all other such Collateral
related to such Receivable (and the proceeds thereof), and such security
interest is and shall be prior to all other liens upon and security interests in
such the Applicable Underlying Loan Collateral, the Applicable Underlying
Purchased Note Collateral and other such Collateral (and the proceeds thereof)
that now exist or may hereafter arise or be created, except with regard to
Permitted Liens and Encumbrances: provided, that, any such security interest in
the Land, Units and/or Common Elements of an Applicable Development, to the
extent evidenced by a Developer Mortgage, may be subordinate to an AD&C
Mortgage.
(b) If the Borrower has failed to, the Servicer shall take all steps
necessary under all applicable law in order to cause a valid, subsisting and
enforceable first priority ownership interest to exist in the Borrower's favor
in the Pledged Purchased Consumer Note Receivable (and the proceeds thereof)
related to any Receivable being Pledged hereunder on any Borrowing Date and
immediately prior to the Pledge of such Receivable by the Borrower to the Agent
(for the benefit of the Lender), there shall have existed in favor of the
Borrower as secured party, a valid, subsisting and enforceable first priority
ownership interest in the Pledged Purchased Consumer Note Receivable (and the
proceeds thereof) related to any such Receivable which is and free of all liens
and security interests;
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(c) If the Borrower has failed to, the Servicer shall take all steps
necessary under all applicable law in order to cause to exist in favor of the
Agent, for the benefit of the Lender, a valid, subsisting and enforceable first
priority perfected lien in (A) the Borrower's perfected security interest in the
Applicable Underlying Loan Collateral, the Applicable Underlying Purchased Note
Collateral and all other Collateral (other than the Pledged Purchased Consumer
Note Receivables) related to each Receivable (and the proceeds thereof) being
Pledged hereunder on such Borrowing Date and (B) the Pledged Purchased Consumer
Note Receivables, the Pledged Developer Note Receivables and any other Pledged
Assets related to each Receivable (and the proceeds thereof) being Pledged
hereunder on any Borrowing Date, and upon the Pledge of such Receivable by the
Borrower to the Agent (for the benefit of the Lender), there shall exist in
favor of the Agent (for the benefit of the Lender) as secured party, a valid,
subsisting and enforceable first priority perfected security interest (A) the
Borrower's first priority perfected security interest in the Applicable
Underlying Loan Collateral, the Applicable Underlying Purchased Note Collateral
and all other Collateral (other than the Pledged Purchased Consumer Note
Receivables) related to each Receivable (and the proceeds thereof) being Pledged
hereunder on such Borrowing Date and (B) the Pledged Purchased Consumer Note
Receivables, the Pledged Developer Note Receivables and any other Pledged Assets
related to each Receivable (and the proceeds thereof) being Pledged hereunder on
such Borrowing Date, and such security interest is and shall be prior to all
other liens upon and security interests therein that now exist or may hereafter
arise or be created, except with regard to Permitted Liens and Encumbrances;
provided, that, any such security interest in the Land, Units and/or Common
Elements of an Applicable Development, to the extent evidenced by a Developer
Mortgage, may be subordinate to an AD&C Mortgage.
SECTION 6.06 Pledged Receivable Receipts. The Servicer shall
promptly make a deposit or cause the Borrower, Equivest or any Affiliate thereof
to make a deposit into the Collection Account in an amount equal to the
Collections received or made by or on behalf of it, the Borrower, Equivest or
any Affiliate thereof, as the case may be, within two (2) Business Days of
receiving any such Collections.
SECTION 6.07 [Intentionally omitted].
SECTION 6.08 Unidentified Payments; Lender's Right of Presumption.
The Borrower agrees and consents that the Servicer and/or the Agent may apply
any payment it receives (or any such payment the Servicer deposits into the
Collection Account) from an Obligor to any Loan secured by a Pledged Receivable
if the Servicer and/or the Agent is unable in good faith to determine whether
such payment from an Obligor relates to such Pledged Receivable.
SECTION 6.09 No Rights of Withdrawal. Until the Collection Date, the
Borrower shall have no rights of direction or withdrawal with respect to amounts
held in the Collection Account, the Lockbox Account or any Lockbox, except as
provided for herein.
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SECTION 6.10 Permitted Investments. The Borrower shall, pursuant to
written instruction, direct the Agent's Bank (and if the Borrower fails to do
so, the Agent may, pursuant to written instruction, direct the Agent's Bank) to
invest, or cause the investment of, funds on deposit in the Collection Account,
in Permitted Investments, from the date of this Agreement until the Collection
Date. Absent any such written instruction, the Agent's Bank shall invest, or
cause the investment of, such funds in Permitted Investments described in clause
(v) of the definition thereof. A Permitted Investment acquired with funds
deposited in the Collection Account shall mature not later than the Business Day
immediately preceding the last day of the next ending Fixed Period, and shall
not be sold or disposed of prior to its maturity. All such Permitted Investments
shall be registered in the name of the Agent (in its capacity as such) or its
nominee for the benefit of the Lender. All income and gain realized from any
such investment as well as any interest earned on deposits in the Collection
Account shall be distributed in accordance with the provisions of Article II
hereof. The Servicer shall deposit in the Collection Account (with respect to
investments made hereunder of funds held therein), an amount equal to the amount
of any actual loss incurred in respect of any such investment immediately upon
realization of such loss. Neither the Agent's Bank nor the Agent shall be liable
for the amount of any loss incurred in respect of any investment, or lack of
investment, of funds held in the Collection Account.
SECTION 6.11 Servicing Compensation. As compensation for its
activities hereunder, the Servicer shall be entitled to be paid the Servicing
Fee from the Collection Account as provided in Section 2.05(c). The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder and shall not be entitled to reimbursement
therefor, except with respect to reasonable expenses of the Servicer incurred in
connection with the foreclosure and disposition of any Interval (which the
Servicer may retain from the proceeds of the disposition of such Interval) and
any Servicer Advances made by the Servicer pursuant hereto. The Servicing Fee
may not be transferred in whole or in part except in connection with the
transfer of all the Servicer's responsibilities and obligations under this
Agreement.
SECTION 6.12 Reports to the Agent; Account Statements; Servicing
Information. (a) The Borrower will deliver to the Agent (i) on the Early
Amortization Commencement Date, a report identifying the Pledged Receivables
(and any information with respect thereto requested by the Agent) on the day
immediately preceding the Early Amortization Commencement Date and (ii) upon the
Agent's reasonable request and upon reasonable notice, on any other Business
Day, a report identifying the Pledged Receivables (and any information with
respect thereto reasonably requested by the Agent) on such day.
(b) On the fifth day of each calendar month or, if such day is not a
Business Day, the immediately preceding Business Day, the Servicer shall prepare
and deliver or have delivered to the Agent for the Lender, (i) a Monthly
Remittance Report and any other information reasonably requested by the Agent
relating to all Pledged Receivables (including if requested, a Computer Tape or
Listing), all information in the Monthly Remittance Report (including, without
limitation, the calculation of Weighted Average APR, the Chargeback Rate and the
Delinquency Rate) and all other such information to be accurate as of the last
day of the
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immediately preceding Remittance Period and (ii) in an electronic format
mutually acceptable to the Servicer and the Agent, all information reasonably
requested by the Agent relating to all Pledged Receivables. If any Monthly
Remittance Report indicates the existence of a Borrowing Base Deficiency, the
Borrower shall on the date of delivery of such Monthly Remittance Report prepay
to the Agent, for the account of the Lender, a portion of the Loans as is
necessary to cure such Borrowing Base Deficiency (or otherwise cure such
Borrowing Base Deficiency).
(c) By no later than 1:00 P.M. (New York City time) on the Business
Day immediately preceding a Borrowing, the Servicer shall also prepare and
deliver to the Agent for the Lender a Borrowing Base Certificate containing
information accurate as of the date of delivery of such Borrowing Base
Certificate. If any Borrowing Base Certificate indicates the existence of a
Borrowing Base Deficiency, the Borrower shall on the date of delivery of such
Borrowing Base Certificate prepay to the Agent, for the account of the Lender, a
portion of the Loans as is necessary to cure such Borrowing Base Deficiency (or
otherwise cure such Borrowing Base Deficiency).
(d) On the Business Day immediately preceding the last day of each
Fixed Period, the Servicer shall prepare and deliver or have delivered to the
Agent for the Lender, a Commercial Paper Remittance Report containing
information accurate as of the date of delivery of such Commercial Paper
Remittance Report.
(e) On the fifth day of each calendar month or, if such day is not a
Business Day, the immediately preceding Business Day (each such day, a "Backup
Servicer Delivery Date"), the Servicer shall prepare and deliver or have
delivered to the Backup Servicer, (i) a Monthly Remittance Report in respect of
the immediately-preceding Remittance Period and (ii) a computer tape or a
diskette or any other electronic transmission in a format acceptable to the
Backup Servicer containing the information with respect to the Pledged
Receivables during such Remittance Period which was necessary for preparation of
such Monthly Remittance Report.
(f) The Borrower shall deliver to the Agent all reports it receives
pursuant to the Borrower Receivables Purchase Agreements within five (5)
Business Day of the receipt thereof.
SECTION 6.13 Statements as to Compliance; Financial Statements. (a)
The Servicer shall deliver to the Agent, the Borrower and the Lender on or
before January 15 of each year, beginning with January 15, 2001, an Officers
Certificate stating, as to each signatory thereof, that (x) a review of the
activities of the Servicer during the preceding calendar year (or the portion
thereof commencing on the date of this Agreement, in the case of the calendar
year ending December 31, 2000) and of its performance under this Agreement has
been made under such officer's supervision, and (y) to the best of such
officers' knowledge, based on such review, the Servicer has fulfilled all of its
obligations under this Agreement throughout such calendar year (or portion
thereof, as the case may be) or, if there has been a default in the fulfillment
of any such obligation, specifying each such default known to such officer and
the nature and status thereof and the action being taken to cure such default.
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(b) The Servicer shall, at its expense, cause Firley, Moran, ▇▇▇▇▇ &
▇▇▇▇▇, P.C. or another firm of independent certified public accountants
reasonably acceptable to the Agent (the "Independent Accountants"), who may also
render other services to the Servicer or to the Borrower to deliver to the
Borrower and the Agent, on or before March 31 of each year, beginning on March
31, 2001, with respect to the twelve (12) months ended the immediately preceding
December 31, a statement (the "Accountants' Report") addressed to the Board of
Directors of the Servicer and to the Agent, to the effect that such firm has
examined such Borrowing Base Certificates, Monthly Remittance Reports and
Commercial Paper Remittance Reports prepared by the Servicer during the twelve
(12) months ended the immediately preceding December 31 as it deemed necessary
in order to issue the Accountant's Report and issued its report thereon and that
such examination was made in accordance with generally accepted auditing
standards, and accordingly included such tests of the accounting records and
such other auditing procedures as such firm considered necessary in the
circumstances. The Accountants' Report shall further state that (i) a review in
accordance with agreed upon procedures was made; (ii) except as disclosed in the
Accountant's Report, no exceptions or errors in the Borrowing Base Certificates,
Monthly Remittance Reports and Commercial Paper Remittance Reports examined were
found except for (A) such exceptions as the Independent Accountants believe to
be immaterial and (B) such other exceptions as shall be set forth in the
Accountants' Report. The Accountants' Report shall also indicate that the firm
is independent of the Borrower and the Servicer within the meaning of the Code
of Professional Ethics of the American Institute of Certified Public
Accountants.
(c) [Intentionally Omitted].
(d) As soon as available and no later than forty-five (45) days
after the end of each calendar quarter in each fiscal year of Equivest, the
Servicer shall deliver to the Lender and the Agent two copies of:
(i) a consolidated and consolidating balance sheet of Equivest
and its consolidated subsidiaries (including RFI, EFI and the Borrower) as
of the end of such calendar quarter setting forth in comparative form the
corresponding figures for the most recent year-end for which an audited
balance sheet has been prepared, which such balance sheet shall be
prepared and presented in accordance with, and provide all necessary
disclosure required by, GAAP and shall be accompanied by a certificate
signed by the financial vice president, treasurer, chief financial officer
or controller of Equivest stating that such balance sheet presents fairly
the financial condition of the companies being reported upon and has been
prepared in accordance with GAAP consistently applied; and
(ii) consolidated and consolidating statements of income,
stockholders' equity and cash flow of Equivest and its consolidated
subsidiaries (including RFI, EFI and the Borrower) for such calendar
quarter, in each case and for the portion of the fiscal year ending with
such calendar quarter setting forth in comparative form the corresponding
figures for the comparable period one year prior thereto (subject to
normal
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year-end adjustments), which such statements shall be prepared and
presented in accordance with, and provide all necessary disclosure
required by, GAAP and shall be accompanied by a certificate signed by the
financial vice president, treasurer, chief financial officer or controller
of Equivest, stating that such financial statements present fairly the
financial condition and results of operations of the companies being
reported upon and have been prepared in accordance with GAAP consistently
applied.
(e) As soon as available and no later than ninety (90) days after
the end of each fiscal year of RFI, EFI and Equivest, the Servicer shall deliver
to the Lender and the Agent two copies of:
(i) a consolidated and consolidating balance sheet of Equivest
and its consolidated subsidiaries (including RFI, EFI and the Borrower),
all as of the end of the fiscal year, setting forth in comparative form
the figures for the previous fiscal year and accompanied by an opinion of
the Independent Accountants stating that such balance sheet presents
fairly the financial condition of the companies being reported upon and
has been prepared in accordance with GAAP consistently applied (except for
changes in application in which such accountants concur); and
(ii) consolidated and consolidating statements of income,
stockholders' equity and cash flow of Equivest and its consolidated
subsidiaries (including RFI, EFI and the Borrower), for such fiscal year;
in each case setting forth in comparative form the figures for the
previous fiscal year and accompanied by an opinion of the Independent
Accountants stating that such financial statements present fairly the
financial condition of the companies being reported upon and have been
prepared in accordance with GAAP consistently applied (except for changes
in application in which such accountants concur).
(f) As soon as available and no later than ninety (90) days after
the end of each fiscal year of the Borrower, the Servicer shall deliver to the
Lender and the Agent two copies of:
(i) a balance sheet of the Borrower, as of the end of the
fiscal year, setting forth in comparative form the figures for the
previous fiscal year and accompanied by an opinion of the Independent
Accountants stating that such balance sheet presents fairly the financial
condition of the Borrower and has been prepared in accordance with GAAP
consistently applied (except for changes in application in which such
accountants concur); and
(ii) statements of income, stockholders' equity and cash flow
of the Borrower for such fiscal year; setting forth in comparative form
the figures for the previous fiscal year and accompanied by an opinion of
the Independent Accountants stating that such financial statements present
fairly the financial condition of the
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Borrower and have been prepared in accordance with GAAP consistently
applied (except for changes in application in which such accountants
concur).
SECTION 6.14 Access to Certain Documentation; Obligors. (a) The
Lender or the Agent (and their respective agents or professional advisors) shall
at the expense of the Borrower, have the right under this Agreement, once during
each calendar year, upon reasonable prior notice to the Servicer, to examine and
audit, during business hours or at such other times as might be reasonable under
applicable circumstances, any and all of the books, records, or other
information of the Servicer, or held by another for the Servicer or on its
behalf, concerning this Agreement. The Lender and the Agent (and their
respective agents and professional advisors) shall treat as confidential any
information obtained during such examination which is not already publicly known
or available; provided, however, the Lender or the Agent may disclose such
information if required to do so by law or by any regulatory authority. Without
limitation of the foregoing, the Servicer and the Borrower acknowledge and agree
that at least four (4) times during each calendar year the Agent (and its
respective agents or professional advisors) shall, at the Agent's own expense,
upon reasonable prior notice to the Servicer and the Borrower, examine and
audit, during business hours or at such other times as might be reasonable under
applicable circumstances, any and all of the books, records or other information
of the Servicer and/or the Borrower or held by another for the Servicer and/or
the Borrower or on its behalf concerning this Agreement and compliance
therewith.
(b) The Lender or the Agent (and their respective agents or
professional advisors) shall, at their own expense, have the right under this
Agreement to, not more frequently than once each calendar quarter, contact the
Obligors with respect to any Receivables which are Pledged hereunder in order to
procure such information related to such Obligor, the related Contracts, and the
Receivables as the Lender or the Agent deems reasonable under the circumstances.
The Servicer and the Borrower hereby agree to cooperate with the Lender and the
Agent (and their respective agents or professional advisors) in connection with
any attempt thereby to contact any such Obligor and shall provide to the Lender
and the Agent such information as is needed in order to facilitate such contact.
The Lender and the Agent (and their respective agents and professional advisors)
shall treat as confidential any information obtained during any such contact
with any such Obligor which is not already publicly known or available;
provided, however, the Lender or the Agent (and their respective agents or
professional advisors) may disclose such information if required to do so by law
or by any regulatory authority.
SECTION 6.15 Backup Servicer. If a Servicer Default shall occur and
is continuing, then the Agent may, by notice to the Servicer, the Borrower and
the Backup Servicer, terminate all of the rights and obligations of the Servicer
under this Agreement. Upon the delivery to the Servicer of such notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the Pledged Assets or otherwise, shall pass to and be vested in the Backup
Servicer pursuant to and under this Section, and, without limitation, the Backup
Servicer is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice
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of termination or to perform the duties of the Servicer under this Agreement.
The Servicer agrees to cooperate with the Agent and the Backup Servicer in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, notification to the Obligors of the
assignment of the servicing function, providing the Backup Servicer with all
records, in electronic or other form, reasonably requested by it to enable the
Backup Servicer to assume the servicing functions hereunder and the transfer to
the Backup Servicer for administration by it all cash amounts which at the time
should be or should have been deposited by the Servicer in the Collection
Account or thereafter be received by the Servicer with respect to the Pledged
Receivables. Neither the Agent nor the Backup Servicer shall be deemed to have
breached any obligation hereunder as a result of a failure to make or delay in
making any distribution as and when required hereunder caused by the failure of
the Servicer to remit any amounts received by it or to deliver any documents
held by it with respect to the Pledged Assets.
The Backup Servicer's Fees shall be paid out of Collections as set
forth in Section 2.05(c) on and after the date, if any, that the Backup Servicer
assumes the responsibilities of the Servicer pursuant to this Section.
Any obligations of RFI hereunder other than in its capacity as
Servicer shall continue in effect notwithstanding RFI's termination as Servicer.
On and after the time the Servicer receives a notice of termination
pursuant to this Section 6.15, the Backup Servicer shall be (and the Backup
Servicer hereby agrees to be) the successor in all respects to the Servicer in
its capacity as Servicer under this Agreement and the transactions set forth or
provided for herein and shall have all the rights and powers and be subject
thereafter to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof; provided, however,
that any failure to perform such duties or responsibilities caused by the
Servicer's failure to provide information required by this Section 6.15 shall
not be considered a default by the Backup Servicer hereunder. The Backup
Servicer shall have (i) no liability with respect to any obligation which was
required to be performed by the terminated Servicer prior to the date that the
Backup Servicer becomes the successor to the Servicer or any claim of a third
party based on any alleged action or inaction of the terminated Servicer, (ii)
no obligation to perform any repurchase or advancing obligations, if any, of the
Servicer, (iii) no obligation to pay any taxes required to be paid by the
Servicer (provided that the Backup Servicer shall pay any income taxes for which
it is liable), (iv) no obligation to pay any of the fees and expenses of any
other party to the transactions contemplated hereby, and (v) no liability or
obligation with respect to any Servicer indemnification obligations of any prior
Servicer, including the original Servicer. The indemnification obligations of
the Backup Servicer, upon becoming a successor Servicer, are expressly limited
to those arising on account of its failure to act in good faith and with
reasonable care under the circumstances. In addition, the Backup Servicer shall
have no liability relating to the representations and warranties of the Servicer
contained in Article IV. Notwithstanding the above, the Agent may, if the Backup
Servicer shall be unwilling to so act, or shall, if the Backup Servicer is
unable to so act, or if the Lender so requests in writing to the Agent, appoint
itself, or appoint any established servicing institution acceptable to the
Agent, as the successor to the Servicer hereunder in the
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assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer hereunder. Pending appointment of a successor to the Servicer
hereunder, and after the Agent notifies the Servicer to discontinue performing
servicing functions under this Agreement, the Backup Servicer (or the Agent if
there is no Backup Servicer) shall act in such capacity as hereinabove provided.
In connection with such appointment and assumption, the Agent may make such
arrangements for the compensation of such successor out of payments on Pledged
Receivables as it and such successor shall agree; provided, however, that,
except as provided herein, no such compensation shall be in excess of that
permitted the Servicer hereunder, unless otherwise agreed to by the Lender. The
Borrower, the Agent and such successor shall take such action, consistent with
this Agreement, as shall be necessary to effectuate any such succession.
Prior to each Remittance Date, the Backup Servicer shall compare the
information on the computer tape or diskette (or other means of electronic
transmission acceptable to the Backup Servicer) most recently delivered to the
Backup Servicer by the Servicer pursuant to Sec tion 6.12(e) to the Monthly
Remittance Report most recently delivered to the Backup Servicer by the Servicer
pursuant to Section 6.12(e) and shall:
(a) confirm that such Monthly Remittance Report is complete on
its face;
(b) confirm the Remittance Date distributions to be made on
the next Remittance Date pursuant to Section 2.05(c) hereof; and
(c) verify the mathematical accuracy of the following fields
on such Monthly Remittance Report: (i) "Net Eligible Receivables Balance",
(ii) "Delinquency Rate", (iii) "Chargeback Rate" and (iii) "Weighted
Average APR".
(d) deliver to the Agent a certification letter with respect
to the above substantially in the form of Exhibit P hereto on or before
such Remittance Date.
In the event of any discrepancy between the information set forth in
subparagraphs (b) or (c) above as calculated by the Servicer from that
determined or calculated by the Backup Servicer, the Backup Servicer shall
promptly report such discrepancy to the Servicer and the Agent. In the event of
a discrepancy as described in the preceding sentence, the Servicer and the
Backup Servicer shall attempt to reconcile such discrepancies prior to the
related Remittance Date, but in the absence of a reconciliation, distributions
on the related Remittance Date shall be made consistent with the information
calculated by the Servicer, the Servicer and the Backup Servicer shall attempt
to reconcile such discrepancies prior to the next Remittance Date, and the
Servicer shall promptly report to the Agent regarding the progress, if any,
which shall have been made in reconciling such discrepancies. If the Backup
Servicer and the Servicer are unable to reconcile such discrepancies with
respect to such Monthly Remittance Report by the next Remittance Date that falls
in April, July, October or January, the Servicer shall cause independent
accountants acceptable to the Agent, at the Servicer's expense, to examine such
Monthly Remittance Report and attempt to reconcile such discrepancies at the
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earliest possible date (and the Servicer shall promptly provide the Agent with a
report regarding such events). The effect, if any, of such reconciliation shall
be reflected in the Monthly Remittance Report for the next succeeding Remittance
Date.
The Backup Servicer may not resign except upon sixty (60) day's
prior written notice to the Agent, the Servicer and the Borrower. In addition,
the Backup Servicer may be removed by the Agent or the Lender with or without
cause at any time upon thirty (30) day's prior written notice to the Backup
Servicer, the Servicer and the Borrower. In the event of any such resignation or
removal, the Backup Servicer may be replaced by a new Backup Servicer selected
by the Agent upon notice to the Servicer and the Borrower.
SECTION 6.16 Additional Remedies of Agent Upon Event of Default.
During the continuance of any Event of Default, the Agent, in addition to the
rights specified in Section 7.01, shall have the right, in its own name and as
agent for the Lender, to take all actions now or hereafter existing at law, in
equity or by statute to enforce its rights and remedies and to protect the
interests, and enforce the rights and remedies, of the Lender (including the
institution and prosecution of all judicial, administrative and other
proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy, and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
SECTION 6.17 Waiver of Defaults. Upon consent of the Lender, the
Agent may waive any default by the Servicer in the performance of its
obligations hereunder and its consequences. Upon any such waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall be effective unless it shall be in writing and
signed by the Agent on the Lender's behalf and no such waiver shall extend to
any subsequent or other default or impair any right consequent thereon except to
the extent expressly so waived.
SECTION 6.18 Maintenance of Certain Insurance. During the term of
its service as Servicer, the Servicer shall maintain in force an "errors and
omissions" and an employee fidelity insurance policy, in each case, in an amount
not less than $1,000,000 in a form that would cover any loss of Collections by
the Servicer hereunder caused by employee dishonesty, and with an insurance
company reasonably acceptable to the Lender and the Agent. The Servicer shall
prepare and present, on behalf of itself, the Agent and the Lender, claims under
any such policy in a timely fashion in accordance with the terms of such policy,
and upon the filing of any claim on any policy described in this Section, the
Servicer shall promptly notify the Agent of such claim.
SECTION 6.19 Segregation of Collections. The Servicer shall not
commingle funds constituting Collections with any other funds of the Servicer.
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SECTION 6.20 UCC Matters; Protection and Perfection of Pledged
Assets. The Borrower will not make any change to its corporate name or use any
tradenames, fictitious names, assumed names, "doing business as" names or other
names (other than those listed on Schedule III hereto, as such schedule may be
revised from time to time to reflect name changes and name usage permitted under
the terms of this Section 6.20 after compliance with all terms and conditions of
this Section 6.20 related thereto) unless prior to the effective date of any
such name change or use, the Borrower notifies the Agent of such change in
writing and delivers to the Agent such executed financing statements as the
Agent may reasonably request to reflect such name change or use, together with
such other documents and instruments as the Agent may reasonably request in
connection therewith. The Borrower will not change the location of its chief
executive office or the location of its records regarding the Pledged
Receivables unless prior to the effective date of any such change of location,
the Borrower notifies the Agent of such change of location in writing and
delivers to the Agent such executed financing statements as the Agent may
reasonably request to reflect such change of location, together with such
Opinions of Counsel, documents and instruments as the Agent may reasonably
request in connection therewith. The Borrower agrees that from time to time, at
its expense, it will promptly execute and deliver all further instruments and
documents, and take all further action that the Agent may reasonably request in
order to perfect, protect or more fully evidence the Lender's interest in the
Pledged Assets acquired hereunder, or to enable the Lender or the Agent to
exercise or enforce any of their respective rights hereunder. Without limiting
the generality of the foregoing, the Borrower will upon the request of the
Agent: (i) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate or as the Agent may request
(provided that the Borrower shall not be required to execute and file such any
financing statements against individual Consumers), and (ii) ▇▇▇▇ its master
data processing records evidencing such Pledged Receivables with a legend
acceptable to the Agent, evidencing that the Lender has acquired an interest
therein as provided in this Agreement. The Borrower hereby authorizes the Agent
to file one or more financing or continuation statements, and amendments thereto
and assignments thereof, relative to all or any of the Pledged Receivables and
the Related Security related thereto and the proceeds of the foregoing now
existing or hereafter arising without the signature of the Borrower where
permitted by law. Subject to applicable law, a carbon, photographic or other
reproduction of this Agreement or any financing statement covering the Pledged
Receivables, or any part thereof shall be sufficient as a financing statement.
The Borrower shall, upon the request of the Agent at any time after the
occurrence of an Event of Default and at the Borrower's expense, notify the
Obligors obligated to pay any Pledged Receivables, or any of them, of the
security interest of the Lender in the Pledged Assets. If the Borrower fails to
perform any of its agreements or obligations under this Section 6.20, the Agent
may (but shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the expenses of the Agent incurred in connection
therewith shall be payable by the Borrower upon the Agent's demand therefor. For
purposes of enabling the Agent to exercise its rights described in the preceding
sentence and elsewhere in this Article VI, the Borrower and the Lender hereby
authorize each of the Agent and its successors and assigns to take any and all
steps in the Borrower's name and on behalf of the Borrower and the Lender
necessary or desirable, in the determination of the Agent, to collect all
amounts due under any and all Pledged Receivables, including, without
limitation, endorsing the
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Borrower's name on checks and other instruments representing Collections and
enforcing such Pledged Receivables and the related Hypothecation Loan
Agreements, Eligible Developer Sale Agreements and other Contracts and, if any,
the related guarantees.
SECTION 6.21 Servicer Advances. The Servicer may, in its sole
discretion, make an advance in respect of any payment due on a Pledged
Receivable to the extent such payment has not been received by the Servicer as
of its due date and the Servicer reasonably expects such payment will be
ultimately recoverable (a "Servicer Advance"). The Servicer shall deposit into
the Collection Account in immediately available funds the aggregate of all
Servicer Advances to be made during a Remittance Period on or prior to the
Business Day immediately preceding the related Remittance Date. The Servicer
shall be entitled to reimbursement for such Servicer Advances from monies in the
Collection Account as provided in Section 2.05(c) hereof.
SECTION 6.22 [Intentionally omitted].
SECTION 6.23 Repurchase of Receivables Upon Breach of Covenant or
Representation and Warranty by Servicer. (a) The Borrower or the Servicer, as
the case may be, shall inform the other parties to this Agreement promptly, in
writing, upon the discovery of any breach of the Servicer's representations,
warranties and/or covenants pursuant to Section 6.05 or Article V; provided,
however, that the failure to provide any such notice shall not diminish, in any
manner whatsoever, any obligation of the Servicer hereunder to repurchase any
Pledged Receivable. Unless such breach shall have been cured by the last day of
the first full calendar month following the discovery by or notice to the
Servicer of such breach, the Servicer shall have an obligation, and the Borrower
shall and the Agent may, enforce such obligation of the Servicer, to repurchase
any Pledged Receivable materially and adversely affected by such breach. The
Borrower shall notify the Agent promptly, in writing, of any failure by the
Servicer to so repurchase any such Pledged Receivable. In consideration of the
repurchase of such Pledged Receivable, the Servicer shall remit funds in an
amount equal to the Release Price for such Pledged Receivable to the Collection
Account on the date of such repurchase.
(b) In addition to the foregoing and notwithstanding whether any
Pledged Receivable shall have been repurchased by the Servicer pursuant to
Section 6.23(a), the Servicer hereby indemnifies the Borrower, the Agent and the
Lender against all costs, expenses, losses, damages, claims and liabilities,
including reasonable fees and expenses of counsel, which may be asserted against
or incurred by any of them in connection with any of the events or facts giving
rise to a breach of the Servicer's representations, warranties, agreements
and/or covenants set forth in Article V or Article VI.
SECTION 6.24 Compliance with Applicable Law. The Servicer and the
Borrower shall at all times comply in all material respects with all
requirements of applicable federal, state and local laws, and regulations
thereunder (including, without limitation but only if and to the extent
applicable, usury laws, the Federal Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the
Fair Debt Collection Practices Act, the Federal Trade Commission Act, the
▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act,
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the Federal Reserve Board's Regulations "B" and "Z", the Soldiers' and Sailors'
Civil Relief Act of 1940 and state adaptations of the National Consumer Act and
of the Uniform Consumer Credit Code, the Interstate Land Sales Full Disclosure
Act, the Real Estate Settlement Procedures Act and all other consumer credit
laws and equal credit opportunity and disclosure laws and any regulations
promulgated thereunder) in the conduct of its business.
SECTION 6.25 Receipt of Additional UCC Termination Statements, etc.
If, with respect to any Consumer Level Eligible Receivable associated with a
contract number which is listed on Exhibit V hereto, the Servicer shall not have
received and had properly filed in the appropriate jurisdiction within thirty
days of the date hereof a duly executed and proper UCC financing statement
termination (which such UCC financing statement termination, together with
evidence reasonably satisfactory to the Agent of the proper filing thereof,
shall have been delivered to the Agent) terminating the corresponding UCC
financing statement listed to the left of such contract number on Exhibit V
hereto, such Consumer Level Eligible Receivable shall no longer be deemed a
Consumer Level Eligible Receivable and shall no longer be included in the
calculation of the Net Eligible Receivables Balance. In the case of any Consumer
Receivable excluded from the calculation of the Net Eligible Receivables Balance
pursuant to the previous sentence, such Consumer Receivable may at a later time
be included in the calculation of the Net Eligible Receivables Balance,
provided, that (i) the Servicer shall have received and had properly filed in
the appropriate jurisdiction a duly executed and proper UCC financing statement
termination (which such UCC financing statement termination, together with
evidence reasonably satisfactory to the Agent of the proper filing thereof,
shall have been delivered to the Agent) referred to in the previous sentence and
(ii) such Consumer Receivable is otherwise a Consumer Level Eligible Receivable
at such time.
ARTICLE VII.
EVENTS OF DEFAULT
SECTION 7.01 Events of Default. If any of the following events
("Events of Default") shall occur:
(a) the Facility Amount shall be greater than the lesser of (i) the
Capital Limit or (ii) the Borrowing Limit minus the Discount Amount, and
such event shall remain unremedied for three Business Days; or
(b) the occurrence of any Bankruptcy Event with respect to the
Borrower, EFI, Equivest or RFI; or
(c) any representation or warranty made or deemed to be made by the
Borrower, RFI or EFI (or any of their respective officers) under or in
connection with this Agreement, any remittance report or other information
or report delivered pursuant hereto or any other Transaction Document
shall prove to have been false or incorrect in any material respect when
made and remains false or incorrect for five (5) Business Days
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(including, without limitation, any representation or warranty made or
deemed to be made by RFI or EFI (or any of its officers or agents) under
or in connection with either of the Borrower Receivables Purchase
Agreements); provided, however, that if any breach described above is
cured by the repurchase of Receivables pursuant to Article VI of the
applicable Borrower Receivables Purchase Agreement or by a repayment
pursuant to Section 2.17 or a repurchase pursuant to Section 6.23 hereof,
such breach shall cease to constitute an Event of Default; or
(d) (i) the Borrower, RFI or EFI shall fail to perform or observe
any term, covenant or agreement hereunder or under any other Transaction
Document in any material respect and such failure remains unremedied for
twenty (20) Business Days or (ii) either the Servicer (if RFI) or the
Borrower shall fail to make any payment or deposit to be made by it
hereunder or under the Fee Letter when due and such failure remains
unremedied for five (5) Business Days; or
(e) the Borrower, Equivest, RFI, EFI or any other Affiliate of
Equivest shall fail to pay any principal of or premium or interest on any
Debt in an amount in excess of $5,000,000, when the same becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue for five (5) Business
Days 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 Debt or any other event, shall
occur and shall continue for five (5) Business Days 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
(f) the occurrence of any payment default under any of the terms of,
or otherwise in respect of, any agreement, security, note or certificate
related to any Take- Out Securitization and the passage of any applicable
grace period without the cure thereof; or
(g) (i) the Lender shall at any time fail to have a valid,
perfected, first priority security interest in any of the Pledged Assets
or (ii) any purchase by the Borrower of a Receivable under either of the
Borrower Receivables Purchase Agreements shall, for any reason, cease to
create in favor of the Borrower a perfected ownership interest in such
Receivable; provided, however, that if an event described in the foregoing
clause (i) or (ii) is cured by the repurchase of Receivables pursuant to
Article VI of the applicable Borrower Receivables Purchase Agreement or by
a repayment pursuant to Section 2.17 or a repurchase pursuant to Section
6.23 hereof, such event shall cease to constitute an Event of Default; or
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(h) the Borrower, Equivest, RFI or EFI shall have suffered any
material adverse change to its financial condition or operations which
would adversely affect the collectibility of the Pledged Receivables or
the Borrower's, Equivest's, RFI's or EFI's ability to conduct its
business; or
(i) any failure shall have occurred on the part of the Borrower or
RFI duly to observe or perform in any material respect any covenant or
agreement under the Sinking Fund Agreement; or
(j) RFI, EFI, Equivest or the Borrower can no longer conduct
business for any reason; or
(k) either of the Borrower Receivables Purchase Agreements shall
cease to be in full force and effect; or
(l) the occurrence of a Servicer Default (if the Servicer is RFI or
an Affiliate thereof); or
(m) RFI and EFI have at any time a combined Tangible Net Worth in an
amount which shall be less than an amount equal to (A) $25,000,000 plus
(B) seventy- five percent (75%) of the aggregate amount of proceeds
received by RFI or EFI after the date of this Agreement in connection with
(a) each issuance by RFI or EFI of any class or classes of capital stock
after the date of the Agreement and (b) each incurrence of Debt after the
date of this Agreement, other than Debt which shall be the most senior
Debt of RFI or EFI; or
(n) any failure shall have occurred on the part of the Borrower or
RFI duly to observe or perform in any material respect any covenant or
agreement related to any Purchased Rate Cap or any covenant or agreement
under the Sinking Fund Agreement;
then the Agent may, by notice to the Borrower, declare the Early Amortization
Commencement Date to have occurred; provided, that, in the case of any event
described in 7.01(a) above, the Early Amortization Commencement Date shall be
deemed to have occurred automatically upon the occurrence of such event. Upon
any such declaration or automatic occurrence, (i) the Borrower shall cease
purchasing Receivables from RFI and EFI under the Borrower Receivables Purchase
Agreements, (ii) the Lender shall cease issuing commercial paper notes to fund
or maintain the Loans hereunder, (iii) the Liquidity/Credit Enhancement Facility
shall be drawn upon by the Lender from time to time thereafter in order to
retire the maturing commercial paper notes issued to fund or maintain the Loans
hereunder (and the Loans hereunder maintained by the amounts so drawn under the
Liquidity/Credit Enhancement Facility shall bear interest at the Default Funding
Rate), (iv) at the option of the Lender in its sole discretion, the Lender may
declare the Loans made to the Borrower hereunder and all Yield and all Fees
accrued on such Loans and any other Obligations to be immediately due and
payable (and the Borrower shall pay such Loans and all such amounts and
Obligations immediately); and (v) at the option of the
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Lender in its sole discretion, the Agent, on behalf of the Lender, may direct
the Obligors to make all payments under the Pledged Receivables directly to the
Backup Servicer, the Agent, the Lender or any lockbox or account established by
any of such parties. In addition, upon any such declaration or upon any such
automatic occurrence, the Agent and the Lender shall have, in addition to all
other rights and remedies under this Agreement or otherwise, all other rights
and remedies provided under the UCC of the applicable jurisdiction and other
applicable laws, which rights shall be cumulative. If any Event of Default shall
have occurred, the Non-CP Rate and the CP Rate shall be increased to the Default
Funding Rate, effective as of the date of the occurrence of such Event of
Default and shall remain at the Default Funding Rate.
SECTION 7.02 Additional Remedies of Agent and Lender. (a) If, upon
the Lender's declaration that the Loans made to the Borrower hereunder are
immediately due and payable pursuant to Section 7.01 or on the Facility Maturity
Date, the aggregate outstanding principal amount of the Loans, all accrued Fees
and Yield and any other Obligations are not immediately paid in full, then the
Agent, in addition to all other rights specified hereunder, shall have the
right, in its own name and as agent for the Lender, to immediately sell in a
commercially reasonable manner and otherwise in accordance with applicable law,
in a recognized market (if one exists) at such price or prices as the Agent may
reasonably deem satisfactory, any or all Pledged Assets and apply the proceeds
thereof to the Obligations.
(b) The parties recognize that it may not be possible to sell all of
the Pledged Assets on a particular Business Day, or in a transaction with the
same purchaser, or in the same manner because the market for such Pledged Assets
may not be liquid. Accordingly, the Agent may elect, in its sole discretion, the
time and manner of liquidating any Pledged Assets and nothing contained herein
shall obligate the Agent to liquidate any Pledged Assets on the date the Lender
declares the Loans made to the Borrower hereunder to be immediately due and
payable pursuant to Section 7.01 or to liquidate all Pledged Assets in the same
manner or on the same Business Day.
(c) Any amounts received from any sale or liquidation of the Pledged
Assets pursuant to this Section 7.02 in excess of the Obligations will be
returned to the Borrower, its successors or assigns, or to whosoever may be
lawfully entitled to receive the same or as a court of competent jurisdiction
may otherwise direct.
(d) The Agent and the Lenders shall have, in addition to all the
rights and remedies provided herein and provided by applicable federal, state,
foreign, and local laws (including, without limitation, the rights and remedies
of a secured party under the Uniform Commercial Code of any applicable state, to
the extent that the Uniform Commercial Code is applicable, and the right to
offset any mutual debt and claim), all rights and remedies available to the
lenders in law, in equity, or under any other agreement between the Lender and
the Borrower.
(e) Except as otherwise expressly provided in this Agreement, no
remedy provided for by this Agreement shall be exclusive of any other remedy,
and each and every remedy shall be cumulative and in addition to any other
remedy, and no delay or omission to
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exercise any right or remedy shall impair any such right or remedy or shall be
deemed to be a waiver of any Early Amortization Event or Event of Default.
(f) If a Developer is no longer an Eligible Developer, or if a
Development is no longer as Eligible Development, no additional Receivables
resulting from such Developer or Development will be financed under this
Agreement until such time as the circumstance which caused such Developer to
cease to be an Eligible Developer or such Development to cease to be an Eligible
Development no longer exists.
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.01 Indemnities by the Borrower. Without limiting any other
rights which the Agent, the Lender, the Backup Servicer or any of their
respective Affiliates may have hereunder or under applicable law, the Borrower
hereby agrees to indemnify the Agent, the Lender, the Backup Servicer and each
of their respective Affiliates (each an "Indemnified Party" for purposes of this
Article VIII) from and against any and all damages, losses, claims, liabilities
and related costs and expenses, including reasonable attorneys' fees and
disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them arising out of
or as a result of this Agreement or in respect of any Pledged Assets, excluding,
however, Indemnified Amounts to the extent resulting from gross negligence or
willful misconduct on the part of the Agent, the Lender, the Backup Servicer or
such Affiliate. Without limiting the foregoing, the Borrower shall indemnify
each Indemnified Party for Indemnified Amounts relating to or resulting from:
(i) any Pledged Receivable treated as or represented by the
Borrower to be an Eligible Receivable which is not an Eligible Receivable;
(ii) reliance on any representation or warranty made or deemed
made by the Borrower, the Servicer (if RFI or one of its Affiliates) or
any of their respective officers under or in connection with this
Agreement, which shall have been false or incorrect in any material
respect when made or deemed made or delivered;
(iii) the failure by the Borrower or the Servicer (if RFI or
one of its Affiliates) to comply with any term, provision or covenant
contained in this Agreement or any agreement executed in connection with
this Agreement, or with any applicable law, rule or regulation with
respect to any Pledged Assets, or the nonconformity of any Pledged Assets
with any such applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in the Agent, for
the benefit of the Lender, or to transfer to the Agent, for the benefit of
the Lender, a first priority perfected security interest in the
Receivables which are, or are purported to be, Pledged
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Receivables, together with all Collections, Related Security and other
Pledged Assets related thereto (including, without limitation, any and all
Interval's with respect to such Receivables), free and clear of any
Adverse Claim (other than Permitted Liens and Encumbrances) whether
existing at the time of the related Borrowing or at any time thereafter;
(v) the failure to maintain, as of the close of business on
each Business Day prior to the Collection Date, a Facility Amount which is
less than or equal to the lesser of (x) the Borrowing Limit minus the
Discount Amount on such Business Day, or (y) the Capital Limit on such
Business Day (provided, that in determining the Capital Limit for purposes
of this Section 8.01(v), all information used in such determination must
be accurate as of the date of such determination);
(vi) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC or real
property laws of any applicable jurisdiction or other applicable laws with
respect to any Receivables which are, or are purported to be, Pledged
Receivables or the other Pledged Assets related thereto, whether at the
time of any Borrowing or at any subsequent time;
(vii) any dispute, claim, offset or defense (other than the
discharge in bankruptcy of an Obligor) to the payment of any Receivable
which is, or is purported to be, a Pledged Receivable (including, without
limitation, a defense based on such Receivable (or the Contract evidencing
such Receivable) not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms);
(viii)any failure of the Borrower or the Servicer (if RFI or
one of its Affiliates) to perform its duties or obligations in accordance
with the provisions of this Agreement;
(ix) the failure to pay prior to delinquency any taxes payable
in connection with the Pledged Receivables or the Pledged Assets related
thereto;
(x) any repayment by the Agent or the Lender of any amount
previously distributed in payment of Loans or payment of Yield or Fees or
any other amount due hereunder, in each case which amount the Agent or the
Lender believes in good faith is required to be repaid;
(xi) the commingling of Collections of Pledged Receivables at
any time with other funds;
(xii) any investigation, litigation or proceeding related to
this Agreement or the use of proceeds of Loans or the Pledged Assets;
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(xiii) any failure by the Borrower to give reasonably
equivalent value to RFI in consideration for the transfer by RFI to the
Borrower of any Receivable or any attempt by any Person to void or
otherwise avoid any such transfer under any statutory provision or common
law or equitable action, including, without limitation, any provision of
the Bankruptcy Code;
(xiv) any failure of the Borrower, the Servicer or any of
their respective agents or representatives (including, without limitation,
agents, representatives and employees of the Servicer acting pursuant to
authority granted under Section 6.01 hereof) to remit to the Servicer or
the Agent, Collections of Pledged Receivables remitted to the Borrower,
the Servicer or any such agent or representative;
(xv) the failure of the Borrower's computer applications to
resolve any Year 2000 Problem;
(xvi) any failure on the part of the Borrower or RFI duly to
observe or perform in any material respect any covenant or agreement under
the Sinking Fund Agreement; and/or
(xvii) the failure at any time of the Borrower to maintain
funds in the Sinking Fund Account in the amount required under the Sinking
Fund Account Agreement; provided, that such failure has continued beyond
any grace period provided for in the Sinking Fund Agreement.
Any amounts subject to the indemnification provisions of this Section 8.01 shall
be paid by the Borrower to the Agent within five (5) Business Days following the
Agent's written demand therefor.
SECTION 8.02 Indemnities by the Servicer. Without limiting any other
rights which the Agent, the Lender or any of their respective Affiliates may
have hereunder or under applicable law, the Servicer (if RFI or one of its
Affiliates) hereby agrees to indemnify each Indemnified Party from and against
any and all Indemnified Amounts awarded against or incurred by any of them
arising out of or as a result of the Servicer's performance of or failure to
perform its obligations under this Agreement excluding, however, Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct on
the part of the Agent, the Lender or such Affiliate. Without limiting the
foregoing, the Servicer (if RFI or one of its Affiliates) shall indemnify each
Indemnified Party for Indemnified Amounts relating to or resulting from:
(i) any Pledged Receivable treated as or represented by the
Servicer to be an Eligible Receivable which is not an Eligible Receivable;
or
(ii) reliance on any representation or warranty made or deemed
made by the Servicer (if RFI or one of its Affiliates) or any of their
respective officers under or
136
in connection with this Agreement, which shall have been false or
incorrect in any material respect when made or deemed made or delivered;
or
(iii) the failure by the Servicer (if RFI or one of its
Affiliates) to comply with any term, provision or covenant obtained in
this Agreement or any agreement executed in connection with this
Agreement, or with any applicable law, rule or regulation with respect to
any Pledged Assets, or the nonconformity of any Pledged Assets with any
such applicable law, rule or regulation; or
(iv) the failure to vest and maintain vested in the Agent, for
the benefit of the Lender, or to transfer to the Agent, for the benefit of
the Lender, a first priority perfected security interest in the
Receivables which are, or are purported to be, Pledged Receivables,
together with all Collections, Related Security and other Pledged Assets
related thereto (including, without limitation, any and all Interval's
with respect to such Receivables), free and clear of any Adverse Claim
(other than Permitted Liens and Encumbrances) whether existing at the time
of the related Borrowing or at any time thereafter; or
(v) the commingling by the Servicer of Collections of Pledged
Receivables at any time with other funds; or
(vi) any failure of the Servicer or any of its respective
agents or representatives (including, without limitation, agents,
representatives and employees of the Servicer acting pursuant to authority
granted under Section 6.01 hereof) to remit to the Servicer or the Agent,
Collections of Pledged Receivables remitted to the Borrower, the Servicer
or any such agent or representative; and/or
(vii) the failure of the Servicer's computer applications to
resolve any Year 2000 Problem.
Any amounts subject to the indemnification provisions of this Section 8.02 shall
be paid by the Servicer to the Agent within five (5) Business Days following the
Agent's written demand therefor.
Each applicable Indemnified Party shall deliver to the indemnifying
party under Section 8.01 and Section 8.02, within a reasonable time after such
Indemnified Party's receipt thereof, copies of all notices and documents
(including court papers) received by such Indemnified Party relating to the
claim giving rise to the Indemnified Amounts. Each such Indemnified Party will
cooperate with the Borrower and the Servicer in connection with any claim giving
rise to the Indemnified Amounts to minimize the liability of such indemnifying
parties, provided that nothing contained herein shall obligate any such
Indemnified Party to take any action which, in the opinion of such Indemnified
Party, is unlawful or otherwise disadvantageous to such Indemnified Party.
137
ARTICLE IX.
MISCELLANEOUS
SECTION 9.01 Amendments and Waivers. (a) Except as provided in
Section 9.01(b), no amendment or modification of any provision of this Agreement
shall be effective without the written agreement of the Borrower, the Servicer,
the Agent and the Lender, and no termination or, except as set forth in Section
9.12 hereof, waiver of any provision of this Agreement or consent to any
departure therefrom by the Borrower or the Servicer shall be effective without
the written concurrence of the Agent and the Lender. Any waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
(b) Notwithstanding the provisions of Section 9.01(a), in the event
that there is more than one Lender, the written consent of each Lender shall be
required for any amendment, modification or waiver (i) reducing any outstanding
Loans, or the Yield thereon, (ii) postponing any date for any payment of any
Loan, or the Yield thereon, or (iii) modifying the provisions of this Section
9.01, or (iv) increasing the Capital Limit or the Borrowing Limit.
SECTION 9.02 Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including telex communication 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 specified in such party's
Assignment and Acceptance 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 (i) notice by
mail, five days after being deposited in the United States mails, first class
postage prepaid, (ii) notice by telex, when telexed against receipt of
answerback, or (iii) notice by facsimile copy, when verbal communication of
receipt is obtained, except that notices and communications pursuant to Article
II shall not be effective until received.
SECTION 9.03 No Waiver; Remedies. Except as set forth in Section
9.12 hereof, no failure on the part of the Agent or the Lender 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 9.04 Binding Effect; Assignability; Multiple Lenders. (a)
This Agreement shall be binding upon and inure to the benefit of the Borrower,
the Servicer, the Agent, the Lender, the Backup Servicer and their respective
successors and permitted assigns. This Agreement and the Lender's rights and
obligations hereunder and interest herein shall be assignable in whole or in
part (including by way of the sale of participation interests therein) by the
Lender and its successors and assigns. None of the Borrower, the Servicer or the
Backup Servicer may assign any of its rights and obligations hereunder or any
interest herein without the
138
prior written consent of the Lender and the Agent. The parties to each
assignment or participation made pursuant to this Section 9.04 shall execute and
deliver to the Agent for its acceptance and recording in its books and records,
an assignment and acceptance agreement (an "Assignment and Acceptance") or a
participation agreement or other transfer instrument reasonably satisfactory in
form and substance to the Agent and the Borrower. Each such assignment or
participation shall be effective as of the date specified in the applicable
Assignment and Acceptance or other agreement or instrument only after the
execution, delivery, acceptance and recording as described in the preceding
sentence. The Agent shall notify the Borrower of any assignment or participation
thereof made pursuant to this Section 9.04. The Lender may, in connection with
any assignment or participation or any proposed assignment or participation
pursuant to this Section 9.04, disclose to the assignee or participant or
proposed assignee or participant any information relating to the Borrower and
the Pledged Assets furnished to the Lender by or on behalf of the Borrower or
the Servicer; provided, however that the Lender shall obtain an agreement from
such assignee or participant or proposed assignee or participant that they shall
treat as confidential (under terms mutually satisfactory to the Agent and such
assignee or participant or proposed assignee or participant) any information
obtained which is not already publicly known or available.
(b) Whenever the term "Lender" is used herein, it shall mean
Autobahn and/or any other Person which shall have executed an Assignment and
Acceptance; provided, however, that each such party shall have a pro rata share
of the rights and obligations of the Lender hereunder in such percentage amount
(the "Commitment Percentage") as shall be obtained by dividing such party's
commitment to fund Loans hereunder by the total commitment of all parties to
fund Loans hereunder. Any right at any time of the Lender to enforce any remedy,
or instruct the Agent to take (or refrain from taking) any action hereunder,
shall be exercised by the Agent only upon direction by such parties that hold a
majority of the Commitment Percentages at such time.
SECTION 9.05 Term of This Agreement. This Agreement including,
without limitation, the Borrower's obligation to observe its covenants set forth
in Articles V and VI, and the Servicer's obligation to observe its covenants set
forth in Articles V and VI, shall remain in full force and effect until the
Collection Date; provided, however, that the rights and remedies with respect to
any breach of any representation and warranty made or deemed made by the
Borrower or Servicer pursuant to Articles III and IV and the indemnification and
payment provisions of Article VIII and Article IX and the provisions of Section
9.08 and Section 9.09 shall be continuing and shall survive any termination of
this Agreement.
SECTION 9.06 Governing Law; Jury Waiver. THIS AGREEMENT SHALL, IN
ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGA TIONS LAW OF THE STATE OF
NEW YORK, BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
ANY CONFLICTS OF LAW PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF
THE LAWS OF ANY OTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE INTERESTS OF THE LENDER IN THE
139
PLEDGED RECEIVABLES, OR REMEDIES HEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY
THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. EACH OF THE PARTIES
HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREUNDER.
SECTION 9.07 Costs, Expenses and Taxes. (a) In addition to the
rights of indemnification granted to the Backup Servicer, the Agent, the Lender
and its Affiliates under Article VIII hereof, the Borrower agrees to pay on
demand all reasonable costs and expenses of the Backup Servicer, the Lender and
the Agent incurred in connection with the preparation, execution, delivery,
administration of, or any waiver or consent issued or amendment prepared in
connection with, this Agreement, the other Transaction Documents and the other
documents to be delivered hereunder or in connection herewith or therewith or
incurred in connection with any amendment, waiver or modification of this
Agreement, any other Transaction Document, and any other documents to be
delivered hereunder or thereunder or in connection herewith or therewith that is
necessary or requested by any of the Borrower, the Servicer, the Lender or a
Rating Agency or made necessary or appropriate as a result of the actions of any
regulatory, tax or accounting body affecting the Lender and its Affiliates, or
which is related to an Event of Default including, without limitation, the
reasonable fees and reasonable out-of-pocket expenses of counsel for the Backup
Servicer, the Agent and the Lender with respect thereto and with respect to
advising the Backup Servicer, the Agent and the Lender as to their respective
rights and remedies under this Agreement and the other documents to be delivered
hereunder or in connection herewith, and all costs and expenses, if any
(including reasonable counsel fees and expenses), incurred by the Backup
Servicer, the Agent or the Lender in connection with the enforcement of this
Agreement and the other documents to be delivered hereunder or in connection
herewith.
(b) The Borrower shall pay on demand 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 recording of this Agreement,
the other documents to be delivered hereunder or any agreement or other document
providing liquidity support, credit enhancement or other similar support to the
Lender which is specific to this Agreement or the funding or maintenance of
Loans hereunder.
(c) The Custodian shall pay all expenses it incurs in connection
with its services in connection with this Agreement and any other agreements
executed in connection herewith and the transactions contemplated hereby or
thereby.
(d) The Borrower shall pay on demand all other costs, expenses and
taxes (excluding franchise and income taxes) incurred by any Issuer or incurred
by any general or limited partner, or member or shareholder of such Issuer on
behalf of such Issuer related to this Agreement ("Other Costs"), including,
without limitation, the portion of the cost of rating such
140
Issuer's commercial paper by independent financial rating agencies which is
allocable to commercial paper issued to fund Loans hereunder, the cost of
obtaining a shadow rating from the Rating Agencies with respect to the financing
facility provided for under this Agreement and the other Transaction Documents,
the taxes (excluding franchise and income taxes) resulting from such Issuer's
operations which are allocable to the provision of Loans hereunder, and the
reasonable fees and out-of-pocket expenses of counsel for the Issuer with
respect to (i) advising the Issuer as to its rights and remedies under this
Agreement and the other documents to be delivered hereunder or in connection
herewith, (ii) the enforcement of this Agreement and the other documents to be
delivered hereunder or in connection herewith and (iii) advising the Issuer as
to the issuance of the Issuer's commercial paper notes to fund Loans hereunder
and action in connection with such issuance.
SECTION 9.08 No Proceedings. Each of the Borrower, the Agent, the
Servicer and the Lender hereby agrees that it will not institute against, or
join any other Person in instituting against, any Issuer any proceedings of the
type referred to in the definition of Bankruptcy Event so long as any commercial
paper issued by such Issuer shall be outstanding or there shall not have elapsed
one year and one day since the last day on which any such commercial paper shall
have been outstanding. The Servicer hereby agrees that it will not institute
against, or join any other Person in instituting against, the Borrower any
proceedings of the type referred to in the definition of Bankruptcy Event (a)
prior to the Collection Date and (b) so long as any commercial paper issued by a
Lender which is an Issuer shall be outstanding or there shall not have elapsed
one year and one day since the last day on which any such commercial paper shall
have been outstanding.
SECTION 9.09 Recourse Against Certain Parties. No recourse under or
with respect to any obligation, covenant or agreement (including, without
limitation, the payment of any fees or any other obligations) of the Lender or
the Agent as contained in this Agreement or any other agreement, instrument or
document entered into by the Lender or the Agent pursuant hereto or in
connection herewith shall be had against any administrator of the Lender or the
Agent or any incorporator, affiliate, stockholder, officer, employee or director
of the Lender or the Agent or of any such administrator, as such, by the
enforcement of any assessment or by any legal or equitable proceeding, by virtue
of any statute or otherwise; it being expressly agreed and understood that the
agreements of each party hereto contained in this Agreement and all of the other
agreements, instruments and documents entered into by the Lender or the Agent
pursuant hereto or in connection herewith are, in each case, solely the
corporate obligations of such party (and nothing in this Section 9.09 shall be
construed to diminish in any way such corporate obligations of such party), and
that no personal liability whatsoever shall attach to or be incurred by any
administrator of the Lender or the Agent or any incorporator, stockholder,
affiliate, officer, employee or director of the Lender or the Agent or of any
such administrator, as such, or any of them, under or by reason of any of the
obligations, covenants or agreements of the Lender or the Agent contained in
this Agreement or in any other such instruments, documents or agreements, or
which are implied therefrom, and that any and all personal liability of every
such administrator of the Lender or the Agent and each incorporator,
stockholder, affiliate, officer, employee or director of the Lender or the Agent
or of any such administrator, or any of them, for
141
breaches by the Lender or the Agent of any such obligations, covenants or
agreements, which liability may arise either at common law or at equity, by
statute or constitution, or otherwise, is hereby expressly waived as a condition
of and in consideration for the execution of this Agreement. The provisions of
this Section 9.09 shall survive the termination of this Agreement.
SECTION 9.10 Execution in Counterparts; Severability; Integration.
This 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. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement. In case any provision in or obligation
under this 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. This
Agreement contains the final and complete integration of all prior expressions
by the parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof, superseding all prior oral or written understandings
other than the Fee Letter.
SECTION 9.11 Tax Characterization. Notwithstanding any provision of
this Agreement, the parties hereto intend for the transactions effected
hereunder to constitute a financing transaction for federal taxation purposes.
SECTION 9.12 Consent Procedures. In the event that the Borrower or
the Servicer requests in writing the consent or approval of the Agent or the
Lender in connection with (a) any matter with respect to which such consent or
approval is required pursuant to this Agreement or any other Transaction
Document or (b) the waiver of any term or condition of this Agreement or any
other Transaction Document with respect to any requirement or condition of
borrowing hereunder, and the Borrower or the Servicer, as the case may be, does
not receive a written consent or approval, a written denial thereof or a request
for additional information within ten (10) Business Days after the Agent's or
the Lender's, as applicable, receipt of such request, then the Agent or Lender,
as applicable, will be deemed to have consented to or approved the subject
matter of such request.
[Signature page to follow.]
142
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE BORROWER: EFI FUNDING COMPANY, INC.
By:______________________________________
Title:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: 315/422-9477
Confirmation No.: 315/422-9088
THE SERVICER: RESORT FUNDING, INC.
By:______________________________________
Title:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile No.: 315/422-9477
Confirmation No.: 315/422-9088
143
THE AGENT: DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK AG
By:______________________________________
Title:
By:______________________________________
Title:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: 212/745-1651
Confirmation No.: 212/745-1658
THE LENDER: AUTOBAHN FUNDING COMPANY LLC
By: DG BANK Deutsche Genossenschaftsbank
AG, its attorney-in-fact
By:______________________________________
Title:
By:______________________________________
Title:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: 212/745-1651
Confirmation No.: 212/745-1658
144
THE CUSTODIAN: U.S. BANK TRUST NATIONAL ASSOCIATION
By:______________________________________
Title:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: 212/514-6841
Confirmation No.: 212/361-2460
THE BACKUP SERVICER: SAGE SYSTEMS, INC.
By:______________________________________
Title:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: 425/462-0264
Telephone No.: 425/▇▇▇-▇▇▇▇
145
SCHEDULE I
CONDITION PRECEDENT DOCUMENTS
As required by Section 3.01 of the Agreement, each of the following
items must be delivered to the Agent prior to the date of the initial Borrowing:
(a) A copy of this Agreement duly executed by each of the parties
hereto;
(b) A certificate of the Secretary or Assistant Secretary of the
Borrower dated the date of this Agreement, certifying (i) the names and true
signatures of the incumbent officers of the Borrower authorized to sign this
Agreement and the other documents to be delivered by it hereunder (on which
certificate the Agent and the Lender may conclusively rely until such time as
the Agent shall receive from the Borrower a revised certificate meeting the
requirements of this paragraph (b)), (ii) that the copy of the certificate of
incorporation of the Borrower attached thereto is a complete and correct copy
and that such certificate of incorporation has not been amended, modified or
supplemented and is in full force and effect, (iii) that the copy of the by-
laws of the Borrower attached thereto is a complete and correct copy and that
such by-laws have not been amended, modified or supplemented and are in full
force and effect, and (iv) the resolutions of the Borrower's board of directors
approving and authorizing the execution, delivery and performance by the
Borrower of this Agreement and the documents related thereto;
(c) Good standing certificate dated as of a recent date for the
Borrower issued by the Secretary of State of Delaware or, if dated as of a
recent date, a Certificate of Incorporation for the Borrower certified by the
Secretary of State of Delaware;
(d) Acknowledgment copies of proper financing statements (the
"Facility Financing Statements") describing the Pledged Receivables, Related
Security and other Pledged Assets and naming the Borrower as debtor and the
Agent, on behalf of the Lender, as secured party, and other, similar instruments
or documents, as may be necessary or, in the opinion of the Agent or the Lender,
desirable under the UCC of all appropriate jurisdictions or any comparable law
to perfect the Lender's interests in all Pledged Receivables, Related Security
and other Pledged Assets;
(e) Acknowledgment copies of proper financing statements, if any,
necessary to release all security interests and other rights of any Person in
the Pledged Receivables, Related Security and other Pledged Assets previously
granted by RFI or EFI;
(f) Certified copies of requests for information or copies (or a
similar UCC search report certified by a party acceptable to the Agent), dated a
date reasonably near to the date of the initial Borrowing, listing all effective
financing statements (including the Facility Financing Statements) which name
the Borrower (under its present name and any previous
Sch. I-1
name) as debtor and which are filed in the jurisdictions in which the Facility
Financing Statements were filed, together with copies of such financing
statements (none of which, other than the Facility Financing Statements, shall
cover any Pledged Assets);
(g) One or more favorable Opinions of Counsel of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
LLP, counsel to the Borrower, with respect to such matters as the Agent may
reasonably request (including an opinion with respect to the first priority
perfected security interest of the Agent (for the benefit of the Lender) in the
Pledged Receivables, Related Security and other Pledged Assets);
(h) A favorable Opinion of Counsel of ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Goodyear LLP, counsel to the Borrower, with respect to the perfected and, except
in the case of the Lockbox Account, first priority security interest of the
Agent (for the benefit of the Lender) in the Collection Account, the Lockbox
Account and the Sinking Fund Account;
(i) Any necessary third party consents to the closing of the
transactions contemplated hereby;
(j) One or more favorable Opinions of Counsel of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
LLP addressed and acceptable to the Agent with respect to, among other things,
the due authorization, execution and delivery of, and enforceability of, this
Agreement and the other Transaction Documents;
(k) A copy of the documentation converting all Developer Note
Receivables owing by any Affiliates of Equivest or RFI and the related
Applicable Underlying Loan Documents to Purchased Consumer Note Receivables and
related Applicable Underlying Purchase Documents; and
(l) A copy of each of the other Transaction Documents duly executed
by the parties thereto.
(m) One or more favorable Opinions of Counsel of ▇▇▇▇▇▇ & Whitney
LLP, with respect to the first priority perfected security interest of the Agent
(for the benefit of the Lender) in the Pledged Receivables and other Pledged
Assets being held by the Custodian in Minnesota.
Sch. I-2
SCHEDULE II
CREDIT AND COLLECTION POLICY
Attached.
Sch. II-1
SCHEDULE III
PRIOR NAMES, TRADENAMES, FICTITIOUS NAMES
AND "DOING BUSINESS AS" NAMES
EFI Financing Company, Inc.
EFI Funding Company of New York
Sch. III-1
SCHEDULE IV
LITIGATION
None.
Sch. IV-1
EXHIBIT A
FORM OF BORROWING BASE CERTIFICATE
(See attached.)
Exh. A-1
EXHIBIT B
FORM OF COMMERCIAL PAPER REMITTANCE REPORT
(See attached.)
Exh. B-1
EXHIBIT C
FORM OF MONTHLY REMITTANCE REPORT
(See attached.)
Exh. C-1
EXHIBIT D
FORM OF UNDERLYING OPINIONS
Exh. D-1
EXHIBIT E
[Reserved.]
Exh. E-1
EXHIBIT F-1
FORMS OF CONSUMER ALLONGE
(See attached.)
Exh. F-1-1
EXHIBIT F-2
FORMS OF DEVELOPER ALLONGE
(See attached.)
Exh. F-2-1
EXHIBIT G-1
FORM OF PRE-CLOSING HYPOTHECATION LOAN AGREEMENT
(See attached.)
Exh. G-1-1
EXHIBIT G-2
FORM OF POST-CLOSING HYPOTHECATION LOAN AGREEMENT
(See attached.)
Exh. G-2-1
EXHIBIT H-1
FORM OF PRE-CLOSING ELIGIBLE DEVELOPER SALE AGREEMENT
(See attached.)
Exh. H-1-1
EXHIBIT H-2
FORM OF POST-CLOSING ELIGIBLE DEVELOPER SALE AGREEMENT
(NON-EQUIVEST AFFILIATE)
(See attached.)
Exh. H-2-1
EXHIBIT H-3
FORM OF POST-CLOSING ELIGIBLE DEVELOPER SALE AGREEMENT
(EQUIVEST AFFILIATE)
(See attached.)
Exh. H-3-1
EXHIBIT P
BACKUP SERVICER LETTER OF CERTIFICATION
[Date]
DG BANK Deutsche Genossenschaftsbank AG, as Agent
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Asset Securitization Group
Re: Letter of Certification - EFI Funding Company, Inc. Receivables
Facility
We are sending this letter to you pursuant to that certain
Receivables Loan and Security Agreement (the "Agreement") dated as of January
31, 2000, among EFI Funding Company, Inc., as Borrower, Resort Funding, Inc., as
Servicer, Autobahn Funding Company LLC, as Lender, DG BANK Deutsche
Genossenschaftsbank AG, as Agent, U.S. Bank Trust National Association, as
Custodian, and Sage Systems, Inc., as Backup Servicer. Capitalized terms used
herein have the meanings assigned to them in the Agreement.
Sage Systems, Inc. hereby confirms that it has received the Monthly
Remittance Report and a computer tape dated as of the most recently-ended
Remittance Period from the Servicer as required by Section 6.12(e) of the
Agreement, and has performed the reconciliation required under Section 6.15(a)
through (c) of the Agreement. The discrepancies, if any, are noted on the
attached schedule.
Very truly yours,
Sage Systems, Inc.
By:_____________________________
Name:___________________________
Title:____________________________
Exh. P-1
EXHIBIT S
EASTERN RESORTS
--------------------------------------------------------------------------------
RESORTS RESORT LOCATION
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mountain Club Hancock, Massachusetts
Long Wharf Resort Newport, Rhode Island
Inn on Long Wharf Newport, Rhode Island
Inn on the Harbor Newport, Rhode Island
Newport Onshore Newport, Rhode Island
Bay Voyage Inn Jamestown, Rhode Island
Newport Overlook Jamestown, Rhode Island
--------------------------------------------------------------------------------
Exh. S-1
EXHIBIT T
PEPPERTREE RESORTS
--------------------------------------------------------------------------------
RESORTS RESORT LOCATION
--------------------------------------------------------------------------------
Peppertree Outer Banks Beach Club Kill Devil Hills, North Carolina
Peppertree by the Sea N. Myrtle Beach, South Carolina
Peppertree at Blue Ridge Village Banner Elk, North Carolina
Peppertree Ocean Club N. Myrtle Beach, South Carolina
Peppertree Sea Mystique & Garden City, South Carolina
Peppertree Sandpebble Beach Club Surfside, South Carolina
Peppertree Vacation Club Villas Asheville, North Carolina
Peppertree Atlantic Beach Atlantic Beach, North Carolina
Peppertree at Laurel Point Gatlinburg, Tennessee
Peppertree at Tamarack Wisconsin Dells, Wisconsin
Peppertree ▇▇▇▇▇▇ Valley ▇▇▇▇▇▇ Valley, North Carolina
Peppertree Sands N. Myrtle Beach, South Carolina
Peppertree at Thousand Hills Branson, Missouri
Peppertree at Wild Wing Conway, South Carolina
Peppertree Williamsburg Williamsburg, Virginia
--------------------------------------------------------------------------------
Exh. T-1
EXHIBIT V
CONSUMER RECEIVABLES REQUIRING POST-CLOSING
UCC TERMINATION STATEMENTS
--------------------------------------------------------------------------------
Secured Party UCC-1 File Number File Date Contract Number
--------------------------------------------------------------------------------
Bank of Utica 234362 11/12/97 97050370
97050407
--------------------------------------------------------------------------------
Farmers & 000301 1/2/96 ▇▇▇▇▇▇▇▇
Merchants Bank 95080901
95080902
95090076
95090375
--------------------------------------------------------------------------------
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 6/27/97 93090730
93100144
93110316
93100190
95040363
95040388
95040518
95040542
95040176
95090398
95040361
95040407
95120442
95120752
--------------------------------------------------------------------------------
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 10/6/97 96050267
96110706
--------------------------------------------------------------------------------
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 6/27/97 96050267
96070685
96110706
--------------------------------------------------------------------------------
Great Western Bank 245099 12/7/99 96050287
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 12/5/97 95050478
& Trust 94100145
94110411
--------------------------------------------------------------------------------
Citizens Bank of 136215 7/2/97 95050466
Princeton
--------------------------------------------------------------------------------
Exh. T-2
--------------------------------------------------------------------------------
F&M Bank 139933 7/8/97 93120120
93120124
93120141
93040011
93120131
93090203
95070114
95080498
95080475
--------------------------------------------------------------------------------
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 4/6/98 96110706
97110297
--------------------------------------------------------------------------------
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 8/10/98 96110706
97110297
98040465
--------------------------------------------------------------------------------
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 12/7/98 96110706
97110297
98040465
--------------------------------------------------------------------------------
F&M Bank 139928 7/8/97 96110624
97020369
--------------------------------------------------------------------------------
Lafayette Savings 245381 11/28/97 ▇▇▇▇▇▇▇▇
Bank 97070611
97080670
97080672
97090068
97090091
97090437
97090484
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 2/24/97 96120211
& Trust 96120213
96120374
96120375
96120376
96120378
96120381
96120382
96120385
96120388
--------------------------------------------------------------------------------
North Country Bank 046865 3/7/97 96050156
& Trust
--------------------------------------------------------------------------------
Exh. T-3
--------------------------------------------------------------------------------
North Country Bank 046868 3/7/97 97010181
& Trust 97010456
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 7/10/97 ▇▇▇▇▇▇▇▇
Bank and Trust 95080605
Company 95080106
95090620
95100156
95100749
95110142
--------------------------------------------------------------------------------
Citizens Bank of 012977 1/22/96 94020121
Princeton
--------------------------------------------------------------------------------
Exh. T-4
--------------------------------------------------------------------------------
Lafayette Savings 168687 8/13/97 ▇▇▇▇▇▇▇▇
Bank 95040361
95050370
95050710
95090852
95104044
95110563
96020700
96060602
96110088
96110533
97030208
97030488
97030491
97030492
97030533
97030534
97030535
97030538
97030543
97030544
97030547
97030568
97040007
97040008
97040017
97040018
97040035
97040036
97040037
97040039
97040044
97040046
97040066
97040067
97040069
97050535
97060002
97060003
97060145
97060246
--------------------------------------------------------------------------------
Exh. T-5
--------------------------------------------------------------------------------
Lafayette Savings 219047 10/23/97 ▇▇▇▇▇▇▇▇
Bank 95040361
95050370
95050710
95090852
95104044
95110563
96020700
96110088
96110533
97030208
97030488
97030491
97030492
97030533
97030534
97030535
97030538
97030543
97030544
97030547
97030566
97040007
97040008
97040017
97040018
97040035
97040036
97040037
97040039
97040044
97040046
97040066
97040067
97040069
97050535
97050536
97050538
97060002
97060003
97060145
--------------------------------------------------------------------------------
Exh. T-6
--------------------------------------------------------------------------------
Citizens Bank of 136211 7/2/97 94090109
Princeton 94090116
93050093
94050043
94060235
94090121
95040456
95030616
95050130
95050762
95090657
95050727
95050752
95080831
95090774
95090827
95090962
95091213
95090784
95091127
95091167
95098759
95090800
95091137
--------------------------------------------------------------------------------
First State Bank of 088119 5/3/99 99030624
Red Wing
--------------------------------------------------------------------------------
Skylands Community 019573 1/29/98 ▇▇▇▇▇▇▇▇
Bank
--------------------------------------------------------------------------------
First Keystone 047230 3/7/97 94110239
Federal Savings ▇▇▇▇▇▇▇▇
Bank 94120183
--------------------------------------------------------------------------------
First Keystone 047231 3/7/97 95020597
Federal Savings ▇▇▇▇▇▇▇▇
Bank 95030762
95031011
95040079
--------------------------------------------------------------------------------
American State Bank 053749 3/17/97 95020151
and Trust Company 95020416
of Williston 96030194
96030379
--------------------------------------------------------------------------------
Exh. T-7
--------------------------------------------------------------------------------
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ 4/2/97 93070071
95050760
--------------------------------------------------------------------------------
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ 4/2/97 94070331
--------------------------------------------------------------------------------
Exh. T-8
--------------------------------------------------------------------------------
Lafayette Savings 151777 7/29/99 ▇▇▇▇▇▇▇▇
Bank 97030491
97030492
97030533
97030534
97030535
97030538
97030543
97030544
97030547
97030566
97040007
97040018
97040035
97040036
97040037
97040039
97040044
97040046
97040066
97040067
97040069
97050535
97050536
97050538
97060002
97060003
97060145
97070360
97070611
97080588
97080670
97080672
97090068
97090091
97090437
97090484
97090498
97090503
97100006
97100067
97100606
97100645
97100648
--------------------------------------------------------------------------------
Exh. T-9
--------------------------------------------------------------------------------
97100649
97100676
97120108
97197977
97100649
97100676
97120108
97120137
97120145
97120336
97120618
98010328
98030132
98030146
98030150
98030194
98030462
98030494
98030524
98030544
98030559
98030575
98030588
98040103
98040169
98040626
94040655
98040715
98050064
98050629
98051134
98060613
98061207
98061330
98070024
98070975
98070982
98071012
98071083
98080005
98080638
98080889
98090003
98090023
98090029
98090031
98090069
98090155
--------------------------------------------------------------------------------
Exh. T-10
--------------------------------------------------------------------------------
98090794
98100236
98100268
98090794
98100236
98100268
98100646
98100650
98111246
98111268
98111281
98111282
98111287
98111316
98111338
98111473
98120637
99010223
99020034
99031121
--------------------------------------------------------------------------------
Exh. T-11
--------------------------------------------------------------------------------
Lafayette Savings 031462 2/12/98 ▇▇▇▇▇▇▇▇
Bank 97030491
97030492
97030566
97040007
97040008
97040017
97040018
97040035
97040036
97040037
97040039
97040044
97040046
97040066
97040067
97040069
97050389
97050535
97050536
97050538
97060003
97060145
97070611
97060670
97060672
97090091
97090437
97090484
97090603
97100006
97100067
97100606
97100645
97100648
97100649
97100678
97110488
97120106
97120145
97120338
97120618
--------------------------------------------------------------------------------
Exh. T-12
--------------------------------------------------------------------------------
First State Bank of 108267 5/27/97 95071174
Red Wing
--------------------------------------------------------------------------------
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 1/21/98 96110706
97110297
--------------------------------------------------------------------------------
Great Western Bank 167090 8/19/99 96110596
98010248
--------------------------------------------------------------------------------
Great Western Bank 088539 5/4/99 97050584
95080529
--------------------------------------------------------------------------------
First State Bank of 219789 11/1/99 99031295
Red Wing 99093501
99093597
99093616
--------------------------------------------------------------------------------
Exchange Bank of 067450 3/31/98 97120288
Alabama 98020045
--------------------------------------------------------------------------------
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ 8/3/99 96030653
97030368
99031146
99031306
99031312
99060521
99073025
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 3/24/97 96060467
& Trust 96060468
98080470
98080471
98080472
98080473
--------------------------------------------------------------------------------
Exh. T-13