AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
THIS AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (the "Agreement"),
dated as of July 25, 2000 is among FAIRFIELD ACCEPTANCE CORPORATION - NEVADA, a
Delaware corporation, as seller ("Seller"), FAIRFIELD COMMUNITIES, INC., a
Delaware corporation, and the parent corporation of Seller, as co-originator
("FCI"), FAIRFIELD MYRTLE BEACH, INC., a Delaware corporation and a wholly-owned
subsidiary of FCI, as co-originator ("FMB"), SEA GARDENS BEACH AND TENNIS
RESORT, INC., a Florida corporation ("Sea Gardens"), VACATION BREAK RESORTS,
INC., a Florida corporation ("VBR"), VACATION BREAK RESORTS AT STAR ISLAND,
INC., a Florida corporation ("VBRS") (each of Sea Gardens, VBR and VBRS being
wholly-owned subsidiaries of Vacation Break, USA, Inc., a wholly-owned
subsidiary of FCI), PALM VACATION GROUP, a Florida general partnership ("PVG"),
OCEAN RANCH VACATION GROUP, a Florida general partnership ("ORVG") (each of Sea
Gardens, VBR, VBRS, PVG and ORVG are hereinafter collectively referred to as the
"VB Subsidiaries" and PVG and ORVG are hereinafter collectively referred to as
the "VB Partnerships") and FAIRFIELD RECEIVABLES CORPORATION, a special purpose
Delaware corporation, as purchaser (the "Company").
RECITALS
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WHEREAS, FCI, FMB and the VB Subsidiaries originate certain Contracts in
connection with the sale to Obligors of VOIs or Lots at various Developments;
WHEREAS, in the ordinary course of their businesses, FCI purchases from FMB
and the VB Subsidiaries, and Seller purchases from FCI, certain Contracts and
related property (including an interest in the VOIs or Lots underlying such
Contracts);
WHEREAS, (i) FCI, FMB, the VB Subsidiaries, Seller and the Company have
previously entered into a Receivable Purchase Agreement, dated as of January 15,
1998 (the "Existing Receivable Purchase Agreement") for the sale of Contracts
and related Transferred Assets to the Company and (ii) the Company financed the
cash portion of the purchase price of such Contracts and related property, in
part with advances made by EagleFunding Capital Corporation ("EagleFunding")
pursuant to a Credit Agreement, dated as of January 15, 1998, as amended (the
"Existing Credit Agreement"), among Seller, as Servicer, Company, as Borrower,
FCI, EagleFunding, Fleet National Bank (formerly BankBoston, N.A., "Fleet"), as
Collateral Agent, FleetBoston Xxxxxxxxx Xxxxxxxx, Inc. (formerly BancBoston
Securities, Inc., "FRS") as Deal Agent, and CIBC World Markets, Corp. ("CIBC"),
as Deal Co-Agent, which advances were secured by, among other things, a pledge
of the Contracts and related property purchased by Company;
WHEREAS, FCI, FMB, the VB Subsidiaries, Seller and the Company now desire
to enter into this Agreement in order to amend, restate and replace the Existing
Receivables Purchase Agreement in order to allow the parties to continue to
effect the sale of Contracts and related Transferred Assets to the Company from
time to time in the future on Contract Grant Dates; and
WHEREAS, simultaneously with the execution of this Agreement the Company
will amend, restate and replace the Existing Credit Agreement by entering into
an Amended and Restated Credit Agreement, dated as of July 25, 2000 (the "Credit
Agreement"), among Seller, as Servicer, FCI, the Company, as Borrower,
EagleFunding, Falcon Asset Securitization Corporation, and the other commercial
paper conduits who from time to time may become parties thereto, as Conduit
Lenders, Bank One N.A., EagleFunding and the other financial institutions who
from time to time may become parties thereto, as Committed Lenders, Fleet, as
Collateral Agent, FRS, as Deal Agent, CIBC, Banc One Capital Markets ("BOCM")
and the other financial institutions who from time to time may become parties
thereto as Deal Agents, and FRS, BOCM and and the other financial institutions
who from time to time may become parties thereto, as Managing Agents, which
Credit Agreement will be available to the Company to finance the continued
purchase of Contracts and related assets pursuant to this Agreement;
NOW, THEREFORE, in consideration of the purchase price set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
Section 1. Definitions
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All terms used but not otherwise specifically defined herein shall have the
meanings ascribed to them in the Definitions List, dated as of the date hereof,
that refers to this "Amended and Restated Receivables Purchase Agreement" and
which is incorporated herein by this reference. Whenever used in this Agreement,
the following words and phrases shall have the following meanings:
"Contracts" shall mean each interval ownership or lot contract agreement
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and installment note relating to the sale of one or more VOIs or Lots to an
Obligor, together with any separate Obligor's installment note for the payment
of the balance of the purchase price thereof which constitutes the Contracts
which may from time to time be purchased by the Company from the Seller
hereunder and thereafter pledged and assigned by the Company to Collateral Agent
for the benefit of the various lenders under the Credit Agreement.
"Subordinated Note Principal Amount" shall mean (a) $54,446,019.64, which
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represents the principal balance of the Subordinated Note as of the Effective
Restatement Date, plus (b) the Purchase Price of Contracts purchased hereunder
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minus the sum of (i) the amount of cash paid to Seller on any Contract Grant
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Date pursuant to Section 4(b)(i) below and (ii) the amount of any capital
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contribution made by Seller pursuant to Section 4(b)(ii)(B) below, minus (c)
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permitted repayments of principal under the Subordinated Note from and after the
Effective Restatement Date, plus (d) increases in the principal balance of the
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Subordinated Note resulting from payments made by Seller in respect of Carrying
Costs identified in clause (ii) of the definition thereof to the extent payable
by the Company whether pursuant to the Administrative Services Agreement or
otherwise; in each case as described on Schedule A to the Subordinated Note.
Section 2. Purchase and Sale of Contracts.
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(a) Purchases. The Seller and Company acknowledge that pursuant to this
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Agreement and the Credit Agreement, the Seller, at its option and in its sole
discretion, shall be entitled from time to time until the Termination Date to
designate Eligible Contracts to be offered for sale to the Company on Contract
Grant Dates and the Company shall, until the Termination Date and to the extent
the Lenders are obligated to fund such Purchase through additional loans to the
Company under the Credit Agreement, purchase from Seller all of Seller's right,
title and interest in, to and under the Eligible Contracts as listed on the
Contract Schedule delivered by Seller on each Contract Grant Date, together with
all other Transferred Assets relating thereto.
(c) Treatment as Sale. It is the express and specific intent of the parties
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that the transfer of the Contracts and the other Transferred Assets relating
thereto from the Seller to Company, as provided in this Section 2 (each, a
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"Purchase"), is and shall be construed for all purposes as a true, complete and
absolute sale of such Contracts and Transferred Assets.
(d) Recharacterization. To the extent that any transfer of Contracts and
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other Transferred Assets relating thereto from (i) any of FMB or the VB
Subsidiaries to FCI or FCI to Seller, in each case pursuant to the Operating
Agreement or (ii) from Seller to the Company pursuant to this Agreement is not
treated as a sale under applicable law, it is intended that this Agreement shall
constitute a security agreement under applicable law and that each of FMB and
the VB Subsidiaries shall be deemed to have granted to FCI, FCI shall have been
deemed to have granted to Seller, and Seller shall be deemed to have granted to
the Company, a first priority perfected security interest in all of FMB's, the
VB Subsidiaries', FCI's, or Seller's, as the case may be, right, title and
interest in, to and under such Contracts and other Transferred Assets relating
thereto, in order to secure the advance of the aggregate purchase price paid to
the Seller hereunder from time to time; and each of FMB, the VB Subsidiaries,
FCI and Seller, as the case may be, shall be deemed to have (i) collaterally
assigned all of its right, title and interest in, to and under the Contracts and
other Transferred Assets relating thereto pursuant to the assignments executed
in accordance with the Operating Agreement or Section 5(b) hereof, as
applicable, and (ii) waived any and all defenses to the enforceability of such
advance pursuant to this Section 2(d) including, without limitation, any defense
arising under usury laws.
(e) Security Interest in Transferred Assets. FCI, FMB, the VB Subsidiaries
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and Seller acknowledge that the Contracts and other Transferred Assets relating
thereto are subject to the security interest of Collateral Agent for the benefit
of itself and the Lenders pursuant to the Credit Agreement, and that the Lenders
have assigned their rights under the Transactional Commercial Paper Notes
(together with its related rights under the Credit Agreement) to the Liquidity
Providers pursuant to the Liquidity Agreements and Liquidity Security
Agreements.
(f) Other Property. In connection with each Purchase hereunder, the Seller
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also sells, transfers and assigns to Company, all of its right, title and
interest in, to and under the following related property:
(i) all proceeds of the Contracts and other Transferred Assets
including, without limitation, 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 Contracts or other
Transferred Assets
relating thereto and including all payments on Insurance Policies (whether
or not any of the Seller, FCI, FMB, the VB Subsidiaries, Deal Agent, a
Lender, or the Collateral Agent is the loss payee thereof) or any
indemnity, warranty or guaranty payable by reason of loss or damage to or
otherwise with respect to any of the foregoing property, and any security
granted or purported to be granted in respect of any said property; and
(ii) all other monies or property of the Seller specifically relating
to the Contracts and Transferred Assets, or the property described in
clause (i) above, coming into the actual possession or control of the
Company, the Collateral Agent, the Deal Agent or a Lender (whether for
safekeeping, deposit, custody pledge transaction, collection or otherwise).
(g) Quitclaim of Residual Interest by FMB, the VB Subsidiaries and FCI. (i)
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The parties hereto recognize that each of (A) FMB and the VB Subsidiaries has
previously sold, transferred and assigned, or in the future will sell, transfer
and assign, all of its right, title and interest in and to the Contracts
originated by it, and the other Transferred Assets relating thereto to FCI and
(B) FCI has previously sold, transferred and assigned, or in the future will
sell, transfer and assign, all of its right, title and interest in and to the
Contracts originated by it, and the other Transferred Assets relating thereto to
Seller, in each case pursuant to the terms of the Operating Agreement, such
sales and transfers being evidenced and memorialized by one or more blanket
assignments executed by such parties in favor of FCI or Seller, as applicable.
For the avoidance of any doubt and to further evidence the intent of the parties
hereto that all residual right, title and interest in the Contracts and other
Transferred Assets relating thereto are being sold and transferred to the
Company pursuant to this Agreement, each of FCI, FMB and the VB Subsidiaries
hereby irrevocably quitclaim any residual right, title and interest that any of
them may be deemed to have in and to any of the Contracts or other Transferred
Assets relating thereto directly to the Company.
(ii) To the extent that any quitclaim of Contracts and other
Transferred Assets relating thereto from FCI, FMB or the VB Subsidiaries to
the Company contemplated by Section 2(g) above is not treated as a sale
under applicable law, it is intended that this Agreement shall constitute a
security agreement under applicable law and that each of FCI, FMB or the VB
Subsidiaries, as applicable, shall have been deemed to grant to the Company
a first priority perfected security interest in all of FCI's, FMB's or the
VB's Subsidiaries, as the case may be, right, title and interest in, to and
under such Contracts and other Transferred Assets relating thereto in order
to secure the advance of the aggregate purchase price paid to the Seller
hereunder from time to time and each of FCI, FMB and the VB Subsidiaries,
as the case may be, shall be deemed to have waived any and all defenses to
the enforceability of such advance pursuant to this Section 2(g)(ii)
including, without limitation, any defense arising under usury laws.
Section 3. Purchase Price.
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(a) The amount payable to the Seller by Company on each Contract Grant Date
in connection with any Purchase of Contracts hereunder (the "Purchase Price")
shall be an amount equal to ninety-seven percent (97%) of the aggregate
Principal Balance of the Contracts as of the applicable Cut-Off Date therefor.
(b) The parties intend, and each of the Seller and Company shall reflect in
their financial accounting and tax records that the difference between (x) the
aggregate unpaid principal balance of the Contracts as of the Cut-Off Date
therefor and (y) the Purchase Price paid by the Company therefor, shall be a
capital contribution by Seller in accordance with Section 351 of the IRC.
Section 4. Payment of Purchase Price.
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(a) Contract Grant Dates. Payment for and delivery of the Contracts to be
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purchased by the Company on a Contract Grant Date subsequent to the Effective
Restatement Date shall be made at such time and place and to such accounts and
such banks as the parties may agree and in such manner as is consistent with the
terms of the Credit Agreement.
(b) Manner of Payment of Purchase Price. On each Contract Grant Date, the
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Purchase Price shall be paid to Seller in the manner provided below:
(i) in cash, an amount equal to the difference of (x) the aggregate
Principal Balance of Loans being made on the Contract Grant Date, minus (y)
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transaction fees and expenses, if any, payable by the Seller to the
Company; and
(ii) to the extent that the Purchase Price paid on any Grant Date
exceeds the sum of the amount of the cash payment in Section 4(b)(i) above,
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plus the amount of transaction fees and expenses referred to in Section
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4(b)(i), such excess (the "Non-Cash Portion") shall be paid on the Contract
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Grant Date (A) by means of an increase in the principal balance of the
Subordinated Note as agreed upon by the Seller and the Company as set forth
on Schedule A to the Subordinated Note and (B) to the extent that such
increase is less than the amount of such Non-Cash Portion, the remainder of
such Non-Cash Portion shall be deemed to be an additional capital
contribution by Seller in accordance with Section 351 of the IRC.
(e) Scheduled Payments Under Contracts and Cut-Off Dates. The Company shall
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be entitled to all Payments, other Collections and all other funds with respect
to any Contract received after the Cut-Off Date therefor; provided that, on the
Contract Grant Date the Company shall reimburse Seller for an amount equal to
all accrued and paid interest on each Contract at the Contract Rate through, and
including such Contract Grant Date. The principal balance of each Contract as of
the Cut-Off Date therefor is determined after deduction of payments of principal
received before and on such Cut-Off Date. On each Contract Grant Date hereunder,
the Company hereby authorizes and instructs the Servicer, to either (i) deposit,
on the Company's behalf, in the Collection Account established pursuant to the
Credit Agreement or (ii) credit against the portion of the Purchase Price to be
paid in cash, the aggregate amount of funds received, net of accrued and paid
interest, with respect to the Contracts between the Cut-Off Date therefor and
the applicable Contract Grant Date.
Section 5. Conditions to Sale of Contracts.
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(a) Contract Purchases. The Company's obligations hereunder to purchase and
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pay for Contracts and other Transferred Assets on any Contract Grant Date are
subject to the fulfillment of the following conditions:
(i) The Company shall have received (a) the Credit Agreement executed
by all the parties thereto and (b) all conditions to lending set forth in
Section 3.01 and 3.02 of the Credit Agreement shall have been fulfilled, to
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the extent they are capable of being fulfilled prior to the performance by
the Company of its obligations under this Agreement, and a certificate to
such effect delivered by the Company pursuant to the Credit Agreement shall
be conclusive for purposes of this Agreement;
(ii) The representations and warranties of the Seller, FCI, FMB and
the VB Subsidiaries made herein and the Seller as Servicer under the Credit
Agreement shall be true and correct in all material respects on the
Effective Restatement Date.
(iii) The representations and warranties of Seller made herein and as
Servicer in the Credit Agreement shall be true and correct in all material
respects on the Contract Grant Date.
(b) Form of Assignment. In connection with each sale and purchase of
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Contracts and related Transferred Assets hereunder, Seller shall execute an
assignment substantially in the form of Exhibit "A" hereto and deliver the same
to the Company, and the Company shall thereupon execute and deliver to the
Seller, a form of certificate substantially in the form of Exhibit "B" hereto.
Section 6. Transfer of Contracts.
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(a) Pursuant to the Credit Agreement, the Company will transfer, pledge and
Grant all of its right, title and interest in, to and under the Contracts,
Transferred Assets and related property, which constitute the property conveyed
or to be conveyed to it by the Seller to the Collateral Agent for the benefit of
the Lenders pursuant to the Collateral Agency Agreement. All Contracts conveyed
or to be conveyed to the Company hereunder shall be held by Custodian pursuant
to the terms of the Custodial Agreement for the benefit of the Company and
Collateral Agent. Upon each Purchase hereunder, Custodian shall execute and
deliver to the Company, a form of certificate acknowledging receipt of the
Contracts substantially in the form of Exhibit "C" hereto.
(b) Each of FCI and the Seller acknowledges that, pursuant to the Credit
Agreement, the Company may transfer, pledge and grant all of its right, title
and interest in, to and under the Contracts and related Transferred Assets, all
of its right, title and interest hereunder, and its right to exercise the
remedies created hereunder including, without limitation, Section 7(g) hereof,
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to Collateral Agent. Each of FCI and the Seller agrees that, upon such
assignment, Collateral Agent may enforce directly, without joinder of the
Company, all of Seller's and FCI's obligations hereunder, including without
limitation, the repurchase obligations of the Seller set forth in Section 8
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hereof, with respect to breaches of the representations and warranties set forth
in Section 7 hereof.
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Section 7. Representations and Warranties of Seller, FCI, FMB and the VB
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Subsidiaries.
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(a) General Representations and Warranties of Seller, FCI, FMB and the VB
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Subsidiaries. Seller, FCI, FMB and the VB Subsidiaries jointly and severally
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represent and warrant to the Company as follows:
(i) Organization and Good Standing. (A) Seller, FCI, FMB and the VB
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Subsidiaries (other than the VB Partnerships) are corporations duly
organized, validly existing and in good standing under the laws of the
state of their organization and have full corporate power, authority and
legal right to own their properties and conduct their businesses as such
properties are presently owned and such businesses are presently conducted,
and to execute, deliver and perform their obligations under each of the
Facility Documents to which they are a party. Seller, FCI, FMB and the VB
Subsidiaries (other than the VB Partnerships) are duly qualified to do
business and are in good standing as a foreign corporations, and have
obtained all necessary licenses and approvals in each jurisdiction in which
failure to qualify or to obtain such licenses and approvals would render
any Contract unenforceable by Seller, FCI, FMB or the VB Subsidiaries
(other than the VB Partnerships), or would have a Material Adverse Effect.
(B) The VB Partnerships are general partnerships duly organized
and validly existing under the laws of the State of Florida and have
full power, authority and legal right to own their properties and
conduct their businesses as such properties are presently owned and
such businesses are presently conducted, and to execute, deliver and
perform their obligations under each of the Facility Documents to
which they are a party. The VB Partnerships are duly qualified to do
business and are in good standing and have obtained all necessary
licenses and approvals in each jurisdiction in which failure to
qualify or to obtain such licenses and approvals would render any
Contract unenforceable by VB Partnerships or would have a Material
Adverse Effect.
(ii) Due Authorization and No Conflict. The execution, delivery and
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performance by Seller, FCI, FMB and the VB Subsidiaries of each of the
Facility Documents to which they are a party, and the consummation of the
transactions contemplated hereby and under the Facility Documents have in
all cases been duly authorized by Seller, FCI, FMB and the VB Subsidiaries
by all necessary corporate (or in the case of the VB Partnerships,
partnership) action, do not contravene (i) Seller's, FCI's, FMB's or the VB
Subsidiaries' charter or by-laws (or in the case of the VB Partnerships,
partnership agreements), (ii) any law, rule or regulation applicable to
Seller, FCI or FMB or the VB Subsidiaries, (iii) any contractual
restriction contained in any indenture, loan or credit agreement, lease,
mortgage, deed of trust, security agreement, bond, note, or other agreement
or instrument binding on or affecting Seller, FCI, FMB, the VB Subsidiaries
or their properties or (iv) any order, writ, judgment, award, injunction or
decree binding on or affecting Seller, FCI, FMB or their properties (except
where such contravention would not have a Material Adverse Effect, and do
not result in or require the creation of any Lien upon or with respect to
any of their properties; and no transaction contemplated hereby requires
compliance with any bulk sales act or similar law. Each of the other
Facility Documents to which Seller, FCI, FMB or the VB Subsidiaries is a
party have been duly executed and delivered on behalf of Seller, FCI, FMB
and the VB Subsidiaries.
(iii) Governmental and Other Consents. All approvals, authorizations,
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consents, orders or other actions of, and all registration, qualification,
designation, declaration, notice to or filing with, any Person or of any
governmental body or official required in connection with the execution and
delivery of any of the Facility Documents to which Seller, FCI, FMB or the
VB Subsidiaries is a party, the consummation of the transactions
contemplated hereby or thereby, the performance of and the compliance with
the terms hereof or thereof, have been obtained, except where the failure
so to do would not have a Material Adverse Effect.
(iv) Enforceability of Facility Documents. Each of the Facility
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Documents to which the Seller, FCI, FMB or the VB Subsidiaries is a party
have been duly and validly executed and delivered by the Seller, FCI, FMB
or the VB Subsidiaries and constitute the legal, valid and binding
obligation of Seller, FCI, FMB or the VB Subsidiaries, as applicable,
enforceable in accordance with their respective terms, except as
enforceability may be subject to or limited by Debtor Relief Laws or by
general principles of equity (whether considered in a suit at law or in
equity).
(v) No Litigation. Except as otherwise disclosed on FCI's annual
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report on Form 10-K for the year ended December 31, 1999 and Form 10-Q for
the quarter ended March 31, 2000, (collectively the "Base Reports"), which
Base Reports shall have been delivered to the Company, Collateral Agent,
Deal Agent and Lenders prior to the Effective Restatement Date, or except
as otherwise set forth on Schedule 4.01(e) to the Credit Agreement, there
are no proceedings or investigations pending or, to the best knowledge of
Seller, FCI or FMB, threatened against the Seller, FCI, FMB or the VB
Subsidiaries before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (A) asserting the invalidity
of this Agreement or any of the other Facility Documents, (B) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or any of the other Facility Documents, (C) seeking any
determination or ruling that would adversely affect the performance by
Seller, FCI, FMB or the VB Subsidiaries of their obligations under this
Agreement or any of the other Facility Documents, (D) seeking any
determination or ruling that would adversely affect the validity or
enforceability of this Agreement or any of the other Facility Documents, or
(E) seeking any determination or ruling that would, if adversely
determined, be reasonably likely to have a Material Adverse Effect;
provided, however, that in the event the Company, Collateral Agent, Deal
Agent or Lenders shall receive a report dated subsequent to the date of the
Base Reports, which report shall disclose the existence of, and accurately
describe, one or more proceedings or investigations which are not disclosed
in the Base Reports, and neither the Company, Collateral Agent, Deal Agent,
nor Lenders shall not identify in writing to the Seller, FCI, FMB or the VB
Subsidiaries within 90 days of the receipt of such report, one or more of
the proceedings or investigations described in such report as constituting
a proceeding or investigation of a type described in one or more of clauses
(A) through (E) above, the existence of each such proceeding or
investigation not so identified to Seller, FCI, FMB or the VB Subsidiaries
shall be deemed not to constitute a breach of the representation and
warranty of this subsection (v).
(vi) Accuracy of Information. All certificates, reports, financial
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statements and any other written information furnished by or on behalf of
the Seller, FCI, FMB or the VB Subsidiaries to the Company, Managing
Agents, Collateral Agent or Deal Agent, at any time pursuant to any
requirement of, or in response to any request of any such party under, this
Agreement or any other Facility Document or any transaction contemplated
hereby or thereby, have been, and all such certificates, reports, financial
statements and any other written information hereafter furnished by Seller,
FCI, FMB or the VB Subsidiaries to such parties will be, true and accurate
in every respect material to the transactions contemplated hereby on the
date as of which any such certificate, report, financial statement or
similar writing was or will be delivered, and shall not omit to state any
material facts or any facts necessary to make the statements contained
therein not materially misleading.
(vii) Governmental Regulations. Neither Seller, FCI, FMB nor any of
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the VB Subsidiaries, is (i) an "investment company" registered or required
to be registered or required to be registered under the Investment Company
Act of 1940, as amended, (ii) a "public utility company" or a "holding
company," a "subsidiary company" or an "affiliate" of any public utility
company within the meaning of Section 2(a)(5), 2(a)(7), 2(a)(8) or 2(a)(11)
of the Public Utility Holding Company Act of 1935, as amended, or (iii)
otherwise subject to any other federal or state statute or regulation
limiting its ability to incur or pay indebtedness.
(viii) Margin Regulations. Neither Seller, FCI, FMB, nor any of the VB
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Subsidiaries is engaged, principally or as one of its important activities,
in the business of extending credit for the purpose of "purchasing" or
"carrying" any margin stock (as each of the quoted terms is defined or used
in any of Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System, as in effect from time to time). No part of the proceeds of
any of the Loans has been used for so purchasing or carrying margin stock
or for any purpose which violates, or which would be inconsistent with, the
provisions of any of Regulations G, T, U or X of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
(ix) Location of Chief Executive Office and Records. The principal
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place of business and chief executive office of Seller and the office where
Seller maintains all of its Records is located at 0000 Xxxx Xxxxxx Xxxxxx,
Xxxxx 000, Xxx Xxxxx Xxxxxx 00000, the principal place of business and
chief executive office of FCI FMB and each of the VB Subsidiaries, and the
office where FCI, FMB and the VB Subsidiaries maintain all of their
Records, is located at 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx
00000 (provided that, at any time after the Effective Restatement Date,
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upon 30 days' prior written notice to Collateral Agent, any of the Seller,
FCI, FMB, and the VB Subsidiaries may relocate its principal place of
business and chief executive office, and/or the office where Seller, FCI,
FMB or such VB Subsidiary maintains all of its Records, to such other
locations within the United States where all action required by Section
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7.04 of the Credit Agreement shall have been taken and completed (giving
----
effect to the provisions of such Section 7.04 as if each reference to the
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"Borrower" therein is, instead, a reference to each of the Seller, FCI, FMB
and the VB Subsidiaries).
(x) Lock-Box Accounts. Except in the case of any Lock-Box Account
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pursuant to which only Collections in respect of Contracts subject to a PAC
or Credit Card Account are deposited, each of the Seller and FCI has filed
a standing delivery order with the United States Postal Service authorizing
each Lock-Box Bank to receive mail delivered to the related Post Office
Box. The account numbers of all Lock-Box Accounts, together with the names,
addresses, ABA numbers and names of contact persons of all the Lock-Box
Banks maintaining such Lock-Box Accounts and the related Post Office Boxes,
are specified in Exhibit E to the Credit Agreement.
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From and after the Effective Restatement Date, neither FCI, FMB, nor the VB
Subsidiaries shall have any right, title and/or interest in or to any of
the Lock-Box Accounts or the Post-Office Boxes and will maintain no
lock-box accounts in their own names for the collection of Payments in
respect of Contracts. Neither the Seller, FCI, FMB, nor any of the VB
Subsidiaries has any other lock-box accounts for the collection of Payments
in respect of Contracts, except for the Lock-Box Accounts.
(xi) Facility Documents. This Agreement is the only agreement pursuant
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to which Seller sells the Company Contracts, other Transferred Assets or
any other assets of a similar nature. The Seller, FCI, FMB and the VB
Subsidiaries have furnished to each of the Company, Collateral Agent, Deal
Agent, and each Managing Agent, true, correct and complete copies of each
Facility Document to which any of the Seller, FCI, FMB and the VB
Subsidiaries are parties, each of which is in full force and effect.
Neither Seller, FCI, FMB, any of the VB Subsidiaries, nor any Affiliate
thereof is in default of any of its obligations thereunder in any material
respect. All Contracts and related assets are purchased without recourse to
any of the Seller, FCI, FMB or the VB Subsidiaries except as described in
this Agreement. The Purchases by Company under this Agreement constitute
valid and true sales and transfers for consideration (and not merely a
pledge of assets for security purposes), enforceable against creditors of
each of Seller, FCI, FMB and the VB Subsidiaries, and no Contract or
related Collateral shall constitute property of the Seller.
(xii) Ownership of the Company. One hundred percent (100%) of the
-------------------------
outstanding capital stock of the Company is directly owned (both
beneficially and of record) by Seller. Such stock is validly issued, fully
paid and nonassessable and there are no options, warrants or other rights
to acquire capital stock from the Company.
(xiii) Taxes. Each of Seller, FCI, FMB and the VB Subsidiaries have
-----
filed or caused to be filed all Federal, state and local tax returns which
are required to be filed by them, and have paid or caused to be paid all
taxes shown to be due and payable on such returns or on any assessments
received by them, other than any taxes or assessments, the validity of
which are being contested in good faith by appropriate proceedings and with
respect to which Seller, FCI, FMB and the VB Subsidiaries have set aside
adequate reserves on their books in accordance with GAAP and which
proceedings have not given rise to any Lien.
(xiv) Solvency. Each of Seller, FCI, FMB and the VB Subsidiaries both
--------
prior to and after giving effect to each Purchase of Contracts hereunder
(i) is not "insolvent" (as such term is defined in ss.101(32)(A) of the
Bankruptcy Code); (ii) is able to pay its debts as they become due; and
(iii) does not have unreasonably small capital for the business in which it
is engaged or for any business or transaction in which it is about to
engage.
(xv) Reporting and Accounting Treatment. For reporting and accounting
----------------------------------
purposes, and in their books of account and records, the Seller and FCI
will treat the Purchase of each Contract pursuant to this Agreement as a
purchase of, or absolute assignment of, the Seller's full right, title and
ownership interest in each Contract, and the Seller and FCI have not in any
other manner accounted for or treated the transactions.
(xvi) ERISA. There has been no (i) occurrence or expected occurrence
-----
of any Reportable Event with respect to any Plan of FCI, FMB, Seller or any
ERISA Affiliate, or any
withdrawal from, or the termination, Reorganization or Plan Insolvency of
any Multiemployer Plan or (ii) institution of proceedings or the taking of
any other action by PBGC or FCI, FMB, Seller or any ERISA Affiliates or any
such Multiemployer Plan with respect to the withdrawal from or the
termination, Reorganization or Plan Insolvency of, any such Plan.
(xvii) No Adverse Selection. No selection procedures adverse to the
---------------------
Company, the Lenders, the Managing Agents, the Collateral Agent or the Deal
Agent have been employed by any of Seller, FCI, FMB or the VB Subsidiaries
in selecting the Contracts (i) for inclusion in the Contract Pool on any
Contract Grant Date, (ii) intended to be released from the Primary Lien
under Section 7.11(c), or (iii) to be granted to the Collateral Agent
pursuant to Section 7.12 as "Remarketed Contracts."
(xviii) FairShare Plus Program. (A) On any date of determination, for
----------------------
each VOI Regime for which the constituent VOIs are comprised primarily
of UDIs, the ratio of (x) the total number of Points actually
allocated to a VOI Regime pursuant to the FairShare Plus Program at
such time for the next succeeding twelve month period, divided by (y)
----------
the total number of Points which are allocable to occupiable space in
such VOI regime over such twelve month period does not exceed a ratio
of 1.0 to 1.0.
(B) On any date of determination, for each owner of a UDI who is
a member of the FairShare Plus Program, the ratio of (x) the number of
Points allocated to such owner in a VOI Regime in return for assigning
his VOI to the FairShare Plus Program trust divided by (y) the total
----------
number of Points assigned to all UDI owners in such VOI Regime does
not exceed the percentage of such owner's undivided interest in such
VOI Regime as described in such owner's Contract.
The representations and warranties of Seller, FCI, FMB and the VB
Subsidiaries set forth in this Section 7(a) shall be deemed to be remade,
-------------
without further act by any Person, on and as of the Effective Restatement Date
and each Contract Grant Date. The representations and warranties set forth in
this Section 7(a) shall survive the transfer and assignment of the Contracts to
------------
the Company.
(b) Representations and Warranties Regarding the Contracts. Seller and FCI
------------------------------------------------------
jointly and severally represent and warrant to the Company as to each Contract
conveyed on and as of the related Cut-Off Date (except as otherwise expressly
stated) as follows:
(i) Eligibility. Such Contract is an Eligible Contract.
(ii) Contract Schedule. The information set forth in the Contract
------------------
Schedule is true and correct with respect to such Contract.
(iii) No Waivers. The terms of such Contract have not been waived,
----------
altered, modified, or extended in any respect, without the prior written
consent of the Deal Agent, other than (i) extensions which are Permitted
Deferrals, (ii) modifications, entered into in accordance with Customary
Practice and Credit Standards and Collections Policies, which do not reduce
the amount or extend the maturity of required Payments, and (iii)
modifications in the applicability of a PAC (which will, among other
things, result in a change in the relevant Contract Rate).
(iv) Binding Obligation. Such Contract is the legal, valid and binding
------------------
obligation of the Obligor thereunder and is enforceable against the Obligor
in accordance with its terms, except as such enforceability may be limited
by Debtor Relief Laws, or by general principles of equity (whether
considered in a suit at law or in equity).
(v) No Defenses. Such Contract is not subject to any right of
------------
rescission, setoff, counterclaim or defense, including the defense of
usury, the operations of any of the terms of such Contract or the exercise
of any right thereunder will not render such Contract unenforceable in
whole or in a manner materially affecting the value or collectibility of
the Contract or subject to any right of rescission, setoff, counterclaim or
defense, including the defense of usury, and no such right of rescission,
setoff, counterclaim or defense has been asserted with respect thereto.
(vi) Origination. Such Contract was originated by FCI, FMB or one of
-----------
the VB Subsidiaries, as applicable, in the ordinary course of their
businesses and was purchased by (i) FCI from FMB or a VB Subsidiary (if
such Contract was not originated by FCI) or (ii) Seller from FCI in each
case in the regular course of their businesses pursuant to the Operating
Agreement in transactions constituting "true sales".
(vii) Lawful Assignment. Such Contract was not originated in and is
------------------
not subject to the laws of any jurisdiction the laws of which would make
the transfer of the Contract under this Agreement or the Grant of such
Contract under the Credit Agreement unlawful.
(viii) Compliance with Law. The requirements of any federal, state or
-------------------
local law (including, without limitation, usury, truth in lending and equal
credit opportunity laws) applicable to such Contract have been complied
with. The VOI Regime related to such Contract is in compliance with any and
all applicable zoning and building laws and regulations and any other laws
and regulations relating to the use and occupancy of such VOI Regime;
except where such noncompliance would not have a Material Adverse Effect.
Except as disclosed in the Base Reports, none of the Seller, FCI, FMB or
the VB Subsidiaries has received notice of any material violation of any
legal requirements applicable to such VOI Regime; except where such
noncompliance would not have a Material Adverse Effect. The VOI Regime
related to such Contract complies with all applicable state statutes
including, without limitation, condominium statutes, timeshare statutes,
HUD filings relating to interstate land sales (if applicable), and the
requirements of any governmental authority or local authority having
jurisdiction and constitutes a valid and conforming condominium and
timeshare regime under the laws of the State where the related Development
is located; except where such noncompliance would not have a Material
Adverse Effect.
(ix) Contract in Force. Such Contract is in full force and effect and
-----------------
has not been satisfied in whole or in part, or rescinded.
(x) No Subordination. Such Contract has not been subordinated in whole
----------------
or in part.
(xi) Capacity of Parties. All parties to such Contract had capacity to
-------------------
execute the Contract.
(xii) Good Title. The Seller has good and marketable title to such
-----------
Contract free and clear of any Lien (other than the Primary Lien). The
Seller has not sold, assigned or pledged such Contract to any Person other
than the Collateral Agent and the Company. As to the related VOI or Lot,
either, (i) a generally accepted form of title insurance policy, insuring
the fee estate ownership of the Lot or the real property subject to the VOI
Regime by the Persons owning the respective interests therein, and their
successors and assigns was effective at the time the Originator (or a
Subsidiary thereof) acquired the Lot or at the time of registration of the
VOI Regime, is valid and remains in full force and effect, and was issued
by a title insurer qualified to do business in the applicable jurisdiction;
or (ii) at the time the Originator (or a Subsidiary thereof) acquired the
Lot or at the time of registration of the VOI Regime, such fee estate
ownership had been verified by an attorney's opinion of title, the form and
substance of which is of a type acceptable for purposes of registration of
sales of VOI or Lots, and which may be relied upon by Persons subsequently
owning the respective interests therein, and their successors and assigns.
The Seller has not sold, assigned, or pledged its interest in the related
VOI or Lot to any Person other than the Collateral Agent and the Company,
and the Seller's right, title and interest therein is free of any Liens
(other than the Primary Lien and Permitted Encumbrances).
(xiii) No Defaults. As of the relevant Cut-Off Date, there is no
------------
default, breach, violation or event permitting acceleration existing under
the Contract and no event which, with the giving of notice or the
expiration of any grace or cure period or both, would constitute such a
default, breach, violation or event permitting acceleration under such
Contract (after giving effect to Permitted Deferrals). None of Seller, FCI,
FMB or the VB Subsidiaries has waived any such default, breach, violation
or event permitting acceleration without obtaining the prior written
consent of the Collateral Agent.
(xiv) Equal Installments. Such Contract has a fixed rate of interest
-------------------
and provides for payments which fully amortize the loan over its term.
Interest accrues on such Contract on an actuarial (i.e., pre-computed)
basis.
(xv) Original Contracts. All original executed copies of such
-------------------
Contracts are in the custody of the Custodian, except to the extent
otherwise permitted pursuant to Section 4.02(x) of the Credit Agreement.
(xvi) Minimum Downpayment. Such Contract had a minimum Equity
--------------------
Percentage of 10% (or in the case of Contracts the down payment for which
was financed, 15%) at origination (including in such total any cash down
payments and Payments made on any other Contract which has been "traded in"
in connection with the origination of such Contract and downpayments under
such Contract financed over a period not exceeding six months from the date
of origination of such Contract which have actually been paid within such
six month period).
(xvii) Contract Form/Governing Law. Such Contract was executed in
-----------------------------
substantially the form of one of the forms of Contract attached as Exhibit
-------
F to the Credit Agreement, (as such Exhibit F may be amended from time to
- ---------
time in accordance with the Credit Agreement), except for changes required
by applicable law and certain other modifications which do not,
individually or in the aggregate, affect the enforceability or
collectibility of such Contract. In addition, such Contract
was originated in and is governed by the laws of the State in which the
related Development is located, and each such State is a jurisdiction as to
the law of which the Company shall have, on or before the relevant Contract
Grant Date, delivered to the Collateral Agent an Opinion of Counsel
regarding the enforceability of the form or forms of Contract used in such
jurisdiction and such other matters as either such recipient shall
reasonably request, and such Contract is substantially in the form of one
of the forms of Contracts attached as an exhibit to such opinion.
(xviii) No Event of Default. No Event of Default (or Unmatured Event
-------------------
of Default) will occur as a result of the Purchase of the Contract by the
Company pursuant to this Agreement.
(xvix) Reserved.
--------
(xx) Interest in Real Property. The VOI or Lot underlying such
----------------------------
Contract is an interest in real property consisting of either (a) a fixed
week or undivided interest in fee simple in a lodging unit or group of
lodging units at a Development, (b) an undivided leasehold interest in any
lodging unit located at the Harbortown Marina Resort Hotel in Ventura
County, California or the Pagosa Mountain Xxxxxxx VOI Regime at the Pagosa
Development in Xxxxxxxxx County, Colorado or (c) if a lot, a fee simple
interest in real property; and in each case such VOI or Lot has been deeded
to the Nominee pursuant to the terms of one of the Title Clearing
Agreements, or has been deeded to the relevant Obligor in accordance with
the requirements of the applicable Contract or applicable law.
(xxi) Environmental Compliance. Each VOI Regime related to a Contract
------------------------
is now, and at all times during FCI's (or any Affiliate of FCI's) ownership
thereof has been free of contamination from any substance, material or
waste identified as toxic or hazardous according to any federal; state or
local law, rule, regulation or order governing, imposing standards of
conduct with respect to, or regulating in any way the discharge,
generation, removal, transportation, storage or handling of toxic or
hazardous substances, materials or waste (hereinafter referred to as
"Environmental Laws"), including, without limitation, any PCB, radioactive
------------------
substance, methane, asbestos, volatile hydrocarbons, petroleum products or
wastes, industrial solvents or any other material or substance which now or
hereafter may cause or constitute a health, safety or other environmental
hazard to any person or property (any such substance together with any
substance, material or waste identified as toxic or hazardous under any
Environmental Law now in effect or hereinafter enacted shall be referred to
herein as "Contaminants"). Neither FCI nor any Affiliate of FCI has caused
------------
or suffered to occur any discharge, spill, uncontrolled loss or seepage of
any petroleum or chemical product or any Contaminant onto any property
comprising or adjoining any of the VOI Regimes, and neither FCI nor any
Affiliate of FCI nor any Obligor or Occupant of all or part of any of the
VOI Regimes is now or has been involved in operations at; any VOI Regime
which could lead to liability for FCI, the Company, any other Affiliate of
FCI or any other owner of any VOI Regime or the imposition of a lien on
such VOI Regime under any Environmental Law.
Except as set forth on Schedule 4.02(t) to the Credit Agreement, all
-----------------
property owned, managed, or controlled by FCI or any Affiliate of FCI and
located within a Development is now, and has at all times during FCI's (or any
Affiliate of FCI's) ownership, management or control thereof been free of
contamination from any Contaminants. Except as set forth on Schedule 4.02(t) to
----------------
the Credit Agreement, neither FCI nor any Affiliate of FCI has caused or
suffered to occur any
discharge, spill, uncontrolled loss or seepage of any Contaminants onto any
property comprising or adjoining any of the Developments, and neither FCI nor
any Affiliate of FCI nor any Obligor or occupant of all or part of any of any
Development is now or has been involved in operations at any Development which
could lead to liability for FCI, the Company, any other Affiliate of FCI or any
other owner of any Development or the imposition of a lien on such Development
under any Environmental Law. None of the matters set forth on Schedule 4.02(t)
----------------
to the Credit Agreement will have a Material Adverse Effect, a material adverse
effect on the interests of the Lenders or the Collateral Agent in the Collateral
or an adverse effect on the Lenders, the Managing Agents, the Collateral Agent
or the Deal Agent.
(xxii) Tax Liens. All taxes applicable to such Contract and the
----------
related VOI or Lot have been paid; except where the failure to pay would
not have a Material Adverse Effect. There are no delinquent tax liens in
respect of the VOI or Lot underlying such Contract.
(xxiii) Reserved.
--------
(xxiv) Contract Files. The related Contract File contains the
---------------
documents required by Section 4.02(v) of the Credit Agreement.
(xxv) Lock-Box Accounts. The Obligor of such Contract either:
-----------------
(1) shall have been instructed, pursuant to the Seller's routine
distribution of a periodic statement to such Obligor next succeeding
(A) any Contract Grant Date or
(B) the day on which a PAC or Credit Card Account ceased to
apply to such Contract, in the case of a Contract formerly
subject to a PAC or Credit Card Account,
but in no event later than the then next succeeding due date for
Payment under the related Contract, to remit Payments thereunder to a
Post Office Box for credit to a Lock-Box Account, or directly to a
Lock-Box Account, in each case maintained at a Lock-Box Bank pursuant
to the terms of a Lock-Box Agreement substantially in the form of
Exhibit H of the Credit Agreement, or
---------
(2) has entered into a PAC or Credit Card Account, pursuant to
which a deposit account of such Obligor is made subject to a
pre-authorized debit in respect of Payments as they become due and
payable, and the Seller has, and has caused, a Lock-Box Bank and/or
the Collection Account Bank, to take all necessary and appropriate
action to ensure that each such pre-authorized debit is credited
directly to a Lock-Box Account.
(xxvi) Ground Leases. In the case of any Contract relating to a VOI or
-------------
Lot located in Pagosa Mountain Xxxxxxx VOI Regime at the Pagosa Development
in Xxxxxxxxx County, Colorado, (i) the ground lease to which the relevant
Development is subject has a fixed term which terminates after the maturity
of such Contract, and (ii) all rent due and payable for the term of the
relevant ground lease has been fully paid through the date on which this
representation is made (or remade, as the case may be).
(xxvii) Ownership Interest. On or after the relevant Contract Grant
-------------------
Date, the Company shall have a legal, valid and perfected ownership
interest in, and good and marketable title to, the Contract, which interest
in and title to the Contract is free and clear of all liens (other than the
Primary Lien).
All of the representations and warranties of Seller and FCI set forth in
this Section 7(b) shall be deemed to be remade, without further act by any
-------------
Person, on and as of each Cut-Off Date with respect to each Contract Purchased
by the Company on and as of the Effective Restatement Date and each Contract
Grant Date. In addition, each of the representations and warranties of Seller
and FCI set forth in the following subsections of this Section 7(b) shall be
------------
deemed to be remade, without further act by any Person, on and as of each
Business Day hereunder occurring prior to the Collection Date: subsections (i)
(but only with respect to the eligibility criteria set forth in the definition
of "Eligible Contract" in the Definitions List at clauses (a), (b), (c), (d),
(h), (k), (l), (m), (o), (q), (r), (t), (u), (v) and (w) thereof), (iii), (iv),
(v), (viii), (ix), (x), (xii), (xiv), (xv), (xxi), (xxii), (xxiv), (xxv), (xxvi)
and (xxvii). All of the representations and warranties set forth in this Section
-------
7(b) shall survive the Purchase of the respective Contracts by the Company.
----
(c) Representations and Warranties Regarding the Contract Files. Seller and
-----------------------------------------------------------
FCI jointly and severally represent and warrant to the Company as to each
Contract and the related Contract File conveyed by it hereunder as follows:
(i) Possession. On or immediately prior to each Contract Grant Date,
----------
the Custodian will have possession of each original Contract and the
related Contract File being sold to Company on said date, and shall have
acknowledged such receipt, and its undertaking to act as bailee for
purposes of perfection of the Collateral Agent's interests in such original
Contract and the related Contract File (provided, however, that the fact
-------- -------
that any of the Contracts not required to be in its respective Contract
File pursuant to Section 4.02(v) of the Credit Agreement is not in the
possession of the Custodian in its respective Contract File does not
constitute a breach of this representation).
(ii) Marking Records. On or before each Contract Grant Date, the
----------------
Seller shall have caused the portions of the computer files relating to the
Contracts Granted on such date to the Collateral Agent to be clearly and
unambiguously marked to indicate that such Contract constitutes part of the
Collateral Granted by the Company in accordance with the terms of the
Credit Agreement. In addition, prior to each such Grant, each such Contract
shall have been clearly and unambiguously stamped or marked as follows:
"This Contract is part of the Collateral under a Collateral
Agency Agreement, dated as of January 15, 1998, as amended, by and
among Fleet National Bank (formerly BankBoston, N.A) and the secured
parties thereto. A first priority security interest herein is held by
Fleet National Bank, as Collateral Agent for each of the secured
parties under the Collateral Agency Agreement.
The representations and warranties of Seller and FCI set forth in this
Section 7(c) shall be deemed to be remade, without further act by any Person, on
------------
and as of the Effective Restatement Date, and each Contract Grant Date with
respect to the Contracts conveyed to the Company on and as of each such date.
The representations and warranties set forth in this Section 7(c) shall survive
------------
the transfer and assignment of the respective Contracts to the Company.
(d) Survival of Representations and Warranties. It is understood and agreed
------------------------------------------
that the representations and warranties contained in this Section 7 shall remain
---------
operative and in full force and effect, shall survive the transfer and
conveyance of the Contracts by the Seller to the Company and the Grant by the
Company to Collateral Agent and shall inure to the benefit of the Company, the
Collateral Agent and the Lenders and their respective designees, successors and
assigns.
(e) Indemnification of the Company. The Seller and FCI shall jointly and
-------------------------------
severally indemnify, defend and hold harmless the Company against any and all
claims, losses and liabilities (including reasonable attorneys' fees) (all of
the foregoing being collectively referred to as "Indemnified Amounts"), which
--------------------
(i) may at any time be imposed on, incurred by or asserted against the Company
in any way relating to or arising out of this Agreement or the transactions
contemplated hereby or any action taken or omitted by the Company under or in
connection with any of the foregoing, (ii) would not have been imposed on,
incurred by or asserted against the Company but for its having purchased the
Contracts and related Transferred Assets hereunder or (iii) relate to the
services underlying the Contracts or any of the other Transferred Assets or any
act or omission to act by the Seller in respect of any of the Transferred
Assets, excluding, however, (a) recourse for uncollectible Payments under the
--------- -------
Contracts or to insure against default by the Obligors thereunder, (b) any
income, franchise or other taxes (or interest or penalties with respect thereto)
incurred by the Company arising out of or as a result of this Agreement or the
Transferred Assets conveyed hereunder in respect of any Contract and (c) any
claim, expense, cost or liability of the Company under the Credit Agreement or
Liquidity Agreement. Without in any way limiting the foregoing, except as
otherwise provided in this Section 7(e), or Section 12(j) hereof, the Seller
------------ --------------
shall pay to the Company, on demand, any and all amounts necessary to indemnify
the Company from and against any and all Indemnified Amounts relating to or
resulting from: (w) any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, any sales,
gross receipts, intangible personal property, privilege or license taxes, but
not including taxes imposed upon the Company under the laws of the United States
or any jurisdiction within the United States in which the Company is organized
or maintains its principal office or in which the Company books this
transaction; (x) any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, any taxes
which may arise at any time and from time to time in the future in respect of
this Agreement, the transactions contemplated hereby and the subject matter
hereof and thereof; (y) costs, expenses and reasonable counsel fees in defending
against the same, whether arising by reason of the acts to be performed by the
Seller hereunder or imposed against the Company or the Seller, the property
involved or otherwise, or (z) any and all loss, penalties, fines, forfeitures,
legal fees and related costs, judgments and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a breach of the representations and warranties contained in this
Agreement. The agreements in this clause (e) shall survive the collection of all
Contracts, the termination of this Agreement and the payment of all amounts
payable hereunder and under the Contracts. For
purposes of this clause (e), any reference to the Company shall include any
officer, director, employee, agent or affiliate thereof, or any successor or
assignee thereof.
Section 8. Repurchases of Contracts for Breach of Representations and
-------------------------------------------------------------------
Warranties.
----------
(a) Repurchase Obligation. Subject to Section 8(b) hereof, Seller shall
---------------------- ------------
repurchase from the Company, at the Repurchase Price defined immediately below,
any Contract sold by Seller to the Company on the first Settlement Date
occurring following the last day of the immediately preceding Calculation Period
in which Seller becomes aware or receives written notice from the Company or the
Collateral Agent that such Contract is a "Defective Contract"; provided,
--------
however, that with respect to any Contract incorrectly described on the Contract
-------
Schedule only with respect to its Principal Balance on the relevant Cut-Off
Date, which Seller would otherwise be required to repurchase pursuant to this
Section 8(a), Seller may, in lieu of repurchasing such Contract, pay to the
------------
Company on the Business Day next preceding the relevant Notice Settlement Date,
cash in an amount sufficient to cure such deficiency or discrepancy. For
purposes of this Section 8(a) the term "Repurchase Price" shall mean an amount
equal to the product of (x) a factor of .97 multiplied by (y) the remaining
--------------
Principal Balance outstanding on such Contract as of the opening of business on
the latest Determination Date to occur prior to the Settlement Date on which the
repurchase is to be effected hereunder, together with accrued and unpaid
interest thereon at the Contract Rate from the earlier of (i) the last due date
as to which the Obligor paid interest under such Contract or (ii) such
Determination Date, to the Settlement Date on which such repurchase is made. The
Company hereby directs the Seller, for so long as the Credit Agreement is in
effect, to make such payment on its behalf to the Collection Account pursuant to
Section 7(b) hereof. The following defects with respect to documents in any
-------------
Contract File, to the extent they do not impair the validity or enforceability
of the subject document under applicable law, shall not be deemed to constitute
a breach of the representations and warranties contained in Section 7(b):
-------------
misspellings of or omissions of initials in names; name changes from divorce or
marriage; discrepancies as to payment dates in a Contract of no more than 30
days; discrepancies as to Payments of no more than $5.00; discrepancies as to
origination dates of not more than 30 days; inclusion of additional parties
other than the primary Obligor not listed in the Servicer's records or in the
Contract Schedule and non-substantive typographical errors and other
non-substantive minor errors of a clerical or administrative nature.
(b) Repurchases. Seller shall notify the Company of any repurchase not less
-----------
than two Business Days prior to the date on which such repurchase shall be
effected, specifying the Defective Contract and the Repurchase Price therefor.
Upon the repurchase of a Defective Contract pursuant to Section 8(a), Seller
------------
shall, prior to 11:00 A.M. Boston time on the relevant Settlement Date deposit,
on behalf of the Company, deposit or otherwise caused to be retained in the
Collection Account the Repurchase Price.
Upon each repurchase, the Company shall, automatically and without further
action be deemed to sell, transfer, assign, set over and otherwise convey to the
Seller, without recourse, representation or warranty, all the right, title and
interest of the Company in and to such Defective Contract, the VOI or Lot, the
Contract File relating thereto, all monies due or to become due with respect
thereto, all Payments and proceeds thereof (including Payments received from and
including the Determination Date next preceding the date of transfer) and all
other assets related thereto as
described in Sections 2 and 3 hereof . The Company shall execute such documents,
----------------
releases and instruments of transfer or assignment and take such other actions
as shall reasonably be requested by the Seller to effect the conveyance of such
Defective Contract, and the VOI or Lot and Contract File related thereto
pursuant to this subsection.
(c) Except for the remedies set forth in Section 7(e), the obligation of
-------------
Seller to repurchase any Defective Contract shall constitute the sole remedy
against Seller, FCI or their affiliates, respecting any breach of the
representations and warranties set forth in Section 7(b) and (c) available
---------------------
hereunder to the Company; provided, however, that this provision shall not limit
-----------------
in any way rights of the Company against any other Person.
(d) FCI hereby irrevocably and unconditionally guarantees to the
Company, the Collateral Agent, the Deal Agent, each Managing Agent and the
Lenders the due and punctual performance by Seller of all of its repurchase
obligations set forth in this Section 8. Such guaranty by FCI shall be on
identical terms as FCI's guaranty of Seller's servicing obligations as set forth
in Section 9.14(b) of the Credit Agreement.
Section 9. Covenants of Seller and FCI.
---------------------------
(a) Affirmative Covenants of Seller and FCI. At any time prior to the
------------------------------------------
Collection Date, Seller and FCI each covenants and agrees that it shall:
(i) Compliance with Laws, Etc. Comply in all material respects with
--------------------------
all applicable laws, rules, regulations and orders with respect to it, its
business and properties, and all Contracts and Facility Documents to which
it is a party.
(ii) Preservation of Corporate Existence. Preserve and maintain its
------------------------------------
corporate existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified in good standing as
a foreign corporation, and maintain all necessary licenses and approvals,
in each jurisdiction except where the failure to preserve and maintain such
existence, rights, franchises, privileges, qualifications, licenses and
approvals would not have a Material Adverse Effect.
(iii) Audits. At any time and from time to time during regular
------
business hours, permit the Company, and/or its agents, representatives or
assigns, the access rights described in Section 9.04 of the Credit
Agreement, upon the terms and conditions set forth in such Section 9.04
(iv) Keeping of Records and Books of Account. Maintain and implement
---------------------------------------
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing the Contracts in the event of the
destruction or loss of the originals thereof) and keep and maintain, all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Contracts (including, without
limitation, records adequate to permit the daily identification of all
Collections with respect to, and adjustments of amounts payable under, each
Contract).
(v) Performance and Compliance with Receivables and Contracts. At its
---------------------------------------------------------
expense, timely and fully perform and comply in all material respects with
all provisions, covenants and other promises required to be observed by
Seller or FCI under the Contracts.
(vi) Location of Records. Maintain its principal place of business and
-------------------
chief executive office, and the offices where it maintains its Records, at
the addresses referred to in Section 7(a)(ix) hereof or, in any such case,
-----------------------
upon 30 days' prior written notice to the Company, at such other locations
within the United States where all action required by Section 7.04 of the
------------
Credit Agreement shall have been taken and completed (giving effect to the
provisions of such Section 7.04 as if each reference to the "Borrower"
------------
therein is instead a reference to each of the Seller and FCI). Each of
Seller and FCI will at all times maintain its chief executive office and
the offices where it keeps the Records within the United States of America.
(vii) Compliance with ERISA. Comply in all material respects with the
---------------------
provisions of ERISA, the IRC, and all other applicable laws, and the
regulations and interpretations thereunder.
(viii) Ownership Interest. Take such action with respect to each
-------------------
Contract as is necessary to ensure that the Company maintains either a
first priority perfected security interest in or a legal and valid
ownership interest in such Contract and the related Collateral, in each
case free and clear of any Liens (other than the Primary Lien and in the
case of any VOIs of Lots, any Permitted Encumbrance thereon) and respond to
any inquiries with respect to ownership of a Contract sold by it hereunder
by stating that, from and after the applicable Contract Grant Date relating
thereto, it is no longer the owner of such Contract and that ownership of
such Contract is held by the Company subject to the lien of the Credit
Agreement and the Liquidity Security Agreement;
(ix) Instruments. Not remove any portion of the Contracts or related
-----------
Collateral that consists of money or is evidenced by an instrument,
certificate or other writing from the jurisdiction in which it was held at
the date the most recent Opinion of Counsel delivered pursuant to Section
-------
5.01(j) of the Credit Agreement (or from the jurisdiction in which it was
-------
held as described in the Opinion of Counsel delivered on the Effective
Restatement Date if no Opinion of Counsel has yet been delivered pursuant
to Section 5.01(j) of the Credit Agreement) unless the Deal Agent and each
---------------
Managing Agent on behalf of the Lenders in its Lender Group shall have
first received an Opinion of Counsel to the effect that the lien and
security interest created by the Credit Agreement with respect to such
property will continue to be maintained after giving effect to such action
or actions; provided, however, that each of the Collateral Agent and the
-------- -------
Servicer may remove Pledged Contracts from such jurisdiction to the extent
necessary to satisfy any requirement of law or court order, in all cases in
accordance with the provisions of the Custodial Agreement and Section
-------
5.01(n) of the Credit Agreement.
-------
(x) No Release. Not take any action and shall use its best efforts not
----------
to permit any action to be taken by others that would release any Person
from any of such Person's covenants or obligations under any document,
instrument or agreement, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness or, any such
document, instrument or agreement, except as expressly provided in this
Agreement or the Credit Agreement or such other instrument or document.
(xi) Insurance and Condemnation.
--------------------------
(A) FCI (1) shall use its best efforts, in the case of
Developments where FCI or any subsidiary of FCI maintains primary or
substantial responsibility for management, administration or other
services of a similar nature, and (2) shall do or cause to be done all
things which it may accomplish with a reasonable amount of cost or
effort, in the case of Developments where FCI or any Subsidiary of FCI
does not maintain primary or substantial responsibility for
management, administration or other services of a similar nature, to
cause each of the POA's for each Development, to (A) maintain one or
more policies of "all-risk" property and general liability insurance
with financially sound and reputable insurers providing coverage in
scope and amount which (x) satisfies the requirements of the
Declarations (or any similar charter document) governing the POA for
the maintenance of such insurance policies, and (y) is at least
consistent with the scope and amount of such insurance coverage
obtained by prudent POAs and/or management of other similar
developments (including, without limitation, timeshare developments)
in the same jurisdiction; and (B) apply the proceeds of any such
insurance policies in the manner specified in the relevant
Declarations (or any similar charter document) governing the POA
and/or any similar charter documents of such POA (which exercise of
best efforts shall include voting as a member of the POA or as a proxy
or attorney-in-fact for a member). For the avoidance of doubt, the
parties acknowledge that the ultimate discretion and control relating
to the maintenance of any such insurance policies is vested in the POA
in accordance with the respective Declaration (or any similar charter
document) relating to each VOI Regime.
(B) Each of FAC and FCI shall remit to the Collection Account,
the portion of any proceeds received pursuant to a condemnation of
property in any Development relating to any of the VOIs or Lots.
(xii) Separate Identity. Take such action (and cause FMB and the VB
------------------
Subsidiaries to take such action) as is necessary to ensure compliance with
Section 5.01(o) of the Credit Agreement.
---------------
(xiii) Computer Files. Xxxx or cause to be marked each Contract in its
--------------
computer files that the Contracts conveyed to Company hereunder have been
pledged to Collateral Agent.
(xiv) Taxes. File or cause to be filed, and cause each of its
-----
Affiliates with whom it shares consolidated tax liability to file, all
federal, state and local tax returns which are required to be filed by it,
except where the failure to file such returns could not reasonably be
expected to have a Material Adverse Effect, or which could otherwise be
reasonably expected to expose Seller or FCI to a material liability. Each
of Seller and FCI shall pay or cause to be paid all taxes shown to be due
and payable on such returns or on any assessments received by it, other
than any taxes or assessments, the validity of which are being contested in
good faith by appropriate proceedings and with respect to which the Seller,
FCI or the applicable Affiliate shall have set aside adequate reserves on
its books in accordance with GAAP, and which proceedings could not
reasonably be
expected to have a Material Adverse Effect, or which could otherwise be
reasonably expected to expose Seller or FCI to a material liability.
(xv) Facility Documents. Comply in all material respects with the
-------------------
terms of, and employ the procedures outlined under this Agreement and all
of the other Facility Documents to which it is a party, and take all such
action to such end as may be from time to time reasonably requested by the
Company to maintain all such Facility Documents in full force and effect.
(xvi) Contract Schedule. Promptly amend the Contract Schedule to
------------------
reflect terms or discrepancies that become known after any Contract Grant
Date, and promptly notify the Company and Deal Agent of any such
amendments.
(xvii) Segregation of Collections. Prevent the deposit into any of the
--------------------------
Lock-Box Accounts, the Collection Account or the Spread Account of any
funds other than Collections in respect of the Pledged Contracts (except,
in the case of the Spread Account as required by the Credit Agreement)
(provided that this Covenant shall not have been breached to the extent
--------
that items other than Collections, which are not material in the aggregate,
have been mistakenly forwarded by an Obligor directly to any of FCI, FAC or
any of their respective Affiliates, or deposited into any of the Lock-Box
Accounts), and to the extent that any such funds are nevertheless deposited
into any of such Lock-Box Accounts, the Collection Account or the Spread
Account, promptly identify any such funds to the Servicer for segregation
and remittance to the owner thereof.
(b) Negative Covenants of Seller and FCI. At any time prior to the
-----------------------------------------
Collection Date, Seller and FCI each covenants and agrees that it shall not,
without the prior written consent of the Company the Deal Agent and each
Managing Agent:
(i) Sales, Liens, Etc. Against Receivables and Related Security.
-----------------------------------------------------------------
Except for the releases contemplated under Section 7.11 and 7.12 of the
------------ --------
Credit Agreement, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist, any Lien (other than
the Primary Lien and with respect to VOIs and Lots relating to Contracts,
any Permitted Encumbrances thereon) upon or with respect to, any Contract
or any Transferred Assets, or any interests in either thereof, or upon or
with respect to any Lock-Box Account to which any Collections are sent, or
assign any right to receive income in respect thereof. Each of FCI and
Seller shall immediately notify the Company of the existence of any Lien on
any Contract or Transferred Assets, and shall defend the right, title and
interest of the Company in, to and under the Contracts and Transferred
Assets, against all claims of third parties.
(ii) Extension or Amendment of Contract Terms. Extend, amend, waive or
----------------------------------------
otherwise modify the terms of any Contract (other than by way of a
Permitted Deferral or in accordance with Customary Practices), or permit
the rescission or cancellation of any Contract, whether for any reason
relating to a negative change in the related Obligor's creditworthiness or
inability to make any payment under the Contract or otherwise; provided,
--------
however, that the following modifications may be made to a Pledged Contract
-------
from time to time: (i) extensions which are Permitted Deferrals, (ii)
amendments, entered into in accordance with Customary Practices and Credit
Standards and Collections Policies, which do not reduce the amount or
extent
the maturity of required Payments, and (iii) modifications in the
applicability of a PAC (which will, among other things, result in a change
in the relevant Contract Rate).
(iii) Change in Business or Credit and Collection Policy. (A) Make any
--------------------------------------------------
change in the character of its business, or (B) make any change in the
Credit Standards and Collection Policies or deviate from the exercise of
Customary Practices, which change or deviation would, in either case,
materially impair the value or collectibility of any Contract.
(iv) Change in Payment Instructions to Obligors. Add or terminate any
------------------------------------------
bank as a Lock-Box Bank from those listed in Exhibit E to the Credit
---------
Agreement or make any change in its instructions to Obligors regarding
payments to be made to any Lock-Box Account at a Lock-Box Bank, unless the
Company and Deal Agent shall have received (i) 30 days' prior written
notice of such addition, termination or change, (ii) written confirmation
from the Seller or FCI that after the effectiveness of any such
termination, there shall be at least one (1) Lock-Box Account in existence
and (iii) prior to the Effective Restatement Date of such addition,
termination or change, (x) executed copies of Lock-Box Agreements executed
by each new Lock-Box Bank, the Seller, the Company, the Servicer, the
Collateral Agent and the Deal Agent and (y) copies of all agreements and
documents signed by either the Company or the respective Lock-Box Bank with
respect to any new Lock-Box Account.
(v) Change in Corporate Name, Etc. Make any change to its corporate
-------------------------------
name, fictitious names, assumed names or doing business names which existed
on the Effective Restatement Date without providing at least 30-days prior
written notice to the Company and the Deal Agent to the extent all action
required by Section 7.04 of the Credit Agreement shall have been taken and
------------
completed (giving effect to the provisions of such Section 7.04 as if each
------------
reference to the "Borrower" therein is instead a reference to each of
Seller and FCI).
(vi) ERISA Matters. (i) Engage or permit any ERISA Affiliate to engage
-------------
in any prohibited transaction for which an exemption is not available or
has not previously been obtained from the DOL; (ii) permit to exist any
accumulated funding deficiency, as defined in Section 302(a) of ERISA and
Section 412(a) of the IRC, or funding deficiency with respect to any
Benefit Plan other than a Multiemployer Plan; (iii) fail to make any
payments to any Multiemployer Plan that Seller, FCI or any ERISA Affiliate
may be required to make under the agreement relating to such Multiemployer
Plan or any law pertaining thereto; (iv) terminate any Benefit Plan so as
to result in any liability; (v) permit to exist any occurrence of any
reportable event described in Title IV of ERISA which represents a material
risk of a liability of Seller, FCI or any ERISA Affiliate under ERISA or
the IRC; provided, however, Seller's or FCI's ERISA Affiliates may take or
-------- -------
allow such prohibited transactions, accumulated funding deficiencies,
payments, terminations and reportable events described in clauses (i)
through (iv) above so long as such events occurring within any fiscal year
of Seller or FCI, in the aggregate, involve a payment of money by or an
incurrence of liability of any such ERISA Affiliate (collectively, "ERISA
-----
Liabilities") in an amount which does not exceed $500,000.
-----------
(vii) Terminate or Reject Contracts. Without limiting anything in
------------------------------
Section 9(b)(ii) above, terminate or reject any Contract prior to the end
-----------------
of the term of such Contract, whether such rejection or early termination
is made pursuant to an equitable cause, statute, regulation, judicial
proceeding or other applicable law (including, without limitation, Section
365 of the Bankruptcy Code), unless prior to such termination or rejection,
such Contract and any related Collateral have been released from the
Primary Lien pursuant to Section 7.11 of the Credit Agreement in
-------------
consideration of the payment of an appropriate Release Price therefor.
(viii) Facility Documents. Except as otherwise permitted under the
-------------------
Credit Agreement, (a) terminate, amend or otherwise modify any Facility
Document to which it is a party, or grant any waiver or consent thereunder,
or (b) terminate, amend or otherwise modify the FairShare Plus Agreement;
provided, however, (A) the Title Clearing Agreements may be amended for the
-------- -------
purposes of (1) making additional properties subject thereof, (2) making an
Affiliate of FCI a party thereto having the same rights and obligations
thereunder as FCI or (3) identifying a separate pool of Contracts (which
shall not include the Pledged Contracts) to be sold or pledged to secure
debt under a pooling or pledge arrangement similar to that evidenced by
this Credit Agreement, and (B) the FairShare Plus Agreement may be amended
from time to time (1) to substitute or add additional parties thereto, (2)
to comply with state and federal laws or regulations, or (3) for any other
purpose, provided that with respect to this clause (3), FCI or Seller
furnishes to the Company, the Deal Agent and each Managing Agent an Opinion
of Counsel in form and substance acceptable to the Company, the Deal Agent
and each Managing Agent to the effect that such amendment or modification
will not adversely affect in any material respect the respective interests
of the Lenders, any Managing Agent, the Collateral Agent or the Deal Agent.
(ix) Accounting Treatment. Prepare any financial statements or other
---------------------
statements which shall account for the transactions contemplated by this
Agreement in any manner other than as the sale of, or a capital
contribution of, the Contracts by the Seller to the Company.
(x) Insolvency Proceedings. Institute Insolvency Proceedings with
-----------------------
respect to the Company or consent to the institution of Insolvency
Proceedings against the Company, or take any corporate action in
furtherance of any such action, or allow the Company to seek dissolution or
liquidation in whole or in part.
Section 10. Seller Subordinated Note.
------------------------
(a) On the Effective Restatement Date, Company shall execute the Amended
and Restated Subordinated Note substantially in the form of Exhibit "D" hereto
(the "Subordinated Note"). The Subordinated Note shall be calculated pursuant to
the Settlement Report and, on any day, the principal balance thereof shall be
equal to the Subordinated Note Principal Amount.
(b) Interest on the principal amount of the Subordinated Note shall accrue
at a rate set forth in the Subordinated Note. Principal and interest payments on
the Subordinated Note may be made only at the times and to the extent permitted
by the Credit Agreement. Principal amounts outstanding on the Subordinated Note
shall increase concurrently with the payment of the Purchase Price pursuant to
the terms hereof or as otherwise provided under clause (d) of the definition of
Subordinated Note Principal Amount. Except to the extent permitted by the Credit
Agreement, Seller agrees not to ask, demand, xxx for or take or receive from
Company in cash or other property, by set-off or in any other manner, payment of
all or any part of the Subordinated Note.
(c) The Seller agrees upon any distribution of all or any of the assets of
Company to creditors of Company upon the dissolution, winding up, total or
partial liquidation, arrangement, reorganization, adjustment protection, relief,
or composition of Company or its debts, any payment or distribution of any kind
in respect of the Subordinated Note (including, without limitation, cash,
property, securities and any payment or distribution which may be payable or
deliverable by reason of the payment of any other Debt of Company being
subordinated to the payment of the Subordinated Note) that otherwise would be
payable or deliverable upon or with respect to the Subordinated Note, directly
or indirectly, by set-off or in any other manner, including, without limitation,
from or by way of the Collateral, shall be paid or delivered directly to the
Deal Agent for application (in the case of cash) to or as Collateral (in the
case of non-cash property) for the payment or prepayment in full of, the
Obligations until the Obligations shall have been indefeasibly paid in full in
cash. The Deal Agent, each Managing Agent and Collateral Agent are irrevocably
authorized and empowered (in their own name or in the name of the Seller or
otherwise), but shall have no obligation, to demand, xxx for, collect and
receive every payment or distribution referred to in the preceding sentence and
give acquittance therefor and to file claims and proofs of claim and take such
other action (including, without limitation, voting the Subordinated Note and
enforcing any security interest or other lien securing payment of the
Subordinated Note) as may be required to (i) collect the Subordinated Note for
the account of the Lenders and to file appropriate claims or proofs of claim in
respect of the Subordinated Note, (ii) collect and receive any and all payments
or distribution which may be payable or deliverable upon or with respect to the
Subordinated Note. Seller shall execute and deliver to the Deal Agent, each
Managing Agent and Collateral Agent such powers of attorney, assignments or
other instruments as the Deal Agent, each Managing Agent and Collateral Agent
may request in order to enable the Deal Agent, each Managing Agent or Collateral
Agent to enforce any and all claims with respect to, and any security interests
and other liens securing payment of, the Subordinated Note.
(d) All payments or distributions upon or with respect to the Subordinated
Note that are received by the Seller contrary to the provisions of the Credit
Agreement shall be received in trust for the benefit of the Deal Agent, the
Managing Agents and the Lenders and shall be segregated from other funds and
property held by Seller and shall be forthwith paid over to the Deal Agent in
the same form as so received (with any necessary endorsement) to be applied (in
the case of cash) to, or held as Collateral (in the case of non-cash property)
for the payment or prepayment in full of the Obligations until the Obligations
shall have been indefeasibly paid in full in cash. The Seller agrees that no
payment or distribution to the Lenders pursuant to the provisions of the
Subordinated Note shall entitle the Seller to exercise any rights of subrogation
in respect thereof against Company until the Obligations shall have been
indefeasibly paid in full in cash. The Seller and Company hereby waive
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Obligations and any requirement that the Deal Agent, any Managing
Agent or Collateral Agent protect, secure, perfect or insure any security
interest or lien on any property subject thereto or exhaust any right or take
any action against Company or any other Person or any Collateral.
(e) The Seller agrees and confirms that neither the Deal Agent, any
Managing Agent nor Collateral Agent shall have any duty whatsoever to the Seller
as holder of the Subordinated Note and that such Deal Agent, each Managing Agent
and Collateral Agent shall not be liable to the Seller for any action taken or
omitted, to the extent authorized under terms of the Credit Agreement or this
Agreement, with respect to the Subordinated Note.
(f) Prior to the indefeasible payment in full in cash of the Obligations
the Seller will not seek to collect any amounts owing under the Subordinated
Note in any manner or exercise or enforce any of its rights under the
Subordinated Note, except as permitted by the Credit Agreement.
(g) The Seller and Company further agree that at no time hereafter will any
part of the indebtedness represented by the Subordinated Note be represented by
any negotiable instruments or other writings except the Subordinated Note.
(h) The Seller and Company waive notice of and consent to the creation of
the Loans pursuant to the Credit Agreement, and any other Obligation, any
extensions granted by the Lenders, the Deal Agent, the Managing Agents or
Collateral Agent, with respect thereto, the taking or releasing of Collateral or
any obligors or guarantors for the payment thereof, and the releasing of the
Seller or any other subordinating creditors. No failure or delay by the Lenders,
the Deal Agent, the Managing Agents, Collateral Agent or the Liquidity Providers
to exercise any right granted herein, or in any other agreement or bylaw shall
constitute a waiver of such right or of any other right.
(i) The Seller and Company agree to execute and deliver to the Lenders, the
Collateral Agent, the Deal Agent, the Managing Agents and the Liquidity
Providers such additional documents and to take such further actions as the
Lenders, the Collateral Agent, the Deal Agent, the Managing Agents or the
Liquidity Providers may hereafter reasonably require to evidence the
subordination of the Subordinated Note.
(j) The terms of the Subordinated Note and the subordination effected
hereby, and the rights of the Lenders, the Collateral Agent, the Deal Agent, the
Managing Agents and the Liquidity Providers and the obligation of the Seller and
Company arising hereunder, shall not be affected, modified or impaired in any
manner or to any extent by (i) any amendment or modification of or supplement to
any provision of the Facility Documents, or any instrument or document executed
or delivered pursuant thereto or in connection with the transactions
contemplated thereby; (ii) the validity or enforceability of any of such
documents; (iii) any exercise or non-exercise of any right, power or remedy
under or in respect of the Obligations, or any instruments or documents related
thereto or arising at law; or (iv) any waiver, consent release, indulgence,
extension, renewal, modification, delay or other action, inaction, or omission
in respect of any Obligation, or any of the instruments or documents related
thereto.
(k) Neither the Subordinated Note nor any right of the Seller to receive
any payment thereunder, shall be assigned, transferred, exchanged, pledged,
hypothecated, participated or otherwise conveyed; provided, however, that the
-------- -------
Seller may pledge or otherwise transfer the Subordinated Note to Fleet National
Bank for the benefit of itself or any other lender under any senior loan or
credit facility of FAC or FCI or otherwise pledge or transfer the Subordinated
Note to a third party with the prior written consent of Deal Agent; provided,
--------
further, that any assignee of the Subordinated Note shall be bound by all of the
-------
terms applicable to the Subordinated Note set forth in the Facility Documents.
Section 11. Representations and Warranties of the Company.
---------------------------------------------
The Company represents and warrants as of the Effective Restatement Date
and each Contract Grant Date, that:
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has full corporate
power, authority, and legal right to own its properties and conduct its business
as such properties are presently owned and as such business is presently
conducted, and to execute, deliver and perform its obligations under this
Agreement. The Company is duly qualified to do business and is in good standing
as a foreign corporation, and has obtained all necessary licenses and approvals
in each jurisdiction necessary to carry on its business as presently conducted
and to perform its obligations under this Agreement;
(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions provided for in this Agreement have been duly
approved by all necessary corporate action on the part of the Company;
(c) This Agreement constitutes a legal, valid and binding obligation of the
Company, enforceable against it in accordance with its terms, except as such
enforceability may be subject to or limited by Debtor Relief Laws and except as
such enforceability may be limited by general principles of equity;
(d) The execution and delivery of this Agreement, the performance of the
transactions contemplated hereby and the fulfillment of the terms hereof
applicable to the Company will not conflict with, violate, result in any breach
of the material terms and provisions of, or constitute (with or without notice
or lapse of time or both) a material default under any provision of any existing
law or regulation or any order or decree of any court applicable to the Company
or its certificate of incorporation or bylaws or any indenture, contract,
agreement, mortgage, deed of trust, or other instrument to which the Company is
a party or by which it or its properties is bound;
(e) There are no proceedings or investigations pending or, to the best
knowledge of the Company, threatened against the Company before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality (A) asserting the invalidity of this Agreement, (B) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement, (C) seeking any determination or ruling that, in the reasonable
judgment of the Company, would adversely affect the performance by the Company
of its obligations under this Agreement, or (D) seeking any determination or
ruling that would adversely affect the validity or enforceability of this
Agreement;
(f) All approvals, authorizations, consents, orders or other actions of any
person or entity or any governmental body or official required in connection
with the execution and delivery of this Agreement by the Company, the
performance by it of the transactions contemplated hereby and the fulfillment of
the terms hereof, have been obtained and are in full force and effect; and
(g) The Company is solvent and will not become insolvent after giving
effect to the transactions contemplated by this Agreement; the Company has not
incurred Debts beyond its ability to pay; and the Company, after giving effect
to the transactions contemplated by this Agreement, will have an adequate amount
of capital to conduct its business in the foreseeable future.
Section 12. Miscellaneous.
-------------
(a) Amendment. This Agreement may be amended from time to time or the
---------
provisions hereof may be waived or otherwise modified by the parties hereto by
written agreement signed by the parties hereto; provided, however, that no such
-------- -------
amendment, waiver or modification shall be effective without the prior written
consent of the Deal Agent.
(b) Software. (i) Subject to paragraph (b)(ii) below, FCI and each
--------
Originator hereby grants a royalty free perpetual, irrevocable
non-exclusive license to Seller and the Company (which for all purposes of
this License shall include, without limitation, any secured party which
enforces its rights against Seller or the Company or any transferee of any
such secured party which acquires rights in connection with or subsequent
to such enforcement), in, to and under all rights of FCI and each
Originator in or to all intellectual property (including, without
limitation, all computer software, tapes, disks and other electronic media,
books, records and documents) relating to the Contracts; including, without
limitation, any such software, electronic media, books, records and
documents used:
(A) to account for and service the Transferred Assets;
(B) in the management of any VOI resorts, and the VOIs and Lots
located within such VOI resorts,
(C) in the monitoring of accounts receivables and third party
contracts relating to the management of properties located within
any VOI resort, and
(D) in managing and operating the FairShare Plus Program and the
Reservation System;
and all rights of FCI in, to or under all relevant licenses, sublicenses,
leases, contracts (including, without limitation, service and maintenance
contracts), warranties and guaranties relating to any such software,
electronic media, books, records and documents, as the case may be,
including without limitation, all such rights arising under such software,
electronic media, books, records and documents (all of the rights described
in this clause (i) being referred to collectively referred to as the
"Licensed Rights"). Each of Seller and the Company shall have the right to
use all of the Licensed Rights in connection with the conduct of their
respective business as each deems necessary or appropriate, including
without limitation the right to use such Licensed Rights for the purposes
specified in clauses (b)(i)(A)-(D) immediately above and the right to
assign, sublicense or otherwise transfer all or any part of such rights to
one or more third parties in connection with the transfer of all or any
part of the Transferred Assets (including, without limitation, any such
transfer
pursuant to or in connection with the grant by Seller and/or the Company of
a security interest in any or all of its assets and/or the enforcement by
any such secured party of its interests in such assets).
(ii) The license granted to Seller and Company pursuant to clauses
(b)(i)(B)-(D) immediately above, shall only be deemed to confer upon Seller
and Company, and their respective successors and assigns, the sole right to
sub-license the use of such software, electronic media, books, records and
documents (at no charge, except for reimbursement of administrative, legal
and other expenses associated with such sublicense) to (A) FCI (as long as
FCI or any of its subsidiaries is manager of the subject POA) or the
subject POA (in the event FCI or any of its subsidiaries is not the manager
of such POA) in the case of clauses (b)(i)(B)-(C) above or (B) FCI (or if
applciable any successor to FCI) under the FairShare Plus Program in the
case of clause (b)(i)(D) above; provided that, no such sub-license shall be
effective unless and until each of the following events have occurred: (x)
an Event of Default has occurred and is continuing under the Credit
Agreement and (y) FCI is unable to continue, or has been removed, as
manager of the subject POA or the FairShare Plus Program, such removal
occurring other than as a result of action instigated (whether by
institution of a proxy contest or otherwise) by the Company or its
successors and assigns, including Collateral Agent.
(iii) All rights and licenses granted under or pursuant to this clause
(b) (the "License") are, and shall otherwise be deemed to be, for purposes
of Section 365(n) of the United States Bankruptcy Code (the "Code"),
licenses to rights in and to "intellectual property" as defined under the
Code. The parties hereto agree that each of the Seller and the Company, as
licensee of such rights under the License, shall have and retain and may
fully exercise and exploit all of their respective rights under the Code.
The parties hereto further agree that, in the event of the commencement of
bankruptcy proceedings by or against FCI under the Code, each of Seller and
Company, as licensees, shall be entitled to have and retain all of its
rights under the License.
(iv) In an Event of Default has occurred and is continuing under the
Credit Agreement, FCI hereby agrees to provide to any of the persons or
entities described in clauses b(ii)(A) and (B) immediately above, and each
of their successors and assigns, immediately upon the written request of
Seller or Company, copies of all software (including without limitation
both object code and source code), tapes disks, other electronic media,
books, records, documents and other tangible embodiments of the Licensed
Rights.
(c) Assignment. The Company has the right to assign its interest under this
----------
Agreement as may be required to effect the purposes of the Credit Agreement,
without the consent of the Seller or FCI, and the assignee shall succeed to the
rights hereunder of the Company. In addition, but only to the extent allowed by
the Credit Agreement, Collateral Agent, Deal Agent, each Managing Agent and each
Lender has the right to assign its interest hereunder without the written
consent of either Seller or FCI, and the assignee shall succeed to the rights
hereunder of such Collateral Agent, Deal Agent, Managing Agent or Lender.
(d) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
(e) Termination. Seller's and FCI's obligations under this Agreement shall
-----------
survive the sale of the Contracts to the Company, the Company's pledge of the
Contracts to the Collateral Agent under the Credit Agreement, and the Lenders'
pledge and assignment under the Liquidity Security Agreements to the Liquidity
Providers and such obligations shall not terminate until the satisfaction and
payment of all Obligations under the Credit Agreement.
(f) Governing Law. This Agreement shall be construed in accordance with the
-------------
laws of the State of Nevada and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
(g) Notices. All demands and notices hereunder shall be in writing and
-------
shall be deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, or by express delivery service, to (i) in the
case of Seller, Fairfield Acceptance Corporation - Nevada, 0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxxx Xxxxxx 00000, Attention: President, or such other
address as may hereafter be furnished to the Company and FCI in writing by
Seller, (ii) in the case of FCI, FMB and VB Subsidiaries, c/o Fairfield
Communities, Inc., 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000,
Attention: President, or such other address as may hereafter be furnished to
Seller or the Company in writing by FCI, and (c) in the case of the Company,
Fairfield Receivables Corporation, 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxx
Xxxxxx 00000, Attention: President, or such other address an may be furnished to
Seller or FCI in writing by the Company; with a copy of any such notice to
Collateral Agent at 000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000,
Attention: Xxxx X. XxXxxx, or such other address as may hereafter be furnished
to Seller or FCI in writing by the Collateral Agent.
(h) Severability of Provisions. If any one or more of the covenants,
----------------------------
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
(i) Successors and Assigns. This Agreement shall be binding upon each of
----------------------
Seller, FCI and the Company and their respective successors and assigns, as may
be permitted hereunder, and shall inure to the benefit of each of the Seller,
FCI and the Company and each of the Collateral Agent, the Deal Agent, the
Managing Agents, the Lenders and the Liquidity Providers to the extent
explicitly contemplated hereby (including, without limitation, with respect to
the Subordination provisions of Section 10 hereof).
(j) Costs, Expenses and Taxes. (A) Each of Seller and FCI jointly and
--------------------------- severally agrees to pay on demand to Company
(x) all reasonable costs and expenses incurred or reimbursed (or to be
reimbursed) by Company in connection with the preparation, execution and
delivery (including any requested amendments, waivers or consents) of this
Agreement, the other Facility Documents and the other documents to be
delivered hereunder and thereunder, including, without limitation,
reasonable fees and out-of-pocket expenses of counsel (subject, in the case
of fees and expenses of counsel, to the terms of the Fee Letter and (y) all
reasonable costs and expenses, if any, incurred or reimbursed (or to be
reimbursed) by Company (including reasonable counsel fees and expenses), in
connection with the enforcement or preservation of the rights and remedies
under this Agreement and each of the other documents to be delivered
hereunder.
(B) Each of Seller and FCI jointly and severally agrees to pay,
indemnify and hold Company harmless from and against any and all stamp,
sales, excise and other taxes and fees payable or determined to be payable
by or reimbursed (or to be reimbursed) by Company in connection with the
execution, delivery, filing and recording of this Agreement, the other
Facility Documents and the other agreements and documents to be delivered
hereunder and thereunder, and against any liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized, all as of the day
and year first above written.
FAIRFIELD ACCEPTANCE CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Its: President
FAIRFIELD COMMUNITIES, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Its: Treasurer
FAIRFIELD MYRTLE BEACH, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Its: Treasurer
SEA GARDENS BEACH AND
TENNIS RESORT, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Its: Treasurer
VACATION BREAK RESORTS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Its: Treasurer
VACATION BREAK RESORTS AT
STAR ISLAND, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Its: Treasurer
PALM VACATION GROUP, by its
its General Partners:
Vacation Break Resorts at Palm
Aire, Inc.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Its: Treasurer
Palm Resort Group, Inc.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Its: Treasurer
OCEAN RANCH VACATION GROUP,
by its General Partners:
Vacation Break at Ocean Ranch, Inc.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Its: Treasurer
Ocean Ranch Development, Inc.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Its: Treasurer
FAIRFIELD RECEIVABLES CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Its: President
